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TABLE OF CONTENTS
LABOR STANDARDS
I. FUNDAMENTAL PRINCIPLE AND
POLICIES .................................................... 2
A. LEGAL BASIS................................................. 2
A.1 1987 CONSTITUTION .....................................2
A.2 CIVIL CODE ................................................... 5
B. CONSTRUCTION IN FAVOR OF LABOR ...... 5
C. SOCIAL JUSTICE ........................................... 7
II. RECRUITMENT AND PLACEMENT ......... 8
A. ILLEGAL RECRUITMENT .............................. 9
A.1 ESSENTIAL ELEMENTS OF ILLEGAL
RECRUITMENT .................................................... 10
A.2. PROHIBITED ACTIVITIES ............................. 10
A.3. TYPES OF ILLEGAL RECRUITMENT ............ 12
A.4 ILLEGAL RECRUITMENT VS. ESTAFA......... 19
A.5. LIABILITYOF LOCAL RECRUITMENT
AGENCY AND FOREIGN EMPLOYER ................ 20
A.6. TERMINATION OF CONTRACT OF MIGRANT
WORKER WITHOUT JUST CAUSE ..................... 22
A.7. DIRECT HIRING ........................................... 22
B. REGULATIONS OF RECRUITMENT AND
PLACEMENT ACTIVITIES ................................ 23
B.1. SUSPENSION OR CANCELLATION OF
LICENSE OR AUTHORITY .................................. 24
B.2. REGULATORY AND VISITORIAL POWERS OF
THE DOLE SECRETARY ..................................... 24
B.3. REMITTANCE OF FOREIGN EXCHANGE
EARNINGS .......................................................... 25
C. EMPLOYMENT OF NON-RESIDENT
ALIENS ............................................................. 25
C.1. COVERAGE................................................... 26
C.2 CONDITIONS FOR GRANT OF PERMIT....... 26
C.3 VALIDITY OF AEP .................................. 27
C.4 DENIAL OF APPLICATION .................... 27
D. TRAINING AND EMPLOYMENT OF SPECIAL
WORKERS ........................................................18
D.1 APPRENTICES AND LEARNERS RA 7796
(TECHNICAL EDUCATION AND SKILLS
DEVELOPMENT ACT OF 1994 OR TESDA ACT OF
1994) 18
D.2. HANDICAPPED WORKERS – DIFFERENTLY-
ABLED WORKERS .............................................. 52
III. LABOR STANDARDS .......................... 57
A. CONDITIONS OF EMPLOYMENT ............... 58
A.1 SCOPE [ART. 82, LABOR CODE] ................. 58
B. WAGES ........................................................ 59
C. LEAVES ........................................................ 67
C.1. SERVICE INCENTIVE LEAVE PAY .................67
C.2. MATERNITY LEAVE ..................................... 68
C.3. PATERNITY LEAVE [RA 8187 (PATERNITY
LEAVE ACT OF 1996)] ......................................... 69
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C.4. PARENTAL LEAVE FOR SOLO PARENTS [RA
8972 (SOLO PARENTS’ WELFARE ACT OF 2000)]
............................................................................. 70
C.5. SPECIAL LEAVE FOR WOMEN WORKERS
[RA 9710 (THE MAGNA CARTA OF WOMEN),
DOLE DO NO. 112, SERIES OF 2011 AS AMENDED
BY DO NO. 112-A SERIES OF 2012] ..................... 71
D. SPECIAL GROUPS OF EMPLOYEES ...........73
D.1. WOMEN ........................................................ 73
D.2. MINORS ........................................................77
D.3. KASAMBAHAY............................................. 79
D.4. HOMEWORKERS ........................................ 82
D.5. NIGHT WORKERS ....................................... 83
IV. POST-EMPLOYMENT ..........................86
A. EMPLOYER-EMPLOYEE RELATIONSHIP .. 86
A.1. TESTS TO DETERMINE EMPLOYER-
EMPLOYEE (ER-EE) RELATIONSHIP ................. 86
A.2. KINDS OF EMPLOYMENT ........................... 88
A.3. SUB-CONTRACTING VS LABOR-ONLY
CONTRACTING ................................................... 95
B. TERMINATION FROM EMPLOYMENT ..... 100
B.1. TERMINATION OF EMPLOYMENT BY
EMPLOYEE .........................................................102
B.2. TERMINATION BY EMPLOYER ................. 104
B.3 RELIEFS FOR ILLEGAL DISMISSAL ............120
B.4. PREVENTIVE SUSPENSION....................... 126
C. RETIREMENT ............................................. 127
C.1. ELIGIBILITY .................................................. 127
C.2. AMOUNT OF RETIREMENT PAY................128
C.3. RETIREMENT BENEFITS OF WORKERS WHO
ARE PAID BY RESULTS ..................................... 129
C.4. RETIREMENT BENEFIT OF PART-TIME
WORKERS .......................................................... 129
C.5. TAXABILITY ................................................ 129
V. MANAGEMENT PREROGATIVE .......... 131
A. DISCIPLINE ................................................ 133
B. TRANSFER OF EMPLOYEES ..................... 133
C. PRODUCTIVITY STANDARD ..................... 134
D. GRANT OF BONUS .................................... 134
E. CHANGE OF WORKING HOURS ............... 134
F. RULES ON MARRIAGE BETWEEN
EMPLOYEES OF COMPETITOR-EMPLOYERS
........................................................................ 134
G. POST-EMPLOYMENT BAN ....................... 134
VI. SOCIAL WELFARE LEGISLATION ...... 135
A. SSS LAW [RA 8282] .................................. 135
A.1. COVERAGE & EXCLUSIONS ....................... 135
A.2. DEPENDENTS, BENEFICIARIES ................ 136
A.3. BENEFITS.................................................... 136
B. GSIS [RA 8291] ........................................... 139
B.1. COVERAGE & EXCLUSIONS ....................... 139
B.2. DEPENDENTS, BENEFICIARIES ................ 139
B.3. BENEFITS................................................... 140
C. LIMITED PORTABILITY LAW [RA 7699].... 146
 C.1 COVERAGE [SEC. 3] ..................................... 146 E.1. RECOVERY/ADJUDICATORY POWER ...... 225
C.2. PROCESS.................................................... 146 F. DOLE SECRETARY .................................... 226
D. EMPLOYEE’S COMPENSATION – F.1 VISITORIAL AND ENFORCEMENT POWERS
COVERAGE AND WHEN COMPENSABLE .... 146 ........................................................................... 226
D.1 COVERAGE [SEC. 2, RULE I] ....................... 146 F.2 POWER TO SUSPEND/EFFECTS OF
D.2. EFFECTIVITY [SEC. 6, RULE I] ................... 147 TERMINATION .................................................. 226
D.3. WHEN COMPENSABLE ............................. 147 G. VOLUNTARY ARBITRATOR ..................... 227
G.1. JURISDICTION............................................ 227
G.2. REMEDIES ................................................. 228
H. COURT OF APPEALS................................ 228
LABOR RELATIONS H.1 APPEAL VIA RULE 65, RULES OF COURT. 228
I. SUPREME COURT ...................................... 229
VII. LABOR RELATIONS ......................... 149
I.1. RULE 45, RULES OF COURT ...................... 229
A. RIGHT TO SELF-ORGANIZATION ............ 149
J. PRESCRIPTION OF ACTIONS ................... 230
A.1. WHO MAY UNIONIZE FOR PURPOSES OF
J.1. MONEY CLAIMS .......................................... 230
COLLECTIVE BARGAINING? ............................. 150
J.2. ILLEGAL DISMISSAL .................................. 230
A.2. COMMINGLING/MIXTURE OF MEMBERSHIP
J.3. UNFAIR LABOR PRACTICE ........................ 230
........................................................................... 154
J.4. OFFENSES PENALIZED BY THE LABOR
A.3. RIGHTS AND CONDITIONS OF
CODE AND IRR ISSUED PURSUANT THERETO
MEMBERSHIP .................................................... 154
............................................................................ 231
B. BARGAINING UNIT .................................... 157 J.5. ILLEGAL RECRUITMENT............................. 231
C. BARGAINING REPRESENTATIVE ............ 160
C.1. DETERMINATION OF REPRESENTATION
STATUS .............................................................. 160
C.2. UNION SECURITY ...................................... 196
D.UNFAIR LABOR PRACTICE (ULP) ............. 201
D.1. NATURE, ASPECTS .................................... 201
D.2. ULP BY EMPLOYERS ................................ 202
D.3. ULP OF LABOR ORGANIZATIONS .......... 204
E. RIGHT TO PEACEFUL CONCERTED
ACTIVITIES .................................................... 204
E.1. BY LABOR ORGANIZATION ...................... 205
E.2 WHO MAY DECLARE A STRIKE OR
LOCKOUT? ........................................................ 207
E.3 REQUISITES FOR A VALID STRIKE ........... 207
E.4 REQUISITES FOR A VALID LOCKOUT ......... 211
E.5 REQUISITES FOR LAWFUL PICKETING ..... 212
E.6. ASSUMPTION OF JURISDICTION BY THE
DOLE SECRETARY ............................................ 213
E.7. ILLEGAL STRIKE ......................................... 215
E.8. INJUNCTIONS ............................................ 218
F. REQUISITES FOR LABOR INJUNCTIONS 218
H. “INNOCENT BYSTANDER RULE” .............219
VIII. JURISDICTION AND REMEDIES ......220
A. LABOR ARBITER .......................................220
A.1 JURISDICTION ............................................ 220
B. NATIONAL LABOR RELATIONS
COMMISSION (NLRC) ....................................221
B.1 JURISDICTION ............................................. 221
C. BUREAU OF LABOR RELATIONS (BLR) .. 224
C.1. JURISDICTION ........................................... 224
D. NATIONAL CONCILIATION AND
MEDIATION BOARD ...................................... 224
D.1. CONCILIATION VS. MEDIATION ............... 225
D.2. PREVENTIVE MEDIATION ........................ 225
E. DOLE REGIONAL DIRECTORS ................. 225
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LABOR LAW
LABOR STANDARDS

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I. Fundamental
Principle and Policies
A. LEGAL BASIS
A.1 1987 CONSTITUTION
Article II. Secs 9,10,11,13,14,18,20
Section 9.The State shall promote a just and
dynamic social order that will ensure the
prosperity and independence of the nation
and free the people from poverty through
policies that provide adequate social
services, promote full employment, a rising
standard of living, and an improved quality
of life for all.
Section 10. The State shall promote social
justice in all phases of national
development.
General Definition of Social Justice
Social justice is neither communism, nor
despotism, nor atomism, nor anarchy, but the
humanization of laws and the equalization of
social and economic forces by the State so that
justice in its rational and objectively secular
conception may at least be approximated.
[Calalang vs. Williams, G.R. No. 47800 (1940)]
Welfare State
The welfare state concept is found in the
constitutional clause on the promotion of
social justice to ensure the well-being and
economic security of all the people, and in the
pledge of protection to labor with specific
authority to regulate the relations between
landowners and tenants and between labor
and capital. [Alalayan vs. National Power
Corporation, G.R. No. L-24396 (1968)]
Section 11. The State values the dignity of
every human person and guarantees full
respect for human rights.
Section 13. The State recognizes the vital
role of the youth in nation-building and
shall promote and protect their physical,
moral, spiritual, intellectual, and social
well-being. It shall inculcate in the youth
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patriotism and nationalism, and encourage
their involvement in public and civic affairs.
Section 14. The State recognizes the role of
women in nation-building, and shall ensure
the fundamental equality before the law of
women and men.
Section 18. The State affirms labor as a
primary social economic force. It shall
protect the rights of workers and promote
their welfare.
Section 20. The State recognizes the
indispensable role of the private sector,
encourages private enterprise, and provides
incentives to needed investments.
Limits of Social Justice
Social justice should be used only to correct an
injustice. It must be founded on the
recognition of the necessity of
interdependence among diverse units of a
society, and of the protection that should be
equally and evenly extended to all groups as a
combined force in our social and economic life.
As partners in nation-building, labor and
management need each other to foster
productivity and economic growth; hence, the
need to weigh and balance the rights and
welfare of both the employee and employer.
[Agabon vs. NLRC, G.R. No. 158693 (2004)]
The policy of social justice is not intended to
countenance wrongdoing simply because it is
committed by the underprivileged. At best it
may mitigate the penalty but it certainly will
not condone the offense. Compassion for the
poor is an imperative of every humane society
but only when the recipient is not a rascal
claiming an undeserved privilege. Social
justice cannot be permitted to be a refuge of
scoundrels any more than can equity be an
impediment to the punishment of the guilty.
Those who invoke social justice may do so only
if their hands are clean and their motives
blameless and not simply because they
happen to be poor. This great policy of our
Constitution is not meant for the protection of
those who have proved they are not worthy of
it, like the workers who have tainted the cause
of labor with the blemishes of their own
character. [Tirazona vs. Philippine EDS
Techno-Service Inc., G.R. No. 169712 (2009)]
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Laissez Faire
The Constitution is primarily a document of
social justice, and although it has recognized
the importance of the private sector, it has not
embraced fully the concept of laissez-faire or
relied on pure market forces to govern the
economy. [Employees Confederation of the
Philippines vs. NWPC, G.R. No. 96169 (1991)]
Balancing of Interests
It is high time that employer and employee
cease to view each other as adversaries and
instead recognize that theirs is a symbiotic
relationship, wherein they must rely on each
other to ensure the success of the business.
When they consider only their own self-
interests, and when they act only with their
own benefit in mind, both parties suffer from
short-sightedness, failing to realize that they
both have a stake in the business. The
employer wants the business to succeed,
considering the investment that has been
made. The employee in turn, also wants the
business to succeed, as continued
employment means a living, and the chance to
better one’s lot in life. It is clear then that they
both have the same goal, even if the benefit
that results may be greater for one party than
the other. If this becomes a source of conflict,
there are various, more amicable means of
settling disputes and of balancing interests
that do not add fuel to the fire, and instead
open avenues for understanding and
cooperation between the employer and the
employee. [Toyota Motor Phils. Corp Workers
Association (TMPCWA) v. NLRC, G.R. No.
158786 (2007)]
While labor laws should be construed liberally
in favor of labor, we must be able to balance
this with the equally important right of the
[employer] to due process [Gagui v. Dejero,
G.R. No. 196036 (2013)
Article III. Sections 1, 4, 7, 8, 10, 16, 18(2)
Section 1. No person shall be deprived of
life, liberty, or property without due process
of law, nor shall any person be denied the
equal protection of the laws.
LABOR STANDARDS LABOR LAW
Due Process
Under the Labor Code, as amended, the
requirements for the lawful dismissal of an
employee by his employer are two-fold: the
substantive and the procedural. Not only must
the dismissal be for a valid or authorized cause
as provided by law, but the rudimentary
requirements of due process, basic to which
are that an opportunity to be heard and to
defend oneself must be observed before an
employee may be dismissed [Metro Eye
Security v. Salsona, G.R. No. 167367 (2007)]
To constitute valid dismissal from
employment, two requisites must concur: (1)
the dismissal must be for a just or authorized
cause; and (2) the employee must be afforded
an opportunity to be heard and to defend
himself. [Jeffrey Nacague vs. Sulpicio Lines, Inc.,
G.R. No. 172589 (2010)]
6
Labor as Property Right
One’s employment is a property right, and the
wrongful interference therewith is an
actionable wrong. The right is considered to
be property within the protection of the
constitutional guarantee of due process of law.
[Texon Manufacturing v. Millena, G.R. No.
141380 (2004)]
The Right to Assemble
6
Section 4. No law shall be passed abridging
the freedom of speech, of expression, or of
the press, or the right of the people
peaceably to assemble and petition the
government for redress of grievances.
The right of peaceable assembly is a right
cognate to those of free speech and free press
and is equally fundamental. [de Jonge vs.
Oregon (1937)]
Wearing armbands and putting up placards to
express one’s views without violating the
rights of third parties, are legal per se and even
constitutionally protected. [Bascon v CA, G.R.
No. 144899 (2004)]
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Transportation Co. vs. Leyte Farmers & Workers

Union, G.R. No. L-1377 (1948)]
Section 7. The right of the people to
information on matters of public concern
shall be recognized. Access to official
Section 16. All persons shall have the right
records, and to documents and papers
to a speedy disposition of their cases before
pertaining to official acts, transactions, or
all judicial, quasi-judicial, or administrative
decisions, as well as to government
bodies.
research data used as basis for policy
development, shall be afforded the citizen, Section 18 (2). No involuntary servitude in
subject to such limitations as may be any form shall exist except as a punishment
provided by law. for a crime whereof the party shall have
been duly convicted.
Section 8. The right of the people, including
those employed in the public and private
sectors, to form unions, associations, or
Article XIII. Sections 1, 2, 3, 13, 14
societies for purposes not contrary to law
shall not be abridged. Section 1. The Congress shall give highest
priority to the enactment of measures that
protect and enhance the right of all the
The Right to Form Associations people to human dignity, reduce social,
economic, and political inequalities, and
The right to form associations shall not be
remove cultural inequities by equitably
impaired except through a valid exercise of
diffusing wealth and political power for the
police power. [Bernas, The 1987 Philippine
common good.
Constitution: a Comprehensive Reviewer]
To this end, the State shall regulate the
acquisition, ownership, use, and disposition
Non-impairment of Contracts of property and its increments.
Section 10. No law impairing the obligation Section 2. The promotion of social justice
of contracts shall be passed. shall include the commitment to create
economic opportunities based on freedom
of initiative and self-reliance.
A law which changes the terms of a legal
Section 3. The State shall afford full
contract between parties, either in the time or
protection to labor, local and overseas,
mode or performance, or imposes new
organized and unorganized, and promote
conditions, or dispenses with those expressed,
full employment and equality of
or authorizes for its satisfaction something
employment opportunities for all.
different from that provided in its terms, is a
law which impairs the obligation of a contract It shall guarantee the rights of all workers
and is null and void. [Clemens vs. Nolting to self-organization, collective bargaining
(1922)] and negotiations, and peaceful concerted
activities, including the right to strike in
accordance with law. They shall be entitled
Vis-à-vis the freedom of contract to security of tenure, humane conditions of
work, and a living wage. They shall also
The prohibition to impair the obligation of
participate in policy and decision-making
contracts is not absolute and unqualified. In
processes affecting their rights and benefits
spite of the constitutional prohibition and the
as may be provided by law.
fact that both parties are of full age and
competent to contract, it does not necessarily The State shall promote the principle of
deprive the State of the power to interfere shared responsibility between workers and
where the parties do not stand upon an employers and the preferential use of
equality, or where the public health demands voluntary modes in settling disputes,
that one party to the contract shall be including conciliation, and shall enforce
protected against himself. [Leyte Land
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their mutual compliance therewith to foster
industrial peace.
The State shall regulate the relations
between workers and employers,
recognizing the right of labor to its just
share in the fruits of production and the
right of enterprises to reasonable returns to
investments, and to expansion and growth.
Participation in Decision-Making Process
Verily, a line must be drawn between
management prerogatives regarding business
operations per se and those which affect the
rights of the employees. In treating the latter,
management should see to it that its
employees are at least properly informed of its
decisions or modes action. Indeed, industrial
peace cannot be achieved if the employees are
denied their just participation in the discussion
of matters affecting their rights. [Phil. Airlines
Inc. vs. NLRC, G.R. No. 85985 (1993)]
Section 13. The State recognizes the vital
role of the youth in nation-building and
shall promote and protect their physical,
moral, spiritual, intellectual, and social
well-being. It shall inculcate in the youth
patriotism and nationalism, and encourage
their involvement in public and civic affairs.
Section 14. The State shall protect working
women by providing safe and healthful
working conditions, taking into account
their maternal functions, and such facilities
and opportunities that will enhance their
welfare and enable them to realize their full
potential in the service of the nation.
A.2 CIVIL CODE
Article 1700
Article 1700. The relations between capital
and labor are not merely contractual. They
are so impressed with public interest that
labor contracts must yield to the common
good. Therefore, such contracts are subject
to the special laws on labor unions,
collective bargaining, strikes and lockouts,
closed shop, wages, working conditions,
hours of labor and similar subjects.
LABOR STANDARDS LABOR LAW
Article 1702
Article 1702. In case of doubt, all labor
legislation and all labor contracts shall be
construed in favor of the safety and decent
living for the laborer.
Contracts
Under the Civil Code, contracts of labor are
explicitly subject to the police power of the
state because they are not ordinary contracts
but are impressed with public interest.
Inasmuch as in this particular instance the
contract in question would have been deemed
in violation of pertinent labor laws, the
provisions of said laws would prevail over the
terms of the contract, and private respondent
would still be entitled to overtime pay. [PAL
Employees Savings and Loan Assn., Inc. vs.
NLRC, G.R. No. 105963 (1996)]
Indeed, a contract of employment is
impressed with public interest. For this reason,
provisions of applicable statutes are deemed
written into the contract. Hence, the parties
are not at liberty to insulate themselves and
their relationships from the impact of labor
laws and regulations by simply contracting
with each other. Moreover, in case of doubt,
the terms of a contract should be construed in
favor of labor. [Innodata Philippines, Inc. vs.
Quejada-Lopez, G.R. No. 162839 (2006)]
A contract is the law between the parties, and
courts have no choice but to enforce such
contract so long as it is not contrary to law,
morals, good customs or public policy.
Otherwise, courts would be interfering with
the freedom of contract of the parties. Simply
put, courts cannot stipulate for the parties or
amend the latter’s agreement, for to do so
would be to alter the real intention of the
contracting parties when the contrary function
of courts is to give force and effect to the
intention of the parties. [Maynilad Water
Supervisors Association vs. Maynilad Water
Services, Inc., G.R. No. 198935 (2013)]
B. CONSTRUCTION IN FAVOR OF
LABOR
Article 4, Labor Code (LC)
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Construction in favor of labor. All doubts in the
implementation and interpretation of the
provisions of this Code, including its
implementing rules and regulations, shall be
resolved in favor of labor.
Article 1702, Civil Code (CC)
See Art 1702, Civil Code, Supra at p.
Liberal Construction
Of the laws
Article 4 of the Labor Code mandates that all
doubts in the implementation and
interpretation of the provisions thereof shall
be resolved in favor of labor. Consistent with
the State’s avowed policy to afford protection
to labor, as Article 3 of the Labor Code and
Section 3, Article XIII of the 1987 Constitution
have enunciated, particularly in relation to the
worker’s security of tenure, the Court held that
“[t]o be lawful, the cause for termination must
be a serious and grave malfeasance to justify
the deprivation of a means of livelihood. This
is merely in keeping with the spirit of our
Constitution and laws which lean over
backwards in favor of the working class, and
mandate that every doubt must be resolved in
their favor.” Moreover, the penalty imposed on
the erring employee ought to be proportionate
to the offense, taking into account its nature
and surrounding circumstances. [Hocheng
Philippines Corporation v. Farrales, G.R. No.
211497 (2015)]
Of labor contracts
While the terms and conditions of a CBA
constitute the law between the parties, it is not
however, an ordinary contract to which is
applied the principles of law governing
ordinary contracts. A CBA, as a labor contract
within the contemplation of Article 1700 of the
Civil Code of the Philippines which governs the
relations between labor and capital, is not
merely contractual in nature but impressed
with public interest, thus, it must yield to the
common good. As such, it must be construed
liberally rather than narrowly and technically,
and the courts must place a practical and
realistic construction upon it, giving due
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consideration to the context in which it is
negotiated and purpose which it is intended to
serve. [Cirtek Employees Labor Union-FFW v
Cirtek Electronics, G.R. No. 190515 (2010)]
In general
When there is doubt between the evidence
submitted by the employer and that
submitted by the employee, the scales of
justice must be tilted in favor of the employee.
This is consistent with the rule that an
employer’s cause could only succeed on the
strength of its own evidence and not on the
weakness of the employee’s evidence.
[Misamis Oriental II Electric Service Cooperative
vs. Virgilio Cagalawan, G.R. No. 175170 (2012)]
Fair treatment
The right of an employer to dismiss an
employee differs from and should not be
confused with the manner in which such right
is exercised. It must not be oppressive and
abusive since it affects one's person and
property. [FASAP v. PAL, G.R. No. 178083
(2008)]
Mutual obligation
The employer's obligation to give his workers
just compensation and treatment carries with
it the corollary right to expect from the
workers adequate work, diligence and good
conduct. [Judy Philippines, Inc. v NLRC, G.R.
No. 111934, (1998)]
Compliance with law
It is also important to emphasize that the
return-to-work order not so much confers a
right as it imposes a duty; and while as a right
it may be waived, it must be discharged as a
duty even against the worker's will. [Sarmiento
v. Tuico, G.R. No. 75271 (1988)]
Employee's compliance and obedience to
employer's orders
The lack of a written or formal designation
should not be an excuse to disclaim any
responsibility for any damage suffered by the
employer due to his negligence. The measure
of the responsibility of an employee is that if
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he performed his assigned task efficiently and
according to the usual standards, then he may
not be held personally liable for any damage
arising therefrom. Failing in this, the
employee must suffer the consequences of his
negligence if not lack of due care in the
performance of his duties. [PCIB v. Jacinto, G.R.
No. 92742 (1991)]
C. SOCIAL JUSTICE
Section 10, Article II, Constitution
Section 10. The State shall promote social
justice in all phases of national development.
Sections 1-3, Article XIII, Constitution
Section 1. The Congress shall give highest
priority to the enactment of measures that
protect and enhance the right of all the people
to human dignity, reduce social, economic,
and political inequalities, and remove cultural
inequities by equitably diffusing wealth and
political power for the common good.
To this end, the State shall regulate the
acquisition, ownership, use, and disposition of
property and its increments.
Section 2. The promotion of social justice shall
include the commitment to create economic
opportunities based on freedom of initiative
and self-reliance.
Section 3. The State shall afford full protection
to labor, local and overseas, organized and
unorganized, and promote full employment
and equality of employment opportunities for
all.
It shall guarantee the rights of all workers to
self-organization, collective bargaining and
negotiations, and peaceful concerted
activities, including the right to strike in
accordance with law. They shall be entitled to
security of tenure, humane conditions of work,
and a living wage. They shall also participate
in policy and decision-making processes
affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of
shared responsibility between workers and
employers and the preferential use of
voluntary modes in settling disputes,
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including conciliation, and shall enforce their
mutual compliance therewith to foster
industrial peace.
The State shall regulate the relations between
workers and employers, recognizing the right
of labor to its just share in the fruits of
production and the right of enterprises to
reasonable returns to investments, and to
expansion and growth.
When to/not to tilt the scales of justice as a
measure of equity and compassionate social
justice
Absent any other supporting evidence, the
error in a single ticket issued by petitioner can
hardly be used to justify the inference that he
has committed serious misconduct or has
acted in a manner that runs afoul of his
employer's trust. More so, petitioner cannot be
taken to have engaged in a series of acts
evincing a pattern or a design to defraud his
employer. Terminating his employment on
these unfounded reasons is manifestly unjust
[Rivera vs. Genesis Transport Service, Inc., G.R.
215568 (2015)].
Separation pay shall be allowed as a measure
of social justice only in those instances where
the employee is validly dismissed for causes
other than serious misconduct or those
reflecting on his moral character. Where the
reason for the valid dismissal is, for example,
habitual intoxication or an offense involving
moral turpitude, like theft or illicit sexual
relations with a fellow worker, the employer
may not be required to give the dismissed
employee separation pay, or financial
assistance, or whatever other name it is called,
on the ground of social justice [PLDT vs. NLRC,
247 Phil. 641 (1988)].
The policy of social justice is not intended to
countenance wrongdoing simply because it is
committed by the underprivileged. At best it
may mitigate the penalty but it certainly will
not condone the offense. Compassion for the
poor is an imperative of every humane society
but only when the recipient is not a rascal
claiming an undeserved privilege. Social
justice cannot be permitted to be [a] refuge of
scoundrels any more than can equity be an
impediment to the punishment of the guilty.
Those who invoke social justice may do so only
UP LAW BOC LABOR STANDARDS LABOR LAW

if their hands are clean and their motives

blameless and not simply because they II. Recruitment and
happen to be poor. This great policy of our
Constitution is not meant for the protection of
Placement
those who have proved they are not worthy of “Recruitment and placement" refers to any act
it, like the workers who have tainted the cause of:
of labor with the blemishes of their own
character. [Tirazona vs. Phil EDS Techno- (a) Canvassing,
Service, Inc., G.R. 169712 (2009)]. (b) Enlisting,
(c) Contracting,
(d) Transporting,
(e) Utilizing, or
(f) Hiring procuring workers,

And also includes

(a) Referrals,
(b) Contract services,
(c) Promising, or
(d) Advertising for employment, locally or
abroad, whether for profit or not

Provided, That any person or entity which, in

any manner, offers or promises for a fee
employment to two or more persons shall be
deemed engaged in recruitment and
placement. [Art. 13 (b), LC]
Any of the acts mentioned above constitutes
recruitment and placement.
The proviso provides for a presumption that a
person or entity so described engages in
recruitment and placement [People v. Panis,
G.R. No. 58674 (1988)]

What constitutes recruitment?

The number of persons dealt with is not an
essential ingredient of the act of recruitment
and placement of workers. Any of the acts
mentioned in Article 13(b) will constitute
recruitment and placement even if only one
prospective worker is involved. The proviso
merely lays down a rule of evidence that where
a fee is collected in consideration of a promise
or offer of employment to two or more
prospective workers, the individual or entity
dealing with them shall be presumed to be

PAGE 8 OF 235
UP LAW BOC
engaged in the act of recruitment and
placement. [People v. Panis]
Acts of referral
The act of referral, which is included in
recruitment, is "the act of passing along or
forwarding of an applicant for employment
after an initial interview of a selected applicant
for employment to a selected employer,
placement officer or bureau." [Rodolfo vs.
People, G.R. No. 146964 (2006)]
Promising employment
Promising employment as factory workers and
receiving money allegedly for processing
papers without authorization or license is
engaging into unlawful recruitment and
placement activities. The absence of the
necessary license or authority renders all of
accused-appellant’s recruitment activities
criminal. [People vs. Saulo, G.R. No. 125903
(2000)]
Worker – refers to any member of the labor
force, whether employed or unemployed
[Art.13 (a), LC]
Overseas Filipino Worker – is a person who is
to be engaged, is engaged or has been
engaged in a remunerated activity in a state of
which he or she is not a citizen or on board a
vessel navigating the foreign seas other than
a government ship used for military or non-
commercial purposes or on an installation
located offshore or on the high seas; to be
used interchangeably with migrant worker.”
[Sec. 2 (a), RA 8042, as amended]
Private Employment Agency – means any
person or entity engaged in recruitment and
placement of workers for a fee which is
charged, directly or indirectly, from the
workers or employers or both [Sec 13 (c), LC]
Private Recruitment Entity – means any person
or association engaged in the recruitment and
placement of workers, locally or overseas,
LABOR STANDARDS LABOR LAW
without charging, directly or indirectly, any fee
from the workers or employees [Sec 13 (e), LC]
Policy of Close Government Regulation
RA 9422 or the Act to Strengthen the
Regulatory Functions of the Philippine
Overseas Employment Administration of 2007
expressly repealed Sections 29 and 30 of RA
8042 which provided for the deregulation of
recruitment activities.
Recruitment of Local and Migrant Workers
Policy of Selective Deployment
The State shall allow the deployment of
overseas Filipino workers only in countries
where the rights of Filipino migrant workers
are protected. The government recognizes any
of the following as a guarantee on the part of
the receiving country for the protection of the
rights of overseas Filipino workers:
(a) It has existing labor and social laws
protecting the rights of workers,
including migrant workers;
(b) It is a signatory to and/or a ratifier of
multilateral conventions, declarations
or resolutions relating to the protection
of workers, including migrant workers;
and
(c) It has concluded a bilateral agreement
or arrangement with the government on
the protection of the rights of overseas
Filipino Workers: Provided, That the
receiving country is taking positive,
concrete measures to protect the rights
of migrant workers in furtherance of any
of the guarantees under subparagraphs
(a), (b) and (c) hereof. [Sec. 3, RA 8042,
as amended]
A. ILLEGAL RECRUITMENT
Illegal Recruitment shall mean any act of
canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring
workers and includes referring, contract
services, promising or advertising for
employment abroad, whether for profit or not,
when undertaken by non-licensee or non-
holder of authority contemplated under
PAGE 9 OF 235
UP LAW BOC LABOR STANDARDS
Article 13(f) of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code
of the Philippines: Provided, That any such
non-licensee or non-holder who, in any
manner, offers or promises for a fee
employment abroad to two or more persons
shall be deemed so engaged. [Sec. 5, R.A. No.
10022]
A.1 ESSENTIAL ELEMENTS OF ILLEGAL
RECRUITMENT
1. The offender is a licensee/non-licensee
or holder/non-holder of authority
engaged in the recruitment and
placement of workers; and
2. The offender undertakes wither any
recruitment activities defined under
Article 13(b), or any prohibited practices
enumerated under Article 34 [People vs.
Sadiosa, GR No. 107084 (1998); Sec. 10,
RA 8042]
A.2. PROHIBITED ACTIVITIES
Prohibited practices
It shall be unlawful for any individual, entity,
licensee, or holder of authority:
(a) To charge or accept, directly or indirectly,
any amount greater than that specified
in the schedule of allowable fees
prescribed by the Secretary of Labor, or
to make a worker pay any amount
greater than that actually received by
him as a loan or advance;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit any
act of misrepresentation for the purpose
of securing a license or authority under
this Code.
(d) To induce or attempt to induce a worker
already employed to quit his
employment in order to offer him to
another unless the transfer is designed
to liberate the worker from oppressive
terms and conditions of employment;
PAGE 10 OF 235
LABOR LAW
(e) To influence or to attempt to influence
any person or entity not to employ any
worker who has not applied for
employment through his agency;
(f) To engage in the recruitment or
placement of workers in jobs harmful to
public health or morality or to the
dignity of the Republic of the
Philippines;
(g) To obstruct or attempt to obstruct
inspection by the Secretary of Labor or
by his duly authorized representatives;
(h) To fail to file reports on the status of
employment, placement vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and
such other matters or information as
may be required by the Secretary of
Labor.
(i) To substitute or alter employment
contracts approved and verified by the
Department of Labor from the time of
actual signing thereof by the parties up
to and including the periods of
expiration of the same without the
approval of the Secretary of Labor;
(j) To become an officer or member of the
Board of any corporation engaged in
travel agency or to be engaged directly
or indirectly in the management of a
travel agency; and
(k) To withhold or deny travel documents
from applicant workers before
departure for monetary or financial
considerations other than those
authorized under this Code and its
implementing rules and regulations.
(Art. 34, LC)
Other prohibited acts
It shall likewise include the following acts,
whether committed by any person, whether a
non-licensee, non-holder, licensee or holder of
authority:
(a) To charge or accept directly or indirectly
any amount greater than that specified
in the schedule of allowable fees
prescribed by the Secretary of Labor and
Employment, or to make a worker pay or
acknowledge any amount greater than
UP LAW BOC LABOR STANDARDS
that actually received by him as a loan or
advance;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit any
act of misrepresentation for the purpose
of securing a license or authority under
the Labor Code, or for the purpose of
documenting hired workers with the
POEA, which include the act of
reprocessing workers through a job
order that pertains to nonexistent work,
work different from the actual overseas
work, or work with a different employer
whether registered or not with the
POEA;
(d) To include or attempt to induce a worker
already employed to quit his
employment in order to offer him
another unless the transfer is designed
to liberate a worker from oppressive
terms and conditions of employment;
(e) To influence or attempt to influence any
person or entity not to employ any
worker who has not applied for
employment through his agency or who
has formed, joined or supported, or has
contacted or is supported by any union
or workers' organization;
(f) To engage in the recruitment or
placement of workers in jobs harmful to
public health or morality or to the
dignity of the Republic of the
Philippines;
(g) To fail to submit reports on the status of
employment, placement vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and
such other matters or information as
may be required by the Secretary of
Labor and Employment;
(h) To substitute or alter to the prejudice of
the worker, employment contracts
approved and verified by the
Department of Labor and Employment
from the time of actual signing thereof
by the parties up to and including the
period of the expiration of the same
PAGE 11 OF 235
LABOR LAW
without the approval of the Department
of Labor and Employment;
(i) For an officer or agent of a recruitment
or placement agency to become an
officer or member of the Board of any
corporation engaged in travel agency or
to be engaged directly or indirectly in
the management of travel agency;
(j) To withhold or deny travel documents
from applicant workers before
departure for monetary or financial
considerations, or for any other reasons,
other than those authorized under the
Labor Code and its implementing rules
and regulations;
(k) Failure to actually deploy a contracted
worker without valid reason as
determined by the Department of Labor
and Employment;
(l) Failure to reimburse expenses incurred
by the worker in connection with his
documentation and processing for
purposes of deployment, in cases where
the deployment does not actually take
place without the worker's fault. Illegal
recruitment when committed by a
syndicate or in large scale shall be
considered an offense involving
economic sabotage; and
(m) To allow a non-Filipino citizen to head or
manage a licensed
recruitment/manning agency [Sec 5]
In addition to the acts enumerated above, it
shall also be unlawful for any person or entity
to commit the following prohibited acts:
(1) Grant a loan to an overseas Filipino
worker with interest exceeding eight
percent (8%) per annum, which will be
used for payment of legal and allowable
placement fees and make the migrant
worker issue, either personally or
through a guarantor or accommodation
party, postdated checks in relation to
the said loan;
(2) Impose a compulsory and exclusive
arrangement whereby an overseas
Filipino worker is required to avail of a
loan only from specifically designated
institutions, entities or persons;
UP LAW BOC LABOR STANDARDS
(3) Refuse to condone or renegotiate a loan
incurred by an overseas Filipino worker
after the latter's employment contract
has been prematurely terminated
through no fault of his or her own;
(4) Impose a compulsory and exclusive
arrangement whereby an overseas
Filipino worker is required to undergo
health examinations only from
specifically designated medical clinics,
institutions, entities or persons, except
in the case of a seafarer whose medical
examination cost is shouldered by the
principal/shipowner;
(5) Impose a compulsory and exclusive
arrangement whereby an overseas
Filipino worker is required to undergo
training, seminar, instruction or
schooling of any kind only from
specifically designated institutions,
entities or persons, except for
recommendatory trainings mandated
by principals/shipowners where the
latter shoulder the cost of such
trainings;
(6) For a suspended recruitment/manning
agency to engage in any kind of
recruitment activity including the
processing of pending workers'
applications; and
(7) For a recruitment/manning agency or a
foreign principal/employer to pass on
the overseas Filipino worker or deduct
from his or her salary the payment of the
cost of insurance fees, premium or other
insurance related charges, as provided
under the compulsory worker's
insurance coverage. (Sec. 6, RA 8042 as
amended)
A.3. TYPES OF ILLEGAL RECRUITMENT
Simple Illegal Recruitment
PAGE 12 OF 235
LABOR LAW
Illegal recruitment for Local Workers
[Governed by the Labor Code]
Simple Illegal Recruitment (local)
Elements:
(1) The person charged with the crime must
have undertaken recruitment activities
defined under Art. 13 (b) or prohibited
activities defined under Art. 34; and
(2) The said person does not have a license
or authority to do so. [Art. 38, LC]
Profit or lack thereof is immaterial
The act of recruitment may be "for profit or
not." Notably, it is the lack of the necessary
license or authority, not the fact of payment
that renders the recruitment activity of LCL
unlawful. [C.F. Sharp vs. Espanol, G.R. No.
155903 (2007)]
Accused must give the impression of ability to
send complainant abroad
It is well-settled that to prove illegal
recruitment, it must be shown that [the
accused] gave complainants the distinct
impression that she had the power or ability to
send complainants abroad for work such that
the latter were convinced to part with their
money in order to be employed. [People v.
Ochoa, G.R. No. 173792 (2011)]
Prohibited practices
It shall be unlawful for any individual, entity,
licensee, or holder of authority:
(a) To charge or accept, directly or indirectly,
any amount greater than that specified
in the schedule of allowable fees
prescribed by the Secretary of Labor, or
to make a worker pay any amount
greater than that actually received by
him as a loan or advance;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit any
UP LAW BOC LABOR STANDARDS
act of misrepresentation for the purpose
of securing a license or authority under
this Code.
(d) To induce or attempt to induce a worker
already employed to quit his
employment in order to offer him to
another unless the transfer is designed
to liberate the worker from oppressive
terms and conditions of employment;
(e) To influence or to attempt to influence
any person or entity not to employ any
worker who has not applied for
employment through his agency;
(f) To engage in the recruitment or
placement of workers in jobs harmful to
public health or morality or to the
dignity of the Republic of the
Philippines;
(g) To obstruct or attempt to obstruct
inspection by the Secretary of Labor or
by his duly authorized representatives;
(h) To fail to file reports on the status of
employment, placement vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and
such other matters or information as
may be required by the Secretary of
Labor.
(i) To substitute or alter employment
contracts approved and verified by the
Department of Labor from the time of
actual signing thereof by the parties up
to and including the periods of
expiration of the same without the
approval of the Secretary of Labor;
(j) To become an officer or member of the
Board of any corporation engaged in
travel agency or to be engaged directly
or indirectly in the management of a
travel agency; and
(k) To withhold or deny travel documents
from applicant workers before
departure for monetary or financial
considerations other than those
authorized under this Code and its
implementing rules and regulations.
[Art. 34, LC, PERT/CPM Manpower
Exponent Co. v. Vinuya, G.R. No. 197528
(2012)]
PAGE 13 OF 235
LABOR LAW
Contract Substitution amounts to Illegal
Recruitment
The reduced salaries and employment period
in the new employment contract contradicted
the POEA-approved employment contract. By
this act of contract substitution, respondents
committed a prohibited practice and engaged
in illegal recruitment as defined in Art. 34(i),
LC. [PERT/CPM Manpower Exponent Co. v.
Vinuya, G.R. No. 197528 (2012)]
Illegal recruitment for Migrant Workers
[Governed by R.A. 8042, as amended by, R.A.
10022]
Simple Illegal Recruitment
First type:
(1) Person charged undertakes any
recruitment activity as defined in Art.13
(b) of the Labor Code; and
(2) Said person does not have a license or
authority to do so.
Second type:
(1) Person charged commits any of the
enumerated acts under Sec. 6 of R.A.
8042, as amended by, R.A. 10022.
(2) It is immaterial whether he is a holder or
not of any license or authority
Illegal recruitment shall mean any act of
canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring
workers and includes referring, contract
services, promising or advertising for
employment abroad, whether for profit or not,
when undertaken by non-licensee or non-
holder of authority contemplated under
Article 13(f) of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code
of the Philippines; Provided, That any such
non-licensee or non-holder who, in any
manner, offers or promises for a fee
employment abroad to two or more persons
shall be deemed so engaged. [Sec. 6, RA 8042
as amended]
Other prohibited acts
UP LAW BOC LABOR STANDARDS
It shall likewise include the following acts,
whether committed by any person, whether a
non-licensee, non-holder, licensee or holder of
authority:
(a) To charge or accept directly or indirectly
any amount greater than that specified
in the schedule of allowable fees
prescribed by the Secretary of Labor and
Employment, or to make a worker pay or
acknowledge any amount greater than
that actually received by him as a loan or
advance;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit any
act of misrepresentation for the purpose
of securing a license or authority under
the Labor Code, or for the purpose of
documenting hired workers with the
POEA, which include the act of
reprocessing workers through a job
order that pertains to nonexistent work,
work different from the actual overseas
work, or work with a different employer
whether registered or not with the
POEA;
(d) To induce or attempt to induce a worker
already employed to quit his
employment in order to offer him
another unless the transfer is designed
to liberate a worker from oppressive
terms and conditions of employment;
(e) To influence or attempt to influence any
person or entity not to employ any
worker who has not applied for
employment through his agency or who
has formed, joined or supported, or has
contacted or is supported by any union
or workers' organization;
(f) To engage in the recruitment or
placement of workers in jobs harmful to
public health or morality or to the dignity
of the Republic of the Philippines;
(g) To fail to submit reports on the status of
employment, placement vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and
such other matters or information as
PAGE 14 OF 235
LABOR LAW
may be required by the Secretary of
Labor and Employment;
(h) To substitute or alter to the prejudice of
the worker, employment contracts
approved and verified by the
Department of Labor and Employment
from the time of actual signing thereof
by the parties up to and including the
period of the expiration of the same
without the approval of the Department
of Labor and Employment;
(i) For an officer or agent of a recruitment or
placement agency to become an officer
or member of the Board of any
corporation engaged in travel agency or
to be engaged directly or indirectly in the
management of travel agency;
(j) To withhold or deny travel documents
from applicant workers before
departure for monetary or financial
considerations, or for any other reasons,
other than those authorized under the
Labor Code and its implementing rules
and regulations;
(k) Failure to actually deploy a contracted
worker without valid reason as
determined by the Department of Labor
and Employment;
(l) Failure to reimburse expenses incurred
by the worker in connection with his
documentation and processing for
purposes of deployment, in cases where
the deployment does not actually take
place without the worker's fault. Illegal
recruitment when committed by a
syndicate or in large scale shall be
considered an offense involving
economic sabotage; and
(m) To allow a non-Filipino citizen to head or
manage a licensed
recruitment/manning agency.
In addition to the acts enumerated above, it
shall also be unlawful for any person or entity
to commit the following prohibited acts:
(1) Grant a loan to an overseas Filipino
worker with interest exceeding eight
percent (8%) per annum, which will be
used for payment of legal and allowable
placement fees and make the migrant
UP LAW BOC
worker issue, either personally or
through a guarantor or accommodation
party, postdated checks in relation to
the said loan;
(2) Impose a compulsory and exclusive
arrangement whereby an overseas
Filipino worker is required to avail of a
loan only from specifically designated
institutions, entities or persons;
(3) Refuse to condone or renegotiate a loan
incurred by an overseas Filipino worker
after the latter's employment contract
has been prematurely terminated
through no fault of his or her own;
(4) Impose a compulsory and exclusive
arrangement whereby an overseas
Filipino worker is required to undergo
health examinations only from
specifically designated medical clinics,
institutions, entities or persons, except
in the case of a seafarer whose medical
examination cost is shouldered by the
principal/shipowner;
(5) Impose a compulsory and exclusive
arrangement whereby an overseas
Filipino worker is required to undergo
training, seminar, instruction or
schooling of any kind only from
specifically designated institutions,
entities or persons, except for
Law Applicability
Labor Code Local Workers
RA 8042 as
amended by RA Migrant Workers
10022
Illegal recruitment in large scale
Illegal recruitment by a syndicate
(1) The offender undertakes either any
activity within the meaning of
"recruitment and placement" defined
under Article 13(b), or any of the
LABOR STANDARDS LABOR LAW
recommendatory trainings mandated
by principals/shipowners where the
latter shoulder the cost of such
trainings;
(6) For a suspended recruitment/manning
agency to engage in any kind of
recruitment activity including the
processing of pending workers'
applications; and
(7) For a recruitment/manning agency or a
foreign principal/employer to pass on the
overseas Filipino worker or deduct from
his or her salary the payment of the cost of
insurance fees, premium or other
insurance related charges, as provided
under the compulsory worker's insurance
coverage. [Sec. 6, RA 8042 as amended]
Migrant Workers’ Act (MWA) expands the
definition of illegal recruitment
The amendments to the Labor Code
introduced by Republic Act No. 8042,
otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, broadened the
concept of illegal recruitment and provided
stiffer penalties, especially for those that
constitute economic sabotage. [People v.
Ocden, G.R. No. 173198 (2011)]
Acts Punishable Who can be punished
Art. 13(b) Non-licensee
Art. 34 Non-licensee
Art. 13(b) Labor Code Non-licensee
Enumerated prohibited Licensee/
acts in Section 6 Non-licensee
prohibited practices enumerated under
Art. 34 of the Labor Code;
(2) He has no valid license or authority
required by law to enable one to lawfully
engage in recruitment and placement of
workers; AND
PAGE 15 OF 235
UP LAW BOC LABOR STANDARDS
(3) The illegal recruitment is committed by
a group of three (3) or more persons
conspiring or confederating with one
another. [People v. Gallo, G.R. No.
187730 (2010)]
Illegal recruitment in large scale
The acts committed by the accused
constituted illegal recruitment in large scale,
whose essential elements are the following:
(1) The accused engages in acts of
recruitment and placement of workers
defined under Article 13(b) of the Labor
Code or in any prohibited activities
under Article 43 of the Labor Code;
(2) The accused has not complied with the
guidelines issued by the Secretary of
Labor and Employment, particularly
with respect to the securing of license or
an authority to recruit and deploy
workers, either locally or overseas; and
(3) The accused commits the unlawful acts
against three or more persons
individually or as a group.
Three or more complainants must be in a single
case
When the Labor Code speaks of illegal
recruitment "committed against three (3) or
more persons individually or as a group," it
must be understood as referring to the
number of complainants in each case who are
complainants therein, otherwise, prosecutions
for single crimes of illegal recruitment can be
cumulated to make out a case of large scale
illegal recruitment.
In other words, a conviction for large scale
illegal recruitment must be based on a finding
in each case of illegal recruitment of three or
more persons whether individually or as a
group. [People vs. Reyes, G.R. No. 105204
(1995)]
Illegal recruitment as economic sabotage
Offense involving Economic Sabotage (Large-
Scale or by a Syndicate)
PAGE 19 OF 235
LABOR LAW
Illegal recruitment is considered economic
sabotage when the commission thereof is
attended by the ff. qualifying circumstances:
(1) By a syndicate - if carried out by a group
of 3 or more persons conspiring and
confederating with one another;
(2) In large scale - if committed against 3 or
more persons individually or as a group.
[Art. 38(b), LC]
See iv. Illegal recruitment in large scale for
requisites and discussion
A.4 ILLEGAL RECRUITMENT VS. ESTAFA
Illegal Recruitment Estafa
Malum prohibitum Malum in se
Conviction for
Conviction for
offenses under the
estafa does not bar
Labor Code does
a conviction for
not bar conviction
illegal recruitment
for offenses
under the Labor
punishable by other
Code.
laws.
One convicted for illegal recruitment may still
be convicted of estafa
In People v. Cortez the Court explained that: “In
this jurisdiction, it is settled that a person who
commits illegal recruitment may be charged
and convicted separately of illegal recruitment
under the Labor Code and estafa under par.
2(a) of Art. 315 of the Revised Penal Code. The
offense of illegal recruitment is malum
prohibitum where the criminal intent of the
accused is not necessary for conviction, while
estafa is malum in se where the criminal intent
of the accused is crucial for conviction.
Conviction for offenses under the Labor Code
does not bar conviction for offenses
punishable by other laws. Conversely,
conviction for estafa under par. 2(a) of Art. 315
of the Revised Penal Code does not bar a
conviction for illegal recruitment under the
Labor Code. It follows that one's acquittal of
the crime of estafa will not necessarily result
in his acquittal of the crime of illegal
recruitment in large scale, and vice versa.”
[People v. Ochoa (2011); People v. Ocden (2011)]
UP LAW BOC LABOR STANDARDS LABOR LAW

Act Penalty
A.5. LIABILITYOF LOCAL RECRUITMENT Imprisonment: 6 yrs. and 1
AGENCY AND FOREIGN EMPLOYER day – 12 yrs.
Prohibited
LOCAL RECRUITMENT AGENCY Act/s AND
Illegal recruitment involving local workers [Art. Fine: P500k – P1M
39, LC]
Imprisonment: 12 yrs. and 1
Act Penalty day – 20 yrs.
Illegal
Imprisonment: 2 - 5 recruitment AND
Licensee or holder yrs.
of authority Fine: P1M – P2M
OR
violating or Life imprisonment
causing another to Fine: P10k – P50k
violate Title I, Book AND
OR
I, LC Fine: P2M – P5M
Both Illegal
Imprisonment: 4 - 8 recruitment
constituting Maximum penalty if:
Violating or yrs. OR
causing another to economic 1. Illegally recruited person
Fine: P20k – P100k sabotage
violate Title I, Book below 18 years old
I, LC OR
OR
Both
2. Offense committed
Illegal recruitment Life imprisonment without license/authority
constituting
AND
economic
sabotage Fine: P100k If the offender is an alien, he or she shall, in
addition to the penalties herein prescribed, be
deported without further proceed-ings.
If the offender is a corporation, partnership,
In every case, conviction shall cause and carry
association or entity, the penalty shall be
the automatic revocation of the license or
imposed upon the officer or officers of the
registration of the recruitment/ manning
corporation, partnership, association or entity
agency, lending institutions, training school or
responsible for violation.
medical clinic.
If such officer is an alien, he shall, in addition
to the penalties herein prescribed, be deported
without further proceedings. Common Rules on Liability
In every case, conviction shall cause and carry (1) Employees of a company or corporation
the automatic revocation of the license or engaged in illegal recruitment may be
authority and all the permits and privileges held liable as principal, together with his
granted to such person or entity under this employer, if it is shown that he actively
Title, and the forfeiture of the cash and surety and consciously participated in illegal
bonds in favor of the Overseas Employment recruitment. [People vs. Sagayaga, G.R.
Development Board or the National Seamen 143726 (2004)]
Board, as the case may be, both of which are
(2) Private employment agencies are held
authorized to use the same exclusively to 11
jointly and severally liable with the
promote their objectives.
foreign-based employer for any violation
Illegal recruitment involving migrant workers of the recruitment agreement or
[Sec. 7, RA 8042 as amended by RA 10022] contract of employment. This joint and
solidary liability imposed by law against
recruitment agencies and foreign
PAGE 20 OF 235
UP LAW BOC LABOR STANDARDS
employers is meant to assure the
aggrieved worker of immediate and
sufficient payment of what is due him
[Becmen Service Exporter vs. Sps.
Cuaresma, G.R. 182978-79, (2009]
(3) If the recruitment/placement agency is a
juridical being, the corporate officers and
directors and partners as the case may
be, shall themselves be jointly and
solidarily liable with the corporation or
partnership for the aforesaid claims and
damages. [Becmen Service Exporter vs.
Sps. Cuaresma, G.R. 182978-79, (2009]
(4) Foreign employer shall assume joint and
solidary liability with the employer for all
claims and liabilities which may arise in
connection with the implementation of
the contract, including but not limited to
payment of wages, death and disability
compensation and repatriation
Common Rules on Illegal Recruitment (Local
or Overseas)
Venue
A criminal action arising from illegal
recruitment shall be filed with the RTC of the
province or city:
(1) where the offense was committed or
(2) where the offended party actually resides
at the time of the commission of the
offense. [Sec. 9, R.A. 8042 (this part was
not amended by R.A. 10022)].
Prescriptive Periods
(1) Simple Illegal Recruitment – 5 years
(2) Illegal Recruitment involving Economic
Sabotage – 20 years [Sec. 12, R.A. 8042
(this part was not amended by R.A,
10022)].
FOREIGN EMPLOYER
Foreign employer shall assume joint and solidary
liability with the employer for all claims and
liabilities which may arise in connection with
the implementation of the contract, including
but not limited to payment of wages, death
and disability compensation and repatriation
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LABOR LAW
A.5.a. SOLIDARY LIABILITY
Solidary Liability of Agent and Principal
The written application for a license to operate
a private employment or manning agency
shall be submitted with, among others, a
verified undertaking stating that the applicant:
(1) Shall assume full and complete
responsibility for:
▪ all claims and liabilities which may
arise in connection with the use of
license;
▪ all acts of its officials, employees
and representatives done in
connection with recruitment and
placement;
(2) Shall assume joint and solidary liability
with the employer for all claims and
liabilities which may arise in connection
with the implementation of the contract,
including but not limited to payment of
wages, death and disability
compensation and repatriation;
(3) Shall guarantee compliance with the
existing labor and social legislations of
the Philippines and of the country of
employment of recruited workers [POEA
Rules, Book II, Rule II, Sec. 1 (f) (2-5)]
Purpose of Solidary Liability
The fact that the manning agency and its
principal have already terminated their
agency agreement does not relieve the former
of its liability. The agency agreement with the
principal even if ended as between them, still
extends up to and until the expiration of, the
employment contracts of the employees
recruited and employed pursuant to the said
recruitment agreement. Otherwise, this will
render nugatory the very purpose for which the
law governing the employment of workers for
foreign jobs abroad was enacted, that is, to
assure aggrieved workers of immediate and
sufficient payment of what is due them. [OSM
Shipping Phil, Inc. v. NLRC (2003)]
A.5.b. THEORY OF IMPUTED KNOWLEDGE
UP LAW BOC LABOR STANDARDS
This is a doctrine in agency which states that
the principal is chargeable with and bound by
the knowledge of or notice to his agent
received while the agent was acting as such.
Simply put, notice to the agent is notice to the
principal.
Since the local employment agency is
considered the agent of the foreign employer,
the principal, knowledge of the former of
existing labor and social legislation in the
Philippines is binding on the latter.
Consequently, notice to the former of any
violation thereof is notice to the latter.
However, notice to the principal is not notice
to the agent. The SC held in Sunace
International Management Services, Inc. vs.
NLRC [G.R. 161757 (2006)] that “the theory of
imputed knowledge ascribes the knowledge of
the agent to the principal, not the other way
around. The knowledge of the principal-
foreign employer cannot, therefore, be
imputed to its agent.”
A.6. TERMINATION OF CONTRACT OF
MIGRANT WORKER WITHOUT JUST CAUSE
In case of termination of overseas employment,
▪ without just, valid or authorized cause as
defined by law or contract, or
▪ any unauthorized deductions from the
migrant worker's salary
...shall entitle the worker to full
reimbursement of:
(1) his placement fee and the
deductions made with interest at
twelve percent (12%) per annum,
and;
(2) his salaries for the unexpired portion
of his employment contract [or for
three (3) months for every year of the
unexpired term, whichever is less*]
[Sec. 10, R.A. 8042, as amended by
R.A. 10022]
Rule before Serrano (1995-2009): 3-month
salary rule applied
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LABOR LAW
The employment contract involved in the
instant case covers a two-year period but the
overseas contract worker actually worked for
only 26 days prior to his illegal dismissal. Thus,
the three months’ salary rule applies [Flourish
Maritime Shipping v. Almanzor, G.R. No.
177948 (2008)]
Rule after Serrano: invalidated the 3-month
salary cap clause
The SC there held that “said clause is
unconstitutional for being an invalid
classification, in violation of the equal
protection clause”. [Serrano v. Gallant
Maritime Services, Inc., G.R. No. 167614 (2009)]
In the case of Yap vs. Thenamaris Ship’s
Management and Intermare Maritime Agencies,
Inc. [G.R. No. 179532 (May 30, 2011)], the SC
affirmed the Serrano ruling, but did not apply
the Operative Fact doctrine: “As an exception
to the general rule, the doctrine applies only
as a matter of equity and fair play.”
NB: In 2010, a year after Serrano, RA 10022, in
amending RA 8042, reincorporated the
nullified 3-month salary cap clause. However,
the SC did not allow this and again struck the
revived clause as unconstitutional in the 2014
case of Sameer Overseas Placement Agency vs.
Cabiles [G.R. No. 170139, (August 05, 2014)].
There, the SC said that: “when a law or a
provision of law is null because it is
inconsistent with the Constitution, the nullity
cannot be cured by reincorporation or
reenactment of the same or a similar law or
provision. A law or provision of law that was
already declared unconstitutional remains as
such unless circumstances have so changed as
to warrant a reverse conclusion.”
Hence, the case of Serrano holds as binding
precedent, even after the passage of RA 10022.
A.7. DIRECT HIRING
General Rule: No employer may hire a Filipino
worker for overseas employment except
through the Boards and entities authorized by
the Secretary of Labor. [Art. 18, LC]
Exceptions:
UP LAW BOC LABOR STANDARDS LABOR LAW

(1) Members of the diplomatic corps; Definition Any person Any person
(2) International organizations; or entity or
engaged in association
(3) Such other employees as may be recruitment engaged in
allowed by the Sec. of Labor; and the
(4) Name hirees – those individuals who are placement recruitment
able to secure contracts for overseas of workers and
employment on their own efforts and for a fee placement of
representation without the assistance or which is workers,
participation of any agency. Their hiring, charged, locally or
nonetheless, has to be processed directly or overseas,
through the POEA. [Part III, Rule III of indirectly, without
the POEA Rules Governing Overseas from the charging,
Employment as amended in 2002] workers or directly or
employers indirectly,
or both any fee
B. REGULATIONS OF RECRUITMENT Requiremen License Authority
AND PLACEMENT ACTIVITIES t
License and Authority
License – is a document issued by the Entities disqualified from being issued a license
Department of Labor and Employment
(1) Travel agencies and sales agencies of
(DOLE) authorizing a person or entity to
airline companies. [Art. 26]
operate a private employment agency, while
an authority is a document issued by the DOLE (2) Officers or members of the Board of any
authorizing a person or association to engage corporation or members in partnership
in recruitment and placement activities as a engaged in the business of a travel
private recruitment agency. [Art. 13(d) and (f), agency.
LC] (3) Corporations and partnerships, when
any of its officers, members of the board
or partners, is also an officer, member of
License Authority the board of partner of a corporation or
Authorize an entity Authorize an entity partnership engaged in the business of
to operate as a to operate as a a travel agency.
private employment private recruitment (4) Persons, partnerships or corporations
agency entity which have derogatory records.
When a license is Does not entitle a (5) Any official or employee of the DOLE,
given, one is also private recruitment POEA, OWWA, DFA and other
authorized to collect entity to collect government agencies directly involved
fees fees. in the implementation of R.A. 8042 as
amended and/or any of his/her relatives
within the 4th civil degree of
Private employment agency (PEA) v. Private consanguinity and affinity. [POEA Rules
recruitment entity (PRE) of 2002]
Private Private
Employment Recruitment
Agency Entity Non-transferability of license or authority
(1) No license or authority shall be used
directly or indirectly by any person other
than the one in whose favor it was issued
or at any place other than that stated in
the license or authority,
PAGE 23 OF 235
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(2) Nor may such license or authority be (2) Corporations with minimum paid-up
transferred, conveyed, or assigned to capital of P2,000,000.
any other person or entity.
Any transfer of business address, appointment
B.1. SUSPENSION OR CANCELLATION OF
or designation of any agent or representative
LICENSE OR AUTHORITY
including the establishment of additional
offices anywhere shall be subject to the prior The Secretary of Labor shall have the power to
approval of the Department of Labor. [Art. 29, suspend or cancel any license or authority to
LC] recruit employees for overseas employment
for:
See: POEA Rules Part II, Rule II, Sec. 7, 8, 9
▪ violation of rules and regulations issued
by the Department of Labor, the
Enforceability of the license Overseas Employment Development
Board, and the National Seamen Board
Licensed agencies are prohibited from
conducting any recruitment activities of any ▪ violation of the provisions of this and
form outside of the address stated in the other applicable laws, General Orders
license, acknowledged branch or extension and Letters of Instructions. [Art. 35, LC]
office, without securing prior authority from
Acts prohibited under Article 34 are grounds
the POEA. [People vs. Buli-e, G.R. No. 123146
for suspension or cancellation of license. Note
(2003)]
that these acts likewise constitute illegal
recruitment under R.A. 8042 as amended by
R.A. 10022.
Duration of Validity
4 years [POEA Rules of 2002]
Who can suspend or cancel the license?
(1) DOLE Secretary
Citizenship requirement
(2) POEA Administrator
(1) Only Filipino citizens or
The power to suspend or cancel any license or
(2) Corporations, partnerships or entities at
authority to recruit employees for overseas
least seventy-five percent (75%) of the
employment is concurrently vested with the
authorized and voting capital stock of
POEA and the Secretary of Labor. [People v.
which is owned and controlled by
Diaz, G.R. 112175 (1996)]
Filipino citizens shall be permitted to
participate in the recruitment and
placement of workers, locally or
B.2. REGULATORY AND VISITORIAL
overseas. [Art. 27, LC]
POWERS OF THE DOLE SECRETARY
See: POEA Rules, Part II, Rule I, Sec. 1(a)
Regulatory & rule-making powers [Art. 36, LC]
The Secretary of Labor shall have the power to
Capitalization requirement restrict and regulate the recruitment and
placement activities of all agencies within the
All applicants for authority to hire or renewal
coverage of this Title and is hereby authorized
of license to recruit are required to have such
to issue orders and promulgate rules and
substantial capitalization as determined by
regulations to carry out the objectives and
the Secretary of Labor. [Art. 28, LC]
implement the provisions of this Title.
Based on POEA Rules the following are the
substantial capital requirements:
Visitorial powers [Art. 37, LC]
(1) Single proprietorships or partnerships
with minimum capitalization of The Secretary of Labor or his duly authorized
P2,000,000. representatives may, at any time, inspect the
premises, books of accounts and records of
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any person or entity covered by this Title,
require it to submit reports regularly on
prescribed forms, and act on violations of any
provisions of this Title.
Note: In the old case of Salazar vs. Achacoso
[G.R. No. 81510 (1990)], it was declared that
Art. 38 of the LC is unconstitutional and that
the Secretary of Labor and Employment
cannot issue a warrant of arrest.
B.3. REMITTANCE OF FOREIGN EXCHANGE
EARNINGS
It shall be mandatory for all Filipino workers
abroad to remit a portion of their foreign
earnings to their families, dependents, and/or
beneficiaries in the country. [Art. 22, LC]
Amount required to be remitted [Executive
Order No. 857]
The amount of one’s salary required to be
remitted depends on the type or nature of work
performed by the employee.
The following are the percentages of foreign
exchange remittance required from various
kinds of migrant workers:
(1) Seaman or mariner – 80% of basic
salary
(2) Workers for Filipino contractors and
construction companies – 70%
(3) Doctors, engineers, teachers, nurses
and other professional workers whose
contract provide for free board and
lodging – 70%
(4) All other professional workers whose
employment contracts do not provide
for free board and lodging facilities –
50%
(5) Domestic and other service workers –
50%
(6) All other workers not falling under the
aforementioned categories – 50%
(7) Performing artists – 50%
Individuals exempted from the mandatory
remittance requirement:
PAGE 25 OF 235
LABOR LAW
(1) The immediate family members,
dependents or beneficiaries of migrant
workers residing with the latter abroad;
(2) Filipino servicemen working within US
military installations;
(3) Immigrants and Filipino professionals
working with the United Nations and its
agencies or other specialized bodies.
C. EMPLOYMENT OF NON-
RESIDENT ALIENS
Section 12, Art XII, Constitution
Art. 12 Statement of objectives – It is the policy
of the State:
(e) To regulate the employment of aliens,
including the establishment of a registration
and/or work permit system;
Article 43, Labor Code (LC)
Art. 43 (formerly 40) Statement of objective –
It is the objective of this Title to develop
human resources, establish training
institutions, and formulate such plans and
programs as will ensure efficient allocation,
development and utilization of the nation’s
manpower and thereby promote employment
and accelerate economic and social growth.
Article 45, LC
Art. 45 (formerly 42) National Manpower and
Youth Council; Composition – To carry out the
objectives of this Title, the National Manpower
and Youth Council, which is attached to the
Department of Labor for policy and program
coordination and hereinafter referred to as the
Council, shall be composed of the Secretary of
Labor as ex- officio chairman, the Secretary of
Education and Culture as ex-officio vice-
chairman, and as exofficio members, the
Secretary of Economic Planning, the Secretary
of Natural Resources, the Chairman of the
Civil Service Commission, the Secretary of
Social Welfare, the Secretary of Local
UP LAW BOC LABOR STANDARDS
Government, the Secretary of Science and
Technology, the
Secretary of Trade and Industry and the
Director-General of the Council. The Director
General shall have no vote.
C.1. COVERAGE
DO 97-09, Sec. 1
Coverage – All foreign nationals who intend to
engage in gainful employment in the
Philippines shall apply for Alien Employment
Permit (AEP)
Covered: All aliens employed or seeking
employment in the Philippines, and their
present or prospective employers [Sec. 1, Rule
XIV, Book I, Omnibus Rules].
Exemptions:
1. All members of the diplomatic service
and foreign government officials
accredited by and with reciprocity
arrangement with the Philippine
government.
2. Officers and staff of international
organizations of which the Philippine
government is a member, and their
legitimate spouses desiring to work in
the Philippines.
3. Foreign nationals elected as members
of the Governing Board who do not
occupy any other position, but have only
voting rights in the corporation:
4. All foreign nationals granted exemption
by law:
5. Owners and representatives of foreign
principals whose companies are
accredited by the Philippine Overseas
Employment Administration (POEA),
who come to the Philippines for a limited
period and solely for the purpose of
interviewing Filipino applicants for
employment abroad:
6. Foreign national who come to the
Philippines to teach, present and/or
conduct research studies in universities
and colleges as visiting, exchange or
PAGE 26 OF 235
LABOR LAW
adjunct professors under formal
agreements between the Philippine
government and foreign government ;
provided that the exemption is on a
reciprocal basis; and
7. Permanent resident foreign nationals,
probationary or temporary resident visa
holders [Sec. 2, D.O. 97-09].
C.2 CONDITIONS FOR GRANT OF PERMIT
Requirements for Employment Permit
Application
The application for an employment permit
shall be accompanied by the following:
(a) Curriculum vitae duly signed by the
applicant indicating his educational
background, his work experience and
other data showing that he possesses
high technical skills in his trade or
profession;
(b) Contract of employment between the
employer and the principal which shall
embody the following, among others:
(1) That the non-resident alien worker
shall comply with all applicable
laws and rules and regulations of
the Philippines;
(2) That the non-resident alien worker
and the employer shall bind
themselves to train at least two (2)
Filipino understudies for a period to
be determined by the Secretary of
Labor and Employment; and
(3) That he shall not engage in any
gainful employment other than that
for which he was issued a permit.
(c) A designation by the employer of at
least two (2) understudies for every alien
worker. Such understudies must be the
most ranking regular employees in the
section or department for which the
expatriates are being hired to ensure the
actual transfer of technology [Sec. 5,
Rule XIV, Book I, Omnibus Rules].
Issuances of Employment Permit
The Secretary of Labor and Employment may
issue an employment permit to the
UP LAW BOC LABOR STANDARDS LABOR LAW

applicant based on: from the date of its issuance unless sooner
revoked by the Secretary of Labor and
a) Compliance by the applicant and his
Employment for violation of any provisions of
employer with the requirements of
the Code or of these Rules [Sec 7, Rule XIV,
Section 2 hereof (submission of list of
Book I, Omnibus Rules].
foreign nationals by employer to the
Bureau);
b) Report of the Bureau Director as to the The AEP shall be valid for the position and the
availability or nonavailability of any company for which it was issued for a period of
person in the Philippines who is one (1) year, unless the employment contract,
competent, able, and willing to do the consultancy services, or other modes of
job for which the services of the engagement provides otherwise, which in no
applicant are desired; case shall exceed five (5) years [DO 97-09, Sec.
11].
c) His assessment as to whether or not the
employment of the applicant will
redound to the national interest;
C.4 DENIAL OF APPLICATION
d) Admissibility of the alien as certified by
Grounds:
the Commission on Immigration and
Deportation; 1. Misrepresentation of facts in the
application;
e) The recommendation of the Board of
Investments or other appropriate 2. Submission of falsified documents
government agencies if the applicant
3. The foreign national has a derogatory
will be employed in preferred areas of
record; and,
investments or in accordance with
imperatives of economic developments; 4. Availability of a Filipino who is
and competent, able and willing to do the
job intended for the foreign national
f) Payments of a P100.00 fee [Sec. 6, Rule
[Sec. 10, D.O. 97-09]
XIV, Book I, Omnibus Rules].

Officer who Denies AEP: Regional Director

C.3 VALIDITY OF AEP
Denial of application for AEP shall cause the
Subject to renewal upon showing of good
forfeiture of the fees paid by the applicant.
cause, the employment permit shall be valid
for a minimum period of one (1) year starting

PAGE 27 OF 235
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SUMMARY OF ALIEN EMPLOYMENT REGULATIONS

(lifted from B2017 Labor 1 Reviewer)
Coverage Aliens employed or seeking employment
Exceptions Officers and their spouses of int’l orgs where Phils. is a member
Members of governing board with voting rights
Those granted exemption
Owners of companies accredited with POEA with purpose of interviewing
Filipinos for employment abroad
Academic purposes (to teach and conduct research)
Resident foreign nationals
Temporary resident visa holders
Conditions for grant of Requirements
permit
CV (educational background, work experience, and high technical skills)
Contract of employment—must include:
1. Compliance with laws, rules and regulations
2. Undertaking of alien and employer (ER) to train at least 2
understudies > must be the most ranking regular employee
3. Purpose: Ensure the actual transfer of technology
4. Undertaking to not engage in other employment not in permit
Issuance of AEP
Compliance with the requirements
Documents from Bureau Director:
1. Report of the availability and non-availability of Filipinos
competent, able, and willing to do the job
2. Assessment that it will be for the national interest
Certification of admissibility from Commission on Immigration
Recommendation from Board of Investments that employment is in
preferred areas of investment
Payment of PhP100 fee
Validity of AEP Valid for 1 year
Subject to renewal upon showing of good cause
Cannot extend beyond 5 years
Revocation or Grounds
Cancellation
Non-compliance with the rules
Misrepresentation in application
Meritorious objection/information
Conviction of criminal offense
Termination of employment

PAGE 18 OF 235
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D. TRAINING AND EMPLOYMENT OF
SPECIAL WORKERS
D.1 APPRENTICES AND LEARNERS
RA 7796 (TECHNICAL EDUCATION AND
SKILLS DEVELOPMENT ACT OF 1994 OR
TESDA ACT OF 1994)
D.1.A. Apprentices
Policy objectives
1. To help meet the demand of the
economy for trained manpower;
2. To establish a national apprenticeship
program through the participation of
employers, workers and government
and non-government agencies; and
3. To establish apprenticeship standards
for the protection of apprentices.
Definition
1. “Apprenticeship" - training within
employment with compulsory related
theoretical instruction involving a
contract between an apprentice and an
employer on an approved
apprenticeable occupation [Sec 4(j), RA
7794]
2. "Apprentice" is a person undergoing
training for an approved apprenticeable
occupation during an apprenticeship
agreement [Sec 4(k)]
3. "Apprenticeship Agreement" is a
contract wherein a prospective
employer binds himself to train the
apprentice who in turn accepts the
terms of training for a recognized
apprenticeable occupation emphasizing
the rights, duties and responsibilities of
each party [Sec 4(l)]
4. "Apprenticeable Occupation" is an
occupation officially endorsed by a
tripartite body and approved for
apprenticeable by the Authority [Sec
4(m)]
The act of filing the proposed apprenticeship
program with the DOLE is a preliminary step
towards its final approval, and does not
PAGE 18 OF 235
LABOR LAW
instantaneously give rise to an employer-
apprentice relationship. It must be duly
approved by the Minister of Labor and
Employment. Hence, since the apprenticeship
agreement between petitioner and
respondent has no force and effect,
respondent's assertion that he was hired not
as an apprentice but as a delivery boy deserves
credence. [Nitto Enterprises vs. NLRC, G.R. No.
114337, (1995)]
Conditions under which children below 15 may
be employed
Children below fifteen (15) years of age shall
not be employed except:
(1) When a child works directly under the
sole responsibility of his parents or legal
guardian and where only members of
the employer's family are employed:
Provided, however, That his
employment neither endangers his life,
safety, health and morals, nor impairs
his normal development: Provided,
further, That the parent or legal
guardian shall provide the said minor
child with the prescribed primary and/or
secondary education; or
(2) Where a child's employment or
participation in public entertainment or
information through cinema, theater,
radio or television is essential: Provided,
The employment contract is concluded
by the child's parents or legal guardian,
with the express agreement of the child
concerned, if possible, and approval of
the Department of Labor and
Employment: and Provided, That the
following requirements in all instances
are strictly complied with:
(a) The employer shall ensure the
protection, health, safety, morals
and normal development of the
child;
(b) The employer institute measures to
prevent the child's exploitation or
discrimination taking into account
the system and level of
remuneration and the duration and
arrangement of working time; and
(c) The employer shall formulate and
UP LAW BOC LABOR STANDARDS
implement, subject to the approval
and supervision of competent
authorities, a continuing program
for training and skills acquisition of
the child.
In the above exceptional cases where any such
child may be employed, the employer shall
first secure, before engaging child, a work
permit from the Department of Labor and
Employment which shall ensure observance of
the above requirements.
The Department of Labor and Employment
shall promulgate rules and regulations
necessary for the effective implementation of
this Section. [RA 7160, Sec. 12 as amended by
RA 7658, Sec. 1]
Qualifications of apprentice
(a) Be at least 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.
Trade and industry associations may
recommend to the Secretary of Labor
appropriate educational requirements for
different occupations. [Art. 59, LC]
Integrating both the abovementioned
provisions then the qualifications of an
apprentice are as follows:
(1) At least 15 years of age [as amended by
R.A. 7610], provided that if he is below 18
years, he shall not be eligible for
hazardous occupation;
(2) Possess vocational aptitude and
capacity for appropriate tests;
(3) Possess the ability to comprehend and
follow oral and written instructions. [Art.
59 of the LC, as amended by R.A. 7610]
(4) Physically fit for occupation
Requisites for Employment of Apprentices:
1. Employer should be engaged in a
business that is considered a highly
technical industry (trade, business,
PAGE 19 OF 235
LABOR LAW
enterprise, which utilizes application of
advanced technology)
2. Job should be classified as an
apprenticeable occupation.
Apprenticeable Age: 15 years-old and above
[RA 7658]
Allowed employment
Apprenticeable Occupation – is an occupation
officially endorsed by a tripartite body and
approved to be apprenticeable by the
authority. [Sec. 4, RA 7796]
Employment of Apprentices
When applicable:
(1) Only employers in highly technical
industries may employ apprentices; and
(2) Only in apprenticeable occupations
approved by the Secretary of Labor. [Art.
60, Labor Code]
Terms and conditions
Apprenticeship agreements, including the
wage rates of apprentices, shall conform to
the rules issued by the Secretary of Labor and
Employment.
The period of apprenticeship shall not exceed
six months.
Apprenticeship agreements providing for
wage rates below the legal minimum wage,
which in no case shall start below 75 percent
of the applicable minimum wage, may be
entered into only in accordance with
apprenticeship programs duly approved by
the Secretary of Labor and Employment. [Art.
61, Labor Code as amended by E.O. 111-1986]
The Secretary of Labor and Employment may
authorize the hiring of apprentices without
compensation whose training on the job is
required by the school or training program
curriculum or as requisite for graduation or
board examination. [Art. 72, Labor Code]
The wages of apprentices and learners shall in
no case be less than seventy-five percent
(75%) of the applicable minimum wage rates.
UP LAW BOC LABOR STANDARDS
[Sec. 7, Wage Order No. NCR-19]
Enforcement
Investigation of violation of apprenticeship
agreement. - Upon complaint of any
interested person or upon its own initiative,
the appropriate agency of the Department of
Labor and Employment or its authorized
representative shall investigate any violation
of an apprenticeship agreement pursuant to
such rules and regulations as may be
prescribed by the Secretary of Labor and
Employment. [Art. 65, LC]
Appeal to the Secretary of Labor and
Employment. - The decision of the authorized
agency of the Department of Labor and
Employment may be appealed by any
aggrieved person to the Secretary of Labor
and Employment within five (5) days from
receipt of the decision. The decision of the
Secretary of Labor and Employment shall be
final and executory. [Art.66, LC]
Exhaustion of administrative remedies. No
person shall institute any action for the
enforcement of any apprenticeship agreement
or damages for breach of any such agreement,
unless he has exhausted all available
administrative remedies. [Art. 67, LC]
Incentives for employers
An additional deduction from taxable income
of one-half (1/2) of the value of labor training
expenses incurred for developing the
productivity and efficiency of apprentices shall
be granted to the person or enterprise
organizing an apprenticeship program:
Provided, That such program is duly
recognized by the Department of Labor and
Employment: Provided, further, That such
deduction shall not exceed ten (10%) percent
of direct labor wage: and Provided, finally,
That the person or enterprise who wishes to
avail himself or itself of this incentive should
pay his apprentices the minimum wage. [Art.
71, LC]
Requisites of the deduction:
a. Apprenticeship program must be duly
approved by the DOLE;
PAGE 20 OF 235
LABOR LAW
b. Deduction shall NOT exceed 10% of
direct labor wage;
c. Employer must pay his apprentices the
minimum wage.
Summary of Rules:
(1) The apprentice must be paid not less
than 75% of the prescribed minimum
salary [Art. 61, LC];
HOWEVER, the employer MAY NOT pay
any wage if the apprenticeship training is:
a. part of the school curriculum,
b. a requirement for graduation, or
c. a requirement for board
examination [Art. 72]
(2) The apprenticeship agreement must be
approved by the DOLE Secretary
(without such one shall be deemed a
regular employee) [Nitto Enterprises v.
NLRC, Sept. 29, 1995];
(3) The employer is not compelled to
continue one’s employment upon
termination of apprenticeship;
(4) One-half (1/2) of the value of labor
training expenses incurred for
developing the productivity and
efficiency of apprentices of the training
cost is deducted from the employer’s
income tax but it shall not exceed 10% of
direct labor wage [Art. 71]
Working scholars – there is no employer-
employee relationship between students on
one hand, and schools, colleges or universities
on the other, where there is written agreement
between them under which the former agree
to work for the latter in exchange for the
privilege to study free of charge, provided, the
students are given real opportunities,
including such facilities as may be reasonable
and necessary to finish their chosen courses
under such agreement. [Sec. 14, Rule X, IRR]
D.1.B. Learners
Learners - persons hired as trainees in semi-
skilled and other industrial occupations which
are non-apprenticeable and which may be
UP LAW BOC LABOR STANDARDS
learned through practical training on the job
in a relatively short period of time which shall
not exceed three (3) months [Art 73, Labor
Code, Sec 4(n), RA 7796]
When may learners be hired
(1) No experienced workers are available;
(2) The employment of learners being
necessary to prevent the curtailment of
employment opportunities; and
(3) The employment will neither create
unfair competition in terms of labor
costs nor impair working standards.
[Art. 74, Labor Code]
Terms and conditions of employment
Any employer desiring to employ learners
shall enter into a learnership agreement with
them, which agreement shall include:
(1) The duration of the learnership period,
which shall not exceed three (3) months;
(2) The wages or salary rates of the learners
which shall begin at not less than
seventy-five percent (75%) of the
applicable minimum wage; and
(3) A commitment to employ the learners if
they so desire, as regular employees
upon completion of the learnership. All
learners who have been allowed or
suffered to work during the first two (2)
months shall be deemed regular
PAGE 21 OF 235
LABOR LAW
employees if training is terminated by
the employer before the end of the
stipulated period through no fault of the
learners.
The learnership agreement shall be subject to
inspection by the Secretary of Labor and
Employment or his duly authorized
representative. [Art. 75, LC]
Learners employed in piece or incentive-rate
jobs during the training period shall be paid in
full for the work done. [Art. 76, LC]
Summary of Rules
(1) The duration of learnership shall not
exceed 3 months [Art. 73, LC];
(2) If the learnership of 3 months is
completed, the employer may be
compelled to continue with the services
of the learner as a regular employee;
There is a commitment from the
employer to employ the learners if they
so desire, as regular employees upon
completion of the learnership;
(3) If the learner is dismissed from service
without just and valid cause and without
due process after 2 months of service, he
will be deemed as regular employee;
[Art. 75(d)] and
(4) The wages or salary rates of the learners
which shall begin at not less than 75%
of the applicable minimum wage. [Art.
75(c)]
UP LAW BOC LABOR STANDARDS LABOR LAW

Distinctions between Learnership and Apprenticeship

Apprenticeship Learnership
Highly technical industries Semi-skilled industrial occupations

Practical training whether or not such practical

Practical training supplemented by related
training is supplemented by theoretical
theoretical instruction
instructions

Apprenticeable occupations approved by the

Non-apprenticeable occupations
SOLE
Written apprentice agreement ratified by the
Learnership agreement
appropriate committees
More than 3 months, shall not exceed 6 months Shall not exceed 3 months

1. The person is at least 15 years of age, provided

those who are at least 15 years of age but less
than 18 may be eligible for apprenticeship only 1. When no experienced workers are available;
in non-hazardous occupation;
2.The person is physically fit for the occupation in
which he desires to be trained;
3. The person possesses vocational aptitude and
capacity for the particular occupation as
established through appropriate tests; and
4.The person is able to comprehend and follow
oral and written instructions.
Wage rate shall begin at not less than 75% of the
minimum wage
No compensation if SOLE authorizes, as OJT is
required by the school
Deductibility of ½ of training costs incurred,
provided:
• Program is duly recognized by DOLE
• Deduction shall not exceed 10% of direct labor
wage
• Payment of minimum wage to apprenticeship
2. The employment of learners is necessary to
prevent curtailment of employment
opportunities; and
3. The employment does not create unfair
competition in terms of labor costs or impair
or lower working standards.
Wage rate shall begin at not less than 75% of
the minimum wage
Learners in piecework shall be paid in full for the
work done
A commitment to employ the learners if they so
desire, as regular employees upon completion of
the learnership.
All learners who have been allowed or suffered
to work during the first 2 months shall be
deemed regular employees if training is
terminated by the employer before the end of
the stipulated period through no fault of the
learners.

PAGE 18 OF 235
UP LAW BOC LABOR STANDARDS
D.2. HANDICAPPED WORKERS – b. Disabled persons have the same rights as
DIFFERENTLY-ABLED WORKERS
[RA 7277 - Magna Carta for Disabled Persons,
as amended by RA 9442]
D.2.A. Definitions
1. Disabled persons 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 [Sec 4(a), RA
7277]
2. Impairment is any loss, diminution or
aberration of psychological,
physiological, or anatomical structure or
function [Sec 4(b)]
3. Disability shall mean (1) a physical or
mental impairment that substantially
limits one or more psychological,
physiological or anatomical function of
an individual or activities of such
individual; (2) a record of such an
impairment; (3) being regarded as
having such an impairment [Sec 4(c)]
4. 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 [Sec 4(d)]
D.2.B. Policy Declaration
RA 7277, Sec . 2
Declaration of Policy — The grant of the
rights and privileges for disabled persons
shall be guided by the following principles:
a. Disabled persons are part of Philippine
society, thus the State shall give full support
to the improvement of the total well-being
of disabled persons and their integration
into the mainstream of society. Toward this
end, the State shall adopt policies ensuring
the rehabilitation, self- development and
self-reliance of disabled persons. It shall
develop their skills and potentials to enable
them to compete favorably for available
opportunities.
PAGE 52 OF 235
LABOR LAW
other people to take their proper place in
society. They should be able to live
freely and as independently as possible. This
must be the concern of everyone — the
family, community and all government and
nongovernment organizations. Disabled
persons' rights must never be perceived as
welfare services by the Government.
c. The rehabilitation of the disabled persons
shall be the concern of the Government in
order to foster their capacity to attain a more
meaningful, productive and satisfying life.
To reach out to a greater number of disabled
persons, the rehabilitation services and
benefits shall be expanded beyond the
traditional urbanbase centers to community
based programs that will ensure full
participation of different sectors as
supported by national and local government
agencies.
d. The State also recognizes the role of the
private sector in promoting the welfare of
disabled persons and shall encourage
partnership in programs that address their
needs and concerns.
e. To facilitate integration of disabled
persons into the mainstream of society, the
State shall advocate for and encourage
respect for disabled persons. The State shall
exert all efforts to remove all social, cultural,
economic, environmental and attitudinal
barriers that are prejudicial to disabled
persons.
D.2.C. Coverage
Sec 3, RA 7277
Coverage — This Act shall cover all disabled
persons and, to the extent herein provided,
departments, offices
and agencies of the National Government or
nongovernment organizations involved in
the attainment of the objectives of this Act.
Rights of disabled workers
(1) Equal opportunity for employment
No disabled person shall be denied access to
opportunities for suitable employment. A
UP LAW BOC LABOR STANDARDS
qualified disabled EE 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.
[Sec. 5 (par. 1), RA 7277]
(2) Reserved contractual positions
5% of all casual, emergency and contractual
positions in the DSWD; DOH, DepEd; and
other government agencies, offices or
corporations engaged in social development
shall be reserved for disabled persons. [Sec 5
(par. 2), RA 7277]
(3) Sheltered employment
Sheltered Employment refers to the provision
of productive work for disabled persons
through workshop providing special facilities,
income producing projects or homework
schemes with a view to given them the
opportunity to earn a living thus enabling
them to acquire a working capacity required in
open industry. [Sec 4(i), RA 7277]
If suitable employment for disabled persons
cannot be found through open employment,
the State shall endeavor to provide it by
means of sheltered employment.
In the placement of disabled persons in
sheltered employment, it shall accord due
regard to the individual qualities, vocational
goals and inclinations to ensure a good
working atmosphere and efficient production.
[Sec 6, RA 7277]
Apprenticeship Opportunities. Disabled
persons shall be eligible as apprentices or
learners: Provided, that their handicap is NOT
as much as to effectively impede the
performance of job operations in the particular
occupation for which they are hired; provided,
further, That after the lapse of the period of
apprenticeship, if found satisfactory in the job
performance, they shall be eligible for
employment. [Art. 81 LC; Sec. 7, RA 7277]
[Bernardo v NLRC & FEBTC, 1999]
(4) Full minimum wage
PAGE 53 OF 235
LABOR LAW
All qualified handicapped workers shall
receive the full amount of the minimum wage
rate prescribed herein. [Sec 7, Wage Order No.
NCR-19]
In this light, the Magna Carta for Disabled
Persons mandates that a qualified disabled EE
should be given the same terms and
conditions of employment as a qualified able-
bodied person. Since the Magna Carta accords
them the rights of qualified able-bodied
persons, they are thus covered by Article 280
of the Labor Code. In the present case, the
handicap of petitioners (deaf-mutes) is NOT a
hindrance to their work. The eloquent proof of
this statement is the repeated renewal of their
employment contracts. [Bernardo v. NLRC,
G.R. No. 122917 (1999)]
Discounts and other privileges
Persons with disability shall be entitled to the
following:
(a) At least 20% discount from all
establishments relative to the utilization
of all services in hotels and similar
lodging establishments; restaurants
and recreation centers for the exclusive
use or enjoyment of persons with
disability;
(b) A minimum of 20% discount on
admission fees charged by theaters,
cinema houses, concert halls, circuses,
carnivals and other places of culture,
leisure and amusement for the exclusive
use or enjoyment of persons with
disability;
(c) At least 20% discount for the purchase
of medicines in all drugstores for the
exclusive use or enjoyment of persons
with disability;
(d) At least 20% discount on medical and
dental services including diagnostic and
laboratory fees such as, but not limited
to, x-rays, computerized tomography
scans and blood tests, in all government
facilities, subject to guidelines to be
issued by the DOH in coordination with
the PHILHEALTH.
(e) At least 20% discount on medical and
dental services including diagnostic and
laboratory fees and professional fees of
UP LAW BOC LABOR STANDARDS
attending doctors in all private hospitals
and medical facilities, in accordance
with the rules and regulations to be
issued by the DOH, in coordination with
PHILHEALTH;
(f) At least 20% discount on fare for
domestic air and sea travel for the
exclusive use or enjoyment of persons
with disability;
(g) At least 20% discount in public railways,
skyways, and bus fare for the exclusive
use and enjoyment of persons with
disability.
(h) Educational assistance to persons with
disability, for them to pursue primary,
secondary, tertiary, post tertiary, as well
as vocational or technical education, in
both public and private schools, through
the provision of scholarships, grants,
financial aids, subsidies and other
incentives to qualified persons with
disability, including support for books,
learning materials and uniform
allowance to the extent feasible;
Provided, That persons with disability
shall meet minimum admission
requirements;
(i) To the extent practicable and feasible,
the continuance of the same benefits
and privileges given by the GSIS, SSS,
and PAG-IBIG, as the case may be, as
are enjoyed by those in actual service;
(j) To the extent possible, the government
may grant special discounts in special
programs for persons with disability on
purchase of basic commodities, subject
to guidelines to be issued for the
purpose by the DTI and the DA; and
(k) Provision of express lanes for persons
with disability in all commercial and
government establishments; in the
absence thereof, priority shall be given
to them. [Sec 32, RA 7277, as amended
by RA 9442]
Conditions for entitlement
(1) Persons with disability who are Filipino
citizens upon submission of any of the
following as proof of his/her entitlement
thereto:
PAGE 54 OF 235
LABOR LAW
(a) An identification card issued by the
city or municipal mayor or the
barangay captain of the place where
the persons with disability reside;
(b) The passport of the persons with
disability concerned; or
(c) Transportation discount fare ID
issued by the National Council for
the Welfare of Disabled Persons
(NCWDP).
(2) The privileges may not be claimed if the
persons with disability claim a higher
discount as may be granted by the
commercial establishment and/or
under other existing laws or in
combination with other discount
program/s. [Sec 32, RA 7277, as
amended by RA 9442]
D.2.D.1. EQUAL OPPORTUNITY
Sec 5, RA 7277
Equal Opportunity for Employment — No
disable person shall be denied access to
opportunities for suitable employment. A
qualified disabled employee 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. Five percent (5%) of all casual
emergency and contractual positions in
the Departments of Social Welfare and
Development; Health; Education, Culture and
Sports; and other government agencies,
offices or corporations engaged in social
development shall be reserved for disabled
persons.
D.2.D.2. DISCRIMINATION ON EMPLOYMENT
No entity, whether public or private, shall
discriminate against a qualified disabled
person 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.
Acts of Discrimination:
UP LAW BOC LABOR STANDARDS
(a) Limiting, segregating or classifying a
disabled job applicant 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 disabled person 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 disabled employee, 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 disabled employee with
respect to promotion, training
opportunities, study and scholarship
grants, solely on account of the latter's
disability;
(f) Re-assigning or transferring a disabled
employee to a job or position he cannot
perform by reason of his disability;
(g) Dismissing or terminating the services of
a disabled employee 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 disabled persons;
(h) Failing to select or administer in the
most effective manner employment
tests which accurately reflect the skills,
aptitude or other factor of the disabled
applicant or employee that such tests
purports to measure, rather than the
PAGE 55 OF 235
LABOR LAW
impaired sensory, manual or speaking
skills of such applicant or employee, if
any; and
(i) Excluding disabled persons from
membership in labor unions or similar
organizations [Sec. 32, RA 7277]
Occasions when a Disabled Applicant may be
Subjected to Medical Examination
(a) All entering employees are subjected to
such an examination regardless of
disability;
(b) Information obtained during the
medical condition or history of the
applicant is collected and maintained
on separate forms and in separate
medical files and is treated as a
confidential medical record; Provided,
however, That:
(1) Supervisors and managers may be
informed regarding necessary
restrictions on the work or duties of
the employees and necessary
accommodations;
(2) First aid and safety personnel may
be informed, when appropriate, if
the disability may require
emergency treatment;
(3) Government officials investigating
compliance with this Act shall be
provided relevant information on
request; and
(4) The results of such examination are
used only in accordance with this
Act [Sec 33, RA 7277].
Other Provisions Against Discrimination
(1) Employment Entrance Examination
Upon an offer of employment, a disabled
applicant may be subjected to medical
examinations, on the following occasions:
(a) all entering employees are subjected to
such an examination regardless of
disability;
(b) Information obtained during the
medical condition or history of the
applicant is collected and maintained
UP LAW BOC LABOR STANDARDS
on separate forms and in separate
medical files and is treated as a
confidential medical record; Provided,
however, That:
(i) supervisors and managers may be
informed regarding necessary
restrictions on the work or duties of
the employees and necessary
accommodations:
Tax Incentives for Employers/ Establishments
(ii) first aid and safety personnel may be
informed, when appropriate, if the
disability might require emergency
treatment;
(iii) government officials investigating
compliance with this Act shall be
provided relevant information on
request; and
(iv) the results of such examination are
used only in accordance with this
Act. [Sec. 35, RA 7277 as amended by
RA 9442]
(2) Prohibition on Verbal, Non-Verbal Ridicule
and Vilification Against Persons with
Disability
(a) No individual, group or community shall
execute any of these acts of ridicule
against persons with disability in any
time and place which could intimidate or
result in loss of self-esteem of the latter.
[Sec. 40, RA 7277, as amended by RA
9442]
(b) Any individual, group or community is
hereby prohibited from vilifying any
person with disability which could result
into loss of self-esteem of the latter.
[Sec. 42, RA 7277, as amended by RA
9442]
Public Ridicule - The act of making fun of or
contemptuous imitating or making mockery of
persons with disability whether in writing, or in
words, or in action due to their impairments.
[Sec. 33, RA 7277, as amended by RA 9442]
Vilification includes:
PAGE 56 OF 235
LABOR LAW
(1) The utterance of slanderous and abusive
statements against a person with
disability; and/or,
(2) An activity in public which incites hatred
towards, serious contempt for, or severe
ridicule of persons with disability. [Sec.
41, RA 7277, as amended by RA 9442]
(1) For employment of disabled persons -
additional deduction, from their gross
income, equivalent to 25% of the total
amount paid as salaries and wages to
disabled persons
(a) Private entities
(b) Employ disabled persons either as
regular EEs, apprentice or learner
(c) Provided such entities present proof
as certified by the DOLE and the
DOH [Sec. 8[b], RA 7277]
(2) For construction of disabled-friendly
facilities - additional deduction from
their net taxable income, equivalent to
50% of the direct costs of the
improvements or modifications
(a) Private entities
(b) That improve or modify their
physical facilities in order to provide
reasonable accommodation for
disabled persons
(c) Does NOT apply to improvements or
modifications or facilities required
under BP 344. [Sec. 8 (c), RA 7277]
(3) For establishments giving discounts –
may claim such discounts as tax
deductions based on the net cost of the
goods sold or services rendered
(a) The cost of the discount shall be
allowed as deduction from gross
income for the same taxable year
that the discount is granted
(b) The total amount of the claimed tax
deduction net of VAT if applicable,
shall be included in their gross sales
receipts for tax purposes and shall
UP LAW BOC LABOR STANDARDS
be subject to proper documentation
and to the provisions of the National
Internal Revenue Code, as
amended. [Sec. 32, RA 7277, as
amended by RA 9442]
Enforcement
Enforcement by the Secretary of Justice
(a) Denial of Right
Duty to Investigate. The Secretary of
Justice shall investigate alleged
violations of this Act, and shall
undertake periodic reviews of
compliance of covered entities under
this Act.
(b) Potential Violations
The Secretary of Justice may commence
a legal action in any appropriate court if
the Secretary has reasonable cause to
believe that
(1) any person or group of persons is
engaged in a pattern of practice of
discrimination under this Act; or
(2) any person or group of persons has
been discriminated against under
this Act and such discrimination
raises and issue of general public
importance. [Sec 44, RA 7277]
Authority of Court. The court may grant any
equitable relief that such court considers to be
appropriate, including, to the extent required
by this Act:
(a) granting temporary, preliminary or
permanent relief;
(b) providing an auxiliary aid or service,
modification of policy, practice or
procedure, or alternative method; and
(c) making facilities readily accessible to and
usable by individuals with disabilities.
[Sec 45, RA 7277]
Penal Clause
PAGE 57 OF 235
LABOR LAW
(a) Any person who violates any provision of
this Act shall suffer the following
penalties:
(i) for the first violation, a fine of not
less than Fifty thousand
pesos (P 50,000.00) but not
exceeding One hundred thousand
pesos (P100,000.00) or
imprisonment of not less than six (6)
months but not more than two (2)
years, or both at the discretion of the
court; and
(ii) for any subsequent violation, a fine
of not less than One hundred
thousand pesos (P100,000.00) but
not exceeding Two hundred
thousand pesos (P 200,000.00) or
imprisonment for less than two (2)
years but not more than six (6) years,
or both at the discretion of the court.
(b) Any person who abuses the privileges
granted herein shall be punished with
imprisonment of not less than six (6)
months or a fine of not less than Five
thousand pesos (P 5,000.00) but not
more than Fifty thousand pesos (P
50,000.00), or both, at the discretion of
the court.
(c) If the violator is a corporation,
organization or any similar entity, the
officials thereof directly involved shall
be liable therefor. (d). If the violator is an
alien or a foreigner, he shall be deported
immediately after service of sentence
without further deportation
proceedings. [Sec 46, RA 7277]
UP LAW BOC LABOR STANDARDS
III.LABOR STANDARDS
Labor Standards refers to the minimum
requirements prescribed by existing laws,
rules and regulations relating to wages, hours
of work, cost-of-living allowance and other
monetary and welfare benefits, including
occupational, safety and health standards.
A. CONDITIONS OF EMPLOYMENT
A.1 SCOPE [ART. 82, LABOR CODE]
General rule: Shall apply to employees in all
establishments and undertakings whether for
profit or not. [Art. 82, LC]
Exceptions (those NOT covered by Art. 82):
(1) Government employees [Art. 82; Art. 76]
(EXCEPTION TO THE EXCEPTION:
Employees of GOCCs created under the
Corporation Code)
(2) Managerial Employees including
members of the managerial staff [Art.
82]
(3) Field Personnel [Art. 82]
(4) Members of the family of the employer
who are dependent on him for support
[Art. 82];
(5) Domestic workers or kasambahay [Art.
141, RA 10361] (EXCEPTION TO THE
EXCEPTION: Assignment in a routinary or clerical in nature but requires
Commercial, Industrial or Agricultural
Enterprise)
(6) Persons in the personal service of
another
(7) Workers who are paid by result as
determined by DOLE regulation [Art.
82]
A.1.A. Government Employees
The terms and conditions of employment of all
government employees, including employees
of GOCCs, are governed by the Civil Service
rules and regulations, not by the Labor Code
(Art. 291).
However, not all GOCCs are governed by the
Civil Service Rules; only those created by
PAGE 58 OF 235
LABOR LAW
original charter are governed by the Civil
Service rules:
“Following Sec. 2(i) Art. IX-B of 1987 Phil.
Constitution, the test in determining whether
a government owned corporation is subject to
the Labor Code or the Civil Service law is
finding out what created it – if its created by a
special charter, then, Civil Service Law applies,
if it is created by the General Corporation Law,
then the Labor Code applies.” [PNOC Energy
Development Corp. v. NLRC (1991)]
A.1.b. Managerial Employees
Two definitions of “managerial employees” in
the Labor Code:
[Art. 82, LC] Those whose primary duty
consists of the management of the
establishment in which they are employed
or of a department or subdivision thereof
and to other officers or members of the
managerial staff.
[Art. 212 (m), LC] One who is vested with the
powers or prerogatives to lay down and
execute management policies and/or to
hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees.
Supervisory employees are those who, in
the interest of the employer, effectively
recommend such managerial actions if the
exercise of such authority is not merely
the use of independent judgment. All
employees not falling within any of the
above definitions are considered rank and
file employees for purposes of this Book.
The definition in Art. 82 covers more people
than that in Article 212 (m) as Article 82 also
includes managerial staff. In effect,
managerial employees in Article 82 includes
supervisors, but Article 212(m) does not.
It follows that under Book V, supervisors are
allowed to form, join or assist a labor union.
Supervisors are not, however, entitled to the
benefits under Book III Articles 83 through 96,
being part of the exemption of managerial
employees as defined in Article 82. [Azucena]
UP LAW BOC LABOR STANDARDS LABOR LAW

Characteristics of managerial employees the work described in paragraphs (1), (2)

and (3) above.
[Book 3, Rule 1, Sec. 2(b), IRR]
Managerial employees are exempted from the
coverage of Book III Articles 83 through 96 if A.1.c. Field Personnel
they meet all of the following conditions:
Non-agricultural employees:
(1) Their primary duty consists of the
(1) Who regularly perform their duties away
management of the establishment in
from the principal or place of business or
which they are employed or of a
branch office of the employer,
department or sub-division thereof.
AND;
(2) They customarily and regularly direct
the work of two or more employees (2) Whose actual hours of work in the field
therein. cannot be determined with reasonable
certainty. [Art. 82, LC]
(3) They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations as
Legal Test: Control & Supervision of employer
to hiring and firing and as to the
promotion or any other change of status Although the fishermen perform non-
of other employees, are given particular agricultural work away from petitioner’s
weight. business offices, the fact remains that
throughout the duration of their work they are
under the effective control and supervision of
Managerial Staff also included as they are petitioner through the vessel’s patron or
considered managerial employees as well master. Hence, the fishermen are not “field
personnel”. [Mercidar Fishing Corporation v.
[Book 3, Rule 1, Sec. 2(c), IRR]
NLRC (1998)]
Officers or members of a managerial staff are
In order to determine whether an employee is
also exempted if they perform the following
a field employee, it is also necessary to
duties and responsibilities:
ascertain if actual hours of work in the field
(1) Their primary duty consists of the can be determined with reasonable certainty
performance of work directly related to by the employer. In so doing, an inquiry must
management policies of their employer; be made as to whether or not the employee’s
time and performance are constantly
(2) Customarily and regularly exercise
supervised by the employer. [Far East
discretion and independent judgment;
Agricultural Supply v. Lebatique (2007)]
(3) (a) Regularly and directly assist a
proprietor or a managerial employee
whose primary duty consists of the A.1.d. Dependent Family Members
management of the establishment in
Workers who are family members of the
which he is employed or subdivision
employer, and who are dependent on him for
thereof; OR
their support, are outside the coverage of this
(b) Execute under general supervision Title on working conditions and rest periods.
work along specialized or technical
lines requiring special training,
experience, or knowledge; OR A.1.e. Domestic Helpers
(c) Execute, under general supervision, Sec. 4(d), Art. 1, Kasambahay Law (RA 10361)
special assignments and tasks;
(4) Who do not devote more than 20% of
their hours worked in a work week to
activities which are not directly and
closely related to the performance of
PAGE 59 OF 235
UP LAW BOC LABOR STANDARDS
Domestic worker or “Kasambahay” refers to
any person engaged in domestic work
within an employment relationship such as
but not limited to the following: general
househelp, nursemaid or “yaya”, cook,
gardener or laundry person but shall
exclude any person who performs domestic
work only occasionally or sporadically and
not on an occupational basis.
Exclusivity of function required
Note that the definition contemplates a
domestic helper who is employed in the
employer’s home to minister exclusively to the
personal comfort and enjoyment of the
employer’s family. [Azucena]
Thus, it has been held that the following
personnel are not domestic employees:
(1) House personnel hired by a ranking
company official but paid by the
company itself to maintain a staff house
provided for the official. [Cadiz v.
Philippine Sinter Corp, NLRC Case No. 7-
1729, cited by Azucena]
(2) A family cook, who is later assigned to
work as a watcher and cleaner of the
employer’s business establishment,
becomes an industrial worker entitled
to receive the wages and benefits
flowing from such status. [Villa v.
Zaragosa and Associates, OP Decision
No. 0183, cited by Azucena]
A.1.f. Persons in Personal Service Of Another
Book 3, Rule 1, Sec. 2 (d), IRR
Domestic servants and persons in the
personal service of another if they perform
such services in the employer’s home which
are usually necessary or desirable for the
maintenance and enjoyment thereof or
minister to the personal comfort
convenience or safety of the employer as
well as the members of his employer’s
household.
A.1.g. Workers Paid by Result
Book 3, Rule 1, Sec. 2 (e), IRR
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LABOR LAW
Workers who are paid by results, including
those who are paid on piece work, “takay,”
“pakiao” or task basis, and other nontime
work if their output rates are in accordance
with the standards prescribed under
Section 8, Rule VII, Book Three of these
regulations, or where such rates have been
fixed by the Secretary of Labor and
Employment in accordance with the
aforesaid Section.
Workers under piece-rate employment have
no fixed salaries and their compensation is
computed on the basis of accomplished tasks.
That their work output might have been
affected by the change in their specific work
assignments does not necessarily imply that
any resulting reduction in pay is tantamount to
constructive dismissal. It is the prerogative of
the management to change their assignments
or to transfer them. [Best Wear Garments v. De
Lemos and Ocubillo (2012)]
workers who are paid by results including those
who are paid on piece-work, takay, pakiao, or
task basis, if their output rates are in
accordance with the standards prescribed
under Sec. 8, Rule VII, Book III, of these
regulations, or where such rates have been fixed
by the Secretary of Labor in accordance with the
aforesaid section, are not entitled to receive
overtime pay.
A.2. HOURS OF WORK
A.2.a. PRINCIPLES IN DETERMINING HOURS
WORKED
Compensable Hours of Work (Art. 84, LC)
Hours worked shall include:
(1) All time during which an employee is
required to be on duty or to be at a
prescribed workplace; AND
(2) All time during which an employee is
suffered or permitted to work.
General principles in determining if time is
considered as hours worked [Book III, Rule 1,
Sec. 4, IRR]
(1) All hours are hours worked which the
employee is required to give his employer,
UP LAW BOC LABOR STANDARDS LABOR LAW

regardless of whether or not such hours (2) Hospitals and clinics with a bed capacity
are spent in productive labor or involve of at least one hundred (100) shall hold
physical or mental exertion. regular office hours for eight (8) hours a
day, for five (5) days a week, exclusive of
(2) An employee need not leave the premises
time for meals, except where the
of the work place in order that his rest
exigencies of the service require that
period shall not be counted, it being
such personnel work for six (6) days or
enough that he stops working, may rest
forty-eight (48) hours, in which case,
completely and may leave his work place
they shall be entitled to an additional
to go elsewhere, whether within or outside
compensation of at least thirty percent
the premises of his work place.
(30%) of their regular wage for work on
(3) If the work performed was necessary, or it the sixth day.
benefited the employer, or the employee
For purposes of this Article, "health
could not abandon his work at the end of
personnel" shall include resident physicians,
his normal working hours because he had
nurses, nutritionists, dietitians, pharmacists,
no replacement, all time spent for such
social workers, laboratory technicians,
work shall be considered as hours worked,
paramedical technicians, psychologists,
if the work was with the knowledge of his
midwives, attendants and all other hospital or
employer or immediate supervisor.
clinic personnel. [Art. 83, LC]
(4) The time during which an employee is
Medical secretaries are also considered clinic
inactive by reason of interruptions in his
personnel. [Azucena]
work beyond his control shall be
considered working time either:
(a) If the imminence of the resumption Rest period – short duration or “coffee break”
of work requires the employee’s
Rest periods of short duration during working
presence at the place of work, or
hours shall be counted as hours worked. [Art.
(b) If the interval is too brief to be 84, par. 2, LC]
utilized effectively and gainfully in
Rest periods or coffee breaks running from five
the employee’s own interest.
(5) to twenty (20) minutes shall be considered
as compensable working time. [Book III, Rule
1, Sec. 7, par. 2, IRR]
A.2.b. NORMAL HOURS OF WORK
General Rule: 8-Hour Labor Law
Book III, Rule 1, Sec. 4 (b), IRR
The normal hours of work of any employee
shall not exceed eight (8) hours a day. [Art. 83, An employee need not leave the premises of
LC] the work place in order that his rest period
shall not be counted it being enough that he
stops working may rest completely and may
Note: Article 83 of the Labor Code only set a leave his work place to go elsewhere
maximum of number of hours as "normal whether within or outside the premises of
hours of work" but did not prohibit work of less his work place.
than eight hours [Legend Hotel v. Realuyo, G.R.
153511 (2012)]
On call

EXCEPTIONS to 8-Hour Law: Work Hours of Compensable work time, if employee is:
Health Personnel (1) Required to remain on call in the
Health personnel in: employer’s premises or so close thereto

(1) Cities and municipalities with a (2) That he cannot use the time effectively
population of at least one million and gainfully for his own purpose shall
(1,000,000) OR be considered as working while on call.

PAGE 61 OF 235
UP LAW BOC LABOR STANDARDS
Book III, Rule 1, Sec. 5(b), IRR
An employee who is not required to leave
word at his home or with company officials
where he may be reached is NOT working
while on call.
Inactive due to work interruptions
The time during which an employee is inactive
by reason of interruptions in his work beyond
his control shall be considered working time
either:
(1) If the imminence of the resumption of
work requires the employee's presence
at the place of work OR
(2) If the interval is too brief to be utilized
effectively and gainfully in the
employee's own interest. [Book III, Rule
1, Sec. 4(d), IRR]
Necessary Work After Normal Hours
If the work performed was necessary, or it
benefited the employer, or the employee could
not abandon his work at the end of his normal
working hours because he had no replacement,
all the time spent for such work shall be
considered as hours worked if the work was
with the knowledge of his employer or
immediate supervisor. [Book III, Rule 1, Sec.
4(c), IRR]
Lectures, meetings, trainings
Attendance at lectures, meetings, training
programs, and other similar activities shall not
be counted as working time if ALL of the
following conditions are met:
(1) Attendance is outside of the employee’s
regular working hours;
(2) Attendance is in fact voluntary; and
(3) The employee does not perform any
productive work during such
attendance. [IRR, Book III, Rule 1, Sec. 6]
Note:
PAGE 62 OF 235
LABOR LAW
(1) Attendance in lectures, meetings, and
training periods sanctioned or required
by the employer are considered hours
worked.
(2) Attendance in CBA negotiations or
grievance meeting is compensable
hours worked.
(3) Attendance in hearings in cases filed by
the employee is NOT compensable
hours worked.
(4) Participation in strikes is NOT
compensable working time.
Idle time
The idle time that an employee may spend for
resting and dining which he may leave the
spot or place of work though not the premises
of his employer, is not counted as working
time only where the work is broken or is not
continuous. [National Development Co. v. CIR
(1962)]
A laborer need not leave the premises of the
factory, shop or boat in order that his period of
rest shall not be counted, it being enough that
he "cease to work", may rest completely and
leave or may leave at his will the spot where he
actually stays while working, to go somewhere
else, whether within or outside the premises of
said factory, shop or boat. If these requisites are
complied with, the period of such rest shall not
be counted. [Luzon Stevedoring Co. v. Luzon
Marine Department Union (1957)]
Travel time [Department of Labor Manual]
(1) Travel from home to work – An employee
who travels from home before his
regular workday and returns to his home
at the end of the workday is engaged in
ordinary home-to-work travel which is
NOT considered hours worked, EXCEPT:
(a) When called to travel during
emergency;
(b) When travel is done through a
conveyance furnished by the
employer;
(c) Travel is done under vexing and
dangerous circumstances;
UP LAW BOC LABOR STANDARDS LABOR LAW

(d) Travel is done under the supervision therefore, whether they are on board and
and control of the employer. cannot leave ship beyond the regular eight
working number of hours, but whether they
(2) Travel that is all in the day’s work – Time
actually rendered service in excess of said
spent by an employee in travel from
number of hours.”
jobsite to jobsite during the workday,
must be counted as hours worked. Where
an employee is required to report at a
Proof of Hours worked
meeting place to receive instructions or
to perform other work there, the travel Entitlement to overtime pay must first be
from the designated place to the established by proof that said overtime work
workplace is part of the day’s work. was actually performed, before an employee
may avail of said benefit. [Lagatic v. NLRC, G.R.
(3) Travel away from home - Travel that
121004 (1998)]
keeps an employee away from home
overnight is travel away from home.
Travel away from home is worktime
Burden of Proof: When an employer alleges
when it cuts across the employee’s
that his employee works less than the normal
workday. The time is hours worked not
hours of employment as provided for in the
only on regular working hours but also
law, he bears the burden of proving his
during the corresponding hours on non-
allegation with clear and satisfactory evidence.
working days.
[Prangan v. NLRC, et. al., G.R. No. 126529,
(1998)]
Semestral Break of Private School Teachers
Regular full-time teachers are entitled to FLEXIBLE WORK ARRANGEMENTS [DOLE
salary during semestral breaks. These Advisory No. 02, Series of 2004]
semestral breaks are in the nature of work
These are alternative arrangements or
interruptions beyond the employees’ control.
schedules other than the standard work hours,
As such, these breaks cannot be considered as
workdays, and workweek. Their effectivity
absences within the meaning of the law for
and implementation shall be temporary in
which deductions may be made from monthly nature.
allowances. [University of the Pangasinan
Faculty Union v. University of Pangasinan Prior to implementation, the employer shall
(1984)] notify the Department through the Regional
Office which has jurisdiction over the
workplace, of the adoption of any of the
flexible work arrangements.
Work Hours of Seamen Under the following work arrangements, the
employers and employees are encouraged to
Citing the 1957 ruling of Luzon Stevedoring Co.,
explore alternative schemes under any
Inc. vs Luzon Marine Department Union, et al
agreement and company policy or practice to
[G.R. 9265(1957)], the SC reiterated in the
cushion and mitigate the effect of the loss of
more recent case of Cagampan, et al. vs NLRC
income of the employees.
[G.R. 85122-24 (March 22, 1991)], that “seamen
are required to stay on board of their vessels
by the very nature of their duties, and it is for
Reduction of Workdays
this reason that, in addition to their regular
compensation, they are given free living The normal workdays per week are reduced
quarters to be on board. It could not have been but this arrangement should not last for more
the purpose of the law to require their than 6 months.
employers to pay them overtime pay even
when they are not actually working. The
correct criterion in determining whether or not Rotation of Workers
sailors are entitled to overtime pay is not,
PAGE 63 OF 235
UP LAW BOC LABOR STANDARDS
The employees are rotated or alternately
provided work within the workweek
Forced Leave
Employees are required to go on leave for
several days or weeks utilizing their leave
credits of there are any.
Broken-time Schedule
The works schedule is not continuous but the
work hours within the day or week remain.
Flexi-holidays
The employees agree to avail the holidays at
some other days provided there is no
diminution of existing benefits as a result of
such arrangement.
A.2.b.i. COMPRESSED WORKWEEK
Compressed Work Week (CWW) [DOLE
Advisory No. 02, Series of 2004]
Under the CWW scheme, the normal workday
goes beyond eight hours without the
corresponding overtime premium.
The total hours of work, however, shall not
exceed 12 hours a day or 48 hours a week, or
the employer is obliged to pay the worker the
overtime premium in excess of said work hours.
Conditions for CWW
(1) 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. This agreement may be
expressed through collective bargaining
or other legitimate workplace
mechanisms of participation such as
labor management councils, employee
assemblies or referenda.
(2) In firms using substances, chemicals
and processes or operating under
conditions where there are airborne
contaminants, human carcinogens or
noise prolonged exposure to which may
pose hazards to employees’ health and
PAGE 64 OF 235
LABOR LAW
safety, there must be a certification from
an accredited health and safety
organization or practitioner from the
firm’s safety committee that work
beyond eight hours is within threshold
limits or tolerable levels of exposure, as
set in the OSHS.
(3) The employer shall notify DOLE,
through the Regional Office having
jurisdiction over the workplace, of the
adoption of the CWW scheme. The
notice shall be in DOLE CWW Report
Form attached to this Advisory. [DOLE
Advisory No. 02-04]
Effects of CWW
(1) Unless there is a more favorable practice
existing in the firm, work beyond eight
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 12 hours a
day or 48 hours a week shall be subject
to overtime premium.
(2) Consistent with Art. 85 of the LC,
employees under a CWW scheme are
entitled to meal periods of not less than
60 minutes. There shall be no
impairment of the right of the
employees to rest days as well as to
holiday pay, rest day pay or leaves in
accordance with law or applicable
collective bargaining agreement or
company practice.
(3) Adoption of the CWW scheme shall in no
case result in diminution of existing
benefits. Reversion to the normal eight-
hour workday shall not constitute a
diminution of benefits.
Rationale
Although the right to overtime pay cannot be
waived as per Cruz v. Yee Sing (1959), D.O. No.
21 sanctions the waiver of overtime pay in
consideration of the benefits that the
employees will derive from the adoption of a
compressed workweek scheme, thus:
The compressed workweek scheme was
originally conceived for establishments
UP LAW BOC LABOR STANDARDS
wishing to save on energy costs, promote
greater work efficiency and lower the rate of
employee absenteeism, among others.
Workers favor the scheme considering that it
would mean savings on the increasing cost of
transportation fares for at least one (1) day a
week; savings on meal and snack expenses;
longer weekends, or an additional 52 off-days
a year, that can be devoted to rest, leisure,
family responsibilities, studies and other
personal matters, and that it will spare them
for at least another day in a week from certain
inconveniences that are the normal incidents
of employment, such as commuting to and
from the workplace, travel time spent,
exposure to dust and motor vehicle fumes,
dressing up for work, etc. Thus, under this
scheme, the generally observed workweek of
six (6) days is shortened to five (5) days but
prolonging the working hours from Monday to
Friday without the employer being obliged for
pay overtime premium compensation for work
performed in excess of eight (8) hours on
weekdays, in exchange for the benefits above
cited that will accrue to the employees. [Bisig
Manggagawa sa Tryco v. NLRC, et al. (2008)]
A.2.b.ii. POWER
INTERRUPTIONS/BROWNOUTS
Work interruption due to brownouts
Brownouts of short duration, but not exceeding
20 minutes, shall be treated as hours worked,
whether used productively by the employees
or not.
If they last more than 20 minutes, the time may
not be treated as hours worked if:
a) the employees can leave their workplace
or go elsewhere whether within or
without the work premises;
OR
b) the employees can use the time
effectively for their own interest.
In this case, the employer may extend the
working hours beyond the regular schedule on
that day to compensate for the loss of
productive man-hours without being liable for
overtime pay. [Policy Instruction No. 36, May
22, 1978]
PAGE 65 OF 235
LABOR LAW
Note: The time during which an employee is
inactive by reason of work interruptions
beyond his control is considered working time,
either if the imminence of the resumption of
work requires the employee’s presence at the
place of work or if the interval is too brief to be
utilized effectively and gainfully in the
employee’s own interest. [Book III, Rule 1 Sec.
4 (d), IRR]
A.2.c. MEAL BREAK
General Rule: Subject to such regulations as
the Secretary of Labor may prescribe, it shall
be the duty of every employer to give his
employees not less than sixty (60) minutes
time-off for their regular meals (Art. 85, LC)
Exceptions:
Employees may be given a meal period of not
less than twenty (20) minutes provided that
such shorter meal period is credited as
compensable hours worked of the employee:
(1) Where the work is non-manual work in
nature or does not involve strenuous
physical exertion;
(2) Where the establishment regularly
operates not less than sixteen (16) hours
a day;
(3) In case of actual or impending
emergencies or there is urgent work to
be performed on machineries,
equipment or installations to avoid
serious loss which the employer would
otherwise suffer;
OR
(4) Where the work is necessary to prevent
serious loss of perishable goods [Book 3,
Rule 1, Sec. 7 par 1, IRR]
Employees are not prohibited from going out
of the premises as long as they return to their
posts on time. Nowhere in the law may it be
inferred that employees must take their meals
within the company premises. [Philippine
Airlines v. NLRC (1999)]
SYNTHESIS OF THE RULES
UP LAW BOC LABOR STANDARDS
General Rule: Meal periods are NOT
compensable.
Exception:
It becomes compensable:
(1) Where the lunch period or meal time is
predominantly spent for the employer’s
benefit. [Azucena citing 31 Am. Jur. 881;
Duka, Labor Laws and Social Legislation]
(2) Meal periods of 1 hour are deemed
compensable when the employee is on
continuous shift. [National Development
Co. v. CIR, G.R. No. L-15422, (1962)]
(3) Shortened meal period of less than 1
hour (say, 30 minutes) must be
compensable. (Sec. 7, Rule I, Book III,
IRR)
Note: To shorten meal time to less than 20
minutes is not allowed. If the so-called meal
time is less than 20 minutes, it becomes only
a REST PERIOD and is considered working
time.
Exception to the Exception: Shortened meal
breaks upon the employees’ request – NOT
compensable.
The employees themselves may request that
the meal period be shortened so that they can
leave work earlier than the previously
established schedule. [Drilon: Letter to Kodak
Philippines, Nov. 27, 1989; also Cilindro: BWC-
WHSD Opinion No. 197, s. 1998]
Conditions for shortened meal breaks upon
employee’s request.
(1) The employees voluntarily agree in
writing to a shortened meal period of 30
minutes and are willing to waive the
overtime pay for such shortened meal
period;
(2) There will be no diminution whatsoever
in the salary and other fringe benefits of
the employees existing before the
effectivity of the shortened meal period;
(3) The work of the employees does not
involve strenuous physical exertion and
PAGE 66 OF 235
LABOR LAW
they are provided with adequate “coffee
breaks” in the morning and afternoon.
(4) The value of the benefits derived by the
employees from the proposed work
arrangement is equal to or
commensurate with the compensation
due them for the shortened meal period
as well as the overtime pay for 30
minutes as determined by the
employees concerned;
(5) The overtime pay of the employees will
become due and demandable if ever
they are permitted or made beyond
4:30pm; and
(6) The effectivity of the proposed working
time arrangement shall be of temporary
duration as determined by the Secretary
of Labor.
A.3.d. WAITING TIME
Book III, Rule I Sec. 5(a), IRR
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.
Book 3, Rule 1, Sec. 5(b), IRR
An employee who is required to remain on
call in the employer’s premises or so close
thereto that he cannot use the time
effectively and gainfully for his own purpose
shall be considered as working while on
call.
Legal test: Whether waiting time constitutes
working time depends upon the
circumstances of each particular case. The
facts may show that the employer was
engaged or was waiting to be engaged. The
controlling factor is whether waiting time
spent in idleness is so spent predominantly for
the employer’s benefit or for the employee’s.
[Azucena, citing Armour v. Wantock]
A.3.e. OVERTIME
UP LAW BOC LABOR STANDARDS
Overtime compensation is additional pay for
service or work rendered or performed in
excess of eight hours a day by employees or
laborers covered by the Eight-hour Labor Law.
[National Shipyard and Steel Corp. v. CIR (1961)]
Rationale
There can be no other reason than that he is
made to work longer than what is
commensurate with his agreed compensation
for the statutorily fixed or voluntary agreed
hours of labor he is supposed to do. [PNB v.
PEMA (1982)]
Overtime on ordinary working day
Art. 87, LC. Work may be performed beyond
eight (8) hours a day provided that the
employee is paid for the overtime work, an
additional compensation equivalent to his
regular wage plus at least twenty five percent
(25%) thereof.
Overtime work on holiday or rest day
Art. 87, LC. Work performed beyond eight
hours on a holiday or rest day shall be paid
an additional compensation equivalent to
the rate of the first eight hours on a holiday
or rest day plus at least thirty percent (30%)
thereof.
Computation of additional compensation
Art. 90, LC. For purposes of computing
overtime and other additional
remuneration as required by this Chapter
the "regular wage" of an employee shall
include the cash wage only without
deduction on account of facilities provided
by the employer.
Base of Computation: Regular wage – means
regular base pay; it excludes money received in
different concepts such as Christmas bonus
and other fringe benefits. [Bisig ng
Manggagawa ng Philippine Refining Co. v.
Philippine Refining Co , G.R. L-27761 (1981)]
BUT when the overtime work was performed
on the employee’s rest day or on special days
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LABOR LAW
or regular holidays (Art. 93 and 94), the
premium pay, must be included in the
computation of the overtime pay.
[See: p. 19 of Handbook on Workers’
Statutory Monetary Benefits, issued by the
Bureau of Working Conditions, 2006]
Emergency overtime [Art. 89, LC]
Any employee may be required by the
employer to perform overtime work in any of
the following cases:
(1) When the country is at war or when any
other national or local emergency has
been declared by the National Assembly
or the Chief Executive;
(2) When it is necessary to prevent loss of
life or property or in case of imminent
danger to public safety due to an actual
or impending emergency in the locality
caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic, or other
disaster or calamity;
(3) When there is urgent work to be
performed on machines, installations, or
equipment, in order to avoid serious loss
or damage to the employer or some
other cause of similar nature;
(4) When the work is necessary to prevent
loss or damage to perishable goods; and
(5) Where the completion or continuation of
the work started before the eighth hour
is necessary to prevent serious
obstruction or prejudice to the business
or operations of the employer.
Overtime pay does not preclude night
differential pay
When the tour of duty of a laborer falls at
nighttime [between 10:00pm and 6:00am],
the receipt of overtime pay will not preclude
the right to night differential pay. The latter is
payment for work done during the night while
the other is payment for the excess of the
regular eight-hour work. [Naric v. Naric
Workers Union (1959)]
SYNTHESIS OF RULES
UP LAW BOC LABOR STANDARDS
(1) An employer cannot compel an employee
to work overtime
Exception: Emergency overtime work as
provided for in Art. 89
(2) Additional compensation is demandable
only if the employer had knowledge and
consented to the overtime work rendered
by the employee.
Exception: Express approval by a superior
NOT a requisite to make overtime
compensable:
(a) If the work performed is necessary,
or that it benefited the company; or
(b) That the employee could not
abandon his work at the end of his
eight-hour work because there was
no substitute ready to take his place.
[Manila Railroad Co. v. CIR, G.R. L-
4614 (1952)]
Note: However, the Court has also ruled
that a claim for overtime pay is NOT
justified in the absence of a written
authority to render overtime after office
hours during Sundays and holidays.
[Global Incorporated v. Atienza, G.R. L-
51612-13 (1986)]
(3) Compensation for work rendered in
excess of the 8 normal working hours in
a day.
(a) For ordinary days, additional 25% of
the basic hourly rate.
(b) For rest day/special day/holiday,
additional 30% of the basic hourly
rate.
(4) A given day is considered an ordinary
day, unless it is a rest day.
(5) Undertime does NOT offset overtime.
Undertime work on any particular day
shall not be offset by overtime work on
any other day. Permission given to the
employee to go on leave on some other
day of the week shall NOT exempt the
employer from paying the additional
compensation required in this Chapter.
[Art. 88, LC]
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LABOR LAW
No Waiver of Overtime Pay
The right to overtime pay cannot be waived.
The Labor Code (Art. 87) requires that an
employee be paid all overtime compensation
notwithstanding any agreement to work for a
lesser wage. Consequently, such an
agreement or "waiver" will not prevent an
employee from recovering the difference
between the wages paid the employee and the
overtime compensation he or she is entitled to
receive. [Cruz v. Yee Sing, G.R. L-12046 (1959)]
Exception: When the waiver of overtime pay is
in consideration of benefits and privileges
which may be more than what will accrue to
them in overtime pay, the waiver MAY be
permitted. [Meralco Workers Union v.
MERALCO, G.R. L-11876 (1959)]
Composite or Package Pay NOT per se illegal
Composite or “package pay” or “all-inclusive
salary” is an arrangement where the
employee’s salary includes the overtime pay.
In other words, the overtime pay is “built-in”.
Two conditions for validity of such
arrangement:
(1) There is a clear written agreement
knowingly and freely entered by the
employee; and
(2) The mathematical result shows that the
agreed legal wage rate and the overtime
pay, computed separately, are equal to
or higher than the separate amounts
legally due. [Damasco v. NLRC, G.R.
115755 (2000)]
A.2.f. NIGHT SHIFT DIFFERENTIAL
Night shift differential [Art. 86, LC]
The additional compensation of 10% of an
employee’s regular wage for each hour of work
performed between 10pm and 6am.
Illustration: If an employee has a regular wage
of P100 for each hour of work performed
between 10PM and 6AM, he/she shall be paid
P110 per hour worked during such time
interval.
UP LAW BOC LABOR STANDARDS
Coverage [Book 3, Rule 2, Sec. 1, IRR]
All employees, except:
(1) Those of the government and any of its
political subdivisions, including
government-owned and/or controlled
corporations;
(2) Those of retail and service
establishments regularly employing not
more than five (5) workers;
(3) Domestic helpers and persons in the
personal service of another;
(4) Managerial employees as defined in
Book Three of this Code;
(5) Field personnel and other employees
whose time and performance is
unsupervised by the employer including
those who are engaged on task or
contract basis, purely commission basis,
or those who are paid a fixed amount for
performing work irrespective of the time
consumed in the performance thereof.
Rest days (night-off)
Night shift employees are entitled to a weekly
night-off (usually Saturday evening) or a
weekly rest period of 24 hours beginning at
the start of the night shift.
Work on special days
Night shift employees are also entitled to the
premium pay on special days and holidays.
These days are reckoned as calendar days
which start at midnight and end at the
following midnight. The premium pay for the
night shift also starts or ends at midnight.
However, the employment contract, company
policy or CBA may provide that in the case of
night shift workers, days—including special
days and regular holidays—shall begin on the
night before a calendar day.
A.2.g. REST PERIODS
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
PAGE 69 OF 235
LABOR LAW
six (6) consecutive normal work days. [Art. 91
(a)]
Preference of the employee
The employer shall determine and schedule
the weekly rest day of his employees subject to
collective bargaining agreement and to such
rules and regulations as the Secretary of Labor
and Employment 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.
[Art. 94 (b)]
COMPULSORY WORK ON REST DAY
The employer may require his employees to
work on any day:
(1) In case of actual or impending
emergencies caused by serious
accident, fire, flood, typhoon,
earthquake, epidemic or other disaster
or calamity to prevent loss of life and
property, or imminent danger to public
safety;
(2) In cases of urgent work to be performed
on the machinery, equipment, or
installation, to avoid serious loss which
the employer would otherwise suffer;
(3) In the event of abnormal pressure of
work due to special circumstances,
where the employer cannot ordinarily be
expected to resort to other measures;
(4) To prevent loss or damage to perishable
goods;
(5) Where the nature of the work requires
continuous operations and the stoppage
of work may result in irreparable injury
or loss to the employer; and
(6) Under other circumstances analogous
or similar to the foregoing as
determined by the Secretary of Labor
and Employment. [Art. 92, LC]
Synthesis of the Rules
(1) Rest day of not less than 24 consecutive
hours after 6 consecutive days of work.
(2) No work, no pay principle applies
UP LAW BOC LABOR STANDARDS LABOR LAW

(3) If an employee works on his designated business of the ER and whose actual
rest day, he is entitled to a premium pay. hours of work in the filed cannot be
determined with reasonable certainty.
(4) Premium pay is additional 30% of the
basic pay.
(5) Employer selects the rest day of his Premium pay rates [DOLE Memorandum
employees Circular 1, Series of 2004]
(6) However, employer must consider the When Work Performed Premium Pay
religious reasons for the choice of a rest
day. On scheduled rest day 30% of regular
wage

When the choice of the employee as to his rest On Sunday ONLY IF this 30% of regular
day based on religious grounds will inevitably is the ESTABLISHED rest wage
result in serious prejudice or obstruction to the day
operations and the employer cannot normally
be expected to resort to other measures, the On Sunday and holidays, 30% of regular
employer may so schedule the weekly rest day when no regular work wage
of his choice for at least two days in a month and rest days

On any special 30% of regular

PREMIUM PAY
Premium pay refers to the additional
compensation for work performed within 8
hours on non-work days, such as rest days and
special days.
Coverage [Book 3, Rule 3, Sec. 7, IRR]
General Rule: All employees
Exceptions:
(1) Those of the government and any of the
political subdivision, including
government-owned and controlled
corporations;
(2) Managerial employees as defined in
Book III;
(3) Househelpers and persons in the
personal service of another;
(4) Workers who are paid by results,
including those who are paid on piece
rate, takay, pakyaw, or task basis, and
other noontime work, if their output
rates are in accordance with the
standards prescribed in the regulations,
or where such rates have been fixed by
the Secretary of Labor and Employment;
(5) Field personnel, if they regularly
perform their duties away from the
principal or branch office or place of
PAGE 70 OF 235
holiday/special day wage
On any special holiday 50% of regular
/special day falling on wage
scheduled rest day
On a regular holiday 230% of regular
falling on a rest day wage
Work on a Sunday or holiday which is also a
scheduled rest day
Sec. 2 Rule III, Book III, IRR
Business on Sundays/Holidays- All
establishments and enterprises may operate
or open for business on Sundays and holidays
provided that the employees are given the
weekly rest day and the benefits as provided in
this Rule.
Sec. 7(a)(b), Rule III, Book III, IRR
Compensation on rest day/Sunday/holiday. –
(a) Except those employees referred to under
Section 2, Rule I, Book III, an employee who is
made or permitted to work on his scheduled
rest day shall be paid with an additional
compensation of at least 30% of his regular
wage. An employee shall be entitled to such
additional compensation for work performed
UP LAW BOC LABOR STANDARDS
on a Sunday only when it is his established rest
day.
(b) Where the nature of the work of the
employee is such that he has no regular work
days and no regular rest days can be
scheduled, he shall be paid an additional
compensation of at least 30% of his regular
wage for work performed on Sundays and
holidays.
CBA on higher premium pay/ Rate
Adjustments
Where the collective bargaining agreement or
other applicable employment contract
stipulates the payment of a higher premium
pay than that prescribed under this Article, the
employer shall pay such higher rate. [Art. 93
(d), LC.] The employer and his employees or
their representatives are not prevented from
entering into any agreement with terms more
favorable to the employees. [Book III, Rule II,
Sec. 9, IRR.]
The laws and regulations should not be used
to diminish any benefit granted to the
employees under existing laws agreements
and voluntary employer practices. [Ibid]
Nothing in this rule shall justify an employer in
reducing the compensation of his employees
for the unworked Sundays, holidays, or other
rest days which are considered paid off days or
holidays by agreement or practice subsisting
upon the effectivity of the Code. [Book III, Rule
III, Sec. 8, IRR].
A.2.h. HOLIDAY PAY, 13TH MONTH PAY
I. Holiday Pay
Holiday pay is a one-day pay given by law to an
employee even if he does not work on a regular
holiday. This gift of a day’s pay is limited to
each of the 12 regular holidays.
Note: Art. 94 (c), LC was superseded by E.O.
203, which was subsequently amended by RA
9177, 9256, 9492, and Proclamation No. 459.
The current state of the law is discussed below.
Coverage
PAGE 71 OF 235
LABOR LAW
General Rule: All employees
Exceptions:
(1) Those of the government and any of the
political subdivision, including
government-owned and controlled
corporation;
(2) Those of retail and service
establishments regularly employing
less than 10 workers;
(3) Domestic helpers and persons in the
personal service of another;
(4) Managerial employees and officers or
members of the managerial staff as
defined in Book III
(5) Field personnel and other employees
whose time and performance is
unsupervised by the employer including
those who are engaged on task or
contract basis, purely commission basis,
or those who are paid a fixed amount for
performing work irrespective of the time
consumed in the performance thereof.
[Sec. 1, Rule IV of the IRR]
Retail Establishment is one principally
engaged in the sale of goods to end-users for
personal or household use;
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. [RA 6727/The Wage
Rationalization Act, IRR]
Regular holidays
Proclamation No. 50 signed by President
Duterte on August 16, 2016, provides for the
observance of the regular holidays and special
(non-working) days for the year 2017 on the
following dates:
(1) New year’s Day – Jan. 1
(2) Araw ng Kagitingan – Apr. 9
(3) Maundy Thursday – Apr. 13
(4) Good Friday – Apr. 14
(5) Labor Day – May 1
(6) Independence Day – June 12
UP LAW BOC LABOR STANDARDS LABOR LAW

(7) National Heroes Day – Aug. 28

(8) Bonifacio Day – Nov. 30 Note: Id-ul-Fitr (Eid’l Fitr) and Id-ul-Adha
(Eid’l Adha) have been added to the list of
(9) Christmas Day – Dec. 25
national legal holidays.
(10) Rizal Day – Dec. 30

Note: There should be no distinction between

Special (Non-Working Days) Muslims & non-Muslims as regards to the
payment of benefits for Muslim holidays.
(1) Jan. 2 (based on Proclamation No. 117)
Wages & other emoluments granted bylaw to
(2) Chinese New Year – Jan. 28 the workingman are determined on the basis
(3) EDSA Revolution Anniv – Feb. 25 of the criteria laid down by laws & not on
worker’s faith. Art. 3(3), PD 1083 states that
(4) Black Saturday – Apr. 15 nothing herein shall be construed to operate
(5) Ninoy Aquino Day – Aug. 21 to the prejudice of a non-Muslim. [San Miguel
Corp vs. CA (2002)]
(6) All Saints Day – Nov. 1
(7) Dec. 31 (last day of the year)
Holiday pay computation (Art. 94 Labor Code,
Book III, Rule IV of IRR, RA 9424 and DOLE
The dates for Eid’l Fitr and Eid’l Adha (special Memorandum Circular 1 Series of 2004)
holidays) shall follow after approximate dates
of the Islamic holidays have been determined.
General Rule: An employer may require an
employee to work on any holiday but such
P.D. 1083 (Code of Muslim Personal Laws) employee shall be paid a compensation
equivalent to twice his regular rate. [Art. 94(b)]
SEE: Arts. 169-173
Specifically for the Muslim Areas, P.D. 1083, in
its Book V, Title, recognizes five (5) Muslim According to the LC, IRR and Memo:
Holidays, namely: Work on any regular
(1) Amun Jadid (New Year) which falls on holiday, not exceeding 8 Computation
the first (1st) day of the lunar month of hours
Muharram;
Work on any regular 200% of regular
(2) Mauli-un-Nabi (Birthday of the Prophet holiday, if it exceeds 8 daily wage (for
Muhammad) which falls on the twelfth hours/overtime the 1st 8 hours)
(12th) day of the third (3rd) lunar month
of Rabi-ul-Awwal; + 30% of hourly
rate on said day
(3) Lailatul Isra Wal Mi Rai (Nocturnal
Journey and Ascencion of the Prophet Work on any regular 200% of regular
Muhammand) which falls on the twenty- holiday which falls on the daily wage + 30%
seventh (27th) day of the seventh (7th) scheduled rest day, not of such amount
lunar month of Rajab; exceeding 8 hours
(4) Id-ul-Fitr (Hari Raja Pausa) which falls Work on any regular Regular holiday-
on the first (1st) day of the tenth (10th) holiday which falls on on-rest day rate
lunar month of Shawwal scheduled rest day, if it (200% of regular
commemorating the end of the fasting exceeds 8 daily wage plus
season; and hours/overtime 30% of such
(5) Id-ul-Adha (Hari Raha Haji) which falls amount) + 30% of
on the tenth (10th) day of the twelfth hourly rate on
(12th) lunar month of Dhu’l-Hijja. said day.
PAGE 72 OF 235
UP LAW BOC LABOR STANDARDS
Work on special holiday Regular daily
not exceeding 8 hours wage + 30%
thereof
Work on special holiday Regular daily
wage + 50%
thereof
According to DOLE Memo Circular 1-04, a
“special holiday”/”special day” includes the
National Special Days, and declared special
days such as Special Non-working Holiday,
Special Public Holiday and Special National
Holiday. Such days are entitled to the rates
prescribed above. These days are not the same
as a special working holiday.
A special working holiday is considered an
ordinary working day, so there is no premium
pay.
Double holiday pay
According to “DOLE Explanatory Bulletin on
Worker’s Entitlement to Holiday Pay on 9 April
1993,” if two holidays fall on the same day:
(1) If unworked, 200% of basic wage.
(2) If worked, 300% of basic wage.
[Azucena]
Double Holiday Rule for Monthly-paid
employees
For covered employees whose monthly
salaries are computed based on 365 days and
for those other employees who are paid using
factor 314, or 262, or any other factor which
already considers the payment for the 11
regular holidays, NO additional payment is
due them. [BWC-WHSD Opinion No. 053, s.
1998]
Successive holiday pay
According to IRR, Rule IV, Sec. 10, an
employee is entitled to holiday pay for both
days, IF:
(1) He is present on day immediately
preceding first holiday; or
PAGE 73 OF 235
LABOR LAW
(2) He works on first holiday, which entitles
him to pay on second holiday.
Divisors
The divisor assumes an important role in
determining whether or not holiday pay is
already computed.
(1) Monthly paid employees are not entitled
to the holiday pay if their total annual
income is divided by 365 days resulting
in a wage which is beyond the minimum
wage per day because they are
considered paid everyday of the year
including holidays, rest days, and other
non-working days. The 365 days are as
follows:
(a) 296 days – ordinary days
(b) 52 days – rest days
(c) 10 days – regular holidays
(d) 7 days – special holidays
Note: For 2017, there are 10 regular
holidays and 9 special holidays. (See
previous enumeration of holidays )
(2) As a general rule, for a company with a
6-day working schedule, the divisor 313
already means that the legal holidays
are included in the monthly pay of the
employee. The divisor is arrived at by
subtracting all Sundays from the total
number of calendar days in a year.
(3) As a general rule for a company with a
5-day working schedule, the divisor 287
means that the holiday pay is already
included in the monthly salary of the
employee.
Where the employer had a standing practice of
using 286 days as a divisor and following the
correct computation and taking into account
that one of the holidays always falls on a
Sunday, therefore increasing the divisor to
“287”, but increase would in some instances
prejudice the employees, in violation of the
proscription against non-diminution of
benefits under Sec. 100 of the labor code, the
“287” divisor should only be used for
computations which would be advantageous
to the employer (i.e. deduction for absences)
and not for computations which would
diminish the existing benefits of the
UP LAW BOC LABOR STANDARDS
employees (i.e., overtime pay, holiday pay and
leave conversions).[Trans Asia Phils. v. NLRC
(1999)]
Sundays
(See “Work on a Sunday or holiday which is also
a scheduled rest day”) onp.
(1) When a holiday falls on a Sunday, the
following Monday will not be considered a
holiday unless a proclamation says so.
(2) Furthermore as stated in the Wellington
case (see below), a legal holiday falling on
a Sunday does not create a legal
obligation to pay extra, aside from the
usual holiday pay, to monthly-paid
employees. [Azucena citing Letter of
Instruction No. 1087]
No provision of law requires any employer to
make adjustments in the monthly salary rate
set by him to take account of legal holidays
falling on Sundays in a given year, otherwise
to reckon a year at more than 365 days.
[Wellington Investment and Manufacturing
Corporation vs. Trajano (1995)]
Non-working/scheduled rest day
Where the day immediately preceding the
holiday is a non-working day in the
establishment or the scheduled rest day of the
employee, he shall not be deemed to be on
leave of absence on that day, in which case he
shall be entitled to the holiday pay if he
worked on the day immediately preceding the
non-working day or rest day. [Book III, Rule IV,
Sec 6 (c), IRR]
Example:
If a holiday falls on Monday, and Sunday is a
non-working day in the establishment or is the
scheduled rest day of the employee, the
employee shall be entitled to holiday pay if he
worked on Saturday (which is the day
immediately preceding Sunday, the non-
working day or rest day).
Right to holiday pay in case of absences
PAGE 74 OF 235
LABOR LAW
All covered employees shall be entitled to the
benefit provided herein when they are on leave
of absence with pay.
Employees who are on leave of absence
without pay on the day immediately preceding
a regular holiday may not be paid the required
holiday pay if he has not worked on such
regular holiday. [Book III, Rule IV, Sec 6(a),
IRR]
Note:
(1) If an employee is on leave of absence
with pay on the day immediately
preceding a regular holiday, he is
entitled to holiday pay.
(2) If an employee is on leave of absence
without pay on the day immediately
preceding a regular holiday, he is not
entitled to holiday pay unless he works
on such regular holiday.
In case of temporary cessation of work
(1) In cases of temporary or periodic
shutdown and temporary cessation of
work of an establishment, as when a
yearly inventory or when the repair or
cleaning of machineries and equipment
is undertaken, the regular holidays
falling within the periods shall be
compensated in accordance with this
Rule.
(2) The regular holiday during the cessation
of operation of an enterprise due to
business reverses as authorized by the
Secretary of Labor may not be paid by
the employer. [Book III, Rule IV, Sec 7,
IRR]
An employee is entitled to holiday pay for the
regular holidays falling within the period in
cases of temporary shutdowns or cessation of
work, when:
(1) An annual inventory; or
(2) Repair or cleaning of machineries and
equipment is undertaken.
The employer may not pay his employees for
the regular holidays during the suspension of
work if: the cessation of operation is due to
UP LAW BOC LABOR STANDARDS
business reverses, and is authorized by the
Secretary of Labor.
Teachers, Piece Workers, Seafarers, Seasonal
Workers, Etc.
(1) Private school teachers, including
faculty members of colleges and
universities, may not be paid for the
regular holidays during semestral
vacations. They shall, however, be paid
for the regular holidays during
Christmas vacation;
(2) Where a covered employee, is paid by
results or output, such as payment on
piece work, his holiday pay shall not be
less than his average daily earnings for
the last seven (7) actual working days
preceding the regular holiday; Provided,
However, that in no case shall the
holiday pay be less than the applicable
statutory minimum wage rate.
(3) Seasonal workers may not be paid the
required holiday pay during off-season
when they are not at work
(4) Workers who have no regular working
days shall be entitled to the benefits
provided in this Rule. [Book III, Rule IV,
Sec. 8, IRR]
Holiday Pay of Hourly-Paid Faculty Members
Not Entitled: Regular Holiday Pay
Entitled: Regular hourly rate on days declared
as special holidays or 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; in
case of extensions said faculty members shall
likewise be paid their hourly rates should they
teach during said extensions.
(1) They are not entitled to payment of
holiday pay because they are paid only
for work actually done. Since regular
holidays are known to both the school
and faculty members as “no class day”;
PAGE 75 OF 235
LABOR LAW
certainly the latter do not expect
payment for said unworked holidays.
(2) They are entitled to their hourly rate on
days declared as special holidays. When
a special public holiday is declared, the
faculty member paid by the hour is
deprived of expected income, and it
does not matter that the school
calendar is extended in view of the days
or hours lost, for their income that could
be earned from other sources is lost
during the extended days.
(3) Similarly, when classes are called off or
shortened on account of typhoons,
floods, rallies, and the like, these faculty
members must likewise be paid,
whether or not extensions are ordered.
[Jose Rizal College v. NLRC, (1987)]
Piece workers
Philosophy underlying the exclusion of piece
workers from the 8-hour law is that said
workers are paid depending upon the work
they do irrespective of the amount of time
employed in doing said work. [Red v. Coconut
Products Ltd., v. CIR (1966)]
Seafarers
Any hours of work or duty including hours of
watch-keeping performed by the seafarer on
designated rest days and holidays shall be
paid rest day or holiday pay. (Section 11.C,
Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board
Ocean-Going Vessels)
Seasonal workers
Seasonal workers who do not work during off-
season are not entitled to pay for the regular
holidays occurring during their off-season.
Workers assigned to “skeleton crews” that
work during the off-season have the right to be
 UP LAW BOC LABOR STANDARDS LABOR LAW

paid on regular holidays falling in that

duration.
ILLUSTRATIONS
Minimum Wage (for 8 hours of Work)  P800
Hourly Wage  P100
Hours of OT  4 hours

I. OT ON A REGULAR DAY (OTRD)

Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime
work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%)
thereof [Art 87]

𝑂𝑇𝑅𝐷 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑊𝑎𝑔𝑒 × 1.25 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑅𝐷 = 100 × 1.25 × 4
𝑂𝑇𝑅𝐷 = 500

II. WORK ON SCHEDULED REST DAY (WRD)

Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation
equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%)
thereof [Art 87]

𝑊𝑅𝐷 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 1.3

𝑊𝑅𝐷 = 800 × 1.3
𝑊𝑅𝐷 = 1,040

III. OT ON SCHEDULED REST DAY (OTSRD)

Art 93(a), LC: Where an employee is made or permitted to work on his scheduled rest day, he shall be paid
an additional compensation of at least thirty percent (30%) of his regular wage. An employee shall be
entitled to such additional compensation for work performed on Sunday only when it is his established rest
day.

𝑂𝑇𝑆𝑅𝐷 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑊𝑎𝑔𝑒 × 1.69 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑆𝑅𝐷 = 100 × 1.69 × 4
𝑂𝑇𝑆𝑅𝐷 = 676
Notes:
a. 1.69 was derived by adding 39% (which is 30% of 1.3 or 1.3x0.3) to 130%
b. The worker’s total take-home pay for the day is P1,716 (P676+P1,040)

IV. WORK ON SPECIAL HOLIDAY (WSH)

Work performed on any special holiday shall be paid an additional compensation of at least thirty percent
(30%) of the regular wage of the employee. [Art 93(c)]

PAGE 76 OF 235
 UP LAW BOC LABOR STANDARDS LABOR LAW

𝑊𝑆𝐻 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 1.3

𝑊𝑆𝐻 = 800 × 1.3
𝑊𝑆𝐻 = 1,040

V. WORK ON SPECIAL HOLIDAY WHICH FALLS ON A REST DAY (WSHRD)

Where such holiday work falls on the employee’s scheduled rest day, he shall be entitled to an additional
compensation of at least fifty per cent (50%) of his regular wage.

𝑊𝑆𝐻𝑅𝐷 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 1.5

𝑊𝑆𝐻𝑅𝐷 = 800 × 1.5
𝑊𝑆𝐻𝑅𝐷 = 1,200

VI. OT DURING WORK ON SPECIAL HOLIDAY WHICH FALLS ON A REST DAY (OTWSHRD)

𝑂𝑇𝑊𝑆𝐻𝑅𝐷 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑊𝑎𝑔𝑒 × 1.95 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑊𝑆𝐻𝑅𝐷 = 100 × 1.95 × 4
𝑂𝑇𝑊𝑆𝐻𝑅𝐷 = 780

Notes:
a. 1.95 was derived by adding 45% (which is 30% of 1.5 or 1.5x0.3) to 150%
b. The worker’s total take-home pay for the day is P1,980 (P780+P1,200)

VII. WORK ON A REGULAR HOLIDAY (WRH)

The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate [Art 94(b)]
𝑊𝑅𝐻 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 2
𝑊𝑅𝐻 = 800 × 2
𝑊𝑅𝐻 = 1,600

VIII. OT ON A REGULAR HOLIDAY (OTRH)

Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation
equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%)
thereof [Art 87]

𝑂𝑇𝑅𝐻 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑊𝑎𝑔𝑒 × 2.6 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑅𝐻 = 100 × 2.6 × 4
𝑂𝑇𝑅𝐻 = 1,040

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 UP LAW BOC LABOR STANDARDS LABOR LAW

Notes:
a. 2.6 was derived by adding 60% (which is 30% of 2 or 2x0.3) to 200%
b. The worker’s total take-home pay for the day is P2,640 (P1,600+P1,040)

IX. WORK ON REGULAR HOLIDAY WHICH FALLS ON A REST DAY (WRHRD)

If the holiday work falls on the scheduled rest day of the employee, he shall be entitled to an additional
premium pay of at least 30% of his regular wage holiday rate of 200% based on his regular wage rate [2nd
sentence, Sec. 4, Rule IV, Book III, IRR].

𝑊𝑅𝐻𝑅𝐷 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 2.6

𝑊𝑅𝐻𝑅𝐷 = 800 × 2.6
𝑊𝑅𝐻𝐷 = 2,080
Notes:
a. 2.6 was derived by adding 60% (which is 30% of 2 or 2x0.3) to 200%

X. OT ON REGULAR HOLIDAY WHICH FALLS ON A REST DAY (OTWRHRD)

Where the regular holiday work exceeding 8 hours falls on the scheduled rest day of the employee, he shall
be paid an additional compensation for the overtime work equivalent to his regular holiday-rest day for the
first 8 hours plus 30% thereof. The regular holiday rest day rate of an employee shall consist of 200% of
his regular daily wage rate + 30% thereof [par. 2, Sec. 5, Rule IV, Book III, IRR].

𝑂𝑇𝑊𝑅𝐻𝑅𝐷 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑅𝑎𝑡𝑒 × 3.38 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑊𝑅𝐻𝑅𝐷 = 100 × 3.38 × 4
𝑂𝑇𝑊𝑅𝐻𝑅𝐷 = 1,352
Notes:
a. 3.38 was derived by adding 78% (which is 30% of 2.6 or 2.6x0.3) to 200%
b. The worker’s total take-home pay for the day is P3,432 (P2,080+P1,352)

PAGE 54 OF 235
UP LAW BOC LABOR STANDARDS
13th Month Pay
[PD 851 (The 13th-Month Pay Law) and the
Revised Guidelines on the Implementation of
the 13th Month Pay Law]
Rationale
• To further protect the level of real wages
from the ravage of world-wide inflation;
• There had been no increase in the legal
minimum wage rates since 1970;
• The Christmas season is an opportune
time for society to show its concern for
the plight of the working masses so they
may properly celebrate Christmas and
New Year.
Coverage
General Rule: ALL EMPLOYERS are hereby
required to pay all their rank and file
employees a 13th month pay not later than
Dec 24 of every year, Provided that they have
worked for at least one (1) month during a
calendar year.
Exempted Employers:
(1) Government, its political subdivisions,
including GOCCs except those operating
essentially as private subsidiaries of the
Government;
(2) Employers already paying their
employees a 13th month pay or more in a
calendar year or its equivalent at the
time of this issuance; and
(3) Employers of those who are paid on
purely commission, boundary or task
basis and those who are paid a fixed
amount for performing specific work,
irrespective of the time consumed in the
performance thereof (except those
workers who are paid on piece-rate basis,
in which case their employer shall grant
them 13th month pay).
Notes:
PAGE 55 OF 235
LABOR LAW
“Equivalent” includes:
(1) Christmas bonus, mid-year bonus, cash
bonuses
(2) and other payments amounting to not
less than 1/12 of the basic salary
(3) but shall NOT INCLUDE cash and stock
dividends, cost of living allowances and
all other allowances regularly enjoyed
by the employee as well a non-monetary
benefits.
Workers paid on a piece-rate basis - 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.
Minimum Amount
1/12 of the total basic salary earned by an
employee within a calendar year
BASE AMOUNT,
General Rule: basic salary shall include:
(1) Cost of living allowances (COLA)
integrated into the basic salary of a
covered employee pursuant to EO 178.
(2) All remunerations or earnings paid by
this employer for services rendered.
(3) But not the allowances and monetary
benefits which are not considered or
integrated as part of the regular or basic
salary, such as the cash equivalent of:
(a) Unused vacation and sick leave
credits,
(b) Overtime,
(c) Premium,
(d) Night differential,
(e) Holiday pay and, and
(f) Cost-of-living allowances.
Exception: From 1975 to 1981, [the employer]
had freely, voluntarily and continuously
included in the computation of its employees'
thirteenth month pay, the payments for sick,
UP LAW BOC LABOR STANDARDS
vacation and maternity leaves, premiums for
work done on rest days and special holidays,
and pay for regular holidays. The considerable
length of time the questioned items had been
included by [the employer] indicates a
unilateral and voluntary act on its part,
sufficient in itself to negate any claim of
mistake.
A company practice favorable to the
employees had indeed been established and
the payments made pursuant thereto, ripened
into benefits enjoyed by them. And any benefit
and supplement being enjoyed by the
employees cannot be reduced, diminished,
discontinued or eliminated by the employer.
[Davao Fruits Corp. v. ALU, G.R. No. 85073
(1993)]
Time of payment
General Rule: paid not later than Dec 24 of
each year.
Exception: ER may give to his employees half
(½) of the required 13th Month Pay before the
opening of the regular school year and the
other half on or before the 24th of December
every year.
The frequency of payment of this monetary
benefit may be the subject of agreement
between the employer and the recognized
CBA of the employees.
13th Month Pay in Special Cases
(1) Paid by Results: Employees who are paid
on piece work basis are, by law, entitled
to the 13th Month Pay. (Revised
Guidelines on the Implementation of the
13th Month Pay Law)
(2) Fixed or Guaranteed Wage: Employees
who are paid a fixed or guaranteed wage
plus commission are entitled to 13th
month pay (not purely commission); the
basis for computation shall be both their
fixed or guaranteed wage and
commission. (Revised Guidelines)
(3) Those with Multiple Employers:
Government Employees working part
time in a private enterprise, including
private educational institutions, as well
PAGE 56 OF 235
LABOR LAW
as Employees working in two or more
private firms, whether on full or part
time bases, are entitled to the required
13th Month Pay from all their private
Employers regardless of their total
earnings from each or all their
employers. (Revised Guidelines)
(4) Private School Teachers: Private school
teachers, including faculty members of
universities and colleges, are entitled to
the required 13th month pay, regardless
of the number of months they teach or
are paid within a year, if they have
rendered service for at least one (1)
month within a year. (Revised
Guidelines)
Overload pay is NOT included in the
computation for 13th month pay; overload is
not overtime as it is additional work done
within the normal shift [Letran Calamba
Faculty vs NLRC, G.R. No. 156225 (2008)]
(5) Resigned or Separated Employee: An
Employee who has resigned or whose
services were terminated at any time
before the time for payment of the 13th
month pay is entitled to this monetary
benefit in proportion to the length of
time he worked during the year,
reckoned from the time he started
working during the calendar year up to
the time of his resignation or
termination from service. [Revised
Guidelines]
(6) Terminated Employees: The payment of
the 13th month pay may be demanded
by the employee upon the cessation of
employer-employee relationship.
[Archilles Manufacturing Corp. vs NLRC,
1995]
Additional Rules:
(1) Commissions: If the commissions may
be properly considered part of the basic
salary, then they should be INCLUDED.
If they are not an integral part of the
basic salary, then they should be
UP LAW BOC LABOR STANDARDS
EXCLUDED. [Phil. Duplicators Inc. vs
NLRC, G.R. No. 110068 (1995)]
(2) Substitute Payment not allowed:
Benefits in the form of food or free
electricity, assuming they were given,
were not a proper substitute for the 13th
month pay required by law. Neither may
year-end rewards for loyalty and service
be considered in lieu of 13th month pay.
[Framanlis Farms, Inc. vs MOLE, G.R. No.
72616-17 (1989)]
(3) Wage Difference: The difference
between the minimum wage and the
actual salary received by the Employee
cannot be deemed as his 13th month pay
as such difference is not equivalent to or
of the same import as the said benefit
contemplated by law. [JPL Marketing
Promotions vs CA, 2005]
(4) 14th Month Pay is not mandated:
Employers already paying their
employees a 13th month pay or its
equivalent are not covered by this
Decree.[Kamaya Point Hotel vs NLRC,
G.R. No. 75289 (1989)]
(5) Non-inclusion in regular wage: The
mandated 13th month pay need not be
credited as part of regular wage of
employees for purposes of determining
overtime and premium pays, fringe
benefits insurance fund, Social Security,
Medicare and private retirement plans.
[Revised Rules]
Commissions vis-à-vis 13th month pay
The Rule on Productivity Bonuses. The so-
called commissions “paid to or received by
medical representatives of Boie-Takada
Chemicals or by the rank-and-file employees
of Philippine Fuji Xerox Co., were excluded
from the term “basic salary” because these
were paid to the medical representatives and
rank-and-file employees as “productivity
bonuses.” These have no clear direct or
necessary relation to the amount of work
actually done by each individual employee.
More generally, a bonus is an amount granted
and paid ex gratia to an employee. If an
employer cannot be compelled to pay a
productivity bonus to its employees, it should
follow that such productivity bonus, when
PAGE 57 OF 235
LABOR LAW
given, should not be deemed to fall within the
“basic salary” of employees when the time
comes to compute their 13th month pay [Boie-
Takeda vs de la Serna, G.R. No. 92174 and G.R.
No. L-102552, (1993)]
The decision in Boie-Takeda and the doctrine
enunciated in this case in fact co-exist with the
other. The two cases present quite different
factual situations (although the same word
“commissions” was used or invoked) the legal
characterizations of which must accordingly
differ.
In the instant case, there is no question that
the sales commission earned by the salesmen
who make or close a sale of duplicating
machines constitute part of the compensation
or remuneration paid to salesmen for serving
as salesmen, and hence as part of the “wage”
or salary of petitioner’s salesmen. It appears
that petitioner pays its salesmen a small fixed
or guaranteed wage; the greater part of the
salesmen’s wages or salaries being composed
of the sales or incentive commissions earned
on actual sales closed by them. The sale
commissions were an integral part of the basic
salary structure. They are not overtime
payments, or profit sharing payments or any
other fringe benefit. [Phil. Duplicators vs
NLRC (1995)]
CBA vis-à-vis 13th month pay
The Presidential Decree is specific and
mandatory. However, if the employers actually
grant such for the 13th month pay in the
monetary benefits provided for in the CBA,
they could be exempted from the operation of
the decree. To be exempted, there must be
actual payment. [Marcopper Mining Corp. vs.
Ople (1981)]
Effect of Deficiency in 13th month pay
The intent of P.D. No. 851 is the granting of
additional income in the form of 13th month
pay to employees not as yet receiving the same
and not that a double burden should be
imposed on the employer who is already
paying his employees a 13th month pay or its
equivalent. [Iran v. NLRC, G.R. No. 121927
(1998)]
UP LAW BOC
An employer who pays less than 1/12th of the
employees basic salary as their 13th month
pay is only required to pay the difference.
[Revised Rules]
A.2.i. SERVICE CHARGE
Coverage
Employers [Sec 1, Rule VI, Book 3, IRR]
This rule shall apply only to establishments
which collect service charges such as:
(1) Hotels, restaurants, lodging houses,
night clubs, cocktail lounge, massage
clinics, bars, casinos and gambling
houses;
(2) Similar enterprises including those
entities operating primarily as private
subsidiaries of the Government
Employees [Sec 2, Rule VI, Book 3, IRR]
Shall apply to ALL employees of covered
employers
(1) Regardless of their positions,
designations, or employment status,
and
(2) Irrespective of the method by which their
wages are paid.
Exceptions
Managerial employees – one who is vested
with powers or prerogatives to lay down and
execute managerial policies and/or hire,
transfer, suspend, layoff, recall, discharge,
assign or discipline employees or to effectively
recommend such managerial actions. [Sec 2,
Rule VI, Book 3, IRR]
Distribution
Service charges are distributed in accordance
with the following percentage of sharing:
• Eighty-five percent (85%) for the
employees to be distributed equally
among them;
LABOR STANDARDS LABOR LAW
• Fifteen percent (15%) for the disposition
of management to answer for losses and
breakages and, at the discretion of the
management for distribution to
managerial employees. [Sec 3, Rule VI,
Book 3, IRR]
The shares shall be distributed to employees
not less than once every 2 weeks or twice a
month at intervals not exceeding 16 days. [Sec
4, Rule VI, Book 3, IRR]
Notes:
• The P2,000.00 salary ceiling for
entitlement thereto is no longer
applicable.
• [The employees’] right to their shares in
the service charges collected by [the
employer] is distinct and separate from
their right to ECOLA; gratification by the
[employer] of one does not result in the
satisfaction of the other. [Philippine
Hoteliers, Inc., Dusit Hotel-Nikko v.
NUWHRAIN-APL-IUF-Dusit Hotel Nikko
Chapter, G.R. No. 181972 (2009)]
Integration
In case service charge is abolished, the shares
of covered employees shall be considered
integrated in their wages. [Art 96, LC]
The basis of the amount to be integrated shall
be the average monthly share of each
employee for the past twelve (12) months
immediately preceding the abolition of
withdrawal of the charges. [Sec. 5, Rule VI,
Book 3, IRR]
In Relation to Collective Bargaining
Agreements and Employer-Employee
Agreements
• Nothing in the Rules shall prevent the
employer and employee from entering
into any agreement with terms more
favorable to the employees than those
granted therein, or be used to diminish
any benefit granted to the employees
under existing laws, agreement AND
voluntary employer practice. [Sec. 6,
Rule VI, Book 3, IRR]
PAGE 58 OF 235
UP LAW BOC LABOR STANDARDS
• The rule is without prejudice to existing,
future collective bargaining agreements.
[Sec. 7, Rule VI, Book 3, IRR]
Synthesis of the Rules
• Service charges must be pooled;
• Where a restaurant or similar
establishment does not collect service
charges but has a practice or policy of
monitoring and pooling tips given
voluntarily by its customers to its
employees, the pooled tips should be
monitored, accounted for and
distributed in the same manner as the
services charges. [DOLE Handbook on
Workers’ Statutory Monetary Benefits,
2014ed.]
• The amount collected is divided
between the company (15%) and
employees (85%);
• It shall be given twice a month with
intervals of not more than 16 days;
• If discontinued, removed, or stopped,
the average share of the employees of
their service charge or tips shall be
integrated with their basic wage.
B. WAGES
Definition
(a) It is the remuneration or earnings,
however designated, capable of being
expressed in terms of money,
(b) Whether fixed or ascertained on a time,
task, piece, or commission basis, or
other method of calculating the same,
(c) Which is payable by an employer to an
employee
(d) Under a written or unwritten contract of
employment for work done or to be done,
or for services rendered or to be
rendered and
(e) Includes the fair and reasonable value,
as determined by the Secretary of Labor
and Employment, of board, lodging, or
other facilities customarily furnished by
the employer to the employee
PAGE 59 OF 235
LABOR LAW
Fair and reasonable value - shall not include
any profit to the employer, or to any person
affiliated with the employer. [Art. 97(f), LC]
“No work no pay” Principle
General Rule: the age old rule governing the
relation between labor and capital or
management and employee is that a "fair
day's wage for a fair day's labor." [Sugue v.
Triumph International (2009)]
Exception: When the laborer was able, willing
and ready to work but was illegally locked out,
suspended or dismissed, or otherwise illegally
prevented from working. [Sugue v Triumph
International, supra]
“Equal Work for Equal Pay” Principle
Employees working in the Philippines, if they
are performing similar functions and
responsibilities under similar working
conditions should be paid equally. If an
employer accords employees the same
position and rank, the presumption is that
these employees perform equal work.
[International School Alliance of Educators v.
Hon. Quisumbing (2000)]
Coverage/Exclusions
Wage includes the fair and reasonable value
of facilities furnished by the employer to the
employee [Art. 97(f)] while allowances are
excluded from the basic salary or wage
computation. [Cebu Institute of Technology v
Ople (1987)]
Applicability
The Labor Code Title on wages shall not apply
to the following [Art. 98 and Book 3, Rule VII,
Sec 3, IRR]:
(1) Farm tenancy or leasehold;
(2) Household or domestic helpers,
including family drivers and other
persons in the personal service of
another;
(3) Homeworkers engaged in needlework;
UP LAW BOC LABOR STANDARDS LABOR LAW

(4) Workers in registered cottage industries 6. Any object other than legal tender, even
who actually work at home; when expressly requested by the
employee
(5) Workers in registered cooperatives when
so recommended by the Bureau of
Cooperative Development upon
Conditions for payment through check:
approval of the Secretary of Labor;
1. Bank/Facility for encashment is within 1-
km radius from the workplace
Note: Workers in registered barangay micro
2. ER did not receive any pecuniary benefit
business enterprise are only exempted from
because of said arrangement
the Minimum Wage Law, not from the Title on
Wages [RA 9178]. 3. EEs are given reasonable time during
banking hours to withdraw their wages
(compensable hours, if during working
B.1. WAGES VS SALARY hours)
Wages and salary are in essence synonymous. 4. The payment by check is with the written
[Songco v. NLRC (1990)] consent of the EEs concerned, in the
absence of a CBA
There are slight differences:
Wage Salary
B.2.B. Time of Payment [Secs. 3, Rule VIII, Book
Paid for skilled or Paid to white collar III, Omnibus Rules]
unskilled manual labor workers and
TIME OF PAYMENT*
denote a higher
grade of At least once every 2
employment Frequency weeks or 2x per
month
Not subject to execution, Not exempt from
garnishment or execution, Must not be more
Intervals
attachment except for garnishment or than 16 days
debts related to attachment [Gaa Valid excuse for
necessities [Art. 1708] vs. CA, 1985] delayed payment
B.2. PAYMENT OF WAGES Force Majeure BUT ER must pay
immediately after
B.2.A. Form Of Payment [Secs. 1-2, Rule VIII,
cessation
Book III, IRR]
Payments should be
General rule: Legal Tender Only
made with intervals
Exception: Check/Money Order if customary not more thanv16
OR necessary because of special Tasks which cannot days, in proportion
circumstances, as specified by the Secretary of be completed in 2 to work completed
Labor or the CBA weeks Final settlement is
Not allowed: made upon
1. Promissory Notes completion of the
work.
2. Vouchers
3. Tokens
B.2.C. Place of Payment
4. Tickets
[Secs. 4, Rule VIII, Book III, Omnibus Rules]
5. Chits; or
General Rule: Shall be made at or near the
place of undertaking (workplace)

PAGE 60 OF 235
UP LAW BOC
Exceptions:
1. Deterioration of peace and order
conditions, or by reason of actual or
impending emergencies (fire, flood,
epidemic)
2. Free transportation to the employees
back and forth
3. Under any other analogous
circumstances provided, that the time
spent by the employees in collecting
their wages shall be considered as
compensable hours worked.
NO PAYMENT in any bar, night or day club,
drinking establishment, massage clinic, dance
hall, or other similar places or in places where
games are played with stakes of money or
things representing money except in the case
of persons employees in such places
Condition for ATM payment
[Labor Advisory on Payment of Salaries thru
ATM (1996)]:
1. ATM system of payment is with the
written consent of the EEs
2. EEs are given reasonable time to
withdraw their wages from the banking
facility (compensable hours, if during
work hours)
3. System shall allow workers to reeive
their wages within the period/frequency
provided by law
4. There is a bank/ATM facility within 1km
radius from the place of work
5. Upon request of the concerned EEs, the
ER shall issue a record of payment of
wages, benefits and deductions for a
particular period
6. There shall be no additional expenses
and no diminution of benefits and
privileges
7. The ER shall assume responsibility in
case the wage protection provisions of
law and regulations are not complied
with under the arrangement
B.2.D. Person to Pay [Sec 5, Rule VIII, Book III,
Omnibus Rules]
LABOR STANDARDS LABOR LAW
General Rule: Directly to EE
Exceptions:
1. Member of EE’s family  if ER is
authorized in writing by the EE
2. A 3rd person  if authorized by law (e.g.
insurance companies for premiums,
union dues where the right to check-off
has been recognized by ER in
accordance with a CBA or authorized in
writing by EE concerned)
3. Heirs  in case of death of EE, without
necessity of intestate proceedings
• If heirs are of age  they shall
execute an affidavit attesting to
their relationship to the deceased
and the fact that they are his heirs to
the exclusion of others
• If any of the heirs is a minor  such
affidavit shall be executed in his
behalf by his natural guardian or
next of kin.
B.3. FACILITIES vs SUPPLEMENTS
The distinction between facilities and
supplement is relevant because the former is
wage-deductible while the latter is not. Simply
put, a wage includes facilities. [Art. 97, LC)
The IRR definition [IRR Book III Rule 7-A Sec. 5]
has 2 components:
(1) Facilities are articles or services for the
benefit of the employee or his family.
This 1st part defines facilities.
(2) Facilities shall not include tools of the
trade or articles or service primarily for
the benefit of the employer or necessary
to the conduct of the employer’s
business. This 2nd part is essentially
defines what a supplement is.
Criterion: In determining whether a privilege is
a facility, the criterion is not so much its kind
but it’s PURPOSE [Millares v NLRC & PICOP,
1999]
Facilities are items of expense necessary for
the laborer’s and his family’s existence and
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UP LAW BOC LABOR STANDARDS LABOR LAW

subsistence. [States Marine Corp. v. Cebu (2) The provision of deductible facilities
Seamen's Assoc., Inc., 1963] must be voluntarily accepted in writing
by the employee; and
(3) Facilities must be charged at reasonable
Comparison between Facilities and
value.
Supplements
[SLL International Cable Specialists v. NLRC,
Facilities Supplements 2011]
What it is Value of Facilties = Cost of Operation and
maintenance + Adequate depreciation +
Extra remuneration reasonable allowance (not more than 5.5%
Articles or
or special benefits / interest)
services/items of
articles or services /
expense; EXCLUDES If the fair rental value is lower than the
tools of the trade
tools of the trade or computed value, fair rental value will be used.
given to or received
articles or service
by laborers over and
primarily for the
above their ordinary
benefit of ER B.4. NON-DIMINUTION OF WAGES
earning or wages
General Rule: There is a prohibition against
Who Benefits elimination or diminution of benefits [Art. 100]
For the benefit of the No wage order issued by any regional board
employee and his For the benefit or shall provide for wage rates lower than the
family; for their convenience of the statutory minimum wage rates prescribed by
existence and employer Congress. [Art. 127, as amended by Republic
subsistence Act No. 6727, June 9, 1989]
Requisites
Part of Wage?
If the following are met, then the employer
Yes No cannot remove or reduce benefits [Vergara Jr.
v Coca-Cola Bottlers Phils]:
Deductible from Wage?
(1) Ripened company policy: Benefit is
No - Independent of founded on a policy which has ripened
Yes - Part of wage so into a practice over a long period
the Wage so not
it is deductible
deductible (2) Practice is consistent and deliberate and
Examples (3) Not due to error in the construction or
application of a doubtful or difficult
Meals, board and question of law. [Globe Mackay Cable vs.
lodging NLRC, 1988]
(4) The diminution or discontinuance is
done unilaterally by the employer.
Requirements for deducting value of facilities
Mere availment is not sufficient to allow
deductions from employees’ wages. Before When not applicable: At least one of the
the value of facilities can be deducted from the requisites is absent.
employees’ wages, the following requisites (1) Mistake in the application of the law
must all be attendant: [Globe Mackay Cable v. NLRC, June 29,
(1) Proof must be shown that such facilities 1988]
are customarily furnished by the trade; (2) Negotiated benefits [Azucena]
(3) Reclassification of Positions – e.g. loss
of some benefits by promotion.
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UP LAW BOC
(4) Contingent or Conditional Benefits – the
rule does not apply to a benefit whose
grant depends on the existence of
certain conditions, so that the benefit is
not demandable if those preconditions
are absent.
Benefits initiated through negotiation
between Employee and Employer, e.g. CBA,
can only be eliminated or diminished
bilaterally.
B.5. PROHIBITIONS REGARDING WAGES
1. Interference in disposal of wages [Art
112, LC]
2. Wage deduction [Art 113, LC]
3. Requirement to make deposits for loss
or damage [Art 114-115, LC]
4. Withholding of wages [Art 116, LC]
5. Deduction to ensure employment [Art
117, LC]
6. Retaliatory measures [Art 118, LC]
7. False reporting [Art 119, LC]
B.5.A. Prohibition against Interference In
Disposal Of Wages
Art. 112 LC
Non-interference in disposal of wages. No
employer shall limit or otherwise interfere with
the freedom of any employee to dispose of his
wages. He shall not in any manner force,
compel, or oblige his employees to purchase
merchandise, commodities or other property
from any other person, or otherwise make use
of any store or services of such employer or any
other person.
B.5.B. Prohibition against Wage Deduction
[Art 113, LC]
General Rule: ER cannot make any deduction
from the wages of his EE
Exceptions:
1. Insurance premiums
2. Union dues
LABOR STANDARDS LABOR LAW
3. Other deductions authorized by
law/Secretary of Labor
In case of Bankruptcy or Liquidation of an ER’s
business [Art 110, LC]: Workers shall enjoy first
preference as regards their wages and other
monetary claims, any provision of law to the
contrary nowithstanding. Such unpaid wages
and monetary claims shall be paid in full
before the claims of the Government and other
creditors may be paid [NOTE: Art 110, LC
amended Art 2244 of the Civil Code (ordinary
preferred credits) by elevating #2 of Art. 2244
to 1st priority]
B.5.C. Prohibition against Requirement To
Make Deposits For Loss Or Damage [Art. 114,
LC]
General Rule: No ER shall require his worker to
make deposits from which deductions shall be
made for the reimbursement of loss of or
damage to tools, materials, or equipment
supplied by the employer.
Exception: ER is engaged in such trades,
occupations or business where the practice of
making deductions or requiring deposits is a
recognized one, or is necessary or desirable as
determined by the Secretary of Labor and
Employment in appropriate rules and
regulations.
No deduction from the deposits of an EE for
the actual amount of the loss/damage shall
be made unless:
1. There is reasonable opportunity for EE
to show cause why deduction should not
be made [Art 115, LC]
2. EE’s responsibility has been clearly
shown [Art 115, LC]
3. Amount is fair and reasonable and shall
not exceed the actual loss of damage;
and
4. Must not exceed 20% of weekly pay
Attorney’s fees in any judicial or administrative
proceedings for the recovery of wages shall
not exceed 10% of the amount awarded
B.5.D. Prohibition against Withholding of
Wages
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UP LAW BOC LABOR STANDARDS
Art. 116, LC
Withholding of wages and kickbacks
prohibited. It shall be unlawful for any person,
directly or indirectly, to withhold any amount
from the wages of a worker or induce him to
give up any part of his wages by force, stealth,
intimidation, threat or by any other means
whatsoever without the worker’s consent.
Exceptions:
1. Deduction is for insurance premiums
2. For union dues
3. Authorized by law/ DOLE Sec
4. Due & demandable debt to ER
B.5.E. Prohibition Against Deduction To Ensure
Employment
Art. 117, LC
Deduction to ensure employment. It shall be
unlawful to make any deduction from the
wages of any employee for the benefit of the
employer or his representative or intermediary
as consideration of a promise of employment
or retention in employment.
B.5.F. Prohibition Against Retaliatory
Measures
Art. 118, LC
Retaliatory measures. It shall be unlawful for
an employer to refuse to pay or reduce the
wages and benefits, discharge or in any
manner discriminate against any employee
who has filed any complaint or instituted any
proceeding under this Title or has testified or
is about to testify in such proceedings.
This covers offenses only under the titled of
Wages in the LC
B.5.G. Prohibition Against False Reporting
Art. 119, LC
False reporting. It shall be unlawful for any
person to make any statement, report, or
record filed or kept pursuant to the provisions
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LABOR LAW
of this Code knowing such statement, report or
record to be false in any material respect.
Covers all offenses under the Labor Code
B.6. WAGE ORDER, WAGE DISTORTION
WAGE ORDER
Wage Order (WO) – an order issued by the
Regional Tripartite Wages and Productivity
Boards (“Regional Boards”) whenever the
conditions in the region so warrant after
investigating and studying all pertinent facts
and based on the standards and criteria
prescribed by the Labor Code. The Regional
Board proceeds to determine whether to issue
the same or not [Art, 123, LC, as amended by
RA 6727].
WO establishes the minimum wage rates to be
paid by ERs in the region, which shall in no
case be lower than the applicable statutory
minimum wage rates [NWPC Rules of
Procedure on Minimum Wage Fixing].
Section 2, Wage Rationalization Act (RA 6727)
It is hereby declared the policy of the State to
rationalize the fixing of minimum wages and
to promote productivity-improvement and
gain-sharing measures to ensure a decent
standard of living for the workers and their
families; to guarantee the rights of labor to its
just share in the fruits of production; to
enhance employment generation in the
countryside through industry dispersal; and to
allow business and industry reasonable
returns on investment, expansion and growth.
Art. 122, LC (as amended by RA 6727)
Creation of Regional Tripartite Wages and
Productivity Boards. — There is hereby created
Regional Tripartite Wages and Productivity
Boards, hereinafter referred to as Regional
Boards, in all regions, including autonomous
regions as may be established by law. The
Commission shall determine the
offices/headquarters of the respective
Regional Boards.
UP LAW BOC LABOR STANDARDS
"The Regional Boards shall have the following
powers and functions in their respective
territorial jurisdiction: xxx (b) To determine
and fix minimum wage rates applicable in
their region, provinces or industries therein
and to issue the corresponding wage orders,
subject to guidelines issued by the
Commission xxx
Standards/Criteria in Wage Fixing
1. The demand for living wages;
2. Wage adjustment vis-a-vis the
consumer price index;
3. The cost of living and changes or
increases therein;
4. The needs of workers and their families;
5. The need to induce industries to invest in
the countryside;
6. Improvements in standards of living;
7. The prevailing wage levels;
8. Fair return of the capital invested and
capacity to pay of employers;
9. Effects on employment generation and
family income; and
10. The equitable distribution of income and
wealth along the imperatives of
economic and social development. [Art
124, as amended]
Art. 123, LC (as amended by RA 6727)
Wage Order. — Whenever conditions in the
region so warrant, the Regional Board shall
investigate and study all pertinent facts; and
based on the standards and criteria herein
prescribed, 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.
In the performance of its wage determining
functions, the Regional Board shall conduct
public hearings/consultations, giving notices
to employees' and employers' groups,
provincial, city and municipal officials and
other interested parties.
PAGE 65 OF 235
LABOR LAW
Any party aggrieved by the Wage Order issued
by the Regional Board may appeal such order
to the Commission within ten (10) calendar
days from the publication of such order. It
shall be mandatory for the Commission to
decide such appeal within sixty (60) calendar
days from the filing thereof.
The filing of the appeal does not stay the order
unless the person appealing such order shall
file with the Commission an undertaking with
a surety or sureties satisfactory to the
Commission for the payment to the employees
affected by the order of the corresponding
increase, in the event such order is affirmed."
WO Effectivity: After 15 days from its complete
publication in at least one newspaper of
general circulation
NOTE: Public hearing and publication are
mandatory[Cagayan Sugar Milling Co. vs. Sec.
of Labor, GR No. 128399 (1998)].
Frequency: A WO issued by the Board may not
be disturbed for a period of 12 months from its
effectivity and no petition for wage increase
shall be entertained during said period.
Exceptions:
1. When Congress itself issues a law
increasing wages.
2. Supervening conditions (i.e.
extraordinary increases in prices of
petroleum products and basic
goods/services.
Appeal: Any party aggrieved by the Wage
Order issued by the Regional Board may
appeal such order to the Commission within
ten (10) calendar days from the publication of
such order. It shall be mandatory for the
Commission to decide such appeal within sixty
(60) calendar days from the filing thereof.
Effect of Appeal: Does not operate to stay the
order
Exception: Party appealing such order shall
file with the Commission an undertaking with
a surety/sureties (surety bond) satisfactory to
UP LAW BOC
the Commission for payment to employees
affected by the order of the corresponding
increase in the event such order is affirmed
[Sec 5, Rule V, IRR of RA 6727].
Grounds for Appeals for Review of WO
1. Non-conformity with prescribed
guidelines and/or procedure
2. Questions of law
3. Grave abuse of discretion [Rule IV,
Revised Rules of Procedure on Minimum
Wage Fixing]
Double Indemnity Doctrine
Double Indemnity is the payment to a
concerned EE of the prescribed increase or
adjustments in the wage rate which was not
paid by an ER in an amount equivalent to 2x
the benefits owing to such employee.
Unpaid Benefits
The prescribed wage rates which the ER failed
to pay upon the effectivity of a WO, exclusive
of other wage-related benefits
Unpaid benefits serve as the principal basis for
computing the double indemnity [Sec. 2, DO
10-98]
Wages of apprentices, learners and
handicapped workers shall in no case be less
than 75% of the statutory minimum wage
rates [Sec. 10, IRR of RA 6727]
METHODS OF FIXING
1. Floor Wage Method- fixing a
determinate amount to be added to the
prevailing statutory minimum wage
rates (e.g. setting P25 increase for min.
wage rates)
2. Salary-Ceiling Method- Wage
adjustment to be applied to EEs
receiving a certain denominated salary
or workers being paid more than
existing min. wage (e.g. WO granting
P25 increase to those earning up to
P250)
LABOR STANDARDS LABOR LAW
Salary Ceiling
Floor Wage
What it does
All wages under a
Adds to previous certain wage
minimum wage increases to that
wage
Example
All wages under
P456+P100=P556 P556 must be
increased to P556
Wage Distortion/Rectification
A situation where an increase in prescribed
wage rates results in the elimination or severe
contraction of intentional quantitative
differences in wage or salary rates between
and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure
based on skills, length of service, or other
logical bases of differentiation [Art. 124, LC]
4 Elements of wage distortion
(a) Existing hierarchy of positions with
corresponding salary rates;
(b) A significant change in the salary rate of
a lower pay class without a concomitant
increase in the salary rate of a higher
one;
(c) The elimination of the distinction
between the two levels; and
(d) The existence of the distortion in the
same region of the country. [Prubankers
Assn. v. Prudential Bank and Co. (1999)]
How to Resolve [LC Art. 124]
Organized Establishment
(1) Employer and the union shall negotiate
to correct the distortions.
(2) Disputes shall be resolved through the
grievance procedure.
(3) If still unresolved, voluntary arbitration.
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UP LAW BOC LABOR STANDARDS
Grievance Procedure (under the CBA)  if
unresolved, VOLUNTARY arbitration
Unorganized Establishment
(1) ERs and Employees shall endeavor to
correct such distortions.
(2) Disputes shall be settled through the
National Conciliation and Mediation
Board.
(3) If still unresolved after 10 calendar days
of conciliation, it shall be referred to the
appropriate branch of the NLRC –
compulsory arbitration
▪ Both the employer and employee
cannot use economic weapons.
(4) Employer cannot declare a lock-out;
Employee cannot declare a strike
because the law has provided for a
procedure for settling
(5) The salary or wage differential does not
need to be maintained. [National
Federation of Labor v. NLRC, 1994]
National Conciliation and Mediation Board 
if unresolved, COMPULSORY arbitration by
the NLRC
CBA vis-à-vis Wage Orders – CBA creditability
In determining an employee’s regular wage,
the pertinent stipulations in the CBA are
controlling, provided the result is not less than
the statutory requirement (Philippine National
Bank vs. PEMA, 1982)
Note: The manner of resolving wage distortion
is largely based on the applicable wage order.
The current one for NCR, WO 20, refers to the
procedure in Art. 124 of the Labor Code
C. LEAVES
C.1. SERVICE INCENTIVE LEAVE PAY
Coverage
Every employee who has rendered at least one
year of service shall be entitled to a yearly
service incentive leave of five days with pay.
[Art. 95(a), LC.]
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LABOR LAW
Service Incentive Leave DOES NOT apply to the
following employees:
(1) Those of the government and any of its
political subdivisions, including GOCCs;
(2) Domestic helpers and persons in the
personal service of another;
(3) Managerial employees as defined in
Book 3 of this Code;
(4) Field personnel and other employees
whose performance is unsupervised by
the employer including those who are
engaged on task or contract basis,
purely commission basis, or those who
are paid a fixed amount for performing
work irrespective of the time consumed
in the performance thereof;
(5) Those who are already enjoying the
benefit herein provided;
(6) Those enjoying vacation leave with pay
of at least 5 days;
(7) Those employed in establishments
regularly employing less than 10
employees. [Book 3, Rule 5, Sec. 1, IRR]
Piece-rate employees are entitled to service
incentive leave pay. The Court looked at
several factors which led them to conclude
that petitioners, although compensated on a
per piece basis, were regular employees of.
[Labor Congress of the Phils., v. NLRC (1998)]
Teachers of private school on contract basis
are entitled to service incentive leave. [Cebu
Institute of Technology v. Ople (1987)]
The law grants annual SIL of five days to
domestic workers but their SIL shall not be
converted to cash or carried over to
succeeding years. [R.A. No. 10361, Sec. 5]
Meaning of “1 year of service”
"At least one year service" shall mean service
for not less than 12 months, whether
continuous or broken, reckoned from the date
the employee started working, including
authorized absences and paid regular
holidays unless the working days in the
establishment as a matter of practice or policy,
UP LAW BOC LABOR STANDARDS
or that provided in the employment contract is
less than 12 months, in which case said period
shall be considered as one year. [Book III, Rule
V, Sec. 3, IRR.]
Arbitration or Administrative Action
The grant of benefit IN EXCESS of that
provided herein shall not be made a subject of
arbitration or any court or administrative
action. [Art. 95 (c), LC]
The cause of action of an entitled employee to
claim his service incentive leave pay accrues
from the moment the employer refuses to
remunerate its monetary equivalent if the
employee did not make use of said leave
credits but instead chose to avail of its
commutation (into money). Accordingly, if the
employee wishes to accumulate his leave
credits and opts for its commutation upon his
resignation or separation from employment,
his cause of action to claim the whole amount
of his accumulated service incentive leave
shall arise when the employer fails to pay such
amount at the time of his resignation or
separation from employment. [Auto Bus
Transport vs. NLRC (2005)]
Commutable nature of benefit
The service incentive leave shall be
commutable to its money equivalent if not
used or exhausted at the end of the year. [Book
3, Rule 5, Sec. 5]
C.2. MATERNITY LEAVE
[Sec. 14-A of RA 1161 (Social Security Law) as
amended by RA 7322 and RA 8282]
Coverage
Every pregnant woman in the private sector,
whether married or unmarried, is entitled to
the maternity leave benefits.
This is applicable to both childbirth and
miscarriage.
Requisites
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LABOR LAW
(1) Employment: A female employee
employed at the time of delivery,
miscarriage or abortion
(2) Contribution: who has paid at least 3
monthly contributions in the 12-month
period immediately preceding the
semester of her childbirth, or
miscarriage.
(3) Notice: employee notified employer of
her pregnancy and the probable date of
her childbirth, which notice shall be
transmitted to the SSS in accordance
with the rules and regulations it may
provide.
Benefit received
A daily maternity benefit equivalent to 100%
of her average daily salary credit for:
(1) 60 days for normal delivery
(2) 78 days for caesarean delivery
Note: This benefit shall NOT be included in the
computation of 13th month pay as it is granted
to an employee in lieu of wages which is the
basis for computing 13th month.
Only 4 maternity leaves available
The maternity benefits provided under the
Social Security Law shall be paid only for the
first four (4) deliveries or miscarriages
SSS pays for the maternity leave
The employer advances the benefit to the
employee but the SSS shall immediately
reimburse the employer of one hundred
percent (100%) of the amount upon receipt
of satisfactory proof of such payment and
legality thereof
Other conditions
(1) Employer shall advance the payment
subject to reimbursement by the SSS
within 30 days from filing of leave
application.
UP LAW BOC LABOR STANDARDS
(2) Availment shall be a bar to the recovery
of sickness benefits provided by this Act
for the same period for which daily
maternity benefits have been received.
(3) Employee may only avail of benefit for
the first four (4) deliveries or
miscarriages.
(4) Sanction: That if an employee should
give birth or suffer miscarriage
(a) Without the required contributions
having been remitted for her by her
ER to the SSS, or
(b) Without the latter having been
previously notified by the ER of time
of the pregnancy, then the employer
shall pay to the SSS damages
equivalent to the benefits which said
employee member would otherwise
have been entitled to.
C.3. PATERNITY LEAVE [RA 8187
(PATERNITY LEAVE ACT OF 1996)]
Coverage and Purpose
Paternity leave is granted to all married male
employees in the private and public sectors,
regardless of their employment status (e.g.
probationary, regular, contractual, project
basis). The purpose of this benefit is to allow
the husband to lend support to his wife during
her period of recovery and/or in nursing her
newborn child. [Sec. 3, RA 8187]
Benefit
It shall be for 7 calendar days, with full pay,
consisting of basic salary and mandatory
allowances fixed by the Regional Wage Board,
if any, provided that his pay shall not be less
than the mandated minimum wage. [Sec. 2,
RA 8187]
It shall apply to the first 4 deliveries of the
employee’s lawful wife with whom he is
cohabiting.
Cohabiting means the obligation of the
husband and wife to live together. [Sec. 1, IRR,
RA 8187] If the spouses are not physically
living together because of the workstation or
occupation, the male employee is still entitled
to the paternity leave benefit.
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LABOR LAW
Usage of the benefit
Usage of the leave shall be after the delivery,
without prejudice to an employer’s policy of
allowing the employee to avail of the benefit
before or during the delivery, provided that the
total number of days shall not be more than 7
days for each covered delivery. [Sec. 5, IRR, RA
8187]
Conditions for entitlement [Sec. 3, IRR, RA
8187]
(1) He is married;
(2) He is an employee at the time of the
delivery of his child;
(3) He is cohabiting with his spouse at the
time that she gives birth or suffers a
miscarriage;
(4) He has applied for paternity leave with
his ER within a reasonable period of
time from the expected date of delivery
by his pregnant spouse, or within such
period as may be provided by company
rules and regulations, or by CBA; and,
(5) His wife has given birth or suffered a
miscarriage.
Application for paternity leave
See number 4 under conditions for entitlement.
In case of miscarriage, prior application for
paternity leave shall not be required. [Sec. 4,
IRR, RA 8187]
Non-conversion to cash
In the event that the paternity leave is not
availed of, it shall not be convertible to cash
and shall not be cumulative. [Sec. 7, IRR, RA
8187]
Crediting of existing benefits
(1) If the existing paternity leave benefit
under the CBA, contract, or company
policy is greater than 7 calendar days as
provided for in RA 8187, the greater
benefit shall prevail.
UP LAW BOC LABOR STANDARDS
(2) If the existing paternity leave benefit is
less than that provided in RA 8187, the
ER shall adjust the existing benefit to
cover the difference. [Sec. 9, IRR, RA
8187]
Where a company policy, contract, or CBA
provides for an emergency or contingency
leave without specific provisions on paternity
leave, the ER shall grant to the employee 7
calendar days of paternity leave. [Sec. 9, IRR,
RA 8187]
C.4. PARENTAL LEAVE FOR SOLO
PARENTS [RA 8972 (SOLO PARENTS’
WELFARE ACT OF 2000)]
Leave benefits granted to a solo parent to
enable him/her to perform parental duties
and responsibilities where physical presence is
required. [Sec. 3 (d), RA 8972]
Coverage
Any solo parent or individual who is left alone
with the responsibility of parenthood due to:
(1) Giving birth as a result of rape or and
other crimes against chastity even
without a final conviction of the
offender: Provided, That the mother
keeps and raises the child;
(2) Death of spouse;
(3) Spouse is detained or is serving
sentence for a criminal conviction for at
least one (1) year;
(4) Physical and/or mental incapacity of
spouse as certified by a public medical
practitioner;
(5) Legal separation or de facto separation
from spouse for at least one (1) year:
Provided, that he/she is entrusted with
the custody of the children;
(6) Declaration of nullity or annulment of
marriage as decreed by a court or by a
church: Provided, that he/she is
entrusted with the custody of the
children;
(7) Abandonment of spouse for at least one
(1) year;
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LABOR LAW
(8) Unmarried father/mother who has
preferred to keep and rear his/her
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: Provided, that he/she is duly
licensed as a foster parent by the
Department of Social Welfare and
Development (DSWD) or duly appointed
legal guardian by the court; and
(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 for at least
one (1) year. [Sec. 3 (a), RA 8972]
Conditions for Entitlement
A solo parent employee shall be entitled to the
parental leave under the following conditions:
(1) He/she has rendered at least one (1) year
of service, whether continuous or
broken;
(2) He/she has notified his/her employer
that he/she will avail himself/herself of
it, within a reasonable period of time;
and
(3) He/she has presented to his/her
employer a Solo Parent Identification
Card, which may be obtained from the
DSWD office of the city or municipality
where he/she resides. [Sec 19, Art. V,
IRR, RA 8972]
Availment
The parental leave is in addition to leave
privileges under existing laws with full pay,
consisting of basic salary and mandatory
allowances. It shall not be more than seven (7)
working days every year. [Sec. 8, RA 8972]
Grant of Flexible Work Schedule
The employer shall provide for a flexible
working schedule for solo parents: Provided,
That the same shall not affect individual and
company productivity: Provided, further, That
UP LAW BOC
any employer may request exemption from the
above requirements from the DOLE on certain
meritorious grounds. [Sec. 6, RA 8972]
Protection against Work Discrimination
No employer shall discriminate against any
solo parent employee with respect to terms
and conditions of employment on account of
his/her status. [Sec. 7, RA 8972]
Termination of the Benefit
A change in the status or circumstance of the
parent claiming the benefit under the law,
such that he/she is no longer left alone with
the responsibility of parenthood, shall
terminate his/her eligibility for these benefits.
[Sec. 3 (a), RA 8972]
C.5. SPECIAL LEAVE FOR WOMEN
WORKERS [RA 9710 (THE MAGNA CARTA
OF WOMEN), DOLE DO NO. 112, SERIES OF
2011 AS AMENDED BY DO NO. 112-A SERIES
OF 2012]
Special Leave Benefit for Women
A female employee’s leave entitlement of two
(2) months with full pay from her employer
based on her gross monthly compensation
following surgery caused by gynecological
disorders, provided that she has rendered
continuous aggregate employment service of
at least six (6) months for the last 12 months.
Gynecological Disorders
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. It shall also include
hysterectomy, ovariectomy, and mastectomy.
Gross Monthly Compensation
LABOR STANDARDS LABOR LAW
The monthly basic pay plus mandatory
allowances fixed by the regional wage boards.
[Sec. 7, Rule II, IRR, RA 9710]
Basic Requirement
The woman employee should have been with
the company for 12 months prior to surgery. An
aggregate service of at least six (6) months
within the said 12-month period is sufficient to
entitle her to avail of the special leave benefit.
Employment service includes absences with
pay such as use of other mandated leaves,
company-granted leaves and maternity leaves
Competent Physician
A medical doctor preferably specializing in
gynecological disorders or is in the position to
determine the period of recuperation of the
woman employee. [Sec. 1, DO 112, as
amended]
Conditions for Entitlement
Any female employee, regardless of age and
civil status, shall be entitled to a special leave
benefit, provided she has complied with the
following conditions:
(1) She has rendered at least 6 months
continuous aggregate employment
service for the last 12 months prior to
surgery;
(2) She has filed an application for special
leave
(3) She has undergone surgery due to
gynecological disorders as certified by a
competent physician. [Sec. 2, DO 112]
Application for Special Leave
Application before surgery
The employee shall file her application for
leave with her employer within a reasonable
period of time from the expected date of
surgery, or within such period as may be
provided by company rules and regulations or
by CBA.
Application after surgery
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UP LAW BOC LABOR STANDARDS
Prior application for leave shall not be
necessary in cases requiring emergency
surgical procedure, provided that the
employer shall be notified verbally or in
written form within a reasonable period of
time and provided further that after the
surgery or appropriate recuperating period,
the female employee shall immediately file
her application using the prescribed form.
[Sec. 3, DO 112]
Period of Entitlement
The 2 months special leave is the maximum
period of leave with pay that a woman
employee may avail of under RA 9710.
For purposes of determining the period of
leave with pay that will be allowed to a female
employee, the certification of a competent
physician as to the required period of
recuperation shall be controlling. [Sec. 4, DO
112, as amended]
Availment
The special leave shall be granted to the
qualified employee after she has undergone
surgery. [Sec. 5, DO 112, as amended]
A woman employee can avail of the SLB for
every instance of surgery due to gynecological
disorder for a maximum total period of 2
months per year. [Sec. 6, DO 112, as amended]
Special Leave Benefit vis-à-vis SSS Sickness
Benefit
The SLB is different from the SSS sickness
benefit. The former is granted by the employer
in accordance with RA 9710.
It is granted to a woman employee who has
undergone surgery due to gynecological
disorder. The SSS sickness benefit, on the
other hand, is administered and given by the
SSS in accordance with RA 1161 as amended by
RA 8282. [Sec. 7, DO 112, as amended]
Special Leave Benefit vis-à-vis Existing
Statutory Leaves
The SLB cannot be taken from existing
statutory leaves (i.e. 5-day SIL, leave for
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LABOR LAW
victims of VAWC, Parental leave for solo
parents). The grant of SLB under the law is in
recognition of the fact that patients with
gynecological disorder needing surgery
require a longer period of recovery. The benefit
is considered an addition to the leave benefits
granted under existing laws and should be
added on top of said statutory leave
entitlements.
If the SLB has already been exhausted, the
company leave and other mandated leave
benefits may be availed of by the woman
employee. [Sec. 8, DO 112, as amended]
Special Leave Benefit vis-à-vis Maternity Leave
Benefit
Where the woman employee had undergone
surgery due to gynecological disorder during
her maternity leave, she is entitled only to the
difference between the SLB and maternity
leave benefit. [Sec. 9, DO 112, as amended]
Crediting of Existing or Similar Benefits
If there are existing or similar benefits under a
company policy, practice or CBA providing
similar or equal benefits to what is mandated
by law, the same shall be considered as
compliance, unless the company policy,
practice or CBA provides otherwise.
In the event the company policy, practice or
CBA provides lesser benefits, the company
shall grant the difference.
More liberal existing or similar benefits cannot
be withdrawn or reduced by reason of this law.
The term “similar or equal benefits” refers to
leave benefits which are of the same nature
and purpose as that of the SLB. [Sec. 10, DO
112, as amended]
Mode of Payment
The SLB is a leave privilege. The woman
employee shall not report for work for the
duration of the leave but she will still receive
her salary covering said period. The employer,
in its discretion, may allow said employee to
receive her pay for the period covered by the
approved leave before or during the surgery.
The computation of her “pay” shall be based
UP LAW BOC LABOR STANDARDS
on her prevailing salary at the time of the
surgery. [Sec. 11, DO 112, as amended]
Non-Commutation of the Benefit
The SLB shall be non-cumulative and non-
convertible to cash unless otherwise provided
by a CBA. [Sec. 12, DO 112, as amended]
D. SPECIAL GROUPS OF EMPLOYEES
D.1. WOMEN
Sec. 14, Art. II, 1987 Constitution
The State recognizes the role of women in
nation-building, and shall ensure the
fundamental equality before the law of
women and men.
Sec. 14, Art XIII, 1987 Constitution
The State shall protect working women by
providing safe and healthful working
conditions, taking into account their
maternal functions, and such facilities and
opportunities that will enhance their
welfare and enable them to realize their full
potential in the service of the nation.
Sec. 1, Rule XII, Book III, IRR
General Statement on Coverage. – This Rule
shall apply to all employers, whether
operating for profit or not, including
educational, religious and charitable
institutions, except to the Government and
to government-owned or controlled
corporations and to employers of household
helpers and persons in their personal
service insofar as such workers are
concerned.
D.1.a. DISCRIMINATION
It shall be unlawful for any employer to
discriminate against any woman employee
with respect to terms and conditions of
employment solely on account of her sex.
The following are acts of discrimination:
(1) Payment of a lesser compensation,
including wage, salary or other form of
PAGE 73 OF 235
LABOR LAW
remuneration and fringe benefits, to a
female employees as against a male
employee, for work of equal value; and
(2) Favoring a male employee over a female
employee with respect to promotion,
training opportunities, study and
scholarship grants solely on account of
their sexes. [Art.133, Labor Code]
Par. 2, Sec. 2, Magna Carta of Women
The State condemns discrimination against
women in all its forms and pursues by all
appropriate means and without delay the
policy of eliminating discrimination against
women in keeping with the Convention on the
Elimination of All Forms of Discrimination
Against Women (CEDAW) and other
international instruments consistent with
Philippine law. The State shall accord women
the rights, protection, and opportunities
available to every member of society.
Sec. 12, Magna Cart of Women
Equal Treatment Before the Law. - The State
shall take steps to review and, when
necessary, amend and/or repeal existing laws
that are discriminatory to women within three
(3) years from the effectivity of this Act.
D.1.b. STIPULATION AGAINST MARRIAGE
It shall be unlawful for an employer to:
(1) require as a condition of employment or
continuation of employment that a
woman employee shall not get married,
or
(2) stipulate expressly or tacitly that upon
getting married a woman employee
shall be deemed resigned or separated
or
(3) actually dismiss, discharge,
discriminate or otherwise prejudice a
woman employee merely by reason of
her marriage. [Art. 134, Labor Code]
[Duncan Assoc of Detailman – PTGWO v
Glaxo Wellcome, 2004]
UP LAW BOC
With particular regard to women, Republic Act
No. 9710 or the Magna Carta of Women
protects women against discrimination in all
matters relating to marriage and family
relations, including the right to choose freely a
spouse and to enter into marriage only with
their free and full consent. Weighed against
these safeguards, it becomes apparent that
Brent's (employer) condition is coercive,
oppressive and discriminatory. There is no
rhyme or reason for it. It forces Cadiz to marry
for economic reasons and deprives her of the
freedom to choose her status, which is a
privilege that inheres in her as an intangible
and inalienable right. While a marriage or no-
marriage qualification may be justified as a
"bona fide occupational qualification," Brent
must prove two factors necessitating its
imposition, viz: (1) that the employment
qualification is reasonably related to the
essential operation of the job involved; and (2)
that there is a factual basis for believing that
all or substantially all persons meeting the
qualification would be unable to properly
perform the duties of the job. Brent has not
shown the presence of neither of these factors.
Perforce, the Court cannot uphold the validity
of said condition [Capin-Cadiz vs. Brent
Hospital and Colleges, Inc., G.R. No. 187417
(2016)].
Bona fide occupational qualification exception
When the employer can prove that the
reasonable demands of the business require a
distinction based on marital status and there
is no better available or acceptable policy
which would better accomplish the business
purpose, an ER may discriminate against an
EE based in the identity of the EE’s spouse.
[Star Paper Corp. vs. Simbol, 2006]
The Court sustained the validity of employer
policy prohibiting an employee from having a
personal or marital relationship with an
employee of a competitor. The prohibition was
reasonable under the circumstances because
relationships of such nature might
compromise the interests of the company.
[Duncan Association of Detailmen vs. Glaxo
Wellcome, 2004]
LABOR STANDARDS LABOR LAW
D.1.c. PROHIBITED ACTS [Art. 135 (previously
Article 137)]
Note: Nightwork/ Exception (Art 130-131) – No
more nightwork prohibition under R.A. 10151
(An Act Allowing the Employment of Night
Workers, thereby Repealing Articles 130 and
131 of PD 442, as amended, otherwise known
as the Labor Code of the Philippines)
Art. 154. RA 10151. Coverage. - This chapter
shall apply 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 Secretary of Labor and
Employment, after consulting the workers'
representatives/labor organizations and
employers.
Night worker means any employed person
whose work requires performance of a
substantial number of hours of night work
which exceeds a specified limit. This limit
shall be fixed by the Secretary of Labor after
consulting the workers'
representatives/labor organizations and
employers.
Women Night Workers. - Measures shall be
taken to ensure that an alternative to night
work is available to women workers who
would otherwise be called upon to perform
such work:
(a) Before and after childbirth, for a period
of at least sixteen (16) weeks, which shall be
divided between the time before and after
childbirth;
(b) For additional periods, in respect of
winch a medical certificate IS produced
stating that said additional periods are
necessary for the health of the mother or
child:
(1) During pregnancy;
(2) During a specified time beyond the
period, after childbirth is fixed pursuant to
subparagraph (a) above, the length of
PAGE 74 OF 235
UP LAW BOC LABOR STANDARDS
which shall be determined by the DOLE
after consulting the labor organizations and
employers.
During the periods referred to in this article:
(i) A woman worker shall not be dismissed
or given notice of dismissal, except for just
or authorized causes provided for in this
Code that are not connected with
pregnancy, childbirth and childcare
responsibilities.
(ii) A woman worker shall not lose the
benefits regarding her status, seniority, and
access to promotion which may attach to
her regular night work position.
Pregnant women and nursing mothers may
be allowed to work at night only if a
competent physician, other than the
company physician, shall certify their fitness
to render night work, and specify, in the
case of pregnant employees, the period of
the pregnancy that they can safely work.
The measures referred to in this article may
include transfer to day work where this is
possible, the provision of social security
benefits or an extension of maternity leave.
The measures referred to in this article may
include transfer to day work where this is
possible, the provision of social security
benefits or an extension of maternity leave.
The provisions of this article shall not leave
the effect of reducing the protection and
benefits connected with maternity leave
under existing laws.[Article 158, RA 10151]
Discrimination [Art 133, RA 9710]
See D.1.a.
Stipulation against marriage [Art 134]
See D.1.b.
Discharge to prevent enjoyment of benefits
To deny any woman employee the benefits
provided for in this Chapter or to discharge any
woman employed by him for the purpose of
PAGE 75 OF 235
LABOR LAW
preventing her from enjoying any of the
benefits provided under this Code. [Art. 135 (1)]
Discharge on account of pregnancy
To discharge such woman on account of her
pregnancy, while on leave or in confinement
due to her pregnancy. [Art. 135 (2)]
Discharge on account of testimony
To discharge or refuse the admission of such
woman upon returning to her work for fear
that she may again be pregnant. [Art. 137 (3)]
It shall be unlawful for any employer: …to
discharge any woman or child or any other
employee for having filed a complaint or
having testified or being about to testify under
the Code [Book III, Rule XII, Sec 13(d), IRR]
Expulsion of Women faculty/ female student
due to pregnancy outside of marriage
Expulsion and non-readmission of women
faculty due to pregnancy outside of marriage
shall be outlawed. No school shall turn out or
refuse admission to a female student solely on
the account of her having contracted
pregnancy outside of marriage during her
term in school. [Sec. 13(c), RA 9710]
D.1.d. SEXUAL HARASSMENT
[RA 7877 - Anti-Sexual Harassment Act of 1995]
Forms of Sexual Harassment
(1) Employment or Work Related
(a) The sexual favor is made as a condition
(i) in the hiring or in the employment,
re-employment or continued
employment of said individual or
(ii) in granting said individual
favorable compensation, terms,
conditions, promotions, or
privileges, or
(iii) in the refusal to grant the sexual
favor results in limiting,
segregating or classifying the EE
which in any way would
discriminate, deprive or diminish
employment opportunities or
UP LAW BOC LABOR STANDARDS
otherwise adversely affect said
employee;
(b) The above acts would either:
(i) impair the employee’s rights or
privileges under existing labor
laws; or
(ii) result in an intimidating, hostile, or
offensive environment for the
employee.
(2) Education or Training environment. In
an education or training environment,
sexual harassment is committed:
(a) Against one who is under the care,
custody or supervision of the offender
(b) Against one whose education,
training, apprenticeship or tutorship
is entrusted to the offender;
(c) When the sexual favor is made a
condition to the giving of a passing
grade, or the granting of honors and
scholarships, or the payment of a
stipend, allowance or other benefits,
privileges, or considerations; or
(d) When the sexual advances result in an
intimidating, hostile or offensive
environment for the result, trainee or
apprentice.
Persons who may be liable
(1) Any employer, employee, manager,
supervisor, agent of the employer,
teacher, instructor, professor, coach,
trainer or any other person, regardless of
whether the demand, request for
requirement for submission is accepted
by the object of said act having authority,
influence or moral ascendancy over
another in a work or training or
education environment, who demands,
requests or otherwise requires any sexual
favor from another,
(2) Any person who directs or induces
another to commit any act of sexual
harassment as herein defined. OR
(3) Any person who cooperates in the
commission by another without which it
would NOT have been committed, shall
PAGE 76 OF 235
LABOR LAW
also be held liable under this Act [Sec. 3,
RA 7877]
Role of the employer or Head of Office
Sec. 4, RA 7877. The Employer or Head of Office
shall have the duty:
(1) to prevent the commission of such acts and
(2) to lay down the procedure for the
resolution, settlement or prosecution of
committed acts.
Sec. 5, RA 7877. He shall be solidarily liable for
damages:
(1) if he is informed of such acts by the
offended party and
(2) no immediate action is taken thereon.
Independent Action for Damages
Sec. 6, RA 7877. The victim of work, education
or training-related sexual harassment can
institute a separate and independent action
for damages and other affirmative relief.
Sanctions
Criminal: imprisonment of 1 month to mos. Or
fine of P10k to P20k or both
Prescription of such action is in 3 years.
Termination
As a managerial employee, petitioner is bound
by more exacting work ethics. When such
moral perversity is perpetuated against his
subordinate, he provides a justifiable ground
for his dismissal for lack of trust and
confidence. It is the right, nay the duty of every
employer to protect its employees from
oversexed superiors. [Sec. 7, RA 7877] [Libres
vs NLRC, 1999]
The gravamen of the offense in sexual
harassment is not the violation of the
employee's sexuality but the abuse of power
by the employer. Any employee, male or
female, may rightfully cry "foul" provided the
claim is well substantiated. Strictly speaking,
UP LAW BOC
there is no time period within which he or she
is expected to complain through the proper
channels. The time to do so may vary
depending upon the needs, circumstances,
and more importantly, the emotional
threshold of the employee.
Not many women are made of the stuff that
can endure the agony and trauma of a public,
even corporate, scandal. If petitioner-
corporation had not issued the third
memorandum that terminated the services of
private respondent, we could only speculate
how much longer she would keep her silence.
Perhaps, to private respondent's mind, for as
long as she could outwit her employer's ploys
she would continue on her job and consider
them as mere occupational hazards. [Phil.
Aelous Automotive United Corp. vs NLRC,
2000]
D.2. MINORS
Relevant Laws: RA 7610 (Special Protection of
Children Against Abuse, Exploitation and
Discrimination Act), RA 9231 (Special
Protection of Children Against Child Abuse,
Exploitation and Discrimination Act), Art.
137(a)
Constitutional basis
The State recognizes the vital role of the youth
in nation-building and shall promote and
protect their physical, moral, spiritual,
intellectual, and social well-being. It shall
inculcate in the youth patriotism and
nationalism, and encourage their involvement
in public and civic affairs. [Art II, Sec. 13 of the
1987 Constitution]
General Rule: Children below 15 shall NOT be
employed
Exception (Employment of Children )
Children below fifteen (15) years of age shall
not be employed except:
(1) When a child works directly under the sole
responsibility of his/her parents or legal
guardian and where only members of
LABOR STANDARDS LABOR LAW
his/her family are employed: Provided,
however, That his/her employment
neither endangers his/her life, safety,
health, and morals, nor impairs his/her
normal development: Provided, further,
That the parent or legal guardian shall
provide the said child with the
prescribed primary and/or secondary
education; or
(2) Where a child's employment or
participation in public entertainment or
information through cinema, theater,
radio, television or other forms of media
is essential: Provided, That the
employment contract is concluded by
the child's parents or legal guardian,
with the express agreement of the child
concerned, if possible, and the approval
of the Department of Labor and
Employment: Provided, further, That
the following requirements in all
instances are strictly complied with:
(a) The employer shall ensure the
protection, health, safety, morals
and normal development of the
child;
(b) The employer shall institute
measures to prevent the child's
exploitation or discrimination taking
into account the system and level of
remuneration, and the duration and
arrangement of working time; and
(c) The employer shall formulate and
implement, subject to the approval
and supervision of competent
authorities, a continuing program
for training and skills acquisition of
the child.
In the above-exceptional cases where any
such child may be employed, the employer
shall first secure, before engaging such child,
a work permit from the Department of Labor
and Employment which shall ensure
observance of the above requirements.
For purposes of this Article, the term "child"
shall apply to all persons under eighteen (18)
years of age.[Sec 2, RA 9231]
Children - refers to any person under 18 years
of age or those over but are unable to fully take
PAGE 77 OF 235
UP LAW BOC LABOR STANDARDS
care of themselves or protect themselves from
abuse, neglect, cruelty, exploitation or
discrimination because of a physical or mental
disability or condition. [Sec. 2, RA 7610]
Child labor - refers to any work or economic
activity performed by a child that subjects
him/her to any form of exploitation or is
harmful to his/her health and safety or
physical, mental or psychosocial development.
Working child - refers to any child engaged as
follows:
(1) when the child is below eighteen (18)
years of age, in work or economic activity
that is not child labor as defined in the
immediately preceding subparagraph;
and
(2) when the child is below fifteen (15) years
of age, 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 in public entertainment or
information. [Sec. 3, DO 65-04]
Exceptions
(1) Child works directly under the sole
responsibility of his parents or legal
guardian and where only members of
the employer’s family are employed,
provided:
(a) his employment does NOT
endanger his life, safety, health and
morals,
(b) nor impairs his normal
development, and
(c) the parent or legal guardian shall
provide the said minor child with the
prescribed primary and/or
secondary education; [Sec. 12 of RA
7610 as amended by RA 7658]
(2) child’s employment or participation in
public entertainment or information
through cinema, theater, radio or
television is essential, provided that [Sec.
12 of RA 7610 as amended by RA 7658]:
PAGE 78 OF 235
LABOR LAW
(a) employment does NOT involve ads
or commercials promoting alcohol,
tobacco and its by-products or
violence [Sec. 14, RA 7610]
(b) the employment contract is
concluded by the child’s parents or
guardian, and approved by DOLE
(c) The ER shall ensure the protection,
health, safety and morals of the
child
(d) The ER shall institute measures to
prevent the child’s exploitation or
discrimination taking into account
the system and level of
remuneration, and the duration and
arrangement of working time
(e) The ER shall formulate and
implement, subject to the approval
and supervision of competent
authorities, a continuing program
for training and skills acquisition of
the child. [Sec. 12 of RA 7610 as
amended by RA 7658]
Employment of Children from 15 to 18
Employment is allowed even without permit
but restricted to non-hazardous work.
Non-hazardous work shall mean any work or
activity in which the EE is not exposed to any
risk which constitutes an imminent danger to
his safety and health. [Sec. 3, Rule XII, Book III,
IRR of LC]
The Secretary of Labor shall from time to time
publish a list of hazardous work and activities
in which persons 18 years of age and below
cannot be employed [Sec. 3, Rule XII, Book III,
IRR of LC]
The following are HAZARDOUS workplaces:
(1) Nature of the work exposes the workers
to dangerous environmental elements,
contaminants or working conditions;
(2) construction work, logging, fire-fighting,
mining, quarrying, blasting, stevedoring,
dock work, deep sea fishing, and
mechanized farming;
UP LAW BOC LABOR STANDARDS LABOR LAW

(3) manufacture or handling of explosives physical strength or contortion, or

and other pyrotechnic products; which requires the manual transport
of heavy loads; or
(4) exposure to or use of heavy power-
driven machinery or equipment; (f) Is performed in an unhealthy
environment exposing the child to
(5) exposure to or use of power-driven tools
hazardous working conditions,
elements, substances, co-agents or
processes involving ionizing,
Worst Forms of Child Labor
radiation, fire, flammable
(1) All forms of slavery, as defined under the substances, noxious components
"Anti-trafficking in Persons Act of and the like, or to extreme
2003", or practices similar to slavery temperatures, noise levels, or
such as sale and trafficking of children, vibrations; or
debt bondage and serfdom and forced
(g) Is performed under particularly
or compulsory labor, including
difficult conditions; or
recruitment of children for use in armed
conflict; or (h) Exposes the child to biological
agents such as bacteria, fungi,
(2) The use, procuring, offering or exposing
viruses, protozoans, nematodes and
of a child for prostitution, for the
other parasites; or
production of pornography or for
pornographic performances; or (i) Involves the manufacture or
handling of explosives and other
(3) The use, procuring or offering of a child
pyrotechnic products.
for illegal or illicit activities, including
the production and trafficking of Working Hours of a Child
dangerous drugs and volatile
Quantity
substances prohibited under existing
laws; or Age Bracket Daily Max Weekly Max
(4) Work which, by its nature or the Below 15 y 4 hrs 20 hrs
circumstances in which it is carried out,
is hazardous or likely to be harmful to 15 to below
8hrs. 40 hrs
the health, safety or morals of children, 18
such that it:
(a) Debases, degrades or demeans the Night work prohibition
intrinsic worth and dignity of a child
as a human being; or Age Bracket Prohibited Hours

(b) Exposes the child to physical, 8 pm to 6 am (10

Below 15 y
emotional or sexual abuse, or is hrs.)
found to be highly stressful 10 pm to 6 am (8
psychologically or may prejudice 15 to below 18
hrs.)
morals; or
(c) Is performed underground,
underwater or at dangerous D.3. KASAMBAHAY
heights; or EMPLOYMENT OF HOUSEHELPERS
(d) Involves the use of dangerous Relevant Law: RA 10361 (Batas Kasambahay
machinery, equipment and tools or Domestic Worker’s Act)
such as power-driven or explosive
power-actuated tools; or Note: RA 10361 has expressly repealed
Chapter III, “Employment of Househelpers”,
(e) Exposes the child to physical danger Title III of Book III of the Labor Code
such as, but not limited to the
dangerous feats of balancing,
PAGE 79 OF 235
UP LAW BOC LABOR STANDARDS
Domestic work - This refers to work performed
in or for a household or households. [Sec 4(C).
RA 10361]
Domestic worker or “Kasambahay” - Refers to
any person engaged in domestic work within
an employment relationship such as, but not
limited to, the following: general househelp,
nursemaid or “yaya”, cook, gardener, or
laundry person. [Sec 4(D). RA 10361]
The term domestic worker or “kasambahay”
excludes any person who performs domestic
work only occasionally or sporadically and not
on an occupational basis. [Sec.4(D), RA 10361]
Rights and Privileges
(a) Minimum wage
The minimum wage of domestic workers shall
not be less than the following:
i. P2,500 a month for those employed
in NCR
ii. P2,000 a month for those employed
in chartered cities and first class
municipalities
iii. P1,500 a month for those employed
in other municipalities
Within one year from the effectivity of the Act,
and periodically thereafter, the Regional
Tripartite and Productivity Wage Boards shall
review, and if proper, determine and adjust the
minimum wage rates of domestic workers.
[Sec. 24, RA 10361]
SECTION 1. Subparagraphs (1), (2) and (3),
Article 143 of Presidential Decree No. 442,
as amended, otherwise known as the
"Labor Code of the Philippines" are hereby
amended to read as follows:
ART. 143. Minimum wage. — (a)
Househelpers shall be paid the following
minimum wage rates;
(1) Eight hundred pesos (P800.00) a
month for househelpers in Manila,
Quezon, Pasay and Caloocan cities
and municipalities of Makati, San
Juan, Mandaluyong, Muntinlupa,
Navotas, Malabon, Parañaque, Las
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LABOR LAW
Piñas, Pasig, Marikina, Valenzuela,
Taguig and Pateros in Metro Manila
and in highly urbanized cities;
(6) Six hundred fifty pesos (P650.00) a
month for those in other chartered
cities and first class municipalities;
and
(7) Five hundred fifty pesos (P550.00) a
month for those in other
municipalities; Provided, that the
employees shall review the
employment contracts of their
househelpers every three (3) years
with the end in view of improving the
terms and conditions thereof.
Provided, further, that those
househelpers who are receiving at
least One thousand pesos
(P1,000.00) shall be covered by the
Social Security System (SSS) and be
entitled to all the benefits provided
thereunder."
(b) Standard of Treatment
The employer or any member of the household
shall not subject a domestic worker or
“kasambahay” to any kind of abuse nor inflict
any form of physical violence or harassment or
any act tending to degrade the dignity of a
domestic worker. [Sec. 5, RA 10361]
(c) Board, Lodging and Medical Attendance
The employer shall provide for the basic
necessities of the domestic worker to include
at least three (3) adequate meals a day and
humane sleeping arrangements that ensure
safety and shall provide appropriate rest and
assistance to the domestic worker in case of
illnesses and injuries sustained during service
without loss of benefits. [Sec. 6, RA 10361]
(d) Privacy
Respect for the privacy of the domestic worker
shall be guaranteed at all times and shall
extend to all forms of communication and
personal effects [Sec. 7, RA 10361]
UP LAW BOC LABOR STANDARDS
(e) Access to Outside Communication
The employer shall grant the domestic worker
access to outside communication during free
time: Provided, That in case of emergency,
access to communication shall be granted
even during work time. [Sec. 8, RA 10361]
(f) Education and Training
The employer shall afford the domestic worker
the opportunity to finish basic education and
may allow access to alternative learning
systems and, as far as practicable, higher
education or technical and vocational training.
[Sec. 9, RA 10361]
(g) Social and Other Benefits
A domestic worker who has rendered at least
one (1) month of service shall be covered by the
Social Security System (SSS), the Philippine
Health Insurance Corporation (PhilHealth),
and the Home Development Mutual Fund or
Pag-IBIG, and shall be entitled to all the
benefits in accordance with the pertinent
provisions provided by law.
(h) Leave Benefits
A domestic worker who has rendered at least
one (1) year of service shall be entitled to an
annual service incentive leave of five (5) days
with pay [Sec. 29, RA 10361]
Pre-Employment Requirement
Prior to the execution of the employment
contract, the employer may require the
following from the domestic worker:
(1) Medical certificate or a health certificate
issued by a local government health
officer;
(2) Barangay and police clearance;
(3) National Bureau of Investigation (NBI)
clearance; and
(4) Duly authenticated birth certificate or if
not available, any other document
showing the age of the domestic worker
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LABOR LAW
such as voter’s identification card,
baptismal record or passport.
However, Section 12(a), (b), (c) and (d) shall be
standard requirements when the employment
of the domestic worker is facilitated through
the PEA.
The cost of the foregoing shall be borne by the
prospective employer or agency, as the case
may be. [Sec. 12, RA 10361]
Time and Manner of Payment: Payment of
wages shall be made on time directly to the
domestic worker in cash at least once a month
and unless allowed by the domestic worker
through a written consent, employer shall
make no deductions from the wages other
than that which is mandated by law. [Sec. 25,
RA 10361]
Right against assignment to non-household
work at a wage rate lower than that mandated
for agricultural or non-agricultural enterprises
depending on the case. [Sec. 22, RA 10361]
Employment Age of Domestic Workers:
Unlawful to employ any person below fifteen
(15) years of age as a domestic worker [Sec. 16,
RA 10361]
Persons between 15-18 years old should only
be employed in non-hazardous work. [DO 4-
99 Sec. 4]
Daily Rest Period: Aggregate of eight (8) hours
per day. [Sec. 20, RA 10361]
Employment Certification: ER shall give the
househelper a written statement of the nature
and duration of the service and his or her work
performance as househelper upon severance.
[Sec. 35, RA 10361]
Termination
(1) Initiated by the domestic worker
The domestic worker may terminate the
employment relationship at any time before
the expiration of the employment contract for
any of the following causes:
UP LAW BOC LABOR STANDARDS LABOR LAW

(a) Verbal or emotional abuse of the (g) Other causes analogous to the
domestic worker by the employer or any foregoing. [Sec. 34, RA 10361]
member of the household;
(b) Inhuman treatment including physical
Unjust dismissal
abuse of the domestic worker by the
employer or any member of the Neither the domestic worker nor the employer
household; may terminate the contract before the
expiration of the term except for grounds
(c) Commission of a crime or offense
provided in Sec. 33 and 34 of RA 10361.
against the domestic worker by the
employer or any member of the If the domestic worker is unjustly dismissed,
household; the domestic worker shall be paid the
compensation already earned plus the
(d) Violation by the employer of the terms
equivalent of 15 days work by way of indemnity.
and conditions of the employment
contract and other standards set forth
under this law;
Leaving without justifiable reason by the
(e) Any disease prejudicial to the health of domestic worker
the domestic worker, the employer, or
(a) any unpaid salary due not exceeding the
member/s of the household; and
equivalent 15 days work shall be
(f) Other causes analogous to the forfeited AND
foregoing. [Sec. 33, RA 10361]
(b) the employer may recover from the
domestic worker the costs incurred
related to the deployment expenses, if
(2) Initiated by the employer
any: Provided, that the service has been
An employer may terminate the services of the terminated within 6 months from the
domestic worker at any time before the domestic worker’s employment.
expiration of the contract, for any of the
following causes:
Notice to end the working relationship
(a) Misconduct or willful disobedience by
the domestic worker of the lawful order If the duration of the domestic service is not
of the employer in connection with the determined either in stipulation or by the
former’s work; nature of the service, the employer or the
domestic worker may give notice to end the
(b) Gross or habitual neglect or inefficiency
working relationship five (5) days before the
by the domestic worker in the
intended termination of the service.
performance of duties;
The domestic worker and the employer may
(c) Fraud or willful breach of the trust
mutually agree upon written notice to pre-
reposed by the employer on the
terminate the contract of employment to end
domestic worker;
the employment relationship. [Sec. 32, RA
(d) Commission of a crime or offense by the 10361]
domestic worker against the person of
the employer or any immediate member
of the employer’s family; D.4. HOMEWORKERS
(e) Violation by the domestic worker of the Note: DO 5, DOLE (February 4, 1992), is now
terms and conditions of the employment Rule XIV, Book III of the IRR.
contract and other standards set forth
under this law;
Industrial homework
(f) Any disease prejudicial to the health of
the domestic worker, the employer, or (1) Is a system of production under which
member/s of the household; and work for an employer or contractor is
carried out by a homeworker at his/her
PAGE 82 OF 235
UP LAW BOC LABOR STANDARDS
home. Materials may or may not be
furnished by the employer or contractor.
(2) Decentralized form of production, where
there is ordinarily very little supervision
or regulation of methods of work. [Sec.
2(a), Rule XIV, Book III, IRR]
Industrial Homeworker - a worker who is
engaged in industrial homework
Employer means any natural or artificial
person who
(1) Acts as a contractor or subcontractor –
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 employer’s direction;
OR
(2) Sells any goods, articles, or materials to
be processed or fabricated in or about a
home and then rebuys them after. [Art.
153, LC]
Note: Sec 2(d), Rule XIV, Book III is
substantially similar to the above.
Rights and benefits accorded homeworkers
(1) Right to form, join or assist
organizations [Sec 3, Rule XIV, Book III,
IRR]
(2) Right to acquire legal personality and
the rights and privileges granted by law
to legitimate labor organizations upon
issuance of the certification of
registration [Sec 4, Rule XIV, Book III,
IRR]
(3) Immediate payment upon employer’s
receipt of finished goods or articles [Sec
6, Rule XIV, Book III, IRR]
(4) SSS, MEDICARE and ECC premium
contributions shall be deducted from
their pay and shall be remitted by
ER/contractor/subcontractor to the SSS
[Sec 6, Rule XIV, Book III, IRR]
Liability of Employer
(1) Employer may require homeworker to
PAGE 83 OF 235
LABOR LAW
redo work improperly executed without
additional pay [Sec 9a, Rule XIV, Book
III, IRR]
(2) Employer need not pay homeworker for
any work done on goods or articles not
returned due to homeworker’s fault [Sec
9b, Rule XIV, Book III, IRR]
(3) If subcontractor/contractor fails to pay
homeworker, employer is jointly and
severally liable with the former to the
homeworker for his/her wage [Sec 11,
Rule XIV, Book III, IRR]
(4) Employer shall assist the homeworkers
in the maintenance of basic safe and
healthful working conditions at the
homeworkers’ place of work. [Sec 11,
Rule XIV, Book III, IRR of LC]
Regional Office shall provide technical
assistance to registered homeworkers’
organizations [Sec 14, Rule XIV, Book III, IRR
of LC]
Prohibited Homework
(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.
[Sec 13, Rule XIV, Book III, IRR]
Deductions
No deduction from the homeworker’s earnings
for the value of materials lost, destroyed or
damaged unless:
(1) Homeworker is clearly shown to be
responsible for loss or damage
(2) Reasonable opportunity to be heard
(3) Amount of deduction is fair and
reasonable, and does not exceed actual
loss or damage
(4) Deduction does not exceed 20% of
homeworker’s weekly earnings [Sec. 8,
Rule XIV, Book III, IRR]
D.5. NIGHT WORKERS
UP LAW BOC LABOR STANDARDS
Night worker
Any employed person whose work requires
performance of a substantial number of hours
of night work which exceed a specified limit.
This limit shall be fixed by the Sec of Labor
after consulting the workers’
representatives/labor organizations and
employers. [Art. 154, LC as amended by RA
10151]
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 7 consecutive
hours of work. [Book III, Rule XV, Sec. 2, IRR,
through DO 119-12]
Health Assessment
At the worker’s request, they shall have the
right to undergo a health assessment without
charge and to receive advice on how to reduce
or avoid health problems associated with their
work:
(a) Before taking up an assignment as a
night worker;
(b) At regular intervals during such an
assignment;
(c) If they experience health problems
during such an assignment;
With the exception of a finding of unfitness for
night work, the findings of such assessments
shall be confidential and shall NOT be used to
their detriment, subject, however, to
applicable company policies. [Art. 155, LC as
amended by RA 10151; Book III, Rule XV, Sec. 3,
IRR, through DO 119-12]
Mandatory Facilities
Mandatory facilities shall be made available
for workers performing night work, which
include the following:
(a) Suitable first-aid and emergency
facilities
(b) Lactation station in required companies
pursuant to RA 10028
(c) Separate toilet facilities for men &
women
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LABOR LAW
(d) Facility for eating w/ potable drinking
water; AND
(e) Facilities for transportation and/or
properly ventilated temporary sleeping
or resting quarters, separate for male
and female workers, shall be provided
except where any of the ff.
circumstances is present:
i. There is an existing company
guideline, practice or policy, CBA, or
any similar agreement providing for
an equivalent or superior benefit; or
ii. Start or end of the night work does
NOT fall within 12 mn - 5 am; or
iii. Workplace is located in an area that
is accessible 24 hours to public
transportation; or
iv. Number of employees does NOT
exceed a specified number as may
be provided for by the SOLE in
subsequent issuances [Art. 156, LC
as amended by RA 10151; Book III,
Rule XV, Sec. 4, IRR, through DO 119-
12]
Transfer
If night worker is unfit for night work due to
health reasons as certified by competent
physician, s/he shall be:
(1) Transferred in good faith to a job for
which they are fit to work whenever
practicable, which must be similar and
equivalent position;
(2) If transfer is not practicable, or workers
are unable to render night work for a
continuous period of not less than 6
months upon certification of a
competent public health authority, they
shall be granted the same benefits as
other workers who are unable to work
due to illness.
(3) If workers are certified as temporarily
unfit to render night work for a period of
less than 6 months, they shall be given
the same protection against dismissal or
notice of dismissal as other workers who
are prevented from working for health
reasons. [Art. 157, LC as amended by RA
UP LAW BOC LABOR STANDARDS LABOR LAW

10151; Book III, Rule XV, Sec. 5, IRR, A woman employee shall NOT be dismissed
through DO 119-12] for reasons of pregnancy, childbirth and
childcare responsibilities as defined under this
Rule. She shall NOT lose the benefits
Women Night Workers regarding her employment status, seniority,
and access to promotion which may attach to
Employers shall ensure that measures shall be
her regular night work position. [Book III, Rule
taken to ensure that an alternative to night
XV, Sec. 8, IRR, through DO 119-12]
work for pregnant and nursing employees who
would otherwise be called upon to perform
such work. Such measures may include:
See Night Shift Differential under p.71
(1) Transfer to day work – As far as
practicable, pregnant or nursing
employees shall be assigned to day work,
before and after childbirth, for a period
of at least sixteen (16) weeks, which shall
be divided between the time before and
after childbirth;
Medical certificate issued by competent
physician (OB/Gyne/Pedia) is necessary
for the grant of:
(a) additional periods of assignment to
day work during pregnancy or after
childbirth, provided that such shall
not be more than 4 weeks or for a
longer period as may be agreed
upon by employer and worker;
(b) extension of maternity leave; and
(c) clearance to render night work.
(2) Provision of social security benefits - in
accordance with provisions of Act No
8282 (Social Security Act of 1997) and
other existing company policy or
collective bargaining agreement.
(3) Extension of maternity leave – where
transfer to day work is not possible, but
requires recommendation by competent
physician; without pay or using earned
leave credits, if any [Art. 158, LC, as
amended by RA 10151; Book III, Rule XV,
Sec. 6, IRR, through DO 119-12]

Protection against dismissal and loss of

benefits attached to employment status,
seniority, and access to promotion
Where no alternative work can be provided to
a woman employee who is not in a position to
render night work, she shall be allowed to go
on leave or on extended maternity leave, using
her earned leave credits.
PAGE 85 OF 235
UP LAW BOC LABOR STANDARDS
IV. POST-
EMPLOYMENT
A. EMPLOYER-EMPLOYEE
RELATIONSHIP
Art. 97, LC:
As used in this Title:
(a) "Person" means an individual,
partnership, association, corporation,
business trust, legal representatives, or any
organized group of persons.
(b) "Employer" includes any person acting
directly or indirectly in the interest of an
employer in relation to an employee and
shall include the government and all its
branches, subdivisions and
instrumentalities, all government-owned or
controlled corporations and institutions, as
well as nonprofit private institutions, or
organizations.
(c) "Employee" includes any individual
employed by an employer.
Art. 173, LC
As used in this Title, unless the context
indicates otherwise:
(f) "Employer" means any person, natural or
juridical, employing the services of the
employee.
(g) "Employee" means any person
compulsorily covered by the GSIS under
Commonwealth Act Numbered One
hundred eighty-six, as amended, including
the members of the Armed Forces of the
Philippines, and any person employed as
casual, emergency, temporary, substitute
or contractual, or any person compulsorily
covered by the SSS under Republic Act
Numbered Eleven hundred sixty-one, as
amended.
(h) "Person" means any individual,
partnership, firm, association, trust,
corporation or legal representative thereof.
PAGE 86 OF 235
LABOR LAW
Art. 219, LC
(e) "Employer" includes any person acting in
the interest of an employer, directly or
indirectly. The term shall not include any
labor organization or any of its officers or
agents except when acting as employer.
(f) "Employee" includes any person in the
employ of an employer. The term shall not
be limited to the employees of a particular
employer, unless the Code so explicitly
states. It shall include any individual whose
work has ceased as a result of or in
connection with any current labor dispute or
because of any unfair labor practice if he
has not obtained any other substantially
equivalent and regular employment.
The existence or absence of ER-EE
relationship is a question of law and a
question of fact, each in its defined sense.
The existence of an employer-employee
relation is a question of law and being such, it
cannot be made the subject of agreement
[Tabas et.al. v. California Manufacturing Co., et.
al., G.R. No. 80680, (1989)]. The
characterization of the law prevails over that
in the contract. In this sense, the existence of
an EE-ER relationship is a matter of law.
The existence of an employer-employee
relationship is ultimately a question of fact
[SSS v. CA and Ayalde, G.R. No. 100388,
(2000)]. The conclusion that an EE-ER
relationship depends upon the facts of each
case. In this sense, it is a question of fact.
A.1. TESTS TO DETERMINE EMPLOYER-
EMPLOYEE (ER-EE) RELATIONSHIP
A.1.A. Four-Fold Test
(a) Selection and engagement of the
employee;
(b) Payment of wages;
(c) Power of dismissal; and
(d) Employer’s power to control the
employee’s conduct with respect to the
means and methods by which the work
is to be accomplished [Brotherhood
Labor Unity Movement of the Philippines
et. al. v. Zamora, G.R. No. 48645, (1987)]
UP LAW BOC LABOR STANDARDS
The most important element is the employer’s
control of the employee’s conduct, not only as
to the result of the work to be done, but also
as to the means and methods to accomplish it.
[Lirio v. Genovia, G.R. No. 169757, (2011)].
The control test calls merely for the “existence”
of the right to control and not the “actual
exercise” of the right. [Zanotte Shoes v. NLRC,
G.R. No. 100665, (1995)].
Not every form of control will have the effect of
establishing ER-EE relationship. The line
should be drawn between:
(1) Rules that merely serve as guidelines
towards the achievement of mutually
desired results without dictating the
means or methods to be employed in
attaining it. These aim only to promote
the result. In such case, NO EE-ER
relationship exists.
(2) Rules that control or fix the
methodology and bind or restrict the
party hired to the use of such means.
These address both the result and the
means used to achieve it and hence, EE-
ER relationship exists. [Insular Life
Assurance Co, LTD v. NLRC, G.R. No.
84484, (1989)].
A.1.B. Economic Dependence Test
Two-tiered approach.
(1) First Tier: Control Test (refer to the Four-
Fold Test)
(2) Second Tier: The underlying economic
realities of the activity or relationship.
[Sevilla v. Court of Appeals, G.R. Nos. L-
41182-3, (1988)].
The economic realities prevailing within the
activity or between the parties are examined,
taking into consideration the totality of
circumstances surrounding the true nature of
the relationship between the parties.
The benchmark of economic reality in
analyzing possible employment relationships
for purposes of applying the Labor Code ought
to be the economic dependence of the worker
on his employer.
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LABOR LAW
The standard of “economic dependence” is
whether the worker is dependent on the
alleged employer for his continued
employment in that line of business. [Orozco v.
CA, G.R. No. 155207, (2008)].
Evidence of employee status
No particular form of evidence is required to
prove the existence of an employer-employee
relationship. Any competent and relevant
evidence to prove the relationship may be
admitted. For, if only documentary evidence
would be required to show that relationship,
no scheming employer would ever be brought
before the bar of justice, as no employer would
wish to come out with any trace of the illegality
he has authored considering that it should
take much weightier proof to invalidate a
written instrument. [Tenazas, et al., v. R.
Villegas Taxi Transport, G.R. No. 192998,
(2014)].
The onus probandi rests on the employer to
prove that its dismissal was for a valid cause.
However, before a case for illegal dismissal
can prosper, an employer-employee
relationship must first be established. It is
incumbent upon the employee to prove the
employer-employee relationship by
substantial evidence. [Javier v. Fly Ace
Corporation, G.R. No. 192558, (2012)].
Piercing the corporate veil
In Sarona vs. NLRC [GR No. 185280 (2012)],
the doctrine of piercing the corporate veil was
applied. It involved the illegal dismissal of
Sarona, a security guard who first worked at
Sceptre but was subsequently assigned to
Royale, where he was illegally dismissed. In
the computation of his separation pay, Sarona
prayed that the corporate veil of Royale be
pierced as it was a mere continuation of
Sceptre; hence, his separation pay should be
computed from the time he was hired by
Sceptre. The SC explained that the corporate
veil may be pierced when the corporation is
just an alter ego of a person or of another
corporation. The doctrine applies only in three
(3) basic areas: 1) defeat of public convenience
as when the corporate fiction is used as a
vehicle for the evasion of an existing
obligation; 2) fraud cases or when the
UP LAW BOC LABOR STANDARDS
corporate entity is used to justify a wrong,
protect fraud, or defend a crime; or 3) alter ego
cases, where a corporation is merely a farce
since it is a mere alter ego or business conduit
of a person, or where the corporation is so
organized and controlled and its affairs are so
conducted as to make it merely an
instrumentality, agency, conduit or adjunct of
another corporation. Because the
circumstances indicated that Spectre and
Royale were one and the same (same office,
same officers, same person exercising control
and supervision over EEs of both companies),
and that Sarona’s transfer to Royale was done
in bad faith, the SC pierced the corporate veil
and ruled in his favor.
A.2. KINDS OF EMPLOYMENT
A.2.A. Probationary
Art. 296 [281], LC
Probationary employment shall not exceed
6 months from the date the employee
started working, unless it is covered by an
apprenticeship agreement stipulating a
longer period. The services of an employee
who has been engaged on a probationary
basis may be terminated for a just cause or
when he fails to qualify as a regular
employee in accordance with reasonable
standards made known by the employer to
the employee at the time of his
engagement. An employee who is allowed
to work after a probationary period shall be
considered a regular employee.
Book VI, Rule 1, Sec. 6(d), IRR: In all cases of
probationary employment, the employer
shall make known to the employee the
standards under which he will qualify as
regular employee at the time of his
engagement. Where no standards are made
known to the employee at the time of
engagement, he shall be deemed a regular
employee.
Definition
A probationary employee is one who is made
to go on a trial period by an employer during
which the employer determines whether or not
he is qualified for permanent employment,
based on reasonable standards made known
PAGE 88 OF 235
LABOR LAW
to him at the time of engagement. [Robinson’s
Galleria et al. v. Ranchez, G.R. No. 177937,
(2011)]
Duration [Art. 296(281)]
General Rule: Probationary employment shall
not exceed six (6) months from the date the
employee started working.
Exceptions:
(1) When it is covered by an apprenticeship
agreement stipulating a longer period
(Art. 296[281], LC);
(2) When the parties to the employment
contract agree otherwise, such as when
established by company policy or
required by the nature of the work
performed by the employee [San Miguel
Corp, v. del Rosario, G.R. Nos. 168194 &
168603, (2005), citing Buiser v.
Leogardo, G.R. No. L-63316, (1984)]; or
(3) When it involves the 3 year probationary
period of teachers [Mercado v. AMA
Computer College, G.R. No. 183572,
(2010)]
Purposes
(1) Observance Period – for employer to
determine if employee is qualified and
for employee to demonstrate to the ER
his skills
(2) Restrictive - As long as the termination
was made before the expiration of the
six-month probationary period, the
employer has a right to sever the
employer-employee relationship
Indeed, the employer has the right or is at
liberty to choose as to who will be hired and
who will be declined. It is within the exercise of
this right to select his employees that the
employer may set or fix a probationary period
within which the latter may test and observe
the conduct of the former before hiring him
permanently. [Grand Motor Parts Corp. v.
MOLE, G.R. No. L-58958, (1984)]
Standards to qualify as a regular employee
UP LAW BOC
Requirements:
(a) The employer must communicate the
regularization standards to the
probationary employee; and
(b) The employer must make such
communication at the time of the
probationary employee’s engagement.
If the employer fails to comply with either, the
employee is deemed as a regular and not a
probationary employee.
An employer is deemed to have made known
the standards that would qualify a
probationary employee to be a regular
employee when it has exerted reasonable
efforts to apprise the employee of what he is
expected to do or accomplish during the trial
period of probation. This goes without saying
that the employee is sufficiently made aware
of his probationary status as well as the length
of time of the probation.
The exception to the foregoing is when the job
is self-descriptive in nature, for instance, in the
case of maids, cooks, drivers, or messengers.
[Abbott Laboratories Phil. et al. v. Alcaraz, G.R.
No. 192571, (2013)]
In all cases of probationary employment, the
employer shall make known to the employee
the standards under which he will qualify as a
regular employee at the time of his
engagement. Where no standards are made
known to the employee at that time, he shall
be deemed a regular employee. Conversely,
an employer is deemed to substantially
comply with the rule on notification of
standards if he apprises the employee that he
will be subjected to a performance evaluation
on a particular date after his hiring. [Alcira v.
NLRC, G.R. No. 149859, (2004)]
Regular status after probation
When the bank renewed the contract after the
lapse of the six-month probationary period,
the employees thereby became regular
employees. No employer is allowed to
determine indefinitely the fitness of its
employees. [Bernardo v. NLRC, G.R. No.
122917, (1999)]
Double probation
LABOR STANDARDS LABOR LAW
There is no basis for subjecting an employee to
a new probationary or temporary employment
where he had already become a regular
employee when he was absorbed by a sister
company. [A Prime Security Services, Inc. v.
NLRC, G.R. No. 107023, (2000)]
Absorbed employees not probationary
The private respondents could not be
considered probationary employees because
they were already well-trained in their
respective functions. As stressed by the
Solicitor General, while private respondents
were still with the CCAS they were already
clerks. Respondent Gelig had been a clerk for
CCAS for more than ten (10) years, while
respondent Quijano had slightly less than ten
(10) years of service. They were, therefore, not
novices in their jobs but experienced workers.
[Cebu Stevedoring Co., Inc. v. Regional Director,
G.R. No. L-54285, (1988)]
Private school teachers
Questions respecting a private school
teacher’s entitlement to security of tenure are
governed by the Manual of Regulations for
Private Schools and not the Labor Code.
[Aklan College v. Guarino, G.R. No. 152949,
(2007)]
The legal requisites, therefore, for acquisition
by a teacher of permanent employment, of
security of tenure are:
(a) A full time teacher;
(b) Must have rendered three consecutive
years of service; and
(c) Service must have been satisfactory. [La
Salette of Santiago v. NLRC, G.R. No.
82918, (1991)]
Mere completion of the three-year probation,
even with an above-average performance,
does not guarantee that the employee will
automatically acquire a permanent
employment status. The probationer can only
qualify upon fulfillment of the reasonable
standards set for permanent employment as a
member of the teaching personnel. [Herrera-
Manaois v. St. Scholastica’s College, G.R. No.
188914,(2013)]
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These standards should be made known to the
teachers on probationary status at the start of
their probationary period, or at the very least
under the circumstances of the present case,
at the start of the semester or the trimester
during which the probationary standards are
to be applied. Of critical importance in
invoking a failure to meet the probationary
standards, is that the school should show – as
a matter of due process – how these standards
have been applied. [Colegio del Santisimo
Rosario v. Rojo, G.R. No. 170388, (2013)]
Termination
A probationary employee enjoys only a
temporary employment status. This means
that he is terminable at any time, permanent
employment not having been attained in the
meantime. The employer could well decide he
no longer needed the probationary
employee’s services or his performance fell
short of expectations, etc. As long as the
termination was made before the termination
of the six-month probationary period, the
employer was well within his rights to sever
the employer-employee relationship. A
contrary interpretation would defect the clear
meaning of the term “probationary.” [De la
Cruz, Jr. v. NLRC, G.R. No. 145417. (2003)]
A probationary employee can only be
terminated for:
(1) Just causes;
(2) Authorized causes; or
(3) Failure to qualify as a regular employee
in accordance with reasonable
standards made known by the employer
to the employee at the time of
engagement. [Robinson’s Galleria et al. v
Ranchez, G.R. No. 177937, Jan. 19, (2011)]
The probationary employee is entitled to
substantial and procedural due process before
termination.
Limits to termination
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LABOR LAW
(1) It must be exercised in accordance with
the specific requirements of the contract
(2) If a particular time is prescribed, the
termination must be within such time
and if formal notice is required, then
that form must be used;
(3) The employer’s dissatisfaction must be
real and in good faith, not feigned so as
to circumvent the contract or the law;
(4) There must be no unlawful
discrimination in the dismissal. [Manila
Hotel Corporation v. NLRC, G.R. No.
53453, (1986)]
In order to invoke “failure to meet the
probationary standards” as a justification for
dismissal, the employer must show how these
standards have been applied to the subject
employee. [Univac Development, Inc. v.
Soriano, G.R. No. 182072, (2013)].
A.2.B. Regular
Art. 295 [280], LC
The provisions of written agreement to the
contrary notwithstanding and regardless of
the oral agreement of the parties, an
employment shall be deemed to be regular
where the employee has been engaged to
perform activities which are usually
necessary or desirable in the usual business
or trade of the employer, except where the
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 or where the work or service to be
performed is seasonal in nature and the
employment is for the duration of the
season.
An employment shall be deemed to be
casual if it is not covered by the preceding
paragraph: Provided, That any employee
who has rendered at least one year of
service, whether such service is continuous
or broken, shall be considered a regular
employee with respect to the activity in
which he is employed and his employment
shall continue while such activity exists.
UP LAW BOC
Art. 296 [281], Last sentence, LC: An
employee who is allowed to work after a
probationary period shall be considered a
regular employee.
Regular employment is not synonymous with
permanent employment, because there is no
such thing as a permanent employment. Any
employee may be terminated for just cause.
A regular employee is one who is engaged to
perform activities which are necessary and
desirable in the usual business or trade of the
employer as against those which are
undertaken for a specific project or are
seasonal.
Art 295 provides two kinds of regular
employees:
(1) Those engaged to perform activities
which are necessary or desirable in the
usual business or trade of the employer;
and
(2) casual employees who have rendered at
least 1 year of service, whether
continuous or broken, with respect to
the activity in which they are employed.
[Romares v. NLRC, G.R. No. 122327.
(1998)]
Primary standard to determine regular
employment: reasonable connection rule
The primary standard to determine a regular
employment is the reasonable connection
between the particular activity performed by
the employee in relation to the business or
trade of the employer. The test is whether the
former is usually necessary or desirable in the
usual business or trade of the employer. If the
employee has been performing the job for at
least one year, even if the performance is not
continuous or merely intermittent, the law
deems the repeated and continuing need for
its performance as sufficient evidence of the
necessity, if not indispensability of that activity
to the business of the employer. Hence, the
employment is also considered regular, but
only with respect to such activity and while
such activity exists. [Forever Richons Trading
Corp. v. Molina, G.R. No. 206061, (2013)]
LABOR STANDARDS LABOR LAW
When applicable
Art. 295 is not the yardstick for determining
the existence of an employment relationship
because it merely distinguishes between two
kinds of employees, i.e., regular employees
and casual employees, for purposes of
determining the right of an employee to
certain benefits, to join or form a union, or to
security of tenure; it does not apply where the
existence of an employment relationship is in
dispute. [Atok Big Wedge Co., Inc. v. Gison, G.R.
No. 169510, (2011)]
Hiring for an extended period
Where the employment of project employees
is extended long after the supposed project
has been finished, the employees are removed
from the scope of project employees and
considered regular employees. [Audion
Electric Co., Inc. v. NLRC, G.R. No. 106648,
(1999)]
While length of time may not be a controlling
test for project employment, it can be a strong
factor in determining whether the employee
was hired for a specific undertaking or in fact
tasked to perform functions which are vital,
necessary and indispensable to the usual
business or trade of the employer. [Tomas Lao
Const. v. NLRC, G.R. No. 116781. (1997)]
Repeated renewal of contract
While the Court has recognized the validity of
contractual stipulations as to the duration of
employment, this cannot apply where the
contract-to-contract arrangement was but an
artifice to prevent her from acquiring security
of tenure and to frustrate constitutional
decrees. [Beta Electric Corp. v. NLRC, G.R. No.
86408, (1990)]
Length of time involved
Length of time is not controlling, merely
serves as a badge of regular employment.
[Maraguinot v. NLRC, G.R. No. 120969.
(1998)]
A.2.C. Project employment
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Art. 295 (previously Art 280), 1st par, LC: The
provisions of written agreement to the
contrary notwithstanding and regardless of
the oral agreement of the parties, an
employment shall be deemed to be regular
where the employee has been engaged to
perform activities which are usually
necessary or desirable in the usual business
or trade of the employer, except where the
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 or where the work or service to be
performed is seasonal in nature and the
employment is for the duration of the
season.
A project employee is one who is hired for
carrying out a separate job, distinct from the
other undertakings of the company, the scope
and duration of which has been determined
and made known to the employees at the time
of employment. [Hanjin Heavy Industries &
Const. Co. v. Ibañez, G.R. No. 170181, (2008)]
Whether or not the project has a direct relation
to the business of the employer is not
important, BUT:
(1) Employee must be informed of the
nature and duration of project
(2) Project and principal business of ER are
two separate things
(3) No attempt to deny security of tenure to
the worker
Rationale for project employment
If a project has already been completed, it
would be unjust to require the employer to
maintain them in the payroll while they are
doing absolutely nothing except waiting until
another project is begun, if at all. In effect,
these stand-by workers would be enjoying the
status of privileged retainers, collecting
payment for work not done, to be disbursed by
the employer from profits not earned. [De
Ocampo, Jr. v. NLRC, G.R. No. 81077, (1990)]
Two Kinds of Project Employee
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LABOR LAW
(1) For a particular job or undertaking that
is WITHIN the regular or usual business
of the employer company, but which is
distinct and separate, and identifiable
as such, from the other undertakings of
the company (i.e. construction)
(2) For a particular job or undertaking that
is NOT within the regular business of the
corporation. Such a job or undertaking
must also be identifiably separate and
distinct from the ordinary or regular
business operations of the employer
[Villa v. NLRC, G.R. No. 117043, (1988)]
Test of project employment
The litmus test to determine whether an
individual is a project employee lies in setting
a fixed period of employment involving a
specific undertaking the completion or
termination of which has been determined at
the time of the particular employee's
engagement.
The decisive factor in the term employment is
the day certain agreed upon by the parties for
the commencement and termination of their
employment relationship, a day certain being
understood to be that which must necessarily
come, although it may not be known when.
[Caasi v. Kanlungan Centre Foundation, Inc.,
G.R. No. 199769, (2013)]
The repeated and successive rehiring of
project employees do not qualify them as
regular employees, as length of service is not
the controlling determinant of the
employment tenure of a project employee, but
whether the employment has been fixed for a
specific project or undertaking, its completion
has been determined at the time of the
engagement of the employee. [William Uy
Construction Corp. v. Trinidad, G.R. No. 183250,
(2010)]
Indicators of project employment
(1) The duration of the specific/identified
undertaking for which the worker is
engaged is reasonably determinable;
UP LAW BOC LABOR STANDARDS
(2) Such duration, as well as the specific
work/service to be performed, is defined
in an employment;
(3) agreement and is made clear to the
employee at the time of the hiring;
(4) The work/service to be performed by the
employee is in connection with the
particular project/undertaking for which
he is engaged;
(5) The employee, while not employed and
awaiting engagement, is free to offer his
services to any other employer;
(6) The termination of his employment in
the particular project/undertaking is
reported to the DOLE Regional Office
having jurisdiction over the workplace
following the date of his separation from
work, using the prescribed form on
employees’ terminations
/dismissals/suspensions;
(7) An undertaking in the employment
contract by the employer to pay
completion bonus to the project
employee as practiced by most
construction companies. [Samson v.
NLRC, G.R. No. 11366, (1996)].
Length of time not applicable in construction
industry
Generally, length of service provides a fair
yardstick for determining when an employee
initially hired on a temporary basis becomes a
permanent one, entitled to the security and
benefits of regularization. But this standard
will not be fair, if applied to the construction
industry, simply because construction firms
cannot guarantee work and funding for its
payrolls beyond the life of each project. And
getting projects is not a matter of
course. [William Uy Construction Corp. v.
Trinidad, G.R. No. 183250, (2010)]
See also: Policy Instructions No. 20 of 1997
and D.O. 19 of 1993
Work pool employee
A project employee or a member of a work
pool may acquire the status of a regular
employee when the following concur:
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LABOR LAW
(1) There is a continuous rehiring of project
employees even after cessation of a
project; and
(2) The tasks performed by the alleged
“project employee” are vital, necessary,
and indispensable to the usual business
or trade of the employer. However, the
length of time during which the
employee was continuously rehired is
not controlling, but merely serves as a
badge of regular employment.
A work pool may exist although the workers in
the pool do not receive salaries and are free to
seek other employment during temporary
breaks in the business, provided, that the
worker shall be available when called to report
for a project. Although primarily applicable to
regular seasonal workers, this set-up can
likewise be applied to project workers insofar
as the effect of temporary cessation of work is
concerned. [Maraguinot v. NLRC, G.R. No.
120969. (1998)]
Members of a work pool from which a
construction company draws its project
employees, if considered employees of the
construction company while in the work pool,
are non-project employees or employees for
an indefinite period. If they are employed in a
particular project, the completion of the
project or any phase thereof will not mean
severance of the employer-employee
relationship. [J. & D.O. Aguilar Corp. v. NLRC,
G.R. No. 116352, (1997)]
Rule on reportorial requirement
A report of termination to the nearest public
employment office every time their
employment was terminated due to
completion of each construction
project. Failure of the employer to file
termination reports after every project
completion proves that the employees are not
project employees. [Pasos v. Philippine
National Construction Corp., G.R. No. 192394,
(2013)]
Repeated renewal of contract
When an employer renews a contract of
employment after the lapse of the six-month
probationary period, the employee thereby
becomes a regular employee. No employer is
UP LAW BOC
allowed to determine indefinitely the fitness of
its employees. [Malicdem v. Marulas Industrial
Corp., G.R. No. 204406, (2014)]
A.2.D. Seasonal
Seasonal employees are those whose work or
services to be performed are seasonal in
nature, employment is for the duration of the
season.
There is no continuing need for the worker.
“Regular Seasonal” Employees After One
Season
Seasonal workers who are called to work from
time to time and are temporarily laid off
during off-season are not separated from
service in said period, but are merely
considered on leave until reemployed
The nature of their relationship . . . is such that
during off season they are temporarily laid off
but during summer season they are re-
employed, or when their services may be
needed. They are not strictly speaking
separated from the service but are merely
considered as on leave of absence without pay
until they are re-employed. [Philippine
Tobacco Flue-Curing &Redrying Corp. v. NLRC,
G.R. No. 127395, (1998)]
A.2.E. Casual
Art. 295 [280], 2nd par. LC
An employment shall be deemed to be
casual if it is not covered by the preceding
paragraph: Provided, That any employee
who has rendered at least one year of
service, whether such service is continuous
or broken, shall be considered a regular
employee with respect to the activity in
which he is employed and his employment
shall continue while such activity exists.
Book VI, Rule 1, Sec. 5 (b), IRR:
Casual employment. There is casual
employment where an employee is engaged
to perform a job, work or service which is
LABOR STANDARDS LABOR LAW
merely incidental to the business of the
employer, and such job, work or service is for a
definite period made known to the employee
at the time of engagement: Provided, That any
employee who has rendered at least one year
of service, whether such service is continuous
or not, shall be considered a regular employee
with respect to the activity in which he is
employed and his employment shall continue
while such activity exists.
A casual employee is engaged to perform a job,
work or service which is merely incidental to
the business of the employer, and such job,
work or service is for a definite period made
known to the employee at the time of
engagement.
Someone who is not a regular, project or
seasonal employee.
Requirements to become regular employee:
(1) One (1) year service, continuous or
broken with respect to activity employed
(2) Employment shall continue while such
activity exists
Nature of work
What determines regularity or casualness is
not the employment contract, written or
otherwise, but the nature of the job. If the job
is usually necessary or desirable to the main
business of the employer, then employment is
regular. [A. M. Oreta and Co., Inc. v. NLRC, G.R.
No. 74004, (1989)]
One-year service
As held in Philippine Bank of Communications
v. NLRC, a temporary or casual employee,
under Article 281 of the Labor Code, becomes
regular after service of one year, unless he has
been contracted for a specific project. [Tabas v.
California Marketing Co., Inc., G.R. No. L-
80680, (1989)].
A.2.F. Fixed-Term
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Art. 295 [280] has no application to instances
where a fixed period of employment was
agreed upon knowingly and voluntarily 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 where 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 over the latter.
[Brent School v. Zamora, G.R. No. L-48494,
(1990)]
Conditions for the validity of fixed contract
agreement between employer and employee
(1) Fixed period of employment was
knowingly and voluntarily agreed upon
by the parties without any force, duress,
or improper pressure or any other
circumstances vitiating his consent; or
(2) The employer and the employee dealt
with each other on more or less equal
terms with no moral dominance
exercised by the former or the latter.
Project employment and Fixed-term
employment distinguished
A project employee is assigned to carry out a
specific project or undertaking, the duration
and scope of which were specified at the time
the employee is engaged for the project
The duration of a fixed-term employment
agreed upon by the parties may be any day
certain, which is understood to be "that which
must necessarily come although it may not be
known when." The decisive determinant in
fixed-term employment is not the activity that
the employee is called upon to perform but the
day certain agreed upon by the parties for the
commencement and termination of the
employment relationship. [GMA Network, Inc.
v. Pabriga, G.R. No. 176419, (2013)]
No implied renewal of employment contract
It is a settled rule that seafarers are considered
contractual employees. Their employment is
governed by the contracts they sign everytime
they are rehired and their employment is
LABOR STANDARDS LABOR LAW
terminated when the contract expires. Their
employment is contractually fixed for a certain
period of time. Thus, when a contract ends,
the employment is deemed automatically
terminated, there being no mutually-agreed
renewal or extension of the expired contract.
[Unica v. Anscor Swire Ship Management Corp.,
G.R. No. 184318, (2014)]
As long as the Brent School v. Zamora
guidelines are satisfied, the court will
recognize the validity of the fixed-term
contract, especially if they were informed of
that their engagement was for a specific
period. The Brent doctrine is only applicable in
a few special cases wherein the employer and
employee are on more or less in equal footing
in entering into the contract [Fuji Television
Network Inc v. Espiritu, G.R. No. 204944-45,
(2014)].
A.3. SUB-CONTRACTING VS LABOR-ONLY
CONTRACTING
Articles 106 – 109
Art. 106, LC: Contractor or subcontractor.
Whenever an employer enters into a
contract with another person for the
performance of the former’s work, the
employees of the contractor and of the
latter’s subcontractor, if any, shall be paid
in accordance with the provisions of this
Code.
In the event that the contractor or
subcontractor fails to pay the wages of his
employees in accordance with this Code,
the employer shall be jointly and severally
liable with his contractor or subcontractor
to such employees to the extent of the work
performed under the contract, in the same
manner and extent that he is liable to
employees directly employed by him.
The Secretary of Labor and Employment
may, by appropriate regulations, restrict or
prohibit the contracting-out of labor to
protect the rights of workers established
under this Code. In so prohibiting or
restricting, he may make appropriate
distinctions between labor-only contracting
and job contracting as well as
differentiations within these types of
contracting and determine who among the
parties involved shall be considered the
PAGE 95 OF 235
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employer for purposes of this Code, to
prevent any violation or circumvention of
any provision of this Code.
There is "labor-only" contracting where the
person supplying workers to an employer
does not have substantial capital or
investment in the form of tools, equipment,
machineries, work premises, among others,
and the workers recruited and placed by
such person are performing activities which
are directly related to the principal business
of such employer. In such cases, the person
or intermediary shall be considered merely
as an agent of the employer who shall be
responsible to the workers in the same
manner and extent as if the latter were
directly employed by him.
Art. 107, LC: Indirect employer. The
provisions of the immediately preceding
article shall likewise apply to any person,
partnership, association or corporation
which, not being an employer, contracts
with an independent contractor for the
performance of any work, task, job or
project.
Art. 108, LC: Posting of bond. An employer or
indirect employer may require the
contractor or subcontractor to furnish a
bond equal to the cost of labor under
contract, on condition that the bond will
answer for the wages due the employees
should the contractor or subcontractor, as
the case may be, fail to pay the same.
Art. 109, LC: Solidary liability. The provisions
of existing laws to the contrary
notwithstanding, every employer or indirect
employer shall be held responsible with his
contractor or subcontractor for any violation
of any provision of this Code. For purposes
of determining the extent of their civil
liability under this Chapter, they shall be
considered as direct employers.
D.O. No. 18-A-11: Rules Implementing Articles
106 to 109 of the LC, as amended
Coverage
LABOR STANDARDS LABOR LAW
This shall apply to:
(1) all parties of contracting and
subcontracting arrangements where
ER-EE relationships exist
(2) cooperatives engaging in contracting or
subcontracting arrangements
Contractors and subcontractors referred to in
these rules are prohibited from engaging in
recruitment and placement activities as
defined in Art. 13(b) of the LC whether for local
or overseas employment. [Sec. 2]
Contracting or subcontracting refers to an
arrangement whereby a principal agrees to
put out or farm out with a contractor the
performance or completion of a specific job,
work or service within a definite or
predetermined period, regardless of whether
such job, work or service is to be performed or
completed within or outside the premises of
the principal.
Service agreement refers to the contract
between the principal and contractor
containing the terms and conditions
governing the performance or completion of a
specific job, work or service being farmed out
for a definite or predetermined period.
Cabo refers to a person or group of persons or
a labor groups 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.
Legitimate contracting or subcontracting
Contracting or subcontracting shall be
legitimate if all the following circumstances
occur:
(1) The contractor must be registered in
accordance with these rules and carries
a distinct and independent business
(2) The contractor undertakes to perform
the job, work or service on its own
responsibility, according to its own
PAGE 96 OF 235
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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; and
(4) The Service Agreement ensures
compliance with all the rights and
benefits under Labor laws.
Rights of contractor’s employees
All contractor’s employees, whether deployed
or assigned as reliever, seasonal, week-ender,
temporary, or promo jobbers, shall be entitled
to all the rights and privileges as provided for
in the LC, as amended.
Security of tenure of contractor’s employees
It is understood that all contractor’s
employees enjoy security of tenure regardless
of whether the contract of employment is co-
terminus with the service agreement, or for a
specific job, work, or service, or phase thereof.
Effect of termination of employment
[Sec. 13, D.O. 18-A-11]
Cause Effect
Prior to the
expiration of the Governed by Art. 284 –
Service 292 of LC
Agreement
The right of the contractor
employee to unpaid wages
and other unpaid benefits
Prior to
including unremitted legal
expiration of the
mandatory contributions,
Service
e.g., SSS, PhilHealth, Pag-
Agreement and
ibig, ECC, shall be borne
not due to
by the party at fault,
authorized
without prejudice to the
causes
solidary liability of the
parties to the Service
Agreement.
Due to Employee may opt for
expiration of payment of separation
LABOR STANDARDS LABOR LAW
Service benefits as may be
Agreement, or provided by law or the
from the Service Agreement,
completion of without prejudice to
the phase of the his/her entitlement to the
job, work or completion bonuses or
service for which other emoluments,
the employee is including retirement
engaged benefits whenever
applicable
Prohibition against labor-only contracting
Labor-only contracting, a prohibited act, is an
arrangement where the contractor or
subcontractor merely recruits, supplies or
places workers to perform a job, work or
service for a principal. [Polyfoam-RGC
International Corp. v. Concepcion, G.R. No.
172349, (2012)]
ELEMENTS OF LABOR-ONLY CONTRACTING:
(1) The contractor does not have
substantial capital or investments in the
form of tools, equipment, machineries,
work premises, among others, and
(2) The employees recruited and places 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
(3) The contractor does not exercise the right
to control the performance of the work
of the employee.
Substantial capital – refers to paid-up capital
stocks/shares of at least P3,000,000 in the
case of corporations, partnerships and
cooperatives; in case of single proprietorship,
a net worth of at least P3,000,000.
Other prohibitions
(1) Contracting out of jobs, works or
services when not done in good faith and
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not justified by the exigencies of the
business such as the following:
(a) Contracting out of jobs, works or
services when the same results in
the termination or reduction of
regular EEs and reduction of work
hours or reduction or splitting of the
bargaining unit.
(b) Contracting out of work with a Cabo
(c) Taking undue advantage of the
economic situation or lack of
bargaining strength of the
contractor’s EEs, 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.
(d) Contracting out of a job, work or
service through an in-house agency.
(e) 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.
(f) 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 LC, as amended.
(g) Repeated hiring of EEs under an
employment contract of short
duration or under a Service
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LABOR LAW
Agreement of short duration with
the same or different contractors,
which circumvents the LC provisions
on Security of Tenure.
(h) Requiring EEs 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 EE at the time
of the engagements.
(i) Refusal to provide a copy of the
Service Agreement and the
employment contracts between the
contractor and the EEs deployed to
work in the bargaining unit of the
principal’s certified bargaining
agent to the sole and exclusive
bargaining agents.
(j) Engaging or maintaining by the
principal of subcontracted EEs in
excess of those provided in the
applicable CBA or as set by the
Industry Tripartite Council.
(2) Contracting out of jobs, works, or
services analogous to the above when
not done in good faith and not justified
by the exigencies of the business. [Sec. 7,
D.O. 18-A-11]
Mandatory registration
It shall be mandatory for all persons or entities,
including cooperative, acting as contractors,
to register with the Regional Office of the
DOLE where it principally operates.
Failure to register shall give rise to the
presumption that the contractor is engaged in
labor-only contracting.
Accordingly, the registration system
governing contracting arrangements and
implemented by the Regional Offices of the
DOLE is hereby established, with the Bureau
of Working Conditions (BWC) as the central
registry. [Sec. 14, D.O. 18-A-11]
UP LAW BOC LABOR STANDARDS
TRILATERAL RELATIONSHIP IN JOB
CONTRACTING
Principal
Contractor's
Contractor er-ee
Employee
There are three parties involved:
(1) Principal refers to any employer,
whether a person or entity, including
government agencies and GOCCs,
who/which puts out or farms out a job,
service or work to a contractor.
(2) Contractor refers to any person or entity,
including a cooperative, engaged in a
legitimate contracting or
subcontracting arrangement providing
either services, skilled worker,
temporary workers or a combination of
services to a principal under a Service
Agreement.
(3) Contractor’s employee includes one
employed by a contractor to perform or
complete a job, work, or service
pursuant to a Service Agreement with a
principal
It shall also refer to regular employees of
the contractor whose functions are not
dependent on the performance or
completion of a specific job, work or
service within a definite period of time i.e.
administrative staff.
Relationships that exist in a legitimate
contracting or subcontracting:
(1) An employer-employee relationship
between the contractor and the
employees it engaged to perform the
specific job, work or service being
contracted; and
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LABOR LAW
(2) A contractual relationship between the
principal and the contractor as governed
by the provisions of the Civil Code. [Sec.
5, par. 1, D.O. 18-A-11]
The law recognizes and resolves this situation
in favor of employees in order to protect their
rights and interests from the coercive acts of
the employer. In fact, the employee who is
constructively dismissed may be allowed to
keep on coming to work. [McMer Corp., Inc. v.
NLRC, G.R. No. 193421, (2014)]
SOLIDARY LIABILITY
i. Indirect/Direct Employer
There exists a solidary liability on the part of
the principal and the contractor for purposes
of enforcing the provisions of the LC and other
social legislation to the extent of the work
performed under employment contract.
The principal shall be deemed a direct
employer of the contractor’s employee in
cases where there is a finding by a competent
authority of labor-only contracting, or
commission of prohibited activities provided in
Section 7 or a violation of either Sections 8 or
9.
II. Contractor solidarily liable with principal
A finding by competent authority of labor-only
contracting shall render the principal jointly
and severally liable with the 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.
A finding of commission of any of the
prohibited activities in Sec. 7, or violation of
either Secs. 8 or 9 hereof shall render the
principal the direct employer of the employees
of the contractor or subcontractor, pursuant to
Article 109 of the Labor Code, as amended.
(Sec. 27, D.O 18-A-11)
Department Circular No. 01-12
Applicability of D.O. 18-A-11 to BPO
DO 18-A speaks of a trilateral relationship that
characterizes the covered contracting/sub-
contracting arrangement. Thus, vendor-
UP LAW BOC LABOR STANDARDS
vendee relationship for entire business
processes covered by the applicable
provisions of the Civil Code on Contracts is
excluded.
DO 18-A contemplates generic or focused
singular activity in one contract between the
principal and the contractor (for example,
janitorial, security, merchandising, specific
production work) and does not contemplate
information technology-enabled services
involving an entire process (for example, BPO,
KPO, legal process outsourcing, hardware
and/or software support, medical
transcription, animation services, back office
operations/support). These companies
engaged in BPOs may hire employees in
accordance with applicable laws, and
maintain these EEs based on business
requirements, which may or may not be for
different clients of the BPOs at different
periods of the EE’s employment.
Applicability of D.O. 18-A-11 to the
Construction Industry
Licensing and the exercise of regulatory
powers over the construction industry is
lodged with PCAB which is under the
Construction Industry Authority of the
Philippines and not with the DOLE or any of its
regional offices.
Thus, the DOLE, through its regional offices
shall not require contractors licensed by PCAB
in the Construction Industry to register under
DO 18-A. 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.
EFFECTS OF LABOR-ONLY CONTRACTING
Employees become regular employees
Where an entity is declared to be a labor-only
contractor, the employees supplied by said
contractor to the principal employer become
regular employees of the latter. Having gained
regular status, the employees are entitled to
security of tenure and can only be dismissed
for just or authorized causes and after they
PAGE 100 OF 235
LABOR LAW
had been afforded due process. [Norkis
Trading v. Buenavista, G.R. No. 182018. (2012)]
B. TERMINATION FROM EMPLOYMENT
Coverage
General rule: All establishments [Art. 293, LC]
[previously Art 278]
Exception: Government, and its political
subdivisions, including GOCCs without
original charter. [Book VI, Rule 1, Sec. 1. IRR]
Security of Tenure
Art. 294 [279], LC
Security of Tenure. In case of regular
employment, the employer shall not
terminate the services of an employee
except for a just cause or when authorized
by this Tile. An employee who is unjustly
dismissed from work shall be entitled to
reinstatement without loss of seniority
rights and other privileges and to his full
backwages, inclusive of allowances, and to
his other benefits or their monetary
equivalent computed from the time his
compensation was withheld from him up to
the time of his actual reinstatement.
Nature of Right/Rationale
It is a constitutionally protected right (Art. XIII
Sec. 3, 1987 Constitution); it cannot be blotted
out by an employment contract.
Termination of employment is not anymore a
mere cessation or severance of contractual
relationship but an economic phenomenon
affecting members of the family. This is the
reason why under the broad principles of
social justice the dismissal of employees is
adequately protected by the laws of the state.
[Alhambra Industries, Inc. v. NLRC, G.R. No.
106771 (1994)]
Management Prerogatives and Security of
Tenure
An employer may not be compelled to
continue in its employ a person whose
continuance in the service would patently be
UP LAW BOC LABOR STANDARDS
inimical to its interests. [Baguio Central
University v. Gallente, G.R. No. 188267 (2013)]
In dismissal cases, the Court must consider a
balancing between the employees’ tenurial
rights and the employer’s management
prerogative. [Imasen Phil. Manufacturing Corp.
v. Alcon & Papa, GR 194884 (2014)]
Management prerogative must be exercised in
good faith and with due regard to the rights of
the workers in the spirit of fairness and with
justice in mind. [Philbag Industrial
Manufacturing Corp. v. Philbag Workers Union-
Lakas at Gabay ng Manggagawang
Nagkakaisa, G.R. No. 182486 (2012)]
Requisites for the validity of management
prerogative affecting security of tenure
(a) Exercised in good faith for the
advancement of the Employer's interest,
and
(b) Not for the purpose of defeating or
circumventing the rights of the
Employees under special laws or under
valid agreements. [San Miguel Brewery
Sales Force Union v. Ople, G.R. No. 53515
(1989)]
Guide in disposition of labor disputes
Bare and vague allegations as to the manner
of service and the circumstances surrounding
the same would not suffice. A mere copy of the
notice of termination allegedly sent by
respondent to petitioner, without proof of
receipt, or in the very least, actual service
thereof upon petitioner, does not constitute
substantial evidence.
There may be cases where the circumstances
warrant favoring labor over the interests of
management but never should the scale be so
tilted if the result is an injustice to the
employer. Justitia nemini neganda est (Justice
is to be denied to none). [Mansion Printing
Center v. Bitara, Jr., GR 168120. (2012)]
Procedural vis-à-vis substantive issues
In labor cases, substantive issues must be
addressed more than anything else, and so,
the Court may forego the matter of procedural
PAGE 101 OF 235
LABOR LAW
infirmities. [Ang v. San Joaquin, Jr., G.R. No.
185549 (2013)]
Employer’s Burden of Proof
Art. 292 (b), 3rd sentence, LC
The burden of proving the termination was
for a valid or authorized cause shall rest on
the employer.
It is the employer’s burden to prove that the
dismissal was for a just or authorized cause.
[Temic Automotive (Phils.), Inc. v. Cantos, G.R.
No. 200729 (2014)]
Unsubstantiated accusations or baseless
conclusions of the employer are insufficient
legal justifications to dismiss an employee.
The unflinching rule in illegal dismissal cases
is that the employer bears the burden of
proof. [Garza v. Coca-Cola Bottlers Philippines,
Inc., G.R. No. 180972 (2014)]
In illegal dismissal cases, the burden of proof
is upon the employer to show that the
employee's termination from service is for a
just and valid cause. The employer's case
succeeds or fails on the strength of its
evidence and not the weakness of that
adduced by the employee, in keeping with the
principle that the scales of justice should be
tilted in favor of the latter in case of doubt in
the evidence presented by them. [Functional,
Inc. v. Granfil, G.R. No. 176377 (2011)]
Employee must first establish the fact of
dismissal
Before the employer must bear the burden of
proving that the dismissal was legal, the
employee must first establish by substantial
evidence the fact of his dismissal from service.
If there is no dismissal, then there can be no
question as to the legality or illegality thereof.
[MZR Industries v. Colambot, G.R. No. 179001
(2013)]
In an illegal dismissal case, the onus
probandi rests on the employer to prove that
its dismissal of an employee was for a valid
cause. However, before a case for illegal
dismissal can prosper, an employer-employee
UP LAW BOC LABOR STANDARDS
relationship must first be established by the
employee [Javier v. Fly Ace Corp., G.R. No.
192558 (2012)]
Measure of Penalty
Not every case of insubordination or willful
disobedience by an employee reasonably
deserves the penalty of dismissal. The penalty
to be imposed on an erring employee must be
commensurate with the gravity of his offense.
[Joel Montallana v. La Consolacion College
Manila, G.R. No. 208890 (2014)]
While an employer enjoys a wide latitude of
discretion in the promulgation of policies,
rules and regulations on work-related
activities of the employees, those directives,
however, must always be fair and reasonable,
and the corresponding penalties, when
prescribed, must be commensurate to the
offense involved and to the degree of the
infraction. [Moreno v. San Sebastian College-
Recoletos, G.R. No. 175283 (2008)]
B.1. TERMINATION OF EMPLOYMENT BY
EMPLOYEE
1. Resignation
2. Bona fide Suspension of
Operations/Performance of Military or
Civic Duty
3. Forced Resignation
4. Resignation for non-payment of wages,
Constructive Dismissal
B.1.a. RESIGNATION vs CONSTRUCTIVE
DISMISSAL
RESIGNATION
Art. 300 (previously Art. 285), LC:
PAGE 102 OF 235
LABOR LAW
Termination by Employee. (a) An employee may
terminate without just cause the employer-
employee relationship by serving a written
notice on the employer at least one (1) month in
advance. The employer upon whom no such
notice was served may hold the employee liable
for damages
(b) An employee may put an end to the
relationship without serving any notice on the
employer for any of the following requirements:
1. Serious insult by the employer or his
representative on the honor and person of
the employee;
2. Inhuman and unbearable treatment
accorded the employee by the employer or
his representative;
3. Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the
immediate members of his family; and
4. Other causes analogous to any of the
foregoing.
General Rule: Written notice to resign
submitted one (1) month in advance
Exception: No notice required for any of the
following:
(1) Serious insult by the employer or his
representative on the honor and person
of the employee;
(2) Inhuman and unbearable treatment
accorded the employee by the employer
or his representative;
(3) Commission of a crime or offense by the
employer or his representative against
the person of the employee or any of the
immediate members of his family; and
(4) Other causes analogous to any of the
foregoing.
Resignation is the voluntary act of an
employee who finds himself in a situation
where he believes that personal reasons
cannot be sacrificed in favor of the exigency of
the service, such that he has no other choice
but to disassociate himself from his
employment. [Cervantes v. PAL Maritime Corp.,
G.R. No. 175209, (2013)]
UP LAW BOC
To constitute a resignation, it must be
unconditional and with the intent to operate
as such. There must be an intention to
relinquish a portion of the term of office
accompanied by an act of relinquishment.
[Azcor Manufacturing Inc. v. NLRC, G.R. No.
117963, (1999)]
“Well-entrenched is the rule that resignation
is inconsistent with the filing of a complaint for
illegal dismissal.” [Blue Angel Manpower and
Security Services Inc. v Court of Appeals, G.R.
No. 161196 (2008)]
The rule requiring an employee to stay or
complete the 30-day period prior to the
effectivity of his resignation becomes
discretionary on the part of management as
an employee who intends to resign may be
allowed a shorter period before his resignation
becomes effective. [Hechanova Bugay Vilchez
Lawyers v. Matorre, G.R. No. 198261 (2013)]
CONSTRUCTIVE DISMISSAL
Constructive dismissal is cessation of work
because continued employment is rendered
impossible, unreasonable or unlikely; when
there is a demotion in rank or diminution in
pay or both; or when a clear discrimination,
insensibility, or disdain by an employer
becomes unbearable to the employee.
The test of constructive dismissal is whether a
reasonable person in the employee’s position
would have felt compelled to give up his
position under the circumstances. t is an act
amounting to dismissal but made to appear as
if it were not. Constructive dismissal is,
therefore, a dismissal in disguise. As such, the
law recognizes and resolves this situation in
favor of employees in order to protect their
rights and interests from the coercive acts of
the employer. In fact, the employee who is
constructively dismissed may be allowed to
keep on coming to work. [McMer Corp., Inc. v.
NLRC, G.R. No. 193421 (2014)]
Performance of Military or Civic Duty
Art 301, LC
LABOR STANDARDS LABOR LAW
When Employment Not Deemed Terminated: The
bona fide suspension of the operation of a
business or undertaking for a period not
exceeding six (6) months, or the fulfillment by
the employee of a military or civic duty shall not
terminate employment. In all such cases the
employer shall reinstate the employee to his
former position without loss of seniority rights if
he indicates his desire to resume his work not
later than one (1) month from the resumption of
operations of his employer or from his relief
from the military or civic duty.
Sec 12, Rule 1, Book VI, IRR
Omnibus Rules, Book VI, Rule 1, Sec. 12.
Suspension of relationship. — The employer-
employee relationship shall be deemed
suspended in case of suspension of operation
of the business or undertaking of the employer
for a period not exceeding six (6) months,
unless the suspension is for the purpose of
defeating the rights of the employees under
the Code, and in case of mandatory fulfillment
by the employee of a military or civic duty. The
payment of wages of the employee as well as
the grant of other benefits and privileges while
he is on a military or civic duty shall be subject
to special laws and decrees and to the
applicable individual or collective bargaining
agreement and voluntary employer practice or
policy.
Forced Resignation
Mere allegations of threat or force do not
constitute evidence to support a finding of
forced resignation. In order for intimidation to
vitiate consent, the following requisites must
concur: (1) that the intimidation caused the
consent to be given; (2) that the threatened
act be unjust or unlawful; (3) that the threat be
real or serious, there being evident
disproportion between the evil and the
resistance which all men can offer, leading to
the choice of doing the act which is forced on
the person to do as the lesser evil; and (4) that
it produces a well-grounded fear from the fact
that the person from whom it comes has the
necessary means or ability to inflict the
threatened injury to his person or property.
PAGE 103 OF 235
UP LAW BOC LABOR STANDARDS LABOR LAW

[Ma. Socorro Mandapat v. Add Force Personnel, Employer’s right to dismiss vis-à-vis
G.R. No. 180285 (2010)] employee’s right to security of tenure
The managerial prerogative to transfer
personnel must be exercised without grave
B.2. TERMINATION BY EMPLOYER
abuse of discretion, bearing in mind the basic
B.2.a. Just Causes elements of justice and fair play. Having the
right should not be confused with the manner
1. Serious Misconduct or Willful
in which that right is exercised. Thus, it cannot
Disboedience (Insubordination)
be used as a subterfuge by the employer to rid
2. Gross & Habitual Neglect Of Duties himself of an undesirable worker. In particular,
3. Loss Of Trust & Confidence the employer must be able to show that the
transfer is not unreasonable, inconvenient or
4. Commission Of A Crime prejudicial to the employee; nor does it involve
5. Analogous Cases a demotion in rank or a diminution of his
salaries, privileges and other benefits.
Nowhere in the law providing for the just and
Art. 297 (Previously Art 282), LC authorized causes of termination of
Termination by Employer. An employer may employment is there any direct or indirect
terminate an employment for any of the reference to filing a legitimate complaint for
following causes: money claims against the employer as a valid
ground for termination
(a) Serious misconduct or willful
disobedience by the employee of the The right of employers to shape their own work
lawful orders of his employer or force is recognize; however, this management
representative in connection with his prerogative must not curtail the basic right of
work; employees to security of tenure. There must be
a valid and lawful reason for terminating the
(b) Gross and habitual neglect by the employment of a worker. Otherwise, it is
employee of his duties; illegal and would be dealt with by the courts
(c) Fraud or willful breach by the employee accordingly. [Alert Security and Investigation
of the trust reposed in him by his Agency, Inc. v. Pasawilan, G.R. No. 182397
employer or duly authorized (2011)]
representative;
(d) Commission of a crime or offense by the B.2.A.1. Serious Misconduct
employee against the person of his
employer or any immediate member of Elements:
his family or his duly authorized a) There must be misconduct;
representatives; and
b) The misconduct must be of such grave
(e) Other causes analogous to the and aggravated character;
foregoing.
c) It must relate to the performance of the
employee’s duties; and
Basis d) There must be showing that the
As a measure of self-protection against acts employee becomes unfit to continue
inimical to its interest, a company has the right working for the employer. [Sec. 5.2. (a),
to dismiss its erring employees. An employer DO 147-15]
cannot be compelled to continue employing Misconduct refers to the improper or wrong
an employee guilty of acts inimical to the conduct that transgresses some established
employer's interest, justifying loss of and definite rule of action, a forbidden act, a
confidence in him. [Yabut v. Meralco, G.R. No. dereliction of duty, willful in character, and
190436 (2012)] implies wrongful intent and not mere error in
judgment. But misconduct or improper
PAGE 104 OF 235
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behavior, to be a just cause for termination of
employment, must: (a) be serious; (b) relate to
the performance of the employee’s duties; and
(c) show that the employee has become unfit
to continue working for the employer.
[Northwest Airlines, Inc, v. Del Rosario, G.R. No.
157633 (2014)]
Accusatory and inflammatory language used
by an employee to the employer or superior
can be a ground for dismissal or termination.
[Nissan Motors Phils. Inc. v. Angelo, G.R. No.
164181 (2011)]
B.2.A.2. Willful Disobedience (Insubordination)
Elements:
a) There must be disobedience or
insubordination;
b) The disobedience or insubordination
must be willful or intentional
characterized by a wrongful and
perverse attitude;
c) The order violated must be reasonable,
lawful, and made known to the
employee [Mirant Philippines Corp v.
Sario, G.R. No. 197598 (2012)]; and
e) The order must pertain to the duties
which he has been engaged to
discharge. [Sec. 5.2. (b), DO 147-15]
For willful disobedience to be a valid cause for
dismissal, these two elements must concur: (1)
the employee’s assailed conduct must have
been willful, that is, characterized by a
wrongful and perverse attitude; and (2) the
order violated must have been reasonable,
lawful, made known to the employee, and
must pertain to the duties which he had been
engaged to discharge. [The Coffee Bean and
Tea Leaf Philippines, Inc. and Chu v Arenas,
G.R. No. 208908 (2015)]
B.2.A.3. Gross and Habitual Neglect of Duties
Elements:
(a) There must be neglect of duty; and
LABOR STANDARDS LABOR LAW
(b) The negligence must be both gross and
habitual in character. [Sec. 5.2. (c), DO
147-15]
Gross negligence has been defined as the
want or absence of or failure to exercise slight
care or diligence, or the entire absence of care.
It evinces a thoughtless disregard of
consequences without exerting any effort to
avoid them. In order to constitute just cause
for an EE’s dismissal due to negligence, it
must not only be gross, but also habitual. A
single or an isolated act that cannot be
categorized as habitual, hence, not a just
cause for their dismissal. [National Bookstore
v. CA, G.R. No. 146741 (2002)]
Gross negligence connotes want of care in the
performance of one’s duties, while habitual
neglect implies repeated failure to perform
one’s duties for a period of time, depending on
the circumstances.
Estoppel by toleration of management:
breach of rules and regulations which are
tolerated by management cannot serve basis
as termination. The rule only applies when the
violation is not tantamount to fraud or
commission of illegal activities. One cannot
evade liability based on obedience to the
corporate chain of command. [PNB v. Padao,
G.R. No. 180849, 187143 (2011)]
On the principle of respondeat superior or
command responsibility alone, a managerial
employee may be held liable for negligence in
the performance of her managerial duties.
[Jumuad v. Hi-Flyer Food, Inc., G.R. No. 187887
(2011)]
Gross Negligence includes gross inefficiency
Article 290 of the Labor Code provides that
one of the just causes for terminating an
employment is the employee's gross and
habitual neglect of his duties. This cause
includes gross inefficiency, negligence and
carelessness [Century Iron Works, Inc. v. Bañas,
G.R. No. 184116 (2013)]
B.2.A.4 Loss of Trust and Confidence
The loss of trust and confidence must be
based on willful breach of the trust reposed in
PAGE 105 OF 235
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the employee by his employer. Such breach is
willful if it is done intentionally, knowingly,
and purposely, without justifiable excuse, as
distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently.
And, in order to constitute a just cause for
dismissal, the act complained of must be
work-related and shows that the employee
concerned is unfit to continue working for the
employer. In addition, loss of confidence as a
just cause for termination of employment is
premised on the fact that the employee
concerned holds a position of responsibility,
trust and confidence or that the employee
concerned is entrusted with confidence with
respect to delicate matters, such as handling
or case and protection of the property and
assets of the employer. The betrayal of this
trust is the essence of the offense for which an
employee is penalized. [Villanueva, Jr. v. NLRC,
G.R. No. 176893 (2012)]
The loss of trust and confidence must be
based not on ordinary breach by the employee
of the trust reposed in him by the employer,
but, in the language of Article 282 (c) of the
Labor Code, on willful breach. A breach is
willful if it is done intentionally, knowingly and
purposely, without justifiable excuse, as
distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. It
must rest on substantial grounds and not on
the employer's arbitrariness, whims, caprices
or suspicion; otherwise, the employee would
eternally remain at the mercy of the employer.
[Johansen World Group Corp. v. Gonzales III,
G.R. No. 198733 (2012)]
Elements of fraud or willful breach of trust:
(a) There must be an act, omission, or
concealment;
(b) The act, omission or concealment
involves a breach of legal duty, trust, or
confidence justly reposed;
(c) It must be committed against the
employer or his/her representative; and
(d) It must be in connection with the
employees’ work. [Sec. 5.2. (d), DO 147-
15]
Elements of loss of confidence
LABOR STANDARDS LABOR LAW
(a) There must be an act, omission or
concealment;
(b) The act, omission or concealment
justifies the loss of trust and confidence
of the employer to the employee;
(c) The employee concerned must be
holding a position of trust and
confidence;
(d) The loss of trust and confidence should
not be simulated;
(e) It should not be used as a subterfuge for
causes which are improper, illegal or
unqualified; and
(f) It must be genuine and not a mere
afterthought to justify an earlier action
taken in bad faith. [Sec. 5.2. (e), DO 147-
15]
Guidelines for the application of the doctrine of
loss of confidence
(1) Loss of confidence should not be
simulated;
(2) It should not be used as a subterfuge for
causes which are improper, illegal or
unjustified;
(3) It may not be arbitrarily asserted in the
face of overwhelming evidence to the
contrary; and
(4) It must be genuine, not a mere
afterthought to justify earlier action
taken in bad faith [Nokom v. NLRC, G.R.
No. 140043 (2000)]
Requisites for dismissal on the ground of loss
of trust and confidence
(1) The Employee concerned is one holding
a position of trust and confidence.
(2) There must be an act that would justify
the loss of trust and confidence.
(3) The loss of trust and confidence must be
based on a willful breach of trust and
founded on clearly established facts.
[Wesleyan Universtity – Philippines vs.
Reyes, G.R. No. 208321 (2014)]
Loss of trust and confidence to be a valid cause
for dismissal must be based on a willful breach
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of trust and founded on clearly established
facts. The basis for the dismissal must be
clearly and convincingly established but proof
beyond reasonable doubt is not necessary.
[Prudential Guarantee and Assurance
Employee Labor Union v. NLRC, G.R. No.
185335 (2012)]
Positions of trust and confidence
(1) Managerial employees - those vested with
the powers or prerogatives to lay down
management policies and to hire, transfer,
suspend, lay-off, recall, discharge, assign or
discipline employees or effectively
recommend such managerial actions.
(2) Fiduciary Rank and file - those who in the
normal and routine exercise of their functions,
regularly handle significant amounts of
money or property. Examples are cashiers,
auditors, property custodians, etc. [Prudential
Guarantee and Assurance Employee Labor
Union v. NLRC, G.R. No. 185335 (2012)]
those occupying ordinary ranks. While plain
accusations are not sufficient to justify the
dismissal of rank and file employees, the mere
existence of a basis for believing that
managerial employees have breached the
trust reposed on them by their employer
would suffice to justify their dismissal. [Grand
Asian Shipping Lines, Inc. v. Galvez, G.R. No.
178184 (2014)]
Acquittal in Criminal Case arising from
Misconduct
Notwithstanding petitioner’s acquittal in the
criminal case for qualified theft, the company
had adequately established the basis for the
company’s loss of confidence as a just cause to
terminate. As opposed to the "proof beyond
reasonable doubt" standard of evidence
required in criminal cases, labor suits require
only substantial evidence to prove the validity
of the dismissal [Paulino v. NLRC, G.R. No.
176184 (2012)]

Betrayal by a long-time employee

Managerial Fiduciary rank-and-file
Length of service is not a bargaining chip that
can simply be stacked against the employer.
Mere existence of a Proof of involvement
After all, an employer-employee relationship
basis for the belief of in the alleged events
is symbiotic where both parties benefit from
employee’s guilt in question required;
mutual loyalty and dedicated service. If an
[Grand Asian Shipping mere uncorroborated
employer had treated his employee well, has
Lines, Inc. v. Galvez, assertions and
accorded him fairness and adequate
G.R. No. 178184 accusations
compensation as determined by law, it is only
(2014)]
are not enough fair to expect a long-time employee to return
[Etcuban, Jr. v. Sulpicio such fairness with at least some respect and
Lines, Inc., G.R. No. honesty. Thus, it may be said that betrayal by
148410 (2005)] a long-time employee is more insulting and
odious for a fair employer. [Moya v. First Solid
Employment for a Rubber Industries, Inc., G.R. No. 184011 (2013)]
long time is counted
against the employee
[Salvador v. Philippine B.2.A.5. Commission of a crime
Mining Service Corp., Elements:
G.R. No. 148766
(2003)] a. There must be an act or omission
punishable/prohibited by law; and
b. The act or omission was committed by
Managerial Employees: Reason for the Rule the employee against the person of the
employer, any immediate member of
The employer has broader discretion in his/her family, or his/her duly
dismissing managerial employees on the authorized representative. [Sec. 5.2. (f),
ground of loss of trust and confidence than DO 147-15]
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Commission of a crime or offense by the (11) Conviction/Commission of a Crime

employee against the person of his employer
(12) Temporary “Off-detail” or “floating
or any immediate member of his family or his
status”
duly authorized representatives [Art. 297(d),
LC]
The employer may validly dismiss for loss of Abandonment
trust and confidence an employee who
Abandonment is a just cause for dismissal
commits an act of fraud prejudicial to the
under Art. 297(b), LC. It is the deliberate and
interest of the employer. Neither a criminal
unjustified refusal of an employee to resume
prosecution nor a conviction beyond
his employment. It is a form of neglect of duty.
reasonable doubt for the crime is a requisite
Two factors should be present: (1) Failure to
for the validity of the dismissal. [Concepcion v
report for work or absence without valid or
Minex Import Corporation/Minerama
justifiable reason, (2) Clear intention to sever
Corporation, G.R. No. 153569 (2012)]
ER-EE relationship. The burden to prove
whether the employee abandoned his or her
work rests on the employer. [Protective
B.2.A.6. Analogous Causes
Maximum Security, Inc vs. Celso E. Fuentes,
Elements: G.R. No. 169303 (2015)]
(a) There must be an act or omission similar
to those specified just causes; and
Elements:
(b) The act or omission must be voluntary
(a) Failure to report for work or absence
and/or willful on the part of the
without valid or justifiable reason, and
employees
(b) A clear intention to sever the employer-
No act or omission shall be considered
employee relationship, with the second
as analogous cause unless expressly
element as the more determinative
specified in the company rules and
factor and being manifested by some
regulations or policies. [Sec. 5.2. (g), DO
overt acts.
147-15]
Absence must be accompanied by overt acts
One is analogous to another if it is susceptible
unerringly pointing to the fact that the
of comparison with the latter either in general
employee simply does not want to work
or in some specific detail; or has a close
anymore. It has been ruled that the employer
relationship with the latter.
has the burden of proof to show a deliberate
and unjustified refusal of the employee to
resume his employment without any intention
of returning. [Tan Brothers Corp. of Basilan City
OTHER CAUSES v. Escudero, G.R. No. 188711 (2013)]
(1) Abandonment
(2) Courtesy Resignation Courtesy Resignation
(3) Change of Ownership Resignation per se means voluntary
relinquishment of a position or office. Adding
(4) Habitual Absenteeism/Tardiness
the word "courtesy" did not change the
(5) Poor Performance essence of resignation. [Batongbacal v.
(6) Past Offenses Associated Bank, G.R. No. 72977 (1988)]

(7) Habitual Infractions

(8) Immorality Change of Ownership

(9) Totality of infractions A mere change in the equity composition of a

corporation is neither a just nor an authorized
(10) Pregnancy out of wedlock cause that would legally permit the dismissal
PAGE 108 OF 235
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of the corporation's employees en masse.
[SME Bank, Inc. v. De Guzman, G.R. No.
184517, 186641 (2013)]
Habitual Absenteeism/ Tardiness
Habitual tardiness is a form of neglect of duty.
Lack of initiative, diligence, and discipline to
come to work on time everyday exhibit the
employee's deportment towards work.
Habitual and excessive tardiness is inimical to
the general productivity and business of the
employer. This is especially true when the
tardiness and/or absenteeism occurred
frequently and repeatedly within an extensive
period of time. [R.B. Michael Press v. Galit, G.R.
No. 153510 (2008)]
However, there are cases when absenteeism is
not sufficient to justify termination. In the case
of, Cavite Apparel v Michelle Marquez, GR No.
172044, (2013), the SC held: “Michelle might
have been guilty of violating company rules on
leaves of absence and employee discipline,
still we find the penalty of dismissal imposed
on her unjustified under the circumstances. As
earlier mentioned, Michelle had been in Cavite
Apparel’s employ for six years, with no
derogatory record other than the four
absences without official leave in question, not
to mention that she had already been
penalized for the first three absences, the
most serious penalty being a six-day
suspension for her third absence on April 27,
2000.”
Poor performance
As a general concept, poor performance is
tantamount to inefficiency and incompetence
in the performance of official duties. An
unsatisfactory rating can be a just cause for
dismissal only if it amounts to gross and
habitual neglect of duties. Poor or
unsatisfactory performance of an employee
does not necessarily mean that he is guilty of
gross and habitual neglect of duties [INC
Shipmanagement Inc. vs. Campo-Redondo, GR
No. 199931 (2015)].
Past Offenses
LABOR STANDARDS LABOR LAW
Previous offense may be used as valid
justification for dismissal from work only if the
infractions are related to the subsequent
offense upon which the basis of termination is
decreed. [Century Canning Corporation v.
Ramil, G.R. No. 171630 (2010)]
Habitual Infractions
A series of irregularities when put together
may constitute serious misconduct, which
under Article 297 of the Labor Code, as
amended, is a just cause for dismissal [Gustilo
v. Wyeth Phil. Inc., G.R. No. 149629 (2004)]
Immorality
DECS Order No. 92 provides that disgraceful
or immoral conduct can be used as a basis for
termination of employment [Santos, Jr. v.
NLRC, G.R. No. 115795 (1998)]
The act of engaging in extramarital affairs was
specifically provided for by the cooperative’s
Personnel Policy as one of the grounds for
termination of employment and said act
raised concerns to the cooperative as the
Board received numerous complaints and
petitions from the cooperative members
themselves asking for the removal of Bandiola
because of his immoral conduct, hence,
immorality (extramarital affair) justified
terminating the employment by the employer
[Alilem Credit Cooperative vs. Bandiola, Jr., G.R.
No. 173489 (2013)]
Totality of infractions doctrine
The totality of infractions or the number of
violations committed during the period of
employment shall be considered in
determining the penalty to be imposed upon
an erring employee. Fitness for continued
employment cannot be compartmentalized
into tight little cubicles of aspects of character,
conduct and ability separate and independent
of each other. While it may be true that
petitioner was penalized for his previous
infractions, this does not and should not mean
that his employment record would be wiped
clean of his infractions. After all, the record of
an employee is a relevant consideration in
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determining the penalty that should be meted
out since an employee's past misconduct and
present behavior must be taken together in
determining the proper imposable penalty.
[Merin v. NLRC, G.R. No. 171790 (2008)]
Pregnancy Out of Wedlock
Accordingly, when the law speaks of immoral
or, necessarily, disgraceful conduct, it pertains
to public and secular morality; it refers to
those conducts which are proscribed because
they are detrimental to conditions upon which
depend the existence and progress of human
society. To stress, pre-marital sexual relations
between two consenting adults who have no
impediment to marry each other, and,
consequently, conceiving a child out of
wedlock, gauged from a purely public and
secular view of morality, does not amount to a
disgraceful or immoral conduct under Section
94(e) of the 1992 MRPS. [Cheryl Leus v. St.
Scholastica College Westgrove, G.R. No.
187226 (2015)]
Conviction/Commission of a Crime
The charge of drug abuse within the
company’s premises and during work hours
constitutes serious misconduct which is one of
the just causes for termination. [Bughaw, Jr. v.
Treasure Island Industrial, G.R. No. 173151
(2008)]
Constructive Dismissal
(See discussion on p. 103)
Temporary “Off-Detail” or “floating status”
Temporary "off-detail" or "floating status" is
the period of time when security guards are in
between assignments or when they are made
to wait after being relieved from a previous
post until they are transferred to a new one. It
takes place when the security agency's clients
decide not to renew their contracts with the
agency, resulting in a situation where the
available posts under its existing contracts are
less than the number of guards in its roster. It
also happens in instances where contracts for
LABOR STANDARDS LABOR LAW
security services stipulate that the client may
request the agency for the replacement of the
guards assigned to it even for want of cause,
such that the replaced security guard may be
placed on temporary "off-detail" if there are
no available posts under the agency's existing
contracts. During such time, the security
guard does not receive any salary or any
financial assistance provided by law. It does
not constitute a dismissal, as the assignments
primarily depend on the contracts entered into
by the security agencies with third parties, so
long as such status does not continue beyond
a reasonable time. When such a "floating
status" lasts for more than six (6) months, the
employee may be considered to have been
constructively dismissed [Salvaloza vs. NLRC,
GR No. 182086 (2010)].
Transfer/Reassignment of Work
Concerning the transfer of employees, these
are the following jurisprudential guidelines:
(a) a transfer is a movement from one position
to another of equivalent rank, level or salary
without break in the service or a lateral
movement from one position to another of
equivalent rank or salary; (b) the employer has
the inherent right to transfer or reassign an
employee for legitimate business purposes; (c)
a transfer becomes unlawful where it is
motivated by discrimination or bad faith or is
effected as a form of punishment or is a
demotion without sufficient cause; (d) the
employer must be able to show that the
transfer is not unreasonable, inconvenient, or
prejudicial to the employee [Rural Bank of
Cantilan, Inc. vs. Julve, GR No. 169750 (2007)].
If the transfer of an employee is not
unreasonable, or inconvenient, or prejudicial
to him, and it does not involve a demotion in
rank or a diminution of his salaries, benefits
and other privileges, the employee may not
complain that it amounts to a constructive
dismissal [Peckson vs. Robinson’s Supermarket
Corp., GR No. 198534 (2013)]..
B.2.b Authorized Causes
a.k.a. Business-related Causes
Art 298 [283], LC
(1) Installation of labor saving device
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(2) Retrenchment to prevent losses
(3) Redundancy
(4) Closure of Business
Due to labor-saving Due to retrenchment,
devices or closure, or
redundancy suspension of
operations
1-month pay, or at 1 month pay, or at
least 1 month pay for least ½ month pay
every year of service, for every year of
whichever is higher. service, whichever is
higher.
A fraction of at least six months shall be
considered as one year.
Basis
Employment is the lifeblood upon which the
worker and his family owe their
survival. [Flight Attendants and Stewards Ass'n
of the Philippines v. PAL, Inc., G.R. No. 178083
(2009)]
5 business-related causes for termination:
1. Installation of labor-saving devices
2. Retrenchment
3. Redundancy
4. Closure of business
5. Temporary/bona fide suspension of
operations
B.2.B.1. Installation of Labor-Saving Device
This refers to the installation of machinery to
effect economy and efficiency in the
employer’s method of production [Edge
Apparel, Inc. v. NLRC, G.R. No. 121314 (1998)]
Elements of a valid termination based on
installation of labor-saving devices
(a) There must be introduction of
machinery, equipment or other devices;
LABOR STANDARDS LABOR LAW
(b) The introduction must be done in good
faith;
(c) The purpose for such introduction must
be valid such as to save on cost, enhance
efficiency and other justifiable economic
reasons;
(d) There is no other option available to the
employer than the introduction of
machinery, equipment or device and the
consequent termination of employment
of those affected thereby; and
(e) There must be fair and reasonable
criteria in selecting employees to be
terminated. [Sec. 5.4. (a), DO 147-15]
Requirements for termination due to
installation of labor-saving device
(1) The employer exercises its prerogative
to install the labor-saving device in good
faith for the advancement of its interest
and not to defeat or circumvent the
employee’s right to security of tenure;
(2) The employer served a written notice
both to the employees and to the DOLE
at least 30 days prior to the intended
date of termination; and
(3) The employer pays the employees
separation pay equivalent to one-month
pay or at least one-half (1/2) month pay
for every year of service, whichever is
higher, a fraction of at least six months
being considered as one whole year
(Samson, 2004)
B.2.B.2. Retrenchment
Elements of a valid retrenchment:
(1) The retrenchment is reasonably
necessary and likely to prevent business
(2) The losses, if already incurred, are not
merely de minimis, but substantial,
serious, actual and real, or if only
expected, are reasonably imminent as
perceived objectively and in good faith
by the employer;
(3) The expected or actual losses must be
proved by sufficient and convincing
evidence;
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(4) The retrenchment must be in good faith
for the advancement of its interest and
not to defeat or circumvent the
employees’ right to security of tenure;
and
(5) There must be fair and reasonable
criteria in ascertaining who would be
dismissed and who would be retained
among the employees, such as status,
efficiency, seniority, physical fitness,
age, and financial hardship for certain
workers. [Sec. 5.2. (c), DO 147-15]
(6) That the employer served written notice
both to the employees and to the
Department of Labor and Employment
at least one month prior to the intended
date of retrenchment;
(7) That the employer pays the retrenched
employees separation pay equivalent to
1 month pay or at least 1⁄2 month pay for
every year of service, whichever is
higher;
The employer bears the burden of proving the
existence of the imminence of substantial
losses with clear and satisfactory evidence
that there are legitimate business reasons
justifying a retrenchment. [Mount Carmel
College Employees Union (MCCEU), et al vs.
Mount Carmel College, Inc. G.R. No. 187621,
(2014)]
The Court recognizes two kinds of losses which
can justify retrenchment — incurred losses
which are substantial, serious, actual and real,
and expected losses which are reasonably
imminent. [Sanoh Fulton Phils. Inc. v. Bernardo
& Tagohoy, G.R. No. 187214 (2013)]
B.2.B.3. Redundancy
Redundancy exists when the service capability
of the workforce is in excess of what is
reasonably needed to meet the demands of
the business enterprise. A position is
redundant when it is superfluous, and
superfluity of a position or positions could be
the result of a number of factors, such as the
overhiring of workers, a decrease in the
volume of business or the dropping of a
particular line or service previously
manufactured or undertaken by the
PAGE 112 OF 235
LABOR LAW
enterprise. [Morales v. Metrobank, G.R. No.
182475 (2012)]
Elements of redundancy:
(a) There must be superfluous positions or
services of employees;
(b) The positions or services are in excess of
what is reasonably demanded by the
actual requirements of the enterprise to
operate in an economical and efficient
manner;
(c) There must be good faith in abolishing
redundant positions;
(d) There must be fair and reasonable
criteria in selecting the employees to be
terminated; and
(e) There must be an adequate proof of
redundancy such as but not limited to
the new staffing patter, feasibility
studies/proposal, on the viability of the
newly created positions, job description
and the approval by the management of
the restructuring. [Sec. 5.4. (c), DO 147-
15]
For the implementation of a redundancy
program to be valid, however, the employer
must comply with the following requisites:
(a) Written notice served on both the
employees and the DOLE at least one
month prior to the intended date of
termination of employment;
(b) Payment of separation pay equivalent to
at least one month pay for every year of
service;
(c) Good faith in abolishing the redundant
positions; and
(d) Fair and reasonable criteria in
ascertaining what positions are to be
declared redundant and accordingly
abolished. [Morales v. Metrobank, G.R.
No. 182475 (2012)]
To exhibit its good faith and that there was a
fair and reasonable criteria in ascertaining
redundant positions, a company claiming to
be over manned must produce adequate proof
of the same. Such proof includes but is not
limited to the new staffing pattern, feasibility
studies/proposals on the viability of the newly
UP LAW BOC LABOR STANDARDS LABOR LAW

created positions, job description and the
approval by the management of the
restructuring. [General Milling Corporation v
Violeta L. Viajar, G.R. No. 181738 (2013)]
B.2.B.4. Closure of a Business
ELEMENTS OF A VALID CLOSURE OR
CESSATION OF OPERATION
(a) There must be a decision to close or
cease operation of the enterprise by the
management;
(b) The decision was made in good faith;
and
(c) There is no other option available to the
employer except to close or cease
operations. [Sec. 5.4. (d), DO 147-15]
reverses, the employer must prove such
allegation in order to avoid the payment
of separation pay. Otherwise, the
affected employees are entitled to
separation pay.
(5) The burden of proving compliance with
all the above-stated falls upon the
employer. [Manila Polo Club Employees'
Union v. Manila Polo Club, Inc., G.R. No.
172846 (2013)]
Closure of Department
The closure of a department or division of a
company constitutes retrenchment by, and
not closure of, the company itself. [Waterfront
Cebu City Hotel v. Jimenez, G.R. No. 174214,
June 13, 2012]

Guidelines in Closure
(1) Closure or cessation of operations of
establishment or undertaking may
either be partial or total
(2) Closure or cessation of operations of
establishment or undertaking may or
may not be due to serious business
losses or financial service reverses.
However, in both instances, proof must
be shown that:
Corporate acquisitions
(a) it was done in good faith to advance
the employer's interest and not for Asset Sales Stock Sales
the purpose of defeating or
circumventing the rights of Sale
employees under the law or a valid
agreement; and Corporate entity sells In stock sales, the
(b) Written notice on the affected all or substantially all individual or
employees and the DOLE is served of its assets to corporate
at least one month before the another entity. shareholders sell a
intended date of termination of controlling block of
employment. stock to new or
existing shareholders.
(3) The employer can lawfully close shop
even if not due to serious business losses Obligation of Seller
or financial reverses but separation pay,
which is equivalent to at least one
month pay as provided for by Article 289
of the Labor Code, as amended, must be
given to all the affected employees.
(4) If the closure or cessation of operations
of establishment or undertaking is due
to serious business losses or financial
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Seller in good faith is A shift in the (2) Efficiency,

authorized to dismiss composition of its (3) Physical fitness,
the affected shareholders will not
employees, but is affect its existence (4) Age,
liable for the payment and continuity. (5) Financial hardship, or
of separation pay Notwithstanding the
under the law. stock sale, the (6) Seniority. [Asian Alcohol Corp. v. NLRC,
corporation continues G.R. No. 131108 (1999)]
to be the employer of
its people and
continues to be liable Retrenchment Redundancy Closure
for the payment of
their just claims. The reversal of
the fortune of
Reduction of
Obligation of Buyer the employer
personnel
The service whereby there
usually due to
The buyer in good The corporation or its of an is a complete
poor financial
faith, on the other new majority Employee is cessation of
returns so as
hand, is not obliged shareholders are not in excess of business
to cut down
to absorb the entitled to lawfully what is operations
on costs of
employees affected dismiss corporate required by and/or actual
operations in
by the sale, nor is it employees absent a an locking-up of
terms of
liable for the payment just or authorized enterprise the doors of the
salaries and
of their claims. The cause. establishment,
wages
most that it may do, usually due to
[SME Bank, Inc. v. De financial losses
for reasons of public
Guzman, G.R. No.
policy and social
184517, 186641,
justice, is to give Resorted to
(2013)] Aims to
preference to the primarily to
To save prevent further
qualified separated avoid or
production financial drain
personnel of the minimize
costs upon the
selling firm. business
Employer
losses

In case of
closure of
business not
Employee is
Procedural steps required Employee is due to serious
entitled to
entitled to business
At least 1 month before the intended date of separation
separation losses, the
termination, Employer is to serve written pay of 1
pay of 1 employer pays
notice to: month pay
month pay or the employees
or 1/2
(1) Affected employees; 1/2 month pay terminated
month pay
per year of separation pay
(2) DOLE (Art. 298, LC) per year of
service, of 1 month pay
service,
whichever is or 1/2 month
whichever is
higher pay per year of
Criteria in selecting employees for dismissal: higher
service,
Fair and reasonable criteria in ascertaining whichever is
who will be affected: higher
(1) Preferred status (e.g. temporary,
casual or regular Employees),

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UP LAW BOC LABOR STANDARDS
B.2.B.5. Temporary Closure / Bona fide
suspension of Operations
Art. 301, LC: When Employment Not Deemed
Terminated: The bona fide suspension of the
operation of a business or undertaking for a
period not exceeding six (6) months, or the
fulfillment by the employee of a military or
civic duty shall not terminate employment.
In all such cases the employer shall reinstate
the employee to his former position without
loss of seniority rights if he indicates his
desire to resume his work not later than one
(1) month from the resumption of operations
of his employer or from his relief from the
military or civic duty
i. Disease
Under Art. 301 of the Labor Code, a bona
fide suspension of business operations for not
more than six (6) months does not terminate
employment. After six (6) months, the
employee may be recalled to work or be
permanently laid off. In this case, more than
six (6) months have elapsed from the time the
Club ceased to operate. Hence, respondents'
termination became permanent. [SKM Art
Craft Corp. v. Bauca, G.R. Nos. 171282, 183484
(2013)]
An employer may validly suspend operations
for at most 6 months. Not accepting the
workers back to work after the 6-month period
is equivalent to termination, which should be
for cause and with proper procedure. [Manila
Mining Corp v Amor, GR No 182800 (2015)]
Floating Status
A floating status requires the dire exigency of
the employer’s bona fide suspension of
operation, business or undertaking. It takes
place when (a) the security agency’s clients
decide not to renew their contracts with the
agency and (b) also in instances where
contracts for security services stipulate that
the client may request the agency for the
replacement of the guards assigned to it. In
the latter case, the employer should prove that
there are no posts available to which the
employee temporarily out of work can be
assigned. [Peak Ventures Corp v. Nestor
Villareal, G.R. No. 184618 (2014)]
Other Causes
PAGE 115 OF 235
LABOR LAW
(1) Disease incurable in 6 months [Art. 299,
LC]
(2) Enforcement of union security clause in
the CBA
(3) Dismissal of union officers for the
conduct of an illegal strike [Art. 279 (a),
LC]
(4) Dismissal of union members for
participating in the commission of
illegal acts [Art. 279 (a), LC]
(5) Termination in conformity with existing
statute/ qualification requirements
Art. 299, LC: Disease as Ground for
Termination: An employer may terminate
the services of an employee who has been
found to be suffering from any disease and
whose continued employment is prohibited
by law or is prejudicial to his health as well
as to the health of his co-employees:
Provided, That he is paid separation pay
equivalent to at least one (1) month salary
or to one-half (1/2) month salary for every
year of service, whichever is greater, a
fraction of at least six (6) months being
considered as one (1) whole year.
Section 8, Rule I, Book VI of the Omnibus
Rules Implementing the Labor Code
Disease as a ground for dismissal. — Where
the employee suffers from a disease and his
continued employment is prohibited by law
or prejudicial to his health or to the health
of his coemployees, the employer shall not
terminate his employment unless there is a
certification by competent public health
authority that the disease is of such nature
of at such a stage that it cannot be cured
within a period of six (6) months even with
proper medical treatment. If the disease or
ailment can be cured within the period, the
employee shall not terminate the employee
but shall ask the employee to take a leave
of absence. The employer shall reinstate
such employee to his former position
immediately upon the restoration of his
normal health.
UP LAW BOC LABOR STANDARDS LABOR LAW

Requisites provisions of the Labor Code or in

accordance with the prevailing
(1) The employee must be suffering from a
jurisprudence;
disease which cannot be cured within six
months, even with proper medical In terminating the employment of an
treatment; employee by enforcing the Union
Security Clause, the employer needs
(2) His continued employment is prohibited
only to determine and prove that:
by law or prejudicial to his health or to
the health of his co-employees; and (a) The union security clause is
applicable;
(3) A certification to that effect must be
issued by a competent public health (b) The union is requesting for the
authority. [Crayons Processing, Inc. v. enforcement of the union security
Pula, G.R. No. 167727 (2007), Sec. 5.2. provision in the CBA; and
(f), DO 147-15]
(c) There is sufficient evidence to
The burden falls upon the employer to support the union's decision to expel
establish these requisites, and in the absence the employee from the union or
of such certification, the dismissal must company.
necessarily be declared illegal.
(2) Procedural – the manner in which the
It is only where there is a prior certification dismissal was effected.
from a competent public authority that the
(a) The first written notice to be served
disease afflicting the employee sought to be
on the employees should contain
dismissed is of such nature or at such stage
the specific causes or grounds for
that it cannot be cured within six (6) months
termination against them, and a
even with proper medical treatment that the
directive that the employees are
latter could be validly terminated from his job
given the opportunity to submit their
[Crayons Processing, Inc. v. Pula, G.R. No.
written explanation within a
167727 (2007)]
reasonable period.
ii. Enforcement of Union Security Clause in CBA
(b) The requirement of a hearing is
Union security is a generic term, which is complied with as long as there was
applied to and comprehends: an opportunity to be heard, and not
necessarily that an actual hearing
Closed shop – an enterprise in which, by
was conducted.
agreement between the employer and his
employees or their representatives, no person (c) After determining that termination
may be employed in any or certain agreed of employment is justified, the
departments of the enterprise unless he or she employers shall serve the
is, becomes, and, for the duration of the employees a written notice of
agreement, remains a member in good termination indicating that: (1) all
standing of a union entirely comprised of or of circumstances involving the charge
which the employees in interest are a part. against the employees have been
considered; and (2) grounds have
been established to justify the
Union shop – when all new regular employees severance of their employment.
are required to join the union within a certain [Inguillo v. First Phil Scales, G.R. No.
period as a condition for their continued 165407 (2009)]
employment.
Law authorizes the enforcement of union
iii. Dismissal of union officers for the conduct of
security clauses, provided such enforcement is
an illegal strike / dismissal of union members
not characterized by arbitrariness, and always
for participating in the commission of illegal
with due process.
acts
(1) Substantive – whether the termination of
employment was based on the
PAGE 116 OF 235
UP LAW BOC LABOR STANDARDS
Art. 279, a, 3rd par., 2nd sen., LC: Any union
officer who knowingly participates in an
illegal strike and any worker or union officer
who knowingly participates in the
commission of illegal acts during a strike
may be declared to have lost his employment
status.
iV. Termination in conformity with existing
statute / Qualification requirements
While the right of workers to security of tenure
is guaranteed by the Constitution, its exercise
may be reasonably regulated pursuant to the
police power of the State to safeguard health,
morals, peace, education, order, safety, and
the general welfare of the people.
Consequently, persons who desire to engage
in the learned professions requiring scientific
or technical knowledge may be required to
take an examination as a prerequisite to
engaging in their chosen careers. [St. Lukes’s
Medical Center Employees Ass'n-AFW v. NLRC,
G.R. No. 162053 (2007)]
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LABOR LAW
B.2.c. DUE PROCESS
Art. 292 (b), LC: Subject to the
constitutional right of workers to security of
tenure and their right to be protected
against dismissal except for a just and
authorized cause without prejudice to the
requirement of notice under Article 283 of
this Code, the employer shall furnish the
worker whose employment is sought to be
terminated a written notice containing a
statement of the causes for termination and
shall afford the latter ample opportunity to
be heard and to defend himself with the
assistance of his representative if he so
desires in accordance with company rules
and regulations promulgated pursuant to
guidelines set by the Department of Labor
and Employment. Any decision taken by
the employer shall be without prejudice to
the right of the worker to contest the validity
or legality of his dismissal by filing a
complaint with the regional branch of the
National Labor Relations Commission. The
burden of proving that the termination was
for a valid or authorized cause shall rest on
the employer.
Requisites for Valid Dismissal
(1) Substantive due process: The dismissal
must be for any of the causes provided
for in Article 297 – 299 of the Labor
Code; and
(2) Procedural due process: The employee
must be afforded an opportunity to be
heard and defend himself. [Fujitsu
Computer Products Corporation of the
Phil. v. Court of Appeals, G.R. No. 158232
(2005)]
Employer may not substitute the required
prior notice & opportunity to be heard with the
mere payment of 30 days' salary. [PNB v.
Cabansag, G.R. No. 157010 (2005)]
Right to Counsel
The right to counsel, a very basic requirement
of substantive due process, has to be
observed. Indeed, the rights to counsel and to
due process of law are two of the fundamental
rights guaranteed by the 1987 Constitution to
UP LAW BOC LABOR STANDARDS LABOR LAW

any person under investigation, be the (1) Contain the specific causes or
proceeding administrative, civil, or criminal. grounds for termination against
[Salaw v. NLRC, G.R. No. 90786 (1991)] them, and
(2) Contain a directive that the
Burden of Proof employees are given the
opportunity to submit their
In illegal dismissal cases, the onus of proving written explanation within a
that the employee was not dismissed or, if “reasonable period” or every kind
dismissed, that the dismissal was not illegal, of assistance that management
rests on the employer, failure to discharge must accord to the employees to
which would mean that the dismissal is not enable them to prepare
justified and, therefore, illegal. [Macasero v. adequately for their defense.
Southern Industrial Gases Philippines, G.R. No. This should be construed as a
178524 (2009)] period of at least five (5)
First
Notice calendar days from receipt of the
notice
Degree of Proof
(3) Contain a detailed narration of
In labor cases, as in other administrative the facts and circumstances that
proceedings, substantial evidence is required will serve as basis for the charge
and it is such relevant evidence as a against the employees.
reasonable mind might accept as adequate to
support a conclusion. [Andrada v. Agemar (4) Specifically mention which
Manning Agency, Inc., G.R. No. 194758 (2012)] company rules, if any, are
violated and/or which among the
Substantial evidence is necessary for an grounds under Art. 288 is being
employer to effectuate any dismissal. charged against the
Uncorroborated assertions and accusations by employees. [United Tourist
the employer do not suffice; otherwise the Promotions v. Kemplin, G.R. No.
constitutional guaranty of security of tenure of 205453 (2014)]
the employee would be jeopardized. [Kulas
Ideas & Creations, et. al. v. Alcoseba & Arao
(1) Indicate all circumstances
Arao, GR 180123 (2010)]
involving the charge against the
employees considered; and
B.2.C.1. TWIN-NOTICE REQUIREMENT Second (2) Indicate grounds established to
Notice justify the severance of their
The employer has the burden of proving that a
dismissed worker has been served two notices: employment [United Tourist
Promotions v. Kemplin, G.R. No.
(1) First written notice: served on the 205453 (2014)]
employee specifying the ground or
grounds for termination, and giving said
employee reasonable opportunity An employee may be dismissed only if the
within which to explain his side. grounds mentioned in the pre-dismissal
(2) Second written notice: served upon the notice were the ones cited for the termination
employee, indicating that upon due of employment. [Erector Advertising Sign
consideration of all the circumstances, Group, Inc. v. Cloma, G.R. No. 167218, (2010)]
grounds have been established to justify
his termination.
B.2.C.2. HEARING; MEANING OF
OPPORTUNITY TO BE HEARD
In employee dismissal cases, the essence of
due process is simply an opportunity to be
heard; it is the denial of this opportunity that
PAGE 118 OF 235
UP LAW BOC LABOR STANDARDS
constitutes violation of due process of law.
[Technol Eight Philippines Corporation v.
NLRC, G.R. No. 187605 (2010)]
While a formal hearing or conference is ideal,
it is not an absolute, mandatory or exclusive
avenue of due process. [Perez v. PT&T, G.R.
No. 152048 (2009)]
Guiding principles in hearing requirement
(1) "Ample opportunity to be heard" means
any meaningful opportunity (verbal or
written) given to the employee to answer
the charges against him and submit
evidence in support of his defense,
whether in a hearing, conference or
some other fair, just and reasonable
way.
(2) A formal hearing or conference becomes
mandatory only when requested by the
employee in writing or substantial
evidentiary disputes exist or a company
rule or practice requires it, or when
similar circumstances justify it.
(3) The "ample opportunity to be heard"
standard in the Labor Code prevails over
the "hearing or conference" requirement
in the implementing rules and
regulations. [Perez v. PT&T, G.R. No.
152048 (2009)]
Use of Position Paper
It is the labor arbiter who is authorized to
determine whether or not there is a necessity
for conducting formal hearings in cases
brought before them for adjudication even
after the submission of the parties of their
position papers or memoranda. A formal trial-
type hearing is not at all times and in all
instances essential to due process. It is enough
that the parties are given a fair and reasonable
opportunity to explain their respective sides of
the controversy and to present supporting
evidence on which a fair decision can be
based. [Seastar Marine Services Inc. v. Bul-an,
Jr., G.R. No. 142609 (2004)]
Decision/Award
PAGE 119 OF 235
LABOR LAW
It is a requirement of due process that the
parties to a litigation be informed of how it was
decided, with an explanation of the factual
and legal reasons that led to the conclusions
of the court. The court cannot simply say that
judgment is rendered in favor of X and against
Y and just leave it at that without any
justification whatsoever for its action. The
losing party is entitled to know why he lost, so
he may appeal to a higher court, if permitted,
should he believe that the decision should be
reversed. A decision that does not clearly and
distinctly state the facts and the law on which
it is based leaves the parties in the dark as to
how it was reached and is especially
prejudicial to the losing party, who is unable to
pinpoint the possible errors of the court for
review by a higher tribunal. [ABD Overseas
Manpower Corporation vs. NLRC, G.R. No.
117056 (1998)]
Procedure to be observed in termination cases
Just Cause
Notice specifying the grounds for which
dismissal is sought
Hearing or opportunity to be heard
Notice of the decision to dismiss
Authorized Cause
Notice to:
(1) Employee, and
(2) DOLE at least 1 month prior to the
effectivity of the separation
Requisites
(1) Notice not needed when Employee
consented to the retrenchment or
voluntarily applied for one.
[International Hardware, Inc. v. NLRC,
G.R. No. 80770, (1989)]
(2) Notice must be individual, not collective
[Shoppers Gain Supermart v. NLRC, G.R.
No. 110731 (1996)]
UP LAW BOC LABOR STANDARDS LABOR LAW

(3) Voluntary arbitration satisfies notice

requirement for authorized causes
[Revidad v. NLRC, G.R. No. 111105 (1995

Consequences for non-compliance OF PROCEDURAL DUE PROCESS

Validity of
Situation Liability of ER
Dismissal

Just or Authorized Cause No liability.

Valid
+ Due Process Separation pay only in authorized cause

No Just or Authorized Cause Reinstatement or separation pay.

Invalid
+ Due Process If reinstatement not possible, + full backwages

No Just or Authorized Cause Reinstatement or separation pay.

Invalid
+ No Due Process If reinstatement not possible, + full backwages

Just or Authorized Cause Liable for damages due to procedural infirmity.

Valid
+ No Due Process Separation pay if for authorized cause

B.3 RELIEFS FOR ILLEGAL DISMISSAL 5. Indemnity

The reliefs are cumulative, not alternative
Art. 294, LC:
Security of Tenure. In case of regular
employment, the employer shall not terminate
the services of an employee except for a just
cause or when authorized by this Title. An
employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss
of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent
computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.
1. In general
a. Reinstatement
b. Backwages
2. Damages and attorney’s fees
3. Separation Pay
4. Financial assistance/separation pay as
a measure of social justice
PAGE 120 OF 235
6. Interest at 6% p.a. on the total monetary
awards (from finality of decision until
full payment)
7. Solidary liability of corporate officers
B.3.A. In general
B.3.A.1. Reinstatement
Reinstatement means restoration to a state or
condition from which one had been removed
or separated. The person reinstated assumes
the position he had occupied prior to his
dismissal. [Asian Terminals, Inc. v. Villanueva,
G.R. No. 143219 (2006)]
General Rule: Reinstatement and backwages
Exceptions:
(1) Separation pay
(2) Closure of business [Retuya v. Hon.
Dumarpa, G.R. No. 148848 (2003)]
(3) Economic business conditions [Union of
Supervisors v. Secretary of Labor, G.R.
No. L-39889 (1981)]
UP LAW BOC LABOR STANDARDS
(4) Employee’s unsuitability [Divine Word
High School v. NLRC, G.R. No. 72207
(1986)]
(5) Employee’s retirement/ overage [New
Philippine Skylanders, Inc. v. Dakila, G.R.
No. 199547 (2012)]
(6) Antipathy and antagonism [Wensha
Spa Center v. Yung, G.R. No. 185122
(2010)]
(7) Job with a totally different nature [DUP
Sound Phils. v. CA, G.R. No. 168317
(2011)]
(8) Long passage of time
(9) Inimical to the employer's interest
(10) When supervening facts have transpired
which make execution on that score
unjust or inequitable or, to an increasing
extent [Emeritus Security & Maintenance
Systems, Inc. v. Dailig, G.R. No. 204761
(2014)]
Prescription Period
An action for reinstatement by reason of
illegal dismissal is one based on an injury,
which may be brought within 4 years from the
time of dismissal. [Art. 1146, CC]
i. Reinstatement pending appeal
Art. 229, par. 3 LC: In any event, the decision of
the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the
reinstatement aspect is concerned, shall
immediately be executory, pending appeal. The
employee shall either be admitted back to work
under the same terms and conditions prevailing
prior to his dismissal or separation or, at the
option of the employer, merely reinstated in the
payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement
provided herein.
2 options given to employers:
1) Actually reinstate the dismissed
employees or,
2) Constructively reinstate them in the
payroll.
PAGE 121 OF 235
LABOR LAW
Either way, this must be done immediately
upon the filing of their appeal, without need of
any executory writ.
If the order of reinstatement of the Labor
Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and
pay the wages of the dismissed employee
during the period of appeal until reversal by
the higher court. The Labor Arbiter's order of
reinstatement is immediately executory and
the employer has to either re-admit them to
work under the same terms and conditions
prevailing prior to their dismissal, or to
reinstate them in the payroll, and that failing
to exercise the options in the alternative,
employer must pay the employee's salaries
[Magana v. Medicard Philippines, Inc., G.R. No.
174833 (2010)]
No refund doctrine
An employee cannot be compelled to
reimburse the salaries and wages he received
during the pendency of his appeal,
notwithstanding the reversal by the NLRC of
the LA's order of reinstatement. [College of the
Immaculate Conception v. NLRC, G.R. No.
167563 (2010)]
Note, however: Rule XI, Sec. 14 of the 2011
NLRC Rules of Procedure provide for restitution
of amounts paid pursuant to execution of
awards during pendency of the appeal.
However, it expressly disallows restitution of
wages paid due to reinstatement pending
appeal.
Section 14. Effect of Reversal of Executed
Judgment. Where the executed judgment is
totally or partially reversed or annulled by the
Court of Appeals or the Supreme Court, the
Labor Arbiter shall, on motion, issue such
orders of restitution of the executed award,
except wages paid during reinstatement
pending appeal.
ii. Separation pay in lieu of reinstatement
Kinds of separation pay (SP)
(1) SP as a statutory requirement for
authorized causes
UP LAW BOC LABOR STANDARDS
(2) SP as financial assistance found in the
next section
(3) SP in lieu of reinstatement where
reinstatement is not feasible; and
(4) SP as a benefit in the CBA or company
policy
Instances when the award of separation pay,
in lieu of reinstatement to an illegally
dismissed employee, is proper:
(1) When reinstatement is no longer
possible, in cases where the dismissed
employee's position is no longer
available;
(2) The continued relationship between the
employer and the employee is no longer
viable due to the strained relations
between them; and
(3) When the dismissed employee opted
not to be reinstated, or the payment of
separation benefits would be for the
best interest of the parties involved.
[Book VI, Rule 1, Section 4 (b), Rule I,
IRR]
Separation Pay and Reinstatement, Exclusive
Remedies
The payment of separation pay and
reinstatement are exclusive remedies. The
payment of separation pay replaces the legal
consequences of reinstatement to an
employee who was illegally dismissed. [Bani
Rural Bank, Inc. v. De Guzman, G.R. No.
170904 (2013)]
Doctrine of Strained Relations
Where reinstatement is not feasible,
expedient or practical, as where reinstatement
would only exacerbate the tension and
strained relations between the parties or
where the relationship between the employer
and employee has been unduly strained by
reason of their irreconcilable differences,
particularly where the illegally dismissed
employee held a managerial or key position in
the company, it would be more prudent to
order payment of separation pay instead of
PAGE 122 OF 235
LABOR LAW
reinstatement. [Quijano v. Mercury Drug Corp.,
G.R. No. 126561 (1998)]
Computation
SP as a statutory requirement is computed by
integrating the basic salary with regular
allowances employee has been receiving
[Planters Products, Inc. v. NLRC, G.R. No.
78524, 78739 (1989)]; allowances include
transportation and emergency living
allowances [Santos v. NLRC, G.R. No. 76721
(1987)]
Inasmuch as the words "wages", "pay" and
"salary" have the same meaning, and
commission is included in the definition of
"wage", the logical conclusion, therefore, is, in
the computation of the separation pay of
petitioners, their salary base should include
also their earned sales commissions. [Songco
v. NLRC, G.R. Nos. 50999-51000 (1990)]
A dismissed employee who has accepted
separation pay is not necessarily estopped
from challenging the validity of his or her
dismissal. Neither does it relieve the employer
of legal obligations. [Anino v. NLRC, G.R. No.
123226 (1998)]
B.3.A.2. Backwages
Backwages are earnings lost by a worker due
to his illegal dismissal; a form of relief that
restores the income lost by reason of such
unlawful dismissal; it is not private
compensation or damages; nor is it a redress
of a private right but, rather, in the nature of a
command to the employer to make a public
reparation for illegally dismissing an
employee. [St. Theresa's School of Novaliches
Foundation v. NLRC, G.R. No. 122955 (1998)]
Backwages and reinstatement are two reliefs
that should be given to an illegally dismissed
employee. They are separate and distinct from
each other. An illegally dismissed employee is
entitled to (1) either reinstatement, if viable, or
separation pay if reinstatement is no longer
viable, and (2) backwages. Payment of
backwages is specifically designed to restore
an employee's income that was lost because
of his unjust dismissal. [Aurora Land Projects
Corp. v. NLRC, G.R. No. 114733 (1997)]
Effect of failure to order backwages
UP LAW BOC LABOR STANDARDS
A “plain error” which may be rectified, even if
employee did not bring an appeal regarding
the matter [Aurora Land Projects Corp. v.
NLRC, supra]
i. Computation of backwages
Full backwages means exactly
that, i.e., without deducting from backwages
the earnings derived elsewhere by the
concerned employee during the period of his
illegal dismissal. [Bustamante v. NLRC, G.R.
No. 111651 (1996)]
Awards including salary differentials are not
allowed [Insular Life Assurance Co. v. NLRC,
1987]
The period of delay in instituting this ULP
charge with claim for reinstatement and
backwages, although within the prescriptive
period, should be deducted from the liability
of the employer to him for back wages.
[Mercury Drug Co. Inc. v. CIR, G.R. No. L-23357
(1974)]
The salary base properly used should be the
basic salary rate at the time of dismissal plus
the regular allowances; allowances include:
Emergency cost of living allowances (ECOLA),
transportation allowances, 13th month pay.
[Paramount Vinyl Product Corp. v. NLRC
(1990)]
Also included are vacation leaves, service
incentive leaves, and sick leaves
The effects of extraordinary inflation are not to
be applied without an official declaration
thereof by competent authorities. [Lantion v.
NLRC, G.R. No. 82028 (1990)]
ii. Limited backwages
General rule: An illegally dismissed employee
is entitled to full backwages.
Exceptions
(1) The Court awarded limited backwages
where the employee was illegally
dismissed but the employer was found
to be in good faith. [San Miguel
PAGE 123 OF 235
LABOR LAW
Corporation v. Javate, Jr., G.R. No. L-
54244 (1992)]
(2) Delay of the EE in filing the case for
illegal dismissal [Mercury Drug Co., Inc.
v. CIR, supra]
Rationale
Feati University Club vs. Feati University (1974)
adopted a consensus policy of pegging the
amount of backwages to their total equivalent
for three years (depending on the
circumstances) without deduction or
qualification. The rationale for the policy was
stated in the following words:
As has been noted, this formula of awarding
reasonable net backwages without deduction
or qualification relieves the employees from
proving or disproving their earnings during
their lay-off and the employers from
submitting counterproofs, and obviates the
twin evils of Idleness on the part of the
employee who would "with folded arms,
remain inactive in the expectation that a
windfall would come to him" [Itogon Suyoc
Mines, Inc. vs. Sangilo-Itogon Workers Union
(1968), as cited in Diwa ng Pagkakaisa vs. Filtex
International Corp. (1972)] and attrition and
protracted delay in satisfying such award on
the part of unscrupulous employers who have
seized upon the further proceedings to
determine the actual earnings of the
wrongfully dismissed or laid-off employees to
hold unduly extended hearings for each and
every employee awarded backwages and
thereby render practically nugatory such
award and compel the employees to agree to
unconscionable settlements of their
backwages award in order to satisfy their dire
need. [See La Campana Food Products, Inc. vs.
CIR, (1969) and Kaisahan ng Mga
Manggagawa vs. La Campana Food Products,
Inc., (1970)].
Note that according to Nacar v Gallery Frames,
when the judgment of the court awarding a
sum of money becomes final and executory,
the rate of legal interest …. shall be 6% per
annum from such finality until its satisfaction,
this interim period being deemed to be by then
an equivalent to a forbearance of credit.
[Nacar v Gallery Frames, G.R. No. 189871,
(2013)]
UP LAW BOC LABOR STANDARDS LABOR LAW

Indemnity of Employer

Doctrine in Validity of
Period Liability of ER
effect Dismissal

Prior 1989 Pre-Wenphil Illegal Reinstatement + Backwages

Feb. 1989 – 1999 Wenphil Valid Dismiss now, indemnity pay later

Jan. 2000 – Oct. Full backwages up to reinstatement/finality of

Serrano Ineffectual
2004 decision

Nov. 2004 –
Agabon Valid Nominal damages
present

B.3.B. Damages and Attorney’s Fees
Article 111, Civil Code
Attorney’s fees.-- In cases of unlawful
withholding of wages, the culpable party may
be assessed attorney’s fees equivalent to ten
percent of the amount of wages recovered.
It shall be unlawful for any person to demand
or accept, in any judicial or administrative
proceedings for the recovery of wages,
attorney’s fees which exceed ten percent of the
amount of wages recovered.
Art 2208, par. 7, Civil Code
In the absence of stipulation, attorney's fees
and expenses of litigation, other than judicial
costs, cannot be recovered, except: xxx (7) in
actions for the recovery of wages of household
helpers, laborers and skilled workers
The employee is entitled to moral damages
when the employer acted a) in bad faith or
fraud; b) in a manner oppressive to labor; or c)
in a manner contrary to morals, good customs,
or public policy [Montinola vs. PAL, GR No.
198656 (2014).
In labor cases, the court may award exemplary
damages "if the dismissal was effected in a
wanton, oppressive or malevolent manner."
[Garcia vs. NLRC, GR. No. 110518 (1994)]
B.3.C. Separation Pay
SEPARATION PAY [(Art. 289 & 290, LC, DOLE
Handbook on Worker’s Statutory Monetary
Benefits, 2014)
Separation pay is defined as the amount that
an employee receives at the time of his
severance from the service and is designed to
provide the employee with the wherewithal
during the period that he is looking for another
employment. [A’ Prime Security Services vs
NLRC (1993

PAGE 124 OF 235

UP LAW BOC LABOR STANDARDS LABOR LAW

Coverage
General Rule:
Cause for Termination Entitlement
Art. 288 Termination by Employer
(b) Serious misconduct or willful
disobedience of lawful orders
(c) Gross and habitual neglect of duties
(d) Fraud or willful breach of trust None
(e) Commission of a crime against employer
or immediate member of his family or
representative
(f) Analogous causes
Art. 289 Installation of labor saving devices or Equivalent to at least 1 month pay or 1 month pay
redundancy for every year of service, whichever is higher
Art. 289 Retrenchment to prevent losses or
closure or cessations of operations of Equivalent to at least 1 month pay or 1/2 month
establishments or undertaking not due to serious pay for every year of service*, whichever is higher
business losses or financial reverses
Art. 290 Disease when continued employment is
Equivalent to at least 1 month pay or 1/2 month
prohibited by law or is prejudicial to his health or
pay for every year of service*, whichever is higher
health of co-employees
Art. 291 Termination by employee whether with or
None
without just cause
*A fraction of at least 6 months shall be considered 1 whole year

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UP LAW BOC LABOR STANDARDS LABOR LAW

Exceptions: Considerations of equity as in the (1) Installation by employer of labor-saving

cases of Filipro, Inc. v. NLRC, Metro Drug Corp. devices;
v. NLRC, Engineering Equipment, Inc. v. NLRC,
(2) Redundancy, as when the position of the
San Miguel Corp v. NLRC. [PLDT vs NLRC
employee has been found to be
(1988)]
excessive or unnecessary in the
An employee who voluntarily resigns is not operation of the enterprise;
entitled to separation pay unless stipulated in
(3) Impossible reinstatement of the
the employment contract, or the collective
employee to his/her former position or
bargaining agreement, or is sanctioned by
to a substantially equivalent position for
established practice or policy of the employer.
reasons not attributable to the fault of
[Phimco Industries vs NLRC (1997); Hinatuan
the employer, as when the
Mining Corp vs NLRC (1997) cited in JPL
reinstatement ordered by a competent
Marketing Promotions v. CA (2005)]
authority cannot be implemented due to
closure of cessation of operations of the
establishment/employer, or the
Amount
position to which he/she is to be
One-Half (1/2) Month Pay per Year of Service reinstated no longer exists and there is
no substantially equivalent position in
An employee is entitled to receive separation
the establishment to which he/she can
pay equivalent to ½ month pay for every year
be assigned. [Gaco vs NLRC (1994)]
of service, a fraction of at least six (6) months
being considered as one whole year, if his/her
separation from the service is due to any of the
Notice of Termination
following authorized causes:
The employer may terminate the
(1) Retrenchment to prevent losses (i.e.
employment of any employee due to the
reduction of personnel effected by
above-mentioned authorized causes by
management to prevent losses);
serving a written notice on the employee and
(2) Closure or cessation of operation of an the DOLE through its regional office having
establishment not due to serious losses jurisdiction over the place of business at least
or financial reverses; and, 1 month before the intended date thereof.
(3) When the EE is suffering from a disease
not curable within a period of six (6)
Basis of Separation Pay
months and his/her continued
employment is prejudicial to his/her The computation of separation pay of an
health or to the health of his/her co- employee shall be based on his/her latest
employees salary rate. [DOLE Handbook on Workers’
Statutory Monetary Benefits, 2014 ed.]
In no case will an employee get less than one
(1) month separation pay if the separation is
due to the above stated causes and he/she
Inclusion of Regular Allowance in the
has served for at least six (6) months. (DOLE
Computation
Handbook on Workers’ Statutory Monetary
Benefits, 2014 ed.) In the computation of separation pay, it would
be error not to integrate the allowance with
the basic salary. The salary base properly used
One-Month Pay per Year of Service in computing the separation pay should
include not just the basic salary but also the
An employee is entitled to separation pay
regular allowances that an employee has been
equivalent to his/her one-month pay for every
receiving. [Planters’ Products, Inc. vs NLRC
year of service, a fraction of at least 6 months
(1989)]
being considered as one whole year, if his/her
separation from service is due to any of the B.4. PREVENTIVE SUSPENSION
following:

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UP LAW BOC LABOR STANDARDS
Preventive suspension is a disciplinary
measure for the protection of the company's
property pending investigation of any alleged
malfeasance or misfeasance committed by
the employee. The employer may place the
worker concerned under preventive
suspension if his continued employment
poses a serious and imminent threat to the life
or property of the employer or of his co-
workers. However, when it is determined that
there is no sufficient basis to justify an
employee's preventive suspension, the latter is
entitled to the payment of salaries during the
time of preventive suspension. [Gatbonton v.
NLRC, G.R. No. 146779 (2006)]
Preventive suspension is justified where the
employee's continued employment poses a
serious and imminent threat to the life or
property of the employer or of the employee's
co-workers. Without this kind of threat,
preventive suspension is not proper. [Artificio
v. NLRC, G.R. No. 172988 (2010)]
DURATION
No preventive suspension shall last longer
than thirty (30) days.
Upon the expiry of such period, the employer
shall thereafter
(1) reinstate the worker in his former or in a
substantially equivalent position or
(2) the employer may extend the period of
suspension provided that during the
period of extension, he pays the wages
and other benefits due to the worker.
[Sec. 9, Rule XXIII, Book V, IRR]
PREVENTIVE SUSPENSION AS A PROTECTIVE
MEASURE V. SUSPENSION AS PENALTY
Preventive suspension is not a penalty in itself.
It is merely a measure of precaution so that the
employee who is charged may be separated,
for obvious reasons, from the scene of his
alleged misfeasance while the same is being
investigated. While [preventive suspension]
may be imposed on a respondent during the
investigation of the charges against him,
[suspension] is the penalty which may only be
meted upon him at the termination of the
investigation or the final disposition of the
case. [PAL v. NLRC, G.R. No. 114307 (1998)
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LABOR LAW
C. RETIREMENT
RETIREMENT PAY [RA 7641 - The Retirement
Pay Law]
Retirement - the result of a bilateral act of the
parties, a voluntary agreement between the
employer and the employee whereby the
latter, after reaching a certain age agrees to
sever his or her employment with the
former ... an employer is free to impose a
retirement age less than 65 for as long as it
has the employees’ consent… having
terminated petitioner solely on the basis of a
provision of a retirement plan which was not
freely assented to by her, respondent was
guilty of illegal dismissal [Jaculbe vs Silliman
University, G.R. No. 156934 (2007)]
Retroactive Effect
The Court imposed two (2) essential requisites
in order that R.A. 7641 may be given
retroactive effect:
(1) the claimant for retirement benefits was
still in the employ of the employer at the
time the statute took effect; and
(2) the claimant had complied with the
requirements for eligibility for such
retirement benefits under the statute.
[Universal Robina Sugar Milling Corp. vs
Caballeda, G.R. No. 156644 (2008)]
C.1. ELIGIBILITY
General Rule: All employees in the private
sector, regardless of their position,
designation, or status, and irrespective of the
method by which their wages are paid [Sec. 1,
IRR, RA 7641]
Exceptions:
(1) Employees covered by the Civil Service
Law;
(2) Domestic helpers and persons in the
personal service of another, and
(3) Employees in retail, service and
agricultural establishments or
operations regularly employing not
more than ten employees [Sec. 2, IRR,
RA 7641]
UP LAW BOC
Exclusions from coverage
R.A. No. 7641, otherwise known as "The
Retirement Pay Law," only applies in a
situation where:
(1) there is no collective bargaining
agreement or other applicable
employment contract providing for
retirement benefits for an employee; OR
(2) there is a collective bargaining
agreement or other applicable
employment contract providing for
retirement benefits for an employee, but
it is below the requirements set for by
law.
The reason for the first situation is to prevent
the absurd situation where an employee, who
is otherwise deserving, is denied retirement
benefits by the nefarious scheme of employers
in not providing for retirement benefits for
their employees. The reason for the second
situation is expressed in the Latin maxim
pacta private juri public derogare non possunt.
Private contracts cannot derogate from the
public law. [Oxales vs Unilab, G.R. No. 152991
2008]
Age of retirement
In the absence of a retirement plan or
agreement providing for retirement benefits of
employees in the establishment, an employee
upon reaching the age of sixty (60) years or
more, but not beyond sixty-five (65) years
which is hereby declared the compulsory
retirement age (and have served the
establishment for at least 5 years). [Sec. 1, IRR,
RA 7641]
Optional retirement – in the absence of a
retirement plan or other applicable
agreement providing for retirement benefits of
EEs in an establishment, an EE may retire
upon reaching the age of 60 or more if he has
served for at least 5 years in said
establishment.
Compulsory retirement – in the absence of a
retirement plan or other applicable
agreement providing for retirement benefits of
EEs in an establishment, an EE shall be retired
at the age of 65 years. [Sec. 4, IRR, RA 7641]
LABOR STANDARDS LABOR LAW
Note: For surface mine workers, the optional
retirement age is 50, while the mandatory
retirement age is now 60. [Sec. 2, RA 10757]
C.2. AMOUNT OF RETIREMENT PAY
The minimum retirement pay shall be
equivalent to one-half (1/2) month salary for
every year of service, a fraction of at least six
(6) months being considered as one whole
year.
For the purpose of computing retirement pay,
“one-half month salary” shall include all of
the following:
(1) Fifteen (15) days salary based on the
latest salary rate;
(2) Cash equivalent of five (5) days of service
incentive leave;
(3) One-twelfth (1/12) of the 13th month pay.
(1/12 x 365/12 = .083 x 30.41 = 2.52)
Thus, “one-half month salary” is equivalent to
22.5 days. [Capitol Wireless, Inc. vs Sec.
Confessor, 1996; Reyes v NLRC, 2007]
Other benefits may be included in the
computation of the retirement pay upon
agreement of the ER and the EE or if provided
in the CBA.
Retirement pay under RA 7641 vis-à-vis
retirement benefits under SSS and GSIS laws
RA 7641 mandates payment of retirement
benefits. All private sector employees
regardless of their position, designation or
status and irrespective of the method by which
their wages are paid are entitled to retirement
benefits upon compulsory retirement at the
age of sixty-five (65) or upon optional
retirement at sixty (60) or more but not 65.
The minimum retirement pay due covered
employees shall be equivalent to one-half
month salary for every year of service, a
fraction of at least six (6) months being
considered as one whole year. The benefits
under this law are other than those granted by
the SSS or the GSIS.
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UP LAW BOC LABOR STANDARDS
Retirement Benefits under a CBA or Applicable
Contract
Any EE may retire or be retired by his/her ER
upon reaching the age established in the CBA
or other applicable agreement/contract and
shall receive the retirement benefits granted
therein; provided, however, that such
retirement benefits shall not be less than the
retirement pay required under RA 7641, and
provided further that if such retirement
benefits under the agreement are less, the ER
shall pay the difference.
Where both the ER and the EE contribute to a
retirement fund pursuant to the applicable
agreement, the ER’s total contributions and
the accrued interest thereof should not be less
than the total retirement benefits to which the
EE would have been entitled had there been
no such retirement benefits’ fund. If such total
portion from the ER is less, the ER shall pay
the deficiency.
C.3. RETIREMENT BENEFITS OF WORKERS
WHO ARE PAID BY RESULTS
For covered workers who are paid by result
and do not have a fixed monthly salary rate,
the basis for the determination of the salary
for 15 days shall be their average daily salary
(ADS). The ADS is derived by dividing the total
salary or earning for the last 12 months
reckoned from the date of retirement by the
number of actual working days in that
particular period, provided that the
determination of rates of payment by results
are in accordance with established regulations.
C.4. RETIREMENT BENEFIT OF PART-TIME
WORKERS
Part-time workers are also entitled to
retirement pay of “one-month salary” for every
year of service under RA 7641 after satisfying
the following conditions precedent for
optional retirement:
(a) There’s no retirement plan between the
ER and the EE; and,
(b) The EE should have reached the age of
60 years, and should have rendered at
least 5 years of service with the ER.
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LABOR LAW
Applying the foregoing principle, the
components of retirement benefit of part-time
workers may likewise be computed at least in
proportion to the salary and related benefits
due them. [DOLE Handbook on Workers’
Statutory Monetary Benefits, 2014 ed.]
C.5. TAXABILITY
Any provision of law to the contrary
notwithstanding, the retirement benefits
received by officials and employees of
private firms, whether individual or
corporate , in accordance with a reasonable
private benefit plan maintained by the
employer shall be exempt from all taxes
and shall not be liable to attachment,
garnishment, levy or seizure by or under any
legal or equitable process whatsoever
except to pay a debt of the official or
employee concerned to the private benefit
plan or that arising from liability imposed in
a criminal action: Provided, That the
retiring official or employee has been in the
service for at least ten (10) years and is not
less than fifty years of age at the time of his
retirement: Provided, further, That the
benefits granted under this Act shall be
availed of by an official or employee only
once; Provided, finally, That in case of
separation of an official or employee from
the service of the employer due to death,
sickness, or other physical disability or for
any cause beyond the control of the said
official or employee, any amount received
by him or by his heirs from the employer as
a consequence of such separation shall
likewise be exempt as hereinabove
provided.
As used in this Act, the term "reasonable
private benefit plan" means a pension,
gratuity, stock bonus or profit sharing plan
maintained by an employer for the benefit
of some or all of his officials and employees,
wherein contributions are made by such
employer or officials and employees, or
both, for the purpose of distributing to such
officials and employees the earnings and
principal of the fund thus accumulated, and
wherein it is provided in said plan that at no
time shall any part of the corpus or income
of the fund be used for, or be diverted to,
any purpose other than for the exclusive
UP LAW BOC LABOR STANDARDS
benefit of the said officials and
employees.[Sec. 1, RA 4917]
Any provision of law to the contrary
notwithstanding, the retirement benefits
received by officials and employees of private
firms, whether individual or corporate, in
accordance with a reasonable private benefit
plan maintained by the employer
(1) shall be exempt from all taxes and
(2) shall not be liable to attachment,
garnishment, levy or seizure by or under
any legal or equitable process
whatsoever [Intercontinental
Broadcasting Corp. v Amorilla, 2006]
Exception
Except to pay a debt of the official or employee
concerned to the private benefit plan or that
arising from liability imposed in a criminal
action:
Additional conditions
(a) That the retiring official or employee has
been in the service of the same employer
for at least ten (10) years and is not less
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LABOR LAW
than fifty years of age at the time of his
retirement;
(b) That the retirement benefits shall be
availed of by an official or employee only
once; and,
(c) That in case of separation of an official
or employee from the service of the
employer due to death, sickness or other
physical disability or for any cause
beyond the control of the said official or
employee, any amount received by him
or by his heirs from the employer as a
consequence of such separation shall
likewise be exempt as hereinabove
provided.
Reasonable private benefit plan - means a
pension, gratuity, stock bonus or profit sharing
plan maintained by an employer for the
benefit of some or all of his officials and
employees, wherein contributions are made
by such employer or officials and employees,
or both, for the purpose of distributing to such
officials and employees the earnings and
principal of the fund thus accumulated, and
wherein it is provided in said plan that at no
time shall any part of the corpus or income of
the fund be used for, or be diverted to, any
purpose other than for the exclusive benefit of
the said officials and employees.
UP LAW BOC
V. Management
Prerogative
Sec. 20, Art II, Constitution
Section 20. The State recognizes the
indispensable role of the private sector,
encourages private enterprise, and provides
incentives to needed investments
Sec. 3, pars. 3 and 4, Art XIII, Constitution
The State shall promote the principle of
shared responsibility between workers and
employers and the preferential use of
voluntary modes in settling disputes,
including conciliation, and shall enforce their
mutual compliance therewith to foster
industrial peace.cralaw
The State shall regulate the relations between
workers and employers, recognizing the right
of labor to its just share in the fruits of
production and the right of enterprises to
reasonable returns to investments, and to
expansion and growth.
The right of an employer to regulate all
aspects of employment, aptly called
“management prerogative,” gives employers
the freedom to regulate, according to their
discretion and best judgment, all aspects of
employment, including work assignment,
working methods, processes to be followed,
working regulations, transfer of employees,
work supervision, lay-off of workers and the
discipline, dismissal and recall of workers. In
this light, courts often decline to interfere in
legitimate business decisions of employers. In
fact, labor laws discourage interference in
employers’ judgment concerning the conduct
of their business. xxx Among the employer’s
management prerogatives is the right to
prescribe reasonable rules and regulations
necessary or proper for the conduct of its
business or concern, to provide certain
disciplinary measures to implement said rules
and to assure that the same would be
complied with. At the same time, the
employee has the corollary duty to obey all
reasonable rules, orders, and instructions of
the employer; and willful or intentional
LABOR STANDARDS LABOR LAW
disobedience thereto, as a general rule,
justifies termination of the contract of service
and the dismissal of the employee [St. Luke’s
Medical Center, Inc. vs Sanchez, G.R. 212054
(2015)].
The employer’s right to conduct the affairs of
his business, according to its own discretion
and judgment, is well-recognized. An
employer has a free reign and enjoys wide
latitude of discretion to regulate all aspects of
employment. This is a management
prerogative, where the free will of
management to conduct its own affairs to
achieve its purpose takes form. [Torreda vs.
Toshiba, G.R. No. 165960 (2007)]
So long as a company’s management
prerogatives are exercised in good faith for the
advancement of the employer’s interest and
not for the purpose of defeating or
circumventing the rights of the employees
under special laws or under valid agreements,
this Court will uphold them… Even as the law
is solicitous of the welfare of the employees, it
must also protect the right of an employer to
exercise what are clearly management
prerogatives. The free will of management to
conduct its own business affairs to achieve its
purpose cannot be denied. [Ernesto G.
Ymbong vs. ABS-CBN Broadcasting Corp., G.R.
No. 184885 (2012)]
The law in protecting the rights of the
employees authorizes neither oppression nor
self-destruction of the employer. It should be
made clear that when the law tilts the scale of
justice in favor of labor, it is but a recognition
of the inherent economic inequality between
labor and management. Never should the
scale be so tilted if the result is an injustice to
the employer. [Panuncillo v CAP, G.R. No.
161305 (2007)]
Under the doctrine of management
prerogative, every employer has the inherent
right to regulate, according to his own
discretion and judgment, all aspects of
employment, including hiring, work
assignments, working methods, the time,
place and manner of work, work supervision,
transfer of employees, lay-off of workers, and
discipline, dismissal, and recall of employees.
The only limitations to the exercise of this
prerogative are those imposed by labor laws
and the principles of equity and substantial
PAGE 131 OF 235
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justice. [Peckson v Robinson’s Supermarket resolve labor disputes involving

Corporation, G.R. No. 198534, (2013)] industries indispensable to national
interest.
The exercise of management prerogative is
valid provided it is not performed in a The company’s management
malicious, harsh, oppressive, vindictive or prerogatives are not being unjustly
wanton manner or out of malice or spite. curtailed but duly tempered by the
[Magdadaro v. PNB, G.R. No. 166198 (2009)] limitations set by law, taking into
account its special character and the
particular circumstances in the case at
Limits to Management Prerogative bench. [Metrolab Industries, Inc. v.
Roldan-Confesor, G.R. No. 108855
(1) Good faith - So long as a company’s
(2013)]
management prerogatives are exercised
in good faith for the advancement of the (4) Collective Bargaining – The CBA
employer’s interest and not for the provisions agreed upon by the Company
purpose of defeating or circumventing the and the Union delimit the free exercise
rights of the employees under special of management prerogative. The parties
laws or under valid agreements, this in a CBA may establish such stipulations,
Court will uphold them…Even as the law clauses, terms and conditions as they
is solicitous of the welfare of the may deem convenient provided these
employees, it must also protect the right are not contrary to law, morals, good
of an employer to exercise what are customs, public order or public policy.
clearly management prerogatives. The Where the CBA is clear and
free will of management to conduct its unambiguous, it becomes the law
own business affairs to achieve its between the parties and compliance
purpose cannot be denied. [Ernesto G. therewith is mandated by the express
Ymbong vs. ABS-CBN Broadcasting policy of the law. [Goya v. Goya, Inc.,
Corp., G.R. No. 184885 (2012)] Employees Union-FFW, G.R. No. 170054
(2013)]
(2) Without grave abuse of discretion - But,
like other rights, there are limits thereto. (5) Equity and/or Substantial Justice – The
The managerial prerogative to transfer Court recognized the inherent right of
personnel must be exercised without the employer to discipline its employees
grave abuse of discretion, bearing in but it should still ensure that the
mind the basic elements of justice and employer exercises the prerogative to
fair play. Having the right should not be discipline humanely and considerately,
confused with the manner in which the and that the sanction imposed is
right is exercised. [Tinio vs. CA, G.R. No. commensurate to the offense involved
171764 (2007)] and to the degree of the infraction. The
discipline exacted by the employer
(3) Law – In one case, a pharmaceutical
should further consider the employee’s
company defended its termination of
length of service and the number of
rank and file employees during a
infractions during his employment.
bargaining deadlock, as an exercise of
[Dongon v. Rapid Movers and Forwarders
management prerogative. This was
Co., Inc., G.R. No. 163431 (2013)]
after the Labor Secretary had assumed
jurisdiction over the dispute and
enjoined the parties from “any acts
Assumption of jurisdiction by the Secretary of
which might exacerbate the situation.”
Labor
The Court disagreed with the company’s
This Court declared that it recognizes the
defense, stating that the privilege is not
exercise of management prerogatives and it
absolute but subject to limitations
often declines to interfere with the legitimate
imposed by law. In this case, it is limited
business decisions of the employer… However,
by Sec. 236(g), which gives the Secretary
as expressed in PAL vs. NLRC, the privilege is
the power to assume jurisdiction and
PAGE 132 OF 235
UP LAW BOC LABOR STANDARDS
not absolute, but subject to exceptions. One of
these exceptions is when the Secretary of
Labor assumes jurisdiction over labor disputes
involving industries indispensable to the
national interest under Article 263(g) of the
Labor Code. [University of Immaculate
Concepcion Inc. vs. Sec. of Labor, G.R. No.
151379 (2005)]
A. DISCIPLINE
Management has the prerogative to discipline
its employees and to impose appropriate
penalties on erring workers pursuant to
company rules and regulations. [Jose P.
Artificio vs. NLRC, G.R. No. 172988 (2010)]
The employer’s right to conduct the affairs of
his business, according to its own discretion
and judgment, includes the prerogative to
instill discipline in its employees and to
impose penalties, including dismissal, upon
erring employees. The only criterion to guide
the exercise of its management prerogative is
that the policies, rules and regulations on
work-related activities of the employees must
always be fair and reasonable and the
corresponding penalties, when prescribed,
commensurate to the offense involved and to
the degree of the infraction. [Consolidated
Food Corporation vs. NRLC, G.R. No. 118647
(1999)] [St. Michael’s Institute vs. Santos, G.R.
No. 145280 (2001)]
Right to dismiss or otherwise impose
disciplinary sanctions upon an employee for
just and valid cause, pertains in the first place
to the employer, as well as the authority to
determine the existence of said cause in
accordance with the norms of due process.
[Makati Haberdashery, Inc. vs. NLRC, G.R. Nos.
83380-81 (1989)]
Although the right of employers to shape their
own work force,is recognized, this
management prerogative must not curtail the
basic right of employees to security of tenure.
[Alert Security & Investigation Agency, Inc. vs.
Saidali Pasawilan, et. al., G.R. No. 182397
(2011)]
B. TRANSFER OF EMPLOYEES
An employee’s right to security of tenure does
not give him such a vested right in his position
PAGE 133 OF 235
LABOR LAW
as would deprive the company of its
prerogative to change his assignment or
transfer him where he will be most useful.
The Employer has the right to transfer or
assign Employees from one area of operation
to another, or one office to another or in
pursuit of its legitimate business interest,
Provided there is no demotion in rank or
diminution of salary, benefits and other
privileges and not motivated by discrimination
or made in bad faith, or effected as a form of
punishment or demotion without sufficient
cause. [Westin Phil. Plaza Hotel vs. NLRC, G.R.
No. 121621 (1999)]
When the transfer is not unreasonable, or
inconvenient, or prejudicial to the employee,
and it does not involve a demotion in rank or
diminution of salaries, benefits, and other
privileges, the employee may not complain
that it amounts to a constructive dismissal.
[Bisig ng Manggagawa sa TRYCO v. NLRC,
G.R. No. 151309 (2008)]
It is management prerogative for employers to
transfer employees on just and valid grounds
such as genuine business necessity. [William
Barroga vs. Data Center College of the
Philippines, G.R. No. 174158 (2011)]
Re-assignments made by management
pending investigation of irregularities
allegedly committed by an employee fall
within the ambit of management prerogative.
The purpose of reassignments is no different
from that of preventive suspension which
management could validly impose as a
disciplinary measure for the protection of the
company's property pending investigation of
any alleged malfeasance or misfeasance
committed by the employee. [Ruiz s.v Wendel
Osaka Realty Corp., G.R. No. 189082 (2012)]
In cases of a transfer of an employee, the rule
is settled that the employer is charged with
the burden of proving that its conduct and
action are for valid and legitimate grounds
such as genuine business necessity and that
the transfer is not unreasonable, inconvenient
or prejudicial to the employee. If the employer
cannot overcome this burden of proof, the
employee’s transfer shall be tantamount to
unlawful constructive dismissal. [Jonathan
Morales v. Harbor Centre Port Terminal Inc.,
G.R. No. 174208 (2012)]
UP LAW BOC LABOR STANDARDS
C. PRODUCTIVITY STANDARD
The employer has the right to demote and
transfer an employee who has failed to
observe proper diligence in his work and
incurred habitual tardiness and absences and
indolence in his assigned work. [Petrophil
Corporation vs. NLRC, G.R. No. L-64048
(1986)]
In the consolidated cases of Leonardo vs.
NLRC [G. R. No. 125303 (2000)] and Fuerte vs.
Aquino [G. R. No. 126937 (2000)], the
employer claimed that the employee was
demoted pursuant to a company policy
intended to foster competition among its
employees. Under this scheme, its employees
are required to comply with a monthly sales
quota. Should a supervisor such as the
employee fail to meet his quota for several
consecutive months, he will be demoted,
whereupon his supervisor’s allowance will be
withdrawn and be given to the individual who
takes his place. When the employee
concerned succeeds in meeting the quota
again, he is re-appointed supervisor and his
allowance is restored. The Supreme Court
held that this arrangement is an allowable
exercise of company rights since an employer
is entitled to impose productivity standards for
its workers. In fact, non-compliance may be
visited with a penalty even more severe than
demotion.
D. GRANT OF BONUS
A bonus is "a gratuity or act of liberality of the
giver which the recipient has no right to
demand as a matter of right" [Aragon vs. Cebu
Portland Cement Co., 61 O.G. 4597]. "It is
something given in addition to what is
ordinarily received by or strictly due the
recipient." The granting of a bonus is basically
a management prerogative which 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 employee's basic salaries or wages" xxx
[Kamaya Point Hotel vs. National Labor
Relations Commission, Federation of Free
Workers and Nemia Quiambao, G.R. No.
75289, (1989)]. [Traders Royal Bank vs. NLRC,
G.R. No. 120592 (1990)]
PAGE 134 OF 235
LABOR LAW
The matter of giving a bonus over and above
the worker’s lawful salaries and allowances is
entirely dependent on the financial capability
of the employer to give it. [Kimberly-Clark
Philippines, Inc. vs. Dimayuga, G.R. No. 177705
(2009)]
E. CHANGE OF WORKING HOURS
Management retains the prerogative,
whenever exigencies of the service so require,
to change the working hours of its
employees. So long as such prerogative is
exercised in good faith for the advancement of
the employer’s interest and not for the
purpose of defeating or circumventing the
rights of the employees under special laws or
under valid agreements, this Court will uphold
such exercise. [Sime Darby Pilipinas Inc. v.
NLRC, G.R. No. 119205 (1998)]
F. RULES ON MARRIAGE BETWEEN
EMPLOYEES OF COMPETITOR-
EMPLOYERS
In the recent case of Duncan Association of
Detailman-PTGWO and Pedro Tecson v. Glaxo
Wellcome Philippines, Inc., we passed on the
validity of the policy of a pharmaceutical
company prohibiting its employees from
marrying employees of any competitor
company. We held that Glaxo has a right to
guard its trade secrets, manufacturing
formulas, marketing strategies and other
confidential programs and information from
competitors. We considered the prohibition
against personal or marital relationships with
employees of competitor companies upon
Glaxo’s employees reasonable under the
circumstances because relationships of that
nature might compromise the interests of
Glaxo. In laying down the assailed company
policy, we recognized that Glaxo only aims to
protect its interests against the possibility that
a competitor company will gain access to its
secrets and procedures. [Star Paper Corp. vs.
Simbol, G.R. No. 164774 (2006)]
G. POST-EMPLOYMENT BAN
UP LAW BOC LABOR STANDARDS LABOR LAW

In cases where an employee assails a contract

containing a provision prohibiting him or her VI. Social Welfare
from accepting competitive employment as
against public policy, the employer has to
Legislation
adduce evidence to prove that the restriction A. SSS LAW [RA 8282]
is reasonable and not greater than necessary
to protect the employer’s legitimate business A.1. COVERAGE & EXCLUSIONS
interests. The restraint may not be unduly A.1.a. Coverage [1997, 2000, 2008, 2009 Bar
harsh or oppressive in curtailing the Question]
employee’s legitimate efforts to earn a
livelihood and must be reasonable in light of A.1.b. Compulsory [Sec. 9 [a]; Sec. 9-A]
sound public policy. [Rivera vs. Solidbank, G.R. (1) Employees not over 60 years of age and
No. 163269 (2006)] their employers, including domestic
helpers with at least P1,000 monthly
pay; and
(2) Self-employed as may be determined by
the Commission, but not limited to:
a) Self-employed professionals
b) Partners and single proprietors of
businesses
c) Actors and actresses, directors,
scriptwriters, and news
correspondents who do not fall
within the definition of the term
“employee” under Section 8 [d]
d) Professional athletes, coaches,
trainers and jockeys
e) Individual farmers and fishermen

A domestic worker who has rendered at least

one [1] month of service shall be covered by the
Social Security System [SSS], the Philippine
Health Insurance Corporation [PhilHealth],
and the Home Development Mutual Fund or
Pag-IBIG, and shall be entitled to all the
benefits in accordance with the pertinent
provisions provided by law.
Premium payments or contributions shall be
shouldered by the employer. However, if the
domestic worker is receiving a wage of Five
thousand pesos [P5,000.00] and above per
month, the domestic worker shall pay the
proportionate share in the premium payments
or contributions, as provided by law.
The domestic worker shall be entitled to all
other benefits under existing laws. [Sec. 30,
Kasambahay Law [RA 10361]]

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UP LAW BOC
A.1.c. Voluntary [Sec. 9]
(1) Spouses who devote full time to
managing household and family affairs,
unless they are also engaged in other
vocation or employment [which is
subject of compulsory coverage];
(2) OFWs recruited by foreign-based
employers;
(3) Employees [previously under
compulsory coverage] already
separated from employment or those
self-employed [also under compulsory
coverage] with no realized income for a
given month, who chose to continue
with contributions to maintain right to
full benefit.
Note: Foreign governments, international
organizations or their wholly owned
instrumentality employing workers in the
Philippines may enter into an agreement with
the Philippine government to include their
employees in the SSS except those already
covered by their civil service retirement
system.
A.1.d. Exclusions from Coverage [Sec. 8 [j]]
(1) Employment purely casual and not for
the purpose of occupation or business of
the employer.
(2) Service performed on or in connection
with an alien vessel by an employee if he
is employed when such vessel is outside
the Philippines;
(3) Service performed in the employ of the
Philippine Government or
instrumentality or agency thereof;
(4) Service performed in the employ of a
foreign government or international
organization, or their wholly-owned
instrumentalities; and
(5) Services performed by temporary and
other employees which may be excluded
by SSS regulation. Employees of bona
fide independent contractors shall not
be deemed employees of the employer
engaging the services of said
contractors.
LABOR STANDARDS LABOR LAW
A.2. DEPENDENTS, BENEFICIARIES
1. Primary
(1) Dependent spouse – until
remarriage [see above];
(2) Dependent children [legitimate,
legitimated, legally adopted, and
illegitimate] [see above];
illegitimate children are entitled
only to 50% of the share of
legitimate children unless there are
no legitimate children, in which
case, they get 100%.
2. Secondary
Shall only receive when the primary
beneficiaries are absent
(1) Dependent parents
3. Others – shall only receive when the primary
and secondary beneficiaries are absent
(1) Any other person designated by
member as his/her secondary
beneficiary.
A.3. BENEFITS
A.3.a. Monthly pension [Sec.12]
Computation of monthly pension
The monthly pension shall be the highest of
the following amounts:
(1) P300 + [20% x [average monthly credit]]
+ [2% x [average monthly credit] x [# of
cash credited years of service in excess
of 10 years]];
(2) 40% x [average monthly credit];
(3) P1,000; provided, that the monthly
pension shall in no case be paid for an
aggregate amount of less than 60
months.
Note: Notwithstanding the abovementioned,
minimum pension is P1,200 for members with
at least 10 years credit service, P2,400 for
those with 20 years.
A.3.b. Dependents’ pension [Sec. 12-A]
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UP LAW BOC LABOR STANDARDS
(1) Paid on account of members’
I. death,
II. retiring, or
III. permanent total disability;
(2) Paid to each child conceived on or prior
to contingency, but not exceeding 5,
beginning with the youngest and
preferring the legitimate;
(3) Amount is either P250 or 10% of the
monthly pension as computed above,
whichever is higher.
A.3.c. Retirement benefits [Sec. 12-B]
Eligibility requirements
(1) 120 monthly contributions;
(2) Age
I. 65 years old; or
II. a member who has reached 60 years
may also avail if he is already
separated from employment or has
ceased to be self-employed.
Benefit – entitlement to monthly pension from
retirement until death.
The monthly pension shall be suspended upon
the reemployment or resumption of self-
employment of a retired member who is less
than sixty-five [65] years old.
In Case of Death of Member
(1) His/her primary beneficiaries as of the
date of his/her retirement shall be
entitled to receive the monthly pension;
or
(2) If he/she has no primary beneficiaries
AND he/she dies within sixty [60]
months from the start of his/her
monthly pension, his/her secondary
beneficiaries shall be entitled to a lump
sum benefit equivalent to the total
monthly pensions corresponding to the
balance of the five-year guaranteed
period, excluding the dependents’
pension.
Lump Sum Alternative
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LABOR LAW
Member may opt to receive his first 18 monthly
pensions in lump sum but such is discounted
at a preferential rate of interest.
Lump Sum Eligibility
A 60 year old member with less than 120
monthly contributions who is no longer
employed or self-employed, and who is not
continuing contributions independently, he is
entitled to a lump sum equal to his total
contributions paid.
A.3.d. Permanent disability benefits [Sec. 13-A]
Eligibility requirement
(1) 36 monthly contributions prior to the
semester of disability; same as death
benefit; the only difference is that the
pension is paid directly to the member.
(2) In case the permanently disabled
member dies, it would be given the
same treatment as a retiree dying.
(3) For permanent partial disability, the
pension is not lifetime. [e.g. loss of
thumb entitles member to only 10
months of pension, while loss of arm 50
months]. It shall be paid in lump sum if
the period is less than 12 months.
(4) For multiple partial disabilities, they
shall be additive when related or
deteriorating – the percentage shall be
equal to the number of months the
partial disability is entitled to, divided by
75 months. [e.g. loss of sight in one eye
 25/75; loss of arm  50/75; if both
occur due to same cause, then 25/75 +
50/75 = 100% so treated as if it were
permanent total disability]
Lump Sum Alternative
A member is entitled to a lump sum benefit
equivalent to the monthly pension times the
number of monthly contributions paid to the
SSS or twelve [12] times the monthly pension,
whichever is higher.
Lump Sum Eligibility
UP LAW BOC
A member who has not paid at least 36
monthly contributions
Note: A member who [1] has received a lump
sum benefit; and [2] is reemployed or has
resumed self-employment not earlier than
one [1] year from the date of his disability shall
again be subject to compulsory coverage and
shall be considered a new member.
In Case of Death of Member
(1) His primary beneficiaries as of the date
of disability shall be entitled to receive
the monthly pension; OR
(2) If he has no primary beneficiaries and he
dies within sixty [60] months from the
start of his monthly pension, his
secondary beneficiaries shall be entitled
to a lump sum benefit equivalent to the
total monthly pensions corresponding
to the balance of the five-year
guaranteed period excluding the
dependents’ pension.
A.3.e. Death benefits [Sec. 13]
Eligibility requirement
36 monthly contributions prior to the semester
of death.
Benefit – monthly pension to primary or a
lump sum benefit equivalent to thirty-six [36]
times the monthly pension secondary
beneficiaries.
To those ineligible – lump sum benefit which
shall be the higher between the two:
• [monthly pension] x 12; or
• [monthly pension] x [# of monthly
contributions]
A.3.f. Funeral benefits [13-B]
P12,000 in cash or in kind, upon death of
member
A.3.g. Loan
LABOR STANDARDS LABOR LAW
Social Security Commission Resolution No.
669. Moreover, several SSS-issued circulars
such as Circular No. 21-P and No. 52 pertain to
the treatment of salary loans, sometimes
providing for more flexible payment terms or
condonation for delinquent payers; Santiago
v. CA and SSS, GR # L-39949 [1984] resolved
an issue involving the treatment of salary loan
repayments; SSS website also shows loans
A.3.h. Sickness benefits [Sec. 14]
Eligibility requirements and other conditions
(1) Inability to work due to sickness or injury
(2) Confined for at least 4 days either in a
hospital or elsewhere with SSS
approval;
(3) At least 3 months of contributions in the
12 month period immediately before the
semester of sickness or injury has been
paid;
(4) All company sick leaves with pay for the
current year have been used up;
(5) Maximum of 120 days per 1 calendar
year [i.e maximum permissible for the
same sickness and confinement is 240
days for 2 consecutive years];
(6) The employer has been notified, or, if a
separated, voluntary or self-employed
member, the SSS directly notified within
5 days of confinement;
(7) Notice to employer or SSS not needed
when confinement is in a hospital;
notice to employer not required as well
when Employee became sick or injured
while working or within premises of the
employer.
Benefit: daily cash allowance paid for the
number of days a member is unable to work
due to sickness or injury equivalent to 90% x
[average daily salary credit]
Note: One hundred percent [100%] of the daily
benefits provided in the preceding paragraph
shall be reimbursed by the SSS to said
employer upon receipt of satisfactory proof of
such payment and legality thereof if the
following conditions are met:
PAGE 138 OF 235
UP LAW BOC LABOR STANDARDS LABOR LAW

(1) The employer notified the SSS of the

confinement within five calendar days
Employer’s Reimbursement
after receipt of the notification from the
employee member That the SSS shall immediately reimburse the
employer of one hundred percent [100%] of
(2) If the notification to the SSS is made by
the amount of maternity benefits advanced to
the employer beyond five calendar days
the employee by the employer upon receipt of
after receipt of the notification from the
satisfactory proof of such payment and
employee member, he shall be
legality thereof.
reimbursed only for each day of
confinement starting from the tenth Note: All of these benefits are tax-exempt.
calendar day immediately preceding the
date of notification to the SSS.
(3) SSS shall reimburse the employer or pay
B. GSIS [RA 8291]
the unemployed member only for B.1. COVERAGE & EXCLUSIONS
confinement within the one-year period
B.1.A. Coverage
immediately preceding the date the
claim for benefit or reimbursement is All public sector employees below the
received by the SSS, except confinement compulsory retirement age of 65, irrespective
in a hospital in which case the claim for of employment status. [Sec. 3]
benefit or reimbursement must be filed
within one [1] year from the last day of
confinement. B.1.B. Exclusions from Coverage [Sec. 3]
(1) AFP and PNP;
A.3.i. Maternity leave benefits [Sec. 14-A] (2) Members of the Judiciary and
Constitutional Commissions who are
Eligibility Requirements [2000, 2005, 2007,
covered ONLY by life insurance as they
2010 Bar Question]
have separate retirement schemes;
(1) A female member
(3) Contractual employees with no
(2) Paid at least three [3] monthly employer-employee relationship with
contributions in the twelve-month the agency they serve.
period immediately preceding the
semester of her childbirth or miscarriage
B.2. DEPENDENTS, BENEFICIARIES
(3) She shall have notified her employer of
her pregnancy and the probable date of B.2.A. Primary
her childbirth, which notice shall be
(1) Dependent spouse – until remarriage;
transmitted to the SSS in accordance
with the rules and regulations it may (2) Dependent children (legitimate,
provide; legitimated, legally adopted, and
illegitimate) – but RA 8291 does not
distinguish share of legitimate and
Process illegitimate children.
The full payment shall be advanced by the
employer within thirty [30] days from the filing
of the maternity leave application;

Coverage
B.2.B. Secondary
The maternity benefits provided under this
section shall be paid only for the first four [4] Shall only receive when the primary
deliveries or miscarriages; beneficiaries are absent:

PAGE 139 OF 235

UP LAW BOC LABOR STANDARDS
(1) Dependent parents
(2) Legitimate descendants, subject to the
restrictions on dependent children.
B.3. BENEFITS
Computation of Service [Sec. 10]
From date of original appointment/election,
including periods of service at different times
under one or more employers, those
performed overseas under the authority of the
Republic of the Philippines, and those that
may be prescribed by the GSIS in coordination
with the Civil Service Commission.
In case of reinstatement in the service of an
employer and subsequent retirement or
separation which is compensable under this
Act, all service credited for retirement,
resignation or separation for which
corresponding benefits have been awarded
under this Act or other laws shall be excluded
in the computation of service
Note: The GSIS may prescribe rules for the
inclusion of part time and other services with
compensation.
B.3.1. Monthly Pension [Sec. 9]
The amount shall be:
(a) 37.5% x [revalued ave. monthly
compensation]
(b) Plus 2.5 x [revalued ave. monthly
compensation] x [years in service in
excess of 15 years].
• Provided, the monthly pension shall
not exceed 90% of the average
monthly compensation.
• It shall not be less than P2,400 for
those with 20 years of service and
not less than P1,300 for everyone
else.
B.3.2. Retirement Benefits [Sec. 13]
Eligibility requirements [Sec. 13-A]
(1) At least 15 years of service;
PAGE 140 OF 235
LABOR LAW
(2) At least 60 years of age; and
(3) Not receiving pension benefit from
permanent total disability.
Note: Retirement is compulsory for employees
65 years of age who have rendered at least 15
years of service; if employee has less than 15
years of service, he may be allowed to continue
in accordance with civil service laws. [Sec. 13]
Benefit [Sec. 13]: Choice between
(a) 60 x [basic monthly pension] lump sum
payment [Sec. 2] at the time of
retirement plus basic monthly pension
payable monthly for life after expiry of
the 5-year guaranteed period which is
already covered by the lump sum; or
(b) Cash payment equivalent to 18 x [basic
monthly pension] plus monthly pension
for life immediately but with no 5-year
guarantee
Note: Subject to periodic adjustment [Sec. 14]
B.3.3. Permanent Disability Benefits
Disabilities Deemed Total and Permanent
[Sec. 16]
(a) Complete loss of sight of both eyes;
(b) Loss of 2 limbs at or above the ankle or
wrist
(c) Permanent complete paralysis of 2
limbs
(d) Brain injury resulting in incurable
imbecility or insanity
(e) Such other cases as may be determined
by the GSIS
Disabilities Deemed Partial and Permanent
[Sec. 17]
(a) Complete and permanent loss of the use
of:
(i) Any finger
(ii) Any toe
(iii) One arm
(iv) One hand
UP LAW BOC LABOR STANDARDS
(v) One foot
(vi) One leg
(vii) One or both ears
(viii) Hearing of one or both ears
(ix) Sight of one eye
(b) Such other cases as may be determined
by the GSIS
Eligibility Requirements for Permanent Total
Disability
(1) Disability not due to employee’s own
grave misconduct, notorious
negligence, habitual intoxication, or
willful intention to kill himself or
another; [Sec. 15]
(2) Employee is:
(a) in service at the time of disability; or
(b) even if separated, he has paid at
least 36 monthly contributions
within the 5-year period
immediately prior to disability or has
paid a total of at least 180 monthly
contributions prior to disability; and
(c) Member is not enjoying old-age
retirement benefit. [Sec. 16]
Benefit for Permanent Total Disability
• Monthly income benefit for life equal to
basic monthly pension – This is effective
from date of disability;
• If member is in service at the time of
disability and he has paid at least 180
monthly contributions, in addition to the
monthly income benefit, he shall receive
an additional cash payment of 18 times
basic monthly pension.
To the ineligible
If member has rendered at least 3 years of
service, then he shall receive cash payment
equal to 100% of ave. monthly compensation
for each year of service [essentially total
PAGE 141 OF 235
LABOR LAW
amount of contributions made] or P12,000
whichever is higher. [Sec. 16]
Partial Disability
Paid according to GSIS prescribed schedule
(this is similar to the scheme used by SSS);
member availing of permanent partial
disability must satisfy condition regarding the
disability not being due to his own fault and
either regarding employment status and
services rendered. (See Eligibility
requirements for Permanent Total Disability)
B.3.4. Death benefits [Sec. 21]
When member dies, the primary beneficiaries
are entitled to only one of the following:
(1) Survivorship pension
(a) If he was in the service when he died;
or
(b) Even if separated from the service,
he has at least 3 years of service and
has paid 36 monthly contributions
within the 5 years immediately
preceding death; or
(c) Even if separated from the service,
he has paid 180 monthly
contributions prior to death.
(2) Survivorship pension plus cash payment
of 100% ave. monthly compensation for
every year of service (pension plus total
contributions made)
(a) If he was in the service when he died;
and
(b) With 3 years of service.
(3) Cash payment equivalent to 100% ave.
monthly compensation for each year of
service he paid contributions or P12,000
whichever is higher
(a) With 3 years of service; and
(b) He has failed to qualify in the prior 2
schemes.
B.3.5. Funeral benefits [Sec. 23]
The amount shall be fixed by GSIS rules and
regulations
UP LAW BOC LABOR STANDARDS LABOR LAW

Who are entitled: B.3.8. Separation Benefits [Sec. 11]

(1) Active member; Eligibility requirements
(2) Member separated from service but still (1) 60 years of age, or separation from
entitled to funeral benefit; service with at least 3 years but not over
15 years served
(3) Pensioner;
(2) Below 60 years of age, but at least 15
(4) Retiree who at the time of retirement
years of service rendered.
was of pensionable age but opted to
retire under RA 1616.
Benefit
B.3.6. Loan (1) For 60 years of age or separated from
service with 3 to 15 years of service: cash
GSIS website provides for this. The following
payment of 100% of ave. monthly
are the loans provided online:
compensation for each year of service
(1) Consolidated Loan (total amount of all contributions paid)
or P12,000 whichever is higher.
(2) Policy Loan
(2) Below 60 years of age and at least 15
(3) Emergency Loan
years of service: cash payment
(4) Pension Loan equivalent to 18 x [monthly pension] at
the time of resignation or separation
plus an old-age pension benefit equal to
B.3.7. Temporary Disability Benefits [Sec. 18] basic monthly pension.
Similar to sickness.
B.3.9. Unemployment Benefits [Sec. 12]
Eligibility requirements and other conditions: Eligibility requirements
(1) Employee must be: (1) Employee separated from service due to
(a) in service at the time of disability; or abolition of his office or position; and

(b) if separated, he has rendered at (2) Employee has been paying integrated
least 3 years of service and paid at contributions for at least 1 year prior to
least 6 monthly contributions in the separation.
12 month period immediately prior
to disability;
Benefit
(2) All sick leave credits including CBA sick
leaves for the current year has been Monthly cash payments of 50% of average
used up; and monthly compensation for a duration which is
proportional to years rendered, ranging from
(3) Maximum of 120 days per 1 calendar 2 months to 6 months.
year (so maximum permissible for the
same sickness and confinement is 240
days for 2 consecutive years).

Benefit B.3.10. Survivorship Benefits [Sec. 20]

75% of the current daily compensation for Beneficiaries are entitled to the following:
every day or fraction thereof of disability or
(1) Basic survivorship pension which is 50%
P70 whichever is higher.
of basic monthly pension; (see Death
Benefits) and
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UP LAW BOC LABOR STANDARDS LABOR LAW

(2) Dependent children’s pension not

exceeding 50% of the basic monthly
pension.

B.3.11. Life Insurance Benefits [Sec. 24]

Note: Judiciary and Constitutional
Commissions are entitled to life insurance
only.
SSS GSIS
RA 1161 as amended by RA 8282:
Enabling law RA 8291 amending PD 1146
Social Security Act of 1997

Employer – any person, natural or juridical,

Employer – National government, its
domestic or foreign, who carries on in the
political subdivisions, branches,
Philippines any trade business, industry,
agencies or instrumentalities,
undertaking, and uses the services of another
including government-owned or
person who is under his orders as regards the
controlled corporations and financial
employment, except those considered as
institutions with original charters
employer under the GSIS. A self-employed
[GOCCs]; constitutional commissions;
person shall be both employer and employee
and judiciary
at the same time.

Employee – any person who performs services

Employee – any person receiving
for an employer in which either or both mental
compensation while in service of an
and physical efforts are used and who receives
employer whether by election or
compensation for such services, where there is
appointment, irrespective of status of
Definition of an employer—employee relationship; also, a
appointment; baranggay officials; and
Terms self-employed person who is both employee
sangguniang officials
and employer at the same time

Self-employed – any person whose income is

not derived from employment, including, but
not limited to:
• self-employed professionals;
• partners and single proprietors of Note: No counterpart for self-
businesses; employed.
• actors, directors, scriptwriters, news
correspondents not considered as
employees under the above definition;
• athletes, coaches, trainers, jockeys; and
• individual farmers and fishers.

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UP LAW BOC LABOR STANDARDS LABOR LAW

SSS GSIS

Dependents:
• Legal spouse entitled by law to receive
support;
• Child – unmarried, not gainfully
employed, and below 21 or
• Child over 21 if he or she became Same, except that a child here is below
permanently incapacitated and incapable 18
of self-support, physically or mentally,;
child may be legitimate, legitimated,
legally adopted, or illegitimate;
• Parent who is receiving regular support.

Beneficiaries
Primary
• Dependent spouse – until remarriage
[see above];
• Dependent children [see above];
illegitimate children are entitled only to
50% of the share of legitimate children
unless there are no legitimate children, in Same except that RA 8291 does not
which case, they get 100%. distinguish share of legitimate and
Secondary illegitimate children
• Shall only receive when the primary
beneficiaries are absent: Dependent
parents
Other
• Any other person designated by the
member as his/her secondary beneficiary.

Compensation – all actual remuneration for

Compensation – basic pay received
employment, including living allowance, as
excluding per diems, bonuses,
well as the cash value of any remuneration
overtime, honoraria, allowances and
paid in any medium other than cash except
other emoluments not integrated into
that portion already above the max salary
the basic pay under existing laws.
credit under Sec. 18 of the Act.

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SSS GSIS

Compulsory
• Employers as defined above;
• Employees not over 60 years including
household helpers with at least P1,000
monthly pay; and
• Self-employed.
Public sector employees below the
Voluntary compulsory retirement age of 65.
• Spouses who devote full time to
managing household and family affairs; Exceptions:
• OFWs recruited by foreign-based (1) AFP and PNP;
employers; (2) Members of the Judiciary and
Coverage Constitutional Commissions who
• Employees already separated from
employment or those self-employed with are covered only by life insurance
no realized income for a given month, as they have separate retirement
who chose to continue with contributions schemes;
to maintain right to full benefit. (3) Contractual employees with no
employee-employer relationship
Note: Foreign governments, international with the agency they serve.
organizations or their wholly owned
instrumentality employing workers in the
Philippines may enter into an agreement with
the Philippine government to include their
employees in the SSS except those already
covered by their civil service retirement
system.

Employer: 1st day of operation

Effective Date
Employee: 1st day at work
of Coverage
Self-employed: upon registration with SSS

(1) Monthly pension (1) Monthly pension

(2) Dependents’ pension (2) Retirement benefits
(3) Retirement benefits (3) Permanent disability benefits
(4) Permanent disability benefits (4) Death Benefits
(5) Death benefits (5) Funeral benefits
(6) Funeral benefits (6) Loan – GSIS website provides for
Summary of
this
Benefits (7) Loan – Social Security Commission
Resolution No. 669. Moreover, several (7) Temporary disability benefits
SSS-issued circulars such as Circular No. [similar to sickness]
21-P and No. 52 pertain to the treatment (8) Separation benefits
of salary loans, sometimes providing for (9) Unemployment benefits – Sec 11
more flexible payment terms or
(10) Survivorship benefits
condonation for delinquent payers;
Santiago v. CA and SSS, GR # L-39949 (11) Life insurance benefits
[1984] resolved an issue involving the
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SSS GSIS
treatment of salary loan repayments; SSS Note: Judiciary and Constitutional
website also shows loans Commissions are entitled to life
(8) Sickness benefits insurance only.
(9) Maternity leave benefits
(1) Employer’s contribution, and
(2) Employee’s obligation to pay contribution Continued membership for the
Effects of
both cease at the end of the month of unemployed member; and
separation
separation; entitlement to whatever benefits he
from
(3) Employee shall be credited with all has qualified to in the event of any
employment
contributions paid on his behalf and compensable contingency.
entitled to all benefits set forth by law.

Social Security Commission CA [Rule 43; GSIS  CA [Rule 43] SC [Rule 45];
Dispute
questions of law and fact]  SC [Rule 45;
Settlement appeal does not stay execution.
questions of law only]
Prescriptive
20 years 4 years
Period

C. LIMITED PORTABILITY LAW [RA be counted only ONCE for purposes of

7699] totalization to be able to satisfy eligibility
requirements of benefits provided for by either
C.1 COVERAGE [SEC. 3] SSS or GSIS. [Sec. 3]
(1) Workers who transfer employment from
one sector to another; or
D. EMPLOYEE’S COMPENSATION –
(2) Those employed in both sectors (public
COVERAGE AND WHEN COMPENSABLE
and private).
This refers to the Amended Rules on
Employees’ Compensation, implementing
C.2. PROCESS Title II, Book IV of the Labor Code.
The covered worker shall have his credible
services or contributions in both Systems
Workmen’s Compensation Program
credited to his service or contribution record in
each of the Systems and shall be totalized for This is the general and comprehensive term
purposes of old-age, disability, survivorship applied to those laws providing for
and other benefits in case the covered compensation for loss resulting from the injury,
member does not qualify for such benefits in disablement, or death of workmen through
either or both systems without totalization: industrial accident, casualty, or disease.
Provided, however, That overlapping periods [Azucena, The Labor Code with Comments and
of membership shall be credited only once for Cases]
purposes of totalization [Sec. 3]
“Totalization” shall refer to the process of
D.1 COVERAGE [SEC. 2, RULE I]
adding up the periods of creditable services or
contributions under each of the Systems, for (1) Every employer shall be covered.
purposes of eligibility and computation of
(2) Every employee not over sixty (60) years
benefits [Sec. 2(e)].
of age shall be covered.
Overlapping periods of membership in case of
those employed in both sectors at once are to
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(3) An employee over sixty (60) years of age out of and in the course of the
shall be covered if he had been paying employment.
contributions to the System prior to age
(2) For the sickness and the resulting
sixty (60) and has not been compulsorily
disability or death to be compensable,
retired.
the sickness must be the result of an
(4) An employee who is coverable by both occupational disease listed under Annex
the GSIS and SSS shall be compulsorily “A” of these Rules with the conditions
covered by both Systems. set therein satisfied, otherwise, proof
must be shown that the risk of
(5) Filipinos working abroad in the service
contracting the disease is increased by
of an employer as defined in Section 3
the working conditions.
hereof shall be covered by the System,
and entitled to the same benefits as are
provided for employees working in the
Limitation [Sec. 1, Rule IV]
Philippines. [Sec. 5, Rule I]
No compensation shall be allowed to the
employee or his dependents when the injury,
D.2. EFFECTIVITY [SEC. 6, RULE I] sickness, disability, or death was occasioned
by any of the following:
Coverage of employees shall take effect on the
first day of employment. (1) his intoxication;
(2) his willful intention to injure or kill
himself or another; or
D.3. WHEN COMPENSABLE
(3) his notorious negligence
Grounds [Sec. 1, Rule III]
(1) For the injury and the resulting disability
or death to be compensable, the injury
must be the result of accident arising

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LABOR LAW
LABOR STANDARDS

PAGE 148 OF 235

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VII. Labor Relations
A. RIGHT TO SELF-ORGANIZATION
Basis of Right
(1) 1987 Constitution
Sec. 8, Art. III. The right of the people,
including those employed in the public and
private sectors, to form unions,
associations, or societies for purposes not
contrary to law shall not be abridged.
Sec.3, Art. XIII. The state shall afford full
protection to labor, local and overseas,
organized and unorganized, and promote
full employment and equality of
opportunities for all.
It shall guarantee the rights of all workers
to self-organization, collective bargaining
and negotiations, and peaceful concerted
activities, including the right to strike in
accordance with law. [...]
(2) Labor Code
Art. 253. All persons employed in
commercial, industrial and agricultural
enterprises and in religious, charitable,
medical, or educational institutions,
whether operating for profit or not, shall
have the right to self-organization and to
form, join, or assist labor organizations of
their own choosing for purposes of
collective bargaining.
Ambulant, intermittent and itinerant
workers, self-employed people, rural
workers and those without any definite
employers may form labor organizations for
their mutual aid and protection.
Art. 254. Employees of government
corporations established under the
corporation code shall have the right to
organize and to bargain collectively with
their respective employers. All other
employees in the civil service shall have the
right to form associations for purposes not
LABOR RELATIONS LABOR LAW
contrary to law.
Right to Self-Organization: A Fundamental
Right
Self-organization is a fundamental right
guaranteed by the Philippine Constitution and
the Labor Code. Employees have the right to
form, join or assist labor organizations for the
purpose of collective bargaining or for their
mutual aid and protection. [UST Faculty Union
v. Bitonio, G.R. No. 131235 (1999)]
Infringement of the right to self-organization
It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly
interfere with employees and workers in their
exercise of the right to self-organization (Art.
257)
Scope of right to self-organization
(1) Right to form, join or assist labor
organizations of their own choosing for the
purpose of collective bargaining through
representatives of their own choosing (Art.
257);
(2) Right to engage in lawful concerted
activities for the same purpose (collective
bargaining) or for their mutual aid and
protection (Art. 257)
(3) The right of any person to join an
organization also includes the right to leave
that organization and join another one.
[Heritage Hotel Manila v. PIGLAS-Heritage, G.R.
No. 177024 (2009)]
(4) The right to form or join a labor
organization necessarily includes the right to
refuse or refrain from exercising said right. It is
self-evident that just as no one should be
denied the exercise of a right granted by law,
so also, no one should be compelled to
exercise such a conferred right. The fact that a
person has opted to acquire membership in a
labor union does not preclude his
subsequently opting to renounce such
membership. [Reyes v. Trajano, G.R. No.
84433 (1992)]
(5) The right of the employees to self-
organization is a compelling reason why their
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withdrawal from the cooperative must be
allowed. As pointed out by the union, the
resignation of the member-employees is an
expression of their preference for union
membership over that of membership in the
cooperative. [Central Negros Electric
Cooperative v. SOLE, G.R. No. 94045 (1991)]
(6) Their freedom to form organizations
would be rendered nugatory if they could not
choose their own leaders to speak on their
behalf and to bargain for them. [Pan-
American World Airways, Inc v. Pan-American
Employees Association, G.R. No. L-25094
(1969)]
(7) Recognition of the tenets of the sect ...
should not infringe on the basic right of self-
organization granted by the [C]onstitution to
workers, regardless of religious affiliation.
[Kapatiran sa Meat and Canning Division v.
Calleja, G.R. No. 82914 (1988)]
A.1. WHO MAY UNIONIZE FOR PURPOSES
OF COLLECTIVE BARGAINING?
(1) All employees
(2) Government employees of corporations
created under the Corporation Code
(3) Supervisory Employees
(4) Aliens with valid working permits
(5) Security personnel
(1) All Employees
All persons employed in commercial,
industrial and agricultural enterprises and in
religious, charitable, medical or educational
institutions, whether operating for profit or not,
shall have the right to self-organization and to
form, join or assist labor organizations of their
own choosing for purposes of collective
bargaining. (Presumes an employer-
employee relationship)
Ambulant, intermittent and itinerant workers,
self-employed people, rural workers and those
without any definite employers may form
labor organizations for their mutual aid and
protection. [Art. 253]
Any employee, whether employed for a
definite period or not, shall, beginning on his
first day of service, be considered an employee
LABOR RELATIONS LABOR LAW
for purposes of membership in any labor union.
[Art. 292(c)]
Employee […] shall include any individual
whose work has ceased as a result of or in
connection with any current labor dispute or
because of any unfair labor practice if he has
not obtained any other substantially
equivalent and regular employment. [Art.
219(f)]
Employees of non-profit organizations are
now permitted to form, organize or join labor
unions of their choice for purposes of collective
bargaining [FEU-Dr. Nicanor Reyes Medical
Foundation Inc. v. Trajano, G.R. No. 76273
(1987)]
(2) Employees of Government Corporations
Created under the Corporation Code
The right to self-organization shall not be
denied to government employees. [§2(5), Art.
IX-B, Constitution]
Employees of government corporations
established under the Corporation Code shall
have the right to organize and to bargain
collectively with their respective employers
All other employees in the civil service shall
have the right to form associations for
purposes not contrary to law. [Art. 254]
All government employees can form, join or
assist employees’ organizations of their own
choosing for the furtherance and protection of
their interests. They can also form, in
conjunction with appropriate government
authorities, labor-management committees,
work councils and other forms of workers’
participation schemes to achieve the same
objectives. [EO 180 §2 (1987)]
(3) Supervisory Employees
Supervisory employees are those who, in the
interest of the employer, effectively
recommend such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgment. [Art. 219 (m)]
Supervisory employees shall not be eligible for
membership in the collective bargaining unit
of the rank-and-file employees but may join,
assist or form separate collective bargaining
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units and/or labor organizations of their own.
The rank and file union and the supervisors'
union operating within the same
establishment may join the same federation or
national union.[Art. 255]
Rationale
Supervisory employees, while in the
performance of supervisory functions, become
the alter ego of the management in the
making and the implementing of key decisions
at the sub-managerial level. Certainly, it
would be difficult to find unity or mutuality of
interests in a bargaining unit consisting of a
mixture of rank-and-file and supervisory
employees. [Toyota Motor Phil. Corp. v. Toyota
Motor Phil. Corp. Labor Union, G.R. No. 121084
(1997)]
Effect of Mixed Membership or Commingling
The inclusion as union members of employees
outside the bargaining unit shall not be a
ground for the cancellation of the registration
of the union. Said employees are
automatically deemed removed from the list
of membership of said union. (Art. 256)
Note: The rank and file union and the
supervisors’ union operating within the same
establishment may join the same federation or
national union. [Art. 255]
(4) Aliens
General rule: All aliens, natural or juridical,
[…] are strictly prohibited from engaging
directly or indirectly in all forms of trade union
activities. [Art. 284]
Exception: Aliens may exercise the right to
self-organization and join or assist labor
unions for purposes of collective bargaining,
provided the following requisites are fulfilled:
1. With valid working permits issued by the
DOLE; and
2. They are nationals of a country which
grants the same or similar rights to Filipino
workers [Art. 284].
a. As certified by DFA; OR
b. Has ratified either ILO Conventions No.
87 and 98 [Book V, Rule II, §2]
LABOR RELATIONS LABOR LAW
(5) Security Guards
The security guards and other personnel
employed by the security service contractor
shall have the right:
(1) To form, join, or assist in the formation
of a labor organization of their own choosing
for purposes of collective bargaining and
(2) To engage in concerted activities which
are not contrary to law including the right to
strike. [D.O. No. 14 Series of 2001 Guidelines
Governing the Employment and Working
Conditions of Security Guards and Similar
Personnel in the Private Security Industry)
On Dec. 24, 1986, President C. Aquino issued
EO No. 111 which eliminated the provision
which made security guards ineligible to join
any labor organization. In 1989, Congress
passed RA 6715 which also did not impose
limitations on the ability of security guards to
join labor organizations. Thus, security guards
“may now freely join a labor organization of
the rank-and-file or that of the supervisory
union, depending on their rank.” [Manila
Electric Co. v. SOLE, G.R. No. 91902 (1991)]
WHO CANNOT FORM, JOIN OR ASSIST
LABOR ORGANIZATIONS
(1) Managerial employees
(2) Confidential employees
(3) Non-employees
(4) Member-employee of a cooperative
(5) Employees of international
organizations
(6) High-level government employees
(7) Members of the AFP, police officers,
policemen, firemen and jail guards
(1) Managerial Employees
Managerial employee is one who is vested
with powers or prerogatives to lay down and
execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge,
assign or discipline employees. [Art. 219 (m)]
Managerial employees are not eligible to join,
assist or form any labor organization. […] [Art.
255]
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Managerial functions refer “to powers and
prerogatives to lay down and execute
management policies and/or to hire, transfer,
suspend, layoff, recall, discharge or dismiss
employees”. [San Miguel Corporation
Supervisors and Exempt Union v. Laguesma,
G.R. No. 110399 (1997)]
(2) Confidential employees
Nature of Access Test
Confidential employees, by the nature of their
functions, assist and act in a confidential
capacity to, or have access to confidential
matters of, persons who exercise managerial
functions in the field of labor relations.
Requisites: The employee must:
(1) Assist or act in a confidential capacity, AND
(2) To persons who formulate, determine, and
effectuate management policies in the field of
labor relations
Stated differently
(1) the confidential relationship must exist
between the employees and his supervisor,
and
(2) the supervisor must handle the
prescribed responsibilities relating to labor
relations. [San Miguel Supervisors and Exempt
Union v. Laguesma, G.R. No. 110399 (1997)]
Rationale of Exclusion of Confidential
Employees
While Art. 245 [now 255] of the Labor Code
singles out managerial employees as
ineligible to join, assist or form any labor
organization, under the doctrine of necessary
implication, confidential employees are
similarly disqualified…
If confidential employees could unionize in
order to bargain for advantages for
themselves, then they could be governed by
their own motives rather than the interest of
the employers. Moreover, unionization of
confidential employees for the purpose of
collective bargaining would mean the
extension of the law to persons or individuals
who are supposed to act in the interest of the
employers. It is not far-fetched that in the
course of collective bargaining, they might
LABOR RELATIONS LABOR LAW
jeopardize that interest which they are duty
bound to protect. [Metrolab Industries Inc. v.
Roldan-Confessor, G.R. No. 108855 (1996)]
Employees should not be placed in a position
involving a potential conflict of interests.
Management should not be required to
handle labor relations matters through
employees who are represented by the union
with which the company is required to deal
and who in the normal performance of their
duties may obtain advance information of the
company’s position with regard to contract
negotiations, the disposition of grievances, or
other labor relations matters. [San Miguel
Supervisors and Exempt Union v. Laguesma,
G.R. No. 110399 (1997)]
The disqualification of managerial and
confidential employees from joining a
bargaining unit for rank and file employees is
already well-entrenched in jurisprudence.
While Article 245 [now 255] of the Labor Code
limits the ineligibility to join, form and assist
any labor organization to managerial
employees, jurisprudence has extended this
prohibition to confidential employees or those
who by reason of their positions or nature of
work are required to assist or act in a fiduciary
manner to managerial employees and hence,
are likewise privy to sensitive and highly
confidential records. [Standard Chartered
Bank Employees Union v SCB, G.R. No. 161933
(2008)]
Function Test: Nomenclature is not
controlling
The mere fact that an employee is designated
“manager” does not ipso facto make him one.
Designation should be reconciled with the
actual job description of the employee. [Paper
Industries Corp. of the Philippines. v. Laguesma,
G. R. No.101738 (2000)]
Confidential information: Must relate to labor
relations and not from a business standpoint
An employee must assist or act in a
confidential capacity and obtain confidential
information relating to labor relations policies.
Exposure to internal business operations of
the company is not per se a ground for the
exclusion in the bargaining unit. [Coca-Cola
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Bottlers v. IPTEU, G.R. No. 193798 (2015)]
(3) Non-Employees
[Persons who] are not employees of [a
company] are not entitled to the constitutional
right to join or form a labor organization for
purposes of collective bargaining. […]The
question of whether employer-employee
relationship exists is a primordial
consideration before extending labor benefits
under the workmen's compensation, social
security, Medicare, termination pay and labor
relations law. [Singer Sewing Machine Co. v.
Drilon, G.R. No. 91307, 1991]
But they can still form labor union provided
that they are employees of the contractor. A
labor union can be established to bargain with
the contractor but not the principal employer.
[Professor Battad]
(4) Employee-Member of Cooperative
General Rule:
An employee of a cooperative who is a
member and co-owner thereof cannot invoke
the right to collective bargaining for certainly
an owner cannot bargain with himself or his
co-owners. [Batangas-I Electric Cooperative
Labor Union v. Romeo A. Young, G.R. No.
62386, (1988)]
Irrespective of the degree of their participation
in the actual management of the cooperative,
all members thereof cannot form, assist or join
a labor organization for the purpose of
collective bargaining. [Benguet Electric
Cooperative v. Ferrer-Calleja, G.R. No. 79025
(1989)]
Exception:
Employees who withdrew their membership
from the cooperative are entitled to form or
join a labor union for the negotiations of a
Collective Bargaining Agreement. [Central
Negros Electric Cooperative, Inc. v. DOLE, G.R.
No. 94045 (1991)]
(5) Employees of International Organizations
International organizations are endowed with
LABOR RELATIONS LABOR LAW
some degree of international legal personality.
They are granted jurisdictional immunity, as
provided in their organization’s constitutions,
to safeguard them from the disruption of their
functions.
Immunity […] is granted to avoid interference
by the host country in their internal workings.
The determination [by the executive branch]
has been held to be a political question
conclusive upon the Courts in order not to
embarrass a political department of
Government. [Hence], a certification election
cannot be conducted in an international
organization to which the Philippine
Government has granted immunity from local
jurisdiction. [International Catholic Migration
Commission v. Calleja, G.R. No. 85750 (1990)]
(6) High-level / Managerial Government
Employees
High-level employees of the government
whose functions are normally considered as
policy-making or managerial or whose duties
are of a highly confidential nature shall not be
eligible to join the organization of rank-and-
file government employees. [§3, E.O. 180]
(7) Members of the AFP, Policemen, Police
Officers, Firemen and Jail Guards
Members of the AFP, Policemen, Police
Officers, Firemen and Jail Guards are
expressly excluded by EO 180, §4 from the
coverage of the EO 180 which provides
guidelines for the exercise of the right to
organize of government employees.
A.1.a. Doctrine of necessary implication
While Art. 245 [now 255] of the Labor Code
singles out managerial employees as
ineligible to join, assist or form any labor
organization, under the doctrine of necessary
implication, confidential employees are
similarly disqualified. This doctrine states that
what is implied in a statute is as much a part
thereof as that which is expressed. [Metrolab
Industries Inc. v. Roldan-Confessor, G.R. No.
108855 (1996)]
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A.2. COMMINGLING/MIXTURE OF
MEMBERSHIP
The inclusion as union members of employees
outside the bargaining unit shall not be a
ground for the cancellation of the registration
of the union. Said employees are
automatically deemed removed from the list
of membership of said union [Art. 256].
A.3. RIGHTS AND CONDITIONS OF
MEMBERSHIP
Art. 250. The following are the rights and
conditions of membership in a labor
organization:
a. No arbitrary or excessive initiation fees
shall be required of the members of a
legitimate labor organization nor shall
arbitrary, excessive or oppressive fine and
forfeiture be imposed;
b. The members shall be entitled to full
and detailed reports from their officers and
representatives of all financial transactions as
provided for in the constitution and by-laws of
the organization; and
c. The members shall directly elect their
officers in the local union, as well as their
national officers in the national union or
federation to which they or their local union is
affiliated, by secret ballot at intervals of five
(5) years. No qualification requirement for
candidacy to any position shall be imposed
other than membership in good standing in
subject labor organization. The secretary or
any other responsible union officer shall
furnish the Secretary of Labor and
Employment with a list of the newly-elected
officers, together with the appointive officers
or agents who are entrusted with the handling
of funds within thirty (30) calendar days after
the election of officers or from the occurrence
of any change in the list of officers of the labor
organization;
d. The members shall determine by secret
ballot, after due deliberation, any question of
major policy affecting the entire membership
of the organization, unless the nature of the
organization or force majeure renders such
secret balloting impractical, in which case the
board of directors of the organization may
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LABOR LAW
make the decision in behalf of the general
membership.
e. No labor organization shall knowingly
admit as member or continue in membership
any individual who belongs to a subversive
organization or who is engaged directly or
indirectly in any subversive activity;
f. No person who has been convicted of a
crime involving moral turpitude shall be
eligible for election as a union officer or for
appointment to any position in the union;
g. No officer, agent or member of a labor
organization shall collect any fees, dues, or
other contributions in its behalf or make any
disbursement of its moneys or funds unless he
is duly authorized pursuant to its constitution
and by-laws;
h. Every payment of fees, dues or other
contributions by a member shall be evidenced
by a receipt signed by the officer or agent
making the collection and entered into the
record of the organization to be kept and
maintained for the purpose.
i. The funds of the organization shall not
be applied for any purpose or object other
than those expressly provided by its
constitution and by-laws or those expressly
authorized by written resolution adopted by
the majority of the members at a general
meeting duly called for the purpose;
j. Every income or revenue of the
organization shall be evidenced by a record
showing its source, and every expenditure of
its funds shall be evidenced by a receipt from
the person to whom the payment is made,
which shall state the date, place and purpose
of such payment. Such record or receipt shall
form part of the financial records of the
organization.
k. Any action involving the funds of the
organization shall prescribe after three (3)
years from the date of submission of the
annual financial report to the Department of
Labor and Employment or from the date the
same should have been submitted as required
by law, whichever comes earlier: Provided,
That this provision shall apply only to a
legitimate labor organization which has
submitted the financial report requirements
under this Code: Provided, further, That failure
of any labor organization to comply with the
UP LAW BOC LABOR RELATIONS LABOR LAW

periodic financial reports required by law and hours.

such rules and regulations promulgated
p. No special assessment or other
thereunder six (6) months after the effectivity
extraordinary fees may be levied upon the
of this Act shall automatically result in the
members of a labor organization unless
cancellation of union registration of such labor
authorized by a written resolution of a majority
organization.
of all the members at a general membership
l. The officers of any labor organization meeting duly called for the purpose. The
shall not be paid any compensation other than secretary of the organization shall record the
the salaries and expenses due to their minutes of the meeting including the list of all
positions as specifically provided for in its members present, the votes cast, the purpose
constitution and by-laws, or in a written of the special assessment or fees and the
resolution duly authorized by a majority of all recipient of such assessment or fees. The
the members at a general membership record shall be attested to by the president.
meeting duly called for the purpose. The
q. No special assessments, attorney's fees,
minutes of the meeting and the list of
negotiation fees or any other extraordinary
participants and ballots cast shall be subject
fees may be checked off from any amounts
to inspection by the Secretary of Labor or his
due to an employee without an individual
duly authorized representatives. Any
written authorization duly signed by the
irregularities in the approval of the resolutions
employee. The authorization should
shall be a ground for impeachment or
specifically state the amount, purpose and
expulsion from the organization.
beneficiary of the deduction; and
m. The treasurer of any labor organization
r. It shall be the duty of any labor
and every officer thereof who is responsible for
organization and its officers to inform its
the accounts of such organization or for the
members on the provisions of its constitution
collection, management, disbursement,
and by-laws, collective bargaining agreement,
custody or control of the funds, moneys and
the prevailing labor relations system and all
other properties of the organization, shall
their rights and obligations under existing
render to the organization and to its members
labor laws.
a true and correct account of all moneys
received and paid by him since he assumed s. For this purpose, registered labor
office or since the last date on which he organizations may assess reasonable dues to
rendered such account and of the balance finance labor relations seminars and other
remaining in his hands at the time of labor education activities.
rendering such account, and of all bonds,
Any violation of the above rights and
securities, and other properties of the
conditions of membership shall be a ground
organization entrusted to his custody or under
for cancellation of union registration or
his control. The rendering of such account expulsion of an officer from office whichever is
shall be made:
appropriate. At least 30 per cent of all the
1. At least once a year within thirty (30) members of a union or any member or
days after the close of its fiscal year. members specifically concerned may report
such violation to the Bureau. The Bureau shall
2.At such other times as may be
have the power to hear and decide any
required by a resolution of the majority
reported violation and to mete the appropriate
of the members of the organization.
penalty. The decision of the Bureau shall be
3. Upon vacating his office. appealable only on question of law by
certiorari to the Supreme Court.
n. The account shall be duly audited and
verified by affidavit and copy thereof shall be Criminal and civil liabilities arising from
furnished the Secretary of Labor. violation of above rights and conditions of
membership shall continue to be under the
o. The books of accounts and other records
jurisdiction of ordinary courts.
of the financial activities of any labor
organization shall be opened to inspection by
any officer or member thereof during office
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Admission and Discipline of Members Inciong, No. L--50283--84 (1983)]

No arbitrary or excessive initiation fees or fines
No arbitrary or excessive initiation fees shall Election of Officers
be required of the members of a legitimate
Manner of election
labor organization nor shall arbitrary,
excessive or oppressive fine and forfeiture be Members shall directly elect their officers,
imposed. [Article 250(e)] including those of the national union or
federation, to which they or their union is
affiliated, by secret ballot at intervals of five
Prohibition on subversive activities or (5) years. [Art. 250(c)]
membership
No labor organization shall knowingly admit
Qualifications of officers
as members or continue in membership any
individual who: No requirements other than membership in
good standing. [Art. 250(c)]
(a) belongs to a subversive organization; or
No person who has been convicted of a crime
(b) who is engaged directly or indirectly in
involving moral turpitude shall be eligible for
any subversive activity;
election as a union officer or for appointment
to any position in the union. [Art. 250(f)]
Unions cannot arbitrarily exclude qualified
applicants
Acts done in prior term is not a ground to
Unions are not entitled to arbitrarily exclude remove a public officer
qualified applicants for membership, and a
The Court should never remove a public officer
closed--shop provision would not justify the
for acts done prior to his present term of office.
employer in discharging, or a union in insisting
To do otherwise would be to deprive the
upon the discharge of, an employee whom the
people of their right to elect their officers.
union thus refuses to admit to membership,
When the people have elected a man to office,
without any reasonable ground therefor.
it must be assumed that they did this with
Needless to say, if said unions may be
knowledge of his life and character, and that
compelled to admit new members, who have
they disregarded or forgave his faults or
the requisite qualifications, with more reason
misconduct, if he had been guilty of any. It is
may the law and the courts exercise the
not for the court, by reason of such faults or
coercive power when the employee involved is
misconduct to practically overrule the will of
a long standing union member, who, owing to
the people. [Kapisanan ng Manggagawang
provocations of union officers, was impelled to
Pinagyakap v. Trajano, G.R. No. L--62306
tender his resignation, which he forthwith
(1985), citing Pascual v. Provincial Board of
withdrew or revoked. [Salunga v. CIR, No. L--
Nueva Ecija, G.R. No. L-62306 (1959)]
22456 (1967)]

N.B.: Pascual set forth the condonation

Members who seek destruction of union lose
doctrine, which was declared abandoned in
right to remain as members
Morales v. Court of Appeals [G.R. Nos. 217126-
Inherent in every labor union, or any 27 (2015)]
organization for that matter, is the right of
self--preservation. When members of a labor
union, therefore, sow the seeds of dissension Submission of names not a requirement to
and strife within the union; when they seek the allow members to vote
disintegration and destruction of the very Submission of the employees’ names with the
union to which they belong, they thereby
BLR as qualified members of the union is not
forfeit their rights to remain as members of the
a condition sine qua non to enable said
union which they seek to destroy. [Villar v.
members to vote in the election of union’s
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officers. [...] The question of eligibility to vote
may be determined through the use of the
applicable payroll period and employee’s
status. [Tancinco v. Ferrer-Calleja, G.R. No. L-
-78131 (1988)]
Disqualification does not render those who
garner the 2nd highest number of votes as the
winners
Disqualification of winning candidates will not
result in the declaration of those who
garnered the second highest number of votes
as winners. The mere fact that they obtained
the second highest number of votes does not
mean that they will thereby be considered as
the elected officers if the true winners are
disqualified. [Manalad v. Trajano, G.R. Nos.
72772--73 (1989)]
A.3.a. Nature of relationship
A.3.a. i. Member-Labor union
The nature of the relationship between the
union and its members is fiduciary in nature,
which arises from the dependence of the
employee on the union, and from the
comprehensive power vested in the union with
respect to the individual. The union may be
considered but the agent of its members for
the purpose of securing for them fair and just
wages and good working conditions. [Heirs of
Cruz v. CIR, G.R. No. L-23331-32 (1969)]
A.3.a.ii. Labor union-Federation
Local unions do not owe their creation and
existence to the national federation to which
they are affiliated but, instead, to the will of
their members. [...] The local unions remain
the basic units of association, free to serve
their own interests subject to the restraints
imposed by the constitution and by-laws of
the national federation, and free also to
renounce the affiliation upon the terms laid
down in the agreement which brought such
affiliation into existence. [Philippine
Skylanders, Inc. v. NLRC, G.R. No. 127374
(2002)]
LABOR RELATIONS LABOR LAW
A.3.a.ii.a. Disaffiliation
A local union has the right to disaffiliate from
its mother union or declare its autonomy. A
local union, being a separate and voluntary
association, is free to serve the interests of all
its members including the freedom to
disaffiliate or declare its autonomy from the
federation to which it belongs when
circumstances warrant, in accordance with the
constitutional guarantee of freedom of
association. [Malayang Samahan ng mga
Manggagawa sa M. Greenfield, Inc. v. Ramos,
G.R. No. 113907 (2000)]
[The federation] is entitled to receive the dues
from [the employer] as long as the [local]
union is affiliated with it and [the employer is]
authorized by their employees (members of
[the local] union) to deduct union dues.
Without said affiliation, the employer has no
link to the [federation]. [...] A contract between
an employer and the [federation] as
bargaining agent for the employees is
terminated by the disaffiliation of the local
[union] of which the employees are members.
[Volkschel Labor Union v. BLR, G.R. No. L-
45824 (1985)]
A.3.a.ii.b. Substitutionary Doctrine
Even during the effectivity of a collective
bargaining agreement executed between
employer and employees thru their agent, the
employees can change said agent but the
contract continues to bind then up to its
expiration date. They may bargain however for
the shortening of said expiration date. [Elisco-
Elirol Labor Union v. Noriel, G.R. No. L-41955
(1977)]
B. BARGAINING UNIT
Definition
“Bargaining Unit” refers to a group of
employees sharing mutual interests within a
given employer unit, comprised of all or less
than all of the entire body of employees in the
employer unit or any specific occupational or
geographical grouping within such employer
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UP LAW BOC LABOR RELATIONS
unit. [§1(e), Rule I, Book V]
It is “a group of employees of a given employer,
comprised of all or less than all of the entire
body of employees, which the collective
interests of all the employees indicate to be
best suited to serve reciprocal rights and
duties of the parties consistent with equity to
the employer. [Belyca Corp. v. Calleja, G.R. No.
77395 (1988) citing Rothenberg]
Functions of an Appropriate Bargaining Unit
(1) An ELECTORAL DISTRICT. – It marks the
boundaries of those who may participate in a
certification election.
(2) An ECONOMIC UNIT. – They are a group
of employees with community of interests.
(3) A SOVEREIGN BODY. – It selects the
sole and exclusive bargaining agent.
Role of a bargaining unit
The labor organization designated or selected
by the majority of the employees in an
appropriate collective bargaining unit shall be
the exclusive representative of the employees
in such unit for the purpose of collective
bargaining. [Art. 267]
Right of individual or group of employees to
present grievances
An individual employee or group of employees
shall have the right at any time to present
grievances to their employer. [Art. 267]
CBA Coverage
As regular employees, the petitioners fall
within the coverage of the bargaining unit and
are therefore entitled to CBA benefits as a
matter of law and contract. [Farley Fulache, et
al. v. ABS-CBN, G.R. No. 183810 (2010)]
Effect of Prior Agreement
The express exclusion of the computer
operators and discipline officers from the
bargaining unit of rank-and-file employees in
the 1986 CBA does not bar any re-negotiation
for the future inclusion of the said employees
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LABOR LAW
in the bargaining unit. During the freedom
period, the parties may not only renew the
existing collective bargaining agreement but
may also propose and discuss modifications or
amendments thereto. [De La Salle University v.
DLSU Employees Association EA, G.R. No.
109002, (2000)]
Rationale
[A prior agreement] as to the exclusion [of
monthly-paid rank-and-file employees] from
the bargaining union of the [daily-paid] rank-
and-file or from forming their own union […]
can never bind subsequent federations and
unions as [employees were not privy to that
agreement]. And even if [they were privy], it
can never bind subsequent federations and
unions because it is a curtailment of the right
to self--organization guaranteed by the labor
laws [General Rubber & Footwear Corp. v. BLR,
G.R. No. 74262 (1987)]
Effect of Inclusion of Employees Outside the
Bargaining Unit or Commingling
General Rule: It shall not be a ground for the
cancellation of the registration of the union.
Said employees are automatically deemed
removed from the list of membership of said
union. [Art. 256]
Exception: Unless such mingling was brought
about by misrepresentation, false statement
or fraud under Article 247 (Grounds for
cancellation of Union Registration) of the
Labor Code. [SMCC-Super v. Charter Chemical
and Coating Corporation, G.R. No. 169717
(2011)]
Corporate Entities
General Rule: Two companies having separate
juridical personalities shall NOT be treated as
a single bargaining unit. [Diatagon Labor
Federation Local v. Ople, G.R. No. L-44493-94
(1980)]
Exception: Pervasive Unitary Aspect of
Management Doctrine
The cross-linking of the agencies’ command,
control, and communication systems indicate
their unitary corporate personality.
Accordingly, the veil of corporate fiction [...]
UP LAW BOC LABOR RELATIONS LABOR LAW

should be lifted for the purpose of allowing the (3) Prior collective bargaining history
employees of the three agencies to form a
(4) Employment status [Democratic Labor
single labor union. [Philippine Scouts Veterans
Association v. Cebu Stevedoring Co. Inc, G.R.
v. Torres, G.R. No. 92357 (1993)]
No. L-10321 (1958); University of the
A settled formulation of the doctrine of Philippines v. Ferrer-Calleja, G.R. No. 96189
piercing the corporate veil is that when two (1992)]
business enterprises are owned, conducted,
Note: Where the employment status
and controlled by the same parties, both law
was not at issue but the nature of work
and equity will, when necessary to protect the
of the employees concerned; the Court
rights of third parties, disregard the legal
stressed the importance of the 2nd
fiction that these two entities are distinct and
factor. [Belyca Corp. v. Calleja, G.R. No.
treat them as identical or as one and the same.
77395 (1988)] Other factors:
[Ang Lee v. Samahang Manggagawa ng Super
Lamination, G.R. No. 193816 (2016)]
(5) Geography and Location
Determining whether or not to establish (6) Policy of avoiding fragmentation of the
separate bargaining units bargaining unit
The fact that the businesses are related, that
some of the employees are the same persons
(1) Globe Doctrine
working in the other company and the physical
plants, offices and facilities are in the same A practice designated as the "Globe doctrine,"
compound are NOT sufficient to justify sanctions the holding of a series of elections,
piercing the corporate veil. [Indophil Textile not for the purpose of allowing the group
Mills Workers Union v. Calica, G.R. No. 96490 receiving an overall majority of votes to
(1992)] ) represent all employees, but for the specific
purpose of permitting the employees in each
of the several categories to select the group
Spun-off corporations which each chooses as a bargaining unit.
[Kapisanan ng mga Manggagawa sa Manila
The transformation of the companies is a
Road Co. v. Yard Crew Union, G.R. Nos. L-
management prerogative and business
16292-94 (1960)]
judgment which the courts cannot look into
unless it is contrary to law, public policy or Rationale
morals. [...] Considering the spin-offs, the
Highly skilled or specialized technical workers
companies would consequently have their
may choose to form their own bargaining unit
respective and distinctive concerns in terms of
because they may be in better position to
the nature of work, wages, hours of work and
bargain with the employer considering the
other conditions of employment. [...] The
market value of their skills.
nature of their products and scales of business
may require different skills, volumes of work,
and working conditions which must (2) Community or Mutuality of Interests
necessarily be commensurate by different
compensation packages. (San Miguel Union v The basic test in determining the appropriate
Confesor, 1996) bargaining unit is that a unit, to be
appropriate, must affect a grouping of
employees who have substantial, mutual
TEST TO DETERMINE THE CONSTITUENCY interests in wages, hours, working conditions
OF AN APPROPRIATE BARGAINING UNIT and other subjects of collective bargaining.
[UP v. Ferrer-Calleja, G.R. No. 96189, (1992)]
4 Factors:
Rationale
(1) Will of the Employees (Globe Doctrine)
There are greater chances of success for the
(2) Affinity and unity of employees’ interest
collective bargaining process. The bargaining
(Substantial Mutual Interests Rule)
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unit is designed to maintain the mutuality of
interest among the employees in such unit.
When the interest between groups has
changed over time, there is reason to dissolve,
change or expand a certain bargaining unit.
(3) Prior Collective Bargaining History
The existence of a prior collective bargaining
history is neither decisive nor conclusive in the
determination of what constitutes an
appropriate bargaining unit. [Sta. Lucia East
Commercial Corporation v. SOLE, G.R. No.
162355 (2009)]
(4) Employment status
Among the factors to be considered [is the]
employment status of the employees to be
affected [regular, casual, seasonal,
probationary, etc.], that is the positions and
categories of work to which they belong [....]
[Belyca Corp. v. Calleja, G.R. No. 77395 (1988)]
employees’ bargaining power with the
management. To veer away from such goal
would be contrary, inimical and repugnant to
the objectives of a strong and dynamic
unionism. [Phil. Diamond Hotel and Resort Inc
v Manila Diamond Hotel and Employees Union,
GR No. 158075 (2006)]
Confidential employees lumped with
management
Since the confidential employees are very few
in number and are by practice and tradition
identified with the supervisors in their role as
representatives of management vis-a-vis the
rank and file employees, such identity of
interest has allowed their inclusion in the
bargaining unit of supervisors-managers for
purposes of collective bargaining in turn as
employees in relation to the company as their
employer.
[Filoil Refinery Corp. v. Filoil Supervisory and
Confidential Employees Union, G.R. No. L-
26736 (1972)]

(5) Geography and Location

C. BARGAINING REPRESENTATIVE
Geography and location only play a significant
role if:
C.1. DETERMINATION OF
(1) The separation between the camps [...] REPRESENTATION STATUS
and the different kinds of work in each [...] all
militate in favor of the system of separate
bargaining units; Methods of Establishing Majority Status
(2) [When] the problems and interests of 1. Sole and Exclusive Bargaining Agent
the workers are peculiar in each camp or (SEBA) Certification
department;
2. Consent Election
(3) The system of having one collective
bargaining unit in each camp [...] [has 3. Run-Off Election
operated satisfactorily in the past.] [Benguet 4. Certification Election
Consolidated Inc. and Balatok Mining Co. v.
Bobok Lumberjack Association, G.R. No. L- 5. Re-Run election
11029 (1958)] Note: D.O. 40-I-15 replaced Voluntary
Recognition with SEBA certification, as of
September 7, 2015.
(6) Policy of avoiding fragmentation of the
bargaining unit
It bears noting that the goal of the DOLE is SEBA CERTIFICATION
[geared] towards "a single employer wide unit Procedure [Rule VII, Book V]
which is more to the broader and greater
benefit of the employees working force." The (1) File Request of SEBA Certification (§1)
philosophy is to avoid fragmentation of the Who: Any legitimate labor organization
bargaining unit so as to strengthen the
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File where: Regional Office which issued its within five (5) working days for the
certificate of registration or certificate of SUBMISSION of:
creation of chartered local
(a) Names of employees in the covered
(2) Indicate in the request (§2): bargaining unit who signify support for
certification; [and these] employees comprise
(a) Name and address of the requesting
at least majority of the number of employees
legitimate labor organization;
in the covered bargaining unit; and
(b) Name and address of the company
(b) Certification under oath by the president
where it operates;
of the requesting union or local that all
(c) Bargaining unit sought to be documents submitted are true and correct
represented; based on personal knowledge
(d) Approximate number of employees in (B) With more than 1 legitimate labor
the bargaining unit; and organization
(e) Statement of the existence/non- Regional Director shall refer it to the Election
existence of other labor organization/CBA. Officer for conduct of certification election.
Certificate of Duly certified
by
Both IF: ORGANIZED ESTABLISHMENT
Registration President of certificates
Regional Director shall refer it to the
requesting should be
mediator-arbitrator for determination and
union attached to
propriety of conducting a certification election.
the request
Creation of President of
chartered the
local federation of (4) Regional Director shall act on the
the local submission (§4.1)
Incomplete The request shall be
requirements referred to Election
(3) Regional Director shall act on the Officer for the
request (§3) conduct of election
When: Within one (1) day from submission of pursuant to Rule IX.
request Complete Regional Director
Action: requirements shall issue a
certification as
o Determine whether request is compliant
SEBA
with §2 and whether the bargaining unit
sought to be represented is organized or not;
and
(5) Regional Director shall post the SEBA
o Request a copy of the payroll Certification (§4.1)
If the Regional Director finds it deficient, Period: Fifteen (15) consecutive days
he/she shall advise the requesting union or
Where: At least two (2) conspicuous places in
local to comply within ten (10) days from
the establishment or covered bargaining unit.
notice. Failure to comply within the prescribed
period shall be deemed withdrawal of the
request. Effect of SEBA Certification
Upon the issuance of the [SEBA Certification],
IF: UNORGANIZED ESTABLISHMENT the certified union or local shall enjoy all the
rights and privileges of an exclusive
(A) With only 1 legitimate labor organization
bargaining agent of all the employees in the
Regional Director shall call a conference covered bargaining unit (§4.2).

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UP LAW BOC
The certification shall bar the filing of a [PCE]
by any labor organization for a period of one
(1) year from the date of its issuance. Upon
expiration of this one-year period, any
legitimate labor organization may file a [PCE]
in the same bargaining unit represented by
the certified labor organization, unless a
[CBA] between the employer and the certified
labor organization was executed and
registered with the Regional Office in
accordance with Rule XVII.
SEE: VOLUNTARY RECOGNITION
Note: D.O. 40-I-15 replaced Voluntary
Recognition with SEBA certification. This
section is ONLY FOR COMPARISON with
SEBA certification.
Voluntary Recognition refers to the process by
which a legitimate labor union is recognized
by the employer as the exclusive bargaining
representative or agent in a bargaining unit,
reported with the Regional Office in
accordance to Rule VII, Sec 2 of these Rules.
(Book V, Rule I, §1 [bbb])
Requirements
Substantive Requirements
(1) Unorganized establishment;
(2) Only one union asking for recognition;
(3) The members of the bargaining unit did
not object to the projected recognition of the
union. (Book V, Rule VII, §2)
Procedural Requirements
The notice of voluntary recognition shall be
accompanied by the original copy and two (2)
duplicate copies of the following documents:
(1) A joint statement under oath of
voluntary recognition attesting to the fact of
voluntary recognition
(2) Certificate of posting of the joint
statement of voluntary recognition for fifteen
(15) consecutive days in at least two (2)
conspicuous places in the establishment or
bargaining unit where the union seeks to
operate;
(3) The approximate number of employees
LABOR RELATIONS LABOR LAW
in the bargaining unit, accompanied by the
names of those who support the voluntary
recognition comprising at least a majority of
the members of the bargaining unit; and
(4) A statement that the labor union is the
only legitimate labor organization operating
within the bargaining unit.
All accompanying documents of the notice for
voluntary recognition shall be certified under
oath by the employer representative and
president of the recognized labor union.
The employer may voluntarily recognize the
representation status of a union in
unorganized establishments. However, in
cases where an establishment is already
organized, as when a petition for certification
election has already been filed by a union, if
the company voluntarily recognizes a different
union during such time, then the company’s
voluntary recognition is void. (SLECC v Sec. of
Labor, 2009)
CONSENT ELECTION
"Consent Election" means the election
voluntarily agreed upon by the parties with or
without the intervention by DOLE (Book V,
Rule I, §1(i)) Procedure (Book V, Rule VIII, §11)
1. The parties may agree to hold a consent
election
a. Where no petition for certification
election was filed; or
b.Where a petition for certification
election had been filed, and upon the
intercession of Med-Arbiter (Book V, Rule
VIII, §25)
2. Mediator-Arbiter shall call for the
consent election, reflecting the parties’
agreement and the call in the minutes of the
conference. Regional Director or authorized
representative shall determine the Election
Officer by raffle in the presence of
representatives of the contending unions if
they so desire
3. First pre-election conference is
scheduled within ten (10) days from the date
of the agreement. Subsequent conferences
may be called to expedite and facilitate the
holding of the consent election.
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RUN-OFF ELECTION as the winner [§2, Rule X, Book V].

A "Run-Off election" refers to an election Note: Please note the difference between valid
between the labor unions receiving the two (2) votes cast versus votes cast – valid votes
highest number of votes in a certification or excludes spoiled votes.
consent election when the following requisites
CERTIFICATION ELECTION
have been complied with:
Definition
1. Valid election;
“Certification Election" is the process of
2. The certification or consent election
determining, through secret ballot, the sole
provides for three (3) or more choices (“No
and exclusive representative of the employees
Union” is considered one choice – Professor
in an appropriate bargaining unit for purposes
Battad);
of collective bargaining or negotiation. [§1(i),
3. None of the contending UNIONS Rule I, Book V]
received a majority of the VALID VOTES cast;
4. No objections or challenges which if
Purpose
sustained can materially alter the results; and
The purpose of a certification election is
5. The total number of votes for all
precisely the ascertainment of the wishes of
contending UNIONS is at least fifty (50%) of
the majority of the employees in the
the number of VOTES cast [Art. 268; §1(uu),
appropriate bargaining unit: to be or not to be
Rule I, Book V; §1, Rule X]
represented by a labor organization, and in
the affirmative case, by which particular labor
organization. [Reyes v. Trajano, G.R. No.
Illustration
84433 (1992)]
The CBU has 100 members and 80 of which
voted. Union “A”= 30; Union “B”= 15; Union
“C”=15 and No Union= 20. There were no Nature of proceeding
invalid votes. Since none got the majority of
Certification election is the most effective and
the 80 valid votes (40) and the contending
the most democratic way of determining
unions obtained 60 votes (which is at least
which labor organization can truly represent
50% of the VOTES cast), a run-off election is
the working force in the appropriate
proper. The run-off will be between the labor
bargaining unit of a company [Samangang
unions receiving “the two highest number of
Manggawa sa PERMEX v SOLE, G.R. No.
votes.” The run-off is NOT between two unions
107792 (1998)]
but between “two highest votes”. Thus, the
run-off will be among Union “A”, “B” and “C.” It is a fundamental postulate that the will of
(Azucena) the majority given expression in an honest
election with freedom on the part of the voters
to make their choice, is controlling. [PLUM
Procedure for Run-Off Election Federation of Industrial and Agrarian Workers v.
Noriel, G.R. No. L-48007 (1978)]
Election Officer shall motu proprio conduct a
run-off election within ten (10) days from the [It] is not a ‘litigation’ [...] but a mere
close of the election proceedings between the investigation of a non-adversary, fact-finding
labor unions receiving the two highest number character. [...] The determination of the
of votes. proceeding does not entail the entry of
remedial orders or redress of rights, but
“No Union” shall not be a choice in the run-off
culminates solely in an official designation of
election [§1, Rule X, Book V].
bargaining units and an affirmation of the
Same voters’ list used in the certification employees’ expressed choice of bargaining
election shall be used in the run-off election. agent. [Angat River Irrigation System v. Angat
River Worker’s Union (PLUM), G.R. Nos. L-
The labor union receiving the GREATER
10943 and L-10944 (1957)]
number of VALID VOTES cast shall be certified
PAGE 163 OF 235
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Technical rules and objections should not
hamper the correct ascertainment of the labor
union that has the support or confidence of the
majority of the workers and is thus entitled to
represent them in their dealings with
management. [Port Workers Union v.
Laguesma, G.R. Nos. 94929-30, (1992)]
Certification Election Union Election
To determine the To elect union
Exclusive Bargaining officers
Agent
All members of the Only union
appropriate bargaining members may
unit may vote. vote.
Who may vote [§6, Rule IX, Book V]
All employees who are members of the
appropriate bargaining unit three (3) months
prior to the filing of the petition/request shall
be eligible to vote. An employee who has been
dismissed from work but has contested the
legality of the dismissal in a forum of
appropriate jurisdiction at the time of the
issuance of the order for the conduct of a
certification election shall be considered a
qualified voter, unless his/her dismissal was
declared valid in a final judgment at the time
of the conduct of the certification election.
In case of disagreement over the voters’ list or
over the eligibility of voters, all contested
voters shall be allowed to vote. But their votes
shall be segregated and sealed in individual
envelopes.
Who may file a petition for certification election
[§1, Rule VIII, Book V]
(1) Legitimate labor organization
(2) Local/chapter that has been issued a
charter certificate
(3) National union or federation that has
issued a charter certificate to its local/chapter
[in behalf of the latter]
(4) Employer (when requested to bargain
collectively and no existing CBA)
PAGE 164 OF 235
LABOR LAW
(1) Legitimate Labor Organization
"Legitimate labor organization" means any
labor organization duly registered with the
Department of Labor and Employment, and
includes any branch or local thereof. [Art. 219
(h)]
(2) Local/Chapter
A duly registered federation or national union
may directly create a local chapter by issuing
a charter certificate indicating the
establishment of the local chapter. The
chapter shall acquire legal personality only for
purposes of filing a petition for certification
election from the date it was issued a charter
certificate. [Art. 241]
(3) National Union/Federation
A group of legitimate labor unions in a private
establishment organized for collective
bargaining or for dealing with employers
concerning terms and conditions of
employment for their member unions or for
participating in the formulation of social and
employment policies, standards and
programs, registered with the BLR in
accordance with Rule III §2-B. [Book V Rule 1
§1 (ll)]
The national union or federation shall not be
required to disclose the names of the local
chapter’s officers and members. [Art. 268; §1,
Rule VIII, Book V]
(4) Employer
Requisites:
1. Employer is requested to bargain
collectively; AND
2. No existing registered CBA in the unit
[Art. 270]
Bystander rule
The employer shall not be considered a party
[to the petition] with a concomitant right to
oppose a petition for certification election.
The employer’s participation shall be limited
UP LAW BOC LABOR RELATIONS LABOR LAW

to: online. [§2, Rule VIII, Book V]

(1) being notified or informed of petitions of Two or more petitions involving same
such nature bargaining unit [§2, Rule VIII, Book V]
(2) submitting the list of employees during
the pre-election conference should the Med-
Automatically
Arbiter act favorably on the petition [Art. 271]
Filed in one consolidated with [Med-
The principle of the employer as by-stander Regional Office Arbiter] who first acquired
shall be strictly observed throughout the jurisdiction
conduct of certification election. The employer
shall not harass, intimidate, threat[en], or The Regional Office in
coerce employees before, during and after Filed in which the petition was first
elections. [§1, Rule IX, Book V] different filed shall exclude all
Regional others; [...] The latter shall
However, manifestation of facts that would Offices indorse the petition to the
aid the [Med-Arbiter] in expeditiously former for consolidation
resolving the petition such as existence of a
contract-bar, one year bar or deadlock bar
may be considered. [§1, Rule VIII, Book V] CERTIFICATION ELECTION IN AN
The employer is not a party to a certification UNORGANIZED ESTABLISHMENT
election, which is the sole or exclusive concern Unorganized Establishment
of the workers. [...] The only instance when the
employer may be involved in that process is [It is an] establishment where there is no
when it is obliged to file a petition for certified bargaining agent. [Art. 269]
certification election on its workers’ request to Procedure [Art. 269]
bargain collectively pursuant to Art. 258 [now
(1) File a petition for certification election.
Art. 270]. [Hercules Industries, Inc. v Sec. of
Labor, G.R. No. 96255 (1992)] (2) Upon filing of the petition, the Med-
Arbiter shall automatically conduct a
[The employer] did not possess the legal
personality to file a motion to dismiss the certification election.
petition for certification election even if based Filing of petition is by a legitimate labor
on the ground that its supervisory employees organization
are in reality managerial employees. It is well-
It cannot be filed by an unregistered labor
settled that an employer has no standing to
organization. Art. 251 enumerates the rights
question a certification election since this is
granted to a legitimate labor organization and
the sole concern of the workers. The only
one of those rights is the right to be chosen as
exception to this rule is Art. 258 [now Art. 270].
the exclusive bargaining representative. This
[PT&T v Laguesma, G.R. No. 101730 (1993)]
is one way the law encourages union
[A] company’s interference in the certification registration.
election below by actively opposing the same
[...] unduly creates a suspicion that it intends
to establish a company union. [Oriental Tin CERTIFICATION ELECTION IN AN
Can Labor Union v. Secretary of Labor, G.R. No. ORGANIZED ESTABLISHMENT
116751 (1998)]
Organized Establishment
Refers to an enterprise where there exists a
Venue for filing the petition recognized or certified sole and exclusive
bargaining agent. [§1(ll), Rule I, Book V]
File with the Regional Office which issued the
petitioning union’s certificate of registration or Procedure [Art. 268]
certificate of creation of chartered local.
(1) File a verified petition questioning the
At [petitioner’s option], [it may file] the majority.
petition and its supporting documents [...]
(2) It must be filed within the 60-day period
PAGE 165 OF 235
UP LAW BOC
before expiration of CBA (freedom period)
(3) Supported by written consent of at least
25% of ALL employees in the bargaining unit
(substantial support)
(4) Med-Arbiter shall automatically order
an election.
WHEN PETITION MUST BE FILED
Freedom Period
Rationale of prohibition of filing outside the
freedom period
To ensure industrial peace between the
employer and its employees during the
existence of the CBA. [Republic Planters Bank
Union v. Laguesma, G.R. No. 119675 (1996)]
Signing of authorization is merely preparatory
What is prohibited is the filing of the petition
for certification election outside the 60-day
freedom period. [...] The signing of the
authorization to file was merely preparatory to
the filing of the Petition for Certification
Election, or an exercise of [the] right to self-
organization. [PICOP Resources Inc. v.
Ricardo Dequita, G.R. No. 172666 (2011)]
25% Substantial Support Rule
In organized establishments, the incumbent
sole bargaining agent should not be easily
replaced for that would disturb industrial
peace. To justify the disturbance, it must
appear that at least a substantial number
(25% requirement) seeks to have a new
exclusive bargaining unit.
Discretionary rule
The [Med-Arbiter], in the exercise of sound
discretion, may order a certification election
notwithstanding the failure to meet the [25%]
requirement [in petitions for certification
election in an organized establishment].
[Scout Albano Memorial College v. Noriel, G.R.
No. L-48347 (1978)]
Inapplicable to Motions for Intervention
LABOR RELATIONS LABOR LAW
[The] requisite written consent of at least 20%
(now 25%) of the workers in the bargaining
unit applies to certification election only, and
not to motions for intervention. Nowhere in
the legal provisions [and in the Omnibus
Rules] does it appear that a motion for
intervention in a certification election must be
accompanied by a similar written consent.
[PAFLU v. Calleja, G.R. No. 79347 (1989)]
Intervenors
1. Incumbent bargaining agent as forced
intervenor;
2. Legitimate labor union other than the
incumbent bargaining agent operating within
the bargaining unit.
(1) Forced Intervenor: Incumbent
bargaining agent
The incumbent bargaining agent shall
automatically be one of the choices in the
certification election as forced intervenor. [§8,
Rule VIII, Book V]
(2) Legitimate labor union as an intervenor
When a petition for certification election was
filed in an organized establishment, any
legitimate labor union other than the
incumbent bargaining agent operating within
the bargaining unit may file a motion for
intervention with the Med-Arbiter during the
freedom period of the collective bargaining
agreement.
In an unorganized establishment, the motion
shall be filed at any time prior to the decision
of the Med-Arbiter. The motion shall be
resolved in the same decision issued in the
petition for certification election.
In both cases, the form and contents of the
motion shall be the same as that of a petition
for certification election.
[§9, Rule VIII, Book V]
Effect of withdrawal of signatures
The employees’ withdrawal from a labor union
made
PAGE 166 OF 235
UP LAW BOC LABOR RELATIONS LABOR LAW

(1) Before the filing of the petition for
certification election is presumed
voluntary,
(2) After the filing of such petition is
considered to be involuntary and does not
affect the [petition]. [S.S. Ventures
International vs. S.S. Ventures Labor Union,
G.R. No. 161690 (2008)]

PAGE 167 OF 235

UP LAW BOC LABOR RELATIONS LABOR LAW

Organized vs. Unorganized Establishment

Art. 268: Organized Art. 269: Unorganized

Sole and exclusive Existing, has one None
Bargaining agent
Petition filed Must be VERIFIED No need to be verified
No petition for Certification election EXCEPT Not applicable.
within 60 days before the expiration of the
No freedom period.
collective bargaining agreement (See Art. 264
& 265) Can file petition anytime.
Take note how SC interpreted the term
Freedom Period “WITHIN”.
What is the rationale of freedom period in
Organized establishments, why is there none in
unorganized establishments?
It has something to do with industrial peace

Must be duly supported by 25% of ALL THE NO substantial support rule.

MEMBERS OF THE APPROPRIATE
BARGAINING UNIT.
Rationale
Rationale
Substantial support rule
Intention of law is to bring in
Law wants to know the intention of the
the union, to implement policy
employees – If they really want a Certification
behind Art. 218A.
election, since they already have a bargaining
agent.

PAGE 168 OF 235

UP LAW BOC LABOR RELATIONS LABOR LAW

PROCEDURE AFTER FILING OF PETITION for the final disposition of the case [§10, Rule
VIII, Book V]
1. Raffling of case to Med-Arbiter
Note: If contending unions agree to holding of
2. Preliminary Conference and hearing
an election, [...]it shall be called a consent
3. Conduct of hearings election. [§11, Rule VIII, Book V]
4. Determine if petition should be
dismissed on grounds stated in Section 15
(3) Med-Arbiter to conduct hearings
5. Order/Decision on the petition
If contending unions fail to agree to a consent
6. Appealing the order/decision on the election during the preliminary conference,
petition the Med-Arbiter may conduct as many
hearings as he/she may deem necessary, but
7. Raffling of the case to an Election
in no case shall the conduct thereof exceed
Officer
fifteen (15) days from date of scheduled
8. Pre-Election Conference preliminary conference/hearing, after which
9. Conduct of election the petition shall be considered submitted for
decision. [...]
10. Challenging of votes and on the spot
questions Within the same 15-day period [...], the
contending labor unions may file such
11. Protesting pleadings as they may deem necessary for the
12. Canvassing of votes immediate resolution of the petition.
Extensions of time shall not be entertained.
13. Nullification of Election Results [§12, Rule VIII, Book V]
14. Proclamation and Certification of the
result of the election
(4) Determine if petition should be
15. Appeal from Certification Election dismissed based on grounds stated in Section
Orders 15.
The grounds to dismiss the petition are:
(1) Raffle of case to Med-Arbiter (a) Petitioning union or national
The Regional Director or his/her duly union/federation is:
authorized representative shall immediately (i) Not listed in DOLE’s registry of
assign it by raffle to a [Med-Arbiter]. The raffle legitimate labor unions; or
shall be done in the presence of the petitioner
if the latter so desires. [§5, Rule VIII, Book V] (ii) Registration certificate has
been cancelled with finality
(b) Failure of a local/chapter or national
(2) Preliminary Conference union/federation to submit a duly issued
Med-Arbiter shall conduct a preliminary charter certificate upon filing of the petition
conference and hearing within ten (10) days for certification election
from receipt of the petition to determine the (c) Contract Bar rule
following:
(d) One-Year Bar rule
(a) The bargaining unit to be represented;
(e) Negotiation and Deadlock Bar Rule
(b) Contending labor unions
(f) In an organized establishment, the
(c) Possibility of a consent election failure to submit the 25% signature
(d) Existence of any of the bars to requirement to support the filing of the
certification election under Section 3[, Rule petition.
VIII]; and (g) Non-appearance of the petitioner for
(e) Such other matters as may be relevant two (2) consecutive scheduled conferences
PAGE 169 OF 235
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before the [Med-Arbiter] despite due notice; (b) Description of the bargaining unit;
and
(c) Statement that none of the grounds for
(h) Absence of employer-employee dismissal [...] in Section 14 exists;
relationship between all the members of the
(d) Names of the contending labor unions
petitioning unit and the establishment where
[...] in the following order:
the proposed bargaining unit is sought to be
represented. (i) Petitioner unions in the order
of the date of filing of their respective
NOTE: See page 164 for the 4 Bars to
petitions
Certification Election (One-year bar rule,
Negotiation bar rule, Deadlock bar rule, (ii) The forced intervenor
Contract bar rule)
(iii) “No union”
(e) [If] the local/chapter is one the
Commingling is not a ground contending unions, a directive to an
unregistered local/chapter or a
The inclusion as union members of employees
federation/national union representing all
outside the bargaining unit [is] not a ground
unregistered local/chapter to personally
for cancellation of the registration of the union.
submit to the Election Officer its certificate of
Said employees are automatically deemed
creation at least five (5) working days before
removed from the list of membership. [§16,
the actual conduct of the certification election.
Rule VIII, Book V]
[This is to afford an individual employee-voter
Posting of notice of Petition for Certificate an informed choice.]
Election
Non-submission of this requirement as
The Regional Director or his/her authorized certified by Election Officer shall disqualify the
DOLE personnel, and/or the petitioner shall local/ chapter from participating in the
be responsible for the posting of the notice of certification election
petition for certification election. . [§7, Rule
(f) Directive to the employer and the
VIII, Book V]
contending unions to submit within ten (10)
days from receipt of order:
(5) Order or decision on the petition (i) The certified list of employees
in the bargaining unit, or where
[Med-Arbiter] shall issue a ruling granting or
necessary,
denying the petition
(ii) Payrolls covering the
When
members of the bargaining unit for the
● General rule: Within ten (10) days from last three (3) months prior to the
last hearing issuance of the order
● Exception: In organized establishments,
grant of the petition can only be made after (6) Appealing the order granting or denying
the lapse of the freedom period [§14, Rule VIII, the conduct of certification election [§19-20,
Book V] Rule VIII, Book V]
How
● Personally to the parties Organized Dismissed
or denied
● Copy furnished to the employer [§18, Appeal to
Granted
Rule VIII, Book V] Office of
Secretary
The ruling for the conduct of a certification Unorganized Dismissed
election shall state the following: or denied
Granted Unappealable
(a) Name of the employer or establishment;

PAGE 170 OF 235

UP LAW BOC LABOR RELATIONS
When filed
Within ten (10) days from receipt of the order
[of the Med-Arbiter].
Where filed
Regional Office where the petition originated
Form of appeal
● Verified under oath
● [Consists of] a memorandum of appeal
specifically stating the grounds relied upon by
appellant with the supporting arguments and
evidence
Effect of filing memorandum of appeal
Stays the holding of any certification election.
[§23, Rule VIII, Book V]
Reply to Appeal
Reply by any party to the petition shall be filed
within ten (10) days from receipt of the
memorandum of appeal [...] and filed directly
with the office of the Secretary. [§22, Rule VIII,
Book V]
When no appeal is filed
The decision shall be final and executory if no
appeal is filed within the ten (10) day period.
[§21, Rule VIII, Book V]
Decision of the Secretary
Period to decide: Fifteen (15) days from receipt
of entire records of the petition to decide the
appeal.
Secretary’s decision shall be final and
executory within ten (10) days from receipt by
parties. [§23, Rule VIII, Book V]
Note: No motion for reconsideration of
decision shall be entertained. [§23, Rule VIII,
Book V]
Implementation of decision
General Rule: Shall not be stayed
PAGE 171 OF 235
LABOR LAW
Exception: Restrained by appropriate court
[§24, Rule VIII, Book V]
(7) Raffling of the case to an Election Officer
Regional Director shall cause the raffle of the
case to an Election Officer who shall have
control of:
(a) Pre-election conference; and
(b) Election proceedings
When: Within twenty-four (24) hours from
receipt of notice of entry of final judgment
granting the conduct of a certification election
[§2, Rule IX, Book V]
(8) Pre-Election Conference
Notice of Pre-Election Conference [§3, Rule IX,
Book V]
The Election Officer shall cause the issuance
of notice of pre-election conference upon the
contending unions
When: Within twenty-four (24) hours from the
[Election Officer’s] receipt of assignment for
the conduct of a certification election
Schedule of pre-election conference
When: Within ten (10) days from receipt of the
assignment
Completed within thirty (30) days from the
date of the first hearing [§5, Rule IX, Book V]
Employer to submit: [§3, Rule IX, Book V]
(a) Certified list of employees in the
bargaining unit; or where necessary,
(b) Payrolls covering the members of the
bargaining unit at the time of the filing of
petition
Failure of party to appear during pre-election
conference despite notice [§4, Rule IX, Book V]
This shall be considered a waiver of right to:
(a) To be present; and
(b) To question or object to any of the
agreements reached in the pre-election
UP LAW BOC
conference
Shall NOT deprive the non-appearing party of
the right to:
(a) Be furnished notices; and
(b) To attend subsequent pre-election
conferences
Minutes of pre-election conference [§5, Rule
IX, Book V]
Election Officer shall keep the minutes of
matters raised and agreed upon.
Parties shall acknowledge the completeness
and correctness of entries in the minutes by
affixing their signatures.
When parties refuse to sign the minutes, the
Election Officer shall note such fact in the
minutes, including the reason for refusal to
sign the same.
In all cases, parties shall be furnished a copy
of the minutes.
QUALIFICATION OF VOTERS
Eligible Voter
Eligible voter refers to a voter belonging to the
appropriate bargaining unit that is the subject
of the petition for certification election [§1(r),
Rule VIII, Book V]
All employees who are members of the
appropriate bargaining unit three (3) months
prior to the filing of the petition shall be
eligible to vote. [§6, Rule IX, Book V]
Note: Rule VIII, Sec. 14 (f) and Rule IX, Sec. 6
refer to employees as those employed 3
months prior to the issuance of the order/the
filing of the petition for certification election
while Rule IX, Sec. 3 reckon the period of
employment from the “time of filing the
petition”. This difference has not been
resolved in any case before the Supreme Court.
All rank and file employees in the appropriate
bargaining unit, whether probationary or
permanent are entitled to vote. [...] The Code
makes no distinction as to their employment
status. [...] All they need to be eligible to
support the petition is to belong to a
bargaining unit. [Airtime Specialists, Inc. v
Ferrer-Calleja, G.R. No. 80612-16 (1990)]
LABOR RELATIONS LABOR LAW
Rationale for Non-Distinction Policy
Collective bargaining covers all aspects of the
employment relation and the resultant CBA
binds all employees in the bargaining unit. All
rank and file employees, probationary or
permanent, have a substantial interest in the
selection of the bargaining representative.
[Airtime Specialists, Inc. v Ferrer-Calleja, G.R.
No. 80612-16 (1990)]
Dismissed employees [§6, Rule IX, Book V]
General Rule: [Dismissed] employees [who]
contested legality of the dismissal in a forum
of appropriate jurisdiction at the time of the
issuance of the order for conduct of a
certification election
Exception: Dismissal was declared valid in a
final judgment at the time of the conduct of
the certification election.
Disagreement over voters’ list over eligibility
of voters [§6, Rule IX, Book V]
All contested voters shall be allowed to vote
[but] their votes shall be segregated and
sealed in individual envelopes.
Voting List and Voters
The basis of determining voters may be agreed
upon by the parties (i.e. the use of payroll).
[Acoje Workers Union v NAMAWU, G.R. No. L-
18848 (1963)]
Non-participation in previous election has no
effect
[Failure to take part in previous elections is no
bar to the right to participate in future
elections.] No law, administrative rule or
precedent prescribes forfeiture of the right to
vote by reason of neglect to exercise the right
in past certification elections. [Reyes v.
Trajano, G.R. No. 84433 (1992)]
NOTICE REQUIREMENT [§7, Rule IX, Book V]
Posting of Notice
WHO: Election Officer and/or authorized
DOLE personnel shall cause the posting
WHAT: Notice of election
PAGE 172 OF 235
UP LAW BOC
WHERE: 2 most conspicuous places in the
company premises
WHEN: At least ten (10) days before the actual
[election date]
Contents of Notice [§7, Rule IX, Book V]
(1) Date and time of the election;
(2) Names of all contending unions;
(3) Description of the bargaining unit;
(4) List of eligible and challenged voters.
Posting of the list of employees comprising
the bargaining unit shall be done by the DOLE
personnel.
What cannot be waived by contending unions
or employer:
(1) Posting of the notice of election
(2) Information required to be included
therein
(3) Duration of the posting
The parties agreed to conduct the election on
[...] a regular business day [but a strike was
held on that day.] The alleged strike and/or
picketing of some employees at the company’s
premises which coincided with the actual
conduct of certification election might,
perhaps have affected the actual performance
of works by some employees, but did not
necessarily make said date an irregular
business day of the company. [Asian Design
and Manufacturing Corp. vs. Ferrer--Calleja,
G.R. No. L-77415 (1989)]
(9) Conduct of Election
Inspection to ensure secrecy and sanctity of
ballot [§8, Rule IX, Book V]
By whom:
● Election Officer, together with
● Contending unions ’ authorized
representative; and
● Employer';
When: Before start of actual voting
Shall inspect:
PAGE 173 OF 235
LABOR RELATIONS LABOR LAW
● Polling place;
● Ballot boxes; and
● Polling booths
Prohibition on certain devices
General Rule: No device that could record or
identify the voter or otherwise undermine the
secrecy and sanctity of the ballot shall be
allowed within the premises
Exception: Devices brought in by the Election
Officer
Consequence: Any other device found within
the premises shall be confiscated by the
Election Officer and returned to its owner after
conduct of the certification election.
Preparation of Ballots [§9, Rule IX, Book V]
Election Officer shall prepare the ballots in:
(a) English; and
(b) Filipino or the local dialect
Number of ballots should correspond to the
number of voters in the bargaining unit plus a
reasonable number of extra ballots for
contingencies
All ballots shall be signed at the back by:
(a) Election Officer; and
(b) An authorized representative each of
the contending unions
Refusal or failure of party to sign ballots
Party waives its right to do so and the Election
Officer shall enter the fact of refusal or failure
and the reason therefor in the records of the
case
Casting of Votes [§10, Rule IX, Book V]
Voter must put:
(a) Cross (x)
(b) Check (✓)
Where: Square opposite the
(a) Name of the chosen union; or
(b) “No Union”
UP LAW BOC LABOR RELATIONS LABOR LAW

Spoiled Ballots Opening of envelopes and question of

eligibility
A ballot that is torn, defaced, or contains
marking which can lead another to clearly Shall be passed upon by the Med-Arbiter only
identify the voter who casts such vote [§1(ww), if the number of segregated votes will
Rule I, Book V] materially alter the results of the election.
If the voter inadvertently spoils a ballot, he
shall return it to the Election Officer who shall
On-the-spot Questions
destroy it and give him/her another ballot.
[§10, Rule IX, Book V] What the Election Officer shall rule on:
Member unintentionally omitted the in master Any question relating to and raised during the
list of voters may either be: conduct of election
(a) May be allowed to vote if both parties
agree; [OR]
What the Election Officer SHALL NOT rule on:
(b) Allowed to vote but the ballot is
Question of eligibility which shall be decided
segregated
by the Mediator-Arbiter
Failure of representative/s of the contending
(10) Challenging of votes and on the spot unions to appear [§15, Rule IX, Book V]
questions [§11-12, Rule IX, Book V]
Considered a waiver of the right to be present
Ballot of the voter who has been properly and to question the conduct thereof
challenged during the pre-election
conferences shall be:
(11) Protest [§13, Rule IX, Book V]
(a) Placed in an envelope sealed by Election
Officer in the presence of: Who may file: Any party-in-interest
(i) the voter; and Ground: On the conduct or mechanics of the
election
(ii) representatives of the
contending unions. How to protest:
(b) Election Officer shall indicate on the (1) [Record the protest] in the minutes of
envelope the: the election proceedings; AND
(i) Voter’s name; (2) Formalize [the] protest with the Med-
Arbiter, with specific grounds, arguments and
(ii) Union challenging the voter;
evidence within five (5) days after the close of
and
the election proceedings
(iii) Ground for the challenge
(c) Sealed envelope shall be signed by:
Protests deemed dropped
(i) Election Officer; and
Protests [which are]:
(ii) Representatives of the
(2) Not recorded in the minutes; AND
contending unions
(3) Formalized within the prescribed period
General Reservation to file protest prohibited
Election Officer shall:
Protesting party shall specify the grounds for
(a) Note all challenges in the minutes of the
protest.
election proceedings; and
Failure to formalize within 5-days cannot be
(b) Have custody of all envelopes
taken against the union.
containing the challenged votes
PAGE 174 OF 235
UP LAW BOC LABOR RELATIONS
[The petitioner union misrepresented that
they were independent which caused the
members to disaffiliate and form a new union
and their protest was not filed within the 5-day
period. The] failure to follow strictly the
procedural technicalities regarding the period
for filing their protest should not be taken
against them. Mere technicalities should not
be allowed to prevail over the welfare of the
workers. What is essential is that they be
accorded an opportunity to determine freely
and intelligently which labor organization
shall act on their behalf. [DHL-URFA-FFW v.
BMP, G.R. No. 152094 (2004)]
Note:
Election Proceedings refer to the period
during a certification, consent or run-off
election, and election of union officers
Included:
(a) Starting from the opening to the closing
of the polls
(b) Counting, tabulation and consolidation
of votes
Excluded:
(1) Period for the final determination of the
challenged votes
(2) Canvass of the challenged votes
[§1(q), Rule I, Book V]
(12) Canvassing of Votes [§15, Rule IX, Book
V]
Election precincts shall open and close on the
date and time agreed upon during the pre-
election conference.
The opening and canvass of votes shall
proceed immediately after the precincts have
closed
Procedure [§14, Rule IX, Book V]
● [Election Officer shall count and
tabulate the votes] in the presence of the
representatives of the contending unions.
● Upon completion of canvass, the
Election Officer shall give each representative
a copy of the minutes of the election
proceedings and results of the election.
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LABOR LAW
● Ballots and tally sheets shall be sealed
in an envelope and signed by the Election
Officer and the representatives of the
contending unions and transmitted to the
Med-Arbiter together with the minutes and
results of the election within twenty-four (24)
hours from the completion of the canvass.
Election conducted in more than one region
Consolidation of results shall be made within
fifteen (15) days from the conduct thereof.
(13) Certification of the Collective Bargaining
Agent
Double Majority Rule
1. There must be a valid certification or
consent election; and
Valid Election: At least majority of the number
of eligible voters have cast their votes (VOTES
CAST) [§17, Rule IX, Book V]
2. The winning union must garner majority
of the VALID VOTES CAST [§16, Rule IX, Book
V]
Winning union certifies as SEBA if there is no
protest [§16, Rule IX, Book V]
The [winning union] shall be certified as the
[SEBA] in the appropriate bargaining unit
within five (5) days from date of election,
provided no protest is recorded in the minutes
of the election.
When winning choice is local chapter without
certificate of creation of chartered local
It must submit its DOLE issued certificate of
creation within five (5) days from the
conclusion of election
Note: Please note that valid votes differ from
mere votes as the former excludes spoiled
ballots.
Abstention: Refers to a blank or unfilled ballot
validly cast by an eligible voter. It is not
considered as a negative vote. However, it
shall be considered a valid vote for purposes
of determining a valid election. [§1(a), Rule I,
Book V]
Spoiled Ballot: Refers to a ballot that is torn,
defaced, or contains markings which can lead
another to clearly identify the voter who casts
such vote. [§1(ww), Rule I, Book V]
UP LAW BOC LABOR RELATIONS LABOR LAW

Arbiter] shall issue an order proclaiming the

results of the election and certifying the union
Failure of Election [§17, Rule IX, Book V]
as the [SEBA] under any of the following
The Election Officer shall declare a failure of conditions:
election in the minutes of the election
(a) No protests were filed, or even if one was
proceedings when:
filed, [it] was not perfected within the five-day
(1) Number of VOTES CAST is less than the period
majority of the number of eligible voters; AND
(b) No challenge or eligibility issue was
(2) There are no material challenged votes raised, or even if one was raised, [its]
resolution will not materially change the
results of the elections.
Effect of Failure of Election [§19, Rule IX, Book
Winning union shall have the rights, privileges,
V]
and obligations of a duly certified collective
Shall not bar the filing of a motion for the bargaining agent from the time the
immediate holding of another certification or certification is issued.
consent election within six (6) months from
Majority of valid votes cast results in “no Union”
date of declaration of failure of election.
obtaining majority
Motion for another election after failure of
Med-Arbiter shall declare such fact in the
election [§20, Rule IX, Book V]
order
Within twenty-four (24) hours from receipt of
the motion, the Election Officer shall:
(15) Appeal from Certification Election
● Immediately schedule another election Orders [Art. 272]
within fifteen (15) days from receipt of motion
WHO APPEALS: Any party to an election
● Cause posting of the notice of election
WHAT IS APPEALED: Order or results of the
o At least ten (10) days prior to the election
scheduled date of election
APPEAL TO: Directly to SOLE
o In two (2) most conspicuous places in
the establishment GROUND: Rules and regulations established
by the SOLE for the conduct of the election
Same guidelines and list of voters shall be have been violated.
used.
Note: Another effect is a RE-RUN ELECTION,
which “shall likewise refer to an election BARS TO CERTIFICATION ELECTION
conducted after a failure of election has been Petition for certification may be filed:
declared by the Election Officer and/or
affirmed by the [Med-Arbiter].” [§1(tt), Rule I, General Rule: Anytime
Book V] Exceptions:
(1) One-year bar rule
(14) Certification of the Collective Bargaining (2) Negotiation bar rule
Agent [§21, Rule IX, Book V]
(3) Deadlock bar rule
Within 24 hours from final canvass of votes,
there being a VALID election, the Election (4) Contract bar rule
Officer shall transmit the records of the case NOTE: See Page 16 for the Grounds for
to the Med-Arbiter. denying a Petition for Certification Election

Within the same period from receipt of the (1) One-year bar rule
minutes and results of election, [the Med-
No certification election may be held within 1
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year from the time a valid certification,
consent or run-off election has been
conducted within the bargaining unit.
[If the order of the Med-Arbiter certifying the
results of the election has been appealed], the
running of the one-year period shall be
suspended until the decision on the appeal
becomes final and executory. [§3(a), Rule VIII,
Book V
NOTE: This bar also applies to a SEBA
Certification under Rule VII. “The certification
shall bar the filing of a petition for certification
election by any labor organization for a period
of one (1) year from the date of its issuance.”
[§4.2, Rule VII, Book V]
(2) Negotiation bar rule
No certification of election may be filed when:
(1) Within 1 year after the valid certification
election
(2) The DULY CERTIFIED union has
COMMENCED AND SUSTAINED negotiations
in good faith with the employer
(3) In accordance with Art. 261 of the Labor
Code §3(b), Rule VIII, Book V
(3) Deadlock bar rule
No certification of election may be filed when:
(1) The incumbent or certified bargaining
agent is a party;
(2) A bargaining deadlock had been:
(a) submitted to conciliation or arbitration
or;
(b) Had become the subject of a valid notice
of strike or lockout [§3(c), Rule VIII, Book V]
A “deadlock” is defined as the “counteraction
of things producing entire stoppage; a state of
inaction or of neutralization caused by the
opposition of persons or of factions (as in
government or voting body): standstill.” [...]
The word is synonymous with the word
impasse which [...] “presupposes reasonable
effort at good faith bargaining which, despite
noble intentions, does not conclude in
agreement between the parties” [Divine World
LABOR RELATIONS LABOR LAW
University v. SOLE, G.R. No. 91915 (1992)]
(4) Contract Bar Rule
BLR shall not entertain any petition for
certification election or any other action which
may disturb the administration of DULY
REGISTERED existing collective bargaining
agreements affecting the parties. except
under Arts. 264, 265, and 268 [(60-day
freedom period)]. [Art. 238]
No petition for certification election may be
filed when a [CBA] between the employer and
a SEBA has been registered in accordance
with Art. 237. Where such [CBA] is registered,
the petition may be filed only within sixty (60)
days prior to its expiry. [§3(d), Rule VIII, Book
V].
The five-year representation status acquired
by an incumbent bargaining agent either
through single enterprise collective
bargaining or multi-employer bargaining
shall not be affected by a subsequent [CBA]
executed between the same bargaining agent
and the employer during the same five-year
period. [§7, Rule XVII, Book V]
Despite an agreement for a CBA with a life of
more than five years, either as an original
provision or by amendment, the bargaining
union’s exclusive bargaining status is effective
only for five years and can be challenged
within sixty (60) days prior to the expiration of
the CBA’s first five years. [FVC Labor Union-
PTGWO v. SANAMA-FVC-SIGLO, G.R. No.
176249 (2009)]
(1)
. The rule is that despite the lapse of the
formal effectivity of the CBA the law still
considers the same as continuing in force and
effect until a new CBA shall have been validly
executed. Hence, the contract bar rule still
applies. . [Colegio de San Juan de Letran v.
Association of employees, G.R. No. 141471,
(2000)]
Petition for cancellation of union registration
DOES NOT suspend or prevent filing of
certification election
A petition for cancellation of union
registration shall not:
(a) suspend the proceedings for
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certification election; nor
(b) prevent the filing of a petition for
certification election. [Art. 246]
A certification election can be conducted
despite pendency of a petition to cancel the
union registration certificate. For the fact is
that at the time the [union], whose registration
certificate is sought to be cancelled, filed its
petition for certification, it still had the legal
personality to perform such act absent an
order directing its cancellation. [Association of
Court of Appeals Employees vs. Calleja, G.R.
No. 94716, (1991)]
PREJUDICIAL QUESTION
Prejudicial Question Rule
Labor claims cannot proceed independently
of:
● A bankruptcy liquidation proceeding;
and
● Suspension order in a rehabilitation
case. The law is clear, upon the creation of a
management committee or the appointment
of a rehabilitation receiver, all claims for
actions “shall be suspended accordingly.”
No exception in favor of labor claims is
mentioned in the law. Since the law makes no
distinction or exemptions, neither should this
Court.
In RA 10142, a claim refers to “all claims or
demands of whatever nature or character
against the debtor or its property, whether for
money or otherwise, liquidated or
unliquidated, fixed or contingent, matured or
unmatured, disputed or undisputed, including,
but not limited to; (1) all claims of the
government, whether national or local,
including taxes, tariffs and customs duties;
and (2) claims against directors and officers of
the debtor arising from acts done in the
discharge of their functions falling within the
scope of their authority: Provided, That, this
inclusion does not prohibit the creditors or
third parties from filing cases against the
directors and officers acting in their personal
capacities.”
NOTE: Under the Financial Rehabilitation and
Insolvency Act (FRIA), rehabilitation
proceedings shall commence upon a
LABOR RELATIONS LABOR LAW
Commencement Order which includes a Stay
or Suspension Order [suspending] all actions
or proceedings, in court or otherwise, for the
enforcement of claims against the debtor
[§16(q)(1)].
In liquidation proceedings, upon the issuance
of a Liquidation Order, no separate action for
the collection of an unsecured claim shall be
allowed [§113]. Under a Liquidation Plan,
credits for services rendered by employees or
laborers to the debtor shall enjoy first
preference under Article 2244 of the Civil Code,
unless the claims constitute legal liens under
Articles 2241 and 2242 thereof [§133].
Claim shall refer to all claims or demands of
whatever nature or character against the
debtor or its property [§4(c)].
Rationale
These claims would spawn needless
controversy, delays, and confusion. [Lingkod
Manggagawa sa Rubberworld, Adidas--Anglo
vs. Rubberworld (Phils.), Inc., G.R. No. 153882
(2007)]
Allegation of company union a prejudicial
question to a petition for certification election
A complaint for unfair labor practice may be
considered a prejudicial question in a
proceeding for certification election when it is
charged therein that one or more labor unions
participating in the election are being aided,
or are controlled, by the company or employer
[company union] [United CMC Textile
Worker’s Union v. BLR, (1984)].
Rationale:
The certification election may lead to the
selection of an employer--dominated or
company union as the employees’ bargaining
representative, and when the court finds that
said union is employer--dominated in the
unfair labor practice case, the union selected
would be decertified and the whole election
proceedings would be rendered useless and
nugatory. [B.F. Goodrich Phils. Marikina v. B.F.
Goodrich Confidential and Salaried
Employees Union, G.R. No. L-34069-70,
(1973)]
RE-RUN ELECTION
[§18, Rule IX, Book V]
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UP LAW BOC LABOR RELATIONS LABOR LAW

Situation Contemplated days from said election.

A certification, consent or run-off election
results to a tie between two (2) choices.
Duty of Election Officer
(a) Notify parties of a re-run election
(b) Cause posting of notice within five (5)
When will re-run be conducted
Within ten (10) days after the posting of the
notice
Declared as winner and certified
Choice receiving the HIGHEST VOTES CAST.

Certification election Consent Election

Aimed at determining the sole and exclusive Merely to determine the issue of
bargaining agent of all employees in an majority representation of all the
appropriate bargaining unit for the purpose workers in the appropriate
of collective bargaining collective bargaining unit
Purpose 1st Level of Choice: Yes Union or No Union
2nd Level of Choice: If “Yes Union” wins,
WHICH union.
[UST Faculty Union v. Bitonio, G.R. No.
131235 (1999)]
Ordered by the DOLE Voluntarily agreed upon by the
Conduct parties, with or without
intervention from DOLE

UNION-MEMBER RELATIONS (b) who is engaged directly or indirectly in

any subversive activity;
Nature of Relationship
The nature of the relationship between the
union and its members is fiduciary in nature Unions cannot arbitrarily exclude qualified
which arises from the dependence of the applicants
employee on the union, and from the
Unions are not entitled to arbitrarily exclude
comprehensive power vested in it with respect
qualified applicants for membership, and a
to the individual. The union is but the agent of
closed--shop provision would not justify the
its members to secure fair and just wages and
employer in discharging, or a union in insisting
good working conditions. [Heirs of Cruz v. CIR,
upon the discharge of, an employee whom the
G.R. No. L-23331-32 (1969)]
union thus refuses to admit to membership,
without any reasonable ground therefor.
Needless to say, if said unions may be
Admission and Discipline of Members
compelled to admit new members, who have
No arbitrary or excessive initiation fees or fines the requisite qualifications, with more reason
may the law and the courts exercise the
No arbitrary or excessive initiation fees shall
coercive power when the employee involved is
be required of the members of a legitimate
a long standing union member, who, owing to
labor organization nor shall arbitrary,
provocations of union officers, was impelled to
excessive or oppressive fine and forfeiture be
imposed. [Article 250(e)] tender his resignation, which he forthwith
withdrew or revoked. [Salunga v. CIR, No. L--
Prohibition on subversive activities or 22456 (1967)]
membership
No labor organization shall knowingly admit
Members who seek destruction of union lose
as members or continue in membership any
right to remain as members
individual who:
Inherent in every labor union, or any
(a) belongs to a subversive organization; or
organization for that matter, is the right of
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UP LAW BOC LABOR RELATIONS LABOR LAW

self--preservation. When members of a labor allow members to vote

union, therefore, sow the seeds of dissension
Submission of the employees’ names with the
and strife within the union; when they seek the
BLR as qualified members of the union is not
disintegration and destruction of the very
a condition sine qua non to enable said
union to which they belong, they thereby
members to vote in the election of union’s
forfeit their rights to remain as members of the
officers. [...] The question of eligibility to vote
union which they seek to destroy. [Villar v.
may be determined through the use of the
Inciong, No. L--50283--84 (1983)]
applicable payroll period and employee’s
status. [Tancinco v. Ferrer-Calleja, G.R. No. L-
-78131 (1988)]
Election of Officers
Manner of election
Disqualification does not render those who
Members shall directly elect their officers,
garner the 2nd highest number of votes as the
including those of the national union or
winners
federation, to which they or their union is
affiliated, by secret ballot at intervals of five Disqualification of winning candidates will not
(5) years. [Art. 250(c)] result in the declaration of those who
garnered the second highest number of votes
Qualifications of officers
as winners. The mere fact that they obtained
No requirements other than membership in the second highest number of votes does not
good standing. [Art. 250(c)] mean that they will thereby be considered as
the elected officers if the true winners are
No person who has been convicted of a crime
disqualified. [Manalad v. Trajano, G.R. Nos.
involving moral turpitude shall be eligible for
72772--73 (1989)]
election as a union officer or for appointment
to any position in the union. [Art. 250(f)]
Major Policy Matters
Acts done in prior term is not a ground to Procedure of determining question of major
remove a public officer policy affecting the entire membership of the
organization [Art. 250(d)]
The Court should never remove a public officer
for acts done prior to his present term of office. General Rule:
To do otherwise would be to deprive the
(1) Members shall determine by secret
people of their right to elect their officers.
ballot; AND
When the people have elected a man to office,
it must be assumed that they did this with (2) After due deliberation
knowledge of his life and character, and that
Exception: Board of directors of the
they disregarded or forgave his faults or
organization may make the decision in behalf
misconduct, if he had been guilty of any. It is
of the general membership if:
not for the court, by reason of such faults or
misconduct to practically overrule the will of (1) Nature of the organization renders such
the people. [Kapisanan ng Manggagawang secret ballot impractical
Pinagyakap v. Trajano, G.R. No. L--62306
(2) Force majeure renders such secret
(1985), citing Pascual v. Provincial Board of
ballot impractical
Nueva Ecija, G.R. No. L-62306 (1959)]

A retainer’s contract
N.B.: Pascual set forth the condonation
doctrine, which was declared abandoned in A retainer’s contract of a union counsel is a
Morales v. Court of Appeals [G.R. Nos. 217126- major policy matter affecting the entire
27 (2015)] membership. [Halili v. CIR, No. L--24864
(1985)]
Union Dues
Submission of names not a requirement to
PAGE 180 OF 235
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Union dues are payments to meet the union’s
general and current obligations. The payment
must be regular, periodic, and uniform.
[Azucena]
Every payment of fees, dues or other
contributions by a member shall be evidenced
by a receipt signed by the officer or agent
making the collection and entered into the
record of the organization to be kept and
maintained for the purpose. [Art. 250 (h)]
Attorney’s Fees
Payment of Attorney’s fees cannot be imposed
in individual member
No attorney’s fees, negotiation fees, or similar
charges of any kind arising from any collective
bargaining agreement or conclusion of the
collective agreement shall be imposed on any
individual member. [Art. 228(b)]
Proper charging of attorney’s fees
(1) Charges against union funds; AND
(2) In an amount agreed upon by the parties
Any contract, agreement, or arrangement of
any sort to the contrary shall be void. [Art.
228(b)]
Different types of Attorney’s Fees
Ordinary Extraordinary
Reasonable Indemnity for damages
compensation paid to a ordered by the court to
lawyer for legal be paid by the losing
services rendered party to the winning
party
Agreed upon by the Awarded by the NLRC
parties
Payable to the lawyer Payable to the client
Not limited (freedom Limited by Art. 111 to
to contract) 10%
[Kaisahan at Kapatiran ng mga Manggagawa
at Kawani sa MWC-East Zone Union v. Manila
Water, G.R. No. 174179 (2011)]
There are two concepts of attorney's fees. In
the ordinary sense, attorney's fees represent
the reasonable compensation paid to a lawyer
by his client for the legal services rendered to
the latter. On the other hand, in its
LABOR RELATIONS LABOR LAW
extraordinary concept, attorney's fees may be
awarded by the court as indemnity for
damages to be paid by the losing party to the
prevailing party, such that, in any of the cases
provided by law where such award can be
made, e.g., those authorized in Article 2208 of
the Civil Code, the amount is payable not to
the lawyer but to the client, unless they have
agreed that the award shall pertain to the
lawyer as additional compensation or as part
thereof. [Masmud v NLRC, G.R. No. 183385
( 2009)]
In Masmud, the contingency agreement
between lawyer and client consisting of 39%
of the monetary award was deemed not
unconscionable by the SC.
D. Rights of labor organization
D. 1. CHECK-OFF, ASSESSMENT, AGENCY
FEES
Special assessments are payments for a
special purpose, especially if required only for
a limited time. [Azucena]
No special assessment or other extraordinary
fees may be levied upon the members of a
labor organization unless authorized by a
written resolution of a majority of all the
members at a general membership meeting
duly called for the purpose. [Art. 250 (n)]
Other than for mandatory activities under the
Code, no special assessments, attorney’s fees,
negotiation fees or any other extraordinary
fees may be checked off from any amount due
to an employee without an individual written
authorization duly signed by the employee.
The authorization should specifically state the
amount, purpose and beneficiary of the
deduction. [Art. 250 (o)]
Requisites for a Valid Special Assessment
(1) Authorization by a written resolution of
the majority of ALL the members at the
general membership meeting called for the
purpose;
(2) Secretary’s record of the minutes of the
meeting; AND
(3) Individual written authorization for
check off duly signed by the employees
concerned which indicates the:
a. Amount
PAGE 181 OF 235
UP LAW BOC LABOR RELATIONS
b. Purpose
c. Beneficiary of deduction
[Gabriel v. SOLE, G.R. No. 115949 (2000)]
Strict compliance for special assessment
There must be strict and full compliance with
the requisites. Substantial compliance is not
enough. [Palacol v. Ferrer-Calleja, G.R. No.
85333 (1990)]
Mandatory Activity
Definition
A judicial process of settling dispute laid down
by the law. [Vengco v. Trajano, G.R. No. 74453
(1989)]
Placement of re-negotiations for a CBA under
compulsory arbitration does not make it a
“mandatory activity”. [Galvadores v. Trajano,
No. -70067 (1986)]
It dispenses with the requirement of the
individual written authorization duly signed by
the employee [Art. 250(o)]
AGENCY FEES
An amount, equivalent to union dues, which a
non-union member pays to the union because
he benefits from the CBA negotiated by the
union. [Azucena]
Rationale for allowing agency fees
The legal basis of the union’s right to agency
fees is neither contractual nor statutory, but
quasi-contractual, deriving from the
established principle that non-union
employees may not unjustly enrich
themselves by benefiting from employment
conditions negotiated by the bargaining union.
[Holy Cross of Davao College, Inc v. Hon.
Joaquin, G.R. No. 110007 (1996)]
When Agency Fee assessed
If such non-union member accept the benefits
under the collective bargaining agreement.
[Art. 259(e)]
Measure of fee
A reasonable fee equivalent to the dues and
other fees paid by members of the recognized
collective bargaining agent. [Art. 259(e)]
Requirements:
PAGE 182 OF 235
LABOR LAW
(1) Non-member of SEBA
(2) Member of Collective Bargaining Unit
(3) Reasonable fee equivalent to the dues
and other fees paid by members
(4) Acceptance of CBA benefits
A.2.I. UNION CHARTERING/ AFFILIATION
DEFINITIONS
Affiliate
An independent union affiliated with a
federated, national union or a chartered local
which was subsequently granted independent
registration but did not disaffiliate from its
federation, reported to the Regional Office
and the Bureau in accordance with Rule III,
Secs. 6 and 7 [§1(b), Rule I, Book V]
Independent Union
A labor organization operating at the
enterprise level that acquired legal
personality through independent registration
under Art. 234 of the Labor Code and Rule III,
§2-A [§1(x), Rule I, Book V
National Union or Federation
A group of legitimate labor unions in a private
establishment organized for collective
bargaining or for dealing with employers
concerning terms and conditions of
employment for their member union or for
participating in the formulation of social and
employment policies, standards and
programs, registered with the BLR in
accordance with Rule III §2-B[§1(ll), Rule I,
Book V]
Chartered Local (Local Chapter)
A labor organization in the private sector
operating at the enterprise level that acquired
legal personality through registration with
Regional Office [§1(j), Rule I, Book V]
A duly registered federation or national union
may directly create a local chapter by issuing
a charter certificate indicating the
establishment of the local chapter. The
chapter shall acquire legal personality only for
purposes of filing a petition for certification
UP LAW BOC LABOR RELATIONS
election from the date it was issued a charter
certificate.
The chapter shall be entitled to all other rights
and privileges of a legitimate labor
organization only upon the submission of the
following documents in addition to its charter
certificate:
a. The names of the chapter's officers, their
addresses, and the principal office of the
chapter; and
b. The chapter's constitution and by-laws:
Provided, That where the chapter's
constitution and by-laws are the same as that
of the federation or the national union, this
fact shall be indicated accordingly.
The additional supporting requirements shall
be
● Certified under oath by:
o Secretary; or
o Treasurer
● Attested by: Its president [Art. 241]
Lesser requirements for Chartered locals
The intent of the law in imposing less
requirements in the case of a branch or local
of a registered federation or national union is
to encourage the affiliation of a local union
with a federation or national union in order to
increase the local unions’ bargaining powers
respecting terms and conditions of labor.
[SMCEU-PTGWO v. SMPEU-PDMP, G.R. No.
171153 (2007)]
Trade Union Centers cannot create locals or
chapters
Art. 241 mentions only “a duly registered
federation or national union.”
The solemn power and duty of the Court to
interpret and apply the law does not include
the power to correct by reading into the law
what is not written therein. [SMCEU-PTGWO v.
SMPEU-PDMP, G.R. No. 171153 (2007)]
National Union or Federation v. Trade Unions
National Union or Federation Trade Unions
With at least ten (10) locals or chapters (or
independent unions [§2-B(5), Rule III, Book V],
each of which must be a duly recognized
collective bargaining agent [Art. 244]
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LABOR LAW
Composed of a group of registered
national unions or federations
Can directly create local or chapter [Art. 241]
Cannot [SMCEU-PTGWO v. SMPEU-
PDMP, G.R. No. 171153 (2007)]
PURPOSE OF AFFILIATION
To foster the free and voluntary organization
of a strong and united labor movement [Art.
218-A(c)]
The sole essence of affiliation is to increase, by
collective action, the common bargaining
power of local unions for the effective
enhancement and protection of their interests.
Admittedly, there are times when without
succor and support local unions may find it
hard, unaided by other support groups, to
secure justice for themselves. [Philippine
Skylanders, Inc. v. NLRC, G.R. No. 127374
(2002)]
NATURE OF RELATIONSHIP: AGENCY
The mother union, acting for and in behalf of
its affiliate, had the status of an agent while
the local union remained the basic unit of the
association, free to serve the common interest
of all its members subject only to the restraints
imposed by the constitution and by-laws of
the association. [...] The same is true even if
the local is not a legitimate labor organization.
[Filipino Pipe and Foundry Corp v. NLRC, G.R.
No. 115180 (1998)]
EFFECT OF AFFILIATION
Inclusion of [the federation’s initials] in the
registration is merely to stress that they are its
affiliates at the time of registration. It does not
mean that said local unions cannot stand on
their own. [Adamson v CIR, G.R. No. L-35120
(1984)]
Mere affiliation does not divest the local union
of its own personality, neither does it give the
mother federation the license to act
independently of the local union. It only gives
rise to a contract of agency, where the former
acts in representation of the latter. Hence,
local unions are considered principals while
the federation is deemed to be merely their
agent. [Insular Hotel Employees Union NFL v
UP LAW BOC
Waterfront Insular Hotel, GR No. 174040-41
(2010)]
SUPERVISOR AND RANK AND FILE UNION
AFFILIATION
General Rule: The rank and file union and the
supervisors' union operating within the same
establishment MAY JOIN the SAME federation
or national union. [Art. 255]
DISAFFILIATION
Nature of Right and Legality
Such a phenomenon is nothing new in the
Philippine labor movement. Nor is it open to
any legal objection. It is implicit in the freedom
of association explicitly ordained by the
Constitution. There is then the
incontrovertible right of any individual to join
an organization of his choice. That option
belongs to him.. [Philippine Labor Alliance
Council (PLAC) v. BLR, No. L-41288 (1977)]
We upheld the right of local unions to separate
from their mother federation on the ground
that as separate and voluntary associations,
local unions do not owe their creation and
existence to the national federation to which
they are affiliated but, instead, to the will of
their members. [[Philippine Skylanders, Inc. v.
NLRC, G.R. No. 127374 (2002)]]
A local union, being a separate and voluntary
association, is free to serve the interests of all
its members including the freedom to
disaffiliate or declare its autonomy from the
federation which it belongs when
circumstances warrant, in accordance with the
constitutional guarantee of freedom of
association. Such disaffiliation cannot be
considered disloyalty. In the absence of
specific provisions in the federation’s
constitution prohibiting disaffiliation or the
declaration of autonomy of a local union, a
local may dissociate with its parent union.
[Malayang Samahan ng mga Manggagawa sa
M. Greenfield, Inc. v. Ramos, G.R. No. 113907
(2000)]
Period of Disaffiliation
Generally, a labor union may disaffiliate from
the mother union to form a local or
LABOR RELATIONS LABOR LAW
independent union only during the 60-day
freedom period immediately preceding the
expiration of the CBA. However, even before
the onset of the freedom period, disaffiliation
may be carried out when there is a shift of
allegiance on the part of the majority of the
members of the union. [ANGLO v. Samana
Bay, G.R. No. 118562 (1996)]
Effect of disaffiliation
On legal personality
A registered independent union retains its
legal personality while a chartered local loses
its legal personality unless it registers itself.
No effect on CBA
A disaffiliation does not disturb the
enforceability and administration of a
collective agreement; it does not occasion a
change of administrators of the contract nor
even an amendment of the provisions thereof.
[Volkschel Labor Union v. BLR, No. L-45824
(1985)]
Obligation to pay union dues is coterminous
with membership
The obligation of an employee to pay union
dues is coterminous with his affiliation or
membership. “The employees’ check--off
authorization, even if declared irrevocable, is
good only as long as they remain members of
the union concerned”. A contract between an
employer and the parent organization as
bargaining agent for the employees is
terminated by the disaffiliation of the local of
which the employees are members. [Volkschel
Labor Union v. BLR, No. L-45824 (1985)]
Power to represent principal severed
By [the local union’s disaffiliation from the
federation], the vinculum that previously
bound the two entities was completely
severed. [The federation] was divested of any
and all power to act in representation of the
union. Thus, any act performed by [the
federation] affecting the interests and affairs
of the [local union] is rendered without force
and effect. [ANGLO v. Samana, G.R. No.
118562 (1996)]
SUBSTITUTIONARY DOCTRINE
The “substitutionary” doctrine provides that
the employees cannot revoke the validly
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executed collective bargaining contract with
their employer by the simple expedient of
changing their bargaining agent. And it is in
the light of this that the phrase “said new
agent would have to respect said contract”
must be understood. It only means that the
employees, thru their new bargaining agent,
cannot renege on their collective bargaining
contract, except of course to negotiate with
management for the shortening thereof.
[Benguet Consolidated v. BCI Employees and
Workers Union-PAFLU, G.R. No. L-24711
(1968)]
Conditions to apply the doctrine
(1) change of bargaining agent (through
affiliation, disaffiliation, or other means); and
(2) existing CBA with the previous
bargaining agent [Benguet Consolidated v.
BCI Employees and Workers Union-PAFLU,
G.R. No. L-24711 (1998)]
Effects:
(1) new bargaining agent cannot revoke
and must respect the existing CBA; and
(2) it may negotiate with management to
shorten the existing CBA’s lifetime
D.2. COLLECTIVE BARGAINING
GENERAL CONCEPTS
Constitutional Policies
(1) [The State] shall guarantee the rights of
all workers to self-organization, collective
bargaining and negotiations […] [1987
Constitution, Art. XIII, §3, par. 2]
(2) The State shall promote the principle of
shared responsibility between workers and
employers and the preferential use of
voluntary modes in settling disputes,
including conciliation, and shall enforce their
mutual compliance therewith to foster
industrial peace. [1987 Constitution, Art. XIII,
§3, par. 3]
Statutory Policies
LABOR RELATIONS LABOR LAW
(1) To promote and emphasize the primacy
of free collective bargaining and negotiations,
including voluntary arbitration, mediation and
conciliation, as modes of settling labor or
industrial disputes. [Art. 218-A(a)]
(2) It is the policy of the State to promote
and emphasize the primacy of free and
responsible exercise of the right to self-
organization and collective bargaining, either
through single enterprise level negotiations or
through the creation of a mechanism by which
different employers and recognized certified
labor unions in their establishments bargain
collectively. [Book V, Rule XVI, §1]
(3) To encourage a truly democratic
method of regulating the relations between
the employers and employees by means of
agreements freely entered into through
collective bargaining, no court or
administrative agency or official shall have the
power to set or fix wages, rates of pay, hours
of work or other terms and conditions of
employment, except as otherwise provided
under this Code [Art. 218-B]
Definition, Nature, and Purpose
Collective bargaining which is defined as
negotiations towards a collective agreement,
is one of the democratic frameworks under the
[Labor] Code, designed to stabilize the
relations between labor and management
and to create a climate of sound and stable
industrial peace. It is a mutual responsibility of
the employer and the Union and is
characterized as a legal obligation. [Kiok Loy v.
NLRC, G.R. No. L-54334 (1986)]
The institution of collective bargaining is [...] a
prime manifestation of industrial democracy
at work. The two parties to the relationship,
labor and management, make their own rules
by coming to terms [...] to govern themselves
in matters that really count. [United
Employees Union of Gelmart Industries v.
Noriel, 1975]
Right to Suspend Free Collective Bargaining
The assailed PAL-PALEA agreement was the
result of voluntary collective bargaining
negotiations undertaken in the light of the
severe financial situation faced by the
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UP LAW BOC LABOR RELATIONS LABOR LAW

employer, with the peculiar and unique the majority of the employees [...], hence, it
intention of not merely promoting industrial could not demand from [the employer] the
peace at PAL, but preventing the latter’s right to bargain collectively in their behalf.
closure. [...] It was PALEA, as the exclusive [Phil. Diamond Hotel and Resort Inc v Manila
bargaining agent of PALs ground employees, Diamond Hotel and Employees Union, GR No.
that voluntarily entered into the CBA with PAL. 158075 (2006)]
It was also PALEA that voluntarily opted for
the 10-year suspension of the CBA. Either case
was the union’s exercise of its right to Meaning of Bargaining in Good Faith
collective bargaining. The right to free
[T]here is no per se test of good faith in
collective bargaining, after all, includes the
bargaining. Good faith or bad faith is an
right to suspend it. [Rivera v. Espiritu, 2000]
inference to be drawn from the facts. [Union of
Filipro Employees v. Nestle Philippines, Inc.,
G.R. Nos. 158930-31 (2008)][T]he failure to
D.2.A. DUTY TO BARGAIN COLLECTIVELY
reach an agreement after negotiations
continued for a reasonable period does not
establish a lack of good faith. The laws invite
I. IN GENERAL
and contemplate a collective bargaining
Definition contract, but they do not compel one.
[Tabangao Shell Refinery Employees
Art. 263. Meaning of duty to bargain
Association vs. Pilipinas Shell Petroleum
collectively. — The duty to bargain collectively
Corporation, G.R. No. 170007 (2014)]
means the performance of a mutual
obligation to meet and convene promptly and
expeditiously in good faith for the purpose of
Duty to Bargain does not include:
negotiating an agreement with respect to
wages, hours of work, and all other terms and (1) Any legal duty [on the employer] to
conditions of employment including proposals initiate contract negotiation [Kiok Loy v NLRC,
for adjusting any grievances or questions G.R. No. L-54334 (1986)]
arising under such agreement and executing a
(2) The obligation to reach an agreement:
contract incorporating such agreements if
While the law makes it an obligation for the
requested by either party, but such duty does
employer and the employees to bargain
not compel any party to agree to a proposal or
collectively with each other, such compulsion
to make any concession.
does not include the commitment to
precipitately accept or agree to the proposals
of the other. All it contemplates is that both
Jurisdictional Preconditions of Duty to Bargain
parties should approach the negotiation with
(1) Possession of the status of majority an open mind and make reasonable effort to
representation of the employees’ reach a common ground of agreement. [Union
representative in accordance with any of the of Filipro Employees v. Nestle, G.R. Nos.
means of selection or designation provided for 158930-31 (2008)]
by the Code;
II. WHEN THERE IS AN ABSENCE OF A CBA
(2) Proof of majority representation; AND
Art. 262. Duty to bargain collectively in the
Demand to bargain under Art. 261(a) [Kiok Loy
absence of collective bargaining agreements.
v. NLRC, G.R. No. L-54334 (1986) ]
— In the absence of an agreement or other
voluntary arrangement providing for a more
expeditious manner of collective bargaining, it
[Citing Art. 267], only the labor organization
shall be the duty of the employer and the
designated or selected by the majority of the
representatives of the employees to bargain
employees in an appropriate collective
collectively in accordance with the provisions
bargaining unit is the exclusive representative
of this Code.
of the employees in such unit for the purpose
of collective bargaining. The union is
admittedly not the exclusive representative of
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UP LAW BOC LABOR RELATIONS
III. WHEN THERE IS A CBA
General Rule
The duty to bargain collectively shall also
mean that neither party shall terminate nor
modify such agreement during its lifetime.
[Art. 264]
● Substitutionary doctrine - Even during
the effectivity of a collective bargaining
agreement executed between employer and
employees [through] their agent, the
employees can change said agent but the
contract continues to bind then up to its
expiration date. They may bargain however for
the shortening of said expiration date.[Elisco-
Elirol Labor Union v Noriel, G.R. No. L-41955
(1977)].
Exception
At least sixty (60) days prior to the expiration
of the collective bargaining agreement, either
party can serve a written notice to terminate or
modify the agreement [Art. 264].
‘Note: During this 60-day period, a verified
petition questioning the majority status of the
incumbent bargaining agent may also be filed
[Art. 268].
Effect on existing CBA
It shall be the duty of both parties to keep the
status quo and to continue in full force and
effect the terms and conditions of the existing
agreement during the 60-day period and/or
until a new agreement is reached by the
parties. [Art. 264]
B.3 BARGAINING PROCEDURE [ART. 262]
General Rule: Private Procedure - The
bargaining procedure shall be governed by
[the parties’] agreement or other voluntary
arrangement providing for a more expeditious
manner of collective bargaining [Art. 262]
● Rationale - It is the policy of the state to
promote and emphasize the primacy of free
collective bargaining and negotiations [Art.
PAGE 187 OF 235
LABOR LAW
218-A(a)]
Exception
Labor Code Procedure – In absence of a
private agreement, the collective bargaining
procedure under Art. 261 shall be followed.
i. Written notice and statement of
proposals. When a party desires to negotiate
an agreement, it shall serve a written notice
upon the other party with a statement of its
proposals.
ii. Reply. The other party shall make a
reply thereto not later than ten (10) calendar
days from receipt of such notice.
iii. Conference. Should differences arise on
the basis of such notice and reply, either party
may request for a conference which shall
begin not later than ten (10) calendar days
from the date of request.
iv. Board intervention and conciliation. If
the dispute is not settled, the [NCMB] shall
intervene upon request of either or both
parties or at its own initiative and immediately
call the parties to conciliation meetings. The
[NCMB] shall have the power to issue
subpoenas requiring the attendance of the
parties to such meetings. It shall be the duty
of the parties to participate fully and promptly
in the conciliation meetings the Board may
call;
v. Voluntary arbitration. The [NCMB] shall
exert all efforts to settle disputes amicably
and encourage the parties to submit their case
to a voluntary arbitrator.
vi. Prohibition against disruptive acts.
During the conciliation proceedings in the
Board, the parties are prohibited from doing
any act which may disrupt or impede the early
settlement of the disputes. [Book V, Rule XII,
§1]
vii. Deadlock. When the parties have
reached an impasse in negotiations, either or
both of them may declare a “deadlock” which
is a ground to file a petition for preventive
mediation or a notice of strike or notice of
lockout with the NCMB.
Period to Reply; Bad Faith
[The period to reply] is merely procedural, and
non-compliance cannot be automatically
UP LAW BOC
deemed to be an act of unfair labor practice.
[National Union of Restaurant Workers vs. CIR,
G.R. No. L-20044 (1964)]
Failure to Reply as Indicia of Bad Faith
[The employer’s] refusal to make a counter-
proposal [...] is an indication of its bad faith.
Where the employer did not even bother to
submit an answer to the bargaining proposals
of the union, there is a clear evasion of the duty
to bargain collectively, [...] making it liable for
unfair labor practice. [General Milling Corp. v.
CA, G.R. No. 146728 (2004)]
Bargainable Issues
(1) Mandatory Bargainable Issues
a. Wages
b. Hours of work
c. All other terms and conditions of
employment including proposals for adjusting
any grievances or questions arising under such
agreement [Art. 263]
Examples:
i. Vacations and holidays
ii. Bonuses
iii. Seniority, Transfer, and Layoffs
iv. Employee workloads
v. Work rules and regulations
vi. Union security arrangements
vii. Pension and insurance benefits for
active employees
(2) Permissive Issues:
a. Unilateral benefits extended by the
employer [cf., Union of Filipino Employees v.
Nestle, G.R. Nos. 158930-31 (2008)]
A collective bargaining agreement refers to
the negotiated contract between a legitimate
labor organization and the employer
concerning wages, hours of work and all other
terms and conditions of employment in a
bargaining unit […]. As in all other contracts,
the parties in a CBA may establish such
stipulations, clauses, terms and conditions as
they may deem convenient provided they are
not contrary to law, morals, good customs,
public order or public policy. [Manila Fashions
LABOR RELATIONS LABOR LAW
v. NLRC, G.R. No. 117878 (1996)]
Test for Mandatory Bargainable Issues
The NEXUS Between the Nature of
Employment and the Nature of the Demand:
For “other terms and conditions of
employment” to become a mandatory
bargainable issue, they must have a
connection between the proposal and the
nature of the work.
In order for a matter to be subject to
mandatory collective bargaining, it must
materially or significantly affect the terms and
conditions of employment. Whether the
agreement concerns a mandatory subject of
bargaining depends not on its form, but on its
practical effect. [Azucena]
Importance of Determining the character of
the Bargaining Issue
The question as to what are mandatory and
what are merely permissive subjects of
collective bargaining is of significance on the
right of a party to insist on his position to the
point of stalemate. A party may refuse to
enter into a collective bargaining contract
unless it includes a desired provision as to a
matter which is a mandatory subject of
collective bargaining[. But] a refusal to
contract unless the agreement covers a matter
which is not a mandatory subject is in
substance a refusal to bargain about matters
which are mandatory subjects of collective
bargaining; and it is no answer to the charge
of refusal to bargain in good faith that the
insistence on the disputed clause was not the
sole cause of the failure to agree or that
agreement was not reached with respect to
other disputed clauses.
Such refusal will not be deemed as an unfair
labor practice. However, if a party refuses to
contract based on an issue which is not a
mandatory bargainable issue, the party will be
guilty of ULP. [Samahang Manggagawa sa
Top Form v. NLRC, G.R. No. 113856 (1998)]
Minutes of Negotiation
Where a proposal raised by a contracting party
does not find print in the CBA, it is not a part
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thereof and the proponent has no claim
whatsoever to its implementation. [...] The
Minutes [only] reflects the proceedings and
discussions undertaken in the process of
bargaining for worker benefits in the same
way that the minutes of court proceedings
show what transpired therein. At the
negotiations, it is but natural for both
management and labor to adopt positions or
make demands and offer proposals and
counter-proposals. However, nothing is
considered final until the parties have reached
an agreement. [Samahang Manggagawa sa
Top Form v. NLRC, G.R. No. 113856 (1998)]]
Suspension of Bargaining Negotiations
In order to allow the employer to validly
suspend the bargaining process there must be
a valid petition for certification election raising
a legitimate representation issue. Hence,
the[Colegio de San Juan de Letran v.
Association of Employees, 2000]
Bargaining Deadlock
A “deadlock” is defined as the “counteraction
of things producing entire stoppage: a state of
inaction or of neutralization caused by the
opposition of persons or of factions: a
standstill. There is a deadlock when there is a
“complete blocking or stoppage resulting
from the action of equal and opposed forces.”
The word is synonymous with the word
impasse which, within the meaning of the
American federal labor laws, “presupposes
reasonable effort at good faith bargaining
which, despite noble intentions, does not
conclude in agreement between the parties.”
[Divine World Tacloban v Secretary of Labor,
G.R. No. 91915 (1992)]
Collective Bargaining Deadlock is defined as
the situation between the labor and the
management of the company where there is
failure in the collective bargaining
negotiations resulting in a stalemate. [San
Miguel Corp. v NLRC, 1999].
Privileged Communication in Conciliation
Proceedings
Information and statements made at
conciliation proceedings shall be treated as
LABOR RELATIONS LABOR LAW
privileged communication and shall not be
used as evidence in the Commission.
Conciliators and similar officials shall not
testify in any court or body regarding any
matters taken up at conciliation proceedings
conducted by them. [Art. 233]
Rationale
i. a person is entitled to ‘buy his or her
peace’ without danger of being prejudiced in
case his or her efforts fail
ii. offers for compromise are irrelevant
because they are not intended as admissions
by the parties making them [Pentagon Steel v.
CA, 2009]
D.2.B. COLLECTIVE BARGAINING
AGREEMENT (CBA)
GENERAL CONCEPTS
Definition
Collective Bargaining Agreement or “CBA”
refers to the negotiated contract between a
legitimate labor organization and the
employer concerning wages, hours of work
and all other terms and conditions of
employment in a bargaining unit. [§1(k), Rule
I, Book V]
Nature of the CBA
It is a familiar and fundamental doctrine in
labor law that theCBA is the law between the
parties and they are obliged to comply with its
provisions. [Zuellig Pharma Corporation vs.
Alice Sibal, G.R. No. 173587 (2013)]
Although it is a rule that a contract freely
entered between the parties should be
respected, since a contract is the law between
the parties, said rule is not absolute. [... Citing
Art. 1700,] the relations between capital and
labor are not merely contractual. They are so
impressed with public interest that labor
contracts must yield to the common good.
[Halagueña v. Philippine Airlines, G.R. No.
172013 (2009)]
Beneficiaries of the CBA
Art. 267 Exclusive bargaining representation
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and workers' participation in policy and
decision-making, [1st par.] — The labor
organization designated or selected by the
majority of the employees in an appropriate
collective bargaining unit shall be the
exclusive representative of the employees in
such unit for the purpose of collective
bargaining.
. When a collective bargaining contract is
entered into by the union representing the
employees and the employer, even the non-
member employees are entitled to the
benefits of the contract. To accord its benefits
only to members of the union without any
valid reason would constitute undue
discrimination against non-members. [New
Pacific Timber and Supply v. NLRC, G.R. No.
124224 (2000)]
Contract Interpretation
Art. 1702, Civil Code. In case of doubt, all labor
legislation and all labor contracts shall be
construed in favor of the safety and decent
living for the laborer.
A CBA, as a labor contract within the
contemplation of Article 1700 of the Civil Code
of the Philippines which governs the relations
between labor and capital, [it] is not merely
contractual in nature but impressed with
public interest, thus, it must yield to the
common good. As such, it must be construed
liberally rather than narrowly and technically,
and the courts must place a practical and
realistic construction upon it, giving due
consideration to the context in which it is
negotiated and purpose which it is intended to
serve. [Davao Integrated Port Stevedoring
Services vs. Abarquez, G.R. No. 102132 (1993)]
General Rule: [W]here the CBA is clear and
unambiguous, it becomes the law between
the parties and compliance therewith is
mandated by the express policy of the law.
[Zuellig Pharma Corporation v Alice Sibal, G.R.
No.173587 (2013)]
Exception: If the words appear to be contrary
to the evident intention of the parties, the
latter shall prevail over the former. [Kimberly
Clark Phils. v. Lorredo, G.R. No. 103090
(1993)]
LABOR RELATIONS LABOR LAW
D.2.b.1.MANDATORY PROVISIONS OF CBA
(1) Grievance Procedure[Art. 273]
The parties to a Collective Bargaining
Agreement shall:
1) Include provisions that will ensure the
mutual observance of its terms and conditions.
2) Establish a machinery for the
adjustment and resolution of grievances
arising from:
a) The interpretation or implementation of
their CBA; and
b) those arising from the interpretation or
enforcement of company personnel policies.
All grievances submitted to the grievance
machinery which are not settled within 7
calendar days from the date of its submission
shall be automatically referred to voluntary
arbitration prescribed in the CBA. [Art. 273]
[A] grievance procedure is part of the
continuous process of collective bargaining. It
is intended to promote a friendly dialogue
between labor and management as a means
of maintaining industrial peace. [Master Iron
Labor Union v. NLRC, G.R. No. 92009 (1993)]
No particular setup for a grievance machinery
is required by law. [Art. 273] [...] provides for
only a single grievance machinery in the
company to settle problems arising from
interpretation or implementation of their
collective bargaining agreement and those
arising from the interpretation or enforcement
of company personnel policies. [Caltex
Refinery Employees Association v. Brillantes,
G.R. No. 123782 (1997)]
(2) Voluntary Arbitration
Constitutional Basis
§3, Art. XIII, 1987 Constitution - The State shall
promote the principle of shared responsibility
between workers and employers and the
preferential use of voluntary modes in settling
disputes, including conciliation, and shall
enforce their mutual compliance therewith to
foster industrial peace. [
Who is a voluntary arbitrator
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A “voluntary arbitrator” is any person
accredited by the [National Conciliation and
Mediation Board] as such, or any person
named or designated in the Collective
Bargaining Agreement by the parties to act as
their Voluntary Arbitrator, or one chosen, with
or without the assistance of the National
Conciliation and Mediation Board, pursuant to
a selection procedure agreed upon in the
Collective Bargaining Agreement, or any
official that may be authorized by the
Secretary of Labor and Employment to act as
Voluntary Arbitrator upon the written request
and agreement of the parties to a labor
dispute [Art. 219n)]
Automatic Referral If Grievance Machinery
Fails
All grievances submitted to the grievance
machinery which are not settled within 7
calendar days from the date of its submission
shall automatically be referred to voluntary
arbitration prescribed in the CBA. [Art. 273]
Provision for Voluntary Arbitration in the CBA
(1) Parties to a CBA shall:
a. Name and designate in advance a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, OR
b. Include in the agreement a procedure
for the selection of such Voluntary Arbitrator
or panel of Voluntary Arbitrators, preferably
from the listing of qualified Voluntary
Arbitrators duly accredited by the Board.
(2) In case the parties fail to select a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, the Board shall designate the
Voluntary Arbitrator or panel of Voluntary
Arbitrators, as may be necessary, pursuant to
the selection procedure agreed upon in the
[CBA], which shall act with the same force and
effect as if the has been selected by the parties
as described above. [Art. 273]
Voluntary Arbitration as a Condition
Precedent
The stipulation to refer all future disputes to
an arbitrator or to submit an ongoing dispute
to one is valid. Being part of a contract
between the parties, it is binding and
enforceable in court in case one of them
neglects, fails or refuses to arbitrate. Going a
step further, in the event that they declare
LABOR RELATIONS LABOR LAW
their intention to refer their differences to
arbitration first before taking court action, this
constitutes a condition precedent, such that
where a suit has been instituted prematurely,
the court shall suspend the same and the
parties shall be directed forthwith to proceed
to arbitration. [...] A court action may likewise
be proper where the arbitrator has not been
selected by the parties. [Chung Fu Industries v.
CA, G.R. No. 96283 (1992)]
Arbitrable Issues
1. interpretation or implementation of the
CBA [Art. 274]
2. interpretation or enforcement of
company personnel policies [Art. 274]
3. violations of a CBAwhich are not gross in
character (gross being flagrant and/or
malicious refusal to comply with the economic
provisions of [the CBA]) [Art. 274]
4. all other labor disputes including ULP
and bargaining deadlock, if the parties agree
[Art. 275]
5. Wage distortions arising from
application of any wage orders in organized
establishments [Art. 124]
6. Unresolved grievances arising from the
interpretation and implementation of the
productivity incentives program under RA
6971 [Book V, Rule XIX, §4]
In general, the arbitrator [“VA”] is expected to
decide those questions expressly stated and
limited in the submission agreement.
However, since arbitration is the final resort for
the adjudication of disputes, the arbitrator can
assume that he has the power to make a final
settlement. [...] [The VA has] plenary
jurisdiction and authority to interpret the
[CBA] and to determine the scope of his [or
her] own authority. [...] Subject to judicial
review, this leeway of authority [and]
adequate prerogative is aimed at
accomplishing the rationale of the law on
voluntary arbitration – speedy labor justice.
[Goya, Inc. vs. Goya, Inc. Employees Union-
FFW, G.R. No. 170054 (2013)]
Procedure of Voluntary Arbitration
(1) All parties to the dispute shall be
entitled to attend the arbitration proceedings.
(2) Hearing may be adjourned for cause or
PAGE 191 OF 235
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upon agreement by the parties.
(3) Unless the parties agree otherwise, it
shall be mandatory for voluntary arbitrator or
panel of voluntary arbitrators to render an
award or decision within twenty (20) calendar
days from the date of submission for
resolution [Art. 276]
Powers of voluntary arbitrators during
arbitration proceeding
(1) hold hearings
(2) receive evidence
(3) take whatever action is necessary to
resolve the issue or issues subject of dispute,
including efforts to effect a voluntary
settlement between parties
(4) determine attendance of any third
parties
(5) determine exclusion of any witness
(6) issue writ of execution for sheriff of
NLRC or regular courts to execute the final
decision, order, or award [Art. 276]
Finality of the final decision, Order, or Award -
after ten (10) calendar days from receipt of the
copy of the award or decision by the parties
[Art. 276]
Motion for Reconsideration
The absence of a categorical language in Art.
[276] does not preclude the filing of a motion
for reconsideration of the VA’s decision within
the 10-day period. [Teng v Pahagac, G.R.
169704 (2010)]
Clearly, before a petition for certiorari under
Rule 65 of the Rules of Court may be availed
of, the filing of a motion for reconsideration is
a condition sine qua non to afford an
opportunity for the correction of the error or
mistake complained of. So also, considering
that a decision of the Secretary of Labor is
subject to judicial review only through a
special civil action of certiorari and, as a rule,
cannot be resorted to without the aggrieved
party having exhausted administrative
remedies through a motion for
reconsideration, the aggrieved party, must be
allowed to move for a reconsideration of the
same so that he can bring a special civil action
for certiorari before the Supreme Court.
PAGE 192 OF 235
LABOR LAW
[PIDLTRANCO Service Enterprises Inc v PWU
– AGLO, GR No. 180962 (2014)]
The rule, therefore, is that a Voluntary
Arbitrator’s award or decision shall be
appealed before the Court of Appeals within
10 days from receipt of the award or decision.
Should the aggrieved party choose to file a
motion for reconsideration with the Voluntary
Arbitrator, the motion must be filed within the
same 10-day period since a motion for
reconsideration is filed "within the period for
taking an appeal." [PHILEC v Court of Appeals,
GR No. 168612 (2014)]
Appeal
While there is an express mode of appeal from
the decision of a labor arbiter, Republic Act No.
6715 is silent with respect to an appeal from
the decision of a voluntary arbitrator. [...]
Assuming arguendo that the voluntary
arbitrator or the panel of voluntary arbitrators
may not strictly be considered as a quasi-
judicial agency, board or commission, still
both he and the panel are comprehended
within the concept of a "quasi-judicial
instrumentality." A fortiori, the decision or
award of the voluntary arbitrator or panel of
arbitrators should likewise be appealable to
the Court of Appeals. [Luzon Development
Bank v. Assoc. of Luzon Dev’t Employees, G.R.
No. 120319 (1995)]
The decisions of the voluntary arbitrator are
akin to those of the Regional Trial Court, and,
therefore, should first be appealed to the
Court of Appeals before being elevated to [the
Supreme Court]. [Centro Escolar University
Faculty and Allied Workers Union v. Court of
Appeals, G.R. No. 165486 (2006])
Costs
The parties to a Collective Bargaining
Agreement shall provide therein a
proportionate sharing scheme on the cost of
the voluntary arbitration including the
Voluntary Arbitrator’s fee. […] [Art. 277]
Voluntary Arbitrator's Fee
[…] The fixing of the fee of the Voluntary
Arbitrators or panel of Voluntary Arbitrators,
whether shouldered wholly by the parties or
subsidized by the special voluntary arbitration
fund, shall take into account the following
factors:
UP LAW BOC LABOR RELATIONS
(1) nature of the case;
(2) time consumed in hearing the case;
(3) professional standing of the voluntary
arbitrator;
(4) capacity to pay of the parties;
(5) fees provided for in the [...] Rules of
Court[Art. 277]
(3) No Strike-No Lockout Clause
A "no strike, no lock-out" provision in the
[CBA] is a valid stipulation although the
clause may be invoked by an employer only
when the strike is economic in nature or one
which is conducted to force wage or other
concessions from the employer that are not
mandated to be granted by the law itself. It
would be inapplicable to prevent a strike
which is grounded on unfair labor practice.
[Panay Electric Co. v. NLRC, G.R. No. 102672
(1995); Malayang Samahan ng mga
Manggagawa sa Greenfield v. Ramos, G.R. No.
113907 (2000)]
(4) Labor Management Council
Any provision of law to the contrary
notwithstanding, workers shall have the right,
subject to such rules and regulations as the
Secretary of Labor and Employment may
promulgate, to participate in policy and
decision-making processes of the
establishment where they are employed
insofar as said processes will directly affect
their rights, benefits and welfare. For this
purpose, workers and employers may form
labor-management councils. […] [Art. 267]
Selection of Representatives
In organized establishments, the workers’
representatives to the council shall be
nominated by the exclusive bargaining
representative. In establishments where no
legitimate labor organization exists, the
workers representative shall be elected
directly by the employees at large. [§2, Rule
XXI, Book V]
III. ADMINISTRATION AND ENFORCEMENT
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OF CBA
Substandard CBA
A CBA that falls below the minimum
standards required by law is prohibited.
Nonetheless, RA 9481 removed substandard
CBAs as a ground for the cancellation of
registration of union registration.
Note: A substandard CBA cannot bar a
petition for certification election under the
contract-bar rule. [Prof. Battad]
Ratification
Within thirty (30) days from the execution of a
collective bargaining agreement, the parties
shall submit copies of the same directly to the
Bureau or the Regional Offices of the
Department of Labor and Employment for
registration accompanied with verified proofs
of its posting in two conspicuous places in the
place of work and ratification by the majority
of all the workers in the bargaining unit. [Art.
237; Book V, Rule XVII, §2 (c)]
[T]he posting of copies of the collective
bargaining agreement is the responsibility of
the employer. The fact that there were "no
impartial members of the unit" is immaterial.
The purpose of the requirement is precisely to
inform the employees in the bargaining unit of
the contents of said agreement so that they
could intelligently decide whether to accept
the same or not. [Associated Labor Unions v
Ferrer-Calleja, G.R. No. L-77282 (1989)]
Effect of Non-ratification
General Rule: The collective bargaining
agreement should be ratified by the majority
of all the members of the bargaining unit.
Non-compliance with this requirement
renders the CBA ineffective. [Associated Trade
Unions v. Trajano, 1988]
Exception: Even if there was no ratification,
the CBA will not be invalid or void considering
that the employees have enjoyed benefits
from it.
● [The employees] cannot receive benefits
under provisions favorable to them and later
insist that the CBA is void simply because
other provisions turn out not to the liking of
UP LAW BOC
certain employees. [Planters Products Inc. v.
National Labor Relations Commission, G.R.
No. 78524 (1989)]
Note: Ratification of the CBA by the
employees in the bargaining unit is not
needed when the CBA is a product of an
arbitral award as a result of voluntary
arbitration under Art. 275 or from the
secretary’s assumption of jurisdiction or
certification under Art. 278 (g).
To require ratification of the CBA in case of
arbitral awards will be inconsistent with the
nature of arbitration, which entails submission
to the judgment of an impartial third person.
The settlement device would be circuitous and
the very nature of arbitration would be
contradicted if the arbitrator’s decision, would
be dependent on the employees’ acceptance.
Registration
Within thirty (30) days from the execution of a
Collective Bargaining Agreement, the parties
shall submit copies of the same directly to the
Bureau or the Regional Offices of the
Department of Labor and Employment for
registration […]. [Art. 237]
Requirements for Registration
The application for CBA registration shall be
accompanied by the original and two (2)
duplicate copies of the following documents
which must be certified under oath by the
representative(s) of the employer(s) and labor
union(s) concerned:
(1) The collective bargaining agreement
(2) A statement that the collective
bargaining agreement was posted in at least
two (2) conspicuous places in the
establishment or establishments concerned
for at least five (5) days before its ratification
(3) A statement that the collective
bargaining agreement was ratified by the
majority of the employees in the bargaining
unit of the employer or employees concerned.
[§2, Rule XVII, Book V]
Specific information submitted in confidence
General rule: Shall not be disclosed
LABOR RELATIONS LABOR LAW
Exceptions:
(1) authorized by Secretary of Labor
(2) when it is at issue in any judicial
litigation
(3) public interest or national security
requires [Art. 237]
Effect of Unregistered CBA
An unregistered CBA is binding upon the
parties but cannot serve as a bar to a petition
for certification election under the contract-
bar rule.
§3, Rule VIII, Book V states: A petition for
certification election may be filed anytime,
except: [...] (d) when a collective bargaining
agreement between the employer and a duly
recognized or certified bargaining agent has
been registered in accordance with Article 231
[renumbered 237] of the Labor Code.
IV. EFFECTIVITY AND DURATION OF
COLLECTIVE BARGAINING AGREEMENT
CBA Effectivity
If it is the first ever CBA, the effectivity date is
whatever date the parties agree on.
If it is renegotiated CBA, the retroactivity of the
date of effectivity depends upon the duration
of conclusion [Art. 265].
(1) If it is concluded within 6 months from
the expiry date, the new CBA will
retroact to the date following the
expiry date [Illustration: expiry date:
December 13; renegotiations
concluded on November 30: effectivity
date: December 14].
(2) If it is concluded beyond 6 months
from the expiry date, the matter of
retroaction and effectivity is left with
the parties.
Hold Over Principle
Art. 264. Duty to bargain collectively when
there exists a collective bargaining agreement.
— [...I]It shall be the duty of both parties to
keep the status quo and to continue in full
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force and effect the terms and conditions of
the existing agreement during the 60-day
period and/or until a new agreement is
reached by the parties.
The last sentence of Article 264, which
provides for automatic renewal [upon expiry],
pertains only to the economic provisions of the
CBA and does not include representational
aspect of the CBA. A [CBA which continues to
take effect beyond its expiration date] cannot
constitute a bar to a filing of petition for
certification election. When there is a
representational issue, the status quo
provision insofar as the need to await the
creation of a new agreement will not apply.
Otherwise, it will create an absurd situation
where the union members will be forced to
maintain membership by virtue of the union
security clause existing under the CBA and,
thereafter, support another union when filing
a petition for certification election. If we apply
it, there will always be an issue of disloyalty
whenever the employees exercise their right to
self-organization. The holding of a
certification election is a statutory policy that
should not be circumvented, or compromised.
[PICOP Resources, Inc. v. Taneca et al., G.R. No.
160828 (2010)]
Arbitrated CBA
In the absence of an agreement between the
parties, an arbitrated CBA takes on the nature
of any judicial or quasi-judicial award. [Manila
Electric Company vs. Quisumbing, 1999]
[I]n the absence of the specific provision of law
prohibiting retroactivity of the effectivity of the
arbitral awards issued by the Secretary of
Labor pursuant to Article 263(g) of the Labor
Code, [the Secretary] is deemed vested with
plenary powers to determine the effectivity
thereof.
[T]o deprive respondent Secretary of such
power and discretion would run counter to the
well-established rule that all doubts in the
interpretation of labor laws should be resolved
in favor of labor. In upholding the assailed
orders of respondent Secretary, this Court is
only giving meaning to this rule. Indeed, the
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LABOR LAW
Court should help labor authorities in
providing workers immediate benefits,
without being hampered by arbitration or
litigation processes that prove to be not only
nerve-wracking but financially burdensome in
the long run. [LMG Chemicals v. Secretary of
Labor, G.R. No. 127422 (2001)]
CBA Duration
Any Collective Bargaining Agreement that the
parties may enter into shall, insofar as the
representation aspect is concerned, be for a
term of five (5) years. [...] All other provisions
of the Collective Bargaining Agreement shall
be renegotiated not later than three (3) years
after its execution. [...] [Art. 265]
CBA Duration for economic provisions
3 years.
CBA Duration for non-economic provisions
5 years for representational or political issues;
cannot be renegotiated to extend beyond 5
years. [FVC Labor Union-PTGWO v. SANAMA-
FVC-SIGLO, G.R. No. 176249 (2009)]
CBA Duration: Freedom Period
No petition questioning the majority status of
the incumbent bargaining agent shall be
entertained and no certification election shall
be conducted by the DOLE outside of the sixty-
day period immediately before the date of the
expiry of such five year term of the Collective
Bargaining Agreement. [Art. 265]
CBA and 3rd Party Applicability
Labor contracts such as employment
contracts and CBAs are not enforceable
against a transferee of an enterprise, labor
contracts being in personam, is binding only
between the parties. As a general rule, there is
no law requiring a bona fide purchaser of the
assets of an on-going concern to absorb in its
employ the employees of the latter. However,
although the purchaser of the assets or
enterprise is not legally bound to absorb in its
UP LAW BOC LABOR RELATIONS
employ the employees of the seller of such
assets or enterprise, the parties are liable to
the employees if the transaction between the
parties is colored or clothed with bad faith.
[Sundowner Development Corporation v. Drilon,
G.R. No. 82341 (1989)]
Where the change of ownership is in bad faith
or is used to defeat the rights of labor, the
successor-employer is deemed to have
absorbed the employees and is held liable for
the transgressions of his or her predecessor
[Philippine Airlines, Inc. v. NLRC, G.R. No.
125792, (1998)]
General Rule: An innocent transferee of a
business establishment has no liability to the
employees of the transferor to continue
employing them. Nor is the transferee liable
for past unfair labor practices of the previous
owner.
Exception: When the liability therefore is
assumed by the new employer under the
contract of sale, or when liability arises
because of the new owner's participation in
thwarting or defeating the rights of the
employees. The most that the transferee may
do, for reasons of public policy and social
justice, is to give preference to the qualified
separated employees in the filling of vacancies
in the facilities of the purchaser. [Manlimos v.
NLRC, G.R. No. 113337 (1995)]
C.2. UNION SECURITY
C.2.A. UNION SECURITY CLAUSES
Definition
Union security is a generic term which is
applied to and comprehends “closed shop,”
“union shop,” “maintenance of membership”
or any other form of agreement which imposes
upon employees the obligation to acquire or
retain union membership as a condition
affecting employment. [NUWHRAIN v. NLRC,
G.R. No. 179402 (2008)]
[Union security clause] is an indirect
restriction on the right of an employee to self-
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organization. It is a solemn pronouncement of
a policy that while an employee is given the
right to join a labor organization, such right
should only be asserted in a manner that will
not spell the destruction of the same
organization. [Tanduay Distillery Labor Union v.
NLRC, G.R. No. 75037 (1987)]
[Employees], although entitled to
disaffiliation from their union to form a new
organization of their own, must, however,
suffer the consequences of their separation
from the union under the security clause of the
CBA. [Villar v. Inciong, G.R. No. L-50283-84
(1983)].
Statutory Basis and Rationale
Art. 259(e) - Nothing in this Code or in any
other law shall stop the parties from requiring
membership in a recognized collective
bargaining agent as a condition for
employment, except those employees who are
already members of another union at the time
of the signing of the collective bargaining
agreement.
The law has allowed stipulations for 'union
shop' and 'closed shop' as means of
encouraging workers to join and support the
union of their choice in the protection of their
rights and interests vis-a-vis the employer.
[Del Monte Philippines v. Salvidar, G.R. No.
158620 (2006)]
Purpose
To safeguard and ensure the existence of the
union and thus, promote unionism in general
as a state policy.
It is the policy of the State to promote
unionism to enable the workers to negotiate
with the management on the same level and
with more persuasiveness than if they were to
individually and independently bargain for the
improvement of their respective conditions.
[…] For this reason, the law has sanctioned
stipulations for the union shop and closed
shop as a means of encouraging the workers
to join and support the labor union of their
own choice vis-à-vis the employer. [Liberty
UP LAW BOC LABOR RELATIONS
Flour Mills Employees v. Liberty Flour Mills, G.R.
No. 58768-70 (1989)]
Coverage [BPI v. BPI Employees Union-Davao
Chapter, G.R. No. 164301 (2010)]
General Rule: All employees in the bargaining
unit covered by the union security clause are
subject to its terms
Exception:
(1) Employees who are already members
of another union at the time of the
signing of the collective bargaining
agreement may not be compelled by
any union security clause to join any
union. [Art. 254 (e)]
(2) Employees already in service at the
time the closed shop union security
clause took effect
● A closed shop provision in a CBA
is not to be given a retroactive
effect as to preclude its being
applied to employees already in
service. [Guijarno v. CIR, G.R. No.
L-28791-93 (1973)]
(3) Any employee who at the time the
union security clause took effect is a
bona fide member of religious
organization which prohibits its
members from joining labor unions on
religious grounds
(4) Confidential employees who are
excluded from the rank-and-file
bargaining unit
(5) Employees excluded from the union
security provisions by express terms of
the agreement
C.2.B. TYPES OF UNION SECURITY CLAUSE
1) Closed shop
Condition for employment
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LABOR LAW
An agreement where only union members
may be employed and, for the duration of the
agreement, remains a member in good
standing of a union.
A closed shop may be defined as an enterprise
in which, by agreement between the employer
and his employees or their representatives, no
person may be employed in any or certain
agreed departments of the enterprise unless
he or she is, becomes, and, for the duration of
the agreement, remains a member in good
standing of a union entirely comprised of or of
which the employees in interest are a part.
[General Milling Corporation (GMC) v. Casio,
G.R. No. 149552 (2010)]
The closed shop provision is the most prized
achievement of unionism. However it can also
be a potent weapon wielded by the union
against the workers whom the union is
supposed to protect in the first place. Hence,
any doubt as to the existence of a closed shop
provision in the CBA will be resolved in favor of
the nonexistence of the closed shop provision.
[Azucena]
2) Maintenance of membership shop
Condition for continued employment
An agreement where present and future
employees are not compelled to join the SEBA,
but once so joined, they must maintain their
membership as a condition for continued
employment until they are promoted or
transferred out of the bargaining unit or the
agreement is terminated
There is maintenance of membership shop
when employees, who are union members as
of the effective date of the agreement, or who
thereafter become members, must maintain
union membership as a condition for [their]
continued employment until they are
promoted or transferred out of the bargaining
unit or the agreement is terminated. [General
Milling Corporation (GMC) v. Casio, G.R. No.
149552 (2010)]
3) Union shop
Condition for continued employment
UP LAW BOC LABOR RELATIONS
There is union shop when all new regular
employees are required to join the union
within a certain period as a condition for their
continued employment. [General Milling
Corporation (GMC) v. Casio, G.R. No. 149552
(2010)]
Non-members may be hired, but to retain
employment, they must become union
members after a certain period. The
requirement applies to present and future
employees. [Azucena]
4) Modified union shop
Condition for continued employment of future
employees
Employees who are not union members at the
time of signing the contract need not join the
union, but all workers hired thereafter must
join. [Azucena]
5) Agency shop
Employees belonging to an appropriate
collective bargaining unit who are not
members of the recognized collective
bargaining agent may be assessed a
reasonable fee equivalent to the dues and
other fees paid by members of the recognized
collective bargaining agent, if such non-union
members accept the benefits under the
collective agreement: Provided, That the
individual authorization required under Article
[250], paragraph (o) of [the Labor] Code shall
not apply to non-members of the recognized
collective bargaining agent [Art. 259(e)]
C.2.C. ENFORCEMENT OF UNION SECURITY
CLAUSE
Termination due to Union Security Provision
Termination of employment by virtue of a
union security clause embodied in a CBA is
recognized and accepted in our jurisdiction.
This practice strengthens the union and
prevents disunity in the bargaining unit within
the duration of the CBA. By preventing
member disaffiliation with the threat of
expulsion from the union and the consequent
termination of employment, the authorized
bargaining representative gains more
numbers and strengthens its position as
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LABOR LAW
against other unions which may want to claim
majority representation. [Alabang Country
Club v. NLRC, G.R. No. 170287 (2008)]
Requisites for the enforcement of Union
Security Clauses
In terminating the employment of an
employee by enforcing the union security
clause, the employer needs only to determine
and prove that:
1) The union security clause is applicable
2) The union is requesting for the
enforcement of the union security
provision in the CBA
3) There is sufficient evidence to support
the union’s decision to expel the
employee from the union. [Alabang
Country Club v. NLRC, G.R. No. 170287
(2008)]
Company must conduct separate investigation
or hearing
While company may validly dismiss the
employees expelled under the union security
clause upon the recommendation by the union,
this dismissal should not be done hastily and
summarily thereby eroding the employees'
right to due process, self-organization and
security of tenure. The enforcement of union
security clauses is authorized by law provided
such enforcement is not characterized by
arbitrariness, and always with due
process. Even if there are valid grounds to
expel the union officers, due process requires
that these union officers be accorded a
separate hearing by respondent company.
[Malayang Samahan ng Manggagawa sa M.
Greenfield v. Ramos, G.R. No. 113907 (2000)]
Requirement of Due Process
The requirements laid down by the law in
determining whether or not an employee was
validly terminated must still be followed even
if it is based on a [union security clause] of a
CBA, i.e. the substantive as well as the
procedural due process requirements. [Del
Monte v. Saldivar, G.R. No. 158620 (2006)]
UP LAW BOC LABOR RELATIONS
Obligations and Liabilities
Where the employer dismissed his employees
in the belief in good faith that such dismissal
was required by the [union security provision]
of the collective bargaining agreement with
the union, he may not be ordered to pay back
compensations to such employees although
their dismissal is found to be illegal.
[Confederated Sons of Labor v. Anakan Lumber
Co., G.R. No. L-12503 (1960)]
As dictated by fairness, […] the union shall be
liable to pay their backwages. This is because
management would not have taken the action
it did had it not been for the insistence of the
labor union seeking to give effect to its
interpretation of a closed shop provision.
[Guijarno v. CIR, G.R. No. L-28791-93 (1973)]
C.2.D. CHECK-OFF, UNION DUES, AGENCY
FEES
Check-off
A check-off is a process or device whereby the
employer, on agreement with the Union,
recognized as the proper bargaining
representative, or on prior authorization from
the employees, deducts union dues or agency
fees from the latter’s wages and remits them
directly to the Union. [Marino v. Gamilla, G.R.
No. 149763 (2009)]
The system of check-off is primarily for the
benefit of the Union, and only indirectly, for
the benefit of the individual employees.
[Marino v. v Gamilla, G.R. No. 149763 (2009)]
Note: For a check-off to be valid, it must
comply with the requirements of a valid
special assessment. Refer to page X [update X
before finalizing reviewer].
Jurisdiction over Check-off Disputes
The Bureau of Labor Relations has jurisdiction
to hear, decide and to mete out punishment
any violation under Article 250 upon report of
at least 30% of the union membership OR
members specially concerned to the Bureau.
Note: Secretary of Labor or his duly authorized
representative may inquire into financial
activities of legitimate labor orgs – UPON filing
of complaint under oath and supported by
written consent of at least 20% of total
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LABOR LAW
membership, Provided, such inquiry shall not
be conducted during (60)-day freedom period
nor within the thirty (30) days immediately
preceding the date of election of union
officials. [Art. 289]
C.2.E. UNFAIR LABOR PRACTICE IN
COLLECTIVE BARGAINING
Both employers and labor organizations can
commit acts of unfair labor practices in
collective bargaining. However, the labor
organization must be the representative of the
employees before any act it does may be
considered as a violation of the duty to bargain
collectively. [Art. 259 (g) and Art. 260 (c)]
Four forms of Unfair Labor Practice in
Bargaining
(1) Failure or Refusal to meet and convene
(2) Evading the mandatory subjects of
bargaining
(3) Bargaining in bad faith
(4) Gross violation of the CBA
C.2.F.. FAILURE OR REFUSAL TO BARGAIN
Statutory Basis:Employers
(1) To violate the duty to bargain
collectively as prescribed by this code. [Art.
259 (g)]
(2) [I]t shall be the duty of employer and
the representatives of the employees to
bargain collectively in accordance with the
provisions of this Code. [Art. 262]
Statutory Basis:Labor Organizations
(1) To violate the duty, or refuse to bargain
collectively with the employer, provided it
is the representatives of the employees;
[Art. 2606 (c)]
(2) [I]t shall be the duty of employer and the
representatives of the employees to
bargain collectively in accordance with the
provisions of this Code. [Art. 262]
Acts deemed as refusal to bargain
UP LAW BOC LABOR RELATIONS
Refusal to bargain when there is an unresolved
petition for union cancellation
“That there is a pending cancellation
proceedings against the union is not a bar to
set in motion the mechanics of collective
bargaining. […] Unless [the union’s] certificate
of registration and status as the certified
bargaining agent is revoked, [the employer],
by express provision of the law, is duty bound
to collectively bargain with the Union.”
[Capitol Medical Center v. Trajano, G.R. No.
155690 (2005)]
Employer’s suspension of operations in order to
forestall a demand for collective bargaining
By admitting that the closure [of the business]
was due to irreconcilable differences between
the Union and the school management, […]
SJCI in effect admitted that it wanted to end
the bargaining deadlock and eliminate the
problem dealing with the demands of the
union. [St. John Colleges Inc. v. St. John
Academy Faculty and Employees Union, G.R.
No. 167892 (2006)]
Implied refusal
The school is guilty of unfair labor practice
when it failed to make a timely reply to the
proposals of the union more than one month
after the same were submitted by the union. In
explaining its failure to reply, the school
merely offered a feeble excuse that its Board
of Trustees had not yet convened to discuss
the matter. Clearly, its actuation showed a lack
of sincere desire to negotiate. [Colegio de San
Juan de Letran v. Association of Employees and
Faculty of Letran, G.R. No. 141471 (2000)]
Acts not deemed refusal to bargain
(1) Adoption of an adamant bargaining
position in good faith, particularly where
the company is operating at a loss
(2) Refusal to bargain over demands for
commission of unfair labor practices
(3) Refusal to bargain during period of illegal
strike
(4) Not initiating the bargaining
(5) Refusal to bargain where the union
demands for recognition and bargaining
within the year following a certification
election, and the clear choice is no union
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LABOR LAW
and no ad interim significant change has
taken place in the unit
(6) Refusal to bargain because the other party
is making unlawful bargaining demands
C.2.G. EVADING THE MANDATORY SUBJECTS
OF BARGAINING
The refusal to negotiate a mandatory subject
of bargaining is an unfair labor practice
although either party has every desire to reach
agreement and earnestly and in all good faith
bargains to that end. […] However, the duty to
bargain does not obligate the parties to make
concessions or yield a position fairly held.
[Azucena]
The duty to bargain is limited to mandatory
bargaining subjects; as to other matters, he is
free to bargain or not to bargain. Over
mandatory subjects, a party may insist on
bargaining, even to the point of deadlock, and
his insistence will not be construed as
bargaining in bad faith.
Over a non-mandatory subject, on the other
hand, a party may not insist on bargaining to
the point of impasse, otherwise his insistence
can be construed as bargaining in bad faith.
C.2.H. BARGAINING IN BAD FAITH
The crucial question whether a party has met
his statutory duty to bargain in good faith
typically turns on the facts of the individual
case. There is no per se test of good faith in
bargaining. Good faith or bad faith is an
inference to be drawn from the facts of the
case. [Hongkong and Shanghai Banking Corp.
Employees Union v. NLRC, G.R. No. 125038
(1997)]
Blue-Sky Bargaining
Blue-Sky Bargaining is defined as "unrealistic
and unreasonable demands in negotiations by
either or both labor and management, where
neither concedes anything and demands the
impossible." It actually is not collective
bargaining at all. [Roberts Dictionary of
Industrial Relations as cited in Standard Bank
Chartered Employees Union v. Confesor, 2004]
UP LAW BOC LABOR RELATIONS
Surface Bargaining
Surface bargaining is defined as "going
through the motions of negotiating," without
any real intent to reach an agreement.
[Roberts Dictionary of Industrial Relations as
cited in Standard Bank Chartered Employees
Union v. Confesor, G.R. No. 114974 (2004)]
It violates the Act's requirement that parties
negotiate in "good faith." It is prohibited
because, as one commentator explained: The
bargaining status of a union can be destroyed
by going through the motions of negotiating
almost as easily as by bluntly withholding
recognition […] As long as there are unions
weak enough to be talked to death, there will
be employers who are tempted to engage in
the forms of collective bargaining without the
substance. [K-MART Corporation v. NLRB,
1980 626 F.2d 704
Individual Bargaining
It is an unfair labor practice for an employer
operating under a CBA to negotiate with his
employees individually. That constitutes
interference because the company is still
under obligation to bargain with the union as
the bargaining representative.
Individual bargaining contemplates a
situation where the employer bargains with
the union through the employees instead of
the employees through the union. [The Insular
Life Assurance Co. Ltd., Employees Assn. v.
Insular Life Assurance Co. Ltd, G.R. No. L-
25291 (1971)]
C.2.I. GROSS VIOLATIONS OF THE CBA
Art. 274, Jurisdiction of Voluntary
Arbitrators. - Accordingly, violations of a
Collective Bargaining Agreement, except
those which are gross in character, shall no
longer be treated as unfair labor practice
and shall be resolved as grievances under
the Collective Bargaining Agreement. For
purposes of this article, gross violations of
Collective Bargaining Agreement shall
mean flagrant and/or malicious refusal to
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LABOR LAW
comply with the economic provisions of such
agreement.
D.UNFAIR LABOR PRACTICE (ULP)
D.1. NATURE, ASPECTS
Unfair labor practice refers to acts that violate
the workers’ right to organize. The prohibited
acts are related to the workers’ right to self-
organization and to the observance of a CBA.
Without that element, the acts, no matter how
unfair, are not unfair labor practices. The only
exception is Art. 259 (f) [i.e. to dismiss,
discharge or otherwise prejudice or
discriminate against an employee for having
given or being about to give testimony under
this Code]. [Philcom Employees Union v. Phil.
Global, G.R. No. 144315 (2006)]
NATURE OF ULP
(1) inimical to the legitimate interests of both
labor and management, including their
right to bargain collectively and otherwise
deal with each other in an atmosphere of
freedom and mutual respect
(2) disrupt industrial peace
(3) hinder the promotion of healthy and
stable labor-management relations
(4) violations of the civil rights of both labor
and management but are also criminal
offenses [Art. 258]
Purpose of the Policy Against ULPs
Protection of right to self-organization and/or
collective bargaining:
(1) The employee is not only protected
from the employer but also from labor
organizations.
(2) The employer is also protected from
ULP committed by a labor
organization.
The public is also protected because it has an
interest in continuing industrial peace.
Employer-Employee Relationship Required
UP LAW BOC LABOR RELATIONS
General Rule - An unfair labor practice may be
committed only within the context of an
employer-employee relationship [American
President Lines v. Clave, G.R. No. L-51641
(1982)]
Exception
“Yellow Dog” condition or contract: to require
as a condition of employment that a person or
an employee shall not join a labor
organization or shall withdraw from one to
which he belongs. [Art 259 (b)]
Parties Not Estopped from Raising ULP by
Eventual Signing of the CBA
The eventual signing of the CBA does not
operate to estop the parties from raising unfair
labor practice charges against each other.
[Standard Chartered Bank Union v. Confesor,
G.R. No. 114974 (2004)]
Statutory Construction
The Labor Code does not undertake the
impossible task of specifying in precise and
unmistakable language each incident which
constitutes an unfair labor practice. Rather, it
leaves to the court the work of applying the
law's general prohibitory language in light of
infinite combinations of events which may be
charged as violative of its terms. [HSBC
Employee Union v. NLRC, G.R. No. 125038
(1997)]
D.2. ULP BY EMPLOYERS
(1) Interference/ Restraint/ Coercion [Art. 250
(a)]
An act which restrains, coerces, or interferes
with employees in the exercise of their right to
self-organization is an Unfair Labor Practice.
Interrogation
General rule: employer may interrogate its
employees regarding their union affiliation for
legitimate purposes and with the assurance
that no reprisals would be taken against the
unionists.
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LABOR LAW
Exception: when interrogation interferes with
or restrains employees' right to self-
organization. [Phil. Steam Navigation Co. v.
Phil. Marine Officer’s Guild, G.R. Nos. L-20667
and 20669 (1965)]
Speech
The acts of a company which subjects a union
to vilification and its participation in soliciting
membership for a competing union are also
acts constituting a ULP. [Phil. Steam
Navigation Co. v. Phil. Marine Officer’s Guild,
G.R. Nos. L-20667 and 20669 (1965)]
An employer may not send letters containing
promises or benefits, nor of threats of
obtaining replacements to individual workers
while the employees are on strike due to a
bargaining deadlock. This is tantamount to
interference and is not protected by the
Constitution as free speech. [Insular Life
Assurance Co. Employees Assn. v. Insular Life
Assurance Co. Ltd, G.R. No. L-25291 (1971)]
Espionage
Espionage and/or surveillance by the
employer of union activities are instances of
interference, restraint or coercion of
employees in connection with their right to
organize, form and join unions as to constitute
unfair labor practice. […] The information
obtained by means of espionage is invaluable
to the employer and can be used in a variety of
cases to break a union. [Insular Life Assurance
Co. Employees Assn. v. Insular Life Assurance
Co. Ltd, G.R. No. L-25291 (1971)]
(2) Yellow Dog Contracts [Art. 259 (b)]
Yellow dog contracts require, as a condition of
employment that a person or an employee
shall not join a labor organization or shall
withdraw from one to which he belongs.
Requisites of a Yellow Dog Contract:
(1) a representation by the employee that
he is not a member of a labor
organization
(2) a promise by the employee that he will
not join a union
UP LAW BOC
(3) a promise by the employee that upon
joining a labor organization, he will
quit his employment
3) Contracting Out to Discourage Unionism
General rule: contracting out is not a ULP, but
is covered by the employer’s management
prerogative.
Exception [Art. 259 (c)]:
(1) contracted-out services or functions
are performed by union members
AND
(2) contracting out will interfere with,
restrain, or coerce employees in the
exercise of their right to self-
organization.
4) Company Union [Art. 259 (d)]
"Company union" means any labor
organization whose formation, function or
administration has been assisted by any act
defined as unfair labor practice by this Code.
[Art. 219(i)]
The employer commits ULP if it initiates,
dominates, or otherwise interferes with the
formation or administration of any labor
organization.
Example: giving out financial aid to any
union's supporters or organizers.
5) Discrimination to Encourage/ Discourage
Unionism [Art. 259 (e)]
General rule: it is ULP to discriminate in regard
to wages, hours of work and other terms and
conditions of employment in order to
encourage or discourage membership in any
labor organization.
Exception:Union Security Clause:
Nothing in this Code or in any other law shall
stop the parties from requiring membership in
a recognized collective bargaining agent as a
condition for employment.
Exception to exception:
LABOR RELATIONS LABOR LAW
Those employees who are already members of
another union at the time of the signing of the
collective bargaining agreement.
6) Discrimination for Having Given or About to
Give Testimony [Art. 259 (f)]
It is an act of ULP by an employer to dismiss,
discharge or otherwise prejudice or
discriminate against an employee for having
given or being about to give testimony under
this Code.
Note: This is broader than the prohibition
under Art. 118 because Art. 259 (f) covers
testimony under the whole Code, while Art. 118
only covers testimony under Book I: Pre-
Employment, Title II: Wages
7) Violate duty to bargain collectively [Art. 259
(g)]
Duty to bargain collectively is a continuous
process, non-compliance of which constitutes
ULP. Collective bargaining does not end with
the execution of an agreement. Being a
continuous process, the duty to bargain
necessarily impose on the parties the
obligation to live up to the terms of such a
collective bargaining agreement if entered
into, it is undeniable that non-compliance
therewith constitutes an unfair labor practice.
[Shell Oil Workers Union v. Shell Co., G.R. No.
L-28607 (1971)]
Note: Refer to previous topic B.6 on ULP in
Collective Bargaining
8) Payment of negotiation or attorney's fees
[Art. 259 (h)]
Sweetheart contracts are favorable both to the
union and the employer at the expense of the
employees. The settlement of bargaining
issues must be made by fair bargaining in
good faith, and not through the payment of
negotiation or attorney's fees which will
ultimately lead to sweetheart contracts.
9) To violate a collective bargaining agreement
[Art. 259 (i)]
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Flagrant and/or malicious refusal to comply
with economic provisions required
Violations of collective bargaining
agreements, except flagrant and/or malicious
refusal to comply with its economic provisions,
shall not be considered unfair labor practice
and shall not be strikeable. [IRR]
Note: The list in Art. 259 is not exhaustive.
Other acts which are analogous to those
enumerated can be ULPs.
The alleged violation of the CBA, even
assuming it was malicious and flagrant, is not
a violation of an economic provision, thus not
an Unfair Labor Practice. [BPI Employees
Union-Davao FUBU v. BPI, G.R. No. 174912
(2013)]
An employer cannot be considered to have
committed a gross and economic violation of
the CBA when it, in good faith, withheld union
dues and death benefits from the union upon
written request of the union members in light
of the conflict between the members and the
union officers and instead deposited such
amount to the DOLE. [Arellano University
Employees and Workers Union vs. Court of
Appeals, G.R. 139940 (2006)]
D.3. ULP OF LABOR ORGANIZATIONS
1) Restraint, or coercion [Art. 260 (a)]
“Interfere” is not included in Art. 260 simply
because any act of a labor organization
amounts to interference to the right of self-
organization.
2) Discrimination: Encourage/ Discourage
Unionism [Art. 260 (b)]
General rule: it is a ULP for a labor
organization to cause an employer to
discriminate against an employee.
Exception: provisions of a valid union security
clause and other company policies applicable
to all employees.
3) Violate duty to bargain or the CBA [Art. 260
(c)]
Please refer to part B.4 for some examples.
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LABOR RELATIONS LABOR LAW
Note: Refer to previous topic B.6 on ULP in
Collective Bargaining
4) Illegal Exaction (Featherbedding) [Art. 260
(d)]
The practice of the labor organization to cause
or attempt to cause an employer to pay or
deliver or agree to pay or deliver money or
other things of value from the employer in
return for services which are not performed or
are not to be performed, including the
demand for a fee for union negotiations.
5) Asking or accepting negotiation and other
attorney's fees [Art. 260 (e)]
See counterpart in ULP by employers
(sweetheart contracts).
6) Violate a collective bargaining agreement
[Art. 260 (f)]
Flagrant and/or malicious refusal required
Violations of collective bargaining
agreements, except flagrant and/or malicious
refusal to comply with its economic provisions,
shall not be considered unfair labor practice
[Art. 274] and shall not be strikeable [§5, Rule
XXII, Book V].
E. RIGHT TO PEACEFUL CONCERTED
ACTIVITIES
Basis
Constitution, Art. XIII, §3 - [The State] shall
guarantee the rights of all workers to self-
organization, collective bargaining and
negotiations, and peaceful concerted
activities, including the right to strike in
accordance with law.
Art. 278(b) - Workers shall have the right to
engage in concerted activities for purposes
of collective bargaining or for their mutual
benefit and protection. The right of
legitimate labor organizations to strike and
UP LAW BOC
picket and of employers to lockout,
consistent with the national interest, shall
continue to be recognized and respected.
However, no labor union may strike and no
employer may declare a lockout on grounds
involving inter-union and intra-union
disputes.
Definition
A concerted activity is one undertaken by two
or more employees to improve their terms and
conditions of work.
Art. 257. Non-abridgment of right to self-
organization. —
It shall be unlawful for any person to
restrain, coerce, discriminate against or
unduly interfere with employees and
workers in their exercise of the right to self-
organization. Such right shall include the
right to form, join, or assist labor
organizations for the purpose of collective
bargaining through representatives of their
own choosing and to engage in lawful
concerted activities for the same purpose or
for their mutual aid and protection, subject
to the provisions of Article [279] of this
Code.
Limitation: Concerted activities must be in
accordance with law
The strike is a powerful weapon of the working
class. Precisely because of this, it must be
handled carefully, like a sensitive explosive,
lest it blow up in the workers’ own hands. Thus,
it must be declared only after the most
thoughtful consultation among them,
conducted in the only way allowed, that is,
peacefully, and in every case conformably to
reasonable regulation. Any violation of the
legal requirements and strictures will render
the strike illegal, to the detriment of the very
workers it is supposed to protect. [Batangas
Laguna Tayabas Bus Co. v. NLRC, G.R. No.
101858 (1992)]
LABOR RELATIONS LABOR LAW
Forms of concerted activities
Concerted Activities by Employees:
(a) Strike
(b) Picketing
(c) Boycott
(d) Slow down
Response to Concerted Activities available to
Employers:
(e) Lockout
E.1. BY LABOR ORGANIZATION
E.1.a. Strike
(a) Strike
A strike is any temporary stoppage of work by
the concerted action of employees as a result
of an industrial or labor dispute. [Art. 219(o)]
Labor Dispute - includes any controversy or
matter concerning terms and conditions of
employment or the association or
representation of persons in negotiating,
fixing, maintaining, changing or arranging the
terms and conditions of employment,
regardless of whether or not the disputants
stand in the proximate relation of employers
and employees. [Solidbank Corp. v. EU Gamier,
G.R. No. 159460 and G.R. No. 159461 (2010)]
Strikes not limited to work stoppages
The term “strike” shall comprise not only
concerted work stoppages, but also
slowdowns, mass leaves, sit-downs, attempts
to damage, destroy or sabotage plant
equipment and facilities, and similar activities.
[Samahang Manggagawa v. Sulpicio Lines,
G.R. No. 140992 (2004)]
As coercive measure by employees
A strike is a coercive measure resorted to by
laborers to enforce their demands. The idea
behind a strike is that a company engaged in
a profitable business cannot afford to have its
production or activities interrupted, much less,
paralyzed. [Phil. Can Co. v. CIR, G.R. No. L-
3021 (1950)]
PAGE 205 OF 235
UP LAW BOC LABOR RELATIONS
No severance of employer-employee
relationship during lawful strike
Although during a strike the worker renders no
work or service and receives no compensation,
yet his relationship as an employee with his
employer is not severed or dissolved. [Elizalde
Rope Factory, Inc. v. SSS, G.R. No. L-15163
(1962)]
Payment of wages during lawful strikes
General rule: Striking employees are not
entitled to the payment of wages for un-
worked days during the period of the strike
pursuant to the “no work-no pay” principle.
Exception: If there is no work performed by the
employee there can be no wage or pay unless
the laborer was able, willing and ready to work
but was illegally locked out, suspended or
dismissed or otherwise illegally prevented
from working. For this exception to apply, it is
required that the strike be legal. [Visayas
Community Medical Center vs Yballe, G.R. No.
196156 (2014)]
Reinstatement after a lawful strike
When strikers abandon the strike and apply for
reinstatement despite the existence of valid
grounds but the employer either:
(a) refuses to reinstate them or
(b) imposes upon their reinstatement new
conditions then the employer commits
an act of ULP.
The strikers who refuse to accept the new
conditions and are consequently refused
reinstatement are entitled to the losses of pay
they may have suffered by reason of the
employer’s discriminatory acts from the time
they were refused reinstatement. [Philippine
Marine Officers’ Guild v. Compania Maritima,
G.R. No. L-20662 and L-20663 (1968)]
E.1.a.i. Valid vs. Illegal Strikes
II.
(1) Legal strike – one called for a valid purpose
and conducted through means allowed by
law.
(2) Illegal strike – one staged for a purpose not III.
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LABOR LAW
recognized by law, or if for a valid purpose,
conducted through means not sanctioned
by law.
Effect of Illegality / Liability of participating
members/officers of the union
(1) Ordinary Striking Worker – cannot be
terminated for mere participation in an
illegal strike; proof must be adduced
showing that he or she committed illegal
acts during the strike.
(2) Participating Union Officer – may be
terminated, not only when he actually
commits an illegal act during a strike, but
also if he knowingly participates in an
illegal strike [Phimco Industries, Inc. v.
PILA, G.R. No. 170830 (2010)]
Other Forms of strikes
As to grounds
(1) Economic strike – one staged by workers to
force wage or other economic concessions
from the employer which he is not
required by law to grant [Consolidated
Labor Association of the Phil. v. Marsman
and Company, G.R. No. L-17038 (1964)]
(2) ULP strike – called against a company's
unfair labor practice to force the employer
to desist from committing such practices.
As to how committed
I. Slowdown strike – one by which workers,
without a complete stoppage of work,
retard production or their performance of
duties and functions to compel
management to grant their demands.
A slowdown is inherently illicit and
unjustifiable because while the employees
continue to work, they, at the same time,
select what part of their duties they
perform. In essence, they work on their
own terms. It is a strike on installment
basis. [Ilaw at Buklod ng Manggagawa v.
NLRC, G.R. No. 91980 (1991)]
Wild-cat strike – one declared and staged
without filing the required notice of strike
and without the majority approval of the
recognized bargaining agent.
Sit-down strike – one wherein workers take
 UP LAW BOC LABOR RELATIONS LABOR LAW

over possession of the property of such or more persons to observe and attempt to
business to cease production and to refuse observe. The purpose of pickets is said to be a
access to owners. means of peaceable persuasion. [Sta. Rosa
Coca-Cola Plant Employees Union v. Coca-
IV. Sympathetic strike – one in which the
Cola Bottlers Philippines, Inc., G.R. Nos.
striking workers have no demands of their
164302-03 (2007)]
own, but strike to make common cause
with other strikers in other establishments. Peaceful Picketing is the right of workers
during strikes consisting of marching to and
V. Mass leave – one in which workers
fro before an establishment involved in a labor
collectively abandon or boycott regular
dispute generally accompanied by the
work causing temporary stoppage of work
carrying and display of signs, placards and
banners intended to inform the public about
the dispute. [Guidelines Governing Labor
Conversion from economic to ULP strike
Relations, October 19, 1987] [NCMB Manual, §1]
It is possible for a strike to change its character
from an economic to a ULP strike. In the
instant case, initially, the strike staged by the E.2.Lockout
Union was meant to compel the Company to
Lockout is the temporary refusal of an
grant it certain economic benefits set forth in
employer to furnish work as a result of an
its proposal for collective bargaining. However,
industrial or labor dispute. [Art. 219 (p)]
the strike changed its character from the time
the Company refused to reinstate Illegal strike and illegal lockout/In Pari Delicto
complainants because of their union activities Doctrine
after it had offered to admit all the strikers and
When the employer engaged in illegal lockout
in fact did readmit the others. It was then
and the employee engaged in illegal strike,
converted into an unfair labor practice strike.
both parties are in pari delicto and such
[Consolidated Labor Association of the Phil. v.
situation warrants the restoration of the status
Marsman and Company, G.R. No. L-17038
quo ante and bringing the parties back to the
(1964)]
respective positions before the illegal strike
Strike cannot be converted to a lockout by a and illegal lockout. [Philippines Inter-Fashion
return to work offer Inc. v. NLRC, G.R. No. L-59847 (1982)]
A strike cannot be converted into a pure and
simple lockout by the mere expedient filing
E.2 WHO MAY DECLARE A STRIKE OR
before the trial court a notice of offer to return
LOCKOUT?
to work during the pendency of the labor
dispute between the union and the employer. Who may declare a strike
[Rizal Cement Workers Union v. CIR, G.R. No.
(1) The certified or duly recognized
L-18442 (1962)]
bargaining representative
(2) Any legitimate labor organization in
E.1.b. Picketing the absence of a certified or duly
recognized bargaining representative,
The right of legitimate labor organizations to
but only on grounds of ULP [§6, Rule
strike and picket and of employers to lockout,
XXII, Book V]
consistent with the national interest, shall
continue to be recognized and respected. [Art.
278(b)]
Who may declare a lockout
Picketing involves merely the marching to and
The employer [Art. 278(b)]
fro at the premises of the employer, usually
accompanied by the display of placards and
other signs making known the facts involved E.3 REQUISITES FOR A VALID STRIKE
in a labor dispute. As applied to a labor
dispute, to picket means the stationing of one
PAGE 207 OF 235
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A valid strike must have a lawful ground and
must conform with the procedural
requirements set by law.
Substantial Requirements/Grounds
A strike or lockout may be declared in cases of:
(1) Bargaining deadlocks
(2) ULP [Art. 278(c)]
When violations of collective bargaining
strikeable as ULP
Only gross violations of the economic
provisions of the CBA are treated as ULP. [BPI
Employees Union-Davao FUBU v. BPI, G.R. No.
174912 (2013)]
(G)ross violations of Collective Bargaining
Agreement shall mean flagrant and/or
malicious refusal to comply with the economic
provisions of such agreement. [Art. 274]
When no lawful strike can be declared
(1) Ground is an inter-union or intra-union
dispute
(2) Non-compliance with the procedural
requirements
a. No notice of strike
b. No strike vote obtained and
reported to the NCMB
(3) After assumption or certification by the
Secretary of Labor
(4) Wage Distortion (as described previously
in Part 1 of the Reviewer)
Prohibited activities in strike
(1) By anyone. No person shall obstruct,
impede, or interfere with, by force,
violence, coercion, threats, or intimidation,
any peaceful picketing by employees [Art.
279(b)]
(2) By employer. No employer shall use or
employ any strike-breaker, nor shall any
person be employed as a strike-breaker.
[Art. 279(c)]
(3) By public official or police force. No public
LABOR RELATIONS LABOR LAW
official or employee, including officers and
personnel of the New Armed Forces of the
Philippines or the Integrated National
Police, or armed person, shall bring in,
introduce or escort in any manner, any
individual who seeks to replace strikers in
entering or leaving the premises of a strike
area, or work in place of the strikers. [Art.
279(d)]
Procedural requirements[Art. 278]
(1) Effort to bargain (for bargaining deadlock
strikes)
(2) Filing and service of notice of strike
(3) Observance of cooling-off period
i. 15 days for ULP
1. No cooling-off period when
the ULP can be considered
union busting (dismissal of
duly elected union officers
from employment)
ii. 30 days for bargaining deadlock
(4) Notice of strike vote meeting to NCMB
within 24 hours before the strike vote [§
10, Rule XXII, Book V]
(5) Strike vote
(6) Strike vote report sent to NCMB
(7) Observance of the waiting period (7-day
strike ban)
(1) Effort to bargain
No labor organization […] shall declare a
strike […] without first having bargained
collectively in accordance with Title VII of this
Book […] [Art. 279(a)]
In case of bargaining deadlocks, the notice
shall, as far as practicable, further state the
unresolved issues in the bargaining
negotiations and be accompanied by the
written proposals of the union, the counter-
proposals of the employer and the proof of a
request for conference to settle differences. In
cases of unfair labor practices, the notice shall,
as far as practicable, state the acts
complained of, and efforts taken to resolve the
dispute amicably. [§4, Rule XXII, Book V]
PAGE 208 OF 235
UP LAW BOC LABOR RELATIONS
The Implementing Rules use the words as far
as practicable. In this case, attaching the
counter-proposal of the company to the notice
of strike of the union was not practicable. It
was absurd to expect the union to produce the
company’s counter-proposal which it did not
have. One cannot give what one does not have.
Indeed, compliance with the requirement was
impossible because no counter-proposal
existed at the time the union filed a notice of
strike. [Club Filipino, Inc. vs. Bautista, 2009]
(2) Filing and service of notice of strike
Bargaining deadlocks
Art. 278(c) - [T]he duly certified or
recognized bargaining agent may file a
notice of strike […] with the Department at
least 30 days before the intended date
thereof. […]
Unfair Labor Practice; Union Busting
Art. 278(c) - [I]n cases of unfair labor
practice, the period to file notice of strike
shall be 15 days and in the absence of a duly
certified or recognized bargaining agent, the
notice of strike may be filed by any legitimate
labor organization in behalf of its members.
However, in case of dismissal from
employment of union officers duly elected in
accordance with the union constitution and
by-laws, which may constitute union busting
where the existence of the union is
threatened, the 15-day cooling-off period
shall not apply and the union may take
action immediately.
Note: The notice must be served to the
employer. Failure to do so will constitute
noncompliance with the procedural
requirements and will result to an illegal strike.
[Filipino Pipe and Foundry Corp v. NLRC, G.R.
No. 115180 (1999)]
Rationale: Due process. [IRR]
Contents of Notice of Strike
1) Names and addresses of the employer
and the union involved
2) Nature of the industry to which the
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LABOR LAW
employer belongs
3) Number of union members and of
workers in the bargaining unit
4) Such other relevant data as may
facilitate the settlement of the dispute.
Additional Requirements
In case of Bargaining Deadlocks:
1) Statement of unresolved issues in the
bargaining negotiations
2) Written proposals of the union
3) Counter-proposals of the employer
4) Proof of a request for conference to
settle the differences. [§4, Rule XXII,
Book V]
In cases of ULP:
1) Statement of acts complained of
2) Efforts taken to resolve the dispute
amicably. [§4, Rule XXII, Book V]
Action on Notice
1. Upon receipt of a valid notice of strike
or lockout, the NCMB, through its
Conciliator-Mediators, shall call the
parties to a conference the soonest
possible time in order to actively assist
them to explore all possibilities for
amicable settlement.
2. The Conciliator-Mediator may
suggest/offer proposals as an
alternative avenue for the resolution
of their disagreement/conflict which
may not necessarily bind the parties.
3. If conciliation/mediation fails, the
parties shall be encouraged to submit
their dispute for voluntary arbitration.
(3) Observance of cooling-off periods
Cooling off periods
1) Bargaining deadlock – 30 days
2) ULP but not union busting – 15 days
3) ULP and union busting – no cooling-
off period
UP LAW BOC LABOR RELATIONS
Purpose of Cooling Off Period
Art. 278(e) - During the cooling-off period, it
shall be the duty of the Ministry [now DOLE]
to exert all efforts at mediation and
conciliation to effect a voluntary settlement.
Should the dispute remain unsettled until
the lapse of the requisite number of days
from the mandatory filing of the notice, the
labor union may strike or the employer may
declare a lockout.
The purpose of the cooling-off period is to
provide an opportunity for mediation and
conciliation. [National Federation of Sugar
Workers v. Ovejera, G.R. No. L-59743 (1982)]
(4) Notice of Strike-Vote Meeting
§10, Rule XXII, Book V - In every case, the
union or the employer shall furnish the
regional branch of the Board the notice of
meetings referred to in the preceding
paragraph at least twenty-four (24) hours
before such meetings…
(5) Strike Vote
Requirements for a declaration of a strike in a
strike vote
1) approval by a majority of the total
union membership in the bargaining
unit concerned
2) approval is obtained by secret ballot in
a meeting/referendum called for the
purpose
Duration of the Validity of the Strike-Vote
Art. 278(f) - [T]he decision shall be valid for
the duration of the dispute based on
substantially the same grounds considered
when the strike or lockout vote was taken.
[…]
DOLE intervention
1
7-day “Waiting Period”.
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LABOR LAW
Art. 278(f) - [T]he Department may, at its
own initiative or upon the request of any
affected party, supervise the conduct of the
secret balloting. […]
(6) Strike Vote Report
Art. 278(f) - [I]n every case, the union or the
employer shall furnish the Department the
results of the voting at least 7 days before
the intended strike1 or lockout, subject to the
cooling-off period herein provided.
(7) Observance of the 7-day “waiting period”
The waiting period, on the other hand, is
intended to provide opportunity for the
members of the union or the management to
take the appropriate remedy in case the strike
or lockout vote report is false or inaccurate.
[National Federation of Sugar Workers v.
Ovejera, G.R. No. L-59743 (1982)]
The waiting period is intended to give the
DOLE an opportunity to verify whether the
projected strike really carries the imprimatur
of the majority of the union members.
[Lapanday Workers Union v. NLRC, G.R. Nos.
95494-97 (1995)]
Compliance with Both Cooling-off and Waiting
Periods
The observance of both periods must be
complied with, although a labor union may
take a strike vote and report the same within
the statutory cooling-off period. The cooling-
off and 7-day strike ban provisions of law
constitute a valid exercise of police power of
the State. [National Federation of Sugar
Workers v. Ovejera, G.R. No. L-59743 (1982)]
Strike-vote Reported within the Cooling-off
Period
When the strike-vote is reported within the
cooling-off period, the phrase “at least 7 days
before the intended strike or lockout, subject
to the cooling-off period herein provided.” in
Article 278(f) admits two interpretations:
(1) Mutually exclusive periods (used in the
NCMB Manual). The cooling off period and
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the 7-day period are mutually exclusive.
Thus, in the case of Capitol Medical Center
v. NLRC [G.R. No. 147080 (2005)], the
Court held that when the strike vote is
conducted within the cooling-off period,
the 7-day requirement shall be counted
from the day following the expiration of
the cooling off period.
(2) Coexistent periods. The cooling-off period
and the 7-day requirement may coexist.
After all, the purpose of the 7-day
requirement is to give time for the DOLE to
verify if the projected strike is supported by
the majority. There is no reason to add it to
the cooling-off period.
E.4 REQUISITES FOR A VALID LOCKOUT
Limitations
Art. 278(b) - [N]o employer may declare a
lockout on grounds involving inter-union
and intra-union disputes.
Grounds
Similar to a strike, the proper grounds for a
lockout are
1) bargaining deadlock
2) ULP by labor organizations
Requisites
1. Effort to bargain (in case of bargaining
deadlock)
2. Filing and service of notice of lockout
to the NCMB
3. Observance of cooling-off period
a. 15 days for ULP
b. 30 days for bargaining
deadlock
4. Notice of lockout vote meeting within
24 hours before the intended vote [§10,
Rule XXII, Book V]
5. Lockout vote
6. Report of lockout vote
7. Observance of the waiting period (7-
day strike ban)
LABOR RELATIONS LABOR LAW
(1) Effort to bargain
Art. 279(a) - No employer shall declare a […]
lockout without first having bargained
collectively in accordance with Title VII of this
Book.
(2) Filing and service of Notice of Lockout
Bargaining deadlocks
Art. 278(c) - [T]he duly certified or recognized
bargaining agent may file […] a notice of
lockout with the Department at least 30 days
before the intended date thereof. […]
Unfair Labor Practice; Union Busting
Art. 278(c) - [I]n cases of unfair labor practice,
the period to file notice of strike shall be 15
days and in the absence of a duly certified or
recognized bargaining agent, the notice of
strike may be filed by any legitimate labor
organization in behalf of its members.
However, in case […] of union busting
(dismissal of duly elected union officers from
employment), the cooling period shall not
apply and the union may take action
immediately.
Note: The notice must be served to the
employees through the SEBA or the legitimate
labor organization (if no SEBA).
Contents of notice
1) Names and addresses of the employer
and the union involved
2) Nature of the industry to which the
employer belongs
3) Number of union members and of
workers in the bargaining unit
4) Such other relevant data as may facilitate
the settlement of the dispute.
Additional Requirements [§8, Rule XXII, Book
V]
In cases of bargaining deadlocks
1) Statement of unresolved issues in the
bargaining negotiations
2) Written proposals of the union
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3) Counter-proposals of the employer
4) Proof of a request for conference to settle
the differences.
In cases of ULP
1) Statement of acts complained of
2) Efforts taken to resolve the dispute
amicably.
Action on notice
1. Upon receipt of a valid notice of strike or
lockout, the NCMB, through its
Conciliator-Mediators, shall call the
parties to a conference the soonest
possible time in order to actively assist
them to explore all possibilities for
amicable settlement.
2. The Conciliator-Mediator may
suggest/offer proposals as an alternative
avenue for the resolution of their
disagreement/conflict which may not
necessarily bind the parties.
3. If conciliation/mediation fails, the parties
shall be encouraged to submit their
dispute for voluntary arbitration. [§9, Rule
XXII, Book V]
(3) Observance of Cooling-off Periods
Lockout cooling-off periods:
● based on bargaining deadlock – 30
days
● based on ULP – 15 days.
(4) Notice of Lockout Vote Meeting
§10, Rule XXII, Book V - In every case, the union or
the employer shall furnish the regional branch of
the Board the notice of meetings referred to in the
preceding paragraph at least twenty-four (24)
hours before such meetings [...]
(5) Lockout Vote
Art. 278(f) - A decision to declare a lockout
must be approved by a majority of the board
of directors of the corporation or association
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LABOR LAW
or of the partners in a partnership, obtained
by secret ballot in a meeting called for that
purpose. The decision shall be valid for the
duration of the dispute based on substantially
the same grounds considered when the strike
or lockout vote was taken.
(5) Report of Lockout Vote
Art. 278(f) - In every case, the union or the
employer shall furnish the Ministry the results
of the voting at least seven days before the
intended strike or lockout, subject to the
cooling-off period herein provided.
(6) Observance of Waiting Period (7 days)
See notes under strike.
Effect of Illegal Lockout
Art. 279(a) par. 3, 1st Sentence - Any worker
whose employment has been terminated as a
consequence of any unlawful lockout shall be
entitled to reinstatement with full
backwages.
E.5 REQUISITES FOR LAWFUL PICKETING
Prohibited activities in picketing
1. By any person. No person shall obstruct,
impede, or interfere with, by force,
violence, coercion, threats or intimidation,
any peaceful picketing by employees
during any labor controversy or in the
exercise of the right to self-organization or
collective bargaining, or shall aid or abet
such obstruction or interference. [Art.
279(b)]
2. By police force. The police force shall keep
out of the picket lines unless actual
violence or other criminal acts occur
therein: Provided, That nothing herein
shall be interpreted to prevent any public
officer from taking any measure necessary
to maintain peace and order, protect life
and property, and/or enforce the law and
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legal orders. [Art. 279(d)] Picketing, peacefully carried out, is not illegal
even in the absence of employer-employee
3. By person engaged in picketing. No person
relationship, for peaceful picketing is a part of
engaged in picketing shall commit any act
the freedom of speech guaranteed by the
of violence, coercion or intimidation or
Constitution. [De Leon v. National Labor Union,
obstruct the free ingress to or egress from
G.R. No. L-7586 (1957)]
the employer’s premises for lawful
purposes, or obstruct public
thoroughfares. [Art. 279(e)]
E.6. ASSUMPTION OF JURISDICTION BY
THE DOLE SECRETARY
Picketing as Part of Freedom of
Speech/Expression
When Sec. of Labor can Assume Jurisdiction
General rule: picketing enjoys constitutional [Art. 278]:
protection as part of freedom of speech and/or
(1) Labor dispute in an industry
expression.
indispensable to the national interest;
and
Exceptions/limitations: (2) Such dispute is causing or is likely to
cause a strike or lockout
1) When picketing is coercive rather than
persuasive [Security Bank Employees
Union v. Security Bank, G.R. No. L- E.6.a. Nature
28536 (1968)]
Powers of the Secretary of Labor (alternative)
2) When picketing is achieved through
1) Assumption of jurisdiction. The
illegal means [Mortera v. CIR, , G.R. No.
Secretary of Labor will decide the
L-1340 (1947)]
labor dispute himself/herself.
3) Courts may confine the
2) Certification for compulsory arbitration.
communication/demonstration to the
The Secretary of Labor will certify the
parties to the labor dispute [PCIB v.
labor dispute to the NLRC for
Philnabank Employees Association,
compulsory arbitration.
G.R. No. L-29630 (1981)]
Powers of the President (Not precluded by the
4) Innocent bystander rule. Courts may
powers of the Secretary of Labor)
insulate establishments or persons
with no industrial connection or 1. Determine the industries
having interest totally foreign to the indispensable to the national interest
context of the dispute [PCIB v.
2. Assume jurisdiction over any such
Philnabank Employees Association,
labor dispute to settle or terminate
G.R. No. L-29630 (1981)]
such dispute

Picketing and Libel Who determines industries indispensable to

Libel laws are not applied strictly considering
that there is emotional tension in the picket
lines and expected discourteous and impolite
exchanges between the employees and the
employer. [PCIB v. Philnabank Employees
Association, G.R. No. L-29630 (1981)]
Peaceful picketing is legal even in the absence
of employer-employee relationship
PAGE 213 OF 235
the national interest [Art. 278(g)]
1. Secretary of Labor and Emplotyment
2. President
Industries Indispensable to the National
Interest
a. Hospital sector
b. Electric power industry
c. Water supply service, to exclude small
UP LAW BOC
water supply services such as bottling
and refilling stations
d. Air traffic control
e. Other industries as may be
recommended by the National
Tripartite Industrial Peace Council
(TIPC) [§16, Rule XXII, Book V, as
amended by DO 40-H-13]
E.6.b. Effect Of Assumption Of Jurisdiction
(1) Automatic injunction
(2) Return-to-work and admission
(3) Immediately executory
(1) Automatic injunction of intended of
impending strike or lockout
Art. 278(g) - [S]uch assumption or
certification shall have the effect of
automatically enjoining the intended or
impending strike or lockout as specified in the
assumption or certification order. […]
(2) Return-to-work and readmission if strike or
lockout has already taken place
Art. 278(g) - [I]f one has already taken place
at the time of assumption or certification, all
striking or locked out employees shall
immediately return-to-work and the
employer shall immediately resume
operations and readmit all workers under the
same terms and conditions prevailing before
the strike or lockout. […]
Nature of return-to-work order
[T]he return-to-work order not so much
confers a right as it imposes a duty; and while
as a right it may be waived, it must be
discharged as a duty even against the worker's
will. Returning to work in this situation is not a
matter of option or voluntariness but of
obligation. The worker must return to his job
together with his co-workers so the operations
of the company can be resumed and it can
continue serving the public and promoting its
interest. That is the real reason such return
can be compelled. So imperative is the order
in fact that it is not even considered violative
LABOR RELATIONS LABOR LAW
of the right against involuntary servitude.
[Kaisahan ng Mga Manggagawa sa Kahoy v.
Gotamco Sawmills, GR No. L-1573 (1948)]
(3) Immediately executory
The assumption and certification orders are
executory in character and must be strictly
complied with by the parties. [Allied Banking v.
NLRC, G.R. No. 116128 (1996)]
Strikes and lockouts in hospitals, clinics and
similar medical institutions
It shall be the duty of the striking union or
locking-out employer to provide and maintain
an effective skeletal workforce of medical and
other health personnel, whose movement and
services shall be unhampered and
unrestricted, as are necessary to insure the
proper and adequate protection of the life and
health of its patients, most especially
emergency cases, for the duration of the strike
or lockout.
In such cases, therefore, the Secretary of Labor
and Employment may immediately assume,
within twenty four (24) hours from knowledge
of the occurrence of such a strike or lockout,
jurisdiction over the same or certify it to the
Commission for compulsory arbitration. [Art.
278, par. 2]
Rationale
The highest respect is accorded to the right of
patients to life and health.
Effect of defiance of assumption or certification
orders
Art. 279(a), par. 2 - No strike or lockout shall
be declared after assumption of jurisdiction
by the President or the Minister or after
certification or submission of the dispute to
compulsory or voluntary arbitration or during
the pendency of cases involving the same
grounds for the strike or lockout.
Strike/lockout becomes illegal
PAGE 214 OF 235
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A strike undertaken despite the issuance by
the Secretary of Labor of an assumption or
certification order becomes a prohibited
activity and thus, illegal, pursuant to Article
279(a) of the Labor Code. [Allied Banking v.
NLRC, G.R. No. 116128 (1996)]
See notes on liabilities of employer, union
officers, and ordinary workers under illegal
strike.
Summary of Liabilities of Participants in an
Illegal Strike/Lockout [Art. 279]
1) Employer in an illegal lockout – workers
terminated due to illegal lockout shall be
entitled to reinstatement plus full
backwages.
2) Union officers who participated in illegal
strike – deemed to have lost their
employment
3) Union officers who participated in illegal
acts during a LAWFUL strike – deemed to
have lost their employment.
4) Ordinary workers – deemed to have lost
their employment only if they participated
in illegal acts.
Stricter penalties for non-compliance with
orders, prohibitions, and/or injunctions issued
by the Secretary of Labor in strikes involving
hospitals, clinics, and similar medical
institutions
1) Immediate disciplinary action against
both union and employer
2) Dismissal/loss of employment for
members of the striking union
3) Payment by employer of backwages,
damages, and other affirmative relief
4) Criminal prosecution against either or
both the union and employer
E.7. ILLEGAL STRIKE
Reasons for being illegal
(1) Prohibited by law
(2) Improper grounds
(3) Noncompliance with procedural
PAGE 215 OF 235
LABOR LAW
requirements
(4) Unlawful means and methods
(5) Violation of injunction order
(6) No strike/lockout provisions in the
CBA [Citing Ludwig Teller in Toyota
Motors v. NLRC, G.R. Nos. 158786 &
158787 (2007)]
(1) Prohibited by law
Government employees
While the Constitution guarantees the right of
government employees to organize, they are
not allowed to strike.
(2) Improper grounds
A legal strike must be based on a bargaining
deadlock and/or a ULP act only.
Intra-union and inter-union disputes are not
proper grounds to strike.
Good faith strike
Good faith may be used as a defense if the
strike is held on the basis of an act of ULP by
the employer even if it turned out that there
was no act of ULP. However, the mandatory
procedural requirements cannot be dispensed
with (notice of strike, cooling-off period, strike
vote, strike vote report). [Grand Boulevard
Hotel v. GLOWHRAIN, G.R. No. 153664 (2003)]
Good faith strike requires rational basis
A mere claim of good faith would not justify
the holding of a strike under the aforesaid
exception as, in addition thereto, the
circumstances must have warranted such
belief. It is, therefore, not enough that the
union believed that the employer committed
acts of ULP when the circumstances clearly
negate even a prima facie showing to sustain
such belief. [Interwood Employees Assoc. v.
Int’l Hardwood, G.R. No. L-7409 (1956)]
(3) Noncompliance with procedural
requirements
See notes under procedural requirements of a
valid strike.
UP LAW BOC LABOR RELATIONS
A strike which does not strictly comply with the
procedural requirements set by law and the
rules is an unlawful/illegal strike. [Sta. Rosa
Coca-Cola Plant Employees Union v. Coca-Cola
Bottlers Philippines, Inc., G.R. Nos. 164302-03
(2007)]
Good faith strike must still comply with
procedural requirements
Even if the union acted in good faith in the
belief that the company was committing an
unfair labor practice, if no notice of strike and
a strike vote were conducted, the said strike is
illegal. [Grand Boulevard Hotel v. GLOWHRAIN,
G.R. No. 153664 (2003)]
GR: A strike based on a non-strikeable ground
is an illegal strike; a strike grounded on ULP is
illegal if no such acts actually exist.
Exception: Even if no ULP acts are committed
by the employer, if the employees believe in
good faith that ULP acts exist so as to
constitute a valid ground to strike, then the
strike held pursuant to such belief may be
legal. [NUWHRAIN v. NLRC, G.R. No. 125561
(1998)]
(4) Unlawful means and methods
Purpose and means test
There must be concurrence between the
validity of the purpose of the strike and the
means of conducting it.
A strike is a legitimate weapon in the universal
struggle for existence. It is considered as the
most effective weapon in protecting the rights
of the employees to improve the terms and
conditions of their employment. But to be valid,
a strike must be pursued within legal bounds.
The right to strike as a means for the
attainment of social justice is never meant to
oppress or destroy the employer. The law
provides limits for its exercise. Among such
limits are the prohibited activities under Art.
[279], particularly paragraph (e), which states
that no person engaged in picketing shall:
● commit any act of violence, coercion,
or intimidation or
● obstruct the free ingress to or egress
from the employer's premises for
PAGE 216 OF 235
LABOR LAW
lawful purposes or
● obstruct public thoroughfares.
[Association of Independent Unions in
the Philippines (AIUP), et. al. v. NLRC,
G.R. No. 120505 (1999)]
A legal strike may turn into an illegal strike
Even if the strike is valid because its objective
or purpose is lawful, the strike may still be
declared invalid where the means employed
are illegal. [Phil. Diamond Hotel and Resort, Inc.
v. Manila Diamond Hotel Employees Union, G.R.
No. 158075 (2006)]
Examples of unlawful means and methods
1) Acts of violence and terrorism
2) Destruction of property
Guidelines and balancing of Interest
(1) A strike otherwise valid, if violent in
character, may be placed beyond the
pale.
(2) Care is to be taken especially where an
unfair labor practice is involved, to
avoid stamping it with illegality just
because it is tainted by such acts. To
avoid rendering illusory the
recognition of the right to strike,
responsibility in such a case should be
individual and not collective.
(3) A different conclusion would be called
for if the existence of force while the
strike lasts is pervasive and
widespread, consistently and
deliberately resorted to as a matter of
policy. It could be reasonably
concluded then that even if justified as
to ends, it becomes illegal because of
the means employed'.
(4) This is not by any means to condone
the utilization of force by labor to
attain its objectives. It is only to show
awareness that in labor conflicts, the
tension that fills the air as well as the
feeling of frustration and bitterness
could break out in sporadic acts of
violence.
If there be in this case a weighing of interests
in the balance, the ban the law imposes on
UP LAW BOC
unfair labor practices by management that
could provoke a strike and its requirement that
it be conducted peaceably, it would be, to
repeat, unjustified, considering all the facts
disclosed, to stamp the strike with illegality. It
is enough that individual liability be incurred
by those guilty of such acts of violence that call
for loss of employee status. Such an approach
is reflected in our recent decisions. [Shell Oil
Workers Union v. Shell Co. of the Phils, G.R. No.
L-28607 (1971)]
The Labor Code regulates the exercise of said
right by balancing the interests of labor and
management in the light of the overarching
public interest. Thus, paragraphs (c) and (f) of
Article 278mandate the following procedural
steps to be followed before a strike may be
staged: filing of notice of strike, taking of
strike vote, and reporting of the strike vote
result to the DOLE. It bears stressing that
these requirements are mandatory, meaning,
non-compliance therewith makes the strike
illegal. The evident intention of the law in
requiring the strike notice and strike-vote
report is to reasonably regulate the right to
strike, which is essential to the attainment of
legitimate policy objectives embodied in the
law. [Stamford Mark Corp. v. Julian, G.R. No.
145496 (2004)]
(5) Violation of injunction order
An automatic injunction under Article 278(g)
or a valid injunction order under the
exceptions to Article 279must be complied
with. Otherwise, the strike becomes illegal.
(6) No strike/lockout provisions in the CBA
A “no strike, no lock-out” is a valid provision in
the CBA. However, it only applies to economic
provisions. It cannot prevent a strike which is
grounded on unfair labor practice. [Malayang
Samahan ng mga Manggagawa sa Greenfield
v. Ramos, G.R. No. 113907 (2000)]
LIABILITY OF UNION OFFICERS
Any union officer who knowingly participates
in an illegal strike and any worker or union
officer who knowingly participates in the
commission of illegal acts during a strike may
LABOR RELATIONS LABOR LAW
be declared to have lost his employment
status. [Art. 279(a)]
Note: Mere participation in an illegal strike by
a union officer is sufficient ground to
terminate his employment. In case of a lawful
strike, the union officer must commit illegal
acts during a strike for him to be terminated.
[Article 279(a)]
LIABILITY OF ORDINARY WORKERS
General rule: Participation by a worker in a
lawful strike is not ground for termination of
his employment. [Art. 279(a)]
Exception: When the worker participated in
illegal acts during the strike.
When the strike is or becomes illegal, the
workers who participate in it are not deemed
to have lost their employment status by
express omission in the second sentence of the
third paragraph of Art. 279. Only the union
officers are deemed to have lost their
employment status.
LIABILITY OF EMPLOYER
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with
full backwages. [Art. 279(a)]
WAIVER OF ILLEGALITY OF STRIKE
When defense of illegality of strike is deemed
waived
An employer can be deemed to have waived
the defense that a strike is illegal. In one case,
the Court held that:
“Admitting for the sake of argument that the
strike was illegal for being premature, this
defense was waived by the [Company], when it
voluntarily agreed to reinstate the radio
operators.” [Bisaya Land Transportation Co.,
Inc. v. CIR, G.R. No. L-10114 (1957)]
When defense of illegality of strike is not
deemed waived
The ruling cited in the Bisaya case that the
employer waives his defense of illegality of the
strike upon reinstatement of strikers is
applicable only to strikers who signified their
PAGE 217 OF 235
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intention to return to work and were accepted
back. […]
Truly, it is more logical and reasonable for
condonation to apply only to strikers who
signified their intention to return and did
return to work. The reason is obvious. These
strikers took the initiative in normalizing
relations with their employer and thus helped
promote industrial peace. However, as regards
the strikers who decided to pursue with the
case, […] the employer could not be deemed to
have condoned their strike, because they had
not shown any willingness to normalize
relations with it. [Philippine Inter-Fashion, Inc.
v. NLRC, G.R. No. L-59847 (1982)]
However, the mere act of entering into a
compromise agreement cannot be deemed to
be a waiver of the illegality of the strike, unless
it such a waiver is clearly shown in the
agreement. The court has emphasized that
“[for] a waiver to be valid and effective [it]
must be couched in clear and unequivocal
terms which leave no doubt as to the intention
of a party to give up a right or benefit which
legally pertains to him.” [Filcon Manufacturing
Corp v. Lakas Manggagawa sa Filcon – Lakas
Manggagawa Labor Center, G.R. No. 150166
(2004)]
E.8. INJUNCTIONS
Art. 266 - No temporary or permanent
injunction or restraining order in any case
involving or growing out of labor disputes
shall be issued by any court or other entity,
except as otherwise provided in Articles [225]
and [279] of this Code. [
General Rule: Injunctions are prohibited.
Exceptions: Those provided under Art. 225
(referring to the Powers of the NLRC) in
connection with Art. 279(on Prohibited
Activities) under the Labor Code.
F. REQUISITES FOR LABOR
INJUNCTIONS
Requisites for injunction to issue
accordance with the Powers of the NLRC)
1. actual or threatened commission of a
LABOR RELATIONS LABOR LAW
prohibited or unlawful act OR
requirement of performance of a
particular act in a labor dispute
2. if unrestrained or unperformed, the
act will cause substantial and
irreparable damage to any party OR
render ineffectual any decision in favor
of such party
3. complainant has no adequate remedy
at law
4. public officers charged with the duty
to protect complainant’s property are
unable or unwilling to furnish
adequate protection [Art. 225(e)]
Prohibited Activities [Art. 279]
(a) No labor organization or employer shall
declare a strike or lockout without first
having bargained collectively in
accordance with Title VII of this Book or
without first having filed the notice
required in the preceding Article or
without the necessary strike or lockout
vote first having been obtained and
reported to the Ministry [DOLE].
No strike or lockout shall be declared after
assumption of jurisdiction by the
President or the Minister or after
certification or submission of the dispute
to compulsory or voluntary arbitration or
during the pendency of cases involving the
same grounds for the strike or lockout.
Any worker whose employment has been
terminated as a consequence of any
unlawful lockout shall be entitled to
reinstatement with full backwages. Any
union officer who knowingly participates
in an illegal strike and any worker or union
officer who knowingly participates in the
commission of illegal acts during a strike
may be declared to have lost his
employment status: Provided, That mere
participation of a worker in a lawful strike
shall not constitute sufficient ground for
termination of his employment, even if a
replacement had been hired by the
employer during such lawful strike.
(b) No person shall obstruct, impede, or
interfere with, by force, violence, coercion,
(in
threats or intimidation, any peaceful
picketing by employees during any labor
PAGE 218 OF 235
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controversy or in the exercise of the right appears that the inevitable result of its
to self-organization or collective exercise is [1] to create an impression that a
bargaining, or shall aid or abet such labor dispute with which they have no
obstruction or interference. connection or interest exists between them
and the picketing union or [2] constitute an
(c) No employer shall use or employ any
invasion of their rights. [Liwayway Publishing v.
strike-breaker, nor shall any person be
Permanent Concrete Worker's Union, G.R. No.
employed as a strike-breaker.
L-25003 (1981)]
(d) No public official or employee, including
officers and personnel of the New Armed
Forces of the Philippines or the Integrated
National Police, or armed person, shall
bring in, introduce or escort in any manner,
any individual who seeks to replace
strikers in entering or leaving the premises
of a strike area, or work in place of the
strikers. The police force shall keep out of
the picket lines unless actual violence or
other criminal acts occur therein: Provided,
That nothing herein shall be interpreted to
prevent any public officer from taking any
measure necessary to maintain peace and
order, protect life and property, and/or
enforce the law and legal order.
(e) No person engaged in picketing shall
commit any act of violence, coercion or
intimidation or obstruct the free ingress to
or egress from the employer’s premises for
lawful purposes, or obstruct public
thoroughfares.

H. “INNOCENT BYSTANDER RULE”

Test to Determine if a Party is an “Innocent
Bystander”
An "innocent bystander," who seeks to enjoin
a labor strike, must satisfy the court that aside
from the grounds specified in Rule 58 of the
Rules of Court, it is entirely different from,
without any connection whatsoever to, either
party to the dispute and, its interests are totally
foreign to the context thereof. [MSF Tire and
Rubber Inc. v. CA, G.R. No. 128632 (1999)]

Injunction Available to Innocent Bystanders

An innocent by-stander is entitled to
injunction if it is affected by the activities of a
picketing union.
Rationale
The right [to picket] may be regulated at the
instance of […] `innocent bystanders' if it
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VIII. Jurisdiction and
Remedies
A. LABOR ARBITER
A.1 JURISDICTION
Except as otherwise provided under the Code
the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide:
(1) Unfair labor practices cases;
(2) Termination disputes;
(3) If accompanied with a claim for
reinstatement, those cases that workers
may file involving wages, rates of pay,
hours of work and other terms and
conditions of employment;
(4) Claims for actual, moral, exemplary and
other forms of damages arising from the
employer-employee relations;
(5) Cases arising from any violation of Art.
[279] of this Code, including questions
involving the legality of strikes and
lockouts;
(6) Except claims for Employees
Compensation, Social Security, Medicare
[Philhealth] and maternity benefits, all
other claims, arising from employer-
employee relations, including those of
persons in domestic or household service,
involving an amount exceeding five
thousand pesos (P5,000) regardless of
whether accompanied with a claim for
reinstatement. [Art. 224]
(7) Money claims arising out of employer-
employee relationship or by virtue of any
law or contract, involving claims for actual,
moral, exemplary and other forms of
damages, as well as employment
termination of OFWs;
(8) Wage distortion disputes in unorganized
establishments not voluntarily settled by
the parties. [Art. 124]
(9) Enforcement of compromise agreements
when there is non-compliance by any of
the parties. [Art. 233]
(10) Other cases as may be provided by law.
LABOR RELATIONS LABOR LAW
Requisites of LA’s jurisdiction over Money
Claims
(1) Money claims arose from ER-EE relations,
and
(2) Money claims arose from law or contracts
other than a CBA
● Employer-employee relationship is a
jurisdictional requisite, absent of
which, the NLRC has no jurisdiction to
hear and decide the case. [Hawaiian-
Philippine Company v. Gulmatico, G.R.
No. 106231 (1994)]
If money claims do not arise from ER-EE
relations
Regular courts have jurisdiction
If money claims arise from ER-EE relations but
by virtue of implementation of CBA
Voluntary Arbitrator has jurisdiction
“Exclusive and Original” Jurisdiction subject to
Article 275
The voluntary arbitrator or panel of voluntary
arbitrators, upon agreement of the parties,
shall also hear and decide all other labor
disputes including unfair labor practices and
bargaining deadlocks. [Art. 275]
A case under Art 224 may be lodged instead
with a voluntary arbitrator. The policy of the
law is to give primacy to voluntary modes of
settling dispute.
A.1.a.VERSUS REGIONAL DIRECTOR [Art. 129]
Jurisdiction on Money Claims (Labor Arbiter vs.
Regional Director)
(1) A money claim arising from employer-
employee relations, except SSS,
ECC/Medicare [Philhealth] claims, is
within the jurisdiction of a labor
arbiter if:
(2) The claim, regardless of amount, is
accompanied with a claim of
reinstatement; or
(3) The claim exceeds P5,000, whether or
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not there is a claim for reinstatement.
The Regional Director has jurisdiction if:
(1) the money claim is not accompanied
by a claim for reinstatement AND
(2) the claim does not exceed P5,000
PROCEDURE BEFORE LABOR ARBITER
Where to File [§1, Rule IV, 2011 NLRC Rules of
Procedure]
All cases which Labor Arbiters have authority
to hear and decide may be filed in the
Regional Arbitration Branch (RAB) having
jurisdiction over the workplace of the
complainant or petitioner
● Workplace - place or locality where
the employee is regularly assigned at
the time the cause of action arose. It
shall include the place where the
employee is supposed to report back
after a temporary detail, assignment,
or travel.
● In the case of field employees,
ambulant or itinerant workers, their
workplace is (a) where they are
regularly assigned or (b) where they
are supposed to regularly receive their
salaries and wages or work
instructions from, and report the
results of their assignment to their
employers.
Some Rules on Venue
1. Exclusion. Where 2 or more RABs have
jurisdiction over the workplace of the
complainant, that first which acquired
jurisdiction over the case shall exclude
others.
2. Waiver. When venue is not objected to
before the filing of position papers, such
issue shall be deemed waived.
3. Transfer. Venue of an action may be
transferred to a different Regional
Arbitration Branch other than where the
complaint was filed by written agreement
of the parties or when the [NLRC] or [LA]
before whom the case is pending so orders,
LABOR RELATIONS LABOR LAW
upon motion by the proper party in
meritorious cases.
4. OFW Cases. Cases involving overseas
Filipino workers may be filed before the
RAB having jurisdiction over the place
where the complainant resides or where
the principal office of any of the
respondents is situated, at the option of
the complainant.
NATURE OF THE PROCEEDING
Proceedings before the LA are non-litigious.
The Labor Arbiter is not bound by the
technical rules of procedure.
The Labor Arbiter shall use all reasonable
means to ascertain the facts in each speedily
and objectively. [Art. 227]
B. NATIONAL LABOR RELATIONS
COMMISSION (NLRC)
B.1 JURISDICTION
NLRC divisions
(1) Original Jurisdiction: Over petitions for
injunction or temporary restraining order
under Art. 225(e).
(2) Exclusive Appellate Jurisdiction: over all
cases decided by labor arbiters (Art
224[b]) and the DOLE regional directors
under Art 129.
Period of Appeal
(1) Labor Arbiter to NLRC: Decisions, awards,
or ordersof the [LA] shall be final and
executory unless appealed to the [NLRC]
by any or both parties within 10 calendar
days from receipt [thereof]. [Art. 229]
Regional director to NLRC: Decisions of
the Regional director shall be final and
executory unless appealed within 5 days
from receipt thereof. [Art. 129]
Note: If the last day of the reglementary period
falls on a Sunday or a holiday, the last day
shall be the next working day.
Grounds of Appeal [Art. 229]
1) If there is prima facie evidence of
abuse of discretion on the part of the
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Labor Arbiter or Regional Director;
2) If the decision, resolution or order was
secured through fraud or coercion,
including graft and corruption;
3) If made purely on questions of law;
and/or
4) If serious errors in the findings of fact
are raised which, if not corrected,
would cause grave or irreparable
injury to the appellant
It is clear from the NLRC Rules of Procedure
that appeals must be verified and certified
against forum-shopping by the parties-in-
interest themselves. The purpose of
verification is to secure an assurance that the
allegations in the pleading are true and
correct and have been filed in good faith.
[Antonio B. Salenga, et al. v. CA, 2012]
Reinstatement Pending Appeal and Effect of
NLRC reversal of Labor Arbiter’s order of
reinstatement
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated
employee, insofar as the reinstatement aspect
is concerned, shall immediately be executory,
even pending appeal. The employee shall
either be admitted back to work under the
same terms and conditions prevailing prior to
his dismissal or separation or, at the option of
the employer, merely reinstated in the payroll.
The posting of a bond by the employer shall
not stay the execution for reinstatement
provided herein. [Art. 229]
Even if the order of reinstatement of the Labor
Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and
pay the wages of the dismissed employee
during the period of appeal until reversal by
the higher court.
On the other hand, if the employee has been
reinstated during the appeal period and such
reinstatement order is reversed with finality,
the employee is not required to reimburse
whatever salary he received for he is entitled
to such, more so if he actually rendered
services during the period. [Garcia v. Philippine
Airlines, Inc., G.R. No. 164856 (2009)]
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LABOR LAW
Remedies
Requisites for Perfection of Appeal to the Court
of Appeals
[Rule VI, 2011 NLRC Rules of Procedure]
(1) The appeal shall be:
● Filed within the reglementary period;
● Verified by the appellant himself in
accordance with §4, Rule 7 of the
Rules of Court;
● In the form of a memorandum of
appeal which shall state the grounds
relied upon and the arguments in
support thereof, the relief prayed for,
and with a statement of the date the
appellant received the appealed
decision, resolution or order;
● In three (3) legibly typewritten or
printed copies; and
● Accompanied by (a) proof of payment
of the required appeal fee; (b) posting
of a cash or surety bond as provided in
Section 6 of the NLRC Rules; and (c)
proof of service upon the other parties.
(2) A mere notice of appeal without
complying with the other requisites
aforestated shall not stop the running of
the period for perfecting an appeal.
(3) The appellee may file with the Regional
Arbitration Branch or Regional Office
where the appeal was filed, his answer or
reply to appellant’s memorandum of
appeal, not later than 10 calendar days
from receipt thereof. Failure on the part of
the appellee who was properly furnished
with a copy of the appeal to file his answer
or reply within the said period may be
construed as a waiver on his part to file the
same.
(4) Subject to the provisions of Article [225] of
the Labor Code, once the appeal is
perfected in accordance with these Rules,
the Commission shall limit itself to
reviewing and deciding only the specific
issues that were elevated on appeal.
Certified cases
Definition
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Certified labor disputes are cases certified to
the Commission for compulsory arbitration
under Art. 278(g) of the Labor Code. [§2, The
2011 NLRC Rules and Procedures]
Art. 278(g) - When, in his opinion, there exists
a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable
to the national interest, the Secretary of Labor
and Employment may assume jurisdiction
over the dispute and decide it or certify the
same to the Commission for compulsory
arbitration. Such assumption or certification
shall have the effect of automatically
enjoining the intended or impending strike or
lockout as specified in the assumption or
certification order.
Function of the NLRC
When sitting in a compulsory arbitration
certified to by the Secretary of Labor, the NLRC
is not sitting as a judicial court but as an
administrative body charged with the duty to
implement the order of the Secretary. Its
function only is to formulate the terms and
conditions of the CBA and cannot go beyond
the scope of the order. Moreover, the
Commission is further tasked to act within the
earliest time possible and with the end in view
that its action would not only serve the
interests of the parties alone, but would also
have favorable implications to the community
and to the economy as a whole. This is the
clear intention of the legislative body in
enacting Art. 278 paragraph (g) of the Labor
Code, as amended by Section 27 of R.A. 6175
[Union of Filipino Employees v. NLRC, G.R. No.
91025 (1990)]
Effects of Certification
1. Upon certification, the intended or
impending strike or lockout
automatically enjoined, notwithstanding
the filing of any motion for reconsideration
of the certification order nor the non-
resolution of any such motion which may
have been duly submitted to the Office of
the Secretary of Labor and Employment.
2. If a work stoppage has already taken place
at the time of the certification, all striking
LABOR RELATIONS LABOR LAW
or locked out employees shall
immediately return to work and the
employer shall immediately resume
operations and readmit all workers under
the same terms and conditions prevailing
before the strike or lockout.
3. All cases between the same parties,
except where the certification order
specifies otherwise the issues submitted
for arbitration which are already filed or
may be filed, and are relevant to or are
proper incidents of the certified case, shall
be considered subsumed or absorbed by
the certified case, and shall be decided by
the appropriate Division of the
Commission.
4. The parties to a certified case, under pain
of contempt, shall inform their counsels
and the Division concerned of all cases
pending with the Regional Arbitration
Branches and the Voluntary Arbitrators
relative or incident to the certified case
before it.
5. When a certified labor dispute involves a
business entity with several workplaces
located in different regions, the Division
having territorial jurisdiction over the
principal office of the company shall
acquire jurisdiction to decide such labor
dispute; unless the certification order
provides otherwise. [Section 3, 2011 NLRC
Rules and Procedures]
Effects of Defiance
Non-compliance with the certification order of
the SOLE shall be considered as an illegal act
committed in the course of the strike or
lockout and shall authorize the Commission to
enforce the same under pain of immediate
disciplinary action, including dismissal or loss
of employment status or payment by the
locking-out employer of backwages, damages
is and/or other affirmative relief, even criminal
prosecution against the liable parties.
The Commission may also seek the assistance
of law enforcement agencies to ensure
compliance and enforcement of its orders and
resolutions. [§ 4, Rule VIII, 2011 NLRC Rules
and Procedures]
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Strict Compliance of Assumption and
Certification Orders
The Secretary's assumption and certification
orders being executory in character are to be
strictly complied with by the parties even
during the pendency of a petition questioning
their validity for this extraordinary authority
given by law to the Secretary of Labor is
"aimed at arriving at a peaceful and speedy
solution to labor disputes, without
jeopardizing national interests." [Union of
Filipino Employees v. NLRC, G.R. No. 91025
(1990)]
Procedure in certified cases
(a) When there is no need to conduct a
clarificatory hearing, the Commission
shall resolve all certified cases within 30
calendar days from receipt by the
assigned Commissioner of the complete
records, which shall include the position
papers of the parties and the order of the
SOLE denying the motion for
reconsideration of the certification order, if
any.
(b) Where a clarificatory hearing is needed,
the Commission shall, within 5 calendar
days from receipt of the records, issue a
notice to be served on the parties through
the fastest means available, requiring
them to appear and submit additional
evidence, if any. All certified cases shall be
resolved by the Commission within 60
calendar days from receipt of the
complete records by the assigned
Commissioner.
(c) No motion for extension or postponement
shall be entertained. [§5, Rule VIII, 2011
NLRC Rules and Procedures]
Execution of Judgment
Upon issuance of the entry of judgment, the
Commission motu propio or upon motion by
the proper party, may cause the execution of
the judgment in the certified case. [§ 6, Rule
VIII, 2011 NLRC Rules and Procedures]
C. BUREAU OF LABOR RELATIONS
(BLR)
LABOR RELATIONS LABOR LAW
C.1. JURISDICTION
Art. 232 - The Bureau of Labor Relations and
the Labor Relations Divisions in the regional
offices of the Department of Labor and
Employment shall have original and exclusive
authority to act, at their own initiative or upon
request of either or both parties, on all inter-
union and intra-union conflicts, and all
disputes, grievances or problems arising from
or affecting labor-management relations in
all workplaces whether agricultural or non-
agricultural, except those arising from the
implementation or interpretation of collective
bargaining agreements which shall be the
subject of grievance procedure and/or
voluntary arbitration.
The Bureau shall have fifteen (15) calendar
days to act on labor cases before it, subject to
extension by agreement of the parties.
Original Jurisdiction
Decisions of the BLR through its original
jurisdiction are appealable to the Secretary of
Labor and Employment [§15, Rule XI, Book V].
Appellate Jurisdiction
BLR has the power to review the decisions of
the Regional Director [§15, Rule XI, Book V].
Decisions rendered through its appellate
power are final and executory [§20, Rule XI,
Book V]. Hence, the remedy of the aggrieved
party is to seasonably avail of the special civil
action of certiorari under Rule 65 of the Rules
of Court (“no appeal, nor plain, speedy and
adequate remedy in the ordinary course of law”
[§1, Rule 65, Rules of Court]).
D. NATIONAL CONCILIATION AND
MEDIATION BOARD
Nature of proceedings
Conciliation and mediation is non-
litigious/non-adversarial, less expensive, and
expeditious. Under this informal set-up, the
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parties find it more expedient to fully ventilate
their respective positions without running
around with legal technicalities and, in the
course thereof, afford them wider latitude of
possible approaches to the problem.
D.1. CONCILIATION VS. MEDIATION
Conciliation
A mild form of intervention by a neutral third
party, the Conciliator-Mediator, relying on his
persuasive expertise, takes an active role in
assisting parties by trying to keep disputants
talking, facilitating other procedural niceties,
carrying messages back and forth between the
parties, and generally being a good fellow who
tries to keep things calm and forward-looking
in a tense situation.
Mediation
A mild intervention by a neutral third party,
the Conciliator-Mediator, wherein the CM
advises the parties or offers solutions or
alternatives to the problems with the end in
view of assisting them towards voluntarily
reaching their own mutually acceptable
settlement of the dispute.
Conciliation Mediation
C-M facilitates C-M assists parties to
disputants to keep voluntarily reach
things calm, delivers mutually acceptable
messages back and settlement.
forth between the
parties.
D.2. PREVENTIVE MEDIATION
Preventive mediation case — refers to the
potential or brewing labor dispute which is the
subject of a formal or informal request for
conciliation and mediation assistance sought
by either or both parties in order to remedy,
contain or prevent its degeneration into a full
blown dispute through amicable settlement.
E. DOLE REGIONAL DIRECTORS
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LABOR LAW
E.1. RECOVERY/ADJUDICATORY POWER
Small money claims
Art. 129 - Recovery of wages, simple money
claims and other benefits. —Upon complaint of
any interested party, the Regional Director of
the Department of Labor and Employment or
any of the duly authorized hearing officers of
the Department is empowered, through
summary proceeding and after due notice, to
hear and decide any matter involving the
recovery of wages and other monetary claims
and benefits, including legal interest, owing
to an employee or person employed in
domestic or household service or househelper
under this Code, arising from employer-
employee relations: Provided, That such
complaint does not include a claim for
reinstatement: Provided, further, That the
aggregate money claims of each employee or
househelper do not exceed five thousand
pesos (P5,000).
The Regional Director or hearing officer shall
decide or resolve the complaint within thirty
(30) calendar days from the date of the filing
of the same.
Any sum thus recovered on behalf of any
employee or househelper pursuant to this
Article shall be held in a special deposit
account by, and shall be paid, on order of the
Secretary of Labor and Employment or the
Regional Director directly to the employee or
househelper concerned.
Any such sum not paid to the employee or
househelper, because he cannot be located
after diligent and reasonable effort to locate
him within a period of three (3) years, shall be
held as a special fund of the Department of
Labor and Employment to be used exclusively
for the amelioration and benefit of workers.
The Secretary of Labor and Employment or
his duly authorized representative may
supervise the payment of unpaid wages and
other monetary claims and benefits,
UP LAW BOC LABOR RELATIONS
including legal interest, found owing to any
employee or househelper under this Code.
NOTE: See RA 10361 (Kasambahay Law) on
settlement of disputes.
Sec. 37, RA 10361. Mechanism for Settlement of
Disputes. – All labor-related disputes shall be
elevated to the DOLE Regional Office having
jurisdiction over the workplace without
prejudice to the filing of a civil or criminal
action in appropriate cases. The DOLE
Regional Office shall exhaust all conciliation
and mediation efforts before a decision shall
be rendered.
Ordinary crimes or offenses committed under
the Revised Penal Code and other special
penal laws by either party shall be filed with
the regular courts.
F. DOLE SECRETARY
F.1 VISITORIAL AND ENFORCEMENT
POWERS
Art. 128 - The Secretary of Labor and
Employment or his duly authorized
representatives, including labor regulation
officers, shall have access to employer’s
records and premises at any time of the day or
night whenever work is being undertaken
therein, and the right to copy therefrom, 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 this Code and of
any labor law, wage order or rules and
regulations issued pursuant thereto.
Notwithstanding the provisions of Articles 129
and [224] of this Code to the contrary, and in
cases where the relationship of employer-
employee still exists, the Secretary of Labor
and Employment or his duly authorized
representatives shall have the power to issue
compliance orders to give effect to the labor
PAGE 226 OF 235
LABOR LAW
standards provisions of this Code and other
labor legislation based on the findings of labor
employment and enforcement officers or
industrial safety engineers made in the course
of inspection. 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.
Art. 37. Visitorial Power. - The Secretary of
Labor or his duly authorized representatives
may, at any time, inspect the premises, books
of accounts and records of any person or entity
covered by this Title, require it to submit
reports regularly on prescribed forms, and act
on violation of any provisions of this Title.
Art. 289 - Visitorial Power - The Secretary of
Labor and Employment or his duly authorized
representative is hereby empowered to inquire
into the financial activities of legitimate labor
organizations upon the filing of a complaint
under oath and duly supported by the written
consent of at least twenty percent (20%) of the
total membership of the labor organization
concerned and to examine their books of
accounts and other records to determine
compliance or non-compliance with the law
and to prosecute any violations of the law and
the union constitution and by-laws: Provided,
That such inquiry or examination shall not be
conducted during the sixty (60)-day freedom
period nor within the thirty (30) days
immediately preceding the date of election of
union officials.
F.2 POWER TO SUSPEND/EFFECTS OF
TERMINATION
Art. 292(b), last sentence - The Secretary of the
Department of Labor and Employment may
UP LAW BOC LABOR RELATIONS
suspend the effects of the termination
pending resolution of the dispute in the event
of a prima facie finding by the appropriate
official of the Department of Labor and
Employment before whom such dispute is
pending that the termination may cause a
serious labor dispute or is in the
implementation of a mass lay-off.
Assumption of jurisdiction
Art. 278(g) - When in his opinion, there exist a
labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to the
national interest, the SOLE may assume
jurisdiction over the dispute and decide it or
certify the same to the Commission for
compulsory arbitration.
Appellate jurisdiction
a. Orders issued by the duly authorized
representative of the SOLE under Art. 128
may be appealed to the latter.
b. Denial of application for union registration
or cancellation of union registration
originally rendered by the BLR may be
appealed to the SOLE (if originally
rendered by the Regional Office, appeal
should be made to the BLR)
Decisions of the Med-Arbiter in certification
election cases are appealable to the SOLE [Art.
272] (decisions of med-arbiters in intra-union
disputes are appealable to the BLR [§15, Rule
XI, Book V])
Voluntary arbitration powers
Art. 278(h) - Before or at any stage of the
compulsory arbitration process, the parties
may opt to submit their dispute to voluntary
arbitration.
Art. 278(i) - The Secretary of Labor and
Employment […] shall decide or resolve the
dispute […].
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LABOR LAW
G. VOLUNTARY ARBITRATOR
G.1. JURISDICTION
Grievance is any question by either the ER or
the union regarding the interpretation or
application of the CBA or company personnel
policies or any claim by either party that the
other party is violating any provisions of the
CBA or company personnel policies.
It is a complaint or dissatisfaction arising from
the interpretation or implementation of the
CBA and those arising from interpretation or
enforcement of personnel policies.
Grievance Machinery
It refers to the mechanism for the adjustment
and resolution of grievances. It is part of the
continuing process of collective bargaining.
Exclusive and Original Jurisdiction Over
Grievances
The VA or panel of VAs shall have original and
exclusive jurisdiction to hear and decide all
unresolved grievances.
Violations of a CBA, except those which are
gross in character, shall no longer be treated
as ULP and shall be resolved as grievances
under the CBA.
Note: Gross violations of CBA shall mean
flagrant and/or malicious refusal to comply
with the economic provisions of such
agreement. [Art. 274]
Art. 274 - The Commission, its Regional
Offices and the Regional Directors of the
DOLE shall not entertain disputes, grievances
or matters under the exclusive and original
jurisdiction of the Voluntary Arbitrator or
panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the
grievance machinery or Voluntary Arbitration
provided in the Collective Bargaining
Agreement.
Other Labor Disputes
UP LAW BOC LABOR RELATIONS
Art. 275 - The VA or panel of VAs, upon
agreement of the parties, shall also hear and
decide all other labor disputes including ULP
and bargaining deadlocks.
Even if the specific issue brought before the
arbitrators merely mentioned the question of
“whether an employee was discharged for just
cause,” they could reasonably assume that
their powers extended beyond the
determination thereof to include the power to
reinstate the employee or to grant back wages.
In the same vein, if the specific issue brought
before the arbitrators referred to the date of
regularization of the employee, law and
jurisprudence gave them enough leeway as
well as adequate prerogative to determine the
entitlement of the employees to higher
benefits in accordance with the finding of
regularization. [Manila Pavilion Hotel, etc. vs.
Henry Delada, G.R. No. 189947 (2011)]
PROCEDURE
[Omnibus Rules, Book V, Rule XI]
Hearing
All parties to the dispute shall be entitled to
attend the arbitration proceedings. The
attendance of any third party or the exclusion
of any witness from the proceedings shall be
determined by the VA or panel of Vas. Hearing
may be adjourned for cause or upon
agreement by the parties.
Days to render an award/decision
Unless the parties agree otherwise, it shall be
mandatory for the VA or panel of VAs to render
an award or decision within 20 calendar days
from the date of submission of the dispute to
voluntary arbitration.
Form of award/decision
The award or decision of the VA or panel of
VAs must state in clear, concise and definite
terms the facts, the law and/contract upon
which it is based.
Finality
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LABOR LAW
It shall be final and executory after 10 calendar
days from the receipt of the copy of the award
or decision by the parties.
NOTE: See Page 39 on availability of motion
for reconsideration.
Execution of award/decision
Art. 275 - The VA or panel of VAs, upon
agreement of the parties, shall also hear and
decide all other labor disputes including ULP
and bargaining deadlocks.
Upon motion of any interested party, the
Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region
where the movant resides, in case of the
absence or incapacity of the Voluntary
Arbitrator or panel of Voluntary Arbitrators,
for any reason, may issue a writ of execution
requiring either the sheriff of the Commission
or regular courts or any public official whom
the parties may designate in the submission
agreement to execute the final decision, order
or award. [Art. 276]
G.2. REMEDIES
The decision of a Voluntary Arbitrator or panel
of Voluntary Arbitrators is appealable by
ordinary appeal under Rule 43 of the Rules of
Civil Procedure directly to the Court of Appeals.
[AMA Computer College-Santiago City, Inc. v.
Nacino, G.R. No. 162739 (2008)]
NOTE: See Page 39 on availability of motion
for reconsideration.
H. COURT OF APPEALS
H.1 APPEAL VIA RULE 65, RULES OF COURT
Section 1. Petition for certiorari. — When any
tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or
in excess its or his jurisdiction, or with grave
abuse of discretion amounting to lack or
excess of jurisdiction, and there is no appeal,
or any plain, speedy, and adequate remedy in
the ordinary course of law, a person aggrieved
thereby may file a verified petition in the
UP LAW BOC
proper court, alleging the facts with certainty
and praying that judgment be rendered
annulling or modifying the proceedings of
such tribunal, board or officer, and granting
such incidental reliefs as law and justice may
require.
The petition shall be accompanied by a
certified true copy of the judgment, order or
resolution subject thereof, copies of all
pleadings and documents relevant and
pertinent thereto, and a sworn certification of
non-forum shopping as provided in the third
paragraph of section 3, Rule 46.
Section 2.Petition for prohibition. — When the
proceedings of any tribunal, corporation,
board, officer or person, whether exercising
judicial, quasi-judicial or ministerial functions,
are without or in excess of its or his jurisdiction,
or with grave abuse of discretion amounting to
lack or excess of jurisdiction, and there is no
appeal or any other plain, speedy, and
adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a
verified petition in the proper court, alleging
the facts with certainty and praying that
judgment be rendered commanding the
respondent to desist from further proceedings
in the action or matter specified therein, or
otherwise granting such incidental reliefs as
law and justice may require.
The petition shall likewise be accompanied by
a certified true copy of the judgment, order or
resolution subject thereof, copies of all
pleadings and documents relevant and
pertinent thereto, and a sworn certification of
non-forum shopping as provided in the third
paragraph of section 3, Rule 46.
Section 3.Petition for mandamus. — When any
tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act
which the law specifically enjoins as a duty
resulting from an office, trust, or station, or
unlawfully excludes another from the use and
LABOR RELATIONS LABOR LAW
enjoyment of a right or office to which such
other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary
course of law, the person aggrieved thereby
may file a verified petition in the proper court,
alleging the facts with certainty and praying
that judgment be rendered commanding the
respondent, immediately or at some other
time to be specified by the court, to do the act
required to be done to protect the rights of the
petitioner, and to pay the damages sustained
by the petitioner by reason of the wrongful
acts of the respondent.
I. SUPREME COURT
[A]ll references in the amended Section 9 of
B.P. No. 129 to supposed appeals from the
NLRC to the Supreme Court are interpreted
and hereby declared to mean and refer to
petitions for certiorari under Rule 65.
Consequently, all such petitions should hence
forth be initially filed in the Court of Appeals in
strict observance of the doctrine on the
hierarchy of courts as the appropriate forum
for the relief desired. [St. Martin Funeral Home
vs. NLRC, 1998]
I.1. RULE 45, RULES OF COURT
Section 1. Filing of petition with Supreme
Court. — A party desiring to appeal by
certiorari from a judgment or final order or
resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or
other courts whenever authorized by law, may
file with the Supreme Court a verified petition
for review on certiorari. The petition shall raise
only questions of law which must be distinctly
set forth.
Appeal from CA to SC should be under Rule 45
(Petition for Review on Certiorari) and not Rule
65 (Special Civil Action for Certiorari). [Sea
Power Shipping Enterprises, Inc. vs. CA, 2001]
Since the Court of Appeals had jurisdiction
over the petition under Rule 65, any alleged
errors committed by it in the exercise of its
jurisdiction would be errors of judgment which
are reviewable by timely appeal and not by a
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special civil action of certiorari. If the
aggrieved party fails to do so within the
reglementary period, and the decision
accordingly becomes final and executory, he
cannot avail himself of the writ of certiorari, his
predicament being the effect of his deliberate
inaction. [Tirazona v Phil EDS Techno-Service
Inc, 2009]
J. PRESCRIPTION OF ACTIONS
Art. 207 - No claim for compensation shall be
given due course unless said claim is filed with
the System [SSS or GSIS, as the case may be]
within three (3) years from the time the cause
of action accrued. [As amended by Section 5,
Presidential Decree No. 1921]
J.1. MONEY CLAIMS
Art. 306. Money claims. – All money claims
arising from employer-employee relations
accruing during the effectivity of this Code
shall be filed within three (3) years from the
time the cause of action accrued; otherwise
they shall be forever barred.
All money claims accruing prior to the
effectivity of this Code shall be filed with the
appropriate entities established under this
Code within one (1) year from the date of
effectivity, and shall be processed or
determined in accordance with the
implementing rules and regulations of the
Code; otherwise, they shall be forever barred.
Workmen's compensation claims accruing
prior to the effectivity of this Code and during
the period from November 1, 1974 up to
December 31, 1974, shall be filed with the
appropriate regional offices of the
Department of Labor not later than March 31,
1975; otherwise, they shall forever be barred.
The claims shall be processed and adjudicated
in accordance with the law and rules at the
time their causes of action accrued.
The Labor Code has no specific provision on
when a monetary claim accrues. Thus, again
LABOR RELATIONS LABOR LAW
the general law on prescription applies. Article
1150 of the Civil Code provides that:
Article 1150. The time for prescription for all
kinds of actions, when there is no special
provision which ordains otherwise, shall be
counted from the day they may be brought.
The day the action may be brought is the day
a claim started as a legal possibility. In the
present case, the day came when petitioner
learned of Asiakonstrukt’s deduction from his
salary of the amount of advances he had
received but had, by his claim, been settled,
the same having been reflected in his payslips,
hence, it is assumed that he learned of it at the
time he received his monthly paychecks.
[Anabe v. Asian Const, et al., 2009]
J.2. ILLEGAL DISMISSAL
In illegal dismissal cases, the employee
concerned is given a period of four years from
the time of his dismissal within which to
institute a complaint. This is based on Article
1146 of the New Civil Code which states that
actions based upon an injury to the rights of
the plaintiff must be brought within four years.
[Victory Liner, Inc. v. Race, 2007]
Art. 1146, Civil Code. The following actions
must be instituted within four years:
1) Upon an injury to the rights of the
plaintiff;
2) Upon a quasi-delict;
However, when the action arises from or out of
any act, activity, or conduct of any public
officer involving the exercise of powers or
authority arising from Martial Law including
the arrest, detention and/or trial of the
plaintiff, the same must be brought within one
(1) year. [As amended by PD No. 1755, Dec. 24,
1980.]
J.3. UNFAIR LABOR PRACTICE
Art. 305. Offenses penalized under this Code
and the rules and regulations issued pursuant
thereto shall prescribe in three (3) years. All
unfair labor practice arising from Book V shall
be filed with the appropriate agency within
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UP LAW BOC LABOR RELATIONS
one (1) year from accrual of such unfair labor
practice; otherwise, they shall be forever
barred.
Art. 258. Concept of unfair labor practice and
procedure for prosecution thereof. – […] No
criminal prosecution under this Title may be
instituted without a final judgment finding
that an unfair labor practice was committed,
having been first obtained in the preceding
paragraph. During the pendency of such
administrative proceeding, the running of the
period of prescription of the criminal offense
herein penalized shall be considered
interrupted: Provided, however, that the final
judgment in the administrative proceedings
shall not be binding in the criminal case nor be
considered as evidence of guilt but merely as
proof of compliance of the requirements
therein set forth. [As amended by Batas
Pambansa Bilang 70, May 1, 1980 and later
further amended by Section 19, Republic Act
No. 6715, March 21, 1989]
J.4. OFFENSES PENALIZED BY THE LABOR
CODE AND IRR ISSUED PURSUANT
THERETO
PAGE 231 OF 235
LABOR LAW
Art. 305 - Offenses penalized under this Code
and the rules and regulations issued pursuant
thereto shall prescribe in three (3) years.
J.5. ILLEGAL RECRUITMENT
§7, RA 8040. Prescription. Illegal recruitment
cases under this Rule shall prescribe in five (5)
years; Provided, however, that illegal
recruitment cases involving economic
sabotage shall prescribed in twenty (20) years.
J.6. Kasambahay Law
§41 - All existing arrangements between a
domestic worker and the employer shall be
adjusted to conform to the minimum
standards set by this Act within a period of
sixty (60) days after the effectivity of this
Act: Provided, That adjustments pertaining to
wages shall take effect immediately after the
determination and issuance of the appropriate
wage order by the RTWPBs: Provided,
further, That nothing in this Act shall be
construed to cause the diminution or
substitution of any benefits and privileges
currently enjoyed by the domestic worker
hired directly or through an agency.
UP LAW BOC LABOR RELATIONS LABOR LAW

PROCEDURE FOR UNION REGISTRATION

Filing of application

If independent union, chartered local or If federation, national union or workers'

workers' association association operating in more than one
region

File with Regional Office File with BLR

Act within 1 day from receipt Act within 30 days

Approve application Deny application for failure to comply with

requirements

issue certificate of registration Within the day, notify applicant of

requirements and order completion within
30 days

Completed Not completed

Issue certificate of Denial without prejudice

registration

Appeal within 10 days from receipt of notice

to BLR/SOLE

BLR/SOLE to decide within 20 days from

receipt of records of case

Decision can be appealed to CA via Rule 65

CA decision can be appealed to SC via Rule

45

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 UP LAW BOC LABOR STANDARDS LABOR LAW

SUMMARY OF UNION REGISTRATION

Worker’s association
National Union or
Independent Union Chartered Local Worker’s Association operating in more than
Federation
one region
Requirements (1) Name of labor 1) Name of (1) Charter 1) Name of Same as worker’s
for union and its federation and its certificate issued by association and its association
application principal address principal addresses national union or principal address
+
Name of its officers 2) Name of its federation Name of officers and
and their respective officers and their their respective 7) Resolution of
addresses respective addresses addresses membership of each
Other requirements (to
3) Minutes of member association,
(2) Approximate be entitled to all other 2) Minutes of
organizational duly approved by its
number of rights and privileges of organizational
meetings and list of board of directors
employees in the LLO) meetings and list of
participating
bargaining unit participating
employees (a) Names of
where it seeks to members
4) Annual financial local/chapter’s
operate 3) Annual financial
reports (if it has been officers and their
(3) Statement that it reports (if it has been
in existence for more addresses
is not a chartered in existence for more
than one year) or (b) Principal office of
local of any than one year) or
statement that no local/chapter
federation or nat’l statement that no
collection has been (c) Chapter’s CBL, or
union collection has been
made statement that
(4) Minutes of made
5) CBL, minutes of chapter has adopted
organizational 4) CBL, minutes its
its adoption and the CBL of federation
meetings and list of of adoption and
ratification, and list or national union
participating ratification, list of
of participating (d) Certification
employees participating
employees (list may under oath by
(5) Name of all its members, and date
be dispensed with if secretary and
members comprising of ratification (unless
ratification was done attestation by
at least 20% of ratification was done
during President
employees in BU during
organizational

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UP LAW BOC LABOR STANDARDS LABOR LAW

(6) Annual financial meeting) organizational

reports (if it has been 6) Resolution of meeting)
in existence for more affiliation of at least 5) Registration fee
than 1 year) or 10 LLOs (P50.00)
statement that no (independent or 6) Certification
collection has been chartered locals) under oath by
made which are the SEBA Secretary or
(7) CBL, minutes of in their BU treasurer and
its adoption and 7) Names and attestation by
ratification, and list addresses of President
of participating EEs companies where
(which can be affiliates operate and
dispensed with if CBL list of all members of
adopted during affiliates in each
organizational company involved
meeting) 8) Registration fee
(8) Registration Fee (P50.00)
(P50.00) 9) Certification
(9) Certification under oath by
under oath by secretary or treasurer
secretary or treasurer and attestation by
and attestation by President of all the
President of all the requirements
requirements

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UP LAW BOC LABOR STANDARDS LABOR LAW

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