LABOR LAW AND SOCIAL LEGISLATION

LABOR LAW Directly affects Governs effects of

employment (e.g. employment (e.g.
FUNDAMENTAL PRINCIPLES AND POLICIES wages) compensation for
injuries)
LABOR LAW
Refers to labor statutes Refers to Social
like Labor Relations Security Laws
Labor
Law and Labor
Standards Law
It is the exertion by human beings of physical or
mental efforts, or both, towards the production of
goods and services. (Poquiz, 2012, p. 1) Focuses on the rights of Focuses on the
the worker in the particular part of the
The State affirms labor as a primary social workplace society or segment
economic force. It shall protect the rights of thereof
workers and promote their welfare. (1987
Constitution, Art. II, Sec. 18)
NOTE: Labor laws are social legislation, but not all
Labor Law social legislations are labor laws. In relation to each
other, social legislation as a concept is broader,
The law that governs the rights and duties of the labor laws narrower. (Duka, Labor Laws and Social
employer (Er) and employees (Ee) with respect to: Legislation, A Barrister’s Companion, 2016, p. 2)

1. The terms and conditions of employment, and Protection to labor

2. Labor disputes arising from collective
bargaining or other concerted activity In affording full protection to labor, this Court must
respecting such terms and conditions. ensure equal work opportunities regardless of sex,
race or creedgiving maximum aid and protection to
Classification of Labor Laws labor, promoting their welfare and reaffirming it as
a primary social economic force in furtherance of
1. Labor Standards – The minimum social justice and national development. (Angelina
requirements prescribed by existing laws, Francisco v. NLRC. G.R. No. 170087, August 31, 2006).
rules and regulations as to the terms and
conditions of employment relating to wages, Limitation to Protection of Labor
hours of work, cost-of-living allowance, and
other monetary and welfare benefits, including 1. Recognition of management rights. (St.
occupational, safety and health standards. Luke’s Medical Center Ees Ass’n v. NLRC, G.R. No.
(Maternity Children’s Hospital vs. Secretary of 162053, March 7, 2007)
Labor, G.R. No. 78909, June 30, 1989) 2. Principle of Non-Oppression. (NCC, Art.
1701)
e.g. wages, hours of work, 13th month pay
DECLARATION OF BASIC POLICY
2. Labor Relations – Defines and regulates the
status, rights and duties, and the institutional The State shall:
mechanisms that govern the individual and
collective interactions of Ers, Ees or their 1. Afford full protection to labor;
representatives. 2. Promote full employment;
3. Ensure equal work opportunities regardless of
e.g. Collective bargaining negotiations sex, race, or creed;
4. Regulate the relations between workers and
Social Legislation Er; and,
5. Assure the rights of workers to self-
All laws passed by the State to promote public organization, collective bargaining, security of
welfare. Laws that provide particular kinds of tenure, and just and humane conditions of
protection or benefits to society or segments work. (LC, Art. 3)
thereof in furtherance of social justice.
SOURCES OF LABOR LAWS
It includes statutes intended to enhance the welfare
of the people even where there is no Er-Ee 1. Constitution;
relationship. 2. Labor Code and other related special
legislation (including their respective IRR);
e.g. GSIS Law, SSS Law, Philhealth benefits, 3. Contracts;
Agrarian Laws 4. CBA;
5. Company practices; and,
Labor Legislation vs. Social Legislation 6. Company policies;

CONSTRUCTION IN FAVOR OF LABOR

Labor Legislation Social Legislation
All doubts in the implementation and
interpretation of the provisions of this Code,

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1 ACADEMICS COMMITTEE 2018
 UST LAW PRE-WEEK NOTES 2018
including its implementing rules and regulations,
shall be resolved in favor of labor. (LC, Art. 4)
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. (NCC, Art. 1702)
But protection to labor does not mean oppression
or destruction of capital. The Er’s act will be
sustained when it is in the right. (Eastern Shipping
Lines v. POEA, G.R. No. 76633, October 18, 1988)
Compassionate justice
In calling for protection to labor, the Constitution
does not condone wrong doing by the employee.
However, it urges a moderation of the sanctions
that maybe applied to him in the light of the many
disadvantages that weigh heavily on him like an
albatross on his neck.
It is disregarding rigid rules and giving due weight
to all equities of the case. (Gandara Mill Supply and
Milagros Sy v. NLRC and Silvestre Germano, G.R. No.
126703, December 29, 1998)
Q: What is the quantum of evidence required in
labor case? (2012 BAR)
A: In labor cases, as in other administrative and
quasi-judicial proceedings, the quantum of proof
necessary is substantial evidence, or such amount
of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion.
(Valencia v. Classique Vinyl Products Corporation,
G.R. No. 206390, January 30, 2017)
SOCIAL JUSTICE
The State shall promote social justice in all phases
of national development (1987 Constitution, Art. II,
Sec. 10).
Q: May social justice as a guiding principle in
labor law be so used by the courts in sympathy
with the working man if it collides with the
Equal Protection clause of the Constitution?
(2003 BAR)
A: YES. The State is bound under the Constitution to
afford full protection to Labor. When conflicting
interests collide, they are to be weighed on the
scales of social justice (Fuentes v. NLRC, 266 SCRA
24, January 2, 1997)
Limitations in invoking the principle of social
justice
1. Social justice does not champion division of
property or equality of economic status. (Guido
v. Rural Progress Adm, L-2089, October 31,
1949) It should not tolerate usurpation of
property, public or private.
2. May only protect the laborers who come to
court with clean hands (Phil. Long Distance
Telephone Co. v. NLRC, G.R. No. 80609, August
23, 1988) and their motives blameless (Gustilo
v. Wyeth Phils., G.R. No. 149629, October 4,
2004).
2 ACADEMICS COMMITTEE 2018
3. Never result to an injustice or oppression of the
Er (Phil. Geothermal Inc. v. NLRC, G.R. No.
106370, September 8, 1994).
4. If it is used to shield wrongdoings. It cannot be
permitted to be the refuge of scoundrels (PNCC
v. NLRC, G.R. No. 83320, Feb. 9, 1989).
CONTRACT OF LABOR
It is a consensual, nominate, principal, and
commutative contract whereby one person, called
the employer, compensates another, called the
laborer, worker or employee, for the latter’s
service. It is a relationship impressed with public
interest in keeping with our constitutional policy of
social justice.
Labor Contracts are Subject to Police Power of
the State
Labor contracts are placed on a higher plane than
ordinary contracts; these are imbued with public
interest (Leyte Geothermal Power Progressive
Employees Union-ALU-TUCP v. Philippine National
Oil Company-Energy Development Corporation, G.R.
No. 170351, March 30, 2011).
The relation between the capital and the labor are
not merely contractual. They are so impressed with
public interest that labor contracts must yield to the
common good (Art. 1700, NCC).
Prohibitions on Contract of Labor
1. No law impairing the obligation of contracts shall
be passed. (1987 Constitution, Art. III, Sec. 10)
2. No involuntary servitude in any form shall exist
except as a punishment for a crime whereof the
party shall have been duly convicted. [1987
Constitution, Art. III, Sec. 18(2)]
3. No contract which practically amounts to
involuntary servitude, under any guise
whatsoever, shall be valid. (NCC, Art. 1703)
The CBA Operating as a Source of Labor Law
The CBA is the norm of conduct between ER and
EEs and compliance therewith is mandated by the
express policy of the law. (DOLE Philippines, Inc.,
v. PAMAO-NFL, G.R. No. 146650, January 13, 2003, in
citing E. Razon, Inc. v. Secretary of Labor and
Employment, G.R. No. 85867, May 13, 1993)
Past Company Practices as a Source of Labor
Law
The following requisites must be present:
1. Voluntary institution by the employer without
any legal compulsion;
2. Should have been done over a long period of
time; and,
3. Must be shown to have been consistent and
deliberate.
NOTE: No passage of time is required for a
company policy to become a source of labor law.
OTHER CONSTITUTIONAL PROVISIONS
Constitutional Mandates on Labor Law
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 LABOR LAW AND SOCIAL LEGISLATION
1. Article II – Declaration of Principles and
State Policies
Sec. 9 – Promotion of full-employment.
Sec. 10 – Promotion of social justice.
Sec. 18 – Labor as a primary social economic force.
Sec. 20 – Indispensable role of the private sector.
2. Article III – Bill of Rights
Sec. 4 - Right of the people peaceably to assemble
and petition the government for redress of
grievances.
Sec. 8 – Right to form unions, associations, or
societies
Law: EO No. 180 S. 1987 providing guidelines for
the exercise of the right to organize of government
employees, creating a Public Sector Labor
Management Council and for other purposes.
Sec. 10 – Impairment of the obligation of contracts
Sec. 16 – Right to a speedy disposition of cases
Sec. 18 (2) – Involuntary servitude
3. Article XIII – Social Justice and Human
Rights
Sec. 2 – Promotion of social justice
Sec. 3 –Full protection to labor
Sec. 13 – Establishment of special agency for
disabled persons
Law: RA 7277 Magna Carta for Disabled Person
Sec. 14 – Protection of working women
Law: RA 9710 Magna Carta of Women
Q: Are the constitutional provisions on labor
self-executing?
A: The constitutional mandates of protection to
labor and security of tenure may be deemed as self-
executing in the sense that these are automatically
acknowledged and observed without need for any
enabling legislation. However, to declare that the
constitutional provisions are enough to guarantee
the full exercise of the rights embodied therein, and
the realization of ideals therein expressed, would
be impractical, if not unrealistic. The espousal of
such view presents the dangerous tendency of
being overbroad and exaggerated. (Agabon v. NLRC,
G.R. No. 158693, November 17, 2004)
Basic Rights of Workers Guaranteed by the
Constitution
1. Security of tenure
2. Living wage
3. Share in the fruits of production
4. Just and humane working conditions
5. Self-organization
6. Collective bargaining
7. Collective negotiations
8. Engage in peaceful concerted activities,
including the right to strike
9. Participate in policy and decision making
processes. (1987 Constitution, Art. XIII, Sec. 3)
3 ACADEMICS COMMITTEE 2018
Rights of Management
It should not be supposed that every labor dispute
will be automatically decided in favor of labor.
Management also has its own rights which, as such,
are entitled to respect and enforcement in the
interest of simple fair play. (Sosito v. Aguinaldo
Development Corporation, G.R. No. 48926, December
24, 1987)
The Secretary of Labor is duly mandated to equally
protect and respect not only the laborer but also the
management.
Fundamental Management Rights
1. Right to return of investments
2. Right to prescribe rules
3. Right to select employees
4. Right to transfer or discharge employees
Restrictions to Management Rights
Management rights are never absolute. The
Constitution says that the right to own and operate
economic enterprises is subject to the duty of the
State to promote distributive justice and to intervene
when the common good so demands.
Management rights are subject to limitations
provided by:
1. Law;
2. Contract, whether individual or collective; and,
3. General principles of fair play and justice.
NEW CIVIL CODE
New Civil Code (NCC)
a. Art. 1700 – The relations between capital
and labor are not merely contractual.
b. Art. 1701 – Principle of Non-Oppression
c. Art 1702 – Construction of labor
legislation and labor contracts
d. Art. 1703 – Contract amounting to
involuntary servitude
LABOR CODE
Applicability of the Labor Code
GR: All rights and benefits granted to workers
under the LC shall apply alike to all workers,
whether agricultural or non-agricultural. (LC, Art.
6)
XPNs:
1. Government Ees
2. Ees of GOCCs created by special or original
charter
3. Ees of foreign governments
4. Ees of international agencies (ie IRRI, ICMC)
5. Corporate officers/ intra-corporate disputes
which fall under P.D. 902-A and now fall under
the jurisdiction of the regular courts pursuant
to the Securities Regulation Code.
6. Local water district except where NLRC’s
jurisdiction is invoked.
7. As may otherwise be provided by the LC
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 UST LAW PRE-WEEK NOTES 2018
Rule-Making Power Granted by the Labor Code
The DOLE through the SOLE and other Government
agencies charged with the administration and
enforcement of the LC or any of its parts shall
promulgate the necessary IRRs. (LC, Art. 5)
Limitations to the Rule-Making Power Granted
by the Labor Code
1. It must be issued under the authority of law;
2. It must not be contrary to law and the
Constitution;
3. Must not go beyond the law itself.
Labor Dispute between Government Employees
The Public Sector Labor-Management Council, not
the DOLE shall hear the dispute (E.O. 180, Sec.15,
June 1, 1987)
Applicability without Employer-Employee
Relationship
The Labor Code may apply even if the parties are
not employers and employees of each other. It is not
correct to say that employment relationship is a
pre-condition to the applicability of the Code. e.g.
illegal recruitment, misuse of POEA license. (1
Azucena, 2016, p. 33)
RECRUITMENT AND PLACEMENT
RECRUITMENT OF LOCAL AND MIGRANT
WORKERS
Governing Law
1. Labor Code
2. Migrant Workers and Overseas Filipinos Act of
1995 (RA 8042, as amended by RA 10022)
Worker is any member of the labor force, whether
employed or unemployed. [LC, Art. 13(a)]
Recruitment and Placement
1. Any act of canvassing, enlisting, transporting,
contracting, hiring, utilizing, or procuring
workers; (CETCHUP) and,
2. Includes contact services, referrals, advertising
or promising for employment, locally or
abroad, whether for profit or not. [LC, Art.
13(b)]. (CRAP)
Persons Deemed Engaged in Recruitment and
Placement
Any person or entity which, in any manner, offers
or promises for a fee employment to two (2) or
more persons shall be deemed engaged in
recruitment and placement. (LC, Art. 13[b])
NOTE: Regardless of the number of persons dealt
with, recruitment and placement is still constituted.
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 2 or more
4 ACADEMICS COMMITTEE 2018
prospective workers, the individual or entity
dealing with them shall be deemed to be engaged in
the act of recruitment and placement. The words
"shall be deemed" create that presumption. (People
v. Panis, G.R. L-58674-77 July 11, 1990).
PRIVATE RECRUITMENT
GR: No person or entity other than public
employment offices, shall engage in the recruitment
and placement of workers. (LC, Art. 16)
XPNs:
1. Public employment offices
2. Private employment offices
3. Private recruitment entities
4. Shipping or manning agents or representatives
5. The POEA
6. Construction contractors if authorized by the
DOLE and Construction Industry Authority
7. Members of the diplomatic corps (but hiring
must be processed through POEA)
8. Other persons or entities as may be authorized
by the SOLE
9. Name hires. (Sec. 1[i], Rule II, Omnibus Rules and
Regulations implementing the Migrant Workers
and Overseas Filipinos Act of 1995 as amended
by R.A. 10022)
Name hires
Individual workers who are able to secure
contracts for overseas employment opportunities
with employers without the assistance or
participation of any agency (Omnibus Rules and
Regulations implementing the Migrant Workers and
Overseas Filipinos Act of 1995 as amended by R.A.
10022, Rule II).
REGULATIONS OF RECRUITMENT AND
PLACEMENT ACTIVITIES
Private Sector Participation in the Recruitment
and Placement of Workers
Private employment sector shall participate in the
recruitment and placement of workers, locally and
overseas, under such guidelines, rules and
regulations as may be issued by the SOLE. (LC, Art.
25)
Validity of License to Recruit
1. Local Employment – license shall be valid for
a period of three (3) years from the date of
issuance unless sooner revoked or cancelled.
(DO 141-4, Sec. 12)
2. Overseas Employment – regular license is
valid up to the full term of four (4) years from
the date of issuance of the provisional license.
Provisional license is issued by the POEA which
is valid for two (2) years. (POEA Revised Rules
2016) POEA may upgrade the provisional
license during its validity to a regular license
after the recruiter has deployed at least one
hundred workers to its new principal(s). A
provisional license does not authorize
recruitment for domestic employment.
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PROHIBITED ACTIVITIES IN licensed recruitment/

RECRUITMENT/PLACEMENT manning agency.

1. Overcharging; LICENSE v. AUTHORITY

2. False Notice;
3. Misrepresentation to Secure License; License requirement in the business of
4. Inducing Worker to Quit; recruitment and replacement
5. Inducement not to Employ;
6. Recruitment for Harmful Jobs; The business of recruitment and replacement is
7. Obstructing Inspection; regulated by law by requiring them to obtain
8. Nonsubmission of Reports; license and authority.
9. Contract Substitution;
10. Involvement in Travel Agency; and, LICENSE AUTHORITY
11. Withholding of Documents. (LC, Art. 34) A document issued A document issued by the
12. Failure to Deploy; by DOLE DOLE authorizing a
13. Failure to Reimburse; and authorizing a person or association to
14. Non-Filipino Manager. (as amended by RA person or entity to engage in recruitment
10022) operate a private and placement activities
employment as a private recruitment
In Addition to the above-mentioned agency. entity.
Prohibitions (RA 10022, Sec. 5)

1. Granting a loan to an OFW; CHARACTERISTICS OF A LICENSE

2. Non-Renegotitation of Loan;
3. Violation of Suspension;
4. Collection of Insurance Premium; and,
5. Imposing a compulsory and exclusive
arrangement whereby an OFW is required to:
a. Specifying a Loan Entity;
b. Specifying a Medical Entity; and,
c. Specifying a Training Entity. (Sec. 6, R.A.
8042, Migrant Workers and Overseas
Filipino Act, as amended by R.A. 10022).
ILLEGAL RECRUITMENT, ART. 38 (LOCAL), SEC.
6, MIGRANT WORKERS ACT, R.A. 8042
Difference between the prohibited acts under
LC and R.A. 8042 or the Overseas Filipinos and
Overseas Migrant Workers Act, as amended by
R.A. 10022
1. License or authority are non-transferable(Art.
29, LC). License or authority is granted on the
basis of personal qualifications of the grantee.
Thus, it is beyond the commerce of man.
2. Prospective in application (People v. Chua, G.R.
No. 128280, 4 April 2001)
3. It is place-specific. Engaging in recruitment
activities in places other than that specified in
the license is prohibited. [Sec. 143, II (s), Revised
POEA Rules and Regulations Governing the
Recruitment and Employment of Landbased
Overseas Filipino Workers of 2016]
XPN: Provincial recruitment pursuant to a
special recruitment authority
SUSPENSION AND/OR CANCELLATION OF
LICENSE OR AUTHORITY

LC R.A. 8042, as amended Non-Licensee or Non-Holder of Authority

by RA 10022
1. Illegal Illegal recruitment under Any person, corporation or entity:
recruitment Sec. 6 means any 1. Which has not been issued a valid license or
under Art.38 recruitment activity authority to engage in recruitment and
of LC committed by non- placement by the SOLE; or
2. Prohibited licensees/ non-holders of 2. Whose license or authority has been
acts under authority or prohibited suspended, revoked or cancelled by the POEA
Art.34 of LC acts (same as Art. 34, LC) or the SOLE.
Jurisdiction
Added to the following in
the list of prohibited acts: The SOLE and the POEA Administrator are vested
1. Failure to actually with power to suspend or cancel any license or
deploy without valid authority to recruit employees for overseas
reason; employment. (Azucena, Vol. 1, 2016, p. 100; LC, Art.
2. Failure to reimburse 35)
expenses incurred by
the worker in Grounds for suspension or cancellation of
connection with license
his/her
documentation and 1. Commission of prohibited acts under Art. 34 of
processing for LC
purposes of 2. Publishing job announcements w/o POEA’s
deployment; approval
3. To allow a non- 3. Charging a fee which may be in excess of the
Filipino citizen to authorized amount before a worker is
head or manage a employed

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 UST LAW PRE-WEEK NOTES 2018
4. Deploying workers w/o processing through
POEA
5. Recruitment in places outside its authorized
area (Sec. 4, Rule II, Book IV, POEA Rules).
REGULATORY AND VISITORIAL POWERS OF
THE DOLE SECRETARY
Regulatory Powers
The Secretary of Labor shall have the power to:
1. Restrict and regulate the recruitment and
placement activities of all agencies; and,
2. Issue orders and promulgate rules and
regulations. (LC, Art. 36)
Visitorial Powers
The Secretary of Labor or his duly authorized
representatives may, at any time:
1. Inspect the premises, books of accounts and
records of any person or entity covered by this
Title;
2. Require it to submit reports regularly on a
prescribed forms; and,
3. Act on violations of any provisions of this Title.
(LC, Art. 37)
NOTE: The proceeding before the SLE or his agents
exercising visitorial powers is summary in nature.
(Servando’s Inc. vs. Secretary of Labor and
Employment, GR 85840, June 5, 1991)
SOLE cannot Issue Search Warrants or Warrants
of Arrest
Under the 1987 Constitution, only a judge may
issue search warrants or warrants of arrest. Hence,
Art. 38(c) of the LC is unconstitutional inasmuch
as it gives the SLE the power to issue search
warrants and warrants of arrest. The labor
authorities must go through the judicial process.
(Salazar v. Achacoso, G.R. No. 81510, March 14,
1990).
ILLEGAL RECRUITMENT
Under Article 38(a) of the LC, illegal recruitment
means any recruitment activities, including the
prohibited practices enumerated under Article 34
of this Code, to be undertaken by non-licensees or
non-holders of 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: 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.
(RA 10022, Sec. 5)
Elements of Illegal Recruitment
6 ACADEMICS COMMITTEE 2018
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:
a. 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 [LC, Art. 13(b);
R.A. 8042 as amended by R.A. 10022]; or,
b. any prohibited practices enumerated
(People vs. Sadiosa, GR 107084, May 15,
1998; RA 8042, Sec. 10) under Section 5 of
RA 10022. (LC, Art. 34; RA 8042, Sec. 5, as
amended by RA 10022)
Types of Illegal Recruitment
1. Simple – is committed where a licensee/non-
licensee or holder/non-holder of authority
undertakes either any recruitment activities
defined under Article 13(b), or any prohibited
practices enumerated under Section 5 of RA
10022.
Prescription of action: Five (5) years. (Sec. 12,
R.A. 8042)
Where the illegal recruitment is proved, but the
elements of large scale and syndicate are
absent, the accused can be only convicted of
simple illegal recruitment. (People vs. Sagun,
GR 119076, March 25, 2002)
2. Illegal Recruitment as Economic Sabotage -
it is economic sabotage when complex illegal
recruitment is committed.
a. Syndicated – committed by a syndicate if
carried out by a group of three (3) or more
persons in conspiracy or confederation
with one another;
b. Large Scale or qualified –committed
against three (3) or more persons
individually or as a group (People v.
Sadiosa, G.R. No. 107084, 15 May 1998)
despite the lack of necessary license from
POEA (People v. Alzona, G.R. No. 132029, 30
July 2004)
Prescription of action: Twenty (20) years.
(Sec. 12, R.A. 8042)
NOTE: “Illegal recruitment in large scale” pertains
to the number of victims while “syndicated illegal
recruitment” pertains to the number of recruiters.
Proof of Illegal Recruitment
There is illegal recruitment when one gives the
impression of having the ability to send a worker
abroad. It is undisputed that appellant gave
complainants the distinct impression that she had
the power or ability to send people abroad for work
such that the latter were convinced to give her the
money she demanded in order to be so employed
(People v. Goce, G.R. No. 113161, August 29, 1995).
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 LABOR LAW AND SOCIAL LEGISLATION

It is important that there must at least be a promise

or offer of an employment from the person posing LOCAL RECRUITMENT AGENCY
as a recruiter, whether locally or abroad (People v.
Laogo, G.R. no. 176264, January 10, 2011). Liability of the Local Recruitment Agency

Q: Mateo represented himself as having a tie-up GR: A Local Recruitment Agency shall be jointly
with some Japanese firms and promised and solidarily liable with its principal or foreign-
employment for a fee to various applicants. based employer for any violation of the recruitment
Despite payment of the fees, Mateo failed to agreement and violation of contracts of
secure any overseas employment for the employment [Sec. 10(a)(2), Rule V, Book I, IRR]
applicants. This prompted applicants to go to
POEA where they learned that Mateo is not In applying for a license to operate a private
licensed to recruit applicants for overseas employment agency for overseas recruitment and
employment. The applicants filed a complaint placement, applicant is required to submit a
against Mateo for illegal recruitment in large verified undertaking. In that document, the agency
scale. Mateo contends that there was no proof assumed all responsibilities for the proper use of its
that he received money. Is Mateo’s contention license and the proper implementation of the
tenable? employment contracts with the workers it
recruited and deployed for overseas employment.
A: NO. The offense of illegal recruitment in large (Royal Crown Internationale vs. National Labor
scale has the following elements: (1) the person Relations Commission, GR 78085, October 16, 1989)
charged undertook any recruitment activity as
defined under Section 6 of RA 8042; (2) accused did XPN: Where the workers themselves insisted for
not have the license or the authority to lawfully the recruitment agency to send them back to their
engage in the recruitment of workers; and, (3) foreign employer despite their knowledge of its
accused committed the same against three or more inability to pay their wages, the agency is absolved
persons individually or as a group. Appellants' from liability. (Feagle Construction Corp. vs. Gayda,
argument that there was no proof that they GR 82310, June 18, 1990)
received money from the private complainants
deserves no credence. Suffice it to say that money is Liability if the Recruitment or Placement
not material to a prosecution for illegal recruitment Agency is a Juridical Being
considering that the definition of "illegal
recruitment" under the law includes the phrase If the recruitment/placement agency is a juridical
"whether for profit or not." (People of the being, the corporate officers, directors or partners
Philippines v. Angel Mateo, G. R. No. 198012, April 22, as the case may be, shall themselves be jointly and
2015) solidarily liable with the corporation or partnership
for the claims and damages (Becmen Service
ILLEGAL RECRUITMENT vs. ESTAFA Exporter and Promotion v. Cuaresma, G.R. Nos.
182978-79, April 7, 2009).
NOTE: Illegal recruitment and estafa cases may be
filed simultaneously or separately. The filing of FOREIGN EMPLOYER
charges for illegal recruitment does not bar the
filing of estafa, and vice versa. A foreign corporation which, through unlicensed
agents, recruits workers in the country may be sued
ILLEGAL RECRUITMENT ESTAFA in and found liable by Philippine courts. E.g. direct
hiring by a foreign firm without participation of
Malum prohibitum Malum in se POEA. (Azucena, Vol. 1, 2016, p. 104)
It is not required that it be Accused defrauded
shown that the recruiter another by abuse of THEORY OF IMPUTED KNOWLEDGE
wrongfully represented confidence, or by
himself as a licensed means of deceit A rule in insurance law that any information
recruiter material to the transaction, either possessed by the
agent at the time of the transaction or acquired by
NOTE: It is enough that NOTE: It is essential him before its completion, is deemed to be the
the victims were deceived that the false knowledge of the principal, at least so far as the
as they relied on the statement or transaction is concerned, even though in fact the
misrepresentation and fraudulent knowledge is not communicated to the principal at
scheme that caused them representation all. (Leonor v. Filipinas Compania, 48 OG 243,
to entrust their money in constitutes the very January 10, 1950; Rovels Enterprises, Inc. v. Ocampo,
exchange of what they cause or the only G.R. No. 136821, 17 October 2002)
later discovered was a motive which
vain hope of obtaining induces the The Theory of Imputed Knowledge teaches that the
employment abroad. complainant to part knowledge of the agent is knowledge of the
with the thing of principal. (Sunace International Management
value. Services, Inc. vs. NLRC, et al., GR 161757, January 25,
2006)

SOLIDARY LIABILITY
LIABILITIES

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 UST LAW PRE-WEEK NOTES 2018
Liability of the Private Employment Agency and
the Principal or Foreign-based Employer
They are jointly and solidarily liable for any
violation of the recruitment agreement and the
contracts of employment.
This joint and solidary liability imposed by law
against recruitment agencies and foreign Ers is
meant to assure the aggrieved worker of immediate
and sufficient payment of what is due him (Becmen
Service Exporter and Promotion v. Cuaresma, G.R.
Nos. 182978-79, April 7, 2009).
PRETERMINATION OF CONTRACT OF
MIGRANT WORKER
Relief of a Worker When Terminated Without
Valid Cause
1. Full reimbursement of his placement fee with
12% interest per annum;
2. Plus salaries for the unexpired portion of his
employment contract. (R.A. 10022)
NOTE: The three-month option is declared
unconstitutional for violating the equal protection
clause and the substantive due process rule in the
Constitution. (Serrano vs. Gallant Maritime Services
Inc. and Marlow Navigation Company, Inc., GR
167614, March 24, 2009)
DIRECT HIRING
It is when an employer hires a Filipino worker for
overseas employment without going through the
POEA or entities authorized by the SLE.
Ban on Direct Hiring
GR: An employer may only hire Filipino worker for
overseas employment through POEA or entities
authorized by DOLE. (LC, Art. 18)
XPNs: Direct hiring by:
1. International organizations
2. Name hires
3. Members of the diplomatic organizations
4. Other Ers as may be allowed by DOLE
EMPLOYMENT OF NON-RESIDENT ALIENS
EMPLOYMENT PERMIT OF NON-RESIDENT
ALIENS
An employment permit may be issued to:
1. a non-resident alien; or,
2. the applicant employer after a determination of
the non-availability of a person in the
Philippines who is competent, able and willing
at the time of application to perform the
services for which the alien is desired.
Article 40 of the LC applies only to “non-resident
aliens” not to long-time resident of the country.
(GMC v. Torres, G.R. No. 9366, April 22, 1991)
8 ACADEMICS COMMITTEE 2018
Employment of Aliens in Entities Engaged in
Nationalized Activities
GR: Aliens may not be employed or engaged in
nationalized activities
XPNs:
1. Secretary of Justice specifically authorizes the
employment of technical personnel;
2. Aliens are elected members of the board of
directors or governing body of corporations or
associations engaging in partially nationalized
activities shall be allowed in proportion to their
allowable participation or share in the capital
of such entities [Sec. 2(A), Anti-Dummy Law, as
amended by P.D. 715]; or
3. Enterprises registered under the Omnibus
Investment Code in case of technical,
supervisory or advisory positions, but for a
limited period.
Persons required to obtain employment permit
GR: All non-resident foreign nationals who intend
to engage in gainful employment in the Philippines.
XPNs:
1. All diplomatic services 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. Owners and representatives of foreign
principals whose companies are accredited by
the POEA, who come to the Philippines for the
sole purpose of interviewing Filipino
applicants for employment abroad;
4. Foreign national who came to the Philippines
to teach, present and/or conduct research
studies
5. Permanend resident foreign national and
probationary or temporary resident visa
holders under Sec. 13 (a-f) of the Philippine
Immigration Act of 1940 and Sec. 3 of the Alien
Social Integration Act of 1995;
6. Refugees and stateless persons recognized by
DOJ pursuant to Art. 17 of the UN Convention
and Protocol Relating to Status of Refugees and
Stateless Persons;
7. All foreign nationals granted exemption by law
(D.O. 186-17)
Aliens excluded from securing an employment
permit
1. Members of the governing board with voting
rights only and do not intervene in the
management of the corporation or in the day-
to-day operation of the enterprise;
2. Corporate officers as provided under the
Corporation Code of the Philippines, Articles of
Incorporation, and By-laws of the Corporation
such as President, Secretary and Treasurer.
3. Those providing consultancy services who do
not have employers in the Philippines.
4. Intra-corporate transferee who is a manager,
executive or specialist as defined below in
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accordance with Trade Agreements and an PHILIPPINE OVERSEAS EMPLOYMENT

employee of the foreign service supplier for at ADMINISTRATION (POEA)
least one (1) year prior to deployment to a
branch, subsidiary, affiliate or representative While Section 2(c),Republic Act (R.A.) No.
office in the Philippines: 8042 states that the State does not promote
a. an EXECUTIVE: a natural person overseas employment as a means to sustain
within the organization who primarily economic growth, the State recognizes the vital role
directs the management of the of overseas Filipino workers to the nation’s
organization and exercises wide economy and development. Aware that overseas
latitude in decision making and workers are vulnerable to exploitation, the State
receives only general supervision or sought to protect the interests and well-being of
direction from higher level executives, these workers with creation of specialized bodies
the board of directors or stockholders such as the POEA under the direct supervision of
of the business; an executive would the DOLE Secretary.(Republic of the Philippines
not directly perform tasks related to v.Humanlink Manpower Consultants, Inc., G.R. No.
the actual provision of the service or 205188, April 22, 2015)
services of the organization;
b. a MANAGER: a natural person within Jurisdiction of the LA v. POEA
the organization who primarily directs
the organization/ department/ JURISDICTION
subdivision and exercises supervisory Labor Arbiter POEA
and control functions over other Original and exclusive
supervisory, managerial or jurisdiction over:
professional staff; does not include Original and
first-line supervisors unless exclusive
1. All cases which are
employees supervised are jurisdiction over all
administrative in
professionals; does not include claims arising out of
character relating to
employees who primarily perform Er-Ee relationship
licensing and registration
tasks necessary for the provision of the or by virtue of any
of recruitment and
service; or law or contract
employment agencies
c. a SPECIALIST: a natural person within involving OFWs
the organization who possesses including claims for:
2. Disciplinary Action
knowledge at an advanced level of cases and other special
expertise essential to the 1. Actual
cases, which are
establishment/provision of the service 2. Moral
administrative in
and/or possesses proprietary 3. Exemplary
character, involving Ees,
knowledge of the organization's 4. Other forms of
principals, contracting
service, research equipment, damages (Sec. 10,
partners and Filipino
techniques or management; may R.A. 8042).
migrant workers (Rule
include, but is not limited to, members VII, Book VII, POEA Rules).
of a licensed profession.
5. Contractual service supplier who is a manager, REPATRIATION OF A WORKER
executive or specialist and an employee of a
foreign service supplier which has no GR: The repatriation of the:
commercial presence in the Philippines:
a. who enters the Philippines 1. Worker and the transport of his personal
temporarily to supply a service belongings shall be the primary responsibility
pursuant to a contract between of the agency which recruited or deployed the
his/her employer and a service worker overseas.
consumer in the Philippines; 2. Remains and transport of the personal
b. must possess the appropriate belongings of a deceased worker and all
educational and professional costs attendant thereto shall be borne by the
qualifications; and principal and/or the local agency.
c. must be employed by the foreign
service supplier for at least one (1) XPNs:
year prior to the supply of service in 1. If the termination of employment is due solely
the Philippines. (D.O. 186-17, Series of to the fault of the worker, the principal/ Er or
2017) agency shall not be responsible for the
repatriation of the former and/or his
Validity of the employment permit belongings.
2. In cases of war, epidemic, disaster or
GR: 1 year calamities, natural or man-made, and other
similar event, and where the principal or
XPN: If the employment contract or other modes of recruitment agency cannot be identified, the
engagement provides otherwise, which in no case Overseas Workers Welfare Administration, in
shall exceed three (3) years [DOLE D.O. 186-17, coordination with appropriate international
Revised Rules for the Issuance of Employment agencies, shall take charge of the repatriation
Permits to Foreign Nationals (2017)]. (Sec. 15, R.A. 8042).

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Mandatory Repatriation of Underage Migrant Inclusion of Supervisors

Workers Supervisors are Supervisors are not
members of the managerial employees
Underage migrant workers refer to those who are managerial staff. In under Book V. (1
below 18 or below the minimum age requirement effect, supervisor is a Azucena, 2016, p. 217)
for overseas employment as determined by the manager for
SOLE. (Sec. 1 [vv], Rule II, R.A. 10022) purposes of Book III.

Upon discovery or being informed of the presence Field Personnel

of migrant workers whose ages fall below the
minimum age requirement for overseas
deployment, the responsible officers in the foreign
service shall without delay repatriate said workers
and advise the DFA through the fastest means of
communication available of such discovery and
other relevant information.
Penalty: The license of a recruitment/manning
agency which recruited or deployed an underage
migrant worker shall be automatically revoked and
shall be imposed a fine of not less than P500,000
but not more than P1,000,000. (Sec. 9, R.A. 10022)
LABOR LAW
LABOR STANDARDS
COVERAGE/ EXCLUSIONS
Field personnel refers to non-agricultural
employees who:
1. Regularly perform their duties away from the
principal place of business or branch office of
the employer; and
2. Whose actual hours of work in the field cannot
be determined with reasonable certainty. (Sec.
27, Rule II, Book III, Rules Implementing the
Labor Code.)
They are exempted from the coverage due to the
nature of their functions which requires
performance of service away from the principal
place of business. Hence, they are free from the
personal supervision of the employer and the latter
cannot determine with reasonable certainty the
actual number of hours of work expended for the
employer's interest.

GR: Title I, Book III of the Labor Code dealing with e.g. outside sales personnel, agents on commission
hours of work, weekly rest periods, holidays, basis, or insurance field agents. (San Miguel
service incentive leaves and service charges, covers Brewery vs Democratic Labor Union, G.R. No. L-
all employees in all establishments, whether for 18353, 31 July 1963); meter readers, medical
profit or not. (LC, Art. 82) representatives. (Duka, L abor Laws and Social
Legislation, A Barrister’s Companion, 2016, p. 118)
XPN: (GF-MOM-WPD)
1. Government employees Rule in case of Drivers/Bus Conductors
2. Field personnel
3. Managerial employees It is of judicial notice that along the routes that are
4. Officers and members of the managerial staff plied by these bus companies, there are its
5. Members of the family of the employer who are inspectors assigned at strategic places who board
dependent on him for support the bus and inspect the passengers, the punched
6. Workers paid by results (Secs. 1 and 2, Rule I, tickets, and the conductors reports. There is also
Book III, Rules Implementing the Labor Code.) the mandatory once-a-week car barn or shop day,
7. Persons in the personal service of another; and where the bus is regularly checked as to its
8. Domestic helpers mechanical, electrical, and hydraulic aspects,
whether or not there are problems thereon as
MANAGERIAL EMPLOYEES reported by the driver and/or conductor. They too,
must be at specific place as [sic] specified time, as
Book III, Art. 82 Book V, Art. 219 (M)
they generally observe prompt departure and
Labor Standards Labor Relations
arrival from their point of origin to their point of
Definition
destination. In each and every depot, there is
Refer to those whose Vested with the
always the dispatcher whose function is precisely
primary duty consists powers or prerogative
to see to it that the bus and its crew leave the
of the management of to lay down and
premises at specific times and arrive at the
the establishment in execute management
estimated proper time. These, are present in the
which they are policies, and/or to hire,
case at bar. The driver, the complainant herein, was
employed or of a transfer, suspend, lay-
therefore under constant supervision while in the
department or off, recall, discharge,
performance of this work. He cannot be considered
subdivision thereof, assign, or discipline
field personnel (Autobus Transport System, Inc. V.
and to the other employees.
Bautista, G.R No. 156367, 16 May 2005).
officers or members of
the managerial staff.
Application PRINCIPLES IN DETERMINING HOURS WORKED
Used only for Used only for purposes
purposes of Book III, of Book V, (i.e. forming, 1. All hours which the Ee is required to give to his
(i.e. working joining and assisting of Er regardless of whether or not such hours are
conditions and rest unions, certification spent in productive labor or involve physical or
periods, and benefits) election, and, collective mental exertion.
bargaining)

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10 ACADEMICS COMMITTEE 2018
 LABOR LAW AND SOCIAL LEGISLATION
2. Rest period is excluded from hours worked,
even if Ee does not leave his workplace, it being
enough that:
a. He stops working
b. May rest completely
c. May leave his workplace, to go elsewhere,
whether within or outside the premises of
the workplace
3. All time spent for work is considered hours
worked if:
a. The work performed was necessary
b. If it benefited the Er
c. Or the Ee could not abandon his work at
the end of his normal working hours
because he had no replacement
d. Provided, the work was with the
knowledge of his Er or immediate
supervisor
4. The time during which an Ee is inactive by
reason of interruptions in his work beyond his
control shall be considered working time:
a. If the imminence of the resumption of the
work requires the Ees presence at the
place of work; or
b. If the interval is too brief to be utilized
effectively and gainfully in the Ees own
interest (IRR, Book III, Rule I, Sec. 4).
NORMAL HOURS OF WORK
The normal hours of work of any employee shall not
exceed eight (8) hours a day (Art. 83, LC).
The eight-hour work requirement does not,
however, preclude the employer in the exercise of
its management prerogatives to reduce the
number of working hours, provided that there is no
diminution of existing benefits.
XPNs to 8-hour work requirement:
1. Health personnel
GR: 8 hours for 5 days (40-hour workweek),
exclusive of time for meals.
XPN: Where the exigencies of the service require
that such personnel work for 6 days or 48 hours,
they shall be entitled to an additional compensation
of at least 30% of their regular wage for work on the
6th day (LC, Art. 83).
Health personnel covered by the 40-hour
workweek
a. Those in cities and municipalities with a
population of at least 1 million; or
b. Those in hospitals and clinics with a bed
capacity of at least 100.
2. Compressed workweek
A reduction of the number of regular working days
(RWD) is valid where the arrangement is resorted
to by the Er to prevent serious losses due to causes
beyond his control, such as when there is a
substantial slump in the demand for his goods or
services or when there is a lack of raw materials.
There is one main consideration in determining the
validity of reduction of working hours – that the
company was suffering from losses. (Linton
11
Commercial v. Hellera, G.R. No. 163147, October 10,
2007).
Conditions where a "compressed workweek"
schedule may be legally authorized as an
exception to the "8-hour a day" requirement
under the LC (2005 BAR)
1. The Ee voluntarily agrees to it
2. There is no diminution in their weekly or
monthly take home pay or fringe benefits
3. The benefits are more than or at least
commensurate or equal to what is due to the
Ees without the compressed work week
4. OT pay will be due and demandable when they
are required to work on those days which
should have ceased to be working days because
of the compressed work week schedule.
5. No strenuous physical exertion or that they are
given adequate rest periods.
6. It must be for a temporary duration as
determined by the DOLE.
Power Interruption/ Brown-outs
Brown-outs of short duration but not exceeding
twenty (20) minutes shall be treated as worked or
compensable hours whether used productively by
the employees or not.
Brown-outs running for more than twenty (20)
minutes may not be treated as hours worked
provided ANY of the following conditions are
present:
1. The employees can leave their workplace or go
elsewhere whether within or outside the work
premises; or
2. The employees can use the time effectively for
their own interest (Chan, 2017, p. 112)
MEAL BREAKS
It shall be the duty of the every employer to give his
employees not less than sixty (60) minutes time-off
for their regular meals. (Art. 85, LC)
Being time-off, it is not compensable hours worked.
The employee is free to do anything he wants,
except to work. If he required to work while eating,
he should be compensated thereof.
Shortening of Meal Periods
A meal period of not less than 20 minutes may be
given by the employer providded that such shoter
meal period is credited as compensable hours
worked of the employee:
a. Where the work is non-manual in nature or
does not involve strenous physical extension;
b. Where the establishment regularly operates
for not less than 16 hours a day;
c. In case of actual or impending emergencies or
when there is urgent work to be performed on
machinerie, equipments or installations to
avoid serious losses which the employer would
otherwise suffer; and
d. Where the work is necessary to prevent serious
loss of perishable goods.
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 UST LAW PRE-WEEK NOTES 2018
Efffect of Shortening of Meal Period to less than
20 minutes
The law does not allow that meal period shall be
shortened to less than 20 minutes. If so reduced, the
same shall no longer be considered as meal time but
merely as rest period or coffee breaks and,
therefore, becomes compensable working time.
NIGHT SHIFT DIFFERENTIAL
An employee shall be paid night shift differential of
no less than ten percent (10%) of his regular wage
for each hour of work performed between 10:00
PM and 6:00 AM (Sec. 2, Rule II, Book III, Rules
Implementing the Labor Code).
G.R.: All employees are entitled to NSD.
XPNS:
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 (Sec 1,
Rule II, IRR, Labor Code).
Where the night-time work of an employee
overlaps with overtime work, the receipt of
overtime pay does not preclude the receipt of night
differential pay. The latter is night pay; the former
is payment beyond eight-hour work. (Poquiz, page
185)
Non-Waivability
GR: Waiver of NSD is against public policy (Mercury
Drug Co., Inc. v. Dayao, et al., G.R. No. L-30452,
September 30, 1982).
XPN: Waiver is allowed if this will result to higher
or better benefits to Ees.
Night Differential in Overtime Pay
If work is done between 10PM and 6AM is overtime
work, then the 10% NSD should be based on the
overtime rate.
When the tour of duty of an employee falls at night
time, the receipt of overtime pay will not preclude
the right to night differential pay. The latter is
payment for work done during the night and the
other is payment for the excess of the regular eight-
hour work. (NARIC v NARIC Workers Union, 105 Phil.
891)
12
WAITING TIME
It shall be considered as working time if:
1. Waiting is an integral part of this work;
2. The employee is required or engaged by the
employer to wait; or
3. When employee 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 (IRR, Book III, Rule I, Sec. 5).
NOTE: 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 (IRR,
Book III, Rule I, Sec. 5(b)).
The controlling factor is whether waiting time
spent in idleness is so spent predominantly for the
employer’s benefit or for the employee’s.
Engaged to Wait v. Waiting to be Engaged
In engaged to wait, waiting is an integral part of
the job; the time spent waiting is compensable,
while in waiting to be engaged, idle time is not
working time; it is not compensable.
Work Hours of Seaman
Seamen are required to stay on board their vessels
by the very nature of their duties, and it is for this
reason that, in addition to their regular
compensation, they are given free living quarters
and subsistence allowances when required to be on
board. It could not have been the purpose of the law
to require their employers to pay them overtime
even when they are not actually working;
otherwise, every sailor on board a vessel would be
entitled to overtime for sixteen hours each day,
even if he had spent all those hours resting or
sleeping in his bunk, after his regular tour of duty.
The correct criterion in determining whether or not
sailors are entitled to overtime pay is not, therefore,
whether they were on board and cannot leave ship
beyond the regular eight working hours a day, but
whether they actually rendered service in excess of
said number of hours.
OVERTIME WORK, OVERTIME PAY
Overtime work is the service rendered in excess of
and in addition to eight hours on ordinary working
days, which are the prescribed daily work period, is
overtime work. (Caltex Regular Employees at Mla.
Office v Caltex Phils., Inc., 247 SCRA 398)
Overtime pay is the additional compensation of at
least 25% on the regular wage for the service or
work rendered or performed in excess of 8 hours a
day by employees or labourers in employment
covered by the Eight-hour Labor Law. (LC, Art. 87)
NOTE: Express instruction from the Er to the Ee to
render OT work is not required for the Ee to be
entitled to OT pay; it is sufficient that the Ee is
permitted or suffered to work. (Azucena, p. 222)
However, written authority after office hours
during rest days and holidays are required for
entitlement to compensation.
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 LABOR LAW AND SOCIAL LEGISLATION
Overtime Pay vs. Premium Pay
OVERTIME
PREMIUM PAY
PAY
Additional Additional compensation for
compensation work performed within 8
for work hours on days when
performed normally he should not be
beyond 8 working (on non-working
hours on days, such as rest days and
ordinary days special days.)
(within the But additional compensation
worker’s 24- for work rendered in excess
hour of 8 hours during these days
workday) is also considered OT pay.
Waiver of Overtime Pay
GR: The right to overtime pay cannot be waived.
The right is intended for the benefit of the laborers
and employees. Any stipulation in the contract that
the laborer shall work beyond eight hours without
additional compensation for the extra hours is
contrary to law and null and void. (Azucena, page
225)
XPNs:
1. When the alleged 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. (Azucena, p. 228)
2. Compressed workweek.
Q: Socorro is a clerk-typist in Hospicio de San
Jose, a charitable institution dependent for its
existence on contributions and donations from
well wishers. She renders work 11 hours a day
but has not been given OT pay since her place of
work is a charitable institution. Is Socorro
entitled to overtime pay? Explain briefly. (2002
Bar Question)
A: YES. Socorro is entitled to OT pay. She does not
fall under any of the exceptions to the coverage of
Art. 82, under the provisions of hours of work. The
LC is equally applicable to non-profit institutions. A
covered Ee who works beyond 8 hours is entitled to
OT compensation.
Q: The employment contract requires work for
more than 8 hours a day with a fixed wage
inclusive of OT pay. Is that valid?
A: It depends.
1. When the contract of employment requires
work for more than 8 hours at specific wages
per day, without providing for a fixed hourly
rate or that the daily wages include OT pay, said
wages cannot be considered as including OT
compensation (Manila Terminal Co. v. CIR, et al.,
91 Phil., 625).
2. The employment contract provides for a “built-
in” OT pay. Non-payment of OT pay by the
employer is valid (Engineering Equipment v.
Minister of Labor, G.R. No. L-64967, September
23, 1985).
Overtime Rate Subject to Stipulation
13
GR: The premium for work performed on the
employees rest days or on special days or regular
holidays are included as part of the regular rate of
the employee in the computation of OT pay for any
OT work rendered on said days especially if the
employer pays only the minimum OT rates
prescribed by law.
XPN: Ees and Er may stipulate in their collective
agreement the payment of OT rates higher than
those provided by law and exclude the premium
rates in the computation of OT pay. Such agreement
may be considered valid only if the stipulated OT
pay rates will yield to the Ees not less than the
minimum prescribed by law.
Overtime Pay In A Compressed Workweek
Scheme
Any work performed beyond 12 hours a day or 48
hours a week shall be subject to OT premium
(Department Advisory No. 02, s. of 2004)
Overtime Pay Integrated in Basic Salary
Built-in Overtime Pay or Composite/Package
Pay
It is not per se illegal, but there should have been
express agreement to that effect. such arrangement,
if there be any, must appear in the manner required
by law on how overtime compensation must be
determined. For it is necessary to have a clear and
definite delineation between employee’s regular
and overtime compensation to thwart violation of
the labor standards provision of the Labor Code
(Damasco v. NLRC, et al., G.R. No. 115755, 4
December 2000).
Requisites for a Valid Built in Overtime Pay
(Base Pay with Integrated Overtime Pay)
1. A clear written agreement knowingly and
freely entered into by the employee;
2. The mathematical result shows that the agreed
legal wage rate and the overtime pay,
computed separately are equal or higher than
the separate amounts legally due. (1 Azucena,
2016, p. 263)
UNDERTIME NOT OFFSET BY OVERTIME
Where a worker incurs undertime hours during his
regular daily work, said undertime hours should
not be offset against the overtime hours on the
same day or on any other day (1 Azucena, 2016,
p.268; LC, Art. 88)
REST PERIODS
Right to weekly rest day (WRD)
Every Er shall give his Ees a rest period of not less
than 24 consecutive hours after every 6 consecutive
normal work days (IRR, Book III, Rule III, Sec. 3).
Rest day not necessarily Sunday or holiday
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 UST LAW PRE-WEEK NOTES 2018
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 provided under the law.
(Sec. 2, Rule III, Book III)
Scope of WRD
It shall apply to all Ers whether operating for profit
or not, including public utilities operated by private
persons. (IRR, Book III, Rule III, Sec. 1)
Person who determines the WRD
GR: Er shall determine and schedule the WRD of his
Ee.
XPNS:
1. CBA
2. Rules and regulations as the SLE provides
3. Preference of Ee based on religious grounds –
Ee shall make known his preference in writing
at least 7 days before the desired effectivity of
the initial rest day so preferred [IRR, Book III,
Rule III, Sec. 4(1)].
XPNs to XPN no. 3: Er may schedule the WRD of his
choice for at least 2 days in a month if the
preference of the Ee will inevitably result in:
a. Serious prejudice to the operations of the
undertaking; and
b. The Er cannot normally be expected to resort
to other remedial measures. (IRR, Book III, Rule
III, Sec. 4[2])
The employer is mandated to respect the choice of
its employee as to their rest day based on religion.
Right Of The Employee To Know The Schedule
Of Their WRDs
Er shall make known rest period by means of:
1. Written notice
2. Posted conspicuously in the workplace
3. At least 1 week before it becomes effective.
(IRR, Book III, Rule III, Sec. 5)
PREMIUM PAY
Premium Pay
It is the additional compensation for work rendered
by the Ee on days when normally he should not be
working such as special holidays and WRDs.
Refers to the additional compensation required by
law to be paid for work performed within the
regular eight (8) hours on non-working days such
as rest days and special holidays.
Refers to the regular wage combined with the
additional compensation of 30% under Article 93
and 100% under Article 94. (1 Azucena, 2016)
Er and Ee Can Agree On The Rate Of Premium
Pay Other Than That Provided By Law
Nothing shall prevent the Er and his Ee or their
representatives from entering into any agreement
with terms more favorable to the Ees; Provided, it
14
shall not be used to diminish any benefit granted to
the Ees under existing laws, agreements and
voluntary Er practices. (IRR, Book III, Rule III, Sec. 9)
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. (1 Azucena, 2016, p. 277)
The payment of the regular daily wage for any
unworked regular holiday. (Handbook on Workers’
Statutory Monetary Benefits, Bureau of Working
Conditions, 2016)
It is a premium given to Ees pursuant to the law
even if he has not been suffered to work on a
regular holiday. It is limited to the 12 regular
holidays, also called legal holidays listed by law. The
Ee should not have been absent without pay on the
working day proceeding the regular holiday.
Persons Entitled To Holiday Pay
GR: All Ees are entitled. (IRR, Book III, Rule IV, Sec.1)
XPNs: Persons not Entitled to Holiday Pay
1. Government Ees and any of its political
subdivisions, including GOCCs (with original
charter);
2. Retail and service establishments regularly
employing less than 10 workers;
3. Domestic helpers and persons in the personal
service of another;
4. Ee engaged on task or contract basis or purely
commission basis;
5. Members of the Family of the Er who are
dependent on him for support;
6. Managerial Ee and other members of the
managerial staff;
7. Field personnel and other Ee whose time and
performance are unsupervised by the Er; and,
8. Ee paid fixed amount for performing work
irrespective of the time consumed in the
performance thereof (IRR, Book III, Rule IV,
Sec.1).
Holiday work provided under Art. 93 pertains to
special holidays or special days.
Q: Jose applied with Mercury Drug Company for
the position of Sales Clerk. Mercury Drug
Company maintains a chain of drug stores that
are open every day till late at night. Jose was
informed that he had to work on Sundays and
holidays at night as part of the regular course of
employment. He was presented with a contract
of employment setting forth his compensation
on an annual basis with an express waiver of
extra compensation for work on Sundays and
holidays, which Jose signed. Is such a waiver
binding on Jose? Explain. (1996 Bar Question)
A: NO. The waiver is not binding on Jose. Rights may
be waived, unless the waiver is contrary to law,
public order, public policy, morals and customs.
The waiver in this case is void.
HOLIDAY PAY OF CERTAIN EMPLOYEES
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Private School Teachers (Faculty Members Of
Colleges And Universities)
1. RH during semestral vacations – not entitled to
holiday pay.
2. RH during Christmas vacation – entitled to
holiday pay.
Hourly-Paid Teachers
1. No pay on regular holidays including Christmas
and semestral vacations; but,
2. With pay on special public holidays and other
no-class days when classes are called off or
shortened on account of floods, typhoons,
rallies and the like (Jose Rizal College v. NLRC,
G.R. No. 65482, Dec. 1, 1987).
Field Personnel
Field personnels are not entitled to holiday pay.
The law requires that the actual hours of work in
the field be reasonably ascertained. Field
Personnel’s actual hours of work in the field cannot
be determined with reasonable certainty. (Union of
Filipro Employees v. Vivar, Jr., et al., G.R. No. 79255,
January 20, 1992)
Part-Time Worker
If the work is partial, the pay should also be partial.
(1 Azucena, 2016, p. 294)
The amount of holiday pay of a part-timer is to be
determined on a case-to-case basis. The basis is any
of the following, whichever yields the highest
amount:
1. The regular wage per day;
2. The basic wage on the working day preceding
the regular holiday if the employee is present or
on leave with pay on the last working day
immediately prior to the regular holiday;
3. The average of his basic wages for the last seven
working days for employees who are paid by
results; or,
4. The basic wage on the particular holiday, if
worked. (DOLE Explanatory Bulletin on Part-
Time Employment, January 2, 1996)
Piece-Rate Workers
A piece-rate employee is entitled to holiday pay.
Where a covered employee is paid by results or
output, his holiday pay shall not be less than his
average daily earnings for the last 7 actual work
days immediately preceding the regular holiday.
Provided: Holiday pay shall not be less than the
statutory minimum wage rate. (Book III, Rule IV, Sec.
8)
Seasonal Workers
Seasonal workers may not be paid the required
Holiday pay during off-season where they are not at
work. (Sec. 8, Rule IV, Book III)
Workers Having No Regular Work Days
15
They shall be entitled to holiday pay. (Sec. 8, Rule IV,
Book III)
Q: Are the school faculty who according to their
contracts are paid per lecture hour entitled to
unworked holiday pay?
A:
1. If during RH – No. Art. 94 of the LC is silent with
respect to faculty members paid by the hour
who because of their teaching contracts are
obliged to work and consent to be paid only for
work actually done (except when an emergency
or a fortuitous event or a national need calls for
the declaration of special holidays). (Jose Rizal
College v. NLRC, G.R. No. 65482, December 01,
1987).
2. If during special public holidays – Yes. The law
and the IRR governing holiday pay are silent as
to payment on Special Public Holidays. Be it
noted that 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. 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, G.R. No. 65482, December 01, 1987).
Rule On Two Regular Holidays Falling On The
Same Day (Double Holiday Pay)
If two regular holidays fall on the same day (such as
Good Friday falling on Araw ng Kagitingan [April
9]), the employees should be paid 400% of the basic
wage for both holidays provided he worked on that
day or was on leave of absence with pay or was on
authorized absence on the day prior to the regular
holiday.
13th MONTH PAY
(P.D. 851)
13th Month Pay Or Its Equivalent
It is a form of monetary benefit equivalent to the
monthly basic compensation received by an
employee, computed pro-rata according to the
number of months within a year that the employee
has rendered service to the employer. (DOLE’s BWC
issues Q & A on 13th month pay).
Additional income based on wage required by P.D.
851 requiring all Ers to pay their Ees a 13th month
pay which is equivalent to 1/12 of the total basic
salary earned by an Ee within a calendar year.
Basic Salary
Includes all remunerations or earnings paid by the
employer to an employee for services rendered
including cost-of-living allowances.
It does not include all allowances and monetary
benefits which are not considered or integrated as
part of the regular or basic salary such as:
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1. Cash equivalent of unused vacation and sick
leave credits;
2. Overtime pay;
3. Premium pay;
4. Night Shift Differential;
5. Holiday pay;
6. Commissions,
XPN: It is an integral part of the basic salary.
(Philippine Duplicators, Inc. v. NLRC, G.R. No.
110068, Febuary 15, 1995)
These salary-related benefits should be included in
the computation of the 13th moth pay if by
individual or collective agreement, company
practice or policy, the same are treated as part of
the basic salary of the employees.
Absence of CBA provision not a bar in giving 13th
month pay
The absence of an express provision in the CBA
obligating the Er to pay the members of a union 13th
month pay is immaterial. Notwithstanding
therefore the absence of any contractual
agreement, the payment of a 13th month pay being
a statutory grant, compliance with the same is
mandatory and is deemed incorporated in the CBA.
Minimum Period of Service Required
It is imposed as a ‘minimum service requirement’
that the employee should have worked for atleast
one (1) month during a calendar year. (No. X[A],
DOLE Handbook on Workers Statutory Monetary
Benefits)
Persons Covered by P.D. 851
1. Employees
GR: All rank-and-file Ees are covered by P.D. 851
regardless of the amount of basic salary that they
receive in a month, if their Ers are not otherwise
exempted from paying the 13th month pay. Such
Ees are entitled to the 13th month pay regardless of
said designation of employment status, and
irrespective of the method by which their wages are
paid.
Provided, that they have worked for at least 1
month, during a calendar year (Revised Guidelines
on the Implementation of the 13th Month Pay Law).
XPN:
a. Government Ees;
b. Ees paid purely on commission basis;
c. Ees already receiving 13th month pay
d. Managers
e. Seafarers
NOTE: Managerial employees may receive 13th
month pay, if such payment has been a company
practice.
2. Employers
GR: All Ers are covered by PD 581.
XPN:
16
a. The Government and any of its political
subdivisions, including GOCCs;
XPN to XPN: Corporations operating
essentially as privated subsidiaries of the
Government.
b. Ers already paying their Ees 13th month pay or
more in a calendar year in its equivalent at the
time of the issuance of the Revised Guidelines;
c. Ers of those who are paid on purely basis of:
i. Commission;
NOTE: Bus drivers and conductors who are
paid a fixed or guaranteed minimum wage
in case their commission be less than the
statutory minimum are entitled to a 13th-
month pay equivalent to one-twelfth of
their total earnings during the calendar
year. (Philippine Agricultural Commercial
and Industrial Workers Union v. NLRC, GR
No. 107994, 14 August 1995)
ii. Boundary; or
iii. Task; and
iv. Fixed amount for performing a specific
work irrespective of the time consumed in
the performance thereof.
XPN: Where the workers are paid on a piece-rate
basis, in which case, the employer shall be covered
by the Revised Guidelines insofar as the workers
are concerned.
Q: Concepcion Textile Co. included the OT pay,
night-shift differential pay, and the like in the
computation of its Ees’ 13th month pay.
Subsequently, with the promulgation of the
decision of the SC in the case of SMC v. Inciong
(103 SCRA 139) holding that these other
monetary claims should not be included in the
computation of the 13th Month Pay, Concepcion
Textile Co. sought to recover under the principle
of solutio indebiti the overpayment of the Ees’
13th month pay, by debiting against future 13th
month payments whatever excess amounts it
had previously made.
a. Is the Company's action tenable?
b. With respect to the payment of the 13th
month pay after the SMC ruling, what
arrangement, if any, must the Company
make in order to exclude from the
13thmonth pay all earnings and
remunerations other than the basic pay?
(1994 Bar Question)
a. The Company's action is not tenable. The
principle of solutio indebiti which is a civil law
concept is not applicable in labor law (Davao
Fruits Corp. v. NLRC, et al., G.R. No. 85073,
August 24, 1993). After the 1981 SMC ruling, the
Supreme Court decided the case of Philippine
Duplicators Inc. v. NLRC, GR 110068, November
15, 1995. Accordingly, management may
undertake to exclude sick leave, vacation leave,
maternity leave, premium pay for regular
holiday, night differential pay and cost of living
allowance.
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b. The company shall include sales commissions
based on the settled rule. (Songco v. NLRC, G.R.
No. L-50999, March 23, 1990).
Q: ETPI (company) entered into a collective
bargaining agreement with ETEU (union). A
side agreement of the said CBA provided that
company confirms that the 14th, 15th and
16th month bonuses (other than 13th month
pay) are granted. The company then planned to
defer the payment of the 14th, 15th and 16th
month bonuses due continuing deterioration of
company’s financial position. The union
opposed and filed a preventive mediation
complaint before the NCMB. May the company
validly postpone the payment of said bonuses?
A: NO. A reading of the provision reveals that the
same provides for the giving of 14th, 15th and
16th month bonuses without qualification. There
were no conditions specified in the CBA Side
Agreements for the grant of the benefits contrary to
the claim of ETPI that the same is justified only
when there are profits earned by the company.
Terse and clear, the said provision does not state
that the subject bonuses shall be made to depend on
the ETPI’s financial standing or that their payment
was contingent upon the realization of profits.
Neither does it state that if the company derives no
profits, no bonuses are to be given to the
employees. In fine, the payment of these bonuses
was not related to the profitability of business
operations. Verily, by virtue of its incorporation in
the CBA Side Agreements, the grant of 14th, 15th and
16th month bonuses has become more than just an
act of generosity on the part of ETPI but a
contractual obligation it has undertaken (ETPI v.
ETEU, G.R. No. 185665, Feb. 8, 2012).
Commission in relation to 13th month pay
1. The salesman’s commissions, comprising a pre-
determined percent of the selling price of the
goods sold by each salesman, were properly
included in the term basic salary for purposes of
computing their 13th month pay. (Philippine
Duplicators, Inc. v. NLRC, G.R. No. 110068,
February 15, 1995).
2. The so-called commission paid to or received by
medical representatives of BoieTakeda
Chemicals or by the rank-and-file Ees of Phil.
Fuji Xerox were excluded from the term basic
salary because these were paid as productivity
bonuses. Such bonuses closely resemble profit
sharing, payments and have no clear, direct,
necessary relation to the amount of work
actually done by each individual Ee. (Boie-
Takeda Chemicals, Inc. v. Dela Serna, G.R. No.
92174, December 10, 1993)
Earnings and remuneration which are closely akin
to fringe benefits, overtime pay or profit-sharing
payments are excluded in computing 13th month
pay. However, sales commissions which are
effectively an integral portion of the basic salary
structure of an employee shall be included in
determining his 13th month pay.
SERVICE CHARGES
17
These are charges collected by hotels, restaurants
and similar establishments at the rate of 85% for
covered Ees equally distributed among them, and
15% for the management to answer for losses and
breakages.
Covered employees
GR: All Ees are covered, regardless of their position,
designation, and employment status, irrespective of
the method by which their wages are paid.
NOTE: Applies only to hotels, restaurants and
similar establishment collecting service charges.
XPN: Managerial Ees. (IRR, Book III, Rule VI, Sec. 2)
Period to Distribute the Share of Employee
The period is not less than once every 2 weeks or
twice a month at intervals not exceeding 16 days.
Service Charge vs. Tips
SERVICE CHARGE TIPS
Collected by the Voluntary payments made by
management from the the customers to the Ees for
customers. excellent service.
Tips
Tips are handled similarly as service charges.
Pooled tips should be monitored, accounted, and
distributed in the same manner as the service
charges.
A waiter must drop in a tip box the tips he received.
Otherwise, he commits “tip pocketing”, a serious
offense of dishonesty that may cost him his job.
Rule If Service Charge Is Abolished
If it is abolished, the share of the covered Ees shall
be considered integrated in their wages on the basis
of the average monthly share of each Ees for the
past 12 months immediately preceding the
abolition. (Sec. 5, Rule V, Book III, Rules
Implementing the Labor Code)
NOTE: Service charges form part of the award in
illegal dismissal cases.
WAGES
It is the remuneration or earnings, however
designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of
calculating the same, payable by an Er to an Ee
under a written or unwritten contract of
employment:
1. For work done or to be done, or for services
rendered or to be rendered; and,
2. Includes fair and reasonable value of board,
lodging, or other facilities customarily
furnished by the Er to the Ee as determined
by SLE.
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NOTE: Fair and reasonable value shall not include paid at stated times services and implies a
any profit to the employer or to any person and measured by the position or office.
affiliated with the employer. (Art. 97, LC) day, week, month or
season.
“No Work, No Pay” Principle (Fair Day’s Wage Suggestive of a larger
for a Fair Day’s Labor) Considerable pay for a
and more permanent
lower and less
or fixed compensation
GR: If there is no work performed by the employee, responsible character
for more important
without the fault of the employer, there can be no of employment.
service.
wage or pay. Burden of economic loss suffered by GR: Not subject to
employee shall not be shifted to the employer. execution

XPNs: The laborer was able, willing and ready to
work but was:
1. Prevented by management;
2. Illegally locked out;
3. Illegally suspended;
4. Illegally dismissed;
5. Illegally prevented from working. (Aklan
Electric Coop. v. NLRC, G.R. No. 129246, January
10, 2000)
“Equal Pay For Equal Work” Principle
Persons who work with substantially equal
qualifications, skill, effort and responsibility, under
similar conditions, should be paid similar salaries.
Employees holding the same position and rank are
presumed to be performing equal work. The rule
equal pay for equal work applies whether the
employee is hired locally or abroad (International
School Alliance of Educators v. Quisumbing, G.R. No.
128845, 1 June 2000).
XPN: Debts incurred Subject to execution.
for food, shelter,
clothing and medical
attendance.
The Supreme Court reached the conclusion that
words “wages” and “salary” are in essence
synonymous. (1 Azucena, 2016, p. 305)
The distinction between salary and wage was only
for the purpose of Art. 1708 of the Civil Code which
mandates that laborer's wages shall not be subject to
execution or attachment except for debts incurred
for food, shelter, clothing and medical attendance.
(Gaa v. Court of Appeals, GR No. L-44169, December
3, 1985) In labor law, the distinction is only a matter
of semantics. It is settled that wage and salary are
synonymous. Likewise, the term "pay" is also
synonymous with wage and salary. (Equitable PCI v
Sadac, G.R. No. 164772, June 8, 2006)
FACILITIES

Applicability of The Term Wages Facilities As Part Of Wages

GR: It applies to all employees. Facilities include those articles or services of

benefit to the employee and his family such as rice
XPNs: ration, housing, recreational facilities, medical
1. Farm tenancy or leasehold; treatment to dependents, school facilities, cost of
2. Household or domestic helpers, including light, water, fuel, meals or snacks. (Atok Big Wedge
family drivers and persons working in the Mutual Benefit Assn. v Atok Big Wedge Mining Co., 97
personal service of another; Phil. 294; Mayon Hotel v. Adana, G.R. No. 157634, 16
3. Home workers engaged in needlework or in May 2005).
any cottage industry duly registered in
accordance with law; (LC, Art. 98) Determination Of Facilities Beneficial To
4. Workers in any duly registered cooperatives Employer Or Employee
when so recommended by the Bureau of
Cooperative Development and upon approval It is significant to determine when articles or
of the SLE; services are beneficial to an employee because
5. Workers of a barangay micro business those articles or services which are not of benefit to
enterprise; (R.A. 9178) the employee cannot be charged against the cash
6. Retail and service establishments regularly wage of an employee. Articles or tools of the trade
employing not more than 10 workers. (RA that are primarily for the benefit of the employer or
6727, Sec. 4) necessary to the conduct of his business cannot be
deducted from the employer's wages because they
NOTE: Retail and service establishments must file are not considered as facilities. (Sec. 5, Rule VII,
an application for exemption with the duly Book III, Rules Implementing the Labor Code).
appropriate Regional Board.
Charging of Cost of Facilities
WAGE vs. SALARY
In order that the cost be charged against the Ee,
WAGE SALARY his/her acceptance of such facilities must be
(Gaa v.CA, G.R. No. 44169, 3 Dec. 1985) voluntary.
Compensation for Paid to “white collared
manual labor (skilled workers” and denotes Requirements For Deducting Values For
or unskilled) also a higher degree of Facilities
known as “blue employment or a
collared workers,” superior grade of

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1. Proof must be shown that such facilities are
customarily furnished by the trade;
2. The provision of deductible facilities must be
voluntarily accepted in writing; and,
3. The facilities must be charged at fair and
reasonable value. (Mabeza v. NLRC, G.R. No.
118506, 18 April 1997)
Q: Gamma Company pays its regular employees
P350.00 a day and houses them in a dormitory
inside its factory compound in Manila. Gamma
Company also provides them with three full
meals a day. In the course of a routine
inspection, a Department of Labor and
Employment (DOLE) Inspector noted that the
workers' pay is below the prescribed minimum
wage of P426.00 plus P30.00 allowance, and
thus required Gamma Company to pay wage
differentials. Gamma Company denies any
liability, explaining that after the market value
of the company-provided board and lodging are
added to the employees' P350 cash daily wage,
the employees' effective daily rate would be
way above the minimum pay required by law.
The company counsel further points out that
the employees are aware that their food and
lodging form part of their salary, and have long
accepted the arrangement.
Is the company's position legally correct? (2013
Bar Questions)
A: NO. The following requisites were not complied
with:
a. proof that such facilities are customarily
furnished by the trade
b. the provision of deductible facilities is
voluntarily accepted by the employee
c. the facilities are charged at the fair and
reasonable value. Mere availment is not
sufficient to allow deduction from employee’s
wages. (Mayon Hotel & Restaurant v. Adarna,
485 SCRA 609 [2005])
Non-Applicability of Estoppel
The acceptance of by an employee of the wages paid
him without objections does not give rise to
estoppel precluding him from suing for the
difference between the amount received and the
amount he should have received pursuant to a valid
minimum wage law. (1 Azucena, 2016, p. 320)
Minimum Wage Non-Negotiable; Non Waivable
The minimum wage fixed by law is mandatory; thus
it is non-waivable and non-negotiable. The
enactment is compulsory in nature in order to
ensure decent living conditions. (PAM Co. v. PAMEA-
FFW, 51 SCRA 98)
NON-DIMINUTION OF BENEFITS
GR: Nothing in the Labor Code shall be construed to
eliminate or in any way diminish supplements, or
other employee benefits being enjoyed at the time
of the promulgation of the Code. (LC, Art. 100)
Benefits being given to Ees cannot be taken back or
reduced unilaterally by the Er because the benefit
19
has become part of the employment contract,
whether written or unwritten.
XPN:
1. Correction of error
2. Contingent benefit or conditional bonus
3. Wage order compliance
4. Benefits on reimbursement basis
5. Reclassification of position
6. Negotiated benefits
7. Productivity incentives
NOTE: If the error is not corrected in a reasonable
time, it ripens into a company policy and Ees can
demand it as a matter of right.
Applicability of the Rule on Non-Diminution of
Benefits
It is applicable if it is shown that:
1. Grant of benefit is based on a policy or has
ripened into a practice over a long period;
2. Practice is consistent and deliberate;
3. Practice is not due to an error in the
construction or application of a doubtful or
difficult question of law; and,
4. It is done unilaterally by the employer.
Bonus
Refers to the payment in excess of regular or
guaranteed wages. It is granted to an employee for
his tangible contribution to the success of the
employer’s business, without which the employer
may not realize bigger profits. The contribution
may be in the form of an employee’s commitment to
the job, his industry and loyalty. (Metro Transit Org.,
Inc. v. NLRC, G.R. No. 116008, July 11, 1995)
GR: The payment of bonus is a management
function, not a demandable and enforceable
obligation, which cannot be enforced 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. (Philippine National Construction
Corporation v. NLRC, G.R. No. 128345, May 18, 1999)
XPN: Bonuses can be demanded as a matter of right
if:
a. Given without any condition; hence, part of the
wage or salary. (Atok Big Wedge Mining Co., Inc.
v. Atok Big Wedge Mutual Benefit Assn., 92 Phil.
754)
b. Grant thereof is a result of an agreement such
as the CBA. (Gery v. Insular Lumber, 93 Phil. 807)
c. Given on account of company policy or practice.
(Claparols v. CIR, 65 SCRA 613)
d. Grant is mandated by law.
Stoplock Gate or Nonchargeability Clause
This doctrine was resounded in this manner: the
CBA provides "It is hereby agreed that these salary
increases shall be exclusive of any wage increase
that may be provided by the law as a result of any
economic change."
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The Supreme Court ruled that the above provision
in the CBA is clear that the salary increases shall not
include any wage increase that may be provided by
law as a result of economic change. The CBA needs
no interpretation as it is not ambiguous. Thus, the
wage increase granted by the petitioner to its
employees under the CBA cannot be considered as
creditable benefit. (Mindanao Steel Corp. v Minsteel
Free Workers Organization, G.R. No. 130693, 4
March 2004; UKCEU-PTGWO v. Kimberly Clark Phils,
G.R. No. 162957, 6 March 2006)
Benefit Acquired Through Company Practice
An employee can demand as a matter of right
benefits granted by the employer for a
considerable, long period of time as the same may
ripen into a company practice. (Globe Mackay v.
NLRC, 163 SCRA 71)
PAYMENT BY RESULTS
Workers paid by result are:
1. Paid based on the work completed; and
2. Not on the time spent in working.
Pay of these workers is calculated not on the basis
of time spent on the job but of the quantity and
quality or the kind of work they turn out. (1
Azucena, 2016, p. 346)
It includes those who are paid on piece work,
“takay” or task basis, who shall be entitled to
receive not less than the prescribed statutory
minimum wage for an eight-hour work or a
proportion thereof for less than eight hours work
(Art. 124, infra.)
Categories of Workers Paid by Results
A. As to Presence of Control
1. Supervised (Piece-rate worker) - works directly
under the supervision of the employer.
2. Unsupervised (Takay or Pakyaw)- works away
from the employer’s premises.
B. As to Rate of Payment
1. Those who are paid piece rates which are
prescribed in Piece Rate Orders issued by
DOLE – Wages or earnings are determined by
simply multiplying the number of pieces
produced by the rate per piece.
2. Those who are paid output rates which are
prescribed by the Er and are not yet
approved by the DOLE – The number of pieces
produced is multiplied by the rate per piece as
determined by the Er.
a. If resulting amount is equivalent to or
more than the applicable statutory
minimum rate in relation to the number
of hours worked, worker will receive such
amount.
b. If the amount is less than the applicable
legal rate, employer is required by law to
pay the difference between the resulting
amount and the applicable legal minimum
rate. (1 Azucena,2016, p. 318)
20
PAYMENT OF WAGES
Forms of Payment
GR: The laborer’s wages shall be paid in legal
currency (Art. 1705, NCC)
No employer shall pay the wages of an employee by
means of:
1. Promissory notes;
2. Vouchers;
3. Coupons;
4. Tokens;
5. Tickets;
6. Chits; or
7. Any object other than legal tender.
XPN: Payment of wages by check or money order
shall be allowed if:
1. It is customary on the date of the effectivity of
the Code;
2. Necessary because of special circumstances as
specified in the regulation issued by the SLE; or,
3. Stipulated in the CBA. (LC, Art. 102)
4. Where the following conditions are met:
a. There is a bank or other facility for
encashment within a radius of one (1)
kilometer from the workplace;
b. The employer or any of his agents or
representatives does not receive any
pecuniary benefit directly or indirectly
from the arrangement;
c. The employees are given reasonable time
during banking hours to withdraw their
wages from the bank which time shall be
considered as compensable hours worked
if done during working hours; and,
d. The payment by check is with the written
consent of the employees concerned if
there is no collective agreement
authorizing the payment of wages by bank
checks. (IRR, Book III, Rule VIII, Sec. 2)
Time of Payment
GR: Wages shall be paid:
1. At least once every two (2) weeks, or,
2. Twice a month at intervals not exceeding
sixteen (16) days.
XPN:
1. On account of force majeure or circumstances
beyond the employer’s control, payment shall be
made immediately after such force majeure or
circumstances have ceased;
2. If engaged to perform a task which cannot be
completed in two (2) weeks shall be subject to the
following conditions, in the absence of a CBA or
arbitration award:
a. That payments are made at intervals not
exceeding sixteen (16) days, in proportion
to the amount of work completed;
b. That final settlement is made upon
completion of the work. (LC, Art. 103)
PROHIBITIONS REGARDING WAGES
Non-Interference in Disposal of Wages
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Employer shall not limit or interfere with the
freedom of any employee to dispose of his wages.
He shall not force, compel or oblige his Ees to
purchase merchandise, commodities or other
property from any other person, or otherwise make
use of any store services of such employer or any
other person. (LC, Art. 112)
Civil Code Provisions On Non-Interference In
Disposal Of Wages
Art. 1705. The laborer's wages shall be paid in legal
currency.
Art. 1706. Withholding of the wages, except for a
debt due, shall not be made by the employer.
Art. 1707. The laborer's wages shall be a lien on the
goods manufactured or the work done.
Art. 1708. The laborer's wages shall not be subject
to execution or attachment, except for debts
incurred for food, shelter, clothing and medical
attendance.
Art. 1709. The employer shall neither seize nor
retain any tool or other articles belonging to the
laborer.
Wage Deduction
GR: No employer, in his own behalf or in behalf of
any person, shall make any deduction from the
wages of his employees (LC, Art. 113).
XPNs:
1. Where the worker is insured with his consent
by the employer; and,
2. For union dues, in cases where the right of the
worker or his union to check off has been
recognized by the employer or authorized in
writing by the individual worker concerned
(LC, Art. 113).
NOTE: Art. 241(o) of the LC provides that
special assessments may be validly checked-off
provided that there is an individual written
authorization duly signed by every employee.
3. In cases where the employer is authorized by
law or regulations issued by the SLE:
a. Deductions for value of meals and facilities
freely agreed upon; (1 Azucena, 2016, p.
411)
b. In case where the employee is indebted to
the employer where such indebtedness has
become due and demandable; (NCC, Art.
1706)
c. In court awards, wages may be subject of
execution or attachment, but only for debts
incurred for food, shelter, clothing, and
medical attendance; (NCC, Art. 1703)
d. Taxes withheld pursuant to the Tax Code;
e. Salary deduction of a member of a legally
established cooperative; (R.A. 6938; LC, Art.
59)
f. Deductions for SSS, PhilHealth and Pag-ibig
premiums;
g. Deductions for loss or damage; (LC, Art.
114)
21
h. Deductions made with the written
authorization of the Ee for payment to a
third person; (IRR, Book III, Rule VIII, Sec
13)
i. Deductions as disciplinary measures for
habitual tardiness; (Opinion dated March
10, 1975 of the Labor Secretary)
j. Agency fees. (LC, Art. 248[e])
The law prohibits the employer from making
deductions from the wages of an employee. The evil
sought to be prevented is to forestall the
commission of unwarranted practices of employers
by making unnecessary deductions without
employee's knowledge or authorization.
(Galvadores v Trajano, 144 SCRA 138)
Deposit for Loss or Damage
GR: Employer shall not 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.
(LC, Art.114)
XPN: Er is engaged in such trade or business where
the practice of making deductions or requiring
deposits is a recognized one, or is necessary or
desirable as determined by the SOLE. (ie Security
Services)
Requisites for Payment Of Loss And Damage
1. It is clearly shown that the employee is
responsible for the loss or damage;
2. The employee is given reasonable opportunity
to show cause why deduction should not be
made;
3. The total amount of such deductions is fair and
reasonable and shall not exceed the actual loss
or damage; and,
4. The deduction from the wages of the employee
does not exceed 20% of his wages in a week
(L.A. No. 11, Series of 2014)
WAGE STUDIES, WAGE AGREEMENTS AND
WAGE DETERMINATION
REGIONAL MINIMUM WAGE
Minimum wage is the lowest wage rate fixed by
law that an employer can pay his workers. (RA
6727, Implementing Rules) Compensation which is
less than such minimum rate is considered an
underpayment that violates the law. (1 Azucena,
2016, p. 317)
Wage Order
This is an order issued by the RTWPB whenever
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.
It establishes the minimum wage rates to be paid by
employers in the region, which shall in no case be
lower than the applicable statutory minimum wage
rates.
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Frequency of Wage Order
G.R: Any wage order issued by the RTWPB may not
be disturbed for a period of 12 months from its
effectivity, and no petition for wage increase shall
be entertained within the said period.
XPNS: Supervening conditions, e.g. extraordinary
increase in prices of petroleum products and basic
goods/services, demand a review of the minimum
wage rates as determined by the Board. The Board
shall proceed to exercise its wage fixing function
even before the expiration of the said period.
(NCWP Guidelines No. 001-95)
Effectivity of Wage Order
A Wage Order shall take effect 15 days after its
publication in at least one (1) newspaper of general
circulation in the region.
NOTE: It is the RTWPB who approves the wage
order, not the NWPC.
METHODS OF MINIMUN WAGE ADJUSTMENT
Salary Ceiling Method
A method of minimum wage adjustment whereby
the wage adjustment is applied to Ees receiving a
certain denominated salary ceiling. In other words,
workers already being paid more than the existing
minimum wage are also to be given a wage increase
(ECOP v. NWCP, G.R. No. 96169, September 24, 1991).
Floor Wage Method
It involves the fixing of a determinate amount to be
added to the prevailing statutory minimum wage
rates.
Q: The Regional Wage Board of Region II issued
a Wage Order granting all Ees in the private
sector throughout the region an across-the-
board increase of P15.00 daily. Is this Wage
Order valid?
A: It depends. The Wage Order is valid insofar as
the mandated increase applies to Ees earning the
prevailing minimum wage rate at the time of the
passage of the Wage Order and void with respect to
its application to Ees receiving more than the
prevailing minimum wage rate at the time of the
passage of the Wage Order. The Regional Wage
granted an across-the-board wage increase of
P15.00 to all Ees in the region. It did not set a wage
level nor a range to which a wage adjustment or
increase shall be added. In doing so, the Regional
Wage Board exceeded its authority by extending
the coverage of the Wage Order to wage earners
receiving more than the prevailing minimum wage
rate, without a denominated salary ceiling. The
Wage Order granted additional benefits not
contemplated by R.A. No. 6727 (MBTC v. NWPC
Commission, G.R. No. 144322, February 06, 2007).
Q: Since the Wage Order was declared void with
respect to its application to employees
22
receiving more than the prevailing minimum
wage rate at the time of the passage of the Wage
Order, should these Ees refund the wage
increase received by them?
A: NO. The Es should not refund the wage increase
provided they received it in good faith, in the honest
belief that they are entitled to such wage increase
and without any knowledge that there was no legal
basis for the same (MBTC v. NWPC Commission, G.R.
NO.144322, February 06, 2007).
WAGE DISTORTION/RECTIFICATION
A situation where an increase in wage results in the
elimination or severe contraction of intentional
quantitative differences in wage or salary rates
between and among- the 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 (LC, Art. 124).
Elements of Wage Distortion
1. An existing hierarchy of positions with
corresponding salary rates.
2. A significant change or increase in the salary
rate of a lower pay class without a
corresponding increase in the salary rate of a
higher one;
3. The elimination of the distinction between the
2 groups or classes; and
4. The WD exists in the same region of the country
(Alliance Trade Unions v. NLRC, G.R. No. 140689,
February 17, 2004).
In mandating an adjustment, the law did not
require that there be an elimination or total
abrogation of quantitative wage or salary
differences; a severe contraction is enough
(Metrobank v. NLRC, G.R. No. 102636, September 10,
1993).
Causes
Wage distortions have often been the result of:
1. Government decreed increases in minimum
wages
2. Merger of two companies (with differing
classifications of employees and different wage
rates) where the surviving company absorbs all
the employees of the dissolved corporation,
3. Wage distortion arose because the effectivity
dates of wage increases given to each of the two
classes of employees (rank-and-file and
supervisory) had not been synchronized in their
respective CBAs (Metro Transit Org., Inc. v
NLRC, 67 SCRA 477)
Q: Bankard, Inc. approved a New Salary Scale
which increased the hiring rates of new
employees. The Bankard Employees Union
pressed the company for the increase in the
salary of its old, regular employees. The
company refused to do so. The union filed a
Notice of Strike on the ground of discrimination
for it claimed that a wage distortion exists and
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the company refused to negotiate to correct the If the

distortions. Is there a wage distortion brought divisor used
about by the New Salary Scale? is:
365 (days in All the 12 holidays, 52 Sundays
A: NO. The union cannot legally obligate the a year) and 52 Saturdays are paid.
Bankard to correct the alleged “wage distortion” as 313 12 holidays and 52 Sundays (or
the increase in the wages and salaries of the newly- (365 – 52 = Saturdays) are paid.
hired was not due to a prescribed law or wage 313)
order. If the compulsory mandate under Art. 124 to 261 All the 12 holidays are paid
correct wage distortion is applied to voluntary and (313 – 52 = excluding the Saturdays and
unilateral increases by the employer in fixing hiring 261) Sundays.
rates which is inherently a business judgment 249 The 12 holidays are not paid.
prerogative, then the hands of the employer would (261 – 12 =
be completely tied even in cases where an increase 249)
in wages of a particular group is justified due to a
re-evaluation of the high productivity of a DIVISOR TO DETERMINE DAILY RATE
particular group or the need to increase the
competitiveness of Bankard’s hiring rate. An Computation of Estimated Equivalent Monthly
employer would be discouraged from adjusting the Rate (EEMR)
salary rates of a particular group of employees for
fear that it would result to a demand by all 1. For those who are required to work every day
employees for a similar increase, especially if the including Sundays or rest days, special days
financial conditions of the business cannot address and regular holidays.
an across-the-board increase (Bankard Employees
Union-WTU v. NLRC, G.R. No. 140689, February 17, EEMR = (Applicable daily rate x 393.50 days)/12
2004). Where 393.50:
= 298 ordinary working days
Settlement of Wage Distortion = 24 for 12 regular holidays x 200%
= 67.60 for 52 rest days x 130%; and
The application of wage increases brought about by = 3.90 for 3 special days x 130%
Wage Orders issued by the Board may result in
distortions in the wage structure within the 2. For those who do not work and are not
establishment. The employer and the workers are considered paid on Sundays or rest days.
mandated by law to resolve such wage distortion
problems in the following manner: EEMR = (Applicable daily rate x 313 days)/12
Where 313:
ORGANIZED UNORGANIZED = 298 ordinary working days
ESTABLISHMENT ESTABLISHMENT = 12 regular holidays; and
(with union) (without union) = 3 special holidays
The Er and the
The Er and the union
workers shall 3. For those who do not work and are not
shall negotiate to
endeavor to correct considered paid on Saturdays and Sundays or
correct distortion.
the distortion. rest days
Any dispute shall be
Any dispute shall be
resolved through a EEMR = (Applicable daily rate x 261 days)/12
settled through the
grievance procedure Where 261:
NCMB.
under the CBA. = 246 ordinary working days
If it remains If it remains = 12 regular holidays; and
unresolved, it shall be unresolved within 10 = 3 special holidays
dealt with through days it shall be
voluntary arbitration. referred to the NLRC. LEAVE
The dispute will be The NLRC shall
resolved within 10 conduct continuous SERVICE INCENTIVE LEAVE
days from the time the hearings and decide
dispute was referred the dispute within 20 Service incentive leave (SIL)
to voluntary days from the time the
arbitration. same was referred. It is 5-days leave with pay for every Ee who has
rendered at least 1 year of service. It is commutable
DIVISOR to its money equivalent if not used or exhausted at
the end of the year.
The divisor assumes an important role in
determining whether or not holiday pay is already “At least 1 year of service”: Service for not less
included in the monthly paid employee’s salary and than 12 months, whether continuous or broken
in the computation of his daily rate (Chartered Bank reckoned from the date the Ee started working,
Employees Association v. Ople, G.R. No. L-44717, including authorized absences and paid regular
August 28, 1985). holidays unless the working days in the
establishment as a matter of practice or policy, or
that provided in the employment contract is less
than 12 months, in which case said period shall be
considered as one year. (Sec. 3, Rule V, Book III, IRR)
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Right to SIL
GR: Every employee who has rendered at least 1
year of service shall be entitled to a yearly SIL of 5
days with pay. Leave pay means an employee gets
paid despite absence from work (1 Azucena, 2016
page 295).
XPNs:
1. Government employees, whether employed by
the National Government or any of its political
subdivisions, including those employed in
government-owned and/or controlled
corporations with original charters or created
under special laws;
2. Persons in the personal service of another;
3. Managerial employees, if they meet all of the
following conditions:
a. Their primary duty is to manage the
establishment in which they are employed
or of a department or subdivision thereof;
b. They customarily and regularly direct the
work of two or more employees therein;
and
c. They have the authority to hire or fire other
employees of lower rank; or their
suggestions and recommendations as to
hiring, firing, and promotion, or any other
change of status of other employees are
given particular weight.
4. Officers or members of a managerial staff, if
they perform the following duties and
responsibilities:
a. Primarily perform work directly related to
management policies of their employer;
b. Customarily and regularly exercise
discretion and independent judgment;
c. (1) Regularly and directly assist a
proprietor or managerial employee in the
management of the establishment or
subdivision thereof in which he or she is
employed; or (b) execute, under general
supervision, work along specialized or
technical lines requiring special training,
experience, or knowledge; or (c) execute,
under general supervision, special
assignments and tasks; and
d. Do not devote more than twenty percent
(20%) of their hours worked in a
workweek to activities which are not
directly and closely related to the
performance of the work described in
e. paragraphs 4.a, 4.b, and 4.c above;
5. Field personnel and those whose time and
performance is unsupervised by the employer;
6. Those already enjoying this benefit;
7. Those enjoying vacation leave with pay of at
least 5 days; and
8. Those employed in establishments regularly
employing less than 10 employees.
Part-time Workers Are Entitled To The Full
Benefit Of The Yearly 5-Day Service Incentive
Leave
A part-time worker is entitled to service incentive
leave whether the service within 12 months is
continuous or broken or where the working days in
the employment contract as a matter of practice or
24
policy is less than 12 months. The availment and
commutation of the same can be proportionate to
the daily work rendered and the regular daily
salary. (DOLE’s explanatory Bulletin on Part-time
Employment, January 2, 1996)
Entitlement of Piece-Rate Workers To SIL
Piece-rate workers are entitled to the full benefit of
the yearly 5-day service incentive leave. Under P.D.
851 or the SIL Law, the exclusion from its coverage
of workers who are paid on a purely commission
basis is only with respect to field personnel. Ees
engaged on task or contract basis or paid on
purely commission basis are not automatically
exempted from the grant of SIL, unless, they fall
under the classification of field personnel (Serrano
v. Severino Santos, G.R. No. 187698, August 09,
2010).
Commutability of SIL to monetary equivalent
It is commutable if not used at the end of the year.
It is aimed primarily at encouraging workers to
work continuously and with dedication to the
company.
XPN:
RA 10361 grants SIL to domestic workers. Their SIL
need not be converted to cash or carried over to
succeeding years.
Basis for cash conversion
The basis shall be the salary rate at the date of
commutation. The availment and commutation of
the SIL may be on a pro-rata basis (Handbook on
Workers’ Statutory Monetary Benefits, Bureau of
Working Conditions, 2016).
Prescription of SIL
Applying Article 291 of the Labor Code in light of
the peculiarity of SIL, the three (3)-year
prescriptive period commences, not at the end of
the year when the employee becomes entitled to
the commutation of his service incentive leave, but
from the time when the employer refuses to pay its
monetary equivalent after demand of commutation
or upon termination of the employees services, as
the case may be. (Autobus Transport Systems v.
Bautista G.R. No. 156367, 16 May 2005)
MATERNITY LEAVE
Coverage
This benefit applies to all female employees,
whether married or unmarried.
A covered female Ee, regardless of her civil status,
is entitled to a daily maternity benefit equivalent to
100% of her present basic salary, allowances and
other benefits or the cash equivalent of such
benefits for 60 days or 78 days in case of caesarean
delivery.
Requirements in order that maternity benefits
may be claimed
1. The female member should be employed at the
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time of delivery, miscarriage or abortion;
2. She must have notified SS through her
employer; and
3. She has paid at least three months of maternity
contributions within the 12-month period
immediately before the semester of
contingency
Entitlement to maternity leave benefits is not
dependent on the civil status of the pregnant
woman. Entitlement to maternity benefi forecloses
entitlement to sick benefit.
Maternity leave benefits excluded in the
computation of 13th month pay
Maternity leave benefits and other benefits
provided by Social Security Act are granted to
employees in lieu of wages. Thus, the same are
excluded in computing the employee's 13th month
pay for the calendar year. (Handbook on Workers’
Statutory Monetary Benefits, p. 37)
Self-Employed Members Not Entitled To
Maternity Leave Benefits; Exception
Self-employed members not entitled to maternity
leave benefits since Voluntary or self-employed
members have no employers to remit such
contributions. However, if they have qualifying
contributions using the new contribution schedule,
they shall be entitled to maternity benefits.
PATERNITY LEAVE
Paternity leave
It refers to the benefits granted to a married male
Ee allowing him not to report for work for 7 days
but continues to earn the compensation therefore,
on the condition that his spouse has delivered a
child or suffered a miscarriage for purposes of
enabling him to effectively lend support to his wife
in her period of recovery and/or in the nursing of
the newly-born child. In the event it is not availed
of, such leave is not convertible to cash.
Concept of paternity leave benefits
Every married male Ee in the private and public
sectors shall be entitled to a paternity leave of 7
days with full pay for the first 4 deliveries of the
legitimate spouse with whom he is cohabiting.
Conditions for Entitlement To Paternity Leave
The male Ee is:
1. Legally married to, and is cohabiting with the
woman who delivers the baby;
2. Ee of private or public sector;
3. Maybe availed of only for the first 4 deliveries
of the legitimate spouse with whom he is
cohabiting; and
4. Notify his Er of the pregnancy of his legitimate
spouse and the expected date of such delivery
NOTE: Delivery shall include childbirth or any
miscarriage.
25
In the event it is not availed of, such leave is not
convertible to cash. (RA 8187)
PARENTAL LEAVE FOR SOLO PARENTS
Governing Law: R.A. No. 8972 (The Solo Parent’s
Welfare Act of 2000)
Parental leave
Leave benefits granted to a solo parent to enable
him/her to perform parental duties and
responsibilities - where physical presence is
required.
In addition to leave privileges under existing laws,
parental leave of not more than 7 working days
every year shall be granted to any solo parent Ee
who has rendered service of at least 1 year. (Sec. 8,
RA 8972)
Conditions for entitlement of parental leave
1. He or she must fall among those referred to as
a solo parent;
2. Must have the actual and physical custody of
the child or children;
3. Must have at least rendered service of one year
to his or her employer;
4. He or she must remain a solo parent;
5. He or she must have a SOLO PARENT ID issued
by the DSWD; and
6. He must notify the employer of the availment
thereof within reasonable period of time.
Persons considered a solo parent entitled to
parental leave
Any individual who falls under any of the ff.
categories:
1. A woman who gives birth as a result of rape and
other crimes against chastity even without a
final conviction of the offender; Provided, That
the mother keeps and raises the child;
2. Parent left solo or alone with the responsibility
of parenthood due to:
a. Death of spouse;
b. Detention or service of sentence of spouse
for a criminal conviction for at least 1 yr;
c. Physical and/or mental incapacity of
spouse
d. Legal separation or de facto separation
from spouse for at least 1 year as long as
he/she is entrusted with the custody of the
children;
e. Nullity or annulment of marriage as
decreed by a court or by a church as long as
he/she is entrusted with the custody of the
children;
f. Abandonment of spouse for at least 1 yr;
3. Unmarried mother/father who has preferred to
keep and rear his or her child/children instead
of:
a. having others care for them or
b. give them up to a welfare institution;
4. Any other person who solely provides:
a. parental care and
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b. support to a child or children;
5. Any family member who assumes the
responsibility of head of family as a result of the:
a. death,
b. abandonment,
c. disappearance or
d. prolonged absence of the parents or solo
parent.
Termination of the Benefit
A change in the status or circumstance of the parent
claiming benefits under this Act, such that he/she is
no longer left alone with the responsibility of
parenthood, shall terminate his/her eligibility for
these benefits. (Sec. 3, RA 8972)
LEAVES FOR VICTIMS OF VIOLENCE AGAINST
WOMEN and their CHILDREN (R.A. 9262)
Violence against women and their children
refers to any act or a series of acts committed by any
person against a woman who is his wife, former
wife, or against a woman with whom the person has
or had a sexual or dating relationship, or with
whom he has a common child, or against her child
whether legitimate or illegitimate, within or
without the family abode, which result in or is likely
to result in physical, sexual, psychological harm or
suffering, or economic abuse including threats of
such acts, battery, assault, coercion, harassment or
arbitrary deprivation of liberty (Sec 3(a), R.A. 9262).
A female Ee who is a victim of violence (physical,
sexual, or psychological) is entitled to a paid leave
of 10 days in addition to other paid leaves (R.A.
9262, Anti- VAWC Act). This is known as the
battered woman leave.
Leave Entitlement
It allows the victim of violence, which may be
physical, sexual, or psychological, to apply for the
issuance of a protection order. If such victim is an
employee, she is entitled to a paid leave of up to 10
days in addition to other paid leaves under the
Labor Code, other laws and company policies.
The employee has to submit a certification from the
Punong Barangay or Kagawad, prosecutor or clerk
of court that an action under RA 9262 has been filed
and is pending.
For government employees in addition to the
certification, the employee concerned must file an
application for leave citing as basis R.A. 9262.
Noncumulative/ Non-Conversion to Cash
The availment of the ten day-leave shall be at the
option of the woman employee, which shall cover
the days that she has to attend to medical and legal
concerns. Leaves not availed of are noncumulative
and not convertible to cash.
SPECIAL LEAVE BENEFIT FOR WOMEN
A woman Ee having rendered continuous aggregate
employment service of at least 6 months for the last
26
12 months shall be entitled to a special leave benefit
of 2 months with full pay based on her gross
monthly compensation following surgery caused by
gynaecological disorders (Sec. 18, R.A. 9710, Magna
Carta of Women)
Conditions to Claim Benefit
1. She has rendered at least six (6) months
continuous aggregate employment service for
the last twelve (12) months prior to surgery;
2. In the event that an extended leave is
necessary, the female employee may use her
earned leave credits; and
3. This special leave shall be non-cumulative and
nonconvertible to cash (Sec. 21, IRR, R.A. 9710,
Magna Carta of Women).
Gynecological Disorders
Refers to disorders that would require surgical
procedures such as, but not limited to, dilatation
and curettage and those involving female
reproductive organs such as the vagina, cervix,
uterus, fallopian tubes, ovaries, breast, adnexa and
pelvic floor, as certified by a competent physician.
For purposes of the Act and these Rules and
Regulations, gynecological surgeries shall also
include hysterectomy, ovariectomy, and
mastectomy (Sec. 7(M), IRR, R.A. 9710, Magna Carta
of Women).
Frequency of Availment
A female employee can avail of the special leave
benefit for every instance of surgery due to
gynecological disorder for a maximum total period
of 2 months per year (Sec. 6, DO 112-A, DOLE, Series
of 2012).
SPECIAL GROUPS OF EMPLOYEES
WOMEN WORKERS
Discriminatory Acts Against Women Ees
State Policy On Non-Discrimination Against
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 (R.A. 9710 or the Magna
Carta of Women, Sec. 2).
The State shall take steps to review and, when
necessary, amend and/or repeal existing laws that
are discriminatory to women within 3 years from
the effectivity of this Act (R.A. 9710, Sec. 12).
Discriminatory Acts Against Women Employee
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1. Discrimination with respect to the terms and
conditions of employment solely on account of
sex.
a. Discrimination in pay – Payment of a lesser
compensation including wage, salary or
other forms of remuneration and fringe
benefits, to a female employee as against a
male employee;
b. Discrimination in employment opportunity
– favoring a male employee over a female
employee with respect to promotion,
assignment, transfer, training
opportunities, study and scholarship
grants solely in account or their sexes; (LC,
Art. 133)
c. Discrimination in hiring – favoring a male
applicant with respect to hiring where the
particular job can equally be handled by a
woman;
d. Discrimination in dismissal – favoring a
male employee over a female employee
with respect to dismissal of personnel or
the application of the last in / first out
principle or other retrenchment policy of
the employer. (Poquiz, 2012)
1. Stipulating, whether as a condition for
employment or continuation of employment:
a. That a woman employee shall not get
married; or
b. That upon marriage, such woman
employee shall be deemed resigned or
separated (LC, Art. 134).
2. Dismissing, discriminating or otherwise
prejudice a woman employee by reason of her
being married (LC, Art. 134).
Standard of reasonable test
The Er has the burden of proof to prove the
existence of a reasonable business necessity that
would justify an employment policy. (Star Paper
Corp. v. Simbol, G.R. No. 164774, April 12, 2006).
STIPULATION AGAINST MARRIAGE
It shall be unlawful for an employer to require as a
condition of employment or continuation of
employment that a woman employee shall not get
married, or to stipulate expressly or tacitly that
upon getting married, a woman employee shall be
deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise
prejudice a woman employee merely by reason of
her marriage (LC, Art. 134).
No-Spouse Employment Policy
It is a policy banning spouses from working in the
same company. Generally, spouses are allowed
from working in the same company, provided it is
not in the same department, where there is direct
supervision or control. In case spouses are in the
same department, one of them may be reassigned
to another department.
XPN: Bona Fide Occupational Qualification
(BFOQ) Rule
27
Where the job itself necessarily requires a
particular question, then the job applicant or
worker who does not possess it may be disqualified
on that basis. This will not be unlawful
discrimination. (1, Azucena, 2016, p. 481)
NOTE: There must be a finding of any BFOQ to
justify an Er’s no spouse employment rule, the Er
must prove two factors:
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 (Star Paper v.
Simbol, G.R. No. 164774, April 12, 2006).
Prohibited acts
It shall be unlawful for any employer to:
1. Deny any woman employee benefits provided
by law.
2. Discharge any woman for the purpose of
preventing her from enjoying any of the
benefits provided by law.
3. Discharge such woman on account of her
pregnancy, or while on leave or in confinement
due to her pregnancy.
4. Discharge or refuse the admission of such
woman upon returning to her work for fear
that she may again be pregnant. (LC, Art. 135)
ANTI-SEXUAL HARASSMENT ACT
(R.A. 7877)
Requisites:
1. Act is committed in a work, education, or
training-related environment;
2. The doer, the harasser, is any person who has
authority, influence or moral ascendancy over
another;
3. Doer demands or requests, or requires a
sexual favor from the victim;
4. It does not matter whether such demand is
accepted or not. (RA 7877, Sec. 3)
The definition of sexual harassment does not
require a categorical demand or request for
sexual favor
It may be discerned, with equal certitude, from the
acts of the offender.
Likewise, it is not essential that the demand,
request or requirement be made as a condition for
continued employment or for promotion to a higher
position. It is enough that the respondent’s acts
result in creating an intimidating, hostile or
offensive environment for the employee (Domingo
v. Rayala, G.R. No. 155831, February 18, 2008).
Places where sexual harassment are committed
1. In a work-related or employment environment.
ELEMENTS:
a. The sexual favor is made as a condition in
the hiring or in the employment, re-
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 UST LAW PRE-WEEK NOTES 2018
employment or continued employment of
said individual, or in granting said
individual favorable compensation, terms,
conditions, promotions, or privileges; or
the refusal to grant the sexual favor results
in limiting, segregating or classifying the
employee which in a way would
discriminate, deprive or diminish
employment opportunities or otherwise
adversely affect said employee (Quid Pro
Quo Sexual Harassment);
b. The above acts would impair the
employees’ rights or privileges under
existing labor laws; or
c. The above acts would result in an
intimidating, hostile, or offensive
environment for the employee (Hostile
Environment Harassment).
2. In an education or training environment
ELEMENTS:
a. Sexual harassment is employed:
i. Against one who is under the care,
custody or supervision of the
offender;
ii. Against one whose education,
training, apprenticeship or tutorship
is entrusted to the offender;
b. When 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
c. When sexual advances result in an
intimidating, hostile or offensive
environment for the student, trainee or
apprentice.
Liability of the Er, head of office, educational or
training institution
Er shall be solidarily liable for damages arising
from the acts of Sexual Harassment committed in
the employment, education or training
environment, provided:
1. The Er or head of office, educational or
training institution is informed of such acts by
the offended party; and
2. No immediate action is taken thereon (R.A.
7877, Sec. 5).
Nothing under R.A. 7877 shall preclude the victim
of work, education or training-related Sexual
Harassment from instituting a separate and
independent action for damages and other
affirmative relief.
An act of Sexual Harassment may give rise to civil,
criminal and administrative liability on the part of
the offender, each proceeding independently of the
others.
Prescription of action: The civil, criminal and
administrative action shall prescribe in 3 years.
EMPLOYMENT OF MINOR WORKERS;ACT
AGAINST CHILD LABOR (R.A. 9231) AND CHILD
ABUSE LAW (R.A. 7610)
28
GR:
1. No person under 18 years of age will be
allowed to be employed in an undertaking
which is hazardous or deleterious in nature.
2. No Er shall discriminate against any person in
respect to terms and conditions of employment
on account of his age.
XPNs:
A. Below 15 yrs. Old
1. The child works directly under the sole
responsibility of his parents or legal guardian
and where only members of the family are
employed, subject to the following conditions:
a. Employment does not endanger the child’s
safety, health and morals
b. Employment does not impair the child’s
normal development
c. Er-parent or legal guardian provides the
child with the primary and/or secondary
education prescribed by the Department of
Education
2. The child’s employment or participation in
public entertainment or information through
cinema, theater, radio or television is essential
provided:
a. Employment contract is concluded by the
child’s parents or legal guardian,
b. With the express agreement of the child
concerned, if possible, and
c. The approval of DOLE, the following must
be complied with:
i. The employment does not involve
advertisement or commercials
promoting alcoholic beverages,
intoxicating drinks, tobacco and its by-
products or exhibiting violence
ii. There is a written contract approved by
DOLE
iii. The conditions provided in the first
instance are met
B. Above 15 but below 18 – May be employed in
any non-hazardous work
C. Above 18 – No prohibition
Ownership, Usage and Administration of the
Working Child’s Income
The wages, salaries, earnings and other income of
the working child shall belong to him/her in
ownership and shall be set aside primarily for
his/her support, education or skills acquisition and
secondarily to the collective needs of the family:
Provided, That not more than twenty percent
(20%) of the child's income may be used for the
collective needs of the family. (Sec. 12-B, R.A. 7610)
Trust Fund to Preserve Part of the Working
Child’s Income
The parent or legal guardian of a working child
below eighteen (18) years of age shall set up a trust
fund for at least thirty percent (30%) of the
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 LABOR LAW AND SOCIAL LEGISLATION
earnings of the child whose wages and salaries from
work and other income amount to at least two
hundred thousand pesos (P200, 000.00) annually,
for which he/she shall render a semi-annual
accounting of the fund to the Department of Labor
and Employment. The child shall have full control
over the trust fund upon reaching the age of
majority. (Sec. 12-C, R.A. 7610)
Duty of the employer before engaging a minor
into employment
The employer shall first secure a work permit from
the DOLE which shall ensure observance of the
requirements (R.A. 7160, Sec. 12).
Child labor
Any work or economic activity performed by a child
that subjects him or her to any form of exploitation
or is harmful to his or her health and safety or
physical, mental or psychosocial development.
Worst forms of labor
1. All forms of slavery (Anti-Trafficking of Persons
Act of 2003) or practices similar to slavery such
as sale and trafficking of children, debt bondage
and serfdom and forced or compulsory labor,
including recruitment of children for use in
armed conflict;
2. The use, procuring, offering of a child for
prostitution, for the production
pornography or for pornographic
performances;
3. The use, procuring, offering or exposing of a
child for illegal or illicit activities, including the
production and trafficking of dangerous drugs
and volatile substances prohibited under
existing laws;
4. Employing child models in all commercials or
advertisements promoting alcoholic
beverages, intoxicating drinks, tobacco and its
by-products and violence; and
5. Work which, by its nature or circumstances in
which it is carried out, is hazardous or likely to
be harmful to the health, safety or morals of
children.
EMPLOYMENT OF HOUSEHELPERS and
HOMEWORKERS
Persons covered by R.A. 10361 otherwise
known as “Batas Kasambahay”
All kasambahay engaged in domestic work,
whether on a live-in or live-out arrangement, such
as, but not limited to, the following:
1. General househelp;
2. Nursemaid or Yaya;
3. Cook;
4. Gardener;
5. Laundry person;
6. Working children or domestic workers 15
years and above but below 18 years of age; or
7. Any person who regularly performs domestic
work in one household on an occupational
basis (live-out arrangement). (Sec. 3[d], R.A.
10361)
Persons not covered by the batas kasambahay
1. Service providers
2. Family drivers
3. Children under foster family arrangement; and
4. Any other person who performs work
occasionally or sporadically and not on an
occupational and regular basis.
Employable age for a kasambahay
The employable age for a kasambahay is 15 years
old and above.
NOTE: The employment of children 15 but below
18 years of age may be made under the following
conditions:
1. They shall not be allowed to work for more
than 8 hours a day, and in no case beyond 40
hours a week;
2. They shall not be allowed to work between 10
p.m. to 6 a.m. of the following day;
3. They shall not be allowed to do hazardous
work; and
4. They shall not be denied access to education
and training.
The consent of the parent/guardian of working
children is required in the employment contract.
of Employer’s household
Household refers to the immediate family members
or other occupants of the house who are directly
and regularly provided services by the kasambahay.
13th month pay
The kasambahay is entitled to 13th month pay after
1 month of service.
Computation of the 13thmonth pay
In computing the 13thmonth pay, the total basic
wage received in a given calendar year shall be
divided by 12. The amount derived shall be paid not
later than December 24.
SSS, PHILHEALTH, and PAG-IBIG
The kasambahay is covered by SSS, PhilHealth and
Pag-IBIG after 1 month of service.
GR: The Er shall pay the SSS premium, and
PHILHEALTH and PAG-IBIG contributions of the
kasambahay
XPN: If the wage of the kasambahay is Php 5,000.00
or more, the kasambahay will pay his/her share in
the premiums/contributions.
Pre-employment requirements
Before entering into an employment contract, the
employer has the option to require the following
from a kasambahay:
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 UST LAW PRE-WEEK NOTES 2018

1. Medical certificate or health certificate issued Monthly minimum wage of a kasambahay

by a local government health officer;
2. Barangay and police clearance; Employed In Amount
3. NBI clearance; and National Capital
4. Duly authenticated birth certificate or, if not Php 2, 500
Region
available, voter’s identification card, baptismal Cities and 1st Class
record, or passport showing the kasambahay’s Php 2, 000
Municipalities
age. Other Municipalities Php 1, 500(Section
24, RA 10361)
NOTE: All expenses made pursuant to the availment
of pre-employment requirements should be Grounds for termination of contract by the
shouldered by the employer. Requirements are kasambahay
mandatory when the employment of the
kasambahay is facilitated through a private 1. Verbal or emotional abuse of the kasambahay
employment agency. by the employer or any member of the
household;
Registration of the kasambahay 2. Inhuman treatment including physical abuse of
the kasambahay by the employer or any
The employer is required to register the member of the household;
kasambahay in the Registry of Domestic Workers in 3. Commission of a crime or offense against the
the barangay where the employer resides. For this kasambahay by the employer or any member of
purpose, the DILG, in coordination with the DOLE, the household;
shall formulate a registration system. 4. Violation by the employer of the terms and
conditions of the employment contract and
NOTE: The registration of the kasambahay is free of other standards set forth under the law;
charge. 5. Any disease prejudicial to the health of the
kasambahay, the employer, or member/s of the
Mandatory benefits of a kasambahay household; and
6. Other causes analogous to the foregoing (Sec.
1. Monthly minimum wage; 33, R.A. 10361).
2. Daily rest period of 8 (total) hours;
3. Weekly rest period of 24 (uninterrupted) hours Grounds for termination of contract by the
4. 5 days annual service incentive leave with pay; employer
5. 13th month pay;
6. SSS benefit; 1. Misconduct or willful disobedience by the
7. PhilHealth benefit; and kasambahay of the lawful order of the
8. Pag-IBIG benefit employer in connection with the former’s
work;
Other rights and privileges of a kasambahay 2. Gross or habitual neglect or inefficiency by the
kasambahay in the performance of duties;
1. Freedom from employer’s interference in 3. Fraud or willful breach of the trust reposed by
wage disposal; the employer on the kasambahay;
2. Standard of treatment; 4. Commission of a crime or offense by the
3. Board, lodging, and medical attendance; kasambahay against the person of the
4. Right to privacy; employer or any immediate member of the
5. Access to outside communication; employer’s family;
6. Access to education and training; 5. Violation by the kasambahay of the terms and
7. Right to be provided a copy of the employment conditions of the employment contract and
contract; other standards set forth under the law;
8. Right to Certificate of Employment; 6. Any disease prejudicial to the health of the
9. Right to form, join, or assist labor kasambahay, the employer, or member/s of
organization; the household; and
10. Right to terminate employment based on just 7. Other causes analogous to the foregoing (Sec.
cause; and 34, Ibid.).
11. Right to exercise religious beliefs and cultural
practices. Effect of unjust dismissal by the employer

Basic necessities of a kasambahay The kasambahay shall receive the following if

1. At least 3 adequate meals a day, taking into
consideration the kasambahay’s religious
beliefs and cultural practices;
2. Humane sleeping condition; and
3. Appropriate rest and basic medical assistance.
NOTE: Though not part of the “basic necessities”
required to be provided by the employer to the
kasambahay, shampoo, soap, toothpaste etc. may
be provided gratuitously.
he/she is unjustly dismissed by the employer:
1. Outright payment of earned wage; and
2. Indemnity benefit in the form of wage
equivalent to 15 days work.
Liabilities of a kasambahay who leaves his/her
employer without justifiable reason
1. Forfeiture of wage equivalent to 15 days work;
and

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2. Reimbursement of the deployment expenses,

if the employment contract is terminated
within 6 months from employment.
NOTE: A househelp, a laundrywoman, a driver,
houseboy or gardener working in staff houses of a
company who attends to the needs of the
company’s guests is not a househelper or domestic
servant. He is an industrial worker who must be
paid the industrial rate.
Homeworkers
1. The homeworker is clearly shown to be
responsible for the loss or damage;
2. The employee is given reasonable opportunity
to show cause why deductions should not be
made;
3. The amount of such deduction is fair and
reasonable and shall not exceed the actual loss
or damages; and
4. The deduction is made at such rate that the
amount deducted does not exceed 20% of the
homeworker’s earnings in a week (DO No. 05-
92, Sec. 8).

They are those who perform in or about his own

home any processing or fabrication of goods or
materials, in whole or in part, which have been
furnished directly or indirectly, by an employer and NIGHT WORK (R.A. 10151)
sold thereafter to the latter.
NOTE: RA No. 10151 inserted Chapter V (Art. 154-
NOTE: DO No. 05-92, DOLE (February 4, 1992) 161) under Book 3, Title III of the LC.
amended Rule XIV of the IRR.
Night work
Industrial homework
Night work is at least seven consecutive hours of
It is a system of production under which work for work between 10:00pm and 6:00am. (D.O. No. 119-
an employer or contractor is carried out by a 12)
homeworker at his/her home. Materials may or
may not be furnished by the employer or Night worker
contractor.
Pursuant to D.O. No. 119-12, night worker has been
It differs from regular factory production defined as any employed person whose work
principally in that, it is a decentralized form of covers the period from ten o’clock in the evening to
production where there is ordinarily very little six o’clock the following morning, provided that the
supervision or regulation of methods of work. worker performs no less than seven consecutive
hours of work.
Househelpers v. Homeworkers
Persons covered by the provisions on night
HOUSE HELPERS HOMEWORKERS work
Performs in or about
his own home any GR: All persons who shall be employed or
processing or permitted or suffered to work at night.
Minister to the fabrication of goods or
personal needs and materials, in whole or XPN: Those employed in agriculture, stock raising,
comfort of his Er in the in part, which have fishing, maritime transport and inland navigation,
latter’s home been furnished directly during a period of not less than 7 consecutive hours,
or indirectly, by an Er including the interval from midnight to 5 in the
and sold thereafter to morning, to be determined by the SLE after
the latter. consulting the workers’ representatives/labor
organizations and Ers.
Prohibitions for homework
Worker Found to be Medically Unfit For Night
The following shall be prohibited as homework: Work

1. Explosives, fireworks and similar articles;
2. Drugs and poisons; and
3. Other articles, the processing of which requires
exposure to toxic substances (DO No. 05-92, Sec.
13).
Conditions for deduction from homeworker’s
earnings
GR: The employer, contractor or subcontractor
shall not make any deduction from the
homeworker’s earnings for the value of materials
which have been lost, destroyed, soiled or
otherwise damage.
XPNs: Unless the following conditions are met:
Night workers who are certified as unfit for night
work, due to health reasons, shall be transferred,
whenever practicable, to a similar job for which
they are fit to work.
If such transfer to a similar job is not practicable, or
the workers are unable to render night work for a
continuous period of not less than six months upon
the certification of a competent public health
authority, these workers shall be granted the same
benefits as other workers who are unable to work,
or to secure employment during such period. (D.O.
No. 119-12)
Separation From Employment Of A Worker
Found Medically Unfit For Night Work

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Prior Not required. Only Requires TESDA

Pursuant to the provisions of D.O. No. 119-12, it TESDA inspection from approval for
allows the application of Article 298 to a worker approval TESDA is required validity
who is found unfit for night work if his transfer to
another (day time) job is not practicable. Article Apprenticeship
298 authorizes the separation of an employee
suffering from a disease. For an employee found It is practical training on the job supplemented by
unfit for night work, the employer’s ultimate related theoretical instruction involving a contract
recourse, therefore, may be employment between an apprentice and an employer on an
termination based on an authorized cause. (1 approved apprenticeable occupation
Azucena, 2016, p. 499) Requisites for employment of apprentices

Temporarily Unfit For Night Work 1. The employer should be engaged in a business
that is considered a highly technical industry;
A night worker certified as temporarily unfit for 2. The job which the apprentice will work on
night work for a period of not less than six (6) should be an apprenticeable occupation.
months shall be given the same protection against - It is no longer the SOLE, but the TESDA,
dismissal or notice of dismissal as other workers who approves apprenticeable
who are prevented from working for health occupations. (Azucena, p. 134)
reasons.
Apprentice

APPRENTICES AND LEARNERS Any worker who is covered by a written

apprenticeship agreement with an individual Er or
Learnership v. Apprenticeship any of the entities recognized under the LC.

BASIS Learnership Apprenticeship GR: Apprenticeship programs shall be primarily

Training on the voluntary.
job in semi-skilled Training in
and other trades which are XPNs: Compulsory Apprenticeship:
industrial apprenticeable, 1. National security or economic development so
occupation or that is, practical demand, the President may require
trades which are training on the compulsory training;
non- job 2. Services of foreign technicians are utilized by
apprenticeable supplemented private companies in apprenticeable trades
Nature
and which may be by related (LC, Art. 70).
learned thru theoretical
practical training instruction for Apprenticeable occupation
on the job in a more than 3
relatively short months. Any trade, form of employment or occupation
period of time. which requires more than three (3) months of
Duration Min: 3 months practical training with theoretical instruction
Max: 3 months
(training) Max: 6 months officially endorsed by the tripartite body and
With commitment approved for apprenticeship by the TESDA.
to employ the
learner as a NOTE: Prior approval by TESDA (formerly DOLE)
Commitm No commitment of the proposed apprenticeship program is a
regular Ee if he
ent to to hire condition sine qua non. Otherwise, an apprentice
desires upon
employ becomes a regular employee (Nitto Enterprises v.
completion of
learnership NLRC, 248 SCRA 654).
Considered a
regular Ee if pre- Qualifications of an apprentice
termination
In case of 1. At least 15 years of age
occurs after2 Worker not
pre-
months of considered as
terminatio NOTE: Those below 18 years of age may be
training and the regular Ee.
n of con eligible for apprenticeship only in non-
dismissal is
tract hazardous occupations;
without fault of
the Learner.
Highly technical 2. Physically fit for the occupation;
Semi- industries and 3. Possess vocational aptitude and capacity;
skilled/Industrial only in 4. Possess:
Coverage a. The ability to comprehend, and
occupations industrial
occupation b. Follow oral and written instructions;
There is a list of 5. The company must have an apprenticeship
learnable trades No list program duly approved by the SOLE.
List
by TESDA
Requires Requires Learners
Written learnership apprenticeship 1. They are persons hired as trainees in semi-
agreement agreement agreement skilled and other industrial occupations

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 LABOR LAW AND SOCIAL LEGISLATION
2. Which are non-apprenticeable and
3. Which may be learned through practical
training on the job in a relatively short period
of time
4. Which shall not exceed 3 months
5. Whether or not such practical training is
supplemented by theoretical instructions (IRR,
Book II, Rule VII, Sec. 1[a]).
Employment of learners
Learners may be employed when:
1. No experienced worker is available
2. It is necessary to prevent curtailment of
employment opportunities; and
3. Employment does not create unfair
competition in terms of labor costs or impair or
lower working standards.
Employment of minors as learners
A learner must be at least 15 years of age.
NOTE: Those below 18 years of age shall not work
in hazardous occupations.
Persons who may employ learners
Only employers in semi-skilled and other industrial
occupations which are non-apprenticeable may
employ learners.
PERSONS WITH DISABILITY
(R.A. 7277 as amended by R.A. 9442)
The Magna Carta for Disabled Persons ensures
equal opportunities for disabled persons and
prohibits discrimination against them.
No PWD shall be denied access to opportunities for
sutable employment. Handicaped workers are
entitled to not less than seventy-five percent (75%)
of the applicable adjusted minimum wage. (Article 80,
LC)
Persons with disability (PWD)
Those whose earning capacity is impaired by:
1. Physical deficiency
2. Age
3. Injury
4. Disease
5. Mental deficiency
6. Illness
NOTE: Low I.Q. does not make a worker
‘handicapped’ (2000 BAR)
Qualified Disabled Employee
It provides for Equal Opportunity for Employment by
stating that no disabled 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.
33
A qualified individual with disability is an
individual with disability who, with or without
reasonable accommodation, can perform the
essential functions of the employment position that
such individual holds or desires.
NOTE: Consideration shall be given to the
employer’s judgment as to what functions of job
are essential, and if an employer has prepared a
written description before advertising or
interviewing applicants for the job. (RA 7277, Sec.
4[1])
Employment of PWD
1. When their employment is necessary to
prevent curtailment of employment
opportunities; and
2. When it will not create unfair competition in
labor costs or lower working standards (LC,
Art. 79).
Employment period of PWD
There is no minimum or maximum duration. It
depends on the agreement but it is necessary that
there is a specific duration stated.
Persons with disability can be a regular
employee
Persons with disability can be a regular employee if
work is usually or necessarily desirable to the
business (Bernardo v. NLRC, G.R No. 122917, July 12,
1999).
RIGHTS OF PERSONS WITH DISABILITY
Rights and privileges of PWD
1. Equal opportunity for employment - No PWD shall
be denied access to opportunities for suitable
employment. Five percent (5%) of all casual
emergency and contractual positions in the
DSWD, Health, Education and other government
agencies, offices or corporations engaged in
social development shall be reserved
for PWDs. (Section 5, Chapter 1, Title II, RA 7277)
XPN: Bona Fide Occupational Qualification
2. Sheltered employment - The Government shall
endeavour to provide them work if suitable
employment for disabled persons cannot be
found through open employment
3. Apprenticeship - PWD may be hired as
apprentices or learners if their disability is not
such as to effectively impede the performance
of job operations in the particular occupations
for which they are hired (LC, Art. 81).
4. Vocational rehabilitation - To develop the skills
and potentials of disabled workers and enable
them to compete in the labor market
5. Vocational guidance and counselling
Wage Rate (2013 Bar)
GR: Handicapped workers are entitled to not less
than seventy-five percent (75%) of the applicable
adjusted minimum wage. (Article 80, LC)
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XPN: All qualified handicapped workers shall receive The four–fold test (indicia of determination):
the full amount of the minimum wage rate prescribed
herein pursuant to RA 7277 (Wage Order No. NCR-18, 1. Selection and engagement of the employee;
Effective October 4, 2013) 2. Payment of wages;
3. Power of dismissal; and
NOTE: Generally, if a PWD is hired as an apprentice 4. Power of control (Azucena, Vol. I).
or learner, he shall be paid not less than seventy-five
percent (75%) of the applicable minimum wage. Among the four, the control test assumes primacy
in the overall consideration. The power of control is
XPN: If the PWD, however is hired as a learner and the right to control not only the end to be achieved
employed in piece or incentive-rate jobs during the but also the means to be used in reaching such end.
training period, he shall be paid one hundred percent (Locsin v. PLDT, G.R. No. 185251, October 2, 2009)
(100%) of the applicable minimum wage. (Chan,
2014) Not every form of control establishes employer-
employee relationship. A demarcation line should
POST-EMPLOYMENT be drawn between: (a) rules that merely serve as
guidelines which only promote the result, and (b)
rules that fix the methodology and bind or restrict
EMPLOYER-EMPLOYEE RELATIONSHIP
the party hired to the use of such means or methods.
Under the first category, there exists no employer-
FOUR- FOLD TEST
employee relationship. In the second category, it
has the effect of establishing employer-employee
relationship (Insular life v. NLRC, 179 SCRA 439;
Employer is any person, natural or juridical,
Consulta v. CA, G.R. No. 145443, March 18, 2005).
domestic or foreign, who carries on it the
Philippines any trade, business, industry,
ECONOMIC DEPENDENCY
undertaking or activity of any kind and uses the
(TWO-TIERED TEST)
services of another person who is under his orders
as regards the employment, except the Government
This two-tiered test would provide us with a
and any of its political subdivisions, branches or
framework of analysis, which would take into
instrumentalities, including corporations owned or
consideration the totality of circumstances
controlled by the Government.
surrounding the true nature of the relationship
between the parties. This is especially appropriate
Employee is any person who performs services for
in this case where there is no written agreement or
an employer in which either or both mental and
terms of reference to base the relationship on and
physical efforts are used and who receives
due to the complexity of the relationship based on
compensation for such services, where there is an
the various positions and responsibilities given to
employer‐employee relationship. (RA No. 8282,
the worker over the period of the latter’s
Social Security Law)
employment (Francisco v. NLRC, G.R. No. 170087,
August 31, 2006).
Existence of an employment relationship
Two-tiered test
Employment relationship is determined by law and
not by contract (Insular Life Assurance Co. Ltd. v.
1. The putative Er’s power to control the Ee with
NLRC, G.R. No. 119930, March 12, 1998).
respect to the means and methods by which the
work is to be accomplished (Four-fold test);
Employer-Employee Relation as a Question of
2. The underlying economic realities of the
Law (Stipulation that No Er-Ee Relationship
activity or relationship (economic reality test).
Exists)
Proper standard for economic dependence
It is axiomatic that the existence of an Er-Ee
relationship cannot be negated by expressly
The proper standard is whether the worker is
repudiating it in the management contract and
dependent on the alleged Er for his continued
providing therein that the Ee is an independent
employment in that line of business.
contractor when the terms of the agreement clearly
show otherwise. For the employment status of a
person is defined and prescribed by law and not
Mode Of Compensation; Not Determinative Of
by what the parties say it should be. In determining
Er-Ee Relationship
the status of the management contract, the Four-
Fold Test on employment has to be applied (Insular
Piece-rate, boundary, and pakyaw are merely
Life Assurance Co.. Ltd. v. NLRC, G.R. No. 119930,
methods of pay computation and do not prove
March 12, 1998).
whether the payee is an employee or not (1
Azucena, 2016, p. 197).
Employer-Employee Relation As A Question Of
Fact
Article 295 Presupposes Employment
Relationship
The existence of an employer-employee
relationship depends upon the facts of each case.
Article 295 applies where the existence of
(Social Security System v. CA, G.R. No. 100388,
Employer-Employee relationship is not the issue of
December 14, 2000)
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 LABOR LAW AND SOCIAL LEGISLATION
the dispute. If the issue is whether or not the
claimant is an employee, the tests of employment
relationship shall be resorted to.
Article 295 limits itself to differentiating four kinds
of employment arrangement: regular, project,
seasonal, and casual. The article presupposes that
employment relationship exists between the
parties. (2 Azucena, 2016, p. 755)
PROBATIONARY EMPLOYMENT
Probationary employment
Employment where the Ee, upon his engagement:
1. Is made to undergo a trial period;
2. During which the Er determines his fitness to
qualify for regular employment; and
3. Based on reasonable standards made known to
the Ee at the time of engagement (IRR, Book VI,
Rule I, Sec 6).
Rules on probationary employment
1. Er shall make known to the Ee at the time he is
hired, the standards by which he will qualify as
a regular Ee;
2. An Ee allowed to continue work after the
probationary period shall be considered a
regular Ee;
3. During the probationary period, the Ee enjoys
security of tenure; his services can only be
terminated for just or authorized causes and
when he fails to qualify as a regular Ee in
accordance with reasonable standards made
known by the Er to the Ee at the time of his
engagement (ICMC v. NLRC, G.R. No. 72222,
January 30, 1989; LC, Art. 281).
GR: It shall not exceed 6 months.
XPNs:
1. Covered by an Apprenticeship or Learnership
agreement stipulating a different period
2. Voluntary agreement of parties (especially
when the nature of work requires a longer
period)
3. The Er gives the Ee a second chance to pass the
standards set (Mariwasa Manufacturing, Inc. v.
Leogardo, Jr., G.R. No. 74246, January 26, 1989).
4. When the same is required by the nature of the
work, e.g. the probationary period set for
professors, instructors and teachers is 3
consecutive years of satisfactory service
pursuant to DOLE Manual of Regulations for
Private Schools.
5. When the same is established by company
policy.
NOTE: After the lapse of the probationary period
(6 months), Ee becomes regular.
The Er and Ee may validly agree to extend the
probationary period beyond six months. Such an
extension may be lawfully agreed upon. Extension
is allowed only when:
35
1. Nature of the job requires extensive training, or
2. If it is a company policy that the period of
probationary employment should be an
extended period
Double or successive probation is NOT allowed.
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. If the probationary
employee is being terminated for just cause, he
must, of course, be given due process before his
termination. (Enchanted Kingdom, Inc. v. Verzo G.R.
No. 209559, December 09, 2015)
REGULAR EMPLOYMENT
TYPES OF REGUAR EMPLOYMENT
NATURE OF WORK YEARS OF SERVICE
An employment shall be Any Ee who has
deemed to be regular rendered at least
where the Ee has been one year of service,
engaged to perform whether such
activities which are service is
usually necessary or continuous or
desirable in the usual broken, shall be
business or trade of the considered a
Er, the provisions of regular Ee with
written agreements to respect to the
the contrary activity in which he
notwithstanding and is employed and his
regardless of the oral employment shall
agreements of the parties continue while such
[IRR, Book VI, Rule I, Sec. 5 activity exists [IRR,
(a)]. Book VI, Rule I, Sec. 5
(b)].
NOTE: Regularization is not a management
prerogative; rather, it is the nature of employment
that determines it. It is a mandate of the law (PAL
v. Pascua, G.R. No. 143258, August 15, 2003).
What determines regularity or casualness is not the
employment contract, written or otherwise, but the
nature of the job (Policy Instruction No. 2).
Mode of compensation is not determinative of
regular employment: While the Ees mode of
compensation was on a “per piece basis” the status
and nature of their employment was that of regular
Ees. (Labor Congress of the Phils v. NLRC, G.R. No.
123938, May 21, 1998).
Tests to determine regular employment
1. The primary standard of determining regular
employment is the reasonable connection
between the particular activity performed by
the Ee to the usual trade or business of the Er.
The test is whether the former is usually
necessary or desirable in the usual business or
trade of the Er (De Leon v. NLRC, G.R. No. 70705,
August 21, 1989).
NOTE: The connection can be determined by
considering the nature of the work performed
and its relation to the scheme of the particular
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business or trade in its entirety (Highway Copra
Traders v. NLRC, G.R. No. 108889, July 30, 1998).
2. Also, the performance of a job for at least a year
is sufficient evidence of the job’s necessity if not
indispensability to the business. This is the rule
even if its performance is not continuous and
merely intermittent. The employment is
considered regular, but only with respect to
such activity and while such activity exists
(Universal Robina Corp. v. Catapang, G.R. No.
164736, October 14, 2005).
NOTE: Seafarers cannot be considered as regular
Ees. The contract which they sign every time they
are hired governs their employment. Their
employment is terminated when the contract
expires. Their employment is fixed for a certain
period of time,(Ravago v. Esso Eastern Maritime
Ltd., G.R. No. 158324, March 15, 2005
Q: Africa, et al. are engaged as garbage truck
drivers to collect garbage from different cities
and transport the same to the designated
dumping site. They filed separate cases against
Expedition for illegal dismissal for having been
prevented from entering the premises of
Expedition without cause or due process. They
claimed that they were regular employees;
were required to work a minimum of 12 hours
a day, seven days a week, even on holidays, and
were not paid the minimum wage, holiday or
premium pay, overtime pay, SIL pay and 13th
month pay. Expedition denied that respondents
were its employees claiming that respondents
were not part of the company’s payroll but were
being paid on a per trip basis. They claimed that
respondents were not under their direct control
and supervision as they worked on their own.
Are the respondents employees of Expedition?
A: YES. Applying the four-fold test, Lim, et al. were
engaged/hired by Expedition as garbage truck
drivers. It is undeniable that they receive
compensation from Expedition for the services that
they rendered to the latter. The fact that they were
paid on a per trip basis is irrelevant because this
was merely the method of computing the proper
compensation due to them. Also, Expedition’s
power to dismiss was apparent when work was
withheld from respondent. Finally, Expedition has
the power of control over respondents in the
performance of their work. (Expedition
Construction Corp., et. al vs. Africa, G.R. No. 228671,
December 14, 2017)
Q: X was hired as a Marketing Director and was
paid on commission basis for a fixed period of
one year by Y Corporation which reappointed
him for several consecutive years. The latter
then decided to terminate the employment of X.
X then filed for a complaint for illegal dismissal
alleging that he is a regular employee of Y
Corporation since he is performing tasks that
are necessary and desirable to its business and
he need to follow rules, regulations, code of
ethics, and periodic evaluation by the
corporation. Will the case prosper?
36
A: No. There is no employer-employee relationship.
It is a well settled rule that not every form of control
that a hiring party imposes on the hired party is
indicative of employee-employer relationship.
Rules and regulations that merely serve as
guidelines towards the achievement of a mutually
desired result without dictating the means and
methods of accomplishing it do not establish
employer-employee relationship. (Royale Homes
Marketing Corporation vs. Fidel P. Alcantara
[deceased], substituted by his heirs, G.R. No. 195190,
July 28, 2014)
PROJECT EMPLOYMENT
Project employment is employment that has been
fixed for a specific project or undertaking the
completion for which has been determined at the
time of engagement of the Ee (IRR, Book VI, Rule I,
Sec. 5(a)]. The period is not the determining factor,
so that even if the period is more than 1 year, the Ee
does not necessarily become regular.
Repeated hiring on a project-to-project basis is
considered necessary and desirable to the business
of the Er. The Ee is regular. (Maraguinot v. NLRC,
G.R. No. 120969, July 22, 1998).
Requisites in determining whether an Ee is a
project Ee
1. Designation of named Ees as “Project Ees”;
2. The project Ee was assigned to carry out a
specific project or undertaking, (Gadia v. Sykes
Asia, Inc., G.R. No. 209499, January 28, 2015);
and
3. The duration and scope of which were specified
at the time the Ee was engaged for that project
(ETS v. CA. G.R. No. 157680, October 8, 2008)
4. The Ee must have been dismissed every after
completion of his project or phase;
5. Report to the DOLE of Ee’s dismissal on account
of completion of contract to satisfy due process
requirements. [Policy Inst. No. 20; D.O. 19
(1997)].
The principal test for determining whether one
is a "project employee," as distinguished from
"regular employee," is whether he was assigned
to carry out "a specific project or undertaking,"
the duration and scope of which were specified
at the time the employee was engaged for that
project. (Equipment Technical Services (Ets) &
Joseph James Dequito V. Ca, Alex Albino, Et.Al. G.R. No.
157680, October 8, 2008, Velasco, Jr., J.)
Entitlement to separation pay
GR: Project Ees are not entitled to separation pay if
their services are terminated as a result of the
completion of project.
XPN: If the projects they are working on have not
yet been completed when their services are
terminated; project Ees also enjoy security of
tenure during the limited time of their employment
(De Ocampo v. NLRC, G.R. No. 81077, June 6, 1990).
Work Pool
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Requisites to acquire regular Ee status of
project Ee or a member of work pool
The following must concur to acquire a status of a
regular Ee status:
1. There is a continuous rehiring of project Ee’s
even after cessation of a project; and
2. The tasks performed by the alleged “project Ee”
are vital, necessary and indispensable to the
usual business or trade of the Er (D.M. Consunji,
Inc. v. JAMIN, G.R. No. 192514, April 18, 2012).
The length of time during which the Ee was
continuously re-hired 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. This is
beneficial to both the Er and Ee for it prevents the
unjust situation of “coddling labor at the expense of
capital” and at the same time enables the workers
to attain the status of regular Ees (Maraguinot v.
NLRC, G.R. No. 120969, January 22, 1998).
Q: Herma Shipyard, Inc., (HERMA) is engaged in
the business of shipbuilding and repair. Several
of its employees occupy various positions. In
support of their employment is a contract of
employment denominated as Kasunduang
Paglilingkod, which classifies them as a project-
based employee only, the employees were
informed at the time of their engagement that
their status is only a project employee and their
duration of specific project or undertaking.
However, under Paragraph 10 of their
employment contract, it allows the extension of
the employees’ employment until the
completion of the specific work. Is the extension
agreement under the employment contract a
violation of the second requisite of project
employment that the completion or
termination of such project or undertaking be
determined at the time of engagement?
A: NO. It is enough that Herma Shipyard gave the
approximate or target completion date in the
project employment contract. Given the nature of
its business and the scope of its projects which take
months or even years to finish, Herma Shipyard
cannot be expected to give a definite and exact
completion date. It can only approximate or
estimate the completion date. What is important is
that the employees were apprised at the time of
their engagement that their employment is
coterminous with the specific project and the
purpose of the extension is only to complete the
same specific project, and not to keep them
employed even after the completion thereof.
SEASONAL EMPLOYMENT
Seasonal employment
37
Employment where the job, work or service to be
performed is seasonal in nature and the
employment is for the duration of the season [IRR,
Book VI, Rule I, Sec.5 (a)].
NOTE: For Seasonal Ees, their employment legally
ends upon completion of the project or the season.
The termination of their employment cannot and
should not constitute an illegal dismissal (Mercado
v. NLRC, G.R. No. 79869, September 5, 1991).
One year duration on the job is pertinent in
deciding whether a casual Ee has become regular or
not, but it is not pertinent to a Seasonal or Project
Ee. Passage of time does not make a seasonal
worker regular or permanent (Mercado v. NLRC,
G.R. No. 78969, September 5, 1991).
Seasonal Ees as Regular Ees
Seasonal Ees can be considered regular Ees.
Seasonal workers who are repeatedly engaged
from season to season performing the same tasks
are deemed to have acquired regular employment.
During off-season, the relationship of Er-Ee is not
severed; the Seasonal Ee is merely considered on
LOA without pay. (Hacienda Fatima v. National
Federation of Sugarcane Workers-Food and General
Trade, G.R. No. 149440, January 28, 2003).
If the Ee has been performing the job for at least a
year, even if the performance is not continuous and
merely intermittent, the law deems repeated and
continuing need for its performance as sufficient
evidence of the necessity if not indispensability of
that activity to the business. Hence, the
employment is considered regular, but only with
respect to such activity and while such activity
exists (Benares v. Pancho, G.R. No. 151827, April 29,
2005).
CASUAL EMPLOYMENT
Casual employment
1. It is an employment where the Ee is engaged in
an activity which is not usually necessary or
desirable in the usual business or trade of the
Er, Provided: such employment is neither
Project nor Seasonal (LC, Art. 281). He performs
only an incidental job in relation to the
principal activity of the Er.
2. An Ee is engaged to perform a job, work or
service which is merely incidental to the
business of the Er, and such job, work or service
is for a definite period made known to the Ee at
the time of engagement [IRR, Book Vi, Rule I,
Sec. 5 (b)].
Casual Ee becoming a regular Ee
If he has rendered at least 1 year of service, whether
such service is continuous or broken, he is
considered as regular Ee with respect to the activity
in which he is employed and his employment shall
continue while such activity exists.
A casual Ee is only casual for 1 year, and it is the
passage of time that gives him a regular status
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(KASAMMA-CCO v. CA, G.R. No. 159828, April 19, job or work is to be performed or completedd
2006). within or outside the premises of the principal. (Sec.
3c, DOLE D.O. No. 174 s. 2017)
Project Ee vs. Casual Ee
Conditions in order to be considered as
PROJECT EE CASUAL EE legitimate job contracting or subcontracting
Employed for a specific Engaged to perform a
project or undertaking job, work or service 1. The contractor must be registered in
the completion or which is incidental to accordance with these Rules and carries a
termination of which is the business of the Er distinct and independent business and
determined at the time and the definite period undertakes to perform the job, work or service
of his engagement. of his employment is on its own responsibility, according to its own
made known to him at manner and method, and free from control and
the time of his direction of the principal in all matters
engagement. connected with the performance of the work
His work need not be His continued except as to the results thereof;
incidental to the employment after the 2. The contractor has substantial capital and/or
business of the Er and lapse one year makes investment; and
his employment may him a regular Ee. 3. The Service Agreement ensures compliance
exceed one year with all the rights and benefits under Labor
without necessarily Laws (DO 18-A, Sec. 4).
making him a regular
Ee. In legitimate Job Contracting, the principal is jointly
Job is coterminous No termination report and severally liable with the contractor for the
with a specific project required. payment of unpaid wages (LC, Arts. 106, 107 & 109)
or phase thereof. It is
required that a Labor-only contracting
termination report be
submitted at the There is labor-only contracting when:
nearest employment
office upon completion 1. The contractor does not have substantial
of the project or phase. capital, or;

FIXED TERM EMPLOYMENT a. The contractor or subcontractor does not

Term employment
A contract of employment for a definite period
terminates by its own terms at the end of such
period. (Brent School v. Zamora, G.R. No. L-48494,
February 5, 1990)
Decisive determinant in term employment
It is the day certain agreed upon by the parties for
the commencement and the termination of their
employment relation. A day certain being
understood to be that which must necessarily come,
although it may not be known when and not
whether the work is usually necessary and
desirable to the business of the Er.
have investments in the form of tools,
equipment, machineries, work premises,
among others, AND
b. the contractor or subcontractor’s Ees
recruited and placed are performing
activities which are usually necessary or
desirable to the operation of the company,
or directly related to the main business of
the principal within a definite or
predetermined period, regardless of
whether such job, work or service is to be
performed or completed within or outside
the premises of the principal; OR
2. The contractor does not exercise the right to
control over the performance of the work of the
Ee (Sec. 5, DOLE D.O. No. 174 s. 2017)

Fixed-term employment v. Project Employment Confirming Elements

Both employments are time bound or for a certain
period as agreed upon at the time of engagement,
however in project employment, the employee is
tasked to do specific undertaking, which is not
present in fixed-term employment.
JOB CONTRACTING
Job contracting (independent contracting/
subcontracting)
"Contracting" or "subcontracting" refers to an
arrangement whereby a principal agrees to farm
out to a contractor the perfomance or completion of
specific job or work within a definite or
predetermined period, regardless of whether such
To have labor-only contracting, the essential
element of supplying workers to another is not
enough. To it must be added either one of two
confirming elements:
1. Lack of substantial capital or investment and
performance of activities directly related or usually
necessary or desirable to the principal’s main
business;
2. The contractor does not exercise control over the
performance of the employees. (1 Azucena, 2016, p.
369)
NOTE: If the essential element is absent, there can
be no LOC. And even, if the essential element is

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 LABOR LAW AND SOCIAL LEGISLATION

present, but confirming element one or two is of an independent business

absent, there is still no LOC. (ibid.) busines contractor is independent
s entirely and distinct
5-5-5 Scheme or “Endo” separateand from the
distinct from the principal. May
The “5-5-5” or “endo” workers refers to the hiring business of the be a “cabo” or
practice that is deliberately resorted to prevent principal an in-house
workers from acquiring regular status by reason of agency
length of service of at least 6 months and one day. prohibited
Under a subcontracting arrangement, this is done under DO 18-
through: 02
Substanti Has substantial The only
a. repeated short-term arrangements (e.g., “5 al capital capital or investment is
months, 5 months”, “5-5-5”, or less) by one OR investment. bringing
principal through the same contractor, or investmen individuals to
under different contractors, or work
t
b. repeated short-term arrangements (e.g., “5
months, 5 months”, “5-5-5”, or less) through a
Service Agreement of short duration under the Control Control as to Control as to
same contractor, or different contractors. only RESULTS BOTH results
but not the and means
Section 7(A)[7) of DOLE Department Order No 18- means
A series of 2011 makes subcontracting a prohibited
activity when it is done through repeated hiring of Effect VALID VOID
workers for a 5 to 6 months employment contract
under the same employer or Service Agreement of
the same duration Q: Clean Manpower Inc. (CMI) had provided
janitorial services to the National Economic
In case of violation, the Contractor’s Certificate of Development Authority (NEDA) since April
Registration can be cancelled, after due process, 1988. Its service contract was renewed every
and the worker becomes regular employee of the three months. However, in the bidding held on
principal, and all benefits due to him/her shall be July 1992, CMI was disqualified and excluded. In
the liability of the principal. 1993, six janitors of CMI formerly assigned at
(http://www.blr.dole.gov.ph/frequently-asked- NEDA filed a complaint for underpayment of
questions/36-issues-and-concerns) wages. Both CMI and NEDA were impleaded as
respondents for failure to comply with NCR
Labor-only contracting v. Job contracting Wage Orders Nos. 01 and 02, which took effect
on November 1, 1990 and January 2, 1992,
LABOR-ONLY JOB CONTRACTING respectively.
CONTRACTING
No Er-Eerelationship Should NEDA, a government agency subject to
exist between the Er and budgetary constraints, be held liable solidarily
the contractor's Ees with CMI for the payment of salary differentials
Er is treated as direct except when the due the complainants? Cite the legal basis of
Er of the person contractor or your answer.
recruited in all subcontractor fails to (2004, 2014 BAR)
instances paythewagesofthe Ees
A:YES, NEDA should be impleaded as a defendant.
Art. 106 provides that in the event that the
Liability is limited contractor or subcontractor fails to pay the wages
(shall be solidarily the wages of his employees, the employer shall be
liable with Er only jointly and severally liable with his contractor or
when the Er fails to Liability extends to all
those provided under subcontractor to such employees to the extent of
comply with the work performed under the contract, in the same
requirements as the Labor Standards
law manner and extent that he is liable to the employees
to unpaid wages and directly employed by him.
other labor
standards violations) Permissible, subject only Essence of the prohibition on labor-only
Prohibited byLaw to certain conditions contracting: It gives rise to confusion as to who is
the real Er of the workers and who is liable to their
The contractor has claims. It also deprives workers of the opportunity
Has no substantial to become regular Ees.
substantial capital or
capital or investment
investment
Q: Petron and RDG entered into a Contract for
Services for a period, whereby RDG undertook to
FACTO INDEPENDEN LABOR-
provide Petron with janitorial, maintenance, tanker
R TEST T ONLY
receiving, packaging and other utility services in its
CONTRACTO CONTRACTO
local plant. Upon expiration the contract, no further
R R
renewal was done. Workers of RDG who worked
Nature The business of No separate the in Petron’s plant protested that they were

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illegally dismissed. RDG corroborated their claim. Preventive Suspension

Petron, on the other hand, alleged that RDG is an
independent contractor and the real employer of
the petitioners. It was RDG which hired and
selected petitioners, paid their salaries and wages,
and directly supervised their work. Is RDG a
legitimate independent contractor?
The employer may place the employee under
preventive suspension, during the pendency of the
investigation, if his continued employment poses a
serious and imminent threat to life and property of
the employer or his employees.

A: No. Petron failed to discharge the burden of It must not be more than 30 days; otherwise it will
proving that RDG is a legitimate contractor. Hence, amount to constructive dismissal.
the presumption that RDG is a labor-only
contractor stands. A contractor is presumed to be a Serious misconduct or willful disobedience
labor-only contractor, unless it proves that it has
the substantial capital, investment, tools and the Elements of serious misconduct:
like. However, where the principal is the one
claiming that the contractor is a legitimate 1. It must be serious or of such a grave and
contractor, the burden of proving the supposed aggravated character;
status of the contractor rests on the 2. Must relate to the performance of the Ees’
principal.(Avelino S. Alilin, Teodoro Calesa, Charlie duties;
Hindang, Eutiquio Gindang, Allan Sungahid, 3. Ee has become unfit to continue working for
Maximo Lee, Jose G. Morato, Rex Gabilan, and the Er (CBTL Philippines, Inc. v. Arenas
G.R. No.
Eugema L. Laurente vs. Petron Corporation, G.R. No. 208908, March 11, 2015).
177592, June 9, 2014).
Examples of serious misconduct:
TERMINATION OF EMPLOYMENT
1. Sexual Harassment
2. Fighting within the company premises
TERMINATION BY EMPLOYER
3. Uttering obscene, insulting or offensive words
against a superior
DISMISSAL FROM EMPLOYMENT
4. Falsification of time records
5. Gross immorality
In cases of regular employment, substantive due
process (Security of Tenure) is when the Er shall
Q: As per standard operating procedure, the
not terminate the services of an Ee except for a just
guard on duty found six Reno canned goods
cause or when authorized by the LC on Termination
wrapped in nylon leggings inside Nenita's fabric
of Employment (LC, Art. 279).
clutch bag. She was given ample times to explain
her side, often with the assistance of the NLM-
In every employee dismissal case, the employer
Katipunan. However, she failed to give a valid
bears the burden of proving the validity of the
explanation for her action. As such, she was
employee's dismissal.
dismissed. Reno Foods filed a complaint-
affidavit against Nenita for Qualified Theft. The
Types of dismissal
NLM filed a complaint for illegal dismissal and
money claims against petitioner with the NLRC.
1. Dismissal for a just cause with due process
NLRC affirmed the findings of the Labor Arbiter
2. Dismissal for authorized cause with due
that Nenita is guilty of serious misconduct but
process
added an award for financial assistance in the
3. Dismissal for health reasons with due process
form of a separation pay equivalent to one-half
4. Dismissal without just or authorized cause with
month pay for every year of service. Is the NLRC
due process
correct in granting financial assistance to an
5. Dismissal for just or authorized cause without
employee who was validly dismissed of theft of
due process (belated due process rule)
company property?
JUST CAUSES
A: NO. Despite the fact that Nenita is acquitted in
the criminal case filed against her due to reasonable
Just causes for termination
doubt, it would not exculpate her for her
wrongdoings. For jurisprudence dictates that
1. Serious misconduct or willful disobedience by
conviction is not necessary to find just cause for
the Ee of the lawful orders of his Er or
employment termination, especially when it is not
representative in connection with his work;
a full acquittal but one that is only based on
2. Gross and habitual neglect by the Ee of his
reasonable doubt. Further, Jurisprudence classified
duties;
theft of company property as a serious misconduct
3. Fraud or willful breach by the Ee of the trust
which denies an erring employee the award of a
reposed in him by his Er or duly organized
separation pay. She cannot be granted separation
representative;
pay by reason of social justice a compassion for
4. Commission of a crime or offense by the Ee
certainly a dishonest employee cannot be rewarded
against the person of his Er or any immediate
after her capability is established by the LA.
member of his family or his duly authorized
representative;
Requisites of willful disobedience:
5. Other causes analogous to the foregoing (LC,
Art. 282).

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1. The Ees assailed conduct must have been
willful or intentional, the willfulness being
characterized by a wrongful and perverse
attitude.
2. The disobeyed orders, regulations or
instructions of the Er must be:
a. Reasonable and lawful
b. Sufficiently known to the Ee
c. In connection with the duties which the Ee
has been engaged to discharge (SLMC v.
Sanchez G.R. No. 212054, March 11, 2015).
There is no law that compels an Ee to accept a
promotion for the reason that a promotion is in the
nature of a gift or reward, which a person has the
right to refuse. The exercise of the Ee of the right to
refuse a promotion cannot be considered in law as
insubordination or willful disobedience (PT&T
Corp. v. CA, G.R. No. 152057, September, 29, 2003).
Q: Jimmy Areno was employed as a cable
technician by respondent Skycable PCC-Baguio.
An accounting clerk of respondent, Hyacinth
Soriano, sent to the human resource manager a
complaint against Areno alleging that the latter
spread false rumors about her. Soriano averred
that Areno’s unscrupulous behavior constituted
serious and grave offense in violation of the
company’s Code of Discipline. Skycable issued a
Memorandum requiring Areno to submit an
explanation to which he complied with, denying
Soriano’s allegations.
An administrative investigation found Areno
guilty of having made malicious statements
against Soriano. Areno was suspended for three
days without pay. However, he still reported for
work. Skycable sent Areno 1st Notice of
Termination requiring him to explain why he
should not be terminated for
insubordination. Areno again wrote a request
for further investigation on his alleged act of
spreading rumors against Soriano. He avers
that he still reported for work on the first day of
his suspension because the accusation of
Soriano is baseless and her testimony is
hearsay. An investigation on the
insubordination case was conducted. Through a
Final Notice of Termination, Areno was
dismissed from service on the ground of
insubordination or willful disobedience in
complying with the suspension order. Areno
filed a complaint against Skycable, questioning
his dismissal. Is Areno illegally dismissed?
A: NO. Willful disobedience of the employer’s
lawful orders requires the concurrence of two
elements: (1) the employees assailed conduct must
have been willful, i.e., 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. Both requisites
are present in the instant case. Deliberate disregard
or disobedience of rules by the employee cannot be
countenanced. It may encourage him to do even
worse and will render a mockery of the rules of
discipline that employees are required to observe.
41
Gross and habitual negligence
An employee who was grossly negligent in the
performance of his duty, though such negligence
committed was not habitual, may be dismissed
especially if the grossly negligent act resulted in
substantial damage to the company. (LBC Express
vs. Mateo, G.R. No. 168215, June 9, 2009)
It implies a want or absence of or failure to exercise
diligence that an ordinary prudent man would use
in his own affairs. However, such neglect must not
only be gross but must also be habitual in character
(DOLE Manual)
Degree Of Negligence As A Just Cause For
Termination
GR: Gross and habitual negligence.
a. Gross neglect 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. (NBS vs. Court of Appeals. G.R. No.
146741; February 27, 2002)
b. Habitual neglect implies repeated failure to
perform one’s duties over a period of time,
depending upon the circumstance. (JGB and
Associates v. NLRC, GR No. 10939, March 7,
1996)
Q: Due to several of his unauthorized and
unexcused absences, Quiambao exhibited poor
performance in the latter part of his
employment. Eventually, he was dismissed
from employment without being entitled to a
separation pay. Despite the legality of his
dismissal, he contends that he should be
entitled to a separation pay because his
unauthorized absences amount only to a gross
and habitual neglect of duty. Is he entitled to
separation pay?
A: No. The Court has ruled in Central Philippines
Bandag Retreaders Inc vs. Diasnesthat the award for
separation pay based on social justice should be
demurred when an employee’s dismissal is based
on serious misconduct or willful disobedience;
gross neglect of duty; fraud or willful breach of
trust; or commission of a crime against the person
of the employer or his immediate family, all
grounds under Art. 282 of the Labor
Code.Quiambao’s unauthorized absences
amounting gross and habitual neglect of duty does
not entitle him to a separation pay.
Loss of trust and confidence
It applies only to cases involving:
a. Ees occupying positions of trust and
confidence - confidential and managerial Ee’s
Distinction should be made between managerial
and rank and file employees. With respect to rank-
and-file personnel, loss of trust and confidence, as
ground for valid dismissal, requires proof of
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involvement in the alleged events while for
managerial employees, the mere existence of a
basis for believing that such employee has breached
the trust of his employer would suffice for his
dismissal (Grand Asian Shipping Lines, Inc. v. Wilfred
Galvez, G.R. No. 178184, Jan. 29, 2014).
b. Ees routinely charged with the care and
custody of the Er’s money or property – To
this class belong those who, in the normal and
routine exercise of their functions, regularly
handle significant amounts of money or
property (Mabeza v. NLRC, G.R. No. 118506,
April 18, 1997).
Q: Coquia was employed with BPI for 26
years. He alleged that he was instructed to take
a vacation leave, because of an internal audit to
be conducted in BPI Dagupan Branch. In a
notice, he was placed under preventive
suspension for 30 days due to further
investigation of the various irregularities found
to have been committed by him. Coquia
received a show cause memo directing him to
provide explanation in writing and advised that
a hearing will be held. Thereafter, a Notice of
Termination was served upon him. Thus, he
filed a complaint for illegal suspension, illegal
dismissal and other monetary claims against
petitioner BPI and some of its corporate
officers. Coquia, on the other hand, claimed
innocence of the charges of serious misconduct
and breach of trust as grounds for his
dismissal.Decide whether the dismissal of
Coquia is valid, based on the facts stated.
A: Yes. The dismissal of Coquia is valid
because Coquia’s acts of fraud and dishonesty
amounted to serious misconduct and breach of
trust and confidence which justify his dismissal and
do not give him the right to separation pay. Settled
is the rule that the award of separation pay, or
financial assistance is justified only where the
employee is validly dismissed for causes other than
serious misconduct or those adversely affecting his
moral character. Further, jurisprudential doctrines
states that the position of a managerial employee
entails a high degree of trust and confidence. Unless
tainted with malice and arbitrariness, the
employer’s decision to dismiss an employee upon
loss of trust and confidence cannot be subject of
judicial interference.
Abandonment as a just cause for termination
It means deliberate and unjustified refusal of an
employee to resume his employment.
Two (2) factors must be present:
1. The failure to report for work, or absence
without valid or justifiable reason; and
2. A clear intention to sever Er-Ee relationship,
with the 2nd element as the more
determinative factor, being manifested by
some overt acts(Sta. Catalina College v. NLRC,
G.R. No. 144483, November 19, 2003).
Mere absence or failure to work, even after notice
to return, is not tantamount to abandonment. The
42
filing by an employee of a complaint for illegal
dismissal with a prayer for reinstatement is proof
enough of his desire to return to work, thus,
negating the employer’s charge of abandonment.
(Essencia Q. Manarpiis v. Texan Philippines, Inc.,
Richard Tan And Catherine P. Rialubin-Tan G.R. No.
197011, January 28, 2015, Villarama, Jr., J.)
In case of abandonment the ER is still required
under the law to notify the employee of his
termination. There is still a need to observe the two-
notice rule and opportunity to be heard
requirement. (New Puerto Commercial v Lopez, G.R.
NO. 169999, July 26, 2010)
Commission of a crime or offense
When an offense is committed by the Ee against the
person of his Er or any immediate member of his
family or his duly authorized representative,
conviction of a crime involving moral turpitude is
not analogous thereto as the element of relation to
his work or to his Er is lacking.
A criminal case need not be actually filed.
Commission of acts constituting a crime itself is
sufficient. (National Labor Union, Inc. v. Standard
Vacuum Oil Company. G.R. No. L-48170, October 10,
1941)
Analogous cases
To fall within the ambit of “analogous cases” the act
or omission must have an element similar to those
found in the specific just cause enumerated under
Art. 282. (International Rice Research Institute v.
NLRC, G.R. No. 97239, May 12, 1993).
Previous offenses may be so used as a valid
justification for dismissal from work ONLY if the
infractions are related to the subsequent offense
upon which the basis the termination of
employment is decreed (Stellar Industrial Service
Inc. v. NLRC, G.R. No. 117418. Jan. 24, 1996).
Q: Cheryll Leus was a non-teaching personnel
employed in St. Scholastica’s College Westgrove
(SSCW). Cheryll and her boyfriend conceived a
child out of wedlock. SSCW dismissed her on the
ground that her pregnancy out of wedlock
constitutes disgraceful and immoral conduct
and ran counter to the moral principles that
SSCW stands for and teaches its students. Does
pregnancy out of wedlock (without a legal
impediment to marry) constitutes immoral
conduct as a ground for dismissal contemplated
by law?
A: NO. It is not the totality of the circumstances
surrounding the conduct per se that determines
whether the same is disgraceful or immoral, but the
conduct that is generally accepted by society as
respectable or moral. If the conduct does not
conform to what society generally views as
respectable or moral, then the conduct is
considered as disgraceful or immoral. Tersely put,
substantial evidence must be presented, which
would establish that a particular conduct, viewed in
light of the prevailing norms of conduct, is
considered disgraceful or immoral. Thus, the
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determination of whether a conduct is disgraceful
or immoral involves a two-step process: first, a
consideration of the totality of the circumstances
surrounding the conduct; and second, an
assessment of the said circumstances vis-à-vis the
prevailing norms of conduct, i.e., what the society
generally considers moral and respectable. There is
still a necessity to determine whether the
petitioner’s pregnancy out of wedlock is considered
disgraceful or immoral in accordance with the
prevailing norms of conduct. 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 (Leus v. SSCW, G.R. No. 187226,
January 28, 2015).
In termination disputes or illegal dismissal cases,
the employer has the burden of proving that the
dismissal is for just and valid causes. The employer
is bound to adduce clear, accurate, consistent, and
convincing evidence to prove that the dismissal is
legal. (Edi-Staffbuilders International, Inc. vs.
National Labor Relations Commission and Eleazar S.
Gran G.R. No. 145587, October 26, 2007, Velasco, Jr.,
J.)
Doctrine of Incompatibility
Where the Ee has done something that is contrary
or incompatible with the faithful performance of his
duties, his Er has a just cause for terminating his
employment (Manila Chauffeur’s League v.
Bachrach Motor Co., G.R. No. L-47071, June 29, 1940).
Doctrine of Commensurate Penalty/
Proportionality Rule
In this regard, it is a hornbook doctrine
that infractions committed by an employee should
merit only the corresponding penalty demanded by
the circumstance. The penalty must be
commensurate with the act, conduct or omission
imputed to the employee and must be imposed in
connection with the disciplinary authority of the
employer. (Sagales v Rustans Commercial
Corporation, G.R. No. 166554, November 27, 2008)
AUTHORIZED CAUSES
Authorized causes of termination by the Er:
1. Installation of labor-saving devices
(automation/robotics)
2. Redundancy (superfluity in the performance
of a particular work) – Exists where the
services of an Ee are in excess of what is
reasonably demanded by the actual
requirements of the enterprise (Wiltshire File
Co., Inc. v. NLRC, G.R. No. 82249, February 7,
1991).Er must be in good faith in abolishing
redundant position and has fair and reasonable
criteria in ascertaining what positions are to be
declared redundant
3. Reorganization
4. Retrenchment –Er must be in good faith, has
Proof of expected or actual losses, and uses fair
and reasonable criteria in ascertaining who
43
would be retained among the Ees, such as
status, efficiency, seniority, physical fitness,
age, and financial hardship of certain workers
(FASAP v. PAL, G.R. No. 178083, October 2, 2009)
Actual losses need not set in prior to
retrenchment. (Cajucom VII v. TP Phils Cement
Corp., et al, G.R. No. 149090, February 11, 2005).
It is the reduction of personnel usually due to poor
financial returns as to cut down on costs of
operations in terms off salaries and wages to
prevent bankcruptcy of the company. (2 Poquiz,
2018, p. 560)
The kind of losses contemplated under the Labor
Code is actual or anticipated/impending losses.
There is NO prohibition for the ER to embark on
retretchment program if he could perceive that its
economy will go down the drain. (2 Poquiz, 2018, p.
554)
Q: Petitioner Lambert Lim (Lim) is a Malaysian
national operating various business in Cebu
and Bohol, one of which is Lambert
Pawnbrokers and Jewelry Corporation. They
hired Helen Binamira (Helen) as an appraiser in
July 1995 and designated her as Vault Custodian
in 1996. In 1998 however, she received a letter
from Lim terminating her employment effective
on the same day. Lim cited business losses
necessitating retrenchment as the reason for
the termination. Thus, Helen filed a case for
illegal dismissal alleging that she was dismissed
without cause and the benefit of due
process. Moreover, she claimed that there was
no proof that the company was suffering from
business losses.
A: There was no valid dismissal based on
retrenchment and/or redundancy in the case at
bar.Retrenchment is the termination of
employment initiated by the employer through no
fault of and without prejudice to the employees. To
effect a valid retrenchment, the following elements
must be present: (1) the retrenchment is
reasonably necessary and likely to prevent
business losses which, if already incurred, are not
merely de minimis, but substantial, serious and real,
or only if expected, are reasonably imminent as
perceived objectively and in good faith by the
employer; (2) the employer serves written notice
both to the employee/s concerned and the DOLE at
least one month before the intended date of
retrenchment; (3) the employer pays the
retrenched employee separation pay in an amount
prescribed by the Code; (4) the employer exercises
its prerogative to retrench in good faith; and (5) the
employer uses fair and reasonable criteria in
ascertaining who would be retrenched or retained.
5. Closing or cessation of operation of the
establishment or undertaking– Must be done
in good faith and not for the purpose of
circumventing pertinent labor laws.
Payment of separation pay is required only
where closure is neither due to serious
business losses nor due to an act of
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Government (North Davao Mining Corp v. NLRC,
G.R. No. 112546, Mar. 13, 1996; NFL v. NLRC, G.R.
No. 127718, March 2, 2000).
2 Kinds of Closure:
1. Partial Closure – although grounded on
economic losses, partial closure is a form of
retrenchment.
2. Total Closure due to economic reverses or
losses.
Test for the validity of closure or cessation of
establishment or undertaking
To be a valid ground for termination the following
must be present:
1. There must be a decision to close or cease
operation of the enterprise by the
management;
2. The decision was made in good faith; and
3. There is no other option available to the
employer except to close or cease operations.
(Sec. 5.4 (d), D.O. No. 147, Series of 2015)
6. Disease – (1) Must be incurable within 6
months and the continued employment is
prohibited by law or prejudicial to his health as
well as to the health of his co-Ees (2) with a
certification from the public health officer that
the disease is incurable within 6 months
despite due to medication and treatment.
The burden of proving compliance with these
requisites is on the employer. Non-compliance
leads to the conclusion that the dismissal was
illegal (Fuji Television Network v. Espiritu, G.R.
No. 204944-45, Dec. 03, 2014).
Other authorized causes
1. Total and permanent disability of Ee
2. Valid application of union security clause
3. Expiration of period in term of employment
4. Completion of project in project employment
5. Failure in probation
6. Relocation of business to a distant place
7. Defiance of return-to work-order
8. Commission of Illegal acts in strike
9. Violation of contractual agreement
10. Retirement
Steps required in termination of an Ee’s
employment for authorized causes:
1. Written Notice to DOLE 30 days prior to the
intended day of termination.
Purpose: To enable it to ascertain the veracity
of the cause of termination.
2. Written notice to Ee concerned 30 days prior
the intended date of termination.
3. Payment of separation pay
There is no obligation to pay separation pay:
a. When the closure of the business is due to
serious business loss
44
b. when the closure is due to an act of the
Government.
c. Where closure of business is by compulsion of
law because closure of business is not
attributed to Er’s will. (e.g.: the land where the
building is situated was declared covered by
the Comprehensive Agrarian Reform Law)
When an employee is placed under "floating
status" for more than six months, he is considered
to have been constructively dismissed. (Vicente C.
Tatel V. Jlfp Investigation Security Agency, Inc., Jose
Luis M. Pamintuan, and Paolo C. Turno G.R. No.
206942, February 25, 2015, Perlas-Bernabe, J.)
DUE PROCESS
TWIN NOTICE REQUIREMENT
Two-fold requirements of a valid dismissal for a
just cause
1. Substantive – It must be for a just cause.
2. Procedural – There must be notice and
hearing.
Twin requirements of procedural due process
[Art. 277(b), LC]
1. Notice – “Twin-notice rule”
a. First notice – Necessity of first notice to
inform the worker of the violation and
preparation for the defense (Pre-notice)
b. Last notice – To give the worker a notice of
the Er’s final decision (Post notice)
2. Hearing – Two fundamental rules:
a. Hearing means ample opportunity to be
heard
b. What the law prohibits is total absence of
opportunity to be heard
 If ample opportunity to be heard is
given, there is no violation.
 Position paper – A position paper is a
valid alternative because not all cases
are of litigation concerns. It should
suffice in matters that only involve a
question of law.
Procedure to be observed by the Er for the
termination of employment based on any of the
just causes for termination
1. A written noticeshould be served to the Ee
specifying the ground/s for termination and
giving the said Ee reasonable opportunity to
explain.
“Reasonable opportunity” under the Omnibus
Rules means every kind of assistance that
management must accord to the employees to
enable them to prepare adequately for their
defense. This should be construed as a period of at
least five (5) calendar days from receipt of the
notice to give the employees an opportunity to
study the accusation against them, consult a union
official or lawyer, gather data and evidence, and
decide on the defenses they will raise against the
complaint. (R.B. Michael Press And Annalene Reyes
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Escobia v. Nicasio C. Galit, G.R. No. 153510, February

13, 2008, Velasco, Jr., J).

2. A hearing or conferenceshould be held during

which the Ee concerned, with the assistance of
counsel, if the Ee so desires, is given the
opportunity to respond to the charge, provide
for his evidence and present the evidence
offered against him.
3. A written notice of termination – If termination
is the decision of the Er, it should be served on
the Ee indicating that upon due consideration
of all the circumstance, grounds have been
established to justify his termination.

In Agabon v. NLRC, G.R. No. 158693, November 17,

2004, it was held that when dismissal is for just or
authorized cause but due process was not
observed, the dismissal should be upheld. The Er,
however, should be held liable for damages.

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Procedural Due Process under Art. 282-284 of the LC as applied in the Agabon Case
Art. 282 Art. 283 Art. 284
The Er must give the Ee a notice The Er must give the Ee and the Er may terminate the services of
specifying the grounds for which DOLE written notices 30 days his Ee.
dismissal is sought, a hearing or an prior to the effectivity of his
opportunity to be heard and after separation.
hearing or opportunity to be heard, a
notice of the decision to dismiss.
The requirement under Art. 277 (b) of Worker is an inactive party in There is no hearing requirement
notice and hearing applies only in Art. the cause for termination. Only in diseases but there is notice
282 because the Er is accusing the notice with DOLE and notice to requirement to worker, but no
worker that the latter committed an worker is required. No need for notice to DOLE.
act or omission constituting a cause a hearing because due process is
for termination of his employment. found in LC (Art. 283) not in
Constitution according to
Agabon.

NOTE: in Art. 277 (b) in relation

to Art. 283, if the closure of
business will result in a mass
layoff and serious labor
dispute, the SLE can
enjoin the Er as regards
mass termination

Possible Situations Effect of termination Liability of ER

NO Liability
a. With Just or Authorized Cause
VALID
b. With Due Process NOTE: Separation Pay if for
Authorized Cause
Reinstatement + Full
a. Without Just or Authorized Cause Backwages
INVALID
b. With Due Process
NOTE: If Reinstatement not
possible —Separation Pay
Reinstatement + Full
a. Without Just or Authorized Cause Backwages
INVALID
b. Without Due Process
NOTE: If Reinstatement not
possible—Separation Pay
Liable for noncompliance
a. With Just or Authorized Cause With procedural requirements
VALID
b. Without Due Process
NOTE: Separation Pay if for
Authorized Cause

NOTE: The Agabon ruling was modified by JAKA Food Processing v. Pacot, G.R. No. 151378, March 28, 2005 where
it was held that:

1. If based on just cause(LC, Art. 282) but the Er failed to comply with the notice requirement, the sanction to
be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act
imputable to the Ee; and
2. If based on authorized causes(LC, Art. 283) but the Er failed to comply with the notice requirement, the
sanction should be stiffer because the dismissal process was initiated by Er’s exercise of his management
prerogative.

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Q: Integrated Pharma, engaged the services of
Rowena as "Clinician," tasked with the duty of
promoting and selling Integrated Pharma's
products. On April 6, Rowena received a
memorandum from her immediate supervisor
relative to her failure to remit her collections
and to return the CareSens POP demonstration
unit to the office, at a specified time. On April 19,
Integrated Pharma’s General Manager called
the Rowena to a meeting to inform the latter
that the management discovered that instead of
reporting P2.00 as the actual amount of her
travelling expense, Rowena charged Integrated
Pharma P10.00 as and for her transportation
expense. On April 21, Integrated Pharma served
a memorandum to Rowena stating the charges
against her. In the same memorandum, she was
required to submit a written explanation within
24 hours. Rowena, however, refused to accept
said memorandum. Subsequently, Rowena
received through registered mail another
memorandum likewise dated April 21, but
already denominated as Termination of
Employment. Rowena thus filed a complaint for
illegal dismissal. Is there a valid dismissal
despite Rowena was not accorded due process?
A: Yes. If the dismissal is based on a just cause
under Article 282 of the Labor Code, as in this case,
the employer must give the employee two written
notices and conduct a hearing. The first written
notice is intended to apprise the employee of the
particular acts or omissions for which the employer
seeks her dismissal; while the second is intended to
inform the employee of the employer's decision to
terminate him.
In the present case, Integrated Pharma presented
two first written notices (memoranda dated April
and April 21) charging Rowena with various
offenses. Both notices, however, fell short of the
requirements of the law. The April 21
memorandum did not afford petitioner ample
opportunity to intelligently respond to the
accusations hurled against her as she was not given
a reasonable period of at least five days to prepare
for her defense. Notably, respondents terminated
her employment through another memorandum
bearing the same date. Both the April 6 and the
April 21 memoranda do not contain a notice setting
a particular date for hearing or conference.
Failure to comply strictly with the requirements-of
procedural due process for dismissing an employee
will not render such dismissal ineffectual if it is
based on a just or an authorized cause. The
employer, however, must be held liable for nominal
damages for non-compliance with the
requirements of procedural due process.
TERMINATION BY EMPLOYEE
RESIGNATION
Resignation refers the voluntary act of an
employee who finds himself in a situation where he
believes that personal reason cannot be sacrificed
in favour of the exigency of the service, then he has
no other choice but to dissociate himself from his
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employment. (Intertrod Maritime, Inc. vs. NLRC, GR
81087, June 19, 1991)
CONSTRUCTIVE DISMISSAL
Constructive dismissal occurs when there is
cessation of work because continued employment
is rendered impossible, unreasonable, or unlikely
as when there is a demotion in rank or diminution
in pay or when a clear discrimination, insensibility,
or disdain by an Er becomes unbearable to the Ee
leaving the latter with no other option but to quit
(The University of Immaculate Conception v. NLRC,
G.R. No. 181146, January 26, 2011).
Burden of proof on the employee
The employee who is complaining of constructive
dismissal has the burden of proof “to prove that her
resignation was not voluntary, but was actually a
case of constructive dismissal, with clear, positive,
and convincing evidence.” (Hechanova v. Atty.
Matorre, GR No. 198261, October 16, 2013)
MANAGEMENT PREROGATIVE
Management prerogative
This prerogative flows from the established rule
that labor laws do not authorize the substitution of
judgment of the employer in the conduct of his
business. The employer can exercise this
prerogative without fear of liability as long as it is
done in good faith for the advancement of his
interests, and not for the purpose of defeating or
circumventing the rights of the employees under
special laws or valid agreements. It is valid as long
as it is not performed in a malicious, harsh,
oppressive, vindictive or wanton manner, or out of
malice or spite. (Great Pacific Employees Union vs.
Great Pacific Life Assurance, G.R. No. 126717,
February 11, 1999)
GR: An employer is free to regulate, according to his
own discretion and judgment, all aspects of
employment, including:
1. Hiring;
2. Work assignments;
3. Working methods, time, place and manner of
work;
4. Tools to be used;
5. Processes to be followed;
6. Supervision of workers;
7. Working regulations;
8. Transfer of employees;
9. Work supervision;
10. Layoff of workers; and,
11. Discipline, dismissal and recall of workers. (San
Miguel Brewery Sales v. Ople, G.R. No. 53515,
February 8, 1989)
As long as the company’s exercise of the same 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 valid agreements,
the courts will uphold them. (Capitol Medical
Center, Inc. v. Meris, G.R. No. 155098, September 16,
2005)
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Limitations on management prerogative
It is circumscribed by limitations found in:
1. Law,
2. CBA, or
3. General principles of fair play and justice
NOTE: It must be established that the prerogative
being invoked is clearly a managerial one.
DISCIPLINE
Er's right to discipline his Ees
The Er has the prerogative to instill discipline in his
Ees and to impose reasonable penalties, including
dismissal, on erring Ees pursuant to company rules
and regulations (San Miguel Corporation v. NLRC,
G.R. No. 87277, May 12, 1989).
Limitation on the Er’s power to discipline
While management has the prerogative to
discipline its Ees and to impose appropriate
penalties on erring workers, pursuant to company
rules and regulations, however, such management
prerogative must be exercised in good faith for the
advancement of the Er’s interest and not for the
purpose of defeating or circumventing the rights of
the Ees under special laws and valid agreements.
(PLDT v. Teves, G.R. No. 143511, November 15, 2010).
TRANSFER OF EMPLOYEES
Employer’s right to transfer and reassign Ees
In the pursuit of its legitimate business interests,
especially during adverse business conditions,
management has the prerogative to transfer or
assign Ees from one office or area of operation to
another provided there is no demotion in rank or
diminution of salary, benefits and other privileges
and the action is not motivated by discrimination,
bad faith, or effected as a form of punishment or
demotion without sufficient cause. This privilege is
inherent in the right of Ers to control and manage
their enterprises effectively.
Burden of proving that the transfer was
reasonable: The Er must be able to show that the
transfer is not unreasonable, inconvenient or
prejudicial to the Ee; nor does it involve a demotion
in rank or a diminution of his salaries, privileges
and other benefits. Should the Er fail to overcome
this burden of proof, the Ee’s transfer shall be
tantamount to constructive dismissal (Blue Dairy
Corporation v. NLRC, 314 SCRA 401).
Q: William was employed as an Instructor in
Data Center College Laoag City branch in Ilocos
Norte. On October 3, 2003, petitioner received a
Memorandum transferring him to Data Center
College Bangued, Abra branch as Head for
Education/Instructor due to an urgent need for
an experience officer and computer instructor
thereat. However, petitioner decline to accept
his transfer to Abra citing the deteriorating
health condition of his father and the absence of
additional remuneration to defray expenses for
48
board and lodging which constitutes implicit
diminution of his salary. Is William considered
constructively dismissed by respondents for the
reason that his transfer allegedly constitute
demotion in rank and diminution in pay?
A: No. Petitioners transfer is not tantamount to
constructive dismissal. Constructive dismissal is
quitting because continued employment is
rendered impossible, unreasonable or unlikely, or
because of a demotion in rank or a diminution of
pay. It is management prerogative for employers to
transfer employees on just and valid grounds such
as genuine business necessity. There was no
violation of the prohibition on diminution of
benefits. The rule against diminution of benefits is
applicable only if the grant or benefit is founded on
an express policy or has ripened into a practice over
a long period which is consistent and deliberate.
Petitioner failed to present any other evidence that
respondents committed to provide the additional
allowance or that they were consistently granting
such benefit as to have ripened into a practice
which cannot be peremptorily withdraw. (Barroga
v. Data Center of the Philippines, G.R. NO 174158,
June 27, 2011, Del Castillo, J.)
CHANGE OF WORKING HOURS
Er’s right to change working hours
The working hours may be changed, at the
discretion of the company, should such change be
necessary for its operations, and that employees
shall observe such rules as have been laid down by
the company. (Interphil Laboratories Union-FFW vs.
Interphil Laboratories, Inc., G.R. No. 142824,
December 19, 2001)
POST-EMPLOYMENT BAN
Non-involvement Clause
A non-involvement clause is not necessarily void
for being in restraint of trade as long as there are
reasonable limitations as to time, trade, and place.
It was also stated in this case that the Labor Law
validity of a non-involvement clause depends upon
the nature of work of the subject employee. Since
petitioner was the Senior Assistant Vice-President
and Territorial Operations Head in charge of
respondent’s Hong Kong and ASEAN operations,
she had been privy to confidential and highly
sensitive marketing strategies of respondent’s
business. To allow her to engage in a rival business
soon after she leaves would make respondent’s
trade secrets vulnerable especially in a highly
competitive marketing environment. In sum, we
find the non-involvement clause not contrary to
public welfare and not greater than is necessary to
afford a fair and reasonable protection to
respondent. (Daisy Tiu vs. Platinum Plans, G.R. No.
163512, February 28, 2007)
SOCIAL WELFARE LEGISLATION
SOCIAL SECURITY SYSTEM LAW (R.A. 8282)
COVERAGE
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1. Compulsory Coverage
a. All Ees not over 60 years of age and their
Ers;
b. Domestic helpers whose income is not less
than P 1000/month and not over 60 years
of age and their Ers;
Limitations:
i. Any benefit earned by the Ees under
private benefit plans existing at the
time of the approval of the Act shall
not be discontinued, reduced or
otherwise impaired;
ii. Existing private plans shall be
integrated with the SSS but if the Er
under such plan is contributing more
than what is required by this Act, he
shall pay to the SSS the amount
required to him, and he shall continue
with his contributions less the amount
paid to SSS;
iii. Any changes, adjustments,
modifications, eliminations or
improvements in the benefits of the
remaining private plan after the
integration shall be subject to
agreements between the Ers and the
Ees concerned; and
iv. The private benefit plan which the Er
shall continue for his Ees shall remain
under the Ers management and
control unless there is an existing
agreement to the contrary
c. All self-employed – considered both an Er
and Ee
NOTE: A self-employed person is one whose
income is not derived from employment as well
as those mentioned in Sec. 9-A of the law [RA
8282, Sec. 8(s)].
d. All self-employed professionals;
e. Partners and single proprietors of
business;
f. Actors and actresses, directors,
scriptwriters and news correspondents
who do not fall within the definition of the
term “Ee”;
g. Professional athletes, coaches, trainers and
h. jockeys; AND
i. Individual farmers and fisherman. (R.A.
8282, Sec. 9-A)
2. Voluntary
a. Spouses who devote full time to managing
the household and family affairs, unless
they are also engaged in other vocation or
employment which is subject to mandatory
coverage; [R.A. 8282, Sec. 9(b)]
b. Filipinos recruited by foreign-based Ers for
employment abroad may be covered by the
SSS on a voluntary basis; (Sec. 9[c], R.A.
8282)
c. Ee separated from employment to
maintain his right to full benefits
d. Self-employed who realizes no income for
a certain month
49
3. By agreement
Any foreign government, international
organization, or their wholly-owned
instrumentality employing workers in the
Philippines, may enter into an agreement with
the Philippine government for the inclusion of
such Ees in the SSS except those already
covered by their respective civil service
retirement systems.
NOTE: Seafarers are also covered by the SSS Law
– The result of the Memorandum of Agreement
entered by SSS and DOLE approved by the Social
Security Commission per the Commission's
Resolution No. 437, dated July 14, 1988 was that the
Standard Contract of Employment to be entered
into between foreign shipowners and Filipino
seafarers is the instrument by which the former
express their assent to the inclusion of the latter in
the coverage of the Social Security Act. (Ben Sta.
Rita v. Court of Appeals, G.R. No. 119891, (1995).
SICKNESS BENEFITS
Sickness benefit
It is a daily allowance paid to a covered Ee who
becomes sick and is confined in a hospital for more
than 3 days or elsewhere with the Commission’s
approval.
Reimbursement by SSS
GR: SSS shall reimburse the Er or pay the
unemployed member only for confinement within
1 year immediately preceding the date the claim for
benefit or reimbursement is received by the SSS.
XPN: Confinement in a hospital in which case the
claim for benefit or reimbursement must be filed
within 1 year from the last day of confinement (R.A.
8282, Sec. 14[c]).
PERMANENT DISABILITY BENEFITS
Permanent disability benefit
It is a cash benefit paid to a member who becomes
permanently disabled, either partially or totally.
Permanent total disability
The following are deemed permanent total
disabilities:
1. Complete loss of sight of both eyes;
2. Loss of two limbs at or above the ankle or
wrists;
3. Permanent complete paralysis of two limbs;
4. Brain injury resulting to incurable imbecility or
insanity; and
5. Such cases as determined and approved by the
SSS [RA 8282, Sec. 13-A (d)].
Q: Pastor works as a messman who figuredin an
accident on-board the vessel while carrying
heavy food provisions. The accident caused
back injury, resulting for Pastor’s inability to
work for more than 120 days. Pastor claims for
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permanent and total disability benefits against
his employers. Pastor’s employers denied the
claim on the ground that Pastor is not given a
disability assessment for such is a requirement
for compensability. Is the contention of Pastor’s
employers correct?
A: No. The company-designated physician is
expected to arrive at a definite assessment of the
seafarer's fitness to work or permanent disability
within the period of 120 or 240 days. That should
he fail to do so and the seafarer's medical condition
remains unresolved, the seafarer shall be deemed
totally and permanently disabled. Clearly at that
time, the period of 240 days had already lapsed
without the company-designated physician issuing
a declaration of Pastor’s fitness to work or of the
existence of his permanent disability. This only
means that his condition remained unresolved even
after the lapse of the said period and, consequently,
his disability is deemed permanent and total.
(Centennial Transmarine, Inc. et al, v. Pastor, G.R. No.
198096, July 8, 2015)
RETIREMENT BENEFIT
Retirement benefit
It is a cash benefit paid to a member who can no
longer work due to old age.
Children of the retiree member who are entitled
to dependent’s pension
Only 5 minor children, beginning from the
youngest, are entitled to the dependent’s pension.
No substitution is allowed. Where there are more
than 5 legitimate and illegitimate children, the
legitimate ones will be preferred (RA 8282, Sec. 12-
A).
Prescriptive period to claim the benefits
GR: 10 years from the date of contingency
The term “parents” in the phrase “dependent
parents” in the afore-quoted Article 167 (j) of the
Labor Code is used and ought to be taken in its
general sense and cannot be unduly limited to
“legitimate parents” as what the ECC did. The
phrase “dependent parents” should, therefore,
include all parents, whether legitimate or
illegitimate and whether by nature or by adoption.
When the law does not distinguish, one should not
distinguish. Plainly, “dependent parents” are
parents, whether legitimate or illegitimate,
biological or by adoption, who are in need of
support or assistance (Bartolome v. SSS, G.R. No.
192531, November 12, 2014).
GSIS LAW (R.A. 8291)
COVERAGE
Coverage of life insurance, retirement and other
social security protection
GR: All members of the GSIS shall have life
insurance, retirement, and all other social security
protections such as disability, survivorship,
separation, and unemployment benefits (R.A. 8291,
Sec. 3).
50
XPNs: The members of the following shall have life
insurance only:
1. The Judiciary; and
2. Constitutional Commissions
Compulsory coverage of life insurance
GR: All Ees receiving compensation who have not
reached the compulsory retirement age,
irrespective of employment status
XPNs: All members of the Armed Forces of the
Philippines and the Philippine National Police
(PNP).
SEPARATION BENEFITS
Effects of separation from service with regard to
membership
A member separated from the service shall
continue to be a member and shall be entitled to
whatever benefits he has qualified to (once a
member always a member).
NOTE: A member separated for a valid cause shall
automatically forfeit his benefits, unless the terms
of resignation or separation provide otherwise. In
the case of forfeiture, the separated employee shall
be entitled to receive only ½ of the cash surrender
value of his insurance.
RETIREMENT BENEFITS
Rule in case of extension of service in order to
be entitled for retirement benefits
The Supreme Court held that the head of the
government agency concerned is vested with
discretionary authority to allow or disallow
extension of the service of an official or Ee who has
reached 65 years old without completing the 15
years of government service. However, this
discretion is to be exercise conformably with the
provisions of Civil Service Memorandum Circular
No. 27, series of 1990 which provides that the
extension shall not exceed 1 year (Rabor v. CSC, G.R.
No. 111812, May 31, 1995).
PERMANENT DISABILITY BENEFITS
Total disability
Complete incapacity to continue with present
employment or engage in any gainful occupation
due to the loss or impairment of the normal
functions of the physical and/or mental faculties of
the member
Instances when recovery is precluded
If the permanent disability was due to the following
acts of the subject Ee, recovery from the GSIS is
precluded:
1. Grave misconduct
2. Notorious negligence
3. Habitual intoxication
4. Willful intention to kill himself or another
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Q: Besitan was employed by BSP as a bank
examiner. While being employed, Besitan was
diagnosed with a disease which requires kidney
transplant, incurring expenses on Besitan’s
part. Besitan filed to GSIS a claim for
compensability benefits, believing that his
working condition increased his risk of
contracting the disease. GSIS and ECC both
denied the claim on the ground that it failed to
establish work-connection. Is Besitan entitled
to the claims?
A: YES. Under the increased risk theory, there must
be a reasonable proof that the employees working
condition increased his risk of contracting the
disease, or that there is a connection between his
work and the cause of the disease. Only a
reasonable proof of work-connection, not direct
causal relation, however, is required to establish
compensability of a non-occupational disease.
Probability, and not certainty, is the yardstick in
compensation proceedings; thus, any doubt should
be interpreted in favor of the employees for whom
social legislations, like PD No. 626, were enacted.
TEMPORARY DISABILITY BENEFITS
Temporary total disability
It accrues or arises when the impaired physical
and/or mental faculties can be rehabilitated and/or
restored to their normal functions [R.A. 8291, Sec.
2(t)].
SURVIVORSHIP BENEFITS
No presumption of Sham Marriages
The present GSIS law does not presume that
marriages contracted within three years before
retirement or death of a member are sham
marriages contracted to avail of survivorship
benefits. The law acknowledges that whether the
surviving spouse contracted the marriage mainly to
receive survivorship benefits is a matter of
evidence. It no longer prescribes a sweeping
classification that unduly prejudices the legitimate
surviving spouse and defeats the purpose for which
Congress enacted the social legislation. (Alcantara,
Book II; GSIS v. Montesclaros, G.R. No. 146494, July
14, 2004)
Prescriptive period to claim the benefits
GR: 4 years from the date of contingency
XPNs: Life insurance and retirement (R.A. 8291, Sec.
28).
LIMITED PORTABILITY LAW (R.A. 7699)
Limited portability rule
A covered worker who transfers employment from
one sector to another or is employed on both
sectors, shall have creditable services or
contributions on both Systems credited to his
service or contribution record in each of the
Systems and shall be totalized for purposes of old-
age, disability, survivorship, and other benefits in
either or both Systems (R.A. 7699, Sec. 3)
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Portability
Refers to the transfer of funds for the account and
benefit of a worker who transfers from one system
to the other. [Sec. 2 (b), R.A. 7699]
The totalization shall not apply to following
instances:
1. If a worker is not qualified for any benefits from
both Systems; or
2. If a worker in the public sector is not qualified
for any benefits from the GSIS; or
If the worker in the private sector is not qualified for
any benefits from the SSS
EMPLOYEES’ COMPENSATION
Employees’ compensation program
It is the program provided for in Arts. 166 to 208 of
the LC whereby a fund known as the State
Insurance Fund is established through premium
payments exacted from Ers and from which the Ees
and their dependents in the event of work-
connected disability or death, may promptly secure
adequate income benefit, and medical or related
benefits.
In general
1. Injury and the resulting disability or death
must be the result of an employment accident
satisfying all the following grounds:
a. Ee must have been injured at the place
where his work requires him to be;
b. Ee must have been performing his official
functions; and
c. If injury is sustained elsewhere, the Ee
must have been executing an order for the
Er. [Amended Rules on EC, Rule III, Sec. 1(a)]
2. For sickness and the resulting disability or
death, the sickness must be the result of an
occupational disease listed under the IR with
the conditions set therein satisfied.
XPN: Proof must be shown that the risk of
contracting the disease is increased by the
working conditions. [Amended Rules on EC, Rule
III, Sec. 1(b)]
Defenses that may be interposed by the state
insurance fund against a claim for
compensation made by a covered Ee or his
dependents
The following defenses may be set up:
1. Injury is not work-connected or the sickness is
not occupational
2. Disability or death was occasioned by the Ee’s
intoxication, willful intention to injure or kill
himself or another, or his notorious negligence.
(LC, Art. 172).
3. No notice of sickness, injury or death was given
to the Er. (LC, Art. 206).
4. Claim was filed beyond 3 years from the time
the cause of action accrued. (LC, Art. 201 as
amended by P.D. 1921)
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Dual Purpose Doctrine
This doctrine considers as compensable the injury
that an Ee sustains while on a trip undertaken for
the benefit of the Er even if in the course of such
business trip the Ee pursues a personal purpose.
(Azucena, 2013)
Theory of increased risk
The term “sickness” as defined in Art. 167(l) of the
LC is a recognition of the theory of increased risk.
To establish compensability under the same, the
claimant must show substantial proof of work-
connection, but what is required is merely a
reasonable work-connection and not a direct causal
relation. Proof of actual cause of the ailment is not
necessary. The test of evidence of relation of the
disease with the employment is probability and not
certainty. (Jimenez v. Employees’ Compensation
Commission, G.R. No. L-58176, Mar. 23, 1984;
Panotes vs. ECC, G.R. No. L-64802, Sept. 23, 1985)
Going and coming rule
GR: In the absence of special circumstances, an Ee
injured while going to or coming from his place of
work is excluded from the benefits of Workmen’s
Compensation Act.
XPNs:
1. Where the Ee is proceeding to or from his work
on the premises of the Er;
2. Proximity Rule—where the Ee is about to enter
or about to leave the premises of his Er by way
of exclusive or customary means of ingress and
egress;
3. Ee is charged, while on his way to or from his
place of employment or at his home, or during
this employment with some duty or special
errand connected with his employment; and
4. Where the Er as an incident of the employment
provides the means of transportation to and
from the place of employment.
The POEA-SEC provides for a disputable
presumption of work-relatedness for non-POEA-
SEC-listed occupational disease and the resulting
illness or injury which he may have suffered during
the term of his employment contract. This
disputable presumption is made in the law to
signify that the non-inclusion in the list of
compensable diseases/illnesses does not translate
to an absolute exclusion from disability benefits. In
other words, the disputable presumption does not
signify an automatic grant of compensation and/or
benefits claim; the seafarer must still prove his
entitlement to disability benefits by substantial
evidence of his illness' work-relatedness (Jebsen
Maritime v. Ravena, G.R. No. 200566, September 17,
2014).
Recovery from the State Insurance Fund does
not bar a claim for benefits under the SSS Law
As expressly provided for in Art. 173 of the LC,
payment of compensation under the State
52
Insurance Fund shall not bar the recovery of
benefits under the SSS Law.
Permanent and total disabilities
The following disabilities shall be deemed
permanent and total:
1. Temporary total disability lasting continuously
for more than one hundred twenty days, except
as otherwise provided for in the Rules;
2. Complete loss of sight of both eyes;
3. Loss of two limbs at or above the ankle or wrist;
4. Permanent complete paralysis of two limbs;
5. Brain injury resulting in incurable imbecility or
insanity; and
6. Such cases as determined by the Medical
Director of the System and approved by the
Commission. [LC, Art.192(c)]
NOTE: Permanent total disability may arise
although the employee does not lose the use of any
part of his body. Where the Ee is unable, by reason
of the injury or sickness, to perform his customary
job for more than 120 days, permanent total
disability arises. (Ijares vs. CA, G.R. No. 105854,
August 26, 1999)
Del Castillo Case:
Q: Balasta was hired as an Able Seaman by his
employers. While on board, Balasta
experienced chest pains, fatigue, and shortness
of breath. The incident requires further medical
examination as Balasta was repatriated back in
the Philippines. Balasta was diagnosed with
heart disease which requires bypass operation.
Balasta claimed for disability benefits against
his employers but denied the same on the
ground that Balasta’s illness is not work related.
Can Balasta claim for disability benefits?
A: YES. Regarding the issue of compensability, it
has been the Court’s consistent ruling that in
disability compensation, "it is not the injury which
is compensated, but rather it is the incapacity to
work resulting in the impairment of one’s earning
capacity." Moreover, "the list of illnesses/diseases
in Section 32-A does not preclude other
illnesses/diseases not so listed from being
compensable. The POEA-SEC cannot be presumed
to contain all the possible injuries that render a
seafarer unfit for further sea duties."The company-
designated physician must arrive at a definite
assessment of the seafarer’s fitness to work or
permanent disability within the period of 120 or
240 days, pursuant to Article 192 (c)(1) of the
Labor Code and Rule X, Section 2 of the AREC. If he
fails to do so and the seafarer’s medical condition
remains unresolved, the latter shall be deemed
totally and permanently disabled. (Fil-Pride
Shipping Company, Inc. et al, v. Balasta, G.R. No.
193047, March 3, 2014)
LABOR RELATIONS
Labor Organization refers to any union or
association of employees in the private sector
which exists in whole or in part for the purpose of
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collective bargaining or of dealing with employers
concerning terms and conditions of employment.
Union refers to any labor organization in the
private sector organized for collective bargaining
and for other legitimate purpose.
Registration of a Union
A labor organization may be registered or not. If
registered, it is considered “legitimate labor
organization” (LLO). But the reverse is not true,
that is, a labor organization is not “illegitimate” just
because it is unregistered. It is still a lawful
organization but it has no legal personality to
demand collective bargaining with the employer.
(2, Azucena, 2016, p. 186-187)
Worker’s Association refers to an association of
workers organized for mutual aid and protection of
its members or for any legitimate purpose other
than collective bargaining
Creation of a Union
A union may be created either through:
(a) Independent registration; or
(b) Chartering
Chartered Local
A union created through chartering is called a local,
a chapter, or a chartered local in the employer
enterprise where the union officers and members
are employees.
Tentative Legal Personality
Upon being issued a charter certificate, a chapter
acquires legal personality, but “only for purposes of
filing a petition for a certification election…” (LC,
Art. 234-A)
RIGHT TO SELF-ORGANIZATION
Extent of the right to self-organization
It includes at least two (2) rights:
1. The right to form, join or assist labor
organizations; and
2. The right to engage in lawful concerted
activities (LC, Art. 257).
Collective Bargaining v. Dealing with Employer
Collective Bargaining is a right acquired by a labor
organization after registering with DOLE and after
being recognized or certified by DOLE as the EBR of
the employees.
Dealing with Employer is a generic description of
interaction between employer and employees
concerning grievances, wages, work hours and
other terms and conditions of employment if if the
employees’ group is not registered with DOLE.
WHO MAY UNIONIZE FOR PURPOSES OF
COLLECTIVE BARGAINING
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All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable,
medical or educational institutions whether
operating for profit or not (LC, Art. 253).
Q: Lepanto Consolidated Mining Co. is engaged
in large-scale mining in Benguet. Meanwhile,
The Lepanto Capataz Union (LCU) is a labor
organization duly registered before DOLE.
Seeking to represent 139 capatazes, LCU filed a
petition for consent election before the
Regional Office of DOLE. Lepanto opposed the
petition, alleging that LCU is in fact filing a
petition for certification election, because it
contests the status of the Lepanto Employees
Union (LEU) as the current collective bargaining
agent, of which the capatazes are already
members. The Med-Arbiter, granting the
petition for consent election, ruled that the
capatazes form a separate bargaining unit
because they are not rank-and-file employees
and allowed the holding of the consent election.
Was the Med-Arbiter correct?
A: YES. The capatazes were performing functions
totally different from those performed by the rank-
and-file employees, and that the capatazes were
“supervising and instructing the miners, mackers
and other rank-and-file workers under them,
assess[ing] and evaluat[ing] their performance,
mak[ing] regular reports and recommend[ing] new
systems and procedure of work, as well as
guidelines for the discipline of employees.”
The bargaining unit sought to be represented by
LCU are the capataze employees of Lepanto. There
is no other labor organization of capatazes within
the employer unit except herein LCU. Thus, Lepanto
is an unorganized establishment in so far as the
bargaining unit of capatazes is concerned. In any
event, we affirm that capatazes or foremen are not
rank-and-file employees because they are an
extension of the management, and as such they may
influence the rank-and-file workers under them to
engage in slowdowns or similar activities
detrimental to the policies, interests or business
objectives of the employers. (Lepanto Consolidated
Mining Co. V. The Lepanto Capataz Union, G.R. No.
157086, 18 February 2013)
WHO CANNOT FORM, JOIN, AND ASSIST LABOR
ORGANIZATIONS
The following cannot form, join or assist labor
organizations:
1. Managerial employees
2. Confidential employees (in the field of labor
relations)
3. Employees of international organizations
4. Employee-members of a cooperative
5. Foreign workers
6. Religious objectors; INC members
7. Members of AFP, police officers, policemen,
firemen, and jail guards
8. High level government employees
9. Aliens without a valid working permit; or
10. Aliens with working permits but are nationals
of a country which do not allow Filipinos to
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exercise their right of self-organization and to
join or assist labor organizations. (reciprocity)
11. Non-Ees
Doctrine of Necessary Implication
The doctrine of necessary implication states that
what is implied in a statute is as much a part thereof
as that which is expressed.
The reason for ineligibility of managerial
employees to form, assist or join a labor union
equally applies to confidential employees. While
the Labor Code singles out managerial employees
as ineligible to join, under the doctrine of necessary
implication, confidential employees are similarly
disqualified (National Association of Trade Unions -
Republic Planters Bank Supervisors Chapter v. Hon.
Torres, G. R. No. 93468, December 29, 1994).
CONFIDENTIAL EMPLOYEES
Confidential employees (in the field of labor
relations)
A confidential employee is one who assists and acts
in a confidential capacity to, or has access to
confidential matters of, persons who exercise
managerial functions in the field of labor relations
(Philips Industrial Development v. NLRC, G. R. No.
88957, June 25, 1992).
Confidential employees are those who:
1. Assist or act in a confidential capacity,
2. Formulate, determine, and effectuate
management policies in the field of labor
relations.
The two (2) criteria are cumulative, and both
must be met if an employee is to be considered a
confidential employee – that is, the confidential
relationship must exist between the employee and
his supervisor, and the supervisor must handle the
prescribed responsibilities relating to labor
relations. (Tunay na Pagkakaisa ng Manggawa sa
Asia Brewery vs. Asia Brewer, Inc., G.R. No. 162025,
August 3, 2010)
Human Resource Assistants and Personnel
Assistants are considered confidential
employees
As Human Resource Assistant, the scope of one’s
work necessarily involves labor relations,
recruitment and selection of employees, access to
Ees' personal files and compensation package, and
human resource management. As regards a
Personnel Assistant, one's work includes the
recording of minutes for management during CB
negotiations, assistance to management during
grievance meetings and administrative
investigations, and securing legal advice for labor
issues from the petitioner’s team of lawyers, and
implementation of company programs. Therefore,
in the discharge of their functions, both gain access
to vital labor relations information which outrightly
disqualifies them from union membership. (San
Miguel Foods Inc. v. San Miguel Corporation
54
Supervisors and Exempt Union, G.R. No. 146206,
August 1, 2011)
Exception of Payroll Masters
The position of Payroll Master does not involve
dealing with confidential labor relations
information in the course of the performance of his
functions. (San Miguel Foods Inc. v. San Miguel
Corporation Supervisors and Exempt Union, G.R. No.
146206, August 1, 2011).
BARGAINING UNIT
Bargaining Unit (BU) refers to group of employees
sharing mutual interests within a given employer
unit.
Tests to determine the appropriate BU
1. Community or mutuality of interest
2. Will of the employees or “Globe Doctrine”
3. Collective bargaining history
4. Similarity of employment status
Will of the employees or “Globe Doctrine”
The desire or will of the employees concerning their
inclusion or exclusion from a BU is inherent in their
basic right to self-organization. [Globe Machine &
Stamping Co., 3 NLRB 294 (1937)]
BARGAINING REPRESENTATIVE
Bargaining representative refers to a legitimate
labor union duly recognized or certified as the sole
and exclusive bargaining agent (SEBA) or
representative of all the employees in a bargaining
unit that will negotiate a collective contract with the
employer.
Three (3) methods of determining the exclusive
bargaining representative:
1. SEBA Certification
2. Certification Election
3. Consent Election
SEBA CERTIFICATION
It is the process where a union requests the DOLE
regional director to recognize and certify the union
as the SEBA (sole and exclusive bargaining agent)
of the BU it purports to represent for purposes of
collective bargaining with the employer.
NOTE: This is a new mode of determining SEBA.
D.O. No. 40-I-15 has expressly repealed the entire
set of Rules applicable to Voluntary Recognition in
the Implementing Rules on Book V of the LC.
Rationale for repeal of voluntary recognition
By allowing the employer to extend “voluntary
recognition” to a union, it is no longer the
employees but the employer who determines and
designates the SEBA when is supposed to be just a
mere “by-stander” in such determination and
designation process. (Chan, 2017)
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Requisites for issuance of SEBA:
1. BU is not unionized;
2. Requesting union is the only union in that BU;
3. CBU majority are members of the union.
CERTIFICATION ELECTION
It is the process of determining through secret
ballot the sole and exclusive representative of the
Ees in an appropriate bargaining unit, for purposes
of CB or negotiation. [IRR, Book V, Rule I, Sec. 1 (h)]
Who may file a petition for certification election
(PCE)
The following may file a PCE:
1. a registered union;
2. a national union/federation that issued a
charter certificate to its local chapter;
3. the local chapter itself; or
4. the employer but only when requested to
bargain collectively in a bargaining unit
where no CBA exists. (IRR as amended by
D.O. 40-F-03, Book V, Rule VIII, Sec. 1)
When to file the PCE
If there is no CBA, it can be filed anytime except
within 12 months of a previous election.
If there is a CBA, PCE can be filed only within the
freedom period which is the last 60 days of the fifth
year of the CBA.
Equity of the Incumbent
The incumbent bargaining agent will not file a PCE
because it will not contest its own status as the
bargaining representative
It does not lose its representative status; it remains
the sole bargaining representative until it is
replaced by another. Until so replaced, it has the
right to retain the recognition by the employer.
Q: KML filed with the Med-Arbitration Unit of
the DOLE a Petition for Certification Election, as
a legitimate labor organization of the rank &
files employees of Legend International Resorts
Limited (Legend). Legend moved to dismiss the
petition alleging that KML is not a LLO because
it is composed of rank & files and supervisory
employees in violation of Article 245 of the LC.
DOLE holds that KML’s legitimacy as a union
could not be collaterally attacked, citing Section
5 Rule V of Department Order No. 9, series of
1997. Undeterred, Legend filed a Petition for
Certiorari with the CA on the ground of DOLE’s
grave abuse of discretion. However, the CA held
that there was no grave abuse of discretion.
Further, the Decision upholding the legitimacy
of the KML as a labor union had long become
final and executory, as such it has every right to
file a petition for certification of election. Did
the CA committed serious error in the
application of law in denying the petitioners
petition for certiorari?
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A: NO. For notwithstanding the finality of the
decision canceling the certificate of registration of
KML, it would not retroact to the time of its
issuance. Meaning that despite the fact the KML
filed its petition for certification of election during
the pendency of the trial ruling over the legitimacy
of KML as a labor union, its filing for said petition
was done when it still had legal personality. KML is
allowed to perform such act for there is an absence
of an order directing their cancellation (Legend
International Resorts Limited v. KML, G.R. No.
169754, February 23, 2011).
Five-year representation status of a bargaining
agent cannot be extended
While the parties may agree to extend the CBA’s
original five-year term together with all other CBA
provisions, any such amendment or term in excess
of five years will not carry with it a change in the
union’s exclusive CB status. Under Art. 253-A, LC,
the exclusive bargaining status cannot go beyond
five years and the representation status is a legal
matter not for the workplace parties to agree upon.
(FVC Labor Union-Philippine Transport and General
Workers Organization v. Sama-samang
Nagkakaisang Manggagawa sa FVC-Solidarity of
Independent and General Labor Organizations, G.R.
No. 176249, November 27, 2009).
GROUNDS FOR DENIAL OF PCE
No certification election may be held nder the
following rules:
1. Certification year bar rule;
2. Negotiations bar rule;
3. Bargaining deadlock bar rule; or
4. Contract bar rule
Denial; Other grounds:
1. Non-appearance: When petitioner does not
appear in two (2) successive conferences called
by the Med-Arbiter, the petition may be
dismissed.
2. Illegitimacy – Unregistered union: When the
petitioning union is not listed in DOLE’s list of
LLOs or if its registration has been cancelled.
3. Illegitimacy – No charter: When the union
fails to submit a duly issued charter certificate
of the chapter at the time the union files its PCE,
it will cause the dismissal of the PCE.
4. Absence of employment relationship:
Employees right to unionize is founded on the
existence of Er-Ee relationship. If there is none,
there would be no basis.
5. Lack of support (25% signature
requirement): When the union filing a PCE
does not have the support of 25% of the
bargaining unit manifested through their
signatures, the PCE may be denied.
Effect if the petition for certification election
was not accompanied by the requisite 25%
consent signatures
Under the Implementing Rules, absence or failure
to submit the written consent of at least 25% of all
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the Ees in the bargaining unit to support the
petition is a ground for denying the said petition.
The Supreme Court said that the Mediator-Arbiter
may still have the discretion to grant or deny the
petition. Even if there is no 25% consent signature
submitted together with the petition, it is within the
discretion of the Med-Arbiter whether to grant or
deny the petition. (Port Workers Union v. Bienvenido
Laguesma, G.R. Nos. 94929-30)
If the petition, however, is accompanied by the 25%
consent signatures, then the holding of the CE
becomes mandatory. (California Manufacturing
Corp. v. Laguesma, G.R. No. 97020, June 8, 1992)
Q: Does the filing of a petition for cancellation of
registration of union cause the suspension or
dismissal of a PCE?
A: NO. An order to hold a certification election is
proper despite the pendency of the petition for
cancellation of the registration certificate of the
respondent union. The rationale for this is that at
the time the respondent union filed its petition, it
still had the legal personality to perform such act
absent an order directing the cancellation.
(Association of Court of Appeals Employees v. Ferrer-
Calleja, G.R. No. 94716, November 15, 1991)
Double Majority rule (certification election)
1. Valid election – majority of eligible voters
shall have validly cast their votes (First
Majority rule).
2. Winning Union – the winner who obtained
majority of the valid votes casts shall be
declared as the bargaining agent in the
bargaining unit (Second Majority rule).
Employer as a Bystander (Bystander Rule)
In all cases, whether the PCE is filed by an Er or a
LLO, the Er shall not be considered a party thereto
with a concomitant right to oppose a PCE.
The Er’s participation in such proceedings shall be
limited to: (1) being notified or informed of
petitions of such nature; and (2) submitting the list
of Ees during the pre-election conference should
the Mediator-Arbiter act favorably on the petition.
CONSENT ELECTION
It is an election voluntarily agreed upon by the
parties, with or without the intervention by the
DOLE. [IRR, Book V, Rule I, Sec.1 (h)]
Run-Off Election
It is an election conducted when:
1. A CE which provides for three or more choices
results in none of the contending unions
receiving a majority of the valid votes cast, and
2. There are no objections or challenges which if
sustained can materially alter the results,
provided
3. The total number of votes for all the contending
unions is at least 50% of the number of votes
cast (IRR, Book V, Rule X, Sec. 1).
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4. None of the choices obtained the majority of the
valid votes cast (50%+ 1 second majority);
5. The two choices which garnered the highest
votes will be voted and the one which garners
the highest number of votes will be declared
the winner provided they get the majority
votes of the total votes cast.
NOTE: Thus if “no union” garnered the majority
vote, no run-off elections may be held.
Re-Run Election
It is an election that takes place when:
1. One choice receives a plurality of the vote and
the remaining choices results in a tie; or
2. All choices received the same number of votes.
Three (3) instances when there would be a re-
run election:
1. Failure on certification on election declared by
the election officer;
2. Tie between two union;
3. Tie between a union and no union.
Illegally dismissed employees of the company
may participate in the certification election
Ees who have been improperly laid off but who
have at present an unabandoned right to or
expectation of re-employment, are eligible to vote
in CEs. Thus, and to repeat, if the dismissal is under
question, as in the case now at bar whereby a case
of illegal dismissal and/or ULP was filed, the Ees
concerned could still qualify to vote in the elections.
(Phiippine Fruits & Vegetables Industries v. Torres,
G.R. No. 92391, July 3, 1992)
Duty of Fair Representation
The winning union in the certification election
becomes the EBA of all the workers in the BU and
shall represent even the members of the minority
union.
RIGHTS OF LABOR ORGANIZATION
UNION DUES AND SPECIAL ASSESSMENTS
Legitimate labor organizations are authorized to
collect reasonable amount of the following:
1. Membership fees
2. Union dues
3. Assessments
4. Fines
5. Contribution for labor education and research,
mutual death and hospitalization benefits,
welfare fun, strike fund and credit and
cooperative undertakings [LC, Art. 277 (a)]
6. Agency fees [LC, Art. 248 (e)]
Assessments
Payments used for a special purpose. Especially if
required only for a limited time.
Union dues
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These are regular monthly contributions paid by
the members to the union in exchange for the
benefits given to them by the CBA and to finance the
activities of the union in representing the union.
Check-off
It is a method of deducting from an Ee’s pay at a
prescribed period, the amounts due the union for
fees, fines and assessments.
Special assessments or extraordinary fees
These are assessments for any purpose or object
other than those expressly provided by the labor
organization’s Constitution and by-laws.
REQUIREMENTS FOR VALIDITY
GR: No special assessments, attorney’s fees,
negotiation fees or any other extraordinary fees
may be checked off from any amount due to an Ee
without individual written authorization duly
signed by the Ee.
The authorization should specify the:
1. Amount
2. Purpose &
3. Beneficiary of the deduction.
XPNs:
1. For mandatory activities under the LC
2. For Agency Fees
3. When non-members of the union avail of the
benefits of the CBA:
a. Non-members may be assessed union dues
equivalent to that paid by union members;
b. Only by board resolution approved by
majority of the members in general
meeting called for the purpose.
Three (3) Requisites to Collect Special
Assessment
1. Authorization by a written resolution of the
majority of all members at the general
membership meeting duly called for that
purpose;
2. Secretary’s record of the minutes of the
meeting;
3. Individual written authorization for check-off
duly signed by the employee concerned. (ABS-
CBN Supervisors Employees Union Members v.
ABS-CBN Corp., G. R. No. 106518, March 11,
1999)
AGENCY FEES
It is an amount which a non-union member pays to
the union because he benefits from the CBA
negotiated by the union.
Q: A is employed by XYZ Company where XYZ
Employees Union (XYZ-EU) is the recognized
exclusive bargaining agent. Although A is a
member of rival union XYR-MU, he receives the
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benefits under the CBA that XYZ-EU had
negotiated with the company. XYZ-EU assessed
A, a fee equivalent to the dues and other fees
paid by its members but A insists that he has no
obligation to pay said dues and fees because he
is not a member of XYZ–EU and he has not
issued an authorization to allow the collection.
Explain whether his claim is meritorious. (2010
Bar Question)
A: NO. The fee exacted from A takes the form of an
agency fee which is sanctioned by Art. 248 (e), LC.
The collection of agency fees in an amount
equivalent to union dues and fees from Ees who are
not union members is recognized under the LC. The
union may collect such fees even without any
written authorization from the non-union member
Ees, if said Ees accept the benefits resulting from
the CBA. The legal basis of agency fees is quasi-
contractual (Del Pilar Academy v. Del Pilar Academy
Employees Union, G.R. No. 170112, April 30, 2008).
Requisites for assessment of agency fees
1. The Ee is part of the bargaining unit
2. He is not a member of the union
3. He partook of the benefits of the CBA
COLLECTIVE BARGAINING AGREEMENT
Collective Bargaining Agreement is a contract
executed upon request of either the Er or the
exclusive bargaining representative of the Ees
incorporating the agreement reached after
negotiations with respect to wages, hours of work,
terms and conditions of employment, including
proposals for adjusting any grievance or questions
under the agreement.
Jurisdictional Preconditions of Collective
Bargaining:
1. Possession of the status of majority
representation of the employees’
representative
2. Proof of majority representation
3. A demand to bargain.
Ratification of the CBA
GR: The agreement negotiated by the employees'
EBR should be ratified or approved by the majority
of all the workers in the bargaining unit. The proper
ratifying group is not the majority union but the
majority of all the workers in the bargaining unit
represented by the negotiation. A CBA is valid
between the parties, but unless it will be ratified, it
shall not be enforceable.
XPN: Ratification of the CBA by the employees is not
needed when the CBA is a product of an arbitral
award by a proper government authority [LC, Art.
263 (g)] or a voluntary arbitrator (LC, Art. 262).
Duration of a CBA
1. Economic and Non-Economic Aspect may
last for a maximum period of three (3) years
after the execution of the CBA.
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2. Representation Aspect may last for five (5)
years. It refers to the identity and majority
status of the union that negotiated the CBA as
the exclusive bargaining representative.
Zipper clause
It is a stipulation in a CBA indicating that issues that
could have been negotiated upon but not contained
in the CBA cannot be raised for negotiation when
the CBA is already in effect.
While the contracting parties may establish such
stipulations, clauses, terms and conditions, as they
may see fit, the right to contract is still subject to the
limitation that the agreement must not be contrary
to law or public policy. The requirement of a
masteral degree for tertiary education teachers is
not unreasonable. The operation of educational
institutions involves public interest. They may be
required to take an examination or to possess
postgraduate degrees as prerequisite to
employment (University of the East v. Pepanio, G. R.
No. 193897, Jan. 23, 2013)
"Automatic renewal clause" or principle of hold
over or CBA continuity refers to that provision of
the Labor Code (Article253) which states that "It
shall be the duty of both parties (to a CBA) to keep
the status quo and to continue in full force and
effect the terms andconditions of the existing
agreement during the 60-day (freedom) period
and/or until a new agreementis reached by the
parties."
Substitutionary Doctrine
This doctrine holds that the employees cannot
revoke the validly executed collective bargaining
contract with their employer by the simple
expedient of changing their bargaining agent. The
new agent must respect the contract. The
employees, thru their new bargaining agent, cannot
renege on the collective bargaining contract, except
to negotiate with the management for the
shortening thereof. (Elisco-Elirol Labor Union,
December 29, 1977)
UNFAIR LABOR PRACTICE
ULP only refers to acts that violate the right of
employees to self-organization and the observance
of the CBA. Thus, not all unfair acts constitute as
unfair labor practice. Without the element of self-
organization, an act, no matter how unfair, cannot
be considered as unfair labor practice.
Q: Is there an exception where ULP is committed
even if the act is not a violation of an employee’s
right to self-organization?
A: YES. Dismissing or prejudicing an employee for
giving testimony (regardless of the subject of the
testimony) under Art. 259 (i) of the Labor Code.
Elements of ULP
1. Existence of Er-Ee relationship between the
offender and offended party
2. Act is expressly defined in the Code as ULP
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Q: What is the condition precedent before
criminal prosecution of ULP may be made?
A: There should be a finality of judgment in a labor
case finding that the respondent indeed committed
ULP.
ULP COMMITTED BY EMPLOYERS (ULP-ER)
The following are the ULP committed by
employers:
1. Interference, restraint, or coercion
2. Yellow dog condition
3. Contracting out of services
4. Company unionism
5. Discrimination for or against union
membership
6. Discrimination because of testimony
7. Violation of duty to bargain
8. Paid negotiation
9. Gross violation of the CBA
INTERFERENCE, RESTRAINT, OR COERCION
ULP can be committed even if union is not
registered
Employer who interferes with the formation of a
labor union and retaliation against the employees’
exercise of their right to self-organization is guilty
of ULP. (Samahan ng mga Manggagawa sa
Bandolino-LMLC, et. al v. NLRC)
Test of Interference
Whether the employer has engaged in conduct
which it may reasonably be said tends to interfere
with the free exercise of employees’ rights
Direct evidence of interference is not necessary
Direct evidence is not necessary if there is a
reasonable inference that the anti-union conduct of
the employer does have an adverse effect on self-
organization and collective bargaining.
Totality of Conduct Doctrine
An employer’s remarks must be evaluated not only
on the basis of their implications, but against the
background of and in conjunction with collateral
circumstances.
Expression of opinion by the employer, though
innocent in themselves, was frequently held to be
culpable because of the circumstances under which
they were uttered.
Prohibiting organizing activities is ULP
It is unlawful to prohibit solicitation of union
membership in the company whether it is working
or non-working time.
Illegal dismissal may be considered as ULP
When there is a showing that the illegal dismissal
was dictated by anti-union motives, the same
constitutes as ULP. If not, then there is no ULP. The
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proper remedy would be an action for
reinstatement with backwages and damages.
Lockout or closure may amount to ULP
The lockout or closure must be for the purpose of
interfering with an employees’ exercise of their
right. An honest closing of one’s plant is not a
violation of the law.
YELLOW DOG DOCTRINE
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)]
CONTRACTING OUT
To contract out services or functions being
performed by union members when such will
interfere with, restrain or coerce employees in the
exercise of their right to self-organization [Art. 259
(c)].
Q: Is contracting out per se ULP?
A: NO. Contracting out, itself, is not ULP. It is the ill
intention that makes it so when it is motivated by a
desire to prevent his employees from organizing
and selecting a collective bargaining
representative, rid himself of union men, or escape
his statutory duty to bargain collectively with his
employees’ bargaining representative.
Runaway shop
Refers to business relocation animated by anti-
union animus. It is a plant removed to a new
location in order to discriminate against employees
at the old plant because of their union activities.
COMPANY UNIONISM
To initiate, dominate, assist or otherwise interfere
with the formation or administration of any labor
organization, including the giving of financial or
other support to it or its organizers or supporters.
[Art. 259 (d)]
Forms of company domination:
1. Initiation of the company union idea
2. Financial support to the union
3. Employer encouragement and assistance
4. Supervisory assistance
DISCRIMINATION FOR OR AGAINST UNION
MEMBERSHIP
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. [Art. 259 (e)]
Test of Discrimination
Whenever benefits or privileges given to one is not
given to the other under similar or identical
conditions when directed to encourage or
discourage union membership.
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DISCRIMINATION BECAUSE OF TESTIMONY
Dismissing or prejudicing an employee who is
about to give or has given testimony under this
Code. The subject matter of the testimony is
anything under the Labor Code.
ULP also applies to refusal to testify
The article also applies to refusal to testify because
it is analogous to giving of testimony. (Mabeza v.
NLRC)
VIOLATION OF DUTY TO BARGAIN
It refers to acts that violate the duty to bargain
collectively as prescribed by the Code.
Four Forms of ULP in bargaining:
1. Failure or refusal to meet and convene
2. Evading mandatory subjects of bargaining
3. Bad faith in bargaining:
Boulwarism
Boulwarism is a violation of good faith in
bargaining. It includes the failure to execute the
CBA (Bad Faith Bargaining).
4. Gross violation of the CBA
PAID NEGOTIATION
The act of employer of paying negotiation or
attorney’s fees to the union or its officers as part of
the settlement of any issue in collective bargaining
or any other dispute.
GROSS VIOLATION OF THE CBA
It is the flagrant and/or malicious refusal by a party
to comply with the economic provisions of the CBA.
NOTE: If the violation of the CBA is not gross, it is
not ULP but a mere grievance.
INDIVIDUAL BARGAINING CONSIDERED AS
UNFAIR LABOR PRACTICE
When the Er attempts to negotiate with individual
workers rather than with the certified bargaining
agent is considered as ULP (Insular Life Assurance
Co.,Ltd., Employees Assoc.-NATU v. Insular Life
Assurance Co., Ltd., G.R. No. L-25291, January 30,
1971).
ULP OF LABOR ORGANIZATIONS (ULP-LO)
Persons Criminally Liable In Case Of ULP by LO
1. Officers
2. Members of governing board
3. Representatives, agents, members of the labor
organization who actually participated,
authorized, or ratified the ULP act.
ULP Committed By Labor Organizations
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1. Restraint or coercion
2. Union-induced discrimination
3. Refusal to bargain
4. Featherbedding or Make-Work Arrangements
5. CBA deal with employer
6. Gross violation of CBA
RESTRAINT OR COERCION
Intereference by a Labor Organization is not
ULP
A labor organization can actually interfere with
employees’ right to self-organization as long as it
does not amount to restraint or coercion.
Interfering in the exercise of right to organize is
itself a function of self-organizing. (2, Azucena,
2016, p. 368)
Labor organization cannot coerce members to
participate in strike
A labor organization violates the law when it
restrains or coerces an employee in the exercise of
his right to refuse to participate in or recognize a
strike.
UNION-INDUCED DISCRIMINATION
This pertains to the attempt of the labor
organization to cause an employer to grant
advantages to:
1. Members over non-members;
2. Members in good standing over suspended or
expelled members;
3. Members of the executive board over more
senior employees; or
4. Members of one union over members of
another union.
Arbitrary use of Union Security Clause
Unions are not entitled to arbitrarily exclude
qualified applicants for membership, and a closed-
shop provision would not justify the employer in
discharging, or a union in insisting upon the
discharge of an employee whom the union thus
refuses to admit to membership, without any
reasonable ground therefor. (Salunga v. CIR)
Q: Pursuant to the union’s constitution that a
violation thereof would warrant impeachment
or recall of an officer, Marcelino was expelled
from the union. Consequently, due to a union
security clause in the CBA, Marcelino was also
terminated from employment due to his
expulsion from the union. Is the termination
valid?
A: NO. Expulsion of Marcelino is grounded on the
union’s Constitution which provides that
misappropriation of union funds and property shall
be a ground for the impeachment or recall of the
union officers. However, the provision refers to
impeachment and recall of union officers, and not
expulsion from union membership. An officer found
guilty of violating the provisions shall simply be
removed, impeached or recalled, from office, but
not expelled or stripped of union membership. It
was therefore an error on the part of PORFA and
60
UPI to terminate Marcelino's employment based on
the union's Constitution. (United Polyresins, Inc. v.
Marcelino Pinuela, G. R. No. 209555, July 31, 2017)
REFUSAL TO BARGAIN
It is the act of a union in refusing or violating its
duty to bargain collectively. A union violates its
duty to bargain collectively by entering
negotiations with a fixed purpose of not reaching an
agreement or signing a contract
NOTE: It is intended to insure that unions approach
the bargaining table with the same attitude of
willingness to agree as the law requires of
management.
FEATHERBEDDING OR MAKE-WORK
ARRANGEMENTS
Featherbedding refers to an employee practice
which creates or spreads employment by
unnecessarily maintaining or increasing the
number of employees used, or the amount of time
consumed, to work on a particular job.
CBA DEAL WITH EMPLOYER
Accepting for or accepting some “fee” from the
employer as part of CBA or dispute settlement.
Reliefs available in ULP cases
1. Cease and Desist Order
2. Affirmative Order
3. Order to Bargain; or Mandated CBA
4. Disestablishment of the Company-Dominated
Union
Cease and Desist Order
A prohibitive order requiring a person found to be
committing ULP to cease and desist from such ULP
and take affirmative action as will effectuate the
policies of the law including (but not limited to)
reinstatement with or without back pay and
including rights of employees prior to dismissal,
including seniority.
Affirmative Order
An order directing either the reinstatement of the
discharged employee without prejudice to their
rights or, if new laborers have been hired, the
dismissal of the hired laborers to make room for the
returning employee.
Order to Bargain
An order to compel the respondent to bargain with
the bargaining agent. It can also be an imposition of
a collective bargaining contract upon an employer
who refuses to bargain with the union of its
employees which is known as “mandated CBA”
Disestablishment
An order directing the employer to withdraw all
recognition from the dominated labor union and to
disestablish the same.
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ULP case is not subject to compromise
In view of the public interest involved, they are not
subject to compromise (E. G. Gochangco Workers
Union v. NLRC). However, in the case of Reformist
Union of R. B. Liner, Inc. v NLRC, the court approved
a compromise agreement finally settling an illegal
strike case. The agreement was voluntarily entered
into and represents a reasonable settlement, thus it
binds the parties.
BLUE SKY BARGAINING
It is defined as making exaggerated or
unreasonable proposals. Demands which the Er has
no capacity to give.
SURFACE BARGAINING
It is the act of “going through the motions of
negotiating” without any legal intent to reach an
agreement (Standard Chartered Bank v. Confessor,
G.R. No. 114974, June 16, 2004).
Sweetheart Contract
It is when a labor organization asks for or accepts
negotiations or attorney’s fees from Ers as part of
the settlement of any issue in CB or any other
dispute.
The resulting CBA is considered as a “sweetheart
contract” – a CBA that does not substantially
improve the employees’ wages and benefits and
whose benefits are far below than those provided
by law. It is an incomplete or inadequate CBA.
Impasse In Bargaining
1. Where the subject of a dispute is a mandatory
bargaining subject, either party may bargain to
an impasse as long as he bargains in good faith.
2. Where the subject is non-mandatory, a party
may not insist in bargaining to the point of
impasse. His instance may be construed as
evasion of duty to bargain.
Deadlock
It is synonymous with impasse or a standstill which
presupposes reasonable effort at good faith
bargaining but despite noble intentions does not
conclude an agreement between the parties.
Occurrence Of Deadlock In Collective
Bargaining
A deadlock arises when there is an impasse which
presupposes reasonable effort at good faith in
bargaining which, despite noble intentions, does
not conclude in agreement between the parties.
Remedies In Case Of Deadlock
The parties, during renegotiation, may:
1. Call upon the NCMB to intervene for the
purpose of conducting conciliation or
preventive mediation;
61
2. Refer the matter for voluntary arbitration or
compulsory arbitration;
3. Declare a strike or lockout upon compliance
with the legal requirements. (This remedy is a
remedy of last resort)
PEACEFUL CONCERTED ACTIVITIES
STRIKE
It means any temporary stoppage of work by the
concerted action of Ees as a result of an industrial
or labor dispute [IRR, Book V, Rule I, Sec. 1(uu)].
“Striking Employee” is still an employee
During a strike the Er-Er relationship is not
terminated but merely suspended as the work
stoppage is not permanent but only temporary.
Thus, a striking employee is still an employee. The
employee’s status during a strike remains, but the
effects of employment are suspended, hence a
striking employee, as a rule, is not entitled to his
wage during the strike. (2, Azucena, 2016, p. 590)
Elements of strike
1. Existence of established relationship between
the strikers and the person or persons against
whom the strike is called
2. Existence of an Er-Ee relationship
3. Existence of a labor dispute and the utilization
by labor of the weapon of concerted refusal to
work as a means of persuading, or coercing
compliance with the working men’s demands
4. Employment relation is deemed to continue
although in a state of belligerent suspension
5. Temporary work stoppage
6. Work stoppage is done through concerted
action
7. The striking group is a legitimate labor
organization; in case of a bargaining deadlock,
it must be the Ees’ sole bargaining
representative
Role of the Police
It provides that the involvement of the police
during strikes, lockouts or labor disputes in general
shall be limited to the maintenance of the peace and
order, enforcement of laws and legal orders of duly
constituted authorities and the performance of
specific functions as may be provided by law.
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EXAMPLE OF STRIKE REASON FOR ITS ILLEGALITY

1. Sit-down strike– Characterized by a temporary Amounts to a criminal act because of the Ees trespass
work stoppage of workers who seize or occupy on the premises of the Er.
property of the Er or refuse to vacate the
premises of the Er.

2. Wildcat strike – A work stoppage that violates It fails to comply with certain requirements of the law,
the labor contract and is not authorized by the to wit: notice of strike, vote and report on strike vote.
union membership.

2. Slowdown – Strike on an installment plan; an
activity by which workers, without complete
stoppage of work, retard production or their
performance of duties and functions to compel
management to grant their demands.
Ees work on their own terms; while the Ees continue
to work and remain in their positions and accept
wages paid to them, they at the same time select what
part of their allotted tasks they care to perform on
their own volition or refuse openly or secretly.

3. Sympathetic strike – Work stoppages of There is no labor dispute between the workers who
workers of one company to make common cause are joining the strikers and the latter’s Er.
with other strikers or other companies without
demands or grievances of their own against the
Er
4. Secondary strike – Work stoppages of workers There is no labor dispute involved.
of one company to exert pressure on their Er so
that the latter will in turn bring pressure upon
the Er of another company with whom another
union has a labor dispute.
5. General strike (cause oriented strike) – A type It is a political rally.
of political sympathetic strike and therefore
there is neither a bargaining deadlock nor any
ULP. e.g. Welga ng bayan.
6. Quickie strike – Brief and unannounced Failure to comply with notice requirements and etc.
temporary work stoppage.

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GR: Union officers, members or organizers cannot To withhold or to stop To march to and from
be arrested nor detained for union activities work by concerted the employer’s
without previous consultation (not approval) with action of Ees as a result premises, usually
the Secretary of Labor and Employment. of an industrial or accompanied by the
labor dispute. The display of placards and
XPN: When prior consultation not necessary work stoppage may be other signs making
1. On grounds of national security and public accompanied by known the facts
peace; or picketing by the involved in a labor
2. In case of commission of a crime striking employees dispute. It is a strike
outside of the activity separate and
Tests in determining the legality of strike company compound. different from actual
stoppage of work.
The following must concur: Focuses on stoppage of Focuses on publicizing
1. Purpose test – The strike must be due to either work the labor dispute and
bargaining deadlock and/or the ULP its incidents to inform
2. Compliance with the procedural and the public of what Is
substantive requirements of the law. (See happening in the
requisites of a valid strike) company struck
3. Means employed test – It states that a strike may against.
be legal at its inception but eventually be
declared illegal if the strike is accompanied by NOTE: A strike conducted by a union which
violence which is widespread, pervasive and acquired its legal personality after the filing of its
adopted as a matter of policy and not mere notice of strike and the conduct of the strike vote is
violence which is sporadic and which normally illegal.
occurs in a strike area.
When picket considered a strike
PICKETING
In distinguishing between a picket and a strike, the
It is the act of marching to and from the Ers totality of the circumstances obtaining in a case
premises which is usually accompanied by the should be taken into account.
display of placard and other signs, making known
the facts involved in a labor dispute, in the hope of LOCKOUT
being able to persuade peacefully other workers
not to work in the establishment, and customers It means any temporary refusal of an Er to furnish
not to do business there. work as a result of an industrial or labor dispute
[LC, Art. 212 (p)]. It is an Er’s act of excluding Ees
Requisites for lawful picketing who are union members from the plant. . (Sta. Mesa
Slipways Engineering Co. vs. CIR, 48 O.G. 3353)
1. It should be peacefully carried out;
2. There should be no act of violence, coercion or To constitute a lockout, the refusal to furnish
intimidation; work must be:
3. The ingress to (entrance) or egress from (exit) 1. Temporary; and
the company premises should not be 2. The result of a labor dispute. (Ungos, The
obstructed; Fundamentals of Labor Law Review, page 237)
4. Public thoroughfares should not be impeded.
Lockout must be for a lawful purpose and carried
Right to picket not an absolute right out through lawful means. A lockout is unlawful
where it is declared in order to defeat
While peaceful picketing is entitled to protection as organizational and bargaining rights of employees.
an exercise of free speech, the courts are not (Dingsalan vs, NLU, 98 Phil. 649)
without power to confine or localize the sphere of
communication or the demonstration to the parties Lockout consists of the following:
to the labor dispute, including those with related
interests, and to insulate establishments or persons 1. Shutdowns
with no industrial connection or having interest 2. Mass Retrenchment and dismissals initiated
totally foreign to the context of the dispute by the Er
(Liwayway Pub., Inc. v. Permanent Concrete Workers 3. Dismissals without previous written clearance
Union, G.R. No. L-25003, October 23, 1981). from the Secretary of Labor or his duly
Moving Picket authorized representative. (Section 3, P.D. No.
823, as amended by P.D. No. 849)
The right granted to striking workers is merely a 4. Er’s act of excluding Ee’s who are union
pedestrian right. It does not create the additional members. (Complex Electronics Employees
rights of squatting or assembly on the portion of Association, etc. et. al. vs. NLRC, et al., G.R. No.
Er’s land. Any such squatting or assembly would 121315, July 19, 1999)
exceed the scope of the public’s easement and
would constitute enjoinable trespass. Lockout amounting to ULP

Strike vs. Picketing A lockout, actual or threatened, as a means of

dissuading the Ees from exercising their rights is
STRIKE PICKETING clearly an ULP. However, to hold an Er guilty, the

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evidence must establish that the purpose was to
interfere with the Ees exercise of their rights.
Lockout vs Shutdown
Lockout is different from shutdown in the sense
that in a lockout the plant continues to operate,
whereas in a shutdown, the plant ceases to operate.
(Ungos, The Fundamentals of Labor Law Review,
page 237)
A shutdown is the willful act of the employer
himself following a complete lockout as contrasted
to the compulsory stoppage of operations as a
result of a strike and walkout. It can be truly said
that all shutdowns are lockouts but not all lockouts
constitute shutdowns. (Sta. Mesa Slipway
Engineering vs. CIR, 91 Phil. 764)
RIGHT TO STRIKE AND LOCKOUT
Express statutory recognition of the workers’
right to strike and the employer’s right to
lockout
The right to strike is a constitutional and legal right
of the workers in the same manner that the
employers have the inherent and statutory right to
lockout, all within the context of labor relations and
collective bargaining. It is a means of last resort and
presupposes that the duty to bargain in good faith
has been fulfilled and other voluntary modes of
dispute settlement have been tried and exhausted.
(No. 1, Guidelines Governing Labor Relations; No. 04,
Primer on Strike, Picketing and Lockout)
Right to strike or lockout not absolute
The exercise of these rights is subject to reasonable
restrictions pursuant to the police power of the
State. It has been held that the right to strike,
because of the more serious impact upon the public
interest, is more vulnerable to regulation than the
right to organize and select representatives for
purposes of CB [National Federation of Sugar
Workers (NFSW) v. Ovejera, et al. G.R. No. L-59743,
May 31, 1982].
Strike cannot be converted into a lockout
A strike cannot be converted into a pure and simple
lockout by the mere expedient of filing before the
trial court a notice of offer to return to work during
the pendency of the labor dispute between the
union and the Er (Rizal Cement Workers Union v.
CIR, G.R. No. L-18442, November 30, 1962).
Instances where a strike or lockout CANNOT be
declared
1. Violations of CBAs, except flagrant and/or
malicious refusal to comply with economic
provisions
2. Inter-union disputes
3. Intra-union disputes
4. Failure to file a notice of strike or lockout or
lack of necessary strike or lockout vote
obtained and reported to the Board.
5. After assumption of jurisdiction by the
Secretary has been declared
64
6. After certification or submission of the dispute
to compulsory or voluntary arbitration
7. There is already a pending case involving the
same grounds for the strike or lockout
8. Execution and enforcement of final orders,
decisions, resolutions or awards in no. 7
9. Labor standards cases such as wage orders
(IRR, as amended by D.O. 40-03, Book V, Rule
XXII, Sec. 5)
10. Any issue covered by a no strike commitment
in a duly executed CBA
Grounds for declaration of strike or lockout
1. Collective Bargaining Deadlock – economic
2. ULP act (includes flagrant and/or malicious
refusal to comply with the economic
provisions of the CBA) – political
NOTE: It is possible to change an economic strike
into a ULP strike (Consolidated Labor Ass’n of the
Phils. v. Marsman and Co., G.R. No. L-17038, July 31,
1964).
Conversion Doctrine
It is when a strike starts as economic and later, as it
progresses, it becomes a ULP, or vice versa.
The significance of this doctrine lies in the fact that
an economic strike or lockout is different and
distinct from ULP strike or lockout as to certain
requirements or rights of the parties. The cooling-
off period for economic strike or lockout is 30 days
while that of the ULP strike or lockout is only 15
days. The right of the employer to hire
replacements and retain them although the strikers
are reinstated depends on the nature of the strike.
(Chan, Law on Labor Relations and Termination of
Employment, Pg. 566)
Q: The previous CBA between GNC and its
bargaining agents GNCFLU and GNCNTMLU has
a "no-strike, no lock-out" clause which likewise
provides for mechanism for grievance
resolution and voluntary arbitration.
Thereafter, the presidents of both the
bargaining agents wrote the president of GNC to
inform him of the former’s intention to open the
negotiation for the renewal of the then existing
CBA which would expire after two months.
However, GNC denied arriving at an agreement
with the bargaining agents not once but twice.
This prompted them to file a notice of strike
charging GNC with bad faith bargaining and
violation of its duty to bargain. GNC filed a
Motion to Strike Out Notice of Strike. It invoked
the "no-strike, no lock-out" clause and the
grievance machinery and voluntary arbitration
provision of the parties' existing CBA. According
to it, the four grounds cited by respondents in
their notice of strike all come within the
definition of "grievance" under their CBA,
hence, not strikeable. Is the contention of GNC
valid?
A: No. It is settled that a "no strike, no lock-out"
provision in the CBA "may only be invoked by an
employer when the strike is economic in nature or
one which is conducted to force wage or other
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agreements from the employer that are not

mandated to be granted by law. It is not applicable
when the strike is grounded on unfair labor
practice. GNCFLU and GNCNTMLU cannot be
faulted into believing that GNC was bargaining in
bad faith and had no genuine intention to comply
with its duty to bargain collectively since it denied
arriving at an agreement with respondents not once
but twice. Clearly, respondents' intention was to
protest what they perceived to be acts of unfair
labor practice on the part of GNC through the
exercise of their right to strike enshrined in the
Constitution and not to circumvent the "no strike,
no lock-out" clause and the grievance machinery
and voluntary arbitration provision of the CBA.
(Guagua National Colleges v. GNC Faculty Labor
Union, G.R. No. 204693, 13 July 2016)

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Economic strike vs. ULP strike

BASIS ECONOMIC STRIKE ULP STRIKE

Voluntary strike, because
Involuntary strike, the LO is forced to go on strike because of
the employee will declare
the ULP committed against them by the Er. It is an act of self-
As to nature a strike to compel
defense since the Ees are being pushed to the wall and their
management to grant its
only remedy is to stage a strike.
demands
The CB agent of the
Who will appropriate bargaining
Either the CB agent or the LLO in behalf of its members
initiate unit can declare an
economic strike
30 days from the filing of
As to the the notice of strike before
cooling-off the intended date of actual 15 days from the filing of the notice of strike
period strike subject to the 7-day
strike ban
The cooling-off period may be dispensed with, and the union
No exception - mandatory
may take immediate action in case of dismissal from
As to the
employment of their officers duly elected in accordance with
exception to NOTE: Notice of strike and
the union’s constitution and by-laws, which may constitute
the cooling- strike vote may be
union-busting where the existence of the union is
off period dispensed with; they may
threatened. It must still observe the mandatory 7-day strike
strike immediately
ban period before it can stage a valid strike

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PROCEDURAL REQUIREMENT FOR
STRIKE/LOCKOUT
Substantive Requirements for Srike or Lockout
The law recognizes two (2) grounds for the valid
exercise of the right to strike or lockout, namely:
1. Collective Bargaining Deadlock (CBD); and/or
2. Unfair Labor Practices (ULP) - Includes flagrant
and/or malicious refusal to comply with the
economic provisions of the CBA.
Procedural Requirements for Strike or Lockout
1. Filing a Notice of Strike or Lockout
It should be field with the DOLE, specifically the
regional branch of the NCMB, copy furnished
the employer or the union, as the case may be.
Those Who May File Notice of Strike
Only a LLO can legally hold a strike. (Bukluran
ng Manggagawa sa Clothman Knitting, etct. vs.
CA, et al., G.R. No. 158158, January 17, 2005)
a. In establishments with certified
bargaining agent. - Any certified or duly
recognized bargaining representative may
file a notice or declare a strike in cases of
ULP.
b. In establishments with no certified
bargaining agent - Any LLO in the
establishment may file a notice, request
preventive mediation or declare a strike
but only on grounds of ULP.
NOTE: A union, instead of filing a notice of strike,
may request NCMB to do preventive mediation, but
the union has to be the certified or duly recognized
bargaining agent. (Insular Hotel Employees Union-
NFL vs. Waterfront Insular Hotel Davao, G.R. No.
174040-41, September 22, 2010)
2. Strike Vote or Lockout Vote
A strike must be approved by a majority vote of
the members of the union and a lockout must be
approved by a majority vote of the members of
the Board of Directors of the Corporation or
Association or of the partners in a partnership,
obtained by a secret ballot in a meeting called for
that purpose.
Effect of the 7-day waiting period if the vote
balloting is taken within the cooling-off
period
The 7-day requirement shall be counted from
the day following the expiration of the cooling-
off period (No.06 Primer on Strike, Picketing and
Lockout)
Q: Is the Strike Vote still necessary in case of
union-busting?
A: Yes. The time requirement of 15 days for the
filing of the Notice of Strike shall be dispensed with
67
but the strike vote requirement, being mandatory
in character, shall “in every case” be complied with.
3. Strike Vote or Lockout Vote Report
Submission of Strike or Lockout Vote
Report
The result of the strike or lockout voting should
be reported to the NCMB at least 7 days before
the intended strike or lockout, subject to the
cooling-off period.
A strike held within the 7-day waiting period is
plainly illegal. (Lapanday Workers’ Union, et al.
vs. NLRC and Lapanday Agricultural and
Development Corp., G.R. Nos. 95494-97,
September 7, 1995)
Effect of non-submission of strike vote to
NCMB
A strike staged without the submission of the
result of the strike-vote is illegal (Samahan ng
Manggagawa in Moldex Products, et al. vs. NLRC,
et al., G.R. No. 119467, February 1, 2000)
4. Cooling-Off Period
It is the period of time given by the NCMB to
mediate and conciliate the parties. It is the span
of time allotted by law for the parties to settle
their disputes in a peaceful manner before
staging a strike or lockout. The principles of
improved offer and reduced offer balloting
apply during the cooling-off period.
Cooling-Off Periods Provided By Law
a. In cases of CBD, the cooling-off period is
thirty (30) days;
b. In cases of ULP, the period shall be fifteen
(15) days. - In the case of union busting, as
defined in Article 278(c), the cooling-of
period need not be observed.
Start of cooling-off period
The start if the cooling-off period should be
reckoned not on the date the union or employer
prepared the notice of strike or lockout, as the
case may be, but from the time the notice of
strike or lockout is filed with the NCMB, a copy
of said notice having been served on the other
party concerned.
Purpose of the cooling-off period?
It is designed to afford the parties the
opportunity to amicably resolve the dispute
with the assistance of the NCMB
Conciliator/Mediator.
5. 7-Day Waiting Period or Strike Ban
Purpose of the 7-day waiting period
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It 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 in addition to the cooling-off period
before the actual strike.
NOTE: Failure to comply with the aforesaid
requirements makes the strike illegal.
Consequently, the officers of the union who
participated therein are deemed to have lost
their employment status. (Bukluran ng
Manggagawa sa Clothman Knitting, etc. vs. CA, et
al., G.R. No. 158158, January 17, 2005)
When Does Union Busting Exists
The codal definition has specific elements:
1. The union officers are being dismissed
2. Those officers are the ones duly elected in
accordance with the union constitution and by-
laws; and
3. The existence of the union is threatened.
Legality of no strike/lockout clause
A no strike/lockout clause is legal but it is
applicable only to economic strikes, not ULP strikes.
As a provision in the CBA, it is a valid stipulation
although the clause may be invoked by an Er only
when the strike is economic in nature or one which
is conducted to force wage or other concessions
from the Er that are not mandated to be granted by
the law itself. It would be inapplicable to prevent a
strike which is grounded on ULP (Panay Electric Co.
v. NLRC, G.R. No. 102672, October 4, 1995);
(Malayang Samahan ng mga Manggagawa sa
Greenfield v. Ramos, G.R. No. 113907, February 28,
2000).
Preventive mediation case
It involves labor disputes which are the subject of a
formal or informal request for conciliation and
mediation assistance sought by either or both
parties or upon the initiative of the NCMB [IRR,
Book V, Rule I, Sec. 1 (mm)].
NOTE: The regional branch may treat the notice as
a preventive mediation case upon agreement of the
parties.
Mediation should safeguard confidentiality.
Information discovered in mediation is
inadmissible in court. A party cannot use
information gathered in mediation against the
other party and the Mediator cannot be
subpoenaed to reveal what transpired in mediation.
(The PHILJA Judicial Journal, Vol. 4; Issue no.11,
January-March 2002, p. 8)
Legal basis for the conversion of a notice of
strike to preventive mediation
It is in pursuance of the NCMB’s duty under the
Rules Implementing the Labor Code to exert “all
efforts at mediation and conciliation to enable the
parties to settle the dispute amicably” and in line
with the state policy of favoring voluntary modes of
settling labor disputes. And a strike mounted by the
union after the NCMB dropped the notice of strike
68
from its docket of notice of strikes and during the
pendency of preventive mediation proceedings
would be illegal (San Miguel Corporation v. NLRC et
al., G.R. No. 119293, June 10, 2003).
Duty to declare that the notice of strike or
lockout has been converted into preventive
mediation case
Upon the recommendation of the conciliator or
mediator handling the labor dispute, the Director of
the Regional Branch of the NCMB which has
jurisdiction over the labor dispute has the duty to
declare and inform the parties that the issues raised
or the actual issues involved are not proper
subjects of a Notice of Strike or Lockout has been
converted into a Preventive Mediation Case
without prejudice to further conciliation or upon
the request of either or both parties.
NOTE: NCMB shall inform the concerned party in
case notice does not conform to the requirements.
Q: Was the strike held by the union legal based
on the fact that the notice of strike only
contained general allegations of ULP?
A: NO. In cases of ULP, the notice of strike shall as
far as practicable, state the acts complained of and
the efforts to resolve the dispute amicably (Tiu v.
NLRC, G.R. No. 123276, August 18, 1997).
Q: Fil Transit Employees Union filed a notice of
strike with the Bureau of Labor Relations
because of alleged ULP of the company. Because
of failure to reach an agreement the union went
on strike. Several employees were dismissed
because of the strike. The union filed another
notice of strike alleging ULP, massive dismissal
of officers and members, coercion of employees
and violation of workers’ rights to self-
organization. The DOLE after assuming
jurisdiction over the dispute, ordered all
striking employees including those who were
dismissed to return to work. The company
however countered that no strike vote had been
obtained before the strike was called and the
result of the strike vote was not reported to
DOLE. Was the strike held by the union illegal
for failure to hold a strike vote?
A: YES. There is no evidence to show that a strike
vote had in fact been taken before a strike was
called. Even if there was a strike vote held, the
strike called by the union was illegal because of
non-observance by the union of the mandatory 7-
day strike ban counted from the date the strike vote
should have been reported to the DOLE (First City
Interlink Transportation Co., Inc. v. Confessor, G.R.
No. 106316, May 5, 1997).
Enjoinment of strike
GR: No strikes arising from a labor dispute may be
enjoined.
XPNs:
1. Assumption order by SLE [LC, Art. 263(g)];
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2. Enjoining or restraining any actual or
threatened commission of any unlawful act in
any labor dispute [LC, Art. 218(e)].
Only the Strike Can Be Enjoined, Not the
Imposition of Sanctions Against the Strikers
Under Art. 268 if the LC, all that the SOLE may
enjoin is the holding of a strike or lockout but not
the right of an employer to take disciplinary action
against union officers who participated in the illegal
strike and against union members who committed
illegal acts during the strike. (Philippine Airlines, Inc.
vs. Secretary of Labor and Employment, 193 SCRA
223)
ASSUMPTION OF JURISDICTION BY THE DOLE
SECRETARY
CERTIFICATION OF THE LABOR DISPUTE TO
THE NLRC FOR COMPULSORY ARBITRATION
When DOLE Secretary may assume or certify a
labor dispute
Art. 278(g) of the Labor Code provides that when in
the opinion of the DOLE Secretary, the labor dispute
causes or will likely cause a strike or lockout in an
industry indispensable to the national interest, he
is empowered to either:
1. Assume jurisdiction over the labor dispute and
decide it himself; or
2. Certify it to the NLRC for compulsory
arbitration, in which case, it will be the NLRC
which shall hear and decide it.
The secretary may act at his own initiative or upon
petition by any of the parties. (Azucena Volume II-B,
page 637)
Actual Strike or Lockout Not a Condition for the
Exercise of the Power
Article 268(g) of the LC does not require the
existence of a strike or lockout. All that is required
is the existence of a labor dispute likely to cause a
strike or lockout.
National Interest Case
The LC vests in the DOLE Secretary the discretion to
determine what industries are indispensable to the
national interest. It was only in Department Order
No. 40-H-13 s. 2013, that certain industries were
specifically named, thus:
“Section 16. Industries Indispensable to the
National Interest – For the guidance of the workers
and employers in the filing of petition for
assumption of jurisdiction, the following
industries/services are hereby recognized as
deemed indispensable to the national interest:
1. Hospital sector;
2. Electric power industry;
3. Water supply services, to exclude small water
supply services such as bottling and refilling
stations;
4. Air traffic control; and
69
5. Such other industries as may be recommended
by the National Tripartite Industrial Peace
Council (TIPC).”
Obviously, the above enumerated industries are
NOT exclusive as other industries may be
considered indispensable to the national interest
based on the appreciation and discretion of the
DOLE Secretary or as may be recommended by
TIPC.
Extent of the power of the President or the
Secretary of Labor and Employment to issue
assumption and certification orders
The power to issue assumption and certification
orders is an extraordinary authority strictly limited
to national interest cases and granted to the
President or to the SOLE, “which can justifiably rest
on his own consideration of the exigency of the
situation in relation to the national interest.”
The SOLE is vested with the discretionary power to
decide not only the question of whether to assume
jurisdiction over a given labor dispute or certify the
same to the NLRC, but also the determination of the
industry indispensable to national interest.
The President shall not be precluded from
intervening at any time and assuming jurisdiction
over any labor dispute involving industries
indispensable to national interest in order to settle
or terminate the same.
The SOLE may 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 DOLE before whom such dispute is
pending that the termination may cause a serious
labor dispute or is an implementation of a mass lay-
off.
When a dispute is assumed by the President or
SOLE, or certified to the NLRC for compulsory
arbitration
The assumption or certification shall have the effect
of automatically enjoining the intended or
impending strike or lockout.
Extent of the powers of the President during
strikes/lockouts
1. May determine the industries, which are in his
opinion indispensable to national interest
2. May intervene at any time and assume
jurisdiction over any such labor dispute in
order to settle or terminate the same. [LC, Art.
278(g)]
NOTE: The decision of the President or SOLE is final
and executory after receipt thereof by the parties.
Issues that the SOLE may resolve when he
assumes jurisdiction over a labor dispute
1. Issues submitted to the SLE for resolution and
such issues involved in the labor dispute itself.
(St. Scholastica’s College v. Torres, G.R. No.
100158, June 2, 1992)
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2. SLE may subsume pending labor cases before
LAs which are involved in the dispute and
decide even issues falling under the exclusive
and original jurisdiction of LAs such as the
declaration of legality or illegality of strike.
(Int’l. Pharmaceuticals v. SLE, G.R. Nos. 92981-
83, January 9, 1992)
Power of SOLE is plenary and discretionary. (St.
Luke’s Medical Center v. Torres, G.R. No. 99395, June
29, 1993)
Return-to-work order
The moment the DOLE Secretary assumes
jurisdiction over a labor dispute involving national
interest or certifies it to the NLRC for compulsory
arbitration, such assumption/certification has the
effect of automatically enjoining the intended or
impending strike or, if one has already been
commenced, of automatically prohibiting its
continuation.
The mere issuance of an assumption/certification
order automatically carries with it a return-to-
work order, even if the directive to return to work
is not expressly stated therein. It is thus not
necessary for the DOLE Secretary to issue another
order directing the strikers to return to work.
A return-to-work order may be validly issued
pending determination of the legality of the
strike
Where the return-to-work order is issued pending
the determination of the legality of the strike, it is
not correct to say that it may be enforced only if the
strike is legal and may be disregarded if illegal.
Precisely, the purpose of the return to work order
is to maintain the status quo while the
determination is being made. (Sarmiento v. Tuico,
G.R. Nos. 75271-73, June 27, 1988)
Q: Where a return-to-work is issued, may the
employer be compelled to accept back to work
the strikers with pending criminal charges?
A: Yes. To exclude those with pending criminal
charges in the directive to the company to accept
back the striking workers without first determining
whether they knowingly committed illegal acts
would be tantamount to dismissal without due
process of law. (Telefunken Semiconductors
Employees Union-FFW vs. Secretary of Labor, et al.
G.R. Nos. 122743 and 127215, December 12, 1997)
Return-to-work order does not violate the
constitutional provision against involuntary
servitude
A return-to-work order is not offensive to the
constitutional provision against involuntary
servitude. It must be discharged as a duty even
against the worker’s will. The worker must return
to his job together with his co-workers so that the
operation of the company can be resumed and it can
continue serving the public and promoting its
interest. It is executory in character and should be
strictly complied with by the parties even during
the pendency of any petition questioning its validity
70
in order to maintain the status quo while the
determination is being made.
NATURE OF ASSUMPTION ORDER OR
CERTIFICATION ORDER
Police Power Measure
The power to issue assumption/certification orders
is an extraordinary authority granted to the
President and to his alter ego, the DOLE Secretary,
the exercise of which should be strictly limited to
national interest cases. It is in the nature of a police
power measure. This is done for the promotion of
the common good considering that a prolonged
strike or lockout can be inimical to the national
economy.
Nature of the power of the SOLE in assuming
jurisdiction
The SOLE acts to maintain industrial peace. Thus,
his certification for compulsory arbitration is not
intended to impede the worker’s right to strike but
to obtain a speedy settlement of the dispute.
(Philtread Workers Union v. Confesor, G.R. No.
117169, March 12, 1997)
The provision under the LC does not interfere with
the workers right to strike but merely regulates it,
when in the exercise of such right national interest
will be affected.
NOTE: The underlying principle embodied in Art.
278(g), LC on the settlement of labor disputes is
that assumption and certification orders are
executory in character and are strictly complied
with by the parties even during the pendency of any
petition questioning their validity. This
extraordinary authority given to the Secretary of
Labor is aimed at arriving at a peaceful and speedy
solution to labor disputes, without jeopardizing
national interests.
EFFECT OF DEFIANCE OF ASSUMPTION OR
CERTIFICATION ORDERS
Effect of defiance to the return to work order
1. Effect on strikers in case of strike
In case of non-compliance by the strikers with
return-to-work order issued in connection with the
certification or assumption of jurisdiction by the
SOLE, they may be subjected to immediate
disciplinary action, including dismissal or loss of
employment status and even to criminal
prosectution. (Article 278[g], Labor Code)
2. Effect on employers in case of lockout
In case of non-compliance by the employer with the
return-to-work order issued in connection with the
certification or assumption of jurisdiction by the
SOLE, he may be held liable to pay backwages,
damages and other affirmative reliefs, even
criminal prosecution against him. (Article 278[g],
Labor Code)
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Effect of a defiance of assumption or
certification orders of the SOLE
The defiance by the union, its officers and members
of the SOLE’s assumption of jurisdiction or
certification order constitutes a valid ground for
dismissal [LC, Art. 278(g)].
The moment a worker defies an assumption or
certification order (which in itself is also a return-
to-work order), he is deemed to have abandoned
his employment. It is already in itself knowingly
participating in an illegal act, hence, he could be
validly replaced. (St. Scholastica’s College v. Torres,
G.R. No. 100158, June 2, 1992)
NOTE: The SOLE may cite the defiant party in
contempt pursuant to the power vested in him
under the provisions of the LC.
ILLEGAL STRIKE
A strike is illegal if declared and staged:
1. Contrary to specific prohibition of law, such as
strike by Ees performing governmental
functions.
2. In violation of a specific requirement of law. If
any of the requirements for a valid strike or
lockout is not complied with.
3. For an unlawful purpose, such as inducing the
Er to commit ULP against non-union Ees,
compelling the dismissal of an employee,
forcing recognition of the union, or for trivial
purposes or circumventing contracts and
judicial orders.
4. Through unlawful means in the pursuit of its
objective, such as widespread terrorism of non-
strikers;
5. In violation of an existing injunction or
temporary restraining order;
6. Contrary to an existing agreement, such as a
no-strike clause or conclusive arbitration
clause
7. Based on non-strikeable or invalid grounds
such as: inter-union/intra-union disputes,
simple violation of CBA (in contrast to gross
violation thereof which is deemed ULP),
violation of labor standards, legislated wage
orders (wage distortion).
8. Without first having bargained collectively
9. Without submitting the issues to the grievance
machinery or voluntary arbitration or failing to
exhaust the steps provided therein
10. While conciliation and mediation proceeding is
on-going at NCMB
11. Based on issues already brought to voluntary
or compulsory arbitration
12. During the pendency of a case involving the
same ground/s cited in the notice of strike
13. In defiance of an assumption or certification or
return-to-work order.
14. After the conversion of the notice of strike into
a preventive mediation case.
15. By a minority union.
16. By an illegitimate union.
17. By dismissed employees.
18. In violation of the company code of conduct
which prohibits “inciting or participating in
riots, disorders, alleged strikes, or concerted
71
actions detrimental to the compay’s interest,”
the penalty for which is dismissal.
19. As protest rallies in front of government offices
such as in the following cases:
Toyota Motor Phils. Corp. Workers Association vs.
NLRC, G.R. Nos. 158786 & 158789, October 19, 2007
– the SC ruled that protest rallies staged by the Ees
from February 21 to 23, 2001 in front of the offices
of the BLR and the DOLE Secretary constitute illegal
strike and not legitimate exercise of their right to
peaceably assemble and petition the government
for redress of grievances. It was illegal for having
been undertaken without satisfying the mandatory
pre-requisites for a valid strike under Art. 263 (now
Art. 278) of the LC.
The ruling in Toyota was cited in Solidbank
Corporation vs. Gamier, G.R. No. 159460, November
15, 2010 as basis in declaring the protest action of
the Ees of Solidbank which staged in front of the
Office of the DOLE Secretary in Intramuros, Manila,
as constitutive of illegal strike since it paralyzed the
operations of the bank. The protest action in this
case was conducted because of the CBA deadlock.
20. As welga ng bayan which is in the nature of a
general strike as well as an extended sympathy
strike.
Good Faith Strike is no longer a valid defense
Strike declared in good faith – A strike may be
considered legal when the union believed that the
respondent company committed unfair labor acts
and the circumstances warranted such belief in
good faith although subsequently such allegation of
unfair labor practices are found out as not true.
(PICEWO-FFW v. People’s Industrial and Commercial
Corp., 112 SCRA 440)
However, with the enactment of R.A. 6715 which
took effect on March 21, 1989, the rule now is that
such requirements as the filing of a notice of strike,
strike vote, and notice given to the DOLE are
mandatory in nature.
Thus, 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. Claim of
good faith is not a valid excuse (defense) to
dispense with the procedural steps for a lawful
strike. (Grand Boulevard Hotel v. Dacanay, G.R. No.
153665, 18 July 2003; Poquiz, Vol. II)
It is 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. (National Union of
Workers in Hotels, Restaurants and Allied Industries
vs. NLRC, et al., G.R.No. 122561, March 6, 1998)
Employees who staged an illegal strike are not
entitled to backwages
Backwages are not granted to Ees participating in
an illegal strike simply accords with the reality that
they do not render work for the Er during the
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period of the illegal strike under the principle of a
fair day’s wage for a fair day’s labor.
If there is no work performed by the employee
there can be no wage or pay unless, of course, the
laborer was able, willing and ready to work but was
illegally locked out, suspended or dismissed or
otherwise illegally prevented from working.
However, for this exception to apply, it is required
that the strike be legal. (Danilo Escario v. NLRC, G.R.
No. 160302, September 27, 2010)
LIABILITY OF UNION OFFICERS vs. LIABILITY
OF ORDINARY WORKERS
Participation in lawful strike
An employee who participates in a lawful strike is
NOT deemed to have abandoned his employment.
Such participation should not constitute sufficient
ground for the termination of his employment even
if a replacement has already been hired by the Er
during the lawful strike.
Participation in illegal strike
1. Distinction in the liability between union
officers and ordinary union members.
a. Union officers – the mere finding or
declaration of illegality of the strike will
result in the termination of all union
officers who knowingly participated in the
illegal strike. Unlike ordinary members, it
is not required, for purposes of
termination, that the officers should
commit an illegal act during the strike.
However, absent any showing that the Ees
are union officers, they cannot be
dismissed solely on the illegality of the
strike.
To illustrate how the “knowing
participation” of union officers may be
ascertained, the following were taken into
account in Abaria vs. NLRC, G.R. No. 154113,
December 7, 2011:
1. Their persistence in holding picketing
activities despite the declaration by the
NCMB that their union was not duly
registered as a legitimate labor
organization and notwithstanding the
letter from the federation’s legal
counsel informing them that their acts
constituted disloyalty to the national
federation; and
2. Their filing of notice of strike and
conducting a strike vote despite the fact
that their union has no legal personality
to negotiate with their Er for collective
bargaining purposes
b. Ordinary union members – the mere
finding or declaration of illegality of a
strike will not result in termination of
ordinary union members. For an ordinary
union member to suffer termination, it
must be shown by clear evidence that he
has committed illegal acts during the
strike.
72
Reason for the distinction – union officers have
the duty to guide their members to respect the law.
If instead of doing so, the officers urged the
members to violate the law, their dismissal from the
service is just a penalty for their unlawful act. Their
responsibility as main players in an illegal strike is
greater than that of an ordinary union member’s
and, therefore, limiting the penalty of dismissal
only to the former for their participation in an
illegal strike is in order.
Union’s Liability for damages due to Illegal
Strike
The local union and not the mother federation is
liable for damages resulting from an illegal strike.
The reason is because the mother federation is a
mere agent of the local union. (Filipino Pipe vs.
NLRC, 318 SCRA 68)
Participation in the commission of illegal acts
during a strike
1. The legality or illegality of strike is immaterial
as far as liability for commission of illegal acts
during the strike is concerned. As long as the
union officer or member commits an illegal act
in the course of the strike, be it legal or illegal,
his employment can be validly terminated.
Where the strikers were found to have
prevented the free entry into and exit of
vehicles from the employer’s compound, their
dismissal from employment was declared legal.
A prior petition to declare the strike illegal is
not necessary. Article 264 allows an employer
to terminate employees that committed illegal
acts in the course of a strike. (Jackbilt Industries,
Inc. vs. Jackbilt Employees’ Workers Union-
NAFLU-KMU, G.R. No. 171618-19, March 13,
2009)
2. The term “illegal acts” under Art. 279(a) may
encompass a number of acts that violate
existing labor or criminal laws, such as:
a. “Any act of violence, coercion or
intimidation or obstruct the free ingress to
or egress from the Er’s premises for lawful
purposes, or obstruct public
thoroughfares” [LC, Art. 279€]
b. Commission of crimes and other unlawful
acts in carrying out the strike.
c. Violation of any order, prohibition, or
injunction issued by the DOLE Secretary or
NLRC in connection with the assumption of
jurisdiction or certification order under
Art. 278(g) of the LC.
This enumeration is not exclusive as jurisprudence
abounds where the term “illegal acts” has been
interpreted and construed to cover other breaches
of existing laws.
Liability for illegal acts should be determined on an
individual basis. For this purpose, the individual
identity of the union members who participated in
the commission of illegal acts may be proved
through affidavits and photographs. Simply
referring to them as “strikers,” or “complainants in
this cases” is not enough to justify their dismissal.
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3. Some principles on commission of illegal acts in
the course of the strike:
a. Only members who are identified as having
participated in the commission of illegal
acts are liable. Those who did not
participate should not be blamed therefor.
b. To effectively hold ordinary union
members liable, those who participated in
the commissions of illegal acts must not
only be identified but the specific illegal
acts they each committed should be
described with particularity.
c. If violence was committed by both Er and
Ees, the same cannot be cited as a ground
to declare the strike illegal.
1. Union officers who knowingly participate in the
illegal strike
2. Any striker or union who knowingly
participates in the commission of illegal acts
during the strike
NOTE: Those union members who have joined an
illegal strike but have not committed any illegal act
shall be reinstated but without backwages.
The responsibility for the illegal acts committed
during the strike must be on an individual and not
on a collective basis. (First City Interlink
Transportation Co., Inc. v. Confesor, G.R. No. 106316,
May 5, 1997)

Q: Can the SOLE restrain the employer from Rule on strikes in hospitals
imposing sanctions against the union officers
who knowingly participated in the illegal 1. It shall be the duty of the striking Ees or
strike? locking-out Er to provide and maintain an
effective skeletal workforce of medical and
A: NO. If the strike is declared illegal, the SOLE health personnel for the duration of the strike
cannot restrain or enjoin the employer from or lockout.
imposing the appropriate sanctions against the 2. SOLE may immediately assume jurisdiction
union officers who knowingly participated in the within 24 hours from knowledge of the
illegal strike and against any striking employee who occurrence of such strike or lockout certify it to
committed illegal acts during the strike. Since the the NLRC for compulsory arbitration.
strike is illegal, the employer has the right to take
disciplinary action against the union officers who Employees who abandoned a legal strike but
participated in it and against any member who were refused reinstatement can be awarded
committed illegal acts during the strike. (PAL vs. backwages
SOLE, 193 SCRA 223)
Provided the following requisites are present:
Basis Union Ordinary worker
Officer 1. The strike was legal
May be Cannot be 2. There was an unconditional offer to return to
declared to terminated work as when the strikers manifested their
have lost his willingness to abide by the CIR back-to-work
employment NOTE: The LC order and even sought the aid of competent
status protects ordinary, authorities to effect their return
Knowingly 3. The strikers were refused reinstatement such
rank-and-file union
participating as when they have not been re-admitted to
members who
in an illegal their former position. (Philippine Marine
participated in such
strike Officers' Guild v. Compañia Maritima et al., G.R.
a strike from losing
their jobs provided Nos. L-20662 and L-20662, March 27, 1971)
that they did not
commit illegal acts Separation pay in lieu of reinstatement in strike
during the strike. cases
Knowingly May be May be terminated In strike cases, the award of separation pay in lieu
participating terminated of reinstatement is proper only when the strikers
in the did not participate in the commission of illegal acts
commission in the course thereof.
of illegal acts
during strike NOTE: Entitlement of strikers to their
(Samahang Manggagawa Sa Sulpicio Lines, Inc.– backwages or strike duration pay
Naflu et al. v. Sulpicio Lines, Inc., G.R. No. 140992,
March 25, 2004) GR: Strikers are not entitled to their backwages or
strike duration pay even if such strike was legal.
Rule on reinstatement of striking workers
XPN:
Striking Ees are entitled to reinstatement, 1. Where the strikers voluntarily and
regardless of whether or not the strike was the unconditionally offered to return to work, but
consequence of the Er’s ULP because while out on the Er refused to accept the offer – Ers are
strike, the strikers are not considered to have entitled to backwages from the date their offer
abandoned their employment, but rather have only was made
ceased from their labor; the declaration of a strike 2. When there is a return-to-work order and the
is not a renunciation of employment relation. Ees are discriminated against other Ees,
workers are entitled to backwages from the
Persons not entitled to reinstatement date of discrimination

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3. In case of a ULP strike, in the discretion of the
authority deciding the case
4. When the Ees were illegally locked out and thus
compel them to stage a strike.
If the strike is illegal, no backwages should be paid.
Thus, in Arellano University Employees and Workers
Union vs. CA, G.R. No. 139940, September 19, 2006,
where the strike was declared illegal, petitioner
union members who were found not to have
participated in the commission of illegal acts during
the strike were ordered reinstated to their former
positions but without backwages. If reinstatement
is no longer possible, they should receive
separation pay of 1 month for every year of service
in accordance with existing jurisprudence. With
respect to the union officers, their mere
participation in the illegal strike warrants their
dismissal.
LIABILITY OF EMPLOYER
Liability for reinstatement of strikers
1. Reinstate (without backwages) ordinary rank-
and-file union members who did not
participate in the commission of illegal acts
during the conduct of the illegal strike may be
ordered
2. Terminate strikers who committed illegal acts
during and in the course of a strike. They are
not entitled to be reinstated. Additionally, they
may be held criminally liable therefor.
3. Forefeit reinstatement of strikers who failed to
report for work without proper justification
and despite the order reinstating them to their
job.
4. Pay backwages, reckoned from the labor
Arbiter’s issuance of the reinstatement order
up to its reversal by the NLRC, if Er fails to
reinstate strikers who were ordered reinstated
by the Labor Arbiter.
Mere participation of an Ee in a lawful strike
shall not constitute sufficient ground for
termination of his employment
If by reason of the prolonged strike, the company
was compelled to hire replacements this would not
constitute as sufficient reason for it not to re-admit
the strikers. Under Art. 279(a) of the LC, mere
participation of an Ee in a lawful strike shall not
constitute sufficient ground for termination of his
employment, even if a replacement had been hired
by the Er during such lawful strike. A contrary rule
would enable the Er to dismiss an Ee by the simple
expedient of hiring a replacement.
The illegal acts of a re-admitted striker is
deemed to have been condoned
If an employer knowingly re-admits to work a
striker who committed illegal acts during a strike, it
cannot later on seek the dismissal of the employee
by reason of such acts.
In Pari Delicto
If the employer committed illegal lockout and the
employees staged an illegal strike, they are both at
74
fault. The court will restore their respective
positions before the strike. The dismissed strikers
will be ordered reinstated without backwages.
(Azucena Volume II-B, page 725)
Discriminatory Reinstatement
The act of the employer in reinstating the strikers
with less prominent union activities while denying
reinstatement tot the strikers who were more
militant, is discrimination. (The Insular Life
Assurance Co., Ltd. Employees Association - NATU vs.
The Insular Life Assurance Co., Ltd., 37 SCRA 244)
WAIVER OF ILLEGALITY OF STRIKE
Voluntary reinstatement constitutes a waiver of
the illegality of the strike
The act of the Er in inviting the workers to return to
their posts without making any reference to the
pending case involving the issue of the illegality of
the strike or imposing any condition or alteration of
the terms of their employment was deemed a
waiver of its right to consider the strikers as
wrongdoers. More so in this case when such
invitation was accepted by the strikers. By said act,
the parties may be said to have both abandoned
their original positions and come to a virtual
compromise to resume unconditionally their
former relations. (Citizens’ Labor Union vs. Standard
Vacuum Oil Co., G.R. No.L-7478, May 6, 1955)
Effect of compliance with the return-to-work
order to the legality of strike
GR: A return-to-work order does not have the effect
of rendering the issue of the legality of the strike as
moot and academic. (Insurefco Paper Pulp and
Project Workers Union v. Insular Sugar Refining
Corp., 95 Phil. 761)
XPN: Er may be considered to have waived its right
to proceed against the striking Es for alleged
commission of illegal acts during the strike when,
during a conference before the Chairman of the
NLRC, it agreed to reinstate them and comply with
the return-to-work order issued by the SOLE.
(TASLI-ALU v. Court of Appeals, G.R. No. 145428, July
7, 2004)
INJUNCTION
It is an order or a writ that commands a person to
do or not to do a particular act. It may be a positive
(mandatory) or a negative (prohibitory) command.
Injunction in picketing, strike or lockout cases
GR: Prohibition on injunction against the
conduct of strikes and lockouts – Strikes and
lockouts that are validly declared enjoy the
protection of the law and cannot be enjoined unless
illegal acts are committed or threatened to be
committed in the course thereof.
A strike cannot be enjoined even if it may appear to
be illegal because strike is a weapon that the law
grants the employees for their protection and
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advancement of their interest. (Caltex vs. Lucero, 4
SCRA 1196)
XPNs: In some cases, injunctions issued to enjoin
the conduct of the strike itself and not only the
commission of illegal acts in the course thereof,
were held to be valid.
1. Injunction may be issued not only against the
commission of illegal acts in the course of the
strike but against the strike itself because the
notice of strike filed by the union has been
converted into a preventive mediation case.
Having been so converted, a strike can no
longer be staged based on said notice. Upon
such conversion, the legal effect is that there is
no more notice of strike to speak of. (San Miguel
Corporation vs. NLRC, G.R. No. 119293, June 10,
2003)
2. NLRC committed grave abuse of discretion
when it denied the petition for injunction to
restrain the union from declaring a strike based
on non-strikeable grounds. (San Miguel
Corporation vs. NLRC, G.R. No. 99266, March 2,
1999)
3. If declared against an industry indispensable to
national interest.
4. If staged by employees who are not accorded
the right to strike.
Regular courts are prohibited from issuing
injunction against strikes or lockouts
The cases cited above involve the issuance of
restraining order or injunction by the NLRC
pursuant to the exercise of its injunctive power. In
contrast, regular courts are absolutely prohibited
to grant any injunctive relief in cases of strikes or
lockouts.
Injunction in picketing cases
GR: Injunction cannot be issued against the conduct
of picketing by the workers. Under our
constitutional set up, picketing is considered part of
the freedom of speech duly guaranteed by the
Constitution.
XPNs (Picketing may be enjoined by the NLRC):
1. When carried out through illegal means;
2. Involves the use of violence and other illegal
acts;
3. Affects the rights of third parties or innocent
bystanders and injunction becomes necessary
to protect such rights.
REQUISITES FOR LABOR INJUNCTIONS
Injunction in labor disputes
GR: No temporary or permanent injunction or
restraining order in any case involving or growing
out of labor disputes shall be issued by any court
(LC, Art. 266).
XPNs:
1. Injunction power of the NLRC (LC, Art. 225)
2. Prohibited activities during a strike or lockout
(LC, Art. 279)
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3. Assumption or certification power of the SOLE
in national interest cases [LC, Art. 278(g)]
Requisites in issuing an injunction in labor
cases
1. There is an actual or threatened commission of
any or all prohibited or unlawful acts in any
labor dispute
2. There is a need to enjoin or restrain such acts
or to require the performance of a particular
act
3. If not restrained or performed forthwith, may
cause grave or irreparable damage to any party
or render ineffectual any decision in favor of
such party. [LC, Art. 225(e)]
Provided, that no temporary or permanent
injunction in any case involving or growing out of a
labor dispute as defined in this Code shall be issued
except after hearing the testimony of witnesses,
with opportunity for cross-examination, in support
of the allegations of a complaint made under oath,
and testimony in opposition thereto, if offered, and
only after a finding of fact by the Commission, to the
effect:
1. That prohibited or unlawful acts have been
threatened and will be committed and will be
continued unless restrained, but no injunction
or temporary restraining order shall be issued
on account of any threat, prohibited or
unlawful act, except against the person or
persons, association or organization making
the threat or committing the prohibited or
unlawful act or actually authorizing or ratifying
the same after actual knowledge thereof;
2. That substantial and irreparable injury to
complainant’s property will follow;
3. That as to each item of relief to be granted,
greater injury will be inflicted upon
complainant by the denial of relief than will be
inflicted upon defendants by the granting of
relief;
4. That complainant has no adequate remedy at
law; and
5. That the public officers charged with the duty
to protect complainant’s property are unable
or unwilling to furnish adequate protection.
NOTE: "Labor dispute" includes any controversy or
matters concerning terms or 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 the disputants
stand in the proximate relation of Er and Ee. (LC,
Art. 219)
INNOCENT BYSTANDER RULE
Innocent bystander
A third party in a picketing who has no existing
connection or interest with the picketing union.
(MSF Tire & Rubber v. CA, G.R. No. 128632, August 5,
1999)
Required proof to be established by an innocent
bystander before a court enjoins a labor strike
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The innocent by stander must show:
1. Compliance with the grounds specified in Rule
58 of the Rules of Court, and
2. That it is entirely different from, without any
connection whatsoever to, either party to the
dispute and, therefore, its interests are totally
foreign to the context thereof. (MSF Tire &
Rubber v. CA, G.R. No. 128632, August 5, 1999)
When injunction on picketing is allowed
through the regular courts and not through the
NLRC
In situations where the picket affects not only the
Er but also the business operations of other
establishments owned by third parties, an
injunction may be secured by the latter from the
regular courts to enjoin the picket under the
“Innocent Bystander Rule.” Under this rule, the
third party Ers or “innocent bystanders” who have
no ER-Ee relationship with the picketing strikers,
may apply for injunction with the regular courts
(not with the NLRC) to enjoin the conduct of the
picket.
Because of the absence of such Er-Ee relationship,
the NLRC cannot entertain such application for
injunction from “innocent bystanders.” Only the Er
of the picketers can apply for injunctive relief from
the NLRC.
LABOR DISPUTES
A labor dispute includes any controversy or matter
concerning:
1. Terms and conditions of employment, or
2. The association or representation of persons in
negotiating, fixing, maintaining, changing or
arranging the terms and conditions of
employment
3. Regardless of whether the disputants stand in
the proximate relation of Er and Ee. [LC, Art.
219(l)]
Tests on whether a controversy is a labor
dispute
1. As to nature – It depends on whether the
dispute arises from Er-Ee relationship,
although disputants need not be proximately
Er or Ee of another.
2. As to subject matter – The test depends on
whether it concerns terms or conditions of
employment or association or representation
of persons in negotiating, fixing, maintaining or
changing terms or conditions of employment.
Kinds of labor disputes
1. Labor standard disputes
a. Compensation
e.g. Underpayment of minimum wage;
stringent output quota; illegal pay
deductions
b. Benefits
e.g. Non-payment of holiday pay, OT pay or
other benefits
c. Working Conditions
76
e.g. Unrectified work hazards
2. Labor relations disputes
a. Organizational right disputes/ Unfair Labor
Practice (ULP) – e.g. Coercion, restraint or
interference in unionization efforts;
reprisal or discrimination due to union
activities; company unionism; ULP, strike
or lockout; union members’ complaint
against union officers
b. Representation disputes – e.g. Uncertainty
as to which is the majority union;
determination of appropriate CB unit;
contests for recognition by different sets of
officers in the same union
c. Bargaining disputes
e.g. Refusal to bargain; bargaining in bad
faith; bargaining deadlock; economic strike
or lockout
d. Contract administration or personnel policy
disputes
e.g. Non-compliance with CBA provision
(ULP if gross non-compliance with economic
provisions); disregard of grievance
machinery; non observance of
unwarranted use of union security clause;
illegal or unreasonable personnel
management policies; violation of no-
strike/no-lockout agreement
e. Employment tenure disputes
e.g. Non-regularization of Ees; non-
absorption of labor-only contracting staff;
illegal termination; non-issuance of
employment contract
Parties to a labor dispute
1. Primary parties are the Er, Ees and the union.
2. Secondary parties are the voluntary arbitrator,
agencies of DOLE, NLRC, SLE and the Office of
the President.
Inter-union dispute
Any conflict between and among legitimate labor
unions involving representation questions for the
purposes of CB or to any other conflict or dispute
between legitimate labor unions.
Intra-union dispute
Any conflict between and among union members,
grievances arising from any violation of the rights
and conditions of membership, violation of or
disagreement over any provision of the union’s
constitution and by-laws, or disputes from
chartering or affiliation of union.
Original Jurisdiction over Intra-Union or Inter-
Union Disputes
1. DOLE Regional Office – If the dispute involves
independent unions, local chapter, or workers’
association.
2. Bureau of Labor Relations (BLR) – If the dispute
involves trade union centers, federations,
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national unions, or workers association
operating in more than one region.
Effect of Intra-Union or Inter-Union Disputes
1. On the Rights and Obligations of the Parties
– The rights, relationships and obligations of the
parties-litigants against each other prior to the
filing of the action subsists until the dispute is
decided with finality.
In any stage of any of the settlement processes, the
labor dispute may be resolved by the parties
through a compromise agreement, provided that
the agreement is freely entered into and is not
contrary to law, moral, or public policy.
A compromise agreement is also subject to
approval of the authority before whom the case is
pending. Even a labor standards case can be settled
through a compromise. (Art. 233, Labor Code).

2. On a Petition for Certification Election – The JURISDICTION AND REMEDIES

pendency of an intra-union or inter-union
dispute or other related labor relations dispute
is not a prejudicial question to a petition for
certification election. Therefore, it is not a
ground for suspension or dismissal of the
petition for certification election.
Internal union dispute
It includes all disputes or grievances arising from
any violation of or disagreement over any provision
of the constitution and by-laws of a union, including
any violation of the rights and conditions of union
membership provided for in this LC [LC, Art. 219,
(q)].
Rights disputes
LABOR ARBITER
Jurisdiction of LA v. Jurisdiction of NLRC
1. The NLRC has exclusive appellate jurisdiction
on all cases decided by the LA.
2. The NLRC does not have original jurisdiction on
the cases over which the LA have original and
exclusive jurisdiction.
3. The NLRC cannot have appellate jurisdiction if
a claim does not fall within the exclusive
original jurisdiction of the LA.
Jurisdiction of LA v. Jurisdiction Regional
Director

They are claims for violations of a specific right LABOR ARBITER REGIONAL
arising from a contract, e.g. CBA or company DIRECTOR
policies. Original and exclusive Adjudication of Ee’s
jurisdiction over the ff: claims for wages and
Interest disputes a. ULP benefits
b. Termination
They involve questions on “what should be disputes
included in the CBA.” Strictly speaking, the parties c. Wages
may choose a voluntary arbitrator to decide on the d. Rates of pay
terms and conditions of employment, but this is e. Hours of work
impracticable because it will be a value judgment of f. Other terms of
the arbitrators and not of the parties. employment,
claims for damages
Contract–negotiation disputes arising from Er-Ee
relationship,
These are disputes as to the terms of the CBA. legality of strikes
and lockouts, and
Contract–interpretation disputes g. All other claims
arising from Er-Ee
These are disputes arising under an existing CBA, relationship
involving such matters as the interpretation and involving an
application of the contract, or alleged violation of its amount exceeding
provisions. Php 5,000.00
All other claims arising Limited to monetary
Instances when a person or entity is considered from Er-Ee relations claims
as participating or interested in a labor dispute LA decides case within Initiated by sworn
30 calendar days after complaints filed by any
1. If relief is sought against him or it, and submission of the case interested party
2. He or it is engaged in the same industry, trade, by the parties for
craft, or occupation in which such dispute decision
occurs, or All other claims arising Jurisdictional
3. Has a direct or indirect interest therein, or from Er-Ee relations requirements:
4. Is a member, officer, or agent of any association including those of a. Complaint arises
composed in whole or in part of Ees or Ers persons in domestic or from Er-Ee
engaged in such industry, trade, craft, or household service, relationship
occupation. involving an amount b. Claimant is an Ee
exceeding P5,000, or person
Compromise Agreement whether or not employed in
accompanied with a domestic or

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claim for household service
reinstatement or a HH
c. Complaint does
NOT include a
claim for
reinstatement
d. Aggregate money
claim of EACH
claimant does
NOT exceed
P5,000
Appealable to NLRC Appealable to NLRC
While a formal trial or hearing is discretionary on
the part of the Labor Arbiter, when there are factual
issues that require a formal presentation of
evidence in a hearing, the Labor Arbiter cannot
simply rely on the position papers, more so, on
mere unsubstantiated claims of parties. (St. Martin
Funeral Homes V. National Labor Relations
Commission, And Bienvenido Aricayos
G.R. No. 142351, November 22, 2006, Velasco, Jr. J.)
Q: Amecos Innovations, Inc. (Amecos) was
complained by the Social Security System (SSS)
for alleged delinquency in the remittance of SSS
contributions. Amecos attributed its failure to
remit the SSS contributions to Eliza R. Lopez
(Lopez) claiming that it hired Lopez but she
refused to provide Amecos with her SSS
Number. Hence, Amecos no longer enrolled
Lopez with the SSS and did not deduct her
corresponding contributions up to the time of
her termination. The complaint was withdrawn
upon settlement of the obligation by Amecos.
Lopez did not heed the demands of Amecos,
thus, the latter filed a complaint for sum of
money and damages against Lopez before the
Regional Trial Court (RTC). Amecos claimed
that because of Lopez’s misrepresentation, they
suffered actual damages by way of settlement
and payment of its obligations with the SSS.
Amecos’ contention is that the employer-
employee relationship between Amecos and
Lopez is merely incidental, and does not
necessarily place their dispute within the
exclusive jurisdiction of the labor tribunals but
the true source of Lopez’s obligation is derived
from Articles 19, 22, and 2154 of the Civil Code.
Do the regular civil court have the jurisdiction
over claim(s) for reimbursement arising from
employer-employee relation?
A: No. SSS contributions and recovery of damages
arising from employee- employer relationship is
under the jurisdiction of the Labor Arbiters. This
Court holds that as between the parties, Article
217(a)(4) of the Labor Code is applicable. Said
provision bestows upon the Labor Arbiter original
and exclusive jurisdiction over claims for damages
arising from employer-employee relations. The
observation that the matter of SSS contributions
necessarily flowed from the employer-employee
relationship between the parties – shared by the
lower courts and the Court of Appeals (CA) – is
correct; thus, Amecos’ claims should have been
referred to the labor tribunals. In this connection, it
is noteworthy to state that “the Labor Arbiter has
jurisdiction to award not only the reliefs provided
78
by labor laws, but also damages governed by the
Civil Code.”
Q: Renato Real (Real) was the Manager of
respondent corporation Sangu Philippines, Inc.,
a corporation engaged in the business of
providing manpower for general services. In
2001, Real, together with 29 others, filed their
respective Complaints for illegal dismissal
against the latter and respondent Kiichi Abe,
the corporations Vice-President and General
Manager. Real complained that he was neither
notified of the Board Meeting during which said
board resolution was passed nor formally
charged with any infraction. Respondents
refuted Real’s claim by alleging that he
committed gross acts of misconduct
detrimental to the company since 2000 and
because of all these, the Board of Directors
adopted Board Resolution No. 2001-03
removing petitioner as Manager. Petitioner was
thereafter informed of his removal through a
letter which he refused to receive. Real then
filed for illegal dismissal to the Labor Arbiter. Is
Real’s complaint for illegal dismissal an intra-
corporate and thus beyond the jurisdiction of
the Labor Arbiter?
A: NO. Real’s complaint for illegal dismissal was not
an intra-corporate and thus within the jurisdiction
of the Labor Arbiter. The Court combined two tests
and declared that jurisdiction should be
determined by considering not only the status or
relationship of the parties, but also the nature of the
question under controversy. In this case, there is no
intra-corporate relationship between the parties.
The inconsistencies in the respondents’ allegations
as to how Real was placed in the position of
Manager, coupled by the fact that they failed to
produce any documentary evidence to prove that
petitioner was appointed thereto by action or with
approval of the board, only leads this Court to
believe otherwise. Having said this, there is no
intra-corporate relationship between the parties
insofar as Real’s complaint for illegal dismissal is
concerned and that same does not satisfy the
relationship test (Real v. Sangu Philippines, Inc.,
G.R. No. 189366, December 8, 2010).
Q: Allan Mendoza was a member of MWEU, a
registered labor organization. Due to
petitioners continued failure to pay union dues
he was meted the penalty of expulsion per
"unanimous approval” the members of the
Executive Board.his pleas to an appeal was
unheeded by the General Membership
Assembly were unheeded. During the Freedom
period menoza joined another union and
became the President thereof, when other
members of the MWEU was inclined to join the
new union the irector of MWEU threatened
them that they would not get benefits from the
CBA only those who are members of MWEU
Thus the petitioner filed a complaint against
respondent for unfair labor practices, damages,
and attorney’s fees before the NLRC. However
the LA, NLRC and the CA dismissed the case and
rule that the petitioners’ causes of action
against MWEU are inter/intra-union dispute
was cognizable by the BLR.
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A: An intra-union dispute refers to any conflict
between and among union members, including
grievances arising from any violation of the rights
and conditions of membership, violation of or
disagreement over any provision of the union’s
constitution and by-laws, or disputes arising from
chartering or disaffiliation of the union. Petitioner’s
charge of unfair labor practices falls within the
original and exclusive jurisdiction of the Labor
Arbiters, pursuant to Article 217 of the Labor Code.
NATIONAL LABOR RELATIONS COMMISSION
It is an administrative body with quasi-judicial
functions and the principal government agency that
hears and decides labor-management disputes; it is
attached to the DOLE solely for program and policy
coordination.
EXCLUSIVE ORIGINAL JURISDICTION
a. Certified labor disputes causing or likely to
cause a strike or lockout in an industry
indispensable to national interest, certified
to it by the SLE or the President for
compulsory arbitration
b. Injunction in ordinary labor disputes to
enjoin or restrain any actual or threatened
commission of any or all prohibited or
unlawful acts or to require the performance
of a particular act in any labor dispute which,
if not restrained or performed forthwith,
may cause grave or irreparable damage to
any party
c. Injunction in strikes or lockouts under Art.
264 of the LC
d. Contempt cases
EXCLUSIVE APPELLATE JURISDICTION
a. All cases decided by the LA under Art. 217(b)
of the LC and Sec. 10 of R.A.8042 (Migrant
Worker’s Act); and
b. Cases decided by the Regional Offices of
DOLE in the exercise of its adjudicatory
function under Art.129 of the LC over
monetary claims of workers amounting to
NOT more than P5000 and NOT
accompanied by claim for reinstatement.
EFFECT OF NLRC’s REVERSAL OF LABOR
ARBITER’S ORDER OF REINSTATEMENT
Dismissed Ees may collect wages during the
period between the LA’s order of reinstatement
pending appeal and the NLRC decision
overturning that of the LA
The LC provides that the decision of the LA
reinstating a dismissed or separated Ee, insofar as
the reinstatement aspect is concerned, shall be
immediately executory, pending appeal.
Even if the order of reinstatement of the LA is
reversed on appeal, it is obligatory on the part of the
Er to reinstate and pay the wages of the dismissed
Ee during the period of appeal until reversal by the
higher court.
On the other hand, if the Ee has been reinstated
during the appeal period and such reinstatement
order is reversed with finality, the Ee is not
79
required to reimburse whatever salary he received
for he is entitled to such, more so if he actually
rendered services during the period (Pfizer v.
Velasco, G.R. No. 177467, March 9, 2011).
Availability of judicial review of the NLRC’s
decision
Judicial review of NLRC’s decision is available
through petitions for certiorari (Rule 65) which
should be initially filed with the CA in strict
observance of the doctrine on the hierarchy of
courts. The CA is procedurally equipped to resolve
unclear or ambiguous factual finding, aside from
the increased number of its component divisions
(St. Martin Funeral Home v. NLRC, G.R. No. 130866,
September 16, 1998).
Injunction or temporary restraining order
(TRO)
The power of the NLRC to enjoin or restrain any
actual or threatened commission from any or all
prohibited or unlawful acts under Art. 218 of LC can
only be exercised in labor disputes.
Certified cases
These are cases certified or referred to the
Commission for compulsory arbitration under Art.
263(g) of the LC involving national interest cases.
A national interest dispute may be certified to the
NLRC even before a strike is declared since Art.
263(g) of the LC does not require the existence of a
strike, but only of an industrial dispute
[Government Service Insurance System Employees
Association (GSISEA), et al. v. Court of Industrial
Relations, G.R. No. L-18734, December 30, 1961].
Coverage of the BLR’s jurisdiction and functions
The BLR no longer handles all labor management
disputes; rather its functions and jurisdiction are
largely confined to:
1. Union matters
2. Collective bargaining registry and
3. Labor education.
Original and exclusive jurisdiction of BLR
The BLR has original and exclusive jurisdiction
over:
1. Inter-union disputes
2. Intra-union disputes
3. Other related labor relations disputes
NATIONAL CONCILIATION AND MEDIATION
BOARD (NCMB)
Alternative modes of settlement of labor
dispute
1. Voluntary Arbitration
2. Conciliation
3. Mediation
Nature of the proceedings
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The proceedings are non-litigious. Preventive mediation case refers to the potential
labor dispute which is the subject of a formal or
All labor disputes are required to be submitted informal request for conciliation and mediation
to mandatory conciliation-mediation assistance sought by either or both parties or
upon the initiative of the NCMB to avoid the
GR: All issues arising from labor and employment occurrence of an actual labor dispute.
shall be subject to mandatory conciliation-
mediation. The LA or the appropriate DOLE agency DOLE REGIONAL DIRECTORS
or office that has jurisdiction over the dispute shall
entertain only endorsed or referred cases by the Money claims falling under the jurisdiction of
duly authorized officer [Art. 228 (a), as amended by the DOLE Regional Directors
R.A. 103960].
Under Art. 129 of the LC, the RDs or any of the duly
XPNs: authorized hearing officers of DOLE have
jurisdiction over claims for recovery of wages,
1. Grievance machinery and Voluntary simple money claims and other benefits, provided
Arbitration, in which case, their agreement will that:
govern
2. When excepted by the SLE (Ibid.) 1. The claim must arise from Er-Ee relationship;
2. The claimant does not seek reinstatement; and
NOTE: Any or both parties involved in the dispute 3. The aggregate money claim of each employee
may pre-terminate the conciliation-mediation does not exceed Php 5,000.00.
proceedings and request referral or endorsement
to the appropriate DOLE agency or office which has Adjudicatory power of the Regional Director
jurisdiction over the dispute, or if both parties so
agree, refer the unresolved issues to voluntary The RD or any of his duly authorized hearing
arbitration (Art. 228 (b), as amended by R.A. 10396). officers is empowered through summary
proceeding and after due notice, to hear and decide
CONCILIATION v. MEDIATION cases involving recovery of wages and other
monetary claims and benefits, including legal
CONCILIATION MEDIATION interests.
Conceived of as a Mild intervention by
mild form of a neutral third party SECRETARY OF LABOR AND EMPLOYMENT
intervention by a VISITORIAL AND ENFORCEMENT POWERS
neutral third party
The conciliator- The conciliator- Powers of the SLE
Mediator, relying on mediator, whereby
his persuasive he starts advising 1. Visitorial powers
expertise, who takes the parties or 2. Enforcement powers
an active role in offering solutions or 3. Appellate or power to review
assisting parties by alternatives to the
trying to keep problems with the Visitorial power
disputants talking, end in view of
facilitating other assisting them 1. Access to Er’s records and premises at any time
procedural niceties, towards voluntarily of the day or night, whenever work is being
carrying messages reaching their own undertaken
back and forth mutually acceptable 2. To copy from said records
between the parties, settlement of the 3. Question any Ee and investigate any fact,
and generally being a dispute condition or matter which may be necessary to
good fellow who determine violations or which may aid in the
tries to keep things enforcement of the LC and of any wage order,
calm and forward- or rules and regulation issued pursuant
looking in a tense thereto.
situation
It is the process It is when a 3rd Enforcement power
where a party studies each
disinterested 3rd side of the dispute It is the power of the SLE to:
party meets with then makes 1. Issue compliance orders
management and proposals for the 2. Issue writs of execution for the enforcement of
labor, at their disputants to their orders, except in cases where the Er
request or consider. The contests the findings of the labor officer and
otherwise, during a mediator cannot raise issues supported by documentary proof
labor dispute or in make an award nor which were not considered in the course of
CB conferences, and render a decision inspection
by cooling tempers, 3. Order stoppage of work or suspension of
aids in reaching an operation when non-compliance with the law
agreement or implementing rules and regulations poses
grave and imminent danger to health and
Preventive mediation case safety of workers in the workplace

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 LABOR LAW AND SOCIAL LEGISLATION
4. Require Ers to keep and maintain such
employment records as may be necessary in
aid to the visitorial and enforcement powers
5. Conduct hearings within 24 hours to determine
whether:
a. An order for stoppage of work or
suspension of operations shall be lifted or
not; and
b. Er shall pay the concerned Ees their
salaries in case the violation is attributable
to his fault (As amended by RA 7730); (Guico
v. Secretary, G.R. No. 131750, November 16,
1998).
SLE can assume jurisdiction over a labor
dispute
When there is a labor dispute causing or likely to
cause a strike affecting national interest, the SLE, on
his own initiative or upon petition by any of the
parties, may either assume jurisdiction or certify
the dispute to the NLRC for compulsory arbitration.
Cases within the appellate jurisdiction of the
SLE
1. Appeal from and adverse decision of the POEA
(Sec. 1, Part VII, Rule V, 2003 POEA Rules and
Regulations; Eastern Mediterranean Maritime
Ltd. And Agemar Manning Agency Inc., v. Surio
et. al., G.R. No. 154213, August 23, 2012).
2. Appeal the order or results of a certification
election on the ground that the Rules and
Regulations or parts thereof established by the
SLE for the conduct of election have been
violated (Art. 259, LC).
3. A review of cancellation proceedings decided
by the BLR in the exercise of its exclusive and
original jurisdiction (Abbott Laboratories
Philippines, Inc. v. Abbott Laboratories
Employees Union, G.R. No.131374, January 26,
2000).
SLE has no appellate jurisdiction over decisions of
RD involving petitions for examinations of union
accounts. It is the BLR which exercises appellate
jurisdiction in such case (Barles v. Bitonio, G.R. No.
120270, June 16, 1999).
GRIEVANCE MACHINERY AND VOLUNTARY
ARBITRATION
Grievance
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
provision of the CBA or company personnel
policies.
Grievance machinery
It refers to the mechanism for the adjustment and
resolution of grievances arising from the
interpretation or implementation of a CBA and
those arising from the interpretation or
enforcement of company personnel policies. It is
part of the continuing process of CB.
81
Grievance procedure
It is the internal rules of procedure established by
the parties in their CBA with voluntary arbitration
as the terminal step, which are intended to resolve
all issues arising from the implementation and
interpretation of their CBA.
Subject Matter of Grievance
Any grievance arising from:
1. The interpretation or implementation of the
CBA; and
2. The interpretation or enforcement of company
personnel policies
Q: Octavio, a Sales System Analyst of PLDT
claims that he was not given salary increases
pursuant to the provisions of the CBA. He
requested the President of the union (GUTS) to
act on his claim. Accordingly, the Grievance
Committee convened but failed to reach an
agreement. In effect, it denied Octavio’s demand
for salary increases. Aggrieved, Octavio filed
before the Arbitration Branch of the NLRC a
Complaint for payment of said salary increases
despite provisions in the CBA that in case of lack
of settlement in the Grievance Committee level,
the matter shall be brought to Board of
Arbitrators. Did Octavio properly raised the
issue before the courts despite remedies stated
in the grievance machinery?
A: NO. When parties have validly agreed on a
procedure for resolving grievances and to submit a
dispute to voluntary arbitration such procedure
should be strictly observed. Moreover, we have
held time and again that "before a party is allowed
to seek the intervention of the court, it is a
precondition that he should have availed of all the
means of administrative processes afforded him. He
departed from the grievance procedure mandated
in the CBA and denied the Board of Arbitrators the
opportunity to pass upon a matter over which it has
jurisdiction. Octavios recourse to the labor
tribunals below, as well as to the CA, and, finally, to
the Supreme Court, must therefore fail.
VOLUNTARY ARBITRATOR
Jurisdiction of the Voluntary Arbitrators
Generally, the arbitrator is expected to decide only
those questions expressly delineated by the
submission agreement. Nevertheless, the
arbitrator can assume that he has the necessary
power to make a final settlement since arbitration
is the final resort for the adjudication of the
disputes (Ludo and Luym Corp. v. Saornido, G.R. No.
140960, January 20, 2003).
Cases within the jurisdiction of VA
Original and exclusive jurisdiction over:
1. All unresolved grievances arising from the:
a. Implementation or interpretation of the
CBA
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 UST LAW PRE-WEEK NOTES 2018

b. Interpretation or enforcement of company Nov. 1, 1974-Dec.

personnel policies 31, 1974
After 3 years from the date
2. Wage distortion issues arising from the of submission of the
application of any wage orders in organized annual financial report to
establishments the DOLE or from the date
3. Those arising from interpretation and the same should have
implementation of productivity incentive Union funds been submitted as
programs under R.A. 6971 required by law,
4. Violations of CBA provisions which are not whichever comes earlier
gross in character are no longer treated as ULP (Sec. 5, Rule II, Book VII,
and shall be resolved as grievances under the Omnibus Rules
CBA Implementing the LC).
3 years
NOTE: Gross violation of CBA provisions shall
mean flagrant and/or malicious refusal to
comply with the economic provisions of such XPN:
agreement. ULP – 1 year
Criminal cases Simple illegal recruitment
5. Any other labor disputes upon agreement by under Labor Code – 5 years
the parties including ULP and bargaining Syndicated illegal
deadlock (Art. 262, LC). recruitment and large
scale illegal recruitment –
How to initiate arbitration 20 years
4 years. It commences to
1. Submission Agreement – Where the parties
run from the date of
define the disputes to be resolved Illegal Dismissal
formal dismissal
2. Demand notice – Invoking collective agreement Cases
[Mendoza v. NLRC, G.R. No.
arbitration clause 122481, (1998)].

REMEDIES

Decisions of voluntary arbitrators appealable

GR: Decisions of VA are final and executory after 10

calendar days from receipt of the copy of the award
or decision by the parties (Art. 262-A, LC).

XPN: Appeal to the CA via Rule 43 of the Rules of

Court within 15 days from the date of receipt of
VA’s decision (Luzon Dev’t Bank v. Ass’n of Luzon
Dev’t Bank Ee’s, G.R. No. 120319, October 6, 1995).

PRESCRIPTION OF ACTIONS

SUBJECT PRESCRIPTIVE PERIOD

1 year from accrual of
such ULP; otherwise
ULP forever barred
(Art. 290, LC)
GR:3 years from the time
the cause of action
accrued; otherwise
Money Claims forever barred (Art. 291,
LC)

XPN: Promissory Estoppel

Within one year from the
All money claims
date of effectivity, in
accruing prior to
accordance with IRR;
the effectivity of
otherwise, they shall
the LC
forever be barred
Workmen’s Dec. 31, 1974 shall be filed
Compensation not later than Mar. 31,
claims accruing 1975 before the
prior to the appropriate regional
effectivity of the offices of the DOLE. (Art.
LC and between 291, LC)

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