B.

LABOR LAW LABOR DISPUTE CASE FLOW

1. Definition
Labor legislation consists of statutes, regulations, and
SUPREME'COURT'
jurisprudence governing the relation between capital and
labor, by providing for certain employment standards COURT'OF'APPEALS'
and a legal framework for negotiating, adjusting, and
administering these standards and other incidents of
employment. BLR' SOLE' NLRC'

2. Classification
RO'DOLE' NCMB' VA' REGIONAL'
A. Labor Standards B. Labor Relations BRANCH'
Sets out minimum terms, Defines the status, rights, NLRC'
conditions, and benefits and institutional • Violation of • Pet. For
that employers must mechanisms that govern occupation assumption
• Illegal
provide and comply with the individual and al Health of jrsdctn/
dismissal
and to which employees collective interactions of and Safety certification
• Illegal strike
are entitled to as a the employers, Code to NLRC of
• Cases re
matter of right. employees, or their • Money strike/locko
wages, terms
representatives. claims ut disputes.
& conditions
Material/substance to be arising from • Notice of
Mechanism which of
processed complaint strike/
processes the substance employment
inspection lockout
(w/
(w EER)
Although the distinction is useful for academic reinstatement)
• Petition for
purposes, in reality, these two overlap. • Claims fr EER
certification • Dispute or exceeding
election interpretation or 5000php w/
•! Labor – Physical toil; does not exclude application • Union implementation or w/o
of skill. accounts of CBA/ reinstatement
•! Skill – Familiar knowledge of any art or science; examination company • Unfair labor
dexterity or readiness in execution or performance • Cancellation personnel practice
of some object other than recreation or amusement. of union policies • Claims for
registration • Other labor damages
•! Work – Covers all forms of physical or mental • De- disputes by
exertion, or both, for the attainment of some object registration agreement of
other than recreation or amusement. of CBA parties
•! Worker – Can include self-employed and those • Other inter
under the control of another, regardless of and intra
rank/title/nature of work. According to LC Art. 13, union
this includes even those who are presently disputes
unemployed.
•! Employee – A salaried person working for another
who controls or supervises the means, manner, or C. Social Security Legislation - Provides particular kinds
method of doing the work. of protection or benefits to society or segments thereof
in furtherance of social justice.
•! Labor Laws directly affect employment while social
legislation governs the effects of employment
•! Labor laws are social legislation, but not all social
legislation are labor laws The State shall promote the principle of shared
responsibility between workers and employers and the
Ex: SSS or GSIS wherein benefits are given to those preferential use of voluntary modes in settling
who contribute. disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace.
3. Social Justice as Justification
The State shall regulate the relations between workers
1987 Constitution and employers, recognizing the right of labor to its
ARTICLE II. STATE POLICIES just share in the fruits of production and the right of
Section 10. The State shall promote social justice in enterprises to reasonable returns to investments, and
all phases of national development. to expansion and growth.

Section 18. The State affirms labor as a primary social

economic force. It shall protect the rights of workers Comparison:
and promote their welfare. 1935 1973 1987
SECTION 5. SECTION 6. SECTION 10. The
Section 20. The State recognizes the indispensable The The State State shall promote
role of the private sector, encourages private promotion of shall promote social justice in all
enterprise, and provides incentives to needed social justice social justice phases of national
investments. to insure the to ensure the development.
well-being dignity,
ARTICLE XIII. SOCIAL JUSTICE AND HUMAN RIGHTS and economic welfare, and
Section 1. The Congress shall give highest priority to security of all security of all
the enactment of measure that protect and enhance the people the people.
the right of all people to human dignity, reduce social, should be the Towards this
economic, and political inequalities, and remove concern of end, the State
cultural inequities by equitably diffusing wealth and the State. shall regulate
political power for the common good. the
acquisition,
Section 2. The promotion of social justice shall ownership,
include the commitment to create economic use,
opportunities based on freedom of initiative and self- enjoyment,
reliance. and
disposition of
Section 3. The State shall afford full protection to private
labor, local and overseas, organized and unorganized, property and
and promote full employment and equality of equitable
employment opportunities for all. diffuse
property
It shall guarantee the rights of all workers to self- ownership
organization, collective bargaining and negotiations, and profits.
and peaceful concerted activities, including the right to
strike in accordance with law. They shall be entitled to Based on Article XIII:
security of tenure, humane conditions of work, and a •! First track to Social Justice (section 1): The
living wage. They shall also participate in policy and enactment of measures that protect and
decision-making processes affecting their rights and enhance the right of all people to human
benefits as may be provided by law. dignity, reduce social, economic, and political
 inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for
the common good
•! Second Track (section 2): The creation of
economic opportunities based on freedom of
initiative and self-reliance
A. Definition/ Balancing of Interests
Prof Battad says: social justice isn’t always for the
laborer. Its about balancing of interests!
CALALANG v WILLIAMS (1940)
Doctrine: Social justice is "neither communism, nor
despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social and
economic forces by the State so that justice in its
rational and objectively secular conception may at least
be approximated.
It is the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to
insure economic stability of all the competent elements
of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of
the members of the community, constitutionally, through
the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers
underlying the existence of all governments on the
time-honored principle of salus populi est suprema lex.
It must, therefore, be founded on the recognition of the
necessity of interdependence among divers and diverse
units of a society and of the protection that should be
equally and evenly extended to all groups as a
combined force in our social and economic life,
consistent with the fundamental and paramount
objective of the state of promoting the health, comfort,
and quiet of all persons, and of bringing about "the
greatest good to the greatest number.”
Facts: Petitioners aver that Commonwealth Act No. 548,
which authorized the Director of Public Works and to
the Secretary of Public Works and Communications to
promulgate rules and regulations to regulate and control
the use of and traffic on national road was
unconstitutional.
Issue: W/N such ban infringes on the mandate of
social justice as enshrined in the Constitution?
Ruling: No. The promotion of social justice is to be
achieved not through a mistaken sympathy towards any
given group and instead, it should be the promotion of
the welfare of all people. There is a necessity for
interdependence among diverse units in society.
TOYOTA PHILIPPINES, CORP. WORKERS ASSOC.
(TMPCWA) v. NLRC (2007)
Doctrine: “It is high time that employer and employee
cease to view each other as adversaries and instead
recognize that theirs is a symbiotic relationship,
wherein they must rely on each other to ensure the
success of the business. When they consider only
their own self- interests, and when they act only with
their own benefit in mind, both parties suffer from
short-sightedness, failing to realize that they both have
a stake in the business. The employer wants the
business to succeed, considering the investment that
has been made. The employee in turn, also wants the
business to succeed, as continued employment
means a living, and the chance to better one’s lot in
life. It is clear then that they both have the same goal,
even if the benefit that results may be greater for one
party than the other. If this becomes a source of
conflict, there are various, more amicable means of
settling disputes and of balancing interests that do not
add fuel to the fire, and instead open avenues for
understanding and cooperation between the employer
and the employee.”
Facts: DOLE declared the Union as the official
bargaining agent of Toyota’s rank-and-file employees.
Toyota appealed this but pending the result, the Union
submitted its proposed CBA and so, Toyota refused
negotiations. Tensions started to build up and
eventually, the Union held an illegal strike— without
having a permit to rally and such not being in
accordance with the Labor Code provisions on valid
strikes. As a result, Toyota terminated several of the
employees and Union representatives who
participated in the strike.
 Issue: W/N the CA was correct in holding that
severance pay should be granted on the basis of
social justice?
Held: No. Separation pay shall be allowed as a
measure of social justice only in those instances
where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on
his moral character. Considering that the dismissal of
the employees was due to their participation in the
illegal strikes as well as violation of the Code of
Conduct of the company, the same constitutes serious
misconduct.
B. Foundation: Police Power and State Protection
Police power- power of the government to enact laws,
within constitutional limits, to promote the order, safety
health, morals, and general welfare of society.
An individual’s right to pursue a business, occupation, or
profession is subject to the government’s exercise of
police power.
ST. LUKE’S MEDICAL CENTER EMPLOYEE’S
FOUNDATION-AFW v NLRC (2007)
Doctrine: While the right of workers to security of tenure
is guaranteed by the Constitution, its exercise may be
reasonably regulated pursuant to police power…
Social justice…does not mean that every labor dispute
will be decided in favor of the workers... Management
has rights which are also entitled to respect and
enforcement in the interest of fair play.
Facts: Congress had passed a law which required all
radiologists to pass a test and subsequently acquire a
license to practice. Petitioner had failed to satisfy this
requirement and was warned numerous times of her
deficiencies. Santos was dismissed as an X-ray
technician/radiologist of St. Luke’s Medical Center.
Issue: W/N Petitioner’s rights to security of tenure and
unlawful discrimination were violated?
Ruling: No. The right to security of tenure is not
absolute and may be reasonably regulated with the
police power of the state to protect the health, morals,
peace, education, order, safety and general welfare of
the people. Such right is also limited when it involves
professions which require technical knowledge such as
medicine in order to protect the public from the harmful
and life-threatening effects of incompetence. Court also
ruled that the NLRC does not have managerial authority
and that St. Luke’s validly exercised their management
prerogative and that the petitioner had every opportunity
to apply for another position but simply did not have
the qualifications.
C. Limits of Use
PLDT v NLRC (1988)
Doctrine: Separation pay shall be allowed as a
measure of social justice only in those instances
where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on
his moral character.
Facts: Abucay who was an employee of PLDT for 10
years was found to have accepted bribes to facilitate
phone connections. PLDT terminated her so she filed
a case assailing her dismissal. The NLRC rules that
she was entitled to separation pay.
Issue: W/N Abucay is entitled to separation pay?
Held: No. As a rule, a person who is dismissed for
just and authorized causes are not entitled to
separation pay but based on equity. The fact that she
has worked with the PLDT for more than a decade, if
it is to be considered at all, should be taken against
her as it reflects a regrettable lack of loyalty that she
should have strengthened instead of betraying.
4. Legal Bases; Sources of Rights and Benefits
A. International Instruments
International Covenant on Civil and Political Rights (March
23, 1976)
Article 22
(1) Everyone shall have the right to freedom of
association with others, including the right to form and
join trade unions for the protection of his interests.
(2) No restrictions may be placed on the exercise of this
right other than those which are prescribed by law and
which are necessary in a democratic society in the
interests of national security or public safety, public order,
the protection of public health or morals or the protection
of the rights and freedoms of others. This article shall not
prevent the imposition of lawful restrictions on members
of the armed forces and of the police in their exercise of
this right.
(3) Nothing in this article shall authorize States Parties to
the International Labor Organization Convention of 1948
concerning Freedom of Association and Protection of the
Right to Organize to take legislative measures which
would prejudice, or to apply the law in such a manner as
to prejudice the guarantees provided for in that
Convention.
International Convenant on Economic, Social and Cultural
Rights (January 1, 1976)
Article 6. 1. The States Parties to the present Covenant
recognize the right to work, which includes the right of
everyone to the opportunity to gain his living by work
which he freely chooses or accepts, and will take
appropriate steps to safeguard this right.
2. The steps to be taken by a State Party to the present
Covenant to achieve the full realization of this right shall
include technical and vocational guidance and training
programmes, policies and techniques to achieve steady
economic, social and cultural development and full and
productive employment under conditions safeguarding
fundamental political and economic freedoms to the
individual.
Article 7. The States Parties to the present Covenant
recognize the right of everyone to the enjoyment of just
and favourable conditions of work which ensure, in
particular:
(a) Remuneration which provides all workers, as a
minimum, with:
(i) Fair wages and equal remuneration for work of equal
value without distinction of any kind, in particular women
being guaranteed conditions of work not inferior to those
enjoyed by men, with equal pay for equal work;
(ii) A decent living for themselves and their families in
accordance with the provisions of the present Covenant;
(b) Safe and healthy working conditions; (c) Equal
opportunity for everyone to be promoted in his
employment to an appropriate higher level, subject to no
considerations other than those of seniority and
competence;
(d ) Rest, leisure and reasonable limitation of working
hours and periodic holidays with pay, as well as
remuneration for public holidays
Article 8: 1. The States Parties to the present Covenant
undertake to ensure:
(a) The right of everyone to form trade unions and join
the trade union of his choice, subject only to the rules of
the organization concerned, for the promotion and
protection of his economic and social interests. No
restrictions may be placed on the exercise of this right
other than those prescribed by law and which are
necessary in a democratic society in the interests of
national security or public order or for the protection of
the rights and freedoms of others;
(b) The right of trade unions to establish national
federations or confederations and the right of the latter to
form or join international trade-union organizations;
(c) The right of trade unions to function freely subject to
no
limitations other than those prescribed by law and which
are necessary in a democratic society in the interests of
national security or public order or for the protection of
the rights and freedoms of others;
(d) The right to strike, provided that it is exercised in
conformity with the laws of the particular country.
2. This article shall not prevent the imposition of lawful
restrictions on the exercise of these rights by members of
the armed forces or of the police or of the administration
of the State. 3. Nothing in this article shall authorize States
Parties to the International Labour Organisation Convention
of 1948 concerning Freedom of Association and
Protection of the Right to Organize to take legislative
measures which would prejudice, or apply the law in
such a manner as would prejudice, the guarantees
provided for in that Convention.
Article 9: The States Parties to the present Covenant
recognize the right of everyone to social security,
including social insurance.
International Convention on Elimination of All forms of
Discrimination Against Women (December 18, 1979)
Article 11. 1. States Parties shall take all appropriate
measures to eliminate discrimination against women in
the field of employment in order to ensure, on a basis
of equality of men and women, the same rights, in
particular:
(a) The right to work as an inalienable right of all
human beings; (b) The right to the same employment
opportunities, including the application of the same
criteria for selection in matters of employment;
(c) The right to free choice of profession and
employment, the right to promotion, job security and
all benefits and conditions of service and the right to
receive vocational training and retraining, including
apprenticeships, advanced vocational training and
recurrent training;
(d) The right to equal remuneration, including benefits,
and to equal treatment in respect of work of equal
value, as well as equality of treatment in the evaluation
of the quality of work;
(e) The right to social security, particularly in cases of
retirement, unemployment, sickness, invalidity and old
age and other incapacity to work, as well as the right
to paid leave;
(f) The right to protection of health and to safety in
working conditions, including the safeguarding of the
function of reproduction.
2. In order to prevent discrimination against women
on the grounds of marriage or maternity and to
ensure their effective right to work, States Parties shall
take appropriate measures: (a) To prohibit, subject to
the imposition of sanctions, dismissal on the grounds
of pregnancy or of maternity leave and discrimination
in dismissals on the basis of marital status;
(b) To introduce maternity leave with pay or with
comparable social benefits without loss of former
employment, seniority or social allowances;
(c) To encourage the provision of the necessary
supporting social services to enable parents to
combine family obligations with work responsibilities
and participation in public life, in particular through
promoting the establishment and development of a
network of child-care facilities;
(d) To provide special protection to women during
pregnancy in types of work proved to be harmful to
them.
3. Protective legislation relating to matters covered in
this article shall be reviewed periodically in the light of
scientific and technological knowledge and shall be
revised, repealed or extended as necessary.
2. International Labor Organization (ILO Conventions)
International School Alliance Of Educators v
Quisumbing (2000)
Doctrine: International law, which springs from general
principles of law, likewise proscribes discrimination.
The Philippines, through its Constitution, has
incorporated this principle as part of its national laws.
Facts: International School, Inc. hires both foreign and
local teachers as members of their faculty. Foreign-
hires are paid higher salary (25% more) than local
hires. They are also given exclusive benefits.
Issue: W/N the School violates the public policy on
inequality and discrimination by giving higher salaries
to foreign hires than local hires.
Ruling: Yes. Court rules that the School’s policy in
terms of salary violates public policy— using the
Constitution, Labor Code and ICESCR as basis. We
follow the legal truism “equal pay for equal work.”
However, the Court agrees with the respondents that
foreign hires do not belong in the same bargaining
unit as local hires.
B. The 1987 Philippine Constitution
ARTICLE II. STATE POLICIES
Section 5. The maintenance of peace and order, the
protection of life, liberty, and property, and promotion
of the general welfare are essential for the enjoyment
by all the people of the blessings of democracy.
Section 9. The State shall promote a just and dynamic
social order that will ensure the prosperity and
independence of the nation and free the people from
poverty through policies that provide adequate social
services, promote full employment, a rising standard
of living, and an improved quality of life for all.
Section 10. The State shall promote social justice in
all phases of national development.
Section 11. The state values the dignity of every
person and guarantees full respect for human rights.
Section 13. The State recognizes the vital role of the
youth in nation-building and shall promote and
protect their physical, moral, spiritual, intellectual, and
social well-being. It shall inculcate in the youth
patriotism and nationalism, and encourage their
involvement in public and civic affairs.
Section 14. The State recognizes the role of women
in nation- building, and shall ensure the fundamental
equality before the law of women and men.
Section 18. The State affirms labor as a primary social
economic force. It shall protect the rights of workers
and promote their welfare.
ARTICLE III. BILL OF RIGHTS
Section 1. No person shall be deprived of life, liberty,
or property without due process of law, nor shall any
person be denied the equal protection of the laws.
Section 4. No law shall be passed abridging the
freedom of speech, of expression, or of the press, or
the right of the people peaceably to assemble and
petition the government for redress of grievances
Section 8. The right of the people, including those
employed in the public and private sectors, to form
unions, associations, or societies for purposes not
contrary to law shall not be abridged.
Section 18(1). No person shall be detained solely by
reason of his political beliefs and aspirations.
Comparison:
ARTICLE XIII. SOCIAL JUSTICE AND HUMAN RIGHTS
Section 1. The Congress shall give highest priority to
the enactment of measures that protect and enhance
the right of all the people to human dignity, reduce
social, economic, and political inequalities, and
remove cultural inequities by equitably diffusing wealth
and political power for the common good.
Art. XIII, Sec. 3: The State shall afford full protection to
labor, local and overseas, organized and unorganized,
and promote full employment and equality of
employment opportunities for all. It shall guarantee the
rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They
shall also participate in policy and decision- making
processes affecting their rights and benefits as may
be provided by law.
The State shall promote the principle of shared
responsibility between workers and employers and the
preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers
and employers, recognizing the right of labor to its
just share in the fruits of production and the right of
enterprises to reasonable returns to investments, and
to expansion and growth.
Section 2. The promotion of social justice shall
include the commitment to create economic
opportunities based on freedom of initiative and self-
reliance.
Section 14. The State shall protect working women by
providing safe and healthful working conditions, taking
into account their maternal functions, and such
facilities and opportunities that will enhance their
welfare and enable them to realize their full potential
in the service of the nation.
1935 1973 1987
Art. XIV, Sec. 6: Art. II, Sec. 9.: The Art. XIII,
The State shall State shall afford Sec. 3.,
afford protection to protection to labor, supra
labor, especially to promote full
working women, employment and
and minors, and equality in
shall regulate the employment,
relations between ensure equal work
the landowner and opportunities
 nd
tenant, and regardless of sex, 2 paragraph:
between labor and race, or creed, 7 CARDINAL RIGHTS:
capital in industry and regulate the Rights under labor relations:
and in agriculture. relation between 1. Self-organization
The State may workers and 2. Collective bargaining (organized) and negotiation
provide for employers. The (unorganized)
compulsory State shall assure 3. Strike
arbitration. the 4. Participate in policy and decision-making processes
rights of workers
to self- Rights under labor standards:
organization, 5. Security of tenure
collective 6. Humane conditions of work
bargaining, 7. Living wage
security of tenure,
rd
and just and 3 paragraph- shared responsibility-> CBAs for
humane conditions disputes
of work. The State -voluntary modes in settling disputes->
may provide for preference for settlement between the employee
compulsory and employer
arbitration. -Goal is industrial peace-> both have a hand in
attaining the goal

th
4 paragraph- balance of power between labor and
capital
1935 1973 1987 -recognition of rights of both sides
“afford protection to labor” “afford FULL protection
to labor, local and C. Labor Code (LC) and Omnibus Rules Implementing the
overseas, organized and Labor Code
unorganized”
SO, CB, SoT All 7 Cardinal Rights D. Civil Code of the Philippines
& HCW
“compulsory arbitration” “preferential use of Art. 19. Every person must, in the exercise of his
voluntary modes in rights and in the performance of his duties, act with

settling disputes” justice, give everyone his due, and observe honesty
and good faith.
“regulate relations” Qualifies regulation in
(generic) par. 3 & 4 (includes
Art. 21. Any person who wilfully causes loss or injury
balancing of interest)
to another in a manner that is contrary to morals,
good customs or public policy shall compensate the
ARTICLE XII SEC. 3:
st latter for the damage.
1 paragraph- Full protection-> doubts are generally
resolved in favor of labor
Art. 1700. The relations between capital and labor are
-Organized & unorganized-> unions
not merely contractual. They are so impressed with
-Full employment-> as opposed to part-time
public interest that labor contracts must yield to the
work & underutilized skills
common good. Therefore, such contracts are subject
-Equality-> freedom from discrimination
to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages,
 working conditions, hours of labor and similar
subjects.
Art. 1701. Neither capital nor labor shall act
oppressively against the other, or impair the interest or
convenience of the public.
E. Collective Bargaining Agreement
Art. 1305. A contract is a meeting of minds between
two persons whereby one binds himself, with respect
to the other, to give something or to render some
service. (1254a)
Art. 1306. The contracting parties may establish such
stipulations, clauses, terms and conditions as they
may deem convenient, provided they are not contrary
to law, morals, good customs, public order, or public
policy. (1255a)
CBA- Contract between labor and capital; had the effect
of law
Dole Phil v Pawis Ng Makabayang Obrero (2003)
Doctrine: The exercise of management prerogative is
not unlimited. It is subject to the limitations found in
law, a collective bargaining agreement or the general
principles of fair play and justice. This situation
constitutes one of the limitations. The CBA is the norm
of conduct between petitioner and private respondent
and compliance therewith is mandated by the express
policy of the law.
Facts:: A Collective Bargaining Agreement between
petitioner and respondent provided for free meals
after employees render three hours of actual overtime
work. Petitioner gave free meals only to those who
rendered more than three hours of overtime and
excluded those who worked for exactly three hours
only.
Issue: W/N the petitioner can invoke the principle of
management prerogative
Ruling: No. The CBA is clear and unambiguous The
terms are explicit and the language of the CBA is not
susceptible to any other interpretation.
F. Past Practices
Past practices may ripen into company policy if
deliberate, and consistent.
American Wire & Cable Employees Union v American Wire
And Cable Co Inc (2010)
Doctrine: Benefits in the nature of bonuses given at the
generosity of the employers, and therefore were not legally
demandable, The practice had not yet become a policy, as
they were not consistent and had not been happening for
a long time.
Facts:: Petitioners allege that respondent suddenly and
unilaterally, without valid cause, withdrew and denied
certain benefits and entitlements which they have long
enjoyed.
Issue: W/N the company violated Art. 100 (prohibition
against diminution of benefits) of the Labor Code?
Ruling: No. The benefits/entitlements received by the
employees were not agreed upon expressly, as it was not
incorporated in the Collective Bargaining Agreement, was
not in a fixed amount, and was not a long-standing
practice, as in fact there has been a downtrend in the
giving of bonuses like these.
Netlink Computer Inc. v Delmo(2014)
Doctrine: There is also nothing in jurisprudence which
requires a minimum number of years to be observed
to make a company practice a voluntary one. This
voluntary company practice cannot be reduced or
discontinued by the employer.
Facts:: Petitioner dismissed its employee after he has
earned commissions amounting to Php 993,558.89
from his former job as an account manager.
Respondent filed a complaint for illegal dismissal.
Issue: W/N the payment of commissions should be in
US dollars?
 Ruling: Yes. Even though there was no contractual
stipulation that Netlink should pay its employee’s
commissions in US dollars, Netlink was still liable to
pay Delmo in US dollars because the practice of
paying its sales agents in US dollars for their US
dollar-denominated sales had become a company
policy, that can be reduced or discontinued by the
employer.

G. Company Policy
Test for a company policy is reasonableness.

China Banking Corporation v Borromeo (2004)

Doctrine: It is well recognized that company policies

and regulations are, unless shown to be grossly
oppressive or contrary to law, generally binding
and valid on the parties and must be complied with
until finally revised or amended unilaterally or
preferably through negotiation or by competent
authority. Management has the prerogative to
discipline its employees and to impose appropriate
penalties on erring workers pursuant to company rules
and regulations.

Facts:"Respondent Mariano was a bank manager who

approved credit accommodations in excess of the
credit limit and without approval from higher
management, contrary to the bank’s SOP. After being
found out, Mariano admitted his mistake and resigned
from the company, accepting any consequences for
his mistake. The bank decided to withhold his
separation benefits until it recovered the loss, which
however, Mariano did not accept.

Issue: W/N the bank may withhold Mariano’s

separation benefits?

Ruling: Yes. The bank’s code of ethics which

governed Mariano’s punishment was binding to both
parties, and the withholding of Mariano’s separation
benefits was justified given the latter’s admission of
his violations.

' '
II. LABOR CODE OF THE PHILIPPINES
Management’s rights and prerogatives are subject to
A. BRIEF HISTORY limitations provided by: (1) Law, (2) CBA, and (3) General
principles of fair play and justice.
•! 1968: Writing of the Labor Code began under the
Minister of Labor, Blas Ople (“Father of the Labor Article 4. Construction in Favor of Labor— All doubts in
Code”) the implementation and interpretation of the provisions
•! Objective: of this Code, including its implementing rules and
! (1) to consolidate the then existing pieces of regulations, shall be resolved in favour of Labor
! labor legislation
! (2) reorient them to the needs of economic NCC, Article 1702. In case of doubt, all labor legislation
! development and justice and all labor contracts shall be construed in favor of
•! Information had to be gathered from different the safety and decent living for the laborer.
departments and bureaus of the government, UP
Law, IBP, NEDA, etc.
•! April 28,1973: Ratified by a National Tripartite HOCHENG PHIL CORP vs. FARRALES (2015)
Congress Doctrine: Where there is no showing of a clear, valid
•! May 1, 1973: Submitted to President Marcos, and legal cause for termination of employment, the law
subject to revisions considers the case a matter of illegal dismissal. If
•! May 1, 1974: Signed into law as PD 442 doubts exist between the evidence presented by the
•! Nov 1, 1974: Took effect employer and that of the employee, the scales of justice
must be tilted in favor of the latter.

B. GENERAL PROVISIONS Facts: Motorcycle helmet of an employee was stolen

1.! Decree Title
ART 1. Name of Decree— This Decree shall be known
as the “Labor Code of the Philippines.
2.! Effectivity
Article 2. Date of Effectivity— This Code shall take effect
six months after its promulgation
3.! Policy Declaration
Article 3. Declaration of Basic Policy— The state shall
afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex,
race, or creed, and regulate the relations between
workers and employers. The State shall assure the
rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane
conditions of work.
and it was shown in the CCTV that Farrales took the
helmet. Farrales defense: He borrowed a helmet from
his co-worker Eric. Not knowing which motorcycle was
Eric’s, he asked another employee. The employee
handed him the helmet.
Issue: W/N illegal dismissal?
Ruling: Yes. To have a valid dismissal, the employer
must affirmatively show rationally adequate evidence
that the dismissal was for a justifiable cause. In this
case, HPC failed to show that Farrales acted with the
intent to gain. Upon finding out that the helmet does
not belong to Eric, Farrales immediately phoned the
security guard to report the situation and he also
apologized to the real owner for his mistake.
5.! Rule Making Power- DOLE

4.! Construction In Favor Of Labor Article 5. Rules and Regulations— The Department of
Because the employer is general more ‘powerful’ Labor and Employment and other government agencies
compared to the employee. charged with the administration and enforcement of this
Code or any of its parts shall promulgate the necessary
implementing rules and regulations. Such rules and
 regulations shall become effective 15 days after
announcement of their adoption in newspapers of
general circulation.
KAPISANAG MANGAGAWANG PINAGYAKAP vs. NLRC
&FRANKLIN BAKER CO OF THE PHILS (1997)
Doctrine (from Prof): The spring cannot rise higher than
its source
Facts: On March 1977, CBA of the workers provided
that they will be receiving 1.33 daily wage increase
retroactive to Jan 1, 1977. After a month, PD 1123 was
issued which provided that employers will pay workers
a 60 peso emergency allowance monthly. However, the
implementing rules issued by SOLE provided that
companies who have given a wage increase on or
before Jan 1, 1977 shall only pay the difference. NLRC
ruled that the 1.33 will be credited and deducted from
the P60/month or P2/daily living allowance required
by PD 1123 and in effect nullifying the negotiated wage
increase of the workers.
Ruling: P.D. 1123 did not authorize such a credit and
deduction. Secretary of Labor exceeded his rule
making authority in including an additional exception in
the implanting rules which was not part of the enabling
law.
6.! Technical Rules Not Binding- Rules of procedure
should be relaxed when there is substantial and
subsequent compliance
Art. 227 (221). Technical Rules Not Binding and Prior
Resort to Amicable Settlement— In any proceeding
before the Commission or any of the Labor Arbiters,
the rules of evidence prevailing in courts of law and
equity shall not be controlling and it is the spirit and
intention of this Code that the Commission and its
members and the Labor Arbiters shall use every and
all reasonable means to ascertain the facts in each
case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of
due process. In any proceeding before the Commission
or any Labor Arbiter, the parties may be represented
by legal counsel but it shall be the duty of the
Chairman, any presiding Commissioner or any Labor
Arbiter to exercise complete control of the proceedings
at all stages
Any provision of law to the contrary notwithstanding,
the Labor Arbiter shall exert all efforts towards the
amicable settlement of a labor dispute within his
jurisdiction on or before the first hearing. The same rule
shall apply to the Commission in the exercise of its
original jurisdiction.
MA LIGAYA SANTOS V LITTON MILLS INC (2011)
Doctrine: Rules of procedure should be relaxed when
there is substantial and subsequent compliance
Facts: Santos, a clerk, was caught and terminated for
engaging in an unauthorized arrangement where she
would demand money from the waste buyer so she will
not withhold the released of the latter’s purchased
materials. She filed a case for illegal dismissal.
Issue: W/N CA erred in dismissing on technical
grounds
Ruling: Yes. The court applied liberal construction of
the rules to secure a greater interest in justice and
remanded the case to CA. It is settled that "subsequent
and substantial compliance may call for the relaxation
of the rules of procedure." The mention of the
respondent’s counsels and her certification that she has
not filed a similar case before any other court
constitutes substantial compliance. Moreover, in her
MR, she rectified the deficiencies and indicated the
actual addresses of the parties and affixed the required
verification and certification
WALLEM MARITIME SERVICES INC vs. PEDRAJAS
(2014)
Doctrine: Proceedings before the NLRC are not
covered by the technical rules of evidence and
procedure as observed in the regular courts.
Facts: Pedrajas filed a claim for death compensation
benefits from the death of her husband, Hernani who
worked as an Engine Boy for Petitioner.
Issue: W/N photocopies of the suicide notes are valid
pieces of evidence?
 Ruling: Yes. Aside from the Italian Medical Examiner’s
report that Hernani committed suicide, the court gave
credence to the suicide notes. Petitioners' failure to
submit the original copy of the suicide notes is not a
ground for disregarding such note because
proceedings before the NLRC are not covered by the
technical rules of evidence and procedure as observed
in the regular courts. The credibility and authenticity of
the suicide notes were proven because they led to the
arrest of a co-worker who also confessed to his
participation in the drug operations and eventually led
to the location where the cocaine was hidden. Since
PET was able to prove that Hernani committed suicide,
his heirs are not entitled to any compensation.

7.! Applicability
Article 6. Applicability— All rights and benefits granted
to workers under this Code shall, except as may
otherwise be provided herein, apply alike to all
workers, whether agricultural or non-agricultural.

Article 291 (Art 276). Government employees– The

terms and conditions of employment of all
government employees, including employees of
government-owned and controlled corporations,
shall be governed by the Civil Service Law, rules and
regulations. Their salaries shall be standardized by
the National Assembly as provided for in the New
Constitution. However, there shall be no reduction of
existing wages, benefits and other terms and
conditions of employment being enjoyed by them at
the time of the adoption of this Code.

1987 Constitution, Article IX-B B.

THE CIVIL SERVICE COMMISSION SECTION 2(1) –
The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government,
including government-owned or controlled
corporations with original charters.
8.! Enforcement And Sanctions

224 128 129

Regional Director or hearing
Labor Arbiter SOLE and duly authorized reps
Authority officer

- Original and Exclusive

- Visitorial and Enforcement - Recovery of wages and
jurisdiction
Nature of powers; Inspection simple money claims
- Compulsory Arbitration
Subject - Violation of Labor Standards - Summary Procedure;
-Compliance w Labor Laws &
and other Labor Laws Adjudication
Standards

•! Unfair labor practices

•! Termination
*If arising from
interpretation of CBA/
company policies-
jurisdiction of VA

•! Money claims -! Cases arising from

- Arising from terms and
conditions of work
-Accompanied by claims of
reinstatement
What may be •! Damages arising from EER
heard and •! Claims involving strikes and
decided lockouts;
•! Other claims
-Arising from EER including
those of persons in
domestic or household
service
-Involving amount
exceeding 5000php
-Regardless w/n
accompanied with a claim
for reinstatement
inspection of
establishment -! Small money
(regardless of claims
amount of claim)
-Arising from EER
-EER still exist; -No claim for reinstatement
-Findings were made in the –Aggregate money claim of
course of inspection by labor each employee does not
inspectors; exceed 5000php
-The employees have not yet -Complainant employed in
initiated any claim or complaint domestic or household
with the DOLE Regional under service, or house helper
Article 129, or the Labor Arbiter
under Article 217

**Except claims for

Employees Compensation,
Social Security, Medicare,
and maternity benefits
NLRC->CA (Rule 65)->SC
LA->NLRC->CA->SC SOLE/REP->CA->SC
Appeal (Rule 45)

Article 224. Jurisdiction of the Labor Arbiter—
(a) Except as otherwise provided under this Code,
the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide within thirty (30)
calendar days after the submission of the case by
the parties for decision without extension, even in the
absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-
agricultural:
(1) Unfair labor practices
(2) Termination disputes
(3) If accompanied with a claim for reinstatement,
those cases that workers may file involving
wages, rates of pay, hours of work and other
terms and conditions of employment
(4) Claims for actual, moral, exemplary and other
forms of damages arising from the employer-
employee relations
(5) Claims arising from any violation of Article
264 of this Code, including questions involving
the legality of strikes and lockouts;
(6) Except claims for Employees Compensation,
Social Security, Medicare, and maternity benefits,
all other claims arising from employer-employee
relations including those of persons in domestic
or household service, involving an amount
exceeding five thousand pesos (P5,000)
regardless of whether accompanied with a claim
for reinstatement
ART 128. Visitorial and Enforcement Power—
(a) The Secretary of Labor and Employment or his
duly authorized representatives, including labor
regulation officers, shall have access to employer’s
records and premises at any time of the day or night
whenever work is being undertaken therein, and the
right to copy therefrom, to question any employee
and investigate any fact, condition or matter which
may be necessary to determine violations or which
may aid in the enforcement of this Code and of any
labor law, wage order or rules and regulations issued
pursuant thereto.
(b) Notwithstanding the provisions of Articles 129 and
217 of this Code to the contrary, and in cases where
the relationship of employer-employee still exists, the
Secretary of Labor and Employment or his duly
authorized representatives shall have the power to
issue compliance orders to give effect to the labor
standards provisions of this Code and other labor
legislation based on the findings of labor employment
and enforcement officers or industrial safety
engineers made in the course of inspection. The
Secretary or his duly authorized representatives shall
issue writs of execution to the appropriate authority
for the enforcement
of their orders, except in cases where the employer
contests the findings of the labor employment and
enforcement officer and raises issues supported by
documentary proofs which were not considered in
the course of inspection.
An order issued by the duly authorized representative
of the Secretary of Labor and Employment under this
Article may be appealed to the latter. In case said
order involves a monetary award, an appeal by the
employer may be perfected only upon the posting of
a cash or surety bond issued by a reputable bonding
company duly accredited by the Secretary of Labor
and Employment in the amount equivalent to the
monetary award in the order appealed from.
(c) The Secretary of Labor and Employment may
likewise order stoppage of work or suspension of
operations of any unit or department of an
establishment when non-compliance with the law or
implementing rules and regulations poses grave and
imminent danger to the health and safety of workers
in the workplace.
Within twenty-four hours, a hearing shall be
conducted to determine whether an order for the
stoppage of work or suspension of operations shall
be lifted or not. In case the violation is attributable to
the fault of the employer, he shall pay the employees
concerned their salaries or wages during the period
of such stoppage of work or suspension of operation.
(d) It shall be unlawful for any person or entity to
obstruct, impede, delay or otherwise render
ineffective the orders of the Secretary of Labor and
Employment or his duly authorized representatives
issued pursuant to the authority granted under this
Article, and no inferior court or entity shall issue
temporary or permanent injunction or restraining
order or otherwise assume jurisdiction over any case
involving the enforcement orders issued in
accordance with this Article.
(e) Any government employee found guilty of
violation of, or abuse of authority, under this Article
shall, after appropriate administrative investigation, be
subject to summary dismissal from the service.
(f) The Secretary of Labor and Employment may, by
appropriate regulations, require employers to keep
and maintain such employment records as may be
necessary in aid of his visitorial and enforcement
powers under this Code.
Article 129. Recovery of wages, simple money claims
and other benefits— Upon complaint of any
interested party, the Regional Director of the
Department of Labor and Employment or any of the
duly authorized hearing officers of the Department is
empowered, through summary proceeding and after
due notice, to hear and decide any matter involving
the recovery of wages and other monetary claims
and benefits, including legal interest, owing to an
employee or person employed in domestic or
household service or househelper under this Code,
arising from employer-employee relations: Provided,
That such complaint does not include a claim for
reinstatement: Provided further, That the aggregate
money claims of
each employee or househelper does not exceed Five
thousand pesos (P5,000.00). The Regional Director
or hearing officer shall decide or resolve the
complaint within thirty (30) calendar days from the
date of the filing of the same. Any sum thus
recovered on behalf of any employee or househelper
pursuant to this Article shall be held in a special
deposit account by, and shall be paid on order of,
the Secretary of Labor and Employment or the
Regional Director directly to the employee or
househelper concerned. Any such sum not
paid to the employee or househelper because he
cannot be located after diligent and reasonable effort
to locate him within a period of three (3) years, shall
be held as a special fund of the Department of Labor
and Employment to be used exclusively for the
amelioration and benefit of workers.
Any decision or resolution of the Regional Director or
hearing officer pursuant to this provision may be
appealed on the same grounds provided in Article
223 of this Code, within five (5) calendar days from
receipt of a copy of said decision or resolution, to
the National Labor Relations Commission which shall
resolve the appeal within ten (10) calendar days from
the submission of the last pleading required or
allowed under its rules.
The Secretary of Labor and Employment or his duly
authorized representative may supervise the payment
of unpaid wages and other monetary claims and
benefits, including legal interest, found owing to any
employee or househelper under this Code.
Article 303. Penalties— Except as otherwise provided
in this Code, or unless the acts complained of hinge
on a question of interpretation or implementation of
ambiguous provisions of an existing collective
bargaining agreement, any violation of the provisions
of this Code declared to be unlawful or penal in
nature shall be punished with a fine of not less than
One Thousand Pesos (P1,000.00) nor more than Ten
Thousand Pesos (P10,000.00) or imprisonment of
not less than three months nor more than three years,
or both such fine and
imprisonment at the discretion of the court.
In addition to such penalty, any alien found guilty
shall be summarily deported upon completion of
service of sentence.
Any provision of law to the contrary notwithstanding,
any criminal offense punished in this Code, shall be
under the concurrent jurisdiction of the Municipal or
City Courts and the Courts of First Instance.
Article 304. Who are liable when committed by other
than natural person— If the offense is committed by
a corporation, trust, firm, partnership, association or
any other entity, the penalty shall be imposed upon
the guilty officer or officers of such corporation, trust,
firm, partnership, association or entity.
Article 305. Offenses— Offenses penalized under this
Code and the rules and regulations issued pursuant
thereto shall prescribe in three (3) years.
All unfair labor practice arising from Book V shall be of Compliance wit Labor Standards shall not be
filed with the appropriate agency within one (1) year covered by assessment.
from accrual of such unfair labor practice; otherwise, 1.! Covered establishments shall be
they shall be forever barred. assessed at least once a year, (1) Motu
Propio or (2) Upon application
Article 306. Money claims— All money claims arising (2)! Compliance Visit
from employer-employee relations accruing during !! Will see if there are discrepancies. If there
the effectivity of this Code shall be filed within three are, issuance of compliance order then a
(3) years from the time the cause of action accrued; writ of execution to ensure compliance
otherwise they shall be forever barred. !! (1) Single Entry Approach (SEnA) referral
All money claims accruing prior to the effectivity of [SAVE – special assessment or visit of
this Code shall be filed with the appropriate entities establishment— DO 131A-14] or
established under this Code within one (1) year from !! (2) Complaint filed against establishment
the date of effectivity, and shall be processed or (3) Occupational Safety and Health Standards (OSHS)
determined in accordance with the implementing Investigation
rules and regulations of the Code; otherwise, they !! Using plain view, observe OSHS violations:
shall be forever barred. o! Existence of imminent danger
Workmen’s compensation claims accruing prior to o! Dangerous occurrences
the effectivity of this Code and during the period from o! Accident resorting to disabling
November 1, 1974 up to December 31, 1974, shall injury
be filed with the appropriate regional offices of the !! Could order work stoppage or a writ of
Department of Labor not later than March 31, 1975; suspension with a hearing in 24 hours to lift
otherwise, they shall forever be barred. The claims such – if it is found to be the employer’s
shall be processed and adjudicated in accordance fault, he must comply (in the meantime, the
with the law and rules at the time their causes of employees are still paid)
action accrued.
Department Order No. 131A-14
Article 307. Institution of money claims— Money Guidelines in the Conduct of Special Assessment or
claims specified in the immediately preceding Article Visit of Establishments (SAVE)
shall be filed before the appropriate entity 1.! Within 24 hours from the receipt of an order
independently of the criminal action that may be from SOLE, the RD shall issue the Authority to
instituted in the proper courts. Assess the establishment covered by the SAVE
Pending the final determination of the merits of 2.! Assessment or visit shall be conducted by the
money claims filed with the appropriate entity, no civil composite team in accordance with DO 131-
action arising from the same cause of action shall be 13
filed with any court. This provision shall not apply to 3.! In addition to the indicators in the Checklist, the
employees compensation case which shall be composite team shall loon into the ff:
processed and determined strictly in accordance with a.! Establishment Profile, with
the pertinent provisions of this Code. information on the number and
location of branches
Department Order No. 131-13 b.! Organizational structure and total
Rules on Labor Compliance System number of employees broken
down into specific employment
GOAL: Strengthen ART 128 power classifications : managerial,
Modes of Implementation: supervisory, rank and file
(1)! Joint Assessment – shall cover all private c.! Recruitment/ hiring and firing
establishments including their branches and processes
workplaces. Those with valid Tripartite Certificate
 d.! Compliance with labor laws, GLS,
OSHS
e.! Contractors/subcontractor and the
total number of employees
assigned with the principal, with
term of employment and terms of
service agreement
4.! After initial assessment, RD shall submit a
report within 72 hours to DOLE containing the
above info and preliminary determination of
compliance with labor laws
5.! In case of compliance, a certificate shall be
issued by the Regional Director with the
concurrence of the composite team members.
A copy of the certificate shall be provided to
all Regional Offices
6.! If there are gaps in compliance, a monthly
progress report shall be submitted by the RD
on the corrective actions and proceedings that
transpired and the plan of action
recommended by the composite team
7.! SAVE activity shall be concluded with a final
report detailing facts, information, statistics and
other relevant data and recommendations
essential for SOLE to determine the
establishments compliance with labor laws to
be submitted by the RD within 3 months from
the assessment
Subject to the discretion of SOLE, further proceedings
to enforce compliance with labor laws may be
conducted before the Office of the Secretary
1987 Constitution Art III.
Sec. 11. Free access to the courts and quasi-judicial
bodies and adequate legal assistance shall not be
denied to any person by reason of poverty.
Sec. 16. All persons shall have the right to a speedy
disposition of their cases before all judicial, quasi-
judicial, or administrative bodies.
CIRENEO BOWLING PLAZA INC vs. SENSING (2005)
Facts: Employees filed a complaint against CBP for
underpayment of minimum wage, 13th month pay,
holiday premiums, overtime premiums, and non-
payment of rest day.
DOLE Regional Office conducted investigations and
ordered CBP to pay P377 500 to its 13 employees. No
MR was filed.
On appeal, CBP questioned the jurisdiction of the
Regional Director because the awarded amount was
377K which is way above the 5K jurisdiction of the
Regional Director under Art 129. They alleged that the
LA has jurisdiction for claims involving an amount
exceeding 5K.
Ruling: The jurisdiction of the Regional Director was
sustained. The Regional Director was not acting under
Art 129 but under Art 128 as the duly authorized
representative of the Secretary of Labor in the exercise
of the latter’s visitorial and enforcement powers wherein
there is no limit as to the amount.
BOMBO RADYO PHILS V SOLE (2012)
Facts: Juezan filed a money claims against Bombo.
DOLE RD conducted summary investigations and found
that Juezan was entitled to his money claims. Acting
DOLE Secretary dismissed his appeal. ON appeal with
CA Bombo alleged that DOLE Secretary had no
jurisdiction.
CA ruled in favor of Bombo and held that DOLE may
make a determination of the existence of EER but this
function could not be co extensive with the visitorial
and enforcement power. NLRC is the primary agency
in determining the existence of EER.
From this, PAO filed a Motion for Clarification of
decision. The issue is whether or not DOLE may make
a determination of EER and if so, to what extent.
Ruling: Under Art. 128(b) the DOLE is fully empowered
to make a determination as to the existence of an EER
in the exercise of its visitorial and enforcement power
otherwise its visitorial and enforcement powers would
be useless and employers would just use the
convenient excuse of lack of EER to divest them of
jurisdiction. This power is parallel and not subordinate
to that of the NLRC. DOLE determination is subject to
judicial review, not review by the NLRC.
MANESE vs. JOLLIBEE FOODS CORP (2012)
Doctrine: For managerial employees, the mere
existence of the basis of the loss of trust and
confidence justifies termination. However, for rank and
file employees, substantial evidence and actual
participation is required.
Facts: Manese, Penano and Cruz were middle
managers who were terminated by Jollibee because
out of the 4500 chickenjoys they ordered in preparation
for the opening of a new branch of Jollibee in Festival
Mall, 1230 of those were declared wastage for the
opening of the branch was postponed 3x. The three
filed a complaint for illegal dismissal with claim for
separation pay, retirement benefits, unfair labor practice,
etc.
LA held that manese and Penano were legally
dismissed and not entitled to money claims but Cruz
was illegally dismissed and is entitled to separation pay
and backwages. Jollibee did not file an appeal but the
PETs did. On appeal, CA held that the all three
petitioners were legally dismissed and are not entitled
to money claims.
Ruling: CA exceeded its jurisdiction when it adjudged
that Cruz was legally dismissed, as Jollibee did not
appeal from the decision of the LA. As to Manese and
Penano, the court was correct in affirming that they
were legally dismissed. The mere existence of a a basis
for the loss of trust and confidence justifies the
dismissal of a managerial employee because when an
employee accepts a promotion to an managerial
position or to an office requiring full trust and
confidence, such employee gives up some of the rigid
guaranties available to ordinary workers.
RAUL COSARE vs. BROADCOM ASIA (2014)
Doctrine: To determine w/n the issue is intra-corporate
or not, Controversy test must be used: The controversy
must not only be rooted in the existence of an intra-
corporate relationship, but must as well pertain to the
enforcement of the parties’ correlative rights and
obligations under the Corporation Code and the internal
and intra-corporate regulatory rules of the corporation.
If the relationship and its incidents are merely incidental
to the controversy or if there will still be conflict even if
the relationship does not exist, then no intra-corporate
controversy exists.
Facts: Arevalo set up the company Broadcom and
Cosare was named an incorporator having been
assigned 100 shares of stock. The latter was promoted
as the AVP for Sales and Head of the Technical
Coordination. Cosare sent a confidential memo to
Arevalo informing him of infractions committed by th VP
for Sales of the company but instead of acting on the
complaint, Arevalo asked Cosare to tender his
resignation which he refused. A memo was given to
Casare charging him of serious misconduct and from
then, Cosare was prevented from entering the premises
so he filed a complaint for illegal dismissal with money
claim
LA ruled in favor of Broadcom. NLRC reversed and
favored Cosare.
ON appeal, Broadcom alleged that the case involved
an intra-corporate issue which is within the jurisdiction
of RTC and not LA because the complaint was filed a
stockholder and corporate officer of Broadcom.
Ruling: Cosare was illegally dismissed and his being a
“stockholder” was merely incidental. The case is not
intra-corporate because Cosare was neither a real
stockholder or investor but merely a stockholder in
name. To be properly declared a corporate officer: 1.)
The position must be created under the corporation’s
charter or by laws and 2.) one must be elected by the
directors or stockholders. IN this case, the bylaws only
created the positions for Pres, VP, Treasurer and
Secretary and Cosare was not elected to his position.
Therefore LA had the original jurisdiction over the
complaint.
C. WORK RELATIONSHIP
1. Employer And Employee Relationship
a. Definition Of Employer And Employee
Art. 97. Definitions—
(a) "Person" means an individual, partnership,
association, corporation, business trust, legal
representatives, or any organized group of persons.
(b) "Employer" includes any person acting directly or
indirectly in the interest of an employer in relation to
an employee and shall include the government and
all its branches, subdivisions and instrumentalities, all
government-owned or controlled corporations and
institutions, as well as non-profit private institutions,
or organizations.
(c) "Employee" includes any individual employed by
an employer.
Art 173. Definition of Terms—
 (f) "Employer" means any person, natural or juridical,
employing the services of the employee.
(g) "Employee" means any person compulsorily
covered by the GSIS under Commonwealth Act
Numbered One hundred eighty-six, as amended,
including the members of the Armed Forces of the
Philippines, and any person employed as casual,
emergency, temporary, substitute or contractual, or
any person compulsorily covered by the SSS under
Republic Act Numbered Eleven hundred sixty-one,
as amended.
(h) "Person" means any individual, partnership, firm,
association, trust, corporation or legal representative
thereof.
Art 219. Definitions—
(e) "Employer" includes any person acting in the
interest of an employer, directly or indirectly. The term
shall not include any labor organization or any of its
officers or agents except when acting as employer.
(f) "Employee" includes any person in the employ of
an employer. The term shall not be limited to the
employees of a particular employer, unless the Code
so explicitly states. It shall include any individual
whose work has ceased as a result of or in
connection with any current labor dispute or because
of any unfair labor practice if he has not obtained any
other substantially equivalent and regular
employment.
b. Factors/Tests
4 FOLD TEST:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the employer’s power to control the employee’s
conduct.
-The most important element is the employer’s
control of the employee’s conduct, not only as to
the result of the work to be done, but also as to
the means and methods to accomplish it.
SY vs. CA (2003)
Doctrine: The elements to determine the existence of
an employment relationship: 4 fold test (above)
Facts: Sahot, has been working as a truck driver of
Paulino Trucking Service for 36 years. He filed a
week long leave to be medically examined and
treated for several diseases including UTI,
Osteoarthritis, and heart enlargement. At the end of
the week long leave, he applied for extension but he
was threatened that his employment will be
terminated if he refused to go back to work. Sahot
failed to go back to work as his left thigh was hurting
so he was terminated
Ruling: Sahot was an employee. Aside from the
absence of the written agreement to prove the
partnership between the parties, the 4 fold test to
determine EER were present. PETs determined
Sahot’s wages and rest day, and the control test was
evident as they decided the what, when and where
of his work and Sahot merely followed the
instructions of PET.
As for the dismissal, Sahot was illegally dismissed.
Allthough disease is included in the grounds for
termination under Art 284, PET did not comply with
the medical certificate requirement before Sahot’s
dismissal was effected.
CHAVEZ vs. NLRC (2005)
Facts: Chavez, company plant manager of the
company, filed a complaint for regularization with LRC
to avail himself of the benefits that regular employees
were receiving. Before the case can be heard, PET
was terminated from work. Chavez filed a complaint
for illegal dismissal. Respondents denied the
existence of EER averring that Chavez was an
independent contractor and presented a service
contract
Ruling: Chavez was an employee as the four fold test
was satisfied and RESPs failed to prove any valid
cause for the Chaves’ dismissal
First. it was respondents who engaged the services
rd
of Chavez without the intervention of a 3 party
Second. wages came from the employees. The per
trip basis is insignificant because it was just a way to
compute compensation.
Third. The power to dismiss was inherent in the fact
that they engaged in the services of Chavez as a
truck driver and they exercised this power by
terminating PET in the guise of severance of the
contractual relation.
Fourth. The control test was met because the truck
belonged to the company, there was an instruction
that the truck will only be used to deliver the RESP’s
goods, RESP directed PET to park in 2 specific
spaces only and RESP determined how, where and
when PET would perform his task by issuing him gate
passes and routing slips.
SOUTH EAST INTERNATIONAL RATTAN, INC vs. JJ
COMING (2014)
Doctrine: In resolving the issue of whether such
relation exists, substantial evidence is sufficient. No
particular form of evidence is required to prove the
existence of the relationship, and any competent and
relevant evidence to prove the relationship must be
admitted.
Facts: JJ Coming filed a complaint for illegal
dismissal, among others, against Petitioner SEIRI. He
worked as a sizing machine operator, at first being
paid on a pakiao basis, later on paid weekly. Without
any reason, his employment was interrupted and he
was told his work would resume in 2 months. After
said period, he reported back to work upon order of
the management.
After a few years, he was dismissed without lawful
cause. He was told that he was being terminated
because the company was not doing well financially
and that he would be called back if his services were
needed again.
SEIRI denied that JJ was their employee. They argue
that he failed to present any pay slip or payroll
showing that he rendered service during the alleged
period. He also is not on the list of employees
reported to SSS.
Ruling: An employer-employee relationship existed
between the company and JJ Coming. In resolving
the issue of whether such relation exists, substantial
evidence – that amount of relevant evidence that a
reasonable mind might accept as adequate to justify
a conclusion – is sufficient. No particular form of
evidence is required to prove the existence of the
relationship, and any competent and relevant
evidence to prove the relationship must be admitted.
The fact that a worker is not reported as an employee
to the SSS is not conclusive proof of the absence of
an employer-employee relationship. Nor does the
fact that JJ Coming’s name did not appear in the
payrolls negate the existence of the relationship. The
copies of payrolls presented by the company as
evidence are only for the years of 1999 and 2000 –
they do not cover the entire period JJ Coming was
working for the company.
TESORO vs. MANILA RETREADERS, INC (BANDAG)
(2014)
Petitioners quit their jobs as salesmen for Bandag
and entered into service franchise agreements (SFAs)
with the same company to operate their own
franchises. Under their SFAs, Bandag would provide
funding support to the petitioners subject to a regular
liquidation of their revolving funds.
After some time, petitioners began to default on their
obligation to submit periodical liquidations on
operational expenses in relation to the funds Bandag
provided them. Bandag then terminated their SFAs.
Petitioners filed a complaint for constructive dismissal,
arguing that notwithstanding the SFAs, they were still
Bandag’s employees.
Ruling: There is no employer-employee relationship.
Uniformity in prices, quality of services, and good
business practices are the essence of all franchises.
The franchisors may impose guidelines (retaining the
right to adjust the price rates of products and the
power to suspend petitioners’ services for failure to
meet service standards) that are needed to maintain
collective responsibility and reliable service. It is not
the control contemplated in employer-employee
relationships. The important factor to consider is still
the element of control over how the work itself is
done, not just its end result.
Leonen, dissent: The terms of the SFA were skewed
in favor of the company. The great degree of control
of control made petitioners their employees.
BEGINO, ET AL vs. ABS CBN CORP (2015)
 Doctrine: If the employee has been performing the
job for at least one year, even if the performance is
not continuous or merely intermittent, the repeated or
continuing performance is sufficient evidence of
necessity.
Facts: Petitioners were employed by the ABS CBN
Corp. as cameramen/editors for TV broadcasting.
Their engagements were covered by talent contracts
that stipulated their employment periods, which
ranged from three months to one year, and were
regularly renewed over the years.
Although their contracts stated that nothing therein
would be construed to establish an employer-
employee relationship between the parties, they had
to perform their work in accordance with the
company’s standards. Their pay was described as
talent fees and deducted a contractor’s tax.
Claiming regular employment status, they a complaint
with the NLRC for regularization, among others.
Ruling: Petitioners are regular employees of ABS
CBN. The assertion in the contract that there be no
employer-employee relationship between the parties
does not necessarily prevent a regular employment
status.
It is immaterial that their services were only engaged
for specific periods. The fact remains that they were
continuously re-hired over the years. This shows that
they were necessary and desirable to the business.
Also, the company exercised a great degree of
control over their work.
a.! Evidence of employee status
No particular form is required.
Quantum of proof: Substantial evidence
TENAZAS vs. VILLEGAS TAXI TRANSPORT (2014)
Doctrine: No particular form of evidence is required
to prove the existence of an employer-employee
relationship. Any competent and relevant evidence to
prove the relationship may be admitted. The quantum
of proof necessary is substantial evidence.
Facts: Petitioner taxi drivers allege they were illegally
dismissed. The CA adjudged two of the three drivers
to be employees by the Court due to the evidence
they submitted (affidavits, pictures of them in uniform,
SSS records), but the last one, Francisco, was not
considered an employee because he failed to prove
that fact with competent and relevant evidence. It is
incumbent upon the employee to prove employment
with substantial evidence. Any evidence can be
submitted, such as ID’s, vouchers, letters, resignation
documents, payrolls, personnel lists, organization
charts, contracts, etc.
Ruling: There was no employer-employee
relationship. 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. Any competent and
relevant evidence to prove the relationship may be
admitted.
As Francisco was claiming to be an employee, it is
incumbent upon him to prove such by substantial
evidence. Mere allegation and utter lack of evidence
and substantial proof cannot give merit to his claim.
b.! Burden of proving employer-employee relationship
Burden is usually on the one claiming.
Prof Battad: To prove EER- Employee; to prove valid
dismissal- Employer
BITOY JAVIER vs. FLYACE CORPORATION
Doctrine: The onus probandi falls on petitioner to
establish or substantiate such claim by the requisite
quantum of evidence. Whoever claims entitlement to
the benefits provided by law should establish his or
her right thereto.
Facts: Javier filed a complaint for illegal dismissal
against Fly Ace, alleging he was a regular employee
working as a stevedore/pahinante when he was
refused entrance into the premises and was thus
terminated without notice. Fly Ace argues that they
contracted the services of Javier as an extra helper
on a pakyaw basis and that Javier’s services were
no longer needed.
Ruling: Javier was not a regular employee of Fly Ace.
The petitioner failed to show by substantial evidence
 that he was indeed an employee of the company
against which he claims illegal dismissal. All that
Javier presented were self-serving statements, an
affidavit by his supposed co-employee, purportedly
showing his activities as an employee of Fly Ace.
c.! Piercing the veil of corporate entity
Sarona Doctrine:
1) defeat of public convenience as when it is used as a
vehicle for the evasion of an existing obligation;
2) fraud cases or when the corporate entity is used to
justify a wrong, protect fraud, or defend a crime; or
3) alter ego cases, where a corporation is merely a farce
since it is a mere alter ego or business conduit of a
person, or where it is merely an instrumentality, agency,
conduit or adjunct of another corporation.
PAMPLONA PLANTATION CO., INC. vs. TINGHIL
(2005)
Doctrine: The principle requiring the piercing of the
corporate veil mandates courts to see through the
protective shroud that distinguishes one corporation
from a seemingly separate one. The notion of
separate legal entity should be set aside (1) where
badges of fraud exist, (2) where public convenience
is defeated, (3) where a wrong is sought to be
justified thereby, or (4) where a separate corporate
entity is used to evade financial obligations to
employees or to third parties.
Facts: Pamplona Plantation Co. (Pamplona) was
organized to take over the operations of the
plantations of Hacienda Pamplona. Pamplona
Plantation Leisure Company (Pamplona Leisure) was
established later on to render entertainment and
leisure services. Tinghil, et al. were union members
hired by Pamplona during the harvest season.
Pamplona’s labor union conducted a meeting and
upon learning that respondents attended said
meeting, Bondoc, manager of Pamplona, did not
allow the respondents to work in the plantation.
Respondents filed complaints in the NLRC against
Pamplona for illegal dismissal, among other claims.
The NLRC ruled that the respondents failed to
implead Pamplona Leisure, an indispensable party,
since in their individual Complaints, respondents
specifically averred that they had worked in the golf
course and performed related jobs in the recreational
facilities of the leisure corporation
Ruling: The corporate mask may be removed and the
corporate veil pierced when a corporation is the mere
alter ego of another.
In this case, the corporations have the same
incorporators and directors and are headed by the
same official. Respondents received their pay and
worked under the control of the common managing
director of both the petitioner-company and the
leisure corporation. Some of the laborers of the
plantation also work in the golf course.
SARONA vs. NLRC (2012)
Doctrine: The doctrine of piercing the corporate veil
applies only in three (3) basic areas, namely: 1)
defeat of public convenience as when it is used as
a vehicle for the evasion of an existing obligation; 2)
fraud cases or when the corporate entity is used to
justify a wrong, protect fraud, or defend a crime; or
3) alter ego cases, where a corporation is merely a
farce since it is a mere alter ego or business conduit
of a person, or where it is merely an instrumentality,
agency, conduit or adjunct of another corporation.
Facts: Sarona was asked to resign from Sceptre and
then sign on at Royale. Sarona was then assigned to
Highlight Metal, and then was transferred to WWWE,
Inc.
Petitioner was then informed that his assignment at
WWWE had been withdrawn because Royale had
allegedly been replaced by another security agency.
He then discovered Royale was never replaced as
WWWE’s security agency. Sarona was again
assigned to Highlight Metal and then, soon after, was
dismissed.
Sarona then filed a complaint for illegal dismissal. The
NLRC ruled that since Sarona only worked for Royale
for a month, his backwages should be limited to only
three months.

Ruling: Royale’s corporate fiction should be pierced
for the purpose of compelling it to recognize Sarona’s
length of service with Sceptre and for holding it
For reasons of public policy and in the interest of
justice, the corporate veil will justifiably be impaled
only when it becomes a shield for fraud, illegality or
inequity committed against third persons.
Royale is a continuation or successor of Sceptre.
Both companies had the same place of business;
Aida Tan controlled both; moreover, Royale claimed
the right o the cash bond posted by Sarona when
the latter first applied to Sceptre.
2. Independent Contractor and Labor-only Contractor
Art. 106. Contractor or subcontractor. Whenever an
employer enters into a contract with another person
for the performance of the former’s work, the
employees of the contractor and of the latter’s
subcontractor, if any, shall be paid in accordance with
the provisions of this Code.
In the event that the contractor or subcontractor fails
to pay the wages of his employees in accordance
with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to
such employees to the extent of the work performed
under the contract, in the same manner and extent
that he is liable to employees directly employed by
him.
The Secretary of Labor and Employment may, by
appropriate regulations, restrict or prohibit the
contracting-out of labor to protect the rights of
workers established under this Code. In so
prohibiting or restricting, he may make appropriate
distinctions between labor-only contracting and job
contracting as well as differentiations within these
types of contracting and determine who among the
parties involved shall be considered the employer for
purposes of this Code, to prevent any violation or
circumvention of any provision of this Code.
There is “labor-only” contracting where the person
supplying workers to an employer does not have
substantial capital or investment in the form of tools,
equipment, machineries, work premises, among
others, and the workers recruited and placed by such
person are performing activities which are directly
related to the principal business of such employer. In
such cases, the person or intermediary shall be
considered merely as an agent of the employer who
shall be responsible to the workers in the same
manner and extent as if the latter were directly
employed by him.
Art. 107. Indirect employer— The provisions of the
immediately preceding article shall likewise apply to
any person, partnership, association or corporation
which, not being an employer, contracts with an
independent contractor for the performance of any
work, task, job or project.
Art. 109. Solidary liability— The provisions of existing
laws to the contrary notwithstanding, every employer
or indirect employer shall be held responsible with
his contractor or subcontractor for any violation of
any provision of this Code. For purposes of
determining the extent of their civil liability under this
Chapter, they shall be considered as direct
employers.
a.! Trilateral Relationship; Requirements for Independent
Contractor
3 parties:
1. Principal- Employer who decides to farm out a job,
work or service to a contractor
2. Contractor- refers to any person or entity, including a
cooperative, engaged in a legitimate contracting or
subcontracting arrangement providing either services,
skilled worker, temporary workers or a combination of
services to a principal under a Service Agreement.
3. Contractor’s employee- includes one employed by a
contractor to perform or complete a job, work, or service
pursuant to a Service Agreement with a principal
It shall also refer to regular employees of the contractor
whose functions are not dependent on the performance
or completion of a specific job, work or service within a
definite period of time i.e. administrative staff.
Department Order No. 18-A-11
Section 3. Definition of terms— The following terms
as used in these Rules, shall mean:

(m) “Trilateral Relationship” refers to the relationship
in a contracting or subcontracting arrangement where
there is a contract for a specific job, work or service
between the principal and the contractor, and a
contract of employment between the contractor and
its workers. There are three (3) parties involved in
these arrangements: the principal who decides to
farm out a job, work or service to a contractor; the
contractor who has the capacity to independently
undertake the performance of the job, work or
service; and the contractual workers engaged by the
contractor to accomplish the job, work or service.
Department Order No. 18-A-11
Section 5. Trilateral relationship in contracting
arrangements; Solidary liability— In legitimate
contracting or subcontracting arrangement there
exists:
(a) An employer-employee relationship between the
contractor and the employees it engaged to perform
the specific job, work or service being contracted;
and
(b) A contractual relationship between the principal
and the contractor as governed by the provisions of
the Civil Code.
In the event of any violation of any provision of the
Labor Code, including the failure to pay wages, there
exists a solidary liability on the part of the principal
and the contractor for purposes of enforcing the
provisions of the Labor Code and other social
legislation, to the extent of the work performed under
the employment contract.
However, the principal shall be deemed the direct
employer of the contractor’s employee in cases
where there is a finding by a competent authority of
labor-only contracting, or commission of prohibited
activities as provided in Section 7, or a violation of
either Sections 8 or 9 hereof.
Department Order No. 174-17
Section 3. Definition of terms— The following terms,
as used in these Rules, shall mean:
a “Bond”- refers to the bond under Art. 108 of the
Labor Code that the principal may require from the
contractor to be posted equal to the cost of labor
under contract.
c. “Contracting” or “Subcontracting”- refers to a
person or group of persons or to a labor group
which, under the guise of a labor organization,
cooperative, or any entity, supplies workers to an
employer, with or without any monetary or other
consideration, whether in the capacity of an agent
of the employer or as an ostensible independent
contractor.
d. “Contractor” - refers to any person or entity
engaged in a legitimate contracting or
subcontracting arrangement providing services for a
specific job or undertaking farmed out by principal
under a Service Agreement.
e. “Contractor’s employee” - refers to employee of
the contractor hired to perform or complete a job or
work farmed out by the principal pursuant to a
Service Agreement with the latter.
h. “Labor-only contracting” - refers to arrangement
where the contractor or subcontractor merely
recruits, supplies, or places workers to perform a
job or work for a principal, and the elements
enumerated in Section 5 hereunder are present.
j. “Service Agreement” - refers to the contract
between the principal and the contractor containing
the terms and conditions governing the
performance or completion of a specific job or work
being farmed out for a definite or predetermined
period.
k. “Solidary liability” - refers to the liability of the
principal, pursuant to the provision of Art. 109 of
the Labor Code, as direct employer together with
the contractor for any violation of any provision of
the Labor Code.
It also refers to the liability of the principal, in the
same manner and extent that he/she is liable to
his/her direct employees, to the extent of the work
performed under the contract when the contractor
fails to pay the wages of his/her employees, as
provided in Art. 106 of the Labor Code.

DO 174-17, Section 9. Solidary Liability— In the event
of violation of any provision of the Labor Code,
including failure to pay wages, there exists a solidary
liability on the part of the principal and the contractor
for purposes of enforcing the provisions of the Labor
Code and other social legislations, to the extent of
the work performed under the employment contract.
Between the principal and the independent contractor,
there is a Service Agreement which states the:
o! Specific job to be done
o! Duration of work is pre-determined
o! Substantial capital
o! Control of premises
o! Compliance to labor standards
o! Working within or outside premises
Between the Independent Contractor and the workers
there exists a Contract of Employment and an EER by
virtue of such contract
In Art. 106(2), the principal is only solidarily liable for
wages to the extent of the work performed under the
Service Agreement.
o! If the Independent Contractor is unable
to pay the wages, the employer, being
considered as the indirect employer by
virtue of the work performed, is liable.
o! Liability involved does not include
punitive (ex. Illegal dismissal, unfair
labor practice complaints, etc.)
SAN MIGUEL CORP. vs. SEMILLANO (2010)
Doctrine: Test to determine the existence of
independent contractorship is W/N the one claiming to
be an independent contractor has contracted to do the
work according to his own methods and without being
subject to the control of principal, except to the results
of the work.
Such is generally established by the ff. criteria:
(1)! W/N contractor is carrying on an independent
business
(2)! The skill required
(3)! The term and duration of the relationship
(4)! The right to assign the performance of a specified
piece of work
(5)! The control and supervision of the work of
another
(6)! Employer’s power w/ respect of hiring, firing, and
payment of wages of contractor’s workers
(7)! Control of the premises
(8)! Duty to supply premises, tools, materials, etc, and
the mode, manner, and terms of payment.
Facts: Semillano et al were hired by AMPCO to work
for San Miguel Corp’s bottling plant. After 6 months,
they were refused entry into the premises, leading them
to file a case against AMPCO and SMC. SMC argues
that AMPCO is the real employer because AMPCO is
an independent contractor. Under the service contract,
AMPCO agreed to provide the materials and equipment
needed to carry out the work and exercised exclusive
discretion over their personnel and the determination of
wages.
Ruling: AMPCO is a labor-only contractor, and the
principal (SMC) is responsible over the employees of
“labor only contractor” as if the principal itself directly
hired these employees.
Although it had an independent business (trading),
there was no substantial investment, neither were there
any tools, machineries, or supplies, actually nor directly
used to perform the work. AMPCO had no other clients
and it was SMC who had power to discharge Language
of the contract is neither determinative nor conclusive
of the relationship between the parties. AMPCO did not
exercise the power of control because it was evident
that Semillano performed the tasks assigned to him by
SMC and worked in its premises. Neither is a certificate
of registration conclusive evidence. Such is merely a
legal presumption.
 b.! Permissible Contracting or Subcontracting
Features of Independent Contractorship:
a.! Trilateral Relationship
b.! Specific job, work, or service
c.! Specific Period or duration
d.! Compliance with labor standards
*Note: having a certificate of registration from DOLE,
merely creates a legal presumption that one is an
independent contractor
Requirements for Legitimate Job Contracting:
(1) The contractor must be registered in
accordance with these rules and carries a
distinct and independent business
(2) The contractor undertakes to perform the
job, work or service on its own responsibility,
according to its own manner and method, and
free from control and direction of the principal
in all matters connected with the performance of
the work except as to the results thereof;
(3) The contractor has substantial capital
and/or investment; and
(4) The Service Agreement ensures
compliance with all the rights and benefits
under Labor laws.
DO 174-17 Section 2. Coverage. These Rules shall
apply to all parties in an arrangement where
employer-employee relationship exists.
Contractors and subcontractors referred to in these
Rules are prohibited from engaging in recruitment
and placement activities as defined in Article 13(b)
of the Labor Code, whether local or overseas
employment.
DO 174-17 Section 3. Definition of terms— The
following terms, as used in these Rules, shall mean:
(c) “Contracting” or “Subcontracting”- refers to a
person or group of persons or to a labor group
which, under the guise of a labor organization,
cooperative, or any entity, supplies workers to an
employer, with or without any monetary or other
consideration, whether in the capacity of an agent
of the employer or as an ostensible independent
contractor.
(d) “Contractor” - refers to any person or entity
engaged in a legitimate contracting or
subcontracting arrangement providing services for a
specific job or undertaking farmed out by principal
under a Service Agreement.
(i) “Principal” - refers to any natural or juridical
entity, whether an employer or not, who puts out or
farms out a job or work to a contractor.
(j) “Service Agreement” - refers to the contract
between the principal and the contractor containing
the terms and conditions governing the
performance or completion of a specific job or work
being farmed out for a definite or predetermined
period.
DO 174-17, Section 8. Permissible Contracting or
Subcontracting Arrangements. Notwithstanding
Sections 5 and 6 thereof, contracting and
subcontracting shall only be allowed if all the
following circumstances concur:
1.! The contractor or subcontractor is engaged in
a distinct and independent business and
undertakes to perform the job or work on its
own responsibility, according to its own manner
and method;
2.! The contractor or subcontractor has substantial
capital to carry out the job farmed out by the
principal on his account, manner and method,
investment in the form of tools, equipment,
machinery, and supervision;
3.! In performing the work farmed out, the
contractor or subcontractor is free from the
control and/or direction of the principal in all
matters connected with the performance of the
work except as to the result thereto; and
4.! The service Agreement ensures compliance
with all the rights and benefits for all the
employees of the contractor or subcontractor
under the labor laws.
c.! Desirable – unnecessary
No EER if “although deemed directly related to the
principal business, such services are unnecessary in the
conduct of its regular or official business. “
 COCA-COLA BOTTLERS PHIL., INC. vs. NLRC,
CANONICATO (1999)
Facts: Coca-Cola entered into a contract of janitorial
service with Bacolod Janitorial Services (BJS) as
independent contractor. They hired respondent
Canonicato first as a bottling employee then made him
work as a painter. He sought regularization with
Coca-Cola and stopped reporting for work, thus Coca-
Cola eventually barred him from entering the premises.
The LA said BJS was his real employer as a legitimate
job contractor but the NLRC reversed this saying that
Ramon’s services were necessary and desirable in the
usual trade/business of Coca-Cola, thus he was
entitled to regularization.
Ruling: Canonicato was NOT a regular employee of
Coca-Cola. Although janitorial services are directly
related to the principal business of Coca-Cola, the
Court took judicial notice of the practice of hiring
janitorial services on an “independent contractor basis.”
Although deemed directly related to the principal
business, such services are unnecessary in the conduct
of its regular or official business.
Thus, Art. 280 of the Labor Code (stating that an
employee is regular when he/she engages in activities
usually necessary and desirable in the usual business
of the employer), only applies when the EER is
established. Art. 280 is not the yardstick for determining
the existence of an employment relationship because it
merely distinguishes between two kinds of employees,
i.e., regular employees and casual employees.
Furthermore, there was an EER between respondent
and BJS because BJS was a legitimate contractor. All
elements of the 4-fold test were satisfied.
d.! Rights of contractor’s employees
DO 174-17 Section 3. Definition of terms. The following
terms, as used in these Rules, shall mean:
e. “Contractor’s employee” - refers to employee of the
contractor hired to perform or complete a job or work
farmed out by the principal pursuant to a Service
Agreement with the latter.
DO 174-17 Section 10. Rights of
Contractor’s/Subcontractor’s Employees. All
contractor’s/subcontractor’s employees, shall be
entitled to security of tenure and all the rights and
privileges as provided for in the Labor Code, as
amended, to include the following:
a) Safe and healthful working conditions;
b) Labor standards such as but not limited to service
incentive leave, rest days, overtime pay, holiday pay,
13th month pay, and separation pay;
c) Retirement benefits under the SSS or retirement
plans of the contractor/subcontractor, whichever is
higher;
d) Social security and welfare benefits; and
e) Self-organization, collective bargaining, and
peaceful concerted activities including the right to
strike.
DO 174-17 Section 11. Required Contracts under these
Rules.
a) Employment contract between the
contractor/subcontractor and its employees.
Notwithstanding any oral or written stipulations to the
contrary, the contract between the
contractor/subcontractor and its employees shall be
governed by the provisions of Articles 294 and 295 of
the Labor Code, as amended, including the provisions
on general labor standards. It shall include the following
stipulations:
i. The specific description of the job or work to be
performed by the employee; and
ii. The place of work and terms and condition of
employment, including a statement of the wage rate
applicable to the individual employee.
The contractor/subcontractor shall inform the employee
of the foregoing stipulations in writing on or before the
first day of his/her employment.
b) Service Agreement between the principal and the
contractor. The Service Agreement shall include the
following:
i. The specific description of the job or work being
subcontracted, including its term or duration;
ii. The place or work and terms and conditions
governing the contracting arrangement, to include the
agreed amount of the contracted job or work as well as
the standard administrative fee of not less than 10% of
the total contract cost; and
iii. A provision on the issuance of the bond/s as defined
in Section 3(a) renewable every year.

Section 12. Effect of Violation of the Provisions on the
Rights of Contractor’s Employees and Required
Contracts. A finding of violation of either Sections 10 or
11 hereof, shall render the principal the direct employer
of the employees of the contractor or subcontractor,
pursuant to Art. 109 of the Labor Code, as amended.
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

e.! Effect of Termination of Employment
DO 174-17, Section 13. The termination of employment
of the contractor’s/subcontractor’s employee prior to the
expiration of the Service Agreement shall be governed by
Articles 297, 298 and 299 of the Labor Code.
In case the termination of employment is caused by the
pre-termination of the SA not due to authorized causes
under Article 298, the right of
contractor’s/subcontractor’s employee to unpaid wages
and other unpaid benefits, including unremitted legal
mandatory contributes, e.g. SSS, PhilHealth, Pag-IBIG,
ECC, shall be borne by the party at fault, without prejudice
to the solidary liability of the parties to the Service
Agreement.
Where the termination results from the expiration of the
SA, or from the completion of the phase of the job or
work for which the employee is engaged, the latter may
opt to wait for re-employment within three (3) months to
resign and transfer to another contractor-employer.
Failure of the contractor to provide new employment for
the employee shall entitle the latter to payment of
separation benefits as may be provided by law or the SA,
whichever is higher, without prejudice to
entitlement to completion bonuses or other emoluments,
including retirement benefits whenever applicable. The
mere expiration of the SA shall not be deemed as a
termination of employment of the
contractor’s/subcontractor’s employees who are regular
employees of the latter.
f.! Labor-only contractor is declared prohibited
Elements of Labor-Only Contracting:
(a) (1) The contractor does not have substantial
capital or investments in the form of tools,
equipment, machineries, work premises, among
others, and (2) The employees recruited and
places are performing activities which are
(b) The contractor does not exercise the right to
control the performance of the work of the
employee.
Substantial capital – paid-up capital stock/shares at
least five million pesos (P5,000,000.00) in the case of
corporations, partnerships and cooperatives; in the case
of single proprietorship, a net worth of at least five
the million pesos (P5,000,000.00).
DO 174-17 Section 1. Guiding Principle. Non-permissible
forms of contracting and subcontracting arrangements
undermine the Constitutional and statutory right to
security of tenure of workers.
DO 174-17 Section 3. Definition of terms. The following
terms, as used in these Rules, shall mean:
h. “Labor-only contracting” - refers to arrangement
where the contractor or subcontractor merely recruits,
supplies, or places workers to perform a job or work for
a principal, and the elements enumerated in Section 5
hereunder are present.
l. “Substantial capital” - refers to paid-up capital
his/her
stock/shares at least five million pesos (P5,000,000.00)
in the case of corporations, partnerships and
cooperatives; in the case of single proprietorship, a net
worth of at least five million pesos (P5,000,000.00).
DO 174-17 Section 4. Regulation of Contracting or
Subcontracting. The Secretary of Labor and Employment
shall regulate contracting and subcontracting
arrangement by absolutely prohibiting labor-only
contracting, and restricting job contracting allowed under
the provisions of the Labor Code, as amended.
DO 174-17 Section 5. Absolute Prohibition against
Labor-Only Contracting. Labor-only contracting, which
is totally prohibited, refers to an arrangement where:
a) i. The contractor or subcontractor does not have
 substantial capital, or
ii. The contractor or subcontractor does not have
investments in the form of tools, equipment,
machineries, supervision, work premises, among
others, and
iii. The contractor’s or subcontractor’s employees
recruited and placed are performing activities which
are directly related to the main business operation of
the principal; or
b) The contractor or subcontractor does not exercise
the right to control over the performance of the work
of the employee.
DO 174-17 Section 8. Permissible Contracting or
Subcontracting Arrangements. Notwithstanding Sections
5 and 6 thereof, contracting and subcontracting shall
only be allowed if all the following circumstances concur:
a) The contractor or subcontractor is engaged in a
distinct and independent business and undertakes to
perform the job or work on its own responsibility,
according to its own manner and method;
b) The contractor or subcontractor has substantial capital
to carry out the job farmed out by the principal on his
account, manner and method, investment in the form of
tools, equipment, machinery, and supervision;
c) In performing the work farmed out, the contractor or
subcontractor is free from the control and/or direction of
the principal in all matters connected with the
performance of the work except as to the result thereto;
and
d) The service Agreement ensures compliance with all
the rights and benefits for all the employees of the
contractor or subcontractor under the labor laws.
Dept. Advisory No. 10-16 Section 2. Declaration of labor-
only contracting; Effect. - Pursuant to Art. 128 of the Labor
Code of the Philippines, as amended, and existing
jurisprudence, Regional Directors shall have authority to
declare the existence of labor-only contracting between
the contractors and subcontractors, and the principals.
Workers of labor-only contractor/subcontractor are
considered employees of the principal.
Dept. Advisory No. 10-16 Section 1. Prohibition against
labor-only contracting - Labor only contracting shall
be declared prohibited. For this purpose, labor-only
contracting shall refer to an arrangement where the
contractor or subcontractor merely recruits, supplies,
or places workers to perform a job, work, or service
for a principal, and the following elements are present:
a) The contractor or subcontractor does not have
substantial capital or investment in the form of tools,
equipment, machineries, work premises, among
others, and the workers recruited and placed by such
person are performing activities which are directly
related to the principal business of such employer. In
such cases, the person or intermediary shall be
considered merely as an agent of the employer who
shall be responsible to the workers in the same
manner and extent as if the latter were directly
employed by him; or
b) The contractor does not exercise the right of
control over the performance of the work of the
employee.
Is LOC prohibited by the Labor Code? No. The Secretary
of Labor MAY prohibit it. It is prohibited by DO 18-A-11
Labor-only contracting is not really contracting because it
is just an arrangement to recruit people to be employed,
supervised, and paid by another.
o! LOC = EE + any CE
1.! Essential element: the arrangement is merely to
recruit, supply, or place workers to perform a job,
work, or service for a principal.
2.! Confirming elements:
1.! Lack of substantial capital or investment AND
employees recruited are performing activities
which are usually necessary or desirable or
directly related to the operation of the company.
2.! Contractor does not have right to control the
performance of the work.
3.! *Note: If found to be LOC, contractor shall be
merely an agent, the principal is considered as
direct employer and is solely liable.
POLYFOAM-RGC INTERNATIONAL CORP. vs.
CONCEPCION (2012)
Doctrine: The test of independent contractorship is
whether or not contractor was contracted to do work
according to its own means and methods without being
subject to the control of the employer, except as to the
results, all circumstances considered.
The presumption is that a contractor is a labor-only
contractor unless he proves otherwise.
Facts: Concepcion worked for Polyfoam as a factory
worker for six years but was dismissed due to
infractions of company rules. When he filed a complaint
for illegal dismissal against the company, PA Gramaje
Employment Services (PAGES) filed a Motion to
Intervene, claiming to be Concepcion’s real employer.
Ruling: PAGES is a labor-only contractor, not an
independent job contractor. PAGES failed to adduce
evidence of substantial capital/investment
ownership of tools, machineries, etc. The presumption
is that a contractor is a labor-only contractor unless he
overcomes the burden of proving hat it has substantial
capital, investments, and the like. PAGES also failed to
prove that it conducted its own independent business
because its only role was to recruit for Polyfoam.
Thus, there was an EER between Polyfoam and
Concepcion because the finding that a contractor is an
LOC is tantamount to declaring there is an EER between
principal and employee. LOC is a mere agent.
PETRON v CABERTE (2015)
DOCTRINE: The law presumes a contractor to be
labor-only and the employees are not expected to
prove the negative fact, the burden is on the
employer. In order for legitimate job contracting or
subcontracting the following must occur:
•! Contractor carries on distinct and
independent business and works under his
own responsibility free of control
direction from principal in all matters of
performance except to the results thereof.
•! Contractor has substantial capital
investment
•! The agreement between principal
contractor assures contractual employees’
entitlement to labor standards and labor
relations.
FACTS: Respondents were employees of the Petron
Corporation. From 1996-1999, Petitioner corporation
entered into a contract with ABC, a labor-contracting
business, wherein ABC was to provide utility and
maintenance services to Petron. Upon the termination
of this contract, the respondents were dismissed.
RULING: ABC is a labor-only contractor because
there was no showing that ABS has substantial capital
or investment and the jobs of the employees were
directly related to Petron’s main business and were
employed for many years. The dismissal was illegal
as the employer may only terminate regular
employees for just and authorized causes under Art.
279 of the Labor Code.
QUINTANAR V. COCA COLA BOTTLERS (2016)
and DOCTRINE: In determining whether an employment
should be considered regular or non-regular, the
applicable test is the reasonable connection between
the particular activity performed by the employee in
relation to the usual business or trade of the
employer.
FACTS: Complainants employed by Coca Cola
Bottlers Philippines Inc. as Route Helpers, distributing
bottles to stores. They were allegedly transferred as
agency workers to different manpower agencies,
including respondent Interserve Management and
Manpower Resources in. DOLE conducted an
inspection of CCBPI and found out that it was not
complying with the mandated labor standards.
RULING: The repeated rehiring of respondent workers
and the continuing need for their services attest to
the necessity or desirability of their services in the
regular conduct of the business or trade of petitioner
company. CCBPI failed to demonstrate how
respondent employees were that of Interserve’s and
not theirs. Even if the Court would indulge CCBPI and
admit that Interserve had more than sufficient capital
and
or investment in the form of tools, equipment,
machineries, work premises, still, the petitioners were
performing activities which were directly related to the
or
principal business of such employer (Coca-Cola).
Therefore, the petitioners were made to suffer under
and
the prohibited practice of labor-only contracting.
g. Registration of Contractor
DO No. 174-17
(Rules Implementing Articles 106 to 109 of the Labor
Code, As Amended)
Section 14. Mandatory Registration and Registry of
Legitimate Contractors. Consistent with the authority of
the Secretary of Labor and Employment to restrict or
prohibit the contracting out of labor to protect the
rights of workers, it shall be mandatory for all persons
or entities, including cooperatives, acting as
contractors to register with the Regional Office of the
Department of Labor and Employment (DOLE) where
it principally operates.
Failure to register shall give rise to the presumption
that the contractor is engaged in labor-only
contracting.
Accordingly, the registration system governing
contracting arrangements and implemented by the
Regional Offices of the DOLE is hereby established,
with the Bureau of Working Conditions (BWC) as the
central registry.
Section 20. Validity of Certificate of Registration. The
contractor shall be deemed registered only on the
date of issuance of its Certificate of Registration.
The Certificate of Registration shall be effective for 2
years, unless cancelled after due process. The same
shall be valid in the region where it is registered.
In case the contractor has Service Agreements or
operates outside the jurisdiction of the Regional Office
where it is registered, it shall request a duly
authenticated copy of its Certificate of Registration
from the registering Regional Office and submit the
same to the DOLE Regional Office where it seeks to
operate together with a copy of its Service
Agreement/s in the area, for purposes of monitoring
compliance with these Rules.
Section 23. Grounds for Cancellation of Registration.
The Regional Director shall upon a verified complaint,
cancel or revoke the registration of a contractor after
due process, based on any of the following grounds:
a. Misrepresentation of facts in the application
b. Submission of falsified or tampered application or
supporting documents to the application of registration
c. Non-submission of Service Agreement between the
principal and the contractor when required to do so
d. Non-submission of the required semi-annual
report as provided in Section 22 (Semi-Annual
reporting) thereof
e. Final findings that the contractor has engaged in
labor-only contracting and/or other illicit forms of
employment arrangements as provided in Section 6
hereof
f. Non-compliance with labor standard an working
conditions
g. Findings of violation of Section 10 (Rights of
contractor’s employees) and Section 11 (Required
contracts)
h. Non-compliance with SS, the HDMF, Pag-IBIG,
PhilHealth, and ECC Laws
i. Collecting any fees not authorized by law and other
applicable rules and regulations and
j. Violations of any provisions of the Labor Code
SECTION 24. Complaint/s based on any of the
grounds enumerated in the preceding Section against
the contractor shall be filed in writing and under oath
with the Regional Office which issued the Certificate of
Registration.
The complaint/s shall state the ff:
•! Name/s and address/es of the complainant/s
•! Name and address of the contractor
•! Grounds
•! When and where the action complained of
happened
•! Amount of claim, if any
•! Relief sought
Upon receipt of the complaint, the Regional Director
shall direct, with notice to the complainant to file a
verified answer/counter affidavit within 7 working days
without extension, incorporating therein all pertinent
documents in support of his/her defense, with proof
of service of a copy to the complainant. Failure to file
an answer/counter affidavit shall constitute a waiver
on the part of the respondent. No motion to dismiss
shall be entertained.
The Regional Director or his or her duly authorized
representative may conduct a clarificatory hearing
within 7 calendar days within which to file a verified
answer/counter affidavit. Within the said 7 day period,
the contractor shall make necessary
corrections/rectifications on the violations that are
immediately rectifiable upon its initiative in order to be
fully compliant.
The Regional Director may avail himself of all
reasonable means to ascertain the facts of the case,
including conduct of inspection, where appropriate,
and examination of informed persons. The
proceedings before the Regional Office shall be
summary in nature.
The conduct of hearings shall be terminated within 10
calendar days from the first scheduled clarificatory
hearing. The Regional Director shall resolve the case
within 7 working days from the date of the last
hearing. If there is no necessity to conduct a hearing,
the case shall be resolved within 7 days from receipt
of the verified answer/counter affidavit. Any motion for
reconsideration from the Order of the Regional
Director shall be treated as an appeal.
SECTION 25. The Order of the Regional Director is
appealable to the Secretary within 10 working days
from receipt of the copy of the Order. The appeal
shall be filed with the Regional Office which issued
the cancellation Order. The Office of the Secretary
shall have 30 working days from receipt of the
records of the case to resolve the appeal. The
decision of the Secretary shall be final and executory
after 10 days from the receipt thereof by the parties.
No motion for reconsideration of the Decision shall be
entertained.
SECTION 26. A final Order of cancellation shall divest
the contractor of its legitimate status to engage in
contracting/subcontracting. Such Order of cancellation
shall be a ground to deny registration and application
for renewal of registration to a contractor under the
Rules.
No contractor whose registration is cancelled under
these Rules or any of its officers shall be allowed to
operate, and apply for new registration as contractor
under either the same or different name. The
cancellation of the registration of the contractor for
engaging in labor-only contracting or for violation of
any of the provisions of these Rules involving a
particular service agreement will not, however, impair
the validity of existing legitimate job-contracting
arrangements the contractor may have entered into
with other principals prior to the cancellation of its
registration. Any valid and subsisting Service
Agreement shall be respected until its expiration;
thereafter, contracting with a delisted contractor shall
make the principal direct employer of all employees
under the Service Agreement pursuant to Articles 106
and 109 of the Labor Code.
h. Other Prohibitions
DO No. 174-17
Section 3. Definition of terms—
(b) “Cabo”- refers to a person or group of persons
or to a labor group which, under the guise of a labor
organization, cooperative or any entity, supplies
workers to an employer, with or without any monetary
or other consideration, whether in the capacity of an
agent of the employer or as an ostensible
independent contractor.
(f) “In-house agency”- refers to a contractor which is
owned, managed, or controlled directly or indirectly
by the principal or one where the principal owns/
represents any share of stock, and which operates
solely or mainly for the principal.
(g) “In-house cooperative”- refers to a cooperative
which is managed or controlled directly or indirectly
by the principal or one where the principal, or any of
its officers owns/ represents any equity or interest,
and which operates solely or mainly for the principal.
Section 6. Other Illicit Forms of Employment
Arrangements— In addition to Section 5 of these
Rules, the following are hereby declared prohibited
for being contrary to the law or public policy:
a)! When the principal farms out work to a
“Cabo”
b)! Contracting out of job or work through an
in-house agency.
c)! Contracting out of job or work through an
in-house cooperative which merely
supplies workers to the principal.
d)! Contracting out of job or work by reason
of a strike or lockout whether actual or
imminent.
e)! Contracting out of job or work being
performed by union members and such
will interfere with, restrain or coerce
employees in the exercise of their rights to
 self-organization as provided in Article 259
of the Labor Code, as amended.
f)! Requiring the contractor’s/subcontractor’s
employees to perform functions which are
currently being performed by the regular
employees of the principal.
g)! Requiring the contractor’s/subcontractor’s
employees to sign, as a precondition to
employment or continued employment, an
antedated resignation letter; a blank payroll;
a waiver of labor standards including
minimum wages and social or welfare
benefits; or a quitclaim releasing
principal or contractor from liability as to
payment of future claims; or require the
employee to become a member of a
cooperative.
h)! Repeated hiring by
contractor/subcontractor of employees
under an employment contract of short
duration.
i)! Requiring employees under
contracting/subcontracting arrangement to
sign a contract fixing the period of
employment to a term shorter than the term
of the Service Agreement, unless the
contract is divisible into phases for which
substantially different skills are required and
this is made known to the employee at the
time of engagement.
j)! Such other practices, schemes
employment arrangements designed to
circumvent the right of workers to security of
tenure.
Section 12. Effect of Violation of the Provisions on the
Rights of Contractor’s Employees and Required
Contracts. A finding of violation of either Sections 10
or 11 hereof, shall render the principal the direct
employer of the employees of the contractor or
subcontractor, pursuant to Article 109 of the Labor
Code, as amended.
i. Solidary Liability of Indirect Employer/ Direct Employer
Department Order No. 174-17
(Rules Implementing Articles 106 to 109 of the
Labor Code, As Amended)
Section 3. Definition of terms
(k) “Solidary liability” refers to the liability of the
principal, pursuant to the provisions of Article 109 of
the Labor Code, as direct employer together with the
contractor for any violation of any provision of the
Labor Code.
It also refers to the liability of the principal, in the
same manner and extent that he/she is liable to
his/her direct employees, to the extent of the work
performed under the contract when the contractor
fails to pay the wages of his/her employees, as
provided in Article 106 of the Labor Code, as
the amended.
Section 9. Solidary Liability. In the event of violation
of any provision of the Labor Code, including the
failure to pay wages, there exists a solidary liability
the on the part of the principal and the contractor for
purposes of enforcing the provisions of the Labor
Code and other social legislations, to the extent of
the work performed under the employment contract.
a
Section 10. Rights of Contractor’s/ Subcontractor’s
Employees. All contractor’s/ subcontractor’s
employees, shall be entitled to security of tenure and
all the rights and privileges as provided for in the
Labor Code, as amended, to include the following:
a)! Safe and healthful working conditions;
b)! Labor standards such as but not limited to
service incentive leave, rest days, overtime
th
or pay, holiday pay, 13 month pay, and
separation pay;
c)! Retirement benefits under the SSS or
retirement plans of the contractor/
subcontractor;
d)! Social Security and welfare benefits; and
e)! Self-organization, collective bargaining and
peaceful concerted activities including the
right to strike.
Section 12. Effect of Violation of the Provisions on the
Rights of Contractor’s Employees and Required
Contracts— A finding of violation of either Sections
10 or 11 hereof, shall render the principal the direct
employer of the employees of the contractor or
subcontractor, pursuant to Article 109 of the Labor
Code, as amended.
Section 27. Retaliatory Measures— Pursuant to Article
118 of the Labor Code, as amended, it shall be
unlawful for the principal, contractor, or any party
privy to the contract or services provided to refuse to
pay or reduce the wages and benefits, and discharge
or in any manner discriminate against any worker
who has filed any complaint or instituted any
proceeding on wages (under Title II, Book III of the
Labor Code), labor standards violation, or has
testified or is about to testify in such proceedings
Department Order No. 150-16
(Revised Guidelines Governing the Employment and
Working Conditions of Security Guards and Other
Private Security Personnel in the Private Security
Industry)
Section 9. Solidary Liability— The SSC/PSA and its
principal or client shall be jointly and solidarily liable
with each other in any of the following circumstances:
a. When the SSC/PSA fails to pay the wages of its
security guards and other private security personnel,
the principal or client shall be considered the “indirect
employer” and shall be jointly and severally liable
with the SSC/PSA to the extent of the work
performed by such security guards and other private
security personnel under the Service Agreement, in
the same manner and extent that the principal is liable
to its direct employees.
b. If there are wage increases or adjustments after
the execution of the Service Agreement, the
prescribed increases in the wage rates of security
guards and other private security personnel shall be
borne by the principal and the Service Agreement
shall be deemed amended accordingly. In the event
that the principal fails to pay the prescribed increases,
the SSC/PSA shall be jointly and solidarily liable with
the principal.
The immediate recourse of security guards and other
private security personnel for payment of wage
increase before litigation is with their employer, the
SSC/PSA. To enable the SSC/PSA to comply with
the new rates, the consideration paid by the principal
for the security guards’ wages has to be adjusted in
conformity with the mandated wage increase.
c. When the SSC/PSA is found to be engaged in
labor-only contracting, the principal shall be jointly
and solidarily liable with it in the same manner that
the principal is liable to employees directly hired by
him/her.
d. When the SSC/PSA is found to be an in-house
agency, the principal shall be the direct employer of
the security guards and/or other private security
personnel deployed with it.
e. When a violation of the relevant provisions of the
Labor Code, as amended, has been established by
the DOLE Secretary or his/her duly authorized
representative in the exercise of his/her enforcement
power, the principal shall be deemed solidarily liable
with the SSC/PSA to the extent of accrued wage and
wage-related benefits that the latter may owe to its
security guards and other private security personnel
in the following instances;
1. when the certificate of registration of the SSC/PSA
is cancelled, revoked, or not renewed by the
competent authority; or
2. When the contract between the principal an the
SSCPSA is pre-terminated for reasons not attributable
to the fault of the latter.
EPARWA vs. LCDU (2006)
Doctrine: This joint and several liability of the
contractor and the principal is mandated by the Labor
Code to assure compliance of the provisions therein,
including the statutory minimum wage (Art. 99, Labor
Code). The contractor is made liable by virtue of his
status as direct employer. The principal, on the other
hand, is made the indirect employer of the
contractor’s employees for purposes of paying the
employees their wages should the contractor be
unable to pay them. This joint and several liability
facilitates, if not guarantees, payment of the workers’
performance of any work, task, job or project, thus
giving the workers ample protection as mandated by
the 1987 Constitution.
Facts: Petitioner Eparwa and respondent LDCU
entered into a Contract for Security Services, with the
security guards assigned to LDCU filing a complaint
for underpayment of salary against both parties. The
issue is w/n LDCU is entitled to reimbursement from
Eparwa.
Ruling: LDCU alone is ultimately liable to the security
guards as principal pursuant to Art. 106, 107, and
109 of the Labor Code. It has the burden of paying
wage differentials to the employees even if they are
employed by an independent contractor and it is not
entitled to reimbursement. Eparwa should have
adjusted the contract price to account for wage
differentials but since the contract had already
expired, it can pay the employees their differentials
subject to reimbursement from LDCU. But ultimately,
it is LDCU that should be accountable for such
differentials.
MERALCO INDUSTRIAL ENGINEERING vs. NLRC
(2008)
Doctrine: Taken together, Articles 106, 107, and 109,
dictate that an indirect employer can be held solidarily
liable with the independent contractor in the event
that the latter fails to pay wages. Article 106 states
that the employer shall be jointly and severally liable
in case the contractor or subcontractor fails to pay
wages. Article 107 extends the application of Article
106 to indirect employers. Hence, applying article
109, the solidary liability of the indirect employer
applies only with respect to unpaid wages. The
solidariy liability stated in Article 109 with respect to
liability for other violations of the Labor Code applies
only when the principal is in conspiracy with the
independent contractor or subcontractor.
Facts: Meralco Industrial Engineering Services
Corporation executed a contract order with Ofelio P.
Landrito General Services, a business firm engaged
in providing and rendering general services such as
janitorial and maintenance work. The 49 employees
assigned to Meralco lodged a complaint for illegal
deduction, underpayment, and non-payment of
wages against OPLGS. While the complaint was
before the Labor Arbiter, the contract was amended
for the 10th time in order to comply with the minimum
wage requirements. Two months later, the contract
was terminated and the employees were pulled from
work. Therefore, the complaint was amended to
include MERALCO for illegal dismissal. Labor Arbiter
ruled that OPLGS was liable for unpaid wages,
separation pay and overtime pay. NLRC modified the
decision by holding MERALCO solidarily liable with
OPLGS. The NLRC directed the Labor Arbiter to
enforce the monetary award on the surety bond and
to determine who should shoulder the liability. The
Labor Arbiter ruled that OPLGS was solely liable for
the separation pay while the two are solidarily liable
for the unpaid wages. Upon appeal, the Court of
Appeals held that both are solidarily liable for the
separation pay. Hence, this petition.
Ruling: MERALCO would be solidarily liable (as per
doctrine above), however, in this case, since
MERALCO already posted a surety bond and
amended the contracts to comply with the minimum
wage requirements, it should no longer be held liable.
Since OPLGS already received from MERALCO the
correct amount of wages and benefits but failed to
turn these over to the employees, OPLGS should
bear the sole liability for underpayment and non-
payment of the overtime pay.
BENIGNO VIGILLA v. PCCI (2013)
Doctrine: In labor-only contracting, the statute creates
an employer- employee relationship to prevent a
circumvention of labor laws. The contractor is
considered merely an agent of the principal and the
latter is responsible to the employees of the labor-
only contractor, as if such employees had been
directly employed by the principal employer. The
principal employer therefore becomes solidarily liable
with the labor-only contractor for all the rightful claims
of the employees.
Facts: Petitioners were janitors and a supervisor for
Maintenance in the Philippine College of Criminology
(PCCr) under the control of Atty. Seril. They were
made to understand, upon application with PCCr, that
they were under MBMSI, a corporation engaged in
providing janitorial services to clients; Atty. Seril was
also MBMSI president. PCCr discovered that the
Certificate of Incorporation of MBMSI was revoked
and terminated the relationship with the school.
Thereafter, petitioners were dismissed. Although
petitioners filed a complaint for illegal dismissal
against PCCr, but PCCr submitted several documents
including releases, waivers, and quitclaims in favor of
MBMSI executed by the complainants (to prove that
they were employees of MBMSI and not PCCr) which
amounted to what the Court ruled as their amicable
settlement with the employer.
Ruling: [ON LABOR-ONLY CONTRACTING] PCCr
was the real principal employer of the complainants
 because it was actually the one which exercised
control over the means and methods of the work of
the petitioners, thru Atty. Seril, who was acting in his
capacity as Senior VP for Administration of PCCr (not
in any way as the president of MBMSI). MBMSI is
therefor the labor-only contractor and the
complainants, regular employees of PCCr.
[ON LIABILITY] The labor-only contractor and
employer are solidarily liable pursuant to the last
paragraph of Art. 106 and Sec. 27 of then applicable
D.O. No. 18-A, series of 2011: “Section 27. Effects
of finding of labor-only contracting and/or violation
of Sections 7, 8 or 9 of the Rules. A finding by
competent authority of labor-only contracting shall
render the principal jointly and severally liable with
the contractor to the latter’s employees, in the same
manner and extent that the principal is liable to
employees directly hired by him/her, as provided in
Article 106 of the Labor Code, as amended.”
Considering that MBMSI, as the labor-only contractor,
is solidarily liable with the respondents, as the
principal employer, then the respondents’ solidary
liability was already extinguished by virtue of the
releases, waivers and quitclaims executed by each of
the petitioners in favor of MBMSI pursuant to Art.
1217 of the Civil Code which provides that “payment
made by one of the solidary debtors extinguishes the
obligation.” The payment redounded to the benefit of
PCCr because of this solidarity.
j. Retaliatory Measures
Department Order No. 174-17
(Rules Implementing Articles 106 to 109 of the
Labor Code, As Amended)
Section 27. Retaliatory Measures. Pursuant to Article
118 of the Labor Code, as amended, it shall be
unlawful for the principal, contractor, or any party
privy to the contract or services provided to refuse to
pay or reduce the wages and benefits, and discharge
or in any manner discriminate against any worker
who has filed any complaint or instituted any
proceeding on wages (under Title II, Book III of the
Labor Code), labor standards violation, or has
testified or is about to testify in such proceedings.
Section 28. Enforcement of Labor Standards and
Working Conditions. Consistent with Article 128 of the
Labor Code, as amended, the Regional Director
through his/her duly authorized representatives, shall
conduct routine inspection of establishments
engaged in contracting arrangement regardless of the
number of employees engaged by the principal or
by the contractor. They shall have access to
employee’s records andpremises at any time of the
day or night whenever work is being undertaken
therein, and the right to copy therefrom, to question
any employee and investigate any fact, condition or
matter which may be necessary to determine
violations or which may aid in the enforemcent of the
Labor Code, and of any labor law, wage order, or
rules and regulations issued pursuant thereto.
The finidings of the duly authorized representative
shall be reffered to the Regional Director for
appropriate action as provided for in Art. 128, and
shall be furnished the collective bargaining agent if
any.
Based on the visitorial and enforcement power of the
Secretary of Labor and Employment in Article 128
(a), (b), (c) and (d), the Regional Director shall issue
compliance orders to give effect to the labor
standards provisions of the Labor Code, other labor
legislation, and these Rules.
k. Applicability/ Non-applicability of DO 174-17
Department Circular No 01-17
(Clarifying the Applicability of Dept. Order No. 174,
Series of 2017)
II. Non-Applicability of DO No 174, Series of 2017 to
BPO/LPO/KPO
DO 174, Series of 2017, applies only to trilateral
relationship which characterizes contracting or
subcontracting relationship. It does not contemplate
to cover information technology –enabled services
involving an entire or specific business process such
as:
-! Business Process Outsourcing
-! Knowledge Process Outsourcing
-! Legal Process Outsourcing
-! IT Infrastructure Outsourcing
-! Application Development
-! Hardware and/or Software Support
-! Medical Transcription
 -! Animation Services
-! Back Office Operations/ Support
III. Applicability/Non-Applicability of DO No 174,
Series of 2017, to Construction Industry; Coordination
with PCAB-CIAP
Contracting or subcontracting arrangements in the
construction industry under the licensing coverage of
the Philippine Contractors Accreditation Board
(PCAB) shall be governed by the DO No. 19, Series
of 1993 (Guidelines Governing the Employment of
Workers in the Construction Industry); DO No. 13,
Series of 1998 (Guidelines Governing the
Occupational Safety and Health in Construction
Industry); and DOLE-DPWH-DILG-DTI and PCAB
Memorandum of Agreement-Joint Administrative
Order No. 1, Series of 2011 on coordination and
harmonization of policies and programs on
occupational safety and health in construction
industry.
Sec. 2 (2.5) of DO No. 19, Series of 1993 provides:
“Contracting and subcontracting- The
practice of contracting out certain phases of
a construction project is recognized by law,
particularly wage legislations and wage
orders, and by industry practices. The Labor
Code and its Implementing Regulations
allow the contracting out of jobs under
certain conditions. Where such job
contracting is permissible, the construction
workers are generally considered as
employees of the contractor or
subcontractor, as the case may be, subject
to Article 109 of the Labor Code, as
amended.”
Pursuant to PD No. 1746, Series of 1980, licensing
and the exercise of regulatory powers over the
construction industry is lodged with the PCAB of the
Construction Industry Authority of the Philippines
(CIAP).
The PCAB registers all types of contractors in the
construction industry and regulates the same by
ensuring compliance with DOLE issuances. Thus, the
DOLE through its Regional Offices shall not require
contractors licensed by PCAB to register under DO
174-17. However, findings of violation/s on labor
standards and occupational health and safety
standards shall be coordinated with PCAB for its
appropriate action, including possible
cancellation/suspension of contractor’s license.
Contractors licensed by PCAB which are engaged in
other contracting or subcontracting arrangement in
addition to, or other than construction activities shall
be required to registed under DO 174-17.
IV. Applicability/Non-Applicability of DO No 174,
Series of 2017, to Private Security Agencies
Except for the registration requirements provided for
in DO 174-17, contracting or subcontracting
arrangements in the private security industry shall be
governed by DO No 150-16 (Revised Guidelines
Governing the Employment and Working Conditions
of Security Guards and Other Private Security
Personnel in the Private Security Industry)
**Sec. 2 (i) “Security Service Contractor
(SSC)” is synonymous with Private Security
Agency (PSA) which refers to any person,
association, partnership, firm, or private
corporation engaged in contracting,
recruitment, training, furnishing, or posting or
security guard and other private security
personnel to individuals, corporations offices
and organizations, whether private or public
for their security needs as the Philippine
National Police may approve.
**Sec. 3.1. Employer-Employee
Relationship- The SSC/PSA is the employer
of its security personnel on duty detail to a
principal or client under a Service
Agreement.
V. Non-Applicability of DO No 174, Series of 2017, to
Other Contractual Relationships
DO No. 174-17, applies only to trilateral relationship
which characterizes contracting or subcontracting
arrangement. It does not contemplate to cover
contractual relationships such as in contract of sale
or purchase, contract of lease, contract of carriage,
contract growing/growership agreement, toll
manufacturing, contract of management, operation
and maintance and such other contracts governed
 by the Civil Code of the Philippines and other special
laws.
DO 174-17 does not also cover the contracting out
of job or work to a professional, or individual with
unique skills and talents who himself or herself
performers the job or work for the principal.
D. PRE-EMPLOYMENT, RECRUITMENT AND PLACEMENT
1. Pre-employment Policy— Statement of Objectives
Labor Code
ART. 3. Declaration of Policy— The State shall afford
protection to labor, promote full employment, ensure
equal work opportunities regardless of sex, race or
creed, and regulate the relations between workers
and employers. The State shall assure the rights of
workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of
work.
ART. 12. Statement of Objectives— It is the policy of
the State:
(a)To promote and maintain a state of full
employment through improved manpower training,
allocation and utilization
(b) To protect every citizen desiring to work locally
or overseas by securing for him the best possible
terms and conditions of employment
(f) To strengthen the network of public employment
offices and rationalize the participation of the private
sector in the recruitment and placement of workers,
locally and overseas, to serve national development
objectives
1987 Constitution
ARTICLE II. Declaration of Principles and State
Policies—
SEC. 9. The State shall promote a just and dynamic
social order that will ensure the prosperity and
independence of the nation and free the people from
poverty through policies that provide adequate social
services, promote full employment, a rising standard
of living, and an improved quality of life for all.
ARTICLE XIII. Social Justice and Human Rights
Labor—
SEC. 3. (1) The State shall afford full protection to
labor, local and overseas, organized and
unorganized, and promote full employment and
equality of employment opportunities for all.
Republic Act 8042
“Migrant Workers & Overseas Filipinos Act“
SEC. 2. DECLARATION OF POLICIES—
a.! In the pursuit of an independent foreign policy
and while considering national sovereignty,
territorial integrity, national interest and the right
to self-determination paramount in its relations
with other states, the State shall, at all times,
uphold the dignity of its citizens whether in
country or overseas, in general, and Filipino
migrant workers, in particular, continuously
monitor international conventions, adopt/be
signatory to and ratify those that guarantee
protection to our migrant workers, and endeavor
to enter into bilateral agreements with countries
hosting overseas Filipino workers.
b.! The State shall afford full protection to labor,
local and overseas, organized and unorganized,
and promote full employment and equality of
employment opportunities for all. Towards this
end, the State shall provide adequate and timely
social, economic and legal services to Filipino
migrant workers.
c.! While recognizing the significant contribution of
Filipino migrant workers to the national economy
through their foreign exchange remittances, the
State does not promote overseas employment
as a means to sustain economic growth and
achieve national development. The existence of
the overseas employment program rests solely
on the assurance that the dignity and
fundamental human rights and freedoms of the
Filipino citizens shall not, at any time, be
compromised or violated. The State, therefore,
shall continuously create local employment
opportunities and promote the equitable
distribution of wealth and the benefits of
development.
d.! The State affirms the fundamental equality
before the law of women and men and the
significant role of women in nation-building.
Recognizing the contribution of overseas
migrant women workers and their particular
vulnerabilities, the State shall apply gender
sensitive criteria in the formulation and
implementation of policies and programs
affecting migrant workers and the composition
of bodies tasked for the welfare of migrant
workers.
e.! Free access to the courts and quasi-judicial
bodies and adequate legal assistance shall not
be denied to any person by reason of poverty.
In this regard, it is imperative that an effective
mechanism be instituted to ensure that the rights
and interest of distressed overseas Filipinos, in
general, and Filipino migrant workers, in
particular, whether regular/documented or
irregular/undocumented, are adequately
protected and safeguarded.
f.! The right of Filipino migrant workers and all
overseas Filipinos to participate in the
democratic decision-making processes of the
State and to be represented in institutions
relevant to overseas employment is recognized
and guaranteed.
g.! The State recognizes that the most effective tool
for empowerment is the possession of skills by
migrant workers. The government shall provide
them free and accessible skills development
and enhancement programs. Pursuant to this
and as soon as practicable, the government
shall deploy and/or allow the deployment only
of skilled Filipino workers.
h.! The State recognizes non-governmental
organizations, trade unions, workers
associations, stakeholders and their similar
entities duly recognized as legitimate, are
partners of the State in the protection of Filipino
migrant workers and in the promotion of their
welfare. The State shall cooperate with them in
a spirit of trust and mutual respect. The
significant contribution of recruitment and
manning agencies shall from part this
partnership.
i.! Government fees and other administrative costs
of recruitment, introduction, placement and
assistance to migrant workers shall be rendered
free without prejudice to the provision of Section
36 hereof.
Nonetheless, the deployment of Filipino overseas
workers, whether land-based or sea- based by local
service contractors and manning agencies employing
them shall be encouraged. Appropriate incentives
may be extended to them.
SEC. 4. Deployment of Migrant Workers. - The State
shall allow the deployment of overseas Filipino
workers only in countries where the rights of Filipino
migrant workers are protected. The government
recognizes any of the following as a guarantee on
the part of the receiving country for the protection of
the rights of overseas Filipino workers:
(a) It has existing labor and social laws
protecting the rights of workers, including migrant
workers;
(b) It is a signatory to and/or a ratifier of
multilateral conventions, declarations or resolutions
relating to the protection of workers, including migrant
workers; and
(c) It has concluded a bilateral agreement or
arrangement with the government on the protection
of the rights of overseas Filipino Workers:
Provided, That the receiving country is taking positive,
concrete measures to protect the rights of migrant
workers in furtherance of any of the guarantees under
subparagraphs (a), (b) and (c) hereof.
In the absence of a clear showing that any of the
aforementioned guarantees exists in the country of
destination of the migrant workers, no permit for
deployment shall be issued by the Philippine
Overseas Employment Administration (POEA)
 The members of the POEA Governing Board who
actually voted in favor of an order allowing the
deployment of migrant workers without any of the
aforementioned guarantees shall suffer the penalties
of removal or dismissal from service with
disqualification to hold any appointive public office for
five (5) years, Further, the government official or
employee responsible for the issuance of the permit
or for allowing the deployment of migrant workers in
violation of this section and in direct contravention of
an order by the POEA Governing Board prohibiting
deployment shall be meted the same penalties in this
section.
For this purpose, the Department of Foreign Affairs,
through its foreign posts, shall issue a certification to
the POEA, specifying therein the pertinent provisions
of the receiving country's labor/social law, or the
convention/declaration/resolution, or the bilateral
agreement/arrangement which protect the rights of
migrant workers.
The State shall also allow the deployment of overseas
Filipino workers to vessels navigating the foreign seas
or to installations located offshore or on high seas
whose owners/employers are compliant with
international laws and standards that protect the rights
of migrant workers.
The State shall likewise allow the deployment of
overseas Filipino workers to companies and
contractors with international operations: Provided,
That they are compliant with standards, conditions
and requirements, as embodied in the employment
contracts prescribed by the POEA and in accordance
with internationally-accepted standards.
SEC. 5. Termination or Ban on Deployment. -
Notwithstanding the provisions of Section 4 hereof, in
pursuit of the national interest or when public welfare
so requires, the POEA Governing Board, after
consultation with the Department of Foreign Affairs,
may, at any time, terminate or impose a ban on the
deployment of migrant workers.
2. Private Sector—Agencies and Entities
a.! Parties
1.! Worker
Article 13. Definitions—
(a) “Worker” means any member of the labor force,
whether employed or unemployed
RA 8042, Section. 3. Definitions—
(a) "Overseas Filipino worker" refers to a person who
is to be engaged, is engaged or has been engaged
in a remunerated activity in a state of which he or
she is not a citizen or on board a vessel navigating
the foreign seas other than a government ship used
for military or non-commercial purposes or on an
installation located offshore or on the high seas; to
be used interchangeably with migrant worker.
2.! Private Employment Agency –
Article 13. Definitions—
(c) “Private fee-charging employment agency” means
any person or entity engaged in recruitment and
placement of workers for a fee which is charged,
directly or indirectly, from the workers or employers
or both.
(d) “License” means a document issued by the
Department of Labor authorizing a person or entity to
operate a private employment agency.
Article. 12. Statement of Objectives.
(f) To strengthen the network of public employment
offices and rationalize the participation of the private
sector in recruitment and placement of workers,
locally and overseas, to serve national development
objectives
ART. 14. Employment Promotion—
The Secretary of Labor shall have the power and
authority:
(a) To organize and establish new employment
offices in addition to the existing employment offices
under the Department of Labor as the need arises.
3.! Private Recruitment Entity
Article 13. Definitions—
(e) “Private recruitment entity” means any person or
association engaged in the recruitment and
placement of workers, locally or overseas, without
charging, directly or indirectly, any fee from the
workers or employers.
 (b) “Recruitment and placement” refers to any act of
(f) “Authority” means a document issued by the canvassing, enlisting, contracting, transporting,
Department of Labor authorizing a person or utilizing, hiring or procuring workers, and includes
association to engage in recruitment and placement referrals, contact services, promising or advertising for
activities as a private recruitment entity. employment, locally or abroad, whether for profit or
not: Provided, That any person or entity which, in any
Article 12. Statement of Objectives— manner, offers or promises for a fee, employment to
(f) To strengthen the network of public employment two or more persons shall be deemed engaged in
offices and rationalize the participation of the private recruitment and placement.
sector in the recruitment and placement of workers,
locally and overseas, to serve national development 2.! Overseas Employment
objectives. RA 8042, SEC. 6. Definition— For purposes of this
Act, illegal recruitment shall mean any act of
Article 14. Employment Promotion— canvassing, enlisting, contracting, transporting,
The Secretary of Labor shall have the power and utilizing, hiring, or procuring workers and includes
authority: referring, contract services, promising or advertising
(a) To organize and establish new employment for employment abroad, whether for profit or not,
offices in addition to the existing employment offices when undertaken by non-licensee or non-holder of
under the Department of Labor as the need arises. authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise
DISTINCTIONS: known as the Labor Code of the Philippines:
Provided, That any such non-licensee or non- holder
License Authority who, in any manner, offers or promises for a fee
Authorize an entity to Private recruitment entity employment abroad to two or more persons shall be
operate as a private deemed so engaged.
employment agency The filing of an offense punishable under this Act
When a license is given, Does not entitle entity to shall be without prejudice to the filing of cases
one is also authorized to collect fees punishable under other existing laws, rules or
collect fees regulations…

Private Employment Private Recruitment Entity 3.! Policy Deregulation

Agency
Any person or entity
engaged in recruitment
and placement of workers
for a fee which is charged,
directly or indirectly, from
the workers or employers
or both
License
RA. 8042, SEC. 29. Comprehensive Deregulation Plan
Any person or association On Recruitment Activities— Pursuant to a progressive
engaged in the policy of deregulation whereby the migration of
recruitment and workers becomes strictly a matter between the
placement of workers, worker and his foreign employer, the DOLE within
locally or overseas, one (1) year from the effectivity of this Act, is hereby
without charging, directly mandated to formulate a five-year comprehensive
or indirectly, any fee deregulation plan on recruitment activities taking into
account labor market trends, economic conditions of
Authority the country and emergency circumstances which
may affect the welfare of migrant workers.

b.! Recruitment and Placement SEC. 30. Gradual Phase-Out Of Regulatory

1.! Local Employment Functions— Within a period of five (5) years from
Article 13. Definitions— the effectivity of this Act, the DOLE shall phase out
the regulatory functions of the POEA pursuant to the SEC. 2. Section 29 of the same law is hereby
objectives of deregulation repealed.

SEC. 3. Section 30 of the same law is also hereby

Republic Act No. 9422
repealed.
(An Act To Strengthen The Regulatory Functions Of
The Philippine Overseas Employment Administration
c.! Allowed and Protected Entities
(POEA), Amending For This Purpose Republic Act
1.! Allowed Private Agencies and Entities
No. 8042, Otherwise Known As The "Migrant
Labor Code, Article 16. Private recruitment— Except
Workers And Overseas Filipinos Act Of 1995)
as provided in Chapter II of this Title, no person or
entity other than the public employment offices, shall
SEC. 1. Section 23, paragraph (b.1) of Republic Act.
engage in the recruitment and placement of workers.
No. 8042, otherwise known as the "Migrant Workers
and Overseas Filipinos Act of 1995" is hereby
Article 25. Private sector participation in the
amended to read as follows:
recruitment and placement of workers— Pursuant to
national development objectives and in order to
"(b.1) Philippine Overseas Employment
harness and maximize the use of private sector
Administration - The Administration shall regulate
resources and initiative in the development and
private sector participation in the recruitment and
implementation of a comprehensive employment
overseas placement of workers by setting up a
program, the private employment sector shall
licensing and registration system. It shall also
participate in the recruitment and placement of
formulate and implement, in coordination with
workers, locally and overseas, under such guidelines,
appropriate entities concerned, when necessary, a
rules and regulations as may be issued by the
system for promoting and monitoring the overseas
Secretary of Labor.
employment of Filipino workers taking into
consideration their welfare and the domestic
Article 18. Ban on direct-hiring— No employer may
manpower requirements.
hire a Filipino worker for overseas employment
except through the Boards and entities authorized by
"In addition to its powers and functions, the
the Secretary of Labor. Direct-hiring by member of
administration shall inform migrant workers not only
the diplomatic corps, international organizations and
of their rights as workers but also of their rights as
such other employers as may be allowed by the
human beings, instruct and guide the workers how
Secretary of Labor is exempted from this provision.
to assert their rights and provide the available
mechanism to redress violation of their rights."
Article 12. Statement of Objectives—
(f) To strengthen the network of public employment
"In the recruitment and placement of workers to
offices and rationalize the participation of the private
service the requirements for trained and competent
sector in the recruitment and placement of workers,
Filipino workers of foreign governments and their
locally and overseas, to serve national development
instrumentalities, and such other employers as public
objectives
interests may require, the administration shall deploy
only to countries where the Philippines has
2016 POEA Rules and Regulations
concluded bilateral labor agreements or
arrangements: Provided, That such counrtries shall
PART II (Licensing and Regulation);
guarantee to protect the rights of Filipino migrant
RULE I (Private Sector Participation in the Overseas
workers; and: Provided, further, That such countries
Employment Program)
shall observe and/or comply with the international
laws and standards for migrant workers."
SEC. 1. Participation of the Private Sector.— The
private sector shall participate in the recruitment of
Filipino workers for overseas employment in
accordance with these Rules and any subsequent
guidelines that may be issued by the POEA
Governing Board and the Administration.
PART III (Placement by the Private Sector);
RULE II (Documentation and Deployment of
Overseas Filipino Workers)
SEC. 123. Ban on Direct Hires. — No employer shall
directly hire an Overseas Filipino Worker for overseas
employment.
SEC. 124. Exemption from the Ban on Direct Hiring.
— The following are exempted from the ban on direct
hiring:
a. Members of the diplomatic corps;
b. International organizations;
c. Heads of state and government officials with the
rank of at least deputy minister; or
d. Other employers as may be allowed by the
Secretary of Labor and Employment,
such as:
1.! Those provided in (a), (b) and (c) who
bear a lesser rank, if endorsed by the
POLO, or Head of Mission in the
absence of the POLO;
2.! Professionals and skilled workers with
duly executed/authenticated contracts
containing terms and conditions over
and above the standards set by the
POEA. The number of professional and
skilled Overseas Filipino Workers hired
for the first time by the employer shall
not exceed five (5). For the purpose of
determining the number, workers hired
as a group shall be counted as one; or
3. Workers hired by a relative/family
member who is a permanent resident of the
host country.
2.! Prohibited Business Agencies and Entities
Article. 16. Private recruitment— Except as provided
in Chapter II of this Title, no person or entity other
than the public employment offices, shall engage in
the recruitment and placement of workers.
Article. 18. Ban on direct-hiring— No employer may
hire a Filipino worker for overseas employment
except through the Boards and entities authorized by
the Secretary of Labor. Direct-hiring by members of
the diplomatic corps, international organizations and
such other employers as may be allowed by the
Secretary of Labor is exempted from this provision.
Article 25. Private sector participation in the
recruitment and placement of workers— Pursuant to
national development objectives and in order to
harness and maximize the use of private sector
resources and initiative in the development and
implementation of a comprehensive employment
program, the 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
Secretary of Labor.
Article. 26. Travel agencies prohibited to recruit—
Travel agencies and sales agencies of airline
companies are prohibited from engaging in the
business of recruitment and placement of workers for
overseas employment whether for profit or not.
2016 POEA R&R, PART II , RULE I
SEC. 3. Who are Disqualified— The following persons
and entities are disqualified to participate or engage
in the recruitment and placement of workers for
overseas employment:
a.! Travel agencies and sales agencies of
airline companies
b.! Officers or members of the Board of any
corporation or partners in a partnership
engaged in the business of travel agency
c.! Corporations and partnerships, where any of
its officers, members of the board or
partners is also an officer, member of the
board or partner of a corporation or
partnership engaged in the business of a
travel agency
d.! Individuals, partners, officers or directors of
an insurance company who make, propose
or provide an insurance contract under the
compulsory insurance coverage for agency-
hired Overseas Filipino Workers
 e.! Sole proprietors, partners or officers and
members of the board with derogatory
record, such as, but not limited to the
following:
1.! Those convicted, or against whom
probable cause or prima facie finding of
guilt is determined by a competent
authority, for illegal recruitment, or for
other related crimes or offenses
committed in the course of, related to,
or resulting from, illegal recruitment, or
for crimes involving moral turpitude
2.! Those agencies whose licenses have
been revoked for violation of RA 8042,
PD 442, and RA 9208 (Trafficking in
Persons Act of 2003) and their
implementing rules and regulations
f.! Any official or employee of the DOLE, POEA,
OWWA, DFA, DOJ, DOH, BI, IC, NLRC,
TESDA, CFO, NBI, PNP, Civil Aviation
Authority of the Philippines (CAAP),
International airport authorities, and other
government agencies directly involved in
implementation of RA 8042, as amended,
and/or any of his/her relatives within the
fourth civil degree of consanguinity or affinity
HORNALES V. NLRC (2001)
Facts: Petitioner Hornales filed a complaint against
respondents for non-payment of wages and recovery
of damages, as respondents did not in fact pay him
despite Hornales suffering inhumane conditions of
work in the hands of the employer in SG, that
respondents sent Hornales to.
Ruling/Doctrine: The Court rules for petitioner, stating
that respondents’ claim that they do not know the
petitioner is unbelievable, and the Court granted him
payment for wages owed by respondents solidarily.
*PNB checks and agreements are valid even if they
are photocopies because technical rules not binding.
Joint affidavit by co-workers are treated as hearsay
since petitioner was unable to cross-examine.
*Quantum of evidence: substantive evidence
*Surety is also liable as they are supposed to ensure
prompt and effective recourse against company for
claims (Sec 4, Rule 2 of POEA Rules).
d.! Government Techniques of Regulation– Private
Recruitment
1.! Licensing
a.! Qualifications: Citizenship and Capitalization:
Article 27. Citizenship requirement— Only Filipino
citizens or corporations, partnerships or entities at
least seventy-five percent (75%) of the authorized
and voting capital stock of which is owned and
controlled by Filipino citizens shall be permitted to
participate in the recruitment and placement of
workers, locally or overseas.
Article 28. Capitalization— All applicants for authority
to hire or renewal of license to recruit are required to
have such substantial capitalization as determined by
the Secretary of Labor.
2016 POEA R&R, PART II (Licensing and Regulation);
RULE I (Private Sector Participation in the Overseas
Employment Program)
SEC. 2. Who may participate; Required
Capitalization— Any Filipino citizen acting as a sole
proprietor or a partnership, or a corporation at least
seventy-five percent (75%) of the authorized and
voting capital stock of which is owned and controlled
by Filipino citizens, may engage in the business of
recruitment and placement of Filipino workers.
The sole proprietor and partnership shall have a
minimum capitalization of Five Million Pesos
(PhP5,000,000.00) and a minimum paid up capital of
Five Million Pesos (PhP5,000,000.00) in case of a
corporation.
Those with existing licenses shall, within four (4) years
from effectivity hereof, increase their capitalization or
paid up capital, as the case may be, to Five Million
Pesos (PhP5,000,000.00) at the rate of Seven
Hundred Fifty Thousand Pesos (PhP750,000.00)
every year.
b.! Issuance of License
Article 29. Non-transferability of license or authority—
No license or authority shall be used directly or
indirectly by any person other than the one in whose
favor it was issued or at any place other than that
stated in the license or authority be transferred,
conveyed or assigned to any other person or entity.
Any transfer of business address, appointment or
 designation of any agent or representative including
the establishment of additional offices anywhere shall
be subject to the prior approval of the Department of
Labor.
Article 30. Registration fees— The Secretary of Labor
shall promulgate a schedule of fees for
registration of all applicants for license or authority.
Article 31. Bonds— All applicants for license or
authority shall post such cash and surety bonds as
determined by the Secretary of Labor to guarantee
compliance with prescribed recruitment procedures,
rules and regulations, and terms and conditions of
employment as may be appropriate.
Local Employment:
Department Order 141-14
(Revised Rules And Regulations Governing
Recruitment And Placement For Local Employment)
Section 12. Validity of the license– The license shall
be valid for period of three (3) years from the date
of issuance unless sooner revoked or cancelled.
Section 13. Renewal of the license– An application
for renewal of license must be filed not earlier than
sixty (60) days but not later than thirty (30) days
before its expiration. The validity of the renewal
license shall start on the date of expiration of the
previous license
The filing of such application after the lapse of the
prescribed period shall be subject to penalties as
provided for in these rules. The application for
renewal must be accompanied with the requirements
provided under section 6 together with copies of
placement reports.
Section 14. Display of license and organizational
structure— The original license and
organizational structure of the agency
corresponding 2×2 size photographs of the officers,
personnel, and representative/s must be
conspicuously and permanently displayed within the
office premises of the agency.
Section 15. Non-transferability of license
authority– The license or authority to recruit shall not
be transferred, conveyed or assigned to any person
or entity other than the one in whose favor it was
issued.
Section 16. Change of ownership– An agency
the desiring to transfer ownership shall surrender its
license to the issuing Regional Office. The new
owner/s of the agency must apply for a new license.
A change or transfer of ownership of a sing
proprietorship shall cause the automatic revocation of
the license. In case of death of a single proprietor,
the license may be extended for not more than six
(6) months from the death of the proprietor upon the
request of the heirs to continue only for the purpose
of winding up the business operations or until its
expiration whichever comes first.
A change in the relationship among the partners in a
partnership shall cause the immediate dissolution of
the partnership resulting to the automatic revocation
of the license.
Section 17. Appointment/ Change of Officers and
personnel– Any change in the composition of the
Board of directors of a corporation and appointment
of officers and personnel shall be registered with the
Regional office within five (5) days from the date of
such change or appointment. The agency shall
submit a Board secretary’s certificate of election, letter
of appointment or contract of employment with their
bio-data, 2×2 photos and NBI clearances. The
regional Office may deny the acknowledgement of
the new officers and personnel for non-compliance
with the requirements. Change in the entire
partnership of the Board of Directors shall cause the
revocation of the license.
Overseas:
the 2016 POEA R&R, PART II (Licensing and
with Regulation); RULE II (Issuance of a License)
B. Provisional License
SEC. 11. Issuance and Validity of a Provisional
License— Within five (5) working days from
satisfaction of the post-qualification
or requirements, the Administration shall issue a
provisional license which shall be valid within a
non-extendible period of two (2) years from date of
issuance.
SEC. 12. Prohibition.— The agency granted with a
provisional license shall not deploy domestic
workers during the validity of the provisional license.
C. Regular License
SEC. 13. Application for Upgrading of Provisional
License to a Regular License.— Upon application, a
provisional license may be upgraded to a regular
license at any time during its validity upon
deployment of one hundred (100) workers to its
new principal/s, and upon submission of the
following:
a.! Quality Management System (QMS) manual,
defining the scope of the agency’s quality
management system that includes, among
others, the quality policy and objectives,
organizational structure and management
responsibilities, and documented recruitment
and deployment processes;
b.! Updated bank certificate stating that the
escrow deposit remains at One Million Pesos
(PhP1,000,000.00);
c.! Certificate of no pending case or any
substantiated adverse report during the
validity of the provisional license;
b.! Certificate of attendance to the Continuing
Agency Education Program (CAEP) of all its
officers and staff; and
c.! Latest audited financial statement.
SEC. 14. Validity of a Regular License—
The regular license shall be valid up to the full term
of four (4) years from the date of issuance of the
provisional license.
The application for upgrading of the provisional
license shall be filed within three (3) months before
the expiration of the provisional license.
SEC. 21. Non-Transferability of License— No license
shall be used, directly or indirectly, by any person
other than the one in whose favor it was issued, nor
at any place other than that stated in the license, nor
may such license be transferred, conveyed or
assigned to any other person or entity.
SEC. 22. Revocation of License of Sole Proprietorship.
— The license of the sole proprietorship shall
automatically be revoked upon the death of the sole
proprietor. The next-in-rank officer of the agency
shall, within ten (10) days, report such death to the
Administration. Failure to report shall automatically
include such next-in-rank officer in the list of persons
with derogatory record.
SEC. 23 Revocation of License of a Partnership Due
to Death or Withdrawal of Partner— The license of a
partnership shall be automatically revoked upon the
death or withdrawal of a partner which materially
interrupts the course of business or results in the
actual dissolution of the partnership. The surviving
partner/s shall, within ten (10) days, report such
death or withdrawal to the Administration. Failure to
report shall automatically include the surviving
partner/s in the list of persons with derogatory
record.
SEC. 24. Upgrading, Merger or Consolidation of
Licensed Recruitment Agencies— The upgrading,
merger or consolidation of licensed recruitment
agencies shall be undertaken in accordance with the
regulations of the SEC, without prejudice to the
determination by the Administration of the
qualifications of the new partners or directors.
The upgraded licensed recruitment agencies, the
surviving corporation, or the new corporation, as the
case may be, shall inform the Administration of such
changes within thirty (30) days from confirmation by
SEC of such upgrading, merger or consolidation.
SEC. 25. Change in the Composition of
Partners/Board of Directors— The licensed
recruitment agency shall notify the Administration of
every change in the composition of the partnership
or board of directors within thirty (30) calendar days
from the date of such change, and submit the
following supporting documents:
a.! ln case of change of partners, the amended
articles of partnership, and bio-data, pictures,
NBI clearances, AIRB clearances and income
 tax returns with proof of payment, for the last
two (2) years of the new partners; and
b.! ln case of election of new members of the
Board of Directors, the amended General
Information Sheet and the bio-data, pictures,
NBI clearances, AIRB clearances and income
tax returns with proof of payment for the last
two (2) years of the new directors.
In case of change in the controlling shares or
composition of the board of directors/partnership or
any transfer of control in the operations of a licensed
recruitment agency, the new set of board of
directors/partners shall be subject to a panel
interview to ascertain their qualifications as provided
in these Rules.
2.! Workers’ Fees
ART. 32. Fees to be paid by workers— Any person
applying with a private fee-charging employment
agency for employment assistance shall not be
charged any fee until he has obtained employment
through its efforts or has actually commenced
employment. Such fee shall be always covered with
the appropriate receipt clearly showing the amount
paid. The Secretary of Labor shall promulgate a
schedule of allowable fees.
2016 POEA RULES, PART II (Placement by the Private
Sector); RULE V (Fees, Costs and Contributions)
SEC. 50. Fees and Costs Chargeable to the Overseas
Filipino Workers. — The Overseas Filipino Worker
shall pay the following fees and costs:
a. Documentation costs:
1.! Passport;
2.! NBI/Police/Barangay Clearance;
3.! NSO authenticated birth certificate;
4.! Transcript of Records and diploma issued by
the school, certified by the CHED and
authenticated by the DFA;
5.! Professional license issued by the PRC,
authenticated by the DFA;
6.! Certificate of Competency issued by TESDA or
other competent certifying body for the job
applied for; and
7.! DOH prescribed medical/health examination,
based on the host country medical protocol.
b.! Membership with Philhealth, Pag-Ibig and the
Social Security System.
SEC. 54. Placement Fee.— A placement fee may be
charged against the Overseas Filipino Worker
equivalent to one (1) month basic salary specified in
the POEA approved contract, except for the following:
a.! Domestic workers; and
b.! Workers to be deployed to countries where the
prevailing system, either by law, policy or
practice do not allow, directly or indirectly, the
charging and collection of
recruitment/placement fee.
The worker shall pay the placement fee to the
licensed recruitment agency only after signing the
POEA-approved contract. The agency must issue a
BIR-registered receipt stating the date of payment
and the exact amount paid.
SAGUN V. SUNACE INTERNATIONAL (2011)
Facts: Petitioner Sagun filed a complaint for violation
of Articles 32, and 34 (a) and (b) of the Labor Code
against respondent Sunace Int’l Mgt. Services, Inc.
(Sunace), before the POEA, as she was fooled into
entering a caretaker job position, and was made to
pay excessive placement fees by respondent.
Ruling/Doctrine: Court ruled that there were no
violations under any of these provisions, as the best
piece of evidence presented in this case, which is
the respondent’s acknowledgement receipt proves
that only P20,840 was asked from her.
3.! Reports/Employment Information
Article 33. Reports on employment status—
Whenever the public interest requires, the Secretary
of Labor may direct all persons or entities within the
coverage of this Title to submit a report on the status
of employment, including job vacancies, details of job
requisitions, separation from jobs, wages, other terms
and conditions and other employment data
ART. 14. Employment promotion— The Secretary of
Labor shall have the power and authority
(d) To require any person, establishment,
organization or institution to submit such employment
information as may be prescribed by the Secretary of
Labor.

RA 8042, SEC. 6
(h) To fail to submit reports on the status of
employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs,
departures and such other matters or information as
may be required by the Secretary of Labor and
Employment;
canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers, and includes
referrals, contract services, promising or advertising
for employment, locally or abroad, whether for profit
or not: Provided, That any person or entity which, in
any manner, offers or promises for a fee, employment
to two or more persons shall be deemed engaged
in recruitment and placement.

4.! Illegal Recruitment ART. 34. Prohibited practices— It shall be unlawful for
any individual, entity, licensee, or holder of authority:
Simple Illegal Recruitment (Local; governed by Labor a.! To charge or accept, directly or indirectly, any
Code): amount greater than that specified in the
Elements: schedule of allowable fees prescribed by the
(1) Person charged with the crime must have undertaken Secretary of Labor, or to make a worker pay
recruitment activities defined under Art. 13 (b) or any amount greater than that actually received
prohibited activities defined in Art. 34 by him as a loan or advance;
(2) Said person does not have a license or authority (Art. b.! To furnish or publish any false notice or
38) information or document in relation to
recruitment or employment;
Illegal Recruitment for Migrant Workers (Overseas; c.! To give any false notice, testimony, information
governed by RA 8042 as amended by RA 10022) or document or commit any act of
misrepresentation for the purpose of securing a
Simple Illegal Recruitment license or authority under this Code.
First Type: d.! To induce or attempt to induce a worker already
(1) Person charged undertakes any of the recruitment employed to quit his employment in order to
activities defined in Art. 13 (b) offer him to another unless the transfer is
(2) Said person does not have a license or authority to designed to liberate the worker from oppressive
do so terms and conditions of employment;
e.! To influence or to attempt to influence any
Second type: person or entity not to employ any worker who
(1) Person charged commits any of the enumerated acts has not applied for employment through his
under Sec. 6 of R.A. 8042, as amended by, R.A. 10022. agency;
(2) It is immaterial whether he is a holder or not of any f.! To engage in the recruitment or placement of
license or authority workers in jobs harmful to public health or
morality or to the dignity of the Republic of the
Law Applicability Acts Who Philippines;
Punishable g.! To obstruct or attempt to obstruct inspection by
Labor Code Local Art. 13 (b) No License the Secretary of Labor or by his duly authorized
Workers representatives;
Art. 34 No License h.! To fail to file reports on the status of
RA 8042 Migrant Art. 13 (b) No License employment, placement vacancies, remittance
Workers LC of foreign exchange earnings, separation from
Sec. 6 Licensee or jobs, departures and such other matters or
no license information as may be required by the Secretary
of Labor.
Article 13. Definitions— i.! To substitute or alter employment contracts
(b) "Recruitment and placement" refers to any act of approved and verified by the Department of
 Labor from the time of actual signing thereof by
the parties up to and including the periods of
expiration of the same without the approval of
the Secretary of Labor;
j.! To become an officer or member of the Board
of any corporation engaged in travel agency or
to be engaged directly or indirectly in the
management of a travel agency; and
k.! To withhold or deny travel documents from
applicant workers before departure for monetary
or financial considerations other than those
authorized under this Code and its implementing
rules and regulations.
ART. 38. Illegal recruitment—
a.! 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, shall be
deemed illegal and punishable under Article 39
of this Code. The Department of Labor and
Employment or any law enforcement officer may
initiate complaints under this Article.
b.! Illegal recruitment when committed by a
syndicate or in large scale shall be considered
an offense involving economic sabotage and
shall be penalized in accordance with Article 39
hereof. Illegal recruitment is deemed committed
by a syndicate if carried out by a group of three
(3) or more persons conspiring and/or
confederating with one another in carrying out
any unlawful or illegal transaction, enterprise or
scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed
in large scale if committed against three (3) or
more persons individually or as a group.
c.! The Secretary of Labor and Employment or his
duly authorized representatives shall have the
power to cause the arrest and detention of such
non-licensee or non-holder of authority if after
investigation it is determined that his activities
constitute a danger to national security and
public order or will lead to further exploitation of
job-seekers. The Secretary shall order the
search of the office or premises and seizure of
documents, paraphernalia, properties and other
implements used in illegal recruitment activities
and the closure of companies, establishments
and entities found to be engaged in the
recruitment of workers for overseas
employment, without having been licensed or
authorized to do so.
RA 8042, SEC. 6. Definition— For purposes of this
Act, illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers and includes
referring, contract services, promising or advertising
for employment abroad, whether for profit or not,
when undertaken by non-licensee or non-holder of
authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines:
Provided, That any such non-licensee or non- holder
who, in any manner, offers or promises for a fee
employment abroad to two or more persons shall be
deemed so engaged. It shall likewise include the
following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or
holder of authority:
a)! To charge or accept directly or indirectly any
amount greater than that specified in the
schedule of allowable fees prescribed by
the Secretary of Labor and Employment, or
to make a worker pay or acknowledge any
amount greater than that actually received
by him as a loan or advance;
b)! To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
c)! To give any false notice, testimony,
information or document or commit any act
of misrepresentation for the purpose of
securing a license or authority under the
Labor Code, or for the purpose of
documenting hired workers with the POEA,
which include the act of reprocessing
workers through a job order that pertains to
nonexistent work, work different from the
actual overseas work, or work with a
different employer whether registered or not
with the POEA;
d)! To include or attempt to induce a worker
already employed to quit his employment in
order to offer him another unless the transfer
is designed to liberate a worker from
oppressive terms and conditions of
 employment;
e)! To influence or attempt to influence any
person or entity not to employ any worker
who has not applied for employment
through his agency or who has formed,
joined or supported, or has contacted or is
supported by any union or workers'
organization;
f)! To engage in the recruitment or placement
of workers in jobs harmful to public health
or morality or to the dignity of the Republic
of the Philippines;
g)! To obstruct or attempt to obstruct inspection
by the Secretary of Labor and Employment
or by his duly authorized representative;
h)! To fail to submit reports on the status of
employment, placement vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and such
other matters or information as may be
required by the Secretary of Labor and
Employment;
i)! To substitute or alter to the prejudice of the
worker, employment contracts approved
and verified by the Department of Labor and
Employment from the time of actual signing
thereof by the parties up to and including
the period of the expiration of the same
without the approval of the Department of
Labor and Employment;
j)! For an officer or agent of a recruitment or
placement agency to become an officer or
member of the Board of any corporation
engaged in travel agency or to be engaged
directly or indirectly in the management of
travel agency;
k)! To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations, or for
any other reasons, other than those
authorized under the Labor Code and its
implementing rules and regulations;
l)! Failure to actually deploy a contracted
worker without valid reason as determined
by the Department of Labor and
Employment;
m)! Failure to reimburse expenses incurred by
the worker in connection with his
documentation and processing for purposes
of deployment, in cases where the
deployment does not actually take place
without the worker's fault. Illegal recruitment
when committed by a syndicate or in large
scale shall be considered an offense
involving economic sabotage; and
n)! To allow a non-Filipino citizen to head or
manage a licensed recruitment/manning
agency.
Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or
more persons conspiring or confederating with one
another. It is deemed committed in large scale if
committed against three (3) or more persons
individually or as a group.
In addition to the acts enumerated above, it shall also
be unlawful for any person or entity to commit the
following prohibited acts:
1)! Grant a loan to an overseas Filipino worker
with interest exceeding eight percent (8%) per
annum, which will be used for payment of
legal and allowable placement fees and make
the migrant worker issue, either personally or
through a guarantor or accommodation party,
postdated checks in relation to the said loan;
2)! Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to avail of a loan only from
specifically designated institutions, entities or
persons;
3)! Refuse to condone or renegotiate a loan
incurred by an overseas Filipino worker after
the latter's employment contract has been
prematurely terminated through no fault of his
or her own;
4)! Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to undergo health
examinations only from specifically
designated medical clinics, institutions, entities
or persons, except in the case of a seafarer
whose medical examination cost is
shouldered by the principal/shipowner;
5)! Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to undergo training,
seminar, instruction or schooling of any kind
 only from specifically designated institutions,
entities or persons, except for
recommendatory trainings mandated by
principals/shipowners where the latter
shoulder the cost of such trainings;
6)! For a suspended recruitment/manning
agency to engage in any kind of recruitment
activity including the processing of pending
workers' applications; and
7)! For a recruitment/manning agency or a
foreign principal/employer to pass on the
overseas Filipino worker or deduct from his
or her salary the payment of the cost of
insurance fees, premium or other insurance
related charges, as provided under the
compulsory worker's insurance coverage.
The persons criminally liable for the above offenses
are the principals, accomplices and accessories. In
case of juridical persons, the officers having
ownership, control, management or direction of their
business who are responsible for the commission of
the offense and the responsible employees/agents
thereof shall be liable.
In the filing of cases for illegal recruitment or any of
the prohibited acts under this section, the Secretary
of Labor and Employment, the POEA Administrator or
their duly authorized representatives, or any
aggrieved person may initiate the corresponding
criminal action with the appropriate office. For this
purpose, the affidavits and testimonies of operatives
or personnel from the Department of Labor and
Employment, POEA and other law enforcement
agencies who witnessed the acts constituting the
offense shall be sufficient to prosecute the accused.
In the prosecution of offenses punishable under this
section, the public prosecutors of the Department of
Justice shall collaborate with the anti-illegal
recruitment branch of the POEA and, in certain cases,
allow the POEA lawyers to take the lead in the
prosecution. The POEA lawyers who act as
prosecutors in such cases shall be entitled to receive
additional allowances as may be determined by the
POEA Administrator.
The filing of an offense punishable under this Act
shall be without prejudice to the filing of cases
punishable under other existing laws, rules or
regulations.
SEC. 7 Penalties—
(a)! Any person found guilty of illegal
recruitment shall suffer the penalty of
imprisonment of not less than twelve (12)
years and one (1) day but not more than
twenty (20) years and a fine of not less
than One million pesos (P1,000,000.00)
nor more than Two million pesos
(P2,000,000.00)
(b)! The penalty of life imprisonment and a fine
of not less than Two million pesos
(P2,000,000.00) nor more than Five
million pesos (P5,000,000.00) shall be
imposed if illegal recruitment constitutes
economic sabotage as defined therein
Provided, however, That the maximum
penalty shall be imposed if the person
illegally recruited is less than eighteen (18)
years of age or committed by a non-
licensee or non-holder of authority.
(c)! Any person found guilty of any of the
prohibited acts shall suffer the penalty of
imprisonment of not less than six (6) years
and one (1) day but not more than twelve
(12) years and a fine of not less than Five
hundred thousand pesos (P500,000.00)
nor more than One million pesos
(P1,000,000.00).
If the offender is an alien, he or she shall, in addition
to the penalties herein prescribed, be deported
without further proceedings.
In every case, conviction shall cause and carry the
automatic revocation of the license or registration of
the recruitment/manning agency, lending institutions,
training school or medical clinic.
SEC. 8. Prohibition On Officials And Employees— It
shall be unlawful for any official or employee of the
Department of Labor and Employment, the Philippine
Overseas Employment Administration, or the
Overseas Workers Welfare Administration, or the
Department of Foreign Affairs, or other government
agencies involved in the implementation of this Act,
or their relatives within the fourth civil degree of
consanguinity or affinity, to engage, directly or
indirectly, in the business of recruiting migrant
workers as defined in this Act. The penalties shall be
imposed upon them.

SEC. 9. Venue— A criminal action arising from illegal
recruitment as defined herein shall be filed with the
Regional Trial Court of the province or city where the
offense was committed or where the offended party
actually resides at the same time of the commission
of the offense: Provided, That the court where the
criminal action is first filed shall acquire jurisdiction to
the exclusion of other courts. Provided, however, That
the aforestated provisions shall also apply to those
criminal actions that have already been filed in court
at the time of the effectivity of this Act.
SEC. 10. Money Claims— Notwithstanding any
provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC)
shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days
after the filing of the complaint, the claims arising out
of an employer-employee relationship or by virtue of
any law or contract involving Filipino workers for
overseas deployment including claims for actual,
moral, exemplary and other forms of damage.
Consistent with this mandate, the NLRC shall
endeavor to update and keep abreast with the
developments in the global services industry.
The liability of the principal/employer and the
recruitment/placement agency for any and all claims
under this section shall be joint and several. This
provision shall be incorporated in the contract for
overseas employment and shall be a condition
precedent for its approval. The performance bond to
de filed by the recruitment/placement agency, as
provided by law, shall be answerable for all money
claims or damages that may be awarded to the
workers. If the recruitment/placement agency is a
juridical being, the corporate officers and directors
and partners as the case may be, shall themselves
be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period
or duration of the employment contract and shall not
be affected by any substitution, amendment or
modification made locally or in a foreign country of
the said contract.
Any compromise/amicable settlement or voluntary
agreement on money claims inclusive of damages
under this section shall be paid within thirty (30) days
from approval of the settlement by the appropriate
authority.
In case of termination of overseas employment
without just, valid or authorized cause as defined by
law or contract, or any unauthorized deductions from
the migrant worker's salary, the worker shall be
entitled to the full reimbursement if his placement fee
and the deductions made with interest at twelve
percent (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for
three (3) months for every year of the unexpired term,
whichever is less.
In case of a final and executory judgment against a
foreign employer/principal, it shall be automatically
disqualified, without further proceedings, from
participating in the Philippine Overseas Employment
Program and from recruiting and hiring Filipino
workers until and unless it fully satisfies the judgment
award.
Noncompliance with the mandatory periods for
resolutions of case provided under this section shall
subject the responsible officials to any or all of the
following penalties:
a.! The salary of any such official who fails to
render his decision or resolution within the
prescribed period shall be, or caused to be,
withheld until the said official complies
therewith;
b.! Suspension for not more than ninety (90)
days; or
c.! Dismissal from the service with disqualification
to hold any appointive public office for five (5)
years.
Provided, however, That the penalties herein provided
shall be without prejudice to any liability which any
such official may have incured under other existing
laws or rules and regulations as a consequence of
violating the provisions of this paragraph.
SEC. 11. Mandatory Periods For Resolution Of Illegal
Recruitment Cases— The preliminary investigations of
cases under this Act shall be terminated within a
period of thirty
(30) calendar days from the date of their filing. Where
the preliminary investigation is conducted by a
prosecution officer and a prima facie case is
established, the corresponding information shall be
filed in court within twenty-four (24) hours from the
termination of the investigation. If the preliminary
investigation is conducted by a judge and a prima
facie case is found to exist, prosecution officer within
forty-eight (48) hours from the date of receipt of the
records of the case.
SEC. 12. Prescriptive Periods— Illegal recruitment
cases under this Act shall prescribe in five (5) years:
Provided, however, That illegal recruitment cases
involving economic sabotage as defined herein shall
prescribe in twenty (20) years.
PATRICIA STO. TOMAS V. REY SALAC (2012)
Facts: Recruitment agencies seek to void several
provisions of the Migrant Workers and Overseas Act
(RA 8042). Said agencies assail provisions on
definition, penalties imposed, venue, and liability
regarding illegal recruitment on grounds that they
violate rights to equal protection and due process.
Ruling/Doctrine: The court upheld the constitutionality
of the assailed provisions, as the petitioners failed to
overcome the presumption of constitutionality of the
statute.
!! Sec 6 - Distinction bet licensed and non-
licensed in that licensed only liable for
“wrongful acts”
!! Sec 7 - Congress has power to determine
penalties; Court cannot question wisdom
!! Sec 9 - Rules of Court allow exception to
the territorial jurisdiction rule subj to existing
law
!! Sec 10 - No automatic liability—there must
be proof of being remiss in his duties etc
for the liability of an officer
PEOPLE V. MELISSA CHUA (2010)
Doctrine: In order to hold a person liable for illegal
recruitment, the following elements must concur:
(1) the offender undertakes any of the activities withi
n the meaning of "recruitment and placement" under
Article 13(b) of the Labor Code, or any of the
prohibited practices enumerated under Article 34 of
the Labor Code (now Section 6 of Republic Act No.
8042); and
(2) the offender has no valid license or authority
required by law to enable him to lawfully engage in
recruitment and placement of workers.
In the case of illegal recruitment in large scale, a third
element is added: that the offender commits any of
the acts of recruitment and placement against three
or more persons, individually or as a group.
Facts: 4 Private complainants filed a complaint for
illegal dismissal in large scale against Melissa Chua
alleging that the latter offered them jobs as factory
workers in Taiwan for deployment within a month.
She required each of them on separate occasions to
undergo medical examination and pay a placement
fee of P 80,000 each. Chua assured each of them
that whoever pays the application fee the
earliest can leave sooner. After completing payment,
they followed-up their applications.
However, they learned that Chua was not licensed t
o recruit workers for overseas employment. She
claimed she was only a cashier at the agency.
Ruling: Melissa Chua is liable for illegal recruitment in
large scale pursuant to Sec. 6 and 7 of RA 8042.
a.! Prohibited Practices
PERT/CPM MANPOWER V. VINUYA (2012)
Facts: The employees filed a case for illegal dismissal
against agency Pert/CPM. They were deployed to
work for Modern Metal in Dubai. Modern Metal gave
the respondents appointment letters with terms
different from those in the employment contracts of
POEA which they signed at the agency’s office in the
Philippines. When they arrived in Dubai, the
employees were subjected to working and living
conditions vastly different from that stated in the
contract. They were required respondents to sign
new employment contracts. Due to the unbearable
living and working conditions, they were forced to
resign; but, fearing that they would not be paid if they
complain, they stated in their resignation letter that the
cause was personal/family problems.
Held/Doctrine: Citing Article 34 and 38, the Court
ruled that the agency and its principal were clearly
guilty of contract substitution and the agency and its
principal were guilty of breach of contract for the
substandard living and working conditions that they
employees experienced. The employees in this case
were also constructively dismissed. With their original
contracts substituted and their oppressive working
and living conditions unmitigated or unresolved, the
respondents’ decision to resign is not surprising. The
resignation letters were dubious since it would have
been an odd coincidence that all the respondents
had, at the same time, been confronted with urgent
family problems so that they had to give up their
employment and go home.
STOLT NIELSEN TRANSPORTATION GROUP vs.
SULPECIO MEDEQUILLO JR. (2012)
DOCTRINE: The POEA Standard Employment Contract
provides that employment shall commence upon the
actual departure of the seafarer from the airport or
seaport in the port of hire. At distinction must be made
between the perfection of the employment contract and
the commencement of the employer-employee
relationship. Parties are bound not only to the fulfilment
of what has been expressly stipulated but also to all
the consequences which, according to their nature,
may be in keeping with good faith, usage and law.
The commencement of the employer-employee
relationship, would have taken place had petitioner
been actually deployed from the point of hire. Even
before the start of any employer-employee relationship,
with the perfection of the employment contract was the
birth of rights and obligations. Thus, if the reverse had
happened, that is the seafarer failed or refused to be
deployed as agreed upon, he would be liable for
damages.
FACTS: Respondent Sulpeco Medequillo filed
complaint against the petitioners to the POEA
adjudication office under illegal dismissal for the first
contract and for failure to deploy under a second
contract. While docked at MV Stolt Aspiration, he joined
the crew for nearly three months
However, he was ordered by the ship’s master to
disembark and he was repatriated back to Manila.
Respondent later was transferred to Stolt Pride for the
second contract but despite commencement of the
contract with a POEA approval, he was not deployed.
The case transferred to the LA which found the
respondent was constructively dismissed. NLRC also
affirmed with modification and upheld the finding of
unjustified termination of contract.
RULING: The Respondent was found to have been
dismissed wrongly and was awarded a actual damages
equivalent to his salary for nine (9) months as provided
by the 2nd contract.
PEOPLE vs. BERNADETTE PANSACALA (2012)
DOCTRINE: To be convicted of the crime of illegal
recruitment committed by a syndicate, the following
elements must occur:
a.! The accused have no valid license or authority
required by law to enable them to lawfully
engage in the recruitment and placement of
workers.
b.! The accused engaged in this activity of
recruitment and placement by actually recruiting,
deploying and transporting.
c.! Illegal recruitment was committed by three
persons conspiring and confederating with one
another. Two out of three persons along with
the accused-appellant who come to an
agreement and conspire with each other to
illegally recruit victims meets the third
requirement. Conspiracy may be deduced from
the mode and manner in which the offence was
perpetrated; or from the acts of the accused
evincing a joint or common purpose and
design, concerted action and community of
interest.
FACTS: Respondent Pansacala and Franz were
a convicted of the crime of Illegal Recruitment (Sec. 6 in
relation to Sec. 7(b) od RA 8042 (Migrant Workers and
Overseas Filipinos Act of 1995) for having induced AAA
and BBB to work in a Malaysian club called the Golden
Lotus and then forcing them to be sex workers . The
trial court convicted them of the crime, the CA affirmed
it with modification that the amount of exemplary
damaged be reduced to 25,000 each.
RULING: SC found respondents guilty as well despite
the other accused individuals remaining at large. The
SC held that the three elements of the crime were
present and establish including the conspiracy that
transpired. It also modified the damages to increase
from 50,000 to 500,000 as moral damages and
100,000 as exemplary damages.
PEOPLE V. JERIC FERNANDEZ (2014)
DOCTRINE: Under Article 38, illegal recruitment as “any
recruitment activities, included the prohibited practices
enumerated under Article 34, to be undertaken by non
licensed operators or non holders of authority. Any act
of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers, including referrals,
contract services, promising or advertising for
employment, locally or abroad, whether for profit or not,
provided that any person or entity which, in any manner,
offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and
placement. A higher penalty is placed for illegal
recruitment committed by a syndicate ( group of 3 or
more persons) and committed in a large scale
(committed against 3 or more persons individually or
as a group).
Elements for illegal recruitment in large scale
(1)! the accused undertook a recruitment activity under
Article 13(b) or any prohibited practice under
Article 34 of the Labor Code;
(2)! the accused did not have the license or the
authority to lawfully engage in the recruitment and
placement of workers;
(3)! the accused committed such illegal activity against
three or more persons individually or as a group.
FACTS: Jeric Fernandez promised complainants that
they would be deployed for work in Hong Kong after
payment of placement fees. Fernandez also extracted
money for purported plane tickets, hotel
accommodation, processing of a visa and placement
fees. He misrepresented his authority as a recruiter,
while also not having a license to recruit.
RULING: SC affirmed the guilty sentence given by the
Court of Appeals, with modification as to add another
count for the crime of Estafa as the appellant had falsely
pretended to possess the qualifications to recruit.
PEOPLE V BAYKER (2016)
DOCTRINE: Illegal recruitment is committed by a person
who: (a) undertakes any recruitment activity defined
under Article 13(b) or any prohibited practice
enumerated under Article 34 and Article 38 of the
Labor Code; and (b) does not have a license or
authority to lawfully engage in the recruitment and
placement of workers. It is committed in large scale
when it is committed against three or more persons
individually or as a group
FACTS: An Illegal Recruitment case and Estafa Case
was filed against Marissa Bayker and 2 others for
illegally recruiting for overseas employment three
complainants (Miparanum, Caniazares and Dahab). The
Complainants had paid them a total of Php67,000 in
processing fees, despite the respondents failing to send
them abroad on the departure date and failing to return
their money after demands.2 witnesses claimed that
Bayker never represented herself as a recruiter during
the meeting between with the 2 complainants and that
she was only at the entrapment scene because
Caniazares kept calling her to insist that she accompany
him to the house of Bermudez.
Bayker claimed that she signed receipts only as a
witness to the payments made to Langreo and
Bermudez.
RULING: The Court found Bayker’s argument untenable,
noting that all complainants had positively identified
appellant as the person who recruited them and
exacted money from them.The CA’s judgment of
Bayker’s guilt was confirmed by the SC with
modifications as to penalties.
SALAZAR vs. ACHACOSO (1990)
DOCTRINE: Art 38 (c) which had once allowed the
Philippine Overseas Employment Administration (or the
Secretary of Labor) validly issue warrants of search and
seizure (or arrest) under Article 38 of the Labor Code
is now unconstitutional. Only judges may issue
warrants.
FACTS: Salazar was operating a dance studio without
a valid license or authority from the Department of
 Labor and Employment to recruit and deploy workers
for overseas employment. The POEA Director issued
Closure and Seizure Order No. 1205which resulted into
the search and seizure of personal property in the
residence of the petitioner by POEA and police.
RULING: Article 38, paragraph (c) of the Labor Code is
declared UNCONSTITUTIONAL and null and void. The
respondents are ORDERED to return all materials seized
as a result of the implementation of Search and Seizure
Order No. 1205
5.! Enforcement
a.! Regulatory Power
Article 36. Regulatory Power— The Secretary of
Labor shall have the power to restrict and regulate
the recruitment and placement activities of all
agencies within the coverage of this Title and is
hereby authorized to issue orders and promulgate
rules and regulations to carry out the objectives and
implement the provisions of this Title.
b.! Rule-Making Power
Article 36. Regulatory Power— The Secretary of
Labor shall have the power to restrict and regulate
the recruitment and placement activities of all
agencies within the coverage of this Title and is
hereby authorized to issue orders and promulgate
rules and regulations to carry out the objectives and
implement the provisions of this Title.
c.! Visitorial Power
Article 37. Visitorial Power— The Secretary of Labor
or his duly authorized representatives may, at any
time, inspect the premises, books of accounts and
records of any person or entity covered by this Title,
require it to submit reports regularly on prescribed
forms, and act on violation of any provisions of this
Title.
6.! Integration of POEA Standard Employment Contract in
Every Contract
WALLEM MARITIME SERVICES INC V. TANAWAN
DOCTRINE: The employment of seafarers, and its
incidents, including claims for death benefits, are
governed by the contracts they sign every time they are
hired or rehired. While the seafarers and their
employers are governed by their mutual agreements,
the POEA rules and regulations require that the POEA
SEC, which contains the standard terms and conditions
of the seafarers employment in foreign ocean-going
vessels, be integrated in every seafarer’s contracts.
FACTS: Tanawan was employed by Wallem as a dozer
driver on the MV Falcon. While at sea, he sustained
injuries to his foot and to his eye. Upon repatriation, he
sought treatment for both his foot and eye then claimed
for disability pay from Wallem. Wallem countered by
saying that Tanawan’s claims had no basis as the
company physician did not declare his disability.
RULING: The Court ruled that Tanawan should have
reported the eye injury to the company-designated
physician within three working days upon his arrival in
the country pursuant to Sec. 20(B)(3) of the POEA SEC.
This provision stated that It is clear from the provision
that the one tasked to determine whether the seafarer
suffers from any disability or is fit to work is the
company-designated physician. The assessment of the
company-designated physician is not final, binding or
conclusive on the seafarer, the labor tribunals, or the
courts. Another determination for the seafarer’s
entitlement to permanent disability benefits is his
inability to work for more than 120 days. In this case,
Tanawan’s claim for disability benefits due to the eye
injury was already barred by his failure to report the
injury and to have his eye examined by a company-
designated physician. The Court partially granted the
Petition for Review in favour of Wallem; and deleted the
award of US$20,900.00 as disability benefits for the
eye injury.
a.! Liberal Construction
b.! Terms and Conditions
Abante v. KJGS Fleet Management
DOCTRINE:POEA standard employment contract for
seamen was designed primarily for the protection and
benefit of Filipino seamen in the pursuit of their
employment on board ocean-going vessels. The
provisions must be construed and applied fairly,
reasonably and liberally in their favor.
The law looks tenderly on the laborer. Where the
evidence may be reasonably interpreted in two
divergent ways, one prejudicial and the other favorable
to him, the balance must be tilted in his favor consistent
with the principle of social justice.

FACTS: Leopoldo Abante was hired by KJGS Fleet
Management Manila to work as a seaman aboard M/T
Rathboyne. While carrying equipment on board the
vessel, Abante slipped and hurt his back. Abante was
examined by the company-designated physician (Dr.
Lim) who diagnosed him to him with a disc condition
requiring surgery. He was examined 10 more times
until he was cleared to go back to work (it took a year).
However, Abante sought the opinion of another doctor,
Dr. Caja, who diagnosed him to have "failed back
syndrome" and gave a grade 6 disability rating (means
he is medically unfit to work again as a seaman). The
CA and LA dismissed the complaint on the ground that
Sec. 20 (B) of POEA Memo Circular No. 9, series of
2000 (states: in the event of conflict between the
assessment of the company-designated physician and
the doctor chosen by the seafarer, the opinion of a 3rd
doctor agreed on by both the employer and the
seafarer should be sought.
RULING: The CA reversed and set aside. Respondents
are held jointly and severally liable to pay petitioner the
following: a) permanent total disability benefits of
US$60,000.00 at its peso equivalent at the time of
actual payment; and b) attorney's fees of ten percent
(10%) of the total monetary award at its peso equivalent
at the time of actual payment.
7.! Limits of Freedom of Contract: Applicability of Foreign
Laws
INDUSTRIAL PERSONNEL & MANAGEMENT
SERVICES, INC. vs. VERA
DOCTRINE: Philippine laws apply even to overseas
employment contracts as rooted on Art. 13, Sec. 3 of
the 1987 Constitution. As an exception foreign law shall
govern the contract if the following requisites are
present:
1.! Express stipulation that a foreign law will govern
2.! Foreign law invoked must be proven before the
courts with PH rules on evidence.
3.! Foreign law stipulated not contrary to law,
morals, good customs, public order or public
policy. Overseas employment contract
processed through POEA.
FACTS: Respondent Arriola was a licensed general
surgeon who was offered a job by as a Safety Officer
in A Madagascar. He was to work for a period of 19
months but after 3 months he received notice of pre-
termination of employment. SNC Lavalin stated it was
because of the weakened economy of Madagascar
from the Global Financial Crisis. Arriola filed for illegal
dismissal and non-payment of benefits. His employers
claimed that under the ruling in EDI-STAFFBUILDERS,
labor laws of a foreign country incorporated in a
contract with OFWs are valid.
RULING: The court upheld the ruling of illegal dismissal
and non-applicability of the foreign law. It went on to
state the requisites for foreign law to apply.
8.! Joint and Several Liability of Agent and Principal
2016 POEA Rules Part I Rule II No. 17
Joint and Several Liability — refers to the nature of
liability of the principal/employer and the licensed
recruitment agency, for any and all claims arising out
of the implementation of the employment contract
involving Overseas Filipino Workers. It shall likewise
refer to the nature of liability of partners, or officers
and directors with the partnership or corporation over
claims arising from an employer-employee
relationship
2016 POEA Rules, Part II, Rule II, Sec 4.(f)
f. A duly notarized undertaking by the sole proprietor,
the managing partner, or the president of the
corporation stating that the applicant shall:
x x x
8. Assume joint and several liability with the
employer for all claims and liabilities which may
arise in connection with the implementation of the
contract, including but not limited to unpaid
wages, death and disability compensation and
repatriation
RA 8042 Sec 10 Pars 1,2,3,4,5
MONEY CLAIMS— Notwithstanding any provision of
law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after filing of the
complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or
contract involving Filipino workers for overseas
deployment including claims for actual, moral,
exemplary and other forms of damages.
The liability of the principal/employer and the
recruitment/placement agency for any and all claims
under this section shall be joint and several. This
provisions shall be incorporated in the contract for
overseas employment and shall be a condition
precedent for its approval. The performance bond to
be filed by the recruitment/placement agency, as
provided by law, shall be answerable for all money
claims or damages that may be awarded to the
workers. If the recruitment/placement agency is a
juridical being, the corporate officers and directors
and partners as the case may be, shall themselves
be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period
or duration of the employment contract and shall not
be affected by any substitution, amendment or
modification made locally or in a foreign country of
the said contract.
Any compromise/amicable settlement or voluntary
agreement on money claims inclusive of damages
under this section shall be paid within four (4) months
from the approval of the settlement by the appropriate
authority.
In case of termination of overseas employment
without just, valid or authorized cause as defined by
law or contract, the workers shall be entitled to the
full reimbursement of his placement fee with interest
of twelve percent (12%) per annum, plus his salaries
for the unexpired portion of his employment contract
or for three (3) months for every year of the
unexpired term, whichever is less.
RA 8042, Section 9. VENUE— A criminal action
arising from illegal recruitment as defined herein shall
be filed with the Regional Trial Court of the province
or city where the offense was committed or where
the offended party actually resides at the same time
of the commission of the offense: Provided, That the
court where the criminal action is first filed shall
acquire jurisdiction to the exclusion of other courts.
Provided, however, That the aforestated provisions
shall also apply to those criminal actions that have
already been filed in court at the time of the effectivity
of this Act.
Omnibus Rules Implementing RA8042, Rule IV
Section 6. VENUE. - A criminal action arising from
illegal recruitment as defined under this Rule shall be
filed
with the Regional Trial Court of the province or city
where the offense was committed or where
the offended party actually resides at the time of the
commission of the offense; Provided, that
the court where the criminal action is first filed shall
acquire jurisdiction to the exclusion of other courts.
RA8042 Sec 10 Part 1
Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the priginal and
exclusive jurisdiction to hear and decide, within ninety
(90) calendar days after filing of the complaint, the
claims arising out of an employer-employee
relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and
other forms of damages.
RA8042 Omnibus Rules, Rule VII, Section 1.
Jurisdiction of Labor Arbiters.
Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the NLRC
shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims
arising out of an employer-employee
relationship or by virtue of any law or contract
involving Filipino workers for overseas
deployment including claims for actual, moral,
exemplary and other forms of damages.
POSEIDON INTERNATIONAL MARITIME SERVICES INC
vs. TITO R. TAMALA (2013)
DOCTRINE: Section 10 of RA 8042 refers to only to
cases of illegal dismissal or dismissal without any just,
authorized or valid cause and finds no application in
cases where the overseas Filipino worker was not
illegally dismissed.
FACTS: Poseidon and Van Doorn the employer hired
respondents to fishing vessels on September 17, 2004.
On November 20, 2004, the operations abruptly
stopped and did not resume. On May 25, 2005, before
the respondents disembarked from the vessels, an
agreement was executed (May 25, 2005 agreement)
regarding the respondents’ salaries, such that the
respondents would get the full or 100% of their unpaid
salaries for the unexpired portion of their pre-
terminated contract in accordance with Philippine laws.
However, Poseidon and Van Doorn entered another
agreement reducing to 50% of the respondents’ unpaid
salaries (settlement pay) for the unexpired portion of
their contract. The respondents signed a settlement pay
under letter of acceptance and quitclaim but alter filed
a complaint for illegal termination with prayer for
payment for the unexpired portion of the contract.
RULING: The court found that there was a valid
dismissal that complied with the requisites of Article
283, the respondents received their full salary in
accordance with their first agreement while operations
had stopped. Poseidon ceased its fishing operations in
an exercise of management prerogative, Section 10 RA
No. 8042 does not apply
SAMEER OVERSEAS PLACEMENT AGENCY INC. vs.
JOY CABILES
DOCTRINE: In Serrano v. Gallant Maritime Services, Inc.
and Marlow Navigation Co., Inc., this court ruled that the
clause “or for three (3) months for every year of the
unexpired term, whichever is less” is unconstitutional for
violating the equal protection clause and substantive
due process. Thus, Sec 10 of RA 8042 states that
overseas workers who were terminated without just,
valid, or authorized cause “shall be entitled to the full
reimbursement of his placement fee with interest of 12%
per annum, plus his salaries for the unexpired portion
of his employment contract.” must be interpreted as in
favour of the labourer receiving money claims.
FACTS: Respondent Joy Cabiles signed a one-year
employment contract for a monthly salary to be
deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal)
on June 26, 1997. She alleged that in her employment
contract, she agreed to work as quality control for one
year, but upon reaching her destination,she was told
that she was a cutter. On July 14, 1997, without prior
notice, Cabiles was terminated. For her 3 month stay,
she only earned part of her salary (9k/15k) with
deductions for a plane ticket.
RULING: Despite the reinstatement of the clause “or for
three (3) months for every year of the unexpired term,
whichever is less” was reinstated in Republic Act No.
8042 upon promulgation of Republic Act No. 10022 in
2010, The Court held that the award of the three-month
equivalent of respondent’s salary should be increased
to the amount equivalent to the unexpired term of the
employment contract following the constitutional rights
and Serrano v. Gallant.
Serrano v. Gallant Maritime Services, Inc. (2009)
Doctrine: Sec. 10 of R.A 8042 is unconstitutional for
violating the petitioner’s right to equal protection. It
contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term
employees who are illegally discharged, it imposes a
3-month cap on the claim of Overseas Filipino
Workers (OFWs), with an unexpired portion of one
year or more in their contracts, but none on the
claims of other OFWs or local workers with fixed-term
employment.
Facts: Petitioner was an employee of respondent
company under a 12-month contract. Upon being
illegally dismissed, he pleaded to be paid salaries for
the entire unexpired portion of his contract (9 months,
23 days). The NLRC and the CA paid him salaries
corresponding to 3 months only, citing Sec. 10 of
R.A. No. 8042, which provided that an illegally
dismissed OFW is entitled to his salary for the
unexpired portion of his employment contract or for 3
months for every year of the unexpired term,
whichever is less.
Held: Petitioner is entitled to his salaries for the entire
unexpired period of 9 months and 23 days of his
employment contract.
See: Pert/CPM v. Vinuya (supra)
3) POEA over Administrative Cases
a) Pre-employment Cases
 Omnibus Rules Implementing RA 8042
Sec 28. The POEA shall exercise original and exclusive
jurisdiction to hear and decide:
(a) all cases which are administrative in character,
involving or arising out of violations of rules and
regulations to licensing and registration of recruitment
and employment agencies or entities.
2016 POEA Rules, Part VI, Rule 1, Sec. 138, par. 2
The Administration shall likewise exercise original and
exclusive jurisdiction to hear and decide disciplinary
action cases against Overseas Filipino Workers and
principals/employers that are administrative in
character, excluding money claims.
Eastern Mediterranean Maritime Ltd. v. Surio (2012)
Doctrine: NLRC has no jurisdiction to review on
appeal cases decided by the POEA on matters
pertaining to disciplinary actions against private
respondents, as appellate jurisdiction was vested in
the Secretary of Labor pursuant to the 2003 POEA
Rules and Regulations.
Facts: Petitioners filed a complaint against
respondents for disciplinary action based on breach
of discipline and reimbursement of the wage
increases with the POEA. Pending such complaint, RA
8042 took effect and vested in the Labor Arbiter
original and exclusive jurisdiction over all money
claims arising out of employer-employee relationships
involving OFWs. POEA dismissed the complaint.
Petitioners filed an appeal with NLRC, which was
dismissed for lack of appellate jurisdiction.
Held: Petitioner’s contention that the NLRC should
have appellate authority over the POEA’s decision in
the disciplinary action has no merit. Sec. 10 of RA
8042 transferred the original and exclusive jurisdiction
to hear and decide money claims involving OFWs
from the POEA to the Labor Arbiters, but did not
remove from the POEA the original and exclusive
jurisdiction to hear and decide all disciplinary action
cases and other special cases administrative in
character involving such workers.
3. Public Sector Agencies - Employment Offices
Art 12. It is the policy of the State:
(f) To strengthen the network of public employment
offices and rationalize the participation of the private
sector in the recruitment and placement of workers,
locally and overseas, to serve national development
objectives.
Art 14. The Secretary of Labor shall have the power
and authority:
(a) To organize and establish new employment offices
in addition to the existing employment offices under
the Department of Labor as the need arises.
EO 247 (Reorganizing POEA)
Sec. 3. In the pursuit of its mandate, the Administration
shall have the following powers and functions:
(a) Regulate private sector participation in the
recruitment and overseas placement of workers by
setting up a licensing and registration system;
(b) Formulate and implement, in coordination with
appropriate entities concerned, when necessary, a
system for promoting and monitoring the overseas
employment of Filipino workers taking into
consideration their welfare and the domestic
manpower requirements;
(c) Protect the rights of Filipino workers for overseas
employment to fair and equitable recruitment and
employment practices and ensure their welfare;
(d) Exercise original and exclusive jurisdiction to hear
and decide all claims arising out of an employer-
employee relationship or by virtue of any law or
contract involving Filipino workers for overseas
employment including the disciplinary cases; and all
preemployment cases which are administrative in
character involving or arising out of violation or
requirement laws, rules and regulations including
money claims arising therefrom, or violation of the
conditions for issuance of license or authority to
recruit workers.
All prohibited recruitment activities and practices which
are penal in character as enumerated and defined
under and by virtue of existing laws, shall be
prosecuted in the
regular courts in close coordination with the
appropriate Departments and agencies concerned;
(e) Maintain a registry of skills for overseas
placement;
(f) Recruit and place workers to service the
requirements for trained and competent Filipino
workers by foreign governments and their
instrumentalities and such other
employers as public interest may require;
(g) Promote the development of skills and careful
selection of Filipino workers;
(h) Undertake overseas market development activities
for placement of Filipino workers;
(i) Secure the best terms and conditions of
employment of Filipino contract workers and
ensure compliance therewith;
(j) Promote and protect the well-being of Filipino
workers overseas;
(k) Develop and implement programs for the effective
monitoring of returning contract workers, promoting
their re-training and re-employment or their smooth
re-integration into the mainstream of national
economy in coordination with other government
agencies;
(l) Institute a system for ensuring fair and speedy
disposition of cases involving violation or recruitment
rules and regulations as well as violation of terms and
conditions of overseas employment;
(m) Establish a system for speedy and efficient
enforcement of decisions laid down through the
exercise of its adjudicatory function;
(n) Establish and maintain close relationship and enter
into joint projects with the Department of Foreign
Affairs, Philippine Tourism Authority, Manila
International Airport Authority, Department of Justice,
Department of Budget and Management and other
relevant government entities, in the pursuit of its
objectives. The Administration shall also establish and
maintain joint projects with private organizations,
domestic or foreign, in the furtherance of its
objectives.
4. Sanctions
a. Local Employment
Art. 39. Penalties
.! (a) The penalty of life imprisonment and a fine of One
Hundred Thousand Pesos (P1000,000.00) shall be
imposed if illegal recruitment constitutes economic
sabotage as defined herein;
.!
.! (b) Any licensee or holder of authority found violating
or causing another to violate any provision of this Title
or its implementing rules and regulations shall, upon
conviction thereof, suffer the penalty of imprisonment
of not less than two years nor more than five years or
a fine of not less than P10,000 nor more than
P50,000, or both such imprisonment and fine, at the
discretion of the court;
.!
.! (c) Any person who is neither a licensee nor a
holder of authority under this Title found violating any
provision thereof or its implementing rules and
regulations shall, upon conviction thereof, suffer the
penalty of imprisonment of not less than four years
nor more than eight years or a fine of not less than
P20,000 nor more than P100,000 or both such
imprisonment and fine, at the discretion of the court;
.!
.! (d) If the offender is a corporation, partnership,
association or entity, the penalty shall be imposed
upon the officer or officers of the corporation,
partnership, association or entity responsible for
violation; and if such officer is an alien, he shall, in
addition to the penalties herein prescribed, be
deported without further proceedings;
.!
.! (e) In every case, conviction shall cause and carry
the automatic revocation of the license or authority
and all the permits and privileges granted to such
person or entity under this Title, and the forfeiture of
the cash and surety bonds in favor of the Overseas
Employment Development Board or the National
Seamen Board, as the case may be, both of which
are authorized to use the same exclusively to
promote their objectives.
b. Overseas Employment
Art. 35. Suspension and/or Cancellation of License or
Authority.
The Minister of Labor shall have the power to
suspend or cancel any license or authority to recruit
employees for overseas employment for violation of
rules and regulations issued by the Ministry of Labor,
the Overseas Employment Development Board, or for
violation of the provisions of this and other applicable
laws, General Orders and Letters of Instructions.
RA. 8042
Sec. 6. DEFINITIONS. – For purposes of this Act,
illegal
recruitment shall mean any act of canvassing,
enlisting,
contracting, transporting, utilizing, hiring, procuring
workers and includes referring, contact services,
promising or advertising for employment abroad,
whether for profit or not, when undertaken by a non-
license or non-holder of authority contemplated under
Article 13(f) of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of the
Philippines. Provided, that such non-license 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. It shall likewise include the
following acts, whether committed by any persons,
whether a non-licensee, non-holder, licensee or
holder of authority.
(a) To charge or accept directly or indirectly any
amount
greater than the specified in the schedule of allowable
fees prescribed by the Secretary of Labor and
Employment, or to make a worker pay any amount
greater than that actually received by him as a loan or
advance;
(b) To furnish or publish any false notice or
information or document in relation to recruitment or
employment;
(c) To give any false notice, testimony, information or
document or commit any act of misrepresentation for
the
purpose of securing a license or authority under the
Labor Code;
(d) To induce or attempt to induce a worker already
employed to quit his employment in order to offer him
another unless the transfer is designed to liberate a
worker from oppressive terms and conditions of
employment;
(e) To influence or attempt to influence any persons
or entity not to employ any worker who has not
applied for
employment through his agency;
(f) To engage in the recruitment of placement of
workers in jobs harmful to public health or morality or
to dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by
the
Secretary of Labor and Employment or by his duly
authorized representative;
(h) To fail to submit reports on the status of
employment, placement vacancies, remittances of
foreign exchange earnings, separations from jobs,
departures and such other matters or information as
may be required by the Secretary of Labor and
Employment;
(i) To substitute or alter to the prejudice of the worker,
employment contracts approved and verified by the
Department of Labor and Employment from the time
of
actual signing thereof by the parties up to and
including the period of the expiration of the same
without the approval of the Department of Labor and
Employment;
(j) For an officer or agent of a recruitment or
placement
agency to become an officer or member of the Board
of any corporation engaged in travel agency or to be
engaged directly on indirectly in the management of a
travel agency;
(k) To withhold or deny travel documents from
applicant
workers before departure for monetary or financial
considerations other than those authorized under the
Labor Code and its implementing rules and
regulations;
(l) Failure to actually deploy without valid reasons as
determined by the Department of Labor and
Employment; and
(m) Failure to reimburse expenses incurred by the
workers in connection with his documentation and
processing for purposes of deployment, in cases
where the deployment does not actually take place
without the worker’s fault. Illegal recruitment when
committed by a syndicate or in large scale shall be
considered as offense involving economic sabotage.
Illegal recruitment is deemed committed by a
syndicate
carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is
deemed committed in large scale if committed against
three (3) or more persons individually or as a group.
The persons criminally liable for the above offenses
are the principals, accomplices and accessories. In
case of juridical persons, the officers having control,
management or direction of their business shall be
liable.
SEC. 7. PENALTIES
(a) Any person found guilty of illegal recruitment shall
suffer the penalty of imprisonment of not less than six
(6) years and one (1) day but not more than twelve
(12) years and a fine not less than two hundred
thousand pesos (P200,000.00) nor more than five
hundred thousand pesos (P500,000.00).
(b) The penalty of life imprisonment and a fine of not
less than five hundred thousand pesos (P500,000.00)
nor more than one million pesos (P1,000,000.00)
shall be imposed if illegal recruitment constitutes
economic sabotage as defined herein.
Provided, however, that the maximum penalty shall be
imposed if the person illegally recruited is less than
eighteen (18) years of age or committed by a non-
licensee or nonholder of authority.
SEC. 10. MONEY CLAIMS. Notwithstanding any
provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall
have the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after filing of
the complaint, the claims arising out of an employer
employee relationship or by virtue of any law or
contract involving Filipino workers for overseas
deployment including claims for actual, moral,
exemplary and other forms of damages.
5. Issues and Questions on Overseas Employment
Readings:
1.! Ofreneo, Rene, et al., Migration of Skills, Talents,
and Expertise Development Challenges for the
Philippines, pp. 3 – 17, 31 – 40.
2.! Licuanan, Patricia B. Katas ng Saudi, a closer look.
PLR Vol. 9, No. 1 (1985).
3.! Ofreneo, Rene. Is Migration the Country’s
Development Option? In Migration, Development
and Policy Reforms, pp. 20 – 31.
6. Alien Employment Regulation
Labor Code
Art. 12. It is the policy of the State:
(e) To regulate the employment of aliens, including
the establishment of a registration and/or work permit
system;
Art. 40. Any alien seeking admission to the Philippines
for employment purposes and any domestic or
foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an
employment permit from the Department of Labor.
The employment permit may be issued to a non-
resident alien or to 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.
For an enterprise registered in preferred areas of
investments, said employment permit may be issued
upon recommendation of the government agency
charged with the supervision of said registered
enterprise.
Art. 41. After the issuance of an employment permit,
the alien shall not transfer to another job or change
his employer without prior approval of the Secretary of
Labor.
Any non-resident alien who shall take up employment
in violation of the provision of this Title and its
implementing rules and regulations shall be punished
in accordance with the provisions of Articles 289 and
290 of the Labor Code.
In addition, the alien worker shall be subject to
deportation after service of his sentence.
Art. 42. Any employer employing non-resident foreign
nationals on the effective date of this Code shall
submit a list of such nationals to the Secretary of
Labor within thirty (30) days after such date indicating
their names, citizenship, foreign and local addresses,
nature of employment and status of stay in the
country. The Secretary of Labor shall then determine if
they are entitled to an employment permit.
Ombinus Rules, Book 1, RULE XIV: Employment of
Aliens
SECTION 1. Coverage. — This Rule shall apply to all
aliens employed or seeking employment in the
Philippines, and their present or prospective
employers.
SECTION 2. Submission of list. — All employers
employing foreign nationals, whether resident or
nonresident shall submit a list of such nationals to the
Bureau indicating their names, citizenship, foreign and
local addresses; nature of employment and status of
stay in the Philippines.
SECTION 3. Registration of resident aliens. — All
employed resident aliens shall register with the
Bureau under such guidelines as may be issued by it.
SECTION 4. Employment permit required for entry. —
No alien seeking employment, whether on resident or
non-resident status, may enter the Philippines without
first securing an employment permit from the
Department of Labor and Employment. If an alien
enters the country under a non-working visa and
wishes to be employed thereafter, he may only be
allowed to be employed upon presentation of a duly
approved employment permit.
SECTION 5. Requirements for employment permit
application. — The application for an employment
permit shall be accompanied by the following:
(a) Curriculum vitae duly signed by the applicant
indicating his educational background, his work
experience and other data showing that he possesses
high technical skills in his trade or profession;
(b) Contract of employment between the employer
and the principal which shall embody the following,
among others: (1) That the non-resident alien worker
shall comply with all applicable laws and rules and
regulations of the Philippines; (2) That the non-
resident alien worker and the employer shall bind
themselves to train at least two (2) Filipino
understudies for a period to be determined by the
Secretary of Labor and Employment; and (3) That he
shall not engage in any gainful employment other
than that for which he was issued a permit.
(c) A designation by the employer of at least two (2)
understudies for every alien worker. Such
understudies must be the most ranking regular
employees in the section or department for which the
expatriates are being hired to ensure the actual
transfer of technology.
SECTION 6. Issuances of employment permit. — The
Secretary of Labor and Employment may issue an
employment permit to the applicant based on:
a) Compliance by the applicant and his employer with
the requirements of Section 2 hereof;
b) Report of the Bureau Director as to the availability
or non-availability of any person in the Philippines
who is competent, able, and willing to do the job for
which the services of the applicant are desired;
c) His assessment as to whether or not the
employment of the applicant will redound to the
national interest;
d) Admissibility of the alien as certified by the
Commission on Immigration and Deportation;
e) The recommendation of the Board of Investments
or other appropriate government agencies if the
applicant will be employed in preferred areas of
investments or in accordance with imperatives of
economic developments; and
f) Payments of a P100.00 fee.
SECTION 7. Duration of employment permit. —
Subject to renewal upon showing of good cause, the
employment permit shall be valid for a minimum
period of one (1) year starting from the date of its
issuance unless sooner revoked by the Secretary of
Labor and Employment for violation of any provisions
of the Code or of these Rules.
SECTION 8. Advice to Commission on Immigration
and Deportation. — The Bureau shall advice the
Commission on Immigration and Deportation on the
issuance of an employment permit to an applicant.
SECTION 9. Understudy Training Program. — The
employer shall submit a training program for his
understudies to the Bureau within thirty (30) days
upon arrival of the alien workers. The supervision of
the training program shall be the responsibility of the
Bureau and shall be in accordance with standards
established by the Secretary of Labor and
Employment.
1987 Constitution, Art. XII.
Section 12. The State shall promote the preferential
use of Filipino labor, domestic materials and locally
produced goods, and adopt measures that help make
them competitive.
a. Coverage; Exemption
Art. 40. Employment Permit of Non-resident Aliens.
Any alien seeking admission to the Philippines for
employment purposes and any domestic or foreign
employer who desires to engage an alien for
employment in the Philippines shall obtain an
employment permit from the DOLE.
The employment permit may be issued to a non-
resident alien or to 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.
For an enterprise registered in preferred areas of
investments, said employment permit may be issued
upon recommendation of the government agency
charged with the supervision of said registered
enterprise.
DO No. 146-15
Sec. 1. Coverage. All foreign nationals who intend to
engage in gainful employment in the Philippines shall
apply for an Alien Employment Permit.
As used in this Rule, gainful employment shall refer to
a state or condition that creates an employer-
employee relationship between the Philippine-based
company and the foreign national where the former
has the power to hire or dismiss the foreign national
from employment, pays the salaries or wages thereof
and has authority to control the performance or
conduct the tasks and duties.
Sec. 2. Exemptions. The following categories of
foreign
nationals are exempt from securing an employment
permit:
(a) All members of diplomatic service and foreign
government officials accredited by and with reciprocity
arrangement with the Philippine government.
(b) Officers and staff of international organisations of
which the Philippine government is a member and
their legitimate spouses desiring to work in the
Philippines.
(c) All foreign nationals granted exception by law.
(d) Owners and representatives of foreign principals
whose companies are accredited by the POEA, who
come to the Philippines for a limited period and solely
for the purpose of interviewing Filipino applicants for
employment abroad.
(e) Foreign nationals who come to the Philippines to
teach, present, and/or conduct research studies in
universities and colleges as visiting, exchange, or
adjunct professors under formal agreements between
the universities or colleges in the Philippines and
foreign universities or colleges, or between the
Philippine and foreign government: Provided that the
exemption is on a reciprocal basis.
(f) Permanent resident foreign nationals and
probationary or temporary resident visa holders under
Section 13 of the Philippine Immigration Act of 1940.
Almodiel v. NLRC (1993)
Doctrine: Article 40 of the Labor Code which requires
employment permit refers to non-resident aliens. The
employment permit is required for entry into the
country for employment purposes and is issued after
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.
Facts: Petitioner was a cost accounting manager
whose position was abolished on the ground of
redundancy. He filed an action for illegal dismissal
and claimed that the functions of his position were
absorbed by the department headed by
Danny Ang Tan Chai, a resident alien who had no
working permit from DOLE.
Held: His termination was legal under Art. 283 of the
Labor Code, which provides that an employer may
dismiss an employee on the ground of redundancy.
On the issue surrounding Chai, since he is already a
resident alien he does not fall within the ambit of
Article 40 of the Labor Code.
McBurnie v. Ganzon (2013)
Doctrine: Any alien seeking admission to the
Philippines for employment purposes and any
domestic or foreign employer who desires to engage
an alien for employment in the Philippines shall obtain
an employment permit from the Department of Labor.
Facts: Petitioner is an Australian national who worked
with respondent company EGI-Managers, Inc. under a
5-year contract. After 6 months of working, he was
informed that his services were no longer needed
since the company's project will no longer push
through. He filed an action for illegal dismissal. EGI
argued that he could not have been illegally
dismissed because he was not an employee but a
potential investor.
Held: Petitioner was not illegally dismissed. Since he is
an Australian seeking to claim under our labor laws, it
is necessary for him to establish, first and foremost,
that he was qualified and duly authorized to obtain
employment within our jurisdiction pursuant to Art. 40
of the Labor Code. A foreign national’s failure to seek
an employment permit prior to employment poses a
serious problem in seeking relief from the Court.
He failed to present any employment permit which
would have authorized him to obtain employment in
the Philippines. This negates his claim that he had
been performing work for the respondents by virtue of
an employer-employee relationship. Absent an
employer-employee relationship, he could not
successfully claim that he was dismissed, much less
illegally dismissed.
b. Excluded
DO No. 146-15
Sec. 3. The following categories of foreign nationals
are
excluded from securing an employment permit:
(a) 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.
(b) 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.
(c) Those providing consultancy services who do not
have employees in the Philippines.
(d) Intra-corporate transfer who is a manager,
executive, or specialist as defined below in
accordance with Trade Agreements and an employee
of the foreign service supplier for at least 1 year prior
to deployment to a branch, subsidiary, affiliate or
representative office in the Philippines.
i. an Executive: a natural person within the
organization who primarily directs the management
of the organization and exercises wide latitude in
decision making and receives only general
supervision or direction from higher level
executives, the board of directors, or stockholders
of the business; an executive would not directly
perform tasks related to the actual provision of the
service or services of the organization;
ii. a Manager: a natural person within the
organization who primarily directs the
organization/department/ subdivision and exercises
supervisory and control functions over other
supervisory, managerial or
professional staff; does not include first line
supervisors unless employees supervised are
professional; does not include employees who
primarily performs tasks
necessary for the provision of the service; or
iii. a Specialist: a natural person within the
organization who possesses knowledge at an
advanced level of expertise essential to the
establishment/provision of the service and/or
possesses proprietary knowledge of the
organisation’s service, research equipment,
techniques or management; may include, but is not
limited to, members of a licensed profession.
(e) Contractual service supplier who is a manager
executive or specialist and an employee of a foreign
service supplier which has no commercial presence
in the Philippines:
i. who enters the Philippines temporarily to supply a
service pursuant to a contract between his/her
employer and a service consumer in the
Philippines;
ii. must possess the appropriate educational and
professional qualifications; and
iii. must be employed by the foreign service
supplier for at least 1 year prior to the supply of
service in the Philippines.
c. Conditions for Grant of Permit; Denial
DO No. 146-15
Sec 4. Procedure in the Processing of Applications.
(a) All applications for AEP shall be filed and
processed at the DOLE Regional Office or Field Office
having jurisdiction over the intended place of work. A
duly accomplished application form with the ff.
complete documentary requirements must be
submitted:
1. photocopy of passport w/ visa, or certificate of
Recognition for Refugees or Stateless person;
2. original copy of notarised appointment or
contract of employment enumerating the duties and
responsibilities, annual salary, and other benefits of
the foreign nationals;
3. photocopy of Mayor’s permit to operate, in case
of
locators in economic zones, Certification from PEZA
or Economic Zone Authority that the Company is
located and operating within the economic zone,
while in case of a construction company,
photocopy of license from PCAB or D.O. 18-A
registration should be submitted in lieu of Mayor’s
Permit; and
4. copy of employer’s understudy training program
to be conducted by the foreign national to transfer
knowledge and/or skills to the Filipino worker.
(b) In the case of foreign nationals to be assigned in
related companies, applications may be filed in the
Regional Office of Field Office having jurisdiction over
any of the applicant’s intended places of work.
(c) Additional position of foreign national in the same
company or subsequent assignment in related
companies during validity or renewal of the AEP will
be
subject for publication requirement. A change of
position
or employer shall require a new AEP.
(d) At any given time, only 1 AEP shall be issued to a
foreign national. A foreign national may be issued only
1 AEP at a given time.
Sec 5. Fees.
Upon filing of the application the applicant shall pay a
fee of P9,000 for an AEP with a validity of only 1
year. In case the period of employment is more than
1 year, an additional 4,000 shall be charged for every
additional year of fraction thereof. In case of renewal,
the applicant shall pay a permit fee of P4,000 for
each year of validity or fraction thereof.
A courier of P200 shall be charged to the foreign
national upon the implementation of the AEP inline
application system.
Loss of AEP or change of information or entries in the
AEP shall be subject to the payment of P1,500 for
AEP replacement. In case of loss, the request for
replacement shall be supported by a duly notarised
Affidavit of Loss. All fees covered by official receipt
issued by the Regional Office are non-refundable.
Sec 6. Labor Market Test.
The DOLE Regional Director shall publish in a
newspaper of general circulation all applications for
new AEP, change or additional position in the same
company or subsequent assignment in related
companies within 2 work days from receipt of
application.
The same shall be published in the DOLE websites
and posted in the POSO, such publication and
posting shall be for a period of 30 days and shall
contain the name, position, employer, and address, a
brief description of the functions to be performed by
the foreign national, qualifications, monthly salary
range and other benefits, if there are any.
It shall also indicate in the same notice of publication
that any person in the Philippines is competent, able
and willing at the time of the application to perform
the services for which the foreign national is desired
may file an objection at the DOLE Regional Office.
Any objection or information against the employment
of the foreign national relative to labor market test
must be filed with the Regional Office within 30 days
after publication.
The DOLE Regional Office shall refer to the DOLE
Skills
Registry System, the Professional Registry Regulation
Commission Registry of Professionals, and TESDA
registry or certified workers to establish availability or
non-availability of able and qualified Filipino worker.
Information or criminal offense and grave misconduct
in
dealing with or ill treatment of workers maybe filed
with
Regional Officers any time.
Sec 7. Processing Period.
Applications for new AEP shall be processed and an
AEP shall be issued within 24 hours after publication
and payment of required fees and fines, if there is
any. Application for rental of AEP shall be processed
within 24 hours after receipt.
Sec 8. Ocular Inspection.
The authorized representative of the Regional Director
may conduct ocular inspection to verify legitimacy of
employment of the foreign national as deemed
necessary, within 2 working days upon payment of
fees.
Sec. 11. Denial of Application or Renewal.
An application or renewal of AEP may be denied by
the Regional Director based on the ff. grounds:
a. misrepresentation of facts in the application,
which includes fraudulent misrepresentation that is a
false statement that will have a negative effect in the
evaluation of the application was made knowingly,
or without belief in its truth, or recklessly whether it
is true or false;

b. submission of falsified documents;
c. the foreign national has been convicted of a
criminal offense or a fugitive from justice in the
country or abroad;
d. grave misconduct in dealing with or ill treatment
of
workers; or
e. availability of a Filipino who is competent, able
and
willing to do the job intended for or being
performed by the foreign national.
The Regional Director shall issue an order denying
the
application for new/renewal of APE which shall have
the
effect of forfeiture of fees paid by the applicant.
Sec 13. Effect of Denial/Cancellation.
A foreign national whose AEP has been denied or
cancelled is disqualified to re-apply within a period of
10 years in case the grounds for denial or
cancellation is any of the following:
a. conviction of criminal offense or fugitive from
justice in the country or abroad
b. grave misconduct in dealing with or ill treatment
of
workers
General Milling Corp. v. Torres (1991)
Doctrine: The Department of Labor is the agency
vested with jurisdiction to determine the question of
availability of local workers, for the purpose of
granting or denying applications for AEPs.
Facts: Petitioner Earl Cone worked as a sports
consultant and coach for petitioner GMC under an
Alien Employment Permit issued by DOLE-NCR. His
permit was later on renewed by the DOLE Regional
Director. Private Respondent Basketball Coaches
Association of the Philippines (BCAP) appealed this
decision to the SOLE, which then prompted the latter
to order the cancellation of petitioner Cone's
permit because it found that there was no showing
that there is no person in the Philippines who is
competent, able and willing to perform the services
required nor that the hiring of petitioner Cone would
redound to the national interest.
Held: Petitioners’ contention that respondent Secretary
of Labor should have deferred to the findings of
Commission on Immigration and Deportation as to the
necessity of employing petitioner Cone, bereft of legal
basis. Cone's employment permit was properly
revoked by the SOLE.
Pacific Consultants v. Schonfeld (2007)
Doctrine: Under Section 5, Rule XIV of the Omnibus
Rules Implementing the Labor Code, one of the
requirements to approve an AEP is the submission of
an employer contract by the applicant.
Facts: Pacific Consultants International Japan hired
respondent as sector manager of its subsidiary,
Pacicon Philippines, Inc. (PPI). He worked under an
AEP applied for by PPI and issued by DOLE. In 1999,
his employment was terminated, prompting him to file
a complaint for illegal dismissal against PPI. PPI
denied any employer-employee relationship with
respondent.
Held: There was an employer-employee relationship
between PPI and respondent. In the application for
respondent's AEP, PPI submitted an employment
contract where it was stated that respondent is their
employee. PPI is estopped denying the employer-
employee relationship between them.
d. Validity; Renewal of AEP
DO 146-15
Sec. 9. Validity.
The AEP shall be valid for the position and the
company for which it was issued for a period of 1
year, unless the employment contract, or other modes
of engagement provides otherwise, which in no case
shall exceed 3 years.
 Sec. 10. Renewal.
An application for renewal of AEP shall be filed not
earlier than 60 days before its expiration. In the case
of officers whose appointment or election takes place
before the expiration of AEP, the application must be
filed not later than 15 working days after appointment,
or
before its expiration, whichever comes later.
In case the appointment or election will take place
after the expiration of the AEP, the application for
renewal must be filed before the expiration of the AEP
which can be renewed for 1 year.
Within 15 working days after the date of appointment
or
election, the foreign national shall submit to the
issuing
Regional Office the Board Secretary’s Certification.
The Regional Director shall revoke the AEP after 1
month from its issuance, if no Certification is filed.
d. Revocation; Cancellation; Grounds
DO 146-15
Sec. 12. Cancellation/Revocation of AEP.
The Regional Director may, motu proprio or upon
petition, cancel or revoke an AEP after due process,
based on any of the following grounds:
a. non-compliance with any of the requirements or
conditions for which the AEP was issued;
b. misrepresentation of facts in the application;
c. submission of falsified or tampered documents;
d. meritorious objection or information against the
employment of the foreign national;
e. foreign national has been convicted of a criminal
offense or a fugitive from justice;
f. employer terminated the employment of foreign
national;
g. grave misconduct in delaing with or ill treatment
of
workers;
h. disapproval of the application for an Authority to
Employ Alien by the Department of Justice or
Special Temporary Permit by the Professional
Regulation Commission, if applicable.
In such cases, the Regional Director shall issue an
Order
cancelling or revoking the AEP.
Sec. 13. Effect of denial/cancellation or revocation.
A foreign national whose AEP has been denied or
cancelled is disqualified to re-apply within a period of
10 years in case the grounds for denial or
cancellation is any of the following:
a. conviction of criminal offense or fugitive from
justice in the country or abroad; or
b. grave misconduct in dealing with or ill treatment
of
workers.
f. Appeal
DO 146-15
Sec. 14. Appeal. The aggrieved foreign national or his
authorized representative may file an appeal with the
SOLE within 10 days after receipt of the copy of
denial/cancellation/revocation order.
The decision of the DOLE Secretary shall be final and
executor unless a motion for reconsideration is filed
within 10 days after receipt of the decision. No 2nd
motion for reconsideration shall be allowed.
g. Penalty for Working without AEP
DO 146-15
Sec. 15. Penalty for working without AEP.
The Regional Director shall impose a fine of P10,000
for every year or a fraction thereof to foreign nationals
found working without a valid AEP. Employers found
employing foreign nationals without a valid AEP shall
also pay a fine of P10,000 for every year or a fraction
thereof.
Newly hired or appointed officers may file the
 application for new AEP without penalty thereof within
15 working days after signing of contract or
appointment.
If the commencement of employment is later than the
15 working days grace period, the application for new
AEP may be filed before the commencement of
employment without penalty.
E. Human Resources Development
References:
• Arts. 57-81
• Technical Education and Skills Development
Authority Act of 1994 (TESDA) (RA 7796),
superseded Arts. 43-56
• Dual Training Systems Act of 1994 (RA 7686)
• Const., Art. II, Sec. 17 & Art. IV, Secs. 1, 2 (4); RA
10869
See: DOJ Opinion No. 68, 2004 Re: Conflicts between
Labor Code & TESDA Act
1. Worker (Manpower) Development
a. Definition
Art. 44. (a). Manpower shall mean a nation’s
population which has actual or potential capability to
contribute directly to the production of goods and
services.
RA 7796
SECTION 4. Definition of Terms. — As used in this
Act:
b) “Skills Development” shall mean the process
through which learners and workers are
systematically provided with learning opportunities to
acquire or upgrade, or both, their ability, knowledge
and behavior pattern required as qualifications for a
job or range of jobs in a given occupational area;
c) “Technical Education” shall refer to the education
process designed at post-secondary and lower
tertiary levels, officially recognized as non-degree
programs aimed at preparing technicians, para-
professionals and other categories of middle-level
workers by providing them with a broad range of
general education, theoretical, scientific and
technological studies, and related job skills training;
e) “Middle-Level Manpower” refers to those:
1) Who have acquired practical skills and
knowledge through formal or non-formal
education and training equivalent to at least a
secondary education but preferably a post-
secondary education with a corresponding
degree or diploma; or
2) Skilled workers who have become highly
competent in their trade or craft as attested by
industry.
b. Policy and Objectives
RA 7796
SECTION 2. Declaration of Policy. — It is hereby
declared the policy of the State to provide relevant,
accessible, high quality and efficient technical
education and skills development in support of the
development of high quality Filipino middle-level
manpower responsive to and in accordance with
Philippine development goals and priorities.
The State shall encourage active participation of
various concerned sectors, particularly private
enterprises, being direct participants in and
immediate beneficiaries of a trained and skilled
work force, in providing technical education and
skills development opportunities.
SECTION 3. Statement of Goals and Objectives. — It
is the goal and objective of this Act to:
a) Promote and strengthen the quality of technical
education and skills development programs to attain
international competitiveness.
b) Focus technical education and skills
development on meeting the changing demands for
quality middle-level manpower;
c) Encourage critical and creative thinking by
 disseminating the scientific and technical knowledge
base of middle-level manpower development
programs;
d) Recognize and encourage the complementary
roles of public and private institutions in technical
education and skills development and training
systems; and
e) Inculcate desirable values through the
development of moral character with emphasis on
work ethic, self-discipline, self-reliance and
nationalism.
c. National Trade Skills Standards
RA 7796
SECTION 22. Establishment and Administration of
National Trade Skills Standards. — There shall be
national occupational skills standards to be
established by TESDA-accredited industry
committees. The Authority shall develop and
implement a certification and accreditation program
in which private industry groups and trade
associations are accredited to conduct approved
trade tests, and the local
government units to promote such trade testing
activities in their respective areas in accordance
with the guidelines to be set by the Authority.
The Secretary of Labor and Employment shall
determine the occupational trades for mandatory
certification.
All certificates relating to the national trade skills
testing and certification system shall be issued by
the Authority through the TESDA Secretariat.
2. Training and Employment of Special Workers
a. Apprentice
1.) Definition
ART. 58. Definition of Terms. As used in this Title:
(b) An "apprentice" is a worker who is covered by
a written apprenticeship agreement with an
individual employer or any of the entities recognized
under this Chapter.
RA 7796, Section 4
j) “Apprenticeship” training within employment with
compulsory related theoretical instructions involving
a
contract between an apprentice and an employer
on an approved apprenticeable occupation;
k) “Apprentice” is a person undergoing training for
an
approved apprenticeable occupation during an
established period assured by an apprenticeship
agreement;
l) “Apprenticeship Agreement” is a contract wherein
a
prospective employer binds himself to train the
apprentice who in turn accepts the terms of training
for a recognized apprenticeable occupation
emphasizing the rights, duties and responsibilities of
each party;
2) Apprenticeable Occupation
RA 7796, Sec 4.
m) “Apprenticeable Occupation” is an occupation
officially endorsed by a tripartite body and approved
for apprenticeship by the Authority;
3) Qualification
Omnibus Rules, Rule VI, Sec. II
Sec. 11. Qualifications of apprentices. To qualify as
apprentice, an applicant shall:
(a) Be at least 15 years of age; provided those who
are at least 15 years of age but less than 18 may
be
eligible for apprenticeship only in non-hazardous
occupations;
(b) Be physically fit for the occupation in which he
desires to be trained;
(c) Possess vocational aptitude and capacity for the
particular occupation as established through
appropriate tests; and

(d) Possess the ability to comprehend and follow
oral
and written instructions.
RA 7610, as amended by RA 7658
Section 12. Employment of Children. – Children
below fifteen (15) years of age may be employed
except:
(1) When a child works directly under the sole
responsibility of his parents or legal guardian and
where only members of the employer's family are
employed: Provided, however, That his employment
neither endangers his life, safety and health and
morals, nor impairs his normal development:
Provided, further, That the parent or legal guardian
shall provide the said minor child with the
prescribed primary and/or secondary education; or
(2) When a child's employment or participation in
public & entertainment or information through
cinema, theater, radio or television is essential:
Provided, The employment contract concluded by
the child's parent or guardian, with the express
agreement of the child concerned, if possible, and
the approval of the Department of Labor and
Employment: Provided, That the following
requirements in all instances are strictly complied
with:
(a) The employer shall ensure the protection,
health,
safety and morals of the child;
(b) the employer shall institute measures to
prevent
the child's exploitation or discrimination taking into
account the system and level of remuneration,
and
the duration and arrangement of working time;
and;
(c) The employer shall formulate and implement,
subject to the approval and supervision of
competent authorities, a continuing program for
training and skill acquisition of the child.
In the above exceptional cases where any such
child may be employed, the employer shall first
secure, before engaging such child, a work permit
from the Department of Labor and Employment
which shall ensure observance of the above
requirement.
The Department of Labor Employment shall
promulgate rules and regulations necessary for the
effective implementation of this Section.
4) Allowed Employment; Requirement Program
Approval
ART. 60. Employment of Apprentices.
Only employers in the highly technical industries
may employ apprentices and only in apprenticeable
occupations approved by the Minister of Labor and
Employment.
Nitto Enterprises v. NLRC (1995)
Doctrine: Prior approval by the Department of Labor
and Employment of the proposed apprenticeship
program is a condition sine qua non before an
apprenticeship agreement can be validly entered
into. Where the apprenticeship agreement has no
force and effect, the worker hired as apprentice
should be considered as a regular employee.
Facts: Capili was employed as an apprentice
machinist, molder, and core maker at Nitto
Enterprises. He accidentally injured himself and
another employee while working. Nitto Enterprises
asked him to resign the next day and to execute a
quitclaim. He filed a complaint for illegal dismissal
and other money claims. The LA held that Capili
was legally dimissed because he violated the terms
of his apprenticeship agreement. The NLRC
reversed this and held that instead of an
apprenticeship, there was an employer-employee
relation between Capili and petitioner.
Held: Capili was not an apprentice because the
apprenticeship agreement between him and the
company did not comply with the requirement of
first securing an approval from the Department of
Labor and Employment. For failure to comply, he
 should be treated as a regular employee. He was
illegally dismissed due to the lack of due process in
his termination.
5) Terms and Conditions of Employment
Labor Code
Art. 61. Contents of apprenticeship
agreements. Apprenticeship agreements, including
the wage rates of apprentices, shall conform to the
rules issued by the Secretary of Labor and
Employment. The period of apprenticeship shall not
exceed six months. Apprenticeship agreements
providing for wage rates below the legal minimum
wage, which in no case shall start below 75
percent of the applicable minimum wage, may be
entered into only in accordance with apprenticeship
programs duly approved by the Secretary of Labor
and Employment. The Department shall develop
standard model programs of apprenticeship.
Art. 72. Apprentices without compensation. The
Secretary of Labor and Employment may authorize
the hiring of apprentices without compensation
whose training on the job is required by the school
or training program curriculum or as requisite for
graduation or board examination.
6) Costs
Labor Code
Art. 71. Deductibility of training costs. An additional
deduction from taxable income of one-half (1/2) of
the value of labor training expenses incurred for
developing the productivity and efficiency of
apprentices shall be granted to the person or
enterprise organizing an apprenticeship program:
Provided, That such program is duly recognized by
the Department of Labor and Employment:
Provided, further, That such deduction shall not
exceed ten (10%) percent of direct labor wage: and
Provided, finally, That the person or enterprise who
wishes to avail himself or itself of this incentive
should pay his apprentices the minimum wage.
7) Enforcement
Labor Code
Art. 65. Investigation of violation of apprenticeship
agreement. Upon complaint of any interested
person or upon its own initiative, the appropriate
agency of the Department of Labor and
Employment or its authorized representative shall
investigate any violation of an apprenticeship
agreement pursuant to such rules and regulations
as may be prescribed by the Secretary of Labor
and Employment.
Art. 66. Appeal to the Secretary of Labor and
Employment. The decision of the authorized agency
of the Department of Labor and Employment may
be appealed by any aggrieved person to the
Secretary of Labor and Employment within five (5)
days from receipt of the decision. The decision of
the Secretary of Labor and Employment shall be
final and executory.
Art. 67. Exhaustion of administrative remedies. No
person shall institute any action for the enforcement
of any apprenticeship agreement or damages for
breach of any such agreement, unless he has
exhausted all available administrative remedies.
b. Learner
1) Definition
Labor Code
Art. 73. Learners defined. Learners are persons
hired as trainees in semi-skilled and other industrial
occupations which are non-apprenticeable and
which may be learned through practical training on
the job in a relatively short period of time which
shall not exceed three (3) months.
RA 7796, Sec. 4.
n) “Learners” refer to persons hired as trainees in
semi-skilled and other industrial occupations which
are nonapprenticeable. Learnership programs must
be approved by the Authority.
2) Allowed Employment
Labor Code
Art. 74. When learners may be hired. Learners may
be employed when no experienced workers are
 available, the employment of learners is necessary
to prevent curtailment of employment opportunities,
and the employment does not create unfair
competition in terms of labor costs or impair or
lower working standards.
3) Terms and Conditions of Employment
Art. 75. Learnership agreement. Any employer
desiring to employ learners shall enter into a
learnership agreement with them, which agreement
shall include:
1.! (a) The names and addresses of the
learners;
2.! (b) The duration of the learnership
period, which shall not exceed three
(3) months;
3.! (c) The wages or salary rates of the
learners which shall begin at not less
than seventy-five percent (75%) of the
applicable minimum wage; and
4.! (d) A commitment to employ the
learners if they so desire, as regular
employees upon completion of the
learnership. All learners who have
been allowed or suffered to work
during the first two (2) months shall be
deemed regular employees if training
is terminated by the employer before
the end of the stipulated period
through no fault of the learners.
5.!
The learnership agreement shall be subject to
inspection by the Secretary of Labor and
Employment or his duly authorized representative.
Art. 76. Learners in piecework. Learners employed
in piece or incentive-rate jobs during the training
period shall be paid in full for the work done.
c. Persons with Disability
References:
1.! ILO Convention
2.! RA 7277
Labor Code
Art. 78. Definition. Handicapped workers are those
whose earning capacity is impaired by age or
physical or mental deficiency or injury.
Art. 79. When employable. Handicapped workers may
be employed when their employment is necessary to
prevent curtailment of employment opportunities and
when it does not create unfair competition in labor costs
or impair or lower working standards.
Art. 80. Employment agreement. Any employer who
employs handicapped workers shall enter into an
employment agreement with them, which agreement
shall include:
1.! (a) The names and addresses of the
handicapped workers to be employed;
2.! (b) The rate to be paid the handicapped
workers which shall not be less than
seventy five (75%) percent of the
applicable legal minimum wage;
3.! (c)The duration of employment period;
and
4.! (d)The work to be performed by
handicapped workers.
The employment agreement shall be subject to
inspection by the Secretary of Labor or his duly
authorized representative.
Art. 81. Eligibility for apprenticeship. Subject to the
appropriate provisions of this Code, handicapped
workers may be hired as apprentices or learners if
their handicap is not such as to effectively impede the
performance of job operations in the particular
occupations for which they are hired.
1) Definition
RA 7277
 Sec. 4. Definition of Terms. — For purposes of this
Act, these terms are defined as follows:
(a) Disabled persons are those suffering from
restriction or different abilities, as a result of a
mental, physical or sensory impairment, to perform
an activity in the manner or within the range
considered normal for a human being;
(b) Impairment is any loss, diminution or aberration
of psychological, physiological, or anatomical
structure or function;
(c) Disability shall mean 1) a physical or mental
impairment that substantially limits one or more
psychological, physiological or anatomical function
of an individual or activities of such individual; 2) a
record of such an impairment; or 3) being regarded
as having such an impairment;
(d) Handicap refers to a disadvantage for a given
individual, resulting from an impairment or a
disability, that limits or prevents the function or
activity, that is considered normal given the age and
sex of the individual;
2) Policy Declaration
RA 7277
Sec. 2. Declaration of Policy — The grant of the
rights and privileges for disabled persons shall be
guided by the following principles:
(a) Disabled persons are part of Philippine society,
thus the State shall give full support to the
improvement of the total well-being of disabled
persons and their integration into the mainstream of
society. Toward this end, the State shall adopt
policies ensuring the rehabilitation, self-development
and self-reliance of disabled persons. It shall
develop their skills and potentials to enable them to
compete favorably for available opportunities.
(b) Disabled persons have the same rights as other
people to take their proper place in society. They
should be able to live freely and as independently
as possible. This must be the concern of everyone
— the family, community and all government and
nongovernment organizations. Disabled persons'
rights must never be perceived as welfare services
by the Government.
(c) The rehabilitation of the disabled persons shall
be the concern of the Government in order to foster
their capacity to attain a more meaningful,
productive and satisfying life. To reach out to a
greater number of disabled persons, the
rehabilitation services and benefits shall be
expanded beyond the traditional urban-based
centers to community based programs, that will
ensure full participation of different sectors as
supported by national and local government
agencies.
(d) The State also recognizes the role of the private
sector in promoting the welfare of disabled persons
and shall encourage partnership in programs that
address their needs and concerns.
(e) To facilitate integration of disabled persons into
the mainstream of society, the State shall advocate
for and encourage respect for disabled persons.
The State shall exert all efforts to remove all social,
cultural, economic, environmental and attitudinal
barriers that are prejudicial to disabled persons.
3) Coverage
RA 7277
Sec. 3. Coverage. — This Act shall cover all
disabled persons and, to the extent herein provided,
departments, offices and agencies of the National
Government or nongovernment organizations
involved in the attainment of the objectives of this
Act.
4) Employment Rights and Privileges
RA 7277
Sec. 4. Definition of Terms. — For purposes of this
Act, these terms are defined as follows:
(i) Sheltered Employment refers to the provision of
productive work for disabled persons through
workshops providing special facilities, income-
producing projects or homework schemes with a
view to giving them the opportunity to earn a living
thus enabling them to acquire a working capacity
required in open industry;
Sec. 5. Equal Opportunity for Employment. — No
disable person shall be denied access to
opportunities for suitable employment. A qualified
disabled employee shall be subject to the same
terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied
person.
Five percent (5%) of all casual emergency and
contractual positions in the Departments of Social
Welfare and Development; Health; Education,
Culture and Sports; and other government agencies,
offices or corporations engaged in social
development shall be reserved for disabled
persons.
Sec. 6. Sheltered Employment — If suitable
employment for disabled persons cannot be found
through open employment as provided in the
immediately preceding Section, the State shall
endeavor to provide it by means of sheltered
employment. In the placement of disabled persons
in sheltered employment, it shall accord due regard
to the individual qualities, vocational goals and
inclinations to ensure a good working atmosphere
and efficient production.
Sec. 7. Apprenticeship. — Subject to the provisions
of the Labor Code as amended, disabled persons
shall be eligible as apprentices or learners:
Provided, That their handicap is not as much as to
effectively impede the performance of job
operations in the particular occupation for which
they are hired; Provided, further, That after the lapse
of the period of apprenticeship, if found satisfactory
in the job performance, they shall be eligible for
employment.
Bernardo v. NLRC (1999)
Doctrine: The Magna Carta for Disabled Persons
mandates that a qualified disabled employee should
be given the same terms and conditions of
employment as a qualified able-bodied
person. Section 5 of the Magna Carta provides: "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.”
Facts: Petitioners are 43 deaf–mutes hired by
respondent Far East Bank and Trust Co. as money
sorters and counters through an agreement called
"Employment Contract for Handicapped Workers,"
which stated that they were special workers under a
special employment program. Petitioners filed a
case for illegal dismissal and argued that they
should be considered regular employees because
their tasks were necessary and desirable to the
business of respondent bank. They further alleged
that their contracts served merely to preclude the
application of Article 280 and to bar them from
becoming regular employees.
Held: The fact that the employees were qualified
disabled persons necessarily removes the
employment contracts from the ambit of Article
80. Since the Magna Carta accords them the rights
of qualified able-bodied persons, they are thus
covered by Article 280 of the Labor Code.
The task of counting and sorting bills is necessary
and desirable to the business of respondent
bank. Furthermore, 27 of 43 petitioners performed
these tasks for more than 6 months, making them
regular employees. Far East failed to show
just cause for their dismissal.
5) Discrimination
RA 7277
SECTION 32. Discrimination on Employment
No entity, whether public or private, shall
discriminate against a qualified disabled person by
reason of disability in regard to job application
procedures, the hiring, promotion, or discharge of
employees, employee compensation, job training,
and other terms, conditions, and privileges of
employment. The following constitute acts of
discrimination:
(a). Limiting, segregating or classifying a disabled
job applicant in such a manner that adversely
affects his work opportunities;
(b). Using qualification standards, employment tests
or other selection criteria that screen out or tend to
screen out a disabled person unless such
standards, tests or other selection criteria are shown
to be jobrelated for the position on question and
are consistent with business necessity;
(c). Utilizing standards, criteria, or methods of
administration that:
1). have the effect of discrimination on the basis
of disability; or
2). perpetuate the discrimination of others who
are subject to common administrative control;
(d). Providing less compensation, such as salary,
wage or other forms of remuneration and fringe
benefits, to a qualified disabled employee, by
reason of his disability, than the amount to which a
non-disabled person performing the same work is
entitled;
(e). Favoring a non-disabled employee over a
qualified disabled employee with respect to
promotion, training opportunities, study and
scholarship grants, solely on account of the latter’s
disability;
(f). Re-assigning or transferring a disabled
employee to a job or position he cannot perform by
reason of his disability;
(g). Dismissing or terminating the services of a
disabled employee by reason of his disability unless
the employer can prove that he impairs the
satisfactory performance of the work involve to the
prejudice of the business entities; Provided,
however, That the employer first sought provide
reasonable accommodations for disabled persons;
(h). Failing to select or administer in the effective
manner employment tests which accurately reflect
the skills, aptitude or other factor of the disabled
applicant or employee that such test purports to
measure, rather than the impaired sensory, manual
or speaking skills of such applicant or employee, if
any; and
(i). Excluding disabled persons from membership in
labor unions or similar organization.
SECTION 33. Employment Entrance Examination
Upon an offer of employment, a disabled applicant
may be subjected to medical examination, on the
following occasions:
(a). all entering employees are subjected to such
an examination regardless of disability;
(b). information obtained during the medical
condition or history of the applicant is collected and
maintained on separate forms and in separate
medical files and is treated as a confidential
medical record, Provided, however, That:
1). supervisors and managers may be informed
regarding necessary restrictions on the work or
duties of the employees and necessary
accommodations;
2). first aid and safety personnel my be informed,
when appropriate, if the disability might require
emergency treatment;
3). government officials investigating compliance
with this Act shall be provided relevant information
on request; and
4). the results of such examination are used only
accordance with this Act.
6) Enforcement
RA 7277
Sec. 44. Enforcement by the Secretary of Justice. —
(a) Denial of Right
(1) Duty to Investigate — the Secretary of Justice
 shall investigate alleged violations of this Act,
and shall undertake periodic reviews of
compliance of covered entities under this Act.
(b) Potential Violations — If the Secretary of Justice
has reasonable cause to believe that —
(1) any person or group of persons is engaged
in a pattern or practice of
discrimination under this Act; or
(2) any person or group or persons has been
discriminated against under this
Act and such discrimination raises an issue of
general public importance, the
Secretary of Justice may commence a legal
action in any appropriate court.
Sec. 45. Authority of Court. — The court may grant
any equitable relief that
such court considers to be appropriate, including,
to the extent required by
this Act:
(a) granting temporary, preliminary or permanent
relief;
(b) providing an auxiliary aid or service, modification
of policy, practice or procedure, or alternative
method; and
(c) making facilities readily accessible to and usable
by individuals with disabilities.
Sec. 46. Penal Clause. —
(a) Any person who violates any provision of this
Act shall suffer the following penalties:
(1) for the first violation, a fine of not less than
Fifty thousand pesos (P50,000.00) but not
exceeding One hundred thousand pesos
(P100,000.00) or
imprisonment of not less than six (6) months but
not more than two (2) years, or both at the
discretion of the court; and
(2) for any subsequent violation, a fine of not
less than One hundred thousand pesos
(P100,000.00) but not exceeding Two hundred
thousand pesos (P200,000.00) or imprisonment
for not less than two (2) years but not more
than six (6) years, or both at the discretion of
the court.
(b) Any person who abuses the privileges granted
herein shall be punished with imprisonment of not
less than six (6) months or a fine of not less than
Five thousand pesos (P5,000.00), but not more
than Fifty thousand pesos (P50,000.00), or both, at
the discretion of the court.
(c) If the violator is a corporation, organization or
any similar entity, the officials thereof directly
involved shall be liable therefor.
(d) If the violator is an alien or a foreigner, he shall
be deported immediately after service of sentence
without further deportation proceedings.
F. Equal Opportunities for All: Non-Discrimination on
Account of Age
References: RA 10911; DO 170
1. Policy
RA 10911
Sec. 2. Declaration of Policies. — The State shall
promote equal opportunities in employment for
everyone. To this end, it shah be the policy of the
State to:
(a) Promote employment of individuals on the basis
of their abhities, knowledge, skihs and qualifications
rather than their age.
(b) Prohibit arbitrary age limitations in employment.
(c) Promote the right of all employees and workers,
regardless of age, to be treated equaUy in terms of
compensation, benefits, promotion, training and
other employment opportunities.
2. Coverage
RA 10911
Sec. 3. Definition of Terms. - As used in this Act:
 (a) Employee refers to a person who performs
professional, managerial or administrative work and
is paid salaries by the employer as compensation
for services rendered;
(b) Employer refers to any person, natural or
juridical, employing the services of an employee or
worker and shall include the government and all its
branches, subdivisions and instrum entalities, all
government-owned and -controlled corporations,
and government financial institutions, as well as
nonprofit private institutions or organizations;
(c) Job applicant refers to a person who applies for
employment;
(d) Labor contractor refers to any person or an
agent of that person who regularly undertakes, with
or without compensation, the procurement of
employees or workers for an employer, or the
procurement for employees' or workers'
opportunities to work for an employer;
(e) Labor organization refers to any union or
association of employees or workers which exists in
whole or in part for the purpose of collective
bargaining or for deahng with employers
concerning terms and conditions of employment;
(f) Publisher refers to any person or juridical entity
engaged in the printing of information on paper and
its distribution, buying or securing of airtime or
space on television, radio or the internet, and other
similar media; and
(g) Worker refers to a person who performs manual
labor involving skilled or unskilled work, and is paid
wages by the employer as compensation for
services rendered.
Sec. 4. Coverage. - The provisions of this Act shall
apply to all employers, labor contractors or
subcontractors, if any, and labor organizations.
4. Exceptions
2. Prohibition Against Age Discrimination
Sec. 5. Prohibition of Discrimination in Employment
on Account of Age. -
(a) It shall be unlawful for an employer to:
(1) Print or publish, or cause to be printed or
published, in any form of media, including the
internet, any notice of advertisement relating to
employment suggesting preferences, limitations,
specifications, and discrimination based on age;
(2) Require the declaration of age or birth date
during the apphcation process;
(3) Dechne any employment apphcation because of
the individual's age;
(4) Discriminate against an individual in terms of
compensation, terms and conditions or privileges of
employment on account of such individual's age;
(5) Deny any employee's or worker's promotion or
opportunity for training because of age;
(6) Forcibly lay off an employee or worker because
of old age; or
(7) Impose early retirement on the basis of such
employee's or worker's age.
(b) It shall be unlawful for a labor contractor or
subcontractor, if any, to refuse to refer for
employment or otherwise discriminate against any
individual because of such person's age.
(c) It shall be unlawful for a labor organization to:
(1) Deny membership to any individual because of
such individual's age;
(2) Exclude from its membership any individual
because of such individual's age; or
(3) Cause or attempt to cause an employer to
discriminate against an individuad in violation of this
Act.
(d) It shall be unlawful for a publisher to print or
pubhsh any notice of advertisement relating to
employment suggesting preferences, limitations,
specifications, and discrimination based on age.
Sec. 6. Exceptions. — It shall not be unlawful for an
employer to set age limitations in employment if:
 (a) Age is a bona fide occupational qualification
reasonably necessary in the normal operation of a
particular business or where the differentiation is
based on reasonable factors other than age;
(b) The intent is to observe the terms of a bona
fide seniority system that is not intended to evade
the purpose of this Act;
(c) The intent is to observe the terms of a bona fide
employee retirement or a voluntary early retirement
plan consistent with the purpose of this Act:
Provided, That such retirement or voluntary
retirement plan is in accordance with the Labor
Code, as amended, and other related laws; or
(d) The action is duly certified by the Secretary of
Labor and Employment in accordance with the
purpose of this Act.
5. Penalty
Sec. 7. Penalty. - Any violation of this Act shall be
punished with a fine of not less than fifty thousand
pesos (P50,000.00) but not more than five hundred
thousand pesos (P500,000.00), or imprisonment of
not less than three (3) months but not more than
two (2) years, or both, at the discretion of the court.
If the offense is committed by a corporation, trust,
firm, partnership or association or other entity, the
penalty shall be imposed upon the guilty officer or
officers of such corporation, trust, firm, partnership
or association or entity.
G. Conditions of Work
Reference:
Omnibus Rules Book III, Rules I, IA, II
Labor Code
Art. 82. Coverage. The provisions of this Title shall
apply to employees in all establishments and
undertakings whether for profit or not, but not to
government employees, managerial employees, field
personnel, members of the family of the employer
who are dependent on him for support, domestic
helpers, persons in the personal service of another,
and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations.
As used herein, "managerial employees" refer to
those whose primary duty consists of the
management of the establishment in which they are
employed or of a department or subdivision thereof,
and to other officers or members of the managerial
staff.
"Field personnel" shall refer to non-agricultural
employees who regularly perform their duties away
from the principal place of business or branch
office of the employer and whose actual hours of
work in the field cannot be determined with
reasonable certainty.
Art. 83. Normal hours of work. The normal hours of
work of any employee shall not exceed eight (8)
hours a day.
Health personnel in cities and municipalities with a
population of at least one million (1,000,000) or in
hospitals and clinics with a bed capacity of at least
one hundred (100) shall hold regular office hours
for eight (8) hours a day, for five (5) days a week,
exclusive of time for meals, except where the
exigencies of the service require that such
personnel work for six (6) days or forty-eight (48)
hours, in which case, they shall be entitled to an
additional compensation of at least thirty percent
(30%) of their regular wage for work on the sixth
day. For purposes of this Article, "health personnel"
shall include resident physicians, nurses,
nutritionists, dietitians, pharmacists, social workers,
laboratory technicians, paramedical technicians,
psychologists, midwives, attendants and all other
hospital or clinic personnel.
Art. 84. Hours worked. Hours worked shall include
(a) all time during which an employee is required to
be on duty or to be at a prescribed workplace; and
(b) all time during which an employee is suffered or
permitted to work.
Rest periods of short duration during working hours
shall be counted as hours worked.
Art. 85. Meal periods. Subject to such regulations as
the Secretary of Labor may prescribe, it shall be the
duty of every employer to give his employees not
less than sixty (60) minutes time-off for their regular
meals.
Art. 86. Night shift differential. Every employee shall
be paid a night shift differential of not less than ten
percent (10%) of his regular wage for each hour of
work performed between ten o’clock in the evening
and six o’clock in the morning.
or calamity;
3.! (c) When there is urgent work to be
performed on machines, installations,
or equipment, in order to avoid serious
loss or damage to the employer or
some other cause of similar nature;
4.! (d) When the work is necessary to
prevent loss or damage to perishable
goods; and

Art. 87. Overtime work. Work may be performed
beyond eight (8) hours a day provided that the
employee is paid for the overtime work, an
additional compensation equivalent to his regular
wage plus at least twenty-five percent (25%)
thereof. Work performed beyond eight hours on a
holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight
hours on a holiday or rest day plus at least thirty
percent (30%) thereof.
5.! (e) Where the completion or
continuation of the work started before
the eighth hour is necessary to prevent
serious obstruction or prejudice to the
business or operations of the
employer.
6.!
Any employee required to render overtime work
under this Article shall be paid the additional
compensation required in this Chapter.

Art. 88. Undertime not offset by overtime. Undertime

Art. 90. Computation of additional compensation. For
work on any particular day shall not be offset by
purposes of computing overtime and other
overtime work on any other day. Permission given
additional remuneration as required by this Chapter,
to the employee to go on leave on some other day
the "regular wage" of an employee shall include the
of the week shall not exempt the employer from
cash wage only, without deduction on account of
paying the additional compensation required in this
facilities provided by the employer.
Chapter.

1. Hours of Work
Art. 89. Emergency overtime work. Any employee
may be required by the employer to perform
a. Regulation; Rationale
overtime work in any of the following cases:

Manila Terminal Co. Inc. v. CIR (1852)

1.! (a) When the country is at war or
when any other national or local
Doctrine: Where the contract of employment
emergency has been declared by the
requires work for more than eight hours at specified
National Assembly or the Chief
wages per day, without providing for a fixed hourly
Executive;
rate or that the daily wages include overtime pay,
said wages cannot be considered as including
2.! (b) When it is necessary to prevent
overtime compensation required under the Eight-
loss of life or property or in case of
Hour Labor Law.
imminent danger to public safety due
to an actual or impending emergency
The right of employees and laborers to overtime
in the locality caused by serious
compensation cannot be waived expressly or
accidents, fire, flood, typhoon,
impliedly.
earthquake, epidemic, or other disaster

Facts: Respondents were employed by petitioner as
watchmen. They worked 12-hour shifts. They filed a
petition for the payment of overtime pay with the CIR,
which was granted. Petitioners appealed, claiming
that the daily rates already included overtime pay and
so they should not pay any additional back wages.
Petitioner’s basis for saying that the contract already
included overtime pay was that respondents had
agreed to work twelve-hour shifts without raising
complaint.
Held: The Court upheld the CIR decision, saying
that overtime pay is a matter of right which can't be
waived. It is true there was agreement to work, but
it cannot fairly be supposed that they had the
freedom to bargain in any way, much less to insist
in the observance of The Eight – Hour Labor Law.
In cases where overtime services are required, the
employees or laborers are entitled to collect such
extra compensation for past overtime work. To hold
otherwise would allow an employer to violate the
law by simply failing to provide for and pay
overtime compensation.
b. Coverage/Exemptions
Art. 82. Coverage. The provisions of this Title shall
apply to employees in all establishments and
undertakings whether for profit or not, but not to
government employees, managerial employees, field
personnel, members of the family of the employer
who are dependent on him for support, domestic
helpers, persons in the personal service of another,
and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations.
As used herein, "managerial employees" refer to
those whose primary duty consists of the
management of the establishment in which they are
employed or of a department or subdivision thereof,
and to other officers or members of the managerial
staff.
"Field personnel" shall refer to non-agricultural
employees who regularly perform their duties away
from the principal place of business or branch
office of the employer and whose actual hours of
work in the field cannot be determined with
reasonable certainty.
Omnibus Rules, Book III, Rule I
SECTION 1. General statement on coverage. — The
provisions of this Rule shall apply to all employees
in all establishments and undertakings, whether
operated for profit or not, except to those
specifically exempted under Section 2 hereof.
SECTION 2. Exemption. — The provisions of this
Rule shall not apply to the following persons if they
qualify for exemption under the conditions set forth
herein:
(a) Government employees whether employed by
the
National Government or any of its political
subdivision,
including those employed in government-owned
and/or controlled corporations;
(b) Managerial employees, if they meet all of the
following conditions:
(1) Their primary duty consists of the management
of the establishment in which they are employed or
of a
department or sub-division thereof.
(2) They customarily and regularly direct the work
of two or more employees therein.
(3) They have the authority to hire or fire
employees of lower rank; or their suggestions and
recommendations as to hiring and firing and as to
the promotion or any other change of status of
other employees, are given particular weight.
(c) Officers or members of a managerial staff if they
perform the following duties and responsibilities:
(1) The primary duty consists of the performance of
work directly related to management policies of their
employer;
 (2) Customarily and regularly exercise discretion
and
independent judgment; and
(3) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists
of the management of the establishment in which
he is employed or subdivision thereof; or (ii)
execute under general supervision work along
specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute,
under general supervision, special assignments and
tasks; and
(4) Who do not devote more than 20 percent of
their hours worked in a work week to activities
which are not directly and closely related to the
performance of the work described in paragraphs
(1), (2) and (3) above.
(d) Domestic servants and persons in the personal
service of another if they perform such services in
the employer's home which are usually necessary
or desirable for the maintenance and enjoyment
thereof, or minister to the personal comfort,
convenience, or safety of the employer as well as
the members of his employer's household.
(e) Workers who are paid by results, including
those who are paid on piece-work, "takay,"
"pakiao" or task basis, and other non-time work if
their output rates are in accordance with the
standards prescribed under Section 8, Rule VII,
Book Three of these regulations, or where such
rates have been fixed by the Secretary of Labor
and Employment in accordance with the aforesaid
Section.
(f) Non-agricultural field personnel if they regularly
perform their duties away from the principal or
branch office or place of business of the employer
and whose actual hours of work in the field cannot
be determined with reasonable certainty.
1) Government Employees; Exemption
2) Managerial Employees
Labor Code
Art. 82. The provisions of this Title shall apply to
employees in all establishments and undertakings
whether for profit or not, but not to government
employees [...].
Art. 291. Money claims. All money claims arising
from employer-employee relations accruing during
the effectivity of this Code shall be filed within three
(3) years from the time the cause of action
accrued; otherwise they shall be forever barred.
All money claims accruing prior to the effectivity of
this Code shall be filed with the appropriate entities
established under this Code within one (1) year
from the date of effectivity, and shall be processed
or determined in accordance with the implementing
rules and regulations of the Code; otherwise, they
shall be forever barred.
Workmen’s compensation claims accruing prior to
the effectivity of this Code and during the period
from November 1, 1974 up to December 31, 1974,
shall be filed with the appropriate regional offices of
the Department of Labor not later than March 31,
1975; otherwise, they shall forever be barred. The
claims shall be processed and adjudicated in
accordance with the law and rules at the time their
causes of action accrued.
1987 Constitution, Art IX-B
Sec 2(1) – The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of the
Government, including government-owned or
controlled corporations with original charters.
Omnibus, Book III Rule I
SECTION 2. Exemption. — The provisions of this
Rule shall not apply to the following persons if they
qualify for exemption under the conditions set forth
herein:
(a) Government employees whether employed by
the
National Government or any of its political
subdivision,
including those employed in government-owned
and/or controlled corporations; xxx
Labor Code
Art. 82. Coverage – The provisions of this Title shall
apply to employees in all establishments and
undertakings whether for profit or not, but not to xxx
managerial employees xxx those whose primary
duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof, and to other
officers or
members of the managerial staff.
Art. 219
(m) “Managerial employee” is one who is vested
with the powers or prerogatives to lay down and
execute
management policies and/or to hire, transfer,
suspend, layoff, recall, discharge, assign, or
discipline employees. Supervisory employees are
those who, in the interest of the employer,
effectively recommend such managerial actions if
the exercise of such authority is not merely routinary
or clerical in nature but requires the use of
independent judgment. All employees not falling
within any of the above definitions are considered
rank-and-file employees for
purposes of this book.
Omnibus, Book III Rule I
SECTION 2. Exemption. — The provisions of this
Rule shall not apply to the following persons if they
qualify for exemption under the conditions set forth
herein:
xxx
(b) Managerial employees, if they meet all of the
following conditions:
(1) Their primary duty consists of the management
of the establishment in which they are employed or
of a
department or sub-division thereof.
(2) They customarily and regularly direct the work
of two or more employees therein.
(3) They have the authority to hire or fire
employees of lower rank; or their suggestions and
recommendations as to hiring and firing and as to
the promotion or any other change of status of
other employees, are given particular weight.
(c) Officers or members of a managerial staff if they
perform the following duties and responsibilities:
(1) The primary duty consists of the performance of
work directly related to management policies of their
employer;
(2) Customarily and regularly exercise discretion
and
independent judgment; and
(3) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists
of the management of the establishment in which
he is employed or subdivision thereof; or (ii)
execute under general supervision work along
specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute,
under general supervision, special assignments and
tasks; xxx
Asia Pacific Chartering, Inc. v. Farolan (2002)
Doctrine: With respect to rank and file
personnel, loss of trust and confidence as ground
for valid dismissal requires proof of involvement in
the alleged events in question and that mere
uncorroborated assertions and accusations by the
employer will not be sufficient. As regards
a managerial employee, mere existence of a basis
for believing that such employee has breached the
trust of his employer would suffice for his dismissal.
Facts: Respondent was a sales manager of an
airline company. There was a drop in their sales
revenues so respondent's employment was
terminated due to loss of trust and confidence.
Thus, respondent filed a complaint for illegal
dismissal with prayer for damages.
Held: The dismissal was illegal because petitioner
failed to prove that respondent made a willful
breach of duty. Neither did they put her exact job
description in writing, and therefore they could not
prove that her job as ‘manager’ is the kind
contemplated by the doctrine on dismissal through
‘loss of confidence.’
Even assuming that respondent was a managerial
employee, the stated ground for her dismissal, “loss
 of confidence,” should have a basis and 7.! Workers who are paid by results as
determination. For it to be a valid ground, it must be determined by the Secretary of Labor in
based on a willful breach and founded on clearly appropriate regulations.
established facts. As used herein, “managerial employees” refer to those
whose primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof, and to other officers
CHARLITO PENARANDA vs. BANGANGA PLYWOOD or members of the managerial staff.
(2006)
Facts: Petitioner was hired by respondent to take “Field personnel” shall refer to non-agricultural
charge of operations and maintenance of steam plant employees who regularly perform their duties away
boiler in 1999. The Labor Arbiter dismissed his charges from the principal place of business or branch office of
of illegal dismissal, but ruled that he was entitled to OT the employer and whose actual hours of work in the
pay, premium pay, and atty’s fees. field cannot be determined with reasonable certainty.

NLRC deleted the OT and premium pay, saying he Omnibus Rules, Book III, Rule I
wasn’t entitled to them because he was a managerial Section 2. Exemptions— The provisions of this Rule
employee, and the CA affirmed this decision. shall not apply to the following persons if they qualify
for exemption under the conditions set forth herein: x x
Issue: W/N petitioner was entitled to OT and premium x
pay? (f) Non-agricultural field personnel if they regularly
Ruling: No. Petitioner’s duties and responsibilities perform their duties away from the principal or branch
included the ff: supply required and continuous steam office or place of business of the employer and whose
to all consuming units at minimum cost; supervise, actual hours cannot be determined with reasonable
check, and monitor manpower worksmanship as well certainty.
as operation of boiler and accessories; evaluate
performances of machines and manpower; train new
employees for effectivity and safety while working; and MERDICAR FISHING CORPORATION v. NLRC (1998)
recommend personnel actions such as Doctrine: Field personnel who fall under the exemption
promotion/disciplinary action. Although he was not a are
managerial employee, he was still those whose actual hours in the field can’t be
part of managerial staff, which also takes him out of the reasonably ascertained. In this case, fishermen
coverage of labor standards. employed have no choice but to remain on the
employer’s vessel. Although they perform non-
3. Field Personnel agricultural work away from business offices,
Article 82. Coverage—The provisions of this Title shall throughout duration of work they are under the effective
apply to employees in all establishments and control and supervision of employer through the
undertakings whether for profit or not, but not to: vessel’s patron/master.
1.! Government employees;
2.! Managerial employees; Facts: Private respondent Agao was hired by petitioner
3.! Field personnel; as a bodegero or ship’s quartermaster. Agao filed a
4.! Members of the family of the employer who case for illegal dismissal against the employer, as well
are dependent on him for support; as non-payment of 5 days of service incentive leave.
5.! Domestic helpers;
6.! Persons in the personal service of another; Issue: W/N petitioner is field personnel and therefore
and not
entitled to SIL?
Ruling: No. Not field personnel because he was still
under the effective control and supervision of the
petitioner. He is therefore entitled to the payment of his
service incentive leave.
AUTO BUS TRANSPORT SYSTEM v. BAUTISTA (1998)
Doctrine: Respondent is not a field employee because
there are inspectors of the bus companies assigned at
strategic
places that board the bus, inspect the passengers,
tickets, and conductors’ reports. Drivers must be at a
specific place and time and observe prompt departure
and arrival, and this is ensured by the Dispatcher.
Respondent is still under supervision and control of the
employer.
Facts: Respondent was hired by petitioner as driver-
conductor. When petitioner made him work even when
he was sleepless for 24hrs, he ended up bumping into
another bus of the company, and was later terminated.
He then filed a case for illegal dismissal, 13th month
pay, and SIL pay.
Issue: W/N respondent is entitled to SIL pay?
Ruling: Yes. Respondent was not a field employee
because still under the control and supervision of the
employer
FAR EAST AGRICULTURAL SUPPLY vs. LEBATIQUE
(2007)
Doctrine: Respondent was not field personnel. He 1)
was
directed to deliver goods at a specified time and place,
2) had no discretion to select clients, and 3) had to
stay at clients’ premises during truck ban hours upon
petitioner’s directive. Drivers were under control and
supervision of management offices, therefore they are
regular employees whose tasks are necessary and
desirable.
Facts: Respondent was hired by petitioner as a truck
driver who delivered animal feeds to clients. One day,
he complained about nonpayment of OT pay. Petitioner
suspended him the same day, and later fired him. He
then filed for illegal dismissal and nonpayment of OT,
SIL, and 13th month pay.
Issue: W/N respondent is entitled to the money claims?
Ruling: Yes. Respondent was not a field employee
because he was under the control and supervision of
management offices, and therefore don’t fall under the
exemption to the payment of OT, SIL, and 13th month
pay.
4. Dependent Family Members
Article 82, supra
5. Domestic Workers; Exemption on Assignment
Article 82, supra
Article 139. Coverage— This Chapter shall apply to all
persons rendering services in households for
compensation.
“Domestic or household service” shall mean service in
the employer’s home which is usually necessary or
desirable for the maintenance and enjoyment thereof
and includes ministering to the personal comfort and
convenience of the members of the employer’s
household, including services of family drivers.
Article 143. Assignment to Non-Household Work— No
househelper shall be assigned to work in a commercial,
industrial or agricultural enterprise at a wage or salary
rate lower than that provided for agricultural or non-
agricultural workers as prescribed herein.
Omnibus Rules, Book III, Rule I
Section 2. Exemptions— The provisions of this Rule
shall not apply to the following persons if they qualify
for exemption under the conditions set forth herein: x x
x
(d) Domestic servants and persons in the personal
service of another if they perform such services in the
employer’s home which are usually necessary or
desirable for the maintenance and enjoyment thereof,
or minister to the personal comfort, convenience, or
safety of the employer as well as the members of his
employer’s household.
Republic Act No. 10361 (Kasambahay Act)
Section 22. Assignment to Non-Household Work—No
domestic worker shall be assigned to work in a
commercial, industrial or agricultural enterprise at a
wage rate lower than that provided for agricultural or
 nonagricultural workers. In such cases, the domestic
worker shall be paid the applicable minimum wage.
Implementing Rules of R.A. 10361, Rule V
SEC. 10. Assignment to Non-Household Work— The
employer shall not, at any point of the duration of
employment, assign the kasambahay to work whether
in full or part time in a commercial, industrial, or
agricultural enterprise.
When assigned to work in C/I/A enterprise, the
kasambahay must be paid the applicable minimum
wage and benefits for workers in such enterprise.
SEC. 11. Extent of Duty Outside the Household— The
kasambahay and the employer may mutually agree for
the kasambahay to temporarily perform a task for the
benefit of another household under the ff. conditions:
(a)! Agreement between kasambahay and the
employer for the purpose, particularly on
task/s to be performed
(b)! Kasambahay is entitled to additional payment
of not less than applicable minimum wage rate
(c)! Original employer shall be responsible for any
liability incurred by the kasambahay
account of such arrangement
(d)! Original employer is not charging any amount
from the other household. The
household is solidarily liable with the original
employer for any non-payment of wages
during such temporary assignment.
temporary performance shall not exceed 30
days per assignment. It shall be unlawful for
the original employer to charge any amount
from the household of temporary assignment.
6. Persons in the Personal Service of Another
Article 82, supra
Omnibus Rules, Book III, Rule I, Section 2(d), supra
7. Piece Workers
Article 82, supra
Omnibus Rules, Book III, Rule I
Section 2. Exemptions— The provisions of this Rule
shall not apply to the following persons if they qualify
for exemption under the conditions set forth herein: x x
x Doctrine: Piece workers must be unsupervised by the
(e) Workers who are paid by results, including those
who are paid on piece-work, “takay,” “pakiao,” or task
basis, and other non-time work if their output rates are
in accordance with the standards prescribed under
Section 8, Rule VII, Book Three of these regulations, or
where such rates have been fixed by the SOLE in
accordance with the aforesaid Section.
Omnibus Rules, Book III, Rule VII-A
Section 8. Payment by Result—
(a)! On petition of any interested party, or upon its
initiative, the DOLE shall use all available
devices, including the use of time and motion
studies and consultation with representatives
of employers’ and workers’ organizations, to
determine whether the employees in any
industry or enterprise are being compensated
in accordance with the minimum wage
requirements of this rule.
(b)! The basis for the establishment of rates for
piece, output, or contract work shall be the
performance of an ordinary worker of
minimum skill or ability.
on (c)! An ordinary worker of minimum skill or ability
is the average worker of the lowest producing
group representing 50% of the total number
other of employees engaged in similar employment
in a particular establishment, excluding
learners, apprentices, and handicapped
The workers employed therein.
(d)! Where the output rates established by the
employer do not conform with the standards
prescribed therein, or with rates prescribed by
DOLE in an appropriate order, the employees
shall be entitled to the difference between the
amount which they are entitled to receive
under such prescribed rates or standards and
that actually paid them by the employer.
Supervised Piece Unsupervised Piece
Workers Workers
Entitled to labor Exceptions to labor
standards standards as seen in Article
82 of the Labor Code
LABOR CONGRESS v. NLRC (1998)
 employer so that they may be excluded from receiving
benefits under labor standards. However, Omnibus
Rules Book III Rule IV Sec 8(b) still mandates the
payment of holiday pay to piece workers. PD 851
likewise still requires employers to pay 13th month pay
to piece workers. As to overtime pay, respondents did
not allege that petitioners are excluded from receiving
these, so the Court awarded OT pay as well.
Facts: 99 petitioners were rank-and-file employees of
respondent Empire Food Products, and they were
pakiao
workers tasked with repacking respondent’s cheese
curls. They filed a case against respondent for ULP by
lockout/dismissal, violating of their MOA (preparatory
to CBA), underpayment of wages, and damages.
Issue: W/N petitioners are entitled to reinstatement, OT
th
pay, 13 month, and SIL pay?
Ruling: Yes. Petitioners were regular employees,
despite being paid on pakiao basis because the status
and nature of their employment was that of regular
employees: repacking was necessary and desirable;
they worked throughout the year as opposed to specific
project/season; length of time they worked.
Furthermore, the piece workers excluded from
receiving labor standard benefits are those who are
unsupervised by the employer, which does not apply
in the instant case.
c. Normal Hours of Work
Article 83. Normal Hours of Work— The normal hours
of work of any employees shall not exceed eight (8)
hours a day.
Health personnel in cities and municipalities with a
population of at least one million (1,000,000) or in
hospitals and clinics with a bed capacity of at least eight
(8) hours a day, for five (5) days a week, exclusive of
time for meals except when the exigencies of the
service require that such personnel work for six (6)
days or forty-eight (48) hours, in which case, they shall
be entitled to an additional compensation of at least
thirty percent (30%) of their regular wage for work on
the sixth day. For purposes of this Article, “health
personnel” shall include resident physicians, nurses,
nutritionists, dietitians, pharmacists, social workers,
laboratory technicians, paramedical technicians,
psychologists, midwives, attendants and all other
hospital or clinic personnel.
Applies only to private hospitals
DO upholds the right to health of employees
Department Advisory No. 4, Series of 2010
Guidelines on Flexible Work Arrangements
Effectivity shall be based on voluntary agreements
between employer and employee.
Types of Flexible Work Arrangements:
1)! Compressed workweek – less than 6 days,
but 48 hours per week. Normal work day
shall be 8 to 12 hours.
2)! Gliding/Flexitime schedule – required to
complete core work hours, but employees
are free to determine their arrival and
departure time
3)! Flexible holidays schedule – employees
agree to avail of the holidays at some other
days provided that there is no diminution of
existing benefits. Nightwork prohibition for
women employees;
Exemption:
1)! Women employees are allowed to work at night
but they must not be below 18 years old
2)! Pregnant women and nursing mothers are
allowed upon certification of competent physician
of their fitness to work.
d. Compensable Hours of Work
In general—Omnibus Rules, Book III, Rule 1
Section 3. Hours Worked— The following shall be
considered as compensable hours worked:
(b)! All time during which an employee is required
to be on duty or to be at the employer's
premises or to be at a prescribed work place;
and
(c)! All time during which an employee is suffered
or permitted to work.
Section 4. Principles in determining hours worked. —
The following general principles shall govern in
determining whether the time spent by an employee is
considered hours worked for purposes of this Rule:
(a)! All hours are hours worked which the employee
 is required to give his employer, regardless of
whether or not such hours are spent in
productive labor or involve physical or mental
exertion;
(b)! An employee need not leave the premises of
the work place in order that his rest period shall
not be counted, it being enough that he stops
working, may rest completely and may leave his
work place, to go elsewhere, whether within or
outside the premises of his work place;
(c)! If the work performed was necessary, or it
benefited the employer, or the employee could
not abandon his work at the end of his normal
working hours because he had no replacement,
all time spent for such work shall be considered
as hours worked, if the work was with the
knowledge of his employer or immediate
supervisor
(d)! The time during which an employee is inactive
by reason of interruptions in his work beyond
his control shall be considered working time
either if the imminence of the resumption of
work requires the employee's presence at the
place of work or if the interval is too brief to be
utilized effectively and gainfully in the
employee's own interest.
1.! On Duty
Article 84. Hours worked—
Hours worked shall include
(a)! All time during which an employee is required
to be on duty or to be at a prescribed
workplace; x x x
Omnibus Rules, Book III, Rule 1
Section 3. Hours Worked— The following shall be
considered as compensable hours worked:
(a)! All time during which an employee is required
to be on duty or to be at the employer's
premises or to be at a prescribed work place
Section 4. Principles in determining hours worked. —
The following general principles shall govern in
determining whether the time spent by an employee is
considered hours worked for purposes of this Rule:
All hours are hours worked which the employee is
required to give his employer, regardless of whether or
not such hours are spent in productive labor or involve
physical or mental exertion.
2.! At work
Article 84. Hours worked—
Hours worked shall include
(a)! All time during which an employee is suffered
or permitted to work.
Section 3. Hours Worked— The following shall be
considered as compensable hours worked:
(b)! All time during which an employee is suffered
or permitted to work.
e. Specific Rules
1.! Rest Period
a.! Short Duration or “Coffee Break”
Article 84, paragraph 2
Rest periods of short duration during working hours
shall be counted as hours worked.
Section 7, paragraph 2
Rest periods or coffee breaks running from five (5) to
twenty (20) minutes shall be considered as
compensable working time.
b.! More than 20 minutes
Omnibus Rules, Book III, Rule I
Section 4. Principles in determining hours worked. —
The following general principles shall govern in
determining whether the time spent by an employee is
considered hours worked for purposes of this Rule:
b)! An employee need not leave the premises of
the work place in order that his rest period
shall not be counted, it being enough that he
stops working, may rest completely and may
leave his work place, to go elsewhere, whether
within or outside the premises of his work
place;
2.! Meal Period
a.! Regular Meal Period (One Hour)
Article 85. Meal periods— Subject to such regulations
as the Secretary of Labor may prescribe, it shall be the
duty of every employer to give his employees not less
than sixty (60) minutes time-off for their regular meals.
Omnibus Rules, Book III, Rule I
Section 7. Meal and Rest Periods — Every employer
shall give his employees, regardless of sex, not less
than one (1) hour time-off for regular meals, except in
the following cases when a meal period of not less
than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as
compensable hours worked of the employee:
(a)! Where the work is non-manual work in nature
or does not involve strenuous physical
exertion;
(b)! Where the establishment regularly operates not
less than sixteen (16) hours a day;
(c)! In case of actual or impending emergencies or
there is urgent work to be performed on
machineries, equipment or installations to
avoid serious loss which the employer would
otherwise suffer; and
(d)! Where the work is necessary to prevent
serious loss of perishable goods
PAL v. NLRC (1999)
Doctrine: Nowhere in the law may it be inferred that
employees must take their meals within company
premises.
Employees are not prohibited from going out as long
as they return to their posts on time. Respondent’s act,
therefore, of going home to take his dinner doesn’t
constitute abandonment of duty.
Facts: Private respondent Dr. Fabros was employed as
flight
surgeon for petitioner’s company, and was on duty
4pm-12mn. One night at about 7pm, he left the clinic
to have dinner at his house, which was about a five-
minute drive away. After he left, the clinic received a
call that one of PAL’s employees suffered a heart attack.
Patient arrived at the clinic at 7:50 and was rushed by
the nurse to the hospital. Dr. Fabros arrived at 7:51 and
missed the patient. The patient died the next day.
Petitioner suspended Dr. Fabros.
Issue: W/N Dr. Fabros was validly suspended?
Ruling: No. The 8-hour work period, pursuant to Arts
83 and 85 of LC, does not include meal breaks.
Employees are not prohibited from taking their meals
outside company premises as long as they return to
their posts on time. Therefore, Dr. Fabros did not
abandon his post and was illegally suspended.
b. Shorter Meal Period (Less than one hour, but not less
than 20 minutes)
Rule I, Section 7, paragraph 1, supra
3.! Waiting Time
Omnibus Rules, Book III, Rule I
Section 5(a). Waiting time— (a) Waiting time spent by
an employee shall be considered as working time if
waiting is an integral part of his work or the employee
is required or engaged by the employer to wait.
ARICA vs. NLRC (1989)
Doctrine: The 30-minute assembly time cannot be
considered waiting time because the employees’
houses were not far away and during this time they
could go back and attend to chores. Furthermore, this
time is not subject to absolute control of the company
and there is no sanction should they fail to go to the
assembly.
Facts: Petitioners who are employees of STANFILED
filed for compensation for the long-practiced 30-
minute assembly time they render before working. The
assembly time consisted of roll call and getting their
individual work assignments, accomplishing their daily
reports, retrieving their tools from the stock room, and
traveling to the field which was their place of work.
Issue: W/N the assembly time should be counted as
compensable working hours
Ruling: No, this action was barred by res judicata. It was
established in a previous case that it couldn’t be
counted as waiting time because the employees were
not subject to the full control and supervision of the
employer as they were allowed to go home and attend
to their chores and were not sanctioned for non-
attendance.
Prof. Battad says: The Court should have given due
course to this case because the factual circumstances of
this case differ from to the previous one. Now, the entire
30-minute period is spent preparing for work and the
employees no longer have free time to go home etc.
4.! On Call
Omnibus Rules, Book III, Rule I
Section 5. Waiting time— (b) An employee who is
required to remain on call in the employer's premises
or so close thereto that he cannot use the time
effectively and gainfully for his own purpose shall be
considered as working while on call. 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.
5.! Inactive due to Work Interruptions
Omnibus Rules, Book III, Rule I, Section 4(d)
Section 4. Principles in determining hours worked. —
The following general principles shall govern in
determining whether the time spent by an employee is
considered hours worked for purposes of this Rule:
(d) The time during which an employee is inactive
by reason of interruptions in his work beyond his
control shall be considered working time either if
the imminence of the resumption of work requires
the employee's presence at the place of work or if
the interval is too brief to be utilized effectively and
gainfully in the employee's own interest.
UNIVERSITY OF PANGASINAN FACULTY UNION vs.
UNIVERSITY OF PANGASINAN (1984)
Doctrine: IRR of Wage Order No 1 Sec 5: All covered
employees whether paid on a monthly or daily basis
shall be entitled to their daily living allowance when they
are paid their basic wage. Since petitioners were paid
their monthly salaries for November and December,
they are entitled to their ECOLAs for those months.
6.! Work after Normal Hours
Rule I, Section 4(c)
Section 4. Principles in determining hours worked. —
The following general principles shall govern in
determining whether the time spent by an employee is
considered hours worked for purposes of this Rule:
(c)! If the work performed was necessary, or it
benefited the employer, or the employee could
not abandon his work at the end of his normal
working hours because he had no
replacement, all time spent for such work shall
be considered as hours worked, if the work
was with the knowledge of his employer or
immediate supervisor.
ROBINA FARMS CEBU vs. VILLA (2016)
Doctrine: Overtime work must be proven performed
before the employee may claim overtime pay.
Employee can render overtime work only when there
was prior authorization by the management.
Facts: Respondent has been a sales clerk for petitioner
since 1981. In 2001, she availed herself of the
company’s retirement program. In 2002, she received
a memo regarding her alleged failure to issue invoices,
was suspended and later constructively dismissed.
NLRC ruled that she was illegally dismissed, and
ordered petitioner to reinstate her and pay backwages,
SIL pay, OT pay, and atty’s fees.
Issue: W/N respondent is entitled to OT pay?
Ruling: No. OT pay may only be given if OT work was
proven and with prior authorization. Daily time records
that showed respondent stayed more than 8 hours in
the premises does not substantially prove actual
performance of OT work.
7.! Lectures, Meetings, Training Programs
Omnibus Rules, Book III, Rule I
SECTION 6. Lectures, meetings, training programs—
Attendance at lectures, meetings, training programs,
and other similar activities shall not be counted as
working time if all of the following conditions are met:
2.! Attendance is outside of the employee's
regular working hours;
3.! Attendance is in fact voluntary; and
4.! The employee does not perform any
productive work during such attendance.
8.! Travel Time
RADA vs. NLRC (1992)
Doctrine: Petitioner’s assigned task of fetching and
delivering employees is indispensable and therefore
mandatory. Therefore, the more or less 3 hours used
doing this should be paid as OT work.
Facts: Petitioner was employed with respondent Philnor
as a driver for the construction and supervision phase
of Manila North Expressway. If the project driver wasn’t
available, petitioner was tasked with using the project
vehicle to pick up and drop off about 10 employees at
EDSA to and from his house in Marikina before and
after the working day.
 Issue: W/N petitioner’s travel time while picking up and
dropping off employees should be considered
compensable working hours/overtime work?
Ruling: Yes. Fetching and delivering respondent’s
employees was indispensable to the business of
respondent, therefore it was mandatory. Petitioner
should be paid overtime pay for the extra 3 hours of
work he rendered here.
Factors to consider: monitoring, whose vehicle was used,
for whom was it necessary/beneficial
-Travel from home to work – NOT COMPENSABLE
-Travel that is all in a day’s work – COMPENSABLE
-Travel away from home (business trip) – NOT
COMPENSABLE UNLESS CUTS ACROSS REGULAR
WORK HOURS
f. Overtime Work Pay
Article 87. Overtime work— Work may be performed
beyond eight (8) hours a day provided that the
employee is paid for the overtime work, an additional
compensation equivalent to his regular wage plus at
least twenty-five percent (25%) thereof. Work
performed beyond eight hours on a holiday or rest day
shall be paid an additional compensation equivalent to
the rate of the first eight hours on a holiday or rest day
plus at least thirty percent (30%) thereof.
Article 88. Undertime not offset by overtime—
Undertime work on any particular day shall not be offset
by overtime work on any other day. Permission given
to the employee to go on leave on some other day of
the week shall not exempt the employer from paying
the additional compensation required in this Chapter.
Article 89. Emergency overtime work— Any employee
may be required by the employer to perform overtime
work in any of the following cases:
(b)! When the country is at war or when any other
national or local emergency has been declared
by the National Assembly or the Chief
Executive;
(c)! When it is necessary to prevent loss of life or
property or in case of imminent danger to
public safety due to an actual or impending
emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake,
epidemic, or other disaster or calamity;
(d)! When there is urgent work to be performed on
machines, installations, or equipment, in order
to avoid serious loss or damage to the
employer or some other cause of similar
nature;
(e)! When the work is necessary to prevent loss or
damage to perishable goods; and
(f)! Where the completion or continuation of the
work started before the eighth hour is
necessary to prevent serious obstruction or
prejudice to the business or operations of the
employer.
Any employee required to render overtime work under
this Article shall be paid the additional compensation
required in this Chapter.
Article 90. Computation of additional compensation—
For purposes of computing overtime and other
additional remuneration as required by this Chapter, the
"regular wage" of an employee shall include the cash
wage only, without deduction on account of facilities
provided by the employer.
Omnibus Rules, Book III, Rule I
SECTION 8. Overtime pay. — Any employee covered
by this Rule who is permitted or required to work
beyond eight (8) hours on ordinary working days shall
be paid an additional compensation for the overtime
work in the amount equivalent to his regular wage plus
at least twenty-five percent (25%) thereof.
SECTION 9. Premium and overtime pay for holiday and
rest day work. —
1.! Except employees referred to under Section 2
of this Rule, an employee who is permitted or
suffered to work on special holidays or on his
designated rest days not falling on regular
holidays, shall be paid with an additional
compensation as premium pay of not less than
thirty percent (30%) of his regular wage. For
work performed in excess of eight (8) hours
on special holidays and rest days not falling
on regular holidays, an employee shall be paid
an additional compensation for the overtime
work equivalent to his rate for the first eight
hours on a special holiday or rest day plus at
least thirty percent (30%) thereof.
2.! Employees of public utility enterprises as well
 as those employed in non-profit institutions
and organizations shall be entitled to the
premium and overtime pay provided herein,
unless they are specifically excluded from the
coverage of this Rule as provided in Section
2 hereof.
3.! The payment of additional compensation for
work performed on regular holidays shall be
governed by Rule IV, Book Three, of these
Rules.
SECTION 10. Compulsory overtime work. — In any of
the following cases, an employer may require any of
his employees to work beyond eight (8) hours a day,
provided that the employee required to render overtime
work is paid the additional compensation required by
these regulations:
1.! When the country is at war or when any other
national or local emergency has been
declared by Congress or the Chief Executive;
2.! When overtime work is necessary to prevent
loss of life or property, or in case of imminent
danger to public safety due to actual or
impending emergency in the locality caused
by serious accident, fire, floods, typhoons,
earthquake, epidemic or other disaster or
calamities;
3.! When there is urgent work to be performed
on machines, installations, or equipment, in
order to avoid serious loss or damage to the
employer or some other causes of similar
nature;
4.! When the work is necessary to prevent loss or
damage to perishable goods;
5.! When the completion or continuation of work
started before the 8th hour is necessary to
prevent serious obstruction or prejudice to the
business or operations of the employer; or
6.! When overtime work is necessary to avail of
favorable weather or environmental conditions
where performance or quality of work is
dependent thereon.
In cases not falling within any of these enumerated in
this Section, no employee may be made to work
beyond eight hours a day against his will.
1.! Overtime in Ordinary Working Day
Article 87. Overtime work— Work may be performed
beyond eight (8) hours a day provided that the
employee is paid for the overtime work, an additional
compensation equivalent to his regular wage plus at
least twenty-five percent (25%) thereof. Work
performed beyond eight hours on a holiday or rest day
shall be paid an additional compensation equivalent to
the rate of the first eight hours on a holiday or rest day
plus at least thirty percent (30%) thereof.
Article 90. Computation of additional compensation—
For purposes of computing overtime and other
additional remuneration as required by this Chapter, the
"regular wage" of an employee shall include the cash
wage only, without deduction on account of facilities
provided by the employer.
Article 97. Definitions—
(f) "Wage" paid to any employee shall mean 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, which
is payable by an employer to an employee under a
written or unwritten contract of employment for work
done or to be done, or for services rendered or to be
rendered and includes the fair and reasonable value,
as determined by the Secretary of Labor and
Employment, of board, lodging, or other facilities
customarily furnished by the employer to the employee.
"Fair and reasonable value" shall not include any profit
to the employer, or to any person affiliated with the
employer.
Omnibus Rules, Book III, Rule I
SECTION 8. Overtime pay. — Any employee covered
by this Rule who is permitted or required to work
beyond eight (8) hours on ordinary working days shall
be paid an additional compensation for the overtime
work in the amount equivalent to his regular wage plus
at least twenty-five percent (25%) thereof.
See: Department Advisory No. 02, Series of 2004
2.! Emergency or Compulsory Overtime Work
Article 89. Emergency overtime work— Any employee
may be required by the employer to perform overtime
work in any of the following cases:
 (a)! When the country is at war or when any other
national or local emergency has been
declared by the National Assembly or the
Chief Executive;
(b)! When it is necessary to prevent loss of life or
property or in case of imminent danger to
public safety due to an actual or impending
emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake,
epidemic, or other disaster or calamity;
(c)! When there is urgent work to be performed
on machines, installations, or equipment, in
order to avoid serious loss or damage to the
employer or some other cause of similar
nature;
(d)! When the work is necessary to prevent loss
or damage to perishable goods; and
(e)! Where the completion or continuation of the
work started before the eighth hour
necessary to prevent serious obstruction or
prejudice to the business or operations of the
employer.
Any employee required to render overtime work under
this Article shall be paid the additional compensation
required in this Chapter.
Section 10, supra
PIGCAULAN vs. SECURITY & CREDIT INVESTIGATION,
INC. (2012)
Doctrine: No substantial evidence to support the award
of OT pay. Handwritten itemized computations of daily
time records are self-serving, unreliable,
unsubstantial evidence to support salary differentials.
Facts: Pigcaulan and Canoy were security guards at
respondent company. They separately filed complaints
against respondent for underpayment, plus non-
payment of OT, holiday, rest day, SIL, and 13th month
pay. They submitted their daily time records reflecting
the number of hours served and their wages for the
same. Canoy failed to appeal so he was dropped from
the petition.
Issue: W/N petitioner is entitled to OT pay?
Ruling: No. Evidence submitted is self-serving and
unsubstantial to prove OT work performed.
OT pay
o! Needs legal basis
o! Written authorization
o! Competent evidence
OT pay may be included in wages, provided that
the computation would show the additional
payment
3.! Undertime Work/Leave
Article 88. Undertime not offset by overtime—
Undertime work on any particular day shall not be offset
by overtime work on any other day. Permission given
to the employee to go on leave on some other day of
the week shall not exempt the employer from paying
the additional compensation required in this Chapter.
4.! Additional Compensation
is Article 87. Overtime work— Work may be performed
beyond eight (8) hours a day provided that the
employee is paid for the overtime work, an additional
compensation equivalent to his regular wage plus at
least twenty-five percent (25%) thereof. Work
performed beyond eight hours on a holiday or rest day
shall be paid an additional compensation equivalent to
the rate of the first eight hours on a holiday or rest day
plus at least thirty percent (30%) thereof.
Section 9, supra
5.! Proof of Work/Employer Obligation
SSS v. CA (2000)
Facts: Margarita Tana alleged that her late husband
and
was an employee of Conchita Ayalde as a farmhand
in 2 sugarcane plantations for 18 years (6 days a
week). He received a regular salary and such were
reduced to pay for social security contributions, as
well as medicare and employees compensation
premiums. After his death, Margarita discovered that
Tana was never reported for coverage, nor were his
contributions/premiums remitted to the SSS.
The Social Security Commission ruled in favor of
Margarita holding Conchita liable for the payment of
damages equivalent to the death benefits and the
funeral benefits. Also that SSS is to pay Margarita her
accrued pension. CA reversed and dismissed the
 suffered to work at night, except those employed in
claim, that as an independent contractor on pakyaw
agriculture, stock raising, fishing, maritime transport
basis (or “task basis”), Tana did not fall within the
and inland navigation, during a period of not less
coverage of the Social Security Law.
than seven (7) consecutive hours, including the
interval from midnight to five o’clock in the morning,
Issue: W/N an agricultural laborer who was hired on
to be determined by the Secretary of Labor and
pakyaw basis can be considered an employee
Employment, after consulting the workers’
entitled to compulsory coverage and corresponding
representatives/labor organizations and employers.
benefits under the Social Security Law.
YES. Following the fourfold test, the Court held that
‘Night worker’ means any employed person whose
there exists an ER-EE Relationship. There was
work requires performance of a substantial number
substantial testimonial evidence (witnesses) that other
of hours of night work which exceeds a specified
than pakyaw basis, Tana was also paid a daily wage
limit. This limit shall be fixed by the Secretary of Labor
which was disbursed every 15 days.
after consulting the workers’ representatives/labor
organizations and employers.”
Doctrine:
The mandatory coverage under the SSS Law is
Art. 155. Health Assessment, – At their request,
premised on the existence of an employer-employee
workers shall have the right to undergo a health
relationship, and Section 8(d) defines an employee
assessment without charge and to receive advice on
as any person who performs services for an
how to reduce or avoid health problems associated
employer in which either or both mental and physical
with their work:
efforts are used and who receives compensation for
such services where there is an employer-employee
(a) Before taking up an assignment as a night worker;
relationship.
(b) At regular intervals during such an assignment;
and
When a worker possesses some attributes of an
(c) If they experience health problems during such
employee and others of an independent contractor,
an assignment which are not caused by factors other
which make him fall within an intermediate area, he
than the performance of night work.
may be classified under the category of an employee
when the economic facts of the relations make it
With the exception of a finding of unfitness for night
more nearly one of employment than one of
work, the findings of such assessments shall not be
independent business enterprise with respect to the
transmitted to others without the workers’ consent
ends sought to be accomplished.
and shall not be used to their detriment.

Ruling: SC reverses CA resolution; reinstated the

Social Secutiry Commission resolution.
•! Nightwork and Night Shift Differential
ILO Conventions 89 and 171 have been adopted into
our laws.
RA No. 10151 (now incorporated in the Labor Code
as Articles 154-161)
[Note: DO 119-12 is the IRR of RA No. 10151 but
was not discussed in class]
Art. 154. Coverage.— This chapter shall apply to all
persons, who shall be employed or permitted or
Art. 156. Mandatory Facilities.— Suitable first-aid
facilities shall be made available for workers
performing night work, including arrangements where
such workers, where necessary, can be taken
immediately to a place for appropriate treatment. The
employers are likewise required to provide safe and
healthful working conditions and adequate or
reasonable facilities such as sleeping or resting
quarters in the establishment and transportation from
the work premises to the nearest point of their
residence subject to exceptions and guidelines to be
provided by the DOLE.
Art. 157. Transfer.— 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,
these workers shall be granted the same benefits as
other workers who are unable to work, or to secure
employment during such period.
A night worker certified as temporarily unfit for night
work shall be given the same protection against
dismissal or notice of dismissal as other workers who
are prevented from working for reasons of health.
Art. 158. Women Night Workers.— Measures shall be
taken to ensure that an alternative to night work is
available to women workers who would otherwise be
called upon to perform such work:
(1)! Before and after childbirth, for a
period of at least sixteen (16)
weeks, which shall be divided
between the time before and after
childbirth;
(2)! For additional periods, in respect of
which a medical certificate
produced stating that said
additional periods are necessary
for the health of the mother or child:
(i)! During pregnancy;
(ii)! During a specified time beyond the
period, after childbirth is fixed pursuant
to subparagraph (a) above, the length
of which shall be determined by the
DOLE after consulting the labor
organizations and employers.
During the periods referred to in this article:
1.! A woman worker shall not be dismissed or
given notice of dismissal, except for just or
authorised causes provided for in this Code
that are not connected with pregnancy,
childbirth and childcare responsibilities.
2.! A woman worker shall not lose the benefits
regarding her status, seniority, and access
to promotion which may attach to her
regular night work position.
Pregnant women and nursing mothers may he
allowed to work at night only if a competent
physician, other than the company physician, shall
certify their fitness to render night work, and specify,
in the ease of pregnant employees, the period of the
pregnancy that they can safely work.
The measures referred to in this article may include
transfer to day work where this is possible, the
provision of social security benefits or an extension
of maternity leave.
The provisions of this article shall not have the effect
of reducing the protection and benefits connected
with maternity leave under existing laws.
Art. 159. Compensation.— The compensation for
night workers in the form of working time, pay or
similar benefits shall recognize the exceptional nature
of night work.
is Art. 160. Social Services.—Appropriate social
services shall be provided for night workers and,
where necessary, for workers performing night work.
Art. 161. Night Work Schedules.— Before introducing
work schedules requiring the services of night
workers, the employer shall consult the workers’
representatives/labor
organizations concerned on the details of such
schedules and the forms of organization of night work
that are best adapted to the establishment and its
personnel, as well as on the occupational health
measures and social services which are required. In
establishments employing night workers, consultation
shall take place regularly.
Article 82. Coverage—
The provisions of this Title shall apply to employees
in all establishments and undertakings whether for
profit or not, but not to government employees,
managerial employees, field personnel, members of
the family of the employer who are dependent on
him for support, domestic helpers, persons in the
personal service of another, and workers who are
paid by results as determined by the Secretary of
Labor in appropriate regulations.
As used herein, "managerial employees" refer to
those whose primary duty consists of the
management of the establishment in which they are
employed or of a department or subdivision thereof,
and to other officers or members of the managerial
staff.
"Field personnel" shall refer to non-agricultural
employees who regularly perform their duties away
from the principal place of business or branch office
of the employer and whose actual hours of work in
the field cannot be determined with reasonable
certainty.
Article 86. Night shift differential—
Every employee shall be paid a night shift differential
of not less than ten percent (10%) of his regular
wage for each hour of work performed between ten
o’clock in the evening and six o’clock in the morning.
RULE II, SEC 1-6. Night Shift Differential.
SECTION 1. Coverage. — This Rule shall apply to all
employees except:
a.! Those of the government and any of its
political subdivisions, including
government-owned and/or controlled
corporations;
b.! Those of retail and service establishments
regularly employing not more than five (5)
workers;
c.! Domestic helpers and persons in the
personal service of another;
d.! Managerial employees as defined in Book
Three of this Code;
e.! 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.
SECTION 2. Night shift differential. — An employee
shall be paid night shift differential of no less than ten
per cent (10%) of his regular wage for each hour of
work performed between ten o'clock in the evening
and six o'clock in the morning.
SECTION 3. Additional compensation. — Where an
employee is permitted or suffered to work on the
period covered after his work schedule, he shall be
entitled to his regular wage plus at least twenty-five
per cent (25%) and an additional amount of no less
than ten per cent (10%) of such overtime rate for
each hour or work performed between 10 p.m. to 6
a.m.
SECTION 4. Additional compensation on scheduled
rest day/special holiday. — An employee who is
required or permitted to work on the period covered
during rest days and/or special holidays not falling
on regular holidays, shall be paid a compensation
equivalent to his regular wage plus at least thirty
(30%) per cent and an additional amount of not less
than ten (10%) per cent of such premium pay rate
for each hour of work performed.
SECTION 5. Additional compensation on regular
holidays. — For work on the period covered during
regular holidays, an employee shall be entitled to his
regular wage during these days plus an additional
compensation of no less than ten (10%) per cent of
such premium rate for each hour of work performed.
SECTION 6. Relation to agreements. — Nothing in
this Rule shall justify an employer in withdrawing or
reducing any benefits, supplements or payments as
provided in existing individual or collective
agreements or employer practice or policy.
IRR of RA 6727.
f) "Retail Establishment" is one principally
engaged in the sale of goods to end-users for
personal or household use;
g) "Service Establishment" is one principally
engaged in the sale of service to individuals for
 their own or household use and is generally
recognized as such;
SHELL OIL COMPANY V. LABOR UNION (1948)
Facts: Upon request from the National Labor Union
(herein respondent), the Industrial Relations Court
obliged Shell to pay their workers additional 50% over
their regular wages as compensation if they work
during the day since Shell needs the night service of
many of their workers.
p.m. during the effectivity of the 4th CBA. However,
petitioner alleges that payment of such was an error
thus refused to pay the NSD.
Voluntary Arbitrator ruled in favor of respondent
(Union) that the inclusion of paragraph 3, Section 3,
Article VIII of the 4th CBA disclosed the intent of the
parties to grant night shift differential benefits to
employees who rendered work beyond the regular
day shift. CA affirmed VA decision.

Doctrine: Commonwealth Act No. 444 is not Issue: W/N the workers are entitled to night shift
applicable to this case (re: overtime pay) because the differential for work performed beyond the regular day
work at night in this case is another kind of work shift, from 7:00 a.m. to 3:00 p.m.
totally independent of daytime hours (not considered YES. This was intended by the contracting parties.
"overtime work"). So there are two shifts: the shift of
laborers working day and the turn of those who work Doctrine: It is settled that in order to ascertain the
at night. intention of the contracting parties, the Voluntary
Arbitrator shall principally consider their
contemporaneous and subsequent acts as well as
ADDT’L NOTES (re: nightwork):
their negotiating and contractual history and evidence
The SC discussed repercussions of nightwork:
of past practices.
1. [HEALTH risks] The lack of sunlight tends to
produce anemia and tuberculosis and to predispose
In this case, the Voluntary Arbitrator and the Court of
to other ills. Nightwork brings increased liability to
Appeals both found that the provision in question was
eyestrain and accident. Serious moral dangers also
contained in the 1st, 2nd, and 3rd CBAs between
are likely to result from the necessity of traveling the
petitioner and respondent. During the effectivity of the
streets alone at night, and from the interference with
first three CBAs, petitioner paid night shift differentials
normal home life.
to other workers who were members of respondent
2. [Social point of view], even a relatively high degree
for work performed beyond 3:00 p.m. Petitioner also
of efficiency in night operations must be forfeited if it
paid night shift differential for work beyond 3:00 p.m.
is purchased with rapid exhaustion of the health and
during the effectivity of the 4th CBA. Petitioner failed
energy of the workers.
to present any convincing evidence to prove that the
3. [Economic point of view], nightwork may be
payment was erroneous.
necessary if the employer is to meet the demand for
his product, or if he is to maintain his market in the
face of increasing competition or mounting variable WAGE COMPUTATION SUMMARY
production costs.
Hourly Rate= Daily rate/8
Rate per hour of work= Hourly Rate x Z
LEPANTO CONSOLIDATED MINING V. LEPANTO
LOCAL STAFF UNION (2008)
*if monthly: Daily Rate= (Monthly Salary x 12)/ Number
of days a year
Facts: During the effectivity of the first three CBAs,
petitioner paid night shift differentials to other workers
Z:
who were members of respondent for work
Regular Day
performed beyond 3:00 p.m. Petitioner also paid
Sunday 1.3
night shift differential (NSD) for work beyond 3:00
Rest Day 1.3
Special Holiday 1.3 2. Weekly Rest Periods
Special Holiday, Rest Day 1.5 LC 91. Right to weekly rest day.
Regular Holiday 2 It shall be the duty of every employer, whether
Double Holiday 3 operating for profit or not, to provide each of his
Double Holiday, Rest day 3.9 employees a rest period of not less than twenty-four
Regular day, Night Shift 1.1 (24) consecutive hours after every six (6) consecutive
Rest day, Night Shift 1.3x1.1= 1.43 normal work days.
Special Holiday, Night 1.3x1.1= 1.43
Shift The employer shall determine and schedule the
weekly rest day of his employees subject to collective
Special Holiday, Rest Day, 1.5x1.1= 1.65
Night Shift bargaining agreement and to such rules and
regulations as the Secretary of Labor and
Regular Holiday, Night 2x1.1= 2.2
Employment may provide. However, the employer
Shift
shall respect the preference of employees as to their
Regular Holiday, Rest day, 2.6x1.1= 2.86
weekly rest day when such preference is based on
Night Shift
religious grounds.
Double Holiday, Night 3x1.1= 3.3
Shift
LC 92. When employer may require work on a rest
Double Holiday, Rest Day, 3.9x1.1= 4.29
day.
Night Shift
The employer may require his employees to work on
Regular Day, Overtime 1.25
any day:
Rest Day, Overtime 1.3x1.3= 1.69
1.! In case of actual or impending emergencies
Special Holiday, Overtime 1.3x1.3= 1.69
caused by serious accident, fire, flood,
Special Holiday, Rest Day, 1.5x1.3= 1.95
typhoon, earthquake, epidemic or other
Overtime
disaster or calamity to prevent loss of life
Regular Holiday, Overtime 2x1.3= 2.6 and property, or imminent danger to public
Regular Holiday, Rest Day, 2.6x1.3- 3.38 safety;
Overtime 2.! In cases of urgent work to be performed on
Double Holiday, Overtime 3x1.3= 3.9 the machinery, equipment, or installation, to
Double Holiday, Rest Day, 3.9x1.3= 5.07 avoid serious loss which the employer
Overtime would otherwise suffer;
Night Shift, Overtime 1.1x1.25- 1.375 3.! In the event of abnormal pressure of work
Rest Day, Night Shift, 1.3x1.1x1.3= 1.859 due to special circumstances, where the
Overtime employer cannot ordinarily be expected to
Special Holiday, Night 1.3x1.1x1.3= 1.859 resort to other measures;
Shift, Overtime 4.! To prevent loss or damage to perishable
Special Holiday, Rest Day, 1..5x1.1x1.3= 2.145 goods;
Night Shift, Overtime 5.! Where the nature of the work requires
Regular Holiday, Night 2x1.1x1.3= 2.86 continuous operations and the stoppage of
Shift, Overtime work may result in irreparable injury or loss
Regular Holiday, Rest Day, 2.6x1.1x1.3= 3.718 to the employer; and
Night Shift, Overtime 6.! Under other circumstances analogous or
Double Holiday, Night 3x1.1x1.3= 4.29 similar to the foregoing as determined by the
Shift, Overtime Secretary of Labor and Employment.
Double Holiday, Rest Day, 3.9x1.1x1.3= 5.577
Night Shift, Overtime LC 93. Compensation for rest day, Sunday or holiday
work.
 (a)! Where an employee is made or permitted to
work on his scheduled rest day, he shall be
paid an additional compensation of at least
thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional
compensation for work performed on
Sunday only when it is his established rest
day.
(b)! When the nature of the work of the
employee is such that he has no regular
workdays and no regular rest days can be
scheduled, he shall be paid an additional
compensation of at least thirty percent
(30%) of his regular wage for work
performed on Sundays and holidays.
(c)! Work performed on any special holiday shall
be paid an additional compensation of at
least thirty percent (30%) of the regular
wage of the employee. Where such holiday
work falls on the employee’s scheduled rest
day, he shall be entitled to an additional
compensation of at least fifty per cent (50%)
of his regular wage.
(d)! Where the collective bargaining agreement
or other applicable employment contract
stipulates the payment of a higher premium
pay than that prescribed under this Article,
the employer shall pay such higher rate.
RULE III, SEC 1-9.
SECTION 1. General statement on coverage. — This
Rule shall apply to all employers whether operating
for profit or not, including public utilities operated by
private persons.
SECTION 2. Business on Sundays/Holidays. — All
establishments and enterprises may operate or open
for business on Sundays and holidays provided that
the employees are given the weekly rest day and the
benefits as provided in this Rule.
SECTION 3. Weekly rest day. — Every employer shall
give his employees a rest period of not less than
twenty-four (24) consecutive hours after every six
consecutive normal work days.
SECTION 4. Preference of employee. — The
preference of the employee as to his weekly day of
rest shall be respected by the employer if the same
is based on religious grounds. The employee shall
make known his preference to the employer in writing
at least seven (7) days before the desired effectivity
of the initial rest day so preferred.
Where, however, the choice of the employee as to
his rest day based on religious grounds will inevitably
result in serious prejudice or obstruction to the
operations of the undertaking and the employer
cannot normally be expected to resort to other
remedial measures, the employer may so schedule
the weekly rest day of his choice for at least two (2)
days in a month.
SECTION 5. Schedule of rest day. — (a) Where the
weekly rest is given to all employees simultaneously,
the employer shall make known such rest period by
means of a written notice posted conspicuously in
the work place at least one week before it becomes
effective.
(b) Where the rest period is not granted to all
employees simultaneously and collectively, the
employer shall make known to the employees their
respective schedules of weekly rest through written
notices posted conspicuously in the work place at
least one week before they become effective.
SECTION 6. When work on rest day authorized. —
An employer may require any of his employees to
work on his scheduled rest day for the duration of
the following emergencies and exceptional
conditions:
a.! In case of actual or impending emergencies
caused by serious accident, fire, flood,
typhoon, earthquake, epidemic or other
disaster or calamity, to prevent loss of life or
property, or in cases of force majeure or
imminent danger to public safety;
b.! In case of urgent work to be performed on
machineries, equipment or installations to
avoid serious loss which the employer
would otherwise suffer;
c.! In the event of abnormal pressure of work
due to special circumstances, where the
 employer cannot ordinarily be expected to
resort to other measures;
d.! To prevent serious loss of perishable goods;
e.! Where the nature of the work is such that
the employees have to work continuously for
seven (7) days in a week or more, as in the
case of the crew members of a vessel to
complete a voyage and in other similar
cases; and
f.! When the work is necessary to avail of
favorable weather or environmental
conditions where performance or quality of
work is dependent thereon.
No employee shall be required against his will to
work on his scheduled rest day except under
circumstances provided in this Section: Provided,
However, that where an employee volunteers to work
on his rest day under other circumstances, he shall
express such desire in writing, subject to the
provisions of Section 7 hereof regarding additional
compensation.
SECTION 7. Compensation on rest
day/Sunday/holiday. —
(a)! Except those employees referred to under
Section 2, Rule I, Book Three, an employee
who is made or permitted to work on his
scheduled rest day shall be paid with an
additional compensation of at least 30% of
his regular wage. An employee shall be
entitled to such additional compensation for
work performed on a Sunday only when it
is his established rest day.
(b)! Where the nature of the work of the
employee is such that he has no regular
work days and no regular rest days can be
scheduled, he shall be paid an additional
compensation of at least 30% of his regular
wage for work performed on Sundays and
holidays.
(c)! Work performed on any special holiday shall
be paid with an additional compensation of
at least 30% of the regular wage of the
employees. Where such holiday work falls
on the employee's scheduled rest day, he
shall be entitled to additional compensation
of at least 50% of his regular wage.
(d)! The payment of additional compensation for
work performed on regular holiday shall be
governed by Rule IV, Book Three, of these
regulations.
(e)! Where the collective bargaining agreement
or other applicable employment contract
stipulates the payment of a higher premium
pay than that prescribed under this Section,
the employer shall pay such higher rate.
SECTION 8. Paid-off days. — Nothing in this Rule
shall justify an employer in reducing the
compensation of his employees for the unworked
Sundays, holidays, or other rest days which are
considered paid-off days or holidays by agreement
or practice subsisting upon the effectivity of the Code.
SECTION 9. Relation to agreements. — Nothing
herein shall prevent the employer and his employees
or their representatives in entering into any agreement
with terms more favorable to the employees than
those provided herein, or be used to diminish any
benefit granted to the employees under existing laws,
agreements, and voluntary employer practices.
3. Holidays
LC 94(a)
Right to holiday pay.
Every worker shall be paid his regular daily wage
during regular holidays, except in retail and service
establishments regularly employing less than ten (10)
workers
BOOK III, RULE IV
Holidays with Pay
SECTION 1. Coverage. — This rule shall apply to all
employees except:
(a) Those of the government and any of the political
subdivision, including government-owned and
controlled corporation;
(b) Those of retail and service establishments
regularly employing less than ten (10) workers;
(c) Domestic helpers and persons in the personal
service of another;
(d) Managerial employees as defined in Book Three
of the Code;
(e) 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.
MANTRADE DIVISION EMPLOYEES V. BACUNGAN
(1986)
Facts: Petitoner Mantrade Union files a petition for
certiorari and mandamus against the respondent
Voluntary Arbitrator Bacungan and Mantrade
Development Corporation. This was due to the LA
decision of Bacungan which ruled that, “Mantrade
Development Corporation is not under legal
obligation to pay holiday pay to its monthly paid
employees who are uniformly paid by the month,
irrespective of the number of working days therein,
with a salary of not less than the statutory or
established minimum wage.” Mantrade Union
questions the validity of the Sec. 2, Rule IV, Book III
of the Rules and Regulations Implementing the Labor
Code as amended on which Bacungan based his
decision.
Issue: W/N said section is null and void, thus the
corporation is legally obligated to grant the holiday
pay.
YES. Respondent corporation is under legal obligation
to grant its monthly salaried employees holiday pay.
Ruling: As decided by the court in Insular Bank of
Asia and American Employees’ Union v Inciong, Sec.
2, Rule IV, Book III of the Rules and Regulations
Implementing the Labor Code is null and void for
enlarging the scope of the exclusion provided for in
Art. 94. Art. 82 provides for the inclusion, and Art. 94
provides for exclusion. Taken together, it is clear that
monthly-paid employees are not excluded from
payment of holiday pay. This ruling was reiterated in
Chartered Bank Employees Association vs Ople
wherein it added that, "An administrative interpretation
which diminishes the benefits of labor more than what
the statute delimits or withholds is obviously ultra
vires."
DAVID V. MACASIO (2014)
Facts: Macasio (a butcher for 11 years) filed a
complaint against his employer David (business:
"Yiels Hog Dealer") with the LA for non-payment of
overtime pay, holiday pay, and 13th month pay. In
David's defense, he alleges that Macasio was hired
as a butcher on "pakyaw" or task basis thus not
entitled to OTP, HP, SIL and 13th MP purusant to the
provisions of the IRR of the Labor Code.
Issue: W/N CA erred in ruling that Macasio is entitled
to these labor standards benefits.
NO, as to the holiday and SIL pay. YES, as to the
13th month pay. Macasio does not fall under the
classification of "field personnel" thus he is not
exempted from the grant of holiday and SIL pay even
as he was engaged on "pakyaw" or task basis.
However, PD No 851 governs 13th month pay which
he is not entitled to (see discussion below).
Ruling:
[Macasio is entitled to the holiday and SIL pay]
The general rule is that holiday and SIL pay provisions
cover all employees. To be excluded from their
coverage, an employee must be one of those that
these provisions expressly exempt, strictly in
accordance with the exemption. The payment of an
employee on task or pakyaw basis alone is
insufficient to exclude one from the coverage of SIL
and holiday pay. They are exempted from the
coverage of Title I (including the holiday and SIL pay)
only if they qualify as "field personnel."
In a string of cases, the Court applied the rule on
ejusdem generis (that general and unlimited terms
are restrained and limited by the particular terms that
they follow) and declared that "employees engaged
on task or contract basis" is a different classification
from "field personnel."
[Macasio is not entitled to the 13th month pay]
The governing law on 13th month pay is PD No. 851.
As with holiday and SIL pay, 13th month pay benefits
generally cover all employees; an employee must be
one of those expressly enumerated to be exempted.
Section 3 of the Rules and Regulations Implementing
P.D. No. 851 enumerates the exemptions from the
coverage of 13th month pay benefits. Under Section
3(e), "employers of those who are paid on xxx task
basis, and those who are paid a fixed amount for
performing a specific work, irrespective of the time
consumed in the performance thereof" are exempted.
This exemption is made without reference to "field
personnel" thus the law did not intend to qualify the
exemption from its coverage.
Ruling: Partlly granted re: 13th month pay. But the rest
is AFFIRMED.
Article 82 of the Labor Code provides the exclusions
from the coverage of Title I, Book III of the Labor Code
- provisions governing working conditions and rest
periods.
Art. 82. Coverage.— The provisions of [Title I] shall
apply to employees in all establishments and
undertakings whether for profit or not, but not to
government employees, managerial employees, field
personnel, members of the family of the employer
who are dependent on him for support, domestic
helpers, persons in the personal service of another,
and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations.
xxxx
"Field personnel" shall refer to non-agricultural
employees who regularly perform their duties away
from the principal place of business or branch office
of the employer and whose actual hours of work in
the field cannot be determined with reasonable
certainty.
The pertinent portion of Article 94 of the Labor Code
and its corresponding provision in the IRR reads:
Art. 94. Right to holiday pay. (a) Every worker shall
be paid his regular daily wage during regular
holidays, except in retail and service establishments
regularly employing less than (10) workers.
xxxx
SECTION 1. Coverage. – This Rule shall apply to all
employees except:
xxxx
(e)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.
On the other hand, Article 95 of the Labor Code and
its corresponding provision in the IRR48 pertinently
provides:
Art. 95. Right to service incentive. (a) Every employee
who has rendered at least one year of service shall
be entitled to a yearly service incentive leave of five
days with pay.
(b) This provision shall not apply to those who are
already enjoying the benefit herein provided, those
enjoying vacation leave with pay of at least five days
and those employed in establishments regularly
employing less than ten employees or in
establishments exempted from granting this benefit by
the Secretary of Labor and Employment after
considering the viability or financial condition of such
establishment. [emphases ours]
xxxx
Section 1. Coverage. – This rule shall apply to all
employees except:
xxxx
(e) Field personnel and other employees whose
performance is unsupervised by the employer
including those who are engaged on task or contract
basis, purely commission basis, or those who are
paid a fixed amount for performing work irrespective
of the time consumed in the performance thereof.
ADDT’L NOTES (re: “pakyaw” basis)
1. A distinguishing characteristic of "pakyaw" or task
basis engagement, as opposed to straight-hour wage
payment, is the non-consideration of the time spent
in working. In a task-basis work, the emphasis is on
the task itself, in the sense that payment is reckoned
in terms of completion of the work, not in terms of
 the number of time spent in the completion of
i.! In the event the holiday falls on a Wednesday, the
work.45 Once the work or task is completed, the
holiday will be observed on the Monday of the week.
worker receives a fixed amount as wage, without
If the holiday falls on a Sunday, the holiday will be
regard to the standard measurements of time
observed on the Monday that follows:
generally used in pay computation.
2. The existence of employment relationship between
Provided, that for movable holidays, the President
the parties is determined by applying the "four-fold"
shall issue a specific date shall be declared as a
test; engagement on "pakyaw" or task basis does not
nonworking day.
determine the parties’ relationship as it is simply a
method of pay computation.

Holiday Pay
Regular Holiday/ Special Holiday LC 94 (b)
The employer may require an employee to work on
EO No. 292, as amended by, RA No. 9492, RA 9849 any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate;
Section 26, Chapter 7, Book I of Executive Order No.
292, otherwise known as "The Administrative Code
of 1987", as amended, is hereby amended to read 1. Faculty in Private School
as follows: RULE IV, SEC 8(a).
Holiday pay of certain employees. —
"SEC. 26. Regular Holidays and Nationwide Special (a) Private school teachers, including faculty
Days. - Unless otherwise modified by law, order, or members of colleges and universities, may not be
proclamation, the following regular holidays and paid for the regular holidays during semestral
special days shall be observed in the country: vacations. They shall, however, be paid for the regular
holidays during Christmas vacation;
(a) Regular Holidays
i.! New Year's Day -January 1 2. Divisor as a Factor
ii.! Maundy Thursday - Movable Date
TRANS-ASIA PHIL. EMPLOYEES ASSOCIATION V.
iii.! Good Friday - Movable Date
NLRC (1999)
iv.! Eidul Fitr - Movable Date
Facts: TAPEA (the duly-recognized collective
v.! Eidul Adha - Movable Date
bargaining agent of the monthly-paid rank-and-file
vi.! Araw ng Kagitingan (Bataan and Corregidor
employees) entered into a CBA with its employer,
Day) - Monday nearest April 9
Trans-Asia. The CBA provided for the payment of
vii.! Labor Day - Monday nearest May 1
holiday pay to be effective from April 1988 to March
viii.! Independence Day - Monday nearest June
1991. However, said CBA did not resolve the issue
12
as to holiday pay from Jan 1985 to Dec 1987.
ix.! National Heroes Day - Last Monday of August
Despite amicable settlement attempts thru NMCB, the
x.! Bonifacio Day - Monday nearest
said issue remained unresolved. Thus, TAPEA
November 30
President Galvez filed a complaint before the LA to
xi.! Christmas Day - December 25
claim the payment for holiday pay in arrears, unfair
xii.! Rizal Day - Monday nearest December 30
labor practice, damages, and atty's fees.

h.! Nationwide Special Holidays

Trans-Asia claims that it has always honored the
i.! Ninoy Aquino Day - Monday nearest August
labor law provisions on holiday pay by incorporating
21
the same in the payment of the monthly salaries of
ii.! All Saints Day - November 1
its employees. The company uses the divisor of 286
iii.! Last Day of the Year - December 31
 Section 6 of the Implementing Rules and Regulations
days in computing for its employees’ overtime pay
of Republic Act No. 6727 provides:
and daily rate deductions for absences (such takes
Section 6. Suggested Formula in Determining the
into account the 10 regular holidays in a year)
Equivalent Monthly Statutory Minimum Wage Rates.-
Without prejudice from existing company practices,
Issue: W/N the NLRC erred in affirming the dismissal
agreements or policies, the following formulas may
of LA.
be used as guides in determining the equivalent
NO. However, the divisor that Trans-Asia should is
monthly statutory minimum wage rates:
must be 287, instead of 286.
x x x x x x x x x
d) For those who do not work and are not considered
Ruling: Trans-Asia’s inclusion of holiday pay in
paid on Saturdays and Sundays or rest days:
petitioners monthly salary is clearly established by its
consistent use of the divisor of 286 days in the
Equivalent Monthly = Average Daily Wage Rate x 262
computation of its employees benefits and
days
deductions. The use by Trans-Asia of the 286 days
Rate (EMR) 12
divisor was never disputed by petitioners.

Where 262 days =

Based on SEC 6 of the IRR of RA 6727, the proper
250 days Ordinary working days
divisor that should be used for a situation wherein the
10 days Regular holidays
employees do not work and are not considered paid
2 days Special days (If considered paid; if actually
on Saturdays and Sundays or rest days is 262 days.
worked, this is equivalent to 2.6 days)
In the present case, since the employees of Trans-
-----------
Asia are required to work half-day on Saturdays, 26
262 days Total equivalent number of days
days should be added to the divisor of 262 days,
3. Sunday
thus, resulting to 288 days. However, due to the fact
ART. 93. Compensation for Rest Day, Sunday or Holiday
that the rest days of petitioners fall on a Sunday, the
Work. (a) Where an employee is made or permitted to
number of unworked but paid legal holidays should
work on his scheduled rest day, he shall be paid an
be reduced to nine (9), instead of ten (10), since one
additional compensation of at least thirty percent (30%)
legal holiday under E.O. No. 203 always falls on the
of his regular wage. An employee shall be entitled to
last Sunday of August, National Heroes Day. Thus,
such additional compensation for work performed on
the divisor that should be used in the present case
Sunday only when it is his established rest day.
should be 287 days.

Rule III Sec. 2

Affirmed with modification (287 days instead of 286).

SECTION 2. Business on Sundays/Holidays. — All

Section 4, Rule IV, Book III of the Omnibus Rules
Implementing the Labor Code:
Sec. 4. Compensation for holiday work. Any
employee who is permitted or suffered to work on
any regular holiday, not exceeding eight (8) hours,
shall be paid at least two hundred percent (200%) of
his regular daily wage. If the holiday falls on the
scheduled rest day of the employee, he shall be
entitled to an additional premium pay of at least 30%
of his regular holiday rate of 200% based on his
regular wage rate.
establishments and enterprises may operate or open
for business on Sundays and holidays provided that
the employees are given the weekly rest day and the
benefits as provided in this Rule.
WELLINGTON INVESTMENT INC. V. TRAJANO (1995)
Doctrine: This monthly salary shall serve as
compensation "for all days in the month whether
worked or not," and "irrespective of the number of
working days therein." In the event of the declaration of
any special holiday, or any fortuitous cause precluding
work on any particular day or days the employee is
 entitled to the salary for the entire month and the
employer has no right to deduct the proportionate
amount corresponding to the days when no work was
done.
Facts: It was found that in Petitioner company, there
was non-payment of regular holidays falling on a
Sunday for monthly paid employees.
Ruling: Court ruled that Wellington already conformed
to such (365 days – 51 Sundays, since 1 regular
holiday always falls on a Sunday). Such has been
accounted for by the “314” factor.
There is no provision of law requiring any employer to
make such adjustments in the monthly salary rate set
by him to take account of legal holidays falling on
Sundays in a given year, or, contrary to the legal
provisions bearing on the point, otherwise to reckon a
year at more than 365 days.
What the law requires of employers opting to pay by
the month is to assure that "the monthly minimum wage
shall not be less than the statutory minimum wage
multiplied by 365 days divided by twelve," and to pay
that salary "for all days in the month whether worked
or not," and "irrespective of the number of working days
therein."
4. Muslim Holiday
PD 1083 (Code of Muslim Personal Laws of the
Philippines)
BOOK FIVE: MISCELLANEOUS AND TRANSITORY
PROVISIONS TITLE I: MUSLIM HOLIDAYS
Article 169. Official Muslim holidays. The following are
hereby recognized as legal Muslim holidays: (a)
'Amun Jadid (New Year), which falls on the first day
of the first lunar month of Muharram;
(b) Maulid-un-Nabi (Birthday of the Prophet
Muhammad), which falls on the twelfth day of the third
lunar month of Rabi-ul- Awwal;
(c) Lailatul Isra Wal Mi'raj (Nocturnal Journey and
Ascension of the Prophet Muhammad), which falls on
the twenty-seventh day of the seventh lunar month of
Rajab;
(d) 'Id-ul-Fitr (Hari Raya Pausa), which falls on the first
day of the tenth lunar month of Shawwal,
commemorating the end of the fasting season; and
(e) 'Id-ul-Adha (Hari Raja Haji), which falls on the tenth
day of the twelfth lunar month of Dhu 1-Hijja.
Article 170. Provinces and cities where officially
observed. (1) Muslim holidays shall be officially
observed in the Provinces of Basilan, Lanao del Norte,
Lanao del Sur, Maguindanao, North Cotabato, Sultan
Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte and
Zamboanga del Sur, and in the Cities of Cotabato,
Iligan, Marawi, Pagadian, and Zamboanga and in such
other Muslim provinces and cities as may hereafter be
created.
(2) Upon proclamation by the President of the
Philippines, Muslim holidays may also be officially
observed in other provinces and cities.
Article 171. Dates of observance. The dates of Muslim
holidays shall be determined by the Office of the
President of the Philippines in accordance with the
Muslim Lunar Calendar (Hijra).
Article 172. Observance of Muslim employees. (1) All
Muslim government officials and employees in places
other
than those enumerated under Article 170 shall also be
excused from reporting to office in order that they may
be able to observe Muslim holidays.
(2) The President of the Philippines may, by
proclamation, require private offices, agencies or
establishments to excuse their Muslim employees from
reporting for work during a Muslim holiday without
reduction in their usual compensation.
RA 9492; AN ACT DECLARING SEPTEMBER 18 OF
EVERY YEAR A SPECIAL WORKING HOLIDAY IN THE
CITY OF TACURONG, PROVINCE OF SULTAN
KUDARAT, TO COMMEMORATE ITS CHARTER DAY
ANNIVERSARY
RA 9849; AN ACT DECLARING THE TENTH DAY OF
ZHUL HIJJA, THE TWELFTH MONTH OF THE ISLAMIC 2.! Non-Working/Schedule of Rest Day
CALENDAR, A NATIONAL HOLIDAY FOR THE
OBSERVANCE OF EIDULADHA Rule IV, Sec. 6 (c)
(c) Where the day immediately preceding the holiday
San Miguel Corp. v. Court of Appeals, 375 SCRA 311 is a non-working day in the establishment or the
(2002) scheduled rest day of the employee, he shall not be
deemed to be on leave of absence on that day, in
Doctrine: There should be no distinction between which case he shall be entitled to the holiday pay if he
Muslims & non-Muslims as regards to the payment of worked on the day immediately preceding the non-
benefits for Muslim holidays. Wages & other working day or rest day.
emoluments granted bylaw to the workingman are
determined on the basis of the criteria laid down by On successive holidays (i.e. Maundy Thursday & Good
laws & not on worker’s faith. Art. 3(3), PD 1083 states Friday)
that nothing herein shall be construed to operate to the -No work- Regular wage
prejudice of a non-Muslim. -Work- 2x Regular wage
-Absent on Wednesday- No pay
Facts: In SMC in Iligan there was underpayment of -Work only on Thursday- 2x for Friday only
regular Muslim holiday pay.
TUES WED THURS FRI
Ruling: Court noted that LC 169 and 170 provides for No Work X X
such is read in conjunction with LC 94. All private Worked " "
corporations, offices, agencies, and entities or No Work Worked "
establishments operating within the designated Muslim Worked (Rest Day) " "
provinces and cities are required to observe Muslim
holidays, both Muslim and Christians working within the 4. Service Incentive Leave
Muslim areas may not report for work on the days a.! Coverage
designated by law as Muslim holidays. Art. 95 (a) (b);
ART. 95. Right to Service Incentive Leave. (a) Every
1.! Absences employee who has rendered at least one year of
service shall be entitled to a yearly service incentive
Rule lV, Sec. 6 (a); Sec.10 leave of five days with pay.
SECTION 6. Absences. — (a) All covered employees
shall be entitled to the benefit provided herein when (b) This provision shall not apply to those who are
they are on leave of absence with pay. Employees who already enjoying the benefit herein provided, those
are on leave of absence without pay on the day enjoying vacation leave with pay of at least five days
immediately preceding a regular holiday may not be and those employed in establishments regularly
paid the required holiday pay if he has not worked on employing less than ten employees or in
such regular holiday. establishments exempted from granting this benefit by
the Secretary of Labor and Employment after
SECTION 10. Successive regular holidays. — Where considering the viability or financial condition of such
there are two (2) successive regular holidays, like Holy establishment.
Thursday and Good Friday, an employee may not be
paid for both holidays if he absents himself from work A sick leave cannot be considered a vacation leave or
on the day immediately preceding the first holiday, SIL. The use of the leave is different.
unless he works on the first holiday, in which case he
is entitled to his holiday pay on the second holiday. Rule V, Sec. 1
SECTION 1. Coverage. — This rule shall apply to all
employees except:
(a) Those of the government and any of its political
subdivisions, including government-owned and
controlled corporations;
(b) Domestic helpers and persons in the personal
service of another;
(c) Managerial employees as defined in Book Three of
this Code;
(d) Field personnel and other employees whose
performance is unsupervised by the employer including
those who are engaged on task or contract basis,
purely commission basis, or those who are paid a fixed
amount for performing work irrespective of the time
consumed in the performance thereof;
(e) Those who are already enjoying the benefit herein
provided;
(f) Those enjoying vacation leave with pay of at least
five days; and
(g) Those employed in establishments regularly
employing less than ten employees.
Makati Haberdashery Inc. N. NLRC, 179 SCRA 449
(1989)
Doctrine: Supervised piece-rate workers are not
exempt and are therefore entitled to SIL.
Facts: Complainants are tailors of Haberdashery paid
on a piece-rate basis. The union filed for
underpayment of salaries and COLA; and non-payment
of overtime, holiday, service incentive leave, and 13th
month pay.
Ruling: Court ruled that
(1) as they were regular employees, they are entitled
to COLA;
(2) while they are paid on a piece-rate basis, since
there was no proof of a rate established under PD
1713, they are entitled to the minimum wage;
(3) they are entitled to 13th month pay; and
(4) as to SIL and holiday pay, the fall into on the
exceptions and hence not entitled to such.
Labor Congress v. NLRC, supra
David v. Macasio, supra
b.! Requirements; Treatment of Benefits,
Art. 95 (a)
(a) Every employee who has rendered at least one year
of service shall be entitled to a yearly service incentive
leave of five days with pay.
Rule V, Secs. 2, 3, 5
SECTION 2. Right to service incentive leave. — Every
employee who has rendered at least one year of
service shall be entitled to a yearly service incentive
leave of five days with pay.
SECTION 3. Definition of certain terms. — The term "at
least one-year service" shall mean service for not less
than 12 months, whether continuous or broken
reckoned from the date the employee started working,
including authorized absences and paid regular
holidays unless the working days in the establishment
as a matter of practice or policy, or that provided in the
employment contract is less than 12 months, in which
case said period shall be considered as one year.
SECTION 5. Treatment of benefit. — The service
incentive leave shall be commutable to its money
equivalent if not used or exhausted at the end of the
year.
c. Computation and Liability
Sentinel Security Agency, Inc. v. NLRC, 295 SCRA 123
(1998)
Doctrine: The principal is liable to the extent of the work
provided. (This is a trilateral relationship)
Facts: Complainants were employees of Sentinel
assigned at PhilAm. Sentinel was re-awarded the
contract and complainants were supposed to be
reassigned, but never were.
Ruling: Court ruled that there was illegal dismissal. As
to liability of PhilAm, while they were not the one who
dismissed the complainants, they are solidary liable to
the claims arising from the contract. Hence, they are
also to pay the SIL which is commutable if unused.
Auto Bus Transport Systems, Inc. v. Bautista, supra

1.! Paternity Leave
Paternity Leave of 1996 (RA 8187)
2.! Coverage
Sec. 2;
Section 2. Coverage.— Every married male employee
in the private sector shall be entitled to paternity leave
benefits of seven (7) days with full pay for the first four
deliveries by his lawful spouse under such terms and
conditions as hereinafter provided.
The rules on paternity leave of employees in the public
sector shall be promulgated by the Civil Service
Commission.
a.! Conditions for Availment
SECTION 1. Definition of Terms. — As used in this
Rules, the following terms shall have the meaning as
indicated hereunder:
b. “Employee” refers to any person who performs
services for an employer and receives compensation
therefor, provided an employer employee relationship
exists between them.
c. “Delivery” refers to childbirth, miscarriage or abortion.
SECTION 2. Coverage. — Every married male employee
in the private sector shall be entitled to paternity leave
benefits of seven (7) working days with full pay for the
first four (4) deliveries by his lawful spouse under such
terms and conditions as hereinafter provided. The rules
on paternity leave of employees in the public sector
shall be promulgated by the Civil Service Commission.
SECTION 3. Conditions for entitlement of paternity leave
benefits. — A married male employee shall be entitled
to paternity benefits provided that:
a. he is employed at the time of delivery of his child;
b. he has notified his employer of the pregnancy of his
wife and her expected date of delivery subject to the
provisions of Section 4 hereof; and
c. his wife has given birth, suffers a miscarriage or an
abortion.
Section 4. Application for leave. — The married male
employees shall apply for paternity leave with his
employer within a reasonable period of time from the
expected date of delivery by the pregnant spouse, or
within such period as may be provided by company
rules and regulations or by collective bargaining
agreement, provided that prior application for leave
shall not be required in case of miscarriage.
Rules, SECTION 4. Notification. — As soon as the
married male employee learns that his spouse is
pregnant, he shall inform his employer of such
pregnancy and the expected date of delivery within a
reasonable period of time. The employee shall
accomplish a Paternity Notification Form to be provided
for by the employer and submit the same to the latter,
together with a copy of his marriage contract, or where
not applicable, any proof of marriage. Provided, That
this notification requirement shall not apply in cases of
miscarriage or abortion.
Any employee who has availed of the paternity benefits
shall, within a reasonable period of time, submit a copy
of the birth certificate of the newly born child, death or
medical certificate in case of miscarriage or abortion,
duly signed by the attending physician or midwife
showing actual date of childbirth, miscarriage or
abortion, as the case may be.
b.! Availment of Benefits
Section 5. Availment. — Paternity leave benefits shall be
granted to the qualified employee after the delivery by
his wife, without prejudice to an employer allowing an
employee to avail of the benefit before or during the
delivery; provided, that the total number of days shall
not exceed seven (7) days for each delivery.
c.! Benefits
Section 6. Benefits. — The employee is entitled to his
full pay, consisting of basic salary, for the seven (7)
days during which he is allowed not to report for work,
provided, that his pay shall not be less than the
mandated minimum wage.
d.! Treatment of Benefit
Rules, Sec. 7, 8, 9
 Section 7. Non-commutation of benefits. — In the
event that paternity leave benefit is not availed of, said
leave shall not be convertible to cash.
Section 8. Non-diminution clause. — Nothing in these
Rules shall be construed to reduce or replace any
existing benefits of any kind granted under existing
laws, decrees, executive orders, or any contract,
agreement or policy between employer and employee.
Section 9. Crediting of existing benefits. — Where a
male employee is already enjoying the paternity leave
benefits by reason of contract, company policy or
collective bargaining agreement, the following rules
shall apply:
a. If the existing paternity leave benefit is greater than
the benefit herein provided, the greater benefit shall
prevail;
b. If the existing paternity leave is less than that
provided herein, such existing benefit shall be adjusted
to the extent of the difference.
However, where a contract, company policy or
collective bargaining agreement provides for an
emergency or contingency leave without specific
provisions on paternity leave, the paternity leave as
herein provided shall apply in full.
e.! Penalty
Section 10. Penalty. — Any person, corporation, trust,
firm, partnership, association or entity found violating
any provision of these Rules shall be penalized by a
fine not exceeding twenty five thousand pesos
(P25,000) or imprisonment of not less than thirty (30)
days nor more than six (6) months.
If the violation is committed by a corporation, trust or
firm, partnership, association or any other entity, the
penalty of imprisonment shall be imposed on the
entity’s responsible officers, including but not limited to,
the president, vice president, chief executive officer,
general manager, managing director or partner directly
responsible therefor.
3.! Parental Leave, Solo Parents’ Welfare Act of 2000
(RA 8972);
a.! Coverage
Impl. Rules, Sec. 3
(a) "Solo parent" - any individual who falls under any
of the following categories:
(1) A woman who gives birth as a result of rape and
other crimes against chastity even without a final
conviction of the offender: Provided, That the mother
keeps and raises the child;
(2) Parent left solo or alone with the responsibility of
parenthood due to death of spouse;
(3) Parent left solo or alone with the responsibility of
parenthood while the spouse is detained or is serving
sentence for a criminal conviction for at least one (1)
year;
(4) Parent left solo or alone with the responsibility of
parenthood due to physical and/or mental incapacity
of spouse as certified by a public medical practitioner;
5) Parent left solo or alone with the responsibility of
parenthood due to legal separation or de facto
separation from spouse for at least one (1) year, as
long as he/she is entrusted with the custody of the
children;
(6) Parent left solo or alone with the responsibility of
parenthood due to declaration of nullity or annulment
of marriage as decreed by a court or by a church as
long as he/she is entrusted with the custody of the
children;
(7) Parent left solo or alone with the responsibility of
parenthood due to abandonment of spouse for at least
one (1) year;
(8) Unmarried mother/father who has preferred to keep
and rear her/his child/children instead of having others
care for them or give them up to a welfare institution;
(9) Any other person who solely provides parental care
and support to a child or children;
(10) Any family member who assumes the
responsibility of head of family as a result of the death,
abandonment, disappearance or prolonged absence of
the parents or solo parent.
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.
 (b) "Children" - refer to those living with and dependent
upon the solo parent for support who are unmarried,
unemployed and not more than eighteen (18) years of
age, or even over eighteen (18) years but are
incapable of self-support because of mental and/or
physical defect/disability.
b.! Criteria for Support
RA 8972
SECTION 4. Criteria for Support. - Any solo parent
whose income in the place of domicile falls below the
poverty threshold as set by the National Economic
and Development Authority (NEDA) and subject to the
assessment of the DSWD worker in the area shall be
eligible for assistance: Provided, however, That any
solo parent whose income is above the poverty
threshold shall enjoy the benefits mentioned in
Sections 6, 7 and 8 of this Act.
SECTION 8. Parental Leave. - In addition to leave
privileges under existing laws, parental leave of not
more than seven (7) working days every year shall be
granted to any solo parent employee who has
rendered service of at least one (1) year.
Rules, Art. IV SECTION 7. Criteria for Support – Any
solo parent whose income in the place of domicile
falls equal to or below the poverty threshold as set by
the NSCB and subject to the assessment of the duly
appointed or designated social worker in the area
shall be eligible for assistance: Provided, however,
That any solo parent whose income is above the
poverty threshold shall enjoy the benefits mentioned
in Sections 16, 17, 18, 19, 20, 21 and 23 of these
Rules. For purposes of the Act and these Rules, the
place of domicile shall refer to the residence
mentioned in Section 8(a) of these Rules.
SECTION 8. Qualifications of Solo Parent – A solo
parent seeking benefits other than those provided for
under Sections 16, 17, 18, 19, 20, 21 and 23 of
these Rules shall be qualified on the basis of the
following: (a) A resident of the area where the
assistance is sought, as certified by the barangay
captain; Provided, that if the solo parent is a
transferee from another barangay, he/she is required
to secure a clearance from his/her previous
barangay, indicating whether or not he/she has
availed of any benefits for solo parents, and the
nature of such benefits. (b) With an income level
equal to or below the poverty threshold as set forth
by NSCB and assessed by a social worker as
provided for under Section 7 of these Rules.
c.! Conditions for Availment
Rules, Sec. 19. A solo parent shall be entitled to
parental leave provided that: (a) He/She has rendered
at least one (1) year of service whether continuous or
broken at the time of the affectivity of the Act; (b)
He/She has notified his/her employer of the availment
thereof within a reasonable time period; and (c)
He/She has presented a Solo Parent Identification Card
to his/her employer.
d.! Other Benefits: Flexible Work Schedule, Non-
discrimination in Work, Secs. 6, 7; Rules, Art. V, Secs.
16, 17, 18
SECTION 6. Flexible Work Schedule. - The employer
shall provide for a flexible working schedule for solo
parents: Provided, That the same shall not affect
individual and company productivity: Provided, further,
That any employer may request exemption from the
above requirements from the DOLE on certain
meritorious grounds.
SECTION 7. Work Discrimination. - No employer shall
discriminate against any solo parent employee with
respect to terms and conditions of employment on
account of his/her status. '
Rules, Art. V, SECTION 16. Flexible Work Schedule –
The employer shall provide for a flexible work
schedule for solo parents: Provided, That the same
shall not affect individual and company productivity:
Provided further, That any employer may request
exemption from the above requirements from the
DOLE on certain meritorious grounds.
In the case of employees in the government service,
flexible working hours will be subject to the discretion
of the head of the agency. In no case shall the
 weekly working hours be reduced in the event the
agency adopts the flexible working hours schedule
format (flexi-time). In the adoption of flexi-time, the
core working hours shall be prescribed taking into
consideration the needs of the service..
SECTION 17. Work Discrimination – No employer
shall discriminate against any solo parent employee
with respect to terms and conditions of employment
on account of his/her status.
SECTION 18. Parental Leave – In addition to leave
privileges under existing laws, parental leave of not
more than seven (7) working days every year shall be
granted to any solo parent employee who has
rendered service of at least one (1) year. The seven-
day parental leave shall be non-cumulative.
e.! Treatment of Benefit: Non-Cumulative,
convertible
Rules, SECTION 19. Conditions for Entitlement of
Parental Leave – A solo parent shall be entitled to
parental leave provided that: (a) He/She has
rendered at least one (1) year of service whether
continuous or broken at the time of the affectivity of
the Act; (b) He/She has notified his/her employer of
the availment thereof within a reasonable time period;
and (c) He/She has presented a Solo Parent
Identification Card to his/her employer.
SECTION 20. Non-conversion of Parental Leave – In
the event that the parental leave is not availed of, said
leave shall not be convertible to cash unless
specifically agreed upon previously. However, if said
leave were denied an employee as a result of
non-compliance with the provisions of these Rules by
an employer, the aforementioned leave may be used
a basis for the computation of damages.
SECTION 21. Crediting of Existing Leave – If there is
an existing or similar benefit under a company policy,
or a collective bargaining agreement or collective
negotiation agreement the same shall be credited as
such. If the same is greater than the seven (7) days
provided for in the Act, the greater benefit shall
prevail.
Emergency or contingency leave provided under a
company policy or a collective bargaining agreement
shall not be credited as compliance with the parental
leave provided for under the Act and these Rules. '
4.! Service Charges
Article 96. All service charges collected by hotels,
restaurants and similar establishments shall be
distributed at the rate of 85% for all covered
employees and 15% for management. The share of
the employees shall be equally distributed among
them. In case the service charge is abolished, the
share of the covered employees shall be considered
integrated in their wages.
Omnibus Rules, Book III, Rule VI
SECTION 6. Relation to agreements. — Nothing in this
Non- Rule shall prevent the employer and his employees
from entering into any agreement with terms more
favorable to the employees than those provided herein,
or be used to diminish any benefit granted to the
employees under existing laws, agreement and
voluntary employer practice.
SECTION 7. This rule shall be without prejudice to
existing, future collective bargaining agreements.
Nothing in this rule shall be construed to justify the
reduction or diminution of any benefit being enjoyed by
any employee at the time of effectivity of this rule.
a.! Covered and Exclusion
Art 96, SECTION 1. Coverage. — This rule shall apply
only to establishments collecting service charges such
as hotels, restaurants, lodging houses, night clubs,
cocktail lounge, massage clinics, bars, casinos and
gambling houses, and similar enterprises, including
those entities operating primarily as private
subsidiaries of the Government.
SECTION 2. Employees covered. — This rule shall apply
to all employees of covered employers, regardless of
their positions, designations or employment status, and
irrespective of the method by which their wages are
paid except to managerial

b.! Sharing, Distribution, and Integration
SECTION 3. Distribution of service charges. — All
service charges collected by covered employers shall
be distributed at the rate of 85% for the employees and
15% for the management. The 85% shall be distributed
equally among the covered employees. The 15% shall
be for the disposition by management to answer for
losses and breakages and distribution to managerial
employees at the discretion of the management in the
latter case.
SECTION 4. Frequency of distribution. — The shares
referred to herein shall be distributed and paid to the
employees not less than once every two (2) weeks or
twice a month at intervals not exceeding sixteen (16)
days.
SECTION 5. Integration of service charges. — In case
the service charges is abolished the share of covered
employees shall be considered integrated in their
wages. The basis of the amount to be integrated shall
be the average monthly share of each employee for
the past twelve (12) months immediately preceding the
abolition of withdrawal of such charges.
H. Minimum Wages and Wage Fixing Machinery
•! Minimum Wages
ART. 99. Regional Minimum Wages. The minimum
wage rates for agricultural and non-agricultural
employees and workers in each and every region of
the country shall be those prescribed by the Regional
Tripartite Wages and Productivity Boards.
a. Coverage, Arts. 97 (b) (c) (e), 98, Rule VII, Sec. 3
ART. 97. Definitions. As used in this Title:
(b) "Employer" includes any person acting directly or
indirectly in the interest of an employer in relation to an
employee and shall include the government and all its
branches, subdivisions and instrumentalities, all
government-owned or controlled corporations and
institutions, as well as non-profit private institutions, or
organizations.
(c) "Employee" includes any individual employed by an
employer.
(e) "Employ" includes to suffer or permit to work.
ART. 98. Application of Title. This Title shall not apply
to farm tenancy or leasehold, domestic service and
persons working in their respective homes in needle
work or in any cottage industry duly registered in
accordance with law.
Rule VII, SECTION 3. Time of payment. — (a) Wages
shall be paid not less than once every two (2) weeks
or twice a month at intervals not exceeding sixteen (16)
days, unless payment cannot be made with such
regularity due to force majeure or circumstances
beyond the employer's control in which case the
employer shall pay the wages immediately after such
force majeure or circumstances have ceased.
(b) In case of payment of wages by results involving
work which cannot be finished in two (2) weeks,
payment shall be made at intervals not exceeding
sixteen days in proportion to the amount of work
completed. Final settlement shall be made immediately
upon completion of the work.
Philippine Fisheries Development Authority v. NLRC,
213 SCRA 621 (1992)
Facts: PFDA engaged in a contract with OSA for
security services, and then OSA requested that the
petitioner adjust the contract rate in view of the
implementation of Wage Order No. 6, which petitioner
ignored. OSA filed a complaint for unpaid amount of
re-adjustment rate, salary differentials, etc.
Ruling: The Court ruled that NLRC had jurisdiction over
the case because while PFDA is a GOCC, the security
guards are not; that PFDA is liable as principal and is
therefore solidarily liable with employer OSA, and; that
OSA is also liable for one half of the entire amount due
because it failed to take into account the Wage Order
when it was negotiating the contract
b. Definition, Art. 97 (f)
ART. 97. Definitions. As used in this Title:
(f) "Wage" paid to any employee shall mean 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, which
is payable by an employer to an employee under a
written or unwritten contract of employment for work
done or to be done, or for services rendered or to be
rendered and includes the fair and reasonable value,
as determined by the Secretary of Labor and
Employment, of board, lodging, or other facilities
customarily furnished by the employer to the employee.
"Fair and reasonable value" shall not include any profit
to the employer, or to any person affiliated with the
employer
c. Rules
1) No Work, No Pay (A fair day’s wage for a fair
day’s labor)
As established in Sugue:
General Rule: the age old rule governing the relation
between labor and capital or management and employee
is that a "fair day's wage for a fair day's labor."
Exception: When the laborer was able, willing and ready
to work but was illegally locked out, suspended or
dismissed, or otherwise illegally prevented from working.
Aklan Electric Corp., Inc. v. NLRC, 323 SCRA 259
(2000)
Facts: Private respondents alleged that they were not
paid their salaries for services they rendered from June
16, 1992 – March 18, 1993. Petitioner claimed, on the
other hand, that they did not work during that period
because they had a mass leave.
Ruling: SC ruled in favor of the petitioner. It ruled that
the private respondents, indeed, as the petitioner said,
did not render services during that period as they had
a mass leave. There was no proof as well that they
continued reporting in Lezo, since petitioner was able
to prove that it had removed and transferred all of its
equipments and tools from Lezo to Kalibo. Following
the principle of “no work, no pay,” private respondents
are not entitled to any compensation for non-
performance of services
Sugue v. Triumph International (Phils.), 577 SCRA 323
(2009)
Doctrine: The age-old rule governing the relation
between labor and capital or management and
employee is that a “fair day’s wage for a fair day’s
labor.” 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, dismissed or suspended. It is hardly
fair or just for an employee or laborer to fight or litigate
against his employer on the employer’s time.”
Facts: Petitioners were managers of respondent
company who filed a complaint with NLRC for payment
of money claims arising from unpaid vacation and sick
leave credits. On the day of the preliminary conference,
they went on company time and used the company’s
car and driver to attend the said conference. After being
sent memoranda and being allowed to explain, a half-
day absence was charged against the petitioner’s leave
credits. Petitioners then filed constructive dismissal
because their subsequent application for leaves were
denied and because of the half-day absence that was
charged against their leave credits.
Ruling: The court ruled in favor of Triumph, saying that
there was no discriminatory acts committed by the
company when it denied the petitioners’ application for
leave during a crucial period when the petitioners were
needed, and that the half-day charge to their leave
credits were justified as the two did not perform any
work during the time they went to the NLRC preliminary
conference.
2) Equal Pay for Work of Equal Value
ART. 133. [135] Discrimination Prohibited. It shall be
unlawful for any employer to discriminate against any
woman employee with respect to terms and conditions
of employment solely on account of her sex. The
following are acts of discrimination: (a) Payment of a
lesser compensation, including wage, salary or other
form of remuneration and fringe benefits, to a female
employee as against a male employee, for work of
equal value
ILO Convention 100 (1951)

International School Alliance of Educators
Quisumbing, supra.
International School paid foreign hires 25% more than
local hires. Court ruled that this is contrary to “equal
pay for equal work” wherein persons who work with
substantially equal qualifications, skill, effort and
responsibility, under similar conditions, should be paid
similar salaries. Secondly, if an employee is paid less
than others, the burden is on the employer to explain
why the employee is treated unfairly.
3) Form: Agreement for Compensation of Services
ART. 97. Definitions. As used in this Title:
(f) "Wage" paid to any employee shall mean 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, which
is payable by an employer to an employee under a
written or unwritten contract of employment for work
done or to be done, or for services rendered or to be
rendered and includes the fair and reasonable value,
as determined by the Secretary of Labor and
Employment, of board, lodging, or other facilities
customarily furnished by the employer to the employee.
"Fair and reasonable value" shall not include any profit
to the employer, or to any person affiliated with the
employer.
Arms Taxi v. NLRC, 219 SCRA 306 (1993)
Doctrine:
Salary: is a fixed compensation for regular work or for
continuous service rendered over a period of time
Commission: a percentage or allowance made to a
factor or agent for transacting business for another
Facts: Taxi driver Culla was dismissed. He is claiming
reinstatement with backwages, plus commission of
15% of the gross income of the taxi business which is
the issue at bar.
Issue: W/N the 5,000 paid to him counts as part of his
commission or compensation.
Ruling: The court rules that based on the standards
v. used to assess what counts as compensation, the
5,000 cannot be considered a commission for lack of
proof that it was given for that purpose in the past and
the 5,000 php/month is part of it.
Before invoking the exception to the Statute of Frauds,
petitioner should have proven that he had received a
commission, or part of it, in the past. If it were true that
there had been an agreement regarding the payment
of a 15% commission to him, Culla would have not
waited almost 6 years to claim it. Considerably delay in
asserting one’s right is strongly persuasive of the lack
of merit of one’s claim.
Legend Hotel (Manila) v. Hernani S. Realuyo, 677 SCRA
10 (2012)
Doctrine: Despite the denomination of received
remuneration as “talent fees”, such were considered
“wages” in the context of the Labor Code, regardless
of designation. That Realuyo worked for less than 8
hours a day was of no consequence. In providing that
the “normal hours of work of any employee shall not
exceed eight (8) hours a day,” Article 83 of the Labor
Code only set a MAXIMUM of number of hours as
normal hours of work, but did not prohibit work of
less than eight hours.
Facts: Respondent was employed by petitioner as a
pianist with fixed working hours and places of
performance. He was informed of discontinuance of
service due to cost-cutting measures undertaken by
Legend Hotel. They claim there was no EER between
them and Realuyo, as he was only a talent contracted
for his services. Realuyo filed for constructive illegal
dismissal, among other complaints.
Ruling: The Court ruled that an EER did exist between
petitioner and respondent, and the dismissal was
invalid. The Court laid down standards for petitioner to
fulfill to invoke retrenchment as grounds, which were
not met. However, the circumstances made
reinstatement impossible, so the Court ordered
petitioner to give respondent separation pay.
4) Employer to Prove Payment
 Etom v. Aroma Lodging House, G.R. No. 192955, 9 respective total taxable income: Provided, that if any
November 2015 income cannot be definitely attributed to or identified as
income exclusively earned or realized by either of the
Once the employee has asserted with particularity in spouses, the same shall be divided equally between
his position paper that his employer failed to pay his the spouses for the purpose of determining their
benefits, it becomes incumbent upon the employer to respective taxable income.
prove payment of the employee's money claims. "Provided, That minimum wage earners as defined in
Section 22 (HH) of this Code shall be exempt from the
The burden is on the employer to prove payment, payment of income tax on their taxable
rather than on the employee to establish non-payment. income: Provided, further, That the holiday pay,
overtime pay, night shift differential pay and hazard pay
d. Exemption from Income Tax of Minimum Wage received by such minimum wage earners shall likewise
Earners be exempt from income tax.
SEC. 2. Section 24(A) of Republic Act No. 8424, as "x x x."
amended, otherwise known as the National Internal
Revenue Code of 1997, is hereby further amended to
read as follows: e. Wages, Arts. 97 (f), 99, 61, 75 (c), 80 (b); Rule VII, VII-
"SEC. 24. Income Tax Rates. - A, Secs. 4-7;
"(A) Rates of Income Tax on Individual Citizen and 9547, secs. 1-2; Rule VII-A, Secs. 4-7
Individual Resident Alien of the Philippines. -
"(1) x x x: Labor Code Arts. 97 (f)
"x x x; and
"(c) On the taxable income defined in Section 31 of ART. 97. Definitions. As used in this Title:
this code, other than income subject to tax under (f) "Wage" paid to any employee shall mean the
Subsections (B), (C) and (D) of this Section, derived remuneration or earnings, however designated, capable
for each taxable year from all sources within the of being expressed in terms of money, whether fixed
Philippines by an individual alien who is a resident of or ascertained on a time, task, piece, or commission
the Philippines. basis, or other method of calculating the same, which
"(2) Rates of Tax on Taxable Income of Individuals. - is payable by an employer to an employee under a
The tax shall be computed in accordance with and at written or unwritten contract of employment for work
the rates established in the following schedule: done or to be done, or for services rendered or to be
"Not over P10,000 ........ 5% rendered and includes the fair and reasonable value,
as determined by the Secretary of Labor and
"Over P10,000 but not ........ P500+10% of the excess
over P30,000 over P10,000
Employment, of board, lodging, or other facilities
customarily furnished by the employer to the employee.
"Over P30,000 but not ........ P2,500+15% of the excess
"Fair and reasonable value" shall not include any profit
over P70,000 over P30,000
to the employer, or to any person affiliated with the
"Over P70,000 but not ........ P8,500+20% of the excess
employer.
over P140,000 over P70,000

"Over P140,000 but not ........ P22,500+25% of the ART. 99. Regional Minimum Wages. The minimum
over P250,000 excess over P140,000
wage rates for agricultural and non-agricultural
"Over P250,000 but not ........ P50,000+30% of the employees and workers in each and every region of
over P500,000 excess over P250,000 the country shall be those prescribed by the Regional
"Over P5000,000 ........ P125,000+32% of the Tripartite Wages and Productivity Boards.
excess over P500,000
"For married individuals, the husband and wife, subject ART. 61. Contents of Apprenticeship Agreements.
to the provision of Section 51 (D) hereof, shall compute Apprenticeship agreements, including wage rates of
separately their individual income tax based on their apprentices, shall conform to the rules issued by the
Minister of Labor and Employment. The period of
apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates
below the legal minimum wage, which in no case shall
start below 75 per cent of the applicable minimum
wage, may be entered into only in accordance with
apprenticeship programs duly approved by the Minister
of Labor and Employment. The Ministry shall develop
standard model programs of apprenticeship.
ART. 75. Learnership Agreement. Any employer
desiring to employ learners shall enter into a
learnership agreement with them, which agreement
shall include:
c) The wages or salary rates of the learners which shall
begin at not less than seventy-five percent (75%) of the
applicable minimum wage;
ART. 80. Employment Agreement. Any employer who
employs handicapped workers shall enter into an
employment agreement with them, which agreement
shall include: 1. The names and addresses of the
handicapped workers to be employed; 2. The rate to
be paid the handicapped workers which shall not be
less than seventy five (75%) percent of the applicable
legal minimum wage; 3. The duration of employment
period; and 4. The work to be performed by
handicapped workers. The employment agreement
shall be subject to inspection by the Secretary of Labor
or his duly authorized representative.
Rule VII: Wages
Section 1 – Minimum Wages. – (Obsolete)
Section 2. Minimum Wages in Depressed Areas – To
the extent necessary to relieve serious unemployment
situation in welfare areas, such as squatter relocation
centers, the Secretary of Labor may, on his own
initiative or upon petition of any interested party,
authorize the payment of subminimum wages by
enterprises and institution that may be established in
such areas to provide employment opportunities to the
residents therein. The authorization of the Secretary of
Labor shall be subject to such terms and conditions as
he may prescribe to insure the protection and welfare
of the workers as well as the industries that may be
affected thereby.
Section 3. Coverage – This rule shall not apply to the
following persons;
(a) Household or domestic helpers, including family
drivers and persons in the person service of another;
(b) Homeworkers engaged in needlework;
(c) Workers employed in any establishment duly
registered with the National Cottage Industries
Development Authority in accordance with Rep. Act. No
3470, provided that such workers perform the work in
their respective homes;
(d) Workers in any duly registered cooperative when
so recommended by the Bureau of Cooperative
Development and upon approval of the Secretary of
Labor: Provided, however, that such recommendation
shall be given only for the purpose of making the
cooperative viable and upon finding and certification of
said Bureau, supported by adequate proof, that the
cooperative cannot resort to other remedial measures
without serious loss or prejudice to its operation except
through its exemption from the requirements of this
Rule. The exemption shall be subject to such terms
and conditions and for such period of time as the
Secretary of Labor may prescribe.
NCR-17, 3 June 2012;
NCR-18, 6 Sept 2013;
NCR-19, 4 April 2015;
NCR-20, 2 June 2016
RA 7323 (Special Program for Employment of
Students)
1) Minimum Wage, NCR-21, Sec. 1

Section 1. NEW MINIMUM WAGE RATES. Upon effectivity of this Wage Order, the new daily minimum wage rates of covered
workers in the private sector in the National Capital Region shall be as follows:

Sector/ Industry Basic Wage Basic Wage New Basic Wage COLA New Minimum
Increase Wage Rates

Non-Agriculturew
481.00php 21.00php 502.00php 10.00php 512.00php

Agriculture (Plantation
and non plantation)

Retail/ Service
Establishments
employing 15 workers or
less 444.00php 21.00php 465.00php 10.00php 475.00php

Manufacturing
Establishments Regularly
Employing less than 10
workers

2) Coverage/Exclusions, NCR-21, Sec. 2

Section 3. EXEMPTIONS. Upon application with and as
Section 2. COVERAGE. The wage rates per day determined by the Board, based on documentation and
prescribed in this Order shall apply to all minimum other requirements in accordance with applicable rules
wage earners in the private sector in the region, and regulations issued by the NWPC, the following may
regardless of their position, designation or status of be exempted from the applicability of this Order:
employment and irrespective of the method by which
they are paid. 1. Distressed Establishments
2. Retail/ Service Establishments Regularly Employing
This Wage Order shall not cover Not More Than 10 workers
kasamabahay/domestic workers; persons in the 3. Establishments Adversely Affected by Calamities
personal service of another; and workers of duly such as Natural and Human- induced disasters.
registered Barangay Micro Business Enterprises
(BMBEs) with Certification of Authority pursuant to 4) Determination of Compliance with Minimum Wage
Republic Act No. 10644. Iran v. NLRC, 289 SCRA 433 (1998)

3) Exemptions, NCR-21, Sec. 8

 Facts: Antonio Iran hired respondents as truck drivers
doubling as salesmen. They were being paid on
commission basis. Illegally dismissed.
Issue: W/N commission constitute part of the
compensation? Yes.
Ruling/ Doctrine:
COMMISSIONS ARE PART OF WAGES.
Definition: Commissions have been defined as the
recompense, compensation or reward of an agent,
salesman, executor, trustee, receiver, factor, broker or
bailee, when the same is calculated as a percentage
on the amount of his transactions or on the profit to the
principal. The nature of the work of a salesman and the
reason for such type of remuneration for services
5) Facilities and Supplements/Allowances
Rule VII-A: Wages
Section 4. Cash Wage – the minimum wage rates
prescribed in Section 1 hereof shall be basic, cash
wages without deducting therefrom whatever benefits,
supplements of allowances which the employees enjoy
free of charge aside from the basic pay. An employer
may provide subsidized meals and snacks to his
employees provided that the subsidy shall not be less
than 30% of the fair and reasonable value of such
facilities. In such case, the employer may deduct from
the wages of the employees not more that 70% of the
value of the meals and snacks enjoyed by the
employees, provided that such deduction is with the
written authorization of the employees concerned.
Section 5. Facilities – The term “facilities” as used in
this Rule shall include articles or services for the benefit
of the employee or his family but shall not include tools
of the trade or articles or service primarily for the benefit
of the employer or necessary to the conduct of the
employer’s business.
Section 6. Value of Facilities – The Secretary of Labor
may from time to time fix in appropriate issuances the
fair and reasonable value of board, lodging, and other
facilities customarily furnished by an employer to his
rendered demonstrate clearly that commissions are part
of a salesman’s wage or salary.
Legal basis: Art. 97 (f)
Thus, the commissions earned by private respondents
in selling soft drinks constitute part of the compensation
or remuneration paid to drivers/salesmen and truck
helpers for serving as such, and hence, must be
considered part of the wages paid them.
THE ESTABLISHMENT OF A MINIMUM WAGE ONLY
SETS A FLOOR BELOW WHICH AN EMPLOYEE’S
REMUNERATION CANNOT FALL, NOT THAT
COMMISSIONS ARE EXCLUDED FROM WAGES IN
DETERMINING COMPLIANCE WITH THE MINIMUM
WAGE LAW.
employees both in agricultural and non-agricultural
enterprises. The fair and reasonable value of facilities
is hereby determined to be the cost of operation and
maintenance, including adequate depreciation plus
reasonable allowance (but not more than 5 ½% interest
on the depreciated amount of capital invested by the
employer); provided that if the total so computed is
more than the fair rental value (or the fair price of the
commodities or facilities offered for sale) the fair rental
value (or the fair price of the commodities or facilities
offered for sale) shall be the reasonable cost of the
operation and maintenance. The rate of depreciation
and depreciated amount computed by the employer
shall be those arrived at under good accounting
practices. The term “good accounting practices” shall
not include accounting practices which have been
rejected by the Bureau of Internal Revenue for income
tax purposes. The term “depreciation” shall include
obsolescence.
Section 7. Acceptance of Facilities. - In order that the
cost of facilities furnished by the employer may be
charged against an employee, his acceptance of such
facilities must be voluntary
Comparison between Facilities and Supplements
Facilities Supplements
Articles or services/ Extra remuneration or
items of expenses special benefits/ articles
 of services/ tools of the
trade
For the benefit of the For the benefit or
employee and his family; convenience of the
for their existence and employer
subsistence
Deductible from wage Not deductible
(Part of wage) (Independent of wage)
Requirements for deducting value of facilities (from allowance was discontinued
SLL) once employee moves to the
Mere availment is not sufficient to allow deductions company-provided
from employees’ wages. Before the value of facilities accommodation; the transpo
can be deducted from the employees’ wages, the allowance was given only to
following requisites must all be attendant: those with personal cars; the
•! (1) Proof must be shown that such facilities are Bislig allowance was
customarily furnished by the trade; discontinued once employee is
•! (2) The provision of deductible facilities must be transferred outside Bislig.
voluntarily accepted in writing by the employee;
and "Facilities"-- includes articles or services for the
•! (3) Facilities must be charged at reasonable benefit of the employee or his family but excluding
value. tools of the trade or articles or service primarily for
the benefit of the employer or necessary to the
Millares v. NLRC & PICOP, 305 SCRA 500 (1999) conduct of the employer’s business (Sec. 5, Rule
VII, Book III, of the Rules Implementing the Labor
Issue: W/N allowances form part of petitioners Code). In determining whether a privilege is a
wages? NO. facility, the criterion is not so much its kind but its
purpose.
Ruling/ Doctrine: 2.! In this case: The assailed
In case of retrenchment to prevent losses, Art. 283 allowances were for the benefit
of the Labor Code imposes on the employer an and convenience of respondent
obligation to grant to the affected employees company, as supported by the
separation pay equivalent to 1 month pay or at circumstance that they were not
least 1/2 month "pay" for every year of service, subjected to withholding tax.
whichever is higher.

"Fair and reasonable value"-- may be fixed from

In Art. 283 in relation to Art. 97, what is defined is
time to time by the SOLE (Sec. 6, Rule VII, Book
“wage,” not "pay." In Songco the Court explained
III, of the Rules Implementing the Labor Code).
that wage/pay/salary generally refer to one and
3.! In this case: Petitioners’
the same meaning: a reward or recompense for
allowances do not represent
services performed.
such fair and reasonable value
as determined by the proper
When an employer customarily furnishes his
authority because (1) the
employee board, lodging or other facilities, the fair
Staff/Manager’s allowance and
and reasonable value thereof, as determined by
transportation allowance were
the Secretary of Labor and Employment, is
given by respondent company in
included in “wage."
lieu of actual provisions for
housing and transportation
“Customary”-- connotes regularity. The receipt of
needs while (2) the Bislig
an allowance on a monthly basis does not ipso
allowance was given in
facto characterize it as regular and forming part of
consideration of being assigned
salary because the nature of the grant is a factor
to the hostile environment then
worth considering.
prevailing in Bislig.

1.! In this case: The subject

Conclusion: subject allowances did not form part
allowances were temporarily, not
of petitioners’ wages.
regularly, received by petitioners
because there were conditions
SLL International Cables Specialist v. NLRC, 644
for their availment. The housing
SCRA 411 (2011)

Issue: W/N value of facilities should be included
in computation of wages? NO.
Before the value of facilities can be deducted from
the employees' wages, these requisites must all
be attendant:
st
1 : proof must be shown that such
facilities are customarily furnished by the
trade;
nd
2 : the provision of deductible facilities
must be voluntarily accepted in writing by
the employee;
rd
3 : facilities must be charged at
reasonable value.
Mere availment is not sufficient to allow
deductions from employees' wages. These
requirements have not been met in this case.
1.! SLL failed to present any company policy
or guideline showing that provisions for
meals and lodging were part of the
employee's salaries. It also failed to
provide proof of the employees' written
authorization, much less show how they
arrived at their valuations. It is not clear
whether private respondents actually
enjoyed said facilities.
There is a distinction between "facilities" and
"supplements." (Cited: Atok-Big Wedge Assn. v.
Atok-Big Wedge Co.)
"Supplements” – extra remuneration or
special privileges or benefits given to or
received by the laborers over and above
their ordinary earnings or wages.
"Facilities” – items of expense necessary
for the laborer's and his family's
existence and subsistence so that by
express provision of law (Sec. 2[g]), they
form part of the wage and when
furnished by the employer are deductible
therefrom, since if they are not so
furnished, the laborer would spend and
pay for them just the same.
Distinction is not in kind of benefit but the purpose
for which it is given. Items provided were given
freely by SLL for the purpose of maintaining the
efficiency and health of its workers while they were
working at their respective projects.
Our Haus Realty Dev. Corp. v. Parian, et al., 72
SCRA 351 (2014)
Facts: Workers for a construction company filed a
complaint for underpayment of wages and non-
payment of other monetary benefits by their
employer. Employer, on the other hand claims that
the wages were not below the minimum wage
considering it gave the laborers free meals, lodging
etc. They also claim that there is a difference
between deduction and charging because written
authorization requirements DO NOT APPLY
because a it will only necessary if the facility’s value
will be deducted and will not be needed if it will
merely be charged or included in the computation
of wages.
Issue: W/N deduction and charging are distinct.
Ruling: Deduction and charing are NOT distinct.
Deduction and charging BOTH operate to lessen
the actual take-home pay of an employee. Hence,
the requirements set by the law should apply to
both.
Discussion: Our Haus explains that in deduction,
the amount of the wage would still be lessened by
the facility’s value, thus needing the employee’s
consent.
On the other hand, in charging, there is no
reduction of the employee’s wage since the
facility’s value will just be theoretically added to the
wage for purposes of complying with the minimum
wage requirement.
As summarized in the case of Mabesa, the
requirements are:
a. proof must be shown that such facilities are
customarily furnished by the trade;
b. the provision of deductible facilities must be
voluntarily accepted in writing by the employee; and
c. The facilities must be charged at fair and
reasonable value.
 • Did Our Haus comply?
- Facility must be customarily furnished by the
trade —
• one of the badges to show that a facility is
customarily furnished by the trade is the existence
of a company policy or guideline showing that
provisions for a facility were designated as part of
the employees’ salaries.
- In this case, the sinumpaang salaysay
statements submitted by Our Haus are self-serving.
- Our Haus only produced the documents
when the NLRC had already earlier determined that
Our Haus failed to prove that it was traditionally
giving the respondents their board and lodging.
- Moreover, the records reveal that the
board and lodging were given on a per project
basis. Our Haus did not show if these benefits were
also provided in its other construction projects, thus
negating its claimed customary nature.
- Even assuming the sinumpaang salaysay
to be true, it would still work against Our Haus’
case: if Our Haus really had the practice of freely
giving lodging, electricity and water provisions to
its employees, then Our Haus should not deduct
its values from the respondents’ wages. Otherwise,
this will run contrary to the affiants’ claim that these
benefits were traditionally given free of charge.
'
Apart from company policy, the employer may also
prove compliance with the first requirement by
showing the existence of an industry-wide practice
of furnishing the benefits in question among
enterprises engaged in the same line of business.
- However, Our Haus could not really be
expected to prove compliance with the first
requirement since the living accommodation of
workers in the construction industry is not simply a
matter of business practice.
*Provision of deductible facilities must be
voluntarily accepted in writing by the employee'
' Ruling: Yes. The framers of the Labor code
6) Cash Wage/Commission
Art. 97 (f);
(f) "Wage" paid to any employee shall mean 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, which is payable by an
employer to an employee under a written or
unwritten contract of employment for work done or
to be done, or for services rendered or to be
rendered and includes the fair and reasonable
value, as determined by the Secretary of Labor and
Employment, of board, lodging, or other facilities
customarily furnished by the employer to the
employee. "Fair and reasonable value" shall not
include any profit to the employer, or to any person
affiliated with the employer.
Rule VII-A, Sec. 4
Section 4. Cash Wage – the minimum wage rates
prescribed in Section 1 hereof shall be basic, cash
wages without deducting therefrom whatever
benefits, supplements of allowances which the
employees enjoy free of charge aside from the
basic pay. An employer may provide subsidized
meals and snacks to his employees provided that
the subsidy shall not be less than 30% of the fair
and reasonable value of such facilities. In such
case, the employer may deduct from the wages of
the employees not more that 70% of the value of
the meals and snacks enjoyed by the employees,
provided that such deduction is with the written
authorization of the employees concerned.
Songco v. NLRC, 183 SCRA 610 (1990)
Facts: Petitioners, sales people of Respondent F.E.
Zuellig, Inc., were terminate on the ground of
retrenchment due to financial losses. The Labor
Arbiter found the termination was valid, and that
petitioners were entitled to separation pay but
exclusive of commissions, allowances, etc.
Issue: W/N commissions are included in the term
“Monthly salary” for the purpose of computing
separation pay.
invariably use “Monthly pay” or “Monthly salary”
for purposes of computing separation pay. ‘Salary’,
‘Pay’, and ‘wages’ are synonymous as they refer
to a recompense for services performed. It would
be absurd to consider salesmen who are only paid
commissions as not being entitled to separation
pay just because they do not have ‘salary’.
Boie Takeda v. De la Serna, 228 SCRA 329 (1993)
Facts: Labor Secretary Franklin Drilon expanded
the definition of the term “basic salary” by issuing
Memorandum Order No. 28 to include
commissions in the computation of the 13th month
pay. Boie-Takeda Chemicals, Inc. was ordered to
implement said issuance by the Labor Secretary in
paying the salaries of its medical representatives.
th
Issue: W/N 13 Month Pay includes commission
as intended by PD 185? NO.
Ruling: Court ruled that the 2nd par. of Sec. 5(a)
of the Revised Guidelines on the Implementation
of the 13th Month Pay Law unduly expanded the
concept of "basic salary" as defined in P.D. 851.
As such, “basic salary” is to be understood in its
common, generally- accepted meaning — a rate
of pay for a standard work period exclusive of such
additional payments as bonuses and overtime.
'
Discussion: Memorandum Order No. 28 did not
repeal, supersede, or abrogate P.D. No. 851
- it merely "modified" Section 1 of the Decree by
removing the P1,000.00 salary ceiling
- concept of 13th Month Pay as envisioned,
defined, and implemented under P.D. 851 remained
unaltered
• San Miguel Corp. vs. Inchong:
- basic salary of an employee is used as the basis
in the determination of his 13th month pay
- compensations or remunerations which are
deemed not part of the basic pay is excluded as
basis in the computation of the mandatory bonus
- Rules and Regulations Implementing P.D. No.
851: the following compensations are deemed not
part of the basic salary —
a) Cost-of-living allowances granted pursuant to
Presidential Decree 525 and Letter of Instructions
No. 174;
b) Profit-sharing payments;
c) All allowances and monetary benefits which are
not considered or integrated as part of the regular
basic salary of the employee at the time of the
promulgation of the Decree on December 16,
1975.
• BASIC SALARY is to be understood in its
common, generally- accepted meaning — a rate of
pay for a standard work period exclusive of such
additional payments as bonuses and overtime
- Pless v. Franks held that in statutes providing that
pension should not less than 50% of "basic salary"
at the time of retirement, the quoted words meant
the salary that an employee (e.g. a policeman) was
receiving at the time he retired without taking into
consideration any extra compensation to which he
might be entitled for extra work
• Those under fixed or guaranteed wag plus
commission — the fixed or guaranteed wage is
patently the "basic salary" for this is what the
employee receives for a standard work period.
- commissions are given for extra efforts exerted
in consummating sales or other related transactions
— they are, as such, additional pay, not part of the
"basic salary”
Philippine Duplicators v. NLRC, 241 SCRA 380
(1995)
The Court distinguishes between sales
commissions and productivity bonuses. Sales
commissions are paid upon the specific results
achieved/actual sales made by a salesperson and
are part of the salesperson's basic pay. On the
other hand, productivity bonuses are generally tied
to the profit generation of the employer corporation
and not directly dependent on the extent an
individual employee exerts himself. Bonuses
constitute an act of generosity on the part of the
employer and are not legally demandable absent
a contractual undertaking to pay it.
Additional payments made to employees, to the
extent they partake of the nature of profit-sharing
payments, are properly excluded from the ambit
of the term "basic salary" for purposes of
computing the 13th month pay due to
employees. Such additional payments are not
"commissions" within the meaning of the second
 paragraph of Section 5 (a) of the Revised
Guidelines Implementing 13th Month Pay'
' discontinued or eliminated by the employer, by virtue
7) Gratuity and Salary/Wages, Difference
Plastic Town Center Corp. v. NLRC, 172 SCRA 580
1989)
Plastic Town Center Corp. argued that gratuity pay to
be given to employees who voluntary retired should
be computed on the basis of 26 days for one-month
salary, under the principle of “fair day’s wage for fair
day’s labor”. Private respondents asserted that it
should be computed equivalent to 30 days salary.
The Court ruled in favor of the respondents. Nowhere
has it ever been stated that gratuity pay should be
based on the actual number of days worked over the
period of years forming its basis. Gratuity pay is not
intended to pay a worker for actual services rendered.
8) Effect on Benefits, Art. 100
ART. 100. Prohibition Against Elimination or
Diminution of Benefits. Nothing in this Book shall be
construed to eliminate or in any way diminish
supplements, or other employee benefits being
enjoyed at the time of promulgation of this Code.
Davao Fruits Corporation v. Associated Labor Union,
225 SCRA 562 (1993)
th
Facts: ALU filed a complaint for payment of 13
month pay that included for its computation other
remuneration{(which PD 851 and its supplementing
rules excluded in the computation of such) that was
nevertheless included because of company practice.
The petitioner alleges that such inclusion in the
computation was erroneous and was only
subsequently discovered.
Ruling: The court ruled that even though such other
remunerations were excluded by the law and its
supplementing rules, the petitioner computed and
paid the thirteenth month pay, without excluding the
subject items therein from 1975-1981 and therefore
established company practice and ripened such
ripened into benefits enjoyed by the employees and
any benefit and supplement being enjoyed by the
employees cannot be reduced, diminished,
of Section 10 of the Rules and Regulations
Implementing P.D. No. 851, and Article 100 of the
labor of the Philippines, which prohibit the diminution
or elimination by the employer of the employees'
existing benefit
Philippine Journalists, Inc. v. Journal Employees
Union, 697 SCRA 103 (2013)
Respondent Micahel Alfante was dismissed from
office due to his alleged tardiness poor performance.
The LA found that he was legally dismissed. Upon
appeal, the NLRC and CA found that he is entitled to
receive funeral and bereavement aid due to his
parent’s death. Petitioner PJI contested the grant of
such aid, by interposing 2 arguments: (1) there is a
distinction based on civil status of the regular EE in
defining who qualifies as a “legal dependent”, and;
(2) the grant of such aid has not yet ripened into a
company policy. SC dismissed the petition. Court said
that social laws make no distinction as to civil status,
but only the actual “dependency” of deemed
beneficiaries on the regular EE. As regards the
argument that the grant has not yet ripened into a
company policy, Court found that even though PJI
pledged to change the correct the definition of who
qualifies as legal dependents in the CBA, the same
definition is retained, which allowed it to grant such
aid to at least 2 employees in the past.
2. Wage Fixing Machinery
References: ILO Convention 26 (1928); RA 6727, as
amended; Art. 99, 120-124, 126-127; Rule IX; NCR-
17, 3 June 2012; NCR-18, 6 Sept. 2013; NCR-19, 16
March 2015; NCR-21, 2 June 2016; NCR-21
a. Rationale for Wage Rationalization
RA 6727 (Wage Rationalization Act), Section 2. It is
hereby declared the policy of the State to rationalize
the fixing of minimum wages and to promote
productivity-improvement and gain-sharing measures
to ensure a decent standard of living for the workers
and their families; to guarantee the rights of labor to
its just share in the fruits of production; to enhance
employment generation in the countryside through
industry dispersal; and to allow business and industry
reasonable returns on investment, expansion and
growth.
b. Agencies in Wage Fixing Machinery
1) National Wages and Productivity Commission
"Art. 120. Creation of the National Wages and
Productivity Commission. — There is hereby created
a National Wages and Productivity Commission,
hereinafter referred to as the Commission, which
shall be attached to the Department of Labor and
Employment (DOLE) for policy and program
coordination.”
"Art. 121. Powers and Functions of the Commission.
— The Commission shall have the following powers
and functions:
"(a) To act as the national consultative and
advisory body to the President of the
Philippines and Congress on matters
relating to wages, incomes and productivity;
"(b) To formulate policies and guidelines on
wages, incomes and productivity
improvement at the enterprise, industry and
national levels;
"(c) To prescribe rules and guidelines for
the determination of appropriate minimum
wage and productivity measures at the
regional, provincial or industry levels;
"(d) To review regional wage levels set by
the Regional Tripartite Wages and
Productivity Boards to determine if these
are in accordance with prescribed
guidelines and national development plans;
"(e) To undertake studies, researches and
surveys necessary for the attainment of its
functions and objectives, and to collect and
compile data and periodically disseminate
information on wages and productivity and
other related information, including, but not
limited to, employment, cost-of-living, labor
costs, investments and returns;
"(f) To review plans and programs of the
Regional Tripartite Wages and Productivity
Boards to determine whether these are
consistent with national development plans;
"(g) To exercise technical and
administrative supervision over the Regional
Tripartite Wages and Productivity Boards;
"(h) To call, from time to time, a national
tripartite conference of representatives of
government, workers and employers for the
consideration of measures to promote
wage rationalization and productivity; and
"(i) To exercise such powers and functions
as may be necessary to implement this Act.
"The Commission shall be composed of the
Secretary of Labor and Employment as ex-officio
chairman, the Director-General of the National
Economic and Development Authority (NEDA) as
ex-officio vice-chairman, and two (2) members
each from workers and employers sectors who shall
be appointed by the President of the Philippines
upon recommendation of the Secretary of Labor and
Employment to be made on the basis of the list of
nominees submitted by the workers and employers
sectors, respectively, and who shall serve for a term
of five (5) years. The Executive Director of the
Commission shall also be a member of the
Commission.
"The Commission shall be assisted by a Secretariat
to be headed by an Executive Director and two (2)
Deputy Directors, who shall be appointed by the
President of the Philippines, upon the
recommendation of the Secretary of Labor and
Employment.
"The Executive Director shall have the same rank,
salary, benefits and other emoluments as that of a
Department Assistant Secretary, while the Deputy
Directors shall have the same rank, salary, benefits
and other emoluments as that of a Bureau Director.
The members of the Commission representing labor
and management shall have the same rank,
emoluments, allowances and other benefits as those
prescribed by law for labor and management
representatives in the Employees' Compensation
Commission.
Art. 126. Prohibition Against Injunction. — No
preliminary or permanent injunction or temporary
restraining order may be issued by any court, tribunal
or other entity against any proceedings before the
Commission or the Regional Boards."
2) Regional Tripartite Wages and Productivity
Board
Art. 99. Regional Minimum Wages. — The minimum
wage rates for agricultural and non-agricultural
employees and workers in each and every region of
the country shall be those prescribed by the Regional
Tripartite Wages and Productivity Boards.
"Art. 122. Creation of Regional Tripartite Wages and
Productivity Boards. — There is hereby created
Regional Tripartite Wages and Productivity Boards,
hereinafter referred to as Regional Boards, in all
regions, including autonomous regions as may be
established by law. The Commission shall determine
the offices/headquarters of the respective Regional
Boards.
"The Regional Boards shall have the following
powers and functions in their respective territorial
jurisdiction:
"(a) To develop plans, programs and
projects relative to wages, incomes and
productivity improvement for their respective
regions;
"(b) To determine and fix minimum wage
rates applicable in their region, provinces or
industries therein and to issue the
corresponding wage orders, subject to
guidelines issued by the Commission;
"(c) To undertake studies, researches and
surveys necessary for the attainment of their
functions, objectives and programs, and to
collect and compile data on wages,
incomes, productivity and other related
information and periodically disseminate the
same;
"(d) To coordinate with the other Regional
Boards as may be necessary to attain the
policy and intention of this Code;
"(e) To receive, process and act on
applications for exemption from prescribed
wage rates as may be provided by law or
any Wage Order; and
"(f) To exercise such other powers and
functions as may be necessary to carry out
their mandate under this Code.
Implementation of the plans, programs and projects
of the Regional Boards referred to in the second
paragraph, letter (a) of this Article, shall be through
the respective regional offices of the Department of
Labor and Employment within their territorial
jurisdiction; Provided, however, That the Regional
Boards shall have technical supervision over the
regional office of the Department of Labor and
Employment with respect to the implementation of
said plans, programs and projects.
"Each Regional Board shall be composed of the
Regional Director of the Department of Labor and
Employment as chairman, the Regional Directors of
the National Economic and Development Authority
and the Department of Trade and Industry as vice-
chairmen and two (2) members each from workers
and employers sectors who shall be appointed by
the President of the Philippines, upon the
recommendation of the Secretary of Labor and
Employment, to be made on the basis of the list of
nominees submitted by the workers and employers
sectors, respectively, and who shall serve for a term
of five (5) years.
"Each Regional Board to be headed by its chairman
shall be assisted by a Secretariat.
"Art. 126. Prohibition Against Injunction. — No
preliminary or permanent injunction or temporary
restraining order may be issued by any court, tribunal
or other entity against any proceedings before the
Commission or the Regional Boards."
Nasipit Lumber Company, Inc. v. NLRC, 289 SCRA
667 (1998)
Facts: Petitioner companies applied for exemption to
a wage order which was granted by the Region X
Tripartite Wages and Productivity Board (RTWPB)
pursuant to the said board’s guideline (guideline #3)
for exempting establishment belonging to distressed
industries. On appeal, the National Wages and
Productivity Commission (NWPC) reversed the grant
because guideline #3 (allows for exemption given
that the applying establishment belongs to a
distressed industry which is distressed due to
conditions beyond its control as may be determined
by the board in consultation with DTI and NWPC) was
not approved by the NWPC, and decided that its own
criteria of at least 25% impairment in capital should
apply.
Ruling: The court ruled against petitioners and held
that the labor code clearly grants the NWPC the
power to prescribe rules and guidelines, and the
RTWPB had usurped the authority of the NWPC when
it allowed exemption pursuant to a guideline it issued
without approval of NWPC.
c. Standards/Criteria for Minimum Wage Fixing,
RA 6727, Sec. 3; Art. 124
"Art. 124. Standards/Criteria for Minimum Wage
Fixing. — The regional minimum wages to be
established by the Regional Board shall be as nearly
adequate as is economically feasible to maintain the
minimum standards of living necessary for the
health, efficiency and general well-being of the
employees within the framework of the national
economic and social development program. In the
determination of such regional minimum wages, the
Regional Board shall, among other relevant factors,
consider the following:
"(a) The demand for living wages;
"(b) Wage adjustment vis-a-vis the
consumer price index;
"(c) The cost of living and changes or
increases therein;
"(d) The needs of workers and their
families;
"(e) The need to induce industries to invest
in the countryside;
"(f) Improvements in standards of living;
"(g) The prevailing wage levels;
"(h) Fair return of the capital invested and
capacity to pay of employers;
"(i) Effects on employment generation and
family income; and
"(j) The equitable distribution of income and
wealth along the imperatives of economic
and social development.
"The wages prescribed in accordance with the
provisions of this Title shall be the standard
prevailing minimum wages in every region. These
wages shall include wages varying within industries,
provinces or localities if in the judgment of the
Regional Board conditions make such local
differentiation proper and necessary to effectuate the
purpose of this Title.
"Any person, company, corporation, partnership or
any other entity engaged in business shall file and
register annually with the appropriate Regional
Board, Commission and the National Statistics Office
an itemized listing of their labor component,
specifying the names of their workers and
employees below the managerial level, including
learners, apprentices and disabled/handicapped
workers who were hired under the terms prescribed
in the employment contracts, and their
corresponding salaries and wages.
"Where the application of any prescribed wage
increase by virtue of law or Wage order issued by
any Regional Board results in distortions of the
wage structure within an establishment, the employer
and the union shall negotiate to correct the
distortions. Any dispute arising from wage distortions
shall be resolved through the grievance procedure
under their collective bargaining agreement and, if it
remains unresolved, through voluntary arbitration.
Unless otherwise agreed by the parties in writing,
such dispute shall be decided by the voluntary
arbitrator or panel of voluntary arbitrators within ten
(10) calendar days from the time said dispute was
referred to voluntary arbitration.
"In cases where there are no collective agreements
or recognized labor unions, the employers and
workers shall endeavor to correct such distortions.
Any dispute arising therefrom shall be settled
through the National Conciliation and Mediation
Board and, if it remains unresolved after ten (10)
calendar days of conciliation, shall be referred to the
appropriate branch of the National Labor Relations
Commission (NLRC). It shall be mandatory for the
NLRC to conduct continuous hearings and decide
the dispute within twenty (20) calendar days from
the time said dispute is submitted for compulsory
arbitration.
"The pendency of a dispute arising from a wage
distortion shall not in any way delay the applicability
of any increase in prescribed wage rates pursuant
to the provisions of law or Wage Order.
"As used herein, a wage distortion shall mean a
situation where an increase in prescribed wage rates
results in the elimination or severe contraction of
intentional quantitative differences in wage or salary
rates between and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure based
on skills, length of service, or other logical bases of
differentiation.
"All workers paid by result, including those who are
paid on piecework, takay, pakyaw or task basis,
shall receive not less than the prescribed wage rates
per eight (8) hours work a day, or a proportion
thereof for working less than eight (8) hours.
"All recognized learnership and apprenticeship
agreements shall be considered automatically
modified insofar as their wage clauses are
concerned to reflect the prescribed wage rates."
d. Wage Order
Art. 123. Wage Order. — Whenever conditions in the
region so warrant, the Regional Board shall
investigate and study all pertinent facts; and based
on the standards and criteria herein prescribed, shall
proceed to determine whether a Wage Order should
be issued. Any such Wage Order shall take effect
after fifteen (15) days from its complete publication
in at least one (1) newspaper of general circulation
in the region.
"In the performance of its wage determining
functions, the Regional Board shall conduct public
hearings/consultations, giving notices to employees'
and employers' groups, provincial, city and
municipal officials and other interested parties.
"Any party aggrieved by the Wage Order issued by
the Regional Board may appeal such order to the
Commission within ten (10) calendar days from the
publication of such order. It shall be mandatory for
the Commission to decide such appeal within sixty
(60) calendar days from the filing thereof.
"The filing of the appeal does not stay the order
unless the person appealing such order shall file
with the Commission an undertaking with a surety or
sureties satisfactory to the Commission for the
payment to the employees affected by the order of
the corresponding increase, in the event such order
is affirmed.”
Art. 124, supra
1) Methods of Fixing
a) Floor Wage method
b) Salary – Ceiling Method
Employers Confederation of the Phils. V. National
Wage and Productivity Commission, 201 SCRA 759
(1991)
Facts: Pursuant to RA 6727, the Regional Board of
NCR issued a Wage Order which increased the
minimum wage by P17.00. This was later amended
such that all workers already receiving wages above
the minimum wage of P125.00 will also receive an
increase of P17.00/day.
Issue: W/N NWPC GAD in ordering Wage Orders?
NO.
Ruling: The Court explained that there were two ways
of determining wages, the floor wage method and the
salary ceiling method. The Salary Ceiling method is
one in which a wage adjustment is applied to
employees receiving a certain denominated salary
ceiling. The Court cited various reasons why such an
act and why such delegation of power was valid.
Discussion:
• The salary-ceiling method was a wage
determination method that was brought about to keep
on check wage distortions
a. There are two methods of determining wages:
i. The floor wage method- fixing of determinate
amount that would be added to the prevailing
statutory minimum wage
ii. Salary-ceiling method- wage adjustment is applied
to employees receiving a certain denominated salary
ceiling
b. The first method was adopted in earlier wage
orders, but there was a shift to the salary-ceiling
method. This shift was brought about by labor
disputes arising from wage distortions, and the
ineffectiveness of grievance procedures in resolving
such distortions
The Act is simply meant to rationalize wages by
having permanent boards to decide wages rather than
leave wage determination to Congress year after year
and law after law. It leaves the question of wages to
experts
a. Republic Act No. 6727 was intended to
rationalize wages, by providing for full-time
boards to police wages round-the-clock, and
by giving the boards enough powers to
achieve this objective
b. If RA 6727 only intended that the
Board set floor wages, then the Act would
simply need an accountant to keep track of
the latest consumer prince indexes, or have
the Congress done so. It is clear that the Act
sought a “thinking” group of men and women
bound by statutory standards to determine
wages.
Prof Battad mentioned NWPC Guidelines 001-95
(https://www.ilo.org/dyn/natlex/docs/ELECTRONIC
/77611/82389/F812775048/PHL.77611.pdf) in
class.
2) Validity
Metropolitan Bank and Trust Co., Inc. v. National
Wages Productivity Commission, 514 SCRA 346
(2007)
Facts: By issuing Wage Order No. R02-03, RTWPB
granted a general across-the-board increase of
P15.00 to all employees and workers of Region 2.
Instead of appealing the wage order to NWPC,
Metrobank sent a letter-query to the NWPC, asking
for exemption as it already pays its employees above
minimum wage. It later filed a petition for certiorari and
prohibition with the Court of Appeals.
Ruling: The Court ruled that the wage order is partially
void insofar as it grants a wage increase to
employees earning more than the minimum wage
rate, but valid as to the rest. The Court also discussed
the two methods of determining wages: the floor-
wage and salary-ceiling methods.
Discussion: Section 1, Wage Order No. R02-03 is
void insofar as it grants a wage increase to
employees earning more than the minimum wage rate
In the present case, the RTWPB did not determine or
fix the minimum wage rate by the "floor-wage
method" or the "salary-ceiling method" in issuing the
Wage Order
o did not set a wage level nor a range to which a
wage adjustment or increase shall be added
o granted an across-the-board wage increase of
P15.00 to all employees and workers of Region 2
o 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; granted additional
benefits not contemplated by R.A. No. 6727
3) Wage Distortion
4 Elements of wage distortion (from Prubankers)
(a) Existing hierarchy of positions with
corresponding salary rates;
(b) A significant change in the salary rate of a
lower pay class without concomitant
increase in the salary rate of a higher one;
(c) The elimination of the distinction between the
two levels; and
(d) The existence of the distortion in the same
region of the country.
Art. 124, pars. 4, 5, 6, 7
Where the application of any prescribed wage
increase by virtue of law or Wage order issued by
any Regional Board results in distortions of the
wage structure within an establishment, the employer
and the union shall negotiate to correct the
distortions. Any dispute arising from wage distortions
shall be resolved through the grievance procedure
under their collective bargaining agreement and, if it
remains unresolved, through voluntary arbitration.
Unless otherwise agreed by the parties in writing,
such dispute shall be decided by the voluntary
arbitrator or panel of voluntary arbitrators within ten
(10) calendar days from the time said dispute was
referred to voluntary arbitration.
"In cases where there are no collective agreements
or recognized labor unions, the employers and
workers shall endeavor to correct such distortions.
Any dispute arising therefrom shall be settled
through the National Conciliation and Mediation
Board and, if it remains unresolved after ten (10)
calendar days of conciliation, shall be referred to the
appropriate branch of the National Labor Relations
Commission (NLRC). It shall be mandatory for the
NLRC to conduct continuous hearings and decide
the dispute within twenty (20) calendar days from
the time said dispute is submitted for compulsory
arbitration.
"The pendency of a dispute arising from a wage
distortion shall not in any way delay the applicability
of any increase in prescribed wage rates pursuant
to the provisions of law or Wage Order.
"As used herein, a wage distortion shall mean a
situation where an increase in prescribed wage rates
results in the elimination or severe contraction of
intentional quantitative differences in wage or salary
rates between and among employee groups in an
establishment as to effectively obliterate
distinctions embodied in such wage structure based
on skills, length of service, or other logical bases of
differentiation.
Prubankers Association v. Prudential Bank & Trust Co.,
302 SCRA 74 (1999)
Facts: After the issuance of two wage orders which
were implemented by the Bank in only two regions,
petitioner assails this application by contending that it
should extend to other regions as such would
constitute wage distortion in the wage rates of
respondent’s employees nationwide. CA holds that
there was no wage distortion. SC affirms this.
Ruling: SC holds that there was no wage distortion
because:
1. quantitative difference in compensation between
different pay classes remained the same in all
branches in the affected region
2. a disparity in wages between employees holding
similar positions but in different regions does not
constitute wage distortion as contemplated by law
different regions have different needs therefore
variance in wages is to be expected (RA 6727
recognizes this)
3. the term “establishment” in Sec. 13 of Ra 6727
provides that “establishment” does not include all
branches and offices in different regions
Bankard Employees Union-WATU v. NLRC, 423 SCRA
148 (2004)
Facts: New Salary Scale was established for the
purpose of making Bankard’s hiring rate competitive
in the industrys labor market, which increased the
hiring rates of new employees. Bankard Employees
Union-WATU pressed for the increase in the salary
of its old, regular employees. But Bankard said that
obligation on the part of the management to grant to
all its employees the same increase in an across-
the-board manner.
Issue: W/N the unilateral adoption by an employer of
an upgraded salary scale that increased the hiring
rates of new employees without increasing the salary
rates of old employees resulted in wage distortion
within the contemplation of Article 124 of the Labor
the
Code? NO.
Ruling: The court held that Petitioner cannot legally
obligate Bankard to correct the alleged wage
distortion as the increase in the wages and salaries
of the newly-hired was not due to a prescribed law
or wage order. Article 124 should be construed and
correlated in relation to minimum wage fixing, the
intention of the law being that in the event of an
increase in minimum wage, the distinctions embodied
in the wage structure based on skills, length of
service, or other logical bases of differentiation will be
preserved. the voluntary and unilateral increases by
the employer in fixing hiring rates is inherently a
business judgment prerogative.
3. Wage Payment and Protection
ILO Convention 95 (1949)
a. Form of Payment; Exemption
ART. 102. Forms of Payment. No employer shall pay
the wages of an employee by means of promissory
notes, vouchers, coupons, tokens, tickets, chits, or
any object other than legal tender, even when
expressly requested by the employee. Payment of
wages by check or money order shall be allowed
when such manner of payment is customary on the
date of effectivity of this Code, or is necessary
because of special circumstances as specified in
appropriate regulations to be issued by the Secretary
of Labor and Employment or as stipulated in a
collective bargaining agreement.
Civil Code, Article 1705. The laborer's wages shall be
paid in legal currency.
Rule VII
SECTION 1. Manner of wage payment. — As a general
rule, wages shall be paid in legal tender and the use
of tokens, promissory notes, vouchers, coupons, or
any other form alleged to represent legal tender is
absolutely prohibited even when expressly requested
by the employee.
SECTION 2. Payment by check. — Payment of wages
by bank checks, postal checks or money orders is
allowed where such manner of wage payment is
customary on the date of the effectivity of the Code,
where it is so stipulated in a collective agreement, or
where all of 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.
Congson v. NLRC, 243 SCRA 260 (1995)
SC held that petitioner's practice of paying
respondents by means of legal tender and tuna
intestines/liver was against the clear provision of the
Labor Code (Art.102). Respondents were also entitled
to separation pay given the strained relationship
between them and the employer.
b. Time of Payment; Exemption, Art. 103, Rule
VIII, Sec. 3
ART. 103. Time of Payment. Wages shall be paid at
least once every two (2) weeks or twice a month at
intervals not exceeding sixteen (16) days. If on
account of force majeure or circumstances beyond
the employer’s control, payment of wages on or within
the time herein provided cannot be made, the
employer shall pay the wages immediately after such
force majeure or circumstances have ceased. No
employer shall make payment with less frequency
than once a month. The payment of wages of
employees 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 collective
bargaining agreement or arbitration award: 1. That
payments are made at intervals not exceeding sixteen
(16) days, in proportion to the amount of work
completed; 2. That final settlement is made upon
completion of the work.
Rule VIII, Sec. 3
SECTION 3. Time of payment. — (a) Wages shall be
paid not less than once every two (2) weeks or twice
a month at intervals not exceeding sixteen (16) days,
unless payment cannot be made with such regularity
due to force majeure or circumstances beyond the
employer's control in which case the employer shall
pay the wages immediately after such force majeure
or circumstances have ceased. (b) In case of
payment of wages by results involving work which
cannot be finished in two (2) weeks, payment shall
be made at intervals not exceeding sixteen days in
proportion to the amount of work completed. Final
settlement shall be made immediately upon
completion of the work.
Gilles v. CA, Schema Konsult, 589 SCRA 399 (2009)
Facts: SKI entered into an Agreement with CBI. CBI
entered into a joint venture with Aquatic Farms for
consultancy assistance on the "Shrimp and Fish
Culture Project" in India. Gilles was accepted as Water
Systems/Irrigation Engineer of the Project, and had to
go to India. He became unhappy because 1) he felt
overworked due to the accelerated timeline for the
project, 2) he was not being paid on time, and 3)
and his employer SKI abandoned/ignored him when
he tried to raise these issues. He sent in a letter of
resignation, and the Board (allegedly) met to discuss
his resignation. Afterwards, he was dismissed.
Issue: W/N he was illegally dismissed. YES, he was
constructively dismissed.
RE: Time & Payment of Wages: SKI was guilty of
violating Article 103 of the Labor Code, which
mandates that wages shall be paid at least once every
two (2) weeks or twice a month at intervals not
exceeding sixteen (16) days and that no employer
shall make payment with less frequency than once a
month.
c. Place of Payment; Exemption,
ART. 104. Place of Payment. Payment of wages shall
be made at or near the place of undertaking, except
as otherwise provided by such regulations as the
Secretary of Labor and Employment may prescribe
under conditions to ensure greater protection of
wages.
Rule VIII, Sec. 4
SECTION 4. Place of payment. — As a general rule,
the place of payment shall be at or near the place of
undertaking. Payment in a place other than the work
place shall be permissible only under the following
circumstances:
(a) When payment cannot be effected at or near the
place of work by reason of the deterioration of peace
and order conditions, or by reason of actual or
impending emergencies caused by fire, flood,
epidemic or other calamity rendering payment thereat
impossible;
(b) When the employer provides free transportation to
the employees back and forth; and
(c) Under any other analogous circumstances;
Provided, That the time spent by the employees in
collecting their wages shall be considered as
compensable hours worked;
(d) No employer shall pay his employees in any bar,
night or day club, drinking establishment, massage
clinic, dance hall, or other similar places or in places
where games are played with stakes of money or
things representing money except in the case of
persons employed in said places.
See: Labor Advisory on Payment of Salaries Thru
Automated Teller Machines (ATM), 25 Nov. 1996
Labor Advisory on Payment of Aalaries through ATM-
A. Payment through automated teller machine (ATM)
of banks provided the following condition sare met:1
. the ATM system of payment is with the written
consent of the employees concerned;
2. The employees are given reasonable time to
withdraw their wages from the bank facility which time,
if done during working hours, shall be considered
compensable hours worked;
3. The system shall allow workers to receive their
wages within the period or frequency and in the
amount prescribed under the Labor Code, as
amended;
4. There is a bank or ATM facility within a radius of
one (1) kilometer to the place of work;
5. Upon request of the concerned employee/s, the
employer shall issue a record of payment of wages,
benefits and deductions for a particular period;6.
There shall be n additional expenses and no
diminution of benefits and privileges as a result of the
ATM system of payment;7. The employer shall
assume responsibility in case the wage protection
provisions of law and regulations are not complied
with under the arrangement.
d. Direct Payment of Wages; Exception, Art.
105, Secs. 5, 6
ART. 105. Direct Payment of Wages. Wages shall be
paid directly to the workers to whom they are due,
except:
(a) In cases of force majeure rendering such payment
impossible or under other special circumstances to
be determined by the Secretary of Labor and
Employment in appropriate regulations, in which case,
the worker may be paid through another person
under written authority given by the worker for the
purpose; or
(b) Where the worker has died, in which case, the
employer may pay the wages of the deceased worker
to the heirs of the latter without the necessity of
intestate proceedings. The claimants, if they are all of
age, shall execute an affidavit attesting to their
relationship to the deceased and the fact that they are
his heirs, to the exclusion of all other persons. If any
of the heirs is a minor, the affidavit shall be executed
on his behalf by his natural guardian or next-of-kin.
The affidavit shall be presented to the employer who
shall make payment through the Secretary of Labor
and Employment or his representative. The
representative of the Secretary of Labor and
Employment shall act as referee in dividing the
amount paid among the heirs. The payment of wages
under this Article shall absolve the employer of any
further liability with respect to the amount paid.
Bermiso v. Escano, Inc., 105 Phil. 231 (1959)
Summary: Petitioners were members of a Katubsanan
chapter named the SABAY GROUP, which was
engaged in work similar to stevedoring and arrastre
services. They worked as a group and pooled their
earning together, which would later on be divided
based on a sharing plan implemented by its leaders.
The petitioners filed a complaint against Escaño for
reinstatement plus backwages and DIRECT payment
of wages to them, not to the union. CIR found no
reason to disturb the current scheme of wage
apportionment amongst the laborers since majority of
them were satisfied with it. This petition was brought
by petitioners stating that CIR erred in its ruling in
violation of Sec. 10(b) of RA 602 which stipulates that
wages must be paid DIRECTLY to laborers, except in
the exceptions listed in the provision.
Held: The Sabay group undertook work as a group.
Thus, the role of their leaders and officers was
essential is securing and apportioning jobs amongst
the men and for this, they must be paid. Furthermore,
the lower court did not find sufficient evidence to
show that racketeering was employed by the leaders.
Basically, there was NO VIOLATION of RA 602. The
lower court did not find sufficient evidence to show
that racketeering was employed by the leaders. If any
existed the remedy can not be found in this court; it is
for the group or organize into a closely knitted union
which would secure the privileges that the selves who
would not exploit them.
4. Wage Prohibitions
ILO Convention 95 (1949)
a. Wage Interference in Disposal of Wages,
Article 6
Employers shall be prohibited from limiting in any
manner the freedom of the worker to dispose of his
wages.
ART. 112. Non-Interference in Disposal of Wages. No
employer shall limit or otherwise interfere with the
freedom of any employee to dispose of his wages.
He shall not in any manner force, compel, or oblige
his employees to purchase merchandise,
commodities or other property from any other person,
or otherwise make use of any store or services of
such employer or any other person.
Rule VIII, Sec. 9;
SECTION 9. Labor-only contracting. — (a) Any person
who undertakes to supply workers to an employer
shall be deemed to be engaged in labor-only
contracting where such person: (1) Does not have
substantial capital or investment in the form of tools,
equipment, machineries, work premises and other
materials; and (2) The workers recruited and placed
by such person are performing activities which are
directly related to the principal business or operations
of the employer in which workers are habitually
employed. (b) Labor-only contracting as defined
herein is hereby prohibited and the person acting as
contractor shall be considered merely as an agent or
intermediary of the employer who shall be responsible
to the workers in the same manner and extent as if
the latter were directly employed by him. (c) For
cases not falling under this Rule, the Secretary of
Labor and Employment shall determine through
appropriate orders whether or not the contracting out
of labor is permissible in the light of the circumstances
of each case and after considering the operating
needs of the employer and the rights of the workers
involved. In such case, he may prescribe conditions
and restrictions to insure the protection and welfare
of the workers.
Labor Advisory No. 11, s. 2014 (next page)
(a) In cases where the worker is insured with his
consent by the employer, and the deduction is to
recompense the employer for the amount paid by him
as premium on the insurance;
(b) For union dues, in cases where the right of the
worker or his union to checkoff has been recognized
by the employer or authorized in writing by the
individual worker concerned; and
(c) In cases where the employer is authorized by law
or regulations issued by the Secretary of Labor and
Employment.
Rule VIII, Sec. 10;
SECTION 10. Payment of wages in case of
bankruptcy. — Unpaid wages earned by the
employees before the declaration of bankruptcy or
judicial liquidation of the employer's business shall be
given first preference and shall be paid in full before
other creditors may establish any claim to a share in
the assets of the employer.

b. Wage Deduction/Exception

Article 8
1. Deductions from wages shall be permitted only
under conditions and to the extent prescribed by
national laws or regulations or fixed by collective
agreement or arbitration award.

2. Workers shall be informed, in the manner deemed

most appropriate by the competent authority, of the
conditions under which and the extent to which such
deductions may be made.

Article 9
Any deduction from wages with a view to ensuring a
direct or indirect payment for the purpose of obtaining
or retaining employment, made by a worker to an
employer or his representative or to any intermediary
(such as a labour contractor or recruiter), shall be
prohibited.

ART. 113. Wage Deduction. No employer, in his own

behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except:
Labor Advisory No. 11, s. 2014
b. Wage Deduction/Exception (cont.)
Genesis Transport Service, Inc. v. UMMGT & Taroy,
617 SCRA 352 (2010)
Facts: Respondent Taroy was hired by Genesis
Transport as a driver on a commission basis. He was
later terminated because he had met an accident and
he was allegedly regularly breaking company rules.
Upon filing a complaint for illegal dismissal and
reimbursement of illegal deductions on tollgate fees.
The LA held that he was validly dismissed and
ordered the refund of the deductions on his total
gross wages which were supposedly for tollgate fees.
NLRC and CA affirmed.
Ruling: The Court held that such deduction of his
gross revenue was in violation of Art. 103 and 100
which provides for non-deduction of wages and non-
diminution of benefits. Such deduction without Taroy’s
consent or authorization is illegal. It affirmed that due
process was accorded to Taroy, that his dismissal
was valid, that there was no violation of his due
process and refund of deductions on his wage.
Discussion: The withholding of those amounts
reduced the amount from which Taroy’s 9%
commission would be computed was correct.
o The computation marks a change of payment of
wages, resulting in diminution of Taroy’s wages in
violation of Art. 113 vis-à-vis Art. 100 of the Labor
Code.
▪ Art. 113 – Wage Deduction – No employer, in his
own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except
a) In cases where the worker is insured with his
consent by the employer, and the deduction is to
recompense the employer for the amount paid by him
as premium on the insurance.
b) For union dues, in cases where the right of the
worker or his union to check-off has been recognized
by the employer or authorized in writing by the
individual worker concerned; and
c) In cases where the employer is authorized by law
or regulations issued by the SOLE
▪ Art. 100 – Prohibition Against elimination or
Diminution of Benefits – Nothing in this book shall be
construed to eliminate or in any way diminish
supplements, or other employee benefits being
enjoyed at the time of promulgation of this Code.
o Without Taroy’s consent or authorization, deduction
is illegal
Niña Jewelry Manufacturing of Medal Arts, Inc. v.
Madeline C. Montecillo & Liza M. Trinidad, 661 SCRA
416 (2011)
Facts: There were incidents of theft involving
goldsmiths in Niña Jewelry’s employ. In response to
this, petitioner imposed a policy for goldsmiths
requiring them to post cash bonds or deposits in
varying amounts but in no case exceeding 15% of
the latter's salaries per week. The deposits were
intended to answer for any loss or damage which
Niña Jewelry may sustain by reason of the goldsmiths'
fault or negligence in handling the gold entrusted to
them. The deposits shall be returned upon completion
of the goldsmiths' work and after an accounting of the
gold received. The goldsmiths were given the option
not to post deposits, but to sign authorizations
allowing the former to deduct from the latter's salaries
amounts not exceeding 15% of their take home pay
should it be found that they lost the gold entrusted to
them.
Ruling: Court ruled that petitioners are not absolutely
precluded from imposing the new policy but, they can
only do so upon compliance with the requirements of
the law:
(1) employer must prove that there is an existing law
or regulation authorizing it to impose such burden on
its employee, and
(2) in case of deposit, that it is engaged in a trade,
occupation or business where such requirement is a
recognized practice.
Petitioner failed to comply with such requirements.
Hence, it is baselesss for Niña Jewelry to impose its
new policy upon the goldsmiths.
Milan, et al. v. NLRC, 759 SCRA 1 (2015)
Facts: Petitioners were allowed to occupy SMI Village,
which was owned by Solid Mills, by virtue of their
employment. In 2013, Solid Mills went through serious
business losses. Consequently, Solid Mills sent
individual notices to petitioners to vacate the Village.
Petitioners refused to leave the Village and demanded
to be paid their benefits.
Ruling: The court held that the return of the property’s
possession became an obligation or liability on the
part of the employees when the EER ceased. Thus,
Solid Mills has the right to withhold petitioners’ wages
and benefits because of this existing debt or liability.
Doctrine: An employer is allowed to withhold terminal
pay and benefits pending the employee’s return of its
properties.
See also: Marietta N. Portillo v. Rudolf Lietz,
Inc. 683 SCRA 568 (2012)
Marietta was hired by Lietz under the condition that
she “will not engage in any other gainful employment
by herself or with any other company either directly
or indirectly without the latter’s written consent. A
breach would render Marietta liable for liquidated
damages. When she got promoted, they had a letter
agreement which contained a Goodwill Clause
binding her to not engage directly or indirectly as
employee, manager, proprietor, or solicitor for herself
or others in a similar or competitive business or the
same character of work. She resigned later on and
got hired by Lietz’s direct competitor. She filed a
complaint against Lietz, Inc. for the payment of salary
and commissions. The company raised the defense
of legal compensation citing her alleged breach of the
Goodwill Clause.
The Court rules that the money claims cannot be
offset as the breach of the Goodwill clause
(contractual obligation) was outside the jurisdiction of
the labor tribunals. Furthermore, legal compensation
is effectively barred by Art. 113 of the Labor Code.
c. Requirement to Make Deposits for Loss or
Damage
ART. 114. Deposits for Loss or Damage. No employer
shall require his worker to make deposits from which
deductions shall be made for the reimbursement of
loss of or damage to tools, materials, or equipment
supplied by the employer, except when the employer
is engaged in such trades, occupations or business
where the practice of making deductions or requiring
deposits is a recognized one, or is necessary or
desirable as determined by the Secretary of Labor
and Employment in appropriate rules and regulations.
ART. 115. Limitations. No deduction from the deposits
of an employee for the actual amount of the loss or
damage shall be made unless the employee has
been heard thereon, and his responsibility has been
clearly shown.
Rule VIII, Sec. 11
SECTION 11. Attorney's fees. — Attorney's fees in any
judicial or administrative proceedings for the recovery
of wages shall not exceed 10 percent of the amount
awarded. The fees may be deducted from the total
amount due the winning party.
Dentech Manufacturing Corp. NLRC, 172 SCRA 588
(1989)
Facts: Private respondents filed a complaint of illegal
dismissal and violation of P.D. No. 851. Petitioners
th
argue that respondents are not entitled to 13 month
pay because they abandoned their work and that the
law exempts financially distressed companies from
compliance.
Ruling: The Court discussed the amendments since
P.D. No. 851 was enacted. At present, Memorandum
Order No. 28 (1986), issued by Pres. Corazon
Aquino, modified Sec. 1 of P.D. No. 851 which
eliminated the P1,000.00 salary ceiling — hence,
petitioners are entitled to 13th month pay. There is no
basis for the contention that the company is exempted
from the provision of P.D. No. 851 which mandated
the payment of 13th month compensation to
employees receiving less than P1,000.00 a month
o even if assuming that respondents are each paid a
monthly salary of over Pl,000.00, the company is still
not in a position to claim exemption — rules and
regulations implementing P.D. No. 851 provide that a
distressed employer shall qualify for exemption from
the requirements of the Decree only upon prior
authorization from the SOLE
▪ no such prior authorization had been obtained by
petitioner
Five J Taxi v. NLRC, 235 SCRA 556 (1994)
Facts: Respondents were hired as taxi drivers by
petitioner, who daily make Php15 deposits to the latter
for any deficiency in their boundary. They likewise
give Php20 payments for the washing of their cars.
After allegedly being dismissed, they filed complaints
for illegal dismissal and illegal deductions against the
petitioner. Lower courts affirmed their dismissal, as it
was found that they in fact, voluntarily left their jobs to
serve the other taxi companies they were working for.
Ruling: RE Illegal deductions: Court found that the
Php15 deposit is prohibited under Art. 114 of the
Labor Code; therefore, they are entitled to
reimbursements thereto. However, the Php20 for car
wash payments is not, as it is a recognized practice
in the taxi industry.
d. Withholding of Wages, Art. 116, 113; Civil
Code, Art. 1706
ART. 116. Withholding of Wages and Kickbacks
Prohibited. It shall be unlawful for any person, directly
or indirectly, to withhold any amount from the wages
of a worker or induce him to give up any part of his
wages by force, stealth, intimidation, threat or by any
other means whatsoever without the worker’s
consent.
ART. 113. Wage Deduction. No employer, in his own
behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except:
(a) In cases where the worker is insured with his
consent by the employer, and the deduction is to
recompense the employer for the amount paid by him
as premium on the insurance; (b) For union dues, in
cases where the right of the worker or his union to
checkoff has been recognized by the employer or
authorized in writing by the individual worker
concerned; and (c) In cases where the employer is
authorized by law or regulations issued by the
Secretary of Labor and Employment.
Civil Code, Art. 1706
Article 1706. Withholding of the wages, except for a
debt due, shall not be made by the employer.
SHS Perforated Materials v. Diaz, 633 SCRA 258
(2010)
Facts: Respondent Diaz was a business development
manager whose salary was withheld because
according to petitioner, he did not work during a
certain period and refused to communicate with
petitioner despite being told to do so. Upon learning
that his salary was being withheld, Diaz resigned and
filed for illegal dismissal. Petitioner argues that it was
under management prerogative to withhold Diaz’
salary pending explanation and accounting for his
work accomplishments.
Ruling: The court ruled that (1) management
prerogative cannot be understood to include the right
to temporarily withhold salary or wages without the
consent of the employee as it would be contrary to
Art. 116 of the Labor Code, and (2) the withholding
of salary done by the company did not fall under the
exceptions under Art. 113 of the same code, which
meant that said act was illegal and led to respondent’s
constructive dismissal.
5.! Deduction to Ensure Employment, Art. 117
ART. 117. Deduction to Ensure Employment. It shall
be unlawful to make any deduction from the wages
of any employee for the benefit of the employer or
his representative or intermediary as consideration of
a promise of employment or retention in employment.
6.! Retaliatory Measures, Art. 118
ART. 118. Retaliatory Measures. It shall be unlawful
for an employer to refuse to pay or reduce the wages
and benefits, discharge or in any manner discriminate
against any employee who has filed any complaint or
instituted any proceeding under this Title or has
testified or is about to testify in such proceedings.
7.! False Reporting, Art. 119; Rule X, Sec. 13
ART. 119. False Reporting. It shall be unlawful for any
person to make any statement, report, or record filed
or kept pursuant to the provisions of this Code
knowing such statement, report or record to be false
in any material respect.
Rule X, Sec. 13
SECTION 13. False reporting. — It shall be unlawful
for any employer or any person to make any false
statement, report or record on matters required to be
kept or maintained pursuant to the provisions of this
Rule.
8.! Keeping of Employee’s Records in a Place other
than the Workplace
Rule X, Secs. 11-12
SECTION 11. Place of records. — All employment
records of the employees shall be kept and
maintained by the employer in or about the premises
of the work place. The premises of a work-place shall
be understood to mean the main or branch office of
the establishment, if any, depending upon where the
employees are regularly assigned. The keeping of the
employee's records in another place is prohibited.
SECTION 12. Preservation of records. — All
employment records required to be kept and
maintained by employers shall be preserved for at
least three (3) years from the date of the last entry in
the records.
South Motorists Enterprises v. Tosoc, 181 SCRA 386
(1990)
Summary: Here employer was inspected by the Labor
officer and on the basis of the inspection report gave
awards to the employees even without the employer being
able to submit employment records as evidence because
it was in their main office. The court ruled that an award
based on an inspection report where the employer was
not able to adduce employment records as evidence is
valid especially when (a) the employer has not kept the
records in their premises violation of Section 11 of Rule
X, Book II of the Omnibus Rules and; (b) was granted
multiple extensions in order to collate said records but the
employer never delivered. In sum, it becomes a waiver.
Discussion: Anent the claim that the respondent
Secretary of Labor and Employment erred in affirming
the award based on a mere Inspection Report, we
see no reason for SOUTH MOTORISTS to complain
as it was afforded ample opportunity to present its
side.
a. It failed to present employment records giving as
an excuse that they were sent to the main office in
Manila, in violation of Section 11 of Rule X, Book II of
the Omnibus
i. "All employment records of the employees of an
employer shall be kept and maintained in or about
the premises of the workplace. The premises of a
workplace shall be understood to mean the main or
branch office or establishment, if any, depending
upon where the employees are regularly assigned.
The keeping of the employee's records in another
place is prohibited."
b. SOUTH MOTORISTS also caused the resettings of
all subsequent hearings on the ground that the
documents were still being prepared and collated.
Having been given the opportunity to put forth its
case, SOUTH MOTORISTS has only itself to blame for
having failed to avail of the same
c. Repeated failure to attend the hearings, and to
submit any motion as manifested may be construed
as a waiver of its right to adduce evidence to
controvert the workers' claims.
9.! Garnishment/Execution
Civil Code, Art. 1708
Article 1708. The 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, 140 SCRA 304 (1985)
Facts: Petitioner is a building administrator.
Respondents filed a complaint for damages against
petitioner.
After the Court of First Instance ruled in favor of
respondents, petitioner’s “salary, commission and/or
remuneration” were garnished.
Petitioner challenges this garnishment by claiming that
her salary falls within the provision in the Civil Code
exempting “laborer’s wage” from garnishment.
Issue: W/N petitioner’s salary is exempted from
garnishment; Stated differently: W/N petitioner’s salary
constitutes “laborer’s wage” which is exempted from
garnishment according to Art 1708 NCC
Ruling: No. The term ‘laborer’ as used in that provision
refers to one whose work is manual. Petitioner is not
within that class.
Hence, petitioner’s salary does not constitute a
laborer’s wage which is not subject to attachment or
execution, according to Art 1708 NCC. 1. It is beyond
dispute that petitioner is not an ordinary or rank and
file laborer. On the contrary, petitioner is occupying a
position equivalent to that of a managerial or
supervisory position.
With that, the question must be framed as: does her
salary for her position constitute “laborer’s wage” as
contemplated in Art 1708 NCC?
The Court will look into what is meant by “laborer”
and “wage”
2. First, “laborer,” in its broadest sense, includes
everyone who performs any kind of mental or
physical labor.
3.However, jurisprudence has interpreted this to refer
to a person who is engaged in some form of manual
or physical labor, whenever the term is used in
exemption acts
5. Work Preference in the Event of Bankruptcy
ART. 110. Worker Preference in Case of Bankruptcy.
84 In the event of bankruptcy or liquidation of an
employer’s business, his workers shall enjoy first
preference as regards their wages and other
monetary claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary
claims shall be paid in full before claims of the
government and other creditors may be paid.
Book III, Rule VIII, Sec. 7;
SECTION 7. Civil liability of employer and contractors.
— Every employer or indirect employer shall be jointly
and severally liable with his contractor or sub-
contractor for the unpaid wages of the employees of
the latter. Such employer or indirect employer may
require the contractor or sub-contractor to furnish a
bond equal to the cost of labor under contract on
condition that the bond will answer for the wages due
the employees should the contractor or subcontractor,
as the case may be, fail to pay the same.
Civil Code, Arts. 1207, 2241 (6), 2242 (3), 2244 (2),
2246, 2248, 2250
Article 1207. The concurrence of two or more
creditors or of two or more debtors in one and the
same obligation does not imply that each one of the
former has a right to demand, or that each one of the
latter is bound to render, entire compliance with the
prestation. There is a solidary liability only when the
obligation expressly so states, or when the law or the
nature of the obligation requires solidarity. (1137a)
Article 2241. With reference to specific movable
property of the debtor, the following claims or liens
shall be preferred:
(6) Claims for laborers' wages, on the goods
manufactured or the work done;
Article 2242. With reference to specific immovable
property and real rights of the debtor, the following
claims, mortgages and liens shall be preferred, and
shall constitute an encumbrance on the immovable or
real right:
(3) Claims of laborers, masons, mechanics and other
workmen, as well as of architects, engineers and
contractors, engaged in the construction,
reconstruction or repair of buildings, canals or other
works, upon said buildings, canals or other works;
Article 2244. With reference to other property, real
and personal, of the debtor, the following claims or
credits shall be preferred in the order named:
(2) Credits for services rendered the insolvent by
employees, laborers, or household helpers for one
year preceding the commencement of the
proceedings in insolvency;
Article 2246. Those credits which enjoy preference
with respect to specific movables, exclude all others
to the extent of the value of the personal property to
which the preference refers.
Article 2248. Those credits which enjoy preference in
relation to specific real property or real rights, exclude
all others to the extent of the value of the immovable
or real right to which the preference refers.
Article 2250. The excess, if any, after the payment of
the credits which enjoy preference with respect to
specific property, real or personal, shall be added to
the free property which the debtor may have, for the
payment of the other credits. (1928a)
Republic v. Peralta, 150 SCRA 37 (1987)
In the voluntary proceedings of quality tobacco
corporation the claims of creditors included the union
members separation pay, claims of BIR and BOC. The
issues is whether or not the claims of the union
memebrs were preffered over the BIR and BOC. The
court held that the claism of BIR and BOC is preferred
since it is a special preferred credits listed in 2241 to
2242 which takes precedence over the claims of the
sep pay under 2244 despite the phrase in art 110 of
the LC in giving first preference to the claims of the
wokers any provision of the law nothwithstanding
since this only means that it only modified 2244 (a)
firstly, by removing the one year limitation found in
Article 2244, number 2; and (b) secondly, by moving
up claims for unpaid wages of laborers or workers of
the Insolvent from second priority to first priority in the
order of preference established I by Article 2244.
Manila Banking Corp. v. NLRC, 279 SCRA 602, 621-
642 (1997)
Facts: Manilabank was placed under comptrollership
by then Central Bank in view of the bank's financial
distress. It was placed on receivership who
immediately took charge of the bank's assets and
liabilities. He likewise terminated the employment of
about 343 officers and top managers of the bank. All
these officers and top managers, who are private
respondents herein, were paid whatever separation
and/or retirement benefits were due them. Private
respondents filed a complaint against Manilabank and
its statutory receiver with. the arbitration branch of the
National Labor Relations Commission (NLRC)
claiming entitlement to the following additional benefits
alleged to have accrued from 1984 to their effective
dates of termination.
Ruling: Court ruled that such claim to entitlement of
the foregoing benefits was based on Manilabank's
alleged practice, policy and tradition of awarding said
benefits. They contended that the policy has ripened
into vested property rights in their favor. By definition,
a "bonus" is a gratuity or act of liberality of the giver
which the recipient has no right to demand as a
matter of right. It is something given in addition to
what is ordinarily received by or strictly due the
recipient. The granting of a bonus is basically a
management prerogative which cannot be forced
upon the employer who may not be obliged to
assume the onerous burden of granting bonuses or
other benefits aside from the employee's basic
salaries or wages, especially so if it is incapable of
doing so. Clearly then, a bonus is an amount given
ex gratia to an employee by an employer on account
of success in business or realization of profits. How
then can an employer be made liable to pay
additional benefits in the nature of bonuses to its
employees when it has been operating on
considerable net losses for a given period of time.
6. Wage Recovery/Jurisdiction, Arts. 128, 129,
217, 111; Book III, Rule X, Secs. 1-5
ART. 128. Visitorial and Enforcement Power.
(a) The Secretary of Labor and Employment or his
duly authorized representatives, including labor
regulation officers, shall have access to or night
whenever work is being undertaken therein, and the
right to copy therefrom, to question any employee
and investigate any fact, condition or matter which
may be necessary to determine violations or which
may aid in the enforcement of this Code and of any
labor law, wage order or rules and regulations issued
pursuant thereto.
(b) Notwithstanding the provisions of Articles 129 and
21789 of this Code to the contrary, and in cases
where the relationship of employer-employee still
exists, the Secretary of Labor and Employment or his
duly authorized representatives shall have the power
to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor
legislation based on the findings of labor employment
and enforcement officers or industrial safety engineers
made in the course of inspection. The Secretary or
his duly authorized representatives shall issue writs of
execution to the appropriate authority for the
enforcement of their orders, except in cases where
the employer contests the findings of the labor
employment and enforcement officer and raises
issues supported by documentary proofs which were
not considered in the course of inspection. An order
issued by the duly authorized representative of the
Secretary of Labor and Employment under this Article
may be appealed to the latter. In case said order
involves a monetary award, an appeal by the
employer may be perfected only upon the posting of
a cash or surety bond issued by a reputable bonding
company duly accredited by the Secretary of Labor
and Employment in the amount equivalent to the
monetary award in the order appealed from.90
(c) The Secretary of Labor and Employment may
likewise order stoppage of work or suspension of
operations of any unit or department of an
establishment when non-compliance with the law or
implementing rules and regulations poses grave and
imminent danger to the health and safety of workers
in the workplace. Within twenty-four hours, a hearing
shall be conducted to determine whether an order for
the stoppage of work or suspension of operations
shall be lifted or not. In case the violation is attributable
to the fault of the employer, he shall pay the
employees concerned their salaries or wages during
the period of such stoppage of work or suspension
of operation.
(d) It shall be unlawful for any person or entity to
obstruct, impede, delay or otherwise render ineffective
the orders of the Secretary of Labor and Employment
or his duly authorized representatives issued pursuant
to the authority granted under this Article, and no
inferior court or entity shall issue temporary or
permanent injunction or restraining order or otherwise
assume jurisdiction over any case involving the
enforcement orders issued in accordance with this
Article.
(e) Any government employee found guilty of violation
of, or abuse of authority, under this Article shall, after
appropriate administrative investigation, be subject to
summary dismissal from the service.
(f) The Secretary of Labor and Employment may, by
appropriate regulations, require employers to keep
and maintain such employment records as may be
necessary in aid of his visitorial and enforcement
powers under this Code.
ART. 129. Recovery of Wages, Simple Money Claims
and Other Benefits. Upon complaint of any interested
party, the Regional Director of the Department of
Labor and Employment or any of the duly authorized
hearing officers of the Department is empowered,
through summary proceeding and after due notice, to
hear and decide any matter involving the recovery of
wages and other monetary claims and benefits,
including legal interest, owing to an employee or
person employed in domestic or household service
or househelper under this Code, arising from
employer-employee relations: Provided, That such
complaint does not include a claim for reinstatement:
Provided, further, That the aggregate money claims of
each employee or househelper do not exceed five
thousand pesos (P5,000.00). The Regional Director
or hearing officer shall decide or resolve the
complaint within thirty (30) calendar days from the
date of the filing of the same. Any sum thus recovered
on behalf of any employee or househelper pursuant
to this Article shall be held in a special deposit
account, and shall be paid, on order of the Secretary
of Labor and Employment or the Regional Director
directly to the employee or househelper concerned.
Any such sum not paid to the employee or
househelper, because he cannot be located after
diligent and reasonable effort to locate him within a
period of three (3) years, shall be held as a special
fund of the Department of Labor and Employment to
be used exclusively for the amelioration and benefit
of workers. Any decision or resolution of the Regional
Director or hearing officer pursuant to this provision
may be appealed on the same grounds provided in
Article 22392 of this Code, within five (5) calendar
days from receipt of a copy of said decision or
resolution, to the National Labor Relations
Commission which shall resolve the appeal within ten
(10) calendar days from the submission of the last
pleading required or allowed under its rules.
The Secretary of Labor and Employment or his duly
authorized representative may supervise the payment
of unpaid wages and other monetary claims and
benefits, including legal interest, found owing to any
employee or house helper under this Code.
Book III, Rule X, Secs. 1-5
SECTION 1. Visitorial power. — The Secretary of
Labor and Employment or his duly authorized
representatives, including Labor Regulations Officers
or Industrial Safety Engineers, shall have access to
employer's records and premises at any time of the
day or night whenever work is being undertaken
therein, and right to copy therefrom, to question any
employee, and to investigate any fact, condition or
matter relevant to the enforcement of any provision of
the Code and of any labor law, wage order or rules
and regulations issued pursuant thereto.
SECTION 2. Enforcement power. — (a) The Regional
Director in cases where employer relations shall exist,
shall have the power to order and administer, after
due notice and hearing, compliance with the labor
standards provisions of the Code and other labor
legislations based on the findings of the Labor
Regulation Officers or Industrial Safety Engineers
(Labor Standard and Welfare Officer) and made in the
course of inspection, and to issue writs of execution
to the appropriate authority of the enforcement of his
order. In line with the provisions of Article 128 in
relation to Articles 289 and 290 of the Labor Code
as amended in cases, however, where the employer
contests the findings of the Labor Standards and
Welfare Officers and raises issues which cannot be
resolved without considering evidentiary matters that
are not verifiable in the normal course of inspection,
the Regional Director concerned shall indorse the
case to the appropriate arbitration branch of the
National Labor Relations Commission for adjudication.
(b) The Regional Director shall give the employer
fifteen (15) days within which to comply with his order
before issuing a writ of execution. Copy of such order
or writ of execution shall immediately be furnished the
Secretary of Labor and Employment.
SECTION 3. Enforcement power on health and safety
of workers. — (a) The Regional Director may likewise
order stoppage of work or suspension of operations
of any unit or department of an establishment when
non-compliance with the law, safety order or
implementing rules and regulations poses grave and
imminent danger to the health and safety of workers
in the workplace. (b) Within 24 hours from issuance
of the order of stoppage or suspension, a hearing
shall be conducted to determine whether the order
for the stoppage of work or suspension of operation
shall be lifted or not. The proceedings shall be
terminated within seventy-two (72) hours and a copy
of such order or resolution shall be immediately
furnished the Secretary of Labor and Employment. In
case the violation is attributable to the fault of the
employer, he shall pay the employees concerned
their salaries or wages during the period of such
stoppage of work or suspension of operation.
SECTION 4. Power to review. — (a) The Secretary of
Labor and Employment, at his own initiative or upon
request of the employer and/or employee, may
review the order of the Regional Director. The order
of the Regional Director shall be immediately final and
executory unless stayed by the Secretary of Labor
and Employment upon posting by the employer of a
reasonable cash or surety bond as fixed by the
Regional Director. (b) In aid of his power of review,
the Secretary of Labor and Employment may direct
the Bureau of Working Conditions to evaluate the
findings or orders of the Regional Director. The
decision of the Secretary of Labor and Employment
shall be final and executory.
SECTION 5. Interference and injunctions prohibited. —
It shall be unlawful for any person or entity to obstruct,
impede, delay or otherwise render ineffective the
exercise of the enforcement power of the Secretary
of Labor and Employment, Regional Director or their
duly authorized representatives pursuant to the
authority granted by the Code and its implementing
rules and regulations, and no inferior court or entity
shall issue temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over
any case involving the enforcement orders issued in
accordance with the Code. In addition to the penalties
provided for by the Labor Code, any government
employees found guilty of violation or abuse of
authority, shall be subject to the provisions of
Presidential Decree No. 6.
Cirineo Bowling Plaza v. Gerry Sensing, supra
Meteoro, et al. v. Creative Creatures, Inc., 592 SCRA
481 (2009)
Facts: Petitioners filed complaints for non-payment of
night shift differential pay and other benefits. The
Regional Director, as duly-authorized-representative
of the DOLE Secretary conducted an inspection, and
later ruled for the petitioners. CA reversed this
decision, ruling that the RD had no jurisdiction.
Ruling: The court ruled that the visitorial powers of the
Secretary and his/her duly authorized rep are not
absolute. The elements of the exception under ART
128 are:
1) that the employer contests the findings of the labor
regulations officer and raises issues thereon;
2) that in order to resolve such issues, there is a need
to examine evidentiary matters; and
3) that such matters are not verifiable in the normal
course of inspection. In this particular case, the DOLE
was divested of jurisdiction because there were
evidentiary matters (concerning the employer-
employee relationship between the petitioners and
respondents) that were not verifiable in the course of
inspection
Cotabato Communications Corp. v. Hon. DOLE Sto.
Tomas, et al., G.R. No. 217575, 15 June 2016
Petitioner Corporation was found upon investigation
to be violating various labor standards. After summary
investigation, they were ordered by the Regional
Director to pay the 7 affected workers their Salary
th
Differential, underpayment of 13 month pay, 5 day
Service incentive leave, Rest Day premium and
Holiday Premium in the amount of 759, 752 pesos.
The ruling was affirmed by DOLE Sec. CA likewise
dismissed their petition on the grounds of being
unable to sign the verification and certification of non-
forum shopping as the president had signed it without
a board resolution. The SC held that there was
substantial compliance and CA should not have
dismissed the petition. Petition granted and case
remanded to CA.
I. Thirteenth Month Pay
References: PD No. 851; Revised Guidelines on
th
the Implementation of 13 Month Pay Law, 16 Nov.
1987, Secs. 1, 2, 3, 5, 6, 7, 8
1.! History of the Law
Dentech Mfg. Corp. v. NLRC, supra
History accdg to Dentech:
P.D. No. 851 was enacted in 1975 by Pres. Marcos
▪ Sec 1: all employers are required to pay all their
employees receiving a basic salary of not more than
P1,000.00 a month, regardless of the nature of their
employment, a 13th month pay not later than Dec. 24
of every year
▪ Sec 3 provides that financially distressed companies
can be exempted from P.D. No. 851 — however,
such companies must obtain the prior authorization of
the Secretary of Labor and Employment before they
may qualify for such exemption (Sec.7)
o P.D. No. 1364 (1978) was enacted enjoining the
DOLE to stop receiving applications for exemptions
under P.D. No. 851
o Memorandum Order No. 28 (1986), issued by Pres.
Corazon Aquino, modified Sec. 1 of P.D. No. 851
which eliminated the P1,000.00 salary ceiling
2. Coverage, PD No. 851, Secs. 1-2; Revised
th
Guidelines on the Implementation of 13 Month Pay
Law, 16 Nov. 1987, Secs. 1, 2, 3, 5, 6, 7, 8; P.D. No.
851, Secs. 1-2
PD No. 851, Secs. 1-2;
Section 1. All employers are hereby required to pay
all their employees receiving a basic salary of not
more than P1,000 a month, regardless of the nature
of their employment, a 13th-month pay not later
than December 24 of every year.
Section 2. Employers already paying their
employees a 13th-month pay or its equivalent are
not covered by this Decree.
th
Revised Guidelines on the Implementation of 13
Month Pay Law, 16 Nov. 1987, Secs. 1, 2, 3, 5, 6, 7,
8;
Sec. 1. Removal of Salary Ceiling. On August 13,
1986, President Corazon C. Aquino issued
Memorandum Order No. 28 which provides as
follows: Section 1 of Presidential Decree No. 851 is
hereby modified to the extent that all employers are
hereby required to pay all their rank-and-file
employees a 13th month pay not later than December
24 of every year." Before its modification by the
aforecited Memorandum Order, P.D. No. 851
excludes from entitlement to the 13th month pay
those employees who were receiving a basic salary
of more than P1,000.00 a month. With the removal of
the salary ceiling of P1,000.00, all rank and file
employees are now entitled to a 13th month pay
regardless of the amount of basic salary that they
receive in a month if their employers are not otherwise
exempted from the application of P.D. No. 851. Such
employees are entitled to the benefit regardless of
their designation or employment status, and
irrespective of the method by which their wages are
paid, provided that they have worked for at least one
(1) month during a calendar year.
Sec. 2. Exempted Employers. The following
employers are still not covered by P.D. No. 851: a.
The Government and any of its political subdivisions,
including government-owned and controlled
corporations, excepts those corporations operating
essentially as private subsidiaries of the Government;
b. Employers already paying their employees a 13th
month pay or more in a calendar year or its equivalent
at the time of this issuance; c. Employers of
household helpers and persons in the personal
service of another in relation to such workers; and d.
Employers of those who are paid on purely
commission, boundary, or task basis, and those who
are paid a fixed amount for performing specific work,
irrespective of the time consumed in the performance
thereof, except where the workers are paid on piece-
rate basis in which case the employer shall grant the
required 13th month pay to such workers. As used
herein, workers paid on piece-rate basis shall refer
to those who are paid a standard amount for every
piece or unit of work produced that is more or less
regularly replicated, without regard to the time spent
in producing the same. The term "its equivalent" as
used on paragraph (b) hereof shall include Christmas
bonus, mid-year bonus, cash bonuses and other
payments amounting to not less than 1/12 of the
basic salary but shall not include cash and stock
dividends, cost of living allowances and all other
allowances regularly enjoyed by the employee, as
well as non-monetary benefits. Where an employer
pays less than required 1/12th of the employees
basic salary, the employer shall pay the difference.
Sec. 3. Who are Rank-and File Employees. The Labor
Code distinguishes a rank-and-file employee from a
managerial employee. It provides that a managerial
employee is one who is vested with powers of
prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off,
recall discharge, assign or discipline employees, or
to effectively recommend such managerial actions. All
employees not falling within this definition are
considered rank-and-file employees. The above
distinction shall be used as guide for the purpose of
determining who are rank-and-file employees entitled
to the mandated 13th month pay.
Sec. 5. 13th Month Pay for Certain Types of
Employees. (a) Employees Paid by Results. —
Employees who are paid on piece work basis are by
law entitled to the 13th month pay. Employees who
are paid a fixed or guaranteed wage plus commission
are also entitled to the mandated 13th month pay,
based on their total earnings during the calendar year,
i.e., on both their fixed or guaranteed wage and
commission. (b) Those with Multiple Employers. —
Government employees working part time in a private
enterprise, including private educational institutions, as
well as employees working in two or more private
firms, whether on full or part time basis, are entitled
to the required 13th month pay from all their private
employers regardless of their total earnings from each
or all their employers. (c) Private School Teachers. —
Private school teachers, including faculty members of
universities and colleges, are entitled to the required
13th month pay, regardless of the number of months
they teach or are paid within a year, if they have
rendered service for at least one (1) month within a
year.
Sec. 6. 13th Month Pay of Resigned or Separated
Employee. An employee who has resigned or whose
services were terminated at any time before the time
for payment of the 13th month pay is entitled to this
monetary benefit in proportion to the length of time
he worked during the year, reckoned from the time
he started working during the calendar year up to the
time of his resignation or termination from the service.
Thus, if he worked only from January up to
September his proportionate 13th month pay should
be equivalent of 1/12 his total basic salary he earned
during that period. The payment of the 13th month
pay may be demanded by the employee upon the
cessation of employer-employee relationship. This is
consistent with the principle of equity that as the
employer can require the employee to clear himself
of all liabilities and property accountability, so can the
employee demand the payment of all benefits due
him upon the termination of the relationship.
Sec. 7. Non-inclusion in Regular Wage. The
mandated 13th month pay need not be credited as
part of regular wage of employees for purposes of
determining overtime and premium pays, fringe
benefits insurance fund, Social Security, Medicare and
private retirement plans.
Sec. 8. Prohibitions against reduction or elimination of
benefits. Nothing herein shall be construed to
authorize any employer to eliminate, or diminish in
any way, supplements, or other employee benefits or
favorable practice being enjoyed by the employee at
the time of promulgation of this issuance.
Archilles Manufacturing Corp. v, NLRC, 244 SCRA 750
(1995)
Respondents were dismissed for violating an order
from their employer. The issue is whether or not their
dismissal, which was for valid cause, also means the
th
forfeiture of their 13 month pay.
Supreme Court held that (a)n employee who has
resigned or whose services were terminated at any
th
time before the payment of the 13 month pay is
entitled to this monetary benefit in proportion to the
length of time he worked during the year.
Ultra Villa Food Haus v. Geniston, 309 SCRA 17
(1999)
Geniston missed two days of work to be a poll
watcher in the 1992 elections. For this, he was
dismissed by petitioner Rosie Tio. The Court rules
th
that, despite the exemption from the 13 month pay
as laid down in Art. 82 of the Labor Code and P.D.
th
No. 851, respondent should be awarded his 13
month pay in view of petitioner’s practice of according
benefits.
3. Rationale, PD No. 851, Whereas
Clauses and LImitations
REQUIRING ALL EMPLOYERS TO PAY THEIR
EMPLOYEES A 13th-MONTH PAY
WHEREAS, it is necessary to further protect the level
of real wages from the ravage of worldwide inflation;
WHEREAS, there has been no increase in the legal
minimum wage rates since 1970;
WHEREAS, the Christmas season is an opportune
time for society to show its concern for the plight of
the working masses so they may properly celebrate
Christmas and New Year.
4. Amount and Date of Payment, Revised
th
Guidelines on the Implementation of the 13 Month
Pay Law
a.! Basic Wage/Commissions, Sec. 4
PD 851, Sec. 4
Section 4. Employees covered Except as provided in
Section 3 of this issuance, all employees of covered
employers shall be entitled to benefit provided under
the Decree who are receiving not more than P1,000
a month, regardless of their position, designation or
employment status, and irrespective of the method by
which their wages are paid, provided that they have
worked for at least one month during the calendar
year.
Boie Takeda v. Dela Serna, supra
Iran v. NLRC, supra
Intercontinental Broadcasting Corporation v.
Panganiban, 514 SCRA 8404 (2007)
Summary: Panganiban was suspended and had
money claims which he filed an action for but were
dismissed as they were filed with an RTC instead of
with a Labor Arbiter. He was then offered a new
position by petitioner, took it, but resigned after a
while. He then files an action for the money claims
he had previously, which the LA and CA granted. On
appeal, petitioner argued that his action had already
prescribed. The Court ruled in favor of petitioner,
saying that the previous action did not stop the
running of the 3-year prescriptive period as it was
dismissed due to lack of jurisdiction.
Discussion: Under Art. 291 of the Labor Code, all
money claims must be filed within 3 years from when
the cause of action accrues, else they are barred.
In addition, Art. 217 of the same code provides for
jurisdiction of labor courts over money claims arising
from employer-employee relations.
How can one interrupt said prescription? Article
1155 of the NCC states that prescription of actions
are interrupted by (1) filing of an action, (2) a written
extrajudicial demand by the creditor, or (3) a written
acknowledgment of debt.
In the current case, Panganiban’s claims had
already prescribed despite the filing of an action,
because (1) he failed to file it in the proper court and
said action was subsequently dismissed due to lack
of jurisdiction and (2) the written acknowledgement
by petitioner regarding debt to Panganiban refers to
a different amount AND it was made well beyond the
date when Panganiban’s claimed expired.
• Panganiban resigned in Sep. 1988, and filed the
first action in Apr. 1989 (5 months, 10 days)
• Dismissal of first action was in Oct. 1991 and so
prescription started to run again.
• The acknowledgment of debt was made in Jan.
1993 (1 year and 3 months).
• Effectively, only a total of 1 year, 8 months, 10 days
had only elapsed from when his right accrued.
• BUT as the court held, actions that were filed and
then abandoned by the plaintiff or dismissed leave
the parties in the same position as if no action has
been commenced at all (thus, there is no stoppage
in prescription)
• Since the first action did not stop prescription, his
claim had already prescribed on Sep. 1991.
b.! Substitute Payment, Sec. 2
Section 2. Employers already paying their employees
a 13th-month pay or its equivalent are not covered
by this Decree.
Framanlis Farms, Inc. v. NLRC, 171 SCRA 87 (1989)
th
Employees filed for 13 month pay, among others.
Court ruled that under PD 581, employers already
paying their employees a 13th month pay “or its
equivalent” are exempted from its coverage. This
“equivalent” does not include cash and stock
dividends, cost of living allowances and all other
allowances regularly enjoyed by the employee, as
well as non-monetary benefits. In the case at bar,
benefits in the form of food or free electricity allegedly
given by the petitioners to their employees, were not
a proper substitutes for the 13th month pay required
by law.
th
c. 14 Month Pay
Kamaya Port Hotel v. NLRC, 177 SCRA 160 (1989)
th
From 1979 to 1981, petitioner has been granting 14
month pay to private respondent- employees. The
basis was the profitability of its business.
However, when petitioner suffered business loss, it
th
did not give out the 14 month pay for the year 1982.
Petitioner finally closed business in 1984.
th
The NLRC ruled that petitioner should pay the 14
month pay to its employees.
B
ut the Court rules in favor of petitioner. Because of
(1) inapplicability of Art 100 of the Labor Code
th
(2) the lack of a law mandating the 14 month pay,
(3) lack of provision in the Collective Bargaining
th
Agreement for a 14 month pay, and the
(4) gratuitous nature, petitioner cannot be compelled
th
to pay the 14 month pay, and private respondents
do not have the right to demand it.
d. Diminution
Davao Fruits Corp. v. Associated Labor Unions, supra
Doctrine: A company practice favorable to the
employees had indeed been established and the
payments made pursuant thereto, ripened into
benefits enjoyed by them. And any benefit and
supplement being enjoyed by the employees cannot
be reduced, diminished, discontinued or eliminated
by the employer.
5. Exempt from Income Tax up to P82,000, RA 10653
TH
(AN ACT ADJUSTING THE 13 MONTH PAY AND
OTHER BENEFITS CEILING EXCLUDED FROM THE
COMPUTATION OF GROSS INCOME FOR PURPOSES
OF INCOME TAXATION, AMENDING FOR THE
PURPOSE SECTION 32(B), CHAPTER VI OF THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED), Sec. 1
SECTION 1. Section 32(B), Chapter VI of the National
Internal Revenue Code of the Philippines (Republic
Act No. 8424) is hereby amended as follows:
“SEC. 32. Gross Income. —
“x x x
“(B) Exclusions from Gross Income. — The following
items shall not be included in gross income and shall
be exempt from taxation under this Title:
“xxx
“(7) Miscellaneous Items. — “xxx
th
“(e) 13 Month Pay and Other Benefits. — Gross
benefits received by officials and employees of public
and private entities: Provided, however, That the total
exclusion under this subparagraph shall not exceed
eighty-two thousand pesos (P82,000) which shall
cover:
“xxx
“(iv) Other benefits such as productivity incentives and
Christmas bonus: Provided, That every three (3) years
after the effectivity of this Act, the President of the
Philippines shall adjust the amount herein stated to its
present value using the Consumer Price Index (CPI),
as published by the National Statistics Office (NSO).”
J. Bonus
1. Nature
Philippine Duplicators Inc. v. NLRC, supra
The Court distinguishes between sales commissions
and productivity bonuses. Sales commissions are
paid upon the specific results achieved/actual sales
made by a salesperson and are part of the
salesperson's basic pay. On the other hand,
productivity bonuses are generally tied to the profit
generation of the employer corporation and not
directly dependent on the extent an individual
employee exerts himself. Bonuses constitute an act of
generosity on the part of the employer and are not
legally demandable absent a contractual undertaking
to pay it.
Additional payments made to employees, to the
extent they partake of the nature of profit-sharing
payments, are properly excluded from the ambit of
the term "basic salary" for purposes of computing the
13th month pay due to employees. Such additional
payments are not "commissions" within the meaning
of the second paragraph of Section 5 (a) of the
Revised Guidelines Implementing 13th Month Pay.
2. Definition; When Demandable
Philippine Appliance Corp. v. Court of Appeals, 430
SCRA 525 (2004)
PHILACOR and Union started collective bargaining
negotiations. PHILACOR offered P4,000.00 to each
employee as an early conclusion bonus. Union
expressed dissatisfaction at the outcome of the
negotiations and declared a deadlock. They went on
strike. DOLE had to intervene. Main issue is WON the
Caltex Doctrine applies in this case. Court held YES.
The award for a signing bonus should partake the
nature of an incentive and premium for peaceful
negotiations and amicable resolution of disputes
which apparently are not present in the instant
case. Assigning bonus may not be demanded as a
matter of right. If it is not agreed upon by the parties
or unilaterally offered as an additional incentive, the
condition for awarding it must be duly satisfied. 2
things militate against the grant of the signing
bonus: 1) non-fulfillment of the condition for which it
was offered, 2) failure of respondent union to prove
that the grant of the said bonus is a long established
tradition or a regular practice on the part of petitioner.
Eastern Telecommunications Phil. Inc. v. Eastern
Telecoms Employees Union, 665 SCRA 516 (2012)
ETEU filed a complaint against petitioner company
ETPI for unfair labor practices when ETPI deferred
th th th
payment of 14 , 15 , and 16 month bonuses,
stating that they are entitled to this bonus as agreed
upon in the Side Agreement in the CBA, and that this
practice has ripened into a long-standing company
practice not subject to unilateral withdrawal by ETPI.
ETPI counters that bonuses have not become legally
demandable because it has been agreed to by the
parties that the bonuses are subject to the relative
financial shape of the company and its exercise of
management prerogative. The Court agrees with
ETEU totally.
K. Working Conditions for Special Group of Workers
1)! Women
a.! Equality: Formal Equality vs. Substantive
Equality
Prof. Battad says:
•! Formal Equality- no special
accommodations that substantive equality
would want
-would look at similarities
•! Substantive Equality- tbere are
differences (Biological and Socially
Constructed)
b.! Women under the Constitution
Article II
Section 14. The State recognizes the role of
women in nation building and shall ensure the
fundamental equality before the law of women
and men.
Article XIII Section 14
WOMEN
Section 14. The State shall protect working
women by providing safe and healthful working
conditions, taking into account their maternal
functions, and such facilities and opportunities that
will enhance their welfare and enable them to
realize their full potential in the service of the
nation.
RA 9710
Magna Carta for Women
Section 2. Declaration of Policy. - Recognizing
that the economic, political, and sociocultural
realities affect women's current condition, the
State affirms the role of women in nation building
and ensures the substantive equality of women
and men. It shall promote empowerment of
women and pursue equal opportunities for
women and men and ensure equal access to
resources and to development results and
outcome. Further, the State realizes that equality
of men and women entails the abolition of the
unequal structures and practices that perpetuate
discrimination and inequality. To realize this, the
State shall endeavor to develop plans, policies,
programs, measures, and mechanisms to address
discrimination and inequality in the economic,
political, social, and cultural life of women and
men.
Section 12. Equal Treatment Before the Law. -The
State shall take steps to review and, when
necessary, amend and/or repeal existing laws
that are discriminatory to women within three (3)
real years from the effectivity of this Act.
Philippine Association of Service Exporters v. Drilon,
163 SCRA 386 (1988)
Summary: PASEI is assailing the constitutionality of
DO No.1, s. 1988 which makes suspensions on
deployment of Filipina domestic workers to certain
countries. According to petitioner, the DO is not a
valid exercise of the DOLE’s power since it
discriminates against males and females that aren’t
domestic workers. Furthermore, said DO is
allegedly violative of the right to travel, proper
delegation of legislative authority, right of the labor
force to participate in decision-making, and non-
impairment clause.

Ruling:
1. There is valid classification because 1) there is
substantial distinction between female domestic
workers and male workers overseas in that women
tend to experience more abuse and exploitation 2)
ban on deployment is germane to the aim of
protecting women and enhancing their welfare 3)
it is intended to apply indefinitely so long as those
conditions exist and 4) applies to all Filipina
domestic workers (not ALL FILIPINA WORKERS,
because applying it indiscriminately would defeat
its purpose; it would be unreasonable given that
they’re not similarly situated.
2. No impairment on right to travel because right
to travel is not absolute.
3. Not an invalid exercise legislation since this
power can be duly delgated, as was done in this
case via the Labor Code
4. Laborers’ right to participate in decision making
must submit to the demands and necessities of the
State's power of regulation.
5. Does not violate non-impairment clause
because the non-impairment clause must yield to
the loftier purposes targeted by the Government.
c.! Coverage, Rule XII, Sec. I
RULE XII
Employment of Women and Minors
SECTION 1. General statement on coverage. —
This Rule shall apply to all employers, whether
operating for profit or not, including educational,
religious and charitable institutions, except to the
Government and to government-owned or
controlled corporations and to employers of
household helpers and persons in their personal
service insofar as such workers are concerned.
d.! Night Work/Exception,
ILO Convention 89 Night Work (Women)
Convention (Revised), 1948
PART I. GENERAL PROVISIONS
Article 1
1. For the purpose of this Convention, the term
industrial undertakings includes particularly:
(a) mines, quarries, and other works for the
extraction of minerals from the earth;
(b) undertakings in which articles are
manufactured, altered, cleaned, repaired,
ornamented, finished, adapted for sale, broken up
or demolished, or in which materials are
transformed, including undertakings engaged in
ship-building or in the generation, transformation
or transmission of electricity or motive power of
any kind;
(c) undertakings engaged in building and civil
engineering work, including constructional, repair,
maintenance, alteration and demolition work.
2. The competent authority shall define the line of
division which separates industry from agriculture,
commerce and other non-industrial occupations.
Article 2
For the purpose of this Convention the term night
signifies a period of at least eleven consecutive
hours, including an interval prescribed by the
competent authority of at least seven consecutive
hours falling between ten o'clock in the evening
and seven o'clock in the morning; the competent
authority may prescribe different intervals for
different areas, industries, undertakings or
branches of industries or undertakings, but shall
consult the employers' and workers' organisations
concerned before prescribing an interval
beginning after eleven o'clock in the evening.
Article 3
Women without distinction of age shall not be
employed during the night in any public or private
industrial undertaking, or in any branch thereof,
other than an undertaking in which only members
of the same family are employed.
Article 4
Article 3 shall not apply:
(a) in cases of force majeure, when in any
undertaking there occurs an interruption of work
which it was impossible to foresee, and which is
not of a recurring character;
(b) in cases where the work has to do with raw
materials or materials in course of treatment
which are subject to rapid deterioration when
such night work is necessary to preserve the said
materials from certain loss.
Article 5
1. The prohibition of night work for women may
be suspended by the government, after
consultation with the employers' and workers'
organisations concerned, when in case of serious
emergency the national interest demands it.
2. Such suspension shall be notified by the
government concerned to the Director-General of
the International Labour Office in its annual report
on the application of the Convention.
Article 6
In industrial undertakings which are influenced by
the seasons and in all cases where exceptional
circumstances demand it, the night period may
be reduced to ten hours on sixty days of the
year.
Article 7
In countries where the climate renders work by
day particularly trying, the night period may be
shorter than that prescribed in the above articles if
compensatory rest is accorded during the day.
Chapter V
Employment of Night Workers
Article 154. Coverage. - This chapter' shall apply
to all persons, who shall be employed or
permitted or suffered to work at night, except
those employed in agriculture, stock raising,
fishing, maritime transport and inland navigation,
during a period of not less than seven (7)
consecutive hours, including the interval from
midnight to five o'clock in the morning, to be
determined by the Secretary of Labor and
Employment, after consulting the workers'
representatives/labor organizations and
employers.
Night worker' means any employed person
whose work requires performance of a substantial
number of hours of night work which exceeds a
specified limit. This limit shall be fixed by the
Secretary of Labor after consulting the workers'
representatives/labor organizations and
employers."
Article 158. Women Night Workers. - Measures
shall be taken to ensure that an alternative to
night work is available to women workers who
would otherwise be called upon to perform such
work:
(a) Before and after childbirth, for a period of at
least sixteen (16) weeks, which shall be divided
between the time before and after childbirth;
(b) For additional periods, in respect of winch a
medical certificate IS produced stating that said
additional periods are necessary for the health of
the mother or child:
(1) During pregnancy;
(2) During a specified time beyond the period,
after childbirth is fixed pursuant to subparagraph
(a) above, the length of which shall be
determined by the DOLE after consulting the labor
organizations and employers.
During the periods referred to in this article:
(i) A woman worker shall not be dismissed or
given notice of dismissal, except for just or
authorized causes provided for in this Code that
are not connected with pregnancy, childbirth and
childcare responsibilities.
(ii) A woman worker shall not lose the benefits
regarding her status, seniority, and access to
promotion which may attach to her regular night
work position.
Pregnant women and nursing mothers may be
allowed to work .at night only if a competent
physician, other than the company physician, shall
certify their fitness to render night work, and
specify, in the case of pregnant employees, the
period of the pregnancy that they can safely
work.

The measures referred to in this article may
include transfer to day work where this is
possible, the provision of social security benefits
or an extension of maternity leave.
The provisions of this article shall not leave the
effect of reducing the protection and benefits
connected with maternity leave under existing
laws.
DA No. 4, series of 2010
B. Exemption from the Nightwork Prohibition of
Article 130 for Women Employees Under Article
130 of the Labor Code, as amended
Women employees may be allowed to work
during night time in accordance with Article 131
of the Labor Code, subject to the limitation that
the female employees not be below eighteen
(18) years of age.
Employers are likewise required, among others, to
provide safe and healthful working conditions,
and adequate/reasonable facilities such as
sleeping/resting quarters in the establishment.
Pregnant women and nursing mothers may be
allowed to work at night only if a competent
physician, other than the company physician, shall
certify their fitness to render night work, and
specify, in the case of pregnant employees, the
period that they can safely work.
e.! Prohibited Acts
1. Discrimination
ILO Convention 100 (1948)
ILO Convention 111 (1958)
Convention on the Elimination of All Forms of
Discrimination Against Women (CEDAW)
ARTICLE 11
1. States Parties shall take all appropriate
measures to eliminate discrimination against
women in the field of employment in order to
ensure, on a basis of equality of men and
women, the same rights, in particular:
(a) The right to work as an inalienable right of all
human beings;
(b) The right to the same employment
opportunities, including the application of the
same criteria for selection in matters of
employment;
(c) The right to free choice of profession and
employment, the right to promotion, job security
and all benefits and conditions of service and the
right to receive vocational training and retraining,
including apprenticeships, advanced vocational
training and recurrent training;
(d) The right to equal remuneration, including
benefits, and to equal treatment in respect of
work of equal value, as well as equality of
treatment in the evaluation of the quality of work;
(e) The right to social security, particularly in
cases of retirement, unemployment, sickness,
invalidity and old age and other incapacity to
work, as well as the right to paid leave;
(f) The right to protection of health and to safety
in working conditions, including the safeguarding
of the function of reproduction.
2. In order to prevent discrimination against
women on the grounds of marriage or maternity
and to ensure their effective right to work, States
Parties shall take appropriate measures:
(a) To prohibit, subject to the imposition of
sanctions, dismissal on the grounds of pregnancy
or of maternity leave and discrimination in
dismissals on the basis of marital status;
(b) To introduce maternity leave with pay or with
comparable social benefits without loss of former
employment, seniority or social allowances;
(c) To encourage the provision of the necessary
supporting social services to enable parents to
combine family obligations with work
responsibilities and participation in public life, in
particular through promoting the establishment
and development of a network of child-care
facilities;
(d) To provide special protection to women
during pregnancy in types of work proved to be
harmful to them.
3. Protective legislation relating to matters covered
in this article shall be reviewed periodically in the
light of scientific and technological knowledge and
shall be revised, repealed or extended as
necessary
Article 133. Discrimination Prohibited.- It shall be
unlawful for any employer to discriminate against
any woman employee with respect to terms and
conditions of employment solely on account of
her sex.
The following are acts of discrimination:
(a) Payment of a lesser compensation, including
wage, salary or other form of remuneration and
fringe benefits, to a female employee as against a
male employee, for work of equal value; and
(b) Favoring a male employee over a female
employee with respect to promotion, training
opportunities, study and scholarship grants solely
on account of their sexes.
Criminal liability for the willful commission of any
unlawful act as provided in this Article or any
violation of the rules and regulations issued
pursuant to Section 2 hereof shall be penalized
as provided in Articles 288 and 289 of this
Code: Provided, That the institution of any criminal
action under this provision shall not bar the
aggrieved employee from filing an entirely
separate and distinct action for money claims,
which may include claims for damages and other
affirmative reliefs. The actions hereby authorized
shall proceed independently of each other.
(As amended by Republic Act No. 6725, May 12,
1989).
RA No. 9710, Secs. 2, par. 2 & 12
Section 2. (par 2) 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.
Section 12. Equal Treatment Before the Law. ­
The State shall take steps to review and, when
necessary, amend and/or repeal existing laws
that are discriminatory to women within three (3)
years from the effectivity of this Act.
2. Stipulation Against Marriage
Article 134. 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 women 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.
Phil. Telegraph and Telephone Co. v. NLRC, supra
Duncan Association of Detailman-PTGWO v. Glaxo
Wellcome Philippines, Inc., 438 SCRA 343 (2004)
Pedro was hired as a medical representative of
Glaxo Wellcome Philippines. He signed a contract
of employment which stipulates, among others, that
he agrees to study and abide by existing company
rules; to disclose to management any existing or
future relationship by consanguinity or affinity with
co-employees or employees of competing drug
companies and should management find that such
relationship poses a possible conflict of interest, to
resign from the company. Despite this, Pedro
married Bettsy, an employee of its rival company,
Astra Pharmeceuticals. Petitioner assails said
company policy by invoking the equal protection
clause and claiming that he was constructively
dismissed. The Court held Glaxo’s policy as a valid
exercise of management prerogative. Glaxo has a
right to guard its trade secrets, manufacturing
formulas, marketing strategies and other
confidential programs and information from
competitors. The Constitution recognizes the right
of enterprises to adopt and enforce such a policy
to protect its right to reasonable returns on
investments and to expansion and growth. The law
recognizes that management has rights which are
also entitled to respect and enforcement in the
interest of fair play. It also ruled that petitioner was
not constructively dismissed. None of the
conditions of contructive dismissal are present.
Glaxo properly exercised its management
prerogative in reassigning Tecson to the Butuan
City sales area — the proximity of Tecson and his
wife’s areas of responsibility, all in the same Bicol
Region, renders the conflict of interest not only
possible, but actual, as learning by one spouse of
the other’s market strategies in the region would
be inevitable.
Star Paper Corporation, et al. v. Simbol, et al., 487
SCRA 228 (2006)
Respondents married their co-employees. They
resigned because of Star Paper’s policy that should
two of its employees decide to get married, one of
them should resign.
The Court ruled that reasonableness must be
clearly established to uphold the questioned
employment policy. The employer has the burden
to prove the existence of a reasonable business
necessity.
There is no reasonable necessity in this case
because petitioners’ failed to show how the
marriage of its employee to a co-employee could
be detrimental to its business operations. Their only
reason is that marriage of its employees would
result in efficiency.
Capin-Cadiz v. Brent Hospital and Colleges, Inc. G.R.
No. 187417, 24 February 2016
Petitioner got pregnant out of wedlock. For this, she
was indefinitely suspended by the Respondent until
she marries he boyfriend. The court ruled that she
had been illegally dismissed and that this condition
is discriminatory. Republic Act No. 9710 or the
Magna Carta of Women protects women against
discrimination in all matters relating to marriage and
family relations, including the right to choose freely
a spouse and to enter into marriage only with their
free and full consent.
3. Discharge to Prevent Employment of Benefits, Art.
135 (1)
4. Discharge on Account of Pregnancy or Fear of
Getting Pregnant, Art. 135 (2), (3)
Article 135. Prohibited Acts.- It shall be unlawful
for any employer:
(1) To deny any woman employee the benefits
provided for in this Chapter or to discharge any
woman employed by him for the purpose of
preventing her from enjoying any of the benefits
provided under this Code;
(2) To discharge such woman on account of her
pregnancy, or while on leave or in confinement
due to her pregnancy;
(3) To discharge or refuse the admission of such
woman upon returning to her work for fear that
she may again be pregnant.
5. Discharge on Account of Testimony, Rule XII, Sec.
13 (d)
Rule XII
SECTION 13. Prohibited acts. — It shall be
unlawful for any employer:
(a) To discharge any woman employed by him
for the purpose of preventing such woman from
enjoying the maternity leave, facilities and other
 benefits provided under the Code; account of her having contracted pregnancy
outside of marriage during her term in school.
(b) To discharge such woman employee on
account of her pregnancy, or while on leave or in
confinement due to her pregnancy; f.! Facilities and Safe Working Conditions

(c) To discharge or refuse the admission of such
woman upon returning to her work for fear that
she may be pregnant;
(d) To discharge any woman or child or any other
employee for having filed a complaint or having
testified or being about to testify under the Code;
and
(e) To require as a condition for a 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.
ART. 132. Facilities for women. - The Secretary of
Labor and Employment shall establish standards
that will ensure the safety and health of women
employees. In appropriate cases, he shall, by
regulations, require any employer to:
(a) Provide seats proper for women and permit
them to use such seats when they are free from
work and during working hours, provided they
can perform their duties in this position without
detriment to efficiency;
(b) To establish separate toilet rooms and
lavatories for men and women and provide at
least a dressing room for women;
(c) To establish a nursery in a workplace for the
benefit of the women employees therein; and

6. Expulsion of Women Faculty Due to Pregnancy

(d) To determine appropriate minimum age and
Outside of Marriage, RA No. 9710, Sec. 13 (c)
other standards for retirement or termination in
special occupations such as those of flight
RA 9710
attendants and the like.
Section 13. Equal Access and Elimination of
Discrimination in Education, Scholarships, and
Rule XII
Training. -(a) The State shall ensure that gender
SECTION 14. Facilities for woman employees. —
stereotypes and images in educational materials
Subject to the approval of the Secretary of Labor
and curricula are adequately and appropriately
and Employment, the Bureau of Women and
revised. Gender-sensitive language shall be used
Young Workers shall, within thirty (30) days from
at all times. Capacity-building on gender and
the effective date of these Rules, determine in an
development (GAD), peace and human rights,
appropriate issuance the work situations for which
education for teachers, and all those involved in
the facilities enumerated in Article 131 of the
the education sector shall be pursued toward this
Code shall be provided, as well as the
end. Partnerships between and among players of
appropriate minimum age and other standards for
the education sector, including the private sector,
retirement or termination of employment in special
churches, and faith groups shall be encouraged.
occupations in which women are employed.
(b) Enrollment of women in nontraditional skills
training in vocational and tertiary levels shall be
RA 9710 (Magna Carta)
encouraged.
Section 22. Right to Decent Work. - The State
(c) Expulsion and non-readmission of women
shall progressively realize and ensure decent
faculty due to pregnant; outside of marriage shall
work standards for women that involve the
be outlawed. No school shall turn out or refuse
creation of jobs of acceptable quality in
admission to a female student solely on the
conditions of freedom, equity, security, and
human dignity.
(a) Decent work involves opportunities for work
that are productive and fairly remunerative as
family living wage, security in the workplace, and
social protection for families, better prospects for
personal development and social integration,
freedom for people to express their concerns
organize, participate in the decisions that affect
their lives, and equality of opportunity and
treatment for all women and men.
(b) The State shall further ensure:
(1) Support services and gears to protect them
from occupational and health hazards taking into
account women's maternal functions;
(2) Support services that will enable women to
balance their family obligations and work
responsibilities including, but not limited to, the
establishment of day care centers and
breastfeeding stations at the workplace, and
providing maternity leave pursuant to the Labor
Code and other pertinent laws;
(3) Membership in unions regardless of status of
employment and place of employment; and
(4) Respect for the observance of indigenous
peoples' cultural practices even in the workplace.
(c) In recognition of the temporary nature of
overseas work, the State shall exert all efforts to
address the causes of out-migration by
developing local employment and other economic
opportunities for women and by introducing
measures to curb violence and forced and
involuntary displacement of local women. The
State shall ensure the protection and promotion of
the rights and welfare of migrant women
regardless of their work status, and protect them
against discrimination in wages, conditions of
work, and employment opportunities in host
countries.
RA 10028 (Expanded Breastfeeding Promotion
Act of 2009)
Section 5. Section 10 of Republic Act No. 7600 is
hereby amended to read as follows:
Sec. 10. Provision of Facilities for
Breastmilk Collection and Storage for
Health Institutions. -The health institution
adopting roomingin and breastfeeding
shall provide equipment, facilities, and
supplies for breastmilk collection, storage
and utilization, the standards of which
shall be defined by the Department of
Health. Health institutions are likewise
encouraged to set up milk banks for
storage of breastmilk donated by
mothers and which have undergone
pasteurization. The stored breastmilk will
primarily be given to children in the
neonatal intensive care unit whose own
mothers are seriously ill.
Section 6. A new Section 11, under a new
Chapter, is added to read as follows: CHAPTER III
Lactation Stations
Sec. 11. Establishment of Lactation
Stations. - It is hereby mandated that all
health and non-health facilities,
establishments or institutions shall
establish lactation stations. The lactation
stations shall be adequately provided
with the necessary equipment and
facilities, such as: lavatory for hand-
washing, unless there is an easily-
accessible lavatory nearby; refrigeration
or appropriate cooling facilities for storing
expressed breastmilk; electrical outlets
for breast pumps; a small table;
comfortable seats; and other items, the
standards of which shall be defined by
the Department of Health. The lactation
station shall not be located in the toilet.
In addition, all health and non-health
facilities, establishments or institutions
shall take strict measures to prevent any
direct or indirect form of promotion,
marketing, and/or sales of infant formula
and/or breastmilk substitutes within the
lactation stations, or in any event or
circumstances which may be conducive
to the same.
Apart from the said minimum
requirements, all health and non-health
facilities, establishments or institutions
may provide other suitable facilities or
 services within the lactation station, all of
which, upon due substantiation, shall be
considered eligible for purposes of
Section 14 of this Act.
Section 7. A new Section 12 is hereby added to
read as follows:
Sec. 12. Lactation Periods. - Nursing
employees shall granted break intervals
in addition to the regular time-off for
meals to breastfeed or express milk.
These intervals, which shall include the
time it takes an employee to get to and
from the workplace lactation station, shall
be counted as compensable hours
worked. The Department of Labor and
Employment (DOLE) may adjust the
same: Provided, That such intervals shall
not be less than a total of forty (40)
minutes for every eight (8)-hour working
period.
DO 143-15 (Guidelines Governing Exemption of
Establishments from Setting Up Workplace
Lactation Stations)
(https://www.dole.gov.ph/files/DO%20143-
15%20Guidelines%20Governing%20Exemption%
20of%20Establishments%20from%20setting%20i
p%20Workplace%20Lactation%20Stations%20(1)
(1).pdf)
g.! Family Planning Services,
Art. 132. Family Planning Services; Incentives for
Family Plannins—(a) Establishments which are
required by law to maintain a clinic or infirmary
shall provide free family planning services to their
employees which shall include, but not be limited
to, the application or use of contraceptive pills
and intrauterine devices.
(b) In coordination with other agencies of the
government engaged in the promotion of family
planning, the Department of Labor and
Employment shall develop and prescribe incentive
bonus schemes to encourage family planning
among female workers in any establishment or
enterprise.
Rule XII
SECTION 11. Family planning services. —
Employers who habitually employ more than two
hundred (200) workers in any locality shall
provide free family-planning services to their
employees and their spouses which shall include
but not limited to, the application or use of
contraceptives.
Subject to the approval of the Secretary of Labor
and Employment, the Bureau of Women and
Young Workers shall, within thirty (30) days from
the effective date of these Rules, prescribe the
minimum requirements of family planning services
to be given by employers to their employees.
RA 9710 (Magna Carta)
Section 17. Women's Right to Health. –
(a) Comprehensive Health Services. The State
shall, at all times, provide for a comprehensive,
culture-sensitive, and gender-responsive health
services and programs covering all stages of a
woman's life cycle and which addresses the
major causes of women's mortality and morbidity:
Provided, That in the provision for comprehensive
health services, due respect shall be accorded to
women's religious convictions, the rights of the
spouses to found a family in accordance with
their religious convictions, and the demands of
responsible parenthood, and the right of women
to protection from hazardous drugs, devices,
interventions, and substances.
Access to the following services shall be ensured:
(1) Maternal care to include pre- and post-natal
services to address pregnancy and infant health
and nutrition;
(2) Promotion of breastfeeding;
(3) Responsible, ethical, legal, safe, and effective
methods of family planning;
(4) Family and State collaboration in youth
sexuality education and health services without
prejudice to the primary right and duty of parents
to educate their children;
(5) Prevention and management of reproductive from occupational and health hazards taking into
tract infections, including sexually transmitted account women's maternal functions;
diseases, HIV, and AIDS;
(6) Prevention and management of reproductive (2) Support services that will enable women to
tract cancers like breast and cervical cancers, and balance their family obligations and work
other gynecological conditions and disorders; responsibilities including, but not limited to, the
(7) Prevention of abortion and management of establishment of day care centers and breast-
pregnancy-related complications; feeding stations at the workplace, and providing
(8) In cases of violence against women and maternity leave pursuant to the Labor Code and
children, women and children victims and other pertinent laws;
survivors shall be provided with comprehensive
health services that include psychosocial, (3) Membership in unions regardless of status of
therapeutic, medical, and legal interventions and employment and place of employment; and
assistance towards healing, recovery, and
empowerment; (4) Respect for the observance of indigenous
(9) Prevention and management of infertility and peoples' cultural practices even in the workplace.
sexual dysfunction pursuant to ethical norms and
medical standards;
h.! Special Women Workers
(10) Care of the elderly women beyond their
child-bearing years; and
Art. 136
(11) Management, treatment, and intervention of
Classification of Certain Women Workers—Any
mental health problems of women and girls. In
woman who is permitted or suffered to work, with
addition, healthy lifestyle activities are encouraged
or without compensation, in any night club,
and promoted through programs and projects as
cocktail lounge, massage clinic, bar or similar
strategies in the prevention of diseases.
establishments under the effective control or
supervision of the employer for a substantial
(b) Comprehensive Health Information and
period of time as determined by the Secretary of
Education. - The State shall provide women in all
Labor Employment, shall be considered as an
sectors with appropriate, timely, complete, and
employee of such establishment for purposes of
accurate information and education on all the
labor and social legislation.
above-stated aspects of women's health in
government education and training programs, with
Rule XII
due regard to the following:
SECTION 4. Status of women workers in certain
(1) The natural and primary right and duty of
work places. — Any woman who is permitted or
parents in the rearing of the youth and the
suffered to work with or without compensation, in
development of moral character and the right of
any night club, cocktail lounge, beer house,
children to be brought up in an atmosphere of
massage clinic, bar or similar establishments,
morality and rectitude for the enrichment and
under the effective control or supervision of the
strengthening of character;
employer for a substantial period of time as
(2) The formation of a person's sexuality that
determined by the Secretary of Labor and
affirms human dignity; and
Employment, shall be considered as an employee
(3) Ethical, legal, safe, and effective family
of such establishments for purposes of labor and
planning methods including fertility awareness.
social legislation. No employer shall discriminate
against such employees or in any manner reduce
Sec. 22 (b)
whatever benefits they are now enjoying by
(b) The State shall further ensure:
reason of the provisions of this Section.
(1) Support services and gears to protect them
 i.! Leaves and other Benefits
1) Maternity Leave
RA 1161 (Social Security Act) as amended by RA
8282
SEC. 14-A. Maternity Leave Benefit.- A female
member who has paid at least three (3) monthly
contributions in the twelve-month period
immediately preceding the semester of her
childbirth or miscarriage shall be paid a daily
maternity benefit equivalent to one hundred
percent (100%) of her average daily salary credit
for sixty (60) days or seventy-eight (78) days in
case of caesarian delivery, subject to the
following conditions:
"(a) That the employee shall have notified her
employer of her pregnancy and the probable
date of her childbirth, which notice shall be
transmitted to the SSS in accordance with the
rules and regulations it may provide;
"(b) The full payment shall be advanced by the
employer within thirty (30) days from the filing of
the maternity leave application;
"(c) That payment of daily maternity benefits shall
be a bar to the recovery of sickness benefits
Provided by this Act for the same period for
which daily maternity benefits have been
received;
"(d) That the maternity benefits Provided under
this section shall be paid only for the first four (4)
deliveries or miscarriages;
"(e) That the SSS shall immediately reimburse the
employer of one hundred percent (100%) of the
amount of maternity benefits advanced to the
employee by the employer upon receipt of
satisfactory proof of such payment and legality
thereof; and
"(f) That if an employee member should give birth
or suffer miscarriage without the required
contributions having been remitted for her by her
employer to the SSS, or without the latter having
been previously notified by the employer of the
time of the pregnancy, the employer shall pay to
the SSS damages equivalent to the benefits which
said employee member would otherwise have
been entitled to.
2) Victim Leave
RA 9262 (VAWC)
SECTION 3. Definition of Terms.-As used in this
Act,
(a) "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. It
includes, but is not limited to, the following acts:
A. "Physical Violence" refers to acts that include
bodily or physical harm; B. "Sexual violence"
refers to an act which is sexual in nature,
committed against a woman or her child.
It includes, but is not limited to:
a) rape, sexual harassment, acts of
lasciviousness, treating a woman or her child as a
sex object, making demeaning and sexually
suggestive remarks, physically attacking the
sexual parts of the victim's body, forcing her/him
to watch obscene publications and indecent
shows or forcing the woman or her child to do
indecent acts and/or make films thereof, forcing
the wife and mistress/lover to live in the conjugal
home or sleep together in the same room with
the abuser;
b) acts causing or attempting to cause the victim
to engage in any sexual activity by force, threat of
force, physical or other harm or threat of physical
or other harm or coercion;
c) Prostituting the woman or child.
C. "Psychological violence" refers to acts or
omissions causing or likely to cause mental or
emotional suffering of the victim such as but not
limited to intimidation, harassment, stalking,
damage to property, public ridicule or humiliation,
repeated verbal abuse and mental infidelity. It
includes causing or allowing the victim to witness
the physical, sexual or psychological abuse of a
member of the family to which the victim belongs,
or to witness pornography in any form or to
witness abusive injury to pets or to unlawful or
unwanted deprivation of the right to custody
and/or visitation of common children.
D. "Economic abuse" refers to acts that make or
attempt to make a woman financially dependent
which includes, but is not limited to the following:
1. withdrawal of financial support or preventing
the victim from engaging in any legitimate
profession, occupation, business or activity,
except in cases wherein the other spouse/partner
objects on valid, serious and moral grounds as
defined in Article 73 of the Family Code;
2. deprivation or threat of deprivation of financial
resources and the right to the use and enjoyment
of the conjugal, community or property owned in
common;
3. destroying household property;
4. controlling the victims' own money or
properties or solely controlling the conjugal
money or properties.
(b) "Battery" refers to an act of inflicting physical
harm upon the woman or her child resulting to
the physical and psychological or emotional
distress.
(c) "Battered Woman Syndrome" refers to a
scientifically defined pattern of psychological and
behavioral symptoms found in women living in
battering relationships as a result of cumulative
abuse.
(d) "Stalking" refers to an intentional act
committed by a person who, knowingly and
without lawful justification follows the woman or
her child or places the woman or her child under
surveillance directly or indirectly or a combination
thereof.
(e) "Dating relationship" refers to a situation
wherein the parties live as husband and wife
without the benefit of marriage or are romantically
involved over time and on a continuing basis
during the course of the relationship. A casual
acquaintance or ordinary socialization between
two individuals in a business or social context is
not a dating relationship.
(f) "Sexual relations" refers to a single sexual act
which may or may not result in the bearing of a
common child.
(g) "Safe place or shelter" refers to any home or
institution maintained or managed by the
Department of Social Welfare and Development
(DSWD) or by any other agency or voluntary
organization accredited by the DSWD for the
purposes of this Act or any other suitable place
the resident of which is willing temporarily to
receive the victim.
(h) "Children" refers to those below eighteen (18)
years of age or older but are incapable of taking
care of themselves as defined under Republic Act
No. 7610. As used in this Act, it includes the
biological children of the victim and other children
under her care.
SECTION 43. Entitled to Leave. – Victims under
this Act shall be entitled to take a paid leave of
absence up to ten (10) days in addition to other
paid leaves under the Labor Code and Civil
Service Rules and Regulations, extendible when
the necessity arises as specified in the protection
order.
Any employer who shall prejudice the right of the
person under this section shall be penalized in
accordance with the provisions of the Labor Code
and Civil Service Rules and Regulations. Likewise,
an employer who shall prejudice any person for
assisting a co-employee who is a victim under
this Act shall likewise be liable for discrimination.
Rule VI
Section 42. Ten-day paid leave in addition to other
leave benefits. - At any time during the
application of any protection order, investigation,
prosecution and/or trial of the criminal case, a
victim of VAWC who is employed shall be entitled
to a paid leave of up to ten (10) days in addition
to other paid leaves under the Labor Code and
Civil Service Rules and Regulations and other
existing laws and company policies, extendible
when the necessity arises as specified in the
protection order. The Punong Barangay/kagawad
or prosecutor or the Clerk of Court, as the case
may be, shall issue a certification at no cost to
the woman that such an action is pending, and
this is all that is required for the employer to
comply with the 10-day paid leave. For
government employees, in addition to the
aforementioned certification, the employee
concerned must file an application for leave citing
as basis R.A. 9262. The administrative
enforcement of this leave entitlement shall be
considered within the jurisdiction of the Regional
Director of the DOLE under Article 129 of the
Labor Code of the Philippines, as amended, for
employees in the private sector, and the Civil
Service Commission, for government employees.
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.
The employer/agency head who denies the
application for leave, and who shall prejudice the
victim-survivor or any person for assisting a co-
employee who is a victim-survivor under the Act
shall be held liable for discrimination and violation
of R.A 9262.
The provision of the Labor Code and the Civil
Service Rules and Regulations shall govern the
penalty to be imposed on the said
employer/agency head.
RA 9710 (Magna Carta for Women)
Sec. 4 (k)
(k) "Violence Against Women" refers to any act of
gender-based violence that results in, or is likely
to result in, physical, sexual, or psychological
harm or suffering to women, including threats of
such acts, coercion, or arbitrary deprivation of
liberty, whether occurring in public or in private
life. It shall be understood to encompass, but not
limited to, the following:
(1) Physical, sexual, psychological, and economic
violence occurring in the family, including
battering, sexual abuse of female children in the
household, dowry-related violence, marital rape,
and other traditional practices harmful to women,
non-spousal violence, and violence related to
exploitation;
(2) Physical, sexual, and psychological violence
occurring within the general community, including
rape, sexual abuse, sexual harassment, and
intimidation at work, in educational institutions and
elsewhere, trafficking in women, and prostitution;
and
(3) Physical, sexual, and psychological violence
perpetrated or condoned by the State, wherever it
occurs.
It also includes acts of violence against women
as defused in Republic Acts No. 9208 and 9262.
Section 17. Women's Right to Health. - (a)
Comprehensive Health Services. -The State shall,
at all times, provide for a comprehensive, culture-
sensitive, and gender-responsive health services
and programs covering all stages of a woman's
life cycle and which addresses the major causes
of women's mortality and morbidity: Provided,
That in the provision for comprehensive health
services, due respect shall be accorded to
women's religious convictions, the rights of the
spouses to found a family in accordance with
their religious convictions, and the demands of
responsible parenthood, and the right of women
to protection from hazardous drugs, devices,
interventions, and substances.
Access to the following services shall be ensured:
(1) Maternal care to include pre-and post-natal
services to address pregnancy and infant health
and nutrition;
(2) Promotion of breastfeeding;
 (3) Responsible, ethical, legal, safe, and effective
methods of family planning;
(4) Family and State collaboration in youth
sexuality education and health services without
prejudice to the primary right and duty of parents
to educate their children;
(5) Prevention and management of reproductive
tract infections, including sexually transmitted
diseases, HIV, and AIDS;
(6) Prevention and management of reproductive
tract cancers like breast and cervical cancers, and
other gynecological conditions and disorders;
(7) Prevention of abortion and management of
pregnancy-related complications;
(8) In cases of violence against women and
children, women and children victims and
survivors shall be provided with comprehensive
health services that include psychosocial,
therapeutic, medical, and legal interventions and
assistance towards healing, recovery, and
empowerment;
(9) Prevention and management of infertility and
sexual dysfunction pursuant to ethical norms and
medical standards;
(10) Care of the elderly women beyond their
child-bearing years; and
(11) Management, treatment, and intervention of
mental health problems of women and girls. In
addition, healthy lifestyle activities are encouraged
and promoted through programs and projects as
strategies in the prevention of diseases.
3) Special Leave Benefits (for Gynecological
Disorders)
RA 9710 (Magna Carta for Women)
Section 18. Special Leave Benefits for Women. - A
woman employee having rendered continuous
aggregate employment service of at least six (6)
months for the last twelve (12) months shall be
entitled to a special leave benefit of two (2) months
with full pay based on her gross monthly
compensation following surgery caused by
gynecological disorders.
Rule II
Sec. 7 (T)
T. “Special leave benefits for women” refers to a
female employee’s leave entitlement of two (2)
months with full pay from her employer based on
her gross monthly compensation following
surgery caused by gynecological disorders,
provided that she has rendered continuous
aggregate employment service of at least six (6)
months for the last 12 months;
Rule IV
Sec. 21
SECTION 21. Special Leave Benefits for Women
A. Any female employee in the public and private
sector regardless of age and civil status shall be
entitled to a special leave of two (2) months with
full pay based on her gross monthly
compensation subject to existing laws, rules and
regulations due to surgery caused by
gynecological disorders under such terms and
conditions:
1. She has rendered at least six (6) months
continuous aggregate employment service for the
last twelve (12) months prior to surgery;
2. In the event that an extended leave is
necessary, the female employee may use her
earned leave credits; and
3. This special leave shall be non-cumulative and
non-convertible to cash. B. The CSC, in the case
of the public sector including LGUs and other
State agencies, and the DOLE, in the case of the
private sector, shall issue further guidelines and
appropriate memorandum circulars within sixty
(60) days from the adoption of these Rules and
Regulations to operationalize said policy, and
monitor its implementation and act on any
violations thereof.
DO No. 112-11, as amended by DO No. 112A-12
(https://www.dole.gov.ph/fndr/bong/files/DO%2
0112A-12.pdf)
j.! Sexual Harassment
RA 7877 (Anti-Sexual Harrasment Act of 1995)
SEC. 3. Work, Education or Training-related
Sexual Harassment Defined. — Work, education or
training-related sexual harassment is committed
by an employer, employee, manager, supervisor,
agent of the employer, teacher, instructor,
professor, coach, trainor, or any other person
who, having authority, influence or moral
ascendancy over another in a work or training or
education environment, demands, requests or
otherwise requires any sexual favor from the
other, regardless of whether the demand, request
or requirement for submission is accepted by the
object of said Act.
(a) In a work-related or employment environment,
sexual harassment is committed when:
(1) The sexual favor is made as a
condition in the hiring or in the
employment, re-employment or
continued employment of said individual,
or in granting said individual favorable
compensation, terms, conditions,
promotions, or privileges; or the refusal to
grant the sexual favor results in limiting,
segregating or classifying the employee
which in any way would discriminate,
deprive or diminish employment
opportunities or otherwise adversely
affect said employee;
(2) The above acts would impair the
employee’s rights or privileges under
existing labor laws; or
(3) The above acts would result in an
intimidating, hostile, or offensive
environment for the employee.
(b) In an education or training environment,
sexual harassment is committed:
(1) Against one who is under the care,
custody or supervision of the offender;
(2) Against one whose education,
training, apprenticeship or tutorship is
entrusted to the offender;
(3) When the sexual favor is made a
condition to the giving of a passing
grade, or the granting of honors and
scholarships, or the payment of a
stipend, allowance or other benefits,
privileges, or considerations; or
(4) When the sexual advances result in an
intimidating, hostile or offensive environment for
the student, trainee or apprentice.
Any person who directs or induces another to
commit any act of sexual harassment as herein
defined, or who cooperates in the commission
thereof by another without which it would not
have been committed, shall also be held liable
under this Act.
SEC. 4. Duty of the Employer or Head of Office in
a Work-related, Education or Training
Environment. — It shall be the duty of the
employer or the head of the work- related,
educational or training environment or institution,
to prevent or deter the commission of acts of
sexual harassment and to provide the procedures
for the resolution, settlement or prosecution of
acts of sexual harassment. Towards this end, the
employer or head of office shall:
(a) Promulgate appropriate rules and regulations
in consultation with and jointly approved by the
employees or students or trainees, through their
duly designated representatives, prescribing the
procedure for the investigation of sexual
harassment cases and the administrative
sanctions therefor.
Administrative sanctions shall not be a bar to
prosecution in the proper courts for unlawful acts
of sexual harassment.
The said rules and regulations issued pursuant to
this subsection (a) shall include, among others,
guidelines on proper decorum in the workplace
and educational or training institutions.
(b) Create a committee on decorum and
investigation of cases on sexual harassment. The
committee shall conduct meetings, as the case
may be, with officers and employees, teachers,
instructors, professors, coaches, trainors and
students or trainees to increase understanding
and prevent incidents of sexual harassment. It
shall also conduct the investigation of alleged
cases constituting sexual harassment.
In the case of a work-related environment, the
committee shall be composed of at least one (1)
representative each from the management, the
union, if any, the employees from the supervisory
rank, and from the rank and file employees.
In the case of the educational or training
institution, the committee shall be composed of at
least one (1) representative from the
administration, the trainors, teachers, instructors,
professors or coaches and students or trainees,
as the case may be.
The employer or head of office, educational or
training institution shall disseminate or post a
copy of this Act for the information of all
concerned.
Philippine Aelous Automotive United Corp. v. NLRC,
331SCRA 237 (2000)
Facts: Private respondent was sent 4 memos by
petitioner company detailing 4 incidents, that
allegedly show gross and habitual neglect of
duties, serious misconduct and fraud or willful
breach of trust on her trust, enough grounds to
terminate her from employment. However, re the
st
1 incident (relevant under this topic), private
respondent explained that she threw a stapler at
her superior because the former was taking sexual
advances on her.
Ruling: SC ruled that the incidents alleged by the
petitioner are not enough to constitute her alleged
misconducts as serious, and to manifest gross
negligence. SC also granted her moral damages,
as the experience of sexual harassment of private
respondent made her anxious and affected her
sense of judgment. The exemplary damages were
awarded as the suspension and termination of
private respondent were too “harsh” and too
“incongruent” with her alleged misconducts.
Domingo v. Rayala, 546 SCRA 90 (2008)
Facts: NLRC chairman Rayala was subject to an
administrative complaint for sexual harassment after
in different instances, he held and squeezed NLRC
stenographer Domingo’s shoulder, ran his finger
across her neck and tickled her ear, and made
inappropriate comments. The investigating
committee, OP, and CA all found him guilty, but the
OP dismissed Rayala while the CA only issued a
one year suspension. On appeal, Rayala argues
that he did not commit sexual harassment under
RA 7877 since there was no
demand/request/requirement of a favor as a
condition for continued employment or for
promotion.
Ruling: The court held that (1) under the said law,
no categorical oral or written statement was
necessary to appreciate a demand for a sexual
favor nor for it to be made as a requirement for
continued employment or promotion, because by
his acts he created a hostile working environment
for Domingo and (2) the penalty imposed on him
was proper, since under the related laws, dismissal
may only be meted out on the second offense of
disgraceful and immoral conduct.
2. Minors
a.! Minors under the Constitution
Art. II
Sec. 13. The State recognizes the vital role of the
youth in nation-building and shall promote and
protect their physical, moral, spiritual, intellectual,
and social well-being. It shall inculcate in the yuth
patriotism and nationalism, and encourage their
involvement in public and civic affairs.

Sec. 18. The State affirms labor as a primary
social economic force. It shall protect the rights of
workers and promote their welfare.
Art. XV
Sec. 3 (2)
The State shall defend: x x x (2) The right of
children to assistance, including proper care and
nutrition, and special protection from all forms of
neglect, abuse, cruelty, exploitation and other
conditions prejudicial to their development;
b.! Coverage/Definition
RA 9231 (Special Protection of Children Against
Child Abuse, Exploitation and Discrimination Act)
Sec. 2
Declaration of State Policy and Principles.-
The best interests of children shall be the
paramount consideration in all actions concerning
them, whether undertaken by public or private
social welfare institutions, courts of law,
administrative authorities, and legislative bodies,
consistent with the principle of First Call for
Children as enunciated in the United Nations
Convention on the Rights of the Child. Every effort
shall be exerted to promote the welfare of
children and enhance their opportunities for a
useful and happy life.
Rule
Sec. 1. General statement on coverage. — This
Rule shall apply to all employers, whether operating
for profit or not, including educational, religious and
charitable institutions, except to the Government
and to government-owned or controlled
corporations and to employers of household
helpers and persons in their personal service
insofar as such workers are concerned.
DO No. 65-04
Sec. 3
(a) “Child” refers to any person under 18 years of
age.
(b) “Child labor” refers to any work or economic
activity performed by a child that subjects
him/her to any form of exploitation or is harmful
to his/her health and safety or physical, mental or
psychosocial development.
(c) “Working Child” refers to any child engaged
as follows:
i. when the child is below eighteen (18) years of
age, in work or economic activity that is not child
labor as defined in the immediately preceding
sub-paragraph, and
ii. when the child below fifteen (15) years of age,
(i) in work where he/she is directly under the
responsibility of his/her parents or legal guardian
and where only members of the child’s family are
employed; or (ii)in public entertainment or
information.
c.! Minimum Employable Age
ILO Convention 138 (1973)
(http://blue.lim.ilo.org/cariblex/pdfs/ILO_Conventi
on_138.pdf)
ART. 137. [139] Minimum Employable Age. (a) No
child below fifteen (15) years of age shall be
employed, except when he works directly under
the sole responsibility of his parents or guardian,
and his employment does not in any way interfere
with his schooling. (b) Any person between fifteen
(15) and eighteen (18) years of age may be
employed for such number of hours and such
periods of the day as determined by the Secretary
XII of Labor and Employment in appropriate
regulations. (c) The foregoing provisions shall in
no case allow the employment of a person below
eighteen (18) years of age in an undertaking which
is hazardous or deleterious in nature as determined
by the Secretary of Labor and Employment.
RA 7610, as amended by RA No. 9231
Sec. 12
Employment of Children- Children below fifteen
(15) years of age shall not be employed except:
1) When a child works directly under the sole
responsibility of his/her parents or legal guardian
and where only members of his/her family are
employed: Provided, however, That his/her
employment neither endangers his/her life, safety,
health, and morals, nor impairs his/her normal
development: Provided, further, That the parent or
legal guardian shall provide the said child with
the prescribed primary and/or secondary
education; or
2) Where a child's employment or participation in
public entertainment or information through
cinema, theater, radio, television or other forms of
media is essential: Provided, That the employment
contract is concluded by the child's parents or
legal guardian, with the express agreement of the
child concerned, if possible, and the approval of
the Department of Labor and Employment:
Provided, further, That the following requirements
in all instances are strictly complied with:
(a) The employer shall ensure the protection,
health, safety, morals and normal development of
the child;
(b) The employer shall institute measures to
prevent the child's exploitation or discrimination
taking into account the system and level of
remuneration, and the duration and arrangement
of working time; and
(c) The employer shall formulate and implement,
subject to the approval and supervision of
competent authorities, a continuing program for
training and skills acquisition of the child.
In the above-exceptional cases where any such
child may be employed, the employer shall first
secure, before engaging such child, a work
permit from the Department of Labor and
Employment which shall ensure observance of
the above requirements.
For purposes of this Article, the term "child" shall
apply to all persons under eighteen (18) years of
age.
Sec. 12-A. Hours of Work of a Working Child. -
Under the exceptions provided in Section 12 of
this Act, as amended:
(1) A child below fifteen (15) years of age may
be allowed to work for not more than twenty (20)
hours a week: Provided, That the work shall not
be more than four (4) hours at any given day;
(2) A child fifteen (15) years of age but below
eighteen (18) shall not be allowed to work for
more than eight (8) hours a day, and in no case
beyond forty (40) hours a week;
(3) No child below fifteen (15) years of age shall
be allowed to work between eight o'clock in the
evening and six o'clock in the morning of the
following day and no child fifteen (15) years of
age but below eighteen (18) shall be allowed to
work between ten o'clock in the evening and six
o'clock in the morning of the following day.
Sec. 12-B. 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.
The income of the working child and/or the
property acquired through the work of the child
shall be administered by both parents. In the
absence or incapacity of either of the parents, the
other parent shall administer the same. In case
both parents are absent or incapacitated, the
order of preference on parental authority as
provided for under the Family Code shall apply.
Sec. 12-C. 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 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, in compliance with the provisions of
this Act. The child shall have full control over the
trust fund upon reaching the age of majority.
Sec. 12-D. Prohibition Against Worst Forms of
Child Labor. --No child shall be engaged in the
worst forms of child labor. The phrase "worst
forms of child labor" shall refer to any of the
following:
(1) All forms of slavery, as defined under the
"Anti-trafficking in 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;
or
(2) The use, procuring, offering or exposing of a
child for prostitution, for the production of
pornography or for pornographic performances;
or
(3) The use, procuring or offering of a child for
illegal or illicit activities, including the production
and trafficking of dangerous drugs and volatile
substances prohibited under existing laws; or
(4) Work which, by its nature or the
circumstances in which it is carried out, is
hazardous or likely to be harmful to the health,
safety or morals of children, such that it:
a) Debases, degrades or demeans the intrinsic
worth and dignity of a child as a human being; or
b) Exposes the child to physical, emotional or
sexual abuse, or is found to be highly stressful
psychologically or may prejudice morals; or
c) Is performed underground, underwater or at
dangerous heights; or
d) Involves the use of dangerous machinery,
equipment and tools such as power-driven or
explosive power-actuated tools; or
e) Exposes the child to physical danger such as,
but not limited to the dangerous feats of
balancing, physical strength or contortion, or
which requires the manual transport of heavy
loads; or
f) Is performed in an unhealthy environment
exposing the child to hazardous working
conditions, elements, substances, co-agents or
processes involving ionizing, radiation, fire,
flammable substances, noxious components and
the like, or to extreme temperatures, noise levels,
or vibrations; or
g) Is performed under particularly difficult
conditions; or
h) Exposes the child to biological agents such as
bacteria, fungi, viruses, protozoans, nematodes
and other parasites; or
i) Involves the manufacture or handling of
explosives and other pyrotechnic products.
Sec. 13. Access to Education and Training for
Working Children –
a) No child shall be deprived of formal or non-
formal education. In all cases of employment
allowed in this Act, the employer shall provide a
working child with access to at least primary and
secondary education.
b) To ensure and guarantee the access of the
working child to education and training, the
Department of Education (DEPED) shall: (1)
formulate, promulgate, and implement relevant
and effective course designs and educational
programs; (2) conduct the necessary training for
the implementation of the appropriate curriculum
for the purpose; (3) ensure the availability of the
needed educational facilities and materials; and
(4) conduct continuing research and development
program for the necessary and relevant alternative
education of the working child.
c) The DEPED shall promulgate a course design
under its non-formal education program aimed at
promoting the intellectual, moral and vocational
efficiency of working children who have not
undergone or finished elementary or secondary
education. Such course design shall integrate the
learning process deemed most effective under
given circumstances.
Sec. 14. Prohibition on the Employment of
Children in Certain Advertisements. - No child shall
be employed as a model in any advertisement
directly or indirectly promoting alcoholic
beverages, intoxicating drinks, tobacco and its
byproducts, gambling or any form of violence or
pornography
Section 15. Duty of Employer. – Every employer
shall comply with the duties provided for in
Articles 108 and 109 of Presidential Decree No.
603.
Sec. 16. Penal Provisions-
a) Any employer who violates Sections 12, 12-A,
and Section 14 of this act, as amended, shall be
penalized by imprisonment of six (6) months and
one (1) day to six (6) years or a fine of not less
than Fifty thousand pesos (P50,000.00) but not
more than Three hundred thousand pesos
(P300,000.00) or both at the discretion of the
court.
b) Any person who violates the provision of
Section 12-D of this act or the employer of the
subcontractor who employs, or the one who
facilitates the employment of a child in hazardous
work, shall suffer the penalty of a fine of not less
than One hundred thousand pesos (P100,000.00)
but not more than One million pesos
(P1,000,000.00), or imprisonment of not less than
twelve (12) years and one (1) day to twenty (20)
years, or both such fine and imprisonment at the
discretion of the court.
c) Any person who violates Sections 12-D(1) and
12-D(2) shall be prosecuted and penalized in
accordance with the penalty provided for by R. A.
9208 otherwise known as the "Anti-trafficking in
Persons Act of 2003": Provided, That Such
penalty shall be imposed in its maximum period.
d) Any person who violates Section 12-D (3)
shall be prosecuted and penalized in accordance
with R.A. 9165, otherwise known as the
"Comprehensive Dangerous Drugs Act of 2002";
Provided, That such penalty shall be imposed in
its maximum period.
e) If a corporation commits any of the violations
aforecited, the board of directors/trustees and
officers, which include the president, treasurer
and secretary of the said corporation who
participated in or knowingly allowed the violation,
shall be penalized accordingly as provided for
under this Section.
f) Parents, biological or by legal fiction, and legal
guardians found to be violating Sections 12, 12-
A, 12-B and 12-C of this Act shall pay a fine of
not less than Ten thousand pesos (P10,000.00)
but not more than One hundred thousand pesos
(P100,000.00), or be required to render
community service for not less than thirty (30)
days but not more than one (1) year, or both
such fine and community service at the discretion
of the court: Provided, That the maximum length
of community service shall be imposed on
parents or legal guardians who have violated the
provisions of this Act three (3) times; Provided,
further, That in addition to the community service,
the penalty of imprisonment of thirty (30) days but
not more than one (1) year or both at the
discretion of the court, shall be imposed on the
parents or legal guardians who have violated the
provisions of this Act more than three (3) times.
g) The Secretary, of Labor and Employment or
his/her duly authorized representative may, after
due notice and hearing, order the closure of any
business firm or establishment found to have
violated any of the provisions of this Act more
than three (3) times. He/she shall likewise order
the immediate closure of such firm or
establishment if:
(1) The violation of any provision of this Act has
resulted in the death, insanity or serious physical
injury of a child employed in such establishment;
or
(2) Such firm or establishment is engaged or
employed in prostitution or in obscene or lewd
shows.
 h) In case of such closure, the employer shall be
required to pay the employee(s) the separation
pay and other monetary benefits provided for by
law.
DO No. 65-04 (IRR RA 9231)
Sec. 6. Prohibition on the Employment of Children
in Certain Advertisements – No child below 18
years of age shall be employed as a model in
any advertisement directly or indirectly promoting
alcoholic beverages, intoxicating drinks, tobacco
and its byproducts, gambling or any form of
violence or pornography.
Sec. 7. Exceptions and Conditions – The following
shall be the only exceptions to the prohibition on
the employment of a child below 15 year of age:
(a) When the child works under the sole
responsibility of his/her parents or guardian,
provided that only members of the child’s family
are employed.
(b) When the child’s employment or participation
in public entertainment or information is essential,
regardless of the extent of the child’s role. Such
employment shall be strictly under the following
conditions:
i. The total number of hours worked shall be in
accordance with Section 15 of these Rules;
ii. The employment does not endanger the child’s
life, safety, health and morals, nor impair the
child’s normal development;
iii. The child is provided with at least the
mandatory elementary or secondary education;
and
iv. The employer secures a work permit for the
child in accordance with Section 8-12 of these
Rules.
D.A. No. 01-08
(https://www.dole.gov.ph/fndr/bong/files/DA%20
01-08.pdf)
d.! Hours of Work
RA 9231
Sec. 3 on Sec. 12-a
(3) No child below fifteen (15) years of age shall
be allowed to work between eight o'clock in the
evening and six o'clock in the morning of the
following day and no child fifteen (15) years of
age but below eighteen (18) shall be allowed to
work between ten o'clock in the evening and six
o'clock in the morning of the following day.
e.! Prohibitions Against Worst Forms of Child Labor
ILO Convention 182 (1999)
(http://www.ilo.org/public/english/standards/rel
m/ilc/ilc87/com-chic.htm)
RA 9231, Sec. 3 on Sec. 12-d
d) Involves the use of dangerous machinery,
equipment and tools such as power-driven or
explosive power-actuated tools
Sec 5 on sec. 14
Sec. 14. Prohibition on the Employment of
Children in Certain Advertisements. ­ No child
shall be employed as a model in any
advertisement directly or indirectly promoting
alcoholic beverages, intoxicating drinks, tobacco
and its byproducts, gambling or any form of
violence or pornography.
DO No. 65-04
SECTION 5. Prohibition on the Employment of
Children in Worst Forms of Child Labor – No child
shall be engaged in the worst forms of child
labor. The phrase “worst forms of child labor”
shall refer to any of the following:
(a) All forms of slavery, as defined under the
“Anti-trafficking in 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 children for use in armed conflict.
 (b) The use, procuring, offering or exposing of a
child for prostitution, for the production of
pornography or for pornographic performances;
(c) The use, procuring or offering of a child for
illegal or illicit activities, including the production
or trafficking of dangerous drugs or volatile
substances prohibited under existing laws; or
(d) Work which, by its nature or the
circumstances in which it is carried out, is
hazardous or likely to be harmful to the health,
safety or morals of children, such that it:
i. Debases, degrades or demeans the intrinsic
worth and dignity of a child as a human being; or
ii. Exposes the child to physical, emotional or
sexual abuse, or is found to be highly stressful
psychologically or may prejudice morals; or
iii. Is performed underground, underwater or at
dangerous heights; or iv. Involves the use of
dangerous machinery, equipment and tools such
as power-driven or explosive power-actuated
tools; or
v. Exposes the child to physical danger such as,
but not limited to the dangerous feats of
balancing, physical strength or contortion, or
which requires the manual transport of heavy
loads; or . vi. Is performed in an unhealthy
environment exposing the child to hazardous
working conditions, elements, substances, co-
agents or processes involving ionizing, radiation,
fire, flammable substances, noxious components
and the like, or to extreme temperatures, noise
levels or vibrations; or
vii. Is performed under particularly difficult
conditions; or viii. Exposes the child to biological
agents such as bacteria, fungi, viruses, protozoa,
nematodes and other parasites; or ix. Involves the
manufacture or handling of explosives and other
pyrotechnic products.
f.! Prohibition against Discrimination, Art. 138
Art. 138 Prohibition Against Child Discrimination. -
No employer shall discriminate against any
person in respect to terms and conditions of
employment on account of his age.
g.! Jurisdiction
Sec. 16­ A. Jurisdiction - The family courts shall
have original jurisdiction over all cases involving
offenses punishable under this Act: Provided, That
in cities or provinces where there are no family
courts yet, the regional trial courts and the
municipal trial courts shall have concurrent
jurisdiction depending on the penalties prescribed
for the offense charged.
The preliminary investigation of cases filed under
this Act shall be terminated within a period of
thirty (30) days from the date of filing.
If the preliminary investigation establishes a prima
facie case, then the corresponding information
shall be filed in court within forty eight (48) hours
from the termination of the investigation.
Trial of cases under this Act shall be terminated
by the court not later than ninety (90) days from
the date of filing of information. Decision on said
cases shall be rendered within a period of fifteen
(15) days from the date of submission of the
case.
3. Domestic Workers or “Kasambahay”
(formerly Househelpers)
References: RA 10361 & IRR; Civil Code, Arts. 1689-
1699; ILO Convention 189 & ILO Recommendation
201; Department Advisory No. 1-14
a.! Declaration of Policies, Art. 1, Sec. 2
Section 2. Declaration of Policies. – It is hereby
declared that:
(a) The State strongly affirms labor as a primary
social force and is committed to respect,
promote, protect and realize the fundamental
principles and rights at work including, but not
 limited to, abolition of child labor, elimination of all
forms of forced labor, discrimination in
employment and occupation, and trafficking in
persons, especially women and children;
(b) The State adheres to internationally accepted
working conditions for workers in general, and
establishes labor standards for domestic workers
in particular, towards decent employment and
income, enhanced coverage of social protection,
respect for human rights and strengthened social
dialogue;
(c) The State recognizes the need to protect the
rights of domestic workers against abuse,
harassment, violence, economic exploitation and
performance of work that is hazardous to their
physical and mental health; and
(d) The State, in protecting domestic workers and
recognizing their special needs to ensure safe
and healthful working conditions, promotes
gender-sensitive measures in the formulation and
implementation of policies and programs affecting
the local domestic work.
b.! Coverage, Art. I, Sec. 3
Section 3. Coverage. – This Act applies to all
domestic workers employed and working within
the country.
c.! Definition, Art. I, Secs. 4 (c), (d), (f)
(c) Domestic work refers to work performed in or
for a household or households.
(d) Domestic worker or "Kasambahay" refers to
any person engaged in domestic work within an
employment relationship such as, but not limited
to, the following: general househelp, nursemaid or
"yaya", cook, gardener, or laundry person, but
shall exclude any person who performs domestic
work only occasionally or sporadically and not on
an occupational basis.
The term shall not include children who are under
foster family arrangement, and are provided
access to education and given an allowance
incidental to education, i.e. "baon", transportation,
school projects and school activities.
(f) Household refers to the immediate members
of the family or the occupants of the house that
are directly provided services by the domestic
worker.
d.! Employment Age
Section 16. Employment Age of Domestic
Workers. – It shall be unlawful to employ any
person below fifteen (15) years of age as a
domestic worker. Employment of working
children, as defined under this Act, shall be
subject to the provisions of Section 10(A),
paragraph 2 of Section 12-A, paragraph 4 of
Section 12-D, and Section 13 of Republic Act
No. 7610, as amended, otherwise known as the
"Special Protection of Children Against Child
Abuse, Exploitation and Discrimination Act".
Working children shall be entitled to minimum
wage, and all benefits provided under this Act.
Any employer who has been sentenced by a
court of law of any offense against a working
child under this Act shall be meted out with a
penalty one degree higher and shall be
prohibited from hiring a working child.
e.! Pre-Employment Prohibitions, Secs. 13, 14, 15
Section 13. Recruitment and Finder’s Fees.
– Regardless of whether the domestic worker
was hired through a private employment agency
or a third party, no share in the recruitment or
finder’s fees shall be charged against the
domestic worker by the said private employment
agency or third party.
Section 14. Deposits for Loss or Damage. – It
shall be unlawful for the employer or any other
person to require a domestic worker to make
deposits from which deductions shall be made
for the reimbursement of loss or damage to tools,
 materials, furniture and equipment in the
household.
Section 15. Prohibition on Debt Bondage. – It
shall be unlawful for the employer or any person
acting on behalf of the employer to place the
domestic worker under debt bondage.
f.! Employment Contract, Art. III, Sec. 11
Section 11. Employment Contract. – An
employment contract shall be executed by and
between the domestic worker and the employer
before the commencement of the service in a
language or dialect understood by both the
domestic worker and the employer. The domestic
worker shall be provided a copy of the duly
signed employment contract which must include
the following:
(a) Duties and responsibilities of the
domestic worker;
(b) Period of employment;
(c) Compensation;
(d) Authorized deductions;
(e) Hours of work and proportionate
additional payment;
(f) Rest days and allowable leaves;
(g) Board, lodging and medical attention;
(h) Agreements on deployment
expenses, if any;
(i) Loan agreement;
(j) Termination of employment; and
(k) Any other lawful condition agreed
upon by both parties.
The Department of Labor and Employment
(DOLE) shall develop a model employment
contract for domestic workers which shall, at all
times, be made available free of charge to
domestic workers, employers, representative
organizations and the general public. The DOLE
shall widely disseminate information to domestic
workers and employers on the use of such
model employment contract.
In cases where the employment of the domestic
worker is facilitated through a private employment
agency, the PEA shall keep a copy of all
employment contracts of domestic workers and
shall be made available for verification and
inspection by the DOLE.
g.! Employer’s Reportorial Duties, Art. III, Sec. 17
Section 17. Employer’s Reportorial Duties. – The
employers shall register all domestic workers under
their employment in the Registry of Domestic
Workers in the barangay where the employer’s
residence is located. The Department of the Interior
and Local Government (DILG) shall, in coordination
with the DOLE, formulate a registration system for
this purpose.
h.! Rights and Privileges, Art. II, Secs. 5, 6, 7, 8, 9
1) Standard of Treatment
2) Board and Lodging and Medical Attendance,
3) Guarantee of Privacy
4) Access to Outside Communication
5) Right to Education and Training
Section 5. Standard of Treatment. – The employer
or any member of the household shall not subject
a domestic worker or "kasambahay" to any kind of
abuse nor inflict any form of physical violence or
harassment or any act tending to degrade the
dignity of a domestic worker.
Section 6. Board, Lodging and Medical
Attendance. – The employer shall provide for the
basic necessities of the domestic worker to include
at least three (3) adequate meals a day and
humane sleeping arrangements that ensure safety.
The employer shall provide appropriate rest and
assistance to the domestic worker in case of
illnesses and injuries sustained during service
without loss of benefits.
At no instance shall the employer withdraw or hold
in abeyance the provision of these basic
necessities as punishment or disciplinary action to
the domestic worker.
 Section 7. Guarantee of Privacy. – Respect for the
privacy of the domestic worker shall be guaranteed
at all times and shall extend to all forms of
communication and personal effects. This
guarantee equally recognizes that the domestic
worker is obliged to render satisfactory service at
all times.
Section 8. Access to Outside Communication.
– The employer shall grant the domestic worker
access to outside communication during free
time: Provided, That in case of emergency, access
to communication shall be granted even during
work time. Should the domestic worker make use
of the employer’s telephone or other
communication facilities, the costs shall be borne
by the domestic worker, unless such charges are
waived by the employer.
Section 9. Right to Education and Training. – The
employer shall afford the domestic worker the
opportunity to finish basic education and may allow
access to alternative learning systems and, as far
as practicable, higher education or technical and
vocational training. The employer shall adjust the
work schedule of the domestic worker to allow
such access to education or training without
hampering the services required by the employer.
st rd
i. Wage, Art. IV, Secs. 24, 25 1 and 3 sentences,
26
Section 24. Minimum Wage. – The minimum wage of
domestic workers shall not be less than the following:
(a) Two thousand five hundred pesos (P2,500.00) a
month for those employed in the National Capital
Region (NCR);
(b) Two thousand pesos (P2,000.00) a month for
those employed in chartered cities and first class
municipalities; and
(c) One thousand five hundred pesos (P1,500.00) a
month for those employed mother municipalities.
After one (1) year from the effectivity of this Act, and
periodically thereafter, the Regional Tripartite and
Productivity Wage Boards (RTPWBs) shall review, and
if proper, determine and adjust the minimum wage
rates of domestic workers.
Section 25. Payment of Wages. – Payment of wages
shall be made on time directly to the domestic worker
to whom they are due in cash at least once a month.
The employer, unless allowed by the domestic worker
through a written consent, shall make no deductions
from the wages other than that which is mandated by
law. No employer shall pay the wages of a domestic
worker by means of promissory notes, vouchers,
coupons, tokens, tickets, chits, or any object other
than the cash wage as provided for under this Act.
The domestic worker is entitled to a thirteenth month
pay as provided for by law.
Section 26. Pay Slip. – The employer shall at all times
provide the domestic worker with a copy of the pay
slip containing the amount paid in cash every pay day,
and indicating all deductions made, if any. The copies
of the pay slip shall be kept by the employer for a
period of three (3) years.
j. Wage Prohibitions
1) Charging by the original employer for
th
temporary domestic service, Art. IV, Sec. 23, 4
sentence
Section 23. Extent of Duty. – The domestic worker and
the employer may mutually agree for the former to
temporarily perform a task that is outside the latter’s
household for the benefit of another household.
However, any liability that will be incurred by the
domestic worker on account of such arrangement
shall be borne by the original employer. In addition,
such work performed outside the household shall
entitle the domestic worker to an additional payment
of not less than the existing minimum wage rate of a
domestic worker. It shall be unlawful for the original
employer to charge any amount from the said
household where the service of the domestic worker
was temporarily performed.
2) Deductions other than those mandated by
nd
law, Art. IV, Secs. 25 2 sentence, 27, 28
Section 27. Prohibition on Interference in the Disposal
of Wages. – It shall be unlawful for the employer to
interfere with the freedom of any domestic worker to
dispose of the latter’s wages. The employer shall not
force, compel or oblige the domestic worker to
purchase merchandise, commodities or
properties from the employer or from any other
person, or otherwise make use of any store or
services of such employer or any other person.
The domestic worker shall be entitled to all other
benefits under existing laws.
other
l. Duty and Non-Assignment to Non-household, Secs.
22, 23

Section 28. Prohibition Against Withholding of Wages.

– It shall be unlawful for an employer, directly or
indirectly, to withhold the wages of the domestic
worker. If the domestic worker leaves without any
justifiable reason, any unpaid salary for a period not
exceeding fifteen (15) days shall be forfeited.
Likewise, the employer shall not induce the domestic
worker to give up any part of the wages by
force, stealth, intimidation, threat or by any other
means whatsoever.
3) Payment in forms other than cash, Art. IV,
rd
Sec. 25, 3 sentence, supra
4) Interference in the disposal of wages, Art. IV,
Sec. 27, supra
5) Withholding of Wages, Art. IV, Sec. 28, supra
k. 13th Month Pay; SSS and other Benefits, Art. IV,
Sec. 25 par. 2, 30
Section 25, part. 2, supra
Section 30. Social and Other Benefits. – A domestic
worker who has rendered at least one (1) month of
service shall be covered by the Social Security
System (SSS), the Philippine Health Insurance
Corporation (PhilHealth), and the Home Development
Mutual Fund or Pag-IBIG, and shall be entitled to all
the benefits in accordance with the pertinent
provisions provided by law.
Premium payments or contributions shall be
shouldered by the employer. However, if the domestic
worker is receiving a wage of Five thousand pesos
(P5,000.00) and above per month, the domestic
worker shall pay the proportionate share in the
premium payments or contributions, as provided by
law.
Section 22. Assignment to Nonhousehold Work. –
No domestic worker shall be assigned to work in a
commercial, industrial or agricultural enterprise at a
wage rate lower than that provided for agricultural or
nonagricultural workers. In such cases, the domestic
worker shall be paid the applicable minimum wage.
Section 23. Extent of Duty. – The domestic worker
and the employer may mutually agree for the former
to temporarily perform a task that is outside the
latter’s household for the benefit of another
household. However, any liability that will be
incurred by the domestic worker on account of such
arrangement shall be borne by the original
employer. In addition, such work performed outside
the household shall entitle the domestic worker to
an additional payment of not less than the existing
minimum wage rate of a domestic worker. It shall be
unlawful for the original employer to charge any
amount from the said household where the service
of the domestic worker was temporarily performed.
Fernando Co v. Lina B. Vargas, 660 SCRA 451 (2011)
Vargas alleged that she was employed as a baker in
the Nathaniel Bakeshop, but was made to do
household chores. She filed for underpayment or
non-payment when she was cursed at and told to
leave, by the employers, after she failed to cook
lunch. The LA ruled that since the place of residence
was the same as place of business, Vargas ended
up doing tasks necessary and desirable for the
business. The CA later affirmed this decision, ruling
that even if petitioner was actually working as
domestic servant in private respondents residence,
her act of taking orders would warrant the conclusion
that petitioner should be considered as a regular
employee and not as a mere family househelper or
domestic servant of respondent Co. The Supreme
Court dismissed Petitioner’s appeal on procedural
grounds.
See: Apex Mining Company, Inc. v. NLRC, 196 SCRA
251 (1991)
The question resolved by the court in this case; “Is
the househelper in the staff houses of an industrial
company a domestic helper or a regular employee of
the said firm?” Here the court hold that househelpers
in staff houses of an industriacl company is not
considered a helper but a regular employee because
it does not meet the main criteria of providing
personal comfort to the “family and personal home of
the employer” and as such illegally terminating a
househelper working in a staff house entites said
househelperto the benefits of a regular employee.
m. Rest Periods and Leave Benefits, Art. IV, Secs. 20,
21, 2
Section 20. Daily Rest Period. – The domestic
worker shall be entitled to an aggregate daily rest
period of eight (8) hours per day.
Section 21. Weekly Rest Period. – The domestic
worker shall be entitled to at least twenty-four (24)
consecutive hours of rest in a week. The employer
and the domestic worker shall agree in writing on
the schedule of the weekly rest day of the domestic
worker: Provided, That the employer shall respect
the preference of the domestic worker as to the
weekly rest day when such preference is based on
religious grounds. Nothing in this provision shall
deprive the domestic worker and the employer from
agreeing to the following:
(a) Offsetting a day of absence with a particular rest
day;
(b) Waiving a particular rest day in return for an
equivalent daily rate of pay;
(c) Accumulating rest days not exceeding five (5)
days; or
(d) Other similar arrangements.
Section 22. Assignment to Nonhousehold Work. –
No domestic worker shall be assigned to work in a
commercial, industrial or agricultural enterprise at a
wage rate lower than that provided for agricultural or
nonagricultural workers. In such cases, the domestic
worker shall be paid the applicable minimum wage.
n. Health & Safety, Art. IV, Sec. 19
Section 19. Health and Safety. – The employer shall
safeguard the health and safety of the domestic
worker in accordance with laws, rules and regulations,
with due consideration of the peculiar nature of
domestic work.
o. Termination of Service
1) Fixed Duration, Art. V, Sec. 32 par. 1
2) Not Fixed, Art. V, Sec. 32 par. 2
Section 32. Termination of Service. – Neither the
domestic worker nor the employer may terminate the
contract before the expiration of the term except for
grounds provided for in Sections 33 and 34 of this
Act. If the domestic worker is unjustly dismissed, the
domestic worker shall be paid the compensation
already earned plus the equivalent of fifteen (15) days
work by way of indemnity. If the domestic worker
leaves without justifiable reason, any unpaid salary
due not exceeding the equivalent fifteen (15) days
work shall be forfeited. In addition, the employer may
recover from the domestic worker costs incurred
related to the deployment expenses, if any: Provided,
That the service has been terminated within six (6)
months from the domestic worker’s employment.
If the duration of the domestic service is not
determined either in stipulation or by the nature of the
service, the employer or the domestic worker may
give notice to end the working relationship five (5)
days before the intended termination of the service.
The domestic worker and the employer may mutually
agree upon written notice to pre-terminate the
contract of employment to end the employment
relationship.
p. Grounds for Termination
1) Initiated by the Domestic Worker, Art. V, Sec.
33
Section 33. Termination Initiated by the Domestic
Worker. – The domestic worker may terminate the
employment relationship at any time before the
expiration of the contract for any of the following
causes:
(a) Verbal or emotional abuse of the domestic worker
by the employer or any member of the household;
(b) Inhuman treatment including physical abuse of the
domestic worker by the employer or any member of
the household;
(c) Commission of a crime or offense against the
domestic worker by the employer or any member of
the household;
(d) Violation by the employer of the terms and
conditions of the employment contract and other
standards set forth under this law;
(e) Any disease prejudicial to the health of the
domestic worker, the employer, or member/s of the
household; and
(f) Other causes analogous to the foregoing.
2) Initiated by the Employer, Art. V, Sec. 34
Section 34. Termination Initiated by the Employer. –
An employer may terminate the services of the
domestic worker at any time before the expiration of
the contract, for any of the following causes:
(a) Misconduct or willful disobedience by the
domestic worker of the lawful order of the employer
in connection with the former’s work;
(b) Gross or habitual neglect or inefficiency by the
domestic worker in the performance of duties;
(c) Fraud or willful breach of the trust reposed by the
employer on the domestic worker;
(d) Commission of a crime or offense by the domestic
worker against the person of the employer or any
immediate member of the employer’s family;
(e) Violation by the domestic worker of the terms and
conditions of the employment contract and other
standards set forth under this law;
(f) Any disease prejudicial to the health of the
domestic worker, the employer, or member/s of the
household; and
(g) Other causes analogous to the foregoing.
3) Mutually Agreed, Art. V., Sec. 32, par. 3,
supra
q. Employment Certification, Art. V, Sec. 35
Section 35. Employment Certification. – Upon the
severance of the employment relationship, the
employer shall issue the domestic worker within five
(5) days from request a certificate of employment
indicating the nature, duration of the service and work
performance.
r. Prohibition Against Privileged Communication, Art. II,
Sec. 10
Section 10. Prohibition Against Privileged Information.
– All communication and information pertaining to the
employer or members of the household shall be
treated as privileged and confidential, and shall not
be publicly disclosed by the domestic worker during
and after employment. Such privileged information
shall be inadmissible in evidence except when the
suit involves the employer or any member of the
household in a crime against persons, property,
personal liberty and security, and chastity.
s. Remedies
1) Rescue and Rehabilitation of Abused
Domestic Worker, Art. IV, Sec. 31
Section 31. Rescue and Rehabilitation of Abused
Domestic Workers. – Any abused or exploited
domestic worker shall be immediately rescued by a
municipal or city social welfare officer or a social
welfare officer from the Department of Social Welfare
and Development (DSWD) in coordination with the
concerned barangay officials. The DSWD and the
DILG shall develop a standard operating procedure
for the rescue and rehabilitation of abused domestic
workers, and in coordination with the DOLE, for
possible subsequent job placement.
•!
2) Mechanism for Settlement of Disputes
a) Jurisdiction of the DOLE Regional Office, Art. VII,
Sec. 37, par. 1
b) Jurisdiction of Regular Courts, Art. VII, Sec. 37, par.
2 field personnel and the industries employing them.
Section 37. Mechanism for Settlement of Disputes. –
All labor- related disputes shall be elevated to the
DOLE Regional Office having jurisdiction over the
workplace without prejudice to the filing of a civil or
criminal action in appropriate cases. The DOLE
Regional Office shall exhaust all conciliation and
mediation efforts before a decision shall be rendered.
Ordinary crimes or offenses committed under the
Revised Penal Code and other special penal laws by
either party shall be filed with the regular courts.
3) Penalty, Art. IX, Sec. 40
Section 40. Penalty. – Any violation of the provisions
of this Act declared unlawful shall be punishable with
a fine of not less than Ten thousand pesos
(P10,000.00) but not more than Forty thousand pesos
(P40,000.00) without prejudice to the filing of
appropriate civil or criminal action by the aggrieved
party.
t. “Araw ng mga Kasambahay”: 18 January
2013, Art. VIII, Sec. 39
Section 39. "Araw Ng Mga Kasambahay". – The date
upon which the President shall approve
"Domestic Workers Act" shall be designated as the
"Araw ng mga Kasambahay".
4. Homeworkers
Reference: Arts. 151-153; DO No. 5, DOLE, 4
Feb. 1993, now Book III, Rule XIV
a. Coverage and Regulation, Arts. 151-153
[151-153]; DO 5, now Book III, Rule XIV, Sec. 1
Chapter IV: EMPLOYMENT OF HOMEWORKERS
Art. 151. Regulation of industrial homeworkers. The
employment of industrial homeworkers and field
personnel shall be regulated by the government
through the appropriate regulations issued by the
Secretary of Labor and Employment to ensure the
general welfare and protection of homeworkers and
Art. 152. Regulations of Secretary of Labor. The
regulations or orders to be issued pursuant to this
Chapter shall be designed to assure the minimum
terms and conditions of employment applicable to the
industrial homeworkers or field personnel involved.
Art. 153. Distribution of homework. For purposes of
this Chapter, the "employer" of homeworkers includes
any person, natural or artificial who, for his account
or benefit, or on behalf of any person residing
outside the country, directly or indirectly, or through
an employee, agent contractor, sub-contractor or any
other person: Delivers, or causes to be delivered, any
goods, articles or materials to be processed or
fabricated in or about a home and thereafter to be
returned or to be disposed of or distributed in
accordance with his directions; or Sells any goods,
articles or materials to be processed or fabricated in
or about a home and then rebuys them after such
processing or fabrication, either by himself or through
some other person.
Rule XIV: Employment Of Homeworkers
SECTION 1. General statement on coverage. — This
Rule shall apply to any person who performs industrial
homework for an employer, contractor or sub-
contractor.
this
b. Definition, DO No. 5, Sec. 2
SECTION 2. Definitions. — As used in this Rule, the
following terms shall have the meanings indicated
hereunder:
(a) “Industrial Homework” is a system of production
under which work for an employer or contractor is
carried out by a homework at his/her home. Materials
may or may not be furnished by the employer or
contractor. It differs from regular factory production
principally in that, it is a decentralized form of
production where there is ordinarily very little
supervision or regulation of methods of work.
(b) “Industrial Homeworker” means a worker who is
engaged in industrial homework.
(c) “Home” means any room, house, apartment or
other premises used regularly, in whole or in part, as
dwelling place, except those situated within the
premises or compound of an employer, contractor or
subcontractor and the work performed therein is
under the active or personal supervision by or for the
latter.
(d) “Employer” means any natural or artificial person
who, for his own account or benefit, or on behalf of
any person residing outside the Philippines, directly
or indirectly, or through any employee, agent,
contractor, subcontractor, or any other person:
(1) delivers or causes to be delivered any goods,
articles or materials to be processed or fabricated in
or about a home and thereafter to be returned or to
be disposed of or distributed in accordance with his
direction; or
(2) sells any goods, articles or materials for the
purpose of having such goods or articles processed
in or about a home and then repurchases them
himself or through another after such processing.
(e) “Contractor” or “subcontractor” means any person
who, for the account or benefit of an employer,
delivers or causes to be delivered to a homeworker
goods or articles to be processed in or about his
home and thereafter to be returned, disposed of or
distributed in accordance with the direction of the
employer
(f) “Processing” means manufacturing, fabricating,
finishing, repairing, altering, packing, wrapping or
handling in any way connected with the production
or preparation of an article or material.
(g) “Cooperative” is an association registered under
the Cooperative Code of the Philippines.
(h) “Department” means the Department of Labor and
Employment.
c. Registration, Secs. 4-5
SECTION 4. Registration of Homeworkers’
Organization. —
Any applicant homeworker organization or association
shall acquire legal personality, and shall be entitled to
the rights and privileges granted by law to legitimate
labor organizations upon issuance of the certificate of
registration based on the following requirements:
(a) Fifty-five Pesos (P55.00) registration fee;
(b) The names of its officers, their addresses, the
principal address of the homeworkers organization,
the minutes of the organizational meetings and the list
of workers who participated in such meetings;
(c) The names of all its members comprising at least
20 percent of all the workers in the bargaining unit
where it seeks to operate, if applicable;
(d) If the applicant has been in existence for one or
more years, copies
of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the
applicant organization, the minutes of its adoption or
ratification and the list of members who participated
in it.
SECTION 5.Registration of Employer, Contractor and
Subcontractor. — The Department shall, as soon as
possible, conduct consultation meetings with
government agencies requiring registration of
employers and determine if the data being supplied
by the registration forms of such agencies are the
same as or similar those needed by the Department
in the implementation of this regulations. If the
registration forms of other agencies do not provide
the data needed by DOLE, it shall inquire into the
possibility of adopting a common registration form
with other agencies that will provide the data needed
by all the agencies concerned.
d. Conditions of Employment/Deductions, Secs.
6-9
SECTION 6. Payment for homework. — Immediately
upon receipt of the finished goods or articles, the
employer shall pay the homeworker or the contractor
or subcontractor, as the case may be, for the work
performed less corresponding homeworkers’ share of
SSS, MEDICARE and ECC premium contributions
which shall be remitted by the
contractor/subcontractor or employer to the SSS with
the employers’ share. However, where payment is
made to a contractor or subcontractor, the
homeworker shall likewise be paid immediately after
the goods or articles have been collected from the
workers.
SECTION 7. Standard rates. — At the initiative of the
Department or upon petition of any interested party,
the Secretary of Labor and Employment or his
authorized representative shall establish the standard
output rate or standard minimum rate in appropriate
orders for the particular work or processing to be
performed by the homeworkers.
The standard output rates or piece rates shall be
determined through any of the following procedures:
(a) time and motion studies;
(b) an individual/collective agreement between the
employer and its workers as approved by the
Secretary or his authorized representative;
(c) consultation with representatives of employers and
workers organizations in a tripartite conference called
by the Secretary.
The time and motion studies shall be undertaken by
the Regional Office having jurisdiction over the
location of the premise/s used regularly by the
homeworker/s. However, where the job operation or
activity is being likewise performed by regular factory
workers at the factory or premises if the employer, the
time and motion studies shall be conducted by the
Regional Office having jurisdiction over the location of
the main undertaking or business of the employer.
Piece rates established through time and motion
studies conducted at the factory or main undertaking
of the employer shall be applicable to the
homeworkers performing the same job activity. The
standard piece rate shall be issued by the Regional
Office within one month after a request has been
made at said office.
Upon request of the Regional Office, the Bureau of
Working Conditions shall provide assistance in the
conduct of such studies. Non-compliance with the
established standard rates can be the subject of
complaint which shall be filed at the Regional Office.
SECTION 8. Deductions. — No employer, contractor,
or subcontractor shall make any deduction from the
homeworker’s earnings for the value of materials
which have been lost, destroyed, soiled or otherwise
damaged unless the following conditions are met:
(a) the homeworker concerned is clearly shown to be
responsible for the loss or damage;
(b) the homeworker is given reasonable opportunity
to show cause why deductions should not be made;
(c) the amount of such deduction is fair and
reasonable and shall not exceed the actual loss or
damage; and
(d) the deduction is made at such rate that the
amount deducted does not exceed 20% of the
homeworker’s earnings in a week.
SECTION 9. Conditions for payment of work.
(a) The employer may require the homeworker to
redo the work which has been improperly executed
without having to pay the stipulated rate again.
(b) An employer, contractor, or subcontractor need
not pay the homeworker for any work which has been
done on goods and articles which have been
returned for reasons attributable to the fault of the
homeworker.
e. Joint and Several Liability of
Employer/Contractor, Sec. 11
SECTION 11. Duties of employer, contractor and
subcontractor. — Whenever an employer shall
contract with another for the performance of the
employer’s work, it shall be the duty of such employer
to provide in such contract that the employees or
homeworkers of the contractor and the latter’s
subcontractor shall be paid in accordance with the
provisions of this Rule. In the event that such
contractor or subcontractor fails to pay the wages or
earnings of his employees or homeworkers as
specified in this Rule, such employer shall be jointly
and severally liable with the contractor or
subcontractor to the workers of the latter, to the extent
that such work is performed under such contract, in
the same manner as if the employees or
homeworkers were directly engaged by the employer.
The employer, contractor or subcontractor shall assist
the homeworkers in the maintenance of basic safe
and healthful working conditions at the homeworkers’
place of work.
f. Prohibitions, Sec. 13
SECTION 13. Prohibitions for homework. — No
homework shall be performed on the following: (1)
explosives, fireworks and articles of like character;
(2) drugs and poisons; and (3) other articles, the
processing of which requires exposure to toxic
substances.
g. Enforcement, Sec. 10
SECTION 10. Enforcement Power. — The Regional
Director shall have the power to order and administer
compliance with the provisions of the
law and regulations affecting the terms and conditions
of employment of homeworkers and shall have the
jurisdiction in cases involving violations of this Rule.
Complaints for violations of labor standards and the
terms and conditions of employment involving money
claims of homeworkers in an amount of not more
than P5,000 per homeworker shall be heard and
decided by the Regional Director. He shall have the
power to order and administer; after due notice and
hearing, compliance with the provisions of this Rule.
In cases where the findings of the Regional Office
show that the money claims due a homeworker
exceed P5,000, the same shall be endorsed to the
appropriate Regional Arbitration Branch of the
National Labor Relations Commission. Non-
compliance with the order issued by the Regional
Director can be the subject of prosecution in
accordance with the penal provisions of the Labor
Code. In cases of disagreement between the
homeworker and the employer, contractor, or
subcontractor on a matter falling under this Rule,
either party may refer the case to the Regional Office
having jurisdiction over the workplace of the
homeworker. The Regional Office shall decide the
case within ten (10) working days from receipt of the
case. Its decision shall be final and executory.
5. Night Workers
Reference: Arts. 154-161
•! Coverage and Exception,
Art. 154, par. 1
b. Definition, Art. 154, par. 2
c. Rights
A.! Health Assessment, Art. 155
B.! Mandatory Suitable First-aid Facilities, Art. 156
C.! Transfer, Art. 157
D.! Women Night Workers, Art. 158
E.! Compensation, Art. 159
F.! Social Services, Art. 160
G.! Consultation on Night Work Schedules, Art. 161
L. Mental, Dental and Occupational Safety
References: Art. 162-171; Omnibus Rules,
Book IV, Rule I, Secs. 1-10; Rule II, Secs. 1-10;
Technical Guidelines for Hazardous/Non-Hazardous
Establishments, DOLE Memo. Circ. No. 2, S 1998
1. Coverage, Rule I, Sec. 1
2. First Aid Treatment, Art. 162
Art. 162. First-aid treatment. Every employer shall
keep in his establishment such first-aid medicines
and equipment as the nature and conditions of work
may require, in accordance with such regulations as
the Department of Labor and Employment shall
prescribe.
The employer shall take steps for the training of a
sufficient number of employees in first-aid treatment.
3. Emergency Medical and Dental
Services
a. When Required, Art. 163
Art. 163. Emergency medical and dental services. It
shall be the duty of every employer to furnish his
employees in any locality with free medical and dental
attendance and facilities consisting of:
(a) The services of a full-time registered nurse when
the number of employees exceeds fifty (50) but not
more than two hundred (200) except when the
employer does not maintain hazardous workplaces,
in which case, the services of a graduate first-aider
shall be provided for the protection of workers, where
no registered nurse is available. The Secretary of
Labor and Employment shall provide by appropriate
regulations, the services that shall be required where
the number of employees does not exceed fifty (50)
and shall determine by appropriate order, hazardous
workplaces for purposes of this Article;
(b) The services of a full-time registered nurse, a
part-time physician and dentist, and an emergency
clinic, when the number of employees exceeds two
hundred (200) but not more than three hundred
(300); and
(c) The services of a full-time physician, dentist and
a full-time registered nurse as well as a dental clinic
and an infirmary or emergency hospital with one bed
capacity for every one hundred (100) employees
when the number of employees exceeds three
hundred (300).
In cases of hazardous workplaces, no employer shall
engage the services of a physician or a dentist who
cannot stay in the premises of the establishment for
at least two (2) hours, in the case of those engaged
on part-time basis, and not less than eight (8) hours,
in the case of those employed on full-time basis.
Where the undertaking is non-hazardous in nature,
the physician and dentist may be engaged on retainer
basis, subject to such regulations as the Secretary of
Labor and Employment may prescribe to insure
immediate availability of medical and dental treatment
and attendance in case of emergency. (As amended
by Presidential Decree NO. 570-A, Section 26)
b. When Not Required, Art. 164
Art. 164. When emergency hospital not required. The
requirement for an emergency hospital or dental clinic
shall not be applicable in case there is a hospital or
dental clinic which is accessible from the employer’s
establishment and he makes arrangement for the
reservation therein of the necessary beds and dental
facilities for the use of his employees.
4. Employer Assistance, Art. 167
Art. 167. Assistance of employer. It shall be the duty
of any employer to provide all the necessary
assistance to ensure the adequate and immediate
medical and dental attendance and treatment to an
injured or sick employee in case of emergency.
Ocean Builders Construction Corp. v Sps. Antonio
and Anicia Cubacub
Facts: Bladimir Cubacub (Bladimir) was employed
as maintenance man by petitioner company Ocean
Builders Construction Corp. at its office in Caloocan
City. Bladimir was afflicted with chicken pox. Thus,
he was advised by petitioner Dennis Hao (Hao), the
company’s general manager, to rest for three days
which he did at the company’s “barracks” where he
lives free of charge.
Three days later, Bladimir went about his usual
chores of manning the gate of the company
premises and even cleaned the company vehicles.
Later in the afternoon, Hao gave Bladimir P1,000.00
and ordered Silangga, a co-worker, to bring
Bladimir to the nearest hospital. Bladimir died.
Issue: Did Hao exercise the diligence more than
what the law requires, hence, not liable for
damages? Yes.
Ruling: The Implementing Rules of the Code do not
enlighten what the phrase “adequate and
immediate” medical attendance means in relation to
an “emergency.” It would thus appear that the
determination of what it means is left to the
employer, except when a full-time registered nurse
or physician are available on-site as required, also
under the Labor Code.
The Court determined that the actions taken by
petitioners when Bladimir became ill, to take a 3-
day rest and to later have him brought to the
nearest hospital, amounted to the “necessary
assistance” to ensure “adequate and immediate
medical attendance” to Bladimir as required under
Art. 161 of the Labor Code, to provide to a sick
employee in an emergency. Petitioner is not guilty of
negligence.
5. Occupational Safety and Health Standards,
Training of Supervisor/Technician
a. When Required, Book IV, Rule II, Secs. 5 (a)
(d)
SECTION 5. Training of personnel in safety and health.
— Every employer shall take steps to train a sufficient
number of his supervisors or technical personnel in
occupational safety and health. An employer may
observe the following guidelines in the training of his
personnel:
(a) In every non-hazardous establishment or
workplace having from fifty (50) to four hundred (400)
workers each shift, at least one of the supervisors or
technical personnel shall be trained in occupational
health and safety and shall be assigned as part-time
safety man. Such safety man shall be the secretary of
the safety committee.
(d) In every hazardous establishment or workplace
having over two hundred (200) workers each shift, at
least two of its supervisors or technical personnel
shall be trained and one of them shall be appointed
full-time safety man and secretary of the safety
committee therein.
b. When Not Required, Book IV, Rule II, Sec. 5
(e)
(e) The employment of a full-time safety man not be
required where the employer enters into a written
contract with a qualified consulting organization which
shall develop and carry out his safety and health
activities; Provided, That the consultant shall conduct
plant visits at least four (4) hours a week and is
subject to call anytime to conduct accident
investigations and is available during scheduled
inspections or surveys by the Secretary of Labor and
Employment or his authorized representatives. The
provisions of this Section shall be made mandatory
upon orders of the Secretary of Labor and
Employment as soon as he is satisfied that adequate
facilities on training in occupational safety and health
are available in the Department of Labor and
Employment and other public or private entities duly
accredited by the Secretary of Labor and
Employment.
6. Enforcement/DOLE Obligations
Art. 168. Safety and health standards. The Secretary
of Labor and Employment shall, by appropriate
orders, set and enforce mandatory occupational
safety and health standards to eliminate or reduce
occupational safety and health hazards in all
workplaces and institute new, and update existing,
programs to ensure safe and healthful working
conditions in all places of employment.
Art. 169. Research. It shall be the responsibility of the
Department of Labor and Employment to conduct
continuing studies and research to develop innovative
methods, techniques and approaches for dealing with
occupational safety and health problems; to discover
latent diseases by establishing causal connections
between diseases and work in environmental
conditions; and to develop medical criteria which will
assure insofar as practicable that no employee will
suffer impairment or diminution in health, functional
capacity, or life expectancy as a result of his work
and working conditions.
Art. 170. Training programs. The Department of Labor
and Employment shall develop and implement
training programs to increase the number and
competence of personnel in the field of occupational
safety and industrial health.
Art. 171. Administration of safety and health laws. The
Department of Labor and Employment shall be solely
responsible for the administration and enforcement of
occupational safety and health laws, regulations and
standards in all establishments and workplaces
wherever they may be located; however, chartered
cities may be allowed to conduct industrial safety
inspections of establishments within their respective
jurisdictions where they have adequate facilities and
competent personnel for the purpose as determined
by the Department of Labor and Employment and
subject to national standards established by the latter.
The Secretary of Labor and Employment may, through
appropriate regulations, collect reasonable fees for
the inspection of steam boilers, pressure vessels and
pipings and electrical installations, the test and
approval for safe use of materials, equipment and
other safety devices and the approval of plans for
such materials, equipment and devices. The fee so
collected shall be deposited in the national treasury
to the credit of the occupational safety and health fund
and shall be expended exclusively for the
administration and enforcement of safety and other ART. 293. [278] Coverage. The provisions of this
labor laws administered by the Department of Labor Title shall apply to all establishments or
and Employment. undertakings, whether for profit or not.

d.! Employer Recognition

Note: Arts. 170-214: repealed by SSS Law of
1997 (RA 1161, as amended); Pangilinan v. General Milling Corporation, 434 SCRA
(http://www.officialgazette.gov.ph/1954/06/18/rep 159 (2004)
ublic-act-no-1161/)
DOCTRINE: Stipulations in employment contracts
Re: Art. 209, see National Health Insurance act of providing for term employment or fixed period
1995 (RA 7875); employment are valid when the period were agreed
(https://www.philhealth.gov.ph/about_us/ra7875.pdf upon knowingly and voluntarily by the parties without
) force, duress or improper pressure, being brought to
bear upon the employee and absent any other
Book IV, Rule II, Sec. 8 circumstances vitiating his consent, or where it
SECTION 8. Administration and enforcement. — (a) satisfactorily appears that the employer and employee
Every employer shall give to the Secretary of Labor dealt with each other on more or less equal terms
and Employment or his duly authorized representative with no moral dominance whatever being exercised
access to its premises and records at any time of the by the former over the latter.
day and night when there is work being undertaken
therein for the purpose of determining compliance
with the provisions of this Rule. Facts: General Milling Corporation (Respondent) is a
(b) Every establishment or workplace shall be domestic corporation engaged in the production and
inspected at least once a year to determine sale of livestock and poultry, while Pangilinan et all
compliance with the provisions of this Rule. Special (Petitioners) were employed on different dates as
inspection visits, however, may be authorized by the emergency workers at its poultry plant under separate
Regional Office to investigate accidents, conduct temporary/casual contracts of employment for a
surveys requested by the Bureau of Working period of 5 months. Their contracts expired and their
Conditions, follow-up inspection, recommendations services were terminated.
or to conduct investigations or inspections upon
request of an employer, worker or a labor union in e.! Employer Determination/Designation
the establishment.
Violeta v. NLRC, 280 SCRA 520 (1997)
See also: Technical Guidelines for
Hazardous/Non-Hazardous Establishments, DOLE DOCTRINE: Petitioners employment was not co-
Memo. Circ. No. 2, S 1998 existent with the duration of their particular work
(http://www.bwsc.dole.gov.ph/files/DO4%20s_1999 assignments because their employer could, at any
.pdf) stage of such work, determine whether their services
were needed or not. Their services could then be
M. Employee Classification terminated even before the completion of the phase
of work assigned to them.
References: Arts. 293-302, Book VI, Rule 1, Secs. 1,
5, 6 To be exempted from the presumption of regularity
of employment the agreement between a project
c.! Coverage, Art. 293 employee and his employer must strictly conform
' with the requirements and conditions provided in
Article 280.

Summary: Petitioners Violeta and Salazar went
through a series of projects to which DISC assigned
them to. After a project were terminated, they were
separated from their employment based on the
reason that they were project employees and
therefore they employment was co-terminous with the
project. Pets filed for Ilegal Dismissal on the ground
that they were regular employees. The court ruled that
pets were regular employees. The principal test for
determining whether particular employees are
properly characterized as project employees whether
or not the project employees were assigned to carry
out a specific project or undertaking, the duration (and
scope) of which were specified at the time the
employees were engaged for that project. The
completion or termination of the project for which
petitioners were hired was not determined at the start
of their employment. The appointments of petitioners
herein were not coterminous with the project but with
the need for such particular items of work as were
assigned to them, as distinguished from the
completion of the project
San Miguel Corporation v. NLRC, 297 SCRA 277
(1998)
DOCTRINE: The nature of ones employment does not
depend on the will of the employer, the procedure of
hiring, nor the manner of designation of the employee,
but on (1) the nature of the activities to be performed
considering the employer's nature of business and
(2) the duration and scope of the work to be done.
Summary: Private respondent was hired for 4 months
to repair a furnace in SMC's Glass Plant. He was
dismissed upon completion of the project. 10 days
later he was rehired for 3 months to repair other
furnaces. Again, he was dismissed upon completion
of the project. He filed a complaint for illegal dismissal.
The Court held that given the nature of the activities
he performed, their scope and their duration, he was
not a regular employee but a project employee. The
rule for project employees is that their employment is
coterminous with the duration of the project they are
assigned to. Private respondent's termination does not
amount to illegal dismissal.
4. Kinds of Employee, Arts. 295-296
st
a. Regular Employees, Art. 295, 1 par.; 295,
nd
2 par.; 296, last sentence; 75(d); Omnibus Rules,
Book VI, Rule 1, Secs. 5(a), (b) and 6.
1) Definition
From Pangilinan: LC 280 [now 295] comprehends
three kinds of employees:
(a) REGULAR EMPLOYEES or those whose work is
necessary or desirable to the usual business of the
employer;
(b) PROJECT EMPLOYEES or those whose
employment has been fixed for a specific project or
undertaking the completion or termination of which
has been determined at the time of the engagement
of the employee or where the work or services to be
performed is seasonal in nature and the employment
is for the duration of the season; and,
(c) CASUAL EMPLOYEES or those who are neither
regular nor project employees.
There are 2 separate instances whereby it can be
determined that an employment is regular:
(1) if the particular activity performed by the employee
is necessary or desirable in the usual business or
trade of the employer; and,
(2) if the employee has been performing the job for at
least a year.
LC 280 does not proscribe or prohibit an employment
contract with a fixed period.
Pangilinan v. General Milling Corporation, supra
2) Nature of Work
ART. 295. [280] Regular and Casual Employment. The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be
regular where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has been
fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or service to be
performed is seasonal in nature and the employment
is for the duration of the season.
An employment shall be deemed to be casual if it is
not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one
year of service, whether such service is continuous
or broken, shall be considered a regular employee
with respect to the activity in which he is employed
and his employment shall continue while such activity
exists.
Hacienda Fatima v. National Federation of Sugarcane
Workers Food and General Trade, 396 SCRA 518
(2003)
Romares v. NLRC, 294 SCRA 411 (1998)
3) Extended Period
Audion Electric Co., Inc. v. NLRC, 308 SCRA 340
(1999)
4) Repeated Renewal of Contract
Maraguinot v. NLRC, 284 SCRA 539 (1998)
University of Sto. Tomas v Samahang Manggagawa ng
UST
3)! Project Employee, Art. 286 [295],
st
1 par.; Policy Instruction No. 20
(1977); DOLE D.O. No. 19 (1993)
1) Definition
A project employee is one who is hired for carrying
out a separate job, distinct from the other
undertakings of the company, the scope and duration
of which has been determined and made known to
the employees at the time of employment. [Hanjin
Heavy Industries & Const. Co. v. Ibañez, G.R. No.
170181, (2008)]
Whether or not the project has a direct relation to the
business of the employer is not important, BUT:
•! (1) Employee must be informed of the
nature and duration of project
•! (2) Project and principal business of ER are
two separate things
•! (3) No attempt to deny security of tenure to
the worker
Hanjin Heavy Industries & Construction Co. v, Ibañez,
555 SCRA 537 (2008)
2) Principal Test of Project Employment
The test for distinguishing a project employee from a
regular employee is whether or not he has been
assigned to carry out a specific project or
undertaking, with the duration and scope of his
engagement specified at the time his service is
contracted. [Uy Construction v Trinidad]
The test to determine whether employment is regular
or not is the reasonable connection between the
particular activity performed by the employee in
relation to the usual business or trade of the
employer. If the employee has been performing the
job for at least one year, even if the performance is
not continuous or merely intermittent, the law deems
the repeated and continuing need for its performance
as sufficient evidence of the necessity, if not
indispensability of that activity to the business
[Malicdem & Flores v Marulas Industrial Corp.]
Two Kinds of Project Employee
•! (1) For a particular job or undertaking that
is WITHIN the regular or usual business of
the employer company, but which is distinct
and separate, and identifiable as such, from
the other undertakings of the company (i.e.
construction)
OR
•! (2) For a particular job or undertaking that
is NOT within the regular business of the
corporation. Such a job or undertaking must
also be identifiably separate and distinct from
the ordinary or regular business operations
of the employer [Omni Hauling v Bon]
*Absent evidence: Presumption of regular
employment
William Uy Construction Corp. v. Trinidad, 615 SCRA
180 (2010)
DM Consunji Corp. v. Rogelio Bello, 702 SCRA 347
(2013)
Macarthur Malicdem and Hermenigildo Flores v.
Marulas Industrial Corporation and Mike Mancilla, 717
SCRA 563 (2014)
Omni Hauling Services, Inc. et al. v. Bon, 734 SCRA
270 (2014)
a.! Workpool Employees
Phil National Construction Corporation v NLRC:
"Members of a work pool from which a construction
company draws its project employees, if considered
employees of the construction company while in the
work pool, are non-project employees or employees
for an indefinite period. If they are employed in a
particular project, the completion of the project or any
phase thereof will not mean severance of (the)
employer-employee relationship." [J & DO Aguilar
Corp v NLRC]
A project employee or a member of a work pool may
acquire the status of a regular employee when the
following concur:
•! (1) There is a continuous rehiring of project
employees even after cessation of a project;
and
•! (2) The tasks performed by the alleged
“project employee” are vital, necessary, and
indispensable to the usual business or trade
of the employer. However, the length of time
during which the employee was continuously
rehired is not controlling, but merely serves
as a badge of regular employment.
•!
A work pool may exist although the workers in the
pool do not receive salaries and are free to seek
other employment during temporary breaks in the
business, provided, that the worker shall be available
when called to report for a project. Although primarily
applicable to regular seasonal workers, this set-up
can likewise be applied to project workers insofar as
the effect of temporary cessation of work is
concerned. [Maraguinot v. NLRC]
J & D.O. Aguilar Corp. v. NLRC, 269 SCRA 596 (1997)
Maraguinot v. NLRC, supra
nd
4)! Casual, Art. 286 [295], 2 par.;
Omnibus Rules, Book VI, Rule 1,
Sec. 5 (b)
Art. 295 [280] (2). An employment shall be deemed
to be casual if it is not covered by the preceding
paragraph: Provided, That any employee who has
rendered at least one year of service, whether such
service is continuous or broken, shall be considered
a regular employee with respect to the activity in
which he is employed and his employment shall
continue while such activity exists.
Book VI, Rule 1, Sec. 5 (b). Casual employment.
There is casual employment where an employee is
engaged to perform a job, work or service which is
merely incidental to the business of the employer,
and such job, work or service is for a definite period
made known to the employee at the time of
engagement: Provided, That any employee who has
rendered at least one year of service, whether such
service is continuous or not, shall be considered a
regular employee with respect to the activity in
which he is employed and his employment shall
continue while such activity exists.
1) Nature of Work
What determines regularity or casualness is not the
employment contract, written or otherwise, but the
nature of the job. If the job is usually necessary or
desirable to the main business of the employer, then
employment is regular.
Hacienda Leddy v. Villegas, 735 SCRA 663 (2014)
Even assuming that he was doing odd jobs around
the farm, such long period of doing said odd jobs is
indicative that the same was either necessary or
desirable to petitioner's trade or business.
• Owing to the length of service alone, he became a
regular employee, by operation of law, one year after
he was employed.
Integrated Contractor and Plumbing Works, Inc. v.
National Labor Relations Commission — the test
determine whether employment is regular or not is
the reasonable connection between the particular
activity performed by the employee in relation to the
usual business or trade of the employer. If the
employee has been performing the job for at least
one year, even if the performance is not continuous
or merely intermittent, the law deems the repeated
and continuing need for its performance as sufficient
evidence of the necessity, if not indispensability of that
activity to the business.
2) One-Year Service
Requirements to become regular employee:
(1) One (1) year service, continuous or broken with
respect to activity employed
(2) Employment shall continue while such activity
exists
Integrated Contractor and Plumbing Works, Inc. v.
Court of Appeals, 466 SCRA 544 (2005)
The court held that Respondent was initially a project
employee since he was part of a pool of workers who
were free to seek employment during temporary
breaks. However, the pattern of re-hiring proved that
the services of employee were necessary and
indispensable to petitioner’s business. In Maraguinot
it was ruled that once a project employee is 1)
continuously rehired for the same tasks and 2) such
tasks are vital, necessary and indispensable to the
usual business, the employee must be deemed
regular. The test in determining if employee is regular
is the reasonable connection between activity
performed and employer’s business and that it has
been performed for at least one year, even if
intermittent with repeated hiring.
5)! Fixed-Term
Art. 295 [280] has no application to instances where
a fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without any
force, duress or improper pressure being brought to
bear upon the employee and absent any other
circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee
dealt with each other on more or less equal terms
with no moral dominance whatever being exercised
by the former over the latter. [Brent School v Zamora]
(Basically:)
Conditions for the validity of fixed contract agreement
between employer and employee
•! (1) Fixed period of employment was
knowingly and voluntarily agreed upon by
the parties without any force, duress, or
improper pressure or any other
circumstances vitiating his consent; or
•! (2) The employer and the employee dealt
with each other on more or less equal terms
with no moral dominance exercised by the
former or the latter.
1) Legal Basis
Brent School v. Zamora, 181 SCRA 702 (1990)
Respondent Alegre was engaged by Brent as an
athletic director. The contract had a specific term,
which is 5 years. Three months before the expiration
of the stipulated period, Alegre was given a copy of
the report filed by Brent with the DOLE advising of the
termination of his services.
The issue is w/n fixed term employment is allowed.
The Court held that it must first be noted that the
contract was executed before the effectivity of the
Labor Code. Before the advent of the Labor Code,
there was no doubt whatever about the validity of term
employment as recognized by certain special laws
and the Civil Code.
Basan v. Coca-Cola Bottlers Philippines, 749 SCRA
541 (2015)
Integrated Contractor and Plumbing Works, Inc. v.
Court of Appeals, 466 SCRA 544 (2005)
 Duration of a fixed-term Assigned to carry out a
Prof Battad says: Brent shouldn’t be the standard tho employment agreed specific project or
cause the employee will never be equal with the upon by the parties may undertaking, the
employer!! be any day certain, duration and scope of
which is understood to which were specified at
2) Fixed-Term Employee as distinguished from be "that which must the time the employee
Independent Contractor, Regular Employee and necessarily come is engaged for the
Project Employee although it may not be project
known when." The
FT Independent decisive determinant in
Contracting fixed-term employment
Bilateral Relationship Trilateral Relationship is not the activity that the
EER exists No EER between employee is called upon
principal and employee to perform but the day
certain agreed upon by
the parties for the
Fuji Television Network, Inc. v. Espiritu, G.R. Nos. commencement and
204944-45, December 3, 2014 termination of the
employment
Arlene S. Espiritu was hired by Fuji as a relationship.
news/correspondent producer, who was made to
sign a non-renewal contract, after the latter found that
she has lung cancer. Arlene filed a complaint for GMA Network, Inc. v. Pabriga, et al., G.R No. 176419,
illegal dismissal before the LA, alleging that she was 27 Nov. 2013
a regular EE who was entitled to reinstatement and
monetary benefits. Fuji, on the other hand, claimed 4) No Implied Renewal of Employment
that there were no ER-EE relations between them and
Arlene, and that Arlene was, in fact, an independent It is a settled rule that seafarers are considered
contractor. SC ruled against Fuji. Court said that there contractual employees. Their employment is
existed an ER-EE relations between the 2 parties, and governed by the contracts they sign everytime they
that Arlene was, in fact, a regular EE, as the are rehired and their employment is terminated when
successive renewals of Arlene’s contract indicated the the contract expires. Their employment is contractually
necessity and desirability of her work in the usual fixed for a certain period of time. Thus, when a
course of Fuji’s business. This regular employment contract ends, the employment is deemed
existed simultaneously with her being a fixed-term EE, automatically terminated, there being no mutually-
as the Brent doctrine provides that, “For as long as it agreed renewal or extension of the expired contract.
was the employee who requested, or bargained, that
the contract have a definite date of termination, or that Unica v. Anscor Swire Ship Management Corp., 716
the fixed-term contract be freely entered into by the SCRA 61 (2014)
employer and the employee, then the validity of the
fixed-term contract will be upheld.” 5) Non-renewal of Contract is Management
Prerogative

3) Fixed-Term as distinguished from Project Fonterra Brands Phils., Inc. v. Largado, 753 SCRA 649
Employee (2015)

FT Project Respondents were employed by AC Sicat as project

employees. The contract was clear that the
employment will only be for 5 months with a pre-
determined date of termination.
By accepting such contract, respondents agree to the
condition that their employment will end on a pre-
determined date. And thus, their employment did end.
They cannot argue illegal dismissal after the non-
renewal of their contract, after its pre-determined
expiration. Renewal of contract is management
prerogative.
st
6)! Seasonal, Art. 286 [295], 1 par.
ART. 295. [280] Regular and Casual Employment. The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be
regular where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has been
fixed for a specific project or undertaking the
completion or termination of which has
determined at the time of the engagement of the
employee or where the work or service to be
performed is seasonal in nature and the employment
is for the duration of the season.
Universal Robina Sugar Milling Corp. and Cabati v.
Ang, 713 SCRA 596 (2014)
Complainants were employees of URSUMCO under
contracts for a given season. They were repeatedly
hired to perform the same tasks. SC held that they
are regular seasonal workers but are not entitled to
the benefits under the CBA.
Paz v. Northern Tobacco Redrying Co., Inc., 751 SCRA
99 (2015)
NTRCI employs approximately 100 employees with
seasonal workers tasked to sort, process, store and
transport tobacco leaves during the tobacco season
of March to September, including Petitioner Paz. She
was hired sometime in 1974 as a seasonal sorter and
re-hired for every tobacco season since then. In
2003, Paz was 63 years old when NTRCI informed
her that she was considered retired under company
policy. Both parties agree she is entitled to retirement
pay. The controversy is how much. In discussing her
entitlement to retirement pay and the correct
computation, Court discussed her status as a regular
seasonal worker. The services petitioner Paz
performed as a sorter were necessary and
indispensable to respondent NTRCI's business of
flue-curing and redrying tobacco leaves. She was
also regularly rehired as a sorter during the tobacco
seasons for 29 years since 1974. These
considerations taken together allowed the conclusion
that petitioner Paz was a regular seasonal employee,
entitled to rights under Article 279 of the Labor Code
(see in Doctrine).
nd
f. Probationary, Art. 287 [296]; 61, 2 sentence; 75
(d); Book VI, Rule I, Secs. 2, 3, 4, 5, 6; Art. 75 (d)
ART. 296. [281] Probationary Employment.
been Probationary employment shall not exceed six (6)
months from the date the employee started working,
unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an
employee who has been engaged on a probationary
basis may be terminated for a just cause or when he
fails to qualify as a regular employee in accordance
with reasonable standards made known by the
employer to the employee at the time of his
engagement. An employee who is allowed to work
after a probationary period shall be considered a
regular employee.
1) Definition
Philippine Federation of Credit Cooperatives, Inc. v.
NLRC, 300 SCRA 72 (1998)
Cebu Marine Beach Resort v. NLRC, 414 SCRA 173
(2003)
Enchanted Kingdom, Inc. v. Verzo, G.R. No. 209559,
9 Dec. 2015
2) Employer Right to Set Period/Obligation
Orient Express Placement Philippines v. NLRC, 273
SCRA 256 (1997)
3) Duration; Exception
Cathay Pacific Airways, Limited v. Marin, 501 SCRA
461 (2006)
Canadian Opportunities Unlimited, Inc. v. Bart Q.
Dalangin, 665 SCRA 21 (2012)
4) Criteria for Regularization
Mylene Carvajal v. Luzon Development Bank and/or
Ramirez, 678 SCRA 132 (2012)
UNIVAC Development, Inc. v. William M. Soriano, 699
SCRA 88 (2013)
Abbott Laboratories, Phils. v. Alcaraz, 701 SCRA 682
(2013)
trained in their respective functions. They were not
absorbed for a definite period but instead for an
indefinite period.
7) Rule on Private School Teachers
The Manual of Regulations for Private Schools (Par.
75) lays down the following characteristics of a
teacher who becomes a regular employee of a
school:
1.) He must be full-time
2.) Must have rendered three (3) consecutive years
of service
3.) His service must have been satisfactory
Private schools are allowed to set a maximum of three
(3) years for probationary employment for teachers.

5) Extension of Contract La Consolacion College v. NLRC (2001)

Mariwasa Manufacturing, Inc. v. Leogardo, 169 SCRA Facts: De la Pea was employed by LCC as CAT
465 (1989) commandant and YCAP coordinator then he
resigned from his job. He then later reapplied for
6) Absorbed Employees the same position that he held for 11 years prior
Absorbed employees need not go through his resignation but LCC appointed him as a a
probationary employment. classroom teacher in PE. The contract had a fixed
term of 1 academic year. In De la Pea’s evaluation
Cebu Stevedoring Co. Inc. v. Regional Director he was reminded to comply with the requirments
(1988) and standards of the
school which he failed to do so when he applied
Facts: Arsenio Gelig and Maria Luz Quijano were for reinstatement for the next school year he was
former employees of the Cebu Customs Arrastre denied. He filed for Illegal dismissal.
Service (CCAS). CCAS was later abolished then
all the employees were terminated and given Ruling: The court held that his employment was not
separation pay. Later, Cebu Stevedoring Co. Inc. permanent but for a specified duration of one
(CSCI) absorbed all employees of CCAS with the school year and he is not a permanent employee
same according to the Manual of Regulations for Private
positions that they held. However, private Schools (which is applicable, not the LC) as he did
respondents were dismissed by petitioner allegedly not comply with the requirements.
for redundancy and other alleged grounds.

Issue: Whether the absorbed employees should
undergo probationary period employment when
transferred to CSCI?
Ruling: No. There is no need to employ them as
probationary considering that they are already well
Colegio del Santisimo Rosario and Sr. Zenaida S.
Mofada, OP v. Emmanuel Rojo (2013)
Facts: Petitioner worked as a high school teacher
on probationary basis for three consecutive school
years (10 months per year). His contract was not
 renewed after so he filed a case for illegal
dismissal, alleging that he should be extended
permanent employment after having rendered
satisfactory service for 3 consecutive years.
Ruling: The SC ruled in favor of respondent. The
probationary period for academic personnel shall
not be more than three (3) consecutive years
of satisfactory service for those in the elementary
and secondary levels (Section 92 of Manual).
Those who have served
the probationary period shall be made regular or
permanent. Full-time teachers who have
satisfactorily completed their probationary period
shall be considered regular or permanent.
N. Suspension of Business Operation – When
Not Deemed Terminated
1.! Bona-fide Suspension of Operation;
Performance of Military or Civic Duty
ART. 301. [286] When Employment not Deemed
Terminated. The bona fide suspension of the
operation of a business or undertaking for a period
not exceeding six (6) months, or the fulfillment by
the employee of a military or civic duty shall not
terminate employment. In all such cases, the
employer shall reinstate the employee to his former
position without loss of seniority rights if he
indicates his desire to resume his work not later
than one (1) month from the resumption of
operations of his employer or from his relief from
the military or civic duty.
Rule VI, SECTION 12. Suspension of relationship. —
The employer-employee relationship shall be
deemed suspended in case of suspension of
operation of the business or undertaking of the
employer for a period not exceeding six (6)
months, unless the suspension is for the purpose
of defeating the rights of the employees under the
Code, and in case of mandatory fulfillment by the
employee of a military or civic duty. The payment
of wages of the employee as well as the grant of
other benefits and privileges while he is on a
military or civic duty shall be subject to special laws
and decrees and to the applicable individual or
collective bargaining agreement and voluntary
employer practice or policy.
2. “Floating Status” Beyond Six (6) Months Constitutes
Termination
Valdez v. NLRC, 286 SCRA 87 (1998)
Doctrine: When that floating status of an employee
lasts for more than six months, he may be
considered to have been illegally dismissed from
the service.
Facts: Valdez was hired by private respondent as
a bus driver by Nelbusco. The airconditioning unit
of the bus he was driving suffered a mechanical
breakdown. Nelbusco told him to wait until the
airconditioning unit was repaired. Valdez continued
reporting to his employers office for work, only to
find out each time that the airconditioning unit had
not been repaired. Later, he found out that the bus
formerly driven by him was plying an assigned
route as an ordinary bus, with a newly-hired driver.
Valdez filed a
complaint against private respondent for illegal
dismissal.
Issue: W/N he was illegally dismissed.
Ruling: Yes. The so-called floating status of an
employee should last only for a legally prescribed
period of time. When that floating status of an
employee lasts for more than six months, he may
be considered to have been illegally dismissed
from the service.
SKM Art Craft Corporation v. Efren Bauca, et al.,
710 SCRA 652 (2013)
Lopez v. Irvine Construction Corp., 733 SCRA 589
(2014)
Facts: Petitioner Lopez was a laborer for
respondent Irvine Construction firm hired in 1994
who was then constructively dismissed on
December 2005. The labor arbiter and NLRC
 found illegal dismissal, however, the CA reversed
the decision and found that the complaint was
prematurely filed since there is no evidence that
Lopez was prevented from work by respondent
and that he was likewise asked to return to work
within the 6 month period provided for in Art. 286.
Ruling: The Court ruled that the CA erred insofar
as there was no actual legitimate reason for the
respondents to suspend the employment of
petitioner which is a requirement under Article 286.
The Court reversed the CA and ordered the
reinstatement of the LA and NLRC decision that
petitioner was constructively dismissed.
Exocet Security & Allied Services Corp. v. Serrano,
737 SCRA 40 (2014)
O. Termination of Employment
Prof Battad says:
For a summary of everything read DO 147-15
[https://www.dole.gov.ph/files/D_O_%20147-
15.pdf]
1. Coverage, Art. 293; Book VI, Rule 1, Sec. 1
ART. 293. [278] Coverage. The provisions of this
Title shall apply to all establishments or
undertakings, whether for profit or not.
SECTION 1. Coverage – This rule shall apply to all
establishment and undertakings, whether operated
for profit or not, including educational, medical,
charitable, and religious institutions and
organizations, in cases of regular employment with
the exception of the Government and its political
subdivision including government-owned or
controlled corporations.
2. Security of Tenure
ART. 294. [279] Security of Tenure. In cases of
regular employment, the employer shall not
terminate the services of an employee except for a
just cause or when authorized by this Title. An
employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent
computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.
ART. 292. [277] Miscellaneous Provisions xxx
(b) Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and authorized
cause and without prejudice to the requirement of
notice under Article 283 of this Code, employer
shall furnish the worker whose employment is
sought to be terminated a written notice containing
a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and
to defend himself with the assistance of his
representative if he so desires in accordance with
company rules and regulations promulgated
pursuant to guidelines set by the Department of
Labor and Employment. Any decision taken by the
employer shall be without prejudice to the right of
the worker to contest the validity or legality of his
dismissal by filing a complaint with the regional
branch of the National Labor Relations
Commission. The burden of proving that the
termination was for a valid or authorized cause
shall rest on the employer. The Secretary of the
Department of Labor and Employment 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
Department of Labor and Employment before
whom such dispute is pending that the term.
1.! Nature/Rationale
Llosa Tan v. Silahis International Hotel, 181 SCRA
738 (1990)
Facts: Complainant, despite a corporate policy
prohibiting encashing personal checks of
employees, encashed a check upon the
representation of a nephew of the Executive VP of
Silahis and in light of her previous experience
 wherein the said policy was relaxed. She was
terminated from employment.
Ruling: The Court held that such is not gross
negligence. Dismissal based on loss of trust and
confidence arising from alleged misconduct of
employee, is not to be used as a shield to dismiss
an employee arbitrarily. Although the power to
dismiss is a normal prerogative of the employer,
the same is not without limitations. The right of the
employer must not be exercised arbitrarily and
without just cause.
2.! Coverage
Labajo v. Alejandro, 165 SCRA 747 (1988)
Skillworld Management and Marketing Corporation
v. NLRC, 186 SCRA 465 (1990)
Facts: Respondent was working as a driver for
Shary Limousine in Jeddah, Saudi Arabia, when he
was
stopped by police on a checkpoint. He presented
documents given to him by employer but was told
by the police that they were not valid driver’s
license. He confronted his superior about this and
was sent home for it. He filed a complaint for illegal
dismissal. Petitioner’s claim that he was
probationary and may be fired at any time, and that
NLRC committed grave abuse of discretion when
it denied petitioner’s petition for relief
judgment.
Ruling: Court rules that probationary employees
may not be fired for reasons not stated under law,
and no abuse of discretion was done in denying
the petition, as parties cannot proffer arguments
during a petition before the SC. Valid and just
causes for termination were not proven.
Inter-Orient Maritime Enterprises Inc. v. NLRC, 235
SCRA 268 (1994)
Facts: Captain Tayong was hired by petitioners as
master of a vessel that will ship 120,000 metric
tons of
coal to South Africa. On its way there, it
encountered problems because the vessel’s turbo-
charger
was leaking, and its economizer needed repairs.
Because of these problems, it encountered delay
in
reaching the port of destination. Upon reaching
South Africa, Captain Tayong was relieved from
duty
and was repatriated back to the PHL.
Ruling: The SC ruled that Captain Tayong was
illegaly dismissed from office, considering that a
ship’s captain must be accorded a reasonable
measure of discretionary authority to decide what
the safety of the ship and of its crew and cargo
specifically requires on a stipulated ocean voyage.
Here, the delay was due to the precautionary
measures taken by Captain Tayong upon the
advice of the ship’s Chief Engineer. Court said that
such action cannot amount to arbitrary, capricious
or grossly insubordinate behavior on his part. It was
also found by the Court that he was not afforded
due process in such dismissal.
3.! Management Prerogative
a Negros Slashers, Inc. v. Alvin L. Teng, 666 SCRA
629 (2012)
Doctrine: “In this regard, it is a hornbook doctrine
from 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. Rustan’s Commercial
Corporation)
Facts: Alvin Teng was a professional basketball
player who was terminated because he untied his
shoes and donned his practice jersey after being
benched in one championship game, and then did
not play in the next game after calling in sick. He
filed for illegal dismissal.

Rulings: The Court held that while Teng’s act were
indeed unprofessional and irresponsible, the
petitioners mistakenly handed respondent the
ultimate penalty of dismissal when a severe
reprimand or suspension would’ve sufficed.
Dongon v. Rapid Movers and Forwarders Co., Inc.,
(2013)
Doctrine: Management prerogative will be upheld
as long as it is not wielded as an implement to
circumvent the law. The following things must be
taken into consideration:
1.! Length of service
2.! Number of infractions during employment
Facts: Dongon was dismissed because
committed an act of representation when he lent
his ID to his driver, Villaruz, when they were
deliverying goods of Rapid Movers (his employer)
to the Tanduay warehouse (Rapid Movers’ client).
Ruling: The court ruled that although a wide latitude
of discretion given to the employer in managing its
own affairs, this exercise of management
prerogative is not limitless, but hemmed in good
faith and due consideration of the rights of the
worker. Such practice must be commensurate to
the offense involved and to the degree of the
infraction. Some factors that may be taken in
consideration in exercising this prerogative are the
length of service and number of infractions.
3.! Guidelines in the Disposition of
Disputes
Mansion Printing Center v. Bitara (2012)
Facts: Petitioner is the employer of respondent who
was habitually tardy and absent which led to his
termination. Respondent then filed a complaint for
illegal dismissal against petitioner.
Issue: Whether or no he was legally dismissed
wherein
Ruling: Supreme Court answered in the affirmative
stating that not only were the petitioners able to
prove the habitual tardiness and absenteeism of
the respondent but also complied with the
procedural due process asked of them.
4.! Guidelines on Imposition of Penalty
Valiao v. Court of Appeals, (2004)
SUMMARY: Valioa held different positions in WNC
and in all positions he was habitually tardy and
absent. He was charged with violation of Drugs act.
a notice of hearing/investigation was sent to the
petitioner. He was placed on preventive
suspension after investigation and hearing, the
investigation committee recommended the
dismissal of petitioner. A notice of termination was
he then sent to petitioner informing him of his
termination from the service for serious misconduct
and gross and habitual neglect of duty. The court
ruled he was validly dismissed for a valid and just
cause which is serious misconduct and gross
habitual neglect of duties, including habitual
tardiness and absenteeism even without the arrest
incident, WNC had more than enough basis for
terminating petitioner from employment. The totality
of infractions or the number of violations committed
during the period of employment shall be
considered in determining the penalty to be
imposed upon an erring employee. Also Due
Process was afforded Valiao bcause a notice to
explain was sent to him regarding the arrest
incident wherein he was able to reply.An
investigation committee was formed by WNC to
Labor investigate the arrest incident and the absences
and tardiness of petitioner. Finally, a notice of his
termination was sent to petitioner. petitioner was
given enough opportunity to be heard, and his
dismissal was based on valid grounds
Etchuban v. Sulpicio Lines, Inc., 448 SCRA 516
(2005)
SUMMARY: Petitioner was dismissed from service
on the ground of loss of trust and confidence after
an anomaly in the issuance of tickets was
discovered. The Court held that there was sufficient
 basis for loss of trust and confidence on him.
someone whose job involves a high degree of
responsibility requiring trust and confidence, he is
not an ordinary rank-and-file employee. Proof
beyond reasonable doubt is not required. Dismissal
from service is the proper penalty since his
continuance in the extremely sensitive fiduciary
position of Chief Purser would be patently inimical
to the respondents interests. He is not entitled to
separation pay.
3. Termination of Employment by Employee
1.! Resignation
, the the various letters which also reiterated that
Lazaro v. Dacut et. al. v. CA, 550 SCRA 260 (2008)
1) Just Causes, Art. 300 (b)
2) Without Just Cause – Requisites, Art. 300 (a);
Const. Art. III, Sec. 18 (2)
1.!
Azcor Manufacturing v. NLRC, 303 SCRA 26
(1999)
SUMMARY:
Capulso was hired as ceramic worker;
due to his work, he got sick of bronchial asthma
and thus requested to go on sick leave upon
recommendation of his doctor. After recuperating,
he went back to AZCOR to work but denied
multiple times. He filed a complaint for illegal
dismissal. AZCOR purported that he resigned from
the company and applied in Filipinas Paso, which
after a year, also resigned from. Court cited the
irregularities in the resignation letters presented and
the fact that Capulco intended to work negates
claim of resignation.
DOCTRINE:
To constitute a resignation, it must be
unconditional and with the intent to operate as
such. There must be an intention to relinquish a
portion of the term of office accompanied by an
act of relinquishment
Michelle Tuazon v. Bank of Commerce, et al.,
(2012)
Summary: Michelle Tuason filed a complaint for
constructive dismissal against BOC after being
asked to resign and eventually being replaced by
Estrada as head of BOC’s PMG while she was on
leave as evidenced by various letter exchanges
between her and Uranza or Padilla. BOC alleges
that there was no constructive dismissal because
they offered Tuason a new position in the BOC
Business Segment which she refused. The LA
dismissed the Complaint while the NLRC ruled that
there was constructive dismissal as evidenced by
Padilla asked her to resign and when she refused
BOC replaced her as Head of PMG and only gave
her a new assignment as an afterthought. BOC
appealed to the CA and the CA ruled in favor of
BOC. The SC then affirmed NLRC’s ruling.
Doctrine: Test of constructive dismissal is whether
a reasonable person in the employee's position
would have felt compelled to give up his position
under the circumstances. It is an act amounting to
dismissal but is made to appear as if it were not.
Constructive dismissal is therefore a dismissal in
disguise. The law recognizes and resolves this
situation in favor of employees in order to protect
their rights and interests from the coercive acts of
the employer.
2.! Forced Resignation
Mandapat v. Add Force Personnel Services, Inc.
(2010)
4. Termination of Employment by Employer
Basis of Right and Requirements
ART. 293. [278] Coverage. The provisions of this
Title shall apply to all establishments or
undertakings, whether for profit or not.
ART. 294, supra
ART. 295. [280] Regular and Casual Employment.
The provisions of written agreement to the contrary
notwithstanding and regardless of the oral
agreement of the parties, an employment shall be
deemed to be regular where the employee has
been engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the employer, except where
the employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined at the
time of the engagement of the employee or where
the work or service to be performed is seasonal in
nature and the employment is for the duration of
the season. An employment shall be deemed to
be casual if it is not covered by the preceding
paragraph: Provided, That any employee who has
rendered at least one year of service, whether such
service is continuous or broken, shall be
considered a regular employee with respect to the
activity in which he is employed and his
employment shall continue while such activity
exists.
ART. 296. [281] Probationary Employment.
Probationary employment shall not exceed six (6)
months from the date the employee started
working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services
of an employee who has been engaged on a
probationary basis may be terminated for a just
cause or when he fails to qualify as a regular
employee in accordance with reasonable
standards made known by the employer to the
employee at the time of his engagement. An
employee who is allowed to work after a
probationary period shall be considered a regular
employee.
ART. 298. [283] Closure of Establishment and
Reduction of Personnel. The employer may also
terminate the employment of any employee due to
the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the
closing or cessation of operation of the
establishment or undertaking unless the closing is
for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers
and the Ministry of Labor and Employment at least
one (1) month before the intended date thereof. In
case of termination due to the installation of labor-
saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay
equivalent to at least his one (1) month pay or to
at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to
prevent losses and in cases of closures or
cessation of operations of establishment or
undertaking not due to serious business losses or
financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-
half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6)
months shall be considered one (1) whole year.
ART. 299. [284] Disease as Ground for
Termination. An employer may terminate the
services of an employee who has been found to
be suffering from any disease and whose
continued employment is prohibited by law or is
prejudicial to his health as well as to the health of
his co-employees: Provided, That he is paid
separation pay equivalent to at least one (1) month
salary or to one-half (1/2) month salary for every
year of service, whichever is greater, a fraction of
at least six (6) months being considered as one
(1) whole year.
ART. 300. [285] Termination by Employee.
(a) An employee may terminate without just cause
the employee-employer relationship by serving a
written notice on the employer at least one (1)
month in advance. The employer upon whom no
such notice was served may hold the employee
liable for damages.
(b) An employee may put an end to the
relationship without serving any notice on the
employer for any of the following just causes:
1. Serious insult by the employer or his
representative on the honor and person of the
employee;
2. Inhuman and unbearable treatment accorded the
employee by the employer or his representative;
3. Commission of a crime or offense by the
employer or his representative against the person
 of the employee or any of the immediate members
of his family; and
4. Other causes analogous to any of the foregoing.
ART. 301. [286] When Employment not Deemed
Terminated. The bona fide suspension of the
operation of a business or undertaking for a period
not exceeding six (6) months, or the fulfillment by
the employee of a military or civic duty shall not
terminate employment. In all such cases, the
employer shall reinstate the employee to his former
position without loss of seniority rights if he
indicates his desire to resume his work not later
than one (1) month from the resumption of
operations of his employer or from his relief from
the military or civic duty.
1) Basis: Employer’s Self-Protection
Const., Art. XIII, Sec. 3, pars. 2 & 3, lam mo yan
Bienvenido Gilles v. CA, Schema Konsult (2009)
Norman Yabut v. MECO (2012)
Summary: Yabut worked for Meralco as a field
representative. He was tasked to test electric
meters, investigate records of violations of
contracts, etc. He received a notice from Meralco’s
Legal Office saying that they had inspected his
electric meter. Such inspection showed that despite
earlier disconnection because of his failure to pay
his bils, his electric meter still registered electric
consumption. Shunting wires were also attached to
his meter and the said wires were connected to
his neighbor’s meter. He was sent a notice of
dismissal. He filed a complaint for illegal dismissal
and money claims. The Court ruled that he was
legally terminated because of serious misconduct
because 1) it was willful and deliberate on his part
and pursued solely to wrongfully obtain electric
power through unlawful means 2) it was related to
his duties as field representative, as he had
knowledge on meter operations, and he used such
knowledge to illegally obtain electricity and 4) his
involvement in this incident deems him no longer
fit to continue performing his functions for Meralco.
2) Requisites of Lawful Dismissal: Substantive
and Procedural Due Process
Philippine National Bank v. Cabanag, 460 SCRA
514 (2005)
Metro Eye Security, Inc. v. Julie V. Solsona, 534
SCRA 375 (2007)
b. Substantive Requirements – Just Causes
ART. 297. [282] Termination by Employer. An
employer may terminate an employment for any of
the following causes:
(a) Serious misconduct or willful disobedience by
the employee of the lawful orders of his employer
or representative in connection with his work;
(b) Gross and habitual neglect by the employee of
his duties;
(c) Fraud or willful breach by the employee of the
trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the
employee against the person of his employer or
any immediate member of his family or his duly
authorized representatives; and
(e) Other causes analogous to the foregoing.
ART. 294. [279] Security of Tenure. In cases of
regular employment, the employer shall not
terminate the services of an employee except for a
just cause or when authorized by this Title. An
employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent
computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.
ART. 292. [277] Miscellaneous Provisions xxx
(b) Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and authorized
cause and without prejudice to the requirement of
notice under Article 283 of this Code, employer
 shall furnish the worker whose employment is
sought to be terminated a written notice containing
a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and
to defend himself with the assistance of his
representative if he so desires in accordance with
company rules and regulations promulgated
pursuant to guidelines set by the Department of
Labor and Employment. Any decision taken by the
employer shall be without prejudice to the right of
the worker to contest the validity or legality of his
dismissal by filing a complaint with the regional
branch of the National Labor Relations
Commission. The burden of proving that the
termination was for a valid or authorized cause
shall rest on the employer. The Secretary of the
Department of Labor and Employment 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
Department of Labor and Employment before
whom such dispute is pending that the term.
1.! Serious Misconduct, Art. 297 (a), supra
Elements:
a) There must be misconduct;
b) The misconduct must be of such grave and
aggravated character;
c) It must relate to the performance of the employee’s
duties; and
d) There must be showing that the employee
becomes unfit to continue working for the employer.
[Sec. 5.2. (a), DO 147-15]
Northwest Airlines doctrine: Misconduct refers to the
improper or wrong conduct that transgresses some
established and definite rule of action, a forbidden act,
a dereliction of duty, willful in character, and implies
wrongful intent and not mere error in judgment. But
misconduct or improper behavior, to be a just cause
for termination of employment, must: (a) be serious;
(b) relate to the performance of the employee’s
duties; and (c) show that the employee has become
unfit to continue working for the employer.
Northwest Airlines, Inc v. Del Rosario, 734 SCRA
514 (2014)
Coffee Bean & Tea Leaf Phil., Inc. and Chu v.
Arenas, 753 SCRA 187 (2015)
2) Willful Disobedience (insubordination), Art. 297 (a),
supra
Elements:
a) There must be disobedience or insubordination;
b) The disobedience or insubordination must be
willful or intentional characterized by a wrongful and
perverse attitude;
c) The order violated must be reasonable, lawful, and
made known to the employee [Mirant Philippines
Corp v. Sario, G.R. No. 197598 (2012)]; and
e) The order must pertain to the duties which he has
been engaged to discharge. [Sec. 5.2. (b), DO 147-
15]
CBTL Doctrine: For willful disobedience to be a valid
cause for dismissal, these two elements must concur:
(1) the employee’s assailed conduct must have been
willful, that is, characterized by a wrongful and
perverse attitude; and (2) the order violated must have
been reasonable, lawful, made known to the
employee, and must pertain to the duties which he
had been engaged to discharge.
Lores Realty Enterprises, Inc. v. Virginia E. Pacia, 645 SCRA
121 (2101)
Mirant (Phil) Corp. v. Danilo A. Sario (2012)
Nathaniel N. Dongon v. Rapid Movers and Forwarders
Co. (2013)
Summary: Dongon was dismissed because he
committed an act of representation when he lent his
ID to his driver, Villaruz, when they were deliverying
goods of Rapid Movers (his employer) to the Tanduay
warehouse (Rapid Movers’ client). The court ruled that
although a wide latitude of discretion given to the
employer in managing its own affairs, this exercise of
management prerogative is not limitless, but hemmed
in good faith and due consideration of the rights of
the worker. Such practice must be commensurate to
the offense involved and to the degree of the
infraction. Some factors that may be taken in
consideration in exercising this prerogative are the
length of service and number of infractions.
3) Gross and Habitual Neglect of Duties, Art. 297 (b),
supra
Elements:
(a) There must be neglect of duty; and
(b) The negligence must be both gross and habitual
in character.
Philippine National Bank v. Dan Padao, 660 SCRA
289 (2011)
Jumuad v. Hi-Flyer Food, Inc., 657 SCRA 288
(2011)
Cavite Apparel, Inc. & Timoteo v. Marquez, 690
SCRA 48 (2013)
Century Iron Works, Inc. and Benito Chua v. Eleto
B. Bañas, 699 SCRA 157 (2013)
4) Fraud or Willful Breach of Trust, Art. 297 (c), supra
Elements of fraud or willful breach of trust:
(a) There must be an act, omission, or concealment;
(b) The act, omission or concealment involves a
breach of legal duty, trust, or confidence justly
reposed;
(c) It must be committed against the employer or
his/her representative; and
(d) It must be in connection with the employees’
work
Guidelines in the Application of the Doctrine; Two
Classes of Positions of Trust
(1) Managerial employees - those vested with the
powers or prerogatives to lay down management
policies and to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees or
effectively recommend such managerial actions.
(2) Fiduciary Rank and file - those who in the normal
and routine exercise of their functions, regularly
handle significant amounts of money or property.
Examples are cashiers, auditors, property custodians,
etc. [Prudential Guarantee and Assurance Employee
Labor Union v. NLRC ]
Prudential Guarantees and Assurance Employees
Labor Union v. NLRC, 673 SCRA 375 (2012)
P.J. Lhuiller, Incl v. Velayo, 740 SCRA 147 (2014)
Managerial Employees
The employer has broader discretion in dismissing
managerial employees on the ground of loss of trust
and confidence than those occupying ordinary ranks.
While plain accusations are not sufficient to justify the
dismissal of rank and file employees, the mere
existence of a basis for believing that managerial
employees have breached the trust reposed on them
by their employer would suffice to justify their
dismissal.
Manese, et al. v. Jollibee Foods, et al., 684 SCRA
34 (2012)
Rolando DS. Torres v. Rural Bank of San Juan, Inc.,
et al., 693 SCRA 357 (2013)
2.! Commission of Crime, Art. 288 [297] (d),
supra
Elements:
(a) There must be an act or omission
punishable/prohibited by law; and
(b) The act or omission was committed by the
employee against the person of the employer, any
immediate member of his/her family, or his/her duly
authorized representative.
Sampaguita Garments Corporation v. NLRC, 233
SCRA 260 (1994)
3.! Analogous, Art. 288 [297] (e), supra
Elements:
(a) There must be an act or omission similar to those
specified just causes; and
(b) The act or omission must be voluntary and/or
willful on the part of the employees
 Cathedral School of Technology v. NLRC, 214 for past unfair labor practices of the previous owner,
SCRA 551, 559 (1992) except, when the liability therefor is assumed by the
new employer under the contract of sale, or when
Sampaguita Auto Transport Corp. v. NLRC & Sagad, liability arises because of the new owner’s
689 SCRA 777 (2013) participation in thwarting or defeating the rights of the
employees” [manlimos v NLRC]
4.! Others – Just Causes Claimed by Employer
Manlimos v. NLRC, 242 SCRA 145 (1995)
1.! Abandonment
Elcee Farms, Inc. v. NLRC, 512 SCRA 602 (2007)
Absence must be accompanied by overt acts
unerringly pointing to the fact that the employee 4.! Habitual Absenteeism/Tardiness
simply does not want to work anymore. It has been
ruled that the employer has the burden of proof to
show a deliberate and unjustified refusal of the Manila Electric Co. v. NLRC, 263 SCRA 531 (1996)
employee to resume his employment without any
intention of returning. [Tan Brothers Corp. of Basilan 5.! Inefficiency
City v. Escudero]
Sameer Overseas Placement Agency, Inc. v. Joy
Floren Hotel v. NLRC, 456 SCRA 128 (2005) Cabiles, 732 SCRA 22 (2014)

EG & Const. Corp. & Edsel Galeos v. Ananias P. Sato,

et al., 643 SCRA 492 (2011) 6.! Past offenses

Tan Brothers Corporation of Basilan City through its
Owner/Manager, Mauro F. Tan v. Edna R.
Escudero, 700 SCRA 583 (2013)
2.! Courtesy Resignation
Resignation per se means voluntary relinquishment of
a position or office. Adding the word "courtesy" did
not change the essence of resignation. [Batongbacal
v. Associated Bank]
Previous offense may be used as valid justification for
dismissal from work only if the infractions are related
to the subsequent offense upon which the basis of
termination is decreed. [Century Canning Corporation
v. Ramil]
Ramoran v. Jardine CMG Life Insurance Co., Inc.
326 SCRA 208 (2000)
Century Canning Corp. v. Vicente Randy R. Ramil,
627 SCRA 192 (2010)

Batongbacal v. Associated Bank, 168 SCRA 600 7.! Immorality

(1988) DECS Order No. 92 provides that disgraceful or
immoral conduct can be used as a basis for
3.! Change of Ownership termination of employment [Santos, Jr. v. NLRC]

Central v. CA: “In a number of cases on this point, Santos v. NLRC, 287 SCRA 117 (1998)
the rule has been laid down that the sale or
disposition must be motivated by good faith as an Capin-Cadiz v. Brent Hospital and Colleges, Inc.
element of exemption from liability. Indeed, an supra
innocent transferee of a business establishment has
no liability to the employees of the transferor to 8.! Pregnancy out of Wedlock
continue employing them. Nor is the transferee liable
Accordingly, when the law speaks of immoral or,
necessarily, disgraceful conduct, it pertains to public OSS Security & Allied Services Inc. v. NLRC, 325
and secular morality; it refers to those conducts which SCRA 157 (2000)
are proscribed because they are detrimental to
conditions upon which depend the existence and
progress of human society. To stress, pre- marital Jonathan Morales v. Harbor Centre Port Terminal,
sexual relations between two consenting adults who Inc., 664 SCRA 110 (2012)
have no impediment to marry each other, and,
consequently, conceiving a child out of wedlock, Best Wear Garments v. Lemos & Ocubillo, 687
gauged from a purely public and secular view of SCRA 355 (2012)
morality, does not amount to a disgraceful or immoral
conduct under Section 94(e) of the 1992 MRPS. 9) Promotion
[Cheryl Leus v. St. Scholastica College Westgrove]
Phil. Telegraph & Telephone Corp. v. Court of
Leus v. St. Scholastica’s College Westgrove, 748 Appeals, 412 SCRA 263 (2003)
SCRA 378 (2015)
10) Residency Training
9.! Qualification Requirements
Felix v. Buenaseda, 240 SCRA 139 (1995)
Right of workers to security of tenure may be
reasonably regulated pursuant to the police power of 11) Preventive Suspension
the state.
Book V, Rule XXII, Secs. 8, 9 (Old provision – prior to
It is the policy of the state to upgrade the practice of DO 40-03) [Note: at present, no specific rule governs
radiologic technology in the PH for the purpose of preventive Suspension]
protecting the public from the hazards posed by
radiation as well as to ensure safe and proper c. Substantive Requirements – Authorized
diagnosis, treatment and research through application Causes
of machines and/or equipment using radiation. [St Authorized Causes:
Lukes v NLRC] (1) Installation of labor saving device
(2) Retrenchment to prevent losses
St. Luke’s Medical Center Employee’s Association- (3) Redundancy
AFW (SLMCEA-AFW) v. NLRC, supra (4) Closure of Business

7) Constructive Dismissal ART. 298. [283] Closure of Establishment and

The Philippine American Life and General Insurance
Co. v. Gramaje 442 SCRA 274 (2004)
Dusit Hotel Nikko v. National Union in Hotel,
Restaurant and Allied Industries (NUWHRAIN)-Dusit
Hotel Nikko Chapter, 466 SCRA 374 (2005)
Divine Word College of Laoag v. Mina, G.R. No.
195155, 13 Apr. 2016
8) Transfer/Reassignment of Work
Reduction of Personnel. The employer may also
terminate the employment of any employee due to
the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the
closing or cessation of operation of the
establishment or undertaking unless the closing is
for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers
and the Ministry of Labor and Employment at least
one (1) month before the intended date thereof. In
case of termination due to the installation of labor-
saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay
 equivalent to at least his one (1) month pay or to At least 1 month before the intended date of
at least one (1) month pay for every year of service, termination, Employer is to serve written notice to:
whichever is higher. In case of retrenchment to 1. Affected employees
prevent losses and in cases of closures or 2. DOLE
cessation of operations of establishment or
undertaking not due to serious business losses or Eastridge Golf Club, Inc. v. Eastridge Labor Union-
financial reverses, the separation pay shall be SUPER, 563 SCRA 93 (2009)
equivalent to one (1) month pay or at least one- '
half (1/2) month pay for every year of service, Manila Polo Club Employees’ Union (MPCEU) FUR-
whichever is higher. A fraction of at least six (6) TUCP v. Manila Polo Club, Inc. 702 SCRA 20 (2013)
months shall be considered one (1) whole year. '
Sangwoo Philippines, Inc., et al. v. Sangwoo
Philippines, Inc. Employees Union-OLALIA, 711
1.! Basis: Employer’s Right – Const., Art. XIII, SCRA 618 (2013)
Sec. 3, par. 4, supra; Art. 298, supra
Comparison:
Edge Apparel Inc. v. NLRC, 286 SCRA 302 (1998)
Labor- saving devices/ Retrenchment, closure/
2.! Business Related or Authorized Causes, Art. redundancy suspension of
298, supra operations
1- month pay or at 1 month pay, or at
a) Installation of Labor Saving Devices least 1 month pay for least ½ month pay for
every year of service, every year of service
b) Retrenchment to Prevent Losses whichever is higher whichever is higher
' A fraction of at least six months shall be
Flight Attendant & Stewards Association of the considered as 1 year
Philippines v. PAL, 602 SCRA 473 (2009)
' Retrenchment Redundancy Closure
Sanoh Fulton Phils., Inc. and Mr. Eddie Jose v. Reduction of The service of The reversal of
Emmanuel Bernardo and Samuel Taghoy, 703 personnel an Employee the fortune of
SCRA 565 (2013) usually due to is in excess of the employer
' poor financial what is whereby there
Philippine Airlines, Inc. v. Ligan, et al., G.R. No. returns so as required by an is a complete
203932, 8 June 2016 to cut down on enterprise cessation of
costs of business
c) Redundancy operations in operations
terms of and/or actual
Asufrin v. San Miguel Corp., 425 SCRA 270 (2004) salaries and locking-up of
' wages the doors of
SPI Technologies, Inc. and Lea Villanueva v. Victoria the
K. Mapua, 720 SCRA 743 (2014) establishment,
' usually due to
Ocean East Agency Corp., et al. v. Lopez, G.R. No. financial losses
194410, 14 Oct. 2015
Resorted to To save Aims to further
d) Closure of Business primarily to production financial drain
avoid mor costs upon the
Two notice rule: minimize Employer
 business he or she is, becomes, and, for the duration of the
losses agreement, remains a member in good standing of a
Employer is Employee is In case of union entirely comprised of or of which the
entitled to entitled to closure of employees in interest are a part.
separation pay separation pay business not
of 1 month pay of 1 month pay due to serious Union shop – when all new regular employees are
or ½ pay per or ½ month business required to join the union within a certain period as a
year of service, pay per year of losses, the condition for their continued employment.
whichever is service, employer pays Law authorizes the enforcement of union security
higher whichever is the employees clauses, provided such enforcement is not
higher terminated characterized by arbitrariness, and always with due
separation pay process.
of 1 month pay (1) Substantive – whether the termination of
or ½ month employment was based on the provisions of the
pay per year of Labor Code or in accordance with the prevailing
service, jurisprudence;
whichever is In terminating the employment of an employee by
higher enforcing the Union Security Clause, the employer
needs only to determine and prove that:
•! (a) The union security clause is applicable;
3.! Disease •! (b) The union is requesting for the enforcement
of the union security provision in the CBA; and
ART. 299. [284] Disease as Ground for •! (c) There is sufficient evidence to support the
Termination. An employer may terminate the union's decision to expel the employee from the
services of an employee who has been found to union or company.
be suffering from any disease and whose
continued employment is prohibited by law or is (2) Procedural – the manner in which the dismissal
prejudicial to his health as well as to the health of was effected.
his co-employees: Provided, That he is paid 1.! (a) The first written notice to be served on
separation pay equivalent to at least one (1) month the employees should contain the specific
salary or to one-half (1/2) month salary for every causes or grounds for termination against
year of service, whichever is greater, a fraction of them, and a directive that the employees are
at least six (6) months being considered as one given the opportunity to submit their written
(1) whole year explanation within a reasonable period.
2.! (b) The requirement of a hearing is
Deoferio v. Intel Technology Philippines, Inc., 726 complied with as long as there was an
SCRA 676 (2014) opportunity

4.! Enforcement of Union Security Clause in the (c)

CBA
Union security is a generic term, which is applied to
and comprehends:
Closed shop – an enterprise in which, by agreement
between the employer and his employees or their
representatives, no person may be employed in any
or certain agreed departments of the enterprise unless
to be heard, and not necessarily that an actual hearing
was conducted.
After determining that termination of employment is
justified, the employers shall serve the employees a
written notice of termination indicating that: (1) all
circumstances involving the charge against the
employees have been considered; and (2) grounds
have been established to justify the severance of their
employment.

Inguillo & Bergante v. First Phil. Scales, Inc., 588
SCRA 471 (2009)
3.! Dismissal of Union officers in Illegal
Strike/dismissal of Union Members in the
Commission of Illegal Acts
ART. 279. [264] Prohibited activities. (a) No labor
organization or employer shall declare a strike or
lockout without first having bargained collectively in
accordance with Title VII of this Book or without
first having filed the notice required in the
preceding Article or without the necessary strike or
lockout vote first having been obtained and
reported to the Ministry. No strike or lockout shall
be declared after assumption of jurisdiction by the
President or the Minister or after certification or
submission of the dispute to compulsory or
voluntary arbitration or during the pendency of
cases involving the same grounds for the strike or
lockout. Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with full
backwages. Any union officer who knowingly
participates in an illegal strike and any worker or
union officer who knowingly participates in the
commission of illegal acts during a strike may be
declared to have lost his employment status:
Provided, That mere participation of a worker in a
lawful strike shall not constitute sufficient ground for
termination of his employment, even if a
replacement had been hired by the employer
during such lawful strike.
4.! Termination for Failure to Meet Qualification
Requirement
While the right of workers to security of tenure is
guaranteed by the Constitution, its exercise may be
reasonably regulated pursuant to the police power of
the State to safeguard health, morals, peace,
education, order, safety, and the general welfare of
the people. Consequently, persons who desire to
engage in the learned professions requiring scientific
or technical knowledge may be required to take an
examination as a prerequisite to engaging in their
chosen careers. [St. Lukes’s Medical Center
Employees Ass'n-AFW v. NLRC]
University of the East, et al. v. Pepanio, 689 SCRA
250 (2013)
See: St. Luke’s Medical Center Employees
Association – AFW v. NLRC, 7 Mar. 2007
d. Procedural Requirements, Art. 292 (b); Book
VI, Rule I, Secs. 1-3 Omnibus Rules
ART. 292. [277] Miscellaneous Provisions.
b) Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and authorized
cause and without prejudice to the requirement of
notice under Article 283 of this Code, the
employer shall furnish the worker whose
employment is sought to be terminated a written
notice containing a statement of the causes for
termination and shall afford the latter ample
opportunity to be heard and to defend himself
with the assistance of his representative if he so
desires in accordance with company rules and
regulations promulgated pursuant to guidelines
set by the Department of Labor and Employment.
Any decision taken by the employer shall be
without prejudice to the right of the worker to
contest the validity or legality of his dismissal by
filing a complaint with the regional branch of the
National Labor Relations Commission. The burden
of proving that the termination was for a valid or
authorized cause shall rest on the employer. The
Secretary of the Department of Labor and
Employment 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 Department of Labor
and Employment before whom such dispute is
pending that the termination may cause a serious
labor dispute or is in implementation of a mass
lay-off.
1) Essential Elements; Liability for Non-
Compliance with Procedural Requirements
Serrano v. NLRC, 323 SCRA 445 (2000)
W/N the non-observance of the notice
requirement makes the termination of the
petitioner violative of the Due Process Clause
under the Constitution. NO
o Art. 283 of the Labor Code provides that to
terminate the employment of an employee for any
of the authorized causes the employer must serve
"a written notice on the workers and the
Department of Labor and Employment at least
one (1) month before the intended date thereof."
▪ Here, petitioner was given a notice of
termination on October 11, 1991. On the same
day, his services were terminated.
▪ He was thus denied his right to be given written
notice before the termination of his employment,
and the question is the appropriate sanction for
the violation of petitioner’s right.
o However, such failure to observe the notice
requirement is not a violation of the Due Process
Clause of the Constitution.
▪ Due Process Clause of the Constitution is a
limitation on governmental powers. It does not
apply to the exercise of private power, such as
the termination of employment under the Labor
Code.
▪ The purpose for requiring a 30-day written
notice before an employee is laid off is not to
afford him an opportunity to be heard on any
charge against him, for there is none. The
purpose rather is to give him time to prepare for
the eventual loss of his job and the DOLE an
opportunity to determine whether economic
causes do exist justifying the termination of his
employment.
▪ Third reason why the notice requirement under
Art. 283 can not be considered a requirement of
the Due Process Clause is that the employer
cannot really be expected to be entirely an
impartial judge of his own cause.
o With respect to Art. 283 of the Labor Code, the
employer’s failure to comply with the notice
requirement does not constitute a denial of due
process but a mere failure to observe a
procedure for the termination of employment
which makes the termination of employment
merely ineffectual.
o The refusal to look beyond the validity of the
initial action taken by the employer to terminate
employment either for an authorized or just cause
can result in an injustice to the employer.
▪ For not giving notice and hearing before
dismissing an employee, who is otherwise guilty
of, say, theft, or even of an attempt against the life
of the employer, an employer will be forced to
keep in his employ such guilty employee. This is
unjust.
o If in proceedings for reinstatement under Art.
283, it is shown that the termination of
employment was due to an authorized cause,
then the employee concerned should not be
ordered reinstated even though there is failure to
comply with the 30-day notice requirement.
▪ Instead, he must be granted separation pay in
accordance with Art. 283.
'
Agabon v. NLRC, 442 SCRA 573 (2004)
Agabon and Agabon were employed by Riviera
Home Improvements as installers until they were
dismissed from work due to abandonment
Agabons claim, among others that Riviera violated
the requirements of notice and hearing when the
latter did not send written letters of termination to
their addresses. Riviera admitted to not sending the
as the Agabons do not reside there anymore.
The dismissal should be upheld because it was
established that the pets abandoned their jobs to
work for another company. Private respondent,
however, did not follow the notice requirements in
violation of procedural due process. Before
Wenphil, dismissal is illegal without notice. In
Wenphil: a dismissed employee, although not
given any notice and hearing, was not entitled to
reinstatement and backwages because the
dismissal was for just ground for termination under
LC 282. Where the employer had a valid reason
to dismiss an employee but did not follow the due
process requirement, the dismissal may be upheld
but the employer will be penalized to pay an
indemnity to the employee. In Serrano, the violation
by the employer of the notice requirement in
termination for just or authorized causes was not a
denial of due process that will nullify the
 termination. However, the dismissal is ineffectual
and the employer must pay full backwages from
the time of termination until it is judicially declared
that the dismissal was for a just or authorized cause
Serrano did not consider the full meaning of LC
279. Such means that the termination is illegal only
if it is not for any of the justified or authorized
causes provided by law. Payment of backwages
and other benefits, including reinstatement, is
justified only if the employee was unjustly
dismissed.
So in cases involving dismissals for cause but
without observance of the twin requirements of
notice and hearing, the dismissal was for just cause
but imposing sanctions on the employer. Such
sanctions, however, must be stiffer than that
imposed in Wenphil. By doing so, this Court would
be able to achieve a fair result by dispensing
justice not just to employees, but to employers as
well.
'
JAKA Food Processing Corporation v, Darwin
Pacot, et al., 454 SCRA 119 (2005)
' denial of this opportunity that constitutes violation of
Sameer Overseas Placement Agency v. Cabilles,
supra
st
2) Right to Counsel, Art. 292 (b), 1 sentence
Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and authorized
cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer
shall furnish the worker whose employment is
sought to be terminated a written notice containing
a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and
to defend himself with the assistance of his
representative if he so desires in accordance with
company rules and regulations promulgated
pursuant to guidelines set by the Department of
Labor and Employment.
Salaw v. NLRC, 202 SCRA 7, 12-15 (1991)
st
3) Two-Notice Requirement – 292 (b), 1
sentence, supra
The employer has the burden of proving that a
dismissed worker has been served two notices:
•! (1) First written notice: served on the employee
specifying the ground or grounds for termination,
and giving said employee reasonable opportunity
within which to explain his side.
•! (2) Second written notice: served upon the
employee, indicating that upon due consideration
of all the circumstances, grounds have been
established to justify his termination.
SUMMARY OF RULE:
Agabon v. NLRC, supra
Sameer Overseas Placement Agency, Inc. v. Cabiles,
supra
st
3) Hearing, Art. 292 (b), 1 Sentence, supra
In employee dismissal cases, the essence of due
process is simply an opportunity to be heard; it is the
due process of law. [Technol Eight Philippines
Corporation v. NLRC, G.R. No. 187605 (2010)]
While a formal hearing or conference is ideal, it is not
an absolute, mandatory or exclusive avenue of due
process. [Perez v. PT&T, G.R. No. 152048 (2009)]
Technol Eight Phil. Corp. v. NLRC, 618 SCRA 248
(2010)
Prudential Guarantees and Assurance Employees
Labor Union v. NLRC, supra
Punongbayan and Araullo v. Lepon, G.R. No. 174115,
November 9, 2015
e. Filing of Complaint for Dismissal
1) Use of Position Paper in Labor Cases
Shoppes Manila, Inc. v. NLRC, 419 SCRA 354 (2004)
2) Supplemental Rejoinder vis-à-vis Position Paper,
2011 NLRC

Rules of Procedure
Am-Phil Food Concepts, Inc. v. Padilla, 737 SCRA 339
(2014)
3) Burden of Proof
Macasero v. Southern Industrial Gases Phil., 577
SCRA 500 (2009)
4) Degree of Proof - Substantial Evidence
Kulas Ideas & Creations, et. al. v. Alcoseba & Arao-
arao, 613 SCRA 217 (2010)
Quiro-Quiro v. Balagtas Credit Cooperative and
Community Development Dev., Inc., G.R. No. 209921,
13 Jan. 2016
5) Decision – Const., Art. VIII, Sec. 14
SECTION 14. No decision shall be rendered by any
court without expressing therein clearly and
distinctly the facts and the law on which it is based.
No petition for review or motion for reconsideration
of a decision of the court shall be refused due
course or denied without stating the legal basis
therefor.
6) Appeal; Appeal Bond, Art. 229
ART. 229. [223] Appeal. Decisions, awards, or
orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt
of such decisions, awards, or orders. Such appeal
may be entertained only on any of the following
grounds: (a) If there is prima facie evidence of
abuse of discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured
through fraud or coercion, including graft and
corruption; (c) If made purely on questions of law;
and (d) If serious errors in the findings of facts are
raised which would cause grave or irreparable
damage or injury to the appellant. In case of a
judgment involving a monetary award, an appeal
by the employer may be perfected only upon the
posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the
Commission in the amount equivalent to the
monetary award in the judgment appealed from. In
any event, the decision of the Labor Arbiter
reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned,
shall immediately be executory, even pending
appeal. The employee shall either be admitted
back to work under the same terms and conditions
prevailing prior to his dismissal or separation or, at
the option of the employer, merely reinstated in the
payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement
provided herein. To discourage frivolous or dilatory
appeals, the Commission or the Labor Arbiter shall
impose reasonable penalty, including fines or
censures, upon the erring parties. I'In all cases, the
appellant shall furnish a copy of the memorandum
of appeal to the other party who shall file an answer
not later than ten (10) calendar days from receipt
thereof. The Commission shall decide all cases
within twenty (20) calendar days from receipt of
the answer of the appellee. The decision of the
Commission shall be final and executory after ten
(10) calendar days from receipt thereof by the
parties. Any law enforcement agency may be
deputized by the Secretary of Labor and
Employment or the Commission in the enforcement
of decisions, awards or orders.
University Plans, Inc. v. Belinda Solano, et al., 652
SCRA 492 (2011)
Andrew James McBurnie v. Eulalio Ganzon, 707 SCRA
646 (2013)
SUMMARY OF PROCEDURE:
PROCEDURE TO BE OBSERVED IN TERMINATION
CASES
JUST CAUSE
Notice specifying the grounds for which dismissal is
sought -> Hearing or opportunity to be heard ->
Notice of the decision to dismiss
AUTHORIZED CAUSE
Notice to: ART. 306. [291] Money Claims. All money claims
•! (1) Employee, and arising from employer-employee relations
•! (2) DOLE at least 1 month prior to the effectivity accruing during the effectivity of this Code shall
of the separation be filed within three (3) years from the time the
cause of action accrued; otherwise they shall be
Requisites forever barred. All money claims accruing prior to
(1) Notice not needed when Employee consented to the effectivity of this Code shall be filed with the
the retrenchment or voluntarily applied for one. appropriate entities established under this Code
[International Hardware, Inc. v. NLRC, G.R. No. 80770, within one (1) year from the date of effectivity,
(1989)] and shall be processed or determined in
(2) Notice must be individual, not collective [Shoppers accordance with the implementing rules and
Gain Supermart v. NLRC, G.R. No. 110731 (1996)] regulations of the Code; otherwise, they shall be
(3) Voluntary arbitration satisfies notice requirement forever barred. Workmen’s compensation claims
for authorized causes [Revidad v. NLRC, G.R. No. prior to the effectivity of this code and during the
111105 (1995 period from November 1, 1974 up to December
31, 1974, shall be filed with the appropriate
Just/ Procedural Dismissal Liability of regional offices of the Department of Labor not
Authorized Due Employer later than March 31, 1975; otherwise, they shall
Cause Process forever be barred. The claims shall be processed
" " Valid -No liability and adjudicated in accordance with the law and
-Sep Pay only rules at the time their causes of action accrued.
in authorized
X " Illegal -Rnstmnt/
Sep Pay NCC, Article 1146. The following actions must be
-Backwages instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

X X Illegal -Rnstmnt/
Sep Pay
(2) Upon a quasi-delict;
-Backwages
" X Valid -Damages
Article 1155. The prescription of actions is interrupted
due to
when they are filed before the court, when there is a
procedural
written extrajudicial demand by the creditors, and
infirmity
when there is any written acknowledgment of the
-Sep Pay only
debt by the debtor.
in authorized
causes University of the East v. University of the East
Employees’ Association, 657 SCRA 637 (2011)
5.! Quitclaim: Requisites for Validity
Montero, et al. v. Times Transp. Co., Inc., 753 SCRA
Hypte R. Aujero v. Phil. Communications Satellite 250 (2015)
Corp., 663 SCRA 467 (2012)
7.! Principle of Res Judicata
Convoy Marketing Corp. v. Albia, G.R. No. 194969, 7
Oct. 2015 Rosales , et al. v. New ANJH Enterprises, et al., G.R.
No. 203355, 18 August 2015
6.! Laches/Prescription, Art. 306; Civil Code,
Arts. 1146, 1155 8.! Criminal Cases

Lolita S. Concepcion v. Minex Import Corp./Minera
Corp., 663 SCRA 497 (2012)
5. Reliefs; Remedies in Illegal Dismissal, Art.
294; 229
ART. 294. [279] Security of Tenure. In cases of
regular employment, the employer shall not
terminate the services of an employee except for a
just cause or when authorized by this Title. An
employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent
computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.
ART. 229. [223] Appeal. Decisions, awards, or
orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt
of such decisions, awards, or orders. Such appeal
may be entertained only on any of the following
grounds: (a) If there is prima facie evidence of
abuse of discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured
through fraud or coercion, including graft and
corruption; (c) If made purely on questions of law;
and (d) If serious errors in the findings of facts are
raised which would cause grave or irreparable
damage or injury to the appellant. In case of a
judgment involving a monetary award, an appeal
by the employer may be perfected only upon the
posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the
Commission in the amount equivalent to the
monetary award in the judgment appealed from. In
any event, the decision of the Labor Arbiter
reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned,
shall immediately be executory, even pending
appeal. The employee shall either be admitted
back to work under the same terms and conditions
prevailing prior to his dismissal or separation or, at
the option of the employer, merely reinstated in the
payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement
provided herein. To discourage frivolous or dilatory
appeals, the Commission or the Labor Arbiter shall
impose reasonable penalty, including fines or
censures, upon the erring parties. I'In all cases, the
appellant shall furnish a copy of the memorandum
of appeal to the other party who shall file an answer
not later than ten (10) calendar days from receipt
thereof. The Commission shall decide all cases
within twenty (20) calendar days from receipt of
the answer of the appellee. The decision of the
Commission shall be final and executory after ten
(10) calendar days from receipt thereof by the
parties. Any law enforcement agency may be
deputized by the Secretary of Labor and
Employment or the Commission in the enforcement
of decisions, awards or orders.
a. In General; Twin Remedies
1. Reinstatement
2. Separation pay
**If Illegally dismissed-> Full backwages
Aguilar v. Burger Machine Holdings Corp., 516
SCRA 413 (2007)
Reinstatement
Art. 285 [294], Security of Tenure
a) Definition
PNOC-EDC v. Abella, 448 SCRA 549 (2005)
Composite Enterprises, Inc. v. Emilio M. Caparoso, et
al., 529 SCRA 470 (2007)
Instances when the award of separation pay, in lieu of
reinstatement to an illegally dismissed employee, is
proper:
(1) When reinstatement is no longer possible, in
cases where the dismissed employee's position is no
longer available;
(2) The continued relationship between the employer
and the employee is no longer viable due to the
strained relations between them; and
 3) When the dismissed employee opted not to be employer, merely reinstated in the payroll. The posting
reinstated, or the payment of separation benefits of a bond by the employer shall not stay the execution
would be for the best interest of the parties involved. for reinstatement provided herein. xxx

b) Effect of Failure to Ask Relief 3.! Garcia, et al. v. PAL, 576 SCRA 479 (2009)

1.! Pheschem Industrial Corp. v. Moldez, 458 SCRA f) No Refund Doctrine

339 (2005)
An employee cannot be compelled to reimburse the
c) Exceptions salaries and wages he received during the pendency
of his appeal, notwithstanding the reversal by the
1) Closure of Business NLRC of the LA's order of reinstatement. [College of
the Immaculate Conception v. NLRC, G.R. No.
2.! Retuya v. Hon. Dumarpa, 408 SCRA 315 (2003) 167563 (2010)]

2) Economic Business Conditions 4.! College of the Immaculate Concepcion v.

NLRC and Atty. Carlos, Ph.D., 616 SCRA 299
3.! Union of Supervisors (RB) NATU, etc. v. Sec. of (2010)
Labor, 128 SCRA 442 (1984)
g) Reinstatement as Interim Relief; When
3) Employee’s Retirement/Overage Applicable

4.! Espejo v. NLRC, 255 SCRA 430 (1996)

5.! Lansangan and Cedaña v. Amkor
4) Antipathy and Antagonism – Technology Phil., Inc., 577 SCRA 493 (2009)
Strained Relations
2) Backwages, Art. 294, (Security of Tenure),
5.! Felix Martos, et al. v. New San Jose Builders, Inc., supra
684 SCRA 561 (2012)
6.! Divine Word High School v. NLRC, 143 SCRA 346 1.! Exceptions
(1986)
Integrated Microelectronics, Inc. v. Adonis A. Pionilla,
5) Not Feasible 704 SCRA 362 (2013)

1.! Bustamante v. NLRC, 265 SCRA 1 (1996) 2.! Effect of Failure to Claim

d) Offer to Reinstate 1.! De La Cruz v. NLRC, 299 SCRA 1 (1998)

2.! Ranara v. NLRC, 212 SCRA 631 (1992) 3.! Effect of Failure to Order

e) Payroll Reinstatement, Art. 229 [229], supra 4.! Aurora Land Projects Corp. v. NLRC, 266
xxx In any event, the decision of the Labor Arbiter SCRA 48 (1997)
reinstating a dismissed or separated employee, 5.! Automotive Engine Rebuilders, Inc., et al. v.
insofar as the reinstatement aspect is concerned, shall Progresibong Unyon ng mga Manggagawa
immediately be executory, even pending appeal. The sa AER, 688 SCRA 586 (2013)
employee shall either be admitted back to work under
the same terms and conditions prevailing prior to his d) Computation
dismissal or separation or, at the option of the
6.! Leo a. Gonzales v. Solid Cement Corp., 684 settings. There was no provision in the CBA providing
SCRA 344 (2012) for this. Also, the Tumajubong rubber planatation and
7.! Dario Nacar v. Gallery Frames and/or Felipe Latuan rubber plantation were two distinct entities. The
Bordey, Jr. 703 SCRA 439 (2013) workers in Latuan, alluded to by petitioners, have
been terminated pursuant to a staff reduction
e) Fringe Benefit program, due to redundancy. LC 283 provides that
employees who are dismissed due to closures that
8.! Acecite Corporation v. NLRC, 449 SCRA 360 are not due to business insolvency should be paid
(2005) separation pay equivalent to 1 month pay or 1⁄2
month pay for every year of service, whichever is
1.! Damages, Art. 111; Civil Code, Art. 2208, par. higher. Here, petitioners had served respondent for a
7 period longer than 6 months, thus separation pay
should computed at 1⁄2 month pay per year of
ART. 111. Attorney's Fees. (a) In cases of unlawful service, since there was nothing stipulated by the
withholding of wages, the culpable party may be parties in the CBA providing for pay equivalent to 1
assessed attorney’s fees equivalent to 10% of the month pay per year of service. It must be stressed
amount of wages recovered. that complainants signed quitclaims, thus barring
(b) It shall be unlawful for any person to demand them from asking for more.
or accept, in any judicial or administrative
proceedings for the recovery of wages, attorney’s
fees which exceed ten percent of the amount of 2.! Jordan v. Grandeur Security & Services, Inc.,
wages recovered. 727 SCRA 36 (2014)

3.! Computation/Rationale
Article 2208. In the absence of stipulation,
attorney's fees and expenses of litigation, other 1.! Businessday Information Systems and Services,
than judicial costs, cannot be recovered, except: Inc. v. NLRC, 221 SCRA 9 (1993)

(7) In actions for the recovery of wages of 3) Effect of Acceptance

household helpers, laborers and skilled workers;
2.! Anino v. NLRC, 290 SCRA 489 (1998)
1.! Maguiling v. Phil. Tuberculosis
Society, Inc. 450 SCRA 465 (2005) d. Financial Assistance/Separation Pay – When
2.! M + W Zander Phil., Inc., et. al. v. Allowed/Disallowed as Measure of Social Justice
Enriquez, 588 SCRA 590 (2009)
3.! Montinola v. PAL, 734 SCRA 439 Toyota Philippines, Corp. Workers Association
(2014) (TMPCWA) v. NLRC, supra

c. Separation Pay Reno Foods, inc. v. NLM-KATIPUNAN, 615 SCRA 240

(2010)
1.! When Proper; When As Alternative
Universal Robina Corporation and Lance Y.
1.! National Federation of Labor v. Court of Gokongwei v. Wilfredo Z. Castillo, 701 SCRA 64
Appeals, 440 SCRA 604 (2004) (2013)

SDPI’s past payment of separation pay at 1 month 3.! Phil., Inc., et al. v. Sangwoo Phil., Inc. Employees
pay for every year of service can’t be taken as Union-Olalia, supra
precedent or company practice due to different factual 4.!
5.! Security Bank Savings Corp. v. Singson, G.R.
214230, 10 Feb. 2016
e. Indemnity
1.! Serrano v. NLRC, supra
2.!
3.! Agabon v. NLRC, supra
f. Interest at 6% p.a. on the Total Monetary
Awards from Finality of Decision Until Full Payment
per BSP MB circular No. 799, series of 2013
When the judgment of the court awarding a sum of
money becomes final and executory, the rate of legal
interest .... shall be 6% per annum from such finality
until its satisfaction, this interim period being deemed
to be by then an equivalent to a forbearance of credit.
[Nacar v Gallery Frames, G.R. No. 189871, (2013)]
4.! Nacar v. Gallery Frames and/or Felipe
Bordey, supra
g. Liability of Corporate Officers
1.! Acesite Corp. v. NLRC, supra
2.!
3.! Manarpiis v. Texan Phil., Inc., Richard & Catherine
Tan, 748 SCRA 511 (2015)
O. Retirement
References: Art. 302, as amended by RA No. 7641;
Rules Implementing the New Retirement Law
(Implementing Rules); RA No. 8558 (1998); Labor
Advisory on Retirement Pay (Oct. 1999)
Art. 302. Retirement. Any employee may be retired
upon reaching the retirement age established in the
collective bargaining agreement or other applicable
employment contract.
In case of retirement, the employee shall be entitled
to receive such retirement benefits as he may have
earned under existing laws and any collective
bargaining agreement and other agreements:
Provided, however, That an employee’s retirement
benefits under any collective bargaining and other
agreements shall not be less than those provided
therein.
In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the
establishment, an employee upon reaching the age
of sixty (60) years or more, but not beyond sixty-five
(65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years
in the said establishment, may retire and shall be
entitled to retirement pay equivalent to at least one-
half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered
as one whole year.
Unless the parties provide for broader inclusions, the
term ‘one-half (1/2) month salary’ shall mean fifteen
(15) days plus one-twelfth (1/12) of the 13th month
pay and the cash equivalent of not more than five (5)
days of service incentive leaves.
Retail, service and agricultural establishments or
operations employing not more than ten (10)
employees or workers are exempted from the
coverage of this provision.
Violation of this provision is hereby declared unlawful
and subject to the penal provisions under Article
[294] of this Code. (As amended by RA 8558).
1. Types of Retirement
There are 3 kinds of retirement schemes.
1) compulsory and contributory
2) set-up by agreement in CBAs or agreements
3) voluntarily given by the employer in an announced
company policy, or failure to contest employee’s
claim for retirement benefits.
4.! Gerlach v. Reuters Ltd., Phil. 448 SCRA 535
(2005)
st
2. Coverage/Eligibility, Art. 302, 1 par., supra;
Rule II, Sec. 1
Rules Implementing the New Retirement Law
RULE II
Retirement Benefits
SECTION 1. General Statement on Coverage. — This
Rule shall apply to all employees in the private sector,
regardless of their position, designation or status and
irrespective of the method by which their wages are
paid, except to those specifically exempted under
Section 2 hereof. As used herein, the term “Act” shall
refer to Republic Act No. 7641 which took
effect on January 7, 1993.
Brion v. South Phil. Union Mission of the Seventh Day
Adventist Church, 307 SCRA 497 (1999)
3. Exemption, Rule II, Sec. 2
SECTION 2. Exemptions. — This Rule shall not apply
to the following employees:
2.1 Employees of the National Government and its
political subdivisions, including Government-owned
and/or controlled corporations, if they are covered by
the Civil Service Law and its regulations.
2.2 Domestic helpers and persons in the personal
service of another. (Deleted by Department Order No.
20 issued by Secretary Ma. Nieves R. Confessor on
May 31, 1994.)
2.3 Employees of retail, service and agricultural
establishment or operations regularly employing not
more than ten (10) employees. As used in this sub-
section;
(a) “Retail establishment” is one principally engaged
in the sale of goods to end-users for personal or
household use. It shall lose its retail character qualified
for exemption if it is engaged in both retail and
wholesale sale of goods.
(b) “Service establishment” is one principally
engaged in the sale of service to individuals for their
own or household use and is generally recognized
as such.
(c) “Agricultural establishment/operations” refers to
an employer which is engaged in “agriculture”. This
terms refers to all farming activities in all its branches
and includes among others, the cultivation and tillage
of the soil, production, cultivation, growing and
harvesting of any agricultural or horticultural
commodities, dairying, raising of livestock or poultry,
the culture of fish and other aquatic products in farms
or ponds, and any activities performed by a farmer or
on a farm as incident to or in conjunction with such
farming operations, but does not include the
manufacture and/or processing of sugar, coconut,
abaca, tobacco, pineapple, aquatic or other farm
products.
4. When Applicable; Retroactive Applicability of
RA 7641
1.! Universal Robina Sugar Milling Corp. v. Caballeda
& Cadalin, 560 SCRA 115 (2008)
2.! Grace Christian High School v. Lavandera, 733
SCRA 498 (2014)
5. Components of one-half month pay/salary,
Implementing Rules, Guidelines 5.2
5.2 Components of One-half (1⁄2) Month Salary. —
For the purpose of determining the minimum
retirement pay due an employee under this Rule, the
term “one-half month salary” shall include all of the
following:
(a) Fifteen (15) days salary of the employee based
on his latest salary rate. As used herein, the term
“salary” includes all remunerations paid by an
employer to his employees for services rendered
during normal working days and hours, whether such
payments are fixed or ascertained on a time, task,
piece of commission basis, or other method of
calculating the same, and includes the fair and
reasonable value, as determined by the Secretary of
Labor and Employment, of food, lodging or other
facilities customarily furnished by the employer to his
employees. The term does not include cost of living
allowances, profit-sharing payments and other
monetary benefits which are not considered as part
of or integrated into the regular salary of the
employees.
(b) The cash equivalent of not more than five (5) days
of service incentive leave;
(c) One-twelfth of the 13th month pay due the
employee. (d) All other benefits that the employer
and employee may agree upon that should be
included in the computation of the
employee’s retirement pay.
 Enriquez Security Services, Inc. v. Cabotaje, 496 SCRA (iii) The retiring official or employee shall not have
169 (2006) previously availed of the privilege under the retirement
benefit plan of the same or another employer.
6. Forfeiture of Benefits

3.! Sy v. Metropolitan Bank & Trust Company, 506 8.! Intercontinental Broadcasting Corp. v. Amarilla, et
SCRA 580 (2006) al., 505 SCRA 687 (2006)

7. Equitable Solution 12. Voluntary Retirement

4.! PLDT v. Reus, 557 SCRA 379 (2008) 9.! Ariola v. Philex Mining Corp., 465 SCRA 686
(2005)
8. Non-entitlement – Termination for Just Cause
13. Gratuity Pay vis-à-vis Retirement Pay
5.! Jerome M. Daabay v. COCA-COLA Bottlers Phils.,
Inc., 704 SCRA 350 (2013) 1.! Sta. Catalina v. Retirement Pay, NLRC, 416 SCRA
233 (2003)
9. Retirement Pay Differential

6.! Rivera v. United Laboratories, Inc., 586 SCRA 269 III. SOCIAL SECURITY LEGISLATION
(2009)
Read: D.P. Disini, Jr., Statutory and Case Materials on
10. Management Prerogative Social Legislation

7.! Magdadero v. PNB, 593 SCRA 195 (2009) 1.! Social Security Act of 1997, RA No. 8292

11. Exemption from Tax, Rule II, Sec. 6 2.! CMS Estate, Inc. v. Social Security System, 132
SCRA 108 (1980)
SECTION 6. Exemption from tax. — The retirement pay 3.! Santiago v. Court of Appeals, 133 SCRA 341
provided in the Act may be exempted from tax if the (1984)
requirements set by the Bureau of Internal Revenue 4.! Kua v. Sacupayo, 736 SCRA 401 (2014)
under Sec. 2 (b) item (1) of Revenue Regulations No.
12-86 dated August 1, 1986 are met, to wit: 5.! Government Service Insurance Act of 1995,
Pensions, retirement and separation pay. — Pensions, RA 8291
retirement and separation pay constitute
compensation subject to withholding, except the 6.! Employees Compensation and State
following: Insurance Fund, PD No. 442, as amended
(1) Retirement benefits received by officials and
employees of private firms under a reasonable private 7.! Limited Portability Law, RA No. 7699
benefit plan maintained by the employer, if the
following requirements are met:
(i) The benefit plan must be approved by the Bureau
of Internal Revenue;
(ii) The retiring official or employee must have been
in the service of the same employer for at least ten
(10) years and is not less than fifty (50) years of age
at the time of retirement; and
'