I. Fundamental Principles and Article II, Section 20.
The State recognizes the
Policies
A. Constitutional provisions
Article II, 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.
Article II, Section 10. The State shall promote
social justice in all phases of national
development.
Social Justice is neither communism, nor
despotism, nor atomism, nor anarchy, but the
humanization of laws and the equalization of
social and economic forces by the State so that
justice in its rational and objectively secular
conception may at least be approximated.
[Calalang vs. Williams (1940)]
Article II, Section 11. The State values the dignity
of every human person and guarantees full
respect for human rights.
Article II, 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 wellbeing. It
shall inculcate in the youth patriotism and
nationalism, and encourage their involvement in
public and civic affairs.
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 II, Section 18. The State affirms labor as a
primary social economic force. It shall protect
the rights of workers and promote their welfare.
indispensable role of the private sector,
encourages private enterprise, and provides
incentives to needed investments.
Article III, 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.
Due process requirements are two-fold –
substantive (dismissal should be for a valid and
authorized cause as provided by law) and
procedural (due notice and hearing). [Salaw vs.
NLRC (1991)]
Article III, 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.
Article III, Section 7. The right of the people to
information on matters of public concern shall
be recognized. Access to official records, and to
documents and papers pertaining to official acts,
transactions, or decisions, as well as to
government research data used as basis for
policy development, shall be afforded the
citizen, subject to such limitations as may be
provided by law.
Article III, 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.
Article III, Section 10. No law impairing the
obligation of contracts shall be passed.
Article III, Section 16. All persons shall have the
right to a speedy disposition of their cases before
all judicial, quasi-judicial, or administrative
bodies.
Article III, Section 18(2). No involuntary
servitude in any form shall exist except as a
punishment for a crime whereof the party shall
have been duly convicted
Article XIII, Section 1. The Congress shall give
highest priority to the enactment of measures
that protect and enhance the right of all the
people to human dignity, reduce social,
economic, and political inequalities, and remove
cultural inequities by equitably diffusing wealth
and political power for the common good.
To this end, the State shall regulate the
acquisition, ownership, use, and disposition of
property and its increments.
Article XIII, Section 2. The promotion of social
justice shall include the commitment to create
[Article XIII, 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 economic opportunities
based on freedom of initiative and self-reliance.
Article XIII, Section 3. The State shall afford full
protection to labor, local and overseas,
organized and unorganized, and promote full
employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to
self-organization, collective bargaining and
negotiations, and peaceful concerted activities,
including the right to strike in accordance with
law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage.
They shall also participate in policy and decision-
making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared
responsibility between workers and employers
and the preferential use of voluntary modes in
settling disputes, 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.
Article XIII, 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 wellbeing. It
shall inculcate in the youth patriotism and
nationalism, and encourage their involvement in
public and civic affairs
B. Civil Code
Article 19. Every person must, in the exercise of
his rights and in the performance of his duties,
act with justice, give everyone his due, and
observe honesty and good faith.
Article 1700. The relations between capital and
labor are not merely contractual. They are so
impressed with public interest that labor
contracts must yield to the common good.
Therefore, such contracts are subject to the
special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop,
wages, working conditions, hours of labor and
similar subjects.
Article 1702. In case of doubt, all labor legislation
and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.
C. Labor Code
Books I, II, III, V, VI, and VII.
-
A. License vs. Authority
A license is a document issued by the
Department of Labor and Employment
authorizing a person or entity to operate
a private employment agency. While an
authority means a document issued by
the Department of Labor authorizing a
person or association to engage in
recruitment and placement activities as
a private recruitment entity. ( Art. 13- d
and f)

II. Recruitment and Placement

of Workers B. Essential elements of illegal recruitment
a. Canvassing
b. Enlisting
Purpose of this policy: c. Contracting
d. Transporting
a. To eliminate malpractice that had e. Utilizing
characterized the recruitment and f. Hiring procuring workers
placement business thus enabling
government to have firmer control It also includes:
of the labor market;
a. Referrals
b. To reach the same ended prescribed
b. Contract services
by ILO Convention No. 96 to which
c. Promising
the Philippines is a signatory.
d. Advertising for employment, locally
or abroad whether for profit or not.
Provided, that any person or entity
Recruitment and Placement which in any manner offers or
- “Any act of canvassing, enlisting, promises for a fee employment to
contracting, transporting, utilizing, two or more persons shall be
hiring or procuring workers, and deemed engaged in recruitment and
includes referrals, contract services, placement.
promising or advertising for
employment, locally or abroad. -Those acts mentioned constitutes
Whether for profit or not. Provided, recruitment and placement.
that any person or entity which in
any manner offers or promises for a C. Simple illegal recruitment
fee employment to two or more C.1 Illegal recruitment for Local workers
persons shall be deemed engaged in a. the person charged with the
recruitment and placement”. ( Art. crime must have undertaken
13-b LC. People vs. Turda 233 SCRA recruitment activities defined under art.
702)
13(b) or prohibited activities defines
uner art. 34
b. the said person does not have
a license or authority to do so. (art.38,
LC)
The lack of license or authority makes
the recruitment activity unlawful.
Prohibited practices
It shall be unlawful for any individual,
entity, licensee, or holder of authority:
1. To charge or accept, directly or
indirectly, any amount greater than
that specified in the schedule of
allowable fees prescribed by the
Secretary of Labor, or to make a
worker pay any amount greater than
that actually received by him as a
loan or advance;
2. To furnish or publish any false notice
or information or document in
relation to recruitment or
employment;
3. To give any false notice, testimony,
information or document or commit
any act of misrepresentation for the
purpose of securing a license or
authority under this code.
4. To induce or attempt to induce a
worker already employed to quit his
employment in order to ofer him to
another unless the transfer is
designed to liberate the worker
from oppressive terms and
conditions of employment;
5. To influence or to attempt to
influence any person or entity not to
employ any worker who was not
applied for employment through his
agency;
6. 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 he
Philippines;
7. To obstruct or attempt to obstruct
inspection by the secretary of labor
or by his duly authorizd
representatives;
8. To fail to file reports on th status of
employment, lacement vacancies,
remmitance of foreign exchange
arnnings, separation from jobs,
departures and such other matters
of information as may be required
by the secretary of labor.
9. To substitute or alter employment
contracts approved and verified by
the department of labor from the
time of actual signing thereof by the
parties up to and including the
periods of expiration of the same
without the approval of the
secretary of labor;
10. To become an officer of 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
11. To withhold or deny travel
documents from applicants workers
before departure fro monetary pf
financial consideration other than
those authorized under this code
and its implementating rules and
regulations.
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. [Sec. 6, RA 8042 as
amended]
D. Illegal recruitment in large scale
Deemed committed in large scale id
committed against three or more
persons, individually or as a group. (Art.
38-b, lc)
The following are the essential elements:
(1) The accused engages in acts of recruitment
and placement of workers defined under
Article 13(b) of the Labor Code or in any
prohibited activities under Article 43 of the
Labor Code;
(2) The accused has not complied with the
guidelines issued by the Secretary of Labor
and Employment, particularly
with respect to the securing of
license or an authority to
recruit and deploy workers,
either locally or overseas; and
(3) The accused commits the unlawful acts
against three or more persons individually
or as a group.
E. Illegal recruitment as economic sabotage
Illegal recruitment is
considered economic
sabotage when the
 commission thereof is
attended by the following
qualifying circumstances:
(1) By a syndicate – if
carried out by a group of 3
or more persons conspiring
and confederating with one
another; In large scale - if
committed against 3 or
more persons individually
or as a group. [Art. 38(b),
LC]
F. Liabilities
a. Local recruitment agency
Illegal recruitment Life
imprisonment constituting
economic and sabotage, Fine:
P100,000.00
Licensee or holder or 2
years ≤ authority
violating or
Imprisonment ≤ 5
causing another to
years OR violate Title I,
Book I, P10,000 ≤ Fine
≤ LC , P50,000 OR
both.
G. Pre-Termination of Contract of Migrant
Worker
[Sec. 10, R.A. 8042, as amended by R.A. 10022]
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 of:
(1) his placement fee and the deductions made
with interest at twelve percent (12%) per
annum
(2) 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.
DIRECT HIRING
General Rule: No employer may hire a Filipino
worker for overseas employment except
through the Boards and entities authorized by
the Secretary of Labor. (Art. 18, LC)
Exceptions:
(1) Members of the diplomatic corps;
(2) International organizations;
(3) Such other employees as may be allowed by
the Sec. of Labor;
(4) Name hirees – those individuals who are
able to secure contracts for overseas
employment on their own efforts and
representation without the assistance or
participation of any agency. Their hiring,
nonetheless, has to be processed through
the POEA. (Part III, Rule III of the POEA Rules
Governing Overseas Employment as
amended in 2002)
Regulation and enforcement
SUSPENSION OR CANCELLATION OF
LICENSE OR AUTHORITY
The Secretary 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 Department of Labor, the Overseas
Employment Development Board, and the
National Seamen Board
 violation of the provisions of this and other
applicable laws, General Orders and Letters
of Instructions. (Article 35, LC)
The acts prohibited under Article 34 are
grounds for suspension or cancellation of
license. Note that they likewise constitute illegal
recruitment under R.A. 8042 as amended by
R.A. 10022.
Who can suspend or cancel the license?
(1) DOLE Secretary
(2) POEA Administrator
REGULATORY AND VISITORIAL POWERS
OF THE DOLE SECRETARY
Regulatory powers - 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. [Art. 36, LC]
Visitorial powers - 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 violations of
any provisions of this Title. [Art. 37, LC]
PROHIBITED ACTIVITIES
-Prohibited practices
It shall be unlawful for any individual, entity,
licensee, or holder of authority:
(a) To charge or accept, directly or
indirectly, any amount greater
than that specified in the
schedule of allowable fees
prescribed by the Secretary of
Labor, or to make a worker pay
any amount greater than that
actually received by him as a
loan or advance;
(b) To furnish or publish any false
notice or information or
document in relation to
recruitment or employment;
(c) To give any false notice,
testimony, information or
document or commit any act of
misrepresentation for the
purpose of securing a license or
authority under this Code.
(d) To induce or attempt to induce
a worker already employed to
quit his employment in order to
offer him to another unless the
transfer is designed to liberate
the worker from oppressive
terms and conditions of
employment;
(e) To influence or to attempt to
influence any person or entity
not to employ any worker who
has not applied for employment
through his agency;
(f) To engage in the recruitment or
placement of workers in jobs
harmful to public health or
morality or to the dignity of the
Republic of the Philippines;
(g) To obstruct or attempt to
obstruct inspection by the
Secretary of Labor or by his duly
authorized representatives;
(h) To fail to file reports on the
status of employment,
placement vacancies,
remittance of foreign exchange
 earnings, separation from jobs,
departures and such other
matters or information as may
be required by the Secretary of
Labor.
(i) To substitute or alter
employment contracts
approved and verified by the
Department of Labor from the
time of actual signing thereof by
the parties up to and including
the periods of expiration of the
same without the approval of
the Secretary of Labor;
(j) To become an officer or
member of the Board of any
corporation engaged in travel
agency or to be engaged
directly or indirectly in the
management of a travel agency;
and
To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations other than
those authorized under this Code and its
implementing rules and regulations. (Art. 34,
LC)
Other prohibited acts
It shall likewise include the following acts,
whether committed by any person, whether a
non-licensee, non-holder, licensee or holder of
authority:
(a) To charge or accept directly or
indirectly any amount greater than
that specified in the schedule of
allowable fees prescribed by the
Secretary of Labor and Employment, or
to make a worker pay or acknowledge
any amount greater than that actually
received by him as a loan or advance;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit
any act of misrepresentation for the
purpose of securing a license or
authority under the Labor Code, or for
the purpose of documenting hired
workers with the POEA, which include
the act of reprocessing workers
through a job order that pertains to
nonexistent work, work different from
the actual overseas work, or work with
a different employer whether
registered or not with the POEA;
(d) To include or attempt to induce a
worker already employed to quit his
employment
in order to offer him another unless
the transfer is designed to liberate a
worker from oppressive terms and
conditions of employment;
(e) To influence or attempt to influence
any person or entity not to employ any
worker who has not applied for
employment through his agency or
who has formed, joined or supported,
or has contacted or is supported by any
union or workers' organization;
(f) To engage in the recruitment or
placement of workers in jobs harmful
to public health or morality or to the
dignity of the Republic of the
Philippines;
(g) To fail to submit reports on the status
of employment, placement vacancies,
remittance of foreign exchange
earnings, separation from jobs,
departures and such other matters or
information as may be required by the
Secretary of Labor and Employment;
(h) To substitute or alter to the prejudice
of the worker, employment contracts
approved and verified by the
Department of Labor and Employment
from the time of actual signing thereof
by the parties up to and including the
 period of the expiration of the same
without the approval of the
Department of Labor and Employment;
(i) For an officer or agent of a recruitment
or placement agency to become an
officer or member of the Board of any
corporation engaged in travel agency
or to be engaged directly or indirectly
in the management of travel agency;
(j) To withhold or deny travel documents
from applicant workers before
departure for monetary or financial
considerations, or for any other
reasons, other than those authorized
under the Labor Code and its
implementing rules and regulations;
(k) Failure to actually deploy a contracted
worker without valid reason as
determined
by the Department of Labor
and Employment;
(l) Failure to reimburse expenses incurred
by the worker in connection with his
documentation and processing for
purposes of deployment, in cases
where the deployment does not
actually take place without the
worker's fault. Illegal recruitment
when committed by a syndicate or in
large scale shall be considered an
offense involving economic sabotage;
and
(m) To allow a non-Filipino citizen to head
or manage a licensed
recruitment/manning agency.
In addition to the acts enumerated above, it
shall also be unlawful for any person or entity
to commit the following prohibited acts:
(1) Grant a loan to an overseas Filipino worker
with interest exceeding eight percent (8%)
per annum, which will be used for payment
of legal and allowable placement fees and
make the migrant 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/ship owner;
(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/ship owners where the latter
shoulder the cost of such trainings;
(6) For a suspended recruitment/manning
agency to engage in any kind of recruitment
activity including the processing of pending
workers'
applications; and
(7) For a recruitment/manning agency or a
foreign principal/employer to pass on the
overseas Filipino worker or deduct from his
or her salary the payment of the cost of
insurance fees, premium or other insurance
related charges, as provided under the
compulsory worker's insurance coverage.
(Sec. 6, RA 8042 as amended)

III.
a. Hours of work
Coverage/Exclusion
Shall apply to employees in all
establishments and undertakings whether
for profit or not. (Art. 82, LC) But not to
Government employees (Art. 82; Art. 76) ,
Managerial Employees including members
of the managerial staff (Art. 82), Field
Personnel (Art. 82), Members of the family
of the employer who are dependent on him
for support
(Art. 82); Domestic helpers and persons in
personal service of another (Art. 141, RA
10361), Workers who are paid by result as
determined by DOLE regulation (Art. 82)
Managerial employees refers 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 refer to non-agricultural
employees who regularly perform their
duties away from the principle place of
business or branch office of the employer
and whose actual hours of work in the field
cannot be determined with reasonable
entity.
1. Normal hours of work
Normal hours of work of any
employee shall not exceed eight
hours a day. This does not mean
that no employee may work more
than eight hours a day, but if work
is performed beyond eight hours in
a day, the worker should be paid for
the overtime work an additional
compensation equivalent to his
regular wage plus at least 25
percent. The additional
compensation of 30 percent is for
holiday or rest day. Additional
compensation is called overtime
pay.
Exception to the 8-Hour Law: Work Hours of
Health Personnel Health personnel in:
(1) Cities and municipalities with a
population of at least one million
(1,000,000) OR
(2) 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. 83, LC]
Compensable Hours of Work (Art. 84, LC)
Hours worked shall include:
(1) All time during which an
employee is required to be on duty or to
be at a prescribed workplace; AND
(2) All time during which an
employee is suffered or permitted to
work.
MEAL BREAK
General Rule: Subject to such
regulations as the Secretary of
Labor may prescribe, it shall be the
duty of every employer to give his
employees not less than sixty (60)
minutes
time-off for their regular meals (Art. 85, LC)
Exception:
Employees may be given a meal
period of not less than twenty (20)
minutes provided that such
shorter meal period is credited as
compensable hours worked of the
employee:
(1) Where the work is
non-manual work in nature
or does not involve
strenuous physical exertion;
(2) Where the
establishment regularly
operates not less than
sixteen (16) hours a day;
(3) In case of actual or
impending emergencies or
there is urgent work to be
performed on machineries,
equipment or installations
to avoid serious loss which
the employer would
otherwise suffer; and
(4) Where the work is
necessary to prevent serious
loss of perishable goods
[Book 3, Rule 1, Sec. 7 par 1,
IRR]
WAITING TIME
Waiting time spent by the
employee shall be
considered working time if
waiting is an integral part
of his work or the
employee is required or
engaged by the employer
to wait. Waiting is an
integral part of some types
of work. For instance:
worker in an assembly-line
type of manufacture have
to wait for the completion
of a previous stage before
they can work on their own
stage in the process.
Overtime work, overtime pay
Overtime on ordinary working day - Art. 87, LC.
Work may be performed beyond eight (8)
hours a day provided that the employee is
paid for the overtime work, an additional
compensation equivalent to his regular wage
plus at least twenty five percent (25%) thereof.
Overtime work on holiday or rest
day - Art. 87, LC. Work performed
beyond eight hours on a holiday or
rest day shall be paid an additional
compensation equivalent to the rate
of the first eight hours on a holiday
or rest day plus at least thirty regular wage for each hour
percent (30%) thereof. worked between 10 in the
evening and 6 in the morning
Computation of additional compensation - the following day. All
Art. 90, LC. For purposes of computing employees, except:
overtime and other additional remuneration (1) Those of the
as required by this Chapter the "regular wage" government and any of its
of an employee shall include the cash wage political subdivisions,
only without deduction on account of facilities including government-
provided by the employer owned and/or controlled
corporations;
Emergency overtime [Art. 89, LC]
(2) Those of retail and
Any employee may be required by the
service establishments
employer to perform overtime work in any of
regularly employing not
the following cases:
more than five (5) workers;
(1) When the country is at war or when
any other national or local emergency has (3) Domestic helpers and
been declared by the National Assembly or persons in the personal
the Chief Executive; service of another;
(2) When it is necessary to prevent loss of
(4) Managerial employees
life or property or in case of imminent
as defined in Book Three of
danger to public safety due to an actual or
this Code;
impending emergency in the locality
caused by serious accidents, fire, flood, (5) Field personnel and
typhoon, earthquake, epidemic, or other other employees whose
disaster or calamity; time and performance is
(3) When there is urgent work to be unsupervised by the
performed on machines, installations, or employer including those
equipment, in order to avoid serious loss who are engaged on task or
or damage to the employer or some other contract basis, purely
cause of similar nature; commission basis, or those
(4) When the work is necessary to prevent who are paid a fixed
loss or damage to perishable goods; and amount for performing
(5) Where the completion or continuation work irrespective of the
of the work started before the eighth hour time consumed in the
is necessary to prevent serious obstruction performance thereof.
or prejudice to the business or operations
of the employer.
Rest days (night-off)

Night work differential Night shift employees are

Every employee shall be paid a entitled to a weekly night-off
night shift differential of not (usually Saturday evening) or a
less than 10 percent of his weekly rest period of 24 hours
beginning at the start of the
night shift.
Work on special days
Night shift employees are also
entitled to the premium pay on
special days and holidays.
These days are reckoned as
calendar days which start at
midnight and end at the
following midnight. The
premium pay for the night shift
also starts or ends at midnight.
However, the employment
contract, company policy or
CBA may provide that in the
case of night shift workers,
days—including special days
and regular holidays—shall
begin on the night before a
calendar day.
PART-TIME WORK
A single, regular or voluntary
form of employment with
hours of work substantially
shorter than those considered
as normal in the
establishment. (International
Labor
Organization)
This excludes those forms of
employment which, although
referred to as part-time work,
are in particular, irregular,
temporary or intermittent
employment, or in cases where
hours of work have been
temporarily reduced for
economic, technical or
structural reasons.
The wage and benefits of part-
time worker are in proportion
to the number of hours
worked.
CONTRACT FOR PIECE OF
WORK
[Art. 1467, CC.] A contract for
the delivery at a certain price
of an article which the vendor
in the ordinary course of his
business manufactures or
procures for the general
market, whether the same is
on hand at the time or not, is a
contract of sale BUT if the
goods are to be manufactured
specially for the customer and
upon his special order, and not
for the general market, it is a
contract for a piece of work.
A. Wages
Elements of wage:
-Cash wage
-Facilities
Cash wage is the
monetary currency
paid by an employer to
an amployee for work
or services rendered.
Facilities are articles or
services customarily
given for the benefit of
the employee or his
 family, excluding tools -Cash wage
of the trade or articles
-facilities
or services primarily for
the benefit o Cash wage is the monetary
currency paid by an employer
to an employee for work or
services rendered. Facilities are
articles or services customarily
given for the benefit of the
employee or his family.
B. Wage vs salary
In Consuji vs. Pucan,
159 SCRA 107, MINIMUM WAGE
supreme court took Statutory minimum wage is the
occasion to compare lowest wage rate fixed by law that
the concepts of wages an ER can pay his workers. [IRR, RA
and salaries. 6727, (o)]
- Wages applies to Coverage
compensation for General Rule: The wage increases
manual labor, prescribed under Wage Orders
skilled or unskilled; apply to all private sector workers
salaries denotes a and employees receiving the daily
higher degree of minimum wage rates or those
employment, or a receiving up to a certain daily
superior grade of wage ceiling, where applicable,
services, and regardless of their position,
implies a position designation, or status, and
or office. irrespective of the method by
- Wages indicates which their wages are paid.
inconsiderable pay
for a lower or less
Exceptions:
responsible
(1) Domestic Helpers/kasambahay are
character of
covered by RA 10361
employment;
salaries suggests a (2) Workers of registered barangay micro
larger and more business enterprise with Certificates of
permanent or fixed Authority issued by the Office of the
compensation for Municipal or City Treasurer. [RA 9178]
more important (3) Learners [RA 602]
services. (4) Apprentices [RA 602]
(5) Handicapped Worker [RA 602]

Elements of wages Exemptions upon Approval

Upon application with and as determined by
the Regional Tripartite Wages and
Productivity Board, based on documentation
and other requirements in accordance with
applicable rules and regulations issued by the
NWPC, the following may be exempted from
the applicability of this Order:
(1) Distressed establishments;
(2) Retail/Service establishments
regularly employing not more than 10
workers;
(3) Establishments adversely affected by
natural calamities. [Sec. 8, Wage Order No.
19, 2014]
Basis
The basis of the minimum wage rates
prescribed by law shall be the normal working
hours of 8 hours a day. [Sec 7, IRR of RA 6727]
. MINIMUM WAGE OF WORKERS PAID
BY RESULTS
C.3.I. WORKERS PAID BY RESULTS
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 of work a day,
or a proportion thereof for working less than
eight
(8) hours. [Art. 124, LC]
The wage rates of workers who are paid by
results shall continue to be established in
accordance with Art. 101 of the LC, as
amended, and its IRR. This will be done
through:
(1) Time and motion studies.
(2) Consultation with
representatives of ERs’ and workers’
organizations in a tripartite conference
called by the DOLE Sec.
Request for the conduct of time and motion
studies, to determine whether the non-time
employees in an enterprise are being paid fair
and reasonable wage rates, may be filed with
the proper Regional Office.
Where the output rates established by the
employer do not conform to the standards set
under the foregoing methods for establishing
output rates, the employee shall be entitled to
the difference between the amount he/she is
entitled to receive and the amount paid by the
employer.
C.3.II MINIMUM WAGE OF APPRENTICES
AND LEARNERS
Wages of apprentices and learners shall in no
case be less than 75% of the applicable
minimum wage rates. [Art. 61 & 75, LC]
Note: Learners employed in piece or
incentiverate jobs during the training
period shall be
paid in full for the work done. [Art. 76, LC]
The Secretary of Labor and
Employment may authorize the
hiring of apprentices without
compensation whose training on
the job is required by the school or
training program curriculum or as
requisite for graduation or board
examination. [Art. 72, LC]
C.3.III. MINIMUM WAGE OF PERSONS
WITH DISABILITY
A qualified disabled employee
shall be subject to the same terms
and conditions of employment
and the same compensation,
privileges, benefits, fringe benefits
or allowances as a qualified able-
bodied persons. [Sec 5, RA 7277,
The Magna Carta for Disabled
Persons]
DEDUCTIONS FROM WAGES
General Rule: No employer, in his own behalf
or in behalf of any person, shall make any
deduction from the wages of his employees.
(Art. 113, LC)
Exceptions:
(1) 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;
(2) For union dues, in cases where the
right of the worker or his union to check-
off has been recognized by the employer
or authorized in writing by the individual
worker concerned; and
(3) In cases where the employer is
authorized by law or regulations issued by
the Secretary of Labor and Employment
(Art. 113, LC), such as:
(a) Employee debt to employer is
due and demandable (Art. 1706, CC);
(b) Attachment or execution in
cases of debts incurred for
necessities: food, shelter, clothing,
medical attendance
(Art. 1708, CC);
(c) Withholding tax;
(d) Deductions of a legally
established cooperative;
(e) Payment to 3rd parties upon
written authority by employee;
(f) Deductions for loss or damage;
(g) SSS, Medicare, Pag-IBIG
premiums;
(h) Deduction for value meals and
other facilities.
It shall be unlawful to make any deduction
from the wages of any employee for the
benefit of the employer as consideration of a
promise of employment or retention in
employment. [Art. 117, LC] or to retaliate
against the employee who filed a complaint.
[Art. 118, LC]
Rest Periods
Right to a Weekly rest day
It is the duty of the
duty of every employer,
whether operating for profit
or not, to provide each of
his employees a rest period
of not less than 24
consecutive hours after evry
six consecutive normal work
days (art. 91-a LC)
EMERGENCY REST DAY WORK
The employer may require his employees to
work on any day:
(1) In case of actual or impending
emergencies caused by serious accident,
fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity to
prevent loss of life and property, or
imminent danger to public safety;
(2) In cases of urgent work to be
performed on the machinery,
 equipment, or installation, to avoid obstruction to the operations and
serious loss which the employer would the employer cannot normally be
otherwise suffer; expected to resort to other
(3) In the event of abnormal measures, the employer may so
pressure of work due to special schedule the weekly rest day of his
circumstances, where the employer choice for at least two days in a
cannot ordinarily be expected to resort month.
to other measures; [IRR, Book Three, Rule III, Sec. 4]
(4) To prevent loss or damage to
perishable goods; E. HOLIDAY PAY/PREMIUM PAY
(5) Where the nature of the work
Kinds of holidays
requires continuous operations and the
*Regular holidays
stoppage of work may result in
irreparable injury or loss to the *Special days
employer; and Regular holidays are designated by law, and
(6) Under other circumstances need no further proclamation for their
analogous or similar to the foregoing as observance. Special days need a specific
determined by the Secretary of Labor proclamation by the President to be observed
as holidays.
and Employment.
[Art. 92, LC]
Holiday pay is a one-day pay given
by law to an employee even if he
Synthesis of the Rules
does not work on a regular
(1) Rest day of not less than holiday. This gift of a day’s pay is
24 consecutive hours after 6 limited to each of the 12 regular
consecutive days of work. holidays.
(2) No work, no pay
principle applies
COVERAGE
(3) If an employee works on
General Rule: All employees Exceptions:
his designated rest day, he is
entitled to a premium pay. (1) Those of the government and
any of the political subdivision, including
(4) Premium pay is
government-owned and controlled
additional 30% of the basic pay.
corporation;
(5) Employer selects the
rest day of his employees (2) Those of retail and service
establishments regularly employing less
(6) However, employer
than 10 workers;
must consider the religious
reasons for the choice of a rest (3) Domestic helpers and persons
day. in the personal service of another;
(7) When the choice of the (4) Managerial employees as
employee as to his rest day based defined in
on religious grounds will inevitably Book III
result in serious prejudice or
 (5) Field personnel and other
employees whose time and performance
is unsupervised by the employer
including those who are engaged on task
or contract basis, purely commission
basis, or those who are paid a fixed
amount for performing work irrespective
of the time consumed in the
performance thereof.
[Sec. 1, Rule IV of the IRR]
Retail Establishment is one principally
engaged in the sale of goods to end-users for
personal or household use;
Service Establishment is one principally
engaged in the sale of service to individuals for
their own or household use and is generally
recognized as such. [RA 6727/The Wage
Rationalization Act, IRR]
Regular holidays
Proclamation No. 831 signed by President
Aquino on 17 July 2014, provides for the
observance of the regular holidays and special
(non-working) days for the year 2015 on the
following dates:
(1) New year’s Day – Jan. 1
(2) Maundy Thursday – Apr. 2
(3) Good Friday – Apr. 3
(4) Araw ng Kagitingan – Apr. 9
(5) Labor Day – May 1
(6) Independence Day – June 12
(7) National Heroes Day – Aug. 31
(8) Bonifacio Day – Nov. 30
(9) Christmas Day – Dec. 25
(10) Rizal Day – Dec. 30
(11) Id-ul-Fitr – 1st day of 10th lunar
month of Shawwal
(12) Id-ul Adha – 10th day of the 12th
lunar month of Dhu’l-Hijja
Special (Non-Working Days)
(1) Chinese New Year – Feb. 19
(2) Black Saturday – Apr. 4
(3) Ninoy Aquino Day – Aug. 21
(4) All Saints Day – Nov. 1
(5) Additional special (Non-
working) days
(a) Jan. 2
(b) Dec. 24
(6) Last Day of the Year – Dec. 31
Special Holiday (for all schools)
EDSA Revolution Anniv – Feb. 25
P.D. 1083 (Code of Muslim Personal Laws)
SEE: Arts. 169-173
Specifically for the Muslim Areas,
P.D. 1083, in its Book V, Title,
recognizes five (5) Muslim
Holidays, namely:
(1) Amun Jadid (New Year) which
falls on the first (1st) day of the
lunar month of Muharram;
(2) Mauli-un-Nabi (Birthday of the
Prophet Muhammad) which
falls on the twelfth (12th) day
of the third (3rd) lunar month
of Rabi-ul-Awwal;
(3) Lailatul Isra Wal Mi Rai
(Nocturnal Journey and
Ascencion of the Prophet
Muhammand) which falls on
the twentyseventh (27th) day
of the seventh (7th) lunar
month of Rajab;
(4) Id-ul-Fitr (Hari Raja Pausa)
which falls on the first (1st)
day of the tenth (10th) lunar
month of Shawwal
 commemorating the end of
the fasting season; and
(5) Id-ul-Adha (Hari Raha Haji)
which falls on the tenth (10th)
day of the twelfth (12th) lunar
month of Dhu’l-Hijja.
Leaves
Service incentive leaves
This benefit means
that every worker who has
rendered at least one year
of service shall be entitled to
a yearly service incentive
leave of five days with pay.
Its purpose is to encourage a
worker’s loyalty and
dedication to his work.
‘at least once a year” means
service for twelve months,
wheteher continuous or
broken, reckoned from the
date the worker started
working, including
authorized absences and
paid regular holidays, unless
the employer by practice,
policy or contract considers
a year as less than twelve
months, in which case such
period shall be considered
as one year.
Service Incentive Leave DOES NOT apply to
the following employees:
(1) Those of the government and any of
its political subdivisions, including
GOCCs;
(2) Domestic helpers and persons in the
personal service of another;
(3) Managerial employees as defined in
Book 3 of this Code;
(4) Field personnel and other
employees whose performance is
unsupervised by the employer
including those who are engaged on
task or contract basis, purely
commission basis, or those who are
paid a fixed amount for performing
work irrespective of the time
consumed in the performance
thereof;
(5) Those who are already enjoying the
benefit herein provided;
(6) Those enjoying vacation leave with
pay of at least 5 days;
(7) Those employed in establishments
regularly employing less than 10
employees. [Book 3, Rule 5, Sec. 1, IRR]
Maternity Leave
MATERNITY LEAVE
[Sec. 14-A of RA 1161 (Social Security Law) as
amended by RA 7322 and RA 8282]
Coverage
Every pregnant woman in the
private sector, whether married
or unmarried, is entitled to the
maternity leave benefits.
This is applicable to both childbirth and
miscarriage.

Requisites
(1) Employment: A female
employee employed at the
time of delivery, miscarriage
or abortion
(2) Contribution: who has paid at
least 3 monthly contributions
in the 12-month period
immediately preceding the
semester of her childbirth, or
miscarriage.
(3) Notice: employee notified
employer of her pregnancy
and the probable date of her
childbirth, which notice shall
be transmitted to the SSS in
accordance with the rules and
regulations it may provide.
Benefit received
A daily maternity benefit
equivalent to 100% of her average
daily salary credit for: (1) 60 days
for normal delivery
(2) 78 days for caesarean delivery
Note: This benefit shall NOT be
included in the computation of
13th month pay as it is granted to
an employee in lieu of wages
which is the basis for computing
13th month.
Only 4 maternity leaves available
The maternity benefits provided under the
Social Security Law shall be paid only for the
first four (4) deliveries or miscarriages
SSS pays for the maternity leave The employer
advances the benefit to the employee but the
SSS shall immediately reimburse the
employer of one hundred percent (100%) of
the amount upon receipt of satisfactory
proof of such payment and
legality thereof
Other conditions
(1) Employer shall advance the payment
subject to reimbursement by the SSS
within 30 days from filing of leave
application.
(2) Availment shall be a bar to the recovery of
sickness benefits provided by this Act for
the same period for which daily maternity
benefits have been received.
(3) Employee may only avail of benefit for the
first four (4) deliveries or miscarriages.
(4) Sanction: That if an employee should give
birth or suffer miscarriage
(a) Without the required contributions
having been remitted for her by her ER
to the SSS, or
(b) Without the latter having been
previously notified by the ER of time of
the pregnancy, then the employer
shall pay to the SSS damages
equivalent to the benefits which said
employee member would otherwise
have been entitled to.
F.3. PATERNITY LEAVE
[RA 8187 (Paternity Leave Act of 1996)]
Coverage and purpose
Paternity leave is granted to
all married male employees in
the private and public
sectors, regardless of their
employment status.
Benefit
It shall apply to the first 4
deliveries of the employee’s
lawful wife with whom he is
cohabiting.
It shall be for 7 calendar days, with
full pay, consisting of basic salary
and mandatory allowances fixed
by the Regional Wage Board, if
any, provided that his pay shall not
be less than the mandated
minimum wage. [Sec. 2, RA
8187]
LABOR STANDARDS LAW (BAR NOTES DRAFT)
III. LABOR STANDARDS
G. THIRTEENTH MONTH PAY
RATIONALE
(1) To further protect the level of real wages
from the ravage of world-wide inflation;
(2) There has been no increase in the legal
minimum wage rates since 1970;
(3) The Christmas season is an opportune time
for society to show its concern for the plight of
the working masses so they may properly
celebrate Christmas and New Year.
COVERAGE
General Rule: ALL EMPLOYERS are hereby
required to pay all their rank and file employees
a 13th month pay not later than Dec 24 of every
year,
(a) Provided that they have worked for at least
one (1) month during a calendar year.
EXCLUSIONS/EXEMPTIONS FROM COVERAGE
Exempted Employers:
(1) Government, its political subdivisions,
including GOCCs except those operating
essentially as private subsidiaries of the
Government;
(2) Employers already paying their employees a
13th month pay or more in a calendar year or its
equivalent at the time of this issuance;
(3) Employers of household helpers and persons
in the personal service of another relation to
such workers; and
(4) Employers of those who are paid on purely
commission, boundary or task basis and those
who are paid a fixed amount for performing
specific work, irrespective of the time consumed
in the performance thereof (except those
workers who are paid on piece rate basis, in
which case their employer shall grant them 13th
month pay).
Note: “Equivalent” includes:
(a) Christmas bonus, mid-year bonus, cash
bonuses
(b) and other payments amounting to not less
than the basic salary
(c) but shall NOT INCLUDE cash and stock
dividends, cost of living allowances and all other
allowances regularly enjoyed by the employee as
well a non-monetary benefits.
Workers paid on a piece-rate basis
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.
NATURE OF THE 13TH MONTH PAY
Amount and Date of Payment
Minimum Amount:
1/12 of the total basic salary earned by an
employee within a calendar year for the year
1987
Base Amount, which is the basic salary shall
include:
(1) cost of living allowances (COLA) integrated
into the basic salary of a covered employee
pursuant to EO 178.
(2) all remunerations or earnings paid by this
employer for services rendered.
(3) But not the allowances and monetary
benefits which are not considered or integrated
as part of the regular or basic salary, such as the
cash equivalent of:
(a) unused vacation and sick leave credits,
(b) overtime,
(c) premium,
(d) night differential,
(e) holiday pay and, and
(f) cost-of-living allowances.
Time of payment
General Rule: paid not later than Dec 24 of each
year.
Exception: ER may give to his employees half (½)
of the required 13th Month Pay before the
opening of the regular school year and the other
half on or before the 24th of December every
year.
(a) The frequency of payment of this monetary
benefit may be the subject of agreement
between the employer and the recognized CBA
of the employees.
H. SEPARATION PAY
DEFINITION
Separation pay is defined as the amount that an
employee receives at the time of his severance
from the service and is designed to provide the
employee with the wherewithal during the
period that he is looking for another
employment. [A’ Prime Security Services v.
NLRC, et al., 1993]
GENERAL RULE
The rule embodied in the Labor Code is that a
person dismissed for cause as defined therein
[see Art, 282] is not entitled to separation pay.
[PLDT v. NLRC, 1988]
EXCEPTION
Considerations of equity as in the cases of Filipro,
Inc. v. NLRC, Metro Drug Corp. v. NLRC,
Engineering Equipment, Inc. v. NLRC, San Miguel
Corp v. NLRC.
An employee who voluntarily resigns is not
entitled to separation unless stipulated in the
employment contract, or the collective
bargaining agreement, or is sanctioned by
established practice or policy of the employer.
[Phimco Industries v. NLRC, 1997; Hinatuan
Mining Corp v. NLRC, 1997 cited in JPL Marketing
Promotions v. CA, 2005]
AMOUNT
One-Half (1/2) Month Pay per Year of Service
An EE is entitled to receive separation pay
equivalent to ½ month pay for every year of
service, a fraction of at least six (6) months being
considered as one whole year, if his/her
separation from the service is due to any of the
following authorized causes:
(1) Retrenchment to prevent losses [i.e.
reduction of personnel effected by management
to prevent losses];
(2) Closure or cessation of operation of an
establishment not due to serious losses or
financial reverses; and,
(3) When the EE is suffering from a disease not
curable within a period of six (6) months and
his/her continued employment is prejudicial to
his/her health or to the health of his/her co-
employees
In no case will an EE get less than one (1) month
separation pay if the separation is due to the
above stated causes and he/she has served for
at least six (6) months.
One-Month Pay per Year of Service
An EE is entitled to separation pay equivalent to
his/her one-month pay for every year of service,
a fraction of at least 6 months being considered
as one whole year, if his/her separation from
service is due to any of the following:
(1) Installation by ER of labor-saving devices;
(2) Redundancy, as when the position of the EE
has been found to be excessive or unnecessary
in the operation of the enterprise;
(3) Impossible reinstatement of the EE to his/her
former position or to a substantially equivalent
position for reasons not attributable to the fault
of the ER, as when the reinstatement ordered by
a competent authority cannot be implemented
due to closure of cessation of operations of the
establishment/ER, or the position to which
he/she is to be reinstated no longer exists and
there is no substantially equivalent position in
the establishment to which he/she can be
assigned. [Gaco v. NLRC, 1994]
NOTICE OF TERMINATION
The ER may terminate the employment of any
EE due to the above-mentioned authorized
causes by serving a written notice on the EE and
the DOLE through its regional office having
jurisdiction over the place of business at least 1
month before the intended date thereof.
BASIS OF SEPARATION PAY
The computation of separation pay of an EE shall
be based on his/her latest salary rate.
INCLUSION OF REGULAR ALLOWANCE IN THE
COMPUTATION
In the computation of separation pay, it would
be error not to integrate the allowance with the
basic salary. The salary base properly used in
computing the separation pay should include not
just the basic salary but also the regular
allowances that an EE has been receiving.
[Planters’ Products, Inc. v. NLRC, 1989]
I. RETIREMENT PAY
RATIONALE RA 7641 is undoubtedly a social
legislation. The law has been enacted as a labor
protection measure and as a curative statute
that absent a retirement plan devised by, an
agreement with, or a voluntary grant from, an
employer can respond, in part at least, to the
financial well-being of workers during their
twilight years soon following their life of labor.
There should be little doubt about the fact that
the law can apply to labor contracts still existing
at the time the statute has taken effect, and that
its benefits can be reckoned not only from the
date of the law's enactment but retroactively to
the time said employment contracts have
started. [Enriquez Security Services, Inc. v.
Cabotaje, 2006]
Pursuant thereto, this Court imposed two (2)
essential requisites in order that R.A. 7641 may
be given retroactive effect:
(1) the claimant for retirement benefits was still
in the employ of the employer at the time the
statute took effect; and
(2) the claimant had complied with the
requirements for eligibility for such retirement
benefits under the statute. [Universal Robina
Sugar Milling Corp. v. Cabanella, 2008]
a. ELIGIBILITY
All employees in the private sector, regardless of
their position, designation, or status, and
irrespective of the method by which their wages
are paid [Sec 1, RA 7641]
The only exceptions are:
(1) employees covered by the Civil Service Law;
(2) domestic helpers and persons in the
personal service of another,
(3) employees in retail, service and agricultural
establishments or operations regularly
employing not more than ten employees
Age of retirement
EEs shall be retired upon reaching the age of 60
years or more but not beyond 65 years old (and
have served the establishment for at least 5
years).
Optional retirement – in the absence of a
retirement plan or other applicable agreement
providing for retirement benefits of EEs in an
establishment, an EE may retire upon reaching
the age of 60 or more if he has served for at least
5 years in said establishment.
Compulsory retirement – in the absence of a
retirement plan or other applicable agreement
providing for retirement benefits of EEs in an
establishment, an EE shall be retired at the age
of 65 years.
b. Amount of retirement pay
The minimum retirement pay shall be
equivalent to onehalf (1/2) month salary for
every year of service, a fraction of at least six (6)
months being considered as one whole year.
For the purpose of computing retirement pay,
“one-half month salary” shall include all of the
following:
(1) Fifteen (15) days salary based on the latest
salary rate;
(2) Cash equivalent of five (5) days of service
incentive leave;
(3) One-twelfth (1/12) of the 13th month pay.
(1/12 x 365/12 = .083 x 30.41 = 2.52)
Thus, “one-half month salary” is equivalent to
22.5 days. [Capitol Wireless, Inc. v. Sec.
Confesor, 1996]
Other benefits may be included in the
computation of the retirement pay upon
agreement of the ER and the EE or if provided in
the CBA.
Retirement pay under RA 7641 vis-à-vis
retirement benefits under SSS and GSIS laws
RA 7641 mandates payment of retirement
benefits. All private sector employees regardless
of their position, designation or status and
irrespective of the method by which their wages
are paid are entitled to retirement benefits upon
compulsory retirement at the age of sixtyfive
(65) or upon optional retirement at sixty (60) or
more but not 65. The minimum retirement pay
due covered employees shall be equivalent to
one-half month salary for every year of service,
a fraction of at least six (6) months being
considered as one whole year. The benefits
under this law are other than those granted by
the SSS or the GSIS.
Retirement Benefits under a CBA or Applicable
Contract
Any EE may retire or be retired by his/her ER
upon reaching the age established in the CBA or
other applicable agreement/contract and shall
receive the retirement benefits granted therein;
provided, however, that such retirement
benefits shall not be less than the retirement pay
required under RA 7641, and provided further
that if such retirement benefits under the
agreement are less, the ER shall pay the
difference. Where both the ER and the EE
contribute to a retirement fund pursuant to the
applicable agreement, the ER’s total
contributions and the accrued interest thereof
should not be less than the total retirement
benefits to which the EE would have been
entitled had there been no such retirement
benefits’ fund. If such total portion from the ER
is less, the ER shall pay the deficiency.
c. Retirement benefits of workers paid by
results
For covered workers who are paid by result and
do not have a fixed monthly salary rate, the basis
for the determination of the salary for 15 days
shall be their average daily salary (ADS). The ADS
is derived by dividing the total salary or earning
for the last 12 months reckoned from the date of
retirement by the number of actual working days
in that particular period, provided that the
determination of rates of payment by results are
in accordance with established regulations
d. Retirement benefits of part- time workers
Part-time workers are also entitled to
retirement pay of “one-month salary” for every
year of service under RA 7641 after satisfying the
following conditions precedent for optional
retirement:
(a) There’s no retirement plan between the ER
and the EE; and,
(b) The EE should have reached the age of 60
years, and should have rendered at least 5 years
of service with the ER.
Applying the foregoing principle, the
components of retirement benefit of part-time
workers may likewise be computed at least in
proportion to the salary and related benefits due
them.
e. Taxability
[SEC.1, RA 4917] Any provision of law to the
contrary notwithstanding, the retirement
benefits received by officials and employees of
private firms, whether individual or corporate, in
accordance with a reasonable private benefit
plan maintained by the employer
(1) shall be exempt from all taxes and
(2) shall not be liable to attachment,
garnishment, levy or seizure by or under any
legal or equitable process whatsoever.
Exception
Except to pay a debt of the official or employee
concerned to the private benefit plan or that
arising from liability imposed in a criminal action.
J. WOMEN WORKERS
a. Provisions against discrimination
It shall be unlawful for any employer to
discriminate against any woman employee with
respect to terms and conditions of employment
solely on account of her sex.
The following are acts of discrimination:
(1) Payment of a lesser compensation, including
wage, salary or other form of remuneration and
fringe benefits, to a female employees as against
a male employee, for work of equal value; and
(2) Favoring a male employee over a female
employee with respect to promotion, training
opportunities, study and scholarship grants
solely on account of their sexes. [Art. 135 LC].
b. Stipulation against marriage
It shall be unlawful for an employer to require as
a condition of employment or continuation of
employment that a woman employee shall not
get married, or to stipulate expressly or tacitly
that upon getting married a woman employee
shall be deemed resigned or separated or to
actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely
by reason of her marriage. [Art. 136, LC]
Bona fide occupational qualification exception
When the employer can prove that the
reasonable demands of the business require a
distinction based on marital status and there is
no better available or acceptable policy which
would better accomplish the business purpose,
an ER may discriminate against an EE based in
the identity of the EE’s spouse. [Star Paper Corp.
vs. Simbol, 2006] The Court sustained the validity
of employer policy prohibiting an employee from
having a personal or marital relationship with an
employee of a competitor. The prohibition was
reasonable under the circumstances because
relationships of such nature might compromise
the interests of the company. [Duncan
Association of Detailmen vs. Glaxo Wellcome,
2004]
c. Prohibited Acts [ART.137, LC]
Note: Nightwork/ Exception [Art 130-131] – No
more nightwork prohibition under R.A. 10151.
Discrimination [Art 135, RA 9710]
Stipulation against marriage [Art 136]
Discharge to prevent enjoyment of benefits [Art
137(a)(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.
Discharge on account of pregnancy [Art
137(a)(2)] To discharge such woman on account
of her pregnancy, while on leave or in
confinement due to her pregnancy.
Discharge on account of testimony [Art
137(a)(3)] To discharge or refuse the admission
of such woman upon returning to her work for
fear that she may again be pregnant. [Book III,
Rule XII, Sec 13(d)] It shall be unlawful for any
employer: …to discharge any woman or child or
any other employee for having filed a complaint
or having testified or being about to testify under
the Code.
Expulsion of Women faculty/ female student
due to pregnancy outside of marriage
[Sec 13c RA 9710 Magna Carta of Women]
(c) Expulsion and non-readmission of women
faculty due to pregnancy outside of marriage
shall be outlawed. No school shall turn out or
refuse admission to a female student solely on
the account of her having contracted pregnancy
outside of marriage during her term in school.
d. Anti Sexual Harassment Act[RA 7877]
Unlawful Forms of Sexual Harassment
Employment or Work Related
(1) The sexual favor is made as a condition (HFR)
(a) in the hiring or in the employment, re-
employment or continued employment of said
individual or
(b) in granting said individual favorable
compensation, terms, conditions, promotions,
or privileges, or
(c) in the refusal to grant the sexual favor results
in limiting, segregating or classifying the EE
which in any way would discriminate, deprive or
diminish employment opportunities or
otherwise adversely affect said employee;
(2) The above acts would either:
(a) impair the employee’s rights or privileges
under existing labor laws; or
(b) result in an intimidating, hostile, or offensive
environment for the employee.
Education or Training environment
In an education or training environment, sexual
harassment is committed: (CECI)
(a) Against one who is under the care, custody
or supervision of the offender
(b) Against one whose education, training,
apprenticeship or tutorship is entrusted to the
offender;
(c) When the sexual favor is made a condition to
the giving of a passing grade, or the granting of
honors and scholarships, or the payment of a
stipend, allowance or other benefits, privileges,
or considerations; or
(d) When the sexual advances result in an
intimidating, hostile or offensive environment
for the result, trainee or apprentice.
Persons who may be liable
(1) Any employer, employee, manager,
supervisor, agent of the employer, teacher,
instructor, professor, coach, trainer or any other
person, regardless of whether the demand,
request for requirement for submission is
accepted by the object of said act having
authority, influence or moral ascendancy over
another in a work or training or education
environment, who demands, requests or
otherwise requires any sexual favor from
another,
(2) Any person who directs or induces another
to commit any act of sexual harassment as
herein defined. OR
(3) Any person who cooperates in the
commission by another without which it would
NOT have been committed, shall also be held
liable under this Act
Role of the employer or Head of Office
The Employer or Head of Office shall have the
duty:
(1) to prevent the commission of such acts and
(2) to lay down the procedure for the resolution,
settlement or prosecution of committed acts.
He shall be solidarily liable for damages:
(1) if he is informed of such acts by the offended
party and
(2) no immediate action is taken thereon.
Independent Action for Damages
The victim of work, education or training-related
sexual harassment can institute a separate and
independent action for damages and other
affirmative relief.
Sanctions
(1) Criminal: imprisonment of 1 month to mos.
Or fine of P10k to P20k or both Prescription of
such action is in 3 years.
(2) Termination
As a managerial employee, petitioner is bound
by more exacting work ethics. When such moral
perversity is perpetuated against his
subordinate, he provides a justifiable ground for
his dismissal for lack of trust and confidence. It is
the right, nay the duty of every employer to
protect its employees from oversexed superiors.
[Libres v. NLRC, 1999]
Cortez’s plant manager manifested a special
liking for her, so much so that she was receiving
special treatment from him who would
oftentimes invite her "for a date," which she
would as often refuse.
On many occasions, he would make sexual
advances - touching her hands, putting his arms
around her shoulders, running his fingers on her
arms and telling her she looked beautiful. The
special treatment and sexual advances
continued during her employment for four (4)
years but eventually, he made her understand
that if she would not give in to his sexual
advances he would cause her termination from
the service; and he made good his threat when
he started harassing her.
Public respondent appears baffled why it took
private respondent more than four years to
expose William Chua's alleged sexual
harassment. The gravamen of the offense in
sexual harassment is not the violation of the
employee's sexuality but the abuse of power by
the employer. Any employee, male or female,
may rightfully cry "foul" provided the claim is
well substantiated. Strictly speaking, there is no
time period within which he or she is expected
to complain through the proper channels. The
time to do so may vary depending upon the
needs, circumstances, and more importantly,
the emotional threshold of the employee.
Not many women are made of the stuff that can
endure the agony and trauma of a public, even
corporate, scandal. If petitioner corporation had
not issued the third memorandum that
terminated the services of private respondent,
we could only speculate how much longer she
would keep her silence. Perhaps, to private
respondent's mind, for as long as she could
outwit her employer's ploys she would continue
on her job and consider them as mere
occupational hazards. [Phil. Aelous Automotive
United Corp. v. NLRC, 2000]
K. EMPLOYMENT OF MINORS (Labor Code and
RA No.7610, RA No. 9231)
CONSTITUTIONAL BASIS Art II, Sec. 13 of the
1987 Constitution
(1) The State recognizes the vital role of the
youth in nation-building and shall promote and
protect their physical, moral, spiritual,
intellectual, and social wellbeing.
(2) It shall inculcate in the youth patriotism and
nationalism, and encourage their involvement in
public and civic affairs.
General Rule: Children below 15 shall NOT be
employed
Legal Basis: Art. 139(a) of the Labor Code and
Sec. 12 to 16 of RA 7610 as amended by RA 7658
and RA 9231
Exceptions
(1) Child works directly under the sole
responsibility of his parents or legal guardian and
where only members of the ER’s family are
employed, provided:
(2) his employment does NOT endanger his life,
safety, health and morals,
(3) nor impairs his normal development, and
(a) the parent or legal guardian shall provide the
said minor child with the prescribed primary
and/or secondary education; [Sec. 12 of RA 7610
as amended by RA 7658] (4) child’s employment
or participation in public entertainment or
information through cinema, theater, radio or
television is essential, provided that: [Sec. 12 of
RA 7610 as amended by RA 7658]
(a) employment does NOT involve ads or
commercials promoting alcohol, tobacco and its
by-products or violence [Sec. 14 of RA 7610]
(b) the employment contract is concluded by
the child’s parents or guardian, and approved by
DOLE
(c) The ER shall ensure the protection, health,
safety and morals of the child
(d) The ER shall institute measures to prevent
the child’s exploitation or discrimination taking
into account the system and level of
remuneration, and the duration and
arrangement of working time
(e) The ER shall formulate and implement,
subject to the approval and supervision of
competent authorities, a continuing program for
training and skills acquisition of the child. [Sec.
12 of RA 7610 as amended by RA 7658]
EMPLOYMENT OF CHILDREN FROM 15 TO 18 -
allowed but restricted to non-hazardous
undertakings.
The following are HAZARDOUS workplaces:
(1) Nature of the work exposes the workers to
dangerous environmental elements,
contaminants or working conditions;
(2) construction work, logging, fire-fighting,
mining, quarrying, blasting, stevedoring, dock
work, deep sea fishing, and mechanized farming;
(3) manufacture or handling of explosives and
other pyrotechnic products;
(4) exposure to or use of heavy power-driven
machinery or equipment;
(5) exposure to or use of power-driven tools [IRR
Book III Rule XII Sec. 3]
L. EMPLOYMENT OF HOUSEHELPERS
DEFINITION
"Domestic or household services" shall mean
service in the ER'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 ER's household, including
services of family drivers. [Art. 141, LC]
The term “househelper” as used herein is
synonymous to the term “domestic servant” and
shall refer to any person, whether male or
female, who renders services in and about the
employer’s home and which services are usually
necessary or desirable for the maintenance and
enjoyment thereof, and ministers exclusively to
the personal comfort and enjoyment of the
employer’s family. [IRR Rule XII Sec.1(b)]
A househelper or a laundry woman, as well as a
gardener, driver, or a houseboy who work in the
staff house of a company are NOT househelpers.
The criterion is not the nature of the work but
the personal comfort and enjoyment of the
family of the employer in the home of said
employer. [Apex Mining Co. v. NLRC, 1991]
BENEFITS ACCORDED HOUSEHELPERS
Compensation
Minimum wage rates shall be equivalent to the
basic cash wages plus lodging, food and medical
attendance. [Art. 143-144; Civil Code Art. 1689]
Minimum wage [Art. 143, as amended by RA
7655] Househelpers shall be paid the following
minimum wage rates:
(1) Eight hundred pesos (P800.00) a month for
househelpers in Manila, Quezon, Pasay, and
Caloocan cities and municipalities of Makati, San
Juan, Mandaluyong, Muntinlupa, Navotas,
Malabon, Parañaque, Las Piñas, Pasig, Marikina,
Valenzuela, Taguig and Pateros in Metro Manila
and in highly urbanized cities;
(2) Six hundred fifty pesos (P650.00) a month for
those in other chartered cities and first-class
municipalities; and
(3) Five hundred fifty pesos (P550.00) a month
for those in other municipalities.
Review of employment contract
The employers shall review the employment
contracts of their househelpers every three (3)
years with the end in view of improving the
terms and conditions thereof.
SSS Membership
Those househelpers who are receiving at least
One thousand pesos (P1,000.00) shall be
covered by the Social Security System (SSS) and
be entitled to all the benefits provided
thereunder.
Time and Manner of Payment:
Wages shall be paid directly to the househelper
to whom they are due at least once a month. No
deductions therefrom shall be made by the
employer unless authorized by the househelper
himself or by existing laws. [Book III, Rule XIII,
Sec. 9]
 Right against assignment to non-household
work at a wage rate lower than that mandated
for agricultural or nonagricultural enterprises
depending on the case. [Art 145]
Opportunity for education if househelper is
below 18 years [Art 146; NCC 1691]
(1) ER shall provide for at least elementary
education;
(2) cost shall be part of the EE’s compensation
UNLESS otherwise agreed upon.
Just and humane treatment [Art 147; NCC
1694]
The employer shall treat the househelper in a
just and humane manner. In no case shall
physical violence be used upon the househelper
[Art. 147]
Board, lodging and medical attendance shall be
furnished by employer [Art 148; NCC 1690]
Household work - Non-hazardous work for
persons between 15-18 years old. [DO 4-99 Sec.
4]
Contract for Domestic Service shall NOT exceed
2 years but renewable annually [Art 142;
NCC1692]
Hours of Work - House helpers shall NOT be
required to work more than ten hours a day.
[NCC 1695]
Vacation with Pay - Shall be allowed 4 paid
vacation days per month [NCC 1695]
Funeral Expenses
In case of death of the house helper:
(1) The head of the family shall bear the funeral
expenses
(2) If the house helper has no relatives in the
place where the head of the family lives, with
sufficient means. [NCC 1696]
Employment Certification ER shall give the
househelper a written statement of the nature
and duration of the service and his or her
efficiency and conduct as househelper upon
severance. [Art 151; NCC 1699]
Employment Records The employer may keep
such records as he may deem necessary to
reflect the actual terms and conditions of
employment of his househelper, which the latter
shall authenticate by signature or thumbmark
upon request of the employer. [Art 152]
TERMINATION
In case of termination
Fixed - Security of tenure
Termination prior to contract expiry must be for
just cause, if the duration of the household
service is NOT determined either by stipulation
or by the nature of the service, the ER or the
househelper may give notice to put an end to the
relationship five days before the intended
termination of the service. [Art 149; NCC 1697] If
the period for household service is fixed, the
house helper has a right against termination
before the expiration of the term, except for a
just cause.
Not fixed- Indemnity for unjust termination of
service [Art 150; NCC 1698]
If the duration of the household service is not
fixed either by stipulation or by the nature of the
service, the employer or the house helper may
give notice to end, the relationship five days
before the intended termination. [Rule XII, Book
III Sec. 10-17 IRR]
Reliefs for unjust termination
If unjustly dismissed, the house helper is entitled
to be paid the compensation already earned plus
that for 15 days by way of indemnity.
M. EMPLOYMENT OF HOMEWORKERS
Note: DO 5, DOLE (February 4, 1992), is now Rule
XIV, Book III of the IRR.
DEFINITION
Homeworker applies to any person who
performs industrial homework for an employer,
contractor, or sub-contractor. [Sec. 1, Rule XIV,
Book III]
Industrial homework
(1) Is a system of production under which work
for an ER or contractor is carried out by a
homeworker at his/her home.
(2) Materials may or may not be furnished by the
ER or contractor.
(3) Decentralized form of production, where
there is ordinarily very little supervision or
regulation of methods of work. [Sec. 2(a), Rule
XIV, Book III]
Definition of employer
The employer means any person who
(1) Acts as a contractor – 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 ER’s direction; or
(2) Sells any goods, articles, or materials to be
processed or fabricated in or about a home and
then rebuys them after. [Art. 155, LC]
Note: Sec 2(d), Rule XIV, Book III is substantially
similar to the above.
RIGHTS AND BENEFITS ACCORDED
HOMEWORKERS
(1) Right to form, join or assist organizations [Sec
3, Rule XIV, Book III].
(2) Right to acquire legal personality and the
rights and privileges granted by law to legitimate
labor organizations upon issuance of the
certification of registration [Sec 4, Rule XIV, Book
III]
(3) Immediate payment upon ER’s receipt of
finished goods or articles [Sec 6, Rule XIV, Book
III]
(4) SSS, MEDICARE and ECC premium
contributions shall be deducted from their pay
and shall be remitted by
ER/contractor/subcontractor to the SSS [Sec 6,
Rule XIV, Book III]
(5) ER may require homeworker to redo work
improperly executed without additional pay [Sec
9a, Rule XIV, Book III]
(6) ER need not pay homeworker for any work
done on goods or articles not returned due to
homeworker’s fault [Sec 9b, Rule XIV, Book III]
(7) If subcontractor/contractor fails to pay
homeworker, ER is jointly and severally liable
with the former to the homeworker for his/her
wage [Sec 11, Rule XIV, Book III]
(8) ER shall assist the homeworkers in the
maintenance of basic safe and healthful working
conditions at the homeworkers’ place of work.
[Sec 11, Rule XIV, Book III]
(9) Homework prohibited in the ff:
(a) explosives, fireworks and articles of like
character;
(b) drugs and poisons; and
(c) other articles, the processing of which
requires exposure to toxic substances. [Sec 13,
Rule XIV, Book III]
Regional Office shall provide technical
assistance to registered homeworkers’
organizations [Sec 14, Rule XIV, Book III]
CONDITIONS FOR DEDUCTION FROM
HOMEWORKER’S EARNINGS
Sec. 8, Rule XIV, Book III: Deduction –
No deduction from the homeworker’s earnings
for the value of materials lost, destroyed or
damaged unless:
(1) Homeworker is clearly shown to be
responsible for loss or damage
(2) Reasonable opportunity to be heard
(3) Amount of deduction is fair and reasonable,
and does not exceed actual loss or damage
(4) Deduction does not exceed 20% of
homeworker’s weekly earnings
N. APPRENTICES AND LEARNERS
APPRENTICES
DEFINITION
Note: Art. 58 has been superseded by Section 4
(j), (k), (l), (m) of RA 7796 quoted below:
(j) "Apprenticeship" training within employment
with compulsory related theoretical instruction
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 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.
Apprenticeable occupation
“Apprenticeable Occupation” is an occupation
officially endorsed by a tripartite body and
approved to be apprenticeable by the authority.
[RA 7796, Sec. 4 (m)]
The act of filing the proposed apprenticeship
program with the DOLE is a preliminary step
towards its final approval, and does not
instantaneously give rise to an employer
apprentice relationship. It must be duly
approved by the Minister of Labor and
Employment. Hence, since the apprenticeship
agreement between petitioner and respondent
has no force and effect, respondent's assertion
that he was hired not as an apprentice but as a
delivery boy deserves credence. [Nitto
Enterprises vs. NLRC, 1995]
Conditions under which children below 15 may
be employed
Children below fifteen (15) years of age shall not
be employed except:
(1) When a child works directly under the sole
responsibility of his parents or legal guardian and
where only members of the employer's family
are employed: Provided, however, That his
employment neither endangers his life, safety,
health and morals, nor impairs his normal
development: Provided, further, That the parent
or legal guardian shall provide the said minor
child with the prescribed primary and/or
secondary education; or
(2) Where a child's employment or participation
in public entertainment or information through
cinema, theater, radio or television is essential:
Provided, The employment contract is concluded
by the child's parents or legal guardian, with the
express agreement of the child concerned, if
possible, and approval of the Department of
Labor and Employment: and Provided, That the
following requirements in all instances are
strictly complied with:
(a) The employer shall ensure the protection,
health, safety, morals and normal development
of the child;
(b) The employer institute measures to prevent
the child's exploitation or discrimination taking
into account the system and level of
remuneration and the duration and
arrangement of working time; and
(c) The employer shall formulate and
implement, subject to the approval and
supervision of competent authorities, a
continuing program for training and skills
acquisition of the child.
In the above exceptional cases where any such
child may be employed, the employer shall first
secure, before engaging child, a work permit
from the Department of Labor and Employment
which shall ensure observance of the above
requirements.
The Department of Labor and Employment shall
promulgate rules and regulations necessary for
the effective implementation of this Section. [RA
7160, Sec. 12 as amended by RA 7658, Sec. 1]
Qualifications of apprentice
(b) Possess vocational aptitude and capacity for
appropriate tests; and
(c) Possess the ability to comprehend and follow
oral and written instructions. [Art. 59, LC]
Integrating both the abovementioned
provisions then the qualifications of an
apprentice are as follows:
(1) At least 15 years of age [as amended by R.A.
7610], provided that if he is below 18 years, he
shall not be eligible for hazardous occupation;
(2) Possess vocational aptitude and capacity for
appropriate tests;
(3) Possess the ability to comprehend and follow
oral and written instructions. [Art. 59 of the LC,
as amended by R.A. 7610].
(4) Physically fit for occupation
Allowed employment
See: RA 7769, Sec. 4 (m) above
Employment of Apprentices: When applicable:
(1) Only employers in highly technical industries
may employ apprentices; and
(2) Only in apprenticeable occupations approved
by the Secretary of Labor. [Art. 60]
Terms and conditions
Apprenticeship agreements, including the wage
rates of apprentices, shall conform to the rules
issued by the Secretary of Labor and
Employment. The period of apprenticeship shall
not exceed six months. Apprenticeship
agreements providing for wage rates below the
legal minimum wage, which in no case shall start
below 75 percent of the applicable minimum
wage, may be entered into only in accordance
with apprenticeship programs duly approved by
the Secretary of Labor and Employment. [LC, Art.
61] The Secretary of Labor and Employment may
authorize the hiring of apprentices without
compensation whose training on the job is
required by the school or training program
curriculum or as requisite for graduation or
board examination. [Art. 72, LC] Note: Wage
Order No. NCR-17, May 17, 2012 also provides
that the wages of apprentices and learners shall
in no case be less than seventy-five percent
(75%) of the applicable minimum wage rates.
Enforcement
No person shall institute any action for the
enforcement of any apprenticeship agreement
or damages for breach of any such agreement,
unless he has exhausted all available
administrative remedies. [Art. 67, LC]
Incentives for employers
An additional deduction from taxable income of
one-half (1/2) of the value of labor training
expenses incurred for developing the
productivity and efficiency of apprentices shall
be granted to the person or enterprise
organizing an apprenticeship program: Provided,
That such program is duly recognized by the
Department of Labor and Employment:
Provided, further, That such deduction shall not
exceed ten (10%) percent of direct labor wage:
and Provided, finally, That the person or
enterprise who wishes to avail himself or itself of
this incentive should pay his apprentices the
minimum wage. [LC Art. 71]
Summary of Rules:
(1) The apprentice must be paid not less than
75% of the prescribed minimum salary [Art. 61];
Exception: The employer MAY NOT pay any wage
if the apprenticeship training is:
(a) part of the school curriculum,
(b) a requirement for graduation, or
(c) a requirement for board examination [Art. 72]
(2) The apprenticeship agreement must be
approved by the DOLE Secretary (without such
one shall be deemed a regular employee) [Nitto
Enterprises v. NLRC, G.R. No. 114337, Sept. 29,
1995];
(3) The employer is not compelled to continue
one’s employment upon termination of
apprenticeship;
(4) One-half (1/2) of the value of labor training
expenses incurred for developing the
productivity and efficiency of apprentices of the
training cost is deducted from the employer’s
income tax but it shall not exceed 10% of direct
labor wage [Art. 71]
Requisites of the deduction:
(a) Apprenticeship program must be duly
approved by the DOLE;
(b) Deduction shall NOT exceed 10% of direct
labor wage;
(c) Employer must pay his apprentices the
minimum wage.
Working scholars – there is no employer-
employee relationship between students on one
hand, and schools, colleges or universities on the
other, where there is written agreement
between them under which the former agree to
work for the latter in exchange for the privilege
to study free of charge, provided, the students
are given real opportunities, including such
facilities as may be reasonable and necessary to
finish their chosen courses under such
agreement. [Sec. 14, Rule X, IRR]
LEARNERS
Definition
"Learners" refers to persons hired as trainees in
semiskilled and other industrial occupations
which are nonapprenticeable. Learnership
programs must be approved by the authority.
[RA 7796, Sec. 4] (Occupations) which may be
learned through practical training on the job in a
relatively short period of time which shall not
exceed three (3) months. [Art. 73, sentence 2,
LC]
Allowed employment
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. [Art. 74, LC]
When learners may be hired
(1) No experienced workers are available;
(2) The employment of learners being necessary
to prevent the curtailment of employment
opportunities; and
(3) The employment will neither create unfair
competition in terms of labor costs nor impair
working standards.
Terms and conditions of employment
Any employer desiring to employ learners shall
enter into a learnership agreement with them,
which agreement shall include:
(1) The names and addresses of the learners;
(2) The duration of the learnership period, which
shall not exceed three (3) months;
(3) 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) 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. 75, LC]
Note: Learners employed in piece or incentive-
rate jobs during the training period shall be paid
in full for the work done. [Art. 76, LC]
Summary of Rules
(1) The duration of learnership shall not exceed
3 months [Art. 73];
(2) If the learnership of 3 months is completed,
the employer may be compelled to continue
with the services of the learner as a regular
employee [Art. 75(d)];
(3) There is a commitment from the employer to
employ the learners if they so desire, as regular
employees upon completion of the learnership
[Art. 75(d)];
(4) If the learner is dismissed from service
without just and valid cause and without due
process after 2 months of service, he will be
deemed as regular employee; and
(5) The wages or salary rates of the learners
which shall begin at not less than 75% of the
applicable minimum wage.
PERSONS WITH DISABILITY [RA 7277, as
amended by RA No. 9442] – DIFFERENTLY
ABLED WORKERS
a. DEFINITION
“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
“Impairment” is any loss, diminution or
aberration of psychological, physiological, or
anatomical structure or function
“Disability” shall mean:
(1) Physical or mental impairment that
substantially limits one or more psychological,
physiological or anatomical function of an
individual or activities of such individual;
(2) a record of such an impairment;
(3) or being regarded as having such an
impairment
“Handicap” refers to a disadvantage for a given
individual, resulting from an impairment or a
disability that limits or prevents the function or
activity that is considered normal given the age
and sex of the individual.
b. RIGHTS OF DISABLED WORKERS
Equal opportunity for employment
No disabled person shall be denied access to
opportunities for suitable employment. A
qualified disabled EE shall be subject to the same
terms and conditions of employment and the
same compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified
ablebodied person. [Sec. 5 [par. 1], RA 7277]
Reserved contractual positions
5% of all casual, emergency and contractual
positions in the DSWD; DOH, DepEd; and other
government agencies, offices or corporations
engaged in social development shall be reserved
for disabled persons. [Sec 5 [par. 2], RA 72777]
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 6, RA 7277]
Apprenticeship opportunity
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. [Sec. 7, RA 7277]
Full minimum wage
All qualified handicapped workers shall receive
the full amount of the minimum wage rate
prescribed herein. [Sec 7, Wage Order No. NCR-
17, May 17, 2012] In this light, the Magna Carta
for Disabled Persons mandates that a qualified
disabled EE should be given the same terms and
conditions of employment as a qualified able-
bodied person. Since the Magna Carta accords
them the rights of qualified able-bodied persons,
they are thus covered by Article 280 of the Labor
Code. In the present case, the handicap of
petitioners [deaf-mutes] is NOT a hindrance to
their work. The eloquent proof of this statement
is the repeated renewal of their employment
contracts. [Bernardo v. NLRC, 1999]
Discounts and other privileges
(a) Persons with disability shall be entitled to the
following:
(b) At least 20% discount from all establishments
relative to the utilization of all services in hotels
and similar lodging establishments; restaurants
and recreation centers for the exclusive use or
enjoyment of persons with disability;
(c) A minimum of 20% discount on admission
fees charged by theaters, cinema houses,
concert halls, circuses, carnivals and other places
of culture, leisure and amusement for the
exclusive use or enjoyment of persons with
disability;
(d) At least 20% discount for the purchase of
medicines in all drugstores for the exclusive use
or enjoyment of persons with disability;
(e) At least 20%% discount on medical and dental
services including diagnostic and laboratory fees
such as, but not limited to, x-rays, computerized
tomography scans and blood tests, in all
government facilities, subject to guidelines to be
issued by the DOH in coordination with the
PHILHEALTH.
(f) At least 20% discount on medical and dental
services including diagnostic and laboratory fees
and professional fees of attending doctors in all
private hospitals and medical facilities, in
accordance with the rules and regulations to be
issued by the DOH, in coordination with
PHILHEALTH;
(g) At least 20% discount on fare for domestic air
and sea travel for the exclusive use or enjoyment
of persons with disability;
(h) At least 20% discount in public railways,
skyways, and bus fare for the exclusive use and
enjoyment of persons with disability.
(i) Educational assistance to persons with
disability, for them to pursue primary,
secondary, tertiary, post tertiary, as well as
vocational or technical education, in both public
and private schools, through the provision of
scholarships, grants, financial aids, subsidies and
other incentives to qualified persons with
disability, including support for books, learning
materials and uniform allowance to the extent
feasible; Provided, That persons with disability
shall meet minimum admission requirements;
(j) To the extent practicable and feasible, the
continuance of the same benefits and privileges
given by the GSIS, SSS, and PAG-IBIG, as the case
may be, as are enjoyed by those in actual service;
(k) To the extent possible, the government may
grant special discounts in special programs for
persons with disability on purchase of basic
commodities, subject to guidelines to be issued
for the purpose by the DTI and the DA; and
(l) Provision of express lanes for persons with
disability in all commercial and government
establishments; in the absence thereof, priority
shall be given to them. [Sec 32, RA 7277, as
amended by RA 9442]
Conditions for entitlement
The privileges in Sec 32 are available only to
persons with disability who are Filipino citizens
upon submission of any of the following as proof
of his/her entitlement thereto:
(a) An identification card issued by the city or
municipal mayor or the barangay captain of the
place where the persons with disability reside;
(b) The passport of the persons with disability
concerned; or,
(c) Transportation discount fare ID issued by the
National Council for the Welfare of Disabled
Persons (NCWDP).
The privileges may not be claimed if the persons
with disability claim a higher discount as may be
granted by the commercial establishment
and/or under other existing laws or in
combination with other discount program/s.
c. Prohibitions on discrimination against
persons with disability
Discrimination of 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 compensation, job
training and other terms, conditions and
privileges of employment. The following
constitute acts of discrimination:
(1) Limiting, segregating or classifying a disabled
job applicant in such a manner that adversely
affects his work opportunities
(2) 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 related for the position in question
and are consistent with business necessity;
(3) Utilizing standards, criteria, or methods of
administration that:
(a) have the effect of discrimination on the basis
of disability; or
(b) perpetuate the discrimination of others who
are the subject to common administrative
control.
(4) Providing less compensation, such as salary,
wage or other forms of remuneration and fringe
benefits, to qualified disabled employee, by
reason of his disability, than the amount to
which a non-disabled person performing the
same work is entitled;
(5) 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;
(6) Re-assigning or transferring a disabled
employee to a job or position he cannot perform
by reason of his disability;
(7) Dismissing or terminating the services of a
disabled employee by reason of his disability
unless the employer can prove that he impairs
the satisfactory performance of the work
involved to the prejudice of the business entity;
Provided, however, That the employer first
sought to provide reasonable accommodations
for the disabled persons;
(8) Failing to select or administer in the most
effective manner employment tests which
accurately reflect the skills, aptitude or other
factor of the disabled applicant or employee that
such test purports to measure, rather than the
impaired sensory, manual or speaking skills of
such applicant or employee, if any; and
(9) Excluding disabled persons from membership
in labor unions or similar organizations.
Employment Entrance Examination
Upon an offer of employment, a disabled
applicant may be subjected to medical
examinations, on the following occasions:
(a) all entering employees are subjected to such
an examination regardless of disability;
(b) Information obtained during the medical
condition or history of the applicant is collected
and maintained on separate forms and in
separate medical files and is treated as a
confidential medical record; Provided, however,
That:
(1) supervisors and managers may be informed
regarding necessary restrictions on the work or
duties of the employees and necessary
accommodations:
(2) first aid and safety personnel may be
informed, when appropriate, if the disability
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
in accordance with this Act. [Sec. 32, RA 7277]
Prohibition on Verbal, Non-Verbal Ridicule and
Vilification Against Persons with Disability
Public Ridicule
The act of making fun of or contemptuous
imitating or making mockery of persons with
disability whether in writing, or in words, or in
action due to their impairments. [Sec. 39, RA
7277, as amended]
Prohibition
No individual, group or community shall execute
any of these acts of ridicule against persons with
disability in any time and place which could
intimidate or result in loss of self-esteem of the
latter.
Vilification includes:
(a) The utterance of slanderous and abusive
statements against a person with disability;
and/or,
(b) An activity in public which incites hatred
towards, serious contempt for, or severe ridicule
of persons with disability. [Sec. 41, RA 7277, as
amended]
Prohibition Any individual, group or community
is hereby prohibited from vilifying any person
with disability which could result into loss of self-
esteem of the latter.
d. Incentives for Employers
Tax incentives for employment of disabled
persons
Private entities that employ disabled persons
who meet the required skills or qualifications,
either as regular employee, apprentice or
learner, shall be entitled to an additional
deduction, from their gross income, equivalent
to 25% of the total amount paid as salaries and
wages to disabled persons: Provided, however,
That such entities present proof as certified by
the Department of Labor and Employment and
the Department of Health as to his disability,
skills, and qualifications. [RA 7277, Sec. 8 (b)]
Tax incentives for construction of disabled-
friendly facilities Private entities that improve or
modify their physical facilities in order to provide
reasonable accommodation for disabled persons
shall also be entitled to an additional deduction
from their net taxable income, equivalent to 50%
of the direct costs of the improvements or
modifications. This Section, however, does NOT
apply to improvements or modifications or
facilities required under BP 344. [RA 7277, Sec. 8
(c)]
Tax incentives for establishments giving
discounts
The establishments may claim the discounts
granted in Sec. 32 (a), (b), (c), (e), (f) and (g) as
tax deductions based on the net cost of the
goods sold or services rendered; Provided,
however, That the cost of the discount shall be
allowed as deduction from gross income for the
same taxable year that the discount is granted:
Provided, further, That the total amount of the
claimed tax deduction net of VAT if applicable,
shall be included in their gross sales receipts for
tax purposes and shall be subject to proper
documentation and to the provisions of the
National Internal Revenue Code, as amended.
[Sec. 32, RA 7277, as amended by RA 9442]
IV. TERMINATION OF EMPLOYMENT
A. EMPLOYER- EMPLOYEE RELATIONSHIP
EMPLOYER-EMPLOYEE RELATIONSHIP The
existence or absence of ER-EE relationship is a
question of law and a question of fact, each in its
defined sense.
1.) FOUR-FOLD TEST
The “four-fold test” is composed of four
elements. This test is the yardstick to determine
employer-employee relationship:
(1) selection and engagement of the employee;
(2) payment of wages;
(3) power of dismissal; and
(4) employer’s power to control the employee’s
conduct with respect to the means and methods
by which the work is to be accomplished.
[Brotherhood Labor Unity Movement of the
Philippines et. al. v. Zamora, G.R. No. 48645, Jan.
7, 1987].
Power to control is the most important element.
[Sonza v. ABS-CBN Broadcasting Corp, G.R. No.
138051, June 10, 2004]
The control test calls merely for the “existence”
of the right to control and not the “actual
exercise” of the right. [Zanotte Shoes v. NLRC,
G.R. No. 100665, Feb. 13, 1995]
Although no particular form of evidence is
required to prove the existence of the
relationship, and any competent and relevant
evidence to prove the relationship may be
admitted, a finding that the relationship exists
must nonetheless rest on substantial evidence,
which is that amount of relevant evidence that a
reasonable mind might accept as adequate to
justify a conclusion. [Legend Hotel (Manila) v.
Titanium Corp., G.R. No. 153511, 18 July 2012]
Not every form of control will have the effect of
establishing ER-EE relationship. The line should
be drawn between:
(1) Rules that merely serve as guidelines towards
the achievement of mutually desired results
without dictating the means or methods to be
employed in attaining it. These aim only to
promote the result. In such case, NO EE-ER
relationship exists.
(2) Rules that control or fix the methodology and
bind or restrict the party hired to the use of such
means. These address both the result and the
means used to achieve it and hence, EE-ER
relationship exists. [Insurance Life v. NLRC, G.R.
No. 84484, Nov. 15, 1989]
ECONOMIC DEPENDENCE TEST
Two-tiered approach.
(1) First Tier: Control Test (refer to the Four-Fold
Test)
(2) Second Tier: The underlying economic
realities of the activity or relationship. [Sevilla v.
Court of Appeals].
The benchmark of economic reality in analyzing
possible employment purposes ought to be the
economic dependence of the worker on his
employer.
The standard of “economic dependence” is
whether the worker is dependent on the alleged
employer for his continued employment in that
line of business. [Orozco v. CA, GR No. 155207,
13 August 2008].
2. KINDS OF EMPLOYMENT
a. Probationary
Legal basis
Probationary employment shall not exceed 6
months from the date the employee started
working, unless it is covered by an
apprenticeship agreement stipulating a longer
period. The services of an employee who has
been engaged on a probationary basis may be
terminated for a just cause or when he fails to
qualify as a regular employee in accordance with
reasonable standards made known by the
employer to the employee at the time of his
engagement. An employee who is allowed to
work after a probationary period shall be
considered a regular employee. [Art. 281, LC]
In all cases of probationary employment, the
employer shall make known to the employee the
standards under which he will qualify as regular
employee at the time of his engagement. Where
no standards are made known to the employee
at the time of engagement, he shall be deemed
a regular employee. [IRR, Book VI, Rule 1, Sec.
6(d)]
Definition
A probationary employee is one who is on trial
by an employer during which the employer
determines whether or not he is qualified for
permanent employment [International Catholic
Migration Comm. vs. NLRC, 1989]
Termination - Can only be terminated for:
(1) Just causes; or
(2) Failure to qualify as a regular employee in
accordance with reasonable standards made
known by the employer to the employee at the
time of engagement.
Note: The probationary employee is entitled to
substantial and procedural due process before
termination.
Limitations to termination
(1) It must be exercised in accordance with the
specific requirements of the contract
(2) If a particular time is prescribed, the
termination must be within such time and if
formal notice is required, then that form must be
used;
(3) The employer’s dissatisfaction must be real
and in good faith, not feigned so as to circumvent
the contract or the law;
(4) There must be no unlawful discrimination in
the dismissal. [Manila Hotel Corporation v. NLRC,
G.R. No. 53453, January 22, 1986].
Purposes
(1) Observance Period – for employer to
determine if employee is qualified and for
employee to demonstrate to the ER his skills
(2) Restrictive- As long as the termination was
made before the expiration of the six-month
probationary period, the employer has a right to
sever the employer-employee relationship
Indeed, the employer has the right or is at liberty
to choose as to who will be hired and who will be
declined. It is within the exercise of this right to
select his employees that the employer may set
or fix a probationary period within which the
latter may test and observe the conduct of the
former before hiring him permanently. The right
of a laborer to sell his labor to such persons as he
may choose is, in its essence, the same as the
right of an employer to purchase labor from any
person whom it chooses. The employer and the
employee have thus an equality of right
guaranteed by the Constitution. [Grand Motors
Corp. vs. MOLE, 1984]
Duration
Generally, the probationary period of
employment is limited to six (6) months. The
exception to this general rule is when the parties
to an employment contract may agree
otherwise, such as when the same is established
by company policy or when the same is required
by the nature of work to be performed by the
employee. In the latter case, there is recognition
of the exercise of managerial prerogatives in
requiring a longer period of probationary
employment, such as in the present case where
the probationary period was set for eighteen
(18) months, i.e. from May, 1980 to October,
1981 inclusive, especially where the employee
must learn a particular kind of work such as
selling, or when the job requires certain
qualifications, skills, experience or training.
[Busier vs. Leogardo, 1984]
Honasan was certainly under observation during
her threeweek on-the-job training. If her services
proved unsatisfactory then, she could have been
dropped as early as during that period. But she
was not. On the contrary, her services were
continued, presumably because they were
acceptable, although she was formally placed
this time on probation.
Even if it be supposed that the probation did not
end with the three-week period of on-the-job
training, there is still no reason why that period
should not be included in the stipulated six-
month period of probation. Honasan was
accepted for on-the-job training on April 15,
1991. Assuming that her probation could be
extended beyond that date, it nevertheless
could continue only up to October 15, 1991,
after the end of six months from the earlier date.
Under this more lenient approach, she had
become a regular employee of Holiday Inn and
acquired full security of tenure as of October 15,
1991. [Holiday Inn Manila vs. NLRC, 1993]
Paras started reporting for work on May 27,
1996. The employers unanimously agreed that
his performance was unsatisfactory. On
November 26, 1996, he received a Notice of
Termination dated November 25, 1996, Applying
Article 13 of the Civil Code, the probationary
period of six (6) months consists of one hundred
eighty [180] days. As clearly provided for in the
last paragraph of Article 13, in computing a
period, the first day shall be excluded and the
last day included. Thus, the one hundred eighty
[180] days commenced on May 27, 1996, and
ended on November 23, 1996. By the time Paras
received the letter he was already a regular
employee of the petitioner under Article 281 of
the Labor Code. [Mitsubishi Motors vs. Chrysler
Union, 2004]
To reiterate, the rule on duration may be
summarized as follows:
General Rule: Probationary employment shall
not exceed six (6) months from the date the
employee started working.
Exceptions:
(1) When the parties to an agreement contract
otherwise:
(2) When the same is established by company
policy;
(3) When the s ame is required by the nature of
the work performed by the employee; and
(4) When it is covered by an apprenticeship
agreement stipulating a longer period
Agreement to extend probationary period
If the extension was ex gratia, an act of liberality
on the part of his employer affording him a
second chance to make good after having
initially failed to prove his worth as an employee.
Such an act cannot now unjustly be turned
against said employer’s account to compel it to
keep on its payroll one who could not perform
according to its work standards. [Mariwasa
Manufacturing v. Leogardo, G.R. No. 74246, Jan.
26, 1989].
Criteria for regularization must be disclosed
In all cases of probationary employment, the
employer shall make known to the employee the
standards under which he will qualify as a regular
employee at the time of his engagement. Where
no standards are made known to the employee
at that time, he shall be deemed a regular
employee. Conversely, an employer is deemed
to substantially comply with the rule on
notification of standards if he apprises the
employee that he will be subjected to a
performance evaluation on a particular date
after his hiring. [Alcira vs. NLRC, 2004]
Regular Status after Probation
When the bank renewed the contract after the
lapse of the six-month probationary period, the
employees thereby became regular employees.
No employer is allowed to determine indefinitely
the fitness of its employees. [Bernardo vs. NLRC,
1999]
Absorbed employees
The private respondents could not be considered
probationary employees because they were
already well trained in their respective functions.
As stressed by the Solicitor General, while
private respondents were still with the CCAS
they were already clerks. Respondent Gelig had
been a clerk for CCAS for more than ten (10)
years, while respondent Quijano had slightly less
than ten (10) years of service. They were,
therefore, not novices in their jobs but
experienced workers. [Cebu Stevedoring Co.,
Inc. vs. Regional Director, 1988]
Double probation
There is no basis for subjecting an employee to
a new probationary or temporary employment
where he had already become a regular
employee when he was absorbed by a sister
company. [A Prime Security Services, Inc. vs.
NLRC, 2000]
Termination and salary
A probationary employee enjoys only a
temporary employment status. This means that
he is terminable at any time, permanent
employment not having been attained in the
meantime. The employer could well decide he
no longer needed the probationary employee’s
services or his performance fell short of
expectations, etc. As long as the termination was
made before the termination of the six-month
probationary period, the employer was well
within his rights to sever the employer-
employee relationship. A contrary interpretation
would defect the clear meaning of the term
“probationary.” [De la Cruz, Jr. vs. NLRC, 2004]
Private school teachers
The provisions of Article 280 of the Labor Code
are not applicable to the present case especially
with respect to the issue of respondent's
acquisition of security of tenure. It is settled that
questions respecting a private school teacher’s
entitlement to security of tenure are governed
by the Manual of Regulations for Private Schools
and not the Labor Code. [Paragraph 75 of the
1970 Manual] [Aklan College vs. Guarino, 2007]
b. Regular employment
Definition
Regular employment is not synonymous with
permanent employment, because there is no
such thing as a permanent employment. Any
employee may be terminated for just cause.
A regular employee is one who is engaged to
perform activities which are necessary and
desirable in the usual business or trade of the
employer as against those which are undertaken
for a specific project or are seasonal. There are
two 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. [Pangilinan vs. Gen. Milling
Corp., 2004]
Standard of determination [Reasonable
connection rule]
The primary standard in determining regular
employment is the reasonable connection
between the particular activity performed by the
employee in relation to the usual business or
trade of the employer. The connection can be
determined by considering the nature of the
work performed and its relation to the scheme
of the particular business or trade in its entirety.
The repeated and continuing need for the
performance of the job has been deemed
sufficient evidence of the necessity, if not
indispensability of the activity to the business. In
the case at bar, continuous and repeated
rehiring, some for nearly two decades, of these
bill collectors indicate the necessity and
desirability of their services, as well as the
importance of the role of bill collectors in the
MWSS. [Lopez vs. MWSS, 2005]
Hiring for an extended period
Where the employment of project employees is
extended long after the supposed project has
been finished, the employees are removed from
the scope of project employees and considered
regular employees. [Audion Electric Co., Inc. vs.
NLRC, 1999]
Repeated renewal of contract
The petitioner cannot rightfully say that since
the private respondent's employment hinged
from contract to contract, it was "temporary",
depending on the term of each agreement.
Under the Labor Code, an employment may only
be said to be "temporary" "where:
(1) it has been fixed for a specific undertaking,
the completion of or termination of which has
been determined at the time of the engagement
of the employee or
(2) where the work or services to be performed
is seasonal in nature and the employment is for
the duration of the season.
Quite to the contrary, the private respondent's
work, that of "typist-clerk" is far from being
"specific" or "seasonal", but rather, one "where
the employee has been engaged to perform
activities which are usually necessary or
desirable in the usual business." And under the
Code, where one performs such activities, he is a
regular employee, "(t)he provisions of written
agreement to the contrary notwithstanding …”
It is true that in Biboso vs Victorias Milling
Company, Inc. we recognized the validity of
contractual stipulations as to the duration of
employment. But we cannot apply it here
because clearly, the contract-to-contract
arrangement given to the private respondent
was but an artifice to prevent her from acquiring
security of tenure and to frustrate constitutional
decrees. [Beta Electric Corp. vs. NLRC, 1990]
Length of time involved
Length of time not controlling, merely serves as
a badge of regular employment.
c. Project employment
Employment fixed on a specific project or
undertaking, completion or termination of which
is determined at the time of engagement of the
employee.
Whether or not the project has a direct relation
to the business of the ER is not important, BUT:
(a) EE must be informed of the nature and
duration of project
(b) project and principal business of ER are two
separate things
(c) no attempt to deny security of tenure to the
worker
Test of project employment
The principal test for determining whether
employees are properly characterized as
"project employees," as distinguished from
"regular employees," is whether or not the
project employees were assigned to carry out a
"specific project or undertaking," the duration
and scope of which were specified at the time
the employees were engaged for that project. As
defined, project employees are those workers
hired:
(1) for a specific project or undertaking, and
(2) the completion or termination of such project
or undertaking has been determined at the time
of the engagement of the employee. [PNOC
Energy Dev’t Corp vs. NLRC, 2007]
Indicators of project employment
(1) The duration of the specific/identified
undertaking for which the worker is engaged is
reasonably determinable;
(2) Such duration, as well as the specific
work/service to be performed, is defined in an
employment agreement and is made clear to the
employee at the time of the hiring;
(3) The work/service to be performed by the
employee is in connection with the particular
project/undertaking for which he is engaged;
(4) The employee, while not employed and
awaiting engagement, is free to offer his services
to any other employer;
(5) The termination of his employment in the
particular project/undertaking is reported to the
DOLE Regional Office having jurisdiction over the
workplace within 30 days following the date of
his separation from work, using the prescribed
form on employees’ terminations /dismissals
/suspensions;
(6) An undertaking in the employment contract
by the employer to pay completion bonus to the
project employee as practiced by most
construction companies. [Samson v. NLRC, G.R.
No. 11366, Feb. 1, 1996].
See Policy No. 2 of 1997 and D.O. 19 of 1993
Samson vs. NLRC (1996):
When the present action for regularization was
filed on November 5, 1989 and during the entire
period of petitioner's employment with private
respondent prior to said date, the rule in force
then was Policy Instruction No. 20, which
required the employer company to report to the
nearest Public Employment Office the fact of
termination of a project employee as a result of
the completion of the project or any phase in
which he is employed.
Furthermore, Department Order No. 19, which
was issued on April 1, 1993, did not totally
dispense with the notice requirement. Instead, it
made provisions and considered it (i.e. the
notice) as one of the "indicators" that a worker
is a project employee.
Work pool employee
A project EE or a member of a work pool may
acquire the status of a regular employee when
the following concur:
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. [Aguilar
Corp. vs. NLRC, 1997]
Rationale for project employment
If a project has already been completed, it
would be unjust to require the employer to
maintain them in the payroll while they are doing
absolutely nothing except waiting until another
project is begun, if at all. In effect, these stand-
by workers would be enjoying the status of
privileged retainers, collecting payment for work
not done, to be disbursed by the employer from
profits not earned. [De Ocampo vs. NLRC, 1990]
Examples of project employment

(1) There is a continuous rehiring of project Private respondents, as well as the other 30
employees even after cessation of a project; and workers, were needed as additional hands for
the renovation work and not for ordinary upkeep
(2) The tasks performed by the alleged “project
and maintenance. The erection of the fire escape
employee” are vital, necessary, and
and other small jobs after the renovation cannot
indispensable to the usual business or trade of
be deemed maintenance but more of casual
the employer. However, the length of time
work. [Phil. Jai-Alai and Amusement Corp. vs.
during which the EE was continuously rehired is
Clave, 1983]
not controlling, but merely serves as a badge of
regular employment. The corporation does not construct vessels for
sale or otherwise which will demand continuous
A work pool may exist although the workers in
production of ships and will need regular
the pool do not receive salaries and are free to
workers. It merely accepts contracts for ship-
seek other employment during temporary
building or for repair of vessels from third
breaks in the business, provided, that the worker
parties. It is only on occasion when it has work
shall be available when called to report for a
contract of this nature that it hires workers to do
project. Although primarily applicable to regular
the job which, needless to say, lasts only for less
seasonal workers, this set-up can likewise be
than a year or longer. Completion of their work
applied to project workers insofar as the effect
or project automatically terminates their
of temporary cessation of work is concerned.
employment. [Sandoval Shipyards, Inc. vs. NLRC,
[Maraguinot vs. NLRC, 1998]
1985]
Members of a work pool from which a
Petitioner was engaged to perform data
construction company draws its project
encoding and keypunching, and her employment
employees, if considered employees of the
was fixed for a specific project or undertaking
construction company while in the work pool,
the completion or termination of which had
been determined at the time of her engagement.
This may be observed from the series of
employment contracts between petitioner and
private respondent, all of which contained a
designation of the specific job contract and a
specific period of employment. [Imbuido vs.
NLRC, 2000]
Employer obligation to make standards known
The law is clear that in all cases involving
employees engaged on probationary' basis, the
employer shall make known to the employee at
the time he is hired, the standards by which he
will qualify as a regular employee.
Nowhere in the employment contract executed
between petitioner and respondent Grulla is
there a stipulation that the latter shall undergo a
probationary period for three months before he
can quality as a regular employee.
There is also no evidence on record showing that
the respondent Grulla had been apprised of his
probationary status and the requirements which
he should comply in order to be a regular
employee. In the absence of these requisites,
there is justification in concluding that
respondent Grulla was a regular employee at the
time he was dismissed by petitioner, and as such
cannot be done without just and authorized
cause. [A. M. Oreta and Co., Inc. vs. NLRC, 1989]
Specified period
The Court has upheld the legality of fixed-term
employment. It ruled that the decisive
determinant in term employment should not be
the activities that the employee is called upon to
perform but the day certain agreed upon by the
parties for the commencement and termination
of their employment relationship. But, this Court
went on to say that where from the
circumstances it is apparent that the periods
have been imposed to preclude acquisition of
tenurial security by the employee, they should
be struck down or disregarded as contrary to
public policy and morals. [Purefoods Corp. vs.
NLRC, 1987]
Continuous rehiring
Despite the insistence of petitioner that they
were project employees, the facts show that as
masons, carpenters and fine graders in
petitioner’s various construction projects, they
performed work which was usually necessary
and desirable to petitioner’s business which
involves construction of roads and bridges. It is
not enough that an employee is hired for a
specific project or phase of work. There must
also be a determination of, or a clear agreement
on, the completion or termination of the project
at the time the employee was engaged. This
second requirement was not met in this case.
[Chua vs. Court of Appeals, 2004] The fact that
the workers have been employed with the
company for several years on various projects,
the longest being nine (9) years, did not
automatically make them regular employees
considering that the definition of regular
employment in Article 280 of the Labor Code,
makes specific exception with respect to project
employment. The re-hiring of petitioners on a
project-toproject basis did not confer upon them
regular employment status. The practice was
dictated by the practical consideration that
experienced construction workers are more
preferred. It did not change their status as
project employees. [C.E. Construction Corp vs.
Cioco, 2004]
d. Seasonal employment
Work or services to be performed are seasonal
in nature, employment is for the duration of the
season.
No continuing need for the worker.
“Regular Seasonal” Employees after One
Season
 Regular seasonal employees are those called to
work from time to time. The nature of their
relationship with the employer is such that
during off season they are temporarily laid off
but during summer season they are reemployed,
or when their services may be needed. They are
not, strictly speaking, separated from the service
but are merely considered as on leave of absence
without pay until they are reemployed. Their
employment relationship is never severed but
only suspended. As such those employees can be
considered as in the regular employment of the
employer. [Manila Hotel Co. v. CIR, G.R. No. L-
18875, Sept. 30, 1963].
For respondents to be excluded from those
classified as regular employees, it is not enough
that they perform work or services that are
seasonal in nature. They must have been
employed only for the duration of one season.
While the records sufficiently show that the
respondents’ work in the hacienda was seasonal
in nature, there was, however, no proof that
they were hired for the duration of one season
only. In fact, the payrolls, submitted in evidence
by the petitioners, show that they availed the
services of the respondents since 1991. Absent
any proof to the contrary, the general rule of
regular employment should, therefore, stand.
The disparity in facts between the Mercado Sr.,
vs. NLRC case and the instant case is best
exemplified by the fact that the farm laborers,
work only for a definite period for a farm worker,
after which they offer their services to other
farm owners. In Mercado, although respondent
constantly availed herself of the petitioners’
services from year to year, it was clear from the
facts therein that they were not in her regular
employ. In other words, they worked for
respondent, but were nevertheless free to
contract their services with other farm owners.
[Hacienda Bino vs. Cuenca, 2005]
e. Casual employment
When not regular, project or seasonal
employee. Requirements to become Regular
employee:
(1) one (1) year service, continuous or broken
(2) with respect to activity employed
(3) employment shall continue while such
activity exists
Nature of work
What determines regularity or casualness is not
the employment contract, written or otherwise,
but the nature of the job. If the job is usually
necessary or desirable to the main business of
the employer, then employment is regular. [A.
M. Oreta and Co., Inc. vs. NLRC, 1989]
One-year service
The fact that the petitioners have been hired on
a "temporary or seasonal" basis merely is no
argument either.
As held in Philippine Bank of Communications v.
NLRC, a temporary or casual employee, under
Article 281 of the Labor Code, becomes regular
after service of one year, unless he has been
contracted for a specific project.
And we cannot say that merchandising is a
specific project for the obvious reason that it is
an activity related to the day-to-day operations
of California. The records show that the
petitioners had been given an initial six month
contract, renewed for another six months.
Accordingly, under Article 281 of the Code, they
had become regular employees — of California
— and had acquired a secure tenure. Hence,
they cannot be separated without due process of
law. [Tabas vs. California Marketing Co., Inc.,
1989]
f. Fixed term employment
Article 280 of the Labor Code does not proscribe
or prohibit an employment contract with a fixed
period provided the same is entered into by the
parties, without any force, duress or improper
pressure being brought to bear upon the
employee and absent any other circumstance
vitiating consent.
(1) It does not necessarily follow that where the
duties of the employee consist of activities
usually necessary or desirable in the usual
business of the employer, the parties are
forbidden from agreeing on a period of time for
the performance of such activities. There is thus
nothing essentially contradictory between a
definite period of employment and the nature of
the employee's duties.
(2) It goes without saying that contracts or
employment govern the relationship of the
parties. In this case, private respondent's
contract provided for a fixed term of nine (9)
months, from June 1, 1991 to March 31, 1992.
Such stipulation, not being contrary to law,
morals, good customs, public order and public
policy, is valid, binding and must be respected.
[St. Theresa’s School vs. NLRC 1998]
However, the Court upholds the principle that
where from the circumstances it is apparent that
periods have been imposed to preclude
acquisition of tenurial security by the employee,
they should be disregarded for being contrary to
public policy. [Servidad vs. NLRC, 1999]
Requisites for validity
This arrangement does NOT circumvent Security
of Tenure when:
(1) 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. Brent Doctrine [Brent School v. Zamora,
1990; Romares v. NLRC, 1998; Medenilla v. Phil.
Veterans Bank, 2000]
(3) If a contract is for a fixed term and the
Employee is dismissed without just cause, he is
entitled to the payment of his salaries
corresponding to the unexpired portion of the
employment contract. [Medenilla v. Phil.
Veterans Bank, 2000]
3. JOB CONTRACTING
a. Article 106 to 109 of the Labor Code
Article 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.
Article 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.
Article 108. Posting of bond. An employer or
indirect employer may require the contractor or
subcontractor to furnish a bond equal to the cost
of labor under contract, on condition that the
bond will answer for the wages due the
employees should the contractor or
subcontractor, as the case may be, fail to pay the
same.
Article 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.
Examples
Aboitiz Haulers vs. Dimapatoi (2006): The
allegation of petitioner that Grigio is an
independent job contractor is without basis. The
respondents, as checkers, were employed to
check and inspect cargo, a task which is clearly
necessary for the petitioner’s business of
forwarding and distributing cargo. Grigio did not
undertake the performance of its service
contract according to its own manner and
method, free from the control and supervision of
its principal.
The work activities, shifts, and schedules of the
respondents, including time allowed for "recess"
were set under the Written Contract of Services.
This clearly indicates that these matters, which
consist of the means and methods by which the
work is to be accomplished, were not within the
absolute control of Grigio.
Petitioner’s allegation that Grigio retained
control by providing supervisors to monitor the
performance of the respondents cannot be given
much weight. Instead of exercising their own
discretion or referring the matter to the officers
of Grigio, its supervisors were obligated to refer
to petitioner’s supervisors any discrepancy in the
performance of the respondents.
Lastly, the law casts the burden on the
contractor to prove that it has substantial
capital, investment, tools etc. In this case,
neither Grigio nor the petitioner was able to
present any proof that Grigio had substantial
capital.
Lakas vs. Burlingame (2007): No proof was
adduced to show F. Garil’s capitalization. The
work of the promo-girls was marketing and
selling, and thus directly related to the principal
business or operation of Burlingame.
Finally, F. Garil did not undertake the
performance of its service contract according to
its own manner and method, free from the
control and supervision of Burlingame. Based on
the contract, F. Garil was responsible in the
hiring process only with respect to the screening,
testing and preselection of the personnel it
provided to Burlingame. Actual hiring itself was
done through the deployment of personnel to
establishments by Burlingame.
The contract also stipulated that Burlingame
shall pay F. Garil a certain sum per worker. F.
Garil merely served as conduit in the payment of
wages to the personnel. The interpretation
would have been different if the payment was
for the job, project, or services rendered during Contracting or subcontracting – an arrangement
the month and not on a per worker basis. whereby a principal agrees to put out or farm out
with a contractor the performance or
The Court has taken judicial notice of the
completion of a specific job, work or service
practice of employers who do not issue payslips
within a definite or predetermined period,
directly to employees. Under current practice, a
regardless of whether such job, work or service
third person, usually the purported contractor
is to be performed or completed within or
[service or manpower placement agency],
outside the premises of the principal.
assumes the act of paying the wage.
Contractor – any person or entity, including a
The contract also provides that “any personnel
cooperative, engaged in a legitimate contracting
found to be inefficient, troublesome,
or subcontracting arrangement providing either
uncooperative and not observing the rules and
services, skilled worker, temporary workers or a
regulations set forth by Burlingame shall be
combination of services to a principal under a
reported to F. Garil and may be replaced upon
Service Agreement.
request.” Corollary to this circumstance would
be the exercise of control and supervision by Contractor’s employee – includes one employed
Burlingame over workers supplied by F. Garil in by a contractor to perform or complete a job,
order to establish the nature of undesirable work, or service pursuant to a Service
personnel. Agreement with a principal. It shall also refer to
regular EEs of the contractor whose functions
b. Department Order No. 18-A, Series of 2011:
are not dependent on the performance or
Rules Implementing Articles 106 to 109 of the
completion of a specific job, work or service
LC, as amended (14 November 2011) Coverage
within a definite period of time i.e.
This shall apply to:
administrative staff.
(1) all parties of contracting and subcontracting
In-house agency – a contractor which is owned,,
arrangements where ER-EE relationships exist
managed, or controlled directly or indirectly by
(2) cooperatives engaging in contracting or
the principal or one where the principal
subcontracting arrangements Contractors and
owns/represents any share of stock, and which
subcontractors referred to in these rules are
operates solely or mainly for the principal.
prohibited from engaging in recruitment and
placement activities as defined in Art. 13(b) of Net Financial Contracting Capacity (NFCC) –
the LC whether for local or overseas refers to the formula to determine the financial
employment. capacity of the contractor to carry out the job,
work or services sought to be undertaken under
DEFINITION OF TERMS
a Service Agreement.
Cabo – a persons or group of persons or a labor
Formula: NFCC = (current assets - current
groups which, in the guise of a labor
liabilities) x (K – value of all outstanding or
organization, cooperative or any entity, supplies
ongoing projects including contracts to be
workers to an employer, with or without any
started)
monetary or other consideration, whether in the
capacity of an agent of the employer or as an K stands for contract duration equivalent to:
ostensible independent contractor.
(a) 10 for one year or less

(b) 15 for more than 1 year up to 2 years

(c) 20 for more than 2 years
Principal – any ER, whether a person or entity,
including government agencies and GOCCs,
who/which puts out or farms out a job, service
or work to a contractor.
Right to control – the right reserved to the
person for whom the services of the contractual
workers are performed, to determine not only
the end to be achieved, but also the manner and
means to be used in reaching that end.
Substantial capital – refers to paid-up capital
stocks/shares of at least P3,000,000 in the case
of corporations, partnerships and cooperatives;
in case of single proprietorship, a net worth of at
least P3,000,000. [Sec 3, D.O. 18-A-11]
Service agreement – refers to the contract
between the principal and contractor containing
the terms and conditions governing the
performance or completion of a specific job,
work or service being farmed out for a definite
or predetermined period.
Legitimate contracting or subcontracting
Contracting or subcontracting shall be legitimate
if all the following circumstances occur:
(a) The contractor must be registered in
accordance with these rules and carries a distinct
and independent business and undertakes to
perform the job, work or service on its own
responsibility, according to its own manner and
method, and free from control and direction of
the principal in all matters connected with the
performance of the work except as to the results
thereof;
(b) The contractor has substantial capital and/or
investment; and,
(c) The Service Agreement ensures compliance
with all the rights and benefits under Labor laws.
Job contracting is permissible only if the
following conditions are met:
(1) the contractor carries on an independent
business and undertakes the contract work on
his own account under his own responsibility
according to his own manner and method, free
from the control and direction of his employer or
principal in all matters connected with the
performance of the work except as to the results
thereof; and
(2) the contractor has substantial capital or
investment in the form of tools, equipment,
machineries, work premises, and other materials
which are necessary in the conduct of the
business. [Lakas vs. Burlingame Corp., 2007]
In the case of Aliviado v. Protecter & Gamble
Philippines, Inc., (G.R. No. 160506, 9 March
2010), the SC conceded that the law and its
implementing rules allow contracting
arrangements for the performance of specific
jobs, works, or services. Indeed, it is
management prerogative to farm out any of its
activities, regardless of whether such activity is
peripheral or core in nature. However, in order
for such outsourcing to be valid, it must be made
to an independent contractor because the
current labor rules expressly prohibit labor-only
contracting.
Factors to determine existence of independent
contractor relationship
(1) Whether the contractor is carrying on an
independent business
(2) Whether the work is part of the employer’s
general business.
(3) The nature and extend of the work.
(4) The skill required.
(5) The terms and duration of the relationship.
(6) The right to assign the performance of the
work to another.
(7) The control and supervision of the work and
the employer’s powers with respect to the
hiring, firing and payment of salaries.
(8) The duty to supply premises, tools, and
appliances.
Prohibition against labor-only contracting
Labor only contracting is prohibited. There is
labor-only contracting where:
(a) The contractor does not have substantial
capital or investments in the form of tools,
equipment, machineries, work premises, among
others, and the employees recruited and places
are performing activities which are usually
necessary or desirable to the operation of the
company, or directly related to the main
business of the principal within a definite or
predetermined period, regardless of whether
such job, work or service is to be performed or
completed within or outside the premises of the
principal; or
(b) The contractor does not exercise the right to
control the performance of the work of the
employee.
Other prohibitions
(A) Contracting out of jobs, works or services
when not done in good faith and not justified by
the exigencies of the business such as the
following:
(1) Contracting out of jobs, works or services
when the same results in the termination or
reduction of regular EEs and reduction of work
hours or reduction or splitting of the bargaining
unit.
(2) Contracting out of work with a Cabo
(3) Taking undue advantage of the economic
situation or lack of bargaining strength of the
contractor’s EEs, or undermining their security of
tenure or basic rights, or circumventing the
provisions of regular employment in any of the
following instances:
(a) Requiring them to perform functions which
are currently being performed by the regular EEs
of the principal; and,
(b) Requiring them to sign, as a precondition to
employment or continued employment, an
antedated resignation letter; a blank payroll; a
waiver of labor standards including minimum
wages and social or welfare benefits; or a
quitclaim releasing the principal, contractor or
from any liability as to payment of future claims.
(4) Contracting out of a job, work or service
through an in-house agency.
(5) Contracting out of a job, work or service that
is necessary or desirable or directly related to the
business or operation of the principal by reason
of a strike or lockout whether actual or
imminent.
(6) Contracting out of a job, work or service being
performed by union members when such will
interfere with, restrain or coerce EEs in the
exercise of their rights to self-organization as
provided in Art. 248(c) of the LC, as amended.
(7) Repeated hiring of EEs under an employment
contract of short duration or under a Service
Agreement of short duration with the same or
different contractors, which circumvents the LC
provisions on Security of Tenure.
(8) Requiring EEs under a subcontracting
arrangement to sign a contract fixing the period
of employment to a term shorter than the term
of the Service Agreement, unless the contract is
divisible into phases for which substantially
different skills are required and this is made
known to the EE at the time of the engagements.
(9) Refusal to provide a copy of the Service
Agreement and the employment contracts
between the contractor and the EEs deployed to
work in the bargaining unit of the principal’s
certified bargaining agent to the sole and
exclusive bargaining agents.
(10)Engaging or maintaining by the principal of
subcontracted EEs in excess of those provided in
the applicable CBA or as set by the Industry
Tripartite Council.
(B) Contracting out of jobs, works, or services
analogous to the above when not done in good
faith and not justified by the exigencies of the
business.
Mafinco vs. Ople (1976): When an independent
contractor and not an employee: We recognize
that contracting out is not unlimited; rather, it is
a prerogative that management enjoys subject
to well-defined legal limitations. As we have
previously held, the company can determine in
its best business judgment whether it should
contract out the performance of some of its
work for as long as the employer is motivated by
good faith, and
(1) the contracting out must not have been
resorted to to circumvent the law or
(2) must not have been the result of malicious or
arbitrary action. [Manila Electric Co. v.
Quisumbing, 1999]
We perceive at the outset the disposition of the
NLRC that janitorial services are necessary and
desirable to the trade or business of petitioner
Coca-Cola. But this is inconsistent with our
pronouncement in Kimberly Independent Labor
Union v. Drilon where the Court took judicial
notice of the practice adopted in several
government and private institutions and
industries of hiring janitorial services on an
“independent contractor basis.” In this respect,
although janitorial services may be considered
directly related to the principal business of an
employer, as with every business, we deem
them unnecessary in the conduct of the
employer’s principal business. [Coca-Cola
Bottlers Phil. Inc. vs. NLRC, 1999]
Rights of contractor’s EEs
All contractor’s EEs, whether deployed or
assigned ass reliever, seasonal, week-ender,
temporary, or promo jobbers, shall be entitled to
all the rights and privileges as provided for in the
LC, as amended.
Security of tenure of contractor’s EEs
It is understood that all contractor’s EEs enjoy
security of tenure regardless of whether the
contract of employment is co-terminus with the
service agreement, or for a specific job, work, or
service, or phase thereof.
Effect of termination of employment
The termination of the contractor EE prior to the
expiration of the Service Agreement shall be
governed by Arts. 282- 284 of the LC. In case the
termination is caused by the pre-termination of
the Service Agreement not due to authorized
causes under Art. 283, the right of the contractor
EE to unpaid wages and other unpaid benefits
including unremitted legal mandatory
contributions, 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
result from the expiration of the Service
Agreement, or from the completion of the phase
of the job, work or service for which the EE is
engaged, the latter may opt for payment of
separation benefits as may be provided by law or
the Service Agreement, without prejudice to
his/her entitlement to the completion bonuses
or other emoluments, including retirement
benefits whenever applicable.
Mandatory registration
It shall be mandatory for all persons or entities,
including cooperative, acting as contractors, to
register with the Regional Office of the DOLE
where it principally operates. Failure to register
shall give rise to the presumption that the
contractor is engaged in labor-only contracting.
Contracting or subcontracting arrangements in
the Construction and other industries
Contracting or subcontracting arrangements in
the Construction Industry, under the licensing
coverage of the Philippine Construction
Accreditation Board (PCAB), shall be covered by
the applicable provisions of these Rules and shall
continue to be governed by Dept Order No. 19,
Series of 1993 [Guidelines Governing the
Employment of Workers in the Construction
Industry] Dept. Order No 13, Series of 1998
[Guidelines Governing the Occupational Safety
and Health in the Construction Industry]; 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 the
construction industry.
c. Department Circular No. 01, Series of 2012:
Clarifying the Applicability of DO No. 18-A, 2011
to Business Processing Outsourcing
(BPO)/Knowledge Process Outsourcing (KPO)
and the Construction Industry Applicability to
BPO
DO 18-A speaks of a trilateral relationship that
characterizes the covered contracting/sub-
contracting arrangement. Thus, vendor-vendee
relationship for entire business processes
covered by the applicable provisions of the Civil
Code on Contracts is excluded.
DO 18-A contemplates generic or focused
singular activity in one contract between the
principal and the contractor (for example,
janitorial, security, merchandising, specific
production work) and does not contemplate
information technology-enabled services
involving an entire process (for example, BPO,
KPO, legal process outsourcing, hardware and/or
software support, medical transcription,
animation services, back office
operations/support). These companies engaged
in BPOs may hire employees in accordance with
applicable laws, and maintain these EEs based on
business requirements, which may or may not be
for different clients of the BPOs at different
periods of the EE’s employment.
Applicability to the Construction Industry
Licensing and the exercise of regulatory powers
over the construction industry is lodged with
PCAB which is under the Construction Industry
Authority of the Philippines and not with the
DOLE or any of its regional offices.
Thus, the DOLE, through its regional offices shall
not require contractors licensed by PCAB in the
Construction Industry to register under DO 18-A.
Moreover, findings of violation/s on labor
standards and occupational health and safety
standards shall be coordinated with PCAB for its
appropriate action, including the possible
cancellation/suspension of the contractor’s
license.
d. Effects of finding that there is labor-only
contracting
A finding by a competent authority of labor-only
contracting shall render the principal jointly and
severally liable with the contractor to the latter’s
EEs, in the same manner and extent that the
principal is liable to EEs directly hired by him/her.
A finding of commission of any of the prohibited
activities in Sec. 7 or violation of either Secs. 8 or
9 hereof, shall render the principal the direct ER
of the EEs of the contractor or subcontractor.
[Sec. 27, DO 18-A, 2011]
If found to be labor-only contractor, it is
equivalent to finding that there exists an
employer-employee relationship between the
owner of the project and the employees of the
‘labor-only’ contractor since that relationship is
defined and prescribed by the law itself.
[Industrial Timber Corporation vs. NLRC, 1997]
In legitimate job contracting, no employer-
employee relation exists between the principal
and the job contractor's employees. The
principal is responsible to the job contractor's
employees only for the proper payment of
wages. But in labor-only contracting, an
employeremployee relation is created by law
between the principal and the labor-only
contractor's employees, such that the former is
responsible to such employees, as if he or she
had directly employed them. [PAL vs. NLRC,
1998]
The only time the indirect employer may be
made solidarily liable with the contractor is
when the contractor fails to pay his employees
their wages and other benefits claimed.
[Landazares vs. Amethyst Security, 2003]
Eparwa Security, Inc. vs Liceo de Cagayan
University (2006): Citing Eagle Security Agency
vs. NLRC--In the case at bar, it is beyond dispute
that the security guards are the employees of
EAGLE (contractor). That they were assigned to
guard the premises of PTSI (principal) pursuant
to the latter’s contract with EAGLE and that
neither of these two entities paid their wage and
allowance increases under the subject wage
orders are also admitted. Thus, the application
of the aforecited provisions of the Labor Code on
joint and several liability of the principal and
contractor is appropriate.
The solidary liability of PTSI and EAGLE, however,
does not preclude the right of reimbursement
from his co-debtor by the one who paid [See
Article 1217, Civil Code]. It is with respect to this
right of reimbursement that petitioners can find
support in the aforecited contractual stipulation.
e. Trilateral Relationship in contracting
arrangements
There are three parties involved:
(1) Principal – who decides to farm out a job,
work or service to a contractor;
(2) Contractor – who has the capacity to
independently undertake the performance of
the job, work, or service; and
(3) Contractual workers – engaged by the
contractor to accomplish the job, work or
service. [Sec. 3 D.O. 18-A-11]
In legitimate contracting there exists:
(1) An ER-EE relationship between the
contractor and the employees it engaged to
perform the specific job, work or service being
contracted
(2) A contractual relationship between the
principal and the contractor as governed by the
provisions of the CC.
Note: In the event of any violation of any
provisions of the LC (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 LC and other
social legislation, to the extent of the worked
performed under the employment contract.
[Sec. 5, D.O. 18-A-11
B. DISMISSAL FROM EMPLOYMENT
Art. 279: in case of regular employment, the
employer shall not terminate the services of an
employee except for (a) just cause [Art. 282] (b)
authorized cause [Art. 283-284]
SECURITY OF TENURE
Definition
Right not be removed from one’s job without
valid cause and valid procedure. [Kiamco v.
NLRC, 1999]
Nature It is a constitutionally protected right
[Art. XIII Sec. 3, 1987 Constitution]; it cannot be
blotted out by an employment contract.
 It does not give the Employee an absolute right
to his position; when a transfer is not
unreasonable, nor inconvenient, nor prejudicial
to an employee; and it does not involve a
demotion in rank or diminution of his pay,
benefits, and other privileges, the employee may
not complain that it amounts to constructive
dismissal. [Lanzadares vs. Amethyst Security,
2003]
Coverage
(1) 1987 Constitution: all workers [Art. XIII Sec. 3]
(2) Labor Code: regular employees [Art. 279] in
all establishments or undertakings, whether for
profit or not [Art. 278], except government and
its political subdivisions including government
owned or controlled corporations or GOCCs
(3) Security of tenure extends to non regular
Employees
(4) Contract Employees – limited extent; secured
during the period their respective contracts of
employment remain in effect.
(5) Probationary Employees – limited extent;
additional limitations on power of Employer to
terminate:
(a) must be exercised in accordance with the
specific requirements of the contract;
(b) dissatisfaction of the Employer must be real
and in good faith, not feigned so as to circumvent
the contract or the law;
(6) Project/seasonal Employees – limited extent;
secured for the duration of the limited period of
their employment
(7) Managerial Employees – may be dismissed
upon loss of confidence; entitled to security of
tenure
(8) An employee cannot be arbitrarily dismissed
at any time, and without cause as reasonably
established in an appropriate investigation.
(9) Fixed-period Employees / Term Employment:
this arrangement does NOT circumvent Security
of Tenure when:
(a) knowingly and voluntarily agreed upon by the
parties without any force, duress, or improper
pressure or any other circumstances vitiating his
consent; OR
(b) Brent Doctrine: 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.
(c) If a contract is for a fixed term and the
Employee is dismissed without just cause, he is
entitled to the payment of his salaries
corresponding to the unexpired portion of the
employment contract.
CONFLICT WITH MANAGEMENT PREROGATIVES
(1) Discipline
(2) Right to dismiss or otherwise impose
disciplinary sanctions upon an employee for just
and valid cause, pertains in the first place to the
employer, as well as the authority to determine
the existence of said cause in accordance with
the norms of due process.
(3) To Demote
(4) To Dismiss – it is a measure of self protection
Requisites for the validity of management
prerogative affecting security of tenure
(1) Exercised in good faith for the advancement
of the Employer's interest, and
(2) NOT for the purpose of defeating or
circumventing the rights of the Employees under
special laws or under valid agreements
a. JUST CAUSES
No written notice to employer required
Serious misconduct or willful disobedience
Misconduct
(a) improper or wrongful conduct
(b) transgression of 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. [Dept of Labor Manual, Sec. 4343.01;
Hayuan Restaurant vs. NLRC, 2006]
Requisites
(1) Serious – to be serious, misconduct must be:
(a) of such grave and aggravated character
(b) in connection with the employee's work.
(2) Shows that the Employee has become unfit
to continue working for the Employer.
Willful disobedience:
Requisites:
(1) The employee’s assailed conduct has been
willful or intentional, the willfulness being
characterized by a “wrongful and perverse
attitude”; and
(2) The order violated must have been:
(a) Reasonable and lawful;
(b) Made known to the employee; and
(c) In connection to the duties which he has been
engaged to discharge.
Gross and habitual neglect of duties
Gross negligence is want of even slight care,
acting or omitting to act in a situation where
there is a duty to act, not inadvertently but
willfully and intentionally with a conscious
indifference to consequences insofar as other
persons may be affected.
Habitual neglect implies repeated failure to
perform one's duties for a period of time,
depending upon the circumstances.
Requisites
(1) Neglect of duty must be both gross and
(2) Habitual
Fraud or willful breach of trust [loss of trust and
confidence]
Requisites (AWWT)
(1) Committed against the Employer or his
representative;
(2) willful since fraud implies wrongful intent;
(3) EE concerned holds a position of trust and
confidence; and [Mabeza vs. NLRC, 1997]
(4) Act complained of must be work-related i.e.
it must show the employee concerned to be unfit
to continue working for the employer.
Proof beyond reasonable doubt not necessary
Uniwide Sales Warehouse Club v. NLRC (2008)
(1) It is sufficient that there is some basis for
such loss of confidence such as when the
employer has reasonable ground to believe that
the employee concerned is responsible for the
purported misconduct;
(2) And the nature of his participation therein
renders him unworthy of the trust and
confidence demanded of his position
Abandonment of employment; elements that
must concur
Abandonment is the deliberate and unjustified
refusal of an Employee to resume his
employment. [Nueva Ecija Electric Cooperative
v. NLRC, 2005]
Requisites:
(1) Failure to report to work or absence w/o valid
reason;
(2) Clear intent to sever the employer-employee
relationship via overt acts [Floren Hotel v. NLRC,
2005]
(a) Cannot be lightly inferred, much less legally
presumed from certain equivocal acts such as
interim employment [Hacienda Dapdap v. NLRC,
1998]
Termination of employment pursuant to a
union security clause
Art. 283 and 284 are not exhaustive; other
authorized causes are:
(a) total and permanent disability,
(b) disease incurable in 6 mos,
(c) valid application of union security clause,
(d) expiry of term employment period,
(e) completion of project,
(f) failure in probation, etc
Totality of infractions doctrine
The totality of infractions or the number of
violations committed during the period of
employment shall be considered in determining
the penalty to be imposed upon an erring
employee. The offenses committed by petitioner
should not be taken singly and separately.
Fitness for continued employment cannot be
compartmentalized into tight little cubicles of
aspects of character, conduct and ability
separate and independent of each other. While
it may be true that petitioner was penalized for
his previous infractions, this does not and should
not mean that his employment record would be
wiped clean of his infractions. After all, the
record of an employee is a relevant
consideration in determining the penalty that
should be meted out since an employee's past
misconduct and present behavior must be taken
together in determining the proper imposable
penalty. [Merin v. NLRC, 2008]
2. AUTHORIZED CAUSES
Recognized right
The law recognizes the right of every business
entity to reduce its workforce if the same is
made necessary by compelling economic factors
which would endanger its existence or stability.
The fundamental law itself guarantees, even
during the process of tilting the scales of social
justice towards workers and employees, “the
right of enterprises to reasonable returns of
investment and to expansion and growth.”
[Uichico v. NLRC, 1997]
Art. 283 and 284 are not exhaustive; other
authorized causes are:
(a) total and permanent disability,
(b) disease incurable in 6 mos,
(c) valid application of union security clause,
(d) expiry of term employment period,
(e) completion of project,
(f) failure in probation, etc
Redundancy, retrenchment and closure
Redundancy Dusit School Nikko v. NUWHRAIN
(2005):
(1) [redundancy] exists where the service
capability of the workforce is in excess of what is
reasonably needed to meet the demands of the
business enterprise;
(2) a reasonably redundant position is one
rendered superfluous by any number of factors,
such as overhiring of workers, decreased volume
of business, dropping of a particular product line
previously manufactured by the company, or
phasing out of service activity previously
undertaken by the business
Redundancy does not refer to duplication of
work. That no other person was holding the
same position which the dismissed employee
held prior to the termination of his services does
not show that his position had not become Temporary retrenchment or temporary
redundant. [Escareal v. NLRC, 1992] cessation or suspension of operations [Art. 286]

Financial loss is not a requisite. [Escareal v. NLRC, A specific period that employees may remain
1992] temporarily laid-off or in floating status. The
temporary lay-off or bona fide suspension of
Creation of positions with functions related or
operations of a business or undertaking wherein
similar to those of the abolished functions does
the employees likewise cease to work should not
not necessarily invalidate the declaration of
last longer than 6 months. After 6 months, the
redundancy—the old and new positions were
employees should either be recalled to work or
different and the declaration was not maliciously
permanently entrenched following the
motivated. [Santos v. CA, 2001] Employer’s good
requirements of the law, and that failing to
faith in implementing a redundancy program is
comply with this would be tantamount to
not necessarily put in doubt by the availment of
dismissing the employees and the employer
services of an independent contractor. [Asian
would thus be liable for such dismissal.
Alcohol Corp. v. NLRC, 1999]
[International Hardware v. NLRC, 1989]
Separation pay entitlement. — Employee is
Separation pay entitlement. — Employee is
entitled to separation pay of 1 month pay or 1
entitled to separation pay of 1 month pay or 1/2
month pay per year of service, whichever is
month pay per year of service, whichever is
higher
higher
Retrenchment
Closure
Retrenchment is the termination of employment
Employer may close or cease his business
effected by management during periods of
operations or undertaking even if he is not
business recession, industrial depressions,
suffering from serious business losses or
seasonal fluctuations, lack of work or
financial reverses, as long as he pays his
considerable reduction in the volume of the
employees their termination pay in the amount
employer’s business. [AMA Computer College v.
corresponding to their length of service.
Ely Garcia, 2008]
[Catatista v. NLRC, 1995] It includes both the
General standards for when retrenchment is complete cessation of all business operations
preventive rather than curative (SINS). — (a) and the cessation of only part of a company’s
Losses expected are (s)ubstantial and not merely business [Coca-Cola Bottlers, Inc. v. NLRC, 1991
de minimis in extent; (b) Apprehended losses are
Requirements. — Must de bona fide or in good
reasonably (i)mminent, can be perceived
faith
objectively and in good faith; (c) Retrenchment
must be reasonably (n)ecessary to prevent the Procedural steps required
expected losses—measure of last resort; and (d)
At least 1 month before the intended date of
Expected or actual losses must be proved by
termination, Employer is to serve written notice
(s)ufficient and convincing evidence. [Lopez
to:
Sugar Corp. v. Federation of Free Workers, 1990]
(1) Affected employees; and
Reduction of work days may be considered
constructive retrenchment [International (2) DOLE [Art. 283]
Hardware v. NLRC, 1989]
Requirements for valid
retrenchment/redundancy.—
Requisites: Redundancy
(1) Written notice served on both the Employees
and the DOLE at least 1 month prior to the
intended date;
(2) Payment of separation pay equivalent to one
month pay or one month pay for every year of
service, whichever is higher;
(3) Good faith in abolishing the redundant
positions; and
(4) Fair and reasonable criteria in ascertaining
what positions are to be declared redundant and
accordingly abolished. The following are usually
considered in redundancy: position itself, nature
of the services performed by the employee, and
necessity of such position. [Edge Apparel v.
NLRC, 1998]
Requisites: Retrenchment
(a) Necessary to prevent or minimize losses and
such losses are proven;
(b) There must be 1 month written notice to the
DOLE and the employee;
(c) Separation pay is paid;
(d) Exercised in good faith – the prerogative was
exercised for the advancement of the
employer’s interest and not to defeat or
circumvent the employee’s right to security of
tenure; and
(e) Fair and reasonable criteria in ascertaining
who will be affected Criteria in selecting
employees for dismissal. — Fair and reasonable
criteria in ascertaining who will be affected:
(1) preferred status [e.g. temporary, casual or
regular Employees],
(2) efficiency
(3) physical fitness,
(4) age,
(5) financial hardship, or
(6) seniority. [Asian Alcohol Corp. v. NLRC, 1999]
Disease or illness
Separation pay entitlement
Employee is entitled to separation pay of 1
month pay or ½ month pay per year of service,
whichever is higher
Requisites
(1) Employee has been found to be suffering
from any disease;
(2) His continued employment is prohibited by
law or is prejudicial to his health as well as to the
health of his co-employees;
(3) Payment of separation pay;
(4) A medical certification by a competent public
health authority that the disease cannot be
cured w/in 6 months even with proper medical
treatment [IRR Book VI. Rule I. Sec. 8]
(a) Medical certification cannot be dispensed
with [Manlyl Express, Inc. v. Payong, 2005]
(b) It must be issued by a competent public
health authority and not the company physician
[Cebu Royal Plant v. Deputy Minister of Labor,
1987]
3. DUE PROCESS
Substantive Due Process
Dismissal for any of the just or authorized causes
under Arts. 282 – 284
Right to counsel
A very basic requirement of substantive due
process; it has to be observed. Indeed, the rights
to counsel and to due process of law are two of
the fundamental rights guaranteed by the 1987
Constitution to any person under investigation,
be the proceeding administrative, civil, or
criminal. [Salaw v. NLRC, 1991]
Procedural Due Process
Employee must be given notice with adequate
opportunity to be heard before he/she is notified
of his/her actual dismissal for Cause. [Fujitsu v.
CA, 2005] ER may NOT substitute the required
prior notice & opportunity to be heard with the
mere payment of 30 days' salary. [PNB v.
Cabanag, 2005]
a. Twin-notice requirement
First notice – notice specifying the grounds for
which dismissal is sought
Second notice – notice of the decision to dismiss
b. Hearing; meaning of opportunity to be heard
A formal or trial type hearing is not at all times
and in all instances essential to due process; it is
enough to that the parties are afforded fair and
reasonable opportunity to explain their side of
the controversy. [Mendoza vs. NLRC, 1991]
Summary proceeding may be conducted; written
explanations, affidavits, position papers or other
pleadings may be used as well; what is essential
is the ample opportunity to be heard.
[Homeowners Savings and Loan Assoc. Inc. vs.
NLRC, 1996]
No formal hearing necessary when the Employee
already admitted his responsibility for the act he
was accused of. [Magos v. NLRC, 1998]
In the leading case of Perez v. Philippine
Telegraph and Telephone Co., G.R. No. 152048,
April 7, 2009, the Supreme Court, in an en banc
decision, held that relative to the hearing
requirement in termination cases, a formal
hearing or conference becomes mandatory only
in the following instances: (1) when requested by
the employee in writing; (2) when substantial
evidentiary disputes exist; or (3) when a
company rule or practice requires it.
Coming now to the period of time within which
the employee should submit his reply to the
show-cause memo, King of Kings Transport v.
Mamac, 526 SCRA 116 (2007), tells us that an
employee under investigation for a violation of
company rules is entitled to a “reasonable time”
so that he can “prepare adequately for his
defense.” Under King of Kings, “reasonable
opportunity” has been construed to mean “at
least five (5) calendar days from receipt of the
notice to give the (employee) an opportunity to
study the accusation against him, consult a union
official or lawyer, gather data and evidence, and
decide on the defenses he will raise against the
complainant.”
What the law requires, as held in De Leon v.
NLRC, cited by petitioners, is for the employer to
inform the employee of the specific charges
against him and to hear his side or defenses. This
does not however mean a full adversarial
proceeding. Litigants may be heard thru: (1)
pleadings, written explanations, position papers,
memorandum; (2) oral argument. In both
instances, the employer plays an active role —
he must provide the employee the opportunity
to present his side and answer the charges, in
substantial compliance with due process. Actual
adversarial proceeding becomes necessary only
for clarification or when there is a need to
propound searching questions to unclear
witnesses. This is a procedural right which the
employee must, however, ask for it is not an
inherent right, and summary proceedings may
be conducted. This is to correct the common but
mistaken perception that procedural due
process entails lengthy oral arguments. Hearing
in administrative proceedings and before quasi-
judicial agencies are neither oratorical contests
nor debating skirmishes where cross
examination skills are displayed. Non-verbal
devices such as written explanations, affidavits,
position papers or other pleadings can establish
just as clearly and concisely aggrieved parties'
predicament or defense. What is essential is
ample opportunity to be heard, meaning, every
kind of assistance that management must accord
the employee to prepare adequately for his
defense. [as cited in Manggagawa ng
Komunikasyon sa Pilipinas v. NLRC, 1992]
Article 277(b) of the Labor Code provides that, in
cases of termination for a just cause, an
employee must be given "ample opportunity to
be heard and to defend himself." Thus, the
opportunity to be heard afforded by law to the
employee is qualified by the word "ample" which
ordinarily means "considerably more than
adequate or sufficient."21 In this regard, the
phrase "ample opportunity to be heard" can be
reasonably interpreted as extensive enough to
cover actual hearing or conference. [Perez v.
Philippine Telegraph and telephone Company,
2009]
Burden of Proof. — Upon the employer.
Employer must comply with due process
requirements before any termination is done.
[Gothong Lines, Inc. v. NLRC, 1999] (a)
Unsubstantiated suspicions and baseless
conclusions by employers are not legal
justification for dismissing employees.
[Maranaw Hotel and Resort Corp. v. NLRC, 1999]
Degree of Proof. — Substantial evidence; proof
beyond reasonable doubt not required. [Manila
Electric Co., Inc. v. NLRC, 1991]
C. RELIEFS FOR ILLEGAL DISMISSAL
A finding of illegal dismissal entitles the
Employee to:
(1) reinstatement without loss of seniority rights
and privileges, and
(2) full backwages inclusive of allowances and to
benefits or their monetary equivalent from the
time withheld up to actual reinstatement [Art.
279]
1. REINSTATEMENT
It is the restoration of an employee who was
unjustly dismissed to the position from which he
was removed, that is, to his status quo ante
dismissal [Santos vs. NLRC, 1987]
Note: An offer by Employer to re-employ the
Employee did not cure the vice of earlier
arbitrary dismissal. [Ranara v. NLRC, 1992]
An order for reinstatement must be specifically
declared and cannot be presumed; like back
wages, it is a separate and distinct relief given to
an illegally dismissed employee. [Gold City
Integrated Port Service, Inc. v. NLRC, 1995]
Alternative
In lieu of reinstatement, Employee is entitled to
separation pay of 1 month pay per year of
service. [Gaco vs. NLRC, 1994] General Rule:
reinstatement is a matter of right to an illegally
dismissed Employee.
Exceptions:
(a) Closure of business [Retuya vs. Dumarpa,
2003]
(b) Economic business conditions: The
reinstatement remedy must always be adapted
to economic-business conditions. [Union of
Supervisors, etc. v. Sec. of Labor, 1984]
(c) EE’s unsuitability [Divine World High School
vs. NLRC, 1986]
(d) EE’s Retirement/Coverage [Espejo vs. NLRC,
1996]
Prescription Period
An action for reinstatement by reason of illegal
dismissal is one based on an injury which may be
brought within 4 years from the time of
dismissal. [Art. 1146 of the Civil Code]
a. Reinstatement pending appeal
Art. 223 is clear that an award for reinstatement
shall be immediately executory even pending
appeal and the posting of a bond by the
employer shall not stay the execution for
reinstatement. Reinstatement ordered by Labor
Arbiter is self-executory; reinstatement ordered
by NLRC is not and, though immediately
executory, still requires writ of execution.
[Panuncillo vs. CAP Phil. Inc., 2007]
b. Separation pay in lieu of Reinstatement
Strained Relation rule
If reinstatement is not feasible, expedient, or
practical, as where there is strained relations
between the parties, particularly where the
illegally dismissed employee held a managerial
or key position
[Quijano v. Mercury Drug Corp. 1998] Quijano v.
Mercury Drug Corp. (1998)
(a) Where reinstatement is not feasible,
expedient or practical,
(b) As where reinstatement would only
exacerbate the tension and strained relations
between the parties
(c) Or where the relationship between the
employer and employee has been unduly
strained by reason of their irreconcilable
differences, particularly where the illegally
dismissed employee held a managerial or key
position in the company
(d) It would be more prudent to order payment
of separation pay instead of reinstatement
Kinds
(1) SP as a statutory requirement for authorized
causes
(2) SP as financial assistance found in the next
section
(3) SP in lieu of reinstatement where
reinstatement is not feasible; and
(4) SP as a benefit in the CBA or company policy
Computation
SP as a statutory requirement is computed by
integrating the basic salary with regular
allowances employee has been receiving
[Planters Products Inc. v. NLRC, 1989];
allowances include transportation and
emergency living allowances [Santos v. NLRC,
1987]
Commissions may not be included since they
must be earned by actual market transactions by
employee [Soriano v. NLRC, 1989]
A dismissed employee who has accepted
separation pay is not necessarily estopped from
challenging the validity of his or her dismissal.
Neither does it relieve the employer of legal
obligations. [Anino v. NLRC, 1998]
2. BACKWAGES
Definition
(1) According to St. Theresa’s School of
Novaliches Foundation v. NLRC (1998): earnings
lost by a worker due to his illegal dismissal; a
form of relief that restores the income lost by
reason of such unlawful dismissal;
(2) it is not private compensation or damages;
nor is it a redress of a private right;
(3) but, rather, in the nature of a command to
the employer to make a public reparation for
illegally dismissing an employee.
Effect of failure to order backwages
A “plain error” which may be rectified, even if
employee did not bring an appeal regarding the
matter [Aurora Land v. NLRC, 1997]
a. Computation
(1) Without deduction for their earnings
elsewhere during the layoff [Bustamante v.
NLRC, 1996]
(2) Awards including salary differentials are not
allowed [Insular Life Assurance Co. v. NLRC,
1987]
(3) The salary base properly used should be the
basic salary rate at the time of dismissal plus the
regular allowances; allowances include:
(a) Emergency cost of living allowances (ECOLA),
transportation allowances, 13th month pay
[Paramount Vinyl Product Corp. v. NLRC, 1990]
(b) Also included are vacation leaves, service
incentive leaves, and sick leaves
(4) The effects of extraordinary inflation are not
to be applied without an official declaration
thereof by competent authorities [Lantion v.
NLRC, 1990]
b. Limited backwages
General rule: An illegally dismissed employee is
entitled to full backwages.
Exceptions:
(1) The Court awarded limited backwages where
the employee was illegally dismissed but the
employer was found to be in good faith.
(2) Delay of the EE in filing the case for illegal
dismissal.
D. PREVENTIVE SUSPENSION
DEFINITION
It is a disciplinary measure for the protection of
the company's property pending investigation of
any alleged malfeasance or misfeasance
committed by the employee. The employer may
place the worker concerned under preventive
suspension if his continued employment poses a
serious and imminent threat to the life or
property of the employer or of his co-workers.
[PAL v. NLRC, 1998]
As held in PNB v. Velasco, 564 SCRA 512 (2008),
the employer has the right to preventively
suspend an employee during the pendency of
the administrative case against the latter as a
measure of self-protection. In PAL v. NLRC, 292
SCRA 40 (1998), the Court explained that
preventive suspension, by itself, does not signify
that the employer has already adjudged the
employee guilty of the charges for which he was
asked to answer and explain. Such disciplinary
measure is resorted to for the protection of the
company’s property or the life of the employer
or of the co-employees pending investigation of
any alleged malfeasance or misfeasance
committed by the employee.
Preventive suspension is limited to 30 days; any
more than that amounts to constructive
dismissal. [Pido vs. NLRC, 2007]
In Valenzuela v. Caltex Phil., Inc., G.R. No.
169965-66, August 15, 2010, it was held that
after 30 days of preventive suspension, the
employer shall reinstate the worker in his former
position or substantially equivalent position. The
employer may also extend the period of
suspension provided that during the said period,
he shall pay the wages and other benefits due to
the worker.
E. CONSTRUCTIVE DISMISSAL
The following constitute constructive dismissal:
(1) Bona fide suspension of the operation of a
business or undertaking exceeding 6 months
[Valdez v. NLRC, 1998]
(2) Floating status of more than 6 months [Agro
Commercial Security Services v. NLRC, 1989]
An involuntary resignation is resorted to
1) when continued employment is rendered
impossible, unreasonable, or unlikely;
2) when there is a demotion in rank and/or a
diminution in pay;
3) or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to
the employee. [Phil. Wireless, Inc. v. NLRC, 1998]
If an employee was forced to remain without
work or assignment for a period exceeding 6
months, then he is in effect constructively
dismissed [Valdez v. NLRC, 1998]
V. MANAGEMENT PREROGATIVE
It is the right of an Employer to regulate,
according to his own discretion and judgment, all
aspects of employment, including:
1. Hiring
2. Work assignments
3. Working methods
4. Time, place and manner of work
5. Tools to be used
6. Processes to be followed
7. Supervision of workers
8. Working regulations
9. Transfer of employees
10. Work supervision
11. Lay-off of workers
12. Discipline
13. Dismissal
14. Recall of workers
Except
otherwise
limited
special law
Note: So long as a company’s prerogatives are
exercised in good faith for the advancement of
the Employer’s interest and not for the purpose
of defeating or circumventing the rights of the
Employees or under special laws or under, valid
agreements the Supreme Court will uphold
them.
Management Prerogatives cover the following
aspects of business:
A. Operation of the business, including
- transfer or relocation of the
plant
- introduction of new machines or
processes (even if resulting in la-
offs)
- transformation of the company
(e.g. mergers, spin-offs)
- suspension of operations
- sale or disposition of the
disposition of the business
- total closure, if in good faith
B. Personnel actions, such as
- hiring of personnel and
imposing reasonable conditions
therefor
- determining size of the work
force
- transfers or assignments of
employees
- disciplining employees
- terminating employees for
cause
by
DISCIPLINE
The Employer has the prerogative to
instill discipline in his employees and to impose
reasonable penalties, including dismissal, on
erring Employees pursuant to company rules and
regulations. (San Miguel Corporation vs. NLRC,
G.R. No. 87277, May 12, 1989)
Q1: Is the power to discipline absolute?
A1: No. While management has the prerogative
to discipline its employees and to impose
appropriate penalties on erring workers,
pursuant to company rules and regulations,
however, such management prerogatives must
be exercised in good faith for the advancement
of the employer’s interest and not for the
purpose of defeating or circumventing the rights
of the employees under special laws and valid
agreements. (PLDT vs. Teves, G.R. No. 143511,
November 10, 2010).
Note: The Employer has the obligation to share
with its Employees its prerogative of formulating
code of discipline. This is in compliance with the
State’s policy stated in Article 211 of the Labor
Code, to ensure the participation of the workers
in decision and policy-making processes
affecting their rights, duties and welfare. The
exercise of management prerogatives, has,
furthermore, never been considered to be
boundless. This obligation is not dispensed with
by a provision in the collective bargaining
agreement recognizing the exclusive right of the
employer to make and enforce company rules
and regulations to carry out the functions
TRANSFER OF EMPLOYEES
The management has the
prerogative to transfer or assign employees from
one office to another provide there is no
diminution of salary, benefits and other
privileges and the action is not motivated by
discrimination, bad faith or affected as a form of
punishment or demotion without sufficient
cause. This privilege is inherent in the right of
employers to control and manage their
enterprises effectively.
Note 1: there is no law compelling an employee
to accept promotion, as a promotion in the
nature of a gift or a reward, which a person has
a right to refuse.
Note 2: the right to transfer or reassign and
employee is an exclusive right of the employer
and management prerogative as well but such
right is not absolute.
Note 3: it is the employer that must be able to
show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee; nor
does it involve demotion in rank or diminution of
his salaries, privileges or other benefits. If the
employer fails to show the reasonableness of the
transfer, the employee’s transfer shall be
tantamount to constructive dismissal. (Blue
Dairy Corporation vs. NLRC, 314 SCRA 401)
PRODUCTIVITY STANDARD
As a rule, an employer is entitled to
impose productivity standards for its workers,
and in fact, non-compliance may be visited with
a penalty even more severe than demotion. The
practice of a company in laying-off workers
because they failed to make the work quota has
been recognized in this jurisdiction. Failure to
meet the sales quota assigned to each of them
constitute a just cause of their dismissal,
regardless of the permanent or probationary
status of their employment. Failure to observe
prescribed standards of work, or to fulfill
reasonable assignments due to inefficiency ay
constitute just cause for dismissal. Such
inefficiency is understood to mean failure to
attain work goals or work qoutas, either by to
complete the same within the allotted
reasonable period, or by producing
unsatisfactory results. This management
prerogative of requiring standards may be
availed of so long as they are exercised in good As a rule the management retains the
faith for the advancement of the employer’s prerogative, whenever of the service so require,
interest. (Leonardo vs. NLRC, G.R. No. 125303, to change the working hours of the employees.
June 16, 2000)

Management Prerogative to Control Working-

GRANT OF BONUS Hours

Bonus is an amount granted and paid to
an employee for his industry and loyalty which
contributed to the success of the employers
business and made possible the realization of
profits.
Management has the inherent prerogative to
change working hours, schedule hours of work
and to change the same as demanded by the
needs of the business.

Note 1: As a rule - Bonus is not demandable as a

matter of right. It is a management prerogative
given in addition to what is ordinarily received by
or strictly due to recipient. (Producers Bank of
the Philippines vs. NLRC, G.R No. 100701, March
28, 2001).
Note 1.1: Exception to the rule: If given for a long
period of time
1. Consistent and deliberate-
employer continued giving
benefit without any condition
imposed for its payment
2. Employer knew he was not
required to give benefit
3. Nature of benefit is
dependent on profit
4. Made part of the wage or
compensation agreed and
stated in the employment
contract
CHANGE OF WORKING HOURS
Such prerogative s subject to the
following conditions:
a. it must not constitute
grave abuse of
discretion,
b. it must honor collective
bargaining contracts or
individual agreements,
c. it must not constitute
unfair labor practice,
d. the manner of exercise
must not be tainted
not with bad faith or
reckless disregard of the
rights of the employees
affected.
Note 1: Article 83 of the Labor code provides that
the normal hours of work of an employee shall
not exceed eight (8) hours a day. The
abovementioned provision implies that in
exercise of its management prerogatives the
employer, may schedule work shift consisting of
less than eight (8) hours. Hence, following the
principle of “a fair day’s wage for a fair day’s
labor”, the employer is not obliged to pay an
employee, working for less than eight (8) hours a
day, the wages due for eight (8) hours. However,
if by voluntary practice or policy, the employer is
paying his employees’ wages due for eight (8)
hours work although the work is less than eight
(8) hours it cannot increase working hours
without increasing its pay to the employees.
Note 2: Employer is not allowed to withdraw a
benefit which he has voluntarily given.
POST-EMPLOYMENT BAN; NON-COMPETE AND
CONFIDENTIALITY CLAUSE
A post-retirement competitive employment
restriction is designed to protect the Employer
against competition b former employee who
may retire and obtain retirement or pension
benefits and, at the same time, engage in
competitive employment.

RULES ON MARRIAGE BETWEEN EMPLOYEES OF

COMPETITOR-EMPLOYER

As ruled in the case of Duncan

Association of Detailman-PTGWO vs. Glaxo
Wellcome Phil. Inc., G.R. No. 162994, September
17, 2004 it provides that “the prohibition against
personal or marital relationships with employees
of competitors-companies upon Glaxo’s
employees is reasonable under the
circumstances because relationships of that
nature might comprise the interest of the
company. Glaxo does not impose an absolute
prohibition against relationships with and marry
persons of their own choosing. What the
company merely seeks to avoid is a conflict of
interest between the employee and the
company that may arise out of such
relationships.” VI. SOCIAL WELFARE LEGISLATION (PD 626)

SOCIAL SECURITY LAW REVISED GOVERNMENT EMPLOYEE COMPENSATION

SERVICE LAW ACT

Compulsory upon all Employees Compulsory for all permanent Compulsory upon all Employers
not over 60 years of age and Employees below 60 years of age and their Employees not over 60
their Employers upon appointment to years of age; Provided, that an
permanent status, and for all Employee who is not over 60
elective officials for the duration years of age and paying
1. Filipinos recruited in the of their tenure. contributions to qualify for the
Philippines by foreign- retirement of life insurance
based Employers for benefit administered by the
employment abroad
 may be covered by the 1. Any person, whether system shall be subject to
SSS on the voluntary elected or appointed, in compulsory coverage.
basis. the service of an
employer is a covered if
2. Compulsory upon all
employee receives
self-employed persons
compensation for such
earning P1,800 or more
service.
per annum.

LABOR RELATIONS
BOOK FIVE
Art. 217. Declaration of Policy.
A. It is the policy of the State:
a. To promote and emphasize the primacy
of free collective bargaining and
negotiations, including voluntary
arbitration, mediation and conciliation,
as modes of settling labor or industrial
disputes;
b. To promote free trade unionism as an
instrument for the enhancement of
democracy and the promotion of social
justice and development;
c. To foster the free and voluntary
organization of a strong and united labor
movement;
d. To promote the enlightenment of
workers concerning their rights and
obligations as union members and as
employees;
e. To provide an adequate administrative
machinery for the expeditious
settlement of labor or industrial
disputes;
f. To ensure a stable but dynamic and just
industrial peace; and
g. To ensure the participation of workers in
decision and policy-making processes
affecting their rights, duties and welfare.
B. To encourage a truly democratic method of
regulating the relations between the employers
and employees by means of agreements freely
entered into through collective bargaining, no
court or administrative agency or official shall
have the power to set or fix wages, rates of pay,
hours of work or other terms and conditions of
employment, except as otherwise provided
under this Code. (As amended by Section 3,
Republic Act No. 6715, March 21, 1989)
DEFINITIONS
Art. 212. Definitions.
a. "Commission" means the National Labor
Relations Commission or any of its divisions, as
the case may be, as provided under this Code.
b. "Bureau" means the Bureau of Labor Relations
and/or the Labor Relations Divisions in the
regional offices established under Presidential
Decree No. 1, in the Department of Labor.
c. "Board" means the National Conciliation and
Mediation Board established under Executive
Order No. 126.
d. "Council" means the Tripartite Voluntary
Arbitration Advisory Council established under
Executive Order No. 126, as amended.
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.
g. "Labor organization" means any union or
association of employees which exists in whole
or in part for the purpose of collective bargaining
or of dealing with employers concerning terms
and conditions of employment.
h. "Legitimate labor organization" means any
labor organization duly registered with the
Department of Labor and Employment, and
includes any branch or local thereof.
i. "Company union" means any labor
organization whose formation, function or
administration has been assisted by any act
defined as unfair labor practice by this Code.
j. "Bargaining representative" means a
legitimate labor organization whether or not
employed by the employer.
k. "Unfair labor practice" means any unfair labor
practice as expressly defined by the Code.
l. "Labor dispute" includes any controversy or
matter concerning terms and conditions of
employment or the association or
representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms
and conditions of employment, regardless of
whether the disputants stand in the proximate
relation of employer and employee.
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, lay-off, recall, discharge,
assign or discipline employees. Supervisory
employees are those who, in the interest of the
employer, effectively recommend such
managerial actions if the exercise of such
authority is not merely 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.
n. "Voluntary Arbitrator" means any person
accredited by the Board as such or any person
named or designated in the Collective Bargaining
Agreement by the parties to act as their
Voluntary Arbitrator, or one chosen with or
without the assistance of the National
Conciliation and Mediation Board, pursuant to a
selection procedure agreed upon in the
Collective Bargaining Agreement, or any official
that may be authorized by the Secretary of Labor
and Employment to act as Voluntary Arbitrator
upon the written request and agreement of the
parties to a labor dispute.
o. "Strike" means any temporary stoppage of
work by the concerted action of employees as a
result of an industrial or labor dispute.
p. "Lockout" means any temporary refusal of an
employer to furnish work as a result of an
industrial or labor dispute.
q. "Internal union dispute" includes all disputes
or grievances arising from any violation of or
disagreement over any provision of the
constitution and by-laws of a union, including
any violation of the rights and conditions of
union membership provided for in this Code.
r. "Strike-breaker" means any person who
obstructs, impedes, or interferes with by force,
violence, coercion, threats, or intimidation any
peaceful picketing affecting wages, hours or
conditions of work or in the exercise of the right
of self organization or collective bargaining.
s. "Strike area" means the establishment,
warehouses, depots, plants or offices, including
the sites or premises used as runaway shops, of
the employer struck against, as well as the
immediate vicinity actually used by picketing
strikers in moving
to and fro before all points of entrance to and
exit from said establishment. (As amended by
Section 4, Republic Act No. 6715, March 21,
1989)
ELEMENTS OF EMPLOYER-EMPLOYEE
RELATIONSHIP
(a) selection and engagement of the
employee;
(b) payment of wages;
(c) power to dismiss; and
(d) power to control the employee’s
conduct. (most important element)
EMPLOYEE
(1) shall include any employee
(2) shall not be limited to the employee of
any particular employer, unless the Act
so explicitly states otherwise
(3) shall include any individual:
(a) whose work has ceased as a
result of, or in connection with
any current labor dispute
(b) who has not obtained any other
substantially equivalent and
regular employment.
EMPLOYER
(1) includes any person acting in the
interest of an employer, directly or
indirectly.
(2) The term shall not include any labor
organization or any of its officers or
agents except when acting as employer.
(A labor organization may be deemed an
“employer” when it is acting as such in
relation to persons rendering services
under hire, particularly in connection
with its activities for profit or gain.)
LABOR DISPUTE
The test of whether a labor controversy comes
within the definition of a labor dispute depends
on whether it involves or concerns terms,
conditions of employment or representation.
The existence of a labor dispute is not negative
by the fact that the plaintiffs and defendants do
not stand in the proximate relation of employer
and employee.
Title II
NATIONAL LABOR RELATIONS COMMISSION
Chapter I
CREATION AND COMPOSITION
Art. 219. National Labor Relations Commission.
NLRC: NATURE AND ORGANIZATION
Creation and Autonomy
Before the advent of the Labor Code the labor
court was the Court of Industrial Relations.
When martial law was declared in September
1972, PD No. 21 (October 14, 1972) abolished
the CIR and replaced it with an ad hoc National
Labor Relations Commission. This NLRC was
short-lived as it gave way to the NLRC which the
Labor Code created in 1974.

Administrative Supervision Delegated to the
DOLE Secretary Executive
Order No. 204 delegated to the Secretary of
Labor “administrative supervision over the
NLRC, its regional branches and all its
personnel.” The Order cited two objectives: (1)
to further improve the rate of disposition of
cases and (2) to enhance existing measures for
the prevention of graft and corruption in the
NLRC.
Essential Character
Under Republic Act No. 6715 in 1989, as under
the former law, the National Labor Relations
Commission continues to act collegially, whether
it performs administrative or rule-making
functions or exercises appellate jurisdiction to
review decisions and final orders of the Labor
Arbiters.
Tripartite Composition
The same Article 213, as amended, provides that
the Chairman and twenty-three members
composing the National Labor Relations
Commission shall be chosen from the workers,
employers and the public sectors.
Allocation of Powers Between NLRC En Banc and
Its Division
The “division: is a legal entity, not the persons
who sit in it. Hence, an individual commissioner
has no adjudicatory power, although, of course,
he can concur or dissent in deciding a case. The
law lodges the adjudicatory power on each of
the eight divisions, not on the individual
commissioners not on the whole commission.
Art. 221. Appointment and Qualifications.
The Chairman and other Commissioners shall be
members of the Philippine Bar and must have
engaged in the practice of law in the Philippines
for at least fifteen (15) years, with at least five (5)
years experience or exposure in the field of labor
management relations, and shall preferably be
residents of the region where they are to hold
office.
The Executive Labor Arbiters and Labor Arbiters
shall likewise be members of the Philippine Bar
and must have been engaged in the practice of
law in the Philippines for at least seven (7) years,
with at least three (3) years experience or
exposure in the field of labor-management
relations: Provided, However, that incumbent
Executive Labor Arbiters and Labor Arbiters who
have been engaged in the practice of law for at
least five (5) years may be considered as already
qualified for purposes of reappointment as such
under this Act.
The Chairman and the other Commissioners, the
Executive Labor Arbiters and Labor Arbiters shall
hold office during good behavior until they reach
the age of sixty-five years, unless sooner
removed for cause as provided by law or become
incapacitated to discharge the duties of their
office.
The Chairman, the division Presiding
Commissioners and other Commissioners shall
be appointed by the President, subject to
confirmation by the Commission on
Appointments. Appointment
to any vacancy shall come from the nominees of
the sector which nominated the predecessor.
The Executive Labor Arbiters and Labor Arbiters
shall also be appointed by the President, upon
recommendation of the Secretary of Labor and
Employment and shall be subject to the Civil
Service Law, rules and regulations.
The Secretary of Labor and Employment shall, in
consultation with the Chairman of the
Commission, appoint the staff and employees of
the Commission and its regional branches as the
needs of the service may require, subject to the
Civil Service Law, rules and regulations, and
upgrade their current salaries, benefits and
other emoluments in accordance with law. (As
amended by Section 7, Republic Act No.
6715, March 21, 1989)
Chapter II
POWERS AND DUTIES
Art. 223. Jurisdiction of the Labor Arbiters and
the Commission.
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 practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement,
those cases that workers may file involving
wages, rates of pay, hours of work and other
terms and conditions of employment;
4. Claims for actual, moral, exemplary and other
forms of damages arising from the employer-
employee relations;
5. Cases arising from any violation of Article 264
of this Code, including questions involving the
legality of strikes and lockouts; and
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
(P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
b. The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor
Arbiters.
c. Cases arising from the interpretation or
implementation of collective bargaining
agreements and those arising from the
interpretation or enforcement of company
personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration
as may be provided in said agreements.
(As amended by Section 9, Republic Act No.
6715,
March 21, 1989)
Other jurisdiction exercised:
1. Money claims arising out of 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, as well
as employment termination of OFWs;
2. Wage distortion disputes in unorganized
establishments not voluntarily settled by the
parties pursuant to Republic Act No. 6727.
3. Enforcement of compromise agreements
when there is non-compliance by any of the
parties pursuant to Article 227 of the Labor
Code, as amended; and
4. Other cases as may be provided by law.
POWERS OF THE COMMISSION
1. Rule-Making Power
The Commission has the power to promulgate
rules and regulations:
a) governing the hearing and disposition of
cases before it and its regional branches;
b) pertaining to its internal functions; and
c) those that may be necessary to carry out
the purposes of this Code.
It is an elementary rule in administrative law that
administrative regulations and policies enacted
by administrative bodies, such as the Revised
Rules of the NLRC, to interpret the law which
they are entrusted to enforce, have the force of
law, and are entitled to great respect.
2. Power to Issue Compulsory Processes
The Commission has the power to:
a) administer oaths;
b) summon parties; and
c) issue subpoenas ad testificandum and
duces tecum.
3. Power to Investigate and Hear Disputes within
Its Jurisdiction
The Commission has the power to:
a) conduct investigation for the
determination of a question, matter
or controversy within its jurisdiction;
and
b) proceed to hear and determine the
disputes in the manner laid down
under paragraph (c) of Art. 218.
4. Contempt Power
Contempt is defined as a disobedience to the
Court by setting up an opposition to its authority,
justice and dignity. It signifies not only a willful
disregard or disobedience of the court's orders
but such conduct as tends to bring the authority
of the court and the administration of law into
disrepute or in some manner to impede the due
administration of justice.
5. Power to Conduct Ocular Inspection
Under Article 225, the Chairman, any
Commissioner, Labor Arbiter or their duly
authorized representatives, may, at any time
during working hours:
a) conduct an ocular inspection on any
establishment, building, ship or vessel,
place or premises, including any work,
 material, implement, machinery,
appliance or any object therein; and
b) ask any employee, laborer, or any
person, as the case may be, for any
information or data concerning any
matter or question relative to the object
of the investigation.
6. Adjudicatory Power: Original
The NLRC has original jurisdiction over petitions
for injunction or temporary restraining order.
Also, it has original jurisdiction to hear and
decide “National Interest” cases certified to it by
the Secretary of Labor.
7. Adjudicatory Power: Appellate
The NLRC has exclusive appellate jurisdiction
over all cases decided by labor arbiters and the
DOLE regional director or hearing officers.
The NLRC has no appellate jurisdiction over
decisions rendered by
(1) a voluntary arbitrator, or
(2) the secretary of labor, or
(3) the bureau of labor relations
director on cases appealed from the
DOLE regional offices.
The decisions of these three offices are
appealable rather to the Court of Appeals.
POWER TO ISSUE INJUNCTION OR TEMPORARY
RESTRAINING ORDER
The NLRC has injunction power or, simply, the
power to command that an act be done or not
done. The action for injunction is distinct from
the ancillary remedy of preliminary injunction
which cannot exist except only as part or an
incident of an independent action or proceeding.
A writ of preliminary injunction is generally
based solely on initial and incomplete evidence.
1. Injunction by Labor Arbiter
Article 224 limits the grant of injunctive power to
the “Commission” meaning the Commission en
banc or any of its divisions.
2. Requisites for Issuance of Restraining Order or
Injunction
As a rule, restraining orders or injunctions do not
issue ex parte and only after compliance with the
following requisites, to wit:
a) a hearing held "after due and personal notice
thereof has been served, in such manner as the
Commission shall direct, to all known persons
against whom relief is sought, and also to the
Chief Executive and other public officials of the
province or city within which the unlawful acts
have been threatened or committed charged
with the duty to protect complainant's
property;"
b) reception at the hearing of "testimony of
witnesses, with opportunity for cross
examination, in support of the allegations of a
complaint made under oath," as well as
"testimony in opposition thereto, if offered.
c) “a finding of fact by the Commission, to the
effect:
(1) That prohibited or unlawful acts have
been threatened and will be committed
and will be continued unless restrained,
but no injunction or temporary
restraining order shall be issued on
account of any threat, prohibited or
unlawful act, except against the person
or persons, association or organization
making the threat or committing the
prohibited or unlawful act or actually
authorizing or ratifying the same after
actual knowledge thereof;
(2) That substantial and irreparable injury
to complainant's property will follow;
(3) That as to each item of relief to be
granted, greater injury will be inflicted
upon complainant by the denial of relief
than will be inflicted upon defendants
by the granting of relief;
(4) That complainant has no adequate
remedy at law; and (5) That the public
officers charged with the duty to protect
complainant's property are unable or
unwilling to furnish adequate
protection.”
3. Conditions for Issuance Ex Parte of a
Temporary Restraining Order (TRO)
A temporary restraining order (valid only for 20
days) may be issued ex parte under the following
conditions:
a) the complainant "shall also allege that,
unless a temporary restraining order
shall be issued without notice, a
substantial and irreparable injury to
complainant's property will be
unavoidable;
b) there is "testimony under oath,
sufficient, if sustained, to justify the
Commission in issuing a temporary
injunction upon hearing after notice;"
c) the "complainant shall first file an
undertaking with adequate security in
an amount to be fixed by the
Commission sufficient to recompense
those enjoined for any loss, expense or
damage caused by the improvident or
erroneous issuance of such order or
injunction, including all reasonable
costs, together with a reasonable
attorney's fee, and expense of defense
against the order or against the granting
of any injunctive relief sought in the
same proceeding and subsequently
denied by the Commission;" and
d) the "temporary restraining order shall
be effective for no longer than twenty
(20) days and shall become void at the
expiration of said twenty (20) days.
An injury is considered irreparable if it is of such
constant and frequent recurrence that no fair
and reasonable redress can be had therefor in a
court of law, or where there is no standard by
which their amount can be measured with
reasonable accuracy, that is, it is not susceptible
of mathematical computation. It is considered
irreparable injury when it cannot be adequately
compensated in damages due to the nature of
the injury itself or the nature of the right or
property injured or when there exists no certain
pecuniary standard for the measurement of
damages.
“Property” includes not only tangible property
but also the right to use such property.
“Public officers” means local law enforcing
officers.
The “protection” contemplated is that which
would enable the employer to proceed with the
work.
The intent of this requirement is to take the
executive function of law enforcement out of the
court and leave it to the appropriate executive
officers, unless they fail to function.
4. No Adequate Remedy
In addition to the other requirements which the
complainant must satisfy in order to obtain
injunctive relief under the Act, the complainant
must show that “he has no adequate remedy at
law.”
An adequate remedy at law has been defined as
one “that affords relief with reference to the
matter in controversy, and which is appropriate
to the particular circumstances of the case.
5. Cash Bond
Under the NLRC Rules of 2005, no temporary
restraining order or writ of preliminary
injunction shall be issued except on the
condition that petitioner shall first file an
undertaking to answer for the damages and post
a cash bond in the amount of Fifty Thousand
Pesos (P50,000.00), or such higher amount as
may be determined by the Commission.
The purpose of the bond is to recompense those
enjoined for any loss, expense or damage caused
by the improvident or erroneous issuance of
such order or injunction, including all reasonable
costs, together with a reasonable attorney’s fee,
and expense of defense against the order or
against the granting of any injunctive relief
sought in the same proceeding and subsequently
denied by the Commission.
6. Scope
As to the scope of an injunction issued under the
Act, both the Act itself and the cases restrict the
operation of such injunction not only to the
specific acts complained of in the pleadings and
proven at trial as wrongful, but further, limits the
injunction to only those alleged and proven
guilty of actual participation, authorization or
ratification of such acts.
The power of the NLRC to enjoin or restrain the
commission of any or all prohibited or unlawful
acts as provided in Art. 218 of the Labor Code,
can only be exercised in a labor dispute.
7. Reception of Evidence
The reception of evidence “for the application of
a writ of injunction may be delegated by the
Commission to any of its Labor Arbiters who shall
conduct such hearings in such places as he may
determine to be accessible to the parties and
their witnesses and shall submit thereafter his
recommendation to the Commission.”

“Labor Arbiter” in the preceding sentence may
now refer to “Commission Attorney,” a position
created by R.A. No. 9347 (July 27, 2006) to assist
the Commission and its divisions in their
appellate and adjudicatory functions.
8. Twenty-day Life of TRO
A temporary restraining order (TRO), if issued at
all in a petition for injunction, is valid only for
twenty (20) days and becomes void ipso facto at
the end of that period. The TRO takes effect
upon its issuance and not upon receipt of the
parties.
The maximum period of 20 days includes
Saturdays, Sundays, and holidays.
Appearances and Fees.
a. Non-lawyers may appear before the
Commission or any Labor Arbiter only:
1. If they represent themselves; or
2. If they represent their organization or
members thereof.
b. No attorney’s fees, negotiation fees or similar
charges of any kind arising from any collective
bargaining agreement shall be imposed on any
individual member of the contracting union:
Provided, However, that attorney’s fees may be
charged against union funds in an amount to be
agreed upon by the parties. Any contract,
agreement or arrangement of any sort to the
contrary shall be null and void. (As amended by
Presidential Decree No. 1691, May 1, 1980)
Chapter III
APPEAL
Art. 229. 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
1. 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
The perfection of an appeal within the statutory
execution for reinstatement provided herein.
or reglementary period is not only mandatory
but also jurisdictional and failure to do so
renders the questioned decision final and
To discourage frivolous or dilatory appeals, the
executor, thus depriving the appellate court of
Commission or the Labor Arbiter shall impose
jurisdiction to alter the final judgment, much less
reasonable penalty, including fines or censures,
entertain the appeal.
upon the erring parties.

2. PERIOD TO APPEAL FROM LABOR ARBITER

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. (As amended by Section 12,
Republic Act
No. 6715, March 21, 1989)
1. NO MOTION FOR RECONSIDERATION OF
LABOR ARBITER’S DECISION
If any grounds mentioned in this Article exists,
the losing party may appeal the Labor Arbiter’s
decision to the NLRC within ten (10) days from
receipt of the decision.
2.1 Ten Calendar Days
A period of ten (10) days from receipt of any
order is granted to either or to both parties
involved to appeal to the National Labor
Relations Commission.
3. GROUNDS OF APPEAL
The 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 or
Regional Director;
b) If the decision, resolution or
order was secured through
fraud or coercion, including
graft and corruption;
c) If made purely on questions of
law; and/or
d) If serious errors in the findings
of facts are raised which, if not
corrected, would cause grave or
irreparable damage or injury to
the appellant.

Final Decision Cannot Be Amended If not 4. WHERE TO FILE APPEAL

appealed on time, the Labor Arbiter’s decision
becomes final and cannot be amended.
The appeal shall be filed with the Regional
Arbitration Branch or Regional Office where the
case was heard and decided.
5. REQUISITES FOR PERFECTION OF APPEAL
For Perfection Of Appeal. –
a) The appeal shall be:
1) filed within the reglementary period
provided in Section 1 of this Rule;
2) verified by the appellant himself in
accordance with Section 4, Rule 7 of the
Rules of Court, as amended;
3) in the form of a memorandum of appeal
which shall state the grounds relied
upon and the arguments in support
thereof, the relief prayed for, and with a
statement of the date the appellant
received the appealed decision,
resolution or order;
4) in three (3) legibly typewritten or
printed copies; and
5) accompanied by
i) proof of payment of the
required appeal fee;
ii) posting of a cash or surety
bond as provided in
Section 6 of this Rule; iii)
a certificate of non-forum
shopping; and iv) proof of
service upon the other
parties.
b) A mere notice of appeal without complying
with the other requisites aforestated shall not
stop the running of the period for perfecting an
appeal.
c) The appellee may file with the Regional
Arbitration Branch or Regional Office where the
appeal was filed, his answer or reply to
appellant's memorandum of appeal, not later
than ten (10) calendar days from receipt thereof.
Failure on the part of the appellee who was
properly furnished with a copy of the appeal to
file his answer or reply within the said period
may be construed as a waiver on his part to file
the same.
d) Subject to the provisions of the Labor Code,
once the appeal is perfected in accordance with
these Rules, the Commission shall limit itself to
reviewing and deciding only the specific issues
that were elevated on appeal.
6. FRIVOLOUS APPEAL
Section 11, Rule VI of the NLRC Rules of
Procedure empowers not only the Commission
but also the Labor Arbiter to impose reasonable
penalties, including fines and censures, upon a
party for filing a frivolous appeal. This implies
that even when the appeal is still with the Labor-
Arbiter, and not yet transmitted to the
Commission, the former may already find it
frivolous and, there and then, terminate that
appeal.
Unverified Letter Not Proper Appeal
7. PAYMENT OF APPEAL FEES
Section 5. Appeal Fee. - The appellant shall pay
an appeal fee of One Hundred Fifty Pesos
(P150.00) to the Regional Arbitration Branch or
Regional Office of origin, and the official receipt
of such payment shall form part of the records of
the case.
The failure to pay the appeal docketing fee
confers a directory and not a mandatory power
to dismiss an appeal, and such power must be
exercised with a sound discretion and with a
great deal of circumspection considering all
attendant circumstances.
8. APPEAL BOND; FILING ON TIME; EXCEPTIONS
Section 6. Bond. - In case the decision of the
Labor Arbiter or the Regional Director involves a
monetary award, an appeal by the employer may
be perfected only upon the posting of a bond,
which shall either be in the form of cash deposit
or surety bond equivalent in amount to the
monetary award, exclusive of damages and
attorney's fees.
In case of surety bond, the same shall be issued
by a reputable bonding company duly accredited
by the Commission or the Supreme Court, and
shall be accompanied by original or certified true
copies of the
following:
a) a joint declaration under oath by the
employer, his counsel, and the bonding
company, attesting that the bond posted is
genuine, and shall be in effect until final
disposition of the case.
b) an indemnity agreement between the
employerappellant and bonding company;
c) proof of security deposit or collateral securing
the bond: provided, that a check shall not be
considered as an acceptable security;
d) a certificate of authority from the Insurance
Commission;
e) certificate of registration from the Securities
and Exchange Commission;
f) certificate of authority to transact surety
business from the Office of the President;
g) certificate of accreditation and authority from
the Supreme Court; and
h) notarized board resolution or secretary's
certificate from the bonding company showing
its authorized signatories and their specimen
signatures.
A cash or surety bond shall be valid and effective
from the date of deposit or posting, until the
case is finally decided, resolved or terminated, or
the award satisfied. This condition shall be
deemed incorporated in the terms and
conditions of the surety bond, and shall be
binding on the appellants and the bonding
company.
The appellant shall furnish the appellee with a
certified true copy of the said surety bond with
all the abovementioned supporting documents.
The appellee shall verify the regularity and
genuineness thereof and immediately report any
irregularity to the Commission. Upon verification
by the Commission that the bond is irregular or
not genuine, the Commission shall cause the
immediate dismissal of the appeal, and censure
or cite in contempt the responsible parties and
their counsels, or subject them to reasonable
fine or penalty.
No motion to reduce bond shall be entertained
except on meritorious grounds, and only upon
the posting of a bond in a reasonable amount in
relation to the monetary award.
The mere filing of a motion to reduce bond
without complying with the requisites in the
preceding paragraphs shall not stop the running
of the period to perfect an appeal.
The bond is sine qua non to the perfection of
appeal from the labor arbiter’s monetary award.
Motion to Reduce Bond under NLRC Rules
A motion to reduce the amount of the bond may
be entertained, but, meantime, a bond in
reasonable amount must be filed anyway.
No Bond, No Appeal Perfected
The lawmakers intended the posting of a cash or
surety bond by the employer to be the exclusive
means by which an employer’s appeal may be
considered completed.
Amount of Appeal Bond Excludes Damages
An appeal is deemed perfected upon the posting
of the bond equivalent to the monetary award
exclusive of moral and exemplary damages as
well as attorney’s fees.
Property Bond is Acceptable.
Supersedeas Bond
Substantial justice demands that it fulfill its
commitment to post the bond in order to stay
execution of the judgment against it pending
resolution of the appeal therefrom. This
consideration cannot be outweighed by the
claim that procedural errors were committed by
the Labor Arbiter.
Title III
BUREAU OF LABOR RELATIONS
1. BLR JURISDICTION
The Bureau of Labor Relations (BLR) no longer
handles “all” labor-management disputes;
rather, its functions and jurisdiction are largely
confined to union matters, collective bargaining
registry, and labor education.
Section 16. Bureau of Labor Relations. - The
Bureau of Labor Relations shall set policies,
standards, and procedures on the registration
and supervision of legitimate labor union
activities including denial, cancellation and
revocation of labor union permits. It shall also
set policies, standards, and procedure relating to
collective bargaining agreements, and the
examination of financial records of accounts of
labor organizations to determine compliance
with relevant laws.
2. INTER-UNION AND INTRA-UNION DISPUTES;
D.O. NO. 40-03
"Inter-Union Dispute" refers to any conflict
between and among legitimate labor unions
involving representation questions for purposes
of collective bargaining or to any other conflict
or dispute between legitimate labor unions.
"Intra-Union Dispute" refers to any conflict
between and among union members, including
grievances arising from any violation of the
rights and conditions of membership, violation
of or disagreement over any provision of the
union's constitution and by-laws, or disputes
arising from chartering or affiliation of union.
In inter/intra-union dispute the complaint may
be filed by a union or union members; in a
“related labor relations dispute” the complaint
may be filed by a party-in-interest who is not
necessarily a union or union member.
Whether the dispute be of the first or the second
category, the complainant or petition, if it
involves an independent union, a chartered
local, or a worker’s association, shall be filed
with the DOLE Regional Office where the labor
organization is registered. But if the complaint
involves a federation or an industry/national
union, it shall be filed with the BLR itself.
D.O. No. 40-03
The Order appears to aim the following specific
objectives:
1. to simplify the formation and registration of
unions, especially chartered locals
2. to simplify and expedite the holding of
certification elections
3. to promote responsible unionism, particularly
in administration of union funds
4. to authorize union merger, consolidation, and
change of name
5. to authorize deregistration of collective
bargaining agreements
Effect of Pendency
Effects of the filing/pendency of inter/intra-
union and other related labor relations disputes
The rights, relationships and obligations of the
parties litigants against each other and other
parties-in-interest prior to the institution of the
petition shall continue to remain during the
pendency of the petition and until the date of
finality of the decision rendered therein.
Appeal
The decision of the Med-Arbiter and Regional
Director may be appealed to the Bureau by any
of the parties within ten (10) days from receipt
thereof, copy furnished the opposing party. The
decision of the Bureau Director in the exercise of
his/her original jurisdiction may be appealed to
the Office of the Secretary by any party within
the same period, copy furnished the opposing
party.
The appeal shall be verified under oath and shall
consist of a memorandum of appeal specifically
stating the grounds relied upon by the appellant,
with supporting arguments and evidence.
Where to file appeal
The memorandum of appeal shall be filed in the
Regional Office or Bureau where the complaint
or petition originated. Within twentyfour (24)
hours from receipt of the memorandum of
appeal, the Bureau or Regional Director shall
cause the transmittal thereof together with the
entire records of the case to the Office of the
Secretary or the Bureau, as the case may be.
Finality of Decision
Where no appeal is filed within the ten-day
period, the Bureau and Regional Director or
Med-Arbiter, as the case may be, shall enter
the finality of the decision in the records of the
case and cause the immediate implementation
thereof.
Period to reply
A reply to the appeal may be filed by any party
to the complaint or petition within ten (10) days
from receipt of the memorandum of appeal. The
reply shall be filed directly with the Bureau or the
Office of the Secretary, as the case may be.
Decision of the Bureau/Office of the Secretary
The Bureau Director or the Secretary, as the case
may be, shall have twenty (20) days from receipt
of the entire records of the case within which to
decide the appeal. The filing of the
memorandum of appeal from the decision ofthe
MedArbiter or Regional Director and Bureau
Director stays the implementation of the
assailed decision.
The Bureau or Office of the Secretary may call
the parties to a clarificatory hearing in aid of its
appellate jurisdiction.
Finality of Decision of Bureau/Office of the
Secretary
The decision of the Bureau or the Office of the
Secretary shall become final and executory after
ten (10) days from receipt thereof by the parties,
unless a motion for its reconsideration is filed by
any party therein within the same period. Only
one (1) motion for reconsideration of the
decision of the Bureau or the Office of the
Secretary in the exercise of their appellate
jurisdiction shall be allowed.
Execution of decision
The decision of the Med-Arbiter and Regional
Director shall automatically be stayed pending
appeal with the Bureau. The decision of the
Bureau in the exercise of its appellate
jurisdiction shall be immediately executory upon
issuance of entry of final judgment.
The decision of the Bureau in the exercise of its
original jurisdiction shall automatically be stayed
pending appeal with the Office of the Secretary.
The decision of the Office of the Secretary shall
be immediately executory upon issuance of
entry of final judgment.
EXTENT OF BLR AUTHORITY
In the interest of industrial peace and for the
promotion of the salutary constitutional
objectives of social justice and protection to
labor, the competence of the governmental
entrusted with supervision over disputes
involving employers and employees as well as
"inter-union and intra-union conflicts," is broad
and expensive.
KATARUNGANG PAMBARANGAY, NOT
APPLICABLE TO LABOR DISPUTES
Presidential Decree No. 1508 applies only to
courts of justice and not to labor relations
commissions or labor arbitrators’ offices.
1. COMPROMISE AGREEMENTS
The assistance of the BLR or the regional office
of the DOLE in the execution of a compromise
settlement is a basic requirement; without it,
there can be no valid compromise settlement.
The NLRC or any court shall not assume
jurisdiction over issues involved therein, except:
a) in case of noncompliance with the
compromise agreement, or
b) if there is prima facie evidence that the
settlement was obtained through fraud,
misrepresentation, or coercion.
FORMAL REQUIREMENTS OF COMPROMISE
AGREEMENT
Compromise agreements involving labor
standards cases must be reduced to writing and
signed in the presence of the Regional Director
or his duly authorized representative.
VALID COMPROMISE AND QUITCLAIM
The law looks with disfavor upon quitclaims and
releases by employees who are inveigled or
pressured into signing them by unscrupulous
employers seeking to evade their legal
responsibilities. On the other hand, there are
legitimate waivers that represent a voluntary
settlement of laborer's claims that should be
respected by the courts as the law between the
parties.
Not all waivers and quitclaims are invalid as
against public policy. If the agreement was
voluntarily entered into and represents a
reasonable settlement, it is binding on the
parties and may not later be disowned simply
because of a change of mind. It is only where
there is clear proof that the waiver was wangled
from an unsuspecting or gullible person, or the
terms of settlement are unconscionable on its
face, that the law will step in to annul the
questionable transaction. But where it is shown
that the person making the waiver did so
voluntarily, with full understanding of what he
was doing, and the consideration for the
quitclaim is credible and reasonable, the
transaction must be recognized as a valid and
binding undertaking.
COMPROMISE SHOULD BE DULY AUTHORIZED
Authority to Bind Party. - Attorneys and other
representatives of parties shall have authority to
bind their clients in all matters of procedure; but
they cannot, without a special power of attorney
or express consent, enter into a compromise
agreement with the opposing party in full or
partial discharge of a client's claim.
The authority to compromise cannot lightly be
presumed and should be duly established by
evidence.
WHEN TO EFFECT COMPROMISE: FINAL
DECISION, NEGOTIABLE?
A compromise agreement may be effected at
any stage of the proceedings and even when
there is already a final and executory judgment.
OPTIONS WHEN COMPROMISE AGREEMENTS IS
VIOLATED
Under Article 2041 of the Civil Code, should a
party fail or refuse to comply with the terms of a
compromise or amicable settlement, the other
party could either:
(1) enforce the compromise by a writ of
execution, or
(2) regard it as rescinded and so insist upon his
original demand.
Art. 235. Issuance of subpoenas. The Bureau
shall have the power to require the appearance
of any person or the production of any paper,
document or matter relevant to a labor dispute
under its jurisdiction, either at the request of any
interested party or at its own initiative.
Art. 236. Appointment of bureau personnel. The
Secretary of Labor and Employment may
appoint, in addition to the present personnel of
the Bureau and the Industrial Relations Divisions,
such number of examiners and other assistants
as may be necessary to carry out the purpose of
the Code. (As amended by Section 15, Republic
Act No. 6715, March 21, 1989)
Art. 237. Registry of unions and file of collective
bargaining agreements. The Bureau shall keep a
registry of legitimate labor organizations. The
Bureau shall also maintain a file of all collective
bargaining agreements and other related
agreements and records of settlement of labor
disputes and copies of orders and decisions of
voluntary arbitrators. The file shall be open and
accessible to interested parties under conditions
prescribed by the Secretary of Labor and
Employment, provided that no specific
information submitted in confidence shall be
disclosed unless authorized by the Secretary, or
when it is at issue in any judicial litigation, or
when public interest or national security so
requires.
Within thirty (30) days from the execution of a
Collective Bargaining Agreement, the parties
shall submit copies of the same directly to the
Bureau or the Regional Offices of the
Department of Labor and Employment for
registration, accompanied with verified proofs of
its posting in two conspicuous places in the place
of work and ratification by the majority of all the
workers in the bargaining unit. The Bureau or
Regional Offices shall act upon the application
for registration of such Collective
Bargaining Agreement within five (5) calendar
days from receipt thereof. The Regional Offices
shall furnish the Bureau with a copy of the
Collective Bargaining Agreement within five (5)
days from its submission.
The Bureau or Regional Office shall assess the
employer for every Collective Bargaining
Agreement a registration fee of not less than one
thousand pesos (P1,000.00) or in any other
amount as may be deemed appropriate and
necessary by the Secretary of Labor and
Employment for the effective and efficient
administration of the Voluntary Arbitration
Program. Any amount collected under this
provision shall accrue to the Special Voluntary
Arbitration Fund.
The Bureau shall also maintain a file and shall
undertake or assist in the publication of all final
decisions, orders and awards of the Secretary of
Labor and Employment, Regional Directors and
the Commission. (As amended by Section 15,
Republic Act No. 6715, March 21, 1989)
REGISTRY OF UNIONS AND CBAs
The Bureau shall keep a registry of legitimate
labor organizations.
The Bureau shall also maintain a file of all
Collective Bargaining Agreements (CBAs) and
other related agreements.
Art. 238. Prohibition on certification election.
The Bureau shall not entertain any petition for
certification election or any other action which
may disturb the administration of duly LABOR ORGANIZATION: TWO BROAD
registered existing collective bargaining PURPOSES
agreements affecting the parties except under
A “labor organization” is not always a union; it
Articles 253, 253-A and 256 of this Code. (As
may be an “association of employees.” And, the
amended by Section 15, Republic Act No. 6715,
purpose is not only or necessarily “collective
March 21, 1989)
bargaining” but also dealing with employers
concerning terms and conditions of
employment.
THE CONTRACT-BAR RULE

Article 238 speaks of the contract-bar rule which

means that while a valid and registered CBA is "Labor Organization" refers to any union or
subsisting, the Bureau is not allowed to hold an
association of employees in the private sector
election contesting the majority status of the
which exists in whole or in part for the purpose
incumbent union. The existence of the CBA does
of collective bargaining, mutual aid, interest,
not allow, that is, it bars, the holding of the inter-
cooperation, protection, or other lawful
union electoral contest. The election is legally
purposes.
allowed only during the “freedom period” which
refers to the last 60 days of the fifth year of a
CBA.
"Legitimate Labor Organization" refers to any
The objective of the rule, obviously, is to labor organization in the private sector
minimize union “politicking” until the proper registered or reported with the Department in
time comes. accordance with Rules III and IV of these Rules.

Art. 239. Privileged communication. Information
and statements made at conciliation
proceedings shall be treated as privileged
communication and shall not be used as
evidence in the Commission.
"Union" refers to any labor organization in the
private sector organized for collective bargaining
and for other legitimate purposes.

Conciliators and similar officials shall not testify
in any court or body regarding any matters taken
up at conciliation proceedings conducted by
them.
Title IV
Not every union is “legitimate;” only those
properly registered are considered LLO.
But non-registration does not mean it is
“illegitimate;” it simply is unregistered and has
no legal personality.

LABOR ORGANIZATIONS
It exists legally but does not possess the rights of
an LLO.
Chapter I
"Exclusive Bargaining Representative" refers to a
legitimate labor union duly recognized or
certified as the sole and exclusive bargaining
representative or agent of all the employees in a
bargaining unit.
"Workers' Association" refers to an association
of workers organized for the mutual aid and
protection of its members or for any legitimate
purpose other than collective bargaining.
"Legitimate Workers' Association" refers to an
association of workers organized for mutual aid
and protection of its members or for any
legitimate purpose other than collective
bargaining registered with the Department.
Distinction Between “Collective Bargaining” and
“Dealing with Employer”
To bargain collectively is a right that may be
acquired by a labor organization after registering
itself with the Department of Labor and
Employment and after being recognized or
certified by DOLE as the exclusive bargaining
representative (EBR) of the employees.
Dealing with employer, on the other hand, is a
generic description of interaction between
employer and employees concerning grievances,
wages, work hours and other terms and
conditions of employment, even if the
employee’s group is not registered with the
Department of Labor and Employment.
CLASSIFICATION OF LABOR ORGANIZATIONS
"National Union/Federation" means any labor
organization with at least ten (10) locals or
chapters each of which must be a duly
recognized collective bargaining agent.
“Industry Union” means any group of legitimate
labor organizations operating within an
identified industry, organized for collective
bargaining or for dealing with employers
concerning terms and conditions of employment
within an industry, or for participating in the
formulation of social and employment policies,
standards and programs in such industry, which
is duly registered with the Department. D.O. No.
40-03, however, does not carry this term and this
definition, although under Rule III, Section 2-B,
“labor organizations operating within an
identified industry may also apply for
registration as a federation or national union
within the specified industry by submitting to the
Bureau the same set of documents (as required
of federations and national unions.)”
“Trade Union Center” means any group of
registered national unions or federations
organized for the mutual aid and protection of its
members, for assisting such members in
collective bargaining, or for participating in the
formulation of social and employment policies,
standards and programs, which is duly registered
with the Department.
An “alliance” is an aggregation of unions existing
in one line of industry, or in a conglomerate, a
group of franchises, a geographical area, or an
industrial center.
A “company-union” is a labor organization
which, in whole or in part, is employer-
controlled or employer denominated.
Unions at Enterprise Level Registration is merely a condition sine qua non
for the acquisition of legal personality by labor
A labor union at the enterprise level may be
organizations, associations or unions and the
created either by (a) independent registration or
possession of the rights and privileges granted by
(b) chartering. Independent registration is
law to legitimate labor organizations.
obtained by the union organizers in an
enterprise through their own action instead of
through issuance of a charter by a federation or
Such requirement is a valid exercise of the police
national union. An independent union has a legal
power, because the activities in which labor
personality of its own not derived from that of a
organizations, associations and union of workers
federation.
are engaged affect public interest, which should
be protected.

"Independent Union" refers to a labor

organization operating at the enterprise level
Effect of Registration Under the Corporation Law
that acquired legal personality through
independent registration. A labor organization may be organized under the
Corporation Law as a non-stock corporation and
Chartering, on the other hand, takes place when
issued a certificate of incorporation by the
a duly registered federation or national
Securities and Exchange Commission. But such
unionissue a charter to a union in an enterprise
incorporation has only the effect of giving to it
and registers the creation of the chapter with the
juridical personality before regular courts of
Regional Office where the applicants operates.
justice. Such incorporation does not grant the
The union recipient of the charter s called a
rights and privileges of a legitimate labor
chapter or local or chartered local. Its legal
organization.
personality is derived from the federation/
national union but it may subsequently register
itself independently.
WHERE TO REGISTER

Applications for registration of independent

REGISTRATION RATIONALE
A labor organization may be registered or not. If
registered with DOLE, it is considered “legitimate
labor organization” (LLO). But the reverse us not
true, that is, a labor organization is not
“illegitimate” just because it is unregistered. It is
still lawful organization and can deal with the
employer, but it has no legal personality to
demand collective bargaining with the employer.
It cannot petition for a certification election and
cannot hold a legal strike.
labor unions, chartered locals, and worker’s
association shall be filed with the Regional Office
where the applicant principally operates.
If the Regional Office denies the application, the
denial is appealable to the Bureau and from
there to the Court of Appeals (not to the
Secretary of Labor)
if proper grounds exist.
REGISTRATION REQUIREMENTS

Independent Labor Union

Requirements for application. - A. The name of its officers and their respective
application for registration of an independent addresses;
labor union shall be accompanied by the
(b) the minutes of the organizational meeting(s)
following documents:
and the list of employees who participated in the
(a) the name of the applicant labor union, its said meeting(s);
principal address, the name of its officers and
(c) the annual financial reports if the applicant
their respective addresses, approximate number
union has been in existence for one or more
of employees in the bargaining unit where it
years, unless it has not collected any amount
seeks to operate, with a statement that it is not
from the members, in which case a statement to
reported as a chartered local of any federation
this effect shall be included in the application;
or national union;
(d) the applicant union's constitution and by-
(b) the minutes of the organizational meeting(s)
laws, minutes of its adoption or ratification, and
and the list of employees who participated in the
the list of the members who participated in it.
said meeting(s);
The list of ratifying members shall be dispensed
(c) the name of all its members comprising at with where the constitution and by-laws was
least 20% of the employees in the bargaining ratified or adopted during the organizational
unit; meeting(s). In such a case, the factual
circumstances of the ratification shall be
(d) the annual financial reports if the applicant
recorded in the minutes of the organizational
has been in existence for one or more years,
meeting(s);
unless it has not collected any amount from the
members, in which case a (e) the resolution of affiliation of at least ten (10)
legitimate labor organizations, whether
statement to this effect shall be included in the
independent unions or chartered locals, each of
application;
which must be a duly certified or recognized
(e) the applicant's constitution and by-laws, bargaining agent in the establishment where it
minutes of its adoption or ratification, and the seeks to operate; and
list of the members who participated in it. The
(f) the name and addresses of the companies
list of ratifying members shall be dispensed with
where the affiliates operate and the list of all the
where the constitution and by-laws was ratified
members in each company involved.
or adopted during the organizational meeting. In
such a case, the factual circumstances of the
ratification shall be recorded in the minutes of
Labor organizations operating within an
the organizational meeting(s).
identified industry may also apply for
Federation or National Union registration as a federation or national union
within the specified industry by submitting to the
B. The application for registration of federations
Bureau the same set of documents.
and national unions shall be accompanied by the
following documents:

(a) a statement indicating the name of the Worker’s Association

applicant labor union, its principal address, the
C. The application for registration of a workers'
association shall be accompanied by the
following documents:
(a) the name of the applicant association, its
principal address, the name of its officers and
their respective addresses;
(b) the minutes of the organizational meeting(s)
and the list of members who participated
therein;
The determinative date now is not the date the
required documents were filed but the date the
certificate was issued. And the date of issuance
is likely to be the date the documents were filed
because D.O. No. 40-D-05, supplementing D.O.
No. 40-03, requires the Regional Office or the
Bureau to either approve or deny the application
for registration “within one (1) day from receipt
thereof.”

(c) the financial reports of the applicant

association if it has been in existence for one or
more years, unless it has notcollected any
amount from the members, in which case a
statement to this effect shall be included in the
application;
(d) the applicant's constitution and by-laws to
which must be attached the names of ratifying
members, the minutes of adoption or ratification
of the constitution and by-laws and the date
when ratification was made, unless ratification
was done in the organizational meeting(s), in
which case such fact shall be reflected in the
minutes of the organizational meeting(s).
Chartered Local
E. A duly-registered federation or national union
may directly create a chartered local by
submitting to the Regional Office two (2) copies
of the following:
(a) A charter certificate issued by the federation
or national union indicating the creation or
establishment of the local/chapter;
(b) The names of the local/chapter’s officers,
their addresses, and the principal office of the
local/chapter; and
(c) The local/chapter’s constitution and by-laws,
provided that where the local/chapter’s
constitution and by-laws is the same as that of
the federation or national union, this fact shall
be indicated accordingly.

When Does a Chartered Local Become an LLO?

All of the foregoing supporting requirements
The acquisition of legal personality cannot be the
shall be certified under oath by the Secretary or
date of filing of the documents. Section 3
the Treasurer of the local/chapter and attested
(Department Order No. 9, 1997) was defeating
by its President. (As amended by DO 40-B-03.)
the very purpose of registration of unions which
was to block off fly-by-night unions.

COLLECTIVE BARGAINING UNIT (CBU)

Effect of registration "Bargaining Unit" refers to a group of employees

sharing mutual interests within a given employer
The labor union or workers' association shall be
unit, comprised of all or less than all of the entire
deemed registered and vested with legal
body of employees in the employer unit or any
personality on the date of issuance of its
specific occupational or geographical grouping
certificate of registration or certificate of
within
creation of chartered local.
such employer unit.
While officers lead and represent a union, a
union represents a CBU. The representative is
the union; the group represented is the CBU. The
representative union, once determined, will
represent even the members of other unions as
long as they are part of the CBU. This is why the
representative union (also called bargaining
agent or majority union) is called “exclusive
bargaining representative” (EBR).
CONSTITUION, BY-LAWS, AND REGULATIONS
Like other voluntary associations, labor unions
have the right to adopt constitutions, rules, and
by-laws within the scope of the lawful purposes
of the union and bind their members thereby,
provided they are reasonable, uniform, and not
discriminatory, and provided they are not
contrary to public policy or the law of the land.
The articles of agreement of a labor union,
whether called a constitution, charter, by-laws,
or any other name, constitutes a contract
between the members which the courts will
enforce, if not immoral or contrary to public
policy or the law of the land.
A union’s constitution and by-laws govern the
relationship between and among its members.
As in the interpretation of contracts, if the terms
are clear
and leave no doubt as to the intentions of the
parties, the literal meaning of the stipulation
shall control.
AFFILIATION
An affiliate is an independently registered union
that enters into an agreement of affiliation with
a federation or a national union. It also refers to
a chartered local which applies for and is granted
an independent registration but does not
disaffiliate from its mother federation or
national union.
A union, either an independent or a local,
affiliates with a federation or national union for
a number of reasons. The most common ones
are to secure support or assistance particularly
during the formative stage of unionization; or to
utilize expertise in preparing and pursuing
bargaining proposals; or to marshal mind and
manpower in the course of a group action such
as strike.
The relationship between a local or chapter and
the labor federation or national union is
generally understood to be that of agency,
where the local is the principal and the
federation the agent.
Report of Affiliation; Requirements
Report of Affiliation with federations or national
unions;
Where to file. - The report of affiliation of an
independently registered labor union with a
federation or national union shall be filed with
the Regional Office that issued its certificate of
registration.
Requirements of affiliation. - The report of
affiliation of independently registered labor
unions with a federation or national union shall
be accompanied by the following documents:
(a) resolution of the labor union's board of
directors approving the affiliation;
 (b) minutes of the general membership
meeting approving the affiliation;
(c) the total number of members
comprising the labor union and the
names of members who approved the
affiliation;
(d) the certificate of affiliation issued by the
federation in favor of the independently
registered labor union; and
(e) written notice to the employer
concerned if the affiliating union is the
incumbent bargaining agent.
DISAFFILIATION
The sole essence of affiliation is to increase, by
collective action, the common bargaining power
of local unions for the effective enhancement
and protection of their interests. Admittedly,
there are times when without succor and
support local unions may find it hard, unaided by
other support groups, to secure justice for
themselves.
Yet the local unions remain the basic units of
association, free to serve their own interests
subject to the restraints imposed by the
constitution and bylaws of the national
federation, and free also to renounce the
affiliation upon the terms laid down in the
agreement which brought such affiliation into
existence.
To disaffiliate is a right, but to observe the terms
of affiliation is an obligation
Local Union is the Principal, Federation the
Agent
Disaffiliation of employees from their mother
union and their formation into a new union do
not terminate their status as employees of the
corporation, as the employees and members of
the local union did not form a new union but
merely exercised their right to
register their local union.
When to Disaffiliate
While it is true that a local union is free to serve
the interest of all its members and enjoys the
freedom to disaffiliate, such right to disaffiliate
may be exercised and is thus considered a
protected labor activity only when warranted by
circumstances. Generally, a labor union may
disaffiliate from the mother union to form a local
or independent union only during the 60- day
freedom period immediately preceding the
expiration of the CBA.
The “freedom period” refers to the last 60-days
of the fifth and last year of a CBA.
But even before the onset of the freedom period
(and despite the closed-shop provision in the
CBA between the mother union and
management) disaffiliation may still be carried
out, but such disaffiliation must be effected by a
majority of the members in the bargaining unit.
This ruling is true ONLY if the contract of
affiliation does not specify the period for
possible disaffiliation.
Disaffiliation must be by Majority Decision
It has to be decided by the entire membership
through secret balloting.
Disaffiliation: Effect on Legal Status
When a union which is not independently
registered disaffiliates from the federation, it is
not entitled to the rights and privileges granted
to a legitimate labor organization. It cannot file a
petition for certification election.
Disaffiliation: Effect on Union Dues
The obligation of an employee to pay union dues
is coterminous with his affiliation or
membership.
A contract between an employer and the parent
organization as bargaining agent for the
employees is terminated by the disaffiliation of
the local of which the employees are members.
Disaffiliation: Effect on Existing CBA; the
“Substitutionary” Doctrine
The “substitutionary doctrine” provides that the
employees cannot revoke the validly executed
collective bargaining contract with their
employer by the simple expedient of changing
their bargaining agent. The new agent must
respect the contract.
REVOCATION OF CHARTER
A federation, national union or workers’
association may revoke the charter issued to a
local/chapter or branch by serving on the latter
a verified notice of revocation, copy furnished
the Bureau, on the ground of disloyalty or such
other grounds as may be specified in the
constitution and bylaws of the federation,
national union or workers’ association.
The revocation shall divest the local/chapter of
its legal personality upon receipt of the notice by
the Bureau, unless in the meantime the
local/chapter has acquired independent
registration in accordance with these Rules.
Effect of Cancellation of Registration of
Federation or National Union on Locals/Chapter
The cancellation of registration of a federation or
national union shall operate to divest its
local/chapter of their status as legitimate labor
organizations, unless the locals/chapters are
covered by a duly registered collective
bargaining agreement.
MERGER AND CONSOLIDATION
Effect of merger or consolidation. – Where there
is a merger of labor organizations, the legal
existence of the absorbed labor organization(s)
ceases, while the legal existence of the absorbing
labor organization subsists. All the rights,
interests and obligations of the absorbed labor
organizations are transferred to the absorbing
organization.
Where there is consolidation, the legal existence
of the consolidating labor organizations shall
cease and a new labor organization is created.
The newly created labor organization shall
acquire all the rights, interests and obligations of
the consolidating labor organizations.
Consolidation usually occurs between two
unions that are approximately the same size,
whereas merger often involves a larger union
merging with a smaller union.
Why do unions merge?
They merge for reasons similar to those behind
corporate mergers.
First, a small union may merge with a larger
union in order to gain access to greater
resources and expertise.
Second, unions that have traditionally competed
with each other for members may merge in
order to eliminate inter-organizational conflicts.
Third, unions whose members’ skills have been
outmoded by technological and economic
changes may merge with a stronger union in
order to maintain job security and institutional
survival.
Notice of Merger/Consolidation of Labor
Organizations’; Where to File
Notice of Merger/Consolidation of labor
organizations; Where to file. - Notice of merger
or consolidation of independent labor unions,
chartered locals and workers' associations shall
be filed with and recorded by the Regional Office
that issued the certificate of
registration/certificate of creation of chartered
local of either the merging or consolidating labor
organization.
Notice of merger or consolidation of federations
or national unions shall be filed with and
recorded by the Bureau .
Requirements of Notice of
Merger/Consolidation
The notice of merger of labor organizations shall
be accompanied by the following documents:
(a) the minutes of merger convention or general
membership meeting(s) of all the merging labor
organizations, with the list of their respective
members who approved the same; and
(b) the amended constitution and by-laws and
minutes of its ratification, unless ratification
transpired in the merger convention, which fact
shall be indicated accordingly.
Certificate of Registration
The certificate of registration issued to merged
labor organizations shall bear the registration
number of one of the merging labor
organizations as agreed upon by the parties to
the merger.
The certificate of registration shall indicate the
following:
(a) the new name of the merged labor
organization;
(b) the fact that it is a merger of two or
more labor organizations;
(c) the name of the labor organizations that
were merged;
(d) its office or business address; and
(e) the date when each of the merging labor
organization.
CHANGE OF NAME
Notice of change of name of labor organizations;
Where to file. - The notice for change of name of
a registered labor organization shall be filed with
the Bureau or the Regional Office where the
concerned labor organization's certificate of
registration or certificate of creation of a
chartered local was issued.
Requirements for notice of change of name
The notice for change of name of a labor
organization shall be accompanied by the
following documents:
(a) proof of approval or ratification of
change of name; and
(b) the amended constitution and by-laws.

Effect of Change of Name
The change of name of a labor organization shall
not affect its legal personality. All rights and
obligations of a labor organization under its old
name shall continue to be exercised by the labor
organization under its new name.
CANCELLATION OF REGISTRATION; GROUNDS
While registration is the act that converts a labor
organization to a legitimate labor organization,
cancellation is the government act that [divests]
it of that status. It thereby reverts to its character
prior to the registration. Although it does not
cease to exist or become an unlawful
organization, its juridical personality as well as its
statutory rights and privileges [are] suspended.
It loses entitlement to the rights enumerated in
Article 248 of the Labor Code.
It cannot demand recognition by or bargaining
with the employer, cannot file a petition for
certification election, and cannot strike.
1 "Cabo" refers to a person or group or persons
or to a labor group which, in the guise of a labor
organization, 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.
2 Administrative Cancellation; the “reportorial
requirements”
Section 1. Reporting requirements. - It shall be
the duty of every legitimate labor unions and
workers associations to submit to the Regional
Office or the Bureau which issued its certificate
of registration or certificate of creation of
chartered local, as the case may be, two (2)
copies of each of the following documents:
(a) any amendment to its constitution and by-
laws and the minutes of adoption or ratification
of such amendments, within thirty (30) days
from its adoption or ratification;
(b) annual financial reports within thirty (30)
days after the close of each fiscal year or
calendar year
(c) updated list of newly-elected officers,
together with the appointive officers or agents
who are entrusted with the handling of funds,
within thirty (30) days after each regular or
special election of officers, or from the
occurrence of any change in the officers of
agents of the labor organization or workers
association;
(d) updated list of individual members of
chartered locals, independent unions and
workers' associations within thirty (30) days
after the close of each fiscal year; and
(e) updated list of its chartered locals and
affiliates or member organizations, collective
bargaining agreements executed and their
effectivity period, in the case of federations or
national unions, within thirty (30) days after the
close of each fiscal year, as well as the updated
list of their authorized representatives, agents or
signatories in the different regions of the
country.
As understood in these Rules, the fiscal year of a
labor organization shall coincide with the
calendar year, unless a different period is
prescribed in the constitution and bylaws.
Failure of the labor organization to submit the
reports mentioned above for five (5) consecutive
years authorizes the Bureau to institute
cancellation proceedings upon its own initiative
or upon complaint by any party-in-interest.
Chapter II
RIGHTS AND CONDITIONS OF MEMBERSHIP
Art. 241. Rights and conditions of membership in
a labor organization. The following are the rights
and conditions of membership in a labor
organization:
a. No arbitrary or excessive initiation fees shall
be required of the members of a legitimate labor
organization nor shall arbitrary, excessive or
oppressive fine and forfeiture be imposed;
b. The members shall be entitled to full and
detailed reports from their officers and
representatives of all financial transactions as
provided for in the constitution and by-laws of
the organization;
c. The members shall directly elect their officers,
including those of the national union or
federation, to which they or their union is
affiliated, by secret ballot at intervals of five (5)
years. No qualification requirements for
candidacy to any position shall be imposed other
than membership in good standing in subject
labor organization. The secretary or any other
responsible union officer shall furnish the
Secretary of Labor and Employment with a list of
the newly-elected officers, together with the
appointive officers or agents who are entrusted
with the handling of funds, within thirty (30)
calendar days after the election of officers or
from the occurrence of any change in the list of
officers of the labor organization; (As amended
by Section 16, Republic Act No. 6715, March 21,
1989)
d. The members shall determine by secret ballot,
after due deliberation, any question of major
policy affecting the entire membership of the
organization, unless the nature of the
organization or force majeure renders such
secret ballot impractical, in which case, the
board of directors of the organization may make
the decision in behalf of the general
membership;
e. No labor organization shall knowingly admit as
members or continue in membership any
individual who belongs to a subversive
organization or who is engaged directly or
indirectly in any subversive activity;
f. No person who has been convicted of a crime
involving moral turpitude shall be eligible for
election as a union officer or for appointment to
any position in the union;
g. No officer, agent or member of a labor
organization shall collect any fees, dues, or other
contributions in its behalf or make any
disbursement of its money or funds unless he is
duly authorized pursuant to its constitution and
by-laws;
h. Every payment of fees, dues or other
contributions by a member shall be evidenced by
a receipt signed by the officer or agent making
the collection and entered into the record of the
organization to be kept and maintained for the
purpose;
i. The funds of the organization shall not be
applied for any purpose or object other than
those expressly provided by its constitution and
by-laws or those expressly authorized by written
resolution adopted by the majority of the
members at a general meeting duly called for the
purpose;
j. Every income or revenue of the organization
shall be evidenced by a record showing its
source, and every expenditure of its funds shall
be evidenced by a receipt from the person to
whom the payment is made, which shall state
the date, place and purpose of such payment.
Such record or receipt shall form part of the
financial records of the organization.
Any action involving the funds of the
organization shall prescribe after three (3) years
from the date of submission of the annual
financial report to the Department of Labor and
Employment or from the date the same should
have been submitted as required by law,
whichever comes earlier: Provided, That this
provision shall apply only to a legitimate labor
organization which has submitted the financial
report requirements under this Code: Provided,
further, that failure of any labor organization to
comply with the periodic financial reports
required by law and such rules and regulations
promulgated thereunder six (6) months after the
effectivity of this Act shall automatically result in
the cancellation of union registration of such
labor organization; (As amended by Section 16,
Republic Act No. 6715, March 21, 1989)
k. The officers of any labor organization shall not
be paid any compensation other than the
salaries and expenses due to their positions as
specifically provided for in its constitution and
by-laws, or in a written resolution duly
authorized by a majority of all
the members at a general membership meeting
duly called for the purpose. The minutes of the
meeting and the list of participants and ballots
cast shall be subject to inspection by the
Secretary of Labor or his duly authorized
representatives. Any irregularities in the
approval of the resolutions shall be a ground for
impeachment or expulsion from the
organization;
l. The treasurer of any labor organization and
every officer thereof who is responsible for the
account of such organization or for the
collection, management, disbursement, custody
or control of the funds, moneys and other
properties of the organization, shall render to
the organization and to its members atrue and
correct account of all moneys received and paid
by him since he assumed office or since the last
day on which he rendered such account, and of
all bonds, securities and other properties of the
organization entrusted to his custody or under
his control. The rendering of such account shall
be made:
1. At least once a year within thirty (30) days
after the close of its fiscal year;
2. At such other times as may be required by a
resolution of the majority of the members of the
organization; and
3. Upon vacating his office. The account shall be
duly audited and verified by affidavit and a copy
thereof shall be furnished the Secretary of Labor.
m. The books of accounts and other records of
the financial activities of any labor organization
shall be open to inspection by any officer or
member thereof during office hours;
n. No special assessment or other extraordinary
fees may be levied upon the members of a labor
organization unless authorized by a written
resolution of a majority of all the members in a
general membership meeting duly called for the
purpose. The secretary of the organization shall
record the minutes of the meeting including the
list of all members present, the votes cast, the
purpose of the special assessment or fees and
the recipient of such assessment or fees. The
record shall be attested to by the president.
o. Other than for mandatory activities under the
Code, no special assessments, attorney’s fees,
negotiation fees or any other extraordinary fees
may be checked off from any amount due to an
employee without an individual written
authorization duly signed by the employee. The
authorization should specifically state the
amount, purpose and beneficiary of the
deduction; and
p. It shall be the duty of any labor organization
and its officers to inform its members on the
provisions of its constitution and by-laws,
collective bargaining agreement, the prevailing
labor relations system and all their rights and
obligations under existing labor laws.
For this purpose, registered labor organizations
may assess reasonable dues to finance labor
relations seminars and other labor education
activities.
Any violation of the above rights and conditions
of membership shall be a ground for cancellation
of union registration or expulsion of officers
from office, whichever is appropriate. At least
thirty percent (30%) of the members of a union
or any member or
members specially concerned may report such
violation to the Bureau. The Bureau shall have
the power to hear and decide any reported
violation to mete the appropriate penalty.
Criminal and civil liabilities arising from
violations of above rights and conditions of
membership shall continue to be under the
jurisdiction of ordinary courts.
DEMOCRATIZATION OF UNIONS
As unionism’s aim is to install industrial
democracy, the unions themselves must be
democratic. This is a rationale behind Article
247.
To democratize the unions, Article 247 requires
that the union officers be elected directly by the
members through secret ballot and that the
major policy decisions, as a rule, be made by the
union members, again, by secret ballot. As in a
republic where sovereignty resides in the
people, the members of the union are the
keepers and dispensers of authority. The
governing power is the members, not the
officers.
RIGHTS OF UNION MEMBERS
The rights and conditions of membership laid
down in Art. 247 may be summarized as follows:
(1) Political right – the member’s right to vote
and be voted for, subject to lawful provisions on
qualifications and disqualifications.
(2) Deliberative and decision-making right – the
member’s right to participate in deliberations on
major policy questions and decide them by
secret ballot.
(3) Rights over money matters – the member’s
right against excessive fees; the right against
unauthorized collection of contributions or
unauthorized disbursements; the right to
require adequate records of income and
expenses and the right of access to financial
records; the right to vote on officers’
compensation; the right to vote on proposed
special assessments and be deducted a special
assessment only with the member’s written
authorization.
(4) Right to Information – the member’s right to
be informed about the organization’s
constitution and by-laws and the collective
bargaining agreement and about labor laws.
Although not so denominated, Article 247 of the
Labor Code carries the character of a bill of rights
of union members.
ELECTION OF UNION OFFICERS
The officers of the union are elected by the
members in secret ballot voting. The election
takes place at intervals of five years which is the
term of office of the union officers including
those of a national union,
federation, or trade union center.
Eligibility of Voters
Only members of the union can take part in the
election of union officers.
Member in good standing is any person who has
fulfilled the requirements for membership in the
union and who has neither voluntarily
withdrawn from membership nor been expelled
or suspended from membership after
appropriate proceedings consistent with the
lawful provisions of the union’s constitution and
by-laws.
A labor organization may prescribe reasonable
rules and regulations with respect to voting
eligibility.
independently registered union, affiliate, local or
chapter of a labor federation or national union
operates shall henceforth be elected or
appointed as an officer of such union, affiliate,
local or chapter.
In short, one should be employed in the
company to qualify as officer of a union in that
company.
Disqualification of Union Officers
"Moral turpitude" has been defines as an act of
baseness, vileness, or depravity in the private
and social duties which a man owes his fellow
men, or to society in general, contrary to the
accepted and customary rule of right and duty
between man and man or conduct contrary to
justice, honesty, modesty, or good morals.
ACTION AGAINST UNION OFFICERS

A union officer, after his election, may not be

A labor organization may condition the exercise
expelled from the union for past malfeasance or
of the right to vote on the payment of dues, since
misfeasance. To do so would nullify the choice
paying dues is a basic obligation of membership.
made by the union members.
However, this rule is subject to two qualifications
in that (a) any rule denying dues-delinquent The remedy against erring union officers is not
members the right to vote must be applied referendum but union expulsion, i.e., to expel
uniformly; and (b) members must be afforded a them from the Union.
reasonable opportunity to pay dues, including a
It is the better part of conventional or pragmatic
grace period during which dues may be paid
solutions in cases of this nature, absent
without any loss of rights.
overriding considerations to the contrary, to
respect the will of the majority of the workers
who voted in the elections. Although decreed
Submission of the employees names with the
under a different setting, it is apropos to recall
BLR as qualified members of the union is not a
the ruling that where the people have elected a
condition sine qua non to enable said members
man to office, it must be assumed that they did
to vote in the election of union's officers.
this with knowledge of his life and character, and
Union Officers Must Be an Employee that they disregarded or forgave his faults or
misconduct, if he had been guilty of any.
No person who is not an employee or worker of
the company or establishment where an
RELIEF WITHIN THE UNION
Generally, redress must first be sought within
the union itself in accordance with its
constitution and by-laws.
If intra-union remedies have failed to correct any
violations of the internal labor organization
procedures, a case can be filed with the Bureau
of Labor Relations, which is authorized to hear
and decide cases of this nature.
Exceptions
Where exhaustion of remedies within the union
itself would practically amount to a denial of
justice, or would be illusory or vain, it will not be
insisted upon, particularly where property rights
of the members are involved, as a condition to
the right to invoke the aid of a court.
CHECK-OFF AND ASSESSMENTS
A check-off is a method of deducting from an
employee’s pay at prescribed period, the
amounts due the union for fees, fines, or
assessments.
Assessments, like dues, may also be checked off.
Dues are defined as payments to meet the
union’s general and current obligations. The
payment must be regular, periodic, and uniform.
Payments used for a special purpose, especially
if required only for a limited time, are regarded
as assessment.
Chapter III
RIGHTS OF LEGITIMATE LABOR
ORGANIZATIONS
Art. 248. Rights of legitimate labor organizations.
A legitimate labor organization shall have the
right:
a. To act as the representative of its
members for the purpose of collective
bargaining;
b. To be certified as the exclusive
representative of all the employees in an
appropriate bargaining unit for purposes
of collective bargaining;
c. To be furnished by the employer, upon
written request, with its annual audited
financial statements, including the
balance sheet and the profit and loss
statement, within thirty (30) calendar
days from the date of receipt of the
request, after the union has been duly
recognized by the employer or certified
as the sole and exclusive bargaining
representative of the employees in the
bargaining unit, or within sixty (60)
calendar days before the expiration of
the existing collective bargaining
agreement, or during the collective
bargaining negotiation;
d. To own property, real or personal, for
the use and benefit of the labor
organization and its members;
e. To sue and be sued in its registered
name; and
f. To undertake all other activities
designed to benefit the organization and
its members, including cooperative,
housing, welfare and other projects not
contrary to law.
 Failure to comply with the above requirements
shall not be a ground for cancellation of union
Notwithstanding any provision of a general or
registration but shall subject the erring officers
special law to the contrary, the income and the
or members to suspension, expulsion from
properties of legitimate labor organizations,
membership, or any appropriate penalty. (As
including grants, endowments, gifts, donations
amended by Republic Act No. 9481, May 25,
and contributions they may receive from
2007)
fraternal and similar organizations, local or
foreign, which are actually, directly and
exclusively used for their lawful purposes, shall
be free from taxes, duties and other
assessments. The exemptions provided herein TITLE V
may be withdrawn only by a special law
expressly repealing this provision. COVERAGE

(As amended by Section 17, Republic Act No.

6715, Extent of the right to self organization
March 21, 1989)

A: It includes the right:

Art. 248-A. Reportorial Requirements. - The 1. To form, join and assist labor
following are documents required to be organizations for the purpose of
submitted to the Bureau by the legitimate labor collective bargaining (CB) through
organization concerned: representatives of their own choosing

(a) Its constitution and by-laws, or

amendments thereto, the minutes of
ratification, and the list of members
who took part in the ratification of the
constitution and by-laws within thirty
(30) days from adoption or ratification
of the constitution and by-law or
amendments thereto;
2. To engage in lawful and concerted
activities for the purpose of CB or for
their mutual aid and protection.
Persons/Ee’s eligible to join a labor
organization for purposes of CB

(b) Its list of officers, minutes of the
election of officers, and list of voters
within thirty (30) days from election;
(c) Its annual financial report within thirty
(30) days after the close of every fiscal
year; and
(d) Its list of members at least once a year
or whenever required by the Bureau.
The entities covered are all persons employed in:
1. Commercial industrial, and agricultural
enterprises;
2. In religious, charitable or medical or
educational institutions whether operating for
profit or not.
Persons/Ee’s eligible to join a labor
organization for mutual aid and protection
The following enjoy the right to self organization
for mutual aid and protection:
1. Ambulant workers
2. Intermittent workers
3. Itinerant workers
4. Self‐employed people
5. Rural workers
6. Those without and definite Er’s.
Persons/Ee’s not granted the right to self
organization:
1. High level or Managerial Government
2. Ee’s of International organizations with
immunities.
3. Managerial Employees
4. Members of the AFP including the police
officers, policemen, firemen, and jail
guards
5. Confidential Employees
6. Employees of cooperatives who are its
members (However they may form
worker’s Association)
7. Non employees
8. Gov’t Ee’s, including GOCC’s with
original charters
9. Aliens without a valid working permit or
aliens with working permits but are
nationals of a country which do not
allow Filipinos to exercise their right of
self organization and to join or assist
labor organizations
Art. 250. Right of employees in the public
service. – Employees of government
corporations established under the Corporation
Code shall have the right to organize and to
bargain collectively with their respective
employers. All other employees in the civil
service shall have the right to form associations
for purposes not contrary to law.
Matters proper for collective negotiations in
GOCCs with original charters
1. Schedule of vacation and other leaves
2. Work assignment of pregnant women
3. Personnel growth and development
4. Communication system
5. Provision for protection and safety
6. Provision for facilities for handicapped
personnel
7. Provision for first aid medical services
and supplies
8. Physical fitness program
9. Annual physical/medical examination
10. Recreational. Social, athletic and cultural
activities and facilities
Matters not proper for collective negotiations
in GOCCs with original charters
1. Terms and conditions of employment
that are fixed by law
2. Matters that require appropriation of
funds
3. Matters that involve exercise of
management prerogatives
Meaning of managerial employees
- One who is vested with powers or
prerogatives to lay down and execute
management policies and/or to hire,
transfer, suspend, lay off, recall,
discharge, assign or discipline
employees.
Meaning of supervisory employees
- One who is in the interest of the
employer, effectively recommends
managerial actions if the exercise of
such authority is not merely routinary or
clerical in nature but requires the use of
independent judgment
Types of Managerial employees
1. Top managers
2. Middle managers
3. First-line managers
Title VI – UNFAIR LABOR PRATICES
Chapter 1 - Concept
Art. 247 – Concept of Unfair Labor Practice and
Procedure for Prosecution Thereof. Unfair labor
practices violate the constitutional right of
workers and employees to self-organization,
are inimical to the legitimate interests of both
labor and management, including their right to
bargain collectively and otherwise deal with
each other in an atmosphere of freedom and
mutual respect, disrupt industrial peace and
hinder the promotion of healthy and stable
labor-management relations.
Consequently, unfair labor practices
are not only violations of the civil rights of both
labor and management but are also criminal
offenses against the State which shall be
subject to prosecution and punishment as
herein provided.
Subject to the exercise by the President
or by the Secretary of Labor and Employment of
the powers vested in them by Articles 263 and
264 of this Code, the civil aspects of all cases
involving unfair labor practices, which may
include claims for actual, moral, exemplary and
other forms of damages, attorney’s fees and
other affirmative relief, shall be under the
jurisdiction of the Labor Arbiters. The Labor
Arbiters shall give utmost priority to the
hearing and resolution of all cases involving
unfair labor practices. They shall resolve such
cases within thirty (30) calendar days from the
time they are submitted for decision.
Recovery of civil liability in the
administrative proceedings shall bar recovery
under the Civil Code.
No criminal prosecution under this Title
may be instituted without a final judgment
finding that an unfair labor practice was
committed, having been first obtained in the
preceding paragraph. During the pendency of
such administrative proceeding, the running
period of prescription of the criminal offense
herein penalized shall be considered
interrupted: Provided, however, that the final
judgment in the administrative proceeding shall
not be binding in the criminal case nor be
considered as evidence of guilt but merely as
proof of compliance of the requirements
therein set forth.
 Unfair Labor Practice is an act of an
employer or union or their agents which
violates the rights of workers to self-
organization.
 2 kinds of ULP: (1) employer ULP; and (2)
union or Agent/s ULP
 Concept: Right of workers to self-
organization which includes:
a. To form a union:
b. To take part in its formation;
c. To join or assist a union of their own
choosing for purposes of;
d. Collective bargaining and
negotiations; and
e. To engage in concerted activities for
mutual help and protection.
 Nature:
a. inimical to the legitimate interests of
both labor and management,
including their right to bargain
collectively and otherwise deal with
each other in an atmosphere of
freedom and mutual respect;
b. disrupt industrial peace;
c. hinder the promotion of a healthy
and stable labor management
relations;
d. violation of civil rights of both labor
and management;
e. criminal offense
 Purpose: Protect the right to self-
organization and/or collective
bargaining
 Substantial evidence must be presented
to support its allegations.
 Employer-employee relationship
required; exception yellow dog contract
 The Civil aspect may include liability for
damages (actual, moral, exemplary and
other forms of damages) and may be
passed upon by the labor arbiter.
 Prosecution of ULP as a criminal offense
can be initiated only after the finality of
judgment in the labor arbiter.
 But judgment in the labor case will not
serve as evidence of ULP in the criminal
case.
 Shall be filed within one year from the
accrual of such unfair labor practice,
otherwise, it shall be barred.
Chapter II – UNFAIR LABOR PRACTICES OF
EMPLOYERS
Art. 248 – Unfair Labor Practices of Employers.
It shall be unlawful for an employer to commit
any of the following unfair labor practices:
a. To interfere with, restrain or
coerce employees in the
exercise of their right to self-
organization;
b. To require as a condition of
employment that a person or
 an employee shall not join a
labor organization or shall
withdraw from one to which he
belongs;
c. To contract out services or
functions being performed by
union members when such will
interfere with, restrain or
coerce employees in the
exercise of their right to self-
organization;
d. To initiate, dominate, assist or
otherwise interfere with the
formation or administration of
any labor organization,
including the giving of financial
or other support to it or its
organizers or supporters;
e. To discriminate in regard to
wages, hours of work and other
terms and conditions of
employment in order to
encourage or discourage
membership in any labor
organization. Nothing in this
Code or in any other law shall
stop the parties from requiring
membership in a recognized
collective bargaining agent as a
condition for employment,
except those employees who
are already members of
another union at the time of
the signing of the collective
bargaining agreement.
Employees of an appropriate
bargaining unit who are not
members of the recognized
collective bargaining agent may
be assessed a reasonable fee
equivalent to the dues and
other fees paid by members of
the recognized collective
bargaining agent, if such non-
union members accept the
benefits under the collective
bargaining agreement:
Provided, that the individual
authorization required under
Article 242, paragraph (o) of
this Code shall not apply to the
non-members of the
recognized collective
bargaining agent;
f. To dismiss, discharge or
otherwise prejudice or
discriminate against an
employee for having given or
being about to give testimony
under this Code;
g. T violate the duty to bargain
collectively as prescribed by
this Code;
h. To pay negotiation or
attorney’s fees to the union or
its officers or agents as part of
the settlement of any issue in
collective bargaining or any
other dispute; or
i. To violate a collective
bargaining agreement.
The provisions of the preceding
paragraph nothwithstanding, only the officers
and agents of corporations, associations or
partnerships who have actually participated in,
authorized or ratified unfair labor practices
shall be held criminally liable.
a. Interference - act of employer to
interfere with, restrain or coerce
employees in the exercise of their right
to self-organization.
 Acts of interference:
 1. Accepting an offer by 1. The circumstances under which they were
the majority of the uttered
employees to abandon
2. The history of the particular Employer’s labor
their union in return for
relations or anti‐union bias
a wage increase
3. Their connection with an established collateral
2. Accosting strikers on a
plan of coercion or interference.
picketline in order to
persuade them to cease  Lockout means any temporary
picketing and abandon refusal of an Employer to furnish
the strike work as a result of an industrial
or labor dispute. It constitutes
3. Actively assisting one of
ULP if the purpose was to
the rival unions
interfere with the Employees
4. Asking employees about exercise of their rights.
their union membership
b. Yellow dog contract –It requires as a
or activities
condition of employment that a person
5. Attacking union or an employee shall not join a labor
organizers in the organization or shall withdraw from one
presence of employees to which he belongs.
6. Attempting to break a  It is null and void because: (1) it
strike by meeting with is contrary to public policy; (2) it
individual employees is entered without
consideration of employees
7. Blacklisting or
waiving their right to self-
threatening to blacklist
organization; and (3) employees
employees
are coerced to sign the contract
8. Espionage or at their disadvantage.
surveillance of union
 This may be committed in the
members
absence of an employer-
 Totality of conduct doctrine - employee relationship.
the culpability of Employer’s
 3 Usual Provisions under the
remarks is to be evaluated not
Yellow Dog Contract:
only on the basis of their
implications, but against the 1. A
background of and in representation
conjunction with collateral by the
circumstances. It includes employee that
expressions of opinion by an he is not a
Employer, though innocent in member of a
themselves, frequently were labor union
held to be ULP because of:
 2. A promise by d. Company unionism – it is any labor
the employee organization whose formation, function
not to join a or administration has been assisted by
labor union any act defined as ULP. It is considered
ULP because the officers will be
3. A promise by
beholden to the Employers and they will
the employee
not look after the interest of whom they
that, upon
represent.
joining a labor
union, he will  Forms of Company Unionism:
quit his
1. Initiation of the
employment
company union idea by:
c. Contracting out - is to contract out Outright formation by
services or functions being performed by Employer or his
union members when such will interfere representatives;
with, restrain or coerce Employees in the Employee formation on
exercise of their rights to self‐ outright demand or
organization. influence by Employer
and Managerially
 Contracting out is not ULP per
motivated formation by
se. An employer is not guilty of
Employees.
an unfair labor practice in
contracting work out for 2. Financial support to the
business reasons such as decline union by: Employer
in business, the inadequacy of defrays union expenses;
his equipment, or the need to Pays atty’s fees to the
reduce the cost, even if the attorney who drafted
employer’s estimate of his cost the Constitution or by‐
is based on a projected increase laws of the union.
attributable to unionization, as
3. Employer
such are valid exercise of
encouragement
management prerogatives.
assistance ‐
 Run‐away shop is an industrial Immediately granting of
plant moved by its owners from exclusive recognition as
one location to another to bargaining agent
escape union labor regulations without determining
or state laws or to discriminate whether the union
against employees at the old represents the majority
plant because of their union of the employees.
activities.
4. Supervisory assistance‐
 Resorting to runaway shop is Soliciting membership,
ULP. permitting union
activities during work
 time or coercing 1. Bargaining in bad faith -
Employees to join the refusal to make a
union by threats of counter-proposal to the
dismissal or union’s proposal for
CBA negotiation on the
e. Act of discrimination – General Rule:
excuse that it felt the
Discriminate with regard to wages,
union no longer
hours of work and other terms and
represented the
conditions of employment in order to
workers; Failing to
encourage or discourage membership
comply with the
with any labor organization.
mandatory obligation
 Exception: Union Security to submit a reply to the
Clause union’s proposals; and
Violated its duty to
 Exception to exception: Those bargain collectively
employees who are already
members of another union at 2. Refusal to bargaining –
the time of the signing of the implied refusal
collective bargaining 3. Individual bargaining -
agreement. situation where the
f. Violation of duty to bargain – The act of employer bargains with
violating the duty to bargain collectively the union through the
prescribed in the labor code. employees instead of
the employees through
 The forms of ULP in bargaining: the union
1. Failure or refusal to meet and convene 4. Blue sky bargaining -
2. Evading the mandatory subject of bargaining unrealistic and
unreasonable demands
3. Bad faith bargaining, including failure to in negotiations by
execute the CBA if requested either or both labor and
management, where
4. Gross violation of the CBA
neither concedes
 A company’s refusal to make anything and demands
counter‐proposal, if considered the impossible
in relation to the entire
5. Surface bargaining -
bargaining process, may
going through the
indicate BF and this is especially
motions of negotiating,
true where the union’s request
without any real intent
for a counter proposal is left
to reach an agreement
unanswered.
g. Discrimination because of testimony -
 Examples of ULP in collective
an employer dismiss, discharge or
bargaining:
otherwise prejudice or discriminate
 against an employee for having given or performed or not to be performed, including
being about to give testimony the demand for fee for union negotiations;

h. Paid negotiation - Act of employer to e. To ask for or accept negotiations or atty’s

pay negotiation or attorney’s fees to the fees from Employers as part of the settlement
union or its officers or agents as part of of any issue in collective bargaining (CB) or any
the settlement of an issue. other dispute;

i. Gross violation of CBA – Violations of f. To violate a Collective Bargaining Agreement

collective bargaining agreements,
 Interfere is not included in Art.
except flagrant and/or malicious refusal
249 simply because any act of a
to comply with its economic provisions,
labor organization amounts to
shall not be considered unfair labor
interference to the right of self-
practice and shall not be strikeable.
organization.
Chapter III – UNFAIR LABOR PRACTICES OF
LABOR ORGANIZATIONS  The following acts constitute
illegal restraint and coercion:
Art 249 – Unfair Labor Practices of Labor
Organizations. It shall be unfair labor practice 1. Preventing employees
for a labor organization, its officers, agents or who do not desire to
representatives: join a union strike for
going to and returning
a. To restrain or coerce Employees in from work during the
the exercise of their rights to self‐organization. strike;
However, a Labor Organization shall have the
right to prescribe its own rules with respect to 2. Pickets threatening
the acquisition or retention of membership; employees with physical
violence who desire to
b. To cause or attempt to cause an Employer to enter the plant;
discriminate against an Employee, including
discrimination against an Employee with 3. Union agent pushing a
respect to whom membership in such non-striker against the
organization has been denied or to terminate wall and threatening
an Employee on any ground other than the him with bodily harm;
usual terms and conditions under which and
membership or continuation of membership is 4. Preventing non-strikers
made available to other members; ingress and threatening
c. To violate the duty, or refuse to bargain them with physical
collectively with the Er, provided it is the harm
representative of the Employees;  General rule: it is ULP for a labor
d. To cause or attempt to cause an Employer to organization to cause an
pay or deliver or agree to pay or deliver any employer to discriminate
money or other things of value, in the nature of against an employee
an exaction, for services which are not  Exception: provisions of a valid
union security clause and other
 company policies applicable to
all employees.
 Featherbedding or “make-work”
by the union is the practice of
the union asking [exacting] for
money or other things of value
from the employer in return for
services which are not
performed or are not to be
performed
 Violations of collective
bargaining agreements, except
flagrant and/or malicious refusal
to comply with its economic
provisions, shall not be
considered unfair labor practice
and shall not be strikeable.
 Sweetheart doctrine is when a
Labor Organization asks for or
accepts negotiations or atty’s
fees from employers as part of
the settlement of any issue in CB
or any other dispute.
 Blue-sky bargaining is defined as
making exaggerated or
unreasonable proposals. If the
union requires exaggerated or
unreasonable economic
demands, then it is guilty of ULP.
 Boulwareism occurs when
employer directly bargains with
the employee disregarding the
union; the aim was to deal with
the labor union through
Employees rather than with the
Employees thru the union.
Employer submits its proposals
and adopts a take‐it‐or‐leave‐it
stand.
Forms of ULP in bargaining:
Failure to meet and convene
Evading the mandatory subjects of bargaining.
Bad faith in bargaining (boulwareism), including
failure to execute the CBA if requested
Gross violation of the CBA
Surface Bargaining
Blue sky bargaining
Violations of CBA, except those which are gross
in character, shall no longer be treated as ULP
but a grievance under CBA
Title VII – COLLECTIVE BARGAINING AND
ADMINISTRATION OF AGREEMENTS
Art. 250. Procedure in Collective Bargaining.
The following procedures shall be observed in
collective bargaining:
a. When a party desires to negotiate
an agreement, it shall serve a
written notice upon the other party
with a statement of its proposals.
The other party shall make a reply
thereto not later than ten (10)
calendar days from receipt of such
notice;
b. Should differences arise on the
basis of such notice and reply,
either party may request for a
conference which shall begin not
later than ten days (10) calendar
days from the of request.
c. If the dispute le not settled, the
Board shall intervene upon request
of either or both parties or at its
own initiative and immediately call
the parties to conciliation meetings.
The Board shall have the power to
issue subpoenas requiring the
attendance of the parties to such
 meetings. It shall be the duty of the 3. Contract of relative equality
parties to participate fully and
4. Agency of participatory
promptly in the conciliation
democracy
meetings the Board may call;
 Standards followed in collective
d. During the conciliation proceedings
bargaining:
in the Board, the parties are
prohibited from doing any act 1. The obligation to bargain
which may disrupt or impede the collectively is mutual
early settlement of the disputes;
and 2. The parties are required to
meet and confer promptly
e. The Board shall exert all efforts to and expeditiously and in
settle disputes amicably and good faith.
encourage the parties to submit
their case to a voluntary arbitrator. 3. Parties are required in good
faith to negotiate an
agreement.
 Collective bargaining agreement refers 4. They must execute a
to the negotiated contract between a contract incorporating the
legitimate labor organization and the agreement reached by the
employer concerning wages, hours of parties.
work and all other terms and conditions
of employment in a bargaining unit, 5. Does not compel any party
including mandatory provisions for to agree to a proposal or to
grievances and arbitration machineries. make any concession.

 Nature and purpose: Industrial  Stages in Collective Bargaining:

democracy at work 1. Preliminary process
 Collective bargaining denotes 2. Negotiation – if not settled,
negotiations looking forward to a NCMB intervenes and exert
collective agreement. all efforts to settle dispute
 It is the most effective machinery to 3. Execution
safeguard against the evil schemes of
employers on terms and conditions of 4. Publication
employment as it equalize the 5. Ratification
bargaining power of employer and
employees. 6. Registration

 Charactistics of collective bargaining 7. Administration

1. Continuing legal obligation 8. Interpretation and

enforcement
2. Contract of reasonable
benefits Art. 251 – Duty to bargain collectively in the
absence of collective bargaining agreements. In
the absence of an agreement or other voluntary
arrangement providing for a more expeditious
manner of collective bargaining, it shall be the
duty of the employer and the representatives of
the employees to bargain collectively in
accordance with the is s of this Code.
Art. 252 – Meaning of duty to bargain
collectively. The duty to bargain collectively
means the performance of a mutual obligation
to meet and convene promptly and
expeditiously in good faith for the purpose of
negotiating an agreement with a to wages,
hours of work and all other terms and
conditions of employment including proposals
for adjusting any grievances or questions
arising under such agreements if requested by
either party to agree to a proposal or to make
any concession.
 The State shall guarantee the rights of
workers to collective bargaining and
negotiations. (Sec 3, Art 13 1987
Constitution)
 The State shall promote the principle of
shared responsibilities 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. (Sec 3, Art 13
1987 Constitution)
 It is the policy of the state to promote
and emphasize the primacy of free
collective bargaining and negotiations,
including voluntary arbitration,
mediation and conciliation, as modes of
setting labor or industrial disputes. (Art
211, LC)
 The relations between capital and labor
are not merely contractual. They are so
impressed with public interest that labor
contracts must yield to the common
good. (Art 1700, New Civil Code)
 Employer-employee relationship is a
requirement.
 The duty to bargain only arise after the
union requests the Employer to bargain.
If there is no demand, the Employer
cannot be in default.
Art. 253 - Duty to bargain collectively when
there exist a collective bargaining agreement.
When there exist a collective bargaining
agreement, the duty to bargain collectively
shall also mean that neither party shall
terminate nor modify such agreement during its
lifetime. However, either party can serve a
written notice to terminate or modify the
agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both
parties to keep the status quo and to continue
in full force and effect the terms and conditions
of the existing agreement during the 60-day
period and/or until a new agreement is reached
by the parties.
 The duty to bargain collectively shall also
mean that neither party shall terminate
nor modify such agreement during its
lifetime. Exception: during the freedom
period (60 days prior to expiration of
CBA) where either party may serve a
written notice to terminate or modify
the agreement.
 The existing CBA continues in full force
and effect during the freedom period
and/or until a new agreement is reached
by the parties.
Art. 253-A – Terms of a collective bargaining
agreement. Any collective bargaining
agreement that the parties may enter into shall,
insofar as the representation aspect is
concerned, be for a term of five (5) years. No
petition questioning the majority status of the
incumbent bargaining agent shall be effect. Only provisions embodied in the
entertained and no certification election shall CBA should be so interpreted and
be conducted by the Department of Labor and complied with.
Employment outside of the sixty-day period
 The exclusive bargaining agent has the
immediately before the date of expiry of such
right to be furnished by the employer,
five-year term of the collective bargaining
upon written request, with its annual
agreement. All other provisions of the
audited financial statements, including
Collective Bargaining Agreement shall be
the balance sheet and the profit and loss
renegotiated not later than three (3) years after
statement.
its execution. Any agreement on such other
provisions of the Collective Bargaining  Procedure in Collective Bargaining:
Agreement entered into within six (6) months
from the date of expiry of the term of such 1. Written notice and
other provisions as fixed in such Collective statement of proposals
Bargaining Agreement, shall retroact to the day 2. Reply
immediately following such date. If any such
agreement is entered into beyond six months, 3. Conference
the parties shall agree on the duration of
4. If not settled, Board
retroactivity thereof. In case of a deadlock in
intervention and
the renegotiation of the collective bargaining
conciliation
agreement, the parties may exercise their rights
under this code. 5. Voluntary arbitration

 Lifespan of CBA is five (5) years as far as 6. Prohibition against

the representation aspect is concerned. disruptive acts

 Workers may renegotiate other
provisions of the CBA not later than
three (3) years.
 Representation aspect refers to the
identity and majority status of the union
that negotiated the CBA as the exclusive
bargaining agent of the appropriate
bargaining unit.
 Where there is a legitimate
representation issue, there is no duty to
bargain collectively on the part of the
Employer.
 Zipper clause - is a stipulation in a CBA
indicating that issues that could have
been negotiated upon but not contained
in the CBA cannot be raised for
negotiation when the CBA is already in
 With the execution of the CBA, Bad Faith
can no longer be imputed upon any of
the parties thereto. All provisions in the
CBA are supposed to have been jointly
and voluntarily incorporated therein by
the parties.
Limitations to bargain collectively:
Such duty does not compel any party to agree to
a proposal or to make any concession.
Parties cannot stipulate terms and conditions of
employment which are below the minimum
requirements prescribed by law.
Economic provisions of CBA:
Wages
Family planning
Effectivity of the agreement  Injunction is an order or a writ that
commands a person to do or not to do a
Other terms and conditions of employment
particular act. It may be a positive
Non-economic provisions of CBA: (mandatory) or a negative (prohibitory)
command.
Coverage of the bargaining unit
 GR: No court or entity shall
Union security clauses enjoin any picketing, strike or
Management prerogatives and/or lockout, or any labor dispute.
rights/responsibilities of employees  XPN:
Grievance machinery and voluntary arbitration
1. When prohibited or
No strike – no lock out provision unlawful acts are being
or about to be
Mandatory provisions of CBA committed that will
Grievance machinery cause grave or
irreparable damage to
Voluntary arbitration the complaining party.
Wages 2. On the ground of
national interest
Hours of work

Family planning 3. The Secretary of Labor

and Employment or the
Rates of pay NLRC may seek the
assistance of law
Mutual observance clause
enforcement agencies
Cases arising from the interpretation and to ensure compliance
implementation of CBA are handled or disposed with this provision as
through the grievance machinery and if not well as with such orders
resolved by the grievance machinery, through as he may issue to
voluntary arbitration. enforce the same

The “no strike‐no lockout” clause in the CBA  Requisites for injunction to issue:
applies only to economic strikes. It does not
a. actual or threatened
apply to ULP strikes. Hence, if the strike is
commission of a
founded on an unfair labor practice of the
prohibited or unlawful
employer, a strike declared by the union cannot
act OR requirement of
be considered a violation of the no strike clause.
performance of a
Art. 254 – Injunction prohibited. No temporary particular act in a labor
or permanent injunction or restraining order in dispute
any case involving or growing out of labor
b. (b) if unrestrained or
disputes shall be issued by any court or other
unperformed, the act
entity, except as otherwise provided in Articles
will cause grave or
218 and 264 of this Code.
irreparable damage to
 any party OR render
ineffectual any decision
in favor of such party
 An "innocent bystander," who seeks to
enjoin a labor strike, must satisfy the
court that aside from the grounds
specified in Rule 58 of the Rules of Court,
it is entirely different from, without any
connection whatsoever to, either party
to the dispute and, its interests are
totally foreign to the context thereof.
 Types of labor dispute:
a. Organizational or intra-
union disputes - Any
conflict between and
among union members,
grievances arising from
any violation of the
rights and conditions of
membership, violation
of or disagreement over
any provision of the
union’s constitution and
by‐laws, or disputes
from chartering or
affiliation of union.
b. Representation or inter-
union disputes - Any
conflict between and
among legitimate labor
unions involving
representation
questions for the
purposes of Collective
Bargaining or to any
other conflict or dispute
between legitimate
labor union
c. Interest or economic
disputes - they involve
questions on “what
should be included in
the CBA”. Strictly
speaking, the parties
may choose a voluntary
arbitrator to decide on
the terms and
conditions of
employment, but this is
impracticable because it
will be a value judgment
of the arbitrators and
not of the parties.
d. Rights disputes - They
are claims for violations
of a specific right arising
from a contract, i.e. CBA
or company policies.
 Entities or Persons authorized to issue
injunction or restraining order:
a. Labor Arbiters
b. NLRC or any division
c. BLR
d. President
e. Secretary
Art 254 – Exclusive Bargaining Representation
and Worker’s Participation in Policy and
Decision-Making. The labor organization
designated or selected by the majority of the
employees in an appropriate collective
bargaining unit shall be the exclusive
representative of the employees in such unit for
the purpose of collective bargaining. However,
an individual employee or group of employees
shall have the right at any time to present
grievances to their employer.
Any Provision of law to the
contrary notwithstanding, workers shall have
the right, subject to such rules and regulations
as the Secretary of Labor and Employment may
promulgate, to participate in policy and
decision-making processes of the
establishment where they are employed
insofar as said processes will directly affect
their rights, benefits and welfare. For the
purpose, workers and employers may form
labor-management councils: Provided, That the
representatives of the workers in such labor-
management councils shall be elected by at
least the majority of all employees in said
establishment.
 Doctrine of Union Monopoly. Once a
Union is chosen as exclusive bargaining
agent through voluntary recognition,
consent election, certification election,
or run-off election, can collectively
bargain with the management excluding
other competing unions.
 Four-way test in determining an
appropriate collective bargaining unit:
1. The Express will or desire of the
employee test (Globe Election
Doctrine)
2. Community or mutuality of
interests test
3. Prior collective bargaining
history test
4. Similarity of Employment status
test
 The Department shall promote the
formation of labor‐management
councils in organized and unorganized
establishments to enable the workers to
participate in policy and decision‐
making processes in the establishment,
insofar as said processes will directly
affect their rights, benefits and welfare,
except those which are covered by
collective bargaining agreements or are
traditional areas of bargaining.
 In organized establishments, the
workers’ representatives to the council
shall be nominated by the exclusive
bargaining representative. In
establishments where no legitimate
labor organization exists, the workers
representative shall be elected directly
by the employees at large.
 The extent of the worker’s right to
participate in policy and decision‐
making processes in a company refers
not only to formulation of corporate
programs and policies but also to
participation in grievance procedures
and voluntary modes of settling
disputes.
Art. 256 – Representation issue in Organized
Establishments. In organized establishments,
when a verified petition questioning the
majority status of the incumbent bargaining
agent is filed by any legitimate labor
organization including a national union or
federation which has already issued a charter
certificate to its local chapter participating in
the certification election or a local chapter
which has been issued a charter certificate by
the national union or federation before the
Department of Labor and Employment within
the sixty (60) day period before the expiration
of the collective bargaining agreement, the
Med-Arbiter shall automatically order an
election by secret ballot when the verified
petition is supported by the written consent of
at least twenty-five percent (25%) of all the
employees in the bargaining unit to ascertain
the will of the employees in the appropriate
bargaining unit. To have a valid election, at least
a majority of all eligible voters in the unit must
have cast their votes. The labor union receiving
the majority of the valid votes cast shall be
certified as the exclusive bargaining agent of all
the workers in the unit. When an election which
provides for three or more choices results in no
choice receiving a majority of the valid votes
cast, a run-off election shall be conducted
between the labor unions receiving the two
highest number of votes: Provided, That the
total number of votes for all contending unions
is at least fifty percent (50%) of the number of
votes cast. In cases where the petition was filed
by a national union or federation, it shall not be
required to disclose the names of the local
chapter’s officers and members.
At the expiration of the freedom
period, the employer shall continue to
recognize the majority status of the incumbent
bargaining agent where no petition for
certification election is filed.
 Certification election is the process of
determining through secret ballot, the
sole and exclusive bargaining agent of
the employees in an appropriate
bargaining unit, for purposes of
collective bargaining.
 A certification election is not litigation
but merely an investigation of a non‐
adversarial fact‐finding character in
which BLR plays a part of a disinterested
investigator seeking merely to ascertain
the desire of the employees as to the
matter of their representation.
 Double-majority rule, the majority of the
bargaining unit must have voted and the
winning union must have garnered
majority of the valid votes cast.
 The purpose of a certification election is
to determine the worker’s choice of:
1. Whether they want a union to
represent them for collective
bargaining or if they want no union
to represent them at all.
2. 2. And if they choose to have a union
to represent them, they will choose
which among the contending unions
will be the sole and exclusive
bargaining representative of the
employees in the appropriate
bargaining unit.
 Certification proceedings directly
involve two issue:
1. Proper composition and
constituency of the bargaining unit;
and
2. The veracity of majority
membership claims of the
competing union so as to identify
the one union that will serve as the
bargaining representative of the
entire bargaining unit.
 The following may file a petition for
certification election:
1. Any legitimate labor organization
(LLO)
2. A national union or federation which
has already issued a charter
certificate to its local chapter
participating in the CE
3. A local chapter which has been
issued a charter certificate
4. An Employer only when requested
to bargain collectively in a
bargaining unit where no registered
CBA exists
 Petition for Certification Election shall be
filed with the Regional Office which
issued the petitioning union's certificate
of registration/certificate of creation of
chartered local.
 Med-Arbiter shall hear and resolve the
Petition for Certification Election
 A “no-union” can win in a certification
election because the objective in a
Certification Election is to ascertain the
majority representation of the
bargaining representative, if the
Employee’s desire to be represented at
all by anyone. Hence, no union is one of
the choices in a Certification Election.
 Grounds for denying the Petition for
Certification Election:
1. The petitioning union or federation
is not listed in the DOLE’s registry of
legitimate labor unions or that its
registration certificate legal
personality has been revoked or
cancelled with finality
2. Failure of a local chapter or national
union/federation to submit a duly
issued charter certificate upon filing
of the petition
3. The petition was filed before or after
the FREEDOM PERIOD of a duly
registered CBA; provided that the
60‐day period based on the original
CBA shall not be affected by any
amendment, extension or renewal
of the CBA; (contract bar rule)
4. The petition was filed within 1 year
from entry of voluntary recognition
or within the same period from a
valid certification, consent or run‐off
election and no appeal on the
results of the certification, consent
or run‐off election is pending; (12‐
month bar; certification year bar
rule)
5. A duly certified union has
commenced and sustained
negotiations with the Employer in
accordance with Art. 250 of the LC
within the 1‐year period.
(negotiation bar rule)
6. There exists a bargaining deadlock
which had been submitted to
conciliation or arbitration or had
become the subject of a valid notice
of strike or lockout to which an
incumbent or certified bargaining
agent is a party. (deadlock bar rule)
7. In case of an organized
establishment, failure to submit the
25% support requirement for the
filing of the PCE.
8. Non‐appearance of the petitioner
for 2 consecutive scheduled
conferences before the med‐arbiter
despite due notice, and
9. Absence of Employer‐Employee
relationship between all the
members of the petitioning union
and the owner of the establishment
where the proposed bargaining unit
is sought to be represented.
Art. 257 – Petitions in Unorganized
Establishments. In any establishments where
there is no certified bargaining agent, a
certification election shall automatically be
conducted by the Med-Arbiter upon the filing of
a petition by any legitimate labor organization,
including a national union or federation which
has already issued a charter certificate to its
local/chapter participating in the certification
election or a local/chapter which has been
issued a charter certificate by the national
union or federation. In cases where the petition
was filed by a national union or federation, it
shall not be required to disclose the names of
the local chapter’s officers and members.
  Unorganized establishment is a of the members of the union as well as
company or firm where there is no lack of employer-employee
recognized or certified collective relationships.
bargaining agent within its premises.
Art. 259 – Appeal from Certification Election
The existence of some unions is still
Orders. Any party to an election may appeal the
treated as unorganized establishment if
order or results of the election as determined
no one among the unions is certified as
by the Med-Arbiter directly to the secretary of
the sole and exclusive bargaining agent
Labor and Employment on the ground that the
of the employees in the bargaining unit.
rules and regulations or parts thereof
Art. 258 – When an Employer May File Petition. established by the Secretary of Labor and
When requested to bargain collectively, an Employment for the conduct of the election
employer may petition the Bureau for an have been violated. Such appeal shall be
election. If there is no existing certified decided within fifteen (15) calendar days.
collective bargaining agreement in the unit, the
 The order granting the conduct of a
Bureau shall, after hearing, order a certification
certification election in an unorganized
election.
establishment is not subject to appeal. It
All certification cases shall be decided shall be subject to a protest. Appeal may
within twenty (20) working days. only be made in case of denial of the
petition within ten (10) days from
The Bureau shall conduct a
receipt of the decision of denial.
certification election within twenty (20) days in
accordance with the rules and regulations  In organized establishments, it can be
prescribed by the Secretary of labor. appealed to office of the DOLE Secretary
within ten (10) days from receipt
 This is the only exception that an
thereof.
employer may file a petition for
certification election because it is
requested to bargain collectively.
Title VII-A – GRIEVANCE MACHINERY AND
Art. 258-A – Employer as Bystander. In all cases, VOLUNTARY ARBITRATION
whether the petition for certification election is
Art. 260 – Grievance Machinery and Voluntary
filed by an employer or a legitimate labor
Arbitration. The parties to a Collective
organization, the employer shall not be
Bargaining Agreement shall include therein
considered a party thereto with a concomitant
provisions that will ensure the mutual
right to oppose a petition for certification
observance of its terms and conditions. They
election. The employer’s participation in such
shall establish a machinery for the adjustment
proceedings shall be limited to: (1) being
and resolution of grievances arising from the
notified or informed of petitions of such nature;
interpretation or implementation of their
and (2) submitting the list of employees during
Collective Bargaining Agreement and those
the pre-election conference should the Med-
arising from the interpretation or enforcement
Arbiter act favorably on the petition.
of company personnel policies.
 The employer may pray for the dismissal
All grievances submitted to the
of a petition for certification election on
grievance machinery which are not settled
the basis of lack of mutuality of interest
within seven (7) calendar days from the date of
its submission shall automatically be referred to
voluntary arbitration prescribed in the
Collective Bargaining Agreement.
For this purpose, parties to a
Collective Bargaining Agreement shall name
and designate in advance a Voluntary
Arbitrator or panel of Voluntary Arbitrators, or
include in the agreement a procedure for the
selection of such Voluntary Arbitrator or panel
of Voluntary Arbitrators duly accredited by the
Board. In case the parties fail to select a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, as may be necessary, pursuant to
the selection procedure agreed upon in the
Collective Bargaining Agreement, which shall
act with the same force and effect as if the
Voluntary Arbitrator or panel of Voluntary
Arbitrators have been selected by the parties as
described above.
Grievance - It is a complaint or dissatisfaction
arising from the interpretation or
implementation of the CBA and those arising
from interpretation or enforcement of company
personnel policies.
Grievance machinery refers to the mechanism
for the adjustment and resolution of grievances
arising from the interpretation or enforcement
of company personnel policies. It is part of the
continuing process of collective bargaining. It is
a must provision in any CBA and no collective
agreement can be registered in the absence of
such procedure
Grievance machinery is established:
Agreement by the parties
A grievance committee – composed of at least 2
representatives each from the members of the
bargaining unit and the employer, unless
otherwise agreed upon by the parties – shall be
created within 10 days from the signing of CBA.
Grievance Procedure - refers to the internal rules
of procedure established by the parties in their
CBA which usually consists of successive steps
starting at the level of the complainant and his
immediate supervisor and ending, when
necessary, at the level of the top union and
company officials and with voluntary arbitration
as the terminal step.
Requirements of a good grievance machinery:
Define subjects for settlement
Proper person or body to whom the grievance
must be brought
Provisions for a mode of appeal
Finality of settlement or adjustments
Provisions for statute of limitations
Voluntary Arbitration - refers to the mode of
settling labor management disputes by which
the parties select a competent, trained and
impartial third person who shall decide on the
merits of the case and whose decision is final and
executory.
 Arbitrable issues:
1. interpretation or implementation of
the CBA
2. interpretation or enforcement of
company personnel policies
gross violations of CBA provision
[flagrant/malicious refusal to comply with the
economic provisions of the CBA
all other labor disputes including ULP and
bargaining deadlock, if the parties agree
Compulsory arbitration is a system whereby the
parties to a dispute are compelled by the
government to forego their right to strike and
are compelled to accept the resolution of their
dispute through arbitration by a 3rd party.
Voluntary arbitration is a process where the
parties agree to submit their issues to a third
person or board and accept the arbitration
award as final and binding.
Art. 261 – Jurisdiction of Voluntary Arbitrator or
panel of Voluntary Arbitrators. The Voluntary
Arbitrator or panel of Voluntary Arbitrators
shall have original and exclusive jurisdiction to
hear and decide all unresolved grievances
arising from the interpretation or
implementation of the Collective Bargaining
Agreement and those arising from the
interpretation or enforcement of company
personnel policies referred to in the
immediately preceding article. Accordingly,
violations of a Collective Bargaining Agreement,
except those which are gross in character, shall
no longer be treated as unfair labor practice
and shall be resolved as grievance under the
Collective Bargaining Agreement. For purposes
of this article, gross violations of Collective
Bargaining Agreement shall mean flagrant
and/or malicious refusal to comply with the
economic provisions of such agreement.
The Commission, its Regional Offices
and the Regional Directors of the Department
of Labor and Employment shall not entertain
disputes, grievances or matters under the
exclusive and original jurisdiction of the
Voluntary Arbitrator or panel of Voluntary
Arbitrators and shall immediately dispose and
refer the same to the Grievance Machinery or
Voluntary Arbitration provided in the Collective
Bargaining Agreement.
 Powers of the voluntary arbitrators:
1. hold hearings
2. receive evidence
3. take whatever action is necessary to
resolve the issue or issues subject of
dispute, including efforts to effect a
voluntary settlement between
parties
4. determine attendance of any third
parties
5. determine exclusion of any witness
6. issue writ of execution for sheriff of
NLRC or regular courts to execute
the final decision, order, or award
Labor Arbiter has Exclusive and original
jurisdiction to hear and decide the following
cases involving all workers:
ULP cases
Termination disputes
If accompanied with a claim for reinstatement,
those that workers file involving wages, rates of
pay, hours of work and other terms and
conditions of employment
Claims for actual, moral, exemplary and other
forms of damages arising from Employer‐
Employee relations
Cases arising from any violation of Art. 264,
including questions involving the legality of
strikes and lockouts;
Except claims for Employment Compensation,
Social Security, Philhealth and maternity
benefits, all other claims arising from Employer‐
Employee relations, including those of persons in
domestic or household service, involving an
amount exceeding P5000 regardless of whether
accompanied with a claim for reinstatement
Monetary claims of overseas contract workers
arising from Employer‐Employee relations under
the Migrant Worker’s Act of 1995 as amended by
RA 10022
Wage distortion disputes in unorganized
establishments not voluntarily settled by the
parties pursuant to RA 6727
 Enforcement of compromise agreements when
there is non‐compliance by any of the parties
pursuant to Art. 227 of the Labor Code (LC), as
amended; and
Other cases as may be provided by law
The cases enumerated may instead be
submitted to a voluntary arbitrator by
agreement of the parties. The law prefers
voluntary over compulsory arbitration.
Award or decision of the voluntary arbitrator
shall be final and executory after 10 days from
receipt of the copy of the award or decision by
the parties.
The voluntary arbitrator lost jurisdiction over the
case submitted to him the moment he rendered
his decision. Therefore, he could no longer
entertain a motion for reconsideration of the
decision for its reversal or modification.
Art. 262 – Jurisdiction over other Labor
Disputes. The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the
parties shall also hear and decide all other labor
disputes including unfair labor practices and
bargaining deadlocks.
General rule: jurisdiction cannot be subject to
agreement of the parties
Exception: By agreement of the parties, the
voluntary arbitrator or panel of voluntary
arbitrators can hear and decide all other disputes
including unfair labor practices and bargaining
deadlocks. It can also conciliate or mediate to aid
the parties in reaching a voluntary settlement of
the dispute.
Art. 262-A – Procedures. The Voluntary
Arbitrator or panel of Voluntary Arbitrators
shall have the power to hold hearings, receive
evidences and take whatever action is
necessary to resolve the issue or issues subject
of the dispute, including efforts to effect a
voluntary settlement between parties.
All parties to the dispute shall be
entitled to attend the arbitration proceedings.
The attendance of any third party or the
exclusion of any witness from the proceedings
shall be determined by the Voluntary Arbitrator
or panel of Voluntary Arbitrators. Hearing may
be adjourned for cause or upon agreement by
the parties.
Unless the parties agree otherwise, it
shall be mandatory for the Voluntary Arbitrator
or panel of Voluntary Arbitrators to render an
award or decision within twenty (20) calendar
days from the date of submission of the dispute
to voluntary arbitration.
The award or decision of the
Voluntary Arbitrator or panel of Voluntary
Arbitrators shall contain the facts and the law
on which it is based. It shall be final and
executor after ten (10) calendar days from
receipt of the copy of the award or decision by
the parties.
Upon motion of any interested party,
the Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region
where the movant resides, in case of absence or
incapacity of the Voluntary Arbitrator or panel
of Voluntary Arbitrators, for any reason, may
issue a writ of execution requiring either the
sheriff of the Commission or regular courts or
any public official whom the parties may
designate in the submission agreement to
execute the final decision, order or award.
All parties to the dispute shall be entitled to
attend the arbitration proceedings. The
attendance of any third party or the exclusion of
any witness from the proceedings shall be
determined by the Voluntary Arbitrator or panel
of Voluntary Arbitrators. Hearing may be
adjourned for cause or upon agreement by the
parties.
Unless the parties agree otherwise, it shall be
mandatory for the Voluntary Arbitrator or panel
of Voluntary Arbitrators to render an award or
decision within 20 calendar days from the date
of submission of the dispute to voluntary
arbitration.
The award or decision of the Voluntary
Arbitrator or panel of Voluntary Arbitrators must
state in clear, concise and definite terms the
facts, the law and/contract upon which it is
based.
It shall be final and executory after 10 calendar
days from the receipt of the copy of the award
or decision by the parties.
Upon motion of any interested party, the
Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region
where the movant resides, in case of the absence
or incapacity of the Voluntary Arbitrator or panel
of Voluntary Arbitrators, for any reason, may
issue a writ of execution requiring either the
sheriff of the Commission or regular courts or
any public official whom the parties may
designate in the submission agreement to
execute the final decision, order or award.
The decision of a Voluntary Arbitrator or panel of
Voluntary Arbitrators is appealable by ordinary
appeal under Rule 43 of the Rules of Civil
Procedure directly to the Court of Appeals.
Distinction between the jurisdiction of the labor
arbiter (LA) and the National Labor Relations
Commission (NLRC)
1. The NLRC has exclusive
appellate jurisdiction on all
cases decided by the LA.
2. The NLRC does not have
original jurisdiction on the cases
over which the LA have original
and exclusive jurisdiction.
The NLRC cannot have appellate jurisdiction if a
claim does not fall within the exclusive original
jurisdiction of the LA.
Art. 262-B – Cost of Voluntary Arbitration and
Voluntary Arbitrators Fee. The parties to a
Collective Bargaining Agreement shall provide
therein a proportionate sharing scheme on the
cost of voluntary arbitration including the
Voluntary Arbitrator’s fee. The fixing of fee of
Voluntary Arbitrators, or panel of Voluntary
Arbitrators, whether shouldered wholly by the
parties or subsidized by the Special Voluntary
Arbitration Fund, shall take into account the
following factors:
Nature of the case;
Time consumed in hearing the case;
Professional standing of Voluntary Arbitrator;
Capacity to pay of the parties; and
Fees provided for in the Revised Rules of Court.
Title VIII – STRIKES AND LOCKOUT AND
FOREIGN INVOLVEMENT IN TRADE UNION
ACTIVITIES
Art. 263 – Strikes, Picketing, and Lockouts.
(a) It is the policy of the State to encourage free
trade unionism and free collective bargaining.
(b) Workers shall have the right to engage in
concerted activities for purposes of collective
bargaining or for their mutual benefit and
protection. The right of legitimate labor
organizations to strike and picket and of
employers to lockout, consistent with the
national interest, shall continue to be
recognized and respected. However, no labor
union may strike and no employer may declare
a lockout on grounds involving inter-union and
intra-union disputes.
(c) In cases of bargaining deadlocks, the duly upon the request of any affected party,
certified or recognized barganining agent may supervise the conduct of the secret balloting. In
file a notice of strike or the employer may file a every case, the union or the employer shall
notice of lockout with the Ministry at least 30 furnish the Ministry the results of the voting at
days before the intended date thereof. In cases least seven days before the intended strike or
of unfair labor practice, the period of notice lockout, subject to the cooling-off period herein
shall be 15 days and in the absence of a duly provided.
certified or recognized bargaining agent, the
(g) When, in his opinion, there exist a labor
notice of strike may be filed by any legitimate
dispute causing or likely to cause a strike or
labor organization in behalf of its members.
lockout in an industry indispensable to the
However, in case of dismissal from employment
national interest, the Secretary of Labor and
of union officers duly elected in accordance
Employment may assume jurisdiction over the
with the union constitution and by-laws, which
dispute and decide it or certify the same to the
may constitute union busting where the
Commission for compulsory arbitration. Such
existence of the union is threatened, the 15-day
assumption or certification shall have the effect
cooling-off period shall not apply and the union
of automatically enjoining the intended or
may take action immediately.
impending strike or lockout as specified in the
(d) The notice must be in accordance with such assumption or certification order. If one has
implementing rules and regulations as the already taken place at the time of the
Minister of Labor and Employment may assumption or certification, all striking or
promulgate. locked out employees shall immediately return
to work and the employer shall immediately
(e) During the cooling-off period, it shall be the
resume operations and readmit all workers
duty of the Ministry to exert all efforts at
under the same terms and conditions prevailing
mediation and conciliation to effect a voluntary
before the strike or lockout. The Secretary of
settlement. Should the dispute remain
Labor and Employment or the Commission may
unsettled until the lapse of the requisite
seek the assistance of law enforcement
number of days from the mandatory filing of
agencies to ensure compliance with this
the notice, the labor union may strike or the
provision as well as with such orders as he may
employer may declare a lockout.
issue to enforce the same.
(f) A decision to declare a strike must be
In line with the national concern for and the
approved by a majority of the total union
highest respect accorded o the right of patients
membership in the bargaining unit concerned,
to life and health, strike and lockouts in
obtained by a secret ballot in meetings or
hospitals, clinics and similar medical
referenda called for that purpose. A decision to
institutions shall, to every extent possible, be
declare a lockout must be approved by a
avoided, and all serious efforts, not only by
majority of the board of directors of the
labor and management but government as
corporation or association or of the partners in
well, be exhausted to substantially minimize, if
a partnership, obtained by secret ballot in a
not prevent, their adverse effects on such life
meeting called for that purpose. The decision
and health, through the exercise, however
shall be valid for the duration of the dispute
legitimate, by labor of its right to strike and by
based on substantially the same grounds
management to lockout. In labor disputes
considered when the strike or lockout vote was
adversely affecting the continued operation of
taken. The ministry may, at its own initiative or
such hospitals, clinics or medical institutions, it
shall be the duty of the striking union or locking-
out employer to provide and maintain an
effective skeletal workforce of medical and
other health personnel, whose movement and
services shall be unhampered and unrestricted,
as are necessary to insure the proper and
adequate protection of the life and health of its
patients, most especially emergency cases, for
the duration of the strike or lockout. In such
cases, therefore, the Secretary of Labor and
Employment may immediately assume, within
twenty-four (24) hours from knowledge of such
occurrence of such a strike or lockout,
jurisdiction over the same or certify it to the
Commission for compulsory arbitration. For this
purpose, the contending parties are strictly
enjoined to comply with such orders,
prohibitions and/or injunctions as are issuted
by the Secretary of Labor and Employment or
the Commission, under pain of immediate
disciplinary action, including dismissal or loss of
employment status or payment by the locking-
out employer of backwages, damages and other
affirmative relief, even criminal prosecution
against either or both of them.
The foregoing nothwithstanding, the
President of the Philippines shall not be
precluded from determining the industries that,
in his opinion are indispensable to the national
interest, and from intervening at any time and
assuming jurisdiction over any such labor
dispute in order to settle or terminate the
same.
(h) Before or at any stage of the compulsory
arbitration process, the parties may opt to
submit their dispute to voluntary arbitration.
(i) The Secretary of Labor and Employment, the
Commission or the voluntary arbitrator or panel
of voluntary arbitrators shall decide or resolve
the dispute within thirty (30) calendar days
from the date of the assumption of jurisdiction
or the certification or submission of the dispute,
as the case may be. The decision of the
President, the Secretary of Labor and
Employment, the Commission or the voluntary
arbitrator shall be final and executor ten (10)
calendar days after receipt thereof by the
parties.
The State shall guarantee the rights of all
workers to self‐organization, collective
bargaining and negotiations, and peaceful
concerted activities, including the right to strike
in accordance with law (Sec. 3, Art. XIII, 1987
Constitution).
Concerted action is an activity undertaken by 2
or more employees, by one on behalf of the
others. Not all concerted activities are strikes.
They may only be protest actions – they do not
necessarily cause work stoppage by the
protesters. A strike in contrast is always a group
action accompanied by work stoppage.
Strike means any temporary stoppage of work by
the concerted action of employees as a result of
an industrial or labor dispute. It shall comprise
not only concerted work stoppages, but also
slowdowns, mass leaves, sitdowns, attempt to
damage, destroy or sabotage plant equipment
and facilities, and similar activities.
Lockout means any temporary refusal of an
employer to furnish work as a result of an
industrial or labor dispute.
Picketing is the act of marching to and from the
employer’s premises which is usually
accompanied by the display of placard and other
signs, making known the facts involved in a labor
dispute. It is a phase of the freedom of speech
guaranteed by the Constitution. If peacefully
carried out, it cannot be curtailed even in the
absence of employer-employee relationship.
Strike is a powerful weapon of the working class.
Thus, it shall be conducted peacefully. Any
violation of the legal requirements and strictures
will render the strike illegal, to the detriment of
the very workers it is supposed to protect.
Types of strike:
Economic strike – used to secure the economic
demands such as higher wages and better
working conditions for the worker
ULP strike – protest against management for ULP
Different forms of strike:
Legal strike
Illegal strike
Economic strike
ULP strike
Slow down strike
Wild-cat strike
Sit down strike
Quickie strike
Sympathetic strike
Requisites for a valid strike or lockout:
It must be based on a valid and factual ground;
Notice shall be filed with the National
Conciliation and Mediation Board (NCMB) at
least 15 days before the intended date of the
strike or lockout if the issues raised are unfair
labor practices, or at least 30 days before the
intended date thereof if the issue involves
bargaining deadlock.
In cases of dismissal from employment of union
officers duly elected in accordance with the
union constitution and by‐laws, which may
constitute UNION BUSTING where the existence
of the union is threatened, the 15‐day cooling‐
off period shall not apply and the union may take
action immediately after the strike vote is
conducted and the result thereof submitted to
the Department of Labor and Employment.
1. A strike must be approved by a
majority vote of the members of the
Union and a lockout must be
approved by a majority vote of the
members of the Board of Directors
of the Corporation or Association or
of the partners in a partnership,
obtained by secret ballot in a
meeting called for that purpose.
2. A strike or lockout VOTE shall be
reported to the NCMB‐DOLE
Regional Branch at least 7 days
before the intended strike or lockout
subject to the cooling‐off period.
3. In the event the result of the
strike/lockout ballot is filed within
the cooling‐off period, the 7‐day
requirement shall be counted from
the day following the expiration of
the cooling‐off period. In case of
dismissal from employment of union
officers which may constitute union
busting, the time requirement for
the filing of the Notice of Strike shall
be dispensed with but the strike
vote requirement, being mandatory
in character, shall “in every case” be
complied with.
4. The dispute must not be the subject
of an assumption of jurisdiction by
the President or the Secretary of
Labor and Employment, a
certification for compulsory
arbitration, or submission to
compulsory or voluntary arbitration
nor a subject of a pending case
involving the same grounds for the
strike or lockout.
Non-compliance with the requisites of a strike
may be declared illegal.
 Characteristics of a strike:
Existence of an Employer‐Employee relationship at least 7 days before the
intended strike subject to
Existence of a labor dispute
the cooling‐off period.
Employment relation is deemed to continue
d. The regional branch may
although in a state of belligerent suspension
supervise the conduct of the
Temporary work stoppage secret balloting at its own
initiative or upon request of
Work stoppage is done through concerted action any party.
The striking group is a legitimate labor Strike vote report. Furnish the regional branch of
organization; in case of a bargaining deadlock, it the NCMB with a notice to conduct a strike vote,
must be the employees’ sole bargaining at least 24‐hours before the meeting for such
representative purpose
A valid strike must have a lawful ground and Purpose of giving notice of the conduct of a
must conform to the procedural requirements strike vote to the NCMB at least 24 hours before
set by law. A strike or lockout may be declared in the meeting for the said purpose:
cases of bargaining deadlock or ULP.
e. Inform the NCMB of the
Procedural requirement: intent of the union to
Effort to bargain conduct a strike vote;

Filing and service of notice of strike, filed with
the NCMB taking into consideration the cooling‐
off period
Observance of cooling-off period, 30 days before
the intended strike for bargaining deadlocks and
15 days before the intended strike for ULP
Give the NCMB ample time to decide on whether
or not there is a need to supervise the conduct
of the strike vote to prevent any acts of violence
and or irregularities;
Give ample time to prepare for the deployment
of the requisite personnel .

Strike vote Observance of the waiting period. 7‐day waiting

a. The decision to declare a
strike must be approved by
a majority of the total union
membership in the
bargaining unit concerned.
b. It must be obtained by
secret ballot through
meetings or referenda
called for the purpose.
period before the date of the purported strike
Conversion doctrine It is when a strike starts as
economic and later, as it progresses, it becomes
a ULP, or vice versa.
Strike cannot be converted into a pure and
simple lockout by the mere expedient of filing
before the trial court a notice of offer to return
to work during the pendency of the labor dispute
between the union and the employer.

c. Its purpose is to ensure that Test in determining the legality of a strike:

the intended strike is a 1. Purpose test – the strike must be
majority decision. The due to either bargaining deadlock
report on the strike vote and/or the ULP
must be submitted to DOLE
 2. Compliance with the procedural
and substantive requirements of the
law.
Means employed test – It states that a strike may
be legal at its inception but eventually be
declared illegal if the strike is accompanied by
violence which is widespread, pervasive and
adopted as a matter of policy and not mere
violence which is sporadic which normally occur
in a strike area.
Strike or lockout cannot be declared when:
CBA violations not gross in character
Grounds involving inter/intra union disputes
When there is no notice of strike or lockout or
without the strike or lockout vote
After assumption of jurisdiction by the Secretary
of Labor
After certification or submission of dispute to
compulsory arbitration or during the pendency
of cases involving the same grounds for strike or
lockout
Labor standard cases such as wage orders
A no strike/lockout clause legal but it is only
applicable to economic strikes and not ULP
strikes.
Preventive mediation case involves labor
disputes which are the subject of a formal or
informal request for conciliation and mediation
assistance sought by either or both parties or
upon the initiative of the NCMB.
Contents of the notice of strike or lockout:
Name and addresses of Employer
Union involved
Nature of the industry to which the Employer
belongs
Number of union members
Workers in the bargaining unit
Other relevant date
In case of bargaining deadlocks: unresolved
issues, written proposals of the union, counter‐
proposals of the Employer and proof of request
for conference to settle differences
In case of ULP: The acts complained of, and the
efforts taken to resolve the dispute
NCMB shall inform the concerned party in case
notice does not conform with the requirements
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with
full backwages.
Strike is illegal when:
Contrary to specific prohibition of law, such as
strike by employees performing governmental
functions;
Violates a specific requirement of law;
Declared for an unlawful purpose, such as
inducing the employer to commit ULP against
non‐union Employees;
Employs unlawful means in the pursuit of its
objective, such as widespread terrorism of non‐
strikers;
Declared in violation of an existing injunction;
Contrary to an existing agreement, such as a no
strike clause or conclusive arbitration clause
Doctrine of “good faith strike” is when a strike
may be considered legal where the union
believed that the company committed ULP and
the circumstances warranted such belief in Good
Faith, although subsequently such allegations of
ULP are found out as not true.
GR: A strike grounded on ULP is illegal if no such
acts actually exist.
XPN: Even if no ULP acts are committed by the
Employer, if the Employees believe in GF that
ULP acts exist so as to constitute a valid ground
to strike, then the strike held pursuant to such
belief may be legal. Where the union believed
that the Employer committed ULP and the
circumstances warranted such belief in GF, the
resulting strike may be considered legal
although, subsequently, such allegations of ULP
were found to be groundless.
Not entitled to reinstatement:
Union officers who knowingly participate in the
illegal strike
Any striker or union who knowingly participates
in the commission of illegal acts during the strike
Those union members who have joined an illegal
strike but have not committed any illegal act
shall be reinstated but without back wages. The
responsibility for the illegal acts committed
during the strike must be on an individual and
not on a collective basis.
GR: Strikers entitled to their backwages or strike
duration pay even if such strike was legal.
XPN:
Where the strikers voluntarily and
unconditionally offered to return to work, but
the employer refused to accept the offer –
workers are entitled to back wages from the date
their offer was made
When there is a return‐to‐work order and the
Employees are discriminated against other
Employees, workers are entitled to back wages
from the date of discrimination
In case of a ULP strike, in the discretion of the
authority deciding the case
Liability of Union Officer:
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. Mere
participation in an illegal strike by a union officer
is sufficient ground to terminate his
employment. In case of a lawful strike, the union
officer must commit illegal acts during a strike
for him to be terminated.
Liability of worker:
General rule: A worker who participates in a
lawful strike is not ground for termination of his
employment.
Exception: When the worker participated in
illegal acts during the strike.
When the strike is or becomes illegal, only the
union officers are deemed to have lost their
employment status.
Liability of employer:
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with
full backwages
 Conditions for the
assumption/certification powers:
1. labor dispute in an industry
indispensable to the national
interest
2. such dispute is causing or is likely to
cause a strike or lockout
 Powers of the Secretary of Labor:
1. Assumption of jurisdiction. The
Secretary of Labor will decide the
labor dispute himself/herself.
2. Certification for compulsory
arbitration. The Secretary of Labor
 will certify the labor dispute to the
NLRC for compulsory arbitration.
 Powers of the President (not precluded
by the powers of the Secretary of Labor):
1. determine the industries
indispensable to the national
interest
2. assume jurisdiction over any such
labor dispute to settle or terminate
such dispute
It is in the discretion of the Secretary of Labor to
determine which industries are indispensable to
the national interest. However, the President
may determine such industries himself
The President of the Philippines shall not be
precluded from determining the industries that,
in his opinion, are indispensable to the national
interest, and from intervening at any time and
assuming jurisdiction over any such labor
dispute in order to settle or terminate the same.
 Nature of assumption order or
certification order:
1. Automatic injunction
2. Return-to-work and admission
3. Immediately executory
Such assumption or certification shall have the
effect of automatically enjoining the intended or
impending strike or lockout as specified in the
assumption or certification order. [Art. 263 (g),
2nd sentence]
If one has already taken place at the time of
assumption or certification, all striking or locked
out employees shall immediately return-to-work
and the employer shall immediately resume
operations and readmit all workers under the
same terms and conditions prevailing before the
strike or lockout. [Art. 263 (g), 3rd sentence]
 It is also important to emphasize that the
return-to-work order not so much
confers a right as it imposes a duty; and
while as a right it may be waived, it must
be discharged as a duty even against the
worker's will. Returning to work in this
situation is not a matter of option or
voluntariness but of obligation. The
worker must return to his job together
with his co-workers so the operations of
the company can be resumed and it can
continue serving the public and
promoting its interest. That is the real
reason such return can be compelled. So
imperative is the order in fact that it is
not even considered violative of the
right against involuntary servitude.
It shall be the duty of the striking union or
locking-out employer to provide and maintain an
effective skeletal workforce of medical and other
health personnel, whose movement and services
shall be unhampered and unrestricted, as are
necessary to insure the proper and adequate
protection of the life and health of its patients,
most especially emergency cases, for the
duration of the strike or lockout. The Secretary
of Labor and Employment may immediately
assume, within twenty four (24) hours from
knowledge of the occurrence of such a strike or
lockout, jurisdiction over the same or certify it to
the Commission for compulsory arbitration.
Even if the strike is valid because its objective or
purpose is lawful, the strike may still be declared
invalid where the means employed are illegal.
An automatic injunction under Article 263 (g) or
a valid injunction order under the exceptions to
Article 254 must be complied with. Otherwise,
the strike becomes illegal.
A “no strike, no lock-out” is a valid provision in
the CBA. However, it only applies to economic
provisions. It cannot prevent a strike which is
grounded on unfair labor practice.
Art. 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.
(b) No person shall obstruct, impede, or
interfere with by force, violence, coercion,
threats or intimidation, any peaceful picketing
by employees during any labor controversy or
in the exercise of the right to self-organization
or collective bargaining, or shall aid or abet such
obstruction or interference.
(c) No employer shall use or employ any strike-
breaker, nor shall any person be employed as a
strike-breaker.
(d) No public official or employee, including
officers and personnel of the New Armed Forces
of the Philippines or the Integrated National
Police, or armed person, shall bring in,
introduce or escort in any manner, any
individual who seeks to replace strikers in
entering or leaving the premises of a strike
area, or work in place of the strikers. The police
force shall keep out of the picket lines unless
actual violence of other criminal acts occur
therein: Provided, That nothing herein shall be
interpreted to prevent any public officer from
taking any measure necessary to maintain
peace and order, protect life and property,
and/or enforce the law and legal orders.
(e) No person engaged in picketing shall commit
any act of violence, coercion of intimidation or
obstruct the free ingress or egress from the
employer’s premises for lawful purpose, or
obstruct public thoroughfares.
 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.
 Prohibited activities in picketing:
1. By any person. No person shall
obstruct, impede, or interfere with,
by force, violence, coercion, threats
or intimidation, any peaceful
picketing by employees during any
labor controversy or in the exercise
of the right to self-organization or
collective bargaining, or shall aid or
abet such obstruction or
interference. [Art. 264 (b)]
2. By police force. The police force shall
keep out of the picket lines unless
actual violence or other criminal acts
occur therein: Provided, That
nothing herein shall be interpreted
 to prevent any public officer from
taking any measure necessary to
maintain peace and order, protect
life and property, and/or enforce the
law and legal order. [Art. 264 (d)]
3. By person engaged in picketing. No
person engaged in picketing shall
commit any act of violence, coercion
or intimidation or obstruct the free
ingress to or egress from the
employer’s premises for lawful
purposes, or obstruct public
thoroughfares. [Art. 264 (e)]
 Picketing as part of freedom
speech/expression; limitations:
o General rule: picketing enjoys
constitutional protection as part
of freedom of speech and/or
expression.
o Exceptions/limitations:
1. when picketing is coercive
rather than persuasive
2. when picketing is achieved
through illegal means
3. courts may confine the
communication/demonstra
tion to the parties to the
labor dispute
4. Innocent bystander rule.
Courts may insulate
establishments or persons
with no industrial
connection or having
interest totally foreign to
the context of the dispute
An "innocent bystander," who seeks to enjoin a
labor strike, must satisfy the court that aside
from the grounds specified in Rule 58 of the
Rules of Court, it is entirely different from,
without any connection whatsoever to, either
party to the dispute and, its interests are totally
foreign to the context thereof.
Liabilities of participants in an illegal
strike/lockout:
Employer in an illegal lockout – workers
terminated due to illegal lockout shall be entitled
to reinstatement plus full backwages.
Union officers who participated in illegal strike –
deemed to have lost their employment
Union officers who participated in illegal acts
during a lawful strike – deemed to have lost their
employment.
Ordinary workers – deemed to have lost their
employment only if they participated in illegal
acts.
Art. 265 – Improved Offer Balloting. In an effort
to settle a strike, the Department of Labor and
Employment shall conduct a referendum by
secret balloting on the improved offer of the
employer on or before the 30th day of the strike.
When at least a majority of the union members
vote to accept the improved offer the striking
workers shall immediately return to work and
the employer shall thereupon readmit them
upon the signing of the agreement.
In case of lockout, the Department of
Labor and Employment shall also conduct a
referendum by secret balloting on the reduced
offer of the union on or before the 30th day of
lockout. When at least majority of the Board of
directors or trustees or the partners holding the
controlling interest in the case of a partnership
vote to accept the reduced offer, the worker
shall immediately return to work and the
employer shall thereupon readmit them upon
the signing of the agreement.
Art. 266 – Requirement for Arrest and
Detention. Except on grounds of national
security and public peace or in case of
commission of a crime, no union members or
union organizers may be arrested or detained
for union activities without previous
consultations with the Secretary of Labor.
Chapter II – ASSISTANCE TO LABOR
ORGANIZATION
Art. 267 – Assistance by the Department of
Labor. The department of Labor, at the
initiative of the Secretary of Labor, shall extend
special assistance to the organization, for
purposes of collective bargaining, of the most
underprivileged workers who, for reasons of
occupation, organizational structure or
insufficient incomes, are not normally covered
by major labor organization or federations.
Art 268 – Assistance by the Institute of Labor
and Manpower Studies. The institute of Labor
and Manpower Studies shall render technical
and other forms of assistance to labor
organizations and employer organizations in
the field of labor education, especially
pertaining to collective bargaining, arbitration,
labor standards and the Labor Code of the
Philippines in general.
Chapter III – FOREIGN ACTIVITIES
Art. 269 – Prohibition Against Aliens;
Exceptions. All aliens, natural or juridical, as
well as foreign organizations are strictly
prohibited from engaging directly or indirectly
in all forms of trade union activities without
prejudice to normal contacts between
Philippine labor unions and recognized
international labor centers: Provided, however,
That aliens working the country with valid
permits issued by the Department of Labor and
Employment, may exercise the right to self-
organization and join or assist labor
organizations of their own choosing for
purposes of collective bargaining: Provided,
further, That said aliens are nationals of a
country which grants the same or similar rights
to Filipino workers.
Art. 270 – Regulations of Foreign Assistance. (a)
No foreign individual, organization or entity
may give any donations, grants or other forms
of assistance, in cash or in kind, directly or
indirectly, to any labor organization, group of
workers or any auxillary thereof, such as
cooperatives, credit unions and institutions
engaged in research, education or
communication, in relation to trade union
activities, without prior permission by the
Secretary of Labor.
“Trade union activities” shall mean:
Organization, formation and administration of
labor organization;
Negotiation and administration of collective
bargaining agreements;
All forms of concerted union action;
Organizing, managing, or assisting union
conventions, meetings, rallies, referenda,
teach-ins, conference and institutes;
Any form of participation or involvement in
representation proceedings, representation
elections, consent elections, union elections;
and
Other activities or actions analogous to the
foregoing.
(b) This prohibition shall equally apply to
foreign donatins, grants or other forms of
assistance, in cash or in kind, given directly or
indirectly to any employer or employer’s
organization to support any activity or activities
affecting trade unions.
(c) The Secretary of Labor shall promulgate
rules and regulations to regulate and control
the giving and receiving of such donations,
grants, or other forms of assistance, including
the mandatory reporting of the amounts of the
donations or grants, the specific recipients
thereof, the projects or activities proposed to
be supported, and their duration.
Art. 271 – Applicability to Farm Tenants and
Rural Workers. The provisions of this Title
pertaining to foreign organizations and
activities shall be deemed applicable likewise to
all organizations of farm tenants, rural workers
and the like: Provided, That in appropriate
cases, the Secretary of Agrarian Reform shall
exercise the powers and responsibilities vested
by this Title in the Secretary of Labor.
Chapter IV – PENALTIES FOR VIOLATION
Art. 272 – Penalties. (a) Any person violating
any of the provisions of Articles 264 of this Code
shall be punished by a fine of not less than one
thousand pesos (P1,000.00) nor more than ten
thousand pesos (P10,0000.00) and/or
imprisonment for not less than three months
nor more than three (3) years, or both such fine
and imprisonment, at the discretion of the
court. Prosecution under this provision shall
preclude prosecution for the same act under
the revised penal code and vice versa.
(b) Upon the recommendation of the Minister
of Labor and Employment and the Minister of
National Defense, foreigners who violate the
provisions of the Title shall be subject to
immediate and summary deportation by the
Commission on Immigration and Deportation
and shall be permanently barred from re-
entering the country without the special
permission of the President of the Philippines.
Title IX – SPECIAL PROVISIONS
Art. 273 – Study of Labor-Management
Relations. The Secretary of Labor shall have the
power and it shall be his duty to inquire into:
The existing relations between employers and
employees in the Philippines;
The growth of associations of employees and
the effect of such associations upon employer-
employee relations;
The extent and results of the methods of
collective bargaining in the determination of
terms and conditions of employment;
The methods which have been tried by
employers and associations of employees for
maintaining mutually satisfactory relations;
Desirable industrial practices which have been
developed through collective bargaining and
other voluntary arrangements;
The possible ways of increasing the usefulness
and efficiency of collective bargaining for
settling differences;
The possibilities for the adoption of practical
and effective methods of labor-management
cooperation;
Any other aspects of employer-employee
relations concerning the promotion of harmony
and understanding between the parties; and
The relevance of labor laws and labor relations
to national development.
The Secretary of Labor shall also inquire into the
causes of industrial unrest and take all the
necessary steps within his power as may be
prescribed by law to alleviate the same, and
shall from time to time recommend the
enactment of such remedial legislation as in is
judgment may be desirable for the
maintenance and promotion of industrial
peace.
References:

Azucena, Cesario Alvero Jr. (2007). THE LABOR

CODE WITH COMMENTS AND CASES (Vol. II).
Quezon City: Rex Printing Company, Inc.

Poquiz, Salvador. (2012). LABOR RELATIONS LAW

WITH NOTES AND COMMENTS (Vol. II) Quezon
City: Rex Printing Company, Inc.

Labor Law Textbook by Ramon R. Manalac

LLBMBA

Labor Code of the Philippines

(PD.442)

www.chanroblesbar.com

Consolidated UP bar review guide

Labor Standards (Manalac