LABOR STANDARDS

COURSE OUTLINE

For Adamson University College of Law 1st Sem, AY 2011-2012

Atty. Ada D. Abad 0917-526-9732

A. INTRODUCTION
1. Constitutional and statutory basis 1.1 1.2 1.2 1.3 1.4 Consti., art. 2, secs. 9-14, 18 and 20. Consti., art. 3, secs. 10 and 18 Consti., art. 13, sec. 3 Labor Code, art. 112 Civil Code, Article 1700

1.5 Paradigm shift towards mutual cooperation It is high time that employer and employee cease to view each other as adversaries and instead recognize that there is a symbiotic relationship, wherein they must rely on each other to ensure the success of the business. -- Toyota Motor Phils. Workers vs. NLRC, 537 SCRA 171

1.6 Concept of social justice:

Conference of Maritime Manning Agencies vs. POEA, 243 SCRA 667 [1995] (citing the cases of Calalang vs. Williams and Eastern Shipping vs. POEA)

The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be [a] refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character. Tirazona vs. Phil. Eds Techno-Service (PET INC.), G.R. No. 169712, 20 January 2009

1.7 Employment not merely a contractual relationship: Gonzalez vs. NLRC, 313 SCRA 169 [26 August 1999] Capitol Medical Center vs. Meris, 470 SCRA 125 [2005] 1.8 Liberal interpretation of law in favor of workers Price vs. Innodata Phils., 567 SCRA 122 [2008] 1.9 But management rights likewise protected:
National Federation of Labor Vs. NLRC, 327 SCRA 158 [2000] Ledesma Jr. vs. NLRC, 537 SCRA 358 [2007] Leyte IV Electric Cooperative vs. Leyeco IV Ees Union-ALU, 537 SCRA 154 [2007]

B. EMPLOYER-EMPLOYEE RELATIONSHIP
(Azucena Volume I, pp. 16-27; Fernandez, pp. 61-97) 1. Employer defined: Art. 212 (e), LC; DOLE Dept. Order 40 [2003], R1 S1 (s) 2. Employee defined: Art. 212 (f), LC DOLE Dept. Order 40 [2003], R1 S1 (r) 3. Employer relationship as matrix 3.1 Concept of employer-employee relationship 3.2 Tests to determine the existence of employer-employee relationship (Memory aid: South West Disaster Control) a. b. c. d.

Selection and hiring Payment of Wages Power of Dismissal Control test

Cases: LVN vs. Phil. Musicians Guild, 1 SCRA 132 Rosario Bros. vs. Ople, 131 SCRA 72
Tongco vs. Manufacturers Life Insurance Co. Inc., G.R. No. 167622, 07 November 2008. Dealco Farms vs. NLRC, G.R. No. 153192, 30 Jan. 2009

3.3 Who has jurisdiction to determine ER-EE relationship: Secretary of Labor or the National Labor Relations Commission?

Peoples Broadcasting (Bombo Radyo Phils) vs. Secretary of Labor, G.R. No. 179652, 08 May 2009 -- Where the issue of the
existence of the ER-EE relationship has been raised, then NLRC has jurisdiction. Jurisdiction of the Secretary of Labor in respect of its visitorial and enforcement power relative to illegal deduction, underpayment of wages, and other monetary claims, may properly be exercised only WHEN the parties do not question the existence of an employer-employee relationship. The existence of an employeremployee relationship is a statutory prerequisite to, and a limitation on the power of the Secretary of Labor, which legislature has a right to impose. See also: Meteoro et al vs. Creative Creatures, GR 171275, 13 July 2009

3.4 Reasonable causal connection: Is a car benefit a labor or a civil dispute? Smart Communications vs. Astorga, 542 SCRA 434, 27 Jan 2008
Grandteq Industrial Steel Products vs. Edna Margallo, G.R. No. 181393, 28 July 2009.

Counterclaim involving transfer of ownership of company car falls within ambit of the Labor Arbiters jurisdiction. Domondon vs. NLRC, 471 SCRA 559 [2005] 3.5 Effect when NO employer-employee relationship exists, or when the main issue does not involve Er-Ee relationship - jurisdiction devolves with the regular courts Manliguez vs. Court of Appeals, 232 SCRA 427 Georg Grotjahn GMBH vs. Isnani, 235 SCRA 216 Eviota vs. Court of Appeals, 407 SCRA 394 [2003] 4. WHEN EMPLOYER-EMPLOYEE RELATIONSHIP DOES NOT EXIST Re: VALID JOB CONTRACTING ARRANGEMENTS 4.1 Management prerogative to contract out of services Asian Alcohol Corp vs. NLRC, 305 SCRA 416 [1999] Meralco vs. Quisumbing, 22 February 2000 4.2 Independent contractor/ Job-contracting vs. Labor-only contracting; requirements and negative list under Dept. Order No. 18-02 (Art. 106, LC; Dept. Order No. 18-02 [21 February 2002]) Philippine Airlines vs. Ligan, 548 SCRA 181 (2008). Escanias vs. Shangri-Las Mactan, G.R. No. 178827, 04 Mar 2009
Coca-Cola Bottlers vs. Dela Cruz, GR 184977, 07 Dec 2009

4.3 Examples Manufacturing company vs. forwarding agent

Temic Automotive Phils. vs. Temic Automotive Phils. Employees Union FFW, G.R. No. 18695, 23 December 2009

Television Company vs. Talent

Jose Sonza vs. ABS-CBN, G.R. No. 138051, 10 June 2004 Compare with: ABS-CBN vs. Nazareno, GR 164156, 26 Sept 2006 and Farley Fulache et al vs. ABS-CBN, GR 183810, 21 Jan 2010

Insurance company vs. commission agents Insular Life vs. NLRC, 179 SCRA 459 Shoe store vs. shoe-shine boys Besa vs. Trajano, 146 SCRA 501 Softdrinks company vs. agents selling softdrinks Mafinco vs. Ople, 70 SCRA 139 Company vs. collecting agents Singer Sewing Machine Co. vs. Drilon, 193 SCRA 270 Industrial Partner vs. employee Sy vs. CA, 398 SCRA 301 [27 Feb. 2003] Medical residency vs. employee Felix vs. Buenaseda, 240 SCRA 139 [1995]
UERM Memorial Medical Center Resident Doctors Union vs. Laguesma, GR 125425-26, [24 Nov. 1993] NEW RULING - CONTRA ON MEDICAL RESIDENCY: Calamba Medical Center, Inc. vs. NLRC, G.R. No. 176484, 25 November 2008

4.4 Liability of principal for unpaid wages of the employees of job contractor Solidary liability as to wages Development Bank of the Phils. Vs. NLRC, 233 SCRA 250
United Special Watchman Agency vs. CA, 405 SCRAS 432 [08 July 2003]

New Golden Builders & Development Corp. vs. CA, 418 SCRA 411 [11 Dec. 2003] also for service incentive leave pay and 13 th mo. pay Compare with: Liability of principal to labor-only contracting employees solidary liability as to ALL claims PCI Automation vs. NLRC, 252 SCRA 493 [1996] William Tiu vs. NLRC, 254 SCRA 1 [1996]

San Miguel Corp. vs. MAERC Integrated Systems, 405 SCRA 579 [10 July 2003]

4.5 Effect of DOLE Certification as legitimate job contractor Ramy Gallego vs. Baery Phils. G.R. No. 179807, 31 July 2009 Compare with: Coca Cola Bottlers vs. Ricky dela Cruz, supra. and Coca Cola Bottlers vs. Agito G.R.No. 179546, 13 Feb 09 5. Coverage of Labor Code, Art. 6: (Azucena Volume I, pp. 23-27; Fernandez, pp. 76-87) 5.1 Covered employment a. b. c. d. Industrial and agricultural employees Employees of labor organization Employees of independent contractor Employees of non-stock, non-profit organizations

5.2 Excluded employment a. Government employees

Republic vs. Court of Appeals, 180 SCRA 428
Manila Public School Teachers Assn. Vs. Laguio, 200 SCRA 323 Carino vs. Commission on Human Rights, 204 SCRA 283

Special circumstances: Government employees with CBA Abanilla vs. Comm on Audit, 468 SCRA 87 [2005] Compare with: Employees of GOCCs Lumanta vs. NLRC, 170 SCRA 79

b. Exempted employers c. Managerial employees, with respect to right to unionize d. Corporate Officers, SEC jurisdiction Prudential Bank vs. Clarita Reyes, 352 SCRA 316 [2001] Matling Industrial and Commercial Corporation vs. Coros G.R. No.. 157802, 13 October 2010
Renato Real vs. Sangu Philippines, Inc. G.R. No.168757, 19 January 2011

C. LABOR STANDARDS 1. WAGES

Art. 97, 98, 99, 101-119, LC; R7 and R8 B3 IRR LC 1.1 1.2 1.3 Exclusions from coverage Facilities vs. Supplements Wages vs. Salaries Gaa vs. CA. GR No. L-44169, 03 Dec 1985, 140 SCRA 304 Jose Songco vs. NLRC, GR No. L-50999, 23 Mar 1990, 182 SCRA 610 Payment of Wages (Art. 102-105, 110-11, LC; B3 R8 S1-8; Republic Act No. 6727, Sec. 7) LMG Chem vs. Secretary of Labor, GR 127422, 17 April 2001 North Davao Mining vs. NLRC, GR 112546, 13 March 1996 Aklan Electric vs. NLRC, 323 SCRA 258 Bonus, not part of basic salary/wage Protacio vs. Layang Mananghaya, GR 168654, 25 March 2009 Marcos vs. NLRC, GR 111744, 08 Sept 1995 Lepanto Ceramics vs. Lepanto Ceramics Employees Association, GR 180866, 02 March 2010 Non-diminution of benefits Manila Jockey Club Employees Union vs Manila Jockey Club, GR 16770, 07 March 2001 No work no pay principle Aklan Electric Cooperative vs. NLRC, 223 SCRA 288 [2000] vs. Equal pay for Equal work International School Alliance of Educators vs. Qusiumbing, GR No. 128845, 01 June 2000, 333 SCRA 13 Philex Gold vs. Philex Bulawan Supervisors Union, GR No. 149758, 25 Aug 2005, 468 SCRA 111 Prohibitions regarding Wages (Art. 112-119, LC; B3 R8 S9-11, IRR) Labor code provisions for wage protection Allowable deductions without employees consent Other deductions: Attorneys fees & union service fee in labor cases RCPI vs. Secretary of Labor, 179 SCRA 630 Commando Security vs. NLRC, 211 SCRA 645 Workers preference in case of bankruptcy DBP vs. Secretary of Labor, 179 SCRA 630 [1989] Contra: Effect if under receivership, Rubberworld Phils. Vs. NLRC, 336 SCRA 433

1.4

1.5

1.6

1.7

1.8

1.9

1.10 1.11

Minimum Wages and Wage distortion CBA vis--vis Wage Orders Republic Act No. 6727,Section 7; Rep Act No. 8188.

Cases for 1.10 and 1.11 ECOP vs. National Wages Productivity Commission, GR No. 96169, 24 Sept 1991, 210 SCRA 759 Prubankers Association vs. Prudential Bank, GR 131247, 25 Jan 1999, 302 SCRA 74 C. Planas Commercial vs. NWPC and RTWPB-NCR, G.R. No. 144619, 11 Nov 2005, 474 SCRA 608

2. HOURS OF WORK
Articles 82-93, Labor Code; B3 R1 S1-11, IRR 2.1 Exclusions from coverage Penaranda vs. Baganga Plywood, GR 159577, 03 May 2006, 489 SCRA 94 Remington Industrial vs. Castaneda, GR 169295-96, 20 Nov 2006, 507 SCRA 391 Govt employees, including GOCCs with original charters Managerial employees/staff NAWASA vs. NWSA Consolidated Unions, 11 SCRA 766 Field Personnel San Miguel Brewery vs. Democratic Labor Union, 8 SCRA 613 Family members Domestic helpers and persons in the personal service of another Workers paid by result Tan vs. Lagrima, 357 SCRA 393 [2002]
2.2 Normal hours of work: what is considered hours worked or time-in

Exceptions Health personnel Compressed Work Week DOLE Labor Advisory No. 02, s. 2004 (Implementation of Compressed workweek DOLE Advisory No. 02, s. 2009 (Guidelines on Adoption of Flexible Work Arrangements) 2.3 Hours worked (Art. 84, LC) Rada vs. NLRC, 205 SCRA 69 [1992] 2.4 Work interruption due to brownouts DOLE Policy Instruction No. 36 2.5 Meal Break

2.6 Idle time, waiting time, commuting time, travel time; whether part of hours of work or not 2.7 Overtime work Undertime not offset by overtime NAWASA vs. NWSA Unions, 118 SCRA 766 [1961] Waiver of overtime pay Cases on overtime: PALEA vs. PAL, GR L-31341 and 31343, 31 March 1996 PAL Employees Savings and Loans Assn vs. NLRC, GR 105963, 22 Aug 1996 Interphil Laboratories Ees Union-FFW vs. Interphil Lab., GR 142824, 19 Dec 2001 Acuna vs. CA, GR No. 159832, 05 May 2006 2.8 Night Work 2.9 CBA provision vis--vis overtime work

3. REST DAYS
3.1 3.2 3.3 3.4

Art 83-85, 89-92, LC; R1 S3-17, IRR; R1-A, S5-10, IRR; R3 S1-9, IRR Right to weekly rest day Preference of the employee When work on rest day authorized Premium Pay, Art. 91-93, LC; B3 R3, IRR

Cases: North Davao Mining Corp vs. NLRC, GR No. 112546, 13 Mar 1996, 254 SCRA 721 Lagatic vs. NLRC, GR 121004, 28 Jan 1998, 285 SCRA 251 Sime Darby Pilipinas vs. NLRC, GR 119205, 15 Apr 1998, 289 SCRA 86 Caltex Regular Employees vs. Caltex GR No. 111359, 15 Aug 1995

MIDTERM EXAMS