Labor Standards → The minimum requirements prescribed by existing laws rules and regulations relating

to wages, hours of work, cost of living allowance, and other monetary and welfare benefit, including
occupational safety and health standards.
Labor Relations →. Defines the status, rights and duties and institutional mechanism that govern the
individual and collective interactions of employers, employees or their representative
Declaration of basic Policy:
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.

Construction in favor of Labor:

Article 4 labor Code → All doubts in implementation and interpretation of the provisions of this code,
including it implementing rules and regulations shall be resolved in favor of labor.
7 Basic Rights of the workers:.
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.
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]
Limits of Social Justice:
Social justice should be used only to correct an injustice. It must be founded on the recognition of the
necessity of interdependence among diverse units of a society, and of the protection that should be equally
and evenly extended to all groups as a combined force in our social and economic life. As partners in
nation-building, labor and management need each other to foster productivity and economic growth; hence,
the need to weigh and balance the rights and welfare of both the employee and employer. [Agabon vs.
NLRC, 2004].
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.
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.
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.
Art. 1702 of the New Civil Code. In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer
Welfare State:
The welfare state concept is found in the constitutional clause on the promotion of social justice to ensure
the well-being and economic security of all the people, and in the pledge of protection to labor with specific
authority to regulate the relations between landowners and tenants and between labor and capital.
[Alalayan vs. National Power Corporation, 1968]
Doctrine of management Prerogative:
Every employee has the inherent right to regulate according to his own discretion and judgement all aspects
of employment, including hiring, work assignment, working methods, time, place and manner of work,
supervision and discipline, dismissal and recall of employees.
Limitations : Those imposed by labor laws and the principles of equity and substantial justice.

Premature Termination of Contract:

Where the workers employment contract is terminated before its agreed termination date and termination is
not shown to be based on lawful or valid ground, the employer will be ordered to pay the workers the
salaries corresponding the unexpired portion of the employment contract.

1. What is an Alien Employment Permit (AEP)? An Alien Employment Permit is a document issued by the
Department of Labor and Employment which authorizes a foreign national to work in the Philippines.

2. Who are the foreign nationals required to apply for an AEP?

1. All foreign nationals who intend to engage in gainful employment in the Philippines;
2. Foreign professionals who are allowed to practice their profession in the Philippines under
reciprocity and other international agreements and in consultancy services pursuant to Section 7(j)
of the PRC Modernization Act of 2000.
3. Holders of Special Investors Resident Visa (SIRV), Special Retirees Resident Visa (SRRV), Treaty
Traders Visa (9d) or Special Non-Immigrant Visa (47(a)2) for as long as they occupy any executive,
advisory, supervisory, or technical position in any establishment.
3. Who are exempted from securing AEP?

1. Members of the diplomatic services and foreign government officials accredited by the Philippine
government;
2. Officers and staff of international organizations of which the Philippine government is a
cooperating member, and their legitimate spouses desiring to work in the Philippines;
3. Foreign nationals elected as members of the Governing Board who do not occupy any other
position, but have only voting rights in the corporation;
4. All foreign nationals granted exemption by special laws and all other laws that may be
promulgated by the Congress;
5. Owners and representatives of foreign principals, whose companies are accredited by the
Philippine Overseas Employment Administration (POEA), who come to the Philippines for a
limited period solely for the purpose of interviewing Filipino applicants for employment abroad;
6. Foreign nationals who come to the Philippines to teach, present and/or conduct research studies
in universities and colleges as visiting, exchange or adjunct professors under formal agreements
between the universities or colleges in the Philippines and foreign universities or colleges; or
between the Philippine government and foreign government; provided that the exemption is on a
reciprocal basis; and
7. Resident foreign nationals and temporary or probationary resident visa holders employed or
seeking employment in the Philippines.

License vs. Authority

A license is a document issued by the Department of Labor and Employment (DOLE) authorizing a person
or entity to operate a private employment agency, while an authority is a document issued by the DOLE
authorizing a person or association to engage in recruitment and placement activities as a private
recruitment agency. [Art. 13(d) and (f), Labor Code]
NON-TRANSFERABILITY OF LICENSE OR AUTHORITY
Labor Code, Art. 29.
(1) No license or authority shall be used directly or indirectly by any person other than the one in whose
favor it was issued or at any place other than that stated in the license or authority,
(2) Nor may such license or authority be transferred, conveyed, or assigned to any other person or entity.
Any transfer of business address, appointment or designation of any agent or representative including the
establishment of additional offices anywhere shall be subject to the prior approval of the Department of
Labor.

License Authority
Authorize an entity Authorize an entity
to operate as a to operate as a
private employment private recruitment
agency entity
When a license is Does not entitle a
given, one is also private recruitment
authorized to collect entity to collect
fees fees.

Entities disqualified from being issued a license

(1) Travel agencies and sales agencies of airline companies. [Art. 26]
(2) Officers or members of the Board of any corporation or members in partnership engaged in the business
of a travel agency.
(3) Corporations and partnerships, when any of its officers, members of the board or partners, is also an
officer, member of the board of partner of a corporation or partnership engaged in the business of a travel
agency. (4) Persons, partnerships or corporations which have derogatory records.
(5) Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly
involved in the implementation of R.A. 8042 as amended and/or any of his/her relatives within the 4th civil
degree of consanguinity and affinity. [POEA Rules of 2002]

Citizenship requirement
(1) Only Filipino citizens or
(2) Corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting
capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the
recruitment and placement of workers, locally or overseas. [Art. 27, LC]

Capitalization:

Based on POEA Rules the following are the substantial capital requirements:
(1) Single proprietorships or partnerships with minimum capitalization of P2,000,000.
(2) Corporations with minimum paid-up capital of P2,000,000.

For local employment:

(1) Single proprietorships or partnerships with minimum capitalization of P200,000.
(2) Corporations with minimum paid-up capital of P200,000.

Illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring,
or procuring workers and includes referring, contract services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by non-licensee or non-holder of authority contemplated
under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the
Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for
a fee employment abroad to two or more persons shall be deemed so engaged.

Essential elements of illegal recruitment

Definition of recruitment and placement
“Recruitment and placement" refers to any act of (C-E-C-T-U-H)
(a) Canvassing,
(b) Enlisting,
(c) Contracting,
(d) Transporting,
(e) Utilizing, or
(f) Hiring procuring workers,
And also includes
(a) Referrals,
(b) Contract services,
(c) Promising, or
(d) Advertising for employment, locally or abroad, whether for profit or not

To determine which law applies, the place of work is the determining factor:
(1) If in the Philippines: Labor Code (LC) applies
(2) If abroad: Migrant Worker’s Act [R.A. 8042, as amended by R.A. 10022

Illegal recruitment for local workers [governed by the labor code]

Simple Illegal Recruitment
Elements:
(1) The person charged with the crime must have undertaken recruitment activities defined under Art. 13(b)
or prohibited activities defined under Art. 34; and
(2) The said person does not have a license or authority to do so. [Art. 38, LC]

Offense involving Economic Sabotage (Large-Scale or by a Syndicate)

Illegal recruitment is considered economic sabotage when the commission thereof is attended by the ff.
qualifying circumstances:

(1) By a syndicate - if carried out by a group of 3 or more persons conspiring and confederating with one
another;
(2) In large scale - if committed against 3 or more persons individually or as a group. [Art. 38(b), LC]

Illegal recruitment by a syndicate

(1) The accused has no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers; and
(2) The illegal recruitment is committed by a group of three or more persons conspiring or confederating
with one another. [People v. Gallo, 2010]

Illegal recruitment in large scale

(1) 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
(2) The accused commits the unlawful acts against three or more persons individually or as a group.
Illegal recruitment vs estafa
Illegal recruitment and estafa are entirely different offenses and neither one necessarily includes or is
necessarily included in the other. A person who is convicted of illegal recruitment may, in addition, be
convicted of estafa by false pretenses or fraudulent acts. In the same manner, a person acquitted of illegal
recruitment may be held liable for estafa. Double jeopardy will not set in because illegal recruitment is
malum prohibitum, in which there is no necessity to prove criminal intent, whereas estafa is malum in se, in
the prosecution of which, proof of criminal intent is necessary. [Rosita Sy vs. People of the Philippines,
2010]

Theory of imputed knowledge - This is a doctrine in agency which states that “ the principal is chargeable
with and bound by the knowledge of or notice to his agent received while the agent was acting as such.”
Simply put, notice to the agent is notice to the principal

Common Rules on Illegal Recruitment

[Local or Overseas]
Venue: A criminal action arising from illegal recruitment shall be filed with the RTC of the province or city:
(1) where the offense was committed or
(2) where the offended party actually resides at the time of the commission of the offense. [Sec. 9, R.A. 8042
[this part was not amended by R.A. 10022]].
Prescriptive Periods:
(1) Simple Illegal Recruitment – 5 years
(2) Illegal Recruitment involving Economic Sabotage – 20 years. [Sec. 12, R.A. 8042 (this part was not
amended by R.A, 10022.

Pre-Termination of Contract of Migrant Worker

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 his placement fee and the deductions made with interest at twelve percent (12%)
per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for
every year of the unexpired term, whichever is less. [Sec. 10, R.A. 8042, as amended by R.A. 10022].

GOVERNMENT EMPLOYEES
The terms and conditions of employment of all government employees, including employees of GOCCs, are
governed by the Civil Service rules and regulations, not by the Labor Code. But this exclusion DOES NOT
refer to employees of government agencies and government corporations that are incorporated under the
Corporation Code.

"Managerial Employees" – Refer to those whose primary duty consists of the management of the
establishment in which they are employed or of a department or subdivision thereof, and to other officers or
members of the managerial staff. [Art. 82, LC].

FIELD PERSONNEL (Not entitled for overtime play)

"Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from
the principal place of business or branch office of the employer and whose actual hours of work in the field
cannot be determined with reasonable certainty. [Art. 82, LC].
NORMAL HOURS OF WORK
General Rule: 8-Hour Labor Law
The normal hours of work of any employee shall not exceed eight (8) hours a day. [Art. 83, LC]
The law prescribes a maximum and not a minimum. Thus, part-time work, or a day’s work less than eight
hours, is not prohibited.

Exception to the 8-Hour Law: Work Hours of Health Personnel

Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in
hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for
eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the
service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall
be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on
the sixth day.

For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists,
dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives,
attendants and all other hospital or clinic personnel. [Art. 38, LC] Note: Medical secretaries are also considered
clinic personnel. [Azucena].

Compressed Work Week (CWW)

Note: SEE DOLE Advisory No. 02, Series of 2004

Under the CWW scheme, the normal workday goes beyond eight hours without the corresponding overtime premium.
The total hours of work, however, shall not exceed 12 hours a day or 48 hours a week, or the employer is obliged to
pay the worker the overtime premium in excess of said work hours.
Conditions for CWW
(1) The CWW scheme is undertaken as a result of an express and voluntary agreement of majority of the covered
employees or their duly authorized representatives. This agreement may be expressed through collective bargaining
or other legitimate workplace mechanisms of participation such as labor management councils, employee assemblies
or referenda.
(2) In firms using substances, chemicals and processes or operating under conditions where there are airborne
contaminants, human carcinogens or noise prolonged exposure to which may pose hazards to employees‘ health and
safety, there must be a certification from an accredited health and safety organization or practitioner from the firm‘s
safety committee that work beyond eight hours is within threshold limits or tolerable levels of exposure, as set in the
OSHS.
(3) The employer shall notify DOLE, through the Regional Office having jurisdiction over the workplace, of the
adoption of the CWW scheme. The notice shall be in DOLE CWW Report Form attached to this Advisory. (DOLE
Advisory No. 02-04).

Overtime compensation is additional pay for service or work rendered or performed in excess of eight hours a day by
employees or laborers covered by the Eight-hour Labor Law. [National Shipyard and Steel Corp. v. CIR, 1961].

Overtime on ordinary working day

Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for
the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five
percent (25%) thereof. [Art. 87, LC].
Overtime work on holiday or rest day
Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation
equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%)
thereof. [Art. 87, LC]

Emergency or overtime
Any employee may be required by the employer to perform overtime work in any of the following cases:
(1) When the country is at war or when any other national or local emergency has been declared by the
National Assembly or the Chief Executive;
(2) When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due
to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon,
earthquake, epidemic, or other disaster or calamity;
(3) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid
serious loss or damage to the employer or some other cause of similar nature;
(4) When the work is necessary to prevent loss or damage to perishable goods; and
(5) Where the completion or continuation of the work started before the eighth hour is necessary to prevent
serious obstruction or prejudice to the business or operations of the employer. [Art. 89, LC]

Overtime pay does not preclude night differential pay

When the tour of duty of a laborer falls at nighttime [between 10:00pm and 6:00am], the receipt of overtime
pay will not preclude the right to night differential pay. The latter is payment for work done during the night
while the other is payment for the excess of the regular eight-hour work. [Naric v. Naric Workers Union,
1959].

Compensation for work rendered in excess of the eight (8) normal working hours in a day.
a. For ordinary days, additional 25% of the basic hourly rate.
b. For rest day/special day/holiday, additional 30% of the basic hourly rate.

NIGHT WORK
Art. 86. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his
regular wage for each hour of work performed between ten o‘clock in the evening and six o‘clock in the
morning.
This Rule (On night shift differential) covers all employees except:
(1) Those of the government and any of its political subdivisions, including government-owned and/or
controlled corporations;
(2) Those of retail and service establishments regularly employing not more than five (5) workers;
(3) Domestic helpers and persons in the personal service of another;
(4) Managerial employees as defined in Book Three of this Code; 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.
When employer may require work on a rest day. The employer may require his employees to work on any
day:
a) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public
safety;
b) In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious
loss which the employer would otherwise suffer;
c) In the event of abnormal pressure of work due to special circumstances, where the employer cannot
ordinarily be expected to resort to other measures;
d) To prevent loss or damage to perishable goods;
e) Where the nature of the work requires continuous operations and the stoppage of work may result in
irreparable injury or loss to the employer; and
f) Under other circumstances analogous or similar to the foregoing as determined by the Secretary of
Labor and Employment.
WHEN WORK PREMIUM PAY
PERFORMED
On scheduled rest 30% of regular
day wage
On Sunday ONLY 30% of regular
IF wage
ESTABLISHED
rest day
No regular work 30% of regular
and rest days wage for work
performed on
Sundays and
holidays
On any special 30% of regular
holiday/special day wage
On any special 50% of regular
holiday /special day wage
falling on
scheduled rest day
On any regular 230% of regular
holiday falling on wage
scheduled rest day

Holiday pay is a one-day pay given by law to an employee even if he does not work on a regular holiday.
This gift of a day‘s pay is limited to each of the eleven regular holidays.

General Rule: All employees

Exceptions:
(1) Those of the government and any of the political subdivision, including government-owned and
controlled corporation;
(2) Those of retail and service establishments regularly employing less than 10 workers;
(3) Domestic helpers and persons in the personal service of another;
(4) Managerial employees as defined in Book III
(5) Field personnel and other employees whose time and performance is unsupervised by the employer
including those who are engaged on task or contract basis, purely commission basis, or those who are paid
a fixed amount for performing work irrespective of the time consumed in the performance thereof. (Sec. 1,
Rule IV of the IRR)
(6) Retail and service establishments regularly employing less than ten (10) workers

Art. 94(a): Every worker shall be paid his regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10) workers
IRR of RA 6727 or the Wage Rationalization Act
f) "Retail Establishment" is one principally engaged in the sale of goods to end-users for personal or
household use;
g) "Service Establishment" is one principally engaged in the sale of service to individuals for their own or
household use and is generally recognized as such;

RA 9492, Sec. 26: Unless otherwise modified by law, and or proclamation, the following regular holidays
and special days shall be observed in the country:
Regular Holidays
(1) New year‘s Day - January 1
(2) Maundy Thursday - Movable date
(3) Good Friday - Movable date
(4) Eidul Fitr - Movable date
(5) Araw ng Kagitingan- Monday nearest April 9 (Bataan and Corregidor Day)
(6) Labor Day - Monday nearest May 1
(7) Independence Day - Monday nearest June 12
(8) National Heroes Day - Last Monday of August
(9) Bonifacio Day - Monday nearest November 30
(10) Christmas Day - December 25
(11) Rizal Day - Monday nearest December 30

Nationwide Special Holidays

(1) Ninoy Aquino Day - Monday nearest August 21
(2) All Saints Day - November 1
(3) Last Day of the Year - December 31

In the event the holiday falls on a Wednesday, the holiday will be observed on the Monday of the week. If
the holiday falls on a Sunday, the holiday will be observed on the Monday that follows.
Provided, That for movable holidays, the President shall issue a proclamation, at least six months prior
to the holiday concerned, the specific date that shall be declared as a nonworking day
Provided, however, The Eidul Adha shall be celebrated as a regional holiday in the Autonomous Region
in Muslim Mindanao.

Work on any 200% of regular

regular holiday, not daily wage
exceeding 8 hours
Work on any 200% of regular
regular holiday, if it daily wage (for the
exceeds 8 1st 8 hours)
hours/overtime + 30% of hourly
rate on said day
Work on any 200% of regular
regular holiday daily wage + 30%
which falls on the of such amount
scheduled rest day,
not exceeding 8
hours
Work on any Regular holiday-
regular holiday on-rest day rate
which falls on (200% of regular
scheduled rest day, daily wage plus
if it exceeds 8 30% of such
hours/overtime amount) + 30% of
hourlyrate on said
day.
Work on special Regular daily wage
holiday not + 30% thereof
exceeding 8 hours
Work on special Regular daily wage
holiday + 50% thereof
P.D. 1083 (Code of Muslim Personal Laws) SEE: Arts. 169-173
Muslim Holidays
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 twenty-seventh (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) of the twelfth (12th) lunar month of Dhu‘l-
Hijja.

Double holiday pay

According to ―DOLE Explanatory Bulletin on Worker‘s Entitlement to Holiday Pay on 9 April 1993,‖ if
two holidays fall on the same day:

(1) If unworked, 200% of basic wage.

(2) If worked, 300% of basic wage. (Azucena
Art. 95. Right to service incentive leave.
A. Every employee who has rendered at least one year of service shall be entitled to a yearly service
incentive leave of five days with pay.
SIL 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. (Sec. 1, Rule V,
Implementing Rules and Regulations

Managerial employees – or one who is vested with powers or prerogatives to lay down and execute
managerial policies and/or hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees
or to effectively recommend such managerial actions. All employees not falling within this definition shall be
considered rank and file employees.

Apprentice → A worker who is covered by a written apprenticeship agreement with an individual employer.
A person undergoing training for an approved apprenticeable occupation during an apprenticeship
agreement
Apprenticeship‖ means practical training on the job supplemented by related theoretical instruction.
Apprenticeable occupation‖ means any trade, form of employment or occupation which requires more than
three (3) months of practical training on the job supplemented by related theoretical instruction.
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.

"Learners"→ refers to persons hired as trainees in semi-skilled and other industrial occupations which
are non-apprenticeable. Learnership programs must be approved by the authority.
…[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
What are the features of Apprenticeship Training?
(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.

1. Distinctions Learnership
between
Learnership and
Apprenticeship
Apprenticeship
Highly technical Semi-skilled
industries industrial
occupations
Practical training Practical training
supplemented by whether or not such
related theoretical practical training is
instruction supplemented by
theoretical
instructions
Apprenticeable Non-apprenticeable
occupations occupations
approved by the
SOLE
Written apprentice Learnership
agreement ratified agreement
by the appropriate
committees
More than three Shall not exceed 3
months, shall not months
exceed six months

(1) The person is at (1) When no

least fifteen (15) experienced
years of age, workers are
provided those who available;
are at least fifteen (2) The employment
(15) years of age of learners is
but less than necessary to
eighteen (18) may prevent curtailment
be eligible for of employment
apprenticeship only opportunities; and
in non-hazardous (3) The employment
occupation; does not create
(2) The person is unfair competition
physically fit for the in terms of labor
occupation in which costs or impair or
he desires to be lower working
trained; standards.
(3) The person
possesses
vocational aptitude
and capacity for the
particular
occupation as
established through
appropriate tests;
and
(4) The person is
able to comprehend
and follow oral and
written instructions

Wage rate shall Wage rate shall

begin at not less begin at not less
than 75% of the min than 75% of the min
wage wage
No compensation Learners in
if SOLE authorizes, piecework shall be
as OJT is required paid in full for the
by the school work done.

- Deductibility of ½ - A commitment to
of training costs employ the learners
incurred, provided: if they so desire, as
Program is duly regular employees
recognized by upon completion of
DOLE the learnership.
Deduction shall - All learners who
not exceed 10% of have been allowed
direct labor wage or suffered to work
Payment of during the first two
minimum wage to (2) months shall be
apprentices deemed regular
employees if
training is
terminated by the
employer before the
end of the
stipulated period
through no fault of
the learners.
What are the features of Learnership?
(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

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 conductwith respect to the means and methods by which the
work is to be accomplished.

Power to control is the most important element.

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.

DO No. 18-02, Section 5: Labor-only contracting is hereby declared prohibited. For this purpose, labor-
only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits,
supplies or places workers to perform a job, work or service for a principal, and any of the following
elements are present:
(1) The contractor or subcontractor does not have substantial capital or investment which relates
to the job, work or service to be performed and the employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are directly related to the main business of the
principal; or
(2) The contractor does not exercise the right to control over the performance of the work of the contractual
employee…
"Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of
corporations, tools, equipment, implements, machineries and work premises, actually and directly used by
the contractor or subcontractor in the performance or completion of the job, work or service contracted out.
The "right to control" shall refer to 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.
Wage → The remuneration of earnings, however designated capable of being express in terms of money,
whether fixed or ascertained on a time, task. piece or commission basis or other methods of computing the
same, which is payable by an employer to an employee under a written or unwritten contract of employment
for a work done or services rendered or to be rendered an includes the fair and reasonable value as
determined by the Secretary of Labor and Employment, of board, lodging or other facilities customarily
furnished by the employer to the employee. Fair Reasonable Value shall not include profit to the employer
or to any person affiliated with the employer.
Exclusions:
1. Farm tenancy or leasehold.
2. Household or domestic helpers including family drivers and other persons in the personal
service of another.
3. Homeworkers engaged in needlework
4. Workers in registered cottage industry who actually work at home.
5. Workers in registered cooperatives when so recommended by the Bureau of Cooperative
Development upon the approval of the Secretary of Labor.
6. Workers in registered barangay micro business enterprise.
Facilities vs. Supplements:
1. Facilities are articles or services/items of expenses while supplements are extra
remuneration or special benefits/articles or services/tools of trade.
2. Facilities are for the benefits of the employee and his family; for their existence and
subsistence, while supplements are for the benefit and convenience of the employer.
3. Facilities are part of wage so it is wage deductible while supplements are independent of
wage so not deductible.
Requirements for deducting value of facilities:
1. Customarily furnished by trade.
Customarily is founded in long-established and constant practice connoting
regularity.
2. Voluntarily accepted in writing by the employee.
3. Charged at fair and reasonable value.