UST Golden Notes 2011 - Labor Standards PDF

FUNDAMENTAL PRINCIPLES AND POLICIES
LABOR LAW 3. Social legislation – It includes laws that

provide particular kinds of protection or
Q: What is labor? benefits to society or segments thereof in
furtherance of social justice.
A: It is the exertion by human beings of physical or e.g. GSIS Law, SSS Law, Philhealth benefits
mental efforts, or both, towards the production of
goods and services. Q: Is there any distinction between labor
legislation and social legislation? Explain.
Q: What is labor law?
A: Labor legislation is sometimes distinguished from
A: The law governing the rights and duties of the social legislation by the former referring to labor
employer and employees with respect to: statutes, like Labor Relations Law and Labor
Standards, and the latter to Social Security Laws.
1. The terms and conditions of employment Labor legislation focuses on the rights of the worker
and in the workplace.
2. Labor disputes arising from collective
bargaining (CB) respecting such terms and Social legislation is a broad term and may include
conditions. not only laws that give social security protection,
but also those that help the worker secure housing
Q: What is the purpose of labor legislation? and basic necessities. The Comprehensive Agrarian
Reform Law could also be considered a social
A: Labor legislation is an exercise of police power. legislation. All labor laws are social legislation, but
The purpose of labor legislation is to regulate the not all social legislation is labor law. (1994 Bar
relations between employers (Ers) and employees Question)
(Ees) respecting the terms and conditions of
employment, either by providing for certain Q: What are the sources of labor laws?
standards or for a legal framework within which
better terms and conditions of work could be A:
negotiated through CB. It is intended to correct the 1. Labor Code and other related special
injustices inherent in Er‐Ee relationship. (2006 Bar legislation
Question) 2. Contract
3. Collective Bargaining Agreement
Q: What are the classifications of labor law? 4. Past practices
5. Company policies
A:
1. Labor standards – The minimum terms A. FUNDAMENTAL PRINCIPLES AND POLICIES
and conditions of employment prescribed
by existing laws, rules and regulations 1.CONSTITUTIONAL PROVISIONS
relating to wages, hours of work, cost‐of‐
living allowance and other monetary and Q: What are the constitutional mandates with
welfare benefits. (Batong Buhay Gold regard labor laws?
Mines, Inc. v. Dela Serna, G.R. No. 86963,
August 6,1999) A:
th
e.g. 13 month pay 1. Sec. 3, Art. XIII – The State shall afford full
2. Labor relations – Defines and regulates protection to labor, local and overseas,
the status, rights and duties, and the organized and unorganized, and promote
institutional mechanisms, that govern the full employment and equality of
individual and collective interactions of employment opportunities for all.
Ers, Ees, or their representatives. It is
concerned with the stabilization of It shall guarantee the rights of all workers
relations of Er and Ees and seek to to self‐organization, collective bargaining
forestall and adjust the differences and negotiations, and peaceful concerted
between them by the encouragement of activities, including the right to strike in
collective bargaining and the settlement accordance with law. They shall be
of labor disputes through conciliation, entitled to security of tenure, humane
mediation and arbitration. conditions of work, and a living wage.
e.g. Additional allowance pursuant to They shall also participate in policy and
CBA decision‐making processes affecting their
1
ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES II U N I V E R S I T Y O F S A N T O T O M A S
VICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA
VICE CHAIR FOR ADMINISTRATION AND FINANCE: JEANELLE C. LEE Facultad de Derecho Civil
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ

UST GOLDEN NOTES 2011
rights and benefits as may be provided by provides incentives to needed

law. investments.

The State shall promote the principle of 9. Sec. 1, Art. III ‐ No person shall be
shared responsibility between workers deprived of life, liberty, or property
and employers and the preferential use of without due process of law, nor shall any
voluntary modes in settling disputes, person be denied the equal protection of
including conciliation, and shall enforce the laws.
their mutual compliance therewith to
foster industrial peace. The State shall 10. Sec. 4, Art. III ‐ No law shall be passed
regulate the relations between workers abridging the freedom of speech, of
and employers, recognizing the right of expression, or of the press, or the right of
labor to its just share in the fruits of the people peaceably to assemble and
production and the right of enterprises to petition the government for redress of
reasonable returns to investments, and to grievances.
expansion and growth.
11. Sec. 8, Art. III – The right of the people,
2. Sec. 9, Art. II – The State shall promote a including those employed in the public
just and dynamic social order that will and private sectors, to form unions,
ensure the prosperity and independence associations, or societies for purposes not
of the nation and free the people from contrary to law shall not be abridged.
poverty through policies that provide
adequate social services, promote full 12. Sec. 1, Art. XIII ‐ The Congress shall give
employment, a rising standard of living, highest priority to the enactment of
and an improved quality of life for all. measures that protect and enhance the
right of all the people to human dignity,
3. Sec. 10, Art II ‐ The State shall promote reduce social, economic, and political
social justice in all phases of national inequalities, and remove cultural
development. inequities by equitably diffusing wealth
and political power for the common good.
4. Sec. 11, Art II ‐ The State values the
dignity of every human person and To this end, the State shall regulate the
guarantees full respect for human rights. acquisition, ownership, use, and
disposition of property and its
5. Sec. 13, Art. II ‐ The State recognizes the increments.
vital role of the youth in nation‐building
and shall promote and protect their 13. Sec. 2, Art. XIII ‐ The promotion of social
physical, moral, spiritual, intellectual, and justice shall include the commitment to
social well‐being. It shall inculcate in the create economic opportunities based on
youth patriotism and nationalism, and freedom of initiative and self‐reliance.
encourage their involvement in public and
civic affairs. 14. Sec. 14, Art. XIII – The State shall protect
working women by providing safe and
6. Sec. 14, Art. II ‐ The State recognizes the healthful working conditions, taking into
role of women in nation‐building, and account their maternal functions, and
shall ensure the fundamental equality such facilities and opportunities that will
before the law of women and men. enhance their welfare and enable them to
realize their full potential in the service of
the nation.

7. Sec. 18, Art. II – The State affirms labor as Q: What is the State policy on labor as found in the
a primary social economic force. It shall constitution (Sec. 3, Art. XIII)?
protect the rights of workers and
promote their welfare. A:
1. Afford full protection to labor
8. Sec. 20, Art. II ‐ The State recognizes the 2. Promote full employment
indispensable role of the private sector, 3. Ensure equal work opportunities
encourages private enterprise, and regardless of sex, race, or creed
2
LABOR LAW TEAM:
ADVISER: ATTY. JOEVEN D. DELLOSA; SUBJECT HEAD: ANGELO S. DIOKNO; ASST. SUBJECT HEADS: KAREN SABUGO, GENESIS R. FULGENCIO
MEMBERS: PALMA CLARISSA V. CARILLO, RANDOLPH IAN CLET, MICHAEL AARON P. GACUTAN, LORRAINE TAGUIAM

4. Assure the rights of workers to self safety and decent living for the
organization, security of tenure, just and laborer.
humane conditions of work, participate in d. Art. 1703 – No contract which
policy and decision‐making processes practically amounts to involuntary
affecting their right and benefits servitude, under any guise
5. Regulate the relations between workers whatsoever, shall be valid.
and employers
2. Revised Penal Code
Q: What are the basic rights of workers Art. 289 – Formation, maintenance and
guaranteed by the Constitution (Sec. 3, Art. XIII)? prohibition of combination of capital or
labor through violence or threats. – Any
A: person who, for the purpose of
1. Security of tenure organizing, maintaining or preventing
2. Receive a living wage coalitions or capital or labor, strike of
3. Humane working conditions laborers or lock‐out of employees, shall
4. Share in the fruits of production employ violence or threats in such a
5. Organize themselves degree as to compel or force the laborers
6. Conduct collective bargaining or or employers in the free and legal
negotiation with management exercise of their industry or work, if the
7. Engage in peaceful concerted activities act shall not constitute a more serious
including strike offense in accordance with the provisions
8. Participate in policy and decision making of the RPC.
processes
3. Special Laws
Q: What is the principle of non‐oppression? a. GSIS Law
th
b. 13 Month Pay Law
A: The principle mandates capital and labor not to c. Retirement Pay Law
act oppressively against each other or impair the d. SSS Law
interest and convenience of the public. The e. Paternity Leave Act
protection to labor clause in the Constitution is not f. Anti – Child Labor Act
designed to oppress or destroy capital. (Capili v. g. Anti – Sexual Harassment Act
NLRC, G.R. No. 117378, Mar. 26, 1997) h. Magna Carta for Public Health
Workers
2.NEW CIVIL CODE AND OTHER LAWS i. Solo Parents Welfare Act of 2000
j. National Health Insurance Act as
Q: What are other related laws to labor? amended by R.A. 9241
k. Migrant Workers and Overseas
A: Filipinos Act of 1995 as amended by
1. Civil Code RA 10022
a. Art. 1700 – The relations between l. PERA Act of 2008
capital and labor are not merely m. Home Development Mutual Fund
contractual. They are so impressed Law of 2009
with public interest that labor n. The Magna Carta of Women
contracts must yield to the common o. Comprehensive Agrarian Reform Law
good. Therefore, such contracts are as amended by R.A. 9700
subject to the special laws on labor
unions, collective bargaining, strikes 3.LABOR CODE
and lockouts, closed shop, wages,
working conditions, hours of labor Q: What is the aim of labor laws?
and similar subjects.
b. Art. 1701 – Neither capital nor labor A: The justification of labor laws is social justice.
shall act oppressively against the Social justice is “neither communism, nor
other, or impair the interest or despotism, nor atomism, nor anarchy,” but the
convenience of the public. humanization of laws and the equalization of social
c. Art. 1702 – In case of doubt, all labor and economic force by the State so that justice in
legislation and all labor contracts its rational and objectively secular conception may
shall be construed in favor of the at least be approximated. Social justice means the
promotion of the welfare of all the people, the
3

adoption by the government of measures A: No, the Constitution provides that the State shall

calculated to insure economic stability of all the afford full protection to labor. Furthermore, the
competent elements of society, through the State affirms labor as a primary economic force. It
maintenance of a proper economic and social shall protect the rights of workers and promote
equilibrium in the interrelations of the members of their welfare. (1998 Bar Question)
the community, constitutionally, through the
adoption of measures legally justifiable, or extra‐ a.Art. 3. Declaration of Basic Policy
constitutionally, through the exercise of powers
underlying the existence of all governments on the Q: What is the policy of the State as regards labor
time‐honored principle of salus populi est suprema as found in the Labor Code (Art. 12)?
lex. (Calalang v. Williams, G.R. No. 47800, Dec. 2,
1940) A:
1. Promote and maintain a State of full
Q: What is “compassionate justice”? employment through improved
manpower training, allocation and
A: It is disregarding rigid rules and giving due weight utilization;
to all equities of the case. 2. Protect every citizen desiring to work
locally or overseas by securing for him the
e.g: Employee validly dismissed may still be given best possible terms and conditions of
severance pay. employment;
3. Facilitate a free choice of available
Q: How should doubts in the implementation and employment by persons seeking work in
interpretation of the Labor Code (LC) and its conformity with the national interest;
Implementing Rules and Regulations (IRR) be 4. Facilitate and regulate the movement of
resolved? workers in conformity with the national
interest;
A: They should be resolved in favor of labor. 5. Regulate the employment of aliens,
including the establishment of a
Q: What is the concept of liberal approach in registration and/or work permit system;
interpreting the LC and its IRR? 6. Strengthen the network of public
employment offices and rationalize the
A: The workers' welfare should be the paramount participation of the private sector in the
consideration in interpreting the LC and its IRR. recruitment and placement of workers,
This is rooted in the constitutional mandate to locally and overseas, to serve national
afford full protection to labor. (PLDT v. NLRC, G.R. development objectives;
No. 111933, July 23, 1997). It underscores the 7. Ensure careful selection of Filipino
policy of social justice to accommodate the workers for overseas employment in
interests of the working class on the humane order to protect the good name of the
justification that those who have less in life shall Philippines abroad.
have more in law. (PAL v. Santos, G.R. No. 77875,
Feb. 4, 1993). (2006 Bar Question) Q: What are the reasons for affording greater
protection to employees?
Q: Art. 4 of the LC provides that in case of doubt in
the implementation and interpretation of the A:
provisions of the LC and its IRR, the doubt shall be 1. Greater supply than demand for labor;
resolved in favor of labor. Art. 1702 of the Civil and
Code also provides that in case of doubt, all labor 2. Need for employment by labor comes
legislation and all labor contracts shall be from vital and desperate necessity.
construed in favor of the safety and decent living (Sanchez v. Harry Lyons Construction Inc.,
of the laborer. G.R. L‐2779, Oct. 18, 1950)

Mica‐Mara Company assails the validity of these Q: Are all labor disputes resolved in favor of labor?
statutes on the ground that they violate its
constitutional right to equal protection of the A: No. The law also recognizes that management
laws. Is the contention of Mica Mara Company has rights which are also entitled to respect and
tenable? Discuss fully. enforcement in the interest of fair play. (St. Lukes
Medical Center Ees Ass’n v. NLRC, G.R. No. 162053,
Mar. 7, 2007)
4
LABOR LAW TEAM:

1. One employed in an agricultural or farm

b.Art. 5. Rules and Regulations enterprise,
2. Performs tasks which are directly related
Q: Who is given the “rule‐making power”? to agricultural activities of the Er, and
3. Any activities performed by a farmer as
A: The Department of Labor and other gov’t an incident to farming operations.
agencies charged with the administration and
enforcement of the Labor Code or any of its parts d.Art. 211. Declaration of Policy
shall promulgate the necessary implementing rules
and regulations. Such rules and regulations shall Q: What are the policy objectives of our labor
become effective 15 days after announcement of relations law?
their adoption in newspapers of general circulation.
A: The state aims to promote:
Q: What are the limitations to the “rule‐making 1. Free collective bargaining (CB) and
power” given to the Secretary of Labor and negotiations, including voluntary
Employment and other gov’t agencies? arbitration, mediation and conciliation as
modes of settling labor or industrial
A: It must: disputes;
1. Be issued under the authority of the law 2. Free trade unionism;
2. Not be contrary to law and the 3. Free and voluntary organization of a
Constitution strong and united labor movement;
4. Enlightenment of workers concerning
c.Art. 6. Applicability their rights and obligations as union
members and as Ees;
Q: To whom shall all rights and benefits under the 5. Adequate administrative machinery for
LC apply? the expeditious settlement of labor or
industrial disputes;
A: GR: All rights and benefits granted to workers 6. Stable but dynamic and just industrial
under the LC shall apply alike to all workers, peace;
whether agricultural or non‐agricultural. 7. Participation of workers in the decision‐
making processes affecting their rights,
XPN: duties and welfare;
1. Government employees (Ees) 8. Truly democratic method of regulating
2. Ees of government corporations created the relations between the Ers and Ees by
by special or original charter means of agreements freely entered into
3. Foreign governments through CB, no court or administrative
4. International agencies agency or official shall have the power to
5. Corporate officers/ intra‐corporate set or fix wages, rates of pay, hours of
disputes which fall under P.D. 902‐A and work or other terms and conditions of
now fall under the jurisdiction of the employment, except as otherwise
regular courts pursuant to the Securities provided under the LC.
Regulation Code (SRC).
6. Local water district except where NLRC’s e.Art. 212. Definitions
jurisdiction is invoked.
7. As may otherwise be provided by the LC Q: Who is an employer (Er)?

Q: What is the test in determining whether a GOCC A: Any person acting in the interest of an Er,
is subject to the Civil Service Law? directly or indirectly. The term does not include a
labor organization (LO) or any of its officers and
A: It is determined by the manner of their creation. agents, except when acting as an Er. (Art.212[e])
Gov’t corporations that are created by special
(original) charter from Congress are subject to Civil An Er is defined as any person or entity that
Service rules, while those incorporated under the employs the services of others; one for whom work
General Corporation Law are covered by the LC. and who pays their wages of salaries; any person
acting in the interest of an Er; refers to the
Q: Who is an agricultural/farm worker? enterprise where the LO operates or seeks to
operate. (Sec.1[s], Rule I, Book V, IRR)
A:
Q: When is a labor organization deemed an Er?
5

A: When it is acting as such in relation to persons or representation of persons in
rendering services under hire, particularly in negotiating, fixing, maintaining or
connection with its activities for profit or gain. changing terms or conditions of
employment.
Note: The mere fact that respondent is a labor union
does not mean that it cannot be considered an Er for
persons who work for it. Much less should it be Q: What are the kinds of labor disputes?
exempted from labor laws. (Bautista v. Inciong, G.R.
No. L‐52824, Mar. 16, 1988) A:
1. Labor standard disputes
Q: Who is an employee (Ee)? a. Compensation – E.g. Underpayment
of minimum wage; stringent output
A: quota; illegal pay deductions
1. Any person in the employ of the Er b. Benefits – E.g. Non‐payment of
2. Any individual whose work has ceased as holiday pay, OT pay or other benefits
a result of or in connection with any c. Working Conditions – E.g. Unrectified
current labor dispute or because of any work hazards
unfair labor practice if he has not
obtained any other substantially 2. Labor relations disputes
equivalent and regular employment
3. One who has been dismissed from work a. Organizational right disputes/ULP –
but the legality of dismissal is being E.g. Coercion, restraint or
contested in a forum of appropriate interference in unionization efforts;
jurisdiction. (D.O. No. 40‐03, Mar. 15, reprisal or discrimination due to
2003) union activities; company unionism;
Note: The term shall not be limited to the Ees of a
ULP, strike or lockout; union
particular Er unless the LC explicitly states.
members’ complaint against union
Any Ee, whether employed for a definite period or not, officers
shall, beginning on the first day of service, be b. Representation disputes – E.g.
considered an Ee for purposes of membership in any Uncertainty as to which is the
labor union. (Art. 277[c], LC) majority union; determination of
appropriate CB unit; contests for
Q: What is a labor dispute? recognition by different sets of
officers in the same union
A: Includes any controversy or matter concerning: c. Bargaining disputes – E.g. Refusal to
bargain; bargaining in bad faith;
1. Terms and conditions of employment, or bargaining deadlock; economic strike
2. The association or representation of or lockout
persons in negotiating, fixing, d. Contract administration or personnel
maintaining, changing or arranging the policy disputes – E.g. Non‐
terms and conditions of employment compliance with CBA provision (ULP
3. Regardless of whether the disputants if gross non compliance with
stand in the proximate relation of Er and economic provisions); disregard of
Ee. (Art.212[l]) grievance machinery; non
observance of unwarranted use of
union security clause; illegal or
Q: What are the tests on whether a controversy unreasonable personnel
falls within the definition of a labor dispute? management policies; violation of
no‐strike/no‐lockout agreement
A: e. Employment tenure disputes – E.g.
Non‐regularization of Ees; non‐
1. As to nature – It depends on whether the absorption of labor only contracting
dispute arises from Er‐Ee relationship, staff; illegal termination; non‐
although disputants need not be issuance of employment contract
proximately “Er” or “Ee” of another.
Q: Who are the parties to a dispute?
2. As to subject matter – The test depends
on whether it concerns terms or
conditions of employment or association
6
LABOR LAW TEAM:

A: A: The Labor Organization designated or selected

1. Primary parties are the Er, Ees and the by the majority of the employees in an appropriate
union. collective bargaining unit shall be the exclusive
2. Secondary parties are the voluntary representative of the employees in such unit for the
arbitrator, agencies of DOLE, NLRC, purpose of collective bargaining. However, an
Secretary of Labor and the Office of the individual employee or group of employees shall
President. have the right at any time to present grievances to
their employer. (As amended by Sec. 22, R.A. No.
Q: What is an inter‐union dispute? 6715, Mar. 15, 1989)

A: Any conflict between and among legitimate labor Q: What is the extent of the worker’s right to
unions involving representation questions for the participate in policy and decision‐making
purposes of CB or to any other conflict or dispute processes in a company?
between legitimate labor unions.
A: Such right refers not only to formulation of
Q: What is an intra‐union dispute? corporate programs and policies but also to
participation in grievance procedures and voluntary
A: Any conflict between and among union modes of settling disputes.
members, grievances arising from any violation of
the rights and conditions of membership, violation Q: Explain the extent of the workers’ right to
of or disagreement over any provision of the participate in policy and decision‐making process
union’s constitution and by‐laws, or disputes from as provided under Art. XIII, Sec. 13 of the 1987
chartering or affiliation of union. Constitution. Does it include membership in the
Board of Directors of a corporation?
Q: What are rights disputes?
A: No. In Manila Electric Company v. Quisumbing,
A: They are claims for violations of a specific right G.R. No. 127598, January 27, 1999, the SC
arising from a contract, i.e. CBA or company recognized the right of the union to participate in
policies. policy formulation and decision making process on
matters affecting the Union members’ rights, duties
Q: What are interest disputes?
and welfare. However, the SC held that such
participation of the union in committees of Er
A: They involve questions on “what should be
Meralco is not in the nature of a co‐management
included in the CBA”. Strictly speaking, the parties
control of the business of Meralco. Impliedly,
may choose a voluntary arbitrator to decide on the
therefore, workers’ participatory right in policy and
terms and conditions of employment, but this is
decision‐making processes does not include the
impracticable because it will be a value judgment of
right to put a union member in the Corporation’s
the arbitrators and not of the parties.
Board of Directors. (2008 Bar Question)
Q: What are contract–negotiation disputes?
Q: May an Er solicit questions, suggestions and
A: These are disputes as to the terms of the CBA. complaints from Ees even though the Ees are
represented by a union?
Q: What are contract–interpretation disputes?
A: Yes, provided:
A: These are disputes arising under an existing CBA,
involving such matters as the interpretation and 1. The CB representative executes an
application of the contract, or alleged violation of agreement waiving the right to be present
its provisions. on any occasion when Ee grievances are
being adjusted by the Er; and
f.Art. 255. Exclusive Bargaining Representation 2. Er acts strictly within the terms of his
(EBR) and Worker’s Participation in Policy and waiver agreement.
Decision Making
Q: The hotel union filed a Notice of Strike with the
Q: Who shall be the bargaining representative of NCMB due to ULP against the Diamond Hotel who
the Employees for purposes of collective refused to bargain with it. The hotel advised the
bargaining? union that since it was not certified by the DOLE as
the exclusive bargaining agent, it could not be
7

recognized as such. Whether the Union may

bargain collectively?

A: No. Art. 255 of the LC declares that only the
labor organization designated or selected by the
majority of the Ees in an appropriate collective
bargaining (CB) unit is the exclusive representative
of the employees (Ees) in such unit for the purpose
of CB. The union is admittedly not the exclusive
representative of the majority of the Ees of the
hotel, hence, it could not demand from the hotel
the right to bargain collectively in their behalf.
(Manila Diamond Hotel v. Manila Diamond Hotel
Ees Union, G.R. No. 158075, June 30, 2006)

Q: Are probationary Ees allowed to vote at the
time of the certification elections?

A: Yes. Under Art. 255 of the LC the “labor
organization designated or selected by the majority
of the Ees in an appropriate bargaining unit shall be
the exclusive representative of the Ees in such unit
for purposes of CB.” CB covers all aspects of the
employment relation and the resultant CBA
negotiated by the certified union binds all Ees in the
bargaining unit. Hence, all rank and file Ees,
probationary or permanent, have a substantial
interest in the selection of the bargaining
representative. The LC makes no distinction as to
their employment status as basis for eligibility in
supporting the petition for certification election.
The law refers to "all" the Ees in the bargaining unit.
All they need to be eligible to support the petition is
to belong to the "bargaining unit." The provision in
the CBA disqualifying probationary Ees from voting
cannot override the constitutionally‐protected right
of workers to self‐organization, as well as the
provisions of the LC and its implementing rules on
certification elections and jurisprudence. A law is
read into, and forms part of, a contract. Provisions
in a contract are valid only if they are not contrary
to law, morals, good customs, public order or public
policy. (NUWHRAIN‐MPHC v. SLE, G.R. No. 181531,
July 31, 2009)

8
LABOR LAW TEAM:

RECRUITMENT AND PLACEMENT
B. RECRUITMENT AND PLACEMENT 3. Members of the diplomatic corps (but

hiring must go through POEA)
1. RECRUITMENT OF LOCAL AND MIGRANT 4. Public employment offices
WORKERS 5. Private recruitment offices
6. Private employment agencies
a.Recruitment and Placement 7. POEA
8. Shipping or manning agents or
Q: Who is a worker? representatives
9. Name hires
A: Any member of the labor force, whether
employed or unemployed. (Art. 13 [a], LC) Q: Who are name hires?

Q: What is recruitment and placement? A: They are individual workers who are able to
secure contracts for overseas employment on their
A: own efforts and representations without the
1. Any act of canvassing, enlisting, assistance or participation of any agency. Their
contracting, transporting, utilizing, hiring hiring, nonetheless, shall pass through the POEA for
or procuring workers; and processing purposes. (Part III, Rule III, POEA Rules
2. Includes referrals, contact services, Governing Overseas Employment as amended in
promising or advertising for employment, 2002)
locally or abroad, whether for profit or
not. (Art. 13 [b],LC) Q: What if employment is offered to only one
person?
Q: What are the essential elements in determining
whether one is engaged in A: Immaterial. The number of persons dealt with is
recruitment/placement? not an essential ingredient of the act of recruitment
and placement of workers. The proviso merely lays
A: It must be shown that: down a rule of evidence that where a fee is
collected in consideration of a promise or offer of
1. The accused gave the complainant the employment to 2 or more prospective workers, the
distinct impression that she had the individual or entity dealing with them shall be
power or ability to send the complainant deemed to be engaged in the act of recruitment
for work, and placement. The words "shall be deemed"
2. Such that the latter was convinced to part create that presumption. (People v. Panis, G.R. L‐
with his money in order to be so 58674‐77, July 11, 1986)
employed. (People v. Goce, G.R. No.
113161, Aug. 29, 1995) Q: What is a private employment agency?

Q: Who is deemed engaged in recruitment and A: Any person or entity engaged in the recruitment
placement? and placement of workers for a fee which is
charged, directly or indirectly, from the workers or
A: Any person or entity which, in any manner, employers or both.
offers or promises for a fee employment to 2 or
more persons. (Art. 13[b], LC) Q: What is a private recruitment agency?

Q: What is the rule in recruitment and placement? A: It is any person or association engaged in the
recruitment and placement of workers without
A: GR: No person or entity other than the public charging any fee, directly or indirectly, from the
employment offices, shall engage in the workers or employers.
recruitment and placement of workers
Q: Who is a seaman?
XPN:
1. Construction contractors if authorized by A: Any person employed in a vessel engaged in
the DOLE and Construction Industry maritime navigation.
Authority
2. Other persons or entities as may be Q: What is overseas employment?
authorized by the SLE
9

A: It is employment of a worker outside the and executory orders within the period of

Philippines. validity of its license
2. Violations of the conditions of license
Q: Who is an overseas Filipino worker (OFW)? 3. Engaging in acts of misrepresentation for
the purpose of securing a license or
A: A person who is to be engaged, is engaged or has renewal
been engaged in a remunerated activity in a State 4. Engaging in the recruitment or placement
of which he or she is not a citizen or on board a of workers to jobs harmful to the public
vessel navigating the foreign seas other than a health or morality or to the dignity of the
government ship used for military or non‐ country. (Sec. 3, Rule I, Book VI, Rules and
commercial purposes or on an installation located Regulations Governing Overseas
offshore or on the high seas; to be used Employment)
interchangeably with migrant worker. (Sec.2, R.A.
10022 amending R.A. 8042) Q: What are the grounds for suspension or
cancellation of license?
Q: Who is an emigrant?
A:
A: Any person, worker or otherwise, who emigrates 1. Prohibited acts under Art. 34
to a foreign country by virtue of an immigrant visa 2. Publishing job announcements w/o
or resident permit or its equivalent in the country POEA’s approval
of destination. 3. Charging a fee which may be in excess of
the authorized amount before a worker is
b.Illegal Recruitment, Art. 38 (Local), Sec. 6, Migrant employed
Workers Act, RA 8042 4. Deploying workers w/o processing
through POEA
(a)License v. Authority 5. Recruitment in places outside its
authorized area. (Sec. 4, Rule II, Book IV,
Q: What is a license? POEA Rules)

A: It is issued by DOLE authorizing a person or Q: Is the license or authority transferable?
entity to operate a private employment agency.
A: No, they are non‐transferable. (Art. 29)
Q: What is an Authority?
Q: A Recruitment and Placement Agency declared
A: It is a document issued by the DOLE authorizing voluntary bankruptcy. Among its assets is its
a person or association to engage in recruitment license to engage in business. Is the license of the
and placement activities as a private recruitment bankrupt agency an asset which can be sold in
entity. public auction by the liquidator?

Q: Who is a non‐licensee / non‐holder of A: No, because of the non‐transferability of the
authority? license to engage in recruitment and placement.
The LC (Art. 29) provides that no license to engage
A: Any person, corporation or entity: in recruitment and placement shall be used directly
or indirectly by any person other than the one in
1. Which has not been issued a valid license whose favor it was issued nor may such license be
or authority to engage in recruitment and transferred, conveyed or assigned to any other
placement by the Secretary of Labor and person or entity. It may be noted that the grant of
Employment (SLE) or a license is a governmental act by the DOLE based
2. Whose license or authority has been on personal qualifications, and citizenship and
suspended, revoked or cancelled by the capitalization requirements. (Arts.27‐28, LC). (1998
POEA or the SLE Bar Question)

Q: What are the grounds for revocation of license? Note: Change of ownership or relationship of a single
proprietorship licensed to engage in overseas
A: employment shall cause the automatic revocation of
1. Incurring an accumulated 3 counts of the license.
suspension by an agency based on final
Q: Concerned Filipino contract workers in the
Middle East reported to the DFA that XYZ, a
10
LABOR LAW TEAM:

private recruitment and placement agency, is (b)Illegal Recruitment

covertly transporting extremists to terrorist
training camps abroad. Intelligence agencies of the Q: What are the elements of Illegal Recruitment?
gov’t allegedly confirmed the report. Upon being
alerted by the DFA, the DOLE issued orders A:
cancelling the licenses of XYZ, and imposing an 1. Offender is a non‐licensee or non‐holder
immediate travel ban on its recruits for the Middle of authority to lawfully engage in the
East. XYZ appealed to the Office of the President recruitment/placement of workers
to reverse and set aside the DOLE orders, citing 2. Offender undertakes:
damages from loss of employment of its recruits, a. Any act of canvassing, enlisting,
and violations of due process including lack of contracting, transporting, utilizing,
notice and hearing by DOLE. The DOLE in its hiring or procuring workers, and
answer claimed the existence of an emergency in includes referrals, contact services,
the Middle East which required prompt measures promising or advertising for
to protect the life and limb of OFWs from a clear employment, locally or abroad,
and present danger posed by the ongoing war whether for profit or not (Art. 13[b]);
against terrorism. Should the DOLE orders be or
upheld or set aside? b. Any of prohibited practices under
Art. 34
A:
1. The DOLE order cancelling the licenses of Q: When is there Simple Illegal Recruitment?
XYZ is void because a report that an A: It is considered simple illegal recruitment when
agency is covertly transporting extremists it involves less than three (3) victims or recruiters.
is not a valid ground for cancellation of a
Certificate of Registration (Art. 239, LC Q: Larry Domingo was accused of the crime of
and there is failure of due process as no illegal recruitment. He argued that he issued no
hearing was conducted prior to the receipt or document in which he acknowledged as
cancellation (Art. 238, LC). having received any money for the promised jobs.
Hence, he should be free him from liability. Was
2. The DOLE order imposing the travel ban is Larry engaged in recruitment activities?
valid because it is a valid exercise of
police power to protect the national A: Yes. Even if at the time Larry was promising
interest (Sec. 3, Art. XIII, Constitution on employment no cash was given to him, he is still
full protection to labor safety of workers) considered as having been engaged in recruitment
and on the rule making authority of the activities, since Art.13(b) of the LC states that the
SLE. (Art. 5, LC; Phil. Ass’n. of Service act of recruitment may be for profit or not. It
Exporters v. Drilon, G.R. No. 81958, June suffices that Larry promised or offered employment
30, 1988). (2004 Bar Question) for a fee to the complaining witnesses to warrant
his conviction for illegal recruitment. (People v.
Q: Who are the persons prohibited from engaging Domingo, G.R. No. 181475, April 7, 2009, J. Carpio‐
the business of recruiting migrant workers? Morales)

A: Q: What is the difference between the LC and R.A.
1. Unlawful for any official or Ee of the: 8042 or the Overseas Filipinos and Overseas
a. DOLE Migrant Workers Act?
b. POEA
c. Overseas Workers Welfare A:
Administration (OWWA) R.A. 8042, as amended by RA
LC (Art. 38)
d. DFA 10022
e. Other gov’t agencies involved in the Applies to recruitment for
implementation of this Act Local recruitment
overseas employment
th
2. Their relatives within the 4 civil degree Illegal recruitment Illegal recruitment under Sec. 6
of consanguinity or affinity, to engage, under Art. 38 means means any recruitment activity
directly or indirectly in the business of any recruitment committed by non‐licensees/
recruiting migrant workers. (Sec. 8, R.A. activity including non‐holders of authority or
8042) prohibited acts prohibited acts (same as Art.
under Art. 34 34, LC)
committed by non‐
11

licensees or non‐ Added to the following in the believed that her application for the renewal of
holders of authority. list of prohibited acts: her license would be approved. She adduced in
1. Failure to actually deploy evidence the Affidavits of Desistance which the
without valid reason; four private complainants had executed after the
2. Failure to reimburse prosecution rested its case. In the said affidavits,
expenses incurred by the they acknowledge receipt of the refund by
worker in connection with Maryrose of the total amount of P120,000.00 and
his/her documentation
indicated that they were no longer interested to
and processing for
pursue the case against her. Resolve the case with
purposes of deployment;
reasons.
3. To allow a non‐Filipino
citizen to head or
manage a licensed A: Illegal recruitment is defined by law as any
recruitment/ manning recruitment activities undertaken by non‐licenses
agency. or non‐holders of authority. (People v. Senoron,
G.R. No. 119160, Jan. 30,1997) And it is large scale
Q: How does one prove illegal recruitment? illegal recruitment when the offense is committed
against 3 or more persons, individually or as a
A: It must be shown that the accused gave the group. (Art. 38[b], LC) In view of the above,
distinct impression that he had the power or ability Maryrose is guilty of large scale illegal recruitment.
to send complainants abroad for work such that the Her defense of GF and the Affidavit of Desistance as
latter were convinced to part with their money in well as the refund given will not save her because
order to be deployed. R.A. No. 8042 is a special law, and illegal
recruitment is malum prohibitum. (People v. Saulo,
Q: May a licensee or holder of authority be held G.R. No. 125903, Nov. 15, 2000). (2005 Bar
liable for illegal recruitment? Question)

A: Yes, any person (whether non‐licensee, non‐ Q: Sometime in the month of March 1997, in the
holder of authority, licensee or holder of authority) City of Las Piñas, Bugo by means of false pretenses
who commits any of the prohibited acts, shall be and fraudulent representation convinced Dado to
liable for Illegal recruitment. (R.A. 8042) give the amount of P 120,000.00 for processing of
his papers so that he can be deployed to Japan.
Q: When is illegal recruitment considered as Dado later on found out that Bugo had
economic sabotage? misappropriated, misapplied and converted the
money to her own personal use and benefit. Can
A: When it is committed: Dado file the cases of illegal recruitment and
estafa simultaneously?
1. By a syndicate – carried out by 3 or more
persons conspiring/confederating with A: Yes, illegal recruitment and estafa cases may be
one another or filed simultaneously or separately. The filing of
2. In large scale – committed against 3 or charges for illegal recruitment does not bar the
more persons individually or as a group. filing of estafa, and vice versa. Bugo’s acquittal in
(Sec. 6, 10022) the illegal recruitment case does not prove that she
is not guilty of estafa. Illegal recruitment and estafa
Q: While her application for renewal of her license are entirely different offenses and neither one
to recruit workers for overseas employment was necessarily includes or is necessarily included in the
still pending Maryrose Ganda recruited Alma and other. A person who is convicted of illegal
her 3 sisters, Ana, Joan, and Mavic, for recruitment may, in addition, be convicted of estafa
employment as housemates in Saudi Arabia. under Article 315, par. 2(a) of the RPC. In the same
Maryrose represented to the sisters that she had a manner, a person acquitted of illegal recruitment
license to recruit workers for overseas may be held liable for estafa. Double jeopardy will
employment and demanded and received not set in because illegal recruitment is malum
P30,000.00 from each of them for her services. prohibitum, in which there is no necessity to prove
However, her application for the renewal of her criminal intent, whereas estafa is malum in se, in
license was denied, and consequently failed to the prosecution of which, proof of criminal intent is
employ the 4 sisters in Saudi Arabia. The sisters necessary. (Sy v. People, G.R. No. 183879, April 14,
charged Maryrose with large scale illegal 2010)
recruitment. Testifying in her defense, she
declared that she acted in good faith because she Q: Distinguish Illegal Recruitment from Estafa
12
LABOR LAW TEAM:

agent at the time of the transaction or acquired by
A: him before its completion, is deemed to be the
ILLEGAL RECRUITMENT ESTAFA knowledge of the principal, at least so far as the
Malum in se, transaction is concerned, even though in fact the
thus: knowledge is not communicated to the principal at
Malum prohibitum, thus:
1. criminal intent is all. (Leonor v. Filipinas Compania, 48 OG 243)
1. Criminal intent is NOT
necessary
necessary
2. crime which Q: Sunace International Management Services
2. it is a crime which involves
involves moral (Sunace), deployed to Taiwan Montehermozo as a
moral turpitude
turpitude domestic helper under a 12‐month contract
effective Feb. 1, 1997. The deployment was with
Accused defrauded the assistance of a Taiwanese broker, Edmund
another by abuse of Wang, President of Jet Crown International Co.,
It is not required that it be
confidence, or by
shown that the recruiter Ltd. After her 12‐month contract expired on Feb.
means of deceit
wrongfully represented 1, 1998, Montehermozo continued working for her

himself as a licensed Taiwanese employer for two more years, after
NOTE: It is essential
recruiter which she returned to the Philippines on Feb. 4,
that the false
statement or 2000. Shortly after her return she file before the
NOTE: It is enough that the fraudulent NLRC against Sunace, one Perez, the Taiwanese
victims were deceived as they representation broker, and the employer‐foreign principal alleging
relied on the constitutes the very
misrepresentation and scheme that she was jailed for three months and that she
cause or the only was underpaid. Should Sunace be held liable for
that caused them to entrust motive which induces
their money in exchange of the underpayment for the additional two years
the complainant to part
what they later discovered was with the thing of value that she worked for her Taiwanese employer
a vain hope of obtaining under the theory of imputed knowledge?

employment abroad

A: No, the theory of imputed knowledge ascribes
Illegal recruitment and estafa cases may be filed the knowledge of the agent, Sunace, to the
simultaneously or separately. The filing of charges for principal Taiwanese employer, not the other way
illegal recruitment does not bar the filing of estafa, and around. The knowledge of the principal‐foreign
vice versa. employer cannot, therefore, be imputed to its
Double jeopardy will not set agent Sunace.

(c) Liabilities There being no substantial proof that Sunace knew
of and consented to be bound under the 2‐year
Q: What is the liability of the private employment employment contract extension, it cannot be said
agency and the principal or foreign‐based to be privy thereto. As such, it and its owner
employer? cannot be held solidarily liable for and of
Montehermozo’s claims arising from the 2‐year
A: They are jointly and severally liable for any employment extension. (Sunace v. NLRC, G.R. No.
violation of the recruitment agreement and the 161757, Jan. 25, 2006)
contracts of employment.
(d)Pretemination of contract of migrant worker
Note: This joint and solidary liability imposed by law
against recruitment agencies and foreign Ers is meant Q: Serrano, a seafarer, was hired by Gallant
to assure the aggrieved worker of immediate and Maritime and Marlow Navigation Co. for 12
sufficient payment of what is due him. If the months as Chief Officer. On the date of his
recruitment/placement agency is a juridical being, the departure, he was constrained to accept a
corporate officers and directors and partners as the downgraded employment contract for the position
case may be, shall themselves be jointly and solidarily of Second Officer, upon the assurance that he
liable with the corporation or partnership for the would be made Chief Officer after a month. It was
claims and damages. (Becmen Service Exporter and not done; hence, he refused to stay on as Second
Promotion v. Cuaresma, G.R. Nos. 182978‐79, April 7,
Officer and was repatriated to the Phils. He had
2009)
served only 2 months & 7 days of his contract,

leaving an unexpired portion of 9 months & 23
Q: What is the theory of imputed knowledge?
days.

A: A rule in insurance law that any information
Serrano filed with the LA a Complaint against
material to the transaction, either possessed by the
Gallant Maritime and Marlow for constructive
13

dismissal and for payment of his money claims. the POEA or entities authorized by the Secretary of

The LA rendered a favorable decision to Serrano Labor.
awarding him $8,770.00, representing his salary
for 3 months of the unexpired portion of his Q: What is the ban on direct‐hiring?
contract of employment applying R.A. 8042, Sec
10, par 5: A: GR: An Er may only hire Filipino worker for
overseas employment through POEA or
Money Claims. ‐ In case of termination of overseas entities authorized by DOLE.
employment without just, valid or authorized
cause as defined by law or contract, the workers XPN:
shall be entitled to the full reimbursement of his Direct hiring by
placement fee with interest of 12% per annum, 1. International organizations
plus his salaries for the unexpired portion of his 2. Name hires
employment contract or for 3 months for every 3. Members of the diplomatic organizations
year of the unexpired term, whichever is less. 4. Other Ers as may be allowed by DOLE

Is the subject clause constitutional? Q: Why is direct‐hiring prohibited?

A: No. The subject clause contains a suspect A:
classification in that, in the computation of the 1. To ensure the best possible terms and
monetary benefits of fixed‐term employees who conditions of employment for the worker.
are illegally discharged, it imposes a 3‐month cap 2. To assure the foreign Er that he hires only
on the claim of OFWs with an unexpired portion of qualified Filipino workers.
one year or more in their contracts, but none on 3. To ensure full regulation of employment
the claims of other OFWs or local workers with in order to avoid exploitation.
fixed‐term employment. The subject clause singles
out one classification of OFWs and burdens it with a 2. REGULATION AND ENFORCEMENT
peculiar disadvantage.
a. Remittance of foreign exchange earnings
The clause is a violation of the right of Serrano and
other OFWs to equal protection and right to Q: What is the rule on remittance of foreign
substantive due process, for it deprives him of exchange earnings?
property, consisting of monetary benefits, without
any existing valid governmental purpose. A: GR: It shall be mandatory for all OFWs to remit a
portion of their foreign exchange earnings
Furthermore, prior to R.A. 8042, all OFWs, to their families, dependents, and/or
regardless of contract periods or the unexpired beneficiaries ranging from 50% ‐ 80%
portions thereof, were treated alike in terms of the depending on the worker’s kind of job.
computation of their monetary benefits in case of (Rule VIII, Book III, POEA Rules)
illegal dismissal. Their claims were subjected to a
uniform rule of computation: their basic salaries XPN:
multiplied by the entire unexpired portion of their 1. The worker’s immediate family members,
employment contracts. The same applies local beneficiaries and dependents are residing
workers with fixed‐term employment. with him abroad
2. Immigrants and Filipino professionals and
Thus, Serrano is entitled to his salaries for the employees working with the UN agencies
entire unexpired period of nine months and 23 days or specialized bodies
of his employment contract, pursuant to law and 3. Filipino servicemen working in U.S.
jurisprudence prior to the enactment of RA 8042. military installations. (Resolution No. 1‐
(Serrano v. Gallant Maritime Services & Marlow 83, Inter‐Agency Committee for
Navigation Co., Inc., G.R. No. 167614, Mar.24, 2009) Implementation of E.O. 857)

c.Direct Hiring Q: What is the effect of failure to remit?

Q: What is Direct‐hiring? A:
1. Workers – Shall be suspended or removed
A: It is when an employer hires a Filipino worker from the list of eligible workers for
for overseas employment without going through overseas employment.
14
LABOR LAW TEAM:

2. Employers – Will be excluded from the processing of pending workers'
overseas employment program. Private applications; and
employment agencies shall face 15. For a recruitment/manning agency or a
cancellation or revocation of their foreign principal/ Er to pass on the OFW
licenses or authority to recruit. (Sec. 9, or deduct from his or her salary the
E.O. 857) payment of the cost of insurance fees,
premium or other insurance related
b. Prohibited Activities charges, as provided under the
compulsory worker's insurance coverage
Q: What are prohibited practices in 16. Imposing a compulsory and exclusive
recruitment/placement (Art. 34.)? arrangement whereby an OFW is required
to:
A: a. Avail a loan only from specifically
1. Furnishing or publishing any false designated institutions, entities or
notice/information/document related to persons
recruitment/employment b. To undergo health examinations only
2. Failure to file reports required by SLE from specifically designated medical,
3. Inducing or attempting to induce a worker entities or persons, except seafarers
already employed to quit his employment whose medical examination cost is
in order to offer him another unless the shouldered by the shipowner
transfer is designed to liberate a worker c. To undergo training of any kind only
from oppressive terms and conditions from designated institutions, entities
4. Recruitment/placement of workers in or persons, except for
jobs harmful to public health or morality recommendatory trainings
or to the dignity of the country mandated by principals/shipowners.
5. Engaging directly or indirectly in the (Sec. 6, R.A. 10022)
management of a travel agency
6. Substituting or altering employment c. Regulatory and Visitorial Powers of the Labor
contracts without approval of DOLE Secretary
7. Charging or accepting any amount greater
than that specified by DOLE or make a Q: What are the regulatory powers of the
worker pay any amount greater than Secretary of Labor and Employment (SLE)?
actually received by him
8. Committing any act of misrepresentation A:
to secure a license or authority 1. Restrict and regulate the recruitment and
9. Influencing or attempting to influence any placement activities of all agencies
person/entity not to employ any worker 2. Issue orders and promulgate rules and
who has not applied of employment regulations
through his agency
10. Obstructing or attempting to obstruct Q: What constitute visitorial power?
inspection by SLE or by his
representatives A:
11. Withholding or denying travel documents 1. Access to employer’s records and
from applicant workers before departure premises at any time of the day or night,
for monetary considerations other than whenever work is being undertaken
authorized by law 2. To copy from said records
12. Granting a loan to an OFW which will be 3. Question any employee and investigate
used for payment of legal and allowable any fact, condition or matter which may
placement fees be necessary to determine violations or
13. Refusing to condone or renegotiate a loan which may aid in the enforcement of the
incurred by an OFW after his employment Labor Code and of any labor law, wage
contract has been prematurely order, or rules and regulation issued
terminated through no fault of his or her pursuant thereto.
own
14. For a suspended recruitment/manning Q: Give 4 instances where the visitorial power of
agency to engage in any kind of the SLE may be exercised under the Labor Code.
recruitment activity including the
A: Power to:
15

provisions or both
1. Inspect books of accounts and records of
any person or entity engaged in Non‐licensee/non‐ 4‐8 yrs imprisonment; or
holder of authority Fine: P20K ‐ P100K
recruitment and placement, require it to
violates provisions or both
submit reports regularly on prescribed
Corporation, Penalty imposed upon
forms and act in violations of any
partnership, officer/s responsible for
provisions of the LC on recruitment and association, or entity violation
placement. (Art. 37) Penalties prescribed under RA
2. Have access to employer’s records and 10022,
premises to determine violations of any Alien +
provisions of the LC on recruitment and Deportation without further
placement. (Art. 128) proceedings
3. Conduct industrial safety inspections of Automatic revocation of
establishments. (Art. 165) license or authority and all
4. Inquire into the financial activities of permits and privileges of the
In every case
legitimate labor organizations (LLO) and recruitment or manning

examine their books of accounts upon the agency, lending institutions,
filing of the complaint under oath and training school or medical
duly supported by the written consent of clinic
at least 20% of the total membership of
the LO concerned. Q: What are the remedies under the Migrant
Workers Act and how may they be enforced?
Q: Can SLE issue search warrants or warrants of
arrest? A:
CRIMINAL ACTIONS
A: No. Only a judge may issue search and arrest
RTC
warrants. Art 38 (c) of the Labor Code is
unconstitutional inasmuch as it gives the SLE the Province or city:
power to issue search or arrest warrants. The labor 1. Where the offense was committed or
authorities must go through the judicial process. 2. Where the offended party actually resides at the
same time of the commission of the offense
d. Penalties for Illegal Recruitment MONEY CLAIMS
NLRC
Q: What is the consequence of conviction of illegal Original and exclusive jurisdiction to hear and decide
recruitment (IR)? claims arising out of an Er‐Ee relationship or by virtue
of any law or contract involving Filipino workers for
A: overseas deployment including claims for actual,
PENALTIES (under R.A. 10022) moral, exemplary and other forms of damages.
• The liability of the principal/ Er and the recruitment/
Offender / Offense Penalty
placement agency for any and all claims shall be
IR as economic joint and several.
sabotage Life imprisonment + • The performance bond to de filed by the
fine of P2M‐P5M recruitment/ placement agency shall be answerable
Provided: for all money claims or damages that may be
1. If person illegally awarded to the workers.
recruited is below • If the recruitment/placement agency is a juridical
18 years of age or being, the corporate officers and directors and
2. Illegal Maximum penalty shall partners as the case may be, shall themselves be
recruitment is be imposed jointly and solidarily liable with the corporation or
committed by a partnership for the claims and damages.
non‐licensee/non‐
holder ADMINISTRATIVE ACTIONS
Any person found 12 yrs and 1 day ‐ 20 yrs POEA
guilty of illegal imprisonment; or
recruitment Fine: P1M‐P2M
Any person found 6 yrs and 1 day ‐ 12 yrs
guilty of the imprisonment; or
prohibited acts Fine of P500K ‐ P1M
Licensee/holder of 2‐5 yrs imprisonment; or
authority violates Fine: P10K ‐ P50K;
16
LABOR LAW TEAM:

Original and exclusive jurisdiction to hear and decide: Do OT and leave pay form part of the salary basis
1. All cases which are administrative in character, in the computation of the monetary award?
involving or arising out of violations of rules and
regulations relating to licensing and registration of A: No. The word “salaries” in Sec. 10(5) does not
recruitment and employment agencies or entities include overtime and leave pay. For seafarers,
and DOLE Department Order No. 33, series 1996,
2. Disciplinary action (DA) cases and other special cases provides a Standard Employment Contract of
which are administrative in character, involving Ers,
Seafarers, in which salary is understood as the basic
principals, contracting partners and Filipino migrant
wage, exclusive of OT, leave pay and other bonuses;
workers.
whereas OT pay is compensation for all work
a. It may be filed with the POEA Adjudication Office
or the DOLE/POEA regional office of the place “performed” in excess of the regular 8 hours, and
where the complaint applied or was recruited at holiday pay is compensation for any work
the option of the complainant. The office with “performed” on designated rest days and holidays.
which the complaint was first filed shall take (Serrano v. Gallant Maritime Services & Marlow
cognizance of the case. Navigation Co., Inc., G.R. No. 167614, Mar. 24,
b. DA cases and other special cases, as mentioned 2009)
in the preceding Section, shall be filed with
POEA Adjudication Office. 3.OTHER RELATED TOPICS
PERIODS
Philippine Overseas Employment Administration
Mandatory Period for Resolution of Illegal

Recruitment Cases
Q: What are the principal functions of the POEA?
The preliminary investigations (PI) of cases under R.A.
10022 shall be terminated within a period of 30
calendar days from the date of their filing. A:
If the PI is conducted by a If the PI is conducted by 1. Protection of the right of Filipino workers
prosecution officer and a a judge and a prima to fair and equitable employment
prima facie case is facie case is found to practices
established exist 2. Regulation of private sector participation
Prosecution officer in the recruitment and overseas
Information shall be filed
within 48 hours from the placement of workers by setting up a
in court within 24 hours
date of receipt of the licensing and registration system
from the termination of
records of the case. (Sec. 3. Deployment of Filipino workers through
the investigation
11) gov’t to gov’t hiring
Prescriptive Period for Illegal Recruitment Cases 4. Formulation, implementation, and
monitoring of overseas employment of
Simple Illegal Recruitment Economic Sabotage Filipino workers taking into consideration
Within 20 yrs from the their welfare and domestic manpower
Within 5 yrs from the time
time illegal recruitment requirements
illegal recruitment has
has happened. (Sec. 5. Shall inform migrant workers not only of
happened
12,R.A. 8042) their rights as workers but also of their
rights as human beings, instruct and guide
Q: Is compromise agreement on money claims the workers how to assert their rights and
allowed? provide the available mechanism to
redress violation of their rights. (Sec. 14,
A: Yes. Consistent with the policy encouraging R.A. 10022)
amicable settlement of labor disputes, Sec. 10 of 6. Implementation, in partnership with
R.A. 8042 allows resolution by compromise of cases other law‐enforcement agencies, of an
filed with the NLRC. intensified program against illegal
recruitment activities. (Sec. 14, R.A.
Q: When shall compromise agreements on money 10022)
claims be paid?
Q: May the POEA, at any time terminate or impose
A: Any compromise/amicable settlement or a ban on employment of migrant workers?
voluntary agreement on money claims inclusive of
damages shall be paid within 4 months from the A: Yes, in consultation with the DFA based on the
approval of the settlement by the appropriate ff. grounds:
authority.
2. In pursuit of the National Interest or
17

3. When public welfare so requires. (Sec. 4 3. It has concluded a bilateral agreement or

R.A. 10022) arrangement with the government on the
protection of the rights of OFWs. . (Sec. 3,
Q: What are the minimum conditions/ provisions R.A. 10022 amending R.A. 8042)
of overseas employment contracts?
Provided, that the receiving country is taking
A: positive, concrete measures to protect the rights of
1. Guaranteed wages for regular hours and migrant workers in furtherance of any of the
overtime, not lower than the minimum guarantees.
wage prescribed in all of the ff:
a. The host country Note: In the absence of a clear showing that any of the
b. Bilateral agreements or international guarantees exists in the country of destination of the
conventions ratified by the host migrant workers, no permit for deployment shall be
country and the Philippines issued by the POEA.
c. The Philippines
2. Free transportation to and from the Q: What is the rule on repatriation?
worksite or offsetting benefit
3. Free food and accommodation or A: GR: The repatriation of the:
offsetting benefit 1. Worker and the transport of his personal
4. Just/authorized causes of termination of belongings ‐ shall be the primary
the contract or services of the worker responsibility of the agency which
recruited or deployed the worker
Note: An agreement that diminishes the Ees pay and overseas.
benefits as contained in a POEA‐approved contract is 2. Remains and transport of the personal
void, unless such subsequent agreement is approved belongings of a deceased worker and all
by the POEA. costs attendant thereto ‐ shall be borne
by the principal and/or the local agency.
Q: What is the rule on deployment of OFWs?
XPNs:
A: The State shall allow the deployment of OFWs: 1. If the termination of employment is due
solely to the fault of the worker, the
1. Only in countries where the rights of principal/ Er or agency shall not be
Filipino migrant workers are protected. responsible for the repatriation of the
2. To vessels navigating the foreign seas or former and/or his belongings
to installations located offshore or on 2. In cases of war, epidemic, disaster or
high seas whose owners/Ers are calamities, natural or man‐made, and
compliant with international laws and other similar event, and where the
standards that protect the rights of principal or recruitment agency cannot be
migrant workers. identified, the Overseas Workers Welfare
3. To companies and contractors with Administration, in coordination with
international operations: Provided, That appropriate international agencies, shall
they are compliant with standards, take charge of the repatriation. (Sec.15,
conditions and requirements, as R.A. 8042)
embodied in the employment contracts
prescribed by the POEA and in accordance Q: What is the rule on mandatory repatriation of
with internationally‐accepted standards. underage migrant workers?
(Sec. 3, R.A. 10022 amending R.A. 8042)
A: Upon discovery or being informed of the
Q: What are the guarantees of the receiving presence of migrant workers whose ages fall below
country for the protection of the rights of OFWs? the minimum age requirement for overseas
deployment, the responsible officers in the foreign
A: service shall without delay repatriate said workers
1. It has existing labor and social laws and advise the DFA through the fastest means of
protecting the rights of workers, including communication available of such discovery and
migrant workers; other relevant information. The license of a
2. It is a signatory to and/or a ratifier of recruitment/manning agency which recruited or
multilateral conventions, declarations or deployed an underage migrant worker shall be
resolutions relating to the protection of automatically revoked and shall be imposed a fine
workers, including migrant workers; and
18
LABOR LAW TEAM:

of not less than P500,000 but not more than JURISDICTION
P1,000,000. (Sec. 9, R.A. 10022) Labor Arbiter POEA
Original and exclusive
Q: What are the regulatory and adjudicatory Original and exclusive jurisdiction over:
functions of the POEA? jurisdiction over all 1. All cases which are
claims arising out of administrative in character
A: Er‐Ee relationship or relating to licensing and
1. Regulatory – It regulates the private by virtue of any law or registration of recruitment
sector participation in the recruitment contract involving and employment agencies
OFWs including claims
and overseas placement of workers
for: 2. Disciplinary Action cases
through its licensing and registration
1. Actual and other special cases,
system.
2. Moral which are administrative in
2. Adjudicatory 3. Exemplary character, involving Ees,
a. Administrative cases involving 4.Other forms of principals, contracting
violations of licensing rules and damages. (Sec. 10, partners and Filipino migrant
regulations and registration of R.A. 8042) workers. (Rule VII, Book VII,
recruitment and employment POEA Rules)
agencies or entities
b. Disciplinary action cases and other Q: A seafarer was prevented from leaving the
special cases which are port of Manila and refused deployment without
administrative in character involving valid reason. His POEA‐approved employment
employers, principals, contracting contract provides that the employer‐employee
partners and Filipino migrants. relationship shall commence only upon the
seafarer’s actual departure from the port in the
Q: What are the grounds for disciplinary action of point of hire. Is the seafarer entitled to relief
OFW’s? under the Migrant Workers’ Act, in the absence of
an employer‐employee relationship?
A: Under R.A. 8042, these are:
1. Prostitution A: Yes. Despite the absence of an employer‐
2. Unjust refusal to depart for the worksite employee relationship, the NLRC has jurisdiction
3. Gunrunning or possession of deadly over the seafarer’s complaint. The jurisdiction of
weapons labor arbiters is not limited to claims arising from
4. Vandalism or destroying company Er‐Ee relationships. Sec. 10 of the Migrant Workers
property Act provides that the labor arbiters shall have
5. Violation of the laws and sacred practices jurisdiction over claims arising out of an Er‐Ee
of the host country and unjustified breach relationship or by virtue of any law or contract
of employment contract involving Filipino workers for overseas deployment
6. Embezzlement of funds of the company including claims for actual, moral, exemplary and
or fellow worker entrusted for delivery to other forms of damages. Since the present case
relatives in the Phils. involves the employment contract entered into by
7. Creating trouble at the worksite or in the petitioner for overseas employment, his claims are
vessel cognizable by the labor arbiters of the NLRC.
8. Gambling (Santiago v. CF Sharp Crew Management,G.R. No.
9. Initiating or joining a strike or work 162419, July 10, 2007)
stoppage where the laws of the host
country prohibits strikes or similar actions Q: What matters fall outside the jurisdiction of the
10. Commission of felony punishable by POEA?
Philippine laws or by the host country
11. Theft or robbery A:
12. Drunkenness 1. Foreign judgments – such claim must be
13. Drug addiction or possession or trafficking brought before regular courts. POEA is
of prohibited drugs not a court; it is an administrative agency,
14. Desertion or abandonment exercising adjudicatory or quasi‐judicial
functions.
Q: What is the distinction between the jurisdiction 2. Torts – falls under the provisions of the
of the LA and POEA? Civil Code.

A:
19

Employment of Non‐Resident Aliens XPNS:
1. Diplomatic services and foreign gov’t
Q: What is required in the employment of non‐ officials
resident aliens? 2. Officers and staff of int’l organizations
and their legitimate spouses
A: Any alien seeking admission to the Phil. for 3. Members of governing board who has
employment purposes and any domestic or foreign voting rights only
employer (Er) who desires to engage an alien for 4. Those exempted by special laws
employment in the Philippines: 5. Owners and representatives of foreign
1. Shall obtain an employment permit from principals who interview Filipino
the DOLE applicants for employment abroad
2. The permit may be issued to a non‐ 6. Aliens whose purpose is to teach, present
resident alien or to the applicant Er after and/or conduct research studies
a determination of the non‐availability of 7. Resident aliens. (D.O. 75‐06, May 31,
a person in the Phil. who is competent, 2006)
able and willing at the time of application
to perform the services for which the Q: May the non‐resident alien transfer
alien is desired employment after issuance of the employment
3. For an enterprise registered in preferred permit?
areas of investments, said permit may be
issued upon recommendation of the gov’t A: After the issuance of an employment permit, the
agency charged with the supervision of alien shall not transfer to another job or change his
said registered enterprise employer without prior approval of the Secretary of
Labor.
Q: The DOLE issued an alien employment permit
for Earl Cone, a U.S. citizen, as sports consultant Q: What is required for immigrants and resident
and assistant coach for GMC. Later, the Board of aliens?
Special Inquiry of the Commission on Immigration
and Deportation approved Cone’s application for a A: An Alien Employment Registration Certificate.
change of admission status from temporary visitor
to pre‐arranged employee. A month later, GMC Q: What is the duration of the employment
requested that it be allowed to employ Cone as permit?
full‐fledged coach. The Dole Regional Director
granted the request. The Basketball Association of A: GR: Minimum of 1 year
the Phils. appealed the issuance of said permit to
the SLE who cancelled Cone’s employment permit XPN: Unless revoked and subject to renewal
because GMC failed to show that there is no
person in the Philippines who is competent and Q: May aliens be employed in entities engaged in
willing to do the services nor that the hiring of nationalized activities?
Cone would redound to the national interest. Is
the act of SLE valid? A: GR: No.

A: Yes. GMC’s claim that hiring of a foreign coach is XPNs:
an Er’s prerogative has no legal basis. Under Art. 40 1. Sec. of Justice specifically authorizes the
of the LC, an Er seeking employment of an alien employment of technical personnel
must first obtain an employment permit from the 2. Aliens are elected members of the board
DOLE. GMC’s right to choose whom to employ is of directors or governing body of
limited by the statutory requirement of an corporations or associations or
employment permit. (GMC v. Torres, G.R. No. 9366, 3. Enterprises registered under the Omnibus
April 22, 1991) Investment Code in case of technical,
supervisory or advisory positions, but for
Art. 41. Prohibition Against Transfer of Employment a limited period.

Q: Who are required to obtain an employment
permit?

A: GR: Only non‐resident aliens;

20
LABOR LAW TEAM:

Art. 25. Private Sector Participation in the Q: Is a corporation, 70% of the authorized and

Recruitment and Placement of Workers voting capital of which is owned and controlled by
Filipino citizens, allowed to engage in the
Q: What are the entities in the private sectors that recruitment and placement of workers, locally or
can participate in recruitment and placement of overseas? Explain briefly.
workers?
A: No. It is because Art. 27 of the Labor Code
A: requires at least 75%. (2002 Bar Question)
1. Shipping or manning agents or
representatives Q: Who are disqualified to engage in the business
2. Private recruitment offices of recruitment and placement of workers?
3. Public employment offices
4. Construction contractors if authorized by A:
the DOLE and Construction Industry 1. Travel agencies and sales agencies of
Authority. airline companies; (Art. 26, LC)
5. Persons that may be authorized by the 2. Officers or members of the board of any
SLE corporation or members in a partnership
6. Private employment agencies. (Sec. 1, engaged in the business of a travel
Rule VII, Book I, IRR) agency;
3. Corporations and partnerships, when any
Q: What are the qualifications for participation in of its officers, members of the board or
recruitment and placement of workers? partners, is also an officer, member of the
board or partner of a corporation or
A: partnership engaged in the business of a
1. Filipino citizens, partnerships or travel agency;
corporations at least 75% of the 4. Persons, partnerships or corporations
authorized capital stock of which is which have derogatory records, such as
owned and controlled by Filipino citizens; but not limited to those:
(Art. 27, LC) a. Certified to have derogatory record
2. Capitalization or information by the NBI or by the
a. Single proprietorship or partnership Anti‐Illegal Recruitment Branch of
‐A minimum capitalization of P2 the POEA;
million b. Against whom probable cause or
b. Corporation prima facie finding of guilt for illegal
‐A minimum paid‐up capital of P2 recruitment or other related cases
million exists;
Provided, that those with existing licenses c. Convicted for illegal recruitment or
shall, within 4 yrs from the effectivity other related cases and/or crimes
hereof, increase their capitalization or involving moral turpitude; and
paid up capital, as the case may be, to P2 d. Agencies whose licenses have been
million at the rate of P250,000.00 every previously revoked or cancelled by
year. (Art. 28, LC) the POEA for violation of R.A. 8042,
3. Not otherwise disqualified by law or other P.D. 442 as amended and their
government regulations to engage in the implementing rules and regulations
recruitment and placement of workers for as well as these rules and
overseas employment. (Rule I, Part II, regulations.
POEA Rules) 5. Any official or Ee of the DOLE, POEA,
4. Payment of registration fees OWWA, DFA and other government
5. Posting of surety/cash bonds agencies directly involved in the
implementation of R.A. 8042 and/or any
th
Q: How will POEA regulate private sector of his/her relatives within the 4 civil
participation in the recruitment and overseas degree of consanguinity or affinity; and
placement of workers? 6. Persons or partners, officers and directors
of corporations whose licenses have been
A: By setting up a licensing and registration system. previously cancelled or revoked for
(Sec. 14, R.A. 10022) violation of recruitment laws. (Sec. 2, Rule
I, 2002 Rules and Regulations on the
21

Recruitment and Employment of Land‐

Based Workers)

Art. 26. Travel Agencies Prohibited to Recruit

Q: What is the rule on recruitment of travel
agencies and sales agencies of airline companies?

A: They are prohibited from engaging in the
business of recruitment and placement of workers
for overseas employment whether for profit or not.

Q: WTTA is a well‐known travel agency and an
authorized sales agent of the PAL. Since majority
of its passengers are overseas workers, WTTA
applied for a license for recruitment and
placement activities. It stated in its application
that its purpose is not for profit but to help
Filipinos find employment abroad. Should the
application be approved?

A: The application should be disapproved, as it is
prohibited by Art. 26 of the LC, to wit: "Art 26.
Travel agencies and sales agencies of airline
companies are prohibited from engaging in the
business of recruitment and placement of workers
for overseas employment whether for profit or
not." Rule I, Part II POEA Rules and Regulations
Governing the Recruitment and Employment of
Land‐Based Workers (2002) disqualifies any entity
having common director or owner of travel
agencies and sales agencies of airlines, including
any business entity from the recruitment and
placement of Filipino workers overseas, whether
they derive profit or not. (2006 Bar Question)

Art. 32. Fees to be Paid by Workers

Q: When may a worker be charged any fee?

A: Only when:

1. He has obtained work through recruiter’s
efforts, and
2. The worker has actually commenced
working

Note: A land based agency may charge and collect
from its hired workers a placement fee in an amount
equivalent to 1 month salary, exclusive of
documentation costs.

Q: What are the only authorized payments that
may be collected from a hired worker?

A:
1. Placement fee in an amount equivalent
to one month’s salary of the worker and
2. Documentation costs.
22
LABOR LAW TEAM:

LABOR STANDARDS
C. LABOR STANDARDS Q: Who are managerial Ees?

1. HOURS OF WORK A: Those whose primary duty consists of the
management of the establishment in which they
a. Coverage/ Exclusions are employed or a department or subdivision
thereof, and other officers or members of the
Q: Who determines working conditions? managerial staff.

A: Generally, they are determined by the employer, They must meet all of the ff. conditions, namely:
as he is usually free to regulate, according to his
discretion, all aspects of employment. 1. Primary duty: management of the
establishment in which they are
Q: What is the limitation on the employer’s power employed or of a department or sub‐
to regulate working conditions? division thereof;
2. Customarily or regularly direct the work
A: It must be done in good faith and not for the of 2 or more Ees
purpose of defeating or circumventing the rights of 3. Has the authority to hire or fire other Ees
the employees. Such are not always absolute and of lower rank; or their suggestions and
must be exercised with due regard to the rights of recommendations as to the hiring and
labor. firing and as to the promotion or any
change of status of other Ees are given
Note: One’s employment, profession, trade or calling particular weight.
is a property right and the wrongful interference 4. Execute under general supervision work
therewith is an actionable wrong. along specialized or technical lines
requiring special training, experience, or
Q: When does the condition on employment under knowledge
the Labor Code apply? 5. Execute under general supervision special
assignment and tasks; and
A: Only if an Er‐Ee relationship exists. 6. Do not devote more than 20% of their
hours worked to activities which are not
Q: Who are the employees that are covered by the directly and closely related to
conditions of employment? performance of the work described. (Art.
82[2])
A: GR: It applies to all Ee’s in all establishments.
Q: Why are managerial Ees not covered?
XPN:
1. Gov’t employees A: They are employed by reason of their special
2. Managerial employees training, expertise or knowledge and for positions
3. Field personnel requiring the exercise of discretion and
4. The employers family members who independent judgment. Value of work cannot be
depend on him for support measured in terms of hours.
5. Domestic helpers and persons in the
personal service of another, and Q: Who are field personnel?
6. Workers who are paid by results as
determined under DOLE regulations A: They are:

Q: Who are government employees (Ees)? 1. non‐agricultural employees
2. who regularly perform their duties
A: They are Ees of the: 3. away from the principal place of business
or branch office of the employer; and
1. National Government 4. whose actual hours of work in the field
2. Any of its political subdivisions cannot be determined with reasonable
3. Including those employed in GOCCs with certainty.
original charters.
Q: Who are workers paid by results?
Q: What law governs government Ees?
A: They are:
A: The Civil Service Law, rules and regulations.

23

1. paid based on the work completed; and A:
2. not on the time spent in working 1. All time during which an Ee is required to
3. including those who are paid on piece‐ be:
work, “takay”, “pakiaw”, or task basis if a. On duty, or
their output rates are in accordance with b. At the Ers premises, or
the standards prescribed. c. At a prescribed workplace

Q: Who are domestic helpers and persons in the 2. All time during which an Ee is suffered or
personal service of another? permitted to work. (Sec. 3, Rule I, Book III,
IRR)
A: Those who:
Q: What are the principles in determining hours
1. perform services in the employers (Er) worked?
home which are usually necessary or
desirable for the maintenance or A:
enjoyment thereof; or 1. All hours which the Ee is required to give
2. minister to the personal comfort, to his Er regardless of whether or not
convenience or safety of the Er as well as such hours are spent in productive labor
the members of his Ers household. or involve physical or mental exertion.
2. Rest period is excluded from hours
Q: A house personnel was hired by a ranking worked, even if Ee does not leave his
company official to maintain a staff house workplace, it being enough that:
provided for the official. The personnel is being a. He stops working
paid by the company itself. Is the house personnel b. May rest completely
a domestic servant of the company official? c. May leave his workplace, to go
elsewhere, whether within or
A: No, the personnel is not a domestic helper but a outside the premises of the
regular employee of the company. workplace
3. All time spent for work is considered
Q: What are the 3 groups of employees (Ees) hours worked if:
under the LC? a. The work performed was
necessary
A: b. If it benefited the Er
1. Managerial Ee ‐ One who is vested with c. Or the Ee could not abandon his
the powers or prerogatives to lay down work at the end of his normal
and execute management policies and/or working hours because he had
to hire, transfer, suspend, lay‐off, recall, no replacement
discharge, assign or discipline Ees. d. Provided, the work was with the
2. Supervisory Ee ‐ those who in the interest knowledge of his Er or
of the Er, effectively recommend such immediate supervisor
managerial actions if the exercise of such 4. The time during which an Ee is inactive by
authority is not merely routinary or reasons of interruptions in his work
clerical in nature but requires the use of beyond his control shall be considered
independent judgment. working time:
3. Rank‐and‐File Ee ‐ all Ees not falling within a. If the imminence of the
any of the above definitions. (Art. 212[m]) resumption of the work
requires the Ees presence at
b. Normal hours of work the place of work or
b. If the interval is too brief to be
Q: What are the normal hours of work of an Ee? utilized effectively and gainfully
in the Ees own interest. (Sec. 4,
A: It should not exceed 8 hours in a general working Rule I, Book III, IRR)
day.

Note: Normal hours of work may be shortened or
compressed.

Q: What are considered hours worked?
24
LABOR LAW TEAM:

LABOR STANDARDS
consultations with the workers and supervisors, a

(a) Exceptions: Health Personnel & Compressed consensus is reached on how to deal with
Work Week deteriorating economic conditions and it is
sufficiently proven that the company was suffering
Health Personnel from losses. Under the Bureau of Working
Conditions’ bulletin, a reduction of the number of
Q: What are the hours of work of health regular working days is valid where the
personnel? arrangement is resorted to by the employer to
prevent serious losses due to causes beyond his
A: GR: 8 hours/5 days (40‐hour work week), control, such as when there is a substantial slump in
exclusive of time for meals. the demand for his goods or services or when there
is lack of raw materials. There is one main
XPN: Where the exigencies of the service consideration in determining the validity of
require that such personnel work for 6 days or reduction of working hours – that the company was
48 hours, they shall be entitled to an additional suffering from losses. A year of financial losses
compensation of at least 30% of their regular would not justify a reduced workweek. (Linton
wage for work on the 6th day. Commercial v. Hellera, G.R. No. 163147, October 10,
2007)
Note: 40‐hour work week does not apply if there is a
training agreement between the resident physician Q: Under what conditions may a "compressed
and the hospital and the training program is duly
work week" schedule be legally authorized as an
accredited or approved by appropriate government
exception to the "8‐hour a day" requirement
agency.
under the LC?
Q: Who are covered by the 40‐hour work week?
A:

1. The Ee voluntarily agrees to it
A:
2. There is no diminution in their weekly or
1. Health personnel in cities and
monthly take home pay or fringe benefits
municipalities with a population of at
3. The benefits are more than or at least
least 1 million; or
commensurate or equal to what is due
2. Hospitals and clinics with a bed capacity
the Ees without the compressed work
of at least 100
week

4. OT pay will be due and demandable when
Note: Art. 83(2) do not require hospitals to pay the
they are required to work on those days
Ees a full weekly salary with paid 2 days off. (San
which should have ceased to be working
Juan de Dios Ees Assoc.‐AFW et al. vs. NLRC, G.R.
days because of the compressed work
No. 126383, Nov.28, 1997)
week schedule.

5. No strenuous physical exertion or that
Compressed Workweek
they are given adequate rest periods.

6. It must be for a temporary duration as
Q: What is a compressed workweek?
determined by the DOLE. (2005 Bar

Question)
A: The normal workweek is reduced to less than 6

days but the total number of work‐hours of 48
Q: What are the requisites for adoption of
hours per week shall remain. The normal workday is
compressed workweek?
increased to more than 8 hours but not to exceed

12 hours, without corresponding overtime
A:
premium. The concept can be adjusted accordingly
1. The Er shall notify the DOLE through the
depending on the normal workweek of the
Regional Office which has jurisdiction
company. (Department Advisory Order No. 2, Series
over the workplace, of the adoption of
of 2009)
compressed workweek.

2. The notice shall be in Report Form
Q: When is the implementation of a compressed
attached to the advisory.
work week valid?
3. The Regional Office shall conduct an

ocular visit to validate whether the
A: The validity of the reduction of working hours
adoption of the flexible work
can be upheld when the arrangement is temporary,
arrangements is in accordance with this
it is a more humane solution instead of a
issuance. (Department Advisory Order No.
retrenchment of personnel, there is notice and
2, Series of 2009)
25

Note: Where during meal period, the laborers are

c. Work interruption due to brownoutS required to stand by for emergency work, or where the
meal hour is not one of complete rest, such is
Q: What are the guidelines on power considered OT. (Pan Am vs. Pan Am Ees Association,
interruptions? G.R. No. L‐16275, Feb. 23, 1961)
A: Rest periods or coffee breaks running from 5 to 20
1. Brownouts of short duration but not minutes shall be considered as compensable working
exceeding 20 minutes shall be treated as time. (Sec. 7, Rule I, Book III, IRR)
worked or compensable hours whether
used productively by the employees (Ees) Q: Are meal periods provided during OT work
or not. compensable?

2. Brownouts running for more than 20 A: Yes, since the 1 hour meal period (non‐
minutes may not be treated as hours compensable) is not given during OT work because
worked provided any of the following the latter is usually for a short period and to deduct
conditions are present: from the same would reduce to nothing the Ees OT
a. The Ees can leave their workplace or work. Thus, the 1 hour break for meals during OT
go elsewhere within or without the should be treated as compensable.
work premises; or
Q: What are the instances where meal periods
b. The Ees can use the time effectively
shortened to not less than 20 minutes is
for their own interest.
compensable or not compensable?

3. In each case, the Er may extend the
A:
working hours of his Ees outside the
1. Compensable – At the instance of
regular schedules to compensate for the
Employer, when:
loss of productive man‐hours without
a. Work is non‐manual in nature or
being liable for OT pay.
does not involve strenuous physical

exertion;
4. Industrial enterprises with one or two
b. Establishment regularly operates less
work shifts may adopt any of the work
than 16 hours a day;
shift prescribed for enterprises with 3
c. Work is necessary to prevent serious
work shifts to prevent serious loss or
loss of perishable goods.
damage to materials, machineries, or
d. Actual or impending emergency or
equipment that may result case of power
there is urgent work to be performed
interruptions. (Policy Instruction No. 36)
on machineries and equipment to

avoid serious loss which the Er would
d. Meal Break
otherwise suffer. (Sec. 7, Rule I, Book

III, IRR)
Q: What is the duration of the meal period?

2. Not Compensable – Ee requested for the
A: Every Er shall give his Ees not less than 60
shorter meal time so that he can leave
minutes or 1 hour time‐off for regular meals.
work earlier than the previously
Q: Is the meal period compensable? established schedule. Requisites:
a. Ees voluntarily agree in writing and
A: Being time‐off, it is not compensable. Employee are willing to waive OT pay for the
must be completely relieved from duty. shortened meal period;
b. No diminution in the salary and
Q: When is the meal period considered other fringe benefits of the Ees
compensable? which are existing before the
effectivity of the shortened meal
A: It is compensable where the lunch period or period;
meal time: c. Work of the Ees does not involve
strenuous physical exertion and they
1. Is predominantly spent for the employers are provided with adequate coffee
benefit; or breaks in the morning and
2. Where it is less than 20 minutes afternoon;

26
LABOR LAW TEAM:

LABOR STANDARDS
d. Value of the benefits derived by the to travel to his regular place of
Ees from the proposed work business or some other work site.
arrangements is equal to or b. Done through a conveyance
commensurate with the provided by the employer (Er).
compensation due them for the c. Done under the supervision and
shortened meal period as well as the control of the Er.
OT pay for 30 minutes as determined d. Done under vexing and dangerous
by the Ees concerned; circumstance.
e. OT pay will become due and
demandable after the new time 2. Travel that is all in a day’s work – time
schedule spent in travel as part of the employees
f. Arrangement is of temporary (Ees) principal activity
duration. e.g. travel from job site to job site during
the work day, must be counted as
e. Idle time, waiting time, commuting time/ travel working hours.
time, whether part of hours of work or not
3. Travel away from home
Q: When is an Ee considered working while on GR:
call? a. Travel that requires an overnight
stay on the part of the Ee when it
A: When Ee is required to remain on call in the Ers cuts across the Ees workday is clearly
premises or so close thereto that he cannot use the working time.
time effectively and gainfully for his own purpose. b. The time is not only hours worked on
regular workdays but also during
Q: When idle time is considered working time? corresponding working hours on
non‐working days. Outside of these
A: When the employee is idle or inactive by reason regular working hours, travel away
of interruptions beyond his control shall be from home is not considered
considered working time. working time.

Q: When is waiting time considered working time? XPN: During meal period or when Ee is
permitted to sleep in adequate facilities
A: furnished by the Er.
1. If waiting is an integral part of his work, or
2. The Ee is required or engaged by the Er to Q: What are the conditions in order for lectures,
wait (engaged to wait) meetings and training programs to be not
considered as working time?
Note: The controlling factor is whether waiting time
spent in idleness is so spent predominantly for the Er’s A: All of the ff. conditions must be present:
benefit or for the Ee. 1. Attendance is outside of the employers
regular working hours
Q: When is waiting time not considered working 2. Attendance is in fact voluntary and
time? 3. The employee does not perform any
productive work during such attendance.
A: When the Ee is waiting to be engaged: idle time
is not working time; it is not compensable. f. Overtime work: Undertime offset by overtime,
Waiver of overtime
Q: When is travel time considered working time?

Q: What is overtime work (OT)?
A:
1. Travel from home to work
A: Work performed beyond 8 hours within the

worker’s 24 hour workday.
GR: Normal travel from home to work is
not working time. Note: Express instruction from the employer (Er) to
the employee (Ee) to render OT work is not required
XPNS: for the Ee to be entitled to OT pay; it is sufficient that
a. Emergency call outside his regular the Ee is permitted or suffered to work. However,
working hours where he is required written authority after office hours during rest days
27

and holidays are required for entitlement to Rate of the first 8 hours worked on

compensation. plus at least 30% of the regular wage (RW):

Q: What is a work day? if done on a special holiday OR rest day:
30% of 130% of RW
A: The 24‐hour period which commences from the
time the employee regularly starts to work If done on a special holiday AND rest day:
e.g. If the worker starts to work 8 am today, the 30% of 150% of RW
workday is from 8 am today up to 8 am tomorrow.
if done on a regular holiday:
Note: Minimum normal working hours fixed by law 30% of 200% of RW
need not be continuous to constitute the legal working
day. Q: What is the basis of computing the OT pay and
additional remuneration?
Q: What is the rationale behind OT pay?
A: Regular wage which includes the cash wage only,
A: Employee is made to work longer than what is without deduction on account of facilities provided
commensurate with his agreed compensation for by the employer. (Art. 90)
the statutory fixed or voluntarily agreed hours of
labor he is supposed to do. (PNB vs. PEMA and CIR, Q: In lieu of OT pay, the employee was given
G.R. No. L‐30279, July 30, 1982) permission to go on leave on some other day, is
that valid?
Discourages the employer (Er) from requiring such
work thus protecting the health and well‐being of A: No. Permission given to the employee (Ee) to go
the worker, and also tend to remedy on leave on some other day of the week shall NOT
unemployment by encouraging Ers to employ exempt the employer from paying the additional
others workers to do what cannot be accomplished compensation required because it would prejudice
during the normal hours of work. the Ee, for he will be deprived of the additional pay
for the OT work he has rendered and which is
Q: Distinguish Overtime pay from premium pay. utilized to offset the undertime he may have
incured. Undertime could be charged against the
A: Ees accrued leave.
OVERTIME PAY PREMIUM PAY
Additional compensation for work Q: Socorro is a clerk‐typist in the Hospicio de San
Additional performed within 8 hours on days Jose, a charitable institution dependent for its
compensation for when normally he should not be existence on contributions and donations from
work performed working (on non‐working days, well wishers. She renders work 11 hours a day but
beyond 8 hours such as rest days and special has not been given OT pay since her place of work
on ordinary days days.) is a charitable institution. Is Socorro entitled to OT
(within the But additional compensation for
pay? Explain briefly.
worker’s 24‐hour work rendered in excess of 8
workday) hours during these days is also
A: Yes. Socorro is entitled to OT compensation. She
considered OT pay.
does not fall under any of the exceptions to the

coverage of Art. 82, under the provisions of hours
Q: What are the OT pay rates?
of work. The Labor Code is equally applicable to

non‐profit institutions. A covered Ee who works
A:
beyond 8 hours is entitled to OT compensation.
PAY RATES
(2002 Bar Question)
OT during a regular working day
Q: Flores applied for the position of driver in the
Additional compensation of 25% of the regular wage
motor‐pool of Gold Company, a multinational
corporation. Danilo was informed that he would
OT during a holiday or rest day
frequently be working OT as he would have to
drive for the company's executives even beyond
the ordinary 8‐hour work day. He was provided
with a contract of employment wherein he would
be paid a monthly rate equivalent to 35 times his
daily wage, regular sick and vacation leaves, 5 day‐
leave with pay every month and time off with pay
28
LABOR LAW TEAM:

LABOR STANDARDS
when the company's executives using the cars do specific wages per day, without providing

not need Danilo's service for more than eight for a fixed hourly rate or that the daily
hours a day, in lieu of OT. Are the above provisions wages include OT pay, said wages cannot
of the contract of employment in conformity with, be considered as including OT
or violative of, the law? compensation. (Manila Terminal Co. vs.
CIR, et al., 91 Phil., 625)
A: Except for the provision that Danilo shall have 2. However, the employment contract may
time off with pay when the company's executives provide for a “built‐in” OT pay. Because of
using the cars do not need Danilo's service for more this, non‐payment of OT pay by the
than 8 hours a day, in lieu of OT, the provisions of employer is valid. (Eng’g Equipment vs.
the contract of employment of Danilo are not Minister of Labor, G.R. No. L‐64967, Sep.
violative of any labor law because they instead 23, 1985)
improve upon the present provisions of pertinent
labor laws. (a)Undertime not offset by Overtime

Q: May an employee be compelled to render OT Q: Can undertime (UT) offset OT?
work?
A: Where a worker incurs undertime hours during
A: GR: No. OT work is voluntary. his regular daily work, said undertime hours should
not be offset against the overtime hours on the
XPN: Compulsory OT work in any of the same day or on any other day. It is both prohibited
following situations: by the statute and by jurisprudence.

1. Urgent work to be performed on (b)Waiver of Overtime pay
machines and installations in order to
avoid serious loss or damage to the Er or Q: Can the right to OT pay be waived?
some other cause of similar nature
2. Work is necessary to prevent loss or A: GR: The right to OT pay cannot be waived as it
damage to perishable goods is governed by law and not merely by the
3. In case of imminent danger to the public agreement of the parties.
safety due to an actual or impending
emergency in the locality caused by XPN:
serious accidents, fire, flood, typhoon, 1. If the waiver is done in exchange for
earthquake, epidemic or other disaster or certain valuable benefits and privileges,
calamity which may even exceed the OT Pay,
4. Country is at war waiver may be permitted.
5. Completion or continuation of the work 2. Compressed work week
started before the 8th hour is necessary
to prevent serious obstruction or g.Nightwork
prejudice to the business operations of
the Er Q: What is nightwork?
6. Any other national or local emergency has
been declared A: Any and all work rendered between 6:00 pm
7. Necessary to prevent loss of life or and 6:00 am. (National Rice & Corn Corp. v. NARIC,
property. 105 Phil 891)

Note: There should be payment of additional Q: What is night work prohibition with regard to
compensation. Ees refusal to obey the order of the Er
women workers?
constitutes insubordination for which he may be
subjected to disciplinary action.
A: GR: No woman regardless of age shall be
employed or permitted to work, with or
Q: The employment contract requires work for
without compensation in any:
more than 8 hours a day with a fixed wage
inclusive of OT pay. Is that valid?
1. Industrial undertaking or branch thereof
between 10pm and 6am of the following
A: It depends.
day.
1. When the contract of employment 2. Commercial or non‐industrial undertaking
requires work for more than 8 hours at or branch thereof, other than agricultural,
29

between midnight and 6am of the

following day. XPN:
3. Agricultural undertaking at nighttime 1. Ees of the Gov’t and any of its political
unless she is given period of rest not less subdivisions, including GOCC’s.
than 9 consecutive hours. 2. Retail and service establishments
regularly employing not more than 5
XPNS: workers.
1. Actual or impending emergencies 3. Includes task and contract basis
a. Caused by serious accident, fire, 4. Domestic helpers and persons in the
flood, typhoon, earthquake, personal service of another.
epidemic, other disasters, or 5. Field personnel and Ees whose time and
calamity performance is unsupervised by the
b. To prevent loss of life or property or employer
c. In case of force majeure or 6. Managerial Ees
d. Imminent danger to public safety
2. Urgent work Q: May an employee waive the right to NSD?
a. To be performed on machineries,
equipment or installations, A: GR: No, such waiver is against public policy.
b. To avoid serious loss which the Er (Mercury Drug Co., Inc. vs. Dayao, et al., G.R.
would otherwise suffer No. L‐30452, Sep. 30, 1982)
3. Work is necessary to prevent serious loss
to perishable goods XPN: Higher/better benefits
4. Woman Ees
a. Holds a responsible position of h.CBA provision vis‐à‐vis overtime work
managerial or technical nature, or
b. Has been engaged to provide health Q: May the overtime rate be subject to stipulation
and welfare services of the Ee and Er?
5. Nature of the work
a. Requires the manual skill and A: Generally, the premium for work performed on
dexterity of women workers and the employee’s rest days or on special days or
b. The same cannot be performed with regular holidays are included as part of the regular
equal efficiency by male workers rate of the employee in the computation of
6. Women Ees are immediate members of overtime pay for any overtime work rendered on
the establishment or undertaking said days especially if the employer pays only the
7. In analogous cases exempted by the SLE minimum overtime rates prescribed by law. The
in appropriate regulations. (Art. 131) employees and employer, however, may stipulate
in their collective agreement the payment of
Note: The operation of Call Contract Centers which overtime rates higher than those provided by law
provides offshore case solutions to US based clients and exclude the premium rates in the computation
who phone in to conduct product inquiries and of overtime pay. Such agreement may be
technical support, operating for 24/7, has been considered valid only if the stipulated overtime pay
exempted from the prohibition considering the rates will yield to the employees not less than the
inevitable time difference between the US and the minimum prescribed by law.
Phils. and the peak time for its operation is between
8:00 pm to 10:00 am Manila time, thereby making it 2.WAGES
necessary for 80% of its Ees, including women, to work
during graveyard shift. (BWC‐WHSD Opinion No. 491, s. Q: What is a wage?
2003)
A: It is the remuneration or earnings, however
Q: What is night shift differential (NSD)? designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time,
A: It is additional compensation of not less than task, piece, or commission basis, or other method
10% of an Ees regular wage for every hour worked of calculating the same, payable by an employer
between 10:00 pm to 6:00 am, whether or not such (Er) to an employee (Ee) under a written or
period is part of the worker’s regular shift. unwritten contract of employment:
Q: Who are entitled to NSD? 1. For work done or to be done, or for
services rendered or to be rendered; and
A: GR: NSD applies to all employees (Ees). includes
30
LABOR LAW TEAM:

LABOR STANDARDS
2. Fair and reasonable value of board, c.Facilities and Supplements

lodging, or other facilities customarily
furnished by the Er to the Ee as Q: Distinguish between facilities and supplement
determined by SLE.
A:
Q: What do you mean by customary? FACILITIES SUPPLEMENT
Extra remuneration or
Items of expenses special privileges or
A: It is founded on long‐established and constant
necessary for the laborer’s benefits given to or
practice connoting regularity.
and his family’s existence received by the laborers
and subsistence over and above their
Q: What do you mean by fair and reasonable
ordinary earnings or
value? Note: Does not include tools
wages (Atok Big Wedge
of trade or articles / services
A: It shall not include any profit to the employer (Er) Mining Co. v. Atok Big
primarily for the benefit of
or to any person affiliated with the Er. Wedge Mutual Benefit
the Er or necessary to the
conduct of the Er’s business. Assoc, G.R. No. L‐7349,
a.No work, No pay principle July 19, 1955) .
Forms part of the wage Independent of wage
Q: What does a “fair day’s wage for a fair day’s Deductible from wage Not wage deductible
labor “mean (no work no pay)? For the benefit of the Granted for the
worker and his family. convenience of the Er.
A: GR: If there is no work performed by the Ee,
without the fault of the Er, there can be no Q: What is the criterion in determining whether an
wage or pay. item is a supplement or facility?

XPN: The laborer was able, willing and ready to A: The criterion is not so much with the kind of the
work but was: benefit or item (food, lodging, bonus or sick leave)
1. Prevented by management; given, but its purpose. (State Marine v. Cebu
2. Illegally locked out; Seamen’s Ass’n., G.R. No. L‐12444, Feb. 28, 1963)
3. Illegally suspended;
4. Illegally dismissed Q: When can the cost of facilities furnished by the
5. Otherwise illegally prevented from Er be charged against an Ee?
working. (Aklan Electric Coop. v. NLRC,
G.R. No. 129246, Jan. 25, 2000) A: In order that the cost be charged against the Ee,
the latter’s acceptance of such facilities must be
b.Coverage and Exclusions voluntary.

Q: To whom does the title on wages apply? Q: What are the requirements for deducting values
for facilities?
A: GR: It applies to all employees
A:
XPN: 1. Proof must be shown that such facilities
1. Farm tenancy or leasehold; are customarily furnished by the trade
2. Household or domestic helpers, including 2. The provision of deductible facilities must
family drivers and persons working in the be voluntarily accepted in writing
personal service of another; 3. The facilities must be charged at fair and
3. Home workers engaged in needlework or reasonable value (Mabeza v. NLRC, G.R.
in any cottage industry duly registered in No. 118506, April 18, 1997)
accordance with law;
4. Workers in duly registered cooperatives Q: Are food and lodging, or the electricity and
when so recommended by the Bureau of water consumed by a hotel worker, considered
Cooperative Development and upon facilities?
approval of the Secretary of Labor and
Employment. A: No. These are supplements. Considering,
5. Workers of a barangay micro business therefore, that hotel workers are required to work
enterprise (R.A. 9178) different shifts and are expected to be available at
various odd hours, their ready availability is a
necessary matter in the operations of a small hotel.
Furthermore, granting that meals and lodging were
31

provided and indeed constituted facilities, such A: The Er and the union shall negotiate to correct
facilities could not be deducted without the Er the distortions. If there is no union, the Er and the
complying first with certain legal requirements. workers shall endeavor to correct such distinctions.
(Mabeza v. NLRC, G.R. No. 118506, April 18, 1997)
Q: What are the basic principles in WD?
d.Wages v. Salaries
A:
Q: Distinguish between wage and salary? 1. The concept of WD assumes an existing
group or classification of Ees which
A: establishes distinctions among such Ees
WAGE SALARY on some relevant or legitimate basis. This
(Gaa vs.CA, G.R. No. 44169, Dec. 3, 1985) classification is reflected in a differing
Compensation for manual Paid to “white collared wage rate for each of the classes of Ees
labor (skilled or unskilled) workers” and denotes 2. Often results from gov’t decreed
also known as “blue higher degree of
increases in minimum wages.
collared workers”, paid at employment or a
3. Should a WD exist, there is no legal
stated times and superior grade of services
requirement that, in the rectification of
measured by the day, and implies a position in
week, month or season. office. that distortion by re‐adjustment of the
Considerable pay for a wage rates of the differing classes of Ees,
Out gesture of a larger the gap which had previously or
lower and less
and more important historically existed be restored in
responsible character of
service precisely the same amount. In other
employment.
GR: Not subject to words, correction of a WD may be done
execution by reestablishing a substantial or
significant gap (as distinguished from the
Subject to execution.
XPN: Debts incurred for historical gap) between the wage rates of
food, shelter, clothing and the differing classes of Ees.
medical attendance. 4. The re‐establishment of a significant
difference in wage rates may be the result
e.Wage Distortion of resort to grievance procedures or
collective bargaining negotiations. (Metro
Q: What is wage distortion (WD)? Transit Org., Inc. v. NLRC, G.R. No.
116008, July 11, 1995)
A: A situation where an increase in wage results in
the elimination or severe contraction of intentional Q: Distinguish the process for correction of WD of
quantitative differences in wage or salary rates organized establishments and unorganized
between and among the Ee‐groups in an establishments?
establishment as to effectively obliterate the
distinctions embodied in such wage structure based A:
on skills, length of service or other logical bases of Organized Unorganized
differentiation. Establishment Establishments
(with union) (without union)
Q: What are the elements of WD? The Er and the union The Er and the workers
shall negotiate to shall endeavor to correct
A: correct distortion. the distortion.
1. An existing hierarchy of positions with Any dispute shall be
corresponding salary rates. resolved through a Any dispute shall be
2. A significant change or increase in the grievance procedure settled through the NCMB.
salary rate of a lower pay class without a under the CBA.
corresponding increase in the salary rate If it remains unresolved,
If it remains unresolved
of a higher one; it shall be dealt with
within 10 days it shall be
through voluntary
3. The elimination of the distinction referred to the NLRC.
arbitration.
between the 2 groups or classes; and
The dispute will be The NLRC shall conduct
4. The WD exists in the same region of the
resolved within 10 days continuous hearings and
country. (Alliance Trade Unions v. NLRC,
from the time the decide the dispute within
G.R. No. 140689, Feb. 17, 2004) dispute was referred to 20 days from the time the
voluntary arbitration. same was referred.
Q: Is the Er legally obliged to correct WD?

32
LABOR LAW TEAM:

LABOR STANDARDS
Q: Can the issue of WD be raised in a notice of Moreover, compliance with a collective bargaining
strike? agreement is mandated by the expressed policy to
give protection to labor. Unless otherwise provided
A: No. WD is non‐strikeable. (Ilaw at Buklod ng by law, said policy should be given paramount
Manggagawa v. NLRC, G.R. No. 91980, June 27, consideration. (Meycauayan College v. DRILON, G.R.
1991.) WD is neither a deadlock in collective No. 81144, My 7, 1990).
bargaining nor ULP.
g.Non‐ diminution of benefits
f.CBA provision vis‐à‐vis Wage Order CBA Credibility
Q: What is the concept of non‐diminution (ND) of
Q: Distinguish CBA and Wage Order. benefits?

A: A: GR: Benefits being given to employees (Ees)
CBA WAGE ORDER cannot be taken back or reduced unilaterally by
Not an ordinary Administrative issuance the employer (Er) because the benefit has
contract. It can be which results from a become part of the employment contract,
entered into only by an statute (RA 6727) whether written or unwritten.
exclusive bargaining
agent or unit. XPN: To correct an error, otherwise, if the error is
If the CBA provides Only sets the minimum not corrected for a reasonable time, it ripens into
better benefits then the a company policy and Ees can demand it as a
employees shall be matter of right.
entitled to the same.
Q: When is ND of benefits applicable?
Q: Can a CBA provision regarding wages prevail
over a Wage Order? A: It is applicable if it is shown that the grant of
benefit:
A: Yes, where the CBA provides a wage or salary to
be received by the employees which is more than 1. Is based on an express policy of the law;
the amount set by the Wage Order, whether issued or
prior to or after the conclusion of the CBA, it is 2. Has ripened into practice over a long
incumbent upon the employer to compensate the period of time and the practice is
employees according to the provisions of the CBA consistent and deliberate and is not due
with respect to wages. to an error in the construction/
application of a doubtful or difficult
question of law.
Q: Meycauayan College Faculty and Personnel

Association as the employees union in
h.Worker’s preference in case of bankruptcy
Meycauayan College, admits that its members

were paid all the increases in pay as mandated
Q: What is bankruptcy?
law. It appears however that in 1987, shortly after

union President Joy Bugo turned over the
A: “Bankruptcy” is referred to in the Philippines as
presidency, she discovered that Art. IV of the CBA,
“Insolvency”. It denotes the state of an entity or
which provides for higher salary increase was not
person that has liabilities greater than its assets.
implemented. May the union claim the difference

between their old salaries and those provided by
Q: What happens if the Er business experiences
said CBA provision?
bankruptcy or liquidation?
A: Yes, the terms and conditions of a collective A: His workers shall enjoy first preference as
bargaining contract constitute the law between the regards their wages and monetary claims, any
parties. Beneficiaries thereof are therefore, by provision of the law to the contrary
right, entitled to the fulfillment of the obligation notwithstanding.
prescribed therein. Consequently, to deny binding
force to the CBA would place a premium on a Q: What are the principles underlying the
refusal by a party thereto to comply with the terms preference?
of the agreement. Such refusal would constitute an
unfair labor practice. A:

33

1. Declaration of bankruptcy or judicial mortgagee of property. Was the Labor Arbiter
liquidation before enforcement of the correct in his decision?
worker’s preferential right;
2. Filing of claims by workers; A: No. The preference of credits established in Art.
3. The right does not constitute a lien to the 110 of the LC cannot be invoked in the absence of
property of the insolvent debtor in favor any insolvency proceedings, declaration of
of workers. (DBP vs. NLRC, G.R. No. 82763 bankruptcy, or judicial liquidation. (DBP v.
Mar. 19, 1990 and G.R. No. 97176, Mar. Santos, G.R. No. 75801, March 20, 1991). (2003 Bar
18, 1993); Question)
4. The preference in favor of the Ees applies
to discharge of funds. The preference Q: Distinguish the mortgage created under the
does not only cover unpaid wages, it also Civil Code from the right of 1st preference created
extends to termination pay and other by the LC as regards the unpaid wages of workers.
monetary claims; Explain.
Note: Termination pay, after all, is
considered as additional remuneration for A: A mortgage directly subjects the property upon
services rendered to the employer for a which it is imposed, whoever the possessor may be,
certain period of time; it is computed on the to the fulfillment of the obligation for which it was
basis of length of service. (PNB vs. Cruz, G.R. constituted. It creates a real right which is
No. 80593, Dec. 18, 1989) enforceable against the whole world. It is therefore
5. Applicable only to ordinary preferred a lien on an identified real property.
credit, hence, must yield to special
preferred credits. Mortgage credit is a special preferred credit under
the Civil Code in the classification of credits. The
Q: Are workers preferred than the tax claims of preference given by the LC when not attached to
the Gov’t? any specific property is an ordinary preferred credit.
(1995 Bar Question)
A: No. Art. 110 did not sweep away the overriding
preference accorded under the scheme of the Civil i.Labor Code provisions for wage protection
Code to tax claims of the government.
Q: What are the Labor Code provisions for wage
Q: Is worker preference applicable if the Er protection
corporation is under rehabilitation?
A:
A: No. Suspension of payments order by the SEC Art. 112. Non‐Interference in Disposal of Wages‐No
mandates the holding in abeyance the filing or the employer shall limit or otherwise interfere with the
proceedings on labor cases against an Er who is freedom of any employee to dispose of his wages.
under rehabilitation to give the Er the chance to He shall not in any manner force, compel or oblige
concentrate on how to revive his business and not his employees to purchase merchandise,
be distracted in trying to defend itself in labor cases commodities or other properties from the employer
filed against it. (Rubberworld, Inc. v. NLRC, G.R. No. or from any other person, or otherwise make use of
126773, April 14, 1999) any store or service of such employer or any other
person.
Q: Premiere Bank, being the creditor‐mortgagee of
XYZ & Co., a garment firm, foreclosed the Art. 113 Wage Deduction‐No employer in his own
hypothecated assets of the latter. Despite the behalf or in behalf of any person, shall make any
foreclosure, XYZ & Co. continued its business deduction from the wages of his employees,
operations. A year later, the bank took possession except:
of the foreclosed property. The garment firm's
business operations ceased without a declaration (a) In cases where the worker is insured with
of bankruptcy. Caspar, an employee of XYZ & Co., his consent by the employer, and the
was dismissed from employment due to the deduction is to recompense the employer
cessation of business of the firm. He filed a for the amount paid by him as premium
complaint against XYZ & Co. and the bank. The on the insurance;
Labor Arbiter, after hearing, so found the company (b) For union dues, in cases where the right
liable, as claimed by Caspar, for separation pay. of the worker or his union to check‐ off
Premiere Bank was additionally found subsidiarily has been recognized by the employer or
liable upon the thesis that the satisfaction of labor authorized in writing by the individual
benefits due to the Ee is superior to the right of a worker concerned; and
34
LABOR LAW TEAM:

LABOR STANDARDS
(c) In cases where the employer is authorized worker concerned (Art. 113). Art. 241(o)

by law or regulations issued by the provides that special assessments may be
Secretary of Labor. validly checked‐off provided that there is
an individual written authorization duly
Art. 114 No employer shall require his worker to signed by every employee (Ee).
make deposits from which deductions shall be 3. Deductions for SSS, Medicare and Pag‐ibig
made for the reimbursement of loss of or damage premiums
to tools, materials or equipments supplied by the 4. Taxes withheld pursuant to the Tax Code
employer; except when the employer is engaged in 5. Deductions under Art. 114 for loss or
such trades, occupations or business where the damage to tools, materials or equipments
practice of making deductions or requiring deposits 6. Deductions made with the written
is a recognized one, or is necessary, or desirable as authorization of the Ee for payment to a
determined by the Secretary of Labor in third person. (Sec 13, Rule VIII, Book III of
appropriate rules and regulations. the IRR)
7. Deductions as disciplinary measures for
Art. 115 Limitations‐No deduction from the habitual tardiness (Opinion dated March
deposits of an employee for the actual amount of 10, 1975 of the SLE)
the loss or damage shall be made unless the 8. Agency fees under Art. 248(e)
employee has been heard thereon, and his 9. Deductions for value of meals and
responsibility has been clearly shown. facilities freely agreed upon
10. In case where the Ee is indebted to the Er
Art 116 Withholding of Wages and Kickbacks where such indebtedness has become
Prohibited‐It shall be unlawful for any person, due and demandable. (Art. 1706, Civil
directly or indirectly, to withhold any amount from Code)
the wages of a worker or induce him to give up any 11. In court awards, wages may be subject of
part of his wages by force, stealth, intimidation, execution or attachment, but only for
threat or by any other means whatsoever without debts incurred for food, shelter, clothing,
the worker’s consent. and medical attendance. (Art. 1703, Civil
Code)
Art 117 Deduction to Ensure Employment‐It shall be 12. Salary deduction of a member of a legally
unlawful to make any deduction from the wages of established cooperative. (R.A. 6938, Art.
any employee for the benefit of the employer or his 59)
representative or intermediary as consideration of
a promise of employment or retention in k.Attorney’s fees
employment or retention in employment.
Q: What are the limitations to the assessment of
Art. 118 Retaliatory Measures‐It shall be unlawful attorney’s lien against the culpable party?
for an employer to refuse to pay or reduce the
wages and benefits, discharge or in any manner A:
discriminate against any employee who has filed 1. In case of unlawful withholding of wages
any complaint instituted any proceeding under this – 10% of the amount of wages to be
Title or has testified or is about to testify in such recovered.
proceedings. 2. It shall be unlawful for any person to
demand or accept, in any judicial or
j. Allowable deductions without employee’s administrative proceedings for the
consent recovery of wages, atty’s fees that exceed
10% of the amount of wages recovered.
Q: What is the rule in wage deductions?
Note: The prohibition on atty’s lien refers to
A: proceedings for recovery of wages and not to services
GR: It is strictly prohibited rendered in connection with CBA negotiations. In the
latter case, the amount of atty’s fees may be agreed
XPN: upon by the parties and the same is to be charged
1. Deductions under Art. 113 for insurance against union funds as provided for in Art. 222 of the
premiums Labor Code. (Pacific Banking Corp.v. Clave, G.R. No.
56965, Mar. 7, 1984)
2. Union dues in cases where the right of the

worker or his union to check off has been
Q: What is ordinary attorney’s fee?
recognized by the employer (Er) or

authorized in writing by the individual
35

A: It is the reasonable compensation paid to a Q: When can attorney’s fees and damages be
lawyer by his client for the legal services he has awarded in an illegal dismissal case?
rendered.
A: For attorney’s fees, moral and exemplary
Q: What is extraordinary attorney’s fee? damages to be granted, the plaintiff must prove
that the facts of his case fall within the enumerated
A: It is the indemnity for damages ordered by the instances in the Civil Code. Thus, moral damages
court to be paid by the losing party in litigation and may only be recovered where the dismissal or
is not to be paid to the lawyer but to the client, suspension of the employee was attended by bad
unless they have agreed that the award shall faith or fraud, or constituted an act oppressive to
pertain to the lawyer as an additional labor, or was done in a manner contrary to morals,
compensation or as a part thereof. (Traders Royal good customs or public policy. In other words, the
Bank Ee’s Union‐Independent v. NLRC, G.R. No. act must be a conscious and intentional design to
120592, Mar. 14, 1997) do a wrongful act for a dishonest purpose or some
moral obliquity. Exemplary damages, on the other
Note: Art.111 of the LC deals with the extraordinary hand, may only be awarded where the act of
concept of attorney’s fees. It may not be used as the dismissal was effected in a wanton, oppressive or
standard in fixing the amount payable to the lawyer by malevolent manner. (Chaves v. NLRC,G.R. No.
his client for the legal services he rendered. (Masmud 166382, June 27, 2006)
v. NLRC, G.R. No. 183385, Feb. 13, 2009)
Q: What is union service fee?
Q: Santiago, a project worker, was being assigned

by his Er, Bagsak Builders, to Laoag, Ilocos Norte.
A: The appearance of labor federations and local
Santiago refused to comply with the transfer
unions as counsel in labor proceedings has been
claiming that it, in effect, constituted a
given legal sanction under Art.222 of the LC, which
constructive dismissal because it would take him
allows non‐lawyers to represent their organization
away from his family and his usual work
thereof. The said labor federations and local unions
assignments in Metro Manila. The Labor Arbiter
have a valid claim to atty’s fees which is called the
(LA) found that there was no constructive
Union Service Fee.
dismissal but ordered the payment of separation
pay due to strained relations between Santiago l.Criteria/ Factors for Wage Setting
and Bagsak Builders plus atty’s fees equivalent to
10% of the value of Santiago's separation pay. Q: What are the standards or criteria for minimum
wage setting?
Is the award of atty's fees valid? State the reasons
for your answer. A: In the determination of such regional minimum
wages, the Regional Board shall, among other
A: No, the award of atty’s fees is not valid. relevant factors consider the following:
According to the LC (Art. 111 [a]), atty’s fees may be
assessed in cases of unlawful withholding of wages a)The demand for living wages
which does not exist in the case. The worker b)Wage adjustment vis‐a‐vis the consumer
refused to comply with a lawful transfer order, and price index
hence, a refusal to work. Given this fact, there can c) The cost of living and changes or
be no basis for the payment of atty's fees. increases therein
d) The needs of workers and their families
Could the LA have validly awarded moral and e) The need to induce industries to invest in
exemplary damages to Santiago instead of atty's the countryside
fees? Why? f) Improvements in standards of living
g) The prevailing wage levels
A: No, moral and exemplary damages can be
h) Fair return of the capital invested and
awarded only if the worker was illegally terminated
capacity to pay of employers
in an arbitrary or capricious manner. (Nueva Ecija
i) Effects on employment generation and
Electric Cooperative Inc., Ees’ Ass’n., vs. NLRC, G.R.
family income
No. 116066, Jan. 24, 2000; Cruz vs. NLRC, G.R. No.
j) The equitable distribution of income and
116384, Feb. 7, 2000; Phil. Aeolus etc., vs. NLRC,
wealth along the imperatives of economic
G.R. No. 124617, April 28, 2000). (2001 Bar
and social development
Question)

Q: What is salary ceiling method?
36
LABOR LAW TEAM:

LABOR STANDARDS
A: A method of minimum wage adjustment (MBTC v NWPC Commission, G.R. NO. 144322, Feb.

whereby the wage adjustment is applied to Ees 6, 2007)
receiving a certain denominated ceiling. In other
words, workers already being paid more than the 3.REST DAY
existing minimum wage are also to be given a wage
increase. (ECOP v. NWCP, G.R. No. 96169, Sep. 24, a.Right to weekly rest day, Preferemce of the
1991) employee, when work on rest day authorized

Q: What is a floor wage method? Q: What is the right to weekly rest day (WRD)?

A: It involves the fixing of a determinate amount to A: Every employer shall give his employees a rest
be added to the prevailing statutory minimum wage period of not less than 24 consecutive hours after
rates. every 6 consecutive normal work days. (Sec. 3, Rule
III, Book III, IRR)
Q: The Regional Wage Board of Region II issued a
Wage Order granting all Ees in the private sector Q: What is the scope of WRD?
throughout the region an across‐the‐board
increase of P15.00 daily. Is this Wage Order valid? A: It shall apply to all employers whether operating
for profit or not, including public utilities operated
A: The Wage Order is valid insofar as the mandated by private persons. (Sec. 1, Rule III, Book III, IRR)
increase applies to Ees earning the prevailing
minimum wage rate at the time of the passage of Q: Who determines the WRD?
the Wage Order and void with respect to its
application to Ees receiving more than the A: GR: Er shall determine and schedule the WRD of
prevailing minimum wage rate at the time of the his Ee.
passage of the Wage Order. Pursuant to its
authority, the Regional Wage Boards may issue XPNs:
wage orders which set the daily minimum wage 1. CBA
rates. In the present case, the Regional Wage 2. Rules and regulations as the SLE provides
Board did not determine or fix the minimum wage 3. Preference of employee (Ee) based on
rate. It did not set a wage level nor a range to which religious grounds – Ee shall make known
a wage adjustment or increase shall be added. his preference in writing at least 7 DAYS
Instead, it granted an across‐the‐board wage before the desired effectivity of the initial
increase of P15.00 to all Ees in the region. In doing rest day so preferred. (Sec. 4(1), Rule III,
so, the Regional Wage Board exceeded its authority Book III, IRR)
by extending the coverage of the Wage Order to
wage earners receiving more than the prevailing XPN to XPN no. 3: Employer (Er) may
minimum wage rate, without a denominated salary schedule the WRD of his choice for at
ceiling. The Wage Order granted additional benefits least 2 days in a month if preference of
not contemplated by R.A. No. 6727. (MBTC v NWPC the employee will inevitably result in:
Commission, G.R. No. 144322, Feb. 6, 2007) a. serious prejudice to the operations
of the undertaking and
Q: Since the Wage Order was declared void with b. the Er cannot normally be expected
respect to its application to employees receiving to resort to other remedial
more than the prevailing minimum wage rate at measures. (Sec. 4(2), Rule III, Book III,
the time of the passage of the Wage Order, should IRR)
these Ees refund the wage increase received by
them? Q: When should employees (Ees) be informed of
their schedule of WRD?
A: No. The Ees should not refund the wage increase
that they received under the invalidated Wage A: Er shall make known rest period by means of:
Order. Being in good faith, the employees need not 1. Written notice
refund the benefits they received. Since they 2. Posted conspicuously in the workplace
received the wage increase in good faith, in the 3. At least 1 week before it becomes
honest belief that they are entitled to such wage effective. (Sec.5, Rule III, Book III. IRR)
increase and without any knowledge that there was
no legal basis for the same, they need not refund Q: Can an Ee be compelled to work on his rest
the wage increase that they already received. day?

37

A: GR: No. Work on a scheduled + 30% Premium Pay (PP)

rest day of 100% regular wage
XPN: (RW). (Sec. 7, Rule III, Book
1. Urgent work to be performed on the III, IRR)
machinery, equipment or installation, to Work has no regular
+ 30% PP of 100% RW .
avoid serious loss which the Er would workdays and rest days
(Sec. 7, Rule III, Book III,
otherwise suffer; (If performed on
IRR
2. Nature of work requires continuous Sundays and Holidays)
operations for 7 days in a week or more Work on a Sunday + 30% PP of 100% RW.
(If Ee’s scheduled rest (Sec. 7, Rule III, Book III,
and stoppage of the work may result in
day) IRR)
irreparable injury or loss to the Er;
3. Abnormal pressure of work due to special 1st 8 hrs: + 30% PP of
circumstances, where the Er cannot be 100% RW

ordinarily expected to resort to other Work performed on any
Excess of 8 hrs: + 30% of
measures; Special Holiday
hourly rate on said date.
4. Actual or impending emergencies (serious (M.C. No. 10, Series of
accident, fire, flood, typhoon, earthquake, 2004)
etc.)
1st 8 hrs: + 50% PP of
5. Prevent loss or damage to perishable
100% regular wage
goods; Work performed on a

6. Analogous or similar circumstances as Special Holiday and
Excess of 8 hrs: + 30% of
determined by the SLE; same day is the
hourly rate on said date.
7. Work is necessary to avail of favorable scheduled rest day
(M.C. No. 10, Series of
weather or environmental conditions 2004)
where performance or quality of work is Ee is only entitled to his
dependent thereon. basic rate. No PP is
required.
Q. What is the rule when an Ee volunteers to work
Work performed on a
on his rest day under other circumstances? Reason: Work performed
Special Working Holiday
is considered work on
A: He shall express it in writing subject to additional ordinary working days.
compensation. (Sec. 6[2], Rule III, Book III, IRR) (Sec. 7, Rule III, Book III,
IRR)
Q: What is premium pay?
Note: Holiday work provided under Art.93 pertains to
A: It is the additional compensation for work special holidays or special days.
rendered by the employee on days when normally
he should not be working such as special holidays Q: Jose applied with Mercure Drug Company for
and weekly rest days. the position of Sales Clerk. Mercure Drug Company
maintains a chain of drug stores that are open
Q: Can the Er and Ee agree on the rate of premium everyday till late at night. Jose was informed that
pay other than that provided by law? he had to work on Sundays and holidays at night
as part of the regular course of employment. He
A: Yes. Nothing shall prevent the Er and his Ee or was presented with a contract of employment
their representatives from entering into any setting forth his compensation on an annual basis
agreement with terms more favorable to the Ees with an express waiver of extra compensation for
Provided: It shall not be used to diminish any work on Sundays and holidays, which Jose signed.
benefit granted to the Ees under existing laws, Is such a waiver binding on Jose? Explain.
agreements and voluntary Er practices. (Sec. 9, Rule
III, Book III, IRR) A: As long as the annual compensation is an
amount that is not less than what Jose should
Q: What are the rates of compensation for rest receive for all the days that he works, plus the extra
day, Sunday or holiday work? compensation that he should receive for work on
his weekly rest WRD and for night differential pay
A: for late night work, considering the laws and wage
RATES OF ADDITIONAL orders providing for minimum wages, and the
INSTANCES pertinent provisions of the LC, then the waiver that
COMPENSATION
Jose signed is binding on him for he is not really
waiving any right under Labor Law. It is not contrary
38
LABOR LAW TEAM:

LABOR STANDARDS
to law, morals, good customs, public order or public considered regular holidays. (Presidential

policy for an Er and Ee to enter into a contract Proclamation No. 18)
where the Ees compensation that is agreed upon
already includes all the amounts he is to receive for REGULAR HOLIDAYS DATE
OT work and for work on weekly rest days and New Year’s Day January 1
holidays and for night differential pay for late night Maundy Thursday April 21
work. (1996 Bar Question) Good Friday April 22
Eid’l Fitr Movable Date
4.HOLIDAYS Araw ng Kagitingan April 9
Labor Day May 1
a.Right to Holiday Pay Independence Day June 12
Aug. 29 (last Monday of
National Heroes Day
Q: What is holiday pay (HP)? August)
Bonifacio Day Nov. 30
A: It is a premium given to employees (Ees) Christmas Day December 25
pursuant to law even if he has not been suffered to Rizal Day Dec. 30
work on a regular holiday. It is limited to the 11
regular holidays, also called legal holidays listed by
law. The employee (Ee) should not have been Note: RA 9492 has already been superseded by
absent without pay on the working day preceeding Presidential Proclamation No. 18 issued by President
the regular holiday. Benigno C. Aquino III placing the observance of regular
holidays and national special days according to their
Q: What are the classes of special days (SD)? respective dates in the calendar.

A: Q: What are Muslim Holidays (MH)?
1. National Special Public Holiday
A: The MHs, except Eid’l Fitr, are observed in
GR: Non working days
specified Muslim areas. All private corporations,

offices, agencies and entities or establishments
XPN: Otherwise declared by the
President operating within the designated Muslim provinces
and cities are required to observe MH.
2. Local Special Public Holiday – Regular
Q: When shall Eid’l Fitr and/or Eid’l Adha be
working day. (LOI 814 as amended by LOI
declared a national holiday?
1087)
A: The proclamation declaring a national holiday for
NATIONAL SPECIAL DAYS DATE
the observance of Eid’l Fitr and/or Eid’l Adha shall
All Saints Day November 1
be issued:
Last Day of the Year December 31
Ninoy Aquino Day August 21 1. After the approximate date of the Islamic
Other days declared by law holiday has been determined in

1. Special Non‐working
accordance with the:
days
December 24 a. Islamic Calendar (Hijra) or
2. Special Public Holidays
b. Lunar Calendar or
3. Special National
c. Upon astronomical calculations
Holiday
d. Whichever is possible or convenient
4. Special Holiday ( for all
2. The Office of Muslim Affairs shall inform
schools)
the Office of the President on which day
a. Edsa Revolution
February 25 the holiday shall fall. (Sec.2, Proc. No.
Anniversary
LOCAL SPECIAL DAYS 1841)
Those declared by:
e.g. Manila day (in Q: Can a Christian employee (Ee) working within
1. Law or
Manila only) the Muslim area be compelled to work during MH?
2. Ordinance

A: No. Christians working within the Muslim areas
Q: What are regular holidays (RH)? may not report for work during MH. Not only
Muslim but also Christian Ee in the designated
A: They are compensable whether worked or provinces and cities are entitled to HP on the MH.
unworked subject to certain conditions. They are (SMC v. CA, G.R. 146775, Jan. 30, 2002)
also called legal holidays. The following are
39

Q: Can a Muslim Ee working outside the Muslim 8.Ee paid fixed amount for performing work

area be compelled to work during the observance irrespective of the time consumed in the
of the MH? performance thereof. (Sec. 1, Rule IV,
Book III, IRR)
A: GR: No. Muslim Ees shall be excused from work
during MH without diminution of salary or Q: What are retail establishments?
wages.
A: They are engaged in the sale of goods to end
XPN: Those who are permitted or suffered to users for personal or household use. (e.g. Grocery)
work on MH are entitled to at least 100% basic
pay + 100% as premium of their basic pay. (SMC Q: What are service establishments?
v. CA, G.R. No. 146775, Jan. 30, 2002)
A: They are engaged in the sale of services to
Note: RH falling within temporary or periodic individuals for their own or household use. (e.g. TV
shutdown and temporary cessation of work are repair shop)
compensable. However, if the temporary or periodic
shutdown and cessation of work is due to business Q: Is an exercise of profession retail or service?
reverses, the employer may not pay the RHs during
such period. A: It is neither retail nor service.

Q: Distinguish RH from SD. Q: May an Er require an Ee to work on RH?

A: A: Yes. But Ee shall be compensated twice his
REGULAR HOLIDAY SPECIAL HOLIDAY regular rate.
If Unworked
Regular pay Q: What are the rates of compensation for RH on
(subject to certain Ees regular workday and RH on Ees rest day?
No Pay
conditions for daily paid
Ee’s) A:
If worked FORMULAS TO COMPUTE WAGES ON
+ 30% premium pay of REGULAR HOLIDAYS (RH)
2x regular pay (200%)
100% regular wage (M.C.No.10, Series of 2004)
Other matters RH on Ee’s regular
RH on Ee’s rest day
Set by law Set by proclamation workday
Limited to those provided If unworked
Not exclusive
under Art. 94, LC 100%
100%

Q: Who are entitled to HP? e.g. 300 Php regular wage
e.g. 300 Php (RW)
(RW)
A: GR: All employees (Ees) are entitled. (Sec.1, Rule If worked (1st 8 hrs)
IV, Book III, IRR) + 30% of 200%
200%
XPNS: e.g 600(200% of RW)
1. Gov’t Ees and any of its political e.g. 300(RW) X 0.3
subdivisions, including GOCCs (with + 300 180
original charter) 600 = Total Wage (TW)
2. Retail and service establishments 180+600= 780 (TW)
regularly employing less than 10 workers If worked (OT)(excess of 8 hrs)
3. Domestic helpers and persons in the 230%
personal service of another 230% + 30% of hourly
4. Ee engaged on task or contract basis or 200% + 30% of hourly rate rate on said date
purely commission basis on said date
5. Members of the Family of the Er who are
dependent on him for support Q: What is an important condition that should be
6. Managerial Ee and other member of the met in order to avail/receive the single HP?
managerial staff
A: The Ee should not have been absent without pay
7. Field personnel and other Ee whose time
on the working day preceding the RH.
and performance are unsupervised by the
Er
40
LABOR LAW TEAM:

LABOR STANDARDS
Q: Distinguish between monthly paid and daily cleaning of machineries compensated.
paid Ees. is undertaken
Due to business reverses
RH may not be paid
A: (cessation as authorized by
by the Er
Monthly Paid Ees Daily Paid Ees the Sec. of Labor)
One who is paid his wage or One who is paid his
salary for everyday of the wage or salary only
month, including rest days, on those days he (3)Holiday Pay of Teachers, Piece workers,
Sundays, regular or special actually worked, seafarers, seasonal workers
days, although he does not except in cases of
regularly work on these days. regular or special Q: What are the HPs of certain employees?
days, although he
Not excluded from benefit of does not regularly A:
HP. work on these days. EMPLOYEES RULE
1. RH during semestral
Private school
Q: What is the effect if a legal holiday falls on a vacations
teachers (Faculty
Sunday? - Not entitled to HP
members of
2. RH during Christmas
colleges and
A: A legal holiday falling on a Sunday creates no vacation
universities)
legal obligation for the Er to pay extra to the Ee - Shall be paid HP
who does not work on that day, aside from the HP shall not be less than his
usual HP to its monthly paid Ee. (Wellington v. Ee paid by: average daily earnings for the
Trajano, G.R. 114698, July 3, 1995) 1. results or last 7 actual work days
2. output preceding the RH.
(1)In Case of Absences (Piece work Provided: HP shall not be less
payment) than the statutory minimum
Q: Discuss the concept of absences. wage rate.
May not be paid the required HP
A: Seasonal Workers during offseason where they are
ABSENCES not at work.
LOA with pay on the day LOA without pay on the Workers having no
Shall be entitled to HP
immediatley preceding day immediately regular work days
RH. preceding a RH. Seafarers Shall be entitled to HP
GR: An Ee may not be
paid the required HP Q: Are the school faculty who according to their
if he has not worked contracts are paid per lecture hour entitled to
on such RH. unworked HP?
XPN: Where the day
immediately A:
GR: All covered Ees are
preceding the 1. If during regular holiday – No. Art. 94 of
entitled to HP.
holiday is a: LC is silent with respect to faculty members
1. Non‐working day paid by the hour who because of their teaching
(NWD) in the contracts are obliged to work and consent to
establishment or be paid only for work actually done (except
2. The scheduled rest
when an emergency or a fortuitous event or a
day (RD) of the Ee.
national need calls for the declaration of

special holidays). RH specified as such by law
are known to both school and faculty members
(2)In Case of Temporary Cessation of Work
as "no class days" certainly the latter do not
Q: What is the effect in case there is a temporary expect payment for said unworked days, and
or periodic shutdown and temporary cessation of this was clearly in their minds when they
work? entered into the teaching contracts. (Jose Rizal
College v. NLRC, G.R. No. 65482, Dec. 1, 1987)
A:
TEMPORARY OR PERIODIC SHUTDOWN and 2. If during special public holidays – Yes. The
TEMPORARY CESSATION OF WORK law and the IRR governing HP are silent as to
(Sec. 7, Rule IV, Book III, IRR) payment on Special Public Holidays. It is
Instances Rule: readily apparent that the declared purpose of
1. Yearly inventory or RH falling within the the HP which is the prevention of diminution
2. When the repair or period shall be of the monthly income of the Ees on account
41

of work interruptions is defeated when a Authorized 300%

worked
regular class day is cancelled on account of a absence (at least)
special public holiday and class hours are held 390%
on another working day to make up for time Worked and day is (+30% of
Same
lost in the school calendar. Otherwise stated, Rest Day each 3
the faculty member, although forced to take a 100%)
rest, does not earn what he should earn on
that day. Be it noted that when a special public Q: Is double HP applicable at present?
holiday is declared, the faculty member paid
by the hour is deprived of expected income, A: No, because Araw ng Kagitingan is moved to
and it does not matter that the school calendar Monday nearest April 9. (R.A. 9242)
is extended in view of the days or hours lost,
for their income that could be earned from Q: What is the concept of successive RH?
other sources is lost during the extended days.
Similarly, when classes are called off or A:
shortened on account of typhoons, floods, MAUNDY GOOD ENTITLED
WED
rallies, and the like, these faculty members THURS FRIDAY TO HP
must likewise be paid, whether or not Worked RH RH Yes. Both
extensions are ordered. (Jose Rizal College v. LOA
RH RH Yes. Both
NLRC, G.R. No. 65482, Dec.1, 1987) w/pay
LOA w/o
RH RH No. Both
pay
Q: Lita, a full time professor in San Ildefonso
Yes. Only to
University, is paid on a regular monthly basis. She LOA w/o
Worked RH HP on
teaches for a period of 10 months in a school year, pay
Friday
excluding the 2 month summer‐break. During the

semestral break, the University did not pay her
Q: What are the conditions so that an Ee may be
emergency Cost of Living allowance (ECOLA)
entitled to 2 successive HP?
although she received her regular salary since the

semestral break was allegedly not an integral part st
A: On the day immediately preceding the 1 RH, he
of the school year and no teaching service were
must be:
actually rendered by her. In short, the University

invoked the principle of "no work, no pay". She
1. Present (worked), or
seeks your advice on whether or not she is entitled
2. On LOA with pay. (Sec. 10, Rule IV, Book
to receive her ECOLA during semestral breaks.
III, IRR)
How would you respond to the query?

Q: What if the conditions are not met?
A: There is no longer any law making it the legal
obligation of an employer to grant an Emergency
A: He must work on the 1st RH to be entitled to HP
Cost of Living Allowance (ECOLA). Effective 1981,
on the 2nd RH. (Sec. 10, Rule IV, Book III, IRR)
the mandatory living allowances provided for in
earlier Presidential Decrees were integrated into 5.LEAVES
the basic pay of all covered employees. Thus,
whether the ECOLA will be paid or not during the a.Service Incentive Leave Pay
semestral break now depends on the provisions of
the applicable wage order or contract which may be Q: What is service incentive leave (SIL)?
a CBA, that many grant said ECOLA. (1997 Bar
Question) A: It is 5 days leave with pay for every employee
who has rendered at least 1 yr of service. It is
Q: What is the concept of double HP? commutable to its money equivalent if not used or
exhausted at the end of year.
A: 2 RH on same day.
Q: What do you mean by at least 1 year of service?
MAUNDY
WED THURSDAY & ARAW RATE
A: Service for not less than 12 months, whether
NG KAGITINGAN
continuous or broken reckoned from the date the
Present unworked 200%
employee started working, including authorized
LOA w/pay unworked 200%
absences and paid regular holidays unless the
300%
LOA w/ pay worked working days in the establishment as a matter of
(at least)
42
LABOR LAW TEAM:

LABOR STANDARDS
practice or policy, or that provided in the the SIL may be on a pro‐rata basis. (No. VI(c), DOLE

employment contract is less than 12 months, in Handbook on Worker’s Statutory Monetary Benefit)
which case said period shall be considered as one
year. (Sec. 3, Rule V, Book III, IRR) Q: Are part‐time workers entitled to the full
benefit of the yearly 5 day SIL?
Q: Who are entitled to SIL?
A: Yes. Art. 95 of Labor Code speaks of the number
A: GR: Applies to every Ee who has rendered at of months in a year for entitlement to said benefit.
least 1 year of service. (Art. 95[a]) (Bureau of Working Conditions Advisory Opinion to
Phil. Integrated Exporter’s, Inc.)
XPNS:
1. Government Ees and any of its political Q: Are piece‐rate workers entitled to the full
subdivisions including GOCCs benefit of the yearly 5 day SIL?
2. Those already enjoying the benefit
3. Domestic helpers and persons in the A: It depends.
personal services of another
4. Those already enjoying vacation leave with 1. Yes. Provided:
pay of at least 5 days a. They are working inside the premises
5. Managerial Ees of the employer (Er) and
6. Field personnel and other Ees whose b. Under the direct supervision of the
performance is unsupervised by the Er Er.
7. Employed in establishments regularly 2. No. Provided:
employing less than 10 workers a. They are working outside the
8. Exempt establishments premises of the Er
9. Engaged on task or contract basis, purely b. Hours spent in the performance of
commission basis, or those who are paid in work cannot be ascertained with
a fixed amount of performing work reasonable certainty
irrespective of the time consumed in the c. The are not under the direct
performance thereof. (Art. 95[b]) supervision of the Er

Q: Are teachers of private schools on contract Q: Does it apply to Ees with salaries above
basis entitled to SIL? minimum wage?

A: Yes. The phrase "those who are engaged on task A: No. The difference between the minimum wage
or contract basis" should, however, be related with and the actual salary received by the Ees cannot be
"field personnel" applying the rule on ejusdem deemed as their 13th month pay and SIL pay as such
generis that general and unlimited terms are difference is not equivalent to or of the same
restrained and limited by the particular terms that import as the said benefits contemplated by law.
they follow. Clearly, Cebu Institute of Technology (JPL Marketing Promotions v. CA, G.R. No. 151966,
teaching personnel cannot be deemed as field July 8, 2005.)
personnel which refers "to non‐agricultural Ees who
regularly perform their duties away from the Q: Explain the entitlement of terminated Ees to
principal place of business or branch office of the Er SIL.
and whose actual hours of work in the field cannot
be determined with reasonable certainty. (Par. 3, A:
Art. 82, LC). (CIT vs. Ople, G.R. No. 70203, Dec. 18, 1. Illegally dismissed Ees ‐ entitled to SIL
1987) until actual reinstatement. (Integrated
Contractor and Plumbing Works, Inc. v.
Q: Is SIL commutable to its monetary equivalent if NLRC, G.R.No. Aug.9, 2005)
not used or exhausted at the end of the year? 2. Legally dismissed Ees – the Ee who had
not been paid of SIL from outset of
A: Yes. It is aimed primarily at encouraging workers employment is entitled only of such pay
to work continuously and with dedication to the after a year from commencement of
company. service until termination of employment
or contract. (JPL Marketing Promotions v.
Q: What is the basis for cash conversion? CA, G.R. No. 151966, July 8, 2005)

A: The basis shall be the salary rate at the date of
commutation. The availment and commutation of
43

b.Maternity Leave said Ee would otherwise have been

entitled to, and the SSS shall in turn pay
Q: What is maternity leave benefit? such amount to the Ee concerned.

A: A covered female employee (Ee) is entitled to a c.Paternity Leave
daily maternity benefit equivalent to 100% of her
present basic salary, allowances and other benefits Q: What is the concept of paternity leave benefits?
or the cash equivalent of such benefits for 60 days
or 78 days in case of caesarian delivery. A: Notwithstanding any law, rules and regulations
to the contrary, every married male employee in
Q: What are the requirements in order that the private and public sectors shall be entitled to a
maternity benefits may be claimed? paternity leave of 7 days with full pay for the first 4
deliveries of the legitimate spouse with whom he is
A: cohabiting.
1. There is childbirth, abortion or
miscarriage Q: What is paternity leave?
2. She has paid at least 3 monthly
contributions A: It refers to the benefits granted to a
married male employee allowing him not to report
Q: What are the conditions? for work for 7 days but continues to earn the
compensation therefore, on the condition that his
A: spouse has delivered a child or suffered
1. The Ee shall have notified her employer a miscarriage for purposes of enabling him to
(Er) of her pregnancy and the probable effectively lend support to his wife in her period of
date of her childbirth which notice shall recovery and/or in the nursing of the newly‐born
be transmitted to the SSS child.

2. The payment shall be advanced by the Er Q: What are the requirements in order to avail
in 2 equal installments within 30 days paternity leave?
from the filing of the maternity leave
application A: The male employee (Ee) applying for paternity
leave shall:
3. In case of caesarian delivery, the Ee shall
be paid the daily maternity benefit for 78 1. Notify his employer (Er) of the pregnancy
days of his legitimate spouse and
2. The expected date of such delivery.
4. Payment of daily maternity benefits shall
be a bar to the recovery of sickness Q: What are the conditions for entitlement to
benefits for the same compensable paternity leave?
period of 60 days for the same childbirth,
abortion, or miscarriage A: The male Ee is;
5. The maternity benefits provided under 1. Legally married to, and is cohabiting with
Section 14‐A shall be paid only for the the woman who delivers the baby
first four deliveries 2. Ee of private or public sector;
3. Only for the first 4 deliveries of legitimate
6. The SSS shall immediately reimburse the spouse with whom he is cohabiting; and
Er of 100% of the amount of maternity 4. Notify his Er of the pregnancy of his
benefits advanced to the Ee by the Er legitimate spouse and the expected date
upon receipt of satisfactory proof of such of such delivery
payment and legality thereof; and
Note: For purposes of this Act, delivery shall include
7. If an Ee should give birth or suffer childbirth or any miscarriage.
abortion or miscarriage without the
required contributions having been Q: Jemuel is a bank employee of BPI. He is
remitted for her by her Er to the SSS, or cohabiting with Paula for straight five years with
without the latter having been previously whom he has four children. On the fifth year of
notified by the Er of the time of the their cohabitation, Paula had her miscarriage.
pregnancy, the Er shall pay to the SSS Jemuel is availing himself of his paternity leave. Is
damages equivalent to the benefits which he entitled to paternity leave?
44
LABOR LAW TEAM:

LABOR STANDARDS
A: No. Jemuel is not entitled to paternity he/she is entrusted with the custody
leave because the facts of the case only show that of the children;
he is only cohabiting with Paula. The law expressly e. Nullity or annulment of marriage as
provides that the male must be legally married to decreed by a court or by a church as
the woman with whom he is cohabiting as a long as he/she is entrusted with the
condition for entitlement of paternity leave. Even custody of the children;
assuming that Jemuel is legally married to Paula, he f. Abandonment of spouse for at least 1
cannot avail also of the paternity leave because the yr;
law limits the deliveries only to four which include 3. Unmarried mother/father who has
childbirth or miscarriage. Based on the facts, it is preferred to keep and rear his or her
already the fifth delivery of the woman. child/children instead of:
a. having others care for them or
d.Parental Leave b. give them up to a welfare institution;
4. Any other person who solely provides:
Q: What is parental leave? a. parental care and
b. support to a child or children;
A: Leave benefits granted to a solo parent to enable 5. Any family member who assumes the
him/her to perform parental duties and responsibility of head of family as a result
responsibilities ‐ where physical presence is of the:
required. a. death,
b. abandonment,
In addition to leave privileges under existing laws, c. disappearance or
parental leave of not more than 7 working days d. prolonged absence of the parents or
every year shall be granted to any solo parent Ee solo parent.
who has rendered service of at least 1 year. (Sec. 8)
Note: A change in the status or circumstance of the
Q: What are the conditions for entitlement of parent claiming benefits under this Act, such that
parental leave? he/she is no longer left alone with the responsibility of
parenthood, shall terminate his/her eligibility for these
A: benefits. (Sec.3)
1. He or she must fall among those referred to as
solo parent e.Leaves for victims of violence against women
2. Must have the actual and physical custody of
the child or children Q: What is the leave for victims of violence against
3. Must have at least rendered service of one women or otherwise known as battered woman
year to his or her employer leave?
4. He or she must remain a solo parent
A: A female employee who is a victim of violence
Q: Who are those referred to as solo parent (physical, sexual, or psychological) is entitled to a
entitled to parental leave? paid leave of 10 days in addition to other paid
leaves. (R.A. 9262, Anti‐ VAWC Act)
A: Any individual who falls under any of the ff.
categories: 6.SERVICE CHARGES

1. A woman who gives birth as a result of rape a.Coverage and Exclusion
and other crimes against chastity even
without a final conviction of the offender, Q: What are service charges (SC)?
provided, That the mother keeps and
raises the child; A: These are charges collected by hotels,
2. Parent left solo or alone with the restaurants and similar establishments and shall be
responsibility of parenthood due to: distributed at the rate of:
a. Death of spouse;
b. Detention or service of sentence of COVERED Ees MANAGEMENT
spouse for a criminal conviction for at
least 1 yr; 85% 15%
c. Physical and/or mental incapacity of
spouse 1. To answer for losses and
Equally
d. Legal separation or de facto separation breakages and
distributed
2. Distributed to Ees receiving
from spouse for at least 1 yr as long as
45

among them more than P2000 a month at Provided, that they have worked for at least 1
the discretion of the month, during a calendar year. (Revised
th
management. Guidelines on the Implementation of the 13
Month Pay Law)
Q: Who are covered Ees?
XPN:
A: GR: All Ees are covered, regardless of their 1. Government Ees
position, designation, employment status, 2. Household helpers
irrespective of the method by which their wages are 3. Ees paid purely on commission basis
paid. 4. Ees already receiving 13th month pay

Note: Applies only to hotels, restaurants and similar Q: What would be your advice to your client, a
establishment collecting service charges. manufacturing company, who asks for your legal
opinion on whether or not the 13th Month Pay
XPN: Managerial Ees. (Sec. 2, Rule VI, Book III, IRR) Law covers a casual Ee who is paid a daily wage?

b.Distribution A: I will advise the manufacturing company to pay
the casual Ee 13th Month Pay if such casual Ee has
Q: When is the share of employee distributed and worked for at least 1 month during a calendar year.
paid to them? The law on the 13th Month Pay provides that Ees
are entitled to the benefit of said law regardless of
A: Not less than once every 2 weeks or twice a their designation or employment status.
month at intervals not exceeding 16 days.
The SC ruled in Jackson Building‐Condominium
c.Integration Corp. v. NLRC, G.R. No. 112546, March 13, 1996,
interpreting P.D.851, as follows: Ees are entitled to
Q: What happens if the Service Charge is the 13th month pay benefits regardless of their
abolished? designation and irrespective of the method by
which their wages are paid. (1998 Bar Question)
A: The share of the covered Ees shall be considered
integrated in their wages on the basis of the Note: An Er, may give to his Ees ½ of the required 13th
average monthly share of each Ees for the past 12 Month pay before the opening of the regular school yr.
months immediately preceding the abolition. and the other half on or before the Dec. 24.
Note: Service charges form part of the award in illegal Q: Is 13th Month Pay legally demandable?
dismissal cases.
A: Yes. It is a statutory obligation, granted to
7.13th MONTH PAY AND OTHER BONUSES covered Ees, hence, demandable as a matter of
right. (Sec 1, P.D. 851)
a.Coverage, Exclusion/ exemptions from coverage
b.Nature of 13th Month Pay
Q: What is 13th month pay or its equivalent?
Q: In what form is the 13th month pay paid or
A: Additional income based on wage required by given?
P.D. 851 Requiring all Employers to pay their
Employees a 13th month pay which is equivalent to A: It is given in the form of:
1/12 of the total basic salary earned by an
employee (Ee) within a calendar year. 1. Christmas Bonus
2. Midyear Bonus
Q: Who are covered by P.D. 851? 3. Profit Sharing Scheme
4. Other Cash bonuses amounting to not
A: GR: All rank‐and‐file Ees regardless of the less than 1/12 of its basic salary
amount of basic salary that they receive in a
month, if their employers (Er) are not otherwise Note: It must always be in the form of a legal tender.
exempted from paying the 13th month pay. Such
th
Ees are entitled to the 13 month pay Q: What are not proper substitutes for 13th Month
regardless of said designation of employment pay?
status, and irrespective of the method by which
their wages are paid. A:
1. Free rice
46
LABOR LAW TEAM:

LABOR STANDARDS
2. Electricity last 2 years, subject to the provision
3. Cash and stock dividends of Sec. 7 of P.D. 851;
4. COLA (Sec. 3)
2. The Government and any of its political
Q: Concepcion Textile Co. included the OT pay, subdivisions, including GOCCs, except
night‐shift differential pay, and the like in the those corporations operating essentially
computation of its Ees’ 13th‐month pay. as private subsidiaries of the
Subsequently, with the promulgation of the Government;
decision of the SC in the case of SMC vs. Inciong 3. Ers already paying their Ees 13‐month pay
(103 SCRA 139) holding that these other monetary or more in a calendar year of its
claims should not be included in the computation equivalent at the time of this issuance:
of the 13th month pay, Concepcion Textile Co.
sought to recover under the principle of solutio 4. Its equivalent shall include:
indebiti the overpayment of the Ees’ 13th‐month a. Christmas bonus
pay, by debiting against future 13th‐month b. Mid‐year bonus
payments whatever excess amounts it had c. Profit‐sharing payments
previously made. and
d. Other cash bonuses
(1) Is the Company's action tenable? amounting to not less than
1/12th of the basic salary
(2) With respect to the payment of the 13th‐ but
month pay after the SMC ruling, what
arrangement, if any, must the Company make in 5. It shall not include:
order to exclude from the 13th‐month pay all a. cash and stock dividends,
earnings and remunerations other than the basic b. COLA
pay? c. all other allowances
regularly enjoyed by the
A: The Company's action is not tenable. The Ee, as well as non‐
principle of solutio indebiti which is a civil law monetary benefits.
concept is not applicable in labor law. (Davao Fruits
Corp. vs. NLRC, et al., G.R. No. 85073 August 24, 6. Ers of household helpers and persons in
1993). After the 1981 SMC ruling, the High Court the personal service of another in relation
decided the case of Philippine Duplicators Inc. vs. to such workers; and
NLRC, GR 110068, Nov. 11, 1993. Accordingly,
management may undertake to exclude sick leave, 7. Ers of those who are paid on purely
vacation leave, maternity leave, premium pay for commission, boundary, or task basis, and
regular holiday, night differential pay and cost of those who are paid a fixed amount for
living allowance. Sales commissions, however, performing a specific work, irrespective of
should be included based on the settled rule as the time consumed in the performance
earlier enunciated in Songco vs. NLRC, G.R. No. L‐ thereof, except where the workers are
50999, March 23, 1990. (1994 Bar Question) paid on piece‐rate basis in which case the
employer shall be covered by this
Q: Are all Ers required to pay 13th Month Pay issuance insofar as such workers are
under P.D. 851? concerned.(Sec 3, P.D. 851)

A:
Q: What are the options of covered Ers?
GR: Yes. It applies to all Ers,
A:
XPN: 1. Pay one‐half of the 13th‐month pay
1. Distressed Ers: required before the opening of the
a. Currently incurring substantial losses regular school year and the other half on
or or before the 24th day of December of
b. In the case of non‐profit institutions every year.
and organizations, where their 2. In any establishment where a union has
income, whether from donations, been recognized or certified as the
contributions, grants and other collective bargaining agent of the Ee, the
earnings from any source, has periodicity or frequency of payment of
consistently declined by more than the 13th month pay may be the subject of
40% of their normal income for the agreement.
47

Manggagawa sa Honda, G.R. No. 145561, June

Q: How are claims adjudicated? 15, 2005)

A: Non‐payment of the 13th month pay provided by XPN: Ees who are paid a guaranteed minimum
P.D. 851 and the rules of NLRC shall be treated as wage or commissions earned are entitled to 13th
money claims cases. month pay based on total earnings. (Philippine
Agricultural Commercial and Industrial Workers
Q: Are the following Ees entitled to 13th month Union v. NLRC, G.R. No. 107994, Aug. 14, 1995)
pay?
th
Q: Is 14 Month Pay legally demandable?
a. Ees who are paid by results
b. Ees with multiple Ers th
A: No. The granting of 14 month pay is a
c. Private school teachers management prerogative and is not legally
d. Resigned or separated Ees demandable. It is basically a bonus and is gratuitous
in nature. (Kamaya Point Hotel v. NLRC, G.R. No.
A: 75289, Aug. 31, 1989)
1. Ee paid by results – entitled to 13th month
pay. c.Commissions vis‐à‐vis 13th month pay

Note: Ees paid a fixed or guaranteed wage Q: What is commission in relation to 13th month
plus commission are also entitled to the pay?
mandated 13th month pay, based on their
total earnings during the calendar year, i.e. A:
on both their fixed or guaranteed wage and 1. The salesman’s commissions, comprising
commission a pre‐determined percent of the selling
price of the goods sold by each salesman,
2. Those with Multiple Ers – Government Ees were properly included in the term basic
working part time in a private enterprise, salary for purposes of computing their
including private educational institutions, 13th month pay.
as well as Ees working in 2 or more
private firms, whether full or part time 2. The so called commission paid to or
th
basis, are entitled to the required 13 received by medical representatives of
month pay from all their private Ers BoieTakeda Chemicals or by the rank and
regardless of their total earnings from file Ees of Phil. Fuji Xerox were excluded
each or all their Ers. from the term basic salary because these
were paid as productivity bonuses. Such
3. Private School Teachers, including faculty bonuses closely resemble profit sharing,
members of universities and colleges – payments and have no clear, direct,
entitled regardless of the number of necessary relation to the amount of work
months they teach or are paid within a actually done by each individual
year, if they have rendered service for at employee.
least 1 month within a year.
d.CBA vis‐à‐vis 13th month pay
4. Resigned or Separated Ees ‐ If resigned or
separated from work before the time of Q: What is CBA in relation to 13th month pay?
th
payment of 13 month pay, entitled to
monetary benefit in proportion to the A: The absence of an express provision in the CBA
length of time he started working during obligating the employer to pay the members of a
the calendar year up to the time of union thirteenth month pay is immaterial.
resignation or termination of service. Notwithstanding therefore the absence of any
th
(Pro‐rated 13 month pay) contractual agreement, the payment of a thirteenth
month pay being a statutory grant, compliance with
th
Q: When does pro‐ration of 13 Month Pay apply? the same is mandatory and is deemed incorporate
in the CBA.
A: GR: Pro‐ration of this benefit applies only in
cases of resignation or separation from work; 8.WOMEN WORKERS
computation should be based on length of
service and not on the actual wage earned by a.Discrimination (Art. 135. LC); Prohibited Acts (Art.
the worker (Honda Phils. v. Samahan ng 137. LC)
48
LABOR LAW TEAM:

LABOR STANDARDS
Q: What are the unlawful acts against women Ee? Under Sec. 2 of R.A. 9710 or the Magna Carta of
Women, the State condemns discrimination against
A: women in all its forms and pursues by all appropriate
1. Discrimination with respect to the terms means and without delay the policy of eliminating
and conditions of employment solely on discrimination against women in keeping with the
account of sex Convention on the Elimination of All Forms of
a. Payment of lesser compensation to a Discrimination Against Women (CEDAW) and other
female Ee as against a male Ee for international instruments consistent with Philippine
law. The State shall accord women the rights,
work of equal value
protection, and opportunities available to every
b. Favoring a male Ee with respect to
member of society.
promotion, training opportunities,

study and scholarship grants on The State shall take steps to review and, when
account of gender. (Art. 135) necessary, amend and/or repeal existing laws that are
c. Favoring a male applicant with discriminatory to women within three (3) years from
respect to hiring where the the effectivity of this Act. (Sec. 12, R.A. 9710)
particular job can equally be handled
by a woman Q: Can an individual, the sole proprietor of a
d. Favoring a male Ee over a female Ee business enterprise, be said to have violated the
with respect to dismissal of Anti‐Sexual Harassment Act of 1995 if he clearly
personnel. discriminates against women in the adoption of
2. Stipulating, whether as a condition for policy standards for employment and promotions
employment or continuation of in the enterprise? Explain.
employment:
a. That a woman Ee shall not get A: When an employer (Er) discriminates against
married, or women in the adoption of policy standards for
b. That upon marriage, such woman Ee employment and promotion in his enterprise, he is
shall be deemed resigned or not guilty of sexual harassment. Instead, the Er is
separated. (Art. 136) guilty of discrimination against women Ees which is
Note: A woman worker may not be declared to be unlawful by the LC.
dismissed on the ground of dishonesty for
having written ‘’single” on the space for civil For an Er to commit sexual harassment, he – as a
status on the application sheet, contrary to
person of authority, influence or moral ascendancy
the fact that she was married. (PT&T Co. v.
– should have demanded, requested or otherwise
NLRC, G.R. No. 118978, May 23, 1997)
required a sexual favor from his Ee whether the
3. Dismissing, discriminating or otherwise
demand, request or requirement for submission is
prejudice a woman Ee by reason of her
accepted by the object of said act. (2003 Bar
being married. (Art. 136)
Question)
4. Denying any woman Ee benefits provided

by law. (Art. 137)
Q: At any given time, approximately 90% of the
5. Discharge any woman for the purpose of
production workforce of a semiconductor
preventing her from enjoying any of the
company are females. 75% of the female workers
benefits provided by law. (Art. 137)
are married and of child‐bearing years. It is
6. Discharging such woman on account of
imperative that the Company must operate with a
her pregnancy, or while on leave or in
minimum number of absences to meet strict
confinement due to her pregnancy. (Art.
delivery schedules. In view of the very high
137)
number of lost working hours due to absences for
7. Discharging or refusing the admission of
family reasons and maternity leaves, the company
such woman upon returning to her work
adopted a policy that it will employ married
for fear that she may again be pregnant.
women as production workers only if they are at
(Art. 137)
least 35 yrs of age. Is the policy violative of any

law?
Note: Discrimination in any form from pre‐
employment to post employment, including hiring,
promotion or assignment, based on the actual,
A: Yes, it is violative of Art. 140 of the LC which
perceived or suspected HIV status of an individual is provides that no employer shall discriminate
unlawful. (Philippine AIDS Prevention and Control Act against any person in respect to terms and
of 1998, [R.A. 8504]) conditions of employment on account of his age.
(1998 Bar Question)
b.Stipulation Against Marriage (Art. 136, LC)
49

Q: What is the no‐spouse employment policy? Glaxo does not impose an absolute prohibition

against relationships between its Ees and those of
A: GR: competitor companies. Its Ees are free to cultivate
1. Policy banning spouses from working in relationships with and marry persons of their own
the same company. choosing. What the company merely seeks to avoid
2. May not facially violate Art. 136 of the LC is a conflict of interest between the Ee and the
but it creates a disproportionate effect company that may arise out of such relationships.
and the only way it could pass judicial Furthermore, the prohibition forms part of the
scrutiny is by showing that it is reasonable employment contract and Tecson was aware of
despite the discriminatory albeit such restrictions when he entered into a
disproportionate effect. relationship with Bettsy. (Duncan Asso. of
Detailman‐PTGWO v. Glaxo Wellcome Phil. Inc.,
XPN: Bona fide occupational qualification rule G.R. No. 162994, Sep.17, 2004)
(BFOQ)
c.Classification of Certain Women Workers (Art.
Q: What is the BFOQ rule? 138, LC)
A: There must be a finding of any BFOQ to justify an Q: Who are covered under this Title?
Ers no spouse rule. There must be a compelling
business necessity for which no alternative exist A: Any women who is permitted or suffered to
other than the discriminating practice. work:
To justify a BFOQ the employer must prove two 1. With or without compensation

factors: 2. In any night club, cocktail lounge,
massage clinic, bar or similar
1. That the employment qualification is establishment
reasonably related to the essential 3. Under the effective control or supervision
operation of the job involved; and of the Er for a substantial period of time
2. That there is a factual basis for believing 4. Shall be considered as an Ee of such
that all or substantially all persons establishment for purposes of labor and
meeting the qualification would be social legislation.
unable to properly perform the duties of
the job. (Star Paper v. Simbol, G.R. No. d.Anti‐ Sexual Harrasment Act
164774, April 12, 2006) RA 7877

Q: What is the importance of the BFOQ Rule? Q: What is the policy of the State in enacting the
Anti‐Sexual Harassment law?
A:
1. To ensure that the Ee can effectively A: The State shall:
perform his work
2. So that the no‐spouse rule will not impose 1. Value the dignity of every individual
any danger to business. 2. Enhance the development of it human
resources
Q: Tecson was employed by Glaxo as medical 3. Guarantee full respect for human rights
representative who has a policy against Ees having and
relationships against competitor’s Ees. Tecson 4. Uphold the dignity of workers, Ee,
married Bettsy, a Branch coordinator of Astra, applicants for employment, students or
Glaxo’s competitor. Tecson was transferred to those undergoing training, instruction or
another area. Tecson did not accept such transfer. education. (Sec. 2)

Is the policy of Glaxo valid and reasonable so as to Q: Who may be held liable for sexual harassment?
constitute the act of Tecson as willful
disobedience? A: In a work, education or training‐related
environment sexual harassment may be committed
A: The prohibition against personal or marital by an:
relationships with Ees of competitors companies
upon Glaxo’s Ees is reasonable under the 1. Ee
circumstances because relationships of that nature 2. Manager
might compromise the interest of the company. 3. Supervisor
50
LABOR LAW TEAM:

LABOR STANDARDS
4. Agent of the (Er) segregating or classifying the Ee

5. Teacher, instructor, professor which in a way would discriminate,
6. Coach, trainer, or deprive or diminish employment
7. Any other person who, having authority, opportunities or otherwise adversely
influence or moral ascendancy over affect said Ee;
another in a work or training or education b. The above acts would impair the Ees’
environment: rights or privileges under existing
a. Demands labor laws; or
b. Requests or c. The above acts would result in an
c. Requires intimidating, hostile, or offensive
any sexual favor from the other, environment for the Ee.
regardless of whether the demand,
request or requirement for 2. In an education or training environment:
submission is accepted by the object a. Against one who is under the care,
of R.A. 7877. (Sec. 3) custody or supervision of the
offender;
Q: How is sexual harassment committed? b. Against one whose education,
training, apprenticeship or tutorship
A: Generally, a person liable demands, requests, or is entrusted to the offender;
otherwise requires any sexual favor from the other, c. Sexual favor is made a condition to
regardless of whether the demand, request or the giving of a passing grade, or the
requirement for submission is accepted by the granting of honors and scholarships,
latter. or the payment of a stipend,
allowance or other benefits,
Q: Under the Sexual Harassment Act, does the privileges, or considerations; or
definition of sexual harassment require a d. Sexual advances result in an
categorical demand or request for sexual favor? intimidating, hostile or offensive
environment for the student, trainee
A: No. It is true that the provision calls for a or apprentice.
“demand, request or requirement of a sexual
favor.” But it is not necessary that the demand, Q: What are the duties of the Er or head of office
request or requirement of a sexual favor be in a work‐related, education or training
articulated in a categorical manner. It may be environment?
discerned, with equal certitude, from the acts of
the offender. A:
1. Prevent or deter the commission of acts
Likewise, it is not essential that the demand, of sexual harassment and
request or requirement be made as a condition for 2. Provide the procedures for the resolution,
continued employment or for promotion to a settlement or prosecution of acts of
higher position. It is enough that the respondent’s sexual harassment.
acts result in creating an intimidating, hostile or
offensive environment for the employee. (Domingo Towards this end, the Er or head of office shall:
v. Rayala, G.R. No. 155831, Feb. 18, 2008)
1. Promulgate appropriate rules and
Q: When is sexual harassment committed? regulations in consultation with the jointly
approved by the Ees or students or
A: Specifically: trainees, through their duly designated
representatives, prescribing the
1. In a work‐related or employment procedure for the investigation or sexual
environment: harassment cases and the administrative
a. The sexual favor is made as a sanctions therefore. (Sec. 4)
condition in the hiring or in the
employment, re‐employment or Note: Administrative sanctions shall not be
continued employment of said a bar to prosecution in the proper courts for
individual, or in granting said unlawful acts of sexual harassment.
individual favorable compensation, The said rules and regulations issued shall
terms, conditions, promotions, or include, among others, guidelines on proper
privileges; or the refusal to grant the decorum in the workplace and educational
sexual favor results in limiting, or training institutions.
51

hostile or unfriendly to the applicant's chances for a
2. Create a committee on decorum and job if she turns down the invitation. [Sec. 3(a)(3),
investigation of cases on sexual R.A. No. 7877, Anti‐Sexual Harassment Act]. (2000
harassment. Bar Question)
3. The Er or head of office, education or
training institution shall disseminate or Q: In the course of an interview, another female
post a copy of this R.A. 7877 for the applicant inquired from the same Personnel
information of all concerned Manager if she had the physical attributes
required for the position she applied for. The
Q: What is the liability of the Er, head of office, Personnel Manager replied: "You will be more
educational or training institution? attractive if you will wear micro‐mini dresses
without the undergarments that ladies normally
A: Ee shall be solidarily liable for damages arising wear." Did the Personnel Manager, by the above
from the acts of sexual harassment committed in reply, commit an act of sexual harassment?
the employment, education or training Reason.
environment provided:
A: Yes. The remarks would result in an offensive or
1. The Er or head of office, educational or hostile environment for the Ee. Moreover, the
training institution is informed of such remarks did not give due regard to the applicant’s
acts by the offended party; and feelings and it is a chauvinistic disdain of her honor,
2. No immediate action is taken thereon. justifying the finding of sexual harassment
(Sec. 5) (Villarama v. NLRC, G.R. No. 106341, Sep. 2, 1994)

Q: Can an independent action for damages be Q: Pedrito Masculado, a college graduate from the
filed? province, tried his luck in the city and landed a job
as utility/maintenance man at the warehouse of a
A: Yes. Nothing under R.A. 7877 shall preclude the big shopping mall. After working as a casual Ee for
victim of work, education or training‐related sexual 6 months, he signed a contract for probationary
harassment from instituting a separate and employment for 6 months. Being well‐built and
independent action for damages and other physically attractive, his supervisor, Mr. Hercules
affirmative relief. (Sec. 6) Barak, took special interest to befriend him. When
his probationary period was about to expire, he
Q: What is the three‐fold liability rule in sexual was surprised when one afternoon after working
harassment cases? hours, Mr. Barak followed him to the men’s
comfort room. After seeing that no one else was
A: An act of sexual harassment may give rise to civil, around, Mr. Barak placed his arm over Pedrito’s
criminal and administrative liability on the part of shoulder and softly said: “You have great potential
the offender, each proceeding independently of the to become a regular Ee and I think I can give you a
others. favorable recommendation. Can you come over to
my condo unit on Saturday evening so we can
Q: When does the action prescribe? have a little drink? I’m alone, and I’m sure you
want to stay longer with the company.” Is Mr.
A: Any action shall prescribe in 3 years. Barak liable for sexual harassment committed in a
work‐related or employment environment?
Q: A Personnel Manager, while interviewing an
attractive female applicant for employment, A: Yes, the elements of sexual harassment are all
stared directly at her for prolonged periods, albeit present. The act of Mr. Barak was committed in a
in a friendly manner. After the interview, the workplace. Mr. Barak, as supervisor of Pedrito
manager accompanied the applicant to the door, Masculado, has authority, influence and moral
shook her hand and patted her on the shoulder. ascendancy over Masculado.
He also asked the applicant if he could invite her
for dinner and dancing at some future time. Did Given the specific circumstances mentioned in the
the Personnel Manager, by the above acts, commit question like Mr. Barak following Masculado to the
sexual harassment? Reason. comfort room, etc. Mr. Barak was requesting a
sexual favor from Masculado for a favorable
A: Yes, because the Personnel Manager, is in a recommendation regarding the latter's
position to grant or not to grant a favor (a job) to employment. It is not impossible for a male, who is
the applicant. Under the circumstances, inviting the a homosexual, to ask for a sexual favor from
applicant for dinner or dancing creates a situation another male. (2000 Bar Question)
52
LABOR LAW TEAM:

LABOR STANDARDS
9.MINOR WORKERS the conditions provided in

iii.
the first instance are met.
a.Regulation of working hours of a child, B. Above 15 but below 18 – may be
Employment of the child in public entertainment, employed in any non‐hazardous work
Prohibition of employing minors in certain C. Above 18 – no prohibition
undertakings and in certain advertisements
Q: What is the duty of the Er before engaging child
Q: What are the general prohibitions? into work?
A: GR: A: The Er shall first secure a work permit from the
1. No person under 18 years of age will be DOLE which shall ensure observance of the
allowed to be employed in an undertaking requirements. (Sec. 12, R.A. 7160)
which is hazardous or deleterious in
nature. Q: What is the rule regarding the issuance of work
2. No Er shall discriminate against any certificates/ permits for children at least 15 but
person in respect to terms and conditions below 18 years of age?
of employment on account of his age.
A: The issuance of a DOLE Certificate to youth aged
XPN: 15 to below 18 years of age is not required by law.
A. Below 15 yrs. Old No employer shall deny opportunity to any such
1. The child works directly under the youth applying for employment merely on the basis
sole responsibility of his parents, or of lack of work permit or certificate of eligibility for
guardians who employ members of employment. Any young person aged 15 to below
his family, subject to the following 18 years of age may present copy of this DOLE
conditions: advisory to any employer, job provider, government
a. Employment does not endanger authority, or his/her representative when seeking
the child’s safety, health and employment or anytime during employment. (DOLE
morals Department Advisory No. 01‐08)
b. Employment does not impair
the child’s normal dev’t Q: What is a non‐hazardous work?
c. Er‐parent or legal guardian
provides the child with the A: It is any work or activity in which the Ee is not
primary and/or secondary exposed to any risk which constitutes an imminent
education prescribed by the danger to his safety and health.
Dept. of Education
2. The child’s employment or Q: What are hazardous workplaces?
participation in public entertainment
or information through cinema, A:
theater, radio or television is 1. Nature of work exposes the workers to
essential provided: dangerous environmental elements,
a. Employment contract is contaminants or work conditions
concluded by the child’s parents 2. Workers are engaged in construction work,
or legal guardian, logging, fire‐fighting, mining, quarrying,
b. With the express agreement of blasting, stevedoring, dock work, deep‐sea
the child concerned, if possible, fishing, and mechanized farming
and 3. Workers are engaged in the manufacture or
c. The approval of DOLE, the handling of explosives and other pyrotechnic
following must be complied products
with: 4. Workers use or are exposed to heavy or
i. The employment does not power‐driven tools
involve advertisement or
commercials promoting Q: You were asked by a paint manufacturing
alcoholic beverages, company regarding the possible employment as a
intoxicating drinks, tobacco mixer of a person, aged 17, who shall be directly
and its by‐products or under the care of the section supervisor. What
exhibiting violence advice would you give? Explain briefly.
ii. there is a written contract
approved by DOLE A: I will advise the paint manufacturing company
that it cannot hire a person who is aged 17. Art 139
53

(c) of the LC provides that a person below 18 yrs of the employment of persons below 18 years of age
age shall not be allowed to work in an undertaking in an undertaking which is hazardous or deleterious
which is hazardous or deleterious in nature as in nature as determined by the SLE.
determined by the SLE. Paint manufacturing has
been classified by the SLE as a hazardous work. 2. An 11‐year old boy who is an accomplished
(2002 Bar Question) singer and performer in different parts of the
country.
Q: What are the prohibitions on the employment
of children in certain advertisements? A: No, he should not be prohibited from being hired
and from performing as a singer. Under Art. VIII Sec.
A: No employment of child models in all 12 par. 2 of R.A. 7619 as amended by R.A. 7658, this
commercial advertisements promoting: constitutes an exception to the general prohibition
against the employment of children below 15 years
1. Violence of age, provided that the following requirements
2. Alcoholic beverages are strictly complied with:
3. Intoxicating drinks
4. Tobacco and its by products 1. The Er shall ensure the protection, health
safety and morals of the child
Q: A spinster school teacher took pity on one of 2. The Er shall institute measures to prevent
her pupils, a robust and precocious 12‐year old the child’s exploitation or discrimination
boy whose poor family could barely afford the cost taking into account the system and level
of his schooling. She lives alone at her house near of remuneration, and the duration and
the school after her housemaid left. In the arrangement of working time; and
afternoon, she lets the boy do various chores as 3. The Er shall formulate and implement,
cleaning, fetching water and all kinds of errands subject to the approval and supervision of
after school hours. She gives him rice and P30.00 competent authorities, a continuing
before the boy goes home at 7:00 every night. The program for training and skill acquisition
school principal learned about it and charged her of the child. Moreover, the child must be
with violating the law which prohibits the directly under the sole responsibility of
employment of children below 15 years of age. In his parents or guardian and his
her defense, the teacher stated that the work employment should not in any way
performed by her pupil is not hazardous, and she interfere with his schooling.
invoked the exception provided in the Department
Order of DOLE for the engagement of persons in 3. A 15‐year old girl working as a library assistant
domestic and household service. Is her defense in a girls' high school.
tenable? Reason?
A: No, she should not be prohibited from working
A: No, her defense is not tenable. Under Art. 139 of as a library assistant because the prohibition in the
the LC on “minimum employable age”, no child LC against employment of persons below 18 years
below 15 years of age shall be employed except of age merely pertains to employment in an
when he works directly under the sole undertaking which is hazardous or deleterious in
responsibility of his parents or guardian, the nature as identified in the guidelines issued by the
provisions of the alleged DO of DOLE to the SLE working as a library assistant is not one of
contrary notwithstanding. A mere DO cannot undertakings identified to be hazardous under D.O.
prevail over the express prohibitory provisions of No 04 Series of 1999.
the LC. (2004 Bar Question)
4. A 16‐year old girl working as model promoting
Q: Determine whether the following minors alcoholic beverages.
should be prohibited from being hired and from
performing their respective duties indicated A: Yes, she should be prohibited from working as a
hereunder: model promoting alcoholic beverages. R.A. 7610
categorically prohibits the employment of child
1. A 17‐year old boy working as miner at the models in all commercials or advertisements
Walwadi Mining Corporation. promoting alcoholic beverages and intoxicating
drinks, among other things.
A: Yes, he should be prohibited from being hired
and from performing the duties of a miner because 5. A 17‐year old boy working as a dealer in a
such constitutes hazardous work under D.O. No. 04 casino.
Series of 1999. Art. 139 (c) of LC expressly prohibits
54
LABOR LAW TEAM:

LABOR STANDARDS
A: Yes, he should be prohibited from working as a - Not allowed to work between 8:00
dealer in casino, because Art. 140 of the LC pm – 6:00 am
prohibits the employment of persons below 18
years of age in an undertaking which is hazardous 2. At least 15 years of age but below 18
or deleterious in nature identified in the guidelines years of age – will not exceed 8 hours a
issued by the SLE. Working as a dealer in a casino is day or 40 hours a week
classified as hazardous under D.O. No. 04 Series of - Not allowed to work between 10:00
1999 as it exposes children to physical, pm – 6:00 am
psychological or sexual abuses. (2006 Bar Question)
Q: What are the worst forms of labor?
b.Act Against Child Labor (RA 9231) and Child Abuse
Law (RA 7610) A:
1. All forms of slavery (Anti‐Trafficking of
Q: What is child labor? Persons Act of 2003) or practices similar
to slavery such as sale and trafficking of
A: Any work or economic activity performed by a children, debt bondage and serfdom and
child that subjects him or her to any form of forced or compulsory labor, including
exploitation or is harmful to his or her health and recruitment of children for use in armed
safety or physical, mental or psychosocial conflict;
development. 2. The use, procuring, offering or exposing
of a child pornography or for
Q: Who is a working child? pornographic performances;
3. The use, procuring, offering or exposing
A: Any child engaged as follows: of a child for illegal or illicit activities,
including the production and trafficking of
1. When the child is below 18 years of age in dangerous drugs and volatile substances
a work or economic activity that is not prohibited under existing laws;
child labor; or 4. Employing child models in all commercials
2. When the child is below 15 years of age: or advertisements promoting alcoholic
a. In work where he/she is directly beverages, intoxicating drinks, tobacco
under the responsibility of his/her and its byproducts and violence; and
parents or legal guardian and where 5. Work which, by its nature or
only members of the child’s family circumstances in which it is carried out, is
are employed; or hazardous or likely to be harmful to the
b. In public entertainment or health, safety or morals of children.
information
Q: Who can file a complaint for unlawful acts
Q: When may the State intervene in behalf of the committed against children?
child?
A:
A: 1. Offended party
1. The parent, guardian, teacher or person 2. Parents or guardians
having care or custody of the child fails or 3. Ascendants or collateral relatives within
rd
is unable to protect the child against the 3 degree of consanguinity
abuse, exploitation and discrimination; or 4. Officer, social worker or representative of
2. When such acts are committed against a licensed child‐caring institution
the child by the said parent, guardian, 5. Officer or social worker of DSWD
teacher or person having care and 6. Barangay chairman of the place where
custody over the child the violation occurred, where the child is
residing or employed
Q: What is the limitation on the hours of work of a 7. At least 3 concerned, responsible citizens
working child? where the violation occurred

A: If the child is: Q: Which courts have jurisdiction over offenses
punishable under R.A. 9231?
1. Below 15 years of age – not more than 20
hours a week and not more than 4 hours A: The Family Courts shall have original jurisdiction
a day over all cases involving offenses punishable under
this Act
55

5. Non‐assignment to a work in a

commercial, industrial or agricultural
10.EMPLOYMENT OF HOUSEHELPERS enterprise at a wage or salary rate lower
than that provided for agricultural or non‐
a.Definition agricultural workers. (Art. 145)
Q: What is domestic or household service? 6. Ees under 18 years of age shall be given
A: opportunity for at least elementary
1. Services in the Ers home education. The cost of education shall be
2. Usually necessary or desirable part of the HH’s compensation, unless
3. For the maintenance and employment otherwise stipulated. (Art 146)
thereof 7. Should be treated in a just and humane
4. Includes ministering to the personal manner. (Art. 147)
comfort and convenience of the members 8. Not to be treated with physical violence
of the Ers household (Art. 147)
5. Including services of family drivers. 9. Suitable and sanitary living headquarters
as well as adequate food and medical
Q: Who is a househelper? attendance. (Art. 148)
10. Termination of employment should be
A: A househelper is synonymous to domestic a. upon expiration of term of
servant employment, or
b. based on just cause (Art. 149)
1. Any person, male or female; 11. Indemnity for unjust termination of
2. Who renders services in and about the Ers service
home and; 12. Employment certification as to nature and
3. Services are usually necessary or Desirable duration of service and efficiency and
for the maintenance and enjoyment conduct of househelper.
thereof, and
4. Ministers exclusively to the personal Q: What is the minimum wage for househelpers?
comfort and enjoyment of Ers family
A:
Note: The children and relatives of a househelper who 1. Meto Manila‐P 800 / month
live under the Ers roof and who share the 2. Other Chartered Cities or First Class
accommodations provided for the househelper by the Municipalities‐P 650 / month
Er shall not be deemed as househelper’s if they are not
3. In other Municipalities‐P 550 / month
otherwise engaged as such and are not required to

perform any substantial household work. (Sec 3, Rule
Note: The minimum cash wage rates shall be paid to
XII, Book III, IRR)
the househelpers in addition to lodging, food and
medical attendance.
The definition of a househelper cannot be interpreted
to include househelp or laundry women working in
Q: Is there an OT Pay for househelpers?
staffhouses of a company. (APEX Mining CO., Inc., v.
NLRC, G.R. No. 94951, April 22, 1991)
A: No. The LC is silent on the grant of OT pay, HP,
b.Benefits accorded househelpers Premium Pay and SIL to those engaged in the
domestic or household service. Moreover Art. 82 of
Q: What are the rights of househelpers? LC expressly excludes domestic helpers from its
coverage. (Ultra Villa Food Haus v. Geniston, G.R.
A: No. 120473, June 23, 1999)
1. Original contract of domestic service shall
not last for more than 2 years but it may Q: Erlinda worked as a cook, preparing the lunch
be renewed by the parties. (Art. 142) and merienda of the Ees of Remington Industrial
2. Entitled to minimum wage in addition to Sales Corp. She worked at the premises of the
lodging, food, and medical attendance. company. When Erlinda filed an illegal dismissal
(Art. 144) case, Mr. Tan, the managing director of Remington
3. Employment contract should be reviewed Corp. claimed that Erlinda was a domestic helper,
every 3 years with the end view of and not a regular Ee of Remington Corp. Mr. Tan
improving the terms and conditions of argued that it is only when the househelper or
employment. (Art. 143) domestic servant is assigned to certain aspects of
4. SSS benefits for those who are receiving the business of the Er that such househelper or
at least P1,000 per month. (Art. 143)
56
LABOR LAW TEAM:

LABOR STANDARDS
domestic servant may be considered as such an d. Reliefs for Unjust Termination

employee. Is Erlinda a domestic or househelper?
Q: What are the rules for indemnity?
A: No, Erlinda is clearly not a househelper. A
“househelper” or “domestic servant” under the A:
Implementing Rules of the LC is one who is 1. If the period for household service is
employed in the Er’s home to minister exclusively fixed, neither the Er nor the househelper
to the personal comfort and enjoyment of the Er’s may terminate the contract before the
family. A househelper, domestic servant or expiration of the term except for just
laundrywoman in a home or in a company cause.
staffhouse is different in the sense that in a 2. If the househelper is unjustly dismissed, he
corporation or a single proprietorship engaged in or she shall be paid the compensation
business or industry or any agricultural or similar already earned plus that for the 15 days
pursuit, service is being rendered in the staffhouses by way of indemnity.
or within the premises of the business of the Er. In 3. If the househelper leaves without
such instance, they are Ees of the company or Er in justifiable reason, he or she shall forfeit
the business concerned, entitled to the privileges of any unpaid salary due him or her not
a regular Ee. The mere fact that the househelper or exceeding 15 days.
domestic servant is working within the premises of
the business of the employer and in relation to or in Q: When can the HH demand for employment
connection with its business, as in its staffhouses certification?
for its guest or even for its officers and Ees,
warrants the conclusion that such househelper or A: Upon the severance of the household service
domestic servant is and should be considered a relationship, the househelper may demand from
regular Ee and not a househelper. (Remington the Er a written statement of the nature and
Industrial v. Castaneda, G.R. Nos. 169295‐96, duration of the service and his/ her efficiency and
Nov.20, 2006) conduct as househelper.

Q: NBC has a resthouse and recreational facility in 11.EMPLOYMENT OF HOMEWORKERS
the highlands of Tagaytay City for the use of its top
executives and corporate clients. The resthouse a.Defintion
staff includes a caretaker, two cooks and a
laundrywoman. All of them are reported to the Q: Who are homeworkers?
SSS as domestic or household Ees of the resthouse
and recreational facility and not of NBC. Can NBC A: They are those who perform in or about his own
legally consider the caretaker, cooks and home any processing or fabrication of goods or
laundrywoman as domestic Ee’s of the resthouse materials, in whole or in part, which have been
and not of NBC? furnished directly or indirectly, by an Er and sold
thereafter to the latter.
A: No, they are not domestic Ees. They are NBC’s
Ees because the resthouse and recreational facility Q: Who is the Er of Homeworker?
are business facilities as they are for use of the top
executives and clients of NBC. (Traders Royal Bank A: Includes any person, natural or artificial who, for
v. NLRC, G.R. No. 127864, Dec. 22. 1999). (2000 Bar his account or benefit, or on behalf of any person
Question) residing outside the country, directly or indirectly,
or through an Ee, agent contractor, subcontractor
c.Termination or any other person:

Q: What is the proper procedure in the 1. Delivers or causes to be delivered, any
termination of a househelper? goods, articles or materials to be
processed or fabricated in or about a
A: The termination of the employment of a home and thereafter to be returned or to
househelper should be: be disposed of or distributed in
accordance with his directions.
a. Upon expiration of the term of 2. Sells any goods, articles or materials to be
employment, or processed or fabricated in or abut a home
b. Based on just cause (Art. 149) and then rebuys them after such
processing or fabrication, either by
himself or through some other person.
57

4. The deduction is made at such rate that

b.Rights and benefits accorded homeworkers the amount deducted does not exceed
20% of the HW’s earnings in a week.
Q: What is the duty of the Er in case he contracts
with another the performance of his work?
Q: Distinguish househelpers from homeworkers.
A: It shall be the duty of the Er to provide in such
contract that the Ees or HWs of the contractor and A:
the latter’s subcontractor shall be paid in HOUSEHELPERS HOMEWORKERS
accordance with the LC. Performs in or about his
own home any processing
Q: What is the liabilty of the Er if the contractor or or fabrication of goods or
subcontractor fails to pay the wages or earnings of Minister to the personal materials, in whole or in
his Ees? needs and comfort of his part, which have been
Er in the latter’s home furnished directly or
A: Er shall be jointly and severally liable with the indirectly, by an Er and
contractor or sub‐contractor to the workers of the sold thereafter to the
latter to the extent that such work is performed latter.
under such contract, in the same manner as if the Q: Josie is the confidential secretary of the
Ees or HWs were directly engaged by the Er. Chairman of the Board of the bank. She is
presently on maternity leave. In an arrangement
Q: Can Homeworkers form labor organizations? where the Chairman of the Board can still have
access to her services, the bank allows her to work
A: Yes. DO No. 5, replacing Rule XIV of the IRR Book in her residence during her leave. For this purpose,
3 of the LC, authorizes the formation and the bank installed a fax machine in her residence,
registration of labor organization of industrial HWs. and gave her a cellphone and a beeper. Is Josie a
It also makes explicit the Ers duty to pay and remit homeworker under the law? Explain.
SSS, Philhealth and ECC premiums.
A: No, she is actually an office worker. She is not an
Q: What are the prohibitions against homework? industrial homeworker who accepts work to be
fabricated or processed at home for a contractor,
A: No homework shall be performed on: which work, when finished, will be returned to or
repurchased by said contractor. (Art. 155, LC) (2000
1. Explosives, fireworks and similar articles; Bar Question)
2. Drugs and poisons; and
3. Other articles, the processing of which 12.APPRENTICES AND LEARNERS
requires exposure to toxic substances.
(Sec. 13, Rule XIV, Book III, IRR) a.Apprentices

c.Conditions for deduction from homeworker’s Q: Who is an apprentice?
earnings A: Any worker who is covered by a written
apprenticeship agreement with an individual
Q: Can the Er make deductions on homeworker’s employer or any of the entities recognized under
earnings? the LC.

A: GR: No Er, contractor or subcontractor shall Q: What is apprenticeship?
make any deduction from the HWs earnings
for the value of materials which have been lost, A: It is practical training on the job supplemented
destroyed, soiled or otherwise damage. by related theoretical instruction.

XPN: Unless the ff. conditions are met: Q: What is an apprenticeable occupation?
1. The HW is clearly shown to be responsible
for the loss or damage A: That which requires more than 3 months of
2. The Ee is given reasonable opportunity to practical training with theoretical instruction
show cause why deductions should not be
made; Q: What is on the job training (OJT)?
3. The amount of such deduction is fair and
A: It is practical work experience through actual
reasonable and shall not exceed the
participation in productive activities given to or
actual loss or damages; and
acquired by an apprentice.
58
LABOR LAW TEAM:

LABOR STANDARDS
Q: What are highly technical industries? Q: What is the employment status of apprentices?
A: Those which are engaged in the application of A: They are contractual workers whose length of
advanced technology. service depends on the term provided for in the
apprenticeship agreement. Thus, the employer is
Q: What are related theoretical instructions? not obliged to employ the apprentice after the
completion of his training.
A: Technical information based on apprenticeship
standards approved by the Bureau. Q: What is the period of apprenticeship?
Note: Prior approval by TESDA (formerly DOLE) of the A: Must not exceed 6 months:
proposed apprenticeship program is a condition sine
qua non. Otherwise, apprentice becomes a regular Ee. 1. 2 months/400 hours: Trades or occupations
(Nitto Enterprises v. NLRC, G.R. No. 114337, Sep. 29, which normally require 1 year or more for
1995). proficiency
2. 1 month/200 hours: Occupations and jobs
Q: What are the qualifications of an apprentice? which require more than 3 months but less
than 1 year for proficiency. (Sec. 19, Rule VI,
A: Book II, IRR)
1. At least 15 years of age
Note: Those below 18 years of age shall not Q: What is the status of an apprentice hired after
work in hazardous occupations such term?
2. Physically fit for the occupation
3. Possess vocational aptitude and capacity A: He is deemed a regular Ee. He cannot be hired as a
4. Possess: probationary Ee since the apprenticeship is deemed
a. The ability to comprehend, and the probationary period.
b. Follow oral and written instructions
5. The company must have an Q: What is the wage rate of an apprentice?
apprenticeship program duly approved by
the DOLE. A: Start at not less than 75% of the statutory
minimum wage for the 1st 6 months (except OJT);
Note: Trade and industry associations may thereafter, shall be paid in full minimum wage,
recommend to the SLE appropriate educational including the full COLA.
requirements for different occupations.
Note: GR: Apprenticeship programs shall be primarily
Q: When is an occupation deemed hazardous? voluntary
A: XPN: Compulsory apprenticeship:
1. Nature of work exposes worker to 1. National security or economic
dangerous environmental elemental development so demand, the President
contaminants or work conditions may require compulsory training
2. Workers are engaged in construction 2. Services of foreign technicians are
work, logging, firefighting, mining, utilized by private companies in
quarrying, blasting, stevedoring, deep‐sea apprenticeable trades.
fishing, and mechanized farming
3. Workers are engaged in the manufacture Q: What are the rules regarding apprenticeship
or handling of explosives and other agreements?
pyrotechnic products
4. Workers use, or are exposed to heavy or A: Apprenticeship agreements, including the wage
power‐driven machinery or equipment. rates of apprentices, shall:

Q: Who may employ apprentices? 1. Conform to the rules issued by SLE.
2. The period of apprenticeship shall not
A: exceed 6 months.
1. Only employers in highly technical 3. Apprenticeship agreements providing for
industries and wage rates below the legal minimum
2. Only in apprenticeable occupations wage, which in no case shall start below
approved by SLE 75% of the applicable min. wage, may be
entered into only in accordance with
59

apprenticeship programs duly approved A: Gomburza College is not liable for the acts of
by the SLE. Padilla because there is no Er‐Ee relationship
4. The DOLE shall develop standard model between them. As provided in the Rules and
programs of apprenticeship. (Sec. 18, Rule Regulations Implementing the LC "there is no Er‐Ee
VI, Book II, IRR) relationship between students on one hand, and
schools, colleges, or universities on the other,
Q: Who signs the apprenticeship agreement? where students work with the latter in exchange for
the privilege to study free of charge, provided the
A: Every apprenticeship agreement shall be signed students are given real opportunity, including such
by: facilities as may be reasonable and necessary to
finish their chosen courses under such
1. The employer or his agent, or arrangement." (1997 Bar Question)
2. An authorized representative of any of
the recognized organizations, associations Q: Who may terminate an apprenticeship
or groups, and agreement?
3. The apprentice.
A:
Q: Who will sign if the apprentice is a minor? 1. Either party may terminate an agreement
after the probationary period but only for
A: An apprenticeship agreement with a minor shall a valid cause.
be signed in his behalf by: 2. It may be initiated by either party upon
filing a complaint or upon DOLE’s own
1. His parent or guardian, or if the latter is initiative.
not available,
2. An authorized representative of the Q: Who may appeal the decision of the authorized
DOLE. agency of the DOLE?

Q: May apprentices be hired without A: It may be appealed by any aggrieved person to
compensation? the SLE within 5 days from receipt of the decision.

A: Required: Note: The decision of the SLE shall be final and
executory.
1. By school
2. By the training program curriculum Q: What is Exhaustion of Administrative Remedies
3. For Graduation (EAR)?
4. For board examinations
A: It is a condition precedent to the institution of
Q: What are the rules on working scholars? action. (Sec. 32b, Rule VI, Book II, IRR)
A: There is no Er‐Ee relationship between students Q: How is the principle of Exhaustion of

on one hand, and schools, where there is written Administrative Remedies applied in case of breach
agreement between them under which the former of apprenticeship agreement?
agree to work for the latter in exchange for the
A: No person shall institute any action for the
privilege to study free of charge. The student is not
enforcement of any apprenticeship agreement or
considered an Ee. (Sec. 14, Rule IX, Book III, IRR)
damages for breach of any such agreement, unless
Q: Padilla entered into a written agreement with he has exhausted all available administrative
Gomburza College to work for the latter in remedies.
exchange for the privilege of studying in said
Q: Who shall settle differences arising out of
institution. His work was confined to keeping clean
apprenticeship agreement?
the lavatory facilities of the school. One school
day, he got into a fist fight with a classmate,
A: The plant apprenticeship committee shall have
Monteverde, as a result of which the latter
the initial responsibility for settling differences
sustained a fractured arm. Victor filed a civil case
arising out of apprenticeship agreement. (Sec. 32b,
for damages against him, impleading Gomburza
Rule VI, Book II, IRR)
College due to the latter's alleged liability as his Er.
Under the circumstances, could Gomburza College Q: What is the procedure for the termination of
be held liable by Victor Monteverde as an Padilla’s apprenticeship?
Er?
60
LABOR LAW TEAM:

LABOR STANDARDS
A: The party terminating shall: A: Only employers in semi‐skilled and other

industrial occupations which are non‐
1. Serve a written notice on the other at apprenticeable.
least 5 days before actual termination,
2. Stating the reason for such decision; and Q: What is the status of learners who have been
3. A copy of said notice shall be furnished allowed or suffered work during the first 2
the Apprenticeship Division concerned. months, if training is terminated by the Er before
the end of the stipulated period through no fault
b.Learners of the learner?

Q: Who are learners? A: They are deemed regular employees. (Sec. 4,
Rule VII, Book II, IRR)
A:
1. They are persons hired as trainees in c.Distinctions between Learnership and
semi‐skilled and other industrial Apprenticeship
occupations
2. Which are non‐apprenticeable and Q: Distinguish Learnership from Apprenticeship.
3. Which may be learned through practical
training on the job in a relatively short A:
period of time Learnership Apprenticeship
4. Which shall not exceed 3 months Nature
5. Whether or not such practical training is Training on the job in semi‐
supplemented by theoretical instructions. Training in trades which
skilled and other industrial
(Sec. 1a, Rule VII, Book II, IRR) are apprenticeable, that
occupation or trades which
is, practical training on
are non‐apprenticeable
the job supplemented
Q: When may learners be employed? and which may be learned
by related theoretical
thru practical training on
instruction for more
A: the job in a relatively short
than 3 months.
1. When no experienced worker is available period of time.
2. It is necessary to prevent curtailment of
Duration of training
employment opportunities; and
3. Employment does not create unfair Min: 3 months
Max: 3 months
competition in terms of labor costs or Max: 6 months
impair or lower working standards. Commitment to employ
With commitment to
Q: What is a learnership agreement? employ the learner as a
regular Ee if he desires No commitment to hire
upon completion of
A: Any employer desiring to employ learners shall
learnership
enter into a learnership agreement with them,
which agreement shall include: In case of pretermination of contract
Considered a regular Ee if
1. The names and addresses of the learners; pre‐termination occurs
2. The duration of the learnership period, after 2 months of training Worker not considered
which shall not exceed 3 months; and the dismissal is as regular employee.
without fault of the
3. The wages or salary rates of the learners
learner.
which shall begin at not less than 75% of
Coverage
the applicable minimum wage; and
Highly technical
4. A commitment to employ the learners if Semi‐skilled/Indus‐trial
industries and only in
they so desire, as regular employees upon occupations
industrial occupation
completion of the learnership.
There is a list of learnable
No list
trades by TESDA
Q: What is the qualification of a learner? Written agreement
Require Learnership Requires Apprenticeship
A: Must be at least 15 years of age. Agreement Agreement

Note: Those below 18 years of age shall not work in

hazardous occupations.

Q: Who may employ learners?
61

disability he can still efficiently perform his work, he

13.HANDICAPPED WORKERS (RA 9277) cannot be classified as handicapped; he would be
13. considered a qualified disabled worker entitled to the
a.Definition same treatment as qualified able‐bodied workers.
Q: Who are handicapped workers (HW)? b.Rights of disabled workers
A: Those whose earning capacity is impaired by: Q: What are the rights and privileges of disabled
workers?
1. Physical deficiency
2. Age A:
3. Injury 1. Equal opportunity for employment
4. Disease 2. Sheltered employment (the gov’t shall
5. Mental deficiency endeavour to provide them work if suitable
6. Illness employment for disabled persons cannot
be found through open employment)
Q: What is the duration of the employment period 3. Apprenticeship
of handicapped workers? 4. Vocational rehabilitation (means to develop
the skills and potentials of disabled workers
A: There is no minimum or maximum duration. It and enable them to compete in the labor
depends on the agreement but it is necessary that market)
there is a specific duration stated. 5. Vocational guidance and counselling
Q: May handicapped workers be hired as c.Prohibitions on discrimination against disabled

apprentices or learners? persons
A: Yes, if their handicap is not such as to effectively Q: What is the prohibition on discrimination

impede the performance of job operations in the against disabled workers?
particular occupations for which they are hired.
(Art. 81) A: No disable person shall be denied access to
opportunities for suitable employment. A qualified
Q: Can a handicapped workers acquire the status disabled employee shall be subject to the same
of a regular Ee? terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits,
A: Yes, if work is usually or necessarily or desirable incentives or allowances as a qualified able bodied
to the business. (Bernardo v. NLRC, G.R No. person.
122917, July 12, 1999)
Five percent (5%) of all casual emergency and
Q: Who may employ handicapped workers? contractual positions in the Departments of Social
Welfare and Development; Health; Education,
A: Employers in all industries. Provided, the Culture and Sports; and other government
handicap is not such as to effectively impede the agencies, offices or corporations engaged in social
performance of job operations in the particular development shall be reserved for disabled
occupations for which they are hired persons.
Q: When can handicapped workers be employed? d.Incentives for employers
A: Q: What are the incentives provided for employers

1. When their employment is necessary to in employing disabled workers?
prevent curtailment of employment
opportunities and A: 1. Entitled to an additional deduction, from their
2. When it will not create unfair competition gross income, equivalent to twenty‐five percent
in labor costs or lower working standards. (25%) of the total amount paid as salaries and
(Art. 79) wages to disabled persons: Provided, however, That
such entities present proof as certified by the
Q: Does the mere fact that a worker has a disability, Department of Labor and Employment that
make him a handicapped worker? disabled persons are under their employ: Provided,
further, That the disabled employee is accredited
A: No, because his disability may not impair his with the Department of Labor and Employment and
efficiency or the quality of his work. If despite his
62
LABOR LAW TEAM:

LABOR STANDARDS
the Department of Health as to his disability, skills

and qualifications
2. 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 fifty percent (50%) of
the direct costs of the improvements or
modifications
Q: Distinguish handicapped from disabled?
A:
Disabled
Handicapped
(Differently Abled)
Refers to all suffering from
restriction of different abilities
Earning capacity is as a result of mental, physical
impaired by age, or or sensory impairment to
physical or mental perform an activity in the
deficiency or injury. manner or within range
considered normal for a
human being.
Covers all activities or
Covers only workers.
endeavors.
Basis: range of activity which
Basis: loss/impairment
is normal for a human
of earning capacity.
being.
Loss due to injury or Restriction due to impairment
physical or mental of mental/physical/ sensory
defect or age. defect .
If hired, entitled to 75%
of minimum wage.
If qualified, entitled to all

terms and conditions as
Subject to definite
qualified able‐bodied person.
periods of
employment.
Employable only when No restrictions on
necessary to prevent employment.
curtailment of
employment Must get equal opportunity
opportunity. and no unfair competition.

63

D. TERMINATION OF EMPLOYMENT suspensions, dismissals and award citations for

meritorious services were all done upon approval
1.EMPLOYER‐EMPLOYEE RELATIONSHIP by BARON's chief security officer. After the
expiration of the contract with ASIA, BARON did
Q: What determines the existence of an not renew the same and instead executed another
employment relationship? contract for security services with another agency.
ASIA placed the affected security guards on
A: It is determined by law and not by contract. "floating status" on "no work no pay" basis.
Whether or not an Er‐Ee relationship exists Having been displaced from work, the ASIA
between the parties is a question of fact. In this security guards filed a case against the BARON for
regard, the findings of the NLRC are accorded not illegal dismissal, overtime pay, minimum wage
only respect but finality if supported by evidence. differentials, vacation leave and sick leave
benefits, and 13th month pay. BARON denied
Note: Taxi or jeepney drivers under the “boundary” liability alleging that ASIA is the employer of the
system are Ee’s of the taxi or jeepney security guards and therefore, their complaint for
owners/operators; so also the passenger bus drivers illegal dismissal and payment of money claims
and conductors. (Jardin vs. NLRC and Goodman Taxi,
should be directed against ASIA. Nevertheless,
G.R. No. 119268, Feb. 23, 2000)
BARON filed a Third Party Complaint against ASIA.

Q: The employment contract stipulates that there
Is there an Er‐Ee relationship between the BARON,
is no Er‐Ee relationship between the parties. Is
on one hand, and the ASIA security guards, on the
that valid?
other hand? Explain briefly.
A: No. The existence of an Er‐Ee relation is a
question of law and being such, it cannot be made A: As a general rule, the security guards of a private
the subject of agreement. (Tabas v. California security guard agency are the employees of the
Manufacturing Co., G.R. No. L‐80680, Jan. 26, 1989) latter and not of the establishment that has entered
into a contract with the private security guard
Q: Banco de Manila and the Ang Husay Janitorial agency for security services. But under the facts in
and Pest Control Agency entered into an the question, Baron Hotel appear to have hired the
Independent Contractor Agreement with the usual security guards, to have paid their wages, to have
stipulations: specifically, the absence of Er‐Ee the power to promote, suspend or dismiss the
relationship, and the relief from liability clauses. security guards and the power of control over
Can the bank, as a client, and the agency, as an them, namely, the security guards were under
independent contractor, stipulate that no Er‐Ee orders of Baron Hotel as regard their employment.
relationship exists between the bank and the Ees Because of the above‐mentioned circumstances,
of the Agency who may be assigned to work in the Baron Hotel is the Er of the security guards.
Bank? Reason.
Q: Assuming that ASIA is the Er, is the act of ASIA
A: Yes, they can stipulate provided the relationship in placing the security guards on "floating status"
is job contracting. However the stipulation cannot lawful? Why?
prevail over the facts and the laws. The existence of
Er‐Ee relationship is determined by facts and law A: It is lawful for a private security guard agency to
and not by stipulation of the parties. (Insular Life place its security guard on a "floating status" if it
Assurance Co.. Ltd. v. NLRC, G.R. No. 119930, March has no assignment to give to said security guards.
12,1998) But if the security guards are placed on a "floating
status" for more than 6 months, the security guards
Q: ASIA executed a 1‐year contract with the Baron may consider themselves as having been dismissed.
Hotel (BARON) for the former to provide the latter (1999 Bar Question)
with 20 security guards to safeguard the persons
and belongings of hotel guests, among others. The Q: Lacson was one of more than 100 Ees who were
security guards filled up Baron application form terminated from employment due to the closure
and submitted the executed forms directly to the of LBM Construction Corporation. LBM was a sister
Security Department of Baron. The pay slips of the company of Lastimoso Construction, Inc. and RL
security guards bore BARON's logo and showed Realty & Dev’t Corp. All 3 entities formed what
that Baron deducted therefrom the amounts for came to be known as the Lastimoso Group of
SSS premiums, medicare contributions and Companies. The 3 corporations were owned and
withholding taxes. Assignments of security guards, controlled by members of the Lastimoso family;
who should be on duty or on call, promotions, their incorporators and directors all belonged to
64
LABOR LAW TEAM:

TERMINATION OF EMPLOYMENT
the Lastimoso family. The 3 corporations were 4. Power of control. (The Labor Code with
engaged in the same line of business, under one Comments and Cases 2007, Azucena, Vol
management, and used the same equipment I, p.158)
including manpower services. Lacson and his co‐
Ees filed a complaint with the Labor Arbiter Q: What is control test?
against LBM, RL Realty and Lastimoso Construction
to hold them jointly and severally liable for A: The person for whom the services are performed
backwages and separation pay. Lastimoso reserves a right to control not only the end to be
Construction, Inc. RL Realty & Development achieved but also the means to be used in reaching
Corporation interposed a Motion to Dismiss such end.
contending that they are juridical entitles with
distinct and separate personalities from LBM Note: However, in certain cases the control test is not
Construction Corporation and therefore, they sufficient to give a complete picture of the relationship
cannot be held jointly and severally liable for the between the parties, owing to the complexity of such a
money claims of workers who are not their Ees. relationship where several positions have been held by
Rule on the motion to dismiss. Should it be the worker. The better approach is to adopt the two‐
tiered test. (Francisco vs. NLRC, G.R. No. 170087, Aug.
granted or denied? Why?
31, 2006)

A: It is very clear that even if LBM Construction
Q: Genesis entered into a Career’s Agent
company, Lastimoso Construction Company, Inc.
Agreement with EmoLife Insurance Company, a
and RL Realty & Dev’t Corp. all belong to the
domestic corporation engaged in insurance
Lastimoso family and are engaged in the same line
business. In the Agreement, it provides that the
of business under one management and used the
agent is an independent contractor and nothing
same equipment including manpower services,
therein shall be construed or interpreted as
these corporations were separate juridical entities.
creating an employer‐ employee relationship. It
Thus, only the LBM Construction Corp. is the Er of
further provides that the agent must comply with
Teofilo Lacson. The other corporation do not have
three requirements: (1) compliance with the
any Er‐Ee relations with Lacson. The case in
regulations and requirements of the company; (2)
question does not include any fact that would
maintenance of a level of knowledge of the
justify piercing the veil of corporate fiction of the
company's products that is satisfactory to the
other corporations in order to protect the rights of
company; and (3) compliance with a quota of new
workers. In a case (Concept Builders, Inc. v. NLRC,
businesses. However, EmoLife insurance company
G.R. No. 108734, May 29, 1996) the SC ruled that it
terminated Genesis’ services. Genesis filed an
is a fundamental principle of corporation law that a
illegal dismissal complaint alleging therein that an
corporation is an entity separate and distinct from
employer‐employee relationship exists and that he
its stockholders and from other corporations to
was illegally dismissed. Is he an employee of the
which it may be connected. But this separate and
insurance company?
distinct personality of a corporation is merely a
fiction created by law for convenience and to A: Genesis is not an employee of EmoLife Insurance
promote justice. So, when the notion of separate Company. Generally, the determinative element is
juridical personality is used to defeat public the control exercised over the one rendereing the
convenience, justify wrong, protect fraud or defend service. The concept of “control” in Labor Code has
crime, or is used as a device to defeat the labor to be compared and distinguished with “control”
laws, this separate personality of the corporation that must necessarily exist in a principal‐agent
maybe disregarded or the veil of corporate fiction relationship. The employer controls the employee
pierced. (1999 Bar Question) both in the results and in the means and manner of
achieving this result. The principal in an agency
a.Four‐ fold test relationship, e.g. insurance agent, on the other
hand, also has the prerogative to exercise control
Q: What factors determine the existence of an Er‐ over the agent in undertaking the assigned task
Ee relationship? based on the parameters outlined in the pertinent
laws. In the present case, the Agreement fully
A: The “four–fold test”: serves as grant of authority to Genesis as EmoLife’s
insurance agent. This agreement is supplemented
1. Selection and engagement of the
by the company’s agency practices and usages, duly
employee;
accepted by the agent in carrying out the agency.
2. Payment of wages;
Foremost among these are the directives that the
3. Power of dismissal; and
principal may impose on the agent to achieve the
65

assigned tasks, to the extent that they do not just cause, when he fails to qualify as a regular Ee in
involve the means and manner of undertaking accordance with reasonable standards prescribed
these tasks. The law likewise obligates the agent to by the Er.
render an account; in this sense, the principal may
impose on the agent specific instructions on how an Q: Michelle Miclat was employed on a
account shall be made, particularly on the matter of probationary basis as marketing assistant by
expenses and reimbursements. To these extents, Clarion Printing House but during her employment
control can be imposed through rules and she was not informed of the standards that would
regulations without intruding into the labor law qualify her as a regular employee (Ee). 30 days
concept of control for purposes of employment. after, Clarion informed Miclat that her
(Gregorio Tongko v. ManuLife Insurance Company, employment contract had been terminated
G.R. No. 167622, Jun. 29, 2010) without any reason. Miclat was informed that her
termination was part of Clarion’s cost‐cutting
b.Two‐ tiered Test measures. Is Miclat considered as a regular Ee and
hence entitled to its benefits?
Q: What is the two‐tiered test?
A: Yes. Probationary employment shall be governed
A: by the following rules: (d) In all cases of
1. The putative Er’s power to control the Ee probationary employment, the Er shall make known
with respect to the means and methods to the Ee the standards under which he will qualify
by which the work is to be accomplished; as a regular Ee at the time of his
and engagement. Where no standards are made known
2. The underlying economic realities of the to the Ee at that time, he shall be deemed a regular
activity or relationship. Ee”. In the case at bar, she was deemed to have
been hired from day one as a regular Ee. (Clarion
Note: This two‐tiered test would provide us with a Printing House Inc., vs. NLRC, G.R. No. 148372, June
framework of analysis, which would take into 27, 2005)
consideration the totality of circumstances
surrounding the true nature of the relationship
Q: What are the characteristics of probationary
between the parties. This is especially appropriate in
employment?
this case where there is no written agreement or

terms of reference to base the relationship on and due
to the complexity of the relationship based on the A:
various positions and responsibilities given to the 1. It is an employment for a trial period;
worker over the period of the latter’s employment. 2. It is a temporary employment status prior
(Francisco vs. NLRC, G.R. No. 170087, Aug. 31, 2006) to regular employment;
3. It arises through a contract with the
Q: What is the proper standard for economic following elements:
dependence? a. The employee (Ee) must learn and
work at a particular type of work
A: The proper standard is whether the worker is b. Such work calls for certain
dependent on the alleged employer for his qualifications
continued employment in that line of business c. The probation is fixed
d. The Er reserves the power to
c.Probationary employment terminate during or at the end of the
trial period
Q: What is probationary employment? e. And if the Ee has learned the job to
the satisfaction of the Er, he
A: Employment where the employee (Ee), upon his becomes a regular Ee.
engagement:
Q: What is the period of probationary
1. Is made to undergo a trial period employment?
2. During which the Er determines his fitness
to qualify for regular employment, A: GR: It shall not exceed 6 months.
3. Based on reasonable standards made
known to the Ee at the time of XPNs:
engagement. (Sec 6, Rule I, Book VI, IRR) 1. Covered by an apprenticeship or
learnership agreement stipulating a
Note: The services of an Ee who has been engaged different period
on probationary basis may be terminated only for
66
LABOR LAW TEAM:

2. Voluntary agreement of parties According to Alcira’s computation, since Art. 13 of

(especially when the nature of work the Civil Code provides that 1 month is composed
requires a longer period) of 30 days, 6 months totaling 180 days, then his
th
3. The Er gives the(Ee a second chance to 180 day would fall on Nov. 16, ‘96 making him a
pass the standards set. (Mariwasa regular Ee before his termination. Is the
Manufacturing, Inc. v. Leogardo, Jr.,G.R. contention of the petitioner in the computation of
No. 74246, Jan. 26, 1989) 6 months correct?
4. When the same is required by the nature
of the work, e.g. the probationary period A: No, the computation of the 6‐month
set for professors, instructors and probationary period is reckoned from the date of
teachers is 3 consecutive years of appointment up to the same calendar date of the
th
satisfactory service pursuant to DOLE 6 month following. In short, since the number of
Manual of Regulations for Private Schools. days in each particular month was irrelevant, Alcira
5. When the same is established by was still a probationary Ee when Middleby opted
company policy. not to “regularize” him on Nov. 20, 1996. (Alcira v.
NLRC, G.R. No. 149859, June 9, 2004)
Note: Period of probation shall be reckoned from the
date the Ee actually started working. (Sec.6 [b], Rule I, Note: In Mitsubishi Motors v. Chrysler Phils. Labor
Book VI, IRR) Union, G.R. No. 148738, June 29, 2004, the SC ruled in
this wise:
After the lapse of the probationary period (6 months),
Ee becomes regular. “Applying Art. 13 of the Civil Code, the probationary
period of 6‐months consists of the 180 days. This is in
Probationary Ees may be dismissed before end of the conformity with par.1, Art. 13 of the Civil Code. The
probationary period. number of months in the probationary period, 6,
should then be multiplied by the number of days
Q: May the Er and Ee validly agree to extend the within a month, 30; hence, the period of 180 days. As
probationary period beyond 6 months? clearly provided for the in last par. of Art. 13, in
computing a period, the first day shall be excluded and
A: Yes. Such an extension may be lawfully agreed the last day included. Thus, the 180 days commenced
upon, despite the restrictive language of Art. 281. A on May 27, 1996, and ended on Nov. 23, 1996. The
voluntary agreement extending the original termination letter dated Nov. 25, 1996 was served on
probationary period to give the Ee a second chance Paras only on Nov. 26, 1996. He was, by then already a
regular Ee of the company under Art. 281 of the LC.”
to pass the probation standards constitutes a lawful

exception to the statutory limit. (Mariwasa
How to resolve the conflict between the Alcira and
Manufacturing, Inc. v. Leogardo, Jr., G.R. No. 74246, Mitsubishi Motors case
Jan.26, 1989)
1. Statutory Construction – The latter case
Note: By voluntarily agreeing to such an extension, the prevails (Mitsubishi Motors); or
Ee waived any benefit attaching to the completion of 2. Rule more favorable to the Ee – use the
the period if he still failed to make the grade during computation which would amount to
the period of extension. (Mariwasa Mfg. Inc. v. Hon. granting the subject Ee regular employment
Leogardo, G.R. No. 74246, Jan.26, 1989) status (based on Constitutional and
statutory provisions for the liberal
Q: Is double or successive probation allowed? interpretation of labor laws)

A: No. The evil sought to be prevented is to
Q: What is the purpose of the period?
discourage scheming employers from using the
system of double or successive probation to A: To afford the employer an opportunity to
circumvent the mandate of the law on observe the fitness of a probationary employee at
regularization and make it easier for them to work.
dismiss their employees. (Holiday Inn Manila v.
NLRC, G.R. No. 109114, Sep. 14, 2003) Q: In what instances is a probationary employee
(Ee) deemed a regular Ee?
Q: Middleby Phils. Corp. hired Alcira as eng’g
support services supervisor on a probationary A:
basis for 6 months. Apparently unhappy with 1. If he is allowed to work after a
Alcira’s performance, Middleby terminated his probationary period. (Art. 281)
services. Alcira contends that he was already a
regular employee (Ee) when he was terminated.
67

2. If no standards, under which he will A: Yes, there is no dispute that as a probationary
qualify as a regular Ee, are made known employee (Ee), Cruz had but limited tenure.
to him at the time of his engagement. Although on probationary basis, however, Cruz still
(Sec. 6 [d], Rule I, Book VI, IRR) enjoys the constitutional protection on security of
tenure. During his tenure of employment, therefore,
Q: What are the grounds for terminating or before his contract expires, Cruz cannot be
probationary employment? removed except for cause as provided for by law.

A: What makes Cruz’ dismissal highly suspicious is that
1. Just/authorized causes it took place at a time when he needs only but a
2. When he fails to qualify as a regular Ee in day to be eligible as a regular Ee. That he is
accordance with reasonable standards competent finds support in his being promoted to a
made known by the employer (Er) to the lead gardener in so short span of less than 6
Ee at the time of his engagement (ICMC v. months. By terminating his employment or
NLRC, G.R. No. 72222, Jan. 30, 1989) abolishing his position with but only one day
remaining in his probationary appointment, the
Note: While probationary Ees do not enjoy permanent hotel deprived Cruz of qualifying as a regular Ee
status, they are afforded the security of tenure with its concomitant rights and privileges. (Manila
protection of the Constitution. Consequently, they Hotel Corp. v. NLRC, G.R. No. L‐53453, Jan. 22,
cannot be removed from their positions unless for 1986)
cause. Such constitutional protection, however, ends
upon the expiration of the period stated in their
Q: Colegio San Agustin (CSA) hired the Gela Jose as
probationary contract of employment. Thereafter, the
a grade school classroom teacher on a
parties are free to renew the contract or not. (CSA v.
probationary basis for SY ‘84 – ‘85. Her contract
NLRC, G.R. No. 87333, Sep. 6, 1991)
was renewed for SY’s ‘85‐‘86 and ‘86‐‘87. On Mar.
Q: What are the limitations on the employer’s 24, ‘87, the CSA wrote the Gela that "it would be
(Er’s) power to terminate a probationary in the best interest of the students and their
employment contract? families that she seek employment in another
school or business concern for next school year".
A: Notwithstanding the said notice, the CSA still paid
1. The power must be exercised in Gela her salary for April 15 to May 15, 1987. On
accordance with the specific req’ts of the April 6, ‘87, Gela wrote the CSA and sought
contract reconsideration but she received no reply.
2. If a particular time is prescribed, the Thereafter, she filed a complaint for illegal
termination must be within such time and dismissal. Was Gela illegally dismissed?
if formal notice is required, then that
form must be used A: No. The Faculty Manual of CSA underscores the
3. The Er’s dissatisfaction must be real and completion of 3 years of continuous service at CSA
in good faith, not feigned so as to before a probationary teacher acquires tenure.
circumvent the contract or the law Hence, the Gela cannot claim any vested right to a
4. There must be no unlawful discrimination permanent appointment since she had not yet
in the dismissal achieved the prerequisite 3‐year period under the
Manual of Regulation for Private Schools and the
Note: The probationary employee is entitled to Faculty Manual of CSA.
procedural due process prior to dismissal from service.
In the instant case where the CSA did not wish to
Q: R.L. Cruz was employed as gardener by Manila renew the contract of employment for the next
Hotel on “probation status” effective Sep. 22, ‘76. school year, the Gela has no ground to protest. She
The appointment signed by Cruz provided for a 6 was not illegally dismissed. Her contract merely
month probationary period. On Mar. 20, ‘77, or a expired. (CSA v. NLRC, G.R No. 87333, Sep. 6, 1991)
day before the expiration of the probationary
period, Cruz’s was promoted to lead gardener Q: During their probationary employment, 8 Ees
position. On the same day Cruz’ position was were berated and insulted by their supervisor. In
“abolished” by Manila Hotel allegedly due to protest, they walked out. The supervisor shouted
economic reverses or business recession, and to at them to go home and never to report back to
salvage the enterprise from imminent danger of work. Later, the personnel manager required
collapse. Was Cruz illegally dismissed? them to explain why they should not be dismissed
from employment for abandonment and failure
to qualify for the positions applied for. They filed
68
LABOR LAW TEAM:

a complaint for illegal dismissal against their Er. Regular employment does not mean permanent
As a LA, how will you resolve the case? employment. A probationary Ee becomes a regular Ee
after 6 months. A regular Ee may only be terminated
A: As a LA I will resolve the case in favor of the 8 for just/authorized causes.
probationary Ees due to the ff::
The practice of entering into employment contracts
1. Probationary Ees also enjoy security of which would prevent the workers from becoming
tenure. (Biboso v. Victoria Milling, G.R. regular should be struck down as contrary to public
No. L‐44360, Mar. 31, 1977) policy and morals. (Universal Robina Corp. v.
2. In all cases involving Ees on probationary Catapang, G.R. No. 164736, Oct. 14, 2005)
status, the Er shall make known to the
Ee at the time he is hired, the standards (a)Reasonable connection rule
by which he will qualify for the
positions applied for. Q: What is the test to determine regular
3. The filing of the complaint for illegal employment?
dismissal effectively negates the Ers
A:
theory of abandonment. (Rizada v.
1. The primary standard of determining
NLRC, G.R. No. 96982, Sep. 21, 1999)
regular employment is the reasonable
4. The order to go home and not to return
connection between the particular
to work constitutes dismissal from
activity performed by the employee (Ee)
employment.
to the usual trade or business of the
5. The 8 probationary Ees were terminated
employer. The test is whether the former
without just cause and without due
is usually necessary or desirable in the
process
usual business or trade of the Er. (De Leon

v. NLRC, G.R. No. 70705, Aug. 21, 1989)
In view of the foregoing, I will order

reinstatement to their former positions without
Note: The connection can be determined by
loss of seniority rights with full backwages, plus
considering the nature of the work
damages and atty’s fees. (2006 Bar Question) performed and its relation to the scheme of
the particular business or trade in its
d.Kinds of employment entirety. (Highway Copra Traders v. NLRC,
G.R. No. 108889, July 30, 1998)
(1)Regular employment
Q: What is regular employment? 2. Also, the performance of a job for at least
A: a year is sufficient evidence of the job’s
1. An employment shall be deemed to be necessity if not indispensability to the
regular where the Ee has been engaged to business. This is the rule even if its
perform activities which are usually performance is not continuous and
necessary or desirable in the usual merely intermittent. The employment is
business or trade of the Er, the provisions considered regular, but only with respect
of written agreements to the contrary to such activity and while such activity
notwithstanding and regardless of the exists. (Universal Robina Corp. v.
oral agreements of the parties. (Sec. 5 [a], Catapang, G.R. No. 164736, Oct. 14,
Rule I, Book VI, IRR) 2005).

2. Any Ee who has rendered at least one Note: The status of regular employment attaches to
year of service, whether such service is the casual Ee on the day immediately after the end of
continuous or broken, shall be considered his first year of service. The law does not provide the
a regular Ee with respect to the activity in qualification that the Ee must first be issued a regular
which he is employed and his appointment or must first be formally declared as such
employment shall continue while such before he can acquire a regular status. (Aurora Land
activity exists. (Sec. 5 [b], Rule I, Book VI, Projects Corp. v. NLRC, G.R. No. 114733, Jan. 2, 1997)
IRR)
Q: Is the mode of compensation determinative of
Note: Regularization is not a management prerogative; regular employment?
rather, it is the nature of employment that determines
it. It is a mandate of the law. (PAL v. Pascua, G.R. No. A: No, while the Ees mode of compensation was on
143258, Aug. 15, 2003) a “per piece basis” the status and nature of their
employment was that of regular Ees. (Labor
69

Congress of the Phils v. NLRC, G.R. No. 123938, May were directly related to the business of the

21, 1998) Tanjangco’s as lessors of residential and apartment
bldgs. Moreover, such a continuing need for his
Q: When does Art. 280 not apply? services by the Tanjangcos is sufficient evidence of
the necessity and indispensability of his services to
A: It does not apply in case of OFWs. their business or trade.

Note: Seafarers cannot be considered as regular Ees. Dagui should likewise be considered a regular Ee by
Their employment is governed by the contracts they the mere fact that he rendered service for the
sign everytime they are hired and their employment Tanjangcos for more than one year, that is,
terminated when the contract expires. Their beginning ‘53 until ‘82, under Doña Aurora; and
employment is fixed for a certain period of time. then from 1982 up to June 8, ‘91 under the
(Ravago v. Esso Eastern Maritime Ltd., G.R. No. daughter, for a total of 29 and 9 years respectively.
158324, Mar. 14, 2005) Owing to Dagui's length of service, he became a
regular Ee, by operation of law, one year after he
Q: Moises was employed by La Tondeña at the was employed in ‘53 and subsequently in ‘82.
maintenance section of its Eng’g Dep’t paid on a (Aurora Land Projects Corp. v. NLRC, G.R. No.
daily basis through petty cash vouchers. His work 114733, Jan. 2, 1997)
consisted mainly of painting company building and
equipment and other odd jobs relating to Q: A total of 43 Ees who are deaf‐mutes were
maintenance. After a service of more than 1 year, hired and re‐hired on various periods by Far East
Moises requested that he be included in the Bank and Trust Co. as money sorters and counters
payroll of regular workers, instead of being paid through a uniformly worded agreement called
through petty cash vouchers. Instead La Tondeña’s “Employment Contract for Handicapped Workers.”
dismissed Moises and claimed that Moises was The company disclaimed that these Ees were
contracted on a casual basis specifically to paint regular Ees and maintained among others that
certain company buildings and that its completion they are a special class of workers, who were hired
terminated Moises’ employment. Can Moises be temporarily under a special employment
considered as a regular Ee? arrangement which was a result of overtures
made by some civic and political personalities to
A: Yes, the law demands that the nature and the Bank. Should the deaf‐mute Ees be considered
entirety of the activities performed by the Ee be as regular Ees?
considered. Here, the painting and maintenance
work given Moises manifests a treatment A: Yes. The renewal of the contracts of the
consistent with a maintenance man and not just a handicapped workers and the hiring of others leads
painter, for if his job was only to paint a building to the conclusion that their tasks were beneficial
there would be no basis for giving him other work and necessary to the bank. It also shows that they
assignments in‐between painting activities. were qualified to perform the responsibilities of
their positions; their disability did not render them
It is not tenable to argue that the painting and unqualified or unfit for the tasks assigned to them.
maintenance work of Moises are not necessary in
La Tondeña’s business of manufacturing liquors; The Magna Carta for Disabled Persons mandates
otherwise, there would be no need for the regular that a qualified disabled Ee should be given the
maintenance section of the company’s eng’g dep’t. same terms and conditions of employment as a
(De Leon v. NLRC, G.R. No. 70705, Aug. 21, 1989) qualified able‐bodied person. The fact that the Ees
were qualified disabled persons necessarily
Q: Honorio Dagui was hired by Doña Aurora removes the employment contracts from the ambit
Suntay Tanjangco in 1953 to take charge of the of Art. 80. Since the Magna Carta accords them the
maintenance and repair of the Tanjangco rights of qualified able‐bodied persons, they are
apartments and residential bldgs. He was to thus covered by Art. 280 of the LC. (Bernardo v.
perform carpentry, plumbing, electrical and NLRC, G.R. No. 122917, July 12, 1999)
masonry work. Upon the death of Doña Aurora
Tanjangco in ‘82 her daughter, Teresita Tanjangco Q: Coca‐Cola Bottlers Phils, Inc., (CCBPI) engaged
Quazon, took over the administration of all the the services of the workers as “sales route
Tanjangco properties, and dismissed Dagui. Is helpers” for a period of 5 months. After 5 months,
Honorio Dagui a regular employee (Ee)? the workers were employed by the company on a
day‐to‐day basis. According to the company, the
A: Yes. The jobs assigned to Dagui as maintenance workers were hired to substitute for regular route
man, carpenter, plumber, electrician and mason helpers whenever the latter would be unavailable
70
LABOR LAW TEAM:

or when there would be an unexpected shortage (2)Project Employment

of manpower in any of its work places or an
unusually high volume of work. The practice was Q: What is project employment?
for the workers to wait every morning outside the
gates of the sales office of the company, if thus A: Employment that has been fixed for a specific
hired, the workers would then be paid their wages project or undertaking the completion for which
at the end of the day. Should the workers be has been determined at the time of engagement of
considered as regular employees (Ees) of CCBPI? the employee (Ee). (Sec.5 [a], Rule I, Book VI, IRR).
The period is not the determining factor, so that
A: Yes, the repeated rehiring of the workers and the even if the period is more than 1 year, the Ee does
continuing need for their services clearly attest to not necessarily become regular.
the necessity or desirability of their services in the
regular conduct of the business or trade of the Note: Where the employment of a project Ee is
company. The fact that the workers have agreed to extended long after the supposed project has been
be employed on such basis and to forego the finished, the Ees are removed from the scope of
protection given to them on their security of project Ees and considered as regular Ees.
tenure, demonstrate nothing more than the serious
Repeated hiring on a project‐to‐project basis is
problem of impoverishment of so many of our
considered necessary and desirable to the business of
people and the resulting unevenness between labor
the Er. The Ee is regular (Maraguinot v. NLRC, G.R. No.
and capital. (Magsalin & Coca‐Cola v. N.O.W.M., 120969, Jan. 22, 1998 ). However, repeated hiring does
G.R. No. 148492, May 9, 2003) not necessarily mean regular employment. (Filipinas
Pre‐Fabricated Building Systems (FILSYSTEMS), Inc. v.
Q: Metromedia Times Corp. entered, for the fifth Puente, G.R. No. 153832,. March 18, 2005 )
time, into an agreement with Efren Paguio,
appointing him to be an account executive of the (a)Indicators of project employment
firm. He was to solicit advertisements for “The
Manila Times,”. The written contract between the Q: What are the Indicators of Project
parties provided that, “You are not an Ee of the Employment?
Metromedia Times Corp. nor does the company
have any obligations towards anyone you may A: Either one or more of the following
employ, nor any responsibility for your operating circumstances, among others, may be considered as
expenses or for any liability you may incur. The indicators that an employee is a project employee.
only rights and obligations between us are those (Hanjin v. Ibañez, G.R. No. 170181, June 26, 2008)
set forth in this agreement. This agreement cannot
be amended or modified in any way except with a. The duration of the specific/identified
the duly authorized consent in writing of both undertaking for which the worker is
parties.” Is Efren Paguio a regular employee of engaged is reasonably determinable
Metromedia Times Corporation?
b. Such duration, as well as the specific
A: Yes, he performed activities which were work/service to be performed, is defined
necessary and desirable to the business of the Er, in an employment agreement and is
and that the same went on for more than a year. made clear to the employee at the time of
He was an account executive in soliciting hiring.
advertisements, clearly necessary and desirable, for
the survival and continued operation of the Note: Absent any other proof that the
business of the corp. project employees were informed of their
status as such, it will be presumed that they
The corporation cannot seek refuge under the are regular employees.
terms of the agreement it has entered into with
Efren Paguio. The law, in defining their contractual c. The work/service performed by the
relationship, does so, not necessarily or exclusively employee is in connection with the
upon the terms of their written or oral contract, but particular project/undertaking for which
also on the basis of the nature of the work of Efren he is engaged
has been called upon to perform. A stipulation in
an agreement can be ignored as and when it is d. The employee, while not employed and
utilized to deprive the Ee of his security of tenure. awaiting engagement, is free to offer his
(Paguio v. NLRC, G.R. No. 147816, May 9, 2003) services to any other employer

71

e. The termination of his employment in the projects. These facts are the basis in considering them
particular project/undertaking is reported as regular Ees of the company. (Maraguinot v. NLRC,
to the Department of Labor and G.R. No. 120969, Jan. 22, 1998)
Employment Regional Office having
jurisdiction over the workplace within 30 Members of a work pool from which a construction
days following the date of his separation company draws its project Ees, if considered Ees of the
construction company while in the work pool, are non‐
from work, using the prescribed form on
project Ees or Ees for an indefinite period. If they are
employees’
employed in a particular project, the completion of the
termination/dismissal/suspensions
project or any phase thereof will not mean severance
of Er‐Ee relationship. Unless the workers in the work
f. An undertaking in the employment pool are free to leave any time and offer their services
contract by the employer to pay to other Ers. (L.T. Datu & Co., Inc. v. NLRC, G.R. No.
completion bonus to the project 113162, Feb. 9, 1996)
employee as practiced by most
construction companies Q: What is the “day certain” rule?

Q: What are the requisites in determining whether A: It states that a project employment that ends on
an employee (Ee) is a project Ee? a certain date does not end on an exact date but
upon the completion of the project.
A:
1. The project Ee was assigned to carry out a Q: Are project Ees entitled to separation pay?
specific project or undertaking, and
2. The duration and scope of which were A: GR: Project Ees are not entitled to separation
specified at the time the Ee was engaged pay if they are terminated as a result of the
for that project. (Imbuido v. NLRC, G.R. completion project.
No. 114734, Mar. 31, 2000)
3. The Ee must have been dismissed every XPN: If the projects they are working on have
after completion of his project or phase not yet been completed when their services are
4. Report to the DOLE of Ee’s dismissal on terminated; project Ees also enjoy security of
account of completion of contract (Policy tenure during the limited time of their
Inst. No. 20; D.O. 19 [1997]) employment. (De Ocampo v. NLRC, G.R. No.
81077, June 6, 1990)
Q: What is a project?
Q: Roger Puente was hired by Filsystems, Inc.,
A: A "project" has reference to a particular job or initially as an installer and eventually promoted to
undertaking that may or may not be within the mobile crane operator, and was stationed at the
regular or usual business of the Er. In either case, company’s premises. Puente claimed in his
the project must be distinct, separate and complaint for illegal dismissal, that his work was
identifiable from the main business of the Er, and continuous and without interruption for 10 years,
its duration must be determined or determinable and that he was dismissed from his employment
(PAL v. NLRC, G.R. No. 125792, Nov. 9, 1998). without any cause. Filsystems on its part averred
that Puente was a project Ee in the company’s
Q: Can a project employee (Ee) or a member of a various projects, and that after the completion of
work pool acquire the status of a regular Ee? each project, his employment was terminated, and
such was reported to the DOLE. Is Roger Puente a
A: Yes, when the following concur: regular Ee?

1. There is a continuous rehiring of project A: No, Puente is a project Ee. The contracts of
Ee’s even after cessation of a project; and employment of Puente attest to the fact that he
2. The tasks performed by the alleged was hired for specific projects. His employment was
“project Ee” are vital, necessary and coterminous with the completion of the projects for
indispensable to the usual business or which he had been hired. Those contracts expressly
trade of the employer (Er). provided that his tenure of employment depended
on the duration of any phase of the project or on
Note: The length of time during which the Ee was the completion of the construction projects.
continuously re‐hired is not controlling, but merely Furthermore, the company regularly submitted to
serves as a badge of regular employment. Enero and the labor dep’t reports of the termination of
Maraguinot have been employed for a period of not services of project workers. Such compliance with
less than 2 years and have been involved in at least 18
72
LABOR LAW TEAM:

the reportorial req’t confirms that Puente was a duration of the season does not detract from
project Ee. considering them in regular employment. Seasonal
workers who are called to work from time to time
The mere rehiring of Puente on a project‐to‐project and are temporarily laid off during off‐season are
basis did not confer upon him regular employment not separated from service in that period, but
status. “The practice was dictated by the practical merely considered on leave until re‐employed.
consideration that experienced construction
workers are more preferred.” It did not change his If the Ee has been performing the job for at least a
status as a project Ee. (Filipinas Pre‐Fabricated year, even if the performance is not continuous and
Building Systems (FILSYSTEMS), Inc. v. Puente, G.R. merely intermittent, the law deems repeated and
No. 153832, Mar. 18, 2005) continuing need for its performance as sufficient
evidence of the necessity if not indispensability of
(3)Seasonal employment that activity to the business. Hence, the
employment is considered regular, but only with
Q: What is seasonal employment? respect to such activity and while such activity
exists. (Benares v. Pancho, G.R. No. 151827, April
A: Employment where the job, work or service to 29, 2005)
be performed is seasonal in nature and the
employment is for the duration of the season. Q: Carlito Codilan and Maximo Docena had been
(Sec.5 [a], Rule I, Book VI, IRR) working for the rice mill for 25 years, while
Eugenio Go, Teofilo Trangria and Reynaldo Tulin
An employment arrangement where an employee have been working for 22, 15, and 6 years
(Ee) is engaged to work during a particular season respectively. The operations of the rice mill
on an activity that is usually necessary or desirable continue to operate and do business throughout
in the usual business or trade of the employer (Er). the year even if there are only two or three
harvest seasons within the year. This seasonal
Note: For seasonal Ees, their employment legally ends harvesting is the reason why the company
upon completion of the project or the season. The considers the workers as seasonal Ees. Is the
termination of their employment cannot and should
company correct in considering the Ees as seasonal
not constitute an illegal dismissal. (Mercado v. NLRC,
Ees?
G.R. No. 79869, Sept. 5, 1991)

One year duration on the job is pertinent in deciding A: No, the fact is that big rice mills such as the one
whether a casual Ee has become regular or not, but it owned by the company continue to operate and do
is not pertinent to a seasonal or project Ee. Passage of business throughout the year even if there are only
time does not make a seasonal worker regular or two or three harvest seasons within the year. It is a
permanent. (Mercado v. NLRC, G.R. No. 78969, Sep. 5, common practice among farmers and rice dealers
1991) to store their palay and to have the same milled as
the need arises. Thus, the milling operations are
During off‐season, the relationship of Er‐Ee is not not seasonal. Finally, considering the number of
severed; the seasonal Ee is merely considered on LOA years that they have worked, the lowest being 6
without pay. Seasonal workers who are repeatedly years, the workers have long attained the status of
engaged from season to season performing the same regular Ees as defined under Art. 280. (Tacloban
tasks are deemed to have acquired regular Sagkahan Rice Mill v. NLRC, G.R. No. 73806, Mar. 21,
employment. (Hacienda Fatima v. National Federation 1990)
of Sugarcane Workers‐Food and General Trade, G.R.
No. 149440, Jan. 28, 2003)
(4)Casual employment

Q: Are seasonal Ees entitled to separation pay? Q: What is casual employment?

A: When the business establishment is sold which A:
effectively terminates the employment of the 1. It is an employment where the Ee is engaged in
seasonal Ees, the latter would be entitled to an activity which is not usually necessary or
separation pay. desirable in the usual business or trade of the Er,
provided: such employment is not project nor
Q: Can seasonal employees (Ees) be considered as seasonal (Art. 281).
regular Ees?
Note: But despite the distinction between regular
A: Yes. The fact that seasonal Ees do not work and casual employment, every Ee shall be
continuously for one whole year but only for the entitled to the same rights and privileges, and
73

shall be subject to the same duties as may be A:
granted by law to regular Ees during the period of CASUAL or
their actual employment. PROJECT WORKER CONTRACTUAL
WORKER
2.An Ee is engaged to perform a job, work or service Used to designate
which is merely incidental to the business of the Er, workers in the
and such job, work or service is for a definite period construction industry,
Generic term used to
made known to the Ee at the time of engagement hired to perform a
designate any worker
(Sec. 5 [b], Rule I, Book VI, IRR) specific undertaking for
covered by a wrtitten
a fixed period, co‐
contract to perform a
Note: If he has rendered at least 1 year of service, terminus with a project
specific undertaking for
whether such service is continuous or broken, he or phase thereof
a fixed period
is considered as regular Ee with respect to the determined at the time
activity in which he is employed and his of the engagement of
employment shall continue while such activity the Ee
exists. To be considered a true
project worker, it is
A Casual Ee is only casual for 1 year, and it is the required that a
passage of time that gives him a regular status. termination report be
(KASAMMA‐CCO v. CA, G.R. No. 159828, April 19, submitted to the
There is no such
2006) nearest public
requirement for an
employment office
ordinary contractual
The purpose is to give meaning to the upon the completion of
worker
constitutional guarantee of security of tenure and the construciton
right to self‐organization. (Mercado v. NLRC, G.R. project. (Aurora Land
No. 79868, Sep. 5, 1991) Projects Corp. v. NLRC,
G.R. No. 114733, Jan.
Q: Yakult Phils. is engaged in the manufacture of 2, 1997)
cultured milk. The workers were hired to cut
cogon grass and weeds at the back of the factory
building used by Yakult. They were not required (5)Fixed term employment; Requisites for validity
to work on fixed schedule and they worked on any
day of the week on their own discretion and Q: What is the nature of term employment?
convenience. The services of the workers were
A: A contract of employment for a definite period
terminated by Yakult on less than 1‐year after.
terminates by its own terms at the end of such
May casual or temporary Ees be dismissed by the
period. (Brent School v. Zamora, G.R. No. L‐48494,
Er before the expiration of the 1‐year period of
Feb. 5, 1990)
employment?

A: Yes, the usual business or trade of Yakult Phils. is Q: What is the decisive determinant in term
the manufacture of cultured milk. The cutting of employment?
the cogon grasses in the premises of its factory is
hardly necessary or desirable in the usual business A: It is the day certain agreed upon by the parties
of the Yakult. for the commencement and the termination of
their employment relation.
The workers are casual Ees. Nevertheless, they may
be considered regular Ees if they have rendered Q: What is a fixed‐term employment?
services for at least 1 year. When, as in this case,
they were dismissed from their employment before A: It is an employment where a fixed period of
the expiration of the 1‐year period they cannot employment was agreed upon:
lawfully claim that their dismissal was illegal.
(Capule, et al. v. NLRC, G.R. No. 90653, Nov. 12, 1. Knowingly and voluntarily by the parties,
1990) 2. Without any force, duress or improper
pressure being brought to bear upon the
Q: How is the project worker different from a employee (Ee) and
casual or contractual worker? Briefly explain your 3. Absent any other circumstances vitiating
answers. his consent, or
4. Where it satisfactorily appears that the Er
and Ee dealt with each other on more or
less equal terms with no moral
74
LABOR LAW TEAM:

dominance whatever being exercised by Q: Does the “Reasonable Connection Rule” applies

the former over the latter. (Brent School, in fixed‐ term employment for a fixed‐ term
Inc. v. Zamora, G.R. No. 48494, Feb. 5, employee be eventually classified as regular
1990) employee?

Note: A fixed‐period Ee does not become a regular Ee A: No. It should be apparent that this settled and
because his employment is co‐terminus with a specific familiar notion of a period, in the context of a
period of time. contract of employment, takes no account at all of
the nature of the duties of the employee; it has
Ee hired on a fixed‐term is regular if job is necessary absolutely no relevance to the character of his
and desirable to the business of Er. (Philips duties as being usually necessary and desirable to
Semiconductor v. Fadriquela, G.R. No. 141717, April the usual business of the employer, or not.
2004)

Q: Dean Jose and other employees are holding
Q: Is “term employment” a circumvention of the
administrative positions as dean, dep’t heads and
law on security of tenure?
institute secretaries. In the implementation of the

Reorganization, Retrenchment and Restructuring
A: No, it is not a circumvention of the law if it
program effective Jan. 1, 1984, Dean Jose and
follows the requisites laid down by the Brent ruling.
other employees were retired but subsequently
(Romares v. NLRC, G.R. No. 122327, Aug. 19, 1998)
rehired. Their appointment to their administrative

positions as dean, dep’t heads and institute
Q: Rene was hired as an athletic director in
secretaries had been extended by the company
ChristOmarDiviva School for a period of five years.
from time to time until the expiration of their last
As such, he oversees the work of coaches and
appointment on May 31, 1988. Were Dean Jose
related staff involved in intercollegiate or
and other employees illegally dismissed?
interscholastic athletic programs. However, he

was not rehired upon the expiration of said period.
A: No. Petitioners were dismissed by reason of the
Rene questions his termination alleging that he
expiration of their contracts of employment.
was a regular employee and could not be
Petitioners' appointments as dean, dep’t heads and
dismissed without valid cause. Is he a regular
institute secretaries were for fixed terms of definite
employee?
periods as shown by their respective contracts of

employment, which all expired on the same date,
A: No. Rene was not a regular employee but an
May 31, 1988. The validity of employment for a
employee under a fixed‐ term contract. While it can
fixed period has been acknowledged and affirmed
be said that the services he rendered were usually
by the SC. (Blancaflor v. NLRC, G.R. No. 101013, Feb.
necessary and desirable to the business of the
2, 1993)
school, it cannot also be denied that his

employment was for a fixed term of five years. The
e.Job contracting and labor‐ only contracting
decisive determinant in fixed‐ term employment
should not be the activities that the employee is Q: When is there “job contracting”?
called upon to perform, but the day certain agreed
upon by the parties for the commencement and A: Specifically, there is “job contracting” where:
termination of their employment relation (Brent
School Inc. v. Zamora, G.R. No. 48494, Feb. 5, 1990). 1. The contractor carries on an
independent business and
Q: In the above‐ mentioned facts, will Rene undertakes the contract work on his
automatically become a regular employee if he is own account under his own
rehired by the school for another definite period responsibility according to his own
of employment? manner and method, free from the
control and direction of his employer
A: No. The decisive determinant in term or principal in all matters connected
employment is the day certain agreed upon by the with the performance of the work
parties for the commencement and termination of except as to the results thereof; and
their employment relationship, a day certain being
understood to be that which must necessarily come, 2. The contractor has substantial
although it may not be known when and not capital or investment in the form of
whether the work is usually necessary and desirable tools, equipment, machineries, work
to the business of the employer. premises, and other materials which

75

are necessary in the conduct of his Phils., Inc., G.R. No. 179807, July 31, 2009,

business. J. Carpio‐Morales)

Q: When is there “labor‐only” contracting? Q: What are the factors to consider in determining
whether contractor is carrying on an independent
A: A person is deemed to be engaged in “labor‐ business?
only” contracting where:
A:
1. The person supplying workers to an 1. Nature and extent of work
employer does not have substantial 2. Skill required
capital or investment in the for of 3. Term and duration of the relationship
tools, equipment, machineries, work 4. Right to assign the performance of
premises, among others; and specified pieces of work
5. Control and supervision of worker
2. The workers recruited and placed by 6. Power of employer to hire, fire and pay
such person are performing activities wages
which are directly related to the 7. Control of the premises
principal business of such employer. 8. Duty to supply premises, tools,
(Baguio v. NLRC, G.R. No. 79004‐08, appliances, materials and labor
Oct. 4, 1991) 9. Mode, manner and terms of payment.
(Vinoya v. NLRC, G.R. No. 126286, Feb 2,
Q: What is a permissible job contracting or 2000)
subcontracting?
Note: Individuals with special skills, expertise or talent
A: It refers to an arrangement whereby a principal enjoy the freedom to offer their services as
agrees to farm out with a contractor or independent contractors. An individual like an artist or
subcontractor the performance of a specific job, talent has a right to render his services without any
work, or service within a definite or predetermined one controlling the means and methods by which he
period, regardless of whether such job, work or, performs his art or craft. (Sonza vs. ABS‐CBN, G.R. No.
service is to be performed or completed within or 138051, June 10, 2004)
outside the premises of the principal.
Q: Who are the parties in contracting and
Q: What are the conditions that must be met in subcontracting?
order to be considered as permissible job
contracting or subcontracting? A:
1. Contractor/subcontractor – Refers to any
A: The following conditions must be met: person engaged in a legitimate contracting or
subcontracting arrangement.
1. The contractor carries on a distinct and
independent business and undertakes the 2. Contractual Ee – One who is employed by a
contract work on his account under his contractor or subcontractor to perform or
own responsibility according to his own complete a job, work, or service pursuant to an
manner and method, free from the arrangement between the latter and a
control and direction of his employer or principal. (D.O. 18‐02)
principal in all matters connected with the
performance of his work except as to the 3. Principal – Any Er who puts out or farms out a
results thereof; job, service, or work to a contractor or
subcontractor.
2. The contractor has substantial capital or
investment; and Q: Describe the relationship arising from
contractual arrangements.
3. The agreement between the principal and
contractor or subcontractor assures the A: There is a trilateral relationship between the
contractual employees entitlement to all principal, contractor and Ee. There exists a
labor and occupational safety and health contractual relationship between the principal and
standards, free exercise of the right to the contractor or subcontractor to its Ees.
self‐organization, security of tenure, and
Q: What are the rights of a contractual Ee (CEe)?
social welfare benefits. (Gallego v. BAYER

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LABOR LAW TEAM:

A: They shall be entitled to all the rights and A: The principal shall be solidarily liable with the
privileges due to a regular Ee as provided in the LC, contractor in the event of any violation of any
as amended to include the ff: provision of the LC, including the failure to pay
wages. This will not prevent the principal from
1. Safe and healthful working conditions claiming reimbursement from the contractor.
2. Service Incentive Leave, rest days, OT pay,
holiday pay, 13th month pay and Q: What does substantial capital or investment
separation pay mean?
3. Social security and welfare benefits;
4. Self‐organization, CBA and peaceful A: It refers to the capital stocks and subscribed
concerted actions capitalization in case of corporations, tools,
5. Security of tenure (Sec. 8, DO 18‐02) equipments, implement, machineries and work
premises, actually and directly used by the
Q: What are the effects of termination of CEe to contractor or subcontractor in the performance or
separation pay and other benefits? completion of the job, work or service contracted
out. (D.O. 18‐02)
A:
1. If prior to the expiration of the Note: The law does not require both substantial capital
employment contract between the and investment in the form of tools, equipments,
principal and the contractor or machineries, etc. This is clear from the use of
conjunction “or”. If the contention was to require the
subcontractor – The right of CEe to
contractor to prove that he has both capital and
separation pay or other related benefits
requisite investment, then the conjunction “and”
shall be governed by the applicable laws
should have been used. (Virginia Neri v. NLRC, G.R.
and jurisprudence on termination of No. 97008, July 21, 1993)
employment
Q: What does the right to control mean?
2. If the termination results from the
expiration of the contract between the A: It refers to the right reserved to the person for
principal and the contractor or whom the services of the contractual workers are
subcontractor – The Ee shall not be performed, to determine not only the end to be
entitled to separation pay. However, this achieved, but also the manner and means to be
is w/o prejudice to completion bonuses or used in reaching that end. (D.O. 18‐02)
other emoluments including retirement
pay as may be provided by law or in the Q: SMC and Sunflower Cooperative entered into a
contract between the principal and the 1‐yr Contract of Services, to be renewed on a
contractor. month to month basis until terminated by either
party. Pursuant to the contract, Sunflower
Q: When is the principal deemed the employer of engaged private respondents to render services at
the contractual employee? SMC’s Bacolod Shrimp Processing Plant. The
contract was deemed renewed by the parties
A: Where: every month after its expiration on Jan. 1, ‘94 and
respondents continued to perform their tasks until
1. There is labor‐only contracting Sep. 11, ‘95. In July ‘95, private respondents filed a
2. The contracting arrangement falls within complaint before the NLRC, praying to be declared
the prohibited acts as regular Ees of SMC, with claims for recovery of
all benefits and privileges enjoyed by SMC rank
Q: May the Er or indirect Er require the contractor and file Ees. Respondents subsequently filed an
or subcontractor to furnish a bond equal to the Amended Complaint to include illegal dismissal as
cost of labor under contract to answer for the additional cause of action following SMC’s closure
wages due to Ees in case the contractor or of its Bacolod Shrimp Processing Plant on which
subcontractor fails to pay the same? resulted in the termination of their services. SMC
filed a Motion for Leave to File Attached Third
rd
A: Yes. The Er or indirect Er may require the Party Complaint to implead Sunflower as 3 ‐Party
contractor or subcontractor to furnish a bond that Defendant. Are private respondents Ees of the
will answer for the wages due to the Ees. independent cooperative contractor (Sunflower)
or of the SMC?
Q: What is the liability of the principal?

77

A: The contention of SMC holds no basis. Using the
“substantial capital” doctrine and the “right of A: It gives rise to confusion as to who is the real Er
control test”, the Court found that the Sunflower of the workers and who is liable to their claims. It
had no substantial capital in the form of tools, also deprives workers of the opportunity to become
equipment, machineries, work premises and other regular Ees.
materials to qualify itself as an independent
contractor. The lot, building, machineries and all Q: How do we determine if one is engaged in
other working tools utilized by private respondents labor/job only contracting?
in carrying out their tasks were owned and
provided by SMC. In addition, the shrimp A: The test to determine whether one is a job/labor
processing company was found to have control of only contracting is to look into the elements of a job
the manner and method on how the work was contractor. If all the elements of a job contractor
done. Thus, the complainants were deemed Ees not are present, then he is a job contractor. Absent one
of the cooperative but of the shrimp processing of the elements for a job contractor, then the
company. Since respondents who were engaged in person is a labor‐only contractor.
shrimp processing performed tasks usually
necessary or desirable in the aquaculture business Note: It is the opinion of Dean Antonio H. Abad, Jr.
of SMC, they should be deemed regular Ees of the that the decisive determinant in job contracting should
not be the fact that the contracted workers are
latter and as such are entitled to all the benefits
“performing activities which are directly related to the
and rights appurtenant to regular employment.
main business of the principal,” but that the principal
(SMC vs. Prospero Aballa, et al., G.R. No. 149011, has no right to control the conduct of the employees
June 28, 2005, J. Carpio‐Morales) as to the means employed to achieve an end; not the
character of the activities as being “usually necessary
Q: What are the conditions before permitting job or desirable in the usual business of the employer.”
contracting?
It cannot be gainsaid that the activities of the
A: contracted workers are always necessary or desirable;
1. The labor contractor must be duly even that they are directly related to the main
licensed by the appropriate Regional business of the principal. The primordial consideration
Office of the DOLE should be the “control test.” Hence, if the
2. There should be a written contract arrangement passes the control test, it is “job‐
between the labor contractor and his contracting.” If it fails, it is “labor‐only contracting.”
client‐Er that will assure the Ees at least
the minimum labor standards and Q: Distinguish between job contracting and labor
benefits provided by existing laws. only contracting

Note: The Ees of the contractor or subcontractor shall A:
be paid in accordance with the provisions of the LC. LABOR‐ONLY
JOB CONTRACTING
(Art. 106) CONTRACTING
Liability is limited (shall be
Q: What is labor‐only contracting? solidarily liable with Er
Liability extends to all
only when the Er fails to
those provided under
A: It refers to an arrangement where the following comply with req’ts as to
the Labor Standards law
conditions concur: unpaid wages and other
labor standards violations)
1. The person supplying workers to an Er Permissible, subject only
Prohibited by Law
does not have substantial capital or to certain conditions
investment in the form of tools, The contractor has
Has no substantial
equipment, machineries, work, premises, substantial capital or
capital or investment
investment
among others, or
2. Even if such person has substantial assets,
the same are not actually or directly used Q: SMPC entered into a contract with Arnold for
by the Ees contracted out; the milling of lumber as well as the hauling of
3. The workers recruited and placed by such waste wood products. The company provided the
person are performing activities which are equipment and tools because Arnold had neither
directly related to the principal business tools and equipment nor capital for the job.
of such Er. Arnold, on the other hand, hired his friends,
relatives and neighbors for the job. Their wages
Q: Why is labor only contracting prohibited? were paid by SMPC to Arnold, based on their
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LABOR LAW TEAM:

production or the number of workers and the time A: Substantive Due Process provides the ground for
used in certain areas of work. All work activities disciplinary action, i.e. corrective or retributive
and schedules were fixed by the company.
(a)Just causes
1. Is Arnold a job contractor? Explain briefly
Q: What are the just causes for termination (Art.
2. Who is liable for the claims of the workers hired 282, LC)?
by Arnold? Explain briefly.
A:
A: 1. Serious misconduct or willful
1. No. In the problem given, Arnold did not disobedience by the employee (Ee) of the
have sufficient capital or investment for lawful orders of his employer (Er) or
one. For another, Arnold was not free representative in connection with his
from the control and direction of SMPC work
because all work activities and schedules 2. Gross and habitual neglect by the Ee of
were fixed by the company. Therefore, his duties
Arnold is not a job contractor. He is 3. Fraud or willful breach by the Ee of the
engaged in labor‐only contracting. trust reposed in him by his Er or duly
2. SMPC is liable for the claims of the organized representative
workers hired by Arnold. A finding that 4. Commission of a crime or offense by the
Arnold is a labor only contractor is Ee against the person of his Er or any
equivalent to declaring that there exist an immediate member of his family or his
Er‐Ee relationship between SMPC and duly authorized representative.
workers hired by Arnold. This is so 5. Other causes analogous to the foregoing
because Arnold is considered a mere
agent of SMPC (Lim v. NLRC, G.R. No. Note: The burden of proving that the termination was
124630, Feb. 19, 1999); 2002 Bar for a valid or authorized cause shall rest on the Er. (Art.
Question) 277[b])

Q: What are the grounds for delisting of 1.Serious Misconduct
contractors or subcontractors?
Q: What is serious misconduct?
A:
1. Non‐submission of contracts between the A: It is an improper or wrong conduct; the
principal and the contractor or transgression of some established and definite rule
subcontractor when required to do so; of action, a forbidden act, a dereliction of duty,
2. Non‐submission of annual report; willful in character, and implies wrongful intent and
3. Findings through arbitration that the not mere error in judgment. To be serious within
contractor or subcontractor has engaged the meaning and intendment of the law, the
in labor‐only contracting and other misconduct must be of such grave and aggravated
prohibited activities; character and not merely trivial or unimportant.
4. Non‐compliance with labor standards and (Villamor Golf Club v. Pehid, G.R. No. 166152, Oct.
working conditions. (Sec. 16, D.O. 18‐02) 4, 2005)

Q: What are the effects of finding that there is Q: What are the elements of serious misconduct?
labor‐only contracting?
A:
A: A finding that a contractor is a “labor‐only” 1. It must be serious or of such a grave and
contractor is equivalent to declaring that there is an aggravated character;
employer‐employee relationship between the 2. Must relate to the performance of the
principal and the employees of the “labor‐only” employees (Ee) duties;
contractor. (Assoc. Anglo‐American Tobacco Corp. 3. Ee has become unfit to continue working
v. Clave, G.R. No. 50915, Aug. 30, 1990) for the employer. (Philippine Aeolus
Automotive United Corp. v. NLRC, G.R.
2.TERMINATION OF EMPLOYMENT No. 124617, April 28, 2000)

a.Substantive due process Q: Give some examples of serious misconduct.
Q: What is Substantive due process? A:
79

1. Sexual harassment 2. The disobeyed orders, regulations or

2. Fighting within the company premises instructions of the Er must be:
3. Uttering obscene, insulting or offensive a. Reasonable and lawful
words against a superior b. Sufficiently made known to the Ee
4. Falsification of time records c. Must pertain to or be in connection
5. Gross immorality with the duties which the Ee has
been engaged to discharge. (Cosep V.
Q: Escando, upset at his transfer to the washer NLRC, G.R. No. 124966 June 16,
section, repeatedly uttered “gago ka” and 1998)
threatened bodily harm to his superior Mr.
Andres. Is the utterance of the obscene words and Note: There is no law that compels an Ee to accept a
threats of bodily harm gross and willful promotion for the reason that a promotion is in the
misconduct? nature of a gift or reward, which a person has the right
to refuse. The exercise of the Ee of the right to refuse a
A: Yes. The repeated utterances by Escando of promotion cannot be considered in law as
obscene, insulting or offensive words against a insubordination or willful disobedience. (PT&T Corp. v.
superior were not only destructive of the morals of CA, G.R. No. 152057, Sep. 29, 2003)
his co‐employees (Ees) and a violation of the
company rules and regulations, but also constitute Q: The company vehicle was brought out of the
gross misconduct which is one of the grounds company premises without authorization twice. In
provided by law to terminate the services of an Ee. the first instance the company opted not to
(Autobus Workers Union v. NLRC, G.R. No. 11753, implement any action against Dioks and instead
June 26, 1998) issued a memorandum reiminding Dioks as well as
the security guards of the proper procedure.
Q: Samson made insulting and obscene utterances However, in the second instance the vehicle met
towards the General Manager saying “Si EDT an accident. Is Dioks guilty of willful disobedience
bullshit yan, sabihin mo kay EDT yan” among even though he was not the one who personally
others during the Christmas party. Are the brought the company vehicle out of the company
utterances towards the General Manager gross premises and was merely a passenger in the
misconduct? second incident?
A: The alleged misconduct of Samson when viewed A: Yes. A rule prohibiting Ees from using company

in its context is not of such serious and grave vehicles for private purpose without authority from
character as to warrant his dismissal. Samson made management is a reasonable one. When Dioks rode
the utterances and obscene gestures at an informal the company vehicle he was undoubtedly aware of
Christmas gathering and it is to be expected during the possible consequences of his act and taking into
this kind of gatherings, where tongues are more consideration his moral ascendancy over the
often than not loosened by liquor of other alcoholic security guards it was incumbent upon him not only
beverages, that employees (Ees) freely express their to admonish them but also to refrain from using the
grievances and gripes against their employers (Ers). company car himself. (Family Planning Org. of the
Ees should be allowed wider latitude to freely Phil. v. NLRC, G.R. No. 75907, Mar. 23, 1992)
express heir grievances and gripes against their Er.
Ees should be allowed wider latitude to freely Q: Escobin’s group were security guards based in
express their sentiments during these kinds of Basilan. They were placed in floating status and
occasions which are beyond the disciplinary were asked to report for reassignment in Metro
authority of the Er. (Samson v. NLRC, G.R. No. Manila by PISI. Upon failure to report or respond
121035, April 12, 2000) to such directives they were ordered dismissed
from employment by PISI for willful disobedience.
2.Willful Disobedience Did the failure to report to Manila amount to
willful disobedience?
Q: When is willful disobedience of the Er’s lawful
orders a just cause for termination? A: The reasonableness of the rule pertains to the
kind of character of directives and commands and
A: 2 requisites must concur: to the manner in which they are made. In this case,
the order to report to the Manila office fails to
1. The employees (Ees) assailed conduct meet this standard. The order to report to Manila
must have been willful or intentional, the was inconvenient, unreasonable, and prejudicial to
willfulness being characterized by a Escobin’s group since they are heads of families
wrongful and perverse attitude. residing in Basilan and they were not given
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LABOR LAW TEAM:

transportation money or assurance of availability of A: Yes, failure to observe prescribed standards of

work in Manila. (Escobin v. NLRC, G.R. No. 118159. work, or to fulfill reasonable work assignments due
April 15, 1998) to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean
3.Negligence failure to attain work goals or work quotas, either
by failing to complete the same within the allotted
Q: When is negligence a just cause for reasonable period, or by producing unsatisfactory
termination? results. (Buiser v. Leogardo, G.R. No. L‐63316, July
31, 1984)
A: When it is gross and habitual.
This ground is considered analogous to those
Q: When is there Gross Negligence? enumerated under Art. 282. (Skippers United Pacific
v. Magud, G.R. No. 166363, Aug. 15, 2006)
A: Gross negligence implies a want or absence of or
failure to exercise slight care of diligence of the Q: Gamido was a quality control inspector of VH
entire absence of care it evinces thoughtless Manufacturing. Gamido was allegedly caught by
disregard of consequences without exerting any the company Pres. Dy Juanco of sleeping and was
effort to avoid them. However, such neglect must dismissed from employment. Did Gamido’s act of
not only be gross but habitual in character. (Judy sleeping on the job constitute a valid cause of
Phils. v. NLRC, G.R. No. 111934, April 29, 1998) dismissal?
Q: When is there Habitual Neglect of duties? A: Sleeping on the job as a valid ground for
dismissal only applies to security guards whose duty
A: Habitual Neglect implies repeated failure to necessitates that they be awake and watchful at all
perform one’s duties over a period of time, times. Gambido’s single act of sleeping further
depending upon the circumstance. (JGB and shows that the alleged negligence or neglect of
Associates v. NLRC, GR No. 10939, Mar. 7, 1996) duty was neither gross nor habitual. (VH
Manufacturing v. NLRC, G.R. No. 130957, Jan. 19,
Q: Antiola, as assorter of baby infant dress as for
2000)
Judy Phils. erroneously assorted and packaged
2,680 dozens of infant wear. Antiola was Q: Give some forms of neglect of duty.
dismissed from employment for this infraction.
Does the single act of misassortment constitute A:
gross negligence? 1. Habitual tardiness and absenteeism
2. Abandonment:
A: No. Such neglect must not only be gross but also a. Failure to report for work or absence
habitual in character. Hence, the penalty of without justifiable reason
dismissal is quite severe considering that Antiola b. Clear intention to sever Er‐Ee
committed the infraction for the first time. (Judy relationship manifested by some
Phils. v. NLRC, G.R. No. 111934. April 29, 1998) overt acts. (Labor et. al v. NLRC, GR
No. 110388, Sep.14, 1995)
Q: Does the failure in performance evaluations

amount to gross and habitual neglect of duties?
4.Abandonment
A: As a general concept “poor performance” is
Q: What is abandonment as a just cause for
equivalent to inefficiency and incompetence in the
termination?
performance of official duties. The fact that an
employee’s (Ee’s) performance is found to be poor A: It means the deliberate, unjustified refusal of an
or unsatisfactory does not necessarily mean that employee to resume his employment.
the Ee is grossly and habitually negligent of his
duties. Gross negligence implies a want or absence Q: What are the requirements for a valid finding of
of or failure to exercise slight care of diligence or abandonment?
the entire absence or care. He evinces a thoughtless
disregard of consequences without exerting any A: For a valid finding of abandonment, 2 factors
effort to avoid them. (Eastern Overseas must be present:
Employment Center Inc. v. Bea, G.R. 143023, 1. The failure to report for work, or absence
Nov.29, 2005) without valid or justifiable reason; and
2. A clear intention to sever Er‐Ee
Q: Is inefficiency a just cause for dismissal? relationship, with the 2nd element as the
81

more determinative factor, being money or property – to this class
manifested by some overt acts. (Sta. belong cashiers, auditors, property
Catalina College s. NLRC, G.R. No. custodians, etc., or those who, in the
144483, Nov. 19, 2003) normal and routine exercise of their
functions, regularly handle
Q: How to prove abandonment? significant amounts of money or
property. (Mabeza v. NLRC, G.R. No.
A: To prove abandonment, the Er must show that 118506 April 18, 1997)
the Ee deliberately and unjustifiably refused to
resume his employment without any intention of 2. The loss of trust and confidence must be
returning. There must be a concurrence of the based on willful breach.
intention to abandon and some overt acts from
which an Ee may be deduced as having no more Note: A breach is willful if it is done
intention to work. The law, however, does not intentionally, knowingly, and purposely
enumerate what specific overt acts can be without justifiable excuse, as distinguished
considered as strong evidence of the intention to from an act done carelessly, thoughtlessly,
sever the Ee‐Er relationship. (Sta. Catalina College heedlessly, or inadvertently (De la Cruz v.
v. NLRC, G.R. No. 144483. Nov. 19, 2003) NLRC, G.R. No. 119536, Feb. 17, 1997)

Q: Mejila a barber at Windfield Barber Shop, had 3. The act constituting the breach must be
an altercation with a fellow barber which resulted “work‐related” such as would show the
in his subsequent turning over the duplicate keys Ee concerned to be unfit to continue
of the shop to the cashier and took away all his working for the Er. (Gonzales V. NLRC,
belongings there from and worked at different G.R. No. 131653, Mar. 26, 2001)
barbershop. Mejila then filed an illegal dismissal
case but did not seek reinstatement as a relief. Did 4. It must be substantial and founded on
Mejila commit abandonment? clearly established facts sufficient to
warrant the Ee’s separation from
A: Mejila’s acts such as surrendering the shop’s employment. (Sulpicio Lines Inc. V. Gulde,
keys, not reporting to the shop anymore without G.R. No. 149930, Feb. 22, 2002)
any justifiable reason, his employment in another
barber shop, and the filing of a complaint for illegal 5. Fraud must be committed against the Er
dismissal without praying for reinstatement clearly or his representatives, e.g.:
show that there was a concurrence of the intention a. Falsification of time cards
to abandon and some overt acts from which it may b. Theft of company property
be inferred that the Ee concerned has no more c. Unauthorized use of company
interest in working. (Jo v. NLRC, G.R. No. 121605, vehicle
Feb. 2, 2000)
Note: The treatment of rank and file personnel and
5.Fraud; Breach of Trust / Loss of Confidence managerial Ees in so far as the application of the
doctrine of loss of trust and confidence is concerned is
Q: When is breach of trust/loss of confidence a different. As regards managerial Ees, such as Caoile,
mere existence of a basis for believing that such Ee has
just cause for termination?
breached the trust of his Er would suffice for his
dismissal. (Caoile v. NLRC, G.R. No. 115491, Nov. 24,
A:
1998)
1. It applies only to cases involving:

a. Employees (Ees) occupying positions
Q: What are the guidelines for the doctrine of loss
of trust and confidence (confidential
of confidence to apply?
and managerial Ee’s) – to this class
belong managerial Ees, i.e., those A:
vested with the powers or 1. Loss of confidence should not be
prerogatives to lay down simulated (reasonable basis for loss of
management policies and/or to hire, trust and confidence)
transfer, suspend, lay‐off, recall, 2. Not used for subterfuge for causes which
discharge, assign or discipline Ees or are improper and/or illegal and
effectively recommend such unjustified
managerial actions 3. Not arbitrarily asserted in the face of
b. Ees routinely charged with the care overwhelming evidence to the contrary
and custody of the employer’s (Er’s)
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LABOR LAW TEAM:

4. Must be genuine, not a mere An investigation was promptly launched by the
afterthought to justify earlier action taken company’s officers. Abel attended the meetings
in bad faith and but claimed that he was neither asked if he
5. The Ee involved holds a position of trust needed the assistance of counsel nor allowed to
and confidence properly present his side. By memo, the company
found Abel guilty of (1) fraud resulting in loss of
Note: The breach of trust must rest on substantial trust and confidence and (2) gross neglect of duty,
grounds and not on the Er’s arbitrariness, whims, and was meted out the penalty of dismissal from
caprices, or suspicion; otherwise, the Ee would employment. Was Abel validly dismissed for any
eternally remain at the mercy of the Er. It should be of the causes provided for in Art. 282 of the LC?
genuine and not simulated, nor should it appear as a
mere afterthought to justify earlier action taken in bad A: No. The 1st requisite for dismissal on the ground
faith of a subterfuge for causes which are improper, of loss of trust and confidence is that the Ee
illegal, or unjustified. It has never been intended to concerned must be holding a position of trust and
afford and occasion for abuse because of its subjective
confidence. Abel was a contract claims assistant at
nature. There must, therefore, be an actual breach of
the time he allegedly committed the acts which led
dully committed by the employee which must be
to its loss of trust and confidence. It is not the job
established by substantial evidence. (Dela Cruz v.
NLRC, G.R. No. 119536, Feb. 17, 1997) title but the actual work that the Ee performs. It
was part of Abel’s responsibilities to monitor the
Q: Mabeza a chambermaid at Hotel Supreme was performance of the company’s contractors in
terminated from employment because of her relation to the scope of work contracted out to
refusal to sign an affidavit attesting to their them.
employer’s (Er’s) compliance with minimum wage
and other labor standards. Mabeza filed a The 2nd requisite is that there must be an act that
complaint for illegal dismissal against Hotel would justify the loss of trust and confidence. Loss
Supreme. As a defense, Hotel Supreme claimed of trust and confidence, to be a valid cause for
that she abandoned her work and belatedly dismissal, must be based on a willful breach of trust
claimed loss of confidence as the ground for the and founded on clearly established facts. The basis
dismissal of Mabeza because she stole some of the for the dismissal must be clearly and convincingly
properties of her Er. Is loss of confidence a valid established but proof beyond reasonable doubt is
ground for dismissal of a hotel chambermaid? not necessary. The company’s evidence against
Abel fails to meet this standard. Its lone witness,
A: No. Loss of confidence as a just cause for Lupega, did not support his affidavit and testimony
dismissal was never intended to provide Ers with a during the company investigation with any piece of
blank check for terminating their Ees. Evidently, an evidence at all. It could hardly be considered
ordinary chambermaid who has to sign out for linen substantial evidence. (Abel v. Philex Mining Corp.,
and other hotel property from the property G.R. No. 178976, July 31, 2009, J. Carpio‐Morales)
custodian each day and who has to account for
each and every towel or bed sheet utilized by the 6.Termination of Employment pursuant to Union
hotel's guests at the end of her shift would not fall Security Clause
under any of these two classes of Ees for which loss
Q: MSMG was a local union affiliated with ULGWP
of confidence, if ably supported by evidence, would
a national federation. MSMG had a dispute with
normally apply. (Mabeza v. NLRC, G.R. No. 118506,
ULGWP over an imposition of a fine prompting
April 18, 1997)
MSMG to declare independence from ULGWP.
Q: Abelardo Abel was first hired by Philex Mining Because of the dispute, ULGWP asked for the
Corp. in Jan. ’88. He was later assigned to the dismissal from employment of the officers of
company’s Legal Dep’t as a Contract Claims Asst., MDMG from the company by virtue of a union
and held the position for 5 yrs prior to his transfer security clause in the CBA. The company dismissed
to the Mine Eng’g and Draw Control Dep’t wherein the officers. Does a union security clause absolve
he was appointed Unit Head. In ‘02, he was the company form observing the requirement of
implicated in an irregularity occurring in the due process?
subsidence area of the company’s mine site at
A: Although union security clauses embodied in the
Benguet. His co‐worker Danilo, executed an
CBA may be validly enforced and dismissals
affidavit known as the “Subsidence Area
pursuant thereto may likewise be valid, this does
Anomaly”. The incidents in Lupega’s affidavit
not erase the fundamental requirement of due
supposedly took place when Abel was still a
process. An employer cannot merely rely upon a
Contract Claims Asst. at the company’s legal dep’t.
labor federation’s allegations in terminating union
83

officers expelled by the federation for allegedly 9.Analogous Cases

committing acts of disloyalty and/or inimical to the
interest of the federation and in violation of its Q: What is required for an act to be included in
constitution and by laws. analogous cases of just causes of termination?

The right of an Ee to be informed of the charges A: Must be due to the voluntary and/or willful act
against him and to be given a reasonable or omission of the employee (Nadura v. Benguet
opportunity to present his side in a controversy Consolidated, G.R. No. L‐17780, Aug. 24, 1962), e.g.:
with either the company or his own union is not
wiped away by a union security clause in a CBA. 1. Violation of company rules and
Even assuming that a federation had valid grounds regulations
to expel union officers, due process requires that 2. Drunkenness
these union officers be accorded a separate hearing 3. Gross inefficiency
by the company. (MSMG v. Ramos, G.R. No. 4. Illegally diverting employer’s products
113907, Feb. 28, 2000) 5. Failure to heed an order not to join an
illegal picket
7.Totality of Infractions doctrine 6. Violation of safety rules and code of
discipline
Q: What is the totality of infractions doctrine?
Q: What is the doctrine of incompatibility?
A: It is the totality, not the compartmentalization of
company infractions that the Ee has committed, A: Where the employee has done something that is
which justifies the penalty of dismissal. (MERALCO contrary or incompatible with the faithful
v. NLRC, G.R. No. 114129, Oct. 24, 1996) performance of his duties, his employer has a just
cause for terminating his employment. (Manila
Note: Where the Ee has been found to have
Chauffeur’s League v. Bachrach Motor Co., G.R. No.
repeatedly incurred several suspensions or warnings
L‐47071, June 17, 1940 )
on account of violations of company rules and
regulations, the law warrants their dismissal as it is
(b).Authorized Causes
akin to “habitual delinquency”. (Villeno v. NLRC, G.R.
No. 108153, Dec. 26, 1995)
Q: What are the authorized causes of termination
Q: What are the guidelines to determine the by the employer (Er)?
validity of termination?
A:
A: Gravity of the offense 1. Installation of labor‐saving devices
1. Position occupied by the employee (automation/robotics)
2. Degree of damage to the employer
3. Previous infractions of the same offense 2. Redundancy (superfluity in the
4. Length of Service performance of a particular work) – exists
where the services of an employee (Ee)
8.Commission of a Crime are in excess of what is reasonably
demanded by the actual req’ts of the
Q: What do you mean by “commission of a crime enterprise. (Wiltshire File Co., Inc. v. NLRC,
or offense” as a just cause for termination of an G.R. No. 82249, Feb. 7, 1991)
Ee?
Note: The redundancy should not have been
created by the Er.
A: It refers to an offense by the Ee against the

person of his employer or any immediate member
3. Reorganization
of his family or his duly authorized representative

and thus, conviction of a crime involving moral
Note: An Er is not precluded from adopting
turpitude is not analogous thereto as the element
a new policy conducive to a more
of relation to his work or to his employer is lacking.
economical and effective management, and
the law does not require that the Er should
Note: A criminal case need not be actually filed.
be suffering financial losses before he can
Commission of acts constituting a crime itself is
terminate the services of the employee on
sufficient.
the ground of redundancy (DOLE Phil., Inc. v.
NLRC, G.R. No. L‐55413, July 25, 1983)

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LABOR LAW TEAM:

4. Retrenchment – cutting of expenses and Purpose: To enable it to ascertain the
includes the reduction of personnel; It is a verity of the cause of termination.
management prerogative, a means to
protect and preserve the Er’s viability and 2. Written notice to Ee concerned 30 days
ensure his survival. To be an authorized prior the intended date of termination.
cause it must be affected in good faith
(GF) and for the retrenchment, which is 3. Payment of separation pay ‐ Serious
after all a drastic recourse with serious business losses do not excuse the Er from
consequences for the livelihood of the complying with the clearance or report
Ee’s or otherwise laid‐off. required in Art. 283 of the LC and its IRR
before terminating the employment of its
Note: The phrase “to prevent losses” means workers. In the absence of justifying
that retrenchment or termination from the circumstances, the failure of the Er to
service of some Ees is authorized to be observe the procedural req’ts under Art.
undertaken by the Er sometime before the 284 taints their actuations with bad faith
anticipated losses are actually sustained or if the lay‐off was temporary but then
realized. Evidently, actual losses need not serious business losses prevented the
set in prior to retrenchment. (Cajucom VII v. reinstatement of respondents, the Er’s
TP Phils Cement Corp., et al, G.R. No.
should have complied with the req’ts of
149090, Feb. 11, 2005)
written notice.

5. Closing or cessation of operation of the
Redundancy
establishment or undertaking – must be

done in good faith and not for the
Q: What are the requisites of a valid redundancy?
purpose of circumventing pertinent labor

laws.
A:

1. Written notice served on both the
6. Disease – must be incurable within 6
employees (Ees) and the DOLE at least 1
months and the continued employment is
month prior to separation from work
prohibited by law or prejudicial to his
2. Payment of separation pay equivalent to
health as well as to the health of his co‐
at least 1 month pay or at least 1 month
Ees with a certification from the public
pay for every year of service, whichever is
health officer that the disease is incurable
higher
within 6 months despite due to
3. Good faith in abolishing redundant
medication and treatment
position

4. Fair and reasonable criteria in
Q: What are other authorized causes?
ascertaining what positions are to be

declared redundant:
A:
a. Less preferred status, e.g. temporary
1. Total and permanent disability of Ee
Ee
2. Valid application of union security clause
b. Efficiency and
3. Expiration of period in term of
c. Seniority
employment

4. Completion of project in project
Q: Ong, a Sales Manager of Wiltshire File Co., Inc.,
employment
was informed of the termination of his
5. Failure in probation
employment due to redundancy upon returning
6. Relocation of business to a distant place
from a trip abroad. Ong maintains that there can
7. Defiance of return‐to work‐order
be no redundancy since he was the only person
8. Commission of Illegal acts in strike
occupying his position in the company.
9. Violation of contractual agreement
10. Retirement
Is there redundancy even though Ong was the only

one occupying his position.
Q: What are the procedural steps required in
termination of an employee for authorized A: Redundancy in an employer’s (Er’s) personnel
causes? does not necessarily or even ordinarily refer to
duplication of work. The characterization ofOng’s
A: services as no longer necessary or sustainable and
1. Written Notice to DOLE 30 days prior to therefore properly terminable, was an exercise of
the intended day of termination. business judgment on the part of Wiltshire.
85

Furthermore, a position is redundant where it is

superfluous, and superfluity of a position or Retrenchment is a means of last resort.
positions may be the outcome of a number of
factors, such as over hiring of workers, decreased Q: What are the requisites of a valid
volume of business, or dropping of a particular retrenchment?
product line or service activity previously
manufactured or undertaken by the enterprise. The A:
Er has no legal obligation to keep in its payroll more 1. Written notice served on both the Ee and
employees that are necessary for the operation of the DOLE at least 1 month prior to the
its business. (Wiltshire File Co., Inc. v. NLRC, G.R. No. intended date of retrenchment
82249, Feb. 7, 1991) 2. Payment of separation pay equivalent to
at least one month pay or at least 1/2
Retrenchment month pay for every year of service,
whichever is higher
Q: What are the circumstances that must be 3. Good faith
present for a valid retrenchment? 4. Proof of expected or actual losses
5. The employer used fair and reasonable
A: criteria in ascertaining who would be
retained among the Ees, such as status,
1. The losses expected should be substantial efficiency, seniority, physical fitness, age,
and not merely de minimis in extent ‐ If and financial hardship of certain workers
the loss purportedly sought to be (Asian Alcohol Corp. v. NLRC, G.R. No.
forestalled by retrenchment is clearly 131108, Mar. 25, 1999).
shown to be insubstantial and
inconsequential in character, the bona Q: What are the criteria in selecting employees
fide nature of the retrenchment would (Ees) to be retrenched?
appear to be seriously in question.
A: There must be fair and reasonable criteria to be
2. The substantial loss apprehended must be used in selecting Ees to be dismissed such as:
reasonably imminent ‐ as such imminence 1. Less preferred status;
can be perceived objectively and in good 2. Efficiency rating;
faith by the employer (Er). There should 3. Seniority. (Phil. Tuberculosis Society, Inc.
be a certain degree of urgency for the v. National Labor Union, G.R. No. 115414,
retrenchment. Aug. 25, 1998)

3. It must be reasonably necessary and likely Q: What is the “last in first out (LIFO)” rule?
to prevent the expected losse ‐ The Er
should have taken other measures prior A: It applies in the termination of employment in
or parallel to retrenchment to forestall the line of work. What is contemplated in the LIFO
losses such as cutting other costs than rule is that when there are two or more Ees
labor costs. occupying the same position in the company
affected by the retrenchment program, the last one
4. The alleged losses if already realized, and employed will necessarily be the first one to go.
the expected imminent losses sought to (Maya Farms Ees’ Organization v. NLRC, G.R. No.
be forestalled, must be proved by 106256, Dec. 28, 1994)
sufficient and convincing evidence ‐ The
reason for requiring this quantum of Q: Is the seniority rule or "last in first out"
proof is readily apparent: any less policy to be strictly followed in effecting a
exacting standard of proof would render retrenchment or redundancy program?
too easy the abuse of this ground for
termination of services of employees. A: Again, in Asian Alcohol Corp., the SC stated
(Lopez Sugar Corp. v. Federation of Free that with regard the policy of "first in, last out"
Workers, G.R. No. 75700‐01, Aug. 30, in choosing which positions to declare as
1990) redundant or whom to retrench to prevent further
business losses, there is no law that mandates
Note: The losses which the company may suffer or is such a policy. The reason is simple enough. A host
suffering may be proved by financial statements of relevant factors come into play in determining
audited by independent auditors (Asian Alcohol cost efficient measures and in choosing the Ees
Corporation v. NLRC, G.R. No. 131108, Mar. 25, 1999) who will be retained or separated to save the
86
LABOR LAW TEAM:

company from closing shop. In from bankruptcy. (Asian Alcohol Corp. v. NLRC, G.R.

determining these issues, management plays a No. 131108, Mar. 25, 1999)
pre‐eminent role. The characterization of positions
as redundant is an exercise of business judgment Closure
on the part of the Er. It will be upheld as long
as it passes the test of arbitrariness. (2001 Bar Q: What are the requisites of a valid closure?
Question)
A:
Q: What is the difference between redundancy 1. Written notice served on both the
and retrenchment? employees (Ees) and the DOLE at least 1
month prior to the intended date of
A: In redundancy, company has no financial closure
problems, unlike in retrenchment where the 2. Payment of separation pay equivalent to
company will suffer financial losses. at least one month pay or at least 1/2
month pay for every year of service,
Q: Philippine Tuberculosis Society, Inc. retrenched whichever is higher, except when closure
116 Ees after incurring deficits amounting to 9.1 is due to serious business losses
million pesos. Aside for retrenching some of its 3. Good faith
Ees, the company also implemented cost cutting 4. No circumvention of the law
measures to prevent such losses for increasing and 5. No other option available to the Er
minimizing it. The NLRC ruled that the
retrenchment was not valid on the ground that the Q: What is the test for the validity of closure or
Society did not take seniority into account in their cessation of establishment or undertaking?
selection. Was the retrenchment done by the
Society not valid for its failure to follow the A: The ultimate test of the validity of closure or
criteria laid down by law? cessation of establishment or undertaking is that it
must be bona fide in character. And the burden of
A: No. The Society terminated the employment of proving such falls upon the Er. (Capitol Medical
several workers who have worked with the Society Center, Inc. vs. Dr. Meris, G.R. No. 155098, Sep. 16,
for great number of years without consideration for 2005, J. Carpio‐Morales)
the number of years of service and their seniority
indicates that they had been retained for such a Q: When is separation pay required in case of
long time because of loyal and efficient service. The closure?
burden of proving the contrary rest on the Society.
(Phil. Tuberculosis Society, Inc. v. National Labor A: Only where closure is not due to serious business
Union, G.R. No. 115414, Aug. 25, 1998) losses nor due to an act of gov’t. (North Davao
Mining Corp v. NLRC, G.R. No. 112546, Mar. 13,
Q: Due to mounting losses the former owners of 1996; NFL v. NLRC, G.R. No. 127718, Mar. 2, 2000)
Asian Alcohol Corporation sold its stake in the
company to Prior Holdings. Upon taking control of Q: Galaxie Steel Corp. decided to close down
the company and to prevent losses, Prior Holdings because of serious business loses. It filed a written
implemented a reorganization plan and other cost‐ notice with the DOLE informing its intended
saving measures and one of them is the closure and the termination of its employees (Ees).
retrenchment of 117 employees (Ees) of which It posted the notice of closure on the corporate
some are members of the union and the majority bulletin board.
held by non‐union members. Some retrenched
workers filed a complaint for illegal dismissal Q: Does the written notice posted by Galaxie on
alleging that the retrenchment was a subterfuge the bulletin board sufficiently comply with the
for union busting activities. notice req’t under Art. 283 of the LC?

Was the retrenchment made by Asian Alcohol A: No. In order to meet the purpose, service of the
valid and justified? written notice must be made individually upon each
and every Ee of the company. However, the Court
A: Yes. Even though the bulk of the losses were held that where the dismissal is for an authorized
suffered under the old management and continued cause, non‐compliance with statutory due process
only under the new management ultimately the should not nullify the dismissal, or render it illegal,
new management of Prior Holdings will absorb such or ineffectual. Still, the employer should indemnify
losses. The law gives the new management every the Ee, in the form of nominal damages, for the
right to undertake measures to save the company violation of his right to statutory due process.
87

(Galaxie Steel Workers Union v. NLRC, G.R. No. damages and claim for employment benefits.
165757, Oct. 17, 2006) Were the losses incurred by the company enough
to justify closure of its operations?
Are Ees entitled to separation pay?
A: The determination to cease operations is a
A: No. Galaxie had been experiencing serious prerogative of management that is usually not
financial losses at the time it closed business interfered with by the State as no business can be
operations. Art. 283 of the LC governs the grant of required to continue operating at a loss simply to
separation benefits "in case of closures or cessation maintain the workers in employment. That would
of operation" of business establishments "not due be a taking of property without due process of law
to serious business losses or financial reverses." which the employer has a right to resist. But where
Where, the closure then is due to serious business it is manifest that the closure is motivated not by a
losses, the LC does not impose any obligation upon desire to avoid further losses but to discourage the
the employer to pay separation benefits. (Galaxie workers from organizing themselves into a union
Steel Workers Unin v. NLRC, G.R. No. 165757, Oct. for more effective negotiations with management,
17, 2006) the State is bound to intervene. The losses of less
than P2,000 for a corporation capitalized at P3
Q: Rank‐and‐file workers of SIMEX filed a petition million cannot be considered serious enough to call
for direct certification and affiliated with Union of for the closure of the company. (Carmelcraft Corp.
Filipino Workers (UFW). Subsequently, 36 workers v. NLRC, G.R. No. 90634‐35, June 6, 1990)
of the company’s “lumpia” dep’t and 16 other
workers from other dep’ts were effectively locked Q: Is the transferee of the closed corporation
out when their working areas were cleaned out. required to absorb the employees (Ees) of the old
The workers through UFW filed a complaint for corporation?
unfair labor practices against the company. SIMEX
then filed a notice of permanent shutdown/total A:
closure of all units of operation in the GR: There is no law requiring a bona fide purchaser
establishment with the DOLE allegedly due to of assets of an on‐going concern to absorb in its
business reverses brought about by the enormous employ the Ee’s of the latter except when the
rejection of their products for export to the United transaction between the parties is colored or
States. clothed with bad faith (BF). (Sundowner Dev’t Corp.
v. Drilon, G.R. No. 82341, Dec. 6, 1989)
Was the closure warranted by the alleged business
reverses? XPNs:
1. Where the transferee was found to be
A: The closure of a business establishment is a merely an alter ego of the different
ground for the termination of the services of any merging firms. (Filipinas Port Services, Inc.
employee unless the closing is for the purpose of v. NLRC, G.R. No. 97237, Aug. 16, 1991)
circumventing the provisions of the law. But, while 2. Where the transferee voluntarily agrees
business reverses can be a just cause for to do so. (Marina Port Services, Inc. v.
terminating employees, they must be sufficiently Iniego, G.R. No. 77853, Jan. 22, 1990)
proved. In this case, the audited financial statement
of SIMEX clearly indicates that they actually derived Q: Marikina Dairy Industries, Inc. decided to sell its
earnings. Although the rejections may have reduced assets and close operations on the ground of
their earnings they were not suffering losses. There heavy losses. The unions alleged that the financial
is no question that an employer may reduce its losses were imaginary and the dissolution was a
work force to prevent losses but it must be serious, scheme maliciously designed to evade its legal and
actual and real otherwise this ground for social obligations to its employees (Ees). The
termination would be susceptible to abuse by unions want the buyers of the corporations assets
scheming employers who might be merely feigning restrained to operate unless the members of the
business losses or reverses in their business unions were the ones hired to operate the plant
ventures to ease out employees. (Union of Filipino under the terms and conditions specified in the
Workers v. NLRC, G.R. No. 90519, Mar. 23, 1992) collective bargaining agreements.
Q: Carmelcraft Corporation closed it business Is the buyer of a company’s assets required to
operations allegedly due to losses of P1, 603.88 absorb the Ees of the seller?
after the Carmelcraft Ees Union filed a petition for
certification election. Carmelcraft Union filed a A: There is no law requiring that the purchaser of a
complaint for illegal lockout and ULP with company’s assets should absorb its Ees and the
88
LABOR LAW TEAM:

most that can be done for reasons of public policy 2. With a certification by competent public
and social justice was to direct that buyers of such health authority that the disease is
assets to give preference to the qualified separated incurable within 6 months despite due
Ees in the filling up of vacancies in the facilities of medication and treatment. (Solis v. NLRC,
the buyer. (MDII Supervisors & Confidential Ees GR No. 116175, Oct. 28,1996)
Ass’n (FFW) v. residential Assistant on Legal Affairs,
G.R. Nos. L‐45421‐23, Sep. 9, 1977) Note: The req’t for a medical certification cannot
be dispensed with; otherwise, it would sanction
Q: What is the difference between closure and the unilateral and arbitrary determination by the
retrenchment? Er of the gravity or extent of the Ee’s illness and
thus defeat the public policy on the protection of
A: labor. (Manly Express v Payong, G.R. No. 167462,
CLOSURE RETRENCHMENT Oct.25, 2005)
Is the reversal of Is the reduction of
fortune of the Er personnel for the purpose Termination of services for health reasons must
whereby there is a of cutting down on costs of be effected only upon compliance with the above
complete cessation of operations in terms of requisites. The req’t for a medical certificate
business operations to salaries and wages under Art. 284 of the LC cannot be dispensed
prevent further financial resorted to by an Er with; otherwise, it would sanction the unilateral
drain upon an Er who because of losses in and arbitrary determination by the Er of the
cannot pay anymore his operation of a business gravity or extent of the Ee’s illness and thus
Ees since business has occasioned by lack of work defeat the public policy on the protection of
already stopped. and considerable reduction labor. (Sy et. al v. CA, G.R. No. 142293, Feb. 27,
in the volume of business. 2003)
As in the case of
retrenchment, however, Q: What is the procedure in terminating an
for the closure of a employee (Ee) on the ground of disease?
One of the prerogatives
business or a department
of management is the A:
due to serious business
decision to close the
losses to be regarded as an 1. The employer (Er) shall not terminate his
entire establishment or
authorized cause for employment unless:
to close or abolish a
terminating Ees, it must be a. There is a certification by a
department or section
proven that the losses competent public health authority
thereof for economic
incurred are substantial b. That the disease is of such nature or
reasons, such as to
and actual or reasonably at such a stage that it cannot be
minimize expenses and
imminent; that the same cured within a period of 6 months
reduce capitalization.
increased through a period even with proper medical treatment.

of time; and that the

condition of the company
2. If the disease or ailment can be cured
is not likely to improve in
within the period, the Er shall not
the near future.
terminate the Ee but shall ask the Ee to
LC provides for the
Does not obligate the Er take a leave. The Er shall reinstate such Ee
payment of separation
for the payment of to his former position immediately upon
package in case of
separation package if the restoration of his normal health. (Sec.
retrenchment to prevent
there is closure of 8, Rule I, Book VI, IRR)
losses.
business due to serious

losses. Q: Is an employee suffering from a disease entitled

to reinstatement?

Disease A: Yes, provided he presents a certification by a
competent public health authority that he is fit to
Q: When is disease a ground for dismissal? return to work. (Cebu Royal Plant v. Deputy
Minister, G.R. No. L‐58639, Aug. 12, 1987)
A: Where the Ee suffers from a disease, and:
1. His continued employment is prohibited Q: Is the requirements of a medical certificate
by law or prejudicial to his health or to mandatory?
the health of his co‐Ees. (Sec.8, Rule I,
Book VI, IRR) A: Yes, it is only where there is a prior certification
from a competent public authority that the disease
89

afflicting the employee sought to be dismissed is of Closures or cessation

Equivalent to at least 1 month
such nature or at such stage that it cannot be cured of operation not due
pay or at least 1 month pay
within 6 months even with proper medical to serious
for every year of service (if
treatment that the latter could be validly business
due to severe financial losses,
terminated from his job. (Tan v. NLRC, G. R. No. losses/financial
no separation pay
116807, April 14, 1997) reverses
Equivalent to at least 1 month
Note: Termination from work on the sole basis of pay or at least ½ month pay
actual perceived or suspected HIV status is deemed Disease for every year of service,
unlawful. (Sec. 35, R.A. 8504 HIV/AIDS Law) whichever is higher
Q: Anna Ferrer has been working as

bookkeeper at Great Foods, Inc., which operates a Note: A fraction of at least 6 months shall be
considered 1 whole year.
chain of high‐end restaurants throughout the

country, since 1970 when it was still a small
There is no separation pay when the closure is due to
eatery at Binondo. In the early part of the year
an act of the gov’t.
2003, Anna, who was already 50 years old,

reported for work after a week‐long vacation in
Q: What is the purpose of the 2 notices served to
her province. It was the height of the SARS scare, the Ee and DOLE 1 month prior to termination?
and management learned that the first confirmed
SARS death case in the Phils, a “balikbayan” nurse A:
from Canada, is a townmate of Anna.
1. To give the Ees some time to prepare for
Immediately, a memorandum was issued by
the eventual loss of their jobs and their
management terminating the services of Anna on
corresponding income, look for other
the ground that she is a probable carrier of SARS
employment and ease the impact of the
virus and that her continued employment is
loss of their jobs.
prejudicial to the health of her co‐Ees. Is the
2. To give DOLE the opportunity to ascertain
action taken by the employer (Er) justified?
the verity of the alleged cause of
termination. (Phil. Telegraph & Telephone
A: The Er’s act of terminating the employment of
Corp. v. NLRC, G.R. No. 147002, April 15,
Anna is not justified. There is no showing that said
2005)
employee is sick with SARS, or that she associated or

had contact with the deceased nurse. They are
Note: Notice to both the Ees concerned and the DOLE
merely town mates. Furthermore, there is no are mandatory and must be written and given at least
certification by a competent public health authority 1 month before the intended date of retrenchment –
that the disease is of such a nature or such a stage and the fact that the Ees were already on temporary
that it cannot be cured within a period of 6 months lay‐off at the time notice should have been given to
even with proper medical treatment. (Implementing them is not an excuse to forego the 1‐month written
Rules, Book VI, Rule 1, Sec. 8, LC) (2004 Bar notice. (Sebuguero v. NLRC, G.R. No.115394, Sep. 27,
Question) 1995)
Q: Discuss the rules on separation pay with regard Q: DAP Corp. ceased its operation due to the
to each cause of termination. termination of its distribution agreement with Int’l
Distributors Corp. which resulted in its need to
A: cease its business operations and to terminate the
employment of its Ees. Marcial et al. filed a
CAUSE OF complaint for illegal dismissal and for failure to
SEPARATION PAY
TERMINATION give the Ees written notices regarding the
Equivalent to at least 1 month termination of their employment. On the other
pay or at least 1 month pay hand, DAP claims that their Ees actually knew of
Automation for every year of service, the termination therefore the written notices
whichever is higher were no longer required. Are written notices
Equivalent to at least 1 month dispensed with when the Ees have actual
pay or at least 1 month pay knowledge of the redundancy?
Redundancy for every year of service,
whichever is higher A: The Ees’ actual knowledge of the termination of
Equivalent to 1 month pay or a company’s distributorship agreement with

at least ½ month pay for another company is not sufficient to replace the
Retrenchment
every year or service formal and written notice required by law. In the
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LABOR LAW TEAM:

written notice, the Ees are informed of the specific 1. The req’t of notice is intended to inform

date of the termination, at least a month prior to the Ee concerned of the Er’s intent to
the date of effectivity, to give them sufficient time dismiss him and the reason for the
to make necessary arrangements. In this case, proposed dismissal
notwithstanding the Ees knowledge of the 2. On the otherhand the req’t of hearing
cancellation of the distributorship agreement, they affords the Ee the opportunity to answer
remained uncertain about the status of their his Er’s charges against him and
employment when DAP failed to formally inform accordingly to defend himself there from
them about the redundancy. (DAP Corp. v. CA, G.R. before dismissal is effected. (Salaw v.
No. 165811, Dec. 14, 2005) NLRC G.R. No. 90786 Sep. 27, 1991)

b.Procedural due process Note: Failure to comply with the req’t of the
2 notices makes the dismissal illegal. The
Q: What are the 2‐fold requirements of a valid procedure is mandatory. (Loadstar Shipping
dismissal for a just cause? Co. Inc. v. Mesano, G.R. No. 138956, Aug. 7,
2003)
A:
1. Substantive – it must be for a just cause Q: While it may be true that the Er enjoys wider
2. Procedural – there must be notice and latitude of discretion in terminating employees
hearing (Ees) should there exists valid and just cause,
would this be sufficient for the Er to depart from
Q: What is the process to be observed by the giving the Ee the right to be heard?
employer (Er) for termination of the employment
based on any of the just causes for termination? A: Art. 277(b) of the LC mandates that an Er who
seeks to dismiss an Ee must “afford the latter ample
A: opportunity to be heard and to defend himself with
1. A written notice should be served to the the assistance of his representative if he so desires.”
Ee specifying the ground/s for Expounding on this provision, the SC held that
termination and giving the said Ee “ample opportunity” connotes every kind of
reasonable opportunity to explain. assistance that management must accord the Ee to
enable him to prepare adequately for his defense
Note: This first written notice must apprise including legal representation. (U‐BIX Corp. vs.
the Ee that his termination is being Bravo, G.R. No. 177647, Oct. 31, 2008)
considered due to the acts stated in the
notice. (Phil. Pizza Inc. v. Bungabong, G.R. Q: What is included in the opportunity to be
No. 154315, May 9, 2005) heard?

2. A hearing or conference should be held A: The issue was addressed in an en banc decision
during which the Ee concerned, with the rendered by the Supreme Court. With a 14‐1 vote
assistance of counsel, if the Ee so desires, the Court through Chief Justice Corona held as
is given the opportunity to respond to the follows:
charge, present his evidence and present
the evidence presented against him. a) “Ample opportunity to be heard” in an
employee dismissal case means any
3. A written notice of termination – If meaningful opportunity (verbal or
termination is the decision of the Er, it written) given to the employee to answer
should be served on the Ee indicating that the charges against him or her and submit
upon due considerations of all the evidence in support of the defences,
circumstance, grounds have been whether in a hearing, conference or some
established to justify his termination, at other fair, just and reasonable way.
least one month prior to his termination. b) A formal hearing or conference becomes
mandatory only when requested by the
Note: Single notice of termination does not employee in writing or substantial
comply with the requirements of the law. evidentiary disputes exist or a company
(Aldeguer & Co., Inc. vs. Honeyline Tomboc, rule or practice requires it, or when
G.R. No. 147633, July 28, 2008) similar circumstance justify it.
c) The “ample opportunity to be heard”
Q: What is the purpose of notice and hearing? standard in the Labor Code prevails over
the “hearing or conference” requirement
A:
91

in the implementing rules and opportunity to explain his side and (2) another
regulations. (Perez v. PT&T, G.R. No. written notice indicating that, upon due
152048, Apr. 7, 2009) consideration of all circumstances, grounds have
been established to justify the Er's decision to
Q: Who has the burden of proof? dismiss the Ee.
A: The burden of proof rests upon the employer to There is however, no need for a hearing or

show that the dismissal of the employee is for a just conference. “To be heard” does not mean verbal
cause, and failure to do so would necessarily mean argumentation alone inasmuch as one may be
that the dismissal is not justified, consonant with heard just as effectively through written
the constitutional guarantee of security of tenure. explanations, submissions or pleadings. In other
words, the existence of an actual, formal “trial‐
Note: Due process refers to the process to be type” hearing, although preferred, is not absolutely
followed; burden of proof refers to the amount of necessary to satisfy the employee’s right to be
proof to be adduced. heard. (Perez. v. Phil. Telegraph and Telephone
Company, G.R. No. 152048, April 7, 2009)
In money claims, the burden of proof as to the amount
to be paid the Ees rests upon the Er since he is in
Q: What are the guidelines in determining
custody of documents that would be able to prove the
whether penalty imposed on Ee is proper?
amount due, such as the payroll.

A:
Q: What is the degree of proof?
1. Gravity of the offense

2. Position occupied by the Ee
A: In administrative or quasi‐judicial proceedings,
3. Degree of damage to the employer (Er)
substantial evidence is considered sufficient in
4. Previous infractions of the same offense
determining the legality of an employer’s dismissal
5. Length of service (ALU‐TUCP v. NLRC, G.R.
of an employee. (Pangasinan III Electric
No. 120450, Feb. 10, 1999; PAL v. PALEA,
Cooperative, Inc. v. NLRC, G.R. No. 89878, Nov. 13,
G.R. No.L‐24626, June 28,1974)
1992)

Q: Felizardo was dismissed from Republic Flour
Q: Perez and Doria were employed by PT&T. After
Mills‐Selecta ice cream Corporation for dishonesty
investigation, Perez and Doria were placed on
and theft of company property for bringing out a
preventive suspension for 30 days for their alleged
pair of boots, 1 piece aluminum container and 15
involvement in anomalous transactions in the
pieces of hamburger patties. Is the penalty of
shipping section. PT&T dismissed Perez and Doria
dismissal commensurate with the offense
from service for falsifying documents. They filed a
committed?
complaint for illegal suspension and illegal
dismissal. The LA found that the 30‐day extension
A: There is no question that the employer has the
of suspension and the subsequent dismissal were
inherent right to discipline its Ees which includes
both illegal. The NLRC reversed the LA’s decision, it
the right to dismiss. However this right is subject to
ruled that Perez and Doria were dismissed for just
the police power of the State. In this case the Court
cause, that they were accorded due process and
finds that the penalty imposed upon Felizardo was
that they were illegally suspended for only 15 days
not commensurate with the offense committed
(without stating the reason for the reduction of
considering the value of the articles he pilfered and
the period of petitioners’ illegal suspension). On
the fact that he had no previous derogatory record
appeal, CA held that they were dismissed without
during his 2 years of employment in the company.
due process. Whether petitioners were illegally
Moreover, it should also be taken into account that
dismissed?
Felizardo was not a managerial or confidential Ee in
whom greater trust is reposed by management and
A: Yes. The Er must establish that the dismissal is
from whom greater fidelity to duty is
for cause in view of the security of tenure that Ees
correspondingly expected. (ALU‐TUCP v. NLRC, G.R.
enjoy under the Constitution and the LC. PT&T
No. 120450, Feb. 10, 1999)
failed to discharge this burden. PT&T’s illegal act of
dismissing Perez and Doria was aggravated by their
(1) Agabon Doctrine
failure to observe due process. To meet the req’ts
of due process in the dismissal of an Ee, an Er must Q: If the dismissal is for a just or authorized cause
furnish the worker with 2 written notices: (1) a but the requirement of due process of notice and
written notice specifying the grounds for hearing were not complied with should the
termination and giving to said Ee a reasonable dismissal be held illegal?
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LABOR LAW TEAM:

A: No, In Agabon v. NLRC, G.R. No. 158693, Nov. Note: An order of reinstatement by the LA is not the
17, 2004, it was held that when dismissal is for just same as actual reinstatement of a dismissed or
or authorized cause but due process was not separated Ee. Thus, until the Er continuously fails to
observed, the dismissal should be upheld. actually implement the reinstatement aspect of the
decision of the LA, their obligation to the illegally
However, the employer (Er) should be held liable dismissed Ee, insofar as accrued backwages and other
for non‐compliance with the procedural req’ts of benefits are concerned, continues to accumulate. It is
only when the illegally dismissed Ee receives the
due process (e.g. damages). The Agabon ruling was
separation pay (in case of strained relations) that it
modified by JAKA Food Processing v. Pacot (G.R. No.
could be claimed with certainty that the Er‐Ee
515378, Mar. 28, 2005) where it was held that: realtionship has formally ceased thereby precluding
the possibility of reinstatement. In the meantime, the
1. If based on just cause (Art. 282) but the Er illegally dismissed Ees entitlement to backwages, 13th
failed to comply with the notice req’t, the month pay, and other benefits subsists. Until the
sanction to be imposed upon him should payment of separation pay is carried out, the Er should
be tempered because the dismissal not be allowed to remain unpunished for the delay, if
process was, in effect, initiated by an act not outright refusal, to immediately execute the
imputable to the Ee; and reinstatement aspect of the LA’s decision.
2. If based on authorized causes (Art. 283)
but the Er failed to comply with the notice Further, the Er cannot refuse to reinstate the illegally
req’t, the sanction should be stiffer dismissed Ee by claiming that the latter had already
because the dismissal process was found a job elsewhere. Minimum wage earners are left
initiated by Er’s exercise of his with no choice after they are illegally dismissed from
management prerogative. their employment, but to seek new employment in
order to earn a decent living. Surely, we could not fault

them for their perseverance in looking for and
c.Reliefs for illegal dismissal
eventually securing new employment opportunities

instead of remaining idle and waiting the outcome of
(1)Reinstatement aspect the case. (Triad Security & Allied Services, Inc. et al v.
Ortega, G.R. No. 160871, Feb. 6, 2006).
Q: What are the remedies available to an illegally
dismissed employee (Ee)? Q: Distinguish Arts. 223 from 279 of the LC?

A: An Ee who is unjustly dismissed from work shall A:
by entitled to: Art. 279 Art. 223
1. Reinstatement without loss of seniority Presupposes that the May be availed of as soon
rights and judgment has already as the labor arbiter
2. Full backwages. (Sec. 3, Rule I, Book VI, become final and renders a judgment
IRR) executory. declaring that the
3. Separation pay in lieu of reinstatement, if dismissal of the Ee is
the latter is no longer feasible Consequently, there is illegal and ordering said
nothing left to be done reinstatement. It may be
Q: What is reinstatement? except the execution availed of even pending
thereof. appeal
A: It is the restoration of the employee to the state
from which he has been unjustly removed or Note: An award or order for reinstatement is self‐
separated without loss of seniority rights and other executory. It does not require the issuance of a writ of
privileges. execution. (Pioneer Texturizing Corp. v. NLRC, G.R. No.
118651, Oct. 16, 1997)

(a)Immediately executory: actual reinstatement and
Q: PAL dismissed Garcia, for violating PAL’s Code
payroll reinstatement
of Discipline for allegedly sniffing shabu in PAL’s
Technical Center Toolroom Section. Garcia then
Q: What are the forms of reinstatement?
filed for illegal dismissal and damages where the
A: Labor Arbiter (LA) ordered PAL to immediately
1. Actual or physical – the employee (Ee) is reinstate Garcia. On appeal, the NLRC reversed
admitted back to work the decision and dismissed Garcia’s complaint for
2. Payroll – the Ee is merely reinstated in the lack of merit. Garcia’s motion for reconsideration
payroll was denied by the NLRC. It affirmed the validity of
the writ and the notice issued by the LA but
suspended and referred the action to the
93

Rehabilitation Receiver for appropriate action. not include a prayer for reinstatement, unless, of
Whether Garcia may collect their wages during the course the Ee has waived his right to reinstatement.
period between the LA’s order of reinstatement By law, an Ee who is unjustly dismissed is entitled to
pending appeal and the NLRC decision overturning reinstatement among others. The mere fact that
that of the LA? the complaint did not pray for reinstatement will
not prejudice the Ee, because technicalities of law
A: Par. 3 of Art. 223 of the LC provides that the and procedure are frowned upon in labor
decision of the LA reinstating a dismissed or proceedings (Pheschem Industrial Corp. v. Moldez,
separated Ee, insofar as the reinstatement aspect is G.R. No. 1161158, May 9, 2005).
concerned, shall immediately be executory,
pending appeal. Q: What happens if there is an Order of
Reinstatement but the position is no longer
Even if the order of reinstatement of the LA is available?
reversed on appeal, it is obligatory on the part of
the Er to reinstate and pay the wages of the A: The employee (Ee) should be given a
dismissed Ee during the period of appeal until substantially equivalent position. If no substantially
reversal by the higher court. On the other hand, if equivalent position is available, reinstatement
the Ee has been reinstated during the appeal period should not be ordered because that would in effect
and such reinstatement order is reversed with compel the employer to do the impossible. In such
finality, the Ee is not required to reimburse a situation, the Ee should merely be given a
whatever salary he received for he is entitled to separation pay consisting of 1‐month salary for
such, more so if he actually rendered services every year of service (Grolier Int’l Inc. v. ELA, G.R.
during the period. No. 83523, Aug. 31, 1989)
In other words, a dismissed Ee whose case was (2)Separation pay in lieu of reinstatement

favorably decided by the LA is entitled to receive
wages pending appeal upon reinstatement, which is Q: How can separation pay be viewed?
immediately executory. Unless there is a restraining
order, it is ministerial upon the LA to implement the A: Under present laws and jurisprudence,
order of reinstatement and it is mandatory on the separation pay may be viewed in 4 ways:
Er to comply therewith. (Garcia vs. PAL, G.R. No.
164856, Jan.20, 2009) 1. In lieu of reinstatement in illegal dismissal
cases, where Ee is ordered reinstated but
Q: What is the effect of the reversal of LA’s reinstatement is not feasible.
decision to the reinstated employee (Ee) 2. As Er’s statutory obligation in cases of
legal termination due to authorized
A: If the decision of the LA is later reversed on causes under Art. 283 and 284 of the LC.
appeal upon the finding that the ground for 3. As financial assistance, as an act of social
dismissal is valid, then the Er has the right to justice and even in case of legal dismissal
require the dismissed Ee on payroll reinstatement under Art. 282 of the LC.
to refund the salaries he/she received while the 4. As employment benefit granted in CBA or
case was pending appeal, or it can be deducted company policy. (Poquiz, 2005)
from the accrued benefits that the dismissed Ee
was entitled to receive from the employer under Q: Is an illegally dismissed employee entitled to
existing laws, CBA provisions, and company reinstatement as a matter of right?
practices. However, if the Ee was reinstated to work
during the pendency of the appeal, then the Ee is A: GR: Yes.
entitled to receive the compensation received for
actual services rendered without need of refund XPNS: Proceeds from an illegal dismissal
(Citibank v. NLRC, G.R. No. 142732‐33, Dec. 4, wherein reinstatement is ordered but cannot be
2007). carried out as in the following cases:
Q: May a court order the reinstatement of a 1. Reinstatement cannot be effected in view

dismissed employee (Ee) even if the prayer of the of the long passage of time or because of
complaint did not include such relief? the realities of the situation.
2. It would be inimical to the employers’
A: Yes. So long as there is a finding that the Ee was interest.When reinstatement is no longer
illegally dismissed, the court can order the feasible.
reinstatement of an Ee even if the complaint does
94
LABOR LAW TEAM:

3. When it will not serve the best interest of as that provided under Art. 283 of the LC in case of
the parties involved. retrenchment to prevent losses?
4. Company will be prejudiced by
reinstatement. A: No. The separation pay awarded to employees
5. When it will not serve a prudent purpose. due to illegal dismissal is different from the amount
6. When there is resultant strained relation of separation pay provided for in Art. 283 of the LC.
(applies to both confidential and Prescinding from the above, Phil. Tobacco is liable
managerial employees (Ees) only). for illegal dismissal and should be responsible for
7. When the position has been abolished the reinstatement of the Lubat group and the
(applies to both managerial, supervisory payment of their backwages. However, since
and rank‐and‐file Ees). reinstatement is no longer possible as Phil. Tobacco
have already closed its Balintawak plant, members
Note: In such cases, it would be more prudent to order of the said group should instead be awarded
payment of separation pay instead of reinstatement. normal separation pay (in lieu of reinstatement)
(Quijano v. Mercury Drug Corporation, G.R. No. equivalent to at least one month pay, or one month
126561, July 8, 1998) pay for every year of service, whichever is higher. It
must be stressed that the separation pay being
Q: Respondents are licensed drivers of public awarded to the Lubat group is due to illegal
utility jeepneys owned by Moises Capili. When dismissal; hence, it is different from the amount of
Capili assumed ownership and operation of the separation pay provided for in Article 283 in case of
jeepneys, the drivers were required to sign retrenchment to prevent losses or in case of closure
individual contracts of lease of the jeepneys. The or cessation of the Er’s business, in either of which
drivers gathered the impression that signing the the separation pay is equivalent to at least one (1)
contract was a condition precedent before they month or one‐half (1/2) month pay for every year
could continue driving. The drivers stopped plying of service, whichever is higher. (Phil. Tobacco Flue‐
their assigned routes and a week later filed with Curing & Redrying Corp. v. NLRC, G.R. No. 127395,
the Labor Arbiter a complaint for illegal dismissal Dec. 10, 1998)
praying not for reinstatement but for separation
pay. Are the respondents entitled to separation (a)Strained relation rule
pay?
Q: What is the doctrine of strained relations?
A: No. When drivers voluntarily chose not to return
to work anymore, they must be considered as A: When the Er can no longer trust the Ee and vice
having resigned from their employment. The versa, or there were imputations of bad faith to
common denominator of those instances where each other, reinstatement could not effectively
payment of separation pay is warranted is that the serve as a remedy. This doctrine applies only to
employee was dismissed by the employer. (Capili v. positions which require trust and confidence (Globe
NLRC, G.R. 117378, Mar. 26, 1997) Mackay v. NLRC, G.R. No. 82511, March 3, 1992).

Q: Two groups of seasonal workers claimed Note: Under the circumstances where the
separation benefits after the closure of Phil. employment relationship has become so strained to
Tobacco processing plant in Balintawak and the preclude a harmonious working relationship and that
transfer of its tobacco operations to Candon, all hopes at reconciliation are naught after
Ilocos Sur. Phil. Tobacco refused to grant reinstatement, it would be more beneficial to accord
separation pay to the workers belonging to the the Ee backwages and separation pay.
first batch (Lubat group), because they had not
been given work during the preceding year and, Q: What must be proven before the principle of
hence, were no longer in its employ at the time it strained relations can be applied to a particular
closed its Balintawak plant. Likewise, it claims case?
exemption from awarding separation pay to the
second batch (Luris group), because the closure of A:
its plant was due to "serious business losses," as 1. The Ee concerned occupies a position
defined in Art. 283 of the LC. Both labor agencies where he enjoys the trust and confidence
held that the Luris and Lubat groups were entitled of his Er; and
to separation pay equivalent to 1/2 month salary 2. That it is likely that if reinstated, an
for every of service, provided that the Ee worked atmosphere of antipathy and antagonism
at least 1 month in a given year. Is the separation may be generated as to adversely affect
pay granted to an illegally dismissed Ee the same the efficiency and productivity of the Ee
concerned. (Globe Mackay Cable & Wire
95

Corp. v. NLRC G.R. No. 82511, Mar. 3, A: The payment of backwages is generally granted
1992) on the ground of equity. It is a form of relief that
restores the income that was lost by reason of the
Q: Does the doctrine of strained relationship unlawful dismissal; the grant thereof is intended to
always bar reinstatement in all cases? restore the earnings that would have accrued to the
dismissed Ee during the period of dismissal until it is
A: No. The doctrine should be applied on a case to determined that the termination of employment is
case basis, based on each case’s peculiar conditions for a just cause. It is not private compensation or
and not universally. Otherwise, reinstatement can damages but is awarded in furtherance and
never be possible simply because some hostility is effectuation of the public objective of the LC. Nor is
invariably engendered between the parties as a it a redress of a private right but rather in the
result of litigation. That is human nature. (Anscor nature of a command to the employer to make
Transport v. NLRC, G.R. No. 85894, Sept. 28, 1990) public reparation for dismissing an Ee either due to
the former’s unlawful act or bad faith. (Tomas
Besides, no strained relations should arise from a Claudio Memorial College Inc., v. CA, G.R. No.
valid and legal act of asserting one's right; 152568, Feb. 16, 2004)
otherwise an Ee who shall assert his right could be
easily separated from the service, by merely paying Q: What is the period covered by the payment of
his separation pay on the pretext that his backwages?
relationship with his employer (Er) had already
become strained. (Globe Mackay Cable & Wire A: The backwages shall cover the period from the
Corp. v. NLRC, G.R. No. 82511, Mar. 3, 1992) date of dismissal of the employee up to the date of:

Q: Differentiate Art. 279 of the LC from Sec. 7 of 1. Actual reinstatement, or if reinstatement
R.A. 10022. is no longer feasible
2. Finality of judgment awarding backwages
A: (Buhain v. CA, G.R. 143709, July 2, 2002)

Art. 279, LC (Local Sec. 7, RA 10022 Note: The backwages to be awarded should not be
Workers) (Migrant Workers) diminished or reduced by earnings elsewhere during
Reinstatement the period of his illegal dismissal. The reason is that
the Ee while litigating the illegality of his dismissal
Full Reimbursement of his must earn a living to support himself and his family.
Full backwages from the
placement fee with (Bustamante v. NLRC, G.R. No. 111651, Mar. 15, 1996;
time of his compensation
interest of 12% per Buenviaje v. CA, G.R. No. 147806, Nov. 2002)
was withheld from him
annum.
up to the time of his
actual reinstatement. (a)Components of the amount of backwages

Q: What is included in the computation of
(3)Backwages backwages?
Q: What are backwages? A: They cover the following:

A: It is the relief given to an employee (Ee) to 1. Transportation and emergency
compensate him for the lost earnings during the allowances
period of his dismissal. It presupposes illegal 2. Vacation or service incentive leave and
termination. sick leave
th
3. 13 month pay
Note: Entitlement to backwages of the illegally
dismissed Ee flows from law. Even if he does not ask Note: Facilities such as uniforms, shoes, helmets and
for it, it may be given. The failure to claim backwages ponchos should not be included in the computation of
in the complaint for illegal dismissal is a mere backwages because said items are given for free, to be
procedural lapse which cannot defeat a right granted use only during official tour of duty not for private or
under substantive law. (St. Michael’s Institute v. personal use.
Santos, G.R. No. 145280, Dec. 4, 2001)
The award of backwages is computed on the basis of
Q: What is the basis of awarding backwages to an 30‐day month. (JAM Trans Co. v. Flores, G.R. No. L‐
illegally dismissed employee (Ee)? 63555, Mar. 19, 1993)

Q: What does the term “full backwages” mean?
96
LABOR LAW TEAM:

A: The Labor Code as amended by R.A. 6715 points Q: Reynaldo was hired by Geminilou Trucking

to "full backwages" as meaning exactly that, i.e., Service (GTS) as a truck driver to haul and deliver
without deducting from backwages the earnings products of San Miguel Pure Foods Company, Inc.
derived elsewhere by the concerned Ee during the He was paid P 400 per trip and made 4 trips a day.
period of his illegal dismissal. (Buenviaje v. CA, G.R. He claimed that he was requested by GTS to sign a
147806, Nov. 12, 2002) contract entitled “Kasunduan Sa Pag‐Upa ng
Serbisyo” which he refused as he found it to alter
The underlying reason for this ruling is that the his status as a regular Ee to merely contractual. He
employee, while litigating the legality (illegality) of averred that on account of his refusal to sign the
his dismissal, must still earn a living to support Kasunduan, his services were terminated
himself and family, while full backwages have to be prompting him to file a complaint before the NLRC
paid by the employer as part of the price he has to for constructive dismissal against the GTS. Would

pay for illegally dismissing his Ee. (Bustamante v. Reynaldo’s refusal to sign the Kasunduan
NLRC, G.R. No. 111651, Mar. 15, 1996) adequately support his allegation of constructively
dismissal?
Q: Is an Ee entitled to backwages even after the
closure of the business? A: No. The test of constructive dismissal is whether
a reasonable person in the employee’s (Ee's)
A: Yes. The closure of the business rendered the position would have felt compelled to give up his
reinstatement of complainant to her previous job under the circumstances. In the present case,
position impossible but she is still entitled to the the records show that the lone piece of evidence
payment of backwages up to the date of dissolution submitted by Reynaldo to substantiate his claim of
or closure. An employer found guilty of unfair labor constructive dismissal is an unsigned copy of the
practice in dismissing his Ee may not be ordered to Kasunduan. This falls way short of the required
pay backwages beyond the date of closure of quantum of proof which is substantial evidence, or
business where such closure was due to legitimate such relevant evidence as a reasonable mind might
business reasons and not merely an attempt to accept as adequate to support a conclusion.
defeat the order of reinstatement. (Pizza Inn v. Reynaldo was not dismissed, but that he simply
NLRC, G.R. No. 74531, June 28, 1988) failed to report for work after an altercation with a
fellow driver. (Madrigalejos vs. Geminilou Trucking
Q: What are the circumstances that prevent award Service, G.R. No. 179174, Dec. 24, 2008)
of backwages?
Q: Flores, a conductor of JAM Transportation Co.,
A: Inc., had an accident where he had to be
1. Dismissal for cause hospitalized for a number of days. Upon reporting
2. Death, physical or mental incapacity of back to the company he was told to wait. For
the employee several days this continued and he was promised a
3. Business reverses route assignment which did not materialize. Upon
4. Detention in prison speaking to Personnel Manager Medrano, he was
told that he will be accepted back to work but as a
(4)Constructive Dismissal new employee. Flores rejected the offer because it
would mean forfeiture of his 18 years of service to
Q: What is constructive dismissal? the company. Is the offer for reinstatement as a
new employee (Ee) a constructive dismissal?
A: An involuntary resignation resorted to when:
A: Yes. Flores’ re‐employment as a new Ee would
1. continued employment becomes be very prejudicial to him as it would mean a
impossible, unreasonable, or unlikely demotion in rank and privileges, retirement
2. there is a demotion in rank or diminution benefits as his previous 18 years of service with the
in pay or company would simply be considered as non‐
3. clear discrimination, insensibility or existent. It amounts to constructive dismissal. (JAM
disdain by an Er becomes unbearable to Transportation Co., Inc. v. Flores, G.R. No. 82829,
the Ee. (Leonardo v. NLRC, G.R. Mar. 19, 1993)
No.125303, June 16, 2000)
Q: Quinanola was transferred from the position of
Note: There is no formal dismissal. The Ee is placed in Executive Secretary to the Executive Vice
a situation by the Er such that his continued President and General Manager to the Production
employment has become unbearable. Abandonment is Dep’t as Production Secretary. Quinanola rejected
incompatible with constructive dismissal.
the assignment and filed a complaint for illegal
97

dismissal due to constructive dismissal. Did the This period is intended only for the purpose of
transfer of Quinanola amount to constructive investigating the offense to determine whether he
dismissal? is to be dismissed or not. It is not a penalty.
A: No. Quinanola’s transfer was not unreasonable Note: The Er may continue the period of preventive
since it did not involve a demotion in rank nor a suspension provided that he pays the salary of the Ee.
change in her place of work nor a diminution in pay,
benefits and privileges. It did not constitute a If more than 1 month, the Ee must actually be
constructive dismissal. Furthermore, an employee’s reinstated or reinstated in the payroll. Officers are
security of tenure does not give him a vested right liable only if done with malice.
in his position as would deprive the company of its
Q: Cantor and Pepito were preventively suspended
prerogative to change his assignment or transfer
pending application for their dismissal by Manila
him where he will be most useful. (Philippine Japan
Doctor’s Hospital after being implicated by one
Active Carbon Corp. v. NLRC, G.R. No. 83239, Mar.
Macatubal when they refused to help him when
8, 1989)
he was caught stealing x‐ray films from the
Q: Sangil was a utility man/assistant steward of hospital. Was the preventive suspension of Cantor
the passenger cruise vessel Crown odyssey under a and Pepito proper?
one‐year contract. Sangil suffered head injuries
A: Where the continued employment of an Ee
after an altercation with a Greek member of the
poses a serious and imminent threat to the life and
crew. He informed the captain that he no longer
property of the employer or on his co‐Ees, the Ees’
intends to return aboard the vessel for fear that
preventive suspension is proper. In this case, no
further trouble may erupt between him and the
such threat to the life and property of the Er or of
other Greek crewmembers of the ship. Was Sangil
their co‐Ee’s is present and they were merely
constructively dismissed?
implicated by the Macatubal. (Manila Doctors
A: Yes. There is constructive dismissal where the act Hospital v. NLRC, G.R. No 64897, Feb. 28, 1985)
of a seaman in leaving ship was not voluntary but
(6)Quitclaim
was impelled by a legitimate desire for self‐
preservation or because of fear for his life
Q: What is a quitclaim?
Constructive dismissal does not always involve
diminution in pay or rank but may be inferred from A: It is a document executed by an employee in
an act of clear discrimination, insensibility or favor of the employer preventing the former from
disdain by an Er may become unbearable on the filing any further money claim against the latter
part of the Ee that it could foreclose any choice by arising from employment.
him except to forego his continued employment.
(Sunga Ship Management Phils., Inc. v. NLRC, G.R. Q: What are the elements of a valid quitclaim?
No. 119080, April 14, 1998)
A:
(5)Preventive Suspension 1.Voluntarily entered into with full
understanding of what the employee is
Q: What is preventive suspension? doing
2. Represents a reasonable settlement
A: During the pendency of the investigation, the Er

may place the Ee under preventive suspension
Q: What constitutes reasonable settlement?
leading to termination when there is an imminent
threat or a reasonable possibility of a threat to the A: Reasonable settlement requires that the
lives and properties of the Er, his family and consideration for the quitclaim is credible and
representatives as well as the offender’s co‐workers reasonable. (Periquet v. NLRC, G.R. No. 91298, June
by the continued service of the Ee. 22, 1990)
Q: What is the duration of preventive suspension? Q: Is “dire necessity” a ground to nullify a
quitclaim?
A: It should not last for more than 30 days. The Ee
should be made to resume his work after 30 days. It A: Dire necessity is not an acceptable ground for
can be extended provided the Ee’s wages are paid annulling the releases, especially since it has not
after the 30‐day period. been shown that the employees had been forced to
execute them. It has not even been proven that the
considerations for the quitclaims were
98
LABOR LAW TEAM:

unconscionably low and that the petitioners had A: It is the result of a bilateral act of the parties, a

been tricked into accepting them. Furthermore, no voluntary agreement between the employer and
deception has been established on the part of the the employees whereby the latter after reaching a
employer that would justify the annulment of the certain age agrees and/or consents to sever his
employees’ quitclaim. (Veloso v. DOLE, G.R. No. employment with the former. (Soberano v. Sec. of
87297, August 5, 1991.) Labor, G.R. Nos. L‐43753‐56 and L‐50991, Aug. 29,
1980)
(7)Termination of employment by employee
Q: What are the kinds of retirement schemes?
Q: How can an employee (Ee) terminate his service
with his employer (Er)? A:
1. Compulsory and contributory in nature;
A: 2. One set up by the agreement between
1. Without just cause – by serving written the employer (Er) and employees (Ees) in
notice on the Er at least 1 month in the CBA or other agreements between
advance. The Er upon whom no such them (other applicable employment
notice was served may hold the Ee liable contract);
for damages. 3. One that is voluntarily given by the Er,
expressly as announced company policy
2. With just cause – an Ee may put an end to or impliedly as in the failure to contest
employment without serving any notice the Ee’s claim for retirement benefits.
on the Er for any of the following just (Marilyn Odchimar Gertach v. Reuters
causes: Limited, Phils., G.R. No. 148542, Jan. 17,
a. Serious insult by the Er or his 2005)
representative on the hour and
person of the Ee Q: Who are covered by the LC provisions on
b. Inhuman and unbearable treatment retirement?
accorded the Ee by the Er or his
representative A:
c. Commission of a crime or offense by GR: All employees (Ees) in the private sector:
the Er or his representative against 1. Regardless of their position, designation
the person of the Ee or any of the or status; and
immediate members of his family 2. Irrespective of the method by which their
d. Other causes analogous to any of the wages are paid. (Sec.1, Rule II, Book VI,
foregoing IRR)

Q: When is employment not deemed terminated? XPN:
1. Ees of the National Gov’t and its political
A: subdivisions, including GOCCs (if they are
1. Bona fide suspension of the operation of covered by the Civil Service Law)
a business or undertaking for a period not 2. Domestic helpers and persons in the
exceeding 6 months, or personal service of another
2. The fulfillment by the Ee of a military or 3. Ees of retail, service, and agricultural
civic duty shall not terminate establishments or operations employing
employment. not more than 10 Ees (Sec.2, Rule II, Book
VI, IRR)
Note: In all such cases, the Er shall reinstate the Ee to
his former position without loss of seniority rights if he Q: What is the retirement age?
indicates his desire to resume his work not later than 1
month from the resumption of operations of his Er or A: It is the age of retirement that is specified in the:
from his relief from the military or civic duty. (Art. 286) 1. CBA; or
2. Employment contract; or
3.RETIREMENT PAY LAW 3. Retirement plan (Sec. 3, Rule II, Book VI,
IRR).
a.Coverage, Exclusions from coverage, Components 4. Optional retirement age for underground
of retirement pay mining employees: 50‐60 years provided
Q: What is retirement? they have at least served for a period of 5
years. (Art.285 as amended by R.A. 8558)

99

Q: What is the retirement age in the absence of a 6 months being considered as 1 whole year.

retirement plan or other applicable agreement? (Sec.5.1, Rule II, Book VI, IRR)

A: Q: What comprises ½ month salary or retirement
1. Optional – 60 years old / 5 years in service pay?
(includes authorized absences, vacations,
regular holidays, mandatory military or A: Unless parties provide for broader inclusions:
civic service) 1. 15 days salary based on latest salary rate;
2. Cash equivalent of not more than 5 days
Note: The option to retire upon reaching the of service incentive leaves (22.5/year of
age of 60 years or more but not beyond 65 service)
is the exclusive prerogative of the employee 3. 1/12 of the 13th month pay
(Ee) if there is no provision on retirement in 4. All other benefits as may be agreed upon
a CBA or any other agreement or if the by the employer and employee (Ee).
employer (Er) has no retirement plan. (R.A. (Sec.5.2, Rule II, Book VI, IRR)
7641; Capili v. NLRC, G.R. No. 117378, Mar.
26, 1997)
Note: Under Sec. 26 of R.A. No. 4670,otherwise known
2. Compulsory – 65 years old, regardless of as Magna Carta for Public School Teachers, public
years of service (company is not bound to school teachers having fulfilled the age and service
dismiss Ee; it is automatic). (Sec. 4, Rule II, req’ts of the applicable retirement laws shall be given
Book VI, IRR) one range salary raise upon the retirement, which
shall be the basis of the computation of the lump sum
Note: Retirement benefits, where not of the retirement pay and monthly benefit thereafter.
mandated by law, may be granted by
agreement of the Ees and their Er or as a Q: Can Art. 287 of the LC (on retirement) as
voluntary act on the part of the Er. amended by R.A. 7641 be applied retroactively?
Retirement benefits are intended to help
the Ee enjoy the remaining years of his life, A: Yes, provided:
lessening the burden of worrying for his 1. The claimant for retirement benefits was
financial support, and are a form of reward still the employee of the employer at the
for his loyalty and service to the Er (Aquino time the statute took effect; and
v. NLRC, G.R. No. 87653, Feb. 11, 1992) 2. The claimant was in compliance with the
req’ts for eligibility under the statute for
Q: Is compulsory retirement age below 60 such retirement benefits. (PSVSIA v. NLRC,
allowed? G.R. No. 115019, April 14, 1997)

A: Yes. Art. 287 permits Er and Ee to fix the Q: Are the provisions of the retirement plan
applicable retirement age at below 60. The same is binding as part of the employment contract?
legal and enforceable so long as the parties agree to
be governed by such CBA. (Pantranco North Express A: Yes. The retirement plan forms part of the
v. NLRC, G.R. No. 95940, July 24, 1996) employment contract since it is made known to the
Ees and accepted by them, and such plan has an
Q: What is the rule for extension of service of express provision that the company has the choice
retiree upon his reaching the compulsory to retire an Ee regardless of age, with 20 years of
retirement age? service, said policy is within the bounds
contemplated by the LC. Moreover, the manner of
A: Upon the compulsory retirement of an employee
computation of retirement benefits depends on the
(Ee) or official in the public or private service, his
stipulation provided in the company retirement
employment is deemed terminated. The matter of
plan. (Progressive Dev’t Corporation v. NLRC, G.R.
extension of service of such Ee or official is
No. 138826, Oct.30, 2000)
addressed to the sound discretion of the Er. (UST
Faculty Union v. NLRC, G.R. No. 89885, Aug. 6,1990) Q: Rivera was employed as senior manufacturing
pharmacist by UNILAB. She later became Director
Q: What are retirement benefits?
of UNILAB's Manufacturing Division. UNILAB
adopted a comprehensive retirement plan (the
A: In the absence of an applicable agreement or
plan or retirement plan) supported by a
retirement plan – A retiree is entitled to a
retirement fund. A member is compulsorily
retirement pay equivalent to at least ½ month
retired upon reaching age 60 or has completed 30
salary for every year of service, a fraction of at least
100
LABOR LAW TEAM:

years of service, whichever comes first. Rivera Q: In ‘55, Hilaria was hired as a grade school
completed 30 years of service and UNILAB retired teacher at the Sta. Catalina College. In ‘70, she
her pursuant to the terms of the plan, she received applied for and was granted a 1 yr LOA without
the benefits in ‘88. At Rivera's request, UNILAB pay due to the illness of her mother. After the
allowed her to continue working for the company. expiration in ‘71 of her LOA, she had not been
She continued working beyond the compulsory heard from by Sta. Catalina. In the meantime, she
separation from service that resulted from her was employed as a teacher at the San Pedro
retirement. From 1993 to 1994, Rivera served as a Parochial School during SY ‘80‐‘81 and at the Liceo
personal consultant under contract for UNILAB’s de San Pedro, during SY ’81‐‘82. In ‘82, she applied
sister companies which assigned Rivera to render anew at Sta. Catalina which hired her. On Mar 22,
st
service involving UNILAB. In 1992, the company ‘97, during the 51 Commencement Exercises of
amended its retirement plan, providing, among Sta. Catalina, Hilaria was awarded a Plaque of
others, for an increase in retirement benefits. Appreciation for 30 yrs of service and P12,000 as
Rivera asked that her retirement benefits be gratuity pay. On May 31, ‘97, Hilaria reached the
increased in accordance with the amended compulsory retirement age of 65. Sta. Catalina
retirement program. Whether Rivera is entitled to pegged her retirement benefits at
the additional retirement benefits of the amended P59,038.35. Deducted was the amount of P12,000
retirement plan? representing the gratuity pay which was given to
her.
A: No. Whether these terms included renewed
coverage in the retirement plan is an evidentiary Should the gratuity pay be deducted from the
gap that could have been conclusively shown by retirement benefits?
evidence of deductions of contributions to the plan
after 1988. Two indicators, however, tell us that no A: No. As for the ruling of the CA affirming that of
such coverage took place. The first is that the terms the NLRC that the P12,000 gratuity pay earlier
of the retirement plan, before and after its 1992 awarded to Hilaria should not be deducted from the
amendment, continued to exclude those who have retirement benefits due her, the same is in order.
rendered 30 years of service or have reached 60 Gratuity pay is separate and distinct from
years of age. Therefore, the plan could not have retirement benefits. It is paid purely out of
covered her. The second is the absence of evidence generosity.
of, or of any demand for, any reimbursement of
what Rivera would have paid as contributions to the Q: What is the difference between gratuity pay
plan had her coverage and deductions continued and retirement benefits?
after 1988. Thus, the Court concludes that her
renewed service did not have the benefit of any A:
retirement plan coverage. (Rivera v. United GRATUITY PAY RETIREMENT BENEFITS
Laboratories, Inc., G.R. No. 155639, April 22, 2009) It is paid to the
beneficiary for the past Are intended to help the
Q: Is a special retirement plan different from those services or favor Ee enjoy the remaining
contemplated under the LC as agreed upon by the rendered purely out of years of his life, releasing
parties valid? the generosity of the him from the burden of
giver or grantor. It is not worrying for his financial
A: Yes. A pilot who retires after 20 years of service intended to pay a worker support, and are a form of
or after flying 20,000 hours would still be in the for actual services reward for his loyalty to
prime of his life and at the peak of his career, rendered or for actual the Er. (Sta. Catalina
performance. It is a College and Sr. Loreta
compared to one who retires at the age of 60 years
money benefit or bounty Oranza, vs. NLRC and
old. Based on this peculiar circumstance that PAL
given to the worker, the Hilaria Tercera, G.R. No.
pilots are in, the parties provided for a special purpose of which is to 144483. November 19,
scheme of retirement different from that reward Ee’s who have 2003, J. Carpio‐Morales)
contemplated in the LC. Conversely, the provisions rendered satisfactory
of Art. 287 of the LC could not have contemplated service to the company.
the situation of PAL's pilots. Rather, it was intended
for those who have no more plans of employment
after retirement, and are thus in need of financial b. Retirement pay under RA 7641 vis‐à‐vis retireent
assistance and reward for the years that they have benefits under SSS and GSIS laws
rendered service. (PAL v. Airline Pilots Ass’n of the
Phils., G.R. No. 143686, Jan.15, 2002) Q: What is retirement pay under the LC in relation
to retirement benefits under SSS and GSIS laws?
101

A:
Revised
Employees
Social Government
Compensation
Security Law Service
Act
Insurance Act
Compulsory
upon all E e s
n o t o v e r 6 0 Compulsory for
years of age all permanent
and their Ers. Ees below 60 Compulsory upon
years of age all Ers and their
1.Filipinos upon Ees not over 60
recruited in appointment to years of age;
the Phils. by permanent Provided, that an
foreign ‐ based status, and for Ee who is over 60
Ers for all elective years of age and
employment officials for the paying
abroad may be duration of their contributions to
covered by the tenure. qualify for the
SSS on a retirement or life
voluntary 1. Any person, insurance benefit
basis. whether elected administered by
or appointed, in the System shall
2. the service of an be subject to
Compulsory Er is a covered compulsory
upon all self‐ Ee if he receives coverage.
employed compensation
persons for such service.
earning P1,800
or more per
annum.

Note: The Ees Compensation Commission shall ensure
adequate coverage of Filipino Ees employed abroad,
subject to regulations as it may prescribe. (Art. 170)
Any person compulsorily covered by the GSIS
including the members of the AFP, and any person
employed as casual, emergency, temporary, substitute
or contractual, or any person compulsorily covered by
the SSS are covered by the Ee’s Compensation Program.
(1997 Bar Question)
102
LABOR LAW TEAM:

MANAGEMENT PREROGATIVE
E. MANAGEMENT PREROGATIVE the school's laudable mission which, as

already stated, accords with high
Q: What is Management Prerogative? constitutional precepts. This answer does
not contradict the ruling in Chua‐Qua
A: where the teacher merely fell in love with
GR: It is the right of an Er to regulate, a bachelor student and the teacher, also
according to his own discretion and judgment, single, did not get pregnant out of
all aspects of employment, including: wedlock. (2000 Bar Question)
1. Hiring
2. Work assignments Q: Little Hands Garment Company, an unorganized
3. Working methods manufacturer of children's apparel with around
4. Time, place and manner of work 1,000 workers, suffered losses for the 1st first time
5. Tools to be used in history when its US and European customers
6. Processes to be followed shifted their huge orders to China and Bangladesh.
7. Supervision of workers The management informed its Ees that it could no
8. Working regulations longer afford to provide transportation shuttle
9. Transfer of Ees services. Consequently, it announced that a
10. Work supervision normal fare would be charged depending on the
11. Lay‐off of workers distance traveled by the workers availing of the
12. Discipline service.
13. Dismissal
14. Recall of workers Was the Little Hands Garments Company within its
rights to withdraw this benefit which it had
XPNs: Otherwise limited by special laws. unilaterally been providing to its Ees?

Note: So long as a company’s prerogatives are A: Yes, because this is a management prerogative
exercised in good faith for the advancement of the which is not due any legal or contractual
Er’sinterest and not for the purpose of defeating or obligation. – The facts of the case do not state the
circumventing the rights of the Ees under special laws circumstances through which the shuttle service
or under valid agreements, the Supreme Court will may be considered as a benefit that ripened into a
uphold them. demandable right. There is no showing that the
benefit has been deliberately and consistently
Q: 1. An exclusive school for girls, run by a granted, i.e. with the employer’s full consciousness
religious order, has a policy of not employing that despite its not being bound by law or contract
unwed mothers, women with live‐in partners, and to grant it, it just the same granted the benefit.
lesbians. Is the policy violative of any provision of (2005 Bar Question)
the LC on employment of women?
1.DISCIPLINE
2. The same school dismissed 2 female faculty
members on account of pregnancy out of wedlock. Q: Discuss briefly the Er’s right to discipline his Ees.
Did the school violate any provision of the LC on
employment of women? A: The Er has the prerogative to instill discipline in
his Ees and to impose reasonable penalties,
A: including dismissal, on erring Ees pursuant to
1. No, the policy does not violate the LC. The company rules and regulations. (San Miguel
practice is a valid exercise of management Corporation v. NLRC, G.R. No. 87277, May 12, 1989)
function. Considering the nature and
reason for existence of the school, it may Q: Is the power of the Er to discipline his Ees
adopt such policy as will advance its absolute?
laudable objectives. In fact, the policy
accords with the constitutional precept of A: No. While management has the prerogative to
inculcating ethical and moral values in discipline its Ees and to impose appropriate
schools. The school policy does not penalties on erring workers, pursuant to company
discriminate against women solely on rules and regulations, however, such management
account of sex (Art. 135, LC) nor are the prerogatives must be exercised in good faith for the
acts prohibited under Art. 137 of the LC. advancement of the Er’s interest and not for the
purpose of defeating or circumventing the rights of
2. No, because to tolerate pregnancy out of the Ees under special laws and valid agreements.
wedlock will be a blatant contradiction of
103

(PLDT vs. Teves, G.R. No. 143511, November 10, or a reward, which a person has a right to refuse.
2010) When an Ee refused to accept his promotion, he
was exercising his right and cannot be punished for
Q: May the Er be compelled to share with its Ees it. While it may be true that the right to transfer or
the prerogative of formulating a code of reassign an Ee is an Er’s exclusive right and the
discipline? Is a code of discipline unilaterally prerogative of management, such right is not
formulated by the Er enforceable? absolute. (Dosch vs. NLRC and Northwest Airlines,
G.R. No. 51182, July 5, 1983)
A: The Er has the obligation to share with its Ees its
prerogative of formulating a code of discipline. This Q: Who has the burden of proving that the
is in compliance with the State’s policy stated in transfer was reasonable?
Article 211 of the Labor Code, to ensure the
participation of workers in decision and policy‐ A: The Er must be able to show that the transfer is
making processes affecting their rights, duties and not unreasonable, inconvenient or prejudicial to the
welfare. The exercise of management prerogatives Ee; nor does it involve a demotion in rank or a
has, furthermore, never been considered to be diminution of his salaries, privileges and other
boundless. This obligation is not dispensed with by benefits. Should the Er fail to overcome this burden
a provision in the collective bargaining agreement of proof, the Ee’s transfer shall be tantamount to
recognizing the exclusive right of the Er to make constructive dismissal. (Blue Dairy Corporation v.
and enforce company rules and regulations to carry NLRC, 314 SCRA 401 [1999])
out the functions of management without having to
discuss the same with the union and much less 3.PRODUCTIVITY STANDARD
obtain the latter’s conformity thereto. A code of
discipline unilaterally formulated and promulgated Q: May an Er impose productivity standards for its
by the Er would be unenforceable. (Philippine workers?
Airlines, Inc. vs. NLRC et al., G.R. No. August 13,
1993.) A: Yes. An Er is entitled to impose productivity
standards for its workers, and in fact, non‐
2.TRANSFER OF EMPLOYEES compliance may be visited with a penalty even
more severe than demotion. The practice of a
Q: Discuss briefly the Er’s right to transfer and company in laying off workers because they failed
reassign Ees. to make the work quota has been recognized in this
jurisdiction. Failure to meet the sales quota
A: In the pursuit of its legitimate business interests, assigned to each of them constitute a just cause of
especially during adverse business conditions, their dismissal, regardless of the permanent or
management has the prerogative to transfer or probationary status of their employment. Failure to
assign Ees from one office or area of operation to observe prescribed standards of work, or to fulfill
another provided there is no demotion in rank or reasonable work assignments due to inefficiency
diminution of salary, benefits and other privileges may constitute just cause for dismissal. Such
and the action is not motivated by discrimination, inefficiency is understood to mean failure to attain
bad faith, or effected as a form of punishment or work goals or work quotas, either by failing to
demotion without sufficient cause. This privilege is complete the same within the allotted reasonable
inherent in the right of Ers to control and manage period, or by producing unsatisfactory results. This
their enterprises effectively. management prerogative of requiring standards
may be availed of so long as they are exercised in
Note: The right of Ees to security of tenure does not good faith for the advancement of the Er’s interest.
give them vested rights to their positions to the extent (Leonardo vs. NLRC, G.R. No. 125303, June 16, 2000)
of depriving management of its prerogative to change
their assignments or to transfer them. (Endico v. 4.GRANT OF BONUS
Quantum Foods Distribution Center, G.R. No. 161615,
Jan. 30, 2009) Q: What is a bonus?

Q: May the Er exercise his right to transfer an Ee A: It is an amount granted and paid to an Ee for his
and compel the latter to accept the same if said industry and loyalty which contributed to the
transfer is coupled with or is in the nature of success of the Ers business and made possible the
promotion? realization of profits.

A: No. There is no law that compels an Ee to accept Q: Can bonus be demanded?
promotion, as a promotion is in the nature of a gift
104
LABOR LAW TEAM:

MANAGEMENT PREROGATIVE
of time has been paying his Ees wages due for eight
A: hours work although the work shift less than eight
GR: Bonus is not demandable as a matter of hours (e.g. seven) it cannot later on increase the
right. It is a management prerogative given in working hours without an increase in the pay of the
addition to what is ordinarily received by or employees affected. An Er is not allowed to
strictly due to recipient. (Producers Bank of the withdraw a benefit which he has voluntarily given.
Phil. v. NLRC, G.R. No. 100701, March 28, 2001) An Er is not allowed to withdraw a benefit which he
has voluntarily given.
XPNs: Given for a long period of time
1. Consistent and deliberate – Er continued 6.MARITAL DISCRIMINATION
giving benefit without any condition
imposed for its payment Q: Is a company policy prohibiting marriage
2. Er knew he was not required to give between co‐workers valid?
benefit
3. Nature of benefit is not dependent on A: There must be a finding of a bona fide
profit occupational qualification (BFOQ) to justify an Er’s
4. Made part of the wage or compensation No Spouse Rule. There must be a compelling
agreed and stated in the employment business necessity for which no alternative exists
contract. other than the discriminating practice. (Star Paper
vs. Simbol, G.R. No. 164774, April 12, 2006)
Q: The projected bonus for the Ees of Suerte Co.
was 50% of their monthly compensation. Q: What are the factors that the Er must prove
Unfortunately, due to the slump in the business, inorder to justify BFOQ?
the president reduced the bonus to 5% of their
compensation. Can the company unilaterally A: The Er must prove 2 factors:
reduce the amount of bonus? Explain briefly. 1. That the employment qualification is
reasonably related to the essential
A: Yes. The granting of a bonus is a management operation of the job involved; and
prerogative, something given in addition to what is 2. That there is a factual basis for believing
ordinarily received by or strictly due the recipient. that all or substantially all persons
An Er cannot be forced to distribute bonuses when meeting the qualification would be
it can no longer afford to pay. To hold otherwise unable to properly perform the duties of
would be to penalize the Er for his past generosity. the job. (Star Paper et al. vs. Simbol, G.R.
(Producers Bank of the Phil. v NLRC, G.R. No. No. 164774, April 12, 2006)
100701, March 28, 2001). (2002 Bar Question)
Q: Peds was employed by Glaxo as medical
5.CHANGE OF WORKING HOURS representative who has a policy against Ees having
relationships against competitor’s Ees. Peds
Q: Discuss briefly the Er’s right to change working married Jali, a Branch coordinator of Astra, Glaxo’s
hours. competitor. Peds was transferred to another area.
Peds did not accept such transfer. Is the policy of
A: Well‐settled is the rule that management retains Glaxo valid and reasonable so as to constitute the
the prerogative, whenever exigencies of the service act of Peds as willful disobedience?
so require, to change the working hours of its Ees.
A: The prohibition against personal or marital
Q: May the normal hours fixed in Article 83 be relationships with Ees of competitors‐companies
reduced by the Er? Explain. upon Glaxo’s Ees is reasonable under the
circumstances because relationships of that nature
A: The present article provides that the normal might compromise the interest of the company.
hours of work of an Ee shall not exceed eight (8) Glaxo does not impose an absolute prohibition
hours a day. This implies that the Er, in the exercise against relationships between its Ees and those of
of its management prerogatives, may schedule a competitor companies. Its Ees are free to cultivate
work shift consisting of less than eight hours. And relationships with and marry persons of their own
following the principle of “a fair day’s wage for a choosing. What the company merely seeks to avoid
fair day’s labor”, the Er is not obliged to pay an Ee, is a conflict of interest between the Ee and the
working for less than eight hours a day, the wages company that may arise out of such relationships.
due for eight hours. Nonetheless, if by voluntary Furthermore, the prohibition forms part of the
practice or policy, the Ee for a considerable period employment contract and Peds was aware of such
105

restrictions when he entered into a relationship 3. General principles of fair play and justice

with Jali. (Duncan Association of Detailman‐PTGWO
v. Glaxo Wellcome Phil. Inc., G.R. No. 162994, Sep. Furthermore, a line must be drawn between
17, 2004) management prerogatives regarding business
operations per se and those which affect the rights
7.POST‐EMPLOYMENT BAN of Ees. In treating the latter, management should
see to it that its Ees are at least properly informed
Q: Genesis Fulgencio had been working for of its decisions and modes of actions. So long as a
Solidbank Corporation since 1977. He later on company’s prerogatives are exercised in good faith
applied for retirement. Solidbank required Genesis for the advancement of the Er’sinterest and not for
to sign an undated Undertaking where he the purpose of defeating or circumventing the
promised that "[he] will not seek employment rights of the Ees under special laws or under valid
with a competitor bank or financial institution agreements, the Supreme Court will uphold them.
within one (1) year from February 28, 1995, and (PAL v. NLRC, G.R. No. 85985, Aug. 13, 1993; San
that any breach of the Undertaking or the Miguel Brewery Sales v9. Ople, G.R. No. 53515,
provisions of the Release, Waiver and Quitclaim February 8, 1989)
would entitle Solidbank to a cause of action
against him before the appropriate courts of law.” Note: It must be established that the prerogative being
Equitable Banking Corporation (Equitable) invoked is clearly a managerial one
employed Genesis. Is the post‐retirement
employment ban incorporated in the Undertaking
which Genesis executed upon his retirement is
unreasonable, oppressive, hence, contrary to
public policy?

A: No. There is a distinction between restrictive
covenants barring an Ee to accept a post‐
employment competitive employment or restraint
on trade in employment contracts and restraints on
post‐retirement competitive employment in
pension and retirement plans either incorporated in
employment contracts or in collective bargaining
agreements between the Er and the union of Ees,
or separate from said contracts or collective
bargaining agreements which provide that an Ee
who accepts post retirement competitive
employment will forfeit retirement and other
benefits or will be obliged to restitute the same to
the employer. The strong weight of authority is that
forfeitures for engaging in subsequent competitive
employment included in pension and retirement
plans are valid even though unrestricted in time or
geography. A post‐retirement competitive
employment restriction is designed to protect the
Er against competition by former Ee who may retire
and obtain retirement or pension benefits and, at
the same time, engage in competitive employment.
(Rivera vs. Solidbank, G.R. No. 163269, April 19,
2006)

8.LIMITATIONS IN ITS EXERCISE

Q: Is the exercise of management prerogative
unlimited?

A: No. It is circumscribed by limitations found in:
1. Law,
2. CBA, or
106
LABOR LAW TEAM:

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FUNDAMENTAL PRINCIPLES AND POLICIES

LABOR LAW 3. Social legislation – It includes laws that

rights and benefits as may be provided by provides incentives to needed

adoption by the government of measures A: No, the Constitution provides that the State shall

1. One employed in an agricultural or farm

A: A: The Labor Organization designated or selected

recognized as such. Whether the Union may

B. RECRUITMENT AND PLACEMENT 3. Members of the diplomatic corps (but

A: It is employment of a worker outside the and executory orders within the period of

private recruitment and placement agency, is (b)Illegal Recruitment

dismissal and for payment of his money claims. the POEA or entities authorized by the Secretary of

3. When public welfare so requires. (Sec. 4 3. It has concluded a bilateral agreement or

Art. 25. Private Sector Participation in the Q: Is a corporation, 70% of the authorized and

Recruitment and Employment of Land‐

consultations with the workers and supervisors, a

Note: Where during meal period, the laborers are

and holidays are required for entitlement to Rate of the first 8 hours worked on

when the company's executives using the cars do specific wages per day, without providing

between midnight and 6am of the

2. Fair and reasonable value of board, c.Facilities and Supplements

(c) In cases where the employer is authorized worker concerned (Art. 113). Art. 241(o)

A: A method of minimum wage adjustment (MBTC v NWPC Commission, G.R. NO. 144322, Feb.

A: GR: No. Work on a scheduled + 30% Premium Pay (PP)

to law, morals, good customs, public order or public considered regular holidays. (Presidential

Q: Can a Muslim Ee working outside the Muslim 8.Ee paid fixed amount for performing work

of work interruptions is defeated when a Authorized 300%

practice or policy, or that provided in the the SIL may be on a pro‐rata basis. (No. VI(c), DOLE

b.Maternity Leave said Ee would otherwise have been

Manggagawa sa Honda, G.R. No. 145561, June

Q: What is the no‐spouse employment policy? Glaxo does not impose an absolute prohibition

To justify a BFOQ the employer must prove two 1. With or without compensation

4. Agent of the (Er) segregating or classifying the Ee

9.MINOR WORKERS the conditions provided in

5. Non‐assignment to a work in a

domestic servant may be considered as such an d. Reliefs for Unjust Termination

4. The deduction is made at such rate that

A: There is no Er‐Ee relationship between students Q: How is the principle of Exhaustion of

A: The party terminating shall: A: Only employers in semi‐skilled and other

disability he can still efficiently perform his work, he

Q: May handicapped workers be hired as c.Prohibitions on discrimination against disabled

A: Yes, if their handicap is not such as to effectively Q: What is the prohibition on discrimination

A: Q: What are the incentives provided for employers

the Department of Health as to his disability, skills

2. Private entities that improve or modify their

D. TERMINATION OF EMPLOYMENT suspensions, dismissals and award citations for

2. Voluntary agreement of parties According to Alcira’s computation, since Art. 13 of

Congress of the Phils v. NLRC, G.R. No. 123938, May were directly related to the business of the

or when there would be an unexpected shortage (2)Project Employment

dominance whatever being exercised by Q: Does the “Reasonable Connection Rule” applies

are necessary in the conduct of his Phils., Inc., G.R. No. 179807, July 31, 2009,

1. Sexual harassment 2. The disobeyed orders, regulations or

A: The alleged misconduct of Samson when viewed A: Yes. A rule prohibiting Ees from using company

transportation money or assurance of availability of A: Yes, failure to observe prescribed standards of

officers expelled by the federation for allegedly 9.Analogous Cases

Furthermore, a position is redundant where it is

company from closing shop. In from bankruptcy. (Asian Alcohol Corp. v. NLRC, G.R.

afflicting the employee sought to be dismissed is of Closures or cessation

Q: Anna Ferrer has been working as