LABOR LAW NOTES The congress passed a law requiring all
businesses to set aside 10% of its revenues for the
PART I: LABOR STANDARDS
Labor Standards
- Minimum standards of employment
- Part and parcel of labor laws; other is labor
relations
- ‘what’
Labor Relations
- Mechanism for negotiation, adjusting
benefits, grievances
- Involves processes governing terms and
conditions affecting labor standards
- ‘how’
Employer (Er) and Union had a CBA. Can the
terms and conditions of such be below the
minimum standards of employment, assuming
they agree thereto?
- No, because it contravenes the law although
there was already meeting of the minds
- It is contrary to law. Law has already
provided for standards so you should adhere
to it
Social Legislation
- Piece of legislation intended to benefit
certain sector of the society; broader in
scope than labor law
- Labor law is a social legislation; but social
legislation does not necessarily pertain to
labor laws
- Ex of social legislation is the SSS Act
Aim of Labor Laws
- Social justice (equalization)
govt’s program for the indigents. Is it consistent
with social justice?
- No. May business na malakas, may hindi,
and may nalulugi
Social Justice
- Equalization of opportunities
- Equality among equals – equal protection of
law
Equal Protection
1. Same class with substantial distinction
2. Germane to the purpose of law
3. Must apply to future conditions
4. Must apply to those in the same class
Int’l School vs Quisumbing
- Conflict between foreign hired teacher and
local hired teachers
- Foreign teachers are paid 25% higher than
the locally hired teachers so the latter
questioned it; foreigners have higher base
pay, benefits, allowances
- Rule: Violation of equal protection clause
because there is no substantial distinction.
They are both competent and have the same
work.
Is it possible that a new joiner come in with
terms and conditions better than those already
employe
d for 5 or 10 years?
- Yes it is part of mgmt. prerogative
- If you want to hire, offer something
competitive. Pay market level or even higher
Job Evaluation
 - Evaluation of different job levels
- How? Criteria that mgmt. deemed it
proper (point rating)
- Example of criteria: education, years of
experience, responsibility for people,
responsibility for funds, responsibility for
company property, exposure to elements of
environment
- Job evaluation is based on the nature of the
job
- Look at the job itself, regardless of the
person and in relation to other jobs in the
company
- Point rating then to be tallied
Performance Evaluation
- how people perform their work
- Job evaluation is different from performance
evaluation
Management Prerogative
- To be valid the following must concur:
1. Legitimate business reason
2. Exercise in good faith
3. Must be communicated amply to the
employees
Basis of Labor Laws
- Police power of the state
- Requisites for valid exercise of police power
1. There must be lawful subject (interest of
the public which warrants the exercise of
police power)
2. Lawful means (the means employed
must be proportionate)
PASEI vs Drilon
- Petitioners challenged the validity of the law
regarding deployment ban
- SC upheld the validity of D.O. No. 1
because it is a valid exercise of police power
References to a Labor Question
1. Constitution
2. Labor code
3. Civil code
4. Jurisprudence (Art.8)
5. Special laws (ex: magna carta…)
6. Revised penal code
7. CBA
8. Employment contract
9. Employer practice
10. Intl Agreements (ILO)
Labor Code
- General law
- All labor laws are codified here
- Took effect November 1, 1974
CBA
- Contract as long as it does not contravene
any law, moral, customs, and public policy.
ILO
- Phils is a signatory
- Doctrine of incorporation
Employer Practice
- Rule of thumb in the length of practice is
based on the INTENT of the employer
- Intent is determine based on the
contemporaneous act of the er prior or after
certain measure
Construction of Labor Law
- Rule: Leaning towards labor in case of
doubt.
- Rationale: there is inherent inequality in
terms of economic aspect and to level the
playing field
- If law is clear or there is no doubt, apply the
rule as it is; apply in its plain sense
Sosito vs Aguinaldo Devt Corp
- You are not to resolve the case in favor of
Sosito just bcoz he is the employee (ee)
accdg to the SC. Not always in favor of
labor. It must be ruled on the merits
- Here, the program apply only on the ees on
active duties; Sosito is on indefinite leave’
that’s why he is not qualified to the
retrenchment program
REMEDY/RECOURSE:
1. Terms and Conditions Fixed by Law –
lobby to the Congress; non-negotiable;
not subject of CBA; needs congressional
act; Salary Standardization Law
2. Terms and Conditions Not Fixed by
Law – can negotiate with govt agency;
CBA

c. Right to Strike
Rules and Regulations o SSS Case
o They are prohibited.
- Details of law that congress has no line of o Recourse (EO No. 180): go to Public
sight
Sector Labor Management Council
- Does the sec of labor has the power to
(PSLMC) to raise their grievances
promulgate rules and regulations in
implementation of labor laws? Is it not an
undue delegation of power?
o Yes. Sec of Labor has such power. Principle of Tripartism
The rule making authority of the sec 1. Government
of labor is explicitly provided in the 2. Er Sector for policy formulation
labor code 3. Ee Sector and adjudication

Application of Labor Code to Govt Employees Jurisdiction over Labor Dispute

- Govt agencies that existed by virtue of: - NLRC

1. Corporation Code
o covered by the Labor Code and all of
its provisions
2. GOCC w/ Original Charter or formed
under the General Corporation Law
o covered by the Civil Service Law
On the part of adjudication, where do you find it
in the principle of tripartism
- Bcoz there are representatives of NLRC in
Er and Ee sector

Government Employees Rights of Labor Rights of Mgmt

a. Right to organize Due process Hire/Select
o Yes, they can. Freedom of
Prescribe rules
b. Right to Collective Bargaining Association/Org
o Yes they can but those terms and Right against
conditions which are legislated involuntary Return on Investment
cannot be the subject of bargain; but servitude/slavery
all those terms and conditions which Right to collective
Dismiss/Terminate
are not legislated can be the subject bargaining and nego
Right to peaceful
of CBA Expansion and growth
concerted activities
 Living wage
Humane conditions of
Transfer ees
work
Security of tenure
Sec. 1 of the Bill of Rights
- Right to life, liberty and property
- These rights are inherent
- The constitution merely recognizes,
guarantees and ensures these rights. The
constitution does not grant these
Among these rights, which is the basis of the
rights of labor and mgmt?
- Right to Property bcoz rights of labor and
mgmt. as property rights can be used in
whatever way they want
Social Equilibrium
- Balance between exercise of rights of labor
and rights of mgmt.
- But we actually have constant clash that’s
why we have labor laws
Benefits of Harmonious Labor – Mgmt Relations
- From macro perspective – economic devt
Basic Principles
- Employer (er): who employs the services of
other for a fee
- Employee (ee): person who renders services
to another for a fee
Independent Contractor
- Not under the control of principal
- Separate and distinct from principal
- Performed work (work contracted by
principal) according to his own means and
methods
- As to how the work is done: the
independent contractor determines it
- As to the result of work: the principal has
hand on it
- Independent contractor has substantial
capital and carries work according to his
own means and methods
- Parties in Independent Contractor:
1. Independent contractor
2. Principal
3. Workforce of the independent contractor
Tabas vs NLRC
- Livi supplied manpower to do promo merch
- Workers performed work under supervision
and control of CMC
- There was termination
- Accdg to CMC, there is no eer as provided
under the agreement
- SC held that CMC is the er of the promo
merch. It involves labor only contracting.
Livi has no substantial capital + the work is
directly related to the business of the
principal. More importantly, CMC exercises
power of control.
Four Fold Test
1. Selection and engagement of ee
2. Payment of wages
3. Power of dismissal
4. Power of control (most impt)
DO 18-A
- You can outsource regular jobs by a
contractor. If you do so, the er is the
contractor
DO 1 series of 2017
- BPO is outside the coverage of Art. 106
-109 pero kahit ipasok sila under 106-109,
they will still be held as legitimate job
contracting
 - Situation: A foreign company will tap on a
BPO (Accenture/Convergys), then the latter
will employ workers. The contract is
between Accenture and the workers. Power
of control is exercised by the Accenture not
the foreign company. Accenture bills the
foreign company for the services they
rendered. Foreign company only has hand
on the result of the services. If there are
mistakes on the work, foreign company will
go to Accenture.
Employee
- Hired by er and who renders services for
compensation [under the supervision and
control of the er not only as to the result of
the work but also the methods by which the
work is to be accomplished
Employer
- Who hires an ee for compensation and
exercises supervision and control over the ee
not only as to the result of the work but also
the methods by which the work is to be
accomplished
Note: use four fold test to define er and ee
P C
E -
Concern of Principal
- Result of the work to be done
Concern of Contractor
- Means and method
Doctrines affecting Insurance (Case of Insular,
Grepalife, and Tongko)
- 2 KINDS OF INSURANCE AGENT
1. Salaried Insurance Agent
2. Registered Representative Insurance
Agent
Tongko Case
- Insurance agent like Tongko is an ee of
Manulife
- SC reversed its first decision
- There are memorandum written by Pres to
Tongko bearing his performance as
insurance agent (memo indicated power of
control)
- 1st decision: There is control
- 2nd decision upon MR: highly regulated
business ang insurance companies. Hindi
porket may power of control may EER na.
Two Tiered Test/ Economic Dependence Test
(Case of Sevilla and Francisco)
1. Putative power of control
2. Underlying economic realities
Two Tiered Test
- Entered into the picture bcoz power of
control is not a conclusive test to determine
EER
- “The benefit or damnification you suffered
by the avails of the business”
Francisco Case
There is EER applying the two tiered test;
has been in the company for considerable
period of time; no work other than the work
in said company
Power of Control over Means and Methods
- Control contemplated under four fold test
DO 18-A
- Regular jobs may be outsourced to be done
by 3rd party
Is classification of employees (project, seasonal,
regular, etc) useful to determine EER?
- No. It should not be used to determine EER.
Use only the four fold test or the two tiered
test as yardstick to determine EER.
Who has the burden to prove that there is no
illegal dismissal?
- Employer
Who has the burden of proof to establish EER?
- Employee
Maraguinot vs NLRC
- They are ees of viva films not of the
associate producers
- They have become regular ees; they are
continuously hired for the same undertaking;
they are exclusively hired by viva
Alcatel vs Relos
- Not continuous hiring
- If they are not hired, pwede sila mahire sa
iba or mag-side line
- They are hired for project (there must be a
beginning and an end date for the
undertaking that is not necessarily part of
the business; the undertaking must be
identifiable and segregable.)
- SC ruled that this is a legitimate project
based employment
Labor Organization
- Can be an er if they hire ee
Labor law does not only apply to EER. It may also
apply to illegal recruitment, mishandling of POEA
license, liability of contractor, among others.
Consequence of Labor Only Contracting
- As if the labor only contractor is the agent
of the principal
Consequence of Job Contracting
- Job contractor has control on how work is to
be done
- Extent of liability of principal to the
employees:
o SOLIDARY LIABILITY with the
contractor in so far as payment of
wages is concerned (limited to the
work for which the contractor is
engaged and limited to the time that
the contractor rendered his services)
o Outside wages = principal has no
liability
Sonza vs ABSCBN
- SC: not ee of ABSCBN. Sonza is an
independent talent. There is no power of
control
Dumpit-Murillo Case, Fuji TV vs Espiritu, and
Behino vs ABSCBN
- They are ees of their respective ers. There is
power of control. There is EER
How relevant is mode of compensation
(boundary-hulog, piece rate, etc) in determining
EER?
- Irrelevant; not determinative of EER.
Right to Hire
- This is not absolute. There are limitations
under the law
Stipulation against Marriage
- You cannot establish as condition for
employment
Minimum Age
- Secure permit
- Working hours
o Below 15 – 4 hrs a day/ 20 hrs in a
week
o 15 to less than 18 – 8hrs a day/ 40hrs
in a week
- Income: all for the needs of the child; 20%
to the family
- Trust fund: 30% or at least 200,000;
however, if it is below 200k, there must be
an account
- Not for hazardous works; not for alcoholic
beverages
Anti-Sexual Harassment Law
- Applies both for men and women; if used
for favorable terms and conditions of
employment or for promotion
- Protect dignity of an individual
- Moral ascendency and influence over
another; there must be sexual favor
- Note:
o Domingo vs Ayala
o Aquino vs Acosta
All Offices must have this:
1. Sexual harassment guidelines/policy – to
tackle issue on sexual harassment
2. Sexual harassment committee – they will
hear the case in the said organization
Graceful exit from employment is a management
prerogative
Philippine Aids Prevention Control
- No discrimination for those afflicted with
AIDS or HIV
- Prescription of law on AIDS Confidentiality:
the results of the HIV test should not be
divulged
- May an er require an ee to submit herself
to HIV test?
o No, it is prohibited by law. It cannot
require.
- May an ee voluntarily test for HIV?
o Yes
- Drug test may be required but not the HIV
testing.
Magna Carta for Disabled Person
- G.R. there should be no discrimination for
disabled persons; meaning, it cannot be a
ground to deny employment
- XPN: if it impairs the business
General Banking Law
- Bcoz of Bank Secrecy, cannot hire casual
ees or too lengthy probationary ees
- Limitation: You can hire them but not to
assign them at length; for temporary period
of time only
Prescription on Equality of Age
- RA 10911
- Not to discriminate based on age. If age is
not relevant, don’t discriminate
RA 9547
- Employ out of school youth
- SPES but not mandatory
Visitorial and Enforcement Power (VEP)
 - Enforce compliance to labor standards matters outside VEP = take out the
pursuant to Art. 128 jurisdiction from SOLE and vest jurisdiction
- Situation contemplated in VEP: there may to NLRC
be complaint. SOLE and his reps will go to
the establishment to inspect to determine if Article 128
there is violation. If meron, SOLE will - Visit > findings > order of compliance
direct them to comply. If there is - If there is compliance
compliance, okay na. If there is no o It will benefit all ees covered na
compliance, there is liability. dapat nakaenjoy ng benefit
- If there is no compliance
o Writ of execution may be ordered or
How does Art. 128 differ from Art. 129 pag wala parin compliance, suspend
the operation of the company or
Article 128 Article 129 Double Indemnity Rule (pay twice
Any violation Money claims the amount of unpaid benefit aside
With or without There must be
from imprisonment and fine)
complaint complaint
- Compromise may be entered by the er and
ee as long as not contrary to law, morals
Rationale: It must be
done as a matter of and public policy
duty. It is an integral
function of DOLE to
determine na What if there is partial compliance, may writ of
nagcocomply sa labor execution be issued?
standards. It is the
primary function of - Yes and the amount of liability is double the
DOLE indemnity of the unpaid balance
There is no There is jurisdictional
jurisdictional limit limit of 5,000
EER must exists EER may or may not Article 129
exist
Appeal to SOLE then Appeal to NLRC then - Covers also claims of domestic helper not
to CA to CA exceeding 5,000 and without claim for
There may be There is no claim for reinstatement
challenged on EER reinstatement

SOLE may rule on If there is a claim for Form or Mode of Compliance/ Mechanisms to
issue of EER. If there is reinstatement, NLRC Ensure Compliance with Minimum Standards of
EER, jurisdiction is na hindi na Regional Employment
retained with SOLE. If Director
none, jurisdiction 1. Joint assessment (joint effort of DOLE and
should be with the the establishment)
NLRC. (Ruling in 2. Inspection (wait for the inspection)
Bombo overturned in 3. Occupational Health and Safety Standards
Jethro)

Bay Haven vs Abuan Certificate of Compliance

- If 1) issue not to be resolved in the course of - Has lifetime (yearly)

- It is given is upon compliance
inspection; or 2) there are evidentiary
Wage
- Remuneration for manual labor
Salary
- Remuneration for higher position
Pedro availed of company loan. Pedro resigned.
May the company automatically recover from
Pedro upon resignation? Can it deduct? Pwede
ba ihold whatever Pedro is entitled to get?
- Milan vs NLRC
Training bond given to ee. Ee left the company.
- Er can deduct from the claims the expenses
of the training because training is an
investment.
Asawa ng isang executive sumakabilang bahay.
Pumunta asawa kay Pres ng company sabi wala
na siyang nakukuhang financial support.
Hinihingi na ibawas sa sahod ni executive yung
support. What if sabihin ni wife may petition for
support na sila. Tinanong ni wife sahod ni
husband.
- You cannot yield to the request of the wife.
Don’t disclose it UNLESS there is COURT
ORDER to disclose or allocate it
There is overpayment of salary. Nagkamali
payroll ng pagcompute ng salary. Nakaaffect sa
ibang ees. 50 ees are overpaid.
- Payment by mistake – unjust enrichment
- Debt becomes due upon demand
- Make first a demand. Give chance to ee to
return the amount. If the ee did not pay,
deduct in the next payroll
Gaa vs CA
- Bldg. administrator; there’s judgment debt
and there is order of garnishment
- Accdg to Gaa, her salary cannot be attached
- SC: wages and salary are different. Here,
Gaa is not performing manual labor. Her
salaries are subject to execution. Not under
art.1708
Milan vs NLRC
- Solid Mills gave Milan et al housing. Solid
Mills bumagsak negosyo. Sabi nila
babayaran nila ees provided they will settle
their acct with the company. Milan et al
ayaw umalis sa pabahay. Solid Mills then
hold their claims and benefits. SC ruled in
favor of Solid Mills. They can withhold the
claims of Milan et all pending yung
pagbalik ng bahay. Pwede ideduct yung
debt.
- What if walang agreement?
o er can make demand bcoz debt
becomes due and demandable upon
demand. Para kapag di binigay ni
ees, pwede niya mahold claims
o withholding of wages cannot be done
by er except debt due
Art. 1708
- G.R: wage cannot be withheld or executed
or garnished
- XPN: when there’s a debt due (it becomes
due upon demand)
Facilities
- Wage deductible
- For laborers and their families
existence/subsistence
Supplements RA 6727 created RTWPB and NWPC
- Extra remuneration - Minimum wage: REGIONALIZED
o because living conditions are
different
Requisites for Facilities o bawal fit-size fits all
o it also takes into acct policy
1. Customarily given directions of the govt through NEDA
2. Consent of ee in writing
3. Reasonable value
Issue Wage Order
Funeral parlor business. You must have people - Wage Board
to pick up the cadaver. They live in quarters - Need not be approved by WC pero dapat
provided by business para pag anytime na magconfirm sa guidelines ng WC
kailangan - Can there be an appeal?
o Yes to the WC
- QUARTERS = supplement; granted for the
benefit of the er; this is not deductible
There is wage order issued by the Board.

Restaurant business. Waiters. One of them live - IRR = issued by WB subject to review by
as one group. Some of them requested the er to WC and approval by SOLE
live sa tabi ng restaurant para on time lagi. The - Review by WC = to determine if in
er granted it pinagbabayad sila 500. accordance with the guidelines

- QUARTERS = facilities; for the benefit of

ee If not contented with appeal in WC
- Appeal to CA via petition for certiorari
May the equivalent amount of the quarters be - Not to SOLE, bcoz SOLE is already part of
taken in order to be compliant with minimum WC. SOLE is the head
wage requirement?
- Yes. May WB do a review even in the absence of
- Minimum wage + amount of facility will be petition? Motu proprio review?
the wage of such person.
- Yes, but usually with petition

Minimum wage
Frequency
- Agencies:
1. RTWPB – Wage Board - 12 months no wage order
2. NWPC – Wage Commission - XPN: supervening conditions/event in case
a. SOLE of extraordinary inflation
b. NEDA – to take policy directions of
the govt
3. Congress – created Board & XPN to Minimum Wage Order
Commission by virtue of RA 6727
- Board subject to review by Commission
Before Wage Order is release 2. Non-unionized
- Mandatory to have public hearings and NCMB SENA NLRC
consultations
In Wage Distortion, which levels are affected?
- Rank and file perhaps upto supervisors bcoz
RULE: It is not necessarily required to restore
they are usually receiving minimum wage
historical gap. Significant gap is sufficient. Ensure
that there will still be sufficient distinction between
two levels
3Ps (Sound Management Compensation
Principle)
1. Pay for position Non-Compliance with Wage Order
2. Pay for performance
3. Pay for person - Liability:
1. Double Indemnity
2. Imprisonment and/or fine aside from
double indemnity
What if there is increase by virtue of
performance in managerial level or in
supervisory level?
Case of Prubankers
- There is no wage distortion.
- Wage distortion is attendant upon - Regionalized; consider the living conditions
implementation of WAGE ORDER only

If contraction is by reason other than wage order,

What if because of wage order dumikit rank and it is not wage distortion
file sa supervisors, when do you consider wage
distortion as correctible?
- No pay of higher rank
- Case of Metrobank: only significant gap
shall be restored. There must be significant
contraction

How to Correct Wage Distortion

1. Unionized (with CBA)
Grievance machinery Voluntary Arbitration
(mandatory provision (may also be provided
In the CBA. If none, in the CBA.
the CBA will not be Independent 3rd
registered by the DOLE) person)