Amdg

Labor II
Atty Cadiz
Hodgepodge Doctrines from 2009-2011 cases
 When the employer believes that the union is no longer the rightful representative of the employees
because more than 90% of the workers left and formed another union, the employer is not guilty of
ULP for not negotiating with the former union.
o It just wanted to foster industrial peace by bowing to the wishes of the overwhelming majority
of its rank and file workers and by negotiating and concluding in good faith a CBA with CABELA
(union 2). Such actions of CAB are nowhere tantamount to anti-unionism, the evil sought to be
punished in cases of unfair labor practices. (Central Azucarera de Bais Employees Union)
 It is no longer necessary to file a petition to declare a strike illegal if the union officers refused to follow
the orders of the Secretary of Labor who has assumed jurisdiction. (Bagong Pagkakaisa ng
Manggagawa)
o The use of unlawful means in the course of a strike renders such strike illegal. Filing of a
petition to declare the strike illegal is unnecessary. (Jackbuilt v Jackbuilt EU, wherein a prior
decision of the NLRC already found that strikers did illegal acts. Hence, it would seem that a
prior decision of the NLRC that illegal acts were committed is still necessary)
o Shouting slanderous and scurrilous words against the owners, using obsence language to
prevent other laborers to go to work, using abusive language against the patrons of the
establishment, and shaking their fists and threatening non-striking employees with bodily harm
have been considered as illegal acts. (A Soriano)
 Art 264 does not require the employer to immediately report the illegal acts.
 The Labor Secretary can resolve a bargaining deadlock by granting a wage increase if it was based on
the prevailing economic indicators in the workplace, in the industry, and in local and regional economy;
it can also look at the regional financial crisis and the downturn of the economy, which all impact the
performance of the company. (Bagong Pagkakaisa)
 When employees of a bank are absorbed by another bank pursuant to the Articles and Plan of Merger
and the absorbing bank’s union has a union shop clause, the absorbed employees are deemed ‘new’
employees for purposes of the union shop clause. Hence, they have to join the union as a condition of
their continued employment. (BPI v BPI Employees Union Davao, take note that the employees here
were absorbed because of the Articles and Plan of Merger, and not automatically.)
 For purposes of membership in the bargaining unit, confidential employees are defined as those who
(1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations.  
o The two (2) criteria are cumulative, and both must be met if an employee is to be considered a
confidential employee – that is, the confidential relationship must exist between the employee
and his supervisor, and the supervisor must handle the prescribed responsibilities relating to
labor relations.
o The exclusion from bargaining units of employees who, in the normal course of their duties,
become aware of management policies relating to labor relations is a principal objective sought
to be accomplished by the “confidential employee rule.”
o There is no showing in this case that the secretaries/clerks and checkers assisted or acted in a
confidential capacity to managerial employees and obtained confidential information relating to
labor relations policies.  And even assuming that they had exposure to internal business
operations of the company, respondent claimed, this is not per se ground for their exclusion in
the bargaining unit of the daily-paid rank-and-file employees. (Tunay na Pagkakaisa ng
Manggagawa Sa Asia Brewery)
 For Atty. Cadiz, it is enough that the employees process ‘confidential inofromation’, no
need to assist in labor relations stuff.
 It is within management prerogative to implement job evaluation which will streamline company’s
operations and to place its employees in their proper positions.
o It does not guarantee any adjustment in the salaries of the employees; the promotions being
mere changes in nomenclature. (SCA Hygiene Products v SCA, wherein the employees still
occupied the same positions without any additional duties and responsibilities after the job
evaluation)
 For company practices to be considered regular, they must have been done over a long period of time
and must be shown to be consistent and deliberate.
 A company is not guilty of ULP when it suspends negotiations because of valid reasons – like when it
temporarily shuts down because of its failure to procure an Environment Compliance Certificate.
(Manila Mining Corp EA-FFW v Manila Mining)
 When the exclusive bargaining agent and a contending union are battling it out, and the employer
decides to place union dues in a trust account and deals with the splinter group, the LA has jurisdiction

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over the ULP case between the exclusive bargaining agent and the employer because the issue is the
act of the employer.
o However, the LA will not have jurisdiction between the dispute between the exclusive
bargaining agent and the contending union since it’s an intra-union dispute.
o An intra-union dispute refers to any conflict between and among union members, including
grievances arising from any violation of the rights and conditions of membership, violation of or
disagreement over any provision of the union’s constitution and by-laws, or disputes arising
from chartering or disaffiliation of the union.
o In this case, the employer was guilty of ULP for dealing with splinter group. (Compare this with
Central Azucarera – there, the splinter group had 90% of the support, here only 147/257
employees supported the splinter group)
o For a ULP case to be cognizable by the Labor Arbiter, and for the NLRC to exercise appellate
jurisdiction thereon, the allegations in the complaint must show prima facie the concurrence of
two things, namely: (1) gross violation of the CBA; and (2) the violation pertains to the
economic provisions of the CBA.
 This, however, should not be construed to apply to violations of the CBA which can be
considered as gross violations per se, such as utter disregard of the very existence of
the CBA itself, similar to what happened in this case. When an employer proceeds to
negotiate with a splinter union despite the existence of its valid CBA with the duly
certified and exclusive bargaining agent, the former indubitably abandons its
recognition of the latter and terminates the entire CBA. (Employee’s Union of Bayer v
Bayer and Remigio)
 A strike may be valid at the start, but become illegal once strikers commit illegal acts during the strike.
(Phimco Industries Inc. v Phimco Industries Labor Association).
o But remember, the dismissal of the erring strikers must still follow due process, lest the
employer be held liable for nominal damages.
 The corporate veil may be pierced only when the separate juridical personality is used to defeat public
convenience, justify wrong, protect fraud or defend crime.
o Control by the mother company by itself does not mean that the subsidiary is an alter ego.
(NASECO v National Service Corporation, wherein the security guards wanted the mother
corporation to pay for the CBA benefits of the subsidiary)
o Mere fact that a corporation owns all of the stocks of another company, taken alone, is not
sufficient to justify their being treated as one entity. (PEA-PTGWO v NLRC)
 Employees dismissed for joining an illegal strike are not entitled to backwages for the period of the
strike even if they are reinstated by virtue of their being merely members of the striking union who did
not commit any illegal act during the strike. (Escario v NLRC 2010)
 Will strikers be entitled to backwages?
o In economic strikes, no. No work, no pay.
o In ULP strikes, it depends.
 For those members who were terminated because of ULP, yes, from the time of their
illegal dismissal.
 For those members who struck because of ULP, no.
o If the laborer was able, willing and ready to work but was illegally locked out, he will be
granted backwages. But the strike must be legal, to begin with, and the lock out illegal.
(Solidbank v Solidbank EU)
 Only a certified or duly recognized bargaining agent may file a notice or request for preventive
mediation. That’s the EBR or the employer for ULP/deadlock cases, and a LLO (where there is no EBR)
but only for ULP cases.
o Hence, individual members and federations have no authority to file a notice for mediation.
(Insular Hotel EU-NFL v Waterfront)
 The Secretary of Labor may award wage increases higher than that provided for in a MOA which was
entered into by the employer and employee in a CBA dispute. The SOLE may resolve all issues involved
in the controversy including the award of wage increases and benefits. (Cirtek EU-FFW v Cirtek)
 Protesting outside the office of the SOLE, after he has assumed jurisdiction over a case, is considered
as an illegal strike.
o In the case of Solidbank v Gamier, the Court said that the comparison with the Philippine
Blooming Mills case could not be done, as there was a labor dispute in the instant case, as
compared to none in the latter case.

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 Employer just can’t dismiss all union members. It must distinguish between union officers and mere
members.
 And as we all know, the liability for the prohibited acts have to be determined on an
individual basis. (A Soriano)
 GR: The SOLE does not have jurisdiction over appeals to the BLR from the Regional Directors in
petitions for cancellations of registration.
o Exception: When the BLR director inhibits himself. In this instance, the SOLE can assume
jurisdiction over the case because she merely steps into the shoes of the BLR Director under
her power to supervise and control (Admin Code.)
 The DOLE Secretary's act of taking over the function of the BLR Director was warranted
and necessitated by the latter's inhibition from the case and the objective to "maintain
the integrity of the decision, as well as the Bureau itself (Grand Plaza Hotel Corporation
v National Union of Workers Blah Blah Blah)
 While the parties may agree to extend the CBA’s original 5-year term together will all other CBA
provisions, any such amdendment or term in excess of 5 years will not carry with it a change in the
union’s exclusive collective bargaining status.
o The exclusive bargaining status cannot go beyond 5 years and the representation status is a
legal matter not for the workplace parties to agree upon. Hence, even if the CBA is extended,
the exclusive bargaining status is effective only for 5 years and can be challenged during the
freedom period. (FVC Labor Union v Sama-Samang Nagkaka…)
 The forwarders’ employees (employees who were part of entities used in contracting out by the
employer) are not part of the bargaining unit because they are not part of the company, and hence
cannot be placed under the union. (Temic v Temic Union)
 Voluntary arbiters do not have jurisdiction over 3rd persons. (Temic)
 Where a union believes that an employer committed ULP and the surrounding circumstances warranted
such belief in good faith, the resulting strike may be considered legal although, subsequently, such
allegations of unfair labor practices were found to be groundless. (Good faith strike! Hotel Enterprises v
Samahan)
 All rank and file employees in the appropriate bargaining unit, whether probationary or permanent are
entitled to vote.
o Even a CBA can not override this. (National Union of Workers in Hotels v Secretary)
 The period of reckoning in determining who shall be included in the list of eligible voters is, in cases
where timely appeal has been filed from the Order of the Med-Arbiter, the date when the Order of the
Secretary, whether affirming or denying the appeal, becomes final and executory – which is 10 days
from receipts thereof by the parties. (National Union v Secretary)
 Two-fold objective of the double majority rule – determine the appropriate bargaining unit, and to
ascertain the majority representation of the bargaining representative, if the employees desire to be
represented at all by anyone. (National Union)
 The individual acceptance of a union’s members of an award (and the resulting payment by the
employer thereof) does not operate as a ratification of an appealed decision, nor is it a waiver to
receive further benefits, or what they may be entitled to under the law. (UST v Samahan Manggagawa)
o A labor union exists for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment. What the individuals may not do alone, the
labor organization can accomplish better.
 A signing bonus is a grantmotivated by the goodwill generated when a CBA is successfully negotiated
and signed between the employer and union.
o The award of a signing bonus is not proper when no CBA was successfully negotiated by the
parties. (UST)
 Where the purported withdrawal of support for the registration of the union was made after the
documents were submitted to the DOLE, the logical conclusion is that the employees were not totally
free from the employer’s pressure, and so the voluntariness of the employees’ execution of the
affidavits becomes suspect. (Mariwasa v DOLE, where the affidavits were all pro forma)
 The 20% requirement for union registration need not be maintained all throughout its existence.
(Mariwasa)
 An assumption order is executory even while it is being questioned. (YSS Employees Union)
o It operates to readmit all workers under the same terms and conditions prevailing before the
strike or lockout.
o Hence, the employer’s insistence on the exclusion of the employees from the coverage of the
return-to-work order seriously impairs the authority of the Secretary of Labor to forestall a
labor dispute that he deems inimical to the national economy.

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o It does not interfere with management prerogative, it merely regulates them for the national
interest.
 In the grant of vacation leave privileges to an employee, the employer is given the leeway to impose
conditions on the entitlement to and commutation of the same, as the grant of vacation leave is not a
standard of law, but a prerogative of management.
o Thus, management has the authority to impose certain conditions on it. It can even compel its
employees to exhaust all their vacation leave credits. (PNCC Skyway v PNCC, wherein the CBA
gave power to the management to schedule the leaves of the employees, taking into
consideration their preference)
 Bonus is a gratuity or act of liberality of the giver. It is granted and paid to an employee for his
industry and loyalty which contributed to the success of the employer’s business and made possible the
realization of profits.
o For it to be enforceable, it must have been promised by the employer and expressly agreed
upon by the parties.
o So if it’s in the CBA, it becomes a contractual obligation. Thus business losses are a feeble
ground to repudiate (or as Sarah Palin would say, refudiate) its obligation under the CBA.
(Lepanto v Lepanto)

BOOK SIX
 
POST EMPLOYMENT
 
Title I
TERMINATION OF EMPLOYMENT
 
ART. 278. Coverage. - The provisions of this Title shall apply to all establishments or undertakings, whether for profit or
not.
ART. 279. Security of tenure. - In cases of regular employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. (As amended by Section 34, Republic Act No. 6715, March
21, 1989).
 Security of tenure means the right not to be removed form one’s job except for a valid reason and
through proper procedure.
 Even managerial employees are entitled to security of tenure.
 Art. 279 mandates the employer not to terminate the services of an employee except for a cause or as
authorized by law.
 Even if the article states ‘regular’, this is not the case. Even non-regular employees (like fixed-period
employees) have security of tenure.
o Even a probationary employee cannot be discharged without valid case.
o Hence, the simple rule is this: the dismissal of any employee requires a valid, legal cause.

ART. 280. Regular and casual employment. - The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or where the work or service
to be performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That
any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall continue
while such activity exists.
 The law provides for 2 kinds of regular employees:
o Those engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, and
o Those who have rendered at least on year of service, continuous or broken, with respect to the
activity in which they are employed.
 So regular status arises from either the
o Nature of the work of the employee, or
o Duration of his employment

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 Employment is “temporary” where
o it has been fixed for a specific undertaking, the completion or termination of which has been
determined at the time of the engagement (Project employees); or
o where the work or service to be performed is seasonal in nature and the employment is for the
duration of the season. (Seasonal workers)
 Primary standard in determining regular employment: reasonable connection between the particular
activity performed by the employee in relation to the usual business or trade of the employer.
o Is the former usually necessary or desirable in the usual business or trade of the employer?
o Consider the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety.
 Also, if the employee has been performing the job for at least 1 year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and continuing need for its performance
as sufficient evidence of the necessity, if not indispensability, of that activity to the business.
 But keep in mind, that in this case, the employment is considered regular, but only
with respect to such activity and while such activity exists.
 Project employment
o A project employee is one whose employment has been
 Fixed for a specific project of undertaking
 The completion of which has been determined at the time of the engagement of
the employee
o Project employment is coterminous with the project for which the employee was hired.
 It may be terminated when the project ends or is completed. It exists for a definite,
predefined period.
 Compare this to regular or permanent employment, which continues until it is
terminated by one or another of the recognized causes in the Code. Regular
employment exists for an indefinite length of time.
 Hence, the difference is the period of existence, not as to whether the project is
integral to the employer’s business.
o That said, there are two kinds of projects:
 First, a particular job or undertaking that is within the regular or usual business of the
employer, but which is distinct and identifiable as such, from the other undertakings of
the company.
 Second, a particular job or undertaking that is not within the regular business of the
corporation, separate and distinct from the regular business operations of the
employer.
 In both cases, the project begins and ends at determined or determinable
times.
o Since the services of project employees are coterminous with the project, the employer has no
obligation to pay them separation pay.
o Contract workers are not regular employees. But can they become regular employees? Yes, in
the instances below.
 When the employment of project employees is extended long after the supposed
project has been finished, they become regular.
 And when the following concur:
 Continuous rehiring of project employees even after the cessation of a project,
and
 The tasks performed by the alleged ‘project employee’ are vital, necessary, and
indispensable to the usual business or trade of the employer.
 Note: length of term is not a controlling test for project employment, but it can be a
factor in determining whether the employee was hired for a specific undertaking which
are vital, necessary and indispensable to the usual business or trade of the employer.
 The length of time during which the employee was continuously rehired is not
controlling, but merely serves are a badge of regular employment.
o Members of a work pool from which a construction company draws its project employees, if
considered employee of the construction company while in the work pool, are nonproject
employees or employees for an indefinite period.
 Seasonal employment
o A worker is “seasonal” if employment is only for the duration of one season.

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o A seasonal worker becomes regular if he becomes employed in doing the same task for several
years or for more than one season.
 Hence, when the company is sold and the regular seasonal workers are terminated,
they are entitled to separation pay.
 Casual employment
o Employment is casual when it is irregular, unpredictable, sporadic and brief in nature, and
outside the usual business of the employer.
 It’s not permanent nor periodically regular, but occasional or by chance.
o A casual employee is casual only for one year.
 If he has worked for at least one year (continuously or not), he becomes a regular
employee.
 It is not the nature of his work, but the passage of time that gives a regular status.
 But, you must remember that he is being regular attaches only for the
particular activity that he was doing when still a casual.
o Despite the distinction between casual and regular, the IRR of the Labor Code states that
“every employee shall be entitled to the rights and privileges, and be subject to the duties and
obligations, as may be granted by law to regular employees during the period of their actual
employment.”
 Fixed period employment
o Fixed period employment lasts only for a definite period, as agreed by the parties.
o It’s not illegal nor is it against public policy.
o The decisive determinant in term employment is the day certain agreed upon by the parties for
the commencement and termination of their employment relationship, a day certain being
understood to be that which must necessarily come, although it may not be known when.
(Price v Innodata)
o For it to be valid, it should be shown that:
 the fixed period was knowingly and voluntarily agreed upon by the parties (no force,
duress, intimidation),
 the employer and employee should have dealt with each other on more or less equal
terms with no moral dominance being exercised by the employer over the employee,
and
 it must not be resorted to preclude acquisition of tenurial security.
 For example, the Purefoods policy of rehiring workers by batch every 5 months
has been held to be against public policy.
o Fixed period employment can even be for jobs necessary or desirable to the employer’s
business, as long as the requisites have been followed.
o In Price, the Supreme Court has stated several circumstances wherein a fixed-term is an
essential and natural appurtenance:
 OFWs
 the positions of dean, assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by practice or tradition
rotated among the faculty members
 certain company officials who may be elected for what would amount to fixed periods,
at the expiration of which they would have to stand down
 seafarers (below)
o An acting appointment, however, is revocable at will.
 Seafarers
o Seafarers are contractual employees, and governed by the POEA Standard Employment
Contract.
o Their employment terminates when the contract expires.
 When it expires, they are not entitled to separation pay.

ART. 281. Probationary employment. - Probationary employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services
of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to
qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at
the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a
regular employee.

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 The purpose: for the employer to determine whether the employee is qualified for permanent
employment
 In all cases involving employees engaged on probationary basis, the employer shall make known to the
employee at the time he is hired the standards by which he will qualify as a regular employee.
o Failure to qualify with the reasonable standards is a just cause for termination.
 But substantive and due process must still be observed.
o If no documentary evidence shows that the employee is probationary, he is regular.
 During the probationary period, the probationary employee can’t be removed except for cause. He still
enjoys security of tenure.
o But if there is cause, he may be removed, even before the period expries.
o Three limitations to terminating a probationary employee:
 Must accord with the requirements of the contract
 Dissatisfaction is real and in good faith (not to circumvent the law or contract)
 No unlawful discrimination against the employee
 GR: period is limited to six months
o EX: agree upon by parties, such as when the long probation is justified by the nature of the
work to be performed
 Basis for exception: management prerogative
o The employer and employee can extend the period beyond 6 months to give the employee a
second chance to pass the probation standards. It must be agreed upon by both parties.
 But double (or multiple) probation is not allowed.
 Like when an employee has OJT for 3 weeks, then hired on probation for
another 6 months. The Court will consider the OJT as part of the probationary
period, thus making the employee regular upon the 6 month in the work place.
 6 months means 180 days, not ‘6 calendar months’
 For private school teachers, their probation period is 3 consecutive years.

Overview on just and authorized causes

Just Causes (282) Authorized Causes (283/284)
Faults and misdeeds of employee Business and economic reasons
No separation pay, except out of compassion Required by law to pay separation pay (except in
closure or cessation of business due to serious
business losses duly proved)
Due process: notice (twin) and hearing Due process: notices to employee and dole (no
hearing needed)
Effectivity of termination date determined by Termination takes effect at least 30 days after the
employer notice
Eow powz. Hello po.

ART. 282. Termination by employer. - An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in
connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of
his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
 Serious misconduct
o Transgression of some established and definite rule of action
o Implies wrongful intent and not mere error in judgment. Hence, an act done thoughtlessly or
inadvertenly is not serious misconduct.
o Misconduct must
 be serious, i.e. of a grave and aggravated character, not merely trivial, and
 connected with the work of the employee
o Sexual harassment is considered as serious misconduct.
 Willful disobedience
o The orders which were disobeyed must be:
 Reasonable and lawful,
 Sufficiently known to the employee, and

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 In connection with the duties which the employee has been engaged to discharge.
o The disobedience must relate to substantial matters, not merely to trivial or unimportant
matters.
o An employee should obey an employer’s order transferring him from one job assignment or
location to another. But it must be:
 reasonable and lawful, and
 not also result in demotion in rank or diminution in pay.
 If the transfer order does not have the requisites, it may be considered as
constructive dismissal.
 Inconvenience to the employee does not justify disobedience to the transfer
order.
 Gross and habitual neglect of duties
o GR: The neglect must be both gross and habitual.
 Hence, a single or isolated act of negligence does not constitute a just cause for the
dismissal of the employee.
 EXCEPT: when the neglect was so substantial to cause considerable damage to the
employer, it does not need to be habitual
 See LBC v Mateo (2009), where the Supreme Court stated that the habitual
aspect could be dispensed with, considering that the employee lost an entire
motorcycle.)
 See also Holy Spirit v Taguiam (2008), where the Supreme Court also stated
that the habitual aspect could be dispensed with, considering that a grade 5
student drowned because of the gross neglect of the teacher
 And if you want, see also PAL v NLRC (1991), where the habitual aspect was
again dispensed with, because the neglect of the employee caused in the plane
hitting the airport
o Gross neglect means an absence of that diligence that an ordinarily prudent man would use..
o The employee does not have to have incurred damaged by reason of the conduct. It is
sufficient that the gross and habitual neglect tends to prejudice the employer’s interest since it
would be unreasonable to require the employer to wait until he has been materially injured.
o Failure to observe reasonable work standards due to inefficiency may constitute just case for
dismissal.
 Atty. Cadiz said that poor performance can be considered gross and habitual neglect of
duties.
o Abandonment is a form of neglect of duty, and must have the following requisites:
 Failure to report for work without valid or justifiable reason
 Clear intention to sever the ER-EE relationship (important!)
 Hence, filing for a case for illegal dismissal is a manifestation of the second
requisite, especially when the employee asks for separation pay, and not
reinstatement.
 But when the employees ask for reinstatement, there is no abandonment.
(Rosa v Ambassador)
 Fraud
o Fraud: act, omission, or concealment which involves a breach of legal duty, trust, or confidence
justly reposed, and injurious to another
o Requisites to be a just cause:
 Committed against the employer or representative, and
 In connection with the employee’s work.
 So fraud committed against a third person not in connection with work and
does not in any way involve the employer cannot fall within this ground.
 Loss of confidence
o Loss of confidence applies only to cases of employees who occupy positions of trust and
confidence, or those situations where the employee is routinely charged with care and custody
of the employer’s money or property
o Basis: employee holds a position of trust and confidence
 Hence, it has been held to apply to:
 Cashiers, managers, supervisors, salesmen, assistant cook who’s in charge of
food preparation and release of food supplies
 And not applicable to:

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 Rank-and-file workers like electricians and operators of equipment, janitors
 In these cases, mere accusations are not enough.
o But either way, to be a valid ground for dismissal, it must be:
 Based on a willful breach of trust (must be substantial), and
 Found on clearly established or proven facts
 Commission of a crime or offense
o Conviction is not necessary.
o Immediate members of the family are: the spouse, ascendants, descendants, legitimate
siblings, by affinity, by consanguinity by the 4th degree
o An employee may be acquitted in a criminal case and yet his dismissal may remain.
 This also applies to other cases (like theft of a co-worker’s personal belongings), not
necessarily a crime committed to the employer.
 Analogous causes
o Must still be due to the willful act or omission of the employee.
o A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting
to an employee's moral depravity. Theft committed by an employee against a person other
than his employer, if proven by substantial evidence, is a cause analogous to serious
misconduct. (Hancock Insurance v Davis 2008, wherein an employee was rightfully dismissed
for stealing the credit card of her co-employee and using it.)
 Drug use
o Ground for suspension and termination (random drug testing)
 HIV/AIDS
o Not a ground for suspension and termination (testing cannot be done without employee’s
consent)

 Due process in Just Causes

o It is not enough that you have just cause to dismiss an employee. You must still observe due
process. Hence, you need:
 Two notices
 One charging the employee of the particular acts or omissions which may cause
his dismissal
 Subsequent notice which informs the employee of the employer’s decision
 Hearing, or an opportunity for the employee to be heard
 Due process in authorized causes
o Written notices to both the worker and DOLE 30 days before projected separation
 So, you’ve dismissed an employee upon VALID CAUSE, but didn’t follow DUE PROCESS, what’s to
happen? (Agabon and JAKA)
o Based on just cause: dismissal remains; but employer will be hit with tempered sanctions in
the form of damages, because the dismissal was, in effect, initiated by an act imputable to the
employee. No backwages to the employee.
o Based on authorized cause: dismissal remains; but the employer will be hit with stiffer
sanctions because the dismissal was initiated by the employer’s exercise of his management
prerogative.

 Preventive suspension is justified when the employee’s continued employment poses a serious and
imminent threat to the life or property of the employer of the co-workers.
o Max period: 30 days
 Beyond this, the employee becomes entitled to his pay and benefits. (Constructive
dismissal sets in)

 The appropriate penalty does not have to be dismissal.

o The appropriateness depends not only on the lightness of the gravity of the offense but also on
other factors such as the employer’s toleration of past offenses, the employee’s years of
service and clean record, and even the amount of money involved.
o In SMC v Friend (2009), the Supreme Court did not allow SMC to fire Friend who was falsifying
certain documents against company rules. The reasons: his record was previously clean, no
showing that Friend benefited, nor any showing that SMC was damaged.
o Dismissal is the supreme penalty, and if it is at all avoidable, without oppressing the employer,
it should be avoided.

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o In Sagales v Rustan’s, the chief cook was caught taking out a bag of squid heads without
paying, the Court said dismissal was too harsh. The penalty must be commensurate with the
act, conduct, omission imputed to the employee and must be imposed in connection with the
disciplinary authority of the employer.
 It is lawful for a company’s code to impose the penalty of restitution or forfeiture of benefits, apart
from other penalties, to an employee who causes loss or damages to the employer.
 Demotion is also allowed as a penalty – but must be justified by facts and evidence, and with the
observance of due process.
o An employee can be demoted because of failure to meet reasonable quotas. But he must first
be given an opportunity to refute the employer’s ground for demotion.

 Constructive dismissal
o An unwarranted transfer or demotion of an employee, or other unjustified action prejudicial to
the employee may give rise to a complaint for constructive dismissal.
o It refers to an involuntary resignation resorted to:
 when continued work becomes impossible, unreasonable or unlikely,
 because of demotion in rank or a diminution in pay (which has no basis, since
demotions seem to be allowed)
 when a clear discrimination or disdain by an employer becomes unbearable to an
employee,
 because an employee is changed regular to casual,
 because of reduction of work days, the reasons for which were not specifically
explained and which was applied only to union officers (it’s a ULP too!), or when done
because the employees complained to DOLE because of the standards of the premises
where they worked in (Rosa v Ambassador Hotel)
 when an employee is given ‘floating status’ beyond 6 months.
 When an employee is forced to surrender his position through the employer’s unfair or
unreasonable acts (Siemens v Domingo, wherein the employee resigned because his
original salary as a consultant was P370k, and he was asked to work thereafter under
an incentive scheme where his sales package was a sad 20% of his original
compensation)
o A constructively dismissed employee is entitled to:
 Reinstatement, or separation pay (1 month per year of service) if reinstatement is no
longer viable, and
 Backwages (from the time his constructive dismissal took effect until finality of
decision)

 In the interest of compassion and social justice, separation pay (or financial assistance) may still be
required in instances where the employee is validly dismissed for causes other than serious misconduct
or those reflecting on the employee’s moral character.
o If the reason does not relate to the employee’s moral character and due consideration is to be
given to the employee’s long years of service, his age or economic straits, then financial
assistance will be appropriate.
 Hence, when an employee reads a confidential letter of the employer, threatens to sue
him if not paid P2m and refuses to cooperate with investigations, she is arrogant,
uncompromising and hostile; thus, not qualified for separation pay (or financial
assistance) even if she has served the company for quite a while. (Tirazona v PET)
o But this separation pay as financial assistance in dismissal for cause should not be mistaken for
the separation pay required in cases of termination due to authorized causes in 283 and 284.
Nor is it the same separation pay in lieu of reinstatement of an employee who was illegally
dismissed.

ART. 283. Closure of establishment and reduction of personnel. - The employer may also terminate the employment of
any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing
or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least
one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month
pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent

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losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one
(1) whole year.
 Articles 283 and 284 talk of ‘authorized causes’
 Again, these authorized causes involve measures taken by the employer because of business
exigencies (except disease).
 Take note that the due process requirements and separation pay requirements are requisites.
 Automation or installation of labor saving devices
o Reduction of workers by introduction of machinery is justified
o Management can resort to labor-saving devices to effect more economy and efficiency in its
method of production
o Due process (DP): written notice to worker and DOLE 1 month before
o Separation pay (SP): at least 1 month pay, or at least 1 month pay for every year of service,
whichever is higher
 Redundancy
o Exists where the services of an employee are in excess of what is reasonably demanded by the
actual requirements of the enterprise
o Position is redundant when it is superfluous
o Superfluity may be the outcome of overhiring, decreased volume of business, or dropping of a
particular line or service activity previously manufactured
o Requisites are:
 Good faith in abolishing the redundant position
 Fair and reasonable criteria in ascertaining what positions are to be declared redundant
o DP: written notice to worker and DOLE 1 month before
o SP: at least 1 month pay, or at least 1 month pay for every year of service, whichever is
higher.
o Employer has no legal obligation to keep in its payroll more employees than are necessary for
the operation of its business
 But management must show adequate proof that the abolished positions were
unnecessary. Not enough for a company to merely declare that it has become over-
manned.
o An employer has a much wider discretion in terminating the employment of managerial
personnel as compared to rank-and-file employees.
 Reason: officers in such key positions perform not only functions which by nature
require the employer’s full trust and confidence but also functions that spell the success
or failure of a business (Lowe, Inc v Mutuc, wherein Mutuc was a creative director and
Lowe had to implement cost-cutting measures which included a redundancy program)
o Recognized criteria in implementing a redundancy program: preferred status, efficiency, and
seniority.
o Contracting out is allowed even in retrenchment and redundancy if done in good faith.
 An employee’s good faith in implementing a redundancy program is not necessarily
destroyed by availment of the services of an independent contractor to replace the
services of the terminated employees. (Hotel Enterprises v Samahan ng Hyatt-National
Union)
 Retrenchment to prevent losses
o Retrenchment must be to prevent losses and such losses must be proven.
o Requisites are:
 Losses expected should be substantial and not merely de minimis in extent
 Substantial loss apprehended must be reasonably imminent, and such imminence can
be perceived objectively and in good faith by the employer
 The retrenchment must be reasonably necessary and likely to effectively prevent the
expected losses
 Employer should have taken other measures prior or parallel to the
retrenchment to forestall losses
 The alleged losses if already realized, and the expected imminent losses sought to be
forestalled, must be proven by sufficient and convincing evidence

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 Must be proved by financial statements duly audited by an independent
external auditor (not a hard and fast rule, as the Court must not accept the
contents of the documents blindly and without thinking, see p. 340 of the book)
 In Bio Quest, the a Statement of Profit and Loss which did not bear the
signature of a CPA, nor any showing that it was audited by an independent
auditor is nothing but self-serving document which is a mere scrap of paper.
o Sliding incomes or decreasing gross revenues alone do not necessarily indicate losses within
the meaning of this article, for in the nature of things, the possibility of incurring losses is
constantly present in business operations. (Bio Quest v Rey, wherein 2 consecutive years of
losses were held to be not enough)
 To consider every loss incurred or expected to be incurred by a company as
justification of retrenchment would be susceptible to abuse by scheming employers.
o DP: written notice to worker and DOLE 1 month before
o SP: at least 1 month pay, or at least 1/2 month pay for every year of service, whichever is
higher.
o If the ground for retrenchment is not proved, then it is declared illegal and of no effect.
 Even if the retrench employee had signed quitclaims or accepted retrenchment pay,
these do not amount to estoppel and it does not bar him from contesting his
separation.
 The illegally retrenched employee is entitled to reinstatement but it reinstatement is
not feasible (like where the employee asks for separation pay instead), then separation
pay in lieu of reinstatement may be awarded for one month’s pay for every year of
service (note that it’s one month pay, not ½ month pay in this case.) and backwages
because the dismissal was illegal.
o In retrenching, there must be fair and reasonable criteria to be used in selecting employees to
be dismissed – like less preferred status, efficiency rating, and status.
 The management has the right to choose who to lay off, depending on the work still
required to be done and the qualities of the workers to be retained.
 But the employer may not totally disregard seniority.
 The observance of the LIFO rule is not a statutory duty of the employer – it will yield to
management prerogatives, unless a CBA provision states otherwise.
 A CBA’s provisions must be read together. Hence, when a section states that
seniority is a consideration in lay-offs, and another section states that the
“needs of the company, attitude, etc” will be put in consideration, these
provisions must be put into consideration.
 All other things being equal, a company would necessarily need to retain those
who had rendered dedicated and highly efficient service and whose knowledge,
attendance and potential hew with company standards. (Mendros v MMPC)
 Closure or cessation
o Generally, businesses close either
 because of serious business decline and loss, or
 because the owner wants to close it down in good faith.
o In both cases, the DP requirement of written notice to the worker and DOLE 1 month before
cessation will apply. (codal)
 Hence, when the notice was sent only to the employees on the day itself, and no notice
was given to DOLE, the employer must pay nominal damages, even if the cessation
was done in good faith. It was also ordered to pay separation pay, as the closure was
not due to losses. (Industrial Timber v Abadon, wherein the plant closed due to lack of
raw materials and failure to renew a lease contract and certificate with the
government. It actually gave shut down notices beforehand but they were merely
temporary as the company assured the employees that they could return to work.)
o When the closure is due to serious business decline and losses, SP is not required. (nalugi na
eh, papabayad mo pa.)
o But when the closure is not due to serious business decline and losses, SP of at least 1 month
pay, or at least 1/2 month pay for every year of service, whichever is higher, must be paid.
o Again, these business losses must be proved.
o If an employer has to cease operation because of compulsory acquisition by the government of
its land for purposes of agrarian reform, he is not liable to pay separation pay to its affected
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o Relocating the business to place to which the employees cannot or do not want to transfer may
be considered a cessation of business not on account of serious business losses. In that case,
separation pay must be given.
o There is no law which requires the purchaser to absorb the employees of the selling
corporation.
 The most the purchasing company may do is to give preference to the qualified
separated employees of the selling company who in its judgment are necessary in the
continued operation of the business establishment – out of public policy and social
justice.
 The selling corporation must still pay the separation pay to its employees.
 But this must be done in good faith.
 If in bad faith, both parties are liable to the employees.
 If the notice to the workers was given later than the notice sent to DOLE, the date of termination
should be at least one month from the date of notice to the workers.
 Mergers
o In mergers, the GR is that since an employment contract is in personam and binding only
between the parties, there is no duty to keep the workers because the transferee is an entirely
new corporation with a distinct personality from the integrating firms.
 This rule does not apply when the transferee is found to be merely an ALTER EGO of
the different merging firms, as in the case of Filipinas Port.

ART. 284. Disease as ground for termination. - An employer may terminate the services of an employee who has been
found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his
health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one
(1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least
six (6) months being considered as one (1) whole year.
 To terminate based on disease, the following must concur:
o The employee has been found to be suffering from a disease
o His continued employment is prohibited by law or prejudicial to his health as well as to the
health of co-employees
o Certification by a competent public health authority that the disease is such that cannot be
cured within 6 months even with proper medical treatments
 A company’s own physician not a ‘competent public authority’
 SP: at least 1 month pay, or at least 1/2 month pay for every year of service, whichever is higher.

Consequences of termination and Reinstatement

 Normally, an employee who has been illegally dismissed is entitled to:
o reinstatement to his former position without loss of seniority rights (or separation pay if
reinstatement isn’t possible), and
o the payment of full backwages.
 Reinstatement restores the employee who was unjustly dismissed to the position from which he was
removed.
 Backwages allows the same employee to recover from the employer the wages he lost because of the
dismissal.
o The backwages to be awarded should not be diminished or reduced by the earnings derived by
the employee during the period of his illegal dismissal.
 The full backwages without deductions serve as part of the price or penalty the
employer must pay for illegally dismissing the employee.
o Backwages include the whole amount of salaries plus all other benefits and allowances if
regularly given.
 It does not include salary increases.
 In Equitable v Sadac, the Court held that although the law expressly includes
allowances and benefits as part of the computation of backwages, general
salary increases, being different from allowances and benefit, should not be
included. The Court said that salary increases are increments to a person’s
salary and form part of it once granted, while allowances and benefits are
separate from a person’s salary and are usually granted only in addition
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 If the allowance is temporarily received, such allowance may not be included in
computing the separation pay. It must be regular.
o Generally, an order of reinstatement carries with it an award of backwages, the Court may not
only mitigate, but also absolve the employer from liability for backwages where good faith is
evident.
o Moreover, the appellate court may also award backwages to an employee who did not appeal
the failure of the NLRC to grant him backwages.
o No backwages in valid terminations without due process!
o Recomputation of backwages and separation pay (or an original computation, if none was
initially made) is part of Article 279 and jurisprudence.
 It does not constitute an alteration or amendement of the final decision being
implemented. (Session Delights Ice Cream v CA)
o In computing, follow the following rules (Session Delights):
 For backwages: from the date the employer illegally dismissed the employee up to the
date of the finality of the court’s decision
 For separation pay (if in lieu of reinstatement): from the first day of employment up to
the finality of the court’s decision, at the rate of one month per year of service
 For legal interest: 12% per annum of the total monetary awards computed from the
finality of the court’s decision up to payment
 These two forms of relief are distinct and separate.
o Hence, there may be reinstatement without backwages, or backwages without reinstatement.
 But, either requires a finding of illegal dismissal. (?)
 Strained relations, however, may bar reinstatement.
o When the relationship between the employee and employer has been severely strained by
reason of their respective imputations of bad faith against each other, the Court will no longer
reinstatement as it would not serve any prudent purpose.
o The Court will order backwages and separation pay (instead of reinstatement).
o For strained relations to apply, it should be proved that the employee concerned occupies a
position where he enjoys the trust and confidence of the employer, and that it is likely that if
reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely
affect the efficiency and productivity of the employee concerned.
 The decision of the LA reinstating a dismissed employee is immediately executory even while the case
is brought up on appeal.
o Like we studied earlier, the employer is given the option to have the employee work again or
merely reinstate him to the payroll.
o A reinstatement order is effective and should be complied with even without a writ of
execution.
 If during the illegal dismissal complaint case was pending, the employer had to resort to retrenchment
due to losses adequately proven, the employee need not be reinstated. He should be paid full
backwages and separation pay instead.
 If the reinstated employee loses in appeal, the employee need not reimburse the salary he received
during the pendency of the appeal.
 Moral damages are recoverable in dismissal cases only where it is attended by bad faith, fraud, or
constituted an act oppressive to labor, or done contrary to morals, etc.
 Exemplary damages may be awarded if it was effected in a wanton, oppressive or malevolent manner.
 As a general rule, company officials cannot be held personally liable for damages for an employee’s
illegal dismissal.
o But like we’ve learned, this corporate veil may be pierced if shown that the officers deliberately
or maliciously designed to evade the financial obligations of the corporation to its employees,
or they indiscriminately stopped its business to perpetrate an illegal act, as a vehicle for the
evasion of existing obligations.

ART. 285. Termination by employee. - (a) An employee may terminate without just cause the employee-employer
relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom
no such notice was served may hold the employee liable for damages.
(b) An employee may put an end to the relationship without serving any notice on the employer for any of the following
just causes:
1. Serious insult by the employer or his representative on the honor and person of the employee;
2. Inhuman and unbearable treatment accorded the employee by the employer or his representative;

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3. Commission of a crime or offense by the employer or his representative against the person of the employee or any of
the immediate members of his family; and
4. Other causes analogous to any of the foregoing.
 If the employee terminates without cause, the employee’s notice must be given 1 month in advance.
o Or else he may be held liable for damages.
 If it is with cause, there’s no need to serve any notice.
 Resignation is withdrawable even if the employee has called it ‘irrevocable’
o But once accepted by the employer, its withdrawal needs the employer’s consent.

ART. 286. When employment not deemed terminated. - The bona-fide suspension of the operation of a business or
undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall
not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without
loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of
operations of his employer or from his relief from the military or civic duty.
 A bona fide suspension of the operation of a business for a period not exceeding 6 months does not
terminate employment and no notice of termination need be given to the employee or to DOLE.
 After 6 months, the employees should either be
o Recalled to work, or
o Permanently retrenched following the requirements of law
 If the ‘floating status’ of the employees lasts more than 6 months, they may be considered to have
been constructively dismissed from the service.
 An employee on military duty is entitled to salary.

Title II
RETIREMENT FROM THE SERVICE
 
ART. 287. Retirement. - Any employee may be retired upon reaching the retirement age established in the collective
bargaining agreement or other applicable employment contract.
In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under
existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employee’s
retirement benefits under any collective bargaining and other agreements shall not be less than those provided therein.
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment,
an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby
declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and
shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction
of at least six (6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term ‘one-half (1/2) month salary’ shall mean fifteen (15) days
plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service
incentive leaves.
Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers
are exempted from the coverage of this provision.
Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code.
 The retirement pay under this article is apart from the retirement benefit claimable by the qualified
employee under the social security law.
 Take note of the difference in age retirement of employees with underground mining employees.
 Also take note of those who are exempted from the coverage of the provision. (Clue: read codal)
 As long as they’ve been working for at least 5 years in the said establishment, retirees get:
o ½ month pay for every year of service.
o ½ month means “15 days plus 1/12 of the 13 th month pay and the cash equivalent of not more
than 5 days of service incentive leaves.
 A compulsory retirement age below 60 is allowed if freely agreed on by the parties in a CBA.
 A CBA may also validly stipulate that the employer has the option to retire an employee who has
reached a specified age or a retirement criterion. When such option is exercised, there is no need to
consult the employee.
 A restriction in a private retirement plan will not prevent the employee from retiring optionally at 65.
 Retirement carries with it certain legal effects, one of which is the retired employee’s termination of the
services with the company as of the retirement date. (Rivera v United Lab)
o If the employee works again, she will be covered by the contract between her and the
employer, and not the retirement plan which she had before her first retirement.

BOOK SEVEN

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TRANSITORY
AND FINAL PROVISIONS
 
Title I
PENAL PROVISIONS AND LIABILITIES
 
ART. 288. Penalties. - Except as otherwise provided in this Code, or unless the acts complained of hinge on a question of
interpretation or implementation of ambiguous provisions of an existing collective bargaining agreement, any violation of
the provisions of this Code declared to be unlawful or penal in nature shall be punished with a fine of not less than One
Thousand Pesos (P1,000.00) nor more than Ten Thousand Pesos (P10,000.00) or imprisonment of not less than three
months nor more than three years, or both such fine and imprisonment at the discretion of the court. 
In addition to such penalty, any alien found guilty shall be summarily deported upon completion of service of sentence.
Any provision of law to the contrary notwithstanding, any criminal offense punished in this Code, shall be under the
concurrent jurisdiction of the Municipal or City Courts and the Courts of First Instance. (As amended by Section 3, Batas
Pambansa Bilang 70).
ART. 289. Who are liable when committed by other than natural person. - If the offense is committed by a corporation,
trust, firm, partnership, association or any other entity, the penalty shall be imposed upon the guilty officer or officers of
such corporation, trust, firm, partnership, association or entity.

Title II
PRESCRIPTION OF OFFENSES AND CLAIMS
 
ART. 290. Offenses. - Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall
prescribe in three (3) years.
All unfair labor practice arising from Book V shall be filed with the appropriate agency within one (1) year from accrual of
such unfair labor practice; otherwise, they shall be forever barred.

ART. 291. Money claims. - All money claims arising from employer-employee relations accruing during the effectivity of
this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever
barred.
All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities established
under this Code within one (1) year from the date of effectivity, and shall be processed or determined in accordance
with the implementing rules and regulations of the Code; otherwise, they shall be forever barred.
Workmen’s compensation claims accruing prior to the effectivity of this Code and during the period from November 1,
1974 up to December 31, 1974, shall be filed with the appropriate regional offices of the Department of Labor not later
than March 31, 1975; otherwise, they shall forever be barred. The claims shall be processed and adjudicated in
accordance with the law and rules at the time their causes of action accrued.

ART. 292. Institution of money claims. - Money claims specified in the immediately preceding Article shall be filed before
the appropriate entity independently of the criminal action that may be instituted in the proper courts.
Pending the final determination of the merits of money claims filed with the appropriate entity, no civil action arising
from the same cause of action shall be filed with any court. This provision shall not apply to employees compensation
case which shall be processed and determined strictly in accordance with the pertinent provisions of this Code.
 The Code has no specific provision on when a monetary claim accrues, thus, the general law on
prescription, the Civil Code, applies, i.e. the day the action may be brought is the day a claim started
as a legal possibility.
o Also, the rules on interruptions apply as well. Hence, when there is a written extrajudicial
demand or a written acknowledgement of the debt by the debtor, the period will be
interrupted. (Rivera v United Lab)
 GR for MONEY CLAIMS: File within 3 years.
o EX: When promissory estoppel applies. Requisites are:
 A promise was reasonably expected to induce action or forbearance
 Such promise did in fact induce such action or forebearance
 Party suffered detriment as a result (ASI v Alabanza, wherein the family of the
employee were promised that hey would be paid immediately after other claims would
have been paid out.)
 For ILLEGAL DISMISSAL: 4 years

Title III
TRANSITORY AND FINAL PROVISIONS
ART. 293. Application of law enacted prior to this Code. - All actions or claims accruing prior to the effectivity of this
Code shall be determined in accordance with the laws in force at the time of their accrual.

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ART. 294. Secretary of Labor to initiate integration of maternity leave benefits. - Within six (6) months after this Code
takes effect, the Secretary of Labor shall initiate such measures as may be necessary for the integration of maternity
leave benefits into the Social Security System, in the case of private employment, and the Government Service
Insurance System, in the case of public employment.

ART. 295. Funding of the Overseas Employment Development Board and the National Seamen’s Board referred to in
Articles 17 and 20, respectively, of this Code shall initially be funded out of the unprogrammed fund of the Department
of Labor and the National Manpower and Youth Council.

ART. 296. Termination of the workmen’s compensation program. - The Bureau of Workmen’s Compensation, Workmen’s
Compensation Commission, and Workmen’s Compensation Units in the regional offices of the Department of Labor shall
continue to exercise the functions and the respective jurisdictions over workmen’s compensation cases vested upon
them by Act No. 3428, as amended, otherwise known as the Workmen’s Compensation Act until March 31, 1976.
Likewise, the term of office of incumbent members of the Workmen’s Compensation Commission, including its Chairman
and any commissioner deemed retired as of December 31, 1975, as well as the present employees and officials of the
Bureau of Workmen’s Compensation, Workmen’s Compensation Commission and the Workmen’s Compensation Units
shall continue up to that date. Thereafter, said offices shall be considered abolished and all officials and personnel
thereof shall be transferred to and mandatorily absorbed by the Department of Labor, subject to Presidential Decree No.
6, Letters of Instructions Nos. 14 and 14-A and the Civil Service Law and rules. chanroblesvirtuallawlibrary
Such amount as may be necessary to cover the operational expenses of the Bureau of Workmen’s Compensation and
the Workmen’s Compensation Units, including the salaries of incumbent personnel for the period up to March 31, 1976
shall be appropriated from the unprogrammed funds of the Department of Labor.

ART. 297. Continuation of insurance policies and indemnity bonds. - All workmen’s compensation insurance policies and
indemnity bonds for self-insured employers existing upon the effectivity of this Code shall remain in force and effect until
the expiration dates of such policies or the lapse of the period of such bonds, as the case may be, but in no case beyond
December 31, 1974. Claims may be filed against the insurance carriers and/or self-insured employers for causes of
action which accrued during the existence of said policies or authority to self-insure.

ART. 298. Abolition of the Court of Industrial Relations and the National Labor Relations Commission. - The Court of
Industrial Relations and the National Labor Relations Commission established under Presidential Decree No. 21 are
hereby abolished. All unexpended funds, properties, equipment and records of the Court of Industrial Relations, and
such of its personnel as may be necessary, are hereby transferred to the Commission and to its regional branches. All
unexpended funds, properties and equipment of the National Labor Relations Commission established under Presidential
Decree No. 21 are transferred to the Bureau of Labor Relations. Personnel not absorbed by or transferred to the
Commission shall enjoy benefits granted under existing laws.

ART. 299. Disposition of pending cases. - All cases pending before the Court of Industrial Relations and the National
Labor Relations Commission established under Presidential Decree No. 21 on the date of effectivity of this Code shall be
transferred to and processed by the corresponding labor relations divisions or the National Labor Relations Commission
created under this Code having cognizance of the same in accordance with the procedure laid down herein and its
implementing rules and regulations. Cases on labor relations on appeal with the Secretary of Labor or the Office of the
President of the Philippines as of the date of effectivity of this Code shall remain under their respective jurisdictions and
shall be decided in accordance with the rules and regulations in force at the time of appeal.
All workmen’s compensation cases pending before the Workmen’s Compensation Units in the regional offices of the
Department of Labor and those pending before the Workmen’s Compensation Commission as of March 31, 1975, shall
be processed and adjudicated in accordance with the law, rules and procedure existing prior to the effectivity of the
Employees Compensation and State Insurance Fund. chanroblesvirtuallawlibrary

ART. 300. Personnel whose services are terminated. - Personnel of agencies or any of their subordinate units whose
services are terminated as a result of the implementation of this Code shall enjoy the rights and protection provided in
Sections 5 and 6 of Republic Act numbered fifty-four hundred and thirty five and such other pertinent laws, rules and
regulations. In any case, no lay-off shall be effected until funds to cover the gratuity and/or retirement benefits of those
laid off are duly certified as available.

ART. 301. Separability provisions. - If any provision or part of this Code, or the application thereof to any person or
circumstance, is held invalid, the remainder of this code, or the application of such provision or part to other persons or
circumstances, shall not be affected thereby.

ART. 302. Repealing clause. - All labor laws not adopted as part of this Code either directly or by reference are hereby
repealed. All provisions of existing laws, orders, decrees, rules and regulations inconsistent herewith are likewise
repealed. chanroblesvirtuallawlibrary

Done in the City of Manila, this 1st day of May in the year of our Lord, nineteen hundred and seventy four.
 
(Sgd.) FERDINAND E. MARCOS
President, Republic of the Philippines

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