I.

FUNDAMENTAL PRINCIPLES
A. Legal basis
1. 1987 Constitution

2. · Civil Code
 
What are examples of labor cases where Article 1700 of the Civil Code was applied?
Article 1700 of the Civil Code provides:
“Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest
that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar
subjects.”
•
 
  How is Article 1702 of the Civil Code correlated with Article 4 of the Labor Code?
Both Article 1702 of the Civil Code and Article 4 of the Labor Code speak of the rule on interpretation
and construction provisions of law and labor contracts. Article 1702 of the Civil Code provides:
“Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent
living for the laborer.”
Article 4 of the Labor Code states:
“Article 4. Construction in Favor of Labor. – All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor.” Both articles above may be applied to doubts and ambiguities in (1) labor
contracts such as an employment contract or a CBA; (2) evidence presented in labor cases.

3. Labor Code
• What are the distinctions between Labor Relations and Labor Standards?
“Labor standards law” is that part of labor law which prescribes the minimum terms and
conditions of employment which the employer is required to grant to its employees. “Labor
relations law” is that part of labor law (Book V of the Labor Code) which deals with unionism,
collective bargaining, grievance machinery, voluntary arbitration, strike, picketing and lockout.
Labor relations and labor standards laws are not mutually exclusive. They are complementary
to, and closely interlinked with, each other. For instance, the laws on collective bargaining,
strikes and lockouts which are covered by labor relations law necessarily relate to the laws on
working conditions found in Book III.

B. State policy towards labor

1. Security of tenure
1.  What is the extent of the application of security of tenure?

Security of tenure does not exclusively apply to regular employment only.  It also applies to
probationary, seasonal, project and other forms of employment during the effectivity thereof.

Managerial employees also enjoy security of tenure. The principle of security of tenure applies
not only to rank-and-file employees but also to managerial employees. (PLDT vs. Tolentino, G.
R. No. 143171, Sept. 21, 2004). chanrobles virtual law library
 The fact that one is a managerial employee does not by itself exclude him from the protection
of the constitutional guarantee of security of tenure. (Fujitsu Computer Products Corporation
of the Philippines vs. CA, G. R. No. 158232, April 8, 2005; Maglutac vs. NLRC, 189 SCRA 767
[1990]). chanrobles

2. Social justice

3. Equal work opportunities

4. Right to self-organization and collective bargaining

Who are eligible to join, form or assist a labor organization for purposes of collective
bargaining?
• In the private sector:
1. All persons employed in commercial, industrial and agricultural enterprises;
2. Employees of government-owned and/or controlled corporations without original charters
established under the Corporation Code;
3. Employees of religious, charitable, medical or educational institutions, whether operating for
profit or not;
4. Front-line managers, commonly known as supervisory employees [See discussion below];
5. Alien employees [See discussion below];
6. Working children [See discussion below];
7. Homeworkers [See discussion below];
8. Employees of cooperatives [See discussion below]; and
9. Employees of legitimate contractors not with the principals but with the contractors

• In the public sector:

All rank-and-file employees of all branches, subdivisions, instrumentalities, and agencies of
government, including government-owned and/or controlled corporations with original
charters, can form, join or assist employees’ organizations of their own choosing.

Are front-line managers or supervisors eligible to join, form or assist a labor organization?
Yes, but only among themselves. They cannot join a rank-and-file union.

Is mixed membership of supervisors and rank-and-file union in one union a ground to cancel its
registration?
No. In case there is mixed membership of supervisors and rank-and-file employees in one union,
the new rule enunciated in Article 245-A of the Labor Code, unlike in the old law, is that it
cannot be invoked as a ground for the cancellation of the registration of the union. The
employees so improperly included are automatically deemed removed from the list of members
of said union. In other words, their removal from the said list is by operation of law.
 Do alien employees have the right to join a labor organization?
No, except if the following requisites are complied with:
(1) He should have a valid working permit issued by the DOLE; and
(2) He is a national of a country which grants the same or similar rights to Filipino workers or
which has ratified either ILO Convention No. 87 or ILO Convention No. 98, as certified by the
Philippine Department of Foreign Affairs (DFA).

Do members of cooperatives have the right to join, form or assist a labor organization?
No, because they are co-owners co-owners of the cooperative.

What about employees of a cooperative?

Yes, because they have employer-employee relationship with the cooperative.

What about members who are at the same time employees of the cooperative?
No, because the prohibition covers employees of the cooperative who are at the same time
members thereof.
But employee-members of a cooperative may withdraw as members of the cooperative for
purposes of joining a labor union.

Can employees of job contractors join, form or assist a labor organization?

Yes, but not for the purpose of collective bargaining with the principal but with their direct
employer – the job contractor.

Are self-employed persons allowed to join, form or assist a labor organization?

Yes, for their mutual aid and protection but not for collective bargaining purposes since they
have no employers but themselves. This rule applies as well to ambulant, intermittent and other
workers, rural workers and those without any definite employers. The reason for this rule is that
these persons have no employers with whom they can collectively bargain.

5. Construction in favor of labor

Article 4. Construction in favor of labor. All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor.

6. Burden of proof and quantum of evidence

II. RECRUITMENT AND PLACEMENT

A. Definition of recruitment and placement

Art. 13. Definitions.
 a. “Worker” means any member of the labor force, whether employed or unemployed.
 
b. “Recruitment and placement” refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not: Provided,
That any person or entity which, in any manner, offers or promises for a fee, employment to two
or more persons shall be deemed engaged in recruitment and placement.
 
c. “Private fee-charging employment agency” means any person or entity engaged in recruitment
and placement of workers for a fee which is charged, directly or indirectly, from the workers or
employers or both.
 
d. “License” means a document issued by the Department of Labor authorizing a person or entity
to operate a private employment agency.
 
e. “Private recruitment entity” means any person or association engaged in the recruitment and
placement of workers, locally or overseas, without charging, directly or indirectly, any fee from
the workers or employers.
 
f. “Authority” means a document issued by the Department of Labor authorizing a person or
association to engage in recruitment and placement activities as a private recruitment entity.
 
g. “Seaman” means any person employed in a vessel engaged in maritime navigation.
 
h. “Overseas employment” means employment of a worker outside the Philippines.
 
i. “Emigrant” means any person, worker or otherwise, who emigrates to a foreign country by
virtue of an immigrant visa or resident permit or its equivalent in the country of destination.

B. Regulation of recruitment and placement activities

1. Regulatory authorities
a. Philippine Overseas Employment Administration
Art. 17. Overseas Employment Development Board. An Overseas Employment Development Board is
hereby created to undertake, in cooperation with relevant entities and agencies, a systematic program
for overseas employment of Filipino workers in excess of domestic needs and to protect their rights to
fair and equitable employment practices. It shall have the power and duty:
1. To promote the overseas employment of Filipino workers through a comprehensive market
promotion and development program;
 
2. To secure the best possible terms and conditions of employment of Filipino contract workers on
a government-to-government basis and to ensure compliance therewith;
 
3. To recruit and place workers for overseas employment on a government-to-government
arrangement and in such other sectors as policy may dictate; and
 
4. To act as secretariat for the Board of Trustees of the Welfare and Training Fund for Overseas
Workers.

b. Regulatory and visitorial powers of the Department of Labor and Employment Secretary

2. Ban on direct hiring

Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for overseas employment
except through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by
members of the diplomatic corps, international organizations and such other employers as may
be allowed by the Secretary of Labor is exempted from this provision.

3. Entities prohibited from recruiting

Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of airline
companies are prohibited from engaging in the business of recruitment and placement of
workers for overseas employment whether for profit or not.

4. Suspension or cancellation of license or authority

Art. 29. Non-transferability of license or authority. No license or authority shall be used directly
or indirectly by any person other than the one in whose favor it was issued or at any place other
than that stated in the license or authority be transferred, conveyed or assigned to any other
person or entity. Any transfer of business address, appointment or designation of any agent or
representative including the establishment of additional offices anywhere shall be subject to the
prior approval of the Department of Labor.

Art. 35. Suspension and/or cancellation of license or authority. The Minister of Labor shall have
the power to suspend or cancel any license or authority to recruit employees for overseas
employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas
Employment Development Board, or for violation of the provisions of this and other applicable
laws, General Orders and Letters of Instructions.

What is a “license” for overseas recruitment? “License” refers to the document issued by the
DOLE Secretary authorizing a person, partnership or corporation to operate a private
recruitment/manning agency.

What is an “authority” for overseas employment? “Authority” refers to the document issued by
the DOLE Secretary authorizing the officers, personnel, agents or representatives of a licensed
recruitment/manning agency to conduct recruitment and placement activities in a place stated
in the license or in a specified place

5. Prohibited practices
Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder of
authority:
 a. To charge or accept, directly or indirectly, any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker
pay any amount greater than that actually received by him as a loan or advance;
b. To furnish or publish any false notice or information or document in relation to
recruitment or employment;
c. To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this Code.
d. To induce or attempt to induce a worker already employed to quit his employment in
order to offer him to another unless the transfer is designed to liberate the worker
from oppressive terms and conditions of employment;
e. To influence or to attempt to influence any person or entity not to employ any worker
who has not applied for employment through his agency;
f. To engage in the recruitment or placement of workers in jobs harmful to public health
or morality or to the dignity of the Republic of the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly
authorized representatives;
h. To fail to file reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters or
information as may be required by the Secretary of Labor.
i. To substitute or alter employment contracts approved and verified by the Department
of Labor from the time of actual signing thereof by the parties up to and including the
periods of expiration of the same without the approval of the Secretary of Labor;
j. To become an officer or member of the Board of any corporation engaged in travel
agency or to be engaged directly or indirectly in the management of a travel agency;
and
k. To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations other than those authorized under this Code and
its implementing rules and regulations.

C. Illegal Recruitment
1. Elements
What are the elements of illegal recruitment?
The essential elements of illegal recruitment vary in accordance with the following classifications: (1)
Simple illegal recruitment; (2) When committed by a syndicate; or (3) When committed in large scale.
When illegal recruitment is committed under either Nos. 2 or 3 above or both, it is considered an
offense involving economic sabotage.

2. Types

3. Illegal recruitment as distinguished from estafa

Art. 38. Illegal recruitment.
a. Any recruitment activities, including the prohibited practices enumerated under Article 34 of
this Code, to be undertaken by non-licensees or non-holders of authority, shall be deemed
illegal and punishable under Article 39 of this Code. The Department of Labor and
 Employment or any law enforcement officer may initiate complaints under this Article.
 
b. Illegal recruitment when committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage and shall be penalized in accordance with Article 39
hereof.
 
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3)
or more persons conspiring and/or confederating with one another in carrying out any
unlawful or illegal transaction, enterprise or scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed in large scale if committed against three (3)
or more persons individually or as a group.
 
c. The Secretary of Labor and Employment or his duly authorized representatives shall have the
power to cause the arrest and detention of such non-licensee or non-holder of authority if
after investigation it is determined that his activities constitute a danger to national security
and public order or will lead to further exploitation of job-seekers. The Secretary shall order
the search of the office or premises and seizure of documents, paraphernalia, properties and
other implements used in illegal recruitment activities and the closure of companies,
establishments and entities found to be engaged in the recruitment of workers for overseas
employment, without having been licensed or authorized to do so.

• Can a person be charged and convicted separately for illegal recruitment and estafa involving one and
the same act of recruitment?
Yes. It is clear that conviction under the Labor Code does not preclude conviction for estafa or
other crimes under other laws. Some relevant principles: ƒ Same evidence to prove illegal recruitment
may be used to prove estafa. ƒ Conviction for both illegal recruitment and estafa, not double jeopardy.

D. Liability of local recruitment agency and foreign employer

• What is the nature of the liability between local recruiter and its foreign principal?
The nature of their liability is “solidary” or “joint and several” for any and all claims arising out of
the implementation of the employment contract involving Filipino workers for overseas
deployment.

1. Solidary liability
• Is the solidary liability of corporate officers with the recruitment agency “automatic” in
character?
No. In order to hold the officers of the agency solidarily liable, it is required that there must
be proof of their culpability therefor. Thus, in the 2013 case of Gagui v. Dejero. Thus, while it
is true that R.A. 8042 and the Corporation Code provide for solidary liability, this liability
must be so stated in the decision sought to be implemented. Absent this express statement,
a corporate officer may not be impleaded and made to personally answer for the liability of
the corporation.

• What are some relevant principles on the persons liable for illegal recruitment?
 1. Employees of a licensed recruitment agency may be held liable for illegal recruitment as
principal by direct participation, together with his employer, if it is shown that he actively
and consciously participated in illegal recruitment.
2. Good faith and merely following orders of superiors are not valid defenses of an
employee.
3. A manager of a recruitment/manning agency is not a mere employee. As such, he
receives job applications, interviews applicants and informs them of the agency’s
requirement of payment of performance or cash bond prior to the applicant’s
deployment. As the crewing manager, he was at the forefront of the company’s
recruitment activities.

2. Theory of imputed knowledge

• What is meant by this theory?
The theory of imputed knowledge is a rule that any information material to the transaction,
either possessed by the agent at the time of the transaction or acquired by him before its
completion, is deemed to be the knowledge of the principal, at least insofar as the transaction is
concerned, even though the knowledge, in fact, is not communicated to the principal at all.

“Imputed knowledge” means the knowledge attributed to a party because of his

position, or his relationship with or responsibility for another party. Such knowledge is
attributed for the reason that the facts in issue were open to discovery and it was that person's
duty to apprise him of such facts.

Sunace International Management Services, Inc. v. NLRC, where the High Court has the
opportunity to discuss the application of the theory of imputed knowledge. Here, the OFW
(Divina), a domestic helper in Taiwan, has extended her 12-month contract, after its expiration,
for two (2) more years after which she returned to the Philippines. It was established by evidence
that the extension was without the knowledge of the local recruitment agency, petitioner
Sunace. The Court of Appeals, however, affirmed the Labor Arbiter’s and NLRC’s finding that
Sunace knew of and impliedly consented to the extension of Divina’s 2-year contract. It went on
to state that “It is undisputed that [Sunace] was continually communicating with [Divina’s]
foreign employer.” It thus concluded that “[a]s agent of the foreign principal, ‘petitioner cannot
profess ignorance of such extension as obviously, the act of the principal extending complainant
(sic) employment contract necessarily bound it.’”
In finding that the application by the CA of this theory of imputed knowledge was
misplaced, the High Court ruled that this theory ascribes the knowledge of the agent, Sunace, to
the principal, employer Xiong, not the other way around. The knowledge of the principal-foreign
employer cannot, therefore, be imputed to its agent, Sunace. There being no substantial proof
that Sunace knew of and consented to be bound under the 2-year employment contract
extension, it cannot be said to be privy thereto. As such, Sunace and its owner cannot be held
solidarily liable for any of Divina’s claims arising from the 2-year employment extension. As the
New Civil Code provides: “Contracts take effect only between the parties, their assigns, and
 heirs, except in case where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law.”

E. Termination of contract of migrant worker

• Can an OFW acquire regularity of employment?
No. The prevailing rule is that OFWs are contractual (fixed-term only), not regular,
employees. In fact, they can never attain regularity of employment.

• What are some relevant principles?

1. Indefinite period of employment of OFWs is not valid as it contravenes the explicit provision
of the POEA Rules and Regulations on fixed-period employment.

2. OFWs do not become regular employees by reason of nature of work, that is, that they are
made to perform work that is usually necessary and desirable in the usual business or trade
of the employer. The exigencies of their work necessitate that they be employed on a
contractual basis. This notwithstanding the fact that they have rendered more than twenty
(20) years of service.

3. Regular employment does not result from the series of re-hiring of OFWs.

4. The fixed-period employment of OFWs is not discriminatory against them nor does it favor
foreign employers. It is for the mutual interest of both the seafarer and the employer why
the employment status must be contractual only or for a certain period of time. Seafarers
spend most of their time at sea and understandably, they cannot stay for a long and an
indefinite period of time at sea. Limited access to shore society during the employment will
have an adverse impact on the seafarer. The national, cultural and lingual diversity among
the crew during the contract of employment is a reality that necessitates the limitation of its
period.

5. The expiration of the employment contracts of OFWs marks its ending.

F. Employment of non-resident aliens (Art. 40)

Any alien seeking admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the Philippines hsall obtain an
employment permit from the Department of Labor.

The employment permit may be issued to a non-resident alien or to the applicant employer
after a determination of the non-availability of a person in the Philippines who is competent, able and
willing at the time of application to perform the services for which the alien is desired.

For an enterprise registered in preferred areas of investments, said employment permit may be
issued upon recommendation of the government agency charged with the supervision of said registered
enterprise.
 III. LABOR STANDARDS
A. Conditions of employment
1. Hours of work
a. Principles in determining hours worked and employees exempted or not covered
Art. 82. Coverage. The provisions of this Title shall apply to employees in all establishments
and undertakings whether for profit or not, but not to government employees, managerial
employees, field personnel, members of the family of the employer who are dependent on
him for support, domestic helpers, persons in the personal service of another, and workers
who are paid by results as determined by the Secretary of Labor in appropriate regulations.
As used herein, “managerial employees” refer to those whose primary duty consists of the
management of the establishment in which they are employed or of a department or
subdivision thereof, and to other officers or members of the managerial staff.
“Field personnel” shall refer to non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer and whose
actual hours of work in the field cannot be determined with reasonable certainty.

b. Compensable Time
i. Normal hours of work
Art. 83. Normal hours of work. The normal hours of work of any employee shall not
exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million
(1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100)
shall hold regular office hours for eight (8) hours a day, for five (5) days a week,
exclusive of time for meals, except where the exigencies of the service require that such
personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be
entitled to an additional compensation of at least thirty percent (30%) of their regular
wage for work on the sixth day. For purposes of this Article, “health personnel” shall
include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers,
laboratory technicians, paramedical technicians, psychologists, midwives, attendants
and all other hospital or clinic personnel.

ii. Night shift differential

Art. 86. Night shift differential. Every employee shall be paid a night shift differential of
not less than ten percent (10%) of his regular wage for each hour of work performed
between ten o’clock in the evening and six o’clock in the morning.

iii. Overtime work

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

“Compressed Workweek” or “CWW” refers to a situation where the normal

workweek is reduced to less than six (6) days but the total number of work-hours of
48 hours per week remains. The normal workday is increased to more than eight (8)
hours but not to exceed twelve (12) hours, without corresponding overtime
premium. This concept can be adjusted accordingly in cases where the normal
workweek of the firm is five (5) days. What are the conditions for its validity? The
CWW scheme is undertaken as a result of an express and voluntary agreement of
majority of the covered employees or their duly authorized representatives. How
should compensation be made under a valid CWW? Unless there is a more favorable
practice existing in the firm, work beyond eight (8) hours will not be compensable by
overtime premium provided the total number of hours worked per day shall not
exceed twelve (12) hours. In any case, any work performed beyond twelve (12)
hours a day or forty-eight (48) hours a week shall be subject to overtime pay.

(b) Built-in overtime

What is built-in overtime pay?
In case the employment contract stipulates that the compensation includes built-in
overtime pay and the same is duly approved by the DOLE, the non-payment by the
employer of any overtime pay for overtime work is justified and valid.

c. Non-compensable hours; when compensable

i. Meal break
Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may
prescribe, it shall be the duty of every employer to give his employees not less than sixty
(60) minutes time-off for their regular meals.

What is the rule on time-off for regular meal?

Every employer is required to give his employees, regardless of sex, not less than one (1)
hour (or 60 minutes) time-off for regular meals.

Is meal break compensable?

Being time-off, it is not compensable hours worked. In this case, the employee is free to
do anything he wants, except to work. If he is required, however, to work while eating,
he should be compensated therefor.

ii. Power interruptions or brownouts

iii. Idle time

 iv. Travel time

v. Commuting time

vi. Waiting time

What is covered by compensable working hours?
The following shall be considered as compensable hours worked: a. All time during
which an employee is required to be on duty or to be at the employer’s premises or to
be at a prescribed workplace; and b. All time during which an employee is suffered or
permitted to work. When is waiting time compensable? Waiting time spent by an
employee shall be considered as working time if waiting is an integral part of his work or
the employee is required or engaged by the employer to wait. Time spent waiting for
work is compensable if it is spent “primarily for the benefit of the employer and [its]
business.”

2. Rest periods
Art. 91. Right to weekly rest day.
a. It shall be the duty of every employer, whether operating for profit or not, to provide each
of his employees a rest period of not less than twenty-four (24) consecutive hours after
every six (6) consecutive normal work days.
 
b. The employer shall determine and schedule the weekly rest day of his employees subject to
collective bargaining agreement and to such rules and regulations as the Secretary of Labor
and Employment may provide. However, the employer shall respect the preference of
employees as to their weekly rest day when such preference is based on religious grounds.

Art. 92. When employer may require work on a rest day. The employer may require his
employees to work on any day:
a. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or
imminent danger to public safety;
 
b. In cases of urgent work to be performed on the machinery, equipment, or installation, to
avoid serious loss which the employer would otherwise suffer;
 
c. In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures;
 
d. To prevent loss or damage to perishable goods;
 
 e. Where the nature of the work requires continuous operations and the stoppage of work
may result in irreparable injury or loss to the employer; and
 
f. Under other circumstances analogous or similar to the foregoing as determined by the
Secretary of Labor and Employment.

Art. 93. Compensation for rest day, Sunday or holiday work.

a. Where an employee is made or permitted to work on his scheduled rest day, he shall be
paid an additional compensation of at least thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional compensation for work performed on Sunday
only when it is his established rest day.
b. When the nature of the work of the employee is such that he has no regular workdays and
no regular rest days can be scheduled, he shall be paid an additional compensation of at
least thirty percent (30%) of his regular wage for work performed on Sundays and holidays.
c. Work performed on any special holiday shall be paid an additional compensation of at least
thirty percent (30%) of the regular wage of the employee. Where such holiday work falls on
the employee’s scheduled rest day, he shall be entitled to an additional compensation of at
least fifty per cent (50%) of his regular wage.
d. Where the collective bargaining agreement or other applicable employment contract
stipulates the payment of a higher premium pay than that prescribed under this Article, the
employer shall pay such higher rate.

What is the duration of weekly rest period?

It shall be the duty of every employer, whether operating for profit or not, to provide each
of his employees a rest period of not less than twenty-four (24) consecutive hours after
every six (6) consecutive normal work days.

Is the employer’s prerogative to determine the rest period of its employees subject to
limitations?

Yes. The employer shall determine and schedule the weekly rest day of his employees
subject to CBA and to such rules and regulations as the DOLE Secretary may provide.
However, the employer shall respect the preference of employees as to their weekly rest
day when such preference is based on religious grounds.

3. Service Charge
Art. 96. Service charges. All service charges collected by hotels, restaurants and similar
establishments shall be distributed at the rate of eighty-five percent (85%) for all covered
employees and fifteen percent (15%) for management. The share of the employees shall be
equally distributed among them. In case the service charge is abolished, the share of the
covered employees shall be considered integrated in their wages.

What are the kinds of establishment covered by the law on service charge?
The rules on service charge apply only to establishments collecting service charges, such
as hotels, restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, bars,
casinos and gambling houses, and similar enterprises, including those entities operating
primarily as private subsidiaries of the government.

Who are the employees covered by this law?

The same rules on service charges apply to all employees of covered employers,
regardless of their positions, designations or employment status, and irrespective of the method
by which their wages are paid except those receiving more than P2,000.00 a month.

Who are not covered?

Specifically excluded from coverage are employees who are receiving wages of more
than P2,000.00 a month. However, it must be pointed out that the P2,000.00 ceiling is no longer
realistic considering the applicable minimum wages prevailing in the country. Hence, it must be
disregarded.

How is the service charge distributed?

a. Percentage of sharing.
All service charges collected by covered employers are required to be distributed at the
following rates:
1. 85% to be distributed equally among the covered employees; and
2. 15% to management to answer for losses and breakages and distribution to
employees receiving more than P2,000.00 a month, at the discretion of the management.

b. Frequency of distribution.
The share of the employees referred to above should be distributed and paid to them
not less often than once every two (2) weeks or twice a month at intervals not exceeding sixteen
(16) days.

Can the service charge be integrated into the wages of covered employees?
Yes. In case the service charge is abolished, the share of covered employees should be
considered integrated in their wages, in accordance with Article 96 of the Labor Code. The basis
of the amount to be integrated is the average monthly share of each employee for the past
twelve (12) months immediately preceding the abolition or withdrawal of such charges.

What are some principles on service charge?

• Tips and services charges are two different things. Tips are given by customers voluntarily to
waiters and other people who serve them out of recognition of satisfactory or excellent service.
There is no compulsion to give tips under the law. The same may not be said of service charges
which are considered integral part of the cost of the food, goods or services ordered by the
customers.
• Service charges are not in the nature of profit share and, therefore, cannot be deducted from
wage.
B. Wages
1. Definition, components, and exclusions
a. Wage vs. salary
What is the basic distinction between wage and salary?
The term “wage” is used to characterize the compensation paid for manual skilled or
unskilled labor. “Salary,” on the other hand, is used to describe the compensation for higher
or superior level of employment.

What is the distinction in respect to execution, attachment or garnishment?

In cases of execution, attachment or garnishment of the compensation of an employee
received from work issued by the court to satisfy a judicially-determined obligation, a
distinction should be made whether such compensation is considered “wage” or “salary.”
Under Article 1708 of the Civil Code, if considered a “wage,” the employee’s compensation
shall not be subject to execution or attachment or garnishment, except for debts incurred
for food, shelter, clothing and medical attendance. If deemed a “salary,” such compensation
is not exempt from execution or attachment or garnishment. Thus, the salary, commission
and other remuneration received by a managerial employee (as distinguished from an
ordinary worker or laborer) cannot be considered wages. Salary is understood to relate to a
position or office, or the compensation given for official or other service; while wage is the
compensation for labor.

b. Distinguish: facilities and supplements

What are facilities?
The term “facilities” includes articles or services for the benefit of the employee or his family
but does not include tools of the trade or articles or services primarily for the benefit of the
employer or necessary to the conduct of the employer’s business. They are items of expense
necessary for the laborer’s and his family’s existence and subsistence which form part of the
wage and when furnished by the employer, are deductible therefrom, since if they are not
so furnished, the laborer would spend and pay for them just the same.

What are supplements?

The term “supplements” means extra remuneration or special privileges or benefits given to
or received by the laborers over and above their ordinary earnings or wages.

What are the distinctions between facilities and supplements?

The benefit or privilege given to the employee which constitutes an extra remuneration over
and above his basic or ordinary earning or wage is supplement; and when said benefit or
privilege is made part of the laborer’s basic wage, it is a facility. The criterion is not so much
with the kind of the benefit or item (food, lodging, bonus or sick leave) given but its
purpose. Thus, free meals supplied by the ship operator to crew members, out of necessity,
cannot be considered as facilities but supplements which could not be reduced having been
given not as part of wages but as a necessary matter in the maintenance of the health and
efficiency of the crew during the voyage.
 What is the rule on deductibility of facilities and supplements?
Facilities are deductible from wage but not supplements.

c. Bonus, 13th month pay

Who are covered by the 13th month pay law?

Only rank-and-file employees, regardless of their designation or employment status
and irrespective of the method by which their wages are paid, are entitled to the 13th
month pay benefit. Managerial employees are not entitled to 13th month pay.
When should 13th month pay be paid?
It must be paid not later than December 24 of every year. Who are excluded from its
coverage?
The following employers are not covered by the 13th month pay law:
1. The government and any of its political subdivisions, including government-owned and
controlled corporations, except those corporations operating essentially as private
subsidiaries of the government.
2. Employers already paying their employees 13th month pay or more in a calendar year or
its equivalent at the time of the issuance of the Revised Guidelines.
3. Employers of those who are paid on purely commission, boundary, or task basis, and
those who are paid a fixed amount for performing a specific work, irrespective of the
time consumed in the performance thereof, except where the workers are paid on piece-
rate basis, in which case, the employer shall be covered by the Revised Guidelines insofar
as such workers are concerned. Workers paid on piece-rate basis shall refer to those who
are paid a standard amount for every piece or unit of work produced that is more or less
regularly replicated without regard to the time spent in producing the same.
Are domestic workers or Kasambahays covered?
Yes. They are now covered under the Kasambahay Law.
Are extras, casuals and seasonal employees entitled to 13th month pay?
Yes, they are entitled thereto. Is 13th month pay part of wage? 13th month pay
which is in the nature of additional income, is based on wage but not part of wage.

What is the minimum amount of the 13th month pay?

The minimum 13th month pay should not be less than one-twelfth (1/12) of the total
basic salary earned by an employee within a calendar year.

What is meant by “basic salary” or “basic wage”?

“Basic salary” or “basic wage” contemplates work within the normal eight (8)
working hours in a day. This means that the basic salary of an employee for purposes of
computing the 13th month pay should include all remunerations or earnings paid by the
employer for services rendered during normal working hours.
For purposes of computing the 13th month pay, “basic salary” should be interpreted to
mean not the amount actually received by an employee, but 1/12 of their standard monthly
wage multiplied by their length of service within a given calendar year.
 What is the minimum period of service required in a calendar year to be entitled to 13th
month pay?
To be entitled to the 13th month pay benefit, it is imposed as a minimum service
requirement that the employee should have worked for at least one (1) month during a
calendar year.

d. Holiday pay
Who are covered by the law on holiday pay?
Generally, all employees are entitled to and covered by the law on holiday pay. Who are
excluded from its coverage?

The following are excluded:

a. Those of the government and any of the political subdivisions, including government-
owned and controlled corporations;
b. Those of retail and service establishments regularly employing less than ten (10) workers;
c. Domestic workers or Kasambahays;
d. Persons in the personal service of another;
e. Managerial employees as defined in Book III of the Labor Code;
f. Field personnel and other employees whose time and performance is unsupervised by the
employer;
g. Those who are engaged on task or contract basis or purely commission basis;
h. Those who are paid a fixed amount for performing work irrespective of the time
consumed in the performance thereof;
i. Other officers and members of the managerial staff;
j. Members of the family of the employer who are dependent on him for support.

How is premium pay for holidays computed?

Labor Advisory No. 06, Series of 2013, on the Payment of Wages for the Regular Holidays,
Special (Nonworking) Days, and Special Holiday (For all Schools) for the Year 2014, specifically
promulgated the following rules that shall apply:

a. Regular Holidays
• If the employee did not work, he/she shall be paid 100 percent of his/her salary for
that day. Computation: (Daily rate + Cost of Living Allowance) x 100%. The COLA is
included in the computation of holiday pay.
• If the employee worked, he/she shall be paid 200 percent of his/her regular salary for
that day for the first eight hours. Computation: (Daily rate + COLA) x 200%. The COLA
is also included in computation of holiday pay.
• If the employee worked in excess of eight hours (overtime work), he/she shall be paid
an additional 30 percent of his/her hourly rate on said day. Computation: Hourly rate
of the basic daily wage x 200% x 130% x number of hours worked.
• If the employee worked during a regular holiday that also falls on his/her rest day,
he/she shall be paid an additional 30 percent of his/her daily rate of 200 percent.
Computation: (Daily rate + COLA) x 200%] + (30% [Daily rate x 200%)].
• If the employee worked in excess of eight hours (overtime work) during a regular
holiday that also falls on his/her rest day, he/she shall be paid an additional 30
percent of his/her hourly rate on said day. Computation: (Hourly rate of the basic
daily wage x 200% x 130% x 130% x number of hours worked); b. Special (Non-
Working) Days
• If the employee did not work, the “no work, no pay” principle shall apply, unless there
is a favorable company policy, practice, or CBA granting payment on a special day.
• If the employee worked, he/she shall be paid an additional 30 percent of his/her daily
rate on the first eight hours of work. Computation: [(Daily rate x 130%) + COLA).
• If the employee worked in excess of eight hours (overtime work), he/she shall be paid
an additional 30 percent of his/her hourly rate on said day. Computation: (Hourly
rate of the basic daily wage x 130% x 130% x number of hours worked).
• If the employee worked during a special day that also falls on his/her rest day, he/she
shall be paid an additional fifty percent of his/her daily rate on the first eight hours of
work. Computation: [(Daily rate x 150%) + COLA].
• If the employee worked in excess of eight hours (overtime work) during a special day
that also falls on his/her rest day, he/she shall be paid an additional 30 percent of
his/her hourly rate on said day. Computation: (Hourly rate of the basic daily wage x
150% x 130% x number of hours worked). c. Special Holiday for all schools
• For private establishments, 25 February 2014 is an ordinary workday and no premium
is required to be paid for work on said day.
• On the other hand, employees in private schools, whether academic or administrative
personnel, shall be paid in accordance with the rules for pay on special (non-working)
days as stated above.

What are the effects of absences on the computation of holiday pay?

1. Employees on leave of absence with pay - entitled to holiday pay when they are on
leave of absence with pay.
2. Employees on leave of absence without pay on the day immediately preceding the
regular holiday - may not be paid the required holiday pay if they have not worked
on such regular holiday.
3. Employees on leave while on SSS or employee’s compensation benefits - Employers
should grant the same percentage of the holiday pay as the benefit granted by
competent authority in the form of employee’s compensation or social security
payment, whichever is higher, if they are not reporting for work while on such
benefits.
4. When day preceding regular holiday is a non-working day or scheduled rest day -
should not be deemed to be on leave of absence on that day, in which case,
employees are entitled to the regular holiday pay if they worked on the day
immediately preceding the non-working day or rest day.
2. Principles
a. No work, no pay
What is the “NO WORK, NO PAY” principle?
The “no work, no pay” or “fair day’s wage for fair day’s labor” means that if the worker does not
work, he is generally not entitled to any wage or pay. The exception is when it was the employer
who unduly prevented him from working despite his ableness, willingness and readiness to work; or
in cases where he is illegally locked out or illegally suspended or illegally dismissed, or otherwise
illegally prevented from working, in which event, he should be entitled to his wage.

b. Equal pay for equal work

c. Fair wage for fair work

d. Non-diminution of benefits (Art. 100)

Nothing in this Book shall be construed to eliminate or in a way diminish suppments., or other
employee benefits being enjoyed at the time of promulgation of this Code.

3. Minimum wage
a. Payment by hours worked

b. Payment by results (Art. 101)

(a) The Secretary of Labor and Employment shall regulate the payment of wages by results,
including pakyao, piecework, and other non-time work, in order to ensure the payment
of fair and reasonable wage rates, preferably through time and motion studies or in
consultation with representatives of workers’ and employers’ organizations.

4. Payment of wages
Art. 102. Forms of payment. No employer shall pay the wages of an employee by means of
promissory notes, vouchers, coupons, tokens, tickets, chits, or any object other than legal
tender, even when expressly requested by the employee.
Payment of wages by check or money order shall be allowed when such manner of
payment is customary on the date of effectivity of this Code, or is necessary because of special
circumstances as specified in appropriate regulations to be issued by the Secretary of Labor and
Employment or as stipulated in a collective bargaining agreement.
Art. 103. Time of payment. Wages shall be paid at least once every two (2) weeks or twice a
month at intervals not exceeding sixteen (16) days. If on account of force majeure or
circumstances beyond the employer’s control, payment of wages on or within the time herein
provided cannot be made, the employer shall pay the wages immediately after such force
majeure or circumstances have ceased. No employer shall make payment with less frequency
than once a month.
 The payment of wages of employees engaged to perform a task which cannot be completed
in two (2) weeks shall be subject to the following conditions, in the absence of a collective
bargaining agreement or arbitration award:
1. That payments are made at intervals not exceeding sixteen (16) days, in proportion to
the amount of work completed;
 
2. That final settlement is made upon completion of the work.

Art. 104. Place of payment. Payment of wages shall be made at or near the place of
undertaking, except as otherwise provided by such regulations as the Secretary of Labor and
Employment may prescribe under conditions to ensure greater protection of wages.
Art. 105. Direct payment of wages. Wages shall be paid directly to the workers to whom they are
due, except:
a. In cases of force majeure rendering such payment impossible or under other special
circumstances to be determined by the Secretary of Labor and Employment in appropriate
regulations, in which case, the worker may be paid through another person under written
authority given by the worker for the purpose; or
 
b. Where the worker has died, in which case, the employer may pay the wages of the deceased
worker to the heirs of the latter without the necessity of intestate proceedings. The claimants, if
they are all of age, shall execute an affidavit attesting to their relationship to the deceased and
the fact that they are his heirs, to the exclusion of all other persons. If any of the heirs is a
minor, the affidavit shall be executed on his behalf by his natural guardian or next-of-kin. The
affidavit shall be presented to the employer who shall make payment through the Secretary of
Labor and Employment or his representative. The representative of the Secretary of Labor and
Employment shall act as referee in dividing the amount paid among the heirs. The payment of
wages under this Article shall absolve the employer of any further liability with respect to the
amount paid.

5. Prohibitions regarding wages

Art. 112. Non-interference in disposal of wages. No employer shall limit or otherwise interfere
with the freedom of any employee to dispose of his wages. He shall not in any manner force,
compel, or oblige his employees to purchase merchandise, commodities or other property from
any other person, or otherwise make use of any store or services of such employer or any other
person.
Art. 113. Wage deduction. No employer, in his own behalf or in behalf of any person, shall make
any deduction from the wages of his employees, except:
a. In cases where the worker is insured with his consent by the employer, and the deduction is
to recompense the employer for the amount paid by him as premium on the insurance;
 
b. For union dues, in cases where the right of the worker or his union to check-off has been
recognized by the employer or authorized in writing by the individual worker concerned;
and
 
c. In cases where the employer is authorized by law or regulations issued by the Secretary of
Labor and Employment.
 Art. 114. Deposits for loss or damage. No employer shall require his worker to make deposits
from which deductions shall be made for the reimbursement of loss of or damage to tools,
materials, or equipment supplied by the employer, except when the employer is engaged in
such trades, occupations or business where the practice of making deductions or requiring
deposits is a recognized one, or is necessary or desirable as determined by the Secretary of
Labor and Employment in appropriate rules and regulations.
Art. 115. Limitations. No deduction from the deposits of an employee for the actual amount of
the loss or damage shall be made unless the employee has been heard thereon, and his
responsibility has been clearly shown.
Art. 116. Withholding of wages and kickbacks prohibited. It shall be unlawful for any person,
directly or indirectly, to withhold any amount from the wages of a worker or induce him to give
up any part of his wages by force, stealth, intimidation, threat or by any other means
whatsoever without the worker’s consent.
Art. 117. Deduction to ensure employment. It shall be unlawful to make any deduction from
the wages of any employee for the benefit of the employer or his representative or intermediary
as consideration of a promise of employment or retention in employment.
Art. 118. Retaliatory measures. It shall be unlawful for an employer to refuse to pay or reduce
the wages and benefits, discharge or in any manner discriminate against any employee who has
filed any complaint or instituted any proceeding under this Title or has testified or is about to
testify in such proceedings.
Art. 119. False reporting. It shall be unlawful for any person to make any statement, report, or
record filed or kept pursuant to the provisions of this Code knowing such statement, report or
record to be false in any material respect.

6. Wage determination
a. Wage order (Art. 123)
What is a Wage Order?
The term “Wage Order” refers to the order promulgated by the Regional Board
pursuant to its wage fixing authority.

When is it proper to issue a Wage Order?

Whenever conditions in the region so warrant, the Regional Board shall investigate and
study all pertinent facts and based on the prescribed standards and criteria, shall proceed to
determine whether a Wage Order should be issued. Any such Wage Order shall take effect after
fifteen (15) days from its complete publication in at least one (1) newspaper of general
circulation in the region.

What are the standards/criteria for minimum wage fixing?

In the determination of regional minimum wages, the Regional Board shall, among other
relevant factors, consider the following:
(1) Needs of workers and their families
1) Demand for living wages;
2) Wage adjustment vis-à-vis the consumer price index;
3) Cost of living and changes therein;
4) Needs of workers and their families;
 5) Improvements in standards of living.

(2) Capacity to pay

1) Fair return on capital invested and capacity to pay of employers;
2) Productivity.

(3) Comparable wages and incomes

1) Prevailing wage levels.

(4) Requirements of economic and social development

1) Need to induce industries to invest in the countryside;
2) Effects on employment generation and family income;
3) Equitable distribution of income and wealth along the imperatives of economic and
social development.

What are the methods of fixing the minimum wage rates?

There are two (2) methods, to wit:
1. “Floor-Wage” method which involves the fixing of a determinate amount to be
added to the prevailing statutory minimum wage rates. This was applied in earlier
wage orders; and
2. “Salary-Cap” or “Salary-Ceiling” method where the wage adjustment is to be applied
to employees receiving a certain denominated salary ceiling. In other words,
workers already being paid more than the existing minimum wage (up to a certain
amount stated in the Wage Order) are also to be given a wage increase.

The “Salary-Cap” or “Salary-Ceiling” method is the preferred mode.

The distinction between the two (2) methods is best shown by way of an
illustration. Under the “Floor Wage Method,” it would be sufficient if the Wage Order
simply set P15.00 as the amount to be added to the prevailing statutory minimum wage
rates; while in the “Salary-Ceiling Method,” it would be sufficient if the Wage Order
states a specific salary, such as P250.00, and only those earning below it shall be entitled
to the wage increase.

b. Wage distortion
What is wage distortion?
“Wage distortion” contemplates a situation where an increase in prescribed wage rates
results in either of the following:
1. Elimination of the quantitative differences in the rates of wages or salaries; or
2. Severe contraction of intentional quantitative differences in wage or salary rates
between and among employee groups in an establishment as to effectively obliterate
the distinctions embodied in such wage structure based on the following criteria:
a. Skills;
b. Length of service; or
 c. Other logical bases of differentiation.

Wage distortion presupposes a classification of positions and ranking of these positions

at various levels. One visualizes a hierarchy of positions with corresponding ranks basically in
terms of wages and other emoluments. Where a significant change occurs at the lowest level of
positions in terms of basic wage without a corresponding change in the other level in the
hierarchy of positions, negating as a result thereof the distinction between one level of position
from the next higher level, and resulting in a parity between the lowest level and the next higher
level or rank, between new entrants and old hires, there exists a wage distortion. xxx. The
concept of wage distortion assumes an existing grouping or classification of employees which
establishes distinctions among such employees on some relevant or legitimate basis. This
classification is reflected in a differing wage rate for each of the existing classes of employees.

What are the elements of wage distortion?

The four (4) elements of wage distortion are as follows:
(1) An existing hierarchy of positions with corresponding salary rates;
(2) A significant change in the salary rate of a lower pay class without a
concomitant increase in the salary rate of a higher one;
(3) The elimination of the distinction between the two levels; and
(4) The existence of the distortion in the same region of the country.

Normally, a company has a wage structure or method of determining the wages

of its employees. In a problem dealing with “wage distortion,” the basic assumption is
that there exists a grouping or classification of employees that establishes distinctions
among them on some relevant or legitimate bases.

Involved in the classification of employees are various factors such as the

degrees of responsibility, the skills and knowledge required, the complexity of the job,
or other logical basis of differentiation. The differing wage rate for each of the existing
classes of employees reflects this classification.

What is the formula for rectifying or resolving wage distortion?

Following is the formula for the correction of wage distortion in the pay scale structures:

Minimum Wage = % x Prescribed Increase = Distortion Adjustment

Actual Salary

The above formula was held to be just and equitable.

C. Leaves
1. Labor Code
a. Service incentive leave (Art. 95)
What is service incentive leave?
 Every covered employee who has rendered at least one (1) year of service is entitled to
a yearly service incentive leave of five (5) days with pay.

The term “at least one year of service” should mean service within twelve (12) months,
whether continuous or broken, reckoned from the date the employee started working,
including authorized absences and paid regular holidays, unless the number of working days
in the establishment as a matter of practice or policy, or that provided in the employment
contract, is less than twelve (12) months, in which case, said period should be considered as
one (1) year for the purpose of determining entitlement to the service incentive leave
benefit.

Who are excluded from its coverage?

All employees are covered by the rule on service incentive leave except:
a. Those of the government and any of its political subdivisions, including government-
owned and controlled corporations;
b. Domestic workers or kasambahays;
c. Persons in the personal service of another;
d. Managerial employees as defined in Book III of the Labor Code;
e. Field personnel and other employees whose performance is unsupervised by the
employer;
f. Those who are engaged on task or contract basis, purely commission basis, or those
who are paid in a fixed amount for performing work irrespective of the time
consumed in the performance thereof;
g. Those who are already enjoying the benefit provided in the law;
h. Those enjoying vacation leave with pay of at least five (5) days;
i. Those employed in establishments regularly employing less than ten (10) employees;
j. Other officers and members of the managerial staff; and
k. Members of the family of the employer who are dependent on him for support.

Are unavailed service incentive leaves commutable to cash?

Yes. The service incentive leave is commutable to its money equivalent if not used or
exhausted at the end of the year.

2. Special laws
a. Parental leave for solo parents
What is parental leave?
“Parental leave” is the leave benefit granted to a male or female solo parent to enable
him/her to perform parental duties and responsibilities where physical presence is required.

How many days may be availed of as parental leave?

The parental leave shall not be more than seven (7) working days every year to a solo
parent who has rendered service of at least one (1) year, to enable him/her to perform
parental duties and responsibilities where his/her physical presence is required. This leave
shall be non-cumulative.
It bears noting that this leave privilege is an additional leave benefit which is separate
and distinct from any other leave benefits provided under existing laws or agreements.

Who is a solo parent?

The term "solo parent" refers to any individual who falls under any of the following
categories:
(1) A woman who gives birth as a result of rape and other crimes against chastity even
without a final conviction of the offender: Provided, That the mother keeps and
raises the child;
(2) Parent left solo or alone with the responsibility of parenthood due to death of
spouse;
(3) Parent left solo or alone with the responsibility of parenthood while the spouse is
detained or is serving sentence for a criminal conviction for at least one (1) year;
(4) Parent left solo or alone with the responsibility of parenthood due to physical
and/or mental incapacity of spouse as certified by a public medical practitioner;
(5) Parent left solo or alone with the responsibility of parenthood due to legal
separation or de facto separation from spouse for at least one (1) year, as long as
he/she is entrusted with the custody of the children;
(6) Parent left solo or alone with the responsibility of parenthood due to declaration of
nullity or annulment of marriage as decreed by a court or by a church as long as
he/she is entrusted with the custody of the children;
(7) Parent left solo or alone with the responsibility of parenthood due to abandonment
of spouse for at least one (1) year;
(8) Unmarried mother/father who has preferred to keep and rear her/his child/children
instead of having others care for them or give them up to a welfare institution;
(9) Any other person who solely provides parental care and support to a child or
children;
(10) Any family member who assumes the responsibility of head of family as a result of
the death, abandonment, disappearance or prolonged absence of the parents or
solo parent.

What is the effect of change of status of the solo parent?

A change in the status or circumstance of the parent claiming benefits under this Act,
such that he/she is no longer left alone with the responsibility of parenthood, shall
terminate his/her eligibility for these benefits.

Who are considered children under this law?

"Children" refer to those living with and dependent upon the solo parent for support
who are unmarried, unemployed and not more than eighteen (18) years of age, or even
over eighteen (18) years but are incapable of selfsupport because of mental and/or physical
defect/disability.
 Is an unavailed parental leave convertible to cash?
No. In the event that the parental leave is not availed of, said leave shall not be
convertible to cash unless specifically agreed upon previously

b. Expanded maternity leave

c. Paternity leave
What is paternity leave benefit?

“Paternity leave” covers a married male employee allowing him not to report for work
for seven (7) calendar days but continues to earn the compensation therefor, on the
condition that his spouse has delivered a child or suffered miscarriage for purposes of
enabling him to effectively lend support to his wife in her period of recovery and/or in the
nursing of the newly-born child.

“Delivery” includes childbirth or any miscarriage.

“Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers to a woman
who is legally married to the male employee concerned.

“Cohabiting” refers to the obligation of the husband and wife to live together.

What is the covered total number of deliveries?

Every married employee in the private and public sectors is entitled to a paternity
leave of seven (7) calendar days with full pay for the first four (4) deliveries of the
legitimate spouse with whom he is cohabiting.

Paternity leave benefits are granted to the qualified employee after the delivery by
his wife, without prejudice to an employer allowing an employee to avail of the benefit
before or during the delivery, provided that the total number of days should not exceed
seven (7) calendar days for each delivery.

Is an unavailed paternity leave benefit convertible to cash?

No. In the event that the paternity leave benefit is not availed of, said leave shall not
be convertible to cash.

d. Gynecological leave
What is this special leave benefit [GYNECOLOGICAL SURGERY LEAVE]?
 A special leave benefit for women was granted under R.A. No. 9710, otherwise known
as “The Magna Carta of Women” [August 14, 2009]. Thus, any female employee in the public
and private sector regardless of age and civil status shall be entitled to a special leave of two (2)
months with full pay based on her gross monthly compensation subject to existing laws, rules
and regulations due to surgery caused by gynecological disorders under the following terms and
conditions:
1. She has rendered at least six (6) months continuous aggregate employment service
for the last twelve (12) months prior to surgery;
2. In the event that an extended leave is necessary, the female employee may use her
earned leave credits; and
3. This special leave shall be non-cumulative and non-convertible to cash.
“Gynecological disorders” refer to disorders that would require surgical procedures such
as, but not limited to, dilatation and curettage and those involving female reproductive organs
such as the vagina, cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as
certified by a competent physician. Gynecological surgeries shall also include hysterectomy,
ovariectomy, and mastectomy.
Is this leave similar to maternity leave?
No. This leave should be distinguished from maternity leave benefit, a separate and
distinct benefit, which may be availed of in case of childbirth, miscarriage or complete abortion.
A woman, therefore, may avail of this special leave benefit in case she undergoes surgery
caused by gynecological disorder and at the same time maternity benefit as these two leaves
are not mutually exclusive.

e. Battered woman leave

What is this kind of leave?
This special leave is granted to a woman employee who is a victim under this law. It
is for a total of ten (10) days of paid leave of absence, in addition to other paid leaves
under the law. It is extendible when the necessity arises as specified in the protection
order. Its purpose is to enable the woman employee to attend to the medical and legal
concerns relative to said law. This leave is not convertible to cash.

What is the requirement for its entitlement?

At any time during the application of any protection order, investigation,
prosecution and/or trial of the criminal case, a victim of Violence Against Women and
their Children (VAWC) who is employed shall be entitled to said paid leave of up to ten
(10) days. The Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the
case may be, shall issue a certification at no cost to the woman that such an action is
pending, and this is all that is required for the employer to comply with the 10-day paid
leave.

D. Sexual harassment in the work environment

1. Definition
What are the 3 situations contemplated under this law?
 R.A. No. 7877 declares sexual harassment unlawful only in three (3) situations, namely:
(1) employment;
(2) education; and
(3) training environment.

Can sexual harassment be committed also against a man?

Yes. Sexual harassment is not the sole domain of women as men may also be subjected
to the same despicable act. Said law does not limit the victim of sexual harassment to women.

Who are the persons who may be held liable for sexual harassment?
Work, education or training-related sexual harassment is committed by any employer,
employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach,
trainor, or any other person who, having authority, influence or moral ascendancy over another
in a work or training or education environment, demands, requests or otherwise requires any
sexual favor from another, regardless of whether the demand, request or requirement for
submission is accepted by the object of said act.
Further, any person who directs or induces another to commit any act of sexual
harassment as defined in the law, or who cooperates in the commission thereof by another
without which it would not have been committed, shall also be held liable under the law.

How is sexual harassment committed in a work-related or employment environment?

In a work-related or employment environment, sexual harassment is committed when:
1. The sexual favor is made a condition in the hiring or in the employment, re-
employment or continued employment of said individual or in granting said
individual favorable compensation, terms, conditions, promotions, or privileges; or
the refusal to grant the sexual favor results in limiting, segregating or classifying the
employee which in any way would discriminate, deprive or diminish employment
opportunities or otherwise adversely affect said employee;
2. The above acts would impair the employee’s rights or privileges under existing labor
laws; or
3. The above acts would result in an intimidating, hostile, or offensive environment for
the employee.

2. Duties and liabilities of employers

What are duties of the employer in regard to sexual harassment complaints?

is the duty of the employer to prevent or deter the commission of acts of sexual harassment and
to provide the procedures for the resolution or prosecution of acts of sexual harassment.

The employer or head of office is required to:

1. promulgate appropriate rules and regulations, in consultation with and jointly approved by
the employees or students or trainees, through their duly designated representatives,
prescribing the procedure for the investigation of sexual harassment cases and the
 administrative sanctions therefor. The said rules and regulations issued shall include,
among others, guidelines on proper decorum in the workplace and educational or training
institutions.
2. create a committee on decorum and investigation of cases on sexual harassment. The
committee shall conduct meetings, as the case may be, with officers and employees,
teachers, instructors, professors, coaches, trainors and students or trainees to increase
understanding and prevent incidents of sexual harassment. It shall also conduct the
investigation of alleged cases constituting sexual harassment.

3. Applicable laws:
a. Sexual Harassment Act (RA No.7877)

b. Safe Spaces Act

E. Working conditions for special groups of employees

1. Apprentices and learners
What are the distinctions between learnership and apprenticeship?
The following are the distinctions:
1. Practical training. Both learnership and apprenticeship involve practical training on-the-
job.
2. Training agreement. Learnership is governed by a learnership agreement; while
apprenticeship is governed by an apprenticeship agreement.
2. Occupation. Learnership involves learnable occupations consisting of semi-skilled and
other industrial occupations which are non-apprenticeable; while apprenticeship
concerns apprenticeable occupations or any trade, form of employment or occupation
approved for apprenticeship by the DOLE Secretary.
3. Theoretical instructions. Learnership may or may not be supplemented by related
theoretical instructions; while apprenticeship should always be supplemented by related
theoretical instructions.
4. Ratio of theoretical instructions and on-the-job training. For both learnership and
apprenticeship, the normal ratio is one hundred (100) hours of theoretical instructions
for every two thousand (2,000) hours of practical or on-the-job training. Theoretical
instruction time for occupations requiring less than two thousand (2,000) hours for
proficiency should be computed on the basis of such ratio.
5. Competency-based system. Unlike in apprenticeship, it is required in learnership that it
be implemented based on the TESDA-approved competency-based system.
6. Duration of training. Learnership involves practical training on the job for a period not
exceeding three (3) months; while apprenticeship requires for proficiency, more than
three (3) months but not over six (6) months of practical training on the job.
 7. Qualifications. The law does not expressly mention any qualifications for learners; while
the following qualifications are required to be met by apprentices under Article 59 of the
Labor Code:
(a) Be at least fourteen (14) years of age;
(b) Possess vocational aptitude and capacity for appropriate tests; and
(c) Possess the ability to comprehend and follow oral and written instructions.
8. Circumstances justifying hiring of trainees. Unlike in apprenticeship, in learnership, the
law, Article 74 of the Labor Code, expressly prescribes the pre-requisites before learners
may be validly employed, to wit:
(a) When no experienced workers are available;
(b) The employment of learners is necessary to prevent curtailment of employment
opportunities; and
(c) The employment does not create unfair competition in terms of labor costs or impair
or lower working standards.
9. Limitation on the number of trainees. In learnership, a participating enterprise is allowed
to take in learners only up to a maximum of twenty percent (20%) of its total regular
workforce. No similar cap is imposed in the case of apprenticeship.
10. Option to employ. In learnership, the enterprise is obliged to hire the learner after the
lapse of the learnership period; while in apprenticeship, the enterprise is given only an
“option” to hire the apprentice as an employee.
11. Wage rate. The wage rate of a learner or an apprentice is set at seventy-five percent
(75%) of the statutory minimum wage.

2. Disabled workers
a. Equal opportunity
Under the law, PWDs are entitled to equal opportunity for employment. Consequently, no
PWD shall be denied access to opportunities for suitable employment. A qualified employee
with disability shall be subject to the same terms and conditions of employment and the
same compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able-bodied person

b. Discrimination on employment
What is the rule on discrimination against employment of PWDs?
No entity, whether public or private, shall discriminate against a qualified PWD by
reason of disability in regard to job application procedures, the hiring, promotion, or discharge
of employees, employee compensation, job training, and other terms, conditions and privileges
of employment. The following constitute acts of discrimination:
(a) Limiting, segregating or classifying a job applicant with disability in such a manner
that adversely affects his work opportunities;
(b) Using qualification standards, employment tests or other selection criteria that
screen out or tend to screen out a PWD unless such standards, tests or other selection
criteria are shown to be job-related for the position in question and are consistent with
business necessity;
 (c) Utilizing standards, criteria, or methods of administration that:
(1) have the effect of discrimination on the basis of disability; or
(2) perpetuate the discrimination of others who are subject to common administrative
control.
(d) Providing less compensation, such as salary, wage or other forms of remuneration
and fringe benefits, to a qualified employee with disability, by reason of his disability,
than the amount to which a nondisabled person performing the same work is entitled;
(e) Favoring a non-disabled employee over a qualified employee with disability with
respect to promotion, training opportunities, study and scholarship grants, solely on
account of the latter’s disability;
(f) Re-assigning or transferring an employee with a disability to a job or position he
cannot perform by reason of his disability;
(g) Dismissing or terminating the services of an employee with disability by reason of his
disability unless the employer can prove that he impairs the satisfactory performance of
the work involved to the prejudice of the business entity; provided, however, that the
employer first sought to provide reasonable accommodations for persons with
disability;
(h) Failing to select or administer in the most effective manner employment tests which
accurately reflect the skills, aptitude or other factor of the applicant or employee with
disability that such tests purports to measure, rather than the impaired sensory, manual
or speaking skills of such applicant or employee, if any; and
(i) Excluding PWD from membership in labor unions or similar organizations.

c. Incentives for employers

What are the rights of PWDs?
Under the law, PWDs are entitled to equal opportunity for employment. Consequently, no
PWD shall be denied access to opportunities for suitable employment. A qualified employee
with disability shall be subject to the same terms and conditions of employment and the
same compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able-bodied person.

What is the wage rate of PWDs?

The wage rate of PWDs is 100% of the applicable minimum wage.

What is the wage rate of PWD if hired as apprentice or learner?

A PWD hired as an apprentice or learner shall be paid not less than seventy-five percent
(75%) of the applicable minimum wage.

3. Gender
a. Discrimination
Art. 135. Discrimination prohibited. It shall be unlawful for any employer to discriminate
against any woman employee with respect to terms and conditions of employment solely on
account of her sex.
 The following are acts of discrimination:
a. Payment of a lesser compensation, including wage, salary or other form of
remuneration and fringe benefits, to a female employees as against a male employee,
for work of equal value; and
 
b. Favoring a male employee over a female employee with respect to promotion, training
opportunities, study and scholarship grants solely on account of their sexes.

Criminal liability for the willful commission of any unlawful act as provided in this Article
or any violation of the rules and regulations issued pursuant to Section 2 hereof shall be
penalized as provided in Articles 288 and 289 of this Code: Provided, That the institution of
any criminal action under this provision shall not bar the aggrieved employee from filing an
entirely separate and distinct action for money claims, which may include claims for
damages and other affirmative reliefs. The actions hereby authorized shall proceed
independently of each other. (As amended by Republic Act No. 6725, May 12, 1989)
b. Stipulation against marriage (Art. 136)
Is the prohibition against marriage valid?
Article 136 of the Labor Code considers as an unlawful act of the employer to require as a
condition for or continuation of employment that a woman employee shall not get married or to
stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed
resigned or separated. It is likewise an unlawful act of the employer, to actually dismiss,
discharge, discriminate or otherwise prejudice a woman employee merely by reason of her
marriage.

What are the relevant pieces of jurisprudence on marriage?

1. Philippine Telegraph and Telephone Company v. NLRC. - It was declared here that the
company policy of not accepting or considering as disqualified from work any woman worker
who contracts marriage runs afoul of the test of, and the right against, discrimination afforded
all women workers by our labor laws and by no less than the Constitution.

2. Star Paper Corp. v. Simbol, Comia and Estrella. - The following policies were struck down as
invalid for violating the standard of reasonableness which is being followed in our jurisdiction,
otherwise called the “Reasonable Business Necessity Rule”: “1. New applicants will not be
allowed to be hired if in case he/she has [a] relative, up to [the] 3rd degree of relationship,
already employed by the company. “2. In case of two of our employees (both singles [sic], one
male and another female) developed a friendly relationship during the course of their
employment and then decided to get married, one of them should resign to preserve the policy
stated above.”

3. Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc. In this case, the
prohibition against marriage embodied in the following stipulation in the employment contract
was held as valid:
“10. You agree to disclose to management any existing or future relationship you may
have, either by consanguinity or affinity with co-employees or employees of competing
 drug companies. Should it pose a possible conflict of interest in management discretion,
you agree to resign voluntarily from the Company as a matter of Company policy.”

The Supreme Court ruled that the dismissal based on this stipulation in the employment
contract is a valid exercise of management prerogative. The prohibition against personal or
marital relationships with employees of competitor companies upon its employees was held
reasonable under the circumstances because relationships of that nature might compromise the
interests of the company. In laying down the assailed company policy, the employer only aims to
protect its interests against the possibility that a competitor company will gain access to its
secrets and procedures.

c. Prohibited acts (Art. 137)

What are the prohibited acts against women under the Labor Code?
Article 137 of the Labor Code and its implementing rule consider unlawful the followings acts of
the employer
1. To discharge any woman employed by him for the purpose of preventing such woman
from enjoying maternity leave, facilities and other benefits provided under the Labor
Code;
2. To discharge such woman on account of her pregnancy, or while on leave or in
confinement due to her pregnancy;
3. To discharge or refuse the admission of such woman upon returning to her work for fear
that she may again be pregnant;
4. To discharge any woman or any other employee for having filed a complaint or having
testified or being about to testify under the Labor Code; or
5. To require as a condition for or continuation of employment that a woman employee
shall not get married or to stipulate expressly or tacitly that upon getting married, a
woman employee shall be deemed resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman employee merely by reason of
marriage.

d. Facilities for women "'

Art. 132. Facilities for women. The Secretary of Labor and Employment shall establish
standards that will ensure the safety and health of women employees. In appropriate cases,
he shall, by regulations, require any employer to:
a. Provide seats proper for women and permit them to use such seats when they are
free from work and during working hours, provided they can perform their duties in
this position without detriment to efficiency;
 
b. To establish separate toilet rooms and lavatories for men and women and provide
at least a dressing room for women;
 
c. To establish a nursery in a workplace for the benefit of the women employees
therein; and
 
 d. To determine appropriate minimum age and other standards for retirement or
termination in special occupations such as those of flight attendants and the like.

e. Women working in night clubs, etc.

Art. 138. Classification of certain women workers. Any woman who is permitted or suffered
to work, with or without compensation, in any night club, cocktail lounge, massage clinic,
bar or similar establishments under the effective control or supervision of the employer for
a substantial period of time as determined by the Secretary of Labor and Employment, shall
be considered as an employee of such establishment for purposes of labor and social
legislation.

4. Minors (R.A. No. 7678, R.A. No. 9231) (Art. 139)

Who is a “child” or “working child”?
For legal purposes, the term “child” refers to any person less than eighteen (18) years of
age.
A “working child” refers to any child engaged as follows:
i. when the child is below eighteen (18) years of age, in work or economic activity that
is not “child labor;” and
ii. when the child below fifteen (15) years of age:
(a) in work where he/she is directly under the responsibility of his/her parents or
legal guardian and where only members of the child’s family are employed; or
(b) in “public entertainment or information” which refers to artistic, literary, and
cultural performances for television show, radio program, cinema or film,
theater, commercial advertisement, public relations activities or campaigns,
print materials, internet, and other media.

What are the working hours of a child?

The term “hours of work” includes (1) all time during which a child is required to
be at a prescribed workplace, and (2) all time during which a child is suffered or
permitted to work. Rest periods of short duration during working hours shall be
counted as hours worked.
The following hours of work shall be observed for any child allowed to work
under R.A. No. 9231 and its Implementing Rules:
(a) For a child below 15 years of age, the hours of work shall not be more than
twenty (20) hours per week, provided that the work shall not be more than
four (4) hours at any given day;
(b) For a child 15 years of age but below 18, the hours of work shall not be
more than eight (8) hours a day, and in no case beyond forty (40) hours a
week; and
(c) No child below 15 years of age shall be allowed to work between eight (8)
o’clock in the evening and six (6) o’clock in the morning of the following
day and no child 15 years of age but below 18 shall be allowed to work
 between ten (10) o’clock in the evening and six (6) o’clock in the morning
of the following day.

What is the prohibition of employing minors in certain undertakings and

advertisements?
No child below 18 years of age is allowed to be employed as a model in any
advertisement directly or indirectly promoting alcoholic beverages, intoxicating drinks,
tobacco and its by-products, gambling or any form of violence or pornography.

5. Kasambahays (R.A. No. 7655)

6. Homeworkers
Art. 153. Regulation of industrial homeworkers. The employment of industrial homeworkers
and field personnel shall be regulated by the government through the appropriate regulations
issued by the Secretary of Labor and Employment to ensure the general welfare and protection
of homeworkers and field personnel and the industries employing them.
Art. 154. Regulations of Secretary of Labor. The regulations or orders to be issued pursuant to
this Chapter shall be designed to assure the minimum terms and conditions of employment
applicable to the industrial homeworkers or field personnel involved.
Art. 155. Distribution of homework. For purposes of this Chapter, the “employer” of
homeworkers includes any person, natural or artificial who, for his account or benefit, or on
behalf of any person residing outside the country, directly or indirectly, or through an employee,
agent contractor, sub-contractor or any other person:
1. Delivers, or causes to be delivered, any goods, articles or materials to be processed or
fabricated in or about a home and thereafter to be returned or to be disposed of or
distributed in accordance with his directions; or
 
2. Sells any goods, articles or materials to be processed or fabricated in or about a home
and then rebuys them after such processing or fabrication, either by himself or through
some other person.

7. Solo parents

8. Night workers

9. Migrant workers

10. Security guards

 IV. POST-EMPLOYMENT

A. Employer-employee relationship
1. Tests to determine existence

2. Legitimate subcontracting contracting as distinguished from labor-only

a. Elements

b. Trilateral relationship

c. Liabilities

3. Kinds of employment
a. Regular
How does one become a regular employee?
Under the Labor Code, regular employment may be attained in either of three (3) ways,
namely:
1. By nature of work. - The employment is deemed regular when the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer.
2. By period of service. - The employment is reckoned as regular when the employee has
rendered at least one (1) year of service, whether such service is continuous or broken,
with respect to the activity in which he is employed and his employment shall continue
while such activity exists.
3. By probationary employment. - The employment is considered regular when the
employee is allowed to work after a probationary period.

Is the manner or method of paying wage material in determining regularity of employment?

No. The manner and method of payment of wage or salary is immaterial to the issue of
whether the employee is regular or not. c

b. Casual
What is the most important distinguishing feature of casual employment?
The most important distinction is that the work or job for which he was hired is merely
incidental to the principal business of the employer and such work or job is for a definite
period made known to the employee at the time of engagement.

When does a casual employee become regular?

 Casual employee becomes regular after one year of service by operation of law. The one
(1) year period should be reckoned from the hiring date. Repeated rehiring of a casual
employee makes him a regular employee.

c. Contractual

d. Project
What is the litmus test of project employment?
The litmus test of project employment, as distinguished from regular employment,
is whether or not the project employees were assigned to carry out a specific project or
undertaking, the duration and scope of which were specified at the time the employees
were engaged for that project.
A true project employee should be assigned to a project which begins and ends at
determined or determinable times and be informed thereof at the time of hiring.

What are the indicators of project employment?

Either one or more of the following circumstances, among others, may be
considered as indicator/s that an employee is a project employee:
1. The duration of the specific/identified undertaking for which the worker is
engaged is reasonably determinable.
2. Such duration, as well as the specific work/service to be performed, are
defined in an employment agreement and is made clear to the employee at
the time of hiring.
3. The work/service performed by the employee is in connection with the
particular project or undertaking for which he is engaged.
4. The employee, while not employed and awaiting engagement, is free to offer
his services to any other employer.
5. A report of the termination of employment in the particular
project/undertaking is submitted to the DOLE Regional Office having
jurisdiction over the workplace, within thirty (30) days following the date of
his separation from work.
6. An undertaking in the employment contract by the employer to pay
completion bonus to the project employee as practiced by most construction
companies.

Is length of service material in determining validity of project employment?

No. Length of service is not a controlling determinant of employment tenure.

What are some principles on project employment?

1. Project employees should be informed of their status as such at inception of the
employment relationship.
 2. There must be a written contract of project employment stating the duration of the
project employment as well as the particular work or service to be performed. A
written project employment contract is an indispensable requirement.
3. Intervals in employment contracts indicate project employment.
4. Continuous, as opposed to intermittent, rehiring shows that employee is regular.
5. “Project-to-project” basis of employment is valid.

On termination of project employment.

1. Project employees enjoy security of tenure only during the term of their project
employment.
2. Project employees have presumably become regular employees if they are allowed
to work beyond the completion of the project or any phase thereof to which they
were assigned or after the “day certain” which they and their employer have
mutually agreed for its completion. Having become regular employees, they can no
longer be terminated on the basis of the completion of the project or any phase
thereof to which they were deployed

e. Seasonal
Can a seasonal employee become a regular seasonal employee?
Yes, provided the following requisites are complied with:

1. The seasonal employee should perform work or services that are seasonal in nature;
and
2. They must have also been employed for more than one (1) season.

Can a regular seasonal worker file an illegal dismissal case in the event he is not hired for the
next season?
Yes. The reason is, being a regular seasonal employee, the employer should re-hire him
in the next season. During off-season, his employment is deemed suspended and he is
considered as being on leave of absence without pay.

f. Fixed-term
What are the requisites in order for fixed-term employment to be valid?
The two (2) requisites or criteria for the validity of a fixed-term contract of employment
are as follows:
1. The fixed period of employment was knowingly and voluntarily agreed upon by the
parties, without any force, duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his consent; or
2. It satisfactorily appears that the employer and employee dealt with each other on
more or less equal terms with no moral dominance whatever being exercised by the
former on the latter.

Is fixed-term employment valid if the job is directly related to the principal business of the
employer?
 Yes. Fixed-term employment is the only exception to the rule that one becomes regular
if he is made to perform activities directly related to the principal business of the employer
(Regularity by virtue of nature of work)

When does a fixed-term employee become regular?

ƒ When he is allowed to work beyond the agreed fixed term.
ƒ When there are successive renewals of fixed-period contracts.

NOTE: The practice of hiring of employees on a uniformly fixed 5-month basis and
replacing them upon the expiration of their contracts with other workers with the same
employment status circumvents their right to security of tenure.

g. Probationary; private school teachers

B. Termination by employer (Art. 297)

1. Requisites for validity
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.

a. Substantive due process

What is meant by two-fold due process requirement?
Dismissal of employees requires the observance of the two-fold due process requisites,
namely:
1. Substantive aspect which means that the dismissal must be for any of the (1) just
causes provided under Article 282 of the Labor Code or the company rules and
regulations promulgated by the employer; or (2) authorized causes under Articles
283 and 284 thereof; and
 2. Procedural aspect which means that the employee must be accorded due process,
the elements of which are notice and the opportunity to be heard and to defend
himself.

What is the distinction between JUST CAUSES and AUTHORIZED CAUSES?

A dismissal based on a just cause means that the employee has committed a wrongful
act or omission; while a dismissal based on an authorized cause means that there exists a
ground which the law itself allows or authorizes to be invoked to justify the termination of
an employee even if he has not committed any wrongful act or omission such as installation
of labor-saving devices, redundancy, retrenchment, closure or cessation of business
operations or disease.

i. Just causes
What are the just causes under the Labor Code?
The just causes in the Labor Code are found in the following provisions thereof:
(1) Article 282 - (Termination by the Employer) which provides for the following
grounds:
(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.

(2) Article 264(a) - (Prohibited Activities) which provides for the termination of
the following:
(a) Union officers who knowingly participate in an illegal strike and
therefore deemed to have lost their employment status.
(b) Any employee, union officer or ordinary member who knowingly
participates in the commission of illegal acts during a strike
(irrespective of whether the strike is legal or illegal), is also deemed
to have lost his employment status.

(3) Article 263(g) - (National Interest Cases) where strikers who violate orders,
prohibitions and/or injunctions as are issued by the DOLE Secretary or the
NLRC, may be imposed immediate disciplinary action, including dismissal or
loss of employment status.

(4) Article 248(e) - (Union Security Clause) where violation of the union security
agreement in the CBA may result in termination of employment. Under this
 clause, the bargaining union can demand from the employer the dismissal
of an employee who commits a breach of union security arrangement, such
as failure to join the union or to maintain his membership in good standing
therein. The same union can also demand the dismissal of a member who
commits an act of disloyalty against it, such as when the member organizes
a rival union.

What are just causes under jurisprudence?

In addition to the just causes mentioned in the Labor Code, just causes
are also found in prevailing jurisprudence. The following may be cited as just
causes in accordance with prevailing jurisprudence:
1. Violation of company rules and regulations.
2. Theft of property owned by a co-employee as distinguished from
company-owned property which is considered serious misconduct.
3. Incompetence, inefficiency or ineptitude.
4. Failure to attain work quota.
5. Failure to comply with weight standards of employer. 6. Attitude
problem.

ii. Authorized causes

b. Procedural due process

2. Preventive suspension
When is preventive suspension proper to be imposed?
Preventive suspension may be legally imposed against an errant employee only while he is
undergoing an investigation for certain serious offenses. Consequently, its purpose is to prevent
him from causing harm or injury to the company as well as to his fellow employees. It is
justified only in cases where the employee’s continued presence in the company premises during
the investigation poses a serious and imminent threat to the life or property of the employer or
of the employee’s co-workers. Without this threat, preventive suspension is not proper.

What are some relevant principles in preventive suspension?

• Preventive suspension is not a penalty. Preventive suspension, by itself, does not signify
that the company has already adjudged the employee guilty of the charges for which
she was asked to answer and explain.
• Preventive suspension is neither equivalent nor tantamount to dismissal.
• If the basis of the preventive suspension is the employee’s absences and tardiness, the
imposition of preventive suspension on him is not justified as his presence in the
company premises does not pose any such serious or imminent threat to the life or
 property of the employer or of the employee’s co-workers simply “by incurring repeated
absences and tardiness.”
• Preventive suspension does not mean that due process may be disregarded.
• Preventive suspension should only be for a maximum period of thirty (30) days. After the
lapse of the 30-day period, the employer is required to reinstate the worker to his
former position or to a substantially equivalent position.
• During the 30-day preventive suspension, the worker is not entitled to his wages and
other benefits. However, if the employer decides, for a justifiable reason, to extend the
period of preventive suspension beyond said 30-day period, he is obligated to pay the
wages and other benefits due the worker during said period of extension. In such a case,
the worker is not bound to reimburse the amount paid to him during the extension if
the employer decides to dismiss him after the completion of the investigation.
• Extension of period must be justified. During the 30-day period of preventive suspension,
the employer is expected to conduct and finish the investigation of the employee’s
administrative case. The period of thirty (30) days may only be extended if the employer
failed to complete the hearing or investigation within said period due to justifiable
grounds. No extension thereof can be made based on whimsical, capricious or
unreasonable grounds.
• Preventive suspension lasting longer than 30 days, without the benefit of valid extension,
amounts to constructive dismissal.
• Indefinite preventive suspension amounts to constructive dismissal.

3. Illegal dismissal
a. Kinds
i. No just or authorized cause

ii. Constructive dismissal

1) Burden of proof

2) Liability of officers

3) Reliefs from illegal dismissal

4. Money claims arising from employer-employee relationship

5. When not deemed dismissed; employee on floating status

C. Termination by employee
1. With notice to the employer

2. Without notice to the employer

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;
 
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.

3. Distinguish voluntary resignation and constructive dismissal

Voluntary resignation is defined as a voluntary act committed by employees who knowingly
dissociate themselves from their employment for personal reasons. It does not cover instances
where employees are forced to resign with the use of threats, intimidation, coercion,
manipulation, or where dismissal is imposed as a penalty for an offense. Forced or coerced
resignation is illegal and considered “constructive” dismissal – a dismissal in disguise.

When is there constructive dismissal?

Constructive dismissal contemplates any of the following situations:
1) An involuntary resignation resorted to when continued employment is rendered impossible,
unreasonable or unlikely;
2) A demotion in rank and/or a diminution in pay; or
3) A clear discrimination, insensibility or disdain by an employer which becomes unbearable to
the employee that it could foreclose any choice by him except to forego his continued
employment.

What is the test of constructive dismissal?

The test of constructive dismissal is whether a reasonable person in the employee’s position
would have felt compelled to give up his position under the circumstances. It is an act
amounting to dismissal but made to appear as if it were not. In fact, the employee who is
 constructively dismissed may be allowed to keep on coming to work. Constructive dismissal is,
therefore, a dismissal in disguise. The law recognizes and resolves this situation in favor of the
employees in order to protect their rights and interests from the coercive acts of the employer.

What are examples of constructive dismissal or forced resignation?

 Denying to the workers entry to their work area and placing them on shifts “not by weeks
but almost by month” by reducing their workweek to three days.
 Barring the employees from entering the premises whenever they would report for work in
the morning without any justifiable reason, and they were made to wait for a certain
employee who would arrive in the office at around noon, after they had waited for a long
time and had left.
 Sending to an employee a notice of indefinite suspension which is tantamount to dismissal.
 Imposing indefinite preventive suspension without actually conducting any investigation.
 Changing the employee’s status from regular to casual constitutes constructive dismissal.
 Preventing the employee from reporting for work by ordering the guards not to let her in.
This is clear notice of dismissal.

D. Retirement
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.

V. LABOR RELATIONS

A. Right to self-organization
1. Who may or may not exercise the right
a. Doctrine of necessary implication
 Doctrine of Necessary Implication which holds that:
No statute can be enacted that can provide all the details involved in its application. There is
always an omission that may not meet a particular situation. What is thought, at the time of
enactment, to be an all-embracing legislation may be inadequate to provide for the unfolding
events of the future. So-called gaps in the law develop as the law is enforced. One of the rules of
statutory construction used to fill in the gap is the doctrine of necessary implication. The
doctrine states that what is implied in a statute is as much a part thereof as that which is
expressed. Every statute is understood, by implication, to contain all such provisions as may be
necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or
jurisdiction which it grants, including all such collateral and subsidiary consequences as may be
fairly and logically inferred from its terms. Ex necessitate legis. And every statutory grant of
power, right or privilege is deemed to include all incidental power, right or privilege. This is so
because the greater includes the lesser, expressed in the Maxim, in eo plus sit, simper inest et
minus. 18

2. Commingling or mixture of membership

3. Rights and conditions of membership

a. Nature of relationship
i. Member-Labor union

ii. Labor union federation

(a) Disaffiliation

(b) Substitutionary doctrine

B. Bargaining unit
What is a bargaining unit?
A “bargaining unit” refers to a group of employees sharing mutual interests within a
given employer unit, comprised of all or less than all of the entire body of employees in the
employer unit or any specific occupational or geographical grouping within such employer unit.
It may also refer to the group or cluster of jobs or positions within the employer’s establishment
that supports the labor organization which is applying for registration.

C. Bargaining representative
1. Determination of representation status

D. Rights of labor organizations

1. Check off, assessment, agency fees
2. Collective bargaining
a. Duty to bargain collectively
1. CONCEPT.
When there is a CBA, the duty to bargain collectively shall mean that neither party shall
terminate nor modify such agreement during its lifetime. However, either party can serve a
written notice to terminate or modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to keep the status quo and to continue
in full force and effect the terms and conditions of the existing agreement during the 60day
period and/or until a new agreement is reached by the parties.

2. FREEDOM PERIOD.
The last sixty (60) days of the 5-year lifetime of a CBA immediately prior to its expiration
is called the “freedom period.” It is denominated as such because it is the only time when
the law allows the parties to freely serve a notice to terminate, alter or modify the existing
CBA. It is also the time when the majority status of the bargaining agent may be challenged
by another union by filing the appropriate petition for certification election.

3. AUTOMATIC RENEWAL CLAUSE.

a. Automatic renewal clause deemed incorporated in all CBAs.
Pending the renewal of the CBA, the parties are bound to keep the status quo and
to treat the terms and conditions embodied therein still in full force and effect during
the 60-day freedom period and/or until a new agreement is negotiated and ultimately
concluded and reached by the parties. This principle is otherwise known as the
“automatic renewal clause” which is mandated by law and therefore deemed
incorporated in all CBAs.
For its part, the employer cannot discontinue the grant of the benefits embodied in
the CBA which just expired as it is duty-bound to maintain the status quo by continuing
to give the same benefits until a renewal thereof is reached by the parties. On the part
of the union, it has to observe and continue to abide by its undertakings and
commitments under the expired CBA until the same is renewed.

4. KIOK LOY DOCTRINE.

This doctrine is based on the ruling In Kiok Loy v. NLRC, where the petitioner,
Sweden Ice Cream Plant, refused to submit any counter-proposal to the CBA proposed
by its employees’ certified bargaining agent. The High Court ruled that the employer had
thereby lost its right to bargain the terms and conditions of the CBA. Thus, the CBA
proposed by the union was imposed lock, stock and barrel on the erring company.

The Kiok Loy case epitomizes the classic case of negotiating a CBA in bad faith
consisting of the employer’s refusal to bargain with the collective bargaining agent by
ignoring all notices for negotiations and requests for counter-proposals. Such refusal to
 send a counter-proposal to the union and to bargain on the economic terms of the CBA
constitutes an unfair labor practice under Article 248(g) of the Labor Code.

b. Collective Bargaining Agreement

i. Mandatory provisions in a Collective Bargaining Agreement
1. MANDATORY STIPULATIONS OF THE CBA.
The Syllabus mentions 4 provisions that are mandatorily required to be stated in the
CBA, to wit:
1. Grievance Procedure;
1. “GRIEVANCE” OR “GRIEVABLE ISSUE”.
A “grievance” or “grievable issue” is any question raised by
either the employer or the union regarding any of the following
issues or controversies:
1. The interpretation or implementation of the CBA;
2. The interpretation or enforcement of company personnel
policies; or
3. Any claim by either party that the other party is violating any
provisions of the CBA or company personnel policies.

In order to be grievable, the violations of the CBA should be

ordinary and not gross in character; otherwise, they shall be
considered as unfair labor practice (ULP).

Gross violation of the CBA is defined as flagrant and/or

malicious refusal by a party thereto to comply with the economic
provisions thereof. If what is violated, therefore, is a non-economic
or a political provision of the CBA, the same shall not be considered
as unfair labor practice and may thus be processed as a grievable
issue in accordance with and following the grievance machinery laid
down in the CBA.

2. GRIEVANCE MACHINERY.
“Grievance machinery” refers to the mechanism for the
adjustment and resolution of grievances arising from the
interpretation or implementation of a CBA and those arising from
the interpretation or enforcement of company personnel policies.

3. GRIEVANCE PROCEDURE.
“Grievance procedure” refers to the internal rules of procedure
established by the parties in their CBA with voluntary arbitration as
the terminal step, which are intended to resolve all issues arising
from the implementation and interpretation of their collective
agreement. It is that part of the CBA which provides for a peaceful
 way of settling differences and misunderstanding between the
parties.
The terms “grievance procedure” and “grievance machinery”
may be used interchangeably.

2. Voluntary Arbitration;
1. VOLUNTARY ARBITRATION.
“Voluntary arbitration” refers to the mode of settling labor-
management disputes in which the parties select a competent,
trained and impartial third person who is tasked to decide on the
merits of the case and whose decision is final and executory.

2. VOLUNTARY ARBITRATOR.
A “Voluntary Arbitrator” refers to any person who has been
mutually named or designated by the parties to the CBA – the
employer and the bargaining agent - to hear and decide the issues
between them. A Voluntary Arbitrator is not an employee,
functionary or part of the government or of the Department of Labor
and Employment, but he is authorized to render arbitration services
provided under labor laws.

3. No Strike-No Lockout Clause; and

1. SIGNIFICANCE OF THE CLAUSE.
A “No Strike, No Lockout” clause in the CBA is an expression of
the firm commitment of the parties thereto that, on the part of the
union, it will not mount a strike during the effectivity of the CBA, and
on the part of the employer, that it will not stage a lockout during
the lifetime thereof.

This clause may be invoked by an employer only when the strike

is economic in nature or one which is conducted to force wage or
other concessions from the employer that are not mandated to be
granted by the law itself. It does not bar strikes grounded on unfair
labor practices. This is so because it is presumed that all economic
issues between the employer and the bargaining agent are deemed
resolved with the signing of the CBA.

The same rule also applies in case of lockout. The said clause
may only be invoked by the union in case the ground for the lockout
is economic in nature but it may not be so cited if the ground is
unfair labor practice committed by the union.

2. EFFECT OF VIOLATION OF THE CLAUSE. A strike conducted in violation

of this clause is illegal.
 4. Labor-Management Council (LMC).
1. CREATION OF LMC, CONSTITUTIONALLY AND LEGALLY JUSTIFIED.
The Labor-Management Council (LMC) whose creation is
mandated under the Labor Code, is meant to implement the
constitutionally mandated right of workers to participate in policy and
decision-making processes of the establishment where they are
employed insofar as said processes will directly affect their rights,
benefits and welfare. This is the body that implements the policy of co-
determination in the Constitution.
The LMC is mandated to be created in both organized and
unorganized establishments.

2. SELECTION OF REPRESENTATIVES TO LMC.

In organized establishments, the workers’ representatives to
the committee or council should be nominated by the exclusive
bargaining representative. In establishments where no legitimate labor
organization exists, the workers’ representative should be elected
directly by the employees at large.

3. LABOR-MANAGEMENT COUNCIL (LMC) VS. GRIEVANCE MACHINERY

(GM).
To avoid confusion and possible major legal complication, a
clear distinction line should be drawn between LMC and GM. The
following may be cited:
1. Constitutional origin. – The creation of the LMC is based on
the constitutional grant to workers of the right to participate in policy
and decision-making processes under the 1st paragraph, Section 3,
Article XIII of the 1987 Constitution, thus:
“It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They
shall also participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law.”
The creation of a GM, on the other hand, is based on a different
constitutional provision, the 2nd paragraph, Section 3, Article XIII of the 1987
Constitution, which provides as follows:
“The State shall promote the principle of shared
responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.”
 2. Legal anchor. - The creation of LMC is provided under Article 255 of
the Labor Code; while the formation of a GM is mandated under Article 260 of
the same Code.
3. Compulsory provision in the CBA. - Both LMC and GM are
compulsorily required to be embodied in the CBA in order for it to be
considered a valid agreement.
4. Purpose for creation. - The LMC is created for the purpose of
affording workers the right to participate in policy and decision-making
processes in matters affecting their rights, benefits and welfare; while that of
the GM is to resolve disputes and grievances arising from such policies or
decisions or more specifically, to adjust and resolve grievances arising from (1)
the interpretation or implementation of the CBA or (2) the interpretation or
enforcement of company personnel policies.
5. Nature of functions. - The LMC is in the nature of a preventive
mechanism meant to prevent and avoid disputes or grievances by co-
determining the proper policies that should be implemented by the employer in
respect of the workers’ rights, benefits and welfare; while a GM is an
adjudicatory mechanism which is set into motion only when a dispute or
grievance occurs.
6. Nature of cognizable issues. – The LMC performs non-adversarial and
non-adjudicatory tasks as it concerns itself only with policy formulations and
decisions affecting the workers’ rights, benefits and welfare and not violations
or transgressions of any policy, rule or regulation; while that of the GM is
adversarial and adjudicatory in character since its jurisdiction is confined to
resolving and deciding disputes and grievances between management and the
workers arising from violations or transgressions of existing policies, rules or
regulations. In other words, the LMC does not resolve grievable or contentious
issues; the GM does.
A case illustrative of this principle is the 2011 case of Cirtek Employees
Labor Union-Federation of Free Workers v. Cirtek Electronics, Inc. The CBA
negotiation between petitioner union and respondent company was deadlocked
resulting in the staging of a strike by the former. The DOLE Secretary assumed
jurisdiction over the labor dispute but before he could rule on the controversy,
respondent created a Labor-Management Council (LMC) through which it
concluded with the remaining officers of petitioner a Memorandum of
Agreement (MOA) providing for daily wage increases of P6.00 per day effective
January 1, 2004 and P9.00 per day effective January 1, 2005. Petitioner
submitted the MOA to the DOLE Secretary, alleging that the remaining officers
signed the MOA under respondent’s assurance that should the Secretary order a
higher award of wage increase, respondent would comply.
Respecting the MOA, petitioner posits that it was “surreptitiously
entered into [in] bad faith,” it having been forged without the assistance of the
Federation of Free Workers or counsel, adding that respondent could have
 waited for the Secretary’s resolution of the pending CBA deadlock or that the
MOA could have been concluded before representatives of the DOLE Secretary.
As found by the DOLE Secretary, the MOA came about as a result of the
constitution, at respondent's behest, of the LMC which, he reminded the
parties, should not be used as an avenue for bargaining but for the purpose of
affording workers to participate in policy and decision-making. Hence, the
agreements embodied in the MOA were not the proper subject of the LMC
deliberation or procedure but of CBA negotiations and, therefore, deserving
little weight.
7. Composition. - The representatives of the workers to the LMC may or
may not be nominated by the recognized or certified bargaining agent,
depending on whether the establishment is organized or unorganized. Thus, in
organized establishments, the workers’ representatives to the LMC should be
nominated by the exclusive bargaining agent. In establishments where no
legitimate labor organization exists, the workers’ representatives should be
elected directly by the employees of the establishment at large; while those in
the GM are nominated solely by the bargaining agent.

If these provisions are not reflected in the CBA, its registration will be denied by the
BLR.

E. Unfair labor practices

1. Nature, aspects
Art. 247. Concept of unfair labor practice and procedure for prosecution thereof. Unfair labor
practices violate the constitutional right of workers and employees to self-organization, are
inimical to the legitimate interests of both labor and management, including their right to
bargain collectively and otherwise deal with each other in an atmosphere of freedom and
mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-
management relations.
Consequently, unfair labor practices are not only violations of the civil rights of both labor and
management but are also criminal offenses against the State which shall be subject to
prosecution and punishment as herein provided.
Subject to the exercise by the President or by the Secretary of Labor and Employment of the
powers vested in them by Articles 263 and 264 of this Code, the civil aspects of all cases
involving unfair labor practices, which may include claims for actual, moral, exemplary and other
forms of damages, attorney’s fees and other affirmative relief, shall be under the jurisdiction of
the Labor Arbiters. The Labor Arbiters shall give utmost priority to the hearing and resolution of
all cases involving unfair labor practices. They shall resolve such cases within thirty (30) calendar
days from the time they are submitted for decision.
Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil
Code.
 No criminal prosecution under this Title may be instituted without a final judgment finding that
an unfair labor practice was committed, having been first obtained in the preceding paragraph.
During the pendency of such administrative proceeding, the running of the period of
prescription of the criminal offense herein penalized shall be considered interrupted: Provided,
however, that the final judgment in the administrative proceedings shall not be binding in the
criminal case nor be considered as evidence of guilt but merely as proof of compliance of the
requirements therein set forth. (As amended by Batas Pambansa Bilang 70, May 1, 1980 and
later further amended by Section 19, Republic Act No. 6715, March 21, 1989)

2. By employers
Art. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any
of the following unfair labor practice:
a. To interfere with, restrain or coerce employees in the exercise of their right to self-
organization; b. To require as a condition of employment that a person or an employee shall
not join a labor organization or shall withdraw from one to which he belongs; c. To contract out
services or functions being performed by union members when such will interfere with, restrain
or coerce employees in the exercise of their rights to self-organization; d. To initiate, dominate,
assist or otherwise interfere with the formation or administration of any labor organization,
including the giving of financial or other support to it or its organizers or supporters; e. To
discriminate in regard to wages, hours of work and other terms and conditions of employment
in order to encourage or discourage membership in any labor organization. Nothing in this Code
or in any other law shall stop the parties from requiring membership in a recognized collective
bargaining agent as a condition for employment, except those employees who are already
members of another union at the time of the signing of the collective bargaining agreement.
Employees of an appropriate bargaining unit who are not members of the recognized collective
bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid
by members of the recognized collective bargaining agent, if such non-union members accept
the benefits under the collective bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph (o) of this Code shall not apply to the non-
members of the recognized collective bargaining agent; f. To dismiss, discharge or otherwise
prejudice or discriminate against an employee for having given or being about to give testimony
under this Code;
g. To violate the duty to bargain collectively as prescribed by this Code; h. To pay negotiation or
attorney’s fees to the union or its officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute; or i. To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers and agents of
corporations, associations or partnerships who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable. (As amended by Batas Pambansa
Bilang 130, August 21, 1981)

3. By labor organizations
Art. 249. Unfair labor practices of labor organizations. It shall be unfair labor practice for a labor
organization, its officers, agents or representatives:
 a. To restrain or coerce employees in the exercise of their right to selforganization. However, a
labor organization shall have the right to prescribe its own rules with respect to the acquisition
or retention of membership; b. To cause or attempt to cause an employer to discriminate
against an employee, including discrimination against an employee with respect to whom
membership in such organization has been denied or to terminate an employee on any ground
other than the usual terms and conditions under which membership or continuation of
membership is made available to other members; c. To violate the duty, or refuse to bargain
collectively with the employer, provided it is the representative of the employees; d. To cause
or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other
things of value, in the nature of an exaction, for services which are not performed or not to be
performed, including the demand for fee for union negotiations; e. To ask for or accept
negotiation or attorney’s fees from employers as part of the settlement of any issue in collective
bargaining or any other dispute; or f. To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers, members of
governing boards, representatives or agents or members of labor associations or organizations
who have actually participated in, authorized or ratified unfair labor practices shall be held
criminally liable. (As amended by Batas Pambansa Bilang 130, August 21, 1981)

F. Peaceful concerted activities

1. FORMS OF CONCERTED ACTIVITIES.
There are three (3) forms of concerted activities, namely:
1. Strike;
2. Lockout; and
3. Picketing.

1. By labor organization
a. Strike
2. STRIKE.
“Strike” means any temporary stoppage of work by the concerted action of the
employees as a result of an industrial or labor dispute.
b. Forms and classification of strikes.
A strike may be classified:
1. As to nature:
a. Legal strike - one called for a valid purpose and conducted through means
allowed by law.
b. Illegal strike - one staged for a purpose not recognized by law or, if for a
valid purpose, it is conducted through means not sanctioned by law.
c. Economic strike - one declared to demand higher wages, overtime pay,
holiday pay, vacation pay, etc. It is one which is declared for the purpose
of forcing wage or other concessions from the employer for which he is
not required by law to grant.
d. Unfair labor practice (ULP) or political strike - one called to protest against
the employer’s unfair labor practices enumerated in Article 248 of the
 Labor Code, including gross violation of the CBA under Article 261 and
union-busting under Article 263(c) of the Labor Code.
e. Slowdown strike - one staged without the workers quitting their work but
by merely slackening or reducing their normal work output. It is also
called “a strike on the installment plan.”
f. Mass leaves - One where the employees simultaneously filed leaves of
absence based on various reasons such as, inter alia, vacation and sick
leaves.
g. Wildcat strike - one declared and staged without the majority approval of
the recognized bargaining agent.
h. Sitdown strike - one where the workers stop working but do not leave their
place of work.
i. Overtime boycott – one involving the act of the workers in refusing to
render overtime work in violation of the CBA, resorted to as a means to
coerce the employer to yield to their demands.
j. Boycott of products – one which involves the concerted refusal to patronize
an employer's goods or services and to persuade others to a like refusal.
k. Attempts to damage, destroy or sabotage plant equipment and facilities
and similar activities;
l. The sporting by the workers of closely cropped hair or cleanly shaven heads
after their union filed a notice of strike as a result of a CBA deadlock is a
form of illegal strike.

2. As to coverage:
a. General strike – one which covers and extends over a whole province or
country. In this kind of strike, the employees of various companies and
industries cease to work in sympathy with striking workers of another
company. It is also resorted to for the purpose of putting pressure on the
government to enact certain labor-related measures such as mandated
wage increases or to cease from implementing a law which workers
consider inimical to their interest. It is also mounted for purposes of
paralyzing or crippling the entire economic dispensation.
b. Particular strike – one which covers a particular establishment or employer
or one industry involving one union or federation.

3. As to purpose:
a. Economic strike.
b. Unfair labor practice strike or political strike.

4. As to the nature of the strikers’ action:

a. Partial strike – one which consists of unannounced work stoppages
such as slowdowns, walkouts or unauthorized extension of rest
periods.
b. Sit-down strike.
 c. Slowdown strike.

5. As to the extent of the interest of strikers:

a. Primary strike – refers to a strike conducted by the workers against
their employer, involving a labor dispute directly affecting them.
b. Secondary strike - refers to a strike staged by the workers of an
employer involving an issue which does not directly concern or affect
their relationship but rather, by some circumstances affecting the
workers such as when the employer persists to deal with a third
person against whom the workers have an existing grievance.
Workers stage this kind of strike to secure the economic assistance
of their employer to force the third person to yield to the union on
the issues involving it and said third person.

c. Sympathy strike - refers to a strike where the strikers have no

demands or grievances or labor dispute of their own against their
employer but nonetheless stage the strike for the purpose of aiding,
directly or indirectly, other strikers in other establishments or
companies, without necessarily having any direct relation to the
advancement of the strikers’ interest. This is patently an illegal
strike. An example of a sympathy strike is the “welga ng bayan”
where workers refuse to render work to join a general strike which
does not involve a labor or industrial dispute between the strikers
and the employer struck against but it is staged in pursuit of certain
ends such as reduction in the electric power rates, increase in the
legislated wages, etc.

a. Valid strikes as distinguished from illegal strikes

b. Picket
3. PICKETING. “Picketing” is the act of workers in peacefully marching to and fro before an
establishment involved in a labor dispute generally accompanied by the carrying and display
of signs, placards and banners intended to inform the public about the dispute.

2. By employer
a. Lockout
4. LOCKOUT. “Lockout” means the temporary refusal by an employer to furnish work as
a result of an industrial or labor dispute.
It consists of the following:
1. Shutdowns;
2. Mass retrenchment and dismissals initiated by the employer.
3. The employer’s act of excluding employees who are union members.
3. Assumption of jurisdiction by Secretary of Labor and Employment
1. WHEN DOLE SECRETARY MAY ASSUME OR CERTIFY A LABOR DISPUTE.
Article 263(g) of the Labor Code provides that when in the opinion of the DOLE Secretary,
the labor dispute causes or will likely to cause a strike or lockout in an industry indispensable to
the national interest, he is empowered to do either of 2 things:
1. He may assume jurisdiction over the labor dispute and decide it himself; or
2. He may certify it to the NLRC for compulsory arbitration, in which case, it will be the NLRC
which shall hear and decide it.

This power may be exercised by the DOLE Secretary even before the actual staging of a
strike or lockout since Article 263(g) does not require the existence of a strike or lockout but
only of a labor dispute involving national interest.

a. Industry indispensable to the national interest

2. WHAT CONSTITUTES A NATIONAL INTEREST CASE?
The Labor Code vests in the DOLE Secretary the discretion to determine what
industries are indispensable to the national interest. Accordingly, upon the
determination by the DOLE Secretary that such industry is indispensable to the national
interest, he has authority to assume jurisdiction over the labor dispute in the said
industry or certify it to the NLRC for compulsory arbitration.
Past issuances of the DOLE Secretary have not made nor attempted to mention
specifically what the industries indispensable to the national interest are. It was only in
Department Order No. 40-H-13, Series of 2013, that certain industries were specifically
named, thus:
“Section 16. Industries Indispensable to the National Interest. – For the
guidance of the workers and employers in the filing of petition for assumption
of jurisdiction, the following industries/services are hereby recognized as
deemed indispensable to the national interest:
a. Hospital sector;
b. Electric power industry;
c. Water supply services, to exclude small water supply services such as
bottling and refilling stations;
d. Air traffic control; and
e. Such other industries as may be recommended by the National
Tripartite Industrial Peace Council (TIPC).”
Obviously, the above enumerated industries are not exclusive as other industries
may be considered indispensable to the national interest based on the appreciation and
discretion of the DOLE Secretary or as may be recommended by TIPC.

3. DIFFERENT RULE ON STRIKES AND LOCKOUTS IN HOSPITALS, CLINICS AND MEDICAL

INSTITUTIONS.
As a general rule, strikes and lockouts in hospitals, clinics and similar medical
institutions should be avoided.
 In case a strike or lockout is staged, it shall be the duty of the striking union or
locking-out employer to provide and maintain an effective skeletal workforce of medical
and other health personnel whose movement and services shall be unhampered and
unrestricted as are necessary to insure the proper and adequate protection of the life
and health of its patients, most especially emergency cases, for the duration of the strike
or lockout.

The DOLE Secretary may immediately assume, within twenty four (24) hours from
knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or
certify it to the NLRC for compulsory arbitration

b. Effects of assumption of jurisdiction

VI. MANAGEMENT PREROGATIVE

What are management prerogatives?

Management prerogatives are granted to the employer to regulate every aspect of their
business, generally without restraint in accordance with their own discretion and judgment. This
privilege is inherent in the right of employers to control and manage their enterprise effectively. Such
aspects of employment include hiring, work assignments, working methods, time, place and manner of
work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer
of employees, lay-off of workers and the discipline, dismissal and recall of workers.
What are the limitations to the exercise of these prerogatives?
1. Limitations imposed by:
a) law;
b) CBA;
c) employment contract;
d) employer policy;
e) employer practice; and
f) general principles of fair play and justice.
2. It is subject to police power.
3. Its exercise should be without abuse of discretion.
4. It should be done in good faith and with due regard to the rights of labor.

A. Discipline
What are the components of the right to discipline? The right or prerogative to discipline covers
the following:
1) Right to discipline;
2) Right to dismiss;
3) Right to determine who to punish;
4) Right to promulgate rules and regulations;
 5) Right to impose penalty; proportionality rule;
6) Right to choose which penalty to impose; and
7) Right to impose heavier penalty than what the company rules prescribe.

B. Transfer or employees
What are the kinds of transfer?
a. Two (2) kinds of transfer. - A transfer means a movement:
1. From one position to another of equivalent rank, level or salary, without a
break in the service; or
2. From one office to another within the same business establishment.

What are salient points to consider in transfer?

 The exercise of the prerogative to transfer or assign employees from one office or area of
operation to another is valid provided there is no demotion in rank or diminution of salary,
benefits and other privileges. The transfer should not be motivated by discrimination or
made in bad faith or effected as a form of punishment or demotion without sufficient cause.
 Commitment made by the employee like a salesman in the employment contract to be re-
assigned anywhere in the Philippines is binding on him.
 Even if the employee is performing well in his present assignment, management may
reassign him to a new post.
 The transfer of an employee may constitute constructive dismissal when
1) When the transfer is unreasonable, inconvenient or prejudicial to the employee;
2) When the transfer involves a demotion in rank or diminution of salaries, benefits and
other privileges; and
3) When the employer performs a clear act of discrimination, insensibility, or disdain
towards the employee, which forecloses any choice by the latter except to forego his
continued employment.
 The refusal of an employee to be transferred may be held justified if there is a showing that
the transfer was directed by the employer under questionable circumstances. For instance,
the transfer of employees during the height of their union’s concerted activities in the
company where they were active participants is illegal.
 An employee who refuses to be transferred, when such transfer is valid, is guilty of
insubordination or willful disobedience of a lawful order of an employer under Article 282 of
the Labor Code.
 Refusal to transfer due to parental obligations, additional expenses, inconvenience, hardship
and anguish is not valid. An employee could not validly refuse lawful orders to transfer
based on these grounds.
 Refusal to transfer to overseas assignment is valid.
 Refusal to transfer consequent to promotion is valid.
 Transfer to avoid conflict of interest is valid.
 A transfer from one position to another occasioned by the abolition of the position is valid.

C. Productivity standards
 How may productivity standards be imposed?
The employer has the prerogative to prescribe the standards of productivity which the
employees should comply. The productivity standards may be used by the employer as:
1. an incentive scheme; and/or
2. a disciplinary scheme.

As an incentive scheme, employees who surpass the productivity standards or quota are
usually given additional benefits.

As a disciplinary scheme, employees may be sanctioned or dismissed for failure to meet

the productivity standards or quota.

• Illustrative cases:
In the 2014 case of International School Manila v. International School Alliance
of Educators (ISAE), the teacher was held guilty of gross inefficiency meriting her
dismissal on the basis of the Court’s finding that she failed to measure up to the
standards set by the school in teaching Filipino classes.
In the 2012 case of Reyes-Rayel v. Philippine Luen Thai Holdings Corp., the
validity of the dismissal of petitioner who was the Corporate Human Resources (CHR)
Director for Manufacturing of respondent company, on the ground of inefficiency and
ineptitude, was affirmed on the basis of the Court’s finding that petitioner, on two
occasions, gave wrong information regarding issues on leave and holiday pay which
generated confusion among employees in the computation of salaries and wages.

D. Bonus
What is the rule on its demandability and enforceability?
Bonus, as a general rule, is an amount granted and paid ex gratia to the employee.
It cannot be forced upon the employer who may not be obliged to assume the onerous
burden of granting bonuses or other benefits aside from the employees’ basic salaries or wages.
If there is no profit, there should be no bonus. If profit is reduced, bonus should likewise be
reduced, absent any agreement making such bonus part of the compensation of the employees.

When is bonus demandable and enforceable?

It becomes demandable and enforceable:
(1) If it has ripened into a company practice;
(2) If it is granted as an additional compensation which the employer agreed to give
without any condition such as success of business or more efficient or more
productive operation, hence, it is deemed part of wage or salary.
(3) When considered as part of the compensation and therefore demandable and
enforceable, the amount is usually fixed. If the amount thereof is dependent upon
the realization of profits, the bonus is not demandable and enforceable.

E. Change of working hours

 What is the extent of the exercise of this prerogative?
Employers have the freedom and prerogative, according to their discretion and best
judgment, to regulate and control the time when workers should report for work and perform
their respective functions.
Manila Jockey Club Employees Labor Union – PTGWO, v. Manila Jockey Club, Inc. - The
validity of the exercise of the same prerogative to change the working hours was affirmed in this
case. It was found that while Section 1, Article IV of the CBA provides for a 7-hour work schedule
from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. from Mondays to Saturdays,
Section 2, Article XI thereof expressly reserves to respondent the prerogative to change existing
methods or facilities and to change the schedules of work. Consequently, the hours of work of
regular monthly-paid employees were changed from the original 9:00 a.m. to 5:00 p.m. schedule
to 1:00 p.m. to 8:00 p.m. when horse races are held, that is, every Tuesday and Thursday. The
9:00 a.m. to 5:00 p.m. schedule for non-race days was, however, retained. Respondent, as
employer, cited the change in the program of horse races as reason for the adjustment of the
work schedule. It rationalized that when the CBA was signed, the horse races started at 10:00
a.m. When the races were moved to 2:00 p.m., there was no other choice for management but
to change the work

F. Bona fide occupational qualifications

G. Post-employment restrictions
Is a non-compete clause valid?
Yes. The employer and the employee are free to stipulate in an employment contract
prohibiting the employee within a certain period from and after the termination of his
employment, from:
(1) starting a similar business, profession or trade; or
(2) working in an entity that is engaged in a similar business that might compete with
the employer.
The non-compete clause is agreed upon to prevent the possibility that upon an
employee’s termination or resignation, he might start a business or work for a competitor with
the full competitive advantage of knowing and exploiting confidential and sensitive information,
trade secrets, marketing plans, customer/client lists, business practices, upcoming products,
etc., which he acquired and gained from his employment with the former employer. Contracts
which prohibit an employee from engaging in business in competition with the employer are not
necessarily void for being in restraint of trade.

What are the requisites in order for a non-compete clause to be valid?

A non-compete clause is not necessarily void for being in restraint of trade as long as
there are reasonable limitations as to time, trade, and place.

H. Marriage between employees of competitor-employers

What is the best illustrative case of this prerogative?
 Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc. The
contract of employment in this case expressly prohibited an employee from having a
relationship with an employee of a competitor company. It provides:
“10. You agree to disclose to management any existing or future relationship
you may have, either by consanguinity or affinity with co-employees or
employees of competing drug companies. Should it pose a possible conflict of
interest in management discretion, you agree to resign voluntarily from the
Company as a matter of Company policy.”
The Supreme Court ruled that this stipulation is a valid exercise of management
prerogative. The prohibition against personal or marital relationships with employees of
competitor-companies upon its employees is reasonable under the circumstances because
relationships of that nature might compromise the interests of the company. In laying down the
assailed company policy, the employer only aims to protect its interests against the possibility
that a competitor company will gain access to its trade secrets, manufacturing formulas,
marketing strategies and other confidential programs and information.

VII. SOCIAL LEGISLATION

A. Social Security System Law (RA No. 8282)

1. Coverage and exclusions
Who are covered employers?
a. An employer or any person who uses the services of another person in business, trade,
industry or any undertaking.
b. A social, civic, professional, charitable and other non-profit organizations which hire the
services of employees are considered “employers.”
c. A foreign government, international organization or its wholly-owned instrumentality such as
an embassy in the Philippines, may enter into an administrative agreement with the SSS for
the coverage of its Filipino employees.

Who are compulsorily covered employees?

a. A private employee, whether permanent, temporary or provisional, who is not over 60 years
old.
b. A domestic worker or kasambahay who has rendered at least one (1) month of service.
c. A Filipino seafarer upon the signing of the standard contract of employment between the
seafarer and the manning agency which, together with the foreign ship owner, act as
employers.
d. An employee of a foreign government, international organization or their wholly-owned
instrumentality based in the Philippines, which entered into an administrative agreement with
the SSS for the coverage of its Filipino workers.
e. The parent, spouse or child below 21 years old of the owner of a single proprietorship
business.
Are self-employed persons covered?
Yes. A self-employed person, regardless of trade, business or occupation, with an
income of at least P1,000 a month and not over 60 years old, should register with the SSS.
Included, but not limited to, are the following selfemployed persons:
a. Self-employed professionals;
b. Business partners, single proprietors and board directors;
c. Actors, actresses, directors, scriptwriters and news reporters who are not under an
employer-employee relationship;
d. Professional athletes, coaches, trainers and jockeys;
e. Farmers and fisherfolks; and
f. Workers in the informal sector such as cigarette vendors, watch-your-car boys,
hospitality girls, among others.

Unless otherwise specified, all provisions of the law, R.A. No. 8282, applicable to
covered employees shall also be applicable to the covered self-employed persons.
A self-employed person shall be both employee and employer at the same time.

Who may be covered voluntarily?

1. Separated Members
A member who is separated from employment or ceased to be self-
employed/OFW/non-working spouse and would like to continue contributing.
2. Overseas Filipino Workers (OFWs)
A Filipino recruited in the Philippines by a foreign-based employer for
employment abroad or one who legitimately entered a foreign country (i.e., tourist,
student) and is eventually employed.
3. Non-working spouses of SSS members
A person legally married to a currently employed and actively paying SSS
member who devotes full time in the management of household and family affairs
may be covered on a voluntary basis, provided there is the approval of the working
spouse. The person should never have been a member of the SSS. The contributions
will be based on 50 percent (50%) of the working spouse’s last posted monthly
salary credit but in no case shall it be lower than P1,000.

What is the effective date of coverage?

For compulsory coverage:
1. For employer - Compulsory coverage of the employer shall take effect on the first day of
his operation or on the first day he hires employee/s. The employer is given only 30 days
from the date of employment of employee to report the person for coverage to the SSS.
2. For employee - Compulsory coverage of the employee shall take effect on the first day of
his employment.
3. For self-employed - The compulsory coverage of the self-employed person shall take
effect upon his registration with the SSS or upon payment of the first valid contribution, in
case of initial coverage.
 For voluntary coverage:
1. For an OFW – upon first payment of contribution, in case of initial coverage.
2. For a non-working spouse – upon first payment of contribution.
3. For a separated member – on the month he/she resumed payment of contribution.

Who are excluded employers?

Government and any of its political subdivisions, branches or instrumentalities, including
corporations owned or controlled by the Government with original charters.

Who are excluded employees?

Workers whose employment or service falls under any of the following circumstances
are not covered:
(1) Employment purely casual and not for the purpose of occupation or business of the
employer;
(2) Service performed on or in connection with an alien vessel by an employee if he is
employed when such vessel is outside the Philippines;
(3) Service performed in the employ of the Philippine Government or instrumentality or
agency thereof;
(4) Service performed in the employ of a foreign government or international
organization, or their wholly-owned instrumentality: Provided, however, That this
exemption notwithstanding, any foreign government, international organization or
their wholly-owned instrumentality employing workers in the Philippines or
employing Filipinos outside of the Philippines, may enter into an agreement with
the Philippine Government for the inclusion of such employees in the SSS except
those already covered by their respective civil service retirement systems: Provided,
further, That the terms of such agreement shall conform with the provisions of R.A.
No. 8282 on coverage and amount of payment of contributions and benefits:
Provided, finally, That the provisions of this Act shall be supplementary to any such
agreement; and
(5) Such other services performed by temporary and other employees which may be
excluded by regulation of the Social Security Commission. Employees of bona-fide
independent contractors shall not be deemed employees of the employer engaging
the service of said contractors.

2. Dependents and beneficiaries

Who are primary beneficiaries?
The following are primary beneficiaries:
1. The dependent spouse until he or she remarries;
2. The dependent legitimate, legitimated or legally adopted, and illegitimate
children who are not yet 21 years of age.
The dependent illegitimate children shall be entitled to 50% of the share of the
legitimate, legitimated or legally adopted children. However, in the absence of the
dependent legitimate, legitimated children of the member, his/her dependent
illegitimate children shall be entitled to 100% of the benefits
 Who are secondary beneficiaries?
The following are secondary beneficiaries:
1. The dependent parents, in the absence of the primary beneficiaries.
2. Any other person designated by the member as his/her secondary
beneficiary, in the absence of all the foregoing primary beneficiaries and
dependent parents.

3. Benefits
What are the classifications of benefits?
The SSS benefits may be classified into two (2) as follows:
(a) Social security benefits:
1) Sickness
2) Maternity
3) Retirement
4) Disability
5) Death and funeral.
(b) Employees’ compensation benefits.

B. Government Service Insurance System Law (RA No. 8291)

1. Coverage and exclusions
Who are compulsorily required to become members of the GSIS?
1. All government personnel, whether elective or appointive, irrespective of status of
appointment, provided they are receiving fixed monthly compensation and have not reached
the mandatory retirement age of 65 years, are compulsorily covered as members of the GSIS
and shall be required to pay contributions.
2. However, employees who have reached the retirement age of 65 or more shall also
be covered, subject to the following rules:

An employee who is already beyond the mandatory retirement age of 65 shall be

compulsorily covered and be required to pay both the life and retirement premiums under the
following situations:
a. An elective official who at the time of election to public office is below 65
years of age and will be 65 years or more at the end of his term of office, including the
period/s of his re-election to public office thereafter without interruption. 4

b. Appointive officials who, before reaching the mandatory age of 65, are
appointed to government position by the President of the Republic of the Philippines
and shall remain in government service at age beyond 65.

c. Contractual employees including casuals and other employees with an

employee-government agency relationship are also compulsorily covered, provided they
are receiving fixed monthly compensation and rendering the required number of
working hours for the month.
What are the classes of membership in the GSIS?
Membership in the GSIS is classified either by type or status of membership.

• As to type of members, there are regular and special members:

(a) Regular Members – are those employed by the government of the
Republic of the Philippines, national or local, legislative bodies,
government-owned and controlled corporations (GOCC) with
original charters, government financial institutions (GFIs), except
uniformed personnel of the Armed Forces of the Philippines, the
Philippine National Police, Bureau of Jail Management and Penology
(BJMP) and Bureau of Fire Protection (BFP), who are required by law
to remit regular monthly contributions to the GSIS.
(b) Special Members – are constitutional commissioners, members of
the judiciary, including those with equivalent ranks, who are
required by law to remit regular monthly contributions for life
insurance policies to the GSIS in order to answer for their life
insurance benefits defined under RA 8291.

• As to status of membership, there are active and inactive members.

(a) Active member – refers to a member of the GSIS, whether regular or
special, who is still in the government service and together with the
government agency to which he belongs, is required to pay the
monthly contribution.
(b) Inactive member – a member who is separated from the service
either by resignation, retirement, disability, dismissal from the
service, retrenchment or, who is deemed retired from the service
under this Act.

When does membership become effective?

The effective date of membership shall be the date of the member’s
assumption to duty on his original appointment or election to public office.

What is the effect of separation from the service?

A member separated from the service shall continue to be a member,
and shall be entitled to whatever benefits he has qualified to in the event of any
contingency compensable under the GSIS Law.

Who are excluded from the compulsory coverage of the GSIS Law?
The following employees are excluded from compulsory coverage:
(a) Uniformed personnel of the Armed Forces of the Philippines (AFP),
Philippine National Police (PNP), Bureau of Fire Protection (BFP) and
Bureau of Jail Management and Penology (BJMP);
 (b) Barangay and Sanggunian Officials who are not receiving fixed
monthly compensation;
(c) Contractual Employees who are not receiving fixed monthly
compensation; and
(d) Employees who do not have monthly regular hours of work and are
not receiving fixed monthly compensation.

2. Dependents and beneficiaries

Who are beneficiaries under the GSIS Law?
There are two (2) kinds of beneficiaries under the GSIS Law as follows:
1. Primary beneficiaries — The legal dependent spouse until he/she remarries
and the dependent children.
2. Secondary beneficiaries — The dependent parents and, subject to the
restrictions on dependent children, the legitimate descendants.

Who are dependents under the GSIS Law?

Dependents shall be the following:
(a) the legitimate spouse dependent for support upon the member or
pensioner;
(b) the legitimate, legitimated, legally adopted child, including the illegitimate
child, who is unmarried, not gainfully employed, not over the age of
majority, or is over the age of majority but incapacitated and incapable of
self-support due to a mental or physical defect acquired prior to age of
majority; and
(c) the parents dependent upon the member for support.

Gainful Occupation — Any productive activity that provided the member with
income at least equal to the minimum compensation of government employees.

3. Benefits
What are the kinds of benefits under the GSIS Law?
The following are the benefits under the GSIS Law:
(a) Compulsory Life Insurance Benefits under the Life Endowment Policy (LEP)
(b) Compulsory Life Insurance Benefits under the Enhanced Life Policy (ELP)
(c) Retirement Benefits
(d) Separation Benefit
(e) Unemployment Benefit
(f) Disability Benefits
(g) Survivorship Benefits
(h) Funeral Benefits

C. Limited Portability Law (RA No. 7699)

What is limited portability scheme?
 R.A. No. 7699 was enacted to enable those from the private sector who transfer to the
government service or from the government sector to the private sector to combine their years
of service and contributions which have been credited with the SSS or GSIS, as the case may be,
to satisfy the required number of years of service for entitlement to the benefits under the
applicable laws.

What is totalization?
The term “totalization” refers to the process of adding up the periods of creditable
services or contributions under each of the Systems, SSS or GSIS, for the purpose of eligibility
and computation of benefits.

What is portability?
On the other hand, the term “portability” refers to the transfer of funds for the account
and benefit of a worker who transfers from one system to the other.

How are benefits computed?

All services rendered or contributions paid by a member personally and those that were
paid by the employers to either System shall be considered in the computation of benefits which
may be claimed from either or both Systems. However, the amount of benefits to be paid by
one System shall be in proportion to the services rendered or periods of contributions made to
that System.
“Benefits” refer to the following:
1. Old-age benefit;
2. Disability benefit;
3. Survivorship benefit;
4. Sickness benefit;
5. Medicare benefit, provided that the member shall claim said benefit from
the System where he was last a member; and
6. Such other benefits common to both Systems that may be availed of through
totalization.

When does totalization apply?

a. if a worker is not qualified for any benefits from both Systems; or
b. if a worker in the public sector is not qualified for any benefits from the GSIS; or
c. if a worker in the private sector is not qualified for any benefits from the SSS.

For purposes of computation of benefits, totalization applies in all cases so that the
contributions made by the worker-member in both Systems shall provide maximum benefits
which otherwise will not be available. In no case shall the contribution be lost or forfeited.

What is the effect if worker is not qualified after totalization?

If after totalization, the worker-member still does not qualify for any benefit as listed in
the law, the member will then get whatever benefits correspond to his/her contributions in
either or both Systems.
 What is the effect if worker qualifies for benefits in both Systems?
If a worker qualifies for benefits in both Systems, totalization shall not apply.

D. Disability and death benefits

1. Labor Code

2. Employees Compensation and State Insurance Fund '

What is the State Insurance Fund [SIF]?
The State Insurance Fund (SIF) is built up by the contributions of employers
based on the salaries of their employees as provided under the Labor Code.
There are two (2) separate and distinct State Insurance Funds: one established
under the SSS for private sector employees; and the other, under the GSIS for public
sector employees. The management and investment of the Funds are done separately
and distinctly by the SSS and the GSIS. It is used exclusively for payment of the
employees’ compensation benefits and no amount thereof is authorized to be used for
any other purpose.

What are the agencies involved in the implementation of the Employees Compensation Program
(ECP)?
There are three (3) agencies involved in the implementation of the Employees’
Compensation Program (ECP). These are: (1) The Employees’ Compensation
Commission (ECC) which is mandated to initiate, rationalize and coordinate policies of
the ECP and to review appealed cases from (2) the Government Service Insurance
System (GSIS) and (3) the Social Security System (SSS), the administering agencies of the
ECP.

Who are covered by the ECP?

a. General coverage. – The following shall be covered by the Employees’ Compensation
Program (ECP):
1. All employers;
2. Every employee not over sixty (60) years of age;
3. An employee over 60 years of age who had been paying contributions to the System
(GSIS/SSS) prior to age sixty (60) and has not been compulsorily retired; and
4. Any employee who is coverable by both the GSIS and SSS and should be compulsorily
covered by both Systems.

b. Sectors of employees covered by the ECP. - The following sectors are covered under the
ECP:
1. All public sector employees including those of government-owned and/or
controlled corporations and local government units covered by the GSIS;
2. All private sector employees covered by the SSS; and
3. Overseas Filipino workers (OFWs), namely:
a. Filipino seafarers compulsorily covered under the SSS.
 b. Land-based contract workers provided that their employer, natural or
juridical, is engaged in any trade, industry or business undertaking in the Philippines;
otherwise, they shall not be covered by the ECP.

When is the start of coverage of employees under the ECP?

The coverage under the ECP of employees in the private and public sectors starts on the
first day of their employment.

What are the benefits under the ECP?

The following are the benefits provided under the Labor Code:
a. Medical Benefits
b. Disability Benefits
1. Temporary total disability
2. Permanent total disability
3. Permanent partial disability
c. Death Benefit
d. Funeral Benefit

3. Philippine Overseas Employment Administration-Standard Employment Contract

E. Solo Parents

F. Kasambahay

G. Agrarian Relations
1. Concept of agrarian reform

2. Existence and concept of agricultural tenancy

3. Rights of agricultural tenants

4. Concept of farmworkers

H. Universal Health Care

1. Policy

2. Coverage
 3. National Health Insurance Program

VIII. JURISDICTION AND REMEDIES

A. Labor Arbiter
1. THE LABOR ARBITER.
The Labor Arbiter is an official in the Arbitration Branch of the National Labor
Relations Commission (NLRC) who hears and decides cases falling under his original and
exclusive jurisdiction as provided by law.

2. LABOR ARBITERS HAVE NO INJUNCTIVE POWER; ONLY THE COMMISSION (NLRC) HAS THIS
POWER.
Previously, Labor Arbiters are possessed of injunctive power. This grant of
injunctive power, however, was deleted in recent NLRC Rules. The Labor Arbiter thus
has no more injunctive power. Only the Commission (NLRC) has that power.

1. Jurisdiction of the Labor Arbiter as distinguished from the Regional Director

2. Requirements to perfect appeal to National Labor Relations Commission

I. APPEAL IN GENERAL
1. APPEAL, MEANING AND NATURE.
The term “appeal” refers to the elevation by an aggrieved party to an agency
vested with appellate authority of any decision, resolution or order disposing the
principal issues of a case rendered by an agency vested with original jurisdiction,
undertaken by filing a memorandum of appeal.

2. SOME PRINCIPLES ON APPEAL.

• Appeals under Article 223 apply only to appeals from the Labor Arbiter’s
decisions, awards or orders to the Commission (NLRC).
• There is no appeal from the decisions, orders or awards of the NLRC. Clearly,
therefore, Article 223 of the Labor Code is not the proper basis for elevating
the case to the Court of Appeals or to the Supreme Court. The proper
remedy from the decisions, awards or orders of the NLRC to the Court of
Appeals is a Rule 65 petition for certiorari and from the Court of Appeals to
the Supreme Court, a Rule 45 petition for review on certiorari.
• Appeal from the NLRC to the DOLE Secretary and to the President had long
been abolished.
 • Appeal is not a constitutional right but a mere statutory privilege. Hence,
parties who seek to avail of it must comply with the statutes or rules allowing
it.
• A motion for reconsideration is unavailing as a remedy against a decision of
the Labor Arbiter. The Labor Arbiter should treat the said motion as an
appeal to the NLRC.
• A “Petition for Relief” should be treated as appeal.
• Affirmative relief is not available to a party who failed to appeal. A party who
does not appeal from a decision of a court cannot obtain affirmative relief
other than the ones granted in the appealed decision.

3. GROUNDS FOR APPEAL TO THE COMMISSION (NLRC).

The appeal to the NLRC may be entertained only on any of the following
grounds:
a. If there is a prima facie evidence of abuse of discretion on the part of the
Labor Arbiter;
b. If the decision, order or award was secured through fraud or coercion,
including graft and corruption;
c. If made purely on questions of law; and/or
d. If serious errors in the findings of fact are raised which, if not corrected,
would cause grave or irreparable damage or injury to the appellant.
• NLRC has certiorari power.
The first ground above regarding prima facie evidence of abuse of discretion
on the part of the Labor Arbiter is actually an exercise of certiorari power by the
NLRC. The case of Triad Security & Allied Services, Inc. v. Ortega, expressly
recognized this certiorari power of the NLRC. Clearly, according to the 2012 case of
Auza, Jr. v. MOL Philippines, Inc., the NLRC is possessed of the power to rectify any
abuse of discretion committed by the Labor Arbiter.

3. Reinstatement and/or execution pending appeal

1. PIONEER TEXTURIZING DOCTRINE: REINSTATEMENT ASPECT OF LABOR ARBITER’S
DECISION, IMMEDIATELY EXECUTORY EVEN PENDING APPEAL; NO WRIT OF EXECUTION
REQUIRED.
According to the Pioneer Texturizing doctrine, an order of
reinstatement issued by the Labor Arbiter under Article 223 of the Labor Code is
self-executory or immediately executory even pending appeal. This means that
the perfection of an appeal shall stay the execution of the decision of the Labor
Arbiter except execution of the reinstatement pending appeal.

2. REINSTATEMENT PENDING APPEAL, APPLICABLE ONLY TO THE REINSTATEMENT

ORDER ISSUED BY THE LABOR ARBITER; WRIT OF EXECUTION REQUIRED WHEN
 REINSTATEMENT IS ORDERED BY NLRC ON APPEAL, OR SUBSEQUENTLY BY THE COURT
OF APPEALS OR SUPREME COURT, AS THE CASE MAY BE.
By way of distinction, the rule on reinstatement pending appeal applies
only to the order of reinstatement issued by the Labor Arbiter and to no other.
This means that if the reinstatement order is issued by the NLRC on appeal, or
by the Court of Appeals or by the Supreme Court, there is a need to secure a
writ of execution from the Labor Arbiter of origin to enforce the reinstatement
of the employee whose dismissal is declared illegal.

3. TWO (2) OPTIONS OF EMPLOYER. To implement the reinstatement aspect of a Labor

Arbiter’s decision, there are only two (2) options available to the employer, to wit:
1. Actual reinstatement. - The employee should be reinstated to his position
which he occupies prior to his illegal dismissal under the same terms and
conditions prevailing prior to his dismissal or separation or, if no longer
available, to a substantially-equivalent position; or
2. Payroll reinstatement. – The employee should be reinstated in the payroll of
the company without requiring him to report back to his work.

4. DUTY OF EMPLOYER TO NOTIFY EMPLOYEE ORDERED REINSTATED.

It is required that in case the decision of the Labor Arbiter includes an
order of reinstatement, it should contain:
(a) A statement that the reinstatement aspect is immediately
executory; and
(b) A directive for the employer to submit a report of compliance within
ten (10) calendar days from receipt of the said decision.
Disobedience of this directive clearly denotes a refusal to reinstate. The
employee need not file a motion for the issuance of the writ of execution since
the Labor Arbiter is mandated thereafter to motu proprio issue the writ. With
the new rules in place, there is hardly any difficulty in determining the
employer’s intransigence in immediately complying with the order.

5. INSTANCES WHEN WRIT OF EXECUTION OF LABOR ARBITER’S REINSTATEMENT

ORDER STILL REQUIRED.
Under the 2011 NLRC Rules of Procedure, there are two (2) instances
when a writ of execution should still be issued immediately by the Labor Arbiter
to implement his order of reinstatement, even pending appeal, viz.:
(1) When the employer disobeys the prescribed directive to submit a
report of compliance within ten (10) calendar days from receipt of
the decision; or
(2) When the employer refuses to reinstate the dismissed employee.

The Labor Arbiter shall motu proprio issue a corresponding writ to

satisfy the reinstatement wages as they accrue until actual reinstatement or
reversal of the order of reinstatement.
 6. SOME PRINCIPLES ON REINSTATEMENT PENDING APPEAL.
• Employer has no way of staying execution of immediate reinstatement. He
cannot post bond to prevent its execution.
• Reinstatement pending appeal applies to all kinds of illegal dismissal cases,
regardless of the grounds thereof.
• Reinstatement pending appeal does not apply when the dismissal is legal but
reinstatement is ordered for some reasons like equity and compassionate
justice.
• The failure of employee ordered reinstated pending appeal to report back to
work as directed by the employer does not give the employer the right to
remove him, especially when there is a reasonable explanation for his failure.
• When former position is already filled up, the employee ordered reinstated
pending appeal should be reinstated to a substantially equivalent position.
• Reinstatement to a position lower in rank is not proper.
• In case of two successive dismissals, the order of reinstatement
pending appeal under Article 223 issued in the first case shall apply
only to the first case and should not affect the second dismissal.
According to Sevilla v. NLRC, the Labor Arbiter was correct in denying
the third motion for reinstatement filed by the petitioner because
what she should have filed was a new complaint based on the
second dismissal. The second dismissal gave rise to a new cause of
action. Inasmuch as no new complaint was filed, the Labor Arbiter
could not have ruled on the legality of the second dismissal.

• Reinstatement pending appeal is not affected by the reinstated employee’s

employment elsewhere.
• Effect of grant of achievement award during reinstatement pending appeal. In
the 2014 case of Garza v. Coca-Cola Bottlers Philippines, Inc., it was
pronounced that the act of respondent CCBPI in giving an award of a
Certificate of Achievement to petitioner for his exemplary sales performance
during his reinstatement ordered by the Labor Arbiter, while respondent’s
appeal with the NLRC was still pending, constitutes recognition of petitioner’s
abilities and accomplishments. It indicates that he is a responsible,
trustworthy and hardworking employee of CCBPI. It constitutes adequate
proof weighing in his favor.

B. National Labor Relations Commission

1. NATURE.
The NLRC is an administrative quasi-judicial body. It is an agency attached to the DOLE
solely for program and policy coordination only. It is in charge of deciding labor cases through
compulsory arbitration.

2. COMPOSITION OF THE NLRC.

 The NLRC is composed of a Chairman and twenty-three (23) members called
“Commissioners.” The NLRC has tripartite composition. Eight (8) members thereof should be
chosen only from among the nominees of the workers sector and another eight (8) from the
employers sector. The Chairman and the seven (7) remaining members shall come from the
public sector, with the latter to be chosen preferably from among the incumbent Labor Arbiters.
The validity of the tripartite composition of the NLRC was recognized by the Supreme Court in
the case of Mayor v. Hon. C. Macaraig.

3. COMMISSION EN BANC.
The Commission sits en banc only for the following purposes:
(1) To promulgate rules and regulations governing the hearing and disposition of cases
before any of its divisions and regional branches; and
(2) To formulate policies affecting its administration and operations.
The NLRC does not sit en banc to hear and decide cases. The banc has no adjudicatory
power. The Commission exercises its adjudicatory and all other powers, functions, and duties
through its eight (8) Divisions.

4. NLRC’S EIGHT (8) DIVISIONS.

The NLRC is divided into eight (8) divisions, each one is comprised of three (3) members.
Each Division shall consist of one (1) member from the public sector who shall act as its
Presiding Commissioner and one (1) member each from the workers and employers sectors,
respectively.
The various Divisions of the Commission have exclusive appellate jurisdiction over
cases within their respective territorial jurisdictions.

1. JURISDICTION
1. TWO (2) KINDS OF JURISDICTION.
The NLRC exercises two (2) kinds of jurisdiction: 1. Exclusive original
jurisdiction; and 2. Exclusive appellate jurisdiction.

2. EXCLUSIVE ORIGINAL JURISDICTION.

The NLRC exercises exclusive and original jurisdiction over the following cases:
a. Petition for injunction in ordinary labor disputes to enjoin or restrain any actual or
threatened commission of any or all prohibited or unlawful acts or to require the
performance of a particular act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or irreparable damage to any party. b. Petition
for injunction in strikes or lockouts under Article 264 of the Labor Code. c. Certified
cases which refer to labor disputes causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, certified to it by the Secretary of Labor
and Employment for compulsory arbitration by virtue of Article 263(g) of the Labor
Code. d. Petition to annul or modify the order or resolution (including those issued
during execution proceedings) of the Labor Arbiter.

3. EXCLUSIVE APPELLATE JURISDICTION.

 The NLRC exercises exclusive appellate jurisdiction over the following: a. All
cases decided by the Labor Arbiters. b. Cases decided by the DOLE Regional Directors or
hearing officers involving small money claims under Article 129 of the Labor Code. c.
Contempt cases decided by the Labor Arbiters.

2. EFFECT OF NLRC REVERSAL OF LABOR ARBITER’S ORDER OF REINSTATEMENT

1. ENTITLEMENT TO REINSTATEMENT WAGES.
From the moment an employee is ordered reinstated by the Labor Arbiter on
the basis of the finding that his dismissal is illegal, up to the time that an appellate
tribunal like the NLRC, Court of Appeals and Supreme Court, as the case may be,
reverses the said finding, the employee is generally entitled to his so-called
“reinstatement wages.” The issue of entitlement to this benefit has been the subject of
several doctrinal rulings now known as follows:
(1) Roquero doctrine;
(2) Genuino doctrine; and
(3) Garcia doctrine.

1.1. ROQUERO DOCTRINE.

The Roquero doctrine, enunciates the rule that in cases where an employee is
ordered reinstated by the Labor Arbiter and the employer fails or refuses to obey the
reinstatement order but initiates an appeal, the employer’s success in having the
decision of the Labor Arbiter’s decision reversed on appeal will not exculpate him from
the liability to pay the reinstatement wages of the employee reckoned and computed
from the time the employee was ordered reinstated by the Labor Arbiter until the date
of its reversal on appeal.
In this case of Roquero, the dismissal of petitioners Roquero and Pabayo was
held valid by the Labor Arbiter. On appeal to the NLRC, the Labor Arbiter’s decision was
reversed and consequently, petitioners were ordered reinstated. They did not appeal
from that decision of the NLRC but filed a motion for the issuance of a writ of execution
of the order of reinstatement. The Labor Arbiter granted the motion but respondent
PAL refused to comply with the said order on the ground that it has filed a Petition for
Review before the Supreme Court. Subsequently, the CA reversed the decision of the
NLRC and ruled that the dismissal of petitioners was valid. The Supreme Court later
affirmed the CA’s decision but it held that the unjustified refusal by PAL to reinstate
Roquero who, unlike Pabayo, has not amicably settled his case, entitles him to the
payment of his reinstatement wages effective from the time PAL failed to reinstate him
despite the issuance of the writ of execution. Thus, it was mandatory for PAL to actually
reinstate Roquero or reinstate him in the payroll. Having failed to do so, the former
must pay the latter the salaries he is entitled to, as if he was reinstated, from the time of
the decision of the NLRC until the finality of the decision of the Supreme Court.
Following Roquero, it is now the norm that even if the order of reinstatement of
the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the dismissed employee during the period of appeal until
its reversal by the NLRC, or the Court of Appeals or the Supreme Court, as the case may
be. If the employee has been reinstated during the appeal period and such
reinstatement order is subsequently reversed on appeal with finality, the employee is
not required to reimburse whatever salaries he has received for he is entitled to such,
more so if he actually rendered services during the said period.

1.2. GENUINO DOCTRINE.

The essence of the Genuino doctrine is that the employee who is reinstated in
the payroll, as distinguished from actual reinstatement, should refund the salaries he
received if his dismissal is finally found legal on appeal. This doctrine, however, does not
apply if the employee was actually reinstated to his former position or not reinstated at
all pending appeal.
In effect, the Genuino ruling qualified the earlier Roquero doctrine on the issue
of whether the dismissed employee who is reinstated in the payroll and not actually to
his former position has the obligation to refund what he has received as and by way of
salaries during his payroll reinstatement if and when his dismissal is held valid and legal
on appeal. In this case, the Supreme Court had taken the view that “(i)f the decision of
the Labor Arbiter is later reversed on appeal upon the finding that the ground for
dismissal is valid, then the employer has the right to require the dismissed employee on
payroll reinstatement to refund the salaries he/she received while the case was pending
appeal, or it can be deducted from the accrued benefits that the dismissed employee
was entitled to receive from his/her employer under existing laws, collective bargaining
agreement provisions, and company practices. However, if the employee was
reinstated to work during the pendency of the appeal, then the employee is entitled to
the compensation received for actual services rendered without need of refund.”

1.3. GARCIA DOCTRINE.

a. Modification of the Roquero and Genuino doctrines.
The Roquero and Genuino doctrines have been modified by the Garcia
doctrine. In this case, while respondent Philippine Airlines (PAL) was undergoing
rehabilitation receivership, an illegal dismissal case was filed by petitioners
against respondent PAL which was decided by the Labor Arbiter in their favor
thus ordering PAL to, inter alia, immediately comply with the reinstatement
aspect of the decision. On appeal, the NLRC reversed the ruling of the Labor
Arbiter and held that their dismissal was valid. The issue of whether petitioners
may collect their reinstatement wages during the period between the Labor
Arbiter’s order of reinstatement pending appeal and the NLRC decision
overturning that of the Labor Arbiter, now that respondent PAL has terminated
and exited from rehabilitation proceedings, was resolved in the negative by the
Supreme Court. The following ratiocinations were cited:
(1) Re: modification of the Genuino doctrine. - The “refund doctrine” in
Genuino should no longer be observed because it easily demonstrates how a
favorable decision by the Labor Arbiter could harm, more than help, a dismissed
employee. The employee, to make both ends meet, would necessarily have to
use up the salaries received during the pendency of the appeal, only to end up
 having to refund the sum in case of a final unfavorable decision. It is mirage of a
stop-gap leading the employee to a risky cliff of insolvency. Further, the
Genuino ruling not only disregards the social justice principles behind the rule,
but also institutes a scheme unduly favorable to management. Under such
scheme, the salaries dispensed pendente lite merely serve as a bond posted in
installment by the employer. For in the event of a reversal of the Labor
Arbiter’s decision ordering reinstatement, the employer gets back the same
amount without having to spend ordinarily for bond premiums. This
circumvents, if not directly contradicts, the proscription that the “posting of a
bond [even a cash bond] by the employer shall not stay the execution for
reinstatement.” (2) Re: modification of the Roquero doctrine. – The Roquero
doctrine was reaffirmed but with the modification that “[a]fter the Labor
Arbiter’s decision is reversed by a higher tribunal, the employee may be barred
from collecting the accrued wages, if it is shown that the delay in enforcing the
reinstatement pending appeal was without fault on the part of the employer.”
b. Two-fold test under the Garcia doctrine. Under Garcia, the test to determine
the liability of the employer (who did not reinstate the employee pending
appeal) to pay the wages of the dismissed employee covering the period from
the time he was ordered reinstated by the Labor Arbiter to the reversal of the
Labor Arbiter’s decision either by the NLRC, the Court of Appeals or the High
Court, is two-fold, to wit: (1) There must be actual delay or the fact that the
order of reinstatement pending appeal was not executed prior to its reversal;
and (2) The delay must not be due to the employer’s unjustified act or
omission. If the delay is due to the employer’s unjustified refusal, the employer
may still be required to pay the salaries notwithstanding the reversal of the
Labor Arbiter’s decision. In Garcia, there was actual delay in reinstating
petitioners but respondent PAL was justified in not complying with the
reinstatement order of the Labor Arbiter because during the pendency of the
illegal dismissal case, the SEC placed respondent PAL under an Interim
Rehabilitation Receiver who, after the Labor Arbiter rendered his decision, was
replaced with a Permanent Rehabilitation Receiver. It is settled that upon
appointment by the SEC of a rehabilitation receiver, all actions for claims before
any court, tribunal or board against the corporation shall ipso jure be
suspended. Resultantly, respondent PAL’s “failure to exercise the alternative
options of actual reinstatement and payroll reinstatement was thus justified.
Such being the case, respondent’s obligation to pay the salaries pending appeal,
as the normal effect of the non-exercise of the options, did not attach.” c. Cases
decided after the promulgation of the Garcia doctrine. Subsequent to Garcia,
some of the cases decided in accordance with this doctrine are as follows: (1)
College of the Immaculate Conception v. NLRC; (2) Islriz Trading v. Capada; (3)
Pfizer, Inc. v. Velasco; and (4) C. Alcantara & Sons, Inc. v. CA.

2. RECKONING OF THE PERIOD COVERED BY ACCRUED REINSTATEMENT WAGES.

 To clarify, employees ordered reinstated by the Labor Arbiter are entitled to
accrued reinstatement wages only from the time the employer received a copy of the
Labor Arbiter’s decision declaring the employees’ termination illegal and ordering their
reinstatement up to the date of the decision of the appellate tribunal overturning that
of the Labor Arbiter. It is not accurate therefore to state that such entitlement
commences “from the moment the reinstatement order was issued up to the date when
the same was reversed by a higher court without fear of refunding what he had
received.”

3. SOME PRINCIPLES ON REINSTATEMENT WAGES.

• Employer is not liable to pay any reinstatement backwages if reinstatement is
ordered not by the Labor Arbiter but by the NLRC on appeal and it was not
executed by writ and its finding of illegal dismissal is later reversed by the Court
of Appeals and/or Supreme Court.
• Payroll-reinstated employee is entitled not only to reinstatement wages but also
to other benefits during the period of payroll reinstatement until the illegal
dismissal case is reversed by a higher tribunal.
• Award of additional backwages and other benefits from the time the Labor
Arbiter ordered reinstatement until actual or payroll reinstatement is proper
and valid.
3. REMEDIES
1. EXTRAORDINARY REMEDIES.
a. Nature.
The power of the Commission (NLRC) to grant extraordinary remedies
mentioned in No. 3 above is not provided in the Labor Code or in any other
laws. It is a newly created remedy which saw light for the first time under Rule
XII of the 2011 NLRC Rules of Procedure. Past NLRC Rules did not provide
therefor.
Since this is a recent newly minted remedy, there has yet been no
decision by the Supreme Court dwelling on its validity.
What is clear though is that this remedy is not equivalent to nor a
substitute for appeal. It is directed against “orders” or “resolutions” issued by
the Labor Arbiter in the course of the proceedings before him where the
remedy of appeal is not available. Notably, the remedy of appeal is available
only against the main decision of a case. But orders or resolutions issued prior
to the rendition of the decision in the main as well as orders or resolutions
issued thereafter, specifically during the execution stage, are subject of this rule
on extraordinary remedies.

b. Grounds.
The petition filed under this Rule may be entertained only on any of the
following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of
the Labor Arbiter;
 (b) If serious errors in the findings of facts are raised which, if not
corrected, would cause grave or irreparable damage or injury to
the petitioner;
(c) If a party by fraud, accident, mistake or excusable negligence has
been prevented from taking an appeal;
(d) If made purely on questions of law; or
(e) If the order or resolution will cause injustice if not rectified.

c. Initiation through verified petition.

To secure these extraordinary remedies, a party aggrieved by any order
or resolution of the Labor Arbiter including those issued during execution
proceedings may file a verified petition to annul or modify such order or
resolution. The petition may be accompanied by an application for the issuance
of a temporary restraining order and/or writ of preliminary or permanent
injunction to enjoin the Labor Arbiter, or any person acting under his/her
authority, to desist from enforcing said resolution or order.

4. CERTIFIED CASES
1. CERTIFIED LABOR DISPUTES.
“Certified labor disputes” are national interest cases certified by the DOLE
Secretary to the Commission (NLRC) for compulsory arbitration under Article 263(g) of
the Labor Code.

2. EFFECTS OF CERTIFICATION OF LABOR DISPUTES.

The certification of a labor dispute to the NLRC has the following effects:
(1) On intended or impending strike or lockout. - Upon certification, the
intended or impending strike or lockout is automatically enjoined, notwithstanding
the filing of any motion for reconsideration of the certification order or the non-
resolution of any such motion which may have been duly submitted to the DOLE
Secretary.
(2) On actual strike or lockout. - If a work stoppage has already taken place at
the time of the certification, all striking or locked out employees shall immediately
return to work and the employer shall immediately resume operations and readmit
all workers under the same terms and conditions prevailing before the strike or
lockout.
(3) On cases already filed or may be filed. - All cases between the same parties,
except where the certification order specifies otherwise the issues submitted for
arbitration which are already filed or may be filed, and are relevant to or are proper
incidents of the certified case, shall be considered subsumed or absorbed by the
certified case, and shall be decided by the appropriate Division of the Commission.
(4) On other pending cases. - The parties to a certified case, under pain of
contempt, shall inform their counsels and the Division concerned of all cases
pending with the Regional Arbitration Branches and the Voluntary Arbitrators
relative or incident to the certified case before it.
 (5) On which Division should take cognizance of the certified case in case entity
has several workplaces in different regions. - Whenever a certified labor dispute
involves a business entity with several workplaces located in different regions, the
Division having territorial jurisdiction over the principal office of the company shall
acquire jurisdiction to decide such labor dispute; unless the certification order
provides otherwise.
• Same effect of certification to the NLRC as in cases assumed directly by DOLE
Secretary.
The effects described above are also applicable when the DOLE Secretary
directly assumes jurisdiction over a labor dispute affecting industries imbued with
national interest and decides it himself.

C. Court of Appeals
1. RULE 65, RULES OF COURT
1. RULE 65 PETITION FOR CERTIORARI, THE ONLY MODE OF ELEVATING A LABOR CASE
TO THE COURT OF APPEALS.
The only mode by which a labor case decided by any of the following
labor authorities/tribunals may reach the Court of Appeals is through a Rule 65
petition for certiorari.
(a) the DOLE Secretary;
(b) the Commission (NLRC); and
(c) the Director of the Bureau of Labor Relations (BLR) in cases decided
by him in his appellate jurisdiction (as distinguished from those he decides in his
original jurisdiction which are appealable to the DOLE Secretary).

The remedy of ordinary appeal to the Court of Appeals is not available

from their decisions, orders or awards. The reason for this rule is that their
decisions, orders or awards are final and executory and therefore inappealable.

2. THE ONLY EXCEPTION.

The only exception to the foregoing rule is in the case of decisions,
orders or awards issued by the Voluntary Arbitrator or panel of Voluntary
Arbitrators which may be elevated to the Court of Appeals by way of an
ordinary appeal under a Rule 43 petition for review.

3. FILING OF MOTION FOR RECONSIDERATION OF THE DECISION OF THE DOLE

SECRETARY, THE COMMISSION (NLRC) OR THE BLR DIRECTOR, A PRE-REQUISITE TO
FILING OF RULE 65 PETITION FOR CERTIORARI.
The rule on the filing of a Motion for Reconsideration of the decision of
the DOLE Secretary, the NLRC and the BLR Director is mandatory and
jurisdictional. Failure to comply therewith would result in the dismissal of the
Rule 65 certiorari petition. Jurisprudence abounds enunciating the rule that a
 motion for reconsideration is a prerequisite for the filing of a special civil action
for certiorari.
The reason for this rule is that in labor cases, a motion for
reconsideration is the plain and adequate remedy from an adverse decision of
the DOLE Secretary, the NLRC and the BLR Director.
• THE PHILTRANCO DOCTRINE: a motion for reconsideration should be
filed even though it is not required or even prohibited by the concerned
government office. This was the rule enunciated in the 2014 case of
Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-
Association of Genuine Labor Organizations (PWU-AGLO). Thus, while a
government office may prohibit altogether the filing of a motion for
reconsideration with respect to its decisions or orders, the fact remains
that certiorari inherently requires the filing of a motion for
reconsideration which is the tangible representation of the opportunity
given to the office to correct itself. Unless it is filed, there could be no
occasion to rectify. Worse, the remedy of certiorari would be unavailing.
Simply put, regardless of the proscription against the filing of a motion
for reconsideration, the same may be filed on the assumption that
rectification of the decision or order must be obtained and before a
petition for certiorari may be instituted.

4. CERTIORARI PETITION MAY BE FILED EVEN IF THE DECISION OF THE DOLE

SECRETARY, THE COMMISSION (NLRC), OR THE BLR DIRECTOR HAS ALREADY BECOME
FINAL AND EXECUTORY.
This rule applies to the decisions rendered by the DOLE Secretary, the
NLRC or the BLR Director (in cases which he decided in his appellate
jurisdiction). If the CA grants the petition and nullifies their decisions on the
ground of grave abuse of discretion amounting to excess or lack of jurisdiction,
such decisions are, in contemplation of law, null and void ab initio; hence, they
never became final and executory.

JUDICIAL REVIEW OF DECISIONS OF VOLUNTARY ARBITRATORS

1. DECISIONS, FINAL AND EXECUTORY.

As a general rule, decisions or awards of Voluntary Arbitrators are final,
inappealable and executory after ten (10) calendar days from receipt of a copy thereof
by the parties.

2. ORDINARY APPEAL UNDER RULE 43 OF THE 1997 RULES OF CIVIL PROCEDURE – VOLUNTARY
ARBITRATORS ARE OF THE SAME LEVEL AS RTC JUDGES.
Being a quasi-judicial agency, the decisions and awards of a Voluntary Arbitrator
are appealable by way of a petition for review to the Court of Appeals under Revised
Administrative Circular No. 1-95 which provides for a uniform procedure for appellate
 review of all adjudications of quasi-judicial entities and which is now embodied in
Section 1, Rule 43 of the 1997 Rules of Civil Procedure.

The ruling in Luzon Development Bank v. v. Association of Luzon Development

Bank Employees, in effect, equates the decisions or awards of the Voluntary Arbitrator
to those of the Regional Trial Court (RTC). Hence, in a petition for certiorari from the
awards or decisions of the Voluntary Arbitrator, the Court of Appeals has concurrent
jurisdiction with the Supreme Court.

In Alcantara, Jr. v. CA, it was held that Luzon Development Bank is still a good
law.

3. PERIOD OF APPEAL – 15 DAYS.

Rule 43 of the Rules of Court requires that the petition for review to be taken to
the Court of Appeals should be filed within fifteen (15) days from notice of the award,
judgment or final order or resolution of the Voluntary Arbitrator.

D. Supreme Court
1. RULE 45, RULES OF COURT
1. RULE 45 PETITION FOR REVIEW ON CERTIORARI, THE ONLY MODE BY WHICH A LABOR
CASE MAY REACH THE SUPREME COURT.
Since the Court of Appeals has jurisdiction over the petition for certiorari under
Rule 65 that may be filed before it from the decisions of the NLRC or the DOLE Secretary
or the BLR Director (in cases decided by him in his appellate jurisdiction), any alleged
errors committed by it in the exercise of its jurisdiction would be errors of judgment
which are reviewable by means of a timely appeal to the Supreme Court and not by a
special civil action of certiorari. If the aggrieved party fails to do so within the
reglementary period and the decision accordingly becomes final and executory, he
cannot avail himself of the writ of certiorari, his predicament being the effect of his
deliberate inaction. A petition for certiorari under Rule 65 cannot be a substitute for a
lost appeal under Rule 45; hence, it should be dismissed.

2. MAY RULE 65 CERTIORARI PETITION BE AVAILED OF FROM CA DECISION TO THE

SUPREME COURT?
This poser has been answered both in the affirmative and in the negative.

In answering this poser in the affirmative, it was held in Tomas Claudio

Memorial College, Inc. v. CA, that a Rule 65 certiorari petition may be filed if in issuing
the assailed decision and resolution, the CA acted with grave abuse of discretion,
amounting to excess or lack of jurisdiction and there is no plain, speedy and adequate
remedy in the ordinary course of law. A remedy is considered plain, speedy and
adequate if it will promptly relieve the petitioner from the injurious effect of the
judgment and the acts of the lower court. The aggrieved party is proscribed from filing a
petition for certiorari if appeal is available, for the remedies of appeal and certiorari are
mutually exclusive and not alternative or successive.

The aggrieved party is likewise barred from filing a petition for certiorari if the
remedy of appeal is lost through his negligence. A petition for certiorari is an original
action and does not interrupt the course of the principal case unless a temporary
restraining order or a writ of preliminary injunction has been issued against the public
respondent from further proceeding.

In the 2011 case of in Cirtek Employees Labor Union-Federation of Free Workers

v. Cirtek Electronics, Inc., it was conceded that respondent indeed availed of the wrong
remedy of certiorari under Rule 65. Due, however, to the nature of the case, involving
workers' wages and benefits, and the fact that whether the petition was filed under Rule
65 or appeal by certiorari under Rule 45, it was filed within 15 days (the reglementary
period under Rule 45) from petitioner's receipt of the resolution of the Court of Appeals'
Resolution denying its motion for reconsideration, the Court resolved to give it due
course. As Almelor v. RTC of Las Piñas, restates: “Generally, on appeal taken either to
the Supreme Court or the CA by the wrong or inappropriate mode shall be dismissed.
This is to prevent the party from benefiting from one's neglect and mistakes. However,
like most rules, it carries certain exceptions. After all, the ultimate purpose of all rules of
procedures is to achieve substantial justice as expeditiously as possible.”

But in New Ever Marketing, Inc. v. CA, and in the earlier case of San Miguel
Corporation v. The Hon. CA, the Supreme Court answered the same poser in the
negative because the Rule 65 petition was not proper since an appeal was not only
available but also a speedy and adequate remedy. Hence, for failure of petitioner to file
a timely appeal, the questioned decision of the Court of Appeals had already become
final and executory.

It is thus clear, according to Tirazona v. CA, that in case what is filed is a petition
under Rule 65 instead of Rule 45, before the Supreme Court may treat the petition
erroneously filed under Rule 65 as having been filed under Rule 45, the same must
comply with the reglementary period for filing an appeal. This requirement is not only
mandatory but also jurisdictional such that failure to do so renders the assailed decision
final and executory and deprives the Supreme Court of jurisdiction to alter the final
judgment, much less to entertain the appeal.

In the 2013 case of Malayang Manggagawa ng Stayfast Phils, Inc. v. NLRC,

petitioner, instead of filing a Rule 45 petition for review on certiorari from the decision
of the CA, it filed a Rule 65 petition for certiorari to the Supreme Court after 52 days
from its receipt of the CA decision. Contrary to petitioner’s claim that there was no
appeal or any other plain, speedy and adequate remedy in the ordinary course of law
other than this petition for certiorari, the right recourse was to appeal to the Court in
the form of a Rule 45 petition for review on certiorari. For purposes of appeal, the
 decision of the CA was a final judgment as it denied due course to, and dismissed, the
petition. Thus, the decision disposed of the petition of petitioner in a manner that left
nothing more to be done by the CA in respect to the said case. Thus, petitioner should
have filed an appeal by petition for review on certiorari under Rule 45, not a petition for
certiorari under Rule 65, in this Court. Where the rules prescribe a particular remedy for
the vindication of rights, such remedy should be availed of.

3. THE NEYPES DOCTRINE (FRESH PERIOD RULE) - FRESH PERIOD FROM DENIAL OF
MOTION FOR RECONSIDERATION.
In the 2013 case of Elizabeth Gagui v. Dejero, petitioner successively filed two
Motions for Reconsideration of the CA’s decision but both were denied. Petitioner
elevated the case to the Supreme Court under Rule 45. In their comment, respondents
alleged that the instant petition had been filed 15 days after the prescriptive period of
appeal under Section 2, Rule 45 of the Rules of Court. In her reply, petitioner countered
that she has a fresh period of 15 days from the date she received the Resolution of the
CA to file the instant Rule 45 petition. In affirming the contention of petitioner, the
Supreme Court cited the en banc ruling in the case of Neypes v. CA which standardized
the appeal periods, thus:
“To standardize the appeal periods provided in the Rules and to afford
litigants fair opportunity to appeal their cases, the Court deems it practical to
allow a fresh period of 15 days within which to file the notice of appeal in the
Regional Trial Court, counted from receipt of the order dismissing a motion for a
new trial or motion for reconsideration.
“Henceforth, this ‘fresh period rule’ shall also apply to Rule 40
governing appeals from the Municipal Trial Courts to the Regional Trial Courts;
Rule 42 on petitions for review from the Regional Trial Courts to the Court of
Appeals; Rule 43 on appeals from quasi-judicial agencies to the Court of Appeals
and Rule 45 governing appeals by certiorari to the Supreme Court. The new rule
aims to regiment or make the appeal period uniform, to be counted from
receipt of the order denying the motion for new trial, motion for
reconsideration (whether full or partial) or any final order or resolution.”

Consequently, since petitioner in Gagui received the CA Resolution denying her

two Motions for Reconsideration only on 16 March 2011, she had another 15 days
within which to file her Petition, or until 31 March 2011. This Petition, filed on 30 March
2011, fell within the prescribed 15-day period.

E. Bureau of Labor Relations

1. MED-ARBITER OR MEDIATOR-ARBITER.
“Med-Arbiter” or “Mediator-Arbiter” refers to an officer in the Regional Office or in the
BLR authorized to hear and decide representation cases, inter-union or intra-union disputes and
other related labor relations disputes, except cancellation of union registration cases.
Some principles on Med-Arbiter.
 • Injunctive power. The Med-Arbiter is possessed of the power to issue temporary
restraining order and the writ of injunction in appropriate cases.
• Contempt power. The Med-Arbiter has contempt power.
• Factual findings of Med-Arbiters are accorded great respect. They are binding if they
are supported by substantial evidence and there exists no capricious exercise of
judgment warranting reversal by certiorari.
• Execution of decisions, orders or awards of Med-Arbiters. The Med-Arbiter may, upon
his own initiative or on motion of any interested party, issue a writ of execution on a
judgment within five (5) years from the date it becomes final and executory, requiring
the Sheriff or a duly deputized officer to execute or enforce the same.

1. JURISDICTION (ORIGINAL AND APPELLATE)

I. CASES FALLING UNDER THE JURISDICTION OF THE MED-ARBITERS, DOLE DIRECTORS

AND BLR DIRECTOR, IN GENERAL

1. INTRODUCTION.
For purposes of clarity in the otherwise labyrinthine issue of jurisdiction and
procedure in the BLR, there is a need to cite first the cases over which the following
officials have their respective jurisdictions:
(1) Mediator-Arbiter (Med-Arbiter);
(2) DOLE Regional Director; and
(3) BLR Director.

The Mediator-Arbiter and the DOLE Regional Director exercise original and
exclusive jurisdiction over specified cases mentioned below. For his part, the BLR
Director exercises not only appellate but original jurisdiction over some particular cases.

2. CASES COVERED.
There are three (3) general classifications of the cases covered by the
jurisdiction of said officials, to wit:
(a) Inter-union disputes;
(b) Intra-union disputes; and
(c) Other related labor relations disputes.

I-A. INTER-UNION OR INTRA-UNION DISPUTES

1. INTER-UNION OR REPRESENTATION DISPUTES.
An “inter-union dispute” or “representation dispute” is one occurring or carried
on between or among unions. It refers to a case involving a petition for certification
election filed by a duly registered labor organization which is seeking to be recognized
as the sole and exclusive bargaining agent of the rank-and-file employees or supervisory
employees, as the case may be, in the appropriate bargaining unit of a company, firm or
establishment.
 Broadly, an “inter-union dispute” refers to any conflict between and among
legitimate labor unions involving representation questions for purposes of collective
bargaining or to any other conflict or dispute between legitimate labor unions.

2. INTRA-UNION OR INTERNAL UNION DISPUTES.

An “intra-union dispute” or “internal union dispute” refers to a conflict within or
inside a labor union. It is 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 affiliation of a union. It refers to a case involving
the control, supervision and management of the internal affairs of a duly registered
labor union such as those relating to specific violations of the union’s constitution and
by-laws.
A complaint for any violation of the constitution and by-laws and the rights and
conditions of union membership under Article 241 of the Labor Code, may be filed in the
Regional Office where the union is domiciled.

3. RUNDOWN OF INTER-UNION/INTRA-UNION CASES.

The following is a rundown of all possible inter-union/intra-union disputes:
1) Inter-union disputes:
(a) Validity/invalidity of voluntary recognition, certification election,
consent election, run-off election or re-run election;

(b) Such other disputes or conflicts involving the rights to self-

organization, union membership and collective bargaining between
and among legitimate labor organizations.

2) Intra-union disputes:
(a) Conduct or nullification of election of officers of unions and workers'
association;
(b) Audit or accounts examination of union or workers' association funds;
(c) Deregistration of collective bargaining agreements;
(d) Validity/invalidity of union affiliation or disaffiliation;
(e) Validity/invalidity of acceptance/non-acceptance for union
membership;
(f) Opposition to application for union or CBA registration;
(g) Violations of or disagreements over any provision of the Constitution
and By-Laws of a union or workers' association;
(h) Disagreements over chartering or registration of labor organizations
or the registration of collective bargaining agreements;
(i) Violations of the rights and conditions of membership in a union or
workers' association;
(j) Violations of the rights of legitimate labor organizations, except
interpretation of CBAs;
 (k) Validity/Invalidity of impeachment/expulsion/suspension or any
disciplinary action meted against any officer and member, including
those arising from non-compliance with the reportorial requirement;
(l) Such other disputes or conflicts involving the rights to self-organization,
union membership and collective bargaining between and among
members of a union or workers’ association.

F. National Conciliation and Mediation Board

1. NATURE OF PROCEEDINGS 1. NCMB IS NOT A QUASI-JUDICIAL AGENCY.
NCMB is not a quasi-judicial agency, according to the 2009 case of Tabigue v.
International Copra Export Corporation.
“Quasi-judicial function” is a term which applies to the action, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts or ascertain the existence
of facts, hold hearings, and draw conclusions from them as a basis for their official action and to
exercise discretion of a judicial nature.

2. NOT BEING A QUASI-JUDICIAL AGENCY, NCMB’S RULINGS CANNOT BE ELEVATED TO, AND
COGNIZABLE BY, THE COURT OF APPEALS.
Rule 43 of the Rules of Court applies only to awards, judgments, final orders or
resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial
functions. Hence, NCMB’s decision, not having been rendered by a quasi-judicial body, cannot
be elevated to the Court of Appeals under said rule.

1. Jurisdiction

2. Conciliation as distinguished from mediation

2. CONCILIATION VS. MEDIATION
1. CONCILIATION AND MEDIATION, MEANING.
Both the terms “conciliation” and “mediation” refer to a process whereby a
third person usually called Conciliator (in case of conciliation) or Mediator (in case of
mediation), intervenes in a dispute involving two or more conflicting parties for the
purpose of reconciling their differences or persuading them into adjusting or settling
their dispute. The Conciliator or Mediator normally does not make or render any
decision, his role being confined to the functions afore-described.

3. DISTINCTION BETWEEN CONCILIATION AND MEDIATION.

Generally, there are no marked distinctions between conciliation and mediation. The
reason is that In both cases, a neutral third party (called Conciliator or Mediator) is tasked to
assist two or more opposing parties in finding appropriate resolution to a dispute.
In the NCMB, the hearing officer is called Conciliator-Mediator. There is no separate
classification between conciliators and mediators. When the Conciliator-Mediator performs his
task, he does not make any distinction when he is acting as Conciliator or as Mediator.
 In other jurisdictions, the principal distinction between conciliation and mediation lies
on the extent of the power and authority granted to the neutral third party.
In mediation, the Mediator normally facilitates a deliberation or discussion of the issues
between the parties. He may or may not offer any opinions on the strength and weaknesses of
each party's positions and arguments. Thus, mediation may be classified into two, namely:
1. Facilitative Mediation where the Mediator does not make or offer any opinion; or
2. Evaluative Mediation where the Mediator offers an opinion which is not binding on
the parties.
It bears stressing, however, that regardless of which of the 2 methods above is chosen,
the Mediator is not empowered to impose his will on the parties.
In conciliation, the Conciliator is given more power and authority in that he may not
only offer an opinion on the issues at hand but may actually make a binding opinion thereon
provided the parties stipulate in advance to this effect. His opinion is based on the facts and the
law involved in the controversy before him.
It may thus be observed that conciliation is more formal than mediation in the sense
that the Conciliator’s opinion, unlike the Mediator’s, may be binding on the parties, although it
may be merely temporary in character.

4. Preventive mediation
1. PREVENTIVE MEDIATION AS A REMEDY.
“Preventive mediation,” as a remedy, is not found in the Labor Code. But under the law
which created the NCMB, it is expressly stated that one of its functions is to provide preventive
mediation to disputing parties. The term “preventive mediation case” refers to the potential or
brewing labor dispute which is the subject of a formal or informal request for conciliation and
mediation assistance sought by either or both parties in order to remedy, contain or prevent its
degeneration into a full blown dispute through amicable settlement.

2. HOW TO INITIATE PREVENTIVE MEDIATION.

Preventive mediation proceeding may be initiated in two (2) ways:
(1) By filing a notice or request of preventive mediation, as distinguished from a
notice of strike/lockout; or
(2) By conversion of the notice of strike/lockout into a preventive mediation
case.

3. AUTHORITY TO CONVERT A NOTICE OF STRIKE/LOCKOUT INTO A PREVENTIVE MEDIATION

CASE.
The NCMB has the authority to convert a notice of strike/lockout filed by the
union/employer into a preventive mediation case under any of the following circumstances:
1. When the issues raised in the notice of strike/lockout are not strikeable in character.
2. When the party which filed the notice of strike/lockout voluntarily asks for the
conversion.
3. When both parties to a labor dispute mutually agree to have it subjected to
preventive mediation proceeding.
 Such authority is in pursuance of the NCMB’s duty to exert all efforts at mediation and
conciliation to enable the parties to settle their dispute amicably and in line with the State policy
of favoring voluntary modes of settling labor disputes.

4. CONVERSION OF A NOTICE OF STRIKE OR NOTICE OF LOCKOUT INTO A PREVENTIVE

MEDIATION CASE RESULTS IN ITS DISMISSAL.
Once the notice of strike is converted into a preventive mediation case, the notice is
deemed dropped from the dockets as if no notice of strike has been filed. Since there is no more
notice of strike to speak about, any strike subsequently staged by the union after the conversion
is deemed not to have complied with the requirements of a valid strike and therefore illegal.
The same rule applies in the case of lockout by an employer.

5. RELEVANT CASES.
A case in point is Philippine Airlines, Inc. v. Secretary of Labor and Employment, where
the strike was declared illegal for lack of a valid notice of strike in view of the NCMB’s conversion
of said notice into a preventive mediation case.
It is clear, according to San Miguel Corporation v. NLRC, that the moment the NCMB
orders the preventive mediation in a strike case, the union thereupon loses the notice of strike it
had filed. Consequently, if it still defiantly proceeds with the strike while mediation is on-going,
the strike is illegal.

G. Department of Labor and Employment Regional Directors

1. Jurisdiction
1. JURISDICTION
1. JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The DOLE Regional Directors have original and exclusive jurisdiction over the
following cases:
(a) Labor standards enforcement cases under Article 128;
(b) Small money claims cases arising from labor standards violations in the
amount not exceeding P5,000.00 and not accompanied with a claim for
reinstatement under Article 129;
(c) Occupational safety and health violations;
(d) Registration of unions and cancellation thereof, cases filed against unions
and other labor relations related cases;
(e) Complaints against private recruitment and placement agencies (PRPAs) for
local employment; and
(f) Cases submitted to them for voluntary arbitration in their capacity as Ex-
Officio Voluntary Arbitrators (EVAs) under Department Order No. 83-07,
Series of 2007

2. Recovery and adjudicatory power

H. Department of Labor and Employment Secretary
1. POWERS OF THE DOLE SECRETARY.
The DOLE Secretary, being the head of the Department of Labor and Employment, is
possessed of a number of powers, some of which are mentioned in the syllabus, to wit:
1. Visitorial and enforcement powers;
2. Power to suspend/effects of termination;
3. Assumption of jurisdiction;
4. Appellate jurisdiction; and
5. Voluntary arbitration powers.

1. Jurisdiction
1. ASSUMPTION OF JURISDICTION
The DOLE Secretary is granted under Article 263(g) of the Labor Code, the
extraordinary police power of assuming jurisdiction over a labor dispute which, in his
opinion, will cause or likely to cause a strike or lockout in an industry indispensable to
the national interest, or the so-called “national interest” cases. Alternatively, he may
certify the labor dispute to the NLRC for compulsory arbitration.
4. APPELLATE JURISDICTION
I. VARIOUS APPEALS TO THE DOLE SECRETARY UNDER THE LABOR CODE AND
APPLICABLE RULES
1. OFFICES FROM WHICH APPEALS MAY ORIGINATE.
Appeals to the DOLE Secretary may originate from any of the following
offices:
(1) DOLE Regional Directors;
(2) Med-Arbiters;
(3) Director of the Bureau of Labor Relations (BLR); and
(4) Philippine Overseas Employment Administration (POEA).

2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.

The following decisions, awards or orders are not appealable to the
Office of the DOLE Secretary:
(1) Those rendered by Labor Arbiters that are appealable to the
Commission (NLRC) which has exclusive appellate jurisdiction
thereover;
(2) Those rendered by the Commission (NLRC) since they can be
elevated directly to the CA by way of a Rule 65 certiorari petition;
(3) Those rendered by the BLR Director in the exercise of his appellate
jurisdiction since they can be brought directly to the CA under Rule
65 certiorari petition;
(4) Those rendered by DOLE Regional Directors under Article 129 of the
Labor Code since they are appealable to the NLRC;
(5) Those issued by DOLE Regional Directors in their capacity as Ex-
Officio Voluntary Arbitrators (EVAs) since they can be brought
directly to the CA under Rule 43 of the Rules of Court; and
 (6) Those rendered by Voluntary Arbitrators which are appealable
directly to the CA under Rule 43 of the Rules of Court.

2. Visitorial and enforcement powers

1. THREE (3) KINDS OF POWER UNDER ARTICLE 128.
Article 128 of the Labor Code, as amended, basically enunciates the
three (3) kinds of power which the DOLE Secretary and/or the Regional
Directors, his duly authorized representatives, may exercise in connection with
the administration and enforcement of the labor standards provisions of the
Labor Code and of any labor law, wage order or rules and regulations issued
pursuant thereto.
The three (3) kinds of power are as follows:
1) Visitorial power:
2) Enforcement power: and
3) Appellate power or power of review.

2. WHO EXERCISE THE POWERS.

Nos. 1 and 2 above are exercised under the original jurisdiction of the
DOLE Regional Directors.
This has been earlier discussed under the separate topic of “VII.
PROCEDURE AND JURISDICTION, E. DOLE Regional Directors, 1. Jurisdiction”,
supra. Hence, the same will no longer be touched under the instant topical
discussion.
The appellate power in No. 3 above may only be exercised by the DOLE
Secretary in respect to any decision, order or award issued by the DOLE Regional
Directors.

3. NATURE OF THE VISITORIAL AND ENFORCEMENT POWERS.

The visitorial and enforcement powers granted to the DOLE Secretary
and the DOLE Regional Directors who are his duly authorized representatives,
are quasi-judicial in nature.

4. IT IS THE REGIONAL DIRECTORS WHO HAVE ORIGINAL JURISDICTION TO EXERCISE THE

VISITORIAL AND ENFORCEMENT POWERS UNDER ARTICLES 37, 128 AND 274.
In the instances contemplated under Articles 37, 128 and 274, it is the
DOLE Regional Directors, the DOLE Secretary’s duly authorized representatives
commonly referred to in these three (3) articles, who have the original
jurisdiction to exercise the visitorial power granted therein.

5. THE ROLE OF THE DOLE SECRETARY IN THE EXERCISE OF VISITORIAL AND

ENFORCEMENT POWERS IS APPELLATE IN NATURE.
It is clear from the above disquisition that the original jurisdiction over
the exercise of the visitorial and enforcement powers belongs to the DOLE
Regional Directors, as the duly authorized representatives of the DOLE
 Secretary. The role of the DOLE Secretary is confined to the exercise of his
appellate jurisdiction over the decisions, orders and awards of the DOLE
Regional Directors in cases brought before them for adjudication under Articles
128 and 274.

3. Power to suspend effects of termination

1. GROUNDS.
The DOLE Secretary may suspend the effects of termination pending
resolution of the dispute in the event of a prima facie finding by the appropriate
official of the DOLE before whom the dispute is pending that: 1. the termination
may cause a serious labor dispute; and/or 2. the termination is in
implementation of a mass lay-off.

2. RATIONALE FOR SUSPENDING THE EFFECTS OF TERMINATION.

The obvious purpose behind this rule is to bring the parties back to the
status quo ante litem, that is, their state of relationship prior to the termination.
In this way, the workers will be litigating the issue of the validity or legality of
their termination on more or less equal footing with the employer since they
will be immediately reinstated and accordingly not be deprived of their wages
while the litigation is on-going.

3. REINSTATEMENT PENDING RESOLUTION OF THE TERMINATION DISPUTE.

Suspension of the effects of termination will necessarily result in the
immediate reinstatement of the terminated employees. An order of
reinstatement pending resolution of the case may thus be issued by the DOLE
Secretary pursuant to this power.

4. DISTINGUISHED FROM DOLE SECRETARY’S POWER OF ASSUMPTION OR

CERTIFICATION IN NATIONAL INTEREST CASES.
a. Different power of the DOLE Secretary.
This power of the DOLE Secretary granted under Article 277(b) should
be distinguished from his power to assume or certify labor disputes involving
industries indispensable to the national interest under Article 263(g). The
following distinctions may be cited:
First, the exercise of the power to suspend the effects of termination
involves only the issue of termination of employment which may cause a serious
labor dispute or is in implementation of a mass lay-off; while the power to
assume or certify labor disputes is applicable to all labor disputes, irrespective of
the grounds therefor, provided such labor disputes will cause or likely to cause
strikes or lockouts in industries indispensable to the national interest.
Second, the former requires the conduct of preliminary determination
of the existence of prima facie evidence that the termination may cause a
serious labor dispute or is in implementation of a mass lay-off to be conducted
 by the appropriate official of the DOLE before whom the termination dispute is
pending; while the latter does not require such preliminary prima facie
determination. In fact, prior notice and hearing are not required before the
DOLE Secretary may issue an assumption or certification order as held in Capitol
Medical Center, Inc. v. Trajano.
Third, the “serious labor dispute” contemplated under the former may
or may not involve a strike or lockout; while the labor dispute referred to in the
latter will cause or likely to cause a strike or lockout.
Fourth, the former may be exercised in cases of termination of
employment for as long as any of the two (2) grounds mentioned in Article
277(b) exists, irrespective of the nature of the business of the employer; while
the latter may only be exercised in industries indispensable to the national
interest.
Fifth, the remedy under the former is immediate reinstatement pending
resolution of the termination case; while in the latter, the remedy is the
automatic return to work of the strikers or locked-out employees, if the strike or
lock-out is on-going at the time of the issuance of the assumption/certification
order or the enjoining of the strike or lockout, if one has not taken place,
pending the resolution of the issues raised in the notice of strike or lockout.

4. Remedies

I. Voluntary Arbitrator
1. VOLUNTARY ARBITRATION.
“Voluntary arbitration” refers to the mode of settling labor-management disputes in
which the parties select a competent, trained and impartial third person who is tasked to decide
on the merits of the case and whose decision is final and executory. It is a third-party settlement
of a labor dispute involving the mutual consent by the representatives of the employer and the
labor union involved in a labor dispute to submit their case for arbitration.

2. VOLUNTARY ARBITRATOR.
a. Who is a Voluntary Arbitrator?
A “Voluntary Arbitrator” refers to:
(1) any person who has been accredited by the National Conciliation and
Mediation Board (“NCMB” or “Board”) as such; or
(2) any person named or designated in the CBA by the parties as their Voluntary
Arbitrator; or
(3) one chosen by the parties with or without the assistance of the NCMB,
pursuant to a selection procedure agreed upon in the CBA; or
(4) one appointed by the NCMB in case either of the parties to the CBA refuses
to submit to voluntary arbitration.
 This term includes a panel of Voluntary Arbitrators.

3. VOLUNTARY ARBITRATOR ACTS IN QUASI-JUDICIAL CAPACITY.

Although not a part of a government unit or a personnel of the Department of Labor
and Employment, a Voluntary Arbitrator, by the nature of his functions, acts in a quasi-judicial
capacity. He is a means by which government acts, or by which a certain government act or
function is performed. He performs a state function pursuant to a governmental power
delegated to him under the Labor Code. The landmark case of Luzon Development Bank v.
Association of Luzon Development Bank Employees, clearly declared that a Voluntary Arbitrator,
whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency.

1. Jurisdiction
1. ORIGINAL AND EXCLUSIVE JURISDICTION.
a. In general.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have exclusive
and original jurisdiction over the following cases:
(1) Unresolved grievances arising from the interpretation or implementation of
the collective bargaining agreement (CBA).
(2) Unresolved grievances arising from the interpretation or enforcement of
company personnel policies.
(3) Violations of the CBA which are not gross in character.
(4) Other labor disputes, including unfair labor practices and bargaining
deadlocks, upon agreement of the parties.
(5) National interest cases.
(6) Wage distortion issues arising from the application of any wage orders in
organized establishments.
(7) Unresolved grievances arising from the interpretation and implementation of
the Productivity Incentive Programs under R.A. No. 6971.

b. Rights disputes.
Nos. 1, 2 and 3 above, which are provided for under Article 261 of the Labor
Code, are commonly known as “rights disputes.” This kind of disputes contemplates the
existence of a CBA already concluded or, at any rate, a situation in which no effort is
made to bring about a formal change in its terms or to create a new one. The dispute
relates either to the meaning or proper application of a particular provision therein with
reference to a specific situation or to an omitted case. In the latter event, the claim is
founded upon some incident of the employment relation or asserted one, independent
of those covered by the collective agreement. In either case, the claim is to rights
accrued and not merely to new ones created for the future.

c. Interest disputes.
Bargaining deadlocks are often referred to as “interest disputes.” This kind of
disputes relates to disputes over the formation of collective agreements or efforts to
 secure them. They arise where there is no such agreement or where it is sought to
change the terms of one and therefore the issue is not whether an existing agreement
controls the controversy. They look to the acquisition of rights for the future, not to
assertion of rights claimed to have vested in the past. I

2. Remedies
1. RELIEFS AND REMEDIES THAT MAY BE GRANTED BY VOLUNTARY ARBITRATORS.
Besides the procedural remedies discussed above, the Voluntary Arbitrator or
panel of Voluntary Arbitrators may grant the same reliefs and remedies granted by
Labor Arbiters under Article 279 of the Labor Code, such as:
(1) In illegal dismissal cases:
(a) Actual reinstatement;
(b) Separation pay in lieu of reinstatement, in case reinstatement
becomes impossible, non-feasible or impractical;
(c) Full backwages;
(d) Moral and exemplary damages; and
(e) Attorney’s fees.
(2) Monetary awards in monetary claims cases in which case, the decision
should specify the amount granted and the formula used in the computation
thereof.

J. Prescription of actions
1. Money claims
1. MONEY CLAIMS CASES.
a. Prescriptive period is three (3) years under Article 291 of the Labor Code. -
The prescriptive period of all money claims and benefits arising from employer-
employee relations is 3 years from the time the cause of action accrued; otherwise, they
shall be forever barred.

b. All other money claims of workers prescribe in 3 years. - Article 291

contemplates all money claims arising from employer-employee relationship, including:
1. Money claims arising from the CBA.
2. Incremental proceeds from tuition increases.
3. Money claims of Overseas Filipino Workers (OFWs).

Note must be made that in the 2010 case of Southeastern Shipping v. Navarra,
Jr., the 1-year prescriptive period in Section 28 of POEA-SEC was declared null and void.
The reason is that Article 291 of the Labor Code is the law governing the prescription of
money claims of seafarers, a class of overseas contract workers. This law prevails over
said Section 28.

2. Illegal dismissal
2. ILLEGAL DISMISSAL CASES.
 a. Legal basis is not Article 291 of the Labor Code but Article 1146 of the Civil
Code. - The 3-year prescriptive period in Article 291 solely applies to money claims but
not to illegal dismissal cases which are not in the nature of money claims. The
prescriptive period of illegal dismissal cases is 4 years under Article 1146 of the Civil
Code.

3. Unfair labor practice

3. UNFAIR LABOR PRACTICE (ULP) CASES.
a. Prescriptive period of ULP cases is 1 year (Article 290, Labor Code). - The prescriptive
period for all complaints involving unfair labor practices is one (1) year from the time the acts
complained of were committed; otherwise, they shall be forever barred.

b. Pre-requisite for prosecution of criminal cases. - Before a criminal action for ULP
may be filed, it is a condition sine qua non that a final judgment finding that an unfair labor
practice act was committed by the respondent should first be secured or obtained in the labor
case initiated before the Labor Arbiter or the Voluntary Arbitrator, as the case may be. Final
judgment is one that finally disposes of the action or proceeding. For instance, if the remedy of
appeal is available but no appeal is made, then, the judgment is deemed final and executory. If
an appeal is made, then the final judgment rendered by the last tribunal, say the Supreme
Court, to which the case was elevated should be the reckoning factor.

c. Interruption of prescriptive period of offenses. - As far as ULP cases are concerned,

the running of the one (1) year prescriptive period is interrupted during the pendency of the
labor proceeding.

d. Evidentiary value of the final judgment in the labor case. - In ULP cases, the final
judgment in the labor case cannot be presented as evidence of the facts proven therein or as
evidence of the guilt of the respondent therein. Its evidentiary or probative value is confined
merely in proving the fact of compliance with the condition sine qua non prescribed by law, i.e.,
that a final judgment has been secured in the labor proceeding finding that an unfair labor
practice act was in fact committed by the respondent.

4. Offenses under the Labor Code

a. Prescriptive period is 3 years (Article 290, Labor Code). - The prescriptive period of all
criminal offenses penalized under the Labor Code and the Rules to Implement the Labor
Code is three (3) years from the time of commission thereof.
b. Consequence of non-compliance with prescriptive period under Article 290. - Failure to
initiate or file the criminal action or complaint within the prescriptive period shall forever bar
such action.
c. Illegal dismissal is not an “offense” under Article 290. - The act of the employer in dismissing
an employee without cause, although a violation of the Labor Code and its implementing
rules, does not amount to an “offense” as this term is understood and contemplated under
Article 290.
 5. Illegal recruitment
a. Simple illegal recruitment cases. – The prescriptive period is five (5) years.
b. Illegal recruitment cases involving economic sabotage. – The prescriptive period is twenty
(20) years.

LIST OF RELEVANT LAWS AND ISSUANCES

I. THE 1987 CONSTITUTION

II. LAWS AND RULES OF PROCEDURE

Pres. Decree No. 442 Labor Code of the Philippines

Rep. Act No. 386 Civil Code of the Philippines, Articles 1700-1703

Rep. Act No. 8042 Migrant Workers and Overseas Filipinos Act of 1995
as amended by:
Rep. Act No. 10022

Rep. Act No. 9208 Anti-Trafficking in Persons Act of 2003

as amended by:
Rep. Act No. 10364

Rep. Act No. 11227 Handbook for OFWs Act of 2018

Pres. Decree No. 626 Amending Certain Articles of the Labor Code

Pres. Decree No. 851 13th Month Pay Law

Rep. Act No. 11165 Telecommuting Act

Rep. Act No. 11210 105 Day Expanded Maternity Leave Law

Rep. Act No. 8187 Paternity Leave Act of 1996

as amended by:
Rep. Act No. 11210

Rep. Act No. 8972 Solo Parents’ Welfare Act

as amended by:
Rep. Act No. 11210

Rep. Act No. 9710 Magna Carta of Women

Rep. Act No. 6725 Amending Art. 135 of the Labor Code Re: Prohibition
On Discrimination Against Women

Rep. Act No. 9262 Anti-Violence Against Women and Their Children Act of 2004

Rep. Act No. 11313 Safe Spaces Act

'
Rep. Aet No. 7610 Special Protection of Children Against Abuse, Exploitation and
as amended by: Discrimination Act
Rep. Act No. 9231

Rep. Act No. 10361 Batas Kasambahay

Rep. Act No. 7877 Anti-Sexual Harassment Act of 1995

Rep. Act No. 7699 Portability Law

Rep. Act No. 6715 New Labor Relations Law

'
Rep. Act, No. 6727 Wage Rationalization Act

Rep. Act No. 6971 Productivity Incentives Act of 1990

Rep. Act No. 8282 SSS Law

Rep. Act No. 8291 GSIS Law

Rep. Act No. 11199 Social Security Act of 2018

Rep. Act No. 10801 Overseas Workers Welfare Administration Act

Rep. Act No. 11223 Universal Health Care Act

Rules of Court Rules 45 and 65

III. ISSUANCES

Exec. Order No. 126 Reorganization Act of the Ministry of Labor and Employment

DOLE Advisory No. 2, Guidelines on the Adoption of Flexible

s. 2009 Work Arrangements

DOLE Order No. 150, s.2016 Revised Guidelines Governing the Employment and Working Conditions
of Security Guards and other Private Security Personnel in the Private
Security Industry

POEA Memorandum Amended Standard Terms and Conditions Governing the Overseas
Circular No. 010-10 Employment of Filipino Seafarers On-Board Ocean-Going Ships

Revised National Conciliation and Mediation Board Manual of

Procedures for Conciliation and Preventive Mediation Cases 2017
Edition