TABLE OF CONTENTS
22
I. GENERAL PRINCIPLES .......................... 1
A. Basic Policy on Labor .......................................... 1
1. Declaration of Basic Policy ............................. 1
a. Right to Self-Organization and Collective
Bargaining ........................................................... 1
b. Security of Tenure ........................................ 2
c. Social Justice .................................................. 2
d. Equal Work Opportunities ......................... 3
B. Construction in Favor of Labor ......................... 4
C. Burden of Proof and Quantum of Evidence in
Labor Cases................................................................. 4
D. Legal Basis ............................................................. 5
1. 1987 Constitution.............................................. 5
2. Civil Code ........................................................... 6
3. Labor Code ........................................................ 6
II. RECRUITMENT AND PLACEMENT
OF WORKERS ...............................................8
A. Recruitment and Placement ................................ 8
1. General Provisions............................................ 8
a. Labor Code .................................................... 9
b. R. A. No. 8042 .............................................. 9
2. Illegal Recruitment and Other Prohibited
Activities................................................................ 10
a. Elements ....................................................... 10
b. Types of Illegal Recruitment..................... 12
c. Illegal Recruitment as Distinguished from
Estafa................................................................. 13
3. Liability of Local Recruitment Agency and
Foreign Employer ............................................... 13
a. Solidary Liability .......................................... 13
Foreign Employer ........................................... 13
b. Theory of Imputed Knowledge ............... 15
4. Entities Prohibited from Recruiting ............ 15
5. Cancellation of License or Authority ........... 16
6. Termination of Contract of Migrant Worker
Without Just or Valid Cause .............................. 16
7. Ban on Direct Hiring ...................................... 17
a. General Rule ................................................ 17
b. Exceptions ................................................... 17
B. Employment of Non-Resident Aliens............. 18
1. Coverage ........................................................... 18
2. Conditions for Grant of Permit.................... 19
3. Validity of AEP and Renewal ....................... 20
4. Denial of Application ..................................... 21
5. Revocation; Cancellation ............................... 21
6. Appeal ............................................................... 21
7. Penalty ...............................................................
III. LABOR STANDARDS .......................... 23
A. General Provisions.............................................. 23
1. Employer-Employee Relationship ................ 23
2. Test to Determine the Existence of an
Employer-Employee Relationship .................... 23
a. Four-Fold Test ............................................. 23
b. Economic Dependence Test ..................... 24
3. Employee Distinguished from an
Independent Contractor ..................................... 25
B. Conditions of Employment ............................... 25
1. Covered Employees/Workers ....................... 25
a. Government Employees ............................ 25
b. Managerial Employees ............................... 25
c. Members of the Managerial Staff.............. 26
d. Field Personnel ............................................ 26
e. Dependent Family Members ..................... 27
f. Domestic Helpers (Workers) ..................... 27
g. Persons in Personal Service of Another .. 27
h. Workers Paid by Result (piece-workers) . 27
2. Hours of Work................................................. 28
a. Normal Hours of Work.............................. 29
b. Meal Periods ................................................ 31
c. Night-Shift Differential .............................. 32
d. Overtime Work ........................................... 32
e. Compressed Work Week, Flexible Work
Arrangement Alternative Work
Arrangements, Telecommuting Program .... 34
3. Rest Periods ...................................................... 36
4. Holidays............................................................. 38
5. Bonus, 13th Month Pay .................................. 43
6. Service Charges ................................................ 46
C. Wages .................................................................... 47
1. Payment of Wages ........................................... 47
a. Definition, Components, and Exclusions47
b. Principles ...................................................... 50
c. Form of Payment ........................................ 50
d. Time of payment ......................................... 51
e. Place of Payment ......................................... 51
f. Person to Pay ................................................ 52
2. Prohibitions Regarding Wages ...................... 52
a. Against interference in disposal of wages 52
b. Against Wage Deduction ........................... 52
c. Against Requirements to Make Deposits
for Loss or Damage ........................................ 52
d. Against Withholding of Wage ................... 53
e. Against Deduction to Ensure Employment
............................................................................ 53
f. Against Retaliatory Measures ..................... 53
 g. Against False Reporting ............................. 53
3. Facilities vs. Supplements .............................. 53
a. Definition ..................................................... 53
b. Beneficiaries................................................. 53
c. Computation ................................................ 53
4. Minimum Wage ............................................... 54
a. Definition ..................................................... 54
b. Nature ........................................................... 54
5. Wage Distortion .............................................. 55
a. Wage Order .................................................. 55
b. Wage Distortion.......................................... 56
6. Non-Diminution of Benefits......................... 57
D. Leaves................................................................... 57
V. LABOR RELATIONS ..............................91
1. Service Incentive Leave .................................. 57
2. Expanded Maternity Leave............................ 58
3. Paternity Leave ................................................ 60
4. Parental Leave for Solo Parents.................... 61
5. Leave Benefits for Women Workers ........... 61
a. Gynecological Leave ................................... 61
b. Battered Woman Leave ............................. 63
E. Special Groups of Employees .......................... 63
1. Women.............................................................. 63
a. Discrimination ............................................. 63
b. Stipulation Against Marriage..................... 64
c. Prohibited Acts............................................ 64
2. Minors .............................................................. 65
a. Child Labor vs. Working Child................. 65
b. Allowed Working Hours and Industries of
a Working Child .............................................. 65
c. Prohibited Acts............................................ 65
3. Kasambahay (R.A. No. 10361) ..................... 66
4. Homeworkers .................................................. 69
a. Rights and Benefits ..................................... 69
b. Employer Liability ...................................... 69
5. Night Workers ................................................. 70
a. Mandatory Facilities .................................... 70
6. Persons with Disabilities ................................ 70
a. Discrimination ............................................. 70
b. Incentives for Employers .......................... 71
F. Sexual Harassment in the Work Environment
..................................................................................... 72
IV. SOCIAL WELFARE LEGISLATION ... 76
A. Social Security System Law .............................. 76
1. Coverage and Exclusions ............................... 76
2. Dependents and Beneficiaries ....................... 76
3. Benefits ............................................................. 77
B. Government Service Insurance System Law.. 79
1. Coverage and Exclusions ............................... 79
2. Dependents and Beneficiaries ....................... 79
3. Benefits .............................................................. 80
C. Limited Portability Law ...................................... 82
D. Disability and Death Benefits ........................... 82
1. Labor Code ....................................................... 82
2. Philippine Overseas Employment
Administration-Standard Employment Contract
for Seafarers .......................................................... 87
a. Compensation for Benefits for Injury or
Illness ................................................................. 87
b. Compensation and Benefits for Death.... 88
A. Right to Self-Organization................................. 91
1. Who May Join, Form, or Assist .................... 91
Labor Organizations or Workers’ Associations
................................................................................. 91
2. Restrictions as to:............................................. 92
a. Managerial Employees ................................ 92
b. Supervisory Employees .............................. 92
c. Confidential Employees ............................. 92
d. Employee-Members of Cooperatives ...... 93
3. Determination of Appropriate Bargaining
Unit (ABU)............................................................ 94
4. Non-Interference with Workers’ Rights to
Self-Organization ................................................. 94
B. Legitimate Labor Organizations ....................... 94
1. Registration with the DOLE ......................... 94
2. Cancellation of Registration ........................... 94
3. Affiliation/Disaffiliation from National
Union or Federation ............................................ 95
4. Rights of Legitimate Labor Organizations .. 98
5. Rights and Conditions of Membership in
Legitimate Labor Organizations ........................ 98
6. Check Off, Assessments, Union Dues, and
Agency Fees .......................................................... 98
a. Check-off ...................................................... 98
b. Assessment ................................................... 99
c. Union dues.................................................... 99
d. Agency Fees ................................................. 99
7. Union Security Clause ................................... 100
a. Closed-shop ................................................ 101
b. Maintenance of Membership Shop ........ 101
c. Union Shop ................................................ 101
d. Modified Union Shop............................... 101
e. Agency Shop .............................................. 101
C. Bargaining Representative................................ 103
1. Modes to Acquire Status as Sole and
Exclusive Bargaining Agent (SEBA) .............. 104
 a. SEBA Certification ................................... 104
b. Certification/Consent Election .............. 105
c. Bars to the Holding of Certification/
Consent Election ........................................... 110
d. Failure of Election, Run-Off Election, Re-
run Election ................................................... 111
e. Employer as a Mere Bystander Rule ...... 112
D. Collective Bargaining ....................................... 113
1. Duty to Bargain Collectively ....................... 113
a. Bargaining in Bad Faith............................ 114
2. Collective Bargaining Agreement (CBA),
Mandatory Provisions ....................................... 115
a. Nature of CBA .......................................... 115
b. Mandatory Provisions in a CBA ............ 115
3. Signing, Posting, Registration...................... 115
a. Ratification ................................................. 115
b. Registration ................................................ 116
4. Term of CBA, Freedom Period .................. 116
a. CBA Effectivity ......................................... 116
b. Hold-Over Principle ................................ 116
c. CBA Duration ........................................... 117
E. Unfair Labor Practices ..................................... 118
1. Nature, Aspects ............................................. 118
2. By Employers................................................. 118
a. Interference, Restraint or Coercion ....... 118
b. Yellow Dog Contracts ............................. 119
c. Contracting Out Services Which
Discourage Unionism ................................... 120
d. Company Union ....................................... 120
e. Discrimination to Encourage or
Discourage Unionism ................................... 120
f. Discrimination for Having Given or About
to Give Testimony ........................................ 120
g. Violation of Duty to Bargain Collectively
.......................................................................... 120
h. Payment of Negotiation or Attorney’s Fees
.......................................................................... 121
i. Violation of CBA ....................................... 121
3. By Labor Organizations ............................... 122
a. Restraint or Coercion ............................... 122
b. Discrimination........................................... 122
c. Violation of Duty or Refusal to Bargain 122
d. Illegal Exaction (Featherbedding) .......... 123
e. Asking or Accepting Negotiation and
Other Attorney’s Fees .................................. 123
f. Violation of CBA....................................... 123
F. Peaceful Concerted Activities ......................... 123
1. Strikes .............................................................. 124
a. Grounds for Strike .................................... 124
b. Mandatory Procedural Requirements .... 124
c. Legal Strike vs. Illegal Strike .................... 126
d. Prohibited Acts During Strike ................ 127
2. Picketing .......................................................... 130
3. Lockouts.......................................................... 131
a. Grounds for Lockout................................ 131
b. Mandatory Procedural Requirements .... 131
4. Assumption of Jurisdiction by the DOLE
Secretary .............................................................. 132
5. Injunctions ...................................................... 133
VI. TERMINATION OF EMPLOYMENT
..................................................................... 134
A. Security of Tenure ............................................. 134
1. Categories of Employment as to Tenure... 134
a. Regular......................................................... 134
b. Casual .......................................................... 135
c. Probationary ............................................... 135
d. Project ......................................................... 137
e. Seasonal ....................................................... 138
f. Fixed-Term ................................................. 139
2. Legitimate Subcontracting vs. Labor-Only
Contracting.......................................................... 140
a. Elements ..................................................... 140
b. Trilateral Relationship .............................. 140
c. Solidary Liability ........................................ 141
B. Termination by Employer................................ 141
1. Substantive Due Process .............................. 141
VII. MANAGEMENT PREROGATIVE ... 166
A. Discipline ............................................................ 166
B. Transfer of Employees ..................................... 166
C. Productivity Standards...................................... 167
D. Bonus .................................................................. 167
E. Change of Working Hours .............................. 168
F. Bona Fide Occupational Qualifications ........... 168
G. Post-Employment Restrictions ...................... 168
H. Clearance Procedures ....................................... 169
I. Limitations on Management Prerogative; Police
Power of the State .................................................. 169
VIII. JURISDICTION AND RELIEFS ..... 171
A. Mandatory Conciliation-Mediation, SENA .. 171
B. Labor Arbiter ..................................................... 171
1. Jurisdiction ...................................................... 171
 2. Labor Arbiter vs. Regional Director .......... 171
3. Procedure........................................................ 171
a. Requirements for Appeal ......................... 171
C. National Labor Relations Commission ......... 172
1. Jurisdiction ..................................................... 172
2. Function.......................................................... 173
3. Procedure........................................................ 173
D. Judicial Review of Labor Rulings .................. 173
E. Bureau of Labor Relations .............................. 174
1. Jurisdiction ..................................................... 174
2. Function.......................................................... 175
F. National Conciliation and Mediation Board. 176
1. Jurisdiction ..................................................... 176
2. Conciliation as Distinguished from Mediation
.............................................................................. 176
3. Preventive Mediation .................................... 176
G. POEA................................................................. 177
H. DOLE Regional Directors ............................. 177
1. Jurisdiction ..................................................... 177
2. Recovery and Adjudicatory Power ............. 178
I. DOLE Secretary ................................................. 179
1. Jurisdiction ..................................................... 179
2. Visitorial and Enforcement Powers ........... 180
3. Remedies......................................................... 182
J. Grievance Machinery......................................... 182
K. Voluntary arbitrator ......................................... 182
1. Jurisdiction ..................................................... 183
2. Remedies......................................................... 184
Motion for Reconsideration ............................ 184
L. Prescription of Actions .................................... 184
1. Money Claims ................................................ 184
2. Illegal Dismissal ............................................. 184
3. Unfair Labor Practice ................................... 185
4. Offenses under the Labor Code ................. 185
5. Illegal Recruitment ........................................ 185
LABOR 1
LABOR LAW
LABOR 1 LABOR LAW

I. GENERAL PRINCIPLES choosing for purposes of

collective bargaining.

A. Basic Policy on Labor Ambulant, intermittent and itinerant workers,

self-employed people, rural workers and those
1. Declaration of Basic Policy without any definite employers may form labor
organizations for their mutual aid and
Labor Code Declaration of Basic Policy protection.
[Art. 3, LC]
The State shall: Art. 254, Labor Code
a. Afford protection to labor, Employees of government corporations
b. Promote full employment, established under the corporation code shall
c. Ensure equal work opportunities have the right to:
regardless of sex, race or creed, and a. Organize, and
d. Regulate the relations between b. Bargain collectively with their
workers and employers. respective employers.

The State shall assure the rights of workers to: All other employees in the civil service shall
a. Self-organization, have the right to form associations for
b. Collective bargaining, purposes not contrary to law.
c. Security of tenure, and
d. Just and humane conditions of work. Infringement of the Right to Self-
Organization
a. Right to Self-Organization and It shall be unlawful for any person to restrain,
Collective Bargaining coerce, discriminate against or unduly interfere
with employees and workers in their exercise
1987 Constitution of the right to self-organization [Art. 257, LC].
The State shall guarantee:
a. The right of the people, including those Scope of Right to Self-Organization
employed in the public and private 1. Right to form, join or assist labor
sectors, to form unions, associations, organizations of their own choosing for
or societies for purposes not contrary the purpose of collective bargaining
to law [Sec. 8, Art. III] through representatives of their own
b. The rights of all workers to – choosing [Art. 257].
i. Self-organization [Sec. 3, Art. 2. Right to engage in lawful concerted
XIII] activities for the same purpose
ii. Collective bargaining and (collective bargaining) or for their
negotiations [Sec. 3, Art. XIII] mutual aid and protection [Art. 257].
iii. Peaceful concerted activities 3. The right of any person to join an
[Sec. 3, Art. XIII] organization also includes the right to
iv. Strike in accordance with law leave that organization and join
[Sec. 3, Art. XIII] another one [Heritage Hotel Manila v.
PIGLAS-Heritage, G.R. No. 177024
Art. 253, Labor Code (2009)].
All persons employed: 4. The right to form or join a labor
a. In commercial, industrial and organization necessarily includes the
agricultural enterprises, and right to refuse or refrain from exercising
b. In religious, charitable, medical or said right. It is self-evident that just as
educational institutions, whether no one should be denied the exercise
operating for profit or not, shall have of a right granted by law, so also, no
the right to – one should be compelled to exercise
i. Self-organization, such a conferred right [Reyes v.
ii. Form, join, or assist labor Trajano, G.R. No. 84433 (1992)].
organizations of their own 5. The right of the employees to self-
organization is a compelling reason
why their withdrawal from the
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LABOR 1
cooperative must be allowed. As
pointed out by the union, the
resignation of the member-employees
is an expression of their preference for
union membership over that of
membership in the cooperative
[Central Negros Electric Cooperative v.
SOLE, G.R. No. 94045 (1991)].
6. Their freedom to form organizations
would be rendered nugatory if they
could not choose their own leaders to
speak on their behalf and to bargain for
them [Pan-American World Airways,
Inc v. Pan-American Employees
Association, G.R. No. L-25094 (1969)].
b. Security of Tenure
1987 Constitution
All workers shall be entitled to security of
tenure [Art. XIII, Sec. 3, par. 2].
Police power allows the State to regulate the
grant of the right to security of tenure [St.
Luke’s Medical Center Employee’s
Association-AFW v. NLRC, G.R. No. 162053
(2007)].
● Purpose: to safeguard the general
welfare of the public.
● Example: Persons who desire to
engage in the learned professions may
be required to take an examination as
a prerequisite to engaging in the same.
c. Social Justice
Sec. 9, Art. II, 1987 Constitution: The State
shall promote a just and dynamic social order
that will:
a. Ensure the prosperity and
independence of the nation;
b. Free the people from poverty through
policies that provide adequate social
services; and
c. Promote:
1. Full employment,
2. A rising standard of living,
3. Improved quality of life for all
Sec. 10, Art. II, 1987 Constitution: The State
shall promote social justice in all phases of
national development.
Social Justice as Justification
Social justice is neither communism, nor
despotism, nor atomism, nor anarchy BUT:
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a. The humanization of laws; and
b. The equalization of social and
economic forces by the State.
So that justice in its rational and objectively
secular conception may at least be
approximated [Calalang v. Williams, G.R. No.
47800 (1940)].
Social justice means:
a. The promotion of the welfare of all the
people,
b. The adoption by the Government of
measures calculated to insure
economic stability of all the competent
elements of society through –
i. the maintenance of a proper
economic and social
equilibrium in the interrelations
of the members of the
community, constitutionally;
ii. the adoption of measures
legally justifiable, or extra-
constitutionally; and
iii. the exercise of powers
underlying the existence of all
governments on the time-
honored principle of salus
populi est suprema lex.
Note: The welfare of the people should be the
supreme law.
Limits of Social Justice
Social justice should be used only to correct an
injustice [Agabon v. NLRC, G.R. No. 158693
(2004)].
It is not intended to countenance wrongdoing
simply because it is committed by the
underprivileged. It cannot be permitted to be a
refuge of scoundrels any more than can equity
be an impediment to the punishment of the
guilty. Those who invoke social justice may do
so only if their hands are clean and their
motives blameless and not simply because
they happen to be poor [Tirazona v. Phil EDS
Techno-Service, Inc., G.R. 169712 (2009)].
Tilting the Scales
Labor laws are meant to implement and effect
social justice. Thus, such considerations
should be taken into account when dealing with
labor cases [Rivera v. Genesis Transport
Service, Inc., G.R. No. 215568 (2015)].
LABOR 1 LABOR LAW
The social justice suppositions underlying labor d. Equal Work Opportunities
laws require that the statutory grounds
justifying termination of employment should not Declaration of Basic Policy [Art. 3, LC]
be read to justify the view that employees The State shall:
should, in all cases, be free from any kind of a. Afford protection to labor,
error. b. Promote full employment,
c. Ensure equal work opportunities
Not every improper act should be taken to regardless of:
justify the termination of employment. To infer i. Sex,
from a single error that an employee committed ii. Race, or
serious misconduct or besmirched his iii. Creed,
employer’s trust is grave abuse of discretion. It iv. Regulate the relations between
is an inference that is arbitrary and capricious. workers and employers.
It is contrary to the high regard for labor and
social justice enshrined in our Constitution and Note: Art. 3 of the Labor Code must be read in
our labor laws. relation to the 1987 Constitution since this is
still based on the 1973 Constitution.
Welfare State
The welfare state concept is found in the Sec. 3, par. 1, Art. XIII, 1987 Constitution
constitutional clause on the promotion of social The State shall:
justice [Alalayan v. National Power a. Afford full protection to labor –
Corporation, G.R. No. L-24396 (1968)]. i. Local and overseas,
ii. Organized and unorganized,
Purpose: and
a. To ensure the well-being and economic b. Promote full employment and equality
security of all the people, and of employment opportunities for all.
b. In the pledge of protection to labor with
specific authority to regulate the Sec. 2, R.A. No. 10911. Declaration of
relations between landowners and Policies
tenants and between labor and capital. The State shall promote equal opportunities
in employment for everyone. To this end, it
Separation Pay as Measure of Social shall be the policy of the State to:
Justice a. Promote employment of individuals on
General Rule: The rule embodied in the Labor the basis of their –
Code is that a person dismissed for lawful i. Abilities,
cause is not entitled to separation pay [PLDT ii. Knowledge,
v. NLRC, G.R. No. 80609 (1988)]. iii. Skills, and
iv. Qualifications, rather than their
Exception: Considerations of equity. Equity age
has been defined as justice outside law, being b. Prohibit arbitrary age limitations in
ethical rather than jural and belonging to the employment.
sphere of morals than of law. c. Promote the right of all employees and
● Strictly speaking, however, it is not workers, regardless of age, to be
correct to say that there is no express treated equally in terms of –
justification for the grant of separation i. Compensation,
pay to lawfully dismissed employees ii. Benefits,
other than the abstract consideration of iii. Promotion,
equity. iv. Training, and
v. Other employment
Rationale: Our Constitution is replete with opportunities.
positive commands for the promotion of social
justice, and particularly the protection of the
rights of the workers.

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LABOR 1
B. 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
[Art. 4, LC].
In case of doubt, all legislation and all labor
contracts shall be construed in favor of the
safety and decent living for the laborer [Art.
1702, Civil Code].
Liberal Construction of the Laws
Art. 4, LC mandates that all doubts in the
implementation and interpretation of the
provisions thereof shall be resolved in favor of
labor. This is merely in keeping with the spirit
of our Constitution and laws which lean over
backwards in favor of the working class, and
mandate that every doubt must be resolved in
their favor [Hocheng Philippines Corporation v.
Farrales, G.R. No. 211497 (2015)].
Of Labor Contracts
A CBA, as a labor contract within the
contemplation of Art. 1700 of the Civil Code of
the Philippines which governs the relations
between labor and capital, is not merely
contractual in nature but impressed with public
interest, thus, it must yield to the common
good. As such, it must be construed liberally
rather than narrowly and technically, and the
courts must place a practical and realistic
construction upon it, giving due consideration
to the context in which it is negotiated and
purpose which it is intended to serve [Cirtek
Employees Labor Union-FFW v. Cirtek
Electronics, G.R. No. 190515 (2010)].
Mutual Obligation
The employer’s obligation to give his workers
just compensation and treatment carries with it
the corollary right to expect from the workers
adequate work, diligence and good conduct
[Judy Philippines, Inc. v. NLRC, G.R. No.
111934 (1998)].
Labor as Protected Class; Presumption of
Inherent Inequality
The presumption is that the employer and the
employee are on unequal footing, so the State
has the responsibility to protect the employee.
This presumption, however, must be taken on
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a case-to-case basis. In situations where
special qualifications are required for
employment, such as a Master's degree,
prospective employees are in a better position
to bargain with the employer. Employees with
special qualifications would be on equal footing
with their employers, and thus, would need a
lesser degree of protection from the State than
an ordinary rank-and-file worker [Perfecto
Pascua v. Bank Wise Inc., G.R. No. 191460 &
191464 (2018)].
Balancing of Interests
While labor laws should be construed liberally
in favor of labor, we must be able to balance
this with the equally important right of the
[employer] to due process [Gagui v. Dejero,
G.R. No. 196036 (2013)].
C. Burden of Proof and Quantum
of Evidence in Labor Cases
Summary on Burden of Proof
1. Existence of ER-EE Relationship:
Employee
2. Fact of dismissal: Employee
3. Validity of Dismissal: Employer
EE has Burden of Proving Fact of
Employment and of Dismissal
Before a case for illegal dismissal can prosper,
an employer-employee relationship must first
be established by the employee [Javier v. Fly
Ace Corp., G.R. No. 192558 (2012)].
The employee must first establish by
substantial evidence the fact of his dismissal
from service. If there is no dismissal, then there
can be no question as to the legality or illegality
thereof [MZR Industries v. Colambot, G.R. No.
179001 (2013)].
ER has Burden of Proving Valid Dismissal
Unsubstantiated accusations or baseless
conclusions of the employer are insufficient
legal justifications to dismiss an employee. The
unflinching rule in illegal dismissal cases is that
the employer bears the burden of proof
[Garza v. Coca-Cola Bottlers Philippines, Inc.,
G.R. No. 180972 (2014)].
LABOR 1
Penalty Must Be Commensurate with
Gravity of Offense
Not every case of insubordination or willful
disobedience by an employee reasonably
deserves the penalty of dismissal. The penalty
to be imposed on an erring employee must be
commensurate with the gravity of his offense
[Joel Montallana v. La Consolacion College
Manila, G.R. No. 208890 (2014)].
D. Legal Basis
1. 1987 Constitution
ART. II: Declaration of Principles and
State Policies
The State shall:
a. Promote full employment, a rising
standard of living, and an improved
quality of life for all [Sec. 9, Art. II]
b. Promote social justice [Sec. 10, Art. II]
c. Affirm labor as a primary social
economic force [Sec. 18, Art. II]
d. Protect rights of workers and promote
their welfare [Sec. 18, Art. II]
e. Recognize the indispensable role of
the private sector [Sec. 20, Art. II]
f. Encourage private enterprise [Sec. 20,
Art. II]
g. Provide incentives to needed
investments [Sec. 20, Art. II]
SEC. 3, par. 1-2, ART. XIII: Social Justice
and Human Rights
The State shall:
a. Afford full protection to labor, local and
overseas, organized and unorganized
b. Promote full employment and equality
of employment opportunities for all
c. Guarantee the rights (also known as
the “Cardinal Labor Rights”) of all
workers to
i. Self-organization
ii. Collective bargaining and
negotiations
iii. Peaceful concerted activities
iv. Strike in accordance with law
v. Security of tenure
vi. Humane conditions of work
vii. A living wage
viii. To participate in policy and
decision-making processes
affecting their rights and
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benefits as may be provided by
law
ART. III: Bill of Rights
Due Process [Sec. 1, Art. III, 1987
Constitution]
Two-fold requirement: Under the Labor
Code, as amended, the requirements for the
lawful dismissal of an employee by his
employer are two-fold: the substantive and the
procedural.
● Substantive: two requisites must
concur: (1) the dismissal must be for a
just or authorized cause; and (2) the
employee must be afforded an
opportunity to be heard and to defend
himself [Jeffrey Nacague v. Sulpicio
Lines, Inc., G.R. No. 172589 (2010)].
● Procedural: an opportunity to be
heard and to defend oneself must be
observed before an employee may be
dismissed [Metro Eye Security v.
Salsona, G.R. No. 167367 (2007)].
Right to Property
One’s employment is a property right, and the
wrongful interference therewith is an actionable
wrong. The right is considered to be property
within the protection of the constitutional
guarantee of due process of law [Texon
Manufacturing v. Millena, G.R. No. 141380
(2004)].
Right to Assemble [Sec. 4, Art. III, 1987
Constitution]
Right to peaceably assemble and petition for
redress of grievances is, together with freedom
of speech, of expression, and of the press, a
right that enjoys primacy in the realm of
constitutional protection [BAYAN, et al. v.
Ermita, G.R. No. 169838 (2006)].
Wearing armbands and putting up placards to
express one’s views without violating the rights
of third parties, are legal per se and even
constitutionally protected [Bascon v. CA, G.R.
No. 144899 (2004)].
Right to Form Associations [Sec. 8, Art. III,
1987 Constitution]
The right to form associations shall not be
impaired except through a valid exercise of
police power [Bernas, The 1987 Philippine
Constitution: A Comprehensive Reviewer].
LABOR 1
Non-Impairment of Contracts [Sec. 10, Art.
III, 1987 Constitution]
A law which changes the terms of a legal
contract between parties, either in the time or
mode or performance, or imposes new
conditions, or dispenses with those expressed,
or authorizes for its satisfaction something
different from that provided in its terms, is a law
which impairs the obligation of a contract and
is null and void [Clemens v. Nolting, G.R. No.
L-17959 (1922)].
● Vis-à-vis the freedom of contract:
The prohibition to impair the obligation
of contracts is not absolute and
unqualified. In spite of the
constitutional prohibition and the fact
that both parties are of full age and
competent to contract, it does not
necessarily deprive the State of the
power to interfere where the parties do
not stand upon an equality, or where
the public health demands that one
party to the contract shall be protected
against himself [Leyte Land
Transportation Co. v. Leyte Farmers &
Workers Union, G.R. No. L-1377
(1948)].
Labor Rights and Protection
● All persons shall have the right to a
speedy disposition of their cases
before all judicial, quasi-judicial, or
administrative bodies [Sec. 16, Art. III].
● No involuntary servitude in any form
shall exist [Sec. 18 (2), Art. III].
○ Except as a punishment for a
crime whereof the party shall
have been duly convicted [Sec.
18 (2), Art. III].
2. Civil Code
Relations Between Labor and Capital
The relations between capital and labor are not
merely contractual [Art. 1700, Civil Code].
They are impressed with public interest that
labor contracts:
a. Must yield to the common good
b. Are subject to special laws on
1. Labor unions,
2. Collective bargaining,
3. Strikes and lockouts,
4. Closed shop,
5. Wages,
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6. Working conditions,
7. Hours of labor, and
8. Similar subjects.
Neither capital nor labor shall
a. Act oppressively against the other, or
b. Impair the interest or convenience of
the public [Art. 1701, Civil Code].
Neither capital nor labor shall act oppressively
against the other, or impair the interest or
convenience of the public [Art. 1702, Civil
Code].
No contract which practically amounts to
involuntary servitude, under any guise
whatsoever, shall be valid [Art. 1703, Civil
Code].
Provisions of applicable statutes are deemed
written into the contract. Hence, the parties are
not at liberty to insulate themselves and their
relationships from the impact of labor laws and
regulations by simply contracting with each
other [Innodata Philippines, Inc. v. Quejada-
Lopez, G.R. No. 162839 (2006)].
Courts cannot stipulate for the parties or
amend the latter’s agreement, for to do so
would be to alter the real intention of the
contracting parties when the contrary function
of courts is to give force and effect to the
intention of the parties [Maynilad Water
Supervisors Association v. Maynilad Water
Services, Inc., G.R. No. 198935 (2013)].
3. Labor Code
Art. 3. The State shall
a. Afford protection to labor,
b. Promote full employment,
c. Ensure equal work opportunities
regardless of sex, race or creed, and
d. Regulate the relations between
workers and employers.
The State shall assure the rights of workers to
a. Self-organization,
b. Collective bargaining,
c. Security of tenure, and
d. Just and humane conditions of work.
Article 4. Construction in Favor of Labor. – All
doubts in the implementation and interpretation of
the provisions of this Code, including its
LABOR 1 LABOR LAW
implementing rules and regulations, shall be
resolved in favor of labor.

Article 5. Rules and Regulations. – The Department

of Labor and other government agencies charged
with the administration and enforcement of this Code
or any of its parts shall promulgate the necessary
implementing rules and regulations. Such rules and
regulations shall become effective fifteen (15) days
after announcement of their adoption in newspapers
of general circulation.

Article 6. Applicability. – All rights and benefits

granted to workers under this Code shall, except as
may otherwise be provided herein, apply alike to all
workers, whether agricultural or non-agricultural.

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LABOR 1 LABOR LAW

II. RECRUITMENT AND Overseas Filipino Worker/Migrant Worker –

a person who is to be engaged, is engaged, or
PLACEMENT OF WORKERS has been engaged in a remunerated activity:
1. in a state of which he or she is not a
citizen, or
A. Recruitment and Placement 2. on board a vessel navigating the
foreign seas other than a government
1. General Provisions ship used for military or non-
commercial purposes, or
“Recruitment and Placement" Refers to 3. on an installation located offshore or on
Any Act of: [CETCHUP-R-CPA] the high seas [Sec. 2 (a), RA 8042, as
1. Canvassing, amended].
2. Enlisting,
3. Contracting, License and Authority [Art. 13(d) and (f);
4. Transporting, Sec. 3 (h)(g), DO 141-14]
5. Utilizing, License Authority
6. Hiring, or
7. Procuring workers Document issued by the Department of
Labor and Employment (DOLE)
And includes –
1. Referrals,
Authorize an entity to Authorize an entity to
act of passing along or forwarding of an
applicant for employment after an initial operate as a private operate as a private
interview of a selected applicant for employment agency recruitment entity
employment to a selected employer,
placement officer or bureau [Rodolfo v. When a license is Does not entitle a
People, G.R. No. 146964 (2006)], given, one is also private recruitment
2. Contract services, authorized to collect entity to collect fees.
3. Promising, or fees
4. Advertising for employment, locally or
abroad, whether for profit or not.
Private Employment Agency (PEA) v.
Provided, That any person or entity which, in Private Recruitment Entity (PRE) [Art. 13 (c),
any manner, offers or promises for a fee (e)]
employment to two or more persons shall be
Private Private
deemed engaged in recruitment and
placement [Art. 13 (b), Labor Code]. Employment Recruitme
Agency nt Entity
The proviso provides for a presumption that a
person or entity so described engages in Definition Any person Any person
recruitment and placement [People v. Panis, or entity or
G.R. No. 58674 (1988)]. engaged in association
recruitment engaged in
Number of Persons: Not Essential and the
The number of persons dealt with is not an
essential ingredient of the act of recruitment placement of recruitment
and placement of workers. Any of the acts workers for a and
mentioned in Art. 13(b) will constitute fee which is placement
recruitment and placement even if only one charged, of workers,
prospective worker is involved [People v. directly or locally or
Panis, supra]. indirectly, overseas,
from the without
Worker – any member of the labor force,
whether employed or unemployed [Art.13 (a)]. workers or charging,
employers or directly or

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LABOR 1
both indirectly,
any fee
Requirement License Authority
Policy of Close Government Regulation
RA 9422 or the Act to Strengthen the
Regulatory Functions of the Philippine
Overseas Employment Administration of 2007
expressly repealed Sections 29 and 30 of RA
8042, which provided for the deregulation of
recruitment activities.
a. Labor Code
Article 13. Definitions. – (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.
Article 34. Prohibited Practices. – It shall be
unlawful for any individual, entity, licensee, or holder
of authority:
(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;
Article 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.
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(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.
b. R. A. No. 8042, as Amended by R.A.
No. 10022
Recruitment of Local and Migrant
Workers: Policy of Selective Deployment
The State shall allow the deployment of
overseas Filipino workers only in countries
where the rights of Filipino migrant workers are
protected. The government recognizes any of
the following as a guarantee on the part of the
receiving country for the protection of the rights
of overseas Filipino workers:
1. It has existing labor and social laws
protecting the rights of workers,
including migrant workers;
2. It is a signatory to and/or a ratifier of
multilateral conventions, declarations
or resolutions relating to the protection
of workers, including migrant workers;
and
3. It has concluded a bilateral agreement
or arrangement with the government
on the protection of the rights of
overseas Filipino Workers:
Provided, That the receiving country is taking
positive, concrete measures to protect the
rights of migrant workers in furtherance of any
of the guarantees under subparagraphs (a), (b)
and (c) hereof [Sec. 3, RA 8042, as amended].
[...] The Department of Foreign Affairs, through
its foreign posts, shall issue a certification to
the POEA, specifying therein the pertinent
provisions of the receiving country's labor/
social law, or the convention/ declaration/
resolution, or the bilateral agreement/
arrangement which protect the rights of migrant
workers.
LABOR 1
The State shall also allow the deployment of
overseas Filipino workers to vessels navigating
the foreign seas or to installations located
offshore or on high seas, whose
owners/employers are compliant with
international laws and standards that protect
the rights of migrant workers.
The State shall likewise allow the deployment
of overseas Filipino workers to companies and
contractors with international operations:
Provided, That they are compliant with
standards, conditions and requirements, as
embodied in the employment contracts
prescribed by the POEA and in accordance
with internationally-accepted standards [Sec.
3, RA 8042, as amended].
2. Illegal Recruitment and Other
Prohibited Activities
a. Elements
First Main Type: Simple illegal
recruitment
Two Types According to the Kind of
Employer
The following are the types of illegal
recruitment of local workers and the elements
for each type:
1. By a licensee/holder of authority
a. Offender has a valid license or
authority required by law to enable one
to lawfully engage in the recruitment
and placement of workers;
b. Offender undertakes any of the
prohibited acts under Art. 34.
2. By a non-licensee/non-holder of authority
a. Offender has no valid license or
authority required by law to enable one
to lawfully engage in the recruitment
and placement of workers;
b. Offender undertakes either –
1. Any activity within the meaning
of recruitment and placement
under Art. 13(b)
2. Any of the prohibited practices
under Art. 34 [Art. 34 and 38].
Profit Immaterial
Recruitment may be for profit or not. It is the
lack of the necessary license or authority, and
not the fact of payment that renders
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recruitment illegal [Sharp v. Espanol, G.R. No.
155903 (2007)].
Illegal Recruitment of Migrant Workers
“Illegal Recruitment” Defined
Any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring
workers and includes referring, contract
services, promising or advertising for
employment abroad, whether for profit or not,
when undertaken by a non-licensee or non-
holder of authority contemplated under
Art.13(f), P.D. No. 442 or LC [Sec. 5, R.A. No.
10022].
Note: The Migrant Workers’ Act (R.A. No.
8042) expanded the concept of illegal
recruitment found in the LC and provided stiffer
penalties, especially for when it constitutes
economic sabotage [People v. Ocden, G.R.
No. 173198 (2011)].
Two Types According to the Offense
1. Undertakes any recruitment activity defined
in Art. 13(b), LC without a valid
license/authority
a. Note: Can only be committed by one
who has no valid license or authority to
engage in recruitment and placement
2. Commits any of the prohibited acts in Sec. 6,
R.A. No. 8042, as amended by R.A. 10022
a. Note: Immaterial whether an offender
is a holder or a non-holder of a license
or authority
Contract Substitution = Illegal Recruitment
The reduced salaries and employment period
in the new employment contract contradicted
the POEA-approved employment contract. By
this act of contract substitution, respondents
committed a prohibited practice; consequently,
engaged in illegal recruitment [PERT/CPM
Manpower Exponent Co. v. Vinuya, G.R. No.
197528 (2012)].
Possible Liability of Employee
Even the employee of a company engaged in
illegal recruitment can be held liable (along with
the employer) as a principal once it is shown
that he had actively and consciously
participated in the illegal recruitment [People v.
Bayker, G.R. No. 170192 (2016)].
LABOR 1 LABOR LAW
Accused Must Give the Impression of Second Main Type: Illegal Recruitment
Ability to Send Complainant Abroad for as Economic Sabotage
Work
It must be shown that the accused gave Two Types According to Qualifying
complainants the distinct impression that she Circumstance
had the power or ability to send them abroad Illegal recruitment is considered economic
for work such that the latter were convinced to sabotage when attended by the ff. qualifying
part with their money in order to be employed circumstances:
[People v. Ochoa, G.R. No. 173792 (2011)]. 1. By a syndicate - carried out by a group
of 3 or more persons conspiring and
Lack of Receipts Not Fatal confederating with one another;
Mere failure of the complainant to present 2. In large scale - committed against 3 or
written receipts for money paid for acts more persons individually or as a group
constituting recruitment activities is not fatal to [Art. 38(b), LC; Sec. 6 of R.A. No. 8042
the prosecution, provided payment can be as amended].
proved by clear and convincing testimonies of
credible witnesses [People v. Alvarez, G.R. 3+ Complainants Must Be in a Single Case
142981 (2002)]. “Committed against 3 or more persons
individually or as a group” must be understood
Comparison of Local and Migrant as referring to the number of complainants in
each case; otherwise, prosecutions for single
Non-
Licensee/ crimes of illegal recruitment can be cumulated
Licensee/ to make it in large scale [People v. Reyes, G.R.
Local Holder of
Non-Holder No. 105204 (1995)].
Authority
of Authority
Number of victims must be alleged
Recruitment Allowed Not allowed The information for illegal recruitment done in
and [Art. 13(b); large scale must allege the number of victims
placement Art. 38] [People v. Fernandez, 725 SCRA 152 (2014)].

Recruitment Not allowed [Art. 34; 38] 1. For Local Workers (Elements)
and
By a Syndicate
placement 1. Offender undertakes either:
a. Any activity within the meaning
of “recruitment and placement”
Non- defined under Art. 13(b)
Licensee/
Licensee/ b. Any of the prohibited practices
Migrant Holder of
Non-Holder under Art. 34
Authority 2. Offender has no valid license or
of Authority
authority required by law to enable one
Allowed Not allowed to lawfully engage in recruitment and
Recruitment placement of workers
[Sec. 6, R.A.
and 3. Illegal recruitment is committed by a
No. 8042, as
placement group of 3 or more persons conspiring
amended] or confederating with one another
[People v. Gallo, G.R. No. 187730
Prohibited Not allowed [Sec. 6, R.A. No. (2010)]
practices 8042, as amended]

Not allowed [7 acts under

Prohibited
Sec. 6, R.A. No. 8042 as
acts
amended by R.A. No. 10022]

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LABOR 1 LABOR LAW
In Large Scale
Simple Illegal Recruitment
1. Offender undertakes either:
a. Any activity within the meaning
of “recruitment and placement” 1. Licensed or 1. Licensee/Holder of
defined under Art. 13(b) Authorized authority
b. Any of the prohibited practices
2. Undertakes
under Art. 34
2. Offender has not complied with the prohibited practices
guidelines issued by the SOLE, under Art. 34, LC
particularly with respect to the securing (Local) or Sec. 6 of R.A.
of license or an authority to recruit and No. 8042 as amended
deploy workers, either locally or (Migrant).
overseas
3. Offender commits the unlawful acts 2.Unlicensed or 1. Non-licensee/ -
against 3 or more persons individually Unauthorized holder of authority
or as a group [Art. 38 (b)]
2. Undertakes either:
2. For Migrant Workers (Elements) a. Recruitment
and placement
By a Syndicate under Art. 13(b)
1. Offender does not have the valid b. Prohibited
license or authority required by law to practices/activities
engage in recruitment and placement under Art. 34, LC
of workers (Local) or Sec. 6,
2. Offender undertakes either: R.A. No. 8042
a. Any of the “recruitment and (Migrant)
placement” activities defined in
Art. 13(b) Economic Sabotage
b. Any of the prohibited practices
under Sec. 6 of R.A. No. 8042 3. In A Large 1. Undertakes either:
3. Illegal recruitment is carried out by a Scale a. Recruitment
group of 3 or more persons conspiring and placement
and/or confederating with one another under Art. 13(b)
in carrying out any unlawful or illegal b. Prohibited
transaction, enterprise or scheme practices/activities
[People v. Sison, G.R. No. 187160 under Art. 34
(2017)]. (Local) or Sec. 6 of
R.A. No. 8042
In Large Scale (Migrant)
1. Offender undertook any recruitment 2. No valid license or an
activity as defined under Sec. 6 of R.A.
authority to recruit and
No. 8042;
2. Offender did not have the license or the deploy workers, either
authority to lawfully engage in the locally or overseas
recruitment of workers; 3. Committed against 3
3. Offender committed the same against or more persons
3 or more persons individually or as a individually or as a
group [People v. Delos Reyes, G.R. group
No. 198795 (2017)].
4. By a Syndicate 1. Undertakes either:
b. Types of Illegal Recruitment
a. Any activity
within the meaning
Summary of Types and Elements
of "recruitment
There are at least 4 kinds of illegal recruitment
and placement"
[People v. Sadiosa, G.R. No. 107084 (1998)].
under Art. 13(b)
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LABOR 1
b. Any of the
prohibited
practices
enumerated under
Art. 34 (Local) or
Sec. 6 of R.A. No.
8042 (Migrant)
2. No valid license or
authority to recruit and
deploy workers, either
locally or overseas
3. Committed by a
group of 3 or more
persons conspiring and
confederating with one
another
c. Illegal Recruitment as Distinguished
from Estafa
Conviction for Illegal Recruitment Not a
Bar to Conviction for Estafa and Vice
Versa
A person who commits illegal recruitment may
be charged and convicted separately of illegal
recruitment under the LC and estafa under Art.
315(2a), RPC. The offense of illegal
recruitment is malum prohibitum where the
criminal intent of the accused is not necessary
for conviction, while estafa is malum in se
where the criminal intent of the accused is
crucial for conviction. Conviction for offenses
under the LC does not bar conviction for
offenses punishable by other laws. Conversely,
conviction for estafa does not bar a conviction
for illegal recruitment. One's acquittal of the
crime of estafa will not necessarily result in his
acquittal of the crime of illegal recruitment in
large scale, and vice versa [People v. Ochoa,
G.R. No. 173792 (2011); People v. Ocden,
G.R. No. 173198 (2011)].
As such, the filing of criminal cases for both
does not constitute double jeopardy. In illegal
recruitment, profit is immaterial; on the other
hand, a conviction for estafa requires a clear
showing that the offended party parted with his
money or property upon the offender’s false
pretenses, and suffered damage thereby. The
two are then completely different and distinct
crimes [People v. Melissa Chua, G.R. No.
187052 (2012)].
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3. Liability of Local Recruitment
Agency and Foreign Employer
a. Solidary Liability
Foreign Employer
Foreign employers shall assume joint and
solidary liability with the recruitment/ placement
agency for all claims arising out of an
employer-employee relationship or by virtue of
any law or contract involving Filipino workers
for overseas deployment including claims for
damages [Sec. 10 of RA 8042, as amended].
Solidary Liability of Agent & Principal
Coverage
The liability of the principal/employer and the
recruitment/placement agency for the claims
involving Filipino workers for overseas
deployment including claims for damages is
joint and several.
Incorporation Into the Contract
This shall be incorporated in the contract for
overseas employment and shall be a condition
precedent for its approval.
Performance Bond
The performance bond filed by the
recruitment/placement agency shall be
answerable for all money claims or damages
awarded to workers.
Corporate Officers and Directors and
Partners Solidarily Liable
If the recruitment/placement agency is a
juridical being, the corporate officers and
directors and partners as the case may be,
shall be joint and severally liable with the
corporation or partnership for the claims and
damages [Sec. 10, RA 8042 as amended].
Purpose of Solidary Liability
The termination of agreement between the
manning agency and its principal does not
relieve the former of its liability. The agency
agreement extends until the expiration of the
employment contracts of the employees
recruited and employed. Otherwise, this
renders nugatory the purpose of the law which
is to assure aggrieved workers of immediate
and sufficient payment of what is due them.
LABOR 1 LABOR LAW
Requisite Undertaking for Application of If the offender is a corporation, partnership,
License association or entity, the penalty shall be
The written application for a license to operate imposed upon the officer or officers
a private employment agency shall be responsible for the violation.
submitted with, among others, a duly notarized
undertaking that the applicant: In every case, conviction carries with it:
1. Shall assume full and complete 1. Automatic revocation of
responsibility for all claims and license/authority and all permits and
liabilities which may arise in connection privileges granted under this Title
with the use of the license; 2. Forfeiture of cash and surety bonds in
2. Assume joint and several liability with favor of POEA or the Regional
the employer for all claims and Department with jurisdiction over the
liabilities which may arise in connection place where the agency or branch
with the implementation of the contract, office is located
including but not limited to unpaid 3. For aliens, in addition to the penalties
wages, death, disability compensation herein prescribed, deportation without
and repatriation; further proceedings [Art. 39 (3)]
3. Assume full and complete
responsibility for all acts of its officers, Illegal Recruitment of Migrant Workers
employees and representatives done [Sec. 7, RA 8042 as amended]
in connection with recruitment and
placement [Part II, Rule II, Sec. 4 (f) (7- Act Penalty
9), 2016 Revised POEA Rules and
Regulations]. Prohibited Acts 6 years and 1 day - 12
years imprisonment
For corporations or partnerships, a duly and P500K-P1M fine
notarized undertaking by the corporate officers
and directors, or partners, that they shall be Illegal Recruitment 12 years and 1 day -
joint and severally liable with the corporation or 20 years imprisonment
partnership for claims and/or damages and P1M-P2M fine
awarded to workers is also required [Part II,
Rule II, Sec. 4 (g), 2016 Revised POEA Rules Illegal recruitment Life imprisonment and
and Regulations].
constituting P2M-P5M fine
Illegal Recruitment of Local Workers economic
sabotage Max penalty:
Act Penalty
1. Illegally recruited
person is below 18
License/authority
2-5 years years old, or
holder violating or
imprisonment or 2. Offense is
causing another to
P10K-P50K fine or committed without
violate Title 1, Book
both (Art. 34) license/ authority
1

Non- In every case, conviction carries with it:

license/authority 4-8 years 1. Automatic revocation of license or
holder violating or imprisonment or registration of the recruitment/manning
causing another to P20K-P100K fine or agency, lending institutions, training
school or medical clinic
violate Title 1, Book both (Art. 38)
2. For aliens, in addition to the penalties
1 herein prescribed, deportation without
further proceedings
Illegal recruitment Life imprisonment
constituting and P100K fine (Art.
economic sabotage 38)

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LABOR 1
Employees of a company or corporation
engaged in illegal recruitment may be held
liable as principal, together with his employer if
it is shown that he actively and consciously
participated in illegal recruitment [People v.
Sagayaga, G.R. 143726 (2004)].
Two Jurisdiction Rule
A criminal action arising from illegal recruitment
of migrant workers shall be filed with the RTC
of the province or city:
1. Where offense was committed, or
2. Where the offended party actually
resides at the time of the commission
of the offense [Sec. 9, RA 8042].
Provided, the court where such action is first
filed acquires jurisdiction to the exclusion of
other courts [Sec. 6, Rule IV, Omnibus Rules
implementing RA 8042, as amended].
Prescription
Prescriptive
Crime Classification
Period
Local Simple/economic 3 years [Art.
workers sabotage 305 LC]
Migrant Simple 5 years [Sec.
workers 12, RA 8042]
Economic 20 years
Sabotage [Sec. 12, RA
8042]
b. Theory of Imputed Knowledge
Definition: This is a doctrine in agency stating
that the principal is chargeable with and bound
by the knowledge of or notice to his agent
received while the agent was acting as such.
Notice to the agent is notice to the principal.
A local employment agency is considered the
agent of the foreign employer, the principal.
Knowledge of the former of existing labor and
social legislation in the Philippines in binding
on the latter. Notice to the former of any
violation thereof is notice to the latter.
But, notice to the principal is NOT notice to the
agent. Notice to the foreign employer,
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therefore, is not notice to the local employment
agency.
4. Entities Prohibited from Recruiting
Entities Disqualified from Engaging in the
Business of Recruitment and Placement
of Workers for Local Employment
1. Travel agencies and sales agencies of
airline companies, whether for profit or
not [Art. 26];
2. Those who are convicted of illegal
recruitment, trafficking in persons, anti-
child labor violation, or crimes involving
moral turpitude;
3. Those against whom probable cause
or prima facie finding of guilt for illegal
recruitment or other related cases exist
particularly to owners or directors of
agencies who have committed illegal
recruitment or other related cases;
4. Those agencies whose licenses have
been previously revoked or cancelled
by the Department under Sec. 54 of
these rules;
5. Cooperatives whether registered or not
under the Cooperative Act of the
Philippines;
6. Law enforcers and any official and
employee of the Department of Labor
and Employment (DOLE);
7. Sole proprietors of duly licensed
agencies are prohibited from securing
another license to engage in
recruitment and placement;
8. Sole proprietors, partnerships or
corporations licensed to engage in
private recruitment and placement for
local employment are prohibited from
engaging in job contracting or
subcontracting activities [Sec. 5, DO
141-14, Revised Rules and
Regulations Governing Recruitment
and Placement for Local Employment].
Entities Disqualified from Engaging or
Participating in the Business of
Recruitment and Placement of Workers
for Overseas Employment
1. Travel agencies and sales agencies of
airline companies, whether for profit or
not [Art. 26];
2. Officers or members of the Board of
any corporation or partners in a
LABOR 1
partnership engaged in the business of
a travel agency;
3. Corporations and partnerships, where
any of its officers, members of the
board or partners is also an officer,
member of the board or partner of a
corporation or partnership engaged in
the business of a travel agency;
4. Individuals, partners, officers, or
directors of an insurance company who
make, propose or provide an insurance
contract under the compulsory
insurance coverage for agency-hired
OFWs;
5. Sole proprietors, partners or officers
and members of the board with
derogatory records, such as, but not
limited to the ff:
a. Those convicted or against
whom probable cause or prima
facie finding of guilt is
determined by a competent
authority for illegal recruitment
or for other related crimes or
offenses committed in the
course of, related to, or
resulting from, illegal
recruitment, or for crimes
involving moral turpitude;
b. Those agencies whose
licenses have been revoked for
violation of RA 8042, PD 442,
RA 9208, and their IRRs;
c. Those agencies whose
licenses have been cancelled,
or those who, pursuant to the
order of the Administrator,
were included in the list of
persons with derogatory record
for violation of recruitment laws
and regulations;
6. Any official employee of the DOLE,
POEA, OWWA, DFA, DOJ, DOH, BI,
IC, NLRC, TESDA, CFO, NBI, PNP,
Civil Aviation Authority of the
Philippines, international airport
authorities, and other government
agencies directly involved in the
implementation of RA 8042, as
amended, and/or any of his/her
relatives within the fourth civil degree of
consanguinity or affinity [Part II, Rule I,
Sec. 3, 2016 Revised POEA Rules and
Regulations].
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5. Cancellation of License or Authority
The Secretary of Labor shall have the power to
suspend or cancel any license or authority to
recruit employees for overseas employment
for:
a. violation of rules and regulations
issued by the Department of Labor, the
Overseas Employment Development
Board, and the National Seamen
Board;
b. violation of the provisions of this and
other applicable laws, General Orders
and Letters of Instructions [Art. 35].
Acts prohibited under Art. 34 are grounds for
suspension or cancellation of license. Note that
these acts likewise constitute illegal
recruitment under RA 8042 as amended by RA
10022.
Who can suspend or cancel the license?
1. DOLE Secretary
2. POEA Administrator
The power to suspend or cancel any license or
authority to recruit employees for overseas
employment is concurrently vested with the
POEA and the Secretary of Labor [People v.
Diaz, G.R. 112175 (1996)].
6. Termination of Contract of Migrant
Worker Without Just or Valid Cause
In case of –
a. Termination of overseas employment
without just, valid, or authorized cause
as defined by law or contract, or
b. Any unauthorized deductions from the
migrant worker’s salary
The worker shall be entitled to full
reimbursement of:
a. His placement fee and the deductions
made with interest at twelve percent
(12%) per annum; AND
b. His salaries for the unexpired portion of
his employment contract
(*or for three (3) months for every year of the
unexpired term, whichever is less) [Sec. 10, RA
8042, as amended by RA 10022]
LABOR 1 LABOR LAW
Rule on 3-Month Salary Cap Clause circumstances have so changed as to warrant
a reverse conclusion.” Hence, the case of
Rule Before
Rule After Serrano: Serrano holds as binding precedent, even after
Serrano (1995- the passage of RA 10022.
Invalidated the 3-
2009): 3-Month
Month Salary Cap
Salary Rule 7. Ban on Direct Hiring
Clause
Applied
a. General Rule
The employment The SC there held
contract involved in that “said clause is No employer may hire a Filipino worker for
the instant case unconstitutional for overseas employment except through the
covers a two-year being an invalid Boards and entities authorized by the
period but the classification, in Secretary of Labor [Art. 18].
overseas contract violation of the equal
No employer shall directly hire an Overseas
worker actually protection clause.” Filipino Worker for overseas employment [Sec.
worked for only 26 123, 2016 Revised POEA Rules and
days prior to his Thus, the present Regulations].
illegal dismissal. rule is that OFWs
Thus, the three whose contracts are b. Exceptions
months’ salary rule terminated without 1. Members of the diplomatic corps;
2. International organizations;
applies [Flourish just cause are
3. Heads of state and government
Maritime Shipping v. entitled to all the officials with the rank of at least deputy
Almanzor, G.R. No. salaries for the entire minister;
177948 (2008)] unexpired portion of 4. Other employers as may be allowed by
their employment the Secretary of Labor and
contract, irrespective Employment, such as:
of the stipulated term a. Those provided in (a), (b) and
(c) who bear a lesser rank, if
or duration thereof.
endorsed by the Philippine
Overseas Labor Office
In the case of Yap v. Thenamaris Ship’s (POLO), or Head of Mission in
Management and Intermare Maritime the absence of the POLO;
Agencies, Inc [G.R. No. 179532 (2011)], the 5. Professionals and skilled workers with
SC affirmed the Serrano ruling, but did not duly executed/authenticated contracts
apply the Operative Fact doctrine: “As an containing terms and conditions over
exception to the general rule, the doctrine and above the standards set by the
applies only as a matter of equity and fair play.” POEA. The number of professional and
skilled Overseas Filipino Workers hired
Note: In 2010, a year after Serrano, RA 10022, for the first time by the employer shall
in amending RA 8042, reincorporated the not exceed five (5). For the purpose of
nullified 3-month salary cap clause. However, determining the number, workers hired
the SC did not allow this and again struck the as a group shall be counted as one; OR
revived clause as unconstitutional in the 2014 6. Workers hired by a relative/family
case of Sameer Overseas Placement Agency member who is a permanent resident
v. Cabiles [G.R. No. 170139 (2014)]. of the host country [Sec. 124, 2016
Revised POEA Rules and
There, the SC said that: “when a law or a Regulations].
provision of law is null because it is inconsistent
with the Constitution, the nullity cannot be
cured by a reincorporation or reenactment of
the same or a similar law or provision. A law or
provision of law that was already declared
unconstitutional remains as such unless
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LABOR 1
B. Employment of Non-Resident
Aliens
1. Coverage
Who Should Apply For an Alien
Employment Permit
a. Any alien seeking admission to the
Philippines for employment purposes,
and
b. Any domestic or foreign employer who
desires to engage an alien for
employment in the Philippines [Art. 40,
Labor Code].
Art. 40 of the Labor Code which requires
employment permits refers to non-resident
aliens. Resident aliens do not fall within the
ambit of the provision [Almodiel v. NLRC, 223
SCRA 341 (1993)].
An alien cannot file a labor complaint without
having obtained an employment permit
[Andrew James McBurnie v. Eulalio Ganzon,
707 SCRA 646 (2013)].
Who are Exempted from Securing an
Alien Employment Permit [DOISIPRRL]
a. All members of the Diplomatic service
and foreign government Officials
accredited by and with reciprocity
arrangement with the Philippine
government;
b. Officers and staff of International
organizations of which the Philippine
government is a member, and their
legitimate Spouses desiring to work in
the Philippines;
c. Owners and representatives of foreign
principals whose companies are
accredited by the POEA, who come to
the Philippines for a limited period and
solely for the purpose of Interviewing
Filipino applicants for employment
abroad;
d. Foreign national who comes to the
Philippines to teach, present and/or
conduct research studies in
universities and colleges as visiting,
exchange or adjunct Professors under
formal agreements between the
universities or colleges in the
Philippines and foreign universities or
colleges; or between the Philippine
government and foreign government:
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provided that the exemption is on a
reciprocal basis;
e. Permanent Resident foreign nationals,
probationary or temporary resident visa
holders;
f. Refugees and stateless persons
recognized by DOJ; and
g. All foreign nationals granted exemption
by Law [Sec. 2, D.O. No. 186-17].
Who are Excluded from Securing an Alien
Employment Permit [BPTCICR]
a. Members of the governing Board with
voting rights only and do not intervene
in the management of the corporation
or in the day to day operation of the
enterprise.
b. President and Treasurer, who are part-
owner of the company.
c. Those providing Consultancy services
who do not have employers in the
Philippines.
d. Intra corporate transferee who is a
Manager, Executive or Specialist.
e. Contractual service supplier who is a
Manager, Executive, or Specialist.
f. Representative of the Foreign
Principal/Employer assigned in the
Office of Licensed Manning Agency
(OLMA) in accordance with the POEA
law, rules and regulations [Section 3,
D.O. No. 186-17].
INTRACORPORATE TRANSFEREE:
REQUISITES FOR EXCLUSION
1. Must be an Executive, Manager, or
Specialist
Executive: primarily directs the
management of the organization and
exercises wide latitude in decision
making and receives only general
supervision or direction from higher
level executives, the board of directors,
or stockholders of the business; an
executive would not directly perform
tasks related to the actual provision of
the service or services of the
organization.
Manager: a natural person within the
organization who primarily directs the
organization/department/ subdivision
and exercises supervisory and control
functions over other supervisory,
managerial or professional staff; does
not include first line supervisors unless
LABOR 1
employees supervised are
professionals; does not include
employees who primarily perform tasks
necessary for the provision of the
service.
Specialist: a natural person within the
organization who possesses
knowledge at an advanced level of
expertise essential to the
establishment/provision of the service
and/or possesses proprietary
knowledge of the organization’s
service, research equipment,
techniques or management; may
include, but is not limited to, members
of a licensed profession.
2. At least 1 Year of Continuous
Employment [Section 3, D.O. No. 186-17]
Contractual Service Supplier: Requisites
for exclusion
a. Must be an Executive, Manager, or
Specialist
b. Enters the Philippines temporarily to
supply a service pursuant to a contract
between his/her employer and a
service consumer in the Philippines
c. Must possess the appropriate
educational and professional
qualifications; and
d. Employed for at least 1 year prior
[Section 3, D.O. No. 186-17]
Certificate of Exclusion
All foreign nationals excluded from securing
AEP shall secure Certificate of Exclusion from
the Regional Office. Further, Regional Offices
shall issue the Certificate of Exclusion within
two (2) working days after receipt of complete
documentary requirements and fees [Section
4, D.O. No. 186-17].
2. Conditions for Grant of Permit
Non-availability of Competent, Able, and
Willing persons [CAW]
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.
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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 [Art
40, Labor Code].
Where to File Applications
All applications for AEP shall be filed and
processed at the DOLE Regional Office or
Field Office having jurisdiction over the
intended place of work [Sec. 5(a), D.O. No.
186-17].
When to File Applications
Newly hired/appointed officers may file the
application for new AEP without penalty:
a. General Rule: within 15 working days
after signing of contract/appointment
b. If commencement of employment is
later than the 15 working day grace
period: before the commencement of
employment [Sec. 17, D.O. No. 186-
17]
What Documents Should be Submitted
a. Application form;
b. Photocopy of passport with visa, or
Cert of Recognition for Refugees or
Stateless Persons;
c. Original copy of notarized appointment
or contract of employment enumerating
the duties and responsibilities, annual
salary, and other benefits of the foreign
national;
d. Photocopy of Mayor’s Permit to
operate business, in case of locators in
economic zones, certification from the
PEZA or the Ecozone Authority that the
company is located and operating
within the ecozone, while in case of a
construction company, photocopy of
license from PCAB or D.O. No. 174-17
Registration should be submitted in lieu
of Mayor’s Permit; and
e. Business Name Registration and
Application Form with the Department
of Trade and Industry (DTI) or SEC
Registration and GIS;
f. If the position title of the foreign
national is included in the list of
regulated professions, a Special
Temporary Permit (STP) from the
Professional Regulations Commission
(PRC); and
LABOR 1
g. If the employer is covered by the Anti-
Dummy Law, an Authority to Employ
Foreign National (ATEFN) from the
DOJ or from the DENR in case of
mining [Section 5a, D.O. No. 186-17].
In Case of Additional Position of Change
in Position
Additional position of the foreign national in the
same company or subsequent assignment in
related companies during the validity or
renewal of the AEP will be subject for
publication requirement. A change of position
or employer shall require an application for new
AEP [Section 5(c), D.O. No. 186-17].
Only One AEP at a Time
At any given time only one AEP shall be issued
to a foreign national. A foreign national may be
issued one AEP only at any given time [Sec.
5d, D.O. No. 186-17].
Fees
a. Upon filing:
1. One year validity: P9000
2. More than 1 year: plus P4000
per year
3. Renewal: P4000 per year
b. Courier fee: P200
c. Loss/change of info, AEP replacement:
P1500
d. Certificate of exclusion: P500 [Sec. 6,
D.O. No. 186-17]
Labor Market Test [Sec. 7, D.O. No. 186-17]
AEP application (new/change in or additional
position/subsequent assignment) should be
published by the DOLE Regional Office in:
a. Newspaper of general circulation within
2 working days from receipt of
application
b. DOLE Website (30 days)
c. PESO (30 days)
Contents of the Publication:
a. Name,
b. Position,
c. Employer and address,
d. A brief description of the functions to be
performed by the foreign national,
e. Qualifications,
f. Monthly salary range and other
benefits, if there are any,
g. Indicate that any person in the
Philippines who is competent, able and
willing at the time of the application to
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perform the services for which the
foreign national is desired may file an
objection at the DOLE Regional Office.
Where to File Objection
Regional Office within 30 days after
Publication.
Other Information that DOLE May Refer
To
a. Philjobnet and PESO Information
System (PEIS), the PRC Registry of
professionals, and the TESDA registry
of certified workers to establish
availability or non-availability of able
and qualified Filipino workers.
b. Information or criminal offense and
grave misconduct in dealing with or ill
treatment of workers filed with the
Regional Offices any time.
Processing and Issuance
AEP shall be issued:
a. Within three working days after
publication and payment of fees: new
AEP
b. One day after receipt: renewal of AEP
[Sec. 8, D.O. No. 186-17]
Verification Inspection
The authorized representatives of the Regional
Director may conduct inspection to verify
legitimacy of employment of the foreign
national as deemed necessary, based on the
documents submitted within two working days
upon payment of fees [Sec. 9, D.O. No. 186-
17].
3. Validity of AEP and Renewal
Duration of Validity
The AEP shall be valid for the position and the
company for which it was issued for.
General Rule: 1 year
Exception: Period not exceeding 3 years; if the
employment contract/mode of engagement
provides otherwise [Sec. 10, D.O. No. 186-17].
When to Apply for Renewal
General Rule: Not earlier than 60 days before
expiration.
LABOR 1
Exceptions:
a. Alien needs to leave the country;
b. Other similar circumstances that will
hinder the filling of renewal within this
prescribed period.
In case of officers to be appointed/elected
a. Before AEP expiration: not later than
15 working days after appointment, or
before its expiration, whichever comes
later
b. After AEP expiration: before the
expiration of the AEP, renewed for 1
year
c. Within 15 working days after the date
of appointment or election, the foreign
national shall submit to the issuing
Regional Office the Board Secretary’s
Certification
1. The Regional Director shall revoke
the AEP after 1 month from its
issuance, if no Certification is filed
[Sec. 11, D.O. No. 186-17].
Expired AEP
Expired AEP shall be processed as a new
application subject to the payment of required
fees and penalties in relation to Section 17
(Penalty for Working without AEP) [Sec. 11,
D.O. No. 186-17].
4. Denial of Application
Grounds for Denial [Mi-Fa-Co-Mi-CAW-
Wo-Ex]:
a. Misrepresentation of facts in the
application including fraudulent
misrepresentation
1. i.e. false statement that has a
negative effect in the evaluation of
the application made knowingly, or
without belief in its truth, or
recklessly whether it is true or false;
b. Submission of Falsified documents;
c. Conviction to a criminal offense or a
fugitive from justice in the country or
abroad;
d. Grave Misconduct in dealing with or ill
treatment of workers;
e. Availability of a Filipino who is
Competent, Able and Willing to do the
job;
f. Worked without valid AEP for more
than a year;
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g. Application for renewal with Expired
visa or with temporary visitor’s visa
[Sec. 112, D.O. No. 186-17].
Effect of Denial
Denial of application for AEP shall cause the
forfeiture of the fees paid by the applicant [Sec.
12, D.O. No. 186-17].
5. Revocation; Cancellation
Grounds for Cancellation [Non-Mi-Fa-Me-
Con-Te-Mi]
a. Non-compliance with any of the
requirements or conditions for which
the AEP was issued;
b. Misrepresentation of facts in the
application including fraudulent
misrepresentation;
c. Submission of Falsified or tampered
documents;
d. Meritorious objection or information
against the employment of the foreign
national;
e. Foreign national has been Convicted
of a criminal offense or a fugitive from
justice;
f. Employer Terminated the employment
of foreign national;
g. Grave Misconduct in dealing with or ill
treatment of workers [Sec. 13, D.O. No.
186-17].
Effect of Denial/Revocation or
Cancellation
Disqualified to re-apply for 10 years in case the
ground for denial or cancellation is:
a. Conviction of criminal offense or
fugitive from justice in the country or
abroad; or
b. Grave misconduct in dealing with or ill
treatment of workers [Sec. 14, D.O. No.
186-17].
Effect of Fraudulent Application
Employers, employer’s or foreign national’s
representatives, and/or agents acting on behalf
of the applicant found to have filed fraudulent
application for AEP for three (3) counts shall be
barred from filing application for a period of five
(5) years after due process [Sec. 15, D.O. No.
186-17].
LABOR 1 LABOR LAW
6. Appeal

When and Where to File

With the Secretary of the DOLE within 10 days
after receipt of denial/cancellation/revocation
order.

The decision of the DOLE Secretary shall be

final and executory unless a motion for
reconsideration is filled within 10 days after
receipt of the decision. No second motion for
reconsideration shall be allowed [Sec. 16, D.O.
No. 186-17].

7. Penalty

Fines
Working without valid AEP: P10,000 for
every year or fraction thereof.

Employing aliens without valid AEP:

P10,000 for every year or fraction thereof.

Failure to pay penalty: not allowed to employ

foreign national for any position [Sec. 17, D.O.
No. 186-17].

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LABOR 1
III. LABOR STANDARDS
Labor standards refers to the minimum
requirements prescribed by existing laws, rules
and regulations relating to wages, hours of
work, cost-of-living allowance and other
monetary and welfare benefits, including
occupational, safety and health standards
[Maternity Children’s Hospital v. Secretary of
Labor, G.R. 78909 (1989)].
A. General Provisions
1. Employer-Employee Relationship
Employer
Any person acting directly or indirectly in the
interest of an employer in relation to an
employee [Art. 97(b); Art. 219(f)]
Any person, natural or juridical, employing the
services of the employee [Art. 173(f)]
Includes:
a. The government;
b. All its branches, subdivisions and
instrumentalities;
c. All government-owned or controlled
corporations and institutions;
d. All nonprofit private institutions, or
organizations [Art. 97(b)].
Does not include any labor organization or any
of its officers or agents except when acting as
employer [Art. 219(f)]
Employee
Any individual employed by an employer [Art.
97(c); Art. 219(g)]
Any person compulsorily covered by the GSIS
under C.A. No. 168, as amended [Art. 173(g)]
Includes:
a. The members of the AFP
b. Any person employed as casual,
emergency, temporary, substitute or
contractual
c. Any person compulsorily covered by
the SSS under R.A. No. 1161, as
amended [Art. 173(g)]
d. Any individual whose work has ceased
as a result of or in connection with any
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current labor dispute or because of any
unfair labor practice if he has not
obtained any other substantially
equivalent and regular employment
[Art. 219(g)]
e. The term shall not be limited to the
employees of a particular employer,
unless the Code so explicitly states
[Art. 219(g)]
Person
An individual, partnership, association,
corporation, business trust, legal
representatives, or any organized group of
persons [Art. 97(a); Art. 173(h)]
Both a Question of Law and of Fact
The existence or absence of EER is a question
of law and of fact, each in its defined sense.
Ultimately, it is a question of fact because
whether one exists or not is dependent upon
the facts of each case [SSS v. CA and Ayalde,
G.R. No. 100388 (2000)]. However, it is a
question of law because it cannot be made the
subject of agreement [Tabas et.al. v. California
Manufacturing Co., et. al., G.R. No. 80680
(1989)]. Hence, the characterization of the law
prevails over that in the contract.
2. Test to Determine the Existence of
an Employer-Employee Relationship
a. Four-Fold Test
Elements of an EER
1. Selection and engagement of the
employee;
2. Payment of wages;
3. Power of dismissal; and
4. Employer’s power to control the
employee’s conduct with respect to the
means and methods by which the work
is to be accomplished [Brotherhood
Labor Unity Movement of the PH v.
Zamora, G.R. No. 48645 (1987)].
Payment of Wages
The following are not conclusive of the
absence of an EER:
1. That a worker was not reported as an
employee to SSS;
2. That a worker’s name does not appear
in the payrolls and pay envelope
records submitted by the employer.
LABOR 1
Note: For a payroll to be utilized to disprove the
EER, it must contain a true and complete list of
employees [Southeast East International
Rattan v Coming, G.R. No. 186621 (2014)].
Power to Control
This is the most important element when
determining the existence of an EER. It
pertains not only to results, but also to the
means and methods to attain those results
[Lirio v. Genovia, G.R. No. 169757 (2011)].
The “existence” of the right to control is
sufficient for the element to be present. There
need not be “actual exercise” of the right
[Zanotte Shoes v. NLRC, G.R. No. 100665
(1995)].
Not every form of control will create an EER.
No EER exists when control is in the form of
rules that merely serve as guidelines towards
the achievement of results without dictating the
means or methods to attain them. EER exists
when control is in the form of rules that fix the
methodology to attain a specified result and
bind the worker to use such [Insular Life
Assurance Co, LTD v. NLRC, G.R. No. 84484
(1989)].
b. Economic Dependence Test
Two-Tiered Approach
1. Control Test (refer to the Four-Fold
Test)
2. Underlying economic realities within
the activity or relationship [Sevilla v.
CA, G.R. Nos. L-41182-3 (1988)]
Underlying Economic Realities
In determining the existence of an EER, these
realities must be examined, taking into
consideration the totality of circumstances
surrounding the true nature of the parties’
relationship. The benchmark “reality” for the
existence of an EER is economic dependence
of the worker on his employer. “Economic
dependence” is whether the worker is
dependent on the employer for his continued
employment [Orozco v. CA, G.R. No. 155207
(2008)].
Competent and Relevant Evidence
Needed to Prove EER
No particular form of evidence is required to
prove the EER. Any competent and relevant
evidence to prove the relationship may be
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admitted. For, if only documentary evidence
would be required to show that relationship, no
scheming employer would ever be brought
before the bar of justice, as no employer would
wish to come out with any trace of the illegality
he has authored considering that it should take
much weightier proof to invalidate a written
instrument [Tenazas, et al., v. R. Villegas Taxi
Transport, G.R. No. 192998 (2014)].
Burden of Proof on Alleged Employee
The onus probandi rests on the employer to
prove that its dismissal was for a valid cause.
However, before a case for illegal dismissal
can prosper, an EER must first be established.
It is incumbent upon the employee to prove the
EER by substantial evidence [Javier v. Fly Ace
Corporation, G.R. No. 192558 (2012)].
Doctrine of Piercing the Corporate Veil
When this doctrine is applied, an employee can
be said to have an EER with the corporation
that another corporation (who the employee
“works” for) is merely an alter ego of. It applies
in these 3 basic scenarios:
1. Defeat of public convenience as when
corporate fiction is used as a vehicle to
evade existing obligations;
2. Fraud cases as when the corporate
entity is used to justify a wrong, protect
fraud, or defend a crime;
3. Alter ego cases, where a corporation is
a farce, as it is a mere alter ego or
business conduit of a person, or where
the corporation is so organized and
controlled and its affairs are so
conducted as to make it merely an
instrumentality, agency, conduit or
adjunct of another corporation
[Maricalum Mining Corp. v. Florentino,
G.R. No. 221813 (2018)].
Note: The corporate character is not fully
abrogated. It continues for other legitimate
objectives. However, in certain circumstances,
it may be pierced in order to promote
substantial justice. Such fiction of law cannot
be invoked to further ends subversive of justice
[Pamplona Plantation Co v. Tinghil, G.R. No.
159121 (2005)].
Doctrine Illustrated in Jurisprudence
In Sarona v. NLRC [G.R. No. 185280 (2012)],
the doctrine was applied. It involved the illegal
dismissal of Sarona, a security guard who first
worked at Sceptre but was subsequently
LABOR 1
assigned to Royale, where he was illegally
dismissed. In the computation of his separation
pay, Sarona prayed that the corporate veil of
Royale be pierced as it was a mere
continuation of Sceptre; hence, his separation
pay should be computed from the time he was
hired by Sceptre. This was granted.
Circumstances indicated that Spectre and
Royale were one and the same (same office,
same officers, same person exercising control
and supervision over employees of both
companies), and that Sarona’s transfer to
Royale was done in bad faith. As such, Sarona
could be said to have an EER with Sceptre.
Thus, his separation pay was to be computed
from the time he was hired by Sceptre.
3. Employee Distinguished from an
Independent Contractor
Distinguished From Independent
Contractors
No EER exists between independent
contractors and their principals; their contracts
are governed by the law on contracts and other
applicable law. Employees under fixed-term
contracts cannot be independent contractors
because in fixed-term contracts, an EER exists
[Fuji Television Network, Inc. v. Espiritu, G.R.
No. 204944-45 (2014)].
B. Conditions of Employment
1. Covered Employees/Workers
Employees Exempted or Not Covered
General Rule: Title I: Working Conditions and
Rest Periods shall apply to employees in all
establishments and undertakings whether for
profit or not [Art. 82].
Note: Article 82 applies to the whole of Title I.
This includes Service Incentive Leaves, which
will be discussed in a separate section.
Exceptions (i.e. those NOT covered by Title I):
a. Government employees [Art. 82; Art.
76] (exception to the exception:
Employees of GOCCs created under
the Corporation Code)
b. Managerial Employees [Art. 82]
c. Members of the managerial staff [Art.
82]
d. Field Personnel [Art. 82]
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e. Members of the family of the employer
who are dependent on him for support
[Art. 82];
f. Domestic workers or kasambahay [Art.
141, RA 10361] (exception to the
exception: Assignment in a
Commercial, Industrial or Agricultural
Enterprise)
g. Persons in the personal service of
another
h. Workers who are paid by result as
determined by DOLE regulation [Art.
82]
a. Government Employees
The terms and conditions of employment of all
government employees, including employees
of GOCCs, are governed by the Civil Service
rules and regulations, not by the Labor Code
[Art. 291].
However, not all GOCCs are governed by the
Civil Service Rules; only those created by
original charter are governed by the Civil
Service rules:
“Following Sec. 2(i) Art. IX-B of 1987 Phil.
Constitution, the test in determining whether a
government owned corporation is subject to
the Labor Code or the Civil Service law is
finding out what created it – if it is created by a
special charter, then, Civil Service Law applies,
if it is created by the General Corporation Law,
then the Labor Code applies” [PNOC Energy
Development Corp. v. NLRC, G.R. No. 79182
(1991)].
b. Managerial Employees
Two Definitions of “Managerial
Employee” in the Labor Code:
1. One whose primary duty consists of the
management of the establishment in
which they are employed or of a
department or subdivision thereof and
to other officers or members of the
managerial staff [Art. 82].
2. One who is vested with the powers or
prerogatives to lay down and execute
management policies and/or to hire,
transfer, suspend, lay off, recall,
discharge, assign or discipline
employees [Art. 219(m)].
LABOR 1
Characteristics of Managerial Employees
[Sec. 2(b), Rule I, Book III, IRR]
Managerial employees are exempted from the
coverage of Book III Articles 83 through 96 if
they meet all of the following conditions:
1. Their primary duty consists of the
management of the establishment in
which they are employed or of a
department or subdivision thereof.
2. They customarily and regularly direct
the work of two or more employees
therein.
3. They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations
as to hiring and firing and as to the
promotion or any other change of
status of other employees, are given
particular weight.
Managerial employees and managerial staff
are determined by their job description and not
their job title [Peñarada v. Baganga Plywood
Corp., G.R. No. 159577 (2006)].
c. Members of the Managerial Staff
(Supervisory Employees)
Definition
Supervisory employees are those who, in the
interest of the employer, effectively
recommend such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgment [Art. 219(m)].
Art. 82 also includes managerial staff
(supervisory employees) in the definition of
managerial employees. The definition in Art. 82
covers more people than that in Art. 219(m). In
effect, managerial employees in Art. 82
includes supervisors, but Art. 219(m) does not,
for purposes of the right to self-organization.
Managerial Staff is Included as They are
Considered Managerial Employees as
Well [Sec. 2(c), Rule I, Book III, IRR]
Officers or members of a managerial staff are
also exempted if they perform the following
duties and responsibilities:
1. Their primary duty consists of the
performance of work directly related to
management policies of their
employer;
2. Customarily and regularly exercise
discretion and independent judgment;
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3.
a. Regularly and directly assist a
proprietor or a managerial
employee whose primary duty
consists of the management of
the establishment in which he
is employed or subdivision
thereof; OR
b. Execute under general
supervision work along
specialized or technical lines
requiring special training,
experience, or knowledge; OR
c. Execute, under general
supervision, special
assignments and tasks;
4. Do not devote more than 20% of their
hours worked in a work week to
activities which are not directly and
closely related to the performance of
the work described in paragraphs (1),
(2) and (3) above.
Effective Recommendatory Power
Supervisory employees are those who, in the
interest of the employer, effectively
recommend such managerial actions and the
exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgment [Art. 219(m)].
d. Field Personnel
Field Personnel are Non-Agricultural
Employees:
1. Who regularly perform their duties
away from the principal or place of
business or branch office of the
employer; and
2. Whose actual hours of work in the field
cannot be determined with reasonable
certainty [Art. 82].
Legal Test: Control and supervision of
employer
In order to determine whether an employee is
a field employee, it is also necessary to
ascertain if actual hours of work in the field can
be determined with reasonable certainty by the
employer. In so doing, an inquiry must be made
as to whether or not the employee’s time and
performance are constantly supervised by the
employer [Far East Agricultural Supply v.
Lebatique, G.R. No. 162813 (2007)].
LABOR 1
Although the fishermen perform non-
agricultural work away from petitioner’s
business offices, the fact remains that
throughout the duration of their work they are
under the effective control and supervision of
petitioner through the vessel’s patron or
master. Hence, the fishermen are not “field
personnel” [Mercidar Fishing Corporation v.
NLRC, G.R. No. 112574 (1998)].
e. Dependent Family Members
Workers who are family members of the
employer, and who are dependent on him for
their support, are outside the coverage of this
Title on working conditions and rest periods
[Art. 82].
f. Domestic Helpers (Workers)
Definition
Domestic worker or “Kasambahay” refers to
any person engaged in domestic work within
an employment relationship such as but not
limited to the following:
1. general househelp,
2. nursemaid or “yaya”,
3. cook,
4. gardener, or
5. laundry person
"Domestic work" refers to work performed in or
for a household [Sec. 3(d), IRR of RA10361].
"Household" refers to the immediate members
of the family or the occupants of the house who
are directly and regularly provided services by
the kasambahay [Sec. 3(g), IRR of RA 10361].
The definition of “Kasambahay” excludes:
1. Any person who performs domestic
work only occasionally or sporadically
and not on an occupational basis
2. Children who are under foster family
arrangement, and are provided access
to education and given an allowance
incidental to education [Sec. 4(d), Art.
1, RA 10361]
3. Service providers
4. Family drivers [Sec. 2 of the IRR, RA
10361]
Exclusivity of Function Required
Note that the definition contemplates a
domestic helper who is employed in the
employer’s home to minister exclusively to the
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personal comfort and enjoyment of the
employer’s family [Azucena].
Thus, it has been held that the following
personnel are not domestic employees:
1. House-help or laundry-women working
in staffhouses of a company, as well as
drivers, houseboys, or gardeners
exclusively working in the company,
the staffhouses and its premises [Apex
Mining Company v. NLRC, G.R. No.
94951 (1991)]
2. House-help doing chores for the
employer's family, while also fulfilling
tasks connected with the employer's
business (bakery) such as cooking,
filling orders, baking orders, and other
clerical work [Fernando Co v. Vargas,
G.R. No. 195167 (2011)]
g. Persons in Personal Service of
Another
Persons in the personal service of another are
not covered by Title I: Working Conditions and
Rest Periods if they:
1. Perform such services in the
employer’s home which are usually
necessary or desirable for the
maintenance and enjoyment thereof; or
2. Minister to the personal comfort,
convenience or safety of the employer
as well as the members of his
employer’s household [Sec. 2 (d), Rule
I, Book III, IRR].
h. Workers Paid by Result (piece-
workers)
Definition
Workers who are paid by results are those
whose output rates are in accordance with the
standards prescribed under Sec. 8, Rule VII,
Book Three of these regulations, or where such
rates have been fixed by the Secretary of Labor
and Employment in accordance with the
aforesaid Section.
These include those who are paid on piece
work, “takay,” “pakiao” or task basis, and other
nontime work [Sec. 2(e), Rule I, Book III, IRR].
Workers under piece-rate employment have no
fixed salaries and their compensation is
computed on the basis of accomplished tasks.
That their work output might have been
LABOR 1 LABOR LAW
affected by the change in their specific work
assignments does not necessarily imply that Benefit Unsupervised Supervised
any resulting reduction in pay is tantamount to
constructive dismissal. It is the prerogative of 13th
the management to change their assignments month pay
or to transfer them [Best Wear Garments v. De [Revised
Lemos and Ocubillo, G.R. No. 191281 (2012)].
Guidelines Yes, provided the worker has
Workers paid by results may be grouped into
two: 1) those whose time and performance is on the rendered at least 1 month of
supervised by the employer and 2) those Implement service during the calendar
whose time and performance is unsupervised ation of the year
by the employer [Azucena, p. 289]. 13th Month
Pay Law
Must be Unsupervised to be Excluded (1987)]
Those who are engaged on task basis, purely
commission basis, or those who are paid a Other No Yes
fixed amount for performing work irrespective statutory
of the time consumed in the performance benefits
thereof are excluded from receiving benefits
such as nightime pay, holiday pay, service [Labor
incentive leave, inter alia, provided their time Congress
and performance is unsupervised by the of the
employer [Labor Congress of the Philippines v. Philippine
NLRC, G.R. No. 123938 (1998)]. s v. NLRC,
G.R. No.
Rule on Overtime Pay 123938
Workers who are paid by results, if their output
rates are in accordance with the standards (1998)]
prescribed under Sec. 8, Rule VII, Book III, of
those regulations, or where such rates have Not Determinative of EER
been fixed by the Secretary of Labor in Payment by result is not determinative of
accordance with the aforesaid section, are not employer-employee relationship. It is a method
entitled to receive overtime pay [Sec. 2(e), of compensation and does not define the
Rule I; Labor Congress of the Philippines v. essence of the relation. It is a method of
NLRC, G.R. No. 123938 (1998)]. computing compensation, not a basis for
determining the existence or absence of
Summary of Benefits Payable employer-employee relationship [Tan v.
Lagrama, G.R. No. 111042 (1999)].
Benefit Unsupervised Supervised
2. Hours of Work
Applicable
statutory Principles in Determining Hours Worked
Yes
minimum Hours worked shall include:
wage a. All time during which an employee is
required to be on duty or to be at a
Night prescribed workplace; AND
No Yes
differential b. All time during which an employee is
suffered or permitted to work [Art. 84].
Service
incentive No Yes General Principles in Determining if Time
leave is Considered as Hours Worked
All hours are hours worked which the employee
Holiday
Yes is required to give their employer, regardless of
pay whether or not such hours are spent in

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LABOR 1
productive labor or involve physical or mental
exertion.
An employee need not leave the premises of
the workplace in order that their rest period
shall not be counted, it being enough that they
stop working, may rest completely and may
leave their workplace to go elsewhere, whether
within or outside the premises of their
workplace [Sec. 4(b), Rule I, Book III, IRR].
If the work performed was necessary, or it
benefited the employer, or the employee could
not abandon his work at the end of his normal
working hours because he had no
replacement, all time spent for such work shall
be considered as hours worked, if the work was
with the knowledge of his employer or
immediate supervisor [Sec. 4(c), Rule I, Book
III, IRR].
The time during which an employee is inactive
by reason of interruptions in his work beyond
his control shall be considered working time
either:
a. If the imminence of the resumption of
work requires the employee’s presence
at the place of work, or
b. If the interval is too brief to be utilized
effectively and gainfully in the
employee’s own interest [Sec. 4, Rule
I, Book III, IRR].
a. Normal Hours of Work
General Rule: 8-hour labor law
The normal hours of work of any employee
shall not exceed eight (8) hours a day [Art. 83].
Note: Art. 83 of the Labor Code only sets a
maximum number of hours as "normal hours of
work" but did not prohibit work of less than
eight hours [Legend Hotel v. Realuyo, G.R.
153511 (2012)].
Exception to 8-Hour Law: Work hours of
health personnel
Health personnel in:
1. Cities and municipalities with a
population of at least one million
(1,000,000) OR
2. 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.
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However, where the exigencies of the service
require that they work for six (6) days or forty-
eight (48) hours, they shall be entitled to an
additional compensation of at least thirty
percent (30%) of their regular wage for work on
the sixth day.
“Health personnel" shall include:
1. Resident physicians, nurses,
nutritionists, dietitians, pharmacists,
social workers, laboratory technicians,
paramedical technicians,
psychologists, midwives, attendants
and all other hospital or clinic
personnel [Art. 83].
2. Medical secretaries [Azucena]
Hours Worked
1. all time during which an employee is
required to be on duty or to be at a
prescribed workplace; and
2. all time during which an employee is
suffered or permitted to work.
Rest periods of short duration during working
hours shall be counted as hours worked [Art.
84].
Non-Compensable Hours; When
Compensable
Idle Time
The idle time that an employee may spend
resting and dining at which he may leave the
spot or place of work though not the premises
of his employer, is not counted as working time
only where the work is broken or is not
continuous [National Development Co. v. CIR,
G.R. No. L-15422 (1962)].
A laborer need not leave the premises of the
factory, shop or boat in order that his period of
rest shall not be counted, it being enough that
he "cease to work", may rest completely and
leave or may leave at his will the spot where he
actually stays while working, to go somewhere
else, whether within or outside the premises of
said factory, shop or boat. If these requisites
are complied with, the period of such rest shall
not be counted [Luzon Stevedoring Co. v.
Luzon Marine Department Union, G.R. No. L-
9265 (1957)].
LABOR 1
Travel Time
Travel time [Department of Labor Manual]
Travel from home to work – An employee who
travels from home before his regular workday
and returns to his home at the end of the
workday is engaged in ordinary home-to-work
travel which is NOT considered hours worked.
Except:
1. When called to travel during
emergency;
2. When travel is done through a
conveyance furnished by the employer;
3. Travel is done under vexing and
dangerous circumstances;
4. Travel is done under the supervision
and control of the employer.
Travel that is all in the day’s work – Time
spent by an employee in travel from jobsite to
jobsite during the workday, must be counted as
hours worked. Where an employee is required
to report at a meeting place to receive
instructions or to perform other work there, the
travel from the designated place to the
workplace is part of the day’s work.
Travel away from home – Travel that keeps
an employee away from home overnight is
travel away from home. Travel away from
home is work time when it cuts across the
employee’s workday. The time is hours worked
not only on regular working hours but also
during the corresponding hours on non-
working days.
Lectures, Meetings, Trainings
Attendance at lectures, meetings, training
programs, and other similar activities shall not
be counted as working time if all of the following
conditions are met:
1. Attendance is outside of the
employee’s regular working hours;
2. Attendance is in fact voluntary; and
3. The employee does not perform any
productive work during such
attendance [Sec. 6, Rule I, Book III,
IRR].
Notes:
1. Attendance in lectures, meetings, and
training periods sanctioned or required
by the employer are considered hours
worked.
2. Attendance in CBA negotiations or
grievance meetings is compensable
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hours worked provided that such is
stipulated in the CBA [Department of
Labor Manual, Sec. 4323.03].
3. Attendance in hearings in cases filed
by the employee is NOT compensable
hours worked.
4. Participation in strikes is NOT
compensable working time.
Attendance in lectures, meetings, and training
periods must necessarily be beneficial to the
employer [Sec. 6(c), Rule I, IRR].
Commuting Time
Employees performing tasks during their
commute which are not merely incidental to the
employee’s job, and are primarily for the
benefit of the employer (such as a company
driver performing a carpool service for co-
workers according to an agreement with the
company), are entitled to overtime pay [Hilario
Rada v. NLRC, G.R. No. 96078 (1992)].
Waiting Time
Rest period – short duration or “coffee
break”
1. Rest periods of short duration during
working hours shall be counted as
hours worked [par. 2, Art. 84]
2. Rest periods or coffee breaks running
from five (5) to twenty (20) minutes
shall be considered as compensable
working time [par. 2, Sec. 7, Rule I,
Book III, IRR]
On Call
Compensable work time, if employee is:
1. Required to remain on call in the
employer’s premises or so close
thereto
2. That he cannot use the time effectively
and gainfully for his own purpose shall
be considered as working while on call
Note: An employee who is not required to leave
word at his home or with company officials
where he may be reached is NOT working
while on call [Sec. 5 (b), Rule I, Book III, IRR].
LABOR 1
Inactive Due to Work Interruptions
The time during which an employee is inactive
by reason of interruptions in his work beyond
his control shall be considered working time
either:
1. If the imminence of the resumption of
work requires the employee's presence
at the place of work OR
2. If the interval is too brief to be utilized
effectively and gainfully in the
employee's own interest [Sec. 4 (d),
Rule I, Book III, IRR].
b. Meal Periods
General Rule: 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 [Art. 85].
Exceptions: Employees may be given a meal
period of not less than twenty (20) minutes
provided that such shorter meal period is
credited as compensable hours worked of the
employee:
1. Where the work is non-manual work in
nature or does not involve strenuous
physical exertion;
2. Where the establishment regularly
operates not less than sixteen (16)
hours a day;
3. In case of actual or impending
emergencies or there is urgent work to
be performed on machineries,
equipment or installations to avoid
serious loss which the employer would
otherwise suffer; OR
4. Where the work is necessary to
prevent serious loss of perishable
goods [par. 1, Sec. 1, Rule I, Book III,
IRR].
The eight-hour work period does not include
the meal break. Employees are not prohibited
from going out of the premises as long as they
return to their posts on time. Nowhere in the
law may it be inferred that employees must
take their meals within the company premises
[Philippine Airlines v. NLRC, G.R. No. 132805
(1999)].
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Synthesis of the Rules
General Rule: Meal periods are NOT
compensable.
Exception:
It becomes compensable:
1. Where the lunch period or meal time is
predominantly spent for the employer’s
benefit [Azucena citing 31 Am. Jur.
881; Duka, Labor Laws and Social
Legislation]
2. Meal periods of 1 hour are deemed
compensable when the employee is on
continuous shift [National Development
Co. v. CIR, G.R. No. L-15422 (1962)]
3. Shortened meal period of less than 1
hour (say, 30 minutes) must be
compensable [Sec. 7, Rule I, Book III,
IRR]
Note: To shorten meal time to less than 20
minutes is not allowed. If the so-called meal
time is less than 20 minutes, it becomes only a
REST PERIOD and is considered working
time.
Exception to the Exception: Shortened meal
breaks upon the employees’ request – NOT
compensable.
The employees themselves may request that
the meal period be shortened so that they can
leave work earlier than the previously
established schedule [Drilon: Letter to Kodak
Philippines, Nov. 27, 1989; Cilindro: BWC-
WHSD, Opinion No. 197, s. 1998].
Conditions for Shortened Meal Breaks
Upon Employee’s Request
1. The employees voluntarily agree in
writing to a shortened meal period of 30
minutes and are willing to waive the
overtime pay for such shortened meal
period;
2. There will be no diminution whatsoever
in the salary and other fringe benefits
of the employees existing before the
effectivity of the shortened meal period;
3. The work of the employees does not
involve strenuous physical exertion
and they are provided with adequate
“coffee breaks” in the morning and
afternoon;
4. The value of the benefits derived by the
employees from the proposed work
arrangement is equal to or
LABOR 1
commensurate with the compensation
due them for the shortened meal period
as well as the overtime pay for 30
minutes as determined by the
employees concerned;
5. The overtime pay of the employees will
become due and demandable if ever
they are permitted or made beyond
4:30pm; and
6. The effectivity of the proposed working
time arrangement shall be of temporary
duration as determined by the
Secretary of Labor [BWC-WHSD
Opinion No. 197, s. 1998].
Power Interruptions or Brownouts
Brownouts of short duration, but not exceeding
20 minutes, shall be treated as hours worked,
whether used productively by the employees or
not.
If they last more than 20 minutes, the time
may not be treated as hours worked if:
1. the employees can leave their
workplace or go elsewhere whether
within or without the work premises;
OR
2. the employees can use the time
effectively for their own interest.
In this case, the employer may extend the
working hours beyond the regular schedule on
that day to compensate for the loss of
productive man-hours without being liable for
overtime pay [Policy Instruction No. 36, May
22, 1978].
Note: The time during which an employee is
inactive by reason of work interruptions beyond
his control is considered working time, either if
the imminence of the resumption of work
requires the employee’s presence at the place
of work or if the interval is too brief to be utilized
effectively and gainfully in the employee’s own
interest [Sec. 4(d), Rule I, Book III, IRR].
c. Night-Shift Differential
Definition
Night Shift Differential is the additional
compensation of 10% of an employee’s regular
wage for each hour of work performed between
10pm and 6am [Art. 86].
Illustration: If an employee has a regular wage
of P100 for each hour of work performed
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between 10PM and 6AM, he/she shall be paid
P110 per hour worked during such time
intervals.
Coverage
Aside from those enumerated under Art. 82 as
excluded from Title I: Working Conditions and
Rest Periods, those employed in retail and
service establishments regularly employing not
more than five (5) workers are also NOT
entitled to Night Shift differential [Sec. 1, Rule
II, Book III, IRR].
Rest Days (night-off)
Night shift employees are entitled to a weekly
night-off (usually Saturday evening) or a
weekly rest period of 24 hours beginning at the
start of the night shift [See also Art. 91].
Work on Special Days
Night shift employees are also entitled to the
premium pay on special days and holidays.
These days are reckoned as calendar days
which start at midnight and end at the following
midnight. The premium pay for the night shift
also starts or ends at midnight. However, the
employment contract, company policy or CBA
may provide that in the case of night shift
workers, days—including special days and
regular holidays—shall begin on the night
before a calendar day [Chan, Pre-Week
Guidelines].
d. Overtime Work
Overtime compensation is additional pay for
service or work rendered or performed in
excess of eight hours a day by employees or
laborers covered by the Eight-hour Labor Law
[National Shipyard and Steel Corp. v. CIR,
G.R. No. L-17068 (1961)].
Rationale: There can be no other reason than
that he is made to work longer than what is
commensurate with his agreed compensation
for the statutorily fixed or voluntary agreed
hours of labor he is supposed to do [PNB v.
PEMA, G.R. No. L-30279 (1982)].
Overtime on Ordinary Working Day
Work may be performed beyond eight hours a
day, provided that the employee is paid an
additional compensation equivalent to his
regular wage plus at least 25% thereof [Art. 87].
LABOR 1
Overtime Work on Holiday or Rest Day
Work performed beyond eight hours on a
holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at least
30% thereof [Art. 87].
Computation of Additional Compensation
Base of Computation: Regular wage – means
regular base pay.
It includes the cash wage only without
deduction on account of facilities provided by
the employer [Art. 90].
It excludes money received in different
concepts, such as Christmas bonus and other
fringe benefits [Bisig ng Manggagawa ng
Philippine Refining Co. v. Philippine Refining
Co., G.R. L-27761 (1981)].
BUT when the overtime work was performed
on the employee’s rest day or on special days
or regular holidays (Art. 93 and 94), the
premium pay, must be included in the
computation of the overtime pay [See: p. 19 of
Handbook on Workers’ Statutory Monetary
Benefits, issued by the Bureau of Working
Conditions, 2006].
Overtime on a Regular Day (OTRD)
Work may be performed beyond eight (8) hours
a day provided that the employee is paid for the
overtime work, an additional compensation
equivalent to his regular wage plus at least
twenty-five percent (25%) thereof [Art. 87].
OTRD = Hourly wage x 125% x number of
hours of OT work
Work on Scheduled Rest Day (WRD)
Work performed on a rest day shall be paid an
additional compensation equivalent to 30% of
the regular wage [Art. 93].
WRD = Regular Wage x 130%
Overtime on Scheduled Rest Day
(OTSRD)
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
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only when it is his established rest day [Art.
93(a)].
OTSRD = Hourly Wage x 169% x number of
hours of OT work
Note: 169% was derived by adding 39% (which
is 30% of 130 or 1.3x.3 to 130%
Emergency Overtime
Any employee may be required by the
employer to perform overtime work in any of
the following cases:
1. When the country is at war or when any
other national or local emergency has
been declared by the National
Assembly or the Chief Executive;
2. When it is necessary to prevent loss of
life or property or in case of imminent
danger to public safety due to an actual
or impending emergency in the locality
caused by serious accidents, fire,
flood, typhoon, earthquake, epidemic,
or other disaster or calamity;
3. When there is urgent work to be
performed on machines, installations,
or equipment, in order to avoid serious
loss or damage to the employer or
some other cause of similar nature;
4. When the work is necessary to prevent
loss or damage to perishable goods;
and
5. Where the completion or continuation
of the work started before the eighth
hour is necessary to prevent serious
obstruction or prejudice to the business
or operations of the employer [Art. 89];
6. Where overtime work is necessary to
avail of favorable weather or
environmental conditions where
performance or quality of work is
dependent thereon [added by Rule 1,
Sec. 10].
Overtime Pay Does Not Preclude Night
Differential Pay
When the tour of duty of a laborer falls at
nighttime [between 10:00pm and 6:00am], the
receipt of overtime pay will not preclude the
right to night differential pay. The latter is
payment for work done during the night, while
the other is payment for the excess of the
regular eight-hour work [Naric v. Naric Workers
Union, G.R. No. L-12075 (1959)].
LABOR 1
Synthesis of Rules
1. An employer cannot compel an
employee to work overtime
Exception: Emergency overtime
work as provided for in Art. 89
2. Additional compensation is
demandable only if the employer had
knowledge and consented to the
overtime work rendered by the
employee.
Exception: Express approval by a
superior NOT a requisite to make
overtime compensable:
a. If the work performed is
necessary, or that it benefited
the company; or
b. That the employee could not
abandon his work at the end of
his eight-hour work because
there was no substitute ready to
take his place [Sec. 4(c), Rule I;
Manila Railroad Co. v. CIR, G.R.
L-4614 (1952)].
Note: However, the Court has also ruled
that a claim for overtime pay is NOT
justified in the absence of a written
authority to render overtime after office
hours during Sundays and holidays [Global
Incorporated v. Atienza, G.R. L-51612-13
(1986)].
Daily time records cannot prove the
performance of overtime work if the same
had no prior authorization by the
management [Robina Farms Cebu/
Universal Robina Corp. v. Villa, G.R. No.
175869 (2016)].
3. Compensation for work rendered in
excess of the 8 normal working hours
in a day:
a. For ordinary days, additional 25%
of the basic hourly rate.
b. For rest day/special day/holiday,
additional 30% of the basic hourly
rate.
4. A given day is considered an ordinary
day, unless it is a rest day.
5. Undertime does NOT offset overtime.
Undertime work on any particular day
shall not be offset by overtime work on
any other day. Permission given to the
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employee to go on leave on some other
day of the week shall NOT exempt the
employer from paying the additional
compensation required in this Chapter
[Art. 88].
Offsetting work on a regular day with work
rendered on a holiday or rest day is prohibited
because such deprives the employee of
additional pay or premium [Lagatic v. NLRC,
G.R. No. 121004 (1998)].
e. Compressed Work Week, Flexible
Work Arrangement Alternative Work
Arrangements, Telecommuting
Program
1. Compressed Work Week
A CWW refers to one where the normal
workweek is reduced to less than 6 days but
the total number of work hours of 48 hours per
week shall remain. Under the CWW scheme,
the normal workday goes beyond eight hours
but does not exceed 12 hours, without the
corresponding overtime premium [DOLE
Advisory No. 04, Series of 2010].
In excess of such, the employer is obliged to
pay the worker the overtime premium.
Conditions for CWW
1. The CWW scheme is undertaken as a
result of an express and voluntary
agreement of majority of the covered
employees or their duly authorized
representatives. This agreement may
be expressed through collective
bargaining or other legitimate
workplace mechanisms of participation
such as labor management councils,
employee assemblies or referenda.
2. In firms using substances, chemicals
and processes or operating under
conditions where there are airborne
contaminants, human carcinogens or
noise prolonged exposure to which
may pose hazards to employees’
health and safety, there must be a
certification from an accredited health
and safety organization or practitioner
from the firm’s safety committee that
work beyond eight hours is within
threshold limits or tolerable levels of
exposure, as set in the OSHS.
LABOR 1
3. The employer shall notify DOLE,
through the Regional Office having
jurisdiction over the workplace, of the
adoption of the CWW scheme. The
notice shall be in DOLE CWW Report
Form attached to this Advisory [DOLE
Advisory No. 02-04].
Effects of CWW
1. Unless there is a more favorable
practice existing in the firm, work
beyond eight 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 12 hours a day or 48
hours a week shall be subject to
overtime premium.
2. Consistent with Art. 85, employees
under a CWW scheme are entitled to
meal periods of not less than 60
minutes. There shall be no impairment
of the right of the employees to rest
days as well as to holiday pay, rest day
pay or leaves in accordance with law or
applicable collective bargaining
agreement or company practice.
3. Adoption of the CWW scheme shall in
no case result in diminution of existing
benefits. Reversion to the normal eight-
hour workday shall not constitute a
diminution of benefits.
Rationale: Although the right to overtime pay
cannot be waived as per Cruz v. Yee Sing
[G.R. No. L-12046 (1959)], D.O. No. 21
sanctions the waiver of overtime pay in
consideration of the benefits that the
employees will derive from the adoption of a
compressed workweek scheme, thus the
compressed workweek scheme was originally
conceived for establishments wishing to save
on energy costs, promote greater work
efficiency and lower the rate of employee
absenteeism, among others.
Thus, under this scheme, the generally
observed workweek of six (6) days is
shortened to five (5) days, but prolonging the
working hours from Monday to Friday without
the employer being obliged for pay overtime
premium compensation for work performed in
excess of eight (8) hours on weekdays, in
exchange for the benefits that will accrue to the
employees (e.g. savings on meal and snack
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expenses; longer weekends etc) [Bisig
Manggagawa sa Tryco v. NLRC, et al., G.R.
No. 151309 (2008)].
Built-In Overtime
Composite or Package Pay Not Per Se
Illegal; Conditions for Validity
Composite or “package pay” or “all-inclusive
salary” is an arrangement where the
employee’s salary includes the overtime pay.
In other words, the overtime pay is “built-in”.
Such arrangement is valid provided that:
1. There is a clear written agreement
knowingly and freely entered by the
employee; and
2. The mathematical result shows that the
agreed legal wage rate and the
overtime pay, computed separately,
are equal to or higher than the separate
amounts legally due [Damasco v.
NLRC, G.R. 115755 (2000)].
2. Flexible Work Arrangement Alternative
Work Arrangements
Flexible Work Schedule for Solo Parents
“Flexible work schedule” is the right granted to
a solo parent to vary his/her arrival and
departure time without affecting core work
hours as defined by the employer [Sec. 3(e),
RA 8972].
Grant of Flexible Work Schedule
The employer shall provide for a flexible
working schedule for solo parents: Provided,
That the same shall not affect individual and
company productivity: Provided, further, That
any employer may request exemption from the
above requirements from the DOLE on certain
meritorious grounds [Sec. 6, RA 8972].
The employer shall provide a flexible work
schedule for solo parents: Provided,
1. That the same shall not affect
individual and company productivity:
2. That any employer may request
exemption from the above
requirements from the DOLE on certain
meritorious grounds [Sec. 6, RA 8972].
LABOR 1
(3) Telecommuting Program
Telecommuting Act [RA 11165]
Section 3. Telecommuting Defined. – As used in
this Act, the term "telecommuting" refers to a work
arrangement that allows an employee in the private
sector to work from an alternative workplace with the
use of telecommunication and/or computer
technologies.
Section 4. Telecommuting Program. – An employer
in the private sector may offer a telecommuting
program to its employees on a voluntary basis, and
upon such terms and conditions as they may
mutually agree upon: Provided, That such terms and
conditions shall not be less than the minimum labor
standards set by law, and shall include compensable
work hours, minimum number of work hours,
overtime, rest days, and entitlement to leave
benefits.
The employer shall provide the telecommuting
employee with relevant written information in order
to adequately apprise the individual of the terms and
conditions of the telecommuting program, and the
responsibilities of the employee.
Section 5. Fair Treatment. – The employer shall
ensure that the telecommuting employees are given
the same treatment as that of comparable
employees working at the employer's premises. All
telecommuting employees shall:
(a) Receive a rate of pay, including overtime and
night shift differential, and other similar
monetary benefits not lower than those provided
in applicable laws, and collective bargaining
agreements.
(b) Have the right to rest periods, regular
holidays, and special non-working days.
(c) Have the same or equivalent workload and
performance standards as those of comparable
workers at the employer's premises.
(d) Have the same access to training and career
development opportunities as those of
comparable workers at the employer's premises,
and be subject to the same appraisal policies
covering these workers.
(e) Receive appropriate training on the technical
equipment at their disposal, and the
characteristics and conditions of telecommuting.
(f) Have the same collective rights as the
workers at the employer's premises, and shall
not be barred from communicating with workers'
representatives.
The employers shall also ensure that measures are
taken to prevent the telecommuting employee from
being isolated from the rest of the working
community in the company by giving the
telecommuting employee the opportunity to meet
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with colleagues on a regular basis, and allowing
access to company information.
Section 6. Data Protection. – The employer shall be
responsible for taking the appropriate measures to
ensure the protection of data used and processed by
the telecommuting employee for professional
purposes. The employer shall inform the
telecommuting employee of all relevant laws, and
company rules concerning data protection. The
telecommuting employee shall ensure that
confidential and proprietary information are
protected at all times.
For this purpose, the provisions of the Data Privacy
Act of 2012 shall have suppletory effect.
Section 7. Administration. – The parties to a
telecommuting work arrangement shall be primarily
responsible for its administration. In case of
differences in interpretation, the following guideline
shall be observed:
(a) The differences shall be treated as
grievances under the applicable grievance
mechanism of the company.
(b) If there is no grievance mechanism or if the
mechanism is inadequate, the grievance shall
be referred to the regional office of the
Department of Labor and Employment (DOLE)
which has jurisdiction over the workplace for
conciliation.
(c) To facilitate the resolution of grievances,
employers shall keep and maintain, as part of
their records, the documents proving that the
telecommuting work arrangement was
voluntarily adopted.
3. Rest Periods
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 [Art. 91
(a)].
Preference of the Employee
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. 94 (b)].
LABOR 1
The employee shall make known his
preference to the employer in writing at least
seven days before the desired effectivity of the
initial rest day so preferred.
When the choice of the employee as to his rest
day based on religious grounds will inevitably
result in serious prejudice or obstruction to the
operations and the employer cannot normally
be expected to resort to other measures, the
employer may so schedule the weekly rest day
of his choice for at least two days in a month
[Rule III, Sec. 4].
Compulsory Work on 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. 92].
Synthesis of the Rules
a. Rest day of not less than 24
consecutive hours after 6 consecutive
days of work.
b. No work, no pay principle applies.
c. If an employee works on his
designated rest day, he is entitled to a
premium pay.
d. Premium pay is additional 30% of the
basic pay.
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e. Employer selects the rest day of his
employees.
f. However, employer must consider the
religious reasons for the choice of a
rest day.
Premium Pay
Premium pay refers to the additional
compensation for work performed within 8
hours on non-work days, such as rest days and
special days.
Coverage [Sec. 7, Rule III, Book III, IRR]
General Rule: All employees
Exceptions:
a. Those of the government and any of
the political subdivision, including
government-owned and controlled
corporations;
b. Managerial employees as defined in
Book III;
c. Househelpers and persons in the
personal service of another;
d. Workers who are paid by results,
including those who are paid on piece
rate, takay, pakyaw, or task basis, and
other noontime work, if their output
rates are in accordance with the
standards prescribed in the
regulations, or where such rates have
been fixed by the Secretary of Labor
and Employment;
e. Field personnel, if they regularly
perform their duties away from the
principal or branch office or place of
business of the ER and whose actual
hours of work in the field cannot be
determined with reasonable certainty.
LABOR 1 LABOR LAW
Premium Pay Rates [Handbook on Workers regular work days and no regular rest
Statutory Monetary Benefits, 2018] days can be scheduled [Sec. 7, Rule III,
Book III, IRR].
When Work Performed Premium Pay
CBA on Higher Premium Pay/Rate
On scheduled rest day 130% of regular Adjustments
wage Where the collective bargaining agreement or
other applicable employment contract
On Sunday only if this is 130% of regular stipulates the payment of a higher premium
pay than that prescribed under this Article, the
the established rest day wage
employer shall pay such higher rate [Art. 93
(d)]. The employer and his employees or their
On Sunday and holidays, 130% of regular representatives are not prevented from
when no regular work wage entering into any agreement with terms more
and rest days favorable to the employees [Sec. 9, Rule II,
Book III, IRR].
On any special 130% of regular
holiday/special day wage Nothing in this rule shall justify an employer in
reducing the compensation of his employees
On any special holiday/ 150% of regular for the unworked Sundays, holidays, or other
special day falling on wage rest days, which are considered paid off days
scheduled rest day or holidays by agreement or practice subsisting
upon the effectivity of the Code [Sec. 8, Rule
On a regular holiday 260% of regular III, Book III, IRR].
falling on a rest day wage
4. Holidays

Work on a Sunday or Holiday Which is
Also a Scheduled Rest Day
All establishments and enterprises may
operate or open for business on Sundays and
holidays provided that the employees are given
the weekly rest day and the benefits as
provided in this Rule [Sec. 2, Rule III, Book III,
IRR].
Compensation on Rest Day/Sunday/
Holiday
Except those employees referred to under Sec.
2, Rule I, Book III:
a. An employee who is made or permitted
to work on his scheduled rest day shall
be paid with an additional
compensation of at least 30% of his
regular wage.
b. An employee shall be entitled to such
additional compensation for work
performed on a Sunday only when it is
his established rest day.
c. An employee shall be paid an
additional compensation of at least
30% of his regular wage for work
performed on Sundays and holidays,
where the nature of the work of the
employee is such that he has no
Holiday pay is a one-day pay given by law to
an employee, even if he does not work on a
regular holiday. This gift of a day’s pay is
limited to each of the 12 regular holidays.
Note: Art. 94 (c), was superseded by E.O. 203,
which was subsequently amended by RA
9177, 9256, 9492, and 9849. The current state
of the law is discussed below.
Coverage
General Rule: All employees [Art. 94(a); Rule
IV, Sec. 1]
Exceptions:
a. Those of the government and any of
the political subdivision, including
government-owned and controlled
corporation;
b. Those of retail and service
establishments regularly employing
less than 10 workers;
c. Domestic helpers and persons in the
personal service of another;
d. Managerial employees and officers or
members of the managerial staff as
defined in Book III;

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LABOR 1
e. Field personnel and other employees
whose time and performance are
unsupervised by the employer
including those who are engaged on
task or contract basis, purely
commission basis, or those who are
paid a fixed amount for performing
work irrespective of the time consumed
in the performance thereof [Sec. 1,
Rule IV].
Retail Establishment is one principally
engaged in the sale of goods to end-users for
personal or household use.
Service Establishment is one principally
engaged in the sale of service to individuals for
their own or household use and is generally
recognized as such [RA 6727 (The Wage
Rationalization Act) IRR].
Regular Holidays
RA 9492 and 9849 (which added the two
Muslim holidays) provide for the observance of
the following regular holidays:
a. New Year’s Day – Jan. 1
b. Maundy Thursday – Movable date
c. Good Friday – Movable date
d. Araw ng Kagitingan – Monday nearest
Apr. 9
e. Labor Day – Monday nearest May 1
f. Independence Day – Monday nearest
June 12
g. Eid’l Fitr – Movable date
h. Eid’l Adha – Movable date
i. National Heroes Day – Last Monday of
August
j. Bonifacio Day – Monday nearest Nov.
30
k. Christmas Day – Dec. 25
l. Rizal Day – Monday nearest Dec. 30
Special (Non-Working Days)
RA 9492 and RA 10966 provide for the
observance of the following special holidays:
a. Ninoy Aquino Day – Monday nearest
Aug. 21
b. All Saints Day – Nov. 1
c. Immaculate Conception of Mary [RA
10966] – Dec. 8
d. Last day of the year – Dec. 31
Note: Proclamation 269 fixed the data for the
observance of the regular and special holidays
including additional special holidays for 2018
and 2019.
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The dates for Eid’l Fitr and Eid’l Adha (special
holidays) shall follow after approximate dates
of the Islamic holidays have been determined.
Arts. 169-173, P.D. 1083 (Code of Muslim
Personal Laws)
Specifically for the Muslim Areas, P.D. 1083, in
its Book V, IRR Title, recognizes five (5) Muslim
Holidays, namely:
a. Amun Jadid (New Year) which falls on
the first (1st) day of the lunar month of
Muharram;
b. Mauli-un-Nabi (Birthday of the Prophet
Muhammad) which falls on the twelfth
(12th) day of the third (3rd) lunar month
of Rabi-ul-Awwal;
c. Lailatul Isra Wal Mi Rai (Nocturnal
Journey and Ascension of the Prophet
Muhammand) which falls on the
twenty-seventh (27th) day of the
seventh (7th) lunar month of Rajab;
d. Id-ul-Fitr (Hari Raya Pausa) which falls
on the first (1st) day of the tenth (10th)
lunar month of Shawwal
commemorating the end of the fasting
season; and
e. Id-ul-Adha (Hari Raya Haji) which falls
on the tenth (10th) day of the twelfth
(12th) lunar month of Dhul-Hijjah.
Notes:
a. Id-ul-Fitr (Eid’l Fitr) and Id-ul-Adha
(Eid’l Adha) have been added to the list
of national legal holidays [RA 9849].
a. There should be no distinction
between Muslims & non-Muslims as
regards to the payment of benefits
for Muslim holidays. Wages & other
emoluments granted by law to the
working man are determined on the
basis of the criteria laid down by laws,
and not on worker’s faith. Art. 3(3), PD
1083 states that nothing herein shall be
construed to operate to the prejudice of
a non-Muslim [San Miguel Corp v. CA,
G.R. No. 146775 (2002)].
Holiday Pay Computation [Art. 94; Rule IV,
Book III, IRR; RA 9424; DOLE Memorandum
Circular 1 Series of 2004]
LABOR 1 LABOR LAW
General Rule: An employer may require an Overtime on OTWRHRD = Hourly Rate x
employee to work on a regular holiday but such
Regular 338% x number of hours of OT
employee shall be paid a compensation
Holiday
equivalent to twice his regular rate. If an
employee is required to work on a special which falls Note: Regular holiday-on-rest
holiday, the additional compensation should be on a Rest day rate (200% of regular daily
30% of his regular rate. Day wage plus 30% of such
(OTWRHRD amount) + 30% of hourly rate
) on said day [338%]
Work on
Computation
Holiday Work on WSH = Regular wage x 130%
Special
Work on a WRH = Regular wage x 200%
Holiday Note: Work performed on any
Regular
(WSH) special holiday shall be paid an
Holiday Note: The employer may
additional compensation of at
(WRH) require an employee to work on
least 30% of the regular wage
any holiday but such employee
of the employee [Art. 93(c)].
shall be paid a compensation
equivalent to twice his regular
Regular daily wage + 30%
rate [Art. 94(b)].
thereof [130%]
Overtime on OTRH = Hourly wage x 260% x
Overtime OTWSH = Hourly wage x
a Regular number of hours of OT work
during Work 169% x number of hours of OT
Holiday
on Special work
(OTRH) Note: Work performed beyond
Holiday
eight hours on a holiday or rest
(OTWSH) Note: 130% of regular daily
day shall be paid an additional
wage + 39 (which is 30% of
compensation equivalent to the
130%) [169%]
rate of the first eight hours on a
holiday or rest day plus at least Work on WSHRD = Regular wage x
thirty percent (30%) thereof Special 150%
[Art. 87]. Holiday
which falls Note: Where such holiday work
200% of regular daily wage (for on a Rest falls on the employee’s
the 1st 8 hours)+ 60% of hourly Day scheduled rest day, he shall be
rate on said day [260%] (WSHRD) entitled to an additional
compensation of at least 50%
Work on WRHRD = Regular wage x
of his regular wage.
Regular 260%
Regular daily wage + 50%
Holiday
thereof [150%]
which falls Note: Where an employee is
on a Rest made or permitted to work on Overtime OTWSHRD = Hourly wage x
Day his scheduled rest day, he shall during Work 195% x number of hours of OT
(WRHRD) be paid an additional on Special work
compensation of at least 30% Holiday
of his regular wage [Art. 93(a)]. which falls Note: 45% (which is 30% of
on a Rest 150%) + 150% [195%]
200% of regular daily wage + Day
60% (which is 30% of 200%) (OTWSHRD
[260%] )

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LABOR 1
According to DOLE Memo Circular 1-04, a
“special holiday”/”special day” includes the
National Special Days, and declared special
days such as Special Non-working Holiday,
Special Public Holiday and Special National
Holiday. Such days are entitled to the rates
prescribed above. These days are not the
same as a special working holiday.
A special working holiday is considered an
ordinary working day, so there is no premium
pay.
Double Holiday Pay
According to “DOLE Explanatory Bulletin on
Workers’ Entitlement to Holiday Pay on 9 April
1993,” if two holidays fall on the same day:
a. If unworked, 200% of basic wage.
b. If worked, 300% of basic wage
[Azucena].
Double Holiday Rule for Monthly-Paid
Employees
For covered employees whose monthly
salaries are computed based on 365 days and
for those other employees who are paid using
factor 314, or 262, or any other factor which
already considers the payment for the 11 [now
12] regular holidays, NO additional payment is
due them [BWC-WHSD Opinion No. 053, s.
1998].
Successive Holiday Pay
According to IRR, Rule IV, Sec. 10, an
employee is entitled to holiday pay for both
days, IF:
a. He is present on day immediately
preceding first holiday; or
b. He works on first holiday, which entitles
him to pay on second holiday.
Where the day immediately preceding the
holiday is a non-working day in the
establishment or the scheduled rest day of the
employee, he shall not be deemed to be on
leave of absence on that day, in which case he
shall be entitled to the holiday pay if he worked
on the day immediately preceding the non-
working day or rest day [Sec. 6, Rule IV, Book
III, IRR].
Divisors
The divisor assumes an important role in
determining whether or not holiday pay is
already computed.
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a. Monthly paid employees are not
entitled to the holiday pay if their total
annual income is divided by 365 days
resulting in a wage which is beyond the
minimum wage per day because they
are considered paid everyday of the
year including holidays, rest days, and
other non-working days.
b. As a general rule, for a company with a
6-day working schedule, the divisor
313 already means that the legal
holidays are included in the monthly
pay of the employee. The divisor is
arrived at by subtracting all Sundays
from the total number of calendar days
in a year.
c. As a general rule for a company with a
5-day working schedule, the divisor
277 means that the holiday pay is
already included in the monthly salary
of the employee [Trans Asia Phils. v.
NLRC, G.R. No. 118289 (1999)].
An increase in the divisor that results in the
prejudice of the employees is a violation of the
proscription against non-diminution of benefits
under Sec. 100 of the Labor Code. Such
increases should only be used for
computations which would be advantageous to
the employer (i.e. deduction for absences) and
not for computations which would diminish the
existing benefits of the employees (i.e.,
overtime pay, holiday pay and leave
conversions) [Trans Asia Phils. v. NLRC,
supra].
Sundays
(See “Work on a Sunday or holiday which is
also a scheduled rest day”)
a. When a holiday falls on a Sunday, the
following Monday will not be
considered a holiday unless a
proclamation says so.
b. A legal holiday falling on a Sunday
does not create a legal obligation to
pay extra, aside from the usual holiday
pay, to monthly-paid employees
[Azucena, citing Letter of Instruction
No. 1087].
No provision of law requires any employer to
make adjustments in the monthly salary rate
set by him to take account of legal holidays
falling on Sundays in a given year, otherwise to
reckon a year at more than 365 days
[Wellington Investment and Manufacturing
LABOR 1
Corporation v. Trajano, G.R. No. 114698
(1995)].
Non-Working/Scheduled Rest Day
Where the day immediately preceding the
holiday is a non-working day in the
establishment or the scheduled rest day of the
employee, he shall not be deemed to be on
leave of absence on that day, in which case he
shall be entitled to the holiday pay if he worked
on the day immediately preceding the non-
working day or rest day [Sec. 6(c), Rule IV,
Book III, IRR].
Example:
If a holiday falls on Monday, and Sunday is a
non-working day in the establishment or is the
scheduled rest day of the employee, the
employee shall be entitled to holiday pay if he
worked on Saturday (which is the day
immediately preceding Sunday, the non-
working day or rest day).
Right to Holiday Pay in Case of Absences
If an employee is on leave of absence with pay
on the day immediately preceding a regular
holiday, he is entitled to holiday pay [Sec. 6(a),
Rule IV, Book III, IRR].
If an employee is on leave of absence without
pay on the day immediately preceding a
regular holiday, he is not entitled to holiday pay
unless he works on such regular holiday [Sec.
6(a), Rule IV, Book III, IRR].
In Case of Temporary Cessation of Work
a. In cases of temporary or periodic
shutdown and temporary cessation of
work of an establishment, as when a
yearly inventory or when the repair or
cleaning of machineries and equipment
is undertaken, the regular holidays
falling within the periods shall be
compensated in accordance with this
Rule.
b. The regular holiday during the
cessation of operation of an enterprise
due to business reverses as authorized
by the Secretary of Labor may not be
paid by the employer [Sec. 7, Rule IV,
Book III, IRR].
An employee is entitled to holiday pay for the
regular holidays falling within the period in
cases of temporary shutdowns or cessation of
work, when:
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a. An annual inventory; or
b. Repair or cleaning of machineries and
equipment is undertaken.
The employer may not pay his employees for
the regular holidays during the suspension of
work if: the cessation of operation is due to
business reverses, and is authorized by the
Secretary of Labor.
Teachers, Piece Workers, Seafarers,
Seasonal Workers, Etc.
a. Private school teachers, including
faculty members of colleges and
universities, may not be paid for the
regular holidays during semestral
vacations. They shall, however, be
paid for the regular holidays during
Christmas vacation
b. Where a covered employee, is paid by
results or output, such as payment on
piece work, his holiday pay shall not be
less than his average daily earnings for
the last seven (7) actual working days
preceding the regular holiday;
Provided, However, that in no case
shall the holiday pay be less than the
applicable statutory minimum wage
rate
c. Seasonal workers may not be paid the
required holiday pay during off-season
when they are not at work
d. Workers who have no regular working
days shall be entitled to the benefits
provided in this Rule [Sec. 8, Rule IV,
Book III, IRR]
Holiday Pay of Hourly-Paid Faculty
Members
Not Entitled: Regular Holiday Pay
Entitled: Regular hourly rate on days declared
as special holidays or for some reason classes
are called off or shortened for the hours they
are supposed to have taught, whether
extensions of class days be ordered or not; in
case of extensions said faculty members shall
likewise be paid their hourly rates should they
teach during said extensions.
a. They are not entitled to payment of
holiday pay because they are paid only
for work actually done. Since regular
holidays are known to both the school
and faculty members as “no class day”;
certainly the latter do not expect
payment for said unworked holidays.
LABOR 1
b. They are entitled to their hourly rate on
days declared as special holidays.
When a special public holiday is
declared, the faculty member paid by
the hour is deprived of expected
income, and it does not matter that the
school calendar is extended in view of
the days or hours lost, for their income
that could be earned from other
sources is lost during the extended
days.
c. Similarly, when classes are called off or
shortened on account of typhoons,
floods, rallies, and the like, these
faculty members must likewise be paid,
whether or not extensions are ordered
[Jose Rizal College v. NLRC, G.R. No.
L-65482 (1987)].
Piece Workers
The philosophy underlying the exclusion of
piece workers from the 8-hour law is that said
workers are paid depending upon the work
they do irrespective of the amount of time
employed in doing said work [Red V Coconut
Products Ltd. v. CIR, G.R. No. L-21348
(1966)].
Seafarers
Any hours of work or duty including hours of
watch-keeping performed by the seafarer on
designated rest days and holidays shall be paid
rest day or holiday pay [Sec. 11.C, Standard
Terms and Conditions Governing the
Employment of Filipino Seafarers on Board
Ocean-Going Vessels].
Seasonal Workers
Seasonal workers who do not work during off-
season are not entitled to pay for the regular
holidays occurring during their off-season.
Workers assigned to “skeleton crews” that
work during the off-season have the right to be
paid on regular holidays falling in that duration.
5. Bonus, 13th Month Pay
Bonus
General Rule: A bonus is an act of gratuity on
the part of the employer, and is a management
prerogative which cannot be forced upon the
employer [Kamaya Point Hotel v. NLRC, G.R.
No. 75289 (1989)].
Exception: For a bonus to be enforceable:
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a. It must have been promised by the
employer and expressly agreed upon
by the parties; or
b. It must have had a fixed amount and
had been a long and regular practice
on the part of the employer [American
Wire and Cable Union v. American
Wire, G.R. No. 155059 (2005)].
See also VI. D. Bonus for a more
comprehensive discussion on company
practices
13th Month Pay
[PD 851 (The 13th-Month Pay Law) and the
Revised Guidelines on the Implementation of
the 13th Month Pay Law]
Coverage
General Rule: ALL EMPLOYERS are hereby
required to pay all their rank and file
employees a 13th month pay not later than
Dec 24 of every year, Provided that they have
worked for at least one (1) month during a
calendar year [Memorandum Order No. 28].
N.B.: The law distinguishes managerial
employees from rank-and-file employees;
hence, managerial employees are not legally
entitled to 13th month pay.
Exempted Employers:
a. Government, its political subdivisions,
including GOCCs except those
operating essentially as private
subsidiaries of the Government;
b. Employers already paying their
employees a 13th month pay or more
in a calendar year or its equivalent at
the time of this issuance; and
c. Employers of those who are paid on
purely commission, boundary or task
basis and those who are paid a fixed
amount for performing specific work,
irrespective of the time consumed in
the performance thereof (except those
workers who are paid on piece-rate
basis, in which case their employer
shall grant them 13th month pay).
Notes:
“Equivalent” of a 13th month pay includes:
a. Christmas bonus, mid-year bonus,
cash bonuses; and
b. Other payments amounting to not less
than 1/12 of the basic salary
LABOR 1
But shall not include cash and stock dividends,
cost of living allowances and all other
allowances regularly enjoyed by the employee,
as well as non-monetary benefits.
Workers paid on a piece-rate basis – 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. Their employer shall grant
them 13th month pay.
Minimum Amount
1/12 of the total basic salary earned by an
employee within a calendar year.
Base Amount
General Rule: basic salary shall include:
a. Cost of living allowances (COLA)
integrated into the basic salary of a
covered employee pursuant to EO 178.
b. All remunerations or earnings paid by
this employer for services rendered.
Excluding the allowances and monetary
benefits which are not considered or integrated
as part of the regular or basic salary, such as
the cash equivalent of:
a. Unused vacation and sick leave
credits,
b. Overtime,
c. Premium,
d. Night differential,
e. Holiday pay and, and
f. Cost-of-living allowances.
Exception: A company practice favorable to
the employees had indeed been established if
for a considerable length of time, the employer
had freely, voluntarily and continuously
included in the computation of its employees'
thirteenth month pay, the payments for sick,
vacation and maternity leaves, premiums for
work done on rest days and special holidays,
and pay for regular holidays. Thus, the
payments made pursuant thereto, ripened into
benefits enjoyed by the employees, and any
benefit and supplement being enjoyed by them
cannot be reduced, diminished, discontinued
or eliminated by the employer [Davao Fruits
Corp. v. ALU, G.R. No. 85073 (1993)].
Time of Payment
General Rule: paid not later than Dec 24 of
each year.
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Exception: ER may give to his employees half
(½) of the required 13th Month Pay before the
opening of the regular school year and the
other half on or before the 24th of December
every year.
The frequency of payment of this monetary
benefit may be the subject of agreement
between the employer and the recognized CBA
of the employees.
Rationale Behind 13th Month Pay
a. To further protect the level of real
wages from the ravage of world-wide
inflation;
b. There had been no increase in the legal
minimum wage rates since 1970;
c. The Christmas season is an opportune
time for society to show its concern for
the plight of the working masses so
they may properly celebrate Christmas
and New Year [Whereas clauses of PD
851].
13th Month Pay in Special Cases
a. Paid by Results: Employees who are
paid on piece work basis are, by law,
entitled to the 13th Month Pay [Revised
Guidelines on the Implementation of
the 13th Month Pay Law].
b. Fixed or Guaranteed Wage:
Employees who are paid a fixed or
guaranteed wage plus commission are
entitled to 13th month pay (not purely
commission); the basis for computation
shall be both their fixed or guaranteed
wage and commission [Revised
Guidelines].
c. Those with Multiple Employers:
Government Employees working part
time in a private enterprise, including
private educational institutions, as well
as Employees working in two or more
private firms, whether on full or part
time bases, are entitled to the
required 13th Month Pay from all
their private Employers regardless of
their total earnings from each or all their
employers [Revised Guidelines].
d. Private School Teachers: Private
school teachers, including faculty
members of universities and colleges,
are entitled to the required 13th month
pay, regardless of the number of
LABOR 1
months they teach or are paid within a
year, if they have rendered service for
at least one (1) month within a year
[Revised Guidelines].
Overload pay is NOT included in the
computation for 13th month pay; overload is
not overtime as it is additional work done
within the normal shift [Letran Calamba
Faculty v. NLRC, G.R. No. 156225 (2008)].
e. Resigned or Separated Employee:
An Employee who has resigned or
whose services were terminated at any
time before the time for payment of the
13th month pay is entitled to this
monetary benefit in proportion to the
length of time he worked during the
year, reckoned from the time he started
working during the calendar year up to
the time of his resignation or
termination from service [Revised
Guidelines].
f. Terminated Employees: The
payment of the 13th month pay may be
demanded by the employee upon the
cessation of employer-employee
relationship [Archilles Manufacturing
Corp. v. NLRC, G.R. No. 107225
(1995)].
Additional Rules
a. Commissions: If the commissions
may be properly considered part of the
basic salary, then they should be
INCLUDED. If they are not an integral
part of the basic salary, then they
should be EXCLUDED [Phil.
Duplicators Inc. v. NLRC, G.R. No.
110068 (1995)].
b. Substitute Payment not allowed:
Benefits in the form of food or free
electricity, assuming they were given,
were not a proper substitute for the
13th month pay required by law.
Neither may year-end rewards for
loyalty and service be considered in
lieu of 13th month pay [Framanlis
Farms, Inc. v. MOLE, G.R. No. 72616-
17 (1989)].
c. Wage Difference: The difference
between the minimum wage and the
actual salary received by the Employee
cannot be deemed as his 13th month
pay as such difference is not equivalent
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to or of the same import as the said
benefit contemplated by law [JPL
Marketing Promotions v. CA, G.R. No.
151966 (2005)].
d. 14th Month Pay is not mandated:
Employers already paying their
employees a 13th month pay or its
equivalent are not covered by this
Decree [Kamaya Point Hotel v. NLRC,
G.R. No. 75289 (1989)].
e. Non-inclusion in regular wage: The
mandated 13th month pay need not be
credited as part of regular wage of
employees for purposes of determining
overtime and premium pays, fringe
benefits insurance fund, Social
Security, Medicare and private
retirement plans [Revised Rules].
Commissions vis-à-vis 13th Month Pay
The Rule on Productivity Bonuses.
“Productivity bonuses” have no clear direct or
necessary relation to the amount of work
actually done by each individual employee. If
an employer cannot be compelled to pay a
productivity bonus to its employees, it should
follow that such productivity bonus, when
given, should not be deemed to fall within the
“basic salary” of employees when the time
comes to compute their 13th month pay [Boie-
Takeda v. de la Serna, G.R. No. 92174 & G.R.
No. L-102552 (1993)].
The sales commission earned by the salesmen
who make or close a sale constitute part of the
compensation or remuneration paid to
salesmen for serving as salesmen, and hence
as part of the “wage” or salary of petitioner’s
salesmen. The sale commissions were an
integral part of the basic salary structure used
as the base amount for the computation of 13th
month pay [Phil. Duplicators v. NLRC, G.R.
No. 110068 (1995)].
CBA vis-à-vis 13th Month Pay
P.D. No. 851 is specific and mandatory.
However, if the employers actually grant such
13th month pay in the monetary benefits
provided for in the CBA, they could be
exempted from the operation of the decree. To
be exempted, there must be actual payment
[Marcopper Mining Corp. v. Ople, G.R. No. L-
51254 (1981)].
LABOR 1
Effect of Deficiency in 13th Month Pay
An employer who pays less than 1/12th of the
employees’ basic salary as their 13th month
pay is only required to pay the difference
[Revised Rules].
6. Service Charges
Coverage
Employers
This rule shall apply only to establishments
which collect service charges such as:
a. Hotels, restaurants, lodging houses,
night clubs, cocktail lounge, massage
clinics, bars, casinos and gambling
houses;
b. Similar enterprises including those
entities operating primarily as private
subsidiaries of the Government [Sec.
1, DO 206-19, IRR of RA11360]
Employees
Shall apply to ALL employees of covered
employers:
a. Regardless of their positions,
designations, or employment status,
and
b. Irrespective of the method by which
their wages are paid [Sec. 2 (a), DO
206-19, IRR of RA11360]
Exceptions
Managerial employees [Sec. 2 (c), DO 2016-
19, IRR of RA11360]
Distribution, amended by RA11360
Pursuant to the 2019 amendments to Art. 96,
all service charges collected by hotels, shall be
distributed completely and equally among the
covered workers except managerial
employees, based on actual hours or days of
work or service rendered, among the covered
employees, including those already receiving
the benefit of sharing in the service charges
[Sec. 3, DO 206-19, IRR of RA11360].
The shares shall be distributed to employees
not less than once every 2 weeks or twice a
month at intervals not exceeding 16 days [Sec.
4, DO 206-19, IRR of RA11360].
Notes:
a. The P2,000.00 salary ceiling for
entitlement thereto is no longer
applicable.
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b. [The employees’] right to their shares in
the service charges collected by [the
employer] is distinct and separate from
their right to ECOLA; gratification by
the [employer] of one does not result in
the satisfaction of the other [Philippine
Hoteliers, Inc., Dusit Hotel-Nikko v.
NUWHRAIN-APL-IUF-Dusit Hotel
Nikko Chapter, G.R. No. 181972
(2009)].
Service Charge Not Included in
Determining Compliance with Minimum
Wage
In the event that the minimum wage is
increased by law or wage order, service
charges paid to the covered employees shall
not be considered in determining the covered
establishment’s compliance with the increased
minimum wage [Sec. 5, DO 206-19, IRR of
RA11360].
In Relation to Collective Bargaining
Agreements and Employer-Employee
Agreements
Nothing in the Rules shall prevent the employer
and employee from entering into any
agreement with terms more favorable to the
employees than those granted therein, or be
used to diminish any benefit granted to the
employees under existing laws, agreement
AND voluntary employer practice [Sec. 6, Rule
VI, Book III, IRR].
The rule is without prejudice to existing, future
collective bargaining agreements [Sec. 7, Rule
VI, Book III, IRR].
Synthesis of the Rules
a. Service charges must be pooled;
b. Where a restaurant or similar
establishment does not collect service
charges but has a practice or policy of
monitoring and pooling tips given
voluntarily by its customers to its
employees, the pooled tips should be
monitored, accounted for and
distributed in the same manner as the
services charges [Handbook on
Workers’ Statutory Monetary Benefits,
2018];
c. The amount collected shall be
distributed completely and equally
among the covered workers;
d. It shall be given twice a month with
intervals of not more than 16 days;
LABOR 1
e. Payment of service charges will not be
considered in compliance with any
increase in the minimum wage by law
or wage order.
LABOR LAW
Note: Workers in registered barangay micro
business enterprises are only exempted from
the Minimum Wage Law, not from the Title on
Wages [RA 9178].

C. Wages 1. Wage vs. Salary

1. Payment of Wages Wages and salary are in essence synonymous

[Songco v. NLRC, G.R. No. L-50999 (1990)].
a. Definition, Components, and
There are slight differences:
Exclusions
Wage Salary
Definition
It is the remuneration or earnings, however
Paid for skilled or Paid to white collar
designated:
1. Capable of being expressed in terms of unskilled manual workers and denote
money; labor a higher grade of
2. Whether fixed or ascertained on a time, employment
task, piece, or commission basis, or
other method of calculating the same; Not subject to Subject to
3. Payable by an employer to an execution, execution,
employee under a written or unwritten garnishment or garnishment or
contract of employment – attachment except for attachment [Gaa v.
a. for work done or to be done; or
debts related to CA, G.R. No. L-
b. for services rendered or to be
rendered [Art. 97(f)] necessities [Art. 44169 (1985)]
1708]
Coverage/Exclusions
Wage includes the fair and reasonable value of
2. Bonus, 13th Month Pay
facilities furnished by the employer to the
employee [Art. 97(f)] while allowances are
Bonus
excluded from the basic salary or wage
General Rule: A bonus is an act of gratuity on
computation [Cebu Institute of Technology v.
the part of the employer, and is a management
Ople, G.R. No. L-58870 (1987)].
prerogative which cannot be forced upon the
employer [Kamaya Point Hotel v. NLRC, G.R.
Note: Fair and reasonable value shall not
No. 75289 (1989)].
include any profit to the employer, or to any
person affiliated with the employer [Art. 97(f)].
Exception: For a bonus to be enforceable:
1. It must have been promised by the
Applicability
employer and expressly agreed upon
The Labor Code Title on wages shall not apply
by the parties; or
to the following [Art. 98 and Sec. 3, Rule VII,
2. It must have had a fixed amount and
Book III, IRR]:
had been a long and regular practice
1. Farm tenancy or leasehold;
on the part of the employer [American
2. Household or domestic helpers,
Wire and Cable Union v. American
including family drivers and other
Wire, G.R. No. 155059 (2005)].
persons in the personal service of
another;
See also VI. D. Bonus for a more
3. Homeworkers engaged in needlework;
comprehensive discussion on company
4. Workers in registered cottage
practices
industries who actually work at home;
5. Workers in registered cooperatives
when so recommended by the Bureau
of Cooperative Development upon
approval of the Secretary of Labor.
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LABOR 1
13th Month Pay
[PD 851 (The 13th-Month Pay Law) and the
Revised Guidelines on the Implementation of
the 13th Month Pay Law]
Coverage
General Rule: ALL EMPLOYERS are required
to pay all their rank and file employees a 13th
month pay not later than Dec 24 of every year,
Provided that they have worked for at least one
(1) month during a calendar year
[Memorandum Order No. 28].
N.B.: The law distinguishes managerial
employees from rank-and-file employees;
hence, managerial employees are not legally
entitled to 13th month pay.
Exempted Employers:
a. Government, its political subdivisions,
including GOCCs except those
operating essentially as private
subsidiaries of the Government;
b. Employers already paying their
employees a 13th month pay or more
in a calendar year or its equivalent at
the time of this issuance;
c. Employers of household helpers and
persons in the personal service of
another in relation to such workers;
d. Employers of those who are paid on
purely commission, boundary or task
basis and those who are paid a fixed
amount for performing specific work,
irrespective of the time consumed in
the performance thereof (except those
workers who are paid on piece-rate
basis, in which case their employer
shall grant them 13th month pay).
Notes:
“Equivalent” of a 13th month pay includes:
a. Christmas bonus, mid-year bonus,
cash bonuses; and
b. Other payments amounting to not less
than 1/12 of the basic salary
But shall NOT INCLUDE cash and stock
dividends, cost of living allowances and all
other allowances regularly enjoyed by the
employee, as well as non-monetary benefits.
Workers paid on a piece-rate basis – 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. Their employer shall grant
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th
them 13 month pay.
Minimum Amount
It must not be less than 1/12 of the total basic
salary earned by an employee within a
calendar year [Sec. 4(a), Revised Guidelines
on the Implementation of 13th Month Pay Law].
Base Amount
General Rule: basic salary shall include:
a. Cost of living allowances (COLA)
integrated into the basic salary of a
covered employee pursuant to EO 178
b. All remunerations or earnings paid by
this employer for services rendered.
Excluding the allowances and monetary
benefits which are not considered or integrated
as part of the regular or basic salary, such as
the cash equivalent of:
1. Unused vacation and sick leave
credits,
2. Overtime,
3. Premium,
4. Night differential,
5. Holiday pay and, and
6. Cost-of-living allowances
Exception: A company practice favorable to
the employees had indeed been established if
for a considerable length of time, the employer
had freely, voluntarily and continuously
included in the computation of its employees'
thirteenth month pay, the payments for sick,
vacation and maternity leaves, premiums for
work done on rest days and special holidays,
and pay for regular holidays. Thus, the
payments made pursuant thereto, ripened into
benefits enjoyed by the employees, and any
benefit and supplement being enjoyed by them
cannot be reduced, diminished, discontinued
or eliminated by the employer [Davao Fruits
Corp. v. ALU, G.R. No. 85073 (1993)].
Time of Payment
General Rule: paid not later than Dec 24 of
each year.
Exception: ER may give to his employees half
(½) of the required 13th Month Pay before the
opening of the regular school year and the
other half on or before the 24th of December
every year.
LABOR 1
The frequency of payment of this monetary
benefit may be the subject of agreement
between the employer and the recognized CBA
of the employees [Sec. 4(b), Revised
Guidelines on the Implementation of 13th
Month Pay Law].
Rationale Behind 13th Month Pay
a. To further protect the level of real
wages from the ravage of world-wide
inflation;
b. There had been no increase in the legal
minimum wage rates since 1970;
c. The Christmas season is an opportune
time for society to show its concern for
the plight of the working masses so
they may properly celebrate Christmas
and New Year [Whereas clauses of PD
851].
13th Month Pay in Special Cases
a. Paid by Results: Employees who are
paid on piece work basis are, by law,
entitled to the 13th Month Pay [Revised
Guidelines on the Implementation of
the 13th Month Pay Law].
b. Fixed or Guaranteed Wage:
Employees who are paid a fixed or
guaranteed wage plus commission are
entitled to 13th month pay (not purely
commission); the basis for computation
shall be both their fixed or guaranteed
wage and commission [Revised
Guidelines].
c. Those with Multiple Employers:
Government Employees working part
time in a private enterprise, including
private educational institutions, as well
as Employees working in two or more
private firms, whether on full or part
time bases, are entitled to the
required 13th Month Pay from all
their private Employers regardless of
their total earnings from each or all their
employers [Revised Guidelines].
d. Private School Teachers: Private
school teachers, including faculty
members of universities and colleges,
are entitled to the required 13th month
pay, regardless of the number of
months they teach or are paid within a
year, if they have rendered service for
at least one (1) month within a year
[Revised Guidelines]. Overload pay is
NOT included in the computation for
13th month pay; overload is not
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overtime as it is additional work done
within the normal shift [Letran Calamba
Faculty v. NLRC, G.R. No. 156225
(2008)].
e. Resigned or Separated Employee:
An Employee who has resigned or
whose services were terminated at any
time before the time for payment of the
13th month pay is entitled to this
monetary benefit in proportion to the
length of time he worked during the
year, reckoned from the time he started
working during the calendar year up to
the time of his resignation or
termination from service [Revised
Guidelines].
f. Terminated Employees: The
payment of the 13th month pay may be
demanded by the employee upon the
cessation of employer-employee
relationship [Archilles Manufacturing
Corp. v. NLRC, G.R. No. 107225
(1995)].
Additional Rules
a. Commissions: If the commissions
may be properly considered part of the
basic salary, then they should be
INCLUDED. If they are not an integral
part of the basic salary, then they
should be EXCLUDED [Phil.
Duplicators Inc. v. NLRC, G.R. No.
110068 (1995)].
b. Substitute Payment not allowed:
Benefits in the form of food or free
electricity, assuming they were given,
were not a proper substitute for the
13th month pay required by law.
Neither may year-end rewards for
loyalty and service be considered in
lieu of 13th month pay [Framanlis
Farms, Inc. v. MOLE, G.R. No. 72616-
17 (1989)].
c. Wage Difference: The difference
between the minimum wage and the
actual salary received by the Employee
cannot be deemed as his 13th month
pay as such difference is not equivalent
to or of the same import as the said
benefit contemplated by law [JPL
Marketing Promotions v. CA, G.R. No.
151966 (2005)].
d. 14th Month Pay is not mandated:
Employers already paying their
employees a 13th month pay or its
equivalent are not covered by this
LABOR 1
Decree [Kamaya Point Hotel v. NLRC,
G.R. No. 75289 (1989)].
e. Non-inclusion in regular wage: The
mandated 13th month pay need not be
credited as part of regular wage of
employees for purposes of determining
overtime and premium pays, fringe
benefits insurance fund, Social
Security, Medicare and private
retirement plans [Revised Rules].
Commissions vis-à-vis 13th Month Pay
The Rule on Productivity Bonuses.
“Productivity bonuses” have no clear direct or
necessary relation to the amount of work
actually done by each individual employee. If
an employer cannot be compelled to pay a
productivity bonus to its employees, it should
follow that such productivity bonus, when
given, should not be deemed to fall within the
“basic salary” of employees when the time
comes to compute their 13th month pay [Boie-
Takeda v. de la Serna, G.R. No. 92174 & G.R.
No. L-102552 (1993)].
The sales commission earned by the salesmen
who make or close a sale constitute part of the
compensation or remuneration paid to
salesmen for serving as salesmen, and hence
as part of the “wage” or salary of petitioner’s
salesmen. The sale commissions were an
integral part of the basic salary structure used
as the base amount for the computation of 13th
month pay [Phil. Duplicators v. NLRC, G.R.
No. 110068 (1995)].
CBA vis-à-vis 13th Month Pay
P.D. No. 851 is specific and mandatory.
However, if the employers actually grant such
13th month pay in the monetary benefits
provided for in the CBA, they could be
exempted from the operation of the decree. To
be exempted, there must be actual payment
[Marcopper Mining Corp. v. Ople, G.R. No. L-
51254 (1981)].
Effect of Deficiency in 13th Month Pay
An employer who pays less than 1/12th of the
employees’ basic salary as their 13th month
pay is only required to pay the difference
[Revised Rules].
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b. Principles
1. No Work, No Pay
General Rule: If there is no work performed by
the employee, there can be no wage or pay.
Exception: Unless the laborer was able,
willing and ready to work but was prevented by
management or was illegally locked out,
suspended or dismissed [Azucena, citing
Philippine Airlines v. NLRC, G.R. No. 55159
(1989)].
2. Equal Pay for Equal Work
Employees working in the Philippines, if they
are performing similar functions and
responsibilities under similar working
conditions, should be paid equally. If an
employer accords employees the same
position and rank, the presumption is that these
employees perform equal work [International
School Alliance of Educators v. Hon.
Quisumbing, G.R. No. 128845 (2000)].
3. Fair Wage for Fair Work
General Rule: The age-old rule governing the
relation between labor and capital or
management and employee is that a "fair day's
wage for a fair day's labor." It is hardly fair or
just for an employee or laborer to fight or litigate
against his employer on the employer's time
[Sugue v. Triumph International, G.R. No.
164804 (2009)].
Exception: When the laborer was able,
willing and ready to work but was illegally
locked out, suspended or dismissed, or
otherwise illegally prevented from working
[Sugue v Triumph International, supra].
c. Form of Payment [Art. 102; Secs. 1-
2, Rule VIII, Book III, IRR]
General Rule: Legal Tender Only
Exception: Check/Money Order if customary
OR necessary because of special
circumstances, as specified by the Secretary of
Labor or the CBA.
LABOR 1 LABOR LAW
Not allowed: d. Time of payment [Art. 103; Sec. 3,
1. Promissory Notes Rule VIII, Book III, IRR]
2. Vouchers
3. Tokens Time of Payment
4. Tickets
5. Chits; or At least once every 2
6. Any other form alleged to represent a Frequency
legal tender, even when expressly weeks or 2x per month
requested by the employee [Art. 102].
Must not be more than
Intervals
When Payment Through Check, Postal 16 days
Orders or Money Orders is Allowed:
1. When payment is customary (on the Valid excuse for
date of Code effectivity); delayed payment
Force Majeure or
2. Where it is so stipulated in a collective
Circumstances
agreement; BUT ER must pay
3. Where all of the following conditions Beyond ER’s
immediately after
are met: Control
cessation and not less
a. Bank/Facility for encashment is than once a month
within 1-km radius from the
workplace
Payments should be
b. ER did not receive any pecuniary
benefit because of said made with intervals not
arrangement more than 16 days, in
Tasks Which
c. EEs are given reasonable time proportion to work
Cannot Be
during banking hours to withdraw completed
Completed in 2
their wages (compensable hours, if
during working hours) Weeks
Final settlement is
d. The payment by check is with the made upon completion
written consent of the EEs
of the work.
concerned, in the absence of a
CBA [Sec. 2, Rule VIII]
e. Place of Payment [Art. 104; Sec. 4,
Rule VIII, Book III, IRR]

General Rule: Shall be made at or near the

place of undertaking (workplace).

Exceptions:
1. Deterioration of peace and order
conditions, or by reason of actual or
impending emergencies (fire, flood,
epidemic);
2. Free transportation to the employees
back and forth;
3. Under any other analogous
circumstances provided, that the time
spent by the employees in collecting
their wages shall be considered as
compensable hours worked.

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LABOR 1
No payment in any bar, night or day club,
drinking establishment, massage clinic, dance
hall, or other similar places or in places where
games are played with stakes of money or
things representing money, except in the case
of persons employees in such places.
Condition for ATM Payment [Labor
Advisory on Payment of Salaries thru
ATM (1996)]
1. ATM system of payment is with the
written consent of the EEs.
2. EEs are given reasonable time to
withdraw their wages from the banking
facility (compensable hours, if during
work hours).
3. System shall allow workers to receive
their wages within the period/frequency
provided by law.
4. There is a bank/ATM facility within 1km
radius from the place of work.
5. Upon request of the concerned EEs,
the ER shall issue a record of payment
of wages, benefits and deductions for a
particular period.
6. There shall be no additional expenses
and no diminution of benefits and
privileges.
7. The ER shall assume responsibility in
case the wage protection provisions of
law and regulations are not complied
with under the arrangement.
f. Person to Pay [Sec. 5, Rule VIII, Book
III, IRR]
General Rule: Directly to EE
Exceptions:
1. Member of EE’s family → if ER is
authorized in writing by the EE.
2. A 3rd person → if authorized by law
(e.g. insurance companies for
premiums, union dues where the right
to check-off has been recognized by
ER in accordance with a CBA or
authorized in writing by EE concerned).
3. Heirs → in case of death of EE, without
necessity of intestate proceedings.
a. If heirs are of age → they shall
execute an affidavit attesting to
their relationship to the deceased
and the fact that they are his heirs
to the exclusion of others.
b. If any of the heirs is a minor → such
affidavit shall be executed on his
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behalf by his natural guardian or
next of kin.
When the employer engages the services of an
organized group of workers, payment to their
leader cannot be considered a violation of the
rule on direct payment [Bermiso v. Escano,
G.R. No. L-11606 (1959)].
2. Prohibitions Regarding Wages
a. Against interference in disposal of
wages [Art. 112]
Interference with disposal of wages also
includes forcing, compelling, or obliging
employees to purchase merchandise,
commodities or other property from any other
person.
b. Against Wage Deduction [Art. 113]
General Rule: No employer, in his own behalf
or in behalf of any person, shall make any
deduction from the wages of his employees.
Exceptions:
1. where the worker is insured with his
consent, and the deduction is to
recompense the employer for the
premium paid
2. for union dues
3. where the employer is authorized by
law or regulations issued by SOLE
c. Against Requirements to Make
Deposits for Loss or Damage [Arts.
114-115]
General Rule: 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.
Exception: When the employer is engaged in
a business where the practice of making
deductions or deposits is a recognized one, or
is necessary or desirable as determined by
SOLE.
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
LABOR 1
heard thereon, and his responsibility has been
clearly shown [Art. 115].
d. Against Withholding of Wage [Art.
116]
It is unlawful for any person 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 any other means
without his consent.
e. Against Deduction to Ensure
Employment [Art. 117]
It is unlawful to make any deduction from the
wages of any employee for the benefit of the
employer as consideration of promise for
employment or retention.
f. Against Retaliatory Measures [Art.
118]
It is unlawful for an employer to discriminate
(e.g. to refuse to pay or reduce the wages and
benefits, discharge) against any employee who
has filed any complaint or instituted any
proceeding under Title II of the LC.
g. Against False Reporting [Art. 119]
It is unlawful for any person to make a
statement, report or record filed or kept
pursuant to the LC knowing it to be false in any
material respect.
3. Facilities vs. Supplements
a. Definition
Facilities – includes articles or services for the
benefit of the employee or his family;
EXCLUDES tools of the trade or articles or
service primarily for the benefit of the ER [Sec.
5, Rule 7-A, Book III, IRR]
Supplements – refers to extra remuneration or
special benefits or articles or services or tools
of the trade given to or received by laborers
over and above their ordinary earning or wages
[Sec. 5, Rule 7-A, Book III, IRR]
Criterion: In determining whether a privilege is
a facility, the criterion is not so much its kind
but the PURPOSE for which it is given [Millares
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v. NLRC & PICOP, G.R. No. 122827 (1999)].
Requirements for Deducting Value of
Facilities
Mere availment is not sufficient to allow
deductions from employees’ wages. Before the
value of facilities can be deducted from the
employees’ wages, the following requisites
must all be attendant:
a. Proof must be shown that such
facilities are customarily furnished by
the trade;
b. The provision of deductible facilities
must be voluntarily accepted in
writing by the employee; and
c. Facilities must be charged at
reasonable value [SLL International
Cable Specialists v. NLRC, G.R. No.
172161 (2011)].
“Customary” means long-established and
constant practice connoting regularity [Millares
v. NLRC & PICOP, G.R. No. 122827 (1999)].
b. Beneficiaries
Facilities – for the benefit of the employee and
his family, for their existence and subsistence
[Sec. 5, Rule 7-A, Book III, IRR]
Supplements – for the benefit or convenience
of the employer
Purpose Test: Under this test, if a benefit or
privilege granted to the employee is clearly for
the employer’s convenience, it will NOT be
considered as a facility but a supplement.
If it is primarily for the employee’s gain, then
the benefit is a facility; if its provision is mainly
for the employer’s advantage, then it is a
supplement [Our Haus Realty Development
Corp. v. Parian; G.R. No. 204651 (2014)].
c. Computation
Value of Facilities = Cost of Operation and
maintenance + Adequate depreciation +
reasonable allowance (not more than 5.5%
interest on the depreciated amount of capital
invested by the employer)
If the fair rental value is lower than the
computed value, fair rental value will be used
[Rule VII-A, Sec. 6].
LABOR 1
4. Minimum Wage
a. Definition
“Statutory minimum wage” is the lowest
wage fixed by law that an employer can pay his
workers [Rules Implementing RA 6727].
Payment of Statutory Minimum Wage is
Mandatory
Lack of funds is not a valid defense from paying
the statutory minimum wage, which is a
mandatory statutory obligation. To uphold such
defense of lack of available funds would render
the Minimum Wage Law futile and defeat its
purpose [De Racho v. Municipality of Ilagan,
G.R. No. L-23542 (1968)].
b. Nature
1. Payment by Hours Worked
The minimum wage rates for agricultural and
non-agricultural employees and workers in
each and every region of the country shall be
those prescribed by the Regional Tripartite
Wages and Productivity Boards [Art. 99].
See III. B. 2. Hours of work.
2. Payment by Results or Output
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 employer’s organizations [Art. 101].
Basis of Output Pay Rate
a. On petition of any interested party, or
upon its initiative, the Department of
Labor shall use all available devices,
including the use of time and motion
studies and consultation with
representatives of employers’ and
workers’ organizations, to determine
whether the employees in any industry
or enterprise are being compensated in
accordance with the minimum wage
requirements of this Rule.
b. The basis for the establishment of rates
for piece, output, or contract work shall
be the performance of an ordinary
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worker of minimum skill or ability.
c. An ordinary worker of minimum skill or
ability is the average worker of the
lowest producing group representing
50% of the total number of employees
engaged in similar employment in a
particular establishment, excluding
learners, apprentices and handicapped
workers employed therein.
d. Where the output rates established by
the employer do not conform with the
standards prescribed herein, or with
the rates prescribed by the DOLE in an
appropriate order, the employees shall
be entitled to the difference between
the amount to which they are entitled to
receive under such prescribed
standards or rates and that actually
paid them by the employer [Sec. 8,
Rule VII-A, Book III, IRR].
From the above rules, piece rate workers may
be categorized into two:
1. Those who are paid piece rates which
are prescribed in Piece Rate Orders
issued by DOLE.
Wages or earnings in this category are
determined by simply multiplying the
number of pieces produced by the rate
per piece [Azucena].
These workers are not covered by the
Rule on Hours of Work which provides
for premium and overtime payments.
See III. A. 1. a. Principles in
determining hours worked and
employees exempted or not covered
for more details.
2. Those who are paid output rates which
are prescribed by the employer and are
not yet approved by the DOLE.
The number of pieces produced is multiplied by
the rate per piece as determined by the
employer.
1. If the resulting amount is equivalent to
or more than the applicable statutory
minimum daily rate in relation to the
number of hours worked, the worker
will receive that amount.
2. If the amount is less than the applicable
legal rate, it is possible that the rates
per piece are not in accordance with
LABOR 1
the standards prescribed by the rules
implementing the Labor Code. The
employer is thus required by law to pay
the difference between the resulting
amount and the applicable legal
minimum wage rate [Azucena].
5. Wage Distortion
a. Wage Order
A Wage Order is issued by the Regional Board
based on the standards for minimum wage
fixing under Art. 124, upon investigating and
studying the pertinent facts whenever
conditions in the region so warrant [Art. 123].
It establishes the minimum wage rates to be
paid by ERs in the region, which shall in no
case be lower than the applicable statutory
minimum wage rates [NWPC Rules of
Procedure on Minimum Wage Fixing].
Standards/Criteria in Wage Fixing
1. The demand for living wages;
2. Wage adjustment vis-a-vis the
consumer price index;
3. The cost of living and changes or
increases therein;
4. The needs of workers and their
families;
5. The need to induce industries to invest
in the countryside;
6. Improvements in standards of living;
7. The prevailing wage levels;
8. Fair return of the capital invested and
capacity to pay of employers;
9. Effects on employment generation and
family income; and
10. The equitable distribution of income
and wealth along the imperatives of
economic and social development [Art.
124].
Wage Order Effectivity: After 15 days from its
complete publication in at least one newspaper
of general circulation [Art. 123].
Note: Public hearing and publication are
mandatory [Cagayan Sugar Milling Co. v. Sec.
of Labor, G.R. No. 128399 (1998)].
Frequency: A WO issued by the Board may
not be disturbed for a period of 12 months from
its effectivity and no petition for wage increase
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shall be entertained during said period [Rule
IV, Sec. 4, Revised rules of Procedure on
Minimum Wage Fixing].
Exceptions:
1. When Congress itself issues a law
increasing wages.
2. Supervening conditions (i.e.
extraordinary increases in prices of
petroleum products and basic
goods/services.
Appeal: Any party aggrieved by the Wage
Order issued by the Regional Board may
appeal such order to the Commission within
ten (10) calendar days from the publication of
such order. It shall be mandatory for the
Commission to decide such appeal within sixty
(60) calendar days from the filing thereof [Art.
123].
Effect of Appeal
General Rule: Does not operate to stay the
order.
Exception: Party appealing such order shall
file with the Commission an undertaking with a
surety/sureties (surety bond) satisfactory to the
Commission for payment to employees
affected by the order of the corresponding
increase in the event such order is affirmed
[Art. 123].
Methods of Fixing
a. Floor Wage Method- fixing a
determinate amount to be added to the
prevailing statutory minimum wage
rates (e.g. setting P25 increase for min.
wage rates).
b. Salary-Ceiling Method- Wage
adjustment to be applied to EEs
receiving a certain denominated salary
or workers being paid more than
existing min. wage (e.g. WO granting
P25 increase to those earning up to
P250).
LABOR 1 LABOR LAW
Methods of Fixing not by management prerogative [Bankards
Employees’ Union v. NLRC, G.R. No. 140689
Floor Wage Salary Ceiling (2004)].

Adds to All wages How to Resolve Wage Distortion [Art. 124]

previous under a certain
What It
minimum wage
Does
wage increases to
that wage
P456 + P100 All wages
= P556 under P456
Example must be
increased to
P556
b. Wage Distortion
Wage distortion/ rectification is a situation
where an increase in prescribed wage rates
results in the elimination or 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 skills, length of
service, or other logical bases of differentiation
[Art. 124].
Elements of Wage Distortion
1. 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 (must be caused by a
wage order) [Philippine Geothermal
Inc. v. Chevron, G.R. No. 190187
(2018)];
3. The elimination of the distinction
between the two levels; and
4. The existence of the distortion in the
same region of the country
[Prubankers Assn. v. Prudential Bank
and Co., G.R. No. 131247 (1999)].
The implementation of wage orders in one
region but not in others does not in itself
necessarily result in wage distortion
[Prubankers Assn. v. Prudential Bank and Co.,
G.R. No. 131247 (1999)].
Organized Establishment
a. Employer and the union shall negotiate
to correct the distortions.
b. Disputes shall be resolved through the
grievance procedure.
c. If still unresolved, voluntary arbitration.
Grievance Procedure (under the CBA) → if
unresolved, VOLUNTARY arbitration
Unorganized Establishment
a. ERs and EEs shall endeavor to correct
such distortions
b. Disputes shall be settled through the
National Conciliation and Mediation
Board
c. If still unresolved after 10 calendar
days of conciliation, it shall be referred
to the appropriate branch of the NLRC
– compulsory arbitration
Both the employer and employee cannot
use economic weapons.
d. Employer cannot declare a lock-out;
Employee cannot declare a strike
because the law has provided for a
procedure for settling
e. The salary or wage differential does not
need to be maintained [National
Federation of Labor v. NLRC, G.R. No.
103586 (1994)]
National Conciliation and Mediation Board → if
unresolved, COMPULSORY arbitration by the
NLRC
CBA vis-à-vis Wage Orders – CBA
Creditability
In determining an employee’s regular wage,
the pertinent stipulations in the CBA are
controlling, provided the result is not less than
the statutory requirement [Philippine National
Bank v. PEMA, G.R. No. L-30279 (1982)].
Note: The manner of resolving wage distortion
is largely based on the applicable wage order.
The current one for NCR, WO 20, refers to the
procedure in Art. 124 of the Labor Code.

Wage distortion can only exist where the wage

adjustment is brought about by a wage order,
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6. Non-Diminution of Benefits
General Rule: There is a prohibition against
elimination or diminution of benefits [Art. 100].
No wage order issued by any regional board
shall provide for wage rates lower than the
statutory minimum wage rates prescribed by
Congress [Art. 127, as amended by RA 6727].
Requisites
If the following are met, then the employer
cannot remove or reduce benefits [Vergara Jr.
v. Coca-Cola Bottlers Phils, G.R. No. 176985
(2013)]:
a. Ripened company policy – Benefit is
founded on a policy which has ripened
into a practice over a long period
b. Practice is consistent and deliberate
c. Not due to error in the construction or
application of a doubtful or difficult
question of law [Globe Mackay Cable
v. NLRC, G.R. No. L-74156 (1988)]
d. The diminution or discontinuance is
done unilaterally by the employer
When not applicable: At least one of the
requisites is absent.
a. Mistake in the application of the law
[Globe Mackay Cable v. NLRC, supra]
b. Negotiated benefits [Azucena]
c. Reclassification of Positions – e.g. loss
of some benefits by promotion
d. Contingent or Conditional Benefits –
the rule does not apply to a benefit
whose grant depends on the existence
of certain conditions, so that the benefit
is not demandable if those
preconditions are absent
Benefits initiated through negotiation between
Employee and Employer, e.g. CBA, can only
be eliminated or diminished bilaterally.
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D. Leaves
1. Service Incentive Leave
Coverage
Every employee who has rendered at least one
year of service shall be entitled to a yearly
service incentive leave of five days with pay
[Art. 95(a)].
Service Incentive Leave DOES NOT apply to
the following employees:
a. Those of the government and any of its
political subdivisions, including
GOCCs;
b. Domestic helpers and persons in the
personal service of another;
c. Managerial employees as defined in
Book III of this Code;
d. Field personnel and other employees
whose performance is unsupervised by
the employer including those who are
engaged on task or contract basis,
purely commission basis, or those who
are paid a fixed amount for performing
work irrespective of the time consumed
in the performance thereof;
e. Those who are already enjoying the
benefit herein provided;
f. Those enjoying vacation leave with pay
of at least 5 days;
g. Those employed in establishments
regularly employing less than 10
employees [Sec. 1, Rule V, Book III,
IRR].
Piece-rate employees are entitled to service
incentive leave pay provided that they are
supervised. If they are unsupervised, they are
not entitled to SIL [Labor Congress of the Phils.
v. NLRC, G.R. No. 123938 (1998)].
Teachers of private schools on contract basis
are entitled to service incentive leave [Cebu
Institute of Technology v. Ople, G.R. No. L-
58870 (1987)].
The law grants an annual SIL of five days to
domestic workers, but their SIL shall not be
converted to cash or carried over to
succeeding years [Sec. 29, RA 10361].
LABOR 1
Meaning of “1 year of Service”
General Rule: "At least one year service" shall
mean service for NOT LESS than 12 months,
whether continuous or broken, reckoned from
the date the employee started working,
including authorized absences and paid
regular holidays.
Exception: Service for LESS than 12 months
is counted as “at least one year service” when:
a. The working days of the establishment,
as a matter of practice or policy, is less
than 12 months; or
b. The employment contract provides
working days that are less than 12
months [Sec. 3, Rule V, Book III, IRR].
Arbitration or Administrative Action
The grant of benefit IN EXCESS of that
provided herein shall not be made a subject of
arbitration or any court or administrative action
[Art. 95 (c)].
Commutable Nature of Benefit
The service incentive leave shall be
commutable to its money equivalent if not used
or exhausted at the end of the year [Sec. 5,
Rule V, Book III, IRR].
When Entitled EE’s Cause of Action
Accrues
a. If the employee did not make use of
said leave credits but instead chose
to avail of its commutation into
money: The cause of action to claim
his SIL pay accrues from the moment
the employer refuses to remunerate its
monetary equivalent.
b. If the employee wishes to
accumulate his leave credits and
opts for its commutation upon his
resignation or separation from
employment: The cause of action to
claim the whole amount of his
accumulated SIL shall arise when the
employer fails to pay such amount at
the time of his resignation or separation
from employment [Auto Bus Transport
v. NLRC, G.R. No. 156367 (2005)].
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2. Expanded Maternity Leave (R.A.
No. 11210)
Expanded Maternity Leave – Maternity leave
of 105 days with full pay, with an option to
extend for an additional 30 days without pay
[Sec. 3, RA 11210].
Coverage
Every female worker in government and the
private sector, including those in the informal
economy, regardless of civil status or the
legitimacy of her child, is entitled to maternity
leave benefits.
This is applicable to pregnancy and
miscarriage, or emergency termination of
pregnancy, regardless of frequency [Sec. 3,
RA 11210].
Maternity Leave for Female Workers in
Private Sector, Requisites:
a. Contribution: The female worker must
have paid at least 3 monthly contributions
in the 12-month period immediately
preceding the semester of her childbirth,
miscarriage, or emergency termination of
pregnancy.
In determining the female member’s
entitlement to the benefit, the SSS shall
consider only those contributions paid
prior to the semester of contingency; and
b. Notice: The female worker shall have
notified her employer of her pregnancy
and the probable date of her childbirth,
which notice shall be transmitted to the
SSS in accordance with the rules and
regulations it may provide [Sec. 1, Rule VI,
IRR of RA11210].
Maternity Leave Benefit After Termination
of Employment Possible
General Rule: Maternity leave with full pay
shall be granted even if the childbirth,
miscarriage, or emergency termination of
pregnancy occurs not more than 15 calendar
days after the termination of an employee’s
service.
Exception: When the employment of the
pregnant woman worker has been terminated
without just cause, the employer must pay her
the full amount equivalent to her salary for 105
LABOR 1
days for childbirth and 60 days for miscarriage
and emergency termination of pregnancy
based on her full pay, in addition to the other
applicable daily cash maternity benefits that
she should have received had her employment
not been illegally terminated [Sec. 5, Rule IV,
IRR of RA 11210].
Benefit Received
A daily maternity benefit equivalent to 100% of
her average daily salary credit for:
a. 105 days in cases of live childbirth
b. 60 days in cases of miscarriage or
emergency termination of pregnancy.
The maternity leave can be credited as
combinations of prenatal and postnatal leave
as long as it does not exceed 105 days or 60
days as the case may be. In no case shall
postnatal care be less than 60 days [Sec. 2,
Rule IV, IRR of RA 11210].
In case the employee qualifies as a solo parent
(See D. 4. on Parental Leave for Solo Parents
below), the employee shall be paid an
additional maternity benefit of 15 days [Sec. 5
(a), RA 11210].
Extended Maternity Leave Option,
Requisite Notice
In cases of live childbirth, an additional
maternity leave of 30 days, without pay, can be
availed of, at the option of the female worker,
provided that the employer shall be given
notice.
Due notice must be in writing must be given at
least 45 days before the end of the female
worker’s maternity leave.
Exception: No prior notice shall be necessary
in the event of a medical emergency, but
subsequent notice shall be given to the
employer.
The period of extended maternity leave without
pay shall not be considered a gap in the service
[Sec. 3, Rule IV, IRR of RA 11210].
Allocation of Maternity Leave Credits
A female worker entitled to maternity leave
benefits may, at her option, allocate up to 7
days of said benefits to the child’s father,
whether or not the father is married to the
mother.
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The allocated benefit granted to the child’s
father is over and above the paternity benefits
provided under RA 8187 (Paternity Leave Act).
In case of death, absence, or incapacity of the
child’s father, the female worker may allocate
to an alternate caregiver who may be:
a. A relative within the 4th degree of
consanguinity; or
b. The current partner, regardless of sexual
orientation or gender identity, of the
female worker sharing the same
household.
The option to allocate maternity leave credits
shall not be applicable in cases of miscarriage
or emergency termination of pregnancy [Sec.
1, Rule VIII, IRR of RA 11210].
Death or Permanent Incapacity
If the female worker dies or becomes
permanently incapacitated, the balance of her
maternity leave benefits shall accrue to the
child’s father or to a qualified alternate
caregiver subject to the following conditions:
a. That the maternity leave benefits have not
yet been commuted to cash, if applicable;
and
b. That a certified true copy of the death
certificate or medical certificate or abstract
is provided to the employers of both the
female worker and the child’s father or
alternate caregiver.
In case the maternity leave benefits have
already been paid to the female worker in full,
the child’s father or alternate caregiver shall be
entitled to enjoy the remaining unexpired leave
credits of the female worker, if any.
Provided, That such leave without pay shall not
be considered a gap in the service of the child’s
father or alternate caregiver [Sec. 4, Rule VIII,
IRR of RA 11210].
Other Conditions
a. Employer shall advance the full payment
subject to reimbursement by the SSS
within 30 days from filing of leave
application [Sec. 3, Rule VI, IRR of RA
11210].
b. SSS shall immediately reimburse the
employer the maternity benefits advanced
to the employed female member, only to
the extent of 100% of her average daily
salary credit for 105 days, 120 days or 60
LABOR 1
days, as the case may be, upon receipt of
satisfactory and legal proof of such
payment [Sec. 4, Rule VI, IRR of RA
11210].
c. Availment shall be a bar to the recovery of
sickness benefits provided under RA 1161
(Social Security Law) for the same period
for which daily maternity benefits have
been received [Sec. 6, Rule VI, RA
11210].
d. Sanction: That if an employee should
give birth or suffer miscarriage or
emergency termination of pregnancy:
1. Without the required contributions
having been remitted for her by her
employer to the SSS, or
2. Without the latter having been
previously notified by the ER of time of
the pregnancy, the employer shall pay
to the SSS damages equivalent to the
benefits which said employee would
otherwise have been entitled to [Sec.
5, RA 11210].
3. Paternity Leave (R.A. No. 8187)
Paternity Leave – leave of 7 calendar days
with full pay for every married male employee
in the private and public sectors.
Coverage and Purpose
Paternity leave is granted to all married male
employees in the private and public sectors,
regardless of their employment status (e.g.
probationary, regular, contractual, project
basis).
The purpose of this benefit is to allow the
husband to lend support to his wife during her
period of recovery and/or in nursing her
newborn child [Sec. 3, RA 8187].
Benefit
It shall be for 7 calendar days, with full pay,
consisting of basic salary and mandatory
allowances fixed by the Regional Wage Board,
if any, provided that his pay shall not be less
than the mandated minimum wage [Sec. 2, RA
8187].
It shall apply to the first 4 deliveries of the
employee’s lawful wife with whom he is
cohabiting.
Cohabiting means the obligation of the
husband and wife to live together [Sec. 1, IRR,
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RA 8187]. If the spouses are not physically
living together because of the workstation or
occupation, the male employee is still entitled
to the paternity leave benefit.
Usage of the Benefit
Usage of the leave shall be after the delivery,
without prejudice to an employer’s policy of
allowing the employee to avail of the benefit
before or during the delivery, provided that the
total number of days shall not be more than 7
days for each covered delivery [Sec. 5, IRR,
RA 8187].
Conditions for Entitlement [Sec. 3, IRR, RA
8187]
a. He is married;
b. He is an employee at the time of the
delivery of his child;
c. He is cohabiting with his spouse at the
time that she gives birth or suffers a
miscarriage;
d. He has applied for paternity leave with his
ER within a reasonable period of time from
the expected date of delivery by his
pregnant spouse, or within such period as
may be provided by company rules and
regulations, or by CBA; and
e. His wife has given birth or suffered a
miscarriage.
Application for Paternity Leave
See d. under conditions for entitlement.
In case of miscarriage, prior application for
paternity leave shall not be required [Sec. 4,
IRR, RA 8187].
Non-Conversion to Cash
In the event that the paternity leave is not
availed of, it shall not be convertible to cash
and shall not be cumulative [Sec. 7, IRR, RA
8187].
Crediting of Existing Benefits
a. If the existing paternity leave benefit under
the CBA, contract, or company policy is
greater than 7 calendar days as provided
for in RA 8187, the greater benefit shall
prevail.
b. If the existing paternity leave benefit is
less than that provided in RA 8187, the ER
shall adjust the existing benefit to cover
the difference [Sec. 9, IRR, RA 8187].
LABOR 1
Where a company policy, contract, or CBA
provides for an emergency or contingency
leave without specific provisions on paternity
leave, the ER shall grant to the employee 7
calendar days of paternity leave [Sec. 9, IRR,
RA 8187].
4. Parental Leave for Solo Parents
(R.A. No. 8972)
Parental leave for solo parents – Leave
benefits granted to a solo parent to enable
him/her to perform parental duties and
responsibilities where physical presence is
required [Sec. 3 (d), RA 8972].
Coverage
Any solo parent or individual who is left alone
with the responsibility of parenthood due to:
a. Giving birth as a result of rape or and other
crimes against chastity even without a
final conviction of the offender: Provided,
That the mother keeps and raises the
child;
b. Death of spouse;
c. Spouse is detained or is serving sentence
for a criminal conviction for at least one (1)
year;
d. Physical and/or mental incapacity of
spouse as certified by a public medical
practitioner;
e. Legal separation or de facto separation
from spouse for at least one (1) year:
Provided, that he/she is entrusted with the
custody of the children;
f. Declaration of nullity or annulment of
marriage as decreed by a court or by a
church: Provided, that he/she is entrusted
with the custody of the children;
g. Abandonment of spouse for at least one
(1) year;
h. Unmarried father/mother who has
preferred to keep and rear his/her
child/children, instead of having others
care for them or give them up to a welfare
institution;
i. Any other person who solely provides
parental care and support to a child or
children: Provided, that he/she is duly
licensed as a foster parent by the
Department of Social Welfare and
Development (DSWD) or duly appointed
legal guardian by the court; and
j. Any family member who assumes the
responsibility of head of family as a result
of the death, abandonment,
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disappearance, or prolonged absence of
the parents or solo parent for at least one
(1) year [Sec. 3 (a), RA 8972].
Conditions for Entitlement
A solo parent employee shall be entitled to the
parental leave under the following conditions:
a. He/she has rendered at least one (1) year
of service, whether continuous or broken;
b. He/she has notified his/her employer that
he/she will avail himself/herself of it, within
a reasonable period of time; and
c. He/she has presented to his/her employer
a Solo Parent Identification Card, which
may be obtained from the DSWD office of
the city or municipality where he/she
resides [Sec. 19, Art. V, IRR, RA 8972].
Availment
The parental leave is in addition to leave
privileges under existing laws with full pay,
consisting of basic salary and mandatory
allowances. It shall not be more than seven (7)
working days every year [Sec. 8, RA 8972].
Grant of Flexible Work Schedule
The employer shall provide for a flexible
working schedule for solo parents: Provided,
That the same shall not affect individual and
company productivity: Provided, further, That
any employer may request exemption from the
above requirements from the DOLE on certain
meritorious grounds [Sec. 6, RA 8972].
Protection Against Work Discrimination
No employer shall discriminate against any
solo parent employee with respect to terms and
conditions of employment on account of his/her
status [Sec. 7, RA 8972].
5. Leave Benefits for Women Workers
a. Gynecological Leave (R.A. No. 9710)
Gynecological Leave - A female employee’s
leave entitlement of two (2) months with full pay
from her employer based on her gross monthly
compensation following surgery caused by
gynecological disorders, provided that she has
rendered continuous aggregate employment
service of at least six (6) months for the last 12
months.
LABOR 1
Gynecological Disorders
Disorders that would require surgical
procedures such as, but not limited to:
1. Dilatation and curettage;
2. 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;
3. Hysterectomy, ovariectomy, and
mastectomy.
Gross Monthly Compensation
The monthly basic pay plus mandatory
allowances fixed by the regional wage boards
[Sec. 7, Rule II, IRR, RA 9710].
Basic Requirement
The woman employee should have been with
the company for 12 months prior to surgery. An
aggregate service of at least six (6) months
within the said 12-month period is sufficient to
entitle her to avail of the special leave benefit.
Employment service includes absences with
pay such as use of other mandated leaves,
company-granted leaves and maternity leaves.
Competent Physician
A medical doctor preferably specializing in
gynecological disorders or is in the position to
determine the period of recuperation of the
woman employee [Sec. 1, D.O. No. 112, as
amended (Guidelines Governing the
Implementation of the Special Leave Benefits
for Women Employees in the Private Sector)].
Conditions for Entitlement
Any female employee, regardless of age and
civil status, shall be entitled to a special leave
benefit, provided she has complied with the
following conditions:
1. She has rendered at least 6 months
continuous aggregate employment
service for the last 12 months prior to
surgery;
2. She has filed an application for special
leave;
3. She has undergone surgery due to
gynecological disorders as certified by a
competent physician [Sec. 2, D.O. No.
112].
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Application for Special Leave Before
Surgery
The employee shall file her application for
leave with her employer within a reasonable
period of time from the expected date of
surgery, or within such period as may be
provided by company rules and regulations or
by CBA.
Application for Special Leave After
Surgery
Prior application for leave shall not be
necessary in cases requiring emergency
surgical procedure, provided that the employer
shall be notified verbally or in written form
within a reasonable period of time and provided
further that after the surgery or appropriate
recuperating period, the female employee shall
immediately file her application using the
prescribed form [Sec. 3, D.O. No. 112].
Period of Entitlement
The 2 months special leave is the maximum
period of leave with pay that a woman
employee may avail of under RA 9710.
For purposes of determining the period of leave
with pay that will be allowed to a female
employee, the certification of a competent
physician as to the required period of
recuperation shall be controlling [Sec. 4, D.O.
No. 112, as amended].
Availment
The special leave shall be granted to the
qualified employee after she has undergone
surgery [Sec. 5, D.O. No. 112, as amended].
Frequency of Availment
A woman employee can avail of the SLB for
every instance of surgery due to gynecological
disorder for a maximum total period of 2
months per year [Sec. 6, D.O. No. 112, as
amended].
Special Leave Benefit vis-à-vis SSS
Sickness Benefit
The SLB is different from the SSS sickness
benefit. The former is granted by the employer
in accordance with RA 9710.
It is granted to a woman employee who has
undergone surgery due to gynecological
disorder. The SSS sickness benefit, on the
other hand, is administered and given by the
LABOR 1
SSS in accordance with RA 1161 as amended
by RA 8282 [Sec. 7, D.O. No. 112, as
amended].
b. Battered Woman Leave (R.A. No.
9262)
Victims of any of the acts covered by VAWC
shall be entitled to take a paid leave of absence
up to ten (10) days in addition to other paid
leaves under the Labor Code and Civil Service
Rules and Regulations, extendible when the
necessity arises as specified in the protection
order [Sec. 43, RA 9262].
Acts Covered by VAWC
1. “Physical violence” - refers to acts that
include bodily or physical harm.
2. “Sexual violence” - refers to an act which
is sexual in nature, committed against a
woman or her child.
3. “Psychological violence” - acts or
omissions causing or likely to cause
mental or emotional suffering of the victim.
4. “Economic abuse” - acts that make or
attempt to make a woman financially
dependent.
Note: To fall under VAWC, the offender must
have had a sexual or dating relationship with
the offended woman.
When Availed Of
A victim leave may be availed of at any time
during the application of any protection order,
investigation, prosecution and/or trial of the
criminal case [Sec. 42, Rule VI, IRR].
Requirement
In order to be entitled to the leave benefit, the
only requirement is for the victim-employee to
present to her employer a certification from the
barangay chairman (Punong Barangay) or
barangay councilor (barangay kagawad) or
prosecutor or the Clerk of Court, as the case
may be, that an action relative to the matter is
pending [Sec. 42, Rule VI, IRR].
The usage of the ten-day leave shall be at the
option of the woman employee. In the event
that the leave benefit is not availed of, it shall
not be convertible into cash and shall not be
cumulative [Sec. 42, Rule VI, IRR].
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When Denied; Employer’s Liability
The employer/agency head who denies the
application for leave, and who shall prejudice
the victim-survivor or any person for assisting
a co-employee who is a victim-survivor under
the Act shall be held liable for discrimination
and violation of R.A 9262 [Sec. 42, Rule VI,
IRR].
E. Special Groups of Employees
1. Women
a. Discrimination
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:
1. Payment of a lesser compensation,
including wage, salary or other form of
remuneration and fringe benefits, to a
female employee as against a male
employee, for work of equal value; and
2. Favoring a male employee over a
female employee with respect to
promotion, training opportunities, study
and scholarship grants solely on
account of their sexes [Art. 133].
The Magna Carta of Women provides that the
State:
1. Condemns discrimination against
women in all its forms.
2. Pursues by all appropriate means and
without delay the policy of eliminating
discrimination against women in
keeping with the Convention on the
Elimination of All Forms of
Discrimination Against Women
(CEDAW) and other international
instruments consistent with Philippine
law.
3. Shall accord women the rights,
protection, and opportunities available
to every member of society.
4. Shall take steps to review and, when
necessary, amend and/or repeal
existing laws that are discriminatory to
women within three (3) years from the
effectivity of this Act [Sec. 2 & Sec. 12,
Magna Carta of Women].
LABOR 1
b. Stipulation Against Marriage (Article
134, Labor Code)
It shall be unlawful for an employer to:
1. require as a condition of employment
or continuation of employment that a
woman employee shall not get married,
or
2. stipulate expressly or tacitly that upon
getting married a woman employee
shall be deemed resigned or separated
or
3. actually dismiss, discharge,
discriminate or otherwise prejudice a
woman employee merely by reason of
her marriage [Art. 134, Labor Code;
Duncan Assoc of Detailman – PTGWO
v. Glaxo Wellcome, G.R. No. 162994
(2004)].
The Magna Carta of Women protects women
against discrimination in all matters relating to
marriage and family relations, including the
right to choose freely a spouse and to enter into
marriage only with their free and full consent.
Bona fide occupational qualification exception
While a marriage or no-marriage qualification
may be justified as a "bona fide occupational
qualification," the employer must prove two
factors necessitating its imposition, viz:
1. that the employment qualification is
reasonably related to the essential
operation of the job involved; and
2. that there is a factual basis for believing
that all or substantially all persons
meeting the qualification would be
unable to properly perform the duties of
the job [Capin-Cadiz v. Brent Hospital
and Colleges, Inc., G.R. No. 187417
(2016)].
When the employer can prove that the
reasonable demands of the business require a
distinction based on marital status, and there is
no better available or acceptable policy which
would better accomplish the business purpose,
an ER may discriminate against an EE based
on the identity of the EE’s spouse [Star Paper
Corp. v. Simbol, G.R. No. 164774 (2006)].
A personal or marital relationship with an
employee of a competitor might compromise
the interests of the company. Thus an
employer policy prohibiting the same may be
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held as valid [Duncan Association of Detailman
v. Glaxo Wellcome, supra].
c. Prohibited Acts (Art. 135, Labor
Code)
1. Discharge to prevent enjoyment of
benefits - to deny any woman
employee the benefits provided for in
this Chapter or to discharge any
woman employed by him for the
purpose of preventing her from
enjoying any of the benefits provided
under this Code [Art. 135 (1), Labor
Code, as amended by R.A. 6725]
2. Discharge on account of pregnancy-
to discharge such woman on account
of her pregnancy, while on leave or in
confinement due to her pregnancy [Art.
135 (2), Labor Code]
3. Discharge or refusal of the
admission to work - to discharge or
refuse the admission of such woman
upon returning to her work for fear that
she may again be pregnant [Art. 135
(3), Labor Code]
4. Discharge on account of testimony -
to discharge any woman or child or any
other employee for having filed a
complaint or having testified or being
about to testify under the Code [Sec. 13
(d), Rule XII, Book III, IRR]
5. Expulsion of Women faculty/female
student due to pregnancy outside of
Marriage - expulsion and non-
readmission of women faculty due to
pregnancy outside of marriage shall be
outlawed. No school shall turn out or
refuse admission to a female student
solely on the account of her having
contracted pregnancy outside of
marriage during her term in school
[Sec. 13(c), RA 9710]
LABOR 1 LABOR LAW
2. Minors (R.A. No. 7610, as amended c. Prohibited Acts
by R.A. No. 9231)
No child shall be engaged in the worst forms of
a. Child Labor vs. Working Child child labor. The phrase "worst forms of child
labor" shall refer to any of the following:
1. All forms of slavery, as defined under
Child Labor Working Child the "Anti-trafficking in Persons Act of
2003", or practices similar to slavery
Refers to any work or Refers to any child such as sale and trafficking of children,
economic activity engaged as follows: debt bondage and serfdom and forced
performed by a child 1. when the child is or compulsory labor, including
that subjects him/her below eighteen (18) recruitment of children for use in armed
to any form of years of age, in conflict; or
2. The use, procuring, offering or
exploitation or is work or economic
exposing of a child for prostitution, for
harmful to his/her activity that is not the production of pornography or for
health and safety or child labor as pornographic performances; or
physical, mental or defined in the 3. The use, procuring or offering of a child
psychosocial immediately for illegal or illicit activities, including
development. preceding the production and trafficking of
dangerous drugs and volatile
subparagraph; and
substances prohibited under existing
2. when the child is laws; or
below fifteen (15) 4. Work which, by its nature or the
years of age, in circumstances in which it is carried out,
work where he/she is hazardous or likely to be harmful to
is directly under the the health, safety or morals of children,
responsibility of such that it:
a. Debases, degrades or
his/her parents or
demeans the intrinsic worth
legal guardian and and dignity of a child as a
where only human being; or
members of the b. Exposes the child to physical,
child‘s family are emotional or sexual abuse, or
employed; or in is found to be highly stressful
public psychologically or may
prejudice morals; or
entertainment or
c. Is performed underground,
information [Sec. 3, underwater or at dangerous
D.O. No. 65-04] heights; or
d. Involves the use of dangerous
machinery, equipment and
tools such as power-driven or
b. Allowed Working Hours and explosive power-actuated
Industries of a Working Child tools; or
e. Exposes the child to physical
Age Bracket Daily Max Weekly Max danger such as, but not limited
to the dangerous feats of
Below 15 y/o 4 hrs 20 hrs balancing, physical strength or
contortion, or which requires
the manual transport of heavy
15 to below 8 hrs 40 hrs loads; or
18 y/o f. Is performed in an unhealthy
environment exposing the child
to hazardous working
conditions, elements,
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LABOR 1
substances, co-agents or
processes involving ionizing,
radiation, fire, flammable
substances, noxious
components and the like, or to
extreme temperatures, noise
levels, or vibrations; or
g. Is performed under particularly
difficult conditions; or"
h. Exposes the child to biological
agents such as bacteria, fungi,
viruses, protozoans,
nematodes and other
parasites; or
i. Involves the manufacture or
handling of explosives and
other pyrotechnic products
[Section 12-D, R.A. 7610, as
amended by R.A. 9231].
5. No child shall be employed as a model
in any advertisement directly or
indirectly promoting alcoholic
beverages, intoxicating drinks, tobacco
and its byproducts, gambling or any
form of violence or pornography
[Section 14, R.A. 7610, as amended by
R.A. 9231].
The Following are Hazardous Workplaces:
1. Mining and Quarrying;
2. Construction;
3. Transportation and Storage;
4. Water Supply; Sewerage, Waste
Management and Remediation
Activities;
5. Forestry and Logging;
6. Fishing and Aquaculture;
7. Hunting, Trapping and Related Service
Activities;
8. Security and Investigation;
9. Manufacturing of alcoholic beverages,
tobacco, pyrotechnics, weapons,
rubber, plastic or chemical products;
10. Certain Farming and Animal Produce
Activities [DO 149-16, as amended by
Sec. 6 DO 149-A-17]
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3. Kasambahay (R.A. No. 10361)
Domestic work - This refers to work
performed in or for a household or households
[Sec 4(c)., RA 10361].
Household - refers to the immediate members
of the family or the occupants of the house that
are directly provided services by the domestic
worker [Sec 4(f), RA 10361].
Domestic worker or “Kasambahay” - Refers
to any person engaged in domestic work within
an employment relationship such as, but not
limited to, the following: general househelp,
nursemaid or “yaya”, cook, gardener, or
laundry person [Sec 4(d), RA 10361].
The term domestic worker or “kasambahay”
excludes any person who performs domestic
work only occasionally or sporadically and not
on an occupational basis [Sec.4(d), RA 10361].
Note: IRR, Sec. 2 does not include family
drivers.
Minimum Wage
The minimum wage of domestic workers shall
not be less than the following:
a. P2,500 a month for those employed in
NCR
b. P2,000 a month for those employed in
chartered cities and first-class
municipalities
c. P1,500 a month for those employed in
other municipalities
Within one year from the effectivity of RA
10361, and periodically thereafter, the
Regional Board shall review, and if proper,
determine and adjust the minimum wage rates
of domestic workers [Sec. 24, RA 10361].
Standard of Treatment
The employer or any member of the household
shall not subject a domestic worker or
“kasambahay” to any kind of abuse nor inflict
any form of physical violence or harassment or
any act tending to degrade the dignity of a
domestic worker [Sec. 5, RA 10361].
LABOR 1
Board, Lodging and Medical Attendance
The employer shall provide for the basic
necessities of the domestic worker to include:
a. At least three adequate meals a day
b. Humane sleeping arrangements that
ensure safety
c. Appropriate rest and assistance in
case of illnesses and injuries sustained
during service without loss of benefits
[Sec. 6, RA 10361].
Privacy
Respect for the privacy of the domestic worker
shall be guaranteed at all times and shall
extend to all forms of communication and
personal effects [Sec. 7, RA 10361].
Access to Outside Communication
The employer shall grant the domestic worker
access to outside communication during free
time: Provided, That in case of emergency,
access to communication shall be granted
even during work time [Sec. 8, RA 10361].
Education and Training
The employer shall afford the domestic worker
the opportunity to finish basic education and
may allow access to alternative learning
systems and, as far as practicable, higher
education or technical and vocational training
[Sec. 9, RA 10361].
Social and Other Benefits
A domestic worker who has rendered at least
one (1) month of service shall be covered by
the Social Security System (SSS), the
Philippine Health Insurance Corporation
(PhilHealth), and the Home Development
Mutual Fund or Pag-IBIG, and shall be entitled
to all the benefits in accordance with the
pertinent provisions provided by law.
Leave Benefits
A domestic worker who has rendered at least
one (1) year of service shall be entitled to an
annual service incentive leave of five (5) days
with pay [Sec. 29, RA 10361].
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Rest Periods
Daily Rest Period: 8 hours
Weekly Rest Period: at least 24 consecutive
hours. The employer and employee may agree
to:
a. Offsetting a day of absence with a
particular rest day;
b. Waiving a particular rest day in return
for an equivalent daily rate of pay;
c. Accumulating rest days not exceeding
five (5) days; or
d. Other similar arrangements [Sec. 20,
21, RA 10361].
Pre-Employment Requirement
Prior to the execution of the employment
contract, the employer may require the
following from the domestic worker:
a. Medical certificate or a health
certificate issued by a local
government health officer;
b. Barangay and police clearance;
c. National Bureau of Investigation (NBI)
clearance; and
d. Duly authenticated birth certificate or if
not available, any other document
showing the age of the domestic
worker such as voter’s identification
card, baptismal record or passport.
However, Sec. 12(a), (b), (c) and (d) shall be
standard requirements when the employment
of the domestic worker is facilitated through the
PEA.
The cost of the foregoing shall be borne by the
prospective employer or agency, as the case
may be [Sec. 12, RA 10361].
Pre-Employment Prohibition
The following shall be unlawful:
a. Charging any share in the recruitment
or finder’s fees against the domestic
worker by a private employment
agency or third party [Sec. 13, RA
10361].
b. Requiring a domestic worker to make
deposits from which deductions shall
be made for the reimbursement of loss
or damage to tools, materials, furniture
and equipment in the household [Sec.
14, RA 10361].
c. Placing the domestic worker under
debt by the employer or any person
acting on behalf of the employer to
LABOR 1
place the domestic worker under debt
bondage [Sec. 15, RA 10361].
Time and Manner of Payment
Payment of wages shall be made:
a. Directly to the domestic worker in cash
b. At least once a month
c. With no deductions from the wages
other than that which is mandated by
law, unless allowed by the domestic
worker through a written consent
No employer shall pay the wages of a domestic
worker by means of promissory notes,
vouchers, coupons, tokens, tickets, chits, or
any object other than the cash wage as
provided for under this Act [Sec. 25, RA
10361].
Payslip
The employer shall at all times provide the
domestic worker with a copy of the pay slip
containing the amount paid in cash every pay
day, and indicating all deductions made, if any.
The copies of the pay slip shall be kept by the
employer for a period of three (3) years [Sec.
26, RA 10361].
Wage Prohibitions
It shall be unlawful for the original employer to
charge any amount from the said household
where the service of the domestic worker was
temporarily performed [Sec. 23, RA 10361].
Other Prohibited Acts
a. Interference in employee’s wage
disposal [Sec. 27, RA 10361]
b. Direct or indirect withholding of wages
by the employer [Sec. 28, RA 10361]
c. Payment in forms other than cash [Sec.
25, RA 10361]
Right against assignment to non- household
work at a wage rate lower than that mandated
for agricultural or non-agricultural enterprises
depending on the case [Sec. 22, RA 10361].
Employment Age of Domestic Workers
Unlawful to employ any person below fifteen
(15) years of age as a domestic worker [Sec.
16, RA 10361].
Persons between 15-18 years old should only
be employed in non-hazardous work [D.O. No.
4-99 Sec. 4].
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Daily Rest Period: Aggregate of eight (8)
hours per day [Sec. 20, RA 10361].
Employment Certification: ER shall give the
househelper a written statement of the nature
and duration of the service and his or her work
performance as house helper upon severance
[Sec. 35, RA 10361].
Termination
Initiated By the Domestic Worker
The domestic worker may terminate the
employment relationship at any time before the
expiration of the employment contract for any
of the following causes:
a. Verbal or emotional abuse of the
domestic worker by the employer or
any member of the household;
b. Inhuman treatment including physical
abuse of the domestic worker by the
employer or any member of the
household;
c. Commission of a crime or offense
against the domestic worker by the
employer or any member of the
household;
d. Violation by the employer of the terms
and conditions of the employment
contract and other standards set forth
under this law;
e. Any disease prejudicial to the health of
the domestic worker, the employer, or
member/s of the household; and
f. Other causes analogous to the
foregoing [Sec. 33, RA 10361].
Initiated by The Employer
An employer may terminate the services of the
domestic worker at any time before the
expiration of the contract, for any of the
following causes:
a. Misconduct or willful disobedience by
the domestic worker of the lawful order
of the employer in connection with the
former’s work;
b. Gross or habitual neglect or
inefficiency by the domestic worker in
the performance of duties;
c. Fraud or willful breach of the trust
reposed by the employer on the
domestic worker;
d. Commission of a crime or offense by
the domestic worker against the person
of the employer or any immediate
member of the employer’s family;
LABOR 1
e. Violation by the domestic worker of the
terms and conditions of the
employment contract and other
standards set forth under this law;
f. Any disease prejudicial to the health of
the domestic worker, the employer, or
member/s of the household; and
g. Other causes analogous to the
foregoing [Sec. 34, RA 10361].
Employment Certification
Upon the severance of the employment
relationship, the employer shall issue the
domestic worker within five (5) days from
request a certificate of employment indicating
the nature, duration of the service and work
performance [Sec. 35, RA 10361].
Unjust Dismissal
Neither the domestic worker nor the employer
may terminate the contract before the
expiration of the term except for grounds
provided in Secs. 33 and 34 of RA 10361.
If the domestic worker is unjustly dismissed,
the domestic worker shall be paid the
compensation already earned plus the
equivalent of 15 days work by way of indemnity
[Sec. 32, RA 10361].
Leaving Without Justifiable Reason by the
Domestic Worker
a. Any unpaid salary due not exceeding
the equivalent 15 days work shall be
forfeited AND
b. The employer may recover from the
domestic worker the costs incurred
related to the deployment expenses, if
any: Provided, that the service has
been terminated within 6 months from
the domestic worker’s employment
[Sec. 32, RA 10361].
Notice to End the Working Relationship
If the duration of the domestic service is not
determined either in stipulation or by the nature
of the service, the employer or the domestic
worker may give notice to end the working
relationship five (5) days before the intended
termination of the service.
The domestic worker and the employer may
mutually agree upon written notice to pre-
terminate the contract of employment to end
the employment relationship [Sec. 32, RA
10361].
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4. Homeworkers
a. Rights and Benefits
1. Right to form, join or assist
organizations [Sec. 3, Rule XIV, Book
III, IRR]
2. Right to acquire legal personality and
the rights and privileges granted by law
to legitimate labor organizations upon
issuance of the certification of
registration [Sec. 4, Rule XIV, Book III,
IRR]
3. Immediate payment upon employer’s
receipt of finished goods or articles
[Sec. 6, Rule XIV, Book III, IRR]
4. SSS, MEDICARE and ECC premium
contributions shall be deducted from
their pay and shall be remitted by
ER/contractor/subcontractor to the
SSS [Sec. 6, Rule XIV, Book III, IRR]
b. Employer Liability
1. Employer may require homeworker to
redo work improperly executed without
additional pay [Sec. 9(a), Rule XIV,
Book III, IRR]
2. Employer need not pay homeworker
for any work done on goods or articles
not returned due to homeworker’s fault
[Sec. 9(b), Rule XIV, Book III, IRR]
3. If subcontractor/contractor fails to pay
homeworker, employer is jointly and
severally liable with the former to the
homeworker for his/her wage [Sec. 11,
Rule XIV, Book III, IRR]
4. Employer shall assist the homeworkers
in the maintenance of basic safe and
healthful working conditions at the
homeworkers’ place of work [Sec. 11,
Rule XIV, Book III, IRR]
Regional Office shall provide technical
assistance to registered homeworkers’
organizations [Sec. 14, Rule XIV, Book III, IRR]
LABOR 1
5. Night Workers
Night Worker
Any employed person whose work requires
performance of a substantial number of hours
of night work which exceed a specified limit.
This limit shall be fixed by the Secretary of
Labor after consulting the workers’
representatives/labor organizations and
employers [Art. 154, as amended by RA
10151].
Any employed person whose work covers the
period from 10:00 pm to 6:00 am the following
morning, provided that the worker performs no
less than 7 consecutive hours of work [Sec. 2,
Rule XV, Book III, Rule XV, Sec. 2, IRR,
through D.O. No. 119-12].
a. Mandatory Facilities
Mandatory facilities shall be made available for
workers performing night work, which include
the following:
1. Suitable first-aid and emergency
facilities;
2. Lactation station in required companies
pursuant to RA 10028;
3. Separate toilet facilities for men &
women;
4. Facility for eating w/ potable drinking
water; and
5. Facilities for transportation and/or
properly ventilated temporary sleeping
or resting quarters, separate for male
and female workers, shall be provided
except where any of the ff.
circumstances is present:
a. There is an existing company
guideline, practice or policy,
CBA, or any similar agreement
providing for an equivalent or
superior benefit; or
b. Start or end of the night work
does not fall within 12 mn - 5
am; or
c. Workplace is located in an area
that is accessible 24 hours to
public transportation; or
d. Number of employees does not
exceed a specified number as
may be provided for by the
SOLE in subsequent issuances
[Art. 156, as amended by RA
10151; Sec. 4, Rule XV, Book
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III, IRR, through D.O. No. 119-
12]
6. Persons with Disabilities (R.A. No.
7277)
Definitions
Disabled persons are those suffering from
restriction or different abilities, as a result of a
mental, physical or sensory impairment, to
perform an activity in the manner or within the
range considered normal for a human being
[Sec. 4(a), RA 7277].
Impairment is any loss, diminution or
aberration of psychological, physiological, or
anatomical structure or function [Sec. 4(b), RA
7277].
Disability shall mean (1) a physical or mental
impairment that substantially limits one or more
psychological, physiological or anatomical
function of an individual or activities of such
individual; (2) a record of such an impairment;
(3) being regarded as having such an
impairment [Sec. 4(c), RA 7277].
Handicap refers to a disadvantage for a given
individual, resulting from an impairment or a
disability, that limits or prevents the function or
activity, that is considered normal given the
age and sex of the individual [Sec. 4(d), RA
7277].
Coverage
RA 7277 covers all disabled persons and, to
the extent herein provided, departments,
offices and agencies of the National
Government or nongovernment organizations
involved in the attainment of the objectives of
this Act [Sec. 3, RA 7227].
a. Discrimination
No entity, whether public or private, shall
discriminate against a qualified disabled
person by reason of disability in regard to:
1. Job application procedures
2. The hiring, promotion, or discharge of
employees
3. Employee compensation
4. Job training
5. Other terms, conditions, and privileges
of employment.
LABOR 1
Acts of Discrimination:
1. Limiting, segregating or classifying a
disabled job applicant in such a
manner that adversely affects his work
opportunities;
2. Using qualification standards,
employment tests or other selection
criteria that screen out or tend to
screen out a disabled person 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;
3. Utilizing standards, criteria, or methods
of administration that:
a. have the effect of
discrimination on the basis of
disability; or
b. perpetuate the discrimination
of others who are subject to
common administrative control.
4. Providing less compensation, such as
salary, wage or other forms of
remuneration and fringe benefits, to a
qualified disabled employee, by reason
of his disability, than the amount to
which a non-disabled person
performing the same work is entitled;
5. Favoring a non-disabled employee
over a qualified disabled employee with
respect to promotion, training
opportunities, study and scholarship
grants, solely on account of the latter's
disability;
6. Re-assigning or transferring a disabled
employee to a job or position he cannot
perform by reason of his disability;
7. Dismissing or terminating the services
of a disabled employee 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 disabled persons;
8. Failing to select or administer in the
most effective manner employment
tests which accurately reflect the skills,
aptitude or other factor of the disabled
applicant or employee that such tests
purports to measure, rather than the
impaired sensory, manual or speaking
skills of such applicant or employee, if
any; and
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9. Excluding disabled persons from
membership in labor unions or similar
organizations [Sec. 32, RA 7277].
b. Incentives for Employers
1. For employment of disabled persons –
additional deduction, from their gross income,
equivalent to 25% of the total amount paid as
salaries and wages to disabled persons:
a. Private entities that employ disabled
persons either as regular EEs,
apprentice or learner;
b. Provided such entities present proof as
certified by the DOLE and the DOH
[Sec. 8[b], RA 7277]
2. For construction of disabled-friendly
facilities – additional deduction from their net
taxable income, equivalent to 50% of the direct
costs of the improvement or modifications:
a. Private entities that improve or modify
their physical facilities in order to
provide reasonable accommodation for
disabled persons;
b. Does NOT apply to improvements or
modifications or facilities required
under BP 344 [Sec. 8 (c), RA 7277].
3. For establishments giving discounts –
may claim such discounts as tax deductions
based on the net cost of the goods sold on
services rendered:
a. The cost of the discount shall be
allowed as deduction from gross
income for the same taxable year that
the discount is granted
b. The total amount of the claimed tax
deduction net of VAT if applicable, shall
be included in their gross sales receipts
for tax purposes and shall be subject to
proper documentation and to the
provisions of the National Internal
Revenue Code, as amended [Sec. 32,
RA 7277, as amended by RA 9442].
LABOR 1
F. Sexual Harassment in the
Work Environment
Definition
Work, education or training-related sexual
harassment is committed by an employer,
employee, manager, supervisor, agent of the
employer, teacher, instructor, professor,
coach, trainer, 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
the other, regardless of whether the demand,
request or requirement for submission is
accepted by the object of said Act.
Any person who directs or induces another
to commit any act of sexual harassment as
herein defined, or who cooperates in the
commission thereof by another without which
it would not have been committed, shall also
be held liable under this Act [Sec. 3, RA 7877].
When Committed in a Workplace
In a work-related or employment environment,
sexual harassment is committed when:
1. The sexual favor is made as 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 of 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 [Sec. 3,
RA 7877].
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Duties and Liabilities of Employers
1. To prevent or deter the commission of
acts of sexual harassment
2. To provide procedures for the
resolution, settlement, or prosecution
of acts of sexual harassment
3. To promulgate appropriate rules and
regulations
a. Administrative sanctions shall
not be a bar to prosecution in
the proper courts for unlawful
acts of sexual harassment
[Section 4(a), RA 7877]
i. The victim of sexual
harassment may still
institute a separate and
independent action for
damages and other
affirmative relief
[Section 6, RA 7877]
b. The said rules shall include,
guidelines on proper decorum
in the workplace and
educational or training
institutions, among others
Applicable Laws
a. Anti-Sexual Harassment Act (R.A. No.
7877) – February 14, 1995
Who may be held liable: An employer,
employee, manager, supervisor, agent of the
employer, teacher, instructor, professor,
coach, trainer, or any other person who, has
authority, influence or moral ascendancy over
another [Section 3, RA 7877].
Any person who directs or induces another to
commit any act of sexual harassment as
defined under RA 7877 or who cooperates in
the commission thereof by another without
which it would not have been committed, shall
also be held liable.
How committed: When such person
demands, requests or otherwise requires any
sexual favor from the other, regardless of
whether the demand, request or requirement
for submission [Section 3, RA 7877].
Where committed:
1. In a work-related or employment
environment, sexual harassment;
2. In an education or training
environment, sexual harassment is
committed.
LABOR 1 LABOR LAW
Modes of Commission Duty of Employer or Head of Office in
Employment Education or Employment or Education Environment
environment training It shall be their duty to prevent or deter the
environment commission of acts of sexual harassment and
to provide the procedures for the resolution,
Sexual favor is made Against one:
settlement or prosecution of acts of sexual
as a condition in 1. Who is under the harassment.
hiring or care, custody, a. Promulgate appropriate rules and
employment, re- and supervision regulations in consultation with and joint1y
employment, or of the offender; approved by the employees or students or
continued 2. Against one trainees, through their duly designated
employment of the whose representatives, prescribing the procedure
for the investigation of sexual harassment
victim, or in granting education, cases and the administrative sanctions
the individual training, therefor.
favorable apprenticeship, b. Create a committee on decorum and
compensation, or tutorship is investigation of cases on sexual
terms, promotions entrusted to the harassment.
and privileges, or offender [Section i. For work related environment: The
committee shall be composed of at
refusal to grant the 3(b)(1), (2), RA
least one (1) representative each from
sexual favor results 8788]. the management, the union, if any, the
in the employee employees from the supervisory rank,
being discriminated and from the rank and file employees.
upon, deprived, or ii. For educational or training
having diminished institutions: The committee shall be
employment composed of at least one (1)
representative from the administration,
opportunities or the
the trainers, instructors, professors or
employee is coaches and students or trainees, as
otherwise adversely the case may be [Section 4, RA 7877].
affected [Section
3(a)(1), RA 8788]. Liability of the Employer or Head of Office
The employee’s rights The sexual favor is The employer or head of office, educational or
or privileges under made a condition to training institution shall be solidarily liable for
damages arising from the acts of sexual
existing labor laws are the giving of a passing
harassment committed in the employment,
impaired [Section grade, or the granting
education or training environment if the
3(a)(2), RA 8788]. of honors and employer or head of office, educational or
scholarships, or training institution is informed of such acts by
payment of a stipend, the offended party and no immediate action is
allowance, or other taken [Section 5, RA 7877].
benefits, privileges, or
consideration Penalties
[Section 3(b)(3), RA Upon conviction, the offender is penalized by
8788]. imprisonment of not less than one (1) month
nor more than six (6) months, or a fine of not
The above acts would The sexual advances
less than Ten thousand pesos (P10,000) nor
result in an result in an
more than Twenty thousand pesos (P20,000),
intimidating, hostile, intimidating, hostile, or both such fine and imprisonment at the
or offensive or offensive discretion of the court [Section 7, RA 7877].
environment for the environment for the
employee [Section student, trainee or Prescription of action: Three (3) years.
3(a)(3), RA 8788]. apprentice [Section
3(b)(4), RA 8788].

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LABOR 1
b. Safe Spaces Act (R.A. No. 11313) –
April 17, 2019
Gender-Based Sexual Harassment in the
Workplace includes the following:
1. An act or series of acts involving any
unwelcome sexual advances, requests or
demand for sexual favors or any act of
sexual nature, whether done verbally,
physically or through the use of technology
such as text messaging or electronic mail
or through any other forms of information
and communication systems, that has or
could have a detrimental effect on the
conditions of an individual’s employment or
education, job performance or
opportunities;
2. A conduct of sexual nature and other
conduct- based on sex affecting the dignity
of a person, which is unwelcome,
unreasonable, and offensive to the
recipient, whether done verbally, physically
or through the use of technology such as
text messaging or electronic mail or
through any other forms of information and
communication systems;
3. A conduct that is unwelcome and pervasive
and creates an intimidating, hostile or
humiliating environment for the recipient:
Provided, That the crime of gender-based
sexual harassment may also be committed
between peers and those committed to a
superior officer by a subordinate, or to a
teacher by a student, or to a trainer by a
trainee; and
4. Information and communication system
refers to a system for generating, sending,
receiving, storing or otherwise processing
electronic data messages or electronic
documents and includes the computer
system or other similar devices by or in
which data are recorded or stored and any
procedure related to the recording or
storage of electronic data messages or
electronic documents [Article IV, Section
16, RA 11313].
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Duties of Employers
Employers or other persons of authority,
influence, or moral ascendancy, in a workplace
shall have the duty to prevent, deter, or punish
the performance of acts of gender-based
sexual harassment in the workplace.
1. Disseminate or post in a conspicuous place
a copy of RA 11313 to all persons in the
workplace;
2. Provide measures to prevent gender-
based sexual harassment in the workplace,
such as the conduct of anti-sexual
harassment seminars;
3. Create an independent internal mechanism
or a committee on decorum and
investigation to investigate and address
complaints of gender- based sexual
harassment which shall;
a. Adequately represent the
management, the employees from the
supervisory rank, the rank-and-file
employees, and the union, if any;
b. Designate a woman as its head and not
less than half of its members should be
women;
c. Be composed of members who should
be impartial and not connected or
related to the alleged perpetrator;
d. Investigate and decide on the
complaints within ten days or less upon
receipt thereof;
e. Observe due process;
f. Protect the complainant from
retaliation; and
g. Guarantee confidentiality to the
greatest extent possible;
4. Provide and disseminate, in consultation
with all persons in the workplace, a code of
conduct or workplace policy which shall;
a. Expressly reiterate the prohibition on
gender-based sexual harassment;
b. Describe the procedures of the internal
mechanism created under Sec. 17(c)
RA 11313; and
c. Set administrative penalties [Article IV,
Section 17, RA 11313].
LABOR 1 LABOR LAW
Duties of Employees and Co-Workers
1. Employees and co-workers shall have the
duty to: Refrain from committing acts of
gender-based sexual harassment;
2. Discourage the conduct of gender-based
sexual harassment in the workplace;
3. Provide emotional or social support to
fellow employees, co-workers, colleagues
or peers who are victims of gender-based
sexual harassment; and
4. Report acts of gender-based sexual
harassment witnessed in the workplace
[Article IV, Section 18, RA 11313].

Routine inspections
Yearly spontaneous inspections shall be
conducted to ensure compliance of employers
and employees with their obligations.

Who conducts:
1. DOLE – for private sector;
2. CSC – for public sector.

Liability of Employee
In addition to liabilities for committing acts of
gender-based sexual harassment, employers
may also be held responsible for:
a) Non-implementation of their duties
under Sec. 17 (Duties of Employers),
as provided in the penal provisions; or

Penalty: Fine of not less than P5,000

nor more than P10,000.

b) Not taking action on reported acts of

gender-based sexual harassment
committed in the workplace.

Penalty: Fine of not less than P10,000

nor more than P15,000 [Article IV,
Section 19, RA 11313].

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LABOR 1
IV. SOCIAL WELFARE
LEGISLATION
A. Social Security System Law
(R.A. No. 8282)
1. Coverage and Exclusions
Compulsory Coverage
All employees not over sixty (60) years of age
and their employers, including domestic
helpers with at least P1,000.00 monthly pay
[Sec. 9, RA 8282].
Self-Employed Persons [Sec. 9-A, RA 8282]
a. All self-employed professionals
b. Partners and single proprietors of
businesses
c. Actors and actresses, directors,
scriptwriters and news correspondents
who do not fall within the definition of
the term "employee"
d. Professional athletes, coaches,
trainers and jockeys and
e. Individual farmers and fishermen
A domestic worker who has rendered at least
one (1) month of service shall be covered by
the Social Security System (SSS), the
Philippine Health Insurance Corporation
(PhilHealth), and the Home Development
Mutual Fund or Pag-IBIG, and shall be entitled
to all the benefits in accordance with the
pertinent provisions provided by law.
Premium payments or contributions shall be
shouldered by the employer. However, if the
domestic worker is receiving a wage of Five
thousand pesos (P5,000.00) and above per
month, the domestic worker shall pay the
proportionate share in the premium payments
or contributions, as provided by law.
The domestic worker shall be entitled to all
other benefits under existing laws [Sec. 30, RA
10361].
Voluntary
Spouses who devote full time to managing the
household and family affairs, unless they are
also engaged in other vocation or employment
which is subject to mandatory coverage
Filipinos recruited by foreign-based employers
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for employment abroad (OFWs) [Sec. 9, RA
7877].
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 [Sec. 8(j)(4), RA
7877].
Exclusion
a. Employment purely casual and not for
the purpose of occupation or business
of the employer;
b. Service performed on or in connection
with an alien vessel by an employee if
he is employed when such vessel is
outside the Philippines;
c. Service performed in the employ of the
Philippine Government or
instrumentality or agency thereof;
d. Service performed in the employ of a
foreign government or international
organization, or their wholly-owned
instrumentality;
e. Such other services performed by
temporary and other employees which
may be excluded by SSS regulation
[Sec. 8(j), RA 7877].
Note: Employees of bona fide independent
contractors shall not be deemed employees of
the employer engaging the service of said
contractors.
2. Dependents and Beneficiaries
Primary
a. The dependent spouse until he or she
remarries
b. The dependent legitimate, legitimated
or legally adopted, and illegitimate
children
1. Entitled to fifty percent (50%) of
the share of the legitimate,
legitimated or legally adopted
children.
2. If there are no legitimate
children, they shall be entitled
to one hundred percent (100%)
of the benefits.
LABOR 1 LABOR LAW
Secondary b. 65 years - entitled to monthly pension
a. Dependent parents from retirement until death.
b. Any other person designated
The monthly pension shall be suspended upon
3. Benefits the reemployment or resumption of self-
employment of a retired member who is less
Monthly Pension [Sec. 12] than sixty-five [65] years old.
The monthly pension shall be the highest of the
following amounts: In Case of Death of Member
a. P300.00 + [20% x average monthly a. Primary beneficiaries as of the date of
salary credit] + [2% x average monthly retirement shall be entitled to receive
salary credit x years of service in the monthly pension; or
excess of 10 years] b. If no primary beneficiaries and he dies
b. 40% x average monthly salary credit; within 60 months from the start of
or monthly pension, secondary
c. P1,000.00; the monthly pension cannot beneficiaries shall be entitled to a
be less than the aggregate amount for lump sum benefit equivalent to the total
sixty (60) months monthly pensions corresponding to the
balance of the five-year guaranteed
Minimum Pension period, excluding the dependents’
a. At least 10 credited years of service - pension.
P1,200.00
b. At least 20 credited years of service - Lump Sum Alternative
P2,400.00 Member may opt to receive the first 18 monthly
pensions in lump sum but such is discounted at
Dependent’s Pension [Sec. 12-A] a preferential rate of interest.
Payable on account of:
a. Death, Lump Sum Eligibility
b. Permanent total disability, or A 60-year-old member with less than 120
c. Retirement monthly contributions who is no longer
employed or self-employed, and who is not
Paid to each dependent child conceived on or continuing contributions independently, is
before the date of the contingency beginning entitled to a lump sum equal to his total
with the youngest. contributions paid.
a. Not exceeding 5
b. Legitimate shall be preferred over The monthly pension of a member who retires
illegitimate children after reaching age 60 shall be the higher of
either:
Amount Paid a. The monthly pension computed at the
a. 10% of the monthly pension or earliest time he could have retired had
b. P250.00, whichever is higher, he been separated from employment
Retirement Benefits or ceased to be self-employed + all
adjustments thereto;
Retirement Benefits [Sec. 12-B] b. The monthly pension computed at the
time when he actually retires.
Eligibility
A member who has paid at least 120 monthly Death Benefits [Sec. 13]
contributions prior to the semester of
retirement. Eligibility Requirement
36 monthly contributions prior to the semester
Age of death.
a. 60 years; already separated from
employment or has ceased to be self- Entitled to monthly pension to primary or a
employed; or lump sum benefit equivalent to 36 times the
monthly pension secondary beneficiaries.

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LABOR 1
If ineligible, lump sum benefit which shall be the
higher between the two:
a. monthly pension x 12; or
b. monthly pension x [# of monthly
contributions]
Permanent Disability Benefits
Eligibility Requirement
a. 36 monthly contributions prior to the
semester of disability; same as death
benefit; the only difference is that the
pension is paid directly to the member.
b. In case the permanently disabled
member dies, it would be given the
same treatment as a retiree dying.
c. For permanent partial disability, the
pension is not lifetime [e.g. loss of
thumb entitles members to only 10
months of pension, while loss of arm 50
months]. It shall be paid in lump sum if
the period is less than 12 months.
d. For multiple partial disabilities, they
shall be additive when related or
deteriorating, the percentage shall be
equal to the number of months the
partial disability is entitled to, divided by
75 months [e.g. loss of sight in one eye
= 25/75; loss of arm = 50/75; if both
occur due to same cause, then 25/75 +
50/75 = 100% so treated as if it were
permanent total disability].
Lump Sum Alternative
A member is entitled to a lump sum benefit
equivalent to the monthly pension times the
number of monthly contributions paid to the
SSS or 12 times the monthly pension,
whichever is higher.
Lump Sum Eligibility
A member who has not paid at least 36 monthly
contributions.
Note: A member who has received a lump sum
benefit; and is reemployed or has resumed
self- employment not earlier than 1 year from
the date of his disability shall again be subject
to compulsory coverage and shall be
considered a new member.
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In Case of Death of Member
a. Primary beneficiaries as of the date of
disability shall be entitled to receive the
monthly pension; OR
b. If no primary beneficiaries and he dies
within 60 months from the start of his
monthly pension, his secondary
beneficiaries shall be entitled to a lump
sum benefit equivalent to the total
monthly pensions corresponding to the
balance of the five-year guaranteed
period excluding the dependents’
pension.
Funeral Benefits [Sec. 13-B]
P12,000 in cash or in kind, upon the death of
the member.
Loan
Treatment of salary loans; more flexible
payment terms or condonation for delinquent
payers.
Sickness Benefits [Sec. 14]
Eligibility Requirements and Other
Conditions
a. Inability to work due to sickness or
injury;
b. Confined for at least 4 days either in a
hospital or elsewhere with SSS
approval;
c. At least 3 months of contributions in the
12-month period immediately before
the semester of sickness or injury has
been paid;
d. All company sick leaves with pay for
the current year have been used up;
e. Maximum of 120 days per calendar
year [i.e. maximum permissible for the
same sickness and confinement is 240
days for 2 consecutive years];
f. The employer has been notified, or, if a
separated, voluntary or self-employed
member, the SSS directly notified
within 5 days of confinement;
g. Notice to employer or SSS not needed
when confinement is in a hospital;
notice to employer not required as well
when Employee became sick or injured
while working or within premises of the
employer.
LABOR 1
Entitled to daily cash allowance paid for the
number of days a member is unable to work
due to sickness or injury equivalent to 90% x
[average daily salary credit]
a. 100% of the daily benefits provided
shall be reimbursed by the SSS to said
employer upon receipt of satisfactory
proof of such payment and legality
thereof if the following conditions are
met:
b. The employer notified the SSS of the
confinement within five calendar days
after receipt of the notification from the
employee member
c. If the notification to the SSS is made by
the employer beyond five calendar
days after receipt of the notification
from the employee member, he shall
be reimbursed only for each day of
confinement starting from the tenth
calendar day immediately preceding
the date of notification to the SSS
d. SSS shall reimburse the employer or
pay the unemployed member only for
confinement within the one-year period
immediately preceding the date the
claim for benefit or reimbursement is
received by the SSS, except
confinement in a hospital in which case
the claim for benefit or reimbursement
must be filed within one year from the
last day of confinement
Maternity Leave Benefits [Sec. 14-A]
Eligibility Requirements
a. A female member
b. Paid at least three [3] monthly
contributions in the twelve-month
period immediately preceding the
semester of her childbirth or
miscarriage
c. Notified her employer of her pregnancy
and the probable date of her childbirth,
which notice shall be transmitted to the
SSS
Process
The full payment shall be advanced by the
employer within 30 days from the filing of the
maternity leave application.
Coverage
The maternity benefits provided under this Sec.
shall be paid only for the first four deliveries or
miscarriages.
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Employer’s Reimbursement
That the SSS shall immediately reimburse the
employer of one 100% of the amount of
maternity benefits advanced to the employee
by the employer upon receipt of satisfactory
proof of such payment and legality thereof.
Note: All of these benefits are tax-exempt.
B. Government Service
Insurance System Law (R.A. No.
8291)
1. Coverage and Exclusions
Compulsory
All employees receiving compensation who
have not reached the compulsory retirement
age, irrespective of employment status.
Excluded
a. Armed Forces of the Philippines and
Philippine National Police. However,
they must settle first their financial
obligation with the GSIS.
b. Contractuals who have no employer
and employee relationship with the
agencies they serve.
General Rule: All members of the GSIS shall
have life insurance, retirement, and all other
social security protection such as disability,
survivorship, separation, and unemployment
benefits.
Exception: Members of the judiciary and
constitutional commissions who shall have life
insurance only.
2. Dependents and Beneficiaries
Primary
a. Legal dependent spouse until he/she
remarries
b. Dependent children
Secondary
a. Dependent parents
b. Other legitimate descendants
LABOR 1
3. Benefits
Computation of Service
a. From the date of original
appointment/election. Including:
b. Periods of service at different times
under one or more employers,
c. Those performed overseas under the
authority of the Republic of the
Philippines,
d. Those that may be prescribed by the
GSIS in coordination with the Civil
Service Commission.
In Case of Reinstatement:
All service credited for retirement, resignation
or separation for which corresponding benefits
have been awarded under this Act or other
laws shall be excluded in the computation of
service.
Basic Monthly Pension Computation
37.5% x [revalued average monthly
compensation] Plus 2.5 x [revalued average
monthly compensation] x [years in service in
excess of 15 years].
The monthly pension shall:
a. Not exceed 90% of the average
monthly compensation.
b. Not be less than P2,400 for those with
20 years of service and not less than
P1,300 for everyone else.
Unemployment or Involuntary Separation
Benefits
Monthly cash payments of 50% of average
monthly compensation for a duration which is
proportional to years rendered, ranging from 2
months to 6 months.
Eligibility Requirements
a. Employee separated from service due
to abolition of his office or position; and
b. Employee has been paying integrated
contributions for at least 1 year prior to
separation.
Separation Benefits
Eligibility Requirements
a. 60 years of age, or separation from
service with at least 3 years but not
over 15 years served
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LABOR LAW
b. Below 60 years of age, but at least 15
years of service rendered
Separation Benefit
For 60 years of age or separated from service
with 3 to 15 years of service → cash payment
of 100% of average monthly compensation for
each year of service (total amount of all
contributions paid) or P12,000 whichever is
higher.
Below 60 years of age and at least 15 years of
service → cash payment equivalent to 18 x
[monthly pension] at the time of resignation or
separation plus an old-age pension benefit
equal to basic monthly pension.
Retirement Benefits
Eligibility Requirements
The member who retires:
a. Has rendered at least 15 years of
service;
b. Is at least 60 years of age at the time of
retirement; and
c. Is not receiving a monthly pension
benefit from permanent total disability.
Retirement shall be compulsory for an
employee at 65 years of age with at least 15
years of service.
If he has less than 15 years of service, he may
be allowed to continue in the service in
accordance with existing civil service rules and
regulations.
Retirement Benefit
a. The lump sum payment payable at the
time of retirement + old-age pension
benefit (basic monthly pension payable
monthly for life, starting upon expiration
of the five-year (5) guaranteed period
covered by the lump sum); or
b. Cash payment equivalent to 18 months
of his basic monthly pension + monthly
pension for life payable immediately
with no five-year (5) guarantee.
c. It shall be periodically adjusted as may
be recommended by the GSIS.
LABOR 1
Permanent Disability Benefits
Eligibility Requirements
A member suffers permanent disability for
reasons not due to his grave misconduct,
notorious negligence, habitual intoxication, or
willful intention to kill himself or another.
Employee is:
a. In service at the time of disability; or
b. Even if separated, he has paid at least
36 monthly contributions within the 5-
year period immediately prior to
disability or has paid a total of at least
180 monthly contributions prior to
disability; and
c. Member is not enjoying old-age
retirement benefits.
Disabilities Deemed Total and Permanent
a. Complete loss of sight of both eyes;
b. Loss of 2 limbs at or above the ankle or
wrist
c. Permanent complete paralysis of 2
limbs
d. Brain injury resulting in incurable
imbecility or insanity
e. Other cases as determined by the
GSIS
Disabilities Deemed Partial and Permanent
Complete and permanent loss of the use of:
a. Any finger
b. Any toe
c. One arm
d. One hand
e. One foot
f. One leg
g. One or both ears
h. Hearing of one or both ears
i. Sight of one eye
Other cases as determined by the GSIS
Permanent Total Disability Benefit
a. Monthly income benefit for life equal to
basic monthly pension (effective from
date of disability);
b. If member is in service at the time of
disability and he has paid at least 180
monthly contributions, in addition to the
monthly income benefit, he shall
receive an additional cash payment of
18 times basic monthly pension.
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If Ineligible
A member that has rendered at least 3 years of
service shall receive cash payment equal to
100% of average monthly compensation for
each year of service (essentially total amount
of contributions made) or P12,000 whichever is
higher.
Permanent Partial Disability Benefit
Paid according to GSIS prescribed schedule.
Temporary Disability Benefits
Eligibility requirements
Employee must be:
a. In service at the time of disability; or
b. If separated, he has rendered at least
3 years of service and paid at least 6
monthly contributions in the 12-month
period immediately prior to disability;
c. All sick leave credits including CBA
sick leaves for the current year has
been used up; and
d. Maximum of 120 days per 1 calendar
year (maximum permissible for the
same sickness and confinement is 240
days for 2 consecutive years).
Temporary Disability Benefit
Entitled to 75% of the current daily
compensation for every day or fraction thereof
of disability or P70 whichever is higher.
Survivorship Benefits
Consists of
a. The basic survivorship pension (50% of
the basic monthly pension); and
b. The dependent children’s pension (not
exceeding fifty percent (50%) of the
basic monthly pension).
Funeral Benefits
Paid upon the death of:
a. An active member; or
b. A member who has been separated
from the service, but who may be
entitled to future benefit; or
c. A pensioner; or
d. A retiree who at the time of his
retirement was of pensionable age
under this Act but who opted to retire.
Funeral Benefit
a. Entitled to not be less than P12,000.00.
b. Increased to not less than P18,000.00
after 5 years.
LABOR 1 LABOR LAW
Life Insurance Benefits C. Limited Portability Law (R.A.
Compulsory for all employees, except AFP and
PNP. No. 7699)

Effectivity A scheme for totalization and portability of

a. Employed after GSIS - date of
employment.
b. Mature after GSIS - insurance deemed
renewed on the date after
maturity/expiry.
c. Without life insurance - date of
effectivity of GSIS.
Dividends
Granted to all members of the GSIS whose life
insurance is in force for at least 1 year in
accordance with a dividend allocation formula
to be determined by the GSIS.
Optional Insurance
Member may apply for insurance and/or pre-
need coverage embracing life, health,
hospitalization, education, memorial plans, and
such other plans.
Employer may also apply for group insurance.
The payment of the premiums/installments for
optional insurance may be made by:
a. The insured or
b. His employer and/or
c. Any person acceptable to the GSIS.
social security benefits with the view of
establishing within a reasonable period a
unitary social security system [Sec. 1].
A covered worker who transfers employment
from one sector to another or is employed in
both sectors shall have his credible services or
contributions in both Systems credited to his
service or contribution record in each of the
Systems and shall be totalized for purposes of
old-age, disability, survivorship and other
benefits in case the covered member does not
qualify for such benefits in either or both
Systems without totalization.
● Overlapping periods of membership
shall be credited only once for
purposes of totalization [Sec. 3].
All contributions paid by such member
personally, and those that were paid by his
employers to both Systems shall be considered
in the processing of benefits which he can
claim from either or both Systems.
● The amount of benefits to be paid by
one System shall be in proportion to the
number of contributions actually
remitted to that System [Sec. 4].

Reinsurance D. Disability and Death Benefits

GSIS may reinsure any of its interests or part
thereof with any private company or reinsurer 1. Labor Code
whether domestic or foreign.
Under the Labor Code, employees'
GSIS shall submit an annual report on its compensation (EC) benefits are granted to
reinsurance operations to the Insurance employees or their dependents for work-
Commission. connected disability or death, or those resulting
from accidents arising out of and in the course
of employment [Art. 166, LC in rel. to Sec. 1,
Rule III, IRR].

Types of Disability
a. Temporary Total Disability [Art. 197]
b. Permanent Total Disability [Art. 198]
c. Permanent Partial Disability [Art. 199]

Disability Benefits
Disability does not refer to the injury nor to the
pain and suffering it has occasioned, but to the
loss and impairment of earning capacity. There
is disability when there is a loss or diminution
of earning power because of actual absence
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LABOR 1
from work due to injury or illness arising out of
and in the course of employment. The basis of
compensation is reduction of earning power
[Azucena, p. 525].
Temporary Total Disability
A total disability is temporary if as a result of
the injury or sickness, the employee is unable
to perform any gainful occupation for a
continuous period not exceeding 120 days [Art.
197 in rel. to Sec. 2(a), Rule VII, Amended
Rules on Employees’ Compensation].
The object of the law in allowing compensation
during temporary disability is to compensate
the laborer or employee for what he might have
earned during the period of the treatment of his
injury [Cañete v. Insular Lumber Co., 61 Phil.
592 (1935)].
Amount of Benefit
An employee suffering from temporary total
disability shall be paid by the System an
equivalent of ninety percent (90%) of the
average salary credit, provided:
a. The daily income benefit is not less
than Ten (10) pesos nor more than
Ninety (90) pesos, nor paid for a
continuous period longer than 120
days [Art. 197]
b. The monthly income benefit shall be
suspended if the employee fails to
submit a monthly medical report
certified by its attending physician
[Art.194]
Period of Entitlement
The employee is entitled to the benefit from the
day of the start of the disability. It shall not be
paid longer than 120 consecutive days except
where such injury or sickness still requires
medical attendance beyond 120 days but not
to exceed 240 days from onset of disability.
When after the period of temporary total
disability had ceased, an employee was found
to be suffering from a permanent partial
disability, he was entitled to an award based
upon partial disability permanent in character
[Cañete v. Insular Lumber Co., 61 Phil. 592
(1935)].
Permanent Total Disability
A disability is total and permanent if as a result
of the injury or sickness the employee is unable
to perform any gainful occupation for a
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continuous period exceeding 120 days [Arts.
198 in rel. to Sec. 2(b), Rule VII].
The test of whether or not an employee suffers
from ‘permanent total disability’ is a showing of
the capacity of the employee to continue
performing his work notwithstanding the
disability he incurred. It does not mean an
absolute helplessness but rather an incapacity
to perform gainful work which is expected to be
permanent [Vicente v. ECC, G.R. No. 85024
(1991)].
The Labor Code enumerates six instances
considered to be a permanent total disability:
1. Temporary total disability lasting
continuously for more than one
hundred twenty days, except as
otherwise provided for in the Rules;
2. Complete loss of sight of both eyes;
3. Loss of two limbs at or above the ankle
or wrist;
4. Permanent complete paralysis of two
limbs;
5. Brain injury resulting in incurable
imbecility or insanity; and
6. Such cases as determined by the
Medical Director of the System and
approved by the Commission [Art. 197
(c)].
Amount of Benefit
The employee suffering from a permanent total
disability shall be entitled to an amount
equivalent to the monthly income benefit, plus
ten percent thereof for each dependent child,
but not exceeding five, beginning with the
youngest and without substitution: Provided,
That the monthly income benefit shall be the
new amount of the monthly benefit for all
covered pensioners [Art. 198].
Period of Entitlement
An employee with permanent total disability
shall be entitled to receive benefits monthly for
five (5) years.
However, Art. 198(b) provides that the benefits
may be suspended if the employee is gainfully
employed, or recovers from his permanent total
disability, or fails to present himself for
examination at least once a year.
LABOR 1
Permanent Partial Disability
A disability is partial and permanent if as a
result of the injury or sickness the employee
suffers a permanent partial loss of the use of
any part of his body [Art. 199 in rel. to Sec. 2(c),
Rule VII, Amended Rules on Employees’
Compensation].
The object of the law in granting compensation
for a permanent partial disability is to
compensate the injured laborer or employee
for the actual and permanent loss of a member
of the body, or the use thereof [Cañete v.
Insular Lumber Co., 61 Phil. 592 (1935)].
LABOR LAW
Note:
1. A loss of a wrist shall be considered as
a loss of the hand, and a loss of an
elbow shall be considered as a loss of
the arm.
2. A loss of an ankle shall be considered
as loss of a foot, and a loss of a knee
shall be considered as a loss of the leg.
3. A loss of more than one joint shall be
considered as a loss of one-half of the
whole finger or toe: Provided, That
such a loss shall be either the
functional loss of the use or physical
loss of the member [Art. 199(c)].

Amount of Benefits In case of permanent partial disability less than

For an employee who has suffered a the total loss of the member specified in Art.
permanent partial disability, the amount of 199(b), the same monthly income benefit shall
benefits, as well as the period of entitlement to be paid for a portion of the period established
receive such benefits is based upon the degree for the total loss of the member in accordance
of disability, as well as the lost body part. The with the proportion that the partial loss bears to
body parts and the corresponding period of the total loss. If the result is a decimal fraction,
equivalent disability are specified in Art 199. the same shall be rounded off to the next higher
integer [Art. 199(d)].
Benefits
In cases of simultaneous loss of more than one
Body Part/s Months member or a part thereof as specified in Art.
199(b) the same monthly income benefit shall
One thumb 10 be paid for a period equivalent to the sum of
the periods established for the loss of the
One index finger 8
member or the part thereof. If the result is a
One middle finger 6 decimal fraction, the same shall be rounded off
to the next higher integer [Art. 199(e)].
One ring finger 5
In cases of injuries or illnesses resulting in a
One little finger 3 permanent partial disability not listed in the Art.
199(b), the benefit shall be an income benefit
One big toe 6 equivalent to the percentage of the permanent
loss of the capacity to work [Art. 199(f)].
One toe 3
Distinguished from Permanent Total
One arm 50
Disability
One hand 39
While “permanent total disability” invariably
results in an employee’s loss of work or inability
One foot 31 to perform his usual work, “permanent partial
disability,” on the other hand, occurs when an
One leg 46 employee loses the use of any particular
anatomical part of his body which disables him
One ear 10 to continue with his former work [Vicente v.
ECC, G.R. No. 85024 (1991)].
Both ears 20

Hearing of one ear 10

Hearing of both ears 50

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LABOR 1
Conversion from Permanent Partial
Disability to Permanent Total Disability
A person’s disability may not manifest fully at
one precise moment in time but rather over a
period of time. It is possible that an injury which
at first was considered partial disability may
become totally and permanently disabled from
the same cause. There is nothing in the law
that prohibits the conversion of permanent
partial disability benefit to permanent total
disability benefit if it is shown that the
employee’s ailment qualifies as such [GSIS v.
Court of Appeals and R. Balais, G.R. No.
117572 (1998)].
When Salary is Higher After the Injury
In a case where the employee filed a claim for
permanent partial disability but the ECC denied
the claim because in fact his salary was higher
than before, the Court ruled that the fact of
higher earning capacity fact would not in itself
necessarily affect the laborer’s claim for
compensation for a permanent partial
disability. An injured laborer’s incapacity for
work is not to be measured solely by the wages
he receives, or his earning, after the injury,
since the amount of such wages or earnings
may be affected by various extraneous matters
or factors [Central Azucarera Don Pedro v. C.
de Leon, in his capacity as Workmen’s
Compensation Commissioner and L. Alla, G.R.
No. L-10036 (1957)].
Death Benefits
Article. 200. Death – a. Under such regulations as
the Commission may approve, the System shall pay
to the primary beneficiaries upon the death of the
covered employee under this Title, an amount
equivalent to his monthly income benefit, plus ten
percent thereof for each dependent child, but not
exceeding five, beginning with the youngest and
without substitution, except as provided for in
paragraph (j) of Article 167 hereof: Provided,
however, That the monthly income benefit shall be
guaranteed for five years: Provided, further, That if
he has no primary beneficiary, the System shall pay
to his secondary beneficiaries the monthly income
benefit but not to exceed sixty months: Provided,
finally, That the minimum death benefit shall not be
less than fifteen thousand pesos (As amended by
Section 4, Presidential Decree No. 1921).
b. Under such regulations as the Commission may
approve, the System shall pay to the primary
beneficiaries upon the death of a covered employee
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who is under permanent total disability under this
Title, eighty percent of the monthly income benefit
and his dependents to the dependents’ pension:
Provided, That the marriage must have been validly
subsisting at the time of disability: Provided, further,
That if he has no primary beneficiary, the System
shall pay to his secondary beneficiaries the monthly
pension excluding the dependents’ pension, of the
remaining balance of the five-year guaranteed
period: Provided, finally, That the minimum death
benefit shall not be less than fifteen thousand pesos
(As amended by Section 4, Presidential Decree No.
1921).
c. The monthly income benefit provided herein shall
be the new amount of the monthly income benefit for
the surviving beneficiaries upon the approval of this
decree.
Condition to Entitlement
The beneficiaries of a deceased employee
shall be entitled to an income benefit if all of the
following conditions are satisfied:
1. The employee has been duly reported
to the System;
2. He died as a result of an injury or
sickness; and
3. The System has been duly notified of
his death, as well as the injury or
sickness which caused his death. His
employer shall be liable for the benefit
if such death occurred before the
employee is duly reported for coverage
to the System [Sec. 1(a), Rule XIII,
IRR].
Note:
1. If the employee has been receiving
monthly income benefit for permanent
total disability at the time of his death,
the surviving spouse must show that
the marriage has been validly
subsisting at the time of his disability.
2. In addition, the cause of death must be
a complication or natural consequence
of the compensated Permanent Total
Disability [Sec. 1(b), Rule XIII, IRR].
LABOR 1
Beneficiaries
The beneficiaries are:
1. Primary beneficiaries:
a. Dependent spouse until he/she
remarries;
b. Dependent children (legitimate,
legitimated, natural-born, or
legally adopted).
2. Secondary beneficiaries:
a. Illegitimate children
descendants;
b. Parents, grandparents,
[Azucena, p. 541]
Dependents
"Dependent" means the legitimate, legitimated
or legally adopted or acknowledged natural
child who is unmarried, not gainfully employed,
and not over twenty-one (21) years of age or
over twenty-one (21) years of age provided he
is incapacitated and incapable of self-support
due to a physical or mental defect which is
congenital or acquired during minority; the
legitimate spouse living with the employee and
the parents of said employee wholly dependent
upon him for regular support [Art. 173 (i)].
The test of dependency is not merely whether
the contributions were necessary to bear
subsistence. Dependency may exist although
the dependent could have subsisted without
the assistance he/she received, if such
contributions were relied on by claimant for
his/her means of living as determined by
his/her position in life [Malate Taxicab v. Del
Villar, G.R. No. L-7489 (1956)].
Period of Entitlement
For Primary Beneficiaries
The income benefit shall be paid beginning at
the month of death and shall continue to be
paid for as long as the beneficiaries are entitled
thereto [Sec. 2, Rule XII, IRR].
Qualifications
With respect to the surviving legitimate spouse,
the qualification is that he/she has not
remarried.
For the dependent children, the qualifications
are:
1. Unmarried;
2. Not gainfully employed; and
3. Not over 21 years of age provided
he/she is incapable of self-support due
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to a physical or mental defect which is
congenital or acquired during minority
[Sec. 2(a), Rule XII, IRR].
For Secondary Beneficiaries
The income benefit shall be sixty (60) times the
monthly income benefit of a primary beneficiary
which in no case be less than P 15,000.00,
which shall likewise be paid in monthly pension
[Sec. 2(a), Rule XII, IRR].
Manner of Payment
Death benefits are paid in the form of cash
monthly pension:
1. For life to the primary beneficiaries,
guaranteed for five years;
2. For not more than 60 months to the
secondary beneficiaries in case there
are no primary beneficiaries;
3. In no case shall the total benefit be less
than P15,000 [Art. 200].
Amount of Benefits
For Primary Beneficiaries
Monthly income benefit shall be equivalent to
the monthly income benefit for permanent total
disability, which shall be guaranteed for five
years, increased by ten percent for each
dependent child but not exceeding 5, beginning
with the youngest and without substitution
[Sec. 3, Rule XII, IRR].
The aggregate monthly benefit payable in the
case of the GSIS shall in no case exceed the
monthly wage or salary actually received by the
employee at the time of his death. The
minimum income benefit shall not be less than
Fifteen Thousand Pesos (P15,000.00) [Sec. 3,
Rule XII, IRR].
For Secondary Beneficiaries
Income benefit is payable in monthly pension
which shall not exceed the period of 60 months
and the aggregate income benefit shall not be
less than P15,000.00 [Sec. 3, Rule XII, IRR].
Death Benefits After Retirement are
Allowed
Generally, the term “covered employees”
refers to an employee who, at the time of his
death, is still covered by the GSIS. However,
the implementing rules and regulations of the
Employees’ Compensation Commission allow
death benefits to those retired employees
LABOR 1
whose retirement was brought about by
permanent disability.
The Court is aware that death benefits must be
granted to the primary beneficiaries of the
decedent to help the family of a permanent and
totally disabled person who was so disabled
because of causes that are work-oriented. The
rule applies all the more when the disabled
person later dies because of the same cause
or related cause [Manuzon v. ECC, G.R. No.
88573 (1990)].
Death of a Person Receiving Permanent
Total Disability Benefits
Under Art. 200(b), death benefit shall be paid
to the beneficiaries if an employee, while
receiving permanent total disability benefit,
dies.
Prescription of Claims
All money claims arising from employer-
employee relations shall be filed within three
(3) years from the time the cause of action
accrued; otherwise they shall forever be barred
[Art. 306, LC].
2. Philippine Overseas Employment
Administration-Standard
Employment Contract for Seafarers
As part of a seafarer's deployment for overseas
work, he and the vessel owner or its
representative local manning agency are
required to execute the POEA-SEC.
Containing the standard terms and conditions
of seafarers' employment, the POEA-SEC is
deemed included in their contracts of
employment in foreign ocean-going vessels
[Sharpe Sea Personnel Inc. v. Mabunay, G.R.
No. 206113 (2017)].
a. Compensation for Benefits for Injury
or Illness
Medical Expenses
If the injury or illness requires medical and/or
dental treatment in a foreign port, the employer
shall be liable for the full cost of such medical,
serious dental, surgical and hospital treatment
as well as board and lodging until the seafarer
is declared fit to work or to be repatriated.
However, if after repatriation, the seafarer still
requires medical attention arising from said
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injury or illness, he/she shall be so provided at
cost to the employer until such time he/she is
declared fit or the degree of his/her disability
has been established by the company-
designated physician [Sec. 20, A.2, POEA-
SEC].
Sickness Allowance
The seafarer shall also receive sickness
allowance from his/her employer in an amount
equivalent to his/her basic wage computed
from the time he/she signed off until he is
declared fit to work or the degree of disability
has been assessed by the company-
designated physician.
The period within the seafarer shall be entitled
to sickness allowance shall not exceed 120
days. Payment of the sickness allowance shall
be made on a regular basis, but not less than
once a month [Sec. 20. A.3, POEA-SEC].
Other Expenses
The seafarer shall be entitled to reimbursement
of the cost of medicines prescribed by the
company-designated physician.
In case treatment of the seafarer is on an out-
patient basis as determined by the company-
designated physician, the company shall
approve the appropriate mode of transportation
and accommodation.
The reasonable cost of actual traveling
expenses and/or accommodation shall be paid
subject to liquidation and submission of official
receipts and/or proof of expenses [Sec. 20,
A.3, POEA-SEC].
Post-Employment Medical Examination
General Rule: The seafarer shall submit
himself/herself to a post-medical examination
by a company- designated physician within
three working days upon his return.
Exception: When the seafarer is physically
incapacitated to do so. In which case, a written
notice to the agency within the same period is
deemed as compliance [Sec. 20, A.3, POEA-
SEC].
Mandatory Reporting Requirement
In the course of the treatment, the seafarer
shall also report regularly to the company-
designated physician specifically on the dates
as prescribed by the company-designated
physician and agreed to by the seafarer.
LABOR 1
Failure of the seafarer to comply with the
mandatory reporting requirement shall result in
his forfeiture of the right to claim the above
benefits [Sec. 20, A.3, POEA-SEC].
Schedule of Benefits
See Sec. 32 of POEA-SEC for the schedule of
disability or impediment for injuries suffered
and diseases including occupational diseases
of illness contracted in the course of work.
Those illnesses not listed in Sec. 32 are
disputably presumed as work-related [Sec. 20,
A.4, POEA-SEC].
Repatriation
In case a seafarer is disembarked from the ship
for medical reasons, the employer shall bear
the full cost of repatriation in the event the
seafarer is declared:
1. Fit for repatriation; or
2. Fit to work but the employer is unable
to find employment for the seafarer on
board his/her former ship or another
ship of the employer [Sec. 20, A.5,
POEA-SEC].
Guidelines for the Claim of Permanent
Total Disability Benefits
The employer must also compensate the
seafarer for his/her permanent total or partial
disability as finally determined by the company-
designated physician.
The following guidelines shall govern
seafarers' claims for permanent and total
disability benefits:
1. The company-designated physician
must issue a final medical assessment
on the seafarer's disability grading
within a period of 120 days from the
time the seafarer reported to him;
2. If the company-designated physician
fails to give his/her assessment within
the period of 120 days, without any
justifiable reason, then the seafarer's
disability becomes permanent and
total;
3. If the company-designated physician
fails to give his/her assessment within
the period of 120 days with a sufficient
justification (e.g. seafarer required
further medical treatment or seafarer
was uncooperative), then the period of
diagnosis and treatment shall be
extended to 240 days. The employer
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has the burden to prove that the
company-designated physician has
sufficient justification to extend the
period; and
4. If the company-designated physician
still fails to give his assessment within
the extended period of 240 days, then
the seafarer's disability becomes
permanent and total, regardless of any
justification [Jebsens Maritime Inc. v.
Rapiz, G.R. No. 218871 (2017)].
b. Compensation and Benefits for Death
In case of work-related death of the seafarer,
during the term of his contract, the employer
shall pay his/her beneficiaries the Philippine
currency equivalent to the amount of Fifty
Thousand US dollars (US$50,000) and an
additional amount of Seven Thousand US
dollars (US$7,000) to each child under the age
of twenty-one (21) but not exceeding four (4)
children, at the exchange rate prevailing during
the time of payment [Sec. 20, B.1, POEA-
SEC].
When Compensation Payable is Double
Where death is caused by warlike activity while
sailing within a declared war zone or war risk
area, the compensation payable shall be
doubled [Sec. 20, B.2, POEA-SEC].
Other liabilities of the employer when the
seafarer dies as a result of work-related injury
or illness during the term of employment are as
follows:
1. The employer shall pay the deceased’s
beneficiary all outstanding obligations
due the seafarer under this Contract.
2. The employer shall transport the
remains and personal effects of the
seafarer to the Philippines at
employer’s expense except if the death
occurred in a port where local
government laws or regulations do not
permit the transport of such remains. In
case death occurs at sea, the
disposition of the remains shall be
handled or dealt with in accordance
with the master’s best judgment.
In all cases, the employer/master shall
communicate with the manning agency
to advise for disposition of seafarer’s
remains.
LABOR 1 LABOR LAW
3. The employer shall pay the
beneficiaries of the seafarer the
Philippine currency equivalent to the
amount of US$1,000.00 for burial
expenses at the exchange rate
prevailing during the time of payment
[Sec. 20, B.4, POEA-SEC].

When Compensation is Not Payable

No compensation and benefits shall be
payable in respect of any injury, incapacity,
disability or death of the seafarer resulting from
his willful or criminal act or intentional breach of
his duties, provided however, that the employer
can prove that such injury, incapacity, disability
or death is directly attributable to the seafarer
[Sec. 20, D, POEA-SEC].

Note: Applies to both disability and death

benefits.

Prescription of Claims
All claims arising from this contract shall be
made within three (3) years from the date the
cause of action arises, otherwise the same
shall be barred [Sec. 30, POEA-SEC].

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LABOR 2
V. LABOR RELATIONS
A. Right to Self-Organization
1. Who May Join, Form, or Assist
Labor Organizations or Workers’
Associations
a. All employees
b. Government employees of
corporations created under the
Corporation Code
c. Supervisory Employees
d. Aliens with valid working permits
e. Security personnel
a. All Employees
All persons employed in commercial, industrial
and agricultural enterprises and in religious,
charitable, medical or educational institutions,
whether operating for profit or not, shall have
the right to self-organization and to form, join or
assist labor organizations of their own
choosing for purposes of collective bargaining.
(Presumes an employer-employee
relationship)
Ambulant, intermittent and itinerant workers,
self-employed people, rural workers and those
without any definite employers may form labor
organizations for their mutual aid and
protection [Art. 253].
Any employee, whether employed for a definite
period or not, shall, beginning on his first day of
service, be considered an employee for
purposes of membership in any labor union
[Art. 292(c)].
Employee […] shall include any individual
whose work has ceased as a result of or in
connection with any current labor dispute or
because of any unfair labor practice if he has
not obtained any other substantially equivalent
and regular employment [Art. 219(f)].
Employees of non-profit organizations are now
permitted to form, organize or join labor unions
of their choice for purposes of collective
bargaining [FEU-Dr. Nicanor Reyes Medical
Foundation Inc. v. Trajano, G.R. No. 76273
(1987)].
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b. Government Employees of
Corporations Created Under the
Corporation Code
The right to self-organization shall not be
denied to government employees [Sec. 2(5),
Art. IX-B, Constitution].
Employees of government corporations
established under the Corporation Code shall
have the right to organize and to bargain
collectively with their respective employers.
All other employees in the civil service shall
have the right to form associations for
purposes not contrary to law [Art. 254].
All government employees can form, join or
assist employees’ organizations of their own
choosing for the furtherance and protection of
their interests. They can also form, in
conjunction with appropriate government
authorities, labor-management committees,
work councils and other forms of workers’
participation schemes to achieve the same
objectives [E.O. 180, Sec. 2 (1987)].
c. Supervisory Employees
Supervisory employees are those who, in the
interest of the employer, effectively
recommend such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgment [Art. 219(m)].
What is essential is the nature of the
employee’s function and not the nomenclature
or title given to the job which determines
whether the employee has rank-and-file or
managerial status or whether he is a
supervisory employee [Tagaytay Highlands
International Golf Club, Inc. v. Tagaytay
Highlands Employees Union-PTGWO, G.R.
142000 (2003)].
d. Aliens with Valid Working Permits
General Rule: All aliens, natural or juridical,
[…] are strictly prohibited from engaging
directly or indirectly in all forms of trade union
activities [Art. 284].
LABOR 2
Exception: Aliens may exercise the right to
self-organization and join or assist labor unions
for purposes of collective bargaining, provided
the following requisites are fulfilled:
1. With valid working permits issued by
the DOLE; and
2. They are nationals of a country which
grants the same or similar rights to
Filipino workers [Art. 284]
a. As certified by DFA; OR
b. Has ratified either ILO Conventions
No. 87 and 98 [Sec. 2, Rule II, Book
V, IRR]
e. Security Personnel
The security guards and other personnel
employed by the security service contractor
shall have the right:
1. To form, join, or assist in the formation
of a labor organization of their own
choosing for purposes of collective
bargaining and
2. To engage in concerted activities which
are not contrary to law including the
right to strike [D.O. No. 14 Series of
2001 (Guidelines Governing the
Employment and Working Conditions
of Security Guards and Similar
Personnel in the Private Security
Industry)].
On Dec. 24, 1986, President C. Aquino issued
EO No. 111 which eliminated the provision
which made security guards ineligible to join
any labor organization. In 1989, Congress
passed RA 6715 which also did not impose
limitations on the ability of security guards to
join labor organizations. Thus, security guards
“may now freely join a labor organization of the
rank-and-file or that of the supervisory union,
depending on their rank” [Manila Electric Co. v.
SOLE, G.R. No. 91902 (1991)].
2. Restrictions as to:
a. Managerial Employees
Managerial employees are not eligible to join,
assist or form any labor organization [Art. 255].
b. Supervisory Employees
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Supervisory employees shall not be eligible for
membership in the collective bargaining unit of
the rank-and-file employees but may join,
assist or form separate collective bargaining
units and/or legitimate labor organizations of
their own. The rank and file union and the
supervisors' union operating within the same
establishment may join the same federation or
national union.
Rationale: Supervisory employees, while in
the performance of supervisory functions,
become the alter ego of the management in the
making and the implementing of key decisions
at the sub-managerial level. Certainly, it would
be difficult to find unity or mutuality of interests
in a bargaining unit consisting of a mixture of
rank-and-file and supervisory employees
[Toyota Motor Phil. Corp. v. Toyota Motor Phil.
Corp. Labor Union, G.R. No. 121084 (1997)].
Supervisor and Rank and File Union
Affiliation
The rank and file union and the supervisors’
union operating within the same establishment
may join the same federation or national union
[Art. 255].
Note also: Prior to the enactment of RA 9481,
which inserted a new provision [Art. 245-A,
now Art. 256], the Court held in De La Salle
University v. Laguesma that a local
supervisors’ union is not allowed to affiliate with
a national federation of unions of rank and file
employees only where two conditions concur:
1. The rank-and-file employees are
directly under the authority of
supervisory employees
2. The national federation is actively
involved in union activities in the
company [De La Salle University
Medical Center and College of
Medicine v. Laguesma, G.R. No.
102084 (1998)].
c. Confidential Employees
Doctrine of Necessary Implication
While Art. 255 of the Labor Code singles out
managerial employees as ineligible to join,
assist or form any labor organization, under the
doctrine of necessary implication, confidential
employees are similarly disqualified. This
doctrine states that what is implied in a statute
is as much a part thereof as that which is
LABOR 2
expressed [Metrolab Industries Inc. v. Roldan-
Confessor, G.R. No. 108855 (1996)].
Nature of Access Test
Confidential employees, by the nature of their
functions, assist and act in a confidential
capacity to, or have access to confidential
matters of, persons who exercise managerial
functions in the field of labor relations.
Requisites
1. The confidential relationship must exist
between the employees and his
supervisor, and
2. The supervisor must handle the
prescribed responsibilities relating to
labor relations [San Miguel Supervisors
and Exempt Union v. Laguesma, G.R.
No. 110399 (1997)].
Function Test: Nomenclature is not
controlling
The mere fact that an employee is designated
“manager” does not ipso facto make him one.
Designation should be reconciled with the
actual job description of the employee [Paper
Industries Corp. of the Philippines. v.
Laguesma, G. R. No.101738 (2000)].
Rationale of Exclusion of Confidential
Employees
If confidential employees could unionize in
order to bargain for advantages for
themselves, then they could be governed by
their own motives rather than the interest of the
employers.
Moreover, unionization of confidential
employees for the purpose of collective
bargaining would mean the extension of the
law to persons or individuals who are supposed
to act in the interest of the employers. It is not
far-fetched that in the course of collective
bargaining, they might jeopardize that interest
which they are duty bound to protect [Metrolab
Industries Inc. v. Roldan-Confessor, G.R. No.
108855 (1996)].
Confidential Information: Must relate to
labor relations and not from a business
standpoint
An employee must assist or act in a confidential
capacity and obtain confidential information
relating to labor relations policies. Exposure to
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internal business operations of the company is
not per se a ground for the exclusion in the
bargaining unit [Coca-Cola Bottlers v. IPTEU,
G.R. No. 193798 (2015)].
d. Employee-Members of Cooperatives
General Rule: An employee of a cooperative
who is a member and co-owner thereof cannot
invoke the right to collective bargaining for
certainly an owner cannot bargain with himself
or his co-owners [Batangas-I Electric
Cooperative Labor Union v. Romeo A. Young,
G.R. No. 62386 (1988)].
Irrespective of the degree of their participation
in the actual management of the cooperative,
all members thereof cannot form, assist or join
a labor organization for the purpose of
collective bargaining [Benguet Electric
Cooperative v. Ferrer-Calleja, G.R. No. 79025
(1989)].
Exception: Employees who withdrew their
membership from the cooperative are entitled
to form or join a labor union for the negotiations
of a Collective Bargaining Agreement [Central
Negros Electric Cooperative, Inc. v. DOLE,
G.R. No. 94045 (1991)].
e. Employees of International
Organizations
International organizations are endowed with
some degree of international legal personality.
They are granted jurisdictional immunity, as
provided in their organization’s constitutions, to
safeguard them from the disruption of their
functions.
Immunity […] is granted to avoid interference
by the host country in their internal workings.
The determination [by the executive branch]
has been held to be a political question
conclusive upon the Courts in order not to
embarrass a political department of
Government [Hence], a certification election
cannot be conducted in an international
organization to which the Philippine
Government has granted immunity from local
jurisdiction [International Catholic Migration
Commission v. Calleja, G.R. No. 85750
(1990)].
LABOR 2
3. Determination of Appropriate
Bargaining Unit (ABU)
Effect of inclusion of employees outside
of the ABU
General Rule: It shall not be a ground for the
cancellation of the registration of the union.
Said employees are automatically deemed
removed from the list of membership of said
union [Art. 256].
Exception: Unless such mingling was brought
about by misrepresentation, false statement or
fraud under Art. 247 (Grounds for cancellation
of Union Registration) of the Labor Code
[SMCC-Super v. Charter Chemical and
Coating Corporation, G.R. No. 169717 (2011)].
4. Non-Interference with Workers’
Rights to Self-Organization
It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly interfere
with employees and workers in their exercise
of the right to self-organization.
Such right shall include the right to form, join,
or assist labor organizations for the purpose of
collective bargaining through representatives
of their own choosing and to engage in lawful
concerted activities for the same purpose for
their mutual aid and protection, subject to the
provisions of Article 264 of this Code [Art. 257].
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B. Legitimate Labor
Organizations
1. Registration with the DOLE
Independent Labor Unions, Chartered
Locals, Workers’ Associations
Applications for registration of independent
labor unions, chartered locals, workers’
associations shall be filed with the Regional
Office where the applicant principally operates.
It shall be processed by the Labor Relations
Division at the Regional Office in accordance
with Sections 2-A, 2-C, and 2-E of this Rule
[Sec. 1, Rule III, IRR].
Federations, National Unions Or Workers’
Associations
Applications for registration of federations,
national unions or workers’ associations
operating in more than one region shall be filed
with the Bureau or the Regional Offices, but
shall be processed by the Bureau in
accordance with Sections 2-B and 2-D of this
Rule [Sec. 1, Rule III, IRR].
2. Cancellation of Registration
Where to File:
Subject to the requirements of notice and due
process, the registration of any legitimate
independent labor union, local/chapter and
workers’ association may be cancelled by the
Regional Director upon the filing of a petition
for cancellation of union registration, or
application by the organization itself for
voluntary dissolution.
The petition for cancellation or application for
voluntary dissolution shall be filed in the
Regional Office which issued its certificate of
registration or creation.
In the case of federations, national or industry
unions and trade union centers, the Bureau
Director may cancel the registration upon the
filing of a petition for cancellation or application
for voluntary dissolution in the Bureau of Labor
Relations [Sec. 1, Rule XIV, IRR].
Who May File:
Any party-in-interest may commence a
petition for cancellation of registration, except
in actions involving violations of Article 250
LABOR 2
(renumbered), which can only be commenced
by members of the labor organization
concerned [Sec. 2, Rule XIV, IRR].
Grounds for Cancellation:
Any of the following may constitute as ground/s
for cancellation of registration of labor
organizations:
a. misrepresentation, false statement or
fraud in connection with the adoption or
ratification of the constitution and by-
laws or amendments thereto, the
minutes of ratification, the list of
members who took part in the
ratification;
b. misrepresentation, false statements or
fraud in connection with the election of
officers, minutes of the election of
officers, and the list of voters; or
c. voluntary dissolution by the members
[Art. 247, Labor Code; Sec. 3, Rule
XIV, IRR].
Prohibited Grounds for Cancellation [Sec.
6, Rule XIV, Book V, IRR]:
a. The inclusion as union members of
employees who are outside the
bargaining unit shall not be a ground
to cancel the union registration.
b. The ineligible employees are
automatically deemed removed from
the list of membership of the union.
c. The affiliation of the rank-and-file
and supervisory unions operating
within the same establishment to the
same federation or national union shall
not be a ground to cancel the
registration of either union.
3. Affiliation/Disaffiliation from
National Union or Federation
Local unions do not owe their creation and
existence to the national federation to which
they are affiliated but, instead, to the will of their
members [...] The local unions remain the basic
units of association, free to serve their own
interests subject to the restraints imposed by
the constitution and by-laws of the national
federation, and free also to renounce the
affiliation upon the terms laid down in the
agreement which brought such affiliation into
existence [Philippine Skylanders, Inc. v. NLRC,
G.R. No. 127374 (2002)].
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Union Chartering Affiliate
An independent union affiliated with a
federated, national union or a chartered local
which was subsequently granted independent
registration but did not disaffiliate from its
federation, reported to the Regional Office and
the Bureau in accordance with Rule III, Secs. 6
and 7 [Sec. 1(b), Rule I, Book V, IRR].
Independent Union
A labor organization operating at the enterprise
level that acquired legal personality through
independent registration under Art. 234 of the
Labor Code and Rule III, Sec. 2-A [Sec. 1(x),
Rule I, Book V].
National Union or Federation
A group of legitimate labor unions in a private
establishment organized for collective
bargaining or for dealing with employers
concerning terms and conditions of
employment for their member union or for
participating in the formulation of social and
employment policies, standards and programs,
registered with the BLR in accordance with
Rule III Sec. 2-B [Sec. 1(ll), Rule I, Book V,
IRR].
Chartered Local (Local Chapter)
A labor organization in the private sector
operating at the enterprise level that acquired
legal personality through registration with
Regional Office [Sec. 1(i), Rule I, Book V, IRR].
A duly registered federation or national union
may directly create a local chapter by issuing a
charter certificate indicating the establishment
of the local chapter. The chapter shall acquire
legal personality only for purposes of filing a
petition for certification election from the date it
was issued a charter certificate.
The chapter shall be entitled to all other rights
and privileges of a legitimate labor organization
only upon the submission of the following
documents in addition to its charter certificate:
1. The names of the chapter's officers,
their addresses, and the principal office
of the chapter; and
2. The chapter's constitution and by-laws:
Provided, That where the chapter's
constitution and by-laws are the same
as that of the federation or the national
union, this fact shall be indicated
accordingly.
LABOR 2 LABOR LAW
The additional supporting requirements shall Purpose of Affiliation
be: To foster the free and voluntary organization of
1. Certified under oath by: a strong and united labor movement [Art. 218-
a. Secretary; or A(c)].
b. Treasurer
2. Attested by: Its president [Art. 241]. The sole essence of affiliation is to increase, by
collective action, the common bargaining
Lesser Requirements for Chartered power of local unions for the effective
Locals enhancement and protection of their interests.
The intent of the law in imposing less Admittedly, there are times when without
requirements in the case of a branch or local of succor and support local unions may find it
a registered federation or national union is to hard, unaided by other support groups, to
encourage the affiliation of a local union with a secure justice for themselves [Philippine
federation or national union in order to increase Skylanders, Inc. v. NLRC, G.R. No. 127374
the local unions’ bargaining powers respecting (2002)].
terms and conditions of labor [SMCEU-
PTGWO v. SMPEU-PDMP, G.R. No. 171153 Nature of Relationship: Agency
(2007)]. The mother union, acting for and on behalf of
its affiliate, had the status of an agent while the
Trade Union Centers Cannot Create local union remained the basic unit of the
Locals or Chapters association, free to serve the common interest
Art. 241 mentions only “a duly registered of all its members subject only to the restraints
federation or national union.” imposed by the constitution and by-laws of the
association [...] The same is true even if the
The solemn power and duty of the Court to local is not a legitimate labor organization
interpret and apply the law does not include the [Filipino Pipe and Foundry Corp v. NLRC, G.R.
power to correct by reading into the law what is No. 115180 (1998)].
not written therein [SMCEU-PTGWO v.
SMPEU-PDMP, G.R. No. 171153 (2007)]. Effect of Affiliation
Inclusion of [the federation’s initials] in the
National Union or Federation v. Trade registration is merely to stress that they are its
Unions affiliates at the time of registration. It does not
mean that said local unions cannot stand on
National Union or Trade Unions their own [Adamson v. CIR, G.R. No. L-35120
Federation (1984)].
With at least ten (10) Composed of a
Mere affiliation does not divest the local union
locals or chapters (or group of registered
of its own personality, neither does it give the
independent unions national unions or
mother federation the license to act
[Sec. 2-B(5), Rule III, federations
independently of the local union. It only gives
Book V, IRR], each
rise to a contract of agency, where the former
of which must be a
acts in representation of the latter. Hence, local
duly recognized
unions are considered principals while the
collective bargaining
federation is deemed to be merely their agent
agent [Art. 244]
[Insular Hotel Employees Union NFL v.
Can directly create Cannot directly Waterfront Insular Hotel, G.R. No. 174040-41
local chapter [Art. create local chapter (2010)].
241] [SMCEU-PTGWO v.
SMPEU-PDMP, G.R. Disaffiliation
No. 171153 (2007)] In the absence of specific provisions in the
federation’s constitution prohibiting
disaffiliation or the declaration of autonomy of
a local union, a local may dissociate with its
parent union [Malayang Manggagawa sa M.
Greenfield v. Ramos, G.R. No. 113907 (2000)].
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LABOR 2
Local unions have the right to separate from
their mother federation on the ground that as
separate and voluntary associations, local
unions do not owe their creation and existence
to the national federation to which they are
affiliated but, instead, to the will of their
members [Philippine Skylanders, Inc. v. NLRC,
G.R. No. 127374 (2002)].
A local union is free to serve the interests of all
its members, including the freedom to
disaffiliate or declare its autonomy from the
federation to which it belongs when
circumstances warrant, in accordance with the
constitutional guarantee of freedom of
association [Malayang Samahan ng mga
Manggagawa sa M. Greenfield, Inc. v. Ramos,
G.R. No. 113907 (2000)].
Period of Disaffiliation
Generally, a labor union may disaffiliate from
the mother union to form a local or independent
union only during the 60-day freedom period
immediately preceding the expiration of the
CBA. However, even before the onset of the
freedom period, disaffiliation may be carried
out when there is a shift of allegiance on the
part of the majority of the members of the union
[Alliance of Nationalist and Genuine Labor
Organization v. Samahan ng mga
Manggagawang Nagkakaisa sa Manila Bay
Spinning Mills, G.R. No. 118562 (1996)].
[A] local union which has affiliated itself with a
federation is free to sever such affiliation
anytime and such disaffiliation cannot be
considered disloyalty [Malayang Manggagawa
sa M. Greenfield v. Ramos, G.R. No. 113907
(2000)].
Effect of Disaffiliation
a. On Legal Personality
A registered independent union retains its legal
personality while a chartered local loses its
legal personality unless it registers itself.
b. No Effect on CBA
A disaffiliation does not disturb the
enforceability and administration of a collective
agreement; it does not occasion a change of
administrators of the contract nor even an
amendment of the provisions thereof
[Volkschel Labor Union v. BLR, No. L-45824
(1985)].
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Obligation to Pay Union Dues is
Coterminous with Membership
“The employees’ check-off authorization, even
if declared irrevocable, is good only as long as
they remain members of the union concerned”.
A contract between an employer and the
parent organization as bargaining agent for the
employees is terminated by the disaffiliation of
the local of which the employees are members
[Volkschel Labor Union v. BLR, No. L-45824
(1985)].
Power to Represent Principal Severed
By [the local union’s disaffiliation from the
federation], the vinculum that previously bound
the two entities was completely severed [The
federation] was divested of any and all power
to act in representation of the union. Thus, any
act performed by [the federation] affecting the
interests and affairs of the [local union] is
rendered without force and effect [ANGLO v.
Samana, G.R. No. 118562 (1996)].
Substitutionary Doctrine
The “substitutionary” doctrine provides that the
employees cannot revoke the validly executed
collective bargaining contract with their
employer by the simple expedient of changing
their bargaining agent.
It is in the light of this that the phrase “said new
agent would have to respect said contract”
must be understood. It only means that the
employees, thru their new bargaining agent,
cannot renege on their collective bargaining
contract, except of course to negotiate with
management for the shortening thereof
[Benguet Consolidated v. BCI Employees and
Workers Union-PAFLU, G.R. No. L-24711
(1968)].
Conditions to Apply the Doctrine
1. Change of bargaining agent (through
affiliation, disaffiliation, or other
means); and
2. Existing CBA with the previous
bargaining agent [Benguet
Consolidated v. BCI Employees and
Workers Union-PAFLU, G.R. No. L-
24711 (1998)].
LABOR 2
Effects
1. New bargaining agent cannot revoke
and must respect the existing CBA;
and
2. It may negotiate with management to
shorten the existing CBA’s lifetime.
4. Rights of Legitimate Labor
Organizations [Art. 251]
a. Right to act as the representative of
its members for the purpose of
collective bargaining [Art. 251]
b. Right to be certified as the exclusive
representative of all the employees in
an appropriate bargaining unit for
purposes of collective bargaining [Art.
251]
c. Right to be furnished by the employer,
upon written request, with its annual
audited financial statements, including
the balance sheet and the profit and
loss statement, within thirty (30)
calendar days from the date of receipt
of the request, after the union has been
duly recognized by the employer or
certified as the sole and exclusive
bargaining representative of the
employees in the bargaining unit, or
within sixty (60) calendar days before
the expiration of the existing collective
bargaining agreement, or during the
collective bargaining negotiation [Art.
251]
d. Right to own property, real or
personal, for the use and benefit of the
labor organization and its members
[Art. 251]
e. Right to sue and be sued in its
registered name [Art. 251]
f. Right to undertake all other activities
designed to benefit the organization
and its members, including
cooperative, housing, welfare and
other projects not contrary to law [Art.
251]
g. Right to draw up their constitutions
and rules to elect their representatives
in full freedom, to organize their
administration and activities and to
formulate their programs [Minette
Baptista, et al. v. Rosario Villanueva, et
al., G.R. No. 194709 (2013)]
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5. Rights and Conditions of
Membership in Legitimate Labor
Organizations [Art. 250]
a. Direct election and tenure of officers
b. Payment of membership dues and
other assessments
6. Check Off, Assessments, Union
Dues, and Agency Fees
a. Check-off
A check-off is a process or device whereby the
employer, on agreement with the Union,
recognized as the proper bargaining
representative, or on prior authorization from
the employees, deducts union dues or agency
fees from the latter’s wages and remits them
directly to the Union [Marino v. Gamilla, G.R.
No. 149763 (2009)].
The system of check-off is primarily for the
benefit of the Union and, only indirectly, for the
benefit of the individual employees [Marino v.
Gamilla, G.R. No. 149763 (2009)].
Note: For a check-off to be valid, it must comply
with the requirements of a valid special
assessment.
Jurisdiction over Check-off Disputes
The Bureau of Labor Relations has jurisdiction
to hear, decide and to mete out punishment
any violation under Art. 250 upon report of at
least 30% of the union membership OR
members specially concerned to the
Bureau.
Note: Secretary of Labor or his duly authorized
representative may inquire into financial
activities of legitimate labor orgs
a. UPON filing of complaint under oath
and supported by written consent of at
least 20% of total membership,
b. Provided, such inquiry shall not be
conducted during (60)-day freedom
period nor within the thirty (30) days
immediately preceding the date of
election of union officials [Art. 289].
LABOR 2
b. Assessment
Special assessments are payments for a
special purpose, especially if required only for
a limited time [Azucena].
General Rule: No special assessment or other
extraordinary fees may be levied upon the
members of a labor organization.
Exception: Unless authorized by a written
resolution of a majority of all the members at a
general membership meeting duly called for
the purpose [Art. 250 (n)].
Other than for mandatory activities under the
Code, the following may not be checked off
from any amount due to an employee without
an individual written authorization duly signed
by the employee:
a. special assessments
b. attorney’s fees
c. negotiation fees
d. or any other extraordinary fees
The authorization should specifically state the
amount, purpose and beneficiary of the
deduction [Art. 250 (o)].
Requisites for a Valid Special
Assessment
1. Authorization by a written resolution of
the majority of ALL the members at the
general membership meeting called for
the purpose;
2. Secretary’s record of the minutes of the
meeting; AND
3. Individual written authorization for
check off duly signed by the employees
concerned which indicates the:
a. Amount
b. Purpose
c. Beneficiary of deduction [Gabriel v.
SOLE, G.R. No. 115949 (2000)].
Strict Compliance for Special
Assessment
There must be strict and full compliance with
the requisites. Substantial compliance is not
enough [Palacol v. Ferrer-Calleja, G.R. No.
85333 (1990)].
c. Union dues
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Union dues are payments to meet the union’s
general and current obligations. The payment
must be regular, periodic, and uniform
[Azucena].
Every payment of fees, dues or other
contributions by a member shall be evidenced
by a receipt:
a. signed by the officer or agent making
the collection and
b. entered into the record of the
organization to be kept and maintained
for the purpose [Art. 250 (h)].
d. Agency Fees
Art. 259 (e) [2nd sentence to last
sentence]
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.
Exception: 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.
• Amount of reasonable fee:
equivalent to the dues and other fees
paid by members of the recognized
collective bargaining agent
• Condition for assessment: If such
non-union members accept the
benefits under the collective bargaining
agreement:
o Provided, That the individual
authorization required under
Article 242, paragraph (o) shall
not apply to the non-members
of the recognized collective
bargaining agent
An amount, equivalent to union dues, which a
non-union member pays to the union because
he benefits from the CBA negotiated by the
union [Azucena].
LABOR 2
Rationale for Allowing Agency Fees
The legal basis of the union’s right to agency
fees is neither contractual nor statutory but
quasi-contractual, deriving from the
established principle that non-union employees
may not unjustly enrich themselves by
benefiting from employment conditions
negotiated by the bargaining union [Holy Cross
of Davao College, Inc v. Hon. Joaquin, G.R.
No. 110007 (1996)].
When Agency Fee Assessed
If such a non-union member accepts the
benefits under the collective bargaining
agreement [Art. 259(e)].
Measure of Fee
A reasonable fee equivalent to the dues and
other fees paid by members of the recognized
collective bargaining agent [Art. 259(e)].
Requirements:
1. Non-member of SEBA
2. Member of Collective Bargaining Unit
3. Reasonable fee equivalent to the dues
and other fees paid by members
4. Acceptance of CBA benefits
7. Union Security Clause
Union security is a generic term which is
applied to and comprehends “closed shop,”
“union shop,” “maintenance of membership” or
any other form of agreement which imposes
upon employees the obligation to acquire or
retain union membership as a condition
affecting employment [NUWHRAIN v. NLRC,
G.R. No. 179402 (2008)].
[Union security clause] is an indirect restriction
on the right of an employee to self-
organization. It is a solemn pronouncement of
a policy that while an employee is given the
right to join a labor organization, such right
should only be asserted in a manner that will
not spell the destruction of the same
organization [Tanduay Distillery Labor Union v.
NLRC, G.R. No. 75037 (1987)].
[Employees], although entitled to disaffiliation
from their union to form a new organization of
their own, must, however, suffer the
consequences of their separation from the
union under the security clause of the CBA
[Villar v. Inciong, G.R. No. L-50283-84 (1983)].
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Statutory Basis and Rationale
Art. 259(e). Unfair Labor Practices of
Employers: 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.
The law has allowed stipulations for 'union
shop' and 'closed shop' as means of
encouraging workers to join and support the
union of their choice in the protection of their
rights and interests vis-a-vis the employer [Del
Monte Philippines v. Salvidar, G.R. No. 158620
(2006)].
Purpose: To safeguard and ensure the
existence of the union and thus, promote
unionism in general as a state policy.
It is the policy of the State to promote unionism
to enable the workers to negotiate with the
management on the same level and with more
persuasiveness than if they were to individually
and independently bargain for the
improvement of their respective conditions […]
For this reason, the law has sanctioned
stipulations for the union shop and closed shop
as a means of encouraging the workers to join
and support the labor union of their own choice
vis-à-vis the employer [Liberty Flour Mills
Employees v. Liberty Flour Mills, G.R. No.
58768-70 (1989)].
Coverage
General Rule: All employees in the bargaining
unit covered by the union security clause are
subject to its terms.
Exception:
1. Employees who are already members
of another union at the time of the
signing of the collective bargaining
agreement may not be compelled by
any union security clause to join any
union [Art. 254 (e)].
2. Employees already in service at the
time the closed shop union security
clause took effect.
a. A closed shop provision in a
CBA is not to be given a
retroactive effect as to preclude
LABOR 2
its being applied to employees
already in service [Guijarno v.
CIR, G.R. No. L-28791-93
(1973)].
3. Any employee who, at the time the
union security clause took effect, is a
bona fide member of religious
organization which prohibits its
members from joining labor unions on
religious grounds [Reyes v. Trajano,
209 SCRA 484 (1992)].
4. Confidential employees who are
excluded from the rank-and-file
bargaining unit.
5. Employees excluded from the union
security provisions by express terms of
the agreement [BPI v. BPI Employees
Union-Davao Chapter, G.R. No.
164301 (2010)].
a. Closed-shop
Condition for Employment
An agreement where only union members may
be employed and, for the duration of the
agreement, remains a member in good
standing of a union.
A closed shop may be defined as an enterprise
in which, by agreement between the employer
and his employees or their representatives, no
person may be employed in any or certain
agreed departments of the enterprise unless
he or she is, becomes, and, for the duration of
the agreement, remains a member in good
standing of a union entirely comprised of or of
which the employees in interest are a part
[General Milling Corporation (GMC) v. Casio,
G.R. No. 149552 (2010)].
The closed shop provision can also be a potent
weapon wielded by the union against the
workers whom the union is supposed to protect
in the first place. Hence, any doubt as to the
existence of a closed shop provision in the CBA
will be resolved in favor of the nonexistence of
the closed shop provision [Azucena].
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b. Maintenance of Membership Shop
Condition for Continued Employment
An agreement where present and future
employees are not compelled to join the SEBA,
but once so joined, they must maintain their
membership as a condition for continued
employment until they are promoted or
transferred out of the bargaining unit or the
agreement is terminated.
There is maintenance of membership shop
when employees, who are union members as
of the effective date of the agreement, or who
thereafter become members, must maintain
union membership as a condition for [their]
continued employment until they are promoted
or transferred out of the bargaining unit or the
agreement is terminated [General Milling
Corporation (GMC) v. Casio, G.R. No. 149552
(2010)].
c. Union Shop
Condition for Continued Employment
There is union shop when all new regular
employees are required to join the union within
a certain period as a condition for their
continued employment [General Milling
Corporation (GMC) v. Casio, G.R. No. 149552
(2010)].
Non-members may be hired, but to retain
employment, they must become union
members after a certain period. The
requirement applies to present and future
employees [Azucena].
d. Modified Union Shop
Condition for Continued Employment of
Future Employees
Employees who are not union members at the
time of signing the contract need not join the
union, but all workers hired thereafter must join
[Azucena].
e. Agency Shop
Employees belonging to an appropriate
collective 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
LABOR 2 LABOR LAW
the recognized collective bargaining agent, if it is based on a [union security clause] of a
such non-union members accept the benefits CBA, i.e. the substantive as well as the
under the collective agreement. procedural due process requirements [Del
Monte v. Saldivar, G.R. No. 158620 (2006)].
Provided, That the individual authorization
required under Art [250], paragraph (o) of [the Obligations and Liabilities
Labor] Code shall not apply to non-members of Where the employer dismissed his employees
the recognized collective bargaining agent [Art. in the belief in good faith that such dismissal
259(e)]. was required by the [union security provision]
of the collective bargaining agreement with the
Termination Due to Union Security union, he may not be ordered to pay back
Provision compensations to such employees although
Termination of employment by virtue of a union their dismissal is found to be illegal
security clause strengthens the union and [Confederated Sons of Labor v. Anakan
prevents disunity in the bargaining unit within Lumber Co., G.R. No. L-12503 (1960)].
the duration of the CBA. The authorized
bargaining representative gains more numbers As dictated by fairness, […] the union shall be
and strengthens its position as against other liable to pay their backwages. This is because
unions which may want to claim majority management would not have taken the action
representation [Alabang Country Club v. it did, had it not been for the insistence of the
NLRC, G.R. No. 170287 (2008)]. labor union seeking to give effect to its
interpretation of a closed shop provision
Requisites for the Enforcement Of Union [Guijarno v. CIR, G.R. No. L-28791-93 (1973)].
Security Clauses
In terminating the employment of an employee
by enforcing the union security clause, the
employer needs only to determine and prove
that:
1. The union security clause is applicable;
2. The union is requesting for the
enforcement of the union security
provision in the CBA;
3. There is sufficient evidence to support
the union’s decision to expel the
employee from the union [Alabang
Country Club v. NLRC, G.R. No.
170287 (2008)].

Company Must Conduct Separate

Investigation or Hearing
The enforcement of union security clauses is
authorized by law provided such enforcement
is not characterized by arbitrariness, and
always with due process. Even if there are
valid grounds to expel the union officers, due
process requires that these union officers be
accorded a separate hearing by respondent
company [Malayang Samahan ng
Manggagawa sa M. Greenfield v. Ramos, G.R.
No. 113907 (2000)].

Requirement of Due Process

The requirements laid down by the law in
determining whether or not an employee was
validly terminated must still be followed even if
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LABOR 2
C. Bargaining Representative
The labor organization designated or selected
by the majority of the employees in an
appropriate collective bargaining unit shall be
the exclusive representative of the employees
in such unit for the purpose of collective
bargaining [Art. 267].
Labor Management Council
Any provision of law to the contrary
notwithstanding, workers shall have the right:
a. 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.
b. To form labor-management councils,
for this purpose [Art. 267].
Selection of Representatives
In organized establishments,
• the workers’ representatives to the
council shall be nominated by the
exclusive bargaining representative.
In establishments where no legitimate labor
organization exists,
• the workers representative shall be
elected directly by the employees at
large [Sec. 2, Rule XXI, Book V, IRR].
Eligible Voter
Eligible voter refers to a voter belonging to the
appropriate bargaining unit that is the subject
of the petition for certification election [Sec.
1(q), Rule VIII, Book V, IRR].
All employees who are members of the
appropriate bargaining unit three (3) months
prior to the filing of the petition shall be eligible
to vote [Sec. 6, Rule IX, Book V, IRR].
Note: Rule VIII, Sec. 14 (f) and Rule IX, Sec. 6
refer to employees as those employed 3
months prior to the issuance of the order/the
filing of the petition for certification election
while Rule IX, Sec. 2 reckon the period of
employment from the “time of filing the
petition”. This difference has not been resolved
in any case before the Supreme Court.
All rank and file employees in the appropriate
bargaining unit, whether probationary or
permanent are entitled to vote. The Code
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makes no distinction as to their employment
status [...] All they need to be eligible to support
the petition is to belong to a bargaining unit
[Airtime Specialists, Inc. v. Ferrer-Calleja, G.R.
No. 80612-16 (1990)].
Rationale for Non-Distinction Policy
Collective bargaining covers all aspects of the
employment relation and the resultant CBA
binds all employees in the bargaining unit. All
rank and file employees, probationary or
permanent, have a substantial interest in the
selection of the bargaining representative
[Airtime Specialists, Inc. v. Ferrer-Calleja,
supra].
Dismissed Employees [Sec. 6, Rule IX,
Book V, IRR]
General Rule: [Dismissed] employees [who]
contested legality of the dismissal in a forum of
appropriate jurisdiction at the time of the
issuance of the order for conduct of a
certification election.
Exception: Dismissal was declared valid in a
final judgment at the time of the conduct of the
certification election.
Disagreement Over Voters’ List
All contested voters shall be allowed to vote
[but] their votes shall be segregated and sealed
in individual envelopes [Sec. 6, Rule IX, Book
V, IRR].
Voting List and Voters
The basis of determining voters may be agreed
upon by the parties (i.e. the use of payroll)
[Acoje Workers Union v. NAMAWU, G.R. No.
L-18848 (1963)].
Non-Participation in Previous Election
has No Effect
Failure to take part in previous elections is no
bar to the right to participate in future elections.
No law, administrative rule or precedent
prescribes forfeiture of the right to vote by
reason of neglect to exercise the right in past
certification elections [Reyes v. Trajano, G.R.
No. 84433 (1992)].
LABOR 2 LABOR LAW
1. Modes to Acquire Status as Sole Failure to comply within the prescribed period
and Exclusive Bargaining Agent shall be deemed withdrawal of the request.
(SEBA)
If Unorganized Establishment [Sec. 4]
a. Finding of only 1 legitimate labor
a. SEBA Certification
organization – Regional Director shall
call a conference within five (5) working
Procedure [Rule VII, Book V, IRR] days for the SUBMISSION of:
1. File request for SEBA Certification [Sec. 1] 1. Names of employees in the
covered bargaining unit who signify
Who: Any legitimate labor organization support for certification; [and these]
employees comprise at least
File where: Regional Office which issued its majority of the number of
certificate of registration or certificate of
employees in the covered
creation of chartered local bargaining unit; and
2. Certification under oath by the
2. Indicate in the request [Sec. 2]: president of the requesting union or
a. Name and address of the requesting local that all documents submitted
legitimate labor organization; are true and correct based on
b. Name and address of the company personal knowledge
where it operates; b. Failure to Complete Requirements for
c. Bargaining unit sought to be SEBA Certification - the request for
represented; SEBA certification shall be referred to
d. Approximate number of employees in the election officer for the conduct of
the bargaining unit; and election pursuant to Rule IX of this
e. Statement of the existence/non- rules.
existence of other labor
organization/CBA. Note: If there is more than one Legitimate
Labor Organization, Art. 269 applies.
Certificate of Duly Certified by
If Organized Establishment [Sec. 6]
If the Regional Director finds the establishment
Registration President of requesting organized he/she shall refer it to the mediator-
union arbitrator for determination and propriety of
conducting a certification election.
Creation of President of the local
chartered local federation of the local 4. Regional Director shall act on the
submission [Sec. 4.1]
3. Regional Director shall act on the request
[Sec. 3] Incomplete The request shall be
requirements referred to Election Officer
When: Within one (1) day from submission of for the conduct of election
request pursuant to Rule IX.

Action: Complete Regional Director shall

a. Determine whether request is requirements issue a certification as
compliant with Sec. 2 and whether the SEBA
bargaining unit sought to be
represented is organized or not; and
b. Request a copy of the payroll 5. Regional Director shall post the SEBA
Certification [Sec. 4.1]
Note: If the Regional Director finds it deficient,
he/she shall advise the requesting union or Period: Fifteen (15) consecutive days
local to comply within ten (10) days from notice.

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LABOR 2
Where: At least two (2) conspicuous places in
the establishment or covered bargaining unit.
Effect of SEBA Certification [Sec. 4.2]
Upon the issuance of the [SEBA Certification],
the certified union or local shall enjoy all the
rights and privileges of an exclusive bargaining
agent of all the employees in the covered
bargaining unit.
The certification shall bar the filing of a [PCE]
by any labor organization for a period of one (1)
year from the date of its issuance.
Upon expiration of this one-year period, any
legitimate labor organization may file a [PCE]
in the same bargaining unit represented by the
certified labor organization, unless a [CBA]
between the employer and the certified labor
organization was executed and registered with
the Regional Office in accordance with Rule
XVII.
b. Certification/Consent Election
1. Consent Election
Consent Election means the election
voluntarily agreed upon by the parties with or
without the intervention by DOLE [Sec. 1(i),
Rule I, Book V, IRR].
Procedure [Sec. 11, Rule VIII, Book V, IRR]
1. The parties may agree to hold a
consent election
a. Where no petition for certification
election was filed; or
b. Where a petition for certification
election had been filed, and upon
the intercession of Med-Arbiter
[Sec. 25, Rule VIII, Book V, IRR].
2. Mediator-Arbiter shall call for the
consent election, reflecting the parties’
agreement and the call in the minutes
of the conference. Regional Director or
authorized representative shall
determine the Election Officer by raffle
in the presence of representatives of
the contending unions if they so desire.
3. First pre-election conference is
scheduled within ten (10) days from the
date of the agreement. Subsequent
conferences may be called to expedite
and facilitate the holding of the consent
election.
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2. Certification Election
Certification Election is the process of
determining, through secret ballot, the sole and
exclusive representative of the employees in
an appropriate bargaining unit for purposes of
collective bargaining or negotiation [Sec. 1(i),
Rule I, Book V, IRR].
Purpose
The purpose of a certification election is
precisely the ascertainment of the wishes of
the majority of the employees in the
appropriate bargaining unit: to be or not to be
represented by a labor organization, and in the
affirmative case, by which particular labor
organization [Reyes v. Trajano, G.R. No.
84433 (1992)].
Petition For Cancellation of Union
Registration DOES NOT Suspend or
Prevent Filing of Certification Election
A petition for cancellation of union registration
shall not:
1. suspend the proceedings for
certification election; nor
2. prevent the filing of a petition for
certification election [Art. 246].
A certification election can be conducted
despite pendency of a petition to cancel the
union registration certificate. For the fact is that
at the time the [union], whose registration
certificate is sought to be cancelled, filed its
petition for certification, it still had the legal
personality to perform such act absent an order
directing its cancellation [Association of Court
of Appeals Employees v. Calleja, G.R. No.
94716 (1991)].
Allegation of Company Union a
Prejudicial Question to a Petition for
Certification Election
A complaint for unfair labor practice may be
considered a prejudicial question in a
proceeding for certification election when it is
charged therein that one or more labor unions
participating in the election are being aided, or
are controlled, by the company or employer
[company union] [United CMC Textile Worker’s
Union v. BLR, G.R. No. 51337(1984)].
LABOR 2
Rationale: The certification election may lead
to the selection of an employer-dominated or
company union as the employees’ bargaining
representative, and when the court finds that
said union is employer-dominated in the unfair
labor practice case, the union selected would
be decertified and the whole election
proceedings would be rendered useless and
nugatory [B.F. Goodrich Phils. Marikina v. B.F.
Goodrich Confidential and Salaried Employees
Union, G.R. No. L-34069-70 (1973)].
Nature of Proceeding
Certification election is the most effective and
the most democratic way of determining which
labor organization can truly represent the
working force in the appropriate bargaining unit
of a company [Samangang Manggagawa sa
PERMEX v. SOLE, G.R. No. 107792 (1998)].
[It] is not a ‘litigation’ [...] but a mere
investigation of a non-adversary, fact-finding
character [...]
The determination of the proceeding does not
entail the entry of remedial orders or redress of
rights, but culminates solely in an official
designation of bargaining units and an
affirmation of the employees’ expressed choice
of bargaining agent [Angat River Irrigation
System v. Angat River Worker’s Union
(PLUM), G.R. Nos. L-10943 and L-10944
(1957)].
Technical rules and objections should not
hamper the correct ascertainment of the labor
union that has the support or confidence of the
majority of the workers and is thus entitled to
represent them in their dealings with
management [Port Workers Union v.
Laguesma, G.R. Nos. 94929-30 (1992)].
Certification Union Election
Election
To determine the To elect union
Exclusive Bargaining officers
Agent
All members of the Only union members
appropriate may vote
bargaining unit
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Who May Vote [Sec. 6, Rule IX, Book V,
IRR]
All employees who are members of the
appropriate bargaining unit three (3) months
prior to the filing of the petition/request shall be
eligible to vote.
An employee who has been dismissed from
work but has contested the legality of the
dismissal in a forum of appropriate jurisdiction
at the time of the issuance of the order for the
conduct of a certification election shall be
considered a qualified voter, unless his/her
dismissal was declared valid in a final judgment
at the time of the conduct of the certification
election.
In case of disagreement over the voters’ list or
over the eligibility of voters, all contested voters
shall be allowed to vote. But their votes shall be
segregated and sealed in individual envelopes.
Who May File [Sec. 1, Rule VIII, Book V,
IRR]
1. Legitimate labor organization [Art. 219
(h)]
2. Local/chapter that has been issued a
charter certificate
The chapter shall acquire legal personality
only for purposes of filing a petition for
certification election from the date it was
issued a charter certificate [Art. 241]
3. National union or federation that has
issued a charter certificate to its
local/chapter [in behalf of the latter]
4. A group of legitimate labor unions in a
private establishment organized for
collective bargaining or for dealing with
employers concerning terms and
conditions of employment for their
member unions or for participating in
the formulation of social and
employment policies, standards and
programs, registered with the BLR in
accordance with Rule III Sec. 2-B [Sec.
1 (ll), Rule I, Book V, IRR]
5. Employer (when requested to bargain
collectively and no existing CBA)
Requisites:
a. Employer is requested to bargain
collectively; AND
b. No existing registered CBA in the
unit [Art. 270]
LABOR 2
Venue for Filing Petition
File with the Regional Office which issued the
petitioning union’s certificate of registration or
certificate of creation of chartered local.
At [petitioner’s option], [it may file] the petition
and its supporting documents [...] online [Sec.
2, Rule VIII, Book V, IRR].
Where two or more petitions involving the
same bargaining unit [Sec. 2, Rule VIII, Book
V, IRR]:
Filed in Automatically consolidated with
One [Med-Arbiter] who first acquired
Regional jurisdiction.
Office
Filed in The Regional Office in which the
Different petition was first filed shall
Regional exclude all others; [...] the latter
Offices shall indorse the petition to the
former for consolidation.
Procedure: Certification election in an
unorganized establishment
Unorganized Establishment
[It is an] establishment where there is no
certified bargaining agent [Art. 269].
Procedure [Art. 269]
1. File a petition for certification election.
2. Upon filing of the petition, the Med-
Arbiter shall automatically conduct a
certification election.
Filing of Petition is by a Legitimate Labor
Organization
It cannot be filed by an unregistered labor
organization. Art. 251 enumerates the rights
granted to a legitimate labor organization and
one of those rights is the right to be chosen as
the exclusive bargaining representative. This is
one way the law encourages union registration.
Note: Art. 269 should be related to SEBA
Certification. If there are multiple LLOs in an
unorganized establishment, Art. 269 applies. If
there is only one LLO in an unorganized
establishment, Rule VII on SEBA Certification
applies. Under this rule, when there is failure to
complete requirements, the Regional Director
will refer it to the Election Officer.
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Procedure: Certification election in an
organized establishment
Organized Establishment
Refers to an enterprise where there exists a
recognized or certified sole and exclusive
bargaining agent [Sec. 1(ll), Rule I, Book V,
IRR].
Procedure [Art. 268]
1. File a verified petition questioning the
majority.
2. It must be filed within the 60-day period
before expiration of CBA (freedom
period).
3. Supported by written consent of at
least 25% of ALL employees in the
bargaining unit (substantial support).
4. Med-Arbiter shall automatically order
an election.
When Petition Must be Filed
Freedom Period
Within the sixty (60)-day period before the
expiration of the collective bargaining
agreement [Art. 271].
Note: The expiration referred to is the
expiration of the 5-year period for the
representation aspect [see Art. 265].
Rationale of Prohibition of Filing Outside
the Freedom Period
To ensure industrial peace between the
employer and its employees during the
existence of the CBA [Republic Planters Bank
Union v. Laguesma, G.R. No. 119675 (1996)].
Signing of Authorization is Merely
Preparatory
What is prohibited is the filing of the petition for
certification election outside the 60-day
freedom period [...] The signing of the
authorization to file was merely preparatory to
the filing of the Petition for Certification
Election, or an exercise of [the] right to self-
organization [PICOP Resources Inc. v. Ricardo
Dequita, G.R. No. 172666 (2011)].
25% Substantial Support Rule
In organized establishments, the incumbent
sole bargaining agent should not be easily
replaced for that would disturb industrial peace.
To justify the disturbance, it must appear that
LABOR 2
at least a substantial number (25%
requirement) seeks to have a new exclusive
bargaining unit.
Discretionary Rule
The [Med-Arbiter], in the exercise of sound
discretion, may order a certification election
notwithstanding the failure to meet the [25%]
requirement [in petitions for certification
election in an organized establishment] [Scout
Albano Memorial College v. Noriel, G.R. No. L-
48347 (1978)].
Inapplicable to Motions for Intervention
[The] requisite written consent of at least 20%
(now 25%) of the workers in the bargaining unit
applies to certification election only, and not to
motions for intervention. Nowhere in the legal
provisions [and in the Omnibus Rules] does it
appear that a motion for intervention in a
certification election must be accompanied by
a similar written consent [PAFLU v. Calleja,
G.R. No. 79347 (1989)].
Intervenors
1. Incumbent bargaining agent as forced
intervenor: The incumbent bargaining
agent shall automatically be one of the
choices in the certification election as
forced intervenor [Sec. 8, Rule VIII,
Book V, IRR].
2. Legitimate labor union other than the
incumbent bargaining agent operating
within the bargaining unit: When a
petition for certification election was
filed in an organized establishment,
any legitimate labor union other than
the incumbent bargaining agent
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operating within the bargaining unit
may file a motion for intervention with
the Med-Arbiter during the freedom
period of the collective bargaining
agreement.
In an unorganized establishment, the motion
shall be filed at any time prior to the decision of
the Med-Arbiter. The motion shall be resolved
in the same decision issued in the petition for
certification election.
In both cases, the form and contents of the
motion shall be the same as that of a petition
for certification election [Sec. 9, Rule VIII, Book
V, IRR].
When to File Motion for Intervention
Organized establishment: during the freedom
period of the collective bargaining agreement.
Unorganized establishment: any time prior to
the decision of the Med-Arbiter [Sec. 9, Rule
VIII, Book V, IRR].
Effect of Withdrawal of Signatures
The Employees’ Withdrawal from a Labor
Union Made
1. Before the filing of the petition for
certification election is presumed
voluntary
2. After the filing of such petition is
considered to be involuntary and does
not affect the [petition] [S.S. Ventures
International v. S.S. Ventures Labor
Union, G.R. No. 161690 (2008)].
LABOR 2 LABOR LAW
Organized v. Unorganized Establishments
Art. 268: Organized Art. 269: Unorganized

Sole and Existing None

exclusive
bargaining agent

Must be VERIFIED No need to be verified

Petition filed

No petition for certification election EXCEPT Not applicable (i.e. no

within 60 days before the expiration of the freedom period; petition can
collective bargaining agreement (See Arts. be filed anytime)
264 and 265)
Freedom period
Rationale: To keep industrial peace in
organized establishments

Must be duly supported by 25% of ALL THE NO substantial support rule

MEMBERS OF THE APPROPRIATE
BARGAINING UNIT Rationale: Intention of law is
Substantial to bring in the union, to
support rule Rationale: Law wants to know the intention implement policy behind Art.
of the employees – if they really want a 218A.
certification election, since they already have
a bargaining agent

Certification Election v. Consent Election

Certification Election Consent Election

"Certification Election" or "Consent Election" refers to the process of

determining through secret ballot the sole and exclusive representative of the
employees in an appropriate bargaining unit for purposes of collective
Purpose bargaining or negotiation. A certification election is ordered by the Department,
while a consent election is voluntarily agreed upon by the parties, with or
without the intervention by the Department [Book V, Rule 1, Sec. 1(h)]

Rule IX Rule VII, Sec. 11, pars. 1, 2

SECTION 2. Raffle of the Case. —
Within twenty-four (24) hours from
receipt of the notice of entry of final
judgment granting the conduct of a
certification election, the Regional
General Director shall cause the raffle of the case
Procedure to an Election Officer who shall have
control of the pre-election conference
and election proceedings. (1a)
The contending unions may agree
to the holding of an election, in
which case it shall be called a
consent election. The mediator-
arbiter shall forthwith call for the
consent election, reflecting the
parties' agreement and the call in
the minutes of the conference. The
mediator-arbiter shall immediately
forward the records of the petition to
the regional director or his/her
authorized representative for the
determination of the election officer

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LABOR 2
With the exception of aforementioned provisions that specifically apply only for
Certification Election or Consent Election respectively, Rule IX, on the Conduct
of Certification, Secs. 3 – 21, applies to both certification and consent elections
Ordered by the DOLE
Conduct
c. Bars to the Holding of Certification/
Consent Election
Bars to a Certificate Election
Petition for certification may be filed:
General Rule: Anytime
Exceptions:
1. One-year bar rule
2. Negotiation bar rule
3. Deadlock bar rule
4. Contract bar rule
See Grounds for denying a Petition for
Certification Election
1. One-Year Bar Rule
No certification election may be held within 1
year from the time a valid certification, consent
or run-off election has been conducted within
the bargaining unit.
[If the order of the Med-Arbiter certifying the
results of the election has been appealed], the
running of the one-year period shall be
suspended until the decision on the appeal
becomes final and executory [Sec. 3(a), Rule
VIII, Book V].
Note: This bar also applies to a SEBA
Certification under Rule VII. “The certification
shall bar the filing of a petition for certification
election by any labor organization for a period
of one (1) year from the date of its issuance”
[Sec. 4.2, Rule VII, Book V, IRR].
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who shall be chosen by raffle in the
presence of representatives of the
contending unions if they so desire.
Voluntarily agreed upon by the
parties, with or without the
intervention of DOLE
2. Negotiation Bar Rule
No certification of election may be filed when:
1. Within 1 year after the valid certification
election
2. The DULY CERTIFIED union has
COMMENCED AND SUSTAINED
negotiations in good faith with the
employer
3. In accordance with Art. 261 of the
Labor Code Sec. 3(b), Rule VIII, Book
V
3. Deadlock Bar Rule
No certification of election may be filed when:
1. The incumbent or certified bargaining
agent is a party;
2. A bargaining deadlock had been:
a. Submitted to conciliation or
arbitration or;
b. Had become the subject of a valid
notice of strike or lockout [Sec.
3(c), Rule VIII, Book V, IRR].
A “deadlock” is defined as the “counteraction of
things producing entire stoppage;
• a state of inaction or of neutralization
caused by the opposition of persons or
of factions (as in government or voting
body): standstill.” [...]
• The word is synonymous with the word
impasse which [...] “presupposes
reasonable effort at good faith
bargaining which, despite noble
intentions, does not conclude in
agreement between the parties”
[Divine World University v. SOLE, G.R.
No. 91915 (1992)].
LABOR 2
4. Contract Bar Rule
BLR shall not entertain any petition for
certification election or any other action which
may disturb the administration of DULY
REGISTERED existing collective bargaining
agreements affecting the parties, except under
Arts. 264, 265, and 268 (60-day freedom
period) [Art. 238].
No petition for certification election may be filed
when a [CBA] between the employer and a
SEBA has been registered in accordance with
Art. 237.
Where such [CBA] is registered, the petition
may be filed only within sixty (60) days prior to
its expiry [Sec. 3(d), Rule VIII, Book V, IRR].
The Contract-Bar Rule shall apply in any of the
following: (1) when there exists an unexpired
registered CBA; or (2) when there is no
challenge on the representation status of the
incumbent union during the freedom period
[D.O. No. 40-1-15].
The five-year representation status acquired by
an incumbent bargaining agent either through
single enterprise collective bargaining or multi-
employer bargaining shall not be affected by a
subsequent [CBA] executed between the same
bargaining agent and the employer during the
same five-year period [Sec. 7, Rule XVII, Book
V, IRR].
Despite an agreement for a CBA with a life of
more than five years, either as an original
provision or by amendment, the bargaining
union’s exclusive bargaining status is effective
only for five years and can be challenged within
sixty (60) days prior to the expiration of the
CBA’s first five years [FVC Labor Union-
PTGWO v. SANAMA-FVC-SIGLO, G.R. No.
176249 (2009)].
The rule is that despite the lapse of the formal
effectivity of the CBA the law still considers the
same as continuing in force and effect until a
new CBA shall have been validly executed.
Hence, the contract bar rule still applies
[Colegio de San Juan de Letran v. Association
of Employees, G.R. No. 141471 (2000)].
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d. Failure of Election, Run-Off Election,
Re-run Election
1. Failure of Election
The Election Officer shall declare a failure of
election in the minutes of the election
proceedings when:
1. Number of VOTES CAST is less than
the majority of the number of eligible
voters; AND
2. There are no material challenged votes
[Sec. 17, Rule IX, Book V, IRR].
Effect of Failure of Election [Sec. 19, Rule
IX, Book V, IRR]
Shall not bar the filing of a motion for the
immediate holding of a certification or consent
election within six (6) months from date of
declaration of failure of election.
Note: Under Sec. 1(tt), Rule I, Book V, a RE-
RUN ELECTION “shall likewise refer to an
election conducted after a failure of election
has been declared by the Election Officer
and/or affirmed by the [Med-Arbiter].” Thus,
under the Rules, this is the other definition of a
Re-Run Election.
Motion for Another Election After Failure
of Election [Sec. 20, Rule IX, Book V, IRR]
Within twenty-four (24) hours from receipt of
the motion, the Election Officer shall:
1. Immediately schedule another election
within fifteen (15) days from receipt of
motion
2. Cause posting of the notice of election
a. At least ten (10) days prior to
the scheduled date of election;
In two (2) most conspicuous
places in the establishment.
Same guidelines and list of voters shall be
used.
Nullification of Election Results
It is precisely because respect must be
accorded to the will of labor thus ascertained
that a general allegation of duress is not
sufficient to invalidate a certification election; it
must be shown by competent and credible
proof [United Employees Union of Gelmart
Industries Philippines (UEUGIP) v. Noriel, No.
L-40810 (1975)].
LABOR 2
2. Run-Off Election
Run-Off Election refers to an election
between the labor unions receiving the two (2)
highest number of votes in a certification or
consent election when the following requisites
have been complied with:
1. Valid election;
2. The certification or consent election
provides for three (3) or more choices;
3. None of the contending unions
received a majority of the VALID
VOTES cast;
4. No objections or challenges which if
sustained, can materially alter the
results; and
5. The total number of votes for all
contending unions is at least fifty
(50%) of the number of votes cast [Art.
268; Sec. 1(uu), Rule I, Book V, IRR;
Sec. 1, Rule X, Book V, IRR].
Illustration
The CBU has 100 members and 80 of which
voted. Union “A”= 30; Union “B”= 15; Union
“C”=15 and No Union= 20. There were no
invalid votes. Since none got the majority of the
80 valid votes (41) and the contending unions
obtained 60 votes (which is at least 50% of the
VOTES cast), a run-off election is proper. The
run-off will be between the labor unions
receiving “the two highest number of votes.”
Pursuant to Art. 268, when an election which
provides for three or more choices results in no
choice receiving a majority of the valid votes
cast, a run-off election shall be conducted
between the labor unions receiving the two
highest number of votes. Thus, the run-off will
be among Union “A”, “B”, and “C” [Azucena].
Procedure for Run-Off Election
Election Officer shall motu proprio conduct a
run-off election within ten (10) days from the
close of the election proceedings between the
labor unions receiving the two highest number
of votes.
“No Union” shall not be a choice in the run-off
election [Sec. 1, Rule X, Book V, IRR].
Same voters’ list used in the certification
election shall be used in the run-off election.
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The labor union receiving the GREATER
number of VALID VOTES cast shall be certified
as the winner [Sec. 2, Rule X, Book V, IRR].
Note: Please note the difference between valid
votes cast versus votes cast – valid votes
excludes spoiled votes.
3. Re-run election
Re-run Election refers to an election
conducted to break a tie between contending
unions, including between "no union" and one
of the unions. It shall likewise refer to an
election conducted after a failure of election
has been declared by the election officer
and/or affirmed by the mediator-arbiter [Sec.
1(tt), Rule 1, Book V, IRR].
Situations Contemplated
1. A tie between two (2) choices
2. Failure of Elections
Duty of Election Officer
1. Notify parties of a re-run election
2. Cause posting of notice within five (5)
days from said election
When will re-run be conducted
The re-run shall be conducted within 10 days
after the posting of notice of re-run election.
e. Employer as a Mere Bystander Rule
Bystander Rule
In all cases, whether the petition for
certification election is filed by an employer or
a legitimate labor organization, the employer
shall not be considered a party thereto with a
concomitant right to oppose a petition for
certification election [Art. 271].
The Employer’s Participation Shall Be
Limited To:
a. Being notified or informed of petitions
of such nature
b. Submitting the list of employees during
the pre-election conference, should the
Med-Arbiter act favorably on the
petition [Art. 271]
The principle of the employer as by-stander
shall be strictly observed throughout the
conduct of certification election.
LABOR 2
The employer shall not harass, intimidate,
threat[en], or coerce employees before, during
and after elections [Sec. 1, Rule IX, Book V,
IRR].
However, manifestation of facts that would aid
the [Med-Arbiter] in expeditiously resolving the
petition such as existence of a contract-bar,
one year bar or deadlock bar may be
considered [Sec. 1, Rule VIII, Book V, IRR].
The employer is not a party to a certification
election, which is the sole or exclusive concern
of the workers [...]
The only instance when the employer may be
involved in that process is when it is obliged to
file a petition for certification election on its
workers’ request to bargain collectively
pursuant to Art. 258 [now Art. 270] [Hercules
Industries, Inc. v. Sec. of Labor, G.R. No.
96255 (1992)].
[The employer] did not possess the legal
personality to file a motion to dismiss the
petition for certification election even if based
on the ground that its supervisory employees
are in reality managerial employees.
It is well-settled that an employer has no
standing to question a certification election
since this is the sole concern of the workers.
The only exception to this rule is Art. 258 [now
Art. 270] [PT&T v. Laguesma, G.R. No. 101730
(1993)].
[A] company’s interference in the certification
election below by actively opposing the same
[...] unduly creates a suspicion that it intends to
establish a company union [Oriental Tin Can
Labor Union v. Secretary of Labor, G.R. No.
116751 (1998)].
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D. Collective Bargaining
Definition, Nature, and Purpose
Collective bargaining is:
● Defined as negotiations towards a
collective agreement;
● One of the democratic frameworks
under the [Labor] Code;
● Designed to stabilize the relations
between labor and management and to
create a climate of sound and stable
industrial peace;
● A mutual responsibility of the employer
and the Union and is characterized as
a legal obligation [Kiok Loy v. NLRC,
G.R. No. L-54334 (1986)].
1. Duty to Bargain Collectively
Definition
The duty to bargain collectively
Meaning: the performance of a mutual
obligation to meet and convene promptly and
expeditiously in good faith
Purpose: negotiating an agreement with
respect to:
1. wages
2. hours of work,
3. and all other terms and conditions of
employment including:
a. proposals for adjusting any
grievances, or
b. questions arising under such
agreement, and
c. executing a contract incorporating
such agreements,
d. if requested by either party, but
such duty does not compel any
party to agree to a proposal or to
make any concession [Art. 263].
Jurisdictional Preconditions on Duty To
Bargain
1. Possession of the status of majority
representation of the employees’
representative in accordance with any
of the means of selection or
designation provided for by the Code;
2. Proof of majority representation; AND
3. Demand to bargain under Art. 261(a)
[Kiok Loy v. NLRC, G.R. No. L-54334
(1986)].
LABOR 2
Only the labor organization designated or
selected by the majority of the employees in an
appropriate collective bargaining unit is the
exclusive representative of the employees in
such unit for the purpose of collective
bargaining [Phil. Diamond Hotel and Resort Inc
v. Manila Diamond Hotel and Employees
Union, G.R. No. 158075 (2006); Art. 267].
a. Bargaining in Bad Faith
Good Faith vs. Bad Faith
There is no per se test of good faith in
bargaining.
Good faith or bad faith is an inference to be
drawn from the facts [Union of Filipino
Employees v. Nestle Philippines, Inc., G.R.
Nos. 158930-31 (2008)].
[T]he failure to reach an agreement after
negotiations continued for a reasonable period
does not establish a lack of good faith.
The laws invite and contemplate a collective
bargaining contract, but they do not compel
one [Tabangao Shell Refinery Employees
Association v. Pilipinas Shell Petroleum
Corporation, G.R. No. 170007 (2014)].
Duty to Bargain does NOT include:
1. Any legal duty [on the employer] to
initiate contract negotiation [Kiok Loy v.
NLRC, G.R. No. L-54334 (1986)];
2. The obligation to reach an agreement:
While the law makes it an obligation for
the employer and the employees to
bargain collectively with each other,
such compulsion does not include the
commitment to precipitately accept or
agree to the proposals of the other. All
it contemplates is that both parties
should approach the negotiation with
an open mind and make reasonable
effort to reach a common ground of
agreement [Union of Filipro Employees
v. Nestle, G.R. Nos. 158930-31
(2008)].
Evading the Mandatory Subjects of
Bargaining
The refusal to negotiate a mandatory subject of
bargaining is an unfair labor practice, although
either party has every desire to reach
agreement and earnestly and in all good faith
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bargains to that end. However, the duty to
bargain does not obligate the parties to make
concessions or yield a position fairly held
[Azucena].
The duty to bargain is limited to mandatory
bargaining subjects; as to other matters, he is
free to bargain or not to bargain.
Over mandatory subjects, a party may insist
on bargaining, even to the point of deadlock,
and his insistence will not be construed as
bargaining in bad faith.
Over a non-mandatory subject, on the other
hand, a party may not insist on bargaining to
the point of impasse, otherwise his insistence
can be construed as bargaining in bad faith.
Blue-Sky Bargaining
Blue-Sky Bargaining is defined as "unrealistic
and unreasonable demands in negotiations by
either or both labor and management, where
neither concedes anything and demands the
impossible." It actually is not collective
bargaining at all [Roberts Dictionary of
Industrial Relations as cited in Standard Bank
Chartered Employees Union v. Confesor, G.R.
No. 114974 (2004)].
Surface Bargaining
Surface bargaining is defined as "going
through the motions of negotiating," without
any real intent to reach an agreement [Roberts
Dictionary of Industrial Relations as cited in
Standard Bank Chartered Employees Union v.
Confesor, supra].
It violates the Act's requirement that parties
negotiate in "good faith." It is prohibited
because the bargaining status of a union can
be destroyed by going through the motions of
negotiating almost as easily as by bluntly
withholding recognition […] As long as there
are unions weak enough to be talked to death,
there will be employers who are tempted to
engage in the forms of collective bargaining
without the substance [K-MART Corporation v.
NLRB, 626 F.2d 704 (1980)].
Individual Bargaining
It is an unfair labor practice for an employer
operating under a CBA to negotiate with his
employees individually.
LABOR 2
That constitutes interference because the
company is still under obligation to bargain with
the union as the bargaining representative.
Individual bargaining contemplates a situation
where the employer bargains with the union
through the employees instead of the
employees through the union [The Insular Life
Assurance Co. Ltd., Employees Assn. v.
Insular Life Assurance Co. Ltd, G.R. No. L-
25291 (1971)].
Boulwarism
A take-it-or-leave-it approach in negotiation
constitutes bad faith. "Although the law cannot
open a man's mind, it can at least compel him
to conduct himself as if he were trying to
persuade and were willing to be persuaded. To
offer the union a contract saying 'Take it or
leave it,' is not bargaining collectively within the
meaning of the act” [Herald Delivery Carriers
Union v. Herald Publication Inc., G.R. No. L-
29966 (1974), citing NLRB v. Pilling and Son
Co. US, 119 F2D 32 (1941)].
2. Collective Bargaining Agreement
(CBA), Mandatory Provisions
Collective Bargaining Agreement or “CBA”
refers to the negotiated contract between a
legitimate labor organization and the employer
concerning wages, hours of work and all other
terms and conditions of employment in a
bargaining unit [Sec. 1(k), Rule I, Book V, IRR].
a. Nature of CBA
The CBA is the law between the parties and
they are obliged to comply with its provisions
[Zuellig Pharma Corporation v. Alice Sibal,
G.R. No. 173587 (2013)].
Although it is a rule that a contract freely
entered between the parties should be
respected, since a contract is the law between
the parties, said rule is not absolute [... Citing
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
[Halagueña v. Philippine Airlines, G.R. No.
172013 (2009)].
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b. Mandatory Provisions in a CBA
(1) Wages and other types of
compensation, including merit
increases;
(2) Working hours and working days,
including work shifts;
(3) Vacations and holidays;
(4) Bonuses;
(5) Pensions and retirement plans;
(6) Seniority;
(7) Transfer;
(8) Lay-offs;
(9) Employee workloads;
(10) Work rules and regulations;
(11) Rent of company houses;
(12) Union security arrangements
[Azucena]
No Duty to Agree Even on Mandatory
Subjects
Where the subject of the dispute is a
mandatory bargaining subject, either party may
bargain to an impasse as long as he bargains
in good faith. The duty to bargain does not
obligate a party to make concessions or yield a
position fairly held [Azucena].
3. Signing, Posting, Registration
a. Ratification
Within thirty (30) days from the execution of a
collective bargaining agreement
The parties shall submit copies of the same
directly to the Bureau or the Regional Offices
of the Department of Labor and Employment
for registration, accompanied with:
1. Verified proofs of its posting in two
conspicuous places in the place of
work, and
2. Ratification by the majority of all the
workers in the bargaining unit [Art. 237;
Book V, IRR Rule XVII, Sec. 2 (c)].
The posting of copies of the collective
bargaining agreement is the responsibility of
the employer.
The fact that there were "no impartial members
of the unit" is immaterial.
The purpose of the requirement is precisely to
inform the employees in the bargaining unit of
LABOR 2
the contents of said agreement so that they
could intelligently decide whether to accept the
same or not [Associated Labor Unions v.
Ferrer-Calleja, G.R. No. L-77282 (1989)].
1. Effect of Non-ratification
General Rule: The collective bargaining
agreement should be ratified by the majority of
all the members of the bargaining unit. Non-
compliance with this requirement renders the
CBA ineffective [Associated Trade Unions v.
Trajano, G.R. No. 75321 (1988)].
Exception: Even if there was no ratification,
the CBA will not be invalid or void considering
that the employees have enjoyed benefits from
it.
[The employees] cannot receive benefits under
provisions favorable to them and later insist
that the CBA is void simply because other
provisions turn out not to the liking of certain
employees [Planters Products Inc. v. National
Labor Relations Commission, G.R. No. 78524
(1989)].
Note: Ratification of the CBA by the employees
in the bargaining unit is not needed when the
CBA is a product of an arbitral award as a result
of voluntary arbitration under Art. 275 or from
the secretary’s assumption of jurisdiction or
certification under Art. 278 (g).
b. Registration
Within thirty (30) days from the execution of a
Collective Bargaining Agreement, the parties
shall submit copies of the same directly to the
Bureau or the Regional Offices of the
Department of Labor and Employment for
registration […] [Art. 237].
4. Term of CBA, Freedom Period
a. CBA Effectivity
If it is the first ever CBA, the effectivity date is
whatever date the parties agree on.
If it is a renegotiated CBA, the retroactivity of
the date of effectivity depends upon the
duration of conclusion [Art. 265]:
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1. If it is concluded within 6 months from
the expiry date, the new CBA will
retroact to the date following the expiry
date [Illustration: expiry date:
December 13; renegotiations
concluded on November 30; effectivity
date: December 14].;
2. If it is concluded beyond 6 months from
the expiry date, the matter of
retroaction and effectivity is left with the
parties.
b. Hold-Over Principle
Hold Over Principle
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:
a. during the 60-day period and/or
b. until a new agreement is reached by
the parties [Art. 264].
The last sentence of Art. 264, which provides
for automatic renewal [upon expiry], pertains
only to the economic provisions of the CBA
and does not include representational aspect
of the CBA.
A [CBA which continues to take effect beyond
its expiration date] cannot constitute a bar to a
filing of petition for certification election.
When there is a representational issue, the
status quo provision insofar as the need to
await the creation of a new agreement will not
apply.
Otherwise, it will create an absurd situation
where the union members will be forced to
maintain membership by virtue of the union
security clause existing under the CBA and,
thereafter, support another union when filing a
petition for certification election.
If we apply it, there will always be an issue of
disloyalty whenever the employees exercise
their right to self-organization. The holding of a
certification election is a statutory policy that
should not be circumvented, or compromised
[PICOP Resources, Inc. v. Taneca et al., G.R.
No. 160828 (2010)].
LABOR 2
Arbitrated CBA
In the absence of an agreement between the
parties, an arbitrated CBA takes on the nature
of any judicial or quasi-judicial award [Manila
Electric Company v. Quisumbing, G.R. No.
127598 (1999)].
[I]n the absence of the specific provision of law
prohibiting retroactivity of the effectivity of the
arbitral awards issued by the Secretary of
Labor pursuant to Art. 263(g) of the Labor
Code, [the Secretary] is deemed vested with
plenary powers to determine the effectivity
thereof [LMG Chemicals v. Secretary of Labor,
G.R. No. 127422 (2001)].
c. CBA Duration
Terms of a Collective Bargaining
Agreement: Any Collective Bargaining
Agreement that the parties may enter into shall,
insofar as the representation aspect is
concerned, be for a term of five (5) years [...]
All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than
three (3) years after its execution [Art. 265].
CBA Duration for economic provisions
3 years.
CBA Duration for Non-Economic
Provisions
5 years for representational or political issues;
cannot be renegotiated to extend beyond 5
years [FVC Labor Union-PTGWO v. SANAMA-
FVC-SIGLO, G.R. No. 176249 (2009)].
CBA Duration: Freedom period
No petition questioning the majority status of
the incumbent bargaining agent shall be
entertained and no certification election shall
be conducted by the DOLE outside of the
sixty-day period immediately before the
date of the expiry of such five-year term of
the Collective Bargaining Agreement [Art.
265].
CBA and 3rd Party Applicability
Labor contracts such as employment contracts
and CBAs are not enforceable against a
transferee of an enterprise, labor contracts
being in personam, is binding only between the
parties.
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As a general rule, there is no law requiring a
bona fide purchaser of the assets of an on-
going concern to absorb in its employ the
employees of the latter.
However, although the purchaser of the assets
or enterprise is not legally bound to absorb in
its employ the employees of the seller of such
assets or enterprise, the parties are liable to the
employees if the transaction between the
parties is colored or clothed with bad faith
[Sundowner Development Corporation v.
Drilon, G.R. No. 82341 (1989)].
Where the change of ownership is in bad faith
or is used to defeat the rights of labor, the
successor-employer is deemed to have
absorbed the employees and is held liable for
the transgressions of his or her predecessor
[Philippine Airlines, Inc. v. NLRC, G.R. No.
125792 (1998)].
General Rule: An innocent transferee of a
business establishment has no liability to the
employees of the transferor to continue
employing them. Nor is the transferee liable for
past unfair labor practices of the previous
owner.
Exception: When the liability therefore is
assumed by the new employer under the
contract of sale, or when liability arises
because of the new owner's participation in
thwarting or defeating the rights of the
employees.
The most that the transferee may do, for
reasons of public policy and social justice, is to
give preference to the qualified separated
employees in the filling of vacancies in the
facilities of the purchaser [Manlimos v. NLRC,
G.R. No. 113337 (1995)].
The general rule applies only to the sale and
purchase of asset. If the method of acquisition
is by way of purchase of controlling shares, the
employer remains the same and the new
owners must honor the existing contracts.
LABOR 2 LABOR LAW
E. Unfair Labor Practices Employer-Employee Relationship Required
General Rule: An unfair labor practice may be
committed only within the context of an
1. Nature, Aspects
employer-employee relationship [American
President Lines v. Clave, G.R. No. L-51641
Unfair labor practice refers to acts that violate (1982)].
the workers’ right to organize. The prohibited
acts are related to the workers’ right to self- Exception: “Yellow Dog” condition or
organization and to the observance of a contract: to require as a condition of
CBA. Without that element, the acts, no matter employment that a person or an employee
how unfair, are not unfair labor practices. The shall not join a labor organization or shall
only exception is Art. 259(f) [i.e. to dismiss, withdraw from one to which he belongs [Art.
discharge or otherwise prejudice or 259 (b)].
discriminate against an employee for having
given or being about to give testimony under
Parties Not Estopped from Raising ULP
this Code] [Philcom Employees Union v. Phil.
by Eventual Signing of the CBA
Global, G.R. No. 144315 (2006)].
The eventual signing of the CBA does not
operate to estop the parties from raising unfair
Nature of ULP
labor practice charges against each other
a. inimical to the legitimate interests of
[Standard Chartered Bank Union v. Confesor,
both labor and management, including
G.R. No. 114974 (2004)].
their right to bargain collectively and
otherwise deal with each other in an
Statutory Construction
atmosphere of freedom and mutual
The Labor Code leaves to the court the work of
respect
applying the law's general prohibitory
b. disrupt industrial peace
language, in light of infinite combinations of
c. hinder the promotion of healthy and
events, which may be charged as constituting
stable labor-management relations
an unfair labor practice [HSBC Employee
d. violations of the civil rights of both labor
Union v. NLRC, G.R. No. 125038 (1997)].
and management but are also criminal
offenses [Art. 258].
Note: Bargaining in bad faith constitutes Unfair
Labor Practice, which may be committed by
Four Forms of Unfair Labor Practice in
either Employer or Labor Organization.
Collective Bargaining
1. Failure or refusal to meet and convene
2. Evading the mandatory subjects of
2. By Employers
bargaining a. Interference/Restraint/Coercion
3. Bargaining in bad faith b. Yellow Dog Contracts
4. Gross violation of the CBA c. Contracting Out Services which
Discourage Unionism
d. Company Union
Purpose of the Policy Against ULPs
e. Discrimination to Encourage/
Protection of right to self-organization and/or
Discourage Unionism
collective bargaining:
f. Discrimination for having given or
a. The employee is not only protected
about to give testimony
from the employer but also from labor
g. Violation of Duty to Bargain Collectively
organizations.
h. Payment of Negotiation or Attorney’s
b. The employer is also protected from
Fees
ULP committed by a labor
i. Violation of a Collective Bargaining
organization.
Agreement
The public is also protected because it has an
interest in continuing industrial peace. a. Interference, Restraint or Coercion
To interfere with, restrain or coerce employees
in the exercise of their right to self-organization
[ Art. 259(a)].

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LABOR 2
The fact that the resignations of the union
members occurred during the pendency of the
case before the labor arbiter shows GMC’s
desperate attempts to cast doubt on the
legitimate status of the union. The ill-timed
letters of resignation from the union members
indicate that GMC had interfered with the right
of its employees to self-organization [General
Milling Corporation v. Court of Appeals, G.R.
146728 (2004)].
Interrogation
General Rule: employer may interrogate its
employees regarding their union affiliation for
legitimate purposes and with the assurance
that no reprisals would be taken against the
unionists.
Exception: when interrogation interferes with
or restrains employees' right to self-
organization [Phil. Steam Navigation Co. v.
Phil. Marine Officer’s Guild, G.R. Nos. L-20667
and 20669 (1965)].
Note: The interrogation of the ER should not be
persistent and/or hostile
Speech
The acts of a company which subjects a union
to vilification and its participation in soliciting
membership for a competing union are also
acts constituting a ULP [Phil. Steam Navigation
Co. v. Phil. Marine Officer’s Guild, G.R. Nos. L-
20667 and 20669 (1965)].
An employer may not send letters containing
promises or benefits, nor of threats of obtaining
replacements to individual workers while the
employees are on strike due to a bargaining
deadlock. This is tantamount to interference
and is not protected by the Constitution as free
speech [Insular Life Assurance Co. Employees
Assn. v. Insular Life Assurance Co. Ltd, G.R.
No. L-25291 (1971)].
Espionage
Espionage and/or surveillance by the employer
of union activities are instances of interference,
restraint or coercion of employees in
connection with their right to organize, form
and join unions as to constitute unfair labor
practice […] The information obtained by
means of espionage is invaluable to the
employer and can be used in a variety of cases
to break a union [Insular Life Assurance Co.
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Employees Assn. v. Insular Life Assurance
Co. Ltd, G.R. No. L-25291 (1971)].
Concerted Activities
The mass demonstration and stoppage of work
of the Union is not ULP. They did not
demonstrate against the employer, but against
the Pasig police for alleged human rights
abuses. This is merely an exercise of their
freedom of expression, assembly, and right to
redress of grievances enshrined in the
Constitution [Philippine Blooming Mills
Employment Organization v. Philippine
Blooming Mills Co., Inc., G.R. No. L-31195
(1973)].
Compare with the ruling in Biflex Phils. Inc.
Labor Union v. Filflex Industrial and
Manufacturing Corp:
Even if petitioners' joining the welga ng bayan
were considered merely as an exercise of their
freedom of expression, freedom of assembly or
freedom to petition the government for redress
of grievances, the exercise of such rights is not
absolute. For the protection of other significant
state interests such as the "right of enterprises
to reasonable returns on investments, and to
expansion and growth" enshrined in the 1987
Constitution must also be considered,
otherwise, oppression or self-destruction of
capital in order to promote the interests of labor
would be sanctioned. And it would give
imprimatur to workers' joining
demonstrations/rallies even before affording
the employer an opportunity to make the
necessary arrangements to counteract the
implications of the work stoppage on the
business, and ignore the novel "principle of
shared responsibility between workers and
employers" aimed at fostering industrial peace
[Biflex Phils. Inc. Labor Union v. Filflex
Industrial and Manufacturing Corp., G.R. No.
155679, Dec. 19, 2006].
b. Yellow Dog Contracts
Art. 259(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.
Condition of Employment
Yellow dog contracts require, as a condition of
employment, that a person or an employee
LABOR 2
shall not join a labor organization or shall
withdraw from one to which he belongs.
Requisites of a Yellow Dog Contract:
1. A representation by the employee that
he is not a member of a labor
organization;
2. A promise by the employee that he will
not join a union;
3. A promise by the employee that upon
joining a labor organization, he will quit
his employment [Azucena]
Example:
The evidence of record showed that the
workers who were not admitted to work
beginning from November, 1955 were
precisely those belonging to the union. The
Company Branch Manager had told the
workers point-blank that severance of their
connection with the UWFA was the remedy, if
they wanted to continue working with the
Company [Visayan Stevedore Trans. Co. v.
CIR, G.R. No. L-21696 (1967)]
c. Contracting Out Services Which
Discourage Unionism
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 right to self-organization
[Art. 259(c)].
General Rule: contracting out is not a ULP, but
is covered by the employer’s management
prerogative.
Exception [Art. 259 (c)]:
1. Contracted-out services or functions
are performed by union members AND
2. Contracting out will interfere with,
restrain, or coerce employees in the
exercise of their right to self-
organization.
d. Company Union
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 [Art. 259 (d)].
Company union means any labor
organization whose formation, function or
administration has been assisted by any act
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defined as unfair labor practice by this Code
[Art. 219(i)].
The employer commits ULP if it initiates,
dominates, or otherwise interferes with the
formation or administration of any labor
organization.
Example: giving out financial aid to any union's
supporters or organizers.
e. Discrimination to Encourage or
Discourage Unionism
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 [Art. 259(e)].
General Rule: It is ULP 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.
Exception: Union security clauses
f. Discrimination for Having Given or
About to Give Testimony
To dismiss, discharge or otherwise prejudice or
discriminate against an employee for having
given or being about to give testimony [Art. 259
(f)].
Note: This is broader than the prohibition under
Art. 118 because Art. 259 (f) covers testimony
under the whole Code, while Art. 118 only
covers testimony under Book I: Pre-
Employment, Title II: Wages.
Note further: Includes not giving testimony
[Azucena].
g. Violation of Duty to Bargain
Collectively
To violate the duty to bargain collectively as
prescribed by this Code [Art. 259 (g)].
Collective bargaining does not end with the
execution of an agreement. Being a
continuous process, the duty to bargain
necessarily imposes on the parties the
obligation to live up to the terms of such a
collective bargaining agreement if entered into,
LABOR 2
it is undeniable that non-compliance therewith
constitutes an unfair labor practice [Shell Oil
Workers Union v. Shell Co., G.R. No. L-28607
(1971)].
ACTS DEEMED AS REFUSAL TO
BARGAIN
1. Refusal to bargain when there is an
unresolved petition for union cancellation
“That there is a pending cancellation
proceedings against the union is not a bar to
set in motion the mechanics of collective
bargaining […] Unless [the union’s] certificate
of registration and status as the certified
bargaining agent is revoked, [the employer], by
express provision of the law, is duty bound to
collectively bargain with the Union” [Capitol
Medical Center v. Trajano, G.R. No. 155690
(2005)].
2. Employer’s suspension of operations in
order to forestall a demand for collective
bargaining
By admitting that the closure [of the business]
was due to irreconcilable differences between
the Union and the school management, […]
SJCI in effect admitted that it wanted to end the
bargaining deadlock and eliminate the problem
dealing with the demands of the union [St. John
Colleges Inc. v. St. John Academy Faculty and
Employees Union, G.R. No. 167892 (2006)].
3. Implied refusal
The school is guilty of unfair labor practice
when it failed to make a timely reply to the
proposals of the union more than one month
after the same were submitted by the union. In
explaining its failure to reply, the school merely
offered a feeble excuse that its Board of
Trustees had not yet convened to discuss the
matter. Clearly, its actuation showed a lack of
sincere desire to negotiate [Colegio de San
Juan de Letran v. Association of Employees
and Faculty of Letran, G.R. No. 141471
(2000)].
Acts Not Deemed Refusal to Bargain
1. Adoption of an adamant bargaining
position in good faith, particularly
where the company is operating at a
loss;
2. Refusal to bargain over demands for
commission of unfair labor practices;
3. Refusal to bargain during period of
illegal strike;
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4. Not initiating the bargaining;
5. Refusal to bargain where the union
demands for recognition and
bargaining within the year following a
certification election, and the clear
choice is no union and no ad interim
significant change has taken place in
the unit;
6. Refusal to bargain because the other
party is making unlawful bargaining
demands.
h. Payment of Negotiation or Attorney’s
Fees
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 [Art. 259 (h)].
Sweetheart contracts are favorable both to the
union and the employer at the expense of the
employees. The settlement of bargaining
issues must be made by fair bargaining in good
faith, and not through the payment of
negotiation or attorney's fees which will
ultimately lead to sweetheart contracts.
i. Violation of CBA
To violate a collective bargaining agreement
[Art. 259 (i)].
Flagrant and/or Malicious Refusal to
Comply with Economic Provisions
Required
Violations of a Collective Bargaining
Agreement, except those which are gross in
character, shall no longer be treated as unfair
labor practice and shall be resolved as
grievances under the Collective Bargaining
Agreement.
For purposes of this Art., gross violations of
Collective Bargaining Agreement shall mean
flagrant and/or malicious refusal to comply with
the economic provisions of such agreement
[Art. 274].
Violations of collective bargaining agreements,
except flagrant and/or malicious refusal to
comply with its economic provisions, shall not
be considered unfair labor practice and shall
not be strikeable [Book V, Rule XXII, Sec. 5].
LABOR 2
Note: The list in Art. 259 is not exhaustive.
Other acts which are analogous to those
enumerated can be ULPs.
The alleged violation of the CBA, even
assuming it was malicious and flagrant, is not
a violation of an economic provision, thus
not an Unfair Labor Practice [BPI Employees
Union-Davao FUBU v. BPI, G.R. No. 174912
(2013)].
An employer cannot be considered to have
committed a gross and economic violation of
the CBA when it, in good faith, withheld union
dues and death benefits from the union upon
written request of the union members in light of
the conflict between the members and the
union officers and instead deposited such
amount to the DOLE [Arellano University
Employees and Workers Union v. Court of
Appeals, G.R. 139940 (2006)].
Motive, Conduct, Proof
To constitute ULP, the dismissals by the ER
need not be entirely motivated by union
activities or affiliations. It is enough that
discrimination was a factor [Me-Shurn Corp. v.
Me-Shurn Workers Union-FSM, G.R. No.
156292 (2005)].
Note: The basic inspiration of the dismissals
should concern the right to self-organization.
Totality of Evidence
Where the attendant circumstances, the history
of the employer's past conduct and like
considerations, coupled with an intimate
connection between the employer's action and
the union affiliations or activities of the
particular employee or employees, taken as a
whole, raise a suspicion as to the motivation for
the employer's action, the failure of the
employer to ascribe a valid reason therefor
may justify an inference that his unexplained
conduct in respect of the particular employee
or employees was inspired by the latter's union
membership or activities [Royal Undergarment
Corporation of the Philippines v. CIR, G.R. No.
L-39040 (1990)].
3. By Labor Organizations
a. Restraint or Coercion
b. Discrimination: Encourage/Discourage
Unionism
c. Violation of Duty, or Refuse to Bargain
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d. Illegal Exaction (Featherbedding)
e. Asking or Accepting Negotiation and
other Attorney's Fees
f. Violation of a Collective Bargaining
Agreement
a. Restraint or Coercion
To restrain or coerce employees in the
exercise of their right to self-organization.
However, a labor organization shall have the
right to prescribe its own rules with respect to
the acquisition or retention of membership [Art.
260 (a)].
“Interfere” is not included in Art. 260 simply
because any act of a labor organization
amounts to interference to the right of self-
organization.
b. Discrimination
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 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 [Art. 260 (b)].
General Rule: It is a ULP for a labor
organization to cause an employer to
discriminate against an employee.
Exception: Provisions of a valid union security
clause and other company policies applicable
to all employees.
c. Violation of Duty or Refusal to
Bargain
To violate the duty, or refuse to bargain
collectively with the employer, provided it is the
representative of the employees [Art. 260 (c)].
LABOR 2
d. Illegal Exaction (Featherbedding)
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 [Art. 260
(d)].
The practice of the labor organization to cause
or attempt to cause an employer to pay or
deliver or agree to pay or deliver money or
other things of value, in the nature of an
exaction, for services which are not performed
or are not to be performed, including the
demand for a fee for union negotiations.
e. Asking or Accepting Negotiation and
Other Attorney’s Fees
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 [Art. 260 (e)].
f. Violation of CBA
To violate a collective bargaining agreement
[Art. 260 (f)].
Gross Violations of the CBA
Violations of a Collective Bargaining
Agreement, except those which are gross in
character, shall no longer be treated as unfair
labor practice and shall be resolved as
grievances under the Collective Bargaining
Agreement.
For purposes of this Art., gross violations of
Collective Bargaining Agreement shall mean
flagrant and/or malicious refusal to comply with
the economic provisions of such agreement
[Art. 274].
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F. Peaceful Concerted Activities
Definition
A concerted activity is one undertaken by two
or more employees to improve their terms and
conditions of work.
Nature of the Right to Strike and Lockout
The right to strike is a constitutional and legal
right of the workers, as the employers have the
inherent and statutory right to lockout within the
context of labor relations and collective
bargaining.
It is a means of last resort and presupposes
that the duty to bargain in good faith has been
fulfilled and other voluntary modes of dispute
settlement have been tried and exhausted
[Guidelines Governing Labor Relations
(1987)].
Non-Abridgment of Right to Self-
Organization
It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly interfere
with employees and workers in their exercise
of the right to self-organization. Such right shall
include the right to (…) engage in lawful
concerted activities for the same purpose or for
their mutual aid and protection, subject to the
provisions of Art [279] of this Code [Art. 257].
Limitation: Concerted activities must be
in accordance with law
The strike is a powerful weapon of the working
class. Thus, it must be declared only after the
most thoughtful consultation among them,
conducted in the only way allowed; that is,
peacefully, and in every case conformably to
reasonable regulation. Any violation of the
legal requirements and strictures will render
the strike illegal, to the detriment of the very
workers it is supposed to protect [Batangas
Laguna Tayabas Bus Co. v. NLRC, G.R. No.
101858 (1992)].
Forms of Concerted Activities
Concerted Activities by Labor
Organization:
a. Strike (includes slow downs, mass
leaves, sit downs, attempts to damage
destroy or sabotage plant equipment
and similar activities)
b. Picketing
c. Boycott
LABOR 2
1. Strikes
a. Grounds for Strike
1. A collective bargaining deadlock; or
2. An unfair labor practice act of the
employer or employee [Art. 278]
b. Mandatory Procedural Requirements
Procedural Requirements for Strike [Art.
278]
1. Effort to bargain (for bargaining
deadlock strikes)
2. Filing and service of notice of strike
3. Observance of cooling-off period
a. 15 days for ULP
No cooling-off period when the ULP
can be considered union busting
(dismissal of duly elected union officers
from employment)
b. 30 days for bargaining deadlock
4. Notice of strike vote meeting to NCMB
within 24 hours before the strike vote
[Sec. 10, Rule XXII, Book V, IRR]
5. Strike vote
6. Strike vote report sent to NCMB
7. Observance of the waiting period (7-
day strike ban)
1. Effort to Bargain
No labor organization […] shall declare a strike
[…] without first having bargained collectively
in accordance with Title VII of this Book [Art.
279(a)].
In case of bargaining deadlocks, the notice
shall, as far as practicable:
a. Further state the unresolved issues in
the bargaining negotiations; and
b. Be accompanied by the written
proposals of the union, the counter-
proposals of the employer and the
proof of a request for conference to
settle differences.
In cases of unfair labor practices, the notice
shall, as far as practicable, state the acts
complained of, and efforts taken to resolve the
dispute amicably [Sec. 4, Rule XXII, Book V,
IRR].
The Implementing Rules use the words as far
as practicable. In this case, attaching the
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counter-proposal of the company to the notice
of strike of the union was not practicable. It was
absurd to expect the union to produce the
company’s counter-proposal which it did not
have [Club Filipino, Inc. v. Bautista, G.R. No.
168406 (2009)].
2. Filing and Service of Notice of Strike
Ground: Bargaining deadlocks [Art.
278(c)]
Filed by: The duly certified or recognized
bargaining agent may file a notice of strike
Filed with: With the Ministry [now DOLE]
When: At least 30 days before the intended
date of the strike
Ground: Unfair labor practice [Art. 278(c)]
Filed by: The duly certified or recognized
bargaining agent, or in the absence of such
agent, any legitimate labor organization in
behalf of its members may file a notice of strike
Filed with: With the Ministry [now DOLE]
When: The period of notice shall be 15 days
Note: In case of dismissal from employment of
union officers duly elected in accordance with
the union constitution and by-laws, which may
constitute union-busting, where the existence
of the union is threatened, the 15-day cooling-
off period shall not apply and the union may
take action immediately.
Notice to the Employer
In case of unfair labor practice and/or union
busting, the notice must be served to the
employer. Failure to do so will constitute
noncompliance with the procedural
requirements and will result to an illegal strike
[Filipino Pipe and Foundry Corp v. NLRC, G.R.
No. 115180 (1999)].
Rationale: Due process.
Contents of Notice of Strike
1. Names and addresses of the employer
and the union involved
2. Nature of the industry to which the
employer belongs
3. Number of union members and of
workers in the bargaining unit
LABOR 2
4. Such other relevant data as may
facilitate the settlement of the dispute
Additional Requirements
In case of Bargaining Deadlocks:
1. Statement of unresolved issues in the
bargaining negotiations
2. Written proposals of the union
3. Counter-proposals of the employer
4. Proof of a request for conference to
settle the differences [Sec. 4, Rule
XXII, Book V, IRR]
In Cases of ULP:
1. Statement of acts complained of
2. Efforts taken to resolve the dispute
amicably [Sec. 4, Rule XXII, Book V,
IRR]
Action on Notice:
1. Upon receipt of a valid notice of strike
or lockout, the NCMB, through its
Conciliator-Mediators, shall call the
parties to a conference the soonest
possible time in order to actively assist
them to explore all possibilities for
amicable settlement.
2. The Conciliator-Mediator may
suggest/offer proposals as an
alternative avenue for the resolution of
their disagreement/conflict which may
not necessarily bind the parties.
3. If conciliation/mediation fails, the
parties shall be encouraged to submit
their dispute for voluntary arbitration.
3. Observance of Cooling-Off Periods
Cooling off periods
1. Bargaining deadlock – 30 days
2. ULP but not union busting – 15 days
3. ULP and union busting – no cooling-off
period
Purpose of Cooling Off Period
During the cooling-off period, it shall be the
duty of the Ministry [now DOLE] to exert all
efforts at mediation and conciliation to effect a
voluntary settlement.
Should the dispute remain unsettled until the
lapse of the requisite number of days from the
mandatory filing of the notice, the labor union
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may strike or the employer may declare a
lockout [Art. 278 (e)].
The purpose of the cooling-off period is to
provide an opportunity for mediation and
conciliation [National Federation of Sugar
Workers v. Ovejera, G.R. No. L-59743 (1982)].
4. Notice of Strike-Vote Meeting
The Department may, at its own initiative or
upon the request of any affected party,
supervise the conduct of the secret balloting
[Art. 278(f)].
In every case, the union or the employer shall
furnish the regional branch of the Board the
notice of meetings referred to in the preceding
paragraph at least twenty-four (24) hours
before such meetings [Sec. 10, Rule XXII,
Book V, IRR].
The purpose of the notice is to allow the NCMB
to decide whether or not they will send a
representative to supervise the strike vote.
5. Strike Vote
A decision to declare a lockout must be
approved by a majority of the board of directors
of the corporation or association or of the
partners in a partnership, obtained by secret
ballot in a meeting called for that purpose [Art.
278(f)].
Requirements for a Declaration of a Strike
in a Strike Vote
1. Approval by a majority of the total union
membership in the bargaining unit
concerned;
2. Approval is obtained by secret ballot in
a meeting/referendum called for the
purpose
Duration of the Validity of the Strike-Vote
The decision shall be valid for the duration of
the dispute based on substantially the same
grounds considered when the strike or lockout
vote was taken [Art. 278(f)].
LABOR 2
6. Strike Vote Report
In every case, the union or the employer shall
furnish the Department the results of the voting
at least 7 days before the intended strike or
lockout, subject to the cooling-off period herein
provided [Art. 278(f)].
7. Observance of the 7-Day Waiting
Period
7 Day Observance of the Strike Ban
The waiting period, on the other hand, is
intended to provide opportunity for the
members of the union or the management to
take the appropriate remedy in case the strike
or lockout vote report is false or inaccurate
[National Federation of Sugar Workers v.
Ovejera, G.R. No. L-59743 (1982)].
The waiting period is intended to give the
DOLE an opportunity to verify whether the
projected strike really carries the imprimatur of
the majority of the union members [Lapanday
Workers Union v. NLRC, G.R. Nos. 95494-97
(1995)].
Compliance with Both Cooling-off and
Waiting Periods
The observance of both periods must be
complied with, although a labor union may take
a strike vote and report the same within the
statutory cooling-off period. The cooling-off and
7-day strike ban provisions of law constitute a
valid exercise of police power of the State
[National Federation of Sugar Workers v.
Ovejera, G.R. No. L-59743 (1982)].
Mutually Exclusive Periods (used in the
NCMB Manual)
The cooling off period and the 7-day period are
mutually exclusive. Thus, in the case of Capitol
Medical Center v. NLRC [G.R. No. 147080
(2005)], the Court held that when the strike vote
is conducted within the cooling-off period, the
7-day requirement shall be counted from the
day following the expiration of the cooling off
period.
Improved Offer Balloting
In case of a strike, the regional branch of the
Board shall, at its own initiative or upon the
request of any affected party, conduct a
referendum by secret balloting on the improved
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offer of the employer on or before the 30th day
of strike.
When at least a majority of the union members
vote to accept the improved offer:
a. The striking workers shall immediately
return to work and;
b. The employer shall thereupon re-admit
them upon the signing of the
agreement [Sec. 12, Rule XXII, Book
V]
.
c. Legal Strike vs. Illegal Strike
Valid v. Illegal Strike
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, conducted through means not
sanctioned by law.
Effect of Illegality / Liability of
Participating Members/Officers of the
Union
a. Ordinary striking worker – cannot be
terminated for mere participation in an
illegal strike; proof must be adduced
showing that he or she committed
illegal acts during the strike.
b. Participating union officer – may be
terminated, not only when he actually
commits an illegal act during a strike,
but also if he knowingly participates in
an illegal strike [Phimco Industries, Inc.
v. PILA, G.R. No. 170830 (2010)].
1. Prohibited Grounds for Strike
a. Labor standards cases such as wage
orders;
b. Issues involving wage distortion
caused by legislated wage orders;
c. Inter or intra union disputes;
d. Execution and enforcement of final
orders or awards of cases pending at
the DOLE Regional Offices, BLR,
NLRC, VA, CA and SC and related
offices;
e. Violations of the CBA which are not
gross in character (not ULP) [BPI
Employees Union-Davao FUBU v. BPI,
G.R. No. 174912 (2013)].
LABOR 2
Gross in character shall mean flagrant and/or
malicious refusal to comply with the economic
provisions of such agreement [Art. 274].
d. Prohibited Acts During Strike
1. By Anyone (Art. 279(b))
No person shall obstruct, impede, or interfere
with, by force, violence, coercion, threats, or
intimidation, any peaceful picketing by
employees [Art. 279(b)];
a. Blocking the free ingress to/ egress
from work premises for lawful
purposes;
b. Obstruction of public thoroughfares;
c. Threatening, coercing and intimidating
non-striking employees, officers,
suppliers and customers;
d. Resistance and defiance of
assumption of jurisdiction by the Labor
Secretary or an injunction;
e. Acts of violence [Association of
Independent Unions in the Philippines
(AIUP), et. al. v. NLRC, G.R. No.
120505 (1999)].
The violence must be pervasive and
widespread, consistently and deliberately
resorted to as a matter of policy [Shell Oil
Workers v. Shell Company of the Phil., 39
SCRA 276 (1971)] (if violence was resorted to
by both sides, such violence cannot be a
ground for declaring the strike as illegal)
[Malayang Samahan ng Manggagawa sa M.
Greenfield v. Ramos, 357 SCRA 77 (2000)].
2. By Employer (Art. 279(c))
No employer shall use or employ any strike-
breaker, nor shall any person be employed as
a strike-breaker [Art. 279(c)].
3. By Public Official or Police Force (Art.
279(d))
No public official or employee, including
officers and personnel of the New Armed
Forces of the Philippines or the Integrated
National Police, or armed person, shall bring in,
introduce or escort in any manner, any
individual who seeks to replace strikers in
entering or leaving the premises of a strike
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area, or work in place of the strikers [Art.
279(d)].
CATEGORIES OF ILLEGAL STRIKE
1. Prohibited by Law (e.g. Strike By
Government Employees)
While the Constitution guarantees the right of
government employees to organize, they are
not allowed to strike.
2. Improper Grounds (e.g. Intra or Inter
Union Dispute, Wage Distortion)
A legal strike must be based on a bargaining
deadlock and/or a ULP act only.
Intra-union and inter-union disputes are not
proper grounds to strike.
Note: Good faith strike
Good faith may be used as a defense if the
strike is held on the basis of an act of ULP by
the employer even if it turned out that there was
no act of ULP. However, the mandatory
procedural requirements cannot be dispensed
with (notice of strike, cooling-off period, strike
vote, strike vote report) [Grand Boulevard Hotel
v. GLOWHRAIN, G.R. No. 153664 (2003)].
Good Faith Strike Requires Rational Basis
A mere claim of good faith would not justify the
holding of a strike under the aforesaid
exception as, in addition thereto, the
circumstances must have warranted such
belief. It is, therefore, not enough that the union
believed that the employer committed acts of
ULP when the circumstances clearly negate
even a prima facie showing to sustain such
belief [Interwood Employees Assoc. v. Int’l
Hardwood, G.R. No. L-7409 (1956)].
3. Noncompliance with Procedural
Requirements
A strike which does not strictly comply with the
procedural requirements set by law and the
rules is an unlawful/illegal strike [Sta. Rosa
Coca-Cola Plant Employees Union v. Coca-
Cola Bottlers Philippines, Inc., G.R. Nos.
164302-03 (2007)].
Note: Good faith strike must still comply with
procedural requirements.
Even if the union acted in good faith in the
belief that the company was committing an
unfair labor practice, if no notice of strike and a
LABOR 2
strike vote were conducted, the said strike is
illegal [Grand Boulevard Hotel v.
GLOWHRAIN, G.R. No. 153664 (2003)].
General Rule: A strike based on a non-
strikeable ground is an illegal strike; a strike
grounded on ULP is illegal if no such acts
actually exist.
Exception: Even if no ULP acts are committed
by the employer, if the employees believe in
good faith that ULP acts exist so as to
constitute a valid ground to strike, then the
strike held pursuant to such belief may be legal
[NUWHRAIN v. NLRC, G.R. No. 125561
(1998)].
4. Unlawful Means and Methods
Purpose and means test
There must be concurrence between the
validity of the purpose of the strike and the
means of conducting it.
To be valid, a strike must be pursued within
legal bounds. The right to strike as a means for
the attainment of social justice is never meant
to oppress or destroy the employer.
The law provides limits for its exercise. Among
such limits are the prohibited activities under
Art [279], particularly paragraph (e), which
states that no person engaged in picketing
shall:
1. commit any act of violence, coercion,
or intimidation or
2. obstruct the free ingress to or egress
from the employer's premises for lawful
purposes or
3. obstruct public thoroughfares.
A Legal Strike May Turn into an Illegal Strike
Even if the strike is valid because its objective
or purpose is lawful, the strike may still be
declared invalid where the means employed
are illegal [Phil. Diamond Hotel and Resort, Inc.
v. Manila Diamond Hotel Employees Union,
G.R. No. 158075 (2006)].
Examples of Unlawful Means and Methods
1. Acts of violence and terrorism
2. Destruction of property
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Guidelines and Balancing of Interest
1. A strike, otherwise valid, if violent in
character, may be placed beyond the
pale.
2. Care is to be taken especially where an
unfair labor practice is involved, to
avoid stamping it with illegality just
because it is tainted by such acts. To
avoid rendering illusory the recognition
of the right to strike, responsibility in
such a case should be individual and
not collective.
3. A different conclusion would be called
for if the existence of force while the
strike lasts is pervasive and
widespread, consistently and
deliberately resorted to as a matter of
policy. It could be reasonably
concluded then that even if justified as
to ends, it becomes illegal because of
the means employed.
4. This is not by any means to condone
the utilization of force by labor to attain
its objectives. It is only to show
awareness that in labor conflicts, the
tension that fills the air as well as the
feeling of frustration and bitterness
could break out in sporadic acts of
violence.
It would be unjustified, considering all the facts
disclosed, to stamp the strike with illegality. It is
enough that individual liability be incurred by
those guilty of such acts of violence that call for
loss of employee status [Shell Oil Workers
Union v. Shell Co. of the Phils, G.R. No. L-
28607 (1971)].
It bears stressing that the requirements of
strike notice and strike-vote report are
mandatory, meaning, non-compliance
therewith makes the strike illegal. The evident
intention of the law in requiring these is to
reasonably regulate the right to strike
[Stamford Mark Corp. v. Julian, G.R. No.
145496 (2004)].
5. Violation of Injunction Order
An automatic injunction under Art. 278(g) or a
valid injunction order under the exceptions to
Art. 279 must be complied with. Otherwise, the
strike becomes illegal.
LABOR 2
6. Those Contrary to an Existing Agreement
(e.g. No strike/lockout provisions in the CBA)
[Citing Ludwig Teller in Toyota Motors v.
NLRC, G.R. Nos. 158786 & 158787 (2007)].
No Strike/Lockout Provisions in the CBA
A “no strike, no lock-out” is a valid provision in
the CBA. However, it only applies to economic
provisions. It cannot prevent a strike which is
grounded on unfair labor practice [Malayang
Samahan ng mga Manggagawa sa Greenfield
v. Ramos, G.R. No. 113907 (2000)].
7. The Strikers do not Belong to a
Legitimate Labor Organization [Magdala
Multipurpose & Livelihood Coop. v. Kilusang
Manggagawa Ng LGS, G.R. Nos. 191138-39
(2011)].
e. Liability of Union Officers and
Members for Illegal Strike and Illegal
Acts During Strike
Liabilities of Parties
Any union officer who knowingly participates in
an illegal strike and any worker or union officer
who knowingly participates in the commission
of illegal acts during a strike may be declared
to have lost his employment status [Art.
279(a)].
Note: Mere participation in an illegal strike by a
union officer is sufficient ground to terminate
his employment. In case of a lawful strike, the
union officer must commit illegal acts during a
strike for him to be terminated [Art. 279(a)].
Procedural due process is still required for
dismissing union officers/ordinary workers.
Where an opportunity to be heard either
through oral arguments or through pleadings is
accorded, there is no denial of procedural due
process [Equitable PCI Banking Corp. v. RCBC
Capital Corp, 574 SCRA 858 (2004)].
Liability of Ordinary Workers
General Rule: Participation by a worker in a
lawful strike is not ground for termination of his
employment [Art. 279(a)].
Exception: When the worker participated in
illegal acts during the strike; needs clear,
substantial and convincing proof available
under the circumstances to justify the penalty
of dismissal [Toyota Motors Philippines
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Workers Association v. NLRC, 537 SCRA 171
(2007)].
Note: The mere fact that the criminal
complaints against terminated Union members
were subsequently dismissed does not
extinguish their liability under the Labor Code
[C. Alcantara & Sons, Inc. v. CA, G.R. No.
155109 (2011)].
Liability of Employer
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with
full backwages [Art. 279(a)].
Waiver of Illegality of Strike/ Condonation
Doctrine
When Defense of Illegality of Strike is
Deemed Waived
An employer can be deemed to have waived
the defense that a strike is illegal. In one case,
the Court held that: “Admitting for the sake of
argument that the strike was illegal for being
premature, this defense was waived by the
[Company], when it voluntarily agreed to
reinstate the radio operators” [Bisaya Land
Transportation Co., Inc. v. CIR, G.R. No. L-
10114 (1957)].
When Defense of Illegality of Strike is Not
Deemed Waived
The ruling cited in the Bisaya case that the
employer waives his defense of illegality of the
strike upon reinstatement of strikers is
applicable only to strikers who signified their
intention to return to work and were accepted
back […]
Condonation shall apply only to strikers who
signified their intention to return, and did return
to work, since these strikers took the initiative
in normalizing relations with their employer and
thus helped promote industrial peace.
However, as regards the strikers who
decided to pursue with the case, […] the
employer could not be deemed to have
condoned their strike, because they had not
shown any willingness to normalize relations
with it [Philippine Inter-Fashion, Inc. v. NLRC,
G.R. No. L-59847 (1982)].
LABOR 2
However, the mere act of entering into a
compromise agreement cannot be deemed to
be a waiver of the illegality of the strike, unless
such a waiver is clearly shown in the
agreement [Filcon Manufacturing Corp v.
Lakas Manggagawa sa Filcon – Lakas
Manggagawa Labor Center, G.R. No. 150166
(2004)]
2. Picketing
The right of legitimate labor organizations to
strike and picket and of employers to lockout,
consistent with the national interest, shall
continue to be recognized and respected [Art.
278(b)].
Picketing involves merely the marching to and
fro at the premises of the employer, usually
accompanied by the display of placards and
other signs making known the facts involved in
a labor dispute.
As applied to a labor dispute, to picket means
the stationing of one or more persons to
observe and attempt to observe. The purpose
of pickets is said to be a means of peaceable
persuasion [Sta. Rosa Coca-Cola Plant
Employees Union v. Coca-Cola Bottlers
Philippines, Inc., G.R. Nos. 164302-03 (2007)].
Peaceful Picketing is the right of workers
during strikes consisting of 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
[Guidelines Governing Labor Relations,
October 19, 1987; NCMB Manual, Sec. 1].
Purpose
The purpose of the picket line is to persuade
employers peacefully by publicizing the labor
dispute to inform the public of what is
happening and thus cause other workers not to
work in the establishment and for customers
not to do business there [Phimco Industries,
Inc. v. Phimco Industries Labor Association
(PILA), et al., 628 SCRA 119 (2010)].
Prohibited Activities in Picketing
1. By any person. No person shall
obstruct, impede, or interfere with, by
force, violence, coercion, threats or
intimidation, any peaceful picketing by
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employees during any labor
controversy or in the exercise of the
right to self-organization or collective
bargaining, or shall aid or abet such
obstruction or interference [Art.
279(b)].
2. By police force. The police force shall
keep out of the picket lines unless
actual violence or other criminal acts
occur therein: Provided, That nothing
herein shall be interpreted to prevent
any public officer from taking any
measure necessary to maintain peace
and order, protect life and property,
and/or enforce the law and legal orders
[Art. 279(d)].
3. By person engaged in picketing. No
person engaged in picketing shall
commit any act of violence, coercion or
intimidation or obstruct the free ingress
to or egress from the employer’s
premises for lawful purposes, or
obstruct public thoroughfares [Art.
279(e)].
Picketing as Part of Freedom of
Speech/Expression
General Rule: picketing enjoys constitutional
protection as part of freedom of speech and/or
expression.
Exceptions/Limitations:
a. When picketing is coercive rather than
persuasive [Security Bank Employees
Union v. Security Bank, G.R. No. L-
28536 (1968)]
b. When picketing is achieved through
illegal means [Mortera v. CIR, G.R. No.
L-1340 (1947)]
c. Courts may confine the
communication/ demonstration to the
parties to the labor dispute [PCIB v.
Philnabank Employees Association,
G.R. No. L-29630 (1981)]
d. Innocent bystander rule. Courts may
insulate establishments or persons
with no industrial connection or having
interest totally foreign to the context of
the dispute [PCIB v. Philnabank
Employees Association, G.R. No. L-
29630 (1981)]
LABOR 2
Picketing and Libel
Libel laws are not applied strictly considering
that there is emotional tension in the picket
lines and expected discourteous and impolite
exchanges between the employees and the
employer [PCIB v. Philnabank Employees
Association, G.R. No. L-29630 (1981)].
Peaceful Picketing is Legal Even in the
Absence of Employer-Employee
Relationship
Picketing, peacefully carried out, is not illegal
even in the absence of employer-employee
relationship, for peaceful picketing is a part of
the freedom of speech guaranteed by the
Constitution [De Leon v. National Labor Union,
G.R. No. L-7586 (1957)].
3. Lockouts
Lockout is the temporary refusal of an
employer to furnish work as a result of an
industrial or labor dispute [Art. 219 (p)].
Illegal Strike and Illegal Lockout/In Pari
Delicto Doctrine
When the employer engaged in illegal lockout
and the employee engaged in illegal strike,
both parties are in pari delicto, and such
situation warrants the restoration of the status
quo ante and bringing the parties back to the
respective positions before the illegal strike
and illegal lockout [Philippines Inter-Fashion
Inc. v. NLRC, G.R. No. L-59847 (1982)].
a. Grounds for Lockout
Similar to a Strike, the Proper Grounds for
a Lockout are
1. Bargaining deadlock;
2. ULP by labor organizations.
b. Mandatory Procedural Requirements
1. Effort to bargain (in case of bargaining
deadlock);
2. Filing and service of notice of lockout to
the NCMB;
3. Observance of cooling-off period;
4. 15 days for ULP;
5. 30 days for bargaining deadlock;
6. Notice of lockout vote meeting within
24 hours before the intended vote [Sec.
10, Rule XXII, Book V, IRR];
7. Lockout vote;
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8. Report of lockout vote;
9. Observance of the waiting period (7-
day strike ban).
1. Effort to Bargain
No employer shall declare a […] lockout
without first having bargained collectively in
accordance with Title VII of this Book [Art.
279(a)].
2. Filing and Service of Notice of Lockout
Filed by: The duly certified or recognized
bargaining agent may file notice of lockout
Filed with: With the Department
When: At least 30 days before the intended
date of the lockout [Art. 278(c)].
Note: The notice must be served to the
employees through the SEBA or the legitimate
labor organization (if no SEBA).
Contents of Notice
1. Names and addresses of the employer
and the union involved
2. Nature of the industry to which the
employer belongs
3. Number of union members and of
workers in the bargaining unit
4. Such other relevant data as may
facilitate the settlement of the dispute
Additional Requirements [Sec. 8, Rule XXII,
Book V, IRR]
In Cases of Bargaining Deadlocks
1. Statement of unresolved issues in the
bargaining negotiations
2. Written proposals of the union
3. Counter-proposals of the employer
4. Proof of a request for conference to
settle the differences.
In Cases of ULP
1. Statement of acts complained of
2. Efforts taken to resolve the dispute
amicably
Action on Notice
1. Upon receipt of a valid notice of strike
or lockout, the NCMB, through its
Conciliator-Mediators, shall call the
parties to a conference the soonest
possible time in order to actively assist
LABOR 2
them to explore all possibilities for
amicable settlement.
2. The Conciliator-Mediator may suggest/
offer proposals as an alternative
avenue for the resolution of their
disagreement/conflict which may not
necessarily bind the parties.
3. If conciliation/mediation fails, the
parties shall be encouraged to submit
their dispute for voluntary arbitration
[Sec. 9, Rule XXII, Book V, IRR].
3. Observance of Cooling-off Periods
Lockout cooling-off periods:
1. Based on bargaining deadlock – 30
days
2. Based on ULP – 15 days [Art. 278(c)]
4. Notice of Lockout Vote Meeting
In every case, the union or the employer shall
furnish the regional branch of the Board the
notice of meetings referred to in the preceding
paragraph at least twenty-four (24) hours
before such meetings [Sec. 10, Rule XXII,
Book V, IRR].
5. Lockout Vote
A decision to declare a lockout must be
approved by a majority of the board of directors
of the corporation or association or of the
partners in a partnership, obtained by secret
ballot in a meeting called for that purpose. The
decision shall be valid for the duration of the
dispute based on substantially the same
grounds considered when the strike or lockout
vote was taken [Art. 278(f)].
6. Report of Lockout Vote
In every case, the union or the employer shall
furnish the Ministry the results of the voting at
least seven days before the intended strike or
lockout, subject to the cooling-off period herein
provided [Art. 278(f)].
7. Observance of Waiting Period (7 Days)
See notes under Strike.
Effect of Illegal Lockout
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with
full backwages [Art. 279(a)].
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4. Assumption of Jurisdiction by the
DOLE Secretary
When May the SOLE Assume Jurisdiction
When in his opinion, there exist a labor dispute
causing or likely to cause a strike or lockout in
an industry indispensable to the national
interest, the SOLE may assume jurisdiction
over the dispute and decide it or certify the
same to the Commission for compulsory
arbitration [Art. 278(g)].
Requisites for Assumption of Jurisdiction
1. Both parties have requested the SOLE
to assume jurisdiction; or
2. After a conference called by the Office
of the SOLE on the propriety of its
issuance, motu proprio or upon a
request or petition by either parties to
the labor dispute [Book V, IRR Rule
XXII, sec. 15, IRR as amended by D.O.
No. 40-H-13 s 2013].
Immediately Executory
The assumption and certification orders are
executory in character and must be strictly
complied with by the parties [Allied Banking v.
NLRC, G.R. No. 116128 (1996)].
Effect of Defiance of Assumption or
Certification Orders
No strike or lockout shall be declared after
assumption of jurisdiction by the President or
the Minister or after certification or submission
of the dispute to compulsory or voluntary
arbitration or during the pendency of cases
involving the same grounds for the strike or
lockout [Art. 279(a), par. 2].
A strike undertaken despite the issuance by the
Secretary of Labor of an assumption or
certification order becomes a prohibited activity
and thus, illegal, pursuant to Art. 279(a) of the
Labor Code [Allied Banking v. NLRC, G.R. No.
116128 (1996)].
LABOR 2
a. Industry Indispensable to the National
Interest
1. Hospital sector
2. Electric power industry
3. Water supply service, to exclude small
water supply services, such as bottling
and refilling stations
4. Air traffic control
5. Other industries as may be
recommended by the National
Tripartite Industrial Peace Council
(TIPC) [Sec. 16, Rule XXII, Book V,
IRR as amended by D.O. No. 40-H-13].
Who Determines Industries
Indispensable to the National Interest [Art.
278(g)]
1. Secretary of Labor and Employment
2. President
Strikes and Lockouts in Hospitals, Clinics
and Similar Medical Institutions
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.
In such cases, therefore, the Secretary of
Labor and Employment 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 Commission for compulsory arbitration
[Art. 278, par. 2].
Rationale: The highest respect is accorded to
the right of patients to life and health.
5. Injunctions
Automatic Injunction of Intended of
Impending Strike or Lockout
The assumption of jurisdiction by the SOLE
automatically enjoins intended or impending
strike or lockout [Art. 278 (g)].
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Return-to-work and readmission if strike or
lockout has already taken place
If strike or lockout has already taken place at
the time of assumption or certification,
1. All striking or locked out employees
shall immediately return-to-work; and
2. The employer shall immediately
resume operations and readmit all
workers under the same terms and
conditions prevailing before the strike
or lockout [Art. 278 (g)].
The SOLE may also determine the retroactivity
of arbitral awards pursuant to power to assume
jurisdiction as part of his/her plenary powers to
determine the effectivity thereof in absence of
specific provision of law [LMG Chemicals Corp.
v. Sec. of Labor and Employment, 356 SCRA
577 (2001)].
Nature of return-to-work order
The return-to-work order not so much confers
a right as it imposes a duty; and while as a right
it may be waived, it must be discharged as a
duty even against the worker's and/or
employers’ will.
The worker must return to his job together with
his co-workers so the operations of the
company can be resumed and it can continue
serving the public and promoting its interest.
That is the real reason such return can be
compelled. So imperative is the order in fact
that it is not even considered violative of the
right against involuntary servitude [Kaisahan
ng Mga Manggagawa sa Kahoy v. Gotamco
Sawmills, G.R. No. L-1573 (1948)].
Note: It must be strictly complied with even
during the pendency of any petition questioning
its validity [Manila Hotel Employees
Association and its Members v. Manila Hotel
Corp., 517 SCRA 349 (2007)].
The purpose of SOLE’s extraordinary power is
aimed at arriving at a peaceful and speedy
solution to labor disputes without jeopardizing
national interest [Union of Filipro Employees-
Drug v. Nestle, 499 SCRA 521 (2006)].
LABOR 2
VI. TERMINATION OF
EMPLOYMENT
A. Security of Tenure
1. Categories of Employment as to
Tenure
a. Regular
An employment shall be deemed to be regular
where the employee has been engaged to
perform activities which are usually necessary
or desirable in the usual business or trade of
the employer, except where:
1. The employment has been fixed for a
specific project or undertaking, the
completion or termination of which has
been determined at the time of the
engagement of the employee; or
2. The work or service to be performed is
seasonal in nature and the employment is
for the duration of the season [Art. 295].
An employee who is allowed to work after a
probationary period shall be considered a
regular employee [Art. 296].
Regular Employee Defined
One who is engaged to perform activities that
are necessary and desirable in the usual
business or trade of the employer as against
those which are undertaken for a specific
project or are seasonal.
It is not synonymous with permanent emp
loyee, because there is no such thing as a
permanent employment. Any employee may
be terminated for just cause.
Two Kinds of Regular Employee
1. Those engaged to perform activities which
are necessary or desirable in the usual
business or trade of the employer; and
1. Casual employees who have rendered at
least 1 year of service, whether
continuous or broken, with respect to the
activity in which they are employed
[Romares v. NLRC, G.R. No. 122327
(1998)].
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Reasonable Connection Rule
The primary standard to determine regular
employment is the reasonable connection
between the activity performed by the
employee to the business or trade of the
employer.
Test: W/N the employee is usually necessary
or desirable in the usual business or trade of
the employer.
If the employee has been performing the job for
at least one year, even if not continuous or
merely intermittent, the repeated and
continuing need for performance is sufficient
evidence of necessity, if not indispensability of
that activity to the business of the employer.
Hence, the employment is also considered
regular, but only with respect to such activity
and while such activity exists [Forever Richons
Trading Corp. v. Molina, G.R. No. 206061
(2013)].
When Art. 295 Not Applicable
It does not apply where the existence of an
EER is in dispute. It is not the yardstick for
determining the existence of an EER, as it
merely distinguishes between two kinds of
employees, i.e., regular and casual, for
purposes of determining the right of an
employee to certain benefits, to join or form a
union, or to security of tenure [Atok Big Wedge
Co., Inc. v. Gison, G.R. No. 169510 (2011)].
Hiring For an Extended Period
Where the employment of project employees is
extended long after the supposed project has
been finished, the employees are removed
from the scope of project employees and
considered regular employees [Audion Electric
Co., Inc. v. NLRC, G.R. No. 106648 (1999)].
While length of time is not a controlling test for
project employment, it can be a strong factor in
determining whether the employee was hired
for a specific undertaking or in fact tasked to
perform functions which are vital, necessary
and indispensable to the usual business or
trade of the employer [Tomas Lao Const. v.
NLRC, G.R. No. 116781 (1997)].
Repeated Renewal of Contract
While contractual stipulations as to the duration
of employment are valid, they cannot apply
where the contract-to-contract arrangement
LABOR 2
was but an artifice to prevent the acquisition of
security of tenure and to frustrate constitutional
decrees [Beta Electric Corp. v. NLRC, G.R. No.
86408 (1990)].
Length of Time Not Controlling
Length of time is merely a badge of regular
employment [Maraguinot v. NLRC, G.R. No.
120969 (1998)].
b. Casual
An employment shall be deemed to be casual
where:
1. An employee is engaged to perform a
job, work or service which is merely
incidental to the business of the
employer, and such job, work or
service is for a definite period made
known to the employee at the time of
engagement [Sec. 5(b), Rule I, Book
VI, IRR];
2. The employment has been fixed for a
specific project or undertaking, the
completion or termination of which has
been determined at the time of the
engagement of the employee; or
3. The work or service to be performed is
seasonal in nature and the
employment is for the duration of the
season [Art. 295].
Provided, That any employee who has
rendered at least one year of service, whether
such service is continuous or broken, shall be
considered a regular employee with respect to
the activity in which he is employed and his
employment shall continue while such activity
exists [Art. 295].
Casual Employee Defined
One engaged to perform a job, work or service
that is merely incidental to the business of the
employer, and such job, work or service is for
a definite period made known to the employee
at the time of engagement.
It is also someone who is not a regular, project
or seasonal employee.
Requirements to Become a Regular
Employee
1. One (1) year service, continuous or
broken with respect to activity
employed, unless he has been
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contracted for a specific project [Tabas
v. California Marketing Co., Inc., G.R.
No. L-80680 (1989)].
2. Employment shall continue while such
activity exists.
Nature of Work Determines Kind of
Employment
What determines regularity or casualness is
not the employment contract but the nature of
the job. If the job is usually necessary or
desirable to the main business of the employer,
then employment is regular [A. M. Oreta and
Co., Inc. v. NLRC, G.R. No. 74004 (1989)].
c. Probationary
Probationary Employee Defined
One who is made to go on a trial period by an
employer during which the employer
determines whether he is qualified for
permanent employment, based on reasonable
standards made known to him at the time of
engagement [Robinson’s Galleria et al. v.
Ranchez, G.R. No. 177937 (2011)].
Rules for Probationary Employment
1. Shall not exceed 6 months from the
date the employee started working,
unless it is covered by an
apprenticeship agreement stipulating a
longer period [Art. 296].
2. The services of an employee who has
been engaged on a probationary basis
may be terminated for a just cause or
when he fails to qualify as a regular
employee in accordance with
reasonable standards made known by
the employer to the employee at the
time of his engagement [Art. 296].
3. The employer shall make known to the
employee the standards under which
he will qualify as regular employee at
the time of his engagement.
4. Where no standards are made known
to the employee at the time of
engagement, he shall be deemed a
regular employee [Sec. 6(d), Rule I,
Book VI, IRR].
5. An employee who is allowed to work
after a probationary period shall be
considered a regular employee [Art.
296].
LABOR 2
Duration
General Rule: Shall not exceed 6 months from
the date of the commencement of employment.
Exceptions:
1. When it is covered by an
apprenticeship agreement stipulating a
longer period [Art. 296];
2. When the parties to the employment
contract agree otherwise, such as
when established by company policy or
required by the nature of the work
performed by the employee [Buiser v.
Leogardo, G.R. No. L-63316 (1984)];
3. When it involves the 3-year
probationary period of teachers
[Mercado v. AMA Computer College,
G.R. No. 183572 (2010)]; and
4. When it involves an act of liberality on
the part of his employer affording him a
second chance to make good after
having initially failed to prove his worth
as an employee [Mariwasa v.
Leogardo, G.R. No. 74246 (1989)].
Purpose of Probationary Employment
1. Observation Period – for the employee
to demonstrate his skills to the
employer who determines whether the
former is qualified.
2. Restrictive - As long as termination was
made before the expiration of the 6-
month probationary period, the
employer has a right to sever the EER.
The employer has the right to choose who will
be hired. It is within the exercise of this right
that the employer may fix a probationary period
within which he may test and observe the
conduct of the employee before permanent
hiring [Grand Motor Parts Corp. v. MOLE, G.R.
No. L-58958 (1984)].
Requirements for Validity of Qualification
Standards
In order for the standards set by the employer
to be validly used in determining whether the
employee qualifies for permanent employee:
1. The employer must communicate such
standards to the probationary
employee; and
2. Such communication must be made at
the time of the probationary
employee’s engagement.
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An employer is deemed to have made known
the standards when it has exerted reasonable
efforts to apprise the employee of what he is
expected to do or accomplish during the trial
period of probation. This employee must be
sufficiently made aware of his probationary
status as well as the length of time of the
probation. The exception to the foregoing is
when the job is self-descriptive in nature
[Abbott Laboratories Phil. et al. v. Alcaraz, G.R.
No. 192571 (2013)].
Effect of Failure to Comply
If the employer fails to comply with the above-
requirements, the employee is deemed as a
regular and not probationary employee [Alcira
v. NLRC, G.R. No. 149859 (2004)].
Burden of Proof of Compliance with
Employer
The employer has the burden of proving that
they have informed the probationary employee
of the standards, that those standards have
been applied to the employee, and that the
employee fell short of such standards.
Prohibition on Extended/Double
Probation
When the employer renews the employment
contract after the lapse of the 6-month
probationary period, the employees thereby
became regular employees. No employer is
allowed to indefinitely determine the fitness of
its employees [Bernardo v. NLRC, supra].
Furthermore, an employee who is merely
transferred to his employer’s sister company
cannot be subjected to new probationary
employment when he had already attained
regular employment under his original
employer [A Prime Security Services, Inc. v.
NLRC, G.R. No. 107023 (2000)].
Termination of Probationary Employee
A probationary employee enjoys only a
temporary employment status. He is
terminable at any time, permanent employment
not having been attained in the meantime. The
employer could decide he no longer needed
the probationary employee’s services or his
performance fell short of expectations. As long
as termination was made before the
termination of the 6-month probationary period,
the employer was within his rights to sever the
EER. A contrary interpretation would defect the
LABOR 2
clear meaning of the term “probationary” [De la
Cruz, Jr. v. NLRC, G.R. No. 145417 (2003)].
Termination Can Only Be For:
1. Just causes;
2. Authorized causes; or
3. Failure to qualify as a regular employee
in accordance with reasonable
standards made known by the
employer to the employee at the time
of engagement [Robinson’s Galleria et
al. v. Ranchez, G.R. No. 177937
(2011)].
Nonetheless, procedural and substantial due
process must be observed during termination
of the probationary employee.
Note: In order to invoke “failure to meet the
probationary standards” as a justification for
dismissal, the employer must show how these
standards have been applied to the subject
employee [Univac Development, Inc. v.
Soriano, G.R. No. 182072 (2013)].
Limits to Termination
1. It must be exercised in accordance with
the specific requirements of the
contract
2. If a particular time is prescribed, the
termination must be within such time
and if formal notice is required, then
that form must be used
3. Employer’s dissatisfaction must be real
and in good faith, not feigned so as to
circumvent the contract or the law
4. There must be no unlawful
discrimination in the dismissal [Manila
Hotel Corporation v. NLRC, G.R. No.
53453 (1986)].
d. Project
Employment is not deemed regular where the
employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined at
the time of the engagement of the employee
[Art. 295].
Project Employee Defined
One who is hired for carrying out a separate
job, distinct from the other undertakings of the
company, the scope and duration of which has
been determined and made known to the
employees at the time of employment [Hanjin
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Heavy Industries & Const. Co. v. Ibañez, G.R.
No. 170181 (2008)].
Rationale for Project Employment
If a project has already been completed, it
would be unjust to require the employer to
maintain them in the payroll while they are
doing absolutely nothing except waiting until
another project is begun. In effect, these stand-
by workers would be enjoying the status of
privileged retainers, collecting payment for
work not done, to be disbursed by the employer
from profits not earned [De Ocampo, Jr. v.
NLRC, G.R. No. 81077 (1990)].
Two Kinds of Project Employees
1. For a particular job or undertaking that
is WITHIN the regular or usual
business of the employer company, but
which is distinct and separate, and
identifiable as such, from the other
undertakings of the company (e.g.,
construction)
2. For a particular job or undertaking that
is NOT within the regular business of
the corporation. Such a job or
undertaking must also be identifiably
separate and distinct from the ordinary
or regular business operations of the
employer [Villa v. NLRC, G.R. No.
117043 (1988)].
Test of Project Employment
W/N employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined at
the time of the engagement of the employee
[D.M. Consunji v. NLRC, G.R. No. 116572
(2000)].
Note: When the employment contract does not
state a particular date, but it does specify that
termination of employment is to be on a “day
certain” -- the day when the specified phase of
work would be completed --, the employee
cannot be considered regular. He is a project
employee [Filipinas Pre-Fabricated Building
Systems, Inc. v. Puente, G.R. No. 153832
(2005)].
LABOR 2
Indicators of Project Employment
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, is
defined in an employment contract;
3. Agreement and is made clear to the
employee at the time of the hiring;
4. The work/service to be performed by
the employee is in connection with the
particular project/undertaking for which
he is engaged;
5. The employee, while not employed and
awaiting engagement, is free to offer
his services to any other employer;
6. The termination of his employment in
the particular project/undertaking is
reported to the DOLE Regional Office
having jurisdiction over the workplace
following the date of his separation
from work, using the prescribed form
on employees’ terminations
/dismissals/suspensions;
7. An undertaking in the employment
contract by the employer to pay
completion bonus to the project
employee as practiced by most
construction companies [D.O. No. 19,
Sec. 2.2; Samson v. NLRC, G.R. No.
11366 (1996)].
Repeated Hiring, Length of Service Not
Determinative
The repeated and successive rehiring of
project employees do not qualify them as
regular employees. What is determinative is
whether the employment has been fixed for a
specific project or undertaking, its
completion has been determined at the time of
the engagement of the employee [Leyte
Geothermal Power Progressive Employees
Union v. Philippine National Oil Company, G.R.
No. 170351 (2011)].
The fact that employment as project
employees has gone beyond 1 year does not
legally dissolve their status as project
employees. LC 280(2) providing that an
employee who has served at least 1 year
shall be considered a regular employee,
relates to casual employees, not to project
employees [Raycor Aircontrol Systems v.
NLRC, G.R. No. 114290 (1996)].
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Generally, length of service provides a fair
yardstick for determining when an employee
initially hired on a temporary basis becomes a
permanent one, entitled to the security and
benefits of regularization. But this standard
will not be fair, if applied to the construction
industry, simply because construction firms
cannot guarantee work and funding for its
payrolls beyond the life of each project [William
Uy Construction Corp. v. Trinidad, G.R. No.
183250 (2010)].
e. Seasonal
Employment is not deemed regular where the
work or service to be performed is seasonal in
nature and the employment is for the duration
of the season [Art. 295].
Seasonal Employees Defined
Those whose work or services to be performed
are seasonal in nature, as there is no
continuing need for the worker. Their
employment is for the duration of the season.
“Regular Seasonal” Employees After One
Season
Seasonal workers who are constantly rehired
and are only temporarily laid off during off-
season are not separated from service in said
period, but are merely considered on leave
until work resumes. They are considered
regular and permanent employees. The nature
of their relationship is such that during off-
season they are temporarily laid off but during
summer season they are re-employed, or when
their services may be needed. They are not
strictly speaking separated from the service but
are merely considered as on leave of absence
without pay until they are re-employed
[Philippine Tobacco Flue-Curing & Redrying
Corp. v. NLRC, G.R. No. 127395 (1998)].
Must Only Be Hired for the Duration of
One Season
To be considered seasonal employees, it is not
enough that work or services performed are
seasonal in nature. The employees must have
been employed only for the duration of one
season [Hacienda Fatima v. National
Federatiom of Sugarcane Workers, G.R. No.
149440 (2003)].
LABOR 2
Exception to One Season Rule (illustrative
case)
Although respondent constantly availed herself
of the petitioners’ services from year to year, it
was clear from the facts therein that they were
not in her regular employ. Petitioners therein
performed different phases of agricultural work
in a given year. However, during that period,
they were free to work for other farm owners,
and in fact they did. In other words, they
worked for respondent, but were nevertheless
free to contract their services with other farm
owners. The Court was thus emphatic when it
ruled that petitioners were mere project
employees, who could be hired by other farm
owners [Mercado, Sr. v. NLRC, G.R. No.
79869 (1991)].
f. Fixed-Term
Brent Doctrine
When the following indicators are present,
fixed-term employment is valid:
1. Fixed period of employment was
knowingly and voluntarily agreed upon
by the parties absent any circumstance
vitiating consent
2. It satisfactorily appears that the
employer and employee dealt each
other on more or less equal footing with
no moral dominance exercised by one
over the other.
Reason for Equal Footing Indicator
When a prospective employee, on account of
special skills or market forces, is in a position
to make demands upon the prospective
employer, such prospective employee needs
less protection than the ordinary worker. The
level of protection to labor must be determined
on the basis of the nature of the work,
qualifications of the employee, and other
relevant circumstances [Fuji Television
Network Inc v. Espiritu, G.R. No. 204944-45
(2014)].
Distinguished from Project Employees
Fixed-term employees are different from
project employees, as the former negotiates
their employment contract on more equal
footing with the employer than the latter.
Furthermore, both kinds of employment
happen within a period. For project employees,
the determining factor is the activity (w/n
project) to be performed. For fixed-term
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employees, the determining factor is the day
certain agreed upon (i.e., the commencement
and termination of the EER) [GMA Network v.
Pabriga, G.R. No. 176419 (2013)].
Distinguished from Independent
Contractors
No EER exists between independent
contractors and their principals; their contracts
are governed by the law on contracts and other
applicable law. Employees under fixed-term
contracts cannot be independent contractors
because in fixed-term contracts, an EER
exists [Fuji Television Network, Inc. v. Espiritu,
G.R. No. 204944-45 (2014)].
Regular Fixed-Term Employee
Where an employee’s contract had been
continuously extended or renewed to the same
position, with the same duties and remained in
the employ without any interruption, then such
employee is a regular employee. The
employee’s contract indicating a fixed-term did
not automatically mean that he/she could never
be a regular employee.
An employee can be a regular employee with a
fixed-term contract. The law does not preclude
the possibility that a regular employee may opt
to have a fixed-term contract for valid reasons.
For as long as it was the employee who
requested, or bargained, that the contract have
a “definite date of termination,” or that the fixed-
term contract be freely entered into by the
employer and the employee, then the validity of
the fixed-term contract will be upheld [Fuji
Television Network Inc v. Espiritu, G.R. No.
204944-45 (2014)].
No Implied Renewal Upon Termination
When the day certain for the termination of
employment comes, there is no implied
renewal or extension of employment This must
be expressly and mutually-agreed upon [Unica
v. Anscor Swire Ship Management Corp., G.R.
No. 184318 (2014)].
In Case of Pre-Termination
Due process must be observed in the pre-
termination of fixed-term contracts in order for
the employer to not be liable for illegal
dismissal [Fuji Television Network Inc v.
Espiritu, G.R. No. 204944-45 (2014)].
LABOR 2
g. Work-Pool Employees
Work Pool Employee
Project employees may or may not be
members of a work pool. Those who are
members of a work pool may either be project
or regular employees [Raycor Aircontrol
Systems, Inc. vs. NLRC, G.R. 114290 (1996)].
A work pool may exist although the workers in
the pool do not receive salaries and are free to
seek other employment during temporary
breaks in the business, provided, that the
worker shall be available when called to report
for a project. Although primarily applicable to
regular seasonal workers, this set-up can
likewise be applied to project workers insofar
as the effect of temporary cessation of work is
concerned [Maraguinot v. NLRC, G.R. No.
120969. (1998)].
Work Pools in Construction Companies
Members of a work pool from which a
construction company draws its project
employees, if considered employees of the
construction company while in the work pool,
are non-project employees or employees for an
indefinite period. If they are employed in a
particular project, the completion of the project
or any phase thereof will not mean severance
of the EER [Policy Instruction No. 20; J. & DO
Aguilar Corp. v. NLRC, G.R. No. 116352
(1997)].
When a Project Employee or a Member of
a Work Pool Acquires the Status of
Regular Employment
1. Continuous rehiring of project
employees even after cessation of a
project;
2. Task performed by the alleged “project
employees” are vital, necessary and
indispensable to the usual business or
trade of the employer [Maraguinot v.
NLRC, G.R. No. 120969. (1998)].
Termination Requirements
A report of termination to the nearest public
employment office every time their
employment was terminated due to completion
of each construction project. Failure of the
employer to file termination reports after every
project completion proves that the employees
are not project employees [Pasos v. Philippine
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National Construction Corp., G.R. No. 192394
(2013)].
2. Legitimate Subcontracting vs.
Labor-Only Contracting
a. Elements
To be considered legitimate contracting or
subcontracting, the following elements must
concur:
1. Distinct and independent business:
Contractor or subcontractor is engaged
in a distinct and independent business
and undertakes to perform the job on
its own responsibility, according to its
own manner and method;
2. Substantial capital or investment:
Contractor or subcontractor has
substantial capital to carry out the job
farmed out by the principal on his
account, manner and method,
investment in the form of tools,
equipment, machinery and
supervision;
3. Free from control/direction of the
principal: In performing the work,
contractor or subcontractor is free from
the control/direction of the principal in
all matters regarding performance of
the work except the result;
4. Compliance with labor laws: Service
Agreement ensures that employees of
the contractor/subcontractor are given
all the benefits and rights they are
entitled to under labor laws [Sec. 8,
D.O. No. 174-17].
Substantial Capital
Refers to paid-up capital stocks/shares of at
least P5,000,000 in the case of corporations,
partnerships and cooperatives; in case of
single proprietorship, a net worth of at least
P5,000,000 [Sec. 3(l), D.O. No. 174-17].
b. Trilateral Relationship
When the above-elements are present, a
trilateral relationship arises. It consists of the
following parties:
1. Principal - Any natural or juridical
entity, whether an employer or not, who
puts out or farms out a job or work to a
contractor.
2. Contractor - Any person or entity
engaged in a legitimate contracting or
LABOR 2 LABOR LAW
subcontracting arrangement providing B. Termination by Employer
services for a specific job or
undertaking farmed out by a principal
1. Substantive Due Process
under a Service Agreement.
3. Contractor’s employee - Employee of
Substantive Due Process - whether the
the contractor hired to perform or
termination was based on the provisions of the
complete a job or work farmed out by
Labor Code or in accordance with
the principal [Sec. 3, D.O. No. 174-17].
jurisprudence.

The dismissal must be for any of the causes

c. Solidary Liability provided for in Art. 297-299.
Solidary Liability of Principal and a. Just Causes
Contractor
1. Serious Misconduct or Willful
Every employer or indirect employer shall be
Disobedience (Insubordination)
held responsible with his contractor for any
2. Gross & Habitual Neglect of Duties
violations of labor laws. For purposes of
3. Fraud/Willful Breach of Trust
determining the extent of their civil liability, they
4. Commission of A Crime
shall be considered as direct employers [Art.
5. Analogous cases
109].
An employer may terminate an employment for
any of the following causes:
1. Serious misconduct or willful
disobedience by the employee of the
lawful orders of his employer or
representatives in connection with his
work;
2. Gross and habitual neglect by the
employee of his duties;
3. Fraud or willful breach by the employee
of the trust reposed in him by his
employer or duly authorized
representative;
4. 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
5. Other causes analogous to the
foregoing [Art. 297].

Basis
As a measure of self-protection against acts
inimical to the employer’s interest. An employer
cannot be compelled to continue employing an
employee guilty of acts inimical to the
employer’s interest, justifying loss of
confidence in him [Yabut v. Meralco, G.R. No.
190436 (2012)].

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1. Serious Misconduct or Willful
Disobedience
Requisites of Serious Misconduct
1. There must be misconduct
2. The misconduct is of such grave and
aggravated character
3. It must relate to the performance of
the employee’s duties
4. A showing that the employee
becomes unfit to continue working
for the employer [Sec. 5.2(a), D.O. No.
147-15]
Misconduct refers to the improper or wrong
conduct that transgresses some established
and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and
implies wrongful intent and not mere error in
judgment [Northwest Airlines Inc v. Del
Rosario, G.R. No. 157633 (2014)].
Example: Accusatory and inflammatory
language used by an employee to the
employer or superior [Nissan Motors Phils v.
Angelo, G.R. No. 164181 (2011)].
Requisites of Willful Disobedience
1. There must be disobedience or
insubordination;
2. The disobedience or insubordination
must be willful or intentional
characterized by a wrongful and
perverse attitude;
3. The order violated must be
reasonable, lawful and made known
to the employee [Mirant Philippines
Corp v. Sario, G.R. No. 197598
(2012)]; and
4. The order must pertain to the duties
which he has been engaged to
discharge [Sec. 5.2(b), D.O. No. 147-
15].
The employee’s initial reluctance to prepare
the checks which was seemingly an act of
disrespect and defiance, was for honest and
well-intentioned reasons to protect the
company from liability under the Bouncing
Checks Law. It was not wrongful nor willful.
Neither can it be considered an obstinate
defiance of company authority [Lores Realty
Enterprises v. Paria, G.R. No. 171189 (2011)].
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2. Gross and Habitual Neglect of Duties
Requisites
1. There must be a neglect of duty
2. The neglect must be both gross and
habitual in character
Gross negligence has been defined as the
want or absence of or failure to exercise slight
care or diligence, or the entire absence of care.
It evinces a thoughtless disregard of
consequences without exerting any effort to
avoid them. In order to constitute just cause for
an employee’s dismissal due to negligence, it
must be both gross and habitual. A single or an
isolated act cannot be categorized as habitual
[National Bookstore v. CA, G.R. No. 146741
(2002)].
Gross negligence - want of care in the
performance of one’s duties.
Habitual neglect - repeated failure to perform
one’s duties for a period of time.
Estoppel by Toleration of Management
Breach of rules and regulations which are
tolerated by management cannot serve as a
basis for termination. The rule only applies
when the violation is not tantamount to fraud or
commission of illegal activities. One cannot
evade liability based on obedience to the
corporate chain of command [PNB v. Padao,
G.R. No. 180849, 187143 (2011)].
Gross Negligence Includes Gross
Inefficiency
Gross and habitual neglect of duty includes
gross inefficiency, negligence and
carelessness [Century Iron Works, Inv. v.
Banas, G.R. No. 184116 (2013)].
3. Fraud/Willful Breach of Trust
Requisites of Fraud or Willful Breach of
Trust:
1. There must be an act, omission or
concealment;
2. The act, omission or concealment
involves a breach of legal duty, trust, or
confidence justly reposed;
3. It must be committed against the
employer or his/her representative; and
LABOR 2 LABOR LAW
4. It must be in connection with employer [Equitable Banking Corp. v. NLRC,
employee’s work [Sec. 5.2 (d), DO No. G.R. No. 102467 (1997)].
147-15].
Note: DO 174-15 distinguishes fraud or willful
When Dismissal is Proper for breach of trust from loss of confidence, but, as
Fraud/Willful Breach of Trust seen in cases, jurisprudence seems to make
Such breach is willful if it is done intentionally, no such distinction.
knowingly, and purposely, without justifiable
excuse as distinguished from an act done Positions of Trust and Confidence
carelessly, thoughtlessly, heedlessly or 1. Managerial employees - vested with
inadvertently. The act complained of must be powers or prerogatives to lay down
work-related and shows that the employee is management policies and to hire,
unfit to continue working. In addition, it must be transfer, suspend, lay-off, recall,
premised on the fact that the employee discharge, assign or discipline
concerned holds a position of responsibility, employees or effectively recommend
trust and confidence or is entrusted with such managerial actions.
confidence with respect to delicate matters 2. Fiduciary Rank and File - those who in
such as handling or case and protection of the the normal and routine exercise of their
property and assets of the employer functions, regularly handle significant
[Villanueva, Jr. v. NLRC, G.R. No. 176893 amounts of money or property. Ex.
(2012)]. cashiers, auditors, property custodians
[Prudential Guarantee and Assurance
Requisites of Loss of Confidence Employee Labor Union v. NLRC, G.R.
1. There must be an act, omission or No. 185335 (2012)].
concealment;
2. The act, omission or concealment Managerial Fiduciary Rank-
justifies the loss of trust and confidence and-File
of the employer to the employee;
3. The employee concerned must be
holding a position of trust and Mere existence of a Proof of involvement
confidence; basis for the belief of
in the alleged events
4. The loss of trust and confidence should employee’s guilt
in question required;
not be simulated; [Grand Asianmere uncorroborated
5. It should not be used as a subterfuge Shipping Lines Inc.v.assertions and
for causes which are improper, illegal Galvez, G.R. No. accusations are not
or unqualified; and 178184 (2014) enough [Etcuban, Jr.
6. It must be genuine and not a mere v. Sulpico Lines Inc,
afterthought to justify an earlier action Employment for a G.R. No. 148410
taken in bad faith [Sec. 5.2(e), DO No. long time is counted (2005)]
147-15]. AGAINST the
employee [Salvador
When Dismissal is Proper for Loss of v. Philippine Mining
Trust/Confidence Service, G.R. No.
The employee is one holding a position of trust 148766]
and confidence (e.g. managerial or fiduciary
employees). There must be an act that justifies
the loss of trust and confidence based on a Reason for Rule on Managerial
willful breach of trust and founded on clearly Employees
established facts [Wesleyan University - While plain accusations are not sufficient to
Philippines v. Reyes, G.R. No. 208321 (2014)]. justify the dismissal of rank and file employees,
the mere existence of a basis for believing that
Moreover, the act complained must be related managerial employees have breached the trust
to the performance of the duties of the reposed on them by their employer would
employee such as would show him to be suffice to justify their dismissal [Grand Asian
thereby unfit to continue working for the
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LABOR 2
Shipping Lines Inc.v. Galvez, G.R. No. 178184
(2014)].
Acquittal in Criminal Case Arising from
Misconduct
Notwithstanding acquittal in the criminal case
for qualified theft, the company had adequately
established the basis for the company’s loss of
confidence as a just cause to terminate. As
opposed to the “proof beyond reasonable
doubt” standard of evidence in criminal cases,
labor suits require only substantial evidence to
prove the validity of the dismissal [Paulino v.
NLRC, G.R. No. 176184 (2012)].
Betrayal By a Long-Time Employee
Length of service is not a bargaining chip that
can simply be stacked against the employer.
After all, an employer-employee relationship is
symbiotic where both parties benefit from
mutual loyalty and dedicated service, If an
employer had treated his employees well, has
accorded him fairness and adequate
compensation as determined by law, it is only
fair to expect a long-time employee to return
such fairness with at least some respect and
honesty. Thus, it may be said that betrayal by
a long-time employee is more insulting and
odious for a fair employer [Moya v. First Solid
Rubber Industries, G.R. No. 184011 (2013)].
4. Commission of a Crime
Requisites
1. There must be an act or omission
punishable or prohibited by law; and
2. The act or omission was committed by
the employee against the person of
the employer, his immediate family
member, or his duly authorized
representative [Sec. 5.2(f), D.O. No.
147-15].
The employer may validly dismiss for loss of
trust and confidence an employee who
commits an act of fraud prejudicial to the
interest of the employer. Neither a criminal
prosecution nor a conviction beyond
reasonable doubt for the crime is a requisite for
the validity of the dismissal [Concepcion v.
Mimex Import Corporation, G.R. No. 153569
(2012)].
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5. Analogous Causes
Requisites
1. There must be an act or omission
similar to those specified just causes;
and
2. The act or omission must be voluntary
and/or willful on the part of the
employees.
No act or omission shall be considered as
analogous cause unless expressly specified in
the company rules and regulations or policies
[Sec 5.2. (g), D.O. No. 147-15].
Analogous means susceptible of comparison
with another either in general or in some
specific detail; or has a close relationship with
the latter.
Other Causes
1. Abandonment
2. Courtesy resignation
3. Change of ownership
4. Habitual absenteeism/tardiness
5. Poor performance
6. Past offenses
7. Habitual infractions
8. Immorality
9. Totality of infractions
10. Pregnancy out of wedlock
11. Conviction/commission of a crime
12. Temporary “off-detail” or “floating
status”
Abandonment
It is the deliberate and unjustified refusal of an
employee to resume his employment. It is a
form of neglect of duty.
Requisites
1. Failure to report for work or absence
without valid or justifiable reason, and
2. Clear intention to sever the employer-
employee relationship (more
determinative factor and manifested in
overt acts).
The burden to prove whether the employee
abandoned his work rests on the employer
[Protective Maximum Security Inc. v. Celso E.
Fuentes, G.R. No. 169303 (2015)].
LABOR 2
Absence must be accompanied by overt acts
unerringly pointing to the fact that the
employee simply does not want to work
anymore. The employer has the burden of
proof to show a deliberate and unjustified
refusal of the employee to resume employment
without any intention of returning [Tan Brothers
Corp v. Escudero, G.R. No. 188711 (2013)].
Courtesy Resignation
Resignation per se means voluntary
relinquishment of a position or office. Adding
the word ‘courtesy’ did not change the essence
of the resignation [Batongbacal v. Associated
Bank, G.R. No. 184517 (2013)].
Change of Ownership
A mere change in the equity composition of a
corporation is neither just nor an authorized
cause that would legally permit the dismissal of
the corporation’s employees en masse [SME
Bank Inc. v. De Guzman, G.R. No. 184517,
186641 (2013)].
Habitual Absenteeism/Tardiness
It is a form of neglect of duty. Lack of initiative,
diligence and discipline to come to work on
time everyday exhibit the employee’s
deportment towards work. It is inimical to the
general productivity and business of the
employer. This is especially true when the
tardiness and/or absenteeism occur frequently
and repeatedly within an extensive period of
time [RB Michael Press v. Galit, G.R. No.
153510 (2008)].
However, there are instances when
absenteeism is not sufficient to justify
termination. In the case of Cavite Apparel v.
Michelle Marquez [G.R. No. 172044 (2013)],
the SC ruled that though Michelle was guilty of
violating company rules on leaves of absences
and discipline, the dismissal imposed on her
was unjustified under the circumstances.
Michelle had been employed with the employer
for 6 years, with no derogatory record other
than the four absences without official leave,
not to mention she had already been penalized
for the first three absences, the most serious
being a six-day suspension.
Poor Performance
It is tantamount to inefficiency and
incompetence in the performance of official
duties. An unsatisfactory rating can be a just
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cause for dismissal only if it amounts to gross
and habitual neglect of duties. Poor or
unsatisfactory performance of an employee
does not necessarily mean he is guilty of gross
and habitual neglect of duty [Shipmanagement
Inc. v. Campo-Redondo, G.R. No. 199931
(2015)].
Past Offenses
Previous offenses may be used as a valid
justification for dismissal only if the infractions
are related to the subsequent offense upon
which the basis of termination is decreed
[Century Canning Corporation v. Ramil, G.R.
No. 171630 (2010)].
Habitual Infractions
A series of irregularities when put together may
constitute serious misconduct, under which Art.
297 of the Labor Code is a just cause for
dismissal [Gustilo v. Wyeth Phil Inc., G.R. No.
149629 (2004)].
Immorality
DECS Order No. 92 provides that disgraceful
or immoral conduct can be used as a basis for
termination of employment [Santos, Jr. v.
NLRC, G.R. No. 116795 (1998)].
The act of engaging in extramarital affairs was
specifically provided for by the cooperative’s
Personnel Policy as one of the grounds for
termination of employment. The Board
received complaints and petitions from the
cooperative members for the removal of
Bandiola because of his immoral conduct,
hence immorality (extramarital affair) justified
the termination of his employment [Alilem
Credit Cooperative v. Bandila, Jr. G.R. No.
173489 (2013)].
Standard of Morality
It is public and secular, not religious. Whether
a conduct is considered disgraceful or immoral
should be made in accordance with the
prevailing norms of conduct, which as stated in
Leus, refer to those conducts which are
proscribed because they are detrimental to
conditions upon which depend the existence of
and progress of human society.
The fact that a particular act does not conform
to the traditional moral views of a certain
sectarian institution is insufficient to qualify the
act as immoral unless it likewise does not
LABOR 2
conform to the public and secular standards.
More importantly, there must be substantial
evidence to establish premarital sexual
relations and pregnancy out of wedlock is
considered disgraceful or immoral [Capin-
Cadiz v. Brent Hospital, G.R. No. 187417
(2016)].
Totality of Infractions
The totality of infractions or the number of
violations committed during the period of
employment shall be considered in determining
the penalty to be imposed upon an erring
employee. Fitness for continued employment
cannot be compartmentalized into tight little
cubicles of aspects of character, conduct and
ability separate and independent of each other.
While it may be true that the petitioner was
penalized for his previous infractions, this does
not and should not mean that his employment
record would be wiped clean. After all, the
record of an employee is a relevant
consideration in determining the penalty that
should be meted out since an employee’s past
misconduct and present behavior must be
taken together in determining the proper
imposable penalty [Merin v. NLRC, G.R. No.
171790 (2008)].
Pregnancy Out of Wedlock
When the law speaks of immoral or
necessarily, disgraceful conduct, it pertains to
public and secular morality.
Pre-marital sexual relations between two
consenting adults, who have no impediment to
marry each other, and consequently,
conceiving a child out of wedlock, gauged from
a purely public and secular view of morality
does NOT amount to an immoral conduct
[Cheryl Leus v. St. Scholastica College
Westgrove, G.R. No. 187226 (2015)].
Conviction/Commission of a Crime
The charge of drug abuse within the company’s
premises and during work hours constitutes
serious misconduct which is a just cause for
termination [Bughaw Jr. v. Treasure Island
Industrial, G.R. No. 173151 (2008)].
Temporary “Off-Detail” or “Floating
Status”
This is the period of time when security guards
are in between assignments or when they are
made to wait after being relieved from a
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previous post until they are transferred to a new
one.
When this Occurs
1. Security agency’s clients decide not to
renew their contracts with the agency,
resulting in a situation where the
available posts under its existing
contracts are less than the number of
guards in its roster,
2. Contracts stipulate that the client may
request the agency for replacement of
guards assigned to it even for want of
cause.
During such time, the security guard does
not receive any salary or financial
assistance provided by law. It does not
constitute a dismissal, as the assignments
primarily depend on contracts entered into
between security agencies and third
parties, so as long as such status does not
continue beyond a reasonable time. When
such status lasts for more than 6 months,
the employee may be considered
constructively dismissed [Salvaloza v.
NLRC, G.R. No. 182086 (2010)].
Transfer/Reassignment of Work
Jurisprudential guidelines
1. A transfer is a movement from one
position to another of equivalent rank,
level or salary without break in the
service or a lateral movement from one
position to another of equivalent rank
or salary;
2. The employer has the inherent right to
transfer or reassign an employee for
legitimate business purposes;
3. A transfer becomes unlawful where it is
motivated by discrimination or bad faith
or is effected as a form of punishment
or is a demotion without sufficient
cause;
4. The employer must be able to show
that the transfer is not unreasonable,
inconvenient or prejudicial to the
employee [Rural Bank of Cantilan Inc
v. Julve, G.R. No. 169750 (2007)].
LABOR 2
b. Authorized Causes
Also known as “Business-related Causes”
The employer may also terminate the
employment of any employee due to:
1. The installation of labor-saving
devices;
2. Redundancy;
3. Retrenchment to prevent losses; or
4. The closing or cessation of operation of
the establishment or undertaking not
due to serious loss [Art. 298].
Other Causes
1. Disease incurable in 6 months [Art.
299]
2. Enforcement of union security clause in
the CBA
3. Dismissal of union officers for the
conduct of an illegal strike; Dismissal of
union members for participating in the
commission of illegal acts in a strike
[Art. 279 (a)]
4. Termination in conformity with existing
statute/qualification requirements
1. Installation of Labor-Saving Devices
This refers to the installation of machinery to
effect efficiency and economy in the
employer’s method of production [Edge
Apparel Inc v. NLRC, G.R. No. 121314 (1998)].
Requisites
1. There must be introduction of
machinery, equipment, or other
devices;
2. The introduction must be done in good
faith;
3. The purpose for such introduction must
be valid such as to save on cost,
enhance efficiency and other justifiable
economic reasons;
4. There is no other option available to
employer than the introduction of
machinery, equipment or device and
the consequent termination of
employment of those affected thereby;
and
5. There must be fair and reasonable
criteria in selecting employees to be
terminated.
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General Rule: In cases of installation of labor-
saving devices, redundancy and retrenchment,
the Last-In, First-Out Rule shall apply.
Exception: Employee volunteers to be
separated from employment [Sec. 5.2(a), D.O.
No. 147-15].
2. Redundancy
Redundancy exists when the service capability
of the workforce is in excess of what is
reasonably needed to meet the demands of the
business enterprise.
A position is redundant when it is superfluous
and superfluity of a position or positions could
be the result of a number of factors such the
overhiring of workers, a decrease in the volume
of business or dropping of a particular line or
service previously manufactured or undertaken
by the enterprise [Morales v. Metrobank, G.R.
No. 182475 (2012)].
Requisites
1. There must be superfluous positions or
services of employees;
2. The positions or services are in excess
of what is reasonably demanded by the
actual requirements of the enterprise to
operate in an efficient and economical
manner;
3. There must be good faith in abolishing
redundant positions;
4. There must be fair and reasonable
criteria in selecting the employees to
be terminated; and
5. There must be adequate proof of
redundancy such as but not limited to
the new staffing pattern, feasibility
studies/proposal, on the viability of
newly created positions, job description
and the approval by the management
of the restructuring [Sec. 5.4(b), D.O.
No. 147-15].
In implementing a redundancy program, the
employer is required to adopt fair and
reasonable criteria taking into consideration
factors such as (a) preferred status, (b)
efficiency, and (c) seniority among others
[Morales v. Metrobank, G.R. No. 182475
(2012)].
LABOR 2
3. Retrenchment to Prevent Serious Loss
Requisites
1. The retrenchment is reasonably
necessary and likely to prevent
business losses;
2. The losses, if already incurred, are not
merely de minimis, but substantial,
serious, actual and real, or if only
expected are reasonably imminent as
perceived objectively and in good faith
by the employer;
3. The expected or actual losses must be
proved by sufficient and convincing
evidence;
4. The retrenchment must be in good faith
for the advancement of its interest and
not to defeat or circumvent the
employees’ right to security of tenure;
and
5. There must be fair and reasonable
criteria in ascertaining who would be
dismissed and would be retained
among the employees such as status,
efficiency, seniority, physical fitness,
age and financial hardship for certain
workers [Sec. 5.4(c), D.O. No. 147-15].
The employer bears the burden of proving the
existence of the imminence of substantial
losses with clear and satisfactory evidence that
there are legitimate business reasons justifying
a retrenchment [Mount Carmel College
Employees Union v. Mount Carmel College,
G.R. No. 187621 (2014)].
Two Kinds of Losses Justifying
Retrenchment
a. Incurred losses - substantial, serious
actual and real
b. Expected losses - reasonably imminent
[Sanoh Fulton Phils v. Bernardo
Tagohoy, G.R. No. 187214 (2013)].
4. Closing or Cessation of Business Not
Due to Serious Loss
Requisites
1. There must be a decision to close or
cease operation of the enterprise by
the management;
2. The decision was made in good faith;
and
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3. There is no other option available to
the employer except to close or cease
operations [Sec 5.4(d), DO No. 147-
15].
Unless the closing is for the purpose of
circumventing the provisions of this Title [Art.
298].
By serving a written notice on the workers and
the Ministry of Labor and Employment at least
1 month before the intended date thereof [Art.
298].
Guidelines
1. Closure or cessation of operations of
establishment or undertaking may
either be partial or total.
2. Closure or cessation of operations of
establishment or undertaking may or
may not be due to serious business
losses or financial reverses. In both
instances, proof must be shown that:
1. It was done in good faith to
advance the employer's
interest and not for the purpose
of defeating or circumventing
the rights of employees under
the law or a valid agreement;
and
2. A written notice on the affected
employees and the DOLE is
served at least 1 month before
the intended date of
termination of employment.
3. The employer can lawfully close shop
even if not due to serious business
losses or financial reverses but
separation pay, which is equivalent to
at least one month pay as provided for
by Article 283 of the Labor Code, as
amended, must be given to all the
affected employees.
4. If the closure or cessation of operations
of establishment or undertaking is due
to serious business losses or financial
reverses, the employer must prove
such allegation in order to avoid the
payment of separation pay. Otherwise,
the affected employees are entitled to
separation pay.
5. The burden of proving compliance with
all the above-stated falls upon the
employer [Manila Polo Club
LABOR 2 LABOR LAW
Employees’ Union v. Manila Polo Club,
employees shareholders
G.R. No. 172846 (2013)].
affected by are not
the sale, nor entitled to
Closure of Department is it liable for lawfully
The closure of a department or division of a the payment dismiss
company constitutes retrenchment by, and not of their corporate
closure of, the company itself [Waterfront Cebu claims. The employees
City Hotel v. Jimenez, G.R. No. 174214 most that it absent a just
(2012)]. may do, for or authorized
reasons of cause [SME
Corporate Acquisitions public policy Bank v. De
Asset Sales Stock Sales and social Guzman,
justice, is to G.R.
give No.184517
Corporate The preference (2013)]
entity sells individual or to the
all or corporate qualified
substantially shareholders separated
all of its sell a personnel of
Sale the selling
assets to controlling
another lock of stock firm.
entity. to new or
existing
shareholders. Criteria in Selecting Employees for
Dismissal
1. Preferred status (e.g. temporary,
Seller in A shift in the casual or regular employees)
good faith is composition 2. Efficiency
authorized to of its 3. Physical fitness
dismiss the shareholders 4. Age
affected will not affect 5. Financial hardship
employees, its existence 6. Seniority [Asian Alcohol Corp v.
but is liable and NLRC, G.R. No. 131108 (1999)].
for the continuity.
payment of
separation Notwithstandi
pay. ng the stock
Obligations
sale, the
of Seller
corporation
continues to
be the
employer of
its people
and
continues to
be liable for
the payment
of their
wages.

The buyer in The

Obligation good faith is corporation
of Buyer not obliged or its new
to absorb the majority
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LABOR 2 LABOR LAW
Summary
Retrenchment Redundancy Closure Closure
due to
serious
Reduction of Service of The business
personnel employee is in reversal losses, no
usually due to excess of what of the separatio
poor financial is required by fortune of n pay
returns so as to an enterprise the [Manila
cut down on employer Polo Club
costs of whereby Employee
operations in there is a s union v.
terms of wages complete Manila
and salaries cessation Polo
of Club,
business G.R. No.
operation 172846
s and/or (2013)].
actual
locking-
up of the 5. Disease
doors of
the An employer may terminate the services of an
establish employee:
ment, 1. Who has been found to be suffering
usually from any disease; and
due to 2. Whose continued employment is
financial prohibited by law or is prejudicial to his
losses. health as well as the health of his co-
employees [Art. 299].
To avoid or To save To Separation Pay
minimize production prevent An employee terminated on the ground of
business costs. further disease shall be paid separation pay
losses. financial equivalent to at least 1 month salary or to ½
drain month salary for every year of service,
upon the whichever is greater [Art. 299].
employer.
Note: A fraction of at least six (6) months being
1 month or ½ 1 month or 1 Closure considered as one (1) whole year.
month pay per month pay per not due to
year of service year of service serious Requisites
separation pay separation business 1. The employee must be suffering from a
(whichever is pay losses, 1 disease which cannot be cured within 6
higher) (whichever is month or month, even with proper medical
higher) ½ month treatment;
pay per 2. Continued employment is either:
year of 1. Prohibited by law or
service 2. Prejudicial to his health or
separatio 3. Prejudicial to the health of his
n pay co-employees; and
(whichev 3. A certification to that effect issued by a
er is competent public health authority,
higher). which must state that the disease is of
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LABOR 2
such nature or at such a stage that it
cannot be cured within a period of six
(6) months even with proper medical
treatment [Sec. 8, Rule I, Book VI;
Crayons Processing v. Pula, G.R. No.
167727 (2007), Sec. 5.2(f), D.O. 147-
15].
Burden of Proof with Employer
The burden of proof falls upon the employer to
establish the requisites. In the absence of such
certification, the dismissal must be necessarily
declared illegal.
Prior Certification Required
It is only where there is a prior certification from
a competent public authority that the disease
afflicting the employee sought to be dismissed
is of such nature or at such stage that it cannot
be cured within 6 months even with proper
medical treatment that the latter could be
validly terminated from his job [Crayons
Processing v. Pula, G.R. No. 167727 (2007)].
Note: If the disease or ailment can be cured
within the period of 6 months, the employer
shall not terminate the employee but shall ask
the employee to take a leave of absence. The
employer shall reinstate such employee to his
former position immediately upon the
restoration of his health [Sec. 8, Rule I, Book
VI].
6. Enforcement of Union Security Clause
in CBA
The law authorizes the enforcement of union
security clauses, provided it is not
characterized by arbitrariness and always with
due process.
In terminating the employment of an employee
by enforcing the Union Security Clause, the
employer needs only to determine and prove
that:
1. The union security clause is applicable
2. The union is requesting for the
enforcement of the union security
provision in the CBA
3. There is sufficient evidence to support
the union’s decision to expel the
employee from the union or company
As a result of enforcing a union security clause
falls under the category of just causes for
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termination, in that it is analogous to a
“wrongful act or omission out of one's own
volition” [Slord Development Corp. v. Noya,
G.R. No. 232687 (2019)].
7. Dismissal of Union Officers for the
Conduct of an Illegal Strike; Dismissal of
Union Members for Participating in the
commission of Illegal Acts in a Strike
Any union officer who knowingly participates in
an illegal strike, and any worker or union officer
who knowingly participates in the commission
of illegal acts during a strike may be declared
to have lost employment status [Art. 279 (a)].
8. Termination in Conformity with
Existing Statute/ Qualification
Requirements
While the right of workers to security of tenure
is guaranteed by the Constitution, its exercise
may be reasonably regulated pursuant to the
police powers of the State to safeguard health,
morals, peace, education, order, safety, and
the general welfare of the people.
Consequently, persons who desire to engage
in the learned professions requiring scientific or
technical knowledge may be required to take
an examination as a prerequisite to engaging
in their chosen careers [St. Luke's Medical
Center Employees Assn v. NLRC, G.R. No.
162053 (2007)].
2. Procedural Due Process
The employer shall:
1. Furnish the worker, whose
employment is sought to be
terminated, a written notice containing
a statement of the causes for
termination; and
2. Afford the latter ample opportunity to
be heard and to defend himself, with
the assistance of his representative if
he so desires, in accordance with
company rules and regulations
promulgated pursuant to guidelines set
by the DOLE [Art. 292 (b)].
Any decision taken by the employer shall be
without prejudice to the right of the worker to
contest the validity or legality of his dismissal
LABOR 2
by filing a complaint with the regional branch of
the National Labor Relations Commission [Art.
292 (b)].
Procedural Due Process - manner in which
the dismissal was effected.
1. The first written notice to be served on
the employees should contain the
specific causes or grounds for
termination against them, and a
directive that the employees are given
the opportunity to submit their written
explanation within a reasonable period.
2. The requirement of a hearing is
complied with as long as there was an
opportunity to be heard, and not
necessarily an actual hearing was
conducted.
3. After determining that termination of
employment is justified, the employers
shall serve the employees a written
notice of termination indicating that:
1. All circumstances involving the
charge against the employee
have been considered, and
2. The grounds have been
established to justify the
severance of the employment
[Inguillo v. First Phil Scales,
G.R. No. 165407 (2019)].
The employee must be afforded an opportunity
to be heard and defend himself [Fujitsu
Computer Products Corporation of the Phil v.
CA, G.R. No. 158232 (2005)].
The employer may not substitute the required
prior notice and opportunity to be heard with
the mere payment of 30 day’s salary [PNB v.
Cabansag, G.R. No. 157010 (2005)].
Right to Counsel
The right to counsel, a very basic requirement
of substantive due process, has to be
observed. Indeed the rights to counsel and to
due process of law are two of the fundamental
rights guaranteed by the 1987 Constitution to
any person under investigation, be the
proceeding administrative, civil or criminal
[Salaw v. NLRC, G.R. No. 90786 (1991)].
The procedure can be summarized as follows:
1. Employer must furnish the employee
with a written notice containing the
cause for termination.
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2. The employer must give the employee
an opportunity to be heard. This can be
done either through:
1. Position paper or
2. Clarificatory hearing.
3. The employee MAY also be assisted
by a representative or counsel.
4. The employer must give another
written notice apprising the employee
of its findings and the penalty to be
imposed against the employee, if any.
In labor cases, these requisites meet the
constitutional requirement of procedural due
process, which contemplates, “notice and
opportunity to be heard before judgment is
rendered affecting one’s person or property”
[Montinola v. PAL, G.R. No. 198656 (2014)].
a. Two-Notice Rule
The employer has the burden of proving that a
dismissed worker has been served two notices:
1. First written notice: specifying the
ground(s) for termination and giving the
employee the reasonable opportunity
within which to explain his side.
2. Second written notice: indicating that
upon due consideration of all
circumstances, grounds have been
established to justify his termination.
Reasonable opportunity for the first written
notice should be construed at least 5 calendar
days from receipt of the notice.
Ratio: to give the employee an opportunity to
study the accusation against him, consult a
union official or lawyer, gather data and
evidence, and decide on his defenses [King of
Kings Transport v. Mamac, G.R. No. 166208
(2007); Puncia v. Toyota Shaw/Pasig, G.R. No.
214399 (2016)].
Contents of First Notice
1. Specific causes or grounds for
termination against the employee
2. Directive that the employee is given the
opportunity to submit his written
explanation within a “reasonable
period” or every kind of assistance that
management must accord to enable
him to prepare adequately for his
defense. This should be construed as a
period of at least 5 calendar days from
receipt of notice.
LABOR 2
3. Detailed narration of the facts and
circumstances that will serve as basis
for the charge against the employees.
A general description of the charge will
not suffice [Unilever v. Rivera, G.R. No.
201701 (2013)].
4. The company rules, if any, violated
and/or the grounds under Art. 288
being charged against the employee
[United Tourist Promotions v. Kemplin,
G.R. No. 205453 (2014)].
Contents of Second Notice
1. All circumstances involving the charge
against the employee considered
2. Grounds established to justify the
severance of employment [United
Tourist Promotions v. Kemplin, G.R.
No. 205453 (2014)].
Pre-Dismissal Notice Grounds
An employee may be dismissed only if the
grounds mentioned in the pre-dismissal notice
were the ones cited for termination of
employment [Erector Advertising Sign Groups
v. Cloma, G.R. No. 167218 (2010)].
3. Illegal Dismissal, Reliefs Therefrom
Kinds
No Just or Authorized Cause
For the dismissal of an employee to be valid,
the dismissal must be for any of the causes
provided for in Art. 297-299.
An employer who dismisses an employee
without just or authorized cause is liable for:
1. Reinstatement or separation pay if
reinstatement is not possible; and
2. Full backwages.
Constructive Dismissal
Constructive dismissal is cessation of work
because continued employment is either:
1. rendered impossible, unreasonable or
unlikely;
2. when there is a demotion in rank or
diminution in pay or both; or
3. when a clear discrimination,
insensibility, or disdain by an employer
becomes unbearable to the employee
[Dusit Hotel Nikko v. NUHWRAIN-Dusit
Hotel Chapter, G.R. No. 160391
(2005)].
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The Test of Constructive Dismissal
Whether a reasonable person in the
employee’s position would have felt compelled
to give up his position under the circumstances
[Tuazon v. Bank of Commerce, G.R. No.
192076 (2012)].
It is an act amounting to dismissal but made to
appear as if it were not. Constructive dismissal
is, therefore, a dismissal in disguise. As such,
the law recognizes and resolves this situation
in favor of employees in order to protect their
rights and interests from the coercive acts of
the employer. In fact, the employee who is
constructively dismissed may be allowed to
keep on coming to work [McMer Corp., Inc. v.
NLRC, G.R. No. 193421 (2014)].
Unlawful withholding of wages for a long time
could be tantamount to an illegal constructive
dismissal [Gilles v. CA, G.R. No. 149273
(2009)].
A bona fide suspension of work is allowed for
as long as it does not exceed 6 months.
Failure of the employer to recall the suspended
employees in the 6-month period amounts to
constructive dismissal [SKM Art. Craft Corp. v.
Bauca, G.R. No. 171282 (2013)].
For a transfer to be a valid exercise of
management prerogative:
1. There is no demotion in rank;
2. There is no diminution of salary,
benefits, and other privileges;
3. The action is not motivated by
discrimination, made in bad faith, or
effected as a form of punishment or
demotion without sufficient cause.
Otherwise, the transfer could be considered as
constructive dismissal [The Philippine
American Life and General Insurance Co. v.
Angelita S. Gramaje, G.R. No. 156963 (2004)].
Forced Resignation is Constructive
Dismissal
Mere allegations of threat or force do not
constitute evidence to support a finding of
forced resignation.
LABOR 2
In order for intimidation to vitiate consent, the
following requisites must concur:
1. that the intimidation caused the
consent to be given;
2. that the threatened act be unjust or
unlawful;
3. that the threat be real or serious, there
being evident disproportion between
the evil and the resistance which all
men can offer, leading to the choice of
doing the act which is forced on the
person to do as the lesser evil; AND
4. that it produces a well-grounded fear
from the fact that the person from
whom it comes has the necessary
means or ability to inflict the threatened
injury to his person or property
[Mandapat v. Add Force Personnel,
G.R. No. 180285 (2010)].
Burden of Proof
The burden of proving that the termination was
for a valid or authorized cause shall rest on the
employer [Art. 292 (b)].
In illegal dismissal cases, the onus of proving
that the employee was not dismissed or, if
dismissed, that the dismissal was not illegal,
rests on the employer, failure to discharge
which would mean that the dismissal is not
justified and, therefore, illegal [Macasero v.
Southern Industrial Gases Philippines, G.R.
No. 198656 (2014)].
Degree of Proof
In labor cases, as in other administrative
proceedings, substantial evidence is required
and it is such relevant evidence as a
reasonable mind might accept as adequate to
support a conclusion [Andrada v. Agemar
Manning Agency, G.R. No. 194758 (2012)].
Substantial evidence is necessary for an
employer to effectuate any dismissal.
Uncorroborated assertions and accusations by
the employer do not suffice; otherwise the
constitutional guarantee of security of tenure of
the employee would be jeopardized [Kulas
Ideas & Creations et. al. v. Alcoseba & Arao
Arao, G.R. No. 180123 (2010)].
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Reliefs from Illegal Dismissal
The following reliefs are cumulative and not
alternative:
1. Reinstatement
2. Options Given to Employers
1. Actually reinstate the
dismissed employees or,
2. Constructively reinstate them
in the payroll.
3. Backwages
4. Damages and Attorney’s Fees
5. Separation Pay
a. Reinstatement
Reinstatement means restoration to a state or
condition from which one had been removed or
separated. The person reinstated assumes the
position he had occupied prior to his dismissal
[Asian Terminals, Inc. v. Villanueva, G.R. No.
143219 (2006)].
General Rule: Reinstatement and backwages
Exceptions:
a. Separation pay
b. Closure of business [Retuya v. Hon.
Dumarpa, G.R. No. 148848 (2003)]
c. Economic business conditions [Union
of Supervisors v. Secretary of Labor,
G.R. No. L-39889 (1981)]
d. Employee’s unsuitability [Divine Word
High School v. NLRC, G.R. No. 72207
(1986)]
e. Employee’s retirement/ overage [New
Philippine Skylanders, Inc. v. Dakila,
G.R. No. 199547 (2012)]
f. Antipathy and antagonism [Wensha
Spa Center v. Yung, G.R. No. 185122
(2010)]
g. Job with a totally different nature [DUP
Sound Phils. v. CA, G.R. No. 168317
(2011)]
h. Long passage of time
i. Inimical to the employer's interest
j. When supervening facts have
transpired which make execution on
that score unjust or inequitable or, to an
increasing extent [Emeritus Security &
Maintenance Systems, Inc. v. Dailig,
G.R. No. 204761 (2014)]
Prescription Period
An action for reinstatement by reason of illegal
dismissal is one based on an injury, which may
LABOR 2
be brought within 4 years from the time of
dismissal [Art. 1146, Civil Code].
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated
employee, insofar as the reinstatement aspect
is concerned, shall immediately be executory,
pending appeal. The employee shall either be
admitted back to work under the same terms
and conditions prevailing prior to his dismissal
or separation or, at the option of the employer,
merely reinstated in the payroll. The posting of
a bond by the employer shall not stay the
execution for reinstatement provided herein
[Art. 229].
Options Given to Employers
a. Actually reinstate the dismissed
employees or,
b. Constructively reinstate them in the
payroll.
Either way, this must be done immediately
upon the filing of their appeal, without need of
any executory writ.
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 reversal by the higher
court.
The Labor Arbiter's order of reinstatement is
immediately executory and the employer has to
either re-admit them to work under the same
terms and conditions prevailing prior to their
dismissal, or to reinstate them in the payroll,
and that failing to exercise the options in the
alternative, employer must pay the employee's
salaries [Magana v. Medicard Philippines, Inc.,
G.R. No. 174833 (2010)].
No Refund Doctrine
An employee cannot be compelled to
reimburse the salaries and wages he received
during the pendency of his appeal,
notwithstanding the reversal by the NLRC of
the LA's order of reinstatement [College of the
Immaculate Conception v. NLRC, G.R. No.
167563 (2010)].
Note: However, Rule XI, Sec. 14 of the 2011
NLRC Rules of Procedure provide for
restitution of amounts paid pursuant to
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execution of awards during pendency of the
appeal. However, it expressly disallows
restitution of wages paid due to reinstatement
pending appeal.
b. Backwages
Definition
Backwages are:
1. Earnings lost by a worker due to his
illegal dismissal;
2. A form of relief that restores the income
lost by reason of such unlawful
dismissal;
3. In the nature of a command to the
employer to make a public reparation
for illegally dismissing an employee.
1. It is not private compensation or
damages;
2. Nor is it a redress of a private right [St.
Theresa's School of Novaliches
Foundation v. NLRC, G.R. No. 122955
(1998)].
Backwages and reinstatement are two reliefs
that should be given to an illegally dismissed
employee. They are separate and distinct from
each other.
An illegally dismissed employee is entitled to
(1) either reinstatement, if viable, or separation
pay if reinstatement is no longer viable, and (2)
backwages [Aurora Land Projects Corp. v.
NLRC, G.R. No. 114733 (1997)].
Effect of Failure to Order Backwages
A “plain error” which may be rectified, even if
employee did not bring an appeal regarding the
matter [Aurora Land Projects Corp. v. NLRC,
supra].
Extent of Entitlement
General Rule: An illegally dismissed employee
is entitled to full backwages.
Exceptions:
1. The Court awarded limited backwages
where the employee was illegally
dismissed but the employer was found
to be in good faith [San Miguel
Corporation v. Javate, Jr., G.R. No. L-
54244 (1992)];
2. Delay of the EE in filing the case for
illegal dismissal [Mercury Drug Co.,
Inc. v. CIR, supra].
LABOR 2 LABOR LAW
Computation of Backwages Note that according to Nacar v. Gallery
Full backwages means exactly that, i.e., Frames, when the judgment of the court
without deducting from backwages the awarding a sum of money becomes final and
earnings derived elsewhere by the concerned executory, the rate of legal interest … shall be
employee during the period of his illegal 6% per annum from such finality until its
dismissal [Bustamante v. NLRC, G.R. No. satisfaction, this interim period being deemed
111651 (1996)]. to be by then an equivalent to a forbearance of
credit [Nacar v. Gallery Frames, G.R. No.
The formula of awarding reasonable net 189871 (2013)].
backwages without deduction or
qualification relieves the employees from c. Separation Pay, Doctrine of Strained
proving or disproving their earnings during their Relations
lay-off and the employers from submitting [Arts. 289 & 290; DOLE Handbook on Worker’s
counterproofs, and obviates the twin evils of: Statutory Monetary Benefits (2018)]
1. Idleness on the part of the employee Separation pay is defined as the amount that
who would "with folded arms, remain an employee receives at the time of his
inactive in the expectation that a severance from the service and is designed to
windfall would come to him" [Itogon provide the employee with the wherewithal
Suyoc Mines, Inc. v. Sangilo-Itogon during the period that he is looking for another
Workers Union, G.R. No. L-24189 employment [A’ Prime Security Services v.
(1968), as cited in Diwa ng Pagkakaisa NLRC, G.R. No. 107320 (1993)].
v. Filtex International Corp., G.R. No.
23960-61 (1972)]; and Coverage
2. Attrition and protracted delay in
satisfying such award on the part of General Rule:
unscrupulous employers who have
seized upon the further proceedings to Cause for Entitlement
determine the actual earnings of the Termination
wrongfully dismissed or laid-off
employees [See La Campana Food Art. 288: Termination None
Products, Inc. v. CIR, G.R. No. L- by Employer:
27907 (1969); and Kaisahan ng Mga a. Serious
Manggagawa v. La Campana Food misconduct or
Products, Inc., G.R. No. L-30798 willful
(1970)]. disobedience
of lawful
The salary base properly used should be the orders
basic salary rate at the time of dismissal plus b. Gross and
the regular allowances; allowances include: habitual
1. Emergency cost of living allowances neglect of
(ECOLA), transportation allowances, duties
13th month pay [Paramount Vinyl c. Fraud or willful
Product Corp. v. NLRC, G.R. No. breach of trust
81200 (1990)]; d. Commission
2. Also included are vacation leaves, of a crime
service incentive leaves, and sick against
leaves. employer or
immediate
The effects of extraordinary inflation are not to member of his
be applied without an official declaration family or
thereof by competent authorities [Lantion v. representative
NLRC, G.R. No. 82028 (1990)]. e. Analogous
causes

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[Phimco Industries v. NLRC, G.R. No. 118041
Cause for
Entitlement (1997); Hinatuan Mining Corp v. NLRC, G.R.
Termination
No. 117394 (1997) cited in JPL Marketing
Promotions v. CA, G.R. No. 151966 (2005)]
Art. 289: Installation of Equivalent to at
labor-saving devices least 1 month pay or Amount
or redundancy 1 month pay for
every year of One-Half (½) Month Pay per Year of Service
service, whichever An employee is entitled to receive separation
is higher pay equivalent to ½ month pay for every year
of service, a fraction of at least six (6) months
Art. 289: Equivalent to at being considered as one whole year, if his/her
Retrenchment to least 1 month pay or separation from the service is due to any of the
prevent losses or ½ month pay for following authorized causes:
closure or cessations every year of 1. Retrenchment to prevent losses (i.e.
of operations of service*, whichever reduction of personnel effected by
establishments or is higher management to prevent losses) [Art.
undertaking not due to 298];
serious business 2. Closure or cessation of operation of an
losses or financial establishment not due to serious
reverses losses or financial reverses [Art. 298];
3. When the EE is suffering from a
disease not curable within a period of
Art. 290: Disease Equivalent to at six (6) months and his/her continued
when continued least 1 month pay or employment is prejudicial to his/her
employment is ½ month pay for health or to the health of his/her co-
prohibited by law or is every year of employees [Art. 299]; and,
prejudicial to his service*, whichever 4. Lack of service assignment of security
health or health of co- is higher guard for a continuous period of six (6)
employees months [D.O. 150, s. 2016].

Art. 291: Termination None
by employee whether
with or without just
cause
*A fraction of at least 6 months shall be
considered 1 whole year
Exceptions: Considerations of equity as in
the cases of Filipro, Inc. v. NLRC [G.R. No.
70546 (1986)]; Metro Drug Corp. v. NLRC
[G.R. No. 72248 (1986)]; Engineering
Equipment, Inc. v. NLRC [G.R. No. L-59221
(1984)]; and San Miguel Corp v. NLRC [G.R.
No. 80774 (1988)] [PLDT v. NLRC, G.R. No.
80609 (1988)].
An employee who voluntarily resigns is not
entitled to separation pay unless stipulated in
the employment contract, or the collective
bargaining agreement, or is sanctioned by
established practice or policy of the employer
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In no case will an employee get less than one
(1) month separation pay if the separation is
due to the above stated causes [DOLE
Handbook on Workers’ Statutory Monetary
Benefits, 2018 ed.].
One-Month Pay per Year of Service
An employee is entitled to separation pay
equivalent to his/her one-month pay for every
year of service, a fraction of at least 6 months
being considered as one whole year, if his/her
separation from service is due to any of the
following:
1. Installation by employer of labor-saving
devices;
2. Redundancy, as when the position of
the employee has been found to be
excessive or unnecessary in the
operation of the enterprise;
3. Impossible reinstatement of the
employee to his/her former position or
to a substantially equivalent position for
reasons not attributable to the fault of
LABOR 2
the employer [Gaco v. NLRC, G.R. No.
104690 (1994)];
4. Lack of service assignment of security
guard by reason of age [D.O. 150, s.
2016; DOLE Handbook on Workers’
Statutory Monetary Benefits, 2018 ed.].
Notice of Termination
The employer may terminate the employment
of any employee due to the above-mentioned
authorized causes by serving a written notice
on the employee and the DOLE through its
regional office having jurisdiction over the
place of business at least 1 month before the
intended date thereof [DOLE Handbook on
Workers’ Statutory Monetary Benefits, 2018
ed.].
Basis of Separation Pay
The computation of separation pay of an
employee shall be based on his/her latest
salary rate [DOLE Handbook on Workers’
Statutory Monetary Benefits, 2018 ed.].
Inclusion of Regular Allowance in the
Computation
In the computation of separation pay, it would
be error not to integrate the allowance with the
basic salary. The salary base properly used in
computing the separation pay should include
not just the basic salary but also the regular
allowances that an employee has been
receiving [Planters’ Products, Inc. v. NLRC,
G.R. No. 78524 (1989); DOLE Handbook on
Workers’ Statutory Monetary Benefits, 2018
ed.].
Non-Taxable
In case of separation of an official or employee
from the service of the employer due to death,
sickness or other physical disability or for any
cause beyond the control of the said official or
employee, any amount received by him or by
his heirs from the employer as a consequence
of such separation shall likewise be exempt
from tax [Last proviso of par. 1, Sec. 1, RA
4917].
d. Damages
The employee is entitled to moral damages
when the employer acted:
a. in bad faith or fraud;
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b. in a manner oppressive to labor; or in a
manner contrary to morals, good
customs, or public policy [Montinola v.
PAL, G.R. No. 198656 (2014)].
In labor cases, the court may award exemplary
damages "if the dismissal was effected in a
wanton, oppressive or malevolent manner"
[Garcia v. NLRC, G.R. No. 110518 (1994)].
e. Attorneys’ Fees
In cases of unlawful withholding of wages: the
culpable party may be assessed attorney’s
fees.
Amount: equivalent to 10% of the amount of
wages recovered.
It shall be unlawful for any person to demand
or accept, in any judicial or administrative
proceedings for the recovery of wages,
attorney’s fees which exceed 10% percent of
the amount of wages recovered [Art. 111, Civil
Code].
General Rule: attorney's fees and expenses of
litigation, other than judicial costs, cannot be
recovered.
Exception: stipulation to the contrary xxx in
actions for the recovery of wages of household
helpers, laborers and skilled workers [Art.
2208(7), Civil Code].
f. Liabilities of Corporate Officers
Corporate Officers and Directors and
Partners Solidarily Liable
If the recruitment/placement agency is a
juridical being, the corporate officers and
directors and partners as the case may be,
shall be joint and severally liable with the
corporation or partnership for the claims and
damages [Sec. 10, RA 8042 as amended].
g. Burden of Proof
Summary on Burden of Proof
1. Existence of ER-EE Relationship:
Employee
2. Fact of dismissal: Employee
3. Validity of Dismissal: Employer
LABOR 2
EE has Burden of Proving Fact of
Employment and of Dismissal
Before a case for illegal dismissal can prosper,
an employer-employee relationship must first
be established by the employee [Javier v. Fly
Ace Corp., G.R. No. 192558 (2012)].
The employee must first establish by
substantial evidence the fact of his dismissal
from service. If there is no dismissal, then there
can be no question as to the legality or illegality
thereof [MZR Industries v. Colambot, G.R. No.
179001 (2013)].
ER has Burden of Proving Valid Dismissal
Unsubstantiated accusations or baseless
conclusions of the employer are insufficient
legal justifications to dismiss an employee. The
unflinching rule in illegal dismissal cases is that
the employer bears the burden of proof
[Garza v. Coca-Cola Bottlers Philippines, Inc.,
G.R. No. 180972 (2014)].
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C. Termination by Employee
1. Resignation Versus Constructive
Dismissal
Definition of Resignation
Resignation is the voluntary act of an employee
who finds himself in a situation where he
believes that personal reasons cannot be
sacrificed in favor of the exigency of the
service, such that he has no other choice but to
disassociate himself from his employment
[Cervantes v. PAL Maritime Corp., G.R. No.
175209 (2013)].
To constitute a resignation:
1. It must be unconditional and with the
intent to operate as such;
2. There must be an intention to
relinquish a portion of the term of office
accompanied by an act of
relinquishment.
The fact that the employee signified his desire
to resume his work when he went back to
AZCOR after recuperating from his illness, and
actively pursued his case for illegal dismissal
before the labor courts when he was refused
admission by his employer, negated any
intention on his part to relinquish his job at
AZCOR [Azcor Manufacturing Inc. v. NLRC,
G.R. No. 117963 (1999)].
Well-entrenched is the rule that resignation is
inconsistent with the filing of a complaint for
illegal dismissal [Blue Angel Manpower and
Security Services Inc. v. Court of Appeals, G.R.
No. 161196 (2008)].
The rule requiring an employee to stay or
complete the 30-day period prior to the
effectivity of his resignation becomes
discretionary on the part of management, as an
employee who intends to resign may be
allowed a shorter period before his resignation
becomes effective [Hechanova Bugay Vilchez
Lawyers v. Matorre, G.R. No. 198261 (2013)].
Requisites of a Valid Resignation
1. Voluntary, unconditional, and
intentionally to relinquish a portion of a
term of employment;
2. Accompanied by an act of
relinquishment.
LABOR 2 LABOR LAW
Intent to Relinquish 2. Abandonment
As the intent to relinquish must concur with the
overt act of relinquishment, the acts of the It is the deliberate and unjustified refusal of an
employee before and after the alleged employee to resume his employment. It is a
resignation must be considered in determining form of neglect of duty.
whether he or she, in fact, intended to sever his
or her employment [Saudi Arabian Airlines v. Requisites
Rebesencio, G.R. No. 198587 (2015)]. 1. Failure to report for work or absence
without valid or justifiable reason, and
Resignation is voluntary when the act of 2. Clear intention to sever the employer-
resignation and the intention to resign concur. employee relationship (more
If the resignation was done because of determinative factor and manifested in
oppressive conditions set by the employer, overt acts).
such is tantamount to constructive dismissal
[Saudi Arabian Airlines v. Rebesencio, G.R. The burden to prove whether the employee
No. 198587 (2015)]. abandoned his work rests on the employer
[Protective Maximum Security Inc. v. Celso E.
Constructive Fuentes, G.R. No. 169303 (2015)].
Resignation
Dismissal
Absence must be accompanied by overt acts
unerringly pointing to the fact that the
Voluntary act of an Involuntary or forced employee simply does not want to work
employee who is in a resignation due to the
anymore. The employer has the burden of
situation where one harsh, hostile, and
proof to show a deliberate and unjustified
believes that personal unfavorable
reasons cannot be conditions set by the
refusal of the employee to resume employment
sacrificed in favor of employer. It is without any intention of returning [Tan Brothers
the exigency of the essentially quitting or Corp v. Escudero, G.R. No. 188711 (2013)].
service. It is a formal cessation of work
pronouncement or because continued
relinquishment of an employment is
office, with the rendered impossible,
intention of unreasonable or
relinquishing the unlikely; when there is
office accompanied a demotion in rank or
by the act of a diminution of pay
relinquishment [Gan and other benefits. It
v. Galderma exists if an act of clear
Philippines, Inc.] discrimination,
insensibility, or
disdain by an
employer becomes so
unbearable on the
part of the employee
that it could foreclose
any choice by him
except to forego his
continued
employment [Gan v.
Galderma Philippines,
Inc.]

Valid termination of Illegal dismissal

employment by the
employee.

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D. Preventive Suspension
Definition
Preventive suspension is a disciplinary
measure for the protection of the company’s
property pending investigation of any alleged
malfeasance or misfeasance committed by the
employee [Gatbonton v. NLRC, G.R. No.
146779 (2006)].
It is important to note that preventive
suspension is not a penalty, but a part of a
process to investigate a questioned action of
an employee. Preventive suspension does not
in itself prove that the employer already finds
the employee guilty of the charges he is asked
to answer and explain [Soriano v. NLRC et. al.,
G.R. No. 75510 (1987)].
When Imposed
Preventive suspension may be legally imposed
on employee whose alleged violation is the
subject of an investigation.
The employer may place the worker concerned
under preventive suspension if his continued
employment poses a serious and imminent
threat to the life or property of the employer or
of his co-workers. When, however, it is
determined that there is no sufficient basis to
justify an employee’s preventive suspension,
the latter is entitled to the payment of salaries
during the time of preventive suspension”
[Gatbonton v. NLRC, G.R. No. 146779 (2006)].
Purpose
The purpose of his suspension is to prevent
him from causing harm or injury to the company
as well as to his fellow employees [Sec. 8, Rule
XXIII, IRR].
Period of Suspension
No preventive suspension shall last longer than
thirty (30) days.
Upon the expiry of such period, the employer
shall thereafter:
1. Reinstate the worker in his former or in
a substantially equivalent position; or
2. The employer may extend the period of
suspension provided that:
a. During the period of extension,
he pays the wages and other
benefits due to the worker
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b. The worker shall not be bound
to reimburse the amount paid
to him during the extension if
the employer decides, after
completion of the hearing, to
dismiss the worker [Sec. 9,
Rule XXIII, Book V, IRR].
Note: The portion on preventive suspension
under the cited Book V, Rule XXIII, Secs. 8-9
are no longer in existence. The current IRR of
the Labor Code (as of 2020) has replaced Rule
XXIII with “Rule XXIII Contempt” and does not
contain provisions on preventive suspension.
It is curious to note, however, that in a 2018
case [Consolidated Building Maintenance, Inc.
v. Asprec, Jr., G.R. No. 217301 (2018)], the
Court stated that “preventive suspension shall
not last for more than 30 days” however, in
stating so, the Court cited an OLD provision of
the IRR of the Labor Code. In fact, it is a
recurring theme in a number of more recent
cases that the Court would cite old provisions
of the IRR of the labor code which have long
been amended or repealed.
When Preventive Suspension is Deemed
Dismissal
When preventive suspension exceeds the
maximum period allowed without reinstating
the employee either by actual or payroll
reinstatement or when preventive suspension
is for an indefinite period, only then will
constructive dismissal set in.
Not Entitled to Pay
Employee placed under preventive suspension
is not entitled to the payment of wages.
However, if the basis for suspension is later
proven to be unfounded or invalid, the said
employee is entitled to his salary during the
whole period of his suspension [Gatbonton v.
NLRC, G.R. No. 146779 (2006)].
LABOR 2
E. Floating Status
Floating Status in Security Agencies
Temporary “off-detail” or “floating status” is the
period of time when security guards are in
between assignments or when they are made
to wait after being relieved from a previous post
until they are transferred to a new one.
Dire exigency of the employer’s bona fide
suspension of operation, business or
undertaking takes place when:
1. The security agency’s clients decide
not to renew their contracts with the
agency; and
2. Contracts for security services stipulate
that the client may request the agency
for the replacement of the guards
assigned to it
The employer should prove that there are no
posts available to which the employee
temporarily out of work can be assigned [Peak
Ventures Corp v. Nestor Villareal, G.R. No.
184618 (2014)].
Requirement to be Reinstated
The employee on floating status must indicate
his desire to resume his work not later than one
(1) month from the resumption of operations of
his employer or from his relief from the military
or civic duty.
Thereafter, the employer shall reinstate the
employee to his former position without loss of
seniority rights [Art. 301].
When Deemed Constructive Dismissal
When that "floating status" of an employee
lasts for more than six months, he may be
considered to have been illegally dismissed
from the service. Thus, he is entitled to the
corresponding benefits for his separation, and
this will apply to the two types of work
suspension, that is, either of the entire
business or of a specific component thereof
[Valdez v. NLRC, G.R. No. 125028 (1998)].
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F. Retirement
What is Retirement
It is the result of a bilateral act of the parties, a
voluntary agreement between the employer
and the employee whereby the latter, after
reaching a certain age agrees to sever his or
her employment with the former.
Three Kinds of Retirement Schemes
1. Mandated by law: Compulsory and
contributory in character
2. CBA and other agreements:
Agreement between the employer and
the employees
3. Voluntarily given by the employer:
expressly as in an announced
company policy or impliedly as in a
failure to contest the employee's claim
for retirement benefits [Gerlach v.
Reuters Limited, PH, G.R. No. 148542
(2005)].
Requisites for Retroactive Application
1. The claimant for retirement benefits
was still in the employ of the employer
at the time the statute took effect; and
2. The claimant had complied with the
requirements for eligibility for such
retirement benefits under the statute
[Universal Robina Sugar Milling Corp.
v. Caballeda, G.R. No. 156644 (2008)].
1. Eligibility and Coverage
Who are Covered
All employees in the private sector, regardless
of their position, designation, or status, and
irrespective of the method by which their
wages are paid [Sec. 1, IRR, RA 7641].
Exceptions:
1. Employees covered by the Civil
Service Law;
2. Employees in retail, service and
agricultural establishments or
operations regularly employing not
more than ten employees [Sec. 2, IRR,
RA 7641].
Note: Domestic helpers and those in the
personal service of others used to be
exempted but such was deleted by D.O. 20
(1994).
LABOR 2
When the Provisions of RA 7641 Apply
RA 7641 only applies in a situation where there
is:
1. No CBA or other applicable
employment contract providing for
retirement benefits; OR
2. Retirement benefits provided by CBA
or other employment contract fall below
the requirements set by law [Oxales v.
Unilab, G.R. No. 152991 (2008)].
Age of Retirement
In the absence of a retirement plan or
agreement:
1. Compulsory retirement: 65 years old
[Sec. 4, IRR, RA 7641]
2. Optional retirement: 60 years or more
(but below 65) and having served the
establishment for at least 5 years [Sec.
1, IRR, RA 7641].
An employer is free to impose a retirement age
less than 65 for as long as it has the
employees’ consent [Jaculbe v. Silliman
University, G.R. No. 156934 (2007)].
For surface mine workers:
1. Compulsory retirement age: 60 years
old
2. Optional retirement age is 50 and
having served the establishment for at
least 5 years [Sec. 2, RA 10757].
Forfeiture of Benefits
Employees dismissed for just cause are not
entitled to retirement benefits and other
privileges including reinstatement and
backwages. To rule otherwise would be to
reward acts of willful bread of trust by
employees [Sy v. Metropolitan Bank, G.R. No
160618 (2006)].
Employee May Still Work After Retirement
Upon retirement of an employee, whether
optional or compulsory, his services may be
continued or extended on a case to case basis
upon the agreement of the employer and
employee [Sec. 4, IRR, RA 7641].
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2. Amount of Retirement Pay
Minimum Retirement Pay [Sec. 5, IRR, RA
7641]
Minimum Components
½ month salary for “One-half month
every year of service salary” shall include
all of the following:
NOTE: a fraction of Fifteen (15) days
at least 6 months salary based on the
shall be considered a latest salary rate;
year
Cash equivalent of
“one-half month five (5) days of
salary” is equivalent service incentive
to 22.5 days [Capitol leave;
Wireless, Inc. v. Sec.
Confessor, G.R. No. One-twelfth (1/12) of
117174 (1996); the 13th month pay.
Reyes v. NLRC, (1/12 x 365/12 = .083
G.R. No. 160233 x 30.41 = 2.52)
(2007)].
All other benefits that
the employer and
employee may agree
upon
Retirement Pay under RA 7641 vis-à-vis
Retirement Benefits under SSS and GSIS
Laws
The benefits under RA 7641 are other than
those granted by the SSS or the GSIS [Secs. 1
& 2, RA 7641].
Retirement Benefits under a CBA or
Applicable Contract
Any EE may retire or be retired by his/her ER
upon reaching the age established in the CBA
or other applicable agreement/contract and
shall receive the retirement benefits granted
therein; provided, however, that such
retirement benefits shall not be less than the
retirement pay required under RA 7641, and
provided further that if such retirement benefits
under the agreement are less, the ER shall pay
the difference [Art. 302; Sec. 3.2, IRR].
Where both the ER and the EE contribute to a
retirement fund pursuant to the applicable
agreement, the ER’s total contributions and the
accrued interest thereof should not be less
LABOR 2
than the total retirement benefits to which the
EE would have been entitled had there been no
such retirement benefits’ fund. If such total
portion from the ER is less, the ER shall pay
the deficiency [Sec. 3.3, IRR, RA 7641].
a. Retirement Benefits for Workers Paid
by Results
Basis for Computation of Salary for 15
Days
Average Daily Salary (ADS): The ADS is
derived by dividing the total salary for the last
12 months reckoned from the date of
retirement by the number of actual working
days in that particular period, provided that the
determination of rates of payment by results
are in accordance with established regulations
[Sec. 5.3, IRR, RA 7641].
b. Retirement Benefit of Part-Time
Workers
Requisites
Part-time workers are also entitled to
retirement pay of “one-half month salary” for
every year of service under RA 7641 after
satisfying the following conditions precedent
for optional retirement:
1. There’s no retirement plan between the
ER and the EE; and,
2. The EE should have reached the age
of 60 years, and should have rendered
at least 5 years of service with the ER.
Applying the foregoing principle, the
components of retirement benefit of part-time
workers may likewise be computed at least in
proportion to the salary and related benefits
due them [DOLE Handbook on Workers’
Statutory Monetary Benefits, 2018 ed.].
c. Non-Taxable
General Rule: Exempt from all taxes, not liable
to attachment
The retirement benefits received by officials
and employees of private firms in accordance
with a reasonable private benefit plan
maintained by the employer:
1. shall be exempt from all taxes and
2. shall not be liable to attachment,
garnishment, levy or seizure by or
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under any legal or equitable process
whatsoever [Sec. 1, RA 4917].
Exception: Payment of debts
The benefits may be subject of attachment,
garnishment, levy or seizure to cover a debt of
the official or employee concerned to the
private benefit plan or that arising from liability
imposed in a criminal action [Sec. 1, RA 4917].
Requirements to Avail of Exemption
1. That the retiring official or employee
has been in the service of the same
employer for at least 10 years;
2. He is not less than fifty years of age at
the time of his retirement;
3. That the retirement benefits shall be
availed of by an official or employee
only once [Sec. 1, RA 4917];
4. The benefit plan must be approved by
the BIR [Sec. 6, IRR, RA 7641].
Coverage of Exemption from Income Tax
Exempted from Taxation are:
1. The retirement benefits received under
RA 7641;
2. Those received by officials and
employees of private firms, whether
individual or corporate, in accordance
with a reasonable private benefit plan
maintained by the employer [Handbook
on Workers’ Statutory Monetary
Benefits, 2018 ed.];
3. Amount received by the
official/employee or his heirs as a
consequence of separation due to
death, sickness, or other physical
disability or for any cause beyond the
control of the said official or employee
[Sec. 1, RA 4917].
Reasonable Private Benefit Plan Defined
It refers to a pension, gratuity, stock bonus or
profit-sharing plan:
1. Maintained by an employer for the
benefit of some or all of his officials and
employees,
2. Wherein contributions are made by
such employer or officials and
employees, or both, for the purpose of
distributing to such officials and
employees the earnings and principal
of the fund thus accumulated, and
LABOR 2 LABOR LAW
3. Wherein it is provided in said plan that
at no time shall any part of the corpus
or income of the fund be used for, or be
diverted to, any purpose other than for
the exclusive benefit of the said
officials and employees [Sec. 1, RA
4917; Handbook on Workers’ Statutory
Monetary Benefits, 2018 ed.].

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LABOR 2
VII. MANAGEMENT
PREROGATIVE
A. Discipline
Management has the prerogative to discipline
its employees and to impose appropriate
penalties on erring workers pursuant to
company rules and regulations [Jose P.
Artificio v. NLRC, G.R. No. 172988 (2010)].
Among the employer’s management
prerogatives is the right to prescribe
reasonable rules and regulations necessary or
proper for the conduct of its business or
concern, to provide certain disciplinary
measures to implement said rules and to
assure that the same would be complied with
[St. Luke’s Medical Center, Inc. v. Sanchez,
G.R. 212054 (2015)].
The employer’s right to conduct the affairs of
his business, according to its own discretion
and judgment, includes the prerogative to instill
discipline in its employees and to impose
penalties, including dismissal, upon erring
employees [Consolidated Food Corporation v.
NRLC, G.R. No. 118647 (1999)].
Right to dismiss or otherwise impose
disciplinary sanctions upon an employee for
just and valid cause, pertains in the first place
to the employer, as well as the authority to
determine the existence of said cause in
accordance with the norms of due process
[Makati Haberdashery, Inc. v. NLRC, G.R. Nos.
83380-81 (1989)].
Corollary Duty of Employees
The employee has the corollary duty to obey all
reasonable rules, orders, and instructions of
the employer; and willful or intentional
disobedience thereto, as a general rule,
justifies termination of the contract of service
and the dismissal of the employee [St. Luke’s
Medical Center, Inc. v. Sanchez, G.R. 212054
(2015)].
Criteria
The policies, rules and regulations on work-
related activities of the employees must always
be fair and reasonable and the corresponding
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penalties, when prescribed, commensurate to
the offense involved and to the degree of the
infraction [Consolidated Food Corporation v.
NRLC, G.R. No. 118647 (1999); St. Michael’s
Institute v. Santos, G.R. No. 145280 (2001)].
Although the right of employers to shape their
own work force is recognized, this
management prerogative must not curtail the
basic right of employees to security of tenure
[Alert Security & Investigation Agency, Inc. v.
Saidali Pasawilan, et. al., G.R. No. 182397
(2011)].
Disciplinary action against an erring employee
is a management prerogative which, generally,
is not subject to judicial interference. However,
this policy can be justified only if the disciplinary
action is dictated by legitimate business
reasons and is not oppressive [Areno v.
Skycable, G.R. No 180302 (2010)].
B. Transfer of Employees
An employee’s right to security of tenure does
not give him such a vested right in his position,
as would deprive the company of its
prerogative to change his assignment or
transfer him where he will be most useful.
The employer has the right to transfer or assign
employees from one area of operation to
another, or one office to another or in pursuit of
its legitimate business interest.
Management has the prerogative on whether
or not to renew the contract of a fixed-term
employee [Fonterra Brands Phils., Inc. v.
Largado, G.R. No. 205300 (2015)].
Criteria
Provided there is no demotion in rank or
diminution of salary, benefits and other
privileges and not motivated by discrimination
or made in bad faith, or effected as a form of
punishment or demotion without sufficient
cause [Westin Phil. Plaza Hotel v. NLRC, G.R.
No. 121621 (1999)].
When the transfer is not unreasonable, or
inconvenient, or prejudicial to the employee,
and it does not involve a demotion in rank or
diminution of salaries, benefits, and other
privileges, the employee may not complain that
it amounts to a constructive dismissal [Bisig ng
LABOR 2
Manggagawa sa TRYCO v. NLRC, G.R. No.
151309 (2008)].
It is management prerogative for employers to
transfer employees on just and valid grounds
such as genuine business necessity [William
Barroga v. Data Center College of the
Philippines, G.R. No. 174158 (2011)].
Re-Assignments
Re-assignments made by management
pending investigation of irregularities allegedly
committed by an employee fall within the ambit
of management prerogative. The purpose of
reassignments is no different from that of
preventive suspension which management
could validly impose as a disciplinary measure
for the protection of the company's property,
pending investigation of any alleged
malfeasance or misfeasance committed by the
employee [Ruiz v. Wendel Osaka Realty Corp.,
G.R. No. 189082 (2012)].
Employer Bears the Burden of Proof
In cases of a transfer of an employee, the rule
is settled that the employer is charged with the
burden of proving that its conduct and action
are for valid and legitimate grounds such as
genuine business necessity and that the
transfer is not unreasonable, inconvenient or
prejudicial to the employee. If the employer
cannot overcome this burden of proof, the
employee’s transfer shall be tantamount to
unlawful constructive dismissal [Jonathan
Morales v. Harbor Centre Port Terminal Inc.,
G.R. No. 174208 (2012)].
C. Productivity Standards
The employer has the right to demote and
transfer an employee who has failed to observe
proper diligence in his work and incurred
habitual tardiness and absences and indolence
in his assigned work [Petrophil Corporation v.
NLRC, G.R. No. L-64048 (1986)].
In the consolidated cases of Leonardo v. NLRC
[G.R. No. 125303 (2000)] and Fuerte v. Aquino
[G.R. No. 126937 (2000)], the employer
claimed that the employee was demoted
pursuant to a company policy intended to foster
competition among its employees. Under this
scheme, its employees are required to comply
with a monthly sales quota. Should a
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supervisor such as the employee fail to meet
his quota for several consecutive months, he
will be demoted, whereupon his supervisor’s
allowance will be withdrawn and be given to the
individual who takes his place. When the
employee concerned succeeds in meeting the
quota again, he is re-appointed supervisor and
his allowance is restored.
The Supreme Court held that this arrangement
is an allowable exercise of company rights
since an employer is entitled to impose
productivity standards for its workers. In fact,
non-compliance may be visited with a penalty
even more severe than demotion.
D. Bonus
A bonus is "a gratuity or act of liberality of the
giver which the recipient has no right to
demand as a matter of right" [Philippine
National Construction Corp. v. National Labor
Relations Commission, 345 Phil. 324, 331
(1997)]. It is something given in addition to
what is ordinarily received by or strictly due the
recipient.
The granting of a bonus is basically a
management prerogative which 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 employee's basic salaries or wages" xxx
[Kamaya Point Hotel v. National Labor
Relations Commission, Federation of Free
Workers and Nemia Quiambao, G.R. No.
75289 (1989); Traders Royal Bank v. NLRC,
G.R. No. 120592 (1990)].
The matter of giving a bonus over and above
the worker’s lawful salaries and allowances is
entirely dependent on the financial capability of
the employer to give it [Kimberly-Clark
Philippines, Inc. v. Dimayuga, G.R. No. 177705
(2009)].
LABOR 2
E. Change of Working Hours
Management retains the prerogative,
whenever exigencies of the service so require,
to change the working hours of its employees.
So long as such prerogative is exercised in
good faith for the advancement of the
employer’s interest and not for the purpose of
defeating or circumventing the rights of the
employees under special laws or under valid
agreements, this Court will uphold such
exercise [Sime Darby Pilipinas Inc. v. NLRC,
G.R. No. 119205 (1998)].
F. Bona Fide Occupational
Qualifications
General Rule: Employment in particular jobs
may not be limited to persons of a particular
sex, religion, or national origin unless the
employer can show that sex, religion, or
national origin is an actual qualification for
performing the job.
Exception: The exception is called a bona fide
occupational qualification (BFOQ).
In the United States, there are a few federal
and many state job discrimination laws that
contain an exception allowing an employer to
engage in an otherwise unlawful form of
prohibited discrimination when the action is
based on a BFOQ necessary to the normal
operation of a business or enterprise. BFOQ is
valid "provided it reflects an inherent quality
reasonably necessary for satisfactory job
performance" [Yrasuegui v. PAL, G.R. No.
168081 (2008)].
BFOQ in Philippine Jurisdiction
The concept of a bona fide occupational
qualification is not foreign in our jurisdiction.
We employ the standard of reasonableness of
the company policy which is parallel to the
bona fide occupational qualification
requirement.
In Duncan Association of Detailman-PTGWO
and Pedro Tecson v. Glaxo Wellcome
Philippines, Inc., we passed on the validity of
the policy of a pharmaceutical company
prohibiting its employees from marrying
employees of any competitor company. We
held that Glaxo has a right to guard its trade
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secrets, manufacturing formulas, marketing
strategies and other confidential programs and
information from competitors. We considered
the prohibition against personal or marital
relationships with employees of competitor
companies upon Glaxo’s employees
reasonable under the circumstances because
relationships of that nature might compromise
the interests of Glaxo. In laying down the
assailed company policy, we recognized that
Glaxo only aims to protect its interests against
the possibility that a competitor company will
gain access to its secrets and procedures [Star
Paper Corp. v. Simbol, G.R. No. 164774
(2006)].
A requirement that a woman employee must
remain unmarried could be justified as a "bona
fide occupational qualification," or BFOQ,
where the particular requirements of the job
would justify the same, but not on the ground
of a general principle, such as the desirability
of spreading work in the workplace. A
requirement of that nature would be valid
provided it reflects an inherent quality
reasonably necessary for satisfactory job
performance [Phil. Telegraph and Telephone
Company v. NLRC, G.R. No. 118978 (1997)].
G. Post-Employment
Restrictions
In cases where an employee assails a contract
containing a provision prohibiting him or her
from accepting competitive employment as
against public policy, the employer has to
adduce evidence to prove that the restriction is
reasonable and not greater than necessary to
protect the employer’s legitimate business
interests. The restraint may not be unduly
harsh or oppressive in curtailing the
employee’s legitimate efforts to earn a
livelihood, and must be reasonable in light of
sound public policy [Rivera v. Solidbank, G.R.
No. 163269 (2006)].
LABOR 2
H. Clearance Procedures
Institution of Clearance Procedures has
Legal Bases
Requiring clearance before the release of last
payments to the employee is a standard
procedure among employers, whether public or
private. Clearance procedures are instituted to
ensure that the properties, real or personal,
belonging to the employer but are in the
possession of the separated employee, are
returned to the employer before the
employee’s departure.
As a general rule, employers are prohibited
from withholding wages from employees. The
Labor Code also prohibits the elimination or
diminution of benefits. However, our law
supports the employers’ institution of clearance
procedures before the release of wages. As an
exception to the general rule that wages may
not be withheld and benefits may not be
diminished, the Labor Code provides for Wage
deduction under Art. 113. The Civil Code,
under Article 1706, also provides that the
employer is authorized to withhold wages for
debts due.
As long as the debt or obligation was incurred
by virtue of the employer-employee
relationship, generally, it shall be included in
the employee’s accountabilities that are
subject to clearance procedures [Milan v.
NLRC, G.R. No. 202961 (2015)].
I. Limitations on Management
Prerogative; Police Power of the
State
1. Good faith - So long as a company’s
management prerogatives are exercised in
good faith for the advancement of the
employer’s interest and not for the purpose of
defeating or circumventing the rights of the
employees under special laws or under valid
agreements, this Court will uphold them
[Ernesto G. Ymbong v. ABS-CBN
Broadcasting Corp., G.R. No. 184885 (2012)].
It is incumbent upon the company to show that
decisions made under management
prerogative are in good faith and not intended
to circumvent employees’ rights [San Miguel
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Brewery Sales Force Union (PTGWO) v. Ople,
G.R. No. L-53515 (1989)].
The exercise of management prerogative is
valid, provided it is not performed in a
malicious, harsh, oppressive, vindictive or
wanton manner or out of malice or spite
[Magdadaro v. PNB, G.R. No. 166198 (2009)].
2. Without grave abuse of discretion - The
managerial prerogative to transfer personnel
must be exercised without grave abuse of
discretion, bearing in mind the basic elements
of justice and fair play. Having the right should
not be confused with the manner in which the
right is exercised [Tinio v. CA, G.R. No. 171764
(2007)].
3. Law – The privilege of management
prerogative is not absolute, but subject to
limitations imposed by law.
Management prerogative is limited by Sec.
236(g), which gives the Secretary the power to
assume jurisdiction and resolve labor disputes
involving industries indispensable to national
interest. The company’s management
prerogatives are not being unjustly curtailed
but duly tempered by the limitations set by law,
taking into account its special character and
the particular circumstances in the case at
bench [Metrolab Industries, Inc. v. Roldan-
Confesor, G.R. No. 108855 (2013); University
of Immaculate Concepcion Inc. v. Sec. of
Labor, G.R. No. 151379 (2005)].
Although management prerogative refers to
the right to regulate all aspects of employment,
it cannot be understood to include the right to
temporarily withhold salary/wages without the
consent of the employee. To sanction such an
interpretation would be contrary to Art. 116 of
the Labor Code [SHS Perforated Materials, Inc.
v. Diaz, G.R. No. 185814 (2010)].
4. Collective Bargaining – The CBA
provisions agreed upon by the Company and
the Union delimit the free exercise of
management prerogative. The parties in a CBA
may establish such stipulations, clauses, terms
and conditions as they may deem convenient
provided these are not contrary to law, morals,
good customs, public order or public policy
[Goya Inc. v. Goya, Inc., Employees Union-
LABOR 2 LABOR LAW
FFW, G.R. No. 170054 (2013)].

5. Equity and/or Substantial Justice – The

Court should still ensure that the employer
exercises the prerogative to discipline
humanely and considerately, and that the
sanction imposed is commensurate to the
offense involved and to the degree of the
infraction [Dongon v. Rapid Movers and
Forwarders Co., Inc., G.R. No. 163431 (2013)].

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VIII. JURISDICTION AND
RELIEFS
A. Mandatory Conciliation-
Mediation, SENA
The Single-Entry Approach (SENA) is a
prescribed 30-day Mandatory Conciliation-
Mediation Services to be made operational
through the Single Entry Approach Desk
(SEAD) for all labor and employment cases
except:
1. cases on notices of strikes or lock-outs,
or on preventive mediation cases
(NCMB)
2. interpretation and implementation of
CBA (Grievance Machinery) [D.O. No.
107-10].
B. Labor Arbiter
1. Jurisdiction
Except as otherwise provided under the Code,
the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide:
a. Unfair labor practices cases;
b. Termination disputes;
c. Cases that workers may file involving
wages, rates of pay, hours of work and
other terms and conditions of
employment, if accompanied with a
claim for reinstatement;
d. Claims for actual, moral, exemplary
and other forms of damages arising
from the employer-employee relations;
e. Cases arising from any violation of Art.
279 of this Code, including questions
involving the legality of strikes and
lockouts;
f. Except claims for Employees
Compensation, Social Security,
Medicare [Philhealth] and maternity
benefits, all other claims, arising from
employer-employee relations,
including those of persons in domestic
or household service, involving an
amount exceeding P5,000 regardless
of whether accompanied with a claim
for reinstatement [Art. 224];
g. Money claims arising out of employer-
employee relationship or by virtue of
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any law or contract, involving claims for
actual, moral, exemplary and other
forms of damages, as well as
employment termination of OFWs;
h. Wage distortion disputes in
unorganized establishments not
voluntarily settled by the parties [Art.
124];
i. Enforcement of compromise
agreements when there is non-
compliance by any of the parties [Art.
233];
j. Other cases as may be provided by
law.
2. Labor Arbiter vs. Regional Director
[Art. 129]
A money claim arising from employer-
employee relations, except SSS,
ECC/Medicare [Philhealth] claims, is within the
jurisdiction of a Labor Arbiter if:
a. The claim, regardless of amount, is
accompanied with a claim of
reinstatement; or
b. The claim exceeds P5,000, whether or
not there is a claim for reinstatement.
The Regional Director has jurisdiction if:
a. Money claim arose out of employer-
employee relationships;
b. Money claim is NOT accompanied by a
claim for reinstatement; AND
c. Money claim does not exceed P5,000,
whether or not claim arose from ER-EE
relationships.
3. Procedure
a. Requirements for Appeal
Period of Appeal
Labor Arbiter to NLRC: Decisions, awards, or
orders of the [LA] shall be final and executory
unless appealed to the [NLRC] by any or both
parties within 10 calendar days from receipt
[thereof] [Art. 229].
Note: If the last day of the reglementary period
falls on a Sunday or a holiday, the last day shall
be the next working day.
LABOR 2
Grounds of Appeal [Art. 229]
a. If there is prima facie evidence of
abuse of discretion on the part of the
Labor Arbiter or Regional Director;
b. If the decision, resolution or order 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 injury
to the appellant.
Judgment Involving a Monetary Award
An appeal by the employer may be perfected
only upon the posting of a cash or surety bond
issued by a reputable bonding company duly
accredited by the Commission in the amount
equivalent to the monetary award in the
judgment appealed from [Art. 229].
It is clear from the NLRC Rules of Procedure
that appeals must be verified and certified
against forum-shopping by the parties-in-
interest themselves [Antonio B. Salenga, et al.
v. CA, G.R. No. 174941 (2012)].
Note: Decisions of the Labor Arbiter are
appealable to the NLRC. Decisions by the
NLRC are appealable to the CA via Rule 65 [St.
Martin’s Funeral Homes v. NLRC, 295 SCRA
494 (1998)].
Memorandum of Appeal
In all cases, the appellant shall furnish a copy
of the memorandum of appeal to the other
party who shall file an answer not later than ten
(10) calendar days from receipt thereof [Art.
229].
b. Reinstatement and/or Execution
Pending Appeal
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated
employee, insofar as the reinstatement aspect
is concerned, shall immediately be executory,
even pending appeal.
The employee shall either be:
a. Admitted back to work under the same
terms and conditions prevailing prior to
his dismissal or separation; or
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b. Merely reinstated in the payroll, at the
option of the employer.
The posting of a bond by the employer shall not
stay the execution for reinstatement provided
herein [Art. 229].
Reversal of the Order of Reinstatement of
the Labor Arbiter
During the period of appeal until reversal by the
higher court, it is obligatory on the part of the
employer to:
1. Reinstate, and
2. Pay the wages of the dismissed
employee.
If the employee has been reinstated during the
appeal period and such reinstatement order is
reversed with finality, the employee is NOT
required to reimburse whatever salary he
received. He is entitled to such especially if he
actually rendered services during the period
[Garcia v. Philippine Airlines, Inc., G.R. No.
164856 (2009)].
C. National Labor Relations
Commission
1. Jurisdiction
NLRC en banc
a. To promulgate rules and regulations
governing the hearing and disposition
of cases
b. To formulate policies affecting its
administration and operations
c. To allow cases within the jurisdiction of
any division to be heard and decided by
another division
d. To recommend appointment of a Labor
Arbiter
NLRC in Divisions (8 divisions with 3
commissioners each)
a. Exclusive appellate jurisdiction from
decisions of LA (within respective
territorial jurisdiction)
b. Jurisdiction over petitions for injunction
or temporary restraining order under
Art. 225(e)
c. Certified cases: “national interest” labor
disputes certified (or referred) to the
Commission by the SOLE for
LABOR 2
compulsory arbitration under Art. 278
(g)
Exclusive Appellate Jurisdiction: over all
cases decided by Labor Arbiters [Art. 224(b)]
and the DOLE Regional Directors under Art.
129.
2. Function
When sitting in a compulsory arbitration
certified to by the Secretary of Labor, the NLRC
is tasked:
a. To implement the order of the
Secretary as an administrative body,
not as a judicial court
b. To formulate the terms and conditions
of the CBA, staying within the scope of
the order
c. To act within the earliest time possible
and with the end in view that its action
would not only serve the interests of the
parties alone, but would also have
favorable implications to the
community and to the economy as a
whole. [Art. 278(g); Union of Filipino
Employees v. NLRC, G.R. No. 91025
(1990)].
3. Procedure
When there is no need to conduct a
clarificatory hearing, the Commission shall
resolve all certified cases within 30 calendar
days from receipt by the assigned
Commissioner of the complete records, which
shall include the position papers of the parties
and the order of the SOLE denying the motion
for reconsideration of the certification order, if
any.
Where a clarificatory hearing is needed, the
Commission shall, within 5 calendar days from
receipt of the records, issue a notice to be
served on the parties through the fastest
means available, requiring them to appear and
submit additional evidence, if any. All certified
cases shall be resolved by the Commission
within 60 calendar days from receipt of the
complete records by the assigned
Commissioner.
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D. Judicial Review of Labor
Rulings
Petition for Certiorari
A person may file a verified petition in the
proper court, alleging the facts with certainty
and praying that judgment be rendered
annulling or modifying the proceedings of
any tribunal, board or officer exercising judicial
or quasi-judicial functions, and granting such
incidental reliefs as law and justice may
require:
1. When such tribunal, board or officer
has acted:
a. Without or in excess its or his
jurisdiction, or
b. With grave abuse of discretion
amounting to lack or excess of
jurisdiction; AND
2. When there is no appeal, or any plain,
speedy, and adequate remedy in the
ordinary course of law.
The petition shall be accompanied by:
1. A certified true copy of the judgment,
order or resolution subject thereof;
2. Copies of all pleadings and documents
relevant and pertinent thereto; and
3. A sworn certification of non-forum
shopping as provided in the third
paragraph of Sec. 3, Rule 46.
Petition for Prohibition
A person may file a verified petition in the
proper court, alleging the facts with certainty
and praying that judgment be rendered
commanding the any tribunal, corporation,
board, officer or person, whether exercising
judicial, quasi-judicial or ministerial functions to
desist from further proceedings in the action
or matter specified therein, or otherwise
granting such incidental reliefs as law and
justice may require:
1. When the proceedings of such tribunal,
corporation, board, officer or person
are:
a. Without or in excess of its or his
jurisdiction; or
b. With grave abuse of discretion
amounting to lack or excess of
jurisdiction, AND
2. When there is no appeal or any other
plain, speedy, and adequate remedy in
the ordinary course of law.
LABOR 2
The petition shall be accompanied by:
1. A certified true copy of the judgment,
order or resolution subject thereof;
2. Copies of all pleadings and documents
relevant and pertinent thereto; and
3. A sworn certification of non-forum
shopping as provided in the third
paragraph of Sec. 3, Rule 46.
Petition for Mandamus
A person may file a verified petition in the
proper court, alleging the facts with certainty
and praying that judgment be rendered
commanding any tribunal, corporation, board,
officer or person, immediately or at some other
time to be specified by the court, to do the act
required to be done to protect the rights of the
petitioner, and to pay the damages sustained
by the petitioner by reason of the wrongful acts
of the respondent:
1. When any tribunal, corporation, board,
officer or person:
a. Unlawfully neglects the
performance of an act which the
law specifically enjoins as a duty
resulting from an office, trust, or
station; or
b. Unlawfully excludes another from
the use and enjoyment of a right or
office to which such other is
entitled; AND
2. When there is no other plain, speedy
and adequate remedy in the ordinary
course of law.
Supreme Court
All references in the amended Sec. 9 of B.P.
No. 129 to supposed appeals from the NLRC
to the Supreme Court are interpreted and
hereby declared to mean and refer to petitions
for certiorari under Rule 65.
Consequently, all such petitions should hence
forth be initially filed in the Court of Appeals, in
strict observance of the doctrine on the
hierarchy of courts, as the appropriate forum
for the relief desired [St. Martin Funeral Home
v. NLRC, G.R. No. 130866 (1998)].
Rule 45, Rules of Court
Filing of Petition with Supreme Court
A party desiring to appeal by certiorari from a
judgment or final order or resolution of the
Court of Appeals, the Sandiganbayan, the
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Regional Trial Court or other courts whenever
authorized by law, may file with the Supreme
Court a verified petition for review on certiorari.
The petition shall raise only questions of law
which must be distinctly set forth [Sec. 1].
Since the Court of Appeals had jurisdiction
over the petition under Rule 65, any alleged
errors committed by it in the exercise of its
jurisdiction would be errors of judgment which
are reviewable by timely appeal, 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 [Tirazona v. Phil EDS Techno-Service
Inc, G.R. No. 169712 (2009)].
Note: Review of decisions of the NLRC shall be
done through (in order):
1. Motion for reconsideration
2. Rule 65 to the CA
3. Rule 45 to the SC
E. Bureau of Labor Relations
1. Jurisdiction
Original Jurisdiction
a. Inter-union and intra-union disputes
and other related labor relations
disputes.
b. All disputes, grievances or problems
arising from or affecting labor-
management relations in all
workplaces whether agricultural or
non-agricultural, except those arising
from the implementation or
interpretation of collective bargaining
agreements which shall be the subject
of grievance procedure and/or
voluntary arbitration [Art. 232].
Note: If the complaint involves an independent
union, chartered local or worker’s association,
file with the DOLE Regional Office but if the
complaint involves a federation or an
industry/national union, file with the BLR.
Inter-Union Dispute: one which occurred
between or among legitimate labor unions
LABOR 2
involving representation questions for
purposes of collective bargaining or to any
other conflict or dispute between legitimate
labor unions [IRR Book V, IRR Rule 1, Sec. 1
(x)].
Intra-Union Dispute: conflict within and inside
a union between and among union members
including grievances from any violation of
rights and conditions of membership or
provisions from the union’s constitution and by-
laws and chartering of unions [D.O. No. 40-03,
Rule I, Sec. 1 (bb)].
Inter/Intra – Union Disputes shall include:
[DO No. 040-I-15, Book V, Rule XI]
1. Cancellation of registration of a labor
organization filed by its members or by
another labor organization [Sec. 1a]
2. Conduct of election of union and workers'
association officers/nullification of election
of union and workers' association officers
[Sec. 1(b)]
3. Audit/accounts examination of union or
workers' association funds [Sec. 1(c)]
4. Deregistration of collective bargaining
agreements [Sec. 1(d)]
5. Validity/invalidity
a. Of union affiliation or disaffiliation [Sec.
1(e)]
b. Of acceptance/non-acceptance for
union membership [Sec. 1(f)]
c. Of impeachment/expulsion of union
and workers' association officers and
members [Sec. 1(g)]
d. the SEBA certification [Sec. 1(h)]
e. Or disagreements over any provision in
a union or workers' association
constitution and by-laws [Sec. 1(j)]
6. Opposition to application for union and
CBA registration [Sec. 1(i)]
7. Disagreements over chartering or
registration of labor organizations and
collective bargaining agreements [Sec.
1(k)]
8. Violations of –
a. The rights and conditions of union or
workers' association membership [Sec.
1(l)]
b. The rights of legitimate labor
organizations, except interpretation of
collective bargaining agreements [Sec.
1(m)]; and
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9. Such other disputes or conflicts involving
the rights to self-organization, union
membership and collective bargaining
a. Between and among legitimate labor
organizations; or
b. Between and among members of a
union or workers' association [Sec.
1(n)].
Appellate Jurisdiction
The BLR Director exercises exclusive
appellate jurisdiction over:
1. All decisions of the Med-Arbiter in:
a. Inter/Intra-union disputes (Note:
Complaints involving Federations,
National Unions, etc. pursuant to Rule
XI Sec. 4, formerly Sec. 5, as amended
by D.O. 40-F-03).
b. Other related labor relations disputes.
2. All decisions from the DOLE Regional
Director in the cases falling under their
original jurisdiction as enumerated [Sec.
14, Rule XI, Book V, IRR].
Decisions of the BLR through its appellate
jurisdiction are final and executory 10 days
after receipts by the parties [Sec. 20, Rule XI,
Book V, IRR].
2. Function
The Bureau of Labor Relations and the Labor
Relations Divisions in the regional offices of the
Department of Labor and Employment shall
have original and exclusive authority:
a. To act –
1. At their own initiative, or
2. Upon request of either or both
parties,
b. On all inter-union and intra-union
conflicts, and
c. All disputes, grievances or problems
arising from or affecting labor-management
relations in all workplaces –
1. Whether agricultural or non-
agricultural
2. Except those arising from the
implementation or interpretation of
collective bargaining agreements
which shall be the subject of grievance
procedure and/or voluntary arbitration
[Art. 232].
LABOR 2
The Bureau shall have fifteen (15) calendar
days to act on labor cases before it, subject to
extension by agreement of the parties.
F. National Conciliation and
Mediation Board
1. Jurisdiction
All issues arising from labor and employment
shall be subject to mandatory conciliation-
mediation.
Exception: As provided in Title VII-A, Book V
of this Code, as amended, or as may be
excepted by the Secretary of Labor and
Employment.
The Labor Arbiter or the appropriate DOLE
agency or office that has jurisdiction over the
dispute shall entertain only endorsed or
referred cases by the duly authorized officer.
Any or both parties involved in the dispute may
pre-terminate the conciliation-mediation
proceedings and request referral or
endorsement to the appropriate DOLE agency
or office which has jurisdiction over the dispute,
or if both parties so agree, refer the unresolved
issues to voluntary arbitration [Art. 228].
The NCMB is an agency attached to the DOLE
principally in charge of the settlement of labor
disputes through conciliation, mediation and of
the promotion of voluntary approaches to labor
dispute prevention and settlement [NCMB
Manual of Procedures for Conciliation and
Preventive Mediation Cases, Rule III, sec. 1].
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2. Conciliation as Distinguished from
Mediation
Conciliation Mediation
Both refer to a process where a third person
called a Conciliator/Mediator intervenes in a
dispute to reconcile differences or persuade
them to adjust or settle their dispute
C-M facilitates C-M assists parties
disputants to keep to voluntarily reach
things calm, delivers mutually
messages back and acceptable
forth between the settlement.
parties.
[Conciliation-Mediation, DOLE – NCMB
Website, available at:
http://ncrwp.ncmb.ph/?page_id=99]
Conciliator-Mediator [C-M] — Official of the
NCMB whose principal function is to settle and
dispose potential and actual labor disputes
through conciliation and preventive mediation
including the promotion and encouragement of
voluntary approaches to labor disputes
prevention and settlement [Sec. 1, Rule III,
NCMB Manual of Procedure for Conciliation
and Preventive Mediation Cases].
Pre-Termination of Conciliation-Mediation:
Any or both parties in the dispute may pre-
terminate the proceedings and request referral
or endorsement to the appropriate DOLE
agency or office with jurisdiction or to the
voluntary arbiter if both parties agreed.
Privileged Communication not Available as
Evidence: Any statement made in conciliation
proceedings shall be treated as privileged
communication, and shall not be used as
evidence in the NLRC. Conciliators may not
testify in any court or body regarding any
matter during the conciliation proceedings
[D.O. No. 40-03, Rule XXII, Sec. 2].
3. Preventive Mediation
Note: Refer also to Sec. 3 (Action on Non-
Strikeable Issues) & Sec. 4 (Notice Converted
to Preventive Mediation) of Rule V of the
NCMB Manual of Procedure for Conciliation
and Preventive Mediation Cases involving non-
strikeable issues.
LABOR 2
Definition [Sec. 1(20), Rule III, NCMB Manual
of Procedure for Conciliation and Preventive
Mediation Cases].
Preventive Mediation Cases - refer to the
potential labor disputes which are the subject
of a formal or informal request for conciliation
and mediation assistance –
a. Sought by either or both parties, or
b. Upon the initiative of the NCMB to
avoid the occurrence of actual labor
disputes.
Purpose of Preventive Mediation — to
remedy, contain or prevent potential labor
disputes’ degeneration into a full-blown
dispute through amicable settlement. It can be
initiated by:
a. Filing a notice or request of preventive
mediation; or
b. Conversion of the notice of
strike/lockout into at preventive
mediation case.
Note: If the subject of the strike is non-
strikeable, the NCMB can motu proprio convert
the notice into preventive mediation or refer the
issues to voluntary arbitration.
G. POEA
1. Jurisdiction
Original and exclusive jurisdiction
POEA shall exercise original and exclusive
jurisdiction to hear and decide all pre-
employment cases which are administrative in
character, involving or arising out of violation of
recruitment laws, rules and regulations
including money claims arising therefrom or
violation of the conditions for issuance of
license to recruit workers [Sec. 1, Rule I, Book
VI, POEA Rules].
Petition for Review
POEA shall have exclusive jurisdiction to
review recruitment violation cases and other
related cases decided by the Administration
motu proprio or upon petition of parties in
interest [Sec. 1, Rule IV, Book VI, POEA
Rules].
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Petitions for review shall be filed within ten (10)
calendar days from receipt of the Order by the
parties.
All Motions for Reconsideration shall be treated
as a petition for review.
H. DOLE Regional Directors
1. Jurisdiction
The DOLE Regional Directors shall have
original and exclusive jurisdiction over:
a. Labor standards enforcement cases
under Art. 128;
Note: as the duly authorized
representative of the SOLE
b. Small money claims from labor
standards violations not exceeding
P5,000 and not accompanied with a
claim for reinstatement under Art. 129;
c. Operational safety and health
conditions (can order stoppage or
suspension of operations) [Art. 128;
Bk. IV, Rule II, Sec. 8];
d. Registration of unions and
cancellations thereof, cases filed
against unions and other labor
relations related cases [Sec. 4, Rule XI
(renumbered, D.O. 40-F-03];
Note: only if against an independent
labor union, chartered local or workers’
association;
e. Complaints against private recruitment
and placement agencies (PRPAs) for
local employment [Secs. 45/46, D.O.
141-14]; and
f. Cases submitted to voluntary
arbitration in their capacity as Ex
Officio Voluntary Arbiters under D.O
83-07 (2007).
Note: The DOLE Regional Director, as the duly
authorized representative of the SOLE, also
has visitorial and enforcement power under:
1. Art. 37, Art. 128 (have access to
employer’s records and premises with
right to copy or investigate to determine
violations of law); and
2. Art. 289 (where it can inquire into the
financial activities of any legitimate
labor organization and examine their
books and records to determine
compliance with the law if requested by
at least 20% of total membership).
LABOR 2
Appeal: Appeal of decisions from visitorial and
enforcement power to the SOLE within 10
calendar days from receipt thereof [Rule IV,
sec. 1, Rules on Disposition of Labor Standard
Cases in the Regional Offices].
2. Recovery and Adjudicatory Power
Art. 129. Recovery of Wages, Simple
Money Claims and Other Benefits.
Who: The Regional Director of the Department
of Labor and Employment or any of the duly
authorized hearing officers of the Department
[par. 1].
What: They are empowered to hear and
decide any matter involving the recovery of
wages and other monetary claims and benefits
• including legal interest, owing to an
employee or person employed in
domestic or household service or
househelper under this Code, arising
from employer-employee relations
How: Through summary proceeding and after
due notice
When: Upon complaint of any interested party
Conditions:
a. Provided that such complaint does not
include a claim for reinstatement;
b. Provided, further, That the aggregate
money claims of each employee or
househelper do not exceed five
thousand pesos (P5,000).
Period to decide: The Regional Director or
hearing officer shall decide or resolve the
complaint within thirty (30) calendar days from
the date of the filing of the same [Art. 129, par.
2].
Effects of Decision to the Recovered Sum
on Behalf of Any Employee or
Househelper
General Rule: Shall be held in a special
deposit account by, and shall be paid, on order
of the Secretary of Labor and Employment or
the Regional Director directly to the employee
or househelper concerned [Art. 129, par. 3].
Exception: Shall be held as a special fund of
the Department of Labor and Employment to
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LABOR LAW
be used exclusively for the amelioration and
benefit of workers.
When any such sum not paid to the employee
or househelper because he cannot be located
after diligent and reasonable effort to locate
him within a period of three (3) years [Art. 129,
par. 4].
Appeal of Decision or Resolution [Art. 129,
par. 5]:
Any decision or resolution of the Regional
Director or hearing officer pursuant to this
provision may be appealed on the same
grounds provided in Article 223 of this Code.
Period: Within five (5) calendar days from
receipt of a copy of said decision or resolution.
To whom: To the National Labor Relations
Commission which shall resolve the appeal
within ten (10) calendar days from the
submission of the last pleading required or
allowed under its rules.
The Secretary of Labor and Employment or his
duly authorized representative may supervise
the payment of unpaid wages and other
monetary claims and benefits, including legal
interest, found owing to any employee or
househelper under this Code [Art. 129, par. 6].
Small Money Claims
See also discussion in VI.F. on Money Claims
arising from Employer-Employee Relationship
Period of Appeal to NLRC: Decisions of the
Regional director on recovery of wages, simple
money claims and other benefits, shall be final
and executory unless appealed within 5 days
from receipt thereof [Art. 129].
Definition: Recovery/adjudicatory power is the
power of the Regional Director or any duly
authorized hearing officer of DOLE to
adjudicate on recovery of wages of
employees/househelpers employed in a
domestic household for claims not exceeding
P5,000 and without seeking reinstatement [Art.
129].
If any of the requisites are missing, the Labor
Arbiter shall have jurisdiction over claims
arising from ER-EE relations except claims for
LABOR 2 LABOR LAW
employees’ compensation, SSS, PhilHealth Power of the Secretary of Labor to
and maternity benefits [Art. 224]. Assume Jurisdiction (alternative)
a. Decide the labor dispute
Money claims should be filed within 3 years himself/herself.
from the time the cause of action accrued [Art. b. Certify the labor dispute to the NLRC
306]. for compulsory arbitration.

I. DOLE Secretary Scope: The authority of the Secretary to

assume jurisdiction over a labor dispute
includes and extends to all questions and
1. Jurisdiction
controversies arising from such labor dispute.
The power is plenary and discretionary in
When May the SOLE Assume Jurisdiction
nature to enable him to effectively and
Art. 278 (g). Strikes, Picketing and
efficiently dispose of the dispute [Philcom
Lockouts. – The SOLE may:
Employees Union v. Philippine Global
a. Assume jurisdiction over the dispute
Communications, 495 SCRA 214 (2006)].
and decide it; or
b. Certify the same to the Commission for
Appellate Jurisdiction
compulsory arbitration
1. Orders issued by the duly authorized
representative of the SOLE under Art.
When in his opinion there exists a labor dispute
128 may be appealed to the latter.
causing, or likely to cause, a strike or lockout in
2. Denial of application for union
an industry indispensable to the national
registration or cancellation of union
interest.
registration originally rendered by the
BLR may be appealed to the SOLE (if
Requisites for Assumption of Jurisdiction
originally rendered by the Regional
1. Both parties have requested the SOLE
Office, appeal should be made to the
to assume jurisdiction; or
BLR)
2. After a conference called by the Office
3. POEA — The Office of the SOLE shall
of the SOLE on the propriety of its
have exclusive jurisdiction to act on
issuance, motu proprio or upon a
appeals from the Orders of the
request or petition by either party to the
Administration [Sec. 185, Rule VII,
labor dispute [Book V, IRR Rule XXII,
Revised POEA Rules and Regulations
sec. 15, IRR as amended by D.O. No.
Governing The Recruitment and
40-H-13 s 2013].
Employment of Landbased Overseas
Filipino Workers of 2016]
Industries Indispensable to the National
4. Decisions of the Med-Arbiter in
Interest
certification election cases are
a. Hospital sector
appealable to the SOLE [Art. 272]
b. Electric power industry
(decisions of med-arbiters in intra-
c. Water supply service, to exclude small
union disputes are appealable to the
water supply services such as bottling
BLR [Sec. 15, Rule XI, Book V, IRR])
and refilling stations
d. Air traffic control
Voluntary Arbitration Powers
e. Other industries as may be
Art. 278 (h). Strikes, Picketing and
recommended by the National
Lockouts. – The parties may opt to submit
Tripartite Industrial Peace Council
their dispute to voluntary arbitration.
(TIPC) [Sec. 16, Rule XXII, Book V,
IRR as amended by D.O. No. 40-H-13]
When: Before or at any stage of the
compulsory arbitration process.
Who Determines Industries Indispensable
to the National Interest [Art. 278(g)]
Sec. 15, Rule XXII, Book V. Assumption by
a. Secretary of Labor and Employment
the Secretary of Labor and Employment. –
b. President
… parties to the case may agree at any time to
submit the dispute to the SOLE or his/her duly
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LABOR 2 LABOR LAW
authorized representative as Voluntary a. they voluntarily submit their
Arbitrator… potential or ongoing dispute to intervention
by the Office of the Secretary of Labor and
Employment;
DOLE Circular No. 1 Series of 2006. –…this
b. there is no pending notice of strike
administrative procedure for the voluntary
or lockout or any related complaint in
settlement of labor disputes is hereby established:
relation with their potential or ongoing
1. Either or both the employer and the
dispute;
certified collective bargaining agent (or
c. they shall refrain from any strike
representative of the employees where there is
or lockout or any form of work stoppage or
no certified bargaining agent) may voluntarily
from filing any related complaint while the
bring to the Office of the SOLE through a
SOLE’s intervention is in effect; and
REQUEST FOR INTERVENTION, any
d. they shall abide by the agreement
potential or ongoing dispute defined below.
reached, whose terms may be enforced
through the appropriate writs issued by the
A potential or ongoing dispute refers to:
SOLE
a. live and active dispute;
b. that may lead to a strike or lockout
All agreements settling the dispute shall be in
or to massive labor unrest;
writing and signed by the parties as well as the
c. is not the subject of any complaint
official who mediated the dispute.
or notice of strike or lockout at the time a
request for intervention is made.
5. The parties and officials or employees of
the DOLE who took part in the proceedings
This recourse is separate from the established
shall not testify in any court or body regarding
dispute resolution modes of mediation,
the disclosures, submissions or positions made
conciliation and arbitration under the Labor
by the parties in these proceedings.
Code, and is an alternative to other voluntary
a. If the intervention fails, either or
modes of dispute resolution such as the
both parties may avail themselves of the
voluntary submission of a dispute to the
remedies provided under the Labor Code.
Regional Director for mediation, to the NCMB
Alternatively, the parties may submit their
for preventive mediation, or to the intervention
dispute to the Office of the Secretary for
of a regional or local tripartite peace council for
voluntary arbitration. Such voluntary
the same purpose.
arbitration shall be limited to the issues
defined in the parties’ submission to
2. all requests shall be in writing and filed with
voluntary arbitration agreement and shall
the office of the secretary. a request shall state:
be decided on the basis of the parties’
a. the name and address of the
position papers and submitted evidence.
employer;
The Office of the Secretary shall resolve
b. the name of the certified
the dispute within sixty (60) days from the
bargaining agent, or the employee
parties’ submission of the dispute for
representative duly designated in writing by
resolution.
a majority of the employees where there is
b. This circular shall take effect
no collective bargaining agent;
fifteen (15) days after publication in a
c. the number of employees affected
newspaper of general publication. Done in
by the potential or ongoing dispute; and d.
the City of Manila, Philippines, 11 August
a brief description of the potential or
2006.
ongoing dispute.

3. Upon receipt of the REQUEST, the Office of

the Secretary shall forthwith notify the parties
and invite them for conference. The
conference for REQUESTS coming from the
National Capital Region, Regions III, IV-A or
IV- B shall be held at the Office of the Secretary
of Labor and Employment unless the Secretary
otherwise directs. The conference for
REQUESTS coming from the other regions
shall be conducted by the Regional Director for
the Secretary.
4. The Office of the Secretary or the Regional
director, in the proper case, shall proceed to
intervene after the parties shall have
manifested that;
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2. Visitorial and Enforcement Powers
Art. 128. Visitorial and Enforcement
Power
The Secretary of Labor and Employment or his
duly authorized representatives, including
labor regulation officers, shall:
1. Have access to employer’s records
and premises at any time of the day or
night whenever work is being
undertaken therein
a. And the right:
i. To copy therefrom,
LABOR 2
ii. To question any
employee and
iii. To investigate any fact,
condition or matter
which may be
necessary to determine
violations or which may
aid in the enforcement
of this Code and of any
labor law, wage order
or rules and regulations
issued pursuant
thereto.
2. Have the power to issue compliance
orders
a. Purpose: to give effect to the
labor standards provisions of
this Code and other labor
legislation based on the
findings of labor employment
and enforcement officers or
industrial safety engineers
made in the course of
inspection.
b. Notwithstanding the provisions
of Arts. 129 and [224] of this
Code to the contrary, and in
cases where the relationship of
employer-employee still exists
3. Issue writs of execution to the
appropriate authority for the
enforcement of their orders
a. Exception: cases where the
employer contests the findings
of the labor employment and
enforcement officer and raises
issues supported by
documentary proofs which
were not considered in the
course of inspection.
Art. 37. Visitorial Power. – The Secretary of
Labor or his duly authorized representatives
may, at any time –
1. Inspect the premises, books of
accounts and records of any person or
entity covered by this Title
2. Require it to submit reports regularly on
prescribed forms, and
3. Act on violation of any provisions of this
Title.
Art. 289. Visitorial Power. –The Secretary of
Labor and Employment or his duly authorized
representative is hereby empowered:
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1. To inquire into the financial activities of
legitimate labor organizations
a. Upon the filing of a complaint
under oath and duly supported
by the written consent of at
least twenty percent (20%) of
the total membership of the
labor organization concerned
2. To examine their books of accounts
and other records to determine
compliance or non-compliance with the
law
3. To prosecute any violations of the law
and the union constitution and by-laws
Provided, That such inquiry or examination
shall not be conducted during the sixty (60)-day
freedom period nor within the thirty (30) days
immediately preceding the date of election of
union officials.
The visitorial and enforcement powers of the
DOLE Regional Director to order and enforce
compliance with labor standard laws can be
exercised even where the individual claim
exceeds P5,000.00 [Cirineo Bowling Plaza,
Inc. v. Sensing, G.R. No. 146572 (2005)].
If a complaint is brought before the DOLE to
give effect to the labor standards provisions of
the Labor Code or other labor legislation, and
there is a finding by the DOLE that there is an
existing employer-employee relationship, the
DOLE exercises jurisdiction to the exclusion of
the NLRC.
The findings of the DOLE, however, may still
be questioned through a petition for certiorari
under Rule 65 of the Rules of Court.
The DOLE's labor inspection program can now
proceed without being sidetracked by
unscrupulous employers who could render
nugatory the "expanded visitorial and
enforcement power of the DOLE granted by RA
7730 . . . by the simple expedient of disputing
the employer-employee relationship [and] force
the referral of the matter to the NLRC”
[People's Broadcasting Service v. Secretary of
the Department of Labor and Employment,
G.R. No. 179652 (2012 Resolution)].
The factual findings of the SOLE or the
Regional Directors made in the exercise of
their visitorial and enforcement powers are
LABOR 2
binding on Labor Arbiters and the NLRC under
the doctrine of res judicata [Norkis Trading v.
Buenavista, G.R. No. 182018 (2012)].
Art. 292 (b). Visitorial and Enforcement
Power - The SOLE may suspend the effects of
a termination pending resolution of the dispute
in the event of a prima facie finding by the
appropriate official of the DOLE that:
a. The termination may cause a serious
labor dispute (may or may not be a
strike or a lockout)
b. The termination is in implementation of
a mass lay-off
3. Remedies
The aggrieved party from a decision of the
SOLE may file one motion for reconsideration
within ten (10) days from receipt thereof.
If the motion for reconsideration is denied, the
party may appeal via Rule 65 to the CA 60 days
from receipt of the denial. Upon denial, the
party may proceed via Rule 45 to the SC [Rule
65, ROC; St. Martin Funeral Home v. NLRC,
G.R. No. 130866 (1998)].
Clearly, before a petition for certiorari under
Rule 65 of the Rules of Court may be availed
of, the filing of a motion for reconsideration is a
condition sine qua non to afford an opportunity
for the correction of the error or mistake
complained of [PIDLTRANCO Service
Enterprises Inc v. PWU – AGLO, G.R. No.
180962 (2014)].
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J. Grievance Machinery
1. Definition
Grievance machinery is a machinery for the
expeditious resolution of grievances arising
from the interpretation or implementation of the
collective bargaining agreement and those
arising from the interpretation or enforcement
of company personnel policies [Sec. 1, Rule
XIX, Book V, IRR].
2. Establishment
a. A grievance machinery may be
established in the CBA; or
b. In the absence of applicable provision
in the collective bargaining agreement,
a grievance committee shall be created
within ten (10) days from signing of the
collective bargaining agreement. The
committee shall be composed of at
least two (2) representatives each from
the members of the bargaining unit and
the employer, unless otherwise agreed
upon by the parties. The
representatives from among the
members of the bargaining unit shall be
designated by the union [Sec. 1, Rule
XIX, Book V, IRR].
3. Remedies
Unresolved grievances will be referred to
voluntary arbitration.
● For this purpose, parties to a collective
bargaining agreement shall name and
designate in advance a voluntary
arbitrator or panel of voluntary
arbitrators, or include in the agreement
a procedure for the selection of such
voluntary arbitrator or panel of
voluntary arbitrators, preferably from
the listing of qualified voluntary
arbitrators duly accredited by the Board
[Sec. 1, Rule XIX, Book V, IRR].
LABOR 2
K. Voluntary arbitrator
1. Jurisdiction
Exclusive and Original Jurisdiction Over
Unresolved Grievances
a. Interpretation or implementation of the
CBA [Art. 274]
b. Interpretation or enforcement of
company personnel policies [Art. 274]
c. Violations of a CBA which are not gross
in character (gross being flagrant and/or
malicious refusal to comply with the
economic provisions of [the CBA]) [Art.
274].
Note: Gross violations of the CBA shall mean
flagrant and/or malicious refusal to comply with
the economic provisions of such agreement.
Termination Cases: Plenary Jurisdiction
of Voluntary Arbitrator vis-à-vis Labor
Arbiter
Termination cases arising in or resulting from
the interpretation and implementation of CBAs
and interpretation and enforcement of
company personnel policies which were initially
processed at the various steps of the plant-
level Grievance Procedures under the parties'
CBAs fall within the original and exclusive
jurisdiction of the VA.
If such is filed before the LA, these cases shall
be dismissed by the LA for lack of jurisdiction
and referred to the concerned NCMB Regional
Branch for appropriate action towards an
expeditious selection by the parties of a VA or
Panel of Arbitrators based on the procedures
agreed upon in the CBA [Policy Instruction #56
(April 6, 1993)].
Even if the specific issue brought before the
arbitrators merely mentioned the question of
“whether an employee was discharged for just
cause,” they could reasonably assume that
their powers extended beyond the
determination thereof to include the power to
reinstate the employee or to grant back wages.
In the same vein, if the specific issue brought
before the arbitrators referred to the date of
regularization of the employee, law and
jurisprudence gave them enough leeway as
well as adequate prerogative to determine the
entitlement of the employees to higher benefits
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in accordance with the finding of regularization
[Manila Pavilion Hotel, etc. v. Henry Delada,
G.R. No. 189947 (2011)].
Other Labor Disputes
Article. 275. Jurisdiction Over Other Labor
Disputes. – The VA or panel of VAs, upon
agreement of the parties, shall also hear and decide
all other labor disputes including ULP and
bargaining deadlocks.
Article 274. Jurisdiction of Voluntary Arbitrators or
Panel of Voluntary Arbitrators. – The Commission,
its Regional Offices and the Regional Directors of
the DOLE:
1. Shall not entertain disputes, grievances or
matters under the exclusive and original
jurisdiction of the Voluntary Arbitrator or panel
of Voluntary Arbitrators and
2. Shall immediately dispose and refer the
same to the grievance machinery or Voluntary
Arbitration provided in the Collective Bargaining
Agreement.
Article 224 (c). Jurisdiction of the Labor Arbiters and
the Commission. – Cases arising from the
interpretation or implementation of CBAs and those
arising from the interpretation or enforcement of
company personnel policies shall be disposed of by
the LA by referring the same to the grievance
machinery and VA as may be provided for in said
agreements.
Option – Voluntary Arbitration
Article 278 (h). Strikes, Picketing and Lockouts. –
Before or at any stage of the compulsory arbitration
process, the parties may opt to submit their dispute
to voluntary arbitration.
Summary of Arbitrable Issues
a. Interpretation or implementation of the
CBA [Art. 274]
b. Interpretation or enforcement of
company personnel policies [Art. 274]
c. Violations of a CBA which are not gross
in character (gross being flagrant
and/or malicious refusal to comply with
the economic provisions of [the CBA])
[Art. 274]
d. All other labor disputes including ULP
and bargaining deadlock, if the parties
agree [Art. 275]
e. Wage distortions arising from
application of any wage orders in
organized establishments [Art. 124]
LABOR 2
f. Unresolved grievances arising from the
interpretation and implementation of
the productivity incentives program
under RA 6971 [Book V, IRR Rule XIX.
Sec. 4].
In general, the arbitrator [“VA”] is expected to
decide those questions expressly stated and
limited in the submission agreement.
However, since arbitration is the final resort for
the adjudication of disputes, the arbitrator can
assume that he has the power to make a final
settlement.
[The VA has] plenary jurisdiction and authority
to interpret the [CBA] and to determine the
scope of his [or her] own authority. [...] Subject
to judicial review, this leeway of authority [and]
adequate prerogative is aimed at
accomplishing the rationale of the law on
voluntary arbitration – speedy labor justice
[Goya, Inc. v. Goya, Inc. Employees Union-
FFW, G.R. No. 170054 (2013)].
2. Remedies
Motion for Reconsideration
The absence of a categorical language in Art
[276] does not preclude the filing of a motion
for reconsideration of the VA’s decision within
the 10-day period [Teng v. Pahagac, G.R.
169704 (2010)].
Appeal
The decision of a Voluntary Arbitrator or panel
of Voluntary Arbitrators is appealable by
ordinary appeal under Rule 43 of the Rules of
Civil Procedure directly to the Court of Appeals
[AMA Computer College-Santiago City, Inc. v.
Nacino, G.R. No. 162739 (2008)].
But See: Guagua National Colleges v. CA,
G.R. 188412, Aug. 28, 2018, the 10-day period
under Article 276 of the Labor Code refers to
the filing of a motion for reconsideration vis-à-
vis the Voluntary Arbitrator's decision or award,
while the 15 days is the period to file petition for
review under Rule 43 of the Rules of Court.
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LABOR LAW
L. Prescription of Actions
1. Money Claims
Article 306. Money Claims. – All money claims
arising from employer-employee relations accruing
during the effectivity of this Code shall be filed
within three (3) years from the time the cause of
action accrued; otherwise they shall be forever
barred.
All money claims accruing prior to the
effectivity of the Code
a. Shall be filed with the appropriate
entities established under this Code
within one (1) year from the date of
effectivity, and
b. Shall be processed or determined in
accordance with the implementing
rules and regulations of the Code;
c. Otherwise, they shall be forever
barred.
Workmen's compensation claims accruing
prior to the effectivity of this Code and during
the period from November 1, 1974 up to
December 31, 1974.
a. Shall be filed with the appropriate
regional offices of the Department of
Labor not later than March 31, 1975;
b. Otherwise, they shall forever be
barred.
c. The claims shall be processed and
adjudicated in accordance with the law
and rules at the time their causes of
action accrued.
The Labor Code has no specific provision on
when a monetary claim accrues. Thus, again
the general law on prescription applies. Art.
1150 of the Civil Code provides that, “The time
for prescription for all kinds of actions, when
there is no special provision which ordains
otherwise, shall be counted from the day they
may be brought.”
The day the action may be brought is the day a
claim started as a legal possibility [Anabe v.
Asian Construction, G.R. No. 183233 (2009)].
LABOR 2 LABOR LAW
2. Illegal Dismissal 4. Offenses under the Labor Code

Article 1146, Civil Code. – The following actions
must be instituted within four years:
a. Upon an injury to the rights of the plaintiff;
b. Upon a quasi-delict;
However, when the action arises from or out of any
act, activity, or conduct of any public officer involving
the exercise of powers or authority arising from
Martial Law including the arrest, detention and/or
trial of the plaintiff, the same must be brought
within one year [As amended by PD No. 1755, Dec.
24, 1980.]
Article 305, LC. – Offenses penalized under this
Code and the rules and regulations issued pursuant
thereto shall prescribe in three (3) years.
Article 305, Civil Code. – Offenses penalized
under this Code and the rules and regulations issued
pursuant thereto shall prescribe in three (3) years.
3 years, except ULP (see: above)

4 Years from Dismissal 5. Illegal Recruitment

In illegal dismissal cases, the employee
concerned is given a period of four years from
the time of his dismissal within which to institute
a complaint. This is based on Art. 1146 of the
Civil Code which states that actions based
upon an injury to the rights of the plaintiff must
be brought within four years [Victory Liner, Inc.
v. Race, G.R. No. 164820 (2007)].
3. Unfair Labor Practice
Illegal recruitment cases under this Act shall
prescribe in five (5) years.
Provided, however, that illegal recruitment
cases involving economic sabotage as defined
herein shall prescribe in twenty (20) years
[Migrant Workers and Overseas Filipinos Act of
1995, Sec. 12].

All unfair labor practice arising from Book V

a. Shall be filed with the appropriate
agency within one (1) year from
accrual of such unfair labor
practice;
b. Otherwise, they shall be forever
barred.

Art. 258. Concept of unfair labor practice

and procedure for prosecution thereof – 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:
a. The final judgment in the administrative
proceedings shall not be binding in the
criminal case nor be considered as
evidence of guilt
b. But merely as proof of compliance of
the requirements therein set forth.

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