Labor 1 Transcription
Part 1-B: Applicable Laws
Labor Code of the Philippines, PD 442
PD 442 as amended, which took effect on November 1, 1972
Labor, defined
technically refers to an exertion by a human being of his
physical and/or mental effort or both towards the production of
good and services.
refers to the working class
there must be a balance between labor and capital
4 systems of labor
1. slavery
2. serfdom
3. wage system
4. independent contractor/free artisan
The Labor Code contemplates wage system and free artisan
Employer-employee relationship governed by the LC
Specific provisions against slavery and serfdom; are they
criminal in nature?
3 fields of labor law
1. labor standards - minimum terms and conditions of
employment prescribed and fixed by law relating to wages,
hours of work, OSH and others; focus on the MINIMUM
standards
2. labor relations
3. welfare measures or social/welfare legislation
Basic Principles involving Labor Standards
Labor Standards would apply when the worker/employee is
actually at work​, as distinguished from labor relations and
social legislation
Example: Principle of no work no pay, fair day’s wage for a fair
day’s labor; not actually at work, the laborer is not earning
anything
In Labor Legislation, when the employee is not actually at
work, or the worker is not able to and does not work by reason
of sickness, disability, etc, intended to substitute income to the
worker who cannot work/earn.
Example: Social Security Act (SSS), social security will
substitute the income that the worker will not earn because the
worker is not at work; thereby if the worker is still at work, he is
not entitled to SSS
In Labor Relations, refer to methods and processes by which
the minimum is improved through a CBA, arbitration either
voluntary or compulsory. The parties are able to fix over and
above the minimum standards.
Also consider the rules and regulations implementing (IRR)
labor standards law, they are enacted pursuant to the
law/rule-making power of the DOLE Secretary and being
pieces of delegated social legislation, they have the force and
effect of laws despite not being directly from the Legislature
(they are not considered laws) as long as they are issued
within the scope and authority of labor standards law. Social
legislation is not self-executory.
Supreme Court decisions interpreting laws shall form part of
labor laws (judicial decisions).
Bases in the enactment of Labor Laws
1. Police Power - Labor Code is an exercise of PP,
interference in life, liberty and property, where work is a
property right (ex prevention of child labor)
2. Social Justice clause - those who have less in life should
have more in law (ex retirement pay)
3. Protection to labor clause - constitutional and labor law
provisions
4. Doctrine of incorporation clause - ILO conventions,
counterpart provision in Phil Laws, Magna Carta for Women,
ratified by the Phil
Limitations
1. Due Process Clause - no person shall be deprived of life,
liberty and property without due process of law
2. Equal Protection Clause - equality among equals, ex hiring
only of male workers, by reason of sex,
3. Non-impairment Clause - parties to an CBA, Congress
cannot change the terms and conditions voluntarily and freely
agreed upon by the parties to a contract
Sources of Labor Laws
1. Primary - Constitution, IRR, Statutes, SC Decisions
2. Secondary/Auxiliary - opinions of legal luminaries, decisions
of foreign tribunals
Part 1-C: Effectivity of Labor Laws Rules and Regulations
Secretary of Labor - qualified political agency to promulgate
labor laws and their IRR
Tanada v Tuvera - requirement of publication as an
indispensable requirement for the effectivity of laws
IRR - 15 days after announcement of adoption in newspapers
of general circulation; part and parcel of due process
effect of non-publication - validity and effectivity are different
Interpretation of labor laws - to be resolved in favor of labor,
ONLY IN CASE OF DOUBT
Rationale: labor and capital are not on equal footing; system is
lopsided in favor of capital; state shall protect labor to balance
inequality where there must be shared responsibility in the
production of goods
Relationship between capital and labor, not merely contractual
but one impressed in public interest which must yield to the
common good; the state is a party so is the public, there are 4
parties instead in the employment contract and that that these
parties must adhere to the principle of non-oppression as
provided by the Civil Code
Tripartism in policy
1. Government
2. Labor
3. Employer Sector
National Tripartite Industrial Peace Council - check the
composition of the parties and functions of this organization
National Labor Relations Commission - composition also has 3
parties: government, labor and employer
Part 2 - Basic Principles in Labor Standards
Rights of Workers (Constitutional)
1. just and humane working conditions
2. security of tenure
3. self-organization
4. living wage
5. policy and decision-making
6. collective bargaining
7. peaceful or lawful concerted activities
Identify which rights relate to Labor Standards
Aspects of Labor Standards:
1. Protective - e.g., regulation of working hours, improvement
of working conditions
2. Meliorative - e.g expansion of flow of income to the family of
the worker; overtime pay, premium pay
Purpose/Object of Labor Standards
- intended to provide remedial and humanitarian support to the
worker and his family
- minimal conditions of living which are necessary to the health,
efficiency and wellbeing of the worker and his family
- overall impact is to improve the lot or conditions of the
workers and their family
- found in the labor code purposely to improve the lot of the
workers and their families
- social, political and economic consequences afforded to the
workers through labor standards
Sources of Labor Standards
1. The Labor Code
2. Administrative Orders issued by the DOLE - either protective
or meliorative standards; department orders prescribed by the
Secretary of Labor
3. Employment Contracts - non-impairment clause
4. Company Policy - statements or declarations fixing
employee standards on benefits found in the company
manual/policy even with mere implied acceptance by the
employee
5. Company Practice - non-verbal patterns of conduct by the
employer, repeated behavior over a long period of time,
customarily provided by the employer even when not
documented
Perfection of an Employment Contract
1. offer of employment and acceptance
2. meeting of minds
3. essential elements of a contract
Consensual in nature, no need for a written contract for its
perfection; may be done verbally or otherwise
Contract of adhesion - employment contract comes from the
employer where the employee simply needs to accept the
contract; labor code provision must be resolved in favor of
labor in case of doubt
Does it give rise to an employee-employer relationship? No.
Perfection is not the same as commencement of
employer-employee relationship but may be its consequence;
perfection precedes commencement of ER-EE relationship
Employer-employee Relationship must comply with the 4-fold
test
1. power of control - means and manner of one’s job
and/results
2. selection and engagement - employer prerogative
3. power of discipline or dismissal - substantive and procedural
4. payment of wages/compensation - salary v wage
2-tiered test - economic reality test facts of the relation test
4-fold test and 2-tiered test - not provided in law but expressed
in various SC decisions
Scenarios:
1. insurance agents
2. brokers
3. basketball coach
4. doctors in a training agreement with DOH
GR - Labor Standards cannot rule/apply without first
establishing an employer-employee relationship
Characteristics of Employment as distinguished with
independent contractor
Scenarios: Independent professional, existence of EE-ER
relationship
1. dentist in a clinic in Ayala
2. lawyer in a law firm in Ayala
DOLE Department Advisory No. 4 on talents - working
conditions in the movie industry
Civil Law
1. Independent Contract
2. Partnership
3. Agency
Part 3 - Right to Hire
Establishing ER-EE Relationship (4-fold test)
1. Selection and Engagement Test - right to hire
- inherent in the management to exercise this management
prerogative
- Labor Code restrictions on the power to hire:
1. stipulation against marriage - employers cannot
require female employee not to get married
2. unfair labor practice - requiring as a condition of
employment where the worker is not allowed to join a union
3. child labor - no children shall be hired below 15
subject to qualifications; criminal liability on the employer;
hazardous conditions, DO 149, 2016, selling of alcoholic
drinks, gambling etc
4. anti-sexual harassment law
5. magna carta for disabled persons - qualified
disabled person; otherwise there can be lawful discrimination
6. RA 8504 - Phil Aids prevention and control act
7. RA 10354 - Responsible Parenthood, employer
prohibited from requiring employees to use contraception as a
condition for employment
8. RA 1091 - Anti-Age discrimination Act to deny an
employee’s application by reason of his age
9. RA 10173 - Data Privacy Act - collecting personal
information of the employee without his consent (age, marital
status, religious affiliations, sexual life etc)
10. RA 11210 - Expanded Maternity Leave Act
Part 4 - Wages and Wage Fixing
Establishing ER-EE Relationship (4-fold test)
2. Payment of Wages
Pursuant to department orders of Regional Tripartite Wages
and Productivity Board (RTWPB)
Employee is expected to produce results and thereby earns
the right to be compensated
Wages do not only include the cash component but also to the
facilities provided by the employer
Salary and Wage - differ only by semantics; can be used
interchangeably
Exception: Article 1708 CC, exempts the laborer’s
compensation/wages from execution or attachment except for
debt incurred for food, medical expense etc
Wages - manual labor
Salary - superior grade of services
Fair and Reasonable value of facilities - law allows the
employer to deduct the value of facilities to determine
compliance with existing laws regarding payment of wages
Supplements - extra remuneration and/or special privileges
over and above his minimum wages, not deductible
Purpose Test - if giving of these goods are intended primarily
for the benefit of the employees, they are considered as
facilities but being facilities, they are not necessarily deductible
unless qualified
DOLE DO 126-13 Revised Guidelines on Facility Evaluation -
employer can fix a value for facilities, evaluation conducted to
RTWPB, not the DOLE pursuant to the Wage Rationalization
Act
Facility Evaluation
1. File for evaluation
- by a manager,
- by the union
2. may be filed at any time
3. RTWPB gives an evaluation order
Deductibility of Facilities:
1. customarily furnished by the employers
2. deductibility must have been voluntarily accepted by the
employee
3. charged at fair and reasonable value
overvalue by the employer - employer takes on the burden
that’s why employers are directed to file for a facility evaluation
Part 4-A - Fixing of Wages
Employer is not at liberty to choose these methods, restricted
by laws, must not be contrary to diminution of compensation
Methods (not exclusive enumeration):
1. based on time - once agreed period of work is completed,
the compensation is due and demandable; ex bank teller, on
duty from 9am-4pm, considered as hours work regardless of
how many customers you attend to, compensation already
deemed earned, monthly paid or daily paid worker; monthly
rate - divisor is 365, daily rate - divisor is 313
2. piece-rate - may still be supervised and therefore included in
the entitlement of labor standards, ex tailors paid on a
piece-rate basis, pakyaw basis employer cannot raise an issue
that they are not employees but only spells out the manner of
payment
3. based on job/task - fixed amount based on task without
regard to the number of hours it took to complete the job;
worker paid by results, ex standard amount for every furniture
produced regardless of the time spent to produce it
4. based on commission - salesmen, parties agreeing to a
certain fraction of the sales
5. boundary - fixed amount is remitted to the operator and gets
the amount beyond thereof
6. partly fixed and partly performance-based - amount will have
to be mutually agreed, DO 118-12 applicable to drivers and
conductors, provincial bus operators case
DO 125-13 - Revised Guidelines on Time and Motion Study
- Applicable to all workers of micro and small medium business
for all non-time work, employer must not commit a mistake in
calculating for compensation
- a piece-rate is established by the RTWB through the DOLE
Basic Principles:
1. No Work, No Pay Principle - Fair Day’s Pay for Fair Day’s
Work
2. Equal Pay for Equal Work - international school case where
there are foreign teachers who were paid more than local
teachers
3. Minimum wage is fixed by the RTWPB pursuant to the Wage
Rationalization Act
National Policy on fixing wages - rationalize the fixing of the
minimum wage because it is inequitable to have the same
wage in all the regions due to the differences in
socio-economic factors per region, the Board is left to decide
how much the minimum wage per region
Primary mode of settling wages - collective bargaining
Initiative to increase minimum wage - publication, hearing and
issuance of the Board for a wage order
Factors to consider in wage fixing:
1. standard of living by the NEDA
2. reasonable ROI of the employer
Wage Distortion - can only be a cause of action from a wage
order
1. Regions cannot be compared with each other in terms of
minimum wages
2. Floor Wage Method
3. Salary Ceiling Method - the board will fix an amount
Liability of the Employer for non-compliance with a wage order
- civil and criminal liabilities, double indemnity
Exemption of Wage Orders:
1. distressed businesses
2. domestic workers
Part 5 - Wage Enforcement and Recovery
Primary framework to ensure compliance with the Labor Laws
Enforcement Tools in the recovery of wages:
1. visitatorial and enforcement power - Article 128 LC, DO 183
Revised Rules on the Administration Enforcement of Labor
Laws, RA 11058 Compliance on OSH
2. recovery of simple money claims (not beyond 5k) - Article
129 LC
Visitorial and Enforcement Power - to ensure compliance of
establishments
Bombo Radyo Case - exercise of visitorial power to determine
employer-employee relationship, can the regional director or
secretary of dole exercise visitorial power to determine EE-ER
relationship
Occupational Safety and Health Compliance
RA 11058 - OSH
Section 23 - employer may be made to pay the employees for
a work stoppage due to the error of the employer (imminent
danger), employer may be held liable; there is a presumption
of fault on the employer; if the stoppage is ordered by another
agency other than the DOLE, the no-work-no-pay rule will
apply
Close Now, Hear Later Process - within the power of DOLE to
close operation; Department Circular No 3, ex lewd
establishments
 2. deduction for union dues - recognized CBA, valid and
Absence of EE-ER, visitorial powers no longer applies; when binding between the EE and the ER; expressly provided by law
the relationship ceases, it becomes a controversy for the to encourage unionism
NLRC to resolve, not the DOLE 3. authorized by the Secretary of Labor
4. authorized by the employee himself in writing for loan
Article 128 is a good self-help mechanism without having to go payments to the employer or to a third party (DO 195), as long
through litigation through various modes of as the employer does not derive any pecuniary benefit
settlements/implementation
SHS Perforated Materials case - GR management prerogative
Exception Clause - not all instances can DOLE retain does not include withholding of wage except:
jurisdiction pursuant to Article 128; if the findings of the DOLE
is contested, the claim is moved to the NLRC 1. creditor-debtor arrangement where payment of debt is due
and demandable
Article 129 - simple money claims, 5k: 2. when employee consents
3. deductions allowed by law
1. claimant is an employee or a domestic worker
2. 5k below Articles 114-115 - Deposits for loss and damage
3. there exists an EE-ER relationship
4. claimant is no longer employed and does not claim to be GR employer cannot require employee to make a deposit to
reinstated answer for loss and damage to tools and materials except:

DOLE Secretary’s exercise of quasi-judicial power where his 1. engaged in a trade or industry where making a deposit is a
decisions are subject to review recognized practice
2. considered necessary or desirable by the Secretary of
3 Modes of Implementation under Article 128 DOLE

1. Routine Inspection Nina Manufacturing Jewelry case - deposit must be authorized

2. Complaint Inspection by law, must be proved to be a recognized practice in the
3. Occupational Safety and Health Standard Investigation jewelry industry or authorized by the Secretary of DOLE;
employee was required to make a deposit, SC ruled that it was
Authorized representative for Employee a valid deposit because it is not a recognized practice in the
industry nor authorized by the Sec of DOLE
a. Organized Establishment - representative from the Union,
designated by the bargaining agent Bluer than Blue case - negative variance on sales, was there
b. Unorganized Establishment - representatives of such an existing rule and regulation where the Sec of DOLE
committees: authorizes such deposit? None. Was there a practice
1. any rank-and-file recognized in that industry? None. That deposit must be
2. labor management council refunded to the employee
3. compliance committee
4. safety and health committee Labor Advisory No 11 - non-interference on the disposal of
5. family and welfare committee wages

Routine Inspection Priorities: Security Agency - employer can require security guards to
deposit for the materials and tools but such cash deposit shall
1. hazardous work not exceed 1 month salary of the worker, max deduction must
2. employing children not exceed 20% of salary and upon separation, worker is
3. contracting arrangement entitled to refund; any deduction or deposit must be authorized
4. 10 or more employees by the Secretary of Labor

Complaint Inspection Deductions NOT allowed:

1. SEnA Referral - Single Entry Approach Desk Officer 1. Company uniform

2. Cash deposit for loss or damage unless authorized by DOLE
2. Anonymous Complaint Sec
3. PPE
Part 6-7 Wage Protection 4. capital share or build up in service cooperative
5. training piece
Articles 112-119, LC
Registered Cooperative - Phil Cooperative Code of 2008
Non-interference on Disposal of Wages
- employee can authorize employer to make deductions from
No person is allowed to limit or interfere in the employee’s salary/wage in favor of the cooperative
disposal of his wage/salary
Article 100 and 127, LC
Wages are property of workers
Non-diminution of Benefits
Prohibition against Compulsory Patronage - employer not
allowed to force or compel or oblige employees to purchase or GR - employer is prohibited from unilaterally withdrawing,
make use of the establishment’s merchandise; vitiates free and eliminating, reducing or diminishing these benefits or
lawful consent of the workers supplements of the employee

Wage Deduction - employer not allowed to deduct anything Davao Fruits case - 13th month pay law, included allowances
from the employee’s wage (GR) and other cash benefits; SC disallowed the employer to
change the manner of computation and that the employee has
Exceptions: already acquired a vested right

1. by virtue of a contract - worker is insured with his consent Notable cases:

Manila Bank, Nestle and Honda Phils - SC prohibited
employers to deviate from standard practice of 13th month pay
computation and other benefits
*overtime pay is not a benefit - not included in the diminution of
benefits; employee is for additional service
Payment of Wages
Article 102 - Form of Payment of Wages
GR - legal tender and no other form regardless of employee
consent
Place of Payment - at or near the place of undertaking
Time and Frequency - intervals of not exceeding 16 days, at
least once a month
Must be paid to the employee except:
1. death of employee - to his heirs
2. authorized third party
Payment to a wrong person does not extinguish the obligation -
CC
DO 18-A - Time interval of payment for subcontracting
relationship; DOLE requires interval of 15 days, payroll
processing not beyond 10 days
Business Services of the Future Today case - unjust
enrichment, workers’ salary advances must be returned to the
employer
105 days’ maternity leave - employer overpaid against unjust
enrichment, employer can recover
Part 8 - Conditions on Employment
Article 83, LC
Hours of Work - duty or prescribed work days
Any work performed beyond the prescribed work hours, the
employee is entitled to over time pay
Normal hours of work must not exceed 8 hours
Workers paid on time v workers paid by result must be entitled
to the minimum wage
Requirement of keeping of time-record entries - applicable to
all employees, from rank-and-file to managerial employees and
both workers paid on time and workers paid by results
Exceptions on the 8hr work hours
1. children working, must not exceed 4hrs for 15 below, 15 to
18, not beyond 8 hours
2. RA 10361 - Kasambahay Law, law does not prescribe
number of hours but we can infer that the domestic worker is
given 8 hours of rest time, work must not exceed 16hrs a day
Employment of Health Personnel
On waiting time - considered as hours worked
1. Endorsement period if the employer requires the personnel
to wait
2. Working while on call - the whole time is paid including wait
time
3. Workers in movie/tv industry - talents are considered as
independent contractors where no EE-ER relationship exists;
crew however are covered under the LC, paid including wait
time
Meal Period Article 85 - duty of every employee to provide for
time off for regular meals, not compensable hours work,
minimum of 60 minutes; can be shortened to less than 60min
but it must not be below 20 minutes but will be compensable;
ex when work is non-manual, not physically strenuous
Employer is allowed to reinstate the 1hr period after shortening
it, but still will not be compensable
Normal Work Week v Compressed Work Week
Weekly rest day required, 7th day is the rest day, must not be
less than 24 hours; except for health personnel in far flung
areas, 5 day work week only
48 hour compressed work week - not found in the LC, created
by the DOLE during the oil price hike; to conserve energy and
power, employer not obliged to pay overtime as long as the
employee does not work beyond 12hours a day; cannot be
made permanent, to lower operating cost, additional day of rest
for the employees
Observance of OSH
DO 178 and 184 for workers who stand or sit for long periods
of time, the employer is required to provide tables or surfaces
with adjustable heights, accessible seat, frequent break time,
regular 5 min break every 2 hours
Part 9 - Minimum Labor Standards
All establishments whether for profit or not
Will apply to everyone except:
1. managerial employees - includes members of the
managerial staff; workers who regularly and customarily
exercises discretion in the performance of work directly to
management policies, officers of the managerial staff, not
entitled to minimum labor standard; it is not the title of the job
controls but the job description
2. government employees - civil service laws and regualtions
3. field personnel - non agricultural workers
4. workers paid by results - either be by task or by piece rate
basis provided that their time and performance are not
supervised; supervised or not
5. members of the family who are dependent for support
6. persons in the personal service of another - PAs of talents
etc
Minimum rate/standards pursuant to Article 82, LC
1. hours of work - not beyond 8 hours
2. overtime pay - service beyond 8 hours with proof of actual
work; cannot be waived or offset by under time; except for
compressed work week arrangement
3. premium pay - additional compensation for the first 8 hours
on a rest day or a holiday
4. service incentive leave - at 5 days paid days, not the usual
leave benefit, must at least be working for a year, cash
equivalent can be redeemed by the employee
5. service charges - Article 96 as amended by RA 11360, ex
hotels and restaurants, to be collected by rank-and-file
excluding managerial staff, completely and equally distributed
to qualified workers
6. night shift differential pay - 10pm-6am, at least 10% of the
employee’s wage
7. holiday pay - government declared, excludes establishment
of less than 10 workers (retail and service); flexible holiday
schedule, employees agree to avail of the holiday on other
days as long as it does not result to diminution of benefits
Part 10 - Other Special Benefits

GR - in addition to the statutory benefits

1. 13th Month Pay - PD 851, covers rank-and-file employees;

managerial employees excluded unless already an established
practice; employee must at least worked for a month, must not
be less than 1/12 of the total basic salary earned except other
benefits and commission; due and payable before Dec 24, may
be given in installment but not later than Dec 24, separated
employee still entitled to 13th month

2. Paternity Leave - must be married, both to private and

public sector, 7 days maximum paid in full, must be an
employee upon birth, lawfully married, one and the same
conjugal dwelling or cohabitation, must be applied within a
reasonable time, unless in case of miscarriage, cannot be
converted to cash, only available after the wife gives birth,

3. Adoptive working parents - entitled all benefits entitled to

biological parents, upon birth of the child if the adoptee is
below 7 years, adoption issued by the DSWD,

4. Retirement Pay - Article 302 LC, social legislation because

the worker is no longer employed, retirement result of bilateral
act of the parties, voluntary agreement between the EE and
the ER to severe contract upon retirement age, source must
either be in the contract of employment or from a CBA, 60 or
more with at least 5 years of service for optional retirement,
compulsory is 65 (except underground and surface mine
workers, 50, 60), RA 10789 race horse jockey must be
licensed retirement at 55, retirement pay is fixed in the
employment contract or CBA, 1/2 month salary minimum, does
not include establishments with less than 10 employees, retail,
government employees, Anti-age discrimination Act retired
workers can still work, compulsory age can be waived by the
employer

5. Solo Parents Welfare Act - RA 8972, parental leave and

flexible working schedule, solo parents entitled to parental
leave when child is sick, to attend a PTA meeting, enrollment
of child, not more than 7 days per year as long as you have
rendered at least 1 year of service, qualified solo parent, apply
for leave from employer and apply for solo parent id from
DSWD, flexible work schedule to vary arrival time to work but
must not affect productivity, employer can request for
exemption from DOLE, dependent 18 yo below or beyond 18
but no means of support because of a mental disability

6. VAWC leave RA 9262 - 10 day paid leave, proof in a

complaint at the barangay or office of the prosecutor, may be
extended and still paid

7. Magna Carta of Women RA 9710 for female employees who

undergo gynecological surgery must be working for at least 1
year, in addition to SSS sickness benefit, maximum of 2
months per year depending on the certification prescribed by
the doc, cannot be converted to cash

8. Expanded Breastfeeding Promotion Act RA 10028 - for

nursing employees, 40 min break interval compensable hours
worked in addition to regular time off for regular meal breaks,
infant 0-12 months, to balance family and work life, employers
are required to create a lactation station, except
establishments with less than 10 employees, DO 143
exemptions on establishments to set up lactation stations if
there is no lactating or pregnant employee at the time of
application for the exemption and may be revoked by the
DOLE

9. Drivers and Conductors in the PU transport system, DO

118-12, shall not exceed 12 hours subject to safety operational
regulations, may be required to render maximum 4 hours
overtime, rest period additional 1 hour on top of meal break of
1 hour non-compensable,