FINAL REVIEWER: LABOR LAW 1
LABOR LAW: DEFINITION AND
CLASSIFICATION
Labor Standards refer 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.
Labor authorities have always intended
to provide workers with immediate
access to their rights and benefits,
without being inconvenienced by
arbitration and litigation processes.
COVERAGE
Article 82. The provisions of this Title
shall apply to employees in all
establishments and undertakings
whether for profit or not, but not to
government employees, managerial
employees, field personnel, members
of the family of the employer who are
dependent on him for support,
domestic helpers, persons in the
personal service of another, and
workers who are paid by results as
determined by the Secretary of Labor
in appropriate regulations.
As used herein, “managerial
employees” refer to those whose
primary duty consists of the
management of the establishment in
which they are employed or of a
department or subdivision thereof, and
to other officers or members of the
managerial staff.
“Field personnel” shall refer to non-
agricultural employees who regularly
perform their duties away from the
principal place of business or branch
office of the employer and whose
actual hours of work in the field cannot
be determined with reasonable
certainty.
For GOCCs without original charter, it is
the DOLE and not the CSC which has
jurisdiction over the dispute. (Lumanta
vs. NLRC)
Article 82 of the Labor Code exempts
managerial employees from the
coverage of labor standards. Labor
standards provide for the working
conditions of employees, including
entitlement to overtime pay and premium
pay for working on rest days.
Managerial employees:
(1) Primary duty consists of the
management of the establishment in
which they are employed or of a
department or subdivision thereof;
(2) Customarily and regularly direct the
work of two or more employees
therein; and
(3) Have the authority to hire or fire
other employees of lower rank; or
their suggestions and
recommendations as to the hiring
and firing and as to the promotion or
any other change of status of other
employees are given particular
weight.
Managerial Staff:
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 FINAL REVIEWER: LABOR LAW 1

(1) The primary duty consists of the

performance of work directly related Police Power of the State is the power
to management policies of the inherent in a government to enact laws,
employer; within constitutional limits, to promote
(2) Customarily and regularly exercise the order, safety, health, morals, and
discretion and independent general welfare of society.
judgment.
(3) Regularly and directly assist a The Secretary of Labor is given the
proprietor or a managerial employee extraordinary authority to execute a
whose primary duty consists of the return-to-work order, pending any
management of the establishment in petition questioning their validity.
which he is employed or subdivision (Union of Filipro Employees vs. Nestle
thereof; OR execute under general Philippines)
supervision work along specialized
or technical lines requiring special In a case where the DOLE temporarily
training, experience, or knowledge; suspended deployment of Filipino
OR (iii) execute under general domestic and household workers,
supervision special assignments and “protection to labor,” under the
tasks; and Constitution, does not signify the
(4) Who do not devote more than 20 promotion of employment alone.
percent of their hours worked in a Paramount is that employment should be
workweek to activities which are not decent, just, and humane. It is bad
directly and closely related to the enough that the country has to send its
performance of the work described sons and daughters to strange lands
in paragraphs (1), (2), and (3) above. because it cannot satisfy their
employment needs at home. Hence, the
JURISDICTION government is duty-bound to ensure that
the country’s toiling expatriates have
Situation Jurisdiction adequate protection, personally and
Complaint filed in DOLE economically, while away from home.
DOLE. DOLE (to the exclusion of (Philippine Association of Service
affirms existence of the NLRC)
EER. Exporters, Inc. vs. Drilon)
DOLE denies NLRC
existence of EER. In a case where the legislature required a
Complaint filed in Labor Arbiter license for the practice of radiology,
DOLE with claim for “security of tenure,” as guaranteed under
reinstatement
the Constitution, is superseded by the
Complaint filed in DOLE
NLRC. There is still (but findings may be police power of the state. In the said
an existing EER. questioned through a case, while the right of workers to
petition for security of tenure is a Constitutional
certiorari) guarantee, its exercise may be reasonably
regulated pursuant to the police power to
ANCHORS OF LABOR LAWS safeguard health, morals, peace,

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education, order, safety, and the general
welfare of the people. (St. Lukes vs.
NLRC)
Police power legislations adopted by the
State does not only promote the general
welfare of employees but also the
interest of business establishments, such
as local placement agencies, which may
be placed in a position where they are
made liable to pay million-worth of
money claims. (Serrano vs. Gallant
Maritime Services)
In a case when a Filipino performing
artist was killed in Japan and the
government issued a travel ban, the SC
ruled that parens patriae prevails over
employment as a property right. It
gives effect to a host of regulatory
powers. Police power is invoked in
government enactments which may
interfere with personal liberty or
property in order to promote the general
welfare or the common good. (JMM
Promotion and Management vs. CA)
Rulings are Mandatory and Immediately
Executory. Even if the order of
reinstatement of the Labor Arbiter is
reversed on appeal, it is obligatory for
the employer to reinstate and pay the
wages of the dismissed employee during
the period of appeal until reversal/final
decision of the High Court. (Magana vs.
CA)
In a case where the DOLE laid down
provisions on the payment of part-fixed,
part-performance-based wage for
PUV/PUJ drivers, a group of bus
operators assailed the authority of the
DOLE to issue such and claimed that the
FINAL REVIEWER: LABOR LAW 1
same impairs the obligations of
contracts, due process of law, and equal
protection clause. The SC ruled that
police power is primarily lodged in the
legislature, but the latter may delegate
this power to the President and
administrative agencies.
SOCIAL JUSTICE
The promotion of social justice is to be
achieved not through a mistaken
sympathy towards any group.
Social justice is neither communism, nor
despotism, no atomism, nor anarchy but
the humanization of laws and 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.
Social justice means the promotion of the
welfare of all the people, the adoption by
the Government of measures calculated
to insure economic stability of all the
competent elements of society, through
the maintenance of a proper economic
and social equilibrium in the
interrelations of the members of the
community, constitutionally, through the
adoption of measures legally justifiable,
or extra-constitutionally, through the
exercise of powers underlying the
existence of all governments on the time-
honored principle of salus populi est
suprema lex.
Social justice, therefore, must be
founded on the recognition of the
necessity of interdependence among
divers and diverse units of a society and
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of the protection that should be equally
and evenly extended to all groups as
combined force in our social and
economic life, consistent with the
fundamental and paramount objective of
the state of promoting the health,
comfort, and quiet of all persons, and of
bringing about “the greatest good to the
greatest number.”
PROTECTION TO LABOR
In De Vera vs. NLRC, the SC ruled that
reinstatement of the employee is not
practical if the relation between the
employer and employee have been
strained. Separation pay may be granted
considering the nature and degree of the
offense committed. Social justice does
not always tilt in favor of an employee
but equalizes and forges the interests of
both the employer and employee.
However, under the policy of social
justice, the law bends over backward to
accommodate the interests of the
working class on the humane
justification that those with less privilege
in life should have more in law.
Level of protection to labor should vary
from case to case. 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 that the ordinary worker. (Fuji
Television Network vs. Espiritu)
The level of protection to labor must be
determined on the basis of:
 Nature of work;
FINAL REVIEWER: LABOR LAW 1
 Qualifications of the employee; and
 Other relevant circumstances such as
but not limited to educational
attainment and other special
qualifications.
Law and jurisprudence guarantee
security of tenure to every employee.
However, in protecting the rights of the
workers, the law does not authorize the
oppression or self-destruction of the
employer. Social justice does not mean
that every labor dispute shall
automatically be decided in favor of
labor. Thus, the Constitution and the law
equally recognize the employer’s right
and prerogative to manage its operation
according to reasonable standards and
norms of fair play. (Paredes vs. Feed the
Children)
SECURITY OF TENURE
Security of tenure for labor is guaranteed
under the Constitution. Employees are
not stripped of their security of tenure
when they move to work in a different
jurisdiction. With respect to the rights of
OFWs, we follow the principle of lex
loci contractus. Under Philippine laws,
OFWs may only be terminated, under the
following circumstances:
 For just or authorized cause; and
 After compliance with substantial and
procedural due process. (Sameer
Overseas Placement vs. Cabiles)
While the law acknowledges the plight
and vulnerability of workers, it does not
authorize the oppression or self-
destruction of the employer.
Management prerogative is recognized
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in law and in our jurisprudence. This
prerogative, however, should not be
abused. It is tempered with the
employee’s’ rights to security of
tenure. Workers are entitled to
substantive and procedural due process
before termination.
DUE PROCESS REQUIREMENTS
An employer must furnish an employee
sought to be dismissed two written
notices of dismissal before a termination
of employment can be legally effected.
(1) Notice which apprises the employee
of the particular acts or omissions
for which his dismissal is sought;
and
(2) Subsequent notice which informs
the employee of the employer’s
decision to dismiss him.
The dictates of procedural due process
requires that decision to dismiss can only
be handed after the employer has
afforded the employee with ample
opportunity to be heard and defend
himself. (National Service Corporation
vs. NLRC)
Process:
 Notice
 Answer/Hearing
 Decision
While the law imposes a heavy burden
on the employer to respect its employees'
security of tenure, the law likewise
protects the employer's right to expect
from its employees efficient service,
diligence, and good conduct. (Mamaril
vs. The Red System Company)
FINAL REVIEWER: LABOR LAW 1
Law holds sway over security of tenure,
more so when it is so enacted having the
purpose of addressing a government’s
issue, i.e., large scale anomalies in the
registration of voters. (De Guzman vs.
COMELEC)
Although the SC recognizes the right of
employers to shape their own workforce,
this management prerogative must not
curtail the basic right of employees to
security of tenure. (Alert Security
Agency vs. Pasawilan)
Suspension from work is prima facie a
deprivation of the right to security of
tenure. Thus, termination and suspension
from work must be reasonable to meet
the constitutional requirement of due
process of law. It will be reasonable if it
is based on just or authorized causes
enumerated in the Labor Code. (Cathay
Pacific vs. Spouses Vasquez)
JUST CAUSES (Article 282): Serious
misconduct, willful disobedience or
insubordination, gross and habitual
neglect of duties, fraud or willful breach
of trust, loss of confidence, commission
of a crime or offense, and analogous
cases.
Note: Employees performing supervisory
tasks are covered by the trust and
confidence rule. However, infractions
against trust and confidence should merit
only the corresponding penalty
demanded by the circumstance. (Sagales
vs. Rustans)
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However, loss of trust and confidence
should not be simulated. (Perez vs.
PTTC)
The SC ruled in Agabon vs. NLRC that
for termination of employment based on
just causes, the following requisites must
concur:
 A written notice served on the
employee specifying the ground or
grounds for termination and giving
to said employee reasonable
opportunity within which to explain
his side;
 A hearing or conference during
which the employee concerned, with
the assistance of counsel if he so
elects, is given opportunity to
respond to the charge, present his
evidence, or rebut the evidence
presented against him;
 A written notice of termination
served on the employee indicating
that upon due consideration of all the
circumstances, grounds have been
established to justify his termination;
and
 In case of termination, the foregoing
notices shall be served on the
employee’s last known address.
In deciding Agabon vs. NLRC, the SC
also considered the employees’ intention
to sever the tie with their employer.
Verbal appraisal of charges against an
employee does not comply with the first
notice requirement. Consultations or
conference cannot substitute actual
observance of notice and hearing. (King
of Kings Transport vs. Mamac)
FINAL REVIEWER: LABOR LAW 1
Quantum of evidence during
investigation of cases involving just
causes: Clear and convincing evidence
AUTHORIZED CAUSES (Article
283): Employer is authorized to separate
employees due to a legitimate business
reason, e.g., retrenchment to minimize
business losses, installation of labor-
saving devices, redundancy, a
requirement by law, or in compliance
with regulations.
Note: Termination by retrenchment must
be exercised essentially as a measure of
last resort, after less drastic means.
TERMINATION FOR HEALTH
REASONS (Article 284): Employers are
allowed to terminate employees found
suffering from any disease and whose
continued employment is prohibited by
law or is prejudicial to his health and the
health of his co-workers.
Burden of proof: Employer has the
burden of proving that the dismissal was
with just or authorized cause. If unable to
prove, employee shall be entitled to
reinstatement and back wages.
Illegal dismissal involving circumstances
contrary to morals, good customs, and
public policy entitles employee to moral
and exemplary damages, on top of
actual damages. (Montinola vs. PAL)
Principle of totality of infractions
The totality of the number of violations
committed during the period of
employment shall be considered in
determining the penalty to be imposed
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 FINAL REVIEWER: LABOR LAW 1

upon an erring employee. The offenses statutory rights.

committed by petitioner should not be
taken singly and separately. Fitness for
continued employment cannot be HANDLING OF LABOR CASES
compartmentalized into tight little
cubicles of aspects of character, conduct, Strict application of technical rules
and ability – separate and independent of should be set aside to serve the broader
each other. While it may be true that an interest of substantial justice. Thus, in a
employee was already penalized for his case where employees seek affirmative
previous infractions, this does not and action from a court without benefit of a
should not mean that his employment counsel and had lapses in attaching
record would be wiped clean of his required court documents, the SC ruled
infractions. (Merlin vs. NLRC) that the petition should still be decided in
the interest of justice. (Polsotin vs. De
Summary of Due Process Guia Enterprises Inc.)
Requirements
Cases must be ruled by impartial
SCENARIO IMPLICATION commissioners of the NLRC. If a labor
Just cause/ Dismissal is valid. arbiter subsequently gets promoted as
Authorized cause/ Employer will not commissioner of the NLRC, he should
Health reasons suffer any inhibit himself from reviewing the cases
liability. he handled as then labor arbiter.
Due process Otherwise, such would be tantamount to
observed denial of due process. (Singson vs.
Without just or Illegal dismissal. NLRC)
authorized cause Employee must be
but due process reinstated without NO DISCRIMINATION POLICY
was observed loss of seniority
Without just or rights and A company is free to regulate manpower
authorized cause privileges and is and employment, from hiring to firing,
and no due entitled to full according to their discretion and best
process back wages. business judgment, except in cases of
With just or Dismissal should unlawful discrimination or those
authorized cause be upheld. provided under the law. (The SC in
but no due Procedural PTTC vs. NLRC, involving a policy
process infirmity cannot prohibiting employment for married
be cured by women.)
invalidating the
dismissal. Equal pay for equal work, in
Employer should International School Alliance Educators
indemnify vs. DOLE Secretary Quisumbing, where
employee for foreign-hired workers are given a salary
violation of his rate higher that local-hired workers.

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The fact that an employee is working in a
sectarian institution does not
automatically subject him to its religious
standard of morality, e.g., premarital
relations resulting in pregnancy out of
wedlock. (Cadiz vs. Brent Hospital and
Colleges)
CONSTRUCTION IN FAVOR OF
LABOR/
LABOR CONTRACTS IMBUED
WITH PUBLIC INTEREST
In the interpretation of employment
contracts, doubts are generally resolved
in favor of the worker. However, it must
be noted as well that obscure words and
provisions shall not favor the party that
caused the obscurity. Thus, most of the
time, the terms of an employment
contract are construed against the
employer for being the party who
prepared it. (Innodata vs. Inting)
Compliance with the law is mandatory
and beyond contractual stipulation by the
parties. (Marcopper vs. NLRC)
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. (PNCC Employees Organization
vs. PNCC)
PROTECTED RIGHTS OF THE
EMPLOYER/MANAGEMENT
PREROGATIVES
In Pampanga Bus Company vs.
PamBusCo Employees Union, the SC
ruled that the Court of Industrial
Relations had no authority to compel
FINAL REVIEWER: LABOR LAW 1
employer to recruit only from the
member of the employees’ union.
The Constitution also guarantees the
right of the employer to reasonable
returns from his investment. Hence, the
law allows an employer to downsize his
business to meet clear and continuing
economic threats. (Asian Alcohol
Corporation vs. NLRC)
Labor laws discourage interference in
employers’ judgments concerning the
conduct of their business. The rights of
employees to security of tenure does not
give them vested rights to their positions
to the extent of depriving management of
its prerogatives to change their
assignments or to transfer them.
Managerial prerogatives, however, are
subject to limitations provided by law,
collective bargaining agreements, and
general principle of fair play and justice.
(Mendoza vs. Rural Bank of Lucban)
EMPLOYMENT CONTRACT
An employment contract, like any other
contract, is perfected at the moment the
parties come to agree upon its terms and
conditions. The parties may establish
such stipulations, terms, and conditions
as they may deem convenient, subject to
laws, rules, and regulations. (Sagun vs.
ANZ Global)
COLLECTIVE BARGAINING
AGREEMENT
The contract is the law between parties.
Ergo, when the terms are explicit and the
language of the CBA is clear and
unambiguous, the same are no longer
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susceptible to any other interpretation.
(DOLE vs. PAMAO-NFL)
COMPANY PRACTICE
To be considered a company practice,
the giving of benefits should have been
done over a long period of time and must
be shown to have been consistent and
deliberate.
The rule against diminution of benefits
applies if it is shown that the grant of the
benefit is based on an express policy or
has ripened into a practice over a long
period of time. Nevertheless, the rule
will not apply if the practice is due to
error in the construction or application of
a doubtful or difficult question of law. In
case of error, it should be shown that the
correction was done soon after discovery
of the same. (Central Azucarera vs.
Central Azucarera Labor Union)
COMPANY POLICY
Like all other business enterprises,
management has the prerogative to
discipline its employees and to impose
appropriate penalties pursuant to
company rules and regulations. The law,
in protecting the rights of labor,
authorized neither oppression nor self-
destruction of an employer company
which itself is possessed of rights that
must be entitled to recognition and
respect. (China Bank vs. Borromeo)
EMPLOYER-EMPLOYEE
RELATIONSHIP
Generally, labor standards and
conditions apply only if there is EER.
FINAL REVIEWER: LABOR LAW 1
However, in some instances, even if
there is no EER, the Labor Code may
still be invoked, e.g., indirect employer’s
liability, illegal recruitment, and misuse
of POEA license.
Four-fold test (in determining EER):
 Selection and engagement of the
employee;
 Payment of wages;
 Power of dismissal; and
 Power to control.
Control test
 Control not only result but means
and methods by which the same is
to be accomplished
 Control test merely calls for the
existence of such right to control
the manner of doing work, not
necessarily actual exercise of such
right
 Issuance of rules and guidelines
does not establish control by the
principal
Note: The less control the hirer exercises,
the more likely the worker is considered
an independent contractor. (Sonza vs.
ABS-CBN)
Economic Dependence or Economic
Reality Test
 Whether the worker is dependent
on the alleged employer for his
continued employment in that line
of business
It is not necessary that a regular
appointment be issued, or an employee
be declared as a regular employee. If an
employee performs activities which are
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 FINAL REVIEWER: LABOR LAW 1

necessary and desirable to the business Two-Tiered Approach

of the employer and had his contract  Power to control with respect to
renewed over a period of time, he is means and methods by which
considered as a regular employee. work is to be accomplished; and
(Paguio vs. NLRC)  Underlying economic realities of
the activity or relationship.
it not being indispensable that he be
first issued a regular appointment or be General Rule: Control Test
formally declared as such before Exception: Two-tiered test is used when:
acquiring a regular status.
 There is no written agreement or
That petitioner performed activities terms of reference to base the
which were necessary and desirable to relationship on; and
the business of the employer, and that  Due to the complexity of the
relationship based on the various
the same went on for more than a year,
positions and responsibilities
could hardly be denied.
given to the worker over the
period of his employment.
Circumstances of the Economic
Activity Taken Into Consideration
SOME EER CASES DECIDED BY
THE SUPREME COURT
 The extent to which the services
performed are an integral part of EER EXISTS EER DOES NOT
the employer’s business; EXIST
 The extent of the worker’s Jeepney drivers on Farm workers are not
investment in equipment and boundary basis employees of the
facilities; sugar central
 The nature and degree of control Drivers or helpers of Caddies are not
salesmen are employees of the golf
exercised by the employer; employees of the club
 The worker’s opportunity for company
profit or loss; Employees of Collecting agents on
 The amount of initiative, skill, unregistered commission basis
judgment, or foresight required association
for the success of the claimed Street-hired kargador Shoeshine boys
Workers in movie Independent
independent enterprise; projects contractors selling
 The permanency and duration of soft drinks
the relationship between the Salaried insurance Commission
worker and employer; and agent as salesman
 The degree of dependency of the distinguished from
worker upon the employer for his registered agents on a
commission basis
continued employment in that line Tailors, seamstresses, Referees are
of business. servers, basters, independent
plantsadoras paid on contractors

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a piece-rate basis
In-house lawyer as A residency or
distinguished from resident physician
outside retainer position in a medical
Resident physicians specialty is never a
University professors permanent one
and instructors
Taxi driver, barber
Security guards with
respect to the security
agency
Pakiao workers
Truck drivers
Existence of EER is determined by law
and not by contract. Hence, even if the
parties call their contract a “Contract of
Lease of Service,” the factual existence
of EER will still prevail.
No particular form of evidence is
required to prove the existence of EER.
Any competent and relevant evidence to
prove the relationship may be admitted.
MANAGEMENT FUNCTION
No, absent any proof that management
acted in a malicious or arbitrary manner,
the Court will not interfere with the
exercise of judgment by an employer.
The employer’s right to conduct the
affairs of its business, according to its
own discretion and judgment, is well-
recognized. Management has a wide
latitude to conduct its own affairs in
accordance with the necessities of its
business. As the Court once said: The
Court has always respected a company's
exercise of its prerogative to devise
means to improve its operations. Thus,
we have held that management is free to
regulate, according to its own discretion
and judgment, all aspects of
employment, including hiring, work
FINAL REVIEWER: LABOR LAW 1
assignments, supervision and transfer of
employees, working methods, time,
place and manner of work. This is so
because the law on unfair labor practices
is not intended to deprive employers of
their fundamental right to prescribe and
enforce such rules as they honestly
believe to be necessary to the proper,
productive and profitable operation of
their business. (Bankard vs. NLRC)
CONTRACTOR, CONTRACTING,
SUB-CONTRACTING
Article 106. Whenever an employer enters
into a contract with another person for the
performance of the former’s work, the
employees of the contractor and of the latter’s
subcontractor, if any, shall be paid in
accordance with the provisions of this code.
In the event that the contractor or
subcontractor fails to pay the wages of his
employees in accordance with this Code, the
employer shall be jointly and severally liable
with his contractor or subcontractor to such
employees to the extent of the work
performed under the contract, in the same
manner and extent that he is liable to
employees directly employed by him.
The Secretary of Labor may, by appropriate
regulations, restrict or prohibit the contracting
out of labor to protect the rights of workers
established under this Code. In so prohibiting
or restricting, he may make appropriate
distinctions between labor-only contracting
and job contracting as well as differentiations
within these types of contracting and
determine who among the parties involved
shall be considered the employer for purposes
of this Code, to prevent any violation or
circumvention of any provision of this Code.
There is “labor-only” contracting where the
person supplying workers to an employer
does not have substantial capital or
investment in the form of tools, equipment,
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 FINAL REVIEWER: LABOR LAW 1

machineries, work premises, among others, with the contractor or subcontractor the
and the workers recruited and placed by such performance or completion of a specific
persons are performing activities which are
job, work, or service within a definite or
directly related to the principal business of
such employer. In such cases, the person or predetermined period, regardless of
intermediary shall be considered merely as an whether such job, work, or service is to
agent of the employer who shall be be performed or completed within or
responsible to the workers in the same manner outside the premises of the principal.
and extent as if the latter were directly Thus, in legitimate job contracting, the
employed by him.
employer-employee relationship between
the job contractor and his employees is
One is not required to possess both
maintained. While the law creates an
substantial capital and investment in the
employer-employee relationship between
form of tools, equipment, machinery,
the employer and the contractor's
work premises, among others, to be
employees, the same is only for the
considered a job contractor. Possession
purpose of ensuring the payment of the
of either attribute is sufficient for the
employees' wages. On the other hand,
purposes of complying with one of the
labor-only contracting is a prohibited act
conditions for the establishment of
and it is not condoned by law. It is an
permissible job contracting. The Court
arrangement where the contractor not
has already taken judicial notice of the
having substantial capital or investment
general practice adopted in several
in the form of tools, equipment,
government and private institutions and
machineries, work premises, among
industries of hiring independent
others, supplies workers to an employer
contractors to perform special services
and the workers recruited are performing
ranging from janitorial, security and even
activities which are directly related to the
technical or other specific services.
principal business of such employer.
While these services may be considered
Clearly therefrom, a finding of the
directly related to the principal business
existence of a labor-only contracting
of the employer, nevertheless, they are
would definitely give rise to: (1) the
not necessary in the conduct of the
creation of an employer-employee
principal business of the employer. (Neri
relationship between the principal and
vs. NLRC)
the employees of the contractor or sub-
contractor; and (2) the solidary liability
The Court mentioned that there are two
of the principal and the contractor to the
possible relations which may arise
employees in the event of any violation
among the parties:
of the Labor Code. In the case at bar, the
Court is more inclined to sustain the
 Permitted legitimate job contract; or
findings of both the LA and NLRC that
 The prohibited labor-only
the ICSI is a legitimate contractor and
contracting.
that the employer-employee relationship
between ICSI and the respondents is
The first is an arrangement whereby a
maintained, not with the petitioner’s. The
principal agrees to put out or farm out
Court held that ICS has been

Page 12 of 26

incorporated and duly registered with
SEC, BIR, SSS, Philhealth, PAG-IBIG,
and DOLE. Moreover, it has a
substantial capital and other A-list clients
apart from the petitioner during the time
that its contract with the former is
subsisting. Lastly, ICSI was the one who
control the performance of the work of
its employees. (San Miguel Foods vs.
Rivera)
The party with whom an independent
contractor deals is solidarily liable with
the
latter for unpaid wages, and only to that
extent and for that purpose that the latter
is considered a direct employer. (PAL vs.
NLRC)
Article 107. The provisions of the
immediately preceding Article shall
likewise apply to any person,
partnership, association or corporation
which, not being an employer,
contracts with an independent
contractor for the performance of the
any work, task, job, or project.
The fact that there is no actual and direct
employer-employee relationship between
petitioner and respondents does not
absolve the former from liability for the
latter’s monetary claims. When
petitioner contracted DNL Security’s
services, petitioner became an indirect
employer of respondents, pursuant to
Article 107 of the Labor Code. (GSIS vs.
NLRC)
The prohibition against personal or
marital relationships with employees of
competitor companies upon Glaxo’s
employees is reasonable under the
FINAL REVIEWER: LABOR LAW 1
circumstances because relationships of
that nature might compromise the
interests of the company. In laying down
the assailed company policy, Glaxo only
aims to protect its interests against the
possibility that a competitor company
will gain access to its secrets and
procedures. That Glaxo possesses the
right to protect its economic interests
cannot be denied. (Duncan vs. Glaxo)
SALIENT MANAGEMENT
PREROGATIVES
 Right to hire
 Right to discipline employees, to
dismiss, impose a lighter penalty,
or condone an offense, reasonable
exercise tempered with
compassion and understanding,
waiver of such rights
 Right to impose preventive
suspension
 Right to reassign, pending
investigation
 Right to transfer
 Right to prescribe reasonable
rules and regulations, company
policies, and regulations
 Right to determine the
qualifications and fitness of
workers for hiring, promotion,
firing
 Right to reorganize
 Right to contract-out services
 Right to reasonable returns on
investment and expansion and
growth
 Right to grant bonus
 Right to prohibit employees from
marrying employees of
competitor company
 Non-compete clause
Page 13 of 26

 Right to close establishment and
reduce personnel
 Right to impose productivity
standards to workers
 Right to change work schedule
 Right to (or not to) schedule work
RECRUITMENT AND
PLACEMENT
Article 13 (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.”
The number of persons dealt with is not
an essential ingredient of the act of
recruitment and placement of workers.
Any of the acts mentioned in the basic
rule in Art. 13(b) will constitute
recruitment and placement even if only
one prospective worker is involved. The
proviso merely lays down a rule of
evidence that where a fee is collected in
consideration of a promise or offer of
employment to two or more prospective
workers, the individual or entity dealing
with them shall be deemed to be engaged
in the act of recruitment and placement.
(People vs. Panis)
ILLEGAL RECRUITMENT
FINAL REVIEWER: LABOR LAW 1
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
on a large scale if committed against
three (3) or more persons individually or
as a group. 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.
Illegal recruitment, as defined under
Article 38 of the Labor Code,
encompasses recruitment activities for
both local and overseas employment.
However, illegal recruitment under this
article is limited to recruitment activities
undertaken by non-licensees or non-
holders of authority.[10] Thus, under the
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Labor Code, to constitute illegal
recruitment in large scale, three elements
must concur:
 The accused undertook any
recruitment activity defined under
Art. 13 (b) or any prohibited practice
enumerated under Art. 34 of the
Labor Code.
 He did not have the license or the
authority to lawfully engage in the
recruitment and placement of
workers.
 He committed the same against three
or more persons, individually or as a
group.
A person can be charged with both
illegal recruitment and Estafa. The
former is mala prohibitum where
criminal intent is not necessary for
conviction and damage is not an essential
element, while the latter is mala in se
where such intent is imperative and
damage is an essential element. (People
vs. Dela Cruz)
The commission of illegal recruitment by
three or more persons conspiring or
confederating with one another is
deemed committed by a syndicate and
constitutes economic sabotage.
Trafficking in Persons, qualified by a
syndicate, is committed if carried out by
a group of three or more. It is not only
limited to transportation of victims for
trafficking but is also manifest when
such recruitment is for prostitution.
(People vs. Lalli)
Section 6, Paragraph (m) of R.A. No.
8042 provides that in case of juridical
persons, the officers having control,
management, or direction of their
FINAL REVIEWER: LABOR LAW 1
business shall be liable. (People vs.
Molina)
Section 10 of RA 8042 provides that the
employer and the recruitment or
placement agency are jointly liable for
money claims arising from the
employment relationship or any contract
involving overseas Filipino workers. If
the recruitment or placement agency is a
juridical being, the corporate officers and
directors and partners as the case may be,
shall themselves be jointly and solidarity
liable with the corporation or partnership
for the aforesaid claims and damages. In
providing for the joint and solidary
liability of private recruitment agencies
with their foreign principals, RA 8042
precisely affords OFWs with a recourse
and assures them of immediate and
sufficient payment of what is due them.
(Cuatrocruz vs. Active Works)
THEORY OF IMPUTED
KNOWLEDGE
The theory of imputed knowledge
ascribed the knowledge of the agent to
the principal, not the other way around.
The theory of imputed knowledge 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. (APQ Ship
Management vs. Casenas)
FOREIGN LAW
When a foreign law invoked is contrary
to the Constitution and the Labor Code,
as a rule, Philippine laws apply even to
Page 15 of 26

overseas employment contracts. This
rule is rooted in the constitutional
provision of Section 3, Article XIII that
the State shall afford full protection to
labor, whether local or overseas. Hence,
even if the OFW has his employment
abroad, it does not strip him of his rights
to security of tenure, humane conditions
of work and a living wage under our
Constitution.
Exception: As an exception, the parties
may agree that a foreign law shall govern
the employment contract. A synthesis of
the existing laws and jurisprudence
reveals that this exception is subject to
the following requisites:
 That it is expressly stipulated in
the overseas employment contract
that a specific foreign law shall
govern;
 That the foreign law invoked must
be proven before the courts
pursuant to the Philippine rules on
evidence;
 That the foreign law stipulated in
the overseas employment contract
must not be contrary to law,
morals, good customs, public
order, or public policy of the
Philippines; and
 That the overseas employment
contract must be processed
through the POEA.
The Court is of the view that these four
(4) requisites must be complied with
before the employer could invoke the
applicability of a foreign law to an
overseas employment contract. With
these requisites, the State would be able
to abide by its constitutional obligation
FINAL REVIEWER: LABOR LAW 1
to ensure that the rights and well-being
of our OFWs are fully protected.
Lacking any one of the four requisites
would invalidate the application of the
foreign law, and the Philippine law shall
govern the overseas employment
contract. In the present case, as correctly
held by the CA, even though an
authenticated copy of the ESA was
submitted, it did not mean that said
foreign law could be automatically
applied to this case. The petitioners
miserably failed to adhere to the two
other requisites. The petitioners failed to
comply with the first requisite because
no foreign law was expressly stipulated
in the overseas employment contract
with Arriola. The petitioners did not
directly cite any specific provision or
stipulation in the said labor contract
which indicated the applicability of the
Canadian labor laws or the ESA. They
failed to show on the face of the contract
that a foreign law was agreed upon by
the parties. Rather, they simply asserted
that the terms and conditions of Arriola’s
employment were embodied in the
Expatriate Policy, Ambatovy Project -
Site, Long Term.
The provisions of the ESA are patently
inconsistent with the right to security of
tenure. Both the Constitution and the
Labor Code provide that this right is
available to any employee. In a host of
cases, the Court has upheld the
employee's right to security of tenure in
the face of oppressive management
behavior and management prerogative.
Security of tenure is a right which cannot
be denied on mere speculation of any
unclear and nebulous basis. Furthermore,
not only do these provisions collide with
Page 16 of 26

the right to security of tenure, but they
also deprive the employee of his
constitutional right to due process by
denying him of any notice of termination
and the opportunity to be heard.
In fine, as the petitioners failed to meet
all the four (4) requisites on the
applicability of a foreign law, then the
Philippine labor laws must govern the
overseas employment contract of
Arriola. (IPAMS vs. De Vera)
SEAFARERS ARE CONTRACTUAL
EMPLOYEES
It is clear that seafarers are considered
contractual employees. They cannot be
considered as regular employees under
Article 280 of the Labor Code. Their
employment is governed by the contracts
they sign every time they are rehired and
their employment is terminated when the
contract expires. Their employment is
contractually fixed for a certain period of
time. They fall under the exception of
Article 280 whose employment has been
fixed for a specific project or
undertaking the completion or
termination of which has been
determined at the time of engagement of
the employee or where the work or
services to be performed is seasonal in
nature and the employment is for the
duration of the season. We need not
depart from the rulings of the Court in
the two aforementioned cases which
indeed constitute stare decisis with
respect to the employment status of
seafarers.
Filipino seamen are governed by the
Rules and Regulations of the POEA. The
Standard Employment Contract
FINAL REVIEWER: LABOR LAW 1
governing the Employment of All
Filipino Seamen on Board Ocean-Going
Vessels of the POEA, particularly in Part
I, Sec. C specifically provides that the
contract of seamen shall be for a fixed
period. And in no case should the
contract of seamen be longer than 12
months which states that, the period of
employment shall be for a fixed period
but in no case to exceed 12 months and
shall be stated in the Crew Contract. Any
extension of the Contract period shall be
subject to the mutual consent of the
parties. (MIllares vs. NLRC)
Seamen and overseas contract workers
are not covered by the term “regular
employment” as defined in Article 280
of the Labor Code. A seafarer, not being
a regular employee, is not entitled to
separation or termination pay. (Ravago
vs. ESSO Eastern Marine)
The Supreme Court in a long line of
cases ruled that the subsequently
executed side agreement of an overseas
contract worker with the foreign
employer is void, simply because it is
against our existing laws, morals, and
public policy. Such attempt to
circumvent, substitute, or alter the terms
and conditions laid down in the POEA
SEC and its attached minimum
employment standards, which form part
of the overseas employment contract,
should not be countenanced. (NISDA vs.
Sea Serve Maritime)
Work-relatedness of an injury or illness
means that the seafarer’s inquiry or
illness has a possible connection to one’s
work and thus, allows the seafarer to
claim disability benefits thereof. The
Page 17 of 26

burden is placed upon the Petitioner to
present substantial evidence or such
relevant evidence which a reasonable
mind might accept as adequate to justify
a conclusion that there is a casual
connection between the nature of his
employment and his injury. In the instant
case, Petitioner failed to prove a
reasonable connection between his work
as a Casino Dealer and his alleged
lumbar disc injury resulting from his
gym workout. (Guerrero vs. Philippine
Transmarine)
The last paragraph of Section 20(A)(3)
of the POEA-SEC provides the
mandatory conflict resolution procedure
when the findings of the company-
designated physicians and the seafarer's
appointed physician are different, a third
doctor may be agreed jointly between the
employer and the seafarer. The third
doctor's decision shall be final and
binding on both parties. Section 32 of the
POEA-SEC provides, any item in the
schedule classified under Grade 1 shall
be considered or shall constitute total and
permanent disability. (Pacific Ocean vs.
Castillo)
A foreign corporation not doing business
in the Philippines may be sued here for
acts done against persons in the
Philippines. Indeed, if a foreign
corporation, not engaged in business in
the Philippines, is not barred from
seeking redress from courts in the
Philippines, a fortiori that same
corporation cannot claim exemption
from being sued in Philippine courts for
acts done against a person or persons in
the Philippines. (Facilities Management
vs. Dela Rosa)
FINAL REVIEWER: LABOR LAW 1
POEA has the power to cancel the
license of erring recruitment agencies as
a consequence of not adhering to the
rules and regulations set by the POEA
and DOLE. Rules and regulations
referred to includes POEA Rules and
Regulations. (Republic vs. Humanlink)
While "[w]ell-entrenched is the rule that
courts will not interfere in matters which
are addressed to the sound discretion of
the government agency entrusted with
the regulation of activities coming under
the special and technical training and
knowledge of such agency," it is not
entirely correct to say that an action by
an administrative agency, such as in the
case at bar, cannot be questioned in an
injunction suit. It has been held that
"[c]ourts cannot enjoin an agency from
performing an act within its prerogative,
except when in the exercise of its
authority it gravely abused or exceeded
its jurisdiction." Indeed, administrative
decisions on matters within the executive
jurisdiction can be set aside on proof of
grave abuse of discretion, fraud, or error
of law, and in such cases, injunction may
be granted. (Republic vs. Principalia
Management)
xxxxx
end of midterms
LABOR STANDARDS:
DEFINITION AND COVERAGE
Labor Standards prescribes the
conditions of employment that both
employers and employees have to abide
by, such as types of employment,
working hours, minimum wage,
Page 18 of 26

mandatory benefits, holidays, rest days,
and employment rights.
Article 82. The provisions of this Title
shall apply to employees in all
establishments and undertakings
whether for profit or not, but not to
government employees, managerial
employees, field personnel, members
of the family of the employer who are
dependent on him for support,
domestic helpers, persons in the
personal service of another, and
workers who are paid by results as
determined by the Secretary of Labor
in appropriate regulations.
As used herein, “managerial
employees” refer to those whose
primary duty consists of the
management of the establishment in
which they are employed or of a
department or subdivision thereof,
and to other officers or members of
the managerial staff.
“Field personnel” shall refer to non-
agricultural employees who regularly
perform their duties away from the
principal place of business or branch
office of the employer and whose
actual hours of work in the field cannot
be determined with reasonable
certainty.
Exempted from the coverage of labor
standards are the following:
government employees, managerial
employees, field personnel, members of
the family of the employer who are
dependent on him for support, domestic
helpers, persons in the personal service
of another, workers who are paid by
FINAL REVIEWER: LABOR LAW 1
results as determined by the SOLE in
appropriate regulations, and
personal/family drivers.
Supervisory employees discharging
functions that qualify them as officers or
members of the managerial staff are
considered exempt from the coverage of
Article 82 of the Labor Code and,
therefore, not entitled to overtime pay,
rest day, and holiday pay. In determining
whether an employee is within the terms
of the statutes, the criterion is the
character of work performed, rather that
the title of the employee’s position.
(National Sugar Refineries Corporation
vs. NLRC)
Article 82 of the Labor Code states that
the provisions of the Labor Code on
working conditions and rest periods shall
not apply to managerial employees.
Generally, managerial employees are not
entitled to overtime pay for services
rendered in excess of eight hours a day.
(Clientlogic Philippines, Inc. vs. Castro)
Article 212 (m) of the Labor Code
defines a managerial employee as one
who is vested with powers or
prerogatives to lay down and execute
managerial policies and/or to hire,
transfer, suspend, lay-off, recall,
discharge, assign, or discipline
employees, or to effectively recommend
such managerial actions.
A distinguishing characteristic of
“pakyaw” or task basis engagement
from a straight-hour wage payment is the
non-consideration of the time spent in
working. The payment of an employee
on task or pakyaw basis alone is
Page 19 of 26

insufficient to exclude one from the
coverage of Service Incentive Leave and
holiday pay. In determining whether
workers engaged on “pakyaw” or task
basis is entitled to holiday and SIL pay,
the presence of employer supervision
with regard the worker’s time and
performance is key. (David vs. Macasio)
There are two categories of employees
paid by results: (Lambo vs. NLRC)
(a) Those whose time and
performance are supervised by the
employer (Here, there is an
element of control and
supervision over the manner as to
how the work is to be performed.
A piece-rate worker belongs to
this category especially if he
performs his work in the company
premises.); and
(b) Those whose time and
performance are unsupervised
(Here, the employer’s control is
over the result of the work.
Workers on pakyaw and takay
basis belong to this group).
Family driver’s employment rights are
governed by the Civil Code and not the
Labor Code. Persons in the personal
service of another, such as family
drivers, are excluded from the coverage
of holiday pay, 13th month pay, and
service incentive leave.
HOURS OF WORK
The right to fix the work schedules of
employees rests principally on their
FINAL REVIEWER: LABOR LAW 1
employer. (Sime Darby Pilipinas vs.
NLRC)
Article 83 provides that the normal
hours of work of any employee shall not
exceed eight (8) hours a day.
If Saturday was part of the regular work
week and not dependent on
management’s decision to schedule
work, there would be no need to give
additional compensation to employees
who report to work on that day. (Coca-
Cola Bottlers vs. Iloilo Coca-Cola Plant
Labor Union)
PRINCIPLES IN DETERMINING
HOURS WORKED
Employee not entitled to backwages on
days where no work was required. The
age-old rule governing the relation
between labor and capital or
management and employee of a fair
day’s wage for fair day’s labor remains
as the basic factor in determining
employees’ wages, and for that matter,
backwages.
If there is no work performed by the
employee, there can be no wage or pay
unless of course the laborer was able,
willing, and ready to work but was
illegally locked out or suspended. (SSS
vs. SSS Supervisors’ Union)
The thirty-minute assembly time long
practiced and institutionalized by mutual
consent of the parties under the
Collective Bargaining Agreement cannot
be considered as “waiting time” within
the purview of the Labor Code. (Arica
vs. NLRC)
Page 20 of 26

The burden of proving entitlement to
overtime pay rests on the employee
because the benefit is not incurred in the
normal course of business (Robina
Farms Cebu vs. Villa)
MEAL PERIODS
The eight-hour work period does not
include the meal break. Nowhere in the
law may it be inferred that employees
must take their meals within company
premises. Employees are not prohibited
from going out of the premises as long as
they return to their posts on time. Private
respondent’s act of going home to take
his dinner does not constitute
abandonment. (PAL vs. NLRC)
NIGHT SHIFT DIFFERENTIAL
As a general rule, one who pleads
payment has the burden of proving it.
Even where the plaintiff must allege non-
payment, the general rule is that the
burden rests on the defendant to prove
payment, rather than on the plaintiff to
prove non-payment.
For sure, private respondent cannot
adequately prove the fact of non-
payment of night shift differentials since
the pertinent employee files, payrolls,
and records remittances and other similar
documents which will show that private
respondent rendered night shift work.
The amounts owed as night shift
differentials are not in his possession but
in the custody and absolute control of
petitioner. By choosing not to fully and
completely disclose information to prove
that it had paid all the night shift
FINAL REVIEWER: LABOR LAW 1
differentials due to private respondent,
petitioner failed to discharge the burden
of proof. (National Semiconductor
Distribution vs. NLRC)
OVERTIME WORK
(On premium and overtime pay for
holiday)
Although it is clear that under contract,
private respondent is entitled to overtime
rate of USD120.00/month, the Court
found him not entitled to overtime pay
because he failed to present any evidence
to prove that he rendered service in
excess of the regular eight working hours
a day. (PCL Shipping vs. U-Ming
Marine)
The SC agrees with the petitioner’s
position that given the discretion granted
to various divisions of the SMC in the
management and operation of their
respective businesses and in the
formulation and implementation of
policies affecting their operations and
their personnel, the “no time card policy”
affecting all of the supervisory
employees of the Beer Division is a valid
exercise of management prerogative.
The said policy allowed Supervising
Guards of the Beer Division not to punch
their time cards. So long as the
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, the Court will uphold
them. (SMC vs. Layoc)
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 FINAL REVIEWER: LABOR LAW 1

Lopez’ claim for overtime pay must be

denied for lack of competent proof to
show his entitlement thereto. While it is
settled in jurisprudence that in cases
involving money claims of employees,
the employer has the burden of proving
that they received their wages and
benefits and that the same were paid in
accordance with law, this does not hold
true as to claims for overtime pay which
require proof of actual work rendered
beyond the normal working hours and
work days. Entitlement to such pay must
be established by proof that said
overtime work was actually performed,
before an employee may avail of said
benefit.

EXERCISE

1. Briefly explain the following: (a) constitutional due process; (b) statutory due
process as imposed by the Labor Code; and (c) contractual due process.

The law is replete with anchors of workers’ rights aimed to protect their
security of tenure. It includes those laid down in the Constitution; enforced
under the Labor Code; and arising from contractual obligations.

Under the Constitution, employment is deemed a protected property right

and the same text prescribes that no person shall be deprived of life, liberty,
or property without due process of law. Hence, the Constitution has laid down
security of tenure and protection to labor as fundamental principles to follow
to protect both workers and employers.

Meanwhile, the Labor Code applies the aforesaid fundamental principles by

requiring procedural and substantive due process to concur in the process of
terminating employment, without which an employer may be held liable.

Finally, some employment relationships are governed by policies and

Page 22 of 26
 FINAL REVIEWER: LABOR LAW 1

contractual agreements. The failure of an employer to follow the prescribed

manner or cause of termination of an employee, contrary to its contract with
the same, may hold the employer liable for failure to follow contractual due
process.

2. How is the level of protection to labor determined?

The Supreme Court, in Fuji Television Network vs. Espiritu, ruled that level of
protection to labor should vary from case to case. 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 must be determined on the basis of nature of work;

qualifications of the employee; and other relevant circumstances such as
educational attainment and other special qualifications.

3. When is there labor-only contracting?

According to Article 106 of the Labor Code, there is “labor-only” contracting

where the person supplying workers to an employer does not have substantial
capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed by such
persons are performing activities which are directly related to the principal
business of such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible to the
workers in the same manner and extent as if the latter were directly employed
by him.

4. What is the two-tiered test in order to determine the true relationship between the
employer and employee? Briefly explain.

Two-tiered test is used when there is no written agreement or terms of

reference to base the employer-employee relationship on; and, due to the
complexity of the relationship based on various positions and responsibilities
given to the worker over the period of his employment, the relationship could
be hard to determine.

The test determines (1) the employer’s power to control the means and
methods by which work is to be accomplished; and (2) the underlying
economic realities of the activity or relationship.

Page 23 of 26
 FINAL REVIEWER: LABOR LAW 1

5. Distinguish security of tenure and management prerogative.

Jurisprudence instructs that while the law acknowledges the plight and
vulnerability of workers and safeguards their security at work, it does not
authorize the oppression or self-destruction of the employer. Management
prerogative, or the power of the employer to determine reasonable policies
and work methods in the workplace, is recognized in law but should not be
abused. It must be tempered with the employee’s rights to security of tenure
by entitling the latter to substantive and procedural due process prior to
termination.

6. What is illegal recruitment?

Any act of canvassing, enlisting, transporting, contracting, hiring, utilizing, or

procuring workers and includes contract services, referring, advertising, or
promising for employment abroad, whether for profit or not, when
undertaken by a non-licensee or non-holder of authority contemplated in
Article 13 (f) of the Labor Code.

Further, illegal recruitment is done by those who, with or without license or

authority, should undertake the prohibited acts laid down in Article 34 of the
Labor Code.

7. When is disability compensable?

Under existing laws, rules, and regulations, the injury or the resulting
disability or death sustained by reason of employment are compensable
regardless of the place where the incident occurred if it can be proven that, at
the time of the contingency, the employee was acting within the scope of
employment and performing an act reasonably necessary or incidental to it.
Some examples are (1) injuries resulting from an accident which happened at
the workplace; (2) injuries resulting from an accident which happened while
the employee is performing his official function; (3) injuries resulting from an
accident which happened outside the workplace but while the employee is
performing an order of his employer; (4) injuries resulting from an accident
which happened while going to or coming from the place of work; (5) injuries
resulting from an accident which happened while ministering to personal
comfort; (6) injuries resulting from an accident while the employee is inside
the company shuttle bus; and (7) injuries resulting from an accident which
occurred during a company sponsored-activity.

8. Distinguish apprentices from learners.

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An apprentice is a person undergoing training for an approved

apprenticeable occupation during an established period assured by an
apprenticeship agreement. Apprenticeable occupations is an occupation
officially endorsed by a tripartite body and approved for apprenticeship by
the TESDA.

Meanwhile, learners are persons hired as trainees in semi-skilled and other

industrial occupations which are non apprenticeable and which may be
learned through practical training on the job in a relatively short period of
time which shall not exceed three months.

9. Who are entitled to overtime, holiday, and service incentive leave pays?

10. What are the leave benefits an employee may receive under the Labor Code and
Special Laws? Explain.

11. How are wages determined? Briefly explain.

12. What is the penalty of double indemnity?

13. What is the principle of non-diminution of benefits?

The principle of non-diminution of benefits is the prohibition to abruptly stop

the grant of a benefit regularly given to employees as a matter of practice or
policy.

The Supreme Court, in Central Azucarera vs. Central Azucarera Labor

Union, held that the rule against diminution of benefits applies if it is shown
that the grant of the benefit is based on an express policy or has ripened into a
practice over a long period of time. Nevertheless, the rule will not apply if the
practice is due to error in the construction or application of a doubtful or
difficult question of law. In case of error, it should be shown that the
correction was done soon after the discovery of the same.

14. When is there wage distortion?

15. May the DOLE Regional Director order and enforce compliance with labor standard
laws even when the individual claim exceeds P5,000? Explain.

16. May an employer validly impose a policy prohibiting its employee from marrying an
employee of a competitor? Explain.

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The right of an employer to prohibit its employees from marrying an

employee of a competitor is a salient management prerogative.

In Duncan vs. Glaxo, the prohibition against personal or marital relationships

with employees of competitor companies was deemed reasonable by the
Supreme Court because relationships of such nature may compromise the
interests of the company. In laying down the assailed company policy, Glaxo
only aimed to protect its interests against the possibility that a competitor
company might gain access to its secrets and procedures. Verily, Glaxo
possessed the right to protect its economic interests.

17. May a 14-yar old child be employed as a domestic helper by and under the direct
responsibility of his father? Explain.

18. Distinguish constructive dismissal from voluntary resignation.

19. May an employer terminate an employment due to disease? Explain.

Under Article 284 of the Labor Code, employers are allowed to terminate
employees found suffering from any disease and whose continued employment
is prohibited by law or is prejudicial to his health and the health of his co-
workers. This is allowed under the Labor Code to protect the economic
interests of the company.

20. What are the substantive and procedural due process requirements in dismissing an
employee from service?

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