I.

GENERAL PRINCIPLES  Unsubstantiated accusations or baseless conclusions of the employer are

insufficient legal justifications to dismiss an employee. The unflinching rule in
A. Basic policy on labor illegal dismissal cases is that the employer bears the burden of proof. [Garza v.
The State shall: Coca-Cola Bottlers Philippines, Inc., G.R. No. 180972 (2014)]

a. Afford protection to labor, Penalty must be commensurate with gravity of offense

b. Promote full employment,
 Not every case of insubordination or willful disobedience by an employee
c. Ensure equal work opportunities regardless of sex, race or creed, and
reasonably deserves the penalty of dismissal. The penalty to be imposed on an
d. Regulate the relations between workers and employers.
erring employee must be commensurate with the gravity of his offense. [Joel
The State shall assure the rights of workers to: Montallana v. La Consolacion College Manila, G.R. No. 208890 (2014)]

a. Self-organization, D. Legal basis under the 1987 Constitution, Civil Code, and Labor Code
b. Collective bargaining,
c. Security of tenure, and 1. 1987 Constitution
d. Just and humane conditions of work.
ART. II: Declaration of Principles and State
Policies
B. Construction in favor of labor
The State shall:
All doubts in the implementation and interpretation of the provisions of this Code, a. Promote full employment, a rising standard of living, and an improved quality
including its implementing rules and regulations, shall be resolved in favor of labor. of life for all [Sec. 9, Art. II]
b. Promote social justice [Sec. 10, Art. II]
C. Burden of proof and quantum of evidence in labor cases c. Affirm labor as a primary social economic force [Sec. 18, Art. II]
Summary on Burden of Proof d. Protect rights of workers and promote their welfare [Sec. 18, Art. II]
e. Recognize the indispensable role of the private sector [Sec. 20, Art. II.]
1. (Employee) Existence of ER-EE Relationship f. Encourage private enterprise [Sec. 20, Art.II.]
2. (Employee) Fact of dismissal g. Provide incentives to needed investments [Sec. 20, Art. II.]
3. (Employer) Validity of Dismissal
EE has burden of proving fact of employment and of dismissal
SEC. 3, par. 1-2, ART. XIII: Social Justice and Human Rights
 Before a case for illegal dismissal can prosper, an employer-employee
relationship must first be established by the employee. [Javier v. Fly Ace Corp., The State shall:
G.R. No. 192558 (2012)] a. Afford full protection to labor, local and overseas, organized and unorganized
 The employee must first establish by substantial evidence the fact of his b. Promote full employment and equality of employment opportunities for all.
dismissal from service. If there is no dismissal, then there can be no question as c. Guarantee the rights (also known as the “Cardinal Labor Rights”) of all
to the legality or illegality thereof. [MZR Industries v. Colambot, G.R. No. workers to:
179001 (2013)] 1. Self-organization
2. Collective bargaining and negotiations
ER has burden of proving valid dismissal 3. Peaceful concerted activities
1
 4. Strike in accordance with law One’s employment is a property right, and the wrongful interference therewith is an
5. Security of tenure, actionable wrong. The right is considered to be property within the protection of the
6. Humane conditions of work constitutional guarantee of due process of law. [Texon Manufacturing v. Millena, G.R.
7. A living wage. No. 141380 (2004)]
8. To participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law
SEC. 3, par. 3-4, ART. XIII: Social Justice and Human Rights The Right to Assemble

The State shall:
a. Promote the principle of shared responsibility between workers and employers
b. Promote the preferential use of voluntary modes in settling disputes
c. Regulate the relations between workers and employers,
d. Recognize the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns to investments, and to expansion and
growth.
Balancing of Interests
 While labor laws should be construed liberally in favor of labor, we must be able to
balance this with the equally important right of the [employer] to due process [Gagui
v. Dejero, G.R. No. 196036 (2013)]
Due Process [Sec. 1, Art. III, 1987 Constitution]
 Under the Labor Code, as amended, the requirements for the lawful dismissal of
an employee by his employer are two-fold: the substantive and the procedural.
Substantive: two requisites must concur: (1) the dismissal must be for a just or
authorized cause; and (2) the employee must be afforded an opportunity to be heard and
to defend himself. [Jeffrey Nacague v. Sulpicio Lines, Inc., G.R. No. 172589 (2010)
Procedural: an opportunity to be heard and to defend oneself must be observed before
an employee may be dismissed [Metro Eye Security v. Salsona, G.R. No. 167367
(2007)]
 Sec. 4, Art. III. No law shall be passed abridging the right of the people peaceably
to assemble and petition the government for redress of grievances.
 Right to peaceably assemble and petition for redress of grievances is, together with
freedom of speech, of expression, and of the press, a right that enjoys primacy in
the realm of constitutional protection. [BAYAN, et al. v. Ermita, G.R. No. 169838,
(2006)].
 Wearing armbands and putting up placards to express one’s views without
violating the rights of third parties, are legal per se and even constitutionally
protected. [Bascon v. CA, G.R. No. 144899 (2004)]
The Right to Form Associations [Sec. 8, Art. III, 1987 Constitution]
The right to form associations shall not be impaired except through a valid exercise of
police power. [Bernas, The 1987 Philippine Constitution: A Comprehensive Reviewer]
Non-impairment of Contracts [Sec. 10, Art. III, 1987 Constitution]
A law which changes the terms of a legal contract between parties, either in the time or
mode or performance, or imposes new conditions, or dispenses with those expressed, or
authorizes for its satisfaction something different from that provided in its terms, is a
law which impairs the obligation of a contract and is null and void. [Clemens v. Nolting,
G.R. No. L-17959 (1922)]
Labor Rights and Protection
 All persons shall have the right to a speedy disposition of their cases before all
judicial, quasi-judicial, or administrative bodies. Sec.16, Art.
 No involuntary servitude in any form shall exist. [Sec. 18 (2), Art. III.]
 Except as a punishment for a crime whereof the party shall have been duly
convicted. [Sec.18 (2), Art. III.]

2. Civil Code
Labor as Property Right
2
Relations between labor and capital
 The relations between capital and labor are not merely contractual. [Art. 1700, CC] “Recruitment and placement" refers to any act of: [CETCHUP-R-CPA]
 They are impressed with public interest that labor contracts: 1. Canvassing, 4. Transporting, 7. Procuring workers
a. Must yield to the common good 2. Enlisting, 5. Utilizing
b. Are subject to special laws on: 3. Contracting, 6. Hiring, or
b.1 Labor unions,
And includes –
b.2 Collective bargaining,
b.3 Strikes and lockouts, 1. Referrals, act of passing along or forwarding of an applicant for employment
b.4 Closed shop, after an initial interview of a selected applicant for employment to a selected
b.5. Wages, employer, placement officer or bureau.
b.6 Working conditions, 2. Contract services,
b.7 Hours of labor; and 3. Promising, or
b.8 Similar subjects 4. Advertising for employment, locally or abroad, whether for profit or not
 Neither capital nor labor shall:
a. Act oppressively against the other, or For illegal recruitment
b. Impair the interest or convenience of the public [Art. 1701, CC]  Recruitment and placement when undertaken by non-licensee or non-holder of
 No contract which practically amounts to involuntary servitude, under any guise authority. Provided, that any such non-licensee or non-holder who, in any manner,
whatsoever, shall be valid. [Art. 1702, CC] offers or promises for a fee employment abroad to two or more persons shall be
deemed so engaged.
3. Labor Code  It shall likewise include the following acts, whether committed by any person,
The State shall: whether a non-licensee, non-holder, licensee or holder of authority: [refer to the
enumeration provider under R.A. No. 10022]
a. Afford protection to labor,
b. Promote full employment,
c. Ensure equal work opportunities regardless of sex, race or creed, and A.1. Illegal recruitment and other prohibited activities
d. Regulate the relations between workers and employers.
a. TYPES AND ELEMENTS
The State shall assure the rights of workers to:
FIRST MAIN TYPE: Simple Illegal Recruitment
a. Self-organization,
b. Collective bargaining, a. Illegal Recruitment of Local Workers
c. Security of tenure, and
d. Just and humane conditions of work.  Two Types Accdg. to the Kind of Offender
The following are the types of illegal recruitment of local workers and the
II. RECRUITMENT AND PLACEMENT OF WORKERS elements for each type:
A. Recruitment and placement (Labor Code and R. A. No. 8042, as amended by 1. By a licensee/holder of authority
R.A. No. 10022)
3
 a) Offender has a valid license or authority required by law to enable one to
lawfully engage in the recruitment and placement of workers;
b) Offender undertakes any of the prohibited acts under Art. 34
2. By a non-licensee/non-holder of authority
a) Offender has no valid license or authority required by law to enable one to
lawfully engage in the recruitment
b) Offender undertakes either –
1) Any activity within the meaning of recruitment and placement under Art. 13(b)
2) Any of the prohibited practices under Art. 34. [Art. 34 and 38]
Profit Immaterial
Recruitment may be "for profit or not." It is the lack of the necessary license or
authority, and not the fact of payment, that renders recruitment illegal. [Sharp v.
Espanol, G.R. No. 155903 (2007)]
b. Illegal Recruitment of Migrant Workers
(Refer to the definition of illegal recruitment)
 Two Types Accdg. to the Offense (Elements)
1. Undertakes any recruitment activity defined in Art. 13(b), LC without a
valid license/authority
Note: Can only be committed by one who has no valid license or authority
to engage in recruitment and placement
2. Commits any of the prohibited acts in Sec. 6, R.A. No. 8042, as amended by
Sec. 5 of R.A.10022
Note: Immaterial whether an offender is a holder or a non-holder of a
license or authority
Contract Substitution that amounts to Illegal Recruitment
 The reduced salaries and employment period in the new employment
contract contradicted the POEA-approved employment contract. By this act
of contract substitution, respondents committed a prohibited practice;
consequently, engaged in illegal recruitment. [PERT/CPM Manpower
Exponent Co. v. Vinuya, G.R. No. 197528 (2012)
SECOND MAIN TYPE: Illegal Recruitment as Economic Sabotage
Two Types Accdg. to Qualifying Circumstance
Illegal recruitment is considered economic sabotage when attended by the ff. qualifying
circumstances:
1) By a syndicate - carried out by a group of 3 or more persons conspiring and
confederating with one another;
2) In large scale - committed against 3 or more persons individually or as a group.
[Art. 38(b), LC; Sec. 6 of R.A. No. 8042 as amended]
b. ILLEGAL RECRUITMENT VS. ESTAFA
 Conviction for Illegal Recruitment NOT a Bar to Conviction for Estafa and vice
versa;
 A person who commits illegal recruitment may be charged and convicted
separately of illegal recruitment under the LC and estafa under Art. 315(2a),
RPC.
 The offense of illegal recruitment is malum prohibitum where the criminal
intent of the accused is not necessary for conviction,
 Estafa is malum in se where the criminal intent of the accused is crucial for
conviction.
 Conviction for offenses under the LC does not bar conviction for offenses
punishable by other laws.
 Conversely, conviction for estafa does not bar a conviction for illegal
recruitment.
 One's acquittal of the crime of estafa will not necessarily result in his acquittal
of the crime of illegal recruitment in large scale, and vice versa. [People v.
Ochoa, G.R. No. 173792 (2011); People v. Ocden, G.R. No. 173198 (2011)]
LIABILITY OF LOCAL RECRUITMENT AGENCY AND FOREIGN
EMPLOYER
4
1. Solidary Liability: Spouses Berot v. Siapno, the Court defined solidary obligation
as one in which each of the debtors is liable for the entire obligation, and each of the
creditors is entitled to demand the satisfaction of the whole obligation from any or
all of the debtors.
Solidary Liability of Agent & Principal
 The liability of the principal/employer and the recruitment/ placement agency
for the claims involving Filipino workers for overseas deployment including
claims for damages is joint and several.
 Note that "solidary obligations" may be used interchangeably with "joint and
several" [Lafarge Cement Phi., Inc. et al vs. Continental Cement Corp. et al,
G.R. No. 155173, November 23, 2004]
2. Theory of Imputed Knowledge
 This is a doctrine in agency stating that the principal is chargeable with and
bound by the knowledge of or notice to his agent received while the agent was
acting as such.
 Notice to the agent is notice to the principal.
 A local employment agency (LEA) is considered the agent of the foreign
employer (FE), the principal.
 Knowledge of the LEA of existing labor and social legislation in the Philippines
is binding on the FE.
 Notice to the LEA of any violation thereof is notice to the FE.
 But, notice to the (FE) principal is NOT notice to the (LEA) agent.
 Notice to the foreign employer, therefore, is not notice to the local employment
agency.
Based on the Discussion of Paredes
1. Social Justice in Labor Law
Calalalng vs. Williams,
 Social justice is neither communism, nor despotism, nor atomism, nor anarchy
BUT:
a. The humanization of laws; and
b. The equalization of social and economic forces by the State.
 So that justice in its rational and objectively secular conception may at least ben
approximated.
Social justice means:
a. The promotion of the welfare of all the people,
b. The adoption by the Government of measures calculated to insure economic stability
of all the competent elements of society –
 through 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;
and
 through the exercise of powers underlying the existence of all governments on
the principle of salus populi est suprema lex
2. Police Power in labor law
A. Police power allows the State to regulate the grant of the right to security of tenure.
[St.Luke’s Medical Center Employee’s Association-AFW v. NLRC, G.R. No. 162053
(2007)]
 Purpose: to safeguard the general welfare of the public.
 Example: Persons who desire to engage in the learned professions may be
required to take an examination as a prerequisite to engaging in the same
B. While the right of workers to security of tenure is guaranteed by the Constitution, its
exercise may be reasonably regulated pursuant to the police powers of the State to
safeguard health, morals, peace, education, order, safety, and the general welfare of the
people.
C. The observance of both periods must be complied with, although a labor union may
take a strike vote and report the same within the statutory cooling-off period. The
5
cooling-off and 7-day strike ban provisions of law constitute a valid exercise of police
power of the State. [National Federation of Sugar Workers v. Ovejera, G.R. No. L-
59743 (1982)]
D. The right to form associations shall not be impaired except through a valid exercise
of police power.
POLICE POWER AS BASIS OF LABOR LAWS
Azucena (2013), citing People vs. Vera Reyes (67 Phil. 190) and 31 Am. Jur., p. 945,
emphasizes that, while social justice is the raison d’etre of labor laws, their basis or
foundation is the police power of the State. It is the power of Government to enact laws,
within constitutional limits, to promote the order, safety, health, morals and general
welfare of society.
It is settled that state legislatures may enact laws for the protection of the safety and
health of employees as an exercise of the police power, and this is true even though such
laws affect, not the health of the community generally, but the health or welfare of
operatives in any given situation.
The concept of police power is well-established in this jurisdiction. It has been defined
as the state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare. As defined, it consists of (1) an
imposition of restraint upon liberty or property, (2) in order to foster the common good.
It is not capable of an exact definition but has been, purposely, veiled in general terms to
underscore its all-comprehensive embrace. (G.R. No. 81958)
The right of every person to pursue a business, occupation, or profession is subject to the
paramount right of the government as a part of its police power to impose such
restrictions and regulations as the protection of the public may require.
The Constitution does not secure the liberty to conduct a business so as to injure the
public at large or any substantial group. The right of reasonable regulation is a
modification of the sweeping generalization that every person has a right to pursue any
lawful calling.
A statute passed to protect labor is a legitimate exercise of police power, although it
incidentally destroys existing contract rights. Contracts regulating relations between
capital and labor ... are not merely contractual, and said labor contracts are impressed
with public interest, and must yield to the common good. (G.R. No. 202275)
And yet, police power itself has to respect the Constitution.
 People vs. Pomar, 46 Phil. 455, says: "But the state, when providing by
legislation for the protection of the public health, the public morals, or the
public safety, is subject to and is controlled by the paramount authority of the
constitution of the state, and will not be permitted to violate rights secured or
guaranteed by that instrument or interfere with the execution of the powers and
rights guaranteed to the people under their law — the constitution."
3. Full Protection of labor
 Potecting the workers from the abuses of some cruel, conscienceless and
dishonest employers,
a. those who make employees casuals and contractuals forever,
b. those who don’t pay the correct wages,
c. those who deny all the benefits provided by law,
d. those dismiss workers illegally,
e. those who bust unions and commit all forms of discriminations and unfair
labor practices.
f. Those who force complainants to sign quitclaims under duress and
intimidation, deceit, and all forms of injustice and oppression.
 Full protection to labor also means protecting the workers from dishonest union
leaders who act as union dealers, but who make money selling away the rights
of the workers. The law protects workers from unions who conspire with
management to commit all forms of injustice against labor.
Important Cases
 SAMEER OVERSEAS vs. JOY C. CABILES
 Serano vs. Galant maritime
 PASEI vs Drilon
 Wilfredo Taganas Case
 Agabon v. National Labor Relations Commission, GR No. 158693, November
17, 2004, 442 SCRA 573, 612.
6
  King of Kings Transport Inc. vs. Santiago O. Mamac, G.R. No. 166208
June 29, 2007
In King of Kings Case
Due process under the Labor Code involves two aspects: first, substantive––the valid
and authorized causes of termination of employment under the Labor Code; and second,
procedural––the manner of dismissal. (Agabon case)
In the present case, the CA affirmed the findings of the labor arbiter and the NLRC
that the termination of employment of respondent was based on a "just cause." This
ruling is not at issue in this case. The question to be determined is whether the
procedural requirements were complied with.
IRR. SEC. 2. Standards of due process; requirements of notice.––In all cases of
termination of employment, the following standards of due process shall be substantially
observed:
I. For termination of employment based on just causes as defined in Article 282 of the
Code:
(a) A written notice served on the employee specifying the ground or grounds for
termination, and giving said employee reasonable opportunity within which to explain
his side.
(b) A hearing or conference during which the employee concerned, with the assistance
of counsel if he so desires is given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him.
(c) 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. 13
In case of termination, the foregoing notices shall be served on the employee’s last
known address.14
To clarify, the following should be considered in terminating the services of employees:
1. This should be construed as a period of at least five (5) calendar days from receipt of
the notice to give the employees an opportunity to study the accusation against
them, consult a union official or lawyer, gather data and evidence, and decide on the
defenses they will raise against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation and defenses, the notice should
contain a detailed narration of the facts and circumstances that will serve as basis for
the charge against the employees. A general description of the charge will not
suffice. Lastly, the notice should specifically mention which company rules, if any,
are violated and/or which among the grounds under Art. 282 is being charged
against the employees.
2. After serving the first notice, the employers should schedule and conduct a hearing
or conference wherein the employees will be given the opportunity to:
A. explain and clarify their defenses to the charge against them;
B. present evidence in support of their defenses; and
C. rebut the evidence presented against them by the management. During the
hearing or conference, the employees are given the chance to defend themselves
personally, with the assistance of a representative or counsel of their choice.
Moreover, this conference or hearing could be used by the parties as an
opportunity to come to an amicable settlement.
3. After determining that termination of employment is justified, the employers shall
serve the employees a written notice of termination indicating that:
A. all circumstances involving the charge against the employees have been
considered; and
B. grounds have been established to justify the severance of their employment.
A verbal appraisal of the charges against an employee does not comply with the first
notice requirement.
 In Pepsi Cola Bottling Co. v. NLRC,18 the Court held that consultations or
conferences are not a substitute for the actual observance of notice and hearing.
 Also, in Loadstar Shipping Co., Inc. v. Mesano, the Court, sanctioning the
employer for disregarding the due process requirements, held that the employee’s
7
 written explanation did not excuse the fact that there was a complete absence of
the first notice.
The reports did not even state a company rule or policy that the employee had allegedly
violated. Likewise, there is no mention of any of the grounds for termination of
employment under Art. 282 of the Labor Code. Thus, KKTI’s "standard" charge sheet is
not sufficient notice to the employee. (King of Kings case)
State – is a community of persons, more or less numerous, permanently occupying a
definite portion of territory, having a government of their own to which the great body
of inhabitants render obedience, and enjoying freedom from external control.
Police Power is the vehicle to achieve social justice. Philosophy behind the law, the
good sought to be achieved, the evil sought to be avoided

For a valid finding of abandonment, these two factors should be present: Five Dimensions of State’s protection to labor
1. the failure to report for work or absence without valid or justifiable reason; and 1. Against employer, recruiters, Traffickers, et.
2. a clear intention to sever employer-employee relationship, with the second as the 2. Against union
more determinative factor which is manifested by overt acts from which it may be 3. Against the government
deduced that the employees has no more intention to work. The intent to discontinue 4. Against unethical lawyers
the employment must be shown by clear proof that it was deliberate and unjustified. 5. Against labor’s own naivete, ignorance, or recklessness
(Agabon)
Considerations in a valid Waiver
1. Intrinsic validity is the consent, was it given freely
The rule thus evolved: where the employer had a valid reason to dismiss an employee 2. Was there a meeting of mind
but did not follow the due process requirement, the dismissal may be upheld but the 3. Was the consent vitiated
employer will be penalized to pay an indemnity to the employee. This became known as 4. Was undue intimidation, misrepresentation
the Wenphil or Belated Due Process Rule. 5. Consideration is grossly disproportionate
6. Not all discrimination is illegal
On January 27, 2000, in Serrano, the rule on the extent of the sanction was changed.
We held that the violation by the employer of the notice requirement in termination for
just or authorized causes was not a denial of due process that will nullify the
termination. However, the dismissal is ineffectual and the employer must pay full
backwages from the time of termination until it is judicially declared that the dismissal
was for a just or authorized cause.

The rationale for the re-examination of the Wenphil doctrine in Serrano was the
significant number of cases involving dismissals without requisite notices. We
concluded that the imposition of penalty by way of damages for violation of the notice
requirement was not serving as a deterrent. Hence, we now required payment of full
backwages from the time of dismissal until the time the Court finds the dismissal was
for a just or authorized cause.