LEGAL ASPECTS in TOURISM & HOSPITALITY

CHAPTER 4
THE ACTUAL WORK PLACE
Introduction
Hospitality and Tourism Management students are expected to have a clear
understanding of some basic concepts of law that they might probably encounter in
their future work industry. It is in this connection that the following concepts of law
affecting employment are discussed:

In a study conducted by Sintayehu, Kassegn, and Sewent (2016), they

said that tourism and hospitality create diversified employment opportunities in
different sectors like accommodation, food and beverage establishments,
transportation services, travel agencies, tour operation companies, natural and
cultural attractions sites. The challenges are poor pay and working conditions,
sexual harassment, discrimination, unequal treatment, low education and
training, undemocratic and rigid corporate culture, seasonality, and political
instability which drastically reduce the number of visitors which in turn brings
high employees' turnover.

Important Concepts of Law Affecting Employment

Labor Law includes all the rules of law governing the conditions under which
persons may work under the control of other persons called employers. Relevant to
this are the concepts of labor standards and labor relations laws governing hours
of work, weekly rest periods, minimum wage rates, unfair labor practices, strikes
and lockouts.

Distinctions between Labor Standards and Labor Relations

Labor Standards prescribe the terms and conditions of employment as
affecting wages or monetary benefits, hours of work, cost of living allowances,
occupational health, safety, and welfare of the workers. On the other hand, Labor
Relations is used to denote all matters arising out of employer-employee
relationship involving the concerted action on the part of the workers which is
usually related with collective bargaining and negotiation process. Labor Relations
is comprehensive to include the former for Labor Standards benefits are proper
bargaining issues, that is, within the domain of Labor Relations.
Social Legislations. Germane to Labor Standards and Labor Relations is the
Social Legislations Law which is governing the employer-employee relationship
while the employee is “not at work” due to hazards arising from employment. It is
actually designed to uplift and protect the welfare of the worker and his family,
because of the hazards beyond his control which immobilize him from working.

Classifications of Labor Laws

Labor Laws may be classified as follows: Protective Legislation; Welfare or
Social Legislation; Diplomatic Legislation; Administrative Legislation; Labor
Relations Legislation; Labor Standards Legislation.
1. Protective Legislation is designed to protect the weaker party to the
employment contract (e.g., Anti-sexual Harassment Laws, Child Labor Laws,
Laws protecting Women Against Discrimination)
2. Welfare or Social Legislation is intended to remove or reduce the insecurity
of the workers while the latter is not at work due to hazards arising from
employment (e.g., SSS Law, GSIS Law, Philhealth/R.A.7875, Workmen's
Compensation Act)
3. Diplomatic Legislation is designed to settle labor disputes through pacific
modes (e.g., laws providing for a conciliation, mediation, grievance
machinery or arbitration)
4. Administrative Legislation creates labor bodies or agencies for
administrative purposes (e.g., POEA, DOLE, NLRC or TESDA)
5. Labor Relations Legislations prescribe minimum requirements relating to
wages, hours of work, cost of living allowances, and other monetary and
welfare benefits including occupational, safety and health standards.
6. Labor Standards Legislations prescribe minimum requirements relating to
wages, hours of work, cost of living allowances, and other monetary and
welfare benefits including occupational, safety, and health standards.
Significant Constitutional Provisions Touching Work
Section 3, Art XIII of the 1987 Constitution (Protection to Labor Clause)
states that:
“The State shall afford full protection to labor, local, and overseas, organized
and unorganized, and promote full employment and equality of
employment opportunities for all.”
It has been a misconception that owners of businesses such in the hospitality
industry are in control of everything, to the extent that employees are being
extremely hesitant to inquire the reasons for doing things... that the bosses are always
correct in policy and decision-making processes leaving no choice for the employees
to do except to follow orders. The 1987 Constitution is very emphatic on the role of
the State to safeguard the labor forces against injustices and abuses of powers and
authority, imposition of policy in accordance with the whims and caprices of the
employers only. It guarantees full protection to labor in consonance with the legal
principle that “Those who are less privileged in life should have more privileges
in law.” It is afforded to place the workingmen on an equal footing with management
with all its powers and influence in negotiating for the advancement of his interest
and the defense of his rights.
Meanwhile, the Constitution also mandates the State to provide full
employment to all, meaning that those who want to work at the prevailing rates of
pay are able to find work without undue difficulty. It covers a situation under which
there are more job openings than there are job applicants. The fulfillment by the
government to provide adequate job and work opportunities abroad and locally is
very evident in the field of hospitality industry: it ushers economic gains; promotes
social and economic security; promotes human dignity; antidote against
revolutionary ideologies, regulates employer's discriminatory practices. The
government through the Department of Tourism highlighting its slogan “It's More
Fun in the Philippines” is doing great in promoting the tourism of the country. Good
Tourism would mean job opportunities to all.
(Note: There is unemployment when there is an involuntary idleness on the
part of an employee who is able and willing to work but could hardly find one, while
there is underemployment when a person is presently employed in work experience
that does not make use of his previous training, education and acquired expertise.)
Furthermore, Section 3, Art XIII of the 1987 Constitution also states that:
 “The State shall guarantee' the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall
also participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law.”
The law clearly enumerated the rights which the employees may sought with
in the event that their employers would abuse their power, whims, and caprices in
the policy and decision-making processes in the management of business.
Employees should not be denied of their rights to form and join an organization
that could help them grow as a person and professionals; collective bargaining and
negotiation power should serve as a mechanism or tool of the employees whenever
they feel that they were being deprived of something that should have been intended
for them; peaceful concerted activities, including the right to strike in accordance
with law can also be exercised by the employees in order that their voices can be
properly heard; employees should enjoy security of tenure... that their employment
contract should not be terminated hastily and for flimsy reasons; conducive work
environment and humane conditions of work should be provided to the employees
so that they can better perform the duties assigned to them; living wage should be
provided to motivate the workers to work harder.
The provision of law, Section 3, Art XIII of the 1987 Constitution also states
that:
“The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.”
Symbiotic relationship is being observed in the hospitality world. The
management deserves loyalty from its employees and so with the employees from
the management. In case of dispute, a voluntary mode in settling disputes should be
observed.
Also stated in Section 3, Art XIII of the 1987 Constitution
“The State shall regulate the relations between workers and employer,
recognizing the right of labor to its just share in the fruits of production and
 the right of enterprises to reasonable returns on investments, and to expansion
and growth.”
Although the employers were given due regard by law when it comes to their
rights and privileges, the management's right to the reasonable returns of investment,
and to expansion and growth, should never be set aside. Thus, the employees cannot
hinder the management in hiring additional employees for the operation of the
employees. Management prerogative is inherently given to the management on the
said instances.

Relationship Determinants Between Employer and Employee

The relationship between employer and employee may be established using
the following determinants:
1. manner of selection and engagement of the putative employee;
2. mode of payment of wages;
3. presence of or absence of the power of dismissal;
4. presence or absence of a power to control the putative employee's conduct.

Nature of the Relationship between Employer and Employee

The New Civil Code (Article 1315) provides that the rights and obligations
arising from employee-employer relationship are contractual in character. In that
connection, the parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all other consequences which, according to their
nature, may be in keeping with good faith, usage, and law.
Article 1700 however provides that 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. Such contracts are subject to the special
laws on labor unions, collective bargaining, strikes and lockouts, closed shop,
wages, working conditions, hours of labor and similar subjects.
Classifications of the Employees
Employees may be classified as follows: Special Workers; Casual
Employees; Specific Project or Seasonal Employees; Probationary; Regular;
Managerial.
Article 58 (b) of the Labor Code of the Philippines or PD 442 defines
Apprentice as a worker who is covered by a written apprenticeship agreement with
an individual employer or any of the entitled recognized under the law. Article 59 of
the same Code provides that to qualify as an Apprentice, a person should be: (a) at
least 14 years of age; (b) possesses vocational aptitude and capacity for appropriate
tests; and (c) possesses the ability to comprehend and follow oral and written
instructions. It must be noted that only employers in highly technical industries may
enter into apprenticeship agreement or otherwise employ apprentices only in
apprenticeable trades and occupations approved by the Secretary of Labor and
Employment. Sec 1 (j), Rule VI, Book II, Rules Implementing the Labor Code
defines Highly Technical Industry as a trade, business, enterprise, industry, or
other activity which utilizes the application of advance technology. Apprenticeable
Trades and Occupations as defined by Art 57 (b) of refer to any trade, form of
employment or occupation which requires more than three (3) months of practical
training on the job with compulsory related theoretical instructions. Apparently,
students taking up OJT under the International Hospitality Management program
may not be considered under this classification.
Learners, on the other hand, are persons hired as trainees in semi-skilled and
other industrial occupations which are non-apprenticeable and may be learned
through on-the-job trainings in a relatively short period of time that shall not exceed
three (3) months (Art 73, Labor Code of the Philippines). It seems that most of the
skills being developed among the students of the Hospitality Management may fall
under Learnership. Cooking, bartending, cake decorating, bed making among other
may be learned through the on-the-job trainings in a relatively short period of time.
Article 79 of the Labor Code of the Philippines provides the definition of
Handicapped Workers. Accordingly, they are those who are impaired either by
age, physical or mental deficiency, or injury.
Types of Employment
The different types of employment may be determined by their nature and/or
the existence of activities that they are compelled to do so. The employer creates the
terms and conditions of the work based on the existing laws and regulations in the
Philippines. The following are the different types of employment in the Philippines:
1. Regular or Permanent Employment
2. Term or Fixed Employment
3. Project Employment
4. Seasonal Employment
5. Casual Employment
Regular Employees are persons who perform activities, which are usually
necessary or desirable in the usual business or trade of the employer. Any employee
who has rendered at least one (1) year of service, whether such service is continuous
or broken, will be considered a regular employee with respect to the activity in which
he is employed, and his employment will continue while such activity exists. They
enjoy the benefit of security of tenure provided by the Philippine Constitution and
cannot be terminated for causes other than those provided by law and only after due
process is given to them.
Term or Fixed Term Employment. This type of employment is present when
the service of the employee to the employer is for a definite period of time which in
effect must be terminated upon the expiration or end of the said period. The
employment of this type is measured by the commencement and termination of the
employment relationship and not by the activities the employee is expected to do.
The fixed-term employment must be highly regulated subject to the following
conditions: (1) The parties must knowingly and voluntarily agree on the contract
without any vices of consent, not attended by any force, duress, or improper pressure.
(2). It must be established the dealing with each other of the employer and the
employee on more or less equal terms with no dominance exercised by the former
over the latter.
There is a project employment when one employee is hired for a specific
undertaking in which employment duration is specified by the scope of work and/or
length of the project. The status of a regular employment may be achieved by a
project employee when there is a continuous rehiring of same employee after a
project has been completed or when the tasks, they perform are vital, necessary, and
indispensable to the usual business or trade of the employer.
 The work to be performed in a seasonal employment is only for a certain time
or season of the year and the employment is only for that specific duration. This kind
of employment is usually encountered in retail, tourism, hospitality, and other related
industries as a way of augmentation of workforce to cover for the demand during
peak season. It must be noted that there are two seasons in the hospitality industry,
to wit: Peak Season and Lean Season. Demands for workers in the hospitality
industry increase during peak seasons (Example: Summer for beaches; Christmas
vacation for December and January) and it decrease during Lean Season. Usually,
the regular seasonal employees are called to work during the peak seasons and asked
to temporarily stop working during off seasons. While the employees are not
working, they are considered on Leave of Absence without pay until they re-assume
their work.
Casual employment pertains to the kind of employment that is not usually
necessary or primarily related to the employer's trade. The obligation of the
employer over the employees terminates as soon as the contract expires. It is
important to discuss with the employee the specific period of employment at the time
that they assume their work. One (1) year of service whether continuous or not is
tantamount to regularization of employment with respect to the activity they are
employed.

Other Types of Employees

A person can be considered as an employee with managerial position after
meeting the following conditions: (1) He is primarily managing the establishment in
which he is employed or of a department or subdivision thereof; (2) He customarily
and regularly directs the work of two or more employees therein; and (3) He has the
authority to hire or fire other employees of lower rank. Their suggestions and
recommendations as to the hiring and firing and promotion or other change of status
of other employees are given particular weight.
The Implementing Rules of the Labor Code has defined domestic servants
as persons in the personal service of another are those who perform services in the
employer's home which are usually necessary or desirable for the maintenance and
employment thereof, or minister to the personal comfort, convenience, or safety of
the employer as well as the members of his employer's household.
 The field personnel are non-agricultural employees who regularly perform
their duties away from 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.

The Workers' Rights

The 1987 Constitution has provided the following rights of the employees:
1. Right to self-organization
2. Right to collective bargaining
3. Right to security of tenure
4. Right to just and humane conditions of work. This refers to fair wages and
equal remuneration for work of equal value, safe and healthy working
conditions, equal opportunity to promotion and rest, leisure, and reasonable
limitation of working hours, such as:
4.1The right to regular working hours
4.2The right to regular working days
4.3The right to overtime work
4.4The right to weekly rest period
4.5The right to additional compensation on scheduled rest day/special
holiday
4.6The right to compensation for holiday work; and
4.7The right to hospitalization
5. Right to peaceful concerted activities
6. Right to strike
7. Right to a living wage
8. Right to participate in policy and decision-making processes
9. Right to just share in the fruits of production
The Right to Self-Organization (https://blr.dole.gov.ph/2014/12/11) is the
right of both workers and employees to form, join or assist unions, organizations, or
associations for purposes of collective bargaining and negotiation and for mutual
aid and protection. The right to self-organization also deals with the right to engage
in peaceful concerted activities or to participate in policy and decision-making
processes affecting their rights and benefits.
The importance of the effective recognition of the Right to Collective
Bargaining (http://www.ilo.org/empent/areas) was affirmed by the 1998 ILO
Declaration of Fundamental Principles and Rights at Work. The workers right to
bargain with employers is important element of the right to association. The workers
and employers can discuss their relations particularly the terms and conditions of the
work through this voluntary process of collective bargaining. The employees can
participate in the collective bargaining through a representation from their
organizations or unions, or if none, they can have representatives designated
voluntarily by the workers. The effectiveness of the process is dependent on the good
faith by all parties involved.
Security of tenure is a legal guarantee to hold an office except in exceptional
and specified circumstances. As held in the case of De Guzman vs. COMELEC,
G.R.No.129118, July 19, 2000, the constitutional guarantee of security of tenure
means that an employee cannot be dismissed from the service for causes other than
those provided by law and only after due process is accorded to employee. It is
settled in the 1996 case of Agoy vs. NLRC, 112096, that even if probationary
employees do not enjoy a status of permanency, they are still accorded with the
constitutional protection of security of tenure. This means that they may only be
terminated for just cause or when they otherwise fail to qualify as regular employees
in accordance with reasonable standards made known to them by the employer at
the time of their engagement.
Protected concerted activity is a legal principle covered by the freedom of
association. It defines the activities that the workers may participate without fear. of
retaliation from the employer.
Strike refers to the temporary stoppage of work due to the refusal of the
employees to work as a way of protest to the decision of the employers on matters
affecting the employees. The right to strike is protected by the National Labor
Relations although it does not cover illegal strikes. Whether a strike is legal rest on
the purpose of the strike, whether the collective bargaining agreement comprises a
“no-strike” clause, and the conduct of the strikers (https://www.nolo.com/legal-
encyclopedia/strikes.html). It should be noted that the strike is considered legal if
the conduct is for economic reasons or to protect an unfair labor practice by the
employer.
In one study published by British Journal of Industrial Relations
(DOI:1111/1467-8543.00252), it was argued that the efficiency and stability of a
firm and the employees’ satisfaction is achievable through the participatory
decision-making rules. According to this study, the employees should take part in
establishing the rules; otherwise, managers will make rules that allow them to retain
control of the key points in the decision-making process.
The employees also have the right to the just share in the fruits of
employments' production. The Section 2 of R.A. 6971 (An Act to Encourage
Productivity and Maintain Industrial Peace by Providing Incentives to Both Labor
and Capital) has specifically provided that “It is the declared policy of the State to
encourage higher levels of productivity, maintain industrial peace and harmony and
promote the principle of shared responsibility in the relations between workers and
employers, recognizing the right of labor to its just share in the fruits of production
and the right of business enterprises to reasonable returns on investments and to
expansion and growth, and accordingly to provide corresponding incentives to both
labor and capital for undertaking voluntary programs to ensure greater sharing by
the workers in the fruits of their labor.”

Employer's Rights
1. Reasonable return on investment
2. Expansion and growth
3. Exercise management prerogative
3.1. to lay down and execute management policies;
3.2. to hire;
3.3. to transfer;
3.4. to discipline;
3.5. to dismiss;
3.6. 3.6.Retrenchment. It exists during the period of business recession, industrial
depression, or seasonal fluctuations;
3.7. To declare redundancy. It exists where the services of an employee are in
excess of what is reasonably demanded by the actual requirements of the
enterprise;
3.8. To cease operations. The management may cease business operations or
undertaking even if it is not suffering from serious business losses or financial
reverses as long as he pays his employees their termination pay in the amount
corresponding to their length of service;
3.9. To sell the company;
3.10. To abolish positions.
Termination of Employer-Employee Relationship
An employer cannot terminate the services of an employee except for just or
authorized causes as provided by Articles 279, 282,283,and 284 of the Labor Code
of the Philippines.
On the other hand, the employee may initiate the termination of employment
contract even without justifiable cause, provided that a written notice shall be served
to the employer (1) month in advance. However, he may terminate employment
relationship without serving notice on the employer for just causes provided in Art
285 of the Labor Code.
Just Causes. These are modes of termination of employment contract
imputable to the employees’ own acts or omission. For any of these grounds to
warrant the termination of employee's contract, the elements of graveness and
seriousness must be present. Minor violations or incursions would not suffice. The
following are just causes for the termination of employee's contract:
1. Serious Misconduct or Willful Disobedience by the employee of the lawful
orders of the employer or representative in connection with his work;
2. Gross Habitual Neglect by the employee of his duties.
3. Fraud or Willful Breach by the employee of the trust reposed in him by his
employer or duly authorized representative.
4. Commission of a Crime or offense against the person of his employer or any
immediate member of his family and his duly authorized representative.
5. Other Causes Analogous to the foregoing.

Authorized Causes
The causes for the termination of employment contract should not be imputed
neither of the employees and employers. The termination of employment contract is
allowed by law since it recognizes the right of employers to legitimately decrease
labor costs and other circumstances inevitable in the management of business. The
following are the authorized causes in the termination of employment contract:
1. Redundancy. It exists when the services of an employee are in excess of what
is reasonably demanded by the actual requirements of the enterprise.
2. Retrenchment. It means reduction in the workforce to forestall business
losses or stop the hemorrhaging of capital.
3. Installation of Labor-Saving Device
 4. Closure or Cessation of operation of the establishment or undertaking due to
financial losses.

Some Labor Code Provisions Concerning Hours of Work, Rest Periods,

Holiday Pay, Leaves and Service Charges
Art 83. Normal Hours of Work. The normal hours of work of any employee
shall not exceed eight (8) hours a day.
Article 84. Hours Worked. It shall include: (a) at all times during which an
employee is required to be on duty or be at a prescribed workplace, and (b) at all
times during which an employee is suffered or permitted to work.
Rest period of short duration working hours shall be counted as hours worked.
Article 85. It is the duty of every employer to give his employees regardless
of sex, not less than 60 minutes time off for their regular meals. These meal periods
are not, however, compensable hours of work. The regular meals are breakfast,
lunch, and supper. Coffee breaks or rest periods running from five (5) to twenty (20)
minutes are not included; they are considered as compensable working time.
Article 86. Night Shift Differential. Every employee shall be paid a night
shift differential or not less than ten percent (10%) of his regular wage for each hour
of work performed between ten o'clock in the evening and six o'clock in the morning.
All employees are entitled to night shift differential pay except the following:
a. Government employees including those employed in government-
owned or controlled corporations with original charters;
b. Employees of retail and service establishment regularly employing not
more than five (5) workers;
c. Domestic helpers;
d. Persons in the personal service of another;
e. Managerial employees;
f. Officers and members of a managerial staff;
g. Field personnel and other employees whose time and performance are
unsupervised by the employer;
h. Workers who are engaged on task or contract basis, purely commission
basis, or those who are paid with a fixed amount for performing work
irrespective of the time consumed in the performance thereof (Sec 1,
Rule II, Book III, Rules Implementing the Labor Code)' and,
 i. Members of the family of the employer who are dependent upon him
for support (Article 82 of the Family Code).
Article 87. Overtime Work. Work may be performed beyond eight (8) hours
a day provided that the employee is paid for the overtime work, an additional
compensation equivalent to his regular wage plus at least twenty five percent (25%)
thereof. Work performed beyond eight hours on a holiday or rest day shall be paid
an additional compensation equivalent to the rate of the first eight hours on a holiday
or rest day plus at least thirty percent (30%) thereof.
Article 96. Service Charges. All service charges collected by the hotels,
restaurants and similar establishments shall be distributed at the rate of eight-five
(85%) for all covered employees and fifteen percent (15%) for the management. The
share of employees shall be equally distributed among them. In case the service
charge is abolished, the share of the covered employees shall be considered
integrated in their wages.

Anti-Sexual Harassment Act of 1995

The authors believe that there is really a necessity to include the Anti-Sexual
Harassment Act in the discussion of this book since the hospitality industry and other
workplaces are prone to different sexual harassment cases. This book would at least
give the future practitioners basic knowledge of the mentioned law.
Act Declaring Sexual Harassment Unlawful. RA 7877 otherwise known as
the Anti-Sexual Harassment Act of 1995 declares sexual harassment unlawful in the
employment, educator or training environment, and for other purposes.
State Policy Pertaining to Sexual Harassment Cases. Sec 2 of RA 7877
provides that the State shall value the dignity of every individual, enhance the
development of its human resources, guarantee full respect for human rights, and
uphold the dignity of workers, employees, applicants for employment, and students
of those undergoing training, instruction, or education. Towards this end, all forms
of sexual harassment in the employment are hereby declared unlawful.
Query: Jerica, job applicant in a prestigious hotel located in Malate
Manila asked your legal opinion about her experience with Jerry, the manager
of the said hotel. Accordingly, Jerry removed his upper garment for a change
outfit, and it was done in front of Jerica. Being a conservative woman, Jerica
felt that something went wrong. Decide the case.
 Work, Education of Training-related Sexual Harassment, Defined. Sec 3
of RA 7877 provides that this is committed by an employee, manager, supervisor,
agent of the employer, teacher, instructor, professor, coach, trainor, or any other
person who, having authority, influence or moral ascendancy over another in a work
or training or education environment, demands, requests or otherwise requires any
sexual favor from the other, regardless of whether the demand, request or
requirement for submission is accepted by the object of the said Act.
Query: Can a man who has been asked for a sexual favor by his female
boss in exchange of promotion seek the protection of RA 7877?

Requisites of Sexual Harassment in a Work-Related or Employment

Environment
RA 7877 also provides that the following must be present in order for an act
in a work-related or employment environment be considered as sexual harassment:
1. The sexual favor is made as a condition in the hiring or in the employment, re-
employment or continued employment of said individual, or in granting said
individual favorable compensation, terms, conditions, promotions, or privileges; or
the refusal to grant the sexual favor result in limiting, segregating or classifying the
employee which in a way would discriminate, deprive or diminish employment
opportunities or otherwise adversely affect said employees; 2. The said acts would
impair the employees' right or privileges under existing labor laws, or; 3. The said
acts would result in an intimidating, hostile, or offensive environment for the
employee.
In an education or training environment, sexual harassment is committed:
against one who is under the care, custody or supervision of the offender; against
one whose education, training, apprenticeship or tutorship is entrusted to the
offender; when the sexual favor is made a condition to the giving of a passing grade,
or the granting of honors and scholarships, or the payment of a stipend, allowance
or other benefits, privileges or consideration; or when the sexual advances result in
an intimidating, hostile or offensive environment for the student, trainee or
apprentice.
It should be noted that any person who directs or induces another to commit
any act of sexual harassment, or who cooperates in the commission thereof by
another, without which it would not have been committed, shall also be held liable
under RA 7877.
Query: Can a GRO (Guest Relations Officer) subject his/her clientele
under the RA7877 on the ground that the latter asked for extra service in
exchange of extra pay?
Grievance Machinery. RA 7877 also provides that in case of work-related
environment, the committee shall be composed of at least one (1) representative each
from the management, union, if any the employees from the supervisory rank, and
from the rank-and-file employees.
In case of the educational or training institution, the committee shall be
composed of at least one (1) representative from the administration, the trainors,
teachers, instructors, professors or coaches and students or trainees, as the case may
be.

Liability of the Employer, Head of Office, Educational or Training Institution

According to Section 5 of RA 7877, the employer or head of office,
educational training institution shall be solidary liable for damage arising from the
acts of sexual harassment committed in the employment, education or training
environment if the employer or head of office, educational or training institution is
informed of such acts by the offended party and no immediate action is taken
thereon.
Query: What is the intention of the law in making the employer
solidary liable for the act done by its employees?
Victims Not Precluded from Filing a Separate Action for Damages.
Section 6, RA 7877 states that the victims of sexual harassment in a work, education
or training-related cases are not precluded to file a separate or independent action or
damages and other affirmative relief.
Penalties for the Commission of Crime. RA 7877, Sec 7 provides that any
person who violates the provisions of the law shall, upon conviction, be penalized
by imprisonment of not less than one (1) month nor more than six (6) months, or a
fine of not less than ten thousand pesos (10,000) nor more than twenty thousand
pesos (20,000), or both such fine and imprisonment at the discretion of the court.
 Prescription Period. The prescription period under the law is three (3) years.
The undertaking of Ram (2015) has shown that bullying, violence, and
sexual harassment have negative impacts on employees which include
intentions to leave and psychological upset. It was revealed on the said study
that the personal negative feelings and attitudes contribute to the negative
organizational performance indicators, such as high staff turnover rate and
low profitability. In addition, the high prevalence of violence creates a
negative image for the tourism and hospitality industry in general.

CHAPTER 3
UNDERSTANDING CONTRACTS AND OBLIGATIONS AFFECTING THE TOURISM
AND HOSPITALITY SECTORS
Introduction
Managing a business is not an easy task. It involves different kinds of obligations that
should be given full attention by both the debtors and creditors considering the effects that it may
give to them as contracting parties.
In three or four years from now, the students of the hospitality management may be
acquainted with different transactions involving obligations and contracts once they are already in
the actual field of the hospitality world. Hence, the authors are convinced that these students should
be briefed as early as now, the basic principles of obligations and contracts.

Obligation Defined
Article 1156 of the Civil Code of the Philippines provides that an obligation is a juridical
necessity to give, to do or not to do.
Generally, a person who has an obligation arising from whatever sources should comply
with its corresponding requirements considering the damage it may produce to one of the
contracting parties or even to a third person, if not complied. Non-compliance of what is demanded
by the obligation may give the aggrieved party different courses of action such as demand for
payment and damages.
There are three kinds of obligation under the law, to wit: obligation to give, to do, or not
to do.
In an obligation to give, the debtor is obliged to deliver the movable or immovable thing
to the creditor. Example: Obligation to deliver the thing in sale, deposit, pledge, donation
 All kinds of works or services, whether physical or mental is covered by the obligation to
do. Example: Contract for events organizing, professional services like painting, modeling,
singing
The obligation not to do means refraining from doing some acts like the obligations of a
building proprietor to refrain from committing nuisance through noise, offensive odor, smoke,
heat, etc.

Elements of Obligation
The following elements should concur in order to determine the obligation of any person:
active subject; passive subject; prestation or object; efficient cause.
1. Active Subject. It is the one who is demanding the performance of the obligation. It is he
who in his favor the obligation is constituted, established, or created. He is called the
creditor or obligee.
2. Passive Subject. The one bound to perform the presentation to give, to do or not to do. He
is called the debtor or obligor.
3. Presentation or Object. It is the subject matter of the obligation which has an economic
value or susceptible of pecuniary substitution in case of noncompliance.
4. Efficient Cause. It is the juridical tie or vinculum by virtue of which the debtor has become
bound to perform the presentation.

Kinds of Obligation as to Judicial Enforceability

Obligation may be classified according to its judicial enforceability, to wit: civil
obligation, natural obligation, moral obligation.
1. Civil Obligation. This is an obligation, which if not fulfilled when it becomes due and
demandable, may be enforced in court through action.
Example
A promissory note was executed by Luigi in favor of Mario after the latter had given
a loan of money to the former. The note had become due and demandable. Mario can go
to court for the collection of the amount as the obligation since it is a civil obligation
enforceable by the court.
2. Natural Obligation. This is a special kind of obligation which cannot be enforced in court,
but which authorizes the retention of the voluntary payment or performance made by the
debtor.
Example
A promissory note was executed by Penduko in favor of Pedro because of the money
that the former lent to the latter. Penduko committed to pay his obligation to Pedro within
the period of 6 months. Twelve years had passed without Penduko having enforced the
note. The obligations already prescribed under Article 1144 which means that the note
 cannot be enforced. On the contrary, Penduko can still voluntarily pay Pedro despite the
prescription. Such act is still considered legal.
3. Moral Obligation. It arises not from the positive law but from the moral law developed
by the church and not enforceable by the court.
Example
The obligation of the church to express its views issues affecting morality, such as
RH Bill, Divorce Bill. The obligation to have title by some religious sects in the Philippines;
abstinence and fasting imposed upon Catholics during Good Fridays.

Kinds of Obligation as to Number of Persons Bound to Perform

Obligation may also be classified according to the number of persons bound to perform,
such as: Unilateral Obligation and Bilateral Obligation.
1. Unilateral Obligation. It is a kind of obligation in which only one of the parties is bound
to fulfill a prestation.
Example:
Parents have unilateral obligation to provide the basic necessity of their children,
such as: food, shelter, medicine and education.
2. Bilateral Obligation. This is a kind of obligation in which both parties are bound to
perform a part in the obligation.
Example:
In sale, the customers are obliged to pay for any food that they ordered. On the
other hand, the restaurant is obliged to deliver the food to the customers. The obligations
of the parties here are reciprocal. They are dependent to each other.

Sources of Obligation
Article 1157 of the Civil Code of the Philippines enumerates the sources of obligation, to
wit: a. Law; b. Contracts; c. Quasi-contracts; d. Delicts or acts or omissions punishable by
law; e. Quasi-delicts.
1. Obligations Arising from Law. The obligation of a party to fulfill an obligation arises
from the law itself, rules and regulations, jurisprudence. Example: It is the duty of the
spouses to render mutual support and respect to one another; the taxpayer's duty to pay
taxes.
2. Obligations Arising from Contracts. This is the duty of the party to fulfill his undertaking
in the contract such as the payment for the breakage of utensils used in the catering services
as stipulated in the contract.
3. Obligations Arising from Quasi-contracts. It is a juridical relation which arises from a
lawful, voluntary, and unilateral act or acts executed by somebody for the benefit of another
 and for which the former must be indemnified to the end and that no one shall be enriched
or benefited at the expense of another. It is a kind of contract created without the consent
of one party but whose missing consent is given by the law. Example: Duty of the recipient
to return what was delivered to him by mistake (solutio indebiti).
4. Obligations arising from Delicts or Crimes. The penal provision of the law specifically
provides the obligation to be done by the culprit on his/ her victim. Example: Duty of the
culprit to pay actual damages for causing the death of a person.
5. Obligations arising from Quasi-delict or Tort. Example: Duty of the tortfeasor to pay
damages for injuries or damages due to his fault, omission, or negligence.

Diligence Needed
Article 1163 of the Civil Code of the Philippines provides that every person with obligation
to give something is also obliged to take care of it with the proper diligence of a good father of a
family, unless the law or the stipulation of the parties requires another standard of care.
Note:
A good father does not abandon his family; he is always ready to provide their
needs and protect them at all times.
Other Important Civil Code Provisions Necessary in the Conduct of Hospitality Business
Article 1169, those who are obliged to deliver or to do something incur in delay from the
time they oblige judicially or extra-judicially demands from them the fulfillment of their
obligation. However, the demand by the creditor shall not be necessary in order that delay may
exist:
1. When the obligation or the law expressly so declines; and
2. When from the nature and the circumstances of the obligation, it appears that the
designation of the time when the thing is to be delivered or the service is to be rendered
was controlling motive for the establishment of the contract; or
3. When the demand would be useless, as when the obligor has rendered it beyond his power
to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply one is not
ready to comply in a proper manner with what is incumbent upon him. From the moment one of
the parties fulfills his obligation, delay by other begins.
Article 1170 provides that those who in the performance of their obligation are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for
damages.
According to Article 1171, the responsibility arising from fraud is demandable in all
obligations. Any waiver of an action for future fraud is void.
Modes of Extinguishing Obligation
An obligation may be extinguished through any of the following modes: (a) payment or
performance; (b) loss of the thing due; (c) condonation or remission of the debt; (d) confusion
or merger of the rights of the creditor and debtor; (e) compensation; (f) novation; (g)
annulment; (h) rescission; (i) fulfillment of the resolutory condition; (j) prescription.
In a fine dining restaurant, the obligation of the customer to the management who served
them sumptuous food shall be extinguished upon payment by the customer of the exact amount
of the food consumed; obligation by the entertainer to the events manager may be extinguished
upon the performance of the obligation for which the entertainer was commissioned.
Obligation arising from a contract may also be extinguished upon the loss of the thing due.
Article 1189 par. 2 explained the meaning of the term “loss.” It is understood that the thing is lost
when it perishes, or goes out of commerce, or disappears in such a way that its existence is
unknown, or it cannot be recovered.” The wedding coordinator shall be absolved from any liability
to spouses, if the prior to happening of the fortuitous event, the wedding coordinator was in good
faith.
Condonation or remission pertains to the act of liberality on the part of the creditor
wherein she/he forgives or remits a debt. Even if the proprietor is indebted to his supplier of beef
and chicken, the obligation shall be extinguished if the supplier will gratuitously give the amount
in issue to the proprietor as advance gift for the latter's continuous patronage to its supplies.
Article 1275 of the Civil Code of the Philippines provides that the obligation is
extinguished from the time the characters of the creditor and debtor are merged in the same person.
Be it noted that the merging or convergence of the rights of the creditor and a debtor in one and in
the same person makes the obligation extinguished considering that the right of one over the other
can no longer be exactly determined.
Compensation as a means of extinguishing an obligation is the offsetting of the respective
obligations of two persons who stand as principal creditors and debtors of each other, resulting to
the extinguishment of their obligations to their concurrent amount. Example: MJJs Food
Corporation is indebted to its oil supplier amounting to Php 80,000. Two months thereafter, the oil
supplier borrowed Php 30,000 from MJJs Food Corporation to which the latter adhered. The effect
of the transaction would have been the offsetting of the indebtedness of MJJs Food Corporation to
the oil supplier up to the extent of Php 50,000 only.
Novation pertains to the change or modification of an obligation by another, resulting to
the extinguishment of an obligation. The following are the requisites for valid novation: There
must be a previous valid obligation; there must be an agreement by the parties to extinguish
or modify the old obligation; the validity of the new obligation. Example: An event organizer
commissioned your services as performer in two wedding occasions scheduled in June. The event
organizer gave you an advance payment of Php 10,000 for the said occasions. A day before the
event, the event organizer informed you that the two wedding occasions wherein you were
commissioned to perform will no longer be viable to happen. In lieu of the cancelled occasions,
the event organizer gave you another five more scheduled dates of wedding for the month of July.
Instead of giving back to the event organizer the amount of Php 10,000 which earlier she gave to
you, the same amount can be considered as an advance payment for the five wedding occasions
scheduled for the month of July wherein you are also set to perform.

Contract Defined
It is the meeting of the minds between two persons whereby one binds himself, with respect
to the others, to give something or to render some service.

Essential Elements of a Contract

The following are the essential elements of a contract:
a. consent; b. object certain; and c. cause
Consent signifies the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. It comprises the following elements: a. concurrence of the
offer and the acceptance (expressly stated in the Civil Code); b. contracting parties must
possess the necessary legal capacity (implied); c. consent must be intelligent, free,
spontaneous, and real (implied).
It is the meeting of the minds of the contracting parties. There should be an acceptance and
an offer to manifest consent. The offer must be certain and, whether the acceptance is expressed
or implied, it must be absolute. The offeror may fix the details of the offer including the date, time,
place, and mode of acceptance, in which all must be complied with.
It must be noted that the following are incapacitated to give consent: 1. Minors; 2. Insane
or demented; 3. Deaf-mutes who do not know how to write; 4. Married women of age in cases
specified by law; 5. Civil interdicted persons; 6. Incompetents under guardianship;

Vices of Consent
The following are vices of consent which can produce direct effect on the contract entered
into between parties: a. violence; b. intimidation; c. mistake; d. fraud; e. undue influence.
For a violence to be considered as a vice that could vitiate consent, it must be serious or
irresistible. The contract would have been a void contract if the consent given by one of the parties
was obtained only because of the use of violence- meaning that there is a physical pain.
The use of intimidation by one of the parties to the contract to obtain the consent of the
other party can vitiate the consent if there is an infliction of mental pain. There is no chance that a
contract can be perfected if the intimidation is very evident. A threat to a family or friends might
be considered as a form of intimidation.
 Mistake may be attributed to the nature of human to commit error whether in fact or in
law. Mistake of fact may arise if there is an ignorance or lack of knowledge on the object of the
contract. However, there are some mistakes that do cannot vitiate or affect the consent given by
the parties like the following: a. Mistake as to incidents of things stipulated in the contract except
if there is fraud; b. Mistake as to the quantity or amount requires only for a correction of the
mistake. It does not vitiate the contract. If it is however the essence of the contract, reformation is
needed instead; c. Mistake which could have been avoided by the party alleging it. The mistake of
fact on the other hand arises from the ignorance or lack of knowledge on applicable provisions of
law, erroneous interpretation, and conclusion as to the legal effect of the agreement.
The presence of fraud is evident if there are insidious words or if there is a scheme or
machination which induces the other party to enter into a contract. Fraud could either be causal or
incidental. Causal fraud is committed by one party in order that the other party would agree to
the terms and conditions of the contract. It may be committed through the concealment or non-
statement of the material facts. Incidental fraud on the other hand pertains to the fraud without
which consent would have still been given but the person giving it would not have agreed. This
fraud is incidental to the performance of an obligation.
Undue influence is the direct influence that overpowers the mind of the party to decide
based on the ideas and principles of the others. There must have a proof that the one induced to
perform an obligation was a weaker party; that influence is improperly exerted. There is no
vitiation of contract if the influence is obtained because of one's generosity or liberality.
Object Certain. It could be any of the following: a. thing; b. right; c. service.
The object certain must have the following requisites: 1. Objects should be within the
commerce of men; 2. It should be real or possible. It should exist at the moment of the
celebration of contract or at least it can exist subsequently or in the future; 3. Objects should
be licit or not be contrary to law, morals, good customs, public order or public policy; 4. It
should be determinate or at least possible of determination as to its kind.
Cause. It is the why of the contract or the essential reason which moves the contracting
parties to enter into the contract. It must have the following requisites:
1. should be in existence; 2. should be licit or lawful, and; 3. should be true.

Classification of Contracts According to Cause

Contracts may be classified according to cause, to wit: a. Onerous; b. Remuneratory; c.
Gratuitous.
The parties are reciprocally obligated to each other in onerous contract;
The purpose of remunerative contract is to give remuneration to the services previously
rendered or given by the other party;
 In a contract that is gratuitous, one party is giving something out of his or her generosity
or liberality. The one giving is not expecting something in return. It is basically a gift to the other
party without any consideration. One perfect example of this is donation.

Perfection of Contracts
In general, contracts are perfected from the moment that there is a manifestation of the
concurrence between the offer and the acceptance with respect to the object and the cause which
shall constitute the contract.
According to the CC Art 1319, par 2, the contract is perfected from the moment that the
offeror has knowledge of such acceptance, while according to the Article 54 of the Code of
Commerce, the contract is perfected from the moment an answer is made accepting the offer.

Contract Stages
1. Generation. It is the preliminary stage or process for the formation of the contract. It
includes the bargaining of the subject of obligation and the consideration.
2. Perfection or the birth of the contract
3. Consummation. It is the fulfillment of the purpose for which the contract was constituted.

Characteristics of Contracts
Contracts may be characterized as follows: obligatory; autonomy; mutuality; relativity.
1. Obligatory force. Once the contract is perfected, it shall be of obligatory force upon both
of the contracting parties.
2. Autonomy of the contracts. Contracting parties are free to enter into a contract and to
establish such stipulations, clauses, terms and conditions as they may deem convenient.
3. Mutuality of the contracts. The contract must bind both parties.
4. Relativity of the contracts. Contract takes effect only between the parties, their assigns,
and their heirs.

Limitations upon the Establishment of Stipulation; Clauses, Terms and Condition

According to Article 1306 of the Civil Code of the Philippines, the stipulations, clauses,
terms and conditions established by the contracting parties must not be: contrary to law, moral,
good customs, public order, public policy.
Query:
Petri and Leni were under contract with Kostka Events Management for their wedding
scheduled on December 8, 2007. The Another Events Management group induced Petri and Leni
to withdraw their contract with Kostka events by giving them 20% more discount. Kostka Events
filed a damage suit against the Another Events Management for damages. Discuss the implications.

Answer:
According to the CC, any third person who induces another to violate his contract shall be
liable for damages to the other contracting party. In the law of torts, we call this “interference with”
will be actionable, it is necessary that the following requisites must concur:
a. existence of a valid contract; b. knowledge on the part of the third person of the
existence of such contract, and c. interference by the third person without legal
justification or excuse.

Defective Contracts
A contract is considered defective because of its legal insufficiency due to its
incompleteness or incorrectness. It cannot be enforced. There are four defective contracts as
enunciated in the Civil Code of the Philippines, to wit: Rescissible, Voidable, Unenforceable, and
Void.
1. A Rescissible Contract is a valid contract because it contains all of the essential requisites
prescribed by law, but which is defective due to injury or damage to either of the
contracting parties or to third persons as a consequence of which it may be rescinded by
means of a proper action for rescission.
Rescissible contract has the following requisites: a. the defect constitutes an injury
or damage either to one of the contracting parties or to third persons; b. before rescission,
they are valid and therefore legally effective; c. it can be attacked directly only and not
collaterally; d. they can be attacked only either by the contracting party or by a third person
who is injured or defrauded; e. they are susceptible of convalidation only by prescription
and not by ratification.
2. Voidable. It is a contract which is valid until annulled. All of the essential elements for
validity are present, but the element of consent is vitiated either by lack of legal capacity
of one of the contracting parties, or by mistake, violence, intimidation, undue influence, or
fraud. The following are the characteristics of a voidable contact: a. there is a defect in the
contract because the consent of one of the contracting parties is vitiated; b. the contract
binds the parties until the contract is annulled; c. the defect can be convalidated by
ratification or by prescription; d. the voidable character of the contract cannot be invoked
by third person.
3. Unenforceable contracts. Those that cannot be enforced by a proper action in court
UNLESS they are ratified, because they are either entered into without or in excess of
authority or they do not comply with the Statue of Frauds OR both of the contracting parties
do not possess the required legal capacity. An unenforceable contract has the following
 characteristics: a. it cannot be enforced by proper action; b. it is susceptible to ratification;
c. it cannot be assailed by third persons.
4. A Void Contract is considered to be inexistent by operation of law, thus, confers no right
to any party thereto. It has the following characteristics: a. it cannot produce effect
whatsoever either against or in favor of anyone; b. there is no need to file an action for
annulment; judgment of nullity is merely declaratory; c. they can neither be confirmed nor
ratified; d. the defect of nullity may be invoked by anyone against whom the effects of the
contract are asserted.

CHAPTER 2
TOURISM AND HOSPITALITY AS A TRADE
Introduction
Establishing a business is not an easy thing. There are many factors to be considered before
it could materialize. A feasibility study should be done before investing in a business. It is not wise
to put up a business without any projection as to amount or capital to be invested and the time
wherein the same shall be returned. The location and other competitors should also be considered
as a basis for the innovation or reinvention of the products to be offered to the prospective clientele.
Human resources also play as an important key for its success. Most importantly, the nature of the
business must be clearly established.
One vital concept that the authors of this book will deal with in the discussions is the
compliance with the requirements of the law on business organization. Tourism and hospitality
business like any other businesses are susceptible to being confronted with some legal issues and
technicalities in their entire management.

Forms of Business Organization

Business entrepreneurs especially in the Tourism and Hospitality sectors must decide on
the form of business that they will deal with so as to be ready when threatened by some legal
concerns. The following are the different forms of business organizations:
1. Sole Proprietorship
2. Partnership
3. Corporation

Sole Proprietorship Defined

In this form of business, the owner is in command of his whole business and stands to lose
as much as he puts in and even more to the extent of all his personal holdings. In addition to that,
the establishment, operations, and management of this form of business organization is not
governed by a special law as compared to partnership and corporation. If this form of business is
confronted by some legal issues and disputes, the proprietor can use the general laws prevailing
civil obligations and contracts in the business and commercial transactions.
Having the power to control the whole management of the business, the sole proprietor has
limitless liability since his assets and property may be proceeded by the creditors. The law does
not make any difference between the personal affairs of the proprietor and his business interest.
Before the eyes of the law, they are one and the same; the business is being an extension of his
being.
The aliens are generally not restricted or limited to form a single proprietorship business
in the Philippines. However, in instance that they will not be permitted to form single
proprietorship business in a precise industry, they are not stripped to have business venture through
other forms of business such as corporation, partnership, or joint venture.
Registration of a sole proprietorship business in the Philippines involves a very simple
procedure wherein the Department of Trade and Industry through the Bureau of Trade Regulation
and Consumer Protection will just have to issue the registration to the applicant.

Partnership Defined
By contract of partnership, two or more persons bind themselves to contribute money,
property, or industry to a common fund, with the intention of dividing the profits among
themselves.
Two or more persons may also form a partnership for the exercise of profession (Article
1767, Civil Code of the Philippines).
Partnership has a juridical personality separate and distinct from each of the partners, even
in the case of failure to comply with the requirements of Art 1772 (Article 1768). It is required to
operate under a firm name in order to manifest this juridical personality (Art.1815, CC). With their
separate property, partners (except in limited partnership) are personally liable pro rata for the
debts of the partnership (Art 1813, CC).

Forms of Partnership
Partnership may be found in any of the following forms:
1. General Partnership
2. Limited Partnership
3. Limited Liability Partnership
 General Partnership. It is a basic form of partnership in which all other partners manage
the business and are personally liable for its debts.
Limited Partnership. In this form of partnership, certain limited partners relinquish their
ability to manage the business in exchange for limited liability for the partnership's debts.
Limited Liability Partnership. In this form of partnership, all partners have some degree
of limited liability.

Types of Partners
General Partners. They have an obligation of strict liability to third parties injured by the
partnership. Joint liability or joint and several liability may be imposed depending upon
circumstances.
Limited Partners. The liability of limited partners is limited to their investment in the
partnership.
Silent Partners. Partners who usually provide capital to the business. They still share in
the profits and losses of the business, but they are uninvolved in the management, and/or whose
association with the business is not publicly known.
Notes:
1. Money means legal tender;
2. Property pertains to the real or personal acceptable to all the partners;
3. Industry involves human faculties as intellectual or physical traits;
4. Common fund pertains to all contributions made by the partners that will be pooled
together as one capitalization of the partners for the usage, common benefit and interest of
the partners;
5. There is intent to divide the profit among them.
6. Partnership must be dissolved upon the death of one of its general partners.
7. A partnership is taxed like a corporation.
8. A foreigner cannot be a partner in a partnership which owns land.
9. The word “Limited” or “Ltd” must be added to the partnership name in case of limited
partnership.
10. There is a need for the Philippine Embassy or Consulate to authenticate the documents
signed outside the Philippines.

Nature of Partnership
Partnership is fiduciary in character. It means that all partners must have trust and
confidence in one another. It is not ideal to organize a partnership with people whom you do not
know or whom you cannot give your complete trust and confidence.
Delectus Personae
In partnership, a person has the right to choose the person or persons he wants to become
his partner/s, taking into consideration such sterling qualities as honesty, integrity, and more
importantly are trust and confidence.

Essential Elements of Partnership

1. Valid and voluntary contract to become partners.
The persons forming the partnership must be capacitated to enter into a contractual
relationship. Likewise, the contracting parties must give their free and voluntary will to
become partners.
2. Contributions of money, property or industry to the common fund, to be used exclusively
for the common interest and benefit of the partnership.
3. It must be an association for profit, with the intention of dividing the profits among
themselves.
4. The partners must be mutual agents of each other. As an agent of his co- partners, a partner
can enter into a contract and bind the partnership, provided he is acting within the scope of
his authority and for the best interest of the partnership.
5. Lawful purpose
6. Articles of Partnership must not be kept secret.
7. Juridical personality, separate and distinct from the individual personality of each partner.
This is acquired by the partnership once it is legally established.

Art 1772
Every contract of partnership, having a capital of Php 3,000 or more in money or property,
shall appear in public instrument, which must be recorded in the Office of Securities Exchange
Commission.
Failure to comply with the requirements of the preceding paragraph shall not affect the
liability of the partnership and the members thereof to third persons.

Corporation Defined
Under Sec. 2 of the Batas Pambansa 68, otherwise known as the Corporation Code of the
Philippines, corporation was defined as an artificial being created by operation of law, having the
right of succession and powers, attributes and properties expressly authorized by law or incident
to its existence.
Based on the definition provided by law, it can be deduced that a corporate form of business
has the following attributes: it is artificial being; it is created by operation of law; it has the power
of succession; it has the power, attributes and properties expressly authorized by law or incident
thereto.
Be it noted that artificial being pertains to the fiction of law which creates the person of
the corporation. By operation of law, it becomes a being with the attributes of an individual with
full capacity to enter into contractual relations. It is a legal or juridical person with a personality
separate and distinct from its individual members.
Creature of law on the other hand pertains to the juridical existence of a corporation which
is dependent on the consent or grant of the sovereign. From a strict legal point of view, a
corporation cannot come into being by mere consent of the parties; there must be a law granting
it. Once granted, it forms the primary franchise of the corporation.
It must be given emphasis also that there must be first an underlying contract among the
individuals forming the corporation upon which the state grant may be conferred.
Another important attribute of a corporate form of business is the right of succession. This
pertains to the capacity for continuous existence despite the death or replacement of its
shareholders or members, for it has a personality separate and distinct from those who compose it.
The strong legal personality of the corporation is an attribute that has made it most attractive to
businessmen when compared to other media.

Advantages of Corporate Form of Business

The following are the advantages of a corporate form of a business:
Strong Legal Personality. The corporation has legal capacity to act and contract as a
distinct unit in its own name. It has continuity of existence. As distinguished from partnership, it
has a strong legal personality having separate and distinct personality from the members
composing it, unaffected by death, resignation, or insolvency of any of its stockholders or
members.
Limited Liability to Investors. One of the advantages of a corporate form of business
organization is the limitation of an investor's liability to the amount of the investment. This feature
flows from the legal theory that a corporate entity is separate and distinct from its stockholders.
Free Transferability of Units of Investment. In a corporate setting, as a general rule, the
shares of stocks can be transferred without the consent of the other stockholders. This would assure
investors of a ready mechanism to dispose of their investments when their personal or financial
situation may require it and therefore places more liquidity in the corporate setting and would
better encourage investors to channel their investments through corporate vehicles.
Centralized Management. Corporation management is centralized in the board of
directors. Shareholders are not agents of the corporation, nor can they bind the corporations. Unlike
in the partnership setting, each partner may bind the partnership even without the knowledge of
the other partners. Therefore, in its legal relationship, a corporation presents more stable and
efficient system of governance and dealings with third parties, since management prerogatives are
centralized in its Board of Directors.

Advantages over the Unregistered Associations

1. It enjoys perpetual succession under its corporate name and in an artificial form.
2. It has the capacity to take and grant property and contract obligations.
3. It can sue and be sued in its corporate name as a juridical person.
4. It has the capacity to receive and enjoy common grants of privileges and immunities.
5. Its stockholders or members generally have no personal liability beyond the value of their
shares.

Disadvantages of Corporate Form

1. Complicated and costly formation and maintenance
2. Lack of personal element
3. Abuse of corporate management
4. Limited liability hits innocent victims
5. Double taxation

Distinction between Corporation and Sole Proprietorship

In corporation, the control belongs to the Board of Directors. There is also a limited liability
on the part or shareholders. On the contrary, the owner in the sole proprietorship is in command
of the whole business and stands to lose as much as he puts in and even more to the extent of all
his personal holdings.

Distinction between Corporation and Partnership as to Legal Capacity

Corporation has a stronger legal personality, enabling it to continue despite the death,
insolvency, or withdrawal of any of its stockholders or members.
Partnership, the withdrawal, death, or insolvency of any partners would automatically
bring about the dissolution of partnership.
Limited liability is the main feature in a corporate setting whereas partners are liable
personally for partnership debts not only to what they have invested in the partnership but even as
to their other properties.
Generally, every partner is an agent of the partnership, and by this sole act, he can bind the
partnership.
Nationality of Corporation
There are two tests to identify the nationality of a corporation. These are the Place of
Incorporation Test and the Control Test.
The Place of Incorporation Test is the principal doctrine on the test of nationality of
corporation in the Philippines. It adheres to the belief that a corporation is a nationality test of the
country under whose laws it has been organized and registered. On the other hand, the Control
Test adheres that the nationality of the corporation is determined by the nationality of the majority
of the stockholders on whom the control is vested.

Classifications of Corporation in Relation to the State

Corporation in relation to the state may be classified into the following: Public, Private,
Quasi Public Corporation.
Public corporations are those formed or organized for the government of a portion of the
State. Example: municipality for government functions
Private corporations are those formed for some private purpose, benefit or end.
Examples: ABS CBN Corporation, Jollibee Food Corporation, San Miguel Corporation
Quasi-public corporation is a cross between private corporations and public corporations.
Examples: School districts, water districts, PLDT

Classifications of Corporation as to the Place of Incorporation

Corporation may be classified as to the place where they were incorporated, to wit:
Domestic Corporation and Foreign Corporation.
Domestic Corporation. This kind of corporation obtained personality through
incorporation under the Philippine laws.
Foreign Corporation is licensed by SEC to do business in the Philippines under the
principle of RECIPROCITY, after securing a certificate of authority from the Board of
Investments under EO 226 or the Omnibus Election Code and after complying with the conditions
for issuance of the license or application forms, structural organizations, and capitalization. The
reasons for this are: (a) to place them on equality with domestic corporations; (b) to subject them
to inspection so that their condition may be known; (c) to protect the residents of the state doing
business with them by subjecting them to the courts of the state.

Classifications of Corporation as to Stock

 Stock Corporation. Private corporations which have capital stock divided into shares and
the stockholders are entitled to their shares of dividends or allotment of the corporate surplus
profits based on their stockholdings or subscriptions.
Non-stock Corporation. These are corporations which do not issue stocks and are
composed of members, not stockholders. They may be civic, charitable, religious, or professional
organizations.

Other Kinds of Corporation

De Jure Corporation. It is a corporation which complied with the requirements of the law.
De Facto Corporation. Those who failed to comply with one or two legal requirements
of the law.
Corporation Sole. It is composed of one member or corporator and generally applies to
religious denominations. For example, the corporation sole of the Catholic Church is Cardinal Sin
and his successor.
Close Corporation. This is usually owned and managed by a family. All the outstanding
stocks are owned and managed by a family; stocks are not open for public subscription.
Open Corporation. All the members or corporations exercise their right to vote to elect
the directors and other officers of the corporation; the stocks are open for public subscription.
Eleemosynary Corporation. This corporation is established for charitable purposes.
Ecclesiastical Corporation. This corporation is established for religious purposes.
Lay Corporation. This corporation is established for any purpose other than religion.
Corporation Aggregate. This is composed of one member or corporator.
Corporation by Estoppel. This is a kind of corporation wherein members assume to act
as corporation despite the knowledge of the non- existence of corporate personality. In this case
all the persons involved will be liable as general partners.
Multinational Corporation. A corporation organized in one state or country but extends
its corporate business in other territories or countries.

Powers of Corporation
The powers of corporation can either be expressed or implied. The power is expressed if
the corporation can perform functions as stipulated in the By Laws, Corporation Code, and such
other statutes pertinent to the corporations. In implied power, the power is inherently necessary in
the exercise of its corporate function in the pursuit of its corporate existence.
Different Corporation Doctrines
Doctrine of Piercing the Veil of Corporate Existence. It is a general principle under the
law that a corporation has a personality which is separate and distinct from its members. However,
the said principle would not apply to some instances as held in the case of San Juan Structural
and Steel Fabricators, Inc. v. Court of Appeals. Corporate Law recognizes the value of
creditors. In cases where the corporation uses the fiction of corporate personality as a means of
perpetuating a fraud or an illegal act, or as a vehicle for the evasion of an existing obligation, the
circumvention of statutes, the achievement or perfection of a monopoly or generally the
perpetration of knavery or crime, then the “veil which the law covers and isolates the corporation
from the members of stockholders who compose it will be lifted to allow for its consideration
merely as an aggregation of individuals.
In several cases, the doctrine of piercing the veil of corporate fiction has been
applied by the Supreme Court: when the corporate entity is used to commit fraud or to
justify wrong, or to defend crime; when the corporate entity is used to defeat public
convenience, or a mere farce, since the corporation is merely the alter ego, business
conduit or instrumentality of a person or another entity; and when the piercing of the
corporate fiction is necessary to achieve justice or equity.
Doctrine of Business Opportunity. This doctrine refers to the case when a director or
officer of the corporation is presented with a business venture which can be profitably handled by
the corporation. He must give that business opportunity to the corporation; he shall be held liable
to refund to the corporation whatever profits and benefits he may have derived from such business
opportunity.
Trust Fund Doctrine. When the directors of the solvent or insolvent corporation distribute
all corporate assets to the stockholders without reserving any assets for payment of corporate debts
and liabilities. The directors or officers, together with the stockholders who received the assets,
are considered trustees and the corporation and creditors can recover from the stockholders. Such
corporate assets they received shall be sold at public auction for the settlement of corporate
liabilities.

Distinction between Corporators and Incorporators

Corporators. These are the total number or persons who compose the corporation after its
formation which include the incorporators, the stockholders and/or members.
Incorporators, stock, or non-stock. They must be natural persons. A juridical person
cannot be an incorporator. The law provides that the incorporators must be at least five (5) but not
more than (15).
Registration Requirements in Establishing Business Pertinent to the Hospitality Industry
Promotion of the different tourist destinations in the country may be well settled through
the opening of various businesses well supported by the respective local government units and in
coordination with the Department of Tourism. In making the said mandate possible, the regulatory
power of the State, through licensing of businesses may be used. In this regard, the public in
general (local and foreign tourists) may be assured of quality service from the hospitality industry,
and in effect, an additive of tourist attractions.
Licensing is very important in the operation of any business in the country. License is
mandated to be displayed in a conspicuous place within the vicinity of any business establishment,
guaranteeing the public that the business wherein they are the clientele is not nuisance, and is
legitimately operated.
Meanwhile, if you would decide to establish partnerships and corporations as a form of
business in the near future, it is necessary that you register with the SEC or the Securities and
Exchange Commission. However, if you would like to establish a single proprietorship or you
want to have the control of everything in your business, the registration is through the DTI or the
Department of Trade and Industry.
If you would like to avail of the incentives provided under Executive Order 226 or the
Omnibus Investment Code, registration with the Board of Investments (BOI) is a must.
Registration is also needed if you would like to avail of the incentives of the following
Investment Promotion Agencies, to wit:
PEZA (Philippine Economic Zone Authority), SBMA (Subic Bay Metropolitan Authority),
CDC (Clark Development Corporation), Cagayan Economic Zone Authority, Phividec Industrial
Authority, Zamboanga Economic Zone Authority
The registration of foreign investments for purposes of capital repatriation and profit
remittances is under the Bangko Sentral ng Pilipinas (BSP).
Before a business can be fully operated, it is a must that they secure the following: TIN
(Tax Identification Number) under the Bureau of Internal Revenue; Locational clearance/ business
permit for firms in Metro Manila under the MMDA or Metro Manila Development Authority;
employer's SSS number under the Social Security System membership in the government health
care benefits system through the Philippine Health Insurance Corporation; electric services
connection through the MERALCO or Manila Electric Co; water services through the Maynilad
Water Company and/or Manila Water Company for firms locating in Metro Manila, LWUA or
Local Water Utilities Administration for firms outside Metro Manila; telephone services
connection.
 LEGAL ASPECTS in TOURISM & HOSPITALITY

CHAPTER 1
INTRODUCTION TO LAW ON TOURISM AND HOSPITALITY

Introduction
The order of any business specially affecting the tourism and hospitality is dependent on
the implementation and observance of a rule, policy, standard, system, and law. No enterprise or
any business entity can exploit the environment and natural resources as incidences to their very
existence without being subjected to the regulations of the local and national governing authorities.
Business minded people cannot just simply put a hotel in a feasible place without considering the
legal repercussions that they may be confronting with prior to, during, and after the whole
operations of their business.
Given the complexities of law affecting the trade of tourism and hospitality, the authors
have decided to come up with this instructional material that would equip the students with basic
knowledge or understanding of the laws that they may deal with in their future industry. It is hoped
that this material could be instrumental to their success as managers, entrepreneurs, or leaders in
the future.

Law Defined
Law may be defined in various ways.
According to Collins (retrieved, 2018), law is a system of rules that a society or government
develops in order to deal with crime, business agreements, and social relationships. The law can
also be used to refer to the people who work in this system. Webster (2018) has defined law as a
binding custom or practice of a community: a rule of conduct or action prescribed or formally
recognized as binding or enforced by a controlling authority.

Law is derived from the German word ‘Lag’ means fixed or evenly. Politically, as per regulations
and rules, it is enforced by the State to regulate human conduct for the administration of Justice.
According to Merriam Webster Dictionary, the meaning of the law is; “A binding custom or
practice of a community”.
According to Austin: “Law is the command of a sovereign, it imposes a duty and is backed by
Sanction”. Or “Law is the aggregate or collective of rules set by men as politically superior, or
sovereign, to men as politically subject”
According to Salmond: “Law is the body of principles, recognized and applied by the state for
the administration of justice”.
Body of principles - means no person under any form of detention or imprisonment shall be
subjected to torture or to cruel, inhuman or degrading treatment or punishment.
Characteristics of Law
It can be observed from the definitions given by Collins and Webster that the following
elements are present:
1. Rule of human conduct
2. Just and obligatory
3. Promulgated by competent authority
4. It must be observed by all.
Law is to be taken as standards or norms that every member of the community should
adhere to. It must be taken seriously so that order in the community can be properly observed.
The passage of the law requires a careful deliberation from the law-making authorities
considering the impact it may have to the people in general. In doing so, the welfare of the people
must be taken a paramount consideration. The welfare of the people is the supreme law.
Justness of the law is about being equitable to the extent that people are obligated to obey
it based on their ability to observe (e.g., people are obliged to pay taxes based on their ability to
pay). Justness is about being fair and not discriminatory in a sense that the law is being applied to
all regardless of race, gender, status in life, and the like. There is no justness in the law if the same
is ineffectual and cannot be obligated to everybody.
The law has no meaning or void from the very beginning if not promulgated by competent
authority. Laws applicable within the jurisdiction of the whole archipelago should come from the
initiative of the legislative department which comprises the Senate and the Congress (composed
by the District Representatives and the Party-List Representatives)
All is bound to observe the law, including the corporations and partnerships, having
attained artificial personality as conferred by law. Aliens, while temporarily residing in the country
are likewise bound to observe the governing law for the same. The reason is obvious, while these
aliens are temporarily residing in our country, they have been enjoying the protection and the
security that the citizens have been enjoying from the government. No man is above the law. All
is mandated to obey it, regardless of their age, gender, social standing, party, and political
affiliations. Highest officials of the land are likewise expected to observe the rule of law.
Tourism Laws versus Hospitality Laws
The laws on tourism may be defined as a combination of state, local, and international laws
that control the different facets and functions of the travel industry. The United Nations World
Tourism Organization (https://www. besthospitalitydegrees.com, retrieved 2018) has maintained
that tourism laws are necessary to provide a regulatory framework for the proper development and
management of tourism activities to aid in the conservation of natural resources and the
preservation of cultural traditions.
On the other hand, hospitality laws deal with food service, travel, and lodging industries.
It is applicable to the different nuances of restaurant, hotel, country club, bar, spa, and related
industries. It embraces an extensive collection of laws like contracts, torts and damages, labor, and
a lot more. Hotels and restaurants are two of the most common hospitality law clients
(https://www.hg.org/hospitality-law.html)

Kinds of Laws
Laws may be classified according to the following:
According to Purpose
1. Substantive Law. This is a kind of law which creates, defines, and regulates rights and
duties that can give rise to a cause of action. It deals with the ends which the
administration of justice seeks. It relates and determines matters litigated. It regulates
the affairs controlled by procedural law.
2. Adjective Law. This provides the method of aiding and protecting certain rights. It is
concerned with the means and instruments by which those ends can be achieved. It
relates with the conduct and relations between courts and litigants. It regulates the
conduct of affairs in the course of administration of justice.
According to Scope
1. Public Law. This law applies to all of the state or to particular class of persons in the
state, with equal force and obligation. Examples: Political Law, Criminal Law,
International Law.
2. Private Law. This law relates to particular class of persons or things. Examples:
Mercantile/Commercial Law, Maritime Law, Civil Law

Purposes of Law
There are four primary purposes of law:
 1. maintaining order
2. establishing standards
3. resolving disputes
4. protecting individual rights and liberties.

- The law must be followed and obeyed by all the citizens. Failing to do so will result in legal
consequences of the law.
According to Holland, the function of law is to ensure the well-being of the society. Thus it is
something more than an institution for the protection of individuals’ rights.
Roscoe Pound attributed four major functions of law, namely: (1) maintenance of law and order
in society; (2) to maintain status quo in society; (3) to ensure maximum freedom of individuals;
and (4) to satisfy the basic needs of the people.
Today the following are taken as important functions of law.
A) Social control
- Members of the society may have different social values, various behaviours and interests.
It is important to control those behaviours and to inculcate socially acceptable social norms
among the members of the society. There are informal and formal social controls. Law is
one of the forms of formal social controls. As to Roscoe Pound, law is a highly specialized
form of social control in developed politically organized society.

- Lawrence M. Freedman explains the following two ways in which law plays important role
in social control:
First, law clearly specifies rules and norms that are essential for the society and punishes
deviant behaviour.
Second, the legal system carries out many rules of social control. Police arrest burglars,
prosecutors prosecute them, courts sentence them, prison guards watch them, and parole
broads release them [Steven; 2003]

B) Dispute settlement
- Disputes are un avoidable in the life of society and it is the role of the law to settle disputes.
Thus, disagreements that are justiceable will be resolved by law in court or out of court
using alternative dispute settlement mechanisms [Steven; 2003].

C) Social change
- A number of scholars agree about the role of law in modern society as instrument to social
change. Law enables us to have purposive, planned, and directed social change [Steven;
2003]. Flexibility of law provides some measure of discretion in law to make it adaptable
to social conditions. If law is rigid and unalterable, it may not respond to changes
spontaneously which may lead to resentment and dissatisfaction among the subjects and
may even result into violence or revolution. Therefore, some amount of flexibility is
inevitable in law [Biset; 2006]

Kinds of law by Sir Jhon Salmond

1. Imperative law
 2. Physical or scientific law
3. Natural or moral law
4. Conventional law
5. Customary law
6. Practical or technical law
1. Imperative Law or Positive Law:
Positive law is a rule which prescribes a general course of action imposed by some authority that
enforces it by a superior power, either by physical force or another sort of compulsion. The
requirements of an imperative law are: –
1. It must be a general rule;
2. There must be some authority behind it; and
3. It must be enforced by superior power by physical force or compulsion.

There are two kinds of imperative laws, Divine or Human.

Example: The criminal law, the contract law, etc

Criminal laws are the area of the local, state, and federal laws that define criminal acts and
offenses, governs the arrest, detention, charging, and prosecution of accused offenders, and sets
specific punishments

Contract law - Contracts are agreements that the law will enforce. Contracts are individual, or
private, rights and duties created by oral or written agreement and consent of the parties.
Contracts may include obligations imposed by law even if the parties are not aware of those
obligations.

- Many aspects of daily life involve contracts, including buying property, applying for a
car loan, signing employment-related paperwork, and agreeing to terms and conditions
when buying products and services or using computer software.

2. Physical or Scientific Law:

Physical or scientific laws are expressions of the uniformities of nature, or uniformity in the
conduct of living beings or lifeless things.

- A physical law or a law of physics is a statement "inferred from particular facts,

applicable to a defined group or class of phenomena, and expressible by the statement
that a particular phenomenon always occurs if certain conditions be present."
- A scientific law is a statement describing what always happens under certain conditions.
Newton’s three laws of motion are examples of laws in physical science.
- Physical laws play a crucial role in Science and are considered as fundamental. Many
laws of physics are built after various research or some are a modification of existing
laws and theoretical research.

3. Natural or Moral Law:

Natural or Moral law is also known as divine law, the law of reason, the unwritten law, the
universal law, the common law, and the eternal law. According to Salmond; “By natural law or
moral law is meant the principles of natural right and wrong”.
 - In philosophy, system of right or justice held to be common to all humans and derived
from nature rather than from the rules of society, or positive law.
- The 10 commandments moral values:
1. Honour your parents
2. You shall not commit adultery
3. You shall not worship false idols
4. You shall not bear false witness
5. You shall not covet
6. You shall not steal
7. Remember the Sabbath day and keep it holy
8. No killing (murder)
9. You shall have no other gods
10. Do not take the name of the Lord in vain

4. Conventional law:
Convention means agreement. Conventional law must have an agreement between two parties-
and not the force or coercion of a superior. It is thus the name given to a body of rules agreed to
be followed by some parties in order to regulate their conduct towards one another. These are
laws because they ensure uniformity of conduct.
- conventional law is a species of special law and has its source in the agreement of those who are
subject to it. Agreement is a law for those who make it. For instance, articles of association of a
company or partnership are conventional laws.
5. Customary Law:
Customary law means such rules of custom as habitually being followed by the majority of
persons, subject to them, since a long time in the past and are expected to be followed in the future
as well in the belief of their binding nature.
- Customary law is, by definition, intrinsic to the life and custom of indigenous peoples
and local communities.

For instance, customary laws are defined variously by some authorities as

- customs that are accepted as legal requirements or obligatory rules of conduct;
practices and beliefs that are so vital and intrinsic a part of a social and economic
system that they are treated as if they were laws”.
- established patterns of behaviour that can be objectively verified within a particular
social setting.

6. Practical or Technical Law:

- Practical laws are such laws consisting of rules which are to be followed to achieve
uniformity of results in practical or technical matters, e.g., the laws of health, the laws of
architecture or manufacture. It consists of Principles and rules for the attainment of certain
ends. These rules guide us as to what we should to do in order to attain certain ends.
7. International Law:
 - According to Salmond; “Those rules which govern the sovereign/supreme state in their
relations and conduct towards each other”.
- According to Lord Russel; “The aggregate of rules to which nations have agreed to
conform in their conduct towards one another”.

- International law has emerged from an effort to deal with conflict among states, since rules
provide order and help to mitigate destructive conflict. It is developed in a number of ways.
First, law often comes out of international agreements and treaties between states.

- Its main purpose and role is to promote justice, prosperity, and peace all around the world.

8. Civil Law:
- refers to the system of law concerned with private relations between members of a
community rather than criminal, military, or religious affairs.
- the part of the legal system that deals with people's relationships, property, and business
agreements, rather than with criminal activity.
- Civil law defines the rights and responsibilities of individuals, government entities and
private or non-government organisations in their interactions with each other. A breach of
a civil law right or obligation does not usually lead to criminal processes and sanctions.

THE PHILIPPINE CONSTITUTIONS

Constitution is the basic principles and laws of a nation, state, or social group that
determine the powers and duties of the government and guarantee certain rights to the people in it.
It is a written instrument embodying the rules of a political or social organization. Constitution is
said to be supreme among all the laws of the archipelago.
The Constitution is the basic and paramount law to which all other laws must conform and
to which all persons, including the highest officials of the land, must defer. Constitutional doctrines
must remain steadfast no matter what the tides of time may be. It cannot be simply made to sway
and accommodate the call of situations and much more tailor itself to the whims and caprices of
government and the people who run it.

Constitution only has the Rights and Duties of people and government. But the Acts
provide the details necessary and the rules and regulations, punishments, etc.

THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES

PREAMBLE
 We, the sovereign Filipino people, imploring the aid of Almighty God, in order to build a
just and humane society, and establish a Government that shall embody our ideals
and aspirations, promote the common good, conserve and develop our patrimony,
and secure to ourselves and our posterity, the blessings of independence and
democracy under the rule of law and a regime of truth, justice, freedom,
love, equality, and peace, do ordain and promulgate this Constitution.

The Constitution of the Republic of the Philippines

▪ PREAMBLE - The preamble of the Constitution provides that we should establish a
Government which shall "conserve and develop our patrimony." Our "patrimony"
includes our public forests, mangroves, wildlife, and flora and fauna which should be
conserved, protected and renewed. It clearly communicates the intentions of the
framers and the purpose of the document.
▪ ARTICLE I National Territory - The national territory comprises the Philippine
archipelago, with all the islands and waters embraced therein, and all other territories
over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial,
fluvial and aerial domains, including its territorial sea, the seabed, the subsoil, the
insular shelves, and other submarine areas.
▪ ARTICLE II Declaration of Principles and State Policies - The Philippines is a
democratic and republican State. Sovereignty resides in the people and all
government authority emanates from them.
▪ ARTICLE III Bill of Rights - . No person shall be deprived of life, liberty, or property
without due process of law, nor shall any person be denied the equal protection of the
laws.
▪ ARTICLE IV Citizenship - Any person born to at least one parent who is a
Philippine citizen automatically receives Philippine citizenship at birth.
Abandoned children found in the country are presumed to have been born to
Philippine citizens and are considered natural-born citizens.
▪ ARTICLE V Suffrage - the right to vote in political elections.
▪ ARTICLE VI Legislative Department - The legislative branch is made up of the
House and Senate, known collectively as the Congress. Among other powers, the
legislative branch makes all laws, declares war, regulates interstate and foreign
commerce and controls taxing and spending policies.
▪ ARTICLE VII Executive Department - The President shall have control of all the
executive departments, bureaus, and offices. He shall ensure that the laws be
faithfully executed.
▪ ARTICLE VIII Judicial Department - The judiciary of the Philippines consists of the
Supreme Court, which is established in the Constitution, and three levels of lower
courts, which are established through law by the Congress of the Philippines.
▪ ARTICLE IX Constitutional Commissions - The Constitutional Commissions, which
shall be independent, are the Civil Service Commission, the Commission on
Elections, and the Commission on Audit.
▪ ARTICLE X Local Government - In the Philippines, local government is divided into
three levels: provinces and independent cities, component cities and
municipalities, and barangays, all of which are collectively known as local
government units (LGUs).
▪ ARTICLE XI Accountability of Public Officers - Public office is a public trust.
Public officers and employees must, at all times, be accountable to the people, serve
them with utmost responsibility, integrity, loyalty, and efficiency; act with patriotism
and justice, and lead modest lives.
▪ ARTICLE XII National Economy and Patrimony - the State shall give preference to
qualified Filipinos. The State shall regulate and exercise authority over foreign
investments within its national jurisdiction and in accordance with its national goals
and priorities.
▪ ARTICLE XIII Social Justice and Human Rights - Social justice means everyone's
human rights are respected, protected, and promoted. The Congress shall give
highest priority to the enactment of measures that protect and enhance the right of all
the people to human dignity, reduce social, economic, and political inequalities, and
remove cultural inequities by equitably diffusing wealth and political power for the
common good.
▪ ARTICLE XIV Education, Science and Technology, Arts, Culture and Sports - “the
State shall give priority to education, science and technology, arts, culture, and sports
to foster patriotism and nationalism, accelerate social progress, and promote total
human liberation and development”.
▪ The State shall protect and promote the right of all citizens to quality
education at all levels, and shall take appropriate steps to make such
education accessible to all.
▪ The national language of the Philippines is Filipino. As it evolves, it shall
be further developed and enriched on the basis of existing Philippine and
other languages.
▪ Science and technology are essential for national development and
progress. The State shall give priority to research and development,
invention, innovation, and their utilization; and to science and technology
education, training, and services.
▪ The State shall foster the preservation, enrichment, and dynamic evolution
of a Filipino national culture based on the principle of unity in diversity in
a climate of free artistic and intellectual expression.
▪ The State shall promote physical education and encourage sports
programs, league competitions, and amateur sports, including training for
 international competitions, to foster self-discipline, teamwork, and
excellence for the development of a healthy and alert citizenry.
▪ ARTICLE XV The Family - The State recognizes the Filipino family as the
foundation of the nation. Accordingly, it shall strengthen its solidarity and actively
promote its total development. Section 2. Marriage, as an inviolable/firm social
institution, is the foundation of the family and shall be protected by the State.
▪ RA No. 9858 is an act providing for the legitimation of children born to
parents below marrying age, amending for the purpose the family code of
the Philippines, as amended.
▪
▪ ARTICLE XVI General Provisions –
▪ it is refers to the flag of the Philippines,
▪ National anthem, or a national seal, which shall be truly reflective and
symbolic of the ideals, history, and traditions of the people, national
anthem, or a national seal, which shall be truly reflective and symbolic of
the ideals, history, and traditions of the people.
▪ The State may not be sued without its consent.
▪ The Armed Forces of the Philippines shall be composed of a citizen armed
force which shall undergo military training and serve, as may be provided
by law.
▪ The State shall establish and maintain one police force
▪ The State shall provide immediate and adequate care, benefits, and other
forms of assistance to war veterans and veterans of military campaigns,
their surviving spouses and orphans.
▪ The State shall, from time to time, review to upgrade the pensions and
other benefits due to retirees of both the government and the private
sectors.
▪ The State shall protect consumers from trade malpractices and from
substandard or hazardous products.

▪ ARTICLE XVII Amendments or Revisions -

- Under Section 1 of Article 17 of the 1987 Constitution, the resolution states that any
amendment to, or revision of, the Constitution may be proposed by: (1) The
Congress, upon a vote of three-fourths of all its Members; or (2) A constitutional
convention.

▪ ARTICLE XVIII Transitory Provisions

▪ Transitory Provisions, Section 5, uses the phrase "for purposes of
synchronization of elections." Thus, the Constitution implicitly places
constitutional value on synchronized elections.