2022 BAR REVIEW LABOR LAW

Handout No. 49
LABOR STANDARDS

Employer-Employee Relationship

To determine the existence of an employer-employee relationship, four elements generally need

to be considered, namely: (1) the selection and engagement of the employee; (2) the payment
of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct. These
elements or indicators comprise the so-called “four-fold” test of employment relationship.
Macasio’s relationship with David satisfies this test. David vs. Macasio, 729 SCRA 67, July 02,
2014

Jurisprudence is replete with circumstances stating that an employer may unilaterally prepare
an employment contract, stating the terms and conditions required of a potential employee,
and that a potential employee had only to adhere to it by signing it.

Such contract is known as a contract of adhesion, which is allowed by law albeit construed in
favor of the employee in case of ambiguity. In Philippine Commercial International Bank v. CA,
255 SCRA 299 (1996), the Court defined in detail the meaning of a contract of adhesion, to wit: A
contract of adhesion is defined as one in which one of the parties imposes a ready-made form of
contract, which the other party may accept or reject, but which the latter cannot modify. One
party prepares the stipulation in the contract, while the other party merely affixes his signature
or his “adhesion” thereto, giving no room for negotiation and depriving the latter of the
opportunity to bargain on equal footing. Nevertheless, these types of contracts have been
declared as binding as ordinary contracts, the reason being that the party who adheres to the
contract is free to reject it entirely. Julius Q. Apelanio vs. Arcanys, Inc., G.R. No. 227098,
November 14, 2018

The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives
his consent.

It bears emphasis that in contracts of adhesion, “[o]ne party prepares the stipulation in the
contract, while the other party merely affixes his signature or his ‘adhesion’ thereto[.]” Besides,
“[t]he one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives
his consent.” In this case, however, it cannot be denied that in the retainership agreements
provided by petitioner, his signature or “adherence” is notably absent. As a result, said
retainership agreements remain ineffectual and cannot be used as evidence against respondents.
Julius Q. Apelanio vs. Arcanys, Inc., G.R. No. 227098, November 14, 2018

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 1 of 10
 2022 BAR REVIEW LABOR LAW
Handout No. 49
LABOR STANDARDS

The “no work no pay” scheme is merely a method of computing compensation, not a basis for
determining the existence or absence of employer-employee relationship.

First, the petitioners engaged the services of the respondent in 1995. Second, the petitioners paid
the respondent a daily wage of P175.00, with allowances ranging from P140.00 to P200.00 per
day. The fact the respondent was paid under a “no work no pay” scheme, assuming this claim to
be true, is not significant. The “no work no pay” scheme is merely a method of computing
compensation, not a basis for determining the existence or absence of employer-employee
relationship. Third, the petitioners’ power to dismiss the respondent was inherent in the fact that
they engaged the services of the respondent as a driver. Finally, a careful review of the record
shows that the respondent performed his work as driver under the petitioners’ supervision and
control. Petitioners determined how, where, and when the respondent performed his task. They,
in fact, requested the respondent to live inside their compound so he (respondent) could be
readily available when the petitioners needed his services. Undoubtedly, the petitioners
exercised control over the means and methods by which the respondent accomplished his work
as a driver. CRC Agricultural Trading vs. National Labor Relations Commission, 609 SCRA 138,
December 23, 2009

A company policy partakes of the nature of an implied contract between the employer and
employee.

Employer statements of policy can give rise to contractual rights in employees without evidence
that the parties mutually agreed that the policy statements would create contractual rights in the
employee, and, hence, although the statement of policy is signed by neither party, can be
unilaterally amended by the employer without notice to the employee, and contains no
reference to a specific employee, his job description or compensation, and although no reference
was made to the policy statement in pre-employment interviews and the employee does not
learn of its existence until after his hiring. The principle is akin to estoppel. Once an employer
establishes an express personnel policy and the employee continues to work while the policy
remains in effect, the policy is deemed an implied contract for so long as it remains in effect. If
the employer unilaterally changes the policy, the terms of the implied contract are also thereby
changed. Abbott Laboratories, Philippines vs. Alcaraz, 701 SCRA 682, G.R. No. 192571 July 23,
2013

To be considered a company practice, the giving of the benefits should have been done over a
long period of time, and must be shown to have been consistent and deliberate. Padillo vs. Rural
Bank of Nabunturan, Inc., 689 SCRA 53, G.R. No. 199338 January 21, 2013

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 2 of 10
 2022 BAR REVIEW LABOR LAW
Handout No. 49
LABOR STANDARDS

As provided by Section 97(f) of the Labor Code, employee’s wage has been defined as
“remuneration of earnings, however designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or for services rendered or to
be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor
and Employment, of board, lodging, or other facilities customarily furnished by the employer
to the employee.”

The respondents can no longer refute Asentista’s entitlement to a discretionary commission since
an admission can already be deduced in their position paper. Moreover, the silence of the
employment agreement including sales commission as part of remuneration does not affect her
entitlement. Asentista vs. Jupp & Company, Inc., 853 SCRA 205, G.R. No. 229404 January 24,
2018

Commissions fall within the definition of wages pursuant to prevailing law and jurisprudence.

In this case, respondent’s monetary claims, such as commissions, tax rebates for achieved
monthly targets, and success share/profit sharing, are given to her as incentives or forms of
encouragement in order for her to put extra effort in performing her duties as an ISE. Clearly,
such claims fall within the ambit of the general term “commissions” which in turn, fall within the
definition of wages pursuant to prevailing law and jurisprudence. Toyota Pasig, Inc. vs. De
Peralta, 807 SCRA 120, G.R. No. 213488 November 7, 2016

A pakyaw or task basis arrangement defines the manner of payment of wages and not the
relationship between the parties.

Payment through pakyaw or task basis is provided for in Articles 97(f) and 101 of the Labor Code:
Article 97. Definitions.—As used in this Title: . . . . (f) “Wage” paid to any employee shall mean
the remuneration or earnings, however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method
of calculating the same, which is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or for services rendered or to
be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor
and Employment, of board, lodging, or other facilities customarily furnished by the employer to
the employee. “Fair and reasonable value” shall not include any profit to the employer, or to any
person affiliated with the employer. . . . . Article 101. Payment by results.—(a) The Secretary of

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 3 of 10
 2022 BAR REVIEW LABOR LAW
Handout No. 49
LABOR STANDARDS

Labor and Employment shall regulate the payment of wages by results, including pakyaw,
piecework, and other nontime work, in order to ensure the payment of fair and reasonable wage
rates, preferably through time and motion studies or in consultation with representatives of
workers’ and employers’ organizations. Abuda vs. L. Natividad Poultry Farms, 870 SCRA 468,
G.R. No. 200712 July 4, 2018

As a general rule, employers are prohibited from withholding wages from employees.

The Labor Code provides: Art. 116. Withholding of wages and kickbacks prohibited.—It shall be
unlawful for any person, directly or indirectly, to withhold any amount from the wages of a
worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by
any other means whatsoever without the worker’s consent. Milan vs. National Labor Relations
Commission, 750 SCRA 1, G.R. No. 202961 February 4, 2015

Any employee could render overtime work only when there was a prior authorization therefor
by the management.

In this case, the NLRC’s reliance on the daily time records (DTRs) showing that Villa had stayed in
the company’s premises beyond eight hours was misplaced. The DTRs did not substantially prove
the actual performance of overtime work. The petitioner correctly points out that any employee
could render overtime work only when there was a prior authorization therefor by the
management. Without the prior authorization, therefore, Villa could not validly claim having
performed work beyond the normal hours of work. Robina Farms Cebu/Universal Robina
Corporation vs. Elizabeth Villa, G.R. No. 175869, April 18, 2016

In claims for payment of salary differential, service incentive leave, holiday pay and 13th month
pay, the burden rests on the employer to prove payment.

This standard follows the basic rule that in all illegal dismissal cases the burden rests on the
defendant to prove payment rather than on the plaintiff to prove nonpayment. This likewise
stems from the fact that all pertinent personnel files, payrolls, records, remittances and other
similar documents — which will show that the differentials, service incentive leave and other
claims of workers have been paid — are not in the possession of the worker but are in the custody
and control of the employer. Reyman G. Minsola vs. New City Builders, Inc., G.R. No. 207613,
January 31, 2018

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 4 of 10
 2022 BAR REVIEW LABOR LAW
Handout No. 49
LABOR STANDARDS

For overtime pay, premium pays for holidays and rest days, the burden is shifted on the
employee, as these monetary claims are not incurred in the normal course of business.

It is thus incumbent upon the employee to first prove that he actually rendered service in excess
of the regular eight working hours a day, and that he in fact worked on holidays and rest days. In
the instant case, the records show that Minsola was given a daily wage of Php260.00, as shown
by his employment contract dated December 16, 2008. It must be noted that this amount falls
below the prevailing minimum wage of Php382.00, mandated by Wage Order No. NCR-15,
effective August 28, 2008 to June 30, 2010. Clearly, Minsola is entitled to salary differentials from
December 16, 2008 until January 19, 2010, in the amount of Php41,616.64. Likewise, Minsola is
entitled to service incentive leave pay differentials in the amount of Php310.00, as the amount
of service incentive leave pay he received on December 19, 2009 was only Php1,600.00, instead
of Php1,900. He is also entitled to a 13th month pay differential of Php2,652.00. Reyman G.
Minsola vs. New City Builders, Inc., G.R. No. 207613, January 31, 2018

The Labor Code prohibits the elimination or diminution of benefits.

Thus: Art. 100. Prohibition against elimination or diminution of benefits.—Nothing in this Book
shall be construed to eliminate or in any way diminish supplements, or other employee benefits
being enjoyed at the time of promulgation of this Code. However, our law supports the
employers’ institution of clearance procedures before the release of wages. As an exception to
the general rule that wages may not be withheld and benefits may not be diminished, the Labor
Code provides: Art. 113. Wage deduction.—No employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages of his employees, except: 1. In cases where the
worker is insured with his consent by the employer, and the deduction is to recompense the
employer for the amount paid by him as premium on the insurance; 2. For union dues, in cases
where the right of the worker or his union to check off has been recognized by the employer or
authorized in writing by the individual worker concerned; and 3. In cases where the employer is
authorized by law or regulations issued by the Secretary of Labor and Employment. Milan vs.
National Labor Relations Commission, 750 SCRA 1, G.R. No. 202961 February 4, 2015

An employee who has served for one (1) year is entitled to service incentive leave (SIL) pay. He
may use it as leave days or he may collect its monetary value.

“Service incentive leave is a right which accrues to every employee who has served ‘within 12
months, whether continuous or broken, reckoned from the date the employee started working,
including authorized absences and paid regular holidays unless the working days in the

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 5 of 10
 2022 BAR REVIEW LABOR LAW
Handout No. 49
LABOR STANDARDS

establishment as a matter of practice or policy, or that provided in the employment contracts, is

less than 12 months, in which case said period shall be considered as one [(1)] year.’ It is also
commutable to its money equivalent if not used or exhausted at the end of the year. HSY
Marketing Ltd. Co. vs. Villastique, 801 SCRA 163, G.R. No. 219569 August 17, 2016

Although the grant of vacation or sick leave with pay of at least five (5) days could be credited
as compliance with the duty to pay service incentive leave (SIL), the employer is still obliged to
prove that it fully paid the accrued SIL pay to the employee.

In this case, the Labor Arbiter originally awarded the service incentive leave pay because the
petitioner did not present proof showing that Villa had been justly paid. The petitioner submitted
the affidavits of Zanoria explaining the payment of service incentive leave after the Labor Arbiter
had rendered her decision. But that was not enough, for evidence should be presented in the
proceedings before the Labor Arbiter, not after the rendition of the adverse decision by the Labor
Arbiter or during appeal. Such a practice of belated presentation cannot be tolerated because it
defeats the speedy administration of justice in matters concerning the poor workers. Robina
Farms Cebu/Universal Robina Corporation vs. Elizabeth Villa, G.R. No. 175869, April 18, 2016

Conditions and leave credits for the following leave benefits

Battered Woman Leave consists often (10) days Leave with pay for Victims of Violence Against
Women and their Children (VAWC) to be granted to women employees who are victims of
physical, sexual, psychological harm or suffering, or economic abuse. The leave benefit shall
cover the days that the woman employee has to attend to medical and legal concerns, provided
that the victim woman employee presents to her employer a certification from the barangay
chairman (Punong Barangay) or barangay kagawad or prosecutor or the Clerk of Court that an
action relative to the matter is pending.

Gynecological leave pertains to the Special Leave for Women of maximum 2 months with full
pay who have rendered continuous aggregate employment service of 6 months for the last 12
months, following surgery caused by gynecological disorders.

Parental leave for solo parents consists of seven (7) days Leave with pay to be granted to a solo
parent to enable him/her to perform parental duties and responsibilities where physical presence
is required provided he/she has: (1) Rendered at least 1 year of service, whether continuous or
broken which includes authorized absences and paid regular holidays; (2) Notified his/her
employer that he/she will avail himself/herself of it, within a reasonable period of time; and (3)

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 6 of 10
 2022 BAR REVIEW LABOR LAW
Handout No. 49
LABOR STANDARDS

Presented Solo Parent Identification Card, which may be obtained from the DSWD office of the
city or municipality where he/she resides.

Expanded maternity leave in the private sector is given to every pregnant employee in the
private sector who shall be entitled to one hundred five (105) days of paid leave benefit for live
childbirth and an additional fifteen (15) days paid leave if the employee qualifies as a solo parent.
Sixty (60) days of paid leave shall be granted in case of miscarriage or emergency termination of
pregnancy. The employee should be an SSS member and must have paid at least 3 monthly
contributions within the 12-month period and must have notified her employer of her pregnancy
and the probable date of childbirth which notice shall be transmitted to the SSS.

Paternity leave pertains to seven (7) days Paternity Leave with pay shall be granted for all
married male employees in the private sector regardless of status of employment, to allow the
husband to lend support to his wife during her period of recovery and/or in nursing her newborn
child, provided he is: (1) An employee at the time of the delivery of his child; (2) Cohabiting with
his spouse at the time that she gives birth or suffers a miscarriage; (3) Applied for paternity leave
with his employer within a reasonable period of time; and (4) His wife has given birth or suffered
a miscarriage. This may be extended to fourteen (14) days should the spouse who will avail of
maternity leave opt to transfer up to seven (7) of her 105 days of paid leave to the child’s father.
The seven (7) day leave may likewise be transferred to the child’s father even if he is not married
to the pregnant employee.

Sexual Harassment, defined

Section 3 of Republic Act 7877 provides:

“SEC. 3. Work, Education or Training-related Sexual Harassment Defined. – Work, education or

training-related sexual harassment is committed by an employer, 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 said Act. “(a) In a work-related or employment environment, sexual harassment is
committed when: “(1) The sexual favor is made as a condition in the hiring or in the employment,
re-employment or continued employment of said individual, or in granting said individual
favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant the
sexual favor results in limiting, segregating or classifying the employee which in any way would

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 7 of 10
 2022 BAR REVIEW LABOR LAW
Handout No. 49
LABOR STANDARDS

discriminate, deprive or diminish employment opportunities or otherwise adversely affect said

employee.” Dr. Rico S. Jacutin vs. People of the Philippines, G.R. No. 140604, March 6, 2002

It is not necessary that the demand, request or requirement of a sexual favor be articulated in
a categorical oral or written statement—it may be discerned, with equal certitude, from the
acts of the offender.

In this case, holding and squeezing Domingo’s shoulders, running his fingers across her neck and
tickling her ear, having inappropriate conversations with her, giving her money allegedly for
school expenses with a promise of future privileges, and making statements with unmistakable
sexual overtones—all these acts of Rayala resound with deafening clarity the unspoken request
for a sexual favor. Ma. Lourdes T. Domingo vs. Rogelio I. Rayala, G.R. Nos. 155831, 155840, and
158700, February 18, 2008

It is not essential that the demand, request or requirement be made as a condition for
continued employment or for promotion to a higher position—it is enough that the
respondent’s acts result in creating an intimidating, hostile or offensive environment for the
employee.

That the acts of Rayala generated an intimidating and hostile environment for Domingo is clearly
shown by the common factual finding of the Investigating Committee, the OP and the CA that
Domingo reported the matter to an officemate and, after the last incident, filed for a leave of
absence and requested transfer to another unit. Ma. Lourdes T. Domingo vs. Rogelio I. Rayala,
G.R. Nos. 155831, 155840, and 158700, February 18, 2008

Gender-based Online Sexual Harassment, defined

Gender-based online sexual harassment refers to an online conduct targeted at a particular

person that causes or likely to cause another mental, emotional or psychological distress, and
fear of personal safety, sexual harassment acts including unwanted sexual remarks and
comments, threats, uploading or sharing of one’s photos without consent, video and audio
recordings, cyberstalking and online identity theft. Section 3(e), RA 11313

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 8 of 10
 2022 BAR REVIEW LABOR LAW
Handout No. 49
LABOR STANDARDS

Gender Identity and/or Expression, defined.

Gender identity and/or expression refers to the personal sense of identity as characterized,
among others, by manner of clothing, inclinations, and behavior in relation to masculine or
feminine conventions. A person may have a male or female identity with physiological
characteristics of the opposite sex in which case this person is considered transgender. Section
3(f), RA 11313

Public Spaces, defined

Public spaces refer to streets and alleys, public parks, schools, buildings, malls, bars, restaurants,
transportation terminals, public markets, spaces used as evacuation centers, government offices,
public utility vehicles as well as private vehicles covered by app-based transport network services
and other recreational spaces such as, but not limited to, cinema halls, theaters and spas. Section
3(g), RA 11313

Specific Acts and Penalties for Gender-Based Sexual Harassment in Streets and Public Spaces

The following acts are unlawful and shall be penalized as follows:

(a) For acts such as cursing, wolf-whistling, catcalling, leering and intrusive gazing,
taunting, pursing, unwanted invitations, misogynistic, transphobic, homophobic, and
sexist slurs, persistent unwanted comments on one’s appearance, relentless requests
for one’s personal details such as name, contact and social media details or
destination, the use of words, gestures or actions that ridicule on the basis of sex,
gender or sexual orientation, identity and/or expression including sexist, homophobic,
and transphobic statements and slurs, the persistent telling of sexual jokes, use of
sexual names, comments and demands, and any statement that has made an invasion
on a person’s personal space or threatens the person’s sense of personal safety –

(1) The first offense shall be punished by a fine of One thousand pesos (₱1,000.00)
and community service of twelve (12) hours inclusive of attendance to a Gender
Sensitivity Seminar to be conducted by the PNP in coordination with the LGU and
the PCW;

(2) The second offense shall be punished by arresto menor (6 to 10 days) or a fine
of Three thousand pesos (₱3,000.00);

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 9 of 10
 2022 BAR REVIEW LABOR LAW
Handout No. 49
LABOR STANDARDS

(3) The third offense shall be punished by arresto menor (11 to 30 days) and a fine
of Ten thousand pesos (₱10,000.00).

(b) For acts such as making offensive body gestures at someone, and exposing private
parts for the sexual gratification of the perpetrator with the effect of demeaning,
harassing, threatening or intimidating the offended party including flashing of private
parts, public masturbation, groping, and similar lewd sexual actions –

(1) The first offense shall he punished by a fine of Ten thousand pesos (₱10,000.00)
and community service of twelve (12) hours inclusive of attendance to a Gender
Sensitivity Seminar, to be conducted by the PNP in coordination with the LGU and
the Philippine Commission on Women (PCW);

(2) The second offense shall be punished by arresto menor (11 to 30 days) or a fine
of Fifteen thousand pesos (₱15,000.00);

(3) The third offense shall be punished by arresto mayor (1 month and 1 day to 6
months) and a fine of Twenty thousand pesos (₱20,000.00).

(c) For acts such as stalking, and any of the acts mentioned in Section 11 paragraphs (a)
and (b), when accompanied by touching, pinching or brushing against the body of the
offended person; or any touching, pinching, or brushing against the genitalia, face,
arms, anus, groin, breasts, inner thighs, face, buttocks or any part of the victim’s body
even when not accompanied by acts mentioned in Section 11 paragraphs (a) and (b) –

(1) The first offense shall be punished by arresto rnenor (11 to 30 days) or a line of
Thirty thousand pesos (₱30,000.00), provided that it includes attendance in a
Gender Sensitivity Seminar, to be conducted by the PNP in coordination with the
LGU and the PCW;

(2) The second offense shall be punished by arresto mayor (1 month and 1 day to
6 months) or a fine of Fifty thousand pesos (₱50,000.00);

(3) The third offense shall be punished by arresto mayor in its maximum period or
a fine of One hundred thousand pesos (₱100,000.00). Section 11, RA 11313

Legal Edge Bar Review 0942 – 949 91 76

legaledge8@gmail.com
0917 – 894 53 56
Page 10 of 10