EMPLOYER-EMPLOYEE RELATIONSHIP SECTION 5. Absolute Prohibition against Labor-only Contracting.
Labor-only contracting, which is totally prohibited, refers to an
A. ELEMENTS
FOUR-FOLD TEST:
1. the manner of selection and engagement of the putative
employee;
2. the payment of wages;
3. the presence or absence of power of dismissal; and,
4. the presence or absence of control of the putative employee’s
conduct.
TWO-TIERED TEST:
1. Control Test – the putative employer’s power to control the
employee with respect to the means and methods by which the
work is to be accomplished; and
2. Economic Reality Test – the underlying economic realities of
the activity or relationship.
 Economic reality depends upon the circumstances of the
whole economic activity, and depends upon several factors
such as:
1) the extent to which the services performed are an
integral part of the employer’s business;
2) the extent of the worker’s investment in equipment
and facilities;
3) the nature and degree of control exercised by the
employer;
4) the worker’s opportunity for profit and loss;
5) the amount of initiative, skill, judgment or foresight
required for the success of the claimed independent
enterprise;
6) the permanency and duration of the relationship
between the worker and the employer; and
7) the degree of dependency of the worker upon the
employer for his continued employment in that line of
business. (most important; also called “economic
dependence test”)
LABOR DISPUTE V. INTRACORPORATE DISPUTE
I. Relationship Test:
A dispute is considered an intra-corporate controversy under
the relationship test when the relationship between or among the
disagreeing parties is any one of the following:
1) between the corporation, partnership, or association and the
public;
2) between the corporation, partnership, or association and
its stockholders, partners, members, or officers;
3) between the corporation, partnership, or association and the
State as far as its franchise, permit or license to operate is
concerned; and
4) among the stockholders, partners, or associates themselves.
II. Nature of Controversy Test:
The disagreement must not only be rooted in the existence of an
intra-corporate relationship, but must as well pertain to the
enforcement of the parties' correlative rights and obligations under
the Corporation Code and the internal and intra-corporate regulatory
rules of the corporation
B. INDEPENDENT CONTRACTORS AND LABOR-ONLY
CONTRACTORS
When the principal is deemed as the direct employer, per DO
174-171:
1. If there is a finding that the contractor or subcontractor is
merely a labor-only contractor, as provided in Sections 05
and 08; (Sec 07)
arrangement where:
a)
1. The contractor or subcontractor does not have
substantial capital; OR
o “substantial capital”, as defined under Sec 03:
 for corporations, partnerships, and
cooperatives: paid-up capital stock/shares of
P5MILLION
 for sole proprietorships: net worth of at least
P5MILLION
2. The contractor or subcontractor does not have
investments in the form of tools, equipment,
machineries, supervision, work premises, among
others; AND
3. The contractor's or subcontractor’s employees
recruited and placed are performing activities which
are directly related to the main business operation of
the principal;
OR
b) The contractor or subcontractor does not exercise the right
to control over the performance of the work of the
employee.
NOTE: per Quintanar v CCBPI and Atty Quan, disregard
conjunctions. Treat everything as “OR”
2. If there is a finding that the contractor or subcontractor is
engaged in other illicit forms of employment arrangements
under Section 06; (Sec 07)
a) When the principal farms out work to a “Cabo”.
b) Contracting out of job or work through an in-house
agency.
c) Contracting out of job or work through an in-house
cooperative which merely supplies workers to the
principal.
d) Contracting out of a job or work by reason of a strike or
lockout whether actual or imminent.
e) Contracting out of a job or work being performed by union
members and such will interfere with, restrain or coerce
employees in the exercise of their rights to self-
organization as provided in Article 259 of the Labor Code,
as amended.
f) Requiring the contractor’s/subcontractors employees to
perform functions which are currently being performed by
the regular employees of the principal.
g) Requiring the contractor’s/subcontractor’s employees to
sign, as a precondition to employment or continued
employment, an antedated resignation letter; a blank
payroll; a waiver of labor standards including minimum
wages and social or welfare benefits; or a quitclaim
releasing the principal or contractor from liability as to
payment of future claims; or require the employee to
become member of a cooperative.
h) Repeated hiring by the contractor/subcontractor of
employees under an employment contract of short
duration.
i) Requiring employees under a contracting/subcontracting
arrangement to sign a contract fixing the period of
employment to a term shorter than the term of the Service
Agreement, unless the contract is divisible into phases for
which substantially different skills are required and this is
made known to the employee at the time of engagement.
j) Such other practices, schemes or employment
arrangements designed to circumvent the right of workers
to security of tenure.
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3. Violation of the rights of the contractor’s or subcontractor’s
employees as enumerated in Section 10; (Sec 12)
a) Safe and healthful working conditions;
b) Labor standards, such as but not limited to SIL, rest days,
OT pay, holiday pay, 13th month pay, and separation pay;
c) Social security and welfare benefits; and
d) Self-organization, collective bargaining and peaceful
concerted activities including the right to strike.
4. Violation of the required contracts under Section 11; (Sec
12).
1. Employment contract between contractor and employees,
specifying:
a) the specific description of the job or work to be
performed by the employee; and
b) the place of work and terms of condition of
employment, including wage rate applicable
o contractor must inform employee of the foregoing
stipulations in writing on or before the first day of
his/her employment
2. Service Agreement between contractor and principal,
specifying:
a) specific description of the job or work being
contracted, including its term or duration;
b) place or work and terms and conditions governing the
contracting arrangement, to include the agreed amount
of the contracted job or work as well as the standard
administrative fee of not less than 10% of the total
contract cost; and
c) a provision on the issuance of the bond/as defined in
Sec 3(a) renewable every year.
DO 174-171 not applicable to: CISOP
1. Contracting or subcontracting arrangements in the Construction
Industry, under the licensing coverage of the PCAB; (Sec 33 of
DO 174-17)
2. Information technology-enabled services involving an entire
or specific business process such as:
a) Business Process Outsourcing, Knowledge Process
Outsourcing, Legal Process Outsourcing;
b) IT Infrastructure Outsourcing;
c) Application Development;
d) Hardware and/or Software Support;
e) Medical Transcription;
f) Animation Services;
g) Bank Office Operations/Support
3. Private Security Agencies (except for the registration
requirements);
4. Other contractual relationships, such as:
a) Contract of sale or purchase;
b) Contract of lease;
c) Contract of carriage;
d) Contract growing/growership agreement;
e) Toll manufacturing
f) Contract of management, operation and maintenance;
and
g) Such other contracts governed by the Civil Code and
other special laws.
5. Contracting out of job or work to a professional, or individual
with unique skills and talents who himself or herself performs
the job or work for the principal.
CLASSES OF EMPLOYEES
1. regular employees or those who have been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer;
a) regular by nature of work
b) regular by length of service
c) regular by virtue of CBA
2. project employees or those whose employment has been fixed
for a specific project or undertaking, the completion or
termination of which has been determined at the time of the
engagement of the employee;
 2 requisites:
a) specific undertaking/task;
b) duration/completion made known at the time of
engagement
o Exception: Maraguinot, Jr. v. National Labor
Relations Commission:
Once a project or work pool employee has been:
(1) continuously, as opposed to intermittently, re-
hired by the same employer for the same tasks or
nature of tasks; and
(2) these tasks are vital, necessary and
indispensable to the usual business or trade of the
employer, then the employee must be deemed a
regular employee.
o Note, however, that the Maraguinot doctrine does not
apply to employees in the construction industry. Mere
rehiring of respondent on a project-to-project basis did
not confer upon him regular employment status. The
practice was dictated by the practical consideration
that experienced construction workers are more
preferred.
 2 types of projects:
a) within regular course of business, but distinct and
separate and identifiable as such;
b) not within the regular course of business, also
identifiable and distinct
 2 types of employees in construction industry:
a) project – those employed in connection with a
particular construction project and whose
employment is co-terminous with it;
b) non-project – those employed without reference
to any particular project. (deemed as regular)
3. seasonal employees or those who work or perform services
which are seasonal in nature, and the employment is for the
duration of the season; and
4. casual employees or those who are not regular, project, or
seasonal employees.
5. Jurisprudence later added a fifth (5 th) kind, the fixed-term
employee
 Requisites:
1) The fixed period of employment was knowingly and
voluntarily agreed upon by the parties without any force,
duress, or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his
consent; or
2) It satisfactorily appears that the employer and the
employee dealt with each other on more or less equal terms
with no moral dominance exercised by the former or the
latter.
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Teachers and professors
Requisites before a private school teacher acquires permanent status:
(1) the teacher is a full-time teacher;
(2) the teacher must have rendered:
a) for elementary and secondary level: three consecutive years
of service;
b) tertiary: 6 consecutive semesters or 9 consecutive
trimesters, as the case may be.
(3) such service must have been satisfactory
WAGES
A. CONCEPT AND DEFINITION
ART. 97. Definitions.
As used in this Title:
"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.
Sec. 4. Cash Wage.
The minimum wage rates prescribed in Sec. 1 hereof shall be basic,
cash wages without deducting therefrom whatever benefits,
supplements or allowances which the employees enjoy free of charge
aside from the basic pay.
An employer may provide subsidized meals and snacks to his
employees provided that the subsidy shall not be less than 30% of the
fair and reasonable value of such facilities. In such case, the employer
may deduct from the wages of the employees not more than 70% of
the value of the meals and snacks enjoyed by the employees,
provided that such deduction is with the written authorization of the
employees concerned.
Facilities
 articles or services for the benefit of the employee or his family
but shall not include tools of the trade or articles or services
primarily for the benefit of the employer or necessary to the
conduct of the employer’s business.
 The fair and reasonable value of facilities is hereby determined
to be the cost of operation and maintenance, including adequate
depreciation plus reasonable allowance (but not more than 5 1/2
% interest on the depreciated amount of capital invested by the
employer);
 provided that if the total so computed is more than the fair rental
value (or the fair price of the commodities or facilities offered
for sale) the fair rental value (or the fair price of the
commodities or facilities offered for sale) shall be the reasonable
cost of the operation and maintenance. The rate of depreciation
and depreciated amount computed by the employer shall be
those arrived at under good accounting practices.
REQUISITES FOR DEDUCTION OF FACILITIES (Mabeza v
NLRC)
1. First, proof must be shown that such facilities are
customarily furnished by the trade;
2. Second, the provision of deductible facilities must be
voluntarily accepted in writing by the employee;
3. Finally, facilities must be charged at fair and reasonable
value.
Supplements
 constitute extra remuneration or special privileges or benefits
given to or received by labourers over and above their ordinary
earnings or wages.
B. WAGE-FIXING
The minimum wage rates for agricultural and non-agricultural
employees and workers in each and every region of the country shall
be those prescribed by the Regional Tripartite Wages and
Productivity Boards.
 issues wage orders subject to Guidelines by the NWPC
 no authority to grant across the board increases
National Wages and Productivity Commission, among others:
a) prescribes rules and guidelines for the determination of
appropriate minimum wage and productivity measures at the
regional, provincial, or industry levels;
b) reviews regional wage levels set by the Regional Tripartite
Wages and Productivity Boards to determine if these are in
accordance with prescribed guidelines and national development
plans
The determination of wages has generally involved two methods:
1. the "floor-wage" method
o fixing of determinate amount that would be added to
the prevailing statutory minimum wage
2. the "salary-ceiling" method
o whereby the wage adjustment is applied to employees
receiving a certain denominated salary ceiling
ART. 124. Standards/Criteria for minimum wage fixing. The
regional minimum wages to be established by the Regional Board
shall be as nearly adequate as is economically feasible to maintain
the minimum standards of living necessary for the health,
efficiency and general well-being of the employees within the
framework of the national economic and social development
program. In the determination of such regional minimum wages, the
Regional Board shall, among other relevant factors, consider the
following:  
(a) The demand for living wages;
(b) Wage adjustment vis-a-vis the consumer price index;
(c) The cost of living and changes or increases therein; (most
important according to Atty Quan)
(d) The needs of workers and their families;
(e) The need to induce industries to invest in the countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested and capacity to pay of
employers;
(i) Effects on employment generation and family income; and
(j) The equitable distribution of income and wealth along the
imperatives of economic and social development.
RA 8188:
Any person, corporation, trust, firm, partnership, association or entity
which refuses or fails to pay any of the prescribed increases or
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adjustments in the wage rates made in accordance with this Act shall 1. Existing hierarchy of positions with corresponding salary rates;
be punished by a fine not less than Twenty- five thousand pesos 2. Significant change in the salary rate of a lower pay class
(P25,000) nor more than One hundred thousand pesos (P100,000) or without the concomitant increase in the higher one;
imprisonment of not less than two (2) years nor more than four (4) 3. Elimination of the distinction between the two levels;
years, or both such fine and imprisonment at the discretion of the 4. The existence of the distortion in the same region of the
court: Provided, That any person convicted under this Act shall not country.
be entitled to the benefits provided for under the Probation Law.
Correction of Pay Structure:
"The employer concerned shall be ordered to pay an amount Min Wage
equivalent to double the unpaid benefits owing to the employees: ---------------------- = %
Provided, That payment of indemnity shall not absolve the employer Actual Salary
from the criminal liability imposable under this Act.
% x Prescribed Increase Adjustment = Distortion
"If the violation is committed by a corporation, trust or firm,
partnership, association or any other entity the penalty of C. PAYMENT OF WAGES
imprisonment shall be imposed upon the entity's responsible officers,
including, but not limited to, the president, vice-president, chief I. Form: Legal Tender
executive officer, general manager, managing director or partner."  Exception: payment through checks allowed in the ff cases
– CCR (1PRC):
R.A. 9178: BARANGAY MICRO BUSINESS ENTERPRISES (BMBE'S) 1. CUSTOMARY at the date of effectivity of Labor Code
ACT OF 2002 – BMBES exempt from coverage of minimum wage 2. Stipulation in a COLLECTIVE agreement
law 3. When the ff REQUISITES concur: (1PRC)
a) There is a bank or other facility for encashment
NWPC GUIDELINES NO. 2, SERIES OF 2012, GUIDELINES ON THE within a radius of 1 km from the workplace;
IMPLEMENTATION OF THE TWO-TIERED WAGE SYSTEM: b) The employer or any of his agents or representatives
Two-tiered wage system refers to a pay system consisting of: does not receive any pecuniary benefit directly or
1. First tier – minimum wage as set by Regional Tripartite Wages indirectly from the arrangement;
and Productivity Boards c) The employees are given reasonable time during
2. Second tier – incentive pay based on productivity improvement banking hours to withdraw their wages from the bank
and gainsharing which time shall be considered as compensable hours
worked if done during working hours; &
d) The payment by check is with the written consent of
CURRENT DAILY MINIMUM WAGE RATES the employees concerned if there is no collective
Per Wage Order No. NCR-22  agreement authorizing the payment of wages by bank
(Effective: 22 November 2018) checks.
Sector/Industry Basic Basic New
Wage/Integration Wage Minimum II. Time of payment: once every 2 weeks or twice a month at
of COLA Increase Wage intervals not exceeding 16 days
Rates  Exceptions: FCP
Non-Agriculture ₱512.00 ₱25.00 ₱537.00 1. Force majeure or circumstances beyond the control
of the employer – pay immediately after the
Agriculture ₱475.00 ₱25.00 ₱500.00 circumstances have ceased
(Plantation and 2. Payment by results where the work cannot be
Non Plantation) completed within 2 weeks:
a) Pay at intervals not exceeding 16 weeks in
Retail/Service proportion to work performed
Establishments b) Final settlement immediately upon
employing 15 completion of work
workers or less
Manufacturing III. Place of payment: at or near the place of undertaking
Establishments  Exceptions: OBA
regularly 1. Payment in other places – DEFA
employing less a) Deterioration of peace and other or actual or
than impending emergencies caused by calamities;
10 workers b) Employer provides free transporation;
c) Under any other analogous circumstances
PROVIDED:
WAGE DISTORTION a) the time spent by the employees in collecting
their wages shall be considered as compensable
 wage distortion shall mean a situation where an increase in hours worked;
prescribed wage rates results in the elimination or severe b) No employer shall pay his employees in any bar,
contraction of intentional quantitative differences in wage or night or day club, drinking establishment,
salary rates between and among employee groups in an massage clinic, dance hall, or other similar
establishment as to effectively obliterate the distinctions places or in places where games are played with
embodied in such wage structure based on skills, length of stakes of money or things representing money
service, or other logical bases of differentiation.  except in the case of persons employed in said
places.
Elements: HSER 2. Payment through banks: P251
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 a) Written permission of majority of employees
concerned;
b) Establishment must have 25 employees or more
c) Establishment located within 1km radius to the
bank
3. Payment through ATM: CRAP1RR
IV. To whom: directly to the workers to whom they are due
 Exceptions:
1. Payment through another person under written authority for
that purpose – force majeure or other circumstances
determined by Secretary of Labor:
a) Insurance premiums
b) Union dues where the right to check-off has been
recognized in accordance with collective
agreement
c) Authorized in writing by the individual
employees concerned
2. Payment through heirs – when the worker has died
3. Payment through member of worker’s family – employer
authorized in writing by the employee to pay his wages to a
member of the family
V. Prohibitions:
1. Non-interference in disposal of wages
 No employer shall limit or otherwise interfere
with the freedom of any employee to dispose of
his wages
 No employer shall in any manner oblige any of
his employees to patronize any store or avail of
the services offered by any person.
2. Wage deduction
 No employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages of
his employees
 Exceptions:
1) Authorized by law: payment of premiums
(w/ consent) and payment of union dues
(right to check off recognized or authorized
in writing)
2) Payment to a third person with the written
authorization of employee and no pecuniary
benefit to the employer
3. Deduction to ensure employment
4. Deposits for loss or damage
 Exceptions:
1) when the employer is engaged in such
trades, occupations or business where the
practice of making deductions or requiring
deposits is a recognized one; or
Requisites: ROF20
a) That the employee concerned is clearly
shown to be responsible for the loss or
damage;
b) That the employee is given reasonable
opportunity to show cause why
deduction should not be made;
c) That the amount of such deduction is
fair and reasonable and shall not
exceed the actual loss or damage; and
d) That the deduction from the wages of
the employee does not exceed 20
percent of the employee's wages in a
week.
2) is necessary or desirable as determined by
the Secretary of Labor and Employment in
appropriate rules and regulations
 trade example: private security agencies (Labor
Advisory No 11-14)
5. Withholding of wages & kickbacks
 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.
 Exception: clearance procedure before the the
release of wages and other benefits (Milan v NLRC)
6. Retaliatory measures
 It shall be unlawful for an employer to refuse to pay
or reduce the wages and benefits, discharge or in
any manner discriminate against any employee who
has filed any complaint or instituted any proceeding
under this Title or has testified or is about to testify
in such proceedings.
7. False reporting
 it shall be unlawful for any person to make any
statement, report, or record filed or kept pursuant to
the provisions of this Code knowing such
statement, report or record to be false in any
material respect.
D. 13TH MONTH PAY
All employers required to pay all rank-and-file employees a 13 th
month pay not later than December 24 every year, provided the
employees worked at least 1 month during the calendar year.
Exempted Employers: GAHSP
The ff. employers are still not covered by P.D. No. 851:
a. The Government and any of its political subdivisions, including
GOCCs, excepts those corporations operating essentially as
private subsidiaries of the Government;
b. Employers already paying their employees a 13th month pay or
more in a calendar year or its equivalent at the time of this
issuance;
o term "its equivalent" shall include Christmas bonus, mid-
year bonus, cash bonuses and other payments amounting to
not less than 1/12 of the basic salary
o includes: Christmas, Milling and Amelioration bonus, year-
end productivity bonus (National Federation v Overeja;
DOLE v Leogardo)
o if bonus is granted under the CBA and not based on work
performed, not included (Universal Corn v NLRC)
o but shall not include cash and stock dividends, COLA and
all other allowances regularly enjoyed by the employee, as
well as non-monetary benefits.
o
c. Employers of household helpers and persons in the personal
service of another in relation to such workers; and
d. Employers of those who are paid on purely commission,
boundary, or task basis, and those who are paid a fixed amount
for performing specific work, irrespective of the time consumed
in the performance thereof,
EXCEPT where the workers are paid on piece-rate basis in
which case the employer shall grant the required 13th month pay
to such workers.
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 o workers paid on piece-rate basis shall refer to those who are
paid a standard amount for every piece or unit of work
produced that is more or less regularly replicated, without
regard to the time spent in producing the same.  enter into agreements with the employer for reduction of
Amount to be paid: 1/12 of the basic salary earned by an
employee within a calendar year
 Basic salary - include all remunerations or earning paid by this
employer for services rendered
 does not include allowances and monetary benefits which
are not considered or integrated as part of the regular or
basic salary, such as the cash equivalent of unused vacation
and sick leave credits, overtime, premium, night differential
and holiday pay, and cost-of-living allowances.
 However, these salary-related benefits should be included
as part of the basic salary in the computation of the 13th
month pay if by individual or collective agreement,
company practice or policy, the same are treated as part of
the basic salary of the employees
Time of Payment: not later than December 24 of each year.
 An employer, however, may give to his employees ½ of the
required 13th month pay before the opening of the regular
school year and the other half on before the 24th of December of
every year.
 The frequency of payment of this monetary benefit may be the
subject of agreement between the employer and the
recognized/collective bargaining agent of the employees.
Special feature of benefit: 13th month pay shall not be credited as
part of the regular wage of the employees for purposes of determining
overtime and premium pay, fringe benefits, as well as premium
contributions to the State Insurance Fund, social security, medicare
and private welfare and retirement plans.
E. SERVICE CHARGE
RA 11360, amended Art 96 of the Labor Code:
All service charges collected by hotels, restaurants, and similar
establishments shall be distributed completely and equally among
the covered workers, except managerial employees.
In the event that the minimum wage is increased by law or wage
order, service charges paid to the covered employees shall NOT be
considered in determining the employer’s compliance with the
increased minimum wage.
Approved: August 07 2019
Note: service charge different from tips
 Tips – not normally part of the salary; given voluntarily by the
customers;
 Service charge – part of the cost of the food, goods, or services
ordered by the customers.
F. NON-DIMINUTION
Non-diminution rule – any benefit and supplement being enjoyed by
employees cannot be reduced, diminished, discontinued or eliminated
by the employer (Arco Metal Products v Samahan)
There is diminution of benefits when: PUMC
1) The grant or benefit is founded on a policy (CBA or contract) or
has ripened into a practice over a long period of time;
O “long period of time” – 2 years sufficient (Sevilla Trading
Co v Semana)
2) The diminution or discontinuance is done unilaterally by the
employer.
O Thus, employees not prohibited and will be bound if they
certain benefits (Insular Hotel Union v Waterfront Hotel)
3) The benefit pertains to a monetary benefit or a privilege with
monetary equivalent (Royal Plant Workers Union v CCBPI);
4) The practice is consistent and deliberate;
O Thus, if granted because of a mistake or error in a doubtful
or difficult question of law, it is not company practice
(Globe Mackay v NLRC)
American Wire & Cable Daily Union v American Wire
General Rule: non-diminution not applicable to bonuses
 Grant is a management prerogative; something given in addition
to what is ordinarily received. Thus, not a demandable and
enforceable obligation
Exception:
a) when it was promised to be given without any conditions
imposed for its payment in which case it is deemed part of
the wages; or
b) it must have had a fixed amount and had been a long and
regular practice on the part of the employer.
G. WORKER PREFERENCE
ART. 110. WORKER PREFERENCE IN CASE OF BANKRUPTCY. –
In the event of bankruptcy or liquidation of an employer's business,
his workers shall enjoy first preference as regards their unpaid wages
and other monetary claims, any provision of law to the contrary
notwithstanding.
Such unpaid wages and monetary claims shall be paid in full before
the claims of the Government and other creditors may be paid.
DBP v Labor Arbiter: institution of bankruptcy or judicial liquidation
proceedings necessary before preferential credit under Art 110 may
be enforced.
H. ATTORNEY’S FEES
ART. 111. ATTORNEY’S FEES. –
(a) In cases of unlawful withholding of wages, the culpable party may
be assessed attorney’s fees equivalent to ten percent of the amount of
wages recovered.
(b) It shall be unlawful for any person to demand or accept, in any
judicial or administrative proceedings for the recovery of wages,
attorney’s fees which exceed ten percent of the amount of wages
recovered.
WORKING CONDITIONS
A. MANAGEMENT PREROGATIVE
An employer is free to regulate according to his own discretion and
judgment all aspects of employment, from hiring to firing.
Limitations:
1. Must be exercised in good faith
2. Not exercised for the purpose of circumventing:
a) employee’s rights under the law; or
b) employee’s rights under valid agreements like the CBA;
c) law, morals, good custom, public policy, or public order.
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3. Principles of justice and fair play.

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 B. COVERAGE o David v. Macasio (benefits entitled to pakyaw basis
ART. 82. COVERAGE. - The provisions of this Title* shall apply to workers):
employees in all establishments and undertakings whether for profit The payment of an employee on task or pakyaw basis alone
or not, but not to: GMFFDSP is insufficient to exclude one from the coverage of SIL and
holiday pay. They are exempted from the coverage of Title
1. government employees; I (including the holiday and SIL pay) only if they qualify as
"field personnel.”
2. managerial employees; o Entitled to SIL, Holiday Pay. NOT entiled to 13th month.
o "managerial employees" refer to those whose primary duty
consists of the management of the establishment in which
they are employed or of a department or subdivision
thereof, and to other officers or members of the managerial
staff.

o “members of the managerial staff” - they perform the

following duties and responsibilities:
a) The primary duty consists of the performance of work
directly related to management policies of their
employer;
b) Customarily and regularly exercise discretion and
independent judgment; and
c) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists of
the management of the establishment in which he is
employed or subdivision thereof; or
(ii) execute under general supervision work along
specialized or technical lines requiring special training,
experience, or knowledge; or
(iii) execute, under general supervision, special
assignments and tasks; and

d) Who do not devote more than 20 percent of their hours

worked in a work week to activities which are not
directly and closely related to the performance of the
work described in paragraphs (1), (2) and (3) above.

3. field personnel;
o "Field personnel" shall refer to non-agricultural employees
who:
a) regularly perform their duties away from the principal
place of business or branch office of the employer; and
b) whose actual hours of work in the field cannot be
determined with reasonable certainty.

4. members of the family of the employer who are dependent on him

for support;

5. domestic helpers;
o any person, whether male or female, who renders services
in and about the employer’s home and which services are
usually necessary or desirable for the maintenance and
enjoyment thereof, and ministers exclusively to the
personal comfort and enjoyment of the employer’s family.
o The definition does not cover include househelp or laundry
women working in staffhouses of a company.

6. persons in the personal service of another; and

7. workers who are paid by results as determined by the Secretary of

Labor in appropriate regulations.
o including those who are paid on piece-work, "takay,"
"pakiao" or task basis, and other non-time work if their
output rates are in accordance with the standards prescribed
under Section 8, Rule VII, Book Three of these regulations,
or where such rates have been fixed by the Secretary of
Labor and Employment in accordance with the aforesaid
Section.

ZABALA 3D 2021