We humbly ask for peace

in our hearts, our bodies, our minds, and our

souls, as we wait patiently and confidently.

Not once did you leave us despite our failures and sins.
We recognize and accept the death of your Son, Jesus on the
cross, as a symbol of your unconditional love for us. We thank
you for the assurance of eternal life upon acceptance of Jesus
as our Savior.

Father, we humbly come before you as one family to ask that for your
Divine providence we implore the help of the Holy Spirit to work in
the hearts of those who are preparing for the 2021 Bar
Examination, especially members of our Bedan family.
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 LABOR LAW

I. FUNDAMENTAL PRINIPLES AND CONCEPTS ......................................................... 1

A. LEGAL BASIS ............................................................................................................... 1
B. STATE POLICY TOWARDS LABOR........................................................................... 1
II. PRE-EMPLOYMENT ........................................................................................................ 2
A. Recruitment and Placement of Local and Migrant Workers.............................. 2
B. Employment of Non-Resident Aliens .................................................................... 9
C. Discriminatory Practices .......................................................................................... 9
III. Employment Proper ....................................................................................................10
A. Management Prerogative ...................................................................................... 10
B. Labor Standards ...................................................................................................... 14
C. Social Welfare Legislation ..................................................................................... 24
D. Labor Relations........................................................................................................ 35
IV. Post-Employment.........................................................................................................50
A. Employer-Employee Relationship ........................................................................ 50
B. Termination of Employment by Employer .......................................................... 55
C. Termination of Employment by Employee ......................................................... 63
D. Preventive Suspension ........................................................................................... 65
E. Retirement ............................................................................................................... 67
V. Jurisdiction and Reliefs ..............................................................................................68
A. Labor Arbiter ............................................................................................................ 68
B. National Labor Relations Commission................................................................. 71
C. Bureau of Labor Relations ..................................................................................... 74
D. National Conciliation and Mediation Board ....................................................... 74
E. DOLE Regional Directors ....................................................................................... 75
F. DOLE Secretary ....................................................................................................... 76
G. Voluntary Arbitrator ............................................................................................... 76
H. Prescription of Actions ........................................................................................... 77
 1

I. LABOR LAW AND SOCIAL LEGISLATION

A. FUNDAMENTAL PRINCIPLES AND CONCEPTS
(1) Who are not covered by the Labor Code? (CELFIG)
The following persons and entities are not covered by the Labor Code:
1. Corporate officers involved in intra-corporate disputes under PD 902-A fall under the jurisdiction of Regular
Courts in accordance with the Securities Regulation Code (SRC) (Nacpil v. IBC, G.R. No. 144767, March
21, 2002);
2. Employees of GOCCs created by special or original charter. Such employees are governed by the Civil
Service (Juco v. NLRC, G.R. No. 98107, August 18, 1997);

Note: The phrase “with original charter” refers to corporations chartered by special law as distinguished
from corporations organized under the Corporation Code (NASECO v. NLRC, G.R. No. L-69870,
November 29, 1988).

3. Local water districts (Tanjay Water District v. Gabaton, G.R. Nos. L-63742 and 84300, April 17, 1989);

Note: An exception is when NLRC jurisdiction is voluntarily invoked to secure affirmative relief, the party
is estopped from denying that very same jurisdiction (Zamboanga City Water District v. Buat, G.R. No.
104389, May 27, 1994).

4. Foreign governments (JUSMAG-PHL v. NLRC, G.R. No. 108813, December 15, 1994);
5. International Agencies (Lasco v. UNRFNRE, G.R. Nos. 109095-109107, February 23, 1995) and
employees of intergovernmental or international organizations (SEAFDEC-AQD v. NLRC, G.R. No. 86773,
February 14, 1992); and
6. Government agencies which are covered by the civil service rules and regulations (CONST., Article IX-B,
Sec. 2).

B. STATE POLICY TOWARDS LABOR

(2) What is the basic policy on labor?
The State shall afford protection to labor, promote full employment, equal work opportunities regardless of sex,
race or creed and regulate the relations between workers and employers. The State shall assure the rights of
workers to self-organization, collective bargaining, security of tenure and just and humane conditions of work
(LABOR CODE, Art. 3).

(3) How is social justice applied to labor?

Social justice should be used only to correct an injustice. It must be founded on the recognition of the necessity
of interdependence among diverse units of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life (Agabon v. NLRC, G.R. No. 158693,
November 17, 2004).

(4) How are the provisions of the Labor Code construed?

All doubts in the implementation and interpretation of the provisions of the Labor Code, including its
implementing rules and regulations, shall be resolved in favor of labor (LABOR CODE, Art. 4).

(5) A was employed by X Company as a sales assistant. M, the store manager, accused A of stealing
money from the cashier box and thereafter dismissed A. In the illegal dismissal case filed by A before
the LA, A denied the allegations. In ruling in favor of A, the LA held that the sole testimony of B was
doubtful and thus applied Article 4 of the Labor Code in the appreciation of the evidence in favor of A
as a laborer. On appeal to the NLRC, the decision of the Labor Arbiter was reversed when it was held
that Article 4 cannot be applied if the doubt relates to the evidence. NLRC explained that Article 4
applies only when the doubt involves the “implementation and interpretation” of the Labor Code
provisions. Is the NLRC correct?
No, the NLRC is not correct. Article 4 of the Labor Code provides that all doubts in the implementation and
interpretation of the provisions of the Labor Code shall be resolved in favor of labor. The rule enunciated in
Article 4 of the Labor Code has been consistently applied in the appreciation of evidence in labor proceedings.
Thus, the consistent rule is that if doubt exists between the evidence presented by the employer and that by
 2

the employee, the scales of justice must be tilted in favor of the latter. In the case at bar, M failed to establish
his accusation with substantial evidence. As between the bare allegation of M and the clear denial of A, the
scales of justice shall be tilted in favor of A (Dreamland Hotel Resort v. Johnson, G.R. No. 191455, March 12,
2014).

(6) What is the quantum of evidence required in Labor cases?

The party-litigant who alleges the existence of a fact or thing necessary to establish his/her claim has the
burden of proving the same by the amount of evidence required by law, which, in labor proceedings, is
substantial evidence, or such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion (JR Hauling Services v. Solamo, G.R. No. 214294, September 30, 2020, Hernando Case).

(7) S, along with others, were employed by J Services as driver/helper. J Services dismissed them from
employment without notice and hearing and/or investigation, and without any valid reason. An illegal
dismissal case was filed. J Services presented the affidavits of S’ co-employees purporting to
anomalous transactions committed by S to substantiate the just cause for S’ dismissal. The LA ruled
that the sworn statements submitted by J Services were inadmissible for being hearsay and self-
serving. J Services now avers that the LA should not have confined himself to technical rules on
evidence. Is J Services correct?
Yes, the rules on evidence should not be strictly applied. Administrative bodies like the NLRC are not bound
by the technical niceties of law and procedure and the rules obtaining in courts of law. Indeed, the Revised
Rules of Court and prevailing jurisprudence may be given only stringent application, i.e., by analogy or in a
suppletory character and effect. Thus, in labor cases, affidavits may be sufficient to establish substantial
evidence (JR Hauling Services v. Solamo, G.R. No. 214294, September 30, 2020, Hernando Case).

II. PRE-EMPLOYMENT
A. RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT
WORKERS
(8) H was introduced to M as a person who can facilitate papers for workers. During a meeting, H explained
the requirements for working as a teaching personnel in UK. H also showed pictures of other people
she had supposedly helped to get employment. With such representations, M agreed to apply for work
in the UK. M paid Php150,000 for which H promised to personally process the visa application. After
repeated but vain follow-ups, M discovered that H did not have any license or authority to recruit. In
the case for illegal recruitment, H did not dispute her lack of license or authority to conduct recruitment
activities, but she maintained that the transaction was only for securing a visa which did not qualify as
a “recruitment activity”. Is the argument of H tenable?
The argument is not tenable. Illegal recruitment is committed by persons who, without authority from the
government, give the impression that they have the power to send workers abroad for employment purposes.
Non-license holders are liable by the simple act of engaging in recruitment and placement activities. Under
Article 13(b) of the Labor Code of the Philippines, recruitment and placement refers to “any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring workers, and includes referrals, contact
services, promising or advertising for employment, locally or abroad, whether for profit or not. It is the absence
of the necessary license or authority to recruit and deploy workers that renders the recruitment activity unlawful.
To prove illegal recruitment, it must be shown that the accused gave the complainants the distinct impression
that she had the power or ability to deploy the complainants abroad in a manner that they were convinced to
part with their money for that end (People v. Erlinda A. Sison “Margarita S. Aguilar”, G.R. No. 187160, August
9, 2017).

(9) L, T, and E, were promised by M employment in Australia, upon payment of placement fee which varied
from Php65,000 to Php160,000. The receipts evidencing payment were all signed by M as “TR”. They
were asked to undergo trainings and were solicited of other various fees. Nevertheless, all their
deployments did not take place. M was neither licensed nor authorized to recruit workers for overseas
employment. M was charged with Illegal Recruitment in Large Scale and Estafa under Article 315, par.
2(a) of the Revised Penal Code. Can M be convicted of both offenses?
Yes, M can be convicted of Illegal Recruitment in Large Scale and Estafa under Article 315, par. 2(a) of the
Revised Penal Code. Jurisprudence is settled that a person, for the same acts, may be convicted separately
for Illegal Recruitment under RA 8042 (or the Labor Code), and Estafa under Article 315(2)(a) of the RPC. In
estafa, damage is essential, but not in the crime of illegal recruitment. As to the latter, it is the lack of the
 3

necessary license or authority, but not the fact of payment that renders the recruitment activity as unlawful
(People v. Manalang, G.R. No. 198015; January 20, 2021, Hernando Case).

(10) L met with C, J, A, and CC and promised them employment abroad. L informed the four that she has a
sister in Japan who knew a lot of people who owned noodle factories where they could work as factory
workers. She asked for processing fees, visa application fees, and payment for plane tickets. Receipts
were not issued for any payment. On the scheduled date for their departure, L informed them that their
flight would be cancelled because her sister would come home soon. It turned out that there were no
plane tickets, visas, passports, or job orders from prospective employers in Japan. Upon her refusal
to reimburse the amounts paid, L was charged with Illegal Recruitment in Large Scale and Estafa. L
contends that the second element of Estafa, i.e., prejudice or pecuniary loss, was not proven since the
prosecution did not present any receipt signed by L proving that she received money from private
complainants. Should L be found not guilty of Estafa?
No, L should also be convicted of Estafa. Case law holds that the same pieces of evidence that establish
liability for Illegal Recruitment in Large Scale confirm culpability for Estafa. Presentation of receipts is not
necessarily essential to a conviction for Estafa, since the payment of placement fees to illegal recruiters is not
evidenced by receipts alone and may be established by testimonies of witnesses (People v. Liwanag, G.R.
No. 232245; March 02, 2022, Hernando Case).

(11) X, President and General Manager of XYZ Company, engaged in business of overseas recruitment as
licensed by the POEA. XYZ Company promised employment abroad to A, B, C, D, and E in
consideration of placement and documentary fees. XYZ Company failed to deploy A, B, C, D, and E,
and no reimbursements were made on their expenses relating to documentation and processing for
purposes of deployment. In a prosecution for illegal recruitment in large scale, X claimed that A, B, C,
D, and E did not pay any money to him or to XYZ Company. Is X liable for illegal recruitment in large
scale?
Yes, X is liable for illegal recruitment in large scale. Under Section 6(m) of RA 8042, as amended, failure of
any person, whether or not a holder of license or authority, to reimburse documentation and processing
expenses incurred by the worker when the deployment did not occur without the worker’s fault. As President
and General Manager of XYZ company, X had control, management, and direction of the business. He knew,
or ought to have known the failure to deploy the applicants without their fault and the need to reimburse the
applicants. Therefore, X is liable for illegal recruitment for his failure to comply with the law to immediately
reimburse A, B, C, D, and E for all their documentation and processing expenses after they were not deployed
for work abroad (People v. Rios y Catagbui, G.R. No. 226140, February 26, 2020)

(12) What are the other prohibited activities considered as illegal recruitment?
1. For overseas employment, the following acts shall be unlawful when committed by any person
whether or not a holder of a license or authority: (IFFPIHOAFATUNA)
a. Illegal Exaction – To charge or accept directly or indirectly any amount greater than that specified in
the schedule of allowable fees prescribed by the DOLE Secretary, or to make a worker pay or
acknowledge any amount greater than that actually received by him as a loan or advance;
b. False Information – To furnish or publish any false notice or information or document in relation to
recruitment or employment;
c. False Statements – To give any false notice, testimony, information or document or commit any act
of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for
the purpose of documenting hired workers with the POEA, which include the act of reprocessing
workers through a job order that pertains to non-existent work, work different from the actual overseas
work, or work with a different employer whether registered or not with the POEA;
d. Pirating – To induce or attempt to induce a worker already employed to quit his employment in order
to offer him another unless the transfer is designed to liberate a worker from oppressive terms and
conditions of employment;
e. Influencing not to Employ – To influence or attempt to influence any person or entity not to employ
any worker who has not applied for employment through his agency or who has formed, joined or
supported, or has contacted or is supported by any union or workers' organization;
f. Harmful Jobs – To engage in the recruitment or placement of workers in jobs harmful to public health
or morality or to the dignity of the Republic of the Philippines;
g. Obstruct Inspection – To obstruct or attempt to obstruct inspection by the DOLE Secretary or by his
duly authorized representative;
h. Alteration of Contracts – To substitute or alter to the prejudice of the worker, employment contracts
approved and verified by the DOLE from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the DOLE;
 4

i. Failure to Comply with Rules and Regulations – To fail to submit reports on the status of
employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs,
departures and such other matters or information as may be required by the DOLE Secretary;
j. Travel Agency Officers Recruiting – For an officer or agent of a recruitment or placement agency
to become an officer or member of the Board of any corporation engaged in travel agency or to be
engaged directly or indirectly in the management of a travel agency;
k. Withholding Travel Documents – To withhold or deny travel documents from applicant workers
before departure for monetary or financial considerations, or for any other reasons, other than those
authorized under the Labor Code and its implementing Rules and Regulations;
l. Unjustified Non-deployment – Failure to actually deploy a contracted worker without valid reason
as determined by the Department of Labor and Employment;
m. Non-reimbursement upon Failure to Deploy – Failure to reimburse expenses incurred by the worker
in connection with his documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault; and
n. Delegation to an Alien – To allow a non-Filipino citizen to head or manage a licensed
recruitment/manning agency (R.A. No. 8042, as amended by RA 10022, Sec. 6).

2. For Local Employment, the following prohibited practices constitute illegal recruitment when
committed by any individual, entity, licensee, or holder of authority: (IFFPIHOFAAT)
a. Illegal Exaction – To charge or accept, directly or indirectly, any amount greater than that specified
in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any
amount greater than that actually received by him as a loan or advance;
b. False Information – To furnish or publish any false notice or information or document in relation to
recruitment or employment;
c. False Statements – To give any false notice, testimony, information or document or commit any act
of misrepresentation for the purpose of securing a license or authority under this Code;
d. Pirating – To induce or attempt to induce a worker already employed to quit his employment in
order to offer him to another unless the transfer is designed to liberate the worker from oppressive
terms and conditions of employment;
e. Influencing not to Employ – To influence or to attempt to influence any person or entity not to
employ any worker who has not applied for employment through his agency;
f. Harmful Jobs – To engage in the recruitment or placement of workers in jobs harmful to public
health or morality or to the dignity of the Republic of the Philippines (Harmful Jobs);
g. Obstruct Inspection – To obstruct or attempt to obstruct inspection by the Secretary of Labor or by
his duly authorized representatives;
h. Failure to Comply with Rules and Regulations – To fail to file reports on the status of
employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs,
departures and such other matters or information as may be required by the Secretary of Labor;
i. Alteration of Contracts – To substitute or alter employment contracts approved and verified by the
DOLE from the time of actual signing thereof by the parties up to and including the periods of
expiration of the same without the approval of the Secretary of Labor;
j. Travel Agency Officers Recruiting – To become an officer or member of the Board of any
corporation engaged in travel agency or to be engaged directly or indirectly in the management of a
travel agency; and
k. Withholding Travel Documents – To withhold or deny travel documents from applicant workers
before departure for monetary or financial considerations other than those authorized under this
Code and its implementing rules and regulations (LABOR CODE, Art. 34).

(13) K was employed with R Agency as a cashier. Under direction of her employer, K recruited A, B, C, D
and E for overseas employment and assured them that R Agency can deploy them to Taiwan as factory
workers. Being the cashier, K received the payments of the said applicants and transmitted the same
to the company treasurer. However, the applicants were never deployed. When they found out that K
did not have any license or authority to recruit, they filed a criminal complaint for illegal recruitment in
large scale against K. In her defense, K contended that she cannot be held liable for illegal recruitment
because she did not benefit from the transaction and that only her employer should be held liable. Is
the contention correct?
No, the contention is not correct. For illegal recruitment in large scale to prosper, the prosecution has to prove
three essential elements: (1) the accused undertook a recruitment activity under Article 13(b) or any prohibited
practice under Article 34 of the Labor Code; (2) the accused did not have the license or the authority to lawfully
engage in the recruitment and placement of workers; and (3) the accused committed such illegal activity
against three or more persons individually or as a group. In this case, all the elements are present. K cannot
escape liability by conveniently limiting her participation as a cashier of R Agency. Section 6 of RA 8042, as
amended, is equivocal that illegal recruitment may or may not be for profit. It is immaterial therefore whether K
remitted the placement fee to the agency treasurer or appropriated them. Even if K was a mere cashier, such
 5

fact did not make her any less an employee to be held liable for illegal recruitment as principal by direct
participation, together with the employer, as it was shown that she actively and consciously participated in the
recruitment process (People v. Chua, G.R. No. 184058, March 10, 2010).

(14) When is illegal recruitment considered a crime of economic sabotage? Explain briefly. (2002, 2007,
2015 Bar)
Under Section 6 of RA 8042, as amended, illegal recruitment is considered a crime of economic sabotage
when committed by a syndicate or in large scale. Illegal recruitment is deemed committed by a syndicate if
carried out by a group of 3 or more persons conspiring and/or confederating with one another in carrying out
any unlawful or illegal transaction, enterprise or scheme which is an act of illegal recruitment. Meanwhile, illegal
recruitment is deemed committed in large scale if committed against 3 or more persons individually or as a
group.

(15) Differentiate illegal recruitment and estafa.

The following are the differences between illegal recruitment and estafa:

Illegal Recruitment Estafa

As To Nature

It is malum prohibitum. The It is malum in se. The criminal intent

criminal intent of the accused is is necessary
not necessary.

As To Governing Law

It is penalized under the Labor It is penalized under the Revised

Code. Penal Code.

As to Scope

It is limited in scope. It is wider in scope and covers deceits

whether related or not to recruitment
activities.

(CHAN, The Labor Code of the Philippines, Annotated Vol. 1, 2019, p. 266).

(16) X, a seafarer, signed a POEA-approved contract of employment with RV Company, with a duration of
9 months. The employment contract provides that the employer-employee relationship shall
commence only upon the seafarer’s actual departure from the port in the point of hire in Manila. Five
days before the departure from Manila to Canada, the company informed X that he would not be
allowed to leave for Canada because the company feared that he might jump ship. X filed a complaint
for illegal dismissal, overtime pay, damages and attorney’s fees with the Labor Arbiter against RV
Company. In its defense, RV Company argued that the jurisdiction of the Labor Arbiter is limited to
claims arising out of an employer- employee relationship and since such relationship did not
commence without the seafarer's actual departure, it moved for the dismissal of the complaint for lack
of jurisdiction. Is the motion to dismiss proper?
No, the motion to dismiss is not proper. Section 10 of RA 8042 (as amended), provides that the Labor Arbiter
shall have the original and exclusive jurisdiction to hear and decide claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including
claims for actual, moral, exemplary, and other forms of damage. In Santiago v. CF Sharp Crew Management,
the Supreme Court made a distinction between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the employment contract occurs
when the parties agree on the object and cause, as well as the rest of the terms and conditions therein. On the
other hand, the employer-employee relationship commences when the worker is actually deployed from the
point of hire. Thus, even before the start of the employer-employee relationship, contemporaneous with the
perfection of the employment contract is the birth of certain right and obligations, the breach of which may give
rise to a cause of action against the erring party. Applying to the case at bar, the claim is based on the
 6

employment contract entered into between X and RV Company for overseas employment. Therefore, X’s
claims are cognizable by the Labor Arbiter (Santiago v. CF Sharp Crew Management, Inc., G.R. No. 162419,
July 10, 2007).
(17) In 2012, H filed a complaint for permanent total disability against X Manning Agency and B, the
company president. H alleged that he fell on deck while lifting heavy loads of lube oil drum, with his
left arm hitting the floor. The incident resulted in his being permanently unfit for further sea service.
While the LA and NLRC held that there was no permanent disability, X Manning Agency and B were
held solidarily liable for payment of temporary disability benefits. B contended that he cannot be held
liable without showing that he acted beyond the scope of his authority or with malice. Is the argument
of B correct?
No, B’s argument is incorrect. Section 10 of RA 8042, as amended by RA 10022, expressly provides for joint
and solidary liability of corporate directors and officers with the recruitment/placement agency for all money
claims or damages that may be awarded to OFWs. While a corporate director, trustee, or officer who entered
into contracts in behalf of the corporation generally cannot be held personally liable for the liabilities of the
latter, in deference to the separate and distinct legal personality of a corporation from the persons composing
it, personal liability of such corporate director, trustee, or officer, along (although not necessarily) with the
corporation, may validly attach when he is made by a specific provision of law personally answerable for his
corporate action, as in this case (Gargallo v. Dohle Seafront Crewing et al., G.R. No. 215551, August 17,
2016).

(18) S, a local recruitment agency, deployed D to Hongkong under a 12-month contract as a domestic helper
for the foreign employer, Y. Unknown to the local agency, D and Y agreed to extend the employment
for two more years under a second contract. When D returned to the Philippines, she filed a complaint
against S for underpayment of salaries and refund of tax payments under such second contract. In its
defense, S argued that it cannot be held liable under the extended contract which it had no knowledge
of. Meanwhile, D insists that S, as local recruitment agency, is solidarily liable because he is charged
with knowledge of the extended contract under the theory of imputed knowledge. Is the argument of D
valid?
No, the argument of D is not valid. The theory of imputed knowledge ascribes the knowledge of the agent to
the principal-foreign employer, and not the other way around. The knowledge of the principal-foreign employer
Y cannot, therefore, be imputed to its agent S. There being no substantial proof that S knew of and consented
to be bound under the 2-year employment contract extension, it cannot be said to be privy thereto. As such, it
and its “owner” cannot be held solidarily liable for any of D’s claims arising from the 2-year employment
extension (Sunace International Management Service v. NLRC, G.R. No. 161757, January 25, 2006).

Note: Section 10 of RA 8042, as amended by RA 10022 provides that unlawfully dismissed overseas workers
are entitled to the reimbursement of his or her placement fee with an interest rate of 12% per annum. BSP
Circular No. 799 which revised the interest rate for forbearance from 12% to 6% in the absence of stipulation
is not applicable when there is a law that states otherwise. However, awards of salary for the unexpired portion
of the employment contract under RA 8042 are covered by Circular No. 799 because the law does not provide
for a specific interest rate that should apply (RA 8042, as amended; Sameer Overseas Placement v. Cabiles,
August 5, 2014).

(19) Who are disqualified from engaging in the recruitment and placement of workers for overseas
employment? (TOP-I-DO)
The following persons and entities are disqualified to participant or engage in the recruitment and placement
of workers for overseas employment:
1. Travel agencies and sales agencies of airline companies;
2. Officers or members of the Board of any corporation or partners in a partnership engaged in the business
of a travel agency;
3. Corporations and Partnerships, where any of its officers, members of the board or partners is also an
officer, member of the board or partner of a corporation or partnership engaged in the business of a travel
agency;
4. Individuals, partners, officers or directors of an Insurance company who make, propose or provide an
insurance contract under the compulsory insurance coverage for agency-hired OFWs;
5. Sole proprietors, partners or officers and members of the board with Derogatory records, such as, but not
limited to the following:
a. Those convicted, or against whom probable cause or prima facie finding of guilt is determined by a
competent authority, for illegal recruitment, or for other related crimes or offenses committed in the
course of, related to, or resulting from, illegal recruitment, or for crimes involving moral turpitude;
 7

b. Those agencies whose licenses have been revoked for violation of R.A. No. 8042, as amended, the
Labor Code of the Philippines, and R.A. No. 9208 (Trafficking in Persons Act of 2003), as amended,
and their implementing rules and regulations; and
c. Those agencies whose licenses have been cancelled, or those who, pursuant to the Order of the
Administrator, were included in the list of persons with derogatory record for violation of recruitment
laws and regulations; and
6. Any Official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC, NLRC, TESDA, CFO, NBI,
PNP, CAAP, international airport authorities, and other government agencies directly involved in the
implementation of R.A. No. 8042, as amended, and/or any of his/her relatives within the 4th civil degree
of consanguinity or affinity (2016 POEA Rules & Regulations Governing Overseas Employment, Part II,
Rule I, Sec. 3 [hereinafter 2016 POEA Rules]).

(20) Who are disqualified from engaging in the business of recruitment and placement for local
employment? (ITAM-RC-CALE-CP-SPC-T)
The following are disqualified from engaging in the business of recruitment and placement for local
employment:
1. Those who have pending cases with probable cause or convicted of Illegal recruitment, Trafficking in
persons, Anti-child labor law violation, or crimes involving Moral turpitude;
2. Those agencies, proprietors, partnerships, corporations whose licenses have been previously Revoked or
Cancelled by the DOLE under these Rules;
3. Cooperatives whether registered or not under the Cooperative Act of the Philippines;
4. Law Enforcers and any official or employee of the DOLE;
5. Current PEA licensed sole proprietors are prohibited from securing another license to engage in local
recruitment and placement;
6. Sole proprietors, Partnerships or Corporations licensed to engage in private recruitment and placement
for local employment are prohibited from engaging in job contracting or subcontracting activities; and
7. Technical-vocational institutions and other training institutions (D.O. No. 216-20 - Rules and Regulations
Governing Recruitment and Placement of Industry workers by Private Employment Agencies for Local
Employment, Art. II, Sec. 2 and D.O. No. 217-20 - Rules and Regulations Governing Recruitment and
Placement of Domestic workers by Private Employment Agencies for Local Employment).

(21) What are the differences between a license and an authority?

The following are the differences between a license and an authority:

License Authority

As To Definition

A license means a document issued An authority means a document

by the Department of Labor
authorizing a person or entity to
operate a private employment
agency (LABOR CODE, Art. 13(d)).
issued by the Department of Labor
authorizing a person or association to
engage in recruitment and placement
activities as a private recruitment
entity (LC, Art. 13(f))

As To Whom It Is Issued

License is issued for private Authority is given for private

employment agency. recruitment agency.

(22) Who may suspend and/or cancel a license or authority?

The following may suspend or cancel any license or authority to recruit employees:
1. The Minister of Labor shall have the power to suspend or cancel any license or authority to recruit
employees for overseas employment for violation of rules and regulations issued by the Ministry of Labor,
the Overseas Employment Development Board, or for violation of the provisions of this and other
applicable laws, General Orders and Letters of Instructions (LABOR CODE, Art. 35); and
2. The POEA shall suspend or revoke the license of a recruitment agency for failure to maintain the required
qualifications or conditions for the issuance of a license as provided in this Rule (2016 POEA Rules, Part
II, Rule II, Sec. 18).
 8

Note: The suspension and/or cancellation of license for overseas employment is now exercised by the
Secretary of the Department of Migrant Workers pursuant to R.A. No. 11641, Sec. 8 (m) which provides that
the Secretary of the DMW shall perform such other tasks as provided for under existing laws, including the
functions of the POEA Administrator under E.O. No. 247, R.A. No. 8042, as amended and other laws.

(23) A was hired as hired by XYC Company, Canadian company, through its local manning agency IPAMS
as safety officer in Madagascar for 19 months. However, 3 months after deployment, A received a
notice of pre-termination of employment due to diminishing workload and was repatriated. A then filed
a complaint for illegal dismissal. A argued that XYC Company never offered any valid reason and
sufficient notice for the early termination. On the other hand, XYC argued that Canadian laws will
govern the contract following the principle of lex loci celebretionis. The pre-termination was valid for
being consistent with the provision of both the Expatriate Policy and laws of Canada which only require
written notice of termination. Will Canadian Law govern the contract?
No, the contention is not tenable. The general rule is that the Philippine laws apply even to overseas
employment contracts. This rule is rooted in the constitutional provision of Section 3, Article XIII that the State
shall afford full protection to labor, whether local or overseas. Hence, even if the OFW has his employment
abroad, it does not strip him of his right to security of tenure, humane conditions of work and a living wage
under our Constitution.

As an exception, the parties may agree that a foreign law shall govern the employment contract. A synthesis
of the existing laws and jurisprudence reveals that this exception is subject to the following requisites:
1. That it is expressly stipulated in the overseas employment contract, that a specific foreign law shall govern;
2. That the foreign law invoked must be proven before the courts pursuant to the Philippine rules on evidence;
3. That the foreign law stipulated in the overseas employment contract must not be contrary to law, morals,
good customs, public order, or public policy of the Philippines; and
4. That the overseas employment contract must be processed through the POEA.

With these requisites, the State would be able to abide by its constitutional obligation to ensure that the rights
and well-being of our OFWs are fully protected.

In this problem, the foreign law was not expressly specified in the employment contract. Further, the foreign
law invoked is contrary to the Constitution and the Labor Code because it does not require any ground for the
early termination of employment and allows the employer to dispense with the prior notice of termination by
simply paying the employee a severance pay computed. Requisite No. 1 and 3 are lacking, thus, Canadian
Law will not govern the contract (IPAMS v. De Vera, G.R. No. 205703, March 07, 2016).

(24) What is the rule on direct hiring of migrant workers?

Article 18 of the Labor Code provides that no employer may hire a Filipino worker for overseas employment
except through the Boards and entities authorized by the Secretary of Labor. Thus, no employer shall directly
hire an Overseas Filipino Worker for overseas employment (LABOR CODE, Art. 18; Revised POEA Rules and
Regulations Governing the Recruitment and Employment of Landbased OFW, Sec. 123). However, the rule is
not absolute. The following are exempted from the ban on direct hiring:
1. Members of the diplomatic corps;
2. International organizations;
3. Heads of state and government officials with the rank of at least deputy minister;
4. Other employers as may be allowed by the DOLE Secretary, such as:
a. Those provided in (a), (b) and (c) who bear a lesser rank, if endorsed by the POLO, or Head of
Mission in the absence of the POLO;
b. Professionals and skilled workers with duly executed/authenticated contracts containing terms and
conditions over and above the standards set by the POEA. The number of professional and skilled
OFWs hired for the first time by the employer shall not exceed 5. For the purpose of determining the
number, workers hired as a group shall be counted as 1; or
c. Workers hired by a relative/family member who is a permanent resident of the host country
employment (2016 POEA Rules & Regulations Governing Overseas Employment, Rule II, Sec.
124); and
5. Name Hires – individual workers who are able to secure contracts for overseas employment on their own
efforts and representations without the assistance or participation of any agency. The hiring nonetheless
shall pass through the POEA for processing purposes (IRR of the LABOR CODE, Book 1, Rule I, Sec.
1(gg)).
 9

B. EMPLOYMENT OF NON-RESIDENT ALIENS

(25) A, a non-resident Chinese, went to your office asking for legal advice because he intends to work for
a local telecommunications company. What advice will you tell him so that he may lawfully engage in
gainful employment in the Philippines. Discuss fully.
I will explain to A that as a general rule, all foreign nationals who intend to engage in gainful employment in
the Philippines shall apply for an Alien Employment Permit or AEP (D.O. No. 221-21 – Revised Rules and
Regulations for Issuance of Employment Permits to Foreign National).

NOTE: In case the employment involves practice of profession, the foreign national shall apply for a Special
Temporary Permit (STP) from the PRC (RA 8981, Sec. 7, par (j)). If employment is in nationalized or partially
nationalized industry, the foreign national shall apply for Authority to Employ Alien (AEA) from the DOJ (CA
108, as amended by PD 715). For the employment of foreign nationals in mining operation, the employer shall
secure Authority to Hire Foreign National (AHFN) from the DENR (RA 7942 or the Philippine Mining Act of
1995, Sec 62).

However, he may be exempted from securing an AEP if he falls under any of the following categories of aliens:
(IT-LORD-PP)
1. Accredited officers and personnel of International organizations of which the Philippine government has
entered into an agreement with, and their dependent spouse desiring to work in the Philippines;
2. Foreign nationals who come to the Philippines to Teach, present and/or conduct research studies in
universities and colleges as visiting, exchange or adjunct professors under formal agreements between
the universities or colleges in the Philippines and foreign universities or colleges; or between the Philippine
government and foreign government, subject to the rules of reciprocity;
3. All foreign nationals granted exemption by Law;
4. Foreign national who are Officers, staff, and employees working in the Embassy by reason of extra-
territoriality principle, which is one of the generally accepted principles in International Law;
5. Refugees and Stateless Persons recognized by DOJ pursuant to Art. 17 of the UN Convention and
Protocol Relating to status of Refugees and Stateless Persons;
6. Dependent spouse of any member of the Diplomatic corps, provided there is an existing reciprocity
agreement and/or exchange of notes between the Philippine Government and their respective countries
of origin;
7. Permanent resident foreign nationals and probationary or temporary resident visa holders under Section
13 (a-f) of the Philippine Immigration Act of 1940 and Section 3 of the Alien Social Integration Act of 1995
(R.A. No. 7917); and
8. Foreign nationals who are officers and staff of Peacekeeping or International Organizations, either
deployed in the Philippines or invited by Non-Governmental Organizations as accredited, provided they
will not engage in any gainful employment in the Philippines (D.O. No. 221-21, Sec. 18).

Meanwhile, if he falls under any of the following categories who are excluded from securing an AEP, he may
instead secure a Certificate of Exclusion from the Regional Office: (GPICO)
1. Members of the Governing board with voting rights only and do not intervene in the management of the
corporation or in the day-to-day operation of the enterprise;
2. President and Treasurer who are part-owner of the company;
3. Intra corporate transferee who is a manager, executive or specialist in accordance with Trade Agreements
and an employee of the foreign service supplier for at least 1 year prior to deployment to a branch,
subsidiary, affiliate or representative office in the Philippines.
4. Contractual service supplier who is a manager, executive or specialist and an employee of a foreign
service supplier which has no commercial presence in the Philippines:
a. who enters the Philippines temporarily to supply a service pursuant to a contract between his/her
employer and a service consumer in the Philippines;
b. must possess the appropriate educational and professional qualifications; and
c. must be employed by the foreign service supplier for at least 1 year prior to the supply of service in
the Philippines; and
5. Authorized representative of the Foreign Principal/Employer assigned in the Office of Licensed Manning
Agency (OLMA) in accordance with the POEA laws, rules and regulations (D.O. No. 221-21, Sec. 20).

C. DISCRIMINATORY PRACTICES
(26) What are the prohibited acts of discrimination in employment on account of age?
It shall be unlawful:
1. For an employer to:
 10

a. Print or publish, or cause to be printed or published, in any form of media, including the internet, any
notice of advertisement relating to employment suggesting preferences, limitations, specifications,
and discrimination based on age;
b. Require the declaration of age or birth date during the application process;
c. Decline any employment application because of the individual’s age;
d. Discriminate against an individual in terms of compensation, terms and conditions or privileges of
employment on account of such individual’s age;
e. Deny any employee’s or worker’s promotion or opportunity for training because of age;
f. Forcibly lay off an employee or worker because of old age; or
g. Impose early retirement on the basis of such employee’s or worker’s age.
2. For a labor contractor or subcontractor, if any, to refuse to refer for employment or otherwise discriminate
against any individual because of such person’s age.
3. For a labor organization to:
a. Deny membership to any individual because of such individual’s age;
b. Exclude from its membership any individual because of such individual’s age; or
c. Cause or attempt to cause an employer to discriminate against an individual in violation of this Act.
4. For a publisher to print or publish any notice of advertisement relating to employment suggesting
preferences, limitations, specifications, and discrimination based on age (R.A. No. 10911, Sec. 5).

(27) What are the exceptions to the rule that it is unlawful for employers to set age limitations?
The exceptions are if:
1. Age is a bona fide occupational qualification reasonably necessary in the normal operation of a particular
business or where the differentiation is based on reasonable factors other than age;
2. The intent is to observe the terms of a bona fide seniority system that is not intended to evade the purpose
of this Act;
3. The intent is to observe the terms of a bona fide employee retirement or a voluntary early retirement plan
consistent with the purpose of this Act: Provided, That such retirement or voluntary retirement plan is in
accordance with the Labor Code, as amended, and other related laws; or
4. The action is duly certified by the DOLE Secretary in accordance with the purpose of this Act (R.A. No.
10911, Sec. 6).

(28) What is the rule on work discrimination against Solo Parents?

No employer shall discriminate against any solo parent employee with respect to terms and conditions of
employment on account of his or her status. Employers may enter into agreements with their solo parent
employees for a telecommuting program, as provided in Republic Act No. 11165, otherwise known as the
'Telecommuting Act': Provided, That said solo parent employees shall be given priority by their employer (R.A.
No. 8972, as amended by R.A. No. 11861, Sec. 7).

III. EMPLOYMENT PROPER

A. MANAGEMENT PREROGATIVE
(29) What is the doctrine of management prerogative?
Under the doctrine of management prerogative, every employer has the inherent right to regulate, according
to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working
methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and
discipline, dismissal, and recall of employees (Peckson v. Robinsons Supermarket, G.R. No. 198534, July 3,
2013).

It must be upheld so long as they are exercised in good faith for the advancement of its interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or valid agreements
(Coca-Cola Bottlers, PHL, Inc., v. Kapisanan ng Malayang Manggagawa sa Coca-Cola-FFW, G.R. No.
148205, February 28, 2005).

(30) What are the limitations on the exercise of management prerogative? (LCE3-GePo-WiG)
The following are the limitations on the exercise of management prerogative:
1. Limitations imposed by
a. Law;
b. CBA;
c. Employment contract;
d. Employer policy;
e. Employer practice; and
 11

f. General principles of fair play and justice (The Philippine American Life and General Insurance Co.
v. Gramaje, G.R. No. 156963, November 11, 2004); and
2. It is subject to Police power;
3. Its exercise should be Without abuse of discretion;
4. It should be done in Good faith and with due regard to the rights of labor (CHAN REVIEWER, supra at
797).

(31) H Hotel employed L as a Service Agent. She was last assigned at the hotel’s restaurant. Two incidents
happened leading to L’s suspension. The first subject incident happened when L impolitely responded
to a guest. The second subject incident occurred when another H Hotel client, together with a
companion, ordered a clubhouse sandwich from L. After some time, they canceled the order. L then
approached them and, in a strong voice, remarked, “Ikaw na magexplain sa kanya at baka maghanap
pa siya.” H Hotel issued a memorandum and a Report suspending her for two weeks. Was L validly
suspended?
Yes. It is axiomatic that appropriate disciplinary sanction is within the purview of management imposition. What
should not be overlooked is the prerogative of an employer company to prescribe reasonable rules and
regulations necessary for the proper conduct of its business and to provide certain disciplinary measures in
order to implement said rules to assure that the same would be complied with. An employer has a free reign
and enjoys wide latitude of discretion to regulate all aspects of employment, including the prerogative to instill
discipline in its employees and to impose penalties, including dismissal, upon erring employees. The penalties
of suspension imposed upon L were not without valid bases and were reasonably proportionate to the
infractions committed. The improper remarks hurled against valued guests and an employee of a valued client,
in the present case, pose a greater threat to the interest of an employer and all the more merits a similar, if not
graver, penalty (The Heritage Hotel, Manila v. Sio, G.R. No. 217896; June 26, 2019).

(32) PBC adopted a policy granting multi-purpose loan benefits to its qualified employees. The loan policy
and its corresponding benefits were incorporated in the parties' CBA. New management took over and
crafted a new loan policy. Accordingly, the grant of loans through pledges or deductions from the mid-
year or year-end bonuses became discretionary on PBC's part. Can PBC alter the provisions of the
policies by virtue of its management prerogative?
No. Where the CBA is clear and unambiguous, it becomes the law between the parties and compliance with it
is mandated by the express policy of the law. Parties are bound by the terms and conditions, stipulations and
clauses under the CBA, with the sole limitation that they are not contrary to law, morals, public order, or public
policy. It cannot be limited by management prerogative (Philippine Bank of Communications v. Philippine Bank
of Communications Employees Association, G.R. No. 254021; February 14, 2022).

DISCIPLINE
(33) What is the employer’s right to discipline?
The employer’s right to discipline, in general, is the prerogative of the employer to discipline its employees and
to impose appropriate penalties on erring workers pursuant to company rules and regulations (Deles, Jr. v.
NLRC, G.R. No. 121348, March 9, 2000).

(34) What is the reasonable proportionality rule?

It means that infractions committed by an employee should merit only the corresponding sanction demanded
by the circumstances. The penalty must be commensurate with the gravity of the offense, the act, conduct or
omission imputed to the employee and imposed in connection with the employer’s disciplinary authority (Manila
Memorial Park Cemetery, Inc. v. Panado, G.R. No. 167118, June 15, 2006).

TRANSFER OF EMPLOYEES
(35) What is transfer of employee?
A transfer of employee means a movement:
1. From one position to another of equivalent rank, level, or salary, without break in the service (Coca-Cola
Bottlers Philippines, Inc., v. Del Villar, G.R. No. 163091, October 6, 2010); or
2. From one office to another within the same business establishment (Blue Dairy Corporation v. NLRC,
G.R. No. 129843, September 14, 1999).

(36) What are the limitations on the transfer of employees? (FUCIL)

The following are the limitations on transfer of employees:
 12

1. The transfer must not be motivated by discrimination or bad Faith;

2. The managerial prerogative to transfer personnel cannot be used by the employer to rid himself of an
Undesirable employee;
3. Transfer, even if due to promotion, cannot be done without employee’s Consent (PT&T v. CA, G.R. No.
152057, September 29, 2003);
4. The mere fact that it would be Inconvenient does not, by itself, make the transfer Illegal (OSS Security v.
NLRC, G.R. No. 112752, February 9, 2000); and
5. The transfer of an employee should be considered as within the bounds allowed by Law, unless there are
circumstances which directly point to interference by the company with the employees’ right to self-
organization (Rubberworld PHL. v. NLRC, G.R. No. 75704, July 19, 1989).

PRODUCTIVITY STANDARDS
(37) May an employer impose productivity standards?
Yes. An employer is entitled to impose productivity standards as management prerogative. This management
prerogative of requiring standards may be availed of so long as they are exercised in good faith for the
advancement of the employer’s interest (Aliling v. Feliciano, G.R. No. 185829, April 25, 2012).

(38) What is the effect of failure to observe productivity or work standards of the employer?
Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency
may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or
work quotas, either by failing to complete the same within the allotted reasonable period, or by producing
unsatisfactory results (Realda v. New Age Graphics, Inc., G.R. No. 192190, April 25, 2012).

BONUS
(39) When is bonus demandable and enforceable? (SPA)
Bonus is demandable and enforceable when:
1. It is Stipulated in an employment contract or CBA;
2. The grant of bonus is a company Policy or practice (Manila Electric Company v. Secretary of Labor, G.R.
No. 127598, January 27, 1999); or
3. When it is granted as an Additional compensation which the employer agreed to give without any
condition and, thus, must be deemed part of wage or salary (Atok Big Wedge Mining Co., Inc., v. Atok
Big Wedge Mutual Benefit Association, G.R. No. L-5276, March 3, 1953).

Note: To be considered a “regular practice,” the giving of the bonus should have been done over a long period
of time, and must be shown to have been consistent and deliberate (American Wire and Cable Daily Rated
Employees Union v. American Wire and Cable Co. Inc., G.R. No. 155059, April 29, 2005).

CHANGE OF WORKING HOURS

(40) What is the employer’s right to change working hours?
The employer’s right to change working hours is within their freedom and prerogative, according to their
discretion and best judgment, to regulate and control the time when workers should report for work and perform
their respective functions (Philippine Airlines, Inc., v. NLRC, G.R. No. 115785, August 4, 2000). It is the
prerogative, whenever exigencies of the service so require, to change the hours of its employees (Sime Darby
Pilipinas, Inc., v. NLRC, G.R. No. 199205, April 15, 1998).

(41) SD Inc. had its factory workers working from 7:45 am to 3:45 pm with a 30-minute paid “on call” lunch
break. Later, SD Inc. issued a memorandum to its employees, changing the work schedule from 7:45
am to 4:45 pm from Mondays to Fridays. A and B felt that they are adversely affected by the change in
work schedule and discontinuance of the 30-minute paid “on call” lunch break, prompting them to file
a case for unfair labor practice, discrimination and evasion of liability against SD Inc. Does the change
in work schedule constitute unfair labor practice?
No, the change in work schedule does not constitute unfair labor practice. Management retains the prerogative,
whenever exigencies of the service so require, to change the working hours of its employees so long the same
is exercised in good faith. In the instant case SD Inc., as the employer, cites as reason for the adjustment the
efficient conduct of its business operations and its improved production. It rationalizes that while the old work
schedule included a 30-minute paid lunch break, the employees could be called upon to do jobs during that
period as they were “on call.” Even if denominated as lunch break, this period could very well be considered
 13

as working time because the factory employees were required to work if necessary and were paid accordingly
for working. With the new work schedule, the employees are now given a one-hour lunch break without any
interruption from their employer (Sime Darby Pilipinas, Inc. v. NLRC, G.R. No. 119205, April 15, 1998).

BONA FIDE OCCUPATIONAL QUALIFICATIONS

(42) What is the Bona Fide Occupational Qualifications (BFOQ) rule?
The Bona Fide Occupational Qualifications (BFOQ) rule provides that employment may not be limited to
persons
of a particular sex, religion, or national origin unless the employer can show that such is an actual qualification
for performing the job (Yrasuegui v. PAL, G.R. No. 168081, October 17, 2008).

(43) What must be proven by the employer to justify a BFOQ? (CBN) To justify a BFOQ, the following must
be proven:
1. That the employer adopted the standard for a purpose rationally Connected to the performance of the
job;
2. That the employer adopted the particular standard in an honest and good faith Belief that it was
necessary to the fulfilment of that legitimate work-related purpose; and
3. That the standard is reasonably Necessary in order to accomplish the legitimate work-related purpose
(Yrasuegui v. PAL, G.R. No. 168081, October 17, 2008).

(44) Y is an international flight steward of PAL. The proper weight for a man of his height and body structure
is from 147 to 166 pounds. Y developed a weight problem which prompted PAL to advise him to go on
an extended vacation to address his weight concerns. After meeting the right weight, he was allowed
to return to work. Not long after, his weight problem recurred. He was removed from flight duty and
was formally requested to trim down weight. Upon checking, it was discovered that he gained, instead
of losing weight. Y made a commitment to lose weight in 90 days however, he failed to do so. He was
dismissed from employment for failure to comply with company standards. Is the weight requirement
a valid condition of employment?
Yes, the weight requirement is a valid condition of employment. Employment in particular jobs may not be
limited to persons of a particular sex, religion, or national origin unless the employer can show that sex, religion,
or national origin is an actual qualification for performing the job. The qualification is called a bona fide
occupational qualification (BFOQ). BFOQ is valid “provided it reflects an inherent quality reasonably necessary
for satisfactory job performance”. The primary objective of PAL in the imposition of the weight standards for
cabin crew is flight safety. It cannot be gainsaid that cabin attendants must maintain agility at all times in order
to inspire passenger confidence on their ability to care for the passengers when something goes wrong.
Aircrafts have constricted cabin space, and narrow aisles and exit doors. The body weight and size of a cabin
attendant are important factors to consider in case of emergency (Yrasuegui v. Philippine Airlines, Inc., G.R.
No. 168081, October 17, 2008).

MARRIAGE BETWEEN EMPLOYEES AND COMPETITOR-EMPLOYEES

POST-EMPLOYMENT RESTRICTIONS
(45) What is post-employment restriction?
A post-employment restriction is the right of the employer, in the exercise of its prerogative, to insist on an
agreement with the employee for certain prohibitions to take effect after the termination of their employer-
employee relationship (CHAN REVIEWER, supra at 822).

(46) What must be proven by the employer to justify a post-employment restriction?

The employer is burdened to establish that a restrictive covenant barring an employee from a competitive
employment after retirement or resignation is not unreasonable restraint of trade thus, unenforceable for being
repugnant to public policy (Rivera v. Solidbank Corporation, G.R. No. 163269, April 19, 2006). There must be
limitation as to time, place and trade. A contract embodying such prohibition that is limited as to time and trade
is considered reasonable, and therefore, valid and enforceable (Tiu v. Platinum Plans, G.R. No. 163512,
February 28, 2007).

(47) Is an employer required to obtain a clearance from the Secretary of Labor in order to shut down his
establishment or dismiss employees with at least one year of service?
 14

No. B.P. Blg. 130, approved on August 21, 1981, abolished the clearance requirement (Vol. 2 AZUCENA, The
Labor Code with Comments and Cases (2021) [hereinafter 2 AZUCENA]), p. 853).

(48) Is there a specific period prescribed for the release of the separated employees’ final pay and certificate
of employment?
Yes. The DOLE issued guidelines which provides that the final pay should be released by the employer within
30 days from the date of separation or termination of employment, unless there is a more favorable company
policy, individual, or collective agreement thereto. Said guidelines also provide for the enforcement mechanism
in settling any issue, claim, or dispute in connection therewith (DOLE Advisory No. 06-20 or the Guidelines on
the Payment of Final Pay and Issuance of Certificate of Employment).

B. LABOR STANDARDS
(49) Who are covered by the Labor Code provisions on Working Conditions and Rest Periods?
The Labor Code provisions on Working Conditions and Rest Periods apply to employees in all establishments
and undertaking whether for profit or not, but not to: (GM-FMD-PW)
1. Government employees;
2. Managerial employees including members of the managerial staff;
3. Field personnel
4. Members of the family of the employer who are dependent on him for support
5. Domestic helpers
6. Persons in the personal service of another; and
7. Workers paid by result (LABOR CODE, Art. 82).

(50) What is the normal hours of work?

Article 83 of the Labor Code provides that the normal hours of work of any employee shall not exceed 8 hours
a day. Health personnel in cities and municipalities with a population of at least 1,000,000 or in hospitals and
clinics with a bed capacity of at least 100 shall hold regular office hours for 8 hours a day, for 5 days a week,
exclusive of time for meals (LABOR CODE, Art. 83).

(51) O was employed as a bank teller in K Bank. She was required to work daily for a period of 8 straight
hours. Is this schedule allowed by law?
As a general rule, the schedule is not allowed. Article 85 of the Labor Code provides that it shall be the duty of
every employer to give his employees not less than sixty (60) minutes time-off for their regular meals (LABOR
CODE, Art. 85).

(52) In case O was only given a meal break of 15 minutes, can he claim compensation for the shorter meal
period?
Yes, he can claim compensation. A meal period of less than 20 minutes may be given by the employer provided
that such shorter meal period is credited as compensable hours worked of the employee in the following cases
(NEEN):
1. Where the work is Non-manual work in nature or does not involve strenuous physical exertion;
2. Where the Establishment regularly operates not less than sixteen (16) hours a day;
3. In case of actual or impending Emergencies or there is urgent work to be performed on machineries,
equipment or installations to avoid serious loss which the employer would otherwise suffer; and
4. Where the work is Necessary to prevent serious loss of perishable goods (IRR of the Labor Code, Sec. 7,
Rule I).

(53) X works in a call center which operates twenty-four (24) hours a day. His shift starts at 4:00 P.M. until
1:00 A.M. of the following day. Is he entitled to any additional compensation for work performed during
this shift?
Yes, X is entitled to a night differential pay. Under Article 86 of the Labor Code, every employee shall be paid
a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed
between ten (10:00) o’clock in the evening to six (06:00) o’clock in the morning. In the case of X, he is entitled
to night shift differential for work performed from 10:00 pm until 1:00 am of the day following (LABOR CODE,
Art. 86).

(54) DEF Foundation is a non-profit organization dependent for its existence on contributions and
donations from well-wishers. B, an office clerk therein, renders work from 7:00 A.M to 8: 00 P.M. from
 15

Monday to Friday. While admitting that it does not fall under the exceptions, DEF Foundation argued
that it had not given overtime pay because it should be exempt as a charitable institution. Is B entitled
to overtime pay?
Yes, B is entitled to overtime pay. Article 82 of the Labor Code that the provisions on Working Conditions and
Rest Periods shall apply to employees in all establishments and undertakings whether for profit or not, subject
only to certain exceptions mentioned therein. Thus, the provisions are equally applicable to non-profit
institutions (LABOR CODE, Art. 82).

(55) What is the rate of additional compensation for overtime pay?

Article 87 of the Labor Code provides that work may be performed beyond 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
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 30% thereof
(LABOR CODE, Art. 87).

Note: Undertime work on any particular day shall not be offset by overtime work on any other day (LABOR
CODE, Art. 88).

(56) U, an employee of KKD Corporation, works from 8:00 A.M. to 5:00 P.M. on Monday to Friday. On June
12, she worked from 8:00 A.M. to 8:00 P.M. What are the additional compensations she is entitled to?
Discuss each entitlement and the respective rates applicable.
U is entitled to holiday pay and overtime pay. For holiday pay, the rule is that work performed on a regular
holiday merits at least twice (200%) the wage rate of the employee. Meanwhile, with respect to the overtime
pay, work in excess of 8 hours performed on a regular holiday shall be paid an additional compensation
equivalent to the rate of the first eight hours on a holiday plus at least 30% thereof. Thus, the following formula
is applicable: Compensation = [(Hourly rate of basic daily wage x 200% x 130% x number of hours work) +
(Basic wage rate x 200%)] (LABOR CODE, Art. 87; Art. 94(b)).

(57) What is a Compressed Work Week (CWW)?

The CWW scheme is an alternative arrangement whereby the normal workweek is reduced to less than 6 days
but the total number of normal hours per week remains at 48 hours. The normal workday is increased to more
than 8 hours but not to exceed 12 hours, without corresponding overtime premium. The concept can be
adjusted accordingly depending on the normal workweek of the company (DOLE Advisory No. 04-2010, Part
III. par. 1).

(58) What are the conditions of a valid CWW scheme?

The conditions of a valid CWW scheme are the following (ECN):
1. The scheme is Expressly and voluntarily supported by majority of the employees affected;
2. In firms using substances, or operating in conditions that are hazardous to health, a Certification is needed
from an accredited safety organization or the firm’s safety committee that work beyond 8 hours is within
the limits or levels of exposure set by DOLE’s occupational safety and health standards; and
3. The DOLE-RO is duly Notified (DOLE Advisory No. 02-04, Part IV, par. 1).

(59) What are the effects of CWW?

A CWW scheme, which complies with the foregoing conditions, shall have the following effects: (CMD)
1. Work beyond 8 hours will not be Compensable by overtime premium provided the total number of hours
worked per day shall not exceed 12 hours;
Exception: Where there is a more favorable practice existing in the firm;

2. Employees under a CWW scheme are entitled to Meal periods of not less than 60 minutes, consistent with
Art. 85 of the Labor Code; and
3. Adoption of the CWW scheme shall in no case result in Diminution of existing benefits (DOLE Advisory
No. 02-04, Part IV, par. 2).

(60) What is Telecommuting?

Telecommuting refers to work from an alternative workplace with the use of telecommunications and/or
computer technologies. An employer in private sector may offer a telecommuting program to its employees on
a voluntary bases, and upon such terms and conditions as they may mutually agree upon: Provided, That such
 16

terms and conditions shall not be less than the minimum labor standards set by law, and shall include
compensable work hours, minimum number of work hours, overtime, rest days, and entitlement to leave
benefits (R.A. No. 11165, otherwise known as “Telecommuting Act”, Sec. 4).

(61) How is a Telecommuting Agreement terminated or changed?

Termination or change may be done in accordance with the telecommuting policy or agreement, without
prejudice to the employment relationship and working conditions of employee, at no cost to the latter (IRR of
RA 11165, Sec. 3).

(62) What are the rights of employees in a telecommuting agreement? (FND)

The following are the rights of an employee in a telecommuting agreement:
1. Fair treatment;
2. Non-Isolation; and
3. Data protection (IRR of RA 11165, Sec. 5).

(63) X and Y decided to put up an IT firm. They agreed to hire 20 employees for various positions such as
software developers and engineers, marketing officers and administrative assistants. Being optimistic
on the growth of the company, X and Y wanted to operate daily. In the proposed employment contract,
the employees are required to report for work from Mondays to Sundays. X and Y sought your advice
on the legality of the employment contract. What advice will you give them?
I will advise X and Y to include in the employment contract a weekly rest period for the employees. Article 91
of the Labor Code provides that it shall be the duty of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less than 24 consecutive hours after every 6 consecutive
normal work days. The employer shall determine and schedule the weekly rest day of his employees, subject
to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and
Employment may provide. As an exception, the employer shall respect the preference of employees as to
weekly rest day when such preference is based on religious grounds (LABOR CODE, Art. 91).

(64) Mr. X is engaged in the business of selling various household and food products. He has a medium-
sized grocery store located in the town center mainly catering to the residents of the town. The store
is open daily from 8AM to 9PM, including weekends and holidays. Due to high volume of sales, he had
to employ 10 persons to assist in the daily store operations. All 10 employees are given a fixed and
regular schedule with a rest day per week. One of his employees, Y, acts as cashier. During her years
of employment, Y had worked as scheduled, without objection, including on holidays. The dispute
arose when Y demanded holiday pay from Mr. X. In his defense, Mr. X claimed that he is exempted from
paying holiday pay because he is regularly employing 10 workers only. Is the contention correct?
No, the contention of Mr. X is not correct. As general rule, holiday pay benefit applies to all employees.
However, one of the exceptions therein are retail and service establishments regularly employing less than ten
workers. In other words, exemptions from holiday pay apply only to establishments employing “less than ten”
employees or workers, meaning one to nine. Otherwise, if the number of employees equal to ten or more, such
employer is no longer covered by the exception. Accordingly, Mr. X is obliged to pay holiday pay to his
employees, including Y (IRR of the Labor Code, Sec. 1, Rule IV, Book III).

(65) C, a worker at XYZ Center, was on leave without pay on April 17, 2019. He did not report for work on
April 18 and 19, Maundy Thursday and Good Friday, respectively. Is C entitled to holiday pay for the
two successive holidays? Explain.
No, C is not entitled to holiday pay for the two successive holidays. Where there are 2 successive regular
holidays, like Maundy Thursday and Good Friday, an employee may not be paid for both holidays if he/she
absents himself/herself from work on the day immediately preceding the first holiday, unless he/she works on
the first holiday, in which case he/she is entitled to his/her holiday pay on the second holiday (IRR of the Labor
Code, Sec. 10, Rule IV, Book III).

(66) What establishments are required by Labor Code to distribute service charges to their employees?
This shall apply only to establishments collecting service charges such as hotels, restaurants, lodging houses,
night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and similar enterprises,
including those entities operating primarily as private subsidiaries of the Government (IRR of the LABOR
CODE, Book III, Rule VI, Sec. 1).

(67) Who are the covered employees?

 17

Covered employees refer to all employees, except managerial employees, under the direct employ of
the covered establishment, regardless of their positions, designations or employment status, and
irrespective of the method by which their wages are paid (IRR of RA 11360, Sec. 2 (a)).

(68) How are service charges distributed?

Under RA 11360 which took effect on September 3, 2019 and superseded Art. 96 of the Labor Code, all service
charges actually collected by covered establishment shall be distributed completely and equally, based on
actual hours or days of work or service rendered, among the covered employees, including those already
receiving the benefit of sharing in the service charges (IRR of RA 11360, Sec. 3).

(69) W is real estate agent engaged in selling condominium units. In her employment contract with XYZ
Builders, she is paid on a purely commission basis at the rate of 10% of the total purchase price of the
condominium units she sold. After two years with the company, W claimed 13th month pay from XYZ
Builders. Is XYZ Builders required to pay 13th month pay to W?
No, XYZ Builders is not required to pay 13th month pay because it falls within the exception as an employer of
those who are paid on a purely commission basis. The following are not covered by PD 851, or the 13th Month
Pay Law:
1. The government and any of its political subdivisions, including government-owned and controlled
corporations, except those corporations operating essentially as private subsidiaries of the government;
2. Employers who are already paying their employees thirteenth- month pay or more in a calendar year or its
equivalent at the time of the issuance of PD 851;
3. Persons in the personal service of another in relation to such workers; and
4. 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 those workers who are paid on piece-rate basis, in which case their employer shall grant them
thirteenth-month pay) (2018 Handbook on Workers’ Statutory Monetary Benefits, p. 40).

WAGES
(70) What is the required form of payment of wages?
As a general rule, wages shall be paid in legal tender; use of promissory notes and other forms is prohibited
even when expressly requested by employee (IRR of the Labor Code, Book III, Rule VIII, Sec. 1). The only
exceptions in which the law allows payment by check are when:
1. Such manner is customary upon effectivity of the Labor Code, or
2. Stipulated in a CBA, or
3. The following conditions are met:
a. There is a bank or facility for encashment within a radius of 1km;
b. Employer does not receive any pecuniary benefit from the arrangement;
c. Employees are given reasonable time during banking hours to withdraw, such time shall be considered
as working hours;
d. Written consent of employees concerned if there is no CBA (IRR of the Labor Code, Book III, Rule
VIII, Sec. 2).

(71) When is payment to a person other than the employee himself authorized under the law?
Wages shall be paid directly to the employee, except when: (FAD)
1. Payment to a member of the Family is authorized in writing by the employee
2. Payment to Another is authorized by law (such as payment for insurance premiums and union dues
3. In case of Death, payment to heirs of the deceased employees without need of intestate proceedings (IRR
of the Labor Code, Book III, Rule VIII, Sec. 5).

(72) What are the prohibitions regarding wages?

The following are the prohibitions regarding wages: (IWDL-WERF)

1. Non-Interference in disposal of wages – No employer shall interfere with the employee’s freedom to
dispose of his wages nor shall force, compel, or oblige employees to purchase merchandise,
commodities or other property from the employer or from any other person, or otherwise make use of
any store or services of such employer or any other person (LABOR CODE, Art. 112);
2. No Wage deduction – No employer shall make any deductions from the employee’s wages except when
authorized to do so (LABOR CODE, Art. 113);
3. No Deposits for loss or damage – No employer shall require the worker to make deposits from which
deductions shall be made for reimbursement of loss of or damage to tools, materials, or equipment
supplied by the employer except when the employer is engaged in such business requiring such
deposits as determined by the Secretary of Labor (LABOR CODE, Art. 114);
 18

4. Limitations on deductions from deposits for loss or damage – No employer shall make any deduction
from the employee’s deposits for the actual amount of the loss or damage unless the employee has
been heard thereon and his responsibility has been clearly shown (LABOR CODE, Art. 115);
5. Withholding of wages and kickbacks prohibited – No employer shall withhold any amount from the
wages unless authorized to do so or induce the employee to give up any part of his wages by force,
stealth, intimidation, threat or dismissal or by any other means without his consent (LABOR CODE, Art.
116);
6. No deduction to Ensure employment – No employer shall make deductions as consideration of a
promise of employment or retention of employment (LABOR CODE, Art. 117);
7. No Retaliatory measures – No employer shall refuse to pay or reduce the wages and benefits or
otherwise discharge the employee who has filed any complaint under this Title, or has testified or is
about to testify in such proceedings (LABOR CODE, Art. 118); and
8. No False reporting – No employer shall make any statement, report or record knowing such statement,
report or record to be false in any material respect (LABOR CODE, Art. 119).

(73) D Manufacturing is engaged in the business of manufacture and sale of household appliances. The
supervisors and foremen of the company were then receiving a daily wage of Php320 and Php300,
respectively. Sometime in 2005, a new law was passed increasing the statutory minimum wage and
salary rates in the private sector by Php25 per day but only for those receiving the minimum wage and
up to Php300. Did the wage increase result in wage distortion? Explain.
Yes, the wage increase resulted in wage distortion. Wage distortion means a situation where an increase in
prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in
wage or salary rates between and among employee groups in an establishment as to effectively obliterate the
distinctions embodied in such wage structure based on skills, length of service, or other logical bases of
differentiation. In other words, wage distortion means the disappearance or virtual disappearance of pay
differentials between lower and higher positions in an enterprise because of compliance with a wage order. In
the case at bar, only the daily wages of foremen were increased from Php300 to Php325, resulting in a situation
where the foremen would receive more than that of the supervisors. Thus, this resulted in wage distortion (PI
Manufacturing v. PI Manufacturing Supervisors and Foreman Association, G.R. No. 167217, February 4,
2008).

(74) X Bank classifies its employees according to five (5) levels. Sometime in 2010, the Board of Directors
approved a new salary scale wherein the hiring rates of new employees were increased by Php1,000
for those falling under Levels 1-3, and by Php2,000 for those classified under Levels 4-5. Only the
salaries of those who fell below the new minimum rates were adjusted. The union demanded for an
across-the- board increase for old employees. X Bank refused and maintained that it was not obliged
to do so. In its complaint, the union contended that the adjusted salary scale resulted in a wage
distortion using the classification based on new and old employees and thus necessitated a correction
or adjustment. Did the said change in salary scale result in wage distortion?
No, the change did not result in wage distortion. Jurisprudence laid down the four elements of wage distortion,
to wit: (1) an existing hierarchy of positions with corresponding salary rates; (2) a significant change in the
salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one; (3) the
elimination of the distinction between the two levels; and (4) the existence of the distortion in the same region
of the country. In the case at bar, the first element is wanting. While seniority may be a factor in determining
wages, it cannot be the sole basis when the nature of their work differs. Moreover, for purposes of determining
the existence of wage distortion, employees cannot create their own independent classification as this is a
matter of management judgment and discretion (Bankard Employees Union-Workers Alliance Trade Unions v.
NLRC, G.R. No. 140689, February 17, 2004).

(75) How should a wage distortion be settled? (2006, 1997, 2009 Bar)
Where the application of any prescribed wage increases by virtue of a law or wage order issued by any
Regional Board results in distortions of the wage structure within an establishment, the employer and the union
shall negotiate to correct the distortions. Any dispute arising from wage distortion shall be resolved through the
grievance procedure as provided in the applicable collective bargaining agreement and, if the dispute remains
unresolved, then through voluntary arbitration. In cases where there are no collective bargaining agreements
or recognized labor unions, the employers and workers shall endeavor to correct such wage distortions. Any
dispute arising therefrom shall be settled through the National Conciliation and Mediation Board and, if it
remains unresolved after ten (10) calendar days of conciliation, the issue of wage distortion shall be referred
to the appropriate branch of the NLRC (LABOR CODE, Art. 124, par. 5).

(76) W Company is engaged in a business involving integrated circuits to serve communications and data
processing industries. Through negotiations by the union, the company agreed to increase the
salaries/ wages of its employees within a four-year period. After a year of implementing the agreement,
 19

the company discovered an error in the automated payroll which caused overpayment of
salaries/wages to employees. Accordingly, the company notified the employees that the overpayment
will be deducted on a staggered basis. The union opposed the deduction and thereafter filed a
complaint against the company for violation of Article 100 of the Labor Code on non-diminution of
benefits. Will the action prosper?
No, the action will not prosper. Diminution of benefits is the unilateral withdrawal by the employer of benefits
already enjoyed by the employees. There is diminution of benefits when it is shown that: (1) the grant or benefit
is founded on a policy or has ripened into a practice over a long period; (2) the practice is consistent and
deliberate; (3) the practice is not due to error in the construction or application of a doubtful or difficult question
of law; and (4) the diminution or discontinuance is done unilaterally by the employer. In this case, the third
requisite is absent. An erroneously granted benefit may be withdrawn without violating the prohibition against
non-diminution of benefits because no vested right may be said to have arisen nor any diminution of benefit
may have resulted (TSPIC Corp v. TSPIC Employees Union, G.R. No. 163419, February 13, 2008).

(77) CSA-Bacolod appointed M as school registrar. For the 2009-2011 term, M alleged that there was a
diminution of her salary. The school explained that her total gross pay did not change as the school
merely opted to break down the amount to show the amount of honorarium. M maintains that by
converting part of her salary to honorarium, even if the total amount is the same, all other benefits that
are based on the monthly salary now have a lower basis. Was there diminution of benefits?
Yes, there was a diminution of benefits, thus entitling the respondent to salary differentials. M's remuneration
is founded on policy or contract. The explanation that the amount was merely broken down fails to convince.
There was no showing that M received honorarium prior to her 2009 reappointment. Thus, it is fair and just to
conclude that the entire amount she received prior reappointment was her monthly basic pay. Since she did
not continue to receive the same amount despite the addition of honorarium for the 2009 reappointment, the
basic pay indeed was reduced (Colegio San Agustin-Bacolod V. Montano, G.R. No. 212333; July 31, 2019,
Hernando Case)

LEAVES
(78) As a general rule, every employee who has rendered at least 1 year of service shall be entitled to a
yearly service incentive leave of 5 days with pay. Who are excluded from the benefit? (GMPFEV-10)
The following are not entitled to service incentive leave:
1. Government employees
2. Managerial employees and officers or members of the managerial staff
3. Persons in the Personal service of another
4. Field personnel and those whose time and performance is unsupervised by the employer
5. Those already Enjoying the benefit
6. Those enjoying Vacation leave with pay of at least five (5) days
7. Those employed in establishments regularly employing less than 10 employees (2018 Handbook on
Workers’ Statutory Monetary Benefits, p. 26).

(79) X worked as a bus driver for AB Trans. His daily route is from Lipa City, Batangas to Cubao, Quezon
City. For every trip, he is required to report on time to ensure prompt departure and arrival. Bus
inspectors also board the bus for general inspection while on the way from the point of origin to
destination. During his five (5) years of employment, he did not use his service incentive leave. When
he was dismissed, he sued his employer for non-payment of commutable service incentive. AB Trans
argued that X was not entitled to service incentive leave because he is considered as a field personnel
paid on a commission basis and thus excluded from the benefit. Will the action of X prosper? Explain.
Yes, the action of X will prosper. Section 1(D), Rule V, Book III of the Implementing Rules and Regulations of
the Labor Code excludes field personnel and other employees whose performance is unsupervised by the
employer including those who are engaged on purely commission basis. However, the phrase “other
employees whose performance is unsupervised by the employer” must not be understood as a separate
classification but must be taken as an amplification of the definition of field personnel. Here, while X is paid on
a commission basis, his work is supervised by his employer. Not being considered as field personnel, X is
entitled to service incentive leave (Auto Bus v. Bautista, G.R. No. 156367, May 16, 2005).

Note: DO 118-12 expressly provides that public utility bus drivers and conductors are now entitled to be paid
service incentive leave of 5 days for every year of service.
 20

(80) A, a female employee, who is living-in with B, is pregnant with her fifth child. Prior to her due date, she
filed for maternity leave, but the employer refused the application because she is not married. The
employer also argued that A is no entitled because maternity leave shall be paid for the first 4
deliveries. Is the refusal of the employer justified? What are the conditions for entitlement to the
maternity benefit leave?
No, the refusal of the employer is not justified. The law does not discriminate based on the civil status of a
female employee. Accordingly, this benefit applies to all female employees, whether married or unmarried. As
long as the female employee has paid at least 3 monthly contributions in the 12-month period immediately
preceding the semester of her childbirth, she can avail of the maternity benefits by complying with the
requirements on notification. Hence, even if A is not married, she is still entitled to the maternal leave,
regardless of civil status or the legitimacy of her child (2018 Handbook on Workers’ Statutory Monetary
Benefits, p. 28).

A is still entitled maternity leave even if it is her 5th child. As provided in RA 11210 otherwise known as 105-
Day Expanded Maternity Leave Law, maternity leave shall be granted to female workers in every instance of
pregnancy, miscarriage or emergency termination of pregnancy, regardless of frequency (RA 11210, Sec. 3).

Further, to be entitled to the maternity leave benefit, a female employee should be an SSS member employed
at the time of her delivery or miscarriage; she must have given the required notification to the SSS through her
employer; and her employer must have paid at least three monthly contributions to the SSS within the twelve-
month period immediately before the date of the contingency (i.e., childbirth or miscarriage) (2018 Handbook
on Workers’ Statutory Monetary Benefits, p. 28).

(81) What are the conditions for entitlement of paternity leave benefit?
A legally married male employee in the private and public sector shall be entitled to a seven-day paternity
leave benefit provided that he has met the following conditions: (ECN-BMA)
1. He is Employed at the time of delivery of his child;
2. He is Cohabiting with his spouse at the time she gives birth or suffers a miscarriage;
3. He has Notified his employer of the pregnancy of his wife and her expected date of delivery subject to
the provisions in the Rules for application of leave; and
4. His wife has given Birth, suffers a Miscarriage, or an Abortion (IRR of R.A. No. 8187, Sec. 3).

(82) A is married to B and they have three minor children. Later on, B was convicted for the crime of theft
and meted the penalty of imprisonment for two years. B was then arrested and jailed to serve the
sentence. Is A considered as a solo parent?
Yes, A is considered as a solo parent because she was left with the responsibility of parenthood due to the
criminal conviction resulting to the imprisonment of her spouse for at least a year. Section 3 (a) of RA 8972
provides that a solo parent is:
1. A woman who gives birth as a result of rape and other crimes against chastity provided she keeps and
raises the child;
2. Parent left solo or alone with the responsibility of parenthood due to:
a. Death of the spouse;
b. Spouse is detained of serving sentence for criminal conviction for at least a year;
c. Due to physical or mental incapacity of spouse;
d. Due to legal separation or de facto separation from spouse for at least 1 year so long as entrusted
with custody of the child;
e. Due to declaration of nullity or annulment of marriage as long as in custody of the children;
f. Due to abandonment of spouse for at least 1 year.
3. Unmarried mother or father who preferred to keep and rear his or her children;
4. Any other person who solely provides parental care and support to a child;
5. Any family member who assumes the responsibility of head of family as a result of death, abandonment,
disappearance or prolonged absence of the parent (RA 8972, Sec. 3).

(83) A was employed by BKY Company on June 10, 2010. Sometime in 2018, she suffered from intraductal
papilloma. Her doctor advised her that she needs to undergo the procedure of excision of the
lactiferous duct fistula. As a result, she filed a leave under the special leave benefits for women. Is A
entitled to such benefit?
Yes, A is entitled to the special leave benefit for women. Section 18 of RA 9710 provides that a woman
employee having rendered continuous aggregate employment service of at least 6 months for the last 12
months shall be entitled to a special leave benefit of 2 months with full pay based on her gross monthly
compensation following surgery caused by gynecological disorders (RA 9710, Sec. 18).
 21

(84) B, a female employee, filed charges against her live-in partner under RA 9262 or Anti-Violence Against
Women and Their Children Act. After suffering trauma, she filed for a leave. However, her employer did
not approve the same claiming that she already used up all her sick leave. Is B entitled to file for a
leave?
Yes, B is entitled to a leave under RA 9262. Under Section 43 of RA 9262, victims of violence against women
and their children shall be entitled to take a paid leave of absence up to 10 days in addition to other paid leaves
under the Labor Code extendible when the necessity arises as specified in the protection order. Hence, even
if B already used up all her sick leaves, she is still entitled to take a leave under RA 9262 (RA 9262, Sec. 43).

SPECIAL GROUPS OF EMPLOYEES

(85) What are the acts of discrimination against women that are prohibited under the Labor Code?
Article 133 of the Labor Code provides that it shall be unlawful for any employer to discriminate against any
woman employee with respect to terms and conditions of employment solely on account of her sex.
Specifically, the following are acts of discrimination:
1. Payment of lesser compensation, including wage, salary or other form of remuneration and fringe
benefits, to a female employee as against a male employee for work of equal value; and
2. Favoring a male employee over a female employee with respect to promotion, training opportunities,
study and scholarship grants solely on account of their sexes (LABOR CODE, Art. 133).

(86) What is the prohibition on stipulation against marriage with regard to female employees?
It shall be unlawful for an employer to require as a condition of employment or continuation of employment that
a woman employee shall not get married, or to stipulate expressly or tacitly upon getting married, a woman
employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate, or otherwise
prejudice a woman employee merely by reason of marriage (LABOR CODE, Art. 134).

(87) What is the exception to the prohibition on stipulation against marriage?

Dismissal based on this stipulation in the employment contract is a valid exercise of management prerogative.
The prohibition against personal or marital relationships with employees of competitor companies upon its
employees was held reasonable because relationships of that nature might compromise the interests of the
company. In laying down the assailed company policy, the employer only aims to protect its interests against
the possibility that a competitor company will gain access to its secrets and procedures (Duncan Association
v. Glaxo Wellcome, G.R. No. 162994, September 17, 2004).

(88) Is the policy of the employer banning spouses from working in the same company violates the rights
of the employee under the Constitution and the Labor Code?
It depends. Unless the employer can prove that the reasonable demands of the business require a distinction
based on marital status and there is no better available or acceptable policy which would better accomplish
the business purpose, an employer may not discriminate against an employee based on the identity of the
employee’s spouse. This is known as the bona fide occupational qualification exception.

There must be a compelling business necessity for which no alternative exists other than the discriminatory
practice. To justify a bona fide occupational qualification, the employer must prove two factors: (1) that the
employment qualification is reasonably related to the essential operation of the job involved; and, (2) that there
is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to
properly perform the duties of the job. Jurisprudence instruct us that the requirement of reasonableness must
be clearly established to uphold the questioned employment policy. The employer has the burden to prove the
existence of a reasonable business necessity (Star Paper Corp. v. Simbol, G.R. No. 164774, April 12, 2006).

(89) A bank implemented an "Exogamy Policy" which states: “Effective May 1, 2006, when two employees
working for One Network Bank are subsequently married through Church or Civil Court rites, one must
terminate employment immediately after marriage. This policy shall not affect co-employees of the
bank who are already married to each other as of the end of April 2006.” Is the Exogamy Policy valid?
No. Unless the employer can prove that the reasonable demands of the business require a distinction based
on marital status and there is no better available or acceptable policy which would better accomplish the
business purpose, an employer may not discriminate against an employee based on the identity of the
employee's spouse. This is known as the bona fide occupational qualification exception. Here, the no-spouse
qualification is not reasonably related to the bank's essential operation of its business. It unduly discourages
all employees from marrying a fellow worker at the pain of termination. Second, there is no factual basis to
 22

conclude that all of their employees who marry each other would be unable to perform their duties, entailing
one's dismissal (Catherine Dela Cruz-Cagampan v. One Network Bank, Inc., G.R. No. 217414; June 22, 2022).

(90) GG Airlines hired and recruited A, B and C as flight attendants. They continued their employment until
they were separated from service on various dates. Later, A, B and C brought an action for illegal
dismissal against GG Airlines. According to them, the termination of their employment was illegal
because the same was made solely on the ground that they became pregnant. In its defense, GG
Airlines invoked the Employment Contract which provides that the employment of a flight attendant
who becomes pregnant at any time during the term of the contract shall render such contract void and
shall be cause for termination for lack of medical fitness. Decide the case.
A, B and C were illegally dismissed. It is illegal and unlawful to terminate the employment of any woman by
reason of pregnancy. Section 135 of the Labor Code provides that it shall be unlawful for any employer to
discharge a woman on account of her pregnancy. While pregnancy does present physical limitations that may
render difficult the performance of functions associated with being a flight attendant, it would nevertheless be
the height of iniquity to view pregnancy as a disability so permanent and immutable that it must entail the
termination of one’s employment. It is clear that any individual, regardless of gender, may be subject to
exigencies that limit the performance of functions, but pregnancy could not be such an impairing occurrence
that it leaves no other recourse but the complete termination of the means through which a woman earns a
living (LABOR CODE, Art. 135; Saudi Arabian Airlines v. Rebesencio et al., G.R. No. 198587, January 14,
2015).

(91) Who is a working child?

Working child refers to any child engaged as follows:
1. When the child is below 18 years of age, in work or economic activity that is not child labor; and
2. When the child is below 15 years of age:
a. In work where he/she is directly under the responsibility of his/her parents or legal guardian and
where only members of the child's family are employed; or
b. In public entertainment or information (D.O. No. 65-04, Sec. 3(c)).

(92) What are the working hours of a working child? The following are the hours of work of a working child:
The following are the hours of work of a working child:
1. For a child below 15 years of age, the hours of work shall not be more than 20 hours a week, provided
that the work shall not be more than 4 hours at any given day;
2. For a child 15 years of age, but below 18, the hours of work shall not be more than 8 hours a day, and in
no case beyond 40 hours a week; and
3. No child below 15 years of age shall be allowed to work between 8:00 p.m. and 6:00 a.m. of the
following day and no child 15 years of age but below 18 shall be allowed to work between 10:00 p.m.
and 6:00 a.m. of the following day (D.O. No. 65-04, Sec. 15, par. 1).

Note: Sleeping time as well as travel time of a child engaged in public entertainment or information from his/her
residence to his/her workplace shall not be included as hours worked without prejudice to the application of
existing rules on employee’s compensation (D.O. No. 65-04, Sec. 15, par. 2).

(93) R, a 17-year-old girl, signed a contract with MG Company to work as a model promoting the new flavors
of Crazy Vodka, its premier alcoholic product. It was stipulated in the contract that since R is a minor,
she will only work for eight (8) hours per day during the shooting and will not work beyond 10:00 P.M.
until 6:00 A.M. the next morning. Did MG Company violate any law?
Yes, MG Company violated RA 9231. Under DO 65-04, the rules and regulations implementing RA 9231, as
amended, no child below 18 years of age shall be employed as a model in any advertisement directly or
indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form
of violence or pornography. Thus, MG Company clearly violated the prohibition when it engaged R in
advertising an alcoholic beverage (D.O. No. 65-04, Sec. 6).

(94) D is employed by A Company to perform laundry services at its staff house. One morning, while D was
performing her assigned task and hanging her laundry, she accidentally slipped and hit her back on a
stone. The accident prevented her from working. She was permitted to go on leave for medication.
After a month, A Company offered her PhP5,000 to persuade her to quit her job instead. D refused and
informed A Company that she preferred to return to work. A was not permitted to work again and was
thereafter dismissed. Hence, D filed a case for illegal dismissal before the Labor Arbiter. The Labor
Arbiter awarded salary differential, 13th month pay differential and separation pay. NLRC affirmed and
 23

held that D was a regular employee and thus entitled to such benefits. In its defense, A Company
insisted that D is a mere domestic helper and not a regular employee. Is D a kasambahay? Explain.
No, D is not a kasambahay. Under Section 4(d) of RA 10361, a domestic worker or kasambahay refers to any
person engaged in domestic work within an employment relationship. Domestic or household service shall
mean service in the employer’s home which is usually necessary or desirable for the maintenance and
enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the
employer’s household. The criterion is the personal comfort and enjoyment of the family of the employer in the
home of said employer. The definition cannot be interpreted to include househelper or laundry women working
in staff houses of a company. Hence, D cannot be considered as a kasambahay (Apex Mining v. NLRC, G.R.
No. 94951, April 22, 1991).

(95) What are the rights and benefits of a kasambahay granted under RA 10361 or Batas Kasambahay?
The following are the rights of a kasambahay: (MRS-13-FCS-BPCEOC-CTR)
1. Minimum wage;
2. Other mandatory benefits, such as the daily and weekly Rest periods;
3. Service Incentive Leave;
4. 13th month pay;
5. Freedom from employers’ interference in the disposal of wages;
6. Coverage under the SSS, PhilHealth and Pag-IBIG laws;
7. Standard of treatment;
8. Board, lodging and medical attendance;
9. Right to Privacy;
10. Access to outside Communication;
11. Access to Education and training;
12. Right to form, join, or assist labor Organization;
13. Right to be provided a copy of the employment Contract;
14. Right to Certificate of employment;
15. Right to Terminate the employment; and
16. Right to exercise their own Religious beliefs and cultural practices.

(96) Who is an industrial homeworker?

An industrial homeworker can be defined as any person engaged in industrial homework. Industrial homework
means a system of production where work for an employer or contractor is carried out by a homeworker in or
about his/her home. In such case, the materials may or may not be furnished by the employer or contractor
(IRR of the Labor Code, Sec. 2).

(97) When is homework not allowed?

No homework shall be performed on the following: (1) explosives, fireworks and articles of like character; (2)
drugs and poisons; and (3) other articles, the processing of which requires exposure to toxic substances (IRR
of the Labor Code, Sec. 13).

(98) M is a construction worker whose work day is from 10:00 P.M. to 6:00 A.M. the following day. While at
work, he suddenly experienced back pain. Due to the incident, he requested his employer to allow him
to undergo health assessment and get advice on how to reduce his back pain during work. The
employer refused and claimed that M is not covered by the law governing nightworkers as the same
only applies to women. Is the contention correct?
No, the contention is not correct. Under Section 2 of DO 119-12, the implementing rules and regulations of RA
10151, a night worker is any employed person whose work covers the period from 10 in the evening to 6
o’clock the next morning provided that the worker performs no less than 7 consecutive hours of work. The law
has effectively repealed Articles 130 and 131 of the Labor Code and does not distinguish as to what sex the
employee should be. Accordingly, all workers whose schedule falls within the said schedule are deemed night
workers and may avail of the right to request health assessment without charge (D.O. No. 119-12, Sec. 2).

(99) P is a software engineer in an advertising firm. Sometime in 2015, she figured into an accident which
resulted to the loss of her ability to use her legs. Nevertheless, the performance and productivity of P
remained the same. When the advertising firm had a change of management, P noticed that her wage
became 25% lower than the minimum wage. When P asked management as to the sudden diminution
of her wage, the management said that handicapped workers may be paid not less than 75% of the
minimum wage. Is the employer correct?
No, the employer is not correct. Under Section 5 of RA 7277, as amended by RA 10524, a qualified disabled
employee shall be subject to the same terms and conditions and the same compensation, privileges, benefits,
 24

fringe benefits, incentives or allowances as a qualified able-bodied person. A qualified disabled person is an
employee who can perform, with or without reasonable accommodations, the essential functions of her
employment. In this case, P is a qualified disabled person. There was no allegation that P cannot perform the
essential functions of her employment. The employer should not have had her wage cut below minimum wage
and should have provided the same compensation received by able-bodied software engineers in the firm,
since the Magna Carta for Persons with Disability effectively amended Article 80 of the Labor Code with regard
to minimum age of such workers (R.A. No. 10524, Sec. 5).

(100) X, the owner of JM Foods Corporation, informed you about his plan to expand his business and put up
a new brand of food chain in the Philippines. He told you that he intends to hire at least 200 crews for
his initial opening. How will you convince X to hire persons with disabilities?
I will advise X to hire persons with disabilities and emphasize to him the incentives provided under the Magna
Carta for Persons with Disability. Section 8(b) of RA 7277, as amended by RA 10524, provides that private
entities that employ disabled persons who meet the required skills or qualifications, either as a regular
employee, apprentice or learner, shall be entitled to an additional deduction, from their gross income,
equivalent to 25% of the total amount paid as salaries and wages to disabled persons: Provided, however, that
such entities present proof as certified by the DOLE that disabled persons are under their employ. Provided
further, that the disabled employee is accredited with DOLE and DOH as to his disability, skills and
qualifications. Additionally, private entities that improve or modify their physical facilities in order to provide
reasonable accommodation for disabled persons shall also be entitled to an additional deduction from their net
taxable income, equivalent to fifty percent (50%) of the direct costs of the improvements or modifications. This
section, however, does not apply to improvements or modifications of facilities under Batas Pambansa Bilang
344 (R.A. No. 7277, Sec. 8).

SEXUAL HARASSMENT IN THE WORK ENVIRONMENT

(101) A is a female employee working as an office clerk under the supervision of B, the office manager. On
several occasions, B called A asking her to come to his office. At one time, while inside the office, B
touched her shoulder and part of her neck. He also tickled her ears. A filed a complaint for sexual
harassment. B argued that his acts do not constitute sexual harassment because A did not allege in
her complaint that there was a demand, request, or requirement of a sexual favor as a condition for
her continued employment or for her promotion to a higher position. Is B guilty of sexual harassment?
Explain.
Yes, B is guilty of sexual harassment. It is true that sexual harassment under RA 7877 calls for a “demand,
request or requirements of a sexual favor”. However, 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. In the
case at bar, the acts committed by B generated an intimidating and hostile environment for A (Domingo v.
Rayala, G.R. No. 155831, February 18, 2008).

(102) What are the acts covered in gender-based sexual harassment in the workplace? (USH)
It includes the following:
1. An act or series of acts involving any Unwelcome sexual advances, requests or demand for sexual
favors or any act of sexual nature, whether done verbally, physically or through the use of technology
such as text messaging or electronic mail or through any other forms of information and communication
systems, that has or could have a detrimental effect on the conditions of an individual’s employment or
education, job performance or opportunities;
2. A conduct of Sexual nature and other conduct based on sex affecting the dignity of a person, which is
unwelcome, unreasonable, and offensive to the receipts, whether done verbally, physically or through
the use of technology such as text messaging or electronic mail or through any other forms of
information and communication systems; and
3. A conduct that is unwelcome and pervasive and creates an intimidating, Hostile, or humiliating
environment for the recipient (R.A. No. 11313, Article IV, Sec. 16).

C. SOCIAL WELFARE LEGISLATION

SOCIAL SECURITY SYSTEM LAW (R.A. No. 8282, as amended by R.A. No. 11199)
(103) Who are compulsorily covered by the Social Security System?
The following are compulsorily covered by the SSS Law: (ESOF2)
 25

1. Employees and their employers - all employees including kasambahays or domestic workers not over 60
years of age and their employers (RA 11199, Sec. 9);
2. Self-employed – includes, but not limited to the following:
3. Self-employed professionals;
4. Partners and single proprietors of businesses;
5. Actors and actresses, directors, scriptwriters, and news correspondents, who do not fall within the
definition of the term “employee” in Sec. 8(d) of RA 11199;
6. Professional athletes, coaches, trainers, and jockey; and
7. Individual farmers and fishermen (RA 11199, Secs. 9-A);
8. Overseas Filipino Workers (OFWs) – all sea-based and land-based OFW as defined under R.A. No.
8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995 as amended,
provided that they are not over 60 years of age (RA 11199, Sec. 9-B); and
9. A Farmer, Fisherman, or a worker in the informal sector (IS) - an IS member being defined as one whose
income is irregular or seasonal and who may be registered as a self-employed member under the SSS
AlkanSSSya Program (SSS Membership Primer, August 2019, p 1-2).

(104) Who are voluntarily covered by the SSS Law?

The following may be covered by the SSS on a voluntary basis: (SOF-CS)
1. Non-working Spouses who devote full-time to managing the household and family affairs unless they are
also engaged in other vocation or employment which is subject to mandatory coverage (RA 11199, Sec.
9(b));
2. OFW upon the termination of their employment overseas (RA 11199, Sec. 9-B(f));
3. Filipino permanent migrants, including Filipino immigrants, permanent residents, and naturalized citizens
of their host countries (RA 11199, Sec. 9-B (g));
4. An employee under compulsory Coverage who has been separated from employment who continues to
pay contribution (RA 11199, Sec. 11); and
5. A Self-employed member who realizes no income in any given month who continues to pay contribution
(RA 11199, Sec. 11-A).

(105) Who are excluded from SSS coverage? (NP-FT)

The following are the services that are exempted from the compulsory coverage under RA 11199:
1. Services where there is No employee-employer relationship in accordance with existing labor laws, rules,
regulations, and jurisprudence;
2. Services performed in the employ of the Philippine Government or instrumentality or agency thereof;
3. Services performed in the employ of the Foreign government or international organization or their wholly-
owned instrumentality unless there is an agreement with the Philippine Government for the inclusion of
such employees in the SSS; and
4. Such other services performed by Temporary and other employees which may be excluded by regulation
of the Commission (RA 11199, Sec. 8(j)).

(106) X is an employee of Falcon Shop earning Php4,000.00/month. Due to his struggle to make ends meet,
he requested his employer to stop deducting from his salary his SSS monthly contribution saying that
he’s already waiving his social security coverage. If you were the employer, would you grant X’s
request?
No, X’s request should not be granted. As X’s employer, I am duty bound to promptly remit SSS contributions.
Sections 8 and 9 of RA 11199 or the Social Security Act of 2018 requires the compulsory coverage of
employers, who carries on in the Philippines any trade, business, industry, and uses the services of another,
and employees, who are not over 60 years old. Non-remittance of contribution is a violation of the law on the
part of the employer. (RA 11199, Sec. 22). If I will grant X’s request, I can be held liable under the SSS law.
Therefore, I should not grant X’s request to stop deducting his SSS contributions.

(107) On the basis of the provision of package of welfare benefits far superior than those provided by the
SSS, Golden Corporation filed a petition with the SSS for exemption from coverage. The welfare plan
is funded solely by the company without contributions from its employees, and is admittedly, the best
welfare plan in the Philippines. Will the petition for exemption prosper?
No, the petition for exemption will not prosper. The provision of private benefit plans, as provided in Section
9(a) of the S, shall not operate to exempt any employer from its compulsory coverage. If the private plan is
superior to that of RA 11199, the plan may be integrated with the SSS plan. Here, the private benefit plan of
Golden Corporation is not exempt from the coverage of the SSS although it may be integrated with the SSS
plan. Therefore, the petition for exemption will not prosper (RA 11199, Sec. 9).
 26

(108) Who are the dependents under the SSS Law? (SCP)
The following considered as dependents under the SSS Law:
1. Legal Spouse entitled for support;
2. Child, whether legitimate, legitimated, legally adopted or illegitimate; and
3. Parents dependent for support (RA 11199, Sec. 8 par.(e))

(109) What are the conditions for children to be considered as dependents? (UN21)
1. Unmarried;
2. Not gainfully employed; and
3. Has not reached 21 years of age or if 21 years of age, he is congenitally or while still a minor has been
permanently incapacitated and incapable of self-support, physically or mentally (RA 11199, Sec. 8
par.(e)).

(110) Who are the primary and secondary beneficiaries under the SSS Law?
The following are the beneficiaries under the SSS Law:
1. Primary beneficiaries: (SSC)
a. The dependent Spouse until he or she remarries (RA 11199, Sec. 8 (k));
b. The dependent Spouse who has not cohabited or entered in a “live-in” relationship before or after
the death of the member (IRR of RA 11199, Rule 12, Sec.12); and
c. Dependent legitimate/ legitimated or legally adopted and illegitimate Children. (RA 11199, Sec. 8 (k))

Note: Where there are legitimate or illegitimate children, the former shall be preferred. The dependent
illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated, or legally adopted
children. In the absence of the dependent legitimate, legitimated, or legally adopted children of the member,
his/her dependent illegitimate children shall be entitled to 100% of the benefits (IRR of R.A. No. 11199, Rule
12, Sec. 12(ii)).

2. Secondary beneficiaries (in the absence of primary beneficiaries): (PD)

a. The dependent Parents; or
b. In the absence of all the foregoing, any other person Designated by the covered employee (RA
11199, Sec. 8 (k)).

Note: The person designated by the member shall be one who has a right to claim for support from the
deceased member under the Family Code, including dependent children who have reached the age of majority
(IRR of R.A. No. 11199, Rule 11, Sec.13).

(111) X and Y were married in 1992. Y, member of SSS, designated his wife, X, and their children as his
beneficiaries. In 2005, Y died. Thereafter, X filed a claim for death benefits with the SSS as the wife of
the deceased-member. It appeared, however, that Y submitted a different set of beneficiaries and that
he was previously married to another woman. Consequently, X’s claim was denied. She insisted that
she was the legitimate wife of Y and filed a petition with the Social Security Commission (SSC). The
SSC dismissed the petition for lack of merit on the ground that X failed to prove that her marriage with
Y was valid. On appeal, CA reversed the SSC’s decision. It held that SSC could not make a
determination of the validity or invalidity of X and Y’s marriage. Does SSC have the authority to
determine the validity of X and Y’s marriage?
Yes, SSC has the authority to determine the validity of the marriage in this case. Although the SSC is not
intrinsically empowered to determine the validity of marriages, it is required by Sec. 4 (b) (7) of RA 8282 (Now
RA 11199) to examine available statistical and economic data to ensure that the benefits fall into the rightful
beneficiaries. The investigations conducted by SSS are appropriate to ensure that the benefits provided under
the SS law are received by the rightful beneficiaries. It is not hard to see that such measure is necessary for
the system’s proper administration, otherwise, it will be swamped with bogus claims that will pointlessly deplete
its funds. Such scenario will certainly frustrate the purpose of the law which is to provide covered employees
and their families protection against the hazards of disability, sickness, old age and death, with a view to
promoting their well-being in the spirit of social justice (Social Security Commission v. Azote, G.R. No. 209741,
April 15, 2015).
 27

Monthly Contribution
Benefit Remarks/Other Conditions Required to Avail the Benefits
Paid

Retirement At least 120 monthly 1.

Has reached 60 years old and is separated from
Benefits contributions prior to the employment or has ceased to be self-employed, except:
semester of retirement a. In the case of an underground mineworker (RA 8558),
at least 55 years old effective 13 March 1998; and
b. In the case of an underground or a surface mineworker
(RA 10757), at least 50 years old effective 27 April
2016;
2. Is at least 65 years old, except:
a. In the case of an underground mineworker effective 13
March 1998 (RA 8558) or a surface mineworker
effective 27 April 2016 (RA 10757), at least 60 years
old, and
b. In the case of a racehorse jockey (RA 10789), at least
55 years old effective 24 May 2016 (IRR of RA 11199,
Rule 21, Sec. 2).
Death Benefits At least 36 monthly For the beneficiary of an employee to be entitled to death
contribution before the benefits under the SSS, the cause of death of the employee
semester of death must be a sickness listed as an occupational disease by ECC;
or any other illness caused by employment, subject to proof that
the risk of contracting the same is increased by the working
conditions (RA 11199, Sec. 13).

Disability Benefits At least 36 monthly

contributions prior to the
semester of disability

Funeral Benefits 1 monthly contribution
Sickness Benefits At least 3 monthly 1.
contribution within the 12-
month period immediately
before the semester of 2.
sicknessor injury
3.
Maternity Leave At least 3 monthly
Benefits contribution immediately
preceding the semester of
childbirth or miscarriage
1. Member must have been reported for coverage by his
employer even if no contribution paid;
2. Self-employed member/ OFW/ non-working spouse/
voluntary member who had at least 1 monthly contribution
payment (RA 11199, Sec. 13B).
Unable to work due to sickness or injury and confined for
at least 4 days either in a hospital or elsewhere as defines
by the SSS;
Has notified the employer, if employed, or the SSS, if
unemployed or SE/VM; and
Has used up all current company sick leaves with pay for
the current year, if employed, except sea based OFWs.
(IRR of RA 11199, Rule 25, Sec. 2).
1. Notify the SSS thru her employer of pregnancy and
probable date of her childbirth;
2. Full payment shall be advanced by the employer within 30
days from the filing of the maternity leave application;
a. Payment of daily maternity benefits shall be a bar to
the recovery of sickness benefits under the SSS law
for the same period for which daily maternity benefits
have been received;
b. SSS shall immediately reimburse the employer of the
amount of maternity benefits advanced to the
employee by the employer upon receipt of satisfactory
proof of such payment and legality thereof;
3. Maternity benefits shall be paid only for the first 4 deliveries
or miscarriages; and
4. In case an employee member should give birth or suffer
miscarriage without the required contributions having been
remitted for her by her employer, or without the latter
having previously notified the SSS, the employer shall pay
to the SSS damages equivalent to the benefits which said
employee member would otherwise have been entitled to
(RA 11199, Sec. 14-A).
 28

Monthly Contribution
Benefit Remarks/Other Conditions Required to Avail the Benefits
Paid

Note: If the female member is self-employed including those in

the informal economy, voluntary member, or an OFW, notice
shall be given directly to SSS (SSS Circular No. 2019-009,
effective March 11, 2019, Sec. 8).

In the advent of the Expanded Maternity Leave Law, maternity

leave shall be granted to qualified female workers in every
instance of pregnancy, miscarriage, or emergency termination
of pregnancy, regardless of frequency (IRR of R.A. No. 11210,
Rule IV, Sec. 4).

Unemployment At least 36 months 1. Not over 60 years old at the time of involuntary separation,
Insurance/ contributions 12 months of except;
Involuntary which should be in the 18- a. In the case of underground mineworker or surface
Separation month period immediately mine- worker [R.A. No. 10757], not over 50 years old;
Benefits preceding the involuntary or
unemployment or b. In the case of racehorse jockey [R.A. No. 10789], not
over 55 years old.
separation (RA 11199,
2. Involuntarily separated from employment provided that
Sec. 14-B)
such separation did not arise from fault or negligence of the
employee and which may be attributed to any of, but not
limited to, the following:
a. Installation of labor-saving devices;
b. Redundancy;
c. Retrenchment to prevent loss;
d. Closure or cessation of operation; or
e. Disease/illness (IRR of RA 11199, Rule 27, Sec.2)

Note: Can only be claimed once every 3 years starting from

the date of involuntary separation or unemployment.

In case of concurrence of 2 or more contingencies within the

same compensable period, only the highest benefit shall be
paid (RA 11199, Sec. 14-B).

A claim for unemployment insurance or involuntary separation

ben- efits shall be filed within one (1) year from the date of
separation or unemployment (IRR of RA 11199, Rule 27, Sec.
5).

(112) A, single, has been an active member of the SSS for the past 20 months. She became pregnant out of
wedlock and on her 7th month of pregnancy, she was informed that she would have to deliver the baby
through caesarean section because of some complications. Can A claim maternity benefits? If yes,
how many days can she go on maternity leave? (2010 Bar)
Yes, A can claim maternity benefits. Section 14-A of RA 11199 in relation to the Expanded Maternity Leave
Law does not provide any qualification as to the civil status of the claimant for maternity benefits so long as
the said female employee has paid at least 3 months contributions within the 12-month period immediately
preceding the semester of her childbirth or miscarriage. In this case, A is entitled to maternity benefits because
she has paid her contributions for the past 20 months. Therefore, A shall be paid a daily maternity benefit
equivalent to 100% of her average daily salary credit for 105 days in case of caesarian delivery (RA 11199,
Sec. 14-A).

(113) Several employees of ABC corporation, an employer registered with the SSS, filed separate complaints
against ABC for non-remittance of their SSS contributions. Upon investigation, it was discovered that
ABC corporation indeed failed to remit the SSS contributions of its employees from 1997-2000. Is ABC
corporation liable for the non-remittance of the SSS contributions of its employees?
 29

Yes, ABC Corporation is liable. Prompt remittance of SSS contributions under Section 22 (a) of RA 11199 is
mandatory. Any divergence from this rule subjects the employer not only to monetary sanctions, i.e., the
payment of penalty of two percent (2%) per month, but also to criminal prosecution if the employer fails to: (a)
register its employees with the SSS; (b) deduct monthly contributions from the salaries/wages of its employees;
or (c) remit to the SSS its employees’ SSS contributions and/or loan payments after deducting the same from
their respective salaries/wages. Here, ABC failed to remit the contribution from 1997-2000. Therefore, ABC is
liable for the non-remittance of the SSS contribution of its employees (Jorge B. Navarra vs. People of the
Philippines, G.R. No. 224943, March 20, 2017).

GOVERNMENT SERVICE INSURANCE SYSTEM LAW (R.A. No. 8291)

(114) Who are covered by the GSIS Law? (GBC)
The following are covered by the GSIS Law:
1. All Government personnel, whether elective or appointive, irrespective of the status of appointment,
provided they are receiving fixed monthly compensation and have not reached the mandatory retirement
age of 65 years (IRR of RA 8291, otherwise known as “The Government Service Insurance System Act of
1997”, Rule II, Sec. 2.1);
2. An employee who is already Beyond the mandatory retirement age of 65 shall be compulsorily covered
and be required to pay both the life and retirement premiums under the following situations;
3. An elective official who at the time of election to public office is below 65 years of age and will be 65 years
or more at the end of his term of office, including the period/s of his re-election to public office thereafter
without interruption.
4. Appointive officials who, before reaching the mandatory age of 65, are appointed to a government position
by the President of the Republic of the Philippines and shall remain in government service at an age
beyond 65 (IRR of RA 8291, Rule II, Sec. 2.2); and
5. Contractual employees including casuals and other employees with an employee-government agency
relationship, provided they are receiving fixed monthly compensation and rendering required number of
working hours for the month (IRR of RA 8291, Rule II, Sec. 2.3).

(115) Who are excluded from GSIS Law?

The following are excluded from the compulsory coverage:
1. Uniformed personnel of the Armed Forces of the Philippines (AFP);
2. Uniformed personnel of the Philippine National Police (PNP);
3. Uniformed personnel of the Bureau of Fire Protection (BFP);
4. Uniformed personnel of the Bureau of Jail Management and Penology (BJMP);
5. Barangay and Sanggunian Officials who are not receiving fixed monthly compensation;
6. Contractual employees who are not receiving fixed monthly compensation; and
7. Employees who do not have monthly regular hours of work and are not receiving Fixed monthly
compensation (IRR of RA 8291, Rule II, Sec. 3).

(116) J, a former director of DOLE, was hired to work on a DOLE-International Labor Organization (ILO)
project on work safety. She was hired as a consultant and is required to deliver outputs for such
project, report on a regular basis, and present for DOLE during ILO workshops and consultations. For
this, J demanded that she be reported by DOLE again as an employee and that her GSIS membership
be renewed. Rule on J’s contention.
J’s contention is wrong. Under Section 3 of the IRR of RA 8291, contractuals who have no employer-employee
relationship with the government agency they serve are excluded from the coverage of the GSIS. In this case,
J’s engagement as a consultant is contractual in nature because she was hired for a specific project only. As
a contractual with no employer-employee relationship with the government, J’s GSIS membership cannot be
renewed. Therefore, DOLE is not required to report J as an employee for purposes of GSIS coverage.

(117) Who are the dependents under GSIS Law? (SCP)

The following are the dependents under the GSIS Law:
1. Legitimate Spouse dependent for support upon the member or pensioner;
2. Legitimate, legitimated, legally adopted Child including an illegitimate child who is unmarried, not gainfully
employed, not over the age of majority, or is over the age of majority but incapacitated and incapable of
self-support employment due to mental or physical defect acquired prior to the age of majority; and
3. Parents who are dependent upon the member for support (RA 8291, Sec. 2(f)).

(118) Who are the dependents under the GSIS Law?

 30

1. The following are the primary beneficiaries under the GSIS Law: (SC)
a. Legal dependent Spouse until he/she remarries; and
b. Dependent Children (RA 8291, Sec. 1(g)).

2. The following are the secondary beneficiaries under the GSIS Law: (PD)
a. Dependent Parents; and
b. Legitimate Descendants subject to the restrictions on dependent children (RA 8291, Sec. 1(h)).

(119) What is the basic monthly pension under the GSIS Law?
The basic monthly pension is equal to 37.5% of the revalued average monthly compensation; plus 2.5% of
said revalued average monthly compensation for each year of service in excess of 15 years, provided that the
basic monthly pension shall not exceed 90% of the average monthly compensation (RA 8291, Sec. 9(a)).

(120) What are the minimum amounts required for the basic monthly pension?
The basic monthly pension shall not be less than ₱1,300.00, and it shall not be less than ₱2,400.00 for those
who have rendered at least 20 years of service (RA 8291, Sec. 9(b)).

(121) What constitutes separation benefits under the GSIS Law?

The separation benefits shall consist of the following:
1. Cash payment equivalent to 100% of his average monthly compensation for each year of service he paid
contributions, but not less than ₱12,000.00 payable upon reaching 60 years of age or upon separation,
whichever comes later: Provided, that the member resigns or separates from the service after he has
rendered at least 3 years of service but less than 15 years; or
2. A cash payment equivalent to 18 times his basic monthly pension payable at the time of resignation or
separation, plus an old-age pension benefit equal to the basic monthly pension payable monthly for life
upon reaching the age of 60: Provided, that the member resigns or separates from the service after he
has rendered at least 15 years of service and is below 60 years of age at the time of resignation or
separation (RA 8291,Sec.11).

(122) What constitutes unemployment or involuntary separation benefits under the GSIS Law?
Unemployment benefits in the form of monthly cash payments equivalent to 50% of the average monthly
compensation shall be paid to a permanent employee who is involuntarily separated from the service due to
the abolition of his office or position usually resulting from reorganization: Provided, that he has been paying
integrated contributions for at least 1 year prior to separation (RA 8291, Sec.12).

(123) What are the retirement benefit options under the GSIS Law?
A retiring member has the following options:
1. Five (5) year lump sum equivalent to 60 months of the Basic Monthly Pension (BMP), subject to
qualification requirements, less all outstanding obligations of the member in accordance with the Claims
and Loans Interdependence Policy (CLIP), plus an old-age pension benefit equal to the BMP payable for
life, starting on the first day of the month following the expiration of the 5 year guaranteed period (IRR of
RA 8291, Rule IV, Sec. 20.2.1); or
2. Cash payment benefit equivalent to 18 times of the BMP, subject to qualification requirements, less all
outstanding obligations of the member in accordance with the CLIP, plus a monthly pension for life payable
on the first month following the date of retirement (IRR of RA 8291, Rule IV, Sec. 20.2.2).

Note: Unless the service is extended by appropriate authorities, retirement shall be compulsory for an
employee of 65 years of age with at least 15 years of service provided that if he has less than 15 years of
service, he may be allowed to continue in the service in accordance with existing civil service rules and
regulations (RA 8291, Sec.13(b)).

(124) What are disability benefits under GSIS Law?

Disability benefits are the benefits that are granted to a member due to the loss or reduction in earning capacity
caused by a loss or impairment of the normal functions of his/her physical and/or mental faculties as a result
of an injury or disease (IRR of RA 8291, Rule IV, Sec. 23.1).

Note: The loss in earning capacity disability benefits shall be determined and granted not only on the basis of
the member’s actual loss of income from his/her usual occupation but also on his/her incapacity to continue
engaging in any other gainful occupation because of the impairment (IRR of RA 8291, Rule IV, Sec. 23.1).
 31

(125) What are the kinds of disability under GSIS Law?

A disability may either be permanent total, permanent partial, or temporary total, as determined by the GSIS
based on established medical standards (IRR of RA 8291, Rule IV, Sec. 23.1).
1. Permanent Total Disability (PTD) - due to injury or disease causing complete, irreversible, and
permanent incapacity that will permanently disable a member to work or to engage in any gainful
occupation resulting to loss of income (IRR of RA 8291, Rule IV, Sec. 23.2.1).
2. Permanent Partial Disability (PPD) – accrues or arises upon irreversible complete and permanent loss
or impairment of certain physical faculties, despite which the member is able to pursue a gainful
occupation resulting to the disability to work for a limited period of time (IRR of RA 8291, Rule IV, Sec.
23.3.2).
3. Temporary Total Disability (TTD) – accrues or arises when the impaired physical and/or mental
faculties can be rehabilitated and/or restored to their normal functions, but such disability shall result in
temporary incapacity to work or to engage in any gainful occupation (IRR of R.A. No. 8291, Rule IV, Sec.
23.24.3).

(126) Does the GSIS Law require death to be work-related to be compensable with survivorship pension?
No. The law only requires the following:
1. That the deceased was in the service at the time of his death; or
2. If separated from the service, has at least 3 years of service at the time of his death and has paid 36
monthly contributions within the five-year period immediately preceding his death; or has paid a total of
at least 180 monthly contributions prior to his death (RA 8291, Sec. 21 par. 1).

(127) Who are compulsorily covered by the GSIS life insurance benefit?
Life insurance shall be compulsory for all employees, including the members of the Judiciary and the
Constitutional Commissioners, but excluding the uniformed members of the AFP, PNP, BFP, and BJMP (IRR
of RA 8291, Rule XI, Sec. 11.1).

(128) May an employee, by himself, apply for optional life insurance?

Yes. A member may, at any time, apply for optional life insurance and pre-need coverage for himself and/or
his dependents (R.A. No. 8291, Sec. 26).

(129) What is the prescriptive period for claims under the GSIS Law?
Claims for benefits under the GSIS Law except for life and retirement shall prescribe after 4 years from the
date of contingency (R.A. No. 8291, Sec. 28).

Benefit Remarks/Other Conditions Required to Avail the Benefits

Separation 1. If the member resigns or separates from service, he has rendered at least 3 years of service
Benefits but less than 15 years; or
2. If the member resigns or separates from service, he has rendered at least 15 years of
service and is below 60 years of age (R.A. No. 8291, Sec. 11).
Retirement 1. Has rendered at least 15 years of service;
Benefits 2. At least 60 years of age at the time of retirement; and
3. Not receiving a monthly pension benefit from permanent total disability (R.A. No. 8291, Sec.
13-A).
Note: Retirement is compulsory upon reaching 65 years of age with at least 15 years of
service. But if he has rendered less than 15 years of service, he may be allowed to complete
the said period (R.A. No. 8291, Sec. 13).

Permanent 1. In service at the time of disability;

Total Disability 2. If he is separated from service, has paid at least 36 monthly contributions with- in 5 years
Benefits immediately before the disability, or has paid a total of at least 180 monthly contributions
prior to the disability;
3. Member cannot enjoy monthly income benefit and the old-age retirement si- multaneously
(R. A. No. 8291, Sec. 16 (a)); and
4. Not due to his grave misconduct, notorious negligence, habitual intoxication, or willful
intention to kill himself or another (R.A. No. 8291, Sec. 15).

Note: If member does not satisfy the conditions above, but has rendered at least 3 years of
service at the time of disability, he is still entitled to cash payment equivalent his average
 32

Benefit Remarks/Other Conditions Required to Avail the Benefits

monthly compensation for each year of service but not less than P12,000 (R.A. No. 8291, Sec.
16 (b)).

Temporary 1. Not exceed 120 days in one calendar year;

Total Disability 2. Exhausted all his sick leave benefits;
Benefits 3. In service at the time of his disability;
4. If separated, rendered at least 3 years of service and paid 6 monthly contributions in the
12-month period immediately preceding the disability;
5. Cannot enjoy temporary total disability benefit and sick leave pay simultaneously;
6. If disability requires treatment that lasts beyond 120 days, the payment of the temporary
total disability benefit may not exceed 240 days;
7. Such benefit shall not be less than P70 a day (R. A. No. 8291, Sec. 18); and
8. Not due to his grave misconduct, notorious negligence, habitual intoxication, or willful
intention to kill himself or another (R.A. No. 8291, Sec. 15).
Survivorship 1. Deceased was in the service at the time of his death; or
Benefits 2. If separated from service, has at least 3 years of service at the time of his death and has
paid 36 monthly contributions within 5-year period immediately pre- ceding his death, or has
paid at least 180 monthly contribution prior to death (R.A. No. 8291, Sec. 21 (a)).
Funeral Covered deaths:
Benefits
1. Active member;
2. Member who has been separated from service;
3. Pensioner; and
4. Retiree, who at the time of his retirement was of pensionable age but opted to retire under
RA 16161 (RA 8291, Sec. 23).

(130) During his one-month leave, H, a policeman, was shot to death while trying to pacify two of his
neighbors who are fighting. W, her surviving spouse whom he had abandoned years back, filed a claim
for death benefits but was denied by the GSIS contending that H is not entitled to benefits since he
was on-leave when he died. Is the GSIS correct?
No, GSIS is incorrect. Under the 24-hour duty doctrine, members of the police by the nature of their functions
are technically 24 hours a day, except when they are on vacation leave. The exception is not applicable where
a policeman responds to a situation in which his services are necessary in maintaining peace and order. Here,
H’s act of responding to his neighbor’s situation may be considered an extension of a police’s function.
Therefore, H’s death is compensable (ECC v. CA, G.R. No. 115858, June 28, 1996).

(131) After 44 years, X retired as Chief State Prosecutor of DOJ in 1992. He applied for retirement benefit
under R.A. 910. The application was approved by GSIS. Thereafter, and for more than nine years, X
continuously received his retirement benefits, until 2001, when he failed to receive his monthly
pension. X learned that GSIS cancelled the payment of his pension because the DBM informed GSIS
that X was not qualified to retire under R.A. 910 which provides for the retirement of justices of the
Supreme Court and the Court of Appeals and its enforcement by the GSIS. Thus, GSIS stopped the
payment of X’s monthly pension. Does X’s disqualification under R.A. 910 preclude him from receiving
any retirement benefit under any other existing retirement law?
No, X’s disqualification from receiving retirement benefits under R.A. 910 does not preclude him from receiving
any retirement benefits under any other existing retirement law. Since X has been declared ineligible to retire
under R.A. 910, GSIS should simply apply the proper retirement law to X’s claim. In this way, GSIS would be
faithful to its mandate to administer retirement laws in the spirit in which they have been enacted, i.e., to provide
retirees the wherewithal to live a life of relative comfort and security after years of service to the government
(GSIS v. De Leon, G.R. No. 186560, November 17, 2010).

(132) Who are covered by the Limited Portability Law (RA 7699)?
The rules and regulations shall apply to all worker‐members of the Government Service Insurance System
(GSIS) and/or Social Security System (SSS) who transfer from one sector to another, and who wish to retain
their membership in both Systems (IRR of RA 7699, Rule 1, Sec. 1).

(133) When does totalization apply under Limited Portability Law? (BGS)
Totalization shall apply in the following instances:
1. If a worker is not qualified for any benefits from Both Systems;
 33

2. If a worker in the public sector is not qualified for any benefits in the GSIS; or
3. If a worker in the private sector is not qualified for any benefits from the SSS (IRR of RA 7699, Rule V,
Sec. 3, par. 1).

Note: If a worker qualifies for benefits in both Systems, totalization shall not apply. Further, overlapping periods
of creditable services or contributions in both Systems shall be credited only once for purposes of totalization.
For the purpose of computation of benefits, totalization shall apply in all cases so that the contributions made
by the worker-member in both Systems shall provide maximum benefits which otherwise will not be available.
In no case shall the contribution be lost or forfeited (IRR of RA 7699, Rule V, Sec. 3, par. 2, Secs. 5 and 7).

(134) X has been working with Lima Land for 20 years. Wanting to work in the public sector, X applied with
and was offered a job at Livecor. Before accepting the offer, he wanted to consult with you whether
the payments that he and Lima Land had made to the SSS can be transferred or credited to the GSIS.
What would you advise? (2014 Bar)
I will inform X that his contributions under SSS may be transferred or credited to GSIS for purposes of claiming
benefits. Under Section 3 of RA 7699 or the Limited Portability Law, a covered worker who transfers
employment from one sector to another shall have his contributions in both systems credited and shall be
totalized for the purpose of old-age, disability, survivorship, and other benefits in case he does not qualify for
such benefits. Here, X is planning to transfer employment from private to public sector. If upon his retirement
he did not qualify for the benefits, X can avail of the totalization under the limited portability law.

DISABILITY AND DEATH BENEFITS

(135) What are the disability benefits under the Labor Code? (TPP)
1. The following are the disability benefits under the Labor Code:
2. Temporary Total Disability (Art.197);
3. Permanent Total Disability (Art.198); and
4. Permanent Partial Disability (Art.199).

(136) What happens if the seafarer knowingly conceals a pre-existing illness or condition?
A seafarer who knowingly conceals a pre-existing illness or condition in the Pre-Employment Medical
Examination shall be liable for misrepresentation and shall be disqualified from any compensation or benefit.
This is likewise a just cause for termination of employment and imposition of proper administrative sanctions
(POEA Memorandum Circular No. 10, Series of 2010, Sec. 20, par. E).

(137) X was employed by ABC Company as a chief cook on board M/V DEF. X allegedly suffered fatigue,
shortness of breath, and severe headaches. He eventually signed off from the vessel and was
medically repatriated to the Philippines. He was immediately referred to company-designated
physicians at the Metropolitan Medical Center (MMC). After treatment, the attending cardiologist and
neurologist found San Juan fit for duty. Although he was issued a Certificate of Fitness for work, he
was not rehired by PTCI. San Juan sought a second medical opinion from Philippine Heart Center who
certified that San Juan was medically unfit to work in any capacity as a seaman. Is X entitled to
permanent total disability benefits?
No. Settled is the rule that when a seafarer sustains a work-related illness or injury while on board the vessel,
his fitness or unfitness for work shall be determined by the company-designated physician, and that in case of
conflicting medical assessments between the company-designated physician and the seafarer's own
physician, referral to a third doctor is mandatory; and that in the absence of a third doctor's opinion, it is the
medical assessment of the company-designated physician that should prevail (Philippine Transmarine
Carriers, Inc. v. Almario C. San Juan, G.R. No 207511; October 5, 2020, Hernando Case).

(138) Does the mere lapse of the 120-day period under Article 198(c)(1) of the Labor Code automatically give
rise to a cause of action for a claim of permanent total disability benefits?
No. Article 198(c)(1) provides that when a certain sickness or injury causes a temporary and total disability
which lasts continuously for more than 120 days, then such total disability is considered to be permanent.
However, as an exception, if the said sickness or injury that caused the temporary total disability requires
medical treatment beyond the 120-day period but not to exceed 240 days, then the employee is only entitled
to temporary total disability benefits until he is declared as either: 1) "fit to work," which stops his entitlement
to disability benefits; or 2) "permanently and totally disabled," which then entitles him to permanent total
disability benefits. If the 240 days had lapsed without any certification issued by the company-designated
doctor, then the employee may pursue an action for permanent total disability benefits (Ronnie L. Singson v.
 34

Arktis Maritime Corp./Filpride Shipping Co. Inc./Prosper Marine Private Ltd., G.R. No. 214542; January 13,
2021, Hernando Case).

(139) M Inc. hired V as chief cook. Before his deployment, V underwent a Pre-Employment Medical
Examination (PEME) wherein he was declared as fit for work. Upon expiration of his contract and arrival
in the Philippines, he did not report that he was experiencing any illness or injury. V underwent another
PEME as a prerequisite for another deployment where he disclosed for the first time that he has a
history of high blood pressure or hypertension and has been taking medication. He was declared "Unfit
for Sea Duty" Dr. S, his PEME doctor, opined that Ville's heart ailment would necessitate further
evaluation and treatment. V filed a complaint for payment of total and permanent disability benefits.
Thereafter, V underwent a Coronary Angiography which concluded that he has “3 Vessel Coronary
Artery Disease.” He likewise consulted Dr. T of the Philippine Heart Center who certified that V has
such disease. M Inc., argued that V has not presented substantial evidence showing that his condition
is work-related as the illness was acquired after the expiration of the term of his contract. And since
V’s hypertension is a pre-existing condition, it is not compensable. Is Coronary Artery Disease,
contracted after disembarkation, a compensable work-related illness?
No, Coronary Artery Disease, contracted after disembarkation, is not a compensable work-related illness. A
contract between an employer and a seafarer ceases upon its completion, when the seafarer signs off from
the vessel and arrives at the point of hire. Indeed, the employment of seafarers and its incidents are governed
by the contracts they sign every time they are hired or re-hired. These contracts have the force of law between
the parties as long as their stipulations are not contrary to law, morals, public order or public policy. Thus, upon
V’s signing off from the vessel and repatriation due to the completion of his contract, his employment
relationship with M Inc. correspondingly ceased. Consequently, no liability should attach for any illness or
incident that may have been acquired or transpired after signing off or expiration of contract (Gerardo U. Ville
v. Maersk-Filipinas Crewing, G.R. No. 217879; February 1, 2021, Hernando Case).

(140) Can land-based workers enjoy the permanent and total disability benefits for seafarers?
No. In order to be considered a seaman or seafarer, one would have to be, at the very least, employed in a
vessel engaged in maritime navigation. Thus, it is clear that those employed in non-mobile vessels or fixed
structures, even if the said vessels/structures are located offshore or in the middle of the sea, cannot be
considered as seafarers under the law (V People Manpower Phils. Inc, and/or CAPE PNL LTD. v. Dominador
C. Buquid, G.R. No. 222311; February 10, 2021, Hernando Case).

(141) What must be complied with to claim compensability?

In order to claim compensability, it is required that the seafarer must have:
1. suffered a work-related illness or injury during the term of his contract; and
2. submitted himself to a mandatory post-employment medical examination within 3 working days upon his
arrival (Reynaldo P. Cabatan v. Southeast Asia Shipping Corp., G.R. No. 219495; February 28, 2022,
Hernando Case).

(142) What is the effect if the illness is not provided for in the list of occupational diseases?
There is a disputable presumption that the illness is work-related if it is an unlisted occupational disease so
long as the conditions of compensability are met. Section 32-A provides for the conditions of compensability
for listed occupational diseases: (a) the seafarer's work must involve risks described therein; (b) the disease
was contracted as a result of the seafarer's exposure to the described risks; (c) the disease was contracted
within a period of exposure and under such other factors necessary to contract it; and, (d) there was no
notorious negligence on the part of the seafarer. The seafarer must prove by substantial evidence that "there
is a reasonable causal connection between his illness and the work for which he has been contracted." Case
law teaches that these conditions apply to those illnesses not listed as an occupational disease in the 2010
POEA-SEC (Edgardo M. Paglinawan v. Dohle Philman Agency Inc., G.R. No. 230735; April 4, 2022, Hernando
Case).

(143) Will an employee, in claiming that pancreatic cancer is a compensable disease due to "constant
exposure to hazards such as chemicals and the varying temperature, coupled by stressful tasks in his
employment" satisfy the requirements set by law?
No. Absent an enumeration of specific duties and how it contributed to his pancreatic cancer, general
averments will not suffice to establish, by substantial evidence, that his illness is or was work-related (Marlow
Navigation Phils. v. Heirs of Antionio Beato, G.R. No. 233897; March 9, 2022, Hernando Case).
 35

(144) Y was hired by SRL for A Company in UAE. After a medical examination, he was declared unfit for work
due to Uncontrolled Diabetes Mellitus Type II, which was reflected in a Medical Certificate dated May
10, 2011. SRL disclosed the finding to A Company which informed Y that he cannot be hired due to
medical reasons. Y filed a case for illegal dismissal claiming that it was not proven that he was
dismissed on a just or authorized cause, or under the employment contract. Was Y validly dismissed?
No. A did not present any certification from a competent public health authority citing that Y's disease cannot
be cured within six months, or that his employment is prejudicial to his health or that of his co-employees.
Absent this certification, A failed to comply with Article 299 of the Labor Code as well as Section 8, Title 1,
Book Six of the Omnibus Rules Implementing the Labor Code. In other words, Y’s dismissal was not based on
a just cause. As to procedural due process, A did not give Y any form of notice or opportunity to explain his
side. A unilaterally dismissed him by simply issuing a letter dated May 22, 2011. Thus, A violated the
requirements of procedural due process before terminating an employee from work (SRL International
Manpower Agency v. Yarza, Jr.,G.R. No. 207828, February 14, 2022, Hernando Case).

D. LABOR RELATIONS
(145) What is the employee’s right to self-organization?
All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical,
or educational institutions, whether operating for profit or not, shall have the right to self-organization and to
form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant,
intermittent and itinerant workers, self-employed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and protection (LABOR CODE, Art. 253).

(146) Who are eligible to join, form, or assist labor organizations or workers’ associations?
Those eligible to join, form, or assist a labor organization for purposes of collective bargaining are the following:
1. Private sector:
a. All persons employed in Commercial, industrial, and agricultural enterprises (LABOR CODE, Art. 253);
b. Employees of GOCCs without original charters established under the Corporation Code (LABOR
CODE, Art. 254);
c. Employees of Religious, charitable, medical or educational institutions, whether operating for profit or
not (LABOR CODE, Art. 253);
d. Supervisory employees (LABOR CODE, Art. 255);
e. Alien employees (ILO Convention No. 98, Art. 2);
f. Working Children (PD 603, Art. 111);
g. Homeworkers (DO 5-92);
h. Employees of Cooperatives (Central Negros Electric Corporation v. Secretary of Labor, G.R. No.
94045, September 13, 1991); and
i. Employees of Legitimate contractors (DO 174-17, Sec.10(e)); and

2. Public Sector – All rank-and-file employees of all branches, subdivisions, instrumentalities, and agencies
of government, including GOCCs with original charters, can form, join, or assist labor organizations called
employees’ organizations of their own choosing (EO 180, Secs. 1 and 2).

(147) Who are not eligible to join, form, or assist a labor organization? (MIA-CHANGES)
The following are those not eligible to join, form, or assist a labor organization of purposes of collective
bargaining:
1. Managerial employees;
2. Employees of International Organizations with Immunities (International Catholic Immigration Commission
v. Calleja, G.R. No. 85750, September 28, 1990);
3. Members of the Armed Forces of the Philippines, including police officers, policemen, firemen and jail
guards (EO 180 (1987), Sec. 4);
4. Confidential employees (Metrolab Industries v. Roldan-Confesor, G.R No. 108855, February 28, 1996);
5. High-level or managerial government employees (EO 180, Sec. 3);
6. Aliens without valid working permits or aliens with valid working permits but are nationals of a country
which do not allow Filipinos to exercise the right of self-organization and to join or assist labor organizations
(LABOR CODE, Art. 284);
7. Non-employees (Rosario Bros., Inc. v. Ople, G.R. No. L-53590, July 31, 1984);
8. Government employees, including GOCC with original charter (Arizala v. CA, G.R. Nos. 43633-34,
September 14, 1990);
9. Employees of cooperatives who are at the same time its members (Benguet Electric Cooperative Inc., v.
Ferrer-Calleja, G.R. No. 79025, December 29, 1989); and
10. Subversives or those directly or indirectly engaged in subversive activities (LABOR CODE, Art. 250(e)).
 36

(148) AA Faculty Union filed a petition for certification election seeking to represent a bargaining unit in AA
School consisting of 40 faculty members. AA School opposed the petition, claiming that AA Faculty
Union’s members are neither rank-and-file nor supervisory, but rather managerial employees. AA
School then filed a petition for cancellation of AA Faculty Union’s certificate of registration on the
grounds of misrepresentation in registration and that AA Faculty Union is composed of managerial
employees who are prohibited from organizing as a union. The Med-Arbiter issued an Order denying
the petition for certification election on the ground that AA School’s faculty members are managerial
employees. Was AA School correct in filing a petition for cancellation of AA Faculty Union’s certificate
of registration?
Yes, AA School is correct in filing a petition for cancellation of AA Faculty Union’s certificate of registration. In
case of alleged inclusion of disqualified employees in a union, the proper procedure for an employer like AA
School is to directly file a petition for cancellation of the union’s certificate of registration due to
misrepresentation, false statement, or fraud under the circumstances enumerated in Art. 247 of the Labor
Code, as amended. AA School’s sole ground for seeking cancellation of AA Faculty Union’s certificate of
registration that its members are in reality managerial employees which is in violation of Art. 255 of the Labor
Code, is, in a sense, an accusation that AA Faculty Union is guilty of misrepresentation for registering under
the claim that its members are not managerial employees. Therefore, AA School was correct in filing a petition
for the cancellation of the union’s registration (Asian Institute Management v AIM Faculty Association, G.R.
No. 207971, January 23, 2017).

(149) Union A filed a petition for certification election seeking to represent the bargaining unit consisting of
rank and file professional and technical employees including the sales logistics coordinator and
maintenance foreman, and financial analysts and quality assurance specialists of Company XYZ.
Company XYZ contends that the latter positions cannot be members of the bargaining unit of the rank
and file employees because they are supervisory employees and confidential employees respectively
who are exposed to the internal business operations of the company. Can the sales logistics
coordinator and maintenance foreman, and financial analysts and quality assurance specialists be
members of the bargaining unit of rank and file employees?
Yes, the sales logistics coordinator and maintenance foreman, and financial analysts and quality assurance
specialists can be members of the bargaining unit of rank and file employees. Exposure to internal business
operations of the company is not per se a ground for the exclusion in the bargaining unit. Employees who
encounter or handle trade secrets and financial information are not automatically classified as confidential
employees. The information they handle is not the kind of information that is relevant to collective bargaining
negotiations and settlement of grievances as would classify them as confidential employees. Even if they have
access to information which are confidential from the business standpoint, the exercise of their right to self-
organization could not be defeated because their common functions do not show that there exists a confidential
relationship within the realm of labor relations. Thus, the sales logistics coordinator and maintenance foreman,
and financial analysts and quality assurance specialists can be members of the bargaining unit of rank and file
employees (Coca-Cola Bottlers PHL v. Ilocos Professional & Technical Employees Union, G.R. No. 193798,
September 8, 2015).

(150) Union A filed a petition for certification election seeking to represent rank and file employees. ABC
Company filed a petition seeking to cancel the registration of Union A on the ground that it has
members who are foremen in the company. Will the union membership of the foremen warrant the
cancellation of registration of Union A?
No, the union membership of the foremen will not warrant the cancellation of registration of Union A. The
inclusion as union members of employees outside the bargaining unit shall not be a ground for cancellation of
the registration of the union. However, said employees are automatically deemed removed from the list of
membership of said union. Foremen are considered to be supervising and instructing the employees under
them, assessing and evaluating their performance, and making reports and recommending new systems in
the company. Since foremen are not rank and file employees but are rather considered extensions of the
management, they are deemed removed from the list of membership of Union A and the petition shall fail
(Lepanto Consolidated Mining Company v. The Lepanto Capataz Union, G.R. No. 157086, February 18, 2013,
Art. 256, Labor Code).

(151) What is the principle of non-interference with workers’ rights to self-organization?

The right of the people, including those employed in the public and private sectors, to form unions, associations,
or societies for purposes not contrary to law shall not be abridged (CONST. Art. III, Sec. 8).

(152) What are the requirements for the issuance of the Certificate of Registration of Labor Organizations?
(FNI-E4)
The requirements for the issuance of the Certificate of Registration of Labor Organizations are the following:
 37

1. Php50.00 registration Fee;

2. Names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings;
3. In case the applicant is an Independent union, the names of all its members compromising at least 20%
of all the employees in the bargaining unit where it seeks to operate;
4. If the applicant union has been in Existence for one (1) or more years, copies of its annual financial
reports; and
5. 4 copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and
a list of members who participated in it (LABOR CODE, Art. 240).

(153) What are the grounds for the cancellation of union registration? (CoDE)
The following are the grounds for the cancellation of union registration
1. Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
Constitution and by-laws or amendments thereto, the minutes of ratification and the list of members who
took part in the ratification;
2. Voluntary Dissolution by the members; and
3. Misrepresentation, false statements or fraud in connection with the Election of officers, minutes of the
election of officers, and the list of voters (LABOR CODE, Art. 247).

(154) What is the relationship between an affiliate or chartered local and the national union?
The relationship between an affiliate or chartered local and the national union is agency. The national union,
or “mother union”, acting for and in behalf of its affiliate, has the status of an agent while the affiliate or local
chapter remains the principal – the basic unit of the association free to serve the common interest of all its
members, subject only to the constraints imposed by the constitution and bylaws of the association
(Progressive Development Corporation v. Secretary of Labor and Employment, G.R. No. 96425, February 4,
1992).
BARGAINING UNIT, BARGAINING REPRESENTATIVE
(155) What are the methods to determine the bargaining representative? (SCC)
The methods to determine the bargaining representative are the following:
1. Request for SEBA Certification (DO 40-03, Rule VII);
2. Certification election (DO 40-03, Rule I, Sec. 1(h)); and
3. Consent election (DO 9, as amended by DO 40-03, Rule I).

Note: Run-off election (DO 40-03, Rule I, Sec. 1(ss)) and Re-run election (DO 40-I-15, Rule I, Sec. 1(tt)) may
occur during Certification or Consent election.

(156) What is SEBA Certification?

It is the process whereby the DOLE recognizes a labor organization as the Sole and Exclusive Bargaining
Agent (SEBA) of the employees in the appropriate bargaining unit. It has replaced Voluntary Recognition
wherein it is the employer who recognizes the labor organization as the SEBA of the employees (DO 40-I-15).

(157) What is certification election?

It refers to the process of determining through secret ballot the sole and exclusive representative of the
employees in an appropriate bargaining unit for purposes of collective bargaining or negotiation (DO 40-03,
Rule I, Sec. 1(h)). It is the most democratic method of determining the employee’s choice of the bargaining
representative whenever there is doubt whether a particular union represents the majority of the rank-and-file
employees (Philippine Airlines Employee’s Association v. Calleja, G.R. No. 76673, June 22, 1988).

(158) What is consent election?

An election voluntarily agreed upon by the parties with or without the intervention of the DOLE, to determine
the issue of majority representation of all the workers in the appropriate collective bargaining unit (DO 9, Rule
I as amended by DO 40- 03; Algire v. De Mesa, G.R. No. 97622, October 19, 1994).

(159) What are the different rules which prevent the holding of a certification election? (YCDN)
1. Certification Year Bar Rule - no petition for certification election may be filed within 1 year from the date
of a valid certification, consent, or run-off election or from the date of voluntary recognition. The same ban
applies if “no union” won in the previous election (2 AZUCENA, supra at 487).
2. Contract-Bar Rule - while a valid and registered CBA of a fixed duration is subsisting, the BLR is not
allowed to hold an election contesting the majority status of the incumbent union during its 5-year term of
 38

representation except during the 60-day period immediately prior to the expiration of the 5-year term. The
5 years shall be reckoned from the date of effectivity of the CBA (IRR of the LABOR CODE, Book V, Rule
XVII, Sec. 7, as amended by DO 40-03).
3. Deadlock Bar Rule - a petition for certification election can only be entertained if there is no pending
bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid notice of
strike or lockout. The principal purpose is to ensure stability in the relationship of the workers and the
management (NACUSIP-TUCP v. Dir. Trajano, G.R. No. 67485, April 10, 1992).
4. Negotiation Bar Rule - a petition for certification election cannot be entertained if, before the filing of the
petition for certification election, the duly recognized or certified union has commenced negotiations with
the employer in accordance with Art. 261 of the Labor Code within the 1 year period referred to in Sec.
14(d) of DO 40-03, Rule VIII (certification year rule) (2 AZUCENA, supra at 486- 489).

(160) When is there a failure of election?

There is failure of election where the number of votes cast in a certification or consent election is less than the
majority of the number of eligible votes and there are no material challenged votes, declared by the Election
Officer in the minutes of the election proceedings order (DO 40-03, Rule IX, Sec. 16).

Note: Failure of election shall not bar the filing of a Motion for the immediate of another certification or consent
election within 6 months from the date of declaration of failure of election (DO 40-03, Rule IX, Sec. 17).

(161) What is run-off election?

It refers to an election between the labor unions receiving the 2 highest number of votes in a certification or
consent election with 3 or more choices, where such a certified or consent results in none of the 3 choices
receiving the majority of the valid votes cast; provided that the total number of votes for all contending unions
is at least 50% of the number of votes cast (IRR of the LABOR CODE, Book V, Rule I, Sec. 1(ss), as amended
by DO 40-03).

(162) What is a re-run election?

It refers to an election conducted to break a tie between the contending unions, including between “No Union”
and one of the unions. It shall likewise refer to an election conducted after a failure of election has been
declared by the election officer and/or affirmed by the mediator-arbiter (DO 40-I-15, Rule I, Sec. 1(tt)).

(163) What is the employer as bystander rule?

In all cases, whether the petition for certification election is filed by an employer or a legitimate labor
organization, the employer shall not be considered a party thereto with a concomitant right to oppose a petition
for certification election. The employer’s participation in such proceedings shall be limited to:
1. Being notified or informed of petitions of such nature; and
2. Submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably
on the petition (LABOR CODE, Art. 271).

(164) On June 10, 2015, a petition for certification election was filed by Union A seeking to represent a
bargaining unit consisting of rank-and-file employees. It was granted on July 15, 2015. Previously, 20
employees were hired on April 15, 2017. During the election, these 20 employees were questioned on
the ground that they are not eligible voters. Union A contends that they are eligible voters because
they were already employees three months prior to the decision granting the petition. Decide.
The 20 employees are ineligible to vote during the certification election. Only employees who are members of
the appropriate bargaining unit sought to be represented 3 months prior to the filing of the petition shall be
eligible to vote. Since they have been employees only for a period of less than two months prior to the filing of
the petition, they are not qualified to vote (DO 40-I-15, Sec. 6).

(165) There are 600 eligible voters in the bargaining unit sought to be represented. A certification election
was conducted and yielded the following results:

Union Vote

Union A 140

Union B 105

Union C 120
 39

Union Vote

No union 75

Spoiled Ballots 30

Abstain 30

Total votes 500

What are the legal effects?

A valid certification election was conducted. The double majority rule was observed. To have a valid election,
at least a majority of ALL THE ELIGIBLE VOTERS (FIRST MAJORITY) in the unit must have cast their vote.
Since there are 600 eligible voters, majority of which (301) should have casted their vote. 500 employees
casted their vote; thus, the election is valid.
The labor union receiving the majority of the VALID VOTES CAST (SECOND MAJORITY) shall be certified as
the exclusive bargaining agent of all the workers in the unit. The total number of the valid votes cast is 470.
Spoiled ballots are not valid votes cast because they are torn, defaced or left unfilled in such a manner as to
create doubt or confusion or to identify the voter. Thus, the majority is 236.
There is no winner in the certification election. A run-off election between the labor unions receiving the 2
highest number of votes shall be conducted when an election which provides for three or more CHOICES
results in no choice receiving majority of the valid votes cast provided that the total number of votes for ALL
CONTENDING UNIONS is at least 50% of the TOTAL OF VOTES CAST. Since there are 4 choices and the
total number of votes of the contending unions exceeds 50% of the votes cast, a run-off election shall be
conducted.

(166) Unions A, B, and C agreed to hold an election without the DOLE intervention to determine the exclusive
bargaining agent. During the elections, Union A got majority of the valid votes cast; thus, it was
recognized as the bargaining agent. What is the effect of DOLE’s non-intervention in the election?
The consent election is valid; however, the results thereof shall not constitute a bar to the holding of a
certification election for 1 year from the holding of such consent election (IRR of LABOR CODE, Book V Rule
VIII, Sec. 24).
RIGHTS OF LABOR ORGANIZATION
(167) What is the duty to bargain collectively?
When there is no CBA, the duty to bargain collectively means the performance of a mutual obligation between
employer and the employees’ majority union to meet and convene for the purpose of:
1. Negotiating an agreement with respect to wages, hours of work and all other terms and conditions of
employment including proposals for adjusting any grievances or questions arising under such agreement;
and
2. Executing a contract incorporating such agreements if requested by either party (LABOR CODE, Art. 263).

When there is a CBA, it is the obligation of the parties not to terminate or modify the CBA during its lifetime.
However, either party can serve a written notice to terminate or modify the agreement at least 60 days prior to
its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement during the 60-day period and/or until a new
agreement is reached by the parties (LABOR CODE, Art. 264).

(168) BCD Union is a registered union which had a 5-year CBA with XYZ Corp. The 60-day freedom period of
the CBA passed without a challenge to BCD Union’s status as bargaining agent. Three of its members
wrote to the DOLE informing it that majority of its members intends to disaffiliate from their mother
federation to form another union. BCD Union questioned the disaffiliation. Pending the dispute, XYZ
Corp. stopped the remittance to BCD Union of the union dues that had been checked off from the
worker’s salaries and recognized the new union. Does the failure to remit union dues amount to ULP?
Yes, the failure to remit union dues amounted to ULP. Since no petition for certification election challenging
the majority status of BCD Union was filed during the freedom period, it remained the exclusive bargaining
agent of the employees and XYZ Corporation’s refusal to bargain collectively constitutes ULP. The failure to
remit union dues and the voluntary recognition of the new union were indications of interference with the
employee’s right to self-organization which constitutes ULP (Ren Transport Corp. v. NLRC, G.R. No. 188020,
June 27, 2016).
 40

(169) What is a Collective Bargaining Agreement (CBA)?

A CBA refers to the negotiated contract between a legitimate labor organization and the employer concerning
wages, hours of work, and all other terms and conditions of employment in a bargaining unit, including
mandatory provisions for grievances and arbitration machineries (Omnibus Rules Implementing the Labor
Code, Book V, Rule I, Sec. 1(jj)).

(170) What are the mandatory Provisions of the CBA?

The following are the mandatory provisions of the CBA:
1. Wages;
2. Hours of work;
3. Vacations and Holidays;
4. Bonuses;
5. Pensions and retirement plans;
6. Seniority;
7. Transfer;
8. Lay-offs;
9. Employee Workloads;
10. Work Rules and regulations;
11. Rent of company houses (2 AZUCENA, supra at 398-399);
12. Grievance machinery;
13. Voluntary Arbitration;
14. No Strike-no lockout clause;
15. Labor management Council (CHAN REVIEWER, supra at 471); and
16. Provision against Drug Use in Workplace (RA 9165, Sec. 49).

Note: Employer’s duty to bargain is limited to mandatory bargaining subjects; as to other matters, he is free to
bargain or not to bargain (2 AZUCENA, supra at 397).

(171) What is the procedure for the registration of CBA?

The steps to follow for the registration of CBA are the following:
1. Submission of copies of the CBA to the BLR or the regional offices of DOLE within 30 days from
execution, accompanied by the following:
2. Verified proof of posting in 2 conspicuous places in the place of work; and
3. Verified proof of ratification by the majority of all the workers in the bargaining unit;
4. Action upon the application for registration within 5 calendar days from receipt thereof;
5. The regional office shall furnish the BLR with a copy of the CBA within 5 days from its submission;
6. The BLR or regional office shall assess the employer for every CBA, a registration fee of not less than
₱1,000.00 or any amount deemed appropriate by the Secretary of Labor;
7. Issuance of Certificate of Registration (IRR of the LABOR CODE, Book V, Rule XVII, Sec. 1-4, as
amended by DO 40-03).

(172) What is the duration of a CBA?

Any CBA that the parties may enter into shall insofar as the representation aspect is concerned, be for a term
of 5 years. All other provisions of the CBA (economic and non-economic, except representation) shall be
renegotiated not later than 3 years after its execution (LABOR CODE, Art. 265).

(173) What is freedom period?

Freedom period is the 60-day period immediately prior to the expiration of the CBA (2 AZUCENA, supra at
479). A petition questioning the majority status of the incumbent bargaining agent or a petition for certification
election may be entertained and a certification election may be conducted within the freedom period (LABOR
CODE, Art. 265).

(174) Union A is the recognized bargaining agent of X Corporation. On April 15, 2010, they agreed upon a
CBA with a term of 5 years or until April 2015. On the third year of the agreement, the parties decided
to extend the CBA for two more years or until April 2017. On March 15, 2017, Union B filed a petition
for certification election. Should the petition be granted?
No, the petition should not be granted. Art. 265 provides that any CBA that the parties may enter into shall,
insofar as the representation aspect is concerned, be for a term of 5 years. No petition questioning the majority
status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted
by the DOLE outside of the 60-day period immediately before the date of expiry of such 5-year term of the
 41

CBA. Here, the freedom period was on the year 2015 because the representation aspect has a term of 5 years
regardless of the extension of the CBA itself. Since the petition was filed outside the freedom period, the same
must be denied.

(175) A, B, C, and 10 other rank and file employees of X Corp. were members of Y Union, the recognized
bargaining agent. X Corp. and Y Union had a CBA which would expire on June 22, 2017. The president
of Y Union advised X Corp. to terminate A, B, C, and the other 10 employees for acts of disloyalty
especially for signing a petition for certification election of Union B. It appears that the petition for
certification elections was filed on June 12, 2017. Y Union alleges that Article 264 of the Labor Code
applies which provides that it shall be the duty of both parties to keep the status quo and continue in
full force and effect the terms and conditions of the existing agreement during the 60-day period prior
to its expiration date and/or until a new agreement is reached by the parties. They claim that A, B, C,
and 10 other employees violated this provision when they campaigned for, supported, and signed
Union B’s petition for certification election. If you were the legal counsel of the said employees, how
would you counter the assertions of Y Union?
The employees cannot be dismissed. Under Art. 268 of the Labor Code, while it is incumbent for the employer
to continue to recognize the majority status of the incumbent bargaining agent even after the expiration of the
freedom period, they could only do so when no petition for certification election was filed. The provision for
status quo is conditioned on the fact that no certification election was filed during the freedom period. The
petition for certification election was filed on June 12, 2017. Therefore, under Art. 268, at the expiration of the
freedom period, X Corp. no longer has the obligation to recognize Y Union as the incumbent bargaining agent
when a petition for certification election was filed, as in this case. Moreover, the last sentence of Art. 264, which
provides for automatic renewal pertains only to the economic provisions of the CBA and does not include
representational aspect of the CBA. An existing CBA cannot constitute a bar to a filing of a petition for
certification election during the freedom period. When there is a representational issue, the status quo provision
insofar as the need to await the creation of a new agreement will not apply (Picop Resources v. Dequilla, G.R.
No. 172666, December 7, 2011).

(176) Union A has a 5-year CBA with X Corp. On the second year of the CBA, Union A submitted its proposal
to increase the salaries of the workers, but X Corp. did not reply. Is there a violation of the duty to
bargain collectively?
There is no violation of the duty to bargain collectively. Art. 265 provides that all other provisions of the CBA
shall be renegotiated not later than 3 years after its execution. The mandatory period of renegotiation has not
yet arrived. Therefore, X Corp.’s failure to reply does not constitution a violation of the duty to bargain
collectively.

(177) Will your answer be the same if X Corporation refused to reply on the proposal if the same was given
on the third year of the CBA?
No, the answer will not be the same if X Corporation refused to reply on the proposal when given on the third
year of the CBA. Since X Corp. refused to reply on the mandatory period of renegotiation, the same constitutes
a violation of the duty to bargain collectively which is a ground for ULP. The CBA proposed by the union may
be imposed lock, stock, and barrel on employer who refused to negotiate a CBA. The employer which violates
the duty to bargain collectively, loses its statutory right to negotiate or renegotiate the terms and conditions of
the draft CBA proposed by the union. Hence, the proposals of the union may be adopted as the CBA and
consequently, imposed on the employer, lock, stock, and barrel (Kiok Loy vs. NLRC, G.R. No. L- 54334,
January 22, 1986).

(178) What are the rights of labor organizations? (USER-FOE)

1. To Undertake activities for the benefit of the organization and its members;
2. To Sue and be sued;
3. To be the Exclusive representative of all employees;
4. To Represent union members;
5. To be Furnished by employers of audited financial statements;
6. To Own properties; and
7. Exemption from taxes (LABOR CODE, Art. 251).

(179) What are the rights of members in a labor organization? (DIMP)

1. Deliberative and decision-making right - the right to participate in the deliberations on major policy
questions and decide by secret ballot (LABOR CODE, Art. 250(d));
2. Right to Information - the right to be informed about:
 42

a. The organization’s constitution and by-laws; and

b. The collective bargaining agreement and labor laws (LABOR CODE, Art. 250(p));

3. Rights over Money Matters - the rights of the members:

a. Against imposition of arbitrary or excessive initiation fees (LABOR CODE, Art. 250(a));
b. Against unauthorized collection of contributions or unauthorized disbursements (LABOR CODE, Art.
250(g));
c. To require adequate records of income and expenses, which shall form part of the financial records
of the organization (LABOR CODE, Art. 250(j));
d. To access financial records (LABOR CODE, Art. 250(m));
e. To vote on officer’s compensation (LABOR CODE, Art. 250(k));
f. To vote on special assessment (LABOR CODE, Art. 250(n)); and
g. To be deducted a special assessment only with the member’s written authorization (LABOR CODE,
Art. 150(o)); and

4. Political Right – the right to vote and be voted for, subject to lawful provisions on qualifications and
disqualifications (LABOR CODE, Art. 250).

(180) What is a check-off?

A check-off is a method of deducting by the employer from the employee’s pay at prescribed periods the
amounts due to the union for fees, fines, or assessments (A. L. Ammen Transportation v. Bicol Transportation
Employees Mutual Association, G.R. No. L-4941, July 25, 1952). It assures continuous funding for the labor
organization (Gabriel v. Secretary of Labor, G.R. No. 115949, March 16, 2000).

(181) What are the requirements for levy of special assessments or extraordinary fees? (RAGS)
The following are the requirements for levy of special assessments or extraordinary fees:
1. There must be a written Resolution
2. The resolution must have been Approved by a majority of all the members;
3. The approval must be at a General membership meeting duly called for that purpose; and
4. The Secretary of the organization shall record the minutes of the meeting, which shall be attested to by
the President. The minutes include:
a. The list of all members present;
b. The vote cast; and
c. The purpose of the assessment or fees (LABOR CODE, Art. 250(n)).

(182) What are union dues?

Union dues are the regular monthly contributions paid by the members to the union in exchange for the benefits
given to them by the CBA and to finance the activities of the union in representing them (2 AZUCENA, supra
at 237).

(183) What are agency fees?

Agency fees are those reasonable fees assessed to employees of an appropriate bargaining unit who are not
members of the recognized collective bargaining agent, if such non-union members accept the benefits under
the collective bargaining agreement (LABOR CODE, Art. 259(e)).

(184) What is a Union Security Clause?

It is a stipulation in the CBA requiring membership in the contracting union as a condition for employment or
retention of employment in the company (2 AZUCENA, supra at 345).

(185) What are the different kinds of union security arrangements? (CUP-A-BEM2)
1. Closed-Shop Agreement – an agreement whereby an employer binds himself to hire only members of
the contracting union, who must continue to remain members in good standing to keep their jobs (2
AZUCENA, supra at 347);
2. Union Shop Agreement – provides that non-members may be hired but to retain employment, they must
become union members after a certain period. The requirement applies to present and future employees
(2 AZUCENA, supra at 346);
3. Preferential Shop Agreement – an agreement whereby the employer merely agrees to give preference
to the members of the bargaining union in hiring, promotion or filing vacancies and retention in case of lay-
 43

off. The employer has the right to hire from the open market if union members are not available
(ALCANTARA, Reviewer in Labor and Social Legislation, (2012), p. 472 [hereinafter ALCANTARA]);
4. Agency Shop Agreement or Maintenance of Treasury Shop – an agreement whereby employees must
either join the union or pay to the union as exclusive bargaining agent a sum equal to that paid by the
members (2 AZUCENA, supra at 346);
5. Bargaining for Members Only – provides that the union is recognized as the bargaining agent only for
its own members (2 AZUCENA, supra at 346);
6. Exclusive Bargaining Shop – provides that the union is recognized as the exclusive bargaining agent for
all employees in the bargaining unit, whether union members or not (2 AZUCENA, supra at 346);
7. Maintenance of Membership Shop Agreement – provides that no employee is compelled to join the
union, but all present or future members must, as a condition of employment remain in good standing in
the union (2 AZUCENA, supra at 346);
8. Modified Union Shop – provides that the employees who are not union members at the time of signing
the contract need not join the union, but all the workers hired thereafter must join (2 AZUCENA, supra at
346)

UNFAIR LABOR PRACTICES

(186) What is unfair labor practice (ULP)?
Unfair labor practice (ULP) refers to acts that violate workers’ right to organize. The prohibited acts are related
to workers’ right to self-organization and to the observance of a CBA (Tunay na Pagkakaisa ng Manggagawa
sa Asia Brewery v. Asia Brewery, Inc., G.R. No. 162025, August 3, 2010).

(187) What is the nature of ULP? (I2C3U)

The nature of ULP are as follows:
1. Are Inimical to the legitimate interests of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect;
2. Disrupt Industrial peace;
3. Criminal offenses against the State;
4. Violation of Civil rights of both labor and management;
5. Violate the Constitutional right of workers and employees to self-organization; and
6. Creates Unstable labor-management relations (LABOR CODE, Art. 258).

(188) What are the acts considered as ULP by employers? (RAF-C3-D3)

Under Article 259 of the Labor Code, the unfair labor practices of employers are the following:
1. To interfere with, restrain or coerce employees in the exercise of their Right to self-organization;
2. To pay negotiation or Attorney’s fees to the union or its officers or agents as part of the settlement of any
issue in collective bargaining or any other dispute;
3. To initiate, dominate, assist or otherwise interfere with the Formation or administration of any labor
organization, including the giving of financial or other support to it or its organizers or supporters;
4. To require as a Condition of employment that a person or an employee shall not join a labor organization
or shall withdraw from one to which he belongs (Yellow-Dog Contract);
5. To Contract out services or functions being performed by union members when such will interfere with,
restrain or coerce employees in the exercise of their rights to self-organization;
6. To grossly violate a Collective bargaining agreement;
7. To Discriminate in regard to wages, hours of work and other terms and conditions of employment in order
to encourage or discourage membership in any labor organization. Nothing in this Code or in any other
law shall stop the parties from requiring membership in a recognized collective bargaining agent as a
condition for employment, except those employees who are already members of another union at the time
of the signing of the collective bargaining agreement. Employees of an appropriate bargaining unit who
are not members of the recognized collective bargaining agent may be assessed a reasonable fee
equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if
such non-union members accept the benefits under the collective bargaining agreement: Provided, that
the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the
non-members of the recognized collective bargaining agent;
8. To Dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or
being about to give testimony under this Code; or
9. To violate the Duty to bargain collectively as prescribed by the Labor Code (LABOR CODE, Art. 259).

(189) What are the ULPs of labor organizations? (GRADE-V)

Under Art. 260 of the Labor Code, the unfair labor practices of labor organizations are the following:
 44

1. To (Grossly) violate a collective bargaining agreement;

2. To Restrain or coerce employees in the exercise of their right to self-organization. However, a labor
organization shall have the right to prescribe its own rules with respect to the acquisition or retention of
membership;
3. To Ask for or accept negotiation or attorney’s fees from employers as part of the settlement of any issue
in collective bargaining or any other dispute;
4. To cause or attempt to cause an employer to Discriminate against an employee, including discrimination
against an employee with respect to whom membership in such organization has been denied or to
terminate an employee on any ground other than the usual terms and conditions under which membership
or continuation of membership is made available to other members;
5. To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other
things of value, in the nature of an Exaction, for services which are not performed or not to be performed,
including the demand for fee for union negotiations; or
6. To Violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of
the employees (LABOR CODE, Art. 260).

(190) Union A informed X, its member, that the union was not able to fully deduct the union dues from his
salary and that his failure to pay the same would result to sanctions upon him. For failure to pay union
dues, X was suspended. X appealed but it was not acted upon. For 2 more occasions, X failed to pay
union dues causing his further suspension and finally, his expulsion. His appeals were unheeded
prompting him to file a complaint against Union A for ULP. Is the suspension an act of ULP?
Yes, the suspension is an act of ULP. All the prohibited acts constituting ULP in essence relate to the worker’s
right to self-organization. Because Union A did not act on X’s appeals, X was unceremoniously suspended,
disqualified and deprived of his right to run for a position in the union, as well as expelled and forced to join
another union, For these, Union A is guilty of unfair labor practices under Article 260 (a) and (b) – that is,
violation of petitioner’s right to self-organization, unlawful discrimination, and illegal termination of his union
membership (Mendoza v. MWEU, G.R. No. 201595, January 25, 2016).

(191) SUE-KMU is the sole and exclusive bargaining agent of the rank-and-file employees of respondent
Milkyway Corp. As the existing CBA between Milkyway Corp. and SUE-KMU was about to end, the
President of SUE-KMU informed Milkyway Corp. of their intent to open new negotiation for the year
2015-2018. In response thereto, Milkyway Corp., through a letter, stated that “unilateral grants are by
their very nature not proper subjects of CBA negotiations and therefore shall be excluded therefrom.”
SUE-KMU contends that Milkyway Corp. is guilty of unfair labor practice due its refusal to bargain on
an economic provision, and that Milkyway Corp. set as a precondition for the holding of collective
bargaining negotiations the non-inclusion of the issue of Retirement Plan. Did Milkyway Corp. commit
unfair labor practice when it considered some economic benefits as unilateral grants and therefore
excluded them from CBA negotiations?
No, Milkyway Corp. is not guilty of unfair labor practice. For a charge of unfair labor practice to prosper, it must
be shown that Milkyway Corp. was motivated by ill will, bad faith, or fraud, or was oppressive to labor, or done
in a manner contrary to morals, good customs, or public policy, and that social humiliation, wounded feelings,
or grave anxiety resulted in disclaiming unilateral grants as proper subjects in their collective bargaining
negotiations. While the law makes it an obligation for the employer and the employees to bargain collectively
with each other, such compulsion does not include the commitment to precipitately accept or agree to the
proposals of the other. Herein, the union merely bases its claim of refusal to bargain on a letter written by
Milkyway Corp. However, in the said letter, Milkyway Corp. never refused to bargain collectively with SUE-
KMU. The corporation simply wanted to exclude the Retirement Plan from the issues to be taken up during
CBA negotiations, on the postulation that such was in the nature of a unilaterally granted benefit (Union of
Filipro Employees-DFA-KMU v. Nestlé Philippines, Inc., G.R. Nos. 158930-31 & 158944-45, March 3, 2008).

(192) SBC Bank and SBC-Employees Union signed a five-year collective bargaining agreement (CBA) with a
provision to renegotiate the terms thereof on the third year. Before the commencement of the
negotiation, the union suggested to the bank, that the bank lawyers should be excluded from the
negotiating team. The bank acceded. Meanwhile, the bank’s head negotiator suggested to the union,
that the President of the federation to which the union was affiliated, be excluded from the union’s
negotiating panel. The union and the bank failed to agree on the remaining economic provisions of the
CBA. The union declared a deadlock and filed a Notice of Strike before the National Conciliation and
Mediation Board (NCMB). The union alleged that the bank committed unfair labor practice when it
interfered with the union’s choice of negotiator. Is the interference in the choice of the union’s
bargaining panel by the bank, tantamount to unfair labor practice?
No, the interference in the choice of the union’s bargaining panel by the bank is not tantamount to unfair labor
practice. Article 259(a) of the Labor Code, considers it an unfair labor practice when an employer interferes,
restrains or coerces employees in the exercise of their right to self-organization or the right to form association.
 45

The right to self-organization necessarily includes the right to collective bargaining. Parenthetically, if an
employer interferes in the selection of its negotiators or coerces the union to exclude from its panel of
negotiators a representative of the union, and if it can be inferred that the employer adopted the said act to
yield adverse effects on the exercise to right to self-organization or on the right to collective bargaining, ULP
under Article 259(a) in connection with Article 253 of the Labor Code is committed. However, the suggestion
made by the bank’s head negotiator should be construed as part of the normal relations and innocent
communications, which are all part of the friendly relations between the union and bank (Standard Chartered
Bank Employees Union v. Confesor, G.R. No. 114974, June 16, 2004).

(193) On 2002, Union A, then the exclusive bargaining representative of UR Co.’s rank-and-file employees,
entered into a CBA effective until December 31, 2006. Days after the CBA was signed, a certification
election was conducted. Union B won and replaced Union A as the exclusive bargaining representative.
UR Co. consistently refused to negotiate a new collective bargaining agreement with Union B, despite
several demands from union, allegedly due to the existing CBA, which it signed with Union A. Did UR
Co. commit unfair labor practice?
Yes, UR Co. is guilty of unfair labor practice. Under Article 259(g) of the Labor Code, an employer is guilty of
unfair labor practice when it fails in its duty to bargain in good faith. An employer who refuses to bargain with
the union and tries to restrict its bargaining power is guilty of unfair labor practice. In determining whether an
employer has not bargained in good faith, the totality of all the acts of the employer at the time of negotiations
must be taken into account. The 2002 CBA was done only days before the certification election. When Union
A and UR Co. entered into the CBA, they had been aware that a certification election was going to be conducted
in a few days. In pushing through with negotiations instead of waiting for the outcome of the election, UR Co.
risked needing to renegotiate with a new union if Union A loses. It cannot, thus, invoke the hastily concluded
CBA as an excuse not to bargain with petitioners. If respondent had truly intended to bargain in good faith, it
could have easily waited a few more days to know the result of the certification election (SONEDCO Workers
Free Labor Union v. Universal Robina Corp., G.R. No. 220383, October 5, 2016).

(194) Tipsy Beer suffered an economic crisis. To curve this, it implemented an early retirement program. A
number of employees of the Paranaque Tipsy Beer Plant availed of such program which resulted in
several vacancies being created. This prompted the Paranaque Tipsy Beer Worker’s Union to negotiate
with the company for the filling up of vacancies. No resolution was reached on the matter. Paranaque
Tipsy Beer thereafter, engaged the services of JLN Co. to provide manpower services. The Union filed
a Notice of Strike based on the ground of ULP for contracting out services regularly performed by
members. Was the ground valid?
No, the ground for the notice of strike is not valid. JLN Co. was engaged by Paranaque Tipsy Beer to meet
business exigencies created by the economic crisis which resulted in several vacancies being created. The
company’s action to contract-out services and functions performed by the Union members did not constitute
unfair labor practice as this was not directed at the member’s right to self-organization. Hence, there was no
ULP and the ground cited by the Union is invalid (General Santos Coca-Cola Plant Free Worker’s Union v.
Coca-Cola Bottlers PHL Inc., G.R. No. 178647, February 13, 2009).

PEACEFUL CONCERTED ACTIVITIES

(195) What is a strike?
It is the temporary stoppage of work by the concerted action of the employees as a result of a labor or industrial
dispute (IRR of LABOR CODE Book V, Rule I, Sec. 1(vv)).

(196) What are the grounds for strike? (DU)

The grounds for strikes may be any of the following:
1. A collective bargaining Deadlock; or
2. A ULP act of the employer or the labor organization (LABOR CODE, Art. 278).

(197) What are the mandatory procedural requirements for a strike? (GF-SARC-7)
1. A strike must be based on a valid and factual Ground; a strike or lockout must be based on either:
a. Collective Bargaining Deadlock (economic); or
b. Unfair Labor Practice (political)
2. A notice of strike or lockout must by Filed with NCMB-DOLE:
a. At least 30 days from the intended date thereof, if the issues involved arose from a collective bargaining
deadlock; or
 46

b. At least 15 days from the intended date, if the issues raised are in the nature of unfair labor practices;
or
c. Immediately, in case of dismissal from employment of their officers duly elected in accordance with the
union’s constitution and by-laws, which may constitute union busting, where the existence of the union
is threatened.
3. A notice must be Served to the NCMB-DOLE at least 24 hours prior to the taking of strike or lockout vote
by secret balloting, informing said office of the decision to conduct a strike or lockout vote, and the date,
place and time thereof (IRR of the LABOR CODE, Book V, Rule XXII, Sec. 10, as amended by DO 40-
03);
4. The decision to strike must be Approved by a majority of the total union membership in the bargaining unit
concerned obtained by secret ballot; and the decision to declare a lockout must be approved by a majority
of the board of directors of the employer corporation or association or of the partners in a partnership
obtained by secret ballot in a meeting called for the purpose. A report of the strike or lockout vote must be
filed with the NCMB at least 7 days before the intended strike or lockout;

5. A strike or lockout vote Report should be submitted to the NCMB-DOLE at least seven (7) days before the
intended date of strike or lockout; subject to the cooling-off period;
6. Except in cases of union busting, the Cooling off period prescribed by law should be fully observed; and
7. The 7 day waiting period or strike ban after submission of strike or lockout vote to the NCMB- DOLE should
be fully observed in ALL cases, including union busting (NCMB Primer on Strike, Picketing, and Lockout).

(198) What are the prohibited activities during strike? (FAOB-PuV)

The following are the prohibited acts during strike:
1. No labor organization or employer shall declare a strike or lockout without first having bargained
collectively or without First having filed the notice required or without the necessary strike or lockout vote
first having been obtained and reported to the DOLE (LABOR CODE, Art. 279(a));
2. No strike or lockout shall be declared after Assumption of jurisdiction by the President or the Secretary of
Labor or after certification or submission of the dispute to compulsory or voluntary arbitration or during the
pendency of cases involving the same grounds for the strike or lockout (LABOR CODE, Art. 279(a));
3. No person shall Obstruct, impede, or interfere with, by force, violence, coercion, threats or intimidation,
any peaceful picketing by employees during any labor controversy or in the exercise of the right to self-
organization or collective bargaining, or shall aid or abet such obstruction or interference (LABOR CODE,
Art. 279(b));
4. No employer shall use or employ any strike- Breaker, nor shall any person be employed as a strike-breaker
(LABOR CODE, Art. 279(c));
5. No Public official or employee, including officers and personnel of the New Armed Forces of the Philippines
or the Integrated National Police (now the Philippine National Police), or armed person, shall bring in,
introduce or escort in any manner, any individual who seeks to replace strikers in entering or leaving the
premises of a strike area, or work in place of the strikers. The police force shall keep out of the picket lines
unless actual violence or other criminal acts occur therein: Provided, that nothing herein shall be
interpreted to prevent any public officers from taking any measure necessary to:
a. Maintain peace and order;
b. Protect life and property; and/or
c. Enforce the law and legal order (LABOR CODE, Art. 279(d));
6. No person engaged in picketing shall commit any act of Violence, coercion or intimidation or obstruct the
free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public
thoroughfares (LABOR CODE, Art. 279(e)).

(199) What is the liability of union officers and members for illegal strike and illegal acts committed during
strike?
A strike staged without compliance with the requirements of Art. 278 of the Labor Code is illegal and may
cause the termination of the employment of the participating union officers and members. However, the liability
for the illegal strike is individual, not collective. To warrant the termination of an officer of the labor organization
on that basis, the employer must show that the officer knowingly participated in the illegal strike. An ordinary
striking employee cannot be terminated based solely on his participation in the illegal strike, for the employer
must further show that the employee committed illegal acts during the strike (The Hong Kong and Shanghai
Banking Corp. Employees Union v. NLRC, G.R. No. 156635, January 11, 2016).

(200) B Company alleges that around 50 union members staged an illegal “sit-down strike” (first strike) in B
restaurant. The union did not comply with the requirements of sending Notice of Strike to the NCMB,
and neither did it obtain “strike vote” from its members. Allegedly, the union belatedly filed a Notice of
Strike with the NCMB on the same day to conceal the illegality of the sit-down strike. When mediation
 47

reached an impasse, the union conducted the second strike. B alleges that during the second strike,
the union members were disruptive and violent. Were the two strikes invalid for non-compliance with
the procedural requirements of a valid strike and for committing prohibited acts?
Yes, the two strikes were invalid. The first strike was invalid as the union did not file the requisite Notice of
Strike and failed to observe the cooling-off period. In an effort to legitimize the first strike, the union filed a
Notice of Strike on the same day, but this cannot be considered as compliance with the requirement, as the
cooling-off period is mandatory. The cooling-off period is not merely a period during which the union and the
employer must simply wait. The purpose of the cooling-off period is to allow the parties to negotiate and seek
a peaceful settlement of their dispute to prevent the actual conduct of the strike. On the other hand, the second
strike was invalid. While the second strike complied with the mandatory requirements, it is nevertheless illegal
as it was tainted with the acts of violence, aggression, vandalism, and blockage of the free passage of the
employer’s premises (Bigg’s Inc. v Boncacas, G.R. Nos. 200487 & 200636, March 6, 2019).

(201) X Union was the recognized bargaining agent of rank-and-file employees of A Corp. The latter
announced the implementation of a job evaluation program. X Union demanded the suspension of the
said program contending that it constitutes ULP. It also informed A Corp. that it will exercise its right
to concerted action. X Union members picketed during their break time. The union members also
conducted a strike by blocking the entry and exit points of the company premises preventing other
employees from entering and leaving the same. A Corp. filed a complaint questioning the validity of
the strike. It issues a return-to-work order to the striking employees but only 10 complied prompting
the corporation to dismiss the employees who continued the concerted action. Is the strike illegal?
Yes, the strike is illegal. The strike staged by the union did not comply with Art. 278. They did not (a) file a
notice of strike with the DOLE, (b) observe the cooling-off period, and (c) submit the result of the strike vote.
Moreover, they obstructed the ingress to and egress from its offices. Thus, the strike commenced by the union
is illegally conducted (LABOR CODE, Art. 278).

(202) Assuming that the strike is illegal, was the dismissal of everyone who participated therein justified?
No, the dismissal of those who participated is not justified. There is a need to distinguish between the officers
and the members of the union who participated in an illegal strike. The officers may be deemed dismissed from
their employment upon a finding that they have knowingly participated in the illegal strike, but the members of
the union shall suffer the same fate only if they are shown to have knowingly participated in the commission of
illegal acts during the strike. Since it was not proven that all those who were dismissed committed illegal acts
during the strike, the termination of their employment was unjustified and illegal (HSBC Employees Union v.
NLRC, G. R. No. 156635, January 11, 2016).

(203) Union A and X Corp. entered into a CBA with a “no strike, no lockout” rule. When they started
renegotiations of the CBA, they were not able to arrive at an agreement thus resulting into a bargaining
deadlock. This prompted Union A to file a notice of strike and to undergo all the procedures for
conducting a valid strike. X Corp. questioned the strike on the ground that it violated the “no strike, no
lockout” rule. Is the strike valid?
No, the strike is not valid. A strike may be regarded as invalid although the labor union complied with the strict
requirements for staging one as provided in Art. 278 when the same is held contrary to an existing agreement,
such as the no strike clause or conclusive arbitration clause. No law or public policy prohibits the Union and
the Company form mutually waiving the strike and lockout option available to them to give way to voluntary
arbitration. Since the strike was committed in violation of the no strike, no lockout rule, the same is illegal (C.
Alcantara & Sons, Inc. v. CA, G.R. No. 155109, March 14, 2012).

(204) X Union filed a notice of strike against A Corp. for illegal dismissal and suspension. Subsequently, A
Corp. informed the SOLE of its plan to retrench 171 employees. On account of this action of A Corp, X
union immediately filed a notice of strike and subsequently conducted a strike with all the requirements
provided by law on the ground that they believed in good faith that their employer was performing acts
which constitutes unfair labor practice. A Corp. filed an action questioning the validity of the strike. It
was later found that no ULP was being committed rendering the strike illegal for not having a valid
cause. Are the union officers considered dismissed?
No, the union officers are not considered dismissed. Good faith is a valid defense for staging a strike on the
basis of a ULP of an employer, even if it subsequently turns out that there was no ULP. In this case, A Corp.
enforced its retrenchment program at a time when there was an ongoing dispute between it and the union
regarding the dismissal and suspension of employees. This engendered an honest belief on the part of the
union that A Corp. was indeed committing ULP which impelled them to stage a strike to protect their basic
 48

rights. Their strike was justified by belief in good faith that the employer was committing ULP. Good faith saves
the strike from being declared illegal and the strikers from being declared to have lost their employment status.

Note: A union’s claim of good faith, while a valid defense for the conduct of a strike on the ground of a ULP by
the employer, is not a valid excuse to dispense with the procedural steps for a lawful strike. People’s Industrial
and Commercial Employees & Workers Organization v. PICC did not rule that procedural requirements can be
dispensed with, even if the Union believed in good faith that ULP was being committed. The good faith defense
invoked in Philippine Metal Foundries v. CIR had been decided in 1979. With the enactment of RA 6715,
compliance with the procedural requirements for the validity of a strike is now mandatory (Grand Boulevard
Hotel v. Genuine Labor Organizations in Hotel Restaurant & Allied Industries, G.R. No. 153664, July 18, 2003).

(205) A “Welga ng Bayan” was staged to protest the accelerating price of rice. Union A led by its officers
staged a work stoppage which lasted for several days which prompted the company they are working
for to file a petition to declare the stoppage illegal. Was the stoppage of work illegal?
Yes, the stoppage of work is illegal. Stoppage of work due to welga ng bayan is in the nature of a general
strike, an extended sympathy strike. It affects numerous employers including those who do not have a dispute
with their employees regarding their terms and conditions of employment. Employees who have no labor
dispute with their employer but who, on a day they are scheduled to work, refuse to work and instead join a
welga ng bayan commit an illegal work stoppage. Even if petitioners’ joining the welga ng bayan were
considered merely as an exercise of their freedom of expression, freedom of assembly or freedom to petition
the government for redress of grievances, the exercise of such rights is not absolute. For the protection of
other significant state interests such as the “right of enterprises to reasonable returns on investments, and to
expansion and growth” must also be considered, otherwise, oppression or self-destruction of capital in order
to promote the interests of labor would be sanctioned (PHL, Inc. Labor Union (NAFLU) v. FILFLEX Industrial
& Manufacturing Corp, G.R. No. 155679, December 19, 2006).

(206) What is picketing?

It is a device used by the union to bolster their strike. It refers to outside patrolling or marching to and fro of the
strikers at the company’s premises usually accompanied by the display of placards and other signs making
known the facts involved in a labor dispute (IBM v. NLRC, G.R. No. 91980, June 27, 1991).

(207) Malou Wang Garments Inc. temporarily stopped its operations because of adverse effects of the economic
crisis in the country. The union in the factory immediately protested the temporary shutdown. Because its CBA
with Malou Wang was expiring during the period of shutdown, the union claimed the Malou Wang halted its
operations to avoid its duty to bargain collectively. The union went on strike and picketed the main gates and
deliberately prevented persons and vehicles from going into and out of the compound of Malou Wang
Garments. The latter filed a petition for injunction with a prayer for TRO in the NLRC. The NLRC directed the
union to refrain from preventing access to Malou Wang’s property. The union violated such order. The officers
and members were then dismissed. Upon complaint of the union, the LA found Malou Wang guilty of illegal
dismissal because it did not file a petition to declare the strike illegal. Was the Labor Arbiter correct?
No, the Labor Arbiter is not correct. Article 279(e) of the Labor Code prohibits any person engaged in picketing
from obstructing the free ingress to and egress from the employer’s premises. The principle of conclusiveness
of judgment, embodied in Section 47 (c), Rule 39 of the Rules of Court, 24 holds that the parties to a case are
bound by the findings in a previous judgment with respect to matters actually raised and adjudged therein.
Since the union was already found by the NLRC to have prevented the free entry into and exit of vehicles from
Malou Wang’s compound, the union’s officers and employees clearly committed illegal acts in the course of
the strike. The use of unlawful means in the course of a strike renders such strike illegal. Therefore, the strike
was ipso facto illegal. The filing of a petition to declare the strike illegal was thus unnecessary. Hence, the LA
was wrong in finding that it was necessary for Malou Wang Garments to first file a petition to declare the strike
illegal before terminating the union’s officers and members (Jackbilt Industries Inc. v. Jackbilt Employees
Workers Union, G.R. Nos. 171618-19, March 20, 2009).

(208) What is a lockout?

Lockout means the temporary refusal of an employer to furnish work as a result of and industrial or labor
dispute (LABOR CODE, Art. 212(p), as amended by RA 6715, Sec. 4). It is a term commonly used to express
an employer’s act of excluding from his plant union members hitherto employed by him. The act may affect all
or less than all of the employee-union members. In the sense in which it is universally used, is an act directed
at the union itself rather than at the individual employer-members of the union (Sta. Mesa Slipways &
Engineering Company, Inc., v. CIR, G.R. No. L-4521, August 18, 1952).

(209) What are the grounds for lockouts? (DU)

 49

The following are the grounds for lockouts:

1. A collective bargaining Deadlock (LABOR CODE, Art. 278 (b)); and
2. A ULP of the labor organization (LABOR CODE, Art. 278 (c)).

(210) What are the procedural and substantive requirements of a lockout? (GN2AR)
For a lockout be considered valid, the following must be complied with:
1. A lockout must be based on a valid and factual Ground, based on either:
a. ULP of the labor organization or
b. Collective Bargaining Deadlock;

2. Lockout Notice filed with NCMB:

a. At least 15 days before intended day of the strike if the issues raised are ULPs; or
b. At least 30 days before the intended date if the issue involves bargaining deadlock;

3. A lockout must be Approved by a majority vote of the members of the Board of Directors of the Corporation
or Association or of the partners in a partnership, obtained by secret ballot in a meeting called for that
purpose;
4. The lockout vote shall be Reported to the NCMB-DOLE Regional Branch at least 7 days before the
intended strike subject to cooling-off period; and
5. The dispute must Not be the subject of an assumption of jurisdiction by the President or the Secretary of
Labor and Employment, a certification for compulsory arbitration, or submission to compulsory or voluntary
arbitration nor a subject of a pending case involving the same grounds for the strike or lockout (NCMB
Primer on Strikes, Picketing and Lockouts, Part II, Question 6, A.5).

(211) What is the power of the Secretary of Labor to assume jurisdiction in cases of strikes and lockouts?
When in the opinion of the DOLE Secretary, the labor dispute causes or will likely to cause a strike or lockout
in an industry indispensable to the national interest, he is empowered to either:
1. Assume jurisdiction over the labor dispute and decide it himself; or
2. Certify it to NLRC for compulsory arbitration, in which case, the NLRC shall hear and decide it (LABOR
CODE, Art. 278(g)).

(212) TT, a public transportation company, retrenched 21 of its employees due to serious losses.
Consequently, the company union, ABC Union filed a Notice of Strike with DOLE, claiming that TT
engaged in ULP. Unable to settle their differences at the scheduled preliminary conference held before
Conciliator–Mediator of the NCMB, the case was thereafter referred to the Office of the Secretary of the
DOLE. Acting DOLE Secretary issued a Decision ordering the reinstatement of the union officers to
their former positions, without loss of seniority rights, preservation of the status quo, continuous
implementation of the existing CBA, and remittance of the withheld union dues to ABC union without
unnecessary delay. TT filed a Motion for Reconsideration, while ABC union submitted a “Partial
Appeal.” The Secretary of Labor declined to rule on TTs Motion for Reconsideration and TTs “Partial
Appeal”, citing a DOLE regulation which provided that voluntary arbitrators’ decisions, orders,
resolutions or awards shall not be the subject of motions for reconsideration. Decide on the case.
The Secretary of Labor and Employment (SOLE) may assume jurisdiction in an impending strike concerning
a public transportation company. By referring the case to the SOLE, the Conciliator–Mediator conceded that
the case fell within the coverage of Art. 278 of the Labor Code; the impending strike in TT, a public
transportation company whose business is imbued with public interest, required that the SOLE assume
jurisdiction over the case, which he in fact did. When the Secretary of Labor assumes jurisdiction over a labor
case in an industry indispensable to national interest, “he exercises great breadth of discretion” in finding a
solution to the parties’ dispute. “The authority of the SOLE to assume jurisdiction over a labor dispute causing
or likely to cause a strike or lockout in an industry indispensable to national interest includes and extends to all
questions and controversies arising therefrom (Philtranco service enterprises, Inc. Vs. Philtranco Workers
Union–Association of Genuine Labor Organizations (PWU–AGLO), G.R. NO. 180962, February 26, 2014).

(213) A Union staged a strike due to the illegal dismissal of its members. The Secretary of Labor assumed
jurisdiction and settled the issue with regard to the validity of the termination of the said members.
Was the act of the Secretary valid?
Yes, the act of the Secretary is valid, provided that it is one of the issues submitted to be resolved by him.
Under Art. 263 of the Labor Code, the Labor Secretary’s authority to resolve a labor dispute within 30 days
from the date of assumption of jurisdiction encompasses only the issues in the dispute (Philippine Airlines Inc.
v Secretary of Labor, G.R. No. 88210, January 23, 1991).

(214) What are the issues that the Secretary of Labor can resolve when he assumes jurisdiction?
 50

The issues that the Secretary of Labor can resolve are:

3. Issues submitted to the Secretary to be resolved by him (Philippine Airlines Inc. v Secretary of Labor, G.R.
No. 88210, January 23, 1991);
4. Issues submitted to the Secretary for resolution and such issues involved in the labor dispute itself (St.
Scholastica’s College v. Torres, G.R. No. 100158, June 2, 1992);
5. It may subsume pending labor cases before the LA which are involved in the dispute and decide even
issues falling under the exclusive and original jurisdiction of LA such as the declaration of legality or
illegality of strike (International Pharmaceuticals, Inc. v Secretary of Labor, G.R. No. 92981-83, January
9,1992)

(215) Makabagong Pagkakaisa ng Manggagawa ng Coco Factory (Union) and Coco Factory (Company) had
a CBA that expired. Union seasonably submitted proposals to the company for its renegotiation. The
negotiations reached a deadlock, leading to a Notice of Strike. The NCMB exerted efforts but failed to
resolve the deadlock. The company filed a Notice of Lock-out for unfair labor practice due to the unions
alleged work slowdown. The union went on strike 3 days later. The DOLE Secretary assumed
jurisdiction over the labor dispute. What is the effect of such assumption?
The Labor Secretary’s assumption of jurisdiction over the dispute or its certification to the NLRC for compulsory
arbitration shall have the effect of automatically enjoining the intended or impending strike or lockout and all
striking or locked out employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions before the strike or lockout (Bagong
Pagkakaisa ng Manggagawa ng Triumph International v. Secretary of Labor & Employment, G.R. No. 167401,
July 5, 2010).

(216) When may the NLRC grant a preliminary or permanent injunction in strikes or lockouts? (TIGNU)
The NLRC may only grant an injunction after hearing the testimony of witnesses and with opportunity for cross
examination in support of the allegations of the complaint or petition made under oath, and testimony by way
of opposition; and, only after a finding of fact by the NLRC:
1. That prohibited or unlawful acts have been Threatened and will be committed and will be continued unless
restrained;
2. That substantial and irreparable Injury to petitioner’s property will follow;
3. That as to each item of relief to be granted, Greater injury will be inflicted upon the petitioner by the denial
of relief than will be inflicted upon respondents by the granting of relief;
4. That petitioner has No adequate remedy at law; and
5. That the public officers charged with the duty to protect petitioner’s property are Unable or unwilling to
furnish adequate protection (2011 NLRC RULES OF PROCEDURE, Rule X, Sec. 2).

Note: No injunction or temporary restraining order shall be issued on account of any threat, prohibited or
unlawful act, except against the person or persons, association or organization making the threat or committing
the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof (2011
NLRC RULES OF PROCEDURE, Rule X, Sec. 2).

(217) Union A is conducting a valid strike against Company X. In the conduct thereof, the members of the
union picketed around the company premised holding posters containing their demands from the
employer. They also placed barb wires outside the gates of the company premises which prevented
the trucks delivering the company products from entering and exiting the company premises. It
likewise prevented the other employees from entering or leaving the place. Company X filed a petition
for the issuance of a writ of injunction against Union A before the NLRC. Union A contends that the
same cannot be issued. Decide.
The NLRC can issue an injunction only against Union A’s prohibited acts. The injunction power of the NLRC
shall be limited to the prohibited activities conducted during the strike and not against the strike itself. The law
prohibits the obstruction of the free ingress to or egress from the employer’s premises for lawful purposes or
obstruct public thoroughfares. Since the members of the union obstructed the gates of the company premises,
the NLRC can issue an injunction against their prohibited acts but not on the strike itself (IRR of LABOR CODE,
Book V, Rule XXII, Sec. 14).

IV. POST-EMPLOYMENT

EMPLOYER-EMPLOYEE RELATIONSHIP
 51

(218) What is the four-fold test? (SPDC)

In determining the existence of an employer-employee relationship, the Supreme Court has invariably adhered
to the four-fold test, viz.:
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, or the so called "Control test," considered to be the most
important element (Pedrito Parayday v. Shogun Shipping Co., GR. No. 204555; July 6, 2020, Hernando
Case).

(219) What is the two-tiered test?

Under the two-tiered test, the following determines the existence of an employer-employee relationship: (PE)
1. 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. The underlying Economic realities of the activity or relationship (Francisco v. NLRC, G.R. No. 170087,
August 31, 2006).

(220) ABC Corporation is engaged in providing janitorial services to its clients. A, one of its employees, was
sent by ABC Corporation to be one of XYZ Corporation’s janitors. However, after years of providing
janitorial services with XYZ, they decided to terminate the service contract between them. As a result
of the contract’s termination, ABC dismissed 30 of its employees and A was among those employees.
A alleged that being a regular employee, ABC Corporation cannot just dismiss him, hence an illegal
dismissal case was filed by A. On the contrary, ABC claimed that A was just a project employee and
that his employment is dependent on the service contract of its employer with their client. Was there
illegal dismissal? Decide on the case.
Yes, there was illegal dismissal. The primary standard in determining regular employment is the reasonable
connection between the particular activity performed by the employee and the employer’s business or trade.
Guided by this test, A’s work as a janitor, service crew, and sanitation aide are necessary or desirable to ABC
Corporation’s business of providing janitorial and manpower services to its clients as an independent
contractor. Hence, A is a regular employee and his employment did not depend on the service contract entered
by ABC with its client (Universal Robina Sugar Milling Corp. v. Acibo, G.R. No. 186439, January 15, 2014).

(221) What is the difference between employees and independent contractors?

Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish
them from ordinary employees. The control test is the most important test our courts apply in distinguishing an
employee from an independent contractor. This test is based on the extent of control the hirer exercises over
a worker. The greater the supervision and control of the hirer exercises, the more likely the worker is deemed
an employee. The converse holds true as well - the less control the hirer exercises, the more likely the worker
is considered an independent contractor (Sonza v. ABS-CBN Broadcasting Corporation, G.R. No. 138051,
June 10, 2004).

(222) What is security of tenure?

In cases of regular employment, the employer shall not terminate the services of an employee except for a just
cause or when authorized by this Title (Termination of Employment) (LABOR CODE, Art. 294).

(223) What are the kinds of employees? (RCP2-SF)

The following are the kinds of employment:
1. Regular employees: employees who have been engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer (LABOR CODE, Art. 295);
2. Casual employees: employees who are not regular, project, or seasonal employees (LABOR CODE, Art.
295), and as a general rule, those performing activities not usually necessary or desirable in the employer’s
usual business or trade are casual employees (GMA Network v. Pabriga, G.R. No. 176419, November 27,
2013);
3. Probationary employees: employees whose employment does not exceed six (6) months from the date
the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer
period (LABOR CODE, Art. 296);
4. Project employees: employees 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
(Gapayao v. Fulo, G.R. No. 193493, July 13, 2013);
 52

5. Seasonal employees: employees who work or perform services which are seasonal in nature, and the
employment is for the duration of the season (LABOR CODE, Art. 295);
6. Fixed-term employees: employees whose employment contract specifies that the same will last only for a
definite period (Brent School v. Zamora, G.R. No. L-48494, February 5, 1990);

(224) What is the Work Pool principle?

Members of a work pool from which a construction company draws its project employees, if considered
employees of the construction company while in the work pool, are non-project employees or employees for
an indefinite period. If they are employed in a particular project, the completion of the project or of any phase
thereof will not mean severance of employer-employee relationship. However, if the workers in the work pool
are free to leave anytime and offer their services to other employers, then they are project employees employed
by a construction company in a particular project or in a phase thereof (Raycor Aircontrol Systems, Inc., v.
NLRC, G.R. No. 114290, September 9, 1996).

(225) D works as part of the creative manpower of A Corp. with a Talent Contract renewed every year.
Sometime in 2002, A Corp. adopted a system known as the Internal Job Market (IJM) System which led
to the creation of a work pool of accredited technical or creative manpower. Under this system, the
workers were regarded as independent contractors, not regular employees. Upon the implementation
of the IJM System, each of the workers was given an hourly rate. D started demanding recognition as
a regular employee. A Corp. purportedly coerced D to sign a contract and waive his claims for
regularization. Because D refused to comply, A Corp. dismissed D. Is D a regular employee of A Corp.?
Yes, D is a regular employee of A Corp. Following the four-fold test, the Court ruled that cameramen/editors,
reporters or members of creative manpower are considered employees although engaged under Talent
Contracts, which were regularly renewed over the years. Furthermore, A Corp. wielded the power to control
the means and methods in the performance of the D’ work such that D was subject to the constant watch and
scrutiny of A Corp., through its production supervisors who strictly monitored their work and ensured that their
end results are acceptable and in accordance with the standards set by the company. The fact that D signed
a “Talent Contract and/or Project Assignment Form” does not ipso facto make him a talent. It is settled that a
talent contract does not necessarily prevent an employee from acquiring a regular employment status (Del
Rosario v. ABS-CBN Broadcasting Corp., G.R. Nos. 202481, September 8, 2020).

(226) Will a project employment contract dated at the time of issuance but not at the time of receipt or
signing, satisfy the requirement that the employee is informed of the duration and scope of their work
at the time of their hiring?
No. It gives rise to the possibility that the employees were not informed of their status as project employees,
as well as the scope and duration of the projects that were assigned to them at the time of their engagement.
Settled is the rule that "although the absence of a written contract does not by itself grant regular status to the
employees, it is evidence that they were informed of the duration and scope of their work and their status as
project employees at the start of their engagement. When no other evidence is offered, the absence of
employment contracts raises a serious question of whether the employees were sufficiently apprised at the
start of their employment of their status as project employees." Thus, the employer must establish that (a) the
employee was assigned to carry out a particular project or undertaking; and, (b) the duration and scope of
which was specified at the time of engagement (Engineering & Construction Corporation of Asia v. Seguindino
Palle, G.R. No. 201247, July 13, 2020, Hernando Case)

Note: The principal test in determining whether an employee is a project employee is whether he/she is
assigned to carry out a "specific project or undertaking," the duration and scope of which are specified at the
time the employee is engaged in the project, or where the work or service to be performed is seasonal in nature
and the employment is for the duration of the season (Eduardo G. Jovero vs. Rogelio Cerio, G.R. No. 202466,
June 23, 2021, Hernando Case).

(227) What is the condition for a valid probationary employment?

It is essential in probationary employment that the employer informs the employee of the reasonable standards
for his or her regularization at the time of engagement. An employer is deemed to have made known the
regularization standards when it has exerted reasonable efforts to apprise the employee of what he or she is
expected to do or accomplish during the trial period of probation. Otherwise, the probationary employee shall
be considered a regular employee (Edna Luis Simon v. The Results Companies, G.R. No. 249351-52, March
29, 2022).
 53

(228) A works as a Casual or Assistant Clinical Instructor for 2 semesters in HNU College of Nursing. She
alleged that upon her hiring, HNU did not inform her of the standards for the evaluation of her
satisfactory completion of her probationary period. She taught at HNU for more than six consecutive
regular semesters. HNU still does not consider A as a regular employee for failure to comply with all
the conditions of her employment satisfactorily. Moreover, A received letters of appointment for each
and every semester, with definite dates of commencement and end of her employment. Is she a
permanent employee?
No. In Lacuesta v. Ateneo de Manila University, it was held that the Manual of Regulations for Private Schools
and not the Labor Code determines whether or not a faculty member in a private educational institution has
attained a permanent or regular status. It was further laid down in Lacuesta the following requisites before a
private school teacher acquires permanent status, namely: 1) The teacher serves full-time; 2) He/she must
have rendered 3 consecutive years of service; and 3) Such service must have been satisfactory (Arlene Palgan
v. Holy Name University, G.R. No. 219916, February 10, 2021, Hernando Case).

(229) R was hired by MHC as a waiter working 6 days a week. MHC reduced his regular workdays to 2 days.
He filed a complaint for constructive dismissal claiming among others that his duties and functions
were necessary and desirable to the food and beverage business of MHC. MHC claimed that he is a
mere freelance waiter engaged on a short-term basis when there are temporary spikes in the volume
of its business. It presented a fixed-term service contract which provided effectivity dates of R’s
engagement omitting however its expiration dates. Is R a regular employee?
Yes, R is a regular employee. While it is true that the fact that the nature of work is necessary and indispensable
to its business will not impair the validity of Service Agreements which specifically stipulated that his
employment was only for a specific term or duration, it is accurate only if the same there is a finding that the
fixed-term employment agreement complies with the requirements of a valid fixed-term employment
arrangement provided for under the labor laws. A fixed-term employment contract which otherwise fails to
specify the date of effectivity and the date of expiration of an employee's engagement cannot be regarded as
such despite its nomenclature or classification given by the parties. In this case, the Service Agreements
presented by MHC cannot be regarded as true fixed-term employment contracts because the term of R’s
engagement with the hotel merely indicated the dates which pertained only to specified effectivity dates of
engagement as waiter of MHC. It did not, however, unequivocally specified the periods of their expiration.
Thus, R is a regular employee of MHC (Allan Regala v. Manila Hotel Corporation, G.R. No. 204684, October
5, 2020, Hernando Case).

(230) What are the differences between subcontracting and labor-only contracting?
Subcontracting/
Labor-Only Contracting
Job Contracting
As to Nature of The employer or principal is merely an The employer/ principal is treated as direct
Employer/ Principal indirect employer, by operation of law, employer of the contractor’s employees in
of his contractor’s employees (PCI all instances (contractor is deemed agent
Automation Center, Inc., v. NLRC, of the employer) (Manila Water Company
G.R. No. 115920 January 29, 1996) v. Peña G.R. No. 158255, July 8, 2004)

As to Existence of EER
with Employer / Principal
The law creates an Er-Ee relationship
for a limited purpose, (i.e. to ensure
that the employees are paid their
wages) (SMC v. MAERC Integrated
Services, Inc., G.R. No. 144672, July
10, 2003)
The statute creates an Er-Ee relationship
for a comprehensive purpose, (i.e. to
prevent a circumvention of labor laws)
(SMC v. MAERC Integrated Services, Inc.,
G.R. No. 144672, July 10, 2003)

As to Liability of the
Principal
The principal becomes solidarily liable
with the contractor in the event the
latter fails to pay the employees’
wages and for violation of labor
standard laws. But the liability does not
extend to the payment of backwages
or separation pay of employees who
are illegally dismissed (Rosewood
Processing v. NLRC, G.R. No.
116476-84, May 21, 1998)
The principal becomes solidarily liable with
the contractor not only for unpaid wages
but also for all the rightful claims of the
employees under the Labor Code and
ancillary laws (SMC v. MAERC Integrated
Services, Inc., G.R. No. 144672, July 10,
2003)

As to Validity Permissible Prohibited by law

 54

As to Presence of There is a presence of substantial There is an absence of substantial capital

Substantial Capital or capital or investment. or investment.
Investment

(231) What are the elements of a legitimate contracting or subcontracting? (DC-FR)

The contracting or subcontracting shall only be allowed if all of the following circumstances concur:
1. The contractor or subcontractor is engaged in a Distinct and independent business and undertakes to
perform the job or work on its own responsibility according to its own method;
2. The contractor or subcontractor has substantial Capital to carry out the job farmed out by the principal on
his account, manner and method, investment in the form of tools, equipment, machinery and supervision;
3. In performing the work farmed out, the contractor or subcontractor is Free from control and/or discretion
of the principal in all matters connected with the performance of the work except as to the result thereto;
and
4. The service agreement ensures compliance with all the Rights and benefits for all the employees of the
contractor or subcontractor under the labor laws (DO 174-17, Sec. 8).

Note: Either of substantial capital or equipment will suffice to be a legitimate contractor. Article 106 of the
Labor Code provides that “there is "labor-only" contracting where the person supplying workers to an employer
does not have substantial capital or investment in the form of tools, equipment, machineries, work premises,
among others”. If the objective was to oblige the contractor to prove that he has both capital and the requisite
investment, then the conjunction "and" should have been used. Besides, to require a contractor to have both
substantial capitalization and investment in the form of tools, equipment, machineries, etc. would be to overlook
the accustomed system in different industries where contractors are merely outsourced to provide ancillary or
logistic services to the principal (Conqueror Industrial Peace Management Cooperative v. Balingbing, G.R. No.
250311 & 250501, January 5, 2022).

(232) What are the elements of a labor-only contracting?

Labor-only contracting refers to an arrangement where the contractor or subcontractor recruits, supplies, or
places workers to perform a job or work for a principal, any of the two elements hereunder is present:
1. The contractor or subcontractor:
a. Does not have either substantial capital OR investments in the form of tools, equipment, machineries,
supervision, work premises, among others; AND
b. The employees recruited and placed are performing activities which are directly related to the main
business operation of the principal; or
2. The contractor or subcontractor does not exercise the right to control over the performance of the work of
the employee (DO 174, Secs. 3.5 & 5).

Note: There is labor-only contracting even if only one of the two elements above is present (Coca-Cola Bottlers
Phils., Inc., v. Agito, G.R. No. 179546, February 13, 2009). Labor-only contracting is legally wrong and
prohibited because it is an attempt to evade the obligations of an employer (1 Azucena, p. 307).

(233) LPD entered into a Contract of Services with WJS where WJS, as an independent contractor, will assign
workers X, Y, and Z, to perform services at LPD. They worked 6 days a week for 8 hours daily. WJS is
not a registered contractor. X, Y, and Z filed a Complaint for Regularization. May they become regular
employees of LPD?
Yes. They are regular employees of LPD because WJS is a labor-only contractor. For failure to register as a
contractor, a presumption arises that one is engaged in labor-only contracting unless the contractor overcomes
the burden of proving that it has substantial capital, investment, tools, and the like. If there is failure to adduce
evidence to prove the same, the presumption that it is a labor-only contractor stands. Consequently, LPD is
deemed the employer of respondents. (Manila Memorial Park Cemetery, Inc. v. Lluz, G.R. No. 208451,
February 3, 2016).

(234) What is the concept of “Trilateral Relationship”?

It refers to the relationship in a contracting or subcontracting arrangement where there is a contract for a
specific job, work, or service between the principal and the contractor, and a contract of employment between
the contractor and its workers (DO 18-A, Sec. 3(m)).

(235) What is the rule regarding the liability of the parties in legitimate subcontracting and labor-only
contracting?
 55

As to legitimate contracting, there exists a solidary liability on the part of the principal and the contractor for
purposes of enforcing the provisions of the Labor Code and other social legislations, to the extent of the work
performed in the employment contract in the event of (a) a violation of any provision of the Labor Code; or (b)
failure to pay wages (DO 174-17, Sec. 9). On the other hand, in labor-only contracting, the principal becomes
solidarily liable with the contractor not only for unpaid wages but also for all rightful claims of the employees
under the Labor Code and ancillary laws (SMC v. MAERC Integrated Services, Inc., G.R. No. 144672, July 10,
2003).

(236) A, B, C, and D were security guards hired by XYZ Security Services to work for SB Colleges, Inc. They
filed a complaint against the latter for non-compliance with the current minimum wage order. XYZ
Security Services alleged that SB Colleges, Inc. should exclusively be liable for the payment of wage
increases. Is SB Colleges, Inc. solidarily liable? If yes, can it seek any reimbursement?
Yes, SB Colleges is solidarily liable and can seek reimbursement from XYZ Security Services. The principal is
solidarily liable with the contractor for any violation of any provision of the Labor Code, including the failure to
pay wages, and in case the principal pays the unpaid wages, it may validly claim reimbursement from the
contractor (Alpha Investigation and Security Agency, Inc. v. NLRC, G.R. No. 111722, May 27, 1997).

(237) SNS is a domestic company engaged in the business of supplying HR services to different clients.
They hired P and assigned them to S Corp. Pursuant to an illegal dismissal case, P was found illegally
dismissed and SNS and S Corp. were held solidarily liable. S Corp. paid P exactly half of the total
amount due. A quitclaim was signed upon receipt of the said amount. SNS now refuses to pay the
other half contending that the quitclaim in favor of S Corp. must necessarily benefit SNS as a mere
agent of S Corp. Is the quitclaim valid?
No. S Corp. and SNS’ solidary liability finds basis in Articles 106 and 109 of the Labor Code. The law
establishes an employer-employee relationship between the employees of the labor-only contractor and the
employer for the purpose of holding them both responsible for any valid claims. The result is that the liability
must be shouldered by either one or shared by both. This solidary liability is mandated by the Labor Code to
prevent any violation or circumvention and ultimately to assure workers the payment of their rightful claims.
SNS cannot misuse the solidary nature of its obligation to unjustly escape from its liability. The demand made
against one of them will not be an obstacle to those that may be subsequently directed against the other, so
long as the debt has not been fully collected (Gloria Paje v. Spic N' Span Service Corporation, G.R. No. 240810,
February 28, 2022).

TERMINATION BY EMPLOYER
(238) What are the just causes for the termination of employment and its requisites? (SeW-NA-FAC)
The following are the just causes for termination of employment:
Just Cause for
Requisites
Termination

Serious Misconduct 1. There must be Misconduct;

Willful Disobedience or
Insubordination
Gross and Habitual
Neglect of Duties
2. The misconduct must be of such Grave and aggravated character; and
3. There must be showing that the employee becomes Unfit to continue working for the
employer.
1. There must be Disobedience or insubordination;
2. The disobedience or insubordination must be Willful or intentional characterized by a
wrongful and perverse attitude;
3. The order violated must be Reasonable, lawful, and made known to the employee; and
4. The order must pertain to the Duties which he has been engaged to discharge.
1. There must be Neglect of duty; and
2. The negligence must be both Gross and habitual in character

Fraud or Willful Breach of 3. There must be an Act, omission, or concealment;

Trust 4. The act, omission or concealment involves a Breach of legal duty, trust, or confidence
justly reposed;
5. It must be committed against the Employer or his/her representative; and
6. It must be in connection with the employee’s Work.
Loss of Confidence 1. There must be an Act, omission or concealment;
2. The act, omission or concealment Justifies the loss of trust and confidence;
3. The employee concerned must be Holding a position of trust and confidence;
4. The loss of trust and confidence should not be Simulated;
5. It should not be used as a Subterfuge for causes which are improper, illegal or
unjustified; and
6. It must be Genuine and not a mere afterthought to justify an earlier action taken in bad
faith.
 56

Just Cause for

Requisites
Termination

1. There must be an Act or omission punishable/prohibited by law; and

2. The act or omission was Committed by the employee against the person of employer,
Commission of a Crime or any immediate member of his/her family, or his/her duly authorized representative.
Offense

Analogous Cases 1. There must be act or omission Similar to those specified just causes; and
2. The act or omission must be Voluntary and/or willful on the part of the employees.

(239) R Bank received complaints from its stockholders about the discrepancies in the amounts of the
purchase price of stock subscriptions appearing in the original receipts as against the duplicate copies
issued by the bank. In compliance with the Manual of Regulations for Banks mandating the prompt
report of anomalies to the BSP, the Bank’s Board of Directors approved a Report on Crimes and Losses
and directed X - as Compliance Officer - to certify the same. X refused to certify the report. X claimed
that instead of furnishing him the hard copies of the reports and its original attachments to enable him
to verify and certify the same, R Bank issued him two show cause orders and put him on preventive
suspension for neglect of duty. Can X be dismissed for willful disobedience?
No. While X’s refusal to certify the Report on Crimes and Losses was intentional, clearly disobedience, the
same is not attended by a wrongful and perverse mental attitude which warrants the ultimate penalty of
dismissal. X refused to make the attestation on the reasoning that no independent investigation was conducted
and that he cannot completely validate the report for lack of material data and evidence. X noted several
deficiencies in the report and even made recommendations in order to make the same compliant with BSP
regulations (Ariel M. Reyes vs. Rural Bank of San Rafael, G.R.No. 23597, March 23, 2022, Hernando Case).

(240) UC employed L as Professor. F, a student filed a written complaint against L for letting him perform
whilst being sick resulting to his collapse during a group presentation and for dismissing the doctor’s
diagnosis of his illness. He acknowledged that F had a persistent cough during the class but shrugged
it off and did not allow him to go to the clinic. He did not act when F’s legs gave out and prevented the
other students from helping him. He replied "tae mo!" when F tried to explain what happened. Can L
be dismissed on the ground of serious misconduct?
Yes. L’s misconduct amounted to something grave and not merely trivial, considering his position as a
professor: (a) he acknowledged that F had a persistent cough during the class but shrugged it off; (b) he did
not act when F’s legs gave out and prevented the other students from helping him; (c) he did not immediately
allow F to go to the clinic despite prior knowledge of F’s cough; (d) he replied "tae mo!" when F tried to explain
what happened, which showed tastelessness and unprofessionalism. The incident was associated with L’s
work as a professor. He acted with wrongful intent and not mere error of judgment since his statements were
tainted with mockery and insult. He consciously uttered those words with full knowledge that he was conversing
with a student whom he exercises authority over. Hence, he failed to display professionalism and decency in
dealing with his students (University of the Cordilleras vs. Benedicto F. Lacanaria, G.R. No. 223665,
September 27, 2021, Hernando Case).

(241) B was employed in QHI as a supervisor tasked to receive and keep the raw materials. When B was
frisked at the gate, the guard found a belt buckle inside the bag. B had no gate pass or authorization
to bring out the said item from the warehouse. Can B be dismissed for loss of trust and confidence?
Yes. B held a position of trust and confidence. As a supervisor, she was responsible for the custody, handling,
safekeeping, and releasing of QHI's raw materials. This brings her within the scope of employees vested with
trust and confidence, i.e., those who in the normal and routine exercise of their functions regularly handle
significant amounts of money or property. QHI was likewise able to establish the basis of its loss of trust on B:
her violation of the company rule prohibiting the stealing or attempting to steal company property. Her infraction
affected the very essence of loyalty and honesty which all employees owe to their employers. It was serious,
grave, and reflected adversely on her character (Belarso v. Quality House, Inc., G.R. No. 209983, November
10, 2021, Hernando Case).

(242) C was hired by KMBI as Program Officer for Credit Group on a probationary basis. KMBI maintained
that C’s probationary contract was terminated due to her failure to meet the prescribed rating and
standards made known to her at the start of her employment. Was C illegally dismissed?
No. Although probationary employees enjoy security of tenure, they do not enjoy permanent status and thus
may be terminated on two grounds: (1) just cause; and (2) when they fail to qualify as a regular employee in
accordance with reasonable standards prescribed by the employer (Cattleya Cambil v. Kabalikat Para Sa
Maunlad Na Buhay, Inc., G.R. No. 245938; April 5, 2022)
 57

(243) N was hired by M Bank. HR received a report that N was previously employed in P Bank and was
involved in a case concerning embezzlement of funds. However, N did not disclose her past
employment in her job application. N was dismissed. Was the dismissal valid?
No. To be liable under the infraction "knowingly giving false or misleading information in applications for
employment as a result of which employment is secured," the employee must have performed an overt or
positive act, i.e., giving false information in the application for employment. Considering that N did not actually
state any false information in her job application but merely omitted to reflect her past employment with P Bank,
she could not have committed the alleged infraction (Nancy Claire Pit Celis v. Bank Of Makati (A Savings
Bank), Inc., G.R. No. 250776; June 15, 2022).
(244) R was hired by SNP as Second Officer of the vessel. Marine Pollution inspectors checked the vessel's
compliance. R was reprimanded by Capt. K because he was unable to answer the inspectors' inquiries
and did not inform the senior management of such incident, which supposedly led to incorrect
observations and derogatory remarks against the vessel. In addition to this incident, 2 other instances
as provided in Near Miss Incident Reports (NIRS) but NOT in the vessel’s logbook — one wherein R
did not properly conduct the discharge operations of a highly inflammable cargo, and the other wherein
R failed to take action to prevent the extreme build-up of pressure in the cargo tank — led to R’s
eventual dismissal. R was verbally informed by Capt. K that he will be sent home because he was
supposedly incapable of doing his job. Did the acts complained of constitute a just cause for
dismissal?
No. Since a logbook contains entries of the daily events in the vessel, it is unusual that the acts or omissions
of petitioner showing incompetence was not stated therein with particularity. An alleged incompetence should
be specifically stated therein, and absent a more detailed narration in the logbook entry of the circumstances
surrounding an alleged incompetence, the said logbook entry cannot constitute a valid justification for a
dismissal. NIRs are not considered official records unlike a copy of the logbook, absent the proper
authentication. These NIRs — being unauthenticated documents — are therefore rightly considered as self-
serving, thus there is likewise no substantiation for the 2 incidents reported as bases for the dismissal (Ruben
Buenaflor v. Stolt-Nielsen Philippines, Inc., G.R. No. 221664; June 27, 2022)

(245) During the Christmas Party of XYZ Company, A, an employee and a union officer, berated and maligned
the company’s managing director by throwing foul and offensive words at him, such as “putang ina
mo ka, gago ka!” A’s tirade included the company and its officers. Moreover, the incident happened in
front of the company’s employees, their families, as well as company clients and guests. A was later
dismissed on the ground of serious misconduct. A claimed that his acts do not warrant dismissal since
misconduct, however serious, must nevertheless be in connection with the employee’s work to
constitute just cause for his separation. Is his contention correct?
No, A’s contention is erroneous. A’s display of insolent and disrespectful behavior, in utter disregard of the
time and place of its occurrence, had very much to do with his work. He set a bad example as a union officer.
His actuations during the company’s Christmas Party could have had negative repercussions for his employer
had he been allowed to stay on the job. His standing before those clients who witnessed the incident and those
who would hear of it would surely be diminished, to the detriment of the company (Benitez v. Santa Fe, G.R.
No. 208163, April 20, 2015).

Note: The case is to be distinguished from Samson v. NLRC, G.R. No. 121035, April 12, 2000, wherein the
offensive utterances of the employee against the general manager were not considered as serious misconduct
since the utterances were made in a mere casual get-together of employees, and in the absence of the general
manager.

(246) A was employed in XYZ School, a catholic and sectarian educational institution, as an assistant to the
XYZ’s Director. Without having any legal impediments to marry one another, A and her boyfriend B
conceived a child out of wedlock. XYZ learned of A’s pregnancy, and advised A to resign in view of a
provision in the school’s handbook following the 1992 Manual of Regulations for Private Schools
(MRPS) on the causes for termination of employments; that Section 94(e) of the 1992 MRPS cites
“disgraceful or immoral conduct” as a ground for dismissal in addition to the just causes for
termination of employment provided under Article 282 of the Labor Code. XYZ maintains that pre-
marital sexual relations, even if between two consenting adults without legal impediment to marry, is
considered a disgraceful and immoral conduct or a serious misconduct, which are grounds for the
termination of employment under the 1992 MRPS and the Labor Code. That XYZ, as a Catholic
institution of learning, has the right to uphold the teaching of the Catholic Church and expect its
employees to abide by the same. May A be dismissed on the ground of disgraceful or immoral
conduct?
 58

No, A may not be dismissed on the ground of disgraceful or immoral conduct. The morality referred to in the
law is public and necessarily secular, not religious. The determination of whether a conduct is disgraceful or
immoral involves a two-step process: first, a consideration of the totality of the circumstances surrounding the
conduct; and second, an assessment of the said circumstances vis-à-vis the prevailing norms of conduct, i.e.,
what the society generally considers moral and respectable. The fact of the petitioner’s pregnancy out of
wedlock, without more, is not enough to characterize the petitioner’s conduct as disgraceful or immoral. That
the petitioner was employed by a Catholic educational institution per se does not absolutely determine whether
her pregnancy out of wedlock is disgraceful or immoral. There is still a necessity to determine whether the
petitioner’s pregnancy out of wedlock is considered disgraceful or immoral in accordance with the prevailing
norms of conduct. Furthermore, there was no substantial evidence to prove that a pregnancy out of wedlock
will cause grave scandal to the school and its students. It is the burden of the employer to show such damage
(Leus v. St. Scholastica, G.R. No. 187226, January 28, 2015).
(247) Sterling Co. hired Esa as machine operator. Years later, Sterling’s supervisor found Esa and his co-
employees about to take a nap on the sheeter machine. She called their attention and prohibited them
from taking a nap thereon for safety reasons. Esa then uttered disrespectful and provocative words
and raised his middle finger against his superior. A notice to explain was served on Esa but the latter
neither responded nor attended the administrative hearings for the same. Sterling then terminated
Esa’s employment. Sterling argues that Esa’s utterance of foul and abusive language against his
supervisor, demonstrating a dirty finger, and defiance to perform his duties undeniably constitute
serious misconduct. Was Esa validly dismissed?
Yes, Esa was validly dismissed. For misconduct or improper behavior to be a just cause for dismissal, the
following elements must concur: (a) the misconduct must be serious; (b) it must relate to the performance of
the employee’s duties showing that the employee has become unfit to continue working for the employer; and
(c) it must have been performed with wrongful intent. The utterance of obscene, insulting or offensive words
against a superior is not only destructive of the morale of his co-employees and a violation of the company
rules and regulations, but also constitutes gross misconduct. The accusatory and inflammatory language used
by an employee towards his employer or superior can be a ground for dismissal or termination. Further, Esa’s
assailed conduct was related to his work. The supervisor did not prohibit him from taking a nap. She merely
reminded him that he could not do so on the sheeter machine for safety reasons. Esa’s acts reflect an
unwillingness to comply with reasonable management directives (Sterling Paper Products Enterprises, Inc. v.
KMM-Katipunan and Raymond Z. Esponga, G.R. No. 221493, August 2, 2017).

(248) A, a security guard of KLP, while doing his usual inspection around the company’s premises heard a
sound of a running industrial fan. With the intention of turning it off, he followed the sound only to find
X and Y having sexual intercourse beside the big bamboo organ. A immediately went back to the guard
house and relayed what he saw to B, another security guard on duty. Due to such event, X and Y were
dismissed due to serious misconduct. Was the termination valid?
Yes, the termination is valid. Sexual acts and intimacies between two consenting adults belong, as a principled
ideal, to the realm of purely private relations. Whether aroused by lust or inflamed by sincere affection, sexual
acts should be carried out at such place, time and circumstance that, by the generally accepted norms of
conduct, will not offend public decency nor disturb the generally held or accepted social morals. Under these
parameters, sexual acts between two consenting adults do not have a place in the work environment (Imasen
Philippine Manufacturing Corporation v. Alcon, G.R. No. 194884, October 22, 2014).

(249) A, the company’s secretary, was offered a promotion. However, despite the offer and a huge increase
in her salary, she refused. The company then dismissed A based on willful disobedience which
prompted A to file an illegal dismissal case. Will the case prosper? Explain.
Yes, the illegal dismissal case will prosper. Promotion is the advancement from one position to another with
an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in
salary. An employee is not bound to accept a promotion, which is in the nature of a gift or reward. Refusal to
be promoted is a valid exercise of a right. Such exercise cannot be considered in law as insubordination or
willful disobedience of a lawful order of the employer hence, it cannot be the basis of an employee’s dismissal
from service (PHARMACIA and UPJOHN, INC. v. Albayda, Jr., G.R. No. 172724, August 23, 2010).

(250) What are the authorized causes for the termination of employment and its requisites? (IRR-CD)
The following are the authorized causes for the termination of employment:
 59

Authorized Cause
Requisites
for Termination

Installation of Labor- 1. There must be introduction of machinery, equipment or other devices;

saving Devices 2. The introduction must be done in good faith;
3. The purpose for such introduction must be valid such as to save on cost, enhance efficiency and
other justifiable economic reasons;
4. There is no other option available to the employer than the introduction of machinery, equipment
or device and the consequent termination of employment of those affected thereby; and
5. There must be fair and reasonable criteria in selecting employees to be dismissed.

Redundancy 1. There must be superfluous positions or services of employees;

2. The positions or services are in excess of what is reasonably demanded by the actual
requirements of the enterprise to operate in an economical and efficient manner;
3. There must be good faith in abolishing redundant positions;
4. There must be fair and reasonable criteria in selecting the employees to be dismissed; and
5. There must be an adequate proof of redundancy such as but not limited to the new staffing
pattern, feasibility studies/proposal, on the viability of the newly created positions, job description
and the approval by the management of the restructuring.
1. The retrenchment must be reasonably necessary and likely to prevent business losses;
2. The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and
Retrenchment or real, or if only expected, are reasonably imminent;
Downsizing 3. The expected or actual losses must be proved by sufficient and convincing evidence;
4. The retrenchment must be in good faith for the advancement of its interest and not to defeat or
circumvent the employees’ right to security of tenure; and
5. There must be fair and reasonable criteria in ascertaining who would be dismissed and who would
be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and
financial hardship for certain workers.
Closure or Cessation 1. There must be a decision to close or cease operation of the enterprise by the management;
of Operation 2. The decision was made in good faith; and
3. There is no other option available to the employer except to close or cease operations.
Disease 1. The employee must be suffering from any disease;
2. The continued employment of the employee is prohibited by law or prejudicial to his/her health as
well as to the health of his/her co-employees; and
3. There must be certification by a competent public health authority that the disease is incurable
within a period of 6 months even with proper medical treatment.
Other Causes of 1. Reasonable and lawful grounds specified under company policies;
Termination 2. An employee found positive for use of dangerous drugs shall be dealt with administratively;
3. Sexual harassment (serious misconduct); and
4. Those provided for under the CBA (DO 147-15, Sec. 6).

(251) G was hired by TCCMPI assigned to the Accenture account. G became a regular employee. TCCMPI
informed G that he would be transferred to the Telstra account upon successfully passing the training,
assessment and examination and refusal to take examinations would result in termination on the
ground of redundancy. G refused to undergo training and take the examinations under the belief that
he was entitled to security of tenure. G received a notice informing him of his dismissal due to
redundancy. TCCMPI was continuously hiring other technical support representatives. Was G validly
terminated on the ground of redundancy?
No, Gerona was not validly terminated. Redundancy exists when an employee's services are in excess of what
is reasonably demanded by the actual requirements of the business. Teletech should have presented any
document proving the decline in Accenture's volume of calls for the past months, or affidavits of the Accenture
and Teletech officers who determined that business was slowing down and their basis thereof. Unfortunately,
Teletech only relied heavily on the self-serving affidavit of its human capital delivery site manager. While
Teletech submitted other documents, such pieces of evidence hardly proved the fact of redundancy. Gerona
was a regular employee, hence, he was entitled to security of tenure. By requiring him to pass additional
trainings and examination as a condition to retain his employment under the pain of dismissal, Teletech
disregarded his right to security of tenure. Teletech's failure to prove redundancy, coupled with the imposition
of a prejudicial condition to retain employment, rendered the offer of transfer invalid (Teletech Customer Care
Management Philippines, Inc. v. Mario Gerona, Jr., G.R. No. 219166; November 10, 2021, Hernando Case).

(252) What are the aspects of the two-fold due process requirement in the termination of an employee?
The two-fold aspects of due process requirement in the termination by an employer of an employee are:
1. Substantive aspect, by which the dismissal must be for any of the:
a. Just causes; or
b. Authorized causes; and
2. Procedural aspect, rudimentary requirements of due process, notice and hearing must be observed
(Bughaw, Jr. Treasure Island Industrial Corp., G.R. No. 173151, March 28, 2008).
 60

(253) What is the Twin-Notice Rule under Procedural Due Process in labor cases?
The Twin-Notice Rule provides that in dismissing an employee, the employer has the burden of proving that
the former worker has been served two notices:
1. One to apprise him of the particular acts or omissions for which his dismissal is sought; and
2. The other to inform him of his employer’s decision to dismiss him (Tan v. NLRC, G.R. No. 128290,
November 24, 1998).

Note: The first notice must inform outright the employee that an investigation will be conducted on the charges
particularized therein which, if proven, will result in his dismissal. Such notice must not only contain a plain
statement of the charges of malfeasance or misfeasance but must categorically state the effect on his
employment if the charges are proven to be true (Maquiling v. Philippine Tuberculosis Society, Inc., G.R. No.
143484, February 4, 2005).

(254) What happens if the termination was done without observing substantive due process?
The employer shall not terminate the services of an employee except for a just cause or cause authorized by
law. Where there is no showing of clear, valid and legal cause of termination, the law considers it a case of
illegal dismissal (General Baptist College v. NLRC, G.R. No. 85534, March 5, 1993).

(255) What happens if procedural due process was not observed and there was cause for termination?
When the dismissal is based on a just cause but the termination was procedurally infirm, the sanction against
the employer for such a violation is tempered; hence, the award of P30,000.00 instead of P50,000.00 as
nominal damages. This is because the dismissal was initiated by an act imputable to the employee compared
to when the dismissal was initiated by the employer through the enumerated authorized causes under the
Labor Code, where the sanction is stiffer and the amount of nominal damages is higher (Philam Homeowners
Association, Inc. v. De Luna, GR. NO. 209437, March 17, 2021, Hernando Case).

(256) Cathay hired L as cabin crew and was employed for 17 years. Cathay received a report that some crew
members including L were caught in possession of goods after alighting from the aircraft. A 1.5L of
Evian water bottle and a pile of magazines were confiscated from L. L clarified that she brought the
bottle as her own. Cathay terminated her services as it could no longer repose its trust and confidence
on L. Was L’s position imbued with trust and confidence?
Yes, the nature of L's duties and obligations required the highest degree of trust and confidence because she
had in her control properties of Cathay. She had in her custody and control company properties which are of
significant value, and she also had the responsibility of informing the In-flight Service Manager whether there
was defective or missing equipment. Moreover, she had oversight over two to four cabin crew members
assigned in her section of the aircraft and rated their performance for promotion purposes. She had been
entrusted with the custody and control of valuable company properties in the normal and routine exercise of
her duties.

(257) Was L’s termination commensurate to the infraction committed?

No. All surrounding circumstances must be considered and the penalty must be commensurate to the violation
committed by an employee. Termination of the services of an employee should be the employer's last resort
especially when other disciplinary actions may be imposed, considering the employee's long years of service
in the company, devoting time, effort and invaluable service in line with the employer's goals and mission, as
in L's case. The totality of infractions or the number of violations committed during the period of employment
shall be considered in determining the penalty to be imposed upon an erring employee. In L's span of
employment, she did not commit any infraction or was ever sanctioned except in the incident subject of the
present controversy. To impose a penalty as grave as dismissal for a first offense and considering the value
of the property allegedly taken would be too harsh under the circumstances (Salvacion Lamadrid v. Cathay
Pacific Airways Limited And Vivian Lo, G.R. No. 200658; June 23, 2021, Hernando Case).

(258) B was served with the first notice to explain. She refused to receive the same because she wanted to
talk with her supervisor to plead for leniency. She was later given the second notice of termination.
Was there compliance with the two-notice rule?
Yes. Two notices were validly served upon B, despite the fact that she refused to receive the first notice
"because she wanted to talk to Mr. Ronniel Cunanan." Accordingly, the requirement of procedural due process,
particularly, the two-notice rule, was observed (Systems And Plan Integrator And Development Corporation v.
Michelle Elvi C. Ballesteros, G.R. No. 217119; April 25, 2022, Hernando Case).
 61

(259) What are the reliefs available to an employee upon finding that he was illegally dismissed?
An illegally dismissed employee is entitled to the following reliefs:
1. Reinstatement without loss of seniority rights and other privileges or separation pay if no longer viable;
and
2. Full backwages, inclusive of allowances and other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to his actual reinstatement (LABOR CODE, Art.
279).

(260) What is reinstatement?

Reinstatement is a restoration to a state from which one has been removed or separated (Reyes v. RP
Guardians Security Agency, Inc., G.R. No. 193756, April 10, 2013). Reinstatement may be:
1. Actual Reinstatement – The employee shall be admitted back to work; or
2. Payroll Reinstatement – The employee is merely reinstated in the payroll (University of Immaculate
Concepcion v. Secretary of Labor, G.R. No. 151379, January 14, 2005).

(261) What are backwages?

Backwages, in general, are those granted on grounds of equity for earnings which a worker or employee has
lost due to his illegal dismissal (PAL v. NLRC, G.R. No. 55159, December 22, 1989). Employees who are
illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary
equivalent, computed from the time their actual compensation was withheld from them up to the time of their
actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the
time of their illegal termination up to the finality of the decision (Bank of Lubao, Inc. v Manabat, G.R. No.
188722, February 1, 2012).

(262) ALECO, an electric cooperative, received a notice of strike. ALECO requested the Secretary of Labor
to assume jurisdiction over the controversy which ordered ALECO to pay backwages from the date of
the issuance of the Assumption Order until the finality of its resolution. ALECO argues that backwages
should only be limited to the period when the striking employees actually reported back to work. ALEO
counters that Art. 278(g) of the Labor Code prescribes backwages, among others, as disciplinary action
for noncompliance with any of the Secretary of Labor’s orders. Was the award for backwages a penalty
for non-compliance with the Assumption Order?
No, the award for backwages is not a penalty for non-compliance with the Assumption Order but as satisfaction
of ALECO’s obligation towards the employees covered by the Assumption Order. The obligation of the
employer to re-admit the striking employees and/or pay them their respective salaries and benefits arose.
Because of failure to re-admit and/or pay them their respective salaries and benefits, backwages should be
awarded (Albay Electric Cooperative, Inc. v. ALECO Labor Employees Organization, G.R. No. 241437,
September 14, 2020).

(263) Who are entitled to separation pay? (IRR-CD)

Separation pay shall be paid by the employer to an employee terminated due to:
1. Installation of labor-saving devices;
2. Redundancy;
3. Retrenchment;
4. Closure or cessation of operations not due to serious business losses or financial reverses; and
5. Disease (DO 147-15, Sec. 5.5).

(264) When is employer-employee relationship severed when there is an order for the payment of separation
pay?
When separation pay is ordered after the finality of the decision ordering the reinstatement by reason of a
supervening event that makes the award of reinstatement no longer possible, backwages is computed from
the time of dismissal until the finality of the decision ordering separation pay. The finality of the decision cuts-
off the employment relationship and represents the final settlement of the rights and obligations of the parties
against each other. Hence, backwages no longer accumulate upon the finality of the decision ordering the
payment of separation pay since the employee is no longer entitled to any compensation from the employer
by reason of the severance of his employment. It follows that the computation of backwages must be from the
time of illegal dismissal until the finality of the decision ordering the payment thereof (Angono Medics Hospital
vs. Antonina Q. Agabin, G.R. No. 202542, December 09, 2020, Hernando Case)
 62

(265) What is the Doctrine of Strained Relations?

Where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the
tension and strained relations between the parties or where the relationship between the employer and
employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally
dismissed employee held a managerial or key position in the company, it would be more prudent to order
payment of separation pay instead of reinstatement (Quijano v. Mercury Drug Corp., G.R. No. 126561, July 8,
1998).

(266) R concealed an accidental light-up incident by merely indicating said incident was due to the fact that
LH engine fan motor blades cannot be rotated freely, which was contradicted by his co-workers in an
incident report. A month after, R was involved in a towing incident that resulted in substantial losses
to the employer, LTP. He was illegally dismissed. Should R be reinstated?
No. As a rule, an illegally dismissed employee is entitled to reinstatement as a matter of right. However, if
reinstatement would only aggravate the tension and strained relations between the parties, or where the
relationship between the employer and the employee has been unduly strained by reason of their irreconcilable
differences, it would be more prudent to order payment of separation pay instead of reinstatement. In the
present case, reinstatement is no longer feasible since the relationship between LTP and R has been indeed
strained due to the events that transpired and as a necessary consequence of the present judicial controversy.
Thus, if R is reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect
his efficiency and productivity as an employee. Thus, in lieu of reinstatement, it is but proper to award R his
separation pay (Lufthansa Technik Philippines, Inc. And Antonio Loquellano v. Roberto Cuizon, G.R. NO.
184452; February 12, 2020)

(267) When is an employee entitled to moral damages?

The employee is entitled to moral damages when the employer acted:
1. In bad faith or fraud;
2. In a manner oppressive to labor; or in a manner contrary to morals, good customs, or public policy
(Montinola v. PAL, G.R. No. 198656, September 8, 2014).

(268) When is an employee entitled to exemplary damages?

Exemplary damages may be awarded if the dismissal is effected in a wanton, oppressive, or malevolent
manner (Marlon Butial Agapito v. Aeroplus Multi-Services, Inc., G.R. No. 248304, April 20, 2022).

(269) What are the two concepts of attorney’s fees?

There are two commonly accepted concepts of attorney’s fees:
1. Ordinary Concept - an attorney’s fee is the reasonable compensation paid by the client to his lawyer in
exchange for the legal services rendered by the latter. The compensation is paid for the cost and/or
results of the legal services, as agreed upon by the parties or as may be assessed by the courts; and
2. Extraordinary Concept - attorney’s fee is deemed an indemnity for damages ordered by the court to be
paid by the losing party to the winning party. In labor cases, attorney’s fees partake of the nature of an
extraordinary award granted to the victorious party as an indemnity for damages. As a general rule, it is
payable to the client, not to his counsel, unless the former agreed to give the amount to the latter as an
addition to, or part of the counsel’s compensation (Alva v. High Capacity Security Force, Inc., G.R. No.
203328, November 8, 2017).

Note: For attorney’s fees, the award is not precluded by the fact that the employee was represented by the
PAO (Marlon Butial Agapito v. Aeroplus Multi-Services, Inc., G.R. No. 248304; April 20, 2022)

(270) What is the rule with regards to the liability of corporate officers in illegal dismissal cases?
As a general rule, corporations are treated as separate and distinct legal entities from the natural persons
composing them. In the absence of gross negligence, bad faith, or a specific provision of law making a
corporate officer liable, such corporate officer cannot be made personally liable for corporate liabilities.

To hold a director or officer personally liable for corporate obligation is the exception and it only occurs when
the following requisites are present:
1. The complaint must allege that the director or officer assented to the patently unlawful acts of the
corporation, or that the director or officer was guilty of gross negligence or bad faith; and
2. There must be proof that the director or officer acted in bad faith (Lozada v. Mendoza, G. R. No. 196134,
October 12, 2016).
 63

(271) Who has the burden of proof in cases of illegal dismissal?

In illegal dismissal cases, the burden of proof is on the employer in proving the validity of dismissal. However,
the fact of dismissal, if disputed, must be duly proven by the complainant. The rule is that the one who alleges
a fact has the burden of proving it (Italkarat 18, Inc., v. Gerasmio, G.R. No. 221411, September 28, 2020,
Hernando Case).

Note: When the employer fails to specifically deny the complainant employee's material averments as to the
circumstances of his dismissal, the employer is deemed to have admitted the fact of dismissal and must then
discharge his burden of proving that the dismissal of the employee was valid (Noel Guinto v. Sto. Nino Long-
Zeny Consignee, G.R. No. 250987, March 29, 2022).

TERMINATION BY EMPLOYEE
(272) How may an employee terminate his employment?
An employee may terminate his employment by:
1. Serving notice on the employer at least 1 month in advance (without just cause); or
2. Put to end to his employment without serving any notice on the employer for any of the following just
causes (with just cause), to wit: (SICO)
a. Serious insult by the employer or his representative on the honor and person of the employee;
b. Inhuman and unbearable treatment accorded the employee by the employer or his representative;
c. Commission of a crime or offense by the employer or his representative against the person of the
employee or any of the immediate members of his family; and
d. Other causes analogous to any of the foregoing (LABOR CODE, Art. 300).

(273) What are the distinctions between voluntary resignation and constructive dismissal?
Voluntary Resignation Constructive Dismissal

As to Voluntary resignation is the act of an employee, who
Nature finds himself in a situation in which he believes that
personal reasons cannot be sacrificed in favor of the
exigency of the service thus, he has no choice but to
dissociate himself from his employment (Intertrod
Maritime, Inc., v. NLRC, G.R. No. 81087, June 19,
1991).
Constructive dismissal is an act of clear
discrimination, insensibility, or disdain by an
Employer that becomes so unbearable on the part
of the employee that it could foreclose any choice
by him except to forego his continued employment
(Hyatt Taxi Services v. Catinoy, G.R. No. 143204,
June 26, 2001).

As to Test Important for voluntary resignation to be valid is that
of Validity the employee’s intent to relinquish must concur with
the overt act of relinquishment (Doble v. ABB, Inc.,
G.R. No. 215627, June 5, 2017).
The test of constructive dismissal is whether a
reasonable person in the employee’s position
would have been compelled to give up his position
under the circumstances (McMer Corp. Inc., v.
NLRC, G.R. No. 193421, June 4, 2014).

As to An employee who voluntarily resigns is not entitled to
Entitlement separation pay unless stipulated in an employment
to Relief contract or CBA or sanctioned by established
employer practice or policy (Travelaire & Tours Corp.
v. NLRC, G.R. No. 131523, August 20, 1998).
Entitled to reinstatement without loss of seniority
and payment of backwages (Pido v. NLRC, G.R.
No. 169812, February 23, 2007).

(274) V was employed by UPL as its IT and Communications Manager, the duties of which include the
implementation of the CORE program. V was unable to implement the CORE despite budget allotment,
it had to engage the services of HelpDesk resulting in both HelpDesk and Villola performing the UPL’s
IT-related services. Because of this redundancy, UPL requested V to furnish his written resignation
letter, which he failed to produce. He stopped reporting for work. Days after, V, under the name of a
different company, submitted to UPL his proposal for the scanning project which did not materialize.
Was V illegally dismissed?
No. V voluntarily resigned. The fact of resignation is supported by the concurrence of the following: (1) the
intent to relinquish one's office; and (2) the overt act of relinquishment. While V's resignation letter serves as
proof of the latter's formal relinquishment of his employment with UPL, the absence thereof is not enough to
rule out the conclusion that no resignation ever took place. On the other hand, the contemporaneous and
immediate subsequent acts of V after his supposed resignation from UPL should be considered in determining
if there is truth to the contention that he indeed resigned from UPL. First, when UPL requested V to furnish his
resignation letter, he did not raise any concerns whatsoever or inquired on the reasons for the request. Second,
 64

UPL stopped paying his salaries when he already stopped reporting for work starting June 1, 2013. Third, the
proposal for the scanning project that he submitted to UPL clearly indicated that the same was furnished to
UPL under the name DRD Technology Solutions, an entity distinct from and not affiliated with UPL and is thus,
an indication that he was no longer an employee and was only acting as an independent consultant. V failed
to show any evidence that he was coerced or forced by respondents to resign. Absent any extant and clear
proof of the alleged force V allegedly received that led him to sever his employment relations with UPL, it can
be concluded that V resigned voluntarily (Mark Eliseus Villola v. United Philippine Lines, Inc. And Fernando
Lising, G.R. No. 230047; October 9, 2019, Hernando Case)

(275) An audit report in SA University revealed that there was a cash shortage of the net collection of book
remittances. L admitted that she failed to deposit the amount in the University’s bank account. She
paid it in installments but went on leave for the duration of the audit and months after, she tendered
her resignation. D, A, and V were found to have taken advantage of their positions in the Accounting
Office by enrolling their children and relatives under the University's group enrollment incentive
program despite knowing that they were unqualified. They subsequently opted to resign and thereafter
submitted their resignation. They filed complaints for illegal dismissal. Were they illegally dismissed?
No. In illegal dismissal cases, the employer, if defense of resignation is presented, must show that the
employee indeed voluntarily resigned. L, D, V, and A voluntarily tendered their resignation and were approved,
rendering their complaints for illegal dismissal without basis. Even if the Court disregarded their voluntary
resignation, they were all dismissed for just causes (Susan Bance v. University of St. Anthony, G.R. No.
202724; February 03, 2021, Hernando Case)

(276) T and L alleged that they were hired by SSSI as security guards assigned at TII in Baguio City. Later,
SSSI deployed more or less 15 new security guards at TII and instructed T and L to train the new
recruits for 3 days. Later, they were informed that the old security guards of TII were relieved and
the 15 new hirees will replace them as per TII’s request. T and L were promised a transfer to SSS, a
sister company, thus T and L submitted their respective resignation letters and quitclaims. Upon
inquiry as to the status of their transfer, they were allegedly told that there was no vacancy. Thus,
the complaint for illegal dismissal was filed. Decide.
T and L voluntarily resigned. Their acts before and after the resignation do not show that undue force was
exerted upon them. First, they relinquished their positions when they submitted their individual letters of
resignation in their own handwriting. They failed to substantiate alleged deceitful machination for lack of
substantial documentary or testimonial evidence. There was no indication in their respective resignation
letters that they were unduly influenced or coerced to resign. In fact, the said letters contained words of
gratitude which can hardly come from an employee forced to resign. Second, they accepted the retirement
pay and monetary benefits and executed a Quitclaim, Release and Waiver therefor. A waiver or quitclaim is
a valid and binding agreement between the parties, provided that it constitutes a credible and reasonable
settlement, and that the one accomplishing it has done so voluntarily and with a full understanding of its
import. There was no showing that the quitclaims were procured through fraud or deceit nor force or duress.
Third, there was no bad faith since the contention that they were induced to resign on account of their
eventual transfer was unsubstantiated. No agreement to this effect was presented by T and L. Not even a
single witness was introduced to corroborate this claim. Finally, it makes no sense for an employee to file a
resignation letter solely based on an alleged promise that said employee would be later reinstated. Before
the employer must bear the burden of proving that the dismissal was legal, the employee must first establish
by substantial evidence the fact of his dismissal (Tacis v. Shields Security Services Inc., G.R. No. 234575,
June 07, 2021, Hernando Case).
(277) J was the booking salesman of HGP Inc. D asked J to resign for his poor performance and shortages
which is considered as theft, a valid ground for his immediate termination. But considering his prior
good sales performance and the stigma of being terminated from employment, D offered the option for
J to just resign and the management would not file a criminal charge against him for the unremitted
amounts. Does HGP Inc.’s offer for J to resign amounts to illegal dismissal?
No. A decision to give a graceful exit to an employee rather than to file an action for redress is perfectly within
the discretion of an employer. It is not uncommon that an employee is permitted to resign to save face after
the exposure of her malfeasance. In this case, J’s resignation does not amount to illegal dismissal (Jarabelo
v. Household Goods Patrons, Inc., G.R. No. 223163, December 2, 2020).

(278) What constitutes abandonment of work?

Abandonment of work is a form of neglect of duty. To constitute abandonment, two (2) elements must concur,
namely:
 65

The employee must have failed to report for work or must have been absent without valid or justifiable reason;
and There must have been a clear intention on the part of the employee to sever the employer-employee
relationship manifested by some overt act (CRC Agricultural Trading v. NLRC, G.R. No. 177664, December
23, 2009).

(279) Inter-Island hired C as a technical support. C received a Memorandum informing him of his inclusion
in the Q Linux Schedule of Training. However, in a revised Memorandum C was delisted due to the
expiration of his contract. He was asked to submit his resignation letter. After a few days, C was
allegedly prevented from entering Inter-Island's premises. Inter-Island averred that C’s work continued
to deteriorate until he abandoned his work. C filed a complaint for illegal dismissal. Was C illegally
dismissed?
Yes. C did not abandon his work in Inter-Island as in fact he immediately filed a complaint for illegal dismissal
after he was prevented from entering the company premises. This only proves that C had no intention to sever
his employer-employee relationship with Inter-Island (Inter-Island Information Systems, Inc., v. Court Of
Appeals, G.R. No. 187323; June 23, 2021, Hernando Case).

(280) B was formerly the Senior Vice-President of PNB. B alleged that PNB's President, and a certain Mr. Roy
announced the conclusion of a Joint Venture Agreement (JVA) between them. Mr. Roy announced that
not all of the IT staff would be retained since everyone had to undergo an International Competitive
Test. Those who would not be absorbed would be offered retirement packages. B manifested his intent
to retire in a letter. B withdrew the said application in a Memorandum. 4 days later, B received a call
informing him not to report for work as the Board already accepted his resignation. B averred that PNB
erroneously considered his application for retirement as a resignation. Did B abandon his
employment?
No, it was clear in B's letter that he was taking an official leave of absence following his statement that he was
taking the bank's offer to retire. Thus, there was reason for B's absence at the time, which was noted to be
accepted and approved due to PNB's undeniable inaction. Moreover, while B intended to take up the offer to
retire which would have led to the severance of the employer-employee relationship, it should be considered
that the circumstances surrounding such decision was influenced by the JVA with the "Indian" group which B
did not agree with. Such instance did not stem from Bulatao's desire to willingly and unconditionally cut ties
with PNB but because of the JVA which he believed to be disadvantageous to the bank (Philippine National
Bank v. Bulatao, G.R. No. 200972; December 11, 2019).

(281) Leyte Lumber hired G as a sales representative. G had a pending application for leave. Due to a
violation of company policy, G submitted a letter of apology. Y, the manager, told G to come back the
next day. When G returned, Y informed him of his termination when he refused to sign the said
document containing admissions of offenses which according to him, he did not do. Leyte Lumber
alleged that G abandoned his work because he pushed through with his unauthorized leave of absence
by not reporting for work beginning the said date and he never returned for work thereafter. Decide.
There was no abandonment of the part of G. Leyte Lumber just surmised that petitioner had no intent to return
to work when he allegedly went on an unapproved leave of absence, of which respondents were also the
approving authority. No attendance sheet of any sort was submitted to substantiate this claim. Neither was it
shown that they actually denied the application for leave and made the disapproval known to G. There was
also no evidence or mention of the exact number of required days before Leyte Lumber's employees could
properly file their applications for leave of absence. Nor was it established in the records whether this policy
had actually ripened into company practice. It was misleading for respondents to impress upon the SC that
petitioner had absented himself for a prolonged period of time. An immediate filing of a complaint for illegal
dismissal, more so when it includes a prayer for reinstatement, is inconsistent with a charge of abandonment.
Indeed, employees like G who took steps to protest their alleged dismissal cannot be said to have abandoned
their work (Fernando Gososo v. Leyte Lumber Yard And Hardware, Inc., GR. No. 205257; January 13, 2021,
Hernando Case).

PREVENTIVE SUSPENSION

(282) What is preventive suspension?

Preventive suspension is a disciplinary measure for the protection of the company’s property pending
investigation of any alleged malfeasance or misfeasance committed by the employee. The employer may place
the worker concerned under preventive suspension if his continued employment poses a serious and imminent
 66

threat to the life or property of the employer or of his co-workers (Gatbonton v. NLRC, G.R. No. 146779,
January 23, 2006).

(283) When is it proper to impose preventive suspension?

An employee may be placed under preventive suspension, when:
1. The evidence of guilt is strong, and the employer or head of establishment is convinced that the
continued stay of the employee during the period of investigation constitutes a distraction to the normal
operations of the company; and
2. His continued employment poses a serious and imminent threat to life or property of the employer or his
co-workers (Gatbonton v. NLRC, G.R. No. 146779, January 23, 2006).

It shall be for a maximum period of 30 days, during which period the employee placed under preventive
suspension is not entitled to any wages.

(284) S was charged with violating “various company policies by misrepresenting and using his position
and influence in his plot to defraud S Company. Pending administrative investigation, S was placed
under preventive suspension without pay for a period of 30 days. Continued audit investigation,
however, revealed that S approved/noted several CEs covering activities for which payments were
made but not actually carried out. Unaccredited third parties were also engaged in the implementation
of the projects. S was again preventively suspended for another 10 days. May a subsequent preventive
suspension be imposed for a separate or distinct offense upon an employee?
Yes, a subsequent preventive suspension may be imposed for a separate or distinct offense upon an
employee. While the Omnibus Rules limits the period of preventive suspension to 30 days, such time frame
pertains only to one offense by the employee. For an offense, it cannot go beyond 30 days. However, if the
employee is charged with another offense, then the employer is entitled to impose a preventive suspension
not to exceed 30 days specifically for the new infraction. Indeed, a fresh preventive suspension can be imposed
for a separate or distinct offense. Thus, an employer is well within its rights to preventively suspend an
employee for other wrongdoings that may be later discovered while the first investigation is ongoing (Smart
Communications, Inc. v. Solidum, G.R. No. 19776; December 7, 2015).

(285) When does the floating status rule apply? (SO)

Floating status rule is applicable in the following instances:
1. Traditionally, to Security guards who are temporarily sidelined from duty while waiting to be transferred or
assigned to a new post or client (Nippon Housing Phil., Inc., v. Leynes, G.R. No. 177816, August 3, 2011);
and
2. To Other industries when, as a consequence of the bona fide suspension of the operation of a business
or undertaking, an employer is constrained to put employees on a “floating status” for a period not
exceeding 6 months (JPL Marketing Promotions v. CA, G.R. No. 151966, July 8, 2005).

Note: The bona fide suspension of operation of a business or undertaking where floating status is permissible
is for a period not exceeding 6 months; the employer shall reinstate the employee to his former position within
1 month from the resumption of operations (LABOR CODE, Art. 301).

(286) DG was employed by Telus as Senior Quality Analyst. Upon receiving a complaint on charges of
discourtesy and disrespect, Telus placed him in preventive suspension. After the administrative
hearing, DG was found not liable and his preventive suspension was lifted. Telus, however, decided to
transfer him to another practice citing operations reasons. DG did not show up for two profile
interviews. Considering his refusal to report, he was placed on "floating status" because there was yet
no available account for him. DG averred that since they did not have any work yet despite the lifting
of their suspension, he was forced to apply for a vacation leave. After all his leaves were spent, he was
told that since there was no endorsement yet he was not yet required to work and was considered a
"floater" who will not get paid unless his floating status has been lifted. Decide.
DG was constructively dismissed. First, after finding DG not liable for the offense charged, Telus did not
immediately reinstate him to his former position. Second, he was informed that he was being transferred to a
new account but then, he was asked to wait. While waiting, he was compelled to utilize his leave credits. Third,
after his leave credits were consumed, Telus placed DG on a floating status. Finally, respondents required
petitioner to undergo a profile interview in order to be endorsed to a new account. Telus fostered a working
environment that was hostile, discriminatory, unreasonable, and inequitable that naturally compelled DG to
give up his employment thereat to avoid the difficulties he had to face just to keep his employment. The floating
status principle does not find application in the instant case. When the controversy arose, Telus had several
clients in its roster to which it can easily assign DG as Quality Analyst. Moreover, after the lifting of the
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preventive suspension, the company had several job vacancy postings for the position of Quality Analysts.
While there is no specific provision in the Labor Code which governs the "floating status" or temporary "off
detail" of workers, it is implicitly recognized in Article 301 of the Labor Code which speaks of temporary
retrenchment or lay-off due to valid operation issues. The temporary lay-off should not exceed 6 months.
Moreover, placing employees in a valid "floating status" presupposes that there are more employees than
work. In the instant case, Telus did not provide any valid justification or presented proof that there was indeed
a deficit of account (Telus International Philippines, Inc. v. Harvey De Guzman, G.R. Nos. 202676; December
4, 2019, Hernando Case).

RETIREMENT
(287) What is retirement?
Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the
employees whereby the latter, after reaching a certain age, agrees and/or consents to sever his employment
with the former (Brion v. South PH Union Mission of the Seventh Day Adventist Church, G.R. No. 135136, May
19, 1999).

(288) B worked as a part-time professional lecturer at XYZ School in 1974. He took a leave of absence from
1975 to 1977. Upon returning in 1977, he resumed teaching in the school until 2003, the year his
employment was terminated by the school because he was already 75 years old. Thereafter, B claimed
his retirement pay from XYZ School, which the latter denied on the ground that he was merely a part-
time teacher who was not entitled to such benefit. B filed a complaint against XYZ School for non-
payment of retirement benefits. Will the action prosper?
Yes, the action will prosper. B is entitled to retirement benefits pursuant to RA 7641. To avail the retirement
benefits under Art. 302 of the Labor Code, as amended by RA. 7641, the following requisites must concur: (1)
The employee has reached the age of 60 years for optional retirement or 65 years for compulsory retirement;
(2) The employee has served at least five years in the establishment; and (3) There is no retirement plan or
other applicable agreement providing for retirement benefits of employees in the establishment. Retirement
Pay Law shall apply to all employees in the private sector, regardless of their position, designation or status
and irrespective of the method by which their wages are paid. They shall include part-time employees,
employees of service and other job contractors and domestic helpers or persons in the personal service of
another (De La Salle-Araneta University v. Juanito C. Bernardo G.R. No. 190809, February 13, 2017).

(289) Jona was hired in June 1955 as an elementary teacher in SP Colleges. In 1970 she applied for a one (1)
year leave of absence due to her mother’s illness. However, after the expiration of said leave in 1971,
Jona had not been heard by the school. In 1982, Jona applied anew with the school. In 1997, during an
event in exercises of the school, Jona was awarded a plaque of appreciation for her 30 years of service.
Upon reaching the compulsory retirement age of 65, the school computed Joanna’s retirement benefits
on account of 15 years of service (1982-1997), considering she abandoned her work during her
employment of 1955-1970. Jona, insists that she did not abandon her work, and as such her retirement
benefits must be computed for her service of 30 years (1955-1997). Should Jona’s Services for the
school during the period from 1955 to 1970 be factored in the computation of her retirement benefits?
No, Jona cannot be credited for her services in 1955-1970 in the determination of her retirement benefits. For,
after her one year leave of absence expired in 1971 without her requesting for extension thereof as in fact she
had not been heard from until she resurfaced in 1982 when she reapplied with petitioner school, she
abandoned her teaching position as in fact she was employed elsewhere in the interim and effectively
relinquished the retirement benefits accumulated during the said period. For a valid finding of abandonment,
two factors must be present: (1) the failure to report for work, or absence without valid or justifiable reason;
and (2) a clear intention to sever employer- employee relationship, with the second element as the more
determinative factor, being manifested by some overt acts. To prove abandonment, the employer must show
that the employee deliberately and unjustifiably refused to resume his employment without any intention of
returning. There must be a concurrence of the intention to abandon and some overt acts from which an
employee may be deduced as having no more intention to work. The approved one-year leave of absence
without pay of Jona expired in 1971 without her requesting for extension thereof or notifying the school if and
when she would resume teaching. She was rehired only in 1982 after filing anew an application, without her
proffering any explanation for her more than a decade of absence. Under the circumstances, abandonment of
work at petitioner school in 1971 is indubitably manifest (Sta. Catalina College v. National Labor Relations
Commission, G.R. No. 144483, November 19, 2003).

(290) N was an employee of XYZ Company for 20 years. To facilitate the grant of his SSS retirement benefits,
N entered into an agreement with XYZ Company whereby the latter would issue a certification of his
 68

separation from employment notwithstanding the fact of his continued employment as a laborer. Upon
reaching the compulsory retirement age, N was actually deemed retired and was paid his last salary,
but not retirement benefits. N filed a claim for the payment of his retirement benefits. In its defense,
XYZ Company claims that N was no longer its employee because Q employed him after it issued N’s
certification of separation from employment. Is N entitled to retirement benefits under the Labor Code?
Yes, N is entitled to retirement benefits under the Labor Code. In Oro Enterprises v. NLRC (G.R. No. 110861,
November 14, 1994), the Supreme Court held that the beneficent provisions of Art. 287 of the Labor Code
providing for retirement benefits is apart from the retirement benefits that can be claimed by a qualified
employee under the social security law. Under Art. 287, an employee upon reaching the age of 60 years or
more, but not beyond the compulsory retirement age, who has served at least 5 years in the said establishment,
may retire and shall be entitled to retirement pay. Here, N should be entitled to retirement pay as a necessary
consequence of the finding that he was an employee of XYZ Company (Masing and Sons Development
Corporation v Rogelio, G.R. No. 161787, April 27, 2011).

V. JURISDICTION AND RELIEFS

MANDATORY CONCILIATION-MEDIATION, SENA
(291) What is the Single Entry Approach (SEnA)?
It refers to the administrative approach to provide an accessible, speedy, impartial, and inexpensive settlement
procedure of all issues arising from labor and employment through a 30-day mandatory conciliation-mediation
(Single Entry Approach Implementing Rules and Regulations, DO 151-16, series of 2016, RULE 1, Sec. 4(k)
[hereinafter SENA IRR]).

(292) What are the cases covered by the SEnA?

As a general rule, all issues arising from labor and employment shall be subject to the 30-day mandatory
conciliation- mediation EXCEPT: (NCEV2O)
1. Notices of strike/ lockout or preventive mediation cases with the NCMB;
2. Issues arising from the interpretation and implementation of the CBA, and those arising from the
interpretation and enforcement of company personnel policies which should be processed through the
grievance machinery;
3. Applications for Exemption from wage orders with the National Wages and Productivity Commission
(NWPC);
4. Issues involving Violations of: (AEP-PEA- CRP-TO)
a. Alien Employment Permit (AEP);
b. Private Employment Agency (PEA) authority or license;
c. Working Child Permit (WCP) and violations of RA 9231 (Anti-Child Labor Law);
d. Registration under DO 18-A, series of 2011;
e. Professional License issued by the PRC and violation of the Professional Code of Conduct;
f. TESDA Accreditations; and
g. Other Similar Permits, licenses or registrations issued by the DOLE or its attached agencies;

5. Violations of POEA Rules and Regulations involving: (SDIR-Not-O)

a. Serious offenses and offenses penalized with cancellation of license;
b. Disciplinary actions against overseas workers/seafarers which are considered serious offenses, or
which carry the penalty of delisting from the POEA registry at first offense;
c. Complaints Initiated by the POEA;
d. Complaints against an agency whose license is Revoked, cancelled, expired or otherwise delisted;
and
e. Complaints categorized under the POEA Rules and Regulations as Not subject to SEnA; and
f. Issues on Occupational Safety and Health Standards involving imminent danger situation,
dangerous occurrences/ disabling injury, and absence of personal protective equipment (RA 10396,
Sec. 1; LABOR CODE Art. 234; SENA IRR, RULE I, Sec. 3).

(293) A filed an illegal dismissal case against ABC company for allegedly terminating his services as a
company lawyer without any legal grounds. The parties underwent Mandatory Conciliation and
Mediation of SENA in accordance with the law. ABC company assailed the position of A for being a
party of the conciliation proceedings, him being a lawyer, which was allegedly against SENA IRR, Rule
IV which discourages lawyers from participating in the proceedings. Is ABC Company correct?
Explain.
 69

No. Although it is true that lawyers are discouraged from participating in the conference in the aforementioned
provision, the same provision provides an exception, to wit: except when they are the requesting party or
employer. Hence, A, being the requesting party in this case, is allowed to participate in the proceedings (SENA
IRR, Rule IV, Sec. 1).

LABOR ARBITER
(294) What are the cases falling under the exclusive and original jurisdiction of the Labor Arbiter? (TURDOS-
5000-CLAD)
The Labor Arbiters (LA) shall have original and exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural:
1. Termination disputes;
2. ULP cases;
3. If accompanied with a claim for Reinstatement, those cases that workers may file involving wages, rates
of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary, and other forms of Damages arising from employer-employee
relations;
5. Monetary claims of Overseas contract workers arising from employer- employee relationship or by virtue
of any law or contract, including claims for death and disability benefits and for actual, moral, exemplary
and other forms of damages as provided by Section 10 of RA 8042 amended by RA 10022;

Note: In order for the LA to assume jurisdiction over the money claim, the OFW must have a certification
from POEA (PNB v. Cabansag, G.R. No. 157010, June 21, 2005).

6. Cases arising from any violation of Article 279 of the Labor Code, including questions involving the
legality of Strikes and lockouts;
7. Except claims for Employment Compensation, Social Security, Medicare and maternity benefits, all other
claims arising from employer-employee relations, including those of persons in domestic or household
service, involving an amount exceeding Php5,000 regardless of whether accompanied with a claim for
reinstatement;
8. Contested cases under the exception clause in Article 128(b) of the Labor Code;

Note: The jurisdiction of the LA is found in the exception clause of Article 128 (b) where the employer
contests the findings of the labor employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection (EO 111 (1986)).

9. Other cases as may be provided by Law (2011 NLRC PROCEDURE OF PROCEDURE, Rule V, Sec. 1);
10. Enforcement of compromise Agreements when there is non-compliance by any of the parties pursuant to
Article 233 (non-compliance, or if settlement is obtained through fraud, misrepresentation, or coercion) of
the Labor Code, as amended; and
11. Wage Distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to
RA 6727;

Note: Not every controversy or money claim by an employee against the employer or vice-versa is within
the exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of action precedes from a different
source of obligation is within the exclusive jurisdiction of the regular court (Halagueña v. PAL, G.R. No.
172013, October 2, 2009).

(295) A, B, and C are employees of XYZ School. They were dismissed from employment for participating in
protest actions which was considered a breach of trust and confidence reposed in them. They filed an
illegal dismissal case against XYZ School. The LA ruled that their dismissal was valid. On appeal, NLRC
reversed the same and ordered their reinstatement. Is the order of reinstatement immediately
executory?
No, the order of reinstatement is not immediately executory. Art. 229 of the Labor Code which provides that
reinstatement is immediately executory even pending appeal applies only when it is the LA himself who ordered
the reinstatement. If the reinstatement order is issued by the NLRC on appeal, there is a need to secure a writ
of execution from the Labor Arbiter a quo to enforce the reinstatement of the employee (Mt. Carmel College v.
Resuena, G.R. No. 173076, October 10, 2007).
 70

(296) X filed a complaint before the NLRC against Y for illegal dismissal, non-execution of a contract of
employment, violation of the minimum wage law, and non-payment of overtime pay. Thereafter, X filed
an action for damages against Y before the MeTC of Quezon City. Y moved for the dismissal of the
complaint on the grounds of lack of jurisdiction and forum-shopping or splitting causes of action
arguing that the NLRC has jurisdiction over the action for damages because the alleged injury is work-
related and that X should not be allowed to split her causes of action by filing the action for damages
separately from the labor case. Does the regular court exercise jurisdiction over the case involving
damages against the employer?
No, the regular court does not have jurisdiction over this case. Article 217(a) of the Labor Code, as amended,
clearly bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from
employer- employee relations —in other words, the Labor Arbiter has jurisdiction to award not only the reliefs
provided by labor laws, but also damages governed by the Civil Code. Under the “reasonable causal
connection rule,” if there is a reasonable causal connection between the claim asserted and the employer-
employee relations, then the case is within the jurisdiction of our labor courts. In the absence of such nexus, it
is the regular courts that have jurisdiction. The Supreme Court held that the employees’ claim for damages
was intertwined with them having been separated from their employment without just cause and, consequently,
had a reasonable causal connection with their employer-employee relations with petitioner (Kawachi v. Del
Quero, G.R. No. 163768, March 27, 2007).

(297) ALPAP staged a strike. A return-to-work order was issued, but ALPAP defied the same. Consequently,
SOLE declared their strike illegal. Sometime after, PAL filed a complaint for damages against ALPAP
before the LA. The LA and NLRC dismissed the complaint for damages for lack of jurisdiction. Was it
proper for labor tribunals to assume jurisdiction over the complaint for damages?
Yes, the assumption of jurisdiction by the labor tribunals was proper. Under Article 224 of the Labor Code, the
LA and NLRC have jurisdiction to resolve cases involving claims for damages from employer-employee
relationship. A money claim by a worker against the employer or vice-versa is within the exclusive jurisdiction
of the LA only if there is a “reasonable connection” between the claim asserted and employer-employee
relationship. Here, PAL’s claim for damages has reasonable connection with its employer-employee
relationship with ALPAP as such arose from the illegal strike which were closely related with the latter’s
allegation of ULP against PAL (PH Airlines, Inc. v. Airline Pilots Association of the PHL, G.R. No. 200088,
February 26, 2018).

(298) P, an employee of the M Grocery, was criminally charged by the latter for theft. The complaint was
dismissed. Meantime, allegedly after an administrative investigation, P was dismissed by M. As a
result, P lodged a complaint for illegal dismissal with the NLRC and demanded reinstatement with
damages. In addition, she also a instituted separate civil complaint against the M with the RTC for
malicious prosecution. M moved to dismiss the civil complaint on the ground that RTC had no
jurisdiction over the case because it involved employee-employer relations. Should the civil case be
dismissed?
No, the civil case should not be dismissed. Not every controversy involving workers and their employers can
be resolved only by the LAs. This will be so only if there is a “reasonable causal connection” between the claim
asserted and employee-employer relations, then the case is under the jurisdiction of the labor courts (PH
Airlines, Inc. v. Airline Pilots Association of the PHL, G.R. No. 200088, February 26, 2018). Absent such a link,
the complaint will be cognizable by the regular courts of justice in the exercise of their civil and criminal
jurisdiction (San Miguel Corp. v. Etcuban, G.R. No. 127639, December 3, 1999). Here, the civil case involves
a complaint for damages for malicious prosecution. It does not appear that there is a “reasonable causal
connection” between the complaint and the relations of the parties as employer and employees. The complaint
did not arise from such relations and in fact could have arisen independently of an employment relationship
between the parties. Therefore, jurisdiction over the case is properly with the civil courts.

(299) On the basis of a complaint filed by the employees, DOLE-NCR conducted a complaint inspection of
Makabayan Company where several violations were noted. After hearing with respect to the violations,
the Regional Director ordered Makabayan Company to pay Php 763,927.85 to the affected employees.
Makabayan Company filed a motion for reconsideration contending that the RD has no jurisdiction
over money claims exceeding Php5,000 and the same is properly covered by the jurisdiction of the
Labor Arbiter. Is Makabayan Company correct?
No, Makabayan’s contention is incorrect. While it is true that under Arts. 129 and 224 of the Labor Code, the
LA has jurisdiction to hear and decide cases where the aggregate money claims of each employees exceed
₽5,000, said provisions of law do not contemplate nor cover the visitorial and enforcement powers of the
Secretary of Labor or his duly authorized representatives. Rather, said powers are defined and set forth in Art.
128 of the Labor Code. Notwithstanding the provisions of Arts. 129 and 224 and in cases where the relationship
of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized
 71

representatives shall have the power to issue compliance orders to give effect to the Labor standard provisions
of the Code (Ex-Bataan Veterans Security Agency v. Laguesma, G.R. No. 152396, November 20, 2007).

(300) Q was one of the incorporators of ABC Corp. and the internal auditor and personnel manager of the
same. Upon retirement, Q filed a claim for unpaid salaries and separation pay due him amounting to
Php845,000 and Php250,000 respectively, but was denied. Q filed a complaint before the NLRC for
nonpayment of separation and retirement benefits. The LA dismissed the case for lack of jurisdiction
because of absence of employer-employee relationship. Q filed his complaint before the RTC. Does
RTC have jurisdiction over money claims involving an amount exceeding Php5,000 arising from an
employer- employee relationship?
No, the RTC has no jurisdiction over this case. Art. 224 of the Labor Code provides that the LA shall have
original and exclusive jurisdiction on claims arising from employer-employee relations involving an amount
exceeding Php5,000.00. Here, the claim for unpaid salaries and separation pay involves one which arose from
the employer- employee relationship of Q and ABC Corp., the jurisdiction over which belongs to the LA.
Therefore, the RTC may not take cognizance of Q’s complaint (World’s Best Gas, Inc. v. Vital, G.R. No.
211588, September 9, 2015).

(301) A, B, and C were employed as female flight attendants of PAL. They are members of the FASAP, the
exclusive bargaining representative of the flight attendants. PAL-FASAP CBA, provides, inter alia, that:
“Subject to the grooming standards provisions of this Agreement, compulsory retirement shall be 55
for females and 60 for males.” A, B, and C manifested that the provision is discriminatory and
demanded for an equal treatment with their male counterparts. The FASAP submitted its CBA
proposals and manifested its willingness to commence the collective bargaining negotiations. A, B,
and C filed a case before the RTC questioning the validity of the provision in the CBA. PAL filed a
motion to dismiss the case contending that the RTC had no jurisdiction over the case. The 3 employees
went to you to ask for your legal opinion if indeed, the RTC has no jurisdiction over their petition. What
will you advise them?
The RTC has jurisdiction over the case. The subject of litigation is incapable of pecuniary estimation,
exclusively cognizable by the RTC, pursuant to Sec. 19 (1) of BP 29, as amended. Being an ordinary civil
action, the same is beyond the jurisdiction of labor tribunals. Where the principal relief sought is to be resolved
not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by
the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the
labor arbiter and the NLRC. Here, the issue cannot be resolved by the Labor Code only but it requires the
application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All
Forms of Discrimination against Women, and the power to apply and interpret the constitution and CEDAW is
within the jurisdiction of trial courts, a court of general jurisdiction. Therefore, RTC has jurisdiction over the
case (Halguena v. PH Airlines, G.R. No. 172013, October 2, 2009).

(302) X initiated an illegal dismissal case against employer, ADB. Two summonses were served, one to the
ADB and the other through the DFA. Forthwith, the ADB and the DFA notified respondent Labor Arbiter
that the ADB, as well as its president and office, were covered by an immunity from legal process
except for borrowings, guaranties or the sale of securities pursuant to Article 50(1) and Article 55 of
the Agreement Establishing the Asian Development Bank in relation to Section 5 and Section 44 of the
Agreement Between The Bank And The Government Of The Philippines Regarding The Bank’s
Headquarters. The LA took cognizance of the complaint on the impression that the ADB had waived
its diplomatic immunity from suit and rendered judgment against ADB. Does the LA have jurisdiction
over the case?
No, the LA does not have jurisdiction. The stipulations of both the Charter and Headquarters Agreement states
that, except in the specified cases of borrowing and guarantee operations, as well as the purchase, sale and
underwriting of securities, the ADB enjoys immunity from legal process of every form. The Bank’s officers, on
their part, enjoy immunity in respect of all acts performed by them in their official capacity. The Charter and the
Headquarters Agreement granting these immunities and privileges are treaty covenants and commitments
voluntarily assumed by the Philippines government which must be respected. In World Health Organization vs.
Aquino, the Court ruled that diplomatic immunity is essentially a political question and courts should refuse to
look beyond a determination by the executive branch of the government, and where the plea of diplomatic
immunity is recognized and affirmed by the executive branch of the government, it is then the duty of the courts
to accept the claim of immunity. Hence, the LA does not have jurisdiction over the case for illegal dismissal
(Department of Foreign Affairs vs. NLRC, G.R. No. 113191, September 18, 1996).

NATIONAL LABOR RELATIONS COMMISSION

(303) What are the grounds for appeal? (FAQE)
 72

The following are the grounds for appeal:

1. If the decision, award or order was secured through Fraud or coercion, including graft and corruption;
2. If there is prima facie evidence of Abuse of discretion on the part of the Labor Arbiter or Regional Director;
3. If made purely on Questions of law; and/or
4. If serious Errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable
damage or injury to the appellant (NLRC RULES, Rule VI, Sec. 2).

(304) M instituted a complaint before the LA against KG Inc. for non-payment of 14th month pay and refund
of his car’s maintenance expenditures, damages and attorney’s fees. KG Inc. contested the M
allegations, contending that the 14th month bonus being claimed by the latter is discretionary in nature
and that there is no document that would show that such gratuity is part of the regular compensation
of the employees. Prior to the issuance of the LA’s decision, three creditors of KG Inc. instituted a
Petition for Involuntary Insolvency before the RTC. Can the Court relax the requirement for an appeal
bond?
Yes. The existence of the insolvency proceedings as an exceptional circumstance to warrant the liberal
application of the rules requiring an appeal bond. The failure to file an appeal bond did not contradict the need
to ensure that M, if his claim is deemed valid, will receive the money judgment (Karj Global Marketing Network,
Inc. v. Mara, G.R. No. 190654, July 28, 2020).

(305) A and B worked for QFI corp. Both were among those retrenched due to the drastic drop in the net
income of QFI. However, it was discovered that their final pay and other benefits were not released due
to the alleged discovery of unauthorized deduction which they purportedly failed to explain. Aggrieved,
both filed complaints for illegal dismissal against QFI. LA found A and B to have been illegally
dismissed. Dissatisfied, QFI filed a notice of appeal accompanied by a motion to reduce bond and a
cash bond. NLRC gave due course to QFI’s appeal holding that there was substantial compliance with
the bond requirement. CA reversed NLRC’s ruling and ruled that QFI’s failure to post the required bond
impeded the perfection of its appeal and rendered the LA decision final and executory. Did QFI
substantially complied with the bond requirement?
Yes, QFI substantially complied with the bond requirement. In case of a judgment involving a monetary award,
an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from. The Court has relaxed this stringent requirement whenever justified.
Thus, the Rules — specifically Section 6, Rule VI — thereof, allow the reduction of the appeal bond upon a
showing of: (a) the existence of a meritorious ground for reduction, and (b) the posting of a bond in a reasonable
amount in relation to the monetary award. A mere notice of appeal without posting bond shall not stop the
running of the period for perfecting an appeal. Here, the posting of a cash bond equivalent to more than 20%
of the monetary judgment, together with the Motion to Reduce Bond within the reglementary period was
sufficient to suspend the period to perfect the appeal. The posting of the said partial bond coupled with the
subsequent posting of a surety bond in an amount equivalent to the monetary judgment also signified QFI’s
good faith and willingness to recognize the final outcome of its appeal. In determining the reasonable amount
of appeal bonds, however, the Court primarily considers the merits of the motions and the appeals (Quantum
Foods, Inc. v. Marcelino Esloyo, G.R. No. 213696, December 9, 2015).

(306) Mr. Q was employed as a Claims Staff of Oroport. He was charged for mishandling and
misappropriation of five trays of eggs even when he had no information about who was responsible
for it and without approval of the Senior Finance Officer of Oroport in violation of the standard
procedure in handling claims. Oroport dismissed Mr. Q from service for serious misconduct. The LA
declared that the dismissal of MR. Q was illegal and awarded him a total of P 162,000. Oroport appealed
to the NLRC but submitted a Bank Certification in lieu of posting a cash or security bond. Did Oroport’s
failure to post a bond result to the non-perfection of his appeal of the LA’s decision to NLRC?
Yes, Oroport’s failure to post bond results to the non-perfection of his appeal. Oroport’s submission before the
NLRC of a Bank Certification, in lieu of posting a cash or surety bond, cannot be considered as substantial
compliance with Art. 229 of the Labor Code. The filing of the appeal bond is a jurisdictional requirement and
the rules thereon mandate no less than a strict construction. Hence, Ororport’s appeal was not perfected
(Quirante v. Oroport Cargo Handling Services Inc., G.R. No. 209689, December 2, 2015).

JUDICIAL REVIEW OF LABOR RULINGS

(307) D was hired as a Hotel Personnel Planner for PTC Inc. Later, PTC revised its Code of Discipline, in
which it indicated more clearly its prohibition against accepting gifts with dismissal as penalty for its
violation. D was caught accepting a brown bag from another and was served with a memorandum to
explain and a 30-day Suspension Notice. Then he received a written resolution from PTC notifying him
of the termination of his employment. D filed a case for illegal dismissal with the LA which dismissed
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the case for lack of merit. D thus filed an appeal with the NLRC which was partially granted. PTC filed
a motion for reconsideration with the NLRC. NLRC issued a Resolution reversing its earlier Decision.
A copy of which was received on December 3, 2014. On February 2, 2015, D then filed a Petition for
Certiorari under Rule 65 with the CA. CA dismissed D’s Petition for Certiorari primarily for allegedly
being filed out of time. Did D timely file the Petition for Certiorari?
Yes. The period or manner of appeal from the NLRC to the CA is governed by Rule 65. Pursuant to the ruling
of this Court in St. Martin Funeral Home v. National Labor Relations Commission, Section 4 of Rule 65, as
amended, states that the petition may be filed not later than sixty (60) days from notice of the judgment, or
resolution sought to be assailed. In this case, the sixty (60) day period has not yet lapsed. Hence, D therefore
timely filed the Petition for Certiorari. D received a copy of the NLRC Resolution on December 3, 2014.
Consequently, he had 60 days, or until February 1, 2015, to file the Petition for Certiorari. However, February
1, 2015, fell on a Sunday, hence the deadline for filing the Petition for Certiorari was until the next business
day, or on February 2, 2015. D therefore timely filed the Petition for Certiorari when he filed the same on the
next business day, or on February 2, 2015 (De Leon v. Philippine Transmarine Carriers, Inc., G.R. No. 232194,
June 19, 2019).

(308) A was hired as a driver for DLTB Co. He drove the BBC bus and arrived at Matnog Port, Sorsogon, en
route to Southern Leyte. The bus was arranged to be ferried at 3:00am but BBC’s facilitator gathered
all the passengers so they could ride the 9:00am trip instead. After the passengers got angry and
confused, they were forced to take the 3:00am trip of another ferry company. When he got back from
the trip, he was summoned to explain why the passengers were not able to immediately board the
ferry. After he submitted his written explanation, he was suspended for 15 days and after such period,
he was told that he was already dismissed from his employment. The foregoing prompted A to file a
complaint praying that he be declared as illegally dismissed and be reinstated with payment of full
back wages and other benefits, moral and exemplary damages, and attorney’s fees. The LA rendered
judgment in favor of A. This was affirmed by the NLRC. Without moving for reconsideration, A filed a
petition for certiorari under Rule 65 before the CA. Was the failure of A to file a motion for
reconsideration before the NLRC fatal to his petition for certiorari under Rule 65?
Yes. It is settled that a motion for reconsideration, when allowed to be filed, is an indispensable condition to
the filing of a petition for certiorari. Under Rule 65, the remedy of filing a special civil action for certiorari is
available only when there is no appeal; or any plain, speedy, and adequate remedy in the ordinary course of
law. A “plain” and “adequate remedy” is a motion for reconsideration of the assailed order or resolution, the
filing of which is an indispensable condition to the filing of a special civil action for certiorari. This is to give the
lower court the opportunity to correct itself. In this case, A failed to provide any reason in his petition for
certiorari for his failure to file a motion for reconsideration. A’s failure to file a motion for reconsideration meant
that when he filed his petition for certiorari, it was not the only plain, speedy, and adequate remedy available.
The CA should have dismissed the petition for certiorari outright. There is nothing on record to justify a
relaxation of the rules (Del Monte Land Transport Bus Co. v. Abergos, G.R. No. 245344, December 02, 2020).

(309) E was hired as a technician in Saudi Arabia, through its agent, SBM. After his contract, E filed a
complaint for non-payment of salaries. LA ruled in favor of E but was reversed by NLRC for not
substantiating his claims. However, he filed an MR where NLRC reinstated the LA’s Decision. SBM filed
a petition for certiorari but the same was dismissed by the CA on the ground of failure to file an MR
against the NLRC Resolution. SBM moved for reconsideration but was denied. May the CA give due
course to a petition for certiorari absent any motion for reconsideration filed against the NLRC’s
resolution?
Yes, the CA may give due course to the petition for certiorari. As a general rule, an MR is an indispensable
condition before a losing party can resort to the special civil action for certiorari under Rule 65 of the Rules of
Court. However, jurisprudence allows exceptions to the rule, among others, where the questions raised in the
certiorari proceedings have been duly raised and passed upon by the lower court or are the same as those
raised and passed upon in the lower court. Since NLRC has been given an opportunity to review its ruling and
correct itself when E filed a MR, requiring SBM to file another MR would be futile because the very issues
raised in the MR had already been evaluated by NLRC (Rapid Manpower Consultants v. De Guzman, G.R.
No. 187418, September 28, 2015).

(310) A filed an illegal dismissal case against B Corp. The LA ruled against B Corp hence an appeal was
made to the NLRC which affirmed the LA’s decision. From NLRC it elevated the case to CA via petition
for certiorari. CA evaluated the materiality and significance of the pieces of evidence presented to it
which according to A were capriciously, whimsically, or arbitrarily disregarded by the NLRC. Was the
act of CA proper?
Yes, the act of CA is proper. In a special civil action for certiorari under Rule 65, the issues are limited to errors
of jurisdiction or grave abuse of discretion. However, in labor cases elevated to the CA via petition for certiorari,
 74

the CA is empowered to evaluate the materiality and significance of the evidence alleged to have been
capriciously, whimsically, or arbitrarily disregarded by the NLRC in relation to all other evidence on record
(Paredes v. Feed the Children PHL Inc., G.R. No. 184397, September 9, 2015).

(311) A and B filed a complaint for illegal dismissal against CDE Corp. LA ruled in favor of A and B. NLRC
modified the ruling thereby increasing the monetary awards due to A and B. Dissatisfied, CDE corp.
directly filed a petition for certiorari before the CA. CA denied the petition due to CDE’s failure to file
an MR before the NLRC prior to the filing of the petition for certiorari before the CA. Was CA correct in
dismissing the petition for certiorari?
No, the CA erred in dismissing the petition for certiorari. The direct recourse to the CA was justified. While it is
apparent from the computation of monetary awards that it is just an oversight on the part of the NLRC, it is not
without any implications as such oversight resulted in an unwarranted increase in the monetary awards due to
respondents. Clearly, such an increase is a patent nullity as it is bereft of any factual and/or legal basis. In
labor cases, grave abuse of discretion may be ascribed to the NLRC when its findings and conclusions are not
supported by substantial evidence, which refers to that amount of relevant evidence that a reasonable mind
might accept as adequate to justify a conclusion. Thus, if the NLRC’s ruling has basis in the evidence and the
applicable law and jurisprudence, then no grave abuse of discretion exists and the CA should so declare and,
accordingly, dismiss the petition (Jolo’s Kiddie Carts v. Evelyn A. Caballa and Anthony M. Bautista, G.R. No.
230682, November 29, 2017).

BUREAU OF LABOR RELATIONS (BLR)

(312) Discuss the exclusive and original jurisdiction of the BLR.
The BLR may act on its own initiative or upon the request of either or both parties in the following cases
involving federations, national unions, industry unions, its officers or member organizations: (IIO)
1. Intra-union conflicts;
2. Inter-union conflicts; and
3. Other related labor relations disputes (DO 40-03, RULE XI, Sec. 5).

(313) X, a legal assistant of FFW Legal Center, joined the union of rank-and-file employees and eventually
became the employees’ union president. During the 21st National Convention and Election of National
Officers of FFW, X was nominated for the position of National Vice President. However, FFW COMELEC
informed him that he is not qualified for the position as his candidacy violates the 1998 FFW
Constitution and By-Laws. Despite the same, the convention delegates allowed X’s candidacy. He
emerged victorious and was proclaimed as the National Vice President. Y filed before the BLR a petition
for the nullification of the election of X as FFW National Vice President alleging that X is not qualified
to run for the position because Section 76 of Article XIX of the FFW Constitution and By- Laws prohibits
federation employees from sitting in its Governing Board. X filed a Motion to Dismiss on the ground
that it is the Regional Director of the DOLE and not the BLR who has jurisdiction over the case involving
the provisions of the constitution and by-laws. Is X correct?
No, BLR has jurisdiction over this case. The BLR has jurisdiction over intra-union disputes involving a
federation. Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE
have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or
nullification of election of union and workers association officers. There is no doubt as to the BLRs jurisdiction
over the instant dispute involving member-unions of a federation arising from disagreement over the provisions
of the federation’s constitution and by-laws. Hence, BLR has jurisdiction over the case at bar (Montano v.
Verceles, G.R. No. 168583, July 26, 2010).

(314) A Union, the existing exclusive bargaining agent of B Inc., alleged that B Inc. is guilty of ULP due to
organizing a company union, gross violation of the CBA and violation of their duty to bargain because
of its refusal to remit the collected union dues to A union despite several demands. It filed a complaint
for ULP with the NLRC, but the assigned Labor Arbiter dismissed the complaint for lack of jurisdiction.
Was the action of the Labor Arbiter proper?
No, the action of LA was improper. An intra-union dispute refers to any conflict between and among union
members, including grievances arising from any violation of the rights and conditions of membership, violation
of or disagreement over any provision of the union’s constitution and by-laws, or disputes arising from
chartering or disaffiliation of the union. The issue raised in this case pertained only to the validity of the acts of
management in light of the fact that it still has an existing CBA. Thus, as to B Inc, the question was whether
they were liable for unfair labor practice, which issue was within the jurisdiction of the NLRC. Therefore, the
dismissal of ULP complaint was erroneous (Employees Union of Bayer PHL v. Bayer PHL, Inc., G.R. No.
162943, December 6, 2010).
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NATIONAL CONCILIATION AND MEDIATION BOARD

(315) What is the National Conciliation and Mediation Board (NCMB)?
The NCMB is an agency attached to the Department of Labor and Employment principally in-charge of the
settlement of labor disputes through conciliation, mediation and of the promotion of voluntary approaches to
labor dispute prevention and settlement (2017 Revised NCMB Manual of Procedures For Conciliation and
Preventive Mediation Cases, Rule III, Sec. 1 [23] [hereinafter 2017 Revised NCMB Manual of Procedure]).

NCMB is not a quasi-judicial agency exercising quasi-judicial functions but merely a conciliatory body for the
purpose of facilitating settlement of disputes between parties. Hence, its decision cannot be elevated to the
CA via Rule 43 petition. Rule 43 of the Rules of Court applies only to awards, judgments, final orders or
resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions (Tabigue
v. International Copra Export Corp., G.R. No. 183335, December 23, 2009).

PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION

Note: The 2023 Labor Law Syllabus still includes POEA under Jurisdictions and Reliefs. However, on
December 30, 2021, President Duterte approved RA 11641, otherwise known as the “Department of Migrant
Workers Act”, where the POEA, the Office of the Undersecretary of Migrant Workers’ Affairs (OUMWA), all
Philippine Overseas Labor Offices (POLO), the International Labor Affairs Bureau (ILAB), National
Reintegration Center for OFWs (NRCO), the National Maritime Polytechnic (NMP), and the Office of the Social
Welfare Attaché (OSWA) are consolidated and merged, and thereby constituted as the Department of Migrant
Workers. RA 11641, not being included in the coverage, will not be discussed in this chapter.

(316) What are the cases under the original and exclusive jurisdiction of POEA? (AD) Adjudicatory Functions
(Jurisdiction Retained with POEA):
1. Administrative cases involving violations of licensing rules and regulations and registration of recruitment
and employment agencies or entities; and
2. Disciplinary action cases and other special cases which are administrative in character, involving
employers, principals, contracting partners and Filipino migrant workers (IRR of RA 8042, Rule X, Sec.
6).

(317) Who has appellate jurisdiction over POEA decisions?

POEA decisions on cases within its jurisdiction are appealable to the Secretary of Labor. As specifically
provided in the POEA Rules and Regulations of 2003: “The Secretary shall have the exclusive and original
jurisdiction to act on appeals or petition for review of disciplinary action cases decided by the Administration
[POEA].” The Secretary’s appellate jurisdiction is part of its power of supervision and control recognized in the
Revised Administrative Code of 1987 (Eastern Mediterranean Maritime v. Surio, et al., G.R. No. 154213,
August 23, 2012).

DOLE REGIONAL DIRECTOR

(318) When may the DOLE Regional Director be divested of his jurisdiction under Article 128(b)?
Under the exception clause in Article 128 (b) of the Labor Code, the Regional Director may not be divested of
his jurisdiction over these claims, unless 3 elements concur, namely: (CEN)
1. That the employer Contests the findings of the labor regulation officer and raises issues thereon; That in
order to resolve such issues, there is a need to examine Evidentiary matters; and
2. That such matters are Not verifiable in the normal course of inspection (SSK Parts Corporation v. Camas,
G.R. No. 85934, January 30, 1990).

(319) What is the jurisdiction of the Regional Director for simple money claims?
Labor Arbiters have no jurisdiction over small money claims lodged under Article 129, except when the claim
includes a prayer for reinstatement (LABOR CODE, Art. 224). It must be noted that R.A. No. 7730, or an Act
Further Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor, did away with the
₱5,000 limitation, allowing the DOLE Secretary to exercise its visitorial and enforcement power for claims
beyond ₱5,000. The only qualification to this expanded power of the DOLE was only that there still be an
 76

existing employer-employee relationship (People’s Broadcasting Service v. Secretary of DOLE, G.R. No.
179652, March 6, 2012).

(320) How may the jurisdiction of the Labor Arbiter vis-à-vis that jurisdiction of the Regional Director be
summarized?
1. If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation
regardless of the amount prayed for and provided that there is an existing employer- employee
relationship, jurisdiction is with the DOLE regardless of whether the action was brought about by the filing
of a complaint or not;
2. If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation
regardless of the amount prayed for and there is no existing employer-employee relationship or the claim
is coupled with a prayer for reinstatement, jurisdiction is with the LA/NLRC (Del Monte Land Transport
Bus, Co. v. Armenta, G.R. No. 240144, February 03, 2021, Hernando Case).

For the valid exercise by the DOLE Secretary or any of his duly authorized representatives (DOLE Regional
Directors) of the visitorial and enforcement powers provided under Article 128(b), the following requisites
should concur: (1) The employer-employee relation- ship should still exist; (2) The findings in question were
made in the course of inspection by labor inspectors; and (3) The employees have not yet initiated any claim
or complaint with the DOLE Regional Director under Art. 129, or the Labor Arbiter under Art. 224.

DOLE SECRETARY
(321) What are the requisites for a valid exercise of the visitorial and enforcement powers?
(322) For a valid exercise by the DOLE Secretary or any of his duly authorized representatives of the visitorial and
enforcement powers, the following requisites must concur: (EFN)
1. The Employer-employee relationship should still exist;
2. The Findings in question were made in the course of the inspection by the labor inspectors; and
3. The employee has Not yet initiated any claim or complaint with the DOLE Regional Director under Art.
129, or the LA under Art. 224.

(323) A disciplinary action based on breach of discipline and reimbursement of wage increases was filed by
crew members of XYZ Maritime against XYZ Maritime in the POEA. During the pendency of the action,
RA 8042 took effect vesting in the Labor Arbiters jurisdiction over all money claims arising out of
employer-employee relationship involving OFWs. On the basis thereof, POEA dismissed the complaint.
On appeal, the NLRC dismissed the case claiming to have no jurisdiction over the same. Is the action
of the NLRC proper?
Yes, the action of the NLRC is proper. The NLRC does not have jurisdiction to review on appeal disciplinary
action cases decided by the POEA. RA 8042 did not remove from the POEA the original and exclusive
jurisdiction to hear and decide all disciplinary action cases and other special cases administrative in character
involving such workers. When RA 8042 withheld the appellate jurisdiction of the NLRC in respect of cases
decided by the POEA, the appellate jurisdiction was vested in the Secretary of Labor in accordance with his
power of supervision and control under the Revised Administrative Code of 1987. Therefore, it was proper for
the NLRC to dismiss the case because appellate jurisdiction over disciplinary cases decided by the POEA
belong to the Secretary of Labor (Eastern Mediterranean Maritime LTD v. Surio, G.R. No. 154213, August 23,
2012).

(324) What is a grievance?

A grievance is any question raised by either the employer or the union regarding any of the following issues or
controversies: (CPV)
1. The interpretation or application of the CBA;
2. The interpretation or enforcement of company Personnel policies; or
3. Any claim by either party that the other party is Violating any provisions of the CBA or company personnel
policies (Sec. 1, Rule I, Book V, Rules to Implement the Labor Code).

Note: To be grievable, the violations of the CBA should be simple or ordinary, and not gross in character,
otherwise they shall be considered Unfair Labor Practice which is under the original and exclusive jurisdiction
or the Labor Arbiter (CHAN REVIEWER, supra at 978).

VOLUNTARY ARBITRATOR
 77

(325) What are the powers of a voluntary arbitrator?

The voluntary arbitrator shall have the following powers: (RSTE)
1. Require any person to attend hearing(s);
2. Subpoena witnesses and receive documents when the relevancy of the testimony; and the materiality
thereof has been demonstrated to the arbitrators:
3. Take whatever action is necessary to resolve the issue/s subject of the dispute; and
4. Issue a writ of Execution to enforce final decisions, and, in connection therewith, it shall be his duty to:
(DICE)
a. Determine every question of fact and law which may be involved in the execution;
b. Inquire into the correctness of the execution of the decision;
c. Consider any supervening event during such execution; and
d. Ensure satisfaction of decision (NCMB GUIDELINES, Rule V, Sec. 3).

(326) What are the cases that must be referred to the grievance machinery and voluntary arbitration?
The following are cases which must be disposed of by the Labor Arbiter by referral to the grievance machinery
and voluntary arbitration:
1. Disputes on the interpretation or implementation of CBA; and
2. Disputes on the interpretation or enforcement of company personnel policies (2011 NLRC RULES OF
PROCEDURE, Rule V, Sec. 1).

PRESCRIPTION OF ACTIONS
Cause Period of Prescription

Money Claims 3 years from the accrual of the causes of action (LABOR
CODE, Art. 307)

Illegal Dismissal and 4 years from the accrual of the cause of action (Arriola v.
Reinstatement Pilipino Star Ngayon, Inc., G.R. No. 175689, August 13,
2014; CIVIL CODE, Art. 1146)

ULP 1 year from the accrual of the cause of action (LABOR

CODE, Art. 305)

Offenses Under the 3 years from the time of commission (LABOR CODE,
Labor Code Art. 305)

Actions Involving 3 years from the date of submission of the financial

Funds of the Union report (IRR of LABOR CODE, Book VII, Rule II, Sec. 5)

Illegal Recruitment 5 years from commission if simple (LABOR CODE, Art.

Cases 305); 20 years if involving economic sabotage (Sec. 12,
R.A. No. 8042)

Failure to Remit SSS 20 years from the time the delinquency is known or the
Contributions assessment is made by the SSS, or from the time the
benefit accrues, as the case may be (R.A. No. 11199,
Sec. 22 (b))

Sexual Harassment 3 years (R.A. No. 7877, Sec. 7)

(327) IBM staged a strike against N and after having a series of conciliation meetings IBM and N entered into
a compromise agreement which the NLRC approved. After 11 years, IBM later filed with NLRC a motion
for writ of execution claiming that they have not been paid the amounts they were entitled to because
Nestlé deliberately caused delay in paying their claims. N argued that IBM’s remedy was already barred
by prescription because under the 2005 Revised Rules of the NLRC, a decision or order may be
executed on motion within 5 years from the date it becomes final and executory and that the same
decision or order may only be enforced by independent action within a period of 10 years from the date
of its finality. May an NLRC-approved compromise agreement be executed by filing a motion for writ
of execution after a lapse of 10 years from its finality?
 78

No, the approved compromise agreement may not be executed after the lapse of 10 years. The IBM is already
barred by prescription. Under the law, a decision or order may be executed on motion within five years from
the date it becomes final and executory. After the lapse of such period, the judgment shall become dormant,
and may only be enforced by an independent action within a period of 10 years from date of its finality. IBM’s
right to have the NLRC judgment executed thru a motion and the right of action to enforce the same had
prescribed by the time it filed their Motion for Writ of Execution (Ilaw Buklod ng Manggagawa (IBM) Nestlé PHL
Chapter v. Nestlé PHL, G.R. No. 198675, September 23, 2015).

(328) X was employed by PLDT as a maintenance technician. On April 13, 1999, he was admitted to a hospital
due to paranoid personality disorder caused by financial and marital problems. He was later on
discharged but from September to December, he absented himself from work without official leave due
to his poor mental condition. PLDT terminated his service on January 1, 2000. Between 2001 and 2003,
X made follow-ups with PLDT regarding his benefits. On March 29, 2004, four years later, X filed a
complaint for constructive dismissal and monetary claims against PLDT, but the latter moved for the
dismissal of the complaint for being filed beyond the prescriptive period of three years. Did the action
prescribe?
Yes, the action has already prescribed. The Labor Code has no specific provision on when a claim for illegal
dismissal or a monetary claim accrues. Thus, the general law on prescription applies. Article 1150 of the Civil
Code states that the time for prescription for all kinds of actions, when there is no special provision which
ordains otherwise, shall be counted from the day they may be brought. The day the action may be brought is
the day a claim starts as a legal possibility. In the present case, January 1, 2000, the date X was not allowed
to perform his as a maintenance technician, is the date when the claim accrues. Furthermore, the prescription
is interrupted by (a) the filing of an action; (b) a written extrajudicial demand by the creditor; and (c) a written
acknowledgement of the debt by the debtor. Hence, X’s act of following up his benefits is not considered
interrupting the prescription (PLDT v. Pingol, G.R. No. 182622, September 8, 2010).

(329) Y was the vice-president, manager, and director of ABC Corp. Y was forced to resign by the owner of
ABC Corp. on October 17, 1977 because the latter suffered losses due to lack of market and has
incurred debts caused by a slam in the market. At the time of his resignation, he had unpaid salaries
for 18 months and was not paid his separation pay. Upon Y’s demand for payment, ABC Corp. informed
him it would first settle the money claims of the rank-and-file employees before paying his claims. Y
patiently waited but remained unpaid until his demise. X, in behalf of her deceased husband Y, filed a
complaint against ABC Corp. on September 27, 2002, for non-payment of salaries, separation pay, and
13th month pay. ABC Corp. claims that the action has prescribed for being filed almost five (5) years
from the alleged dismissal of Y. Did the action prescribe?
No, the action has not yet prescribed. Promissory estoppel is a recognized exception to the three-year
prescription enunciated in Art. 291 of the Labor Code. In order to make out a claim of promissory estoppel, a
party bears the burden of establishing the following elements: (1) a promise was reasonably expected to induce
action or forbearance; (2) such promise did, in fact, induce such action or forbearance; and (3) the party
suffered detriment as a result. The elements are present in this case. Y relied on the promise of ABC Corp.
that he would be paid as soon as the claims of all the rank-and-file employees had been paid. If not for this
promise that he had held on to until the time of his death, there is no reason why he would delay filing the
complaint before the LA. Thus, this is an ample justification not to follow the prescriptive period imposed under
Article 291 of the Labor Code (Accessories Specialist v. Albanza, G.R. No. 168985, July 23, 2008).