Labor Laws

Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

Constitutional Basis
The 1987 Constitution is replete with labor-related provisions, but the more
commonly quoted provisions are those found under Section 3, Article XIII, to
wit:

“Section 3. The State shall afford full protection to labor, local or overseas,
organized and unorganized and promote full employment and equality of
employment opportunities for all.

“It shall guarantee the rights of all workers to self-organization, collective

bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.

“The State shall promote the principle of shared responsibility between

workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.

“The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and
the right of enterprises to reasonable returns on investments, and to
expansion and growth.”

• These provisions somewhat sum up what Labor Law is all about.

Through the intervention of the State, a balance has to be attained
between the interests of capital vis-à-vis the interests of the laborer or
worker. With such an aim in mind, the country saw the promulgation
of the Labor Code of the Philippines, which provided for a two-tiered
approach to labor – labor standards and labor relations.

Hence, Books I to IV of the Labor Code is mainly concerned with labor

standards, while the remaining Books V to VI focuses on labor relations.

• Construction in favor of labor – One essential feature of labor laws is

– all doubts in the interpretation and implementation of the provisions
of the Labor Code and other labor-related statutes shall be resolved in
favor of labor (Article 4, New Labor Code). This statutory
pronouncement under the Labor Code underlines the state’s
commitment to the constitutional mandate of providing full
protection to labor since it has affirmed that labor is a primary social
economic force (Section 18, Article II, 1987 Constitution).

• Balance between labor and capital – This constitutional mandate of

construction in favor of labor, however, should not be taken to mean
that capital will always be at the losing end of the equation. This has
to be reconciled with another constitutional mandate to harmonize
and balance the needs and demands from both labor and capital,
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

since capital is recognized as having an indispensable role in national

development (Section 20, Article II, 1987 Constitution). Both are
essential cogs in the wheels of national development and should be
created equally.

Labor laws are there only to protect the rights of Labor against
unscrupulous employers as well as to protect employers from abusive
employees. It should be noted that the protection provided under the
Labor Laws goes both ways, i.e., for the laborer and the employer.

o ILLUSTRATIVE EXAMPLE: One good example to illustrate the

balance between labor and capital is on the matter of
termination of employment. Under our labor laws, a qualified
employee is granted security of tenure, and cannot be removed
except for authorized and legal causes. This does not mean,
however, that an employer is to be burdened with undesirable
employees. The Labor Code provides for the grounds where an
employer can rightfully initiate disciplinary proceedings
against an employee, which necessarily include termination of
employment.

Labor Law Vs Social Legislation

LABOR LAW AND SOCIAL LEGISLATION

LABOR LAWS: These laws govern the rights and obligations of employers and
employees, providing as well for the rules by which such rights and obligations
may be enforced. This field of law is divided into three main areas of concern
– labor standards, labor relations and social legislation.

SOCIAL LEGISLATION: There is a saying that “those who have less in life
should have more in law”. This statement encapsulates what social legislation
is all about. It refers to statutes that level the playing field between employers
and employees. Such laws endeavor to strike a balance between the rights of
workers vis-à-vis the underlying goal of employers to generate profit. More
often than not, the lowly employee or worker is not situated in an equal
footing, so to speak, with powerful and moneyed employers, and thus social
legislation seeks to ensure that workers are afforded what is due them in
terms of salary, benefits, working conditions and the like. Social legislation is
also designed to secure the future of the worker as well as his family because
of what happens to the worker arising from the hazards, incidents or effects
of employment.

Examples of such laws are as follows:

(1) RA 8187 (Paternity Act)

(2) RA 7610 (Special Protection of Children)
(3) RA 7877 (Anti-Sexual Harassment Act)
(4) RA 7655 (Minimum Wage for House helpers)
(5) RA 8042 (Migrant Workers Act)
(6) RA 8282 (Social Security System Law of 1997)
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

(7) RA 8291 (Government Service Insurance System Act of 1997)

(8) RA 7875 (PhilHealth Act)
(9) RA 7641 (Retirement Pay Law)
(10) RA 9231 (Act Against Child Labor)
(11) PD 851 (13th Month Pay Law)

LABOR LAW SOCIAL LEGISLATION

As to Effect on Employment
Directly affects employment Governs the effects of employment (e.g
(e.g wages) compensation for injuries)
As to Purpose
Designed to meet the daily Involves long-range benefits
needs of workers.
As to Coverage
Covers employment for profit or Covers employment for profit or non-
gain. profit
As to Effect on Employee
Affects the work of employee Affects life of employee
As to Payor
Benefits are paid by the Benefits are paid by government
worker’s employer agencies

Labor Standards
The area of labor standards provides for the basic requirement as provided
by law that employers have to provide for their employees whether in the
workplace or in the matter of wages. These minimum requirements are
established in order to protect workers’ rights as well as set the standard in
all business establishments. In short, labor standards provide for the
conditions of employment in any business.

• A matter of right – These minimum standards prescribed by law in

relation to work is a matter of right on the part of the laborer, and
non-compliance by an employer of said minimum standards would
be met with the punitive force of the law.
• Provision for higher but not below the minimum prescribed –
These minimum conditions are normally indicated in an employee’s
employment contract. Some firms or employers even provide for
higher standards than that provided for under the law. What is
important is that the conditions of work, more particularly the
benefits, do not fall below the minimum prescribed under the Labor
Code.
• Workers not covered – These minimum standards prescribed by law
in relation to work applies to employees in all establishments and
undertakings, whether for profit or not, EXCEPT the following:
(a) Government employees;
(b) Managerial employees;
(c) Field personnel;
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

(d) Members of the family of the employer who are dependent on

him for support;
(e) Domestic helpers, or persons in the personal service of another;
and
(f) Workers paid by result.
• Some prescribed minimum conditions – The conditions regarding
employment or work are covered under Book III of the Labor Code,
and are generally categorized into the following:
1. Normal hours of work, including hours worked –
o The Labor Code provides that normal working hours shall not
exceed eight (8) hours a day.
o Hours worked shall include:
a) All time during which an employee is required to be on
duty or to be at a prescribed workplace; and
b) All time during which an employee is suffered or
permitted to work.
o Rest periods of short duration during working hours shall be
counted as hours worked. (Arts. 83 & 84, Labor Code)
o The following are other circumstances relative to normal
working hours as provided in the Labor Code:
a) Compressed Work Week (CWW) is valid, subject to
regulations provided by the Department of Labor and
Employment (DOLE);
b) Health personnel in government service are not covered
by this provision. Their employment benefits are governed
by Republic Act No. 7305;
c) Waiting time is considered hours worked if it is an integral
part of one’s work, or one is engaged by his employer to
wait; and
d) It is considered hours worked when an employee is
required to remain on call in the employer’s premises or
close thereto that he cannot use the time effectively for his
own purpose.
2. Meal periods – The law mandates every employer to give his
employees not less than sixty (60) minutes time-off for their
regular meals (Art. 85, Labor Code).
3. Night Shift Differential – 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 o’clock in the
evening and six o’clock in the morning. (Art. 86, Labor Code).
o Night shift differential pay is given as an incentive because the
employee is rendering work past his supposed bedtime.
4. Overtime work – Work may be performed beyond eight hours a
day provided that the employee is paid, for the overtime work, an
additional compensation equivalent to his regular wage plus at
least twenty-five percent (25%) thereof (Art. 87, Labor Code).
o Overtime on a holiday or rest day – Work performed beyond
eight hours on a holiday or rest day shall be paid an additional
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

compensation equivalent to the rate for the first eight hours

on a holiday or rest day, plus at least thirty percent (30%)
thereof.
o Undertime not offset by overtime – Undertime work on any
particular day shall not be offset by overtime work on any
other day. Permission given to the employee to go on leave on
some other day of the week shall not exempt the employer
from paying the additional compensation required under the
Labor Code (Art. 88, Labor Code).
▪ Rationale: The value paid for overtime work is more
than the value paid for undertime work. If undertime
work is allowed to be offset by overtime work, the
worker will be at a disadvantage.
o Requirement for overtime –
✓ An employee cannot, as a rule, be compelled to render
overtime work for his employer, except only under certain
conditions provided under Article 89 of the Labor Code
when an employee may be required by the employer to
perform emergency overtime work.
✓ It is enough that an employee renders overtime work. An
express instruction from the employer is not a
requirement. However, if overtime work will be rendered
on holidays or rest days, an express instruction from the
employer is required.
5. Right to weekly rest periods – The law mandates 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
twenty-four consecutive hours after every six consecutive normal
work days.
o Factors such as preference of worker, prerogative of employer
and DOLE regulations shall play a part in the determination
when such rest day will be given.
o However, the employer shall respect the preference of
employees as to their weekly rest day when such preference is
based on religious grounds. (Art. 91, Labor Code.)
6. Holiday pay – Holiday pay is a day’s pay given by law to an
employee even if he does not work on a regular or legal holiday as
listed by law. Such grant, however, does not apply to a retail and
service establishment regularly employing less than ten (10)
workers (Art. 94, Labor Code).
o The employer may require an employee to work on any
holiday, but such employee shall be paid compensation
equivalent to twice his regular rate.
o For holiday pay to be compensable, the employee should have
reported for work on the day preceding the holiday.
7. Service incentive leave – Every employee who has rendered at
least one (1) year of service shall be entitled to a yearly service
incentive leave of five (5) days with pay. (Art. 95, Labor Code).
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

o Such grant shall not apply to those who are already enjoying
the benefit, those enjoying vacation leave with pay of at least
five (5) days, and those employed in establishments regularly
employing less than ten (10) employees, or in establishments
exempted from granting this benefit by the Secretary of Labor
after considering the viability or financial condition of such
establishment.
o Service Incentive Leave can be converted to cash if not availed
at the end of the year. This is to encourage continuous work of
the employees.
o Vacation and Sick Leaves are not required by law. It is a
management prerogative.
8. 13th Month Pay – Thirteenth-month pay refers to one-twelfth (1/12)
of the basic salary of an employee within a calendar year.
o All employers are required to pay all their employees,
regardless of the nature of their employment, a thirteenth-
month pay not later than December 24 of every year, provided
that they have worked for at least one (1) month during a
calendar year (P.D. No. 851, 16 December 1975).
o An employee who resigned or was terminated from work at
any time before payment of the 13th month pay, is still entitled
to said pay in proportion to the time he worked during the
year.

Labor Relations
Labor Relations Law refers to laws, rules and regulations which govern the
relationship between employees and their employers, promote the right of
the employees to self-organization and collective bargaining, penalize unfair
labor practice, and provide modes for the settlement of labor disputes such as
conciliation, mediation, grievance machinery, voluntary arbitration and
compulsory arbitration.

MANAGEMENT PREROGATIVE – Management prerogative refers to the right

of management to regulate according to its own discretion and judgment all
aspects of employment, and if practiced properly and in good faith, is
protected by labor laws. Some of the more common management
prerogatives are as follows:

a) Right to selection of employees;

b) Right to discipline employees;
c) Right to prescribe company rules;
d) Right to transfer or re-assign employees; and
e) Right to determine company policy.

Limitations to its exercise – Management prerogative, however, is subject

to limitations provided by the following:

a) Law;
b) Contract or collective bargaining agreements; and
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

c) General principles of fair play and justice.

EMPLOYER-EMPLOYEE RELATIONSHIP

• Importance of determination - The determination of whether

employer-employee relation exists between the parties is very
important.
a. (Entitlement to labor standard benefits (i.e., minimum wages,
hours of work, overtime pay, etc.), or to social benefits under laws
(i.e., social security law, workmen’s compensation law, etc.), or to
termination pay, or to unionism and other labor relations provisions
under the Labor Code, are largely dependent on the existence of
employer-employee relationship between the parties.
b. The existence of employer-employee relationship between the
parties will determine whether the controversy should fall within
the exclusive jurisdiction of the labor agencies or not. If for example
the parties are not employer-employee of each other, respectively,
but perhaps partners or associates, then any dispute between
them will not be covered by the jurisdiction of labor agencies but
by regular courts.
o NLRC – The National Labor Relations Commission is a quasi-
judicial body attached to the Department of Labor and
Employment (DOLE), which is tasked to promote and maintain
industrial peace by resolving labor and management disputes
involving both local and overseas workers through compulsory
arbitration and alternative modes of dispute resolution.
• How established – To establish an employer-employee relationship, a
contract of employment is necessary. This can be in writing, or there
may only be an oral agreement.
• Four-fold test to determine its existence – The usual test to determine
the existence of an employer-employee relationship is the so-called
four-fold test. In applying this test, the existence of four (4) elements
that are determinative of such a relationship are generally considered,
to wit:
a. Right to hire or to the selection and engagement of the employee.
b. Payment of wages and salaries for services.
c. Power of dismissal or the power to impose disciplinary actions.
d. Power to control the employee with respect to the means and
methods by which the work is to be accomplished. This is known
as the “Control Test.”
o Of the above-mentioned elements, the “control test” is
considered the most important element in determining the
existence of employment relation. The “control test” refers to
the employer’s power to control the employee’s conduct not
only as to the result of the work to be done, but also with
respect to the means and methods by which the work is to be
accomplished.
o It should be noted that control by the employer need not be
actually exercised in order to be determinative of an employer-
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

employee relationship. It is sufficient that such power is

reserved to the employer although the use of the same has
never arisen.

AGENCIES CONCERNED WITH LABOR RELATIONS

National Labor Relations Commission – The National Labor Relations

Commission (NLRC) is a quasi-judicial body tasked to promote and maintain
industrial peace based on social justice by resolving labor and management
disputes involving both local and overseas workers through compulsory
arbitration and alternative modes of dispute resolution.

National Reintegration Center for OFWs – Help overseas Filipino Workers to

have long-term goals of having a livelihood project when they go back home
to the Philippines and be reintegrated into society.

Employees’ Compensation Commission – to provide meaningful and

appropriate compensation to workers and their dependents in the event of
work-related contingencies such as sickness, injury, disability or death.

National Conciliation and Mediation Board – The National Conciliation and

Mediation Board (NCMB) formulates policies, develops plans and programs
and sets standards and procedures relative to the promotion of conciliation
and mediation of labor disputes through the preventive mediation,
conciliation and voluntary arbitration.

Overseas Workers Welfare Administration – The Overseas Workers Welfare

Administration (OWWA) is a national government agency vested with the
special function of developing and implementing welfare programs and
services that respond to the needs of its member-OFWs and their families.
Philippine Overseas Employment Administration

Regional Tripartite Wages and Productivity Board – Th e Regional Tripartite

Wages and Productivity Boards may determine and adjust, from time to time,
the minimum wage rates (every 3 years) with a view to improving them.

Occupational Safety and Health Center – Provide a high-quality service to

protect the workers through preventive safety and health policies and
programs.

Technical Education and Skills Development Authority – The government

agency tasked to manage and supervise technical education and skills
development (TESD) in the Philippines.

Professional Regulation Commission – Administers, implements, and

enforce the laws and policies with respect to the regulation and licensing of
the various professions and occupations, including the enhancement and
maintenance of professional and occupational standards and ethics.
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

Overview On Regulation of Recruitment and Placement

Activities
GENERAL PROVISIONS
• Workers – means any member of the labor force, whether employed or
unemployed.
• Recruitment and placement – refer to any act of canvassing, enlisting,
contracting, transporting. utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not: Provided, that
any person or entity which, in any manner, offers or promises for a free
employment to two or more persons shall be deemed engaged in
recruitment and placement.
• Private employment agency – means any person or entity engaged in
the recruitment and placement of workers for a fee which is charged,
directly or indirectly, from the workers or employers or both.
• License – means a document issued by the Department of Labor
authorizing a person or entity to operate a private employment agency.

REGULATIONS OF RECRUITMENT AND PLACEMENT

Who can participate in the recruitment and placement of workers, locally or
overseas?
• Only Filipino Citizens At least 75% owned
and controlled by
• Corporations,
Filipinos.
• Partnerships
• Entities

For local employment - Private employment agency

Requirements for the issuance of license:

• Minimum net worth of P1,000.000.00 - Single proprietorship
• Minimum paid up capital of P1.000.000 - Partnership and corporations
• Must not be disqualified by law or other government rules and
regulations to engage in the business of recruitment and placement of
workers for local employment.

Grounds for disqualification:

• Conviction of illegal recruitment, trafficking in person, anti-child labor
violation, or crimes involving moral turpitude
• Those against whom probable cause or prima face finding of guilt for
illegal recruitment or other related cases exists particularly to owner's or
directors or agencies who have committed illegal recruitment or other
related cases
• Those whose licenses have been previously revoked or cancelled by the
DOLE
• Cooperatives whether registered or not under Cooperative Act of the
Philippines
• Law enforcers, and any official and employee of the DOLE
Sole proprietors of duly licensed agencies are prohibited from securing
another license to engage in recruitment and placement
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

• Sole proprietor. partnership or corporation licensed to engage in

recruitment and placement for local employment are prohibited from
engaging in job contracting or sub-contracting activities.

General Rule:
• Non-transferability of license or authority. No license or authority shall be
used directly or indirectly by any person other than the one in whose
favor it was issued at an place other than that stated in the license or
authority, nor may such license or authority be transferred, conveyed or
assigned to another person or entity.
• Exception:
o Any transfer of business address, appointment or designation of
any agent or representative including the establishment of
additional offices anywhere shall be subject to the prior approval
of the Department of Labor and Employment.

PROHIBITED PRACTICES
• 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 and Employment, or to make a worker pav an amount greater
than that actually received by him as a loan or advance.
• To furnish or publish any false notice or information or document in
relation to recruitment or employment.
• To give any false notice testimony, information or document or commit
an act or misrepresentation for the purpose of securing a license or
authority under this Code:
• 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
• To substitute or alter employment contracts approved and verified by
the Department of Labor and Employment from the time of actual
signing thereof by the parties up to and including the period of
expiration of the same without the approval of the Department of Labor
and Employment.
• To become 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
• 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.
• To influence or attempt to influence any person or entity not to employ
any worker who has not applied for employment through his agency.
• 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:
• To obstruct or attempt to obstruct inspection by the Secretary of Labor
and Emplovment or by his duly authorized representatives.
• To fail to file reports on the status of emplovment. 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 and Employment
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

POWERS OF THE SECRETARY OF LABOR

The Secretary of Labor and Employment shall have the power.
• to suspend or cancel any license or authority to recruit employees for
overseas employment for violation of rules and regulations
• to restrict and regulate the recruitment and placement activities of all
agencies within the coverage of the law,
• to issue orders and promulgate rules and regulations to carry out the
objectives and implement the provisions of the Labor Code
• may at any time inspect the premises. books of accounts and records of
any person or entity
• To require to submit reports regularly on prescribed forms. and act on
any violations.

OVERSEAS RECRUITMENT
• Overseas Employment Development Board.
• Created to undertake, in cooperation with relevant entities and agencies,
a systematic program for overseas employment of Filipino workers in
excess of domestic needs and to protect their rights to fair and equitable
employment practices. It shall have the power and duty:
i. To promote and overseas employment of Filipino workers through a
comprehensive market promotion and development program:
ii. To secure the best possible terms and conditions of employment of
Filipino contract workers on a government-to-government basis and
to ensure compliance therewith;
iii. To recruit and place workers for overseas employment on a
government arrangement and in such other sectors as policy may
dictate: and
iv. To act as secretariat for the Board of Trustees of the Welfare and
Training Fund for Overseas Workers.

General Rule:
• Ban on direct hiring. No employer may hire a Filipino worker for overseas
employment except through the Boards and entities authorized by the
Department of Labor and Emplovment.
• Exception:
o Direct hiring by members of the diplomatic service, officials and
employees of international organizations and such other employers as
may be allowed by the Department and Labor and Emplovment is
exempt from this provision.

• Mandatory remittance of foreign exchange earnings.

o It shall be mandatory for all Filipino workers abroad to remit a portion
of their foreign exchange earnings to their families, dependents,
and/or beneficiaries in the country in accordance with rules and
regulations prescribed by the Secretary of Labor and Employment.

ILLEGAL RECRUITMENT
• What is illegal recruitment?
o Any act of canvassing, enlisting. contracting, transporting. utilizing.
hiring. or procuring workers and includes referring. contract services,
promising or advertising for employment abroad, whether for profit
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

or not, when undertaking by a non-licensee or non-holder of

authority.
• When is illegal recruitment committed?
o Those undertaken in any form or manner by non-licensees or non-
holders of authority:
o Those undertaken by licensee or holders of authority:
▪ Participation in the exaction of money, goods and/or services in
consideration of employment in an amount exceeding that
authorized by law or appropriate regulations: and
▪ Participation in the recruitment. placement or deployment of any
worker under false pretense or false documentation.

NON-RESIDENT ALIEN EMPLOYEES

1. Summary
• Foreigners or non-resident aliens are required to obtain an alien
employment permit (AEP) prior to working in the Philippines.
• They are prohibited from transferring employment without prior
approval from the DOLE Secretary.
• An employment contract is void if there is no alien employment
permit.
2. Concept
• Any foreigner or alien seeking admission to the Philippines for
employment purposes and any domestic or foreign employer who
desires to engage an alien for employment in the Philippines shall
obtain an alien employment permit (AEP) from the Department of
Labor and Employment. (Article 40, Labor Code)
3. Requirements
• The employment permit may be issued to a non-resident alien or to
the applicant employer after a determination of the non-availability of
a person in the Philippines who is competent, able, and willing at the
time of application to perform the services for which the alien is
desired. (Paragraph 2, Article 40, Ibid.)
• For an enterprise registered in preferred areas of investments, said
alien employment permit may be issued upon recommendation of the
government agency charged with the supervision of said registered
enterprise.

Employees
KINDS OF EMPLOYEES

REGULAR EMPLOYEES – Typically, regular employees are those who are

entitled to benefits such as: SSS, Pag-IBIG, PhilHealth, 13th month pay, holiday
pay, overtime pay, vacation leave, and other benefits provided by law.

• Regular employees by nature of work – It is commonly believed that all

employees must serve at least six months before they become regular.
This is untrue. Under the Labor Code, so long as an employee performs
any function that is necessary and desirable in the ordinary course of
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

business, then such employee is deemed regular regardless of the term of

his service. The only way to prevent such an employee from becoming
regular on his first day would be to hire him on a probationary basis.
• Regular employees by years of service – Any employee who has rendered
at least one year of service, whether continuous or intermittent, is deemed
regular with respect to the activity he performed and while such activity
exists (Art. 281, Labor Code).
• Security of tenure – Regular employees enjoy security of tenure. Their
employment may only be terminated for just causes or authorized causes
set out in the law. In addition, regular employees enjoy procedural due
process, where the employee must be informed of the grounds for
termination and be given the opportunity to present his defense or
evidence. Thereafter, the employee must be notified of the employer’s
decision to terminate his services. This is also referred to as the “two-notice
rule” where the employer must send a first notice to the erring employee
composed of the formal charge and the opportunity to defend himself.
The second notice is the notice of termination.

PROBATIONARY EMPLOYEES – Probationary employees are those hired for a

trial (or probationary) period during which the employee must demonstrate
the ability to perform the job for which he has been hired. Upon doing so, at
the end of the probationary period, the employee becomes a regular
employee.

• Probationary period – Under the law, (a) a probationary period must not
exceed six (6) months and (b) at the start of this period, the employer must
inform the employee of the standard by which his performance will be
evaluated. If any of these requirements are not met, then the probationary
employment is void and the employee is deemed regular from day one. It
is advisable therefore to properly document the probationary
employment to ensure that all legal requirements have been met.
• Security of tenure – It is important to remember that probationary
employees also enjoy security of tenure during the probationary period,
and the employment may not be terminated without a substantive reason
and compliance with the aforementioned two-notice rule.

CONTRACTUAL EMPLOYEES – Contractual employees are employees whose

period and condition of employment are dependent on the provisions of their
contract. The Labor Code does not explicitly permit contractual or fixed-term
employment, but the courts have ruled that so long as the term in the
contract is not used to pre-emptively end the employment and deny the
employee’s security of tenure, then it is valid.

• Security of tenure – It should be noted that contractual or fixed-term

employees enjoy the right to security of tenure while the contract is in
effect.

SEASONAL and PROJECT EMPLOYEES – Seasonal employees are employed

for seasonal work. Project employees are called to work only for the
accomplishment of a particular project. The period of employment is co-
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

terminus with the season or the project. In both cases, the employment is for
a temporary period at the end of which the employee ceases to work for the
employer.

• Security of tenure – During the seasonal or project employment, the

employee enjoys security of tenure and may not be terminated without
cause.

TERMINATION OF EMPLOYMENT

Termination of employment refers to the cessation of the services of the

employee by management either through just or authorized causes. The
employee’s constitutional right to security of tenure, wherein the employer
cannot terminate his services without just or authorized causes, applies both
to regular and non-regular employees.

A. Just causes for termination. – Under Article 297 of the Labor Code, the
employer may terminate the services of the employee under the following
just causes:
▪ Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his
work;
▪ Gross and habitual neglect by the employee of his duties;
▪ Fraud or willful breach by the employee of the trust reposed in him by
his employer or duly authorized representative;
▪ Commission of a crime or offense by the employee against the person
of his employer or any immediate member of his family or his duly
authorized representative; and
▪ Other causes analogous to the foregoing.
B. Authorized causes for termination. – An authorized cause refers to an
economic circumstance not due to the employee’s fault. Under Article 298
the employer is authorized to terminate the employment of an employee
due to the following authorized causes:
▪ Installation of labor-saving devices, also known as
“Automation/Robotics”;
▪ Redundancy;
▪ Retrenchment to prevent losses; and
▪ Closure or cessation of business
C. Precondition to valid termination.
1. Due process in case of just causes; the “two-notice rule” – The employer
is required by law to furnish employees with two written notices before
termination of their employment due to any of the just causes under
Article 297 of the Labor Code. Thus, the following steps must be
observed; otherwise, the dismissal is illegal:
o The first written notice to be served on the employees should
contain the specific causes or grounds for termination against
them, and a directive that employees are given the opportunity to
submit their written explanation within a reasonable period. The
notice should specifically mention which company rules, if any, are
Labor Laws
Intro to Law | Atty. Hannah Barrantes | Compiled by Lourdes ☆彡 ☆ミ

violated and/or which among the grounds under Article 297 of the
Labor Code is being charged against the employees.
o After serving the first notice, the employees should schedule and
conduct a hearing or conference wherein the employees will be
given the opportunity to (a) explain and clarify their defense to the
charge against them; (b) present evidence in support of their
defense; and (c) rebut the evidence presented against them by the
management. During the hearing or conference, the employees
are given the chance to defend themselves personally, with the
assistance of a representative or counsel of their choice.
o After determining that termination is justified, the employer shall
serve the employees a written notice of termination indicating
that: (a) all the circumstances involving the charge against the
employees have been considered; and (b) grounds have been
established to justify the severance of their employment.
2. Due process in case of authorized causes – To affect the termination of
any employee for any of the authorized causes, the employer must
serve a WRITTEN NOTICE on the worker and the Department of Labor
and Employment at least one (1) month before the intended date
thereof.

SOURCES:

1. Module

2. MemAid

3.https://www.projectjurisprudence.com/2019/06/labor-law-v-social-legislation.html

https://www.dole9portal.com/attached-agencies/

https://laborlaw.ph/non-resident-alien-employees/10793/