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LAST-MINUTE NOTES FOR THE 2023 BAR EXAM IN LABOR LAW|Based on the topics prescribed in the 2023 Bar Syllabus
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UPDATED LAST-MINUTE NOTES FOR THE
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2023 BAR EXAM IN LABOR LAW
Based on the topics prescribed
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in the 2023 Bar Syllabus
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www.chanroblesbar.com
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MAJOR TOPIC 1
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BASIC PRINCIPLES
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A. LEGAL BASIS
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1. 1987 Constitution
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• Under Article II (Declaration of Principles and State Policies):
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1) “Section 18. The State affirms labor as a primary social economic force. It shall
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protect the rights of workers and promote their welfare.”
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This provision is invoked by the Supreme Court when it affirms the interest, rights
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and welfare of labor. Example: When the SC nullifies a patently illegal provision in
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an employment contract or when it invalidates a Quitclaim executed by a

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worker because of unconscionably low consideration.

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• Under Article III (Bill of Rights):

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a. Freedom of speech, of expression, or of the press, or the right of the people

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peaceably to assemble and petition the government for redress of

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This freedom guaranteed under Article III, Section 4 of the constitution is RELEVANT
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ONLY IN CONNECTION WITH PICKETING and NOT IN RELATION TO STRIKE which has
a different constitutional basis (Article XIII, Section 3).
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b. Right of public and private sector employees to form unions, associations, or

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societies for purposes not contrary to law shall not be abridged.

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This is known as “freedom of association.” This provision is the basis for the
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employees’ right to self-organization.

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c. Non-impairment of obligations of contracts.

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The concept of this right in political law is similar in labor law.
d. Right to speedy disposition of cases in judicial, quasi-judicial or administrative

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bodies.
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This can be invoked in labor cases at all levels, to wit:
(1) Before quasi-judicial or administrative bodies, such as:

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a) Labor Arbiters, NLRC;

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b) Med-Arbiters/BLR;
c) DOLE Regional Directors/DOLE Secretary; and
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d) Voluntary Arbitrators.
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(2) Before judicial bodies, such as:
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a) Court of Appeals; and
b) Supreme Court,
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when labor cases reach these higher level courts.
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e. Prohibition against involuntary servitude.
This principle is relevant only in two (2) situations, namely: (1) RESIGNATION AND
(2) RETURN-TO-WORK ORDER
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IN NATIONAL INTEREST CASES.
This means that:

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(1) An employee has the right to resign since he cannot be forced to work
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against his will;

(2) The moment an assumption of jurisdiction order (AJO) is issued by the DOLE
Secretary in national interest cases, a striker can be ordered to return to work
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even against his will in case at the time of such issuance of the AJO, there
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was already an on-going strike; and
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(3) When employees are called upon to render military or civic duty.
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• Under Article XIII, Section 3 (Social Justice and Human Rights):
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a) Full protection to labor, local and overseas, organized and unorganized;

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b) Promotion of full employment;
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c) Promotion of equality of employment opportunities for all;

d) Guarantee of the rights of all workers to:
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1. self-organization;
2. collective bargaining and negotiations;
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3. peaceful concerted activities, including the right to strike in accordance

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with law;
4. security of tenure;
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5. humane conditions of work;

6. a living wage; r
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7. participate in policy and decision-making processes affecting their rights

and benefits as may be provided by law.
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e) Promotion of the principle of shared responsibility between workers and

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employers and the preferential use of voluntary modes in settling disputes,

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including conciliation, and shall enforce their mutual compliance therewith to

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foster industrial peace.

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f) Regulation of the relations between workers and employers, recognizing the

right of labor to its just share in the fruits of production and the right of
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enterprises to reasonable returns to investments, and to expansion and

growth.
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2. Civil Code
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• Under Article 1700 of the Civil Code:

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“Art. 1700. The relations between capital and labor are not
merely contractual. They are so impressed with public interest
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that labor contracts must yield to the common good.

Therefore, such contracts are subject to the special laws on
labor unions, collective bargaining, strikes and lockouts, closed
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shop, wages, working conditions, hours of labor and similar

subjects.”
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In Davao Integrated Port Stevedoring Services v. Abarquez (March 19, 1993).

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It was held that a CBA, as a labor contract within the contemplation of Article
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1700 of the Civil Code, is not merely contractual in nature but impressed with
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public interest, thus, it must yield to the common good.
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Similarly, an employment contract or any other labor contract is treated as
not merely contractual in nature similar to an ordinary contract like a lease
contract because it is impressed with public interest. Consequently, all labor laws
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are deemed read or incorporated therein even if not so expressly provided or
stipulated in its provisions.
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• Article 1702 of the Civil Code.
(See discussion below of Article 1702 of the Civil Code, in relation to Article 4 of
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the Labor Code regarding the rule on interpretation and construction provisions
of law and labor contracts).
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3. Labor Code
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• Under Article 3 of Labor Code:

a) Full protection to labor;
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b) Promotion of full employment;
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c) Promotion of equal work opportunities regardless of sex, race or creed;
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d) Regulation of the relations between workers and employers;
e) Protection of the rights of workers to:
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1. self-organization;
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2. collective bargaining;
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3. security of tenure; and

4. just and humane conditions of work.
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B. STATE POLICY TOWARDS LABOR

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1. Security of tenure
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• Refer to Article 3 of the Labor Code and Article XIII, Section 3 of the 1987
Constitution, as discussed above.
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2. Social justice r
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• R.A. No. 6657, (“Comprehensive Agrarian Reform Law”) Section 2:

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“It is the policy of the State to pursue a Comprehensive Agrarian Reform Program
(CARP). The welfare of the landless farmers and farmworkers will receive the highest
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consideration to promote social justice and to move the nation toward sound rural
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development and industrialization, and the establishment of owner cultivatorship

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of economic-size farms as the bass of Philippine agrculture.”

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• Article II, Section 9 of the 1987 Constitution:

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“The State shall promote a just and dynamic social order that will ensure the
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prosperity and independence of the nation and free the people from poverty
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through policies that provide adequate social services, promote full employment,
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a rising standard of living, and an improved quality of life for all.”

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• Article II, Section 10 of the 1987 Constitution

“The State shall promote social justice in all phases of national development.”
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• See also Article XIII, Section 3 of the 1987 Constitution, as discussed above.
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3. Equal work opportunities

• Article XIII, Section 14 of the 1987 Constitution
“The State shall protect working women by providing safe and healthful working
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conditions, taking into account their maternal functions, and such facilities and
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opportunities that will enhance their welfare and enable them to realize their full
potential in the service of the nation”
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• See also Article II, Section 9 of the 1987 Constitution as discussed
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above.
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4. Right to self-organization and collective bargaining
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• Article III, Section 8 of the 1987 Constitution
“The right of the people, including those employed in the public and private
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sectors, to form unions, associations, or societies for purposes not contrary to law,
shall not be abridged.”
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Article 257 [246] speaks of the principle of non-abridgment of the right to self-
organization as follows:
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“Article 257 [246]. Non-Abridgment of Right to Self-Organization. – It shall be
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unlawful for any person to restrain, coerce, discriminate against or unduly

interfere with employees and workers in their exercise of the right to self-
organization. Such right shall include the right to form, join, or assist labor
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organizations for the purpose of collective bargaining through representatives of
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their own choosing and to engage in lawful concerted activities for the same
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purpose or for their mutual aid and protection, subject to the provisions of Article
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279 [264] of this Code.”
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• See also Article 3 of the Labor Code and Article XIII, Section 3 of the 1987
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Constitution, as discussed above.

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5. Construction in favor of labor

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• Under Article 1702 of the Civil Code.

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“Article 1702. In case of doubt, all labor legislation and all labor contracts shall
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be construed in favor of the safety and decent living for the laborer.”
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• Article 4 of the Labor Code.

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“Article 4. Construction in Favor of Labor. – All doubts in the implementation and

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interpretation of the provisions of this Code, including its implementing rules and
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regulations, shall be resolved in favor of labor.”

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• Follow this rule in interpreting and construing the following:

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a. DOUBTS OR AMBIGUITIES IN LABOR CONTRACTS such as employment

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contract and collective bargaining agreement (CBA); or

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b. DOUBTS OR AMBIGUITIES IN EVIDENCE in labor cases.

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Thus, where contracts, evidence, or provisions of the law leave no room for doubt
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either in their interpretation or application, Article 4 of the Labor Code and Article
1702 of the Civil Code does not apply.
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6. Burden of proof and quantum of evidence

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• Burden of Proof in Illegal Dismissal Cases

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o Generally, the burden rests on the employer to prove that the dismissal of
an employee is for a just or authorized cause (Article 292(b) [277(b)] of the
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Labor Code).
o When burden of proof is on the employee: The rule does not apply if the facts
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and the evidence do not establish a prima facie case that the employee
was dismissed from employment. Before the employer must bear the burden
of proving that the dismissal was legal, the employee must first establish by
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substantial evidence the fact of his dismissal from service.

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• Burden of Proof in Monetary Claims Cases
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o As a general rule, in monetary claims cases, a party who alleges payment as
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a defense has the burden of proving it. (Our Haus Realty Development
Corporation v. Parian, G.R. No. 204651, Aug. 06, 2014)
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o Particularly, the burden rests on the employer to prove payment, rather than
on the employees to prove non-payment. (Heirs of Manuel H. Ridad v.
Gregorio Araneta University Foundation, G.R. No. 188659, Feb. 13, 2013).
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• Quantum of Evidence: Substantial Evidence
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o Section 5, Rule 133 of the Rules of Court provides that “in cases filed before
administrative or quasi-judicial bodies, a fact may be deemed established if
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it is supported by substantial evidence, or that amount of relevant evidence
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which a reasonable mind might accept as adequate to justify a conclusion.”

o Substantial evidence is defined as Evidence that a reasonable mind might
accept as adequate to support a conclusion. (China City Restaurant v.
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NLRC, G.R. No. 97196, Jan. 22, 1993, 217 SCRA 451.) It does not necessarily
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import preponderant evidence, as is required in an ordinary civil case. It has
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been defined to be such relevant evidence as a reasonable mind might
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accept as adequate to support a conclusion.( Spouses Giron v. Obiacoro,
CV-331l5, Sept. 28,1994)
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• Important principles to remember:

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o All administrative determinations require only substantial proof and not clear
and convincing evidence. However, this should not be construed to mean
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just like any form or kind of evidence; it must be relevant evidence as a

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reasonable mind might accept as adequate to support a conclusion.

o Remember that in the hierarchy of evidentiary values, proof beyond
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reasonable doubt is at the highest level and substantial evidence is the least
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demanding in the hierarchy of evidence.

o If doubts exist between the evidence presented by the employer and the
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employee, the scales of justice must be tilted in favor of the latter.

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5
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MAJOR TOPIC 2
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PRE-EMPLOYMENT
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A. RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT WORKERS
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1. Definition of Recruitment and Placement
• any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
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procuring workers, and includes referrals, contract services, promising or
advertising for local employment, whether for profit or not; provided, that any
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person or entity which in any manner, offers or promises employment for a fee,
to two or more persons shall be deemed engaged in recruitment and
placement.
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2. Regulation of Recruitment and Placement Activities
a. Regulatory Authorities
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1. Philippine Overseas Employment Administration (POEA)
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Jurisdiction of POEA:
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(a) Recruitment violations and other related cases. - All cases which are
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administrative in character, involving or arising out of violation of rules and
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regulations relating to licensing and registration of recruitment and
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employment agencies or entities, including refund of fees collected from

workers and violation of the conditions for the issuance of license to recruit
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workers.
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(b) Disciplinary action cases and other special cases which are administrative
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in character, involving employers, principals, contracting partners and

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Filipino migrant workers.

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It must be noted that the POEA ceased to have any jurisdiction over money claims
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of OFWs, or those arising out of an employer-employee relationship or by virtue of

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any law or contract involving Filipino workers for overseas deployment including
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claims for actual, moral, exemplary and other forms of damages. The jurisdiction
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over these claims was transferred to the Labor Arbiters of the NLRC by virtue of
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Section 10 of R.A. No. 8042, as amended. Hence, appeals therefrom may be

instituted to the Commission (NLRC).
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See also the discussion under Major Topic 5, Section H – DOLE Secretary
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2. Regulatory and Visitorial Powers of the Department of Labor and

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Employment Secretary
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See the discussion under Major Topic 5, Section H – DOLE Secretary

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b. Ban on Direct Hiring

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• What is direct hiring?

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“Direct Hiring” refers to the process of directly hiring workers by employers for
overseas employment as authorized by the DOLE Secretary and processed by the
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POEA, including:
1. Those hired by international organizations;
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2. Those hired by members of the diplomatic corps;

3. Name hires or workers who are able to secure overseas employment
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opportunity with an employer without the assistance or participation of any

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agency.
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• Does the POEA Administrator or the DOLE Secretary or DOLE Regional Director
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have the power to issue closure order?
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Yes. If upon preliminary examination or surveillance, the DOLE Secretary, the POEA
Administrator or DOLE Regional Director is satisfied that such danger or exploitation
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exists, a written order may be issued for the closure of the establishment being used
for illegal recruitment activity.
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• Does the DOLE Secretary have the power to issue warrant of arrest and search
and seizure orders?
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No. Salazar v. Achacoso, (March 14, 1990) declared that the exercise by the DOLE
Secretary of his twin powers to issue arrest warrant and search and seizure orders
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provided under Article 38[c] of the Labor Code is unconstitutional. Only regular
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courts can issue such orders.
c. Entities Prohibited from Recruiting

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• For overseas employment:
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o Travel agencies and sales agencies of airline companies, whether the
recruitment and placement is for profit or not, including the following:
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▪ Officers or members of the Board of any corporation or partners in a
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partnership engaged in the business of a travel agency; and

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▪ Corporations and partnerships, where any of its officers, members of the
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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
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agency.
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▪ Individuals, partners, officers or directors of an insurance company who

make, propose or provide an insurance contract under the compulsory
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insurance coverage for agency-hired OFWs or seafarers;

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▪ In case of sea-based OFWs, if the applicant is presently an incorporator,

director or key officer of at least five (5) licensed manning agencies;
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▪ Sole proprietors, partners or officers and members of the board with

derogatory records, such as, but not limited to, the following: r
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1. Those convicted, or against whom probable cause or prima facie

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finding of guilt is determined by a competent authority, for illegal

recruitment, or for other related crimes or offenses committed in the
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course of, related to, or resulting from, illegal recruitment, or for crimes
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involving moral turpitude;

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2. Those agencies whose licenses have been revoked for violation of R.A.
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8042 (Migrant Workers and Overseas Filipinos Act of 1995), as amended,

P.D. 442 (Labor Code of the Philippines), as amended, and R.A. 9208
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(Trafficking in Persons Act of 2003), as amended, and their implementing

rules and regulations;
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3. Those agencies whose licenses have been cancelled, or those who,

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pursuant to the Order of the Administrator, were included in the list of

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persons with derogatory record for violation of recruitment laws and

regulations; and
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▪ Any official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH,
BI, IC, NLRC, TESDA, CFO, NBI, PNP, Civil Aviation Authority of the
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Philippines (CAAP), MARINA, international airport authorities, and other

government agencies directly involved in the implementation of R.A.
8042, as amended, and/or any of his/her relatives within the fourth civil
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degree of consanguinity or affinity;

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▪ Immigration consultants. However, they may engage in recruitment

and placement activities if they obtain a license from the POEA.
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d. Suspension or Cancellation of License or Authority
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• License vs. Authority
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o What is a “license” for overseas recruitment?
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“License” refers to the document issued by the DOLE Secretary authorizing
a person, partnership or corporation to operate a private recruitment or
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manning agency.
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o What is an “authority” for overseas employment?
“Authority” refers to the document issued by the DOLE Secretary authorizing

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the officers, personnel, agents or representatives of a licensed recruitment or
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manning agency to conduct recruitment and placement activities in a place

stated in the license or in a specified place.
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• Article 35 of the Labor Code grants the DOLE Secretary the power to suspend or
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cancel any license or authority to recruit employees for overseas employment
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on the general ground of violation of rules and regulations issued by the DOLE
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and the POEA, or for violation of the Labor Code and other applicable laws.
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• Pursuant to the rule-making power of the DOLE Secretary, POEA was given authority
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to conduct the necessary proceedings for the suspension or cancellation of the

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license or authority of any agency or entity for certain enumerated offenses. This is
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also reflected in the 2016 Revised POEA Rules and Regulations Governing the
Recruitment and Employment of Land-Based Overseas Filipino Workers of 2016
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which provides that POEA, in the exercise of its adjudicatory power, is granted
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the authority to impose the penalty of reprimand, suspension, cancellation, or

revocation of license for pre-employment/recruitment violation cases. Where
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the penalty of suspension is imposed, the POEA Administrator may impose

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disqualification from the overseas employment program.

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• Illegal recruitment may be committed by any of the following:

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o By Non-Licensee or Non-holder of authority; or

o By ANY PERSON, regardless of whether a non-licensee, non-holder,
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licensee or holder of authority,

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e. Prohibited Practices [Article 34, Labor Code]

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• What are illegal recruitment acts that can be committed by NON-LICENSEE or

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NON-HOLDER OF AUTHORITY?
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When what is committed by such NON-LICENSEES or NON-HOLDERS OF

AUTHORITY is any of the acts of recruitment allowed only to be done by licensees
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or holders of authority such as the act of canvassing, enlisting, contracting,

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transporting, utilizing, hiring, or procuring workers and includes referring, contract

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services, promising or advertising for employment abroad, whether for profit or not.
In other words, had they possessed of license or authority, their commission
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of any of the foregoing acts could have been valid and not constitutive of
illegal recruitment.
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NOTE: The non-licensee or non-holder of authority is presumed to be

engaged in such recruitment if he, in any manner, offers or promises for a fee
employment abroad to two or more persons.
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• What are acts of illegal recruitment when committed by ANY PERSON,
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whether a NON-LICENSEE, NON-HOLDER OF AUTHORITY or even by a LICENSEE
or HOLDER OF AUTHORITY?
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(a) To charge or accept, directly or indirectly, any amount greater than that
specified in the schedule of allowable fees prescribed by the DOLE
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Secretary, or to make a worker pay or acknowledge any amount
greater than that actually received by him as a loan or advance;
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(b) To furnish or publish any false notice or information or document in
relation to recruitment or employment;
(c) To give any false notice, testimony, information or document or commit
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any act of misrepresentation for the purpose of securing a license or
authority under the Labor Code, or for the purpose of documenting
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hired workers with the POEA, which include the act of reprocessing
workers through a job order that pertains to non-existent work, work
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different from the actual overseas work, or work with a different

employer whether registered or not with the POEA;
(d) To induce or attempt to induce a worker already employed to quit his
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employment in order to offer him another unless the transfer is designed
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to liberate a worker from oppressive terms and conditions of
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employment;
(e) To influence or attempt to influence any person or entity not to employ
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any worker who has not applied for employment through his agency or
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who has formed, joined or supported, or has contacted or is supported
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by any union or workers' organization;
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(f) 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
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Philippines;
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(g) To fail to submit reports on the status of employment, placement

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vacancies, remittance of foreign exchange earnings, separation from

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jobs, departures and such other matters or information as may be

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required by the Secretary of Labor and Employment;

(h) To substitute or alter to the prejudice of the worker, employment
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contracts approved and verified by the DOLE from the time of actual
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signing thereof by the parties up to and including the period of the

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expiration of the same without the approval of the DOLE;

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(i) For an officer or agent of a recruitment or placement agency to

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become an officer or member of the Board of any corporation

engaged in travel agency or to be engaged directly or indirectly in the
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management of travel agency;

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(j) To withhold or deny travel documents from applicant workers before

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departure for monetary or financial considerations, or for any other

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reasons, other than those authorized under the Labor Code and its
implementing rules and regulations;
(k) Failure to actually deploy a contracted worker without valid reason as
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determined by the Department of Labor and Employment;

(l) Failure to reimburse expenses incurred by the worker in connection with
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his documentation and processing for purposes of deployment, in cases

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where the deployment does not actually take place without the
worker's fault. Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving economic
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sabotage; and
(m) To allow a non-Filipino citizen to head or manage a licensed
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recruitment/manning agency.”
3. Illegal recruitment and other prohibited activities
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a. Elements and Types of Illegal Recruitment

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The essential elements of illegal recruitment vary in accordance with the following
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classifications:
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(1) Simple illegal recruitment;
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(2) When committed by a syndicate; or
(3) When committed in large scale.
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When illegal recruitment is committed under either Nos. 2 or 3 above or both, it is
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considered an offense involving economic sabotage.
Simple Illegal Recruitment
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• What are the 2 elements of simple illegal recruitment?
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The offender has no valid license or authority required by law to enable
one to lawfully engage in recruitment and placement of workers; and
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(2) He undertakes either any activity within the meaning of “recruitment and
placement” defined under Article 13(b), (see above enumeration) or any
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prohibited practices (see above enumeration) under Article 34 of the Labor

Code.
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• Can a recruiter be a natural or juridical person?
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Yes.
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• What are some relevant principles on illegal recruitment?
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1. Mere impression that a person could deploy workers overseas is sufficient to
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constitute illegal recruitment. But if no such impression is given, the accused
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should not be convicted for illegal recruitment.
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2. Mere promise or offer of employment abroad amounts to recruitment.

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3. There is no need to show that accused represented himself as a licensed
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recruiter.
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4. Referrals may constitute illegal recruitment.

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5. It is illegal recruitment to induce applicants to part with their money upon false
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misrepresentations and promises in assuring them that after they paid the
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placement fee, jobs abroad were waiting for them and that they would be
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deployed soon.
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6. Recruitment whether done for profit or not is immaterial.

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7. The act of receiving money far exceeding the amount as required by law is
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not considered as “recruitment and placement” as this phrase is

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contemplated under the law.

8. Actual receipt of fee is not an element of the crime of illegal recruitment.
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9. Conduct of interviews amounts to illegal recruitment.

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10. Absence of receipt is not essential to hold a person guilty of illegal recruitment.
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11. Conviction for illegal recruitment may be made on the strength of the
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testimonies of the complainants.

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12. Absence of documents evidencing the recruitment activities strengthens, not

weakens, the case for illegal recruitment.
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13. Only one person recruited is sufficient to convict one for illegal recruitment.
14. Non-prosecution of another suspect is immaterial.
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15. Execution of affidavit of desistance affects only the civil liability but has no
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effect on the criminal liability for illegal recruitment.

16. Defense of denial cannot prevail over positive identification. Positive
identification where categorical and consistent and not attended by any
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showing of ill motive on the part of the eyewitnesses on the matter prevails
over alibi and denial. Between the categorical statements of the prosecution
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witnesses, on the one hand, and bare denials of the accused, on the other
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hand, the former must prevail.

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Illegal Recruitment as a Form of Economic Sabotage

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• When is illegal recruitment considered a crime involving economic sabotage?

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1. When committed by a syndicate; or

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2. When committed in large scale.
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Note: the figure three (3) makes the difference, thus:
ie
✓ 3 or more recruiters regardless of no. of recruitees = by a syndicate
✓ 3 or more recruitees regardless of no. of recruiters = in large scale
ev
• When is illegal recruitment committed by a syndicate?
R
If it is carried out by a group of three (3) or more persons conspiring or
confederating with one another.
•
al
Elements of illegal recruitment by a syndicate.
n
The essential elements of the crime of illegal recruitment committed by a syndicate
are as follows:
io
1. There are at least three (3) persons who, conspiring and/or confederating
with one another, carried out any unlawful or illegal recruitment and
placement activities as defined under Article 13(b) or committed any
ss
e
prohibited activities under Article 34 of the Labor Code; and
i
2. Said persons are not licensed or authorized to do so, either locally or overseas.
fe
ev
The law does not require that the syndicate should recruit more than one (1)
o
person in order to constitute the crime of illegal recruitment by a syndicate.
R
Recruitment of one (1) person would suffice to qualify the illegal recruitment act
r
Pr
as having been committed by a syndicate.
r
Ba
• When is illegal recruitment considered in large scale?

Ba
s
If committed against three (3) or more persons individually or as a group.

es
• Elements of illegal recruitment in large scale.

bl
The elements of illegal recruitment in large scale, as distinguished from simple illegal
li
recruitment, are as follows:

o
r
n
1. The accused engages in the recruitment and placement of workers as

Ba
R
defined under Article 13(b) or committed any prohibited activities under

O
an
Article 34 of the Labor Code; and

2. The accused commits the same against three (3) or more persons,
et
individually or as a group.
es
h
• Illegal recruitment by large scale as distinguished from illegal recruitment by a

rn
syndicate.
bl
C
As distinguished from illegal recruitment committed by a syndicate, illegal

o
recruitment in large scale may be committed by only one (1) person. What is
te
important as qualifying element is that there should be at least three (3) victims of
R
such illegal recruitment, individually or as a group.

In
an
• Recruitment in large scale or by a syndicate is malum prohibitum and not malum

in se.
es
h
b. Illegal recruitment vs. estafa

C
It must be stressed that not all acts which constitute the felony of estafa under the
bl
Revised Penal Code necessarily establish the crime of illegal recruitment under the
Labor Code. Estafa is wider in scope and covers deceits, whether related or not
o
related to recruitment activities.

R
Illegal recruitment is malum prohibitum while estafa is malum in se. Additionally, in

illegal recruitment, the criminal intent of the accused is not necessary for conviction;
an
11
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,I
Legal Practitioner
the fact alone that the accused violated the law warrants his conviction. On the other
w
hand, intent is imperative for conviction of the crime of estafa.
ie
• Can a person be charged and convicted separately for illegal recruitment and
estafa involving one and the same act of recruitment?
ev
Yes. It is clear that conviction under the Labor Code does not preclude conviction
for estafa or other crimes under other laws.
R
• Some relevant principles:
o Same evidence to prove illegal recruitment may be used to prove estafa. It
al
is thus enough to show that the recruiter and his cohort acted with unity of
purpose in defrauding the victims by misrepresenting that they had the
n
power, influence, agency and business to obtain overseas employment for
them upon payment of a placement fee, which they did pay and deliver to
io
the recruiter.
o Conviction for both illegal recruitment and estafa is not double jeopardy.
ss
e
4. Liability of Local Recruitment Agency and Foreign Employer
i
fe
ev
a. Solidary liability
o
o The nature of the liability of a local recruiter and its foreign principal is
R
“solidary” or “joint and several” for any and all claims arising out of the
r
Pr
employment contract of OFWs.
r
Ba
• Is the solidary liability of corporate officers with the recruitment agency

Ba
“automatic” in character?
s
es
No. In order to hold the officers of the agency solidarily liable, it is required that there
e
must be proof of their culpability therefor. Thus, it was held in the 2013 case of Gagui
bl
v. Dejero, that while it is true that R.A. 8042 and the Corporation Code provide for
solidary liability, this liability must be so stated in the decision sought to be
li
implemented. Absent this express statement, a corporate officer may not be

o
impleaded and made to personally answer for the liability of the corporation.
r
n
Ba
R
• What are some relevant principles on the persons liable for illegal recruitment?
O
an
o Employees of a licensed recruitment agency may be held liable for illegal

et
recruitment as principal by direct participation, together with his employer, if

es
it is shown that he actively and consciously participated in illegal recruitment.

h
o Good faith and merely following orders of superiors are not valid defenses of
rn
bl
C
an employee.
o A manager of a recruitment/manning agency is not a mere employee. As
such, he receives job applications, interviews applicants and informs them of
o
te
the agency’s requirement of payment of performance or cash bond prior to

the applicant’s deployment. As the crewing manager, he was at the
R
forefront of the company’s recruitment activities.

In
an
b. Theory of imputed knowledge

o Knowledge of the agent is deemed knowledge of the principal but not the
es
h
other way around.

o The theory of imputed knowledge is a rule that any information material to
C
bl
the transaction, either possessed by the agent at the time of the transaction
or acquired by him before its completion, is deemed to be the knowledge of
the principal, at least insofar as the transaction is concerned, even though
o
the knowledge, in fact, is not communicated to the principal at all.

R
an
12
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Legal Practitioner
5. Termination of Contract of Migrant Worker
w
• Can an OFW acquire regularity of employment?
ie
No. The prevailing rule is that OFWs are contractual (fixed-term only), not regular,
ev
employees. In fact, they can never attain regularity of employment. The nature of
their employment is always fixed-term.
R
• What are some relevant principles?
al
o Indefinite period of employment of OFWs is not valid as it contravenes the
explicit provision of the POEA Rules and Regulations on fixed-period
employment.
n
o OFWs do not become regular employees by reason of nature of work, that is,
io
that they are made to perform work that is usually necessary and desirable in
the usual business or trade of the employer. The exigencies of their work
necessitate that they be employed on a contractual basis. This
ss
notwithstanding the fact that they have rendered more than twenty (20)
e
years of service.
i
fe
o Regular employment does not result from the series of re-hiring of OFWs.
ev
o The fixed-period employment of OFWs is not discriminatory against them nor
does it favor foreign employers. It is for the mutual interest of both the seafarer
o
R
and the employer why the employment status must be contractual only or
r
for a certain period of time.

Pr
o The expiration of the employment contracts of OFWs marks its ending.
r
Ba
• Is due process under Philippine law applicable to termination of employment

Ba
s
of OFWs?
es
Yes. In the absence of proof of applicable foreign law, OFWs are entitled to due
e
process in accordance with Philippine laws.

bl
• Is the Agabon doctrine applicable to OFWs who are dismissed for cause but
li
o
without due process?

r
n
Ba
R
Yes. The Agabon doctrine of awarding indemnity in the form of nominal damages
in cases of valid termination for just or authorized cause but without procedural due
O
an
process also applies to termination of OFWs.

et
es
• Who has the burden of proof to show that the dismissal of the OFW is legal?
h
rn
Burden of proof devolves on both recruitment agency and its foreign principal.
bl
C
• Are OFWs entitled to the reliefs under the Labor Code?

o
te
No. They are not entitled to such reliefs under Article 279 as reinstatement or
R
separation pay in lieu of reinstatement or full backwages. REASON: Because their

In
employment is fixed-term in nature. The nature of their claim therefore is purely

an
monetary, such as the payment of the salary for the unexpired portion of the
employment contract in case their dismissal is declared illegal.
es
h
• What are the reliefs to which OFWs are entitled?

C
bl
They are entitled to the reliefs provided under Section 10 of R.A. No. 8042, as
amended, to wit:
o
(1) All salaries for the unexpired portion of the contract;

R
(2) Full reimbursement of placement fees and deductions made with interest at
12% per annum.
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13
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Legal Practitioner
As pointed out above, all the reliefs available to an illegally dismissed OFW are always
w
monetary in nature.
ie
It must be noted that under the 2009 Serrano doctrine, (Serrano v. Gallant Maritime
Services, Inc.), an illegally dismissed OFW is now entitled to all the salaries for the
entire unexpired portion of their employment contracts, irrespective of the
ev
stipulated term or duration thereof. The underlined phrase in Section 10 below has
been declared unconstitutional in this case:
R
“In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, or any unauthorized
al
deductions from the migrant worker's salary, the worker shall be entitled
to the full reimbursement of his placement fee and the deductions made
with interest at twelve percent (12%) per annum, plus his salaries for the
n
unexpired portion of his employment contract or for three (3) months for
io
every year of the unexpired term, whichever is less.”

However, R.A. No. 10022 (March 8, 2010), which amended R.A. No. 8042 (Migrant
Workers and Overseas Filipinos Act of 1995), has replicated and re-enacted the
ss
e
same unconstitutional provision exactly as above quoted. The question is: was the
i
unconstitutionality of the above-underlined part of the provision cured by such
fe
ev
replication or re-enactment in the amendatory law?
The 2014 en banc case of Sameer Overseas Placement Agency, Inc. v. Joy C.
o
R
Cabiles, answered this in the negative. The said provision was thus declared still
r
unconstitutional and null and void despite its replication in R.A. No. 10022.
Pr
r
Ba
B. EMPLOYMENT OF NON RESIDENT ALIENS

Ba
s
es
• What is an ALIEN EMPLOYMENT PERMIT (AEP)?

e
bl
AEP - a document issued by the DOLE Secretary through the DOLE-Regional

Director who has jurisdiction over the intended place of work of the foreign national,
li
authorizing the foreign national to work in the Philippines.

o
r
n
Ba
R
• Who are required to procure AEP?

O
an
o All foreign nationals who intend to engage in gainful employment in the

Philippines are required to apply for AEP.
et
es
o “Gainful employment” refers to a state or condition that creates an

h
employer-employee relationship between the Philippine-based company

rn
and the foreign national where the former has the power to hire or dismiss
bl
C
the foreign national from employment, pays the salaries or wages thereof
and has authority to control the performance or conduct of the tasks and
o
duties.
te
R
• What are the categories of foreign nationals EXEMPTED from securing AEP?
In
an
a. All members of the diplomatic service and foreign government officials

accredited by and with reciprocity arrangement with the Philippine
government;
es
h
b. Officers and staff of international organizations of which the Philippine

government is a member, and their legitimate spouses desiring to work in the
C
bl
Philippines;
c. Owners and representatives of foreign principals whose companies are
accredited by the POEA, who come to the Philippines for a limited period
o
and solely for the purpose of interviewing Filipino applicants for employment
R
abroad;
d. Foreign nationals who come to the Philippines to teach, present and/or
an
conduct research studies in universities and colleges as visiting, exchange or

14
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Legal Practitioner
adjunct professors under formal agreements between the universities or
w
colleges in the Philippines and foreign universities or colleges; or between the
Philippine government and foreign government, provided that the
ie
exemption is on a reciprocal basis;
e. Permanent resident foreign nationals and probationary or temporary resident
ev
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. 7917);
f. Refugees and Stateless Persons recognized by DOJ pursuant to Article 17 of
R
the UN Convention and Protocol Relating to status of Refugees and Stateless
Persons; and
al
g. All foreign nationals granted exemption by law.
• What are the categories of foreign nationals EXCLUDED from securing AEP?
n
io
a. 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.
ss
b. President and Treasurer, who are part-owners of the company.
e
c. Those providing consultancy services who do not have employers in the
i
fe
Philippines.
ev
d. Intra-corporate transferee who is a manager, executive or specialist as
defined below in accordance with Trade Agreements and an employee of
o
R
the foreign service supplier for at least one (1) year continuous employment
r
prior to deployment to a branch, subsidiary, affiliate or representative office

Pr
in the Philippines.
r
Ba
i. an Executive: a natural person within the organisation who primarily

Ba
s
directs the management of the organisation and exercises wide latitude

es
in decision-making and receives only general supervision or direction from

higher level executives, the board of directors, or stockholders of the
e
business; an executive would not directly perform tasks related to the

bl
actual provision of the service or services of the organisation;

ii. a Manager: a natural person within the organisation who primarily directs
li
o
the organisation/department/subdivision and exercises supervisory and

control functions over other supervisory, managerial or professional staff; r
n
Ba
R
does not include first-line supervisors unless employees supervised are

professionals; does not include employees who primarily perform tasks
O
an
necessary for the provision of the service; or

iii. a Specialist: a natural person within the organisation who possesses
et
es
knowledge at an advanced level of expertise essential to the

h
establishment/provision of the service and/or possesses proprietary

rn
knowledge of the organisation's service, research equipment, techniques

bl
C
or management; may include, but is not limited to, members of a licensed

profession.
o
te
All other intra-corporate transferees not within these categories as defined

above are required to secure an AEP prior to their employment in the
R
Philippines
In
an
e. 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:
es
h
i. who enters the Philippines temporarily to supply a service pursuant to a

C
bl
contract between his/her employer and a service consumer in the

Philippines;
ii. must possess the appropriate educational and professional qualifications;
o
and
R
iii. must be employed by the foreign service supplier for at least one year
prior to the supply of service in the Philippines.
an
15
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Legal Practitioner
f. Representative of the Foreign Principal/Employer assigned in the Office of
w
Licensed Manning Agency (OLMA) in accordance with the POEA law, rules
and regulations.
ie
• What is the period of validity of an AEP?
ev
o The AEP is valid for one (1) year.
o Exception: When employment contract provides otherwise but not to
R
exceed three (3) years. The AEP may be renewed subject to the conditions
imposed by law.
al C. DISCRIMINATORY PRACTICES
n
1. Age
io
• Anti-Age Discrimination in Employment Act.

ss
R.A. No. 10911 [July 21, 2016], otherwise known as the “Anti-Age Discrimination in
e
Employment Act” prohibits discrimination against any individual in employment on
i
fe
account of age. This law was lately implemented by DOLE Department Order No. 170,
ev
Series of 2017 [February 02, 2017].
o
R
o Coverage. The law shall apply to all employers, publishers, labor contractors or
r
subcontractors, and labor organizations, whether or not registered.

Pr
o Prohibitions. Under this law, the following are the prohibited discriminatory acts
r
Ba
related to employment on account of age:

Ba
(a) It shall be unlawful for an employer to:
s
(1) Print or publish, or cause to be printed or published, in any form of

es
media, including the internet, any notice of advertisement relating to

e
employment suggesting preferences, limitations, specifications and

bl
discrimination based on age;

(2) Require the declaration of age or birth date during the application
li
o
process;
(3) Decline any employment application because of the individual’s r
n
Ba
R
age;
(4) Discriminate against an individual in terms of compensation, terms
O
an
and conditions or privileges of employment on account of such

individual’s age;
et
es
(5) Deny any employee’s or worker’s promotion or opportunity for training

h
because of age;
rn
(6) Forcibly layoff an employee or worker because of old age; or

bl
C
(7) Impose early retirement on the basis of such employee’s or worker’s

age.
o
te
(b) It shall be unlawful for a labor contractor or subcontractor, if any, to

refuse to refer for employment or otherwise discriminate against any
R
individual because of such person’s age.

In
an
(c) It shall be unlawful for a labor organization to:

(1) Deny membership to any individual because of such individual’s age;
es
h
(2) Exclude from its membership any individual because of such

individual’s age; or
C
(3) Cause or attempt to cause an employer to discriminate against an

bl
individual in violation of the Rules.

(d) It shall be unlawful for a publisher to print or publish any notice of
o
advertisement relating to employment suggesting preferences,

R
limitations, specifications, and discrimination based on age.

an
16
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Legal Practitioner
o Exceptions. It shall be lawful for an employer to set age limitations in employment
w
if:
ie
(a) Age is a bona fide occupational qualification (BFOQ) reasonably
necessary in the normal operation of a particular business or where the
differentiation is based on reasonable factors other than age;
ev
(b) The intent is to observe the terms of bona fide seniority system that is not
intended to evade the purpose of the Rules.
R
(c) The intent is to observe the terms of a bona fide employee retirement or
a voluntary early retirement plan consistent with the purpose of the
al
Rules; Provided, That such retirement or voluntary retirement plan is in
accordance with the Labor Code, as renumbered, and other related
n
laws; or
io
(d) The action is duly certified by the DOLE Secretary after consultation with
the stakeholders in accordance with the purpose of the Rules.
For purposes of the foregoing exceptions, an employer who invokes the
ss
e
qualifications as provided herein, shall submit a report prior to its
i
implementation to the DOLE Regional Office which has jurisdiction over the
fe
ev
workplace. The submission of the report shall be a presumption that the age
limitation is in accordance with the Rules unless proven otherwise by the
o
court.
R
Failure to submit said report shall give rise to the presumption that the
r
Pr
employer is not allowed to set age limitation.
r
Ba
o Employment age of children. The age requirement in the employment of

Ba
children shall be governed by R.A. No. 9231 and its Implementing Rules and
s
Regulations, Article 138 of the Labor Code as renumbered, and other applicable
es
laws, rules and regulations.

e
bl
Upon hiring, the employer may require the child or the guardian to show proof
n
of the child's age for purposes of compliance with minimum employable age
li
under existing laws.

o
r
n
Gender and/or Marital Status

Ba
2.
R
O
an
• What are acts of discrimination under the Labor Code?

(a) Payment of a lesser compensation, including wage, salary or other form of
et
es
remuneration and fringe benefits, to a female employee as against a male

h
employee, for work of equal value; and

rn
(b) Favoring a male employee over a female employee with respect to

bl
C
promotion, training opportunities, study and scholarship grants solely on

account of their sexes.
o
te
• What are acts of discrimination under the Magna Carta of Women?

R
R.A. No. 9710, otherwise known as “The Magna Carta of Women,” is a

In
comprehensive women’s human rights law that seeks to eliminate discrimination

an
against women by recognizing, protecting, fulfilling and promoting the rights of

Filipino women, especially those in marginalized sector.
es
Based on the definition of the term “Discrimination Against Women” in R.A. No. 9710,
h
the following are considered discriminatory acts:

C
bl
1. Any gender-based distinction, exclusion, or restriction which has the effect or

purpose of impairing or nullifying the recognition, enjoyment, or exercise by
women, irrespective of their marital status, on a basis of equality of men and
o
women, of human rights and fundamental freedoms in the political,

R
economic, social, cultural, civil or any other field;

2. Any act or omission, including by law, policy, administrative measure, or
an
practice, that directly or indirectly excludes or restricts women in the

17
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Legal Practitioner
recognition and promotion of their rights and their access to and enjoyment
w
of opportunities, benefits or privileges;
ie
3. A measure or practice of general application that fails to provide for
mechanisms to offset or address sex or gender-based disadvantages or
limitations of women, as a result of which women are denied or restricted in
ev
the recognition and protection of their rights and in their access to and
enjoyment of opportunities, benefits, or privileges; or women, more than men,
R
are shown to have suffered the greater adverse effects of those measures or
practices; and
al
4. Discrimination compounded by or intersecting with other grounds, status, or
condition, such as ethnicity, age, poverty or religion.
n
Additionally, women are guaranteed their right to decent work. The State shall
progressively realize and ensure decent work standards for women that involve the
io
creation of jobs of acceptable quality in conditions of freedom, equity, security and

human dignity.
ss
Health Condition
e
3.
i
fe
• What are important definitions related to PWDs?
ev
o “Persons with Disability” or “PWD” are those suffering from restriction or
o
R
different abilities, as a result of a mental, physical or sensory impairment, to
r
perform an activity in the manner or within the range considered normal for
Pr
a human being.
r
Ba
o “Impairment” refers to any loss, diminution or aberration of psychological, Ba

physiological, or anatomical structure or function.
s
o “Disability” means (1) a physical or mental impairment that substantially limits

one or more psychological, physiological or anatomical functions of an
es
individual or activities of such individual; (2) a record of such an impairment;

e
or (3) being regarded as having such an impairment.

bl
o “Handicap” refers to a disadvantage for a given individual, resulting from an

impairment or a disability that limits or prevents the function or activity that is
li
considered normal given the age and sex of the individual.

o
o “Marginalized Persons with Disability” refer to persons with disability who lack r
n
Ba
R
access to rehabilitative services and opportunities to be able to participate

fully in socio-economic activities and who have no means of livelihood and
O
an
whose incomes fall below the poverty threshold.

et
es
• Equal opportunity
h
Under the law, PWDs are entitled to equal opportunity for employment.
rn
bl
Consequently, no PWD shall be denied access to opportunities for suitable

C
employment. A qualified employee with disability shall be subject to the same terms
and conditions of employment and the same compensation, privileges, benefits,
o
te
fringe benefits, incentives or allowances as a qualified able-bodied person.

R
Five percent (5%) of all casual emergency and contractual positions in the
In
Departments of Social Welfare and Development, Health, Education and other

an
government agencies, offices or corporations engaged in social development shall

be reserved for PWDs.
es
h
• Are PWDs eligible for apprenticeship and learnership?

Yes. Under R.A. No. 7277, it is provided that subject to the provisions of the Labor
C
Code, as amended, PWDs shall be eligible as apprentices or learners; provided that

bl
their handicap is not as much as to effectively impede the performance of job

operations in the particular occupation for which they are hired and provided
o
further that after the lapse of the period of apprenticeship, if found satisfactory in
the job performance, they shall be eligible for employment.
R
an
18
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Legal Practitioner
• What are the forms of prohibited discriminatory acts against PWDs in terms of
w
employment?
ie
No entity, whether public or private, shall discriminate against a qualified PWD by
reason of disability in regard to job application procedures, the hiring, promotion,
or discharge of employees, employee compensation, job training, and other terms,
ev
conditions and privileges of employment. The following constitute acts of
discrimination:
R
(a) Limiting, segregating or classifying a job applicant with disability in such a
manner that adversely affects his work opportunities;
al
(b) Using qualification standards, employment tests or other selection criteria
that screen out or tend to screen out a PWD unless such standards, tests or
n
other selection criteria are shown to be job-related for the position in
question and are consistent with business necessity;
io
(c) Utilizing standards, criteria, or methods of administration that:

(1) have the effect of discrimination on the basis of disability; or
ss
e
(2) perpetuate the discrimination of others who are subject to common
i
fe
administrative control.
ev
(d) Providing less compensation, such as salary, wage or other forms of
o
remuneration and fringe benefits, to a qualified employee with disability, by
R
reason of his disability, than the amount to which a non-disabled person
r
Pr
performing the same work is entitled;
r
Ba
(e) Favoring a non-disabled employee over a qualified employee with disability Ba

with respect to promotion, training opportunities, and study and scholarship
s
grants solely on account of the latter’s disability;

es
(f) Re-assigning or transferring an employee with a disability to a job or position

e
he cannot perform by reason of his disability;

bl
(g) Dismissing or terminating the services of an employee with disability by

reason of his disability unless the employer can prove that he impairs the
li
satisfactory performance of the work involved to the prejudice of the

o
business entity; provided, however, that the employer first sought to provide r
n
Ba
R
reasonable accommodations for persons with disability;

O
(h) Failing to select or administer in the most effective manner employment tests
an
which accurately reflect the skills, aptitude or other factor of the applicant
et
or employee with disability that such tests purports to measure, rather than
es
the impaired sensory, manual or speaking skills of such applicant or

h
employee, if any; and

rn
bl
C
(i) Excluding PWD from membership in labor unions or similar organizations.

4. Solo Parents
o
te
• No employer shall discriminate against any solo parent employee with respect
R
to terms and conditions of employment on account of his/her status.

In
an
es
h
------------oOo------------
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o
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19
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Legal Practitioner
MAJOR TOPIC 3
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EMPLOYMENT PROPER
ie
A. MANAGEMENT PREROGATIVE
• What are management prerogatives?
ev
Management prerogatives are granted to the employer to regulate every aspect
of their business, generally without restraint in accordance with their own discretion
R
and judgment. This privilege is inherent in the right of employers to control and
manage their enterprise effectively. Such aspects of employment include hiring,
al
work assignments, working methods, time, place and manner of work, tools to be
used, processes to be followed, supervision of workers, working regulations, transfer
of employees, lay-off of workers and the discipline, dismissal and recall of workers.
n
1. DISCIPLINE
io
• What are the components of the right to discipline?

The right or prerogative to discipline covers the following:
ss
e
1) Right to discipline;
i
fe
2) Right to dismiss;
ev
3) Right to determine who to punish;
4) Right to promulgate rules and regulations;
o
R
5) Right to impose penalty; proportionality rule;
6) Right to choose which penalty to impose; and
r
Pr
7) Right to impose heavier penalty than what the company rules prescribe.
r
Ba
The proportionality rule simply means that the penalty to be imposed should be
Ba
commensurate to the offense committed. For example, dismissal for committing
s
tardiness or absence for the first time is too harsh a penalty. A warning, a reprimand
es
would suffice for the first offense, punitive suspension of a day or two, for the second
e
offense, a longer suspension for a third offense, and finally, dismissal for a fourth offense.
bl
For committing serious offenses, such as stealing a company-owned property, or

stabbing a co-employee, because of their nature, would certainly deserve the
li
imposition of the supreme penalty of dismissal, and not just a warning, a reprimand or
o
punitive suspension. r
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2. TRANSFER OF EMPLOYEES
O
an
• What are the various kinds of transfer?

et
es
o Two (2) kinds of transfer. - A transfer means a movement:

h
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1. From one position to another of equivalent rank, level or salary, without a

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break in the service; or

2. From one office to another within the same business establishment.
o
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• What are the salient points to consider in transfer?

R
In
o The exercise of the prerogative to transfer or assign employees from one office or
an
area of operation to another is valid provided there is no demotion in rank or

diminution of salary, benefits and other privileges. The transfer should not be
motivated by discrimination or made in bad faith or effected as a form of
es
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punishment or demotion without sufficient cause.

o Commitment made by the employee like a salesman in the employment
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bl
contract to be re-assigned anywhere in the Philippines is binding on him.

o Even if the employee is performing well in his present assignment, management
may reassign him to a new post.
o
o The transfer of an employee may constitute constructive dismissal when:

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1) When the transfer is unreasonable, inconvenient or prejudicial to the

an
employee;
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2) When the transfer involves a demotion in rank or diminution of salaries, benefits
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and other privileges; and
3) When the employer performs a clear act of discrimination, insensibility, or
ie
disdain towards the employee, which forecloses any choice by the latter
except to forego his continued employment.
ev
o The refusal of an employee to be transferred may be held justified if there is a
showing that the transfer was directed by the employer under questionable
R
circumstances. For instance, the transfer of employees during the height of their
union’s concerted activities in the company where they were active participants
is illegal.
al
o An employee who refuses to be transferred, when such transfer is valid, is guilty
of insubordination or willful disobedience of a lawful order of an employer under
n
Article 282 of the Labor Code.
o Refusal to transfer due to parental obligations, additional expenses,
io
inconvenience, hardship and anguish is not valid. An employee could not

validly refuse lawful orders to transfer based on these grounds.
o Refusal to transfer to overseas assignment is valid.
ss
e
o Refusal to transfer consequent to promotion is valid.
i
o Transfer to avoid conflict of interest is valid.
fe
ev
o A transfer from one position to another occasioned by the abolition of the
position is valid.
o
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3. PRODUCTIVITY STANDARDS
r
Pr
• How may productivity standards be imposed?
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Ba
o The employer has the prerogative to prescribe the standards of productivity

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which the employees should comply. The productivity standards may be used
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by the employer as:

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1. an incentive scheme; and/or

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2. a disciplinary scheme.
bl
o As an incentive scheme, employees who surpass the productivity standards or

li
quota are usually given additional benefits.

o
o As a disciplinary scheme, employees may be sanctioned or dismissed for r

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Ba
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failure to meet the productivity standards or quota.

O
an
o Illustrative cases: In International School Manila v. International School Alliance

of Educators (ISAE), the teacher was held guilty of gross inefficiency meriting
et
her dismissal on the basis of the Court’s finding that she failed to measure up to
es
the standards set by the school in teaching Filipino classes.

h
rn
o In Reyes-Rayel v. Philippine Luen Thai Holdings Corp., the validity of the dismissal
bl
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of petitioner who was the Corporate Human Resources (CHR) Director for
Manufacturing of respondent company, on the ground of inefficiency and
o
ineptitude, was affirmed on the basis of the Court’s finding that petitioner, on
te
two occasions, gave wrong information regarding issues on leave and holiday
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pay which generated confusion among employees in the computation of

In
salaries and wages.

an
o In Realda v. New Age Graphics, Inc., petitioner, a machine operator of

respondent company, was dismissed on the ground, among others, of
es
h
inefficiency. In affirming the validity of his dismissal, the Supreme Court reasoned:
“(T)he petitioner’s failure to observe Graphics, Inc.’s work standards constitutes
C
inefficiency that is a valid cause for dismissal. Failure to observe prescribed

bl
standards of work, or to fulfill reasonable work assignments due to inefficiency

may constitute just cause for dismissal. Such inefficiency is understood to mean
o
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.”
R
an
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4. BONUS
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• What is the rule on its demandability and enforceability?
ie
o Bonus, as a general rule, is an amount granted and paid ex gratia to the
ev
employee.
o It cannot be forced upon the employer who may not be obliged to assume the
onerous burden of granting bonuses or other benefits aside from the employees’
R
basic salaries or wages. If there is no profit, there should be no bonus. If profit is
reduced, bonus should likewise be reduced, absent any agreement making
al
such bonus part of the compensation of the employees.
When is bonus demandable and enforceable?

n
•
io
o It becomes demandable and enforceable:
(1) If it has ripened into a company practice;

ss
(2) If it is granted as an additional compensation which the employer agreed to
e
give without any condition such as success of business or more efficient or more
i
fe
productive operation, hence, it is deemed part of wage or salary.
ev
(3) When considered as part of the compensation and therefore demandable and
enforceable, the amount is usually fixed. If the amount thereof is dependent
o
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upon the realization of profits, the bonus is not demandable and enforceable.
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5. CHANGE OF WORKING HOURS
r
Ba
• What is the extent of the exercise of this prerogative?

Ba
s
o Employers have the freedom and prerogative, according to their discretion and
best judgment, to regulate and control the time when workers should report for
es
work and perform their respective functions.

e
o Manila Jockey Club Employees Labor Union – PTGWO, v. Manila Jockey Club,
bl
Inc. - The validity of the exercise of the same prerogative to change the working
hours was affirmed in this case. It was found that while Section 1, Article IV of the
li
o
CBA provides for a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from
1:00 p.m. to 5:00 p.m. from Mondays to Saturdays, Section 2, Article XI thereof r
n
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expressly reserves to respondent the prerogative to change existing methods or

facilities and to change the schedules of work. Consequently, the hours of work
O
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of regular monthly-paid employees were changed from the original 9:00 a.m. to
5:00 p.m. schedule to 1:00 p.m. to 8:00 p.m. when horse races are held, that is,
et
es
every Tuesday and Thursday. The 9:00 a.m. to 5:00 p.m. schedule for non-race
h
days was, however, retained. Respondent, as employer, cited the change in the
rn
program of horse races as reason for the adjustment of the work schedule. It
bl
C
rationalized that when the CBA was signed, the horse races started at 10:00
a.m. When the races were moved to 2:00 p.m., there was no other choice for
o
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management but to change the work schedule as there was no work to be

done in the morning. Evidently, the adjustment in the work schedule is justified.
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In
6. BONA FIDE OCCUPATIONAL QUALIFICATIONS (BFOQ)

an
• Concept.
es
h
o The employer has the prerogative to impose certain qualifications based on

such criteria as race, sex, age, national origin, civil or marital status, physical
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appearance (such as a requirement on “pleasing personality” or height and

weight) and the like.
o
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Legal Practitioner
• Meiorin test.
w
o This three-step test is used to determine whether an employment policy is
ie
justified. Under this test, an employer can justify the impugned standard by
establishing on the balance of probabilities:
ev
a. That the employer adopted the standard for a purpose rationally connected
to the performance of the job;
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b. 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
al
c. That the standard was REASONABLY necessary to the accomplishment of
that legitimate work-related purpose.
n
• Star Paper test
io
o Consequently, in Star Paper Corp. v. Simbol, April 12, 2006, the Supreme Court
held that in order to justify a BFOQ, the employer must prove two (2) factors:
ss
e
(1) The employment qualification is reasonably related to the essential
i
operation of the job involved; and
fe
ev
(2) There is factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform the duties
o
of the job.
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In short, the test of reasonableness of the company policy is used because it is
r
Ba
parallel to BFOQ. BFOQ is valid “provided it reflects an inherent quality

reasonably necessary for satisfactory job performance.” This is otherwise known
Ba
as the “Reasonable Business Necessity Rule.”
s
• Specific topics
es
(a) Civil status/marital status qualification

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(b) Physical appearance qualification

(c) Age qualification
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o
(a) CIVIL STATUS/MARITAL STATUS QUALIFICATION r

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• Relevant cases
O
an
As far as the qualification of civil status or marital status is concerned, the following
et
es
cases are relevant:

h
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(1) PT & T v. NLRC;

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(2) Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc.;

and
o
(3) Star Paper Corp. v. Simbol.

te
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• The PT&T case.

In
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o The employer invoked concealment of civil status as ground to terminate the

private respondent employee.
o In the job application form, she indicated in the portion for civil status that she
es
h
was single although she had contracted marriage a few months earlier.
o It appears that the employee had made the same representation in the two
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bl
successive reliever agreements which she signed.

o The company has a policy of not accepting married women for employment.
o Application of the BFOQ rule in the PT&T case: The Supreme Court ruled that the
o
company policy violates the right against discrimination afforded all women
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workers under Article 136 of the Labor Code.

“[A] requirement that a woman employee must remain unmarried
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could be justified as a ‘bona fide occupational qualification,’ or

23
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BFOQ, where the particular requirements of the job would justify the
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same, but not on the ground of a general principle, such as the
desirability of spreading work in the workplace. A requirement of that
ie
nature would be valid provided it reflects an inherent quality
reasonably necessary for satisfactory job performance. Thus, in one
ev
case, a no-marriage rule applicable to both male and female flight
attendants, was regarded as unlawful since the restriction was not
related to the job performance of the flight attendants.”
R
• The Duncan case.
al
o In Duncan, the contract of employment expressly prohibited an employee from
having a relationship with an employee of a competitor company. It provides:
n
“10. You agree to disclose to management any existing or future
io
relationship you may have, either by consanguinity or affinity with co-

employees or employees of competing drug companies. Should it pose a
possible conflict of interest in management discretion, you agree to resign
ss
e
voluntarily from the Company as a matter of Company policy.”
i
fe
ev
o Application of the BFOQ rule in the Duncan case.
o
The company (Glaxo) has a right to guard its trade secrets, manufacturing formulas,
R
marketing strategies and other confidential programs and information from
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Pr
competitors. It considered the prohibition against personal or marital relationships with
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employees of competitor companies upon Glaxo’s employees reasonable under the

circumstances because relationships of that nature might compromise the interests of
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Glaxo. In laying down the assailed company policy, the Court recognized that Glaxo
s
only aims to protect its interests against the possibility that a competitor company will
es
gain access to its secrets and procedures.

e
bl
• The Star Paper case.

li
o The employees in Star Paper were terminated on various occasions, on the basis
o
of the following company policy, viz.:

r
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“1. New applicants will not be allowed to be hired if in case he/she has
O
an
[a] relative, up to [the] 3rd degree of relationship, already employed

by the company.
et
es
“2. In case two of our employees (both singles [sic], one male and
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another female) developed a friendly relationship during the course

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of their employment and then decided to get married, one of them

should resign to preserve the policy stated above.”
o
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o According to the employer, said rule is only intended to carry out its no-
employment-for-relatives-within-the-third-degree-policy which is within the
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ambit of the prerogatives of management. The Supreme Court, however,

In
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disagreed. It ruled that said policy failed to comply with the standard of
reasonableness which is being followed in our jurisdiction.
es
h
o Application of the BFOQ rule in the Star Paper case.

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The Court did not find a reasonable business necessity in the policy. Respondents were
hired after they were found fit for the job, but were asked to resign when they married
a co-employee. Petitioners failed to show how the marriage could be detrimental to
o
their business operations. The policy is premised on the mere fear that employees
married to each other will be less efficient. If the questioned rule is upheld without valid
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justification, the employer can create policies based on an unproven presumption of

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a perceived danger at the expense of an employee’s right to security of tenure.
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Legal Practitioner
(b) PHYSICAL APPEARANCE QUALIFICATION
w
• The Yrasuegui case.
ie
o This case involves the physical appearance or attribute of an employee which,
ev
in this case, is petitioner’s weight. For several times spanning a total period of five
(5) years, petitioner, an international flight steward of respondent PAL, was given
the opportunity to reduce his weight to the acceptable level in accordance
R
with the weight standards but he failed to measure up therewith. He was thus
terminated for his continued obesity. In his illegal dismissal case, one of the issues
al
raised is whether petitioner’s dismissal for obesity can be predicated on the
BFOQ defense.
n
o Application of the BFOQ rule in the Yrasuegui case:
io
Citing Star Paper Corp. and Duncan, the Court ruled that BFOQ is a proper defense
that justified petitioner’s dismissal grounded on his obesity.
ss
The business of PAL is air transportation. As such, it has committed itself to safely
e
transport its passengers. In order to achieve this, it must necessarily rely on its
i
fe
employees, most particularly the cabin flight deck crew who are on board the aircraft.
ev
The weight standards of PAL should be viewed as imposing strict norms of discipline
upon its employees. In other words, the primary objective of PAL in the imposition of
o
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the weight standards for cabin crew is flight safety. It cannot be gainsaid that cabin
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attendants must maintain agility at all times in order to inspire passenger confidence
Pr
on their ability to care for the passengers when something goes wrong.
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(c) AGE QUALIFICATION

Ba
s
See discussion above under Discriminatory Practices under Major Topic 2,

Section C.
es
7. MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYERS

bl
See discussion above of the case of Duncan v. Glaxo Welcome case under Bona
li
Fide Occupational Qualifications, particularly (a) Civil Status/ Marital Status

o
Qualification.
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8. POST-EMPLOYMENT RESTRICTIONS
O
an
(a) NON-COMPETE CLAUSE

et
• Is a non-compete clause valid?

es
h
Yes. The employer and the employee are free to stipulate in an employment contract
rn
prohibiting the employee within a certain period from and after the termination of his
bl
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employment, from:
(1) starting a similar business, profession or trade; or
o
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(2) working in an entity that is engaged in a similar business that might compete
R
with the employer.

In
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The non-compete clause is agreed upon to prevent the possibility that upon an
employee’s termination or resignation, he might start a business or work for a
competitor with the full competitive advantage of knowing and exploiting
es
h
confidential and sensitive information, trade secrets, marketing plans, customer/client

lists, business practices, upcoming products, etc., which he acquired and gained from
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his employment with the former employer. Contracts which prohibit an employee
bl
from engaging in business in competition with the employer are not necessarily void
for being in restraint of trade.
o
• What are the requisites in order for a non-compete clause to be valid?

R
A non-compete clause is not necessarily void for being in restraint of trade as long as
there are reasonable limitations as to three (3) things: time, place and trade.
an
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Example: The non-compete clause (called “Non-Involvement Provision”) in the 2007
w
case of Daisy B. Tiu v. Platinum Plans Philippines, Inc., provides as follows:
ie
“8. NON-INVOLVEMENT PROVISION – The EMPLOYEE further undertakes
that during his/her engagement with EMPLOYER and in case of separation
from the Company, whether voluntary or for cause, he/she shall not, for the
ev
next TWO (2) years thereafter, engage in or be involved with any corporation,
association or entity, whether directly or indirectly, engaged in the same
R
business or belonging to the same pre-need industry as the EMPLOYER. Any
breach of the foregoing provision shall render the EMPLOYEE liable to the
EMPLOYER in the amount of One Hundred Thousand Pesos (P100,000.00) for
al
and as liquidated damages.”
Respondent sued petitioner for damages. Respondent alleged, among others, that
n
petitioner’s employment with Professional Pension Plans, Inc. violated the above-
io
quoted non-involvement clause in her contract of employment.

In affirming the validity of the Non-Involvement Clause, the Supreme Court
ratiocinated as follows:
ss
e
“xxx A non-involvement clause is not necessarily void for being in
i
fe
restraint of trade as long as there are reasonable limitations as to TIME,
ev
TRADE, and PLACE.
o
“In this case, the non-involvement clause has a TIME LIMIT: two
R
years from the time petitioner’s employment with respondent ends. It
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Pr
is also limited as to TRADE, since it only prohibits petitioner from
r
Ba
engaging in any pre-need business akin to respondent’s. It is limited

as to PLACE since the prohibition covers only Hongkong and Asean
Ba
operations.
s
“More significantly, since petitioner was the Senior Assistant Vice-

es
President and Territorial Operations Head in charge of respondent’s

e
Hongkong and Asean operations, she had been privy to confidential

bl
and highly sensitive marketing strategies of respondent’s business. To

allow her to engage in a rival business soon after she leaves would
li
make respondent’s trade secrets vulnerable especially in a highly

o
competitive marketing environment. In sum, we find the non- r

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involvement clause not contrary to public welfare and not greater

than is necessary to afford a fair and reasonable protection to
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respondent.
et
“Thus, as held by the trial court and the Court of Appeals, petitioner
es
is bound to pay respondent P100,000 as liquidated damages. While

h
we have equitably reduced liquidated damages in certain cases, we

rn
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cannot do so in this case, since it appears that even from the start,
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petitioner had not shown the least intention to fulfill the non-
involvement clause in good faith.”
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OTHER POST-EMPLOYMENT PROHIBITIONS

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• Confidentiality and non-disclosure clause.

In
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The confidentiality and non-disclosure clause reflects the commitment of the

employee that he shall not, either during the period of his employment with the
es
h
employer or at any time thereafter, use or disclose to any person, firm or corporation
any information concerning the business or affairs of his employment, for his own
C
benefit or to the detriment of the employer. This clause may also cover Former
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Employer Information and Third Party Information.

o
• Non-solicitation clause.
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To protect the legitimate business interests of the employer, including its business
relationships, the employee under this clause, may, directly or indirectly, be prohibited
an
from soliciting or approaching, or accept any business from any person or entity who
26
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shall, at any time within a fixed period preceding the termination of his employment,
w
have been (a) a client, talent, producer, designer, programmer, distributor,
merchandiser, or advertiser of the Company, (b) a party or prospective party to an
ie
agreement with the employer, or (c) a representative or agent of any client, talent,
producer, designer, programmer, distributor, merchandiser, or advertiser of the
ev
employer for the purpose of offering to that person or entity goods or services which
are of the same type as or similar to any goods or services supplied by the employer
at termination.
R
• Non-recruitment or anti-piracy clause.
al
This clause prohibits the recruitment by the employee of personnel or employees of
the employer for a certain period after his termination of employment, either on his
n
own account or in conjunction with or on behalf of any other person.
io
• Inventions ASSIGNMENT CLAUSE (INTELLECTUAL PROPERTY CLAUSE).

ss
In industries engaged in research and development and related activities, this clause
e
requires the employee, within a certain period, to disclose in confidence to the
i
fe
employer and its subsidiaries and to assign all inventions, improvements, designs,
ev
original works of authorship, formulas, processes, compositions of matter, computer
software programs, databases, mask works and trade secrets, whether or not
o
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patentable, copyrightable or protectible as trade secrets (collectively, the
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“Inventions”), which the employee may solely or jointly conceive or develop or

Pr
reduce to practice, or cause to be conceived or developed or reduced to practice,
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during the period of his employment with the employer.

Ba
s
B. LABOR STANDARDS
es
1. Conditions of Employment
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a. Covered employees/workers
li
o
• Who are covered by the labor standards provisions of the Labor Code?
Employees in ALL establishments, whether operated for profit or not, are covered r
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by the law on labor standards.

O
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• Who are excluded?

The following are excluded from the coverage of the law on labor standards:
et
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a. Government employees;
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b. Managerial employees;
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c. Other officers or members of a managerial staff;

d. Workers paid by results;
e. Non-agricultural field personnel; and
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f. Members of the family of the employer.

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b. Hours of work
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• Principles in determining hours worked and employees exempted or not

covered
es
h
o The following shall be considered as compensable hours worked:

C
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a) All time during which an employee is required to be on duty or to be at the

employer’s premises or to be at a prescribed workplace; and
o
b) All time during which an employee is suffered or permitted to work.

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• “Fair day’s wage for a fair day’s labor,” remains the basic factor in determining
the employees’ wages and backwages.
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(b.1) Normal hours of work; hours worked
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• What is the total normal hours of work per day?
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Eight (8) hours daily.
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• What is overtime work?
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Any work in excess of said eight (8) normal hours is considered overtime work.
• May normal working hours be reduced?

al
Yes, provided that no corresponding reduction is made on the employee’s wage
n
or salary equivalent to an 8-hour work day. In instances where the number of hours
required by the nature of work is less than 8 hours, such number of hours should be
io
regarded as the employee’s full working day.

(b.2) Compressed work week
ss
e
o The employer may compress the work days from six (6) days (from Monday
i
to Saturday) to five (5) days (from Monday to Friday) under certain
fe
ev
conditions imposed by the DOLE.
o The DOLE recognizes CWW schemes adopted in accordance with the
o
following:
R
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Pr
1. The CWW scheme is undertaken as a result of an express and voluntary
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agreement of majority of the covered employees or their duly authorized

representatives. This agreement may be expressed through collective
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bargaining or other legitimate workplace mechanisms of participation
s
such as labor-management councils, employee assemblies or referenda.

es
2. In firms using substances, chemicals and processes or operating under

e
conditions where there are airborne contaminants, human carcinogens

bl
or noise prolonged exposure to which may pose hazards to the

employees’ health and safety, there must be a certification from an
li
accredited health and safety organization or practitioner or from the firm’s

o
safety committee that work beyond eight (8) hours is within threshold limits
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or tolerable levels of exposure, as set in the OSHS.

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3. The employer shall notify the DOLE, through its Regional Office having
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jurisdiction over the workplace, of the adoption of the CWW scheme. The
notice should be made in DOLE CWW Report Form.
et
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Effects. A CWW scheme which complies with the foregoing conditions shall
h
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have the following effects:
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1. Unless there is a more favorable practice existing in the firm, work beyond
eight (8) hours will not be compensable by overtime premium provided
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the total number of hours worked per day shall not exceed twelve (12)
hours. In any case, any work performed beyond twelve (12) hours a day
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or forty-eight (48) hours a week shall be subject to overtime premium.

In
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2. Consistent with Article 85 of the Labor Code, employees under a CWW

scheme are entitled to meal periods of not less than sixty (60) minutes.
Nothing, however, shall impair the right of employees to rest days as well
es
h
as to holiday pay, rest day pays or leaves in accordance with law or

applicable collective bargaining agreement (CBA) or company practice.
C
bl
3. Adoption of the CWW scheme shall in no case result in diminution of

existing benefits. Reversion to the normal eight-hour workday shall not
constitute a diminution of benefits. The reversion shall be considered a
o
legitimate exercise of management prerogative provided that the

employer shall give the employees prior notice of such reversion within a
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reasonable period of time.

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(b.3.) Meal Periods
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Every employer is required to give his employees, regardless of sex, not less than
ie
one (1) hour (or 60 minutes) time-off for regular meals.
• Is meal break compensable?
ev
Being time-off, it is not compensable hours worked. In this case, the employee is
R
free to do anything he wants, except to work. If he is required, however, to work
while eating, he should be compensated therefor.
•
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Are short breaks compensable?
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Rest periods of short duration during working hours are considered and counted as
hours worked. Rest periods or coffee breaks running from five (5) to twenty (20) minutes
io
are considered compensable working time.

(b.4.) Night-shift Differential
ss
e
• How is it reckoned and computed?
i
fe
ev
Night shift differential is equivalent to 10% of employee's regular wage for each hour
of work performed between 10:00 p.m. and 6:00 a.m. of the following day.
o
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• What is the distinction between night shift differential pay and overtime pay?
r
Pr
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When the work of an employee falls at night time, the receipt of overtime pay shall
not preclude the right to receive night differential pay. The reason is the payment
Ba
of the night differential pay is for the work done during the night; while the payment
s
of the overtime pay is for work in excess of the regular eight (8) working hours.
es
• How is Night Shift Differential Pay computed?

bl
1. Where night shift (10 p.m. to 6 a.m.) work is regular work.

li
a. On an ordinary day: Plus 10% of the basic hourly rate or a total of 110%
o
of the basic hourly rate. r

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Ba
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b. On a rest day, special day or regular holiday: Plus 10% of the regular
hourly rate on a rest day, special day or regular holiday or a total of 110%
O
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of the regular hourly rate.

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es
2. Where night shift (10 p.m. to 6 a.m.) work is overtime work.

h
rn
a. On an ordinary day: Plus 10% of the overtime hourly rate on an ordinary

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C
day or a total of 110% of the overtime hourly rate on an ordinary day.

b. On a rest day or special day or regular holiday: Plus 10% of the overtime
o
hourly rate on a rest day or special day or regular holiday.

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R
3. For overtime work in the night shift. Since overtime work is not usually eight
In
(8) hours, the compensation for overtime night shift work is also computed
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on the basis of the hourly rate.
a. On an ordinary day. Plus 10% of 125% of basic hourly rate or a total of

es
h
110% of 125% of basic hourly rate.

b. On a rest day or special day or regular holiday. Plus 10% of 130% of regular
C
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hourly rate on said days or a total of 110% of 130% of the applicable

regular hourly rate.
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(b.5.) Overtime Work

R
• What are some basic principles on overtime work?

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1. Work rendered after normal eight (8) hours of work is called “overtime work.”
29
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Legal Practitioner
2. In computing overtime work, "regular wage" or "basic salary" means "cash"
w
wage only without deduction for facilities provided by the employer.
3. "Premium pay" means the additional compensation required by law for work
ie
performed within eight (8) hours on non-working days, such as regular
holidays, special holidays and rest days.
ev
4. "Overtime pay" means the additional compensation for work performed
beyond eight (8) hours.
5. Illustrations on how overtime is computed:
R
a. For overtime work performed on an ORDINARY DAY, the overtime pay
al
is plus 25% of the basic hourly rate.
b. For overtime work performed on a REST DAY OR ON A SPECIAL DAY, the
overtime pay is plus 30% of the basic hourly rate which includes 30%
n
additional compensation as provided in Article 93 [a] of the Labor
io
Code.
c. For overtime work performed on a REST DAY WHICH FALLS ON A SPECIAL
DAY, the overtime pay is plus 30% of the basic hourly rate which
ss
includes 50% additional compensation as provided in Article 93 [c] of
e
the Labor Code.
i
fe
d. For overtime work performed on a REGULAR HOLIDAY, the overtime pay
ev
is plus 30% of the basic hourly rate which includes 100% additional
compensation as provided in Article 94 [b] of the Labor Code.
o
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e. For overtime work performed on a REST DAY WHICH FALLS ON A
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REGULAR HOLIDAY, the overtime pay is plus 30% of the basic hourly rate
Pr
which includes 160% additional compensation.
r
Ba
• What is the distinction between PREMIUM PAY and OVERTIME PAY?

Ba
s
“Premium pay” refers to the additional compensation required by law for work
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performed within the eight (8) normal hours of work on non-working days, such
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as rest days and regular and special holidays.

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“Overtime pay” refers to the additional compensation for work performed

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beyond the eight (8) normal hours of work on a given day. An employee is
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entitled to both premium pay and overtime pay if he works on a non-working

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day and renders overtime work on the same day.

Ba
R
O
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• What is emergency overtime work? (Article 89, Labor Code).

et
a. General rule.
es
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The general rule is that no employee may be compelled to render overtime work
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C
against his will. The reason is that this will constitute involuntary servitude.
b. Exceptions when employee may be compelled to render overtime work:
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1. When the country is at war or when any other national or local emergency
R
has been declared by the National Assembly or the Chief Executive;

In
2. When overtime work is necessary to prevent loss of life or property or in case

an
of imminent danger to public safety due to actual or impending emergency

in the locality caused by serious accident, fire, floods, typhoons, earthquake,
epidemic or other disasters or calamities;
es
h
3. When there is urgent work to be performed on machines, installations or

equipment, or in order to avoid serious loss or damage to the employer or
C
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some other causes of similar nature;

4. When the work is necessary to prevent loss or damage to perishable goods;
5. When the completion or continuation of work started before the 8th hour is
o
necessary to prevent serious obstruction or prejudice to the business or

R
operations of the employer; and

an
30
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Legal Practitioner
6. When overtime work is necessary to avail of favorable weather or
w
environmental conditions where performance or quality of work is
dependent thereon.
ie
o May an employee validly refuse to render overtime work under any of the
afore-said circumstances?
ev
No. When an employee refuses to render emergency overtime work under any
R
of the foregoing conditions, he may be dismissed on the ground of
insubordination or willful disobedience of the lawful order of the employer.
•
al
Can overtime pay be waived?
n
No. The right to claim overtime pay is not subject to a waiver. Such right is governed
by law and not merely by the agreement of the parties.
io
(b.6.) Computation of Additional Compensation (Rates Only)

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See the above discussions under Night-Shift Differential and Overtime Work.
i e
c. Rest Periods
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(c.1.) Weekly Rest Period
o
• What is the duration of weekly rest period?
R
r
Pr
It shall be the duty of every employer, whether operating for profit or not, to provide
r
Ba
each of his employees a rest period of not less than twenty-four (24) consecutive
hours after every six (6) consecutive normal work days.
Ba
s
• Is the employer’s prerogative to determine the rest period of its employees

es
subject to limitations?
e
bl
Yes. The employer shall determine and schedule the weekly rest day of his
employees subject to CBA and to such rules and regulations as the DOLE Secretary
li
may provide. However, the employer shall respect the preference of employees as
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to their weekly rest day when such preference is based on religious grounds.
r
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Ba
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(c.2) Emergency Rest Day Work

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• When can an employer require work on a rest day?

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The employer may require any of its employees to work on their scheduled rest day
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for the duration of the following emergency and exceptional conditions:

h
rn
a. In case of actual or impending emergencies caused by serious accident, fire,

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C
flood, typhoon, earthquake, epidemic or other disaster or calamity, to

prevent loss of life and property, or in case of force majeure or imminent
o
danger to public safety;

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b. In case of urgent work to be performed on machineries, equipment, or

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installations, to avoid serious loss which the employer would otherwise suffer;
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c. In the event of abnormal pressure of work due to special circumstances,

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where the employer cannot ordinarily be expected to resort to other

measures;
d. To prevent serious loss of perishable goods;
es
h
e. Where the nature of the work is such that the employees have to work
continuously for seven (7) days in a week or more, as in the case of the crew
C
bl
members of a vessel to complete a voyage and in other similar cases; and

f. When the work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon.
o
R
an
31
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Legal Practitioner
d. Holidays
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(d.1) Holiday pay
ie
• What are the regular and special holidays?
ev
(a) Regular Holidays
New Year's Day - January 1
R
Maundy Thursday - Movable Date
Good Friday - Movable Date
Eidul Fitr
Eidul Adha
al -
-
Movable Date
Movable Date
Araw ng Kagitingan - Monday nearest April 9
n
Labor Day - Monday nearest May 1
io
Independence Day - Monday nearest June 12

National Heroes Day - Last Monday of August
Bonifacio Day - Monday nearest November 30
ss
e
Christmas Day - December 25
i
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Rizal Day - Monday nearest December 30
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(b) Nationwide Special Holidays
o
R
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Chinese New Year - Movable Date

Pr
EDSA People Power - February 25
r
Ba
Revolution Ba
Black Saturday - Movable Date
s
Ninoy Aquino Day - Monday nearest August 21

All Saints’ Day - November 1
es
Feast of Immaculate - December 8

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Conception of Mary
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• How many are the guaranteed paid regular holidays?

li
o
There are twelve (12) paid regular holidays in a year. This is important for purposes r
n
Ba
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of reckoning certain divisors and computation of employee benefits. The provision

on holiday pay is mandatory, regardless of whether an employee is paid on a
O
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monthly or daily basis.

et
• What is the Holiday Pay Rule?

es
h
“Holiday pay” refers to the payment of the regular daily wage for any unworked
rn
bl
regular holiday. The Holiday Pay Rule, therefore, applies to entitlement to holiday
C
pay during regular holidays and not during special non-working days. Thus, every
employee covered by the Holiday Pay Rule is entitled to the minimum wage rate
o
te
(Daily Basic Wage and COLA). This means that the employee is entitled to at least
100% of his minimum wage rate even if he did not report for work, provided he is
R
present or is on leave of absence with pay on the workday immediately preceding

In
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the holiday. Should the worker work on that day, such work performed on that day
would merit at least twice or two hundred percent (200%) of the wage rate of the
employee.
es
h
• What is the coverage of the Holiday Pay Rule? Who are exempted employees?
C
bl
As a general rule, the holiday pay benefit is applicable to all employees. The
following, however, are not covered by this benefit as they are considered
o
exempted employees:
R
1. Government employees, whether employed by the National Government

or any of its political subdivisions, including those employed in
an
32
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Legal Practitioner
government-owned and/or controlled corporations with original charters
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or created under special laws;
2. Those of retail and service establishments regularly employing less than ten
ie
(10) workers;
3. Kasambahay and persons in the personal service of another;
ev
4. Managerial employees, if they meet all of the following conditions:
4.1. Their primary duty is to manage the establishment in which they are
R
employed or of a department or subdivision thereof;
4.2. They customarily and regularly direct the work of two or more
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employees therein; and
4.3. They have the authority to hire or fire other employees of lower rank;
or their suggestions and recommendations as to hiring, firing, and
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promotion, or any other change of status of other employees are
io
given particular weight.
5. Officers or members of a managerial staff, if they perform the following

ss
duties and responsibilities:
i e
fe
5.1. Primarily perform work directly related to management policies of their
ev
employer;
5.2. Customarily and regularly exercise discretion and independent
o
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judgment;
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5.3. (a) Regularly and directly assist a proprietor or managerial employee

Pr
in the management of the establishment or subdivision thereof in
r
Ba
which he or she is employed; or (b) execute, under general

supervision, work along specialized or technical lines requiring special
Ba
s
training, experience, or knowledge; or (c) execute, under general

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supervision, special assignments and tasks; and

5.4. Do not devote more than twenty percent (20%) of their hours worked
e
in a workweek to activities which are not directly and closely related

bl
to the performance of the work described in paragraphs 5.1, 5.2, and

5.3 above.
li
o
6. Field personnel and other employees whose time and performance are r
n
Ba
R
unsupervised by the employer, including those who are engaged on task

or contract basis, purely commission basis or those who are paid a fixed
O
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amount for performing work irrespective of the time consumed in the

performance thereof.
et
es
• How is premium pay for REGULAR HOLIDAYS computed?

h
rn
bl
C
o If the employee did not work, he/she shall be paid 100 percent of his/her
salary for that day. Computation: (Daily rate + Cost of Living Allowance) x
100%. The COLA is included in the computation of regular holiday pay.
o
te
o If the employee worked, he/she shall be paid 200 percent of his/her regular
salary for that day for the first eight hours. Computation: (Daily rate + COLA)
R
x 200%. The COLA is also included in computation of regular holiday pay.

In
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o If the employee worked in excess of eight hours (overtime work), he/she shall
be paid an additional 30 percent of his/her hourly rate on said day.
Computation: Hourly rate of the basic daily wage x 200% x 130% x number of
es
h
hours worked.
o If the employee worked during a regular holiday that also falls on his/her rest
C
bl
day, he/she shall be paid an additional 30 percent of his/her daily rate of 200
percent. Computation: (Daily rate + COLA) x 200%] + (30% [Daily rate x
200%)].
o
o If the employee worked in excess of eight hours (overtime work) during a

regular holiday that also falls on his/her rest day, he/she shall be paid an
R
additional 30 percent of his/her hourly rate on said day. Computation: (Hourly

an
rate of the basic daily wage x 200% x 130% x 130% x number of hours worked);
33
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Legal Practitioner
Simplified Computation:
w
a. If work is rendered on an employee’s regular workday -
ie
• If unworked – 100%
ev
• If worked – 1st 8 hours – 200%
• Work in excess of 8 hours – plus 30% of hourly rate on said day
R
b. If it is an employee’s rest day -
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• If unworked – 100%
• If worked – first 8 hours – plus 30% of 200%
n
• How is premium pay for SPECIAL (NON-WORKING) DAYS OR SPECIAL
io
HOLIDAYS computed?
If the employee did not work, the “no work, no pay” principle shall
ss
e
apply, unless there is a favorable company policy, practice, or CBA
i
granting payment on a special day.
fe
ev
o If the employee worked, he/she shall be paid an additional 30 percent
of his/her daily rate on the first eight hours of work. Computation: [(Daily
o
rate x 130%) + COLA).
R
o If the employee worked in excess of eight hours (overtime work),
r
Pr
he/she shall be paid an additional 30 percent of his/her hourly rate on
r
Ba
said day. Computation: (Hourly rate of the basic daily wage x 130% x
130% x number of hours worked).
Ba
If the employee worked during a special day that also falls on his/her
s
o
rest day, he/she shall be paid an additional fifty percent of his/her daily
es
rate on the first eight hours of work. Computation: [(Daily rate x 150%)
e
+ COLA].
bl
o If the employee worked in excess of eight hours (overtime work) during

a special day that also falls on his/her rest day, he/she shall be paid an
li
additional 30 percent of his/her hourly rate on said day. Computation:

o
(Hourly rate of the basic daily wage x 150% x 130% x number of hours
r
n
worked).
Ba
R
O
an
• Simplified Computation:
a. If unworked -
et
es
h
• No pay, except if there is a company policy, practice, or collective

rn
bargaining agreement (CBA) which grants payment of wages on special

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C
days even if unworked.

o
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b. If worked -
R
• First 8 hours – plus 30% of the daily rate of 100%

In

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c. If falling on the employee’s rest day and if worked -

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h
• First 8 hours – plus 50% of the daily rate of 100%

C
bl
• What are the effects of absences on the computation of holiday pay?

1. Employees on leave of absence with pay - entitled to holiday pay when they
o
are on leave of absence with pay.

R
2. Employees on leave of absence without pay on the day immediately

preceding the regular holiday - may not be paid the required holiday pay if
an
they have not worked on such regular holiday.

34
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Legal Practitioner
3. Employees on leave while on SSS or employee’s compensation benefits -
w
Employers should grant the same percentage of the holiday pay as the
benefit granted by competent authority in the form of employee’s
ie
compensation or social security payment, whichever is higher, if they are not
reporting for work while on such benefits.
ev
4. When day preceding regular holiday is a non-working day or scheduled rest
day - should not be deemed to be on leave of absence on that day, in
which case, employees are entitled to the regular holiday pay if they worked
R
on the day immediately preceding the non-working day or rest day.
e. Service Charge
al
• Under RA 11360, All service charges collected by hotels, restaurants and similar
n
establishments shall be distributed completely and equally among the covered
workers except managerial employees.
io
• What is the frequency of distribution for service charges?

The share of the employees should be distributed and paid to them not less often
than (a) once every two (2) weeks OR (b) twice a month at intervals not
ss
e
exceeding sixteen (16) days.
i
• What are the kinds of establishment covered by the law on service charge?
fe
ev
The rules on service charge apply only to establishments collecting service
charges, such as hotels, restaurants, lodging houses, night clubs, cocktail
o
lounges, massage clinics, bars, casinos and gambling houses, and similar
R
enterprises, including those entities operating primarily as private subsidiaries of
r
Pr
the government.
r
Ba
• Who are the employees covered by this law?

With the latest amendatory law cited above, all service charges collected by
Ba
hotels, restaurants and similar establishments shall be distributed completely and
s
equally among the covered workers except managerial employees.

es
• Who are not covered?

e
Specifically excluded from coverage are managerial employees, referring to

bl
any person vested with powers or prerogatives to lay down and execute
management policies or hire, transfer, suspend, lay-off
li
o
f. Occupational Safety and Health Standards Law [RA 11058]

r
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Ba
R
“OSH Standards” refer to a set of rules issued by DOLE which mandates the
adoption and use of appropriate practices, means, methods, operations or
O
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processes, and working conditions reasonably necessary to ensure safe and

healthful employment.
et
es
(f.1.) Covered Workplaces

h
rn
Refer to establishments, projects, sites, and all other places where work is being
bl
C
undertaken wherein the number of employees, nature of operations, and risk or

hazard involved in the business, as determined by the Secretary of Labor and
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Employment.
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(f.2.) Duties of Employers, Workers, and Other Persons

R
In
• Duties of Employers
an
Every employer, contractor or subcontractor, if any, and any person who manages,
controls or supervises the work being undertaken shall:
es
h
1. Furnish the workers a place of employment free from hazardous conditions that
C
bl
are causing or are likely to cause death, illness or physical harm to the workers;
2. Give complete job safety instructions or orientation to all the workers especially
to those entering the job for the first time, including those relating to
o
familiarization with their work environment;

R
3. Inform workers of:

a. the hazards associated with their work,
an
b. health risks involved or to which they are exposed to,

35
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Legal Practitioner
c. preventive measures to eliminate or minimize the risks, and steps to be taken
w
in cases of emergency;
4. Use only approved devices and equipment for the workplace
ie
5. Comply with OSH standards including training, medical examination and,
where necessary, provision of protective and safety devices;
ev
6. Allow workers and their safety and health representatives to participate actively
in the process of organizing, planning, implementing, and evaluating the safety
and health program to improve safety and health in the workplace; and
R
7. Provide, where necessary, for measures to deal with emergencies and
accidents including first-aid arrangements.
•
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Duties of Workers
n
1. Every worker shall participate in ensuring compliance with OSH standards in the
io
workplace.
2. The worker shall make proper use of all safeguards and safety devices furnished
for the worker’s protection and that of others, and shall observe instructions to
ss
prevent accidents or imminent danger situations in the workplace.
e
3. Worker shall observe the prescribed steps to be taken in cases of emergency.
i
fe
4. The worker shall report to the supervisor any work hazard that may be
ev
discovered in the workplace.
o
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• Duties of Other Persons
r
Pr
“Other Persons” includes any person, including builder or contractor who visits,
r
Ba
builds, renovates or installs devices or conducts business in any establishment or

workplace. They have the duty to comply with this Law.
Ba
s
es
(f.3.) Workers’ Right to Know

e
All workers shall be appropriately informed by the employer about all types of
bl
hazards in the workplace, provided access to training and education on chemical

safety, and to orientation on the data sheet of chemical safety, electrical safety,
li
mechanical safety, and ergonomical safety.

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(f.4.) Workers’ Right to Refuse Unsafe Work r

n
Ba
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Worker has the right to refuse to work without threat or reprisal from the employer if:
O
an
a. As determined by the DOLE, an imminent danger situation exists in the

workplace that may result in illness, injury, or death; and
et
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b. Corrective actions to eliminate the danger have not been undertaken by the
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employer.
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C
(f.5.) Workers’ Right to Personal Protective Equipment (PPE)

PPE shall be provided to employees free of charge. PPE shall include, whenever
o
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necessary by reason of the hazardous work process or environment, protection for

their eyes, face, hands and feet, and lifeline, safety belt, or harness, gas or dust
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respirators or masks, and protective shields.

In
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2. Wages
a. Definitions
es
h
(a.1.) Wage v. Salary

C
bl
The term “wage” is used to characterize the compensation paid for manual skilled
or unskilled labor. “Salary,” on the other hand, is used to describe the compensation
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for higher or superior level of employment.

R
In cases of execution, attachment or garnishment of the compensation of an

employee received from work issued by the court to satisfy a judicially-determined
an
obligation, a distinction should be made whether such compensation is considered

36
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Legal Practitioner
“wage” or “salary.” Under Article 1708 of the Civil Code, if considered a “wage,”
w
the employee’s compensation shall not be subject to execution or attachment or
garnishment, except for debts incurred for food, shelter, clothing and medical
ie
attendance. If deemed a “salary,” such compensation is not exempt from
execution or attachment or garnishment. Thus, the salary, commission and other
ev
remuneration received by a managerial employee (as distinguished from an
ordinary worker or laborer) cannot be considered wages. Salary is understood to
relate to a position or office, or the compensation given for official or other service;
R
while wage is the compensation for labor.1
(a.2.) Facilities v. Supplements
al
• What are facilities?
n
“Facilities” include articles or services for the benefit of the employee or his family
io
but does not include tools of the trade or articles or services primarily for the benefit
of the employer or necessary to the conduct of the employer’s business. They are
items of expense necessary for the laborer’s and his family’s existence and
ss
e
subsistence which form part of the wage and when furnished by the employer, are
i
deductible therefrom, since if they are not so furnished, the laborer would spend
fe
ev
and pay for them just the same.
o
• What are supplements?
R
r
Pr
The term “supplements” means extra remuneration or special privileges or benefits
r
Ba
given to or received by the laborers over and above their ordinary earnings or
wages.
Ba
s
• What are the distinctions between facilities and supplements?

es
The benefit or privilege given to the employee which constitutes an extra

bl
remuneration over and above his basic or ordinary earning or wage is supplement;
and when said benefit or privilege is made part of the laborer’s basic wage, it is a
li
facility. The criterion is not so much with the kind of the benefit or item (food,
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lodging, bonus or sick leave) given but its purpose. Thus, free meals supplied by the
r
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ship operator to crew members, out of necessity, cannot be considered as facilities

Ba
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but supplements which could not be reduced having been given not as part of
O
an
wages but as a necessary matter in the maintenance of the health and efficiency
of the crew during the voyage.
et
es
What is the rule on deductibility of facilities and supplements?

h
•
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bl
C
Facilities are deductible from wage but not supplements.
b. Principles
o
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(b.1.) No Work, No Pay

R
In
“No work, no pay” or “fair day’s wage for fair day’s labor” remains to be adhered
an
to in our jurisdiction as the basic factor in determining the wages of employees. If

the worker does not work, he is generally not entitled to any wage or pay. The
exception is when it was the employer who unduly prevented him from working
es
h
despite his ableness, willingness and readiness to work; or in cases where he is

illegally locked out or illegally suspended or illegally dismissed, or otherwise illegally
C
bl
prevented from working, in which event, he should be entitled to his wage.

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R
an
1 Gaa v. CA, infra; See also Equitable Banking Corp. v. Sadac, G.R. No. 164772, June 8, 2006.
37
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Legal Practitioner
(b.2.) Equal Pay for Equal Work
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"Equal pay for equal work," meaning, "persons who work with substantially equal
ie
qualification, skill, effort and responsibility, under similar conditions, should be paid
similar salaries," has been institutionalized in our jurisdiction. Such that "if an employer
accords employees the same position and rank, the presumption is that these
ev
employees perform equal work" as "borne by logic and human experience." The
ramification is that "(i)f the employer pays one employee less than the rest, it is not
R
for that employee to explain why he receives less or why the others receive more.
That would be adding insult to injury. The employer has discriminated against that
employee; it is for the employer to explain why the employee is treated unfairly."
al
(International School Alliance of Educators v. Quisumbing, et al., G.R. No. 128845)
(b.3.) Fair Wage for Fair Work
n
io
See above.
(b.4.) Non-Diminution of Benefits

ss
e
Albeit Article 100 is clear that the principle of non-elimination and non-diminution
i
of benefits apply only to the benefits being enjoyed “at the time of the
fe
ev
promulgation” of the Labor Code, the Supreme Court has consistently cited Article
100 as being applicable even to benefits granted after said promulgation. It has, in
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fact, been treated as the legal anchor for the declaration of the invalidity of so
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many acts of employers deemed to have eliminated or diminished the benefits of
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employees.
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Ba
There is diminution of benefits when the following requisites are present: Ba

1. The grant or benefit is founded on a policy or has ripened into a practice
s
over a long period of time;

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2. The practice is consistent and deliberate;

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3. The practice is not due to error in the construction or application of a

bl
doubtful or difficult question of law; and

4. The diminution or discontinuance is done unilaterally by the employer.
li
The 2014 case of Wesleyan University-Philippines v. Wesleyan University-Philippines

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Faculty and Staff Association, succinctly pointed out that the Non-Diminution Rule r
n
Ba
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found in Article 100 of the Labor Code explicitly prohibits employers from eliminating
or reducing the benefits received by their employees. This rule, however, applies
O
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only if the benefit is based on any of the following:

et
(1) An express policy;

es
(2) A written contract; or

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(3) A company practice.

rn
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There is not much controversy if the benefit involved is provided for under Nos. 1
and 2 above. Thus, if it is expressly laid down in a written policy unilaterally
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promulgated by the employer, the employer is duty-bound to adhere and comply

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by its own policy. It cannot be allowed to renege from its commitment as expressed
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in the policy.
In
an
If the benefit is granted under a written contract such as an employment contract

or a collective bargaining agreement (CBA), the employer is likewise under legal
compulsion to so comply therewith.
es
h
As to No. 3 above:
C
Company practice is a custom or habit shown by an employer’s repeated, habitual

bl
customary or succession of acts of similar kind by reason of which, it gains the status
of a company policy that can no longer be disturbed or withdrawn.
o
To ripen into a company practice that is demandable as a matter of right, the

R
giving of the benefit should not be by reason of a strict legal or contractual

obligation but by reason of an act of liberality on the part of the employer.
an
38
n
,I
Legal Practitioner
• What are the criteria that may be used to determine existence of company
w
practice?
ie
Since there is no hard and fast rule which may be used and applied in determining
whether a certain act of the employer may be considered as having ripened into
ev
a practice, the following criteria may be used to determine whether an act has
ripened into a company practice:
R
(1) The act of the employer has been done for a considerable period of time;
(2) The act should be done consistently and intentionally; and
(3) The act should not be a product of erroneous interpretation or construction
al
of a doubtful or difficult question of law or provision in the CBA.
n
These shall be discussed below:
io
1. THE ACT OF THE EMPLOYER HAS BEEN DONE FOR A CONSIDERABLE PERIOD OF
TIME.
ss
If done only once as in the case of Philippine Appliance Corporation (Philacor) v.
e
CA, where the CBA signing bonus was granted only once during the 1997 CBA
i
fe
negotiation, the same cannot be considered as having ripened into a company
ev
practice.
o
In the following cases, the act of the employer was declared company practice
R
because of the considerable period of time it has been practiced:
r
Pr
(a) Davao Fruits Corporation v. Associated Labor Unions. - The act of the
r
Ba
company of freely and continuously including in the computation of the 13th Ba

month pay, items that were expressly excluded by law has lasted for six (6)
s
years, hence, was considered indicative of company practice.

es
(b) Sevilla Trading Company v. A. V. A. Semana. - The act of including non-basic

e
benefits such as paid leaves for unused sick leave and vacation leave in the
bl
computation of the employees’ 13th month pay for at least two (2) years was
considered a company practice.
li
(c) The 2010 case of Central Azucarera de Tarlac v. Central Azucarera de Tarlac
o
Labor Union-NLU, also ruled as company practice the act of petitioner of r

n
Ba
R
granting for thirty (30) years, its workers the mandatory 13th month pay
computed in accordance with the following formula: Total Basic Annual
O
an
Salary divided by twelve (12) and Including in the computation of the Total
Basic Annual Salary the following: basic monthly salary; first eight (8) hours
et
es
overtime pay on Sunday and legal/special holiday; night premium pay; and
h
vacation and sick leaves for each year.

rn
bl
2. THE ACT SHOULD BE DONE CONSISTENTLY AND INTENTIONALLY.

C
The following cases may be cited to illustrate this principle:

o
te
(a) Tiangco v. Leogardo, Jr., where the employer has consistently been granting
fixed monthly emergency allowance to the employees from November, 1976
R
but discontinued this practice effective February, 1980 insofar as non-working

In
an
days are concerned based on the principle of “no work, no pay.” The
Supreme Court ruled that the discontinuance of said benefit contravened
Article 100 of the Labor Code which prohibits the diminution of existing
es
h
benefits.
3. THE ACT SHOULD NOT BE A PRODUCT OF ERRONEOUS INTERPRETATION OR
C
bl
CONSTRUCTION OF A DOUBTFUL OR DIFFICULT QUESTION OF LAW OR PROVISION

IN THE CBA.
o
The general rule is that if it is a past error that is being corrected, no vested right may
be said to have arisen therefrom nor any diminution of benefit may have resulted
R
by virtue of the correction thereof. The error, however, must be corrected

immediately after its discovery; otherwise, the rule on non-diminution of benefits
an
would still apply.

39
n
,I
Legal Practitioner
The following cases would illuminate this principle:
w
(a) Globe Mackay Cable and Radio Corporation v. NLRC, where the Supreme
ie
Court ruled on the proper computation of the cost-of-living allowance (COLA)
for monthly-paid employees. Petitioner corporation, pursuant to Wage Order
No. 6 (effective October 30, 1984), increased the COLA of its monthly-paid
ev
employees by multiplying the P3.00 daily COLA by 22 days which is the number
of working days in the company. The union disagreed with the computation,
R
claiming that the daily COLA rate of P3.00 should be multiplied by 30 days which
has been the practice of the company for several years. The Supreme Court,
however, upheld the contention of the petitioner corporation. It held that the
al
grant by the employer of benefits through an erroneous application of the law
due to absence of clear administrative guidelines is not considered a voluntary
n
act which cannot be unilaterally discontinued.
io
(b) TSPIC Corp. v. TSPIC Employees Union [FFW], where the Supreme Court
reiterated the rule enunciated in Globe-Mackay, that an erroneously granted
benefit may be withdrawn without violating the prohibition against non-
ss
diminution of benefits. No vested right accrued to individual respondents when
e
TSPIC corrected its error by crediting the salary increase for the year 2001
i
fe
against the salary increase granted under Wage Order No. 8, all in accordance
ev
with the CBA. Hence, any amount given to the employees in excess of what
they were entitled to, as computed above, may be legally deducted by TSPIC
o
R
from the employees’ salaries.
r
Pr
But if the error does not proceed from the interpretation or construction of a law or
r
Ba
a provision in the CBA, the same may ripen into a company practice. Ba
Example: Hinatuan Mining Corporation and/or the Manager v. NLRC, where the act
s
of the employer in granting separation pay to resigning employees, despite the fact
that the Labor Code does not grant it, was considered an established employer
es
practice.
e
bl
c. Payment of Wages
li
• What is the manner and form of payment of wages?

o
r
n
As a general rule, wages should be paid in legal tender and the use of tokens,
Ba
R
promissory notes, vouchers, coupons or any other form alleged to represent legal
O
an
tender is prohibited even when expressly requested by the employee. A similar

requirement that the laborer’s wages be paid in legal currency is provided in the
et
Civil Code.
es
h
As an exception, however, payment of wages by bank checks, postal checks or

rn
bl
money orders may be allowed only under any of the following circumstances:
C
o Where such manner of wage payment is customary on the date of the

o
te
effectivity of the Labor Code; or

Where it is stipulated in a collective bargaining agreement (CBA); or
R
o
Where all the following conditions are met:
In
o
an
a. There is a bank or other facility for encashment within a radius of one (1)
kilometer from the workplace;
es
h
b. The employer or any of his agents or representatives does not receive any
pecuniary benefit directly or indirectly from the arrangement;
C
c. The employees are given reasonable time during banking hours to

bl
withdraw their wages from the bank which time shall be considered as
compensable hours worked if done during working hours; and
o
d. The payment by check is with the written consent of the employees

concerned if there is no collective agreement authorizing the payment of
R
wages by bank checks.

an
40
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Legal Practitioner
• How often should wages be paid?
w
The general rule is that wages should be paid not less often than once every two (2)
ie
weeks or twice a month at intervals not exceeding sixteen (16) days.
ev
The exception is when payment of wages cannot be made with such regularity due
to force majeure or circumstances beyond the employer’s control, in which case, the
employer should pay the wages immediately after such force majeure or
R
circumstances beyond his control have ceased.
al
d. Prohibitions Regarding Wages
(d.1.) NON-INTERFERENCE BY EMPLOYER IN THE DISPOSAL BY EMPLOYEES OF THEIR

n
WAGES
io
No employer is allowed to limit or otherwise interfere with the freedom of any

employee to dispose of his wages and no employer shall in any manner oblige any
of his employees to patronize any store or avail of the services offered by any
ss
person.
i e
fe
ev
(d.2.) WAGES NOT SUBJECT TO EXECUTION OR ATTACHMENT; EXCEPTION.
The general rule is that laborer’s wages are not subject to execution or attachment.
o
R
The exception is when such execution or attachment is made for debts incurred for
r
food, shelter, clothing and medical attendance.

Pr
r
Ba
(d.3.) PROHIBITION ON DEDUCTIONS FROM WAGES

Ba
s
• May employer deduct from wage of employees?

es
The general rule is that an employer, by himself or through his representative, is

e
PROHIBITED from making any deductions from the wages of his employees. The
bl
employer is not allowed to make unnecessary deductions without the knowledge

or authorization of the employees.
li
o
• Are there EXCEPTIONS to this rule? r

n
Ba
R
Yes.
O
an
(a) In cases where the worker is insured with his consent by the employer, and the
et
deduction is to recompense the employer for the amount paid by him as

es
premium on the insurance;

h
(b) For union dues, in cases where the right of the worker or his union to check-off
rn
bl
has been recognized by the employer or authorized in writing by the individual

C
worker concerned; and

(c) In cases where the employer is authorized by law or regulations issued by the
o
te
DOLE Secretary.
(d) Deductions for loss or damage under Article 114 of the Labor Code;
R
(e) Deductions made for agency fees from non-union members who accept the
In
an
benefits under the CBA negotiated by the bargaining union. This form of
deduction does not require the written authorization of the non-bargaining
union member concerned;
es
h
(f) Deductions for value of meal and other facilities;

(g) Deductions for premiums for SSS, PhilHealth, employees’ compensation and
C
Pag-IBIG;
bl
(h) Withholding tax mandated under the National Internal Revenue Code (NIRC);
(i) Withholding of wages because of the employee’s debt to the employer which
o
is already due;
(j) Deductions made pursuant to a court judgment against the worker under
R
circumstances where the wages may be the subject of attachment or

execution but only for debts incurred for food, clothing, shelter and medical
an
attendance;
41
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Legal Practitioner
(k) When deductions from wages are ordered by the court;
w
(d.4.) PROHIBITION AGAINST DEPOSIT REQUIREMENT.
ie
• Article 114 of the Labor Code prohibits the employer to require that workers
should make a deposit from which deductions shall be made for the
ev
reimbursement of loss of tools, materials or equipment supplied by him, or any
damages thereto.
R
• Permissible Deductions For Loss Or Damages.
al
If the employer is engaged in a trade, occupation or business where there is
such practice of making deductions or requiring deposits to answer for the
n
reimbursement of loss of or damage to tools, materials or equipment supplied
by the employer to the employee.
io
(d.5.) PROHIBITION ON WITHHOLDING OF WAGES.

ss
e
• Article 116 of the Labor Code prohibits any person, whether employer or not,
i
directly or indirectly, to withhold any amount from the wages of a worker.
fe
ev
• Under Article 1706 of the Civil Code, withholding of the wages, except for a debt
due, is not allowed to be made by the employer.
o
• Moreover, under Article 1709 of the same Code, the employer is not allowed to
R
seize or retain any tool or other articles belonging to the laborer.
r
Pr
(d.6.) KICKBACKS.
r
Ba
Article 116 of the Labor Code also prohibits “kickback” which consists in the act of
Ba
s
any person, whether employer or not, directly or indirectly, to induce a worker to

give up any part of his wages by force, stealth, intimidation, threat or by any other
es
means whatsoever, without the worker’s consent.

e
bl
(d.7.) PROHIBITION AGAINST DEDUCTION TO ENSURE EMPLOYMENT.

li
Article 117 of the Labor Code prohibits any person, whether the employer himself
o
or his representative or an intermediary, to require that a deduction be made or to

r
n
actually make any deduction from the wages of any employee or worker, for the
Ba
R
benefit of such employer or his representative or an intermediary, as consideration

O
an
of a promise of employment or, when already employed, for the continuation of

such employment or retention therein.
et
es
h
(d.8.) RETALIATORY ACTIONS BY EMPLOYER.

rn
bl
C
Article 118 of the Labor Code prohibits the employer:

o
(a) to refuse to pay the wages and benefits of an employee; or

te
(b) to reduce his wages and benefits; or

R
(c) to discharge him from employment; or

In
(d) to discriminate against him in any manner;

an
on account and by reason of said employee’s:

es
h
(1) act of filing any complaint or institution of any proceeding under Title II
[Wages], Book III of the Labor Code; or
C
bl
(2) act of testifying in said proceedings or when he is about to testify therein.

o
(d.9.) FALSE STATEMENT, REPORT OR RECORD.

R
Article 119 of the Labor Code prohibits any person, whether employer or not, to
make any false statement, report or record required to be filed or kept in
an
42
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Legal Practitioner
accordance with and pursuant to the provisions of the Labor Code, knowing such
w
statement, report or record to be false in any material respect.
ie
Examples: Payrolls, time records, employment records and production records,
among others.
ev
e. Wage Distortion
(1) Concept
R
“Wage distortion” contemplates a situation where an increase in prescribed wage
al
rates results in either of the following:
1. Elimination of the quantitative differences in the rates of wages or salaries; or
n
2. Severe contraction of intentional quantitative differences in wage or salary
rates between and among employee groups in an establishment as to
io
effectively obliterate the distinctions embodied in such wage structure based

on the following criteria:
ss
e
a. Skills;
i
b. Length of service; or
fe
ev
c. Other logical bases of differentiation.
o
Wage distortion presupposes a classification of positions and ranking of these
R
positions at various levels. One visualizes a hierarchy of positions with corresponding
r
Pr
ranks basically in terms of wages and other emoluments. Where a significant
r
Ba
change occurs at the lowest level of positions in terms of basic wage without a
corresponding change in the other level in the hierarchy of positions, negating as
Ba
a result thereof the distinction between one level of position from the next higher
s
level, and resulting in a parity between the lowest level and the next higher level or
es
rank, between new entrants and old hires, there exists a wage distortion. xxx. The
e
concept of wage distortion assumes an existing grouping or classification of

bl
employees which establishes distinctions among such employees on some relevant

or legitimate basis. This classification is reflected in a differing wage rate for each
li
of the existing classes of employees.

o
• What are the elements of wage distortion? r

n
Ba
R
The four (4) elements of wage distortion are as follows:

O
an
(1) An existing hierarchy of positions with corresponding salary rates;

et
(2) A significant change in the salary rate of a lower pay class without a
es
concomitant increase in the salary rate of a higher one;

h
(3) The elimination of the distinction between the two levels; and
rn
bl
(4) The existence of the distortion in the same region of the country.
C
Normally, a company has a wage structure or method of determining the wages

o
of its employees. In a problem dealing with “wage distortion,” the basic assumption
te
is that there exists a grouping or classification of employees that establishes

R
distinctions among them on some relevant or legitimate bases.

In
an
Involved in the classification of employees are various factors such as the degrees
of responsibility, the skills and knowledge required, the complexity of the job, or
other logical basis of differentiation. The differing wage rate for each of the existing
es
h
classes of employees reflects this classification.

• What is the formula for rectifying or resolving wage distortion?
C
bl
Following is the formula for the correction of wage distortion in the pay scale
structures:
o
Minimum Wage = % x Prescribed Increase = Distortion Adjustment

R
Actual Salary
an
43
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Legal Practitioner
f. Minimum Wage Law
w
• What is minimum wage?
ie
The minimum wage rates prescribed by law shall be the basic cash wages without
ev
deduction therefrom of whatever benefits, supplements or allowances which the
employees enjoy free of charge aside from the basic pay.
R
• What is statutory minimum wage?
al
The term “statutory minimum wage” refers simply to the lowest basic wage rate
fixed by law that an employer can pay his workers.
n
• What is regional minimum wage rate?
io
The term “regional minimum wage rates” refers to the lowest basic wage rates that
an employer can pay his workers, as fixed by the Regional Tripartite Wages and
Productivity Boards (RTWPBs), and which shall not be lower than the applicable
ss
statutory minimum wage rates.
i e
fe
• What are included/excluded in the term “wage rate”?
ev
The term "wage rate" includes cost-of-living allowances as fixed by the RTWPB, but
o
R
excludes other wage-related benefits such as overtime pay, bonuses, night shift
r
differential pay, holiday pay, premium pay, 13th month pay, premium pay, leave
Pr
benefits, among others.
r
Ba
• Can COLA be integrated into the minimum wage?

Ba
s
es
Yes. The cost-of-living allowance (COLA) may be ordered integrated into the
minimum wage by the Regional Tripartite Wages and Productivity Board (“RTWPB”
e
or “Regional Board”).
bl
• What is COLA?
li
o
COLA is not in the nature of an allowance intended to reimburse expenses incurred r

n
Ba
R
by employees in the performance of their official functions. It is not payment in

consideration of the fulfillment of official duty. As defined, “cost of living” refers to
O
an
“the level of prices relating to a range of everyday items” or “the cost of purchasing
the goods and services which are included in an accepted standard level of
et
es
consumption.” Based on this premise, COLA is a benefit intended to cover increases

h
in the cost of living.

rn
bl
C
a. Payment by hours worked

An employee must be paid his or her wages for all hours worked. Note that if the
o
te
employee is made to work between 10pm to 6am, he/she shall be entitled to

night shift differential pay. If he/she works for more than eight (8) hours in a day,
R
he/she shall be entitled to overtime pay.

In
an
b. Payment by results
All workers paid by results, including homeworkers and those who are paid on piece
es
h
rate, takay, pakyaw (or pakyao) or task basis, shall receive not less than the applicable
minimum wage rates under the Regional Wage Orders for normal working hours which
C
bl
shall not exceed eight (8) hours a day, or a proportion thereof for work of less than the
normal working hours.
o
In cases of workers paid by results or on task basis involving work which cannot be
finished in two (2) weeks, payment of their wages should be made at intervals not
R
exceeding sixteen (16) days in proportion to the amount of work completed. Final
an
settlement should be made immediately upon completion of the work.
44
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Legal Practitioner
g. Holiday Pay
w
See discussion under Holidays in Major topic 3,Section B (d) Labor Standards -
ie
Holidays.
ev
h. 13th Month Pay
• Who are covered by the 13th month pay law?
R
Only rank-and-file employees, regardless of their designation or employment status
al
and irrespective of the method by which their wages are paid, are entitled to the
13th month pay benefit. Managerial employees are not entitled to 13th month pay.
n
• What is the minimum period of service required in a calendar year to be entitled
io
to 13th month pay?
To be entitled to the 13th month pay benefit, it is imposed as a minimum service

ss
requirement that the employee should have worked for at least one (1) month
e
during a calendar year.
i
fe
ev
• When should 13th month pay be paid?
o
R
It must be paid not later than December 24 of every year.
r
Pr
• Who are excluded from its coverage?
r
Ba
The following employers are not covered by the 13th month pay law:
Ba
s
1. The government and any of its political subdivisions, including government-

es
owned and controlled corporations, except those corporations operating

e
essentially as private subsidiaries of the government.

bl
2. Employers already paying their employees 13th month pay or more in a

calendar year or its equivalent at the time of the issuance of the Revised
li
Guidelines.
o
3. Employers of those who are paid on purely commission, boundary, or task

r
n
basis, and those who are paid a fixed amount for performing a specific work,
Ba
R
irrespective of the time consumed in the performance thereof, except where

O
an
the workers are paid on piece-rate basis, in which case, the employer shall
be covered by the Revised Guidelines insofar as such workers are concerned.
et
Workers paid on piece-rate basis shall refer to those who are paid a standard
es
amount for every piece or unit of work produced that is more or less regularly
h
replicated without regard to the time spent in producing the same.

rn
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C
• Are domestic workers or Kasambahays covered?

o
te
Yes. They are now covered under the Kasambahay Law.

R
• Are extras, casuals and seasonal employees entitled to 13th month pay?
In
an
Yes, they are entitled thereto.
Is 13th month pay part of wage?

es
•
h
13th month pay which is in the nature of additional income, is based on wage but
C
bl
not part of wage.
What is the minimum amount of the 13th month pay?

o
•
R
The minimum 13th month pay should not be less than one-twelfth (1/12) of the total
basic salary earned by an employee within a calendar year.
an
45
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Legal Practitioner
• What is meant by “basic salary” or “basic wage”?
w
“Basic salary” or “basic wage” contemplates work within the normal eight (8)
ie
working hours in a day. This means that the basic salary of an employee for purposes
of computing the 13th month pay should include all remunerations or earnings paid
ev
by the employer for services rendered during normal working hours.
For purposes of computing the 13th month pay, “basic salary” should be interpreted
to mean not the amount actually received by an employee, but 1/12 of their
R
standard monthly wage multiplied by their length of service within a given calendar
year.
3. Leaves
al
n
a. Service Incentive Leave
io
• What is service incentive leave?

ss
Every covered employee who has rendered at least one (1) year of service is
e
entitled to a yearly service incentive leave of five (5) days with pay.
i
fe
ev
The term “at least one year of service” should mean service within twelve (12)
months, whether continuous or broken, reckoned from the date the
o
R
employee started working, including authorized absences and paid regular
r
holidays, unless the number of working days in the establishment as a matter

Pr
of practice or policy, or that provided in the employment contract, is less than
r
Ba
twelve (12) months, in which case, said period should be considered as one
(1) year for the purpose of determining entitlement to the service incentive
Ba
s
leave benefit.
es
• Who are excluded from its coverage?

e
bl
All employees are covered by the rule on service incentive leave except:
li
1. Government employees, whether employed by the National Government or

o
any of its political subdivisions, including those employed in government-

r
n
owned and/or controlled corporations with original charters or created under

Ba
R
special laws;
O
an
2. Persons in the personal service of another;

3. Managerial employees, if they meet all of the following conditions:
et
3.1. Their primary duty is to manage the establishment in which they are
es
employed or of a department or subdivision thereof;

h
3.2. They customarily and regularly direct the work of two or more employees
rn
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C
therein; and
3.3. They have the authority to hire or fire other employees of lower rank; or
their suggestions and recommendations as to hiring, firing, and promotion,
o
te
or any other change of status of other employees are given particular

weight.
R
4. Officers or members of a managerial staff, if they perform the following duties

In
an
and responsibilities:
4.1. Primarily perform work directly related to management policies of their
employer;
es
h
4.2. Customarily and regularly exercise discretion and independent judgment;

4.3. (a) Regularly and directly assist a proprietor or managerial employee in
C
bl
the management of the establishment or subdivision thereof in which he

or she is employed; or (b) execute, under general supervision, work along
specialized or technical lines requiring special training, experience, or
o
knowledge; or (c) execute, under general supervision, special

assignments and tasks; and
R
4.4. Do not devote more than twenty percent (20%) of their hours worked in a
an
workweek to activities which are not directly and closely related to the
performance of the work described in paragraphs 4.1, 4.2, and 4.3 above;
46
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Legal Practitioner
5. Field personnel and those whose time and performance are unsupervised by
w
the employer, including those who are engaged on task or contract basis,
purely commission basis, or those who are paid a fixed amount for performing
ie
work irrespective of the time consumed in the performance thereof;
6. Those already enjoying this benefit;
ev
7. Those enjoying vacation leave with pay of at least five (5) days; and
8. Those employed in establishments regularly employing less than ten (10)
employees.
R
• Are KASAMBAHAYS entitled to SIL?
al
Yes, but the grant of 5-day SIL to domestic workers or kasambahays is not based on
Article 95 of the Labor Code but on the following provision of R.A. 10361:
n
“SEC. 29. Leave Benefits. – A domestic worker who has rendered at least
one (1) year of service shall be entitled to an annual service incentive leave of
io
five (5) days with pay: Provided, That any unused portion of said annual leave
shall not be cumulative or carried over to the succeeding years. Unused leaves
shall not be convertible to cash.”
ss
e
• Are unavailed service incentive leaves commutable to cash
i
fe
ev
Yes. The service incentive leave is commutable to its money equivalent if not
used or exhausted at the end of the year.
o
R
b. Maternity Leave
r
Pr
• Who are the women entitled to maternity leave?
r
Ba
All covered females, regardless of civil status, employment status, and the
Ba
s
legitimacy of her child, are entitled to maternity leave.

es
• What is the period of leave?

e
bl
1. Paid leave benefit granted to a qualified female worker in both the PUBLIC
n
SECTOR and the PRIVATE SECTOR (which is covered by the SSS, including those
li
in the informal economy), for the duration of:

o
r
n
Maternity Benefit LIVE CHILDBIRTH, MISCARRIAGE AND

Ba
R
regardless of the mode of EMERGENCY TERMINATION

O
an
delivery OF PREGNANCY
et
Period of maternity leave 105 days of paid leave 60 days of paid leave
es
h
For female worker Additional fifteen (15) None

rn
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C
qualified as a solo parent days of paid leave

under R.A. No. 8972, or the
"Solo Parents' Welfare Act
o
te
of 2000"
R
EXTENDED MATERNITY Available only in case of None

In
an
LEAVE: An option to live childbirth

extend for an additional
thirty (30) days without
es
h
pay
C
bl
FREQUENCY OF THE In every instance of live In every instance of

GRANT childbirth, regardless of pregnancy, miscarriage or
frequency emergency termination of
o
pregnancy, regardless of
frequency
R
an
47
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Legal Practitioner
w
ALLOCATION OF A female worker entitled Not available
MATERNITY LEAVE CREDITS to maternity leave
ie
to the child's father or benefits may, at her
alternate caregiver option, allocate up to
seven (7) days of said
ev
benefits to the child's
father or alternate
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caregiver
•
al
Is an unmarried woman entitled to maternity leave benefit?
Yes. For as long as a woman is pregnant, she is entitled to maternity leave benefit
n
regardless of whether she is married or unmarried.
io
c. Paternity Leave
What is paternity leave benefit?

ss
i e
o “Paternity leave” covers a married male employee allowing him not to report
fe
ev
for work for seven (7) CALENDAR days but continues to earn the
compensation therefor, on the condition that his spouse has delivered a child
o
or suffered miscarriage for purposes of enabling him to effectively lend
R
support to his wife in her period of recovery and/or in the nursing of the newly-
r
Pr
born child.
r
Ba
o “Delivery” includes childbirth or any miscarriage.

“Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers to a
o
Ba
woman who is legally married to the male employee concerned.
s
o “Cohabiting” refers to the obligation of the husband and wife to live together.
es
• What is the covered total number of deliveries?

bl
Every married employee in the private and public sectors is entitled to a paternity
li
leave of seven (7) calendar days with full pay for the first four (4) deliveries of the
o
legitimate spouse with whom he is cohabiting.

r
n
Ba
R
Paternity leave benefits are granted to the qualified employee after the delivery by
O
an
his wife, without prejudice to an employer allowing an employee to avail of the

benefit before or during the delivery, provided that the total number of days should
et
not exceed seven (7) calendar days for each delivery.

es
h
• Is an unavailed paternity leave benefit convertible to cash?

rn
bl
C
No. In the event that the paternity leave benefit is not availed of, said leave shall
not be convertible to cash.
o
te
Can the mother of the child allocate her leave benefits to the father of the child?
R
•
In
an
Yes. Any female worker entitled to maternity leave benefits as provided for herein
may, at her option, allocate up to seven (7) days of said benefits to the child’s
father, whether or not the same is married to the female worker. This benefit is over
es
h
and above that which the father is entitled to under the Paternity Leave Act.
C
bl
d. Solo Parent Leave
• What is the solo parent leave?

o
This is the leave benefit granted to a male or female solo parent to enable him/her
R
to perform parental duties and responsibilities where his/her physical presence is

an
required.
48
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Legal Practitioner
• How many days may be availed of as solo parent leave?
w
The solo parent leave shall not be more than seven (7) WORKING days every year
ie
to a solo parent who has rendered service of at least one (1) year, to enable
him/her to perform parental duties and responsibilities where his/her physical
ev
presence is required. This leave shall be non-cumulative.
It bears noting that this leave privilege is an additional leave benefit which is
R
separate and distinct from any other leave benefits provided under existing laws or
agreements.
•
al
Who is a solo parent?
n
The term "solo parent" refers to any individual who falls under any of the following
io
categories:
(1) A woman who gives birth as a result of rape and other crimes against
chastity even without a final conviction of the offender: Provided, That the
ss
e
mother keeps and raises the child;
i
fe
(2) Parent left solo or alone with the responsibility of parenthood due to death
ev
of spouse;
o
(3) Parent left solo or alone with the responsibility of parenthood while the
R
spouse is detained or is serving sentence for a criminal conviction for at
r
Pr
least one (1) year;
r
Ba
(4) Parent left solo or alone with the responsibility of parenthood due to Ba
physical and/or mental incapacity of spouse as certified by a public
s
medical practitioner;
es
(5) Parent left solo or alone with the responsibility of parenthood due to legal
e
separation or de facto separation from spouse for at least one (1) year, as
bl
long as he/she is entrusted with the custody of the children;

(6) Parent left solo or alone with the responsibility of parenthood due to
li
declaration of nullity or annulment of marriage as decreed by a court or

o
by a church as long as he/she is entrusted with the custody of the children; r

n
Ba
R
(7) Parent left solo or alone with the responsibility of parenthood due to
O
an
abandonment of spouse for at least one (1) year;

(8) Unmarried mother/father who has preferred to keep and rear her/his
et
es
child/children instead of having others care for them or give them up to a

h
welfare institution;
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bl
(9) Any other person who solely provides parental care and support to a child
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or children;
o
(10) Any family member who assumes the responsibility of head of family as a
te
result of the death, abandonment, disappearance or prolonged absence

R
of the parents or solo parent.

In
an
• What is the effect of change of status of the solo parent?
A change in the status or circumstance of the parent claiming benefits under the
es
law, such that he/she is no longer left alone with the responsibility of parenthood,
h
shall terminate his/her eligibility for these benefits.

C
bl
• Who are considered children under this law?

o
"Children" refer to those living with and dependent upon the solo parent for support
who are unmarried, unemployed and not more than eighteen (18) years of age, or
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even over eighteen (18) years but are incapable of self-support because of mental
and/or physical defect/disability.
an
49
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• Is an unavailed parental leave convertible to cash?
w
No. In the event that the parental leave is not availed of, said leave shall not be
ie
convertible to cash unless specifically agreed upon previously.
ev
• Can a female worker avail of both solo parent leave and maternity leave?
Yes. Under R.A. No. 11210 (Expanded Maternity Leave Law), in case the worker
R
qualifies as a solo parent, the worker shall be granted an additional fifteen (15) days
maternity leave with full pay.
al
e. Leave Benefits for Women Workers under Magna Carta of Women and Anti-
Violence against Women and Children of 2004
Gynelogical leave (R.A. 9710)
n
io
• What is this special leave benefit?
A special leave benefit for women was granted under R.A. No. 9710, otherwise
ss
known as “The Magna Carta of Women” [August 14, 2009]. Thus, any female
e
employee in the public and private sector regardless of age and civil status shall
i
fe
be entitled to a special leave of two (2) months with full pay based on her gross
ev
monthly compensation subject to existing laws, rules and regulations due to surgery
caused by gynecological disorders under the following terms and conditions:
o
R
1. She has rendered at least six (6) months continuous aggregate employment
r
Pr
service for the last twelve (12) months prior to surgery;
r
Ba
2. In the event that an extended leave is necessary, the female employee may
use her earned leave credits; and
Ba
3. This special leave shall be non-cumulative and non-convertible to cash.
s
“Gynecological disorders” refer to disorders that would require surgical procedures

es
such as, but not limited to, dilatation and curettage and those involving female
e
reproductive organs such as the vagina, cervix, uterus, fallopian tubes, ovaries,
bl
breast, adnexa and pelvic floor, as certified by a competent physician.

Gynecological surgeries shall also include hysterectomy, ovariectomy, and
li
mastectomy.
o
r
n
Is this leave similar to maternity leave?

Ba
•
R
O
an
No. This leave should be distinguished from maternity leave benefit, a separate and
distinct benefit, which may be availed of in case of childbirth, miscarriage,
et
complete abortion or emergency termination of pregnancy.

es
h
A woman, therefore, may avail of this special leave benefit in case she undergoes
rn
bl
surgery caused by gynecological disorder and at the same time maternity benefit
C
as these two leaves are not mutually exclusive.

o
Battered woman leave (R.A. No. 9262)

te
• What is this kind of leave?

R
In
an
This special leave is granted to a woman employee who is a victim under this law.
It is for a total of ten (10) days of paid leave of absence, in addition to other paid
leaves under the law. It is extendible when the necessity arises as specified in the
es
h
protection order. Its purpose is to enable the woman employee to attend to the
medical and legal concerns relative to said law. This leave is not convertible to
C
cash.
bl
• What is the requirement for its entitlement?

o
At any time during the application of any protection order, investigation,

R
prosecution and/or trial of the criminal case, a victim of Violence Against Women
and their Children (VAWC) who is employed shall be entitled to said paid leave of
an
up to ten (10) days. The Punong Barangay/kagawad or prosecutor or the Clerk of

50
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Legal Practitioner
Court, as the case may be, shall issue a certification at no cost to the woman that
w
such an action is pending, and this is all that is required for the employer to comply
with the 10-day paid leave.
ie
f. Compassionate Leaves
ev
Compassionate Leaves or Bereavement Leaves are currently not required under
the law. Nevertheless, employers are allowed to provide this special type of leave
R
to their employees, if agreed to by contract or in cases where such is provided for
in their Collective Bargaining Agreement as in the case of Continental Steel
Manufacturing Corp vs. Montaño et al, G.R. 182836. In this case, the relevant
provision provides:
al
“Section 2. BEREAVEMENT LEAVE—The Company agrees to grant a
n
bereavement leave with pay to any employee in case of death of the
io
employee’s legitimate dependent (parents, spouse, children, brothers

and sisters) based on the following…”
The Court held that the death of an unborn child qualifies as death under the
ss
e
bereavement leave provision and thus, the employee is entitled to such benefit:
i
“Life is not synonymous with civil personality. One need not acquire civil personality
fe
ev
first before he/she could die.” Additionally, it held that “being for the benefit of the
employee, CBA provisions on bereavement leave and other death benefits should
o
be interpreted liberally to give life to the intentions thereof. Time and again, the
R
Labor Code is specific in enunciating that in case of doubt in the interpretation of
r
Pr
any law or provision affecting labor, such should be interpreted in favor of labor. In
r
Ba
the same way, the CBA and CBA provisions should be interpreted in favor of labor.” Ba
4. Special Groups of Employees
s
a. Women
(a.1.) Discrimination
es
See discussion under Major Topic 2, C. Discriminatory Practices.

bl
(a.2.) Stipulation against Marriage

• Is the prohibition against marriage valid?
li
Article 136 of the Labor Code considers as an unlawful act of the employer to
o
require as a condition for or continuation of employment that a woman r

n
Ba
R
employee shall not get married or to stipulate expressly or tacitly that upon
getting married, a woman employee shall be deemed resigned or separated. It
O
an
is likewise an unlawful act of the employer, to actually dismiss, discharge,

discriminate or otherwise prejudice a woman employee merely by reason of her
et
es
marriage.
h
• What are the relevant jurisprudence on prohibition against marriage?

rn
bl
1. Philippine Telegraph and Telephone Company (PT&T) v. NLRC. - It was

C
declared here that the company policy of not accepting or considering as

disqualified from work any woman worker who contracts marriage runs afoul
o
te
of the test of, and the right against, discrimination afforded all women workers
by our labor laws and by no less than the Constitution.
R
In
2. Star Paper Corp. v. Simbol. - The following policies were struck down as invalid
an
for violating the standard of reasonableness which is being followed in our

jurisdiction, otherwise called the “Reasonable Business Necessity Rule”:
es
h
“1. New applicants will not be allowed to be hired if in case he/she has
[a] relative, up to [the] 3rd degree of relationship, already employed by
C
the company.
bl
“2. In case of two of our employees (both singles [sic], one male and
another female) developed a friendly relationship during the course of
o
their employment and then decided to get married, one of them

R
should resign to preserve the policy stated above.”

an
51
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Legal Practitioner
3. Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc.
w
In this case, the prohibition against marriage embodied in the following
stipulation in the employment contract was held as valid:
ie
“10. You agree to disclose to management any existing or future
relationship you may have, either by consanguinity or affinity with co-
ev
employees or employees of competing drug companies. Should it
pose a possible conflict of interest in management discretion, you
R
agree to resign voluntarily from the Company as a matter of Company
policy.”
al
The Supreme Court ruled that the 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
n
competitor companies upon its employees was held reasonable under the
io
circumstances 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
ss
competitor company will gain access to its secrets and procedures. Simply put,
e
the reason behind the validity of such a policy is the avoidance of CONFLICT OF
i
fe
INTEREST.
ev
(a.3.) Prohibited Acts
o
• What are the prohibited acts against women under the Labor Code?
R
Article 137 of the Labor Code and its implementing rule consider unlawful the
r
Pr
followings acts of the employer:
r
Ba
1. To discharge any woman employed by him for the purpose of preventing such Ba
woman from enjoying maternity leave, facilities and other benefits provided
s
under the Labor Code;

es
2. To discharge such woman on account of her pregnancy, or while on leave or

e
in confinement due to her pregnancy;

bl
3. To discharge or refuse the admission of such woman upon returning to her

work for fear that she may again be pregnant;
li
o
4. To discharge any woman or any other employee for having filed a complaint
r
n
or having testified or being about to testify under the Labor Code; or

Ba
R
5. To require as a condition for or continuation of employment that a woman

O
an
employee shall not get married or to stipulate expressly or tacitly that upon
getting married, a woman employee shall be deemed resigned or separated,
et
es
or to actually dismiss, discharge, discriminate or otherwise prejudice a woman

h
employee merely by reason of marriage.

rn
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b. Minors
C
Child labor vs. working child

o
te
For legal purposes, the term “child” refers to any person less than eighteen (18)
years of age.
R
In
an
A “working child” refers to any child engaged as follows:

i. when the child is below eighteen (18) years of age, in work or economic
activity that is not “child labor;” and
es
h
ii. when the child below fifteen (15) years of age:

C
bl
(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
o
(b) in “public entertainment or information” which refers to artistic, literary, and

R
cultural performances for television show, radio program, cinema or film,

theater, commercial advertisement, public relations activities or
an
campaigns, print materials, internet, and other media.

52
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Legal Practitioner
Allowed working hours and industries of a working child
w
The term “hours of work” includes (1) all time during which a child is required to be
ie
at a prescribed workplace, and (2) all time during which a child is suffered or
permitted to work. Rest periods of short duration during working hours shall be
counted as hours worked.
ev
The following hours of work shall be observed for any child allowed to work under
R
R.A. No. 9231 and its Implementing Rules:
(a) For a child below 15 years of age, the hours of work shall not be more than
al
twenty (20) hours per week, provided that the work shall not be more than four
(4) hours at any given day;
(b) For a child 15 years of age but below 18, the hours of work shall not be more
n
than eight (8) hours a day, and in no case beyond forty (40) hours a week;
io
and
(c) No child below 15 years of age shall be allowed to work between eight (8)
o’clock in the evening and six (6) o’clock in the morning of the following day
ss
and no child 15 years of age but below 18 shall be allowed to work between
e
ten (10) o’clock in the evening and six (6) o’clock in the morning of the
i
fe
following day.
ev
o
Prohibited acts
R
r
No child below 18 years of age is allowed to be employed as a model in any

Pr
advertisement directly or indirectly promoting alcoholic beverages, intoxicating
r
Ba
drinks, tobacco and its by-products, gambling or any form of violence or Ba

pornography.
s
c. Kasambahays
es
• What is the coverage of the Kasambahay Law?

e
R.A. No. 10361 applies to all domestic workers employed and working within the
bl
country. It shall cover all parties to an employment contract for the services of the
following Kasambahay, whether on a live-in or live-out arrangement, such as, but
li
not limited to:

o
r
n
(a) General househelp;

Ba
R
(b) Yaya;
O
an
(c) Cook;
(d) Gardener;
et
(e) Laundry person; or

es
(f) Any person who regularly performs domestic work in one household on an
h
occupational basis.
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C
• Who are EXCLUDED from its coverage?

The following are not covered:
o
te
(a) Service providers;

(b) Family drivers;
R
(c) Children under foster family arrangement; and

In
an
(d) Any other person who performs work occasionally or sporadically and not on
an occupational basis.
Who is a domestic worker or kasambahay?
es
•
h
“Domestic worker” or “kasambahay” refers to any person engaged in domestic

work within an employment relationship, whether on a live-in or live-out
C
bl
arrangement, such as, but not limited to, general househelp, "yaya", cook,
gardener, or laundry person, but shall exclude service providers, family drivers,
children who are under foster family arrangement, or any person who performs
o
domestic work only occasionally or sporadically and not on an occupational basis.

R
This term shall not include children who are under foster family arrangement which
an
refers to children who are living with a family or household of relative/s and are
53
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Legal Practitioner
provided access to education and given an allowance incidental to education,
w
I.e., "baon", transportation, school projects, and school activities.
ie
Because of these new terminologies prescribed in the law, the use of the term
“househelper” may no longer be legally correct.
ev
• Is the employment contract required to be in writing?
Yes. The employment contract must be in writing and should contain the conditions
R
set by law.
• al
What are the rights and privileges of a kasambahay?
The rights and privileges of the Kasambahay are as follows:

n
(a) Minimum wage;
io
(b) Other mandatory benefits, such as the daily and weekly rest periods, service
incentive leave, and 13th month pay;
(c) Freedom from employers' interference in the disposal of wages;
ss
e
(d) Coverage under the SSS, PhilHealth and Pag-IBIG laws;
i
(e) Standard of treatment;
fe
ev
(f) Board, lodging and medical attendance;
(g) Right to privacy;
o
(h) Access to outside communication;
R
(i) Access to education and training;
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Pr
(j) Right to form, join, or assist labor organization;
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Ba
(k) Right to be provided a copy of the employment contract;

(I) Right to certificate of employment;
Ba
(m) Right to terminate the employment; and
s
(n) Right to exercise their own religious beliefs and cultural practices.
es
The foregoing rights and privileges are discussed below.

e
bl
• Are the minimum wages subject to review by the RTWPBs or Regional Boards?
li
Yes. After one (1) year from the effectivity of the Kasambahay Law, and
o
periodically thereafter, the Regional Tripartite and Productivity Wage Boards

r
n
(RTPWBs) shall review, and if proper, determine and adjust the minimum wage
Ba
R
rates of domestic workers.”

O
an
• What are some important principles on wage of kasambahay?

et
es
o Frequency of payment of wages. - The wages of the Kasambahay shall be paid

h
at least once a month. This is so because the minimum wage rates are on a
rn
bl
C
monthly basis.
o The equivalent minimum daily wage rate of the Kasambahay shall be
determined by dividing the applicable minimum monthly rate by thirty (30)
o
te
days.
o The amount of the minimum wage depends on the geographical area where
R
the Kasambahay works.

In
an
o Payment of wages:
▪ To whom paid. - It should be made on time directly to the Kasambahay to
whom they are due in cash at least once a month.
es
h
▪ Deductions, prohibition; when allowed. - The employer, unless allowed by

the Kasambahay through a written consent, shall make no deductions
C
bl
from the wages other than that which is mandated by law such as for SSS,
PhilHealth or Pag-IBIG contributions.
▪ Mode of payment. - It should be paid in cash and not by means of
o
promissory notes, vouchers, coupons, tokens, tickets, chits, or any object

other than the cash wage as provided for under this Act.
R
▪ Pay slip. – The employer shall at all times provide the Kasambahay with a
an
copy of the pay slip containing the amount paid in cash every pay day,
54
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Legal Practitioner
and indicating all deductions made, if any. The copies of the pay slip shall
w
be kept by the employer for a period of three (3) years.
▪ Prohibition on interference in the disposal of wages. – It shall be unlawful
ie
for the employer to interfere with the freedom of the Kasambahay in the
disposition of his/her wages, such as:
ev
a. Forcing, compelling, or obliging the Kasambahay to purchase
merchandise, commodities or other properties from the employer or
from any other person; or
R
b. Making use of any store or services of such employer or any other
person.
▪ al
Prohibition against withholding of wages. – It shall be unlawful for an
employer, directly or indirectly, to withhold the wages of the Kasambahay.
If the Kasambahay leaves without any justifiable reason, any unpaid salary
n
for a period not exceeding fifteen (15) days shall be forfeited. Likewise, the
io
employer shall not induce the Kasambahay to give up any part of the
wages by force, stealth, intimidation, threat or by any other means
whatsoever.
ss
e
• What are important terms and conditions of employment of kasambahay?
i
fe
ev
The following is a rundown of the basic terms and conditions that should be
observed in the employment of a Kasambahay:
o
R
a. Employable age. - Children whose age is below 15 years are absolutely
r
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prohibited to work as Kasambahay.
r
Ba
b. Normal daily hours of work. – Because R.A. No. 10361 does not contain any
provision on the number of normal hours of work that a Kasambahay should
Ba
render in a day but merely prescribes said daily rest period of eight (8) hours
s
per day, it may be concluded that the Kasambahay should work for at least
es
a total of sixteen (16) hours per day as normal hours of work. However, it must
e
be noted that the Labor Code does not contain any provision on the normal
bl
hours of work of househelpers. Article 1695 of the Civil Code, however,

specifically provides that househelpers shall not be required to work for more
li
than ten (10) hours a day. Since R.A. No. 10361, a special law, is the most
o
recent piece of legislation, it should prevail over the general provision of the
r
n
Civil Code.
Ba
R
c. Normal daily hours of work for working child-kasambahay is eight (8) hours
O
an
per day.
d. 13th month pay. - The Kasambahay who has rendered at least one (1) month
et
of service is entitled to a 13th month pay which shall not be less than one-
es
twelfth (1/12) of his/her total basic salary earned in a calendar year. The 13th
h
month pay shall be paid not later than December 24 of every year or upon
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separation from employment.

e. Daily rest period. – The Kasambahay shall be entitled to an aggregate daily
rest period of eight (8) hours.
o
te
f. Weekly rest period. - The Kasambahay shall be entitled to at least twenty-four

(24) consecutive hours of rest in a week. The employer and the Kasambahay
R
shall agree in writing on the schedule of the weekly rest day but the
In
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preference of the Kasambahay, when based on religious grounds, shall be

respected.
g. Service incentive leave. - A Kasambahay who has rendered at least one (1)
es
h
year of service shall be entitled to an annual service incentive leave of at least

five (5) days with pay. Any unused portion of said annual leave shall not be
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bl
cumulative or carried over to the succeeding years. Unused leaves shall not
be convertible to cash.
h. Social security benefits. - A Kasambahay who has rendered at least one (1)
o
month of service shall be covered by the Social Security System (SSS),

Employees Compensation Commission (ECC), Philippine Health Insurance
R
Corporation (PhilHealth), and Home Development Mutual Fund or Pag-IBIG,

an
and shall be entitled to all the benefits in accordance with their respective
policies, laws, rules and regulations.
55
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Legal Practitioner
i. Obligation of employer to register and enroll with SSS, PhilHealth, and Pag-
w
IBIG. - As employer of the Kasambahay, he/she shall register himself/herself
with, and enroll the latter as his/her employee to the SSS, PhilHealth, and Pag-
ie
IBIG.
j. Deposits for loss or damage. - It shall be unlawful for the employer or any other
ev
person to require a Kasambahay to make deposits from which deductions
shall be made for the reimbursement of loss or damage to tools, materials,
furniture and equipment in the household.
R
k. Standard of treatment. - The Kasambahay shall be treated with respect by the
employer or any member of the household. He/she shall not be subjected to
al
any kind of abuse, including repeated verbal or psychological, nor be inflicted
with any form of physical violence or harassment or any act tending to
degrade his/her dignity, as defined under the Revised Penal Code, Violence
n
Against Women and their Children Law (R.A. No. 9262), Special Protection of
io
Children Against Child Abuse, Exploitation and Discrimination Act (R.A. No.
7610) as amended by R.A. No. 9231, Anti-Trafficking in Persons Act of 2003 (R.A.
No. 9208), and other applicable laws.
ss
l. Board, lodging and medical attendance. - The employer shall provide for the
e
basic necessities of the Kasambahay, to include the following:
i
fe
(1) At least three (3) adequate meals a day, taking into consideration the
ev
Kasambahay's religious beliefs and cultural practices;
(2) Humane sleeping condition that respects the person's privacy for live-in
o
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arrangement; and
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(3) Appropriate rest and medical assistance in the form of first-aid medicines,
Pr
in case of illnesses and injuries sustained during service without loss of
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Ba
benefits.
m. Opportunities for education and training. - The Kasambahay shall be afforded
Ba
s
the opportunity to finish basic education, which shall consist of elementary

es
and secondary education. He/she may be allowed access to alternative

learning systems and, as far as practicable, higher education or technical
e
vocational education and training.

bl
n. Membership in labor organization. - The Kasambahay shall have the right to

join a labor organization of his/her own choosing for purposes of mutual aid
li
o
and collective negotiation.

r. Health and safety. - The employer shall safeguard the safety and health of the r
n
Ba
R
Kasambahay in accordance with the standards which the DOLE shall develop
through the Bureau of Working Conditions (BWC) and the Occupational
O
an
Safety and Health Center (OSHC) within six (6) months from the promulgation
of this IRR. The said standards shall take into account the peculiar nature of
et
es
domestic work.
h
s. Prohibition on debt bondage. - It shall be unlawful for the employer or any

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person acting on his/her behalf to place the Kasambahay under debt

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C
bondage. “Debt bondage” refers to the rendering of service by the

Kasambahay as security or payment for a debt where the length and nature
o
te
of service is not clearly defined or when the value of the service is not
reasonably applied in the payment of the debt.
R
t. Assignment to non-household work. - The employer shall not assign the

In
Kasambahay to work, whether in full or part-time, in a commercial, industrial

an
or agricultural enterprise at a wage rate lower than that provided for

agricultural or non-agricultural workers.
If so assigned, the Kasambahay will no longer be treated as such but as a
es
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regular employee of the establishment.

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• What are the rules on termination of Kasambahay?

1. Pre-termination of employment. – The following rules shall be observed:
(1) In case the duration of employment is specified in the contract, the
o
Kasambahay and the employer may mutually agree upon notice to

terminate the contract of employment before the expiration of its term.
R
(2) In case the duration is not determined by stipulation or by nature of

an
service, the employer or the Kasambahay may give notice to end the
56
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employment relationship five (5) days before the intended termination of
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employment.
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2. Termination of employment initiated by the Kasambahay. - The Kasambahay
may terminate the employment relationship at any time before the expiration of
the contract for any of the following causes:
ev
(1) Verbal or emotional abuse of the Kasambahay by the employer or any
member of the household;
R
(2) Inhuman treatment including physical abuse of the Kasambahay by the
employer or any member of the household;
al
(3) Commission of a crime or offense against the Kasambahay by the
employer or any member of the household;
(4) Violation by the employer of the terms and conditions of the employment
n
contract and other standards set forth in the law;
io
(5) Any disease prejudicial to the health of the Kasambahay, the employer, or
members of the household; and
(6) Other causes analogous to the foregoing.
ss
e
If the Kasambahay leaves without cause, any unpaid salary due, not exceeding
i
the equivalent of 15 days’ work, shall be forfeited. In addition, the employer may
fe
ev
recover from the Kasambahay deployment expenses, if any, if the services have
been terminated within six (6) months from employment.
o
R
3. Termination of employment initiated by the employer. - An employer may
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terminate the employment of the Kasambahay at any time before the

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expiration of the contract for any of the following causes:
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Ba
(1) Misconduct or willful disobedience by the Kasambahay of the lawful order

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of the employer in connection with the former's work;
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(2) Gross or habitual neglect or inefficiency by the Kasambahay in the

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performance of duties;
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(3) Fraud or willful breach of the trust reposed by the employer on the
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Kasambahay;
(4) Commission of a crime or offense by the Kasambahay against the person
li
of the employer or any immediate member of the employer's family;

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(5) Violation by the Kasambahay of the terms and conditions of the

r
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employment contract and other standards set forth under the law;
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(6) Any disease prejudicial to the health of the Kasambahay, the employer, or
O
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members of the household; and

(7) Other causes analogous to the foregoing.
et
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If the employer dismissed the Kasambahay for reasons other than the above,
h
he/she shall pay the Kasambahay the earned compensation plus indemnity in
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the amount equivalent to fifteen (15) days’ work.

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4. Invalid ground for termination. - Pregnancy and marriage of the Kasambahay

are not valid grounds for termination of employment.
o
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5. Employment Certification. - Upon the termination of employment, the

R
employer shall issue the Kasambahay, within five (5) days from request, a
In
certificate of employment indicating the nature, duration of the service and

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work description.
d. Homeworkers
es
h
• What are important terms that should be noted in employment of homeworkers?

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a. “Industrial homeworker” – It refers to a worker who is engaged in industrial

homework.
o
b. “Industrial homework” – It refers to a system of production under which work

for an employer or contractor is carried out by a homeworker at his/her home.
R
Materials may or may not be furnished by the employer or contractor. It differs

from regular factory production principally in that, it is a decentralized form of
an
57
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production where there is ordinarily very little supervision or regulation of
w
methods of work.
ie
c. “Home” - It means any nook, house, apartment or other premises used
regularly, in whole or in part, as a dwelling place, except those situated within
the premises or compound of an employer, contractor/subcontractor and the
ev
work performed therein is under the active or personal supervision by or for the
latter.
R
d. “Field personnel” – It refers to a non-agricultural employee who regularly
performs his duties away from the principal place of business or branch office of
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the employer and whose actual hours of work in the field cannot be determined
with reasonable certainty.
n
e. “Employer.” – It refers to any natural or artificial person who, for his own
account or benefit, or on behalf of any person residing outside the Philippines,
io
directly or indirectly, or through any employee, agent, contractor, subcontractor

or any other person:
ss
1. delivers or causes to be delivered any goods, articles or materials to be
e
processed or fabricated in or about a home and thereafter to be returned or
i
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to be disposed of or distributed in accordance with his direction; or
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2. sells any goods, articles or materials for the purpose of having such goods
o
or articles processed in or about a home and then repurchases them himself
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or through another after such processing.
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f. “Contractor” or “subcontractor” - It refers to any person who, for the account
r
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or benefit of an employer, delivers or causes to be delivered to a homeworker, Ba

goods or articles to be processed in or about his home and thereafter to be
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returned, disposed of or distributed in accordance with the direction of the

employer.
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g. “Processing” - It refers to manufacturing, fabricating, finishing, repairing,

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altering, packing, wrapping or handling in any way connected with the

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production or preparation of an article or material.

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• How is homework paid?

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Immediately upon receipt of the finished goods or articles, the employer is required r
n
Ba
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to pay the homeworker or the contractor or subcontractor, as the case may be, for
the work performed less the corresponding homeworker’s share of SSS, PhilHealth
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and ECC premium contributions which should be remitted by the contractor or

subcontractor or employer to the SSS with the employer’s share. However, where
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payment is made to a contractor or subcontractor, the homeworker should likewise

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be paid immediately after the goods or articles have been collected from the
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workers.
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• What are prohibited homeworks?

No homework shall be performed on the following:
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1. Explosives, fireworks and articles of like character;

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2. Drugs and poisons; and

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3. Other articles, the processing of which requires exposure to toxic substances.

e. Night Workers
es
h
• Article 136 [138] of the Labor Code

Any woman who is permitted or suffered to work, with or without compensation, in any
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night club, cocktail lounge, massage clinic, bar or similar establishments may be
considered a regular employee of such establishment for purposes of the application
of labor and social legislation if the following requisites concur:
o
1. She works under the effective control or supervision of the employer; and
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2. She has worked therein for a substantial period of time as determined by the
DOLE Secretary.
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f. Apprentices and Learners
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• Apprentice
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An “apprentice” is a worker who is covered by a written apprenticeship agreement
with an individual employer or any of the entities recognized under the law. He is a
person undergoing training for an approved apprenticeable occupation during an
ev
established period and covered by an apprenticeship agreement.
• Learner
R
Learner” refers to a person hired as a trainee in semi-skilled and other industrial
occupations which are non-apprenticeable and which may be learned through
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practical training on the job for a period not exceeding three (3) months, whether
or not such practical training is supplemented by theoretical instructions
n
g. Persons with Disabilities
io
Under the law, PWDs are entitled to equal opportunity for employment.
Consequently, no PWD shall be denied access to opportunities for suitable
employment. A qualified employee with disability shall be subject to the same terms
ss
e
and conditions of employment and the same compensation, privileges, benefits,
i
fringe benefits, incentives or allowances as a qualified able-bodied person.
fe
ev
Five percent (5%) of all casual emergency and contractual positions in the
Departments of Social Welfare and Development, Health, Education and other
o
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government agencies, offices or corporations engaged in social development shall
be reserved for PWDs.
r
Pr
r
• Are PWDs eligible for apprenticeship and learnership?
Ba
Ba
Yes. Under R.A. No. 7277, it is provided that subject to the provisions of the Labor
s
Code, as amended, PWDs shall be eligible as apprentices or learners; provided that

es
their handicap is not as much as to effectively impede the performance of job

e
operations in the particular occupation for which they are hired and provided
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further that after the lapse of the period of apprenticeship, if found satisfactory in
n
the job performance, they shall be eligible for employment.

li
o
• What is the applicable wage rate to PWDs?

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Under R.A. No. 7277, the wage rate of PWDs is 100% of the applicable minimum
Ba
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wage
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(g.1.) Discrimination
et
(g.1.a.) Magna Carta for Disabled Persons

es
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No entity, whether public or private, shall discriminate against a qualified PWD by

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reason of disability in regard to job application procedures, the hiring, promotion,

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C
or discharge of employees, employee compensation, job training, and other terms,

conditions and privileges of employment. The following constitute acts of
o
discrimination:
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(a) Limiting, segregating or classifying a job applicant with disability in such a

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manner that adversely affects his work opportunities;

In
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(b) Using qualification standards, employment tests or other selection criteria

that screen out or tend to screen out a PWD unless such standards, tests or
other selection criteria are shown to be job-related for the position in
es
h
question and are consistent with business necessity;

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(c) Utilizing standards, criteria, or methods of administration that:

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(1) have the effect of discrimination on the basis of disability; or

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(2) perpetuate the discrimination of others who are subject to common

administrative control.
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(d) Providing less compensation, such as salary, wage or other forms of

an
remuneration and fringe benefits, to a qualified employee with disability, by

59
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reason of his disability, than the amount to which a non-disabled person
w
performing the same work is entitled;
ie
(e) Favoring a non-disabled employee over a qualified employee with disability
with respect to promotion, training opportunities, and study and scholarship
grants solely on account of the latter’s disability;
ev
(f) Re-assigning or transferring an employee with a disability to a job or position
he cannot perform by reason of his disability;
R
(g) Dismissing or terminating the services of an employee with disability by
reason of his disability unless the employer can prove that he impairs the
al
satisfactory performance of the work involved to the prejudice of the
business entity; provided, however, that the employer first sought to provide
n
reasonable accommodations for persons with disability;
io
(h) Failing to select or administer in the most effective manner employment tests
which accurately reflect the skills, aptitude or other factor of the applicant
or employee with disability that such tests purports to measure, rather than
ss
the impaired sensory, manual or speaking skills of such applicant or
e
employee, if any; and
i
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(i) Excluding PWD from membership in labor unions or similar organizations.
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(g.1.b.) Mental Health Act
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Pr
Discrimination under this act refers to any distinction, exclusion or restriction which
r
has the purpose or effect of nullifying the recognition, enjoyment or exercise, on
Ba
an equal basis with others, of all human rights and fundamental freedoms in the
Ba
political, economic, social cultural, civil or any other field. It includes all forms of
s
discrimination, including denial of reasonable accommodation. Special measure

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solely to protect the rights or secure the advancement of persons with decision-
e
making impairment capacity shall not be deemed to be discriminatory;

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Employers shall develop appropriate policies and programs on mental health

issues, correct the stigma and discrimination associated with mental conditions,
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identify and provide support for individuals with mental health conditions to
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treatment and psychosocial support. r

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(g.2.) Incentives for Employers

O
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To encourage the active participation of the private sector in promoting the

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welfare of PWDs and to ensure gainful employment for qualified persons with
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disability, adequate incentives shall be provided to private entities which employ

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PWDs.
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C
Private entities that employ PWDs who meet the required skills or qualifications,
either as a regular employee, apprentice or learner, shall be entitled to an
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additional deduction from their gross income equivalent to twenty-five percent

(25%) of the total amount paid as salaries and wages to persons with disability;
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provided, however, that such entities could present proof as certified by the
In
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Department of Labor and Employment (DOLE) that PWDs are under their employ
and provided further that the employee with disability is accredited with the DOLE
and the Department of Health as to his disability, skills and qualifications.
es
h
Private entities that improve or modify their physical facilities in order to provide
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reasonable accommodation for PWDs shall also be entitled to an additional

bl
deduction from their net taxable income equivalent to fifty percent (50%) of the
direct costs of the improvements or modifications.
o
R
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5. Sexual Harassment in the Work Environment
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a. Sexual Harassment Act
• What are the 3 situations contemplated under this law?
ie
R.A. No. 7877 declares sexual harassment unlawful only in three (3) situations,
namely:
ev
(1) employment;
(2) education; and
R
(3) training environment.
• al
Can sexual harassment be committed also against a man?
Yes. Sexual harassment is not the sole domain of women as men may also be
subjected to the same despicable act. Said law does not limit the victim of sexual
n
harassment to women.
io
• Who are the persons who may be held liable for sexual harassment?
Work, education or training-related sexual harassment is committed by any
employer, employee, manager, supervisor, agent of the employer, teacher,
ss
instructor, professor, coach, trainor, or any other person who, having authority,
e
influence or moral ascendancy over another in a work or training or education
i
fe
environment, demands, requests or otherwise requires any sexual favor from
ev
another, regardless of whether the demand, request or requirement for submission
is accepted by the object of said act.
o
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r
Further, any person who directs or induces another to commit any act of sexual
Pr
harassment as defined in the law, or who cooperates in the commission thereof by
r
Ba
another without which it would not have been committed, shall also be held liable Ba
under the law.
s
• How is sexual harassment committed in a work-related or employment

environment?
es
In a work-related or employment environment, sexual harassment is committed

e
when:
bl
1. The sexual favor is made a condition in the hiring or in the employment, re-
li
employment or continued employment of said individual or in granting said

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individual favorable compensation, terms, conditions, promotions, or

r
n
privileges; or the refusal to grant the sexual favor results in limiting, segregating
Ba
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or classifying the employee which in any way would discriminate, deprive or

O
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diminish employment opportunities or otherwise adversely affect said

employee;
et
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2. The above acts would impair the employee’s rights or privileges under existing
h
labor laws; or
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3. The above acts would result in an intimidating, hostile, or offensive

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environment for the employee.

o
What are the duties of the employer in regard to sexual harassment complaints?
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•
R
It is the duty of the employer to prevent or deter the commission of acts of sexual
In
harassment and to provide the procedures for the resolution or prosecution of acts
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of sexual harassment.
The employer or head of office is required to:
es
h
1. Promulgate appropriate rules and regulations, in consultation with and jointly

approved by the employees or students or trainees, through their duly
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designated representatives, prescribing the procedure for the investigation of

sexual harassment cases and the administrative sanctions therefor. The said
rules and regulations issued shall include, among others, guidelines on proper
o
decorum in the workplace and educational or training institutions.

R
2. Create a committee on decorum and investigation of cases on sexual

harassment. The committee shall conduct meetings, as the case may be, with
an
officers and employees, teachers, instructors, professors, coaches, trainors

61
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and students or trainees to increase understanding and prevent incidents of
w
sexual harassment. It shall also conduct the investigation of alleged cases
constituting sexual harassment.
ie
b. Safe Spaces Act
Difference between Anti-Sexual Harassment Act of 1995 and Safe Spaces Act:
ev
•
Anti-Sexual Harassment Act of 1995 Safe Spaces Act
R
Expands coverage to include:
Covers harassment only in 3 places:
1) Streets and public spaces
1) Employment
2) Education
al 2) Online
3) Employment
3) Training Environment
4) Education
n
5) Training environment
io
Persons who may be liable for Sexual Persons who may be liable for sexual
Harassment: harassment (workplace, education
ss
and training environment):
e
Employer, employee, manager,
i
supervisor, agent of the employer, • Employer, employee, manager,
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ev
teacher, instructor, professor, coach, supervisor, agent of the employer,
trainor, or any other person who, teacher, instructor, professor,
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having authority, influence or moral coach, trainor, or any other person
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ascendancy over another in a work or who, having authority, influence or
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training or education environment, moral ascendancy over another;
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Ba
OR
• Between peers; OR
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• By a subordinate to a superior
s
officer; OR
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• By a student to a teacher; OR
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• By a trainee to a trainer.
bl
• Acts that constitute Gender-Based Sexual Harassment in the Workplace:

li
o Unwelcome sexual advances or requests or demands of a sexual nature that

o
has or could have a detrimental effect on employment/ education/ job

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performance or opportunities;
R
o Conduct of sexual nature which affects the dignity of a person;

O
an
o Conduct that creates an intimidating/hostile/humiliating environment for the

recipient.
et
o Common elements of the above acts:

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- May be done verbally, physically or through the use of technology such

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as text messaging or electronic mail or through any other forms of

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bl
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information and communication systems.

- Conduct is unwelcome, unreasonable, offensive and pervasive.
• Duties of the Employer
o
te
Employers or other persons of authority, influence or moral ascendancy shall:

1. Disseminate or post in a conspicuous place, a copy of the Act;
R
2. Provide measures to prevent gender-based sexual harassment (e.g. conduct

In
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of anti-sexual harassment seminars);

3. Create a committee on decorum and investigation. This committee shall:
a) Adequately represent the management, the employees, and the union;
es
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b) Designate a woman as its head and not less than half of its members
should be women;
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c) Investigate and decide on complaints of sexual harassment w/in 10 days;

d) Protect the complainant from retaliation.
4. Provide and disseminate a code of conduct which shall provide procedures
o
for the committee AND set administrative penalties

• Liability of Employer
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In addition to liabilities for acts of gender-based sexual harassment, employers may

an
also be held responsible for:

62
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o Non-implementation of their duties; or
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o Not taking action on reported acts of sexual harassment.
• DOLE Inspection
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DOLE shall conduct yearly spontaneous inspections to ensure compliance of
employers and employees with their obligations.
ev
C. SOCIAL WELFARE LEGISLATION
R
1. SSS LAW
a. Coverage and exclusions
• Compulsory coverage.al
o Coverage in the SSS shall be compulsory upon all employees, including
kasambahays or domestic workers not over sixty (60) years of age and their
n
employers.
io
o “Employer” is any person, natural or juridical, domestic or foreign, who carries on

in the Philippines any trade, business, industry, undertaking, or activity of any kind
and uses the services of another person who is under his orders as regards the
ss
employment, except the government and any of its political subdivisions,
e
branches or instrumentalities, including corporations owned or controlled by the
i
fe
Government: Provided, That a self-employed person shall be both employee
ev
and employer at the same time.
o “Employee” is any person who performs services for an employer in which either
o
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or both mental or physical efforts are used and who receives compensation for
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such services, where there is an employer-employee relationship: Provided, That

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a self-employed person shall be both employee and employer at the same time.
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Ba
• Compulsory coverage of self-employed persons.

Ba
s
o Coverage in the SSS shall also be compulsory upon such self-employed persons
es
as may be determined by the Commission under such rules and regulations as it

may prescribe, including, but not limited to, the following:
e
bl
(a) All self-employed professionals;

(b) Partners and single proprietors of businesses;
li
o
(c) Actors and actresses, directors, scriptwriters and news correspondents who
r
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do not fall within the definition of the term "employee" (supra);

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(d) Professional athletes, coaches, trainers and jockeys; and

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(e) Individual farmers and fishermen.

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o Unless otherwise specified in the law, all provisions thereof applicable to covered
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employees shall also be applicable to the covered self-employed persons

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o “Self-employed” is any person whose income is not derived from employment

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as defined under this Act, as well as those workers enumerated above.

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• Compulsory coverage of OFWs.

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o Coverage of all OFWs

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▪ Coverage in the SSS shall be compulsory upon all sea-based and land-based
In
OFWs, Provided, That they are not over sixty (60) years of age.
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▪ All benefit provisions under this Act shall apply to all covered OFWs. The benefits
include, among others, retirement, death, disability, funeral, sickness and
maternity.
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o Sea-based OFWs.
▪ Manning agencies are agents of their principals and are considered as
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employers of sea-based OFWs.

▪ For purposes of the implementation of R.A. No. 11199, any law to the contrary
notwithstanding manning agencies are jointly and severally or solidarily liable
o
with their principals with respect to the civil liabilities incurred for any violation
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thereof.
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▪ The persons having direct control, management or direction of the manning
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agencies shall be held criminally liable for any act or omission penalized under
R.A. No. 11199 notwithstanding Section 28(f) thereof.
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o Land-based OFWs
▪ Land-based OFWs are compulsory members of the SSS and considered in the
ev
same manner as self-employed persons under such rules and regulations that
the Commission shall prescribe.
▪ The Department of Foreign Affairs (DFA), the Department of Labor and
R
Employment (DOLE) and all its agencies involved in deploying OFWs for
employment abroad are mandated to negotiate bilateral labor agreements
al
with the OFWs' host countries to ensure that the employers of land-based
OFWs, similar to the principals of sea-based OFWs, pay the required SSS
contributions, in which case, these land-based OFWs shall no longer be
n
considered in the same manner as self-employed persons. Instead. they shall
io
be considered as compulsorily covered employees with employer and

employee shares in contributions that shall be provided for in the bilateral labor
agreements and their implementing administrative agreements: Provided,
ss
That in countries which already extend social security coverage to OFWs, the
e
DFA through the Philippine embassies and the DOLE shall negotiate further
i
fe
agreements to serve the best interests of the OFWs.
ev
▪ The DFA, the DOLE and, the SSS shall ensure compulsory coverage of OFWs
through bilateral social security and labor agreements and other measures for
o
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enforcement
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• Voluntary coverage
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In addition to the foregoing OFWs who are eligible for voluntary coverage, the
following may be cited:
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s
1) Non-working spouses of SSS members

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Spouses who devote full time to managing the household and family affairs,
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unless they are also engaged in other vocation or employment which is subject
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to mandatorv coverage, may be covered by the SSS on a voluntary basis.

2) OFWs
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Upon the termination of their employment overseas, OFWs may continue to pay
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contributions on a voluntary basis to maintain their rights to full benefits.

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3) Filipino permanent migrants, including Filipino immigrants, permanent

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residents and naturalized citizens of their host countries

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Filipino permanent migrants, including Filipino immigrants, permanent residents

and naturalized citizens of their host countries may be covered by the SSS on a
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voluntary basis.
es
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• Effective date of coverage.

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The effectivity date of the compulsory coverage are as follow:

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1) For employer - Compulsory coverage of the employer shall take effect on the
first day of his operation.
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2) For employee - Compulsory coverage of the employee shall take effect on

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the first day of his employment.

In
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3) For self-employed - The compulsory coverage of the self-employed person

shall take effect upon his registration with the SSS.
• Effect of separation from employment.
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When an employee under compulsory coverage is separated from employment, his

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employer's contribution on his account and his obligation to pay contributions arising
from that employment shall cease at the end of the month of separation but said
employee shall be credited with all contributions paid on his behalf and entitled to
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benefits according to the provisions of R.A. No. 11199. He may, however, continue to
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pay the total contributions to maintain his right to full benefit.

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• Effect of interruption of business or professional income.

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If the self-employed member realizes no income in any given month, he shall not be
required to pay contributions for that month. He may, however, be allowed to
ie
continue paying contributions under the same rules and regulations applicable to a
separated employee member: Provided, That no retroactive payment of
ev
contributions shall be allowed other than as prescribed under Section 22-A of R.A. No.
11199.
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EXCLUSIONS
• Excluded employer
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Government and any of its political subdivisions, branches or instrumentalities,
including corporations owned or controlled by the Government with original charters.
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• Excluded employees.
Workers whose employment or service falls under any of the following circumstances
ss
are not covered:
i e
(1) Services where there is no employer-employee relationship in accordance
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ev
with existing labor laws, rules, regulations and jurisprudence;
(2) Service performed in the employ of the Philippine Government or
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instrumentality or agency thereof;
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(3) Service performed in the employ of a foreign government or international
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Ba
organization, or their wholly-owned instrumentality: Provided, however, That

this exemption notwithstanding, any foreign government, international
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organization or their wholly-owned instrumentality employing workers in the
s
Philippines or employing Filipinos outside of the Philippines, may enter into

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an agreement with the Philippine Government for the inclusion of such

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employees in the SSS except those already covered by their respective civil
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service retirement systems: Provided, further, That the terms of such

agreement shall conform with the provisions of R.A. No. 11199 on coverage
li
and amount of payment of contributions and benefits: Provided, finally, That

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the provisions of this Act shall be supplementary to any such agreement:

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and
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(4) Such other services performed by temporary and other employees which
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may be excluded by regulation of the Commission. Employees of bona fide

independent contractors shall not be deemed employees of the employer
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engaging the service of said contractors.

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b. Dependents and beneficiaries

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The dependents shall be the following:

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(1) The legal spouse entitled by law to receive support from the member;
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(2) The legitimate, legitimated or legally adopted, and illegitimate child who is
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unmarried, not gainfully employed, and has not reached twenty-one (21)
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years of age, or if over twenty-one (21) years of age, he is congenitally or

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while still a minor has been permanently incapacitated and incapable of

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self-support, physically or mentally: and

(3) The parent who is receiving regular support from the member.
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• Primary beneficiaries.
The following are primary beneficiaries:
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1. The dependent spouse until he or she remarries;

2. The dependent legitimate, legitimated or legally adopted, and illegitimate
children;
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The dependent illegitimate children shall be entitled to 50% of the share of the
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legitimate, legitimated or legally adopted children. However, in the absence

of the dependent legitimate, legitimated children of the member, his/her
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dependent illegitimate children shall be entitled to 100% of the benefits

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• Secondary beneficiaries.
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The following are secondary beneficiaries:
1. The dependent parents, in the absence of the primary beneficiaries.
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2. Any other person designated by the member as his/her secondary
beneficiary, in the absence of all the foregoing primary beneficiaries and
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dependent parents.
c. Benefits
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• Two (2) Main Classifications.
The SSS benefits may be classified as follows:
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(a) Social security benefits:

1) Sickness
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2) Maternity Leave
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3) Retirement
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4) Unemployment Insurance or Involuntary Separation
5) Disability
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6) Death
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7) Funeral
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(b) Employees’ compensation benefits Ba

(1) SICKNESS BENEFIT
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• Who may avail.

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The sickness benefit is a daily cash allowance paid for the number of days a member
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is unable to work due to sickness or injury. This benefit may be availed of as follows:
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A member who has paid at least three (3) monthly contributions in the 12-month
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period immediately preceding the semester of sickness or injury and is confined

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therefor for more than three (3) days in a hospital or elsewhere with the approval
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of the SSS, shall, for each day of compensable confinement or a fraction thereof,
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be paid by his employer, or the SSS, if such person is unemployed or self-

employed, a daily sickness benefit equivalent to ninety percent (90%) of his
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average daily salary credit, subject to the following conditions:

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(1) In no case shall the daily sickness benefit be paid longer than one hundred
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twenty (120) days in one (1) calendar year, nor shall any unused portion of
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the one hundred twenty (120) days of sickness benefit granted under this
section be carried forward and added to the total number of compensable
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days allowable in the subsequent year;

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(2) The daily sickness benefit shall not be paid for more than two hundred forty
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(240) days on account of the same confinement; and

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(3) The employee member shall notify his employer of the fact of his sickness or
injury within five (5) calendar days after the start of his confinement unless
such confinement is in a hospital or the employee became sick or was
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injured while working or within the premises of the employer, in which case,
notification to the employer is not necessary: Provided, That if the member
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is unemployed or self-employed, he shall directly notify the SSS of his

confinement within five (5) calendar days after the start thereof unless such
confinement is in a hospital, in which case, notification is also not necessary:
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Provided, further, That in cases where notification is necessary, the

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confinement shall be deemed to have started not earlier than the fifth day
immediately preceding the date of notification.
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• Compensable confinement.
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o The compensable confinement shall begin on the first day of sickness, and the
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payment of such allowances shall be promptly made by the employer every
regular payday or on the fifteenth and last day of each month, and similarly in
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the case of direct payment by the SSS, for as long as such allowances are due
and payable: Provided, That such allowance shall begin only after all sick leaves
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of absence with full pay to the credit of the employee member shall have been
exhausted.
o One hundred percent (100%) of the daily benefits provided in the preceding
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paragraph shall be reimbursed by the SSS to said employer upon receipt of
satisfactory proof of such payment and legality thereof:
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▪ Provided, That the employer has notified the SSS of the confinement within five
(5) calendar days after receipt of the notification from the employee member:
▪ Provided, further, That if the notification to the SSS is made by the employer
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beyond five (5) calendar days after receipt of the notification from the
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employee member, said employer shall be reimbursed only for each day of
confinement starting from the tenth calendar day immediately preceding the
date of notification to the SSS:
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▪ Provided, finally, That the SSS shall reimburse the employer or pay the
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unemployed member only for confinement within the one-year period
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immediately preceding the date the claim for benefit or reimbursement is
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received by the SSS, except confinement in a hospital, in which case, the claim
for benefit or reimbursement must be filed within one (I) year from the last day
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of confinement.
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• Notification requirement.
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Where the employee member has given the required notification but the employer
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fails to notify the SSS of the confinement or to file the claim for reimbursement within
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the period prescribed in this section resulting in the reduction of the benefit or denial
of the claim, such employer shall have no right to recover the corresponding daily
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allowance he advanced to the employee member as required in this section. The

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provisions regarding the notification required of the member and the employer as well
as the period within which the claim for benefit or reimbursement may be filed shall
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apply to all claims filed with the SSS.

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(2) MATERNITY LEAVE BENEFIT

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• R.A. NO. 11210, the prevailing law.

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R.A. No. 11199, otherwise known as the “Social Security Act of 2018”, which was
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approved on February 07, 2019, re-enacted the exact provision of Section 14-A of the
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repealed “Social Security Act of 1997.” However, 13 days later, or on February 20,
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2019, President Rodrigo Duterte approved R.A. No. 11210, otherwise known as the
“105-Day Expanded Maternity Leave Law” which contains diametrically different
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provisions from R.A. No. 11199.

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There is thus no doubt that the prevailing law on maternity leave benefit is R.A. No.
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111210 which repealed or modified “[a]ll laws, decrees, orders, rules and regulations
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or parts thereof inconsistent [therewith].”
(3) RETIREMENT BENEFITS

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• Two types of retirement benefits.

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Retirement benefit is a cash benefit either in monthly pension or lump sum paid to a
member who can no longer work due to old age.
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The two (2) types of retirement benefits are:

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1) Monthly pension, and

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2) Lump sum amount.

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The monthly pension is a lifetime cash benefit paid to a retiree who has paid at least
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120 monthly contributions to the SSS prior to the semester of retirement. The lump sum
amount is granted to a retiree who has not paid the required 120 monthly
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contributions. It is equal to the total contributions paid by the member and by the
employer including interest.
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• Who are qualified.
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A member who has paid at least one hundred twenty (120) monthly contributions prior
to the semester of retirement and who:
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(1) has reached the age of sixty (60) years and is already separated from
employment or has ceased to be self-employed: or
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(2) has reached the age of sixty-five (65) years, shall be entitled for as long as
he lives to the monthly pension,
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Provided, That he shall have the option to receive his first eighteen (18) monthly
pensions in lump sum discounted at a preferential rate of interest to be determined
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by the SSS.
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A covered member who is sixty (60) years old at retirement and who does not qualify
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for pension benefits as above described, shall be entitled to a lump sum benefit equal
to the total contributions paid by him and on his behalf: Provided, That he is separated
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from employment and is not continuing payment of contributions to the SSS on his
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own.
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• Reemployment or resumption of self-employment.
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The monthly pension shall be suspended upon the reemployment or resumption of

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self-employment of a retired member who is less than sixty-five (65) years old. He shall
again be subject to Section 18 (Employee’s Contributions) and his employer to Section
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19 (Employer’s Contributions) of R.A. No. 11199.

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• Death of retired member.

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Upon the death of the retired member, his primary beneficiaries as of the date of his
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retirement shall be entitled to receive the monthly pension: Provided, That if he has no r
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primary beneficiaries and he dies within sixty (60) months from the start of his monthly
pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent
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to the total monthly pensions corresponding to the balance of the five-year

guaranteed period, excluding the dependents' pension.
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• Retirement of member after reaching 60.

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The monthly pension of a member who retires after reaching age sixty (60) shall be
the higher of either: (1) the monthly pension computed at the earliest time he could
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have retired had he been separated from employment or ceased to be self-

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employed plus all adjustments thereto; or (2) the monthly pension computed at the
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time when he actually retires.

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• Retirement of underground mineworkers.
An underground mineworker shall be entitled to retirement benefits if he:

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1. has reached the age of 55 years old and is an underground mineworker for at
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least 5 years (either continuous or accumulated) prior to the semester of

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retirement but whose actual date of retirement is not earlier than March 13, 1998;
separated from employment or in the case of self-employed, has ceased self-
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employment, and has paid at least 120 monthly contributions prior to the
semester of retirement.
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2. has reached the age of 60 years old whether employed or not.

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o Additional monthly benefit allowance.
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Pursuant to Memorandum from the Executive Secretary dated 22 February 2017, by
authority of the President of the Republic of the Philippines, an additional monthly
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benefit allowance amounting to ₱1,000 shall be given to all retirement, death, and
disability pensioners receiving monthly pensions in or after January 2017.
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o Dependents’ pension.
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Where monthly pension is payable on account of death, permanent total disability or
retirement, dependents' pension equivalent to 10% of the monthly pension or ₱250,
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whichever is higher, shall also be paid for each dependent child conceived on or
before the date of the contingency but not exceeding five (5), beginning with the
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youngest and without substitution: Provided, That where there are legitimate and
illegitimate children, the former shall be preferred.
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o Retiree’s additional benefits
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The retiree is entitled to a 13th month pension payable every December. All retiree
pensioners prior to the effectivity of R.A. No. 7875 on March 4, 1995 are automatically
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considered members of PhilHealth and he and his legal dependents are entitled to its
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hospitalization benefits. On the other hand, retirees effective March 4, 1995 up to the
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present will be entitled to hospitalization benefits under PhilHealth only if they have
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contributed 120 monthly Medicare contributions. The counting of 120 monthly

contributions shall start in 1972, when the Medical Care Act of 1969 started
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implementation.
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(4) UNEMPLOYMENT INSURANCE OR INVOLUNTARY SEPARATION BENEFITS

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• R.A. No. 11199 grants this benefit to a member who is:

(a) not over sixty (60) years of age;
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(b) who has paid at least thirty-six (36) months contributions, twelve (12) months of
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which should be in the 18-month period immediately preceding the involuntary

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unemployment or separation.
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• He shall be paid benefits in the form of monthly cash payments equivalent to fifty
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percent (50%) of the average monthly salary credit for a maximum of two (2)
months:
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o Provided, That an employee who is involuntarily unemployed can only claim

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unemployment benefits once every three (3) years;

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o Provided, further, That in case of concurrence of two or more compensable

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contingencies, only the highest benefit shall be paid, subject to the rules and
regulations that the Commission may prescribe.
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(5) DISABILITY BENEFITS

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• Permanent total disability benefits.

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o A member shall be entitled to the monthly pension upon: (a) the permanent
total disability of a member who has (b) paid at least thirty-six (36) monthly
contributions prior to the semester of disability
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o Provided, That if he has not paid the required thirty-six (36) monthly contributions,
he shall be entitled to a lump sum benefit equivalent to the monthly pension
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times the number of monthly contributions paid to the SSS or twelve (12) times
the monthly pension, whichever is higher.
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• Reemployment or resumption of self-employment.

o A member who (a) has received a lump sum benefit; and (b) is reemployed or
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has resumed self-employment not earlier than one (1) year from the date of his
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disability shall again be subject to compulsory coverage and shall be

considered a new member.
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o The monthly pension and dependents’ pension shall be suspended upon:
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▪ the reemployment or resumption of self-employment; or
▪ the recovery of the disabled member from his permanent total disability; or
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▪ his failure to present himself for examination at least once a year upon
notice by the SSS.
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• Death of permanent total disability pensioner.
o Upon the death of the permanent total disability pensioner, his primary
beneficiaries as of the date of disability shall be entitled to receive the monthly
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pension
o Provided, That if he has no primary beneficiaries and he dies within sixty (60)
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months from the start of his monthly pension, his secondary beneficiaries shall be
entitled to a lump sum benefit equivalent to the total monthly pensions
corresponding to the balance of the five-year guaranteed period excluding the
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dependents’ pension.
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• Permanent total disabilities

The following disabilities shall be deemed permanent total:
(1) Complete loss of sight of both eyes;
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(2) Loss of two limbs at or above the ankle or wrists:
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(3) Permanent complete paralysis of two limbs;
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(4) Brain injury resulting to incurable imbecility or insanity; and
(5) Such cases as determined and approved by the SSS.
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• Permanent partial disabilities.
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o If the disability is permanent partial, and such disability occurs BEFORE thirty-six
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(36) monthly contributions have been paid prior to the semester of disability: the
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benefit shall be such percentage of the lump sum benefit described in the
preceding paragraph with due regard to the degree of disability as the
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Commission may determine.

o If the disability is permanent partial and such disability occurs AFTER thirty-six (36)
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monthly contributions have been paid prior to the semester of disability: the
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benefit shall be the monthly pension for permanent total disability payable not
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longer than the period designated in the schedule provided.

o In case of permanent partial disability, the monthly pension benefit shall be
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given in lump sum if it is payable for less than twelve (12) months.
o For the purpose of adjudicating retirement, death and permanent total disability r
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pension benefits, contributions shall be deemed paid for the months during
which the member received partial disability pension: Provided, That such
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contributions shall be based on his last contribution prior to his disability.

o Should a member who is on partial disability pension retire or die, his disability
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pension shall cease upon his retirement or death.

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(6) DEATH BENEFITS

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• Who are entitled.

o Death benefit is a cash benefit either in monthly pension or lump sum paid to
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the beneficiaries of a deceased member.

o Upon the death of a member who has paid at least thirty-six (36) monthly
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contributions prior to the semester of death, his primary beneficiaries shall be

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entitled to the monthly pension: Provided, That if he has no primary beneficiaries,

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his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to

thirty-six (36) times the monthly pension.
o If he has not paid the required thirty-six (36) monthly contributions, his primary or
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secondary beneficiaries shall be entitled to a lump sum benefit equivalent to

the monthly pension times the number of monthly contributions paid to the SSS
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or twelve (12) times the monthly pension, whichever is higher.
• Types of death benefits

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o Based on the foregoing, there are two (2) types of death benefits, to wit:
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1) Monthly pension; and

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2) Lump sum amount.

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Legal Practitioner
o The monthly pension is granted only to the primary beneficiaries of a deceased
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member who had paid 36 monthly contributions before the semester of death.
o The lump sum is the amount granted to the primary beneficiaries of a deceased
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member who had paid less than 36 monthly contributions before the semester
of death. The secondary beneficiaries shall be entitled to a lump sum benefit.
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• Amount of benefits.
o The monthly pension depends on the member’s paid contributions, including
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the credited years of service (CYS) and the number of dependent minor children
but not to exceed five (5).
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o On entitlement of illegitimate children:
▪ If a deceased member is survived by less than five (5) minor legitimate,
legitimated, or legally adopted children, the illegitimate minor children will be
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entitled to 50% of the share of the legitimate, legitimated or legally adopted
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children in the basic pension and 100% of the dependents’ pension.

▪ In cases where there are no legitimate, legitimated, or legally adopted
children, the illegitimate minor children shall be entitled to 100% of the basic
ss
pension.
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• The primary beneficiaries of a deceased member who has paid less than 36
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monthly contributions shall be entitled to lump sum benefit which shall be the
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higher of:
1. monthly pension times the number of monthly contributions paid prior to the
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semester of death; or
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2. twelve (12) times the monthly pension.

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• The secondary beneficiaries of the deceased member shall be entitled to a lump
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sum benefit equivalent to:

1. 36 times the monthly pension; if the member has paid at least 36 monthly
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contributions prior to the semester of death; or

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2. monthly pension times the number of monthly contributions paid or twelve (12)
times the monthly pension, whichever is higher, if the member has paid less
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than 36 monthly contributions prior to the semester of death.

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• The primary or secondary beneficiaries of a deceased employee-member, who

had no contribution payment at all and who was reported for coverage shall be
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entitled to funeral benefit only.

• The dependent legitimate, legitimated, legally adopted or illegitimate children, r
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conceived on or before the date of death of a deceased will each receive a

dependents’ pension equivalent to 10% of the members’ monthly pension or ₱250,
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whichever is higher.
• Only five (5) minor children, beginning from the youngest, are entitled to the
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dependents’ pension. No substitution is allowed.

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• Where there are more than five (5) legitimate and illegitimate minor children, the
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legitimate shall be preferred.

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• The dependents’ pension stops when the child reaches 21 years old, gets married,
gets employed or dies. However, the dependents’ pension is granted for life to
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children who are over 21 years old, provided they are incapacitated and
incapable of self-support due to physical or mental defect which is congenital and
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acquired during minority.

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• Other benefits the deceased member’s beneficiaries can avail of.

o The deceased member’s beneficiaries are entitled to a 13th month pension
payable every December and the funeral benefit, which is paid to whoever,
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shouldered the funeral expenses of the deceased member

o Survivorship pensioners prior to the effectivity of R.A. 7875 on March 4, 1995 are
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also entitled to hospitalization benefits under PhilHealth. They need to register

under PhilHealth
o Survivorship pensioners under the effectivity of RA 7875 on March 4, 1995 and
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thereafter, are no longer covered. However, those who wish to avail of

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PhilHealth benefits may enroll in the Individually-Paying Program (for

voluntary/self-employed) or the Indigent Program (IP) of PhilHealth.
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(7) FUNERAL BENEFIT
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• Amount of funeral benefit.
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A funeral grant shall be paid, in cash or in kind, to help defray the cost of funeral
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expenses upon the death of a member, including permanently totally disabled
member or retiree.
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EMPLOYEES’ COMPENSATION BENEFITS
This is the second class of benefits under the SSS Law, the first being the Social Security
al
Benefits discussed above. For purposes of discussing this topic in an orderly fashion, the
same shall be presented under the topic “DISABILITY AND DEATH BENEFITS”, infra.
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2. GSIS LAW (R.A. No. 8291)
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a. Coverage and exclusions

• Who are compulsorily required to become members of the GSIS?
1. All government personnel, whether elective or appointive, irrespective of status
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of appointment, provided they are receiving fixed monthly compensation and
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have not reached the mandatory retirement age of 65 years, are compulsorily
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covered as members of the GSIS and shall be required to pay contributions.
2. However, employees who have reached the retirement age of 65 or more shall
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also be covered, subject to the following rules:
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An employee who is already beyond the mandatory retirement age of 65 shall be
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compulsorily covered and be required to pay both the life and retirement
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premiums under the following situations:

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a. 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,
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including the period/s of his re-election to public office thereafter without

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interruption.
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b. Appointive officials who, before reaching the mandatory age of 65, are
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appointed to government position by the President of the Republic of the

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Philippines and shall remain in government service at age beyond 65.

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c. Contractual employees including casuals and other employees with an

employee-government agency relationship are also compulsorily covered,
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provided they are receiving fixed monthly compensation and rendering the
required number of working hours for the month.
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• What are the classes of membership in the GSIS?

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Membership in the GSIS is classified either by type or status of membership.

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o As to type of members, there are regular and special members:

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(a) Regular Members – are those employed by the government of the Republic
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of the Philippines, national or local, legislative bodies, government-owned and

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controlled corporations (GOCC) with original charters, government financial

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institutions (GFIs), except uniformed personnel of the Armed Forces of the

Philippines, the Philippine National Police, Bureau of Jail Management and
Penology (BJMP) and Bureau of Fire Protection (BFP), who are required by law to
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remit regular monthly contributions to the GSIS.

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(b) Special Members – are constitutional commissioners, members of the

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judiciary, including those with equivalent ranks, who are required by law to remit
regular monthly contributions for life insurance policies to the GSIS in order to
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answer for their life insurance benefits defined under RA 8291.

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o As to status of membership, there are active and inactive members.

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(a) Active member – refers to a member of the GSIS, whether regular or special,
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who is still in the government service and together with the government agency
to which he belongs, is required to pay the monthly contribution.
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(b) Inactive member – a member who is separated from the service either by
resignation, retirement, disability, dismissal from the service, retrenchment or, who
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is deemed retired from the service under this Act.
• When does membership become effective?
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The effective date of membership shall be the date of the member’s assumption to
duty on his original appointment or election to public office.
•
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What is the effect of separation from the service?
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A member separated from the service shall continue to be a member, and shall be
entitled to whatever benefits he has qualified to in the event of any contingency
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compensable under the GSIS Law.

• Who are excluded from the compulsory coverage of the GSIS Law?
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The following employees are excluded from compulsory coverage:
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(a) Uniformed personnel of the Armed Forces of the Philippines (AFP), Philippine
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National Police (PNP), Bureau of Fire Protection (BFP) and Bureau of Jail
Management and Penology (BJMP);
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(b) Barangay and Sanggunian Officials who are not receiving fixed monthly
compensation;
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(c) Contractual Employees who are not receiving fixed monthly compensation; and
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(d) Employees who do not have monthly regular hours of work and are not
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receiving fixed monthly compensation.

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b. Dependents and beneficiaries

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• Who are beneficiaries under the GSIS Law?

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There are two (2) kinds of beneficiaries under the GSIS Law as follows:
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1. Primary beneficiaries — The legal dependent spouse until he/she remarries and
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the dependent children.

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2. Secondary beneficiaries — The dependent parents and, subject to the

restrictions on dependent children, the legitimate descendants.
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• Who are dependents under the GSIS Law?

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Dependents shall be the following:

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(a) the legitimate spouse dependent for support upon the member or pensioner;
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(b) the legitimate, legitimated, legally adopted child, including the illegitimate child,
who is unmarried, not gainfully employed, not over the age of majority, or is over
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the age of majority but incapacitated and incapable of self-support due to a

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mental or physical defect acquired prior to age of majority; and

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(c) the parents who are dependent upon the member for support.
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Gainful Occupation — Any productive activity that provided the member with income
at least equal to the minimum compensation of government employees.
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c. Benefits
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The following are the benefits under the GSIS Law:

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(a) Compulsory Life Insurance Benefits under the Life Endowment Policy (LEP)
(b) Compulsory Life Insurance Benefits under the Enhanced Life Policy (ELP)
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(c) Retirement Benefits

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(d) Separation Benefit

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(e) Unemployment Benefit

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(f) Disability Benefits
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(g) Survivorship Benefits
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(h) Funeral Benefits
3. DISABILITY AND DEATH
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a. Labor Code
• What is the State Insurance Fund [SIF]?
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o The State Insurance Fund (SIF) is built up by the contributions of employers based
on the salaries of their employees as provided under the Labor Code.
o There are two (2) separate and distinct State Insurance Funds: one established
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under the SSS for private sector employees; and the other, under the GSIS for
public sector employees. The management and investment of the Funds are
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done separately and distinctly by the SSS and the GSIS. It is used exclusively for
payment of the employees’ compensation benefits and no amount thereof is
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authorized to be used for any other purpose.

• What are the agencies involved in the implementation of the Employees
Compensation Program (ECP)?
ss
e
o There are three (3) agencies involved in the implementation of the Employees’
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Compensation Program (ECP). These are: (1) The Employees’ Compensation
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ev
Commission (ECC) which is mandated to initiate, rationalize and coordinate
policies of the ECP and to review appealed cases from (2) the Government
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Service Insurance System (GSIS) and (3) the Social Security System (SSS), the
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administering agencies of the ECP.
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• Who are covered by the ECP?
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a. General coverage. – The following shall be covered by the Employees’ Ba

Compensation Program (ECP):
s
1. All employers;
2. Every employee not over sixty (60) years of age;
es
3. An employee over 60 years of age who had been paying contributions to

e
the System (GSIS/SSS) prior to age sixty (60) and has not been compulsorily
bl
retired; and
4. Any employee who is coverable by both the GSIS and SSS and should be
li
compulsorily covered by both Systems.

o
b. Sectors of employees covered by the ECP. - The following sectors are covered r
n
Ba
R
under the ECP:

1. All public sector employees including those of government-owned and/or
O
an
controlled corporations and local government units covered by the GSIS;

2. All private sector employees covered by the SSS; and
et
es
3. Overseas Filipino workers (OFWs), namely:

h
a. Filipino seafarers compulsorily covered under the SSS.

rn
b. Land-based contract workers provided that their employer, natural or

bl
C
juridical, is engaged in any trade, industry or business undertaking in the

Philippines; otherwise, they shall not be covered by the ECP.
o
te
• When is the start of coverage of employees under the ECP?

The coverage under the ECP of employees in the private and public sectors starts
R
on the first day of their employment.

In
an
• What are the benefits under the ECP?

The following are the benefits provided under the Labor Code:
es
h
a. Medical Benefits
b. Disability Benefits
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bl
1. Temporary total disability

2. Permanent total disability
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3. Permanent partial disability

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c. Death Benefit
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d. Funeral Benefit
74
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Legal Practitioner
b. POEA-Standard Employment Contract for Seafarers
w
• Applicable law in cases involving the POEA-SEC.
ie
By express provision of Section 31 of the 2010 POEA-SEC, “[a]ny unresolved dispute,
ev
claim or grievance arising out of or in connection therewith, including the annexes
thereof, shall be governed by the laws of the Republic of the Philippines,
international conventions, treaties and covenants to which the Philippines is a
R
signatory.” This provision signifies that the terms agreed upon by the parties pursuant
to the POEA-SEC are to be read and understood in accordance with Philippine laws,
al
particularly, Articles 197 [191], 198 [192] and 199 [193] of the Labor Code and the
applicable implementing rules and regulations in case of any dispute, claim or
grievance.
n
io
• OFW’S benefit claims vis-à-vis benefits in the labor code.
It must be underscored that the claims for disability, death and burial benefits
ss
involving OFWs over which the Labor Arbiters of the NLRC have jurisdiction, are not
e
the same as the claims against the State Insurance Fund under Title II, Book IV of the
i
fe
Labor Code for the same benefits, over which the Employees’ Compensation
ev
Commission (ECC) has jurisdiction.
o
R
• The labor code’s concept of PTD applies to claims of seafarers.
r
Pr
Permanent total disability (PTD) means the inability to do substantially all material
r
Ba
acts necessary to the prosecution of a gainful occupation without serious discomfort

or pain and without material injury or danger to life. In disability compensation, it is
Ba
s
not the injury per se which is compensated but the incapacity to work. The concept
es
of this kind of disability under Article 198 [192] of the Labor Code is applicable to the
permanent total disability of seafarers.
e
bl
• Requisites for compensability of injury or illness.

li
For disability to be compensable under Section 20 (A) of the 2010 POEA-SEC, two
o
elements must concur:

r
n
Ba
R
(1) The injury or illness must be work-related; and

O
an
(2) The work-related injury or illness must have existed during the term of the
seafarer's employment contract.
et
es
The same provision defines a work-related illness as "any sickness as a result of an

h
occupational disease listed under Section 32-A of [the POEA-SEC] with the
rn
conditions set therein satisfied." There should be a "reasonable linkage between the
bl
C
disease suffered by the employee and his work." Meanwhile, illnesses not mentioned
under Section 32 of the 2010 POEA-SEC are disputably presumed as work-related.
o
te
Notwithstanding the presumption of work-relatedness of an illness under Section 20

(A) (4), the seafarer must still prove by substantial evidence that his work conditions
R
caused or, at least, increased the risk of contracting the disease.

In
an
In order to establish compensability of a non-occupational disease, reasonable

proof of work-connection is sufficient - direct causal relation is not required. It is thus
this probability of connection, and not the ultimate degree of certainty, that is the
es
h
test of proof of compensation proceedings.

C
• Requisites for compensability of occupational disease

bl
In order for an occupational disease and the resulting disability or death to be

o
compensable, Section 32-A of the 2010 POEA-SEC requires that all of the following
conditions, as supported by substantial evidence, must be established:
R
1. The seafarer's work must involve the risks described in the POEA-SEC;
an
75
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,I
Legal Practitioner
2. The disease was contracted as a result of the seafarer's exposure to the
w
described risks;
3. The disease was contracted within a period of exposure and under such
ie
other factors necessary to contract it; and
4. There was no notorious negligence on the part of the seafarer.
ev
• Seafarer has burden of proof in disability claims.
R
The seafarer must still prove his entitlement to disability benefits by substantial
evidence of his illness' work-relatedness and that the ailment was acquired during
the term of his contract. He must show that he experienced health problems while
al
at sea, the circumstances under which he developed the illness, as well as the
symptoms associated with it.
n
• Principle of work-relatedness.
io
The principle of work-relatedness of an injury or illness means that the seafarer's injury
or illness has a possible connection to one's work, and thus, allows the seafarer to
ss
e
claim disability benefits therefor.
i
fe
ev
The 2010 POEA-SEC defines a work-related injury as an "injury resulting in disability or
death arising out of and in the course of employment," and a work-related illness as
o
"any sickness resulting to disability or death as a result of an occupational disease
R
listed under Section 32-A of this Contract with the conditions set therein satisfied.”
r
Pr
r
Ba
For illnesses not mentioned under Section 32, the 2010 POEA-SEC creates a
disputable presumption in favor of the seafarer that these illnesses are work-related.
Ba
However, the presumption does not necessarily result in an automatic grant of
s
disability compensation. The claimant, on due process grounds, still has the burden
es
to present substantial evidence that his work conditions caused or at least increased
e
the risk of contracting the illness. This is because awards of compensation cannot
bl
rest entirely on bare assertions and presumptions. In order to establish

compensability of a non-occupational disease, reasonable proof of work-
li
connection is sufficient – direct causal relation is not required. Thus, probability, not
o
the ultimate degree of certainty, is the test of proof in compensation proceedings.

r
n
Ba
R
• Injury or illness must occur during term of contract.

O
an
Section 32-A of the 2010 POEA-SEC states that for an occupational disease and the
et
resulting disability or death to be compensable, all of the following conditions

es
need to be satisfied:
h
rn
(1) The seafarer's work must involve the risks described therein;
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C
(2) The disease was contracted as a result of the seafarer's exposure to the
described risks;
o
te
(3) The disease was contracted within a period of exposure and under such
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(4) There was no notorious negligence on the part of the seafarer.

In
an
• Non-compensability of self-inflicted injury.

o No compensation and benefits shall be payable in respect of any injury,
incapacity, disability or death of the seafarer resulting from his willful or criminal
es
h
act or intentional breach of his duties; Provided, however, that the employer
can prove that such injury, incapacity, disability or death is directly attributable
C
bl
to the seafarer.
• Pre-employment medical examination (PEME); non-compensability of disability
from pre-existing illness.
o
o Pursuant to Section 20 (A) of the 2010 POEA-SEC, the employer is liable for
disability benefits when the seafarer suffers from a work-related injury or illness
R
during the term of his contract.

an
76
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▪ In this regard, Section 20 (E) thereof mandates the seafarer to disclose all his
w
pre-existing illnesses or conditions in his PEME; failing which shall disqualify him
from receiving disability compensation.
ie
o An illness shall be considered as pre-existing if prior to the processing of the POEA
contract, any of the following conditions is present, namely:
ev
(a) The advice of a medical doctor on treatment was given for such continuing
illness or condition; or
(b) The seafarer had been diagnosed and has knowledge of such illness or
R
condition but failed to disclose the same during the PEME, and such cannot
be diagnosed during the PEME.
al
• The 120-day/240-day treatment period rule.
o Significance of the period.
▪ When a seafarer suffers a work-related injury or illness in the course of
n
employment, the company-designated physician is obligated to arrive at a
io
definite assessment of the former's fitness or degree of disability within a

period of 120 days from repatriation. During the said period, the seafarer shall
be deemed on TEMPORARY TOTAL DISABILITY and shall receive his basic wage
ss
until he is declared fit to work or his temporary disability is acknowledged by
e
the company to be permanent, either partially or totally, as his condition is
i
fe
defined under the POEA-SEC and by applicable Philippine laws.
ev
▪ However, if the 120-day period is exceeded and no definitive declaration
is made because the seafarer requires further medical attention, then the
o
R
temporary total disability period may be extended up to a maximum of
r
240 days, subject to the right of the employer to declare within this period
Pr
that a permanent partial or total disability already exists.
r
Ba
• But before the company-designated physician may avail of the

allowable 240-day extended treatment period, he must perform some
Ba
s
significant act to justify the extension of the original 120-day period.

es
Otherwise, the law grants the seafarer the relief of permanent total
disability benefits due to such non-compliance.
e
bl
o Summary of Rules on the periods to assess the seafarer.

1. The company-designated physician must issue a final medical assessment on
li
o
the seafarer’s disability grading within a period of 120 days from the time the
seafarer reported to him; r
n
Ba
R
2. If the company-designated physician fails to give his assessment within the

period of 120 days without any justifiable reason, then the seafarer’s disability
O
an
becomes permanent and total;

3. If the company-designated physician fails to give his assessment within the
et
es
period of 120 days with a sufficient justification (e.g., seafarer required further
h
medical treatment or seafarer was uncooperative), then the period of

rn
diagnosis and treatment shall be extended to 240 days. The employer has the
bl
C
burden to prove that the company-designated physician has sufficient

justification to extend the period; and
o
te
4. If the company-designated physician still fails to give his assessment within the
extended period of 240 days, then the seafarer’s disability becomes
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permanent and total, regardless of any justification.

In
an
The above rule was further refined in the 2015 case of Marlow Navigation Philippines,
Inc. v. Osias, where the Court declared – and this is the current rule - as follows:
1. that mere inability to work for a period of 120 days does not entitle a seafarer
es
h
to permanent and total disability benefits;

2. that the determination of the fitness of a seafarer for sea duty is within the
C
bl
province of the company-designated physician, subject to the periods

prescribed by law;
3. that the company-designated physician has an initial 120 days to determine
o
the fitness or disability of the seafarer; and

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4. that the period of treatment may only be extended to 240 days if a sufficient
justification exists such as when further medical treatment is required or when
an
the seafarer is uncooperative.

77
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Legal Practitioner
The seafarer has the right to seek a second opinion once the company-designated
w
physician makes a definitive and final assessment within the 120-day period;
otherwise, no such obligation devolves on the seafarer to consult his own doctor.
ie
• Conditions required for the claim for total and permanent disability benefits to
prosper.
ev
In order for a seafarer’s claim for total and permanent disability benefits to prosper,
R
any of the following conditions should be present:
(a) The company-designated physician failed to issue a declaration as to his
al
fitness to engage in sea duty or disability even after the lapse of the 120-day
period and there is no indication that further medical treatment would
address his temporary total disability, hence, justify an extension of the
n
period to 240 days;
io
(b) 240 days had lapsed without any certification issued by the company
designated physician;
ss
(c) The company-designated physician declared that he is fit for sea duty within
e
the 120-day or 240-day period, as the case may be, but his physician of
i
fe
choice and the doctor chosen under Section 20 (B) (3) of the POEA-SEC are
ev
of a contrary opinion;
o
(d) The company-designated physician acknowledged that he is partially
R
permanently disabled but other doctors who he consulted, on his own and
r
Pr
jointly with his employer, believed that his disability is not only permanent but
r
Ba
total as well; Ba
(e) The company-designated physician recognized that he is totally and
s
permanently disabled but there is a dispute on the disability grading;

es
(f) The company-designated physician determined that his medical condition

e
is not compensable or work-related under the POEA-SEC but his doctor-of-

bl
choice and the third doctor selected under Section 20 (B) (3) of the POEA-
n
SEC found otherwise and declared him unfit to work;

li
(g) The company-designated physician declared him totally and permanently

o
disabled but the employer refuses to pay him the corresponding benefits; r
n
Ba
R
and
O
an
(h) The company-designated physician declared him partially and

permanently disabled within the 120-day or 240-day period but he remains
et
incapacitated to perform his usual sea duties after the lapse of said periods.
es
h
• Post-Employment Medical Examination.

rn
o As a general rule, for a seafarer’s claim for disability to prosper, it is mandatory

bl
C
and must be strictly observed that within three (3) working days from his
repatriation, he is examined by a company-designated physician. Non-
o
compliance with this mandatory requirement results in the forfeiture of the right
te
to claim for compensation and disability benefits.

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▪ Exceptions to this are: (1) when the seafarer is incapacitated to report to the
In
employer upon his repatriation; and (2) when the employer inadvertently or
an
deliberately refused to submit the seafarer to a post-employment medical

examination by a company-designated physician.
es
h
• The Third Doctor Rule

C
bl
o The conflicting findings of the company's doctor and the seafarer's physician
often stir suits for disability compensation. As an extrajudicial measure of settling
their differences, the POEA-SEC gives the parties the option of agreeing jointly
o
on a third doctor whose assessment shall break the impasse and shall be the
R
final and binding diagnosis.

o Referral to a third doctor is mandatory when:
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78
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Legal Practitioner
there is a valid and timely assessment by the company-designated

▪
w
physician; and
▪ the appointed doctor of the seafarer refuted such assessment.
ie
o Note that the third doctor's decision shall be final and binding on both parties.
• Death Benefits of seafarers
ev
o To be entitled to death compensation benefits from the employer, the death
of the seafarer:
▪ (1) must be work-related; and
R
▪ (2) must happen during the term of the employment contract.
• Exception when death after termination of employment is compensable.
al
o POEA-SEC considers the possibility of compensation for the death of the
seafarer occurring after the termination of the employment contract on
account of a work-related illness. But for death under this provision to be
n
compensable, the claimant must satisfy all of the following conditions:
io
(1) The seafarer's work must involve the risks described in the POEA-SEC;
(2) The disease was contracted as a result of the seafarer's exposure to the
described risks;
ss
e
(3) The disease was contracted within a period of exposure and under such
i
fe
ev
(4) There was no notorious negligence on the part of the seafarer.
In fulfilling these requisites, substantial evidence must be presented which is more
o
R
than a mere scintilla; it must reach the level of relevant evidence as a reasonable
r
mind might accept as sufficient to support a conclusion.

Pr
r
Ba
o Medical repatriation as an exception. Ba

While the general rule is that the seafarer’s death should occur during the term of
s
his employment, the seafarer’s death occurring after the termination of his
es
employment due to his medical repatriation on account of a work-related injury or

e
illness constitutes an exception thereto.

bl
• Death caused by the seafarer himself, not compensable.

li
o In the following cases, the death by suicide was likewise held not
o
compensable:
r
n
▪ TSM Shipping (Phils.), Inc. v. De Chavez, where the seafarer was found dead
Ba
R
inside his cabin bathroom hanging by the shower cord and covered with
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an
blood.
▪ Wallem Maritime Services, Inc. v. Pedrajas, where the seafarer hanged
et
himself on the Upper Deck B of the vessel with a rope tied to his neck.
es
▪ Great Southern Maritime Services Corp. v. Surigao, where the seafarer was
h
found dead inside the bathroom of his hospital room with a belt tied around
rn
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his neck.
▪ Maritime Factors, Inc. v. Hindang, where the seafarer’s body was found
hanging by a strap on his neck in a kneeling position inside the locker
o
te
(wardrobe) of his cabin.

R
D. LABOR RELATIONS
In
an
1. Right to Self-Organization
a. Coverage
es
h
• Who are eligible to join, form or assist a labor organization for purposes of
collective bargaining?
C
bl
o In the private sector:

1. All persons employed in commercial, industrial and agricultural enterprises;
2. Employees of government-owned and/or controlled corporations without
o
original charters established under the Corporation Code;

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3. Employees of religious, charitable, medical or educational institutions,

whether operating for profit or not;
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79
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Legal Practitioner
4. Front-line managers, commonly known as supervisory employees [See
w
discussion below];
5. Alien employees [See discussion below];
ie
6. Working children [See discussion below];
7. Homeworkers [See discussion below];
ev
8. Employees of cooperatives [See discussion below]; and
9. Employees of legitimate contractors not with the principals but with the
contractors
R
o In the public sector:
All rank-and-file employees of all branches, subdivisions, instrumentalities, and
al
agencies of government, including government-owned and/or controlled
corporations with original charters, can form, join or assist employees’ organizations
n
of their own choosing.
• Are front-line managers or supervisors eligible to join, form or assist a labor
io
organization?
Yes, but only among themselves. They cannot join a rank-and-file union.
• Do alien employees have the right to join a labor organization?
ss
e
o No, except if the following requisites are complied with:
i
▪ (1) He should have a valid working permit issued by the DOLE; and
fe
ev
▪ (2) He is a national of a country which grants the same or similar rights to
Filipino workers OR which has ratified either ILO Convention No. 87 or ILO
o
Convention No. 98 (ON THE RIGHT TO SELF-ORGANIZATION OF WORKERS) as
R
certified by the Philippine Department of Foreign Affairs (DFA).
r
Pr
• Do members of cooperatives have the right to join, form or assist a labor
r
Ba
organization?
No, because they are co-owners of the cooperative.
Ba
• What about employees of a cooperative?
s
Yes, because they have employer-employee relationship with the cooperative.

es
• What about members who are at the same time employees of the cooperative?
e
No, because the prohibition covers employees of the cooperative who are at the
bl
same time members thereof.

• Can employees of job contractors join, form or assist a labor organization?
li
Yes, but not for the purpose of collective bargaining with the principal but with their
o
direct employer – the job contractor.

r
n
• Are self-employed persons allowed to join, form or assist a labor organization?

Ba
R
Yes, for their mutual aid and protection but not for collective bargaining purposes
O
an
since they have no employers but themselves. BUT AS AND BY WAY OF DISTINCTION,
THEIR LABOR ORGANIZATION IS CALLED “WORKERS’ ASSOCIATION.”
et
es
This rule applies as well to ambulant, intermittent and other workers, rural workers
h
and those without any definite employers. The reason for this rule is that these
rn
bl
C
persons have no employers with whom they can collectively bargain.
b. Eligibility of Membership
o
te
• Who are the persons that are not allowed to form, join or assist labor
organizations?
R
o In the private sector:

In
an
▪ Top and middle level managerial employees; and

▪ Confidential employees.
o In the public sector
es
h
▪ The following are not eligible to form employees’ organizations:

• High-level employees whose functions are normally considered as policy-
C
bl
making or managerial or whose duties are of a highly confidential nature;

• Members of the Armed Forces of the Philippines;
• Police officers;
o
• Policemen;
• Firemen; and
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• Jail guards.
an
80
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Legal Practitioner
• Ineligibility of managerial employees to unionize; right of supervisory employees
w
There are 3 types of managerial employees:
ie
1. Top Management
2. Middle Management
ev
3. First-Line Management (also called supervisory level)
R
The first two above are absolutely prohibited; but the third, being supervisors, are
allowed but only among themselves.
al
• Are confidential employees allowed to join, form or assist a labor organization?
No, under the confidential employee rule. “Confidential employees” are those
who meet the following criteria:
n
(1) They assist or act in a confidential capacity;
io
(2) To persons or officers who formulate, determine, and effectuate

management policies specifically in the field of labor relations. If not related to
labor relations, an employee can never be considered as confidential
ss
employee as would deprive him of his right to self-organization.
i e
The two (2) criteria are cumulative and both must be met if an employee is to be
fe
ev
considered a “confidential employee” that would deprive him of his right to form,
join or assist a labor organization.
o
R
c. Doctrine of Necessary Implication
r
Pr
Under the confidential employee rule, a rank-and-file employee or a supervisory
r
employee, is elevated to the position of a managerial employee, under another
Ba
doctrine called the DOCTRINE OF NECESSARY IMPLICATION, hence, he is treated as

Ba
if he is a managerial employee because of his access to confidential information
s
related to labor relations. THE DOCTRINE OF NECESSARY IMPLICATION IS THEREFORE

es
THE LEGAL BASIS FOR INELIGIBILITY OF CONFIDENTIAL EMPLOYEE TO JOIN A UNION.

e
For example, not all secretaries to top officials of the company may be considered
bl
as confidential employees, unless they have access to confidential information

related to labor relations, such as when they transcribe or type/encode the
li
counter-proposals of management on the proposals of the SEBA in a CBA

o
negotiation. That access to such counter-proposals is the type of access r

n
Ba
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contemplated under this rule.

O
d. Commingling or Mixed Membership

an
Is COMMINGLING or MIXED MEMBERSHIP of supervisors and rank-and-file union in

et
es
one union allowed? Is it a ground to cancel its registration?

h
No. It is not allowed. However, it bears noting that in case there is commingling or
rn
bl
mixed membership of supervisors and rank-and-file employees in one union, the

C
new rule enunciated in Article 256 [245-A] of the Labor Code, unlike in the old law,
is that it cannot be invoked as a ground for the cancellation of the registration of
o
te
the union. The employees so improperly included are automatically deemed

removed from the list of members of said union. In other words, their removal from
R
the said list is by operation of law.

In
an
e. Effect of Inclusion as Members of Employees Outside the Bargaining Unit

See above.
es
h
2. Bargaining Unit
C
• What is a bargaining unit?

bl
A “bargaining unit” refers to a group of employees sharing mutual interests within a

given employer unit, comprised of all or less than all of the entire body of employees
o
in the employer unit or any specific occupational or geographical grouping within

such employer unit. It may also refer to the group or cluster of jobs or positions within
R
the employer’s establishment that supports the labor organization which is applying
for registration.
an
81
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Legal Practitioner
• What are the four tests to determine appropriate bargaining unit?
w
Based on jurisprudence, there are certain tests which may be used in determining
the appropriate collective bargaining unit, to wit:
ie
(a) Community or mutuality of interest doctrine;
ev
(b) Globe doctrine or will of the members;
(c) Collective bargaining history doctrine; and
R
(d) Employment status doctrine.
(a) COMMUNITY OR MUTUALITY OF INTEREST DOCTRINE.
al
Under this doctrine, the employees sought to be represented by the collective
bargaining agent must have community or mutuality of interest in terms of
n
employment and working conditions as evinced by the type of work they perform. It is
io
characterized by similarity of employment status, same duties and responsibilities and

substantially similar compensation and working conditions.
St. James School of Quezon City v. Samahang Manggagawa sa St. James School
ss
e
of Quezon City. - Respondent union sought to represent the rank-and-file employees
i
(consisting of the motor pool, construction and transportation employees) of
fe
ev
petitioner-school’s Tandang Sora campus. Petitioner-school opposed it by contending
that the bargaining unit should not only be composed of said employees but must
o
include administrative, teaching and office personnel in its five (5) campuses. The
R
Supreme Court disagreed with said contention. The motor pool, construction and
r
Pr
transportation employees of the Tandang Sora campus had 149 qualified voters at the
r
time of the certification election, hence, it was ruled that the 149 qualified voters
Ba
should be used to determine the existence of a quorum during the election. Since a
Ba
majority or 84 out of the 149 qualified voters cast their votes, a quorum existed during
s
the certification election. The computation of the quorum should be based on the
es
rank-and-file motor pool, construction and transportation employees of the Tandang

e
Sora campus and not on all the employees in petitioner’s five (5) campuses. Moreover,
bl
the administrative, teaching and office personnel are not members of the union. They
n
do not belong to the bargaining unit that the union seeks to represent.
li
Other cases:
o
r
n
(1) San Miguel Corporation v. Laguesma, involving a petition of the union which
Ba
R
seeks to represent the sales personnel in the various Magnolia sales offices in Northern
O
an
Luzon. Petitioner company, however, opposed it by taking the position that each sales
office should constitute one bargaining unit. In disagreeing with this proposition of
et
petitioner, the High Court said: “What greatly militates against this position (of the
es
company) is the meager number of sales personnel in each of the Magnolia sales
h
office in Northern Luzon. Even the bargaining unit sought to be represented by

rn
bl
respondent union in the entire Northern Luzon sales area consists only of approximately
C
fifty-five (55) employees. Surely, it would not be for the best interest of these employees
if they would further be fractionalized. The adage ‘there is strength in number’ is the
o
te
very rationale underlying the formation of a labor union.”

R
(2) San Miguel Corporation Supervisors and Exempt Employees Union v.

In
Laguesma, involving the issue of validity of constituting as one CBU of employees

an
working in San Miguel’s three (3) plants located in three (3) different places, namely:
(1) in Cabuyao, Laguna, (2) in Otis, Pandacan, Metro Manila, and (3) in San Fernando,
Pampanga. It was declared that geographical location is immaterial and therefore
es
h
can be completely disregarded if the communal or mutual interest of the employees

are not sacrificed. The distance among the 3 plants is not productive of insurmountable
C
bl
difficulties in the administration of union affairs. Neither are there regional differences
that are likely to impede the operations of a single bargaining representative.
o
(3) Similar to this case is University of the Philippines v. Ferrer-Calleja, where all
non-academic rank-and-file employees of the University of the Philippines in its various
R
campuses, to wit: (1) Diliman, Quezon City; (2) Padre Faura, Manila; (3) Los Baños,
Laguna; and (4) the Visayas, were allowed to participate in a certification election as
an
one bargaining unit.

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(b) GLOBE DOCTRINE.
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This principle is based on the will of the employees. It is called Globe doctrine
ie
because this principle was first enunciated in the United States case of Globe Machine
and Stamping Co., where it was ruled, in defining the appropriate bargaining unit, that
in a case where the company’s production workers can be considered either as a
ev
single bargaining unit appropriate for purposes of collective bargaining or as three (3)
separate and distinct bargaining units, the determining factor is the desire of the
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workers themselves. Consequently, a certification election should be held separately
to choose which representative union will be chosen by the workers.
al
International School Alliance of Educators [ISAE] v. Quisumbing. - The Supreme
Court ruled here that foreign-hired teachers do not belong to the bargaining unit of
the local-hires because the former have not indicated their intention to be grouped
n
with the latter for purposes of collective bargaining. Moreover, the collective
io
bargaining history of the school also shows that these groups were always treated
separately.
(c) COLLECTIVE BARGAINING HISTORY DOCTRINE.
ss
e
This principle puts premium to the prior collective bargaining history and affinity
i
fe
of the employees in determining the appropriate bargaining unit. However, the
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existence of a prior collective bargaining history has been held as neither decisive nor
conclusive in the determination of what constitutes an appropriate bargaining unit.
o
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National Association of Free Trade Unions v. Mainit Lumber Development
r
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Company Workers Union. - It was ruled here that there is mutuality of interest among
r
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the workers in the sawmill division and logging division as to justify their formation of a
single bargaining unit. This holds true despite the history of said two divisions being
Ba
treated as separate units and notwithstanding their geographical distance from each
s
other.
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(d) EMPLOYMENT STATUS DOCTRINE.

e
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The determination of the appropriate bargaining unit based on the employment

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status of the employees is considered an acceptable mode. For instance, casual

li
employees and those employed on a day-to-day basis, according to the Supreme

o
Court in Philippine Land-Air-Sea Labor Union v. CIR, do not have the mutuality or
r
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community of interest with regular and permanent employees. Hence, their inclusion
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in the bargaining unit composed of the latter is not justified. Confidential employees,
O
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by the very nature of their functions, assist and act in a confidential capacity to, or
have access to confidential matters of, persons who exercise managerial functions in
et
the field of labor relations. As such, the rationale behind the ineligibility of managerial
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employees to form, assist or join a labor union equally applies to them. Hence, they
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cannot be allowed to be included in the rank-and-file employees’ bargaining unit.

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The rationale for this inhibition is that if these managerial employees would belong to
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or be affiliated with a union, the latter might not be assured of their loyalty to the union
in view of evident conflict of interest. The union can also become company-
o
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dominated with the presence of managerial employees in its membership.

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3. Bargaining Representative
In
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Note: Employer as a mere 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
es
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a concomitant right to oppose a petition for certification election. The employer’s

participation in such proceedings shall be limited to:
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(1) being notified or informed of petitions of such nature; and

(2) submitting the list of employees during the pre-election conference should
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the Med-Arbiter act favorably on the petition.

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Modes to acquire status as Sole and Exclusive Bargaining Agent (SEBA):

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(3.a.) Request for SEBA Certification

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• Is voluntary recognition still a proper mode of selecting a SEBA?
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No more, because of its repeal and being replaced by the new mode called
“REQUEST FOR SEBA CERTIFICATION” per Department Order No. 40-I-15, Series of
ie
2015, (Sept. 7, 2015).
• What should the employer do if a request for recognition or a demand for CBA
ev
negotiation is made by a union which has not been certified as the SEBA?
The employer so requested cannot now extend voluntary recognition but may still
validly file a petition for certification election (PCE) under Article 270 [258] of the
R
Labor Code, in order to determine if the requesting union has the majority support
of the employees in the bargaining unit which it seeks to represent or where it
•
intends to operate.al
What are the situations involved in this new mode of “REQUEST FOR SEBA
CERTIFICATION”?
n
THREE SCENARIOS INVOLVING A REQUEST FOR CERTIFICATION.
io
There are three (3) scenarios conceived under the Rules on this mode, namely:
(1) Request for certification in unorganized establishment with only one (1)
legitimate union;
ss
(2) Request for certification in unorganized establishment with more than one
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(1) legitimate labor organization; and
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(3) Request for certification in organized establishment.
ev
The foregoing scenarios are discussed below.
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FIRST SCENARIO: Request for certification in an UNORGANIZED establishment with only

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one (1) legitimate union.
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a. Validation process.
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s
If the DOLE Regional Director finds the establishment unorganized with only one (1)
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legitimate labor organization in existence, he/she should call a conference within

five (5) working days for the submission of the following:
e
1. The names of employees in the covered bargaining unit who signify their
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support for the SEBA certification, provided that said employees comprise at
least majority of the number of employees in the covered bargaining unit; and
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o
2. Certification under oath by the president of the requesting union or local that
all documents submitted are true and correct based on his/her personal r
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knowledge.
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The submission shall be presumed to be true and correct unless contested under
oath by any member of the bargaining unit during the validation conference. For
et
es
this purpose, the employer or any representative of the employer shall not be
h
deemed a party-in-interest but only as a bystander to the process of certification.

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If the requesting union or local fails to complete the requirements for SEBA
certification during the conference, the Request should be referred to the Election
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Officer for the conduct of certification election.

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b. Action on the submission – when SEBA Certification should be issued.

In
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If the DOLE Regional Director finds the requirements complete, he/she should issue,
during the conference, a Certification as SEBA enjoying the rights and privileges of
an exclusive bargaining agent of all the employees in the covered bargaining unit.
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h
The DOLE Regional Director should cause the posting of the SEBA Certification for
15 consecutive days in at least 2 conspicuous places in the establishment or
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covered bargaining unit.
c. Effect of certification.
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Upon the issuance of the Certification as SEBA, the certified union or local shall enjoy
all the rights and privileges of an exclusive bargaining agent of all the employees
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in the covered CBU.

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SECOND SCENARIO: Request for certification in unorganized establishment with more
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than one (1) legitimate labor organization.
ie
If the DOLE Regional Director finds the establishment unorganized with more than
one (1) legitimate labor organization, he/she should refer the same to the Election
ev
Officer for the conduct of certification election. The certification election shall be
conducted in accordance with the Rules.
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THIRD SCENARIO: Request for certification in organized establishment.
al
If the Regional Director finds the establishment organized, he/she should refer the
same to the Mediator-Arbiter for the determination of the propriety of conducting
a certification election.
n
io
(3.b.) Certification/Consent Election

• What is certification election?
“Certification election” refers to the process of determining through secret ballot
ss
e
the sole and exclusive bargaining agent of the employees in an appropriate
i
bargaining unit for purposes of collective bargaining or negotiations.
fe
ev
• Who may file a petition for certification election?
The petition may be filed by:
o
1. A legitimate labor organization which may be:
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(a) an independent union; or
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(b) a national union or federation which has already issued a charter
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Ba
certificate to its local chapter participating in the certification election; or

(c) a local chapter which has been issued a charter certificate by the
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national union or federation.
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2. An employer, when requested by a labor organization to bargain collectively

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and its majority status is in doubt.

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2) Bars to the holding of Certification/Consent Election

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• What are the rules prohibiting the filing of petition for certification election (bar
li
rules)?
o
a. General rule.
r
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The general rule is that in the absence of a CBA duly registered in accordance with
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Article 231 of the Labor Code, a petition for certification election may be filed at
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any time.
b. Bar rules.
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No certification election may be held under the following rules:

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1. Statutory bar rule;

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2. Certification year bar rule;

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3. Negotiations bar rule;

4. Bargaining deadlock bar rule; or
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5. Contract bar rule.

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1. STATUTORY BAR RULE.

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The Labor Code does not contain any provision on this rule but the Rules to Implement
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the Labor Code embody a rule that bars the filing of a PCE within a period of one (1)
year from the date of a valid conduct of a certification, consent, run-off or re-run
election where no appeal on the results thereof was made. If there was such an
es
h
appeal from the order of the Med-Arbiter, the running of the one-year period is
deemed suspended until the decision on the appeal has become final and executory.
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This is called the statutory bar rule which finds its roots from a similar rule in the United
States. Thus, an election cannot be held in any bargaining unit in which a final and
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valid election was concluded within the preceding 12-month period.

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2. CERTIFICATION YEAR BAR RULE.

Under this rule, a petition for certification election (PCE) may not be filed within one (1)
an
year:
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1. From the date a union is certified as SEBA by virtue of a REQUEST FOR SEBA
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CERTIFICATION; or
ie
2. From the date a valid certification, consent, run-off or re-run election has been
conducted within the bargaining unit.
ev
If after this one year period, the SEBA did not commence collective bargaining with
the employer, a PCE may be filed by a rival union to challenge the majority status of
the certified SEBA.
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3. NEGOTIATIONS BAR RULE.
al
Under this rule, no PCE should be entertained while the sole and exclusive bargaining
agent (SEBA) and the employer have commenced and sustained negotiations in
good faith within the period of one (1) year from the date of a valid certification,
n
consent, run-off or re-run election or from the date of voluntary recognition.
io
Once the CBA negotiations have commenced and while the parties are in the process
of negotiating the terms and conditions of the CBA, no challenging union is allowed to
file a PCE that would disturb the process and unduly forestall the early conclusion of
ss
e
the agreement.
i
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4. BARGAINING DEADLOCK BAR RULE.
ev
Under this rule, a PCE may not be entertained when a bargaining deadlock to which
o
an incumbent or certified bargaining agent is a party has been submitted to
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conciliation or arbitration or has become the subject of a valid notice of strike or
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Pr
lockout.
r
Ba
Kaisahan ng Manggagawang Pilipino [KAMPIL-KATIPUNAN] v. Trajano. - The bargaining Ba

deadlock-bar rule was not applied here because for more than four (4) years after it
s
was certified as the exclusive bargaining agent of all the rank-and-file employees, it
did not take any action to legally compel the employer to comply with its duty to
es
bargain collectively, hence, no CBA was executed. Neither did it file any unfair labor
e
practice suit against the employer nor did it initiate a strike against the latter. Under the
bl
circumstances, a certification election may be validly ordered and held.

li
5. CONTRACT BAR RULE.

o
Under this rule, a PCE cannot be filed when a CBA between the employer and a duly r
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Ba
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recognized or certified bargaining agent has been registered with the Bureau of Labor
Relations (BLR) in accordance with the Labor Code. Where the CBA is duly registered,
O
an
a petition for certification election may be filed only within the 60-day freedom period
prior to its expiry. The purpose of this rule is to ensure stability in the relationship of the
et
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workers and the employer by preventing frequent modifications of any CBA earlier
h
entered into by them in good faith and for the stipulated original period.
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When contract bar rule does not apply:

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1. Where there is an automatic renewal provision in the CBA but prior to the date
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when such automatic renewal became effective, the employer seasonably

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filed a manifestation with the Bureau of Labor Relations of its intention to

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terminate the said agreement if and when it is established that the bargaining
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agent does not represent anymore the majority of the workers in the bargaining
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unit.
2. Where the CBA, despite its due registration, is found in appropriate proceedings
es
that: (a) it contains provisions lower than the standards fixed by law; or (b) the
h
documents supporting its registration are falsified, fraudulent or tainted with

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misrepresentation.
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3. Where the CBA does not foster industrial stability, such as contracts where the
identity of the representative is in doubt since the employer extended direct
o
recognition to the union and concluded a CBA therewith less than one (1) year
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from the time a certification election was conducted where the “no union”
vote won. This situation obtains in a case where the company entered into a
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CBA with the union when its status as exclusive bargaining agent of the
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employees has not been established yet.
ie
4. Where the CBA was registered before or during the last sixty (60) days of a
subsisting agreement or during the pendency of a representation case. It is
well-settled that the 60-day freedom period based on the original CBA should
ev
not be affected by any amendment, extension or renewal of the CBA for
purposes of certification election.
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• What are the requisites for the validity of the petition for certification election? The
following requisites should concur:
al
1. The union should be legitimate which means that it is duly registered and listed
in the registry of legitimate labor unions of the BLR or that its legal personality
n
has not been revoked or cancelled with finality.
io
2. In case of organized establishments, the petition for certification election is

filed during (and not before or after) the 60-day freedom period of a duly
registered CBA.
ss
e
3. In case of organized establishments, the petition complied with the 25%
i
written support of the members of the bargaining unit.
fe
ev
4. The petition is filed not in violation of any of the four (4) bar rules [See above
discussion thereof].
o
R
• What are the two (2) kinds of majorities (DOUBLE MAJORITY RULE)?
r
Pr
The process of certification election requires two (2) kinds of majority votes, viz.:
r
1. Number of votes required for the validity of the process of certification election
Ba
itself. In order to have a valid certification election, at least a majority of all

Ba
eligible voters in the appropriate bargaining unit must have cast their votes.
s
2. Number of votes required to be certified as the collective bargaining agent.

es
To be certified as the sole and exclusive bargaining agent, the union should
e
obtain a majority of the valid votes cast.

bl
• What are some pertinent principles on certification election?

n
o The pendency of a petition to cancel the certificate of registration of a union

li
participating in a certification election does not stay the conduct thereof.

o
o The pendency of an unfair labor practice case filed against a labor organization
r
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participating in the certification election does not stay the holding thereof.
Ba
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o Direct certification as a method of selecting the exclusive bargaining agent of

O
an
the employees is not allowed. This is because the conduct of a certification

election is still necessary in order to arrive in a manner definitive and certain
et
concerning the choice of the labor organization to represent the workers in a

es
collective bargaining unit.

h
o The “No Union” vote is always one of the choices in a certification election. Where
rn
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majority of the valid votes cast results in “No Union” obtaining the majority, the
C
Med-Arbiter shall declare such fact in the order.

o Only persons who have direct employment relationship with the employer may
o
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vote in the certification election, regardless of their period of employment.

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In
CERTIFICATION ELECTION
an
IN AN UNORGANIZED ESTABLISHMENT
• What is meant by “unorganized establishment”?
es
h
As distinguished from “organized establishment,” an “unorganized establishment” is an

employer entity where there is no recognized or certified collective bargaining union
C
or agent.
bl
A company or an employer-entity, however, may still be considered an unorganized

establishment even if there are unions in existence therein for as long as not one of
o
them is duly certified as the sole and exclusive bargaining representative of the
employees in the particular bargaining unit it seeks to operate and represent.
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Further, a company remains unorganized even if there is a duly recognized or certified

bargaining agent for rank-and-file employees, for purposes of the petition for
an
certification election filed by supervisors. The reason is that the bargaining unit
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composed of supervisors is separate and distinct from the unionized bargaining unit of
w
rank-and-file employees. Hence, being unorganized, the 25% required minimum
support of employees within the bargaining unit of the supervisors need not be
ie
complied with.
• How should certification election be conducted in an unorganized establishment?
ev
In case of a petition filed by a legitimate organization involving an unorganized
establishment, the Med-Arbiter is required to immediately order the conduct of a
certification election upon filing of a petition for certification election by a legitimate
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labor organization.
al CERTIFICATION ELECTION
IN AN ORGANIZED ESTABLISHMENT
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• What are the requisites for the conduct of a certification election in an organized
io
establishment?
The Med-Arbiter is required to automatically order the conduct of a certification
election by secret ballot in an organized establishment as soon as the following
ss
requisites are fully met:
e
1. That a petition questioning the majority status of the incumbent bargaining agent
i
fe
is filed before the DOLE within the 60-day freedom period;
ev
2. That such petition is verified; and
3. That the petition is supported by the written consent of at least twenty-five percent
o
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(25%) of all the employees in the bargaining unit.
r
• What is consent election?

Pr
A “consent election” refers to the process of determining through secret ballot the
r
Ba
sole and exclusive bargaining agent (SEBA) of the employees in an appropriate

bargaining unit for purposes of collective bargaining and negotiation. It is
Ba
s
voluntarily agreed upon by the parties, with or without the intervention of the DOLE.
es
• What are the distinctions between consent election and certification election?
e
Consent election is but a form of certification election. They may be distinguished

bl
from each other in the following manner:

li
o
(1) The former is held upon the mutual agreement of the contending unions; while
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the latter does not require the mutual consent of the parties as it is conducted
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upon the order of the Med-Arbiter (Mediator-Arbiter).

O
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(2) The former may be conducted with or without the control and supervision of
the DOLE; while the latter is always conducted under the control and
et
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supervision of the DOLE.

h
(3) The former is being conducted as a voluntary mode of resolving labor dispute;
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while the latter, although non-adversarial, is a compulsory method of

adjudicating a labor dispute.
o
(4) The former is given the highest priority; while the latter is resorted to only when
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the contending unions fail or refuse to submit their representation dispute

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through the former. This is so because under the Implementing Rules, as

In
amended, even in cases where a PCE is filed, the Med-Arbiter (Mediator-

an
Arbiter), during the preliminary conference and hearing thereon, is tasked to

determine the “possibility of a consent election.” It is only when the contending
unions fail to agree to the conduct of a consent election during the preliminary
es
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conference that the Med-Arbiter (Mediator-Arbiter) will proceed with the

process of certification election by conducting as many hearings as he may
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deem necessary up to its actual holding. But in no case shall the conduct of
the certification election exceed 15 days from the date of the scheduled
preliminary conference/hearing after which time, the PCE is considered
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submitted for decision.

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(5) The former necessarily involves at least two (2) or more contending unions; while
the latter may only involve one (1) petitioner union.
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(6) The former may be conducted in the course of the proceeding in the latter or
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during its pendency.
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(3.c.) Failure of election, Run-Off Election, Re-run election
• What is a run-off election?
ev
A “run-off election” refers to an election between the labor unions receiving the two
(2) highest number of votes in a certification election or consent election with three (3)
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or more unions in contention, where such certification election or consent election
results in none of the contending unions receiving the majority of the valid votes cast;
provided, that the total number of votes for all contending unions, if added, is at least
al
fifty percent (50%) of the number of valid votes cast.
• When is it conducted?
n
If the above conditions that justify the conduct of a run-off election are present and
io
there are no objections or challenges which, if sustained, can materially alter the
election results, the Election Officer should motu proprio conduct a run-off election
within ten (10) days from the close of the election proceeding between the labor
ss
e
unions receiving the two highest number of votes.
i
fe
ILLUSTRATION.
ev
To illustrate, in a certification election involving four (4) unions, namely: Union A,
o
Union B, Union C, and Union D, where there are 100 eligible voters who validly cast their
R
votes, and the votes they each garnered are as follows: Union A – 35; Union B – 25;
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Pr
Union C – 10; Union D - 15; and No Union - 15, a run-off election may be conducted
r
between Union A and Union B because:
Ba
(1) Not one of the unions mustered the majority vote of 51 votes but Union A
Ba
s
and Union B got the first two highest number of votes;

es
(2) If all the votes for the contending unions are added up, it will result in at least
e
50% of the valid votes cast (Union A – 35; Union B – 25; Union C – 10; Union D
bl
- 15 for a total of 85 or 85%); and

n
(3) There are no objections or challenges which, if sustained, can materially

li
alter the results of the election.

o
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THE “NO UNION” CHOICE SHOULD NO LONGER BE INCLUDED.

Ba
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For obvious reason, the choice of “No Union” should no longer be included in
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the run-off election.

et
RE-RUN ELECTION
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h
“‘Re-run election’ refers to an election conducted to break a tie between

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contending unions, including between ‘no union’ and one of the unions. It shall
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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.
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GROUNDS CITED IN THE RULES FOR RE-RUN ELECTION.

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Based on the above-quoted rule, there are 2 situations contemplated thereunder that
In
justify the conduct of a re-run election, to wit:

an
(1) To break a tie; or

(2) To cure a failure of election.
es
h
RULE IN CASE OF FAILURE OF ELECTION.

C
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In failure of election, the number of votes cast in the certification or consent

election is less than the majority of the number of eligible voters and there are no
challenged votes that could materially change the results of the election. For example,
o
in a CBU composed of 100 employees, the majority of 100, which is 51, should validly
cast their votes in the election; otherwise, if less than 51 employees have validly cast
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their votes, there is here a failure of election.

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4. Rights of Labor Organizations
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a. Check Off, Assessment, and Agency Fees
• Requisites for validity of union dues and special assessments
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The following requisites must concur in order for union dues and special assessments
for the union’s incidental expenses, attorney’s fees and representation expenses to
ev
be valid, namely:
(a) Authorization by a written resolution of the majority of all the members at a
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general membership meeting duly called for the purpose;
(b) Secretary’s record of the minutes of said meeting; and
al
(c) Individual written authorizations for check-off duly signed by the employees
concerned.
n
• Assessment for attorney’s fees, negotiation fees and similar charges.
io
The rule is that no such attorney’s fees, negotiation fees or similar charges of any
kind arising from the negotiation or conclusion of the CBA shall be imposed on any
individual member of the contracting union. Such fees may be charged only
ss
against the UNION FUNDS in an amount to be agreed upon by the parties. Any
e
contract, agreement or arrangement of any sort to the contrary is deemed null and
i
fe
void. Clearly, what is prohibited is the payment of attorney’s fees when it is effected
ev
through forced contributions from the workers from their own funds as distinguished
from the union funds.
o
R
• Check-off of union dues and assessments.
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“Check-off” means a method of deducting from the employee’s pay at prescribed

Pr
periods, any amount due for fees, fines or assessments. It is a process or device
r
Ba
whereby the employer, on agreement with the union recognized as the proper Ba
bargaining representative, or on prior authorization from its employees, deducts
s
union dues and assessments from the latter’s wages and remits them directly to the
union.
es
• Individual written authorization, when required.

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The law strictly prohibits the check-off from any amount due an employee who is a
bl
member of the union, of any union dues, special assessment, attorney’s fees,
negotiation fees or any other extraordinary fees other than for mandatory activities
li
under the Labor Code, without the individual written authorization duly signed by
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the employee. Such authorization must specifically state the amount, purpose and r
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beneficiary of the deduction. The purpose of the individual written authorization is

to protect the employees from unwarranted practices that diminish their
O
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compensation without their knowledge or consent.

• Individual written authorization, when not required.
et
es
In the following cases, individual written authorization is not required:

h
a. Assessment from non-members of the bargaining agent of “agency fees”

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which should be equivalent to the dues and other fees paid by members of
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the recognized bargaining agent, if such non-members accept the benefits

under the CBA.
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b. Deductions for fees for mandatory activities such as labor relations seminars
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and labor education activities.

In
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c. Deductions for withholding tax mandated under the National Internal Revenue
Code.
e. Deductions for withholding of wages because of employee’s debt to the
es
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employer which is already due.

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f. Deductions made pursuant to a judgment against the worker under

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circumstances where the wages may be the subject of attachment or

execution but only for debts incurred for food, clothing, shelter and medical
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attendance.
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g. Deductions from wages ordered by the court.

h. Deductions authorized by law such as for premiums for PhilHealth, SSS, Pag-
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IBIG, employees’ compensation and the like.

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AGENCY FEES
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• A non-bargaining union member has the right to accept or not the benefits of
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the cba.
There is no law that compels a non-bargaining union member to accept the
benefits provided in the CBA. He has the freedom to choose between accepting
ev
and rejecting the CBA itself by not accepting any of the benefits flowing
therefrom. Consequently, if a non-bargaining union member does not accept or
R
refuses to avail of the CBA-based benefits, he is not under any obligation to pay
the “agency fees” since, in effect, he does not give recognition to the status of
the bargaining union as his agent.
al
• Limitation on the amount of agency fee.
The bargaining union cannot capriciously fix the amount of agency fees it may
n
collect from its non-members. Article 248(e) of the Labor Code expressly sets forth
the limitation in fixing the amount of the agency fees, thus:
io
(1) It should be reasonable in amount; and

(2) It should be equivalent to the dues and other fees paid by members of
the recognized collective bargaining agent.
ss
e
Thus, any agency fee collected in excess of this limitation is a nullity.
i
fe
ev
• Non-members of the SEBA need not become members thereof
The employees who are not members of the certified bargaining agent which
o
successfully concluded the CBA are not required to become members of the latter.
R
Their acceptance of the benefits flowing from the CBA and their act of paying the
r
Pr
agency fees do not make them members thereof.
r
Ba
• Check-off of agency fees

“Check-off” of agency fees is a process or device whereby the employer, upon
Ba
agreement with the bargaining union, deducts agency fees from the wages of non-
s
bargaining union members who avail of the benefits from the CBA and remits them
es
directly to the bargaining union.

e
• Accrual of right of bargaining union to demand check-off of agency fees.

bl
The right of the bargaining union to demand check-off of agency fees accrues
from the moment the non-bargaining union member accepts and receives the
li
benefits from the CBA. This is the operative fact that would trigger such liability.
o
• No individual written authorization by non-bargaining union members required

r
n
To effect the check-off of agency fees, no individual written authorization from the
Ba
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non-bargaining union members who accept the benefits resulting from the CBA is
O
an
necessary.
• Employer’s duty to check-off agency fees
et
It is the duty of the employer to deduct or “check-off” the sum equivalent to the
es
amount of agency fees from the non-bargaining union members' wages for direct
h
remittance to the bargaining union.”

rn
bl
C
• Minority union cannot demand from the employer to grant it the right to check-
off of union dues and assessments from their members.
The obligation on the part of the employer to undertake the duty to check-off union
o
te
dues and special assessments holds and applies only to the bargaining agent and
not to any other union/s (called “Minority Union/s”).
R
In
an
b. Collective Bargaining
• Essential requisites of collective bargaining
Prior to any collective bargaining negotiations between the employer and the
es
h
bargaining union, the following requisites must first be satisfied:

1. Employer-employee relationship must exist between the employer and the
C
bl
members of the bargaining unit being represented by the bargaining

agent;
2. The bargaining agent must have the majority support of the members of the
o
bargaining unit established through the modes sanctioned by law; and

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3. A lawful demand to bargain is made in accordance with law.

an
91
n
,I
Legal Practitioner
• Some principles on CBA.
w
o CBA is the law between the parties during its lifetime and thus must be
complied with in good faith.
ie
o Being the law between the parties, any violation thereof can be subject of
redress in court.
ev
o CBA is not an ordinary contract as it is impressed with public interest.
o Automatic Incorporation Clause – law is presumed part of the CBA.
o The benefits derived from the CBA and the law are separate and distinct from
R
each other.
o Workers are allowed to negotiate wage increases separately and distinctly
al
from legislated wage increases. The parties may validly agree in the CBA to
reduce wages and benefits of employees provided such reduction does not
go below the minimum standards.
n
o Ratification of the CBA by majority of all the workers in the bargaining unit
io
makes the same binding on all employees therein.

o Employees entitled to CBA benefits. The following are entitled to the benefits
of the CBA:
ss
(1) Members of the bargaining union;
e
(2) Non-members of the bargaining union but are members of the
i
fe
bargaining unit;
ev
(3) Members of the minority union/s who paid agency fees to the bargaining
union; and
o
R
(4) Employees hired after the expiration of the CBA.
r
o Pendency of a petition for cancellation of union registration is not a

Pr
prejudicial question before CBA negotiation may proceed.
r
Ba
o CBA should be construed liberally. If the terms of a CBA are clear and there
is no doubt as to the intention of the contracting parties, the literal meaning
Ba
s
of its stipulation shall prevail.

es
(b.1.) Economic (or non-political) Terms and Conditions

e
(a) Wage Increases; (b) Allowances; (c) Premiums for Work on Rest Days, Holidays,
bl
etc.; (d) Meal, Rice and other Subsidies; (e) Leave Benefits; (f) Union Leave; (g)
Uniforms; (h) Union Office; (i) Promotions; (j) Bonuses; (k) Insurance; (l)
li
o
Hospitalization; (m) Retirement; (n) Excursion; and (o) Others which have monetary
values. r
n
Ba
R
(b.2.) Non-Economic (or political) Terms and Conditions

O
an
(a) Coverage or Scope of the Agreement; (b) Exclusions; (c) Rights and
et
Responsibilities of Parties; (d) Union Security Arrangement; (e) Job Security (Security
es
of Tenure); (f) Management Rights and Prerogatives; (g) Company Rules and
h
Regulations; (h) Discipline of Employees; (i) Union Dues and Special Assessments; (j)
rn
bl
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Agency Fee; (k) Check-Off; (l) Grievance Machinery; (m) Voluntary Arbitration; (n)
Labor-Management Council (LMC); (o) No-Strike, No-Lockout; (p) Waiver and
Completeness of Agreement; and (q) Duration and Effectivity of Agreement.
o
te
(b.3.) Duty to Bargain Collectively

R
• Meaning of duty to bargain collectively.

In
The “duty to bargain collectively” means the performance of a mutual obligation

an
to meet and convene promptly and expeditiously in good faith for the purpose of
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
es
h
questions arising under such agreement and executing a contract incorporating

such agreements if requested by either party but such duty does not compel any
C
bl
party to agree to a proposal or to make any concession.
The duty does not compel any party to agree blindly to a proposal nor to make
o
concession. While the law imposes on both the employer and the bargaining union
R
the mutual duty to bargain collectively, the employer is not under any legal
obligation to initiate collective bargaining negotiations.
an
92
n
,I
Legal Practitioner
• Two (2) situations contemplated
w
The duty to bargain collectively involves two (2) situations, namely:
ie
1. Duty to bargain collectively in the absence of a CBA under Article 251 of the
Labor Code.
ev
2. Duty to bargain collectively when there is an existing CBA under Article 253 of
the Labor Code.
R
Duty to bargain collectively when there is absence of a CBA
• How duty should be discharged when there is no cba yet.
al
The duty to bargain collectively when there has yet been no CBA in the bargaining
unit where the bargaining agent seeks to operate should be complied with in the
following order:
n
First, in accordance with any agreement or voluntary arrangement between
io
the employer and the bargaining agent providing for a more expeditious
manner of collective bargaining; and
ss
Secondly, in its absence, in accordance with the provisions of the Labor
e
Code, referring to Article 250 thereof which lays down the procedure in
i
fe
collective bargaining.
ev
Duty to bargain collectively when there is a CBA
o
R
• Concept
When there is a CBA, the duty to bargain collectively shall mean that neither party
r
Pr
shall terminate nor modify such agreement during its lifetime. However, either
r
Ba
party can serve a written notice to terminate or modify the agreement at least Ba
sixty (60) days prior to its expiration date. It shall be the duty of both parties to
s
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
es
agreement is reached by the parties.

e
• Freedom period.
bl
The last sixty (60) days of the 5-year lifetime of a CBA immediately prior to its
expiration is called the “freedom period.” It is denominated as such because it is
li
the only time when the law allows the parties to freely serve a notice to terminate,
o
alter or modify the existing CBA. It is also the time when the majority status of the r
n
Ba
R
bargaining agent may be challenged by another union by filing the appropriate

petition for certification election.
O
an
• Automatic renewal clause: Automatic renewal clause deemed incorporated in

all CBAs.
et
es
Pending the renewal of the CBA, the parties are bound to keep the status quo and
h
to treat the terms and conditions embodied therein still in full force and effect during
rn
the 60-day freedom period and/or until a new agreement is negotiated and
bl
C
ultimately concluded and reached by the parties. This principle is otherwise known
as the “automatic renewal clause” which is mandated by law and therefore
o
deemed incorporated in all CBAs.

te
R
For its part, the employer cannot discontinue the grant of the benefits embodied in
In
the CBA which just expired as it is duty-bound to maintain the status quo by
an
continuing to give the same benefits until a renewal thereof is reached by the
parties. On the part of the union, it has to observe and continue to abide by its
undertakings and commitments under the expired CBA until the same is renewed.
es
h
• Kiok Loy doctrine.

C
bl
This doctrine is based on the ruling In Kiok Loy v. NLRC, where the petitioner, Sweden
Ice Cream Plant, refused to submit any counter-proposal to the CBA proposed by
o
its employees’ certified bargaining agent. The High Court ruled that the employer
R
had thereby lost its right to bargain the terms and conditions of the CBA. Thus, the
CBA proposed by the union was imposed lock, stock and barrel on the erring
an
company.
93
n
,I
Legal Practitioner
w
The Kiok Loy case epitomizes the classic case of negotiating a CBA in bad faith
consisting of the employer’s refusal to bargain with the collective bargaining agent
ie
by ignoring all notices for negotiations and requests for counter-proposals. Such
refusal to send a counter-proposal to the union and to bargain on the economic
ev
terms of the CBA constitutes an unfair labor practice under Article 248(g) of the
Labor Code.
• Other cases after Kiok Loy.
R
o Divine Word University of Tacloban v. Secretary of Labor and Employment,
Sept. 11, 1992.
al
o General Milling Corporation v. CA, Feb. 11, 2004.
(b.4.) Mandatory Provisions in the Collective Bargaining Agreement (CBA)

n
io
1. Grievance Procedure;
2. Voluntary Arbitration;
3. No Strike-No Lockout Clause; and
ss
e
4. Labor-Management Council (LMC).
i
fe
If these provisions are not reflected in the CBA, its registration will be denied by the
ev
BLR.
o
5. Unfair Labor Practices
R
a. Nature and Aspect
r
Pr
• When an act constitutes ULP.
r
Ba
At the outset, it must be clarified that not all unfair acts constitute ULPs. While an
act or decision of an employer or a union may be unfair, certainly not every unfair
Ba
act or decision thereof may constitute ULP as defined and enumerated under the
s
law.
es
The act complained of as ULP must have a proximate and causal connection with
bl
any of the following 3 rights:

1. Exercise of the right to self-organization;
li
2. Exercise of the right to collective bargaining; or

o
3. Compliance with CBA.

r
n
Ba
R
Sans this connection, the unfair acts do not fall within the technical signification of
the term “unfair labor practice.”
O
an
• The only ULP which may or may not be related to the exercise of the right to self-
et
organization and collective bargaining.

es
The only ULP which is the exception as it may or may not relate to the exercise of
h
the right to self-organization and collective bargaining is the act described under
rn
bl
Article 248 [f], i.e., to dismiss, discharge or otherwise prejudice or discriminate

C
against an employee for having given or being about to give testimony under the
Labor Code.
o
te
• Labor code provisions on ULP.

R
Under the Labor Code, there are only five (5) provisions related to ULP, to wit:
In
an
1. Article 258 [247] which describes the concept of ULPs and prescribes the
procedure for their prosecution;
es
h
2. Article 259 [248] which enumerates the ULPs that may be committed by
employers;
C
bl
3. Article 260 [249] which enumerates the ULPs that may be committed by labor
organizations;
o
4. Article 274 [261] which considers violations of the CBA as no longer ULPs unless
the same are gross in character which means flagrant and/or malicious refusal
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to comply with the economic provisions thereof.

an
94
n
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Legal Practitioner
5. Article 278(c) [263(c)] which refers to union-busting, a form of ULP, involving
w
the dismissal from employment of union officers duly elected in accordance
with the union constitution and by-laws, where the existence of the union is
ie
threatened thereby.
• Parties who/which may commit ULP.
ev
A ULP may be committed by an employer or by a labor organization. Article 259
[248] describes the ULPs that may be committed by an employer; while Article 260
R
[249] enumerates those which may be committed by a labor organization.
On the part of the employer, only the officers and agents of corporations,
al
associations or partnerships who have actually participated in or authorized or
ratified ULPs are criminally liable.
n
On the part of the union, only the officers, members of governing boards,
io
representatives or agents or members of labor associations or organizations who

have actually participated in or authorized or ratified the ULPs are criminally liable.
• Elements of ULP.
ss
e
1. There should exist an employer-employee relationship between the
i
offended party and the offender; and
fe
ev
2. The act complained of must be expressly mentioned and defined in the
Labor Code as an unfair labor practice.
o
R
Absent one of the elements aforementioned will not make the act an unfair labor
r
practice.
Pr
r
Ba
• Aspects of ULP.
Under Article 258 [247], a ULP has two (2) aspects, namely:
Ba
s
1. Civil aspect; and

es
2. Criminal aspect.
e
The civil aspect of an unfair labor practice includes claims for actual, moral and
bl
exemplary damages, attorney’s fees and other affirmative reliefs. Generally, these
civil claims should be asserted in the labor case before the Labor Arbiters who have
li
original and exclusive jurisdiction over unfair labor practices. The criminal aspect,
o
on the other hand, can only be asserted before the regular court. r
n
Ba
R
b. By Employers
O
an
(b.1.) Interference with, restraint or coercion of employees in the exercise of

their right to self-organization
et
es
• Test of interference, restraint or coercion

h
The terms “interfere,” “restrain” and “coerce” are very broad that any act of
rn
bl
management that may reasonably tend to have an influence or effect on the

C
exercise by the employees of their right to self-organize may fall within their
meaning and coverage. According to the Supreme Court in Insular Life Assurance
o
te
Co., Ltd., Employees Association-NATU v. Insular Life Assurance Co., Ltd., the test
of whether an employer has interfered with or restrained or coerced employees
R
within the meaning of the law is whether the employer has engaged in conduct
In
an
which may reasonably tend to interfere with the free exercise of the employees’
rights. It is not necessary that there be direct evidence that any employee was in
fact intimidated or coerced by the statements or threats of the employer if there is
es
h
a reasonable inference that the anti-union conduct of the employer does have an
adverse effect on the exercise of the right to self-organization and collective
C
bargaining.
bl
• Totality of conduct doctrine

o
In ascertaining whether the act of the employer constitutes interference with,

restraint or coercion of the employees’ exercise of their right to self-organization
R
and collective bargaining, the “totality of conduct doctrine” may be applied.

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95
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Legal Practitioner
The totality of conduct doctrine means that expressions of opinion by an employer,
w
though innocent in themselves, may be held to constitute an unfair labor practice
because of the circumstances under which they were uttered, the history of the
ie
particular employer’s labor relations or anti-union bias or because of their
connection with an established collateral plan of coercion or interference. An
ev
expression which may be permissibly uttered by one employer, might, in the mouth
of a more hostile employer, be deemed improper and consequently actionable as
an unfair labor practice. The past conduct of the employer and like considerations,
R
coupled with an intimate connection between the employer’s action and the
union affiliation or activities of the particular employee or employees taken as a
al
whole, may raise a suspicion as to the motivation for the employer’s conduct. The
failure of the employer to ascribe a valid reason therefor may justify an inference
that his unexplained conduct in respect of the particular employee or employees
n
was inspired by the latter’s union membership and activities.
io
In General Milling, the Supreme Court considered the act of the employer in
presenting the letters from February to June 1993, by 13 union members signifying
ss
their resignation from the union clearly indicative of the employer’s pressure on its
e
employees. The records show that the employer presented these letters to prove
i
fe
that the union no longer enjoyed the support of the workers. The fact that the
ev
resignations of the union members occurred during the pendency of the case
before the Labor Arbiter shows the employer’s desperate attempt to cast doubt on
o
R
the legitimate status of the union. The ill-timed letters of resignation from the union
r
members indicate that the employer had interfered with the right of its employees
Pr
to self-organization. Because of such act, the employer was declared guilty of ULP.
r
Ba
• Interference in the employee’s right to self-organization.

Ba
s
o Interference is always ULP.

es
The judicial dictum is that any act of interference by the employer in the exercise
by employees of their right to self-organization constitutes an unfair labor practice.
e
This is the very core of ULP.

bl
In Hacienda Fatima v. National Federation of Sugarcane Workers – Food and

li
o
General Trade, the Supreme Court upheld the factual findings of the NLRC and the
Court of Appeals that from the employer’s refusal to bargain to its acts of economic r
n
Ba
R
inducements resulting in the promotion of those who withdrew from the union, the
use of armed guards to prevent the organizers to come in, and the dismissal of union
O
an
officials and members, one cannot but conclude that the employer did not want
a union in its hacienda - a clear interference in the right of the workers to self-
et
es
organization. Hence, the employer was held guilty of unfair labor practice.
h
rn
It was likewise held in Insular Life Assurance Co., Ltd., Employees Association-NATU v.
bl
C
Insular Life Assurance Co., Ltd., that it is an act of interference for the employer to
send individual letters to all employees notifying them to return to work at a time
o
te
specified therein, otherwise new employees would be engaged to perform their

jobs. Individual solicitation of the employees or visiting their homes, with the
R
employer or his representative urging the employees to cease their union activities
In
or cease striking, constitutes ULP. All the above-detailed activities are ULPs because
an
they tend to undermine the concerted activity of the employees, an activity to

which they are entitled free from the employer's molestation.
es
h
o Formation of a union is never a valid ground to dismiss.

o It is ULP to dismiss a union officer or an employee for his union activities.
C
bl
(b.2.) Yellow Dog Contract

o
It is one which exacts from workers as a condition of employment that they shall not
R
join or belong to a labor organization, or attempt to organize one during their period
of employment or that they shall withdraw therefrom in case they are already
an
members of a labor organization.

96
n
,I
Legal Practitioner
• Common Stipulations in Yellow Dog Contract.
w
A typical yellow dog contract embodies the following stipulations:
ie
(1) A representation by the employee that he is not a member of a labor
organization;
ev
(2) A promise by the employee that he will not join a union; and
(3) A promise by the employee that upon joining a labor organization, he will
R
quit his employment.
The act of the employer in imposing such a condition constitutes unfair labor
al
practice under Article 248(b) of the Labor Code. Such stipulation in the contract is
null and void.
n
• Origin of the term “Yellow Dog.”
io
The term “yellow dog” traces its roots to certain commentaries made by the labor
press in the United States sometime in 1921. An example is the following editor’s
comment of the United Mine Workers' Journal: “This agreement has been well
ss
named. It is yellow dog for sure. It reduces to the level of a yellow dog any man that
e
signs it, for he signs away every right he possesses under the Constitution and laws
i
fe
of the land and makes himself the truckling, helpless slave of the employer.” Simply
ev
put, it is so-called “yellow dog” because the employees were deemed to have to
cower before their "masters" to get a job.
o
R
(b.3.) Contracting out of services and functions
r
Pr
• General rule.
r
Ba
As a general rule, the act of an employer in having work or certain services or Ba

functions being performed by union members contracted out is not per se an unfair
s
labor practice. This is so because contracting-out of a job, work or service is clearly

an exercise by the employer of its business judgment and its inherent management
es
rights and prerogatives. Hiring of workers is within the employer’s inherent freedom
e
to regulate its business and is a valid exercise of its management prerogative

bl
subject only to special laws and agreements on the matter and the fair standards
of justice. The employer cannot be denied the faculty of promoting efficiency and
li
attaining economy by a study of what units are essential for its operation. It has the
o
ultimate right to determine whether services should be performed by its personnel r

n
Ba
R
or contracted to outside agencies.

O
an
• When contracting-out becomes ULP.

It is only when the contracting out of a job, work or service being performed by
et
es
union members will interfere with, restrain or coerce employees in the exercise of
h
their right to self-organization that it shall constitute an unfair labor practice. Thus, it
rn
is not unfair labor practice to contract out work for reasons of business decline,
bl
C
inadequacy of facilities and equipment, reduction of cost and similar reasonable

grounds.
o
te
(b.4.) Company Union

R
• Company initiated, dominated or assisted union.

In
Paragraph [d] of Article 259 [248] considers it an unfair labor practice to initiate,
an
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. Such union is called “company union” as its formation,
es
h
function or administration has been assisted by any act defined as unfair labor
practice under the Labor Code.
C
bl
(b.5.) Discrimination
• Coverage of prohibition.
o
What is prohibited as unfair labor practice under the law is to discriminate in regard
R
to wages, hours of work, and other terms and conditions of employment in order to
encourage or discourage membership in any labor organization.
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97
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,I
Legal Practitioner
• Materiality of purpose of alleged discriminatory act.
w
In Manila Pencil Co., Inc. v. CIR, it was ruled that even assuming that business
conditions justify the dismissal of employees, it is a ULP of employer to dismiss
ie
permanently only union members and not non-unionists.
ev
In Manila Railroad Co. v. Kapisanan ng mga Manggagawa sa Manila Railroad Co.,
the non-regularization of long-time employees because of their affiliation with the
union while new employees were immediately regularized was declared an act of
R
discrimination.
(b.6.) Filing of charges or giving of testimony
• Concept.
al
Under paragraph [f] of Article 259 [248] of the Labor Code, it is an unfair labor
n
practice for an employer to dismiss, discharge or otherwise prejudice or
io
discriminate against an employee for having given or being about to give

testimony under the Labor Code.
ss
• The only ULP not required to be related to employee’s exercise of the right to
e
self-organization and collective bargaining.
i
fe
It must be underscored that Article 259(f) [248 (f)] is the only unfair labor practice
ev
that need not be related to the exercise by the employees of their right to self-
organization and collective bargaining.
o
R
r
In Itogon-Suyoc Mines, Inc. v. Baldo, it was declared that an unfair labor practice
Pr
was committed by the employer when it dismissed the worker who had testified in
r
Ba
the hearing of a certification election case despite its prior request for the employee
not to testify in the said proceeding accompanied with a promise of being
Ba
s
reinstated if he followed said request.

es
(b.7.) CBA-related ULPs

e
• Three (3) CBA-related ULPs.

bl
Article 259 [248] enunciates three (3) CBA-related unfair labor practices, to wit:
li
1. To violate the duty to bargain collectively as prescribed in the Labor Code.

o
r
n
2. To pay negotiation or attorney’s fees to the union or its officers or agents as

Ba
R
part of the settlement of any issue in collective bargaining or any other

O
an
dispute.
Article 259 (h) [248(h)] of the Labor Code considers as an unfair labor
et
-
es
practice the act of the employer in paying negotiation fees or attorney’s

h
fees to the union or its officers or agents as part of the settlement of any
rn
issue in collective bargaining or any other dispute.

bl
C
3. To violate a collective bargaining agreement.

o
Article 259 (i) [248(i)] of the Labor Code should be read in relation to Article
te
-
261 thereof. Under Article 261, as amended, violations of a CBA, except
R
those which are gross in character, shall no longer be treated as an unfair

In
labor practice and shall be resolved as grievances under the CBA. Gross
an
violations of CBA shall mean flagrant and/or malicious refusal to comply

with the economic provisions of such agreement.
The act of the employer in refusing to implement the negotiated wage
es
-
h
increase stipulated in the CBA, which increase is intended to be distinct

and separate from any other benefits or privileges that may be
C
bl
forthcoming to the employees, is an unfair labor practice.

- Refusal for a considerable number of years to give salary adjustments
according to the improved salary scales in the CBA is an unfair labor
o
practice.
R
an
98
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,I
Legal Practitioner
c. By Organizers
w
(c.1.) Restraint and coercion of employees in the exercise of their right to self-
ie
organization
• Union may interfere with but not restrain or coerce employees in the exercise of
ev
their right to self-organize
o Under Article 260(a) [249 (a)], it is ULP for a labor organization, its officers,
agents or representatives to restrain or coerce employees in the exercise of
R
their right to self-organization. Compared to similar provision of Article 248(a)
of the Labor Code, notably lacking is the use of the word “interfere” in the
al
exercise of the employees’ right to self-organize. The significance in the
omission of this term lies in the grant of unrestricted license to the labor
organization, its officers, agents or representatives to interfere with the
n
exercise by the employees of their right to self-organization. Such interference
io
is not unlawful since without it, no labor organization can be formed as the
act of recruiting and convincing the employees is definitely an act of
interference.
ss
e
(c.2.) Discrimination
i
fe
• Under Article 260(b) [249 (b)], it is ULP for a labor organization, its officers,
ev
agents or representatives:
a. To cause or attempt to cause an employer to discriminate against an
o
R
employee, including discrimination against an employee with respect to
r
whom membership in such organization has been denied.

Pr
b. To terminate an employee’s union membership on any ground other than
r
Ba
the usual terms and conditions under which membership or continuation of Ba

membership is made available to other members.
s
(c.3.) Duty of Union to Bargain Collectively

es
• Under Article 260(c) [249 (c)], it is ULP for a duly certified sole and exclusive
e
bargaining union, its officers, agents or representatives to refuse or violate the

bl
duty to bargain collectively with the employer. This is the counterpart provision
of Article 259(g) [248 (g)] respecting the violation by the employer of its duty to
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bargain collectively.
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• The obvious purpose of the law is to ensure that the union will negotiate with r
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management in good faith and for the purpose of concluding a mutually

beneficial agreement regarding the terms and conditions of their employment
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relationship.
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(c.4.) Featherbedding Doctrine

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• Article 260(d) [249 (d)] is the “featherbedding” provision in the Labor Code.
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Patterned after a similar provision in the Taft-Hartley Act, “featherbedding” or

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“make-work” refers to the practice, caused and induced by a union, of hiring

more workers than are needed to perform a given work, job or task or to adopt
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work procedures which is evidently senseless, wasteful, inefficient and without

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legitimate justifications since it is meant purely for the purpose of employing

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additional workers than are necessary.

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• This is resorted to by the union as a response to the laying-off of workers

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occasioned by their obsolescence because of the introduction of machines,

robots or new and innovative technological changes and improvements in the
workplace or as required by minimum health and safety standards, among other
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reasons. Its purpose is to unduly secure the jobs of the workers.

• Because of these lay-offs, the unions are constrained to resort to some
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featherbedding practices. Accordingly, they usually request that the

technological changes be introduced gradually, or not at all, or that a minimum
number of personnel be retained despite such changes. They resort to some
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ways and methods of retaining workers even though there may be little work left
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for them to do and perform. It therefore unnecessarily maintains or increases the

number of employees used or the amount of time consumed to work on a
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specific job, work or undertaking. By so increasing the demand for workers,
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featherbedding obviously keeps wages higher.
• REQUISITES
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The requisites for featherbedding are as follows:
1. The labor organization, its officers, agents or representatives have
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caused or attempted to cause an employer either:
a. to pay or agree to pay any money, including the demand for fee for
union negotiations; or
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b. to deliver or agree to deliver any things of value;
2. Such demand for payment of money or delivery of things of value is in
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the nature of an exaction; and
3. The services contemplated in exchange for the exaction are not
actually performed or will not be performed.
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(c.6.) Demand or acceptance of negotiation fees or attorney’s fees
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• Under Article 260(e) [249 (e)], it is ULP for a labor organization, its officers, agents
or representatives to ask for or accept negotiation fees or attorney’s fees from
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employers as part of the settlement of any issue in collective bargaining or any
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other dispute.
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fe
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(c.7.) Violation of the CBA
• Under Article 260(f) [249 (f)], it is ULP for a labor organization, its officers, agents
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or representatives to violate a CBA.
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• This is the counterpart provision of Article 259(i) [248 (i)] regarding the employer’s
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act of violating a CBA. But it must be noted that under Article 261 of the Labor
r
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Code, violation of the CBA is generally considered merely a grievable issue. It Ba

becomes an unfair labor practice only if the violation is gross in character which
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means that there is flagrant and/or malicious refusal to comply with the
economic (as distinguished from non-economic) stipulations in the CBA. This
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principle applies not only to the employer but to the labor organization as well.
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CRIMINAL LIABILITY FOR ULPs OF LABOR ORGANIZATION

• Persons liable.
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• Article 260 [249] is explicit in its provision on who should be held liable for
o
ULPs committed by labor organizations. It states that only the officers, r

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members of governing boards, representatives or agents or members of

labor associations or organizations who have actually participated in,
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authorized or ratified unfair labor practices shall be held criminally liable.

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6. Peaceful Concerted Activities

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a. Strikes (Valid v. Illegal) (committed by employees)

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• “Strike” means any temporary stoppage of work by the concerted action of the
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employees as a result of an industrial or labor dispute.

a. Grounds for strike
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• The law recognizes only 2 grounds in support of a valid strike, viz.:

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1. Collective bargaining deadlock (Economic Strike); and/or

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2. Unfair labor practice (Political Strike).

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A strike not based on any of these two grounds is illegal.

• Violation of CBA, except when gross, is not an unfair labor practice, hence, may
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not be cited as ground for a valid strike. Ordinary violation of a CBA is no longer
treated as an unfair labor practice but as a mere grievance which should be
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processed through the grievance machinery and voluntary arbitration.

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• Inter-union or intra-union dispute is not a valid ground.

• Violation of labor standards is not a valid ground.
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• Wage distortion is not a valid ground.

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(a.1.) Mandatory procedural requirements
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• A strike, in order to be valid and legal, must conform to the following procedural
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requisites:
1st requisite - It must be based on a valid and factual ground;
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2nd requisite - A notice of strike must be filed with the NCMB-DOLE;
3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four
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(24) hours prior to the taking of the strike vote by secret
balloting, informing said office of the decision to conduct a
strike vote, and the date, place, and time thereof;
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4 requisite - A strike vote must be taken where a majority of the members of
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the union obtained by secret ballot in a meeting called for the

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purpose, must approve it;
5 requisite - A strike vote report should be submitted to the NCMB-DOLE at
th
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least seven (7) days before the intended date of the strike;
6 requisite - Except in cases of union-busting, the cooling-off period of 15
th
days, in case of unfair labor practices of the employer, or 30

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days, in case of collective bargaining deadlock, should be fully
i
observed; and
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7 requisite - The 7-day waiting period/strike ban reckoned after the
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submission of the strike vote report to the NCMB-DOLE should

o
also be fully observed in all cases.
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All the foregoing requisites, although procedural in nature, are mandatory and
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failure of the union to comply with any of them would render the strike illegal.
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(a.2.) Legal strike vs. illegal strike

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• Valid/Legal strike vs. Illegal strike

o Legal strike - one called for a valid purpose and conducted through means
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allowed by law.
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o Illegal strike - one staged for a purpose not recognized by law or, if for a valid
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purpose, it is conducted through means not sanctioned by law.

• When is a strike considered illegal?
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A strike is illegal if it is declared and staged:

o
1. Without complying with the procedural but mandatory requisites (See 7 r

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requisites above).
2. For unlawful purpose such as to compel the dismissal of an employee or to
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force recognition of the union or for trivial and puerile purpose or to

circumvent contracts and judicial orders.
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3. Based on non-strikeable or invalid grounds such as:

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a. Inter-union or intra-union disputes.

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b. Simple violation of CBA in contrast to gross violation thereof which is

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deemed ULP.
c. Violation of labor standards.
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d. Legislated wage orders (wage distortion).

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4. Without first having bargained collectively.

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5. In violation of the “no strike, no lockout” clause in the CBA.

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6. Without submitting the issues to the grievance machinery or voluntary

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arbitration or failing to exhaust the steps provided therein.

7. While conciliation and mediation proceeding is on-going at the NCMB.
8. Based on issues already brought to voluntary or compulsory arbitration.
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9. During the pendency of a case involving the same ground/s cited in the
notice of strike.
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10. In defiance of an assumption or certification or return-to-work order.

11. In violation of a temporary restraining order or an injunction order.
12. After the conversion of the notice of strike into a preventive mediation case.
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13. Against the prohibition by law.

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14. By a minority union.

15. By an illegitimate union.
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16. By dismissed employees.

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17. In violation of the company code of conduct which prohibits “inciting or
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participating in riots, disorders, alleged strikes or concerted actions
detrimental to [Toyota’s] interest,” The penalty for which is dismissal.
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18. As protest rallies in front of government offices such as in the following cases:
Toyota Motor Phils. Corp. Workers Association [TMPCWA] v. NLRC, where the
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Supreme Court ruled that the protest rallies staged by the employees from
February 21 to 23, 2001 in front of the offices of the Bureau of Labor Relations
(BLR) and the DOLE Secretary constitute illegal strike and not legitimate
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exercise of their right to peaceably assemble and petition the government
for redress of grievances. It was illegal for having been undertaken without
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satisfying the mandatory pre-requisites for a valid strike under Article 263 of
the Labor Code.
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The ruling in Toyota was cited in Solidbank Corporation v. Gamier, as basis in
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declaring the protest action of the employees of petitioner Solidbank which

was staged in front of the Office of the DOLE Secretary in Intramuros, Manila,
as constitutive of illegal strike since it paralyzed the operations of the bank.
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The protest action in this case was conducted because of the CBA deadlock.
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19. As welga ng bayan which is in the nature of a general strike as well as an
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extended sympathy strike.
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(a.3.) Prohibited acts during strike
o
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• Participation in the commission of illegal acts during a strike
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o Legality or illegality of strike, immaterial.

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▪ As far as liability for commission of illegal acts during the strike is concerned,
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the issue of legality or illegality of the strike is irrelevant. As long as the union
officer or member commits an illegal act in the course of the strike, be it legal
Ba
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or illegal, his employment can be validly terminated.

o Meaning of “illegal acts.”
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▪ The term “illegal acts” under Article 264(a) may encompass a number of
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acts that violate existing labor or criminal laws, such as the following:
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• (1) Violation of Article 264(e) of the Labor Code which provides that “[n]o
person engaged in picketing shall commit any act of violence, coercion
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or intimidation or obstruct the free ingress to or egress from the employer’s

premises for lawful purposes, or obstruct public thoroughfares.” r
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• (2) Commission of crimes and other unlawful acts in carrying out the
strike.
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• (3) Violation of any order, prohibition, or injunction issued by the DOLE

Secretary or NLRC in connection with the assumption of jurisdiction or
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certification order under Article 263(g) of the Labor Code.

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This enumeration is not exclusive as jurisprudence abounds where the term

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“illegal acts” has been interpreted and construed to cover other breaches
of existing laws.
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o Liability for illegal acts should be determined on an individual basis. For this
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purpose, the individual identity of the union members who participated in the
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commission of illegal acts may be proved thru affidavits and photographs.

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Simply referring to them as “strikers,” or “complainants in this case” is not

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enough to justify their dismissal.

o Some principles on commission of illegal acts in the course of the strike.
▪ Only members who are identified as having participated in the
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commission of illegal acts are liable. Those who did not participate should
not be blamed therefor
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▪ To effectively hold ordinary union members liable, those who participated

in the commission of illegal acts must not only be identified but the specific
illegal acts they each committed should be described with particularity.
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▪ If violence was committed by both employer and employees, the same

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cannot be cited as a ground to declare the strike illegal.

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(a.4.) Liability of union officers and members for illegal strike and illegal acts
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during strike
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• Liability for declaration of illegality of strike and liability of ordinary workers for
commission of illegal acts in the course of strike
o Participation in lawful strike.
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▪ An employee who participates in a lawful strike is not deemed to have
abandoned his employment. Such participation should not constitute
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sufficient ground for the termination of his employment even if a
replacement has already been hired by the employer during such lawful
strike.
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o Participation in illegal strike.
▪ Distinction in the liability between union officers and ordinary union
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members.
a. Union officers.
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The mere declaration of illegality of the strike will result in the termination of all
union officers who knowingly participated in the illegal strike. Unlike ordinary
members, it is not required, for purposes of termination, that the officers should
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commit an illegal act during the strike.
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However, absent any showing that the employees are union officers, they
cannot be dismissed based solely on the illegality of the strike.
o
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To illustrate how the “knowing participation” of union officers may be
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ascertained and established, the following factors were taken into account in
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Ba
another 2011 case, Abaria v. NLRC, which led to the declaration that they
knowingly participated in the illegal strike:
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(1) Their persistence in holding picketing activities despite the declaration by
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the NCMB that their union was not duly registered as a legitimate labor
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organization and notwithstanding the letter from the federation’s legal

e
counsel informing them that their acts constituted disloyalty to the

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national federation; and

(2) Their filing of the notice of strike and conducting a strike vote despite the
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fact that their union has no legal personality to negotiate with their
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employer for collective bargaining purposes.

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Ordinary union members.

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The mere finding or declaration of illegality of a strike will not result in

termination of ordinary union members. For an ordinary union member to suffer
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termination, it must be shown by clear evidence that he has committed illegal

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acts during the strike.

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o Reason for the distinction.

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The reason for this distinction is that the union officers have the duty to guide their
members to respect the law. If instead of doing so, the officers urged the members
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to violate the law and defy the duly constituted authorities, their dismissal from the
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service is a just penalty or sanction for their unlawful act. Their responsibility as main
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players in an illegal strike is greater than that of the ordinary union members and,
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therefore, limiting the penalty of dismissal only to the former for their participation
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in an illegal strike is in order.
b. Picketing
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• “Picketing” is the act of workers in peacefully marching to and from before an

establishment involved in a labor dispute generally accompanied by the
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carrying and display of signs, placards and banners intended to inform the
public about the dispute.
• Requisites for lawful picketing
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o The requisites for a valid strike are not applicable to picketing.

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o The most singular requirement to make picketing valid and legal is that it
should be peacefully conducted.
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o Based on the foregoing provision, the requisites may be summed up as
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follows:
▪ 1. The picket should be peacefully carried out;
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▪ 2. There should be no act of violence, coercion or intimidation attendant
thereto;
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▪ 3. The ingress to (entrance) or egress from (exit) the company premises
should not be obstructed; and
▪ 4. Public thoroughfares should not be impeded.
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• Right to picket is protected by the Constitution and the law.
o Unlike a strike which is guaranteed under the Constitutional provision on the
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right of workers to conduct peaceful concerted activities under Section 3,
Article XIII thereof, the right to picket is guaranteed under the freedom of
speech and of expression and to peaceably assemble to air grievances under
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Section 4, Article III (Bill of Rights) thereof.
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• Effect of the use of foul language during the conduct of the picket.
o In the event the picketers employ discourteous and impolite language in their
picket, such may not result in, or give rise to, libel or action for damages.
ss
• Picketing vs. Strike.
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(a) To strike is to withhold or to stop work by the concerted action of employees
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as a result of an industrial or labor dispute. The work stoppage may be
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accompanied by picketing by the striking employees outside of the
company compound.
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(b) While a strike focuses on stoppage of work, picketing focuses on publicizing
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the labor dispute and its incidents to inform the public of what is happening
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in the company being picketed.
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(c) A picket simply means to march to and fro in front of the employer’s
premises, usually accompanied by the display of placards and other signs
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s
making known the facts involved in a labor dispute. It is but one strike
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activity separate and different from the actual stoppage of work.

• Phimco Industries, Inc. v. Phimco Industries Labor Association (PILA). - While the
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right of employees to publicize their dispute falls within the protection of freedom
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of expression and the right to peaceably assemble to air grievances, these rights
are by no means absolute. Protected picketing does not extend to blocking
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ingress to and egress from the company premises. That the picket was moving,
was peaceful and was not attended by actual violence may not free it from r
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taints of illegality if the picket effectively blocked entry to and exit from the
company premises.
O
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• When picket considered a strike.

o In distinguishing between a picket and a strike, the totality of the circumstances
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obtaining in a case should be taken into account.

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o Santa Rosa Coca-Cola Plant Employees Union v. Coca-Cola Bottlers Phils., Inc.
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- Petitioners contend that what they conducted was a mere picketing and not
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a strike. In disagreeing to this contention, the High Court emphasized that it is

not an issue in this case that there was a labor dispute between the parties as
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petitioners had notified the respondent of their intention to stage a strike, and
not merely to picket. Petitioners’ insistence to stage a strike is evident in the
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fact that an amended notice of strike was filed even as respondent moved to
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dismiss the first notice. The basic elements of a strike are present in this case:
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106 members of petitioner Union, whose respective applications for leave of

absence on September 21, 1999 were disapproved, opted not to report for
work on said date, and gathered in front of the company premises to hold a
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mass protest action. Petitioners deliberately absented themselves and instead

wore red ribbons and carried placards with slogans such as: “YES KAMI SA
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STRIKE,” “PROTESTA KAMI,” “SAHOD, KARAPATAN NG MANGGAGAWA

IPAGLABAN,” “CBA-’WAG BABOYIN,” “STOP UNION BUSTING.” They marched
to and fro in front of the company’s premises during working hours. Thus,
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petitioners engaged in a concerted activity which already affected the

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company’s operations. The mass concerted activity obviously constitutes a

strike. Moreover, the bare fact that petitioners were given a Mayor’s permit is
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not conclusive evidence that their action/activity did not amount to a strike.
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The Mayor’s description of what activities petitioners were allowed to conduct
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is inconsequential. To repeat, what is definitive of whether the action staged
by petitioners is a strike and not merely a picket is the totality of the
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circumstances surrounding the situation.
• Petitioner union in the 2011 case of Leyte Geothermal Power Progressive
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Employees Union-ALU-TUCP v. Philippine National Oil Company – Energy
Development Corporation, contends that there was no stoppage of work;
hence, they did not strike. Euphemistically, petitioner union avers that it “only
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engaged in picketing,” and maintains that “without any work stoppage, [its
officers and members] only engaged in xxx protest activity.” The Supreme Court,
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however, ruled that it was a strike and not picketing or protest activity that
petitioner union staged. It found the following circumstances in support of such
finding:
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(1) Petitioner union filed a Notice of Strike on December 28, 1998 with the DOLE
io
grounded on respondent’s purported unfair labor practices, i.e., “refusal to

bargain collectively, union busting and mass termination.” On even date,
petitioner Union declared and staged a strike.
ss
(2) The DOLE Secretary intervened and issued a Return-to-Work Order dated
e
January 4, 1999, certifying the labor dispute to the NLRC for compulsory
i
fe
arbitration. The Order indicated the following facts: (1) filing of the notice
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of strike; (2) staging of the strike and taking control over respondent’s
facilities of its Leyte Geothermal Project on the same day petitioner union
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filed the notice of strike; (3) attempts by the NCMB to forge a mutually
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acceptable solution proved futile; (4) in the meantime, the strike continued
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with no settlement in sight placing in jeopardy the supply of much needed
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power supply in the Luzon and Visayas grids.

(3) Petitioner union itself, in its pleadings, used the word “strike.”
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(4) Petitioner union’s asseverations are belied by the factual findings of the
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NLRC, as affirmed by the CA thus: “The failure to comply with the

mandatory requisites for the conduct of strike is both admitted and clearly
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shown on record. Hence, it is undisputed that no strike vote was

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conducted; likewise, the cooling-off period was not observed and that the
7-day strike ban after the submission of the strike vote was not complied
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with since there was no strike vote taken.”

• In fine, petitioner union’s bare contention that it did not hold a strike cannot r
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trump the factual findings of the NLRC that petitioner union indeed struck
against respondent. In fact, and more importantly, petitioner union failed to
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comply with the requirements set by law prior to holding a strike.

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c. Lockouts (committed by employer)

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• “Lockout” means the temporary refusal by an employer to furnish work as a

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result of an industrial or labor dispute. It consists of the following:

1. Shutdowns;
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2. Mass retrenchment and dismissals initiated by the employer.

3. The employer’s act of excluding employees who are union members.
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Grounds for lockout

In
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• The law recognizes only 2 grounds in support of a valid lockout (same as strike),
viz.:
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1. Collective bargaining deadlock; and/or

2. Unfair labor practice.
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Mandatory procedural requirement

• Substantially similar requisites as in strike.
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With a slight, insignificant variation, the procedural but mandatory requisites for a
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valid strike discussed above are substantially similar to those applicable for valid
lockout. For purposes of ease and clarity, the same are presented as follows:
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1st requisite - It must be based on a valid and factual ground;

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2nd requisite - A notice of lockout must be filed with the NCMB-DOLE;
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3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four
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(24) hours prior to the taking of the lockout vote by secret balloting,
informing said office of the decision to conduct a lockout vote,
and the date, place, and time thereof;
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4th requisite - A lockout vote must be taken where a majority of the members of
the Board of Directors of the corporation or association or of the
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partners in a partnership obtained by secret ballot in a meeting
called for the purpose, must approve it;
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5th requisite - A lockout vote report should be submitted to the NCMB-DOLE at
least seven (7) days before the intended date of the lockout;
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6th requisite - The cooling-off period of 15 days, in case of unfair labor practices
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of the labor organization, or 30 days, in case of collective

bargaining deadlock, should be fully observed; and
7th requisite - The 7-day waiting period/lockout ban reckoned after the
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submission of the lockout vote report to the NCMB-DOLE should
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also be fully observed in all cases.
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d. Assumption of Jurisdiction by the DOLE Secretary
o
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• The DOLE Secretary is granted under Article 263(g) of the Labor Code, the
extraordinary police power of assuming jurisdiction over a labor dispute which, in
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Pr
his opinion, will cause or likely to cause a strike or lockout in an industry indispensable
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to the national interest, or the so-called “national interest” cases. Alternatively, he Ba

may certify the labor dispute to the NLRC for compulsory arbitration.
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• When DOLE Secretary may assume or certify a labor dispute.

• Article 278(g) [263(g)] of the Labor Code provides that when in the opinion of
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the DOLE Secretary, the labor dispute causes or will likely to cause a strike or
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lockout in an industry indispensable to the national interest, he is empowered

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to do either of 2 things:
1. He may assume jurisdiction over the labor dispute and decide it himself; or
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2. He may certify it to the NLRC for compulsory arbitration, in which case, it

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will be the NLRC which shall hear and decide it. r

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• This power may be exercised by the DOLE Secretary even before the actual
staging of a strike or lockout since Article 278(g) [263(g)] does not require the
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existence of a strike or lockout but only of a labor dispute involving national

interest.
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Industry indispensable to national interest

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• What constitutes a national interest case?

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• The Labor Code vests in the DOLE Secretary the discretion to determine what
industries are indispensable to the national interest. Accordingly, upon the
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determination by the DOLE Secretary that such industry is indispensable to the

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national interest, he has authority to assume jurisdiction over the labor dispute
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in the said industry or certify it to the NLRC for compulsory arbitration.

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• Past issuances of the DOLE Secretary have not made nor attempted to
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mention specifically what the industries indispensable to the national interest

are. It was only in Department Order No. 40-H-13, Series of 2013, that certain
industries were specifically named, thus:
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“Section 16. Industries Indispensable to the National Interest. – For

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the guidance of the workers and employers in the filing of petition

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for assumption of jurisdiction, the following industries/services are

hereby recognized as deemed indispensable to the national
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interest:
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a. Hospital sector;
b. Electric power industry;
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c. Water supply services, to exclude small water supply
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services such as bottling and refilling stations;
d. Air traffic control; and
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e. Such other industries as may be recommended by the
National Tripartite Industrial Peace Council (TIPC).”
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o Obviously, the above enumerated industries are not exclusive as other
industries may be considered indispensable to the national interest based on
the appreciation and discretion of the DOLE Secretary or as may be
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recommended by TIPC.
• Different rule on strikes and lockouts in hospitals, clinics and medical institutions.
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o As a general rule, strikes and lockouts in hospitals, clinics and similar medical
institutions should be avoided.
o In case a strike or lockout is staged, it shall be the duty of the striking union or
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locking-out employer to provide and maintain an effective skeletal workforce
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of medical and other health personnel whose movement and services shall
be unhampered and unrestricted as are necessary to insure the proper and
adequate protection of the life and health of its patients, most especially
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emergency cases, for the duration of the strike or lockout.
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o The DOLE Secretary may immediately assume, within twenty four (24) hours
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from knowledge of the occurrence of such a strike or lockout, jurisdiction over
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the same or certify it to the NLRC for compulsory arbitration.
o
Effects of assumption of jurisdiction
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• Some principles on assumption/certification power of the DOLE Secretary.

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o Prior notice and hearing are not required in the issuance of the assumption
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or certification order.
o The DOLE Secretary may seek the assistance of law enforcement agencies
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like the Philippine National Police to ensure compliance with the provision
thereof as well as with such orders as he may issue to enforce the same.
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• Return-to-work order
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o It is a STATUTORY PART AND PARCEL of assumption/certification order even if

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not expressly stated therein.

o The moment the DOLE Secretary assumes jurisdiction over a labor dispute
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o
involving national interest or certifies it to the NLRC for compulsory arbitration,

such assumption or certification has the effect of automatically enjoining the r
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intended or impending strike or, if one has already been commenced, of

automatically prohibiting its continuation. The mere issuance of an assumption
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or certification order automatically carries with it a return-to-work order, even

if the directive to return to work is not expressly stated therein. It is thus not
et
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necessary for the DOLE Secretary to issue another order directing the strikers
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to return to work.
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o It is error therefore for striking workers to continue with their strike alleging
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absence of a return-to-work order since Article 263(g) is clear that once an

assumption/certification order is issued, strikes are enjoined or, if one has
o
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already taken place, all strikers should immediately return to work.

o Nature of return-to-work order
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▪ Return-to-work order is compulsory and immediately executory in character.

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It should be strictly complied with by the parties even during the pendency
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of any petition questioning its validity in order to maintain the status quo
while the determination is being made. Filing of a motion for
reconsideration does not affect the enforcement of a return-to-work order
es
h
which is immediately executory.

▪ Some principles on return-to-work order.
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• The issue of legality of strike is immaterial in enforcing the return-to-work

order.
• Upon assumption or certification, the parties should revert to the status
o
quo ante litem which refers to the state of things as it was before the
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labor dispute or the state of affairs existing at the time of the filing of the
case. It is the last actual, peaceful and uncontested status that
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preceded the actual controversy.

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• To implement the return-to-work order, the norm is actual reinstatement.
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However, payroll reinstatement in lieu of actual reinstatement may
properly be resorted to when special circumstances exist that render
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actual reinstatement impracticable or otherwise not conducive to
attaining the purposes of the law.
ev
Example: University of Sto. Tomas v. NLRC, where the teachers ordered to return
to work could not be given back their academic assignments since the return-to-
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work order of the DOLE Secretary was issued in the middle of the first semester of
the academic year. The Supreme Court affirmed the validity of the payroll
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reinstatement order of the NLRC and ruled that the NLRC did not commit grave
abuse of discretion in providing for the alternative remedy of payroll
reinstatement. It observed that the NLRC was only trying its best to work out a
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satisfactory ad hoc solution to a festering and serious problem.
io
• Nature of assumption order or certification order

o A police power measure
ss
▪ The power to issue assumption or certification orders is an extraordinary
e
authority granted to the President and to his alter ego, the DOLE Secretary,
i
fe
the exercise of which should be strictly limited to national interest cases. It
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is in the nature of a police power measure. This is done for the promotion of
the common good considering that a prolonged strike or lockout can be
o
R
inimical to the national economy. It is to protect the NATIONAL INTEREST
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and not for the protection of labor nor of capital.

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• Effect of defiance or assumption or certification orders on employment of defiant
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Ba
workers
o Defiance of the order, a valid ground to dismiss.
Ba
s
▪ The defiance by the union, its officers and members of the Labor
es
Secretary's assumption of jurisdiction or certification order constitutes a

valid ground for dismissal.
e
▪ The following are the justifications:

bl
• A strike that is undertaken after the issuance by the DOLE Secretary of

an assumption or certification order becomes a prohibited activity
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o
and thus illegal. The defiant striking union officers and members, as a
result, are deemed to have lost their employment status for having r
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knowingly participated in an illegal strike.

• From the moment a worker defies a return-to-work order, he is
O
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deemed to have abandoned his job.

• By so defying, the workers have forfeited their right to be readmitted
et
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to work.
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• All defiant strikers, regardless of whether they are officers or ordinary members,
rn
are deemed dismissed.

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o Once the DOLE Secretary assumes jurisdiction over a labor dispute or certifies
it to the NLRC for compulsory arbitration, such jurisdiction should not be
o
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interfered with by the application of the coercive processes of a strike or

lockout. Any defiance thereof is a valid ground for the loss of employment
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status.
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• Period of defiance of the return-to-work order, not material.

an
o The length of time within which the return-to-work order was defied by the
strikers is not significant in determining their liability for the legal consequences
thereof. The following cases are illustrative of this rule:
es
h
▪ a. University of San Agustin Employees’ Union-FFW v. The CA. - The period

of defiance was less than nine (9) hours from 8:45 a.m. to 5:25 p.m. on
C
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September 19, 2003.

▪ b. Federation of Free Workers v. Inciong. - The period of defiance was only
nine (9) days.
o
• Some principles on defiance of the Assumption/Certification order.

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o The assumption/certification order may be served at any time of the day or

night.
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Legal Practitioner
o No practice of giving 24 hours to strikers within which to return to work. There is
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no law or jurisprudence recognizing this practice.
o The defiant strikers could be validly replaced.
ie
o The refusal to acknowledge receipt of the assumption/certification orders and
other processes is an apparent attempt to frustrate the ends of justice, hence,
ev
invalid. The union cannot be allowed to thwart the efficacy of the said orders
issued in the national interest through the simple expediency of refusing to
acknowledge receipt thereof.
R
E. TELECOMMUTING ACT (RA11165)
1. Definition al
R.A. No. 11165 or the “Telecommuting Act” allows employers to adopt alternative
n
work arrangements. The term "telecommuting" refers to a work from an alternative
workplace with the use of telecommunications and/or computer technologies.
io
2. Telecommuting Program
An employer in private sector may offer a telecommuting program to its
ss
e
employees, as long as the following conditions are followed:
i
fe
(a) Terms and conditions of the program are mutually agreed upon by employers
ev
and employees
(b) That such terms and conditions shall not be less than the minimum labor
o
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standards set by law, and shall include compensable work hours, minimum
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number of work hours, overtime, rest days, and entitlement to leave benefits.
Pr
(c) The employer shall provide the telecommuting employee with relevant written
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Ba
information in order to adequately apprise the individual of the terms and Ba

conditions of the telecommuting program, and the responsibilities of
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employee.
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3. Fair Treatment
e
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The employer shall ensure that the telecommuting employee are given the same
treatment as that of comparable employees are given the same treatment as that
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of comparable employees working at the time employer's premises. All

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telecommuting employee shall:

r
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(a) Receive a rate of pay, including overtime and night shift differential, and
other similar monetary benefits not lower than those provided in applicable
O
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laws, and collective bargaining agreements.

(b) Have the right to rest periods, regular holidays, and special nonworking days.
et
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(c) Have the same or equivalent workload and performance standards as those
h
of comparable worker at the employer's premises.

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(d) Have the same access to training and career development opportunities as
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those of comparable workers at the employer's premises and be subject to

the same appraisal policies covering these workers.
o
(e) Receive appropriate training on the technical equipment at their disposal,

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and the characteristics and conditions of telecommuting.

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(f) Have the same collectible rights as the workers at the employer's premises
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and shall not be barred from communicating with workers' representatives.

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es
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MAJOR TOPIC 4
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POST EMPLOYMENT
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B. EMPLOYER-EMPLOYEE RELATIONSHIP
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1. Tests to Determine Employer-Employee Relationship
FOUR-FOLD TEST
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• What is the 4-fold test of existence of employer-employee relationship?
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1. Selection and engagement of the employee;
2. Payment of wages or salaries;
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3. Exercise of the power of dismissal; or
4. Exercise of the power to control the employee’s conduct.
io
These tests, however, are not fool-proof as they admit of exceptions.

• What is the control test or also known as the MEANS AND METHOD CONTROL TEST?
ss
e
o The 4th test above, the control test, is the controlling test which means that the
i
employer controls or has reserved the right to control the employee not only
fe
ev
as to the result of the work to be done but also as to the means and methods
by which the same is to be accomplished.
o
o The three (3) terms: (1) means, (2) methods and (3) results are the critical
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elements of the control test, thus:
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Pr
▪ Situation 1: If the employer controls the means and methods of performing
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Ba
the job, work or service, including the results thereof, then the
arrangement is one of employer-employee relationship.
Ba
▪ Situation 3: If the so-called employer does not control such means and
s
methods but is only interested in the results thereof, then the arrangement
es
is called “independent job contracting” or “contractualization”, the party

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controlling the means and methods is called the independent contractor

bl
and the party interested only in the results is called the

principal/client/indirect employer/statutory employer.
li
TWO-TIERED TEST
o
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• What is the 2-tiered test of employment relationship?

Ba
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o The two-tiered test enunciated in Francisco v. NLRC, is composed of:

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(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 [control
et
test]; and
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(2) The underlying economic realities of the activity or relationship [broader

h
economic reality test].

rn
bl
o Employment relationship under the control test is determined under the same
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concept as discussed above, that is, by asking whether “the person for whom
the services are performed reserves the right to control not only the end to be
o
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achieved but also the manner and means to be used in reaching such end.”
o Under the economic reality test, the proper standard of economic
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dependence is whether the worker is dependent on the alleged employer for

In
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his continued employment in that line of business.

o These 2-tiered test applies to cases where there are several parties alleged to
be employers of one individual. The determinant factor is economic
es
h
dependency of such individual. In other words, under the economic reality test,
the question to ask is - among the parties alleged to be the employer, to whom
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is the individual economically dependent?

bl
o Following the broader economic reality test, the Supreme Court found
petitioner in Orozco v. The Fifth Division of the Hon. CA, who is a columnist in the
o
Philippine Daily Inquirer (PDI), not an employee of PDI but an independent

contractor. Thus:
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“Petitioner’s main occupation is not as a columnist for respondent but as

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a women’s rights advocate working in various women’s

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organizations. Likewise, she herself admits that she also contributes
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articles to other publications. Thus, it cannot be said that petitioner was
dependent on respondent PDI for her continued employment in
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respondent’s line of business.
“The inevitable conclusion is that petitioner was not respondent PDI’s
ev
employee but an independent contractor, engaged to do independent
work.”
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• Is it necessary to have a written contract of employment in order to
establish employer-employee relationship?
al
o No. It may be an oral or written contract. A written contract is not
necessary for the creation and validity of the relationship.
o The only exception is in the case of Kasambahay where, under the
n
Kasambahay Law, it is required that the contract of employment
io
should be in writing.
2. Kinds of Employment
ss
a. Regular
e
• How does one become a regular employee?
i
fe
Under the Labor Code, regular employment may be attained in either of three (3)
ev
ways, namely:
o
1. By nature of work. - The employment is deemed regular when the employee
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has been engaged to perform activities which are usually necessary or
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Pr
desirable in the usual business or trade of the employer.
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Ba
2. By period of service. - The employment is reckoned as regular when the

employee has rendered at least one (1) year of service, whether such service
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is continuous or broken, with respect to the activity in which he is employed
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and his employment shall continue while such activity exists.

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3. By probationary employment. - The employment is considered regular when

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the employee is allowed to work after a probationary period.

bl
• Is the manner or method of paying wage material in determining regularity of

employment?
li
No. The manner and method of payment of wage or salary is immaterial to the issue
o
of whether the employee is regular or not. So, the fact that an employee is paid on r
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a daily basis or monthly basis is inconsequential on the regularity issue.

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b. Casual
• What is the most important distinguishing feature of casual employment?
et
es
The most important distinction is that the work or job for which he was hired is merely
h
incidental to the principal business of the employer and such work or job is for a
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definite period made known to the employee at the time of engagement.

bl
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Capule v. NLRC, Yakult Philippines, Inc., G.R. No. 90653, Nov. 12, 1990.
Private respondent company is engaged in the manufacture of cultured
o
milk which is sold under the brand name “Yakult.” Petitioners were hired
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to cut cogon grass and weeds at the back of the factory building used by
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private respondents. They were not required to work on fixed schedule

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and they worked on any day of the week on their own discretion and
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convenience. They were held to be casual employees because cutting

cogon grass and weeds is but incidental to the principal business of the
company.
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h
• When does a casual employee become regular?

Casual employee becomes regular after one year of service by operation of law.
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The one (1) year period should be reckoned from the hiring date. Repeated
rehiring of a casual employee makes him a regular employee.
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c. Probationary
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• Is the period of 6 months in the law on probationary employment (Article 296
[281], LC) the minimum or maximum period?
ie
The answer is it is neither the minimum nor the maximum period of probationary
employment. The 6-month period is mentioned in the law for purposes of setting the
ev
standard period. Proof that it is not the maximum is the case of Buiser v. Leogardo
where the probationary period of 18 months was considered reasonable. In other
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words, probationary period may be for a day, a week, a month or several months,
depending on the reasonable discretion of management.
al
• How is probationary period, say, of 6 months computed?
The 6-month probationary period should be reckoned “from the date of
appointment up to the same calendar date of the 6th month following.”
n
• May probationary period be extended?
io
Yes, but only upon the mutual agreement in writing by the employer and the
probationary employee.
• What is the effect of allowing a probationary employee to work beyond the
ss
probationary period?
e
He is considered a regular employee.
i
fe
• What is the effect if there is no written contract providing for probationary
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employment?
If there is no written contract, the employee is considered a regular employee from
o
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day one of his employment. And even if there is one, he is deemed regular if there
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is no stipulation on probationary period.

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• What is the distinction between probationary employment and fixed-term
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Ba
employment?
The distinction lies in the intention of the parties. If the parties intend to make their
Ba
s
relationship regular after the lapse of the period, say of 6 months, then what is
contemplated is probationary employment; if there is no such intention of the
es
parties, then, what they have entered into is simply a fixed-term contract.
e
• What are the grounds to terminate probationary employment?

bl
Under Article 281, a probationary employee may be terminated only on three

(3) grounds, to wit:
li
o
1. For a just cause; or

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2. For authorized cause; or

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3. When the probationary employee fails to qualify as a regular employee in

accordance with reasonable standards made known by the employer to the
et
employee at the start of the employment.

es
h
• Is procedural due process required in termination of probationary employment?

rn
Yes, but only in the case of Numbers 1 and 2 above.

bl
C
Due process for Number 3 is different and unique in the sense that it requires simply
o
the service of a written notice of termination, not verbal, informing the probationary
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employee of the termination of his probationary employment and attaching

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thereto the result of the performance evaluation conducted on him. As clearly

In
pointed out above, it is a fundamental requirement that the reasonable standards

an
expected of the employee during his probationary employment was made known
to him at the time of his engagement. Necessarily, at the termination thereof, the
supposed performance evaluation should be presented to him. As a matter of due
es
h
process, an employee has the right to know whether he has met the standards for
which his performance was evaluated. Should he fail, he also has the right to know
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the reasons therefor.
• When should termination of probationary employment be made?

o
Termination to be valid must be done prior to lapse of probationary period.

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Termination a day or a few days after the lapse of the probationary period cannot
be done without just or authorized cause as he has already become a regular
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employee by that time.

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d. Project
• What is the litmus test of project employment?
ie
The litmus test of project employment, as distinguished from regular employment, is
whether or not the project employees were assigned to carry out a specific project
ev
or undertaking, the duration and scope of which were specified at the time the
employees were engaged for that project.
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A true project employee should be assigned to a project which begins and ends at
determined or determinable times and be informed thereof at the time of hiring.
al
• What are the 6 indicators of project employment?
Either one or more of the following circumstances, among others, may be
n
considered as indicator/s that an employee is a project employee:
io
1. The duration of the specific/identified undertaking for which the worker is

engaged is reasonably determinable.
ss
2. Such duration, as well as the specific work/service to be performed, are
e
defined in an employment agreement and is made clear to the employee at
i
fe
the time of hiring.
ev
3. The work/service performed by the employee is in connection with the
o
particular project or undertaking for which he is engaged.
R
r
4. The employee, while not employed and awaiting engagement, is free to offer
Pr
his services to any other employer.
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Ba
5. A report of the termination of employment in the particular

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project/undertaking is submitted to the DOLE Regional Office having
s
jurisdiction over the workplace, within thirty (30) days following the date of his
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separation from work.

e
6. An undertaking in the employment contract by the employer to pay

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completion bonus to the project employee as practiced by most construction

companies.
li
o
• Is length of service material in determining validity of project employment?

r
n
No. Length of service is not a controlling determinant of employment tenure.

Ba
R
O
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• What are some principles on project employment?

1. Project employees should be informed of their status as such at inception of
et
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the employment relationship.

h
2. There must be a written contract of project employment stating the duration

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of the project employment as well as the particular work or service to be

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performed. A written project employment contract is an indispensable

requirement.
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3. Intervals in employment contracts indicate project employment.

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4. Continuous, as opposed to intermittent, rehiring shows that employee is

In
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regular.
5. “Project-to-project” basis of employment is valid.
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• On termination of project employment.

h
1. Project employees enjoy security of tenure only during the term of their project
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employment.
2. Project employees have presumably become regular employees if they are
o
allowed to work beyond the completion of the project or any phase thereof
to which they were assigned or after the “day certain” which they and their
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employer have mutually agreed for its completion. Having become regular
employees, they can no longer be terminated on the basis of the completion
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of the project or any phase thereof to which they were deployed.

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e. Seasonal
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• Can a seasonal employee become a regular seasonal employee?
ie
Yes, provided the following requisites are complied with:
1. The seasonal employee should perform work or services that are seasonal in
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nature; and
2. They must have also been employed for more than one (1) season.
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• Can a regular seasonal worker file an illegal dismissal case in the event he is not
hired for the next season?
al
Yes. The reason is, being a regular seasonal employee, the employer should re-hire
him in the next season. During off-season, his employment is deemed suspended
and he is considered as being on leave of absence without pay.
n
io
f. Fixed-term
• What are the requisites in order for fixed-term employment to be valid?
The two (2) requisites or criteria for the validity of a fixed-term contract of
ss
employment are as follows:
i e
1. The fixed period of employment was knowingly and voluntarily agreed upon
fe
ev
by the parties, without any force, duress or improper pressure being brought
to bear upon the employee and absent any other circumstances vitiating his
o
consent; or
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2. It satisfactorily appears that the employer and employee dealt with each
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Pr
other on more or less equal terms with no moral dominance whatever being
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Ba
exercised by the former on the latter. Ba

• Is fixed-term employment valid if the job is directly related to the principal
s
business of the employer?

es
Yes. Fixed-term employment is the only exception to the rule that one becomes
e
regular if he is made to perform activities directly related to the principal business

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of the employer (Regularity by virtue of nature of work).

n
li
Thus, it was ruled in Philippine Village Hotel v. NLRC, that the fact that private
o
respondents were required to render services necessary or desirable in the

r
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operation of petitioner’s business for the duration of the one-month dry-run

Ba
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operation period, did not in any way impair the validity of their contracts of
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employment which specifically stipulated that their employment was only for one
(1) month.
et
es
• When does a fixed-term employee become regular?

h
1. When he is allowed to work beyond the agreed fixed term.

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2. When there are successive renewals of fixed-period contracts.

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• What is the 555 Doctrine?

o
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The 555 Doctrine is a scheme of the employer in hiring workers on a uniformly fixed
5-month basis and replacing them upon the expiration of their contracts with other
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workers with the same employment status circumvents their right to security of
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tenure.
g. Floating Status
es
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• Lack of applicable provision in the Labor Code

At the outset, it bears reiterating that although placing an employee like a security
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guard on “floating” status (or sometimes called temporary “off-detail” status) is

bl
considered a temporary retrenchment measure, the Supreme Court, in Exocet v.

Serrano, recognized the fact that there is similarly no provision in the Labor Code
o
which treats of a temporary retrenchment or lay-off. Neither is there any provision

which provides for its requisites or its duration. Nevertheless, since an employee
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cannot be laid-off indefinitely, the Court has applied Article 301 [286] of the Labor
Code by analogy to set the specific period of temporary lay-off to a maximum of
an
six (6) months. This provision states:

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“Article 301 [286]. When Employment Not Deemed Terminated. –
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The bona-fide suspension of the operation of a business or undertaking
for a period not exceeding six (6) months, or the fulfillment by the
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employee of a military or civic duty shall not terminate employment. In
all such cases, the employer shall reinstate the employee to his former
ev
position without loss of seniority rights if he indicates his desire to resume
his work not later than one (1) month from the resumption of operations
of his employer or from his relief from the military or civic duty.”
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Clearly from the foregoing article, the concept of “floating status” does not
find any direct connection or relation, except for the six (6)-month period provided
al
therein which has been held as the defining cut-off period that can be used as a
consonant basis in determining the reasonableness of the length of time when an
n
employee could be deprived of work under this doctrine.
io
• “Floating” status doctrine as applied to security guards.

Applying Article 301 [286] by analogy, the Supreme Court has consistently
recognized that security guards may be temporarily sidelined by their security
ss
e
agency as their assignments primarily depend on the contracts entered into by the
i
latter with third parties. This is called the “floating status” doctrine which is based on
fe
ev
and justified under the said article. This status, as applied to security guards, is the
period of time when security guards are in between assignments or when they are
o
made to wait after being relieved from a previous post until they are transferred to
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a new one. In security agency parlance, being placed “off-detail” or on “floating”
r
Pr
status means “waiting to be posted.”
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Ba
• Instances which justify application of doctrine. Ba

“Floating status” takes place under any of the following circumstances:
s
(1) When the security agency’s clients decide not to renew their contracts with
es
the agency, resulting in a situation where the available posts under its
e
existing contracts are less than the number of guards in its roster; or
bl
(2) When contracts for security services stipulate that the client may request the
agency for the replacement of the guards assigned to it even for want of
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cause and there are no available posts under the agency’s existing
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contracts to which the replaced security guards may be placed. r

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As far as No. 2 above is concerned, the Supreme Court has recognized the fact
O
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that clients of the security agency have the right to request for the removal of any
of the security guards supplied by the latter to the former without need to justify
et
the same. The reason for this is the lack of any employment relationship between
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the security guards and the client.

h
rn
Also, under No. 2 above, a relief and transfer order may be issued by the security
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agency to the security guard concerned in order to effect it. This order in itself does
not sever employment relationship between a security guard and his agency. And
o
the mere fact that the transfer would be inconvenient for the former does not by
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itself make the transfer illegal.

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• Applicability to other employees.

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While the “floating status” rule is traditionally applicable to security guards who are
temporarily sidelined from duty while waiting to be transferred or assigned to a new
post or client, Article 301 [286] has been applied as well to other industries when,
es
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as a consequence of the bona-fide suspension of the operation of a business or

undertaking, an employer is constrained to put employees on “floating status” for
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a period not exceeding six (6) months.

Thus, it may also be applied to employees of legitimate contractors or
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subcontractors under a valid independent contracting or subcontracting

arrangement under Article 106 of the Labor Code. The same form of dislocation
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and displacement also affects their employees every time contracts of services
are terminated by their clients or principals. In the meantime that the dislocated
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employees are waiting for their next assignment, they may be placed on “off
115
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detail” or “floating” status following the same concept applicable to security
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guards.
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For example, in JPL Marketing Promotions v. CA, this principle was applied to
merchandisers hired by petitioner company which is engaged in the business of
recruitment and placement of workers. After they were notified of the cancellation
ev
of the contract of petitioner with a client where they were assigned and pending
their reassignment to other clients, the merchandisers are deemed to have been
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placed under “floating status” for a period of not exceeding six (6) months under
Article 301 [286]. Such notice, according to the Court, should not be treated as a
notice of termination but a mere note informing them of the termination of the
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client’s service contract with petitioner company and their reassignment to other
clients. The 30-day notice rule under Article 298 [283] does not therefore apply to
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this case.
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This was likewise applied to the case of:

(1) A bus driver in Valdez v. NLRC who was placed on floating status after the air-
conditioning unit of the bus he was driving suffered a mechanical
ss
e
breakdown; and
i
fe
(2) A Property Manager in Nippon Housing Phil., Inc. v. Leynes, pending her
ev
assignment to another project for the same position.
o
• Some principles on “Floating Status” Doctrine.
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o When an employee like a security guard is placed on a “floating” status, he
r
Pr
is not entitled to any salary, financial benefit or financial assistance provided
r
Ba
by law during the 6-month period thereof.

o As a general rule, “floating status” beyond 6 months amounts to
Ba
illegal/constructive dismissal. This is so because “floating status” is not
s
equivalent to dismissal so long as such status does not continue beyond a

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reasonable time which means six (6) months. After 6 months, the employee
e
should be recalled for work, or for a new assignment; otherwise, he is deemed

bl
terminated.
o The security guard who refused to be re-assigned may be dismissed for
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insubordination.
o
o Multiple “floating status” amount to constructive dismissal.

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o “Floating status” is distinct from preventive suspension. In the case of “floating

Ba
R
status,” the employee is out of work because his employer has no available
O
an
work or job to assign him to. He is thus left with no choice but to wait for at
least six (6) months before he could claim having been constructively
et
dismissed, should his employer fail to assign him to any work or job within said
es
period. In the case of preventive suspension, the employee is out of work

h
because he has committed a wrongful act and his continued presence in

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bl
the company premises poses a serious and imminent threat to the life or
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property of the employer or of his co-workers. Without this kind of threat,

preventive suspension is not proper. Further, the period of preventive
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suspension under the said provisions of the Implementing Rules should not
exceed thirty (30) days.
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o A complaint filed before the lapse of the 6-month period of floating status is
In
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premature, the employee not having been deemed constructively dismissed

at that point. Thus, a complaint filed twenty-nine (29) days after the security
guard was placed on floating status was declared as having been
es
h
prematurely filed.
o However, the filing of a complaint for constructive dismissal prior to the lapse
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of the 6-month period of “floating status” will not be held premature in cases
bl
where the intent to terminate the employee is evident even prior to the lapse
of said period.
o
o No procedural due process is required before an employee is placed under

“floating status.” The reason is that there is no termination of employment to
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speak of at that point.

an
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Legal Practitioner
3. Legitimate Subcontracting v. Labor-Only Contracting
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a. Elements
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• What are the elements of legitimate job contracting?
(NOTE: The following THREE (3) words are very important: MANNER & METHOD and
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RESULT in determining the elements of legitimate job contracting arrangement).
(a) The contractor is engaged in a distinct and independent business and
undertakes to perform the job or work on its own responsibility, according to
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its own MANNER AND METHOD;
(b) The contractor has substantial capital to carry out the job farmed out by the
al
principal on his own account, MANNER AND METHOD, investment in the form
of tools, equipment, machinery and supervision;
(c) In performing the work farmed out, the contractor is free from the CONTROL
n
and/or direction of the principal in all matters connected with the
io
performance of the work EXCEPT as to the RESULT thereto; and

(d) The Service Agreement ensures compliance with all the rights and benefits
for all the employees of the contractor under labor laws.
ss
Absence of any of the foregoing requisites makes it a labor-only contracting
e
arrangement.
i
fe
ev
Therefore:
o If the first party has control over the manner and method of performing the
o
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job or work, including its result, and the second party who supplied the
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workers to the first party to perform the job or work has no such control over
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such manner and method, then the first party is the direct employer of the
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Ba
workers supplied by the second party to perform the job or work and the
second party shall not be considered as a legitimate “contractor” but a
Ba
s
“labor-only contractor.”
o Contrarily, if the first party has NO control over the manner and method of
es
performing the job or work as such control thereover is reposed on the

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second party, and the first party’s interest pertains only to the result of the
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performance of the job or work, then there exists here a legitimate job
contracting arrangement where the first party is considered the principal and
li
o
the second party, the contractor.

r
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NOTE: “Substantial capital” and “investment in tools, etc.” are two separate
Ba
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requirements.
O
an
“Substantial capital” and “investment in tools, equipment, implements, machineries

and work premises” should be treated as two (2) distinct and separate requirements
et
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in determining whether there is legitimate job contracting arrangement. It is enough

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that only one of these two requisites is complied with to make the job contracting
rn
arrangement legitimate and valid.

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• May individuals engage in legitimate job contracting?

Yes. Legitimate job contracting may not only be engaged by corporations,
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partnerships or single proprietorships. Individuals may become legitimate job

contractors themselves for as long as they have SPECIAL SKILLS, TALENTS or
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EXPERTISE which are considered equivalent of the requirement regarding

In
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“INVESTMENT IN TOOLS.”
• Are individuals engaged as legitimate job contractors required to fulfill the

es
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requisites of legitimate job contracting as afore-described?

NO. They need not be registered as independent contractors with DOLE; they need
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not have substantial capital (such as the P5 Million stated above). All that they are
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required is to have their tools consisting of SPECIAL SKILLS, TALENT or EXPERTISE.

o
• What are examples of individuals as independent contractors?

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1. Sonza v. ABS-CBN Broadcasting Corporation - TV and radio talents and others

with special talents and skills may not be employees but legitimate independent
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contractors.
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Legal Practitioner
2. Orozco v. The Fifth Division of the Honorable Court of Appeals - A newspaper
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columnist is not an employee but an independent contractor of the newspaper
publishing the column.
ie
3. Jose Mel Bernarte v. Philippine Basketball Association - Basketball referee is an
independent contractor.
ev
4. Semblante and Pilar v. CA, Gallera de Mandaue, et al. - Cockpit masiador and
sentenciador are independent contractors.
5. Escasinas v. Shangri-la’s Mactan Island Resort - A doctor may be engaged as
R
an independent contractor.
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Labor-only Contracting
• Is labor-only contracting allowed under the law?
n
NO, it is absolutely prohibited.
io
• What are the elements of labor-only contracting?

(a) The contractor does not have either (i) SUBSTANTIAL CAPITAL or (ii)
ss
INVESTMENTS in the form of tools, equipment, machineries, supervision, work
e
premises, among others, AND the contractor's employees recruited and
i
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placed are performing activities which are DIRECTLY RELATED to the main
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business operation of the principal;
o
- OR-
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(b) The contractor does not exercise the right to CONTROL over the performance
Pr
of the work of the employee.
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Ba
NOTE: There is labor-only contracting even if only one of the two (2) elements above
Ba
is present. Further, an unregistered contractor is presumed to be a labor-only
s
contractor. Registration as independent contractor should be made with the DOLE.

es
• What are the EFFECTS of labor-only contracting?

e
bl
1. The labor-only contractor will be treated as the agent or intermediary of the

n
principal. Since the act of an agent is the act of the principal, representations
li
made by the labor-only contractor to the employees will bind the principal.
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2. The principal will become the direct employer as if it directly employed the r
n
Ba
R
workers supplied by the labor-only contractor to undertake the contracted job

or service. The principal will be responsible to them for all their entitlements and
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benefits under labor laws.

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3. The principal and the labor-only contractor will be solidarily treated as the direct
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employer.
h
rn
• What are the distinctions between legitimate job contracting and labor-only
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contracting?
The chief distinctions between legitimate job contracting, on the one hand, and
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the prohibited labor-only contracting, on the other, may be summed up as

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follows:
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1. In the former, no employer-employee relationship exists between the

In
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contractual employees of the job contractor and the principal; while in the
latter, an employer-employee relationship is created by law between the
principal and the employees supplied by the labor-only contractor.
es
h
2. In the former, the principal is considered only an “indirect employer”; while in

the latter, the principal is considered the “direct employer” of the employees
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bl
supplied by the labor-only contractor.

3. In the former, the solidary obligation of the principal and the legitimate job
o
contractor is only for a limited purpose, that is, to pay the wages of the
contractor’s employees supplied to the principal.. Other than this obligation of
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paying the wages, the principal is not responsible for any claim made by the
contractor’s employees; while in the latter, the principal becomes solidarily liable
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Legal Practitioner
with the labor-only contractor to the latter’s employees in the same manner and
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extent that the principal is liable to employees directly hired by him/her.
ie
b. Trilateral relationship
• What is meant by trilateral relationship?
As distinguished from employment relationship which is “bilateral” in nature,
ev
involving as it does only two (2) parties, namely: (1) the employer, and (2) the
employee, in legitimate job contracting, it is “trilateral” in character, there being
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three (3) parties involved, to wit:
1. The principal who farms out a job, work or service to a contractor;
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2. The contractor who has the capacity to independently undertake the
performance of the job, work or service; and
n
3. The contractor’s workers engaged by the contractor and farmed out to the
io
principal to accomplish the job, work or service.

• What are the contracts involved in this trilateral relationship?
Only two (2) contracts are involved, namely:
ss
e
1) Service Agreement between the principal and the contractor wherein the
i
fe
obligation arising therefrom is civil in nature and thus cognizable by the
ev
regular courts.
o
2) Employment contract between the contractor and its workers supplied to the
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principal.
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Pr
• Is there any employment relationship and/or contractual relationship between
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Ba
the principal and the contractor’s workers farmed out to the principal? Ba
None. There is no employment relationship nor any form of contractual relationship
s
of whatsoever nature between the principal and the workers supplied by the
contractor. Hence, the principal can ask the contractor to remove any of the
es
latter’s employees assigned or farmed out to it anytime without need to observe

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due process.
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c. Solidary liability
li
• Solidary Liability of indirect employer with contractor (Article 109, Labor Code)
o
Every employer or indirect employer shall be held responsible with his contractor r
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Ba
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or subcontractor for any violation of any provision of this Code. For purposes of
determining the extent of their civil liability, they shall be considered as direct
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employers.
• The principal will become the direct employer as if it directly employed the
et
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workers supplied by the labor-only contractor to undertake the contracted job

h
or service It will be responsible to them for all their entitlements and benefits
rn
under labor laws. This is so because a finding that a contractor is a labor-only

bl
C
contractor is equivalent to a declaration that there is an employer-employee

relationship between the principal and the workers of the labor-only contractor.
o
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C. TERMINATION OF EMPLOYMENT BY EMPLOYER

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In
• What is meant by TWO-FOLD DUE PROCESS requirement?

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Dismissal of employees requires the observance of the two-fold due process

requisites, namely:
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1. Substantive aspect which means that the dismissal must be for any of the (1)
just causes provided under the Labor Code or the company rules and
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regulations promulgated by the employer; or (2) authorized causes under the

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Labor Code; and

2. Procedural aspect which means that the employee must be accorded both
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STATUTORY DUE PROCESS AND CONTRACTUAL DUE PROCESS.

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1. Just Causes
The just causes in the Labor Code are found in the following provisions thereof:
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Legal Practitioner
(1) Article 297 [282] - (Termination by the Employer) which provides for the
w
following grounds:
(a) Serious misconduct or willful disobedience by the employee of the lawful
ie
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
ev
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of
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his employer or any immediate member of his family or his duly authorized
representatives; and
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(e) Other causes analogous to the foregoing.
(2) Article 279(a) [264(a)] - (Prohibited Activities) which provides for the
n
termination of the following:
io
(a) Union officers who knowingly participate in an illegal strike and therefore
deemed to have lost their employment status.
(b) Any employee, union officer or ordinary member who knowingly
ss
participates in the commission of illegal acts during a strike (irrespective of
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whether the strike is legal or illegal), is also deemed to have lost his
i
fe
employment status.
ev
(3) Article 278(g) [263(g)] - (National Interest Cases) where strikers who violate
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orders, prohibitions and/or injunctions as are issued by the DOLE Secretary or
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the NLRC, may be imposed immediate disciplinary action, including dismissal

Pr
or loss of employment status.
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Ba
(4) Article 259(e) [248(e)] - (Union Security Clause) where violation of the union
Ba
security agreement in the CBA may result in termination of employment.
s
Under this clause, the bargaining union can demand from the employer the
es
dismissal of an employee who commits a breach of union security

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arrangement, such as failure to join the union or to maintain his membership

bl
in good standing therein. The same union can also demand the dismissal of
a member who commits an act of disloyalty against it, such as when the
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member organizes a rival union.

o
• Is dismissal based on Company Code of Discipline or Company Rules and r

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Ba
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Regulations illegal?
O
an
No. In Sampaguita Auto Transport Corporation v. NLRC, the Supreme Court

pronounced that the Court of Appeals erred in ruling that the dismissal of private
et
respondent, a bus driver of petitioner, was illegal because the “grounds upon which
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petitioners based respondent’s termination from employment, viz.: ‘hindi lahat ng

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schedule nailalabas,’ [‘]mababa ang revenue ng bus, laging kasama an[g] asawa
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sa byahe’ and ‘maraming naririnig na kwento tungkol sa kanya, nag-uutos ng

conductor para kumita sa hindi magandang paraan[,]’ xxx are not among those
enumerated under Article 297 [282] of the Labor Code as just causes for termination
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of employment.” The irregularities or infractions committed by private respondent

in connection with his work as a bus driver constitute serious misconduct or, at the
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very least, conduct analogous to serious misconduct, under the above-cited Article
In
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297 [282] of the Labor Code. The requirement in the company rules that: ‘3. to obey
traffic rules and regulations as well as the company policies. 4. to ensure the safety
of the riding public as well as the other vehicles and motorist (sic)’ is so fundamental
es
h
and so universal that any bus driver is expected to satisfy the requirement whether
or not he has been so informed.
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(1) SERIOUS MISCONDUCT
• Requisites.
o
For misconduct or improper behavior to be a just cause for dismissal, the

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following requisites must concur:

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1. It must be serious; and

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Legal Practitioner
2. It must relate to the performance of the employee’s duties; and
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3. It must show that he has become unfit to continue working for the employer.
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All the above three (3) requisites must concur.
• Some principles on serious misconduct
ev
o Serious misconduct implies that it must be of such grave and aggravated
character and not merely trivial or unimportant.
o Simple or minor misconduct would not justify the termination of the
R
services of an employee.
o Possession or use of shabu or other drugs is a valid ground to terminate
employment.al
o Immorality, as a general rule, is not a just ground to terminate
employment. The exception is when such immoral conduct is prejudicial
n
or detrimental to the interest of the employer.
io
o Immoral act committed beyond office hours is a valid ground to terminate

employment.
o Sexual intercourse inside company premises constitutes serious
ss
misconduct.
e
o The act of a 30-year old lady teacher in falling in love with a 16-year old
i
fe
student is not immoral.
ev
o Fighting is a ground for termination but only the instigator or aggressor and
not the victim who was constrained to defend himself should be dismissed.
o
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o Challenging superiors to a fight is a just cause for termination.
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o Assaulting another employee is a just cause for termination.

Pr
o Utterance of obscene, insulting or offensive words constitutes serious
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Ba
misconduct.
o Gambling within company premises is a serious misconduct.
Ba
s
o Rendering service to business rival is a just cause to terminate

employment.
es
o Selling products of a competitor is a just cause for termination.

e
o Organizing a credit union by employees in a bank is a serious misconduct.

bl
o Deceiving a customer for personal gain is a just cause for termination.

o Contracting work in competition with employer constitutes serious
li
o
misconduct.
o Intoxication which interferes with the employee’s work constitutes serious r
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misconduct.
o The act of a teacher in pressuring a colleague to change the failing grade
O
an
of a student is serious misconduct.

o Sexual harassment is a just ground to dismiss.
et
es
o Sleeping while on duty is a ground for termination.

h
o Dismissal is too harsh a penalty for eating while at work.

rn
o Pilferage or theft of company-owned property is a just cause to terminate.

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o Theft of funds or property not owned by employer is not a ground to

terminate.
o
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o Act of falsification is a valid ground to terminate employment.

o Punching-in of time cards of other employees is a just cause for
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termination.
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(2) INSUBORDINATION OR WILLFUL DISOBEDIENCE OF LAWFUL ORDERS
• Requisites
es
h
One of the fundamental duties of an employee is to obey all reasonable rules,

C
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orders and instructions of the employer. In order to validly invoke this ground, the
following requisites must be complied with, to wit:
1. The employee’s assailed conduct must have been willful or intentional, the
o
willfulness being characterized by a wrongful and perverse attitude; and

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2. The order violated must be based on a reasonable and lawful company

rule, regulation or policy and made known to the employee and must
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pertain to the duties for which he has been engaged to discharge.

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Legal Practitioner
w
ie
• Some principles on insubordination.
o Making false allegations in complaint does not constitute
ev
insubordination.
o Failure to answer memo to explain constitutes willful disobedience.
o Another notice is required in case of termination on the ground of failure
R
to answer memo to explain.
o Refusal to undergo random drug testing constitutes both serious
al
misconduct and insubordination.
o Refusal to render overtime to meet production deadline constitutes
insubordination.
n
o Refusal to comply with a lawful transfer constitutes insubordination.
io
(3) GROSS AND HABITUAL NEGLECT OF DUTIES

ss
• Requisites.
i e
The following are the requisites:
fe
ev
(1) There must be negligence which is gross and/or habitual in character; and
o
(2) It must be work-related as would make him unfit to work for his employer.
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• Some principles on gross and habitual neglect of duties.
r
Pr
o Simple negligence is not sufficient to terminate employment.
r
Ba
o The negligence must be gross in character which means absence of that Ba

diligence that an ordinarily prudent man would use in his own affairs.
s
o As a general rule, negligence must be both gross and habitual to be a valid

ground to dismiss.
es
o Habituality may be disregarded if negligence is gross or the damage or loss

e
is substantial. “Habitual negligence” implies repeated failure to perform one’s

bl
duties for a period of time, depending upon the circumstances.

o Actual damage, loss or injury is not an essential requisite.
li
o Gross negligence may result to loss of trust and confidence.

o
o Absences, if authorized, cannot be cited as a ground to terminate r

n
Ba
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employment.
o Tardiness or absenteeism, if not habitual, cannot be cited as a ground to
O
an
terminate employment.
o Tardiness or absenteeism, if habitual, may be cited as a ground to terminate
et
es
employment.
h
o Tardiness or absenteeism, if habitual, may be tantamount to serious

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misconduct.
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C
o Absences or tardiness due to emergency, ailment or fortuitous event are

justified and may not be cited as just cause to terminate employment.
o
o Unsatisfactory or poor performance, inefficiency and incompetence are

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considered just causes for dismissal only if they amount to gross and habitual
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neglect of duties.
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(4) ABANDONMENT OF WORK
• Concept.
es
h
Abandonment is not provided for in the Labor Code but it is jurisprudentially

considered a form of neglect of duty; hence, a just cause for termination of
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employment under Article 297(b) [282(b)] of the Labor Code.

• Requisites
To constitute abandonment, two (2) elements must concur, namely:
o
1) The employee must have failed to report for work or must have been absent
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without valid or justifiable reason; and

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Legal Practitioner
2) There must have been a clear intention on the part of the employee to sever
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the employer-employee relationship manifested by some overt act.
ie
• Some principles on abandonment.
o Mere absence is not enough to constitute abandonment.
o Clear intention to sever employment relationship is necessary.
ev
o Due process in abandonment cases consists only of the service of 2 notices
to the employee, viz.:
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a. First notice directing the employee to explain why he should not be
declared as having abandoned his job; and
b. Second notice to inform him of the employer’s decision to dismiss him on
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the ground of abandonment.
o No hearing is required to validly dismiss an employee for abandonment.
n
o Notices in abandonment cases must be sent to employee’s last known
address per record of the company. The employer need not look for the
io
employee’s current whereabouts.

o Immediate filing of a complaint for illegal dismissal praying for reinstatement
negates abandonment.
ss
e
o Lapse of time between dismissal and filing of a case is not a material
i
indication of abandonment. Hence, lapse of 2 years and 5 months or 20
fe
ev
months or 9 months or 8 months before filing the complaint for illegal dismissal
is not an indication of abandonment. Under the law, the employee has a 4-
o
year prescriptive period within which to institute his action for illegal dismissal.
R
o Filing of a case to pre-empt investigation of the administrative case is
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Pr
tantamount to abandonment.
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Ba
o When what is prayed for in the complaint is separation pay and not
reinstatement, the filing of complaint does not negate abandonment.
Ba
o It is abandonment when what is prayed for in the complaint is separation pay
s
and it was only in the position paper that reinstatement was prayed for.
es
o Employment in another firm coinciding with the filing of complaint does not
e
indicate abandonment.
bl
o Offer of reinstatement by employer during proceedings before Labor Arbiter

and refusal by employee does not indicate abandonment but more of a
li
symptom of strained relations between the parties.

o
o An employee may be absolved from the charge of abandonment of work

r
n
but adjudged guilty of AWOL. These two grounds are separate and distinct
Ba
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from each other.

O
an
o An employee who failed to report for work after the expiration of the duly
approved leave of absence is considered to have abandoned his job.
et
o An employee who failed to comply with the order for his reinstatement is
es
deemed to have abandoned his work.

h
o An employee who, after being transferred to a new assignment, did not

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C
report for work anymore is deemed to have abandoned his job.

o An employee who deliberately absented from work without leave or
permission from his employer for the purpose of looking for a job elsewhere is
o
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deemed to have abandoned his work.

o Imprisonment or detention by military does not constitute abandonment.
R
o Absence to evade arrest is not a valid justification. To do so would be to place

In
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an imprimatur on the employee’s attempt to derail the normal course of the

administration of justice.
es
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(5) FRAUD
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• Requisites.
The following are the requisites of this ground:
o
1. There must be an act, omission, or concealment;

2. The act, omission or concealment involves a breach of legal duty, trust, or
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confidence justly reposed;

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3. It must be committed against the employer or his/her representative; and

4. It must be in connection with the employees' work.
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Legal Practitioner
• Some principles on fraud.
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o Failure to deposit collection constitutes fraud.
o Lack of damage or losses is not necessary in fraud cases. The fact that the
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employer did not suffer losses from the dishonesty of the dismissed
employee because of its timely discovery does not excuse the latter from
ev
any culpability.
o Lack of misappropriation or shortage is immaterial in case of unauthorized
encashment of personal checks by teller and cashier.
R
o Restitution does not have absolutory effect.
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(6) WILLFUL BREACH OF TRUST AND CONFIDENCE
• Requisites.
n
For the doctrine of loss of trust and confidence to apply, the following requisites
io
must be satisfied:
(1) The employee holds a position of trust and confidence;
(2) There exists an act justifying the loss of trust and confidence, which means
ss
e
that the act that betrays the employer’s trust must be real, i.e., founded on
i
clearly established facts;
fe
ev
(3) The employee’s breach of the trust must be willful, i.e., it was done
intentionally, knowingly and purposely, without justifiable excuse; and
o
(4) The act must be in relation to his work which would render him unfit to
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perform it.
r
Pr
• Guidelines
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Ba
As a safeguard against employers who indiscriminately use “loss of trust and

confidence” to justify arbitrary dismissal of employees, the Supreme Court, in
Ba
s
addition to the above elements, came up with the following guidelines for the
application of the doctrine:
es
(1) The loss of confidence must not be simulated;

bl
(2) It should not be used as a subterfuge for causes which are illegal, improper
or unjustified;
li
(3) It may not be arbitrarily asserted in the face of overwhelming evidence to the
o
contrary; and
r
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(4) It must be genuine, not a mere afterthought, to justify earlier action taken in
Ba
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bad faith.
O
an
The foregoing guidelines have been prescribed by the Supreme Court due to the
subjective nature of this ground which makes termination based on loss of trust and
et
es
confidence prone to abuse.

h
• Some principles on the doctrine of loss of trust and confidence.

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bl
o Employee’s position must be reposed with trust and confidence.

C
o “Position of trust and confidence” is one where a person is entrusted with

confidence on delicate matters, or with the custody, handling, or care and
o
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protection of the employer’s property.

o Two (2) classes of positions of trust.
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▪ The first class consists of managerial employees or those who, by the

In
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nature of their position, are entrusted with confidential and delicate

matters and from whom greater fidelity to duty is correspondingly
expected. They refer to those vested with the powers or prerogatives to
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lay down and execute management policies and/or to hire, transfer

suspend, lay-off, recall, discharge, assign or discipline employees or to
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effectively recommend such managerial actions. Their primary duty

bl
consists of the management of the establishment in which they are

employed or of a department or a subdivision thereof.
o
▪ The second class consists of fiduciary rank-and-file employees who,

though rank-and-file, are routinely charged with the custody, handling or
R
care and protection of the employer's money or property, or entrusted

with confidence on delicate matters, and are thus classified as occupying
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positions of trust and confidence. Included under this class are “cashiers,
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Legal Practitioner
auditors, property custodians, or those who, in the normal and routine
w
exercise of their functions, regularly handle significant amounts of [the
employer’s] money or property.”
ie
o Rules on termination of managerial and supervisory employees different from
ev
those applicable to rank-and-file employees. Thus, with respect to rank-and-
file personnel, loss of trust and confidence as a ground for valid dismissal
requires proof of involvement in the alleged events in question and that mere
R
uncorroborated assertions and accusations by the employer will not be
sufficient. But as regards a managerial employee, the mere existence of a
al
basis for believing that he has breached the trust of his employer would
suffice for his dismissal.
o There must be “some basis” for the loss of trust and confidence which means
n
that there is reasonable ground to believe, if not to entertain the moral
io
conviction, that the concerned employee is responsible for the misconduct

and that the nature of his participation therein rendered him absolutely
unworthy of trust and confidence demanded by his position.
ss
o Dismissal due to feng shui mismatch is not a valid ground to lose trust and
e
confidence.
i
fe
o Command responsibility of managerial employees is a ground to dismiss.
ev
o Confidential employee may be dismissed for loss of trust and confidence.
o Grant of promotions and bonuses negates loss of trust and confidence.
o
R
o Long years of service, absence of derogatory record and small amount
r
involved are deemed inconsequential insofar as loss of trust and confidence

Pr
is concerned.
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Ba
o Dropping of criminal charges or acquittal in a criminal case arising from the

same act does not affect the validity of dismissal based on loss of trust and
Ba
s
confidence.
es
o Full restitution does not absolve employee of offense which resulted in the loss
of trust and confidence.
e
bl
(7) COMMISSION OF CRIME OR OFFENSE

li
o
• Requisites.
The following are the requisites for the valid invocation of this ground: r
n
Ba
R
1. A crime or offense was committed by the employee;

O
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2. It was committed against any of the following persons:

et
(a) His employer;

es
h
(b) Any immediate member of his employer’s family; or

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(c) His employer’s duly authorized representative.

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• Some principles on the commission of crime or offense.

o
te
o Because of its gravity, work-relation is not necessary. Neither is it necessary

R
to show that the commission of the criminal act would render the employee
In
unfit to perform his work for the employer.

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(8) OTHER ANALOGOUS CAUSES

es
h
• Analogous causes under established jurisprudence

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The following may be cited as analogous causes:

1) Violation of company rules and regulations.
o
2) Theft of property owned by a co-employee, as distinguished from theft of

property owned by the employer.
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3) Incompetence, inefficiency or ineptitude.

4) Failure to attain work quota.
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5) Failure to comply with weight standards of employer.

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6) “Attitude problem” is analogous to loss of trust and confidence.
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ie
(9) TERMINATION DUE TO ENFORCEMENT OF UNION SECURITY CLAUSE
• What is a union security clause?
ev
The “union security clause” is a stipulation in a CBA which allows the parties
R
thereto to enter into an agreement requiring compulsory membership in the sole
and exclusive bargaining agent (SEBA) which successfully negotiated said CBA as
a condition for continued employment with the exception of employees who are
al
already members of other union/s at the time of the signing of the CBA. Hence,
they cannot be compelled to resign from their minority union/s to join the SEBA.
n
• What are the effects of application of this clause?
io
The following are the effects:

a. On members of the SEBA. They are not allowed to resign or terminate their
ss
e
membership therefrom. Any member of the SEBA who resigns or is expelled
i
therefrom may be recommended to the employer by the SEBA for
fe
ev
termination of his employment.
b. On non-members of the SEBA but members of the minority union/s. They are
o
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not bound by the union security clause if they are members of the minority or
r
other unions at the time of the signing of the CBA. Hence, they cannot be
Pr
compelled to resign from their union/s in order to join the SEBA.
r
Ba
c. On non-members of the SEBA or of any minority union/s. If not a member of

Ba
the SEBA or any other unions in the bargaining unit at the time of the signing
s
of the CBA by reason of the fact that he is excepted from the coverage of the
es
bargaining unit, the employee cannot be compelled to join the SEBA. (E.g.,
e
Religious objectors and confidential employees under the Confidential

bl
Employee Rule).
d. On new employees hired after the signing of the CBA containing the union
li
security clause. They can be compelled to join the SEBA. If they refuse, they
o
can be recommended for termination by the SEBA to the employer as such r

n
Ba
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refusal is deemed a violation of this clause.

O
an
• Is there an exception to this rule?

et
Yes. An employee cannot be compelled to join any union based on religious

es
ground (Religious Objectors). For example: members of the Iglesia ni Kristo (INK)
h
cannot be compelled to join a union; hence, they are not bound by the union
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security doctrine.
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• Can religious objectors be denied membership in a union or be disallowed

o
from participating in a certification election?

te
No. Religious objectors, if they choose to, cannot be denied membership in a union
R
or prevented from participating in a certification election.

In
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• What are the requisites in order to validly terminate employees based on this
clause?
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(1) The union security clause is applicable;

h
(2) The bargaining union is requesting for the termination of employment due
C
bl
to enforcement of the union security provision in the CBA; and

(3) There is sufficient evidence to support the union’s decision to expel the
o
employee from the union. (Alabang Country Club, Inc. v. NLRC,).

R
All the foregoing requisites should be complied with to justify the termination of
employment.
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• Is the employer required to observe due process before terminating an
w
employee who is recommended by the SEBA for termination due to violation of
the union security clause?
ie
Yes, the employer should afford both substantive and procedural due process to
the employee. It cannot terminate his employment merely on the basis of the
ev
recommendation of the union.
• Can the employer adopt the due process afforded by the SEBA to the
R
employee in expelling him from his membership in the SEBA?
No. The employer cannot adopt the due process afforded by the SEBA as its own
al
due process for the simple reason that such due process concerns the termination
of membership of the employee from the SEBA. The due process in above-cited
n
Alabang Country Club, Inc. v. NLRC, is required for a different purpose - to
terminate his employment.
io
(10) OTHER PRINCIPLES ON TERMINATION Per Department Order No. 147-15,

Series Of 2015
ss
e
• An employee found positive for use of dangerous drugs shall be dealt with
i
administratively which shall be a ground for suspension or termination.
fe
ev
• An employee shall not be terminated from work based on actual, perceived or
suspected HIV status.
o
• An employee shall not be terminated on basis of actual, perceived or suspected
R
Hepatitis B status.
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Pr
• An employee who has or had tuberculosis shall not be discriminated against.
r
Ba
He/she shall be entitled to work for as long as they are certified by the company's
accredited health provider as medically fit and shall be restored to work as soon
Ba
as his/her illness is controlled.
s
• An employee may also be terminated based on the grounds provided for under
es
the CBA.
e
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2. Authorized Causes
li
• What are the 2 classes of authorized cause termination?

o
Under the Labor Code, authorized causes are classified into two (2) classes, namely: r
n
Ba
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(1) Business-related causes. – Referring to the grounds specifically mentioned in

O
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Article 298 [283], to wit:

a. Installation of labor-saving device;
et
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b. Redundancy;
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c. Retrenchment;
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d. Closure or cessation of business operations NOT due to serious business

losses or financial reverses; and
o
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e. Closure or cessation of business operations due to serious business losses and

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financial reverses.
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(2) Health-related causes. – Referring to disease covered by Article 299 [284] of

the Labor Code.
• What are the two (2) kinds of requisites in the case of business-related causes?
es
h
1. COMMON requisites applicable to all the authorized causes; and

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2. UNIQUE requisites applicable to each of the authorized causes.

• What are the COMMON REQUISITES applicable to the BUSINESS-RELATED causes
o
under Article 298 [283]?

The following are the five (5) common requisites applicable to the ALL the business-
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related causes:
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1. There is good faith in effecting the termination;

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2. The termination is a matter of last resort, there being no other option available
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to the employer after resorting to cost-cutting measures;
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3. Two (2) separate written notices are served on both the affected employees
and the DOLE at least one (1) month prior to the intended date of termination;
ev
4. Separation pay is paid to the affected employees, to wit:
(a) If based on (1) installation of labor-saving device, or (2) redundancy. -
R
One (1) month pay or at least one (1) month pay for every year of service,
whichever is higher, a fraction of at least six (6) months shall be considered
as one (1) whole year.
al
(b) If based on (1) retrenchment, or (2) closure NOT due serious business losses
or financial reverses. - One (1) month pay or at least one-half (½) month
n
pay for every year of service, whichever is higher, a fraction of at least six
io
(6) months shall be considered as one (1) whole year.

(c) If closure is due to serious business losses or financial reverses, NO
separation pay is required to be paid.
ss
e
(d) In case the CBA or company policy provides for a higher separation pay,
i
fe
the same must be followed instead of the one provided in Article 298 [283].
ev
5. Fair and reasonable criteria in ascertaining what positions are to be affected
o
by the termination, such as, but not limited to: nature of work; status of
R
employment (whether casual, temporary or regular); experience; efficiency;
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Pr
seniority; dependability; adaptability; flexibility; trainability; job performance;
r
discipline; and attitude towards work. Failure to follow fair and reasonable
Ba
criteria in selecting who to terminate would render the termination invalid.

Ba
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NOTE: SENIORITY is not the principal nor the only criterion. The other criteria
mentioned above which are lifted from jurisprudence, are of equal
es
importance.
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bl
• What are the UNIQUE REQUISITES applicable to each of the BUSINESS-RELATED

n
causes under Article 298 [283]?

li
In addition to the COMMON REQUISITES above, the following are the UNIQUE
o
REQUISITES of each of the authorized causes: r

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(1) INSTALLATION OF LABOR-SAVING DEVICE

O
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• What are the additional requisites unique to this ground?

et
es
In addition to the five (5) common requisites above, the unique requisites are as
h
follows:
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1. There must be introduction of machinery, equipment or other devices; and

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2. The purpose for such introduction must be valid such as to save on cost,
enhance efficiency and other justifiable economic reasons.
o
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(2) REDUNDANCY
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In

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The additional requisites are as follows:

1. There must be superfluous positions or services of employees;
es
h
2. The positions or services are in excess of what is reasonably demanded by

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the actual requirements of the enterprise to operate in an economical and

bl
efficient manner; and

3. There must be an adequate proof of redundancy such as but not limited to
o
the new staffing pattern, feasibility studies/proposal, on the viability of the

newly created positions, job description and the approval by the
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management of the restructuring.

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(3) RETRENCHMENT
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ie
Per latest issuance of the DOLE, the following are the additional requisites:
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1. The retrenchment must be reasonably necessary and likely to prevent business
losses;
R
2. The losses, if already incurred, are not merely de minimis, but substantial,
serious, actual and real, or if only expected, are reasonably imminent;
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3. The expected or actual losses must be proved by sufficient and convincing
evidence; and
n
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.
io
This is the only business-related cause under Article 298 [283] which requires proof
of losses or imminent losses. The other grounds of closure or cessation of business
ss
operations may be resorted to with or without losses.
i e
• What are some relevant principles on retrenchment?
fe
ev
o The fact that there has been economic or other crisis besetting a particular
sector or the country as a whole is not sufficient justification for retrenchment.
o
o The phrase “retrenchment to prevent losses” means that retrenchment may
R
be undertaken by the employer before the losses anticipated are actually
r
Pr
sustained or realized. The employer need not keep all his employees until
r
after his losses shall have materialized. Otherwise, the law could be
Ba
vulnerable to attack as undue taking of property for the benefit of another.

Ba
o Best evidence of losses - financial statements audited by independent
s
auditors (not by internal auditors).

es
o Best evidence of losses in a government-controlled corporation - financial

e
statements audited by COA.

bl
o Income tax returns, not valid since they are self-serving documents.
n
o Mere affidavit on alleged losses is not sufficient.

li
o Retrenchment effected long after the business losses is not valid.

o
o Profitable operations in the past do not affect the validity of retrenchment.

r
n
o Retrenchment due to liquidity problem is not valid.

Ba
R
o Sharp drop in income is not a ground to justify retrenchment. A mere decline

O
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in gross income cannot in any manner be considered as serious business

losses. It should be substantial, sustained and real.
et
o Litany of woes, in the absence of any solid evidence that they translated into
es
specific and substantial losses that would necessitate retrenchment, will not
h
suffice to justify retrenchment.

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o Rehiring of retrenched employees does not necessarily indicate illegality of

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retrenchment.
o In an enterprise which has several branches nationwide, profitable
o
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operations in some of them will not affect the validity of the retrenchment if
overall, the financial condition thereof reflects losses.
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(2) CLOSURE OR CESSATION OF BUSINESS OPERATIONS
• Can an employer close its business even if it is not suffering from business losses?
es
h
Yes. In fact, closure involves two (2) situations:

C
bl
(a) When NOT due to serious business losses or financial reverses; or

(b) When due to serious business losses or financial reverses
o
It is only in the first that payment of separation pay is required. No such requirement
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is imposed in the second.

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• What are some relevant principles on closure?
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o Principle of closure under Article 283 applies in cases of both total and partial
ie
closure or cessation of business operations. Management may choose to
close only a branch, a department, a plant, or a shop.
ev
o Closure of department or section and hiring of workers supplied by
independent contractor as replacements is valid.
R
o Relocation of business may amount to cessation of operations.
o Closure of business to merge or consolidate with another or to sell or dispose
al
all of its assets, held valid.
o Audited financial statements necessary only in closure due to losses.
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(3) DISEASE
io
• What are the newest doctrines on termination due to disease?

o The newest doctrines are the ones enunciated in Deoferio and Fuji on the
matter of due process as discussed below. The due process applicable to
ss
e
disease, although an authorized cause, is similar to the one applicable to just
i
cause termination and not to authorized cause termination.
fe
ev
• The DEOFERIO doctrine on the requisites
o Disease is one of the authorized causes to terminate employment. In the 2014
o
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case of Deoferio v. Intel Technology Philippines, Inc., the Supreme Court
divided into two, the requisites that must be complied with before termination
r
Pr
of employment due to disease may be justified, namely:
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Ba
(1) Substantive requisites; and

Ba
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(2) Procedural requisites.

es
o The Deoferio rule on substantive requisites.

e
The following are the three (3) substantive requisites:

bl
(1) An employee has been found to be suffering from any disease;

li
(2) His continued employment is prohibited by law or prejudicial to his health,

o
as well as to the health of his co-employees; and

r
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(3) A competent public health authority issues a medical certificate that the
disease is of such nature or at such a stage that it cannot be cured within
O
an
a period of six (6) months even with proper medical treatment.

et
o The Deoferio rule on procedural requisites.

es
Deoferio, finally pronounced the rule that the employer must furnish the
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employee two (2) written notices in terminations due to disease, namely:

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(1) The notice to apprise the employee of the ground for which his dismissal
is sought; and
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(2) The notice informing the employee of his dismissal, to be issued after the
employee has been given reasonable opportunity to answer and to be
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heard on his defense.

In
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In other words, due process in termination due to disease is similar to due process
for just cause termination but different from authorized cause termination under
Article 298 [283].
es
h
• The FUJI rule – the employee should be given the chance to present
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countervailing medical certificates.

bl
o Subsequent to Deoferio, another 2014 case, Fuji Television Network, Inc.

v. Arlene S. Espiritu, has further expounded on the due process requirement
o
in termination due to disease, this time by categorically specifying the right

of the ailing employee to present countervailing evidence in the form of
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medical certificates to prove that his dismissal due to disease is not proper
and therefore illegal.
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o Respondent Arlene was petitioner’s news correspondent/producer “tasked
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to report Philippine news to Fuji through its Manila Bureau field office.” She
was successively given yearly fixed-term employment contracts until she was
ie
diagnosed with lung cancer sometime in January 2009 when the Chief of
News Agency of Fuji informed her “that the company will have a problem
ev
renewing her contract” since it would be difficult for her to perform her job.
She, however, “insisted that she was still fit to work as certified by her
attending physician.” Subsequently, Arlene and Fuji signed a non-renewal
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contract where it was stipulated that her contract would no longer be
renewed after its expiration on May 31, 2009 and that the parties release
al
each other from liabilities and responsibilities under the employment
contract. Arlene received her unpaid salaries and bonuses but she affixed
her signature on the non-renewal contract with the initials “U.P.” for “under
n
protest.” The day after Arlene signed the non-renewal contract, she filed a
io
complaint for illegal dismissal and attorney’s fees with the Labor Arbiter,
alleging that she was forced to sign the non-renewal contract when Fuji
came to know of her illness and that Fuji withheld her salaries and other
ss
benefits for March and April 2009 when she refused to sign. Arlene claimed
e
that she was left with no other recourse but to sign the non-renewal contract,
i
fe
and it was only upon signing that she was given her salaries and bonuses, in
ev
addition to separation pay equivalent to 4 years.
o The Supreme Court declared respondent Arlene as having been
o
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constructively dismissed. It was likewise held here that respondent was not
r
afforded due process, thus:

Pr
▪ “There is no evidence showing that Arlene was accorded due process.
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Ba
After informing her employer of her lung cancer, she was not given the
chance to present medical certificates. Fuji immediately concluded that
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s
Arlene could no longer perform her duties because of chemotherapy. It

es
did not ask her how her condition would affect her work. Neither did it
suggest for her to take a leave, even though she was entitled to sick
e
leaves. Worse, it did not present any certificate from a competent public
bl
health authority. What Fuji did was to inform her that her contract would
no longer be renewed, and when she did not agree, her salary was
li
o
withheld. Thus, the Court of Appeals correctly upheld the finding of the
National Labor Relations Commission that for failure of Fuji to comply with r
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Ba
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due process, Arlene was illegally dismissed.”

O
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• What are some salient points to consider under this ground of disease?
o If the disease or ailment can be cured within the period of six (6) months with
et
proper medical treatment, the employer should not terminate the employee
es
but merely ask him to take a leave of absence. The employer should reinstate
h
him to his former position immediately upon the restoration of his normal
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health.
o In case the employee unreasonably refuses to submit to medical
examination or treatment upon being requested to do so, the employer may
o
te
terminate his services on the ground of insubordination or willful disobedience

of lawful order.
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o A medical certificate issued by a company’s own physician is not an

In
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acceptable certificate for purposes of terminating an employment based on

Article 284, it having been issued not by a “competent public health
authority,” the person referred to in the law.
es
h
o A “competent public health authority” refers to a government doctor whose

medical specialization pertains to the disease being suffered by the
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bl
employee. For instance, if the employee suffers from tuberculosis, the

medical certificate should be issued by a government-employed
pulmonologist who is competent to make an opinion thereon. If the
o
employee has cardiac symptoms, the competent physician in this case

would be a cardiologist.
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o The medical certificate should be procured by the employer and not by the
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employee.
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Legal Practitioner
3. Due Process
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a. Two-notice rule
• Preliminary clarificatory statement on due process
ie
At the outset, there is a need to point out the following distinction:
(1) Due process required to be complied with by the employer in terminating the
ev
employee’s employment (COMPANY-LEVEL DUE PROCESS); and
(2) Due process required to be observed by the labor authorities/tribunals/courts
R
(Labor Arbiter/NLRC/CA) in hearing and deciding labor cases brought
before them for adjudication and decision (COURT-LEVEL DUE PROCESS).
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No. 1 above requires compliance with both the statutory and contractual due
process as discussed below; while No. 2 above requires observance of the
constitutional due process.
n
No.1 will be focus of the discussion below.
io
• Principles regarding due process:

o Due process means compliance with BOTH STATUTORY DUE PROCESS and
ss
CONTRACTUAL DUE PROCESS.
e
o CONSTITUTIONAL DUE PROCESS is not applicable (Per Agabon doctrine).
i
fe
o Statutory due process refers to the one prescribed in the Labor Code (Article
ev
292[b] 277[b]); while contractual due process refers to the one prescribed in
the Company Rules and Regulations (Per Abbott Laboratories doctrine).
o
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o Contractual due process was enunciated in the 2013 en banc ruling in Abbott
r
Laboratories, Philippines v. Pearlie Ann F. Alcaraz. Thus, it is now required that

Pr
in addition to compliance with the statutory due process, the employer should
r
Ba
still comply with the due process procedure prescribed in its own company Ba
rules. The employer’s failure to observe its own company-prescribed due
s
process will make it liable to pay an indemnity in the form of nominal damages,
the amount of which is equivalent to the P30,000.00 awarded under the
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Agabon doctrine.
e
• Are the twin-notice requirement and hearing required in all cases of

bl
termination?
No. The two-notice requirement and hearing are required only in case of just cause
li
termination BUT NOT IN AUTHORIZED CAUSE TERMINATION (EXCEPT ON THE GROUND

o
OF DISEASE PER DEOFERIO DOCTRINE as discussed above). r

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Ba
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• What is the order in which the twin-notice requirement and hearing are
implemented by the employer?
O
an
The requirement should be implemented in the following order:

1. Service of first written notice;
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es
2. Conduct of hearing; and

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3. Service of second written notice.

rn
• What is the King of Kings Transport doctrine on just cause procedural due
bl
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process?
Based on this doctrine which was enunciated in the 2007 case of King of Kings
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Transport, Inc. v. Mamac, the following requirements should be complied with in just
te
cause termination:
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(1) First written notice.

In
The first written notice to be served on the employee should:

an
a) Contain the specific causes or grounds for termination against him;

b) Contain a directive that the employee is given the opportunity to submit
his written explanation within the reasonable period of FIVE (5) CALENDAR
es
h
DAYS from receipt of the notice:

1) to enable him to prepare adequately for his defense;
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bl
2) to study the accusation against him;

3) to consult a union official or lawyer;
4) to gather data and evidence; and
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5) to decide on the defenses he will raise against the complaint.

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c) Contain a detailed narration of the facts and circumstances that will serve
as basis for the charge against the employee. This is required in order to
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Legal Practitioner
enable him to intelligently prepare his explanation and defenses. A general
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description of the charge will not suffice.
d) Specifically mention which company rules, if any, are violated and/or
ie
which among the grounds under Article 282 is being charged against the
employee.
ev
(2) Hearing required,
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After serving the first notice, the employer should schedule and conduct a
hearing or conference wherein the employee will be given the opportunity to:
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1) explain and clarify his defenses to the charge/s against him;
2) present evidence in support of his defenses; and
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3) rebut the evidence presented against him by the management.
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During the hearing or conference, the employee is given the chance to defend
himself personally, with the assistance of a representative or counsel of his
ss
choice. Moreover, this conference or hearing could be used by the parties as
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an opportunity to come to an amicable settlement.
i
fe
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NOTE: See Lopez doctrine and Perez doctrine below
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(3) Second written notice.
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After determining that termination of employment is justified, the employer shall
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Ba
serve the employees a written notice of termination indicating that:

Ba
s
1) all circumstances involving the charge/s against the employee have

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been considered; and

2) grounds have been established to justify the severance of his
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employment.
bl
• What is the LOPEZ doctrine on right to counsel?

li
o
Per the 2011 Lopez doctrine, which is the prevailing rule, the right to counsel r
n
Ba
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is neither indispensable nor mandatory. It becomes mandatory only in two (2)

situations:
O
an
(1) When the employee himself requests for counsel; or

et
(2) When he manifests that he wants a formal hearing on the charges

es
against him, in which case, he should be assisted by counsel. (See

h
Lopez v. Alturas Group of Companies).

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• What is the PEREZ doctrine on hearing?

The 2009 Perez doctrine enunciates the new guiding principle on the hearing
o
te
requirement. It has interpreted the term “ample opportunity to be heard” as

follows:
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In
(a) “Ample opportunity to be heard” means any meaningful opportunity (verbal

an
or written) given to the employee to answer the charges against him and
submit evidence in support of his defense, whether in a hearing, conference
or some other fair, just and reasonable way.
es
h
(b) A formal hearing or conference is no longer mandatory. It becomes

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mandatory only under any of the following circumstances:

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(1) When requested by the employee in writing; or

(2) When substantial evidentiary disputes exist; or
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(3) When a company rule or practice requires it; or

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(4) When similar circumstances justify it.

(c) the “ample opportunity to be heard” standard in the Labor Code prevails
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over the “hearing or conference” requirement in its Implementing Rules and

133
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Regulations. This is how the Supreme Court resolved the conflict in the
w
following provisions of the Labor Code and its implementing rules:
ie
The Perez doctrine is now the prevailing rule as shown by a catena of cases which
cited it after its promulgation.
ev
• Are the twin-notice requirement and hearing applicable to authorized cause
termination?
R
No. Due process in authorized cause termination is deemed complied with upon
the separate and simultaneous service of a written notice of the intended
termination to both:
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(1) the employee to be terminated; and
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(2) the appropriate DOLE Regional Office, at least one (1) month before the
intended date of the termination specifying the ground/s therefor and the
io
undertaking to pay the separation pay required under Article 283 of the
Labor Code.
ss
For obvious reason, hearing is not required.
i e
However, as earlier discussed above, the foregoing due process is DIFFERENT from
fe
ev
the authorized cause of disease as held in Deoferio and Fuji which held that just
cause due process is the one that should be followed.
o
R
• Are the twin-notice requirement and hearing applicable to abandonment as a
just cause to terminate employment?
r
Pr
r
No. Although considered as a just cause to terminate employment, the procedural
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due process requirement for abandonment is different. Obviously, no hearing is

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required (since the employee has already abandoned his job) but the following
s
notices should be complied with:

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1) First notice asking the employee to explain why he should not be declared as
e
having abandoned his job; and

bl
2) Second notice informing him of the employer’s decision to dismiss him on the
li
ground of abandonment.
o
• What are the seven (7) standard situations in termination cases? r

n
Ba
R
The rules on termination of employment in the Labor Code and pertinent

O
jurisprudence are applicable to seven (7) different situations, namely:

an
1. The dismissal was for a just cause under Article 282, for an authorized cause
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under Article 283, or for health reasons under Article 284, and due process
h
was observed – This termination is LEGAL.

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2. The dismissal was without a just or authorized cause but due process was
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C
observed – This termination is ILLEGAL.

3. The dismissal was without a just or authorized cause and due process was
o
not observed – This termination is ILLEGAL.

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4. The dismissal was for a just or authorized cause but due process was not
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observed – This termination is LEGAL.

In
5. The dismissal was for a non-existent cause – This termination is ILLEGAL.

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6. The dismissal was not supported by any evidence of termination – This

termination is NEITHER LEGAL NOR ILLEGAL as there is no dismissal to speak
of. Reinstatement is ordered not as a relief for illegal dismissal but on
es
h
equitable ground.
7. The dismissal was brought about by the implementation of a law – This
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bl
termination is LEGAL.
4. Termination of Contract of Migrant Workers under RA 8042 as amended by RA
o
10022
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See discussion under Major Topic 2. Pre-Employment, Section A(5) on Termination

of Contract of Migrant Worker.
an
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D. TERMINATION OF EMPLOYMENT BY EMPLOYEE
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1. Resignation v. Constructive Dismissal
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Constructive Dismissal
• When is there constructive dismissal?
ev
Constructive dismissal contemplates any of the following situations:
1) An involuntary resignation resorted to when continued employment is
rendered impossible, unreasonable or unlikely;
R
2) A demotion in rank and/or a diminution in pay; or
3) A clear discrimination, insensibility or disdain by an employer which becomes
al
unbearable to the employee that it could foreclose any choice by him
except to forego his continued employment.
n
• What is the test of constructive dismissal?
io
The test of constructive dismissal is whether a reasonable person in the employee’s

position would have felt compelled to give up his position under the
circumstances. It is an act amounting to dismissal but made to appear as if it were
ss
e
not. In fact, the employee who is constructively dismissed may be allowed to keep
i
on coming to work. Constructive dismissal is, therefore, a DISMISSAL IN
fe
ev
DISGUISE. The law recognizes and resolves this situation in favor of the employees
in order to protect their rights and interests from the coercive acts of the employer.
o
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• What are examples of constructive dismissal or forced resignation?
r
Pr
o Denying to the workers entry to their work area and placing them on shifts
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“not by weeks but almost by month” by reducing their workweek to three
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days.
Ba
o Barring the employees from entering the premises whenever they would
s
report for work in the morning without any justifiable reason, and they were
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made to wait for a certain employee who would arrive in the office at around
e
noon, after they had waited for a long time and had left.
bl
o Sending to an employee a notice of indefinite suspension which is

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tantamount to dismissal.
li
o Imposing indefinite preventive suspension without actually conducting any

o
investigation.
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n
o Changing the employee’s status from regular to casual constitutes

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constructive dismissal.
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o Preventing the employee from reporting for work by ordering the guards not
to let her in. This is clear notice of dismissal.
et
es
• What is the distinction between illegal dismissal and constructive dismissal?

h
In illegal dismissal, the employer openly shows his intention to dismiss the employee.
rn
In fact, the employer, in compliance with due process, asks the employee to
bl
C
explain why he should not be dismissed for committing a wrongful act and he is
given due process prior to terminating him.
o
te
In contrast, in constructive dismissal, the employer will never indicate that he is

R
terminating the employee. He will even allow the employee to report to his work
In
every day. But he will do any of the three (3) acts mentioned above that indicates
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his intention to get rid of the services of the employee. This is the reason why it is
called “dismissal in disguise.”
es
h
Voluntary resignation
• Valid resignation must be unconditional and with intent to operate as such.
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bl
• In case of termination effected by the employee without just cause, the following
requisites must concur:
1. The resigning employee should tender a written (not verbal) notice of the
o
termination (commonly known as “resignation letter”);

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2. Service of such notice to the employer at least one (1) month in advance;
and
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3. Written acceptance by the employer of the resignation.

135
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Legal Practitioner
The 3rd requisite above is not expressly provided in Article 300 [285] but is given such
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character of a mandatory requirement under well-established jurisprudence.
ie
• Burden of Proof in voluntary resignation cases
o If the employer alleges the employee’s voluntary resignation as the cause of his
separation from work, the employer has the burden to prove the same.
ev
o When burden shifts to employee: In case he/she alleges that harassment, force,
threat, coercion or intimidation has attended his/her resignation, it is the
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employee who has the burden to prove the same.
Constructive Dismissal vs. Voluntary Resignation
•
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Constructive dismissal is involuntary resignation and is due to harsh, hostile, or
unfavorable conditions in his/her employment that renders his/her continued
n
employment impossible, unreasonable, or unlikely.
o Voluntary resignation, aside from being voluntary, is a formal pronouncement
io
or relinquishment of an office, accompanied by an intent to relinquish the

office and an overt act of relinquishing the same.
• Constructive dismissal is considered an illegal dismissal.
ss
e
• Voluntary resignation is a valid mode of terminating employment by the
i
employee.
fe
ev
E. PREVENTIVE SUSPENSION
o
R
• When is preventive suspension proper to be imposed?
r
Pr
r
Ba
Preventive suspension may be legally imposed against an errant employee only

while he is undergoing an investigation for certain serious offenses. Consequently,
Ba
its purpose is to prevent him from causing harm or injury to the company as well as
s
to his fellow employees, hence, his actual presence in the workplace would not be
es
desirable for the meaningful conduct of the investigation of his case. Its imposition
e
is thus justified only in cases where the employee’s continued presence in the
bl
company premises during the investigation poses a serious and imminent threat to
the life or property of the employer or of the employee’s co-workers. Without this
li
threat, preventive suspension is not proper.

o
r
n
• What are some relevant principles in preventive suspension?

Ba
R
o Preventive suspension is not a penalty. This is different from PUNITIVE

O
an
SUSPENSION which is imposed as a penalty less harsh than dismissal.

o Preventive suspension, by itself, does not signify that the company has
et
already adjudged the employee guilty of the charges for which she was
es
asked to answer and explain.

h
o Preventive suspension is neither equivalent nor tantamount to dismissal.

rn
bl
C
o If the basis of the preventive suspension is the employee’s absences and

tardiness, the imposition of preventive suspension on him is not justified as his
presence in the company premises does not pose any such serious or
o
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imminent threat to the life or property of the employer or of the employee’s

co-workers simply “by incurring repeated absences and tardiness.”
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o Preventive suspension does not mean that due process may be disregarded.
In
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o Preventive suspension should only be for a maximum period of thirty (30) days.
After the lapse of the 30-day period, the employer is required to reinstate the
worker to his former position or to a substantially equivalent position.
es
h
o During the 30-day preventive suspension, the worker is not entitled to his
wages and other benefits. However, if the employer decides, for a justifiable
C
bl
reason, to extend the period of preventive suspension beyond said 30-day

period, he is obligated to pay the wages and other benefits due the worker
during said period of extension. In such a case, the worker is not bound to
o
reimburse the amount paid to him during the extension if the employer
decides to dismiss him after the completion of the investigation.
R
o Extension of period must be justified. During the 30-day period of preventive

an
suspension, the employer is expected to conduct and finish the investigation

of the employee’s administrative case. The period of thirty (30) days may only
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Legal Practitioner
be extended if the employer failed to complete the hearing or investigation
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within said period due to justifiable grounds. No extension thereof can be
made based on whimsical, capricious or unreasonable grounds.
ie
o Preventive suspension lasting longer than 30 days, without the benefit of valid
extension, amounts to constructive dismissal.
ev
o Indefinite preventive suspension amounts to constructive dismissal.
F. RELIEFS FROM ILLEGAL DISMISSAL
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a. Reinstatement
al
The Labor Code grants the remedy of reinstatement in various forms and situations.
Its provisions recognizing reinstatement as a relief are as follows:
n
1. Article 229 [223] which provides for reinstatement of an employee whose
io
dismissal is declared illegal by the Labor Arbiter. This form of reinstatement is self-
executory and must be implemented even during the pendency of the appeal
that may be instituted by the employer.
ss
i e
2. Article 278(g) [263(g)] which provides for automatic return to work of all striking
fe
ev
or locked-out employees, if a strike or lockout has already taken place, upon
the issuance by the DOLE Secretary of an assumption or certification order in
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national interest cases. The employer is required to immediately resume
R
operation and readmit all workers under the same terms and conditions
r
Pr
prevailing before the strike or lockout.
r
Ba
3. Article 292(b) [277(b)] which empowers the DOLE Secretary to suspend the
effects of termination pending the resolution of the termination dispute in the
Ba
event of a prima facie finding by the appropriate official of the DOLE before
s
whom such dispute is pending that the termination may cause a serious labor
es
dispute or is in implementation of a mass lay-off. Such suspension of the effects

e
of termination would necessarily results in the reinstatement of the dismissed

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employee while the illegal dismissal case is being heard and litigated.
li
4. Article 294 [279] which grants reinstatement as a relief to an employee whose

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dismissal is declared illegal in a final and executory judgment.

r
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5. Article 301 [286] which involves bona-fide suspension of operation for a period
O
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not exceeding six (6) months or the rendition by an employee of military or civic
duty. It is required under this provision that the employer should reinstate its
et
employees upon resumption of its operation which should be done before the
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lapse of said six-month period of bona-fide suspension of operation or after the

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rendition by the employees of military or civic duty.

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b. Backwages
o
te
• What is the Bustamante doctrine?

In 1996, the Supreme Court changed the rule on the reckoning of backwages.
R
It announced a new doctrine in the case of Bustamante v. NLRC, which is now

In
known as the Bustamante doctrine. Under this rule, the term “full backwages”
an
should mean exactly that, i.e., without deducting from backwages the earnings
derived elsewhere by the concerned employee during the period of his illegal
dismissal.
es
h
• What are the components of backwages?

C
bl
The components of backwages are as follows:

1. Salaries or wages computed on the basis of the wage rate level at the time of
the illegal dismissal and not in accordance with the latest, current wage level
o
of the employee’s position.

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2. Allowances and other benefits regularly granted to and received by the

employee should be made part of backwages.
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Legal Practitioner
• What are some principles on backwages?
w
o Salary increases during period of unemployment are not included as
component in the computation of backwages.
ie
o Dismissed employee’s ability to earn is irrelevant in the award of backwages.
o In case reinstatement is ordered, full backwages should be reckoned from
ev
the time the compensation was withheld (which, as a rule, is from the time
of illegal dismissal) up to the time of reinstatement, whether actual or in the
payroll.
R
o If separation pay is ordered in lieu of reinstatement, full backwages should
be computed from the time of illegal dismissal until the finality of the
al
decision. The justification is that along with the finality of the Supreme Court’s
decision, the issue on the illegality of the dismissal is finally laid to rest.
o If the illegally dismissed employee has reached the optional retirement age
n
of 60 years, his backwages should only cover the time when he was illegally
io
dismissed up to the time when he reached 60 years. Under Article 287, 60

years is the optional retirement age.
o If the employee has reached 65 years of age or beyond, his full backwages
ss
should be computed only up to said age. The contention of the employer
e
that backwages should be reckoned only up to age 60 cannot be sustained.
i
fe
o If employer has already ceased operations, full backwages should be
ev
computed only up to the date of the closure. To allow the computation of
the backwages to be based on a period beyond that would be an injustice
o
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to the employer.
r
o Any amount received during payroll reinstatement is deductible from

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backwages.
r
Ba
• When is the award of backwages limited?

Ba
s
(1) When the dismissal is deemed too harsh a penalty;

es
(2) When the employer acted in good faith; or

(3) Where there is no evidence that the employer dismissed the employee.
e
bl
Thus, the backwages will not be granted in full but limited to 1 year, 2 years or 5
years [per jurisprudence].
li
o
c. Separation pay, doctrine of strained relations

r
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• Is separation pay applicable only to reinstatement as an alternative remedy?

Ba
R
Yes. Separation pay, as a substitute remedy, is only proper for reinstatement but
O
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not for backwages.

et
This remedy is not found in the Labor Code but is granted in case reinstatement is
es
no longer possible or feasible, such as when any of the following circumstances

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exists:
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(1) Where the continued relationship between the employer and the employee
is no longer viable due to the strained relations and antagonism between
o
them (Doctrine of Strained Relations).

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(2) When reinstatement proves impossible, impracticable, not feasible or

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unwarranted for varied reasons and thus hardly in the best interest of the
In
parties such as:

an
(a) Where the employee has already been replaced permanently as when
his position has already been taken over by a regular employee and there
is no substantially equivalent position to which he may be reinstated.
es
h
(b) Where the dismissed employee’s position is no longer available at the time
of reinstatement for reasons not attributable to the fault of the employer.
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(c) When there has been long lapse or passage of time that the employee
was out of employer’s employ from the date of the dismissal to the final
resolution of the case or because of the realities of the situation.
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(d) By reason of the injury suffered by the employee.

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(e) The employee has already reached retirement age under a Retirement
Plan.
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Legal Practitioner
(f) When the illegally dismissed employees are over-age or beyond the
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compulsory retirement age and their reinstatement would unjustly
prejudice their employer.
ie
(3) Where the employee decides not to be reinstated as when he does not pray
for reinstatement in his complaint or position paper but asked for separation
ev
pay instead.
(4) When reinstatement is rendered moot and academic due to supervening
events, such as:
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(a) Death of the illegally dismissed employee.
(b) Declaration of insolvency of the employer by the court.
al
(c) Fire which gutted the employer’s establishment and resulted in its total
destruction.
(d) In case the establishment where the employee is to be reinstated has
n
closed or ceased operations.
io
(5) To prevent further delay in the execution of the decision to the prejudice of
private respondent.
(6) Other circumstances such as (a) when reinstatement is inimical to the
ss
employer’s interest; (b) reinstatement does not serve the best interests of the
e
parties involved; (c) the employer is prejudiced by the workers’ continued
i
fe
employment; or (d) that it will not serve any prudent purpose as when
ev
supervening facts transpired which made execution unjust or inequitable.
o
R
• What is the amount of separation pay in lieu of reinstatement?
r
Pr
Per prevailing jurisprudence, the following are the components of separation pay in
r
Ba
lieu of reinstatement
(1) The amount equivalent to at least one (1) month salary or to one (1) month
Ba
s
salary for every year of service, whichever is higher, a fraction of at least six
es
(6) months being considered as one (1) whole year.

(2) Allowances that the employee has been receiving on a regular basis.
e
• What is the period covered?

bl
From start of employment up to the date of finality of decision except when the
employer has ceased its operation earlier, in which case, the same should be
li
o
computed up to the date of closure.

• What is the salary rate to be used in computing it? r
n
Ba
R
The salary rate prevailing at the end of the period of putative service should be the
basis for computation which refers to the period of imputed service for which the
O
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employee is entitled to backwages.

• What are some important principles on separation pay in lieu of reinstatement?
et
es
1. Award of separation pay and backwages are not inconsistent with each
h
other. Hence, both may be awarded to an illegally dismissed employee. The

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payment of separation pay is in addition to payment of backwages.

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2. Reinstatement cannot be granted when what is prayed for by employee is

separation pay in lieu thereof.
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d. Damages
e. Attorneys’ fees
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• What are the other reliefs that are not provided in the Labor Code but are granted
In
an
in illegal dismissal cases?

The following reliefs that are awarded in illegal dismissal cases are missing in Article
279:
es
h
(1) Award of separation pay in lieu of reinstatement.

(2) Award of penalty in the form of nominal damages in case of termination due
C
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to just or authorized cause but without observance of procedural due

process.
(3) Reliefs to illegally dismissed employee whose employment is for a fixed
o
period. The proper relief is only the payment of the employee’s salaries
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corresponding to the unexpired portion of the employment contract.

(4) Award of damages and attorney’s fees.
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Legal Practitioner
(5) Award of financial assistance in cases where the employee’s dismissal is
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declared legal but because of long years of service, and other
considerations, financial assistance is awarded.
ie
(6) Imposition of legal interest on separation pay, backwages and other
monetary awards.
ev
f. Liabilities of corporate officers
• Who are considered officers?
R
o Article 219(e) [212(e)] of the Labor Code defines “employer” as including any
person acting in the interest of an employer, directly or indirectly. The term shall
not include any labor organization or any of its officers or agents except when
al
acting as employer
o Thus, a person involved in a case or controversy, whether he be a director,
n
trustee, corporate officer or merely a responsible employee, may rightfully be
considered as being embraced in the term “employer.”
io
o As a general rule, only the juridical employer, whether it be a corporation,

partnership, association or any other entity which may be held liable for
monetary claims of employees or for all the consequences of the illegality of
ss
e
their dismissal or for other wrongful acts. Directors, trustees or officers cannot be
i
held liable.
fe
ev
g. Burden of proof
o
• Burden of Proof in Illegal Dismissal Cases
R
o Generally, the burden rests on the employer to prove that the dismissal of an
r
Pr
employee is for a just or authorized cause (Article 292(b) [277(b)] of the Labor
r
Ba
Code).
o When burden of proof is on the employee: While it is the recognized rule in illegal
Ba
dismissal cases that the employer bears the burden of proving that the
s
termination was for a valid or authorized cause, this rule does not apply if the
es
facts and the evidence do not establish a prima facie case that the employee
e
was dismissed from employment. Before the employer must bear the burden of
bl
proving that the dismissal was legal, the employee must first establish by
substantial evidence the fact of his dismissal from service.
li
• Quantum of Evidence: Substantial Evidence

o
o Section 5, Rule 133 of the Rules of Court provides that “in cases filed before
r
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administrative or quasi-judicial bodies, a fact may be deemed established if it is

Ba
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supported by substantial evidence, or that amount of relevant evidence which

O
an
a reasonable mind might accept as adequate to justify a conclusion.”

o Substantial evidence is defined as Evidence that a reasonable mind might
et
accept as adequate to support a conclusion. (China City Restaurant v. NLRC,

es
G.R. No. 97196, Jan. 22, 1993, 217 SCRA 451.) It does not necessarily import
h
preponderant evidence, as is required in an ordinary civil case. It has been

rn
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defined to be such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion.( Spouses Giron v. Obiacoro, CV-331l5, Sept.
28,1994)
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G. RETIREMENT
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• Who are covered?

In
The following employees are eligible to avail of retirement benefits under Article 302
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[287] of the Labor Code:

1) All employees in the private sector, regardless of their position, designation or
status and irrespective of the method by which their wages are paid;
es
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2) Part-time employees;
3) Employees of service and other job contractors;
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4) Domestic workers/kasambahays or persons in the personal service of another;

5) Underground mine workers;
6) Employees of government-owned and/or controlled corporations organized
o
under the Corporation Code (without original charters).

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Legal Practitioner
• Who are excluded?
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Article 302 [287], as amended, does not apply to the following employees:
ie
1. Employees of the national government and its political subdivisions, including
government-owned and/or controlled corporations, if they are covered by the
ev
Civil Service Law and its regulations.
2. Employees of retail, service and agricultural establishments or operations
regularly employing not more than ten (10) employees. These terms are defined
R
as follows:
a) “Retail establishment” is one principally engaged in the sale of goods to end-
al
users for personal or household use. It shall lose its retail character qualified
for exemption if it is engaged in both retail and wholesale of goods.
b) “Service establishment” is one principally engaged in the sale of service to
n
individuals for their own or household use and is generally recognized as
io
such.
c) “Agricultural establishment/operation” refers to an employer which is
engaged in agriculture. This term refers to all farming activities in all
ss
branches and includes, among others, the cultivation and tillage of soil,
e
production, cultivation, growing and harvesting of any agricultural or
i
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horticultural commodities, dairying, raising of livestock or poultry, the culture
ev
of fish and other aquatic products in farms or ponds, and any activities
performed by a farmer or on a farm as an incident to, or in conjunction with,
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such farming operations, but does not include the manufacture and/or
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processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other

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farm products.
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Ba
• What are the two (2) types of retirement under the law (Article 302 [287] of the
Ba
Labor Code)?
s
(1) Optional retirement upon reaching the age of sixty (60) years.
es
(2) Compulsory retirement upon reaching the age of sixty-five (65) years.
e
bl
It is the employee who exercises the option under No. 1 above. At age 65, there is
no more option of the employee to speak of. He has to retire as this age is
li
considered compulsory retirement age.

o
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• May a different retirement age requirement be provided in a Retirement Plan?

Ba
R
The optional and compulsory retirement schemes provided under Article 302 [287]
O
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come into play only in the absence of a retirement plan or agreement setting forth
other forms of optional or compulsory retirement schemes. Thus, if there is a
et
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retirement plan or agreement in an establishment providing for an earlier or older

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age of retirement (but not beyond 65 which has been declared the compulsory
rn
retirement age), the same shall be controlling.

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• What are the rules on retirement at an earlier age?

o To be valid, retirement at an earlier age must be voluntarily consented to by
o
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the employee.
- In Alpha Jaculbe v. Silliman University, the Supreme Court ruled that in order
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for retirement at an earlier age to be valid, it must be shown that the

In
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employee’s participation in the plan is voluntary. An employer is free to

impose a retirement age of less than 65 for as long as it has the employees’
consent. Stated conversely, employees are free to accept the employer’s
es
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offer to lower the retirement age if they feel they can get a better deal with
the retirement plan presented by the employer.
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- Following Jaculbe, the retirement of petitioner in Lourdes Cercado v.

bl
Uniprom, Inc. at the age of 47, after having served respondent company for
22 years, pursuant to its Employees’ Non-Contributory Retirement Plan, which
o
provides that employees who have rendered at least 20 years of service may
be retired at the option of the company, was declared illegal because it
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was not shown that she has given her consent thereto. Not even an iota of
voluntary acquiescence to respondent’s early retirement age option is
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attributable to petitioner. The assailed retirement plan was not embodied in

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a CBA or in any employment contract or agreement assented to by
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petitioner and her co-employees. On the contrary, it was unilaterally and
compulsorily imposed on them.
ie
- The same holding was made in the 2018 en banc case of Alfredo F. Laya, Jr.
v. Philippine Veterans Bank, where petitioner, who was hired by respondent
ev
bank as its Chief Legal Counsel with a rank of Vice President, was
compulsorily retired under the following retirement policy of the bank:
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“Section 2. Early Retirement. A Member may, with the approval of the
Board of Directors, retire early on the first day of any month coincident
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with or following his attainment of age 50 and completion of at least 10
years of Credited Service.”
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According to petitioner Laya, he was made aware of the retirement plan of
respondent bank only after he had long been employed and was shown a
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photocopy of the Retirement Plan Rules and Regulations. His letter of

appointment mentioned, among others, his “Membership in the Provident
Fund Program/Retirement Program” but the Court considered the mere
ss
e
mention thereof not sufficient to inform him of the contents or details of the
i
retirement program. To construe from the petitioner's acceptance of his
fe
ev
appointment that he had acquiesced to be retired earlier than the
compulsory age of 65 years would, therefore, not be warranted. This is
o
because retirement should be the result of the bilateral act of both the
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employer and the employee based on their voluntary agreement that the
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Pr
employee agrees to sever his employment upon reaching a certain age.
r
Ba
That the petitioner might be well aware of the existence of the retirement
program at the time of his engagement did not suffice. His implied
Ba
s
knowledge, regardless of duration, did not equate to the voluntary

acceptance required by law in granting an early retirement age option to
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the employee. The law demanded more than a passive acquiescence on

e
the part of the employee, considering that his early retirement age option
bl
involved conceding the constitutional right to security of tenure.

li
Having thus automatically become a member of the retirement plan

o
through his acceptance of employment as Chief Legal Officer of

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respondent bank, the petitioner could not withdraw from the plan except
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upon his termination from employment.

O
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Further, the retirement plan, having been established for respondent

bank and approved by its president more than five years prior to petitioner's
et
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employment, was in the nature of a contract of adhesion, in respect to

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which the petitioner was reduced to mere submission by accepting his

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employment, and automatically became a member of the plan. With the

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plan being a contract of adhesion, to consider him to have voluntarily and

freely given his consent to the terms thereof as to warrant his being
o
compulsorily retired at the age of 60 years is factually unwarranted.

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To stress, company retirement plans must not only comply with the
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standards set by the prevailing labor laws but must also be accepted by
In
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the employees as commensurate to their faithful services to the employer

within the requisite period. Although the employer could be free to impose
a retirement age lower than 65 years for as long its employees consented,
es
h
the retirement of the employee whose intent to retire was not clearly
established, or whose retirement was involuntary is to be treated as a
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discharge.
bl
- In another 2018 case, Manila Hotel Corporation v. Rosita De Leon, the same
ruling was made that an employee, in this case a managerial employee,
o
cannot be compulsorily retired at an earlier age without her express assent

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thereto. In this case, respondent was retired under the retirement provision
of the rank-and-file CBA which provides that an employee's retirement is
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compulsory when he or she reaches the age of 60 or has rendered 20 years

142
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of service, whichever comes first. Respondent was only 57 at the time she
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was compulsorily retired but had already rendered 34 years of service as
Assistant Credit and Collection Manager/Acting General Cashier. Besides
ie
holding that as managerial employee, she is not covered by the CBA, the
Court noted that there was nothing in petitioner hotel’s submissions showing
ev
that respondent had assented to be covered by the CBA's retirement
provisions. Thus, in the absence of an agreement to the contrary,
managerial employees cannot be allowed to share in the concessions
R
obtained by the labor union through collective negotiation.
- Moreover, the rulings in Laya and Cercado were invoked in holding that
al
respondent De Leon was in effect, illegally dismissed. All told, an employee
in the private sector who did not expressly agree to an early retirement
cannot be retired from the service before he reaches the age of 65 years.
n
"Acceptance by the employee of an early retirement age option must be
io
explicit, voluntary, free and uncompelled." "The law demanded more than
a passive acquiescence on the part of the employee, considering that his
early retirement age option involved conceding the constitutional right to
ss
security of tenure."
i e
fe
o Retiring at an earlier age will amount to illegal dismissal if employee did not
ev
consent thereto.
- In accordance with Jaculbe, Cercado, Laya and De Leon, the employee’s
o
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retirement at an earlier age based solely on a provision of a retirement plan
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which was not freely assented to by him would be tantamount to illegal

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dismissal.
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Ba
o By mutual agreement, employers may be granted the sole and exclusive

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s
prerogative to retire employees at an earlier age or after rendering a certain

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period of service.
- Cainta Catholic School v. Cainta Catholic School Employees Union
e
[CCSEU], where the Supreme Court upheld the exercise by the school of its
bl
option to retire employees pursuant to the existing CBA where it is provided

that the school has the option to retire an employee upon reaching the age
li
o
limit of sixty (60) or after having rendered at least twenty (20) years of
service to the school, the last three (3) years of which must be continuous. r
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Ba
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Hence, the termination of employment of the employees, arising as it did

from an exercise of a management prerogative granted by the mutually-
O
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negotiated CBA between the school and the union is valid.

et
• What is the minimum years of service required for entitlement under the law?
es
h
Five (5) years is the minimum years of service that must be rendered by the
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employee before he can avail of the retirement benefits upon reaching optional
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or compulsory retirement age under Article 287.

o
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• What is the retirement age of underground mine workers?

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The rule is different. The optional retirement age of underground mine workers is 50
In
years of age; while the compulsory retirement age is 60 years old

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• What is the minimum number of years of service required of underground mine

workers?
es
h
Minimum years of service is also 5 years.

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• Are the retirement benefits of underground mine workers similar to ordinary

retirees?
o
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Yes. In fact, other than the retirement age, all other requirements as well as benefits
provided in the law are applicable to underground mine workers.
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AMOUNT OF RETIREMENT PAY
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• What is the amount of retirement pay under the law?
ie
o One-half (½) month salary.
In the absence of a retirement plan or agreement providing for retirement benefits
of employees in the establishment, an employee, upon reaching the optional or
ev
compulsory retirement age specified in Article 287, shall be entitled to retirement
pay equivalent to at least one-half (½) month salary for every year of service, a
R
fraction of at least six (6) months being considered as one (1) whole year.
o Components of one-half (½) month salary.
For purposes of determining the minimum retirement pay due an employee under
al
Article 287, the term “one-half month salary” shall include all of the following:
(1) Fifteen (15) days salary of the employee based on his latest salary rate.
n
(2) The cash equivalent of five (5) days of service incentive leave;
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(3) One-twelfth (1/12) of the 13th month pay due the employee; and
(4) All other benefits that the employer and employee may agree upon that
should be included in the computation of the employee’s retirement pay.
ss
e
o “One-half (½) month salary” means 22.5 days.
i
“One-half [½] month salary” is equivalent to “22.5 days” arrived at after adding
fe
ev
15 days plus 2.5 days representing one-twelfth [1/12] of the 13th month pay plus
5 days of service incentive leave.
o
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• What are some principles on retirement benefits?
r
1/12 of 13th month pay and 5 days of service incentive leave (SIL) should not be
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included if the employee was not entitled to 13th month pay and SIL during his
r
Ba
employment. Ba
o Example: R & E Transport, Inc. v. Latag, where it was held that employees who
s
are not entitled to 13th month pay and SIL pay while still working should not be
paid the entire “22.5 days” but only the fifteen (15) days salary. In other words,
es
the additional 2.5 days representing one-twelfth [1/12] of the 13th month pay
e
and the five (5) days of SIL should not be included as part of the retirement
bl
benefits.
li
The employee in this case was a taxi driver who was being paid on the
o
“boundary” system basis. It was undisputed that he was entitled to retirement r

n
Ba
R
benefits after working for fourteen (14) years with R & E Transport, Inc. However,
he was not entitled to the 13th month pay since Section 3 of the Rules and
O
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Regulations Implementing P.D. No. 851 exempts from its coverage employers
of those who are paid on purely boundary basis. He was also not entitled to
et
es
the 5-day service incentive leave pay pursuant to the Rules to Implement the
h
Labor Code which expressly excepts field personnel and other employees
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whose performance is unsupervised by the employer.

bl
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o But in the 2010 case of Serrano v. Severino Santos Transit, which involves a bus
conductor (petitioner) who worked for 14 years for respondent bus company
o
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which did not adopt any retirement scheme. It was held herein that even if
petitioner as bus conductor was paid on commission basis, he falls within the
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coverage of R.A. 7641 (Retirement Pay Law, now Article 287 of Labor
In
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Code). This means that his retirement pay should include the cash equivalent
of the 5-day SIL and 1/12 of the 13th month pay for a total of 22.5 days. The
affirmance by the Court of Appeals of the reliance by the NLRC on R & E
es
h
Transport case was held erroneous. For purposes of applying the law on SIL as
well as on retirement, there is a difference between drivers paid under the
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“boundary system” and conductors paid on commission basis. This is so

bl
because in practice, taxi drivers do not receive fixed wages. They retain only
those sums in excess of the “boundary” or fee they pay to the owners or
o
operators of the vehicles. Conductors, on the other hand, are paid a certain
percentage of the bus’ earnings for the day. It bears emphasis that under P.D.
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No. 851 and the SIL Law, the exclusion from its coverage of workers who are
paid on a purely commission basis is only with respect to field personnel.
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RETIREMENT BENEFITS OF WORKERS PAID BY RESULTS
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• What are the retirement benefits of workers paid by results?
ie
For covered workers who are paid by results and do not have a fixed monthly rate,
the basis for the determination of the salary for fifteen (15) days shall be their
average daily salary (ADS). The ADS is the average salary for the last twelve (12)
ev
months reckoned from the date of their retirement, divided by the number of actual
working days in that particular period.
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RETIREMENT BENEFITS OF PART-TIME WORKERS
• How should the retirement benefits of part-time workers be computed?
al
Applying the principles under Article 287, as amended, the components of
retirement benefits of part-time workers may also be computed at least in
n
proportion to the salary and related benefits due them.
io
ENTITLEMENT OF EMPLOYEES DISMISSED FOR JUST CAUSE TO RETIREMENT BENEFITS

• General rule – Entitled because employee has acquired vested right over the
retirement benefits.
ss
e
Razon, Jr. v. NLRC, May 7, 1990.
i
• Exception - Where just cause termination is cited in the retirement plan as reason
fe
ev
to validly deny claim for retirement benefits.
• San Miguel Corporation v. Lao, July 11, 2002.
o
Here, the company’s retirement plan prohibits the award of retirement benefits
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to an employee dismissed for just cause, a proscription that binds the parties to
r
Pr
it.
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Ba
RETIREMENT BENEFITS VS. SEPARATION PAY

Ba
s
• When both retirement pay and separation pay must be paid.

es
o Aquino v. NLRC, Feb. 11, 1992.

e
In this case, the Supreme Court ordered the payment to the retrenched employees
bl
of both the separation pay for retrenchment embodied in the CBA as well as the
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retirement pay provided under a separate Retirement Plan. The reason is that these
li
two are not mutually exclusive. There is nothing in the CBA nor in the Retirement
o
Plan that states that an employee who had received separation pay would no
r
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longer be entitled to retirement benefits or that collection of retirement benefits was

Ba
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prohibited if the employee had already received separation pay

O
an
• When separation pay may be charged to retirement pay.

o Ford Philippines Salaried Employees Association v. NLRC, Dec. 11, 1987.
et
It is provided in the retirement plan that the retirement, death and disability benefits
es
paid in the plan are considered integrated with and in lieu of termination benefits
h
under the Labor Code, thus, the retirement fund may be validly used to pay such
rn
bl
termination or separation pay because of closure of business.

C
• When employees are entitled to only one form of benefit.

o Cipriano v. San Miguel Corporation, Aug. 21, 1968.
o
te
The retirement plan provides that the employee shall be entitled to either the
retirement benefit provided therein or the separation pay provided by law,
R
whichever is higher, the employee cannot be entitled to both benefits.

In
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Retirement pay under the labor code or retirement plan is separate and distinct from
the retirement pay under the SSS, GSIS and Pag-IBIG.
es
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------------oOo------------
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MAJOR TOPIC 5
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JURISDICTION AND RELIEFS
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General Table of Jurisdiction
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NLRC BLR DOLE VA NCMB
Supreme Court
Rule 45
alSupreme Court
Rule 45
Supreme Court
Rule 45
Supreme Court
Rule 45
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Court of Court of Court of Court of
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Appeals Appeals Appeals Appeals

Rule 65 Rule 65 Rule 65 Rule 43
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Motion for Motion for Motion for Motion for
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Reconsideratio Reconsideratio Reconsideratio Reconsideratio
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Appeal to Appeal to Appeal to Automatic No appeal
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Elevation to or certiorari
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NLRC BLR Director DOLE Secretary

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(NCMB is
Voluntary
r
Ba
not a
Arbitrator
quasi-
Ba
judicial
s
body)
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Med-Arbiter DOLE Director Grievance `NCMB

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(or Med- Machinery Conciliator

Labor Arbiter (or DOLE
Arbiter)3 -Mediator
Regional
li
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Director) 2
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A. LABOR ARBITER
et
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1. Jurisdiction of Labor Arbiter v. Jurisdiction of Regional Director

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• Labor arbiters have no jurisdiction over small money claims lodged under
Article 129.
o
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As earlier emphasized, under Article 129 of the Labor Code, DOLE Regional Directors
have jurisdiction over claims amounting to ₱5,000 or below, provided the following
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requisites concur:
In
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1. The claim must arise from employer-employee relationship;

2. The claimant does not seek reinstatement; and
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3. The aggregate money claim of each employee does not exceed ₱5,000.00.
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o
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2 Refers to appeals from decisions of DOLE Regional Directors in certain cases which should be made to the BLR Director and not to the
DOLE Secretary.
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3 Refers to appeals from decisions of Med-Arbiters in certification election cases which should be made to the DOLE Secretary and not
to the BLR Director.

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• In INSPECTION OF ESTABLISHMENT CASES under Article 128 (Visitorial And
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Enforcement Power), the DOLE REGIONAL DIRECTORS have jurisdiction regardless
of whether or not the total amount of claims per employee exceeds ₱5,000.00.
ie
o Requisites
ev
For the valid exercise by the DOLE Secretary or any of his duly authorized
representatives (DOLE Regional Directors) of the visitorial and enforcement
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powers provided under Article 128(b), the following requisites should concur:
(1) The employer-employee relationship should still exist;
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(2) The findings in question were made in the course of inspection by labor
inspectors; and
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(3) The employees have not yet initiated any claim or complaint with the DOLE
Regional Director under Article 129, or the Labor Arbiter under Article 217.
io
• However, jurisdiction over contested cases under the exception clause in Article
128(b) of the Labor Code involving inspection of establishments belongs to the
ss
Labor Arbiters and not to DOLE Regional Directors.
i e
fe
o Relation of paragraph (b) of Article 128 to the jurisdiction of Labor Arbiters
ev
The Labor Arbiters have jurisdiction over contested cases under the exception
o
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clause in Article 128(b), which states: “xxx. The Secretary or his duly authorized
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representatives shall issue writs of execution to the appropriate authority for the
Pr
enforcement of their orders, except in cases where the employer contests the
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Ba
findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of
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s
inspection.”
es
In interpreting the afore-quoted provision of the exception clause, three (3) elements
e
must concur to divest the Regional Directors or their representatives of jurisdiction

bl
thereunder, to wit:
li
(a) That the employer contests the findings of the labor regulations officer and
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raises issues thereon;

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(b) That in order to resolve such issues, there is a need to examine evidentiary
matters; and
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(c) That such matters are not verifiable in the normal course of inspection.
et
es
The 2009 case of Meteoro v. Creative Creatures, Inc., best illustrates the application
h
of the exception clause. Here, it was held that the Court of Appeals aptly applied
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the “exception clause” because at the earliest opportunity, respondent company

bl
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registered its objection to the findings of the labor inspector on the ground that there
was no employer-employee relationship between petitioners and respondent
o
company. The labor inspector, in fact, noted in his report that “respondent alleged
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that petitioners were contractual workers and/or independent and talent workers
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without control or supervision and also supplied with tools and apparatus pertaining
In
to their job.” In its position paper, respondent again insisted that petitioners were
an
not its employees. It then questioned the Regional Director’s jurisdiction to entertain
the matter before it, primarily because of the absence of an employer-employee
relationship. Finally, it raised the same arguments before the Secretary of Labor and
es
h
the appellate court. It is, therefore, clear that respondent contested and continues
to contest the findings and conclusions of the labor inspector. To resolve the issue
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raised by respondent, that is, the existence of an employer-employee relationship,

there is a need to examine evidentiary matters.
o
2. Requisites to Perfect an Appeal with the NLRC.

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I.
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APPEAL IN GENERAL
ie
• Appeal, meaning and nature.
The term “appeal” refers to the elevation by an aggrieved party to an agency
ev
vested with appellate authority of any decision, resolution or order disposing the
principal issues of a case rendered by an agency vested with original jurisdiction,
undertaken by filing a memorandum of appeal.
R
• Some principles on appeal.
o Appeals under Article 223 apply only to appeals from the Labor Arbiter’s
al
decisions, awards or orders to the Commission (NLRC).
o There is no appeal from the decisions, orders or awards of the NLRC. Clearly,
therefore, Article 223 of the Labor Code is not the proper basis for elevating the
n
case to the Court of Appeals or to the Supreme Court. The proper remedy from
io
the decisions, awards or orders of the NLRC to the Court of Appeals is a Rule 65
petition for certiorari and from the Court of Appeals to the Supreme Court, a
Rule 45 petition for review on certiorari.
ss
• Appeal from the NLRC to the DOLE Secretary and to the President had long been
e
abolished.
i
fe
o Appeal is not a constitutional right but a mere statutory privilege. Hence, parties
ev
who seek to avail of it must comply with the statutes or rules allowing it.
o A motion for reconsideration is unavailing as a remedy against a decision of the
o
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Labor Arbiter. The Labor Arbiter should treat the said motion as an appeal to
r
the NLRC.
Pr
o A “Petition for Relief” should be treated as appeal.
r
Ba
o Affirmative relief is not available to a party who failed to appeal. A party who
does not appeal from a decision of a court cannot obtain affirmative relief
Ba
s
other than the ones granted in the appealed decision.

• Grounds for appeal to the Commission (NLRC)
es
The appeal to the NLRC may be entertained only on any of the following grounds:
e
bl
a. If there is a prima facie evidence of abuse of discretion on the part of the

Labor Arbiter;
li
b. If the decision, order or award was secured through fraud or coercion,

o
including graft and corruption;

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c. If made purely on questions of law; and/or

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d. If serious errors in the findings of fact are raised which, if not corrected, would
O
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cause grave or irreparable damage or injury to the appellant.

• NLRC has certiorari power.
et
es
h
The first ground above regarding prima facie evidence of abuse of discretion on the
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part of the Labor Arbiter is actually an exercise of certiorari power by the NLRC. The
bl
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case of Triad Security & Allied Services, Inc. v. Ortega, expressly recognized this
certiorari power of the NLRC. Clearly, according to the 2012 case of Auza, Jr. v. MOL
o
Philippines, Inc., the NLRC is possessed of the power to rectify any abuse of discretion
te
committed by the Labor Arbiter.

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II.
In
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PERFECTION OF APPEAL
• Effect of perfection of appeal on execution
es
h
To reiterate, the perfection of an appeal shall stay the execution of the decision of
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the Labor Arbiter except execution for reinstatement pending appeal.

bl
• Perfection of appeal, mandatory and jurisdictional

o
The perfection of appeal within the period and in the manner prescribed by law is
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jurisdictional and non-compliance with the legal requirements is fatal and has the
effect of rendering the judgment final and executory, hence, unappealable.
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148
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Legal Practitioner
• Requisites.
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The requisites for perfection of appeal to the NLRC are as follows:
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(1) Observance of the reglementary period;
(2) Payment of appeal and legal research fee;
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(3) Filing of a Memorandum of Appeal;
(4) Proof of service to the other party; and
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(5) Posting of cash, property or surety bond, in case of monetary awards.
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The foregoing are discussed below.
III.
n
REGLEMENTARY PERIOD
io
• Three (3) kinds of reglementary period.

The reglementary period depends on where the appeal comes from, viz.:
ss
1. Ten (10) calendar days – in the case of appeals from decisions of the Labor
e
Arbiters under Article 223 of the Labor Code;
i
fe
2. Five (5) calendar days – in the case of appeals from decisions of the Labor
ev
Arbiters in contempt cases; and
3. Five (5) calendar days – in the case of appeals from decisions of the DOLE
o
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Regional Director under Article 129 of the Labor
Code.
r
Pr
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• Calendar days and not working days.
Ba
The shortened period of ten (10) days fixed by Article 223 contemplates calendar
Ba
days and not working days. The same holds true in the case of the 5-day
s
reglementary period under Article 129 of the Labor Code. Consequently, Saturdays,
es
Sundays and legal holidays are included in reckoning and computing the
e
reglementary period.
• Exceptions to the 10-calendar day or 5-calendar day reglementary period rule.
bl
The following are the specific instances where the rules on the reckoning of the
li
reglementary period have not been strictly observed:

o
1) 10th day (or 5th day) falling on a Saturday, Sunday or holiday, in which case, r
n
Ba
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the appeal may be filed in the next working day.

O
2) When NLRC exercises its power to “correct, amend, or waive any error, defect
an
or irregularity whether in substance or form” in the exercise of its appellate

et
jurisdiction, as provided under Article 218(c) of the Labor Code, in which case,
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the late filing of the appeal is excused.

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3) When technical rules are disregarded under Article 221.

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4) When there are some compelling reasons that justify the allowance of the
appeal despite its late filing such as when it is granted in the interest of
o
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substantial justice.
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• Some principles on reglementary period.

In
o The reglementary period is mandatory and not a “mere technicality.”

an
o The failure to appeal within the reglementary period renders the judgment
appealed from final and executory by operation of law. Consequently, the
prevailing party is entitled, as a matter of right, to a writ of execution and the
es
h
issuance thereof becomes a ministerial duty which may be compelled through

the remedy of mandamus.
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o The date of receipt of decisions, resolutions or orders by the parties is of no

moment. For purposes of appeal, the reglementary period shall be counted
from receipt of such decisions, resolutions, or orders by the counsel or
o
representative of record.
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o Miscomputation of the reglementary period will not forestall the finality of the
judgment. It is in the interest of everyone that the date when judgments become
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final and executory should remain fixed and ascertainable.

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Legal Practitioner
o Date of mailing by registered mail of the appeal memorandum is the date of its
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filing.
o Motion for extension of time to perfect an appeal is not allowed. This kind of
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motion is a prohibited pleading.
o Motion for extension of time to file the memorandum of appeal is not allowed.
ev
o Motion for extension of time to file appeal bond is not allowed.
IV.
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APPEAL FEE AND LEGAL RESEARCH FEE
• Payment of appeal fee and legal research fee, mandatory and jurisdictional.
al
The payment by the appellant of the prevailing appeal fee and legal research fee
is both mandatory and jurisdictional. An appeal is perfected only when there is proof
n
of payment of the appeal fee. It is by no means a mere technicality. If not paid, the
io
running of the reglementary period for perfecting an appeal will not be tolled.
V.
ss
MEMORANDUM OF APPEAL
i e
• Requisites.
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ev
The requisites for a valid Memorandum of Appeal are as follows:
1. The Memorandum of Appeal should be verified by the appellant himself in
o
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accordance with the Rules of Court, as amended;
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2. It should be presented in three (3) legibly typewritten or printed copies;
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Ba
3. It shall state the grounds relied upon and the arguments in support thereof, Ba
including the relief prayed for;
s
4. It shall contain a statement of the date the appellant received the appealed
es
decision, award or order; and

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5. It shall be accompanied by:

bl
(i) proof of payment of the required appeal fee and legal research fee;
li
(ii) posting of a cash or surety bond (in case of monetary awards); and
o
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(iii) proof of service upon the other party.

Ba
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• Requirements not jurisdictional.

O
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The aforesaid requirements that should be complied with in a Memorandum of

Appeal are merely a rundown of the contents of the required appeal memorandum
et
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to be submitted by the appellant. They are not jurisdictional requirements.

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• Some principles on memorandum of appeal.

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o Mere notice of appeal without complying with the other requisites aforestated
shall not stop the running of the period for perfecting an appeal.
o
o Memorandum of appeal is not similar to motion for reconsideration.

te
o Lack of verification in a memorandum of appeal is not a fatal defect. It may

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easily be corrected by requiring an oath.

In
o An appeal will be dismissed if signed only by an unauthorized representative.

an
o Only complainants who signed the memorandum of appeal are deemed to

have appealed the Labor Arbiter’s decision. The prevailing doctrine in labor
cases is that a party who has not appealed cannot obtain from the appellate
es
h
court any affirmative relief other than those granted, if any, in the decision of the
lower tribunal.
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VI.
PROOF OF SERVICE TO ADVERSE PARTY
o
• Failure to serve copy to adverse party, not fatal.

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o While it is required that in all cases, the appellant shall furnish a copy of the
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Memorandum of Appeal to the other party (appellee), non-compliance

150
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therewith, however, will not be an obstacle to the perfection of the appeal;
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nor will it amount to a jurisdictional defect on the NLRC’s taking cognizance
thereof.
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VII.
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POSTING OF BOND
• When posting of bond required.
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Only in case the decision of the Labor Arbiter or the DOLE Regional Director (under
Article 129 of the Labor Code) involves a monetary award, that an appeal by the
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employer may be perfected only upon the posting of a bond, which shall either be
in the form of (1) cash deposit, (2) surety bond or (3) property bond, equivalent in
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amount to the monetary award, but excluding the amount of damages (moral and
exemplary) and attorney’s fees. In other words, only monetary awards (such as
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unpaid wages, backwages, separation pay, 13th month pay, etc.) are required to be
covered by the bond. Moral and exemplary damages and attorney’s fees are
excluded.
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• Some principles on posting of bond.
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o Posting of bond is mandatory and jurisdictional.
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o The cash or surety bond required for the perfection of appeal should be posted
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within the reglementary period. If a party failed to perfect his appeal by the
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non-payment of the appeal bond within the 10-calendar day period provided
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by law, the decision of the Labor Arbiter becomes final and executory upon the
expiration of the said period.
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o In case the employer failed to post a bond to perfect its appeal, the remedy of
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the employee is to file a motion to dismiss the appeal and not a petition for
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mandamus for the issuance of a writ of execution.

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o Surety bond must be issued by a reputable bonding company duly accredited

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by the Commission (NLRC) or the Supreme Court.

o The bond shall be valid and effective from the date of deposit or posting, until
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the case is finally decided, resolved or terminated, or the award satisfied.

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o Posting of a bank guarantee or bank certification is not sufficient compliance

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with the bond requirement. It is not equivalent to nor can be considered

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compliance with the cash, surety or property bond.

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o Cooperatives are not exempted from posting bond.

o Government is exempt from posting of bond; government-owned and/or
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controlled corporations, however, are not exempt therefrom.

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o Bond is not required for the NLRC to entertain a motion for reconsideration. An
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appeal bond is required only for the perfection of an appeal of a Labor Arbiter’s
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decision involving a monetary award.

o Bond is not required to file a Rule 65 petition for certiorari.
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• Justifications for non-posting of bond.

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o No monetary award, no bond required. The rule is clear that when the judgment
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of the Labor Arbiter does not involve any monetary award, no appeal bond is
necessary.
o There is no duty to post a bond if the monetary award is not specified in the
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decision. The Labor Arbiter’s decision or order should state the amount
awarded. If the amount of the monetary award is not contained or fixed in the
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judgment, the appeal bond is not required to be posted.

o In case of conflict between the body and the fallo of the decision, the latter
should prevail.
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RULE ON REDUCTION OF APPEAL BOND
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• Requisites when the amount of appeal bond may be reduced.
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(1) The motion should be filed within the reglementary period;
(2) The motion to reduce bond should be based on meritorious grounds; and
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(3) The motion should be accompanied by a partial bond, the amount of which
should be reasonable in relation to the monetary awards.
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• The Mcburnie Doctrine: new guidelines for filing and acceptance of motions to
reduce bond.
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The 2013 en banc decision rendered in the case of Andrew James Mcburnie v.
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Eulalio Ganzon, has enunciated the following guidelines that must be observed in
the matter of the filing and acceptance of motions to reduce appeal bond, as
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provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure:

(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC
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subject to the following conditions:
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(1) there is meritorious ground; and
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(2) a bond in a reasonable amount is posted;
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(b) For purposes of compliance with condition no. (2) above, a motion shall be
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accompanied by the posting of a provisional cash or surety bond equivalent
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to ten percent (10%) of the monetary award subject of the appeal, exclusive
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of damages and attorney's fees;
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(c) Compliance with the foregoing conditions shall suffice to suspend the running
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of the 10-day reglementary period to perfect an appeal from the Labor

Arbiter’s decision to the NLRC;
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(d) The NLRC retains its authority and duty to resolve the motion to reduce bond
and determine the final amount of bond that shall be posted by the appellant,
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still in accordance with the standards of meritorious grounds and reasonable

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amount; and
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(e) In the event that the NLRC denies the motion to reduce bond, or requires a r
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bond that exceeds the amount of the provisional bond, the appellant shall be
given a fresh period of ten (10) days from notice of the NLRC order within
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which to perfect the appeal by posting the required appeal bond.

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This Mcburnie ruling has completely overhauled the rules on motion to reduce bond.
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Before its advent, the issue of what amount to post by way of partial or provisional
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bond has continued to hound the party litigants and the courts. Now, the fixing of
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“ten percent (10%) of the monetary award subject of the appeal, exclusive of
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damages and attorney's fees” as the “reasonable amount” that should be posted
has completely eradicated any and all controversies thereon. In other words, no
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more motion for reduction of bond accompanied by said 10% requirement would
be denied outright on the ground of insufficiency or inadequacy of the partial or
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provisional bond.
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What is left for the determination by the NLRC, using its sound judgment and
discretion, are only the issues of (1) the reasonable final amount of the bond; and
(2) what constitute “meritorious grounds.” This determination is important since “in all
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cases, the reduction of the appeal bond shall be justified by meritorious grounds and
accompanied by the posting of the required appeal bond in a reasonable
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amount.”
3. Reinstatement and/or Execution Pending Appeal
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• Pioneer Texturizing Doctrine: reinstatement aspect of labor arbiter’s decision,

immediately executory even pending appeal; no writ of execution required.
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According to the Pioneer Texturizing doctrine, an order of reinstatement issued by

the Labor Arbiter under Article 229 [223] of the Labor Code is self-executory or
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immediately executory even pending appeal. This means that the perfection of an
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appeal shall stay the execution of the decision of the Labor Arbiter except execution
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of the reinstatement pending appeal.
• Reinstatement pending appeal, applicable only to the reinstatement order issued
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by the labor arbiter; writ of execution required when reinstatement is ordered by
NLRC on appeal, or subsequently by the court of appeals or supreme court, as
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the case may be.
By way of distinction, the rule on reinstatement pending appeal applies only to the
order of reinstatement issued by the Labor Arbiter and to no other. This means that
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if the reinstatement order is issued by the NLRC on appeal, or by the Court of Appeals
or by the Supreme Court, there is a need to secure a writ of execution from the Labor
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Arbiter of origin to enforce the reinstatement of the employee whose dismissal is
declared illegal.
• Two (2) options of employer
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To implement the reinstatement aspect of a Labor Arbiter’s decision, there are only
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two (2) options available to the employer, to wit:

1. Actual reinstatement. - The employee should be reinstated to his position
which he occupies prior to his illegal dismissal under the same terms and
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conditions prevailing prior to his dismissal or separation or, if no longer
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available, to a substantially-equivalent position; or
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2. Payroll reinstatement. – The employee should be reinstated in the payroll of
the company without requiring him to report back to his work.
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• Duty of employer to notify employee ordered reinstated.
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It is required that in case the decision of the Labor Arbiter includes an order of
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reinstatement, it should contain: Ba

(a) A statement that the reinstatement aspect is immediately executory; and
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(b) A directive for the employer to submit a report of compliance within ten (10)
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calendar days from receipt of the said decision.

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Disobedience of this directive clearly denotes a refusal to reinstate. The employee

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need not file a motion for the issuance of the writ of execution since the Labor Arbiter
is mandated thereafter to motu proprio issue the writ. With the new rules in place,
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there is hardly any difficulty in determining the employer’s intransigence in

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immediately complying with the order. r

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• Instances when writ of execution of labor arbiter’s reinstatement order still

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required.
Under the 2011 NLRC Rules of Procedure, there are two (2) instances when a writ of
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execution should still be issued immediately by the Labor Arbiter to implement his
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order of reinstatement, even pending appeal, viz.:

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(1) When the employer disobeys the prescribed directive to submit a report of
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compliance within ten (10) calendar days from receipt of the decision; or
(2) When the employer refuses to reinstate the dismissed employee.
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The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the
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reinstatement wages as they accrue until actual reinstatement or reversal of the

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order of reinstatement.
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• Some principles on reinstatement pending appeal.

o The Labor Arbiter cannot exercise option of employer by choosing payroll
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reinstatement pending appeal.

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o If the former position is already filled up, the employee ordered reinstated under
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Article 223 should be admitted back to work in a substantially equivalent

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position.
o Reinstatement to a position lower in rank is not proper.
o
o Reinstatement cannot be refused on the basis of the employment elsewhere of

the employee ordered reinstated.
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o The failure of the illegally dismissed employee who was ordered reinstated to
report back to work does not give the employer the right to remove him,
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especially when there is a reasonable explanation for his failure.

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o No reinstatement pending appeal should be made when antipathy and
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antagonism exist.
o If reinstatement is not stated in the Labor Arbiter’s decision (neither in the
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dispositive portion nor in the text thereof), reinstatement is not warranted.
o Employer has no way of staying execution of immediate reinstatement. He
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cannot post bond to prevent its execution.
o Reinstatement pending appeal applies to all kinds of illegal dismissal cases,
regardless of the grounds thereof.
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o Reinstatement pending appeal does not apply when the dismissal is legal but
reinstatement is ordered for some reasons like equity and compassionate
justice. al
o The failure of employee ordered reinstated pending appeal to report back to
work as directed by the employer does not give the employer the right to
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remove him, especially when there is a reasonable explanation for his failure.
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o When former position is already filled up, the employee ordered reinstated
pending appeal should be reinstated to a substantially equivalent position.
o Reinstatement to a position lower in rank is not proper.
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In case of two successive dismissals, the order of reinstatement pending
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appeal under Article 223 issued in the first case shall apply only to the first case
i
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and should not affect the second dismissal. According to Sevilla v. NLRC, the
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Labor Arbiter was correct in denying the third motion for reinstatement filed
by the petitioner because what she should have filed was a new complaint
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based on the second dismissal. The second dismissal gave rise to a new cause
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of action. Inasmuch as no new complaint was filed, the Labor Arbiter could
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not have ruled on the legality of the second dismissal.
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Ba
o Reinstatement pending appeal is not affected by the reinstated employee’s

employment elsewhere.
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o Effect of grant of achievement award during reinstatement pending appeal.

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In the 2014 case of Garza v. Coca-Cola Bottlers Philippines, Inc., it was

pronounced that the act of respondent CCBPI in giving an award of a
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Certificate of Achievement to petitioner for his exemplary sales performance

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during his reinstatement ordered by the Labor Arbiter, while respondent’s

appeal with the NLRC was still pending, constitutes recognition of petitioner’s
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abilities and accomplishments. It indicates that he is a responsible, trustworthy

and hardworking employee of CCBPI. It constitutes adequate proof weighing r
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in his favor.
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B. NATIONAL LABOR RELATIONS COMMISSION

• Nature.
et
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The NLRC is an administrative quasi-judicial body. It is an agency attached to the

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DOLE solely for program and policy coordination only. It is in charge of deciding
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labor cases through compulsory arbitration.

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• Composition of the NLRC

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The NLRC is composed of a Chairman and twenty-three (23) members called

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“Commissioners.”
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The NLRC has tripartite composition. Eight (8) members thereof should be chosen
only from among the nominees of the workers sector and another eight (8) from the
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employers sector. The Chairman and the seven (7) remaining members shall come
from the public sector, with the latter to be chosen preferably from among the
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incumbent Labor Arbiters.
• Commission en banc.
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The Commission sits en banc only for the following purposes:

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(1) To promulgate rules and regulations governing the hearing and disposition of
cases before any of its divisions and regional branches; and
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(2) To formulate policies affecting its administration and operations.
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The NLRC does not sit en banc to hear and decide cases. The banc has no
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adjudicatory power. The Commission exercises its adjudicatory and all other
powers, functions, and duties through its eight (8) Divisions.
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• NLRC’s eight (8) divisions.
The NLRC is divided into eight (8) divisions, each one is comprised of three (3)
members. Each Division shall consist of one (1) member from the public sector who
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shall act as its Presiding Commissioner and one (1) member each from the workers
and employers sectors, respectively.
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The various Divisions of the Commission have exclusive appellate jurisdiction over
cases within their respective territorial jurisdictions.
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1. JURISDICTION
• Two (2) kinds of jurisdiction.

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The NLRC exercises two (2) kinds of jurisdiction:
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1. Exclusive original jurisdiction; and
2. Exclusive appellate jurisdiction.
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• Exclusive original jurisdiction.
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The NLRC exercises exclusive and original jurisdiction over the following cases: Ba
a. Petition for injunction in ordinary labor disputes to enjoin or restrain any actual
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or threatened commission of any or all prohibited or unlawful acts or to require

the performance of a particular act in any labor dispute which, if not restrained
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or performed forthwith, may cause grave or irreparable damage to any party.

e
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b. Petition for injunction in strikes or lockouts under Article 264 of the Labor Code.
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c. Certified cases which refer to labor disputes causing or likely to cause a strike
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or lockout in an industry indispensable to the national interest, certified to it by

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the Secretary of Labor and Employment for compulsory arbitration by virtue of r

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Article 263(g) of the Labor Code.

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d. Petition to annul or modify the order or resolution (including those issued during
execution proceedings) of the Labor Arbiter.
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• Exclusive appellate jurisdiction.

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The NLRC exercises exclusive appellate jurisdiction over the following:

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a. All cases decided by the Labor Arbiters.

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b. Cases decided by the DOLE Regional Directors or hearing officers involving

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small money claims under Article 129 of the Labor Code.

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c. Contempt cases decided by the Labor Arbiters.

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EFFECT OF NLRC REVERSAL OF LABOR ARBITER’S ORDER OF REINSTATEMENT

• Effect of reversal of reinstatement order when employee was actually reinstated.
es
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o The BERGONIO Rule: (Bergonio, Jr. v. South East Asian Airlines, April 21, 2014.)
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After reversal of Labor Arbiter’s decision, the employer’s duty to reinstate the
dismissed employee in the actual service or in the payroll is effectively terminated.
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The employee, in turn, is not required to return the wages that he had received prior
to the reversal of the LA’s decision.
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• Effect of reversal of reinstatement order when employee was reinstated in the
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payroll.
o The GENUINO Doctrine: (Marilou S. Genuino v. NLRC, Citibank, N.A., Dec. 4,
ie
2007)
The Refund Doctrine in Genuino no longer applies, per Garcia Doctrine (See
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below).
o The WENPHIL Rule: (The prevailing rule) (Wenphil Corporation v. Abing, April 7,
2014)
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The period for computing the backwages due to the dismissed employees during
the period of appeal should END on the date that a higher court (in this case the
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CA) reversed the labor arbitration ruling of illegal dismissal.”
• Effect of reversal of reinstatement order when employee was neither reinstated
to his former position or in the payroll.
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o ENTITLEMENT TO REINSTATEMENT WAGES.
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The employee is entitled to reinstatement salaries/wages, allowances and benefits

under the following doctrines:
(1) ROQUERO doctrine (Roquero v. Philippine Air Lines, Inc., April 22, 2003);
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and
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(2) GARCIA doctrine (Garcia v. Philippine Airlines, Inc., Jan. 20, 2009 [En
ev
Banc]).
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Based on the foregoing doctrines, from the moment an employee is ordered
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reinstated by the Labor Arbiter on the basis of the finding that his dismissal is illegal,
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up to the time that an appellate tribunal like the NLRC, Court of Appeals and
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Supreme Court, as the case may be, reverses the said finding, the employee is
generally entitled to his so-called “reinstatement wages.”
Ba
s
ROQUERO DOCTRINE.
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The Roquero doctrine, enunciates the rule that in cases where an employee is
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ordered reinstated by the Labor Arbiter and the employer fails or refuses to obey
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the reinstatement order but initiates an appeal, the employer’s success in having
the decision of the Labor Arbiter’s decision reversed on appeal will not exculpate
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him from the liability to pay the reinstatement wages of the employee reckoned
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and computed from the time the employee was ordered reinstated by the Labor
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Arbiter until the date of its reversal on appeal.

Ba
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In this case of Roquero, the dismissal of petitioners Roquero and Pabayo was held
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valid by the Labor Arbiter. On appeal to the NLRC, the Labor Arbiter’s decision was
reversed and consequently, petitioners were ordered reinstated. They did not
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appeal from that decision of the NLRC but filed a motion for the issuance of a writ
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of execution of the order of reinstatement. The Labor Arbiter granted the motion
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but respondent PAL refused to comply with the said order on the ground that it has
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filed a Petition for Review before the Supreme Court. Subsequently, the CA reversed
the decision of the NLRC and ruled that the dismissal of petitioners was valid. The
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Supreme Court later affirmed the CA’s decision but it held that the unjustified refusal
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by PAL to reinstate Roquero who, unlike Pabayo, has not amicably settled his case,
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entitles him to the payment of his reinstatement wages effective from the time PAL
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failed to reinstate him despite the issuance of the writ of execution. Thus, it was
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mandatory for PAL to actually reinstate Roquero or reinstate him in the payroll.
Having failed to do so, the former must pay the latter the salaries he is entitled to,
as if he was reinstated, from the time of the decision of the NLRC until the finality of
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the decision of the Supreme Court.

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Following Roquero, it is now the norm that even if the order of reinstatement of the
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Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to

reinstate and pay the wages of the dismissed employee during the period of
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appeal until its reversal by the NLRC, or the Court of Appeals or the Supreme Court,
as the case may be. If the employee has been reinstated during the appeal period
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and such reinstatement order is subsequently reversed on appeal with finality, the
employee is not required to reimburse whatever salaries he has received for he is
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entitled to such, more so if he actually rendered services during the said period.
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GARCIA DOCTRINE.
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• Modification of the Roquero and Genuino doctrines.
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The Roquero and Genuino doctrines have been modified by the Garcia doctrine. In
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this case, while respondent Philippine Airlines (PAL) was undergoing rehabilitation
receivership, an illegal dismissal case was filed by petitioners against respondent PAL
which was decided by the Labor Arbiter in their favor thus ordering PAL to, inter alia,
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immediately comply with the reinstatement aspect of the decision. On appeal, the
NLRC reversed the ruling of the Labor Arbiter and held that their dismissal was valid.
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The issue of whether petitioners may collect their reinstatement wages during the
period between the Labor Arbiter’s order of reinstatement pending appeal and the
NLRC decision overturning that of the Labor Arbiter, now that respondent PAL has
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terminated and exited from rehabilitation proceedings, was resolved in the negative
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by the Supreme Court. The following ratiocinations were cited:

(1) Re: modification of the Genuino doctrine. - The “refund doctrine” in
Genuino should no longer be observed because it easily demonstrates how a
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favorable decision by the Labor Arbiter could harm, more than help, a
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dismissed employee. The employee, to make both ends meet, would
fe
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necessarily have to use up the salaries received during the pendency of the
appeal, only to end up having to refund the sum in case of a final unfavorable
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decision. It is mirage of a stop-gap leading the employee to a risky cliff of
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insolvency. Further, the Genuino ruling not only disregards the social justice
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principles behind the rule, but also institutes a scheme unduly favorable to
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management. Under such scheme, the salaries dispensed pendente lite

merely serve as a bond posted in installment by the employer. For in the event
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of a reversal of the Labor Arbiter’s decision ordering reinstatement, the
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employer gets back the same amount without having to spend ordinarily for
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bond premiums. This circumvents, if not directly contradicts, the proscription

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that the “posting of a bond [even a cash bond] by the employer shall not stay
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the execution for reinstatement.”

(2) Re: modification of the Roquero doctrine. – The Roquero doctrine was
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reaffirmed but with the modification that “[a]fter the Labor Arbiter’s decision
is reversed by a higher tribunal, the employee may be barred from collecting r
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the accrued wages, if it is shown that the delay in enforcing the reinstatement
pending appeal was without fault on the part of the employer.”
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• Two-fold test under the Garcia Doctrine

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Under Garcia, the test to determine the liability of the employer (who did not
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reinstate the employee pending appeal) to pay the wages of the dismissed
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employee covering the period from the time he was ordered reinstated by the Labor
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Arbiter to the reversal of the Labor Arbiter’s decision either by the NLRC, the Court
of Appeals or the High Court, is two-fold, to wit:
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(1) There must be actual delay or the fact that the order of reinstatement
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pending appeal was not executed prior to its reversal; and

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(2) The delay must not be due to the employer’s unjustified act or
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omission. If the delay is due to the employer’s unjustified refusal, the

employer may still be required to pay the salaries notwithstanding the
reversal of the Labor Arbiter’s decision.
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In Garcia, there was actual delay in reinstating petitioners but respondent PAL was
justified in not complying with the reinstatement order of the Labor Arbiter because
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during the pendency of the illegal dismissal case, the SEC placed respondent PAL
under an Interim Rehabilitation Receiver who, after the Labor Arbiter rendered his
decision, was replaced with a Permanent Rehabilitation Receiver. It is settled that
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upon appointment by the SEC of a rehabilitation receiver, all actions for claims
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before any court, tribunal or board against the corporation shall ipso jure be
suspended. Resultantly, respondent PAL’s “failure to exercise the alternative options
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of actual reinstatement and payroll reinstatement was thus justified. Such being the
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case, respondent’s obligation to pay the salaries pending appeal, as the normal
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effect of the non-exercise of the options, did not attach.”
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• Reckoning of the period covered by accrued reinstatement wages.
To clarify, employees ordered reinstated by the Labor Arbiter are entitled to accrued
reinstatement wages only from the time the employer received a copy of the Labor
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Arbiter’s decision declaring the employees’ termination illegal and ordering their
reinstatement up to the date of the decision of the appellate tribunal overturning that
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of the Labor Arbiter. It is not accurate therefore to state that such entitlement
commences “from the moment the reinstatement order was issued up to the date
when the same was reversed by a higher court without fear of refunding what he
had received.”
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• Some principles on reinstatement wages.
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o Employer is not liable to pay any reinstatement backwages if reinstatement is
ordered not by the Labor Arbiter but by the NLRC on appeal and it was not
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executed by writ and its finding of illegal dismissal is later reversed by the
Court of Appeals and/or Supreme Court.
o Payroll-reinstated employee is entitled not only to reinstatement wages but
ss
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also to other benefits during the period of payroll reinstatement until the
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illegal dismissal case is reversed by a higher tribunal.
fe
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o Award of additional backwages and other benefits from the time the Labor
Arbiter ordered reinstatement until actual or payroll reinstatement is proper
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and valid.
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C. COURT OF APPEALS (Rule 65, Rules of Court)
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• Rule 65 Petition for Certiorari, the only mode of elevating a labor case to the Court
Ba
of Appeals.
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The only mode by which a labor case decided by any of the following labor
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authorities/tribunals may reach the Court of Appeals is through a Rule 65 petition for
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certiorari.
(a) the DOLE Secretary;
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(b) the Commission (NLRC); and

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(c) the Director of the Bureau of Labor Relations (BLR) in cases decided by him
in his appellate jurisdiction (as distinguished from those he decides in his
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original jurisdiction which are appealable to the DOLE Secretary).

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The remedy of ordinary appeal to the Court of Appeals is not available from their
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decisions, orders or awards. The reason for this rule is that their decisions, orders or
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awards are final and executory and therefore unappealable.

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• The only exception.

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The only exception to the foregoing rule is in the case of decisions, orders or awards
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issued by the Voluntary Arbitrator or panel of Voluntary Arbitrators which may be

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elevated to the Court of Appeals by way of an ordinary appeal under a Rule 43

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petition for review.

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• Filing of Motion for Reconsideration of the decision of the DOLE Secretary, the
commission (NLRC) or the BLR director, a pre-requisite to filing of Rule 65 Petition
es
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for Certiorari.
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o The rule on the filing of a Motion for Reconsideration of the decision of the DOLE
Secretary, the NLRC and the BLR Director is mandatory and jurisdictional. Failure
to comply therewith would result in the dismissal of the Rule 65 certiorari petition.
o
Jurisprudence abounds enunciating the rule that a motion for reconsideration

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is a pre-requisite for the filing of a special civil action for certiorari.

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o The reason for this rule is that in labor cases, a motion for reconsideration is the
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plain and adequate remedy from an adverse decision of the DOLE Secretary,
the NLRC and the BLR Director.
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o THE PHILTRANCO DOCTRINE: a motion for reconsideration should be filed even
though it is not required or even prohibited by the concerned government
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office.
▪ This was the rule enunciated in the 2014 case of Philtranco Service Enterprises,
Inc. v. Philtranco Workers Union-Association of Genuine Labor Organizations
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(PWU-AGLO). Thus, while a government office may prohibit altogether the
filing of a motion for reconsideration with respect to its decisions or orders, the
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fact remains that certiorari inherently requires the filing of a motion for
reconsideration which is the tangible representation of the opportunity given
to the office to correct itself. Unless it is filed, there could be no occasion to
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rectify. Worse, the remedy of certiorari would be unavailing. Simply put,
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regardless of the proscription against the filing of a motion for reconsideration,

the same may be filed on the assumption that rectification of the decision or
order must be obtained and before a petition for certiorari may be instituted.
ss
• Certiorari petition may be filed even if the decision of the DOLE Secretary, the
e
commission (NLRC), or the BLR director has already become final and executory
i
fe
o This rule applies to the decisions rendered by the DOLE Secretary, the NLRC or
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the BLR Director (in cases which he decided in his appellate jurisdiction)
o If the CA grants the petition and nullifies their decisions on the ground of grave
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abuse of discretion amounting to excess or lack of jurisdiction, such decisions
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are, in contemplation of law, null and void ab initio; hence, they never became
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final and executory.
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JUDICIAL REVIEW OF DECISIONS OF VOLUNTARY ARBITRATORS

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s
• Decisions, final and executory

As a general rule, decisions or awards of voluntary arbitrators are final, inappealable
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and executory after ten (10) calendar days from receipt of a copy thereof by the
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parties.
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• Ordinary appeal under Rule 43 of the 1997 Rules of Civil Procedure – Voluntary
Arbitrators are of the same level as RTC judges.
li
o
o Being a quasi-judicial agency, the decisions and awards of a Voluntary

Arbitrator are appealable by way of a petition for review to the Court of Appeals r
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under Revised Administrative Circular No. 1-95 which provides for a uniform
procedure for appellate review of all adjudications of quasi-judicial entities and
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which is now embodied in Section 1, Rule 43 of the 1997 Rules of Civil Procedure.
o The ruling in Luzon Development Bank v. Association of Luzon Development Bank
et
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Employees, in effect, equates the decisions or awards of the Voluntary Arbitrator

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to those of the Regional Trial Court (RTC). Hence, in a petition for certiorari from
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the awards or decisions of the Voluntary Arbitrator, the Court of Appeals has
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concurrent jurisdiction with the Supreme Court

o In Alcantara, Jr. v. CA, it was held that Luzon Development Bank is still a good
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law.
• Period of appeal.
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o A conflict in the reckoning of the reglementary period within which to elevate a

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case on appeal from the Voluntary Arbitrator to the CA exists between the law,
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Article 276 [262-A] of the Labor Code, on the one hand, and the Rules of Court,
particularly Section 4, Rule 43 thereof, on the other. Article 276 [262-A] provides,
insofar as pertinent, as follows:
es
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“The award or decision of the Voluntary Arbitrator or Panel of Voluntary

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Arbitrators shall contain the facts and the law on which it is based. It
shall be final and executory after ten (10) calendar days from receipt
of the copy of the award or decision by the parties.”
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Section 4, Rule 43 of the Rules of Court, on the other hand, provides for a 15-day
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reglementary period for filing an appeal, thus:

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“Section 4. Period of appeal. - The appeal shall be taken within fifteen
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(15) days from notice of the award, judgment, final order or resolution,
or from the date of its last publication, if publication is required by law
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for its effectivity, or of the denial of petitioner's motion for new trial or
reconsideration duly filed in accordance with the governing law of the
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court or agency a quo. Only one (1) motion for reconsideration shall be
allowed. Upon proper motion and the payment of the full amount of
the docket fee before the expiration of the reglementary period, the
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Court of Appeals may grant an additional period of fifteen (15) days
only within which to file the petition for review. No further extension shall
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be granted except for the most compelling reason and in no case to
exceed fifteen (15) days.”
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o The Guagua Doctrine - clarification of the rule on appeal. Finally, the en banc
decision in the 2018 case of
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▪ Guagua National Colleges v. CA, has laid to rest the above conflict. The Court
declared that the variable rulings notwithstanding, the period now to be
followed in appealing the decisions or awards of the Voluntary Arbitrators or
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Panel of Arbitrators should be as follows:
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(1) The 10-calendar day period stated in Article 276 [262-A] should be
understood as the period within which the party adversely affected by
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the ruling of the Voluntary Arbitrators or Panel of Arbitrators may file a
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motion for reconsideration; and
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(2) Only after the resolution of the motion for reconsideration may the
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aggrieved party appeal to the CA by filing the petition for review under
Rule 43 of the Rules of Court within 15 days from notice pursuant to
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Section 4 of Rule 43.
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D. SUPREME COURT (Rule 45, Rules of Court)

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• Rule 45 Petition for Review on Certiorari, the only mode by which a labor case
may reach the Supreme Court.
li
Since the Court of Appeals has jurisdiction over the petition for certiorari under Rule
o
65 that may be filed before it from the decisions of the NLRC or the DOLE Secretary
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or the BLR Director (in cases decided by him in his appellate jurisdiction), any alleged
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errors committed by it in the exercise of its jurisdiction would be errors of judgment

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which are reviewable by means of a timely appeal to the Supreme Court and not
by a special civil action of certiorari.
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If the aggrieved party fails to do so within the reglementary period and the decision
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accordingly becomes final and executory, he cannot avail himself of the writ of
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certiorari, his predicament being the effect of his deliberate inaction. A petition for
certiorari under Rule 65 cannot be a substitute for a lost appeal under Rule 45; hence,
it should be dismissed.
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• The Neypes Doctrine (Fresh Period Rule) - fresh period from denial of Motion for
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Reconsideration.
In
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In the 2013 case of Elizabeth Gagui v. Dejero, petitioner successively filed two
Motions for Reconsideration of the CA’s decision but both were denied. Petitioner
es
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elevated the case to the Supreme Court under Rule 45. In their comment,
respondents alleged that the instant petition had been filed 15 days after the
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prescriptive period of appeal under Section 2, Rule 45 of the Rules of Court. In her
reply, petitioner countered that she has a fresh period of 15 days from the date she
received the Resolution of the CA to file the instant Rule 45 petition. In affirming the
o
contention of petitioner, the Supreme Court cited the en banc ruling in the case of
Neypes v. CA which standardized the appeal periods, thus:
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“To standardize the appeal periods provided in the Rules and to

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afford litigants fair opportunity to appeal their cases, the Court deems it
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practical to allow a fresh period of 15 days within which to file the notice
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of appeal in the Regional Trial Court, counted from receipt of the order
dismissing a motion for a new trial or motion for reconsideration.
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“Henceforth, this ‘fresh period rule’ shall also apply to Rule 40
governing appeals from the Municipal Trial Courts to the Regional Trial
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Courts; Rule 42 on petitions for review from the Regional Trial Courts to
the Court of Appeals; Rule 43 on appeals from quasi-judicial agencies
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to the Court of Appeals and Rule 45 governing appeals by certiorari to
the Supreme Court. The new rule aims to regiment or make the appeal
period uniform, to be counted from receipt of the order denying the
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motion for new trial, motion for reconsideration (whether full or partial)
or any final order or resolution.”
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Consequently, since petitioner in Gagui received the CA Resolution denying her
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two Motions for Reconsideration only on 16 March 2011, she had another 15 days
within which to file her Petition, or until 31 March 2011. This Petition, filed on 30 March
2011, fell within the prescribed 15-day period.
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E. BUREAU OF LABOR RELATIONS
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• Labor officials concerned.
As far as labor relations cases are concerned, the following officials are involved in their
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adjudication:
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(1) Mediators-Arbiters (Med-Arbiters);

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(2) DOLE Regional Directors; and Ba

(3) BLR Director.
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• Med-arbiter.
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The term “Med-Arbiter” refers to an officer in the DOLE Regional Office or in the BLR
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authorized to hear and decide representation cases, inter-union or intra-union disputes

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and other related labor relations disputes.

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While the Labor Code refers to this official as “Med-Arbiter,” it should, however, be
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construed to mean “Mediator-Arbiter.” Most recent DOLE issuances have specifically

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changed such reference to “Mediator-Arbiter” in their provisions. This is but proper since
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the word “Med” obviously is an abbreviation of the word “Mediator.”

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• DOLE regional director.

The Regional Directors are the duly authorized representatives of the DOLE Secretary in
et
the DOLE regional offices. They are in charge of the administration and enforcement
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of labor standards within their respective territorial jurisdictions. Although, like the Med-
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Arbiters, they are not also specifically mentioned in said article, it is a known procedural
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rule, however, that in addition to their jurisdiction over cases falling under Articles 128
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and 129 of the Labor Code, they also have jurisdiction over certain specified cases
contemplated under Article 232 [226] of the same Code such as disputes concerning
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union registration and cancellation of union registration as well as CBA registration or

deregistration cases.
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• BLR Director.
The BLR is headed by a Director who hears and decides certain specified cases over
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which he has either original or appellate jurisdiction. In many cases, his name, instead
of the BLR, is usually the one impleaded as public respondent in certiorari petitions to
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the CA or subsequent appeals to the Supreme Court. Thus, one would encounter
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countless cases filed against such luminaries like Pura-Ferrer Calleja, Cresenciano B.
Trajano, Benedicto Ernesto R. Bitonio Jr., and Hans Leo J. Cacdac, among others, who
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are sued in their capacity as BLR Directors.

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CASES COGNIZABLE
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The following are the general classifications of the cases falling under the jurisdiction of
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the said officials, to wit:
(a) Inter-union disputes;
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(b) Intra-union disputes; and
(c) Other related labor relations disputes.
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(a) INTER-UNION AND INTRA-UNION DISPUTES
•
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Inter-union or representation dispute.
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An “inter-union dispute” or “representation dispute” is one occurring or carried on
between or among unions. It refers to a case involving a petition for certification
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election filed by a duly registered labor organization which is seeking to be recognized

as the sole and exclusive bargaining agent (SEBA) of the rank-and-file employees or
supervisory employees, as the case may be, in the appropriate bargaining unit of a
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company, firm or establishment. If there are two or more legitimate unions involved, it
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also refers to any conflict between and among them concerning the issue of which of
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them should be certified as the SEBA for purposes of collective bargaining with the
employer. Broadly, it covers any other conflict or dispute between legitimate labor
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unions.
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• Intra-union or internal union dispute.
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An “intra-union dispute” or “internal union dispute” refers to a conflict within or inside a

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labor union. It may refer to any conflict between and among officers and/or members
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of one particular union, including grievances arising from any violation of the rights and
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conditions of membership, violation of or disagreement over any provision of the

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union’s constitution and by-laws, issues over control, supervision and management of
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its internal affairs, or disputes arising from chartering or affiliation of a union.

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• Rundown of inter-union and intra-union cases

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In accordance with the Labor Code’s Implementing Rules, as amended in 2015, the
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following is a rundown of all possible inter-union/intra-union disputes:

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a) Cancellation of registration of a labor organization filed by its members or by

another labor organization;
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b) Conduct of election of union and workers’ association officers or nullification

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of election of union and workers' association officers;

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c) Audit/accounts examination of union or workers' association funds;

d) Deregistration of collective bargaining agreements;
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e) Validity/invalidity of union affiliation or disaffiliation;

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f) Validity/invalidity of acceptance/non-acceptance for union membership;

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g) Validity/invalidity of impeachment/expulsion of union and workers' association

officers and members;
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h) Validity/invalidity of Request for SEBA Certification4 (Replacing “Voluntary

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Recognition” as a mode of securing sole and exclusive bargaining agent

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status);
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i) Opposition to application for union and CBA registration;

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j) Violations of or disagreements over any provision in a union or workers'

association constitution and by-laws;
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4 This is in the nature of an inter-union dispute which may be occasioned by the introduction of a new mode of securing the status of sole and
exclusive bargaining agent (SEBA).
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k) Disagreements over chartering or registration of labor organizations and
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collective bargaining agreements;
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I) Violations of the rights and conditions of union or workers' association
membership;
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m) Violations of the rights of legitimate labor organizations, except interpretation
of collective bargaining agreements; and
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n) Such other disputes or conflicts involving the rights to self-organization, union
membership and collective bargaining -
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1) Between and among legitimate labor organizations; or
2) Between and among members of a union or workers’ association.
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(b) OTHER RELATED LABOR RELATIONS DISPUTES
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• Meaning of “Other related labor relations disputes.”

“Other related labor relations dispute” refers to any conflict between a labor union and
the employer or any individual, entity or group that is not a labor union or workers’
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association.
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More specifically, it may refer to any of the following:
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(a) Any conflict between:
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(1) a labor union and an employer, or
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(2) a labor union and a group that is not a labor organization; or
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(3) a labor union and an individual who is not a member of such union; Ba
(b) Cancellation of registration of unions and workers’ associations filed by
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individuals other than its members, or group that is not a labor organization; and
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(c) A petition for interpleader involving labor relations.

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ORIGINAL AND EXCLUSIVE JURISDICTION OF MED-ARBITERS, DOLE DIRECTORS AND BLR

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DIRECTOR
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Having known the various cases afore-described, a discussion of the respective

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jurisdictions of the Med-Arbiters, DOLE Directors and BLR Director over these cases may
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now be made with greater clarity.

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1. MED-ARBITERS
et
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ORIGINAL AND EXCLUSIVE JURISDICTION

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• The cases falling under the original and exclusive jurisdiction of the Med-Arbiters
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are as follows:
(1) Inter-union disputes (representation or certification election conflicts), such as:
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(a) Request for SEBA certification when made in an unorganized establishment

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with only one5 or more than one (1) legitimate union or in an organized
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establishment; or
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5 In case the Request is made in an unorganized establishment with only one (1) legitimate union, and the requesting union or local fails to
complete the requirements for SEBA certification during the validation conference before the DOLE Regional Director, in which event, such
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Request should be referred to the Election Officer for the conduct of certification election (Section 4, Rule VII of the Rules to Implement the
Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. The election should be conducted in
accordance with Rule IX thereof.), which necessarily would mean that such certification election should now be conducted under the jurisdiction
o
of the Mediator-Arbiter to whom the Election Officer is duty-bound to report the outcome of the election proceeding. Certainly, the ensuing
certification election cannot be conducted under the directive of the DOLE Regional Director without the participation of the Mediator-Arbiter
who, under the law, is the one possessed of the original and exclusive jurisdiction over certification election cases, including the proclamation
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of the winning SEBA. (See Section 21, Rule IX, Book V, Rules to Implement the Labor Code, as ordered renumbered by Section 17, Department
Order No. 40-I-15, Series of 2015 [September 07, 2015]. This section was originally numbered Section 20, per Department Order No. 40-03,
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Series of 2003, [Feb. 17, 2003], but it was subsequently re-numbered to Section 19, per Department Order No. 40-F-03, Series of 2008 [Oct.
30, 2008]).
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(b) Petition for certification election, consent election, run-off election or re-run
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election;
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(2) Intra-union disputes;
(3) Other related labor relations disputes;
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(4) Injunction cases;6 and
(5) Contempt cases.
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On No. 1[a] above, the Mediator-Arbiter will have jurisdiction over a Request for SEBA
Certification if it is made in an organized establishment as well as in instances where it
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is made in an unorganized establishment with more than one (1) legitimate
organization. Under this situation, the DOLE Regional Director, before whom the said
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Request is filed, is required to refer it to the Mediator-Arbiter for the determination of the
propriety of conducting a certification election; consequently, the Mediator-Arbiter
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would now have the jurisdiction to take cognizance of the certification election.
2. DOLE REGIONAL DIRECTORS
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ORIGINAL AND EXCLUSIVE JURISDICTION
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• The DOLE Regional Directors have original and exclusive jurisdiction over numerous
cases. But not all of them are relevant to or connected with the three (3) classes of
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cases7 expressly mentioned in Article 232 [226]. Only the following cases
cognizable by them are related thereto or connected therewith by virtue of laws
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and rules:
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(1) Visitorial cases under Article 289 [274], involving examination of books of
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accounts of independent unions, local chapters/chartered locals and workers’
s
associations;
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(2) Union registration-related cases, such as:

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a) Applications for union registration of independent unions, local chapters and

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workers’ associations;
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b) Denial of application for registration of said unions;

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c) Petitions for revocation or cancellation of registration of said unions;

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(3) Denial of registration of single-enterprise8 CBAs or petitions for deregistration

thereof; and
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(4) Request for SEBA certification when made in an unorganized establishment

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with only one (1) legitimate union.

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• On No. 1 above, it is imperative to point out that although by nature, this is an intra-
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union dispute, the rules, however, treat this separately from those generally
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applicable to intra-union disputes and accordingly vest jurisdiction thereover in the

DOLE Regional Directors and not in the Med-Arbiters.
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o Barles v. Bitonio is clear on this point. It was held here that while intra-union
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conflicts, such as examinations of accounts are under the jurisdiction of the BLR,
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however, the Rules of Procedure on Mediation-Arbitration purposely and

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expressly separated or distinguished examinations of union accounts from the

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genus of intra-union conflicts and provided a different procedure for their

resolution. Consequently, original jurisdiction over complaints for examinations
of union accounts is vested not in the Med-Arbiter but in the DOLE Regional
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Director. This is apparent from Section 3 thereof.

o But there is a need to point out though that the foregoing rule applies only when
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the request for examination of books of accounts concerns only those of

independent unions, local chapters/chartered locals and workers’ associations.
If what is involved are those of federations, national unions, industry unions or
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trade union centers, and their local chapters/chartered locals, affiliates and
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6 Med-Arbiters have the authority to issue temporary restraining orders (TROs) and writs of injunction in appropriate cases.
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7 These are (1) inter-union disputes; (2) intra-union disputes; and (3) Other related labor relations disputes.
8 As distinguished from cases involving multi-employer CBAs which fall under the original jurisdiction of the BLR Director.
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member organizations, the jurisdiction thereover is vested with the BLR Director
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and not with the DOLE Regional Director.
• On No. 2[a] above, as far as workers’ associations are concerned, if they operate in
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more than one region, the application for registration should be filed with the BLR or
the Regional Offices, but either way, it should be processed by the BLR. This is so in
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order to have a unified resolution of the merits of the application by one, single
agency.
• On No. 4 above, when the Request for SEBA Certification is made in an unorganized
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establishment with only one (1) legitimate union, it should be filed with the DOLE
Regional Director who will make an immediate determination on whether there is
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majority support by the members of the bargaining unit to the requesting union.
Once the majority support is confirmed and the requesting union does not fail to
complete the requirements for SEBA certification during the validation conference,
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the requesting union is immediately certified by the DOLE Regional Director as the
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SEBA without conducting a certification election.

• As a consequence of this latest change in the Rules, it may be said that the DOLE
Regional Director, in a way, is now empowered to rule on a “representation” issue
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which, technically speaking, falls under and is covered by the general class of “inter-
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union disputes” that falls within the jurisdiction of the Mediator-Arbiter. In fact, the
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very Request itself speaks of “SEBA Certification,” a relief that is not the consequence
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of “Voluntary Recognition” - the original remedy intended to be replaced by this
Request mode.
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• For it is clear that under the previous repealed rule on voluntary recognition, the
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DOLE Regional Director never issues a “SEBA Certification”; what is done is the mere
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recording of the “Notice of Voluntary Recognition” jointly submitted by the employer
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and the union to the DOLE Regional Office which issued the recognized labor
union’s certificate of registration or, in the case of local chapter, where the charter
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s
certificate and the other documents required under Article 241 [234-A] were
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submitted and filed. Since it is crystal clear under existing laws, rules and
jurisprudence that it is the Mediator-Arbiter who has the original and exclusive
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jurisdiction to issue a “SEBA Certification” under any of the modes9 of selecting a

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SEBA, it is not surprising if the issue of the validity of the exercise of similar power to
issue the SEBA Certification by the DOLE Regional Director would be raised in an
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appropriate proceeding.
• But the rule is quite clear that the Mediator-Arbiter would acquire original jurisdiction r
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over the Request for SEBA Certification under the following situations:
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(1) In case the Request is made in an unorganized establishment with only one (1)
legitimate union, and the requesting union or local fails to complete the
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requirements for SEBA certification during the validation conference before the
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DOLE Regional Director, in which event, such Request should be referred to the
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Election Officer for the conduct of certification election which necessarily would
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mean that such certification election should now be conducted under the
jurisdiction of the Mediator-Arbiter to whom the Election Officer is duty-bound
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to report the outcome of the election proceeding. Certainly, the ensuing

certification election cannot be conducted under the directive of the DOLE
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Regional Director without the participation of the Mediator-Arbiter who, under

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the law, is the one possessed of the original and exclusive jurisdiction over
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certification election cases, including the proclamation of the winning SEBA.
(2) In case the Request is made in an unorganized establishment with more than
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one (1) legitimate union, in which event, the DOLE Regional Director is required
to refer the Request directly to the Election Officer for the conduct of a
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certification election which should be in accordance with the Rules that state,
in its Section 2, Rule VIII, that the “(Request) shall be heard and resolved by the
Mediator-Arbiter.” Resultantly, it is still the Mediator-Arbiter who should take
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cognizance of the Request which, in this case, is the equivalent of the Petition
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for Certification Election over which he exercises original jurisdiction.

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9 Besides this mode, the other modes of selecting or designating a SEBA are certification election, consent election, run-off election, and lately,
re-run election.
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(3) In case the Request is made in an organized establishment, in which case, the
Regional Director should refer the same to the Mediator-Arbiter for the
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determination of the propriety of conducting a certification election.
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3. BLR DIRECTOR
ORIGINAL AND EXCLUSIVE JURISDICTION.
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• At the outset, it must be stressed that reference in the law and pertinent rules to
“BLR”, as far as the issue of jurisdiction is concerned, should appropriately mean “BLR
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Director.” This is as it should be because “BLR” is a generic term that includes not
only the Med-Arbiters and DOLE Regional Directors but the BLR Director himself.
More significantly, there is jurisprudential variance in the cases cognizable by the
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BLR Director, in relation to Med-Arbiters and DOLE Regional Directors, hence,
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referring to the cases properly falling under the jurisdiction of the “BLR Director” as
such would be more appropriate and less confusing than simply referring to them
as falling under the jurisdiction of the “BLR.”
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• The BLR Director exercises two (2) kinds of jurisdiction, namely: original and
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appellate. The following cases fall under the first:
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(1) Complaints and petitions involving the application for registration,
revocation or cancellation of registration of federations, national unions,
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industry unions, trade union centers and their local chapters/chartered
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locals, affiliates and member organizations;
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(2) Request for examination of books of accounts of said labor organizations10
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under Article 289 [274] of the Labor Code; Ba

(3) Intra-union disputes involving said labor organizations;
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(4) Notice of merger, consolidation, affiliation and change of name of said

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unions and or petition for denial thereof;

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(5) Registration of multi-employer11 CBAs or petitions for deregistration thereof;

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(6) Contempt cases.

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• As far as No. 3 above is concerned, the 2010 case of Atty. Montaño v. Atty. Verceles,
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is relevant. Petitioner here claimed that under the Implementing Rules, it is the DOLE
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Regional Director and not the BLR (Director) who has jurisdiction over intra-union
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disputes involving federations which, in this case, pertains to the election protests in
connection with the election of officers of the federation (Federation of Free
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Workers [FFW]). In finding no merit in petitioner’s contention, the High Court pointed
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out that Article 226 of the Labor Code clearly provides that the BLR (Director) and
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the Regional Directors of DOLE have concurrent jurisdiction over inter-union and
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intra-union disputes. Such disputes include the conduct or nullification of election of

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union and workers’ association officers. There is, thus, no doubt as to the BLR
(Director)’s jurisdiction over the instant dispute involving member-unions of a
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federation arising from disagreement over the provisions of the federation’s

constitution and by-laws. It agreed with the following observation of the BLR
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(Director):
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“Rule XVI lays down the decentralized intra-union dispute settlement

mechanism. Section 1 states that any complaint in this regard ‘shall be filed
in the Regional Office where the union is domiciled.’ The concept of
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domicile in labor relations regulation is equivalent to the place where the

union seeks to operate or has established a geographical presence for
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purposes of collective bargaining or for dealing with employers concerning

terms and conditions of employment.
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10 Referring to federations, national unions, industry unions and trade union centers, as distinguished from independent unions, local chapters
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and workers’ associations.

11 As distinguished from cases involving single-enterprise CBAs which fall under the jurisdiction of the DOLE Regional Director.
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“The matter of venue becomes problematic when the intra-union dispute
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involves a federation, because the geographical presence of a federation
may encompass more than one administrative region. Pursuant to its
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authority under Article 232 [226], this Bureau exercises original jurisdiction
over intra-union disputes involving federations. It is well-settled that FFW,
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having local unions all over the country, operates in more than one
administrative region. Therefore, this Bureau maintains original and exclusive
jurisdiction over disputes arising from any violation of or disagreement over
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any provision of its constitution and by-laws.”
APPELLATE JURISDICTION OF THE BLR DIRECTOR
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AS DISTINGUISHED FROM THAT OF THE DOLE SECRETARY
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• Necessity for jurisdictional distinctions.
The distinctions pointed out above between the respective jurisdictions of the Med-
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Arbiters, DOLE Regional Directors and the BLR Director acquire significance in
determining which of the cases over which they exercise jurisdiction may be appealed
to the BLR Director and those that may be appealed to the DOLE Secretary, both of
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e
whom, based on law and jurisprudence, are possessed of exclusive appellate
i
jurisdiction over certain cases decided by the Med-Arbiters, DOLE Regional Directors
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and BLR Director.
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The Supreme Court had occasion to distinguish the appellate jurisdiction of the BLR
R
Director from that of the DOLE Secretary in the case of Abbott Laboratories Philippines,
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Pr
Inc. v. Abbott Laboratories Employees Union. Accordingly, the appellate jurisdiction of
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the DOLE Secretary is limited only to the review of decisions rendered by the BLR
Director in the exercise of his exclusive and original jurisdiction. The DOLE Secretary has
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no jurisdiction over decisions of the BLR Director rendered in the exercise of his appellate
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jurisdiction over decisions made by Med-Arbiters and DOLE Regional Directors in the
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exercise of their respective original and exclusive jurisdictions, the reason being that
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such decisions are final and inappealable.

bl
• Appeals from decisions of Med-Arbiters

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o
o Decisions in the cases falling under the original and exclusive jurisdiction of the
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Med-Arbiters are appealable as follows:

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(1) Inter-union disputes (representation or certification election conflicts) – to DOLE

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Secretary
(a) Request for SEBA certification when made in an unorganized
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establishment with only one or more than one (1) legitimate union or in an
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organized establishment – to DOLE Secretary

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(b) Petition for certification election, consent election, run-off election or re-
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run election - to DOLE Secretary

(2) Intra-union disputes – to BLR Director
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(3) Other related labor relations disputes - to BLR Director

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(4) Injunction cases - to BLR Director

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(5) Contempt cases - to BLR Director

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o Different rule Re: Appellate jurisdiction over Med-Arbiter’s decisions in inter-union

disputes.
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▪ Legal basis.
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While generally, the decisions of the Med-Arbiters are appealable to the BLR Director,
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excepted therefrom are their decisions in inter-union disputes which are appealable
directly to the DOLE Secretary by virtue of Article 272 [259] of the Labor Code.
o
▪ Variance in the rule on appeal in unorganized and organized establishments.

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The rule on appeal in certification election cases in unorganized establishments is

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different from that of organized establishments, to wit:

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(1) Appeal in unorganized establishments. - The order granting the conduct of a
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certification election in an unorganized establishment is not subject to appeal.
Any issue arising from its conduct or from its results is proper subject of a protest.
ie
Appeal may only be made to the DOLE Secretary in case of denial of the petition
within ten (10) calendar days from receipt of the decision of denial.
ev
(2) Appeal in organized establishments. - The order granting the conduct of a
certification election in an organized establishment and the decision dismissing
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or denying the petition for certification election may be appealed to the DOLE
Secretary within ten (10) calendar days from receipt thereof.
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• Appeals from decisions of DOLE Regional Directors
o Decisions appealable to the BLR Director.
Not all decisions, awards or orders rendered by the DOLE Regional Directors are
n
appealable to the BLR Director. Only decisions in the following cases relevant and
io
related to labor relations, are appealable to the BLR Director:

(1) Visitorial cases under Article 289 [274], involving examination of books of
accounts of independent unions, local chapters/chartered locals and
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workers’ associations;12
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(2) Union registration-related cases, such as:
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a) Denial of applications for union registration of independent unions,
local chapters and workers’ associations;
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b) Revocation or cancellation of registration of said unions;
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(3) Notice of merger, consolidation, affiliation and change of name of said
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unions and or petition for denial thereof;
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(4) CBA-related cases, such as:

a) Application for registration of single-enterprise CBAs or petition for
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deregistration thereof;
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b) Petition for denial of registration of single-enterprise CBAs or denial of

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petition deregistration thereof.

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As far as No. 1 above is concerned, appellate authority over decisions of the DOLE
bl
Regional Directors involving examinations of union accounts is expressly conferred on

the BLR Director under the Rules of Procedure on Mediation-Arbitration, to wit:
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o
“RULE II
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MED-ARBITRATION
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“SEC. 3. Jurisdiction of the Regional Director. - The Regional Director shall

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exercise original and exclusive jurisdiction over application for union

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registration, petitions for cancellation of union registration and

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complaints for examination of union books of accounts.

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SEC. 4. Jurisdiction of the Bureau.-

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xxx
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“(b) The Bureau shall exercise appellate jurisdiction over all cases
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originating from the Regional Director involving union registration or

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cancellation of certificates of union registration and complaints for

examination of union books of accounts.”
The language of the law is categorical. Any additional explanation on the matter is
es
h
superfluous. It is thus clear then that the DOLE Secretary has no appellate jurisdiction
over decisions of DOLE Regional Directors involving petitions for examinations of union
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accounts.
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12 The BLR Director, not the DOLE Secretary, has the appellate authority over decisions of the DOLE Regional Directors involving examinations
of union accounts as provided under Rule II of the Rules of Procedure on Mediation-Arbitration, issued on April 10, 1992, to wit: “SEC. 3.
R
Jurisdiction of the Regional Director. - The Regional Director shall exercise original and exclusive jurisdiction over application for union
registration, petitions for cancellation of union registration and complaints for examination of unions books of accounts. SEC. 4. Jurisdiction of
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the Bureau. - xxx “(b) The Bureau shall exercise appellate jurisdiction over all cases originating from the Regional Director involving union
registration or cancellation of certificates of union registration and complaints for examination of union books of accounts.”
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o Cases not appealable to the BLR Director but to some other labor officials.
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For greater clarity in presentation and to avoid any confusion, it is worthy to mention
ie
that the decisions of the DOLE Regional Directors in the following cases which are not
related to labor relations are appealable to the DOLE Secretary and not to the BLR
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Director:
(a) Visitorial (inspection) cases under Article 37;
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(b) Visitorial (inspection) and enforcement cases13 under Article 128, (either
routine or initiated through a complaint);
(c) Occupational safety and health violations;
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(d) Cases related to private recruitment and placement agencies (PRPAs) for
local employment, such as:
n
1) Applications for license or denial thereof;
2) Complaints for suspension or cancellation of license by reason of
io
administrative offenses;
3) Complaints for illegal recruitment; and
4) Petition for closure of agency.
ss
e
Additionally, their decisions on small money claims cases arising from labor standards
i
fe
violations in an amount not exceeding ₱5,000.00 and not accompanied with a claim
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for reinstatement under Article 129 are appealable to the NLRC.
o
REMEDIES FROM DECISIONS OF BLR DIRECTOR AND DOLE SECRETARY
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RENDERED IN THEIR APPELLATE JURISDICTION
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• Appeals end with BLR director and DOLE secretary.
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Ba
o Notably, the remedy of appeal involved in the cases contemplated under Article Ba
232 [226] is available only up to the level of either the BLR Director or the DOLE
s
Secretary, as the case may be. Appeal to the CA from their decisions rendered in
their respective appellate jurisdictions is not available; the only remedy being the
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filing of an original special civil action for certiorari under Rule 65 of the Rules of
e
Court.
bl
o In the case of decisions rendered by the BLR Director in his appellate jurisdiction,
they can no longer be appealed to the DOLE Secretary because another appeal
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to the DOLE Secretary is not tenable anymore, the BLR Director’s decisions thereon
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having already become final and executory. r

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• Remedy from CA decisions to the Supreme Court.

There is only one mode to elevate labor cases from the CA to the Supreme Court and
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that is, through Rule 45 petition for review on certiorari.

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F. NATIONAL CONCILIATION AND MEDIATION BOARD

h
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• NCMB is not a quasi-judicial agency.

bl
C
o NCMB is not a quasi-judicial agency, according to the 2009 case of Tabigue v.

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International Copra Export Corporation.

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o “Quasi-judicial function” is a term which applies to the action, discretion, etc. of

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public administrative officers or bodies, who are required to investigate facts or

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ascertain the existence of facts, hold hearings, and draw conclusions from them
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as a basis for their official action and to exercise discretion of a judicial nature.
• Not being a quasi-judicial agency, NCMB’S rulings cannot be elevated to, and
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cognizable by, the Court of Appeals.

C
bl
o 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. Hence, NCMB’s decision, not having been rendered by
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a quasi-judicial body, cannot be elevated to the Court of Appeals under said

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rule.
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13 Visitorial cases involve inspection of establishments to determine compliance with labor standards; while enforcement cases involve issuance
of compliance orders and writs of execution.
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1. Jurisdiction
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• The NCMB is an agency attached to the DOLE principally in-charge of the
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settlement of labor disputes through conciliation, mediation and voluntary
arbitration. It is also charged with the promotion of voluntary approaches to labor
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dispute prevention and settlement
2. Conciliation as distinguished from mediation
R
• Conciliation and mediation, meaning.
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o Both the terms “conciliation” and “mediation” refer to a process whereby a third
person usually called Conciliator (in case of conciliation) or Mediator (in case of
n
mediation), intervenes in a dispute involving two or more conflicting parties for
io
the purpose of reconciling their differences or persuading them into adjusting or

settling their dispute. The Conciliator or Mediator normally does not make or
render any decision, his role being confined to the functions afore-described.
ss
e
• Distinction between conciliation and mediation.
i
fe
ev
o Generally, there are no marked distinctions between conciliation and
mediation. The reason is that in both cases, a neutral third party (called
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Conciliator or Mediator) is tasked to assist two or more opposing parties in finding
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appropriate resolution to a dispute.

Pr
o In the NCMB, the hearing officer is called Conciliator-Mediator. There is no
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Ba
separate classification between conciliators and mediators. When the

Conciliator-Mediator performs his task, he does not make any distinction when
Ba
s
he is acting as Conciliator or as Mediator.

es
o In other jurisdictions, the principal distinction between conciliation and

mediation lies on the extent of the power and authority granted to the neutral
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third party.
bl
o In mediation, the Mediator normally facilitates a deliberation or discussion of the

issues between the parties. He may or may not offer any opinions on the strength
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and weaknesses of each party's positions and arguments. Thus, mediation may
be classified into two, namely: r
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1. Facilitative Mediation where the Mediator does not make or offer any
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opinion; or
2. Evaluative Mediation where the Mediator offers an opinion which is not
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binding on the parties.

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It bears stressing, however, that regardless of which of the 2 methods above is

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chosen, the Mediator is not empowered to impose his will on the parties.
o In conciliation, the Conciliator is given more power and authority in that he may
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not only offer an opinion on the issues at hand but may actually make a binding
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opinion thereon provided the parties stipulate in advance to this effect. His
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opinion is based on the facts and the law involved in the controversy before him.
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o It may thus be observed that conciliation is more formal than mediation in the
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sense that the Conciliator’s opinion, unlike the Mediator’s, may be binding on
the parties, although it may be merely temporary in character.
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3. Preventive mediation
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• Preventive mediation as a remedy.
o “Preventive mediation,” as a remedy, is not found in the Labor Code. But under
o
the law which created the NCMB, it is expressly stated that one of its functions is
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to provide preventive mediation to disputing parties.

o The term “preventive mediation case” refers to the potential or brewing labor
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dispute which is the subject of a formal or informal request for conciliation and
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mediation assistance sought by either or both parties in order to remedy, contain
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or prevent its degeneration into a full blown dispute through amicable
settlement.
ie
• How to initiate preventive mediation.
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Preventive mediation proceeding may be initiated in two (2) ways:
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(1) By filing a notice or request of preventive mediation, as distinguished from a
notice of strike/lockout; or
(2) By conversion of the notice of strike/lockout into a preventive mediation
case.
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• Authority to convert a notice of strike/lockout into a preventive mediation case.
n
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The NCMB has the authority to convert a notice of strike/lockout filed by the
union/employer into a preventive mediation case under any of the following
circumstances:
ss
e
1. When the issues raised in the notice of strike/lockout are not strikeable in
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character.
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2. When the party which filed the notice of strike/lockout voluntarily asks for the
conversion.
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3. When both parties to a labor dispute mutually agree to have it subjected to
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preventive mediation proceeding.
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Pr
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Such authority is in pursuance of the NCMB’s duty to exert all efforts at mediation Ba
and conciliation to enable the parties to settle their dispute amicably and in line with
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the State policy of favoring voluntary modes of settling labor disputes.

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• Conversion of a Notice of Strike or Notice of Lockout into a preventive mediation

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case results in its dismissal.

bl
Once the notice of strike is converted into a preventive mediation case, the notice
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is deemed dropped from the dockets as if no notice of strike has been filed. Since
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there is no more notice of strike to speak about, any strike subsequently staged by
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the union after the conversion is deemed not to have complied with the
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requirements of a valid strike and therefore illegal.

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The same rule applies in the case of lockout by an employer.

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• Relevant cases.
h
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bl
A case in point is Philippine Airlines, Inc. v. Secretary of Labor and Employment,

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where the strike was declared illegal for lack of a valid notice of strike in view of the
NCMB’s conversion of said notice into a preventive mediation case.
o
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It is clear, according to San Miguel Corporation v. NLRC, that the moment the NCMB
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orders the preventive mediation in a strike case, the union thereupon loses the
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notice of strike it had filed. Consequently, if it still defiantly proceeds with the strike
while mediation is on-going, the strike is illegal.
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G. DOLE REGIONAL DIRECTORS

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1. Jurisdiction
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• Role of the DOLE Regional Directors.

o
The DOLE has a total of 16 Regional Offices nationwide each one of them is headed
R
by a Regional Director. The DOLE Regional Directors are the duly “authorized
representatives” of the DOLE Secretary referred to in Article 128 of the Labor Code
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which grants to them both visitorial and enforcement powers. They are in charge of
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the administration and enforcement of labor standards within their respective territorial
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jurisdictions.
ie
• Jurisdiction of the DOLE Regional Directors.
ev
The DOLE Regional Directors have original and exclusive jurisdiction over the following
cases:
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(a) Visitorial (inspection) cases under Article 37;
(b) Visitorial (inspection) and enforcement cases14 under Article 128, (either
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routine or initiated through a complaint);
(c) Visitorial cases under Article 289 [274], involving examination of books of
n
accounts of independent unions, local chapters/chartered locals and workers’
associations;
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(d) Occupational safety and health violations;

(e) Small money claims cases arising from labor standards violations in an amount
ss
e
not exceeding ₱5,000.00 and not accompanied with a claim for reinstatement
i
under Article 129;
fe
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(f) Cases related to private recruitment and placement agencies (PRPAs) for
local employment, such as:
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1) Applications for license or denial thereof;
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2) Complaints for suspension or cancellation of license by reason of
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administrative offenses;
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3) Complaints for illegal recruitment; and

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4) Petition for closure of agency;
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(g) Cases submitted for voluntary arbitration in their capacity as Ex-Officio

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Voluntary Arbitrators (EVAs) under Department Order No. 83-07, Series of 2007.
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(h) Union registration-related cases, such as:

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1) Applications for union registration of independent unions, local chapters and

li
workers’ associations;
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2) Petitions for denial of application for registration of said unions;15 r

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3) Petitions for revocation or cancellation of registration of said unions;

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(i) Notice of merger, consolidation, affiliation and change of name of said unions
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and or petition for denial thereof;

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(j) CBA-related cases, such as:

h
1) Application for registration of single-enterprise CBAs or petition for

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deregistration thereof;
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2) Petition for denial of registration of single-enterprise CBAs or denial of petition

for deregistration thereof; and
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(k) Request for SEBA certification when made in an unorganized establishment with
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only one (1) legitimate union.

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LABOR STANDARDS ENFORCEMENT CASES
• Subject of the visitorial and enforcement powers - the establishment and not the
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employees therein.
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o The subject of the visitorial and enforcement powers granted to the DOLE
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Secretary or his duly authorized representatives under Article 128 is the

establishment which is under inspection and not the employees thereof.
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14 Visitorial cases involve inspection of establishments to determine compliance with labor standards; while enforcement cases involve issuance
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of compliance orders and writs of execution.

15 Referring to independent unions, local chapters and workers’ associations, as distinguished from federations, national unions, industry unions,
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trade union centers and their local chapters/chartered locals, affiliates and member organizations whose application for registration as well as
denial or cancellation or revocation of registration is cognizable by the BLR Director in his original and exclusive jurisdiction [infra].
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o Consequently, any awards granted are not confined to employees who signed
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the complaint inspection but are equally applicable to all those who were
employed by the establishment concerned at the time the complaint was filed,
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even if they were not signatories thereto. The reason is that the visitorial and
enforcement powers are relevant to, and may be exercised over,
ev
establishments, not over individual employees thereof, to determine
compliance by such establishments with labor standards laws. Necessarily, in
case of an award from such violation by the establishment, all its existing
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employees should be benefited thereby. It must be stressed, however, that such
award should not apply to those who resigned, retired or ceased to be
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employees at the time the complaint was filed.
• Original jurisdiction
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The DOLE Regional Directors exercise original jurisdiction over the following:
(a) Cases involving inspection of establishments to determine compliance with

ss
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labor standards (Visitorial Power); and
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(b) Cases involving issuance of compliance orders and writs of execution
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(Enforcement Power).
o
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• Visitorial power of regional directors under Article 128(a).
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Pursuant to their visitorial power under Article 128(a), the DOLE Regional Directors
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shall have:
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(a) access to employer’s records and premises at any time of the day or night,
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whenever work is being undertaken therein; and

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(b) the right:

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(1) to copy from said records;

(2) to question any employee and investigate any fact, condition or matter
li
which may be necessary to determine violations or which may aid in the

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enforcement of the Labor Code and of any labor law, wage order, or rules r
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and regulations issued pursuant thereto.

O
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• Enforcement power of regional directors under Article 128(b).

et
The statutory basis of the authority of the DOLE Regional Directors to administer and
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enforce labor standards is found in Article 128(b) of the Labor Code, as amended.
h
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Pursuant thereto, the DOLE Regional Director, in cases where the employer-
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employee relationship still exists, shall have the power:

o
a. to issue compliance orders to give effect to the labor standards provisions

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of the Labor Code and other labor legislations based on the findings of labor
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employment and enforcement officers or industrial safety engineers made

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in the course of inspection.

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b. to issue writs of execution to the appropriate authority for the enforcement

of their orders, except in cases where the employer contests the findings of
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the labor employment and enforcement officer and raises issues supported
by documentary proofs which were not considered in the course of
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inspection, in which case, the contested case shall fall under the jurisdiction
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of the Labor Arbiter to whom it should be endorsed by the Regional Director.

c. to order stoppage of work or suspension of operations of any unit or
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department of an establishment when non-compliance with the law or

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implementing rules and regulations poses grave and imminent danger to

the health and safety of workers in the workplace. Within 24 hours, a hearing
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shall be conducted to determine whether an order for the stoppage of work

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or suspension of operations shall be lifted or not. In case the violation is
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attributable to the fault of the employer, he shall pay the employees
concerned their salaries or wages during the period of such stoppage of
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work or suspension of operation.
d. to require employers, by appropriate regulations, to keep and maintain such
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employment records as may be necessary in aid of his visitorial and
enforcement powers under the Labor Code.
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CASES SUBMITTED TO REGIONAL DIRECTORS AND ASSISTANT REGIONAL
DIRECTORS FOR VOLUNTARY ARBITRATION IN THEIR CAPACITY AS EX-OFFICIO
al VOLUNTARY ARBITRATORS (EVAs)
1. Jurisdiction.
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As EVAs, the DOLE Regional Directors and their Assistants have jurisdiction over the
io
following cases:
(a) All grievances arising from the interpretation or implementation of the CBA;
ss
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(b) All grievances arising from the interpretation or enforcement of company
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personnel policies which remain unresolved after exhaustion of the grievance
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procedure;
(c) Cases referred to them by the DOLE Secretary under the DOLE’s
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Administrative Intervention for Dispute Avoidance (AIDA) initiative (provided
under DOLE Circular No. 1, Series of 2006); and
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(d) Upon agreement of the parties, any other labor dispute may be submitted to
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the EVAs for voluntary arbitration.

Ba
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2. Recovery and adjudicatory power

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a. Small Money Claims Cases

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• Jurisdiction over claims not exceeding P5,000.

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The DOLE Regional Director has original jurisdiction over small money claims cases
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arising from labor standards violations in the amount not exceeding P5,000.00 and
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not accompanied with a claim for reinstatement under Article 129 of the Labor
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Code.
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Article 129 contemplates the recovery of wages and other monetary claims and
benefits, including legal interest, owing to an employee arising from employer-
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employee relations provided the claim does not exceed P5,000.00. Note must be
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made that under R.A. No. 10361, otherwise known as the Domestic Workers Act or
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Batas Kasambahay, jurisdiction over all labor-related disputes involving a

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kasambahay, including all money claims, illegal dismissal and other issues, is now
lodged entirely with the DOLE Regional Director. The Labor Arbiter has no more
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jurisdiction over small money claims of ₱5,000.00 or less. Consequently, any appeal
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therefrom should be done to the DOLE Secretary. (See Section 37, Chapter VII of R.A.
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No. 10361 and Section 1, Rule XI of this law’s Implementing Rules and Regulations).
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• Requisites for the valid exercise of jurisdiction by DOLE Regional Directors

under article 129.
The following requisites must all concur, to wit:
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(1) The claim is presented by an employee;

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(2) The claimant, no longer being employed, does not seek reinstatement; and
(3) The aggregate money claim of the employee does not exceed P5,000.00.
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In the absence of any of the aforesaid three (3) requisites, the Labor Arbiters have
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original and exclusive jurisdiction over all claims arising from employer-employee
relations, other than claims for employees’ compensation, social security,
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PhilHealth and maternity benefits.

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H. DOLE SECRETARY
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1. Jurisdiction
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• Powers of the DOLE secretary.
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The DOLE Secretary, being the head of the Department of Labor and Employment,
is possessed of a number of powers, some of which are mentioned in the syllabus,
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to wit:
1. Visitorial and enforcement powers;
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2. Power to suspend the effects of termination;
3. Assumption of jurisdiction;
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4. Appellate jurisdiction; and
5. Voluntary arbitration powers.
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• Cases falling under the DOLE secretary’s original jurisdiction.

ss
The DOLE Secretary has original jurisdiction over the following cases:
i e
(1) Petition to assume jurisdiction over labor disputes affecting industries
fe
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indispensable to the national interest (national interest cases);
(2) Petition to certify national interest cases to the NLRC for compulsory arbitration;
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(3) Petition to suspend effects of termination;
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(4) Administrative Intervention for Dispute Avoidance (AIDA) cases;
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(5) Voluntary arbitration cases; and
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(6) Contempt cases Ba

• Three (3) kinds of power under Article 128.
s
Article 128 of the Labor Code, as amended, basically enunciates the three (3)
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kinds of power which the DOLE Secretary and/or the Regional Directors, his duly
e
authorized representatives, may exercise in connection with the administration

bl
and enforcement of the labor standards provisions of the Labor Code and of any
labor law, wage order or rules and regulations issued pursuant thereto.
li
o
The three (3) kinds of power are as follows:

r
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1) Visitorial power:
2) Enforcement power: and
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3) Appellate power or power of review.

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• Who exercise the powers.

es
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Nos. 1 and 2 above are exercised under the original jurisdiction of the DOLE
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Regional Directors.
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This has been earlier discussed under the separate topic of “VII.
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PROCEDURE AND JURISDICTION, E. DOLE Regional Directors, 1.

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Jurisdiction”, supra. Hence, the same will no longer be touched under the
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instant topical discussion.

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The appellate power in No. 3 above may only be exercised by the DOLE Secretary
in respect to any decision, order or award issued by the DOLE Regional Directors.
2. Visitorial and enforcement powers
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• Nature of the visitorial and enforcement powers.

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The visitorial and enforcement powers granted to the DOLE Secretary and the
DOLE Regional Directors who are his duly authorized representatives, are quasi-
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judicial in nature.
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• It is the Regional Directors who have original jurisdiction to exercise the visitorial
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and enforcement powers under Articles 37, 128 and 274.
ie
In the instances contemplated under Articles 37, 128 and 274, it is the DOLE
Regional Directors, the DOLE Secretary’s duly authorized representatives
ev
commonly referred to in these three (3) articles, who have the original jurisdiction
to exercise the visitorial power granted therein.
R
• The role of the dole secretary in the exercise of visitorial and enforcement
powers is appellate in nature.
al
It is clear from the above disquisition that the original jurisdiction over the exercise
of the visitorial and enforcement powers belongs to the DOLE Regional Directors,
n
as the duly authorized representatives of the DOLE Secretary.
io
The role of the DOLE Secretary is confined to the exercise of his appellate
jurisdiction over the decisions, orders and awards of the DOLE Regional Directors in
ss
cases brought before them for adjudication under Articles 128 and 274.
i e
fe
3. Power to suspend effect of termination
ev
• Grounds.
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The DOLE Secretary may suspend the effects of termination pending resolution of
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the dispute in the event of a prima facie finding by the appropriate official of the
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DOLE before whom the dispute is pending that:

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1. the termination may cause a serious labor dispute; and/or
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2. the termination is in implementation of a mass lay-off.

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• Rationale for suspending the effects of termination.

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The obvious purpose behind this rule is to bring the parties back to the status quo
ante litem, that is, their state of relationship prior to the termination. In this way, the
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workers will be litigating the issue of the validity or legality of their termination on
more or less equal footing with the employer since they will be immediately r
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reinstated and accordingly not be deprived of their wages while the litigation is
on-going.
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• Reinstatement pending resolution of the termination dispute

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Suspension of the effects of termination will necessarily result in the immediate

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reinstatement of the terminated employees. An order of reinstatement pending

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resolution of the case may thus be issued by the DOLE Secretary pursuant to this
power.
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• Distinguished from dole secretary’s power of assumption or certification in

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national interest cases.

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o Different power of the DOLE Secretary.
This power of the DOLE Secretary granted under Article 277(b) should be
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distinguished from his power to assume or certify labor disputes involving industries
indispensable to the national interest under Article 263(g). The following distinctions
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may be cited:
First, the exercise of the power to suspend the effects of termination involves only
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the issue of termination of employment which may cause a serious labor dispute
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or is in implementation of a mass lay-off; while the power to assume or certify

labor disputes is applicable to all labor disputes, irrespective of the grounds
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176
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therefor, provided such labor disputes will cause or likely to cause strikes or
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lockouts in industries indispensable to the national interest.
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Second, the former requires the conduct of preliminary determination of the
existence of prima facie evidence that the termination may cause a serious
ev
labor dispute or is in implementation of a mass lay-off to be conducted by the
appropriate official of the DOLE before whom the termination dispute is
pending; while the latter does not require such preliminary prima facie
R
determination. In fact, prior notice and hearing are not required before the
DOLE Secretary may issue an assumption or certification order.
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Third, the “serious labor dispute” contemplated under the former may or may
not involve a strike or lockout; while the labor dispute referred to in the latter will
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cause or likely to cause a strike or lockout.
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Fourth, the former may be exercised in cases of termination of employment for

as long as any of the two (2) grounds mentioned in Article 277(b) exists,
ss
irrespective of the nature of the business of the employer; while the latter may
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only be exercised in industries indispensable to the national interest.
i
fe
ev
Fifth, the remedy under the former is immediate reinstatement pending
resolution of the termination case; while in the latter, the remedy is the automatic
o
R
return to work of the strikers or locked-out employees, if the strike or lock-out is
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on-going at the time of the issuance of the assumption/certification order or the

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enjoining of the strike or lockout, if one has not taken place, pending the
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Ba
resolution of the issues raised in the notice of strike or lockout.

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4. Appellate Jurisdiction
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a. Various appeals to the DOLE Secretary under the Labor Code and
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Applicable Rules
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• Offices from which appeals may originate.

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Appeals to the DOLE Secretary may originate from any of the following offices: r
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(1) DOLE Regional Directors;

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(2) Med-Arbiters;
(3) Director of the Bureau of Labor Relations (BLR); and
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(4) Philippine Overseas Employment Administration (POEA).

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• Cases not appealable to the DOLE Secretary

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The following decisions, awards or orders are not appealable to the Office of the
DOLE Secretary:
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(1) Those rendered by Labor Arbiters that are appealable to the Commission
(NLRC) which has exclusive appellate jurisdiction thereover;
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(2) Those rendered by the Commission (NLRC) since they can be elevated
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directly to the CA by way of a Rule 65 certiorari petition;

(3) Those rendered by the BLR Director in the exercise of his appellate jurisdiction
since they can be brought directly to the CA under Rule 65 certiorari
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petition;
(4) Those rendered by DOLE Regional Directors under Article 129 of the Labor
C
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Code since they are appealable to the NLRC;

(5) Those issued by DOLE Regional Directors in their capacity as Ex-Officio
Voluntary Arbitrators (EVAs) since they can be brought directly to the CA
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under Rule 43 of the Rules of Court; and

(6) Those rendered by Voluntary Arbitrators which are appealable directly to
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the CA under Rule 43 of the Rules of Court.

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b. Appeals from DOLE Regional Directors
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• Cases appealable to DOLE Secretary.
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Not all decisions, awards or orders rendered by the DOLE Regional Directors are
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appealable to the DOLE Secretary. Only those issued in the following cases are so
appealable:
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(a) Labor standards enforcement cases under Article 128;
(b) Occupational safety and health violations; and
(c) Complaints against private recruitment and placement agencies (PRPAs) for
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local employment.
• Cases not appealable to the DOLE Secretary
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As earlier pointed out, the following cases decided by the DOLE Regional Directors
are not appealable to the DOLE Secretary but to some other agencies/tribunals
indicated below:
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(a) Decisions in small money claims cases arising from labor standards violations
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in the amount not exceeding P5,000.00 and not accompanied with a claim
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for reinstatement under Article 129 are appealable to the NLRC;
(b) Decisions in cases submitted to DOLE Regional Directors for voluntary
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arbitration in their capacity as Ex-Officio Voluntary Arbitrators (EVAs) under
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Department Order No. 83-07, Series of 2007 may be elevated directly to the
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Court of Appeals by way of a Rule 43 petition. This is so because the DOLE
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Regional Directors, in so deciding, are acting as Voluntary Arbitrators; hence, Ba

what should apply are the rules on appeal applicable to voluntary
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arbitration.
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c. Appeals from decisions of Mediators-Arbiters (Med-Arbiters) and BLR

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director
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(NOTE: See discussion above in connection with the jurisdiction of the

Bureau of Labor Relations [BLR])
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d. Appeals from decisions of POEA

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• Cases appealable to the DOLE Secretary.

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The decisions in the following cases rendered by the Philippine Overseas

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Employment Administration (POEA) in its original jurisdiction are appealable to the

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DOLE Secretary:
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(a) Recruitment violations and other related cases. - All cases which are
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administrative in character, involving or arising out of violation of rules and

regulations relating to licensing and registration of recruitment and
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employment agencies or entities, including refund of fees collected from

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workers and violation of the conditions for the issuance of license to recruit
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workers.
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(b) Disciplinary action cases and other special cases which are administrative
in character, involving employers, principals, contracting partners and
Filipino migrant workers.
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It must be noted that the POEA ceased to have any jurisdiction over money claims
of OFWs, or those arising out of an employer-employee relationship or by virtue of
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any law or contract involving Filipino workers for overseas deployment including
claims for actual, moral, exemplary and other forms of damages. The jurisdiction
over these claims was transferred to the Labor Arbiters of the NLRC by virtue of
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Section 10 of R.A. No. 8042, as amended. Hence, appeals therefrom may be

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instituted to the Commission (NLRC).

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5. DOLE Secretary’s Voluntary Arbitration Powers
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(a) AIDA
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• New rule on voluntary settlement of cases by the DOLE Secretary
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A new form of dispute settlement by the DOLE Secretary was introduced by DOLE
Circular No. 1, Series of 2006. Called Administrative Intervention for Dispute
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Avoidance (AIDA), this is a new administrative procedure for the voluntary
settlement of labor disputes in line with the objectives of R.A. No. 9285, Executive
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Order No. 523 and the mandate of the DOLE to promote industrial peace.
• Nature of administrative intervention by DOLE Secretary.

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This recourse is separate from the established dispute resolution modes of

mediation, conciliation and arbitration under the Labor Code, and is an alternative
to other voluntary modes of dispute resolution such as the voluntary submission of
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a dispute to the Regional Director for mediation, to the NCMB for preventive
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mediation, or to the intervention of a regional or local tripartite peace council for
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the same purpose.
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• Parties who may request for DOLE Secretary’s intervention.
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Either or both the employer and the certified collective bargaining agent (or the
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representative of the employees where there is no certified bargaining agent) may
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voluntarily bring to the Office of the DOLE Secretary, through a Request for
Intervention, any potential or ongoing dispute defined below.
Ba
s
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• Potential or on-going dispute.

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A potential or on-going dispute refers to:

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i. a live and active dispute;

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ii. that may lead to a strike or lockout or to massive labor unrest; and
iii. is not the subject of any complaint or notice of strike or lockout at the time r
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a Request for Intervention is made.

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(b) Voluntary arbitration by DOLE Secretary.

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If the intervention through AIDA fails, either or both parties may avail themselves of
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the remedies provided under the Labor Code. Alternatively, the parties may submit
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their dispute to the Office of the DOLE Secretary for voluntary arbitration. Such
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voluntary arbitration should be limited to the issues defined in the parties'

submission to voluntary arbitration agreement and should be decided on the basis
of the parties' position papers and submitted evidence. The Office of the DOLE
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Secretary is mandated to resolve the dispute within sixty (60) days from the parties'
submission of the dispute for resolution.
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(c) Does the DOLE Secretary assume the role of voluntary arbitrator once he
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assumes jurisdiction over a labor dispute?
In the 2014 case of Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-
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Association of Genuine Labor Organizations (PWU-AGLO), this poser was answered

in the negative. A notice of strike was filed by respondent union which, after failure
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of conciliation and mediation by the NCMB, was referred by the Conciliator-

Mediator to the Office of the DOLE Secretary who thereby assumed jurisdiction
over the labor dispute. The case was resolved by the Acting DOLE Secretary in
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favor of respondent union. A motion for reconsideration was filed by petitioner

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company. The DOLE Secretary, however, declined to rule on the motion citing a
DOLE regulation, applicable to voluntary arbitration, which provided that the
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Voluntary Arbitrators’ decisions, orders, resolutions or awards shall not be the

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subject of motions for reconsideration. The DOLE Secretary took the position that
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when he assumed jurisdiction over the labor dispute, he was acting as a Voluntary
Arbitrator. Petitioner subsequently filed a Rule 65 certiorari petition with the CA. The
ie
CA, however, dismissed petitioner company’s Rule 65 certiorari petition on the
ground, among others, that the decision of the DOLE Secretary, having been
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rendered by him in his capacity as Voluntary Arbitrator, is not subject to a Rule 65
certiorari petition but to a Rule 43 petition for review which properly covers
decisions of Voluntary Arbitrators.
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Before the Supreme Court, petitioner asserted that, contrary to the CA’s ruling, the
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case is not a simple voluntary arbitration case. The character of the case, which
involves an impending strike by petitioner’s employees; the nature of petitioner’s
business as a public transportation company, which is imbued with public interest;
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the merits of its case; and the assumption of jurisdiction by the DOLE Secretary – all
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these circumstances removed the case from the coverage of Article 262, and
instead placed it under Article 263, of the Labor Code. For its part, respondent
union argued that the DOLE Secretary decided the assumed case in his capacity
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as Voluntary Arbitrator; thus, his decision, being that of a Voluntary Arbitrator, is
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only assailable via a petition for review under Rule 43.
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The Supreme Court, however, pronounced that:
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“It cannot be said that in taking cognizance of NCMB-NCR CASE No. NS-
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02-028-07, the Secretary of Labor did so in a limited capacity, i.e., as a
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voluntary arbitrator. The fact is undeniable that by referring the case to the
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Secretary of Labor, Conciliator-Mediator Aglibut conceded that the case fell

within the coverage of Article 263 of the Labor Code; the impending strike in
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Philtranco, a public transportation company whose business is imbued with
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public interest, required that the Secretary of Labor assume jurisdiction over
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the case, which he in fact did. By assuming jurisdiction over the case, the
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provisions of Article 263 became applicable, any representation to the

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contrary or that he is deciding the case in his capacity as a voluntary

arbitrator notwithstanding.”
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Consequently, the Supreme Court reversed and set aside the CA ruling and
reinstated the case and directed the CA “to resolve the same with deliberate r
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dispatch.”
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6. Remedies
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• The aggrieved party from a decision of the SOLE may file one motion for
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reconsideration within ten (10) days from receipt thereof.

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• If the motion for reconsideration is denied, the party may appeal via Rule 65 to
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the CA 60 days from receipt of the denial. Upon denial, the party may proceed
via Rule 45 to the SC. [Rule 65, ROC; St. Martin Funeral Home v. NLRC, G.R. No.
130866 (1998)]
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I. VOLUNTARY ARBITRATOR
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1. Jurisdiction
• Voluntary arbitration.
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“Voluntary arbitration” refers to the mode of settling labor-management disputes

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in which the parties select a competent, trained and impartial third person who is
tasked to decide on the merits of the case and whose decision is final and
executory. It is a third-party settlement of a labor dispute involving the mutual
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consent by the representatives of the employer and the labor union involved in a
labor dispute to submit their case for arbitration.
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• Voluntary arbitrator.
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o Who is a Voluntary Arbitrator?
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A “Voluntary Arbitrator” refers to:
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(1) any person who has been accredited by the National Conciliation and
Mediation Board (“NCMB” or “Board”) as such; or
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(2) any person named or designated in the CBA by the parties as their
Voluntary Arbitrator; or
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(3) one chosen by the parties with or without the assistance of the NCMB,
pursuant to a selection procedure agreed upon in the CBA; or
(4) one appointed by the NCMB in case either of the parties to the CBA
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refuses to submit to voluntary arbitration.
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This term includes a panel of Voluntary Arbitrators.

• Voluntary arbitrator acts in quasi-judicial capacity.
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Although not a part of a government unit or a personnel of the Department of
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Labor and Employment, a Voluntary Arbitrator, by the nature of his functions, acts
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in a quasi-judicial capacity. He is a means by which government acts, or by which
a certain government act or function is performed. He performs a state function
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pursuant to a governmental power delegated to him under the Labor Code. The
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landmark case of Luzon Development Bank v. Association of Luzon Development

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Bank Employees, clearly declared that a Voluntary Arbitrator, whether acting
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solely or in a panel, enjoys in law the status of a quasi-judicial agency.

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1. JURISDICTION
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• Original and exclusive jurisdiction.

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o In general.
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The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have exclusive and
original jurisdiction over the following cases: r
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(1) Unresolved grievances arising from the interpretation or implementation of

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the collective bargaining agreement (CBA).

(2) Unresolved grievances arising from the interpretation or enforcement of
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company personnel policies.

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(3) Violations of the CBA which are not gross in character.

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(4) Other labor disputes, including unfair labor practices and bargaining
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deadlocks, upon agreement of the parties.

(5) National interest cases.
(6) Wage distortion issues arising from the application of any wage orders in
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organized establishments.
(7) Unresolved grievances arising from the interpretation and implementation of
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the Productivity Incentive Programs under R.A. No. 6971.

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a. Jurisdiction over other labor disputes

Under Article 275 [262] of the Labor Code, upon agreement of the parties, the
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Voluntary Arbitrator or panel of Voluntary Arbitrators may also hear and decide all
other labor disputes, including unfair labor practices and bargaining deadlocks.
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For this purpose, before or at any stage of the compulsory arbitration process,
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parties to a labor dispute may agree to submit their case to voluntary arbitration.
b. Jurisdiction over national interest cases
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Article 278(g) [263(g)] of the Labor Code which involves the DOLE Secretary’s
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power of assumption of jurisdiction or certification to the NLRC of labor disputes

affecting industries indispensable to the national interest, also provides that
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“[b]efore or at any stage of the compulsory arbitration process, the parties may opt
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to submit their dispute to voluntary arbitration.”
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This means that even if the case has already been assumed by the DOLE Secretary
or certified to the NLRC for compulsory arbitration, or even during its pendency
therewith, the parties thereto may still withdraw the case from the DOLE Secretary
ev
or NLRC, as the case may be, and submit it to a Voluntary Arbitrator for voluntary
arbitration purposes.
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c. Jurisdiction over wage distortion cases
• al
Jurisdiction over wage distortion cases depends on whether the establishment
is organized or unorganized.
n
o In organized establishments, the employer and the union are required to
io
negotiate to correct the wage distortion. Any dispute arising from such wage
distortion should be resolved through the grievance procedure under the CBA
and if it remains unresolved, through voluntary arbitration.
ss
o In unorganized establishments, where there are no CBAs or recognized or
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certified collective bargaining unions, the jurisdiction is with the Labor Arbiter.
i
fe
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• Some principles.
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(1) Cases cognizable by Voluntary Arbitrators in their original jurisdiction but
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ERRONEOUSLY filed with Labor Arbiters, DOLE Regional Offices or NCMB should
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be disposed of by referring them to the Voluntary Arbitrators or panel of
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Voluntary Arbitrators mutually chosen by the parties.

(2) Cases cognizable by Voluntary Arbitrators but filed with regular courts should
Ba
s
be dismissed.
(3) THE WELL-ENTRENCHED RULE IS THAT WHEN A CASE DOES NOT INVOLVE THE
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PARTIES TO A CBA – REFERRING TO THE EMPLOYER AND THE BARGAINING UNION

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- IT IS NOT SUBJECT TO VOLUNTARY ARBITRATION. While individual or group of

bl
employees, without the participation of the union, are granted the right to bring
grievance directly to the employer, they cannot submit the same grievance, if
li
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unresolved by the employer, for voluntary arbitration without the union’s

approval and participation. The reason is that it is the union which is the party r
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Ba
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to the CBA, and not the individual or group of employees. - This rule was lately
affirmed in the 2009 case of Tabigue v. International Copra Export Corporation.
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Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name or
designate their respective representatives to the grievance machinery and if
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the grievance is unsettled in that level, it shall automatically be referred to the

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voluntary arbitrators designated in advance by parties to a

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CBA. Consequently only disputes involving the union and the company shall
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C
be referred to the grievance machinery or voluntary arbitrators.”

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2. Remedies
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• Reliefs and remedies that may be granted by Voluntary Arbitrators.

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Besides the procedural remedies discussed above, the Voluntary Arbitrator or

panel of Voluntary Arbitrators may grant the same reliefs and remedies granted by
Labor Arbiters under Article 279 of the Labor Code, such as:
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h
(1) In illegal dismissal cases:

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(a) Actual reinstatement;

(b) Separation pay in lieu of reinstatement, in case reinstatement becomes
impossible, non-feasible or impractical;
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(c) Full backwages;

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(d) Moral and exemplary damages; and

(e) Attorney’s fees.
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Legal Practitioner
(2) Monetary awards in monetary claims cases in which case, the decision
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should specify the amount granted and the formula used in the computation
thereof.
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J. PRESCRIPTION OF ACTIONS
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1. Money claims
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• Prescriptive period is three (3) years under Article 291 of the Labor Code. - The
prescriptive period of all money claims and benefits arising from employer-
employee relations is 3 years from the time the cause of action accrued;
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otherwise, they shall be forever barred.
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• All other money claims of workers prescribe in 3 years. - Article 291
contemplates all money claims arising from employer-employee relationship,
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including:
1. Money claims arising from the CBA.
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2. Incremental proceeds from tuition increases.
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3. Money claims of Overseas Filipino Workers (OFWs).
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fe
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Note must be made that in the 2010 case of Southeastern Shipping v. Navarra, Jr.,
the 1-year prescriptive period in Section 28 of POEA-SEC was declared null and
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void. The reason is that Article 291 of the Labor Code is the law governing the
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prescription of money claims of seafarers, a class of overseas contract workers. This
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law prevails over said Section 28.
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2. Illegal dismissal Ba
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• Legal basis is not Article 291 of the Labor Code but Article 1146 of the Civil Code.
- The 3-year prescriptive period in Article 291 solely applies to money claims but
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not to illegal dismissal cases which are not in the nature of money claims. The
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prescriptive period of illegal dismissal cases is 4 years under Article 1146 of the
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Civil Code.
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3. Unfair labor practice

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Ba
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• Prescriptive period of ULP cases is 1 year (Article 290, Labor Code). - The
prescriptive period for all complaints involving unfair labor practices is one (1)
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year from the time the acts complained of were committed; otherwise, they
shall be forever barred.
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• Pre-requisite for prosecution of criminal cases. - Before a criminal action for ULP
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may be filed, it is a condition sine qua non that a final judgment finding that an
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unfair labor practice act was committed by the respondent should first be
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secured or obtained in the labor case initiated before the Labor Arbiter or the
Voluntary Arbitrator, as the case may be. Final judgment is one that finally
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disposes of the action or proceeding. For instance, if the remedy of appeal is

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available but no appeal is made, then, the judgment is deemed final and
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executory. If an appeal is made, then the final judgment rendered by the last
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tribunal, say the Supreme Court, to which the case was elevated should be the
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reckoning factor.
• Interruption of prescriptive period of offenses. - As far as ULP cases are
concerned, the running of the one (1) year prescriptive period is interrupted
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during the pendency of the labor proceeding.

• Evidentiary value of the final judgment in the labor case. - In ULP cases, the final
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judgment in the labor case cannot be presented as evidence of the facts

proven therein or as evidence of the guilt of the respondent therein. Its
evidentiary or probative value is confined merely in proving the fact of
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compliance with the condition sine qua non prescribed by law, i.e., that a final
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judgment has been secured in the labor proceeding finding that an unfair labor
practice act was in fact committed by the respondent.
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4. Offenses under the Labor Code
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• Prescriptive period is 3 years (Article 290, Labor Code). - The prescriptive period
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of all criminal offenses penalized under the Labor Code and the Rules to
Implement the Labor Code is three (3) years from the time of commission
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thereof.
• Consequence of non-compliance with prescriptive period under Article 290. -
Failure to initiate or file the criminal action or complaint within the prescriptive
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period shall forever bar such action.
• Illegal dismissal is not an “offense” under Article 290. - The act of the employer
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in dismissing an employee without cause, although a violation of the Labor
Code and its implementing rules, does not amount to an “offense” as this term
is understood and contemplated under Article 290.
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5. Illegal recruitment
• Simple illegal recruitment cases. – The prescriptive period is five (5) years.
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• Illegal recruitment cases involving economic sabotage. – The prescriptive
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period is twenty (20) years.
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GOOD LUCK AND CONGRATULATIONS!

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n

UPDATED LAST-MINUTE NOTES FOR THE

protect the rights of workers and promote their welfare.”

an employment contract or when it invalidates a Quitclaim executed by a

worker because of unconscionably low consideration.

• Under Article III (Bill of Rights):

a. Freedom of speech, of expression, or of the press, or the right of the people

peaceably to assemble and petition the government for redress of

b. Right of public and private sector employees to form unions, associations, or

societies for purposes not contrary to law shall not be abridged.

employees’ right to self-organization.

c. Non-impairment of obligations of contracts.

The concept of this right in political law is similar in labor law.

d. Right to speedy disposition of cases in judicial, quasi-judicial or administrative

This can be invoked in labor cases at all levels, to wit:

(1) Before quasi-judicial or administrative bodies, such as:

a) Labor Arbiters, NLRC;

(2) Before judicial bodies, such as:

This means that:

against his will;

a) Full protection to labor, local and overseas, organized and unorganized;

b) Promotion of full employment;

c) Promotion of equality of employment opportunities for all;

3. peaceful concerted activities, including the right to strike in accordance

5. humane conditions of work;

7. participate in policy and decision-making processes affecting their rights

e) Promotion of 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.

f) Regulation of the relations between workers and employers, recognizing the

enterprises to reasonable returns to investments, and to expansion and

• Under Article 1700 of the Civil Code:

that labor contracts must yield to the common good.

shop, wages, working conditions, hours of labor and similar

In Davao Integrated Port Stevedoring Services v. Abarquez (March 19, 1993).

• Under Article 3 of Labor Code:

3. security of tenure; and

B. STATE POLICY TOWARDS LABOR

• R.A. No. 6657, (“Comprehensive Agrarian Reform Law”) Section 2:

development and industrialization, and the establishment of owner cultivatorship

of economic-size farms as the bass of Philippine agrculture.”

• Article II, Section 9 of the 1987 Constitution:

a rising standard of living, and an improved quality of life for all.”

• Article II, Section 10 of the 1987 Constitution

3. Equal work opportunities

• See also Article II, Section 9 of the 1987 Constitution as discussed

unlawful for any person to restrain, coerce, discriminate against or unduly

organizations for the purpose of collective bargaining through representatives of

Constitution, as discussed above.

5. Construction in favor of labor

• Under Article 1702 of the Civil Code.

• Article 4 of the Labor Code.

“Article 4. Construction in Favor of Labor. – All doubts in the implementation and

regulations, shall be resolved in favor of labor.”

• Follow this rule in interpreting and construing the following:

a. DOUBTS OR AMBIGUITIES IN LABOR CONTRACTS such as employment

contract and collective bargaining agreement (CBA); or