LABOR MIDTERMS MAGIC NOTES!
by: OWEN AND RACH 
PART 1: INTRODUCTORY MATERIALS
Section 1: Labor Law in General
1.01 LABOR LAW DEFINED
Bouvier’s Law Dictionary
LABOR. Continued operation; work.
2. The labor and skill of one man is frequently used in a partnership,
and valued as equal to the capital of another.
3. When business has been done for another, and suit is brought to
recover a just reward, there is generally contained in the declaration,
a count for work and labor.
4. Where penitentiaries exist, persons who have committed crimes
are condemned to be imprisoned therein at labor.
1.02 LAW CLASSIFICATION – LABOR STANDARDS, LABOR
RELATIONS, AND WELFARE LAWS
Books and Titles LABOR CODE OF THE PHILIPPINES PD 442 as
amended
Labor Standards
Penaranda v Baganga Plywood Corp
Article 82 of the Labor Code exempts managerial
employees from the coverage of labor standards. Labor standards
provide the working conditions of employees, including entitlement to
overtime pay and premium pay for working on rest days.
Batong Buhay Goldmines Inc v dela Serna
Labor standards refers to the minimum requirements
prescribed by existing laws, rules and regulations relating to wages,
hours of work, cost of living allowance and other monetary and
welfare benefits, including occupational, safety and health standards.
Labor standards cases are governed by Article 128(b) of the Labor
Code.
The subject labor standards case of the petition arose
from the visitorial and enforcement powers by the Regional Director
of DOLE. Even in the absence of E.O. 111, Regional Directors
already had enforcement powers over money claims, effective under
P.D. 850, issued on December 16, 1975, which transferred labor
standards cases from the arbitration system to the enforcement
system.
1.03 BASIS FOR ENACTMENT
1987 CONSTITUTION ART II SEC 5 The maintenance of peace
and order, the protection of life, liberty, and property, and promotion
1
of the general welfare are essential for the enjoyment by all the convenient, provided they are not contrary to law, morals, good
people of the blessings of democracy. customs, public order, or public policy.
1987 CONSTITUTION ART II SEC 18 The State affirms labor as
a primary social economic force. It shall protect the rights of workers Kasapian v CA
and promote their welfare. The MOA, being a contract freely entered into by the
parties, now constitutes as the law between them, and the
interpretation of its contents purely involves an evaluation of the law
1987 CONSTITUTION ART XIII SEC 1 The Congress shall give
as applied to the facts herein.
highest priority to the enactment of measures that protect and
C. Collective Bargaining Agreement
enhance the right of all the people to human dignity, reduce social,
economic, and political inequalities, and remove cultural inequities
DOLE Phils v Pawis ng Makabayang Obrero
by equitably diffusing wealth and political power for the common
The exercise of management prerogative is not unlimited.
good.
It is subject to the limitations provided by law. In this case, there was
To this end, the State shall regulate the acquisition, ownership, use,
and disposition of property and its increments. a CBA (meal allowance provision is found in their previous CBAs, the
1985-1988 CBA and the 1990-1995 CBA), and compliance therewith
is mandated by the express policy of the law.
Police Power
D. Past Practices
CMS Estate Inc v Social Security System
The Social Security Law was enacted pursuant to the
Davao Fruits Corp v Associated Labor Union
policy of the government "to develop, establish gradually and perfect
From 1975 to 1981, petitioner had freely, voluntarily and
a social security system which shall be suitable to the needs of the
continuously included in the computation of its employees' thirteenth
people throughout the Philippines, and shall provide protection
month pay, the payments for sick, vacation and maternity leaves,
against the hazards of disability, sickness, old age and death" (Sec.
premiums for work done on rest days and special holidays, and pay
2, RA 1161, as amended).
for regular holidays. The considerable length of time the questioned
Membership in the SSS is not a result of bilateral,
items had been included by petitioner indicates a unilateral and
consensual agreement where the rights and obligations of the
voluntary act on its part, sufficient in itself to negate any claim of
parties are defined by and subject to their will, RA 1161 requires
mistake.
compulsory coverage of employees and employers under the
System. It is actually a legal imposition on said employers and
Samahang Manggagawa v NLRC
employees, designed to provide social security to the workingmen.
Granted that private respondent TFM had granted an
The principle of non-impairment of the obligation of contract as
across-the-board increase pursuant to Republic Act No. 6727, that
provided in the Bill of Rights is not a proper defense, the enactment
single instance may not be considered an established company
being a lawful exercise of the police power of the State.
practice.
1.04 SOURCES OF LAW
American Wire and Cable Daily Rated Employees Union v American
A. Labor Code and Related Special Legislation I (Implementing
Wire and Cable Co Inc
Rules)
For a bonus to be enforceable, it has to be promised by
the employer and expressly agreed upon by the parties or it must
B. Contract
have a fixed amount and had been a long and regular practice on
the part of the employer. To be considered “regular practice” the
Art 1305 CC A contract is a meeting of minds between two persons giving of the bonus should have been done over a long period of
whereby one binds himself, with respect to the other, to give time and must be shown to have been consistent and deliberate.
something or to render some service. There was a downtrend in the amount given for service
awards. There was also a downtrend with respect to the holding of
Art 1306 CC The contracting parties may establish such Christmas parties as the locations were changed from paid venues
stipulations, clauses, terms and conditions as they may deem to free ones. The additional 35% premium pay for work during Holy
Week and Christmas season cannot be held to have ripened into a
 LABOR MIDTERMS MAGIC NOTES!
company practice that the petitioners have a right to demand. This
practice was only granted for two years and with the express
reservation from respondent corporation’s owner that it cannot
continue the same in view of the company’s current financial
condition.
Pag-asa Steel Works Inc v CA
To ripen into a company practice that is demandable as a
matter of right, the giving of the increase 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.
The only instance when petitioner admittedly
implemented a wage order despite the fact that the employees were
not receiving salaries below the minimum wage was under Wage
Order No. NCR-07. Petitioner, however, explains that it did so
because it was agreed upon in the CBA that should a wage increase
be ordered within six months from its signing, petitioner would give
the increase to the employees in addition to the CBA-mandated
increases. Respondent’s isolated act could hardly be classified as a
"company practice" or company usage that may be considered an
enforceable obligation.
E. Company Policies
China Banking Corp v Borromeo
Forfeiture of benefits/privileges may also be effected in
cases where infractions or violations were incurred in connection
with or arising from the application/availment thereof.
It is well recognized that company policies and
regulations are, unless shown to be grossly oppressive or contrary to
law, generally binding and valid on the parties and must be complied
with until finally revised or amended unilaterally or preferably through
negotiation or by competent authority.
1.05 LAW AND WORKER
Cebu Royal Plant v Minster of Labor
Sec. 8, Rule I, Book VI, of the Rules and Regulations
implementing the Labor Code: Disease as a ground for dismissal . —
Where the employee suffers from a disease and his continued
employment is prohibited by law or prejudicial to his health or to the
health of his co-employees, the employer shall not terminate his
employment unless there is a certification by a competent public
health authority that the disease is of such nature or at such a stage
that it cannot be cured within a period of six (6) months even with
proper medical treatment. If the disease or ailment can be cured
within the period, the employer shall not terminate the employee but
shall ask the employee to take a leave. The employer shall reinstate
by: OWEN AND RACH 
such employee to his former position immediately upon the
restoration of his normal health.
We agree that there was here an attempt to circumvent
the law by separating the employee after five months' service to
prevent him from becoming a regular employee, and then rehiring
him on probation, again without security of tenure. We cannot permit
this subterfuge if we are to be true to the spirit and mandate of social
justice. On the other hand, we have also the health of the public and
of the dismissed employee himself to consider. Hence, although we
must rule in favor of his reinstatement, this must be conditioned on
his fitness to resume his work, as certified by competent authority.
Sinco – Philippine Constitutional Law pp130-134
Bernas – 1987 Constitution of the Philippines: A Commentary pp
441-445
1.06 LABOR CASE
Lapanday Agricultural Development Corp v CA
The enforcement of the written contract does not fall under
the jurisdiction of the NLRC because the money claims involved
therein did not arise from employer-employee relations between the
parties and is intrinsically a civil dispute. Thus, jurisdiction lies with
the regular courts. The RTC has jurisdiction over the subject matter
of the present case. It is well settled in law and jurisprudence that
where no employer-employee relationship exists between the parties
and no issue is involved which may be resolved by reference to the
Labor Code, other labor statutes or any collective bargaining
agreement, it is the Regional Trial Court that has jurisdiction. While
the resolution of the issue involves the application of labor laws,
reference to the labor code was only for the determination of the
solidary liability of the petitioner to the respondent where no
employer-employee relation exists. Article 217 of the Labor Code as
amended vests upon the labor arbiters exclusive original jurisdiction
only over the following:
1. Unfair labor practices;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of
employment;
4. Claims for actual, moral exemplary and other form of
damages arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of this
Code, including questions involving legality of strikes and
lockouts; and
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6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other claims,
arising from employer-employee relations, including those of
persons in domestic or household service, involving an
amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for
reinstatement.
In all these cases, an employer-employee relationship is an
indispensable jurisdictional requisite.
Villamaria v CA
Under the boundary-hulog scheme, a dual juridical
relationship is created: that of employer-employee and vendor-
vendee. The Kasunduan did not extinguish the employer-employee
relationship of the parties extant before the execution of said deed.
The boundary system is a scheme by an owner/operator
engaged in transporting passengers as a common carrier to
primarily govern the compensation of the driver, that is, the latter’s
daily earnings are remitted to the owner/operator less the excess of
the boundary which represents the driver’s compensation. Under
this system, the owner/operator exercises control and supervision
over the driver. The management of the business is still in the hands
of the owner/operator, who, being the holder of the certificate of
public convenience, must see to it that the driver follows the route
prescribed by the franchising and regulatory authority, and the rules
promulgated with regard to the business operations. The fact that
the driver does not receive fixed wages but only the excess of the
“boundary” given to the owner/operator is not sufficient to change
the relationship between them. Indubitably, the driver performs
activities which are usually necessary or desirable in the usual
business or trade of the owner/operator. The existence of an
employment relation is not dependent on how the worker is paid but on the
presence or absence of control over the means and method of the work. The
amount earned in excess of the “boundary hulog” is equivalent to
wages and the fact that the power of dismissal was not mentioned in
the Kasunduan did not mean that private respondent never
exercised such power, or could not exercise such power.
1.07 CASE DECISION
Anino v NLRC
A decision should faithfully comply with Sec. 14, Art. VIII
of the Constitution. (No decision shall be rendered by any court [or
quasi-judicial body] without expressing therein clearly and distinctly
the facts of the case and the law on which it is based.)
The NLRC was definitely wanting in the observance of
the constitutional requirement. It merely raised a doubt on the motive
of the complaining employees and took "judicial notice that in one
area of Mindanao, the mining industry suffered economic difficulties."
 LABOR MIDTERMS MAGIC NOTES!
The factual and legal bases of public respondent's
conclusions were bereft of substantial evidence — the quantum of
proof in labor cases — its disposition is manifestly a violation of the
constitutional mandate and an exercise of grave abuse of discretion.
Such decision is a nullity.
EDI Staff Builders International Inc v Magsino
No undue sympathy is to be accorded to any claim of a
procedural misstep in labor cases. Such must be decided accdg to
justice and equity. Petitioners not implausibly ascribed to the fault of
counsel failure to file a position paper with Labor Arbiter. Court
deems it best to admit such evidence.
1.08 MANAGEMENT FUNCTION
Recognition
Gustilo v Wyeth Phils Inc
It is the employer’s prerogative to prescribe reasonable
rules and regulations necessary or proper for the conduct of its
business or concern to provide certain disciplinary measures to
implement said rules and to assure that the same be complied with.
At the same time, it is one of the fundamental duties of the employee
to yield obedience to all reasonable rules, orders, and instructions of
the employer, and willful or intentional disobedience thereof, as a
general rule, justifies rescission of the contract of service and the
preemptory dismissal of the employee.
In the case at bar, there is NO exceptional circumstances
to warrant the grant of financial assistance or separation pay to
petitioner. G did not only violate company disciplinary rules and
regulations. He falsified his employment application form by not
stating therein that he is the nephew of Mr. Danao, respondent
Wyeth’s Nutritional Territory Manager. G manifested his slack of
moral principle through his infractions. In simple term, he is
dishonest.
Philcor Employees Union v Phil Global Communications
PhilCom, being in the communications industry, is
engaged in a vital industry protected from strikes and lockouts by PD
823 as amended by PD 849. The Secretary had already assumed
jurisdiction. Striking employees defied the return-to-work order.
Regardless of their motives, validity of claims, or pending
motions, the striking employees should have ceased and desisted
from all acts undermining the authority granted to the Secretary
under Art. 263(g). A return-to-work order is immediately effective and
executory despite the filing of a motion for reconsideration. It must
be strictly complied with even during the pendency of any petition
questioning its validity. A return-to-work order imposes a duty that
must be discharged more than it confers a right that may be waived.
by: OWEN AND RACH 
While the workers may choose not to obey, they do so at the risk of
severing their relationship with their employer as it is valid ground for
dismissal. Art. 264(a) governs defiance of such order.
Limitations
DOLE Phils v Pawis
The exercise of management prerogative is not unlimited.
It is subject to the limitations provided by law. In this case, there was
a CBA (meal allowance provision is found in their previous CBAs, the
1985-1988 CBA and the 1990-1995 CBA), and compliance therewith
is mandated by the express policy of the law.
Valiao v CA
So irresponsible an employee like petitioner does not
deserve a place in the workplace, and it is within the management’s
prerogative of WNC to terminate his employment. Even as the law is
solicitous of the welfare of employees, it must also protect the rights
of an employer to exercise what are clearly management
prerogatives. As long as the company’s exercise of those rights and
prerogatives is in good faith to advance its interest and not for the
purpose of defeating or circumventing the rights of employees under
the laws or valid agreements, such exercise will be upheld.
1.9 COMPROMISE AND WAIVER
Art 227 LC Compromise agreements. Any compromise
settlement, including those involving labor`standard laws, voluntarily
agreed upon by the parties with the assistance of the Bureau or
the`regional office of the Department of Labor, shall be final and
binding upon the parties. The National
Labor Relations Commission or any court, shall not assume
jurisdiction over issues involved thereinexcept in case of non-
compliance thereof or if there is prima facie evidence that the
settlement was obtained through fraud, misrepresentation, or
coercion.
Art 2028 CC A compromise is a contract whereby the parties, by
making reciprocal concessions, avoid a litigation or put an end to
one already commenced.
Art 2036 CC A compromise comprises only those objects which are
definitely stated therein, or which by necessary implication from its
terms should be deemed to have been included in the same.
A general renunciation of rights is understood to refer only to those
that are connected with the dispute which was the subject of the
compromise.
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Acuna v CA
Quitclaims executed by the employees are commonly
frowned upon as contrary to public policy and ineffective to bar
claims for the full measure of the workers' legal rights, considering
the economic disadvantage of the employee and the inevitable
pressure upon him by financial necessity. Nonetheless, the so-called
"economic difficulties and financial crises" allegedly confronting the
employee is not an acceptable ground to annul the compromise
agreement unless it is accompanied by a gross disparity between
the actual claim and the amount of the settlement.
The petitioners were not in any way deceived, coerced or
intimidated into signing a quitclaim waiver in the amounts of
P13,640, P15,080 and P16,200 respectively. Nor was there a
disparity between the amount of the quitclaim and the amount
actually due the petitioners.
Oriental Ship Management Co Inc v CA
Pacta privata juri publico derogare non possunct. Private
agreements between parties cannot derogate from public right.
The law is solicitous of the welfare of employees because
they stand on unequal footing with their employers and are usually
left at the mercy of the latter. This is especially true of Filipino
migrant workers who, alone in a foreign country, might have no
adequate alternative resources even for their own personal daily
needs.
Hence, quitclaims signed by our migrant workers, such as
the Letters of Indemnity in the instant case, are viewed with strong
disfavor. Public policy dictates that they be presumed to have been
executed at the behest of the employer. It is the employer's duty to
prove that such quitclaims were voluntary. The employee's
acknowledgment of his termination with nary a protest or objection is
not enough to satisfy the requirement of voluntariness on his part.
Periquet v NLRC
Not all waivers and quitclaims are invalid as against
public policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties and
may not later be disowned simply because of a change of mind. It is
only where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the person
making the waiver did so voluntarily, with full understanding of what
he was doing, and the consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as a valid and
binding undertaking.
EMCO Plywood Corp v Abelgas
 LABOR MIDTERMS MAGIC NOTES!
The mere fact that the employees were not physically
coerced or intimidated does not necessarily imply that they freely or
voluntarily consented to the terms thereof.
The corporation, and not its employees, has the burden of
proving that the Quitclaims were voluntarily entered into. Because
the retrenchment was illegal and of no effect, the Quitclaims were
therefore not voluntarily entered into by respondents. Consent was
similarly vitiated by mistake or fraud.
Sarocam v Interorient Maritime
While petitioner may be correct in stating that quitclaims
are frowned upon for being contrary to public policy, the Court has,
likewise, recognized legitimate waivers that represent a voluntary
and reasonable settlement of a worker’s claim which should be
respected as the law between the parties. Where the person making
the waiver has done so voluntarily, with a full understanding thereof,
and the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as being a valid and binding
undertaking.
In the instant case, petitioner wrote the release and
quitclaim with his own hand. From the document itself, the element
of voluntariness in its execution is evident. Petitioner also appears
to have fully understood the contents of the document he was
signing, as the important provision thereof had been relayed to him
in Filipino.
Section 2: Labor and the Constitution
STATUTORY REFERENCE – 1935, 1973 AND 1987
CONSTITUTIONS
2.01 HISTORICAL BACKGROUND/RATIONALE
Antamoc Goldfields Mining Co v CIR
In Commonwealth Act No. 103, and by it, our Government
no longer performs the role of a mere mediator or intervenor but that
of the supreme arbiter. The policy of laissez faire has to some extent
given way to the assumption by the government of the right of
intervention even in contractual relations affected with public
interests. Justice Laurel in Ang Tibay, and National Workers
Brotherhood v Court of Industrial Relations, and National Labor
Union, Inc. states that our Constitution was adopted in the midst of
surging unrest and dissatisfaction resulting from economic and social
distress which was threatening the stability of governments the world
over. Embodying the spirit of the present epoch, general provisions
were inserted in the Constitution which are intended to bring about
the needed social and economic equilibrium between component
elements of society through the application of what may be termed
as the justitia communis advocated by Grotius and Leibnits many
by: OWEN AND RACH 
years ago to be secured through the counterbalancing of economic
and social forces and opportunities which should be regulated, if not
controlled, by the State or placed, as it were, in custodia societatis.
'The promotion of social justice to in sure the well-being and
economic security of all the people' was thus inserted as vital
principle in our Constitution. (Sec. 5, Art. II, Constitution)
2.02 NATURE OF PROVISION
PAL v Santos
The sympathy of the Court is on the side of the laboring
classes, not only because the Constitution imposes such sympathy,
but because of the one-sided relation between labor and capital. The
constitutional mandate for the promotion of labor is as explicit as it is
demanding. The purpose is to place the workingman on an equal
plane with management — with all its power and influence — in
negotiating for the advancement of his interests and the defense of
his rights. Under the policy of social justice, the law bends over
backward to accommodate the interests of the working class on the
humane justification that those with less privileges in life should have
more privileges in law. (in short, interpretation should be made in
favor of the laborers)
2.03 1987 CONSTITUTION
A. Labor Sector - Characterized
1987 CONSTITUTION ART II SEC 18 The State affirms labor as
a primary social economic force. It shall protect the rights of workers
and promote their welfare.
Bernas pp 92-95
B. Protection of Labor - Guarantees
1987 CONSTITUTION ART XIII Sec 3 The State shall afford full
protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law. They
shall be entitled to security of tenure, humane conditions of work,
and a living wage. They shall also participate in policy and decision-
making processes affecting their rights and benefits as may be
provided by law.
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The State shall promote the principle of shared responsibility
between workers and employers and the preferential use of
voluntary modes in settling disputes, including conciliation, and shall
enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in the fruits
of production and the right of enterprises to reasonable returns to
investments, and to expansion and growth.
1935 CONSTITUTION ART XIV Sec 6 The State shall afford
protection to labor, especially to working women, and minors, and
shall regulate the relations between the landowner and tenant, and
between labor and capital in industry and in agriculture. The State
may provide for compulsory arbitration.
1973 CONSTITUTION ART II Sec 9 The State shall afford
protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex,
race, or creed, and regulate the relation between workers and
employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and
humane conditions of work. The State may provide for compulsory
arbitration.
1987 CONSTITUTION ART XIII Sec 1 The Congress shall give
highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social,
economic, and political inequalities, and remove cultural inequities
by equitably diffusing wealth and political power for the common
good.
To this end, the State shall regulate the acquisition, ownership, use,
and disposition of property and its increments.
1987 CONSTITUTION ART II Sec 10 The State shall promote
social justice in all phases of national development.
1987 CONSTITUTION ART II Sec 18 The State affirms labor as a
primary social economic force. It shall protect the rights of workers
and promote their welfare.
Bernas The Constitution of the Republic of the Philippines pp. 1194-
1197
C. Social Justice
 LABOR MIDTERMS MAGIC NOTES!
1973 CONSTITUTION ART II Sec 6 The State shall promote
social justice to ensure the dignity, welfare, and security of all the
people. Towards this end, the State shall regulate the acquisition,
ownership, use, enjoyment, and disposition of private property, and
equitably diffuse property ownership and profits.
1935 CONSTITUTION ART II Sec 5 The promotion of social
justice to insure the well-being and economic security of all the
people should be the concern of the State.
1987 CONSTITUTION ART XIII Sec 1 The Congress shall give
highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social,
economic, and political inequalities, and remove cultural inequities
by equitably diffusing wealth and political power for the common
good.
To this end, the State shall regulate the acquisition, ownership, use,
and disposition of property and its increments.
1987 CONSTITUTION ART XIII Sec 2 The promotion of social
justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.
Definition – Social Justice
Calalang v Williams
Social Justice is “neither communism, nor despotism, nor
atomism, nor anarchy,” but the humanization of laws and the
equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least
be approximated.
Limits of Use
PLDT v NLRC
The policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the underprivileged.
At best it may mitigate the penalty but it certainly will not condone
the offense. Social justice cannot be permitted to be refuge of
scoundrels any more than can equity be an impediment to the
punishment of the guilty. Those who invoke social justice may do so
only if their hands are clean and motives blameless and not simply
because they happen to be poor. This great policy of our
Constitution is not meant for the protection of those who have proved
they are not worthy of it, like the workers who have tainted the cause
of labor with the blemishes of their own character.
by: OWEN AND RACH 
Agabon v NLRC
Prior to 1989 - the rule was that a dismissal or
termination is illegal if the employee was not given any notice.
In the 1989 case of Wenphil Corp. v. National Labor
Relations Commission - where the employer had a valid reason to
dismiss an employee but did not follow the due process requirement,
the dismissal may be upheld but the employer will be penalized to
pay an indemnity to the employee. This became known as the
Wenphil or Belated Due Process Rule.
On January 27, 2000, in Serrano - violation by the
employer of the notice requirement in termination for just or
authorized causes was not a denial of due process that will nullify
the termination. However, the dismissal is ineffectual and the
employer must pay full backwages from the time of termination until
it is judicially declared that the dismissal was for a just or authorized
cause.
The case at bar: Where the dismissal is for a just cause,
as in the instant case, the lack of statutory due process should not
nullify the dismissal, or render it illegal, or ineffectual. However, the
employer should indemnify the employee for the violation of his
statutory rights.
2.04 CONSTITUIONAL RIGHTS AND LABOR LAW
Management and the Constitution
Dayan v Bayer of the Phil Islands
The 2 notice and hearing rule is indispensable for a
dismissal to be validly effected, but if it is for a just and valid cause,
the failure to observe procedural requirements does not invalidate
the dismissal of the employee. Instead, he must be granted
separation pay. Whether reinstated or given separation pay, he
should be paid backwages if he has been laid off without written
notice 30 days in advance. For the omission, an appropriate sanction
should be imposed depending on the fact and gravity of the situation.
Manila Electric Company v Quisumbing
Additionally, we recognize that contracting out is not
unlimited; rather it is a prerogative that management enjoys subject
to well-defined legal limitations. As we have previously held, the
company can determine in its best business judgment whether it
should contract out performance of some if its work for as long as
the employer is motivated by good faith, and the contracting out
must not have been resorted to circumvent the law or must not have
been the result of malicious or arbitrary action.
Given these realities, we recognize that a balance already
exists in the parties’ relationship with respect to contracting out;
MERALCO has its legally defined and protected management
prerogatives while workers are guaranteed their own protection
5
through specific labor provisions and the recognition of limits to the
exercise of management prerogatives.
Agabon v NLRC
Sarocam v Interorient Maritime
Labor as Property
Asuncion v NLRC
A worker’s employment is property in the constitutional
sense. He cannot be deprived of his work without due process. In
order for the dismissal to be valid, not only must it be based on just
cause supported by clear and convincing evidence, the employee
must also be given an opportunity to be heard and defend himself. It
is the employer who has the burden of proving that the dismissal
was with just or authorized cause. The failure of the employer to
discharge this burden means that the dismissal is not justified and
that the employee is entitled to reinstatement and backwages.
Executive Secretary v CA
Due Process Requirements
Ang Tibay v CIR
Primary rights
(1) the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence
in support thereof.
(2) Not only must the party be given an opportunity to present his
case and to adduce evidence tending to establish the rights which he
asserts but the tribunal must consider the evidence presented.
(3) While the duty to deliberate does not impose the obligation to
decide right, it does imply a necessity which cannot be disregarded,
namely, that of having something to support it is a nullity, a place
when directly attached.
(4) Not only must there be some evidence to support a finding but
the evidence must be "substantial.
(5) The decision must be rendered on the evidence presented at the
hearing, or at least contained in the record and disclosed to the
parties affected.
(6) The Court of Industrial Relations or any of its judges, therefore,
must act on its or his own independent consideration of the law and
facts of the controversy, and not simply accept the views of a
subordinate in arriving at a decision.
(7) The Court of Industrial Relations should, in all controversial
questions, render its decision in such a manner that the parties to
the proceeding can know the various issues involved, and the
reasons for the decision rendered.
 LABOR MIDTERMS MAGIC NOTES!
Air Manila Inc v Balatbat
And this administrative due process is recognized to
include (a) the right to notice, be it actual or constructive, of the
institution of the proceedings that may affect a person's legal rights;
(b) reasonable opportunity to appear and defend his rights, introduce
witnesses and relevant evidence in his favor, (c) a tribunal so
constituted as to give him reasonable assurance of honesty and
impartiality, and one of competent jurisdiction; and (d) a finding or
decision by that tribunal supported by substantial evidence
presented at the hearing, or at least contained in the records or
disclosed to the parties affected.
Century Textile Mills v NLRC
The twin requirements for notice and hearing constitute
essential elements of due process in cases of employee dismissal:
the requirement of notice is intended to inform the employee
concerned of the employer’s intent and the reason for the proposed
dismissal; upon the other hand, the requirement of hearing affords
the employee the opportunity to answer his employer’s charges
against him and accordingly to defend himself.
Liberty of Contract and State Interference
Leyte Land Transportation v Leyte Farmers and Workers Union
The requisites of a valid dismissal are (1) the dismissal
must be for nay of the causes expressed in Art 282 LC, and (2) the
employee must be given an opportunity to be heard and to defend
himself. The substantive and procedural laws must be strictly
complied with before a worker can be dismissed from his
employment because what is at stake is not only the employee’s
position but his livelihood.
Victoriano v Elizalde Rope Workers Union
The prohibition on impairment of obligations by Statute is
not unqualified. It prohibits only unreasonable impairment. In spite
of the constitutional prohibition, the State continues to possess
authority to safeguard the vital interests of the people. The
reservation of essential attributes of sovereign power is read into
contracts as a postulate to the preservation of the legal order. The
contract clause of the Constitution must therefore be not only in
harmony with, but also in subordination to the reserved power of the
state to safeguard vital interests of the people. This has special
application to contract regulating relations between capital and labor
which are not merely contractual, and said labor contracts, for being
impressed with public interest, must yield to the common good.
Welfare State
by: OWEN AND RACH 
Alalayan v NPC
The welfare state concept is not alien to the philosophy
our Constitution. It is implicit in quite a few of its provisions. There is
the clause on the promotion of social justice to ensure the wellbeing
and economic security of all the people, as well as the pledge of
protection to labor with the specific authority to regulate the relations
between landowners and tenants and between labor and capital.
Laissez-faire
Employees Confederation of the Phils v National Wages and
Productivity Commission
Apparently, ECOP is of the mistaken impression that
Republic Act No. 6727 is meant to "get the Government out of the
industry" and leave labor and management alone in deciding wages.
The Court does not think that the law intended to deregulate the
relation between labor and capital for several reasons: (1 ) The
Constitution calls upon the State to protect the rights of workers and
promote their welfare; (2) the Constitution also makes it a duty of
the State "to intervene when the common goal so demands" in
regulating property and property relations; (3) the Charter urges
Congress to give priority to the enactment of measures, among other
things, to diffuse the wealth of the nation and to regulate the use of
property; (4) the Charter recognizes the "just share of labor in the
fruits of production;" (5) under the Labor Code, the State shall
regulate the relations between labor and management; (6) under
Republic Act No. 6727 itself, the State is interested in seeing that
workers receive fair and euitable wages; and (7) the Constitution is
primarily a document of social justice, and although it has recognized
the importance of the private sector, it has not embraced fully the
concept of laissez faire or otherwise, relied on pure market forces to
govern the economy; We can not give to the Act a meaning or intent
that will conflict with these basic principles.
Participation in Decision Making Process
PAL V NLRC
Indeed, industrial peace cannot be achieved if the
employees are denied their just participation in the discussion of
matters affecting their rights. Thus, even before Article 211 of the
Labor Code (P.D. 442) was amended by Republic Act No. 6715, it
was already declared a policy of the State: "(d) To promote the
enlightenment of workers concerning their rights and obligations . .
.as employees." This was, of course, amplified by Republic Act No.
6715 when it decreed the "participation of workers in decision and
policy making processes affecting their rights, duties and welfare."
PAL's position that it cannot be saddled with the "obligation" of
sharing management prerogatives as during the formulation of the
Code, Republic Act No. 6715 had not yet been enacted (Petitioner's
6
Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While
such "obligation" was not yet founded in law when the Code was
formulated, the attainment of a harmonious labor-management
relationship and the then already existing state policy of enlightening
workers concerning their rights as employees demand no less than
the observance of transparency in managerial moves affecting
employees' rights.
Section 3: Labor and the Civil Code
STATUTORY REFERENCE – Civil Code, RA 386
3.01 ROLE OF LAW
Art 1700 CC The relations between capital and labor are not merely
contractual. They are so impressed with public interest 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 shop, wages, working conditions, hours
of labor and similar subjects.
Labor Contracts
Brew Master International v NAFLU
Verily, relations between capital and labor are not merely
contractual. They are impressed with public interest and labor
contracts must, perforce, yield to the common good.
While the employer is not precluded from prescribing
rules and regulations to govern the conduct of his employees, these
rules and their implementation must be fair, just and reasonable.
PTTC v NLRC
An employer is free to regulate, according to his
discretion and best business judgment, all aspects of employment,
“from hiring to firing,” except in cases of unlawful discrimination or
those which may be provided by law
The petitioner’s policy of not accepting or considering as
disqualified from work any woman worker who contracts marriage
runs afoul of the test of, and the right against, discrimination,
afforded all women workers by our labor laws and by no less than
the Constitution.
Tolentino Vol 5 pp 277-278
3.02 EMPLOYER-EMPLYEE STANDARD OF CONDUCT
Art 1701 CC Neither capital nor labor shall act oppressively
against the other, or impair the interest or convenience of the public.
 LABOR MIDTERMS MAGIC NOTES!
Fair Treatment
General Bank and Trust Co v CA
Basically, the right of an employer to dismiss an employee differs
from and should not be confused with the manner in which such right
is exercised. It must not be oppressive and abusive since it affects
one’s person and property.
Star Paper Corp v Simbol
The absence of a statute expressly prohibiting marital
discrimination in our jurisdiction cannot benefit the petitioners. The protection
given to labor in our jurisdiction is vast and extensive that we cannot
prudently draw inferences from the legislature’s silence that married persons
are not protected under our Constitution and declare valid a policy based on
a prejudice or stereotype. Thus, for failure of petitioners to present
undisputed proof of a reasonable business necessity, we rule that the
questioned policy is an invalid exercise of management prerogative.
Mutual Obligation
Star Paper Corp v Simbol
Firestone tire and Rubber Co v Lariosa
The employer’s obligation to give him workers just
compensation and treatment carries with it the corollary right to
expect form the workers adequate work, diligence and good conduct.
Law Compliance
Sarmiento v Tuico
It is also important to emphasize that the return-to-work
order not so much confers a right as it imposes a duty; and while as
a right it may be waived, it must be discharged as a duty even
against the worker's will. Returning to work in this situation is not a
matter of option or voluntariness but of obligation
Employee Obedience and Compliance Employer Orders
PCIB v Jacinto
Any employee who is entrusted with responsibility by his
employer should perform the task assigned to him with care and
dedication. The lack of a written or formal designation should not be
an excuse to disclaim any responsibility for any damage suffered by
the employer due to his negligence. The measure of the
responsibility of an employee is that if he performed his assigned
task efficiently and according to the usual standards, then he may
not be held personally liable for any damage arising therefrom.
Failing in this, the employee must suffer the consequences of his
negligence if not lack of due care in the performance of his duties.
by: OWEN AND RACH 
GTE Directories Corp v Sanchez
To sanction disregard or disobedience by employees of a
rule or order laid down by management, on the pleaded theory that
the rule or order is unreasonable, illegal, or otherwise irregular for
one reason or another, would be disastrous to the discipline and
order that it is in the interest of both the employer and his
employees. Deliberate disregard or disobedience of rules, defiance
of management authority cannot be countenanced.
Gustilo v Wyeth Philippines
Employer Obligation
Lagniton v NLRC
The days are gone when the employee was at the mercy
of his employer and could be dismissed for the flimsiest reasons or
for no reason at all. The tyrannical employer is an anachronism in
this enlightened era. The employee today, once defenseless and
often oppressed, has found new strength in the protection of the law
and the proud realization that he performs a symbolic role with the
employer in their common enterprise. As such, he must be treated
not as a disdained subordinate but with the respect and fairness, if
not affection and gratitude, that is due to an equal partner.
Manega v NLRC
An employer can terminate the services of an employee
only for valid and just causes which must be supported by clear and
convincing evidence. The employer has the burden of proving that
the dismissal was indeed for a valid and just cause. Failure to do so
results in a finding that the dismissal was unjustified.
Special Steel Products v Villarea
ART. 116. Withholding of wages and kickbacks
prohibited. – It shall be unlawful for any person, directly or indirectly,
to withhold any amount from the wages (and benefits) of a worker or
induce him to give up any part of his wages by force, stealth,
intimidation, threat or by any other means whatsoever without the
worker’s consent.
An employer cannot simply refuse to pay the wages or
benefits of its employee because he has either defaulted in paying a
loan guaranteed by his employer; or violated their memorandum of
agreement; or failed to render an accounting of his employer’s
property.
l services, and the right to security in the event of unemployment,
Section 4: Labor and International Covenants (Labor
Standards and Welfare Law)
4.01 UNIVERSAL DECLARATION OF HUMAN RIGHTS
7
Art 3 Everyone has the right to life, liberty and security of person
Art 7 All are equal before the law and are entitled without any
discrimination to equal protection of the law. All are entitled to equal
protection against any discrimination in violation of this Declaration
and against any incitement to such discrimination.
Art 17 (1) Everyone has the right to own property alone as well as
in association with others.
(2) No one shall be arbitrarily deprived of his property.
Art 22 Everyone, as a member of society, has the right to social
security and is entitled to realization, through national effort and
international co-operation and in accordance with the organization
and resources of each State, of the economic, social and cultural
rights indispensable for his dignity and the free development of his
personality.
Art 23 (1) Everyone has the right to work, to free choice of
employment, to just and favourable conditions of work and to
protection against unemployment.
(2) Everyone, without any discrimination, has the right to equal pay
for equal work.
(3) Everyone who works has the right to just and favourable
remuneration ensuring for himself and his family an existence worthy
of human dignity, and supplemented, if necessary, by other means of
social protection.
(4) Everyone has the right to form and to join trade unions for the
protection of his interests.
Art 24 Everyone has the right to rest and leisure, including
reasonable limitation of working hours and periodic holidays with
pay.
Art 25 (1) Everyone has the right to a standard of living adequate
for the health and well-being of himself and of his family, including
food, clothing, housing and medical care and necessary social
sickness, disability, widowhood, old age or other lack of livelihood in
circumstances beyond his control.
 LABOR MIDTERMS MAGIC NOTES!
(2) Motherhood and childhood are entitled to special care and
assistance. All children, whether born in or out of wedlock, shall
enjoy the same social protection.
4.02 INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL AND
CULTURAL RIGHTS
PART III Art 6 1. The States Parties to the present Covenant
recognize the right to work, which includes the right of everyone to
the opportunity to gain his living by work which he freely chooses or
accepts, and will take appropriate steps to safeguard this right.
2. The steps to be taken by a State Party to the present Covenant to
achieve the full realization of this right shall include technical and
vocational guidance and training programmes, policies and
techniques to achieve steady economic, social and cultural
development and full and productive employment under conditions
safeguarding fundamental political and economic freedoms to the
individual.
PART III Art 7 The States Parties to the present Covenant
recognize the right of everyone to the enjoyment of just and
favourable conditions of work which ensure, in particular:
(a) Remuneration which provides all workers, as a minimum, with:
(i) Fair wages and equal remuneration for work of equal value
without distinction of any kind, in particular women being guaranteed
conditions of work not inferior to those enjoyed by men, with equal
pay for equal work;
(ii) A decent living for themselves and their families in accordance
with the provisions of the present Covenant;
(b) Safe and healthy working conditions;
(c) Equal opportunity for everyone to be promoted in his employment
to an appropriate higher level, subject to no considerations other
than those of seniority and competence;
(d) Rest, leisure and reasonable limitation of working hours and
periodic holidays with pay, as well as remuneration for public
holidays
PART III Art 9 The States Parties to the present Covenant
recognize the right of everyone to social security, including social
insurance.
by: OWEN AND RACH 
PART III Art 11 1. The States Parties to the present Covenant
recognize the right of everyone to an adequate standard of living for
himself and his family, including adequate food, clothing and
housing, and to the continuous improvement of living conditions. The
States Parties will take appropriate steps to ensure the realization of
this right, recognizing to this effect the essential importance of
international co-operation based on free consent.
2. The States Parties to the present Covenant, recognizing the
fundamental right of everyone to be free from hunger, shall take,
individually and through international co-operation, the measures,
including specific programmes, which are needed:
(a) To improve methods of production, conservation and distribution
of food by making full use of technical and scientific knowledge, by
disseminating knowledge of the principles of nutrition and by
developing or reforming agrarian systems in such a way as to
achieve the most efficient development and utilization of natural
resources;
(b) Taking into account the problems of both food-importing and
food-exporting countries, to ensure an equitable distribution of world
food supplies in relation to need.
4.03 INTERNATIONAL COVENANT ON CIVIL AND POLITICAL
RIGHTS
PART III Art 8 1. No one shall be held in slavery; slavery and the
slave-trade in all their forms shall be prohibited.
2. No one shall be held in servitude.
3. (a) No one shall be required to perform forced or compulsory
labour
(b) Paragraph 3 (a) shall not be held to preclude, in countries where
imprisonment with hard labour may be imposed as a punishment for
a crime, the performance of hard labour in pursuance of a sentence
to such punishment by a competent court.
(c) For the purpose of this paragraph the term "forced or compulsory
labour" shall not include:
(i) Any work or service, not referred to in sub-paragraph (b),
normally required of a person who is under detention in
consequence of a lawful order of a court, or of a person during
conditional release from such detention;
(ii) Any service of a military character and, in countries where,
conscientious objection is recognized, any national service required
by law of conscientious objectors;
(iii) Any service exacted in cases of emergency or calamity
threatening the life or well-being of the community;
(iv) Any work or service which forms part of normal civil obligations.
8
4.04 CONVENTIONS AND RECOMMENDATIONS OF THE
INTERNATIONAL LABOR ORGANIZATION (ILO)
International Conventions
International School Alliance of Educators v Quisumbing
The Constitution, Labor Code and the International
Covenant on Economic, Social, and Cultural Rights impregnably
institutionalize in this jurisdiction the long honored legal truism of
"equal pay for equal work." Persons who work with substantially
equal qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries. This rule applies to the
School, its "international character" notwithstanding.
Section 5: The Labor Code of the Philippines
5.01 Decree Title
Art 1 LC Name of Decree. This Decree shall be known as the
"Labor Code of the Philippines".
5.02 Effectivity
Art 2 LC Date of effectivity. This Code shall take effect six (6)
months after its promulgation.
5.3 Policy Declaration
Art 3 LC Declaration of basic policy. The State shall afford
protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race or creed and regulate the
relations between workers and employers. The State shall assure
the rights of workers to self organization, collective bargaining,
security of tenure, and just and humane conditions of work.
5.04 Applicability
Art 6 LC Applicability. All rights and benefits granted to workers
under this Code shall, except as may otherwise be provided herein,
apply alike to all workers, whether agricultural or nonagricultural. (As
amended by Presidential Decree No. 570-A, November 1, 1974)
Art 276 LC Government employees. The terms and conditions
of employment of all government employees, including employees of
government-owned and controlled corporations, shall be governed
 LABOR MIDTERMS MAGIC NOTES!
by the Civil Service Law, rules and regulations. Their salaries shall
be standardized by the National Assembly as provided for in the New
Constitution. However, there shall be no reduction of existing wages,
benefits and other terms and conditions of employment being
enjoyed by them at the time of the adoption of this Code.
1987 CONSTITUTION ART IXb Sec 2(1) The civil service
embraces all branches, subdivisions, instrumentalities, and agencies
of the Government, including government-owned or controlled
corporations with original charters.
Domestic and Overseas Workers
DMA Shipping Phils v Cabillar
Requisite Relationship
Uy v Bueno
The minutes of the depositors' meeting clearly showed
that Uy was a mere depositor of the bank. She was only elected as
officer of the Interim Board of Directors craeted by the association of
depositors with the sole task of rehabilitating the bank (which is
under receivership).
The act of dismissing Bueno by Uy cannot be deemed
as an act as an officer of the bank. Consequently, it cannot be held
that there existed an employer-employee relationship between Uy
and Bueno.
The requirement of employer-employee relationship is
jurisdictional for the provisions of the Labor Code on Post-
employment to apply. Since such relationship was not established,
the labor arbiter never acquired jurisdiction over Uy.
Test – GOCC
Cabrera v NLRC
The rule now is that only government-owned or controlled
corporations with original charters come under the Civil Service. The
NASECO having been organized under the Corporation Law and not
by virtue of a special legislative charter, its relations with its
personnel are governed by the Labor Code and come under the
jurisdiction of the National Labor Relations Commission.
Gamogamo v PNOC Shipping and Transport
The Court cannot uphold petitioner’s contention that his
14 years of service with the DOH should be considered because his
last 2 employers were government-owned and controlled
corporations and fall under the Civil Service Law. Article IX (B),
Section 2 paragraph 1 of the 1987 Constitution states: “The civil
by: OWEN AND RACH 
service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government, including government owned or
controlled corporations with original charters”. While respondent and
LUSTEVECO are government-owned and controlled corporations,
they have no original charters; hence, they are not under the Civil
Service Law
Light Railway Transit Authority v Venus
LRTA is a government-owned and controlled corporation
with an original charter, Executive Order No. 603, Series of 1980, as
amended, and thus under the exclusive jurisdiction only of the Civil
Service Commission, not the NLRC.
Under the present state of the law, the test in determining
whether a government-owned or controlled corporation is subject to
the Civil Service Law is the manner of its creation such that
government corporations created by special charter are subject to its
provisions while those incorporated under the general Corporation
Law are not within its coverage.”
International Agencies
Ebro III v NLRC
The grant of immunity from local jurisdiction to ICMC . . .
is clearly necessitated by their international character and respective
purposes. The objective is to avoid the danger of partiality and
interference by the host country in their internal workings. The
exercise of jurisdiction by the Department of Labor in these
instances would defeat the very purpose of immunity, which is to
shield the affairs of international organizations, in accordance with
international practice, from political pressure or control by the host
country to the prejudice of member State of the organization, and to
ensure the unhampered performance of their functions. (International
Catholic Migration Commission v. Calleja)
School Teachers
National Mines and Allied Workers Union v San Ildefonso College
On the issue of whether the individual petitioners were
permanent employees, it is the Manual of Regulations for Private
Schools, and not the Labor Code, which is applicable. This was
settled in University of Sto. Tomas v. NLRC , where we explicitly
ruled that for a private school teacher to acquire permanent status in
employment and, therefore, be entitled to security of tenure, the
following requisites must concur: (1) the teacher is a full-time
teacher; (2) the teacher must have rendered three (3) consecutive
years of service; and (3) such service must have been satisfactory.
Chiang Kai Shek College v CA
9
Under the Manual of Regulations for Private Schools, for
a private school teacher to acquire a permanent status of
employment and, therefore, be entitled to a security of tenure, the
following requisites must concur: (a) the teacher is a full-time
teacher; (b) the teacher must have rendered three consecutive years
of service; and (c) such service must have been satisfactory. Since
Ms. Belo has measured up to these standards, she therefore enjoys
security of tenure.
Religious Corporations
Austria v NLRC
An ecclesiastical affair is one that concerns doctrine, creed or
form or worship of the church, or the adoption and enforcement
within a religious association of needful laws and regulations for the
government of the membership, and the power of excluding from
such associations those deemed unworthy of membership. Based
on this definition, an ecclesiastical affair involves the relationship
between the church and its members and relate to matters of faith,
religious doctrines, worship and governance of the congregation.
Managerial Employees
Penaranda v Baganga Plywood Corp
The Implementing Rules of the Labor Code state that
managerial employees are those who meet the following conditions:
“(1) Their primary duty consists of the management of the
establishment in which they are employed or of a department or
subdivision thereof;
“(2) They customarily and regularly direct the work
of two or more employees therein;
“(3) They have the authority to hire or fire other
employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as to
the promotion or any other change of status of other
employees are given particular weight.”
The Implementing Rules of the Labor Code define
members of a managerial staff as those with the following duties and
responsibilities:
“(1) The primary duty consists of the performance of work directly
related to management policies of the employer;
“(2) Customarily and regularly exercise discretion and
independent judgment;
“(3) (i) Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the management of the
establishment in which he is employed or subdivision thereof; or
(ii) execute under general supervision work along specialized or
technical lines requiring special training, experience, or
 LABOR MIDTERMS MAGIC NOTES!
knowledge; or (iii) execute under general supervision special
assignments and tasks; and
“(4) who do not devote more than 20 percent of their hours
worked in a workweek to activities which are not directly and
closely related to the performance of the work described in
paragraphs (1), (2), and (3) above.”
5.05 RULE MAKING POWER
Art 5 LC Rules and regulations. The Department of Labor and
other government agencies charged with the administration and
enforcement of this Code or any of its parts shall promulgate the
necessary implementing rules and regulations. Such rules and
regulations shall become effective fifteen (15) days after
announcement of their adoption in newspapers of general
circulation.
Limitation – Rule Making Power
CBTC Employees Union v Clave
Aforementioned section and interpretative bulletin are null
and void, having been promulgated by the then Secretary of Labor in
excess of his rule-making authority . It was pointed out, inter alia, that
in the guise of clarifying the provisions on holiday pay, said rule and
policy instructions in effect amended the law by enlarging the scope
of the exclusions.
Sonza v ABS-CBN
Policy Instruction No. 40 by Minister of Labor said the types of
employees in broadcast are the station and program employees.
Court said this instruction is a mere executive issuance not binding
on the Court.
Rizal Empire Insurance Group v NLRC
Administrative regulations and policies enacted by
administrative bodies to interpret the law which they are entrusted to
enforce, have the force of law, and are entitled to great respect
5.06 LAW INTERPRETATION
Art 4 LC Construction in favor of labor. All doubts in the
implementation and interpretation of the provisions of this Code,
including its implementing rules and regulations, shall be resolved in
favor of labor.
by: OWEN AND RACH 
Art 1702 CC In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living
for the laborer.
Tolentino Vol 5 p 279
Liberal Construction
Duncan v Association v Glaxo Wellcome
The prohibition against personal or marital relationships
with employees of competitor companies upon Glaxo’s employees is
reasonable under the circumstances because relationships of that
nature might compromise the interests of the company. In laying
down the assailed company policy, Glaxo only aims to protect its
interests against the possibility that a competitor company will gain
access to its secrets and procedures.
That Glaxo possesses the right to protect its economic
interests cannot be denied. No less than the Constitution recognizes
the right of enterprises to adopt and enforce such a policy to protect
its right to reasonable returns on investments and to expansion and
growth. Indeed, while our laws endeavor to give life to the
constitutional policy on social justice and the protection of labor, it
does not mean that every labor dispute will be decided in favor of the
workers. The law also recognizes that management has rights which
are also entitled to respect and enforcement in the interest of fair
play.
Salinas v NLRC
It is basic and irrefragable rule that in carrying out and
interpreting the provisions of the Labor Code and its implementing
regulations, the workingman's welfare should be the primordial and
paramount consideration. The interpretation herein made gives
meaning and substance to the liberal and compassionate spirit of the
law enunciated in Article 4 of Labor Code that "all doubts in the
implementation and interpretation of the provisions of the Labor
Code including its implementing rules and regulations shall be
resolved in favor of labor".
In favor Labor – Rationale
Abella v NLRC
In any event, it is well-settled that in the implementation
and interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should be the
primordial and paramount consideration. It is the kind of
interpretation which gives meaning and substance to the liberal and
compassionate spirit of the law as provided for in Article 4 of the New
Labor Code which states that `all doubts in the implementation and
10
interpretation of the provisions of this Code including its
implementing rules and regulations shall be resolved in favor of
labor." The policy is to extend the applicability of the decree to a
greater number of employees who can avail of the benefits under the
law, which is in consonance with the avowed policy of the State to
give maximum aid and protection to labor.
Asian Transnational Corp v CA
In any event, Art. 4 of the Labor Code provides that all
doubts in the implementation and interpretation of its provisions,
including its implementing rules and regulations, shall be resolved in
favor of labor. For the working man’s welfare should be the
primordial and paramount consideration.
Doubt
Clemente v GSIS
GSIS’s conservative stand is not consistent with the
liberal interpretation of the Labor Code and the social justice
guarantee embodied in the Constitution in favor of workers.
Acuna v CA
It is a time-honored rule that in controversies between a
worker and his employer, doubts reasonably arising from the
evidence, or in the interpretation of agreements and writing should
be resolved in the worker's favor. The policy is to extend the
applicability of the decree to a greater number of employees who
can avail of the benefits under the law, which is in consonance with
the avowed policy of the State to give maximum aid and protection to
labor. Accordingly, the private respondents are solidarily liable with
the foreign principal for the overtime pay claims of petitioners.
No Doubt
Bonifacio v GSIS
While the court does not dispute petitioner's contention
that under the law, in case of doubt in the implementation and
interpretation of the provisions of the Labor Code, including its
implementing rules and regulations, the doubt shall be resolved in
favor of the laborer, the court finds that the same has no application
in this case since the pertinent provisions of the Labor Code leave
no room for doubt either in their interpretation or application.
Sweeping Interpretation
Bravo Employees Compensation Commission
 LABOR MIDTERMS MAGIC NOTES!
We are aware of the mandate that social legislation
should be applied in consonance with the principles of social justice
and protection to labor. However, we cannot adopt a sweeping
interpretation of the law in favor of labor lest we engage in judicial
legislation.
Factual Consideration
PAL v NLRC
That there should be care and solicitude in the protection
and vindication of the rights of workingmen cannot be gainsaid; but
that care and solicitude cannot justify disregard of relevant facts or
eschewal of rationality in the construction of the text of applicable
rules in order to arrive at a disposition in favor of an employee who is
perceived as otherwise deserving of sympathy and commiseration.
Equity and Moral Consideration
Manning International Corp v NLRC
Considerations of equity and social justice” cannot prevail
over against the expressed provision of the labor laws allowing
dismissal of employees for cause and without any provision for
separation pay.
Fairness
Reliance Surety and Insurance Co v NLRC
The sympathy of the Court is on the side of the laboring
classes, not only because the Constitution imposes sympathy but
because of the one-sided relation between labor and capital. The
Court must take care, however, that in the contest between labor and
capital, the results achieved are fair and in conformity with the rules.
Balancing Conflicting Claims
PAL v NLRC
That there should be care and solitude in the protection
and vindication of the rights of workingmen cannot be gainsaid; but
that care and solicitude cannot justify disregard of relevant facts or
eschewal of rationality in the construction of the text of applicable
rules in order to arrive at a disposition in favor of an employee who is
perceived as otherwise deserving of sympathy and commiseration.
Duncan Association v Glaxo Wellcome
The sympathy of the Court is on the side of the laboring
classes, not only because the Constitution imposes sympathy but
because of the one-sided relation between labor and capital. The
Court must take care, however, that in the contest between labor and
capital, the results achieved are fair and in conformity with the rules.
by: OWEN AND RACH 
Section 6: Work Relationship
STATUTORY REFERENCE
Art 106 (4) LC There is "labor-only" contracting where the person
supplying workers to an employer does not have substantial capital
or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed by
such person are performing activities which are directly related to the
principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer
who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
Art 107 LC Indirect employer. The provisions of the immediately
preceding article shall likewise apply to any person, partnership,
association or corporation which, not being an employer, contracts
with an independent contractor for the performance of any work,
task, job or project.
Art 109 LC Solidary liability. The provisions of existing laws to
the contrary notwithstanding, every employer or indirect employer
shall be held responsible with his contractor or subcontractor for any
violation of any provision of this Code. For purposes of determining
the extent of their civil liability under this Chapter, they shall be
considered as direct employers.
6.01 WORK RELATIONSHIP
A. Definitions
Art 97 LC a. "Person" means an individual, partnership, association,
corporation, business trust, legal representatives, or any organized
group of persons.
b. "Employer" includes any person acting directly or indirectly in the
interest of an employer in relation to an employee and shall include
the government and all its branches, subdivisions and
instrumentalities, all government-owned or controlled corporations
and institutions, as well as non-profit private institutions, or
organizations.
c. "Employee" includes any individual employed by an employer.
Art 167 LC f. "Employer" means any person, natural or juridical,
employing the services of the employee.
11
g. "Employee" means any person compulsorily covered by the GSIS
under Commonwealth Act Numbered One hundred eighty-six, as
amended, including the members of the Armed Forces of the
Philippines, and any person employed as casual, emergency,
temporary, substitute or contractual, or any person compulsorily
covered by the SSS under Republic Act Numbered Eleven hundred
sixty-one, as amended.
Art 212 LC e. "Employer" includes 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 acting
as employer.
f. "Employee" includes any person in the employ of an employer. The
term shall not be limited to the employees of a particular employer,
unless the Code so explicitly states. It shall include any individual
whose work has ceased as a result of or in connection with any
current labor dispute or because of any unfair labor practice if he has
not obtained any other substantially equivalent and regular
employment.
Policy Instruction No. 40 (1979) – Employment in Broadcast
Industry Program employees are those whose skills, talents or
services are engaged by the station for a particular or specific
program or undertaking and who are not required to observe normal
working hours such that on some days they work for less than eight
(8) hours and on other days beyond the normal work hours observed
by station employees and are allowed to enter into employment
contracts with other persons, stations, advertising agencies or
sponsoring companies. The engagement of program employees,
including those hired by advertising or sponsoring companies, shall
be under a written contract specifying, among other things, the
nature of the work to be performed, rates of pay, and the
programs in which they will work. The contract shall be duly
registered by the station with the Broadcast Media Council
within three days from its consummation.
Employee
United Pepsi-Cola Supervisory Union v Laguesma
The term “manager” generally refers to “anyone who is
responsible for subordinates and other organization resources.” As a
class, managers constitute three levels of a pyramid.
What distinguishes them from the rank-and file
employees is that they act in the interest of the employer in
supervising such rank-and-file employees
 LABOR MIDTERMS MAGIC NOTES!
Managerial employees” may therefore be said to fall into
two distinct categories: the “managers” per se, who compose the
former group described above, and the “supervisors” who form the
latter group. Whether they belong to the first or second category,
managers, vis-à-vis employers, are, likewise, employees
B. Employer-Employee Relationship
Factual Test
Sonza v ABS-CBN
There are 4 elements of employer-employee relationship:
1. Selection of employee
- if Sonza didn’t possess his skills, talents and celebrity status,
ABS-CBN would not have entered into agreement with him but
would have hired him through personnel department
2. Payment of wages
- whatever Sonza received arose from the contract and not
from the employer-employee relation
- the talent fee is so huge that it indicates more a contractual
than an employment relationship
3. Power to dismiss
- ABS-CBN couln’t retrench Sonza because it is obligated to
pay talent fees for duration of contract
4. Control on employee on means and methods
- also called control test; most impt to determine relationship
- Sonza contends ABS exercised control over means and
methods of his work. Court said ABS merely reserved the right
to modify the program format and airtime schedule. Its sole
concern was the quality of the show and the ratings. How
Sonza appeared, sounded, etc. is outside control of ABS.
- Sonza contends that ABS exercised control in providing
equipment and crew. Court said these are not tools needed by
Sonza. What he needed were his talent, skills, costume.
- Sonza contends that ABS subjected him to rules and
standards. Court said that the rules are the TV and Radio
Code of the Kapisanan ng Broadcaster sa Pilipinas, merely
adopted by ABS as its code of ethics. It applies to
broadcasters, not just to ABS employees. Besides, these rules
are merely guidelines.
- Sonza said his exclusivity is a form of control by ABS. Court
said exclusivity is a widespread practice in entertainment
industry, as protection of investment in “building up” a talent.
Besides, the huge talent fees of an exclusive talent
compensates for exclusivity.
Asiatic Development Corp v Brogada
The question of WON an employer-employee relationship
exists is a question of fact. In petitions for review on certiorari under
by: OWEN AND RACH 
Rule 45, only questions of law may be raised by the parties and
passed upon by this Court. Factual findings of quasi-judicial bodies,
when adopted and confirmed by the CA and if supported by
substantial evidence, are accorded respect and even finality by this
Court.
Villavilla v CA
The records disclose that the relationship between
Mercado and the crew members of the ship headed by its skipper,
Capt. Pedro Matibag, is one positively showing the existence of a
joint venture. This is clearly revealed in the testimonies of Capt.
Pedro Matibag and Gil Chua, a crew member, both witnesses for
petitioners.
It may not be amiss to mention that while petitioners
merely raise factual questions which are not proper under Rule 45 of
the Rules of Court, We nevertheless went to great lengths in
dissecting the facts of this case if only to convince Us that
petitioners, who are pauper litigants and seeking claims under a
social legislation, have not been denied its benefits. For, We are not
unaware that in this jurisdiction all doubts in the implementation and
interpretation of provisions of social legislations should be resolved
in favor of the working class. But, alas, justice is not fully served by
sustaining the contention of the poor simply because he is poor.
Justice is done by properly applying the law regardless of the station
in life of the contending parties.
Established
Miguel v JCT Group Inc
The test for determining an employer-employee
relationship hinges on resolving who has the power to select
employees, who pays for their wages, who has the power to dismiss
them, and who exercises control in the methods and the results by
which the work is accomplished.”
Wack-Wack Golf and Country Club
An independent contractor is one who undertakes “job
contracting,” i.e., a person who: (a) carries on an independent
business and undertakes the contract work on his own account
under his own responsibility according to his own manner and
method, free from the control and direction of his employer or
principal in all matters connected with the performance of the work
except as to the results thereof; and (b) has substantial capital or
investment in the form of tools, equipments, machineries, work
premises and other materials which are necessary in the conduct of
the business. Jurisprudence shows that determining the existence
of an independent contractor relationship, several factors may be
considered, such as, but not necessarily confined to, whether or not
the contractor is carrying on an independent business; the nature
and extent of the work; the skill required; the term and duration of the
12
relationship; the right to assign the performance of specified pieces
of work; the control and supervision of the work to another; the
employer’s power with respect to the hiring, firing, and payment of
the contractor’s workers; the control of the premises; the duty to
supply premises, tools, appliances, materials and labor; and the
mode, manner and terms of payment.
Factors
Philippine Global Communicators v De Vera
In a long line of decisions, the Court, in determining
the existence of an employer-employee relationship, has invariably
adhered to the four-fold test, to wit: the selection and engagement of
the employee; the payment of wages; the power of dismissal; and
the power to control the employee’s conduct, or the so-called
“control test”, considered to be the most important element.
Sonza v ABS-CBN
There are 4 elements of employer-employee relationship:
1. Selection of employee
2. Payment of wages
3. Power to dismiss
4. Control on employee on means and methods
Jardin v NLRC
Four-fold test for employer-employee relations:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power of control the employees conduct.’
NLRC found that the boundary system is a leasehold
system which takes it out of the ordinary notion of “control” over
employees conduct.
The SC iterated its ruling that the relationship between
jeepney owners/operators on one hand and jeepney drivers on the
other under the boundary system is that of employer-employee and
not of lessor-lessee.
Manila Golf v IAC
The Court does not agree that said facts necessarily or
logically point to an employee-employer relationship, and to the
exclusion of any form of arrangements, other than of employment,
that would make the respondent's services available to the members
and guest of the petitioner. As long as it is, the list made in the
appealed decision detailing the various matters of conduct, dress,
language, etc. covered by the petitioner's regulations, does not, in
the mind of the Court, so circumscribe the actions or judgment of the
caddies concerned as to leave them little or no freedom of choice
whatsoever in the manner of carrying out their services.
 LABOR MIDTERMS MAGIC NOTES!
Control Test
UERMMMC – RDU v Laguesma in Felix v Buensada
A residency or resident physician position in a medical
specialty is never a permanent one. Residency connotes training
and temporary status. Promotion to the next post-graduate year is
based on merit and performance determined by periodic evaluations
and examinations of knowledge, skills and bedside manner. Under
this system, residents, especially those in university teaching
hospitals enjoy their right to security of tenure only to the extent that
they periodically make the grade. While physicians (or consultants)
of specialist rank are not subject to the same stringent evaluation
procedures, specialty societies require continuing education as a
requirement for accreditation in good standing, in addition to peer
review processes based on performance, mortality and morbidity
audits, feedback from residents, interns and medical students and
research output. The nature of the contracts of resident physicians
meets traditional tests for determining employer employee
relationships, but because the focus of residency is training, they are
neither here nor there. Moreover, stringent standards and
requirements for renewal of specialist rank positions or for promotion
to the next postgraduate residency year are necessary because lives
are ultimately at stake.
R TransportCorp v Ejandra
Petitioner is barred to negate the existence of an
employer-employee relationship. He has invoked rulings on the right
of an employer to dismiss an employee for just cause. The power to
dismiss an employee is one of the indications that there was such
relationship. Also, A97 of the Labor Code says that employees can
be paid in form of commissions.
Sonza v ABS-CBN
Control on employee on means and methods
- also called control test; most impt to determine relationship
- Sonza contends ABS exercised control over means and
methods of his work. Court said ABS merely reserved the right
to modify the program format and airtime schedule. Its sole
concern was the quality of the show and the ratings. How
Sonza appeared, sounded, etc. is outside control of ABS.
- Sonza contends that ABS exercised control in providing
equipment and crew. Court said these are not tools needed by
Sonza. What he needed were his talent, skills, costume.
- Sonza contends that ABS subjected him to rules and
standards. Court said that the rules are the TV and Radio
Code of the Kapisanan ng Broadcaster sa Pilipinas, merely
adopted by ABS as its code of ethics. It applies to
broadcasters, not just to ABS employees. Besides, these rules
by: OWEN AND RACH 
are merely guidelines.
- Sonza said his exclusivity is a form of control by ABS. Court
said exclusivity is a widespread practice in entertainment
industry, as protection of investment in “building up” a talent.
Besides, the huge talent fees of an exclusive talent
compensates for exclusivity.
Insular Life v NLRC
Rules and regulations governing the conduct of the
business are provided for in the Insurance Code and enforced by the
Insurance Commissioner. It is, therefore, usual and expected for an
insurance company to promulgate a set of rules to guide its
commission agents in selling its policies that they may not run afoul
of the law and what it requires or prohibits. Of such a character are
the rules which prescribe the qualifications of persons who may be
insured, subject insurance applications to processing and approval
by the Company, and also reserve to the Company the determination
of the premiums to be paid and the schedules of payment. None of
these really invades the agent's contractual prerogative to adopt his
own selling methods or to sell insurance at his own time and
convenience, hence cannot justifiably be said to establish an
employer-employee relationship between him and the company.
Almirez v Infinite Corp Technology Corp
Under the control test, an employer-employee
relationship exists where the person for whom the services are
performed reserves the right to control not only the end achieved but
also the manner and means to be used in reaching the end.
Economic Test
Sevilla v CA
In this jurisdiction, there has been no uniform test to
determine the existence of an employer-employee relation. In
general, We have relied on the so-called right of control test, “where
the person for whom the services are performed reserves a right to
control not only the end to be achieved but also the means to be
used in reaching such end. In addition, the existing economic
conditions prevailing between the parties, like the inclusion of the
employee in the payrolls, are also considered in determining the
existence of an employer-employee relationship.
Agreement
Insular Life Assurance Co Ltd v NLRC
It is axiomatic that the existence of an employer-
employee relationship cannot be negated by expressly repudiating it
in the management contract and providing therein that the
"employee" is an independent contractor when the terms of the
13
agreement clearly show otherwise. For, the employment status of a
person is defined and prescribed by law and not by what the parties
say it should be. In determining the status of the management
contract, the "four-fold test" on employment earlier mentioned has to
be applied.
Chavez v NLRC
The elements to determine the existence of an
employment relationship are: (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of dismissal;
and (4) the employer’s power to control the employee’s conduct. The
most important element is the employer’s control of the employee’s
conduct, not only as to the result of the work to be done, but also as
to the means and methods to accomplish it.
It bears stressing that the existence of an employer-
employee relationship cannot be negated by expressly repudiating it
in a contract and providing therein that the employee is an
independent contractor when, as in this case, the facts clearly show
otherwise. Indeed, the employment status of a person is defined
and prescribed by law and not by what the parties say it should be.
San Miguel Corp v Abella
Although the terms of the non-exclusive contract of
service between SMC and [Sunflower] showed a clear intent to
abstain from establishing an employer-employee relationship
between SMC and [Sunflower] or the latter’s members, the extent to
which the parties successfully realized this intent in the light of the
applicable law is the controlling factor in determining the real and
actual relationship between or among the parties. There being a
finding of “labor-only” contracting, liability must be shouldered either
by SMC or [Sunflower] or shared by both
Lopez v Metropolitan Waterworks and Sewerage System
It is axiomatic that the existence of an employer-
employee relationship cannot be negated by expressly repudiating it
in an agreement and providing therein that the employee is “not an
MWSS employee” when the terms of the agreement and the
surrounding circumstances show otherwise. The employment status
of a person is defined and prescribed by law and not by what the
parties say it should be.
Method Wage Payment
Lazaro v SSS
The fact that Laudato was paid by way of commission
does not preclude the establishment of an employer-employee
relationship. In Grepalife v. Judico, the Court upheld the existence of
an employer-employee relationship between the insurance company
and its agents, despite the fact that the compensation that the
 LABOR MIDTERMS MAGIC NOTES!
agents on commission received was not paid by the company but by
the investor or the person insured.
Almirez v Infinite Corp Techonology
The deduction for SSS and tax do not bolster Almirez’s
contention that there was an employee-employer relationship.
However, only one pay slip was issued (Januaryb 16-31, 2000) and
the rest were in cash vouchers. As such, the payslip cannot be
considered as proof of an employer-employee relationship.
The use of the word “salary” is not determinative of such
a relationship either. Salary is defined as remuneration for services
given. The contract details her salary and it serves between the
parties was the law governing them. But the contract, as pointed out
earlier, is bereft of proof of control of Infinite Loop over Almirez.
Hours of Work
Lazaro v SSS
Neither does it follow that a person who does not observe
normal hours of work cannot be deemed an employee. In
Cosmopolitan Funeral Homes, Inc. v. Maalat, the Supreme Court
declared that there was an employer-employee relationship, noting
that "[the] supervisor, although compensated on commission basis,
[is] exempt from the observance of normal hours of work for his
compensation is measured by the number of sales he makes.
Proof
Domasig v NLRC
Substantial evidence is sufficient as a basis for judgment
on the existence of employer-employee relationship. Proof beyond
reasonable doubt is not required as a basis for judgment on the
legality of an employer’s dismissal of an employee, nor even
preponderance of evidence for that matter, substantial evidence
being sufficient. Any competent and relevant evidence to prove the
relationship may be admitted.
Absence
Abante v Lamadrid
Petitioner Abante was a commission salesman who
received 3% commission of his gross sales. No quota was imposed
on him by the respondent. He was not required to report to the office
at any time or submit any periodic written report on his sales
performance and activities. He was not designated by respondent to
conduct his sales activities at any particular or specific place. He
pursued his selling activities without interference or supervision from
by: OWEN AND RACH 
respondent company and relied on his own resources to perform his
functions. Respondent company did not prescribe the manner of
selling the merchandise; he was left alone to adopt any style or
strategy to entice his customers.
Where a person who works for another does so more or
less at his own pleasure and is not subject to definite hours or
conditions of work, and in turn is compensated according to the
result of his efforts and not the amount thereof, no relationship of
employer-employee exists.
Denial
R Transport Corp v Ejandra
Petitioner is barred to negate the existence of an employer-
employee relationship. He has invoked rulings on the right of an
employer to dismiss an employee for just cause. The power to
dismiss an employee is one of the indications that there was such
relationship. Also, A97 of the Labor Code says that employees can
be paid in form of commissions.
6.2 INDEPENDENT CONTRACTOR AND LABOR CONTRACTOR
ONLY
Art 106 LC Contractor or subcontractor. Whenever an employer
enters into a contract with another person for the performance of the
former’s work, the employees of the contractor and of the latter’s
subcontractor, if any, shall be paid in accordance with the provisions
of this Code.
In the event that the contractor or subcontractor fails to pay the
wages of his employees in accordance with this Code, the employer
shall be jointly and severally liable with his contractor or
subcontractor to such employees to the extent of the work performed
under the contract, in the same manner and extent that he is liable to
employees directly employed by him.
The Secretary of Labor and Employment may, by appropriate
regulations, restrict or prohibit the contracting-out of labor to protect
the rights of workers established under this Code. In so prohibiting or
restricting, he may make appropriate distinctions between labor-only
contracting and job contracting as well as differentiations within
these types of contracting and determine who among the parties
involved shall be considered the employer for purposes of this Code,
to prevent any violation or circumvention of any provision of this
Code.
There is "labor-only" contracting where the person supplying workers
to an employer does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among
14
others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal
business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer
who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
Art 107 LC Indirect employer. The provisions of the immediately
preceding article shall likewise apply to any person, partnership,
association or corporation which, not being an employer, contracts
with an independent contractor for the performance of any work,
task, job or project.
Art 109 LC Solidary liability. The provisions of existing laws to
the contrary notwithstanding, every employer or indirect employer
shall be held responsible with his contractor or subcontractor for any
violation of any provision of this Code. For purposes of determining
the extent of their civil liability under this Chapter, they shall be
considered as direct employers.
DOLE Order No. 18-02 Series of 2002
RULES IMPLEMENTING ARTICLES 106 TO 109
OF THE LABOR CODE, AS AMENDED
By virtue of the power vested in the Secretary of Labor and
Employment under Articles 5 (Rulemaking) and 106 (Contractor or
Subcontractor) of the Labor Code of the Philippines, as amended,
the following regulations governing contracting and subcontracting
arrangements are hereby issued:
Section 1. Guiding principles . - Contracting and subcontracting
arrangements are expressly allowed by law and are subject to
regulation for the promotion of employment and the observance of
the rights of workers to just and humane conditions of work, security
of tenure, selforganization, and collective bargaining. Labor-only
contracting as defined herein shall be prohibited.
Section 2 . Coverage. - These Rules shall apply to all parties of
contracting and subcontracting arrangements where employer-
employee relationship exists. Placement activities through private
recruitment and placement agencies as governed by Articles 25 to
39 of the Labor Code are not covered by these Rules.
Section 3. Trilateral Relationship in Contracting
Arrangements . In legitimate contracting, there exists a trilateral
relationship under which there is a contract for a specific job, work or
service between the principal and the contractor or subcontractor,
and a contract of employment between the contractor or
 LABOR MIDTERMS MAGIC NOTES!
subcontractor and its workers. Hence, there are three parties
involved in these arrangements, the principal which decides to farm
out a job or service to a contractor or subcontractor, the contractor or
subcontractor which has the capacity to independently undertake the
performance of the job, work or service, and the contractual workers
engaged by the contractor or subcontractor to accomplish the job
work or service.
Section 4. Definition of Basic Terms. - The following terms as
used in these Rules, shall mean:
(a) "Contracting" or "subcontracting" refers to an arrangement
whereby a principal agrees to put out or farm out with a contractor or
subcontractor the performance or completion of a specific job, work
or service within a definite or predetermined period, regardless of
whether such job, work or service is to be performed or completed
within or outside the premises of the principal.
(b) "Contractor or subcontractor" refers to any person or entity
engaged in a legitimate contracting or subcontracting arrangement.
(c) "Contractual employee" includes one employed by a contractor or
subcontractor to perform or complete a job, work or service pursuant
to an arrangement between the latter and a principal.
(d) "Principal" refers to any employer who puts out or farms out a
job, service or work to a contractor or subcontractor.
Section 5. Prohibition against labor-only contracting. Labor-
only contracting is hereby declared prohibited. For this purpose,
labor-only contracting shall refer to an arrangement where the
contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal, and any of
the following elements are present:
i) The contractor or subcontractor does not have substantial capital
or investment which relates to the job, work or service to be
performed and the employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are
directly related to the main business of the principal; or
ii) the contractor does not exercise the right to control over the
performance of the work of the contractual employee. The foregoing
provisions shall be without prejudice to the application of Article 248
(C ) of the Labor Code, as amended.
"Substantial capital or investment" refers to capital stocks and
subscribed capitalization in the case of corporations, tools,
equipment, implements, machineries and work premises, actually
and directly used by the contractor or subcontractor in the
performance or completion of the job, work or service contracted out.
The "right to control" shall refer to the right reserved to the person for
whom the services of the contractual workers are performed, to
determine not only the end to be achieved, but also the manner and
means to be used in reaching that end.
by: OWEN AND RACH 
Section 6. Prohibitions. Notwithstanding Section 5 of these Rules,
the following are hereby declared prohibited for being contrary to law
or public policy:
(a) Contracting out of a job, work or service when not done in good
faith and not justified by the exigencies of the business and the same
results in the termination of regular employees and reduction of work
hours or reduction or splitting of the bargaining unit;
(b) Contracting out of work with a "cabo" as defined in Section 1 (ii),
Rule I, Book V of these Rules. "Cabo" refers to a person or group of
persons or to a labor group which, in the guise of a labor
organization, supplies workers to an employer, with or without any
monetary or other consideration whether in the capacity of an agent
of the employer or as an ostensible independent contractor;
(c) Taking undue advantage of the economic situation or lack of
bargaining strength of the contractual employee, or undermining his
security of tenure or basic rights, or circumventing the provisions of
regular employment, in any of the following instances:
i) In addition to his assigned functions, requiring the contractual
employee to perform functions which are currently being performed
by the regular employees of the principal or of the contractor or
subcontractor;
ii) Requiring him to sign, as a precondition to employment or
continued employment, an antedated resignation letter; a blank
payroll; a waiver of labor standards including minimum wages and
social or welfare benefits; or a quitclaim releasing the principal,
contractor or subcontractor from any liability as to payment of future
claims; and
iii) Requiring him to sign a contract fixing the period of employment
to a term shorter than the term of the contract between the principal
and the contractor or subcontractor, unless the latter contract is
divisible into phases for which substantially different skills are
required and this is made known to the employee at the time of
engagement;
(e) Contracting out of a job, work or service through an in-house
agency which refers to a contractor or subcontractor engaged in the
supply of labor which is owned, managed or controlled by the
principal and which operates solely for the principal;
(f) Contracting out of a job, work or service directly related to the
business or operation of the principal by reason of a strike or lockout
whether actual or imminent;
(g) Contracting out of a job, work or service being performed by
union members when such will interfere with, restrain or coerce
employees in the exercise of their rights to self organization as
provided in Art. 248 (c) of the Labor Code, as amended.
Section 7. Existence of an employer-employee relationship.
The contractor or subcontractor shall be considered the employer of
the contractual employee for purposes of enforcing the provisions of
the Labor Code and other social legislation. The principal, however,
15
shall be solidarily liable with the contractor in the event of any
violation of any provision of the Labor Code, including the failure to
pay wages.
The principal shall be deemed the employer of the contractual
employee in any of the following cases, as declared by a competent
authority:
(a) where there is labor-only contracting; or
(b) where the contracting arrangement falls within the prohibitions
provided in Section 6 (Prohibitions) hereof.
Section 8. Rights of Contractual Employees . Consistent with
Section 7 of these Rules, the Contractual employee shall be entitled
to all the rights and privileges due a regular employee as provided
for in the Labor Code, as amended, to include the following:
(a) Safe and healthful working conditions;
(b) Labor standards such as service incentive leave, rest days,
overtime pay, holiday pay, 13th month pay and separation pay;
(c) Social security and welfare benefits;
(d) Self-organization, collective bargaining and peaceful concerted
action; and
(e) Security of tenure.
Section 9. Contract between contractor or subcontractor and
contractual employee. Notwithstanding oral or written stipulations
to the contrary, the contract between the contractor or subcontractor
and the contractual employee, which shall be in writing, shall include
the following terms and conditions:
(a) The specific description of the job, work or service to be
performed by the contractual employee;
(b) The place of work and terms and conditions of employment,
including a statement of the wage rate applicable to the individual
contractual employee; and
(c) The term or duration of employment, which shall be coextensive
with the contract of the principal and subcontractor, or with the
specific phase for which the contractual employee is engaged, as the
case may be. The contractor or subcontractor shall inform the
contractual employee of the foregoing terms and conditions on or
before the first day of his employment.
Section 10. Effect of Termination of Contractual Employment.
In cases of termination of employment prior to the expiration of the
contract between the principal and the contractor or subcontractor,
the right of the contractual employee to separation pay or other
related benefits shall be governed by the applicable laws and
jurisprudence on termination of employment. Where the termination
results from the expiration of the contract between the principal and
the contractor or subcontractor, or from the completion of the phase
of the job, work or service for which the contractual employee is
engaged, the latter shall not be entitled to separation pay. However,
 LABOR MIDTERMS MAGIC NOTES!
this shall be without prejudice to completion bonuses or other
emoluments, including retirement pay as may be provided by law or
in the contract between the principal and the contractor or
subcontractor.
Section 11. Registration of Contractors or Subcontractors .
Consistent with the authority of the Secretary of Labor and
Employment to restrict or prohibit the contracting out of labor through
appropriate regulations, a registration system to govern contracting
arrangements and to be implemented by the Regional Offices is
hereby established. The registration of contractors and
subcontractors shall be necessary for purposes of establishing an
effective labor market information and monitoring. Failure to register
shall give rise to the presumption that the contractor is engaged in
labor-only contracting.
Section 12. Requirements for registration. A contractor or
subcontractor shall be listed in the registry of contractors and
subcontractors upon completion of an application form to be
provided by the DOLE. The applicant contractor or subcontractor
shall provide in the application form the following information:
(a) he name and business address of the applicant and the area or
areas where it seeks to operate;
(b) he names and addresses of officers, if the applicant is a
corporation, partnership, cooperative or union;
(c) The nature of the applicant's business and the industry or
industries where the applicant seeks to operate;
(d) The number of regular workers; the list of clients, if any; the
number of personnel assigned to each client, if any and the services
provided to the client;
(e) The description of the phases of the contract and the number of
employees covered in each phase, where appropriate; and
(f) A copy of audited financial statements if the applicant is a
corporation, partnership, cooperative or a union, or copy of the latest
ITR if the applicant is a sole proprietorship.
The application shall be supported by:
(a) A certified copy of a certificate of registration of firm or business
name from the Securities and Exchange Commission (SEC),
Department of Trade and Industry (DTI), Cooperative Development
Authority (CDA), or from the DOLE if the applicant is a union; and
(b) A certified copy of the license or business permit issued by the
local government unit or units where the contractor or subcontractor
operates.
The application shall be verified and shall include an undertaking
that the contractor or subcontractor shall abide by all applicable labor
laws and regulations.
Section 13. Filing and processing of applications. The
application and its supporting documents shall be filed in triplicate in
by: OWEN AND RACH 
the Regional Offices where the applicant principally operates. No
application for registration shall be accepted unless all the foregoing
requirements are complied with. The contractor or subcontractor
shall be deemed registered upon payment of a registration fee of
P100.00 to the Regional Office. Where all the supporting documents
have been submitted, the Regional Office shall deny or approve the
application within seven (7) working days after its filing. Upon
registration, the Regional Office shall return one set of the duly-
stamped application documents to the applicant, retain one set for its
file, and transmit the remaining set to the Bureau of Local
Employment. The Bureau shall devise the necessary forms for the
expeditious processing of all applications for registration.
Section 14. Duty to produce copy of contract between the
principal and the contractor or subcontractor . The principal or
the contractor or subcontractor shall be under an obligation to
produce a copy of the contract between the principal and the
contractor in the ordinary course of inspection. The contractor shall
likewise be under an obligation to produce a copy of the contract
of employment of the contractual worker when directed to do so by
the Regional Director or his authorized representative.
A copy of the contract between the contractual employee and the
contractor or subcontractor shall be furnished the certified bargaining
agent, if there is any.
Section 15. Annual Reporting of Registered Contractors. The
contractor or subcontractor shall submit in triplicate its annual report
using a prescribed form to the appropriate Regional Office not later
than the 15th of January of the following year. The report shall
include:
(a) A list of contracts entered with the principal during the subject
reporting period;
(b) The number of workers covered by each contract with the
principal;
(c) A sworn undertaking that the benefits from the Social Security
System (SSS), the Home Development Mutual Fund (HDMF),
PhilHealth, Employees Compensation Commission (ECC), and
remittances to the Bureau of Internal Revenue (BIR) due its
contractual employees have been made during the subject reporting
period.
The Regional Office shall return one set of the duly-stamped report
to the contractor or subcontractor, retain one set for its file, and
transmit the remaining set to the Bureau of Local Employment within
five (5) days from receipt thereof.
Section 16. Delisting of contractors or subcontractors . Subject
to due process, the Regional Director shall cancel the registration of
contractors or subcontractors based on any of the following grounds:
16
(a) Non-submission of contracts between the principal and the
contractor or subcontractor when required to do so;
(b) Non-submission of annual report;
(c) Findings through arbitration that the contractor or subcontractor
has engaged
in labor-only contracting and the prohibited activities as provided in
Section 6 (Prohibitions) hereof; and
(d) Non-compliance with labor standards and working conditions.
Section 17. Renewal of registration of contractors or
subcontractors . All registered contractors or subcontractors may
apply for renewal of registration every three years. For this purpose,
the Tripartite Industrial Peace Council (TIPC) as created under
Executive Order No. 49, shall serve as the oversight committee to
verify and monitor the following:
(a) Engaging in allowable contracting activities; and
(b) Compliance with administrative reporting requirements.
Section 18. Enforcement of Labor Standards and Working
Conditions . Consistent with Article 128 (Visitorial and Enforcement
Power) of the Labor Code, as amended, the Regional Director
through his duly authorized representatives, including labor
regulation officers shall have the authority to conduct routine
inspection of establishments engaged in contracting or
subcontracting and shall have access to employer's records and
premises at any time of the day or night whenever work is being
undertaken therein, and the right to copy therefrom, to question any
employee and investigate any fact, condition or matter which may be
necessary to determine violations or which may aid in the
enforcement of the Labor Code and of any labor law, wage order, or
rules and regulations issued pursuant thereto.
The findings of the duly authorized representative shall be referred to
the Regional Director for appropriate action as provided for in Article
128, and shall be furnished the collective bargaining agent, if any.
Based on the visitorial and enforcement power of the Secretary of
Labor and Employment in Article 128 (a), (b), (c) and (d), the
Regional Director shall issue compliance orders to give effect to the
labor standards provisions of the Labor Code, other labor legislation
and these guidelines.
Section 19. Solidary liability. The principal shall be deemed as
the direct employer of the contractual employees and therefore,
solidarily liable with the contractor or subcontractor for whatever
monetary claims the contractual employees may have against the
former in the case of violations as provided for in Sections 5 (Labor-
Only contracting), 6 (Prohibitions), 8 (Rights of Contractual
Employees) and 16 (Delisting) of these Rules. In addition, the
principal shall also be solidarily liable in case the contract between
the principal and contractor or subcontractor is preterminated for
 LABOR MIDTERMS MAGIC NOTES!
reasons not attributable to the fault of the contractor or
subcontractor.
Section 20. Supersession . All rules and regulations issued by the
Secretary of Labor and Employment inconsistent with the provisions
of this Rule are hereby superseded. Contracting or subcontracting
arrangements in the construction industry, under the licensing
coverage of the PCAB and shall not include shipbuilding and ship
repairing works, however, shall continue to be governed by
Department Order No. 19, series of 1993.
Section 21. Effectivity. This Order shall be effective fifteen (15)
days after completion of its publication in two (2) newspapers of
general circulation.
Manila, Philippines, 21 February 2002.
Azucena Essentials of Labor Law pp 634-635
A. Independent Contractor
Management Function – Determination Need
Manila Electric v Quisumbing
Additionally, we recognize that contracting out is not
unlimited; rather it is a prerogative that management enjoys subject
to well-defined legal limitations. As we have previously held, the
company can determine in its best business judgment whether it
should contract out performance of some if its work for as long as
the employer is motivated by good faith, and the contracting out
must not have been resorted to circumvent the law or must not have
been the result of malicious or arbitrary action.
Requirements – Independent Conctractor
Manila Electric v Benamira
Moreover, ASDAI and AFSISI are not “labor-only”
contractors. There is “labor only” contract when the person acting as
contractor is considered merely as an agent or intermediary of the
principal who is responsible to the workers in the same manner and
to the same extent as if they had been directly employed by him. On
the other hand, “job (independent) contracting” is present if the
following conditions are met: (a) the contractor carries on an
independent business and undertakes the contract work on his own
account under his own responsibility according to his own manner
and method, free from the control and direction of his employer or
principal in all matters connected with the performance of the work
except to the result thereof; and (b) the contractor has substantial
capital or investments in the form of tools, equipment, machineries,
by: OWEN AND RACH 
work premises and other materials which are necessary in the
conduct of his business.[29] Given the above distinction and the
provisions of the security service agreements entered into by
petitioner with ASDAI and AFSISI, we are convinced that ASDAI and
AFSISI were engaged in job contracting.
San Miguel v Abella
The test to determine the existence of independent
contractorship is whether one claiming to be an independent
contractor has contracted to do the work according to his own
methods and without being subject to the control of the employer,
except only as to the results of the work. As for those of private
respondents who were engaged in janitorial and messengerial tasks,
they fall under the second category and are thus entitled to
differential pay and benefits extended to other SMC regular
employees from the day immediately following their first year of
service.
Big AA Manufacturing v Antonio
Requirements for an Independent contractor: a) he
carries a distinct and independent business, b) possesses
substantial capital or investment in tools, equipment, machinery or
work premises, c) he does not work within another
employer/company’s premises using the latter’s tools and materials,
and d) he is not under the control and supervision of an employer or
company
Desirable – Unnecessary
Coca-Cola bottlers Phil v NLRC
In Kimberly Independent Labor Union v. Drilon where the
Court took judicial notice of the practice adopted in several
government and private institutions and industries of hiring janitorial
services on an "independent contractor basis." In this respect,
although janitorial services may be considered directly related to the
principal business of an employer, as with every business, we
deemed them unnecessary in the conduct of the employer's principal
business.
This judicial notice, of course, rests on the assumption
that the independent contractor is a legitimate job contractor so that
there can be no doubt as to the existence of an employer-employee
relationship between contractor and the worker. In this situation, the
only pertinent question that may arise will no longer deal with
whether there exists an employment bond but whether the employee
may be considered regular or casual as to deserve the application of
Art. 280 of the Labor Code.
Employer-Employee
17
PAL v NLRC
Janitorial service agreement is not labor-only contacting
and extension of service contract is not a source of employer-
employee relation.
Prohibited labor-only contracting is defined in Article 106
of the Labor Code as follows: There is "labor-only" contracting where
the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers
recruited and placed by such persons are performing activities which
are directly related to the principal business of such employer. In
such cases, the person or intermediary shall be considered merely
as an agent of the employer who shall be responsible to the workers
in the same manner and extent as if the latter were directly
employed by him.
Mercury Drug Corp v Libunao
Where the security agency recruits, hires and assigns the
works of its watchmen or security guards to a client, the employer of
such guards or watchmen is such agency, and not the client, since
the latter has no hand in selecting the security guards. Thus, the
duty to observe the diligence of a good father of a family cannot be
demanded from the said client
The petitioner had assigned Sido to help the
management open and close the door of the drug store; inspect the
bags of customers as they enter the store; and, check the receipts
issued by the cashier to said customers for their purchases. Such
circumstances do not automatically make the security guard the
employee of the petitioner, and, as such, liable for the guard's
tortious acts. The fact that a client company may give instructions or
directions to the security guards assigned to it, does not, by itself,
render the client responsible as an employer of the security guards
concerned and liable for their wrongful acts or omissions.
Liability
Manila Shipyard Corp v CA
Petitioner’s liability is joint and several with that of
Longest Force, pursuant to Articles 106, 107 and 109 of the Labor
Code. In this case, when petitioner contracted for security services
with Longest Force as the security agency that hired private
respondents to work as guards for the shipyard corporation,
petitioner became an indirect employer of private respondents
pursuant to Article 107. Following Article 106, when the agency as
contractor failed to pay the guards, the corporation as principal
becomes jointly and severally liable for the guards’ wages. This is
mandated by the Labor Code to ensure compliance with its
 LABOR MIDTERMS MAGIC NOTES!
provisions, including payment of statutory minimum wage. The
security agency is held liable by virtue of its status as direct
employer, while the corporation is deemed the indirect employer of
the guards for the purpose of paying their wages in the event of
failure of the agency to pay them. This statutory scheme gives the
workers the ample protection consonant with labor and social justice
provisions of the 1987 Constitution.
New Golden City Builders v CA
In legitimate job contracting, the law creates an employer-
employee relationship for a limited purpose, i.e., to ensure that the
employees are paid their wages. The principal employer becomes
jointly and severally liable with the job contractor only for the
payment of the employees’ wages whenever the contractor fails to
pay the same. Other than that, the principal employer is not
responsible for any claim made by the employees.
B. Labor Contractor Only
Requisites and Prohibition
Vinoya v NLRC
Labor-only contracting, a prohibited act, is an
arrangement where the contractor or subcontractor merely recruits,
supplies or places workers to perform a job, work or service for a
principal. The following elements are present: (a) The contractor or
subcontractor does not have substantial capital or investment to
actually perform the job, work or service under its own account and
responsibility; (b) The employees recruited, supplied or placed by
such contractor or subcontractor are performing activities which are
directly related to the main business of the principal.
Manila Water v Pena
Labor-only contracting refers to arrangement where
contractor merely recruits and places workers for a principal.
Elements (1) contractor doesn’t have substantial capital and (2)
contractor doesn’t control performance of contractual employee.
Grandspan Development Corp v Bernardo
SC also agrees with the CA that J. Narag Construction is
a labor-only contractor. A106 LC as amended, provides that “there is
‘labor-only’ contracting where the person supplying workers to an
employer does not have substantial capital or investment in the form
of tools, equipment, machineries, work premises, among others, and
the workers recruited and placed by such person are performing
activities which are directly related to the principal business of such
employer. x x x.” J. Narag Construction is indeed a labor-only
contractor. These are the reasons:
(1) it is not registered as a building contractor with the SEC;
by: OWEN AND RACH 
(2) it has no contract with petitioner; and
(3) there is no proof of its financial capability and has no list of
equipment, tools, machineries and implements used in the
business.
Effect of Finding
PAL v NLRC
The only effect of labor-only contracting is that ‘the person
or intermediary shall be considered merely as an agent of the
employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by him’
(Art. 106, Labor Code)”.
Thus, private respondents are entitled to separation pay
only. The award of backwages to them has no basis in law.
San Miguel v MAERC Integrated Services
In deciding the question of control, the language of the
contract is not determinative of the parties' relationship; rather, it is
the totality of the facts and surrounding circumstances of each case.
On the other hand, in labor-only contracting, the statute
creates an employer-employee relationship for a comprehensive
purpose: to prevent a circumvention of labor laws. The contractor is
considered merely an agent of the principal employer and the latter
is responsible to the employees of the labor-only contractor as if
such employees had been directly employed by the principal
employer. The principal employer therefore becomes solidarily liable
with the labor-only contractor for all the rightful claims of the
employees.
Section 7: Employee Classification
STATUTORY REFERENCE
Book VI Rule 1 Sec 5 Omnibus Rule
(a) Regular employment - The provisions of written agreements to
the contrary notwithstanding and regardless of the oral agreements
of the parties, employment shall be considered to be regular
employment for purposes of Book VI of the Labor Code where the
employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the
employer except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee or
where the job, work or service to be performed is seasonal in nature
and the employment is for the duration of the season.
(b) Casual Employment - There is casual employment where an
employee is engaged to perform a job, work or service which is
18
merely incidental to the business of the employer, and such job, work
or service is for a definite period made known to the employee at the
time of the engagement; provided, that any employee who has
rendered at least one year of service, whether such service is
continuous or not, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists.
Notwithstanding the foregoing distinctions, every employee shall be
entitled to the rights and privileges, and shall be subject to the duties
and obligations, as may be granted by law to regular employees
during the period of their actual employment.
7.01 COVERAGE
Art 278 LC Coverage. The provisions of this Title shall apply to all
establishments or undertakings, whether for profit or not.
7.02 EMPLOYEE CLASSIFICATION
Art 280 LC Regular and casual employment. The provisions of
written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided, That any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists.
Art 281 LC Probationary employment. Probationary employment
shall not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just
cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer
to the employee at the time of his engagement. An employee who is
 LABOR MIDTERMS MAGIC NOTES!
allowed to work after a probationary period shall be considered a
regular employee.
Recognition and Types
Phil Federation of Credit Coop v NLRC [1998]
[Contract stated that she was hired on a contractual
basis, on probationary status for 6 months, which was subject to
renewal. Renewed for one year then she was terminated.]
Art. 281- An employee who is allowed to work after a
probationary period shall be considered a regular employee.
Probationary employee is one who is on trial during which the
employer determines whether he is qualified for permanent
employment.
Regardless of the designation the employer may have conferred
upon her employment status, since she had completed the
probationary period and she was allowed to work thereafter, she
then acquired regular status.
Pangilinan v Gen Milling Corp [2004]
[Employed as emergency workers (chicken dressers,
packers and helpers in the plant)]
They were employed with a fixed period, and as such,
were not regular employees. Art. 280 does not proscribe or prohibit
an employment contract with a fixed period. It does not necessarily
follow that where the duties of the employee consists of activities
usually necessary or desirable in the usual business of the employer,
the parties are forbidden from agreeing on a period of time for the
performance of such activities. There is nothing essentially
contradictory between a definite period of employment and the
nature of the employee’s duties.
Employer Determination
De Leon v NLRC [1989]
[Paid on a daily basis through cash vouchers and did odd
jobs and painting. He was then rehired indirectly through La
Tondena’s labor agency.]
Art. 281. It is not the will and word of the employer that
determines whether a certain employment is regular or casual, to
which the desperate worker often acceded but the nature of the
activities performed in relation to the particular business or trade
considering all circumstances, and in some cases the length of time
of its performance and its continued existence.
San Miguel Corporation v NLRC [1998]
by: OWEN AND RACH 
[Helper/bricklayer for a specific project, repair and
upgrading of furnace. Rehired for another project.]
The nature of one’s employment does not depend on the
will or word of the employer, nor on the procedure of hiring and the
manner of designating the employee, but on the nature of the
activities to be performed by the employee, considering the
employer’s nature of business and the duration and scope of the
work to be done.
Tabas v California Manufacturing v NLRC [1989]
[They were employees of Manpower Services and were
assigned to work as promotional merchandisers for California Co.
Agreement provided that California had no control/supervision over
them with respect to accomplishing of work; Livi is an independent
contractor and so no principal-agent rel between the 2 Companies;
assignment was seasonal and contractual. Contract was for six
months, and was always renewed after expiring.]
The existence of an employer-employee relationship is a
question of law and being such, it cannot be made the subject of
agreement.
Temporary or casual employees become regular after service of one
year, unless they had been contracted for a specific project.
Merchandising is not specific, it is an activity related to the day-to-
day operations of Cali.
7.03 REGULAR EMPLOYEES
Art 280 LC Regular and casual employment. The provisions of
written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided, That any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists.
19
Art. 281. Probationary employment. An employee who is allowed
to work after a probationary period shall be considered a regular
employee. (last sentence)
Art. 75. Learnership agreement. Any employer desiring to employ
learners shall enter into a learnership agreement with them, which
agreement shall include: (d) A commitment to employ the learners if
they so desire, as regular employees upon completion of the
learnership. All learners who have been allowed or suffered to work
during the first two (2) months shall be deemed regular employees if
training is terminated by the employer before the end of the
stipulated period through no fault of the learners.
Clarification Rationale
Philips Semiconductor v Fadriquela [2004]
[Production operator, initially for 3 months. Contract was
renewed several times, extending to 12 months. She then incurred
several absences without justification, so her contract was not
renewed.]
By operation of law, she had attained regular status and
was thus entitled to security of tenure.
Phillip’s hiring policy for contract employees is contrary to the spirit of
Art. 279-280; it is but an excuse to prevent regularization and
circumvent the law on security of tenure. The operation of every
business depends on supply and demand – the cyclical nature of
one’s trade cannot be invoked as a reason to place an employee’s
status on shaky ground.
BUT this does not mean the term employment is illegal outright. It
does not circumvent the law when the fixed period was knowingly
and voluntarily agreed upon by both parties and that such agreement
was made with no party holding moral dominance over the other.
Nature of Work
Magsalin v National Organization [2003]
[Hired by Coca-Cola as sales route helpers for a limited
period of 5 months. After that, they were employed on a day-to-day
basis to substitute the regulars whenever need arose.]
In determining whether an employment should be
considered regular or non-regular, the applicable test is the
reasonable connection between the particular activity performed by
the employee in relation to the usual business or trade of the
employer.
Post-production activities by the sales route helpers are
important. Nature of work performed must be viewed from a
perspective of the business or trade in its entirety and not on a
 LABOR MIDTERMS MAGIC NOTES!
confined scope. Repeated rehiring and continuing need for their
services clearly attest to such necessity and desirability.
Hacienda Fatima v National Federation of
Sugarcane Workers Food and Gen Trade [2003]
[They were admittedly seasonal workers – they
repeatedly worked for the Hacienda for several years, but only
during a particular season.]
The fact that they did not work continuously for one whole
year but only for the duration of the season does not detract from
considering them in regular employment. Seasonal workers whoa re
called to work from time to time and are temporarily laid off during
off-season are not separated fro service in said period, but merely
considered on leave until re-employed. To be excluded from regular
employees, it is not enough that employees perform work that are
seasonal in nature; they must have also been employed only for the
duration of one season.
Milares v NLRC [2002]
[WON seafarers are contractual employees] YES. Their
employment is contractually fixed for a certain period of time. They
fall under the exception of Art. 280. Even if they have been
continually re-hired, or their contracts renewed before the contracts
expired, they are still not regular. Circumstance of continuous
rehiring was dictated by practical considerations that experienced
crew members are more preferred. They were only given priority or
preference because of their qualifications and experience.
Petroleum Shipping Ltd v NLRC [2006]
First Asst Engineer who was promoted to Chief Engineer
of Esso Intl Shipping. Because he had a disease, Esso no longer
deployed him but offered to pay him benefits. He accepted but still
filed complaint. He is not a regular employee. Same ratio as Milares!
Shippers United v NLRC [2006]
[Third engineer with Nicolakis Skipping through its
manning agency. Contract was for the period of 1 yr beginning July
10. He boarded MV Naval on July 15, but was ordered to disembark
on Aug 7 and repatriated to the Phils.]
Employer did not provide quantum of evidence needed to
prove that dismissal was for a just cause. Failure to furnish seafarer
with notice would prejudice the safety of the crew and the vessel.
Award of backwages and separation pay is not applicable since
seafarer is a contractual employee whose rights and obligations are
governed by the POEA Employment Contract and RA 8042. Under
Sec 10 of RA 8042, award of money claims for illegal dismissal is
allowed.
Pentagon Intl Shipping v Adelantar [2004]
by: OWEN AND RACH 
[Hired by the Dubai Ports Authority under a contract which
provided for an unlimited period of employment. He then entered into
another contract, POEA standard employment contract which
provided for a 12month period of work.]
Sec 10 RA 8042, and not A297, applies because the
second contract which provided for a fixed period of employment is
applicable in this case. Milares case doctrine is applicable!
Filipino seamen are governed by the Rules and Regulations of the
POEA. Standard Employment Contract governing the employment of
All Filipino seamen specifically provides that the contract of seamen
shall be for a fixed period of not longer than 12 months. Any
extension shall be subject to the mutual consent of parties. Such
limited period is for their mutual interest; the national, cultural, lingual
diversity among the crew is a reality that necessitates the limitation.
Hiring Extend Period
Andon Electric Co v NLRC [1999]
[Fabricator for 13 years and rendered diff services as
helper technician, stockman and timekeeper. He then received letter
of termination.]
Where the employment of project employees is extended
long after the supposed project has been finished, the employees
are removed from the cope of project employees and considered
regular employees. He was a “regular non-project worker.”
Contract to Contract
Beta Electric Corp v NLRC (1990]
[Clerk typist for one month, which appointment was
extended five times in five months. She was then terminated without
notice/investigation.]
Contracts cannot override the mandate of the law. Her
tenure had exceeded 6 months; she then attained regular status. An
employment may only be said to be “temporary” where it has been
fixed for a specific undertaking the completion or terminations of
which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal
in nature and the employment is for the duration of the season.
Universal Plastic Corp v Catapang ([2005]
[Hired by URC to work at its duck farm in Laguna on
various dates from ‘91-‘93. Employment contract provided for a
5month period. After expiration, URC would renew the contract and
re-employ them.]
Primary standard is the reasonable connection between
the particular activity performed by the employee in relation to the
usual trade or business of the employer. Such 5-month contract
period should be struck down as contrary to public policy or morals.
20
URC’s act of repeatedly and continuously hiring them in a span of 3-
5 years to do the same kind of work negates their contention that it
was for a specific project.
Length of Time
Maraguinot v NLRC [1998]
[(1) He was hired as part of the filming crew of Viva Films.
4 months later, designated as Asst. Electrician then Electrician. (2)
Another was part of shooting crew. They arranged movie equipment
and did tasks as assigned by cameraman/director. They were
engaged in about 20 projects. Viva contended that they were only
hired for specific movie projects – employment coterminous with
such project.]
A project employee or those part of a work pool may
acquire the status of a regular when (1) there is a continuous rehiring
even after cessation of a project (2) tasks performed are vital,
necessary and indispensable to the usual business. However, the
length of time during which the employee was continuously rehired is
not controlling, but merely serves as a badge of regular employment.
In this case, their tasks were necessary.
Abesco Construction v Ramirez [2006]
[Laborer, road roller operator, painters or drivers of the
construction co. Co. claimed only proj employees.]
In determining the nature of one’s employment, length of
service is not a controlling factor. Employees who work under diff
project employment contract do no automatically become regular;
they can remain as project employees regardless of the number of
years they worked. Members of a work pool can either be regular or
project.
7.04 PROJECT EMPLOYEES
Art. 280. Regular and casual employment. The provisions of
written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the
duration of the season.
Defined
ALU-TUCP v NLRC [1994]
 LABOR MIDTERMS MAGIC NOTES!
[Employed by Natl Steel for varying lengths of time, for
work limited to the specific component projects which made up the
main Five Year Expansion Program]
In business and industry, project could refer to one or the
other of at least 2 distinguishable types of activities: (1) A particular
job that is within the regular business of the employer, but which is
separate, distinct and identifiable from other undertakings; (2)
Particular job that is not within the regular business but is also
identifiably distinct and separate from the ordinary business
operations. Both begin and end at determined or determinable times.
A common basic requisite is that the designation as
project employees and their assignment to a specific project are
implemented in good faith, and not merely as a means of evading
otherwise applicable requirements of labor laws.
Kiamco v NLRC [1999]
[Proj employee in PNOC’s Geothermal Agro-Industrial
Plan Project in Negros Oriental. He was hired as a technician for 5
months or up to the completion of the project, whichever would come
first. After its termination, a 2nd one was entered into with same
terms. He was again rehired for another 6 mos.]
Project employees are those workers hired (1) for a
specific undertaking or project; (2) the completion or termination of
such project or undertaking has been determined at the time of
engagement of the employee. Under Policy Instruction #20 of the
Sec of Labor, Non-project or regular employees are those employed
without reference to any particular project.
Project Employees
Phil Jai-Alai and Amusement Corp v Clave [1983]
[Renovation of its main bldg, hired a plumber a mason
and 30 other workers. Extended because an annex was also
constructed.]
The casual or limited character of their employment is
evident. They were hired for a specific project. It was made known
and so understood at the start of hiring, that their services would last
until the completion of the renovation.
Sandoval Shipyards v NLRC [1985]
[Construction of LCT Catamaran. After 3 mos, the proj
was completed and they were terminated.]
Art. 281. The completion of their work or project
automatically terminates their employment. They are project workers,
regardless of the number of projects in which they have worked.
Imbuido v NLRC [2000]
[Data encoder for Intl Info Services who was engaged in
business of data encoding and keypunching. Contract provided that
by: OWEN AND RACH 
employment was up to a certain period, or when the proj is earlier
completed or when the client withdraws. Project was already
completed.]
She was a project employee, but she became a regular
employee for performing activities, which are usually necessary or
desirable in the usual business or trade of her employer,
continuously for a period of more than 3 years.
Rationale
De Ocampo v NLRC [1990]
[Employees terminated because of expiration of contract]
(Cartagenas v Romago Electric Co.) Contract workers are
not considered regular, their services being needed only when there
are projects to be undertake. The rationale of this rule is that if a
project has already been completed, it would be unjust to require the
employer to maintain them in the payroll while they are doing
absolutely nothing except waiting until another project is begun, if at
all. In effect, these stand-by workers would be enjoying the status of
privileged retainers, collecting payment for work not done, to be
disbursed by the employer from profits not earned. This is not fair by
any standard and can only lead to a coddling of labor at the expense
of mngmt.
Employer Obligation
AM Oreta and Co. v NLRC [1989]
[Carpenter in ENDECO’s project in Jeddah. Contract was
for 12 mos. 10 days after arriving there, he met an accident while
working at the jobsite.]
The law is clear to the effect that in all cases involving
employees engaged on probationary basis, the employer shall make
known to the employee at the time he is hired, the standards by
which he will qualify as a regular employee. Nowhere in the
employment contract executed is there a stipulation that the latter
shall undergo a proby period before he can qualify as a regular.
There is also no evidence that he had been apprised of such status
and the requirements which he should comply in order to be a
regular employee. In the absence of these requisites, there is
justification in concluding that he was a regular employee at tie he
was dismissed.
Specific Period
Purefood Corp v NLRC [1987]
[Hired by PureFoods for a fixed period of 5 months at its
tuna canner plant.]
Criteria under which term employment cannot be said to
be in circumvention of the law on security of tenure: (1) it was
21
knowingly and voluntarily agreed upon, no vitiation of consent; (2) no
moral dominance exercised by employer over employee.
SC has upheld legality of fixed term employment (Brent
School v Zamora). The decisive determinant in term employment
should not be the activities that the employee is called upon to
perform but the day certain agreed upon by the parties for the
commencement and termination of their employment relationship.
But, where from the circumstances it is apparent that the periods
have been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregarded as contrary to
public policy and morals. (Here, obviously, Purefoods had a
scheme.)
Labayog v MY San Biscuits [2006]
[mixers, packers and machine operators for a fixed term]
Contracts of employment for a fixed period are not
unlawful. What is objectionable is the practice of some scrupulous
employers who try to circumvent the law protecting workers from the
capricious termination of employment. While their employment was
necessary and desirable, they were employed temporarily only,
during periods when there was heightened demand for production.
Continuous Rehiring
Chua v CA [2004]
[Employees filed a petition for SSS coverage claiming
they were regular employees of construction co]
To be exempted from the presumption of regularity of
employment, agreement between a project employee and his
employer must strictly conform to the reqts and conditions under Art.
280. It is not enough that an employee is hired for a specific project
or phase of work. There must also be a determination of, or a clear
agreement on, the completion or termination of the project at the
time the employee was engaged.
CE Construction Corp v Cioco [2004]
[Hired as carpenters and laborers by the construction co.
for various projects for 9 yrs. Prior to the start of every proj, they
signed individual employment contracts.]
The fact that they had been employed with the company
for several years on various projects, did not automatically make
them regular employees considering that the definition of regular
employment in Art. 280 makes specific exception with respect to
project employment. Re-hiring did not confer upon them regular
employment status.
Workpool Employees
Maraguinot v NLRC [1998]
 LABOR MIDTERMS MAGIC NOTES!
A project EE or a member of a work pool may acquire the
status of a regular employee when the following concur: (1) there is
continuous rehiring of project employees even after cessation of a
project; (2) tasks performed by the project employee are vital,
necessary and indispensable to the usual business or trade of the
employer.
A workpool may exist although the workers in the pool do
not receive salaries and are free to seek other employment during
temporary breaks in the business, provided, that the worker shall be
available when called to report for a project. Although primarily
applicable to regular seasonal workers, this setup can likewise be
applied to project workers insofar as the effect of the temporary
cessation is concerned. This is beneficial to both the employer and
employee for it prevents the unjust situation of coddling labor at the
expense of capital ant at the same time enables the workers to attain
the status of regular employees.
Aguilar Corp v NLRC [1997]
[Helper-electrician in the business of contracting
refrigeration and other related works.]
Members of a work pool from which a construction
company draws it project employees, if considered employees of the
construction co while in the work pool, are non-project employees or
employees for an indefinite period. If they are employed in a
particular project, the completion of the project or any phase thereof
will not mean severance of the EE relationship.
Abesco Construction v Ramirez [2006]
Length of Service
Palomares v NLRC [1997]
[Contracts of employment for the five year expansion
program of the company]
Even if they were repetitively rehired on the basis of a
contract of employment for more than one year, they cannot be
considered regularized. Length of service is not the controlling
determinant of the employment tenure of a project employee. It is
based on whether or not the employment has been fixed for a
specific project or undertaking, the completion of which has been
determined at the time of the engagement of the employee. The 2 nd
par of Art. 280 providing that an employee who has rendered service
for at least 1 yr shall be considered a regular employee, pertains to
casual employees and not to project employees.
Fil Pre-Fabricated Bldg Systems v Puente [2005]
[Initially hired as an installer by the construction company;
promoted to mobile crane operator; employed with the company for
the past 10 years]
by: OWEN AND RACH 
Length of service of a project employee is not the
controlling test but whether or not the employment has been fixed for
a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the
employee.
7.05 CASUAL EMPLOYEES
Art. 280. Regular and casual employment. An employment shall
be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That any employee who has rendered at least
one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such
activity exists.
Nature of Work
AM Oreta and Co v NLRC [1989]
What determines regularity or casualness is not the
employment contract, written or otherwise, but the nature of the job.
If the job is usually necessary or desirable to the main business of
the employer, then employment is regular.
One Year Service
Kimberly v Drilon [1990]
Those who have rendered at least one year of service,
whether continuous or broken are deemed regular with respect to
the activity in which they are employed. While the actual
regularization of these employees entails the mechanical act of
issuing regular appointment paper and compliance with such other
operating procedures as may be adopted by the empoyer, it is more
in keeping with the intent and spirit of the law to rule that the status
of regular employment attaches to the casual worker on the day
immediately after the end of his first yr of service.
Integrated Contractor and Plumbing Works Inc v CA [2005]
If the employee has been performing the job for at least
one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not
indispensability of that activity to the business.
7.06 CONTRACT – FIXED PERIOD
Tests Validity
Brent School v Zamora [1990]
22
Athletic director at Brent and her contract was for a fixed
term of 5 years. Ground for termination was completion of contract.
Since the entire purpose behind the development of the
legislation culminating in the present Art. 280 of the LC clearly
appears to have been, as already observed to prevent circumvention
of the employee’s right to be secure in his tenure, the clause in said
article indiscriminately and completely ruling out all written or oral
agreements conflicting with the concept of regular employment as
defined therein should be construed to refer to the substantive evil
that the Code itself has singled out: agreements entered into
precisely to circumvent the security of tenure. It should have NO
application to instances (1) where a fixed period of employment was
agreed upon knowingly and voluntarily by the parties, without any
force, duress or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his consent
(2) where it satisfactorily appears that the parties dealt with each
other on more or less equal terms with no moral dominance
whatever being exercised by the employer over the employee.
Cielo v NLRC [1991]
In Brent School v Zamora, SC affirmed the general
principle that “where from the circumstances it is apparent that
periods have been imposed to preclude acquisition of tenurial
security by the employee, they should be struck down or disregarded
as contrary to public policy, morals, etc.”
Millares v NLRC [2002]
Viernes v NLRC [2003]
[Meter readers of Benguet Electric Coop for less than a
month’s duration, but were still allowed to work beyond such period]
Work performed was necessary or desirable in the usual
business, hence they are regular. The fact alone that they had
rendered service for a period of less than 6 months does not make
their employment status as probationary. The principle in Brent
School applies only with respect to fixed term employments.
Philips Semiconductor v Fadriquela [2004]
Pangilinan v General Milling [2004]
Seasonal Employees
Magalos v NLRC [1997]
The employment of seasonal employees legally ends
upon completion of the project or the season.
Phil Tobacco etc v NLRC [1998]
 LABOR MIDTERMS MAGIC NOTES!
Seasonal workers who are called to work from time to
time and are temporarily laid off during off-season are not separated
from service in said period, but are merely considered on leave until
reemployed.
San Miguel Corp v NLRC [1998]
Manila Hotel v CIR [2003]
[Pines Hotel employees were demanding additional pay
for overtime service rendered during exigencies of the business. Mla
Hotel answered that overtime was not authorized but was rendered
voluntarily bec they wanted to avail of tips.]
Seasonal employees called to work from time to time and
temporarily laid off during off season are regulars but are on leave of
absence without pay until they are re-employed. Their relationship is
never severed but only suspended. (Reemployed during summer
season)
Industrial etc v CIR [2000]
[WON seasonal workers are new workers] NO. The
cessation of the Central Azucera’s milling activities at the end of the
milling season is not permanent or definitive, it is merely temporary;
it is a foreseeable suspension of work, and both activities will be
resumed, as they are in fact resumed, when sugar cane ripe for
milling is again available.
Hacienda Bino v Cuenca [2005]
While the records sufficiently show that the work was
seasonal in nature, there was no proof that they were hired for the
duration of one season only. This is different from the Mercado case
because there, the workers were classified as seasonal since they
were employed for a definite period, the hacienda being smaller in
size; they also offered their services to the neighboring haciendas.
Poseidon Fishing v NLRC [2006]
[Chief Mate -> Boat Captain -> Radio Operator]
Activity of fish catching is a continuous process and could
hardly be considered as seasonal in nature. His job was directly
related to the deep-sea fishing business of Poseidon; being
necessary and important to the business, he is deemed regular.
Section 8: Probationary Employee
Statutory Reference
Book VI, Rule I, Sec 6 Omnibus Rules
SECTION 6. Probationary employment. — There is probationary
employment where the employee, upon his engagement, is made to
undergo a trial period during which the employer determines his
by: OWEN AND RACH 
fitness to qualify for regular employment, based on reasonable
standards made known to him at the time of engagement.
Probationary employment shall be governed by the following rules:
(a) Where the work for which an employee has been engaged is
learnable or apprenticeable in accordance with the standards
prescribed by the Department of Labor, the probationary
employment period of the employee shall be limited to the authorized
learnership or apprenticeship period, whichever is applicable.
(b) Where the work is neither learnable nor apprenticeable, the
probationary employment period shall not exceed six (6) months
reckoned from the date the employee actually started working.
(c) The services of an employee who has been engaged on
probationary basis may be terminated only for a just cause or when
authorized by existing laws, or when he fails to qualify as a regular
employee in accordance with reasonable standards prescribed by
the employer.
(d) In all cases involving employees engaged on probationary basis,
the employer shall make known to the employee the standards
under which he will qualify as a regular employee at the time of his
engagement.
Where no standards are made known to the employee at that time,
he shall be deemed a regular employee. (DO No. 10 Series of 1997,
Effective June 22, 1997)
8.01 PROBATIONARY EMPLOYEES
Art. 281. Probationary employment. Probationary employment
shall not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just
cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer
to the employee at the time of his engagement. An employee who is
allowed to work after a probationary period shall be considered a
regular employee.
Art. 61. Contents of apprenticeship agreements. Apprenticeship
agreements, including the wage rates of apprentices, shall conform
to the rules issued by the Secretary of Labor and Employment. The
period of apprenticeship shall not exceed six months. Apprenticeship
agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75 percent of the applicable
minimum wage, may be entered into only in accordance with
apprenticeship programs duly approved by the Secretary of Labor
and Employment. The Department shall develop standard model
23
programs of apprenticeship. (As amended by Section 1, Executive
Order No. 111, December 24, 1986)
Definition
Intl Catholic Migration Comm v NLRC [1989]
[Probationary cultural orientation teacher for the refugee
service of the NGO]
A probationary employee, as understood under Art. 282
(now Art. 281 LC), is one who is on trial by an employer during which
the employer determines whether or not he is qualified for
permanent employment.
Purpose
Philemploy Services and Resources Inc v Rodriguez [2006]
[Factory worker deployed abroad]
There could be no illegal dismissal as the termination was
effected during the agreed probationary period. There is probationary
employment where the employee, upon his engagement, is made to
undergo a trial period during which the employer determines his
fitness to qualify for regular employment based on reasonable
standards made known to him at the time of engagement.
Dela Cruz v NLRC [2004]
[Hired as senior sales manager, a newly created position
in the company]
During the probationary period, the employer is given the
opportunity to observe the skill, competence and attitude of the
employee while the latter seeks to prove to the employer that he has
the qualifications to meet the reasonable standards for permanent
employment. The length of time is immaterial in determining the
correlative rights of both the employer and the employee in dealing
with each other during this period. (He was terminable anytime,
since not yet permanent.)
Grand Motors Corp v MOLE [1984]
Employer has the right or is at liberty to choose as to who
will be hired and who will be declined. It is within the exercise of this
right to select employees that he may set or fix a probationary period
within which the employer may test and observe the conduct of the
other before hiring him permanently.
Escorpizo v Universitty of Baguio [1999]
The word “probationary”, as used to describe the period
of employment, implies the purpose of the term or period.
Employer Right Set Period / Obligation
Grand Motors Corp v MOLE [1984]
 LABOR MIDTERMS MAGIC NOTES!
Orient Express Placements Phils v NLRC [1997]
Under Art. 281, the services of an employee hired on a
probationary basis may be terminated when he fails to qualify as a
regular employee in accordance with reasonable standards made
known by the employer to the employee at the time of engagement.
However, the Court cannot sustain his dismissal on this ground
because petitioner failed to specify the reasonable standards by
which respondent’s alleged poor performance was evaluated, much
less to prove that such standards were made known to him at time of
his recruitment in Manila.
Mitsubishi v Chrysler Labor Union [2004]
An employer, in the exercise of its mngmt prerogative,
may hire an employee on a probationary basis. Under Art. 281, the
employer must inform the employee of the standards for which his
employment may be considered for regularization.
Duration / Exception
Buiser v Leogardo [1984]
[Sales rep of Gen Telephone Directory Co.; probationary
status for 18 months]
Generally, the probationary period of employment is
limited to 6 months. The exception to this general rule is when the
parties to an employment contract may agree otherwise, such as
when the same is established by company policy or when the same
is required by the nature of the work to be performed by the
employee. There is recognition of the exercise of managerial
prerogatives in requiring a longer period, esp. where the employee
must learn a particular kind of work such as selling, or when the job
requires certain qualifications, skills, experience or training.
Policy Instruction #11 of Minister of Labor: “Under the LC,
six months is the general probationary period, but the probationary
period is actually the period needed to determine fitness for the job.
This period, for lack of a better measurement is deemed to be the
period needed to learn the job.”
Holiday Inn Manila v NLRC [1989]
Probation is the period during which employer may
determine if the employee is qualified for the possible inclusion in the
regular force. In this case, the period was for 3 weeks during the
employee’s on-the-job training. When her services were continued
after the training, employer in effect recognized that she passed
probation, presumably because they were acceptable. Even if it be
supposed that the probation did not end with the 3-wk OJT, there is
no reason why that period should not be included in the stipulated 6-
month period of probation.
by: OWEN AND RACH 
Bernardo v NLRC [1999]
[Deaf-mutes hired by Far East Bank as money sorters
and counters under “employment contract for handicapped workers”]
Contract signed by the petitioners is akin to a
probationary employment, during which the bank determined the
employee’s fitness for the job. When the bank renewed the contract
after the lapse of the 6-month probationary period, the employee
thereby became regular. Their disability did not render them
unqualified for the tasks assigned to them. No employer is allowed to
determine indefinitely the fitness of its employees.
Criteria Regularization
Alcira v NLRC [2004]
[Engineering support services supervisor]
Although probationary employees are also accorded
security of tenure, this protection ends upon expiration of the
probationary period. Even if they are not permanent, they are
accorded this constitutional protection in that they may only be
terminated for just cause or when they otherwise fail to qualify as
regular employees in accordance with reasonable standards made
known to him.
Extension of Contract
Mariwasa Manufacturing v Leogardo [1989]
[General utility worker; unsatisfactory work during proby
period of 6mos. but his prob period was extended for another 3 mos]
Extension was ex gratia, an act of liberality on the part of
his employer. By voluntarily agreeing to an extension of the
probationary period, he in effect waived any benefit attaching to the
completion of said period if he still failed to make the grade during
the period of extension. No public policy protecting the employee
and the security of his tenure is served by proscribing voluntary
agreements which, by reasonably extending the period of probation,
actually improve and further a probationary employee’s prospects of
demonstrating his fitness for regularization.
Absorbed Employees
Cebu Stevedoring Co v Regional Director [1988]
[Former employees of Cebu Customs Arrastre Services
because it was abolished; they were then absorbed by CSCI with the
same positions they previously held; 6mos later were dismissed]
They could not be considered probationary employees
because they were already well-trained in their respective functions.
24
While they were still with the CCAS, they were already clerks with 10
years of service, on the average. They were therefore not novices in
their jobs, but experienced workers.
Double Probation
A Prime Security Services v NLRC [2000]
[Security guard for a year of the sister co.]
There is no basis for subjecting an employee to a new
probationary or temporary employment where he had already
become a regular employee when he was absorbed by a sister
company. He became a regular employee upon completion of his 6-
month probationary status.
Termination and Salary
Intl Catholic Migration Commission v NLRC [1989]
If the purpose sought by the employer is neither attained
nor attainable within the said period, Art. 281 does not preclude the
employer from terminating the probationary employment on
justifiable causes.
Orient Express Placement Phil v NLRC [1997]
Unsatisfactory performance is not one of the just causes
for dismissal under the Labor Code.
Dela Cruz v NLRC [2004]
Rule Private School Teachers
Chiang Kai Shek College v CA [2004]
La Consolacion College v NLRC [2001]
For a private school teacher to acquire permanent status
in employment, the following must concur: (1) The teacher is a full-
time teacher; (2) The teacher must have rendered 3 consecutive
years of service; (3) Such service must have been satisfactory.
PART TWO: LABOR STANDARDS LAW
Purpose
Mariveles Shipyard Corp v CA [2003]
Labor standards are enacted by the legislature to
alleviate the plight of workers whose wages barely meet the spiraling
costs of basic needs. Labor laws are considered written in every
 LABOR MIDTERMS MAGIC NOTES!
contract. Stipulations in violation thereof are considered null.
Similarly, legislated wage increases are deemed amendments to the
contract. Thus, employers cannot hide behind their contracts in order
to evade their liability for noncompliance with the statutory minimum
wage.
Section 1: Employment Policy
1.01 PRE-EMPLOYMENT POLICY
Art. 12. Statement of objectives. It is the policy of the State:
a. To promote and maintain a state of full employment through
improved manpower training, allocation and utilization;
b. To protect every citizen desiring to work locally or overseas by
securing for him the best possible terms and conditions of
employment;
c. To facilitate a free choice of available employment by persons
seeking work in conformity with the national interest;
d. To facilitate and regulate the movement of workers in conformity
with the national interest;
e. To regulate the employment of aliens, including the establishment
of a registration and/or work permit system;
f. To strengthen the network of public employment offices and
rationalize the participation of the private sector in the recruitment
and placement of workers, locally and overseas, to serve national
development objectives;
g. To insure careful selection of Filipino workers for overseas
employment in order to protect the good name of the Philippines
abroad.
Section 2: Recruitment And Placement Of Workers
Statutory Reference
Art. 13. Definitions.
a. "Worker" means any member of the labor force, whether
employed or unemployed.
b. "Recruitment and placement" refers to any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or
not: Provided, That any person or entity which, in any manner, offers
or promises for a fee, employment to two or more persons shall be
deemed engaged in recruitment and placement.
c. "Private fee-charging employment agency" means any person or
entity engaged in recruitment and placement of workers for a fee
which is charged, directly or indirectly, from the workers or employers
or both.
by: OWEN AND RACH 
d. "License" means a document issued by the Department of Labor
authorizing a person or entity to operate a private employment
agency.
e. "Private recruitment entity" means any person or association
engaged in the recruitment and placement of workers, locally or
overseas, without charging, directly or indirectly, any fee from the
workers or employers.
f. "Authority" means a document issued by the Department of Labor
authorizing a person or association to engage in recruitment and
placement activities as a private recruitment entity.
g. "Seaman" means any person employed in a vessel engaged in
maritime navigation.
h. "Overseas employment" means employment of a worker outside
the Philippines.
i. "Emigrant" means any person, worker or otherwise, who
emigrates to a foreign country by virtue of an immigrant visa or
resident permit or its equivalent in the country of destination.
Art. 14. Employment promotion. The Secretary of Labor shall
have the power and authority:
a. To organize and establish new employment offices in addition to
the existing employment offices under the Department of Labor as
the need arises;
b. To organize and establish a nationwide job clearance and
information system to inform applicants registering with a particular
employment office of job opportunities in other parts of the country
as well as job opportunities abroad;
c. To develop and organize a program that will facilitate
occupational, industrial and geographical mobility of labor and
provide assistance in the relocation of workers from one area to
another; and
d. To require any person, establishment, organization or institution
to submit such employment information as may be prescribed by the
Secretary of Labor.
Art. 15. Bureau of Employment Services.
a. The Bureau of Employment Services shall be primarily
responsible for developing and monitoring a comprehensive
employment program. It shall have the power and duty:
1. To formulate and develop plans and programs to implement the
employment promotion objectives of this Title;
2. To establish and maintain a registration and/or licensing system
to regulate private sector participation in the recruitment and
placement of workers, locally and overseas, and to secure the best
possible terms and conditions of employment for Filipino contract
workers and compliance therewith under such rules and regulations
as may be issued by the Minister of Labor;
3. To formulate and develop employment programs designed to
benefit disadvantaged groups and communities;
25
4. To establish and maintain a registration and/or work permit
system to regulate the employment of aliens;
5. To develop a labor market information system in aid of proper
manpower and development planning;
6. To develop a responsive vocational guidance and testing system
in aid of proper human resources allocation; and
7. To maintain a central registry of skills, except seamen.
b. The regional offices of the Ministry of Labor shall have the original
and exclusive jurisdiction over all matters or cases involving
employer-employee relations including money claims, arising out of
or by virtue of any law or contracts involving Filipino workers for
overseas employment except seamen: Provided, That the Bureau of
Employment Services may, in the case of the National Capital
Region, exercise such power, whenever the Minister of Labor deems
it appropriate. The decisions of the regional offices of the Bureau of
Employment Services, if so authorized by the Minister of Labor as
provided in this Article, shall be appealable to the National Labor
Relations Commission upon the same grounds provided in Article
223 hereof. The decisions of the National Labor Relations
Commission shall be final and inappealable. (Superseded by Exec.
Order 797, May 1, 1982).
c. The Minister of Labor shall have the power to impose and collect
fees based on rates recommended by the Bureau of Employment
Services. Such fees shall be deposited in the National Treasury as a
special account of the General Fund, for the promotion of the
objectives of the Bureau of Employment Services, subject to the
provisions of Section 40 of Presidential Decree No. 1177.
Art. 16. Private recruitment. Except as provided in Chapter II of
this Title, no person or entity other than the public employment
offices, shall engage in the recruitment and placement of workers.
Art. 17. Overseas Employment Development Board. An
Overseas Employment Development Board is hereby created to
undertake, in cooperation with relevant entities and agencies, a
systematic program for overseas employment of Filipino workers in
excess of domestic needs and to protect their rights to fair and
equitable employment practices. It shall have the power and duty:
1. To promote the overseas employment of Filipino workers through
a comprehensive market promotion and development program;
2. To secure the best possible terms and conditions of employment
of Filipino contract workers on a government-to-government basis
and to ensure compliance therewith;
3. To recruit and place workers for overseas employment on a
government-to-government arrangement and in such other sectors
as policy may dictate; and
4. To act as secretariat for the Board of Trustees of the Welfare and
Training Fund for Overseas Workers.
 LABOR MIDTERMS MAGIC NOTES!
Art. 18. Ban on direct-hiring. No employer may hire a Filipino
worker for overseas employment except through the Boards and
entities authorized by the Secretary of Labor. Direct-hiring by
members of the diplomatic corps, international organizations and
such other employers as may be allowed by the Secretary of Labor
is exempted from this provision.
Art. 19. Office of Emigrant Affairs.
Pursuant to the national policy to maintain close ties with Filipino
migrant communities and promote their welfare as well as establish
a data bank in aid of national manpower policy formulation, an Office
of Emigrant Affairs is hereby created in the Department of Labor.
a. The Office shall be a unit at the Office of the Secretary and shall
initially be manned and operated by such personnel and through
such funding as are available within the Department and its attached
agencies. Thereafter, its appropriation shall be made part of the
regular General Appropriations Decree.
b. The office shall, among others, promote the well-being of
emigrants and maintain their close link to the homeland by:
1. serving as a liaison with migrant communities;
2. provision of welfare and cultural services;
3. promote and facilitate re-integration of migrants into the national
mainstream;
4. promote economic; political and cultural ties with the
communities; and
5. generally to undertake such activities as may be appropriate to
enhance such cooperative links.
Art. 20. National Seamen Board.
A National Seamen Board is hereby created which shall develop and
maintain a comprehensive program for Filipino seamen employed
overseas. It shall have the power and duty:
a. To provide free placement services for seamen;
1. To regulate and supervise the activities of agents or
representatives of shipping companies in the hiring of seamen for
overseas employment and secure the best possible terms of
employment for contract seamen workers and secure compliance
therewith;
2. To maintain a complete registry of all Filipino seamen.
b. The Board shall have original and exclusive jurisdiction over all
matters or cases including money claims, involving employer-
employee relations, arising out of or by virtue of any law or contracts
involving Filipino seamen for overseas employment. The decisions of
the Board shall be appealable to the National Labor Relations
Commission upon the same grounds provided in Article 223 hereof.
The decisions of the National Labor Relations Commission shall be
final and inappealable.
by: OWEN AND RACH 
Art. 21. Foreign service role and participation. To provide ample
protection to Filipino workers abroad, the labor attaches, the labor
reporting officers duly designated by the Secretary of Labor and the
Philippine diplomatic or consular officials concerned shall, even
without prior instruction or advice from the home office, exercise the
power and duty:
a. To provide all Filipino workers within their jurisdiction assistance
on all matters arising out of employment;
b. To insure that Filipino workers are not exploited or discriminated
against;
c. To verify and certify as requisite to authentication that the terms
and conditions of employment in contracts involving Filipino workers
are in accordance with the Labor Code and rules and regulations of
the Overseas Employment Development Board and National
Seamen Board;
d. To make continuing studies or researches and recommendations
on the various aspects of the employment market within their
jurisdiction;
e. To gather and analyze information on the employment situation
and its probable trends, and to make such information available; and
f. To perform such other duties as may be required of them from
time to time.
Art. 22. Mandatory remittance of foreign exchange earnings. It
shall be mandatory for all Filipino workers abroad to remit a portion
of their foreign exchange earnings to their families, dependents,
and/or beneficiaries in the country in accordance with rules and
regulations prescribed by the Secretary of Labor.
Art. 23. Composition of the Boards.
a. The OEDB shall be composed of the Secretary of Labor and
Employment as Chairman, the Undersecretary of Labor as Vice-
Chairman, and a representative each of the Department of Foreign
Affairs, the Department of National Defense, the Central Bank, the
Department of Education, Culture and Sports, the National
Manpower and Youth Council, the Bureau of Employment Services,
a workers’ organization and an employers’ organization and the
Executive Director of the OEDB as members.
b. The National Seamen Board shall be composed of the Secretary
of Labor and Employment as Chairman, the Undersecretary of Labor
as Vice-Chairman, the Commandant of the Philippine Coast Guard,
and a representative each of the Department of Foreign Affairs, the
Department of Education, Culture and Sports, the Central Bank, the
Maritime Industry Authority, the Bureau of Employment Services, a
national shipping association and the Executive Director of the NSB
as members.
c. The members of the Boards shall receive allowances to be
determined by the Board which shall not be more than P2,000.00 per
month.
26
d. The Boards shall be attached to the Department of Labor for
policy and program coordination. They shall each be assisted by a
Secretariat headed by an Executive Director who shall be a Filipino
citizen with sufficient experience in manpower administration,
including overseas employment activities. The Executive Director
shall be appointed by the President of the Philippines upon the
recommendation of the Secretary of Labor and shall receive an
annual salary as fixed by law. The Secretary of Labor shall appoint
the other members of the Secretariat.
e. The Auditor General shall appoint his representative to the
Boards to audit their respective accounts in accordance with auditing
laws and pertinent rules and regulations.
Art. 24. Boards to issue rules and collect fees. The Boards shall
issue appropriate rules and regulations to carry out their functions.
They shall have the power to impose and collect fees from
employers concerned, which shall be deposited in the respective
accounts of said Boards and be used by them exclusively to promote
their objectives.
Art. 25. Private sector participation in the recruitment and
placement of workers. Pursuant to national development
objectives and in order to harness and maximize the use of private
sector resources and initiative in the development and
implementation of a comprehensive employment program, the
private employment sector shall participate in the recruitment and
placement of workers, locally and overseas, under such guidelines,
rules and regulations as may be issued by the Secretary of Labor.
Art. 26. Travel agencies prohibited to recruit. Travel agencies
and sales agencies of airline companies are prohibited from
engaging in the business of recruitment and placement of workers
for overseas employment whether for profit or not.
Art. 27. Citizenship requirement. Only Filipino citizens or
corporations, partnerships or entities at least seventy-five percent
(75%) of the authorized and voting capital stock of which is owned
and controlled by Filipino citizens shall be permitted to participate in
the recruitment and placement of workers, locally or overseas.
Art. 28. Capitalization. All applicants for authority to hire or
renewal of license to recruit are required to have such substantial
capitalization as determined by the Secretary of Labor.
Art. 29. Non-transferability of license or authority. No license or
authority shall be used directly or indirectly by any person other than
the one in whose favor it was issued or at any place other than that
stated in the license or authority be transferred, conveyed or
assigned to any other person or entity. Any transfer of business
 LABOR MIDTERMS MAGIC NOTES!
address, appointment or designation of any agent or representative
including the establishment of additional offices anywhere shall be
subject to the prior approval of the Department of Labor.
RA 8759 – Public Employment Service Office Act of 1999
Sec. 2. Declaration of Policy. — It is a declared policy of the State
to promote full employment and equality of employment
opportunities for all, and for this purpose, to strengthen and expand
the existing employment facilitation service machinery of the
government particularly at the local levels.
Sec. 3. Establishment of the Public Employment Service
Office . — To carry out the above-declared policy, there shall be
established in all capital towns of provinces, key cities and other
strategic areas a Public Employment Service Office, hereinafter
referred to as "PESO," which shall be community-based and
maintained largely by local government units (LGUs) and a number
of nongovernmental organizations (NGOs) or community-based
organizations (CBOs) and state universities and colleges (SUCs).
The PESOs shall be linked to the regional offices of the Department
of Labor and Employment (DOLE) for coordination and technical
supervision, and to the DOLE central office, to constitute the national
employment service network.
Guidelines on Advertisements for Job Vacancies – DOLE
Memorandum Circular #16 [1988]
Guidelines on Application for Authority to Conduct Provincial
Recruitment and/or Job Fairs – DOLE Memo Circular #87 [1989]
Guidelines for the Conduct of Job Fair by Private Entities,
Non-Governmental Organizations and Educational Institutions
– DOLE Order #2 [2001]
In line with the government's thrust to further improve the delivery of
frontline services and to ensure the Jobs Fairs conducted by private
entities, non-government organizations, and educational institutions
are in conformity with the provisions of the Labor Code, as amended
and its Implementing rules and Regulations, the following guidelines
are hereby issued:
Section 1. Objectives -
General Objective
The Guidelines shall help to fast track the delivery of
employment facilitation services to the poor, unemployed, new
entrants to the labor force, displaced and returning migrant workers
throughout the country; assist in the filling-up of vacancies of
by: OWEN AND RACH 
employers; and strengthen support for anti-illegal recruitment
campaign of the Department of Labor and Employment.
Section 2. Definition of Terms -
c. Requesting Party - refers to the entity requesting to
host or sponsor a Jobs air.
d. Participating Entity - refers to employers, companies,
licensed private recruitment and placement agencies, licensed
employment agencies for overseas employment, registered
contractors/subcontractors who will be joining the Jobs Fair for
purposes of recruitment.
e. Private Recruitment and Placement Agency
(PRPA) - refers to recruitment and placement agency for local
employment duly licensed by the OLE.
f. Private Employment Agency (PEA ) - refers to a
recruitment and placement agency for overseas employment duly
licensed by the DOLE.
j. Jobs Fair - refers to an employment facilitation strategy
to fast-track the meeting of job-seekers and employers,
licensed/authorized recruitment of agencies, and registered job
contractors/subcontractors in one specific venue at a specified date
and to disseminate information on other DOLE programs and
services.
Section 6. Prohibitions -
a. No jobs Fair by private entities or any non-government
organizations shall be conducted without the prior written approval of
the Regional Director.
b. No fees whatsoever shall be collected from the job
seekers or applicants in he Jobs Fair. Collection of placement fees
from applicants and service fees from principals shall be in
accordance with the existing rules and Regulations governing
Private Recruitment and Placement Agencies for Local employment
or the existing POEA Rules and regulations on collection of
placement fees for overseas employment.
c. No advertisements or press release should be made
by the organizer/s or cost/s without the proper clearance from the
Regional Office, provided that hen overseas recruitment agencies
and/or overseas job vacancies are
included, proper clearance/s from the POEA are also
secured.
Section 7. Jobs Fair by Educational Institutions – Educational
Institutions may conduct Job Fair/s without seeking approval of the
DOLE, provided that:
a. said Job Fair/s are solely for their students and new
graduates;
b. the same is to be conducted within their premises;
c. the participating entities and companies are hiring for
their own staff implement;
The DOLE Regional Office or PESO may supervise,
provide technical assistance in the conduct of jobs fair and monitor
27
the results of the jobs fair. Should the Jobs Fair by educational
institutions fail to conform with the provisions of this Section, ll the
other provisions of this guidelines shall apply.
Section 9. Penalties – Any violation of this guidelines involving
recruitment and placement for local employment hall be punishable
in accordance with Articles 39 and 288 of the Labor Code, as
amended. However, if the violation is related to recruitment and
placement of overseas employment, the pertinent provisions and its
Implementing Rules and Regulations or the POEA Rules and
regulations shall apply. This penal provision shall apply only to
recruitment and placement agencies for local and/or overseas
employment participating in the Jobs Fair.
(Manila, Philippines, March 22, 2001)
Prescribing Additional Requirements, Conditions and
Procedures for the Deployment of Performing Artists – DOLE
Circular #01-91[1991]
Pursuant to Art. 36 of PD 442, as amended, otherwise known as the
Labor Code of the Philippines, and in order to provide continuing
employment opportunities to legitimate Filipino performing artists
abroad and to ensure their protection and welfare, the following shall
govern the recruitment and placement of Filipino performing artists
overseas:
1. No Filipino entertainer shall be deployed outside the Philippines
except for legitimate performing artists consisting of musicians,
singers and members of dance troupes. In all cases, the performing
artists must have a track record of legitimate and reputable
performance in the Philippines for at least one year. In no case shall
the performing artist be below 23 years old.
2. The Secretary of Labor and Employment may, for justifiable
reasons, exempt performing artists from coverage hereof.
3. The deployment of Filipino artists shall be limited to reputable
night clubs, cabarets, hotels and theaters accredited by the Phil
Embassy/Consulate through the Office of labor Attache.
3. Only licensed recruitment agencies and their registered talent
managers/promoters shall be allowed to recruit, train, manage and
deploy performing artists.
5. Foreign employer/promoters shall only be allowed to negotiate for
the deployment of performing artists after accreditation by the
Embassy/Consulate, through the Office of the Labor Attache.
Foreign employers/promoters shall be required to post a bond in the
Philippines in the amount of US$20, 000 or its equivalent in
 LABOR MIDTERMS MAGIC NOTES!
Philippine currency, to answer for all claims of the artist againsts the
employer/promoter.
11. The POEA shall no longer be involved in the audition of talents.
The recruitment agencies shall ensure that only legitimate
performing artists are deployed.
12. The Filipino recruitment agency shall likewise be required to file
with the POEA a copy, with an English translation, of the booking
contract between the agency and the foreign employer/promoter.
EO 857 – Governing the Remittance in the Philippines of
Foreign Exchange Earnings of Filipino Workers Abroad and
for other Purposes [1982]
Sec. 1. It shall be mandatory for every Filipino contract worker
abroad to remit regularly a portion of his foreign exchange earnings
to his beneficiary in the Philippines through the Philippine banking
system. Licensed agencies and other entities authorized by the
Ministry of Labor and Employment to recruit Filipino workers for
overseas employment are similarly required to remit their workers'
earnings as provided for in this Order.
Sec. 2. All contracts of employment and agency or service
agreements submitted to the Ministry of Labor and Employment shall
contain a proviso that shall make it mandatory for workers to remit to
the Philippines in foreign exchange at least the following portions of
their earnings;
a) Seamen or mariners: Seventy (70) percent of basic salary;
b) Workers of Filipino contractors and construction companies:
Seventy (70) percent of basic salary;
c) Doctors, engineers, teachers, nurses and other professional
workers whose contract provide for free board and lodging: Seventy
(70) percent of basic salary;
d) All other professional workers whose employment contracts do
not provide for free board and lodging facilities: Fifty (50) percent of
basic salary;
e) Domestic and other service workers: Fifty (50) percent of basic
salary;
f) All other workers not falling under the aforementioned
categories: Fifty (50) percent of basic salary.
Sec. 3. Passports issued to Filipino contract workers shall have
an initial period of validity of one year provided that the Ministry of
Foreign Affairs may adjust, as circumstances may require, the initial
passport validity period. The passport shall be renewable every year
upon submission of usual requirements and presentation of
documentary proof of compliance to the remittance requirement in
the percentages provided for in this Order. The Ministry of Foreign
by: OWEN AND RACH 
Affairs shall not extend or renew the passport of any contract worker
unless proof of his compliance with the mandatory remittance
requirement is submitted.
Sec. 4. The Ministry of Labor and Employment shall not approve
the renewal of employment contracts and agency or service
agreements unless proof of remittance of foreign exchange earnings
is submitted.
Sec. 5. For purposes of this Order, proof of compliance with the
mandatory remittance requirement as mentioned in Section 1 hereof,
may consist of any of the following documents or such alternative as
may be approved by the Central Bank of the Philippines showing
that the contract worker had in fact effected aforesaid remittance and
had caused the surrender of the same for pesos through the
Philippine banking system:
a. Confirmed bank (foreign) remittance form;
b. Certification from employer, duly authenticated, that remittance
has been effected;
c. Certification as to the surrender for pesos to the Philippine
banking system; and
d. Receipt of International Postal Money Order.
Sec. 6. Remittances of foreign exchange earnings may be
undertaken individually by the contract worker or collectively through
the employer under a payroll deduction scheme, in accordance with
Central Bank regulations and applicable guidelines.
Sec. 7. As a prerequisite for accreditation by the Ministry of Labor
and Employment, an employer shall commit to provide facilities to
effect the remittances and monitoring of foreign exchange earnings
of Filipino workers in his employ.
Sec. 8. The Central Bank of the Philippines shall cause necessary
arrangements to be made with the appropriate financing institutions
to handle the remittances called for in this Order. In the absence of
appropriate banking facilities, the Embassy or Consulate nearest to
the job site, in accordance with local laws and regulations, may act in
the interim as the channel for remittance of foreign exchange
earnings. The Ministry of Foreign Affairs shall immediately inform the
Central Bank of the Philippines these arrangements and shall remit
all funds thereto.
Sec. 9. Contract workers who fail to comply with the requirements
of this Order shall be suspended or excluded from the list of eligible
workers for overseas employment. In cases of subsequent
violations, he shall be repatriated from the job site at the expense of
the employer or at his expense, as the case may be.
28
Filipino or foreign employers and/or their representatives who fail to
comply with the requirements under this Order shall be excluded
from the overseas employment program. In the case of local private
employment agencies and entities, failure to comply with the
provisions hereof shall be a ground for cancellation of their license or
authority to recruit workers for overseas employment, without
prejudice to their liabilities under existing laws and regulations.
Sec. 10. The Ministries of Labor and Employment and Foreign
Affairs and the Central Bank of the Philippines shall draw up the
necessary rules and procedures for the proper implementation of this
Order within ten (10) days from the signing hereof.
2.01 RECRUITMENT AND PLACEMENT OF WORKERS
Art. 13. Definitions.
(a) "Worker" means any member of the labor force, whether
employed or unemployed.
(b) "Recruitment and placement" refers to any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or
not: Provided, That any person or entity which, in any manner, offers
or promises for a fee, employment to two or more persons shall be
deemed engaged in recruitment and placement.
Definition – Law Structure
People v Panis [1988]
The number of persons dealt with is not an essential
ingredient of the act of recruitment and placement of workers. Any of
the acts mentioned in the basic rule in Art. 13(b) will constitute
recruitment and placement even if only one prospective worker is
involved. The proviso merely lays down a rule of evidence that
where a fee is collected in consideration of a promise or offer of
employment to 2 or more prospective workers, the individual or entity
dealing with them shall be deemed to be engaged in the act of
recruitment and placement. The words “shall be deemed” create that
presumption.
People v Sualo [2000]
Recruitment -> BASIC RULE:: ACTS: canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring
workers -> INCLUDES: Referrals, Contract services, Acts
accompanied by a promise or advertising for employment, locally or
abroad, Consideration, whether for profit or not --> PROVISO:: actor-
any person or entity; act- who offers or promises employment;
 LABOR MIDTERMS MAGIC NOTES!
consideration- for a fee; number- to 2 or more; presumption- deemed
engaged in recruitment and placement
2.02 EMPLOYMENT AGENCY
Art. 13. Definitions.
(c) "Private fee-charging employment agency" means any person or
entity engaged in recruitment and placement of workers for a fee
which is charged, directly or indirectly, from the workers or employers
or both.
(d) "License" means a document issued by the Department of Labor
authorizing a person or entity to operate a private employment
agency.
(e) "Private recruitment entity" means any person or association
engaged in the recruitment and placement of workers, locally or
overseas, without charging, directly or indirectly, any fee from the
workers or employers.
(f) "Authority" means a document issued by the Department of Labor
authorizing a person or association to engage in recruitment and
placement activities as a private recruitment entity.
2.03 ALLOWED ENTITIES
A. General Rule
Art. 16. Private recruitment. Except as provided in Chapter II of
this Title, no person or entity other than the public employment
offices, shall engage in the recruitment and placement of workers.
Art. 18. Ban on direct-hiring. No employer may hire a Filipino
worker for overseas employment except through the Boards and
entities authorized by the Secretary of Labor. Direct-hiring by
members of the diplomatic corps, international organizations and
such other employers as may be allowed by the Secretary of Labor
is exempted from this provision.
Art. 25. Private sector participation in the recruitment and
placement of workers. Pursuant to national development
objectives and in order to harness and maximize the use of private
sector resources and initiative in the development and
implementation of a comprehensive employment program, the
private employment sector shall participate in the recruitment and
placement of workers, locally and overseas, under such guidelines,
rules and regulations as may be issued by the Secretary of Labor.
Art. 12. Statement of objectives. It is the policy of the State: (f) To
strengthen the network of public employment offices and rationalize
by: OWEN AND RACH 
the participation of the private sector in the recruitment and
placement of workers, locally and overseas, to serve national
development objectives.
B. Allowed Entities
a. Private – 13(c), (e)
Art. 13. Definitions. (c) “Private fee-charging employment agency"
means any person or entity engaged in recruitment and placement of
workers for a fee which is charged, directly or indirectly, from the
workers or employers or both; (e) “Private recruitment entity" means
any person or association engaged in the recruitment and placement
of workers, locally or overseas, without charging, directly or
indirectly, any fee from the workers or employers.
b. Public
Art. 14. Employment promotion. The Secretary of Labor shall
have the power and authority: g. To organize and establish new
employment offices in addition to existing employment offices under
the Department of Labor as the need arises.
2.04 PROHIBITED ENTITY
Art. 16. Private recruitment. Except as provided in Chapter II of
this Title, no person or entity other than the public employment
offices, shall engage in the recruitment and placement of workers.
Art. 18. Ban on direct-hiring. No employer may hire a Filipino
worker for overseas employment except through the Boards and
entities authorized by the Secretary of Labor. Direct-hiring by
members of the diplomatic corps, international organizations and
such other employers as may be allowed by the Secretary of Labor
is exempted from this provision.
Art. 26. Travel agencies prohibited to recruit. Travel agencies
and sales agencies of airline companies are prohibited from
engaging in the business of recruitment and placement of workers
for overseas employment whether for profit or not.
2.05 TECHNIQUES OF REGULATION
Art. 25. Private sector participation in the recruitment and
placement of workers. Pursuant to national development
29
objectives and in order to harness and maximize the use of private
sector resources and initiative in the development and
implementation of a comprehensive employment program, the
private employment sector shall participate in the recruitment and
placement of workers, locally and overseas, under such guidelines,
rules and regulations as may be issued by the Secretary of Labor.
Art. 26. Travel agencies prohibited to recruit. Travel agencies
and sales agencies of airline companies are prohibited from
engaging in the business of recruitment and placement of workers
for overseas employment whether for profit or not.
Art. 27. Citizenship requirement. Only Filipino citizens or
corporations, partnerships or entities at least seventy-five percent
(75%) of the authorized and voting capital stock of which is owned
and controlled by Filipino citizens shall be permitted to participate in
the recruitment and placement of workers, locally or overseas.
Art. 28. Capitalization. All applicants for authority to hire or
renewal of license to recruit are required to have such substantial
capitalization as determined by the Secretary of Labor.
Art. 29. Non-transferability of license or authority. No license or
authority shall be used directly or indirectly by any person other than
the one in whose favor it was issued or at any place other than that
stated in the license or authority be transferred, conveyed or
assigned to any other person or entity. Any transfer of business
address, appointment or designation of any agent or representative
including the establishment of additional offices anywhere shall be
subject to the prior approval of the Department of Labor.
Art. 30. Registration fees. The Secretary of Labor shall
promulgate a schedule of fees for the registration of all applicants for
license or authority.
Art. 31. Bonds. All applicants for license or authority shall post such
cash and surety bonds as determined by the Secretary of Labor to
guarantee compliance with prescribed recruitment procedures, rules
and regulations, and terms and conditions of employment as may be
appropriate.
Art. 32. Fees to be paid by workers. Any person applying with a
private fee-charging employment agency for employment assistance
shall not be charged any fee until he has obtained employment
through its efforts or has actually commenced employment. Such fee
shall be always covered with the appropriate receipt clearly showing
 LABOR MIDTERMS MAGIC NOTES!
the amount paid. The Secretary of Labor shall promulgate a
schedule of allowable fees.
Art. 33. Reports on employment status. Whenever the public
interest requires, the Secretary of Labor may direct all persons or
entities within the coverage of this Title to submit a report on the
status of employment, including job vacancies, details of job
requisitions, separation from jobs, wages, other terms and conditions
and other employment data.
Art. 34. Prohibited practices. It shall be unlawful for any
individual, entity, licensee, or holder of authority:
a. To charge or accept, directly or indirectly, any amount greater
than that specified in the schedule of allowable fees prescribed by
the Secretary of Labor, or to make a worker pay any amount greater
than that actually received by him as a loan or advance;
b. 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 any act of misrepresentation for the purpose of securing a
license or authority under this Code.
d. To induce or attempt to induce a worker already employed to quit
his employment in order to offer him to another unless the transfer is
designed to liberate the worker from oppressive terms and
conditions of employment;
e. To influence or to attempt to influence any person or entity not to
employ any worker who has not applied for employment through his
agency;
f. To engage in the recruitment or placement of workers in jobs
harmful to public health or morality or to the dignity of the Republic of
the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary of
Labor or by his duly authorized representatives;
h. To fail to file reports on the status of employment, placement
vacancies, remittance of foreign exchange earnings, separation from
jobs, departures and such other matters or information as may be
required by the Secretary of Labor.
i. To substitute or alter employment contracts approved and verified
by the Department of Labor from the time of actual signing thereof by
the parties up to and including the periods of expiration of the same
without the approval of the Secretary of Labor;
j. To become an officer or member of the Board of any corporation
engaged in travel agency or to be engaged directly or indirectly in
the management of a travel agency; and
k. To withhold or deny travel documents from applicant workers
before departure for monetary or financial considerations other than
those authorized under this Code and its implementing rules and
regulations.
by: OWEN AND RACH 
Art. 35. Suspension and/or cancellation of license or
authority. The Minister of Labor shall have the power to suspend or
cancel any license or authority to recruit employees for overseas
employment for violation of rules and regulations issued by the
Ministry of Labor, the Overseas Employment Development Board, or
for violation of the provisions of this and other applicable laws,
General Orders and Letters of Instructions.
Art. 36. Regulatory power. The Secretary of Labor shall have the
power to restrict and regulate the recruitment and placement
activities of all agencies within the coverage of this Title and is
hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the provisions
of this Title.
Art. 37. Visitorial Power. The Secretary of Labor or his duly
authorized representatives may, at any time, inspect the premises,
books of accounts and records of any person or entity covered by
this Title, require it to submit reports regularly on prescribed forms,
and act on violation of any provisions of this Title.
Art. 38. Illegal recruitment.
a. Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-
licensees or non-holders of authority, shall be deemed illegal and
punishable under Article 39 of this Code. The Department of Labor
and Employment or any law enforcement officer may initiate
complaints under this Article.
b. Illegal recruitment when committed by a syndicate or in large
scale shall be considered an offense involving economic sabotage
and shall be penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out
by a group of three (3) or more persons conspiring and/or
confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed in large scale if
committed against three (3) or more persons individually or as a
group.
c. The Secretary of Labor and Employment or his duly authorized
representatives shall have the power to cause the arrest and
detention of such non-licensee or non-holder of authority if after
investigation it is determined that his activities constitute a danger to
national security and public order or will lead to further exploitation of
job-seekers. The Secretary shall order the search of the office or
premises and seizure of documents, paraphernalia, properties and
other implements used in illegal recruitment activities and the closure
of companies, establishments and entities found to be engaged in
30
the recruitment of workers for overseas employment, without having
been licensed or authorized to do so.
Art. 39. Penalties.
The penalty of life imprisonment and a fine of One Hundred
Thousand Pesos (P1000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein;
a. Any licensee or holder of authority found violating or causing
another to violate any provision of this Title or its implementing rules
and regulations shall, upon conviction thereof, suffer the penalty of
imprisonment of not less than two years nor more than five years or
a fine of not less than P10,000 nor more than P50,000, or both such
imprisonment and fine, at the discretion of the court;
b. Any person who is neither a licensee nor a holder of authority
under this Title found violating any provision thereof or its
implementing rules and regulations shall, upon conviction thereof,
suffer the penalty of imprisonment of not less than four years nor
more than eight years or a fine of not less than P20,000 nor more
than P100,000 or both such imprisonment and fine, at the discretion
of the court;
c. If the offender is a corporation, partnership, association or entity,
the penalty shall be imposed upon the officer or officers of the
corporation, partnership, association or entity responsible for
violation; and if such officer is an alien, he shall, in addition to the
penalties herein prescribed, be deported without further proceedings;
In every case, conviction shall cause and carry the automatic
revocation of the license or authority and all the permits and
privileges granted to such person or entity under this Title, and the
forfeiture of the cash and surety bonds in favor of the Overseas
Employment Development Board or the National Seamen Board, as
the case may be, both of which are authorized to use the same
exclusively to promote their objectives.
License
People v Buli-e [2003]
The agency was actually licensed but licenses are
territorial; it must only be within the place specified although
applicants may be nonresidents of such place. Licensed agencies
are prohibited from conducting any provincial recruitment, job fairs or
recruitment activities of any form outside of the address stated in the
license, acknowledged branch or extension office, without prior
authority secured from the POEA.
2.06 ILLEGAL RECRUITMENT
Art. 38. Illegal recruitment.
 LABOR MIDTERMS MAGIC NOTES!
a. Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-
licensees or non-holders of authority, shall be deemed illegal and
punishable under Article 39 of this Code. The Department of Labor
and Employment or any law enforcement officer may initiate
complaints under this Article.
b. Illegal recruitment when committed by a syndicate or in large
scale shall be considered an offense involving economic sabotage
and shall be penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out
by a group of three (3) or more persons conspiring and/or
confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed in large scale if
committed against three (3) or more persons individually or as a
group.
c. The Secretary of Labor and Employment or his duly authorized
representatives shall have the power to cause the arrest and
detention of such non-licensee or non-holder of authority if after
investigation it is determined that his activities constitute a danger to
national security and public order or will lead to further exploitation of
job-seekers. The Secretary shall order the search of the office or
premises and seizure of documents, paraphernalia, properties and
other implements used in illegal recruitment activities and the closure
of companies, establishments and entities found to be engaged in
the recruitment of workers for overseas employment, without having
been licensed or authorized to do so.
Art. 34. Prohibited practices. It shall be unlawful for any
individual, entity, licensee, or holder of authority:
a. To charge or accept, directly or indirectly, any amount greater
than that specified in the schedule of allowable fees prescribed by
the Secretary of Labor, or to make a worker pay any amount greater
than that actually received by him as a loan or advance;
b. 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 any act of misrepresentation for the purpose of securing a
license or authority under this Code.
d. To induce or attempt to induce a worker already employed to quit
his employment in order to offer him to another unless the transfer is
designed to liberate the worker from oppressive terms and
conditions of employment;
e. To influence or to attempt to influence any person or entity not to
employ any worker who has not applied for employment through his
agency;
f. To engage in the recruitment or placement of workers in jobs
harmful to public health or morality or to the dignity of the Republic of
the Philippines;
by: OWEN AND RACH 
g. To obstruct or attempt to obstruct inspection by the Secretary of
Labor or by his duly authorized representatives;
h. To fail to file reports on the status of employment, placement
vacancies, remittance of foreign exchange earnings, separation from
jobs, departures and such other matters or information as may be
required by the Secretary of Labor.
i. To substitute or alter employment contracts approved and verified
by the Department of Labor from the time of actual signing thereof by
the parties up to and including the periods of expiration of the same
without the approval of the Secretary of Labor;
j. To become an officer or member of the Board of any corporation
engaged in travel agency or to be engaged directly or indirectly in
the management of a travel agency; and
k. To withhold or deny travel documents from applicant workers
before departure for monetary or financial considerations other than
those authorized under this Code and its implementing rules and
regulations.
RA 8042: Sec. 6. DEFINITIONS. - For purposes of this Act, illegal
recruitment shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, procuring workers and includes
referring, contact services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by a non-license
or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines. Provided, that such non-license or
non-holder, who, in any manner, offers or promises for a fee
employment abroad to two or more persons shall be deemed so
engaged. It shall likewise include the following acts, whether
committed by any persons, whether a non-licensee, non-holder,
licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than
the specified in the schedule of allowable fees prescribed by the
Secretary of Labor and Employment, or to make a worker pay any
amount greater than that actually received by him as a loan or
advance;
(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 any act of misrepresentation for the purpose of securing a
license or authority under the Labor Code;
(d) To induce or attempt to induce a worker already employed to quit
his employment in order to offer him another unless the transfer is
designed to liberate a worker from oppressive terms and conditions
of employment;
(e) To influence or attempt to influence any persons or entity not to
employ any worker who has not applied for employment through his
agency;
31
(f) To engage in the recruitment of placement of workers in jobs
harmful to public health or morality or to dignity of the Republic of the
Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of
Labor and Employment or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement
vacancies, remittances of foreign exchange earnings, separations
from jobs, departures and such other matters or information as may
be required by the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment
contracts approved and verified by the Department of Labor and
Employment from the time of actual signing thereof by the parties up
to and including the period of the expiration of the same without the
approval of the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement agency to
become an officer or member of the Board of any corporation
engaged in travel agency or to be engaged directly on indirectly in
the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers
before departure for monetary or financial considerations other than
those authorized under the Labor Code and its implementing rules
and regulations;
(l) Failure to actually deploy without valid reasons as determined by
the Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the workers in
connection with his documentation and processing for purposes of
deployment, in cases where the deployment does not actually take
place without the worker's fault. Illegal recruitment when committed
by a syndicate or in large scale shall be considered as offense
involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate carried out
by a group of three (3) or more persons conspiring or confederating
with one another. It is deemed committed in large scale if committed
against three (3) or more persons individually or as a group.
The persons criminally liable for the above offenses are the
principals, accomplices and accessories. In case of juridical persons,
the officers having control, management or direction of their
business shall be liable.
Elements of a Crime
People v Oralono [2000]
People v Sagayaga [2004]
People v Baytic [2003]
Illegal recruitment is committed when two elements
concur. (1) The offender has not complied with the guidelines issued
by the Sec of Labor and Employment, particularly wrt to securing of
a license or authority to enable one to engage lawfully in recruitment
and placement of workers, either locally or overseas; (2) He or she
undertakes either any activity within the meaning of “recruitment and
 LABOR MIDTERMS MAGIC NOTES!
placement” defined under Art. 13 par (b) or any of the prohibited
practices enumerated under Art. 34 of the Labor Code.
Large Scale
People v Buli-e [2003]
People v Dujua [2004]
People v Reyes [1995]
In cases of illegal recruitment in large scale, a third
element is added: that the accused commits the acts against three or
more persons, individually or as a group.
Referral
People v Meris [2000]
[She told victims that she would accompany them to
agency where she also applied]
The query is WON she merely introduced complainants to
the recruiters or did her actions go beyond that. Although the
accused was not an employee of the alleged illegal recruiter,
evidence shows that she was the one who approached complainants
and prodded them to seek employment abroad. This is clearly an act
of referral. Their recruitment would not have been consummated
were it not for the direct participation of the accused in the
recruitment process.
People v Fortuna [2003]
Absence of receipts to evidence payment to the recruiter
would not warrant an acquittal. The testimony of complainants found
to be credible.
Employees
People v Corpuz [2003]
An employee of a company engaged in illegal recruitment
may be held liable as a principal, together with the employer, if it is
shown that he actively and consciously participated in the illegal
recruitment. However, where it is shown that the employees was
merely acting under the direction of his superiors and was unaware
that his acts constituted a crime, he may not be held criminally liable
for an act done for, and in behalf of his employer.
People v Gutierrez [2004]
Accused cannot escape liability by claiming that she was
not aware that before working for her employer in the recruitment
agency, she should first be registered with the POEA. Illegal
recruitment in large scale is malum prohibitum, not malum in se.
Good faith is not a defense.
2.07 ENFORCEMENT AND SANCTIONS
by: OWEN AND RACH 
Art. 36. Regulatory power. The Secretary of Labor shall have the
power to restrict and regulate the recruitment and placement
activities of all agencies within the coverage of this Title and is
hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the provisions
of this Title.
Art. 37. Visitorial Power. The Secretary of Labor or his duly
authorized representatives may, at any time, inspect the premises,
books of accounts and records of any person or entity covered by
this Title, require it to submit reports regularly on prescribed forms,
and act on violation of any provisions of this Title.
Art. 39. Penalties.
The penalty of life imprisonment and a fine of One Hundred
Thousand Pesos (P1000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein;
a. Any licensee or holder of authority found violating or causing
another to violate any provision of this Title or its implementing rules
and regulations shall, upon conviction thereof, suffer the penalty of
imprisonment of not less than two years nor more than five years or
a fine of not less than P10,000 nor more than P50,000, or both such
imprisonment and fine, at the discretion of the court;
b. Any person who is neither a licensee nor a holder of authority
under this Title found violating any provision thereof or its
implementing rules and regulations shall, upon conviction thereof,
suffer the penalty of imprisonment of not less than four years nor
more than eight years or a fine of not less than P20,000 nor more
than P100,000 or both such imprisonment and fine, at the discretion
of the court;
c. If the offender is a corporation, partnership, association or entity,
the penalty shall be imposed upon the officer or officers of the
corporation, partnership, association or entity responsible for
violation; and if such officer is an alien, he shall, in addition to the
penalties herein prescribed, be deported without further proceedings;
d. In every case, conviction shall cause and carry the automatic
revocation of the license or authority and all the permits and
privileges granted to such person or entity under this Title, and the
forfeiture of the cash and surety bonds in favor of the Overseas
Employment Development Board or the National Seamen Board, as
the case may be, both of which are authorized to use the same
exclusively to promote their objectives.
Executive Sec v CA [2004]
SC had already applied RA 8042 thereby affirming its
validity. Legality of certain portions of RA 8042 was questioned –
illegal recruitment, penalties, and venue.
32
2.08 LIABILITY OF AGENCY
G&M Phil Inc v Bato-Malaquz [2005]
Contractual undertakings submitted to the Bureau of
Employment Services constitute the legal basis for holding the
recruiter and other private employment or recruitment agencies,
liable jointly and severally with its principal, the foreign-based
employer, for all claims filed by recruited workers which may arise in
connection with the implementation of the service agreements or
employment contracts.
2.09 MIGRANT WORKERS ACT
RA 8042: Sec. 2. DECLARATION OF POLICIES. -
(a) In the pursuit of an independent foreign policy and while
considering national sovereignty, territorial integrity, national interest
and the right to self-determination paramount in its relations with
other states, the State shall, at all times, uphold the dignity of its
citizens whether in country or overseas, in general, and Filipino
migrant workers, in particular.
(b) The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and
equality of employment opportunities for all. Towards this end, the
State shall provide adequate and timely social, economic and legal
services to Filipino migrant workers.
(c) While recognizing the significant contribution of Filipino migrant
workers to the national economy through their foreign exchange
remittances, the State does not promote overseas employment as a
means to sustain economic growth and achieve national
development. The existence of the overseas employment program
rests solely on the assurance that the dignity and fundamental
human rights and freedoms of the Filipino citizens shall not, at any
time, be compromised or violated. The State, therefore, shall
continuously create local employment opportunities and promote the
equitable distribution of wealth and the benefits of development.
(d) The State affirms the fundamental equality before the
law of women and men and the significant role of women in nation-
building. Recognizing the contribution of overseas migrant women
workers and their particular vulnerabilities, the State shall apply
gender sensitive criteria in the formulation and implementation of
policies and programs affecting migrant workers and the composition
of bodies tasked for the welfare of migrant workers.
(e) Free access to the courts and quasi-judicial bodies
and adequate legal assistance shall not be denied to any persons by
reason of poverty. In this regard, it is imperative that an effective
mechanism be instituted to ensure that the rights and interest of
distressed overseas Filipinos, in general, and Filipino migrant
 LABOR MIDTERMS MAGIC NOTES!
workers, in particular, documented or undocumented, are adequately
protected and safeguarded.
(f) The right of Filipino migrant workers and all overseas
Filipinos to participate in the democratic decision-making processes
of the State and to be represented in institutions relevant to overseas
employment is recognized and guaranteed.
(g) The State recognizes that the ultimate protection to all
migrant workers is the possession of skills. Pursuant to this and as
soon as practicable, the government shall deploy and/or allow the
deployment only to skilled Filipino workers.
(h) Non-governmental organizations, duly recognized as
legitimate, are partners of the State in the protection of Filipino
migrant workers and in the promotion of their welfare, the State shall
cooperate with them in a spirit of trust and mutual respect.
(I) Government fees and other administrative costs of
recruitment, introduction, placement and assistance to migrant
workers shall be rendered free without prejudice to the provision of
Section 36 hereof.
Nonetheless, the deployment of Filipino overseas
workers, whether land-based or sea-based by local service
contractors and manning agencies employing them shall be
encouraged. Appropriate incentives may be extended to them.
RA 8042: Sec. 4. DEPLOYMENT OF MIGRANT WORKERS. -
The State shall deploy overseas Filipino workers only in countries
where the rights of Filipino migrant workers are protected. The
government recognizes any of the following as guarantee on the part
of the receiving country for the protection and the rights of overseas
Filipino workers:
(a) It has existing labor and social laws protecting the rights of
migrant workers;
(b) It is a signatory to multilateral conventions, declaration or
resolutions relating to the protection of migrant workers;
(c) It has concluded a bilateral agreement or arrangement with the
government protecting the rights of overseas Filipino workers; and
(d) It is taking positive, concrete measures to protect the rights of
migrant workers.
RA 8042: Sec. 6. DEFINITIONS. - For purposes of this Act, illegal
recruitment shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, procuring workers and includes
referring, contact services, promising or advertising for employment
abroad, whether for profit or not, when undertaken by a non-license
or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines. Provided, that such non-license or
non-holder, who, in any manner, offers or promises for a fee
employment abroad to two or more persons shall be deemed so
by: OWEN AND RACH 
engaged. It shall likewise include the following acts, whether
committed by any persons, whether a non-licensee, non-holder,
licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than
the specified in the schedule of allowable fees prescribed by the
Secretary of Labor and Employment, or to make a worker pay any
amount greater than that actually received by him as a loan or
advance;
(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 any act of misrepresentation for the purpose of securing a
license or authority under the Labor Code;
(d) To induce or attempt to induce a worker already employed to quit
his employment in order to offer him another unless the transfer is
designed to liberate a worker from oppressive terms and conditions
of employment;
(e) To influence or attempt to influence any persons or entity not to
employ any worker who has not applied for employment through his
agency;
(f) To engage in the recruitment of placement of workers in jobs
harmful to public health or morality or to dignity of the Republic of the
Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of
Labor and Employment or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement
vacancies, remittances of foreign exchange earnings, separations
from jobs, departures and such other matters or information as may
be required by the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment
contracts approved and verified by the Department of Labor and
Employment from the time of actual signing thereof by the parties up
to and including the period of the expiration of the same without the
approval of the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement agency to
become an officer or member of the Board of any corporation
engaged in travel agency or to be engaged directly on indirectly in
the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers
before departure for monetary or financial considerations other than
those authorized under the Labor Code and its implementing rules
and regulations;
(l) Failure to actually deploy without valid reasons as determined by
the Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the workers in
connection with his documentation and processing for purposes of
deployment, in cases where the deployment does not actually take
place without the worker's fault. Illegal recruitment when committed
33
by a syndicate or in large scale shall be considered as offense
involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate carried out
by a group of three (3) or more persons conspiring or confederating
with one another. It is deemed committed in large scale if committed
against three (3) or more persons individually or as a group.
The persons criminally liable for the above offenses are the
principals, accomplices and accessories. In case of juridical persons,
the officers having control, management or direction of their
business shall be liable.
RA 8042: Sec.10. MONEY CLAIMS. - Notwithstanding any
provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the priginal and
exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages.
The liability of the principal/employer and the
recruitment/placement agency for any and all claims under this
section shall be joint and several. This provisions shall be
incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. The performance bond to be
filed by the recruitment/placement agency, as provided by law, shall
be answerable for all money claims or damages that may be
awarded to the workers. If the recruitment/placement agency is a
juridical being, the corporate officers and directors and partners as
the case may be, shall themselves be jointly and solidarily liable with
the corporation or partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or
duration of the employment contract and shall not be affected by any
substitution, amendment or modification made locally or in a foreign
country of the said contract.
Any compromise/amicable settlement or voluntary
agreement on money claims inclusive of damages under this section
shall be paid within four (4) months from the approval of the
settlement by the appropriate authority.
In case of termination of overseas employment without
just, valid or authorized cause as defined by law or contract, the
workers shall be entitled to the full reimbursement of his placement
fee with interest of twelve percent (12%) per annum, plus his salaries
for the unexpired portion of his employment contract or for three (3)
months for every year of the unexpired term, whichever is less.
Non-compliance with the mandatory periods for
resolutions of cases provided under this section shall subject the
responsible officials to any or all of the following penalties:
 LABOR MIDTERMS MAGIC NOTES!
(a) The salary of any such official who fails to render his
decision or resolutions within the prescribed period shall be, or
caused to be, withheld until the said official complies therewith;
(b) Suspension for not more than ninety (90) days; or
(c) Dismissal from the service with disqualifications to
hold any appointive public office for five (5) years.
Provided, however, that the penalties herein provided
shall be without prejudice to any liability which any such official may
have incurred under other existing laws or rules and regulations as a
consequence of violating the provisions of this paragraph.
Phil. Employ Services v Paranio [2004]
Dismissal was not for valid and legal grounds. The rule
lex loci contractus governs. Therefore, the Labor Code, its
implementing rules and regulations, and other laws affecting labor,
apply in this case. (BUT Sec 10 of RA 8042 was applied to grant
them their money claims)
Placewell Int Services Corp v Camote [2006]
RA 8042 explicitly prohibits the substitution or alteration to
the prejudice of the worker, of employment contracts already
approved and verified by the DOLE from the time of actual signing
thereof by the parties up to and including the period of the expiration
of the same without approval of the DOLE.
SECTION 3: ALIEN EMPLOYMENT
Statutory Reference
Omnibus Guidelines For The Issuance Of Employment
Permits To Foreign Nationals
Pursuant to the provisions of Articles 5, and 40 of PD 442, as
amended, the provisions of RULE XIV, Book I of its Implementing
Rules and Regulations, Section 17(5), Chapter 4, Title VII of the
Administrative Code of 1987, the following Omnibus Guidelines for
the issuance of Employment Permits are hereby promulgated:
Rule I. Coverage and Exemption
1. The following shall apply for Alien Employment Permit (AEP):
1.1 All foreign nationals seeking admission to the Philippines for the
purpose of employment;
1.2 Missionaries or religious workers who intend to engage in gainful
employment;
1.3 Holders of Special Investors Resident Visa (SIRV), Special
Retirees Resident Visa (SRRV), Treaty Traders Visa (9d) or Special
Non-immigrant Visa (47(a)2), who occupy any executive, advisory,
supervisory, or technical position in any establishment;
1.4 Agencies, organizations or individuals whether public or private,
who secure the services of foreign professionals to practice their
by: OWEN AND RACH 
professions in the Philippines in the Philippines under reciprocity and
other international agreements.
1.5 Non-Indo Chinese Refugees who are asylum seekers and given
refugee status by the United Nations High Commissioner on
Refugees (UNHCR) or the Department of Justice under DOJ
Department Order No. 94, series of 1998;
1.6 Resident foreign nationals seeking employment in the
Philippines.
2. Exemption. The following categories of foreign nationals are
exempt from securing an employment permit in order to work in the
Phiilppines.
2.1 All members of the diplomatic services and foreign government
officials accredited by the Philippine Government;
2.2 Officers and staff of international organizations of which the
Philippine government is a cooperating member, and their legitimate
spouse desiring to work in the Philippines;
2.3 Foreign nationals elected as members of the Governing board
who do not occupy any other position, but have only voting rights in
the corporation; and
2.4 All foreign nationals granted exemption by special laws and all
other laws that may be promulgated by the Congress.
RULE II. Procedures in the Processing of Applications for AEP
1. All foreign nationals seeking employment in the Philippines under
Rule 1 hereof or their prospective employers, shall file their
applications with the DOLE Regional Office having jurisdiction over
the intended place of work.
2. Fees - The applicant shall pay filing, publication and permit fees in
the amount of Eight Thousand Pesos (P8,000.00) for each
application for AEP with a validity of one (1) year. Three Thousand
Pesos (P3,000.00) shall be charged for every additional year of
validity or a fraction thereof.
3. An AEP shall be issued based on the following:
3.1 Compliance bye the applicant employer or the foreign national
with the substantive and documentary requirements;
3.2 Determination of the DOLE Secretary that there is no Filipino
national who is competent, able and willing to do the job for which
the services of the applicant is desired;
3.3 Assessment of the DOLE Secretary that the employment of the
foreign national will redound to national benefit;
4. Denial of Application for AEP - An application for AEP may be
denied based on the ground of non-compliance with any of the
requirements for issuance of AEP or for misrepresentation of facts in
the application or submission of falsified or tampered documents.
Foreign nationals whose applications have been denied shall not be
allowed to re-apply in any of the DOLE Regional Offices.
5. Renewal of Permit - An application for renewal of AEP shall be
filed at least fifteen (15) days before its expiration. For elective
officers, applications for renewal shall be filed upon election or at
34
least thirty (30) days before the effectivity of the applicant's term of
office if the succeeding term of office is ascertained.
Failure to file the application for renewal of permit within the
prescribed period shall be subject to fines of Five Thousand Pesos
(5,000.00), if filed within six (6) months after the prescribed period
and Ten Thousand Pesos (10,000.00), if filed after six (6) months.
Failure to renew the AEP within one (1) year after its expiration shall
be a cause for its revocation or cancellation.
6. The employer shall notify the DOLE-RO which issued the permit of
the date of the assumption to duty of the foreign national within thirty
(30) days from issuance of the permit.
7. Validity of Permits - The validity of permits shall be as follows:
7.1 As a general rule, the validity of permits shall be for a period of
one (1) year, unless the employment contract, consultancy services,
or other modes of engagement or term of office for elective officers,
provides for a longer period.
7.2 The effectivity of the renewal shall be on the day after the
expiration of the previous permit, regardless of whether or not the
renewal is granted before or after the expiration of the previous
permit.
7.3 As a general rule, the permits shall be valid only for the position
and the employer for which it was issued, except in case of foreign
nationals who are holders of multiple positions in one corporation,
where one AEP shall be valid for such multiple positions.
7.4 The permits of resident foreign nationals shall be valid for
multiple employers, regardless of the nature and duration of their
employment, provided that they shall report changes in their
employment status and the identity of their employers to the DOLE
Regional Office which has issued the permit.
RULE III. Revocation/Cancellation of Employment Permits Issued
1. The permits issued may, motu proprio or upon a petition, be
cancelled or revoked based on any of the following grounds:
1.1 Misrepresentation of facts or falsification of the documents
submitted;
1.2 The foreign national has been declared as an undesirable alien
by competent authorities;
1.3 Non-compliance with the conditions for which the AEP was
issued;
1.4 Failure to renew AEP within one (1) year after its expiration.
2. Petitions for cancellation or revocation of permits issued shall be
resolved within thirty (30) calendars from receipt thereof.
3. Any aggrieved party may file a Motion for Reconsideration and/or
Appeal and the same shall be resolved based on Paragraph 4 of this
Rule.
4. Remedies in Case of Denial or Cancellation - A Motion for
Reconsideration maybe filed by an aggrieved party within seven (7)
calendar days after receipt of the Order of Denial/Cancellation. The
DOLE Regional Director shall resolve the said Motion for
Reconsideration within ten (10) calendar days from receipt thereof.
 LABOR MIDTERMS MAGIC NOTES!
A motion for Reconsideration filed after the period of seven (7)
calendar days but within ten (10) calendar days after receipt of the
denial shall be treated as an appeal.
An appeal from the decision of the DOLE Regional Director may be
filed with the Secretary of labor and Employment within ten (10)
calendar days from receipt of an Order from the DOLE Regional
Director. The decision of the Secretary of Labor and Employment
shall be final and unappealable.
RULE IV. Penal and Transitory Provisions
1. The DOLE Regional Directors, after due notice and hearing, shall
have the power to order and impose a fine of Five Thousand Pesos
(P5,000.00) on foreign nationals found working without an AEP for
less than one (1) year and Ten Thousand Pesos (P10,000.00) for
more than one (1) year.
2. All applications for employment permit/certificates pending at the
DOLE-RO upon the effectivity of these Guidelines shall be covered
and processed under the provisions of these Guidelines..
3. Holders of provisional and extended AEPs issued under
Memorandum dated 24 August 2001 regarding Alternative Interim
Measures for the Issuance of Alien Employment Permits, shall apply
for an AEP pursuant to these Guidelines on or before the expiration
of the provisional and extended AEP.
4. Foreign nationals who are already working in the country and who
have not yet secured the requisite employment permit shall have
ninety (90) days from the effectivity of these Guidelines to secure the
said employment permit without penalty.
3.01 COVERAGE
Non-Resident Alien
Almodiel v NLRC [1993]
[Almodiel was dismissed and his duties were delegated to
a Chinese. He raised that the other person had no working permit.]
Art. 40 of the Labor Code which requires employment
permit refers to non-resident aliens. The employment permit is
required for entry into the country for employment purposes and is
issued after determination of the non-availability of a person in the
Philippines who is competent able and willing at the time of
application to perform the service for which the alien is desired. A
resident alien does not fall within the ambit of this provision.
3.02 TECHNIQUE REGULATION – Employment Permit
Art. 40. Employment permit of non-resident aliens. Any alien
seeking admission to the Philippines for employment purposes and
any domestic or foreign employer who desires to engage an alien for
by: OWEN AND RACH 
employment in the Philippines shall obtain an employment permit
from the Department of Labor.
The employment permit may be issued to a non-resident alien or to
the applicant employer after a determination of the non-availability of
a person in the Philippines who is competent, able and willing at the
time of application to perform the services for which the alien is
desired.
For an enterprise registered in preferred areas of investments, said
employment permit may be issued upon recommendation of the
government agency charged with the supervision of said registered
enterprise.
Art. 41. Prohibition against transfer of employment.
a. After the issuance of an employment permit, the alien shall not
transfer to another job or change his employer without prior approval
of the Secretary of Labor.
b. Any non-resident alien who shall take up employment in violation
of the provision of this Title and its implementing rules and
regulations shall be punished in accordance with the provisions of
Articles 289 and 290 of the Labor Code.
c. In addition, the alien worker shall be subject to deportation after
service of his sentence.
Art. 42. Submission of list. Any employer employing non-resident
foreign nationals on the effective date of this Code shall submit a list
of such nationals to the Secretary of Labor within thirty (30) days
after such date indicating their names, citizenship, foreign and local
addresses, nature of employment and status of stay in the country.
The Secretary of Labor shall then determine if they are entitled to an
employment permit.
RA 7916 – The Special Economic Zone Act of 1995 – Sec 2(b); 3(c);
4; 10; 40
Sec 2. Declaration of Policy. - It is the declared policy of the
government to translate into practical realities the following State
policies and mandates in the
1987 Constitution, namely:
b)"The State shall promote the preferential use of Filipino labor,
domestic materials and locally produced goods, and adopt measures
that help make them competitive." (Sec. 12, Art. XII)
In pursuance of these policies, the government shall
actively encourage, promote, induce and accelerate a sound and
balanced industrial, economic and social development of the country
in order to provide jobs to the people especially those in the rural
areas, increase their productivity and their individual and family
income, and thereby improve the level and quality of their living
condition through the establishment, among others, of special
economic zones in suitable and strategic locations in the country and
35
through measures that shall effectively attract legitimate and
productive foreign investments.
Sec 3. Purposes, Intents and Objectives . - It is the purpose,
intent and objective of this Act:
c)To promote the flow of investors, both foreign and local, into
special economic zones which would generate employment
opportunities and establish backward and forward linkages among
industries in and around the economic zones;
Sec 4. Definition of Terms. - For purposes of this Act, the
following definitions shall apply to the following terms:
a)"Special economic zones (SEZ)" - hereinafter referred to as the
ECOZONES, are selected areas with highly developed or which
have the potential to be developed into agroindustrial, industrial
tourist/recreational, commercial, banking, investment and financial
centers. An ECOZONE may contain any or all of the following:
industrial estates (IEs), export processing zones (EPZs), free trade
zones, and tourist/recreational centers.
b)"Industrial estate (IE)" - refers to a tract of land subdivided and
developed according to a comprehensive plan under a unified
continuous management and with provisions for basic infrastructure
and utilities, with or without pre-built standard factory buildings and
community facilities for the use of the community of industries.
c)"Export processing zone (EPZ)" - a specialized industrial estate
located physically and/or administratively outside customs territory,
predominantly oriented to export production. Enterprises located in
export processing zones are allowed to import capital equipment and
raw materials free from duties, taxes and other import restrictions.
d)"Free trade zone" - an isolated policed area adjacent to a port of
entry (as a seaport) and/or airport where imported goods may be
unloaded for immediate transshipment or stored, repacked, sorted,
mixed, or otherwise manipulated without being subject to import
duties. However, movement of these imported goods from the
freetrade area to a non-free-trade area in the country shall be
subject to import duties. Enterprises within the zone are granted
preferential tax
treatment and immigration laws are more lenient.
Sec 10. Immigration. - Any investor within the ECOZONE whose
initial investment shall not be less than One hundred fifty thousand
dollars ($150,000), his/her spouse and dependent children under
twenty-one (21) years of age shall be granted permanent resident
status within the ECOZONE. They shall have freedom of ingress and
egress to and from the ECOZONE without any need of special
authorization from the Bureau of Immigration.
The PEZA shall issue working visas renewable every two (2) years
to foreign executives and other aliens, possessing highly-technical
skills which no Filipino within the ECOZONE possesses, as certified
by the Department of Labor and Employment. The names of aliens
granted permanent residents status and working visas by the PEZA
 LABOR MIDTERMS MAGIC NOTES!
shall be reported to the Bureau of Immigration within thirty (30) days
after issuance thereof.
Sec 40. Percentage of Foreign Nationals. – Employment of
foreign nationals hired by ECOZONE enterprises in a supervisory,
technical or advisory capacity shall not exceed five percent (5%) of
its workforce without the express authorization of the Secretary of
Labor and Employment.
RA 7918 – Amending Omnibus Investments Code of 1987 – Sec
39(g)
Art. 39. Incentives to Registered Enterprises. — All registered
enterprises shall be granted the following incentives to the extent
engaged in a preferred area of investment:
"(g) Employment of Foreign Nationals. — Subject to the provisions of
Section 29 of Commonwealth Act No. 613, as amended, a registered
enterprise may employ foreign nationals in supervisory, technical or
advisory positions for a period not exceeding five (5) years from its
registration, extendible for limited periods at the discretion of the
Board: Provided, however, That when the majority of the capital
stock of a registered enterprise is owned by foreign investors, the
positions of president, treasurer, and general manager or their
equivalents may be retained by foreign nationals beyond the period
set forth within.
"Foreign nationals under employment contract within the purview of
this incentive, their spouses and unmarried children under twenty-
one (21) years of age, who are not excluded by Section 29 of
Commonwealth Act No. 613, as amended, shall be permitted to
enter and reside in the Philippines during the period of employment
of such foreign nationals.
A registered enterprise shall train Filipinos as understudies of foreign
nationals in administrative, supervisory and technical skills and shall
submit annual reports on such training to the Board.
Authority Employment Permit – Issuance
General Milling Corp v Torres [1991]
[Tim Cone’s employment permit was cancelled.]
The Labor Code itself specifically empowers respondent
Secretary to make a determination as to the availability of the
services of a “person in the Philippines who is competent, able and
willing at the time of application to perform the services for which an
alien is desired. The DOLE is the agency vested with jurisdiction to
determine the question of availability of local workers. The
constitutional validity of legal provisions granting such jurisdiction
and authority and requiring proof of non-availability of local nationals
able to carry out the duties of the position involved, cannot be
seriously questioned.
by: OWEN AND RACH 
Section 4: Employment Of Apprentices, Learners And
Handicapped Workers
Statutory Reference
Art. 57. Statement of objectives. This Title aims:
1. To help meet the demand of the economy for trained manpower;
2. To establish a national apprenticeship program through the
participation of employers, workers and government and non-
government agencies; and
3. To establish apprenticeship standards for the protection of
apprentices.
Art. 58. Definition of Terms. As used in this Title:
a. "Apprenticeship" means practical training on the job
supplemented by related theoretical instruction.
b. An "apprentice" is a worker who is covered by a written
apprenticeship agreement with an individual employer or any of the
entities recognized under this Chapter.
d. An "apprenticeable occupation" means any trade, form of
employment or occupation which requires more than three (3)
months of practical training on the job supplemented by related
theoretical instruction.
e. "Apprenticeship agreement" is an employment contract wherein
the employer binds himself to train the apprentice and the apprentice
in turn accepts the terms of training.
Art. 59. Qualifications of apprentice. To qualify as an apprentice,
a person shall:
a. Be at least fourteen (14) years of age;
b. Possess vocational aptitude and capacity for appropriate tests;
and
c. Possess the ability to comprehend and follow oral and written
instructions.
Trade and industry associations may recommend to the Secretary of
Labor appropriate educational requirements for different
occupations.
Art. 60. Employment of apprentices. Only employers in the highly
technical industries may employ apprentices and only in
apprenticeable occupations approved by the Secretary of Labor and
Employment. (As amended by Section 1, Executive Order No. 111,
December 24, 1986)
Art. 61. Contents of apprenticeship agreements. Apprenticeship
agreements, including the wage rates of apprentices, shall conform
to the rules issued by the Secretary of Labor and Employment. The
36
period of apprenticeship shall not exceed six months. Apprenticeship
agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75 percent of the applicable
minimum wage, may be entered into only in accordance with
apprenticeship programs duly approved by the Secretary of Labor
and Employment. The Department shall develop standard model
programs of apprenticeship. (As amended by Section 1, Executive
Order No. 111, December 24, 1986)
Art. 62. Signing of apprenticeship agreement. Every
apprenticeship agreement shall be signed by the employer or his
agent, or by an authorized representative of any of the recognized
organizations, associations or groups and by the apprentice.
An apprenticeship agreement with a minor shall be signed in his
behalf by his parent or guardian, if the latter is not available, by an
authorized representative of the Department of Labor, and the same
shall be binding during its lifetime.
Every apprenticeship agreement entered into under this Title shall be
ratified by the appropriate apprenticeship committees, if any, and a
copy thereof shall be furnished both the employer and the
apprentice.
Art. 63. Venue of apprenticeship programs. Any firm, employer,
group or association, industry organization or civic group wishing to
organize an apprenticeship program may choose from any of the
following apprenticeship schemes as the training venue for
apprentice:
a. Apprenticeship conducted entirely by and within the sponsoring
firm, establishment or entity;
b,. Apprenticeship entirely within a Department of Labor and
Employment training center or other public training institution; or
c. Initial training in trade fundamentals in a training center or other
institution with subsequent actual work participation within the
sponsoring firm or entity during the final stage of training.
Art. 64. Sponsoring of apprenticeship program. Any of the
apprenticeship schemes recognized herein may be undertaken or
sponsored by a single employer or firm or by a group or association
thereof or by a civic organization. Actual training of apprentices may
be undertaken:
a. In the premises of the sponsoring employer in the case of
individual apprenticeship programs;
b. In the premises of one or several designated firms in the case of
programs sponsored by a group or association of employers or by a
civic organization; or
c. In a Department of Labor and Employment training center or
other public training institution.
 LABOR MIDTERMS MAGIC NOTES!
Art. 65. Investigation of violation of apprenticeship
agreement. Upon complaint of any interested person or upon its
own initiative, the appropriate agency of the Department of Labor
and Employment or its authorized representative shall investigate
any violation of an apprenticeship agreement pursuant to such rules
and regulations as may be prescribed by the Secretary of Labor and
Employment.
Art. 66. Appeal to the Secretary of Labor and Employment.
The decision of the authorized agency of the Department of Labor
and Employment may be appealed by any aggrieved person to the
Secretary of Labor and Employment within five (5) days from receipt
of the decision. The decision of the Secretary of Labor and
Employment shall be final and executory.
Art. 67. Exhaustion of administrative remedies. No person shall
institute any action for the enforcement of any apprenticeship
agreement or damages for breach of any such agreement, unless he
has exhausted all available administrative remedies.
Art. 68. Aptitude testing of applicants. Consonant with the
minimum qualifications of apprentice-applicants required under this
Chapter, employers or entities with duly recognized apprenticeship
programs shall have primary responsibility for providing appropriate
aptitude tests in the selection of apprentices. If they do not have
adequate facilities for the purpose, the Department of Labor and
Employment shall perform the service free of charge.
Art. 69. Responsibility for theoretical instruction.
Supplementary theoretical instruction to apprentices in cases where
the program is undertaken in the plant may be done by the employer.
If the latter is not prepared to assume the responsibility, the same
may be delegated to an appropriate government agency.
Art. 70. Voluntary organization of apprenticeship programs;
exemptions.
a. The organization of apprenticeship program shall be primarily a
voluntary undertaking by employer;
b. When national security or particular requirements of economic
development so demand, the President of the Philippines may
require compulsory training of apprentices in certain trades,
occupations, jobs or employment levels where shortage of trained
manpower is deemed critical as determined by the Secretary of
Labor and Employment. Appropriate rules in this connection shall be
promulgated by the Secretary of Labor and Employment as the need
arises; and
by: OWEN AND RACH 
c. Where services of foreign technicians are utilized by private
companies in apprenticeable trades, said companies are required to
set up appropriate apprenticeship programs.
Art. 71. Deductibility of training costs. An additional deduction
from taxable income of one-half (1/2) of the value of labor training
expenses incurred for developing the productivity and efficiency of
apprentices shall be granted to the person or enterprise organizing
an apprenticeship program: Provided, That such program is duly
recognized by the Department of Labor and Employment: Provided,
further, That such deduction shall not exceed ten (10%) percent of
direct labor wage: and Provided, finally, That the person or enterprise
who wishes to avail himself or itself of this incentive should pay his
apprentices the minimum wage.
Art. 72. Apprentices without compensation. The Secretary of
Labor and Employment may authorize the hiring of apprentices
without compensation whose training on the job is required by the
school or training program curriculum or as requisite for graduation
or board examination.
Art. 73. Learners defined. Learners are persons hired as trainees
in semi-skilled and other industrial occupations which are non-
apprenticeable and which may be learned through practical training
on the job in a relatively short period of time which shall not exceed
three (3) months.
Art. 74. When learners may be hired. Learners may be
employed when no experienced workers are available, the
employment of learners is necessary to prevent curtailment of
employment opportunities, and the employment does not create
unfair competition in terms of labor costs or impair or lower working
standards.
Art. 75. Learnership agreement. Any employer desiring to employ
learners shall enter into a learnership agreement with them, which
agreement shall include:
a. The names and addresses of the learners;
b. The duration of the learnership period, which shall not exceed
three (3) months;
c. The wages or salary rates of the learners which shall begin at not
less than seventy-five percent (75%) of the applicable minimum
wage; and
d. A commitment to employ the learners if they so desire, as regular
employees upon completion of the learnership. All learners who have
been allowed or suffered to work during the first two (2) months shall
be deemed regular employees if training is terminated by the
37
employer before the end of the stipulated period through no fault of
the learners.
The learnership agreement shall be subject to inspection by the
Secretary of Labor and Employment or his duly authorized
representative.
Art. 76. Learners in piecework. Learners employed in piece or
incentive-rate jobs during the training period shall be paid in full for
the work done.
Art. 77. Penalty clause. Any violation of this Chapter or its
implementing rules and regulations shall be subject to the general
penalty clause provided for in this Code.
Art. 78. Definition. Handicapped workers are those whose earning
capacity is impaired by age or physical or mental deficiency or injury.
Art. 79. When employable. Handicapped workers may be
employed when their employment is necessary to prevent
curtailment of employment opportunities and when it does not create
unfair competition in labor costs or impair or lower working
standards.
Art. 80. Employment agreement. Any employer who employs
handicapped workers shall enter into an employment agreement with
them, which agreement shall include:
1. The names and addresses of the handicapped workers to be
employed;
2. The rate to be paid the handicapped workers which shall not be
less than seventy five (75%) percent of the applicable legal minimum
wage;
3. The duration of employment period; and
4/ The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the
Secretary of Labor or his duly authorized representative.
Art. 81. Eligibility for apprenticeship. Subject to the appropriate
provisions of this Code, handicapped workers may be hired as
apprentices or learners if their handicap is not such as to effectively
impede the performance of job operations in the particular
occupations for which they are hired
Ra 7686: An Act To Strengthen Manpower Education And Training
In The Philippines By Institutionalizing The Dual Training System As
An Instructional Delivery System Of Technical And Vocational
Education And Training, Providing The Mechanism, Appropriating
Funds Therefor And For Other Purposes.
 LABOR MIDTERMS MAGIC NOTES!
Section 1. Short title . This Act shall be known as the "Dual
Training System Act of 1994".
Section 2. Declaration of policy . It is hereby declared the policy
of the State to strengthen manpower education and training in the
country so that the latter may be assured of an ever-growing supply
of an educated and skilled manpower equipped with appropriate
skills and desirable work habits and attitudes. The dual training
system, as successfully tested in some highly developed countries,
shall be adopted in duly accredited vocational and technical schools,
in cooperation with accredited agricultural, industrial and business
establishments, as one of the preferred means of creating a
dependable pool of well-trained operators, craftsmen and
technicians for the economy.
Section 3. Objectives . This Act shall have the following
objectives:
(a) encourage increasing utilization of the dual system in technical
and vocational education and training by both public and private
schools within the context of the existing education system;
(b) encourage increasing levels of investment in technical and
vocational education and training by both public and private sectors
specially in the rural areas;
(c) enhance the employability and productivity of graduates by
equipping them with analytical and creative thinking and problem-
solving abilities; manipulative competencies which meet
occupational standards and requirements; values and attitudes with
emphasis on work ethics, quality orientation, discipline, honesty, self-
reliance and patriotism; and
(d) strengthen training cooperation between agricultural, industrial
and business establishments and educational institutions by
designing and implementing relevant training programmes in close
coordination with concerned local government units.
Section 4. Definition of terms . For purposes of this Act, the
following terms shall mean:
(b) "Dual training system" refers to an instructional delivery system of
technical and vocational education and training that combines in-
plant training and in-school training based on a training plan
collaboratively designed and implemented by an accredited dual
system educational institution/training centre and accredited dual
system agricultural, industrial and business establishments with prior
notice and advice to the local government unit concerned. Under this
system, said establishments and the educational institution share the
responsibility of providing the trainee with the best possible job
qualifications, the former essentially through practical training and
the latter by securing an adequate level of specific, general and
occupation-related theoretical instruction. The word "dual" refers to
the two parties providing instruction: the concept "system" means
that the two instructing parties do not operate independently of one
another, but rather coordinate their efforts;
by: OWEN AND RACH 
(c) "Trainee" refers to a person qualified to undergo the dual training
system for the purpose of acquiring and developing job
qualifications;
(d) "Accredited dual training system educational institution/training
centre" refers to a public or private institution duly recognized and
authorized by the appropriate authority, in coordination with business
and industry, to participate in the dual training system;
(e) "Establishments" refer to enterprises and/or services of
agricultural, industrial or business establishments;
(f) "Accredited dual training system agricultural, industrial and
business establishments" hereinafter referred to as agricultural,
industrial and business establishments, refer to a sole proprietorship,
partnership, corporation or cooperative which is duly recognized and
authorized by the appropriate authority to participate in the dual
training system educational institution.
4.01 POLICY OBJECTIVES
RA 7796: RULES AND REGULATIONS IMPLEMENTING THE
TESDA ACT OF 1994 (AN ACT CREATING THE TECHNICAL
EDUCATION AND SKILLS DEVELOPMENT AUTHORITY,
PROVIDING FOR ITS POWERS, STRUCTURE AND FOR OTHER
PURPOSES) [8 Aug 1994]
Sec. 2. Declaration of Policy. — It is hereby declared the policy of
the State to provide relevant, accessible, high quality and efficient
technical education and skills development in support of the
development of high quality Filipino middle-level manpower
responsive to and in accordance with Philippine development goals
and priorities.
The State shall encourage active participation of various concerned
sectors, particularly private enterprises, being direct participants in
and immediate beneficiaries of a trained and skilled work force, in
providing technical education and skills development opportunities.
Sec. 3. Statement of Goals and Objectives. — It is the goal and
objective of this Act to:
a) Promote and strengthen the quality of technical education and
skills development programs to attain international competitiveness.
b) Focus technical education and skills development on meeting the
changing demands for quality middle-level manpower;
c) Encourage critical and creative thinking by disseminating the
scientific and technical knowledge base of middle-level manpower
development programs;
d) Recognize and encourage the complementary roles of public and
private institutions in technical education and skills development and
training systems; and
e) Inculcate desirable values through the development of moral
character with emphasis on work ethic, self-discipline, self-reliance
and nationalism.
38
4.02 APPRENTICE
A. Defined –
4(j) RA 7796
j) “Apprenticeship” training within employment with compulsory
related theoretical instructions involving a contract between an
apprentice and an employer on an approved apprenticeable
occupation;
B. Apprenticeable Occupation –
4(m) RA 7796
m) “Apprenticeable Occupation” is an occupation officially
endorsed by a tripartite body and approved for apprenticeship by the
Authority;
C. Qualification –
Sec 12 RA 7610 as amended by RA 7658
Sec. 12. Employment of Children. — Children below fifteen (15)
years of age shall not be employed except:
(1) When a child works directly under the sole responsibility of his
parents or legal guardian and where only members of the employer's
family are employed: Provided, however, That his employment
neither endangers his life, safety, health and morals, nor impairs his
normal development; Provided, further, That the parent or legal
guardian shall provide the said minor child with the prescribed
primary and/or secondary education; or
(2) Where a child's employment or participation in public
entertainment or information through cinema, theater, radio or
television is essential: Provided, The employment contract is
concluded by the child's parents or legal guardian, with the express
agreement of the child concerned, if possible, and the approval of
the Department of Labor and Employment: and Provided, That the
following requirements in all instances are strictly complied with:
(a) The employer shall ensure the protection, health, safety, morals
and normal development of the child;
(b) The employer shall institute measures to prevent the child's
exploitation or discrimination taking into account the system and
level of remuneration, and the duration and arrangement of working
time; and
(c) The employer shall formulate and implement, subject to the
approval and supervision of competent authorities, a continuing
program for training and skills acquisition of the child.
In the above exceptional cases where any such child may be
employed, the employer shall first secure, before engaging such
 LABOR MIDTERMS MAGIC NOTES!
child, a work permit from the Department of Labor and Employment
which shall ensure observance of the above requirements.
The Department of Labor and Employment shall promulgate rules
and regulations necessary for the effective implementation of this
Section.
D. Allowed Employment
Requirement Program Approval
Nitto Enterprises v NLRC [1995]
Prior approval by the DOLE of a proposed apprenticeship
program is a condition sine qua non before an apprenticeship
agreement can be validly entered into. See Art.61.
E. Terms & Conditions of Employment
Art. 61. Contents of apprenticeship agreements. Apprenticeship
agreements, including the wage rates of apprentices, shall conform
to the rules issued by the Secretary of Labor and Employment. The
period of apprenticeship shall not exceed six months. Apprenticeship
agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75 percent of the applicable
minimum wage, may be entered into only in accordance with
apprenticeship programs duly approved by the Secretary of Labor
and Employment. The Department shall develop standard model
programs of apprenticeship. (As amended by Section 1, Executive
Order No. 111, December 24, 1986)
Art. 72. Apprentices without compensation. The Secretary of
Labor and Employment may authorize the hiring of apprentices
without compensation whose training on the job is required by the
school or training program curriculum or as requisite for graduation
or board examination.
F. Costs
Art. 71. Deductibility of training costs. An additional deduction
from taxable income of one-half (1/2) of the value of labor training
expenses incurred for developing the productivity and efficiency of
apprentices shall be granted to the person or enterprise organizing
an apprenticeship program: Provided, That such program is duly
recognized by the Department of Labor and Employment: Provided,
further, That such deduction shall not exceed ten (10%) percent of
direct labor wage: and Provided, finally, That the person or enterprise
who wishes to avail himself or itself of this incentive should pay his
apprentices the minimum wage.
G. Enforcement
by: OWEN AND RACH 
Art. 65. Investigation of violation of apprenticeship
agreement. Upon complaint of any interested person or upon its
own initiative, the appropriate agency of the Department of Labor
and Employment or its authorized representative shall investigate
any violation of an apprenticeship agreement pursuant to such rules
and regulations as may be prescribed by the Secretary of Labor and
Employment.
Art. 66. Appeal to the Secretary of Labor and Employment.
The decision of the authorized agency of the Department of Labor
and Employment may be appealed by any aggrieved person to the
Secretary of Labor and Employment within five (5) days from receipt
of the decision. The decision of the Secretary of Labor and
Employment shall be final and executory.
Art. 67. Exhaustion of administrative remedies. No person shall
institute any action for the enforcement of any apprenticeship
agreement or damages for breach of any such agreement, unless he
has exhausted all available administrative remedies.
4.03 LEARNERS
A. Defined –
4, RA 7796
n) “Learners” refer to persons hired as trainees in semi-skilled and
other industrial occupations which are non-apprenticeable.
Learnership programs must be approved by the Authority.
B. Allowed Employment – 74(b)
Art. 74. When learners may be hired. Learners may be
employed when no experienced workers are available, the
employment of learners is necessary to prevent curtailment of
employment opportunities, and the employment does not create
unfair competition in terms of labor costs or impair or lower working
standards.
C. Terms & Conditions of Employment – 75, 76
Art. 75. Learnership agreement. Any employer desiring to employ
learners shall enter into a learnership agreement with them, which
agreement shall include:
a. The names and addresses of the learners;
39
b. The duration of the learnership period, which shall not exceed
three (3) months;
c. The wages or salary rates of the learners which shall begin at not
less than seventy-five percent (75%) of the applicable minimum
wage; and
d. A commitment to employ the learners if they so desire, as regular
employees upon completion of the learnership. All learners who have
been allowed or suffered to work during the first two (2) months shall
be deemed regular employees if training is terminated by the
employer before the end of the stipulated period through no fault of
the learners.
The learnership agreement shall be subject to inspection by the
Secretary of Labor and Employment or his duly authorized
representative.
Art. 76. Learners in piecework. Learners employed in piece or
incentive-rate jobs during the training period shall be paid in full for
the work done.
4.04 HANDICAPPED WORKERS
RA 7277: AN ACT PROVIDING FOR THE REHABILITATION, SELF-
DEVELOPMENT AND SELF-RELIANCE OF DISABLED PERSONS
AND THEIR INTEGRATION INTO THE MAINSTREAM OF
SOCIETY AND FOR OTHER PURPOSES.
Sec 1. Title. — This Act shall be known and cited as the "Magna
Carta for Disabled Persons."
Sec. 2. Declaration of Policy — The grant of the rights and
privileges for disabled persons shall be guided by the following
principles:
(a) Disabled persons are part of Philippine society, thus the State
shall give full support to the improvement of the total well-being of
disabled persons and their integration into the mainstream of society.
Toward this end, the State shall adopt policies ensuring the
rehabilitation, self-development and self-reliance of disabled
persons. It shall develop their skills and potentials to enable them to
compete favorably for available opportunities.
(b) Disabled persons have the same rights as other people to take
their proper place in society. They should be able to live freely and
as independently as possible. This must be the concern of everyone
— the family, community and all government and nongovernment
organizations. Disabled persons' rights must never be perceived as
welfare services by the Government.
(c) The rehabilitation of the disabled persons shall be the concern of
the Government in order to foster their capacity to attain a more
meaningful, productive and satisfying life. To reach out to a greater
number of disabled persons, the rehabilitation services and benefits
shall be expanded beyond the traditional urban-based centers to
 LABOR MIDTERMS MAGIC NOTES!
community based programs, that will ensure full participation of
different sectors as supported by national and local government
agencies.
(d) The State also recognizes the role of the private sector in
promoting the welfare of disabled persons and shall encourage
partnership in programs that address their needs and concerns.
(e) To facilitate integration of disabled persons into the mainstream
of society, the State shall advocate for and encourage respect for
disabled persons. The State shall exert all efforts to remove all
social, cultural, economic, environmental and attitudinal barriers that
are prejudicial to disabled persons.
Sec. 3. Coverage. — This Act shall cover all disabled persons
and, to the extent herein provided, departments, offices and
agencies of the National Government or nongovernment
organizations involved in the attainment of the objectives of this Act.
Sec. 4. Definition of Terms. — For purposes of this Act, these
terms are defined as follows:
(a) Disabled persons are those suffering from restriction or different
abilities, as a result of a mental, physical or sensory impairment, to
perform an activity in the manner or within the range considered
normal for a human being;
(b) Impairment is any loss, diminution or aberration of psychological,
physiological, or anatomical structure or function;
(c) Disability shall mean 1) a physical or mental impairment that
substantially limits one or more psychological, physiological or
anatomical function of an individual or activities of such individual; 2)
a record of such an impairment; or 3) being regarded as having such
an impairment;
(d) 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 considered normal given the age and sex of the
individual;
(e) Rehabilitation is an integrated approach to physical, social,
cultural, spiritual, educational and vocational measures that create
conditions for the individual to attain the highest possible level of
functional ability;
(f) Social Barriers refer to the characteristics of institutions, whether
legal, economic, cultural, recreational or other, any human group,
community, or society which limit the fullest possible participation of
disabled persons in the life of the group. Social barriers include
negative attitudes which tend to single out and exclude disabled
persons and which distort roles and inter-personal relationships;
(g) Auxiliary Aids and Services include:
(1) qualified interpreters or other effective methods of delivering
materials to individuals with hearing impairments;
(2) qualified readers, taped tests, or other effective methods of
delivering materials to individuals with visual impairments;
(3) acquisition or modification of equipment or devices; and
by: OWEN AND RACH 
(4) other similar services and actions or all types of aids and services
that facilitate the learning process of people with mental disability.
(h) Reasonable Accommodation include 1) improvement of existing
facilities used by employees in order to render these readily
accessible to and usable by disabled persons; and 2) modification of
work schedules, reassignment to a vacant position, acquisition or
modification of equipment or devices, appropriate adjustments or
modifications of examinations, training materials or company
policies, rules and regulations, the provision of auxiliary aids and
services, and other similar accommodations for disabled persons;
(i) Sheltered Employment refers to the provision of productive work
for disabled persons through workshops providing special facilities,
income-producing projects or homework schemes with a view to
giving them the opportunity to earn a living thus enabling them to
acquire a working capacity required in open industry;
(j) Auxiliary Social Services are the supportive activities in the
delivery of social services to the marginalized sectors of society;
(k) Marginalized Disabled Persons refer to disabled persons who
lack access to rehabilitative services and opportunities to be able to
participate fully in socioeconomic activities and who have no means
of livelihood and whose incomes fall below the poverty
threshold; chan robles virtual law library
(l) Qualified Individual with a Disability shall mean an individual with
a disability who, with or without reasonable accommodations, can
perform the essential functions of the employment position that such
individual holds or desires. However, consideration shall be given to
the employer's judgment as to what functions of a job are essential,
and if an employer has prepared a written description before
advertising or interviewing applicants for the job, this description
shall be considered evidence of the essential functions of the job;
(m) Readily Achievable means a goal can be easily attained and
carried out without much difficulty or expense. In determining
whether an action is readily achievable, factors to be considered
include —
(1) the nature and cost of the action;
(2) the overall financial resources of the facility or facilities involved
in the action; the number of persons employed at such facility; the
effect on expenses and resources, or the impact otherwise of such
action upon the operation of the facility;
(3) the overall financial resources of the covered entity with respect
to the number of its employees; the number, type and location of its
facilities; and
(4) the type of operation or operations of the covered entity, including
the composition, structure and functions of the work force of such
entity; the geographic separateness, administrative or fiscal
relationship of the facility or facilities in question to the covered
entity.
40
(n) Public Transportation means transportation by air, land and sea
that provides the public with general or special service on a regular
and continuing basis;
(o) Covered Entity means an employer, employment agency, labor
organization or joint-labor management committee; and
(p) Commerce shall be taken to mean as travel, trade, traffic,
commerce, transportation, or communication among the provinces or
between any foreign country or any territory or possession and any
province.
Sec. 5. Equal Opportunity for Employment. — No disable
person shall be denied access to opportunities for suitable
employment. A qualified disabled employee shall be subject to the
same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or
allowances as a qualified able bodied person.
Five percent (5%) of all casual emergency and contractual positions
in the Departments of Social Welfare and Development; Health;
Education, Culture and Sports; and other government agencies,
offices or corporations engaged in social development shall be
reserved for disabled persons.
Sec. 6. Sheltered Employment — If suitable employment for
disabled persons cannot be found through open employment as
provided in the immediately preceding Section, the State shall
endeavor to provide it by means of sheltered employment. In the
placement of disabled persons in sheltered employment, it shall
accord due regard to the individual qualities, vocational goals and
inclinations to ensure a good working atmosphere and efficient
production.
Sec. 7. Apprenticeship. — Subject to the provisions of the Labor
Code as amended, disabled persons shall be eligible as apprentices
or learners: Provided, That their handicap is not as much as to
effectively impede the performance of job operations in the particular
occupation for which they are hired; Provided, further, That after the
lapse of the period of apprenticeship, if found satisfactory in the job
performance, they shall be eligible for employment.
Sec. 8. Incentives for Employers. — (a) To encourage the active
participation of the private sector in promoting the welfare of disabled
persons and to ensure gainful employment for qualified disabled
persons, adequate incentives shall be provided to private entities
which employ disabled persons.
(b) Private entities that employ disabled persons who meet the
required skills or qualifications, either as regular employee,
apprentice or learner, shall be entitled to an additional deduction,
from their gross income, equivalent to twenty-five percent (25%) of
the total amount paid as salaries and wages to disabled persons:
Provided, however, That such entities present proof as certified by
the Department of Labor and Employment that disabled persons are
under their employ: Provided, further, That the disabled employee is
 LABOR MIDTERMS MAGIC NOTES!
accredited with the Department of Labor and Employment and the
Department of Health as to his disability, skills and qualifications.
(c) Private entities that improve or modify their physical facilities in
order to provide reasonable accommodation for disabled persons
shall also be entitled to an additional deduction from their net taxable
income, equivalent to fifty percent (50%) of the direct costs of the
improvements or modifications. This Section, however, does not
apply to improvements or modifications of facilities required under
Batas Pambansa Bilang 344.
A. Defined –
4(a), (b), (c), (d), 1-8, RA 7277
(a) Disabled persons are those suffering from restriction or different
abilities, as a result of a mental, physical or sensory impairment, to
perform an activity in the manner or within the range considered
normal for a human being;
(b) Impairment is any loss, diminution or aberration of
psychological, physiological, or anatomical structure or function;
(c) Disability shall mean 1) a physical or mental impairment that
substantially limits one or more psychological, physiological or
anatomical function of an individual or activities of such individual; 2)
a record of such an impairment; or 3) being regarded as having such
an impairment;
(d) 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 considered normal given the age and sex
of the individual.
B. Allowed Employment –
5, RA 7277
Sec. 5. Equal Opportunity for Employment. — No disable
person shall be denied access to opportunities for suitable
employment. A qualified disabled employee shall be subject to the
same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or
allowances as a qualified able bodied person.
Five percent (5%) of all casual emergency and contractual positions
in the Departments of Social Welfare and Development; Health;
Education, Culture and Sports; and other government agencies,
offices or corporations engaged in social development shall be
reserved for disabled persons.
Regular Worker
Bernardo v NLRC [1999]
by: OWEN AND RACH 
The Magna Carta for Disabled Persons mandates that a
qualified disabled employee should be given the same terms and
conditions of employment as a qualified able-bodied person. This
necessarily removes them from the ambit of Art. 80; since the Magna
Carta accords them the rights of qualified able-bodied persons, they
are thus covered by Art. 280.
The noble objectives of Magna Carta are not based
merely on charity or accommodation but on justice and equal
treatment of qualified persons, disabled or not. In this case, the
handicap of the deaf-mutes is not a hindrance to their work.
Section 5: Conditions Of Employment – Hours Of Work
Statutory Reference
Book III, Rules I, IA, II, Omnibus Rules Implementing the Labor Code
RULE I: Hours of Work
SECTION 1. General statement on coverage. — The provisions
of this Rule shall apply to all employees in all establishments and
undertakings, whether operated for profit or not, except to those
specifically exempted under Section 2 hereof.
SECTION 2. Exemption. — The provisions of this Rule shall not
apply to the following persons if they qualify for exemption under the
conditions set forth herein:
(a) Government employees whether employed by the National
Government or any of its political subdivision, including those
employed in government-owned and/or controlled corporations;
(b) Managerial employees, if they meet all of the following
conditions:
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a department or sub-
division thereof.
(2) They customarily and regularly direct the work of two or more
employees therein.
(3) They have the authority to hire or fire employees of lower rank; or
their suggestions and recommendations as to hiring and firing and
as to the promotion or any other change of status of other
employees, are given particular weight.
(c) Officers or members of a managerial staff if they perform the
following duties and responsibilities:
(1) The primary duty consists of the performance of work directly
related to management policies of their employer;
(2) Customarily and regularly exercise discretion and independent
judgment; and
(3) (i) Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the management of the
establishment in which he is employed or subdivision thereof; or (ii)
execute under general supervision work along specialized or
41
technical lines requiring special training, experience, or knowledge;
or (iii) execute, under general supervision, special assignments and
tasks; and
(4) Who do not devote more than 20 percent of their hours worked in
a work week to activities which are not directly and closely related to
the performance of the work described in paragraphs (1), (2) and (3)
above.
(d) Domestic servants and persons in the personal service of
another if they perform such services in the employer's home which
are usually necessary or desirable for the maintenance and
enjoyment thereof, or minister to the personal comfort, convenience,
or safety of the employer as well as the members of his employer's
household.
(e) Workers who are paid by results, including those who are paid on
piece-work, "takay," "pakiao" or task basis, and other non-time work
if their output rates are in accordance with the standards prescribed
under Section 8, Rule VII, Book Three of these regulations, or where
such rates have been fixed by the Secretary of Labor and
Employment in accordance with the aforesaid Section.
(f) Non-agricultural field personnel if they regularly perform their
duties away from the principal or branch office or place of business
of the employer and whose actual hours of work in the field cannot
be determined with reasonable certainty.
SECTION 3. Hours worked. — The following shall be considered
as compensable hours worked:
(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 work place;
and
(b) All time during which an employee is suffered or permitted to
work.
SECTION 4. Principles in determining hours worked. — The
following general principles shall govern in determining whether the
time spent by an employee is considered hours worked for purposes
of this Rule:
(a) All hours are hours worked which the employee is required to
give his employer, regardless of whether or not such hours are spent
in productive labor or involve physical or mental exertion.
(b) An employee need not leave the premises of the work place in
order that his rest period shall not be counted, it being enough that
he stops working, may rest completely and may leave his work
place, to go elsewhere, whether within or outside the premises of his
work place.
(c) If the work performed was necessary, or it benefited the
employer, or the employee could not abandon his work at the end of
his normal working hours because he had no replacement, all time
spent for such work shall be considered as hours worked, if the work
was with the knowledge of his employer or immediate supervisor.
 LABOR MIDTERMS MAGIC NOTES!
(d) The time during which an employee is inactive by reason of
interruptions in his work beyond his control shall be considered
working time either if the imminence of the resumption of work
requires the employee's presence at the place of work or if the
interval is too brief to be utilized effectively and gainfully in the
employee's own interest.
SECTION 5. Waiting time. — (a) Waiting time spent by an
employee shall be considered as working time if waiting is an
integral part of his work or the employee is required or engaged by
the employer to wait.
(b) An employee who is required to remain on call in the employer's
premises or so close thereto that he cannot use the time effectively
and gainfully for his own purpose shall be considered as working
while on call. An employee who is not required to leave word at his
home or with company officials where he may be reached is not
working while on call.
SECTION 6. Lectures, meetings, training programs. —
Attendance at lectures, meetings, training programs, and other
similar activities shall not be counted as working time if all of the
following conditions are met:
(a) Attendance is outside of the employee's regular working hours;
(b) Attendance is in fact voluntary; and
(c) The employee does not perform any productive work during such
attendance.
SECTION 7. Meal and Rest Periods. — Every employer shall
give his employees, regardless of sex, not less than one (1) hour
time-off for regular meals, except in the following cases when a meal
period of not less than twenty (20) minutes may be given by the
employer provided that such shorter meal period is credited as
compensable hours worked of the employee:
(a) Where the work is non-manual work in nature or does not involve
strenuous physical exertion;
(b) Where the establishment regularly operates not less than sixteen
(16) hours a day;
(c) In case of actual or impending emergencies or there is urgent
work to be performed on machineries, equipment or installations to
avoid serious loss which the employer would otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of
perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20)
minutes shall be considered as compensable working time.
SECTION 8. Overtime pay. — Any employee covered by this Rule
who is permitted or required to work beyond eight (8) hours on
ordinary working days shall be paid an additional compensation for
by: OWEN AND RACH 
the overtime work in the amount equivalent to his regular wage plus
at least twenty-five percent (25%) thereof.
SECTION 9. Premium and overtime pay for holiday and rest
day work. — (a) Except employees referred to under Section 2 of
this Rule, an employee who is permitted or suffered to work on
special holidays or on his designated rest days not falling on regular
holidays, shall be paid with an additional compensation as premium
pay of not less than thirty percent (30%) of his regular wage. For
work performed in excess of eight (8) hours on special holidays and
rest days not falling on regular holidays, an employee shall be paid
an additional compensation for the overtime work equivalent to his
rate for the first eight hours on a special holiday or rest day plus at
least thirty percent (30%) thereof.
(b) Employees of public utility enterprises as well as those employed
in non-profit institutions and organizations shall be entitled to the
premium and overtime pay provided herein, unless they are
specifically excluded from the coverage of this Rule as provided in
Section 2 hereof.
(c) The payment of additional compensation for work performed on
regular holidays shall be governed by Rule IV, Book Three, of these
Rules.
SECTION 10. Compulsory overtime work. — In any of the
following cases, an employer may require any of his employees to
work beyond eight (8) hours a day, provided that the employee
required to render overtime work is paid the additional compensation
required by these regulations:
(a) When the country is at war or when any other national or local
emergency has been declared by Congress or the Chief Executive;
(b) When overtime work is necessary to prevent loss of life or
property, or in case 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 disaster or
calamities;
(c) When there is urgent work to be performed on machines,
installations, or equipment, in order to avoid serious loss or damage
to the employer or some other causes of similar nature;
(d) When the work is necessary to prevent loss or damage to
perishable goods;
(e) When the completion or continuation of work started before the
8th hour is necessary to prevent serious obstruction or prejudice to
the business or operations of the employer; or
(f) When overtime work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
dependent thereon.
In cases not falling within any of these enumerated in this Section,
no employee may be made to work beyond eight hours a day
against his will.
42
RULE I-A : Hours of Work of Hospital and Clinic Personnel
SECTION 1. General statement on coverage. — This Rule shall
apply to:
(a) All hospitals and clinics, including those with a bed capacity of
less than one hundred (100) which are situated in cities or
municipalities with a population of one million or more; and
(b) All hospitals and clinics with a bed capacity of at least one
hundred (100), irrespective of the size of the population of the city or
municipality where they may be situated.
SECTION 2. Hospitals or clinics within the meaning of this
Rule. — The terms "hospitals" and "clinics" as used in this Rule
shall mean a place devoted primarily to the maintenance and
operation of facilities for the diagnosis, treatment and care of
individuals suffering from illness, disease, injury, or deformity, or in
need of obstetrical or other medical and nursing care. Either term
shall also be construed as any institution, building, or place where
there are installed beds, or cribs, or bassinets for twenty-four (24)
hours use or longer by patients in the treatment of disease, injuries,
deformities, or abnormal physical and mental states, maternity cases
or sanitorial care; or infirmaries, nurseries, dispensaries, and such
other similar names by which they may be designated.
SECTION 3. Determination of bed capacity and population. —
(a) For purposes of determining the applicability of this Rule, the
actual bed capacity of the hospital or clinic at the time of such
determination shall be considered, regardless of the actual or bed
occupancy. The bed capacity of hospital or clinic as determined by
the Bureau of Medical Services pursuant to Republic Act No. 4226,
otherwise known as the Hospital Licensure Act, shall prima facie be
considered as the actual bed capacity of such hospital or clinic.
(b) The size of the population of the city or municipality shall be
determined from the latest official census issued by the Bureau of
the Census and Statistics.
SECTION 4. Personnel covered by this Rule. — This Rule
applies to all persons employed by any private or public hospital or
clinic mentioned in Section 1 hereof, and shall include, but not
limited to, resident physicians, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians paramedical
technicians, psychologists, midwives, and attendants.
SECTION 5. Regular working hours. — The regular working
hours of any person covered by this Rule shall not be more than
eight (8) hours in any one day nor more than forty (40) hours in any
one week.
For purposes of this Rule a "day" shall mean a work day of twenty-
four (24) consecutive hours beginning at the same time each
 LABOR MIDTERMS MAGIC NOTES!
calendar year. A "week" shall mean the work of 168 consecutive
hours, or seven consecutive 24-hour work days, beginning at the
same hour and on the same calendar day each calendar week.
SECTION 6. Regular working days. — The regular working days
of covered employees shall not be more than five days in a work
week. The work week may begin at any hour and on any day,
including Saturday or Sunday, designated by the employer.
Employers are not precluded from changing the time at which the
work day or work week begins, provided that the change is not
intended to evade the requirements of this Rule.
SECTION 7. Overtime work. — Where the exigencies of the
service so require as determined by the employer, any employee
covered by this Rule may be scheduled to work for more than five (5)
days or forty (40) hours a week, provided that the employee is paid
for the overtime work an additional compensation equivalent to his
regular wage plus at least thirty percent (30%) thereof, subject to the
provisions of this Book on the payment of additional compensation
for work performed on special and regular holidays and on rest days.
SECTION 8. Hours worked. — In determining the compensable
hours of work of hospital and clinic personnel covered by this Rule,
the pertinent provisions of Rule 1 of this Book shall apply.
SECTION 9. Additional compensation. — Hospital and clinic
personnel covered by this Rule, with the exception of those
employed by the Government, shall be entitled to an additional
compensation for work performed on regular and special holidays
and rest days as provided in this Book. Such employees shall also
be entitled to overtime pay for services rendered in excess of forty
hours a week, or in excess of eight hours a day, whichever will yield
the higher additional compensation to the employee in the work
week.
SECTION 10. Relation to Rule I. — All provisions of Rule I of this
Book which are not inconsistent with this Rule shall be deemed
applicable to hospital and clinic personnel.
RULE II: Night Shift Differential
SECTION 1. Coverage. — This Rule shall apply to all employees
except:
(a) Those of the government and any of its political subdivisions,
including government-owned and/or controlled corporations;
(b) Those of retail and service establishments regularly employing
not more than five (5) workers;
(c) Domestic helpers and persons in the personal service of another;
(d) Managerial employees as defined in Book Three of this Code;
(e) Field personnel and other employees whose time and
performance is unsupervised by the employer including those who
by: OWEN AND RACH 
are engaged on task or contract basis, purely commission basis, or
those who are paid a fixed amount for performing work irrespective
of the time consumed in the performance thereof.
SECTION 2. Night shift differential. — An employee shall be paid
night shift differential of no less than ten per cent (10%) of his regular
wage for each hour of work performed between ten o'clock in the
evening and six o'clock in the morning.
SECTION 3. Additional compensation. — Where an employee is
permitted or suffered to work on the period covered after his work
schedule, he shall be entitled to his regular wage plus at least
twenty-five per cent (25%) and an additional amount of no less than
ten per cent (10%) of such overtime rate for each hour or work
performed between 10 p.m. to 6 a.m.
SECTION 4. Additional compensation on scheduled rest
day/special holiday. — An employee who is required or permitted
to work on the period covered during rest days and/or special
holidays not falling on regular holidays, shall be paid a compensation
equivalent to his regular wage plus at least thirty (30%) per cent and
an additional amount of not less than ten (10%) per cent of such
premium pay rate for each hour of work performed.
SECTION 5. Additional compensation on regular holidays. —
For work on the period covered during regular holidays, an employee
shall be entitled to his regular wage during these days plus an
additional compensation of no less than ten (10%) per cent of such
premium rate for each hour of work performed.
SECTION 6. Relation to agreements. — Nothing in this Rule
shall justify an employer in withdrawing or reducing any benefits,
supplements or payments as provided in existing individual or
collective agreements or employer practice or policy.
5.01 HOURS REGULATION
Rationale and Enforcement
Manila Terminal Co Inc v CIR [1952]
The eight-hour labor law was designed not only to
safeguard the health and welfare of the employee, but in a way to
minimize underemployment by forcing employers, in cases where
more than 8-hour operation is necessary, to utilize different shifts of
laborers or employees working only for eight hours each.
5.02 COVERAGE
43
Art. 82. Coverage. The provisions of this Title (Working Conditions
and Rest Periods) shall apply to employees in all establishments and
undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the
family of the employer who are dependent on him for support,
domestic helpers, persons in the personal service of another, and
workers who are paid by results as determined by the Secretary of
Labor in appropriate regulations.
As used herein, "managerial employees" refer to those whose
primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof,
and to other officers or members of the managerial staff.
"Field personnel" shall refer to non-agricultural employees who
regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty.
Art. 276. Government employees. The terms and conditions of
employment of all government employees, including employees of
government-owned and controlled corporations, shall be governed
by the Civil Service Law, rules and regulations. Their salaries shall
be standardized by the National Assembly as provided for in the New
Constitution. However, there shall be no reduction of existing wages,
benefits and other terms and conditions of employment being
enjoyed by them at the time of the adoption of this Code.
Rationale Exemption – Managerial Employees
Penaranda v Baganga Plywood Corp [2006]
Asia Pacific Christening Inc v Farolan [2004]
To be considered a managerial employee, the following
conditions must be met: (1) primary duty consists of mngmnt of the
establishment in which they are employed or a dept or a subdivision
thereof; (2) customarily and regularly direct the work of 2 or more
employees therein; (3) they have the authority to hire or fire other
employees of lower rank; or their suggestions and recommendations
as to the hiring and firing and as to the promotion or any other
change of status of other employees are given particular weight.
Treatment of managerial employees is distinguished from that of
rank and file personnel insofar as the application of the doctrine of
loss of trust and confidence is concerned.
Natl Waterworks and Sewerage Authority v NAWASA [1965]
The philosophy behind the exemption of managerial
employees from the 8-Hour Labor Law is that such workers are not
usually employed for every hour of work but their compensation is
determined considering their special training, experience or
 LABOR MIDTERMS MAGIC NOTES!
knowledge which requires the exercise of discretion and
independent judgment, or perform work related to management
policies or general business operations along specialized or
technical lines. For these workers, it is not feasible to provide a fixed
hourly rate or pay or maximum hours of labor.
Samson v NLRC [2000]
Although his position is that of a District Sales Manager,
his job description did not meet the requisite conditions for him to be
considered a managerial employee (1) Primary duty of management;
(2) Regularly direct work of 2 or more; (3) Authority to hire or fire
other employees, or their suggestions are given much weight.
Tests – Field Personnel
Union of Filipro Employees v Vivar [1992]
[Filipro, now Nestle seeks the exclusion of salesmen,
sales reps, truck driver, merchandisers and med reps from award of
holiday pay.]
Controversy centers on interpretation of the clause
“whose actual hours of work in the field cannot be determined with
reasonable certainty.” In deciding whether or not an employee’s
actual working hours in the field can be determined with reasonable
certainty, query must be made as to whether or not such employee’s
time and performance is constantly supervised by the employer.
Salazar v NLRC [1996]
“ Actual hours of work in the field..” is to be read in
conjunction with Rule IV, Book III of the Implementing Rules.
Therefore field personnel are employees whose time and
performance is unsupervised by the employer. In this case, although
petitioner cannot be strictly classified as a managerial employee, he
is still not a field personnel, as he falls under “officers or members of
a managerial staff.”
Mercidar Fishing Corp v NLRC [1998]
During the entire course of their fishing voyage, fishermen
employed by the petitioner have no choice but to remain on board its
vessel. Although they perform non-agricultural work away from the
petitioner’s business offices, the fact remains that throughout the
duration of their work they are under the effective control and
supervision of the petitioner through the vessel’s patron or master.
Autobus Transport Systems Inc v Bautista [2005]
If required to be at specific places at specific times,
employees including drivers cannot be said to be field personnel
despite the fact that they are performing work away from the
principal office of the employee. The definition is not merely
by: OWEN AND RACH 
concerned with the location but also the fact that employee’s time
and performance is unsupervised by the employer.
It is of judicial notice that along the routes that are plied
by bus companies, there are its inspectors assigned at strategic
places. There is also the once-a-week car barn or shop day. In each
and every depot, there is a dispatcher.
Rationale Exemption – Piece Worker
Red V Coconut Products Ltd v CIR [1966]
Although the Eight-Hour Labor Law provides that it does
not cover those workers who prefer to be paid on piece-work basis,
nothing in said law precluded an agreement for the payment of
overtime compensation to piece workers. And in agreeing to the
provision for payment of shift differential, as well as in actually
paying to them such differentials, though not in full, the company
freely adhered to an application and implementation of the law.
They were excluded because such workers are paid
depending upon the work they do “irrespective of the amount of time
employed” in doing said work.
5.03 NORMAL HOURS OF WORK
Art. 83. Normal hours of work. The normal hours of work of any
employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at
least one million (1,000,000) or in hospitals and clinics with a bed
capacity of at least one hundred (100) shall hold regular office hours
for eight (8) hours a day, for five (5) days a week, exclusive of time
for meals, except where the exigencies of the service require that
such personnel work for six (6) days or forty-eight (48) hours, in
which case, they shall be entitled to an additional compensation of at
least thirty percent (30%) of their regular wage for work on the sixth
day. For purposes of this Article, "health personnel" shall include
resident physicians, nurses, nutritionists, dietitians, pharmacists,
social workers, laboratory technicians, paramedical technicians,
psychologists, midwives, attendants and all other hospital or clinic
personnel.
5.04 HOURS WORKED
Art. 84. Hours worked. Hours worked shall include (a) all time
during which an employee is required to be on duty or to be at a
prescribed workplace; and (b) all time during which an employee is
suffered or permitted to work.
Rest periods of short duration during working hours shall be counted
as hours worked.
44
Idle Time
National Development Co v CIR [1962]
Idle time spent resting and during which an employee
may leave the workplace is not counted as working time only where
the work is broken or not continuous.
Luzon Stevedoring Co v Luzon Marine Department Union [1957]
A laborer need not leave the premises of the factory, shop
or boat in order that his period of rest shall not be counted, it being
enough that he “ceases to work”, and may rest completely and leave
his spot where he actually stays while working, to go somewhere
else, whether within or outside the premises of said factory, shop or
boat.
Continuous Work
State Marine Corp v Cebu Seamen’s Assoc [1963]
The provision of Sec 1 of CA 444 which states that “when
the work is not continuous, the time during which the laborer is not
working and can leave his working place and can rest completely
shall not be counted” finds no application in this case, where the
laborer’s work is continuous. During the time that he is not working,
he cannot leave and completely rest owing to the place and nature of
his work.
Waiting Time
Arica v NLRC [1989]
[Workers allege that preliminary activities should be
considered as waiting time and be compensable as working time
since these are necessary for the company’s benefit: roll call, getting
indiv assignments; getting work matls, etc.]
The thirty minute assembly is a deeply-rooted routinary
practice of the employees, and the proceedings attendant thereto
are not infected with complexities as to deprive the workers the time
to attend to other personal pursuits.
Travel Time
Rada v NLRC [1992]
It was Rada’s job to pick up and drop off employees of the
project at certain specified points along EDSA. Hence, the time he
spent in doing this work should be included in determining the
number of hours he had worked since this arrangement was for the
employer’s benefit. He is then entitled to the overtime pay claimed.
Ordinarily, the travel time of employees from house to place of work
and vice versa is not included as part of the time worked. Time of
 LABOR MIDTERMS MAGIC NOTES!
work starts when the employee reports at the place of work and ends
when he leaves the same place.
Entry Time Cards
Prangan v NLRC [1998]
As petitioner’s employer, the private respondent has
unlimited access to all relevant documents and records on the hours
of work of the petitioner. Yet, no employment contract payroll notice
of assignment or posting, cash voucher or any other convincing
evidence which may attest to the actual hours of work was
presented. Only the daily time record was presented, which showed
that employee started work at 10pm and left his post at exactly 2am.
Such unvarying recording is improbable and contrary to human
experience.
Nicario v NLRC [1998]
In previously evaluating evidentiary value of daily time
records, especially those which show uniform entries with regard to
the hours of work rendered by an employee has ruled that “such
unvarying recording of a daily time record is improbable and contrary
to human experience. It is impossible for an employee to arrive at
the workplace and leave at exactly the same time, day in and day
out. The uniformity and regularity of the entries are badges of
untruthfulness and as such indices of dubiety.”
5.4 MEAL PERIOD
Art. 85. Meal periods. Subject to such regulations as the Secretary
of Labor may prescribe, it shall be the duty of every employer to give
his employees not less than sixty (60) minutes time-off for their
regular meals.
Meal Time – Free Time
Pan-Am Airways v Pan-Am Employees Assoc [1961]
Where during the so-called meal period, the laborers are
required to stand by for emergency work, or where said meals is not
one of complete rest, such period is considered overtime.
PAL v NLRC [1999]
[He was a flight surgeon assigned at PAL Medical Clinic
from 4pm to 12mn. He had 30min meal break so dinner at his own
home which was a 5min drive away]
The eight-hour work period does not include the meal
break. Nowhere in the law may it be inferred that employees must
take their meals within the company premises. Employees are not
prohibited from going out of the premises as long as they return to
by: OWEN AND RACH 
their posts on time. Private respondent’s act of going home to take
his dinner does not constitute abandonment.
5.06 OVERTIME WORK AND OFFSETTING PROHIBITION
Art. 87. Overtime work. Work may be performed beyond eight (8)
hours a day provided that the employee is paid for the overtime
work, an additional compensation equivalent to his regular wage plus
at least twenty-five percent (25%) thereof. Work performed beyond
eight hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours on a
holiday or rest day plus at least thirty percent (30%) thereof.
Art. 88. Undertime not offset by overtime. Undertime work on
any particular day shall not be offset by overtime work on any other
day. Permission given to the employee to go on leave on some other
day of the week shall not exempt the employer from paying the
additional compensation required in this Chapter.
Art. 89. Emergency overtime work. Any employee may be
required by the employer to perform overtime work in any of the
following cases:
a. When the country is at war or when any other national or local
emergency has been declared by the National Assembly or the Chief
Executive;
b. When it is necessary to prevent loss of life or property or in case
of imminent danger to public safety due to an actual or impending
emergency in the locality caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic, or other disaster or calamity;
c. When there is urgent work to be performed on machines,
installations, or equipment, in order to avoid serious loss or damage
to the employer or some other cause of similar nature;
When the work is necessary to prevent loss or damage to perishable
goods; and
d. Where the completion or continuation of the work started before
the eighth hour is necessary to prevent serious obstruction or
prejudice to the business or operations of the employer.
e. Any employee required to render overtime work under this Article
shall be paid the additional compensation required in this Chapter.
Art. 90. Computation of additional compensation. For purposes
of computing overtime and other additional remuneration as required
by this Chapter, the "regular wage" of an employee shall include the
cash wage only, without deduction on account of facilities provided
by the employer.
Definition and Rationale – Overtime Pay
45
PNB v PNB Employees Assoc [1982]
Verily, there can be no other reason that he is made to
work longer than what is commensurate with his agreed
compensation for the statutorily fixed or voluntarily agreed hours of
labor he is supposed to do. It is thus the addtl work, labor or service
employed and the adverse effects of his longer stay in his place of
work that justify and is the real reason for the extra compensation
that is called overtime pay.
Caltex Regular Emp v Caltex Phils Inc [1995]
It is not enough that the hours worked fall on
disagreeable or inconvenient hours. In order that work may be
considered as overtime work, the hours worked must be in excess of
and in addition to the 8 hours worked during the prescribed daily
period, or the forty hours worked during the regular work week
Monday through Friday.
No Computation Formula Basic Contract
Manila Terminal Co Inc v CIR [1952]
A contract of employment which provides for a weekly
wage for a specified number of hours, sufficient to cover both the
statutory minimum wage and overtime compensation, if computed on
the basis of the statutory minimum, and which makes no provision
for a fixed hourly rate or that the weekly wage includes overtime
compensation, does not meet the reqts of the Act.
Built-in Compensation
Engineering Equipment v MOLE [1985]
Written contracts with a built-in overtime pay in the ten-
hour working day and that their basic monthly pay was adjusted to
reflect the higher amount covering the guaranteed two-hour extra
time, whether worked or unworked, are valid.
Proof of Work
Lagatic v NLRC [1998]
Entitlement to overtime pay must first be established by
proof that said overtime work was actually performed, before an
employee may avail of said benefit.
Villar v NLRC [2000]
As a general rule, one who pleads payment has the
burden of proving it. Even where the plaintiff must allege non-
payment, the rule is that the burden rests on the defendant to prove
payment, rather than on the plaintiff to prove non-payment. The
debtor has the burden of showing with legal certainty that the
obligation has been discharged with payment.
 LABOR MIDTERMS MAGIC NOTES!
Employer Obligation
SSS v CA [2000]
5.07 NIGHT WORK
Art. 86. Night shift differential. Every employee shall be paid a
night shift differential of not less than ten percent (10%) of his regular
wage for each hour of work performed between ten o’clock in the
evening and six o’clock in the morning.
Rationale Prohibition
Shell Oil Co of the Phil Ltd v National Labor Union [1948]
Nightwork cannot be regarded as desirable, either from
the point of view of the employer or of the wage earner. It is
uneconomical unless overhead costs are unusually heavy.
Frequently, the scale of wages is higher as an inducement to
employees to accept employment on the night shift, and the rate of
production is generally lower.
The case against nightwork rests upon several grounds.
First, there are the remotely injurious effects of the permanent
nightwork manifested in the later years of the worker’s life. Of more
immediate importance to the average worker is the disarrangement
of his social life. From an economic point of view, it is to be
discouraged because of its adverse effect upon efficiency and
output.
Section 6: Conditions Of Employment – Weekly Rest Periods
Statutory Reference
Book III, Rule III, Omnibus Rules Implementing the Labor Code
RULE III: Weekly Rest Periods
SECTION 1. General statement on coverage. — This Rule shall
apply to all employers whether operating for profit or not, including
public utilities operated by private persons.
SECTION 2. Business on Sundays/Holidays. — All
establishments and enterprises may operate or open for business on
Sundays and holidays provided that the employees are given the
weekly rest day and the benefits as provided in this Rule.
SECTION 3. Weekly rest day. — Every employer shall give his
employees a rest period of not less than twenty-four (24)
consecutive hours after every six consecutive normal work days.
by: OWEN AND RACH 
SECTION 4. Preference of employee. — The preference of the
employee as to his weekly day of rest shall be respected by the
employer if the same is based on religious grounds. The employee
shall make known his preference to the employer in writing at least
seven (7) days before the desired effectivity of the initial rest day so
preferred.
Where, however, the choice of the employee as to his rest day
based on religious grounds will inevitably result in serious prejudice
or obstruction to the operations of the undertaking and the employer
cannot normally be expected to resort to other remedial measures,
the employer may so schedule the weekly rest day of his choice for
at least two (2) days in a month.
SECTION 5. Schedule of rest day. — (a) Where the weekly rest
is given to all employees simultaneously, the employer shall make
known such rest period by means of a written notice posted
conspicuously in the work place at least one week before it becomes
effective.
(b) Where the rest period is not granted to all employees
simultaneously and collectively, the employer shall make known to
the employees their respective schedules of weekly rest through
written notices posted conspicuously in the work place at least one
week before they become effective.
SECTION 6. When work on rest day authorized. — An
employer may require any of his employees to work on his
scheduled rest day for the duration of the following emergencies and
exceptional conditions:
(a) In case of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other disaster
or calamity, to prevent loss of life or property, or in cases of force
majeure or imminent danger to public safety;
(b) In case of urgent work to be performed on machineries,
equipment or installations to avoid serious loss which the employer
would otherwise suffer;
(c) In the event of abnormal pressure of work due to special
circumstances, where the employer cannot ordinarily be expected to
resort to other measures;
(d) To prevent serious loss of perishable goods;
(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 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.
No employee shall be required against his will to work on his
scheduled rest day except under circumstances provided in this
Section: Provided, However, that where an employee volunteers to
46
work on his rest day under other circumstances, he shall express
such desire in writing, subject to the provisions of Section 7 hereof
regarding additional compensation.
SECTION 7. Compensation on rest day/Sunday/holiday. — (a)
Except those employees referred to under Section 2, Rule I, Book
Three, an employee who is made or permitted to work on his
scheduled rest day shall be paid with an additional compensation of
at least 30% of his regular wage. An employee shall be entitled to
such additional compensation for work performed on a Sunday only
when it is his established rest day.
(b) Where the nature of the work of the employee is such that he has
no regular work days and no regular rest days can be scheduled, he
shall be paid an additional compensation of at least 30% of his
regular wage for work performed on Sundays and holidays.
(c) Work performed on any special holiday shall be paid with an
additional compensation of at least 30% of the regular wage of the
employees. Where such holiday work falls on the employee's
scheduled rest day, he shall be entitled to additional compensation of
at least 50% of his regular wage.
(d) The payment of additional compensation for work performed on
regular holiday shall be governed by Rule IV, Book Three, of these
regulations.
(e) Where the collective bargaining agreement or other applicable
employment contract stipulates the payment of a higher premium
pay than that prescribed under this Section, the employer shall pay
such higher rate.
SECTION 8. Paid-off days. — Nothing in this Rule shall justify an
employer in reducing the compensation of his employees for the
unworked Sundays, holidays, or other rest days which are
considered paid-off days or holidays by agreement or practice
subsisting upon the effectivity of the Code.
SECTION 9. Relation to agreements. — Nothing herein shall
prevent the employer and his employees or their representatives in
entering into any agreement with terms more favorable to the
employees than those provided herein, or be used to diminish any
benefit granted to the employees under existing laws, agreements,
and voluntary employer practices.
6.01 RATIONALE
Mla Electric Co v Public Utilities Emp Assoc [1947]
It would be unfair for the law to compel public utilities to
pay addtl compensation to laborers who they have to compel to work
during Sundays and legal holidays, in order to perform a continuous
service to the public. To require them would be tantamount to
penalize them for performing public service.
 LABOR MIDTERMS MAGIC NOTES!
Perfecto [dissent]: It is a fact that Sundays and legal
holidays are set aside by law as days of rest. The life, existence and
happiness of a person do not depend only on the satisfaction of his
physical needs. There are moral, intellectual and spiritual needs as
imperative as the physical ones.
6.02 COVERAGE
Art. 82. Coverage. The provisions of this Title (Working Conditions
and Rest Periods) shall apply to employees in all establishments and
undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the
family of the employer who are dependent on him for support,
domestic helpers, persons in the personal service of another, and
workers who are paid by results as determined by the Secretary of
Labor in appropriate regulations.
As used herein, "managerial employees" refer to those whose
primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof,
and to other officers or members of the managerial staff.
"Field personnel" shall refer to non-agricultural employees who
regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty.
Art. 91. Right to weekly rest day. a. It shall be the duty of every
employer, whether operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four (24)
consecutive hours after every six (6) consecutive normal work days.
6.3 CHEDULING OF REST DAY
Art. 91. Right to weekly rest day. b. The employer shall
determine and schedule the weekly rest day of his employees
subject to collective bargaining agreement and to such rules and
regulations as the Secretary of Labor and Employment may provide.
However, the employer shall respect the preference of employees as
to their weekly rest day when such preference is based on religious
grounds.
6.04 COMPULSORY WORK AND COMPENSATION
Art. 92. When employer may require work on a rest day. The
employer may require his employees to work on any day:
a. In case of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other disaster
by: OWEN AND RACH  47
or calamity to prevent loss of life and property, or imminent danger to SECTION 1. Coverage. — This rule shall apply to all employees
public safety; except:
b. In cases of urgent work to be performed on the machinery, (a) Those of the government and any of the political subdivision,
equipment, or installation, to avoid serious loss which the employer including government-owned and controlled corporation;
would otherwise suffer; (b) Those of retail and service establishments regularly employing
c. In the event of abnormal pressure of work due to special less than ten (10) workers;
circumstances, where the employer cannot ordinarily be expected to (c) Domestic helpers and persons in the personal service of another;
resort to other measures; (d) Managerial employees as defined in Book Three of the Code;
d. To prevent loss or damage to perishable goods; (e) Field personnel and other employees whose time and
Where the nature of the work requires continuous operations and the performance is unsupervised by the employer including those who
stoppage of work may result in irreparable injury or loss to the are engaged on task or contract basis, purely commission basis, or
employer; and those who are paid a fixed amount for performing work irrespective
e. Under other circumstances analogous or similar to the foregoing of the time consumed in the performance thereof.
as determined by the Secretary of Labor and Employment.
SECTION 2. Status of employees paid by the month. —
Section 7: Conditions Of Employment – Holidays Employees who are uniformly paid by the month, irrespective of the
number of working days therein, with a salary of not less than the
Statutory Reference statutory or established minimum wage shall be paid for all days in
the month whether worked or not.
EO 203 PROVIDING A LIST OF REGULAR HOLIDAYS AND For this purpose, the monthly minimum wage shall not be less than
SPECIAL DAYS TO BE OBSERVED THROUGHOUT THE the statutory minimum wage multiplied by 365 days divided by
PHILIPPINES AND FOR OTHER PURPOSES [1987] twelve.
Sec. 1. Unless otherwise modified by law, order or proclamation, the
following regular holidays and special days shall be observed in this SECTION 3. Holiday Pay. — Every employer shall pay his
country: employees their regular daily wage for any worked regular holidays.
A. Regular Holidays As used in the rule, the term 'regular holiday' shall exclusively refer
New Year's Day January to: New Year's Day, Maundy Thursday, Good Friday, the ninth of
Maundy Thursday Movable date April, the first of May, the twelfth of June, the last Sunday of August,
Good Friday Movable date the thirtieth of November, the twenty-fifth and thirtieth of December.
Araw ng Kagitingan (Bataan Nationwide special days shall include the first of November and the
and Corregidor Day) April 9 last day of December.
Labor Day May 1 As used in this Rule legal or regular holiday and special holiday shall
Independence Day June 12 now be referred to as 'regular holiday' and 'special day', respectively.
National Heroes Day Last Sunday of August
Bonifacio Day November 30 SECTION 4. Compensation for holiday work. — Any employee
who is permitted or suffered to work on any regular holiday, not
Christmas Day December 25
Rizal Day December 30 exceeding eight (8) hours, shall be paid at least two hundred percent
(200%) of his regular daily wage. If the holiday work falls on the
B. Nationwide Special Days
All Saints Day November 1 scheduled rest day of the employee, he shall be entitled to an
additional premium pay of at least 30% of his regular holiday rate of
Last Day of the Year December 31
200% based on his regular wage rate.
Sec. 2. Henceforth, the terms "legal or regular holiday" and
SECTION 5. Overtime pay for holiday work. — For work
"special holiday", as used in laws, orders, rules and regulations or
other issuances shall now be referred to as "regular holiday" and performed in excess of eight hours on a regular holiday, an
"special day", respectively. employee shall be paid an additional compensation for the overtime
work equivalent to his rate for the first eight hours on such holiday
work plus at least 30% thereof.
Book III, Rule IV, Omnibus Rules Where the regular holiday work exceeding eight hours falls on the
RULE IV: Holidays with Pay scheduled rest day of the employee, he shall be paid an additional
 LABOR MIDTERMS MAGIC NOTES!
compensation for the overtime work equivalent to his regular holiday-
rest day for the first 8 hours plus 30% thereof. The regular holiday
rest day rate of an employee shall consist of 200% of his regular
daily wage rate plus 30% thereof.
SECTION 6. Absences. — (a) All covered employees shall be
entitled to the benefit provided herein when they are on leave of
absence with pay. Employees who are on leave of absence without
pay on the day immediately preceding a regular holiday may not be
paid the required holiday pay if he has not worked on such regular
holiday.
(b) Employees shall grant the same percentage of the holiday pay as
the benefit granted by competent authority in the form of employee's
compensation or social security payment, whichever is higher, if they
are not reporting for work while on such benefits.
(c) Where the day immediately preceding the holiday is a non-
working day in the establishment or the scheduled rest day of the
employee, he shall not be deemed to be on leave of absence on that
day, in which case he shall be entitled to the holiday pay if he worked
on the day immediately preceding the non-working day or rest day.
SECTION 7. Temporary or periodic shutdown and temporary
cessation of work. — (a) In cases of temporary or periodic
shutdown and temporary cessation of work of an establishment, as
when a yearly inventory or when the repair or cleaning of
machineries and equipment is undertaken, the regular holidays
falling within the period shall be compensated in accordance with
this Rule.
(b) The regular holiday during the cessation of operation of an
enterprise due to business reverses as authorized by the Secretary
of Labor and Employment may not be paid by the employer.
SECTION 8. Holiday pay of certain employees. — (a) Private
school teachers, including faculty members of colleges and
universities, may not be paid for the regular holidays during
semestral vacations. They shall, however, be paid for the regular
holidays during Christmas vacation;
(b) Where a covered employee, is paid by results or output, such as
payment on piece work, his holiday pay shall not be less than his
average daily earnings for the last seven (7) actual working days
preceding the regular holiday; Provided, However, that in no case
shall the holiday pay be less than the applicable statutory minimum
wage rate.
(c) Seasonal workers may not be paid the required holiday pay
during off-season when they are not at work.
(d) Workers who have no regular working days shall be entitled to
the benefits provided in this Rule.
by: OWEN AND RACH 
SECTION 9. Regular holiday falling on rest days or Sundays.
— (a) A regular holiday falling on the employee's rest day shall be
compensated accordingly.
(b) Where a regular holiday falls on a Sunday, the following day shall
be considered a special holiday for purposes of the Labor Code,
unless said day is also a regular holiday.
SECTION 10. Successive regular holidays. — Where there are
two (2) successive regular holidays, like Holy Thursday and Good
Friday, an employee may not be paid for both holidays if he absents
himself from work on the day immediately preceding the first holiday,
unless he works on the first holiday, in which case he is entitled to
his holiday pay on the second holiday.
SECTION 11. Relation to agreements. — Nothing in this Rule shall
justify an employer in withdrawing or reducing any benefits,
supplements or payments for unworked holidays as provided in
existing individual or collective agreement or employer practice or
policy.
7.02 COVERAGE
Art. 94. Right to holiday pay. a. Every worker shall be paid his
regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10)
workers.
Coverage and Purpose
Mantrade/FMC Division Employees v Bacungan [1986]
The Sec of Labor cannot exempt Mantrade from paying
holiday pay just because its employees are uniformly paid by the
month irrespective of the number of working days therein. The Labor
Code only exempts retail and service establishments regularly
employing less than 10 workers.
San Miguel Corp v CA [2002]
[Non-Muslim employees granted Muslim holiday pay]
Wages and other emoluments granted by law to the
working man are determined on the basis of the criteria laid down by
laws and certainly not on the basis of the worker’s faith or religion.
Asian Transunion Corp v CA [2004]
7.02 HOLIDAYS
PD 1083: Art. 169. Official Muslim Holidays. – The following are
hereby recognized as legal Muslim holidays:
48
(a) ‘Amun Jadid (New Year), which falls on the first day of the first
lunar month of Muharram;
(b) Mauild-um-Nabi (Birthday of the Prophet Muhammad), which falls
on the twelfth day of the third lunar month of Rabi-ul-Awwal;
(c) Lailatul Isra Wal M’iraj (Nocturnal Journey and Ascension of the
Prophet Muhammad), which falls on the twenty-seventh day of the
seventh lunar month of Rajab;
(d) Id-ul-Fitr (Hari Raya Puasa), which falls on the first day of the
tenth lunar month of Shawwal, commemorating the end of fasting
season;
(e) ‘Id-ul-Adha (Hari Raya Haji), which falls on the tenth day of the
twelfth lunar month of Dhul-Hija.
7.03 HOLIDAY PAY
Art. 94. Right to holiday pay.
a. Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly
employing less than ten (10) workers;
b. The employer may require an employee to work on any holiday
but such employee shall be paid a compensation equivalent to twice
his regular rate; and
c. As used in this Article, "holiday" includes: New Year’s Day,
Maundy Thursday, Good Friday, the ninth of April, the first of May,
the twelfth of June, the fourth of July, the thirtieth of November, the
twenty-fifth and thirtieth of December and the day designated by law
for holding a general election.
Faculty Private School
Jose Rizal College v NLRC [1987]
[School faculty who are paid per lecture hour]
They are entitled to unworked holiday pay for special
holidays or when classes are called off or shortened but not for
regular holidays.
The declared purpose of the holiday pay which is the
prevention of diminution of the monthly income of employees on
account of work interruptions is defeated when a regular class day is
cancelled on account of a special public holiday and class hours are
held on another working day to make up for lost time in the school
calendar. Although forced to take a rest, he does not earn what he
should earn on that day.
Divisor as Factor
Union of Filipro Employees v Vivar [1991]
It must be stressed that the daily rate, assuming there are
no intervening salary increases, is a constant figure for the purpose
 LABOR MIDTERMS MAGIC NOTES!
of computing overtime and night differential pay and commutation of
sick and vacation leave credits. Necessarily, the daily rate should
also be the same basis for computing the 10 unpaid holidays.
Transasia Phils Employer Assoc v NLRC [1999]
The adjusted divisor of 287 days should only be used for
computations which would be advantageous to the employees. The
Court notes that if the divisor is increased to 287 days, the resulting
daily rate for the purposes of overtime pay, holiday pay and
conversions of accumulated leaves would be diminished. This would
then be violative of proscription on the non-diminution of benfits
under Sec 100 of LC. ON the other hand, the use of divsor of 287
days would be to the advantage of petitioners if it is used for
purposes of computing for deductions due the employee’s absence.
Computation
Agga v NLRC [1998]
Night shift differential and addtl remuneration for
overtime, rest day, Sunday and holiday work shall be computed on
the basis of the employee’s regular wage. In like fashion, the 1991
POEA Rules merely require employers to guarantee payment of
wages and overtime pay. See art. 93.
Sunday
Wellington Investment Inc v Trajano [1995]
There is no provision of law requiring any employer to
make such adjustments in the monthly salary rate set by him to take
account of legal holidays falling on Sundays in a given year, or
contrary to the legal provisions bearing on the point, otherwise to
reckon a year at more than 365 days. What the law requires of
employers opting to pay by the month is to assure that “the monthly
minimum wage shall not be less than the statutory minimum wage
multiplied by 365 days divided by 12” and to pay that salary “for all
days in the month whether worked or not” and “irrespective of the
number of working days therein.”
Proof of Payment
Buiding Care Corp v NLRC [1998]
If it had really paid the employee the holiday pay, it could
have easily presented its payrolls, which constitute the best proof of
payment. To prove payment of salary differentials, it could have
presented proof but did not. It failed to comply with the mandate of
the law; the burden of proof in this regard lies with the employer, not
the employee.
Section 8: Conditions Of Employment – Leaves
by: OWEN AND RACH 
A. SERVICE INCENTIVE LEAVE
Statutory Reference
Book III, Rule V, Omnibus Rules
RULE V: Service Incentive Leave
SECTION 1. Coverage. — This rule shall apply to all employees
except:
(a) Those of the government and any of its political subdivisions,
including government-owned and controlled corporations;
(b) Domestic helpers and persons in the personal service of another;
(c) Managerial employees as defined in Book Three of this Code;
(d) Field personnel and other employees whose performance is
unsupervised by 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 work irrespective of the time
consumed in the performance thereof;
(e) Those who are already enjoying the benefit herein provided;
(f) Those enjoying vacation leave with pay of at least five days; and
(g) Those employed in establishments regularly employing less than
ten employees.
SECTION 2. Right to service incentive leave. — Every
employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay.
SECTION 3. Definition of certain terms. — The term "at least
one-year service" shall mean service for not less than 12 months,
whether continuous or broken reckoned from the date the employee
started working, including authorized absences and paid regular
holidays unless the working days in the establishment as a matter of
practice or policy, or that provided in the employment contract is less
than 12 months, in which case said period shall be considered as
one year.
SECTION 4. Accrual of benefit. — Entitlement to the benefit
provided in this Rule shall start December 16, 1975, the date the
amendatory provision of the Code took effect.
SECTION 5. Treatment of benefit. — The service incentive leave
shall be commutable to its money equivalent if not used or
exhausted at the end of the year.
SECTION 6. Relation to agreements. — Nothing in the Rule
shall justify an employer from withdrawing or reducing any benefits,
supplements or payments as provided in existing individual or
collective agreements or employer's practices or policies.
49
8.01 COVERAGE
Art. 95. Right to service incentive leave.
a. Every employee who has rendered at least one year of service
shall be entitled to a yearly service incentive leave of five days with
pay.
b. This provision shall not apply to those who are already enjoying
the benefit herein provided, those enjoying vacation leave with pay
of at least five days and those employed in establishments regularly
employing less than ten employees or in establishments exempted
from granting this benefit by the Secretary of Labor and Employment
after considering the viability or financial condition of such
establishment.
Makati Haberdashery Inc V NLRC [1989]
While they are entitle to Minimum Wage, Cola, and 13 th month
pay, they are not entitled to service incentive leave pay because as
piece rate workers being paid at a fixed amount for performing work
irrespective f time consumed in the performance thereof, they fall
under one of the exceptions stated in Sec 1(d) Rule V, Implementing
Regulations, Book III LC. For the same reason, they cannot also
claim holiday pay.
8.2 ENTITLEMENT AND ARBITRATION
Art. 95. Right to service incentive leave.
a. Every employee who has rendered at least one year of service
shall be entitled to a yearly service incentive leave of five days with
pay.
b. The grant of benefit in excess of that provided herein shall not be
made a subject of arbitration or any court or administrative action.
8.03 COMPUTATION AND LIABILITY
Sentinel Security Agency v NLRC [1998]
The Philam Life Insurance Co did not illegally dismiss the
complainants. Thus, it should not be held liable for separation pay
and backwages. But even so, it is jointly and severally liable with the
Agency for the complainant’s service incentive leave pay.
Auto Bus Transport Systems v Bautista [2005]
B. PATERNITY LEAVE
RA 8187 – Paternity Leave Act of 1996
SECTION 1. S hort Title . - This Act shall be known as the
"Paternity Leave Act of 1996".
 LABOR MIDTERMS MAGIC NOTES!
SECTION 2. Notwithstanding any law, rules and regulations to the
contrary, every married male employee in the private and public
sectors shall be entitled to a paternity leave of seven (7) days with
full pay for the first four (4) deliveries of the legitimate spouse with
whom he is cohabiting. The male employee applying for paternity
leave shall notify his employer of the pregnancy of his legitimate
spouse and the expected date of such delivery.
For purposes, of this Act, delivery shall include childbirth or any
miscarriage.
SECTION 3. Definition of Term. - For purposes of this Act,
Paternity Leave refers to the benefits granted to a married male
employee allowing him not to report for work for seven (7)
days but continues to earn the compensation therefor, on the
condition that his spouse has delivered a child or suffered a
miscarriage for purposes of enabling him to effectively lend
support to his wife in her period of recovery and/or in the nursing of
the newly-born child.
SECTION 4. The Secretary of Labor and Employment, the
Chairman of the Civil Service Commission and the Secretary of
Health shall, within thirty (30) days from the effectivity of
this Act, issue such rules and regulations necessary for the proper
implementation of the provisions hereof.
SECTION 5. Any person, corporation, trust, firm, partnership,
association or entity found violating this Act or the rules and
regulations promulgated thereunder shall be punished by a fine not
exceeding Twenty-five thousand pesos (P25,000) or imprisonment of
not less than thirty (30)days nor more than six (6) months.
If the violation is committed by a corporation, trust or firm,
partnership, association or any other entity, the penalty of
imprisonment shall be imposed on the entity's responsible officers,
including, but not limited to, the president, vice-president, chief
executive officer, general manager, managing director or partner
directly responsible therefor.
C. MATERNITY LEAVE
RA 8282, Sec 14A
SEC. 14. Sickness Benefit. - (a) A member who has paid at least
three (3) monthly contributions in the twelve-month period
immediately preceding the semester of sickness or injury and is
confined therefor for more than three (3) days in a hospital or
elsewhere with the approval of the SSS, shall, for each day of
compensable confinement or a fraction thereof, be paid by his
employer, or the SSS, if such person is unemployed or self-
employed, a daily sickness benefit equivalent to ninety percent
by: OWEN AND RACH  50
(90%) of his average daily salary credit, subject to the following days every year shall be granted to any solo parent employee who
conditions: has rendered service of at least one (1) year.
"(1) In no case shall the daily sickness benefit be paid longer than
one hundred twenty (120) days in one (1) calendar year, nor shall
any unused portion of the one hundred twenty (120) days of
sickness benefit granted under this section be carried forward and
added to the total number of compensable days allowable in the
subsequent year;
"(2) The daily sickness benefit shall not be paid for more than two
hundred forty (240) days on account of the same confinement; and
"(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 injured while working or within the
premises of the employer in which case, notification to the employer
is necessary: Provided, That if the member 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:
Provided, further, That in cases where notification is necessary, the
confinement shall be deemed to have started not earlier than the fifth
day immediately preceding the date of notification.
D. VACATION AND SICK LEAVE
RA 8972 – An Act Providing for Benefits to Solo Parents, Sec 2, 6, 8
Sec. 2. Declaration of Policy. - It is the policy of the State to
promote the family as the foundation of the nation, strengthen its
solidarity and ensure its total development. Towards this end, it shall
develop a comprehensive program of services for solo parents and
their children to be carried out by the Department of Social Welfare
and Development (DSWD), the Department of Health (DOH), the
Department of Education, Culture and Sports (DECS), the
Department of the Interior and Local Government (DILG), the
Commission on Higher Education (CHED), the Technical Education
and Skills Development Authority (TESDA), the National Housing
Authority (NHA), the Department of Labor and Employment (DOLE)
and other related government and non-government agencies.
Sec. 6. Flexible Work Schedule. - The employer shall provide for
a flexible working schedule for solo parents: Provided, That the
same shall not affect individual and company productivity: Provided,
further, That any employer may request exemption from the above
requirements from the DOLE on certain meritorious grounds.
Sec. 8. Parental Leave. - In addition to leave privileges under
existing laws, parental leave of not more than seven (7) working