LABOR MIDTERMS MAGIC NOTES!
by: OWEN AND RACH
PART 1: INTRODUCTORY MATERIALS
Section 1: Labor Law in General
1.01 LABOR LAW DEFINED
Bouviers 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
1
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 of the
general welfare are essential for the enjoyment
by all the people of the blessings of democracy.
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.
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.
Police Power
CMS Estate Inc v Social Security System
The Social Security Law was enacted
pursuant to the policy of the government "to
develop, establish gradually and perfect a social
security system which shall be suitable to the
needs of the people throughout the Philippines,
and shall provide protection against the hazards
of disability, sickness, old age and death" (Sec. 2,
RA 1161, as amended).
Membership in the SSS is not a result of
bilateral, consensual agreement where the rights
and obligations of the parties are defined by and
subject to their will, RA 1161 requires compulsory
coverage of employees and employers under the
System. It is actually a legal imposition on said
employers and employees, designed to provide
social security to the workingmen. The principle
of non-impairment of the obligation of contract as
provided in the Bill of Rights is not a proper
defense, the enactment being a lawful exercise
of the police power of the State.
1.04 SOURCES OF LAW
A. Labor Code and Related Special Legislation I
(Implementing Rules)
B. Contract
Art 1305 CC A contract is a meeting of minds
between two persons whereby one binds himself,
with respect to the other, to give something or to
render some service.
Art 1306 CC The contracting parties may
establish such stipulations, clauses, terms and
conditions as they may deem convenient,
provided they are not contrary to law, morals,
good customs, public order, or public policy.
Kasapian v CA
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
as applied to the facts herein.
C. Collective Bargaining Agreement
DOLE Phils v Pawis ng Makabayang Obrero
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.
D. Past Practices
Davao Fruits Corp v Associated Labor Union
From 1975 to 1981, petitioner had freely,
voluntarily and continuously included in the
computation of its employees' thirteenth month
pay, the payments for sick, vacation and
maternity leaves, premiums for work done on
rest days and special holidays, and pay for
 LABOR MIDTERMS MAGIC NOTES!
regular holidays. The considerable length of time
the questioned items had been included by
petitioner indicates a unilateral and voluntary act
on its part, sufficient in itself to negate any claim
of mistake.
Samahang Manggagawa v NLRC
Granted that private respondent TFM had
granted an across-the-board increase pursuant to
Republic Act No. 6727, that single instance may
not be considered an established company
practice.
American Wire and Cable Daily Rated Employees
Union v American Wire and Cable Co Inc
For a bonus to be enforceable, it has to
be promised by the employer and expressly
agreed upon by the parties or it must have a
fixed amount and had been a long and regular
practice on the part of the employer. To be
considered regular practice the giving of the
bonus should have been done over a long period
of time and must be shown to have been
consistent and deliberate.
There was a downtrend in the amount
given for service awards. There was also a
downtrend with respect to the holding of
Christmas parties as the locations were changed
from paid venues to free ones. The additional
35% premium pay for work during Holy Week and
Christmas season cannot be held to have ripened
into a 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 corporations owner that it
cannot continue the same in view of the
companys 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,
by: OWEN AND RACH 2
explains that it did so because it was agreed him from becoming a regular employee, and then
upon in the CBA that should a wage increase be rehiring him on probation, again without security
ordered within six months from its signing, of tenure. We cannot permit this subterfuge if we
petitioner would give the increase to the are to be true to the spirit and mandate of social
employees in addition to the CBA-mandated justice. On the other hand, we have also the
increases. Respondents isolated act could hardly health of the public and of the dismissed
be classified as a "company practice" or employee himself to consider. Hence, although
company usage that may be considered an we must rule in favor of his reinstatement, this
enforceable obligation. must be conditioned on his fitness to resume his
work, as certified by competent authority.
E. Company Policies
Sinco Philippine Constitutional Law pp130-134
China Banking Corp v Borromeo
Forfeiture of benefits/privileges may also Bernas 1987 Constitution of the Philippines: A
be effected in cases where infractions or Commentary pp 441-445
violations were incurred in connection with or
arising from the application/availment thereof.
1.06 LABOR CASE
It is well recognized that company
policies and regulations are, unless shown to be
Lapanday Agricultural Development Corp v CA
grossly oppressive or contrary to law, generally
The enforcement of the written contract
binding and valid on the parties and must be
does not fall under the jurisdiction of the NLRC
complied with until finally revised or amended
because the money claims involved therein did
unilaterally or preferably through negotiation or
not arise from employer-employee relations
by competent authority.
between the parties and is intrinsically a civil
dispute. Thus, jurisdiction lies with the regular
1.05 LAW AND WORKER
courts. The RTC has jurisdiction over the subject
matter of the present case. It is well settled in
Cebu Royal Plant v Minster of Labor
law and jurisprudence that where no employer-
Sec. 8, Rule I, Book VI, of the Rules and
employee relationship exists between the parties
Regulations implementing the Labor Code:
and no issue is involved which may be resolved
Disease as a ground for dismissal. Where the
by reference to the Labor Code, other labor
employee suffers from a disease and his
statutes or any collective bargaining agreement,
continued employment is prohibited by law or
it is the Regional Trial Court that has jurisdiction.
prejudicial to his health or to the health of his co-
While the resolution of the issue involves the
employees, the employer shall not terminate his
application of labor laws, reference to the labor
employment unless there is a certification by a
code was only for the determination of the
competent public health authority that the
solidary liability of the petitioner to the
disease is of such nature or at such a stage that
respondent where no employer-employee
it cannot be cured within a period of six (6)
relation exists. Article 217 of the Labor Code as
months even with proper medical treatment. If
amended vests upon the labor arbiters exclusive
the disease or ailment can be cured within the
original jurisdiction only over the following:
period, the employer shall not terminate the
1. Unfair labor practices;
employee but shall ask the employee to take a
2. Termination disputes;
leave. The employer shall reinstate such
3. If accompanied with a claim for
employee to his former position immediately
reinstatement, those cases that workers
upon the restoration of his normal health.
may file involving wages, rates of pay,
We agree that there was here an attempt
hours of work and other terms and
to circumvent the law by separating the
conditions of employment;
employee after five months' service to prevent
 LABOR MIDTERMS MAGIC NOTES!
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
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 latters daily earnings are remitted to the
owner/operator less the excess of the boundary
which represents the drivers 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.
by: OWEN AND RACH
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."
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 employers prerogative to
prescribe reasonable rules and regulations
3
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 Wyeths 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. 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
 LABOR MIDTERMS MAGIC NOTES!
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 managements
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
companys 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.
by: OWEN AND RACH
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.
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
4
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
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
workers 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.
 LABOR MIDTERMS MAGIC NOTES!
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 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
by: OWEN AND RACH
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.
5
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.
 LABOR MIDTERMS MAGIC NOTES!
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
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
by: OWEN AND RACH
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.
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.
6
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 through specific labor provisions
and the recognition of limits to the exercise of
management prerogatives.
Agabon v NLRC
 LABOR MIDTERMS MAGIC NOTES!
Sarocam v Interorient Maritime
Labor as Property
Asuncion v NLRC
A workers 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
by: OWEN AND RACH
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.
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 employers intent
and the reason for the proposed dismissal; upon
the other hand, the requirement of hearing
affords the employee the opportunity to answer
his employers 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
employees position but his livelihood.
7
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
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
 LABOR MIDTERMS MAGIC NOTES!
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
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.
by: OWEN AND RACH
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 petitioners 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
8
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.
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 ones 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 legislatures 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 employers 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
 LABOR MIDTERMS MAGIC NOTES!
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.
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
by: OWEN AND RACH 9
not affection and gratitude, that is due to an
equal partner. (2) No one shall be arbitrarily deprived of his
property.
Manega v NLRC
An employer can terminate the services Art 22 Everyone, as a member of society, has
of an employee only for valid and just causes the right to social security and is entitled to
which must be supported by clear and convincing realization, through national effort and
evidence. The employer has the burden of international co-operation and in accordance with
proving that the dismissal was indeed for a valid the organization and resources of each State, of
and just cause. Failure to do so results in a the economic, social and cultural rights
finding that the dismissal was unjustified. indispensable for his dignity and the free
development of his personality.
Special Steel Products v Villarea
ART. 116. Withholding of wages and
kickbacks prohibited. It shall be unlawful for Art 23 (1) Everyone has the right to work, to
any person, directly or indirectly, to withhold any free choice of employment, to just and
amount from the wages (and benefits) of a favourable conditions of work and to protection
worker or induce him to give up any part of his against unemployment.
wages by force, stealth, intimidation, threat or by
any other means whatsoever without the (2) Everyone, without any discrimination, has the
workers consent. right to equal pay for equal work.
An employer cannot simply refuse to pay
the wages or benefits of its employee because he (3) Everyone who works has the right to just and
has either defaulted in paying a loan guaranteed favourable remuneration ensuring for himself and
by his employer; or violated their memorandum his family an existence worthy of human dignity,
of agreement; or failed to render an accounting and supplemented, if necessary, by other means
of his employers property. of social protection.
l
Section 4: Labor and International (4) Everyone has the right to form and to join
Covenants (Labor Standards and Welfare trade unions for the protection of his interests.
Law)
Art 24 Everyone has the right to rest and
4.01 UNIVERSAL DECLARATION OF HUMAN leisure, including reasonable limitation of working
RIGHTS hours and periodic holidays with pay.
Art 3 Everyone has the right to life, liberty and Art 25 (1) Everyone has the right to a standard
security of person of living adequate for the health and well-being
of himself and of his family, including food,
clothing, housing and medical care and
Art 7 All are equal before the law and are
necessary social services, and the right to
entitled without any discrimination to equal
security in the event of unemployment, sickness,
protection of the law. All are entitled to equal
disability, widowhood, old age or other lack of
protection against any discrimination in violation
livelihood in circumstances beyond his control.
of this Declaration and against any incitement to
such discrimination.
(2) Motherhood and childhood are entitled to
special care and assistance. All children, whether
Art 17 (1) Everyone has the right to own
born in or out of wedlock, shall enjoy the same
property alone as well as in association with
social protection.
others.
 LABOR MIDTERMS MAGIC NOTES!
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
by: OWEN AND RACH
PART III Art 9 The States Parties to the present
Covenant recognize the right of everyone to
social security, including social insurance.
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
10
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.
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
 LABOR MIDTERMS MAGIC NOTES!
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 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
by: OWEN AND RACH
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 petitioners
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 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,
11
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
 LABOR MIDTERMS MAGIC NOTES!
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
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;
by: OWEN AND RACH
(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 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.
12
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.
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 Glaxos employees is
reasonable under the circumstances because
 LABOR MIDTERMS MAGIC NOTES!
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
interpretation of the provisions of this Code
by: OWEN AND RACH
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 mans
welfare should be the primordial and paramount
consideration.
Doubt
Clemente v GSIS
GSISs 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
13
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
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
 LABOR MIDTERMS MAGIC NOTES!
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.
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
by: OWEN AND RACH
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.
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.
14
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.
 LABOR MIDTERMS MAGIC NOTES!
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
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--
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 didnt 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 coulnt 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
by: OWEN AND RACH
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 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
15
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 relationship; the right to assign
the performance of specified pieces of work; the
control and supervision of the work to another;
the employers power with respect to the hiring,
firing, and payment of the contractors 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
 LABOR MIDTERMS MAGIC NOTES!
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 employees 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.
Control Test
by: OWEN AND RACH
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
16
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.
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
 LABOR MIDTERMS MAGIC NOTES!
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 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 employers power to
control the employees conduct. The most
important element is the employers control of
the employees conduct, not only as to the result
of the work to be done, but also as to the means
and methods to accomplish it.
by: OWEN AND RACH
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 latters
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
agents on commission received was not paid by
17
the company but by the investor or the person
insured.
Almirez v Infinite Corp Techonology
The deduction for SSS and tax do not
bolster Almirezs 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 employers 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
 LABOR MIDTERMS MAGIC NOTES!
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 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
formers work, the employees of the contractor
and of the latters subcontractor, if any, shall be
paid in accordance with the provisions of this
Code.
by: OWEN AND RACH 18
In the event that the contractor or subcontractor for any violation of any provision of this Code. For
fails to pay the wages of his employees in purposes of determining the extent of their civil
accordance with this Code, the employer shall be liability under this Chapter, they shall be
jointly and severally liable with his contractor or considered as direct employers.
subcontractor to such employees to the extent of
the work performed under the contract, in the DOLE Order No. 18-02 Series of 2002
same manner and extent that he is liable to
employees directly employed by him. RULES IMPLEMENTING ARTICLES 106 TO
109
The Secretary of Labor and Employment may, by OF THE LABOR CODE, AS AMENDED
appropriate regulations, restrict or prohibit the By virtue of the power vested in the Secretary of
contracting-out of labor to protect the rights of Labor and Employment under Articles 5
workers established under this Code. In so (Rulemaking) and 106 (Contractor or
prohibiting or restricting, he may make Subcontractor) of the Labor Code of the
appropriate distinctions between labor-only Philippines, as amended, the following
contracting and job contracting as well as regulations governing contracting and
differentiations within these types of contracting subcontracting arrangements are hereby issued:
and determine who among the parties involved
shall be considered the employer for purposes of Section 1. Guiding principles. - Contracting
this Code, to prevent any violation or and subcontracting arrangements are expressly
circumvention of any provision of this Code. allowed by law and are subject to regulation for
the promotion of employment and the
There is "labor-only" contracting where the observance of the rights of workers to just and
person supplying workers to an employer does humane conditions of work, security of tenure,
not have substantial capital or investment in the selforganization, and collective bargaining.
form of tools, equipment, machineries, work Labor-only contracting as defined herein shall be
premises, among others, and the workers prohibited.
recruited and placed by such person are
performing activities which are directly related to Section 2 . Coverage. - These Rules shall apply
the principal business of such employer. In such to all parties of contracting and subcontracting
cases, the person or intermediary shall be arrangements where employer-employee
considered merely as an agent of the employer relationship exists. Placement activities through
who shall be responsible to the workers in the private recruitment and placement agencies as
same manner and extent as if the latter were governed by Articles 25 to 39 of the Labor Code
directly employed by him. are not covered by these Rules.
Art 107 LC Indirect employer. The provisions Section 3. Trilateral Relationship in
of the immediately preceding article shall Contracting Arrangements. In legitimate
likewise apply to any person, partnership, contracting, there exists a trilateral relationship
association or corporation which, not being an under which there is a contract for a specific job,
employer, contracts with an independent work or service between the principal and the
contractor for the performance of any work, task, contractor or subcontractor, and a contract of
job or project. employment between the contractor or
subcontractor and its workers. Hence, there are
three parties involved in these arrangements, the
Art 109 LC Solidary liability. The provisions
principal which decides to farm out a job or
of existing laws to the contrary notwithstanding,
service to a contractor or subcontractor, the
every employer or indirect employer shall be held
contractor or subcontractor which has the
responsible with his contractor or subcontractor
 LABOR MIDTERMS MAGIC NOTES!
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
by: OWEN AND RACH
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.
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
19
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,
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
 LABOR MIDTERMS MAGIC NOTES!
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
by: OWEN AND RACH
engaged, the latter shall not be entitled to
separation pay. However, 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.
20
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 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.
 LABOR MIDTERMS MAGIC NOTES!
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:
(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
by: OWEN AND RACH
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
21
(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 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
 LABOR MIDTERMS MAGIC NOTES!
Moreover, ASDAI and AFSISI are not
labor-only contractors. There is labor only not under the control and supervision of an
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, 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/companys premises
by: OWEN AND RACH
using the latters tools and materials, and d) he is
same manner and extent as if the latter were
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
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
22
who shall be responsible to the workers in the
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
Petitioners 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 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
 LABOR MIDTERMS MAGIC NOTES!
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 doesnt have substantial capital and
(2) contractor doesnt 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 rightful claims of the employees.
by: OWEN AND RACH
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;
(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
23
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 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
 LABOR MIDTERMS MAGIC NOTES!
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 allowed to
work after a probationary period shall be
considered a regular employee.
Recognition and Types
by: OWEN AND RACH
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 employees
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 Tondenas
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
24
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]
[Helper/bricklayer for a specific project,
repair and upgrading of furnace. Rehired for
another project.]
The nature of ones 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 employers 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
 LABOR MIDTERMS MAGIC NOTES!
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. 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.
Phillips 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
by: OWEN AND RACH
every business depends on supply and demand
the cyclical nature of ones trade cannot be
invoked as a reason to place an employees
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
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
25
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]
[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.]
 LABOR MIDTERMS MAGIC NOTES!
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]
by: OWEN AND RACH
[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. URCs 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 ones
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
26
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]
[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 PNOCs Geothermal
Agro-Industrial Plan Project in Negros Oriental. He
 LABOR MIDTERMS MAGIC NOTES!
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
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
by: OWEN AND RACH
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 ENDECOs 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]
27
[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 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
 LABOR MIDTERMS MAGIC NOTES!
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]
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
by: OWEN AND RACH
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]
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
28
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]
Athletic director at Brent and her
contract was for a fixed term of 5 years. Ground
for termination was completion of contract.
 LABOR MIDTERMS MAGIC NOTES!
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 employees 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 months 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]
by: OWEN AND RACH
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]
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 Azuceras
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
29
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 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.
 LABOR MIDTERMS MAGIC NOTES!
(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 programs of apprenticeship. (As
amended by Section 1, Executive Order No. 111,
December 24, 1986)
Definition
Intl Catholic Migration Comm v NLRC [1989]
by: OWEN AND RACH
[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]
30
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]
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 respondents
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
 LABOR MIDTERMS MAGIC NOTES!
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 employees 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.
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 employees 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
by: OWEN AND RACH
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 employees 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.
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
31
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 contract. Stipulations in violation thereof
are considered null. Similarly, legislated wage
 LABOR MIDTERMS MAGIC NOTES!
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,
by: OWEN AND RACH
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.
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
32
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;
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
 LABOR MIDTERMS MAGIC NOTES!
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.
Art. 18. Ban on direct-hiring. No employer
may hire a Filipino worker for overseas
by: OWEN AND RACH
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;
33
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.
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
 LABOR MIDTERMS MAGIC NOTES!
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.
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
by: OWEN AND RACH
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 facilitation service machinery of the government
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
34
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
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
 LABOR MIDTERMS MAGIC NOTES!
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 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
by: OWEN AND RACH
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 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]
35
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
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
 LABOR MIDTERMS MAGIC NOTES!
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
by: OWEN AND RACH
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
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.
36
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.
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
 LABOR MIDTERMS MAGIC NOTES!
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; 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.
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.
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.
authority: g. To organize and establish new
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 Art. 18. Ban on direct-hiring. No employer
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 the
37
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
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.
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
 LABOR MIDTERMS MAGIC NOTES!
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 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
by: OWEN AND RACH
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 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
38
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.
Art. 35. Suspension and/or cancellation of
license or authority. The Minister of Labor shall
have the power to suspend or cancel any license
 LABOR MIDTERMS MAGIC NOTES!
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
by: OWEN AND RACH
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. 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,
39
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.
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
 LABOR MIDTERMS MAGIC NOTES!
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;
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.
by: OWEN AND RACH
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;
40
(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 by a syndicate or in
 LABOR MIDTERMS MAGIC NOTES!
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 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
by: OWEN AND RACH
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
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.
41
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.
 LABOR MIDTERMS MAGIC NOTES!
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.
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
by: OWEN AND RACH
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 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.
42
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 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
 LABOR MIDTERMS MAGIC NOTES!
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;
by: OWEN AND RACH
(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.
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
43
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:
(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,
 LABOR MIDTERMS MAGIC NOTES!
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
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;
by: OWEN AND RACH
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
44
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 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
 LABOR MIDTERMS MAGIC NOTES!
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.
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
by: OWEN AND RACH
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 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
45
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
 LABOR MIDTERMS MAGIC NOTES!
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 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.
by: OWEN AND RACH
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 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:
46
"(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 Cones 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.
 LABOR MIDTERMS MAGIC NOTES!
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
by: OWEN AND RACH
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 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;
47
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.
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
 LABOR MIDTERMS MAGIC NOTES!
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
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
by: OWEN AND RACH
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
48
(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.
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
 LABOR MIDTERMS MAGIC NOTES!
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.
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-
by: OWEN AND RACH
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;
(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
49
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.
4.02 APPRENTICE
 LABOR MIDTERMS MAGIC NOTES!
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
by: OWEN AND RACH
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 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
50
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
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
 LABOR MIDTERMS MAGIC NOTES!
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;
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
by: OWEN AND RACH
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
persons. The State shall exert all efforts to
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 community based programs,
that will ensure full participation of different
51
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
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,
 LABOR MIDTERMS MAGIC NOTES!
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
(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
by: OWEN AND RACH
(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.
(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
52
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
 LABOR MIDTERMS MAGIC NOTES!
proof as certified by the Department of Labor and
Employment that disabled persons are under
their employ: Provided, further, That the disabled
employee is 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
by: OWEN AND RACH
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]
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
53
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 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
 LABOR MIDTERMS MAGIC NOTES!
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
by: OWEN AND RACH
knowledge of his employer or immediate
supervisor.
(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;
54
(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 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
 LABOR MIDTERMS MAGIC NOTES!
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.
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
by: OWEN AND RACH
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 calendar year.
55
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
 LABOR MIDTERMS MAGIC NOTES!
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 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.
by: OWEN AND RACH
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
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.
56
"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
 LABOR MIDTERMS MAGIC NOTES!
special training, experience or 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
employees actual working hours in the field can
be determined with reasonable certainty, query
must be made as to whether or not such
employees 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]
by: OWEN AND RACH
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 petitioners 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 vessels
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 concerned with the location but also
the fact that employees 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.
57
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.
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
 LABOR MIDTERMS MAGIC NOTES!
State Marine Corp v Cebu Seamens 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 laborers 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 companys 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 Radas 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 employers
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 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 petitioners employer, the private
respondent has unlimited access to all relevant
by: OWEN AND RACH
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
58
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 their posts on time.
Private respondents 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
 LABOR MIDTERMS MAGIC NOTES!
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
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
by: OWEN AND RACH
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.
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 oclock in the evening and six oclock in the
morning.
Rationale Prohibition
Shell Oil Co of the Phil Ltd v National Labor Union
[1948]
59
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 workers 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.
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
 LABOR MIDTERMS MAGIC NOTES!
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
by: OWEN AND RACH
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
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.
60
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.
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.
 LABOR MIDTERMS MAGIC NOTES!
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 or
calamity to prevent loss of life and property, or
imminent danger to public safety;
b. In cases of urgent work to be performed on
the machinery, equipment, or installation, 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
by: OWEN AND RACH 61
cannot ordinarily be expected to resort to other Book III, Rule IV, Omnibus Rules
measures; RULE IV: Holidays with Pay
d. To prevent loss or damage to perishable SECTION 1. Coverage. This rule shall apply
goods; to all employees except:
Where the nature of the work requires (a) Those of the government and any of the
continuous operations and the stoppage of work political subdivision, including government-
may result in irreparable injury or loss to the owned and controlled corporation;
employer; and (b) Those of retail and service establishments
e. Under other circumstances analogous or regularly employing less than ten (10) workers;
similar to the foregoing as determined by the (c) Domestic helpers and persons in the personal
Secretary of Labor and Employment. service of another;
(d) Managerial employees as defined in Book
Section 7: Conditions Of Employment Three of the Code;
Holidays (e) Field personnel and other employees whose
time and performance is unsupervised by the
Statutory Reference employer including those who are engaged on
task or contract basis, purely commission basis,
EO 203 PROVIDING A LIST OF REGULAR or those who are paid a fixed amount for
HOLIDAYS AND SPECIAL DAYS TO BE OBSERVED performing work irrespective of the time
THROUGHOUT THE PHILIPPINES AND FOR OTHER consumed in the performance thereof.
PURPOSES [1987]
Sec. 1. Unless otherwise modified by law, order SECTION 2. Status of employees paid by the
month. Employees who are uniformly paid by
or proclamation, the following regular holidays
the month, irrespective of the number of working
and special days shall be observed in this
days therein, with a salary of not less than the
country:
statutory or established minimum wage shall be
A. Regular Holidays
paid for all days in the month whether worked or
New Year's Day January
not.
Maundy Thursday Movable date
For this purpose, the monthly minimum wage
Good Friday Movable date
shall not be less than the statutory minimum
Araw ng Kagitingan (Bataan
wage multiplied by 365 days divided by twelve.
and Corregidor Day) April 9
Labor Day May 1
Independence Day June 12 SECTION 3. Holiday Pay. Every employer
National Heroes Day Last Sunday of shall pay his employees their regular daily wage
August for any worked regular holidays.
As used in the rule, the term 'regular holiday'
Bonifacio Day November 30
shall exclusively refer to: New Year's Day,
Christmas Day December 25
Maundy Thursday, Good Friday, the ninth of April,
Rizal Day December 30
the first of May, the twelfth of June, the last
B. Nationwide Special Days
Sunday of August, the thirtieth of November, the
All Saints Day November 1
twenty-fifth and thirtieth of December.
Last Day of the Year December 31
Nationwide special days shall include the first of
November and the last day of December.
Sec. 2. Henceforth, the terms "legal or regular
As used in this Rule legal or regular holiday and
holiday" and "special holiday", as used in laws,
special holiday shall now be referred to as
orders, rules and regulations or other issuances
'regular holiday' and 'special day', respectively.
shall now be referred to as "regular holiday" and
"special day", respectively.
SECTION 4. Compensation for holiday work.
Any employee who is permitted or suffered to
 LABOR MIDTERMS MAGIC NOTES!
work on any regular holiday, not 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 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 200% based on his regular
wage rate.
SECTION 5. Overtime pay for holiday work.
For work performed in excess of eight hours on
a regular holiday, an 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.
Where the regular holiday work exceeding eight
hours falls on the scheduled rest day of the
employee, he shall be paid an additional
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.
by: OWEN AND RACH
(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.
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
62
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 workers 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:
(a) Amun Jadid (New Year), which falls on the
first day of the first lunar month of Muharram;
 LABOR MIDTERMS MAGIC NOTES!
(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 Miraj (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
Years 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,
by: OWEN AND RACH
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 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 employees
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 employees 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
63
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
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;
 LABOR MIDTERMS MAGIC NOTES!
(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.
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
by: OWEN AND RACH
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 13th 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 complainants
service incentive leave pay.
Auto Bus Transport Systems v Bautista [2005]
B. PATERNITY LEAVE
RA 8187 Paternity Leave Act of 1996
SECTION 1. Short Title. - This Act shall be
known as the "Paternity Leave Act of 1996".
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
64
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
 LABOR MIDTERMS MAGIC NOTES!
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 (90%) of his
average daily salary credit, subject to the
following conditions:
"(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
by: OWEN AND RACH 65
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 days every year
shall be granted to any solo parent employee
who has rendered service of at least one (1) year.