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Part I Introductory Materials

Section 1. LABOR LAW IN GENERAL
1.1 LABOR LAW DEFINED :

The law governing the rights and duties of the employer and employees (1) with respect to the terms and conditions of employment and (2) with respect to labor disputes arising from collective bargaining respecting such terms and conditions 1. Labor Legislation – Consists of statutes, regulations and jurisprudence governing the relations between capital and labor by: a. providing for certain terms and conditions of employment or b. providing a legal framework within which these terms and conditions and the employment relationships may be • negotiated • adjusted and • administered. 2. Social Legislation – Includes all laws that provide particular kinds of protection or benefits to society or segments thereof in furtherance of social justice. In that sense, labor laws are necessarily social legislation. • promote public welfare

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LAW CLASSIFICATION
1. Labor Standards Law – That which sets out the minimum terms, conditions and benefits of employment that ER’s must provide or comply with and to which EE’s are entitled as a matter of legal right. Ex. 8-hour labor law 2. Labor Relations Law – That which defines [S R D & IM] • the status, rights and duties • and the institutional mechanisms that govern the individual and collective interaction of ER’s and EE’s or their representatives. Ex. Book V of Labor Code 3. Welfare Legislation – designed to take care of contingencies which may affect workers, e.g. where there is loss of income for research beyond the worker’s control. – BENEFITS * Social Security Law.

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HISTORY AND ORIGIN BASIS FOR ENACTMENT
1. Art. II, Sec.5, Const. : The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of general welfare are essential for the enjoyment by all the people of the blessing of democracy. 2. Art. II, Sec. 18, Const. : The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. 3. Art. XIII, Sec. I, Const. : 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 LAW 1(Labor Standards & Termination of Employment )

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* Labor and social legislation are enacted pursuant to the police power of the State. This is its inherent power to enact wholesome and reasonable laws to promote order, safety, health, morals and general welfare of society. In its exercise the state may interfere with personal liberty, with property and with business and occupation. (Calalang vs. Williams). * No longer may the due process clause and the freedom of contract be invoked to challenge labor and social legislation. This has long been discarded since the 1937 case of West Coast Hotel vs. Parish (US) and the 1924 case of Pp. vs. Pomar (RP). * Labor relation laws enable workers to obtain from their employers more than the minimum benefits set by labor standard laws

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LAW AND WORKER
The SC reaffirms its concern for the lowly worker who, often at the mercy of his ER, must look up to the law for protection. Fittingly, the law regards him with tenderness and even favor and always with hope in his capacity to help in shaping the nation’s future. It is an error to take him for granted. (Cebu Royal Plant vs. Deputy Minister of Labor)

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MANAGEMENT FUNCTION
Recognition

Deles v. NLRC (2000) However, petitioner loses sight of the fact that the right of an employer to regulate all aspects of employment is well settled. This right, aptly called management prerogative, gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. In general, management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers, pursuant to company rules and regulations. Limitations Great Pacific Employees Union v. Great Pacific Life Assurance It bears emphasis that the employer is free to regulate all aspects of employment according to his own discretion and judgment. This prerogative flowed from the established rule that labor laws do not authorize substitution of judgment of the employer in the conduct of his business. Recall of workers clearly falls within the ambit of management prerogative. The employer can exercise this prerogative without fear of liability so long as it is done in good faith for the advancement of his interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or valid agreements. It is valid as it is not performed in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite. Pantranco North Express, Inc. v. NLRC The State affords the constitutional blanket of rendering protection to labor, but it must also protect the right of employers to exercise what are clearly management prerogatives, so long as the exercise is without abuse of discretion.

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LABOR LAW 1(Labor Standards & Termination of Employment )
Bontia v. NLRC

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The rule is well settled that labor laws discourage interference with an employer's judgment in the conduct of his business. Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives As long as the company' s exercise of the same is in good faith in order to advance its interests and not for the purpose of defeating or circumventing the rights of the employees under the law or valid agreements, such exercise will be upheld. However, management prerogatives are not absolute but are subject to legal limits, collective bargaining agreements, or general principles of fair play and justice. And, while it is the special privilege of management to dismiss or lay off an employee, the exercise of that prerogative must be made without abuse of discretion, for what is at stake is not only the employee' s position but also his means of livelihood. Courts may, therefore, look into the employer' s exercise of a management prerogative if the same is clearly shown to be tainted with grave abuse of discretion, 15 ever mindful that, under the foregoing principles and the policy of the State, doubts should be resolved in favor of the disadvantaged employee. 1.7

COMPROMISE AND WAIVER

Article 227 Any compromise settlement, including those involving labor standards law, 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 therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through FRAUD, MISREPRESENTATION, OR COERCION. Rules Asian Alcohol Corp. v. NLRC It is true that this Court has generally held that quitclaims and releases are contrary to public policy and therefore, void. Nonetheless, voluntary agreements that represent a reasonable settlement are binding on the parties and should not later be disowned. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of the settlement are unconscionable, that the law will step in to bail out the employee. While it is our duty to prevent the exploitation of employees, it also behooves us to protect the sanctity of contracts that do not contravene our laws. More Maritime Agencies, Inc. v. NLRC In American Home Assurance Co. v. NLRC, this Court held: “The law does not consider as valid any agreement to receive less compensation that what a worker is entitled to recover nor prevent him from demanding benefits to which he is entitled. Quitclaims executed by the employees are thus commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the worker’s legal rights, considering the economic disadvantage of the employee and the inevitable pressure upon him by financial necessity.” Thus, it is never enough to assert that the parties have voluntarily entered into such a quitclaim. Golden Donuts, Inc. v. NLRC (2000) "A compromise, once approved by final orders of the court has the force of res judicata between the parties and should not be disturbed except for vices of consent or forgery." A compromise is basically a contract perfected by mere consent. "Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract." A compromise agreement is not valid when a party in the case has not signed the same or when someone signs for and in behalf of such party without authority to do so. 1.8

SOURCES OF LAW Sigma Rho ( ΣΡ ) reviewers
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Const. and pay for regular holidays. promote full employment. discontinued or eliminated by the employer. it constitutes the law between the parties (Fegurin v. National Labor Relations Commission) and in interpreting contracts. II. As a contract. provided they are not contrary to law. : The State recognized the role of the youth in nation-building and shall promote and protect their physical. Art. with respect to the other. Sec. Sec. and Article 100 of the Labor Code of the Philippines. The considerable length of time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its part. Const. public order. 9. Associated Labor Union From 1975 to 1981. : The State shall promote social justice in all phases of national development. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . II. Leogardo. Const. or public policy. 122 SCRA 267. Contracts which are not ambiguous are to be interpreted according to their literal meaning and should not be interpreted beyond their obvious intendment (Herrera v. Section 2. Article 1306 Civil Code The contracting parties may establish such stipulations. . No. LABOR AND THE CONSTITUTION 2.). diminished. Art. 2.D. II. which prohibit the diminution or elimination by the employer of the employees' existing benefits (Tiangco v. Art. And any benefit and supplement being enjoyed by the employees cannot be reduced.. the payments for sick. . NLRC The subject for interpretation in this petition for review is not the Labor Code or its implementing rules and regulations but the provisions of the collective bargaining agreement entered into by management and the labor union. and social wellbeing. ripened into benefits enjoyed by them. the rules on contract must govern. sufficient in itself to negate any claim of mistake. v. 3. by virtue of Section 10 of the Rules and Regulations Implementing P. 851. intellectual. and an improved quality of life for all.LABOR LAW 1(Labor Standards & Termination of Employment ) 1 2 Labor Code and Related Special Legislation Contract 4 Article 1305 Civil Code A contract is a meeting of the minds between two persons whereby one binds himself. A company practice favorable to the employees had indeed been established and the payments made pursuant thereto. Collective Bargaining Agreement Plastic Town Center Corp. petitioner had freely. moral. 10. voluntarily and continuously included in the computation of its employees' thirteenth month pay. to give something or to render some service. Past Practices Davao Fruits Corporation v. 13. good customs. vacation and maternity leaves. : The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services. clauses. Petrophil Corp. terms and conditions as they may deem convenient.1 CONSTITUTIONAL PROVISIONS 1. [1983]). spiritual. morals. premiums for work done on rest days and special holidays. Sec. Jr. a rising standard of living.

organized and unorganized. Art. Art. Art. The State shall regulate the relations between worker’s and ER’s. II. : The State affirms labor as a primary social economic force. Art. in the case of other farmworkers. Const. and disposition of property and its increments. XIII. : The State shall *afford full protection to labor. local and overseas. The State shall promote the principle of shared responsibility between workers and ER’s and the preferential use of voluntary modes in settling disputes. use. Art. XIII. . 3 (1st par). Sec. II. The present Constitution has gone further than the 1973 Constitution in guaranteeing vital social and economic rights to marginalized groups of society. 18. Sec.2 PROTECTION TO LABOR 1. and 3) peaceful and concerted activities including the right to strike in accordance with law. 11. Const. The framers of the Constitution intended to give primacy to the rights of labor and afford the sector “full protection” regardless of the geographical location of the workers and whether they are organized or not (Globe Mackay vs. ownership. Const. and political inequalities. including labor. : The State shall adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods. Art. : The State shall afford protection to labor. : The State shall. : The State recognizes the role of women in nation-building. The State may provide for compulsory arbitration. the State shall regulate the acquisition. XIII. undertake an agrarian reform program founded on the right of farmers and regular farmworkers. local and overseas. 1. 3. It shall guarantee the rights of all workers to 1) self organization. Const. 1935 Const. including conciliation. To this end. . : The State shall afford full protection to labor. Sec. It shall protect the rights of workers and promote their welfare. and shall ensure their fundamental equality before the law of women and men. 14. Sec. . 9. to receive a just share of the fruits thereof . 8. Sec. health and other social services available to all the people at affordable cost . Sec. expansion and growth. organized and unorganized. and *promote full employment and equality of employment opportunities for all . Sec. and shall regulate the relation between landowner and tenant. Const. XIII. . 5. 10. by law.LABOR LAW 1(Labor Standards & Termination of Employment ) 5 4. and shall enforce mutual compliance therewith to foster industrial peace. who are landless. : The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity. 7. . Art. Const. . 4. recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns in investment. 2. 6. 7 Cardinal Rights of Workers SC PT HL right to self-organization collective bargaining and negotiations peaceful concerted activities including the right to strike in accordance with law security of tenure humane conditions of work living wage participate in Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . reduce social. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. 2) collective bargaining and negotiations. and between labor and capital in industry and in agriculture. to win collectively or collectively the lands they till or. Const. XIII. economic. and remove cultural inequities by equitably diffusing wealth and political power for the common good. NLRC). and promote full employment and equality of employment opportunities for all. especially to working women and minors.

while protecting the rights of laborers. We can not give to the Act a meaning or intent that will conflict with these basic principles. NWPC (91) Apparently. Inc. 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. v. 6727 itself. it has not embraced fully the concept of laissez faire or otherwise. The purpose is to place the workingman on an equal plane with management . (3) the Charter urges Congress to give priority to the enactment of measures. Art. (2) the Constitution also makes it a duty of the State "to intervene when the common goal so demands" in regulating property and property relations. 6 Phil. 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. II. It shall protect the rights of workers and promote their welfare. NLRC The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. : The State affirms labor as a primary social economic force. (6) under Republic Act No. Inc.in negotiating for the advancement of his interests and the defense of his rights. Sec. Const. Geothermal. 6727 is meant to "get the Government out of the industry" and leave labor and management alone in deciding wages." (5) under the Labor Code. 2. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer.Union 2.with all its power and influence . collective labor . Phil. Airlines. collective capital . among other things. CUGCO) Employees Confederation of the Philippines v. ECOP is of the mistaken impression that Republic Act No.LABOR LAW 1(Labor Standards & Termination of Employment ) P policy and decision-making processes affecting their rights and benefits as may be provided by law. not only because the Constitution imposes such sympathy. Justitia nemini neganda est (Justice is to be denied to none). Const.management 3. to diffuse the wealth of the nation and to regulate the use of property. . : The State shall promote social justice in all phases of national development. does not authorize the oppression or destruction of the employer LAISSEZ FAIRE 1. v. Laissez faire or the principle of free enterprise never found full acceptance in this jurisdiction . Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . the State shall regulate the relations between labor and management. Three aggregates of power against which the individual employee needs protection 1. the State is interested in seeing that workers receive fair and equitable wages. . (ACCFA vs. 10. Under the policy of social justice. and although it has recognized the importance of the private sector. (4) the Charter recognizes the "just share of labor in the fruits of production. II. Sec. and (7) the Constitution is primarily a document of social justice. Art.3 LABOR SECTOR 1. 18. collective bargaining relationship * The law.4 POLICY CONSIDERATIONS – SOCIAL JUSTICE 1. Santos It is a fact that the sympathy of the Court is on the side of the laboring classes. but because of the one-sided relation between labor and capital. relied on pure market forces to govern the economy.

as in this case. nor anarchy. NASECO bent over backward and exerted every effort to help the petitioners look for other work. A] 1. R. At best it may mitigate the penalty but it certainly will not condone the offense.LABOR LAW 1(Labor Standards & Termination of Employment ) 7 Article XIII Section 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. and creation of economic opportunities based on freedom of initiative and selfreliance. P. what it guarantees are equality of opportunity. equality before the law. (Calalang vs. The unflagging commitment of this Court to the cause of labor will not prevent us from sustaining the employer when it is in the right. and remove cultural inequities by equitably diffusing wealth and political power for the common good. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. XIII. The employer cannot be compelled to retain employees it no longer needs. NLRC While it is true that compassion and human consideration should guide the disposition of cases involving termination of employment since it affects one's source or means of livelihood. What does social justice envision? It envisions [E. regulation of the acquisition. to be paid for work unreasonably refused and not actually performed. “Those who have less in life should have more in law” “Equal pay for equal wok” Phil. equitable diffusion of wealth and political power for the common good. but the humanization of laws and the equalization of social and economic forces so that justice in its rational and objectively secular conception may at least be approximated. use and disposition of property and its increments. E. and offered them a generous termination pay package. equality of political rights. (Guido vs. (PLDT vs. Alcantara) Definition [H. What does social justice guarantee? Social justice does not champion division of property of economic status. NLRC) Garcia v. Constitution. Sec. through the exercise of powers underlying the existence of all governments on the timehonored principle of salus populi est suprema lex. economic. b. and political inequalities. (Art. Article XIII. RPA) • • LIMITS OF USE * The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. and equitable sharing of the social and material goods on the basis of efforts exerted in their production. postponed the effective date of their separation. NLRC The constitutional policy of providing full protection to labor is not intended to oppress or destroy management. v. Williams) 2. the adoption of measures by the government to ensure economic stability of all the competent elements of society. Social justice is neither communism nor despotism. it should not be overlooked that the benefits accorded to labor do not include compelling an employer to retain the services of an employee who has been shown to be a gross liability to the Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . equality between values given and received. c. reduce social. 1 & 2. 2. ownership. nor atornism. Geothermal Inc. C] a. Section 2 The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. It means the promotion of the welfare of the people .

the hemorrhaging of capital. Rights to self-organization b. Right to peaceful and concerted Activities including the right to strike e." To hold otherwise would not only be oppressive and inhuman. the fundamental law itself guarantees. it is but a recognition of the inherent economic inequality between labor and management. Justitia nemini neganda est (Justice is to be denied to none). to put the two parties on relatively equal positions. EMPLOYER PROTECTION Asian Alcohol Corp. This favored treatment is directed by the social justice policy of the Constitution. XIII. the fundamental law also guarantees the right of the employer to reasonable returns from his investment. Right to just and humane Conditions of work g. Const. The right of management to dismiss workers during periods of business recession and to install labor saving devices to prevent losses is governed by Art. but also counterproductive and ultimately subversive of the nation's thrust towards a resurgence in our economy which would ultimately benefit the majority of our people. he could not have so acted. Where appropriate and where conditions are in accord with law and jurisprudence. Balbalec v. "the right of enterprises to reasonable returns of investment and to expansion and growth. But while titling the scales of justice in favor of workers. Right to collective bargaining c. It should be made clear that when the law tilts the scale of justice in favor of labor. or even to recognize an obvious reduction in the volume of business which has rendered certain employees redundant. 283 of the Labor Code. the Court has authorized valid reductions in the workforce to forestall business losses. In spite of overwhelming support granted by the social justice provisions of our Constitution in favor of labor. : [In the relation between workers and ER’s the following rights shall be assured by the State: a. at least to the extent of raising him to equal footing in bargaining relations with capital and to shield him from abuses brought about by the necessity for survival. NLRC (95) The law recognizes the right of every business entity to reduce its workforce if the same is made necessary by compelling economic factors which would endanger its existence or stability. even during the process of tilting the scales of social justice towards workers and employees. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. Harry Lyons) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Right to a living Wage h. this Court has inclined towards the worker and upheld his cause in his conflicts with the employer. The intent is to balance the scale of justice. (Sanchez vs. v. the law allows an employer to downsize his business to meet clear and continuing economic threats. It is safe to presume. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. therefore. Right to participate in policy and Decision-making processes (WACT BOND) * Only to those that affect the rights of employees and have repercussions on their right to security of tenure. this Court has upheld reductions in the work force to forestall business losses or stop the hemorrhaging of capital. Right to collective negotiations d. that an EE or laborer who waives in advance any benefit granted him by law does so. and hence. Sec. freely and voluntarily. certainly not in his interest or through generosity but under the forceful intimidation of urgent need.LABOR LAW 1(Labor Standards & Termination of Employment ) 8 employer. Thus.5 SPECIFIC LABOR RIGHTS * Art. NLRC Out of its concern for those with less privilege in life. 3. 2. Corollarily. Right to security of Tenure f. PROTECTION TO LABOR The law must protect labor.

on the other hand. Substantive due process mandates that an employee can only be dismissed based on just or authorized causes. Inc.disregarding rigid rules and giving due weight to all the equities of the case . v. Premiere Productions. XXX Well-settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due process in the dismissal of employees.6 OTHER RIGHTS 1. Const. Sec. quasi-judicial or administrative bodies. (Century Textile vs. He cannot be deprived of his work without due process of law. profession. Every man has a natural right to the fruits of his own industry. Jur. 333. Jur. and not necessarily that an actual hearing was conducted. in the case of Callanta v. and the wrongful interference therewith is an actionable wrong. 16. Const. DUE PROCESS REQUIREMENTS * The twin requirements of notice and hearing constitutes essential elements of due process in cases of EE dismissal: the requirement of notice is intended to inform the EE of the ER’s intent to dismiss and the reason for the proposed dismissal. A man who has been employed to undertake certain labor and has put into it his time and effort is entitled to be protected.. 1168.1171). He cannot be deprived of his labor or work without due process of law (11 Am. The requirement of a hearing. *** COMPASSIONATE JUSTICE . pp. The substantive and procedural laws must be strictly complied with before a worker can be dismissed from his employment because what is at stake is not only the employee’s position but his livelihood.. : All persons shall have the right to a speedy disposition of their cases before all judicial. pp. and (2) the employee must be given an opportunity to be heard and to defend himself. Art. Procedural due process requires further that he can only be dismissed after he has been given Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . NLRC) Maneja v. LABOR AS PROPERTY Phil. Art. XXX It bears stressing that a worker’s employment is property in the constitutional sense. 18 (2). trade or calling is a "property right". Sibal v. : No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted. Neither of these 2 requirements can be dispensed with without running afoul of the Constitution. is complied with as long as there was an opportunity to be heard. That is his means of livelihood. upon the other hand. (145 SCRA 268) . III.harshness of penalty also taken into account 9 2. Carnation Philippines. The right is considered to be property within the protection of a constitutional guaranty of due process of law. The right of a person to his labor is deemed to be property within the meaning of constitutional guarantees. The right to labor is a constitutional as well as a statutory right. 1151-1153. III. the requirement of hearing affords the EE an opportunity to answer his ER’s charges against him and accordingly to defend himself therefrom before dismissal is effected. section 344. Inc. Sec. Movie Workers Assn. Const. Sec.years of service without derogatory record taken into account . 10. It is a cardinal rule in our jurisdiction that the employer must furnish the employees with two written notices before the termination of employment can be effected: (a) the first apprises the employee of employer’s decision to dismiss him. Art. : No law impairing the obligation of contracts shall be passed.LABOR LAW 1(Labor Standards & Termination of Employment ) 2. NLRC The requisites of a valid dismissal are (1) the dismissal must be for any of the causes expressed in Article 282 of the Labor Code. 11 Am. Notre Dame of Greater Manila Thus. 3. this Court held that one's employment. II.

quoting Holden vs. v. Legislation appropriate to safeguarding said interests may modify or abrogate contracts already in effect. Phil. Rights [C P S T] 1. by the way. In spite of the constitutional prohibition.) Leyte Land Transportation Co. 283 of the Labor Code granted severance pay to workers who at the time of their employment were not entitled under the law to receive such pay. Right to prescribe rules 3. Elizalde Rope Workers Union It should not be overlooked. Right to transfer and discharge employees MANAGEMENT AND THE CONSTITUTION Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . safety and welfare are sacrificed or neglected. The whole is no greater than the sum of all the parts. xxx This has special application to contracts regulating relations between capital and labor which are not merely contractual." (West Coast Hotel Company vs. for being impressed with public interest. Parrish. Danao vs. Reservation of essential attributes of sovereign power is read into contracts as a postulate of the legal order. NLRC) such was the case when Art. and where the individual health. (Abella/Had. and said labor contracts. Children's Hospital) Victoriano vs. . All contracts made with reference to any matter that is subject to regulation under the police power must be understood as made in reference to the possible exercise of that power. or where the public health demands that one party to the contract shall be protected against himself. we are dealing here not with an ordinary transaction but with a labor contract which deserves special treatment and a liberal interpretation in favor of the worker ." it is sufficient to quote the following pronouncements of the United States Supreme Court: "The fact that both parties are of full age and competent to contract does not necessarily deprive the State of the power to interfere where the parties do not stand upon an equality. For not only are existing laws read into contracts in order to fix the obligations as between the parties. . expressly overrules the case of Adkins vs. " ** Employees have a vested and demandable right over existing benefits voluntarily granted to them by their employer. The import of due process necessitates the compliance of these two aspects. however reckless he may be. However. LIBERTY OF CONTRACT AND STATE INTERFERENCE * Legislation appropriate to safeguard to people’s vital interests may modify or abrogate contracts already in effect. Right to select employees 4.LABOR LAW 1(Labor Standards & Termination of Employment ) 10 an opportunity to be heard. the Constitution mandates the protection of labor and the sympathetic concern of the State for the working class conformably to the social justice policy . The State still retains an interest in his welfare. POEA Administrator 8 where We made the following pronouncement: "A strict interpretation of the cold facts before us might support the position taken by the respondents. Hardy. 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 . the State continues to possess authority to safeguard the vital interests of its people. however. NLRC The mandate of the law for a liberal interpretation of labor contracts in favor of the working man was applied in the case of Ditan vs. the State must suffer. xxx xxx xxx Under the policy of social justice. National Construction Corp. Leyte Farmers and Workers Union In answer to the contention of the petitioner that the doctrine laid down in the appealed decision in effect "has deprived the company of its rights to enter into contract of employment as it and the employee may agree. must yield to the common good. but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. (Id. . . . that the prohibition to impair the obligation of contracts is not absolute and unqualified. Right to conduct business 2. v. The former. MGT.

public order. But where it is shown that the person making the waiver did so voluntarily. NLRC) . and the consideration for the quitclaim is credible and reasonable. to be dispensed in the light of the established facts and the applicable law and doctrine.00 ECOLA. entered into a CBA providing for the withdrawal of the pending case of the association against the bank for non-payment of Php60.Waiver of future benefits is not valid and binding . (Olaybar vs. tendered his resignation after a spot audit found out that he had a tentative shortage of Php49. (Callanta vs. (Morales vs.The law does not consider as valid any agreement a. Out of its concern for those with less privileges in life. The threat was unjust Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . NLRC (93) While the Constitution is committed to the policy of social justice and the protection of the working class. WAIVER AND COMPROMISE * Not all waivers and quitclaims are invalid as against public policy * It is only when there is clear proof that the waiver was wangled an unsuspecting person. The affidavits executed voluntarily and knowingly in the presence of the Labor Arbiter has the effect and authority of res judicata. It is unbelievable that C. and with high education attainment. Management also has its own rights which. NLRC) 2. NLRC) Should a party fail or refuse to comply with the terms of a valid compromise or amicable settlement. C.005. to receive less compensation on what a worker is entitled to recover b. The consideration for the waiver is adequate. the transaction must be recognized as a valid and binding undertaking. Bank and EE’s association. A messenger with 5 years employment resigned and executed a quitclaim after being told by his manager to resign or else charges will be filed against him. Echiveri) Instances when quitclaim. can be rattled and confused into signing a resignation letter. occupying a responsible position. waiver or compromise invalid: 1. NLRC) 4. on account of a mere spot audit.59. this Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. MOLE) 3. waiver or compromise is valid: 1. (Alcantara) 2. good customs. or public policy. morals. The retirement and quitclaim was made under threat of dismissal. A number of EE’s made quitclaims in exchange for the dropping of charges of embezzlement of P25 million which the EE’s allegedly embezzled. Such favoritism. has not blinded us to the rule that justice is in every case for the deserving.LABOR LAW 1(Labor Standards & Termination of Employment ) 11 National Sugar Refineries Corp. with full understanding of what he was doing. or regard it as rescinded and to insist upon his original demand. a national promoter salesman. the other party could either enforce the compromise by a writ of execution. that the law will step in to annul the questionable transaction. or the terms of settlement are unconscionable on its face. with high educational attainment. There is nothing in the compromise which contravenes the law. (PBC vs. (Monte de Piedad vs.Voluntary consideration – not unconscionable . (Sicangco vs. however. A worker hospitalized for several times for work-related accidents was told by an immediate supervisor and a personnel officer to retire and execute a quitclaim or else would be dismissed and got nothing. workers executed a voluntary affidavit before the Labor Arbiter declaring intention to withdraw appeal in lieu of payment of severance pay. v. During pendency of appeal before the NLRC. to prevent him from demanding benefits to which he is entitled * Instances when quitclaim. are entitled to respect and enforcement in the interest of simple fair play. as such. it should not be supposed that every labor dispute will be automatically decided in favor of labor.

Such settlements must be approved by the labor arbiter before whom the case is being heard . After the CIR rendered a decision ordering the ER to pay wage differentials. (St. There was no consideration since the EE regularly contributed to the fund. according to his own discretion and judgments. NLRC) 3. place and manner of work 5. NLRC) 6. ( Pampanga Sugar Devt. NLRC) * Quitclaims are ineffective to bar recovery of the full measure of the worker’s rights * Dire Necessity is not an acceptable ground to annul releases unless there is showing that a. A quitclaim executed by an OFW repatriated to the Philippines because of an illness requiring surgical treatment in consideration of the return travel fund. Discipline. Right to select and discharge employees – with valid cause 2.800. It was clear that the worker was forced to accept the payment out of necessity. sell or close business MANAGEMENT RIGHTS. The quitclaim contravenes public policy since after a civil action is filed in court.00 disability benefits to worker. including: 1. which vitiated consent. Transfer of Employees 9. Hiring 2. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Except as limited by special laws. Besides. control company operations 6. There was intimidation. workers were forced to execute them b. NLRC) 7. the worker executed a quitclaim in exchange for Php18. re-clarify or abolish positions 8. promulgate reasonable employment rules and regulation 3. After the finality of judgment awarding them severance pay. install money-saving devices 7. During pendency of appeal. the cause of action may not be subject of compromise unless the same is with leave of court.) 5. The law does not consider valid any agreement to receive less compensation than what the workers should receive. (Cuales vs. Tools to be used and processes to be followed 6. Vs. Time. an employer is free to regulate. the quitclaim is negotiable and in congruous to the declared policy of the State to afford protection to labor and to assure the right of workers to security of tenure.(PISC vs. Lay-off of workers 11. the considerations for the quitclaims where unconscionably low MANAGEMENT PREROGATIVES 1. Sugar Workers Assn. (Guatson Tours vs. Supervision of workers 7. designation of work to employees 4. Work assignments 3. all aspects of employment.00 since at the time the worker needed money for medical treatment.LABOR LAW 1(Labor Standards & Termination of Employment ) 12 since the messenger did not commit any unlawful act. dismissal and recall of workers  Courts may look into the employers’ exercise of a management prerogative if it is clearly shown to be tainted with grave abuse of discretion. A quitclaim of future benefits made by an EE at the time of employment (Alcantara) 4. Working methods 4. the EE’s executed a quitclaim waiving their rights under the decision. Work Supervision 10. Working regulations 8. ER appealed the decision of the POEA awarding $3. transfer and promote employees 5. Gothard Pub vs.000. the workers executed a quitclaim before labor arbiter who had no participation in the case.

must at least be informed  13 The law explicitly considers it a State Policy “to ensure the participation of workers in decision and policy-making processes affecting their rights. LABOR AND THE CIVIL CODE 3. (PAL vs. collective bargaining.. v. Thus. However. there is no impairment of management prerogatives. What is granted by the Secretary is participation and representation. 1 ROLE OF LAW 1. Art. working conditions. And this can only be done when the Union is allowed to have representatives in the Safety Committee.not management prerogatives regarding business operation . Rule: cannot – right to privacy Exception: if job or occupation involve public safety Example:  bus drivers  security guards PARTICIPATION IN DECISION-MAKING PROCESS Only if it affects his [R. management should see to it that EE’s are at least properly informed of its decisions or modes of action. Therefore. Rights 2. NLRC In connection with the foregoing. They are so impressed with public interest that labor contracts must yield to common good. a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of EE’s. Quisumbing We do not find merit in MERALCO’s contention that the above-quoted ruling of the Secretary is an intrusion into the management prerogatives of MERALCO. strikes. wages. Duties 3. (Alcantara) May the ER be compelled to share with its EE’s the prerogative of formulating a code of discipline? Is a code of discipline unilaterally formulated by the ER enforceable? Yes.LABOR LAW 1(Labor Standards & Termination of Employment ) DRUG TESTING Gen. It is worthwhile to note that all the Union demands and what the Secretary’s order granted is that the Union be allowed to participate in policy formulation and decision-making process on matters affecting the Union members’ rights. 1700. Generally speaking. contracts are Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . LABOR CONTRACTS PAL Employees Savings and Loan Assn. we should add that even if there had been a meeting of the minds in the instant case. Certainly. Uniform Committee and other committees of a similar nature. NCC : The relation between capital and labor are not merely contractual.)  Manila Electric Co. NLRC) In this respect. Welfare . in treating the latter. Section 3. lockouts. such contracts are subject to special laws on labor unions. duties and welfare. closed shops. Inc. the employment contract could not have effectively shielded petitioner from the just and valid claims of private respondent. duties and welfare as required in Article 211 (A) (g) of the Labor Code. W]: 1. a legislation providing a worker’s representation in the Board of Directors of corporations is not valid since the constitutional guaranty does not include the worker’s right to participate in the management of the enterprise. such participation by the Union in the said committees is not in the nature of a co-management control of the business of MERALCO. (Id. the ER has the obligation to share with its EE’s its prerogative of formulating a code of discipline since this will be affecting their rights and benefits. hours of labor and similar subjects. v. A code of discipline unilaterally formulated and promulgated by the ER would be unenforceable. D.

LABOR LAW 1(Labor Standards & Termination of Employment ) 14 respected as the law between the contracting parties. terms. ultimately. public policy or public order. that is. the Civil Code provisions on the contract of labor state that the relations between the parties. the same should not be contrary to law. diligence and good conduct. and observe honesty and good faith. MOLE) MUTUAL OBLIGATION Firestone Tire and Rubber Co. v. Philippine Telephone and Telegraph Co.” And under the Civil Code. orals. clauses. it may even be said that petitioner’s policy against legitimate marital bonds would encourage illicit or common-law relations and subvert the sacrament of marriage. and conditions that they may deem convenient. but it likewise assaults good morals and public policy. disguised or dissembled forms as discriminatory conduct derogatory of the laws of the lands is not only in order but imperatively required. and they may establish such stipulations. In the final reckoning. ideals and purpose of marriage as an inviolable social institution and. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . NLRC) General Bank and Trust Co. of capital and labor. Court of Appeals Basically. 1701 : Neither capital nor labor shall act oppressively against the other. give everyone his due. and private respondent would still be entitled to overtime pay. However. the statute or some rule of law. terms and conditions as they may see fit. a privilege that by all accounts inheres in the individual as an intangible and inalienable right. and agreements voluntarily and fairly made will be held valid and enforced in the courts. or public policy. act with justice. of the family as the foundation of the nation. good customs. Hence. That it must be effectively interdicted here in all its indirect. and for as long as such agreements are not contrary to law. good customs. the provisions of said laws would prevail over the terms of the contract. nor impair the interest or convenience of the public. contracts of labor are explicitly subject to the police power of the State because they are not ordinary contracts but are impressed with public interest. they shall have the force of law between them.. Inasmuch as in this particular instance the contract in question would have been deemed in violation of pertinent labor laws. while it is true that the parties to a contract may establish any agreements. the general right to contract is subject to the limitation that the agreement must not be in violation of the Constitution. It goes on to intone that neither capital nor labor should visit acts of oppression against the other. morals. impressed as they are with so much public interest that the same should yield to the common good. the danger of just such a policy against marriage followed by petitioner PT&T is that it strikes at the very essence. are not merely contractual. (AHS Phils.. or impair the convenience of the public. FAIR TREATMENT * The NCC states that every person must in the exercise of his rights. 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. v. tending as it does to deprive a woman of the freedom to choose her status. 3. public order. v. “… while it is the inherent an inalienable right of every man to have the utmost liberty of contracting. NLRC Petitioner’s policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment. Parenthetically.2 ER-EE STANDARD OF CONDUCT * Art. vs. (Remerco Garments Manufacturing v. Lariosa The employer's obligation to give him workers just compensation and treatment carries with it the corollary right to expect from the workers adequate work. Carried to its logical consequences. and in the performance of his duties. It must not be oppressive and abusive since it affects one's person and property.

including EE’s of GOCC’s shall be governed by the Civil Service Law. Until and unless the rules or orders imposed by the ER are declared to be illegal or improper by competent authority. Const. it does not constitute a violation of the right against involuntary servitude.LABOR LAW 1(Labor Standards & Termination of Employment ) LAW COMPLIANCE 15 * The return-to-work order in this case not so much confers a right as it imposes a duty and while as a right it may be waived. apply alike to all workers. including GOCC’s with original charters. 3 APPLICABILITY 1. IX-B. 2(1).2 EFFECTIVITY * Art. (SMC vs. THE LABOR CODE OF THE PHILIPPINES 4. 276 : The terms and conditions of employment of all government of all government EE’s. While the EE may be held liable for damages by virtue of the breach of contract. unless shown to be grossly oppressive or contrary to law. Tuico) This is differentiated from the instance where there is a mere breach of contractual stipulation. 1 : “Labor Code of the Philippines” 4. or non-agricultural. generally binding and valid on the parties and must be complied with until finally revised or amended unilaterally or preferable through negotiation or by a competent authority. defiance of management authority by the EE’s cannot be countenance. Thus. 3. 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. except as many otherwise be provided. 6 : All rights and benefits granted under this Code shall. ER OBLIGATION * An EE must not be treated as a disdained subordinate but with respect and fairness. Art. Sanchez) PCIB v. 2 : 6 months after its promulgation. (Lagniton vs. it must be discharged as a duty even against a worker’s will. Ubaldo) Deliberate disregard or disobedience of rules. if not affection and gratitude due to an equal partner. NLRC An employer can terminate the services of an employee only for valid and just causes which must be supported by clear and convincing evidence. (Alcantara) EE OBEDIENCE AND COMPLIANCE ER ORDERS * It is a recognized principle that company policies and regulations are. Sec. (Sarmiento vs. NLRC) Maneja v. TEST-GOCC Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . the employee must suffer the consequences of his negligence if not lack of due care in the performance of his duties. the EE’s ignore or disobey them at their own peril. Failure to do so results in a finding that the dismissal was unjustified. Failing in this. Section 4. whether agricultural. 2.1 DECREE TITLE * Art. Art. then he may not be held personally liable for any damage arising therefrom. (GTE Directories vs. The measure of the responsibility of an employee is that if he performed his assigned task efficiently and according to the usual standards. he may not be compelled to work against his will because this will be involuntary servitude. The employer has the burden of proving that the dismissal was indeed for a valid and just cause. Art. : The Civil Service embraces all branches of Government. Jacinto Any employee who is entrusted with responsibility by his employer should perform the task assigned to him with care and dedication. 4.

adopted by the Senate on May 17. categorically includes religious institutions in the coverage of the law.N. in its coverage. the test in determining whether a governmentowned or controlled corporation is subject to the Civil Service Law are the manner of its creation. With this clear mandate. is comprehensive enough to include religious corporations.4 IMPLEMENTING RULES Art. particularly. v. LIMITATION –RULE MAKING POWER Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . (Cabrera vs. NLRC An ecclesiastical affair is “one that concerns doctrine. NLRC) PNOC Energy Development Corp. religious doctrines. 1949. whether operated to profit or not. under the present state of the law. This is made more evident by the fact that the Rules Implementing the Labor Code. INTERNATIONAL AGENCIES Ebro III v. NLRC Thus. medical. the cited article does not make any exception in favor of a religious corporation. Rule 1. charitable and religious institutions and organizations. NLRC The grant of immunity is by virtue of the Convention on the Privileges and Immunities of Specialized Agencies of the U. and the power of excluding from such associations those deemed unworthy of membership. including educational. Coverage. Article 278 of the Labor Code on post-employment states that “the provisions of this Title shall apply to all establishments or undertakings. an ecclesiastical affair involves the relationship between the church and its members and relate to matters of faith. 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. Based on this definition. SCHOOL TEACHERS National Mines and Allied Workers’ Union v NLRC On the issue of whether the individual petitioners were permanent employees. RELIGIOUS CORPORATIONS Austria v. such as the SDA. the provision which governs the dismissal of employees. 5: Implementing rules and regulations of the DOLE and other government agencies of the Code shall become effective * 15 days after announcement of their adoption in newspapers of general circulation. worship and governance of the congregation.LABOR LAW 1(Labor Standards & Termination of Employment ) 16 * The rule now is that only the GOCC’s with original charters come under the Civil Service Law. 4. to wit: SECTION 1. Section 1. creed or form of worship of the church.” Obviously. in cases of regular employment with the exception of Government and its political subdivisions including government-owned or controlled corporations. XXX Under the Labor Code.This Rule shall apply to all establishments and undertakings. Book VI on the Termination of Employment and Retirement. it is the Manual of Regulations for Private Schools. and not the Labor Code. which is applicable. or the adoption and enforcement within a religious association of needful laws and regulations for the government of the membership. . whether for profit or not. the SDA cannot hide behind the mantle of protection of the doctrine of separation of church and state to avoid its responsibilities as an employer under the Labor Code. This has become part of the law of the land under the Constitution on generally accepted principles of international law.

Unduly expanded the concept of “basic salary”. Such rules and regulations must conform to the terms and standard prescribed in the statute. will except EE’s paid by the month from the enjoyment of the holiday pay benefit. which is in consonance with the avowed policy of the State to give maximum aid and protection to labor. shall be resolved in favor of labor. collective bargaining. 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. all labor legislation and labor contracts shall be construed in favor of the safety and decent living of the laborer. 2. (MERALCO vs. race or creed Regulate the relations between workers and ER’s. including its implementing rules and regulations. 3: The State shall (APERA) 1. Examples of void IRR’s:  IRR providing the 10-day period specified in Art. in excess of its rule-making authority is void.  The implementing rule must be subordinate to the laws itself  An implementing rule cannot change the law 4. 4.6 LAW INTERPRETATION 1. In effect. Art. 1702. This power is limited to the promulgation of rules and regulations to effectuate policies of the Code. Afford protection to labor Promote full employment Ensure equal work opportunities regardless of sex. 223 refers to working days as stated in the article. 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 including its implementing rules and regulations shall be resolved in favor of labor.LABOR LAW 1(Labor Standards & Termination of Employment ) 17 1. Art." 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. wittingly or unwittingly. 2. SOLE) IRR including commission in the computation of 13 th month pay. (Azucena) 2.  An IRR providing that EE’s paid by the month shall be presumed to be paid for all days in the month. 3. NCC : In case of doubt. (Insular Bank EE Union vs. security of tenure. LIBERAL CONSTRUCTION Salinas v. 4 : All doubts in the implementation and interpretation of the provisions of this Code. the workingman's welfare should be the primordial and paramount consideration.5 POLICY DECLARATION Art. and just humane conditions of work. the content or meaning of the law which the rule aims to implement. IN FAVOR LABOR-RATIONALE Abella v. Assure the rights of workers to self-organization. to implement a law. They cannot supplant its plain and explicit command. Inciong) IRR of RA 6715 excluding security guards from those allowed to join unions . (Boie-Takeda vs. such as the DOLE. 5. De La Serna)    The rule making power is exceeded when the implementing rule changes. 4. NLRC Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . whether worked or not. (Alcantara)  A rule or regulation promulgated by an administrative body.

but that care and solicitude can not 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. the sympathy of the Court is on the side of the laboring classes.7 ENFORCEMENT AND SANCTIONS 1. (Manning vs. that in the contest between labor and capital. except as otherwise provided. The Court must take care. Inc v NLRC As a general rule. It should not be deduced that the basic policy is to favor labor to prejudice capital. (4). v. (3). (Bravo vs. 4. not only because the Constitution imposes sympathy but because of the one-sided relation between labor and capital. the results achieved are fair and in conformity with the rules. (Bonifacio vs. Art. (PAL vs. (Azucena) Phil. NLRC (1992) That there should be care and solicitude in the protection and vindication of the rights of workingmen cannot be gainsaid. The interpretation herein made gives meaning and substance to the liberal and compassionate spirit of the law enunciated in Article 4 of the 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. GSIS) NO DOUBT * The provision in case of doubt does not apply where the pertinent provisions of the Labor Code leave no room for doubt either in their interpretation or application. BALANCING CONFLICTING CLAIMS * The basic policy of the law is to balance or to coordinate the rights and interests of both workers and ER’s.LABOR LAW 1(Labor Standards & Termination of Employment ) 18 It is basic and irrefragable rule that in carrying out and interpreting the provisions of the Labor Code and its implementing regulations. however. EEC) FACTUAL CONSIDERATION AND RATIONALITY * The care and solitude in the protection and vindication of the right of workingmen cannot justify disregard of relevant facts or schewal of rationality in the construction of the text of applicable rules in order to arrive at disposition in favor of an EE. Airlines. (6) : Jurisdiction of Labor Arbiters and the Commission The Labor Arbiters shall have exclusive and original jurisdiction. NLRC) EQUITY AND MORAL CONSIDERATION * Considerations of equity and social justice cannot prevail against the expressed provisions of labor laws. Inc. NLRC) FAIRNESS Reliance Surety and Insurance Co. lest it engages itself in judicial legislation. GSIS) SWEEPING INTERPRETATION * The Supreme Court cannot also adopt a sweeping interpretation of the law.” DOUBT * When these are 2 or more possible explanations regarding an issue affecting worker’s rights. the workingman’s welfare should be the primordial and paramount consideration. that which favors the worker must be chosen. (Clemente vs. 217 (a) (2). the following cases involving all workers: (unfair labor practice) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .

and b.LABOR LAW 1(Labor Standards & Termination of Employment ) 19 1. including . through summary proceedings and after due notice.  Within 24 hours. Social Security. * Order Stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance poses grave and imminent danger to the health and safety of workers in the workplace. if accompanied with a claim for reinstatement (including claims of OFW’s arising out of an ER-EE relationship. Accesss to ER’s records and premises at anytime of the day or night whenever work is being undertaken therein and copy thereform. the power to issue Compliance Orders to give effect to the labor standard provisions of this Code and other social legislation. Except claims for EE’s Compensation. raises issues supported by documentary profits which were not considered in the course of inspection. arising from the ER-EE relations. 129. 3. all other claims. as provided in Sec. exemplary and other damages arising from the ER-EE relations. Cases involving terms and conditions of employment. he shall pay EE’s their EE’s their salaries or wages during said period. Medicare and maternity benefits. 5. involving an amount exceeding Php5. (AS CONES) 3. Termination disputes (qualified by Art. moral. except in cases: a. 128 : Visitorial and Enforcement Power of the Secretary of Labor or his duly authorized representative. 261 which grant voluntary arbitrators original and exclusive jurisdiction over all unresolved grievances arising from CBAs and company personnel policies). moral and exemplary damages. a hearing shall be conducted to determine whether an order for the stoppage of work and suspension of operations shall be lifted or not. Art. Recovery of wages. impede. be subject to Summary dismissal from the service. 1. * Any government EE found guilty of violation. including claims for actual.those of persons in domestic or household service. * The Secretary of Labor may require ER’s to keep and maintain Employment records as may be necessary. Art. 10.  Writs of execution to the appropriate authority shall be issued for the enforcement of the said orders. delay or otherwise render ineffective the order of the Secretary of Labor. * The Regional Director of the DOLE or any of the duly authorized hearing officers of the Department is empowered. and 3. where the ER contests the findings of the labor employment and enforcement officer. * It shall be unlawful for any person to Obstruct. 264 including legality of strikes and lockouts 2. Migrant Workers Act). to hear and Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . regardless of whether of whether accompanied with a claim for reinstatement. 2. 4. simple money and other benefits. Question any EE. after appropriate administrative investigation. condition or matter which may be necessary to determine violations of this Code of any labor law. * No inferior court shall issue a temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders in accordance with this Article.000.  In case the violation is attributable to the fault of the ER. Claims for actual. Disputes arising from Art. wage order or rules and regulations issued pursuant thereto. 2. Investigate any fact. * In cases where the relationship of ER-EE still exists.

or unless the acts complained of hinges in a question or interpretation or implementation of ambiguous provisions of an existing CBA. partnership. . 292 : Money claims specified in Art. any violation of this Code declared to be unlawful or penal in nature shall be punished with: a fine not less than P1. 290. association.LABOR LAW 1(Labor Standards & Termination of Employment ) 20 decide any matter involving the recovery of wages and other monetary claims and benefits. Art.     b. Art. subdivisions and instrumentalities. (b) “ER” includes any person acting directly or indirectly in the interest of the ER in relation to an EE and shall include the Government and all its branches. 97 (a) and (b) : “Person” means individual.. firm. emergency. substitute or contractual. employing the services of the EE. Art. 4. 289 : The penalty (of the offenses listed in the Labor Code) shall be imposed upon the guilty officer of officers of a corporation. Except. Any criminal offense punished under this Code shall be under the concurrent jurisdiction of the MTC and the RTC. and any person employed as casual. or imprisonment of not less than 3 months nor more than 3 years. 291shall be filed before the appropriate entity independently of the criminal action that may be instituted in the proper courts. .00. Or both such fine and imprisonment at the discretion of the court. as otherwise provided in the Code.00 * The complaint shall be resolved within 30 days from the date of the filing of the same. temporary. association pr entity which committed said offenses. business trust.000. including legal interest owing to a person employed in domestic or household service: Provided  such complain does not include claim for reinstatement  aggregate money claims of each househelper does not exceed P5. (g) “EE” means any person compulsory covered by the GSIS .All money claims arising from ER-EE relations accruing during the effectivity of this Code – 3 years from the time the cause of action is accrued. Section 5. or organizations. trust. partnership. Art. Prescription of Offensses * Offenses penalized under this Code and the IRR’s – 3 years.00 nor more than P10. natural or juridical. 6. Pending the final determination of the merit of money claims filed with the appropriate entity. 291 : Prescription of Money Claims. 1 WORK RELATIONSHIP ER and EE 1. . 8. or any organized group of persons. including members of the AFP. Art. legal representative. all GOCC’s and institutions. Art. * Unfair labor practice – 1 year from accrual of such unfair labor practice. Art.000. as well as non-profit private institutions. . 288 : Penalties and Jurisdiction a. no civil action shall be filed with any court. 7.000. 2. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . corporation. or any person compulsory covered by the SSS. 5. 167 (f) and (g) : (f) “ER” means any person.  This provision shall not apply to EE’s compensation cases which shall be processed and determined strictly in accordance with the pertinent provisions of this Code. WORK RELATIONSHIP 5. In addition to such penalty any alien found guilty shall be summarily deported upon completion of service of service.

Art. 212 (e) and (f) : “ER” includes any person acting in the interest of the ER directly or indirectly. implement and control strategic and operational policies (top and middle managers) and those whose task is simply to ensure that such policies are carried out by the rank-and-file employees of an organization (first-level managers/supervisors). who compose the former group described above. unless this Code explicitly states. (Villaluga vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 21 3. labor contracts being in personam. managers. substitute 6. "Managerial employees" may therefore be said to fall into two distinct categories: the "managers" per se. It shall include any individual whose work has ceased as a result or in connection with any current labor dispute or because of unfair labor practice if he has not obtained any other substantially equivalent or regular employment. Power to control the EE’s conduct Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . a distinction exists between those who have the authority to devise. CLASSIFICATION 1. regular 3. thus binding only between parties. Labor contracts are not enforceable against a transferee of an enterprise. likewise. are. NLRC) The existence of an ER-EE relationship is a question of law and cannot be made the subject of agreement The nature of ones business is not determined by self-serving appellations one attaches thereto but by the tests provided by statute and prevailing case law  A decision in a certification election case regarding the existence or non-existence of ER-EE relationship does not foreclose all further disputes between the parties as to the existence or non-existence of an ER-EE relationship. vis-avis employers. B. The term shall not be limited to the EE’s of a particular ER. The existence of ER-EE relationship is determined by the following elements namely: a. DETERMINATION In determining whether the relationship is that of ER and EE or one of independent contractor. employees. 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. each case must be determined on its own facts and all the features of the relationship must be considered. Payment of Wages c. The term shall not include any labor organization or any of its officers except when acting as an ER. Power of Dismissal. Selection and engagement of the EE’s b. and d. and the "supervisors" who form the latter group. EMPLOYEE United Pepsi-Cola Supervisory Union (UPSU) v. emergency 4. casual 2. Whether they belong to the first or the second category. A. (f) “EE” includes any person in the employ of an ER. Laguesma As can be seen from this description. temporary 5. FACTORS 1. contractual Is the purchaser of the assets of an ER corporation considered a successor ER of the latter’s EE? No.

S must have been done by her pursuant to a contract of agency. (SSS vs. how much to load and where. PRC has direct control over the handling of the copra. The company does not exercise any degree of control or supervision over his work. Yes. No. manner of carrying out their services. had an agreement with TWS to act as “branch manager. etc. stitchers and similar workers employed by COD on a piece-work basis. No. pilling or palleting empty bottles and wooden shells from company trucks and warehouses. Trajano) * Vendees of cigarettes who are governed by the regulations of the vendor company i. * Piece workers subject to specifications. recording of attendance etc… Furthermore.e. NLRC) * The power of control refers merely to the existence of the power and not the actual exercise thereof. They did not exercise independence in their own methods. weekly and monthly reports. either as to hours of work or method of accomplishing the work. on where to store the copra. NLRC) * Tailors. The worker’s conduct in the performance of their work was controlled by the company (Rosario vs. unloading. (Sevilla vs. a master cutter distributes job orders equally. time to report to fishing port. The EE’s are governed by the company’s regulations i. The club did not have the measure of control over the incidents of the caddy’s work and compensation that the ER would possess. etc… Yes. (Rosario Brothers vs. when to bring out. seamstresses and other workers of a haberdashery who were paid on a piece-rate basis. but on the contrary were subject to the control of the establishment from the beginning of their task to their completion. * Caddies who are not under the control and supervision of the golf club as to working hours. and what class of copra to handle. S was not subject to the control by TWS. The former was entitled to a percentage of the net profits of the company for that period. holding herself solidarily liable for the prompt payment of rentals. Ople) No particular form of evidence is required to prove the existence of an ER-EE relationship. (Makati Haberdashery vs. ER gives orders to G. and that she would share in the expenses of maintaining the office. supervises the work and sees to it that they were finished as soon as possible. (Manila vs. (BLUM vs. Yes. NLRC) * Fishermen-crew of a trawl fishing vessel subject to control and supervision of the owner of the vessel i. No. IAC) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . (Dy Koh Beng vs.e. CA) * A plant manager hired by a marble company which was about to close in a few month’s time due to business losses. Ople) * Cargadores and pahinantes recruited by SMC through a labor contractor who are governed by the regulations of the SMC whose work consisted of loading. The shoe shiner is a partner in trade. The equipment used is owned by PRC. requirement to submit daily. The services rendered by I.e. They also had to rely on the tools and equipment supplied by the haberdashery. They were required to finish jobs orders in one day before due date. NLRC) 2. Yes. pressers. I. (Ruga vs. The company had no control over the former. Yes. The fact that the making of the basket is subject to Dy’s specifications indicates the existence of control. Yes. The control test is satisfactorily met. a prominent social figure. Any competent and relevant evidence to prove the relationship may be admitted (Opulencia vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 22 although the latter (d) is the most important element. ILMU) * Tailors. She was also a signatory to a lease agreement covering the branch’s premises. Yes. Manager was merely a party to a joint venture. 8-hour workday. No. CA) *I. definite sales territory. The agreement provided that she would be entitled to a part of the commission on sale of tickets. (CMC vs. S. They were directed by the proprietor of the establishment as specified by the customers. Vendor company had control over the vendee. (Besa vs. etc. Is there an ER-EE relationship? Workers under a pakiao agreement arranged by G whom PRC considered as an independent contractor. The evidence firmly establishes the control exercised by the SMC. conduct of fishing operations. Zamora) * Shoe shiners who had their own customers but shared proceeds with company.

NLRC The argument has no merit.employee relationship. (Ruga vs. Bautista) * Jeepney drivers working under the boundary system. which aim only to promote the result. AS this Court has consistently ruled. The presence of the school director. the power of control is the most decisive factor in determining the existence of an employer . ECONOMIC TEST Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . D. control of employee’s conduct is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. but also the manner and means to be used in reaching that end. NLRC) The line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired results without dictating the means or methods employed in attaining it. Yes. not is it essential for the ER to actually supervise the performance of the EE . which he can delegate.Refers to the existence of the power and NOT necessarily the actual exercise thereof.LABOR LAW 1(Labor Standards & Termination of Employment ) 23 * College teachers. (Insular Life vs. The driver does not have any interest in the business because he did not invest anything in the acquisition of jeeps and did not participate in the management thereof. therefore. no basis in finding that petitioner had a “greater degree of autonomy ad independence in running the affairs” of the school. create no ER-EE relationship unlike the second. Nor is there any merit in the claim that “actual and effective control” was exercised by petitioner since the designation of the parish priest as director was “a mere formality.It is enough that the employer has the right to wield the power Religious of the Virgin Mary v. Inc. In this case. although the letters of appointment were signed by the principal/representative of petitioner. (2) payment of wages. Under the control test.not petitioner’s . (Dy Keh Beng) POWER OF CONTROL . CONTROL TEST There is an ER-EE relationship where the ER controls or has reserved the right to control the EE not only as the result of the work but also as to the means by which said work is to be accomplished (Paradise vs. NLRC. (Citizen’s League of Free Workers vs.” Indeed. Yes. an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved.appears in the employees’ payroll ledger cards. that it prescribes the courses or subjects that they teach and the time and place for teaching. as he did perform functions which are purely ministerial and figurative in nature. they bore the name/letterhead of CDSPB and clearly indicated therein that the employees were hired as teachers/personnel by CDSPB. Although CDSPB “actually exercised minimal supervision over petitioner. whose vast powers have already been noted. CDSPB reserved the right to control and supervise the operations of the Girls’ Department. v. negates any suggestions or semblance of autonomy. The Court takes judicial notice that a university controls the work of the members of its faculty.” Time and again we have held that “the ‘control test’ only requires the existence of the right to control the manner of doing the work not necessarily the actual exercise of the power by him. The test merely calls for the existence of the right to control the manner of doing the work not the actual exercise of the right. NLRC) The control test calls merely for the existence of the right to control and manner of doing work. [it]could exercise substantial supervision and control as it did when [it] preterminated the Agreement. CDSPB itself admits that its name . Ng).). (3) power of dismissal. Moreover. and those that control or fix the methodology and bind or restrict the party hired to the use of such means. In Encyclopedia Britannica (Phils. (Feati vs. which addresses both the result and the means to achieve it. The first . and (4) the power to control the employees’ conduct.” There was. Of the above. and not by RVM. not the actual exercise of the right. we held: In determining the existence of an employer-employee relationship the following elements must be present: (1) selection and engagement of the employee. Abbas) C.

This is clear from the use of the conjunction “or”. Art. For. (Tabas vs. The test of supervisory status as we have repeatedly ruled is whether an employee possesses authority to act in the interest of his employer. 5. etc. In determining the status of the management contract. v NLRC (96) It is wrong to say that if a task is not directly related to the employer's business. The determination of the existence of an employer-employee relationship is defined by law according to the facts of each case. Ltd. 106 : Contractor or subcontractor a) Whenever an ER enters into a contract with another person for the performance of the former’s work. or it falls under what may be considered "housekeeping activities." the one performing the task is a job contractor.2 INDEPENDENT CONTRACTOR AND LABOR CONTRACTOR ONLY 1. v. what determines the nature of employment is not the employee’s title. among others With respect to the first requirement. the ER shall be jointly and severally liable with his contractor or subcontractor to such EE’s to the extent of the work performed under the contract. if any shall be paid in accordance with the provisions of this Code. Inc. b) There “labor-only” [considered as agent] contracting where: 1. v. in the same manner and extent that he is liable to EE’s directly employed by him.).LABOR LAW 1(Labor Standards & Termination of Employment ) 24 1. regardless of the nature of the activities involved. equipment. it cannot be made the subject of an agreement. the EE’s of the contractor and of the latter’s subcontractor. the "four-fold test" on employment earlier mentioned has to be applied. NATURE/CHARACTER Dunlop Slazenger (Phils. The person supplying workers to an ER does not have  substantial capital  [substantial] investment in the form of tools. AGREEMENT * The existence of an ER-EE relationship is a question of law and being such. equipment. Secretary. machineries. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . The workers recruited and placed by such persons are performing activities which are directly related to the principal business of such ER. the law does not require both substantial capital and investment in the form of tools. the employment status of a person is defined and prescribed by law and not by what the parties say it should be. work premises. EFFECT OF RELATIONSHIP Philippine Fuji Xerox Corp. (Sevilla vs. DOLE (98) Determining the status of supervisory and rank-and-file employees is not a hard row to hoe in labor law. but his job description. machineries. The absence of ER-EE relationship may be determined through economic tests like the inclusion of the EE in the payrolls. 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. having irregular compensation and having a personal stake in the business. CMC) Insular Life Assurance Co. In the event that the contractor or the subcontractor fails to pay the wages of his EE in accordance with this Code. (Neri vs. NLRC) 2. NLRC) E. Corollarily. which authority should not be merely routinary or clerical in nature but requires the use of independent judgment.

Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the ER who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. and * The workers recruited and placed by such person are performing activities which are directly related to the principal business or operations of the ER in which the workers are habitually employed. Sec. machineries. when a contractor fails to pay the wages of his EE’s. firemen. IRR’s : Job Contracting – There is job contracting permissible under the Code if the following conditions are met: (INDEPENDENT CONTRACTOR) 1. (Guarin vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 25 With respect to the second requirement. the ER who contracted out the job to the contractor becomes jointly and severally liable with his contractor to the EE’s of the latter “to the extent of the work performed under the contract” as if such ER were the ER of the contractor’s EE’s. in order to ensure that the latter get paid the wages due them.” The law in effect holds both the ER Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . according to his own manner and method d. job or project. (c) For cases not falling under this Article. Rule VIII. however. hired helpers and similar workers are considered directly related to the operations of a company since this is necessary to the proper maintenance of the premises and machineries as well as the protection of the company premises against fires. not being an ER. though not limited. Sec. the Secretary of Labor shall determine through whether or not the contracting out is permissible in the light of the circumstances of each case and after considering the operating needs of the ER and the rights of the workers involved. contracts with an independent contractor for the performance of any work. Art. [substantial] investment in the form of tools. they shall be considered direct ER’s. mechanics. work premises. 8. the ER becomes bound by statutory requirements pertaining. 109 : Every ER or indirect ER shall be held responsible with his contractor or subcontractor for any violation of the provisions of this Code. This time. work premises and other materials. for a comprehensive purpose: “ER for purposes of this Code. IRR’s : (a) Any person who undertakes to supply workers to an ER shall be deemed to be engaged in labor-only contracting where such person : * Does not have  substantial capital  [substantial] investment in the form of tools. (Phone-Poulenc vs. 1. 9. A similar situation obtains where there is a “labor-only” contracting. association or corporation which. the service provided by janitors. For purposes of determining the extent of their civil liability under this Chapter. Book III. Rule VIII. equipment.  Where the ER-EE relationship has become ascertained. NLRC) In such cases. establishes an ER-EE relationship between the ER and the job contractor’s EE’s for a limited purpose i. and other materials which are necessary in the conduct of his business. partnership. Book III. labor relations and post employment. Art. 4. to terms and conditions of employment. substantial capital or b. free from the control and direction of his ER or principal in all matters connected with the performance of the work except as to the results thereof. 107 : Indirect ER – The provisions of the immediately preceding Article shall likewise apply in any person. machineries. on his own account b. under his own responsibility c. and 2. 2.e. to prevent any violation or circumvention of any provision of this Code. The law itself. the person intermediary shall be considered merely as an agent of the ER who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. The contractor carries on an independent business and undertakes the contract work [A R M . NLRC) Nonetheless. The contractor has a. 3.F] a.

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. Factors to Determine existence of Independent Contractor Relationship: 1. As we have previously held. Court of Appeals (98) 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. ii)The contractor or subcontractor has substantial capital or investment. (Mafinco vs. and social and welfare benefits. 7. equipment. free exercise of the right to self-organization. 8. security of tenure. NLRC (99) Under DOLE Department Order No. 5. whether the work is part of the ER’s general business. work or service on its own account and under its own responsibility. 10 (1997). firing and payment of salaries. according to its own manner and method. v. Quisumbing (99) Additionally. NLRC (2000) In contrast. 6. and (b) the contractor has substantial capital or investments in the form of tools. contracting shall be legitimate if the following circumstances concur: i) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job. (PBC vs. Escario v. work premises and other materials which are necessary in the conduct of his business. the duty to supply premises. the skill required. rather. the control and supervision of the work and the ER’s powers with respect to the hiring. 2. there is permissible job contracting when a principal agrees to put out or farm out with a contractor or a subcontractor the performance or completion of a specific job. We recognize that contracting out is not unlimited. the nature and extent of the work.LABOR LAW 1(Labor Standards & Termination of Employment ) 26 and the “labor only” contractor responsible to the latter’s EE’s for more effective safeguarding of the EE’s rights under the Labor Code. The Labor Code and its implementing rules also contain specific rules governing contracting out (Department or Labor Order No. and iii)The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards. v. the terms and duration of the relationship. NLRC) INDEPENDENT CONTRACTOR National Power Corp. MANAGEMENT FUNCTION Manila Electric Co. it is a prerogative that management enjoys subject to well-defined legal limitations. what exists is a “labor only” contract under which 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. and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. 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. tools and appliances.INDEPENDENT CONTRACTOR Lim v. Ople) REQUIREMENTS . machineries. whether the contractor is carrying on an independent business. Absent these requisites. Sections 1-25). 3. the right to assign the performance of the work to another. work or Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 1997. 4. May 30. the company can determine in its best business judgment whether it should contract out the performance of some of its work for as long as the employer is motivated by good faith. 10.

tools. and (j) the mode. regardless of whether such job or work or service is to be performed or completed within or outside the premises of the principal. it is evident that petitioner was engaged in permissible job contracting and that the individual private respondents.. v. (h) the control of the premises. were employees not of petitioner but of STELLAR. DESIRABLE . free from the control and direction of his employer or principal in all matters connected with the performance of his work except as to the results thereof. the following conditions must concur: (a). NLRC et al. this Court ruled that in order to be considered an independent contractor it is not enough to show substantial capitalization or investment in the form of tools. Airlines.The contractor has substantial capital or investment in the form of tools.EMPLOYEE Phil. v.” In this respect.. appliances. Inc. (f) the control and supervision of the workers.. In this situation. In this arrangement.LABOR LAW 1(Labor Standards & Termination of Employment ) 27 service within a definite or predetermined period. NLRC (99) We perceive at the outset the disposition of the NLRC that janitorial services are necessary and desirable to the trade or business of petitioner Coca-Cola. we deemed them unnecessary in the conduct of the employer’s principal business. materials. although janitorial services may be considered directly related to the principal business of an employer. equipment. Sec. the following factors need be considered: (a) whether the contractor is carrying on an independent business. as with every business.. [RULES TO IMPLEMENT THE LABOR CODE.. manner and terms of payment. (d) the term and duration of the relationship.The contractor carries on a distinct and independent business and undertakes the contract work on his account under his own responsibility according to his own manner and method. 8. v.UNNECESSARY Coca-Cola Bottlers Phil. NLRC (98) From the foregoing disquisition.” In this respect. and other materials which are necessary in the conduct of his business. 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.] In the recent case of Alexander Vinoya vs. But this is inconsistent with our pronouncement in Kimberly Independent Labor Union v. as with every business. This judicial notice. and labor. (c) the skill required. EMPLOYER . (b) the nature and extent of the work. 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. (i) the duty to supply premises. although janitorial services may be considered directly related to the principal business of an employer. 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. firing and payment of workers of the contractor.. machineries (sic).. no employer- Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . In legitimate job contracting. Inc. NLRC (99) We perceive at the outset the disposition of the NLRC that janitorial services are necessary and desirable to the trade or business of petitioner Coca-Cola. of course. work premises. 280 of the Labor Code. Rule VIII. 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 employeremployee relationship between the contractor and the worker. Inc. (e) the right to assign the performance of specified pieces of work. equipment.. for the entire duration of their employ. machinery and work premises. and (b).. But this is inconsistent with our pronouncement in Kimberly Independent Labor Union v. In addition. (g) the power of the employer with respect to the hiring. JUDICIAL NOTICE Coca-Cola Bottlers Phil. we deemed them unnecessary in the conduct of the employer’s principal business. Book III.

is supplied by the factory with a delivery truck and all expenses for repairs are borne by the factory. the agents were not required to report to work. Besides. (APL vs. Under the circumstances. use of authorized receipts. ** Examples of Independent Contractor: * Commission agent : IPC Company entered into agreement with registered representatives who worked on a commission basis. shall obtain the necessary licenses and permits and bear the expenses incurred in the sale of the soft drinks. SSS) * Dealership : A contract whereby one engages to purchase and sell soft drinks on trucks supplied by the manufacturer but providing that the other party (peddler) shall have the right to employ his own workers. (IPC vs. (Mafinco vs. and a payment of a lump sum to the agency who in turn paid the compensation of the individual watchmen. The terms and conditions of their services are matters determined not by SHIPSIDE but by La Union. It is also sufficiently established that La Union exercised supervision and control over its labor force. hires and assigns the work of the watchmen. in legal contemplation are mere requests since the privity of contract lies between the workers and La Union. and submission of report of all collections at least once a week). and he shouldered his transaction services. Lastly. The principal is responsible to the job contractor's employees only for the proper payment of wages. and that they were paid on a commission based on a certain percentage of sales. the agent was not required to observe office hours or to report to Singer except for remitting his collections. it stands to reason that the company does not exercise any power or control over the watchmen’s conduct. ( Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . the termination for certain causes.00. However. such instructions. But in labor-only contracting.000. is responsible alone for any violation of the law. monthly collection quota. receives no commission but given a discount for all sales. the guards were not known to the shipping company for it dealt directly with the agency. the Court has already taken judicial notice of the general practice adopted in several government and private institutions of securing janitorial services on an independent contractor basis.e. on matters. however. the guards cannot be considered EE’s of the shipping company. an employer-employee relation is created by law between the principal and the labor-only contractor's employees. He did not have to devote his time exclusively for Singer and the manner and method of collection were left solely to the discretion of the agent. since the company has to deal with the agency. sells the product at the price agreed upon between the parties. sends his orders to the factory plant. It is the security agency that recruits. pertaining to the contracted task. cash bond.LABOR LAW 1(Labor Standards & Termination of Employment ) 28 employee relation exists between the principal and the job contractor's employees. The powers to dismiss lies with the agency. NLRC) * Collection Agency : Singer entered into a “collection agency agreement” with collectors providing among others that the collector is to be considered at all times to be an independent contactor. to devote their time exclusively for the company. It is the wages to which the watchman is entitled. and posts a surety bond of not less than P10. Director of Labor Relations) * Security Agency : Shipping company entered into an agreement with a security agency wherein the security agency was responsible for the hiring and assignment of the guards. and not with the individual watchmen. to account for their time nor submit a record of their activities. NLRC) Another dealership agreement wherein the dealer: handles the products in accordance with existing laws and regulations. (SHIPSIDE vs. as if he or she had directly employed them. The records do not show any participation on the part of SHIPSIDE with respect to the selection and engagement of the individual stevedores. for the causes of termination have no relation to the means and methods of work. While SHIPSIDE occasionally issued instructions to the stevedores. and his services can be terminated in case of failure to satisfy these regulations. While the agents were subject to a set of rules and regulations governing the performance bond. Clave) * Stevedoring Services : SHIPSIDE entered into a “Contract for Services” with La Union providing among others that the latter would furnish all labor needed for stevedoring work in piers controlled by the former. The fact that for a certain specified causes (failure to meet annual quota) the relationship may be terminated does not mean such control exists. he was required to comply with certain rules and regulations (i. such that the former is responsible to such employees. The net balance of the stevedoring charges will be divided equally among the parties. (La Suerte vs. shall post a bond to protect the manufacturer against losses shall be responsible for damages caused to third person.

NLRC (2000) Labor-only contracting. supplies or places workers to perform a job. in turn. that a person who supplies workers to another shall be deemed to be merely engaged in "labor-only contracting. He accepted business from other companies. supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. capitalized at P1 million fully subscribed and paid for provided janitorial and other services to various firms. NLRC (98) As labor-only contracting is prohibited. a prohibited act. (Rhone-Poulene vs. He was not controlled by Shell with regard to the manner in which he conducted the test. He was paid a lump sum for the work he and his men accomplished. (Neri vs. It did not. Inc. BCC is the ER of the two. (b) The employees recruited. of the Omnibus Rules Implementing Article 106 of the Labor Code. It hired A and B and assigned them to work for FEBTC. EFFECT OF FINDING Phil. NLRC) BCC. The guidelines in the job description were laid down merely to ensure the desired result was achieved." a disallowed act. Applying the control test. It furnishes its janitors the cleaning equipment. CA) LABOR CONTRACTOR ONLY PROHIBITION Maraguinot v. the following elements are present: (a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job. CSI was a registered service contractor and did business with a number of known companies in the country.LABOR LAW 1(Labor Standards & Termination of Employment ) 29 * Messengerial/Janitorial Services : Janitors were hired by CSI and assigned to La Union Carbide. and their salaries drawn only from BCC. They drew their salaries from CSI. is an arrangement where the contractor or subcontractor merely recruits. Rule VIII. (a) when he does not have substantial capital or investment in the form of tools. however. machineries. work or service for a principal. their leave of absences were filed directly with BCC. FEBTC however issued a job description which detailed the functions of two. Furthermore. Vinoya v. 9(a). CSI exercised control over them through a SCI EE who gave orders and instructions. CSI had the power to assign its janitors to various clients and pull them out. it had substantial capital. the law considers the person or entity engaged in the same a mere agent or intermediary of the direct employer. Airlines. NLRC (98) Sec. the associate producers of VIVA cannot be considered labor-only contractors as they did not supply. NLRC) * Repair and Maintenance Service : F doing business. equipment. and (b) when the workers recruited and placed by him perform activities that relate directly to the principal business or operations of the employer in which the workers are habitually employed. v. Such supplier of labor is considered merely as an agent or intermediary of the employer who can correspondingly be held responsible to the workers in the same manner and extent as if the latter are directly employed by him. The two reported for work wearing the prescribed uniform of the BCC. REQUISITES Ponce v. NLRC (98) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . In labor-only contracting. Book III. provides. (Pilipinas Shell vs. was hired by Shell to conduct a hydropressure test. work or service under its own account and responsibility. recruit nor hire the workers. Moreover. But even by the preceding standards. He utilized his own tools and equipment. It maintains its own office and had its own office equipment. tell how the work should be performed. work premises and other materials.

The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job. CESI in turn paid them and their names are not included in the PBC’s payroll. and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. the jobs were done in the premises of the motor shop. janitors. (Vallum Security vs. As we held in Industrial Timber Corporation. contracting shall be legitimate if the following circumstances concur: 1. 10 (1997). A and his men were paid lump sum. Services Enterprises is merely a "labor-only" contractor who acted as mere supplier of manpower for petitioner at its maintenance department. the line of workautomobile painting – was directly related to. there is no ER-EE relationship between the two and LS shall have exclusive direction in the selection. machineries and materials and moreover. they must be accorded security of tenure in their employment. (PBC vs. Verily. vs. CESI cannot be considered a job contractor because its undertaking is not the performance of a specific job. Instances of Labor-Only Contracting (declared prohibited by DO#3) * Agency hiring : PBC and CESI entered into an agreement under which the latter undertook to supply the former with 11 messengers. The agreement between the two provided that LS shall provide NP with workers. 283 and 284 of the Labor Code. private respondents. the bank. mechanics to NP. free exercise of the right to self-organization. Their wages were paid directly by Hyatt and their assignments. al.ONLY CONTRACTING: 1. the company supplied the tools. work or service on its own account and under its own responsibility. LABOR . and CESI would in fact withdraw such messenger. A undertook to supply labor and supervision in the performance of automotive body painting work. machineries. in the form of tools. their services can be terminated only based on "just" and "authorized" causes under Articles 282. (Broadway Motors vs. The agreement provided that the messengers would remain EE’s of CESI. The security guards filled up Hyatt employment application forms and submitted the forms to the Security Department of the hotel. PBC remitted to CESI amount equivalent to the wages of the messengers. security of tenure. if not an integral part of the regular business of the motor shop. among others. work premises. NP shall pay LS a fee based on rates fixed by the agreement. equipment. And as regular employees. Aside from the fact that the company exercised control and direction over the work done by A and his men.: Hence a finding that a contractor is a "labor-only" contractor is equivalent to a finding that there exists as employer-employee relationship between the owner of the project and the employees of the "labor-only" contractor since that relationship is defined and prescribed by law itself. (Guarin) * Security Guard Hiring : Hyatt and VSS entered into a contract of services wherein VSS agreed to protect the properties and premises of Hyatt by providing security guards. NLRC et. and the messengers performed their functions within the bank’s premises. equipment. having performed activities which are directly related to petitioner's business. al. Accordingly. NLRC) LS provided helpers. promotions.LABOR LAW 1(Labor Standards & Termination of Employment ) 30 Based on these findings. private respondents. supervisions and dismissal were approved by the Chief Security Officer of Hyatt. 3. INDEPENDENT CONTRACTING: Under DOLE Department Order No. and social and welfare benefits. according to its own manner and method. engagement and discharge of its personnel and the latter shall be within is full control. The contractor or subcontractor has substantial capital or investment. et. The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards. and 3. NLRC) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . LS is a “labor-only” contractor since it is merely an agent to procure workers for the real ER. it merely undertook to provide the bank with a certain number of persons able to carry out the work of messengers. 2. NLRC) Under the Work Contract between A and a motorshop. the person supplying workers to an employer does not have substantial capital or investment 2. a corporation engaged in garment manufacturing. are deemed regular employees of petitioner pursuant to Article 280 of the Labor Code.C. Further. the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. we sustain the conclusion of public respondent that G. are considered employees of the petitioner. in cases of dismissal would request CESI.

f. 13 (e) : “Private recruitment entity” – any person or association engaged in the recruitment and placement of workers. B. To facilitate a free choice of Available employment by persons seeking work in conformity with national interest. To strengthen the network of public employment offices and rationalize the participation of the private sector in the Recruitment and placement of workers. (AFP MARC) 6.1 ALLOWED PRIVATE AGENCIES AND ENTITIES * Art. to serve national development objectives. IRR’s – No person or entity shall engage in the recruitment and placement of workers either for local or overseas employment except the following: [allowed agencies] 1. directly or indirectly. ALLOWED ENTITIES B.LABOR LAW 1(Labor Standards & Termination of Employment ) Section 6. To regulate the employment of Aliens.2 Agency * Art. other than the public employment offices. 12 : Statement of Objectives – It is the policy of the State: 31 RECRUITMENT AND a. To promote and maintain a state of Full employment through improved manpower training.3 Entity * Art. Worker * Art.2 EMPLOYMENT AGENCIES Private Sector-Agencies and Entities A. 13 (a) “Worker” – any member of the labor force. AND AGENCIES 6. shall engage in the recruitment and placement of workers. Rule III. locally and overseas. e. To facilitate and regulate the Movement of workers in conformity with national interest. d. without charging. 1. b. PLACEMENT OF WORKERS. Art. Book I. To protect every citizen desiring to work locally or overseas by securing for him the best possible terms and conditions of employment. g. locally or overseas. from the workers or ER’s or both. POEA 3. To issue careful selection of Filipino workers for overseas employment in order to protect the good name of the Philippines abroad. 16 : Except as provided in Chapter II of this Title.1. allocation and utilization. 1 EMPLOYMENT POLICIES 1. c. public employment agencies 2. 13 (c) : “Private fee-charging employment agency” – any person or entity engaged in the recruitment or placement of workers for a fee which is charged directly or indirectly. private recruitment entities 4. any fee from the workers or the ER’s or both. no person or entity. Sec. PARTIES A. private employment agencies Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . A. EMPLOYMENT POLICIES. whether employed or unemployed A. including the establishment of a registration and/or work permit system.

CITIZENSHIP. Rule V. locally and overseas. 29 : Non-tranferability of License or Authority * No license or authority shall be used directly or indirectly by any other person other than the one in whose favor it was issued. 18 : Ban on Direct Hiring – No ER may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. Not disqualified 3. Capitalization c. 32 *Art.LABOR LAW 1(Labor Standards & Termination of Employment ) 5. 26 : Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment. Art. and 6.1 LICENSING. Art. 2. Art. Direct hiring by members of the diplomatic corps. B. the private employment sector shall participate in the recruitment and placement of workers. 2. . rules and regulations as may be issued by the Secretary of Labor. 15 (a) 2 : (a) The Bureau of Employment Services shall be primarily responsible for developing and monitoring a comprehensive employment program. 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. partnerships or entities at least 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. International organizations and such other ER’s as may be. Exceptions to the Exception: a. 1. GOVERNMENT TECHNIQUES OF REGULATION – PRIVATE RECRUITMENT AND PLACEMENT BUSINESS C. IRR’s : Qualification of Applicants for Private employment agencies – All applicants for licenses to operate private employment agencies either for local or overseas recruitment and placement shall possess the following qualifications: a.2 PROHIBITED BUSINESS AGENCIES AND ENTITIES 1. DURATION. 4. Art. appointment or designation of any agent or representative including the establishment of additional offices everywhere shall be subject to the prior approval of the DOLE. TRANSFERABILITY AND FEES 1. b. 28 : Capitalization – Substantial capitalization as determined by the Secretary of Labor. Art. C. Allowed by the Secretary of Labor is exempted from this provision. Only Filipino citizens or b. 25 : . conveyed or assigned to any other person or entity. It shall have the power and duty: 2) To establish and maintain a registration and/or licensing system to regulate private sector participation in the recruitment and placement of workers. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 27 : Citizenship Requirement: a. Citizenship requirement b. (P1 M) Sec. Only corporations. c. * Any transfer of business address. under such guidelines. such other persons or entities as may be authorized by the Secretary. locally or overseas. . locally or overseas. shipping or manning agents or representatives. CAPITALIZATION. Art. Book I. whether for profit or not. or * at any place other than that stated in the license of authority * nor such license or authority be transferred.

while a “license” is the document issued to a person or entity to operate a private employment agency. rules and regulations. revoked or suspended for violation of the Labor Code or its IRR’s. testimony. [includes the act of furnishing fake employment documents to a worker. or make a worker pay any amount greater than that actually received by him as a loan or advance. 2. domestic helpers – 50% 6. entity license or holder of authority: (any of these acts constitutes illegal recruitment accdg. separation from job. seaman – 80% 2.3 WORKERS FEES * Art. Such fee shall be always covered with the appropriate receipt clearly showing the amount paid.  An agreement that changes the employee’s pay and benefits to make them lesser than those contained in a POEA-approved contract is void UNLESS such subsequent agreement is approved by the POEA. The purpose of bonds is to insure that if the rights of these overseas workers are violated by their ER’s recourse would still be available to them against the local companies that recruited them for the foreign principal. wages. 2. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . information or document or commit any Act of misrepresentation for the purpose of securing a license of authority under this Code. Art. construction worker – 70% 3. professional without board and lodging – 50% 5. Art.2 BONDS 1. and other employment data. he has actually commenced employment.5 PROHIBITED PRACTICES [IF FAITS CHOW] 1. directly or indirectly.LABOR LAW 1(Labor Standards & Termination of Employment ) 33 5. any amount greater than that specified in the schedule of allowable fees. 34 : Prohibited Practices – It shall be unlawful for any individual. 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. C.A. details of job requisitions. or 2. professional workers with free board and lodging – 70% 4. (Stronghold vs. 33 : Whenever the public interest requires. To charge or accept. CA) C. What is the duration of a license recruit? A license is valid for a period of 2 years from the date of issuance unless sooner cancelled. (Azucena) 3. To give any false notice. and terms and conditions of employment as appropriate. 32 : Any person applying with a private fee-charging employment agency for employment assistance shall not be charged any fee until 1. To furnish or publish any false notice or information or document in relation to recruitment or employment. other terms and conditions. The Secretary of Labor shall promulgate the schedule of allowable fees.4 REPORTS SUBMISSION * Art. Percentage of salary remittance 1. * non-tranferrable C. 8042) 1. Distinguish authority from license? “Authority” means a document issued by the Secretary of Labor and Employment authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. other workers – 50% C. 13) 6. to R. (Art. he has obtained employment through its efforts. 31 : 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.

Hiring or g. It is the lack of the necessary license or permit. 34 of the Labor Code. 11. STC. she was made to work as a housemaid. a travel agency. 13 (b) : “Recruitment and Placement” . 9. 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 so designed to liberate the worker from oppressive terms and conditions of employment. Upon arrival in the place of employment. Transporting e. contracts services. Includes referrals. To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency. If Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 2. She was recruited under false pretense. placement vacancies. Guevarra (99) Recruitment for overseas employment is not in itself necessarily immoral or unlawful. To become an officer or member of any corporation engaged in Travel agency or to be engaged directly or indirectly in the management of a travel agency. promising or advertising for employment. Violation of Art. To obstruct or attempt to obstruct inspection by the secretary of Labor or by his duly authorized representatives. 8. offers or promises for a fee employment to 2 or more persons shall be deemed engaged in recruitment or placement. remittance of foreign exchange earnings. What advice will you give her? I will advice the Filipina to commence a criminal action against the employment agency for violation of Art. 6. NLRC). whether for profit or not. Procuring workers and h. (Alcantara) C. was recruited by a local private employment agency for a tutoring job abroad. To Withhold or deny travel documents from applicant workers before departure for monetary or financial consideration other than those authorized under this Code and its implementing rules and regulations. the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment or placement. an essential ingredient of the act of recruitment or placement.LABOR LAW 1(Labor Standards & Termination of Employment ) 34 4.Act of [CEC-TUHPI] a. Illegal recruitment is qualified into large scale recruitment when three or more persons are victimized. 10. (Vir-Jen vs. 34 (d) and (f) of the Labor Code. (Pp vs. [The number of persons dealt with is not. Five women who left for Hongkong were later brought to prostitution houses. (Alcantara) 3. The provision 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. A. or the engagement of prohibited activities enumerated in the Labor Code that render such recruitment activities unlawful or criminal.B. 5. Utilizing f. departures and such other matters of information as may be required by the Secretary of Labor. Contracting d. Have the officers of STC committed any unlawful acts? Yes. 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. This only creates a presumption]  The number of persons dealt with is not the basis in determining whether or not an act constitutes recruitment and placement. Filipina. 7. Canvassing b. locally or abroad. in any manner.6 ILLEGAL RECRUITMENT 1. Enlisting c. To substitute or alter employment contracts approved and verified by the DOLE from the time of actual signing thereof by the parties up to and including the period of expiration of the same without the approval of the Secretary of Labor Unless it is to improve the terms and conditions of employment. Art. To Fail to file reports on the status of employment. any of the acts mentioned in 13b will constitute recruitment and placement even if only one prospective worker is involved. Provided: That any person or entity which. separation from jobs. 26 and Art. Panis) [N. People v. advertised for young women to work as domestic helpers in Hongkong.

to be undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable under Art. 4. These cases cannot be taken into account for the purpose of Art. it becomes one committed by a syndicate. 8." it must be understood as referring to the number of complainants in each case who are complainants therein. Reyes (95) There are.full reimbursement fees + 12% OR . enterprise or scheme. 14 other cases filed/pending in the courts against the accused for illegal recruitment. * 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 Art. Illegal recruitment in large scale – Committed against 3 or more persons individually or as a group. 2. 34 of this Code. People v. 10 RA 8042) > premature termination w/o lawful or valid ground . §4. Any recruitment activities. and Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .life imprisonment Illegal recruitment by a syndicate – Carried out by a group of 3 or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction. the appellant can only be found guilty of the less serious offense charged. pursuant to Rule 120. including the prohibited practices. prosecutions for single crimes of illegal recruitment can be cumulated to make out a case of large scale illegal recruitment. In other words.all claims and liabilities that may arise in connection with the implementation of the contracts  Private employment agencies are held jointly and severally liable with foreign-based employer. Moreover. Migrant Workers Act : A criminal action arising from illegal recruitment as defined herein shall be filed with the RTC of the province or city where the offense was committed or where the offended party actually resides at the time of the commission of the offense: provided.00). 3. That the offender is a non-license or non-holder of authority to lawfully engage in the recruitment and placement of workers. When the Labor Code speaks of illegal recruitment "committed against three (3) or more persons individually or as a group. 39 hereof. Illegal termination (Sec. a conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. punishable by life imprisonment and a fine of one hundred thousand pesos (P100. 39 of this Code. . even if Blanza and Garcia had been illegally recruited so as to make the number of persons illegally recruited four and make the crime that of illegal recruitment of a large scale. Sec.000. The crime of illegal recruitment has 2 elements: a. That the court where the criminal action is first filed shall acquire jurisdiction to the exclusion of other courts.joint and solidary with employer .LABOR LAW 1(Labor Standards & Termination of Employment ) 35 such recruitment is 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. it is said.non-bailable . otherwise.salaries for unexpired portion or 3 mos for every year of unexpired term whichever is lower Liability of private employment agency – employment contract . Illegal recruitment committed by a syndicate or in large scale amounts to an offense involving economic sabotage. 38(b). since this was not alleged in the information and this is the more serious offense which includes that which was charged. enumerated under Art.

(Pp vs. Is this legal? No. It was from her that they learned about the fees they had to pay. as well as the papers that they had to submit.7 RULE MAKING * The Secretary of Labor and Employment has the power and authority not only to restrict and regulate the recruitment and placement activities of all agencies but also promulgate rules and regulations to carry out the objectives and implement the provisions governing said activities. that they could be employed for France for a fee. (Alcantara) 7. without charging additional fees. This is clearly an act of referral. and yet recruit at least 3 persons. 5. G convinced F and S. Turda) Furthermore. engaged in recruitment activities. A paper manufacturing company in Cainta would like to know if it needs to obtain a license authority before it can recruit workers for its plant. As such. the Court ruled: Hence. It is recruiting its own workers. 8 ENFORCEMENT 1. 13 (b) of the Labor Code or any of the prohibited practices enumerated under Art. G was also able to persuade A that he could give A a working visa. the evidence show that she was the one who approached complainants and prodded them to seek employment abroad. 36 : 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.) 6. Meris (2000) In People v. Contact services are activities that fall within the scope of recruitment and placement of workers. It was through her that they met Julia Micua. Worse. Although accused-appellant was not an employee of the alleged illegal recruiter Julie Micua. (Eastern Assurance vs. She was therefore.LABOR LAW 1(Labor Standards & Termination of Employment ) 36 b. (Alcantara) C. the inevitable query is whether or not appellant Agustin merely introduced complainants to the Goce couple or her actions went beyond that. it is not recruiting workers to be employed by others. 34 of the same Code. Art. All four prosecution witnesses testified that it was Agustin whom they initially approached regarding their plans of working overseas. Only persons or entities with appropriate license or authority can engage in recruitment and placement of workers. REFERRALS People v. No license or authority is necessary. The company is not engaged in the business of recruitment and placement of workers. as she was actually making referrals to the agency. Secretary of Labor) C. It was after they had talked to her that they met the accused spouses who owned the placement agency. The testimonial evidence hereon show that she indeed further committed acts constitutive of illegal recruitment. Suffice it to say that complainants' recruitment would not have been consummated were it not for the direct participation of accused-appellant in the recruitment process. accused-appellant declared that she was capable of placing them in jobs overseas. The same factual circumstance obtains in this case. a national union of teachers was able to find jobs abroad for its member by directly contacting other teachers organizations in foreign countries. NATO. Nothing happened to F. S and A. That the offender undertakes any of the recruitment activities defined under Art. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . It does not represent a principal. Agustin. the Court concluded that appellant that appellant was an employee of the Goce spouses. G did not have any license to recruit or authority to recruit? A may be charged and convicted of a large-scale illegal recruitment since he did not have the license or authority to recruit. he can also be convicted and charged of estafa since the latter is a malum in se while the former is a malum prohibium (Id.

IRR’s : Pending investigation of the complaint or report. The principal or agency has to advance the air transport fare and immediately repatriate the worker. and (qq). 1995 pursuant to Section 36 of RA 8042. or in excess of what is legally allowed. Rule VI. (z). “Contract Worker” . Art. c. books of account and records of any person or entity covered by this Title. require it to submit records regularly on prescribed forms.Any person working or who has worked overseas under a valid employment contract. In no case shall an employment agency require any bond or cash deposit from the worker to guarantee performance under the contract of his/her repatriation. rules and regulations. the principal or agency my recover the cost of repatriation from the worker after return to the country. b. 2. “Manning agency” – Any person or entity recruiting seamen for vessels plying international waters and fore related maritime activities. 3. Such a claim must be brought before the regular courts. the POEA shall notify the OWWA to advance the repatriation cost with recourse to the agency or principal. Protect the rights of Filipino workers to fair and equitable recruitment and employment practices and ensure their welfare. d. 2. and of the worker to refund the cost should be stipulated in every contract for overseas employment. without determining the cause of termination of employment. If the cause of the termination is due solely to the fault of the worker. Definition of Terms Sec. (ff). 1 (j). 37 : The Secretary or his duly authorized representatives may. Formulate and implement in coordination with appropriate entities concerned. or violation of the conditions for issuance of license or authority to recruit workers. EMPLOYMENT OFFICES AND THE POEA 1. . If the principal or agency does not comply with its obligation. Sec. EO 247 : POEA functions a. NLRC)  POEA has the power to order refund or reimbursement of fees fraudulently or illegally collected. 2. 2. including his or her remains and personal effects. (w). Such obligation of the principal/agency to advance the plane fare. as needed. Rule II. a system for promoting and monitoring the overseas employment of Filipino workers taking into consideration their welfare and the domestic manpower requirements. belongs to the principal or the agency that recruited or deployed the worker. Rules and regulations on Overseas Employment – 1. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 14 (a) : The Secretary of Labor shall have the power and authority: (a) To organize and establish new employment agencies in addition to the existing employment offices under the DOLE as the need arises.LABOR LAW 1(Labor Standards & Termination of Employment ) 37 Sec. The cause of termination will be determined by the LABOR ARBITER. POEA may also impose sanctions on the agency or principal. .  REPATRIATION OF WORKERS The primary responsibility to repatriate a worker. Regulate private sector participation in the recruitment and overseas placement of workers by setting up a licensing and registration system. Book I. and act on violations of any provisions of any provisions of this Title. The POEA has no jurisdiction to hear and decide a claim for enforcement of a foreign judgment. PUBLIC SECTOR AGENCIES A. inspect the premises. the Secretary may suspend the license of the private employment agency concerned. Exercise original and exclusive jurisdiction to hear and decide all preemployment cases which are administrative in character involving or arising out of violation of recruitment laws. The mandatory repatriation bond is abolished as of June 17. Book I. (Azucena) B. (Pacific Asia vs. at any time. Art.

or a fine of not less than P20. fine of not less than P500T nor more than P1M > prescribes in 20 years * The maximum penalty shall be imposed if: a . partnership.00 c. or for violation of the provisions of this. “Name Hire” – Worker who is able to secure employment overseas on his own without the assistance or participation of an agency. Achacoso) money claims arising from ER-EE relationship prescribes in 3 years Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . he shall in addition to the penalties herein prescribed.00 c. “Overseas employment” – Employment of a worker outside the Philippines. or both such imprisonment and fine.000. Art. 2. be deported without further proceedings: Illegal recruitment: a.00 nor more than P100. . committed by a non-license or non-holder of authority. imprisonment of not less than 2 years nor more than 5 years b. or both such imprisonment and fine.00 nor more than P50. If the offender is a corporation. Art. 3.LABOR LAW 1(Labor Standards & Termination of Employment ) 38 3. the POEA.000.00.000. 6. the person illegally recruited is less than 18 years of age.000.000. > prescribes in 5 years Illegal recruitment constituting Economic Sabotage: a. or b. at the discretion of the court. 4. (Salazar vs. fine of not less than P200. the penalty shall be imposed upon the officer or officers of the corporation. VENUE: RTC where committed or where offended party resides  The Secretary of Labor or his duly authorized representative may order the closure of illegal recruitment establishments. 38 (c) of the Labor Code granting the Secretary of Labor the power to issue search or arrest warrants is declared unconstitutional and null and void. including employment on hoard vessels plying international waters covered by a valid employment contract. Art. 4. Violation of any of the provisions thereof or its implementing rules and regulations by a non-license or non-holder of authority a. association or entity responsible for violation. or a fine of not less than P10. partnership.000. 5. and if such officer is an alien. “Placement fee” – Amount charged by a private employment agency from a worker for its services in securing employment. 3 Sanctions 1. 39 : Penalties – Violations of any provisions of this Tile or IRR’s by license or holder of authority : a. association or entity. and other applicable laws .  A person convicted for illegal recruitment under the Labor Code can be convicted for violation of the RPC on ESTAFA provided the elements of the crime are present.00 nor more than P500. and b. “Service fee” – Amount charged by a license from its foreign ER as payment for actual services rendered in relation to the recruitment and employment of workers for said principal. 6. life imprisonment. at the discretion of the court. imprisonment of not less than 4 years nor more than 8 years b. imprisonment of not less than 6 years and 1 day but not more than 12 years and b. 5. 35 : Suspension and/or Cancellation of License or Authority – The Secretary of Labor shall have the power to suspend or cancel any license or authority to recruit EE’s for overseas employment for violations of rules and regulations by the DOLE.

For an enterprise registered in preferred areas of investments. NLRC) NON-RESIDENT ALIEN Almodiel v NLRC (93) Art. Mass media – 100% owned by Filipino citizens c. b. Art. Catan) Section 7. 41 : Prohibition Against Transfer of Employment – (a) After the issuance of an employment permit. Advertising – 70% Filipino owned d. 288 : Any alien found guilty shall be summarily deported upon completion of service of sentence.EMPLOYMENT PERMIT 1. exploit and utilize natural resources – 60% Filipino. or (b) where aliens are elected members of Board of Directors in proportion to their allowable participation in the capital. Retail Business – 100% Filipino owned e. (Alcantara) COVERAGE * A resident alien need not obtain an employment permit in order to be employed in the Philippines. Art.LABOR LAW 1(Labor Standards & Termination of Employment ) - 39 strict rules of evidence are not applicable in claims for compensation and disability benefits 5. In case of breach of the employment contract by a foreign-based ER. Financing business – 60% Filipino owned 4. 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. . Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Sec. when (a) the Secretary of Justice specifically authorizes the employment of technical personnel. 3. Rule XIV. (Ambraque vs. said employment permit must be issued upon recommendation of the government agency charged with the supervision of the registered enterprise. IRR’s : The employment permit shall be valid for a minimum period of 1 year. May an ER in the Philippines employ a worker who is not a Filipino citizen ? Yes. 2. A resident alien does not fall within the ambit of the provision. 40 of the Labor Code which requires employment permit refers to non-resident aliens. the alien shall not transfer to another job or change his ER without prior approval of the Secretary of Labor. NLRC. ALIEN EMPLOYMENT 7. 40 : Employment Permit of Non-resident Aliens – Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign ER who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the DOLE . The agency is jointly severally liable with the principal or foreign-based ER for any of the violations of recruitment agreement contract of employment. . public utility to develop. Are there exceptions to the prohibition against employment of aliens in entities engaged in nationalized activities? Yes. may the private employment agency or recruitment entity be held liable? What is the nature of the liability of the recruitment and placement agency and its principal? Yes. The agency or entity undertakes under oath to assume full and complete responsibility for all claims and liabilities which may arise in connection with the use of the license or authority. except to nationalized activities such as: a. Book I. (Almodiel vs. 7. 1 TECHNIQUE OF REGULATION . Pp vs. able and willing at the time of application to perform the services for which the alien is desired. Art. or (c) when allowed under certain special laws.

competent b. IRR’s) 3. What is dual system/training? It refers to a delivery system of quality technical and vocational education which requires training to be carried out alternatively in 2 venues: Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .DEFINITIONS 1. IRR’s) 4. Book II. skills and capabilities for the nation’s sustained economic and social growth. This is known as “entrepreneurship” (Art. Rule I. Art. v. 2. IRR’s : Requirements for Employment Permit Applicants – The applicant for an employment permit shall be accompanied by the following: a. able and willing at the time of application to perform the services for which an alien is desired.  That the non-resident alien worker and ER shall bind themselves to train at least 2 Filipino understudies.LABOR LAW 1(Labor Standards & Termination of Employment ) General Milling Corp. 44 (b). 40 : The employment permit may be issued to a non-resident alien or to the applicant ER after a determination of: [W A C] a. Define manpower? Is the portion of the population which has actual or potential capability to contribute to the production of goods and services. What is human resources development? Process by which the actual and potential labor force is made systematically to acquire greater knowledge. cannot be seriously questioned. among others:  That the non-resident alien shall comply with all applicable laws and rules and regulations. and  A designation by the ER of at least 2 understudies which must be the most ranking regular EE’s in the section or department for which the expatriates are being hired to ensure actual transfer of technology. 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. 1. development and utilization of the nation’s manpower and thereby promote employment and accelerate economic and social growth. 5. 5. Rule I. Title to Develop human resources b. Book II. and c. (Sec. Manpower development also means training for self-employment. 43 : It is the objectives of this [F E D] a. his work experience and other data showing that he possesses technical skills in his trade or profession. able and c. Rule XIV. Curriculum vitae signed by the applicant indicating the educational background. 1 (c). willing at the time of the application to perform the services for which the alien is desired. Formulate such plans and programs as will ensure efficient allocation. Book I." In short. Torres) 2.1 OBJECTIVES . Establish training institutions. Section 8. Is human resources development intended solely to train workers? No. the Department of Labor is the agency vested with jurisdiction to determine the question of availability of local workers. Sec. (General Milling vs. EMPLOYMENT PERMIT – CONDITIONS FOR GRANT 1. Art. (Sec. Contract of employment between the ER and the principal. b. DEVELOPMENT OF HUMAN RESOURCES 8. Torres (91) 40 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. [The DOLE is the agency vested with jurisdiction to determine the question of availability of the local workers. which shall embody the following.

To establish apprenticeship standards for the protection of apprentices. To establish a national apprenticeship program through participation of ER’s workers. business. 2. basic training develops his skill and proficiency in actual working conditions as it continues personal discipline and work value. 57) DEFINITION 1. RA 7796) 8.3 TRAINING AND EMPLOYMENT OF SPECIAL WORKERS – APPRENTICES. IRR’s : “Highly Technical Industries” – Trade. the President may require compulsory training where the shortage of trained manpower is deemed critical by the Secretary of Labor. 8. Art.2 PROGRAM INCENTIVE * Art. 58 : “Apprenticeship Occupation” – Requires more than 3 months of practical training supplemented by related theoretical instruction. 70 : Apprenticeship programs shall be primarily voluntary except: a. To help meet the demand of the economy for trained manpower. 2. Where services of foreign technicians are utilized by private companies in apprenticeable trades. 3. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Art. Sec. When national security or particular requirements of economic development so demand. enterprise. 1 month probation prior approval by TESDA of the proposed apprenticeship program is a condition sine qua non before an apprenticeship can be validly entered into employer is not obliged to employ the apprentice after the completion of his training Art. 52 : Deduction from taxable income of ½ of the value of labor training but not to exceed 10% direct labor wage: Provided. 60 : Only ER’s in highly technical industries and only in apprenticeable occupations may employ apprentices. Art. LEARNERS AND HANDICAPPED WORKERS POLICY OBJECTIVES * What is the policy of the State on apprenticeship? 1. APPRENTICES – must be approved by TESDA Art. Rule IV. (Sec. 58 : “Apprenticeship” – Practical training on the job supplemented by related theoretical instruction. and 3. the program is recognized by DOLE.LABOR LAW 1(Labor Standards & Termination of Employment ) 41 a. and government and non-government agencies. industry or other activity which is engaged in the application of advanced technology. those below 18 years of age shall not work in hazardous occupations. 78 : “Handicapped workers” – Those whose earning capacity is impaired by age or physical or mental deficiency or injury WHO CAN EMPLOY AND WHEN A. Book II. At least 15 years of age: provided. Qualifications of an Apprentice: a. 1. 73 : “Learners” – 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 3 months. in school and b. training provides the trainee the theoretical foundation. (Art. b. 4 (p). in the production plant. in the production plant. Art. In school. That in the case of apprenticeship programs.

c. willful disobedience e. and follow oral and written instructions. engaging in violence h. rules c. Besides. Duration of the learnership period shall be 3 months.Learnership programs must be approved by TESDA  Art. insubordination – lawful order d. and the employment does not create unfair competition in terms of labor costs or impair or lower working standards. After the probationary period of 1 month.LABOR LAW 1(Labor Standards & Termination of Employment ) b. theft or malicious destruction f. 76 : Learners employed in piece or incentive-rate jobs during training shall be paid in full for the work done. Rule VI. 11. Personal problems which prevents a satisfactory performance (bad health) d. When J requested for a chance to let him finish the 3 months period.  All learners who have been allowed or suffered work during the first 2 nd months to be deemed EE’s training is terminated by the ER before the end of the stipulated period though no fault of the learner. 42 Be physically fit for the occupation. habitual absentism b. Before the end of 2 months. (Sec. (Sec.g. 75 : 1. Rule VI. Book III. no experienced worker is available 2. Causes for termination of apprenticeship agreement BY THE APPRENTICE: a. (Alcantara) * After working for 1 month may an apprentice be dismissed without cause? No. A refused to hire J. the apprenticeship agreement may be terminated only for cause. Possess the ability to comprehend. bad health or continuing illness. A commitment to employ learners if they so desire. This is not an apprenticeable program occupation because proficiency can be attained within a very short period. 74 : Learners may be employed when: 1. * J entered into a learnership agreement with employer A. LEARNERS . At the end of 3 months. and 3. poor efficiency of performance g. the employment of learners is necessary to prevent curtailment of employment opportunities 3. Substandard working conditions BY THE EMPLOYER: a. Possess vocational aptitude and capacity. Art. the hotel industry is not highly technical. Cruel or inhuman treatment c. IRR’s) * A 5-star hotel would like to have an apprentice program dishwashers? No. A has a Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Wages and salary rates begin at not less than 75% minimum wage. B. gross misconduct i. d. 2. poor physical conditions – apprentice e. A terminated the agreement. Repeated violation by ER of agreement b. Is the stand of A sustainable? No. as regular EE’s upon completion of the learnership. IRR’s) > employer must make a commitment to employ the business  APPRENTICESHIP AGREEMENT  period of apprenticeship shall not exceed 6 months  wages shall not be lower that 75% of the legal minimum wage  should be approved by TESDA  If employed without a pre-approved apprenticeship program by the apprentice is not an apprentice but a regular employee. Book II. 25. Art.

Conditions of Employment: not exceed 8 hours and allowed overtime  Art. 80 :  Rates to be paid to handicapped workers shall not be less than 75% of the applicable minimum wage. Period of apprenticeship shall not exceed 6 months. Learnership agreements do not need prior approval by DOLE but are subject to DOLE’s inspection - trains in a skilled or highly skilled job or in a job found only in a highly technical industry the training period exceeds 3 months (6 months) there is no such commitment employment of apprentices in Art. - C.LABOR LAW 1(Labor Standards & Termination of Employment ) 43 commitment under the learnership agreement to employ J as a regular worker upon the completion of the learnership. is necessary to prevent curtailment of employment opportunities. 79 : Handicapped workers may be employed when their employment2. and 3. LEARNER APPRENTICE SIMILARITIES  they both have training periods for jobs requiring skills that can be acquired through actual work experience  they may be paid wages 25% lower than the applicable legal minimum wage DIFFERENCES trains in a semi-skilled job or in industrial occupations that require training for less than 3 months training period is shorter because the job is more easily learned employer is committed to hire the learner-trainee as an EE after the training period. 81 : 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. 60 is legally allowed ONLY in highly technical industries and only in apprenticeable occupations approved by DOLE. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 61 : 1. Art.  Employment agreement must state the duration of the employment period and the work to be performed. when it does not create unfair competition in labor costs or lower working standards. HANDICAPPED WORKERS Art.  Art.

they are thus covered by Article 280 of the Labor Code. benefits. Wages shall not start below 75% of the minimum wage.) If the student referred to in Art.No disabled person shall be denied access to opportunities for suitable employment. 72. causes injury to a third person. the students are given real opportunities including such facilities as may be reasonable and necessary to finish their chosen courses under such agreement. 3. This must be evidenced by an apprenticeship agreement. Since the Magna Carta accords them the rights of qualified able-bodied persons. In this problem. NLRC (99) In this light. colleges or universities. It is not the decisive law in a civil suit for damages instituted by an injured third person. the IRR provision that there is no EE-ER relation between the school and the student pertains to observance of labor regulations. fringe benefits. and schools. (Filamer Christian Institute vs. the school can be held liable. Equal Opportunity for Employment . Sec. Rule X. Sec. Is the clerk entitled to unpaid wages? Yes. NLRC) Ratio of theoretical vs. but on justice and the equal treatment of qualified persons. (Sec. (Alcantara)  The Implementing Rules provide: “There is no EE-ER relationship between students on one hand. Apprenticeship program must be duly approved by TESDA or apprentices becomes regular EE. . privileges. where there is written agreement between them under which the former agree to work for the latter in exchange for the privileges to study free of charge. There is no ER-EE relationship between students on one hand. fringe benefits. benefits. Hiring of apprentices without compensation whose training on the job is required by the school or training program curriculum as a requisite for graduation or board examination. Section 5 of the Magna Carta provides: Sec. disabled or not. provided. (Nitto Enterprises vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 44 2. XXX The noble objectives of Magna Carta for Disabled Persons are not based merely on charity or accommodation. et al. 5. Rule X. or rest periods. 72 : The Secretary of Labor may authorize the: 2. on the other. and schools. incentives or allowances as a qualified able bodied person. There is therefore an ER-EE relationship between the clerk and the university.R.. where there is written agreement between them under which the former agree to work for the latter in exchange for the privilege to study free of charge. in the course of doing a task in behalf of the school. (IRR of Book III. 7277) No disabled person shall be denied access to opportunities for suitable employment A qualified disabled EE shall be subject to the same terms and conditions of employment and the same compensation. 1992. August 17. privileges. Book III. 75112.)  MAGNA CARTA FOR DISABLED PERSONS (R. A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation. working conditions. Book III. IRR’s) * A clerk in the College of Law of a University worked without pay but was allowed to take up no more than 3 units per semester free of charge. 14. 14. the handicap of petitioners (deaf-mutes) is not a hindrance to their Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .A. Hon. 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 ablebodied person. The clerk resigned and demanded payment of unpaid wages. In the present case. G. on the job training > 100: 2000 . the clerk was not given any real opportunity to finish law as he was allowed to take up no more than 3 units per semester. The fact that the employees were qualified disabled persons necessarily removes the employment contracts from the ambit of Article 80. including such facilities as may be reasonably necessary to finish their chosen courses under such arrangement. IRR’s : only applies in instances where the students are given real opportunity.may work overtime – duly credited as his training time  Art. Rule X. Intermediate Appellate Court. such as payrolls to be kept. incentives or allowances as a qualified able-bodied person Even an handicapped worker can acquire the status of the regular employee Bernardo v. 14.

The eloquent proof of this statement is the repeated renewal of their employment contracts. exercise discretion and independent judgment.2 COVERAGE Art. they should be treated and granted the same rights like any other regular employees.FMDP]: 1. 2. Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof. Has the authority to hire or fire other EE’s of lower rank. or their suggestions and recommendations as to the hiring and firing and as to the promotion or any change of status of other EE’s are given. 67 : Exhaustion of Administative Remedies – No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such agreement.LABOR LAW 1(Labor Standards & Termination of Employment ) 45 work. Book III. b. Section 9. that. (Manila Terminal vs. particular weight. (Sec. IRR’s] 2. b. experience or knowledge. including those employed in GOCC’s with original charters.) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . CIR) 9. or execute under general supervision special assignment and tasks. c. does not make an EE a managerial EE where the exercise of the independent judgment is not present. Art. CONDITIONS OF EMPLOYMENT – HOURS OF WORK 9. NLRC) 3. ENFORCEMENT Art. Regularly directly assist a proprietor or managerial EE or execute under general supervision work along specialized or technical lines requiring special training. Rule I. (Sierra vs. (Id. after showing their fitness for the work assigned to them. Other officers or members of the managerial staff if they perform the following duties and responsibilities: a. and d.)]  Mere designation to a position with a high-sounding title. The decision of the Secretary of Labor shall be final and executory. Primary duty consists of the performance of work directly related to management policies of the ER. 82 : The provisions of this Title shall apply to EE’s in all establishments and undertakings whether for profit or not but NOT to [GMS. to utilize different shifts of laborers working only for 8 hours each. where more than an 8hour operations is necessary. Customarily or regularly direct the work of 2 or more EE’s c. Why then should they be dismissed. unless he has exhausted all available administrative remedies. 66 : Appeal to the Secretary of Labor . Customarily and regularly. Do not devote more than 20% of their hours worked to activities which are not directly and closely related to the performance of the work described in the preceding paragraphs. Government EE’s [whether employed by the National Government or any of its political subdivisions. in cases.The decision of the authorized agency of the DOLE may be appealed to the Secretary of Labor within 5 days from receipt of the decision. 1 HOURS REGULATION RATIONALE AND ENFORCEMENT The 8-hour labor law was designed not only to safeguard the health and welfare of the laborer but in a way to minimize unemployment by forcing ER’s. (d. Managerial EE’s [refer to those who meet all of the following conditions. namely: a. simply because they are physically impaired? The Court believes.

NASA Consolidated Unions (65) The philosophy behind the exemption of managerial employees from the 8-Hour Labor Law is that such workers are not usually employed for every hour of work but their compensation is determined considering their special training. Managerial EE’s – Employed by reason of their special training. 4. Government EE’s – Terms and conditions of employment are governed by the Civil Service Law 2. to maintain a staff house provided for the official. “takay”. IRR’s)  However.LABOR LAW 1(Labor Standards & Termination of Employment ) 46  A supervisor is part of the managerial staff and therefore not entitled to overtime pay and other benefits under Art. 2. Perform such service: a. Members of the family of the ER who are dependent on him for support & domestic helpers and persons in the personal service of another. or task basis if their output rates are in accordance with the standards prescribed. convenience or safety of the ER as well as the members of his ER’s household. [Including those who are paid on piece-work. 4. experience or knowledge which requires the exercise of discretion and independent judgment. are not the latter’s domestic helpers but regular EE’s of the company. expertise or knowledge and for positions requiring the exercise of discretion and independent judgment. 3. Philippine Sinter)  The function of a managerial employee requires the use of discretion and independent judgment – (nature of his functions) 6. “pakiao”. Domestic helpers and persons in the personal service of another – They minister to the personal needs and comfort their ER and his family and terms and conditions of employment are governed in other parts of the Labor Code. Or minister to the personal comfort. (Art. II. (Alcantara) RATIONALE EXEMPTION . Non-agricultural field personnel – These regularly perform their duties away from the principal or branch office or place of business of the ER. (sec. Value of work cannot be measured in terms of hours. but paid for the company itself. Give the reason for the exceptions? 1. Rule I. determining the existence or absence of EE-ER relationship. b. 83 to 96. Members of the family dependent upon him for support – Amounts given by way of support may far exceed the benefits to which the EE’s are entitled under the laws on overtime. 6. 5. 5. And workers who are paid by results.]  Payment by result is a method or computing compensation.MANAGERIAL EMPLOYEES Natl Waterworks & Sewerage Authority v. house personnel hired by a ranking company official. Workers paid by results – Compensation computed on the basis of work accomplished and not on time spent in accomplishing the work. (Cadiz vs. Book III. or perform work related to management It is not a basis for Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Field personnel [Non-agricultural EE’s who regularly perform their duties away from the principal place of business or branch office of the ER and whose actual hours of work in the field cannot be determined with reasonable certainty. they are on their own in the field and the number of hours of actual work they render cannot be reasonably ascertained. 82)  EEs whose work or service hours are not or cannot be effectively monitored by the ER. In the ER’s home which are usually necessary or desirable for the maintenance or enjoyment thereof.

as defined in Article 212 (m). 2(b). Book III of the aforestated Rules to Implement the Labor Code. (5) they execute. nonetheless he is still not entitled to payment of the aforestated benefits because he falls squarely under another exempt category . Rule I. Rule I. Salazar v. and (6) they do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work hereinbefore described. . NLRC (96) Hence." The former clause is still within the scope and purview of Article 82 which defines field personnel. . (4) they execute. experience. Vivar (92) XXX Contrary to the contention of the petitioner. Book V of the Labor Code. A case in point is National Sugar Refineries Corporation v. NLRC. therefore. Hence.LABOR LAW 1(Labor Standards & Termination of Employment ) 47 policies or general business operations along specialized or technical lines. the Court finds that the aforementioned rule did not add another element to the Labor Code definition of field personnel. NLRC (96) “Actual hours work in the field…” is to be read in conjunction with Rule IV. 82 of the Labor Code. special assignments and tasks. controlling. viz. should be considered as officers or members of the managerial staff under Article 82. Under the facts obtaining in this case. rest day and holiday pay. From the foregoing." this Court ruled: A cursory perusal of the Job Value Contribution Statements of the union members will readily show that these supervisory employees are under the direct supervision of their respective department superintendents and that generally they assist the latter in planning. These supervisory employees are likewise responsible for the effective and efficient operation of their respective departments. v NLRC (98) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 ."officers or members of a managerial staff" as defined under sec. Book III of the same Code and hence not entitled to overtime. although petitioner cannot strictly be classified as a managerial employee under Art. or knowledge. Therefore field personnel are employees whose time and performance is unsupervised by the employer. The clause "whose time and performance is unsupervised by the employer" did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field cannot be determined with reasonable certainty. (3) they regularly and directly assist the managerial employee whose primary duty consists of the management of a department of the establishment in which they are employed. we are constrained to agree with petitioner that the union members should be considered as officers or members of the managerial staff and are. 2(c) of the abovementioned implementing rules. exempt from the coverage of Article 82. it is apparent that the members of respondent union discharge duties and responsibilities which ineluctably qualify them as officers or members of the managerial staff. under general supervision. Mercidar Fishing Corp. Book III of the Omnibus Rules Implementing the Labor Code. On the issue of "whether supervisory employees. communicating and in making decisions in attaining the company's set goals and objectives. For these workers it is not feasible to provide a fixed hourly rate of pay or maximum hours of labor. TEST . Perforce. under general supervision. work along specialized or technical lines requiring special training. and sec.FIELD PERSONNEL Union of Filipro Employees v. Book III of the Implementing Rules. query must be made as to whether or not such employee's time and performance is constantly supervised by the employer. (2) they customarily and regularly exercise discretion and independent judgment. . rest day and holiday pay. Salazar v. directing. organizing. as defined in Section 2. in deciding whether or not an employee's actual working hours in the field can be determined with reasonable certainty.: (1) their primary duty consists of the performance of work directly related to management policies of their employer. staffing. they are not entitled to overtime.

attendants and all other hospital or clinic personnel…]  Hospital personnel are no longer entitled to seven days pay for a 5-day work week Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . to said workers. nurses. Where such recommendatory powers are subject to evaluation and review. III. Although they perform non-agricultural work away from the petitioner’s business offices.3 NORMAL HOURS * Art. No. RATIONALE EXEMPTION . though not in full. (Alcantara) 3. dieticians. or its objectives. They discharge duties and responsibilities which qualify them as members of the managerial staff. paramedical technicians. except where the exigencies of the service require that such personnel work for 6 days or 48 hours in which case they shall be entitled to an additional compensation at least 30% of their regular wage for work on the 6th day. laboratory technicians. for 5 days a week. pharmacists. (Franklin Baker Company vs.000 or in hospitals and clinics with a bed capacity of at least 100 shall hold regular office hours for 8 hours a day. In contrast. psychologists. recommends disciplinary action against erring subordinates or promotion of deserving personnel. midwives. nutritionists. he distributes and assigns work to EE’s but such duty though involving discretion is occasional and not regular and customary. social workers. Supervisory EE’s are given the following duties and functions assist the department superintendent in various aspects of management such as in the planning of systems and procedures.000. Determine whether exempted EE or not? 1. and other related tasks as may be assigned by his immediate superior. ** Health personnel in cities and municipalities with a population of at least 1. He saw to it that work conformed with pattern he had prepared and if not. in the bargaining agreement. (Villuga vs. recommend measures to improve work method. inspectors and supervisors given the power to recommend hiring and firing of EE’s but where ultimate power to hire or fire rested with personnel manager? No.LABOR LAW 1(Labor Standards & Termination of Employment ) 48 Petitioner argues essentially that since the work of private respondent is performed away from its principal of business. NLRC) 9. the fact remains that throughout the duration of their work they are under the effective control and supervision of the petitioner through the vessel’s patron or master as the NLRC correctly held. He did not participate in policy-making. as well as in actually paying to them said differentials. in the case at bar. [“Health personnel” – Includes resident physicians. It contends that private respondent and other fishermen in its employ should be classified as field personnel who have no statutory right to service incentive leave pay. train and guide subordinates. Cutter in tailoring shop was assigned chore of distributing work to shop’s tailors when the shop’s manager were absent. It is true that in the absence of the manager and assistant manager. 2. fishermen employed by the petitioner have no choice but to remain on board its vessel. Foremen. had them redone.PIECE WORKER Red v Coconut Products Ltd. 83 : The normal of hours of work of any EE shall not exceed 8 hours a day. (66) Furthermore. the same are not effective and not an exercise of independent judgment as required by law . CA 444). the company in effect freely adhered to an application and implementation of the Eight-Hour Labor Law. And in agreeing to the provision for payment of shift differential to the petitioners-workers aforementioned. communicate and coordinate with other supervisors. nothing in said law precludes an agreement for the payment of overtime precludes an agreement for the payment of overtime compensation to piece-workers. although the Eight-Hour Labor Law provides that it does not cover those workers who prefer to be paid on piece-work basis (Sec. repaired or sewn. Yes. during the entire course of their fishing voyage. exclusive of time of meals. Trajano) 2. it has no way of verifying his actual hours of work on the vessel.

in declaring that petitioner only worked for four hours. which the latter categorically denied ever accomplishing. As petitioner's employer. b. no employment contract. IRR’s : PRINCIPLES IN DETERMINING HOURS WORKED 1. relied solely on the supposed daily time records of the petitioner submitted by the private respondent. (Azucena) DISTINCTION BETWEEN THE TWO CLASSES COMMERCIAL/INDUSTRIAL Normal Work Day 8 hrs/day Normal Work Week 6 days HEALTH 8 hrs/day 5 days 9. The time during which an EE is inactive by reasons of interruptions in his work beyond his control shall be considered working time either if the imminence of the resumption of the work requires the EE’s presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the EE’s own interest. 2. however. all the time spent for such work shall be considered as hours worked. Instead. We.LABOR LAW 1(Labor Standards & Termination of Employment ) 49 * The 40-hour work week would not be applicable if there is a training agreement between the resident physician and the hospital and the training program is duly accredited or approved by appropriate government agency. what the private respondent offered as evidence was only petitioner's daily time record. Book III. all time during which an EE is suffered or permitted to work. are of the opinion that these documents cannot be considered substantial evidence as to conclude that petitioner only worked for four hours. notice of assignment or posting. NLRC (98) In the instant petition. much less signing. payroll. Private respondent hardly bothered to controvert petitioner's assertion. An EE need not leave the premises of the workplace in order that his rest period shall not be counted. 84 : Hours worked shall include: A. All hours are hours worked which the EE is required to give to his ER regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. 4. may leave his workplace. much less bolster its own contention. the NLRC. whether within or outside the premises of the workplace. if the work was with the knowledge of his ER or immediate supervisor. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 2. cash voucher or any other convincing evidence which may attest to the actual hours of work of the petitioner was even presented. 4. ENTRY TIME CARDS Prangan v. to go elsewhere. 3.4 HOURS WORKED Art. If the work performed was necessary or it benefited the ER or the EE could not abandon his work at the end of the normal working hours because he had no replacement. Sec. private respondent has unlimited access to all relevant documents and records on the hours of work of the petitioner. may rest completely and c. > Rest periods of short duration during working hours shall be counted as hours worked. he stops working. it being enough that a. Yet. even as it insists that petitioner only worked for four hours and not twelve. all time during which an EE is required  to be on duty  to be at a prescribed workplace and B. Rule III.

WAITING TIME Sec. “waiting for company papers to work on.m.m… The manager is aware of this.m. whether within or without the factory. to prove that petitioner indeed worked for only eight hours a day. Union) * A. 1:00 p. Although Jose was not instructed expressly to render work. The company refuses to pay him for the 9:00 a. – 12:00 noon – does nothing on call for G. She dovotes this time working on papers of other firms for which she receives remuneration.' The observations made by the Solicitor General regarding the unreliability of the daily time records would therefore seem more convincing. NLRC(98) This Court. IRR’s : Waiting time spent by an EE shall be considered as working time if waiting is an a. Is this hours of work? Yes. Luzon Marine Dept. 5:00 p.m.m. respondent company failed to present substantial evidence. it being enough that he “cease to work”. Although she is working on the papers of other companies.M. The very uniformity and regularity of the entries are "badges of untruthfulness and as such indices of dubiety.LABOR LAW 1(Labor Standards & Termination of Employment ) 50 In said alleged daily time record. 12 noon – 1:00 p.. has ruled that "such unvarying recording of a daily time record is improbable and contrary to human experience. to conferences. It is impossible for an employee to arrive at the workplace and leave at exactly the same time. Nicario v.M. may rest completely and leave or may leave at his will the spot where he actually stays while working. Is the assembly time working time? No.m. As their houses are situated right where the farms are located.fetches G. The uniformity and regularity of the entries are 'badges of untruthfulness and as such indices of dubiety.m. – 5:00 p. It is impossible for an employee to arrive at the workplace and leave at exactly the same time. has idle time in her work schedule. other than the disputed DTRs. in previously evaluating the evidentiary value of daily time records. (Aria vs. She cannot furthermore leave the place of work during her work schedule. (Azucena) * S. day in day out. Obviously. he was impliedly allowed to do so by failure of the ER to warn him against rendering such work. The works are not subject to the absolute control of the company during the period. NLRC) IDLE TIME * A laborer need not leave the premises of the factory. the workers of an enterprise assembled at a designated area to answer roll call. shop or boat in order that his period of rest shall not be counted. drives the G.M. Rule I. or b. the workers can go back in their houses after roll call to do some chores.M. day in day out. 9:00 a. the EE is required to engage by an ER to wait The controlling factor is whether waiting time spent in idleness is so spent predominantly for the ER’s benefit or for the EE’s. (Alcantara) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 5. and would invariably leave his post at exactly 2:00 a. Book III. goes home. He must remain in the premises as at any time he may be called to drive for the G.m. integral part of his work. she has no absolute control over her time. it showed that petitioner started work at 10:00 p. especially those which show uniform entries with regard to the hours of work rendered by an employee. or go somewhere else. The workers were not deprived of the time to attend to other personal pursuits. – lunch. to 12:00 noon period. He continues sweeping the floors after 5:00 p. at the company premises . but he does not stop Jose from doing work after 5:00 p. * Jose works as a janitor. (Alcantara) * 30 minutes prior to the start of the scheduled working hours. a company driver has the following work schedule: 8:30 a. On the other hand. Is the firm obligated to pay her for this time? Yes. an accountant in the manufacturing firm. shop or boat. .m. S is not free to make use of the period effectively and gainfully for his own purposes.m. Her ER may at any time require her to do some work. Besides the work rendered by Jose benefited the ER.m. such unvarying recording of a daily time record is improbable and contrary to human experience. (Luzon Stevedoring vs. Is this valid? No.

e. Where the work is necessary to Prevent serious loss of perishable goods. WORKING WHILE SLEEPING * Sleeping time may be considered working time if it is subject to serious interruption or takes place under conditions substantially less desirable than would be likely to exist at the EE home i. Pan Am EE’s Association) Phil. v. CIR (62) It will be noted that. and 4. finds no application in the present case. the idle time that an employee may spend for resting and during which he may leave the spot or place of work though not the premises 2 of his employer. under the law. In cases of actual or impending Emergency or there is urgent work to be performed on machineries and equipment to avoid serious loss which the ER would otherwise suffer. 444. and during the time that he is not working he can not leave and completely rest owing to the place and nature of his work. the laborers are required to stand by for emergency work. Where the establishment regularly Operates less than 16 hours a day. is not counted as working time only where the work is broken or is not continuous. Besides 1 hour is too brief to be utilized effectively and gainfully for his own interest. the time during which the laborer is not working and can leave his working place and can rest completely shall not be counted". of going home to take his dinner does not constitute abandonment. National Development Co. Nowhere in the law may it be inferred that employees must take their meals within the company premises. which states that "when the work is not continuous. therefore. where the laborer's work is continuous. then such shortened meal period is not compensable. (Azucena) ON CALL Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 2. Private respondent's act. v. except in the following cases where a meal period of not less than 20 minutes may be given by the ER provided *(That such shorter meal period is credited as compensable hours worked of the EE But if it is the EE who requested for the shorter meal time. NLRC (99) Thus. or where said meal hour is not one of complete rest. (Azucena): [N O P E] 1. CONTINUOUS WORK State Marine Corporation v.  Rest periods or coffee breaks running from 5 to 20 minutes shall be considered as compensable working time. such period is considered overtime. 3. Where work is Non-manual in nature or does not involve strenuous physical exertion. the eight-hour work period does not include the meal break. Inc. Rule I. Is this working time? Yes. IRR’s : Every ER shall give his EE’s not less than 1 hour time-off for regular meals. Cebu Seamen’s Association (63) The provision of section 1 of Commonwealth Act No. Book III. Airlines. (Pan Am vs. firemen permitted to sleep a portion of the time they are so on duty at the fire station. MEAL TIME Sec. The interruption was not due to the fault of T. a machine operator was forced to stop operating his machine for 1 hour during a brownout. * Where during the so-called meal period. 7.LABOR LAW 1(Labor Standards & Termination of Employment ) 51 * T. Employees are not prohibited from going out of the premises as long as they return to their posts on time.

not so much for the convenience of the employees. IRR’s : An EE while he is required to remain on call in the ER’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working hours while on call. Book III. Rule I.. which the labor arbiter rounded off as averaging three hours each working day. Metro Manila is not merely incidental to petitioner's job as a driver.M. 6. must be counted as hours worked. but primarily for the benefit of the employer.M. An EE who is not required to leave word at his own or with company officials where he may be reached is not working while on call. Art. Is it on call? No. When the country is at war d. during the workday.M. SEMESTRAL BREAK * Regular full-time teachers are entitled to salary and COLA during semestral break. TRAINING PROGRAMS * Sec. Book III. travel away from home is not considered working time. 89 : Emergency Overtime Work . On the contrary. meetings.Any EE may be required by the ER to perform overtime work in any of the following cases: [WED-UPS] c. 2. Since the assigned task of fetching and delivering employees is indispensable and consequently mandatory. When any other national or local emergency has been declared Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . and 3. should be paid as overtime work.M. The time is not only hours worked on regular workdays but also during corresponding working hours on non-working days. and from 4:00 P. then the time required of and used by petitioner in going from his residence to the field office and back. to 7:00 A. (Azucena)   Rada v NLRC (92) The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points on his way back from the field office going home to Marikina. 87 : Overtime Work –  regular work day – plus 25% basic hourly rate  Special days. * If an EE is kept within reach through a cellular phone. Rule I.Pang. Travel away from home – Travel away from home is clearly worktime when it cuts across the EE’s workday. Travel that is all in the day’s work – Time spent by an EE in traveling from one job site to another.) 9. that is. U. IRR’s : Attendance at lectures. (Azucena) TRAVEL TIME Principles which determine whether or not time spent in travel is working time:  Travel from Home to Work – Normal travel from home to work is no work time but an emergency call outside of regular working hours requiring him to go to his regular place of business is working time. Faculty Union vs. from 5:30 A. training programs and other similar activities shall not be counted as working time if all of the following conditions are met: 1.5 OVERTIME WORK AND OFFSETTING PROHIBITION Art. said transportation arrangement had been adopted. LECTURES. Pang. except during meal period or when EE is permitted to sleep in adequate facilities furnished by the ER. MEETINGS.LABOR LAW 1(Labor Standards & Termination of Employment ) 52 Sec. holiday or rest day – plus 30% of the regular hourly rate on said days. Attendance is in fact voluntary. to around 6:00 P. The EE does not perform any productive work during such attendance. (U. herein private respondent. 5. Attendance is outside of the ER’s regular working hours. Outside of these regular working hours.

It now constitute part of the terms and conditions of employment and cannot be unilaterally withdrawn by the ER. required its EE’s to render only 6 hours of work daily but pays them the minimum wage corresponding to 8 hours work. The prohibition to offset overtime against undertime applies to undertime incurred and overtime rendered on different days. fire. the waiver may be permitted. as a company policy.LABOR LAW 1(Labor Standards & Termination of Employment ) 53 e. without deduction of facilities provided. Where the completion or continuation of the work started before the 8 th hour is necessary to prevent Serious obstruction or prejudice to the business operations of the ER. Caltex Regular Employees v. corporation. It is not enough that the hours worked fall on disagreeable or inconvenient hours. When there is Urgent work to be performed on machines and installations in order to avoid serious loss or damage to the ER or some other cause of similar nature. (Alcantara) * Distinguish overtime pay from premium pay : Overtime pay is additional compensation for work done beyond the normal work hours on ordinary working days. Yes Sing) However. flood. May the right to overtime pay be waived? As a general rule. Are the EE’s entitled to overtime pay? Yes. 88 : Undertime work in any particular day shall not be offset by overtime work on another day BUT not on someday. (Alcantara) Art. Art. h. without deduction on account of facilities provided by the ER.  Permission given to the EE to go on leave on some other day of the week shall not exempt the ER from paying the additional compensation required. when the waiver is exchange for certain benefits and privileges. * A was late for work on a particular day. Inc. Premium pay is additional compensation for work rendered by the EE on days normally he should not be working. the company has fixed the normal workday at 6 hours. or the forty (40) hours worked during the regular work week Monday through Friday. (95) Overtime work consists of hours worked on a given day in excess of the applicable work period. Though voluntary practice or policy. Caltex Phil. To offset for the time he was late. which may be more than what will accrue to them in overtime pay. f. Later. But additional compensation for work rendered in excess of 8 hours during these days is also considered overtime pay. When it is necessary to prevent loss of life or property or in case of imminent danger to the public safety due to an actual or impending emergency in the locality caused by serious accidents. the right cannot be waived. The period was offset against A’ undertime. 90 : For purposes of computing overtime and other additional remuneration as required by this Chapter the “regular wage” of an EE shall include the cash wage only. g. A worked on additional period equivalent to the period he was late for work. Is this valid? Yes. earthquake. In order that work may be considered as overtime work. * The EE’s refusal to obey the order of the ER constitutes insubordination for which he may be subjected to disciplinary action. (MERALCO Workers Union vs. epidemic or other Disaster or calamity. which here is eight (8) hours. typhoon.  Provisions for overtime covers both profit and non-profit establishment or undertaking  For purposes of computing overtime  REGULAR WAGE – includes the cash wage only. (Cruz vs. the full 8-hours was required without any increase in wages. the hours worked must be in excess of and in addition to the eight (8) hours worked during the prescribed daily work period. MERALCO) RATIONALE – OVERTIME PAY * The reasons for overtime pay is that the worker is made to work longer than what is commensurate with the agreed compensation for the statutorily fixed or voluntary agreed hours Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . When the work is necessary to prevent loss or damage to Perishable goods. * Y.

Because of this. (Azuzena) However. including GOCC’s. petitioners' stance is bereft of any legal support.6 NIGHT WORK Art. no diminution on take home pay or fringe benefits 4.m.5 hours of work for 5 days. the 1991 POEA Rules merely require employers to guarantee payment of wages and overtime pay. IRR’s : This rule shall apply to all EE’s except: [G R S D M F] a. c. if the original workweek is reduced from Monday – Saturday to Monday – Friday. In that problem.e. 1. (PNB vs. NLRC (98) The cited provisions of PD 442 simply declare that night shift differential and additional remuneration for overtime. PROOF Lagatic v. CIR) BUILT-IN COMPENSATION * The employment contract may provide for a “ built-in” overtime pay. the workers were required to render 9. said wages cannot be considered as including overtime compensation.m. NLRC (98) Entitlement to overtime pay must first be established by proof that said overtime work was actually performed. not to exceed 48 hours/ week 3. he puts in more effort. 86 : Every EE shall be paid night shift differential of not less than 10% of his regular wage for each hour of work performed between 10:00 p. the right to overtime pay cannot be waived under existing laws. he might have no time for relaxation. Managerial EE’s. must submit report to DOLE NO FORMULA BASIC CONTRACT * When the contract of employment requires work for more than 8 hours at specific wages per day. Thus. (Manila Terminal vs. PEMA) COMPRESSED WEEK – VOLUNTARY BASIS * While as a general rule. When he thus spends additional time to his work. Rule II. Sec. amusement or sports. d. he might miss important pre-arranged arrangements. the effect upon him is multi-faceted. without providing for a fixed hourly rate or that the daily wages include overtime pay. Alcantara answered in a 1984 problem differently when he answered that overtime pay should be paid. all hours exceeding 48 hours/week – considered overtime 6. the EE’s and ER can agree to a compressed workweek of 5 days of 9 hours each with no payment of overtime if this will redound to the benefit of the workers i. ask the reviewer) Conditions for “Compressed Work Week” 1. (Engineering equipment vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 54 of labor he is supposed to do. Sunday and holiday work shall be computed on the basis of the employee's regular wage. Those of the government and any of its political subdivisions. In like fashion. 9. rest day. b. (What is the answer. and 6:00 a. before an employee may avail of said benefit. waivers must be made 5. he is delayed in going home to his family to enjoy the comforts thereof. Book III. Retail and service establishments regularly employing not more than 5 workers. I really do not know. nonpayment of overtime pay by the ER is valid. Minister of Labor) COMPUTATION Agga v. Domestic helpers and persons in the personal service of another. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . physical or mental. voluntary – agreed upon 2.

Other officers or members of the managerial staff [if they perform the following duties and responsibilities: a. it is to be discouraged because of its adverse effect upon efficiency and output. b. Primary duty consists of the performance of work directly related to management policies of the ER. there are remotely injurious effects of permanent nightwork manifested in the later years of worker’s life. or their suggestions and recommendations as to the promotion or any other change of status of other EE’s are given particular weight. IRR’s] 2.LABOR LAW 1(Labor Standards & Termination of Employment ) 55 e. Managerial EE’s [refer to those who meet all of the following conditions. He works in a retail establishment employing not more than 5 workers. repair shop  Exercise of a profession is neither a retail nor service * X works at a gasoline station which has only 5 EE’s. does not make an EE a managerial EE where the exercise of independent judgment is not present. (Sierra vs. (Id)  The night shift differential is attached by law to every work done between 10 pm to 6 am.sale of goods for personal or household use ex.sale of services to individuals for their own or household use ex. Customarily and regularly direct the work of 2 or more EE’s. Field personnel and other EE’s whose time and performance is unsupervised by the ER. Has the authority to hire or fire other EE’s of lower rank. grocery Service Establishment . Government EE’s [whether employed by the National Government or any of its political subdivisions. b.  If the work done between 10pm to 6am is overtime work for the EE. including those employed in GOCC’s with original charters.V. Rule I. namely: a. (Id) > Mere designation to a position with a high-sounding title. (Sec. T. It is at least 20. 2. Includes task and contract basis Retail Establishment . Customarily and regularly exercise discretion and independent judgment. Is he entitled to night shift differential? No. Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof. 82 : The provisions of this Title shall apply to EE’s in all establishments and undertakings whether for profit or not. Book III. NLRC) 3. but not to [G M S F I – F D R] 1. c. NLU) Section 10 : WEEKLY REST PERIODS * Art. then the 10% night shift differential should be based on his overtime rate. (Alcantara) * What if X works at King’s Minimarts. Regularly directly assist a proprietor or managerial EE or execute under general supervision work along specialized or technical lines requiring special training. From an economic point of view. c. Of the more immediate importance is the disarrangement of his social life. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . The total number of EE’s of the ER exceeds 5. whether or not this period is part of the workers regular shift. a retail store chain with 10 outlets of 2 EE’s each outlet. including the recreational activities of his leisure hours and the ordinary associations of normal family relations. RATIONALE – PROHIBITION * First. A moral argument in the case of workers is that they go to and from the factory in the darkness. (Shell vs. f. Is he entitled to night shift differential? Yes.

(Id) 4.LABOR LAW 1(Labor Standards & Termination of Employment ) 56 experience or knowledge. Domestic helpers and persons in the personal service of another . convenience. 82)] 5. Where the Nature of work requires continuous operations and stoppage of the work may result in irreparable injury or loss to the ER. Rule III. Book III. IRR’s)  However. Analogous (avail of favorable weather) or similar circumstances How much is a worker entitled if he works on a rest day?  Scheduled rest day – additional compensation of at least 30% (premium pay) of his regular wage. the ER may so schedule the weekday rest day of their choice at least 2 days in a month. In case of actual or impending emergency caused by serious accident. [Including those who are paid on piece-work. or safety of the ER as well as the members of his ER’s household (Sec. * The ER shall determine and schedule the weekly rest day of his EE’s  However. flood. fire. 92 : “When ER may require Work on rest day” – [D U A . whether operating for profit or not. Or minister to the personal comfort. and f. Art. 4. but paid for by the company itself. [Perform such services: a.2 SCHEDULING OF REST DAY. including public utilities operated by private persons. and d. And workers who are paid by results. or execute under general supervision special assignment and tasks. [+30% of RW] Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . to avoid serious loss which the ER would otherwise suffer. IRR’s : This rule shall apply to all ER’s whether operating for profit pr not. Philippine Sinter) 7. to maintain a staff house provided for the official. b. Rule III. or imminent danger to public safety. “pakiao”. Rule I. typhoon. 91 : It shall be for the duty of every ER. 1. earthquake. to provide EE a rest period of not less than 24 consecutive hours after every 6 consecutive normal working days. e. Book III. Do not devote more than 20% of their hours worked to activities which are not directly and closely related to the performance of the work described in the preceding paragraphs.] Sec. or task basis if their output rates are in accordance with the standards prescribed. AND COMPENSATION Art. In case of Urgent work. (Cadiz vs. epidemic. house personnel hired by a ranking company official. IRR’s : Where however the choice of the EE’s as to their rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operation of the undertaking. In the event of Abnormal pressure of work due to special circumstances. where the ER cannot ordinarily be expected to resort to other measures. To prevent or damage to Perishable goods.P N A] a. Members of the family of the ER who are dependent on him for support 6. are not the latter’s domestic helpers but regular EE’s of the company. Field personnel [Non-agricultural EE’s who regularly perform their duties away from the principal place of business or branch office of the ER whose actual hours of work in the field cannot be determined with reasonable certainty (Art. In the ER’s home which are usually necessary or desirable for the maintenance or enjoyment thereof. Book III. WHEN COMPULSORY WORK ALLOWED. the ER shall respect the preference of EE’s as to their weekly rest day when such preference is based on religion grounds. 10. or other Disaster or calamity to prevent loss of life. c. “takay”. d. 2. Sec. b.

Additional compensation of at least 30 percent of his regular wage for work performed on Sundays and holidays. (MERALCO vs. While the vessel is in port. the boat remains at sea for 2 weeks. Domestic helpers and persons in the personal service of another. Managerial EE’s.LABOR LAW 1(Labor Standards & Termination of Employment ) 57  Scheduled rest day which is a non-working holiday – entitled to additional compensation of at least 50% of his regular wage. the law provides that if he performs work on Sundays and holidays. Field personnel and other EE’s whose time and performance is supervised by the ER. G. scheduled rest day Additional compensation of at least 10 percent of regular wage.HOLIDAYS 11. any special holiday d. 4. Rule III. b. 93 Compensation for rest day. moral and spiritual needs should not be ignored. he shall be paid an additional compensation of at least 30 % of his regular wage. [+50% of RW]  Scheduled rest day which is a regular holiday – entitled to additional compensation of at least 30% of his regular holiday rate of 200% based on his regular wage rate. while at other times. e. Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Article * V works on board the M/V Starfish. and should be properly compensated. including GOCC’s. FP] a. 39 (b)] RATIONALE – REST DAY * Ordinarily. V stays home with his family. especially during bad weather. Book I. Sundays and legal holidays are dedicated to reading and instruction so as to fill the mind with culture or some sort of advancement. Additional compensation of at least 30 percent of the regular wage Where such holiday work falls on the employee's scheduled rest day. he shall be entitled to an additional compensation of at least 50 percent of his regular wage. (Sec. IRR’s) [30%(200% of RW)] Art. in retail and service establishments regularly employing less than 10 workers. On these days. [Art. Those of the government and any of its political subdivisions. the vessel returns to port only after a few days. Sometimes. 94 : Every worker shall be paid his regular daily wage during holidays. DH. Can V claim the additional compensation for work on rest day? V’s work is such that no regular workdays and no rest days can be scheduled. nature of the work is such that he has no regular workdays and no regular rest days can be scheduled c. The employer shall pay such higher rate b. the laborer spends longer hours in the company of his family. d. * Art. Sunday or holiday work a. Public Utilities EE’s Association) Section 11 : CONDITIONS OF EMPLOYMENT . In such cases. M. c. except: [RSIO. The deprivation of that opportunity to satisfy mental.1 COVERAGE 1. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day.

(Mantrade vs. Rule IV. 25) 10. or Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . how much will he earn? Holiday pay rate/8 plus overtime pay of 30% of the holiday hourly rate = holiday pay rate/8 * 130%.1) 2. (Azucena) * A legal holiday falling on a Sunday creates no legal obligation for the ER to pay extra to the EE who does not work on that day. How much is he entitled to? X will get 200% of his daily rate plus premium pay pf 30% of the holiday pay = regular daily rate * 230%. Upon proclamation by the President of the Philippines. X-mas day (Dec. Good Friday 4. 94 : The ER may require an EE to work on a holiday but such EE shall be paid a compensation equivalent to twice his regular rate. National heroes day (last Sunday of August) 8. Trajano) * X was told by ER to work during a legal holiday which fell on a Sunday. IRR’s) 12. Muslim holidays may also be officially observed in other provinces and cities. to its monthly-paid EE’s. Bataan Day (April 9) 5. * To receive holiday pay. 30) 9. Both Muslims and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim Holidays * Monthly paid EE’s are not excluded from the benefits of holiday pay. REGULAR HOLIDAYS 1. 1. 8. Maundy Thursday 3.2 HOLIDAY PAY Art. 31  The dates of Muslim holidays shall be determined by the Office of the President of the President of the Philippines in accordance with the Muslim Lunar Calendar. Is she entitled to holiday pay? Yes. IRR’s : 58 * If required to work on regular holidays. X is an EE who is paid by results ad she works in a service establishment employing more than 10 persons. Bonifacio day (Nov. An EE may not be paid on holiday pay if he was absent on the day preceding holiday. Independence day (June 12) 7. Labor day (May 1) 6.  regular rate x 2 Mantrade/FMC Division Employees and Workers Union v. Rule IV. 30) NATIONWIDE SPECIAL HOLIDAYS 1. * R was absent without pay on December 24. (Sec. 1 2.LABOR LAW 1(Labor Standards & Termination of Employment ) Sec. Bacungan) * X is a manicurist in the D’Style Barbershop which has 20 barbers and manicurists. Rizal day (Dec. Book III. New Years day (Jan. (Wellington vs. Nov. Bacungan (86) The Secretary 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 EE should not have been absent without pay on the working day preceding the regular holiday. aside from the usual holiday pay. The Labor Code only exempts retail and service establishments regularly employing less than 10 workers. * If X works overtime during that day. Dec. Book III. Is he entitled to holiday pay for Christmas day? No.

Similarly. does not earn what he should earn on that day. (Union of Filipro vs. a faculty member paid by the hour is deprived of expected income. the resulting divisor would be 286 days (should actually be 287 days). April 9. The 100%. (Jose Rizal College vs. when viewed against this very convincing piece of evidence. provided. although forced to take a rest. (JRC vs. rallies and the like. Vivar) Transasia Phils. these faculty member must likewise be paid. (Azucena) Vacation and sick leave – must be claimed otherwise waived . whether extensions of class days be ordered or not. If he worked. the divisor should be 365 and not 251  HOURLY-PAID TEACHERS When a special public holiday is declared. Then he is entitled to holiday pay. and this should also be the same basis for computing unpaid holidays. when classes are called off or shortened on account of typhoons. if one is to deduct the unworked 52 Sundays and 26 Saturdays (derived by dividing 52 Saturdays in half since petitioners are required to work half-day on Saturdays) from the 365 calendar days in a year.LABOR LAW 1(Labor Standards & Termination of Employment ) 59 in the case of Maundy Thursday and Good Friday. Since the ten (10) legal holidays were never included in subtracting the unworked and unpaid days in a calendar year. hourly paid faculty members are not entitled to their pay for unworked regular holidays. floods.cannot be converted into cash unless allowed by employer FACULTY PRIVATE SCHOOL * Regular holidays specified by law are known to both school and faculty members as “no class days”. 1998: Araw ng Kagitingan & Maundy Thursday). Thus.g. As explained by Trans-Asia. On the other hand. NLRC (99) Trans-Asia's inclusion of holiday pay in petitioners' monthly salary is clearly established by its consistent use of the divisor of "286" days in the computation of its employees' benefits and deductions. he is entitled to 300% of his basic wage. GR 65482. the arguments put forward by petitioners to support their claim of non-payment of Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . It would be different if the day preceding the legal holiday was the EE’s rest day. The use by Trans-Asia of the "286" days divisor was never disputed by petitioners.  What an employer has voluntarily given cannot be unilaterally withdrawn  If the employees are already paid for all non-working days. in case of extensions the faculty members shall likewise be paid their hourly rates should they teach during the extensions. NLRC) DIVISOR AS FACTOR * The daily rate is a constant figure for the purpose of computing overtime and night differential pay and commutation of sick and vacation leave credits. A simple application of mathematics would reveal that the ten (10) legal holidays in a year are already accounted for with the use of the said divisor. This is management prerogative provided that the monthly pay comply with the least minimum rates prescribed under minimum wage laws. Dec. if he was absent on the day preceding the first holiday. the only logical conclusion would be that the payment for holiday pay is already incorporated into the said divisor. Emplower Assn. (Alcantara)  On leave with pay * Can monthly pay under employment contract already include pay for any unworked regular holiday within the month? Yes. 1. (See DOLE Explanatory Bulletin) As already explained. represents his basic pay for the 8-hour work. NLRC. monthly salary may include Holiday pay. v. in addition to 200%. an employee who is entitled to holiday pay should receive at least 200% of his basic wage even if he did not work on that day. hourly paid faculty members are however entitled to their regular hourly rate on days declared as special holidays or when classes are called off or shortened since the faculty member. the school should pay the faculty members their regular hourly rate on days declared as special holidays or for some reason classes are called off or shortened for the hours they are supposed to have taught. whether or not extensions are ordered. he was present or on leave with pay on the preceding Wednesday. 1987)  DOUBLE HOLIDAY On a double regular holidy (e. Thus.

CONDITIONS OF EMPLOYMENT – SERVICE INCENTIVE LEAVE VACATION AND SICK LEAVE . in the apropos words of the labor arbiter." that is to say. NLRC (98) Indeed if petitioner wanted to prove its payment of holiday pays and salary differentials. 203 in relation to Section 6 of the Rules Implementing Republic Act 6727. 4. or causes not attributable to the employees. Wellington used what it calls the "314 factor. 2. Those of the government and any of its political subdivisions including GOCC’s. including regular and special holidays. or. 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 twelve. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 314. 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. in order to properly account for the entirety of regular holidays and special days in a year as prescribed by Executive Order No. as above specified. instead of only 286 days.. Those who are already enjoying the benefit. would appear to be merely inferences and suppositions which. the stipulation in the CBA recognizing the entitlement of the petitioners to holiday pay with a concomitant provision for the granting of an "allegedly" very generous holiday pay rate. as well as days when no work is done by reason of fortuitous cause.e. The monthly salary thus fixed actually covers payment for 314 days of the year. as basis for determining the monthly salary. the burden of proof in this regard belongs to the employer. Section 12. 95 : The provision on service incentive leave shall not apply to : 1. 6. i. 5.LABOR LAW 1(Labor Standards & Termination of Employment ) 60 holiday pay. As earlier mentioned. Those enjoying vacation leave with pay of at least 5 days. it simply deducted 51 Sundays from the 365 days normally comprising a year and used the difference. "paled in the face of the prevailing company practices and circumstances abovestated. 7. SUNDAY Wellington Investment Inc v." and to pay that salary "for all days in the month whether worked or not. otherwise to reckon a year at more than 365 days.not granted by law 12. Managerial EE’s.1 COVERAGE Coverage * 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 * Art. But it did not." PROOF OF PAYMENT Building Care Corp v. Those employed in establishments regularly employing less than 10 workers Exempt establishments. the pre-condition stated in the Employees' Manual for entitlement to holiday pay. It had failed to comply with the mandate of the law. contrary to the legal provisions bearing on the point." and "irrespective of the number of working days therein. Trajano (95) In fixing the salary. not to the employee. 3. As public respondent ruled. the absence of a stipulation in the employees' appointment papers for the inclusion of holiday pay in their monthly salary. it could have easily presented proofs of such monetary benefits." The Court notes that there is a need to adjust the divisor used by Trans-Asia to 287 days.employer must still bind himself in CBA or grant it unilaterally . Domestic helpers and persons in the personal services of another.

IRR’s) VACATION AND SICK LEAVE  employer must still bind himself in CBA or grant it unilaterally  not granted by law COMPUTATION AND LIABILITY Sentinel Security Agency. rules. or miscarriage shall be paid Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Book III. v. and regulations to the contrary. Rule V. Labor Code). Ople) Makati Haberdashery Inc. in which case said period shall be considered as 1 year. 12.Unused SIL at the end of the year should be converted to cash * Art. This liability of the Client covers the payment of the service incentive leave pay of the complainants during the time they were posted at the Cebu Branch of the Client. Inc. Field personnel and other EE’s whose performance is unsupervised by the ER including those who are engaged on task or contract basis. 107 and 109. v. every MARRIED male employee in the private and public sectors shall be entitled to a paternity leave of SEVEN (7) days with full pay for the first four (4) deliveries of the LEGITIMATE spouse with whom he is cohabiting. 95 : 5 days incentive leave with pay for at least 1 year of service. (Cebu Institute of Technology vs. Book III. Labor Code. delivery shall include childbirth or any miscarriage. or those who are paid in a fixed amount of performing work irrespective of the time consumed in the performance thereof. 14 . (Sec. the liability accrued. they are not entitled to service incentive leave pay because as piece-rate workers being paid at a fixed amount for performing work irrespective of time consumed in the performance thereof. while private respondents are entitled to Minimum Wage. the indirect employer is jointly and severally liable with the contractor for the workers’ wages. Implementing Regulations. [The term ‘at least 1 year of service’ shall mean service within 12 months. * Teachers of private schools on contract basis are entitled to service incentive leave. COLA and 13th Month Pay.2 ENTITLEMENT . whether continuous or broken. Book III. Rule V. For the same reason private respondents cannot also claim holiday pay (Section 1(e). 3. reckoned from the date the EE started working. The service incentive leave is expressly granted by these pertinent provisions of the Labor Code PATERNITY LEAVE Reference: RA 8187 Paternity Leave Act of 1995 and Implementing Rules Coverage: Sec. they fall under one of the exceptions stated in Section 1(d).LABOR LAW 1(Labor Standards & Termination of Employment ) 61 8. MATERNITY LEAVE Reference: Sec. Implementing Regulations. NLRC (98) Under Arts. or that provided in the employment contract are less than 12 months. including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy. NLRC (89) On the other hand. purely commission basis. For purposes of this Act. in the same manner and extent that it is liable to its direct employees.A RA 8282 A female employee who has paid at least three (3) monthly contributions in the twelvemonth period immediately preceding the semester of her childbirth. even if the complainants were eventually transferred or reassigned. Rule IV. 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. 2 Notwithstanding any law. As service had been rendered.

b. contract or established policy. MINIMUM WAGES AND WAGE FIXING MACHINERY 13. Quisumbing. The full payment shall be advanced by the employer within thirty (30) days from the filing of the maternity leave application. willing and ready to work but was prevented by management or was illegally locked out.. 99 : The minimum wages for agricultural and non-agricultural EE’s and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. 128845. GR No. That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide. there can be no wage or pay UNLESS the laborer was able. should be paid similar salaries. The principle of “equal pay for equal work” which is institutionalized in this jurisdiction must be observed. suspended or dismissed. If an ER accords Ees the same position and rank. the ER is not bound to pay wages to a worker who has not actually rendered any service.  If there is no work performed by the EE. That if an employee should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS. (ISAE vs. The fact that some teachers are “foreign hires” and the others are “local hires” does not serve as a valid classification to justify the unequal salary of the two groups. c. skill. June 1. 2000) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . e. the presumption is that these Ees perform equal work.LABOR LAW 1(Labor Standards & Termination of Employment ) 62 a daily maternity benefit equivalent to one hundred percent (100%) of her average salary credit for sixty (60) days or seventy-eight days in case of caesarean delivery subject to the following conditions: a. That the maternity benefits provided under this section shall be paid only for the first four (4) deliveries or miscarriages.  SOLO PARENT’S ACT of 2000 (RA 8972) Parental Leave: 7 days a year if rendered at least 1 year of service Administrative/Criminal liability against discrimination BENEFITS: 1) Support (if below poverty line) 2) Housing 3) Educational 4) Medical Section 13. That the SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof. or without the latter having been previously notified by the employer of time of the pregnancy. the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.  EQUAL PAY FOR EQUAL WORK Persons who work with substantially equal qualifications. Explain the rule “a fair day’s wage for a fair day’s labor” ? Unless specifically required by law. effort and responsibility. d. That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for the same period for which daily maternity benefits have been received. under similar conditions.1 MINIMUM WAGES Art. et al. f.

Eagle Security Agency. This places the petitioner's liabilities under the scope of the NLRC. Inc. all government-owned or controlled corporation and institutions as well as non-profit private institutions. 61 : Apprentices : Wage rates shall in no case fall below 75 % of the applicable minimum wage. 75 : Learners : Wage rates shall begin at not less than 75% of the applicable minimum wage. subdivisions and instrumentalities. [“ Fair and reasonable value” shall not include any profit to the ER or to any person affiliated with the ER. Section 3. its liabilities. They claim for minimum wages for non-agricultural workers. piece. or organizations (Art. Is the claim valid? No. . NLRC) MINIMUM WAGE Art. NLRC. Art. v. or other method of calculating the same. They perform activities which fall under the primary aspect of agriculture and the cutting of trees to be used for fencing is incidental to the farming operations and falls under the secondary aspect of agriculture. are provided in Articles 106. Title II on Wages specifically provides that the term "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. 107 and 109 of the Labor Code.LABOR LAW 1(Labor Standards & Termination of Employment ) 63 Give 2 aspects of “agriculture”? The primary aspect covers cultivation and tillage of the soil.  which is payable by an ER to an EE under a written or unwritten contract of employment for work done or to be done. however designated. Art. Fisheries Development Authority v. Labor Code. GOVERNMENT AGENCY Phil. Moreover. Rule VII. 124 : All recognized learnership and apprentice agreements shall be considered automatically modified insofar as their wage clauses are concerned to reflect the prescribed wage rates [set by the Regional tripartite and Wages Productivity Board]. or commission basis. The secondary aspect covers any practices performed by a farmer on a farm as an incident to or in conjunction with the farming operations. Book III. NLRC (92) Notwithstanding that the petitioner is a government agency. (LEGAL TENDER)  capable of being expressed in terms of money. of board. or for services rendered or to be rendered * and includes the fair and reasonable value. IRR’s : * Workers in duly registered cooperatives when so recommended by the bureau of Cooperative Development and upon approval of the Secretary of Labor . which are joint and solidary with that of the contractor. * Farmers employed by B cultivate the soil and plant and harvest tobacco and they also cut big trees grown on the land which they used for fencing and repair of the owner’s house. 98 This Title shall not apply  to farm tenancy or leasehold  domestic services and  persons working in their respective homes in needle or in any cottage industry duly registered in accordance with law. Art. Book Three. growing and harvesting of any agricultural and horticultural commodities and raising of livestock and poultry. They are still agricultural workers. Art. task. COVERAGE * Art. 97 (1) : “Wage” paid to * The remuneration or earnings. . as determined by the Secretary of Labor. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 97 [b]. 80 : Handicapped Workers : Wage rates shall not be less than 75% of the applicable minimum wage. whether fixed or ascertained on a time. Rabago v. lodging or other facilities customarily furnished by the ER to EE.

If the company cannot pay a living wage. Such holiday pay shall not be less than the applicable statutory minumum wage rate. Inc. willing and ready to work but was illegally locked out. who now receive inadequate wages on which to support themselves and their families. the employer cannot pay a subsistence wage. who operates at lower cost by reasons of paying his workers a wage below subsistence. individual or collective agreement or company policy or practice. progressive and fair-minded management. h) 13th month pay. . i) other benefits granted by law. v. It raises the standards of competition among employers. suspended or dismissed. or management and employee of a "fair day’s wage for a fair day’s labor" remains as the basic factor in determining employees’ wages. d) Holiday pay. or otherwise illegally prevented from working. it has no business operating at the expense of the lives of its workers from the very start. a situation which we find is not present in the instant case. piece-rate EEs are entitled to the ffg minimum wage and benefits: a) The applicable statutory minimum daitly rate. If there is no work performed by the employee there can be no wage or pay unless. Rule IV of the IRR. On the basis on existing labor regulations. It shall not be less than his average daily earnings for the last 7 actual working days immediately preceding the regular holiday. of course.B. but on government economic policies concerning productivity in all areas and not only in the clothing or textile industries. Second methods of operation. b) Yearly service incetive leave of 5 days with pay c) Night shift differential pay. and an adequate minimum wage go hand in hand.LABOR LAW 1(Labor Standards & Termination of Employment ) 64  The payment of minimum wages is not dependent on the ER’s ability to pay." (Explanatory Note to H. It benefits all wage earners indirectly by setting a floor below which their remuneration cannot fail. usually allow petitions for exemption from prescribed wage rates. 1476) EFFECT INABILITY PAY Phil. then he should not continue his operation unless he improves his methods and equipment so as to make the payment of the minimum wage feasible for him. It would neither be fair nor just to allow private respondents to recover something they have not earned and could not have earned because they did not render services at the Kalibo office during the stated period. Apparel Workers Union v. NLRC (81) The stability of the economy does not depend on the employer alone. since it would protect the fair-minded employer who voluntarily pays a wage that supports the wage earner from the competition of the employer. 8.  According to Sec. NLRC (2000) The age-old rule governing the relation between labor and capital. No. g) Premium pay (conditional. f) Overtime pay (conditional). FAIR DAY PAY Aklan Electronic Cooperative. There is not even an intimation that the company is losing. Gatchalian (59) "The establishment of the maximum wage benefits directly the low-paid employees.Wage Orders.  All workers paid by result (Pakyaw or Task basis) shall receive not less than the prescribed wage rates per 8 hrs work a day or a proportion thereof for working less than 8 hrs. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . e) Meal and rest periods. the laborer was able. 94). EEs paid by results or output are entitled to holiday pay (Art. If. The ER cannot exempt himself from liability to pay minimum wages because of poor financial condition of the company. otherwise the employer is wasting the toil of the worker and the material resources used in the employment. BENEFICIARIES People v. however. in fact. It is the living wage of the workers which is the basis of a stable economy.

LABOR LAW 1(Labor Standards & Termination of Employment )
A. FACILITIES AND SUPPLEMENTS

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* The law guarantees the laborer a fair and just wage. The “minimum wage” can by no means imply only the actual minimum. Some margin or leeway must be provided, over and above the minimum, to take care of contingencies, such as increase in wants, and to provide means for a desirable improvement in his mode of living. (Atok-Big Wedge vs. Atok-Big-Wedge Mutual Benefit Association) Millares v. NLRC (99) In Songco the Court explained that both words (as well as salary) generally refer to one and the same meaning, i.e., a reward or recompense for services performed. Specifically, "wage" is defined in letter (f) as the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. Stated differently, when an employer customarily furnishes his employee board, lodging or other facilities, the fair and reasonable value thereof, as determined by the Secretary of Labor and Employment, is included in "wage." In order to ascertain whether the subject allowances form part of petitioner's "wages," we divide the discussion on the following - "customarily furnished;" "board, lodging or other facilities;" and, "fair reasonable value as determined by the Secretary of Labor." "Customary" is founded on long-established and constant practice connoting regularity. The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and forming part of salary because the nature of the grant is a factor worth considering. We agree with the observation of the Office of the Solicitor General that the subject allowances were temporarily, not regularly, received by petitioners because In the case of the housing allowance, once a vacancy occurs in the company-provided housing accommodations, the employee concerned transfers to the company premises and his housing allowance is discontinued . . . . On the other hand, the transportation allowance is in the form of advances for actual transportation expenses subject to liquidation . . . given only to employees who have personal cars. The Bislig allowance is given to Division Managers and corporate officers assigned in Bislig, Surigao del Norte. Once the officer is transferred outside Bislig, the allowance stops. Although it is quite easy to comprehend "board" and "lodging," it is not so with "facilities." Thus Sec. 5, Rule VII, Book III, of the Rules Implementing the Labor Code gives meaning to the term as including articles or services for the benefit of the employee or his family but excluding tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employer's business. The Staff/Manager's allowance may fall under "lodging" but the transportation and Bislig allowances are not embraced in "facilities" on the main consideration that they are granted as well as the Staff/Manager's allowance for respondent PICOP's benefit and convenience, i.e., to insure that petitioners render quality performance. In determining whether a privilege is a facility, the criterion is not so much its kind but its purpose. That the assailed allowances were for the benefit and convenience of respondent company was supported by the circumstance that they were not subjected to withholding tax. States Marine Corporation v. Cebu Seamen’s Association, Inc. (63)

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'Supplements', constitute extra remuneration/ special benefits given to or received by the ees over and above their ordinary earnings or wages, 'Facilities' are items of expense necessary for the laborer's and his family's existence and subsistence, so that by express provision of law they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not furnished, the laborer would spend and pay for them just the same."  Requisites for Deductibility or Facilities by ER 1. Proof must be shown that such facilities are customarily furnished by the trade 2. The provision of deductible facilities must be voluntarily accepted in writing by the EE. 3. Facilities must be charged at Fair & Reasonable Value  The term “FACILITIES” does not include tools of the trade or article or services primarily for the benefit of the ER or necessary to the conduct of the ER’s business. B. SUPPLEMENTAL FACILITY Distinguish between supplements and facilities? Supplements – Extra remuneration or special privileges or benefits given to or received by the worker over and above his ordinary earnings or wages. - granted for the convenience of the ER Facilities – Items of expense necessary for the laborer’s and his family’s existence and subsistence. They form part of the wage and when furnished by the ER are deductible therefrom since if they are not furnished, the laborer would spend and pay for them just the same i.e. meals; housing for dwelling purposes; fuel including electricity, gas, water for the non-commercial personal use of the EE; and other articles and services given primarily for the benefit of the worker or his family. - for the benefit of the worker and his family * The criterion in determining whether an item is a supplement or facility is not so much with the kind of benefit or item given, but its purpose. (State Marine vs. Cebu Seamen’s Association) * CMC has 3 buses used to transport its workers, free of charge from Makati to its plat in Muntinlupa. The buses became dilapidated and the service was discontinued by the company. The EE’s demanded for their replacement. Decide with reasons. The company may be compelled to continue providing the transportation free of charge. This is considered a supplement given over and above the ordinary earnings or wages of the workers. Once given, a supplement cannot be eliminated or diminished. (Alcantara) Test on whether or not items are facilities [C F, V A, F R] a. Are these items automatically furnished by the trade? b. Did the employee voluntarily accepted the same in writing? c. Is the value thereof fair and reasonable? If the employer fails to prove this: a. Then it is a supplement not a facility. b. Once given, a supplement cannot be eliminated or diminished. c. Grant of bonus may be unilaterally be reduced by the employer if it depends on profits acquired.

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* Because he lived 50 kilometers from its work, X requested his ER if he can sleep in the company premises. The latter agreed with the condition that he will deduct P5.00 per day as board charges from X. Is the deduction legal? No. Lodging is not customarily finished by the ER to his EE’s. The deduction, furthermore, is not with the written consent of X.  NON DIMINUTION RULE Benefits being given to EEs cannot be taken back or reduced unilaterally by the ER because the benefits have become part of the employment contract, written or unwritten.  Where the EE alleges non-payment of wages/commissions the ER has the burden to prove payments.

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 Payment of wages through ATM is allowed. C. CASH WAGE – legal tender

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What is basic salary? In its common, generally accepted meaning, it is the rate of pay for a standard work period, exclusive of such additional payment as bonuses and overtime. (BoicTakeda vs. Dela Serna) * Are emergency cost of living allowances considered part of regular wage? Yes. This is taken into account in determining overtime and premium pay , premium contributions, social security, maternity pay, etc. (EO 178) CASH WAGE/COMMISSIONS Songco v. NLRC (90) The words "wages" and "salary" are in essence synonymous, both words generally refer to one and the same meaning, that is, a reward or recompense for services performed. Likewise, "pay" is the synonym of "wages" and "salary" Iran v. NLRC (98) While commissions are incentives to inspire employees to put more industry on the jobs assigned to them, still these commissions are direct remuneration for services rendered. Commissions have been defined as the recompense, compensation or reward of an agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal. The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that commissions are part of a salesman's wage or salary. WAGES AND SALARY Gaa v. Court of Appeals (85) Article 1708 used the word "wages" and not "salary" in relation to "laborer" when it declared what are to be exempted from attachment and execution. The term "wages" as distinguished from "salary", applies to the compensation for manual labor, skilled or unskilled, paid at stated times, and measured by the day, week, month, or season, while "salary" denotes a higher degree of employment, or a superior grade of services, and implies a position of office: by contrast, the term "wages" indicates considerable pay for a lower and less responsible character of employment, while "salary" is suggestive of a larger and more important service (35 Am. Jur. 496). Arms Taxi v. NLRC (93) While a salary is a fixed compensation for regular work or for continuous service rendered over a period of time (Moreno's Philippine Law Dictionary, 3rd Ed., p. 852 citing Lee Tee vs. Ching Chiong, 17518-R, January 13, 1959), a commission is a percentage or allowance made to a factor or agent for transacting business for another (Supra, p. 171 citing People vs. Sua Bok, 1 O.G. 689) Iran v. NLRC (98) There is no law mandating that commissions be paid only after the minimum wage has been paid to the employee. Verily, the establishment of a minimum wage only sets a floor below which an employee’s remuneration cannot fall, not that commissions are excluded from wages in determining compliance with the minimum wage law. This conclusion is bolstered by Philippine Agricultural Commercial and industrial Workers Union v. NLRC, where this Court acknowledged that drivers and conductors who are compensated purely on a commission basis are automatically entitled to the basic minimum pay mandated by law should said commissions be less than their basic minimum for eight hours work. It can, thus, be inferred that were said commissions equal to or even exceed the minimum wage, the employer need not pay, in addition, the basic minimum pay prescribed by law. It follows then that commissions are included in determining compliance with minimum wage requirements.

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100 : Nothing in this Book shall be construed to eliminate or in any way diminish supplements. operators paid them a fixed monthly emergency allowance which included non-working days. 3. expansion and growth. The company then changed its mode of payment from time basis to piecework at P0. To Allow business and industry reasonable returns on investment. 2. EFFECT . (Meycauayan College vs. To ensure Decent standard of living for the workers and their families.00. To guarantee the rights to its Just share in the fruits of production. following the principle of “no work.3 AGENCIES FOR WAGE FIXING MACHINERY Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . for want of an agreement between the parties to treat the increase in living allowances as applicable to the wage increases. Through time and motion studies set by the DOLE. The workers would not suffer since it is within their capability to clean and inspect the number of containers to enable them to at least earn the rate they were receiving at the time the change was effected. and 4. (Filipinas Golf vs. Can the operators now discontinue the practice and pay the batillos only for actual days worked. may become part of a regular compensation. They cannot however be deprived of benefits they were already enjoying at the time of such change. To enhance Employment generation in the countryside through industry dispersal. The company has the right to change the basis of the payment of the wages of the workers.2 RATIONALE FOR WAGE RATIONALIZATION * Section 2. Wage Rationalization Act : It is hereby declared the policy of the State to rationalize the fixing of minimum wages and to promote productivity-improvement and gainsharing measures: [J A D E] 1. From 1976 to 1980. Art. no pay”? No. Apparel vs. Is this valid? Yes. EE’s are entitled to the full amounts of both a wage increase under a CBA and an increase in living allowances prescribed by law during the period when both increases are concurrently effective. NLRC) * The work of batillos.40 per container. 100 prohibits the elimination or diminution of existing benefits. Benefits voluntarily given cannot be unilaterally withdrawn by the ER. NLRC) E. * Unless agreed otherwise. (Pp vs. It benefits all wage earners indirectly by setting a floor below which their remuneration cannot fall. While it may be enforced once it forms part of a contractual undertaking. cargadores of fish catch. NLRC) F. * OR employer agreed to give its regularly without any condition imposed for its payment 13. or other EE benefits being enjoyed at the time of promulgation of this Code. the grant of such benefit is not mandatory so as to be considered a part of labor standard law. * Workers in a plastic manufacturing company are able to clean and inspect only 250 containers for 8 hours despite repeated appeals from management. (Alcantara) ** While normally discretionary. (Plastic Town vs. by reason of its long and regular concession. (Phil. the ER was able to ascertain that an ordinary worker can clean and inspect 450 containers for 8 hours.INABILITY TO PAY 68 * If a company cannot pay a living wage. BENEFITS Art. Drilon) Thus. BENEFICIARY OF THE MINIMUM WAGE LAW * The minimum wage law directly benefits the lowly paid EE’s who receive inadequate wages on which they support themselves and their families. the grant of a gratuity or bonus. Gatchalian) G. They were paid a daily rate of P150. It increases the standard of competition among ER’s since it would protect the fair-minded ER who operates at lower costs by reason of paying his workers a wage below subsistence.LABOR LAW 1(Labor Standards & Termination of Employment ) D. GRATUITY and WAGES * Gratuity – That paid to the beneficiary for past services rendered purely out of the generosity of the giver or grantor. statutory benefits are apart from contractual benefits. 13. were limited to days of arrival of fishing vessels. it has no business operating at the expense of the lives of the workers.

incomes and productivity improvement for their respective regions.LABOR LAW 1(Labor Standards & Termination of Employment ) Advisory agency – National Wages and Productivity Commission 69 Art. To act as the national consultative and advisory body to the President and Congress on matters relating to wages. Wage adjustment vis-à-vis the consumer price index. programs and projects relative to wages. Fair return of the capital invested and capacity to pay of ER’s 8. To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional. tribunal or any entity against any proceedings before the Commission or the regional Boards. 4. The need to induce industries to invest in the countryside. process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order. consider the following: 1. 2. In the determination of such regional minimum wages. 122 : Regional Tripartite Wages and Productivity Boards – In all regions. the Regional Board shall. To receive. The prevailing wage levels 7. 5. including autonomous regions. Improvements in the standard of living 6. To develop plans. industry and national levels. b. Effects on employment generation and family income. among other relevant factors.] Art. provinces or industries therein and to issue the corresponding wage orders. Art. d.4 AREA MINIMUM WAGES AND CRITERIA * Art. c. To determine and fix minimum wage rates applicable in their region. 126 : No preliminary or permanent injunction or temporary restraining order may be issued by any court. and Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . incomes and productivity improvement at the enterprise. WAGE FIXING AGENCY Art. subject to guidelines by the Commission. tribunal or other entity against any proceedings before the Commission or the regional Boards. 3. 120 : National Wages and Productivity Commission – attached to the DOLE the policy and program coordination. Give at least 5 major powers and functions of the National Wages and Productivity Commission : a. [Implementation of the plans shall be through the respective offices of the DOLE but the Regional Boards shall have technical supervision over the said DOLE offices. efficiency and general well-being of the EE’s within the framework of the national economic and social development program. 124 : Standards/Criteria for Minimum Wage Fixing – Regional minimum wages shall be nearly as adequate as is economically feasible to maintain the minimum standards of living necessary for the health. incomes and productivity. The cost of living and changes and their families. Give at least 3 major powers and functions of the Regional Tripartite and Productivity Boards within their territorial jurisdiction: 1. 3. To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards . To formulate policies and guidelines on wages. 126 : No preliminary or permanent injunction or temporary restraining order may be issued by any court. 2.  The ECOLA now forms part regular wage  Employees paid by results should receive not less than the applicable wage rates provided for 8 hours workday 13. provincial or industry levels. The demand of living wages.

 A wage order issued without the required public consultation and newspaper publication is NULL and VOID. the Court held the strike illegal. Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order to the Commission within 10 calendar days from the publication of such order. rather than strikes. The legislative intent is to encourage the parties to seek solution to the problems of wage distortions through voluntary negotiation or arbitration. provinces or localities if in the judgment of the Regional Board conditions make such local differentiation proper and necessary to effectuate the purpose of this Title. METHODS OF FIXING *The determination of wages has generally involved two methods. a severe contraction is enough. or other concerted activities of the EE’s or management. 13. (Art. The 1st method involves the fixing of determinate amount that would be added to the prevailing statutory minimum wage. 24 : Wage Distortion . It shall be mandatory for the Commission to decide such appeal within 60 calendar days from the filing thereof. The equitable distribution of income and wealth along the imperatives of economic and social development. length of service. These wages shall include wages varying within industries. the “floor-wage” method and the “salary-ceiling” method. the Regional Board shall conduct public hearings. lockouts. based on the standards and criteria herein prescribed. * A severe contraction of the wage or salary differences is enough How is a wage distortion corrected? Any dispute arising from wage distortions shall be resolved through the grievance procedures under their CBA. NLRC) In a case where a union went on strike over a salary distortion dispute. 24) The law recognizes the validity of negotiated wage increases to correct wage distortions. consultations. and if it remains unresolved. (ALU-TUCP vs. through the NLRC which shall decide the dispute within 20 calendar days. 13.5 WAGE ORDER * Art. If there is no recognized labor union or there are no collective bargaining agreements. NLRC)  For SALARY DISTORTION to exist (Art.LABOR LAW 1(Labor Standards & Termination of Employment ) 70 9. the Regional Board shall investigate and study pertinent facts and. city and municipal officials and other interested parties. 6 WAGES AND PRODUCTIVITY MEASURES Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . provincial. FORMULA to correct a Salary Distortion: Minimum wage = % x Prescribed Increase = Distortion Adjustment Actual Salary  Any issue involving wage distortion is not a valid ground for a Strike or Lock-out. (Ilaw at Buklod ng Manggagawa vs. 124).Distortion where an increase in the prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage salary rates between and among EE groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills. the dispute shall be settled through the National Conciliation and Mediation Board. or if unresolved after 10 days of conciliation. or other logical bases of differentiation. 123 : Whenever conditions in the region so warrant. shall proceed to determine whether a Wage Order should be issued. the wage adjustment is applied to EE’s receiving a certain denominated salary ceiling. giving notices to EE’s and ER’s groups. through arbitrary arbitration. the law does not require that there be an elimination or total abrogation or quantitative wage or salary differences. (ECOP vs. In the performance of its wage-determining functions. NWPC) WAGE DISTORTION Art. In the 2 nd method.

The fact that said method of paying the minimum wage was not only agreed upon by both parties in the employment agreement but even expressly requested by private respondents. or b. NCC)] Payment of wages by check or money order shall be allowed when : a. vouchers. [The laborer’s wage shall be paid in legal currency. Art. is when the circumstances prescribed in the second paragraph of Article 102 are present. is necessary because of special circumstances as specified in appropriate regulations to be issued by the Secretary of Labor or as stipulated in a CBA. b. The only instance when an employer is permitted to pay wages in forms other than legal tender. The payments are made at intervals not exceeding 16 days. deterioration of peace and order conditions 2. actual or impending emergencies – calamity . ER does not receive any pecuniary benefit d. Art. that is. does not shield petitioner. such manner of payment is customary on the date of the effectivity of this Code. No ER shall make payment with less frequency than once a month. That final settlement is made upon completion of work. 1705. coupons. written consent of EE c. 7. chits or any object other than legal tender. * Force Majeure : Immediately after the force majeure or the circumstances have ceased. the term “wages”. * “Salary” – Denotes a higher degree of employment. week. except as otherwise provided by such regulations as the Secretary of Labor may prescribe under conditions to ensure greater protection of wages. Article 102 of the Labor Code is clear. skilled or unskilled paid at stated times. bank – 1 km b. while “salary” is suggestive of a larger and more important service. * Task cannot be completed in 2 weeks in the absence of a CBA or arbitration award: a.Time spent collecting wages considered compensable his work Sec. or season. month. 103 : Time of Payment – * Generally : Once every two weeks or twice a month at intervals not exceeding 16 days. tickets.ER must provide or reimburse transportation back and forth . in proportion to the amount of work completed. (Gaa vs. or a superior grade of services. Wages shall be paid only by means of legal tender. 1. petitioner's practice of paying the private respondents the minimum wage by means of legal tender combined with tuna liver and intestines runs counter to the abovecited provision of the Labor Code. EE given time to withdraw from the bank – considered as compensable his work - Congson v. CONDITIONS a. by checks or money order. CA) WAGE PAYMENT Art. 104 : Place of Payment : Payment of wages shall be made at or near the place of undertaking. NLRC (59) Undoubtedly. 102 : Forms of Payment : No ER shall pay the wages of an EE by means of promissory notes. and measured by the day. It indicates considerable pay for a lower and less responsive character of employment. tokens. even when expressly requested by the EE. (Art. and implies a position of office. by contrast.LABOR LAW 1(Labor Standards & Termination of Employment ) WAGE/SALARY Differentiate wages from salary? 71 * “Wages” – Compensation for manual labor. RA 6727 (Wage Rationalization Act) Upon written permission of the majority of the Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .

LABOR LAW 1(Labor Standards & Termination of Employment ) 72 employees or workers concerned.He shall not in any manner force. . Exceptions: [Allowable Deductions] Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . for and in behalf of the latter. employers may adopt a system of payment other than in the workplace. The employer shall assume responsibility in case the wage protection provisions of law and regulations are not complied with under the arrangement. as amended. businesses and other entities with 25 or more employees and located within 1 kilometer radius to a commercial. 4. The ATM system of payment is with the written consent of the employees concerned. not for each and everyone of them individually. commodities or other property from the ER or from any other person. 105 Direct Payment of Wages – * General Rule : Wages paid directly to workers. However. The employees are given reasonable time to withdraw their wages from the bank facility which time. There is a bank or ATM facility within a radius of one kilometer to the place of work 5. Rule VIII. Is the objections valid? Yes. practices and technology. 2. Labor Advisory on Payment of Salaries thru Automated Teller Machine (ATM) “Based on Article 104. if done during working hours. benefits and deductions for particular period. as amended. or otherwise make use of any store or services of such ER or any other person. * Exceptions: 1. Art. His own behalf or in behalf of any person. as well as the provisions of Sec. in which case the worker may be paid through another person under written authority given by the worker for the purpose. said purchases on credit will be considered payment of his wages. savings or rural bank shall pay the wages and other benefits of their employees through any of the said banks and within the period of payment of wages fixed by PD 422. Upon request of the concerned employee/s. Escano) WAGE PROHIBITION Art. The System shall allow workers to receive their wages within the period or frequency and in the amount prescribed under the Labor Code. shall be considered compensable hours worked. provided that the following conditions are met: 1. 112 : Non-Interference in Disposal of Wages – . An EE purchases 10 cans of the product but objects to the application of his purchases as part of his wages. the employer shall issue a record of payment of wages. The application of his purchases on credit as part of his wages would amount to compelling him to receive as wages the products in lieu of legal tender.No ER shall limit or otherwise interfere with the freedom of any EE to dispose of his wages. * A meat processing company gives a 25% discount to EE’s for purchase on credit of its product. DIRECT PAYMENT Payment of wages to leader of group not violation of direct payment since the contract to perform the services was made by the leader of the group. 2. Force majeure rendering such payment impossible or under the special circumstances. (Alcantara) May an ER make any deductions from the wages of EE’s? General Rule : No. otherwise known as the Labor Code of the Philippines. 3. companies. Where the worker has died. A. such as through automated teller machine (ATM) of banks. compel or oblige his EE’s to purchase merchandise. Book III of the Code’s Implementing Rules and considering present-day circumstances. 4. in case the ER may pay the wages of the deceased worker to the heirs of the latter without the necessity of intestate proceedings. There shall be no additional expenses and no dimunition of benefits and privileges as a result of the ATM system of payment 7. all private establishments. 6. (Bermiso vs.

222 . 4. from the transaction. Art. Deductions as a disciplinary measure for habitual tardiness (Alcantara) 8. 9. J is clearly shown to be responsible 3. Any contract. wages may be the subject of execution or attachment. 1703) 11. (Alcantara) 6. agreement or arrangement of any sort to the contrary shall be null and void. The practice of making deductions is a recognized one or is necessary and desirable in the business of the ER.It shall be unlawful to make any deduction from wages of any EE for the benefit of the ER or his representative or intermediary as consideration of a promise of employment or retention in employment. When the ER is engaged in such trades. when such debts become due and demandable. stealth. intimidation. directly or indirectly. shelter. (Art. The amount of deductions is fair and reasonable and does not exceed the actual loss or damage. Rule VIII. 59. he was told that it was an industry practice that the value of plates broken by him while in the performance of his work will be deducted from his wages. Deductions for unions dues where the right to check-off has been recognized by the ER or individual EE himself. Deductions for debts due the ER from the EE. A. 113) 4. clothing and medical attendance. Deductions for reimbursement of loss or damage to tools. At the time of his employment. 114 : Deposits for Loss or Damage : No ER shall require his worker to make deposits from which deductions shall be made for the reimbursement for loss or damage to tools. Art. Deductions of SSS. however that attorneys fees may be charged against union funds in an amount agreed upon by the parties.  To withhold any amount from the wages of a worker or  Induce him to give up any part of his wages by force. (Art. IRR’s) Art. (Sec. He is given reasonable opportunity to show cause why the deduction should not be made. 116 : Withholding of Wages and kickbacks prohibited – It shall be unlawful for any person. or b. May management deduct the said value from J’s wages? Yes. (Alcantara) 12. (Id) 5. (Art. Deductions made with the written authorization of the EE for payment to a 3rd person and the ER agrees to do so. (Art. 117 : Deduction to ensure employment . Deductions for value of meals and others. 114) 7. Salary deductions of a member of a cooperative (Art. 1708 : The laborer’s wages shall not be subject to execution or attachment except for debts incurred for food. shelter. provided the following conditions are met: [PRO-F20] 1. Book III. in trades. but only for debts incurred for food. occupations or business where the practice of making such deductions is recognized. materials or equipment supplied by the ER except: a. The deduction does not exceed 20% of J’s wages in a week. 1706. is necessary or desirable as determined by the Secretary of Labor in appropriate rules and regulations. Withholding tax (NIRC) 3. 14. Medicare and Pag-ibig Premiums (Alcantara) 2. materials or equipment supplied by the ER to the EE.No attorneys fees. WAGE DEDUCTION Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . occupations or business where the practice of making deductions or requiring deposits is a recognized one. provided that the latter does not receive any pecuniary benefit. In court awards. clothing and medical attendance. directly or indirectly. Agency fees under Art. negotiation fees or similar charges of any kind arising from any collective bargaining negotiations or conclusions of the CBA shall be imposed on any individual member of the contracting union: Provided. 248 (e) of the Code. NCC) 10. Deductions for reimbursement of insurance premium advanced by the ER where the worker is insured with his consent by the former.LABOR LAW 1(Labor Standards & Termination of Employment ) 73 1. 2. * J works as a dishwasher in a big restaurant. RA 6938) Art. threat or by any other means whatsoever without the workers consent. Art. 5.

LABOR LAW 1(Labor Standards & Termination of Employment ) 74 * An obligation arising from non-payment of stock subscriptions to a corporation cannot be offset against a money claim of an EE against an ER. it is incumbent upon the driver to restore the unit he has driven to the same clean condition when he took it out. NLRC (2000) With regard to the amount deducted daily by private respondent from petitioners for washing of the taxi units. (Alcantara) * Z borrowed P500. Taking pity. Inc. (Gaa vs. 1706 of the NCC. except for debts incurred for food. When the loan became due and demandable. We note that after a tour of duty. Sec. 114 does not permit deposits for deficiency in the remittances of drivers’ “boundary” but the requirement for deposit for car wash payments is lawfull. However. Z did not pay his ER. B. shelter. since the sum retained is not excessive and is kept by the ER only for a reasonable period. GARNISHMENT/ATTACHMENT * Under Art. without the written authorization of Z. Is the practice legal? It depends. (Manila Trading vs. Also. we view the same as not illegal in the context of the law. Inter-Island Dockmen and Labor Union) * Art 1708 which exempts laborers’ wage from attachment or execution does not apply to a responsibly placed EE. (Apodaca vs. Is this valid? No. NLRC) * The wife of an EE tells the manager that her husband has not been giving her support. for all intents and purposes. These are refunded at the end of the month. deduct the loan from the latter’s wages? Yes. (Alcantara) Radio Communication of the Phil. 1708 of the NCC. Car washing after a tour of duty is indeed a practice in the taxi industry and is in fact dictated by fair play. then such is legal. Compensation can take place under Art. if no shortages are incurred.. Hence. NLRC) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .00 from his ER. Manila Trading Labor Association) C. DEPOSIT * A marketing firm retains 5% of the weekly salary of its collectors as a deposit to answer for any shortage in their collections. (5-J Taxi vs. the deductions for the union service fee in question are authorized by law and do not require individual check-off authorizations. v. (Alcantara) * A taxicab company requires its drivers to make deposits to defray boundaries and to cover car wash payments. supervisory or managerial EE. CA) D. Jardin v. This is upon the theory that it is necessary to promote the welfare and integrity of the union to which he belongs. of Labor (89) Article 222 Labor Code requires an individual written authorization as a prerequisite to wage deductions seeks to protect the employee against unwarranted practices that would diminish his compensation without his knowledge and consent. May the ER. the drivers are not entitled to reimbursement of washing charges. but only to the rank-and-file. the manager instructs the cashier to deduct 1/3 of the EE’s pay and give the same to the wife. Is this legal? Art. clothing and medical attendance” (Pacific Customs vs. the deductions required of the petitioner and employees do not run counter to the express mandate of the law since the same are not unwarranted or without their knowledge and consent. If it is a recognized practice of ER’s to require such deposits. The EE concerned did not give his written authorization for the deduction. “laborers’ wages shall not be subject to execution or attachment. CHECK-OFF * An ER may be compelled to “check-off” union dues from the wages of his EE when the ER has been authorized to do so by the EE.

107) Labor-Only Contractor : The conclusion is different where there is “labor-only” contracting. The “labor-only” contractor i. job or project. Indirect ER’s and “Labor-only” contractors are the following: General Rule : An ER who enters into a contract with a contractor to perform work for the ER. 7 LIABILITY OF ER AND OTHER PARTIES ER. (PBC vs. a former EE of ABC entered into an agreement with the company wherein C will hire person to work in the painting department and the company will reimburse him for whatever wages he will pay plus 10% of this amount. contracts with an independent contractor for the performance of any work. 119 : It shall be unlawful for any person to make any material false statement. (Id) The law itself. the keeping of the records in any other place is prohibited. A. discharge or in any manner discriminate against any EE who has filed any complaint or instituted any proceedings under this Title or has testified or is about to testify in such proceedings. does not thereby create an ER-EE relationship between himself and the EE’s of the contractor. association or corporation which. report or record filed or kept pursuant to the provisions of this Code. as the case may be fail to pay the same.e. If C fails to pay the wages. to prevent any violation of this Code.e. (Art. INDEPENDENT CONTRACTING CONTRACTOR AND SUBCONTRACTOR AND LABOR-ONLY The rules on the liability of Job contractors. * C. Indirect ER : These provisions shall likewise apply to any person. this time for a comprehensive purpose. NLRC)  The legitimate job contractor provides services while the labor-only contractor only provides manpower. 118 : It shall be unlawful for an ER to reuse to pay or reduce the wages and benefits. the ER who contracted out the job to the contractor becomes jointly and severally liable with the contractor to the EE’s of the latter “to the extent of the work performed under the contract” as if such ER were the ER of the contractor’s EE. is considered “merely as an agent of the ER. 108 : An ER or indirect ER may require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract. Art. not being an ER. (Alcantara) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . NLRC) Nonetheless : When a contractor fails to pay the wages of his EE’s in accordance with the Labor Code.” The statute makes the ER directly responsible to the EE’s of the “labor-only” contractor as if such EE’s had been directly employed by the ER. partnership .  Job contractor undertakes to perform a specific job while labor-only contractor merely provides personnel to work for the employer. can the workers claim from the company? Yes. (Broadway Motors vs. C is merely a “labor-only” contractor and is considered merely an agent of the ER who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. person or intermediary. on condition that the bond will answer for the wages due the EE’s should the contractor or subcontractor. Thus the EE’s of the contractor remain the contractor’s EE’s and his alone. (South Motorists vs. task. RECORD KEEPING * The records shall be kept and maintained in or about the premises of workplace or in the branch where the EE is regularly assigned. Tosoc) 14. Art. in order to ensure that the latter get paid for wages due them. The statute establishes an ER-EE relationship between the ER and the EE’s of the “labor-only” contractor.LABOR LAW 1(Labor Standards & Termination of Employment ) PROHIBITED ACTS 75 Art. established an ER-EE relationship between the ER and the job contractor’s EE’s for a limited purpose i.

The principal is responsible to the job contractor's employees only for the proper payment of wages. (Rabago vs. But in labor-only contracting. Is this claim valid? No. (Deferia vs. (Sara vs. an employeremployee relation is created by law between the principal and the labor-only contractor's employees. the indirect employer. they shall be considered as direct ER’s. no employer-employee relation exists between the principal and the job contractor's employees. with or without cause. Some workers of R were not paid their wages. XYZ will still be liable for the unpaid wages of the janitor since the obligation is imposed by law. May A be considered an independent contractor? Yes. a government agency. she was authorized to borrow from other persons. who is the Client in the case at bar. though not an ER. Lapanday Agricultural Development Corporation v. (DBP vs. A would spend her own money for the undertaking. v. A was contracted to do a piece of work according to her own method and without being subject to the control of the ER except as to the result of the work. 107. in the same manner and extent that it is liable to its direct employees.LABOR LAW 1(Labor Standards & Termination of Employment ) 76 * X entered into a contract with R for the construction of X’s house. ABS failed to pay the wages of the janitors. (Id) * PTS. 106. PTS refused to pay on the ground that it is a government agency. (Alcantara) * Would your answer change if XYZ already paid the independent contractor the contract price? No. the person. 109)  In legitimate job contracting. is XYZ liable for the unpaid wages? Yes. According to Art. NLRC) * If an independent service contractor fails to pay the wages of the janitors its supplies to XYZ. entered into a service agreement with ABC or the supply of janitors to PTS. no ER-EE relationship exist between the principal and the job contractors employees. Agarrado) EXTENT OF LIABILITY The direct ER and the indirect ER are jointly and severally liable to petitioners for the monetary claims. The janitors employed by ABC are considered indirect EE’s and not to indirect EE’s coming from the private sector. such that the former is responsible to such employees. the liability accrued. Under Art. who contracts with the independent contractor for the wages employed by the latter are indirect ER’s. Sentinel Security Agency.  Insolvency or unwillingness to pay by the contractor or direct ER is not a prerequisite for the joint and solidary liability of the principal or indirect ER. the Court has already taken judicial notice of the general practice adopted in several government and private institutions of securing janitorial services on an independent contractor basis. as if he or she had directly employed them. Court of Appeals (2000) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Besides. This liability of the Client covers the payment of the service incentive leave pay of the complainants during the time they were posted at the Cebu branch of the Client. is jointly and severally liable with the contractor for the workers' wages. but to enable her to carry out the agreement more effectively. Inc. NLRC) Philippine Airlines v. Is X liable? Yes. even if the complainants were eventually transferred or reassigned. NLRC (98) In legitimate job contracting. As service had been rendered. (Art. (Alcantara) * A entered into a verbal agreement with S wherein A would be paid a commission for milled rice she sold or palay for the farmer. NLRC) For purposes of determining the extent of their civil liability. the ER shall be jointly and severally liable to the EE’s of the contractor or subcontractor to the extent of the work performed under the contract. subject to reimbursement from S and either of them may terminate the business arrangement at will. NLRC (98) Under these provisions.

upon said buildings. any provisions of law to the contrary notwithstanding. Art. on the other hand. Is the bank subject to the claims of the union? Yes. NLRC that the joint and several liability of the contractor and the principal is mandated by the Labor Code to assure compliance with the provisions therein including the minimum wage. The union sought to garnish in its favor a portion of the purchase price. Civil Code With reference to specific movable property of the debtor.e. 2242. Art. Santos) The aforesaid provisions of the Civil Code. (DBP vs. Two days before the judgment. as well as of architects. 14. under Art. Civil Code The laborer's wages shall be a lien on the goods manufactured or the work done. The contractor is made liable by virtue of his status as direct employer. real and personal. in order to ensure that the employees are paid the wages due them. canals or other works. and shall constitute an encumbrance on the immovable or real right: (3) Claims of laborers. canals or other works. mechanics and other workmen. or illness resulting from the nature of the employment. Art. Civil Code With reference to other property. 110 workers enjoy first preference as Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 2241. 2244. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid. his workers shall enjoy first preference as regards their wages and other monetary claims. mortgage creditors of the company. 5 and 6. Civil Code With reference to specific immovable property and real rights of the debtor. mortgages and liens shall be preferred. the following claims or credits shall be preferred in the order named: (4) Compensation due the laborers or their dependents under laws providing for indemnity for damages in cases of labor accident. concurrence and preference of the credits. 110 requires judicial proceedings in rem in adjudication of creditor’s claims against the debtor’s assets to become operative. * A declaration of bankruptcy or a judicial liquidation must be present before the worker’s preference may be enforced. It will be seen from the above provisions that the principal (petitioner) and the contractor (respondent) are jointly and severally liable to the employees for their wages. the law itself establishes one between the principal and the employees of the agency for a limited purpose i. (Alcantara) * TUCP obtained a judgment from the NLRC in an unfair labor case. NLRC and Spartan Security and Detective Agency. on the goods manufactured or the work done. the following claims or liens shall be preferred: (6) Claims for laborers' wages. Art. Even in the absence of an employer-employee relationship. The principal. vs. Inc. foreclosed all mortgages in their favor.LABOR LAW 1(Labor Standards & Termination of Employment ) 77 Articles 106 and 107 of the Labor Code provides the rule governing the payment of wages of employees in the event that the contractor fails to pay such wages. vs. This Court held in Eagle Security. of the debtor. their claims ascertained and inventories and the preferences determined. engaged in the construction. Inc. reconstruction or repair of buildings. the solidary liability of the principal and contractor was held to apply to the aforementioned Wage Order Nos. including Art. The said article cannot be viewed in isolation. masons. 8 WORKER PREFERENCE-BANKRUPTCY Art. * The right or preference has to be asserted in distribution proceedings such as insolvency where all the creditors convened. the PCIB. is made the indirect employer of the contractor’s employees to secure payment of their wages should the contractor be unable to pay them. 110 : In the event of bankruptcy or liquidation of an ER’s business. 1707. it must always be read in relation to the provisions of the Civil Code concerning the classification. engineers and contractors. In the above-mentioned cases. the following claims.

We. Worker preference in case of bankruptcy -In the event of bankruptcy or liquidation of an employer's business. (PCIB vs. 110." a period not limited to the year immediately prior to the bankruptcy or liquidation. Article 110 of the Labor Code was amended by Republic Act No.LABOR LAW 1(Labor Standards & Termination of Employment ) 78 regards wages owed them for services rendered during the period prior to the bankruptcy or liquidation. It is critical indeed for its own survival. Court of Appeals (95) A final observation On 21 March 1989.  Republic v. DBP foreclosed the asset. as we so hold. establishes second priority for claims for wages for services rendered by employees or laborers of the Insolvent "for one year preceding the commencement of the proceedings in insolvency. 110 does not create a lien? Yes . Art. but a PREFERENCE of Credit in favor of EEs  Judicial liquidation is the proper venue for the enforcement of a creditor’s preferential right such as that established in Art. Bearing in mind the overriding precedence given to taxes. Peralta (87) We believe and so hold that Article 110 of the Labor Code did not sweep away the overriding preference accorded under the scheme of the Civil Code to tax claims of the government or any subdivision thereof which constitute a lien upon properties of the Insolvent. as we have seen. It is frequently said that taxes are the very lifeblood of government. very substantial effect may be given to the provisions of Article 110 without grievously distorting the framework established in the Civil Code by holding." Insistent considerations of public policy prevent us from giving to "other creditors" a linguistically unlimited scope that would embrace the universe of creditors save only unpaid employees. 110  Establishes merely a rule of preference and does not create a lien in favor of the workers  Workers claim for unpaid wages and other monetary benefits cannot prevail over a mortgages lien What Art. number 2. The effective collection of taxes is a task of highest importance for the sovereign. Phil. Neither can it be assumed casually that Article 110 intended to subsume the sovereign itself within the term "other creditors" in stating that "unpaid wages shall be paid in full before other creditors may establish any claim to a share in the assets of employer. however. National Mines and Allied Union) * Atlas Textile mortgaged its assets to DBP. to property of the Insolvent that is not burdened with the liens or encumbrances created or recognized by Articles 2241 and 2242. number 2. by removing the one year limitation found in Article 2244. Export etc. and (b) secondly. duties and fees by the Civil Code and the fact that the Labor Code does not impress any lien on the property of an employer. do not believe that Article 110 has had no impact at all upon the provisions of the Civil Code. which order relates. Thus. by using in Article 110 the words "first preference" and "any provision of law to the contrary notwithstanding" intended to disrupt the elaborate and symmetrical structure set up in the Civil Code. that Article 110 of the Labor Code has modified Article 2244 of the Civil Code in two respects: (a) firstly. (Alcantara) Art. The labor arbiter and the NLRC held that the worker’s preference under Art. We have noted that Article 2244. It follows that language of a much higher degree of specificity than that exhibited in Article 110 of the Labor Code is necessary to set aside the intent and purpose of the legislator that shines through the precisely crafted provisions of the Civil Code. 110 establishes is NOT a lien. the use of the phrase "first preference" in Article 110 indicates that what Article 110 intended to modify is the order of preference found in Article 2244. The EE’s filed a complaint against Atlas and DBP for the wage differentials. by moving up claims for unpaid wages of laborers or workers of the Insolvent from second priority to first priority in the order of preference established by Article 2244." Article 110 of the Labor Code establishes "first preference" for services rendered "during the period prior to the bankruptcy or liquidation. 110 does not create a lien in favor of the workers. his workers shall enjoy first preference as regards their wages and Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . It cannot be assumed simpliciter that the legislative authority. 6715 so as to read: "Article 110. v.

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other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the Government and other creditors may be paid." Since then, the Court has had a number of occasions to rule on the effects of the amendment. In Development Bank of the Philippines vs. National Labor Relations Commission, the Court has said: "The amendment expands worker preference to cover not only unpaid wages but also other monetary claims to which even claims of the Government must be deemed subordinate. xxx xxx xxx "Notably, the terms 'declaration' of bankruptcy or 'judicial' liquidation have been eliminated. Does this mean then that liquidation proceedings have been done away with? "We opine in the negative, upon the following considerations: "1. Because of its impact on the entire system of credit, Article 110 of the Labor Code cannot be viewed in isolation but must be read in relation to the Civil Code scheme on classification and preference of credits. "2. In the same way that the Civil Code provisions on classification of credits and the Insolvency Law have been brought into harmony, so also must the kindred provisions of the Labor Law be made to harmonize with those laws. "3. In the event of insolvency, a principal objective should be to effect an equitable distribution of the insolvent's property among his creditors. To accomplish this there must first be some proceeding where notice to all of the insolvent's creditors may be given and where the claims of preferred creditors may be bindingly adjudicated (De Barretto vs. Villanueva). "4. A distinction should be made between a preference of credit and a lien. A preference applies only to claims which do not attach to specific properties. A lien creates a charge on a particular property. The right of first preference as regards unpaid wages recognized by Article 110 does not constitute a lien on the property of the insolvent debtor in favor of workers. It is but a preference of credit in their favor, a preference in application. It is a method adopted to determine and specify the order in which credits should be paid in the final distribution of the proceeds of the insolvent's assets. It is a right to a first preference in the discharge of the funds of the judgment debtor. "6. Even if Article 110 and its Implementing Rule, as amended, should be interpreted to mean 'absolute preference,' the same should be given only prospective effect in line with the cardinal rule that laws shall have no retroactive effect, unless the contrary is provided (Article 4, Civil Code). Thereby, any infringement on the constitutional guarantee on non-impairment of the obligation of contracts (Section 10, Article III, 1987 Constitution) is also avoided. In point of fact, DBP's mortgage credit antedated by several years the amendatory law, RA No. 6715. To give Article 110 retroactive effect would be to wipe out the mortgage in DBP's favor and expose it to a risk which it sought to protect itself against by requiring a collateral in the form of real property. "In fine, the right to preference given to workers under Article 110 of the Labor Code cannot exist in any effective way prior to the time of its presentation in distribution proceedings. It will find application when, in proceedings such as insolvency such unpaid wages shall be paid in full before the claims of the Government and other creditors' may be paid. But, for an orderly settlement of a debtor's assets, all creditors must be convened, their claims ascertained and inventoried, and thereafter the preferences determined in the course of judicial proceedings which have for their object the subjection of the property of the debtor to the payment of his debts or other lawful obligations. Thereby, an orderly determination of preference of creditors' claims is assured (Philippine Savings Bank vs. Lantin); the adjudication made will be binding on all parties-in-interest, since those proceedings are proceedings in rem; and the legal scheme of classification, concurrence and preference of credits in the Civil Code, the Insolvency Law, and the Labor Code is preserved in harmony." RECEIVERSHIP Rubberworld (Phils.), Inc. v. NLRC (99)

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The law is clear: upon the creation of a management committee or the appointment of a rehabilitation receiver, all claims for actions "shall be suspended accordingly." No exception in favor of labor claims is mentioned in the law. Since the law makes no distinction or exemptions, neither should this Court. Ubi lex non distinguit nec nos distinguere debemos. Allowing labor cases to proceed clearly defeats the purpose of the automatic stays and severally encumbers the management committee's and resources. The said committee would need to defend against these suits, to the detriment of its primary and urgent duty to work towards rehabilitating the corporation and making it viable again. The rule otherwise would open the floodgates to other similarly situated claimants and forestall if not defeat the rescue efforts. Besides, even if the NLRC awards the claims of private respondents, as it did, its ruling could not be enforced as long as the petitioner is under the management committee. In Chua v. National Labor Relations Commission, we ruled that labor claims cannot proceed independently of a bankruptcy liquidation proceeding, since these claims "would spawn needless controversy, delays, and confusion." With more reason, allowing labor claims to continue in spite of a SEC suspension order in a rehabilitation case would merely lead to such results. Article 217 of the Labor Code should be construed not in isolation but in harmony with PD 902-A, according to the basic rule in statutory construction that implied repeals are not favored. Indeed, it is axiomatic that each and every statute must be construed in a way that would avoid conflict with existing laws. True, the NLRC has the power to hear and decide labor disputes, but such authority is deemed suspended when PD 902-A is put into effect by the Securities and Exchange Commission. The preferential right of workers and employees under Article 110 of the Labor code may be invoked only upon the institution of insolvency or judicial liquidation proceeding. Indeed, it is well-settled that "a declaration of bankruptcy or a judicial liquidation must be present before preferences over various money claims may be enforced." But debtors resort to preference of credit - giving preferred creditors the rights to have their claims paid ahead of those of other claimants - only when their assets are insufficient to pay their debts fully. The purpose of rehabilitation proceedings is precisely to enable the company to gain a new lease on life and thereby allow creditors to be paid their claims from its earnings. In insolvency proceedings, on the other hand, the company stops operating, and the claims of creditors are satisfied from the assets of the insolvent corporation. The present case involves the rehabilitation, not the liquidation, of petitioner-corporation. Hence, the preference of credit granted to workers or employees under Article 110 of the Labor Code is not applicable. 14. 9 WAGE RECOVERY AND ATTORNEY’S FEES 1. Art. 217 (a) (2), (3), (4), (6) : Jurisdiction of Labor Arbiters and the Commission – The Labor Arbiters shall have exclusive and original jurisdiction, except as otherwise provided, the following cases involving all workers: a. Termination Disputes (qualified by Art. 261which grant voluntary arbitrators original and exclusive jurisdiction over all unresolved grievances arising from CBAS and company personnel policies); b. Cases involving terms and conditions and employment, if accompanied with a claim for reinstatement (including claims of an ER-EE relationship, including claims for actual, moral and exemplary damages, as provided in Sec. 10, Migrant Workers Act) c. Claims for actual, moral, exemplary and other damages arising from the ER-EE relations; d. Except claims for EE’s Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from the ER- EE relations, including  those of persons in domestic or household service, involving an amount exceeding P5,000.00 regardless of whether accompanied with a claim for reinstatement. Art. 111. Attorney's fees (a) In cases of unlawful withholding of wages, the culpable party may be assessed attorney's fees equivalent to 10 % of the amount of wages recovered.

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(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of the wages, attorney’s fees, which exceed 10% of the amount of wages recovered. Art. 128 : Visitorial and Enforcement Power oft the Secretary of Labor or his duly

authorized representative
 Access to ER’s records and premises at anytime of the day or night whenever work is being undertaken therein and copy therefrom; question any EE; and investigate any fact, condition or matter which may be necessary to determine violations of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto.  In cases where the relationship or ER-EE still exists, the power to issue Compliance Orders to give effect to the labor standard provisions of this Code and other social legislation. • Writ of execution to the appropriate authority shall be issued for the enforcement of the said orders, except in cases where the ER contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.  The Decision is appealable to the Secretary of Labor  Order stoppage of work or suspension of operations of any unit of or department of an establishment when non-compliance poses grave and imminent danger to the health and safety of workers in the workplace. • Within 24 hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. • In case the violation is attributable to the fault of the ER, he shall pay EE’s their salaries or wages during the said period.  It shall be unlawful for any person to Obstruct, impede, delay or otherwise render ineffective the order of the Secretary of Labor. * No inferior court shall issue a temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders in accordance with this Article.  Any government EE found guilty of violation, after appropriate administrative investigation, be subject to Summary dismissal from the service.  The Secretary of labor may require ER’s to keep and maintain employment records as may be necessary. (AS CONES) * Under what circumstances may the Regional Director be divested of his jurisdiction to issue compliance orders under Art. 128 (b)? a. ER contests the findings of the labor regulations officer and raises issue thereon; b. In order to resolve such issue, there is need to examine evidentiary matters; c. Such matters are not verifiable in the normal course of inspection. (Red V. Coconut vs. Leogrado)

CARDINAL REQUIREMENTS OF DUE PROCESS in the ISSUANCE of COMPLIANCE ORDERS: 1) The alleged violator (ER) must first be heard and given adequate opportunity to present evidence on his behalf 2) The evidence presented must be duly considered before any decision is reached 3) The decision should be based on substantial evidence (evidence adequate for a reasonable mind to support a conclusion)

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Aggregate money claims of each househelper does not exceed P5. 111 : ATTORNEY’S FEES  In cases of unlawful withholding of wages the culpable party may be assessed attorney’s fees equivalent to 10% of the amount of wages recovered. 2 SERVICE CHARGES * Art. lay-off. through summary proceedings and after due notice. Book III : This rule shall apply to all EE’s of covered ER’s except to managerial EE’s. powers of prerogatives to lay down. Provided d. night clubs. including those entities operating primarily as private subsidiaries of the Government. to be used exclusively for the amelioration and benefit of workers. or discipline EE’s or to effectively recommend such managerial actions. attorney’s fees. in any judicial or administrative proceedings for the recovery of the wages. recall. hire. IRR’s : This rule shall apply only to establishments collecting service charges such as hotels. Section 14: SERVICE CHARGES 14. discharge. LABOR ARBITER.  It shall be unlawful for any person to demand or accept. casinos and gambling houses. lodging houses. Rule V. massage clinics.  The complaint shall be resolved within 30 days from the date of filing of the same.  Decision: Appeal within 5 days to NLRC  NLRC: will resolve within 10 days from submission of last pleading  Any amount recovered in behalf of the EE shall be held as a special fund of the DOLE. and similar enterprises. which exceed 10% of the amount of wage recovered.  Collection of service charges is a management decision and not a requirement of law 14. transfer. cocktail lounge. restaurants. assign. if not paid to said EE because he cannot be located after diligent search after 3 years. including legal interest to a person employed in domestic or household service. and execute management policies and/or b. Such complaint does not include claim for reinstatement e. suspend. Managerial EE – a. Rule VI. Section 2. Book III. 1 COVERAGE Section 1.000  IF NOT. bars.LABOR LAW 1(Labor Standards & Termination of Employment ) 4) 82 The decision is based on evidence presented in the hearing or at least contained in the record and disclosed to the parties 5) The decision is that of the decision making authority and not mere views of subordinates 6) The decision should explain the issues involved and the reasons for the decision rendered Art. Art.  The distribution should be equal and done 2x a month Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 96 : To be distributed at the rate of 85% for covered EE’s [distributed equally among them] and 15% for management. 129 : Recovery of wages. to hear and decide any monetary claims and benefits. simple money claims and other benefits –  The Regional Director of the DOLE or any of the duly authorized hearing officers of the Department is empowered.

management (for the disposition by management to answer for losses and breakages and distribution to managerial employees at the discretion of the management in the latter case) Frequency shall be distributed and paid to the employees not less than once every two weeks of or twice a month at intervals not exceeding 16 days Distribution Permanency In case the service charge is abolished. the restaurant discontinued the collection of service charges. lodging houses. and at management’s discretion. v. etc. premium pay and the 13th month pay. If the EE worked for only a portion of the year. (Art. restaurants. massage clinics. NLRC (99) As regards the share of Damalerio in the service charges collected during the period of his preventive suspension. 96)  The employees share in the service charges is part of the other benefits to which he is entitled. holiday pay.D. Even piece-rate EEs are entitled to service incentive leave as well as to night shift differential. 1998) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . suspend. In case the service charge is abolished. night clubs. Book III Rule VI Omnibus Rules Coverage only establishments collecting service charges such as hotels.. The basis of the amount to be integrated charges shall be the average monthly share of each employee for the past 12 months immediately preceding the abolition or withdrawals of such charges Relation to Nothing in this rule shall prevent the employer and his employees from entering agreements into any agreement with terms more favorable to the employees than those provided herein. Later. or discipline employees or to effectively recommend such managerial actions.) Distribution 85% . to be computed from the start of his preventive suspension until his reinstatement. 851 is additional income based on wage but not part of the wage. he is entitled not only to full backwages but also to other benefits. the 13th month pay is computed pro-rata. cocktail lounge. May 21.LABOR LAW 1(Labor Standards & Termination of Employment ) 83  The 15% management share may answer for losses and breakages. in addition to full backwages Maranaw Hotels. NLRC GR 12393. Employees shall apply to all employees of covered employers REGARDLESS OF THEIR covered POSITIONS. agreement and voluntary employer practice. vs. are entitled to this benefit. As to overtime pay they are entitled to it if their output pay rate is no shown to be in accordance with the standards prescribed under the IRR or by Secretary of Labor. the same form part of his earnings. All rank-and-file EEs regardless of their designation or employment status and irrespective of the method by which their wages are paid. (Labor Congress of the Phil. and IRRESPECTIVE OF THE METHOD BY WHICH THEIR WAGES ARE PAID Exception MANAGERIAL EMPLOYEES (defined as one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire. it may also be distributed to managers * X a waiter at DC Diner was receiving a share in the restaurant’s service charges. including those entities operating primarily as private subsidiaries of the Government. the share or the covered EE’s shall be considered integrated in their wages. recall. provided that they have worked for at least one month during the calendar year. The take-home pay of X was reduced by the value of the discontinued service charges. lay-off. It is 1/12 of the total basic salary earned by the EE within a calendar year . or be used to diminish any benefit granted to the employees under existing laws. May X ask his ER to continue paying the service charges? Yes. and his dismissal having been adjudged to be illegal. casinos and gambling houses and similar enterprises. including a just share in the service charges. DESIGNATIONS OR EMPLOYMENT STATUS. assign. discharge.employees to be distributed EQUALLY 15% . transfer. bars. Section 15: THIRTEENTH MONTH PAY The 13th month pay required by P. the share of covered employees shall be of service considered integrated in their wages.

Thus. (International school of Speech vs. discharge. or to effectively recommend such managerial actions. lay-off. cash bonuses and other payments but shall not include cash and stock dividends.  ER’s already paying their EE’s a 13th month pay or more in a calendar year or its equivalent at the time of this issuance.” An EE who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year. 1987) The Supplementary Rules and Regulations Implementing PD No.]  ER’s of household helpers and persons in the personal service of another in relation to such workers. Is this equivalent to the 13th month pay? No. But if the CBA does provide for a bonus in graduated amounts depending on the length of service of the EE. Section 2. Where an ER pays less than required 1/12 th of the EE’s basic salary. cost of living allowances and other allowances regularly enjoyed by the EE. Who are Rank and File Employees? A managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire. transfer. and those who are paid a fixed amount for performing specific work. This is evident from the stipulation granting the bonus in question to workers Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . provided that they have worked for at least one (1) month during a calendar year.LABOR LAW 1(Labor Standards & Termination of Employment ) 84 The decree exempts ERs who are already paying their EEs a 13th month pay “or its equivalent”. 21. 1995) 15. except those corporations operating essentially as private subsidiaries of the government. the intention is clear that the bonus provided in the CBA is meant to be in addition to the legally required 13 th month pay. The Christmas bonuses provided in the CBA accords a reward for loyalty to certain EE’s. or task basis. assign. NLRC GR 60337.1 LAW – COVERAGE COVERAGE ALL EMPLOYERS are hereby required to pay all their rank and file employees a 13 th month pay not later than December 24 of every year. including GOCC’s. his proportionate 13th month pay should be equivalent to 1/12 of the total basis salary he earned during that period. 851 is emphatic in declaring that “earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th month pay.  A distressed ER may qualify for exemption for the 13 th month pay if there is prior authorization from the DOLE. (Dentech vs. mid-year bonus. irrespective of the time consumed in the performance thereof. boundary. March 18. as well as non-monetary benefits. NLRC. ALL EMPLOYEES NOT FALLING WITHIN THIS DEFINITION ARE CONSIDERED RANK-AND-FILE EMPLOYEES. Revised Guidelines on the 13 th Month Pay Law : The following ER’s are still not covered by PD 851:  The government and any of its political subdivisions. GR 1126358. (Universal Corn Product vs. suspend. or discipline employees. if he worked only from January to September. recall. NLRC) * The CBA provides for the payment of Christmas bonuses to all regular EE’s in the bargaining unit with of at least 1 year of continuous service. the ER shall pay the differences. except where the workers are paid on piece-rate basis in which case the ER shall grant the required 13 th month pay to such workers. and  ER’s of those who are paid on purely commission.  [The term “its equivalent” … shall include Christmas bonus. Aug.

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with at least 1 year of continuous service. The bonus therefore is to be in addition to the legal requirement. (UCP vs. NLRC) 15.2 AMOUNT AND PAYMENT DATE Sec 4 Revised Guidelines on the 13th Month Pay Law:  Amount : 1/12 of the total basic salary earned by an EE within a calendar year.  The 13th month pay is to be paid only to rank-and file employees regardless of the amount of their basic salary.  Time of Payment : Not later than December 24. Define basic salary: For purposes of computing the 13th month pay, basic salary”  include remuneration or earnings paid by this ER for services rendered  but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent or unused vacation and sick leave credits, overtime, premium, night-differential and holiday pay, and cost-of-living allowances. • However, these salary-related benefits should be included as part of the basic salary in the computation of the 13 th month pay if the individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the EE’s. * From 1991 to 1997, DFC included in the computation of this 13 th month pay, the EE’s sick, vacation and maternity leaves, In 1998, the company discontinued the inclusion of the aforementioned items in the 13th month pay. Is this valid? NO. The considerable length of time the questioned items had been included by the company indicates a unilateral and voluntary action on its part, sufficient in itself to negate any claim of mistake. A company practice favorable to the EE’s had been established, and the payments made pursuant thereto ripened into benefits enjoyed by them. Any benefit and supplement being enjoyed by the EE’s cannot be reduced, diminished, discontinued or eliminated by the ER. (Alcantara) BASIC WAGE * Are the sales commission of a salesman paid a guaranteed wage plus commissions included in the computation of this 13th month pay? It depends on what kind of commissions may properly be considered part of the basic salary if integral part of salary, they should be included in computing the 13 th month pay. If the commission are not an integral part of the basic salary, then they should be excluded. (Azucena) Sales commissions which comprised an automatic increment to the monetary value assigned to each unit of work rendered by the salesman, or that of the wages-or sales-percentage type should be included in the 13th month pay computation. On the other hand, commission in the form of productivity bonuses which closely resembles profit-sharing payments and have no clear direct or necessary relation to the amount of work actually done by each individual EE, or the profit-sharing or bonus-type, should be excluded from the computation of the 13 th month pay. (Philippine Duplicators vs. NLRC) BASIC WAGE/COMMISSIONS Boie Takeda v. Dela Serna (93) In the case of San Miguel Corp. vs. Inciong, this Court delineated the coverage of the term "basic salary" as used in P.D. 851. We said at some length: Under Presidential Decree 851 and its implementing rules, the basic salary of an employee is used as the basis in the determination of his 13th month pay. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus. Under the Rules and Regulations implementing Presidential Decree 851, the following compensations are deemed not part of the basic salary:

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Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instructions No. 174; Profit-sharing payments; All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975.

Under a later set of Supplementary Rules and Regulations Implementing PD 851 issued by then Labor Secretary Blas Ople, overtime pay, earnings and other remunerations are excluded as part of the basic salary and in the computation of the 13th month pay. The exclusion of the cost-of-living allowances under PD 525 and Letter of Instructions No. 174, and profit-sharing payments indicate the intention to strip basic salary of other payments which are properly considered as "fringe" benefits. Likewise, the catch-all exclusionary phrase "all allowances and monetary benefits which are not considered or integrated as part of the basic salary" shows also the intention to strip basic salary of any and all additions which may be in the form of allowances or "fringe" benefits. Moreover, the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more emphatic in declaring that earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay. While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee, this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically exclude from the definitions of basic salary earnings and other remunerations paid by an employer to an employee. A cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad inclusion is now a subject of broad exclusion. The Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition of basic salary. The all embracing phrase "earnings and other remunerations" which are deemed not part of the basic salary includes within its meaning payments for sick, vacation, or maternity leaves, premium for works performed on rest days and special holidays, pays for regular holidays and night differentials. As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay. If they were not excluded, it is hard to find any "earnings and other remunerations" expressly excluded in the computation of the 13th month pay. Then the exclusionary provision would prove to be idle and with no purpose. Quite obvious from the foregoing is that the term "basic salary" is to be understood in its common, generally-accepted meaning, i.e., as a rate of pay for a standard work period exclusive of such additional payments as bonuses and overtime. This is how the term was also understood in the case of Pless v. Franks, which held that in statutes providing that pension should not less than 50 percent of "basic salary" at the time of retirement, the quoted words meant the salary that an employee (e.g., a policeman) was receiving at the time he retired without taking into consideration any extra compensation to which he might be entitled for extra work. In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed or guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work period. Commissions are given for extra efforts exerted in consummating sales or other related transactions. They are, as such, additional pay, which this Court has made clear do not form part of the "basic salary." Iran v. NLRC (98) This definition explicitly includes commissions as part of wages. While commissions are, indeed, incentives or forms of encouragement to inspire employees to put a little more industry on the jobs particularly assigned to them, still these commissions are direct remunerations for services rendered. In fact, commissions have been defined as the recompense, compensation or reward of an agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the

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principal. The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that commissions are part of a salesman's wage or salary. SUBSTITUTE PAYMENT Benefits in the form of food or free electricity not proper substitute for the 13 th month pay. (Framanlis vs. Minister of Labor) 14TH MONTH PAY The grant of the 14th month pay is a management prerogative, gratuitous in nature and therefore it cannot be forced. (Kamaya Hotel vs. NLRC) 15. 3 NON-INCLUSION Sec. 7, Revised Guidelines on the 13th Month Pay Law: The mandated 13th month pay need not be credited as part of the regular wage of EE’s for purposes of determining overtime and premium pays, fringe benefits as well as contributions to the state insurance fund, Social Security, Medicare and private retirement plans. 13TH MONTH PAY FOR CERTAIN TYPE OF EMPLOYEES PAID BY RESULTS Employees who are paid on piece work basis are by law entitled to the 13th Month Pay Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay based on their total earnings during the calendar year, i.e. on both their fixed or guaranteed wage and commission. THOSE WITH MULTIPLE EMPLOYERS Government employees working part time in a private enterprise, including private educational institutions, as well as employees working in two or more private firms, whether on full or part time bases, are entitled to the required 13 th Month Pay from all their private employers regardless of their total earnings from each or all their employers. PRIVATE SCHOOL TEACHERS Private school teachers, including faculty members of universities and colleges, are entitled to the required 13th month pay, regardless of the number of months they teach or are paid within a year, if they have rendered service for at least one (1) month within a year. RESIGNED OR SEPARATED EMPLOYEE An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or termination from service. HOUSEHELPERS Ultra Villa Food House v. Geniston (99) Moreover, the specific provisions mandating these benefits are found in Book III, Title I of the Labor Code, and Article 82, which defines the scope of the application of these provisions, expressly excludes domestic helpers from its coverage. The limitations set out in the said article are echoed in Book III of the Omnibus Rules Implementing the Labor Code. Clearly then, petitioner is not obliged by law to grant private respondent any of these benefits.

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Employing the same line of analysis, it would seem that private respondent is not entitled to 13th month pay. The Revised Guidelines on the Implementation of the 13th Month Pay Law also excludes employers of household helpers from the coverage of Presidential Decree No. 851. Nevertheless, we deem it just to award private respondent 13th month pay in view of petitioner's practice of according private respondent such benefit. Indeed, petitioner admitted that she gave private respondent 13th month pay every December. GOVERNMENT EMPLOYEES Alliance of Government Workers v. NLRC (95) An analysis of the "whereases" of PD No. 851 shows that the President had in mind only workers in private employment when he issued the decree. There was no intention to cover persons working in the government service. TERMINATED EMPLOYEES Archilles Manufacturing Corp. v. NLRC (95) On the issue of the propriety of the award of a 13th month pay, paragraph 6 of the Revised Guidelines on the Implementation of the 13th Month Pay Law (P. D. 851) provides that "(a)n employee who has resigned or whose services were terminated at any time before the payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or termination from the service . . .. The payment of the 13th month pay may be demanded by the employee upon the cessation of employer-employee relationship. This is consistent with the principle of equity that as the employer can require the employee to clear himself of all liabilities and property accountability, so can the employee demand the payment of all benefits due him upon the termination of the relationship." Furthermore, Sec. 4 of the original Implementing Rules of P. D. 851 mandates employers to pay their employees to pay their employees a 13th month pay not later than the 24th of December every year. In effect, this statutory benefit is automatically vested in the employee who has at least worked for one month during the calendar year. As correctly stated by the Solicitor General, such benefit may not be lost or forfeited even in the event of the employee's subsequent dismissal for cause without violating his property rights.

Section 16 : BONUS
16. 1 DEFINITION * A bonus is an amount granted and paid to an EE for his industry and loyalty which contributed to the success of the ER’s business and made possible the realization of profits. (Azucena) NATURE - BONUS Luzon Stevedoring Corporation v. CIR (65) A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer's business and made possible the realization of profits. It is not a demandable and enforceable obligation. It is so when it is made a part of the wage or salary or compensation. In such a case the latter would be a fixed amount and the former would be a contingent one dependent upon the realization of profits. If there be none, there would be no bonus. Marcos v. NLRC (95)

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constitutes an acceptance of the offer of the employer to pay the bonus and. and the promise of the bonus is made at the time the contract is entered into. In such case. CIR) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . after that acceptance. or which may be claimed to be gratuitous. 16. (Azucena) Furthermore. A bonus. The term "bonus" as used in employment contracts. in case he serves for a specified length of time. But it is so when it is made part of the wage or salary or compensation. If it is additional compensation which the employer promised and agreed to give without any conditions imposed for its payment. a bonus.” We further held in Metro Transit Organization. National Construction Corp. the grant if gratuity or bonus by reason of its long and regular concession. in case he remains for the required time. a bonus is not a demandable and enforceable obligation. his service. is a demandable or enforceable obligation when it is made part of the wage or salary or compensation of the employee. such as success of business or greater production or output. (Liberation Steamship vs. so as to give the latter the right to enforce such promise after performance. a prize therefore not a part of the wage. Phil. v. it cannot be considered part of the wage. Whether or not a bonus forms part of wages depends upon the circumstances and conditions for its payment. it is only an inducement for efficiency. Inc. on the ground that it was a promise of a mere gratuity. thus: “The general rule is that a bonus is a gratuity or an act of liberality which the recipient has no right to demand as a matter of right. may become regarded as part of the regular compensation. over and above the prescribed wage which the employer agrees to pay. It is something given in addition to what is ordinarily received by or strictly due the recipient. if the employee has served during the stipulated time. however. the authorities hold that if one enters into a contract of employment under an agreement that he shall be paid a certain salary by the week or some other stated period and. While there is a conflict of opinion as to the validity of an agreement to pay additional sums for the performance of that which the promisee is already under obligation to perform.2 WHEN DEMANDABLE * From the legal point of view. But if it is paid only if profits are realized or if a certain level of productivity is achieved. the latter would be a fixed amount and the former would be a contingent one dependent upon the realization of profit. We held in Traders Royal Bank v. then it is part of the wage. while normally discretionary. Petitioner may not be compelled to award a bonus to private respondents whom it found guilty of serious misconduct. The granting of a bonus is basically a management prerogative which cannot be forced upon the employer who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employee’s basic salaries or wages. in addition. that a bonus becomes a demandable or enforceable obligation only when it is made part of the wage or salary or compensation of the employee. Where it is not payable to all but only to some employees and only when their labor becomes more efficient or more productive.” The presumption is that it is not a demandable obligation from the employer and the latter may not be compelled to grant the same to undeserving employees. NLRC: “A bonus is a gratuity or an act of liberality of the giver which the recipient has no right to demand as a matter of right. If no time is fixed for the duration of the contract of employment. also conveys an idea of something which is gratuitous. but can be enforced by the employee. but is paid for some services or consideration and is in addition to what would ordinarily be given. NLRC (99) A bonus is a gift from the employer and the grant thereof is a management prerogative. This is true if the contract contemplates a continuance of the employment for a definite term. v.LABOR LAW 1(Labor Standards & Termination of Employment ) 89 A bonus is not a gift or gratuity. there is no reason for refusing to enforce the promise to pay the bonus. NLRC . but the employee enters upon or continues in service under an offer of a bonus if he remains therein for a certain time. the offer cannot be withdrawn.

as amended. of the employer (Traders Royal Bank vs. v. Sales commissions. grant greater benefits to some and less to others. Inc. The matter of giving a bonus over and above the worker's lawful salaries and allowances is entirely dependent on the financial capability of the employer to give it. there would be no bonus. v. Philippine Duplicators Inc. absent a contractual undertaking to pay it. there was impermissible discrimination against the private respondents in the payment of their separation benefits. MANAGEMENT FUNCTION Businessday Information Systems and Services. The law requires an employer to extend equal treatment to its employees. A productivity bonus is something extra for which no specific additional services are rendered by any particular employee and hence not legally demandable. NLRC (95) Productivity bonuses are generally tied to the productivity or profit generation of the employer corporation. v. NLRC) The award must therefore be deleted. Management prerogatives are not absolute prerogatives but are subject to legal limits. NLRC). Thus we have ruled in National Sugar Refineries Corporation vs. or general principles of fair play and justice (UST vs. it may nevertheless be granted on equitable considerations as when the giving of such bonus has been the company's long and regular practice. (Traders Royal Bank vs. The fact that the company's business was no longer profitable (it was in fact moribund) plus the fact that the private respondents did not work up to the middle of the year (they were discharged in May 1988) were valid reasons for not granting them a mid-year bonus. With regard to the private respondents' claim for the mid-year bonus." the giving of the bonus should have been done over a long period of time. It is so when it is made a part of the wage or salary or compensation. From the legal point of view. In such a case the latter would be a fixed amount and the former would be a contingent one dependent upon the realization of profits. It is also granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits. Commissioners are paid upon the specific results achieved by a salesman-employee. are intimately related to or directly proportional to the extent or energy of an employee's endeavors. and must be shown to have been consistent and deliberate. protects workers whose employment is terminated because of closure of the establishment or reduction of personnel (Abella vs. a bonus is not a demandable and enforceable obligation. not an obligation. To be considered a "regular practice. NLRC: The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not covered by the law requiring payment thereof. NLRC). it is settled doctrine that the grant of a bonus is a prerogative.LABOR LAW 1(Labor Standards & Termination of Employment ) Luzon Stevedoring Corp. If there be none. collective bargaining agreements. It is a percentage of the sales closed by a salesman and operates as an integral part of such salesman's basic pay. It may not. PRODUCTIVITY INCENTIVES ACT OF 1990 (RA 6971) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . CIR (65) 90 As a rule a bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer's business and made possible the realization of profits. v. NLRC). Productivity bonuses are not directly dependent on the extent an individual employee exerts himself. Article 283 of the Labor Code. Requiring the company to pay a mid-year bonus to them also would in effect penalize the company for its generosity to those workers who remained with the company till the end" of its days. a bonus is not a demandable and enforceable obligation. Quisumbing (99) As a rule. such as those paid in Duplicators. on the other hand. It is an act of generosity for which the employee ought to be thankful and grateful. NLRC (93) Clearly. in the guise of exercising management prerogatives. Manila Electric Co.

the representatives of labor shall be those designated by the collective bargaining agent(s) of the bargaining unit(s). and to settle disputes arising therefrom in accordance with Section 9 hereof. including cost savings. and expert advice to enable the parties to conclude productivity agreements. through their authorized representatives. b. That at the request of any party to the negotiation. The productivity incentives program shall contain provisions for the manner of sharing and the factors in determining productivity bonuses: Provided. regular. That both management and labor shall have equal voting rights: Provided. including service-oriented enterprises. maintain industrial peace and harmony and promote the principle of shared responsibility in the relations between workers and employers. further. Labor Management Committee (5) a. improve working conditions and result in increased productivity. Definition (4) Business Enterprise: industrial. Productivity Incentives Program: a formal agreement established by the labor-management committee containing a process that will promote gainful employment. c. and accordingly to provide corresponding incentives to both labor and capital for undertaking voluntary programs to ensure greater sharing by the workers in the fruits of their labor Coverage (3)  Applies to all business enterprises with or without existing and duly recognized or certified labor organizations. the National Wages and Productivity Commission of the Department of Labor and Employment shall provide the necessary studies. repacking. In business enterprises with duly recognized or certified labor organizations. or agro-industrial establishments engaged in the production manufacturing. Productivity Incentives Program (6) a. That the productivity bonuses Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . duly certified as such by appropriate government agencies. agricultural. or assembly of goods. Labor-management Committee: a negotiating body in a business enterprise composed of the representatives of labor and management created to establish a productivity incentives program. recognizing the right of labor to its just share in the fruits of production and the right of business enterprises to reasonable returns of investments and to expansion and growth. whereby the employees are granted salary bonuses proportionate to increases in current productivity over the average for the preceding three (3) consecutive years. A business enterprise or its employees. In business enterprises without duly recognized or certified labor organizations. supervisory and managerial employees. including government-owned and controlled corporations performing proprietary functions  It shall cover all employees and workers including casual. processing.LABOR LAW 1(Labor Standards & Termination of Employment ) Policy (2) 91  To encourage higher levels of productivity. The agreement shall be ratified by at least a majority of the employees who have rendered at least six (6) months of continuous service. the representatives of labor shall be elected by at least a majority of all rank-and-file employees who have rendered at least six (6) months of continuous service. may initiate the formation of a labor-management committee that shall be composed of an equal number of representatives from the management and from the rank-and-file employees: Provided. technical information and assistance.

Any dispute which remains unresolved within 20 days from the time of its submission to the labor-management committee shall be submitted for voluntary arbitration in line with the pertinent provisions of the Labor Code. Disputes and Grievances (9) Whenever disputes. the labor-management committee shall meet to resolve the dispute. during the existence of the productivity incentives program or agreement. and the workers shall not be required to reimburse the productivity bonuses already granted to them under the productivity incentives program. be integrated in the collective bargaining agreement that may be entered into between them. duly and mutually agreed upon by the parties to the labormanagement committee. grievances. as amended. Likewise. If. e. That the business enterprise shall not be deemed to have forfeited any tax incentives accrued prior to the date of occurrence of such strike or lockout. The productivity incentives program shall include the name(s) of the voluntary arbitrator or panel of voluntary arbitrators previously chosen and agreed upon by the labor-management committee. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . as amended. such program or agreement may. bonuses which have already accrued before the strike or lockout shall be paid the workers within six (6) months from their accrual. as amended. The special deductions from gross income provided for herein shall be allowed starting the next taxable year after the effectivity of this Act. Any strike or lockout arising from any violation of the productivity incentives program shall suspend the effectivity thereof pending settlement of such strike or lockout: Provided. d. in addition to the terms and conditions agreed upon by labor and management. and may seek assistance of the National Conciliation and Mediation Board of the Department of Labor and Employment for such purpose. b. or other matters arise from the interpretation or implementation of the productivity incentives program. Notification (8) A business enterprise which adopts a productivity incentives program shall submit copies of the same to the National Wages and Productivity Commission and to the Bureau of Internal Revenue for their information and record. b. Bonuses provided for under the productivity incentives program shall be given to the employees not later than every six (6) months from the start of such program over and above existing bonuses granted by the business enterprise and by law: Provided. c. Benefits and Tax Incentives (7) a. That the said bonuses shall not be deemed as salary increases due the employees and workers. c. shall be granted a special deduction from gross income equivalent to 50% of the total productivity bonuses given to employees under the program over and above the total allowable ordinary and necessary business deductions for said bonuses under the National Internal Revenue Code. Grants for manpower training and special duties given to rank-and-file employees pursuant to a program prepared by the labor-management committee for the development of skills identified as necessary by the appropriate government agencies shall also entitle the business enterprise to a special deduction from gross income equivalent to 50% of the total grants over and above the allowable ordinary and necessary business deductions for said grants under the National Internal Revenue Code.LABOR LAW 1(Labor Standards & Termination of Employment ) 92 granted to labor under this program shall not be less than half of the percentage increase in the productivity of the business enterprise. Subject to the provisions of Section 6 hereof. the employees will join or form a union. a business enterprise which adopts a productivity incentives program. Productivity agreements reached by the parties as provided in this Act supplement existing collective bargaining agreements.

Book III. to avoid serious loss which the ER would otherwise suffer. earthquake. Cases of force majeure or imminent danger to public safety. Where the nature of the work requires the manual skill and dexterity of women workers.FA] d. and shall ensure the fundamental equality before the law of women and men. to prevent loss of life or property. U. This is one of the exceptions to the night work prohibition. has a 3-shift work schedule but maintains a policy of not assigning women in the 3rd shift from 10:00 pm to 6:00 am. (HUMMPS FAD) * LG. by reason of their sex. Art. The nature of the work requires the manual skill and dexterity of women workers and cannot be performed with equal efficiency to male workers. a manufacturer and exporter of jeans. M. P – M.3 PROHIBITED ACTS NIGHT WORK AND EXCEPTION Art. c. are denied the opportunity to earn additional pay. government and GOCC’s and b. with or without compensation: a. to ER’s of household helpers and persons in their personal service insofar as such workers are concerned 17. WORKING CONDITIONS FOR SPECIAL GROUPS OF WORKERS – WOMEN 17. Rule XII. Work is necessary to prevent serious loss of perishable goods h. Industrial undertaking : Between 10:00 pm and 6:00 am of the following day. Woman EE has been engaged to provide health and welfare service. Agricultural undertaking : Nighttime unless she is given a period of rest of not less than 9 consecutive hours. Section 17. equipment or installation. Const. e. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 17. Woman EE holds a responsible position of managerial or technical in nature. executive orders. company policy or practice.1 WOMEN AND THE CONSTITUTION Art. Sec. H. 135 : It shall be unlawful for any ER to discriminate against woman EE with respect to terms and conditions of employment solely on account of her sex. The women sewers. f. Analogous cases.LABOR LAW 1(Labor Standards & Termination of Employment ) Non-dimunition of Benefits (12) 93 Nothing in this Act shall be construed to diminish or reduce any benefits and other privileges enjoyed by the workers under existing laws. Where the women EE’s are immediate members of the family operating the establishment or undertaking. II. b. decrees. In cases of actual or impending emergencies caused by a serious accident. IRR’s : This rule shall apply to all ER’s except to: a.2 COVERAGE Section 1. F. 131) B. 130 : No woman shall be employed or permitted or suffered to work. g. Commercial undertaking : Between midnight and 6:00 am of the following day. 14. i. and l. fire. 131 : Exceptions to Nightwork prohibition [A. . epidemic or other Disasters or calamity. flood. Cases of urgent work to be performed on machineries. or any agreement or contract between the employer and employees. j. k. Is this policy discriminatory to women? Yes. (Art. DISCRIMINATION Art. : The State recognizes the role of women in nation-building.

as against a male EE. Is the dismissal lawful? No. MARRIAGE Art. training opportunities. Is this valid? Yes. 4 FACILITIES Art. 136 : Stipulation against marriage – It shall be unlawful for an ER to : [C. discriminate or otherwise prejudice a woman EE merely by reason of her marriage. S. L was no longer allowed to dance and since there were no other work available for which her talents were suitable. The actions hereby authorized shall proceed independently of each other. It is not fair to require the ER to continue employing her. The company has the prerogative to select its EE’s. Is the action legal? Yes. her 18year old 4th year high school student. her employment was terminated. Actually dismiss. GENERAL (Prohibited Acts) Art.LABOR LAW 1(Labor Standards & Termination of Employment ) The following are acts of discrimination [P. In appropriate cases. c. Clave) C. which may include claims for damages and other affirmative reliefs. Stipulate expressly or tacitly that upon getting married a woman shall be deemed resigned or separated. in the absence of substantial evidence to show that C took advantage of her position to court her student. but as stated in the problem there is no other work for which her talents are suited. study and scholarship grants solely on account of their sexes. The institution of any criminal action under this provision shall not bar the aggrieved EE from filing an entirely separate and distinct action for money claims. * In L’s contract of employment with Club E. F] 1. discharge. contrary to the fact the she was married. D] a. What is unlawful is for the ER to discriminate against or dismiss a woman by reason of their pregnancy. Deny any woman EE the benefits provided for in this Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code. * Criminal liability for violations shall be penalized as provided in Art. D. or while on leave or in confinement due to her pregnancy. Discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant. It is both awkward and dangerous for her to dance during her pregnancy. by regulations. Of course the ER has the obligation to give her another job. 132 : The Secretary of Labor shall establish standards that will ensure the safety and health of women EE’s. Favoring a male EE over a female EE with respect to the promotion. Require as a condition of employment or continuation of employment that a woman EE shall not get married. When L got pregnant. 94 2. b. There is nothing wrong if the two fell in love despite the disparity in their ages. require ER to: Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . * C. DP. (Alcantara)  A woman worker cannot be dismissed on the ground of dishonesty for having written “single” on the space for civil status on the application sheet. (Alcantara) * A pharmaceutical company rejected the applications of 5 pregnant women as sales representatives for contraceptive pills and family planning devices. b. Payment of lesser compensation. he shall. c. 17. 288 and 289 of this Code. a 45-year old teacher was dismissed by the school after she got married to Q. Discharge such woman on account of her pregnancy. for work of equal value. it was stipulated that her employment as a dancer would cease once she gets pregnant. 137 : It shall be unlawful for any ER to : [DB. RA] a. (Chua-Qua vs.

The only obligation of the ER is to advance the benefit subject to reimbursement by the SSS. To determine appropriate minimum age and other standards for retirement or termination in special occupations such as those of flight attendants and the like. Child is employed in entertainment or information through cinema. to ER’s of household helpers and persons in their personal service insofar as such workers are concerned. health and morals. bar. and the approval of the DOLE. WORKING CONDITIONS FOR SPECIAL GROUP OF WORKERS – MINORS 18. with the expressed agreement of the child concerned. 18.3 EMPLOYABLE AGE Section 12. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . (Alcantara) 17. Is X an EE of the nightclub? Yes. radio or television. his employment neither endangers his life.2 COVERAGE Section 1. 2. or similar establishment. * Exceptions: [P. (Art. cocktail lounge. There are nights when she does not earn anything because there are no customers. massage clinic. to the Government and GOCC’s and 2. 4. provided they can perform their duties in the position without detriment to efficiency. and encourage their involvement in public and civic affairs. Any woman who is permitted or suffered to work. 18. in any nightclub. * Is the ER required by law to pay maternity benefits to its female workers? No. the parent or legal guardian shall provide the said minor child with the prescribed primary and/or secondary education. IRR’s : This Rule shall apply to all ER’s except [G H] 1. 2. : The State recognized the role of the youth in nation-building and shall promote and protect their physical. Sec. RA 7610 as amended by RA 7658 : * General rule: Children below 15 years of age shall not be employed. It shall inculcate in the youth patriotism and nationalism.5 SPECIAL CLASSIFICATION SPECIAL WOMEN WORKERS * X works as a hostess in a nightclub. under the effective control or supervision of the ER for a substantial period of time as determined by the Secretary of Labor shall be considered an EE of such establishment for purposes of labor and social legislation. theater. Provide seats proper for women and permit them to use seats when they are free from work and during working hours. with or without compensation. E] 1. II. Rule XII. and social well-being.1 MINORS AND THE CONSTITUTION Art. intellectual. Book III. nor impairs his normal development: b. if possible. 138) Section 18. 13. moral spiritual. she is paid a percentage of the lady’s drink ordered by customers. provided: a. Maternity benefits are to be paid in appropriate instances by the SSS. Const.LABOR LAW 1(Labor Standards & Termination of Employment ) 95 1. To establish a nursery in a workplace. 3. Separate toilet for men & women and provide dressing rooms Art. Child works directly under the sole responsibility of his parents or legal guardian and where only members of the ER family are employed. safety. provided: a) Employment contract is concluded by the child’s parents or legal guardian. 134 : (a) Establishments which are required by law to maintain clinic or infirmary shall provide free family planning services to their EE’s.

e) The ER shall first secure. driver. mechanized farming and similar work. contaminations or work conditions. Is her employment lawful? No. Such employment will endanger her health and impair her normal development. c) or discrimination. 141) * C was employed by A company to work as a maid in the cottages of its Baguio mining site to attend to the needs of its executives or guests who now and then visit the site. (Alcantara) 18. d) 96 The ER shall ensure the protection. safety and morals of The ER shall institute measures to prevent the child’s exploitation The ER shall formulate and implement. e. between 15 and 18 may be employed in any non-hazardous work. the employable age is 18 and up. construction work.4 DISCRIMINATION Art. * Would a company rule providing for lower wages for workers below 18 years who are inexperienced violate the prohibition? No. She is paid P5. a work permit from the DOLE which shall ensure observance of the above requirements. 139 : Any person. subject to the approval and supervision of competent authorities. was hired as a singer in a carnival which stages shows wherever there is a town fiesta. (Art. 10 years old. not his age. laundrywoman. f. logging. including services of family drivers. health.00 a month. Is S a househelper or domestic servant? No. L is therefore always on the road. Where the workers are exposed to heavy or power-driven machinery or equipment or tools. traveling to different parts of the country. The services of a househelper is rendered exclusively for the personal comfort and enjoyment of the family of the ER and are performed in the latter’s home. Stevedoring. WORKING CONDITIONS FOR SPECIAL GROUP OF WORKERS – HOUSEHELPERS 19.000. Art. (Apex Mining vs. * L. Services rendered in an executive cottage cannot be considered domestic. NLRC)  A househelp. Where the nature of work exposes the worker to Dangerous environmental elements. In any hazardous work. (Alcantara) Section 19. There is no discrimination on account of the worker’s minority. houseboy or a gardener working in staffhouses of a company who attend to the needs of the company’s guests and other persons availing Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . a continuing program for training and skills acquisition of the child. What are considered hazardous work places? [D C M P] c. Manufacture or handling of Explosives and other pyrotechnic products.LABOR LAW 1(Labor Standards & Termination of Employment ) b) the child.1 COVERAGE Art. d. 141 : This chapter shall apply to all persons rendering services in households for compensation 19. 140 : Prohibition against child discrimination – No ER shall discriminate against any person in respect to terms and conditions of employment on account of his age. She is also deprived of the opportunity to get primary education as she is always traveling to different parts of the country.2 HOUSEHELPERS Define domestic or household service : Service in the ER’s home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the member’s of the ER’s household. firefighting. The payment of lower wages is by reason of the worker’s inexperience. S must be considered a regular EE of the mining company.

(Art. She was paid in advance for 3 years and she agreed that she will work for L for the said period. Opportunity for elementary education if a househelper is less than 18 years old (Art. 142 provides that the original contract of domestic service shall not last for more than 2 years.00 i. She works for 11 hours a day. Chartered cities and 1st class municipalities : P650. M’s contract will therefore be good for only 2 years. 147) c. (Alcantara) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . The period contract exceeds the maximum set by the law. therefore. If househelper leaves without justifiable cause. she should be paid an additional compensation beyond the minimum wage of P800. Art. 4 CONDITIONS FOR EMPLOYMENT * M.3 NON-HOUSEHOLD WORK ASSIGNMENT *T lives in a compound where he operates a modest candy business. Sometimes. (Art. lodging and medical attendance (Art.000. Is there any legal infirmity in the said agreement? Yes. He is an industrial worker who. his maids help in the packing of the candies and his family driver delivers the candies to the outlets. NCC) Since she worked for 11 hours daily. she is paid P800. 19. 148) d. NCC) [F I B E J] f. Based on their contract.00 h. although it may be renewed for such periods as may be agreed upon by the parties.LABOR LAW 1(Labor Standards & Termination of Employment ) 97 of said facilities. If househelper is unjustly dismissed. should be paid the industrial rate. Other municipalities : P550  Househelpers receiving P1. How should the work rendered in connection with the candy business be compensated? For work rendered by the maids and the family driver. she should not be allowed to work more than 10 hours a day. when there is no work in his house. Just and human treatment (Art.00 shall be covered by the SSS.I F] a. is not a househelper or a domestic servant. Funeral benefits if the househelper has no relatives with sufficient means in the place where the head of the family lives. Is she entitled to additional compensation? Yes.00 set by the law. 1695. Aside from the rights to minimum wage. (Art.  forfeits any unpaid salary not exceeding 15 days * M works as a live-in labandera in the house of T somewhere in Quezon City.00. 1696. 145) 19. Indemnity for unjust termination of services of 15 days plus the compensation already earned. what other rights are enjoyed by a househelper? [E J B . Although she is merely a househelper. 146)  Cost of education shall be part of the househelpers compensation UNLESS there is a stipulation to the contrary. Metro Manila and highly urbanized cities : P800. 15 years old.  pay wages already earned + 15 days wages (Indemnity) g. (Alcantara) What are the minimum wages for househelpers? g. Board. worked as a maid in the house of L. b. (Alcantara) No household helper shall be assigned to work in a commercial industrial or agricultural enterprise at a wage or salary rates lower than that provided for agricultural or non-agricultural workers as prescribed therein. e. they should be paid at the rate prescribed by law for non-agricultural workers.

She sells wood and leather to housewives who makes these into wooden clogs according to the patterns and specifications of S. in accordance with such regulations as the DOLE shall prescribe. except for a just cause. who for his account or benefit. articles or materials to be processed or fabricated in or about a home then rebuys them after such processing or fabrication. 8. 156. Sells any goods. neither the ER nor the househelper may terminate the contract before the expiration of the term. 150 : If the duration of the household service is not determined either in the stipulation or by the nature of the service. any goods. IRR’s : “ This rule shall apply to all ER’s whether operating for profit or not. Section 20. the case falls under the jurisdiction of the Labor Arbiter. Is there an ER-EE relationship between S and the housewives? Yes.  If the period of household service is fixed. Beyond that. natural or artificial. The housewives are considered homeweorkers and S is their ER.1 FIRST AID TREATMENT AND ER ASSISTANCE Art. Delivers or causes to be delivered. * S represents in the Philippines the Sears chain of department stores in the US. directly or indirectly or though any EE. Rule XIV. including the Government ant GOCC’s. Book IV. fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his directions. 161 : It shall be the duty of an ER to provide all the necessary assistance to ensure the adequate and immediate medical and dental attendance and treatment to an injured or sick EE in cases of emergency. Book III. (Alcantara) What is the liability of Sears? Sears is jointly and severally liable if S is not able homeworkers. in the same manner as if the EE’s or homeworkers were directly engaged by the ER. sub-contractor or any other person: a. Section 1. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . IRR’s : The ER shall be jointly and severally liable to the EE’s or homeworkers of the contractor or sub-contractor. 155 : “ER” of homeworkers – includes any person. Rule XIV. DENTAL AND CONDITIONAL SAFETY 21. (Sec. which employ in any workplace 1 or more workers. Rule I. Every ER shall keep in his establishment such first-aid medicines and equipment as the nature and conditions of work may require. contractor. or on behalf of any person residing outside the country. agent.LABOR LAW 1(Labor Standards & Termination of Employment ) 98 Art.1 ER Art. MEDICAL.2 ER LIABILITY Section 8. (Azucena) Section 21. Art. 20. or b. WORKING CONDITIONS FOR SPECIAL GROUP OF WORKERS – HOMEWORKERS 20. IRR’s) to pay the wages of the * Terms and conditions of employment involving money claims of homeworker shall be heard by the Regional Director of the DOLE. Book III. either himself or through some other person. the ER or the househelper may give notice (5 days before the intended termination of service) to put an end to the relationship of the service.

WHEN NOT REQUIRED Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .  Where the workplace has more than 1 shift per day. if the work is non-hazardous. contaminations or work conditions. In all workplaces where there are more than 1 workshift in a day. be subject to call at anytime during the other workshifts to attend to emergency cases. 4. (Sec. (Alcantara) 21. and shall engage the services of a full-time nurse.2 EMERGENCY MEDICAL AND DENTAL SERVICES When and What is Required Describe briefly these free emergency medical. a dental clinic. the services of a full-time first-aider may be provided if a nurse is not available. What medical and dental services or facilities must be furnished by the owner of the latter? Since the establishment employs less than 10 workers. IRR’s)  What are considered hazardous work places? [D C M P]  Where the nature of the work exposes the worker to Dangerous environmental elements. An auto repair shop has 8 EE’s. 201 to 300 workers : Services of a full-time registered nurse. the ER may engage the services of a part-time physician and part-time dentist who shall have the same responsibilities ass those of the part-time physician and the part-time dentist in the preceding paragraph. they shall be at the workplace during the work-shift which has the biggest number of workers and they shall be subject to call at anytime during the other workshifts to attend to emergency cases. in addition to the requirements under this Rule. the ER shall in addition to the requirements under this rule.  Manufacture or handling of explosives and other pyrotechnic products  Where the workers are exposed to heavy or power-driven machinery or equipment or tools.     Where the undertaking in such workplace is non-hazardous. construction work.  Stevedoring. The physician and dentist shall stay in the premises of the workplace for at least 8 hours a day. mechanized farming and similar work. provide the services of a full-time first-aider for teach workshift. firefighting. The physician and dentist engaged for such workers shall stay in the premises for at least 2 hours a day. the required 2 hour stay shall be devoted to the workshift which has the biggest number of workers and they shall. Book IV. Rule I. 301 or more workers : Services of a full-time nurse. a fulltime dentist. logging. 51 to 200 workers : Services of a full-time registered nurse shall be provided.  Where the establishment has more than 1 workshift a day. a full-time physician. and an infirmary or emergency hospital with one bed capacity for every 100 workers shall be provided. However.LABOR LAW 1(Labor Standards & Termination of Employment ) 99 * The ER is not obliged to provide and spend for the continued or follow-up treatment of the EE unless it has bound itself to do so by contract or established practice or policy. the owner is only obliged to keep in the workplace first aid medicines. a part-time emergency clinic shall be provided regardless of the nature of the undertaking therein. dental services and facilities required to be furnished by the ER?  10 to 50 workers : The services of a first-aider shall be provided who may be one of the workers in the workplace and who has immediate access to the first-aid medicines.

whether continuous or broken.1 COVERAGE Section 1. Art. with respect to the activity in which he is employed and his employment shall continue while such activity exists (Art. Section 22. IRR’s : This Rule shall apply to all establishments and undertakings.3 ADMINISTRATION Art. in cases of regular employment with the exception of the Government and its political subdivisions including GOCC’s. EE CLASSIFICATION 22. Art. Casual EE’s d. through appropriate regulations.  Chartered cities may be allowed to conduct industrial safety inspections of establishments within their respective jurisdictions where they have adequate facilities and competent personnel for the purpose as determined by the DOLE and subject to national standards established by the latter. charitable and religious institutions and organizations. Rule I. 280 a. the test and approval for safe use of materials. equipment and devices. equipment and other safety devices and the approval of plans for such materials. 280)  A casual employee who has rendered at least 1 year of service. including educational. 158 : The requirement for an emergency hospital or dental clinic shall not be applicable in case there is a hospital or dental clinic which is accessible from the ER’s establishment and he makes arrangement for the reservation therein of the necessary beds and dental facilities for the use of his EE’s: 5 km – urban 25 mins – rural 21. 75 (d)] CASUAL . Project EE’s c. 281  Probationary EE 3.employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the EE (280 LC) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .LABOR LAW 1(Labor Standards & Termination of Employment ) 100 Art. whether operated for profit or not. regulations and standards in all establishments and workplaces wherever they may be located. 165 : (a) The DOLE shall be solely responsible for the administration and enforcement of occupational safety and health laws. collect reasonable fees for the inspection of steam boilers. (b) The Secretary of Labor may. 281)  All learners who has been allowed or suffered to work during the first 2 months shall be deemed regular employees if training is terminated by the ER before the end of the stipulated period through no fault of the learner. The fee so collected expended exclusively for the administration and enforcement of safety and other labor laws administered by the DOLE. medical. 280)  A probationary employee who is allowed to work after the probationary period (Art. pressure vessels and pipings and electrical installations. Regular EE’s b.2 EE CLASSIFICATION 1. 22. Others  Contract-fixed period REGULAR  EE has been engaged to perform activities which are usually necessary and desirable in the usual business or trade of the ER (Art. [Art. Book VI. Seasonal EE’s 2.if not covered by the preceding paragraph (280 LC) PROJECT .

Inc v. (280 LC) PROBATIONARY . the fact that the manpower supply agreement between Livi and California had specifically designated the former as the petitioners' employer and had absolved the latter from any liability as an employer. Hence. will not erase either party's obligations as an employer. At any rate. much less the procedure of hiring the EE or the manner of paying his salary. (b) project employees or those whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. AGREEMENT Tabas v.the work or services to be performed is seasonal in nature and the employment is for the duration of the season." ER DETERMINATION * What determines whether a certain employment is regular or casual is not the will and words of the ER. Inc. laid down the guidelines before a contract of employment may be held as valid.employment shall not exceed 6 months from the date the EE started working unless covered by apprenticeship agreement stipulating a longer period (281 LC) RECOGNITION AND TYPES Philippine Federation of Credit Cooperatives. Its language manifests the intent to safeguard the tenurial interest of worker Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .. Where an employee has been engaged to perform activities which are usually necessary or desirable in the usual business of the employer. it cannot be made the subject of agreement. they alone are bound by it. With regard to contractual employees. and distinguishing different kinds of employees. NLRC (98) Article 280 reinforces the Constitutional mandate to protect the interest of labor as it sets the legal framework for ascertaining one’s nature of employment. since the agreement was between Livi and California. the Court in the leading case of Brent School. such employee is deemed a regular employee and is entitled to security of tenure notwithstanding the contrary provisions of his contract of employment. NLRC (87) Art. NLRC (89) The existence of an employer-employees relation is a question of law and being such.LABOR LAW 1(Labor Standards & Termination of Employment ) 101 SEASONAL . NLRC) Violeta v. and the petitioners cannot be made to suffer from its adverse consequences. NLRC (98) This provision of law comprehends three kinds of employees: (a) regular employees or those whose work is necessary or desirable to the usual business of the employer. v. to wit: "stipulations in employment contracts providing for term employment or fixed period employment are valid when the period were agreed upon knowingly and voluntarily by the parties without force. v. It is the nature of the activities performed in relation to the particular business or trade considering all circumstances. San Miguel Corporation v. and in some cases the length of time of its performance and its continued existence. (De Leon vs. and (c) casual employees or those who are neither regular nor project employees. Inc. duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent. 280 was emplaced in our statute books to prevent the circumvention of the employees’ right to be secure in his tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent with the concept of regular employment defined therein. Zamora. California Manufacturing Co. or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. if an employer-employee relation otherwise exists between the workers and either firm.

Four days before the said period. (Art.” She was not dropped after that period. NOT because of the mode or even the reason for hiring them. the provisions of the written agreement to the contrary notwithstanding. XXX Thus. Those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the ER. Nor on the procedure of hiring and the manner of designating the employee. (Art. 280) Casual EE’s who have rendered at least 1 year of service is continuous or broken.3 REGULAR EE’S Who are considered regular EE’s? a. After the completion of the training she was employed on a “probationary basis” for 6 months. Even granting that the probation did not end with the training. a company engaged in moving and storage of foods hired packers and drivers pursuant to employment contracts which provided that the workers were employed on “as-needed” basis and considered “daily-hired”.  An EE is regular because of the nature of work and length of service. but on the nature of the activities to be performed by the employee. * H applied for employment with Holiday Inn and was accepted for “On-the-job training” as telephone operator for 3 weeks. (Tucor vs.) A probationary EE who is allowed to work after the probationary period. whether continuous or broken. they are considered regular EE’s with respect to the activities in which they are employed. 75) b.LABOR LAW 1(Labor Standards & Termination of Employment ) 102 who may be denied the enjoyment of rights and benefits due to an employee. their employment shall continue while such activity exists. Thus. or seasonal nature and the employment is for the duration of the season. Is the dismissal valid? No. reference is made to Article 280 of the Labor Code. (Id. the nature of one’s employment does not depend on the will or word of the employer. TYPE Romares v. Management decided not to hire her after the probationary period. NLRC) 22. with respect to the activity in which they are employed. Packing and driving activities are usually necessary and desirable in Tucor’s usual business. NLRC (98) In determining the status of petitioner as a regular employee. and (2) those casual employees who have rendered at least one year of service. the two kinds of regular employees are (1) those who are engaged to perform activities which are necessary or desirable in the usual business or trade of the employer. (Holiday Inn vs. she was dismissed by the hotel on the ground that she failed to meet the standards of the hotel. * Tucor Industries. as amended. considering the employer’s nature of business and the duration and scope of the work to be done. by virtue of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on a casual or contractual status for as long as it is convenient to the employer. 281) Learners who have been allowed or suffered work during the first 2 months if training is terminated by the ER before the end of the stipulated period through no fault of the learner. NLRC) * L was hired as a component mechanic by a manufacturing firm for a probationary period for 6 months. They are entitled to security of tenure.  Regular status arises from either the nature of work or the EE or the duration of his employment. d. c. At the time of her dismissal. their employment not being fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement. she was already a regular EE since the “on-the-job training” was already her “probationary period. (Art. Are they considered regular EE’s? Yes. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . After a month. there is no reason why that period should not be included in the stipulated 6-month period probation. regardless of the nature of his employment.

but the nature of the job. The activity of catching fish is a continuous process.) * What determines regularity or casualness is not the employment contract. (A. Are the stevedores regular EE’s? Yes. vs. * Stevedores were employed by corporation engaged in deep-sea fishing to unload the tuna fish catch from latter’s vessels into refrigerated vans. They were engaged to perform activities usually necessary or desirable in the usual business or trade of their ER’s. Inc. Fruit and Vegetable Industries. Oreta and Co. or b) has rendered at least one year of service. Although the ER was not satisfied with his performance. Their work was intermittent depending on the arrival of fishing vessels. it cannot be considered as a specific project or a seasonal activity. Their services are usually necessary or desirable in the usual trade or business of the cooperative. (Octaviano vs. then employment is REGULAR. secretaries.  If the job is usually necessary or desirable to the main business of the ER. then employment is regular. NLRC (99) An employment shall be deemed regular where the employee: a) has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. 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. the employment is also considered regular.. if the EE has been performing the job for at least one year. Phil. (RJL Martinez vs. If the job is usually necessary or desirable to the main business of the employer. 176 SCRA 218) * B. written or otherwise. Their working on other vessels does not militate against the existence of the ER-EE relationship since it is but natural for the worker to seek other employment during the periods of temporary lay-off. There were also times when the stevedores worked on vessels belonging to other companies. May the ER treat these workers as regular EE’s only from the date they were extended permanent appointments? No. NLRC)  What determines REGULARITY or CASUALNESS is not the employment contract. (Central Negros Electric vs. Hence. After the 2 nd 6-month probationary period. (Id. Is L a regular EE? Yes. they could not be categorized as mere domestic work. She was also rehired after the probationary employment extended to her. Successive hirings and firings cannot be resorted to by the ER to avoid obligations imposed by law for the protection and benefit of probationary EE’s. (Alcantara) NATURE OF WORK What is the primary standard of determining regular employment ? The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the EE in relation to the usual business or trade of the ER. NLRC) * J is employed on a probationary period for 3 months. This fact of rehiring negates any claim that she failed to qualify as a regular EE. she was dismissed. Has J become a regular EE? Yes. Also. NLRC) The connection can be determined by considering the nature of the work performed and its relation to the scheme of a particular business or trade in its entirety. (De Leon vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 103 the company again hired L for another 6-month probationary period. with respect to the activity in which he is employed. even if the performance is not continuous or merely intermittent. Her functions were essential and important to the operation and religious function of the temple. v. Is B a regular EE or a domestic helper? B is a regular EE. whether such service is continuous or broken. Inc. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . but the nature of the job.M. clerks and electricians after 6 months from the date of their hiring. was hired by a Buddhist Temple as secretary and interpreter. written or otherwise. NLRC. An EE is allowed to work after a probationary period shall be considered a regular EE. NLRC) * An electric cooperative only extended permanent appointments to linemen. She also attended personally to some needs of the Head Monk. but only with respect to such activity and while such activity exists. The nature of her job required her to perform activities which are necessary and desirable in the usual business of her ER. he is allowed to work after the end of the 3-month period.

NLRC (91) Since petitioners perform tasks which are usually necessary or desirable in the main business of Hi-Line. Neither is their employment seasonal in nature. Private respondents have justifiably argued thus: "The contention of petitioner in saying that respondents/appellees belong to petitioner's pool of casual workers who work only when there is work to be done at the mills particularly during the milling season is indeed untenable for petitioner had been engaged in the rice and corn mill business way back in 1949 whose capitalization involves millions of pesos. the services performed or to be performed by private respondents are not seasonal in nature. 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 year of service. no distinction should be drawn. It is a common practice among farmers and rice dealers to store their palay and to have the same milled as the need arises. NLRC (91) The first paragraph answers the question of who are regular employees. That the first stated position is the situation contemplated and sanctioned by law is further enhanced by the absence of a statutory limitation before regular status can be acquired by a casual employee. Tacloban Sagkahan Rice etc. The fact is that large-scale food processing companies such as petitioner company continue to operate and do business throughout the year even if the availability of fruits and vegetables is seasonal. the milling operations which is the main business of petitioners are not seasonal. he becomes a regular employee with respect to the activity in which he is employed. Obviously. Drilon (90) While the actual regularization of these employees entails the mechanical act of issuing regular appointment papers and compliance with such other operating procedures as may be adopted by the employer. The work done by the palay mill for the capitalization of petitioner is so much that it keeps its employees working the whole year round by buying the palay during harvest season for milling. While it may be true that the harvest of palay is seasonal." Kimberly etc. they should be deemed regular employees of the latter 13 and as such are entitled to all the benefits and rights appurtenant to regular employment. Magante v. NLRC (90) Furthermore. . NLRC (90) The determining factor of the status of complainant-petitioner or any worker is the nature of the work performed by the latter and the place where he performed his assignment. It states that. To rule otherwise. Thus. While it may be true that some phases of petitioner company's processing operations is dependent on the supply of fruits for a particular season. v. the milling operations have no let-up. The law is explicit. v. The fact is that big rice mills such as the one owned by petitioners continue to operate and do business throughout the year even if there are only two or three harvest seasons within the year.LABOR LAW 1(Labor Standards & Termination of Employment ) 104 XXX It should be noted that complainants' employment has not been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of their appointment or hiring. contemplated in the Labor Code. Mercado v. Rice and corn milling business is not seasonal in nature. where the law does not distinguish. such as manufacturing and marketing are not seasonal. . Ecal v. . is to impose a burden on the employee which is not sanctioned by law. As long as the employee has rendered at least one year of service. The law does not provide the qualification that the employee must first be issued a regular appointment or must first be formally declared as such before he can acquire a regular status. and to instead make their regularization dependent on the happening of some contingency or the fulfillment of certain requirements. regardless of any written or oral agreement to the contrary. the other equally important aspects of its business. an employee is deemed regular Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . It is the planting and harvesting of rice that is seasonal.

The determination of whether employment is casual or regular does not depend on the will or word of the employer. but on the nature of the activities performed by an employee. considering that she is engaged in the manufacture and production of medicinal preparations. i. International Pharmaceutical. v." Thus. v. We ruled in Baguio Country Club Corporation vs. .. The primary standard. and (2) those casual employees who have rendered at least one year of service. The work she performed was manifestly necessary and desirable to the usual business of petitioner. of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. this Honorable Court held that the work of merchandisers of processed food. except for project employees.. Highway Copra Trades v. California Manufacturing Co. NLRC this Court ruled that when the activities performed by the employee are usually necessary or desirable in the usual business or trade of the employer. v. NLRC (98) Article 280 of the Labor Code describes a regular employee as one who is either (1) engaged to perform activities which are necessary or desirable in the usual business or trade of the employer. Inc. With more reason. who coordinate with grocery stores and other outlets for the sale of the processed food is necessary in the day-to-day operation[s] of the company. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety.connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety Labor Congress of the Phil. Inc.e. Private respondent Empire Food Products. there was no mention of any project or consultancy. v. voluntarily. San Miguel Corp. the employment is deemed regular notwithstanding contrary agreement. therefore. STANDARD: reasonable connection between the particular activity performed by the ER in relation to the usual business or trade of the ER. whether continuous or broken. with respect to the activity in which he is employed. if the work is usually necessary or desirable in the usual business or trade of the employer. TEST: Whether work was “necessary & desirable to the main business of ER” In the contract. Zamora. Datu and Co. notwithstanding any agreements to the contrary. NLRC (98) In Brent School. and knowingly by the parties.LABOR LAW 1(Labor Standards & Termination of Employment ) 105 where he is engaged in necessary or desirable activities in the usual business or trade of the employer. The Labor Code draws a fine line between regular and casual employees to protect the interests of labor. NLRC (98) That petitioner employees are "pakyao" or piece workers does not imply that they are not regular employees entitled to reinstatement. NLRC (98) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . and to some extent. v. is a food and fruit processing company. the work of processed food repackers is necessary in the day-to-day operation[s] of respondent Empire Food Products.. NLRC that "its language evidently manifests the intent to safeguard the tenurial interest of the worker who may be denied the rights and benefits due a regular employee by virtue of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on a casual status for as long as convenient. although the work done under a contract is necessary and usually desirable in relation to the usual business of the employer. Inc. NLRC (96) In De Leon vs. and its continued existence. the length of performance. a contract for a fixed period may be made so long as it is entered into freely. Inc. Inc. In Tabas v. and the procedure of hiring and manner of paying. an employment is deemed regular when the activities performed by the employee are usually necessary or desirable in the usual business or trade of the employer.

LABOR LAW 1(Labor Standards & Termination of Employment ) 106 A regular employee is distinguished from a project employee by the fact that the latter is employed to carry out a specific project or undertaking. a skilled welder was hired by DM Consunji for several projects wherein he was assigned. NLRC (99) We have held that where the employment of project employees is extended long after the supposed project has been finished. the duration or scope of which was specified at the time the employees were engaged. they would be immediately assigned to the next project. Such job or undertaking begins and ends at determined or determinable times. “Project” in the realm of business and industry refers to a particular job or undertaking that is within the regular or usual business of employer. NLRC (2000) The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Also. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . NLRC (98) The principal test in determining whether particular employees are “project employees” distinguished from “regular employees” is whether the “project employees” are assigned to carry out “specific project or undertaking. NLRC) Audio Electric Co. but only with respect to such activity and while such activity exists. (Fegurin vs. They perform activities usually necessary or desirable in the usual business of the company. the repeated re-hiring and the continuing need for their services over a long span of time have undeniable made them regular employees. A "project" has reference to a particular job or undertaking that may or may not be within the regular or usual business of the employer. Hence. There was also evidence that the worker was under obligations to be always available on call by the company and that he could not offer his services to other ER’s. Millares v. Inc. the employment is also considered regular. Lao Construction v. if the employee has been performing the job for at least one year. even if the performance is not continuous or merely intermittent. we held that where the employment of project employees is extended long after the supposed project has been finished. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. F is a project EE. when the project to which they were assigned were completed. (Fernandez vs. v. However.” the duration (and scope) of which are specified at the time the employees are engaged for the project. Considering that they have been working for a number of years. but which is distinct and separate and identifiable as such from the undertakings of the company. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety.. In either case. NLRC) * F. and its duration must be determined or determinable. While it may be allowed that in the instant case the workers were initially hired for specific projects or undertakings of the company and hence can be classified as project employees. Is he a regular EE? No. 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. separate and identifiable from the main business of the employer. the employees are removed from the scope of project employees and are considered regular employees. the project must be distinct. the employees are removed from the scope of project employees and considered regular employees. They are considered “non-project EE’s” of the construction company. Thus. are they regular EE’s? Yes. HIRING EXTENDED PERIOD * A company engaged in construction hired carpenters and issued them some notices of employment that they were hired for specific projects and their employment shall be deemed automatically terminated at the completion of the project.

. NLRC) * M was employed as a carpenter by a company engaged in the concrete structural business. His work involved the making of moulds for bridges. Bernardo v." And under the Code. the special orders are not seasonal but more or less regular. .. but rather.LABOR LAW 1(Labor Standards & Termination of Employment ) 107 While length of time may not be a controlling test for project employment. necessary and indispensable to the usual business or trade of employer. They are engaged in activities which are usually necessary of desirable in the usual business or trade of the ER. the work did not end on a project to project basis. Every 3 months. His continued employment is made to depend upon the whims of the ER. No employer is allowed to determine indefinitely the fitness of its employees. It has regular customers but also receives special orders. "[t]he provisions of written agreement to the contrary notwithstanding . Inc. he was made to fill up and sign an employment contract relating to a particular phase of a work in a specific project. When the bank renewed the contract after the lapse of the sixmonth probationary period. Is the stipulation valid? No. we recognized the validity of contractual stipulations as to the duration of employment. He was never assigned to work outside the plant of the ER. ad infinitum. the employees thereby became regular employees. He was assigned to perform tasks which are usually necessary or desirable in the usual trade or business of the ER. according to the Code. "where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business." Quite to the contrary. "temporary". NLRC) Beta Electric Corp. He continued to perform the same kind of work throughout his period of employment. P’s employment contract stipulates that the company shall make an annual assessment of his performance and his continued employment shall depend on said evaluation. the private respondent's work. is engaged in the manufacture of furniture for export. These are made to sign temporary contracts. It determines the security of tenure enjoyed by P who is a regular EE. one. Victorias Milling Company. it was ergo. Despite the signing of employment contracts. (Magante vs." The contract signed by petitioners is akin to a probationary employment. Under the Labor Code. v. NLRC (99) As held by the Court. NLRC (90) The petitioner cannot rightfully say that since the private respondent's employment hinged from contract to contract. "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making permanent casuals of our lowly employees by the simple expedient of extending to them probationary appointments. . it can be a strong factor in determining whether the employee was hired for a specific undertaking or in fact tasked to perform functions which are vital. It is true that in Biboso v. an employment may only be said to be "temporary" "where [it] has been fixed for a specific undertaking the completion of or termination 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. he is a regular employee. that of "typist-clerk" is far from being "specific" or "seasonal". NLRC (98) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Significantly. CONTRACT TO CONTRACT * P was hired by a textile firm as a machine operator. It hires “temporary workers” for special orders. Is M a regular EE? Yes. the contract-to-contract arrangement given to the private respondent was but an artifice to prevent her from acquiring security of tenure and to frustrate constitutional decrees. Are these workers considered regular workers? Yes.” The temporary employment contracts have little probative value. LENGTH OF TIME Maraguinot v. depending on the term of each agreement. requiring the continuous services of the “temporary workers. during which the bank determined the employees' fitness for the job. where one performs such activities. (Alcantara) * M Co. (Mehitabel Furniture vs. we can not apply it here because clearly.

” The term "project" could also refer to. a residential condominium building I Baguio City. Art.g. but which is distinct and separate and identifiable as such from the undertakings of the company. a limit. First. Employees who are ired for the carrying out of 12 of these separate projects. NLRC (97) Regular employees cannot at the same time be project employees. * The predetermination of the duration or period of a project employment is important in resolving whether one is a project employee or not. the term period has been defined to be “a length of existence.” the duration (and scope) of which are specified at the time the employees are engaged for the project. a project could refer to particular job or undertaking that is within the regular or usual business of the employer company. NLRC (97) The principal test in determining whether particular employees are “project employees” distinguished from regular employees is whether the ”project employees” are assigned to carry out “specific project or undertaking. “Project” in the realm of business and industry refers to a particular job or undertaking that is within the regular or usual business of ER.where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. The two exceptions following the general description of regular employees refer to either project or seasonal employees. a 25-story hotel in Makati. A point of time marking a termination as of a cause or an activity. an end. The typical example of this type of project is a particular construction jib or project of a construction company. Such job or undertaking begins and ends at determined or determinable times. (ALU-TUCP vs. NLRC) Lao Construction v.4 PROJECT EE’S (TEMPORARY EES) Who are considered project EE’s?  A project EE is one 1. 280 of the Labor Code states that regular employees are those whose work is necessary or desirable to the usual business of the employer. The job or undertaking also begins and ends at determined or determinable times. a bound. 22. a particular job or undertaking that is not within the regular business of the corporation. and a domestic air terminal in Iloilo City. but merely serves as a badge of regular employment. secondly. 280) DEFINED Magcalas v. termination. TEST OF PROJECT EE’S What is the principal test to determine whether EE’s are “project EE’s” as distinguished from “regular EE’s”? The test is whether or not the project EE’s are assigned to carry out a specific project or undertaking the duration and scope of which are specified at the time the EE’s are engaged for that project. the length of time during which the employee was continuously re-hired is not controlling. are properly treated as “project employees” and their service may be lawfully terminated at completion of the project. from the other undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. duration. A construction company ordinarily carries out 2 or more discrete (should distinct) identifiable construction projects: e.whose employment has been fixed for a specific project or undertaking. A series of years. we note that “project” could refer to one or the other of at least two distinguishable types of activities. but which is distinct and separate. and identifiable as such. a conclusion. It has been ruled in the case of ALUTUCP v. months or days in Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer.LABOR LAW 1(Labor Standards & Termination of Employment ) 108 However. NLRC that: “In the realm of business and industry. On this score. the scope and duration of which has been determined and made known to the employees at the time of employment. (Art. the completion or termination of which has been determined at the time of the engagement of the EE or 2.

136 SCRA 674 ) INDICATORS OF PROJECT EMPLOYMENT Section 2. Instead of being assigned solely to the job sites. the EEs are removed from the scope of project employment and are considered REGULAR EE. Many of the interviewers worked for several projects. Was R a regular EE of PPI? No. is free to offer his services to any other employer. he was hired for another term of 10 months. Are the filed interviewers considered regular EE’s? No. He was hired in a specific project or undertaking as a driver. (Sandoval Shipyards vs. All these were entered during various stages prior to the completion of the construction project. may be considered as indicators that an employee is a project employee: (a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable. NLRC) * A construction firm hired as project EE’s several workers. He was a project EE whose employment terminated upon the expiration of his employment contract or upon the completion of the project. (Rada vs. (e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work. (f) An undertaking in the employment contract by the employer to pay completion bonus to the project employer to pay completion bonus to the project employee as practiced by most construction companies. the completion of the project or any phase thereof will not mean severance of ER-EE relationship. 253 SCRA 112. (b) Such duration. NLRC. A time of definite length or the period from one fixed date to another fixed date. are non-project EEs or EEs for an indefinite period. and Sandoval Shipping.  If they are employed in a particular project. using the prescribed form on employees’ termination/dismissal/suspension. They are project EE’s whose work is co-terminus with the project for which they are hired.. Leogardo) * Consumer Pulse hired field interviewers on specified project basis for a definite period of time. 19 states: “Either one or more of the following circumstances. Since they performed tasks vital and indispensable to the efficient administration and completion of the Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .” (Italics supplied) (Samson vs. (d) The employee. Their work did not end upon the completion of a project. After the expiration of the period. Are they project EE’s? No. sporadic with long intervals of idle periods in between projects due to lack of work or job contracts. Generally. 280 SCRA 520.)  Members of a WORK POOL from which a construction company draws its project EEs. (Manansag vs. among others.LABOR LAW 1(Labor Standards & Termination of Employment ) 109 which something is completed. NLRC. the contractual employment is not continuous but intermittent. NLRC. Is the employment of the workers considered regular? No. vs. and then for 19 months.  Where the employment of project EEs is extended long after the supposed project has been finished. PROJECT EE’S * PPI. 205 SCRA 69.’ (See Hilario Rada vs. as well as the specific work/service to be performed is defined in an employment agreement and is made clear to the employee at the time of hiring. IF considered EE of the construction company while in the work pool. a company providing construction supervision of the Manila Expressway hired R for a term of 24 months.2 of Department Order No.” (Violeta vs. The interviewers were hired for specific projects the completion or termination of which are determined at the start of their employment. NLRC and AG&P Co. they perform their jobs even after a job had been finished. while not employed and awaiting engagement. Inc. they were also made to work as inventory clerk or warehouseman in the company’s central shop.) * It has been held that the length of service of a project employee is not the controlling test of employment tenure 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. (c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged. NLRC) * A company engaged in the building and repair of vessels hired welders to work in the repair of a specified vessel.

It was made known. since 1964 until his resignation on January 2. and other necessary repairs were required. the Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .to renovate the main building. supra." It was only private respondents. In the case at bar. nevertheless this should not detract from his status of being a regular employee because as correctly stated by the labor arbiter. as well as the other 30 workers. packing and driving. it cannot be justifiably said that petitioner had dismissed them without just cause. although the contrary was made to appear by private respondent through the signing of separate employment contracts allegedly for different projects because it is indeed obvious that petitioner continued to perform the same kind of work throughout his period of employment allegedly considered to have been done on a project to project basis. private respondents were assigned to do carpentry work. repair of the roof. In its Report to the Department of Labor. The fact was not that private respondents were hired as maintenance helpers. They were engaged for a specific project or undertaking and fall within the exception provided for in Article 231 of the Labor Code. petitioner has established that since the very inception of his employment in 1980. they are considered regular EE’s. out of the 32 hired for the renovation. NLRC (91) The term "specific project or undertaking" under Article 280 of the Labor Code contemplates an activity which was commonly or habitually performed or such type of work which is not done on a daily basis but only for a specific duration of time or until the completion of the project. and that said assignments did not end on a project to project basis. They rendered service from February 2 to December 11. were needed as additional hands for the renovation work and not for ordinary upkeep and maintenance. Inc.LABOR LAW 1(Labor Standards & Termination of Employment ) 110 company’s various projects. NLRC (91) As aptly observed by the Solicitor-General. than that the termination of private respondents was because their services were no longer needed and they had nothing more to do since the project for which they were hired had been completed. The casual or limited character of private respondents' employment. the 30 other workers having acquiesced to their termination. The erection of the fire escape and other small jobs after the renovation cannot be deemed maintenance but more of casual work. NLRC) Phil. They are not entitled to reinstatement with full backwages. the employer's main business is not expected to grind to a halt. however. Magante v. Tucor Industries. because petitioner corporation had a regular maintenance force. and so understood at the start of the hiring. Fernandez v. v. The services employed are thus necessary or desirable in the employer's usual business only for the period of time it takes to complete the project. therefore. Private respondents merely alleged in their letter-complaint that "kami'y inalis sa trabaho ng walang dahilan. v. but less than a year. NLRC (94) Inasmuch as the documentary evidence clearly showed gaps of a month or months between the hiring of petitioner in the numerous projects wherein he was assigned. Clave (83) Private respondents were hired for a specific project . Not being regular employees. Jai-Alai and Amusement Corp. Without the performance of such services on a regular basis. (Capitol Industrial vs. 1982 worked for private respondent as the supervisor of its Carpentry Department. Although petitioner had only rendered almost two years of service. where major repairs such as painting the main building. This goes to show two things: that petitioner was assigned to perform tasks which are usually necessary or desirable in the usual business or trade of private respondent. the determining factor of the status of complainant-petitioner or any worker is the nature of the work performed by the latter and the place where he performed his assignment." There could be no other reason. he was never deployed from project to project of private respondent but had been regularly assigned to perform carpentry work under the supervision of a certain Bernardo Padaon who. 1976. is evident. activities which are usually necessary and desirable in petitioners' usual business and which thus had to be done on a regular basis. almost 11 months. who questioned their termination. that their services would last until the completion of the renovation. Private respondents. cleaning of clogged water pipes and drains. petitioner gave the reason for termination as "due to termination of project.

Imbuido v. such as manufacturing and marketing are not seasonal. NLRC. Neither is their employment seasonal in nature. 20. Fruits and Vegetables Industries. namely 1) Project Employees and 2) Non-project Employees. the duration or scope of which was specified at the time the employees were engaged. Inc. In either case. Inc. where it was held that said proviso deems as regular employees only those "casual" employees who have rendered at least one year of service regardless of the fact that such service may be continuous or broken. A project employee is one whose employment has been fixed for a specific project or undertaking. and her employment was fixed for a specific project or undertaking the completion or termination of which had been determined at the time of her engagement. Phil. v. "Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed. regardless of the number of projects in which they have been employed by a particular construction company. if at all. as may be observed from the series of employment contracts between petitioner and private respondent. While it may be true that some phases of petitioner company's processing operations is dependent on the supply of fruits for a particular season. a corporation engaged in the business of data encoding and keypunching. NLRC (2000) We agree with the findings of the NLRC that petitioner is a project employee. "Project employees are those employed in connection with a particular construction project. A “project” has reference to a particular job or undertaking that may or may not be within the regular or usual business of the employer.LABOR LAW 1(Labor Standards & Termination of Employment ) 111 ineluctable conclusion is that petitioner has not continuously worked with private respondent but only intermittently as he was hired solely for specific projects. The principal test for determining whether an employee is a project employee or a regular employee is whether the project employee was assigned to carry out a specific project or undertaking. Nonproject employees are those employed by a construction company without reference to a particular project. the pertinent portions of which read as follows: "Generally. these stand-by workers would be Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . The fact is that large-scale food processing companies such as petitioner company continue to operate and do business throughout the year even if the availability of fruits and vegetables is seasonal. petitioner was engaged to perform activities which were usually necessary or desirable in the usual business or trade of the employer. there are two types of employees in the construction industry. 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. who are specifically excepted therefrom. It is not applicable to "project" employees. it would be unjust to require the ER to maintain them in the payroll while they are doing absolutely nothing except waiting until another program begun. As such. separate and identifiable from the main business of the employer and its duration must be determined or determinable." XXX The proviso in the second paragraph of Article 280 of the Labor Code has recently been explained in Mercado v. A regular employee is distinguished from a project employee by the fact that the latter is employed to carry out a specific project or undertaking. In effect. RATIONALE The rationale for this rule is that if a project has already been completed. v. the duration and scope of which were specified at the time the employee was engaged for that project. the other equally important aspects of its business. as admittedly. the project must be distinct. all of which contained a designation of the specific job contract and a specific period of employment. NLRC (98) The position of STELLAR that individual private respondents were its project employees is totally unfounded. NLRC (99) It should be noted that complainants' employment has not been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of their appointment or hiring. Phil. In the instant case. Airlines. he is governed by Policy Instruction No. petitioner worked as a data encoder for private respondent.

which was reaffirmed in numerous subsequent cases. i. NLRC (94) In other words. there is no logical and legal sense of applying to them the proviso under the second paragraph of Article 280 of the Labor Code. the employer shall make known to the employee at the time he is hired. Leogardo) ALU-TUCP v. this Court ruled that the proviso in the second paragraph of Article 280 relates only to casual employees and is not applicable to those who fall within the definition of said Article's first paragraph. IMPLICATION Project EE’s are not entitled to separation pay as their work was coterminous with the completion of the project. But. vs. (Sandoval Shipyards vs. Inc. v. (De Ocampo vs. the employment of each 'project worker' is dependent and co-terminous with the completion or termination of the specific activity or undertaking [for which] he was hired which has been pre-determined at the time of engagement. the standards by which he will qualify as a regular employee. NLRC (87) It is not disputed that private respondents were project employees. and not to other sections thereof. NLRC (87) In the leading case of Brent School v. It ruled that 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. M. he is entitled to security of tenure during his period of employment and his services cannot be terminated except for just and authorized causes enumerated under the Labor Code and under the employment contract. they were entitled to security of tenure guaranteed by the Constitution and the Labor Code for the duration of the project they were hired for. unless the clear legislative intent is to restrict or qualify not only the phrase immediately preceding the proviso but also earlier provisions of the statute or even the statute itself as a whole.e. This is not fair by any standards and can only be lead to a coddling of labor at the expense of management. there is no showing that they (13 complainants) were engaged to perform work-related activities to the business of respondent which is steel-making.. project employees. Nowhere in the employment contract executed between petitioner company and respondent Grulla is there a stipulation that the latter shall undergo a probationary period for three months before he can quality as a regular employee. The familiar grammatical rule is that a proviso is to be construed with reference to the immediately preceding part of the provision to which it is attached. Zamora. National Labor Relations Commission . as amended. collecting payments for work not done. Since. As such. NLRC (89) The law is clear to the effect that in all cases involving employees engaged on probationary' basis. there is justification in concluding that respondent Grulla was a regular employee at the time he was dismissed by petitioner. the Court has upheld the legality of fixed-term employment. V. or the phases thereof to which they were assigned or in connection with which they rendered services. this Court went on to say that where from the Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . SECURITY OF TENURE Southern Cotabato v. The length of their employment id determined by the completion of the task for which they were hired. SPECIFIED PERIOD Purefoods Corp. There is also no evidence on record showing that the respondent Grulla had been apprised of his probationary status and the requirements which he should comply in order to be a regular employee.LABOR LAW 1(Labor Standards & Termination of Employment ) 112 enjoying the status of a privileged retainers. xxx In the case of Mercado. In the absence of these requisites. As such.. NLRC) EMPLOYER OBLIGATION A. to be disbursed by the ER from profits not earned. Sr. Oreta and Co.

WHAT MAKES A PROJECT EMPLOYEE REGULAR It is not disputed that petitioner had been working for private respondent for approximately twenty-eight (28) years of the adjudication of his pliant by respondent NLRC. Furthermore.. NLRC (98) A project EE or a member of a work pool may acquire the status of a regular employee when the following concur: 1. The repeated re-hiring and continuing need for his services are sufficient evidence of the necessity and indispensability of such services to private respondent’s business or trade. v. i. the completion of the project or any phase thereof will not mean severance of the employeremployee relationship. There is a continuous rehiring of project employees even after cessation of a project. 280. the completion of which has been determined at the time of the engagement of the employee. this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned.LABOR LAW 1(Labor Standards & Termination of Employment ) 113 circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee. NLRC (97) Length of service is not the controlling determinant of the employment tenure of a project employee. (Samson vs. if considered employees of the construction company while in the work pool. However. necessary. are non-project employees. as rigger. the 2nd paragraph of Art. Aguilar Corp. that the worker shall be available when called to report for a project. This is beneficial to both the employer and employee for it prevents the unjust situation of “coddling labor at the expense of capital” and at the same time enables the workers to attain the status of regular employees. LENGTH OF SERVICE Palomares v. good customs or public order. such separation is for an invalid reason. pertains to casual employees and not to project employees such as petitioners. they should be struck down or disregarded as contrary to public policy and moral WORKPOOL EMPLOYEES Maraguinot v. NLRC. Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee. 2. A work pool 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. hence Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . or employees for an indefinite period. but merely serves as a badge of regular employment. NLRC (97) Members of a work pool from which a construction company draws its project employees. Although primarily applicable to regular seasonal workers. morals. providing that an employee who has rendered service for at least 1 year. The tasks performed by the alleged “project employee” are vital.e. and indispensable to the usual business or trade of the employer. If they are employed in a particular project. With the successive contracts of employment wherein petitioner continued to perform virtually the same kind of work. throughout his period of employment. It is based on whether or not the employment has been fixed for a specific project or undertaking. and that his “project-to-project” employment was renewed several times. shall be considered a regular employee. provided. 253 SCRA 112) “Completion of Project” Not Valid Reasons to Separate a Project Employee Who has Become Regular When a project employee who has gained regular status is separated from employment on the alleged ground of completion of project. it is manifest that petitioner’s assigned tasks were usually necessary or desirable in the usual business or trade of private respondent. they should be struck down as contrary to public policy. the length of time during which the EE was continuously rehired is not controlling.

5 CASUAL EE’S What is casual employment? An employment is casual when the EE is engaged to perform tasks or activities which are not usually necessary or desirable in the usual business or trade of the ER. becomes regular after service of one year. NLRC. (Art. He was not only hired for a specific project. in said second paragraph. Accordingly. The records show that the petitioners had been given an initial six-month contract. (See Maraguinot and Enero vs. NLRC (89) What determines regularity or casualness is not the employment contract. but the nature of the job. v. He was in fact a mainstay of the company. He continued working Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . his services were not terminated on 30 November 1992.of California . under Article 281 of the Code.. NLRC and Viva Films. Under the circumstances. NLRC (98) Private respondent belonged to a work pool from which CEDCO drew its employees and assigned them to different projects. Inc.and had acquired a secure tenure. written or otherwise. 284 SCRA 539. (89) The fact that the petitioners have been hired on a "temporary or seasonal" basis merely is no argument either. Article 106 of the Labor Code is precisely designed to prevent such result. If the job is usually necessary or desirable to the main business of the employer. Geothermal. NLRC (90) Assuming therefore. ONE YEAR SERVICE Tabas v. Inc v. He was a regular employee assigned to different projects. The proviso. And we cannot say that merchandising is a specific project for the obvious reason that it is an activity related to the dayto-day operations of California. without loss of seniority rights and other benefits that may have accrued. thus to deny them security of tenure in their jobs. Cebu Engineering and Development Co. 280 demarcates as "casual" employees.LABOR LAW 1(Labor Standards & Termination of Employment ) 114 unwarranted. that an employee could properly be regarded as a casual (as distinguished from a regular employee) he becomes entitled to be regarded as a regular employee of the employer as soon as he has completed one year of service. Phil. Because the termination is unjustified the employee is entitled to reinstatement with back-wages. under Article 218 of the Labor Code. His regularness attaches only to the particular activity that he has been doing while still a casual. then employment is regular. NATURE OF WORK AM Oreta & Co. Contrary to petitioner's claim. renewed for another six months. It is not difficult to see that to uphold the contractual arrangement between the employer and the employee would in effect be to permit employers to avoid the necessity of hiring regular or permanent employees indefinitely on a temporary or casual status. NLRC (91) The second paragraph of Art. As we held in Philippine Bank of Communications v. employers may not terminate the service of a regular employee except for a just cause or when authorized under the Labor Code. v. unless he has been contracted for a specific project. they had become regular employees ..) 22. all other employees who do not fall under the definition of the preceding paragraph. California Manufacturing Co. they cannot be separated without due process of law. Hence. 280)  After 1 year becomes regular  It is not the nature of his work but the passage of time that gives him a regular status. deems as regular employees those "casual" employees who have rendered at least one year of service regardless of the fact that such service may be continuous or broken. 17 Mercado v. Inc. a temporary or casual employee.

. As such those EEs can be considered as in the regular employment of the ER. Workers Org. v. L-18875 Sept 30. after which they were free to render services. They are not. (Manila Hotel Co. They are casual EE’s and as such do not enjoy the security of tenure since they work for only 11 months." Thus. They are considered project or seasonal EE’s . CIR. al. CIR. “pakiao” basis. A 1963 ruling said: Regular seasonal EEs are those called to work from time to time. vs. Tacloban Sagkahan Rice. The work lasted for 11 months. i. (Philippine Jai Alai vs. Highway Copra Traders v.. Tobacco etc.LABOR LAW 1(Labor Standards & Termination of Employment ) 115 after that. et al. Considering that they rendered services for many years. While the services were continuous in the sense that they were not rendered every day throughout the year. 1990. vs. after a year of continuous work. NLRC) Seasonal Employment Court decisions exist which consider seasonal EEs as regular EEs. (Azucena) Phil. strictly speaking. We ruled in Baguio Country Club Corporation vs. according to the law. GR No. or when their services may be needed. 1966. NLRC that "its language evidently manifests the intent to safeguard the tenurial interest of the worker who may be denied the rights and benefits due a regular employee by virtue of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on a casual status for as long as convenient. on 1 December 1992. notwithstanding any agreements to the contrary. et. does not make petitioners independent contractors. Hence. Are the mason and plumbers regular EE’s? No. * Jai Alai Manila hired a mason and plumber to do renovation work on its building. NLRC. petitioners had never stopped working for respondent from year to year from the time he hired them to the time he dismissed them. in their employment. deemed regular? No. Considering that petitioners did their work inside private respondent’s farm. (Mercado vs.6 SEASONAL EE’S * Agricultural workers were hired by the owners of a rice and sugar land to perform particular phases of agricultural work necessary in rice production. 73806. L-21465.) Seasonal EEs are in regular employment because of the nature of their job and not because of the length of time they have worked. It is 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 the first year of service. as in the nature of farm work. Indus’l Comm’l Agric. et al. vs. he became a regular employee regardless of any contract to the contrary. They were engaged for a specific project or undertaking. an employment is deemed regular when the activities performed by the employee are usually necessary or desirable in the usual business or trade of the employer.their employment legally ends upon the completion of the project or the season. SEASONAL “PAKIAO” EMPLOYEES The nature of their employment. March 21. Clave) 22.e. though seasonal. but are merely considered on leave until re-employed. CIR that 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. GR No. Pakiao workers are considered employees as long as the employer exercises control over the means by which workers are to perform their work. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . the latter necessarily exercised control over the work performed by petitioners. 1963. The nature of their relationship with the ER is such that during off season they are temporarily laid off but during summer season they are reemployed. GR No. March 31.. NLRC (98) The Court has previously ruled in Manila Hotel Company v. Petitioners rendered services essential for the cultivation of respondent’s farm. separated from the service but are merely considered as on leave of absence without pay until they are reemployed. NLRC (98) The Labor Code draws a fine line between regular and casual employees to protect the interests of labor.

vs. after term. Zamora) Pretermination of Fixed-Period Employment A fixed-period employee is not regular because his job. etc. morals.) Cielo v. She was not rehired after that term. 284 SCRA 656. No. they should be struck down or disregarded as contrary to public policy.7 CONTRACT. v. NLRC. even if true. 280 of the Labor Code and thus prevent an employee from becoming regular through the simple expedient of making him sign a contract for a term and then extend to him a contract term. (Pantranco vs. Is she a regular EE? No. vs. but who are rehired every working season are considered regular employees. In other words. In which case.. Also Tierra International Construction vs. Zamora) Give the criteria under the fixed period contracts of employment cannot be said to be in circumvention of the worker’s security of tenure. to sustain petitioner's contention that there was an implied extension after the expiration of the original contract would make it possible for employers like petitioner to circumvent Art. will exist only for a specified period of time. as anticipated and agreed. (Brent vs. Zamora. and (2) he enjoys security of tenure during the limited time of his employment. A’s employment was for a fixed period. Inc. Inc. they had no hand in the preparation of the payroll. (Zamudio vs. Theresa’s School v. NLRC (98) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . duress or improper pressure being brought to bear upon the EE and absent any other circumstances vitiating his consent. 1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties. March 25. it is not permanent. Omission of petitioners in the payroll was not within their control. If this is done. (Brent vs. But he is deemed regular in two senses: (1) the nature of his work is necessary or desirable in the principal business of the employer.FIXED PERIOD * A was engaged as athletic director by Brent School for a fixed term of 5 years. This circumstance. NLRC. the Court 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. 256 SCRA 36. There is no evidence to show that the parties mutually agreed to renew their contract. St. 1990) 22. without any force.LABOR LAW 1(Labor Standards & Termination of Employment ) 116 The seasonal nature of petitioner’s work does not detract from the conclusion that employeremployee relationship exists. 76723. the employee is entitled to payment of his salaries corresponding to the unexpired portion of his contract.G. after term.R. In fact. NLRC (91) In Brent School. Seasonal workers whose work is not merely for the duration of the season. There is nothing essentially contradictory between a definite period of employment and the nature of the EE’s duties. the employer commits illegal dismissal. Before the end of the agreed period he cannot be removed without a valid cause and valid procedure. It does not necessarily follow that where the duties of the EE’s entail activities which are usually necessary or desirable in the usual trade or business of the ER. (See Vinta Maritime Co. the parties should not be forbidden to stipulate any period of time for these activities. On the other hand. 1984. the Court has ruled. The circumstance that petitioners do not appear in respondent’s payroll does not destroy the employer-employee relationship between them. NLRC) 3) When such stipulations were not designed to circumvent the laws on security of tenure." International Pharmaecuticals. NLRC. cannot be taken against petitioners. he commits a breach of contract. or 2) It satisfactorily appears that the ER and EE dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. her employment ended. NLRC (98) On the other hand the written contract in this case provided that it was subject to renewal by mutual consent of the parties at least thirty days before its expiration on March 18.

from June 1. (Pantranco vs. 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. Servidad v. But if he continues to be employed longer than six (6) months. Leogardo. is valid. NLRC) 22. public order and public policy. unless it is covered by an apprenticeship agreement stipulating a longer period.LABOR LAW 1(Labor Standards & Termination of Employment ) 117 Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period provided the same is entered into by the parties. morals.. A was re-hired as a driver for 1 month. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . good customs. Six-month probation. he ceases to be a probationary employee and becomes a regular or permanent employee. The company merely filled in the blanks in a mimeographed form with the corresponding driver’s data. without any force. An employee who is allowed to work after a probationary period shall be considered a regular employee. he should be considered a regular EE. is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment. binding and must be respected. private respondent's contract provided for a fixed term of nine (9) months. or it may use "failure to meet work standards" as the ground for the employee's dismissal. (Cielo vs. The contract specifically provided for a fixed term. 1991 to March 31. * The provision of Article 281 that “probationary employment shall not exceed six (6) months” means that the probationary employee may be dismissed for cause at any time before the expiration of six (6) months after hiring. infra. vs. Art. It goes without saying that contracts or employment govern the relationship of the parties. private respondent has two options. It can terminate the employee by reason of expiration of contract. 281: Probationary employments hall not exceed six months from the date the employee started working. Did such rehiring result in his reacquisition of his former regular status? No. 2nd Sentence. based on reasonable standards made known to him at the time of engagement. In either case. NLRC (99) The language of the contract in dispute is truly a double-bladed scheme to block the acquisition of the employee of tenurial security. not being contrary to law. 61. Book VI. Such stipulation. Was this a valid termination? No. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer. the Court upheld the principle that where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee. Rule 1. Inc. he can be dismissed. the tenor of the contract jeopardizes the right of the worker to security of tenure guaranteed by the Constitution. duress or improper pressure being brought to bear upon the employee and absent any other circumstance vitiating consent. As we will see in Bueser vs. If after hiring for less than six (6) months. probation longer than six months can be justified. is a general rule. NLRC) * 15 years after his dismissal for cause.8 PROBATIONARY EE’S Art. It appears that all drivers of the company were hired on fixed contract basis. In the case of Brent School. 1992. There is thus nothing essentially contradictory between a definite period of employment and the nature of the employee's duties. After the 6-month period. Sec. * C was engaged by a trucking company to work as a truck driver for a period of six months. the parties are forbidden from agreeing on a period of time for the performance of such activities. however. he is found to be unfit for the job. In this case. Thereunder. they should be disregarded for being contrary to public policy. et al. Zamora. 6. The contract for a fixed period was a clever scheme to prevent its EE’s from becoming regular EE’s. C’s services were terminated. Omnibus Rules There is a probationary employment where the employee upon his engagement.

Federation of Credit Cooperatives.) PURPOSE Justify the rights of the ER to fix a probationary period of employment? The ER has the right to select his EE’s that the ER may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently.LABOR LAW 1(Labor Standards & Termination of Employment ) 118 What is a probationary employment? It is employment for a specified period generally not exceeding 6 months for the purpose of determining whether the EE can qualify for regular employment in accordance with reasonable standards prescribed by the ER.Apprentices : The probationary period in the apprenticeship may not be under probationary employment in the company where he trained. v. but not its length." Escorpizo v. As defined in the case of International Catholic Migration v. NLRC (89) A probationary employee. and to ascertain whether he will become a proper and efficient EE. 169 SCRA 606. NLRC) It is necessary for the probationary EE to undergo a period of probation to test his qualifications. NLRC. the ER shall make known to the EE at the time he is hired the standards by which he will qualify as a regular EE. (Beta Electric Corporation vs.Learners : If the job is learnable – can be learned within 3 months – then the probationary period is 3 months or less. NLRC (98) Art. NLRC. NLRC. the probationary period for him would be 6 months. a probationary employee is considered a regular employee if he has been allowed to work after the final probationary period. she has become a regular employee. however. The fact that her employment has been on a contract-to-contract basis cannot after the character of employment. as amended. A probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationary employee while at work. The word probationary as used to describe the period of employment implies the purpose of the term or period. allows the employer to secure the services of an employee on a probationary basis which allows him to terminate the latter for just cause or upon failure to qualify in accordance with reasonable standards set forth by the employer at the time of his engagement. 182 SCRA 384) DEFINITION International Catholic Migration Commission v. Minister of Labor) A probationary appointment is made to afford the ER the opportunity to observe the fitness of a probationer while at work. (Alcantara)  In all cases involving EEs engaged in probationary basis.1) * Under Article 281 of the Labor Code. as understood under Article 282 (now Article 281) of the Labor Code. Hence. 281 of the Labor Code. because contracts cannot override the mandate of law. skills and experience. and to ascertain whether he will become proper and efficient employee. (Policy Instructions No. (International Catholic Migration Commission vs. In another company.  FAILURE TO QUALIFY as a regular EE in accordance with the reasonable standards of the ER is a just cause for terminating a probationary EE. is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. . Inc. University of Baguio (99) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . (Grand Motors) Phil. by operation of law. "a probationary employee is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. (International Catholic Migration Commission vs. What is the probationary period for apprentices and learners? . (Grand Motors vs. A probationary employment is made to afford the employer an opportunity to observe the fitness of a probationer while at work. and to ascertain whether he will become a proper and efficient employee.

(Buiser or Leogardo) Holiday Inn Manila v. as used to describe the period of employment. Due process dictates that an employee be apprised beforehand of the condition of his employment and of the terms of advancement therein. The word "probationary". is being observed and evaluated to determine whether or not he is qualified for permanent employment. 281 of the Code is the requirement that reasonable standards be previously made known by the employer to the probationary employee at the time of his engagement as correctly suggested by the POEA. she could have been dropped as early as during that period.e. While the employer observes the fitness. her services were continued. presumably because they were acceptable. Assuming that her probation could be extended beyond that date. 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 EE i. the probationer at the same time. However. MOLE (84) The employer has the right or is at liberty to choose as to who will be hired and who will be declined. it nevertheless could continue only up to October 15. 1991. implicit in Art. competence and attitude of a probationer. much less to prove that such standards were made known to him at the time of his recruitment in Manila. the probationary period of employment is limited to 6 months. she had become a regular employee of Holiday Inn and acquired full security of tenure as of October 15. The exception to this general rule is when the parties to an employment contract may agree otherwise. When her services were continued after this training. EMPLOYER RIGHT SET PERIOD/OBLIGATION Grand Motors Corp. NLRC (97) Under Art. Honasan was certainly under observation during her three-week on-the-job training. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Generally.LABOR LAW 1(Labor Standards & Termination of Employment ) 119 A probationary employee is one who. It is within the exercise of this right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. 1991. implies the purpose of the term or period. v. experience or training. there is still no reason why that period should not be included in the stipulated six-month period of probation. Honasan was accepted for on-the-job training on April 15. But she was not. 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 his engagement. Under this more lenient approach. during Honasan's on-the-job training. skills. Even if it be supposed that the probation did not end with the three-week period of onthe-job training. for a given period of time. where a probationary period was set for 18 months. A probationary appointment affords the employer an opportunity to observe the skill. the Court cannot sustain his dismissal on this ground because petitioner failed to specify the reasonable standards by which private respondent’s alleged poor performance was evaluated. NLRC (93) Probation is the period during which the employer may determine if the employee is qualified for possible inclusion in the regular force. On the contrary. 281 of the Labor Code. the petitioners in effect recognized that she had passed probation and was qualified to be a regular employee. especially where the EE must learn a particular kind of work such as selling or when the job requires certain qualifications. Orient Express Placement Philippines v. after the end of six months from the earlier date. propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment. Precisely. DURATION/EXCEPTION * May a company impose a longer probationary period than 6 months? Yes. 1991. the period was for three weeks. although she was formally placed this time on probation. seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. In the case at bar. If her services proved unsatisfactory then.

176 SCRA 218 In all cases involving employees engaged on probationary basis. By voluntary agreeing to the extension of the original probationary period. vs. Oreta & Co. (4) there must be no unlawful discrimination in the dismissal. Federation. When the bank renewed the contract after the lapse of the sixmonth probationary period. Nowhere in the employment contract executed by the company and Grulla is there a stipulation that the latter shall undergo a probationary period for three months before he can qualify as a regular employee. shall be considered as a regular employee. his probationary period for another 3 months. waived any benefit attaching to the completion of the said period. 141 SCRA 169. as amended. the employees thereby became regular employees. ad infinitum. he was informed by the ER that his work proved unsatisfactory. (Mariwasa vs. the standards by which he will qualify as a regular employee. RIGHTS OF PROBATIONARY EMPLOYEES. No employer is allowed to determine indefinitely the fitness of its employees.LABOR LAW 1(Labor Standards & Termination of Employment ) Bernardo v. D. in effect. His services cannot be terminated except for just and authorized causes enumerated under the Labor Code and under the employment contract. NLRC. During his tenure of employment or before his contract expires. and his services was terminated. Did he become a regular EE? NO. (2) If a particular time is prescribed. Leogardo) Phil. a probationary employee cannot be terminated. during which the bank determined the employees' fitness for the job. notwithstanding their limited tenure. there is justification in concluding that Grulla was a regular employee at the time he was dismissed by the company. Absent these requisites. etc. the termination must be within such time and if formal notice is required. (3) the employer’s dissatisfaction must be real and in good faith. LIMITATION TO TERMINATION OF PROBATION The employer’s power to terminate a probationary employment contract is subject to the limitations that: (1) It must be exercised in accordance with the specific requirements of the contract." The contract signed by petitioners is akin to a probationary employment. Thus. he cannot be removed except for causes as provided for by law. 281 Labor Code. the employer shall make known to the employee at the time he is hired. A probationary employee cannot be removed except for cause during the period of probation. as provided under Art. he still enjoys security of tenure. "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making permanent casuals of our lowly employees by the simple expedient of extending to them probationary appointments. Upon expiration of the probationary period. except for just cause as provided by law. NLRC (98) It is an elementary rule in the law on labor relations that a probationary employee who is engaged to work beyond the probationary period of 6 months. (Manila Hotel Corporation vs. or for any length of time set forth by the employer. To give him a chance to improve his performance and to qualify for her regular employment. His performance did not improve. or under the employment contract. Although a probationary or temporary employee has limited tenure. not feigned so as to circumvent the contract or the law. v. he is entitled to security of tenure during his period of employment. NLRC (99) 120 As held by the Court. TERMINATION ONLY FOR CAUSE Probationary employees. are also entitled to security of tenure. then that form must be used. NLRC. Mariwasa extended.) EXTENSION CONTRACT EFFECT EE’S D was hired on probation by Mariwasa. There is no evidence on record showing that Grulla had been apprised of his probationary status and the requirements he should comply with in order to be a regular employee. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . M. with his written conformity. As such.

Was the non-renewal violative of her security of tenure? Yes. A has been employed as school teacher for 22 years. she did not have to undergo a probationary employment as her teaching competence had already been tried and tested during her 22 years of service. The probationary period for private school teachers is three years as provided in the Manual of Regulations for Private Schools.LABOR LAW 1(Labor Standards & Termination of Employment ) NO SUCCESSIVE PROBATIONS 121 Thus. Is the refusal justified? Yes. (Octaviano vs. The teacher must have rendered 3 consecutive years of service.1 INTRODUCTION: EE’S SECURITY OF TENURE Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . who. b. Theresita’s Academy vs. After 3 years from her retirement. (Biboso vs. 153 SCRA 38. The positions were temporary in nature and her employment was for a definite period. * At the time of her retirement. probationary teachers are not entitled to the leaves specified in Section 2 of the School Manual. her contract was not renewed. Victoria Milling) Section 23: TERMINATION OF EMPLOYMENT 23. Deputy Minister of Labor. more often than not.) ABSORBED EE’S Private respondents could not be considered probationary EE’s because they were already welltrained in their respective positions. the probationary period for teachers is 3 years. she was rehired by the school teacher under contract which was renewable yearly. (Cebu Royal Plant [San Miguel Corporation] vs. again without security of tenure. so as to speak. (Cagayan Capitol College vs. c. No member of the country’s workforce must be allowed to be taken advantage of by any employer. NLRC (98) Clearly. (Cebu Stevedoring vs. Such service must have been satisfactory. NLRC) St. The court will not permit such subterfuge if it is to be true to the spirit and mandate of social justice. and then hiring him on probation. NLRC) RULE PRIVATE SCHOOL TEACHER Give the legal requisites for a private school teacher to acquire permanent employment and security of tenure? These requisites are: a. She could not only be dismissed for cause and with due process. are kept in the bondage. Before the expiration of the 2 nd yearly contract. The Court cannot countenance this overreaching. Even assuming that she was on probationary employment. of unending probationary employment without any complaint due to the serious unemployment problem besetting our country today.) The Supreme Court will not work any attempt to circumvent the law by separating an employee after five months’ service to prevent him from becoming a regular employee. NLRC and General Diesel Power Corporation. she could not be discharged solely on account of the expiration of her 2 nd annual contract. NLRC) * A teacher was hired by a private school on a yearly basis. (St. After 2 years of continuous satisfactory performance. (International Catholic Immigration Commission vs. We perceive these successive hirings and firings as a ploy to avoid the obligations imposed by law on employees for the protection and benefit of probationary employees. 202 SCRA 332. The teacher is a full time teacher. we can readily see that Line had been hired and again rehired and again and again fired. Regional Director) TERMINATION AND SALARY Award to the private respondent of the salary for the unexpired 3-month portion of her 6-month probationary employment who was validly terminated during her probationary employment is unjust and oppressive to the ER. Michael Academy v. When she was rehired. the school refused to renew her contract on the ground that her teaching performance was not satisfactory.

Phil. For instance. whatever missteps may be committed by labor ought not to be visited with a consequence so severe. NLRC)  Security of Tenure means the right not to be removed from one’s job except for a valid reason and through the proper procedure. Const. whether for profit or not. it cannot be too strongly stressed that where a decision may be made to rest on informed judgment rather than rigid rules. which is property in the constitutional sense. all the equities of the case must be accorded their weight. From the strictly juridical standpoint. fair standards of employment and the protection of labor laws. then they do not enjoy security of tenure. He cannot be deprived of his work. if the circumstances indicate that they are in reality independent contractors. So also a project or seasonal employee enjoys security of tenure even only for a duration of the limited period of their employment. authorizes neither oppression nor self-destruction of the ER. Labor law determinations should not only be secundum rationem but also secundum caritatem. Art. his family to consider. This explains why under the board principles of social justice the dismissal of EE’s is adequately protected by the laws of the state. 278 : The provisions of this Title shall apply to all establishments or undertakings. in addition. the worker’s right to security of tenure is not an absolute right for the law provides that he may be dismissed for cause. (Escareal vs. Alejandro) * Pakiao workers who by the nature of their work are considered regular workers enjoy security of tenure. (Almira vs. they had not been paid. Inc. * Confidential and Managerial EE are also entitled to security of tenure. (Dy Keh Beng vs. (Rance vs. 3. (Alhambra vs. There. (MERALCO vs. without a just cause and without the benefit of hearing. terminating a probationary employee needs a valid reason and proper procedure. Nor is this to condone what had been done by them. (Alcantara) SECURITY OF TENURE What is meant by the “security of tenure” of an EE? Security of tenure of an EE is his right against unjust and arbitrary dismissal. XIII. * In a host of cases. they remained secure in their employment during the period of time their respective contracts remained in effect. The law in protecting the rights of the laborers. NLRC) Probationary and Contractual EE’s enjoy security of tenure but only to a limited extent. Security of tenure is a right which may not be denied on mere speculation of any unclear and nebulous basis. Goodrich. Sec. the Court has upheld the employee’s right to security of tenure in the face of oppressive management behavior and management prerogative. * The code itself and the court rulings do not limit security of tenure to regular employees only. NLRC. (Labajo vs. (Inter-Orient Maritime vs. ILMU) However. That is. 58 SCRA 120 (1974).LABOR LAW 1(Labor Standards & Termination of Employment ) COVERAGE 122 Art. NLRC) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . For all this while. 213 SCRA 472) COMPASSIONATE JUSTICE Where a penalty is less punitive would suffice. (Alcantara) * Is there an express constitutional guarantee of the security of tenure of an EE? Yes. since the employer considered them separated from the service. NATURE OF RIGHTS Termination of employment is not anymore a mere cessation or severance of contractual relationship but an economic phenomenon affecting members of the family. It is not only because of the law’s concern for workingmen. The misery and pain attendant on the loss of jobs then could be avoided if there be acceptance of the view that under all circumstances of a case. NLRC) However. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner. the workers should not be deprived of their means of livelihood.

his duly authorized representative and 5. 4. must be exercised without grave abuse of discretion and putting to mind the basic elements of justice and fair play.  Where a lesser penalty would suffice. Right to transfer EE’s : It is management prerogative to transfer an EE from one office to another within the business establishment. because the preservation of the lives of citizens is a basic duty of the State. unless shown to be oppressive to and contrary to laws.  As part of management prerogative. any immediate member of his family or c. all aspects of employment. MANAGEMENT RIGHTS The following are management rights with respect to EE”s: 1. Ople) 2. Right to discipline : The ER has the prerogative to instill discipline in his EE’s and to impose reasonable penalties. (PTTC vs. (San Miguel vs.) 3. (Id. to transfer personnel. dismissal should not be imposed.  Company rules and regulations. are generally binding on the parties and must be complied with until finally revised or amended. 277(b) the Labor Code puts the burden of proof in the dismissal cases on the ER regardless of whether or not there was an admission.LABOR LAW 1(Labor Standards & Termination of Employment ) RATIONALE REGULATION 123 The right of ER to freely select or discharge his EE’s is regulated by the State. provided there is no demotion in rank or diminution of his salary. It cannot be used as a Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .2 MANAGEMENT RIGHTS AND THE JUST CAUSE OF TERMINATION Art. 2. In the process it may adopt or devise means designed toward the goal.  The grounds for dismissal shall be strictly construed since a person’s employment constitute a property under the context of the constitutional protection. Serious misconduct or willful disobedience by the ER of the lawful orders of his ER or representative in connection with his work. Analogous cases. 282 : An ER may terminate an employment for any of the following causes: 1. Minisrty of Labor) An EE’s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. the ER has the sole prerogative to adopt valid and equitable grounds as basis for terminating and transferring EEs. however. the person of his ER or b. on erring EE’s pursuant to company rules and regulations. Commission of a crime or offense by the EE against a. more vital than the preservation of the corporate profit. Gross and habitual Neglect by the EE of his duties. an ER is free to regulate. benefits and other privileges. NLRC) The managerial prerogative. Right to just share in the fruits of production : Every business enterprise endeavors to increase its profits. Fraud or willful breach by the EE of the Trust reposed in him by his ER or duly authorized representative. Silahis) 23. (Llosa-Tan vs. Right to manage people in general : Except as limited by special laws. (Yuco Chemical vs. including dismissal. 3. NLRC) 4. (San Miguel vs.  Art. according to his own discretion and judgment. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.

et al. the Supreme Court will uphold them. demote. basically in the exercise of its paramount police power.) The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Zulueta) LIMITS to MANAGEMENT PREROGATIVES 1) It must be exercised without abuse of discretion 2) It should be tempered with compassion and understanding 3) It must be exercised humanely 4) The penalty it must impose should be commensurate to the offense and to the degree of infraction 5) The ER should bear in mind that what is at stake is the EE’s livelihood 6) The ER should consider that a penalty less punitive may suffice 7) It must be the consciousness of the policy that the state regards the workers with compassion 8) It must always be borne in mind that “unemployment brings untold hardships and sorrows upon those dependent on the wage earner” * So long as a company’s prerogatives are exerted in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements. which as such are entitled to respect and enforcement in the interest of simple fair play. NLRC. Minister of Labor) An ER cannot legally be compelled to continue with the employment of a person who admittedly was guilty of malfeasance towards his ER. Inc. respect and protect the rights of their employees. (Mercury Drug Corporation vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 124 subterfuge by the ER to rid himself of an undesirable worker. It will demoralize the rank-and-file if the undeserving. 177 SCRA 580. Nor where the real reason is to penalize an EE for his union activities and thereby defeat his right to selforganization. can dismiss or lay off an employee for just and authorized causes enumerated under Article 282 and 283 of the Labor Code.) * It will be highly prejudicial to the interests of the employment to impose on him the services of an employee who has been shown to be guilty of the charges that warranted his dismissal. which include the right to labor. While the Constitution is committed to the policy of social justice and the protection of the working class. This is so because the preservation of the lives of the citizens is a basic duty of the State. NLRC) 6. (Rance. 163 SCRA 279. (Id. An employer. Employers should. Dismissals must not be arbitrary and capricious. NLRC. the right of an employer to freely discharge his employees is subject to regulation by the State. more vital than the preservation of corporate profits. (Shoemart. to be dispensed in the light of the established facts and applicable law and doctrine. The right to demote : It is management prerogative to transfer. provided it is not tainted with unfair labor practice (Petrophil vs. (Reyes vs. Ople. (Manila Electric Co. (San Miguel Brewery Sales vs. NLRC. discipline and even dismiss an EE to protect its business. therefore. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. 175 SCRA 277. vs. vs. Right to dismiss : The right of the company to dismiss its EE’s is a measure of selfprotection. and whose continuance in the service of the latter is patently inimical to his interests. the Supreme Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Management also has its own rights. if not undesirable.) * The law in protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer. generally. NLRC.) 5. 176 SCRA 385. remains in the service.) Power to Dismiss not Absolute The power to dismiss is the normal prerogative of the employer.) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . However. it should not be supposed that every labor dispute will be automatically decided in favor of labor. vs. has not blinded the Court to rule that justice is in every case for the deserving. Out of its concern for those with less privilege in life. Such favoritism. 170 SCRA 25. however. (Manila Trading vs.

drinking and having sex with one of the guards. a statute. Seniority rights. (Stanford vs. 2 other later cases ruled that the penalty of termination is extreme and excessive and is not commensurate with the acts committed. If there is a just or authorized cause the ER may terminate the services of an EE. NLRC) c. 145 SCRA 123. Such misconduct. conduct. (Dole Manual) ELEMENTS of Serious Misconduct: 1) It must be serious 2) It must relate to the performance of the EE’s duties 3) It must show that the EE has become unfit to continue working for the ER. (Luzon Stevedoring vs.) JUST CAUSES OF TERMINATION * May an ER dismiss an EE who enjoys security of tenure? Yes. Inc. NLRC. however serious. (Piedad vs. thereby terminating such rights. But when the EE holds a responsible position and has under him a good number of men. (Filipro vs. is a just cause for dismissal. and ability separate and independent of each other. insulting or offensive words against a superior (Asian Design vs. that the latter is responsible for the misconduct and the nature of his participation therein renders him absolutely unworthy of the trust and confidence demanded by his position.) Examples of serious misconduct : a. are contractual and not constitutional. (Alcantara) * Concededly.. the employer’s right to freely select or discharge his employees is subject to regulation by the State basically in the exercise of its paramount police power. willful in character. (Filipro vs. the former cannot be legally compelled to have in its employ s person whose continued employment is patently inimical to its interest. Deputy Minister of Labor) or challenging a superior officer to a fistfight. But the employer cannot be legally compelled to continue with the employment of a person who admittedly was guilty of misfeasance towards his employer and whose continuance in the service of the latter is patently inimical to his interest. 146 SCRA 393. 153 SCRA 500. Security of tenure does not guarantee perpetual employment. a dereliction of duty. nevertheless. the discharge of such employee. a forbidden act. 145 SCRA 123. (Alcantara) b. and implies wrongful intent and not mere error in judgment.) A. The misconduct to be serious must be of such a grave and aggravated character and not merely trivial or unimportant. The law in protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer. immorality does not justify a discharge. He has only such rights as may be based on a contract. NLRC.) * The employer may dismiss an employee if the former has reasonable grounds to believe. CIR) However. CA and Mary Johnston Hospital vs. or am administrative regulation relative thereto. As a general rule. NLRC) The controlling factor is the circumstances surrounding the willful misconduct. (Enriquez vs. Zamora. it is the transgression of some established and definitive rule of action. Hence. A series of irregularities when put together may constitute serious misconduct which. the EE must set Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . be in connection with the EE’s work to constitute just cause for its separation. would not violate the Constitution. Serious breach of company rules by allowing 2 security guards to come inside the Security Office. or to entertain the moral conviction. under Article 282 of the Labor Code. Lanao del Norte Electric Cooperative. * Fitness for continued employment cannot be compartmentalized into tight little cubicles or aspect of character. JUST CAUSE : SERIOUS MISCONDUCT What is serious misconduct? Misconduct is improper or wrong conduct. (Maranao Hotel vs.LABOR LAW 1(Labor Standards & Termination of Employment ) Seniority Rights 125 An employee has no inherent right to seniority. EE utters obscene. although both of them are married. must. which are acquired by an employee through long-time employment.

(Makati Medical Center vs. Seaman’s assault with a knife of a member of the ship’s crew. flagrant. dereliction of duty and challenging superior officers to a fight committed by a security guard. such dismissal is justified. CIR) e. has reference not only to the kind and character of directions and commands. Borrowing money from a patient which the EE later paid back. Southern P. Teacher falling in love with student provided the teacher did not take advantage of her position to court her student. The employee’s disobedience. but grossly immoral. NLRC) However. 291 SCRA 451. Vending. p. (Narag vs. Clave) B. it must be so corrupt as to constitute a criminal act or so unprincipled as to be reprehensible to a high degree or committed under such scandalous or revolting circumstances as to shock the common sense of decency. Furthermore. (Pacific Products) 3.LABOR LAW 1(Labor Standards & Termination of Employment ) 126 a good example for his men to follow. and engaging in usurious activities. where such intoxication interferes with the employment. NLRC) 2. a refusal to obey does not constitute a just cause for the employee’s discharge. NLRC) h. but also to the manner in which they are made. Narag. 63. Reasonableness. Ang Tibay) d. NLRC) * As a general rule. The test is not morality in the abstract. the immoral acts complained of were such as to render the servant incapable of performing the service properly or were calculated to injure the employer’s business. (Villarama vs. (Chua-Qua vs. (Adams vs. Further. (Aris vs. Buck Foundation vs. (PLDT vs. gross insubordination. in view of the terms of the contract of employment and the general rights of the parties. (Sanchez vs. Authorship of a manifesto which ridiculed the officers of a school and demanded their removal. (Luzon Stevedoring vs. (Azucena) g. (Haverton vs. Cheating a customer. (St. JUST CAUSE : WILLFUL DISOBEDIENCE Where an order or rule is not reasonable. immorality on the part of the employee does not justify a discharge therefore unless such conduct is prejudicial or in some way detrimental to the employer’s interests. 57 ALR 1066) Immoral Conduct Defined Immoral conduct has been defined as that conduct which is so willful.541. when there is use for a trust relationship as leverage for borrowing money. the act becomes serious misconduct. Sleeping in post. That is. Sexual harassment by a managerial EE of one of his subordinates. Fisticuffs between two EE’s as a result of mere private matter between them. however. NLRC) i. when he got a young concubine and drove away the members of his family from the conjugal home. soliciting. NLRC) f. NLRC) 4. As to what is a reasonable order or rule will depend on the circumstances of each case. 266. in order to justify his dismissal under this provision. Co.. Mary’s College vs. and which disrupted the good order and decorum in the school. (Pearl S. such conduct must not only be immoral. disobedience to be Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 204 Cal. taking the nature of the employment into account. Intoxication is such a misconduct as will justify separation from employment. when such charges in the manifesto are found to be not true. shameless as to show indifference to the opinion of good and respectable members of the community. must relate to substantial matters. not merely to trivial or unimportant matters. Thus.) What are examples of misconduct which does not warrant dismissal? 1. but whether.

but also the manner in which they are made. (DOLE Manual. (Nuez vs. NLRC. an EE of Tritran was told by the personnel manager to see right away the president to apologize for his past misdeeds. 4343. no separation pay. The orders. e. 2) Sufficiently known to the EE. 2. Her acts constitute serious defiance of the lawful orders of her superiors with respect to matters involving Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . to which the EE was already meted out disciplinary measures cannot be used as a justification for EE’s dismissal from service of the current infraction does not suffice as a ground for just termination. Zulueta) 4. even if he was employed for 19 years. 289 SCRA 48) * Not every case of insubordination or willful disobedience by an EE of a lawful workconnected order of the ER or its representatives is reasonably penalized with dismissal. The directive to see the company president was neither reasonable nor one connected with his duties. Allowing a customer to pass thru the exit gate without paying for the work done on his car. (Azucena) * The reasonableness and lawfulness of a rule.) What are the requisites in order that willful disobedience may constitute a just cause for terminating employment? 1. Mercantile Corp. (Filipino vs. (Dimalanta vs. Because of this. She refused to follow the instructions of the Board of Trustees of the hospital to buy from a food supplier who was willing to give a discount on food purchases. B was dismissed. Sanchez) 6. (Manila Trading vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 127 considered willful must be resorted to without regard to its consequences.) 2. regulations. Willful violation of rules and regulations designed for the safety of laborers i. Failure to comply with reportorial requirements in the sales policies. order or instruction depend on the circumstances availing in each case. (Northern Motors vs. NLRC) Examples of willful disobedience : 1. * B was employed as Chief Dietician of a hospital. He was dismissed because he failed to see the company president. The EE’s conduct must have been willful or intentional. There must be a reasonable proportionality between the offense and the penalty imposed therefor. willfulness being characterized by a wrongful and perverse mental attitude rendering the EE’s act inconsistent with proper subordination.01 [2]. (GTE vs. Sec. Is the dismissal justified? No. (Mancho vs. 3) In connection with the duties which the EE has been engaged to discharge. driver refused to drive EE’s to Makati head office to collect their profit shares despite repeated orders made by the vehicle supervisor and the officer-in-charge. NLRC) Past infractions. instructions of the ER or his representative must be: 1) Reasonable and lawful – has reference not only to the kind and character of directions. Secretary of Labor) 5. (Escobin vs. NLRC) In this case. Act of gambling if it is penalized under company rules with dismissal. smoking by a painter in the painting booth. Is the dismissal justified? Yes. on the basis of compassion was given to the EE. (Gold City vs. despite clear instructions to the contrary. N. NLU) 3. Violation of a rule which prohibits EE’s from using company vehicles for private purposes without authority from management and stubborn refusal to attend a grievance conference to discuss the violation. Ople) * M. Reasonableness pertains to the kind of character of directives and commands and to the manner in which they are made. and this was his 1st offense. (Soco vs.

moreover. GR No. putting to mind the basic elements of justice and fair play. it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. otherwise. (Leonardo vs NLRC and Reynaldo’s Marketing. The failure to report for work or absence without valid or justifiable reason. et al. They are also sufficient basis for her superiors to lose their trust and confidence in her. 240 SCRA212) Examples of gross negligence :  Failure to properly estimate the fair market value of a property to be used for a loan by an appraiser. and  Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Genilo)  The EE’s disobedience . Peftok Integrated Services. unless the contract of employment requires a higher degree of care. (See Pocketbell Philippines. Does such refusal constitute insubordination warranting dismissal? No. GR No. 125303 June 16. Thus. inconvenient and prejudicial to the displaced employee. should not result in demotion in rank or diminution in pay. a press-helper of a printing company drank beer outside company premises after his tour of duty. (Garcia vs. But this rule presupposes that the transfer order is lawful and reasonable.LABOR LAW 1(Labor Standards & Termination of Employment ) 128 her duties. in order to justify his dismissal under this provision. 118159 April 15. NLRC. 116568 February 9. There is no law which compels an EE to accept a promotion. Luke’s vs. It must be exercised without grave abuse of discretion. (Associated Bank vs. He was dismissed based on the company policy prohibiting “drinking in the company premises or coming to work under the influence of alcohol. NLRC) * G. It is sufficient that the gross and habitual neglect by the EE tends to prejudice the ER’s interest since it would be unreasonable to require the ER to wait until he is materially injured before removing the cause of the impending evil. Inc. 2002). It evidences a thoughtless disregard or consequences without exerting any effort to avoid them. or the entire absence of care. 240 SCRA 358. neither did he report for work under the influence of liquor because it was not their tour of duty then. He later went to the company’s canteen to eat lunch. 2000) Invalid Transfer Like other rights. not merely to trivial or unimportant matters. Gatchalian.. 2 elements must concur: 1. Having the right should not be confused with the manner in which that right must be exercised. (Dosch vs. (DOLE Manual) * Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence.  Disobedience.. Minister of Labor) * D. (Citibank vs. to be considered willful must be resorted to without regard to its consequences  REFUSAL TO TRANSFER An EE should. But the transfer can be upheld when there is no showing that it is unnecessary. must relate to substantial matter. 1998) The transfer. vs. NLRC and Arthur Alinas.. the neglect of duties must not only be gross but also habitual . an EE of Northwest Airlines refused a promotion. as a rule. or other privileges. Inc. JUST CAUSE : NEGLECT OF DUTIES What is the rule on neglect of duties to constitute a just cause for termination ? In order to constitute a just cause for EE’s dismissal. He who uses his own legal right injures no one. (Catalan vs. obey an employer’s order transferring him from one job assignment. Gross neglect means an absence of that diligence that an ordinarily prudent man would use in his own affairs.” Is the dismissal justified? No. there are limits to the managerial prerogative to transfer personnel. et al. vs NLRC. Nor when the real reason is to penalize an employee for his union activities and thereby defeat his right to self-organization. GR No. He did not drink beer in the company premises. or one location to another. (Escobin. NLRC) ABANDONMENT To constitute abandonment. Inconvenience to the EE does not justify disobedience to the transfer order.) C. He was exercising a right and he cannot be punished for it as quijure suo utitor neminem laedit. benefits. (St. the transfer amounts to constructive dismissal.

  Habitual tardiness and absenteeism (Sajonas vs. coupled with habitual tardiness. International Ceramics) * A. especially considering the fact that the employees involved were not mere rank-andfile employees but supervisors who owed more than usual fealty to the organization and were therefore expected to adhere to its rules in an exemplary manner. The company contends that his failure to work despite repeated notices constitutes abandonment and a ground for his dismissal.  An employee who took steps to protect his dismissal cannot by any logic to be said to have abandoned his work. (Cando vs. (Labor vs. LOSS OF CONFIDENCE What kind of FRAUD justifies as just termination? Fraud has been defined as any act. was transferred from the Fire Tender Section to the Pan Grinding Section. Thus. with the second element as the more determinative factor and being manifested by overt acts. 73140.  The ER has the burden of proof to show a deliberate and unjustified refusal on the part of the EE to resume his employment without any intention of returning. working as a lobby boy of a movie theater.) * S. He was guilty of serious neglect of his duties. NLRC) Numerous unauthorized absences. NLRC)  Abandonment cannot be lightly inferred. or concealment which involves a breach of a legal duty. There was nothing unusual or discriminatory in his change of assignment because the rotation was standard company practice. (Rizal Empire Insurance Group vs. When he was completely recovered. He asked that the change be recalled but his request was denied. (Phil. NLRC) * Acts of insubordination. He was dismissed pursuant to company [policy that an EE who incurs without valid reason 6 or more absences is subject to dismissal. NLRC. (Castillo vs. Geothermal vs. The company dismissed him due to abandonment. (DOLE. Abandonment is a matter of intention and cannot be lightly presumed from certain equivocal acts. fraud committed by an EE against 3rd persons not in connection with his work and which does not in any way involve his ER not a ground for the dismissal of the EE. was pursuant to standard management practice transferred from the day shift where he had been for quite some time to the night shift. JUST CAUSE : DISHONESTY. and therefore should be retained despite occasional lapse in punctuality and attendance. on the ground that the transfer was unreasonable and amounted to demotion. met a work-connected accident. To constitute a just cause for terminating the EE’s services.LABOR LAW 1(Labor Standards & Termination of Employment ) 129 2.  The concept of abandonment is inconsistent with the immediate filing of complaints for illegal dismissal. Perfection cannot after all be demanded. (Meracap vs. 183 SCRA 182. A 1 year suspension would be sufficient.) * An employee who consistently receives promotions in rank and salary must be a highly efficient worker. NLRC) D. he did not report for work. Is this valid? The penalty of dismissal is out of proportion to the offense committed considering the number of years of M’s employment. or representative and in connection with the EE’s work. As he disliked the new assignment. No. Is the dismissal valid? Yes. omission. the fraud must be committed against the ER. M. He however did not report to his new section. NLRC.R. employed with the company for 18 years. (Sajonas vs. trust or confidence justly reposed and is injurious to another. Is the dismissal jusitified? Yes. G. are sufficient causes for petitioner’s dismissal. CIR) * Due to unauthorized absences. A clear intention to sever the ER-EE relationship. 1989. Manual) Example of Dishonesty Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . May 29. he failed to report to work despite the certification of 5 doctors that he could resume his normal work.

( SMC vs. the innocent non-disclosure of facts by the EE to the ER will not constitute a just cause for the dismissal of the EE. i. (Firestone vs. (Almira vs. it must be substantial and not arbitrary. (Ibarrientos vs.) * More importantly. it must be shown that both the person who gives the order and the person who executes it are acting within the limitations prescribed by law. “It should not be used as a subterfuge for causes which are illegal. (Labor vs. to constitute as valid ground. which warrants dismissal from service. under the provision of law. Inc. nonetheless an employer cannot be compelled to continue in employment an employee guilty of acts inimical to the interest of the employer and justifying loss of confidence in him. whatever missteps may be committed by the worker should not be visited with the supreme penalty of dismissal. NLRC)  Since fraud implies willfulness or wrongful intent. But between a general law which enjoins obedience to a superior giving just orders. ii. (SMC vs. * Note that the length of time the EE is employed and the fact that it was the EE’s 1 st offense is an important factor in many of these cases wherein the penalty of dismissal was deemed to harsh. (Gelmart vs.  The failure of a division manager to detect and report the fraudulent activities in her division as well as her failure to give a satisfactory explanation for such irregularities constitute fraud or willful breach of trust reposed on her by her ER. iv. In order to be exempted on the ground of obedience. the penalty must be proportional to the offense committed. and a prohibitive law which plainly forbids what the superior commands. BF Goodrich)   Circulating fake tickets. vs. the choice is not doubtful. NLRC).) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . NLRC) However. (PAL vs.  Actual defraudation is not necessary in order that an EE may be held liable  That private respondent attempted to deprive PAL of its lawful revenue is already tantamount to fraud against the company. NLRC and Hotel Supreme..e. president of union should not be dismissed for leading an “unexpected strike” which lasted for 2 days and which resulted in a loss to the company of only P3. EE should not be dismissed for theft of used motor oil of minimal quantity if the EE has no previous record. an inferior should obey his superior. NLRC. etc. (Kwikway vs. 142 SCRA 376. Lariosa) However. iii. not a mere afterthought to justify an earlier action taken in bad faith. is subject to regulation by the State basically in the exercise of its paramount police power. It must be genuine. PALEA). NLRC) 130 * In order for obedience to be considered as an exempting circumstance. and must be founded on clearly established facts sufficient to warrant the EE’s separation from work. As a general rule.LABOR LAW 1(Labor Standards & Termination of Employment )  Falsification of time cards. (N.00 and it was the first offense in 7 years (PTTC vs. Mabeza vs. NLRC). NLRC. (Quezon Electric vs. 174 SCRA 510) Theft of company property. and that the person commanding act within the scope of his authority. counter–clerk of PLDT should not be dismissed for tampering with a phone bill where the worth of the tampering only amounted to P30. an illegal dismissal. NLRC. 152 SCRA667. improper and unjustified.: i. NLRC) * While the right of an employer to freely select or discharge his employee. Inciong). (Tabacalera Insurance Co. San Miguel Corp vs.. NLRC) Mere existence of basis for believing that the EE has breached the trust of ER is sufficient and does not require proof beyond reasonable doubt. we have repeatedly held that loss of confidence should not be stimulated in order to justify what would otherwise be.000. et al. Explain loss of confidence as a ground for just termination : The basic premise for dismissal on the ground of loss of confidence is that the EE concerned holds a position of trust and confidence. EE should not be dismissed for theft of lead pipe to be used for personal use if the EE has no previous record.00 (Sampang vs. 271 SCRA 670. Where a penalty less punitive would suffice. it must be in compliance with a lawful order not opposed to a higher positive duty of the subaltern.

LABOR LAW 1(Labor Standards & Termination of Employment ) 131 * In order to constitute a “just cause” for dismissal. 1989) If the EEs are cashiers. The right of an ER to dismiss EEs on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . managers. The pilferage could have been effected even if they were not EE’s of the cooperative. or other personnel occupying positions of responsibility. The offense they committed is not work-related. the act complained of must be related to the performance of the duties of the employee such as would show him to be thereby unfit to continue working for the employer. GR. supervisors. NLRC)  The basic premise for dismissal on the ground of loss of confidence is that the EE concerned holds a position of trust and confidence. GR No.. (Pepsico vs. Leogardo Jr. April 12. salesmen. (Lamsan Trading. there has to be some kind of proof that they are involved in the loss of company property. was dismissed by San Miguel for breach of trust due to possible involvement in a burglary incident. (Riker vs. It is the breach of this trust that results in the ER’s loss of confidence in the EE. Castro) Violation of the company sales policy of distributing its goods to as many customers as possible by a salesman who made it appear that they were sold to many customers. is loss of confidence a ground to dismiss them? No.73245. (Equitable Banking Corp. Lanao del Norte Electric Cooperative)       * 5 EE’s of an electric cooperative were dismissed for loss of confidence when they were caught pilfering electric current through tampered meters in their houses. NLRC. But if the EEs are ordinary rank-and file workers. (SMC vs. (Quezon Electric Cooperative vs. Considering that the EE’s held no position involving trust and confidence. et al. NLRC. if the activities tend to injure or endanger the business of the ER or the EE is unable to give time and attention to the discharge of his duties. (Quezon Electric Cooperative vs. Sept. the ER’s loss of trust and confidence on said EEs may justify the termination of their employment. and operators of equipment. where the same act constituted a ground of serious misconduct and breach of trust. 1986) A charge of dishonesty involves serious misconduct on the part of the EE. vs. a breach of the trust reposed by the ER upon him. (Azucena) Competing with ER’s business. (Piedad vs. Ople) Director who represented to the company that machinery brought were brandnew when in fact they were second-hand.e vs. Is the dismissal lawful? No. NRLC. The dismissal was effected despite J’s acquittal in a criminal case for the said offense. a checker. such as electricians. NLRC) Bank teller’s act allowing encashment of checks over the counter without verification of drawer’s signature. (Allied Bank vs.) Examples of loss of confidence as ground for just termination :  GM of hotel found to have anti-Filipino tendencies. NLRC) * Compare this with the case of Flores vs. Inc. Mere accusations by the ER will not suffice. although resulting in no material damage as the amounts were returned. * J. The rule that proof beyond reasonable doubt is not required to terminate an employee on the charge of loss of confidence and that it is sufficient that there is some basis for such loss of confidence is not absolute. No. The termination of rank and file EE’s due to breach of trust requires proof of actual involvement in the acts constituting the offense. 7971822. 273 SCRA 352. who did not perform his functions properly and who requisitioned wines for personal use. 30. NLRC) Engaging in business other than that of ER. (Filipro vs. (Azucena) Repeated shortages incurred by a bill collector.

Inc. illegal or unjustified 3. loss of confidence should ideally apply only: (1) to cases involving employees occupying positions of trust and confidence. 271 SCRA 670. all-encompassing pretext as loss of confidence. not mere afterthought to justify an earlier action taken in bad faith Guidelines Summarized While loss of confidence is one of the just causes for termination of an employee. suspend. there has to be some kind of proof that they are involved in the loss of company property.is routinely charged with the care and custody of the ER’s money and property To Whom Applicable. supervisors. While proof beyond reasonable doubt is required. could readily reduce to barren from the words of the constitutional guarantee of security of tenure. it should not be used as a subterfuge for causes which are improper. Leogardo.. To the first class belong managerial position. 144 SCRA 571 ) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . or those who.) * If the employees are cashiers. An ordinary chambermaid in a hotel does not fall under either category. illegal. loss of confidence should not be stipulated 2. such as electricians and operators of equipment. 5. (2) to those situations where the employee is routinely charged with the care and custody of the employer’s money or property. (Lamsan Trading. 259 SCRA 652. if unqualifiedly given the seal of approval by this Court.. or unjustified 3. in the normal and routine exercise of their functions. Jr. It must be genuine. salesman or other personnel occupying positions of responsibility. and 4. To the second class belong cashiers. KNOWINGLY and PURPOSELY without justifiable cause 3) He must be invested with confidence such as custody. the dismissal must rest on an actual breach of duty committed by the employee. and must be founded on clearly established facts sufficient to warrant the EEs separation from work. NLRC and Hotel Supreme. Such a vague. Loss of confidence should not be simulated 2. ( Labor vs. regularly handle significant amounts of money or property.who occupy positions of trust and confidence . recall. NLRC) Guidelines for the Application of the Doctrine of Loss of Confidence 1. Mere accusations by the employer may not suffice. all substantial evidence is vital and the burden rests on the employer to establish it. For loss of trust and confidence to be a valid ground for an EE’s dismissal.LABOR LAW 1(Labor Standards & Termination of Employment ) 132 without just cause. (Midas Touch Food Corp. i. etc. managers. the employee involved holds a position of trust and confidence.. the employer’s loss of trust and confidence on said employees may justify the termination of their employment. vs. Having this in mind. It should not be used for subterfuge for causes which are improper.. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. Mabeza vs. assign or discipline employees or effectively recommend such managerial actions. The guidelines for applying the doctrine of loss of confidence are: 1. It may no be arbitrarily asserted in the face of overwhelming evidence to the contrary 4. not a mere afterthought to justify earlier action taken in bad faith. discharge. (N. property custodians. auditors. it must be substantial and not arbitrary.) Elements of BREACH OF TRUST & Loss of Confidence 1) The loss of trust must be base on willful breach 2) Breach is WILLFUL if its is done INTENTIONALLY. But if the employees are ordinary rank-and-file workers. care and protection of company fund or property 4) The act that caused the loss of confidence/trust must be work-related  Loss of confidence applies to cases involving EEs who: . it must be genuine. those vested with the powers or prerogatives to lay down management policies and/or to hire. vs. transfer. lay-off.e. “Position of Trust” Explained Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check for terminating their employees.

Acda vs. be hinged upon conjectures and surmises. NLRC. Inc. ANALOGOUS CASES Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Loss of confidence as a ground for dismissal has never been intended to afford an occasion for abuse by the employer of its prerogative. as it can easily be subject to abuse because of its subjective nature. NLRC) * An employer may dismiss an employee for breach of trust in the handling of funds in spite of his having been acquitted in the course of criminal prosecution. in justice. The employee’s dismissal cannot justifiably be sustained since the findings in this case and whatever investigations may have been made by the employer fail to establish either complicity or culpability on his part.. 170 SCRA 134.) F. (Piedad vs. Minister of Labor. or legitimate.LABOR LAW 1(Labor Standards & Termination of Employment ) Proof Required 133 Loss of confidence is a valid ground for dismissing an employee and proof beyond reasonable doubt of the employee’s misconduct is not required. as it can easily be subject to abuse because of its subjective nature. The immediate members of the family referred to are limited to the spouse. The Minister of Labor (119 SCRA 306) Ruling: With the charges against petitioner found to be unsubstantiated. with more reason should conviction for such criminal charge fortify and mistrust. E.) * An employee who has been exonerated from a criminal charge of theft of gasoline on the basis of technicality may still be dismissed from employment if the employer has ample reason to mistrust him. NLRC. (Starlite vs. 153 SCRA 500. NLRC. If acquittal from the crime charge does not negate the existence of a ground for loss of trust and confidence. (Hernandez vs. and those by consanguinity within the 4th degree. or adopted brothers or sisters of the ER or of his relative by affinity in the same degrees. to warrant his dismissal by his ER and the fact that a criminal complaint against the EE has been dropped by the city fiscal as not binding and conclusive upon the tribunal. 177 SCRA 580. ascendants. to dismiss employees in contravention with the “protection of labor” clause of the Constitution. descendants. 176 SCRA 269. Conviction for a crime involving the loss of such funds is not necessary before the employee may be dismissed. While dishonesty or disloyalty of an employee is not to be condoned.) * Unsupported by sufficient proof. (Azucena) * Conviction or prosecution is not required. There is more reason for dismissal where the acts of misconduct and willful breach of trust are repeatedly committed by an employee. loss of confidence is without basis and may not be successfully invoked as a ground for dismissal. It is sufficient if there is some basis for such loss of confidence or if the employer has reasonable ground to believe or entertain the moral conviction that the employee concerned is responsible for the misconduct and that the nature of his participation therein rendered him unworthy of the trust and confidence demanded by his position (Reyes vs. Lanao del Norte Electric Cooperative. neither should a condemnation on that ground be tolerated based on suspicions spawned by a speculative inferences. (180 SCRA 281) The employee’s fate cannot. (Mercury Drug Corporation vs. we are left with no alternative but to hold that the so-called “loss of confidence” is without basis and may not be successfully invoked as ground for dismissal which requires some basis therefor. The loss of trust and confidence that the employer relied upon is unsupported by substantial evidence. JUST CAUSE : COMMISSION OF A CRIME OR OFFENSE * Another just cause of terminating an employment is the EE’s commission of a crime or offense against the person of his ER or against any immediate member of the ER’s family. natural.) San Miguel Corporation vs. such ground never having been intended to afford an occasion for abuse by the employer of its prerogative.

4. vs. a position is redundant when it is superfluous. NLRC) G. the employer must serve a written notice on the worker and the Department of Labor at least one (1) month before the intended date thereof. Associated Bank)  Faculty members of a school whose appointments as department heads are terminated. Benguet Consolidated) Examples of Analogous Cases : > Unreasonable behavior and unpleasant deportment in dealing with the people she closely works with in the course of her employment. (Nedura vs. 2.) INTRODUCTION OF LABOR SAVING DEVICES (AUTOMATION) AUTOMATION Reduction of the number of workers in a company’s factory made necessary by the introduction of machinery in the manufacture of its products is justified. Installation of labor saving device. NLRC.3 AUTHORIZED CASES OF TERMINATION Art. Art. is analogous to the other “just causes” enumerated under the Labor Code. However. Redundancy 3. It should not be made a pretext for easing out laborers on account of their union activities. 176 SCRA 256. There can be no question as to the right of the manufacturer to use new labor-saving devices with a view to effecting more economy and efficiency in its method of production. (Philippine Sheet Metal Workers’ Union vs. CIR. NLRC) 23. whichever is higher. the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service. Inc. 283 : The ER may also terminate the employment of the EE due to: 1. and superfluity of a position or positions may be the outcome of a number of factors such as: Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . in case of retrenchment to prevent losses and in case of closure or cessation of operations of the establishment or undertakings not due to serious business losses or financial reverses. 176 SCRA 256. not be abused. Other examples of just termination:  Courtesy resignation (Batongbacal vs. (ibid) REDUNDANCY Redundancy exists where the services of an EE are in excess of what is reasonably demanded by the actual requirements of the enterprise. 83 Phil 433) * The right to reduce personnel should. OTHERS 1. But neither should it be denied when it is shown that they are not discharging their duties in a manner consistent with good discipline and the efficient operation of an industrial enterprise. (Cathedral School vs.) Separation Pay In case of termination due to the installation of labor-saving devices or redundancy.LABOR LAW 1(Labor Standards & Termination of Employment ) 134 * To be considered analogous to the just cases enumerated. NLRC. of course. the cause must be due to the voluntary and/or willful act or omission of the EE. Closing or cessation of operation of the establishment or undertaking. the worker affected thereby shall be entitled to separation pay equivalent to at least one (1) month pay to at least one (1) month pay for every year of service. 284: EE who has been found to be suffering from a disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his coEE’s. whichever is higher. (La Sallette vs. (International Hardware vs. (International Hardware. Retrenchment to prevent losses. Required Notice To effect such termination of any employee. The purpose of such previous notice to DOLE is to enable it to ascertain the verity of the cause of termination of employment.

It must be reasonably necessary and likely to prevent the expected losses. even if the business does not suffer reduction or reverses.LABOR LAW 1(Labor Standards & Termination of Employment ) 1. redundancy results from the fact that the position of the employee has Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . over-hiring of workers decreased volume of business or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. As to cause. 4. (Escareal vs. .) What are the general standards to determine whether the retrenchment is valid? The general standards are the following: 1. (Lopez Sugar vs. NLRC)  Criteria in selecting EEs to be dismissed 1) 2) 3) less preferred status (temporary EEs) efficiency rating seniority Distinguish redundancy from retrenchment? Redundancy means that the position of the EE has become superfluous. I. The employer’s failure to prove it necessarily means that the employer’s dismissal was not justified. Alleged losses if already realized. (Precision Electronics Corporation vs. the required previous notice to the DOLE is not necessary as the employee thereby acknowledge the existence of a valid cause for termination of his employment. NLRC) RETRENCHMENT * Retrenchment is one of the economic grounds to dismiss employees. The losses expected should be substantial and not merely de minimis in extent. 4. 3. (Azucena) * Redundancy should carefully be distinguished from retrenchment. 135 * Redundancy in an ER’s personnel force. FFW) * Whether or not an employer would imminently suffer serious or substantial losses for economic reasons is essentially a question of fact for the Labor Arbiter and the NLRC to determine. However. That no other person was holding the same position which the dismissed EE held prior to the termination of his services does not show that his position had not become redundant. The ER should have taken other measures prior or parallel to the retrenchment to forestall losses. the date of termination should be at least 1 month from the date of notice to the workers. redundancy. * If an employee consented to his retrenchment or voluntarily applied for retrenchment with the employer due to the installation of labor-saving devices. closure or cessation of operation or to prevent financial losses to the business of the employer. 2. Requisites of VALID RETRENCHMENT 1) It is intended to prevent losses 2) Written notices are served on the workers and the DOLE at least 1 month before the effective date of retrenchment 3) Separation pay is paid to the affected workers  1 month pay OR ½ pay for every year of service WHICHEVER IS HIGHER  2-notice requisite is mandatory  If the notice to the workers was given later than the notice sent to DOLE. the employer bears the burden to prove his allegation of economic or business reverses. ( International Hardware vs. 178 SCRA 667. NLRC. It is resorted to by the employer primarily to avoid or minimize business losses. as such imminence can be perceived objectively and in good faith by the ER. an excess over what is actually needed. The law recognizes this under Article 283 of the Labor Code. 2. and the expected minimum losses sought to be forestalled. 3. must be proved by sufficient and convincing evidence. e. 5. The substantial loss apprehended must be reasonably imminent. however does not necessarily or even ordinarily refer to duplication of work. Their causes and effects are different. cut other costs other than labor costs.

including the retrenched employees. and excess over what is actually needed. (Asionics Phil vs. Consequently. the State is bound to intervene.) Note: DOLE clearance to terminate is no longer required. CESSATION An employer who has to cease operation because of compulsory acquisition by the government of its land for purposes of agrarian reform is not liable to pay separation pay to its affected EEs. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . at first glance. et al. Permanent retrenchment is contemplated in Article 283. NLRC) *Fraction of a year = 1 year Carmelcraft Corporation. Mendoza vs. The retrenchment was found justified and the strike was declared illegal. (ALU vs. b) Cessation or withdrawal from business operations must be bona fide in character. NLRC. were declared to have lost their employment status. some of the retrenched employees opposed the retrenchment by staging a strike. c) Payment to the EE’s termination pay amounting to at least ½ month pay. temporary retrenchment is included in Article 286.) CLOSURE OF BUSINESS Article 283 allows an employer to terminate the services of his employees in case of closure of business as a result of grave financial losses. etc. * As to effect. When the six-month period mentioned in Article 286 is over and the employee (still willing to work) is not recalled. 180 SCRA 568.. it is a cost-cutting measure made immediately necessary by business reduction or reverses. * Retrenchment is either permanent or temporary. the action amounts anyway to dismissal. he is deemed separated or constructively dismissed.LABOR LAW 1(Labor Standards & Termination of Employment ) 136 become superfluous. the separation pay for redundancy is higher than for retrenchment. NLRC) * Is the ER required to pay separation pay for closure of business due to the serious business losses? No. But the employer must comply with the clearance or report required under the Labor Code. (Needle Queen Corporation vs. 290 SCRA 164. NLRC (186 SCRA 393) The determination to cease operations is a prerogative of management that is usually not interfered with by the State as no business can be required to continue operating at a loss simply to maintain the workers in employment. whichever is higher. and the Mindanao Terminal vs. for every year of service. The cases of State Investment House vs. Minister of Labor provide that the rule in Article 283 with respect to separation pay applies only to closure not due to business reverses. But where it is manifest that the closure is motivated not by a desire to avoid further losses but to discourage the workers from organizing themselves into a union for more effective negotiations with the management. (Azucena)  The payment of separation pay is not required if closure is due to grave financial losses. it does not look like a dismissal. CA. vs. Nicolas. What are the requirements for a valid cessation of business not due to business reverses? a) Service of a written notice to the EE’s and to the DOLE at least 1 month before the intended date thereof. NLRC. * In one case. * The burden of proving that the termination was for a valid or authorized cause shall rest on the ER. the leaders of the strike. That would be a taking of property without due process of law which the employer has a right to resist. inasmuch as the retrenchment occurred much ahead of the strike. but upon interpretation. Should they still be paid separation pay because of the retrenchment? The Court resolved that they should be. Retrenchment is linked with losses. even if the business has not suffered reverses. (Indino vs. or 1 month pay. (“Constructive” dismissal is one inferred from construction or interpretation of the employer’s action. The declaration that they had lost their employment status produced no real significance to them since their retrenchment preceded the declaration of strike.

” (Cebu Royal Plant [San Miguel Corporation vs. 283 at the rate of 1 month’s OR ½ month’s pay per year of service WHICHEVER IS HIGHER. In merger. labor contracts being in personam. The legality in the manner of dismissal with due process. 153 SCRA 38. they may be required to pass probation. like in sale in bad faith. policy or contract. SALE IN BAD FAITH Although the purchaser of the assets or enterprise is not legally bound to absorb in its employ the EEs of the seller of such assets or enterprise. thus binding only between the parties. * The employee whose services are terminated on account of sickness or absences may be granted financial assistance equivalent to separation pay of one-half (1/2) month for every year of service. succession of employment rights and obligations occurs between the absorbing corporation and the employees of the absorbed corporation. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Vs. Sale in Good Faith No law prohibits bona fide sale of a going enterprise. the “successor employer” principle applies. NLRC)  The illegality of the act of dismissal constitutes discharge without just cause. 23. Book VI. it should likewise recognize the length of service in the previous employer. MERGER By the fact of merger. IRR’s) A medical certificate issued by the company’s own physician. the ER must pay the EEs the separation pay required under Art. (Sec. a employer. (Shoemart vs. Not only must the absorbing corporation retain the employees. labor contracts such as employment contracts and collective bargaining agreement are not enforceable against a transferee of an enterprise. It is not closure or cessation on account of serious business losses. has no legal obligation to continue employing the employees of the seller. and 2. the ER shall not terminate his employment unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of 6 months even with proper medical treatment.4 PROCEDURE TO TERMINATE EMPLOYMENT TWO FACETS OF VALID TERMINATION 1.). the law and rulings on unfair labor practice and the doctrine of successor employer may apply. is not a certificate by “competent public health authority. Rule 1. is obliged to pay separation pay and other benefits founded on law. When that happens. AILMENT OR DISEASE If the EE suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-EE’s. * A medical certificate issued by the company’s own physician. The seller. If the sale is tinged with bad faith. the parties are liable to the EEs if the transaction of the parties is colored or clothed with bad faith. the purchaser. Deputy Minister of Labor. 8. is not a “competent public health authority. Drilon (180 SCRA 14) Unless expressly assumed. if hired. Sundowner Development Corp.” * The ER must bear the burden of proving disease as an authorized cause to terminate employment. Consequently. The transferee may give employment preference to the former employees. unless he agrees to do so. while illegality in the manner of dismissal is dismissal without due process.LABOR LAW 1(Labor Standards & Termination of Employment ) 137 But relocating the business to a place to which the EEs cannot or do not want to transfer (principally because of distance) may be considered as cessation of business. The legality of the act of dismissal which constitutes discharge with just cause. however.

Failure to comply with the requirements taints the dismissal with illegality. By “ample opportunity” is meant every kind of assistance that management must be accord to the EE to enable him to prepare adequately for his defense. (Pepsi-Cola vs. the law requires ER to give BOTH the worker and the DOLE. (Offshore Industries. III. Under the rules. and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances. it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination. For termination of employment based on just causes as defined in Article 282 of the Code. NLRC) the the the the Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .LABOR LAW 1(Labor Standards & Termination of Employment ) DUE PROCESS : 138 Substantive due process mandates that an employee can only be dismissed based on just or authorized causes. vs. 283-284. NLRC)  If the separation is based on the authorized causes under Art.  if the EE consented to his separation (Authorized Cause: Redundancy). the following standards of due process shall be substantially observed: I. NLRC) The requirement of hearing affords the EE the opportunity to answer his ER’s charges against him and accordingly to defend himself therefrom before dismissal is effected. required previous notice to DOLE is not necessary as the EE thereby acknowledged existence of a valid cause for termination. 177 SCRA 50. including managerial employees. II. NLRC. and 2. The import of due process necessitates the compliance of these two aspects. is given opportunity to respond to the charge. OPPORTUNITY TO BE HEARD * An EE must be given ample opportunity prior to his dismissal to adequately prepare for his defense.) * The guarantee of due process applies to all workers. Subsequent notice which informs the EE of the ER’s decision to dismiss him. 290 SCRA 603. WRITTEN NOTICES 30 days ahead of projected date of separation. NLRC. Inc. no prior notice is required. NOTICE The law requires that the ER must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: 1. If the termination is brought about by the failure of the employee to meet the standards of the employer in the case of probationary employment. (Salaw vs. (b) A hearing or conference during which the employee concerned. In case of termination. (Maneja vs.) Standards of Due Process In all cases of termination of employment. present the evidence or rebut the evidence presented against him. Notice which apprises the EE of the particular acts or omissions for which his dismissal is sought (SHOW CAUSE NOTICE). indeed workers may be provided with a representative. grounds have been established to justify his termination. For termination of employment based on authorized causes defined in Article 283 of the Labor Code. (Ruffy vs. Procedural due process requires further that he can only be dismissed after he has been given an opportunity to be heard. the foregoing notices shall be served on the employee’s last known address. the requirements of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department at least thirty (30) days before the effectivity of the termination/ specifying the ground or grounds for termination. and giving to said employees reasonable opportunity within which to explain his side. with the assistance of counsel if the employee so desires. If the termination is brought about by the completion of the contract or phrase thereof. (a) A written notice served on the employee specifying the ground or grounds for termination.

the findings of the city fiscal were based solely on the affidavit of the accused-turned state witness. For the company to conduct its own investigation is a duplication of the JAGO and the city fiscal’s investigation. 277 : The burden of proving that the termination was for a valid or authorized cause shall rest on the ER. Later he was dismissed. * 36 conductors of a bus were dismissed after investigations conducted by the Jago and the fiscal found out that they defrauded the company.. As compared to the BLTB case. (Segismundo vs. During that time. The meeting called by the ER does not qualify as the hearing required by law. As she could not give an explanation. (Salaw vs. NLRC) * S was dismissed by his ER due to his well documented involvement in pilferage.e. 178 SCRA 386. The right to counsel cannot be waived except in writing and in the presence of counsel. NLRC. NLRC. hence. Prior to dismissal. * The right of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his union. NLRC) BURDEN OF PROOF Art. (Witshire vs. An employee is entitled to be protected not only from a company which disregards his rights but also from his own union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and.  The burden of proving payment of money claims rests on the ER.  One who pleads payment has the burden on proving it. The substantial evidence requirement is not present. The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. she was also called to explain her side. 180 SCRA 52. retrenchment or redundancy.  ER has custody of the documents that can resolve the issue of payment or nonpayment * In an unlawful dismissal case. Is the dismissal violative of due process? Yes.LABOR LAW 1(Labor Standards & Termination of Employment ) 139 * Where the employee denies the charges against him. (Carino vs. 185 SCRA 177.) * No hearing is required if the grounds for dismissal or termination of service does not relate to blameworthy act or omission on the part of the EE i. (Dizon vs. He denied involvement therein. (Roche [Philippines]. dismissal from his job. he was called to a meeting of all delivery personnel to discuss pilferage incidents. (China City Restaurant vs. Equipoise is not enough.) * W was called to the Office of the General Manager and was told that she was being charged with discourtesy and insubordination. NLRC. She was not given ample opportunity to be heard and to defend herself. (BLTB vs. Is this violative of due process? Yes. NLRC) * D was dismissed by his ER based on the preliminary investigation of the city fiscal which relied on an affidavit of an accused-turned state witness. a hearing is necessary to thresh out all doubts. she was dismissed. vs. The failure of the employer to give the employee the benefits of a hearing and an investigation before the termination constitutes an infringement of his constitutional right to due process of law. NLRC). Is the dismissal valid? No. Is the dismissal violative of due process? No. Montalvo) RIGHT TO COUNSEL The right to counsel is a basic requirement of substantive due process.) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . et al. the employer has the burden of providing the lawful cause sustaining the dismissal of the employee. is not wiped away by a union security clause or a union shop clause in a CBA. She was denied procedural due process.

A suspicion or belief no matter how sincerely felt cannot substitute for factual findings carefully through an orderly procedure. Ople. it is being sufficient that there is some basis for the same or that the employer has reasonable ground to believe that the employee is responsible for the misconduct and his participation therein renders him unworthy of the trust and confidence demanded by his position. The employee will not be reinstated.]. the employer will still pay the separation pay. proof beyond reasonable doubt is not required as basis for a judgment of the legality of an ER’s dismissal of an EE. the fact that the employer failed. vs. (Azucena) DISMISSAL FOR CAUSE BUT WITHOUT DUE PROCESS A sanction.) > He has no right to return to his former employment. NLRC) * Proof beyond reasonable doubt of the employees’ misconduct is not required. (Rubberworld [Phils. (Riker vs. (Philippine Associated Smelting and Refining vs. NOTE: In Serrano vs. prior to such termination to accord to the discharged employee the right of formal notice of the charges against him and a right to ventilate his side with respect thereto. For not observing due process. nor even preponderance of evidenced. 155 SCRA 85.) DEGREE OF PROOF In administrative or quasi-judicial proceedings. the Supreme Court en banc modified the Wenpbil doctrine. in the form of damages.  The PURPOSE of such 30-day NOTICE is to give the EE some time to prepare for the eventual loss of his job as well as the DOLE the opportunity to ascertain the verity of the alleged authorized cause of termination. he is deemed to have lost or waived his right to insist on the ER’s acts as a ground for dismissal. (MERALCO vs. the employer must nevertheless be held to account for failure to extend to the employee his right to an investigation before causing his dismissal. substantial evidence being sufficient. 283) does not constitute a denial of due process BUT a mere failure to observe a procedure for the termination of employment which makes the termination of employment mere INEFFECTUAL.LABOR LAW 1(Labor Standards & Termination of Employment ) 140 * It is not enough for an employer who wishes to dismiss an employee to charge him with theft or some other wrongdoing. If the termination is grounded in any of the authorized causes.   Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . However. NLRC. the employer will have to pay the employee’s full backwages from the time of dismissal to finality of the court’s decision. NLRC and Isetann Dept. NLRC. 183 SCRA 421.) CONDONATION Having condoned the misconduct of the EE and pardoned the latter. Accusation cannot take the place of proof. The validity of the charge must be established in a manner consistent with due process. Only if the termination of employment is not for any of the causes provided by law is it illegal and therefore the employed should be reinstated and paid back wages. NLRC) * It is now axiomatic that if just cause for termination of employment actually exists and is established by substantial evidence in the course of the proceedings before the labor arbiter. SERRANO CASE:  The ER’s failure to comply with the NOTICE requirement (Art. Inc. Prior written notice (30) days cannot be substituted with payment of 30 days salary. will not operate to eradicate said just cause so as to impose on the employer the obligation of reinstating the employee and otherwise granting him such other concomitant relief as is appropriate in the premise. Store (323 SCRA 445). 174 SCRA 550. must be imposed upon the ER for failure to give a formal notice and conduct an investigation as required by law before dismissing the EE from employment. (Wenphil vs.

(Soriano vs. SERRANO DOCTRINE The revision of Wenphil came in Serrano vs. The required 30-day advance written notices cannot be shortened or substituted for by 30-day’s pay. preventive suspension does not signify that the company has adjudged the employee guilty of the charges she was asked to answer and explain. (Azucena) RULES – MANAGERIAL EE’S AND RANK AND FILE EE’S As a general rule. • The EE is not considered to have been terminated from his employment UNTIL it is finally determined that his dismissal/termination of employment was for a cause and therefore he should be paid wages in the interim. NLRC. It has to be paid at the rates indicated in those articles. 193 SCRA 665) but the one month advance notices to the affected employee and to DOLE must be complied with. (New Imus Lumber vs. NLRC) PRESCRIPTION A complaint founded on illegal dismissal is not an ordinary money claim but for reinstatement.  Maximum period = 30 days  Beyond that the EE becomes entitled to his pay and benefits and the ER may be required to pay indemnity * By itself.5 CONSEQUENCES OF TERMINATION SEPARATION PAY Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . the due process requirement is not completely done away with. 2000). the court calls it “ineffectual”. 1146 of the NCC. But the dismissal is not outright illegal since it is based on a valid reason. The entitlement to separation pay as established in Arts. NLRC) PREVENTIVE SUSPENSION Preventive Suspension is justified when the EEs continued employment poses a serious and imminent threat to the life or property of the ER or his co-workers. (Ranara vs. NLRC et at (GR 117040. vs. 23. 282 or under Arts. This must be distinguished from the case of ordinary rank-and-file EE’s whose termination on the basis of these same grounds require a higher proof of involvement in the events in question. NLRC) OFFER TO REINSTATE The fact that his ER latter made an offer to re-employ him did not cure the vice of his earlier arbitrary dismissal. For not observing due process the ER will be required to pay.) DUE PROCESS IN AUTHORIZED CAUSES In employment terminations due to authorized causes. 155 SCRA 124. (Coca-Cola vs. The action may be brought within 4 years from dismissal pursuant to Art. (Wiltshire File Co. perform functions which by their nature require the ER’s full trust and confidence. not indemnity but the EE’s full back wages from the time of his dismissal to the finality of the court’s decision. 283 and 284 is not affected. The dismissal is merely defective.LABOR LAW 1(Labor Standards & Termination of Employment )  141 The order to pay full back wages is a consequence of the ER’s action in dismissing an EE without notice which makes the dismissal INEFFECTUAL. hence. January. NLRC. ER’s are allowed a wider latitude of discretion in terminating the employment of managerial personnel or those who. the EE remains dismissed. 283 & 284. The Wenphil-Serrano doctrine applies to all terminations whether under Art. mere uncorroborated assertions and accusations by the ER will not suffice. Such disciplinary measure is resorted to for the protection of the company’s property pending investigation of any alleged malfeasance or misfeasance committed by the employee. Investigation and hearing need not be done by the employer. otherwise the termination is illegal. while not of similar rank.

even in cases of legal dismissal under Article 282.LABOR LAW 1(Labor Standards & Termination of Employment ) 142 Four Kinds of Separation Pay Under present law and jurisprudence. (d) separation pay as an employment benefit granted in a CBA or company policy. (Nasipit Lumber vs. 2. separation pay may be viewed in four ways of contexts: (a) separation pay as employer’s statutory obligation in cases of legal termination due to authorized causes under Article 283 or 284. General Rule If there is valid cause to terminate an employment. Installation of labor saving devices and redundancy : 1 month or 1 month pay for every year of service. COMPUTATION of SEPARATION PAY It is error not to integrate the allowance with the basic salary in the computation of the separation pay.e. NLRC. should be such. (b) separation pay as financial assistance. The salary base properly used in computing the separation pay should include not just the basic salary but also the regular allowances that an employee has been receiving. Even if an EE resigns. Art. Book VI. Retrenchment to prevent losses and closure or cessation of operation or establishment or undertaking not due to serious business losses or financial reverses : 1 month pay or ½ month pay for every year of service. Antipathy and Antagonism Reinstatement is no Longer Possible : Strained relations in order that it may justify award of separation pay in lieu of reinstatement with backwages. Art. which ever is higher. whichever is higher. 169 SCRA 328) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . IRR’s)  Separation pay is a substitute to reinstatement when warranted  When the dismissal was legal. there is no obligation to pay separation pay (termination was not caused by the ER)  In cases of serious financial losses. (Sec. Rule I. Ministry of Labor) 4. 283 : f. there is no basis for reinstatement. he shall be given a separation pay if there is a company policy to that effect. no separation pay need be paid. as an act of social justice. 7. DISCERNING COMPASSION DOCTRINE : Separation pay shall be allowed as a measure of social justice for instances where the EE is validly dismissed for causes other than serious misconduct or those reflecting on his moral character i. vs. that the continued employment has become inconsistent with peace and tranquility which is an ideal atmosphere in every workplace. the company is not obliged to pay separation pay B. that they are so compelling and so serious in character. NLRC) 5. Exceptions 1. A. Notre Dame) This is particularly true when the position the EE is occupying is a position involving trust and confidence. (Sibal vs. (Philoil vs. 3. back wages and not even financial assistance  When the closure of the business is due to the implementation of the CARL. A was found to have demanded and received money in consideration for promise to facilitate approval of telephone line application. (Alcantara) C. (Planters Products Inc. 284 : h. whichever is higher. Disease : 1 month salary or ½ month salary for every year of service. g. (c) separation pay in lieu of reinstatement in illegal dismissal cases where the employee is ordered reinstated but reinstatement is not feasible.

279 : An EE who is unjustly dismissed from work shall be entitled to full backwages. (Art. EFFECT. (Reyes vs. Javate) BACKWAGES * Backwages in general are granted on grounds of equity which a worker has lost due to his illegal dismissal. Neither should “travels equivalent” (an unusual and unexplained term) and “commission in trading personal clients” be included in such base figure. or that there is an unfilled position more or less of a similar nature as the one previously occupied by EE’ (NATU vs. Leogardo) Backwages represent compensation that should be earned but not collected because of the unjust dismissal. NLRC.) But commissions (“override commissions” plus “net deposit incentive”) may not be included in such base figure since such commissions must be earned by actual market transactions attributable to the employee. NLRC) Differentiate backwages from separation pay? Separation pay is the amount that an EE receives at the time of his severance from the service and is designed to provide the EE with the “wherewithal during the period that he is looking for another employment. and to his other benefits or their monetary equivalents computed from the time his compensation was withheld from him up to the time of his actual reinstatement. which is immediately executory. (Medina vs. 1989: Art.” (Torillo vs.  After March 21. 223) In authorizing this. the 1st being usually the length of the EE’s service and the 2 nd the actual period when he was lawfully prevented from working. CBS) * The decision of the labor arbiter reinstating a dismissed EE is immediately executory even while the case is brought up on appeal. (Durabilt vs. 155 SCRA 124. * The effects of extraordinary inflation are not to be applied without an agreement between the parties and without an official declaration thereof by competent authorities. Secretary of Labor) * An ER has 2 options in order for him to comply with an order of reinstatement. (Soriano vs. (Lim vs. Secondly. (Lantion vs. the law itself has laid Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 154 SCRA166. NLRC) The basis of computing the two are different. the court may not only mitigate. The acceptance of those benefits would not amount to estoppel. GAUF) REINSTATEMENT * Reinstatement is a restoration to a state which one has been removed or separated. he can reinstate the EE merely in the payroll. (Id. (Torillo vs. even pending appeal. It is the return to the position from which he was removed and assuming again the functions of the office already held. COMPUTATION OF BACKWAGES  Before March 21. Reinstatement presupposes that the previous position from which one had been removed still exists. but also absolve the ER from liability fro backwages where good faith is evident. Leogrardo) As a general rule.RECEIPT EE’s who received their separation pay are not barred from contesting the legality of their dismissal. Minister of Labor) While generally an order of reinstatement carries with it an award of backwages. NLRC.LABOR LAW 1(Labor Standards & Termination of Employment ) 143 In the computation of back-wages and separation pay.) D. he can admit the dismissed EE back to work under the same terms and conditions prevailing prior to his dismissal or separation or to a substantially equivalent position if the former position is already filled up. an EE is entitled to backwages only where his dismissal is due to the unlawful act of the ER or to the latter’s bad faith. account must be taken not only of the basic salary of the employee but also of the transportation (Santos vs. (San Miguel vs. inclusive of allowances. 1989: Backwages up to 3 yrs without deduction or qualification. firstly.) A.

if viable. The Labor case is a later case. (Labor vs. NLRC) says that EE is entitled to reinstatement although he failed to specifically pray for the same. Reinstatement on the other hand. separation pay is awarded to the employee. as a general rule. Thus. BUSTAMANTE DOCTRINE: Backwages to be awarded to an illegally dismissed employee should not. (Maranao Hotel vs. They are separate and distinct from each other. good customs or public policy. the court may not only mitigate but also absolve the ER from liability for backwages where good faith is evident. however. the manager of Dunkin Donuts violated procedural due process. (Aria vs.  Although. NLRC) But an earlier case. while the grant of backwages allows the same employee to recover from the ER the wages he lost because of his dismissal. or was done in a manner contrary to morals. G held a sensitive position. Payroll reinstatement or actual reinstatement needs the issuance of a writ of execution.  REINSTATEMENT restores the employee who was unjustly dismissed to the position from which he was removed. DAMAGES Moral damages are recoverable in dismissal cases only where the dismissal was attended by bad faith or fraud or constituted ac act oppressive to labor. Exemplary damages in dismissal cases may be awarded only if the dismissal was effected in a wanton. NLRC) BACKWAGES: ILLEGAL TERMINATIONS Backwages and reintatement are 2 reliefs given to an illegally dismissed employee. The company refused on the ground of loss of confidence of G. be diminished or reduced by the earning derived by him elsewhere during the period of illegal dismissal  The full back wages without deductions serve as part of the price or penalty the employer must pay for illegally dismissing the employee. G asked that he be reinstated. and therefore. * After a finding that the dismissal of G. his dismissal is unwarranted and.  The decision of the Labor Arbiter reinstating a dismissed EE is immediately executory even while the case is brought up on appeal * What if reinstatement is not prayed for in the case before the labor arbiter. in the event that reinstatement is no longer possible. means restoration to a state of condition from which one had been removed or separated. an order of reinstatement carries with it an award of backwages. (Golden Donuts vs. an illegally dismissed employee is entitled to: a) either reinstatement. The EE will not be reinstated if he did not pray for reinstatement. oppressive or malevolent manner. Considering. However.LABOR LAW 1(Labor Standards & Termination of Employment ) 144 down a compassionate policy which once more vivifies and enhances the provisions of the Constitution. NLRC) * Reinstatement is not self-executing. that the relationship between the Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . the award of separation pay is in lieu of reinstatement and not of backwages. STRAINED RELATIONS MAY BAR REINSTATEMENT Where the charge against the EE has not been substantiated. He should be paid severance compensation in lieu of reinstatement. or separation pay if reinstatement is no longer viable. generally. Is the labor arbiter allowed to grant reinstatement? No. illegal. and b) back wages Back wages in general are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal. The case left both parties with less than full trust and faith in each other. In other words. Is the refusal valid? Yes. NLRC)  Reinstatement pending appeal is not only immediately executory it is selfexecuting. (General Baptist College vs.

then he has no other choice but to disassociate himself from his employment. the notification requirement was devised in order to ensure that no disruption of work would be involved by reason of resignation. the Court would order the payment of back wages and separation pay instead of reinstatement.6 TERMINATION BY EE AND SUSPENSION OF OPERATION TERMINATION BY EE – JUST CAUSES Art. The management based its action merely on communications between officers of the company.  There can be constructive dismissal only if there was demotion in rank or diminution in pay  FLOATING STATUS beyond 6 months. 3. NLRC) * Z was hired as a production recorder by a tobacco company. After 14 years of occupying the position. NLRC) B. NLRC) This is not a case of voluntary resignation. This practice has been recognized because “every business enterprise endeavors to increase its profits by adopting a device or means designed towards that goal. In such situation. an offer involving a demotion in rank and diminution in pay. (Rizal Memorial vs. WITHOUT JUST CAUSE – REQUISITES Art. she was demoted to picker by reason of inefficiency due to alleged frequent mistakes in her report. to order reinstatement would no longer serve any prudent purpose. (Intertrod Maritime vs. The EE upon whom no such notice has been served may hold the ER liable for damages. any immediate members of his family. Was the dismissal justified? No. (Azucena) 23. 286. 2. Resignation once accepted and being the sole act of the EE may not be withdrawn without the consent of the ER. and 4. 285(a) : An EE may terminate without just cause the ER-EE relationship by serving a written notice on the ER at least 1 month in advance. or ii. The demotion done in bad faith constitute constructive dismissal. It is in the nature of a contrivance to effect to dismissal without cause. 285 : An EE may put an end to the relationship without serving any notice on the ER for any of the following just causes: 1. may also amount to constructive dismissal SUSPENSION OF OPERATIONS Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .  Resignation is withdrawable even if the EE has called it “irrevocable”  If it is accepted or approved by the ER. Human and unbearable Treatment accorded the EE by the ER or his representative. unreasonable or unlikely. Commission of a crime or offense or his representative against i. Analogous cases. RESIGNATION (1 mo advance notice) Resignation is a voluntary act of an EE who “finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service. She was not notified in advance of the company’s actions. CONSTRUCTIVE DISCHARGE * A constructive discharge is a quitting because continued employment is rendered impossible. under Art. the person of the EE.” The ER has no control over resignation and so. Serious insults by the ER and or his representative on the honor and person of the EE. Z refused to report for work and filed a complaint for illegal dismissal.LABOR LAW 1(Labor Standards & Termination of Employment ) 145 EE and the ER has been severely strained by reason of their respective imputations of bad faith against each other. as. its withdrawal needs the ER’s consent  An EE who resigns and executes a quitclaim is generally estopped from filing an illegal dismissal case. (Philippine Japan Active Carbon vs. A.

(Aquino vs. faculty members whose services are terminated shall be granted retirement Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . however. (GVM vs.  The retirement pay payable under Art. (Llora Motors vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 146 Art. an EE upon reaching the age of 60 years or more. NLRC) BENEFIT * Retirement benefits are intended to help the EE enjoy the remaining years of his life. NLRC) * The CBA between a university and its faculty members provided that in case of unusual circumstances. service and agricultural establishments or operations employing not more than 10 EE’s or workers are exempted from the coverage of this provision. the EE shall be entitled to receive such retirement benefits as he may have earned under existing laws and any CBA agreement and other agreements: Provided.  Restriction in private retirement plan will not prevent the EE from retiring optionally at age 60 OBLIGATION * The law does not impose any obligation upon ER’s to set up a retirement scheme for their EE’s over and above that already established under existing laws. In all such cases. lessening the burden of worrying for his financial support. the ER shall reinstate the EE to his former position without loss of seniority rights if he indicates his desire to resume his work not later than 1 month from the resumption of operations of his ER or from his relief from the military or civic duty. may retire and shall be entitled to retirement pay equivalent to at least ½ month salary for every year of service. 287 is APART from the retirement benefit claimable by the qualified EE under the Social Security Law. Unless the parties provide for broader inclusions. 286 : The bona fide suspension of the operation of a business or undertaking for a period not exceeding 6 months. the term ½ month salary shall mean 15 days plus 1/12th of the 13th month pay and the cash equivalent of not more than 5 days of service incentive leaves. a CBA or employment contract or an established EE policy. NLRC) Section 24. or the fulfillment by the EE of a military or civic duty shall not terminate employment. then the worker’s employment shall be deemed terminated. In the absence of a retirement plan or agreement providing for retirement benefits of EE’s in the establishment. RETIREMENT Art. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Art. 287 : Any EE may be retired upon reaching the retirement age established in the CBA or other applicable employment contract. a fraction of at least 6 months being considered as 1 whole year. (Lucky Textile vs. and are a form of reward for his loyalty and service to the ER. That an EE’s retirement benefits under any CBA and other agreements shall not be less than those provided therein. who has served at least 5 years in the said establishment. In case of retirement. * It is settled that when the bona fide suspension of operations of a business undertaking exceed 6 months. but not beyond 65 years which is hereby declared the compulsory retirement age. Retail. Drilon) * Entitlement of EE’s to retirement benefits must be specifically granted under existing laws. 288 of this Code.

and who are given separation pay pursuant to law also entitled to retirement benefits? Yes. Is such a legal imposition valid and constitutional? Membership in the SSS is not the result of a bilateral. in compliance with a lawful exercise of the police power of the State. such as phase-out. There is no provision in the CBA to the effect that termination benefits received under the law shall preclude the EE from receiving other benefits under the agreement. develop. natural or juridical. sickness. Membership in the SSS is. 25. death. including GOCC’s controlled by the government. old age. (UE vs. domestic or foreign. * Self –employed – is both ER and EE at the same time. SSL : “EE” – Any person who performs services for an ER – where either mental and physical efforts are used and who receives compensation for such services and where there is an ER-EE relationship. Separation pay arising from a forced termination of employment and benefits given as a contractual right due to many years of faithful service and are not necessarily antagonistic to each other.3 DEFINITIONS Employer Section 8. SSL : Legal spouse entitled by law to from member to receive support.2 POLICY OF THE STATE Section 2. SSS) 25. consensual agreement where the rights and obligations of the parties are defined by and the subject to their will. SSL : The Act shall be known as the Social Security Act of 1997. to which the principle of non-impairment of the obligation of contract is not a proper defense. SSL : “ER” – any person. SSL : It is a policy of the State to establish. who carries on in the Philippines any trade. * The law imposes upon ER’s and EE’s the obligation to become members of and make contributions to the Social Security System. 1 SOCIAL SECURITY LAW (SSL) RA 1161 (as amended by RA 8282) Section 1. Employee Section 8. it is designed to provide security to the working men. therefore. What ER’s are exempted from the SSS Law? Government and any of its political subdivisions. business industry. maternity. Section 8. promote and perfect a sound & viable tax exempt SSS which shall: a) promote social justice and b) provide meaningful protection to members and their beneficiaries against the hazardous of disability. Dependent 1. Minister of Labor) PART II SOCIAL SECURITY 25. undertaking or activity of any kind and uses the services of another person who is under his orders as regards the employment. and other contingencies resulting in loss of income or financial burden. (PBM vs. The law requires compulsory coverage of ER’s and EE’s.LABOR LAW 1(Labor Standards & Termination of Employment ) 147 benefits. Child : 1) legitimate 2) legitimated Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Are faculty members affected by an unusual circumstance. branches or instrumentalities.

All EE’s not over 60 years of age on date of employment and ER’s on 1 st day of operation. The wife of V is not entitled since she does not qualify anymore as beneficiary since she is not dependent upon the husband. SSL :  Dependent spouse – until remarriage  Dependent legitimate. scriptwriters. OTHERS Sec. Eddie’s legitimate children are not considered dependents since they are already married. 8 Dependent parents C. actresses. partners and single proprietors of businesses. and jockeys and individual farmers and fisherman. (Salmonte vs. PRIMARY 1. Sec. SSL) 2. (Sec. his girlfriend whom he designated as beneficiary. V is not among the primary and secondary beneficiaries provided under the law.LABOR LAW 1(Labor Standards & Termination of Employment ) 3) 4) 148 legally adopted illegitimate who is unmarried. actors. the husband V lived with another woman. 9. Self-employed as determined by the commission but not limited to self-employed professionals. * After 4 years of marriage. trainers. 8. 8. SECONDARY Sec. news correspondents who are not EE’s. Employment purely casual and not for the purpose of occupation or business of the ER. (Alcantara) * E. Thus. coaches. Thereafter. The claim is contested by V. SSL) Enumerate the kinds of employment which are excepted from compulsory coverage under the SSL? 1. 9 and 10. * S. who is entitled to his death benefits? Any legitimate children of V and illegitimate children (50% of the share of the legitimate children). Who is preferred? L. Service performed on or in connection with alien vessel if EE employed when such vessel is outside of the Philippines. Beneficiaries A. Parent : Who is receiving regular support from member. L. S’ brother. professional athletes. COMPULSORY Enumerate the kinds of employment under compulsory coverage under the SSL: 1. His death benefits are claimed by L. SSL) 2. Salmonte) B. designated M as his beneficiary. (Id. When V died. (Alcantara) 25. directors. 8 : Absent primary and secondary beneficiaries any other person designated by members as secondary beneficiary. the spouses Salmonte broke up. The wife left the conjugal home. (Sec. a bachelor dies. physically or mentally. (Sec. The unemployed married children of E contests the payment of death benefits to M.) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .4 COVERAGE A. Is the contention valid? No. and not gainfully employed and not reached 21 or over 21 is congenitally or while still minor permanently incapacitated and incapable of selfsupport. legitimated and legally adopted children. the designated beneficiary is preferred. a widower. legitimated or legally adopted and illegitimate children – provided that the illegitimate children shall be entitled to 50% of the share of the legitimate.

) 5. 3. B cleaned the premises of the church. He shall not be required to pay contributions. Spouse who devote full time managing household and family affairs unless specifically mandatorily covered. SSL) 25.) 6. Although an EE is separated from service and has ceased to pay premiums. tolled its bells. Is he entitled to disability benefits at the time of his stroke? Yes. 8. His dismissal effected him so much that 2 months after he suffered a stroke. is considered his ER. EE separated from employment (Sec. 9.) 149 4. (Sec. SSL) 3. 2. He is considered an EE. Individual farmers and fishermen under SSS rules and regulations. (Bascuna vs. instrumentality or agency thereof. (Section 9. J was fired without cause. EE’s of the Philippine government. SSL) 2. (Sec.00 on the date of their employment. (Alcantara) 25. Is B subject to compulsory coverage? Yes. Roman Catholic Archbishop) B. (Sec. EE credited with all contributions paid and entitled benefits according to SSL. 11. or international organizations or wholly-owned instrumentality. 9) 7. Service performed in the employ of a foreign government. (Sec. Filipinos recruited by foreign ER’s for employment abroad. SSL) What are the effects if self-employed realizes no professional or business income? 1.000. 11. (Id. As J was a member of SSS. EE may continue to pay total contribution to maintain right to full benefit.LABOR LAW 1(Labor Standards & Termination of Employment ) 3. he shall be entitled to contributions and to benefits available under the law. (Sec. he received 5% of the monthly income of the church. (Id.6 REPORTING REQUIREMENTS Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Domestic helpers who are 60 years of age and below with a monthly income of less than P1. he remained an SSS member. SSL) * After working for 5 years. and assisted the priests in the masses and other church services. VOLUNTARY Enumerate the kinds of employment under the SSL? 1. international organization or wholly owned instrumentality employing workers in the Philippines or employing Filipinos outside of the Philippines may enter into an agreement with the Philippines for the inclusion of such EE’s in the SSS except those already covered by their respective civil service retirement system.) * As sacristan in the Catholic Church. He may be allowed to continue to pay contributions under the same rules as a separated EE. to whom a share of the income or collection is sent. The Archbishop as corporation sole.5 EFFECT OF SEPARATION FROM EMPLOYMENT OR INTERRUPTION OF BUSINESS OF PROFESSIONAL INCOME What are the effects of separation from employment of an EE compulsorily covered? 1. ER contribution shall cease at the end of the month of separation an EE not required to pay contributions. (Id. (Id. Services performed by temporary EE’s excluded by SSS regulation. BY ARRANGEMENT When can coverage be by arrangement? Any foreign government. 11. SSL) C. 2. In consideration of these services.

12-B. ER’s contribution : ER shall pay. whenever the hazards provided by the law occur.7 FUNDING I. Sec.00 for those with 20 credited years of service. civil status. salaries and dependents.  Confinement for more than 3 days  Notice to ER within 5 calendar days of sickness  Exhaustion of sick leaves with full pay. Government contributions : Appropriation of necessary sums to meet the estimated expenses of the SSS for each ensuing year. 12-A. SSL : Failure of refusal of the ER to pay or remit contributions shall not prejudice the right of the covered EE to the benefits of coverage. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .400. civil status. (CMS Estate vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 150 1. 25. SSL)  payment of at least 3 monthly contributions in the 12-month period immediately preceding the sickness. The funds contributed to the System belong to the members who will receive benefits. (Sec. the ER’s contribution in accordance with the schedule indicated in Section 18 of this Act. (Sec. (Sec. SSS) EFFECTS OF NON-REMITTANCE Sec. SSL) 7. SSL)  paid at least 120 monthly contributions  monthly pension for as long as he lives 4. SSL)  Minimum pension of P1. compensation or earnings. 14. Funeral (Sec. 2. 25. SSL)  paid at least 36 monthly contributions  lump sum of 36 monthly pensions 5. Sec. 13. EE’ s contribution : The ER shall deduct and withhold from such EE’s monthly salary. 13-B. with respect to such covered EE. occupations. SSL : Each ER shall immediately report EE’s names. 8 BENEFITS I. 2. 12. 4. Permanent disability (Sec. 8)] 2. wage. Dependents pension (Sec. the EE’s contribution.00 for members with at least 10 credited years of service and P2. What are the different sources of funding for the SSS? 1. SSL) 3. Death (Sec. 22. ages. 24-A : Each covered self-employed shall within 30 days from the 1 st day he started practice register and report to the SSS his name. Retirement (Sec. Contributions from those voluntarily covered by the SSS. SSL) 6. What are the different types of benefits under the SSL? 1. average monthly net income and his dependents. II. 18) [“Compensation” – an actual remuneration as well as cash value of any remuneration paid in any medium other than cash. Sickness (Sec.200. 13-A. age. 3. occupation. Monthly pension. as a matter of right. 24.

a married male employee. SSL : Benefits are not transferable. PRESCRIPTION PERIODS Art. 14-A. is employed at the time of delivery of his child. 4 of the law’s implementing rules. Sec. 1144 : 10 years from the time the right of action accrues since this is an obligation created by law. prior application for leave is not required. In case of miscarriage. 2He is cohabiting with his spouse at the time she gives birth or suffers a miscarriage. attorney.  * On his way home from work. Paternity Leave Act of 1995(RA 8187) : Notwithstanding any law. SSL : No fees shall be payable to agent. SSL)  A female member who has paid at least 3 monthly contributions in the 12 -month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to 100% of her average daily salary credited for 60 days or 78 in case of caesarian delivery for the 1 st 4 deliveries or miscarriages. 15. 16. Conditions to entitlement: 1The claimant. either before or after receipt except to pay any debt of member to SSS. every male EE in the private and public sectors shall be entitled to a paternity leave of 7 days with a full pay for the 1 st four deliveries of the legitimate spouse with whom he is cohabiting. fees or charges and shall not be liable to attachment. attorney or other person for the collection of their behalf shall be recognized except which beneficiary is physically unable to collect. Maternity (Sec. filing or pursuing any claim and any stipulation to the contrary is void. He is stabbed by an unknown assailant while watching. garnishments. No power of attorney or other documents executed as beneficiary in favor of any agent. or within the period provided by company policy. Section 2. What is required is membership in the SSS. Is the denial valid? No. Exception: Social Security Commission may authorize payment where the best interest of the SSS will be served. II. Members of Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 .LABOR LAW 1(Labor Standards & Termination of Employment ) 151 8. and 4His wife has given birth or suffered a miscarriage. R went to a movie house to watch. SSL : All benefit payments made by SSS shall be exempt from all kinds of taxes. levy or seizures by or under any legal or equitable process whatsoever. The male EE applying for paternity leave shall notify his ER of the pregnancy of his legitimate spouse and the expected date of such delivery. 3He has applied for paternity leave in accordance with Sec. 15. 17. Sec. other person-in-charge of preparation.  These are all tax-exempt. It is not necessary for the enjoyment of benefits that there be casual connection between the injury and the work of the EE. Sec. SSL : When Beneficiary is a national of a foreign country which does not extend benefits to Filipino beneficiary residing in the Philippines or which is not recognized by the Philippines. BENEFIT PROTECTION Sec. General Rule : He is not entitled to benefit.  “wife” refers to the lawful wife which means the woman who is legally married to the male EE concerned. Leave application should be filed with the ER within a reasonable time from the expected date of delivery by the pregnant spouse. The SSS denied his claims on the ground that the injury is not workconnected. rules and regulations on the contrary.

3Funded by monthly contributions of all covered ER’s. ECC) Give the characteristics of the EE’s Compensation Program 1Tax exempt 2Designed to ensure promptitude in cases of work-connected disability or death in the award of benefits. 166 : To promote and develop a tax exempt EE’s compensation program whereby EE’s and their dependents. penalties and any related matter shall be decided by the Social Security Commission or duly designated member. to compensate reasonably those who are injured while in the employment of others. any stipulation of the contrary shall be null and void. (Sarmiento vs. Appeal to the SC on pure questions of law. necessary cost of production. the statute is a remedial one. and medical or related benefit. 5Benefits are exclusive and in place of all other liabilities of the ER to the EE. 25. 5. Section 26. may secure adequate income benefit. EXECUTION OF DECISIONS Sec. The cost of administration low. 5 : Disputes involving coverage. NLRC) INTERPRETATION Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . benefits. 5 : Appeal to CA on law and facts.1 LAW POLICY OBJECTIVE Art. contribution. WORKMEN’S COMPENSATION – EE’S COMPENSATION AND STATE INSURANCE FUND (ECSIF) 26. The worker simply files a claim with the ECC. APPEAL Sec. Decision shall be final 15 days after date of notification. 4Compulsory on all ER’s and their EE’s not over 60 years of age. The payment of benefits is more prompt. (SMC vs. The injured worker does not have to litigate his right to compensation. (Azucena) NATURE OF THE STATE INSURANCE FUND * The law establishes a state insurance fund built by the contribution of ER’s based on the salaries of their EE’s. independent of other tribunals except the SC.LABOR LAW 1(Labor Standards & Termination of Employment ) 152 the Bar who appear as counsel in any case heard by the Commission shall be entitled to attorney’s fees not exceeding 10% of the amount collected. or duly authorized hearing officers and should be decided within the mandatory period of 20 calendar days from submission.9 DISPUTE SETTLEMENT JURISDICTION AND PERIOD OF DISPUTE SETTLEMENT Sec. as part of the natural. : The Commission motu proprio or on motion of any interest party may issue order of execution of decision after same is final and executory. 6Has its own adjudicative machinery with original exclusive jurisdiction on any matter related thereto. in the event of work-connected disability or death. RATIONALE The primary purpose of a workmen’s compensation act is to provide compensation for disability or death resulting from occupational injuries or diseases or accidental injury.

Children – illegitimate subject to restrictions imposed on dependent children c. especially where there is some basis in the facts inferring a work connection to the accident. the ECC should adopt a liberal attitude in favor of the EE in deciding claims for compensability. and not over 21 years of age. IRR’s)  For the injury and the resulting disability or death to be compensable. BUT whether they depend on such contributions as part of their income or means of living. 266 : Any person. 167) * If a soldier is killed by an accidental discharge of his companion’s rifle while an overnight pass to a rebel infested area. employing the services of an EE. Spouse – dependent spouse until remarriage b. (Lazo vs. 5.3 COMPENSABILITY What is an injury? Harmful change in the human organism from any accident arising out of and in the course of the employment. Acknowledged natural child  who is unmarried. provided dependent acknowledged natural children shall be considered as primary beneficiary when there are no other dependent children who are not eligible and qualified for monthly income benefit. Legitimate descendants. Book I. 1. (Hinoguin vs. and not gainfully employed. Parents : of EE wholly dependent upon EE for regular support. b. (Art. (Art. The EE must have been performing his official functions. The death arose out of and in the course of the employment since the soldier was not on vacation leave and he had lawful permission to go to the place and the other soldier was authorized to carry a firearm. Primary a. c. Spouse : Legitimate and living with the EE. Beneficiaries Who are the beneficiaries under the ECSIF? 1. ECC) What are the requisites for an injury to be considered as work-related? The injury must be the result of an employment accident satisfying all of the following grounds: a. is the death of a soldier compensable? Yes.  The test of dependency is not whether the claimants could support life without contributions. Rule III. PROXIMATE CAUSE Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Parents – dependent subject to restrictions imposed on dependent children. 26. (Sec.2 DEFINITIONS ER Art. The EE must have been injured at the place where his work requires him to be.LABOR LAW 1(Labor Standards & Termination of Employment ) 153 As agent charged by the law to implement social justice guaranteed and secured by the Constitution. natural or juridical. 4. Legitimate 2. If the injury is sustained elsewhere. 166)  All questions of relationship and dependency shall be determined as of the time of death. 2. Children – dependent. Secondary a. or over 21 provided he is incapable of self-support due to physical or mental defect which is congenital or acquired during minority. the EE must have been executing an order for the ER. the injury must be the result of accident arising out of and in the course of employment. ECC) 26. Dependent What are the dependents under the ECSIF? 1. b. Legitimated 3.

What is the “going and coming rule”? In the absence of special circumstances. d. answering a call of nature. such incidents of work include: 1. 3. 5. death of an EE while attempting to rescue a co-EE (Azucena) LIVING. but a reasonable margin of time and space necessary to be used in passing to and from the place where the work is to be done. special errand rule.LABOR LAW 1(Labor Standards & Termination of Employment ) 154 The right to compensation extends to disability due to disease supervening upon and proximately and naturally resulting from a compensable injury. LODGING ON PREMISES OF ER. WCC) INCIDENTS OF EMPLOYMENT It is settled that injuries sustained in connection with acts which are reasonably incidental to the employment are deemed arising out of such employment. Where the EE is about to enter or about to leave the premises of his ER by way of the exclusive or customary means of ingress and egress. the premature delivery of her baby. (Iloilo Dock vs. but it is clear that in some cases the rule extends to include adjacent premises used by the EE as a means of ingress and egress with the express or implied consent of the ER. BOARDING. Acts for the personal benefit of the ER i. and upon whether the EE was engaged in the exercise of some functions or duties reasonably necessary or incidental in the performance of the contract of employment. except: a.e. an EE injured while going to or coming from his place of work is excluded from the benefits of workmen’s compensation acts. Acts in emergencies i. or whether he was authorized or required by such contract to be.e. b. Where the EE is proceeding to or from his work on the premises of the ER. Slight deviations from work. What is the INGRESS OR EGRESS/PROXIMITY RULE? Employment includes not only the actual doing of the work. while on his way to or from his place of employment or at his home. condition of classroom floor caused Belarmino to slip and fall and suffer injury as a result. Where the primary injury is shown to have arisen in the course of employment. (Azucena) OUTINGS & PICNICS Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . (Azucena) WHILE TRAVELLING Compensation depends upon whether the injury results from a risk inherent in the nature of the employment. or during his employment with some duty or special errand connected with his employment. Generally. c.e. 4. from curiosity or otherwise. and her death are compensable. (Belarmino vs. employment may be said to begin when the EE reaches the entrance to the ER’s premises where the work is to be done. Where the ER as an incident of the employment provides the means of transportation to and from the place of employment. unless it is the result of an independent intervening cause attributable to claimant’s own negligence or misconduct i. 2. Where the EE is charged. Acts done to further the goodwill of the business. Acts of personal ministration for the comfort and convenience of the EE i. hence all medical consequences flowing from it.e. As a general rule. OR AT WORKING PLACE Compensable if living on the ER’s premises or at the place of work is an express or implied requirement of the contract of hiring and when the injury results from a risk or danger which is reasonably incidental to the employment. 2. ECC) GOING TO OR COMING FROM WORK RULE 1. or reasonably incidental thereto.

the assault is compensable. the claimant must present proof that he contracted them in the course of his employment. (Iloilo Dock vs. ECC) A. Cancer. the claimant has the burden of proving that the nature of the work increased the risk of contracting the disease. (Art.4 COVERAGE AND LIABILITY COMPULSORY COVERAGE Art. This exception covers incidents outside the work place. Incomplete abortion 5. Bangungot 4. GSIS) To establish compensability under the increased risk theory. 168 : All ER’s and their EE’s not over 60 years of age. (Dabatian vs. (Galanida vs.1 Specific Illnesses Give examples of diseases which are not listed as occupational diseases: 1. not necessarily direct causal relation. it is 3. (Menez vs.LABOR LAW 1(Labor Standards & Termination of Employment ) 155 Recreational activities fall under the so-called “Special Engagement Rule” which is one of the exceptions to the “direct premises rule”. Peptic ulcer 2. provided. Define sickness? Any illness a. 26. ASSAULT If there is a causal relation between the assault and the employment. the claimant must show proof of reasonable work-connection. (Narazo vs. ECC) 2. Adenocarcinoma 8. 167) If the illness are not occupational diseases. an EE who is over 60 and paying contribution to qualify for retirement or life insurance benefits shall be subject to compulsory coverage. any illness caused by employment subject to proof that the risk of contracting the same is increased by working conditions. Prolapsed uterus. THEORY OF THE INCREASED RISK If an ailment is not included in the list of occupational diseases as drawn up by the Commission. ECC) A. and picnics when initiated or sanctioned by the employer. or b. intramurals. But in some cases. Rheumatoid Arthritis 7. Schistomiasis 6. OCCUPATION OR COMPENSABLE DISEASE 1. The degree of proof is merely substantial evidence as will support a decision. Accidents befalling EEs on those occasions are compensable. such as field trip. Cirrhosis of the liver 9. What is occupational disease? Disease due wholly to causes and conditions which are normal and constantly present and characteristic of the particular conditions which are normal and constantly present and characteristic of the particular occupation. outings. WCC) SICKNESS DEFINED. Effective date of coverage: Employer – first day of his operation Employee – date of his employment FOREIGN EMPLOYMENT Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . definitely accepted as an occupational disease listed by the Commission. or clear and convincing evidence.

Compulsory coverage of the ER shall take effect on the 1 st day of operation. orders. The government accepts general responsibility for the solvency of the ECSIF. (Art. The disability or death was occasioned by the EE’s intoxication.6 BENEFITS What are the different types of benefits under the ECSIF? 1. and/or prohibition does not in itself constitute notorious negligence. (Art. INTOXICATION OR DRUNKENNESS It has been held that even if it could be shown that a person drank intoxicating liquor it is incumbent upon the person invoking drunkenness as a defense to show that said person was extremely drunk. Notorious negligence. or his notorious negligence. if no intention can be attributed to the injured to end his life. When it occurs during a delirium resulting from compensable disease. 2. c. SELF-INFLICTED INJURIES According to American authorities. When it results from insanity from compensable work injury or disease. (Art. f. injury or death was given to ER. 172) g. (Nitura vs. (Art. Willful intention to injure or kill himself or another. (Art. and that of the EE on the date of employment. 172 : The State Insurance Fund shall be liable for compensation to the EE or his dependents. Any deficiency will be covered by the supplemental appropriations from the National Government. 184) EFFECTS OF NON-REMITTANCE Art. b. 169 : The Commission shall ensure adequate coverage of Filipino EE’s employed abroad. it signifies a deliberate act of the EE to disregard his own personal safety. It must be shown that the intoxication was the proximate cause of death or injury and the burden of proof lies on him who raises drunkenness as a defense. Disobedience to rules. Exclusions Art. 196 : Failure or refusal of the ER to pay or remit the contributions shall not prejudice the right of the EE or dependent to benefits. (NAESS Shipping vs. 201) A. No notice of sickness. willful intention to injure or kill himself or another. Otherwise provided under this Title. 206) h. EE’s intoxication. Thus. suicide is compensable in the following cases: 1. The injury is not work-connected or the sickness is not occupational. except when the disability or death was occasioned by the: a. intoxication which does not incapacitate the EE from following his occupation is not sufficient to defeat the recovery of compensation. ECC) 26. (Nitura vs. (Art. ECC) B. NLRC) C. NOTORIOUS NEGLIGENCE Notorious negligence has been defined as something more than mere or simple negligence or contributory negligence. 183) EE’s do not have any contribution.LABOR LAW 1(Labor Standards & Termination of Employment ) 156 Art. although intoxication may be a contributory cause to his injury. 185) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . or d. What defenses may be interposed by the ECSIF against a claim for compensation made by a covered EE? e. The claim was filed beyond 3 years from time of cause of action. Medical benefits – consisting of medical services and rehabilitation services.5 FUNDING What are the sources of funding of the ECSIF? Contribution (1% of EE’s monthly salary credit) shall be paid in their entirety by the ER and any contract or device for the deductions of any portion thereof from the wages or salaries of the EE’s shall be null and void. 26.

PRESCRIPTIVE PERIODS Art. c. 191).7 DISPUTE SETTLEMENT Art.mo income benefit+10% @dep. or other person pursuing or in-charge of preparation of filing any claim shall demand or charge any fee and any stipulation to the contrary shall be null and void. no contract .00 (Art. EXCLUSIVITY OF BENEFITS Art. such excess shall be delivered to the disabled EE or other persons entitled. except if it is to pay any debt of the EE to the system. several miners were buried alive. The heirs filed an action with the RTC for damages against the company on grounds of breach of contract.LABOR LAW 1(Labor Standards & Termination of Employment ) 2. dependents or anyone otherwise entitled to receive damages on their behalf. Credit (120 days) b.regulation or device whatsoever shall operate to deprive the EE or his dependents of any part of the income benefits and medical or related services granted under this Title. * As a result of a cave-in. garnishment. 174 : When disability or death is caused by circumstances creating a legal liability against a 3rd party. either before or after receipt. Temporary permanent (Art. child not to exceed 5 starting from the youngest All the benefits are tax-exempt. Philex) LIABILITY OF THIRD PARTIES Art. However. 192).e. 180 : Government service insurance system or the social security system shall have original and exclusive jurisdiction to settle any dispute with respect to coverage. 193). 194) > amt = mo income benefit + 10% @ dep.90% ave. Where the system recovers damages in excess. The retention or deduction of any amount from any benefit for the payment of such fee or such services is prohibited. attorney. no claim for compensation is transferable or liable to tax. He cannot however pursue both courses of action simultaneously. Is the motion meritorious? No. 175 : Except as otherwise provided under this Title. collection of contributions and penalties and other related matters. daily sal. The company moved to dismiss the suit on grounds of exclusive liability of the ECSIF. 203 : No agent. 173 : Liability of the ECSIF shall be exclusive and in place of other liabilities of ER to EE. 000. the system shall still pay for the benefits. BENEFIT PROTECTION Art. 198 : As a general rule.000.same as above 157 3. Death and Funeral – minimum death benefit shall be P15. levy or seizure by or under any process whatsoever. the system shall be subrogated to the rights of the disabled EE or dependents in case of death in accordance with the general law. attachment. Temporary total (Art. after deducting the costs of the proceedings and expenses of the system. Partial permanent (Art. payment bars recovery for damages arising from the death of the member. (Floresca vs.00 and funeral benefit shall be P10. The EE or his heirs has the right of selection or choice of action. Art. 26. 201 : 3 years from the time the cause of action accrued. APPEAL Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . entitlement of benefits. The payment of compensation shall not bar the recovery of benefit provided in other laws i. Disability – a. Existing medical services being provided by the ER shall be maintained and continued to be enjoyed by their EE’s. BENEFIT PROTECTION Art.

Child a. (Sec. Financial institutions with original charters. 2. 3. or is over the age of majority but is incapacitated and incapable of self-support due to mental or physical defect. GSIS Act of 1997) BENEFICIARIES Who are the beneficiaries under the GSIS Law? 1. GSIS Act of 1997 : EE shall include : 1. and not over the age of majority. b.4 Effect of Separation of Employment Sec. 2. not gainfully employed. 2. 3. GSIS Act of 1997 : The ER includes : 1. Dependent children. 158 Section 27: GOVERNMENT SERVICE INSURANCE SYSTEM 27. b. Dependent parents. irrespective of the employment status. b. The national government. Illegitimate. Legitimated. Secondary : a. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . agencies or EE Sec. GSIS Act of 1997 : Coverage shall be compulsory for all EE’s receiving compensation who have not reached compulsory retirement age. Spouse – legitimate and dependent for support upon member or pensioner. Legal dependent spouse until remarriage. Sanggunian officials. its political instrumentalities. 2. subdivisions. Barangay officials. Any person receiving compensation while in the service of ER whether by election. Primary : a. branches. 181 : Decisions or orders shall be reviewable by the SC on question of law. 2.LABOR LAW 1(Labor Standards & Termination of Employment ) Art. 3. Parents – legitimate parent dependent upon member for support. 1 REVISED GOVERNMENT SERVICE INSURANCE ACT OF 1997 27. irrespective of the status of appointment. 2. GOCC’s.3 COMPULSORY COVERAGE Sec. 2. Legitimate. GSIS Act of 1997 : A member separated from the service shall continue to be a member and entitled to whatever benefits he has qualified. c. Legitimate descendants subject to restrictions of dependent children. DEPENDENTS Who are considered dependents under the GSIS Law? 1. 4.  who is unmarried. d. Constitutional commissions and the judiciary. acquired prior to age of majority. 27. 3. in event of any contingency compensable under this Act.2 DEFINITIONS ER Sec. or appointment. Legally adopted. 27. 4.

Judiciary – Life insurance only. b. PRESCRIPTIVE PERIOD Sec. (Cana vs. APPEALS Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . or incurred relative to or in connection with his position or work except when monetary liability. GSIS Act of 1997) 27. Government guarantees the fulfillment of the obligations of the GSIS to members. salaries and other pertinent information. 27. c.5 REPORTING REQUIREMENTS 159 Sec. All members a. (Sec. Disability – Provided :  he has paid at least 36 monthly contributions within the 5-year period immediately preceding his disability. positions. GSIS Act of 1997) 2. quasi-judicial agencies or administrative bodies including COA disallowances and all forms of financial obligations of members. (Sec. except for life and retirement benefits shall prescribed within 4 years from date of contingency. 27. Survivorship . and 15 years of service. issued by courts. Retirement – at least 60 years of age. GSIS Act of 1997 : 1. ER and member contributions. GSIS Act of 1997 : All claims. 28. Separation Unemployment. The Board may designate any member of the Board or official of the GSIS who is a lawyer as hearing officer to receive evidence. d. All benefits shall be exempt from attachment. make findings of fact and submit recommendations. and his disability is not compensable under any other law. EE is allowed to continue to work to complete the 15-year service requirement. All benefits paid shall be exempt from taxes. 3. contractual or otherwise. or he has paid a total of at least 180 monthly contributions prior to his disability. 6. GSIS Act of 1997) *** All are tax exempt.  however. is in favor of the GSIS. b. Lifetime insurance. including pecuniary accountability arising from or caused or occasioned by exercise of performance or official functions or duties. corresponding employment status.dependent spouse shall be entitled to survivorship benefits for life or until she remarries. 2. levy or other processes. 39. GSIS Act of 1997 : The ER shall report to the GSIS the names of all EE’s. 30.LABOR LAW 1(Labor Standards & Termination of Employment ) 27. CSC) 2. garnishment. BENEFIT PROTECTION Sec. (Sec.6 FUNDING What are the different sources of funding of the GSIS? 1.8 DISPUTE SETTLEMENT Sec. Dependent children are entitled to benefit while still minors and unmarried. 5. 3. executions. 8.7 BENEFITS What are the benefits provided by the GSIS? 1. GSIS Act of 1997 : Government Service Insurance System shall have original and exclusive jurisdiction to settle any dispute arising under act or any laws administered by the GSIS.

3. and from d) owning or investing in health care facilities. Unmarried and unemployed legitimate. paying for the utilization of health services by covered beneficiaries or b. National Health Insurance Act : All citizens of the Philippines shall be covered. Section 28. The Program shall be limited to: a. This social insurance program shall serve as the means for the healthy to pay for the care of the sick and those who can afford medical care to subsidize those who cannot. in accordance with the policies and specific provisions of this Act. 2. acknowledged children. CA or the SC. legally adopted or stepchildren Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Establish the Philippine Health Insurance Corporation. NATIONAL HEALTH INSURANCE ACT OF 1995 28. Section 3. Section 2. management and disbursement for financing of the availment of a basic minimum package and other supplementary packages of health insurance benefits by a progressively expanding proportion of the population. It shall initially consist of Programs I and II of Medicare and be expanded progressively to constitute one universal health insurance program for the entire population. Who are the legal dependents of a member? a. GSIS Act of 1997 : Appeals of decisions/awards of the Board shall be governed by Rules 43 and 45 of the 1997 Rules of Civil Procedure.3 COVERAGE Section 7. 28. National Health Insurance Act : This Act seeks to : a. legitimated. (b) Universality – The National Health Insurance Program shall give the highest priority to achieving coverage of the entire population with at least at a basic minimum package of health insurance benefits. b. Section 5. c) from employing physicians and other professionals for the purpose of directly rendering care. b. acceptable. hereinafter referred to as the Program to serve as the means to help the people pay for health care services. National Health Insurance Act : The State shall adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods. Create the National Health Insurance Program. and c. provided. Provide all citizens of the Philippines with the mechanism to gain financial access to health services. It shall be prohibited from: a) providing health care directly b) from buying and dispensing drugs and pharmaceuticals. collection. National Health Insurance Act : There is hereby created the National Health Insurance Program which shall provide health insurance coverage and ensure affordable. 31. Legitimate spouse who is not a member.2 PURPOSES/OBJECTIVES 1. that will administer the Program at central and local levels.LABOR LAW 1(Labor Standards & Termination of Employment ) 160 Sec. to purchasing health services in behalf of such beneficiaries. health and other social services available to all the people at affordable cost. available and accessible health care services for all the citizens of the Philippines. illegitimate.1 LAW – NATIONAL HEALTH INSURANCE ACT OF 1995 – RA 7875 28. The Program shall include a sustainable system of the funds constitution. 4. Appeal shall not stay orders unless stayed by orders of the Board. the Program shall not be made compulsory in certain provinces and cites until the Corporation shall be able to ensure the members in such localities shall have reasonable access to adequate and acceptable health care services.

28. 3. diagnostic. 6. 5. 2. Section 41. National Health Insurance Act) 28.e. laboratory and other medical examinations services and personal preventive services. Delay in the processing of claims that extends beyond the period agreed upon. Accruals.5 HEALTH CARE PROVIDERS What are the minimum accreditation requirements of health care providers 1. in accordance with the following procedure : 1. 11. Subsequent appropriations. room and board services of health care professionals. (VANUD) II. (Sec. 3. Members contributions. 4. 4.LABOR LAW 1(Labor Standards & Termination of Employment ) i. Section 40. 6. Drug and alcohol abuse or dependency treatment. 4. National Health Insurance Act) 28. either physical or mental. Non-prescription drugs and devices. National Health Insurance Act : The following acts shall constitute valid grounds for grievance action: 1. Current balance of the Health Insurance Funds of the SSS and the GSIS 3. Give the categories of personal health services to be granted under the NHIP : 1. 2. (Sec. Violation of the rights of patients. Such other health services – that the Corporation shall determine to be appropriate and cost-effective. 4.e. Optometric Services. Home and rehabilitation services. Acceptance of information system requirements and regular transfer of information. National Health Insurance Act : A member. 5. 5. Recognition of the right of patients. A complaint for grievance must be filed with the Office which shall rule on the complaint within 90 calendar days from receipt thereof. 4. c. Acceptance of the payment mechanisms specified in the following section. or a health care provider may file a complaint for grievance based on any of the above grounds. Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . Unjustifiable delay in actions or claims. Outpatient psychotherapy and counseling for mental disorders. 161 below 21 years of age or 2 years old and above but suffering from congenital disability. 3. Give the services that are excluded : 1.4 FUNDING What are the sources of funding of the NHIF? 1. 4. or any disability acquired that renders them totally dependent on member for support. equipment and physical structure in conformity with the standards of the relevant facility. his dependent. Other appropriations earmarked by the national and local governments purposely for the implementation of the Program. Cosmetic surgery. 5. 7. Inpatient hospital care i. Parents who are over 60 years of age whose monthly income is below an amount to be determined by the Corporation. 3. Willful Neglect of duties of program implementers that results in the loss or nonenjoyment of benefits by members or their dependents. Adoption of referral protocols and health resources sharing arrangements. Normal Obstetrical delivery. Donations and grant-in-aid. of Health. 2. 6. 2. as determined by the Dept.6 GRIEVANCE AND APPEAL I. 2. Acceptance of formal program of quality assurance and utilization review. Outpatient care i. Emergency and transfer services. Contributions by LGU’s for indigent members. Any other Act or neglect that tends to undermine or defeat the purposes of this Act. 7. Human resource.

(Sec. labor administration and distribution of shares of stock. 4. 1) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. The State shall provide incentives of voluntary land-sharing. the imposition of fines. (Sec.) 1.LABOR LAW 1(Labor Standards & Termination of Employment ) 162 2. CARL. to own directly or collectively the lands they till or. which will allow the beneficiaries to receive a just share of the fruits of the lands they work. Define agrarian reform. or the imposition of charges on members or their dependents in case of revocation of their entitlement. To this end. Section 29. developmental and equity considerations. (Sec. The Office shall have no jurisdiction over any issue involving the suspension or revocation of accreditation. and subject to the payment of just compensation. Const. shall have determined by law. 3. XIII. Const. the State shall respect the right of small landowners. subject to such priorities and reasonable retention limits as the Congress may prescribe. 3. All other lands owned by the Government devoted to or suitable for agriculture.) * The State shall by law. 21. Lands covered by the CARL. All decisions by the Board as to entitlement of benefits of members or to payments of health care providers shall be considered final and executory. (Sec. taking into account ecological. II. CARL) 2. All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraphs. irrespective of tenurial arrangement. and 4) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon. in the case of other farmworkers. 4. taking into account ecological. Art. undertake an agrarian reform program founded on the right of farmers and regular farmworkers. developmental and equity considerations. RA 6657 Give the provisions of the 1987 Constitution of agrarian reform? * The State shall promote comprehensive rural development and agrarian reform. who are landless. the specific limits of the public domain. to receive a just share of the fruits thereof. CARL) 2) 3) Sigma Rho ( ΣΡ ) reviewers Personal copy of Rene Callanta ‘82 . 4. No reclassification of forest or mineral lands to agriculture lands shall be undertaken after the approval of this Act until Congress. Appeals from Office decisions must be filed with the Board within 30 days from receipt of notice of dismissal or disallowance by the Office. Art. In determining retention limits. the State shall encourage and undertake the just distribution of all agricultural lands. such as production or profit sharing. to include the totality of factors and support services designed to life the economic status of the beneficiaries and all other arrangements alternative to the physical redistribution of lands. Agrarian reform means the redistribution of lands regardless of crops or fruits produced to farmers and regular farmworkers who are landless.