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Part I

Introductory Materials

Section 1. Labor Law in General

1.1 Labor Law Defined [S, R, J]

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

1.2 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.

1.3 History and Origin

1.4 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
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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 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

1.5 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)

Section 2. Labor and the Constitution

2.1 Constitutional Provisions

1. Art. II, Sec. 9, Const. : 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, promote
full employment, a rising standard of living, and an improved
quality of life for all.

2. Art. II, Sec. 10, Const. : The State shall promote social justice
in all phases of national development.
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3. Art. II, Sec. 13, Const. : The State recognized the role of the
youth in nation-building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-being. . .

4. Art. II, Sec. 14, Const. : The State recognizes the role of
women in nation-building, and shall ensure their fundamental
equality before the law of women and men.

5. 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.

6. Art. XIII, Sec. 1, 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.

7. Art. XIII, Sec. 3 (1st par), Const. : The State shall


*afford full protection to labor, local and overseas, organized and
unorganized, and
*promote full employment and equality of employment
opportunities for all . . .

8. Art. XIII, Sec. 4, Const. : The State shall, by law, undertake an


agrarian reform program founded on the right of farmers and
regular farmworkers, who are landless, to win collectively or
collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof . . .

9. Art. XIII, Sec. 11, Const. : The State shall adopt an integrated
and comprehensive approach to health development which shall
endeavor to make essential goods, health and other social
services available to all the people at affordable cost . . .

10. The present Constitution has gone further than the 1973
Constitution in guaranteeing vital social and economic rights to
marginalized groups of society, including labor. 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. NLRC).

2.2 Protection to Labor


1. Art. XIII, Sec. 3, Const. : The State shall afford full protection
to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment
opportunities for all.

It shall guarantee the rights of all workers to 1) self


organization, 2) collective bargaining and negotiations, and 3)
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peaceful and concerted activities including the right to strike in


accordance with law.
They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by
law.
The State shall promote the principle of shared responsibility
between workers and ER’s and the preferential use of voluntary
modes in settling disputes, including conciliation, and shall enforce
mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between worker’s and


ER’s, recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns in
investment, expansion and growth.

1935 Const. : The State shall afford protection to labor, especially


to working women and minors, and shall regulate the relation
between landowner and tenant, and between labor and capital in
industry and in agriculture. The State may provide for compulsory
arbitration.

Three aggregates of power against which the individual


employee needs protection
1. collective labor - Union
2. collective capital - management
3. collective bargaining relationship

* The law, while protecting the rights of laborers, does not authorize
the oppression or destruction of the employer

Laissez Faire
1. Laissez faire or the principle of free enterprise never found full
acceptance in this jurisdiction . . . (ACCFA vs. CUGCO)

2.3 Labor Sector

1. 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.

2.4 Policy Considerations – Social Justice

1. Art. II, Sec. 10, Const. : The State shall promote social justice in
all phases of national development.

2. What does social justice envision? It envisions [E, R, C]


a. equitable diffusion of wealth and political power for the
common good;

b. regulation of the acquisition, ownership, use and


disposition of property and its increments;

c. and creation of economic opportunities based on freedom


of initiative and self-reliance. (Art. XIII, Sec. 1 & 2, Const. ;
Alcantara)
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Definition [H, E, P, A]

1. Social justice is neither communism nor despotism, nor atornism,


nor anarchy, 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. It
means the promotion of the welfare of the people, the adoption
of measures by the government to ensure economic stability of
all the competent elements of society, through the exercise of
powers underlying the existence of all governments on the time-
honored principle of salus populi est suprema lex. (Calalang vs.
Williams)

2. What does social justice guarantee?


Social justice does not champion division of property of economic
status; what it guarantees are equality of opportunity, equality of
political rights, equality before the law, equality between values
given and received, and equitable sharing of the social and
material goods on the basis of efforts exerted in their production.
(Guido vs. RPA)

• “Those who have less in life should have more in


law”
• “Equal pay for equal wok”

Limits of Use

* The policy of social justice is not intended to countenance


wrongdoing simply because it is committed by the underprivileged. At
best it may mitigate the penalty but it certainly will not condone the
offense. 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. (PLDT vs. NLRC)

2.5 Specific Labor Rights

* Art. XIII, Sec. 3, Const. : [In the relation between workers and ER’s
the following rights shall be assured by the State:
a. Rights to self-organization
b. Right to collective bargaining
c. Right to collective negotiations
d. Right to peaceful and concerted Activities including the
right to strike
e. Right to security of Tenure
f. Right to just and humane Conditions of work
g. Right to a living Wage
h. 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.
Protection to Labor

1. The law must protect labor, 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. It is
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safe to presume, therefore, that an EE or laborer who waives in


advance any benefit granted him by law does so, certainly not in
his interest or through generosity but under the forceful
intimidation of urgent need; and hence, he could not have so
acted, freely and voluntarily. (Sanchez vs. Harry Lyons)

2.6 Other Rights

1. Art. II, Sec. 10, Const. : No law impairing the obligation of


contracts shall be passed.

*** Compassionate Justice


- disregarding rigid rules and giving due weight to all the
equities of the case
- years of service without derogatory record taken into
account
- harshness of penalty also taken into account

2. Art. III, Sec. 16, Const. : All persons shall have the right to a
speedy disposition of their cases before all judicial, quasi-judicial
or administrative bodies.
3. Art. III, Sec. 18 (2), Const. : No involuntary servitude in any
form shall exist except as a punishment for a crime whereof the
party shall have been duly convicted.

Labor as Property

* The right of a person to his labor is deemed property within the


meaning of the Constitutional guarantees. That is his means of
livelihood. He cannot be deprived of his labor or work without due
process of law. (Phil. Movieworkers Assn. Vs. Premiere Productions)

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; upon the other hand, 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. Neither of these 2 requirements can be
dispensed with without running afoul of the Constitution. (Century
Textile vs. NLRC)

Liberty of Contract and State Interference

* Legislation appropriate to safeguard to people’s vital interests may


modify or abrogate contracts already in effect. Reservation of essential
attributes of sovereign power is read into contracts as a postulate of
the legal order. 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. (Abella/Had.
Danao vs. NLRC) such was the case when Art. 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. (Id.)
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** Employees have a vested and demandable right over existing


benefits voluntarily granted to them by their employer.

MGT. Rights [C P S T]
1. Right to conduct business
2. Right to prescribe rules
3. Right to select employees
4. Right to transfer and discharge employees

Waiver and Compromise

* Not all waivers and quitclaims are invalid as against public


policy

1. It is only when there is clear proof that the waiver was wangled
an unsuspecting person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the
questionable transaction.
2. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and
the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as a valid and binding
undertaking. (Sicangco vs. NLRC)
3. Should a party fail or refuse to comply with the terms of a valid
compromise or amicable settlement, the other party could either
enforce the compromise by a writ of execution, or regard it as
rescinded and to insist upon his original demand. (Morales vs.
NLRC)
- Voluntary consideration – not unconscionable
- Waiver of future benefits is not valid and binding
- The law does not consider as valid any agreement
a. to receive less compensation on what a worker is
entitled to recover
b. to prevent him from demanding benefits to which
he is entitled

* Instances when quitclaim, waiver or compromise is valid:


1. C, a national promoter salesman, with high educational
attainment, tendered his resignation after a spot audit found out
that he had a tentative shortage of Php49,005.59. It is
unbelievable that C, occupying a responsible position, and with
high education attainment, can be rattled and confused into
signing a resignation letter, on account of a mere spot audit.
(Callanta vs. NLRC)

2. Bank and EE’s association, entered into a CBA providing for the
withdrawal of the pending case of the association against the
bank for non-payment of Php60.00 ECOLA. There is nothing in
the compromise which contravenes the law, morals, good
customs, public order, or public policy. (Monte de Piedad vs. MOLE)

3. During pendency of appeal before the NLRC, workers executed a


voluntary affidavit before the Labor Arbiter declaring intention to
withdraw appeal in lieu of payment of severance pay. The
affidavits executed voluntarily and knowingly in the presence of
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the Labor Arbiter has the effect and authority of res judicata.
(Olaybar vs. NLRC)

4. 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. The consideration for the waiver is
adequate. (PBC vs. Echiveri)

Instances when quitclaim, waiver or compromise invalid:


1. 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. The retirement and quitclaim was made under
threat of dismissal. (Alcantara)

2. 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. The threat was unjust since the
messenger did not commit any unlawful act. There was
intimidation, which vitiated consent. (Guatson Tours vs. NLRC)

3. A quitclaim of future benefits made by an EE at the time of


employment (Alcantara)

4. After the CIR rendered a decision ordering the ER to pay wage


differentials, the EE’s executed a quitclaim waiving their rights
under the decision. The quitclaim contravenes public policy since
after a civil action is filed in court, the cause of action may not
be subject of compromise unless the same is with leave of court.
( Pampanga Sugar Devt. Vs. Sugar Workers Assn.)

5. A quitclaim executed by an OFW repatriated to the Philippines


because of an illness requiring surgical treatment in
consideration of the return travel fund. There was no
consideration since the EE regularly contributed to the fund.
Besides, 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. (Cuales vs. NLRC)

6. ER appealed the decision of the POEA awarding $3,800.00


disability benefits to worker. During pendency of appeal, the
worker executed a quitclaim in exchange for Php18,000.00 since
at the time the worker needed money for medical treatment. The
law does not consider valid any agreement to receive less
compensation than what the workers should receive. It was clear
that the worker was forced to accept the payment out of
necessity.(PISC vs. NLRC)
7. After the finality of judgment awarding them severance pay, the
workers executed a quitclaim before labor arbiter who had no
participation in the case. Such settlements must be approved by
the labor arbiter before whom the case is being heard. (St. Gothard
Pub vs. NLRC)

• Quitclaims are ineffective to bar recovery of the full


measure of the worker’s rights
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• Dire Necessity is not an acceptable ground to annul


releases unless there is showing that
a. workers were forced to execute them
b. the considerations for the quitclaims where unconscionably
low

Management Prerogatives
1. Right to select and discharge employees – with valid cause
2. promulgate reasonable employment rules and regulation
3. designation of work to employees
4. transfer and promote employees
5. control company operations
6. install money-saving devices
7. re-clarify or abolish positions
8. sell or close business

Drug Testing
G. R. : cannot – right to privacy
Exception:
- if job or occupation involve public safety
Ex.ample:
a. bus drivers
b. security guards

Participation in Decision-making Process


Only if it affects his [R, D, W]:
c. rights
d. duties
e. welfare
- not management prerogatives regarding business
operation
- must at least be informed

1. The law explicitly considers it a State Policy “to ensure the


participation of workers in decision and policy-making
processes affecting their rights, duties and welfare. However, a
line must be drawn between management prerogatives
regarding business operations per se and those which affect
the rights of EE’s. in treating the latter, management should
see to it that EE’s are at least properly informed of its decisions
or modes of action. (PAL vs. NLRC) In this respect, 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. (Alcantara)
2. May the ER be compelled to share with its EE’s the prerogative
of formulating a code of discipline? I a code of discipline
unilaterally formulated by the ER enforceable? Yes, 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. A code of discipline unilaterally formulated
and promulgated by the ER would be unenforceable. (Id.)

Section 3. Labor and the Civil Code


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3. 1 Role of Law

1. Art. 1700, NCC : The relation between capital and labor are
merely contractual. They are so impressed with public interest
that labor contracts must yield to common good. Therefore, such
contracts are subject to special laws on labor unions, collective
bargaining, strikes, lockouts, closed shops, wages, working
conditions, hours of labor and similar subjects.

3.2 ER-EE Standard of Conduct

* Art. 1701 : Neither capital nor labor shall act oppressively against
the other, or impair the convenience of the public.

Fair Treatment

* The NCC states that every person must in the exercise of his rights,
and in the performance of his duties, act with justice, give everyone his
due, and observe honesty and good faith. (AHS Phils. vs. NLRC)
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Law Compliance

* 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, it must
be discharged as a duty even against a worker’s will. Thus, it
does not constitute a violation of the right against involuntary
servitude. (Sarmiento vs. Tuico) This is differentiated from the
instance where there is a mere breach of contractual
stipulation. While the EE may be held liable for damages by
virtue of the breach of contract, he may not be compelled to
work against his will because this will be involuntary servitude.
(Alcantara)

EE Obedience and Complaince ER Orders

* It is a recognized principle that company policies and regulations are,


unless shown to be grossly oppressive or contrary to law,
generally binding and valid on the parties and must be
complied with until finally revised or amended unilaterally or
preferable through negotiation or by a competent authority.
(SMC vs. Ubaldo) Deliberate disregard or disobedience of rules,
defiance of management authority by the EE’s cannot be
countenance. Until and unless the rules or orders imposed by
the ER are declared to be illegal or improper by competent
authority, the EE’s ignore or disobey them at their own peril.
(GTE Directories vs. Sanchez)

ER Obligation

* An EE must be treated as a disdained subordinate but with respect


and fairness, if not affection and gratitude due to an equal
partner. (Lagniton vs. NLRC)

Section 4. The Labor Code of the Philippines

4.1 Decree Title * Art. 1 : “Labor Code of the Philippines”

4.2 Effectivity * Art. 2 : 6 months after its promulgation.

4. 3 Applicability

1. Art. 6: All rights and benefits granted under this Code shall,
except as many otherwise be provided, apply alike to all workers,
whether agricultural, or non-agricultural.

2. Art. 276: The terms and conditions of employment of all


government of all government EE’s, including EE’s of GOCC’s
shall be governed by the Civil Service Law.

3. Art. IX-B, Sec. 2(1), Const. :The Civil Service embraces all
branches of Government, including GOCC’s with original
charters.

Test-GOCC
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1. The rule now is that only the GOCC’s with original charters come
under the Civil Service Law. (Cabrera vs. NLRC)

4.4 Implementing Rules


1. Art. 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.

Limitation –Rule Making Power

1. * This power is limited to the promulgation of rules and regulations


to effectuate policies of the Code. Such rules and regulations must
conform to the terms and standard prescribed in the statute. They
cannot supplant its plain and explicit command. (Alcantara)

* A rule or regulation promulgated by an administrative body, such as


the DOLE, to implement a law, in excess of its rule-making authority is
void. (Azucena)

2. Examples of void IRR’s:


* IRR providing the 10-day period specified in Art. 223 refers to
working days as stated in the article.

* An IRR providing that EE’s paid by the month shall be presumed to be


paid for all days in the month, whether worked or not. In effect, will
except EE’s paid by the month from the enjoyment of the holiday pay
benefit. (Insular Bank EE Union vs. Inciong)

* IRR of RA 6715 excluding security guards from those allowed to join


unions. (MERALCO vs. SOLE)

* IRR including commission in the computation of 13th month pay.


Unduly expanded the concept of “basic salary”. (Boie-Takeda vs. De La
Serna)

4.5 Policy Declaration

* Art. 3: The State shall (APERA)

1. Afford protection to labor


2. Promote full employment
3. Ensure equal work opportunities regardless of sex, race or creed
4. Regulate the relations between workers and ER’s.
5. Assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just humane conditions of
work.

4.6 Law Interpretation

1. Art. 4 : 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.
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2. Art. 1702, NCC : In case of doubt, all labor legislation and labor
contracts shall be construed in favor of the safety and decent
living of the laborer.

In Favor Labor-Rationale

* This kind of interpretation gives meaning and substance to the


liberal and compassionate spirit of the law. The policy is to extend
the decree’s applicability to a greater number of EE’s to enable
them to avail of the benefits under the law, in consonance with the
State’s avowed policy to give maximum aid and protection to labor.
(Abella vs. NLRC)

Liberal Construction

* Are the provisions violative of the equal protection clause? No. The
ER and the laborer do not stand on equal footing; to ensure
equality, the latter must, be afforded protection. Insofar as labor
contracts are concerned, the same are usually drafted and prepared
by the ER. All doubts in their provisions should therefore be
resolved against it. (Alcantara)

Doubt

* When these are 2 or more possible explanations regarding an issue


affecting worker’s rights, that which favors the worker must be chosen.
(Clemente vs. 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. (Bonifacio vs. GSIS)

Sweeping Interpretation

* The Supreme Court cannot also adopt a sweeping interpretation of


the law, lest it engages itself in judicial legislation. (Bravo vs. 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. (PAL vs. NLRC)

Equity and Moral Consideration

* Considerations of equity and social justice cannot prevail against the


expressed provisions of labor laws. (Manning vs. NLRC)
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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. It should not be deduced that
the basic policy is to favor labor to prejudice capital. (Azucena)

4.7 Enforcement and Sanctions

1. Art. 217 (a) (2), (3), (4), (6): Jurisdiction of Labor Arbiters and
the Commission
1. The Labor Arbiters shall have exclusive and original jurisdiction,
except as otherwise provided, the following cases involving all
workers: (unfair labor practice)
2. Termination disputes (qualified by Art. 261 which grant voluntary
arbitrators original and exclusive jurisdiction over all unresolved
grievances arising from CBAs and company personnel policies);
3. Cases involving terms and conditions of employment, if
accompanied with a claim for reinstatement (including claims of
OFW’s arising out of an ER-EE relationship, including claims for
actual, moral and exemplary damages, as provided in Sec. 10,
Migrant Workers Act);
4. Claims for actual, moral, exemplary and other damages arising
from the ER-EE relations;
5. 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 Php5,000, regardless of
whether of whether accompanied with a claim for
reinstatement.
6. Disputes arising from Art. 264 including legality of strikes and
lockouts

2. Art. 128 : Visitorial and Enforcement Power of the Secretary of


Labor or his duly authorized representative.

1. Accesss to ER’s records and premises at anytime of the day or


night whenever work is being undertaken therein and copy
thereform;
2. Question any EE; and
3. Investigate any fact, condition or matter which may be necessary
to determine violations of this Code of any labor law, wage order
or rules and regulations issued pursuant thereto.

* In cases where the relationship of 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.
 Writs of execution to the appropriate authority shall be
issued for the enforcement of the said orders, except in
cases:
a. where the ER contests the findings of the labor
employment and enforcement officer; and
b. raises issues supported by documentary profits
which were not considered in the course of
inspection.
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* 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.
 Within 24 hours, a hearing shall be conducted to determine
whether an order for the stoppage of work and 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 EE’s their salaries or wages during
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)

3. Art. 129. Recovery of wages, simple money and other


benefits.
* The Regional Director of the DOLE or any of the duly authorized
hearing officers of the Department is empowered, through summary
proceedings and after due notice, to hear and decide any matter
involving the recovery of wages and other monetary claims and
benefits, 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 P5,000.00
* The complaint shall be resolved within 30 days from the date of the
filing of the same.

4. Art. 288 : Penalties and Jurisdiction -


a. Except, as otherwise provided in the Code, or unless the
acts complained of hinges in a question or interpretation
or implementation of ambiguous provisions of an existing
CBA, any violation of this Code declared to be unlawful or
penal in nature shall be punished with:
 a fine not less than P1,000.00 nor more than P10,000.00.
 or imprisonment of not less than 3 months nor more than 3
years.
 Or both such fine and imprisonment at the discretion of the
court.
In addition to such penalty any alien found guilty shall be
 summarily deported upon completion of service of service.
b. Any criminal offense punished under this Code shall be
under the concurrent jurisdiction of the MTC and the RTC.

5. Art. 289 : The penalty (of the offenses listed in the Labor Code)
shall be imposed upon the guilty officer of officers of a corporation,
16

trust, firm, partnership, association pr entity which committed said


offenses.

6. Art. 290. Prescription of Offensses -


* Offenses penalized under this Code and the IRR’s – 3 years.
* Unfair labor practice – 1 year from accrual of such unfair labor
practice.

7. Art. 291 : Prescription of Money Claims- 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.

8. Art. 292 : Money claims specified in Art. 291shall be filed before


the appropriate entity independently of the criminal action that may be
instituted in the proper courts.
Pending the final determination of the merit of money claims
filed with the appropriate entity, no civil action shall be filed with any
court.
 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.

Section 5. Work Relationship

5. 1 Work Relationship

ER and EE

1. Art. 97 (a) and (b) : “Person” means individual, partnership,


association, corporation, business trust, legal representative, or
any organized group of persons.
(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, subdivisions and
instrumentalities, all GOCC’s and institutions, as well as non-
profit private institutions, or organizations.

2. Art. 167 (f) and (g) : (f) “ER” means any person, natural or
juridical, employing the services of the EE.
(g) “EE” means any person compulsory covered by the
GSIS . . ., including members of the AFP, and any person
employed as casual, emergency, temporary, substitute or
contractual, or any person compulsory covered by the SSS. . .

3. Art. 212 (e) and (f) : “ER” includes any person acting in the
interest of the ER directly or indirectly. The term shall not include
any labor organization or any of its officers except when acting
as an ER.
(f) “EE” includes any person in the employ of an ER. The term
shall not be limited to the EE’s of a particular ER, unless this
Code explicitly states. 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.
17

CLASSIFICATION
1. casual
2. regular
3. emergency
4. temporary
5. substitute
6. contractual

4. Is the purchaser of the assets of an ER corporation considered a


successor ER of the latter’s EE? No. Labor contracts are not
enforceable against a transferee of an enterprise, labor contracts
being in personam, thus binding only between parties.

ER-EE Relationship – Independent Contractor and Labor


Contractor

1. Art. 106 : Contractor or subcontractor –

a. Whenever an ER enters into a contract with another


person for the performance of the former’s work, the EE’s
of the contractor and of the latter’s subcontractor, if any
shall be paid in accordance with the provisions of this
Code.

In the event that the contractor or the subcontractor fails to pay


the wages of his EE in accordance with this Code, the ER shall be
jointly and severally be liable with his contractor or subcontractor to
such EE’s to the extent of the work performed under the contract, in
the same manner and extent that he is liable to EE’s directly employed
by him.
b. There is “labor-only” contracting where:

1. the person supplying in workers to an ER does not have [C,I]


 substantial capital
 [substantial] investment in the form of tools, equipment,
machineries, work premises, among others
2. and the workers recruited and placed by such persons are
performing activities which are directly related to the principal
business of such ER.

In such cases, the person or 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.

2. Sec. 9, Rule VIII, Book III, 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, equipment,
machineries, work premises and other materials; 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.
18

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.

(c) For cases not falling under this Article, 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.

3. Art. 107 : Indirect ER – The provisions of the immediately


preceding Article shall likewise apply in any person, partnership,
association or corporation which, not being an ER, contracts with
an independent contractor for the performance of any work, job
or project.

4. Art. 109 : Every ER or indirect ER shall be held responsible with


his contractor or subcontractor for any violation of the provisions
of this Code. For purposes of determining the extent of their civil
liability under this Chapter, they shall be considered direct ER’s.

5. Sec. 8, Rule VIII, Book III, IRR’s : Job Contracting – There is


job contracting permissible under the Code if the following
conditions are met:
1. The contractor carries on an independent business and
undertakes the contract work [A R M - F]
a. on his own account
b. under his own responsibility
c. according to his own manner and method
d. 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; and
2. The contractor has
a. substantial capital or
b. [substantial] investment in the form of tools, machineries,
work premises, and other materials which are necessary in
the conduct of his business.

*Where the ER-EE relationship has become ascertained, the ER


becomes bound by statutory requirements pertaining, though not
limited, to terms and conditions of employment, labor relations and
post employment. (Phone-Poulenc vs. NLRC) Nonetheless, when a
contractor fails to pay the wages of his EE’s, 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. The law itself, establishes an ER-EE relationship
between the ER and the job contractor’s EE’s for a limited purpose i.e.
in order to ensure that the latter get paid the wages due them. A
similar situation obtains where there is a “labor-only” contracting. This
time, however, for a comprehensive purpose: “ER for purposes of this
Code, to prevent any violation or circumvention of any provision of this
Code.” The law in effect holds both the ER 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. (PBC vs. NLRC)
19

A. DETERMINATION

* In determining whether the relationship is that of ER and EE or one of


independent contractor, each case must be determined on its own
facts and all the features of the relationship must be considered.
(Villaluga vs. 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

B. FACTORS

1. The existence of ER-EE relationship is determined by the


following elements namely:
a. the Selection and engagement of the EE’s
b. the payment of Wages
c. the power of Dismissal; and
d. the power to control the EE’s conduct
(WEDS) although the latter is the most important element. (Rosario
Brothers vs. Ople) No particular form of evidence is required to prove the
existence of an ER-EE relationship. Any competent and relevant
evidence to prove the relationship may be admitted (Opulencia vs. NLRC)

2. Is there an ER-EE relationship?

* Workers under a pakiao agreement arranged by G whom PRC


considered as an independent contractor. ER gives orders to G, on
where to store the copra, when to bring out, how much to load and
where, and what class of copra to handle. The equipment used is
owned by PRC. Yes. PRC has direct control over the handling of the
copra. The control test is satisfactorily met.

* Piece workers subject to specifications. Yes. The fact that the making
of the basket is subject to Dy’s specifications indicates the existence of
control. (Dy Koh Beng vs. ILMU)

* Tailors, pressers, stitchers and similar workers employed by COD on


a piece-work basis. The EE’s are governed by the company’s
regulations i.e. 8-hour workday, recording of attendance etc…
Furthermore, a master cutter distributes job orders equally, supervises
the work and sees to it that they were finished as soon as possible.
Yes. The worker’s conduct in the performance of their work was
controlled by the company (Rosario vs. 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, unloading, pilling or palleting empty bottles
and wooden shells from company trucks and warehouses. Yes. The
evidence firmly establishes the control exercised by the SMC. (BLUM vs.
Zamora)
20

* Shoe shiners who had their own customers but shared proceeds with
company. No. The company does not exercise any degree of control or
supervision over his work. The shoe shiner is a partner in trade. (Besa
vs. Trajano)

* Vendees of cigarettes who are governed by the regulations of the


vendor company i.e. definite sales territory, requirement to submit
daily, weekly and monthly reports, etc. Yes. Vendor company had
control over the vendee. (SSS vs. CA)

*I. S, a prominent social figure, had an agreement with TWS to act as


“branch manager; The agreement provided that she would be entitled
to a part of the commission on sale of tickets; and that she would
share in the expenses of maintaining the office. She was also a
signatory to a lease agreement covering the branch’s premises,
holding herself solidarily liable for the prompt payment of rentals. No.
I. S was not subject to the control by TWS. The services rendered by I.S
must have been done by her pursuant to a contract of agency. (Sevilla
vs. CA)

* A plant manager hired by a marble company which was about to


close in a few month’s time due to business losses. The company had
no control over the former, either as to hours of work or method of
accomplishing the work. The former was entitled to a percentage of
the net profits of the company for that period. No. Manager was
merely a party to a joint venture. (CMC vs. NLRC)

* Fishermen-crew of a trawl fishing vessel subject to control and


supervision of the owner of the vessel i.e. conduct of fishing
operations; time to report to fishing port, etc… Yes. (Ruga vs. NLRC)

* Tailors, seamstresses and other workers of a haberdashery who were


paid on a piece-rate basis. They were directed by the proprietor of the
establishment as specified by the customers. They were required to
finish jobs orders in one day before due date. Yes. They did not
exercise independence in their own methods, but on the contrary were
subject to the control of the establishment from the beginning of their
task to their completion. They also had to rely on the tools and
equipment supplied by the haberdashery. (Makati Haberdashery vs. NLRC)

* The power of control refers merely to the existence of the power and
not the actual exercise thereof.

* Caddles who are not under the control and supervision of the golf
club as to working hours, manner of carrying out their services, etc.
No. The club did not have the measure of control over the incidents of
the caddy’s work and compensation that the ER would possess. (Manila
vs. IAC)

* College teachers. Yes. The Court takes judicial notice that a


university controls the work of the members of its faculty; that it
prescribes the courses or subjects that they teach and the time and
place for teaching. (Feati vs. Bautista)

* Jeepney drivers working under the boundary system. Yes. The driver
does not have any interest in the business because he did not invest
21

anything in the acquisition of jeeps and did not participate in the


management thereof. (Citizen’s League of Free Workers vs. Abbas)

C. 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. Ng). 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. (Ruga vs. 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, and those that control or fix the methodology and bind or
restrict the party hired to the use of such means. The first , which aim
only to promote the result, create no ER-EE relationship unlike the
second, which addresses both the result and the means to achieve it.
(Insular Life vs. NLRC) The control test calls merely for the existence of
the right to control and manner of doing work, not the actual exercise
of the right. (Dy Keh Beng)

D. ECONOMIC TEST

1. The absence of ER-EE relationship may be determined through


economic tests like the inclusion of the EE in the payrolls, having
irregular compensation and having a personal stake in the
business. (Sevilla vs. NLRC)

E. AGREEMENT

* The existence of an ER-EE relationship is a question of law and being


such, it cannot be made the subject of an agreement. (Tabas vs. CMC)

5.2 Independent Contractor and Labor Contractor Only

1. Art. 106 : Contractor or subcontractor


a. Whenever an ER enters into a contract with another person
for the performance of the former’s work, the EE’s of the
contractor and of the latter’s subcontractor, if any shall be
paid in accordance with the provisions of this Code.

In the event that the contractor or the subcontractor fails to pay


the wages of his EE in accordance with this Code, 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, in the
same manner and extent that he is liable to EE’s directly employed by
him.

b. There “labor-only” [considered as agent] contracting


where:
* the person supplying workers to an ER does not have
 substantial capital
 [substantial] investment in the form of tools, equipment,
machineries, work premises, among others
22

With respect to the first requirement, the law does not require both
substantial capital and investment in the form of tools, equipment,
machineries, etc. This is clear from the use of the conjunction “or”.
(Neri vs. NLRC)

2. and the workers recruited and placed by such persons are


performing activities which are directly related to the principal
business of such ER.

With respect to the second requirement, the service provided by


janitors, firemen, mechanics, 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. (Guarin
vs. NLRC)

In such cases, 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.

*** Factors to Determine existence of Independent Contractor


Relationship:
1. whether the contractor is carrying on an independent business;
2. whether the work is part of the ER’s general business;
3. the nature and extent of the work;
4. the skill required;
5. the terms and duration of the relationship;
6. the right to assign the performance of the work to another;
7. the control and supervision of the work and the ER’s powers with
respect to the hiring, firing and payment of salaries;
8. the duty to supply premises, tools and appliances. (Mafinco vs.
Ople)

** Examples of Independent Contractor:

* Commission agent : IPC Company entered into agreement with


registered representatives who worked on a commission basis. While
the agents were subject to a set of rules and regulations governing the
performance bond; the termination for certain causes, however, the
agents were not required to report to work; to devote their time
exclusively for the company; to account for their time nor submit a
record of their activities; and that they were paid on a commission
based on a certain percentage of sales. The fact that for a certain
specified causes (failure to meet annual quota) the relationship may
be terminated does not mean such control exists, for the causes of
termination have no relation to the means and methods of work. (IPC
vs. 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, shall post a bond to protect the manufacturer against losses
shall be responsible for damages caused to third person, shall obtain
the necessary licenses and permits and bear the expenses incurred in
the sale of the soft drinks. (Mafinco vs. NLRC)
23

Another dealership agreement wherein the dealer: handles the


products in accordance with existing laws and regulations; sends his
orders to the factory plant; is supplied by the factory with a delivery
truck and all expenses for repairs are borne by the factory; receives no
commission but given a discount for all sales; is responsible alone for
any violation of the law, sells the product at the price agreed upon
between the parties; and posts a surety bond of not less than
P10,000.00. (La Suerte vs. 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, the guards were not known to
the shipping company for it dealt directly with the agency, and a
payment of a lump sum to the agency who in turn paid the
compensation of the individual watchmen. Under the circumstances,
the guards cannot be considered EE’s of the shipping company. It is
the security agency that recruits, hires and assigns the work of the
watchmen. It is the wages to which the watchman is entitled. The
powers to dismiss lies with the agency. Lastly, since the company has
to deal with the agency, and not with the individual watchmen, on
matters, pertaining to the contracted task, it stands to reason that the
company does not exercise any power or control over the watchmen’s
conduct. (APL vs. 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 net balance of the stevedoring charges will be divided
equally among the parties. The records do not show any participation
on the part of SHIPSIDE with respect to the selection and engagement
of the individual stevedores. 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. While SHIPSIDE occasionally issued instructions to
the stevedores, such instructions, in legal contemplation are mere
requests since the privity of contract lies between the workers and La
Union. (SHIPSIDE vs. 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; he was
required to comply with certain rules and regulations (i.e. use of
authorized receipts, monthly collection quota, cash bond, and
submission of report of all collections at least once a week); and his
services can be terminated in case of failure to satisfy these
regulations. However, the agent was not required to observe office
hours or to report to Singer except for remitting his collections. 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, and
he shouldered his transaction services. (

* Messengerial/Janitorial Services : Janitors were hired by CSI and


assigned to La Union Carbide. They drew their salaries from CSI. CSI
exercised control over them through a SCI EE who gave orders and
instructions. Moreover, CSI had the power to assign its janitors to
24

various clients and pull them out. CSI was a registered service
contractor and did business with a number of known companies in the
country. It maintains its own office and had its own office equipment. It
furnishes its janitors the cleaning equipment. (Rhone-Poulene vs. NLRC)

BCC, capitalized at P1 million fully subscribed and paid for


provided janitorial and other services to various firms. It hired A and B
and assigned them to work for FEBTC. The two reported for work
wearing the prescribed uniform of the BCC; their leave of absences
were filed directly with BCC; and their salaries drawn only from BCC.
FEBTC however issued a job description which detailed the functions of
two. Applying the control test, BCC is the ER of the two. Furthermore, it
had substantial capital. The guidelines in the job description were laid
down merely to ensure the desired result was achieved. It did not,
however, tell how the work should be performed. (Neri vs. NLRC)

* Repair and Maintenance Service : F doing business, was hired


by Shell to conduct a hydro-pressure test. He was paid a lump sum for
the work he and his men accomplished. He utilized his own tools and
equipment. He accepted business from other companies. He was not
controlled by Shell with regard to the manner in which he conducted
the test. (Pilipinas Shell vs. CA)

** Instances of Labor-Only Contracting

* Agency hiring : PBC and CESI entered into an agreement under


which the latter undertook to supply the former with 11 messengers.
The agreement provided that the messengers would remain EE’s of
CESI; PBC remitted to CESI amount equivalent to the wages of the
messengers; CESI in turn paid them and their names are not included
in the PBC’s payroll; the bank, in cases of dismissal would request
CESI, and CESI would in fact withdraw such messenger, and the
messengers performed their functions within the bank’s premises.
CESI cannot be considered a job contractor because its undertaking is
not the performance of a specific job; it merely undertook to provide
the bank with a certain number of persons able to carry out the work
of messengers. (PBC vs. NLRC)

Under the Work Contract between A and a motorshop, A


undertook to supply labor and supervision in the performance of
automotive body painting work. A and his men were paid lump sum,
the company supplied the tools, equipment, machineries and materials
and moreover, the jobs were done in the premises of the motor shop.
Aside from the fact that the company exercised control and direction
over the work done by A and his men, the line of work-automobile
painting – was directly related to, if not an integral part of the regular
business of the motor shop. (Broadway Motors vs. NLRC)

LS provided helpers, janitors, mechanics to NP, a corporation


engaged in garment manufacturing. The agreement between the two
provided that LS shall provide NP with workers, NP shall pay LS a fee
based on rates fixed by the agreement, there is no ER-EE relationship
between the two and LS shall have exclusive direction in the selection,
engagement and discharge of its personnel and the latter shall be
25

within is full control. LS is a “labor-only” contractor since it is merely


an agent to procure workers for the real ER. (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. The security guards filled up Hyatt
employment application forms and submitted the forms to the Security
Department of the hotel. Their wages were paid directly by Hyatt and
their assignments, promotions, supervisions and dismissal were
approved by the Chief Security Officer of Hyatt. (Vallum Security vs. NLRC)

Section 6. Employment Policies, Recruitment and Placement of


Workers, and Agencies

6. 1 Employment Policies

1. Art. 12 : Statement of Objectives – It is the policy of the State:

a. To promote and maintain a state of Full employment through


improved manpower training, allocation and utilization;

b. To protect every citizen desiring to work locally or overseas by


securing for him the best possible terms and conditions of
employment;
c. To facilitate a free choice of Available employment by persons
seeking work in conformity with national interest;

d. To facilitate and regulate the Movement of workers in conformity


with national interest;

e. To regulate the employment of Aliens, including the establishment


of a registration and/or work permit system;

f. To strengthen the network of public employment offices and


rationalize the participation of the private sector in the Recruitment
and placement of workers, locally and overseas, to serve national
development objectives;

g. To issue careful selection of Filipino workers for overseas


employment in order to protect the good name of the Philippines
abroad. (AFP MARC)

6.2 Employment Agencies

Private Sector-Agencies and Entities

A. PARTIES

A.1. Worker

* Art. 13 (a) “Worker” – any member of the labor force, whether


employed or unemployed

A.2 Agency
26

* Art. 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, from the workers or
ER’s or both.

A.3 Entity

* Art. 13 (e) : “Private recruitment entity” – any person or


association engaged in the recruitment and placement of workers,
locally or overseas, without charging, directly or indirectly, any fee
from the workers or the ER’s or both.

B. ALLOWED ENTITIES

B.1 Allowed Private Agencies and Entities

* Art. 16 : Except as provided in Chapter II of this Title, no person or


entity, other than the public employment offices, shall engage in the
recruitment and placement of workers.

Sec. 1, Rule III, Book I, 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. public employment agencies
2. POEA
3. private recruitment entities
4. private employment agencies
5. shipping or manning agents or representatives; and
6. such other persons or entities as may be authorized by the
Secretary.

*Art. 25 : . . . the private employment sector shall participate in the


recruitment and placement of workers, locally and overseas, under
such guidelines, rules and regulations as may be issued by the
Secretary of Labor.

B.2 Prohibited Business Agencies and Entities

1. Art. 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.
a. Direct hiring by members of the diplomatic corps;
b. International organizations and such other ER’s as may be;
c. allowed by the Secretary of Labor is exempted from this provision.

2. Art. 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, whether for profit or
not.

C. GOVERNMENT TECHNIQUES OF REGULATION – PRIVATE


RECRUITMENT AND PLACEMENT BUSINESS

C.1 Licensing, Citizenship, Capitalization, Duration,


Transferability and Fees
27

1. Art. 27 : Citizenship Requirement:


a. Only Filipino citizens or
b. Only corporations, 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,
locally or overseas.

2. Art. 28 : Capitalization – Substantial capitalization as


determined by the Secretary of Labor. (P1 M)

Sec. 1, Rule V, Book I, 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. . .

3. Art. 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; or
* at any place other than that stated in the license of authority
* nor such license or authority be transferred, conveyed or assigned
to any other person or entity.
* Any transfer of business address, appointment or designation of
any agent or representative including the establishment of
additional offices everywhere shall be subject to the prior approval
of the DOLE.

4. Art. 15 (a) 2 : (a) The Bureau of Employment Services shall be


primarily responsible for developing and monitoring a
comprehensive employment program. It shall have the power
and duty:
2) To establish and maintain a registration and/or licensing
system to regulate private sector participation in the recruitment
and placement of workers, locally or overseas, and to secure the
best possible terms and conditions of employment for Filipino
contract workers and compliance therewith under such rules and
regulations as may be issued by the Minister of Labor.

5. 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; while a
“license” is the document issued to a person or entity to
operate a private employment agency. (Art. 13)

6. 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, revoked or suspended for violation of the Labor Code
or its IRR’s.
* non-tranferrable

C.2 Bonds

1. Art. 31 : All applicants for license or authority shall post such


cash and surety bonds as determined by the Secretary of Labor
28

to guarantee compliance with prescribed recruitment


procedures, rules and regulations, and terms and conditions of
employment as appropriate.
2. 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. (Stronghold vs. CA)

C.3 Workers Fees

* Art. 32 : Any person applying with a private fee-charging


employment agency for employment assistance shall not be
charged any fee until
1. he has obtained employment through its efforts; or
2. he has actually commenced employment. Such fee shall be
always covered with the appropriate receipt clearly showing the
amount paid. The Secretary of Labor shall promulgate the
schedule of allowable fees.

C.4 Reports Submission

* Art. 33 : Whenever the public interest requires, the Secretary of


Labor may direct all persons or entities within the coverage of this Title
to submit a report on the status of employment, including job
vacancies, details of job requisitions, separation from job, wages, other
terms and conditions, and other employment data.

Percentage of salary remittance


1. seaman – 80%
2. construction worker – 70%
3. professional workers with free board and lodging – 70%
4. professional without board and lodging – 50%
5. domestic helpers – 50%
6. other workers – 50%

C.5 Prohibited Practices [IF FAITS CHOW]

1. Art. 34 : Prohibited Practices – It shall be unlawful for any


individual, entity license or holder of authority:

1. To charge or accept; directly or indirectly, any amount greater


than that specified in the schedule of allowable fees, or make a
worker pay any amount greater than that actually received by
him as a loan or advance;
2. To furnish or publish any false notice or information or document
in relation to recruitment or employment; [includes the act of
furnishing fake employment documents to a worker. (Azucena)
3. To give any false notice, testimony, information or document or
commit any Act of misrepresentation for the purpose of securing
a license of authority under this Code;
4. 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;
29

5. To influence or attempt to influence any person or entity not to


employ any worker who has not applied for employment through
his agency;
6. 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;
7. To obstruct or attempt to obstruct inspection by the secretary of
Labor or by his duly authorized representatives;
8. To Fail to file reports on the status of employment, placement
vacancies, remittance of foreign exchange earnings, separation
from jobs, departures and such other matters of information as
may be required by the Secretary of Labor;
9. 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. (Vir-Jen vs.
NLRC);
10. 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;
11. 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.

2. A, Filipina, was recruited by a local private employment agency


for a tutoring job abroad. Upon arrival in the place of employment,
she was made to work as a housemaid. What advice will you give
her? I will advice the Filipina to commence a criminal action against
the employment agency for violation of Art. 34 of the Labor Code.
She was recruited under false pretense. (Alcantara)

3. STC, a travel agency, advertised for young women to work as


domestic helpers in Hongkong. Five women who left for Hongkong
were later brought to prostitution houses. Have the officers of STC
committed any unlawful acts? Yes. Violation of Art. 26 and Art. 34
(d) and (f) of the Labor Code. (Alcantara)

C.6 Illegal Recruitment

1. Art. 13 (b) : “Recruitment and Placement” - Act of [CEC-


TUHPI]
a. Canvassing
b. Enlisting
c. Contracting
d. Transporting
e. Utilizing
f. Hiring or
g. Procuring workers and
h. Includes referrals, contracts services, promising or
advertising for employment, locally or abroad, whether for
profit or not.
Provided
That any person or entity which, in any manner, offers or promises for
a fee employment to 2 or more persons shall be deemed engaged in
30

recruitment or placement. [The number of persons dealt with is not, an


essential ingredient of the act of recruitment or placement. 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, the individual or entity dealing with them
shall be deemed to be engaged in the act of recruitment or placement.
(Pp vs. Panis)

** Illegal termination
- full reimbursement fees + 12%
- salaries for unexpired portion or 3 mos. For every year of
unexpired term – whichever is lower

** Liability of private employment agency – employment


contract
- joint and solidary with employer
- all claims and liabilities that may arise in connection with
the implementation of the contracts

2. Any recruitment activities, including the prohibited practices,


enumerated under Art. 34 of this Code, to be undertaken by non-
licensees or non-holders of authority shall be deemed illegal and
punishable under Art. 39 of this Code.

* 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. 39 hereof.
- non-bailable
- 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, enterprise or scheme
defined under the first paragraph hereof.

** Illegal recruitment in large scale – Committed against 3 or more


persons individually or as a group.

[When the Labor Code speaks of illegal recruitment, “committed


against 3 or more persons”, it must be understood as referring to the
number of complainants therein, otherwise, prosecutions for single
crimes of illegal recruitment can be cumulated to make out a case of
large scale illegal recruitment. In other words, a conviction for large-
scale illegal recruitment must be based on a finding in each case if
illegal recruitment of 3 or more persons whether individually or as a
group. (Pp vs. Reyes)

3. Sec. 8, 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, That the court where the criminal action is first filed
shall acquire jurisdiction to the exclusion of other courts.
31

4. The crime of illegal recruitment has 2 elements:


a. That the offender is a non-license or non-holder of
authority to lawfully engage in the recruitment and
placement of workers; and
b. That the offender undertakes any of the recruitment
activities defined under Art. 13 (b) of the Labor Code or
any of the prohibited practices enumerated under Art. 34
of the same Code.

5. G convinced F and S, that they could be employed for France for a


fee. G was also able to persuade A that he could give A a working visa.
Nothing happened to F, S and A. 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, and yet recruit at least 3 persons. (Pp vs. Turda) Furthermore,
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.)

6. NATO, a national union of teachers was able to find jobs abroad for
its member by directly contacting other teachers organizations in
foreign countries, without charging additional fees. Is this legal? No.
Only persons or entities with appropriate license or authority can
engage in recruitment and placement of workers. Contact services are
activities that fall within the scope of recruitment and placement of
workers. (Alcantara)

7. 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. No license or authority is necessary. The company is not
engaged in the business of recruitment and placement of workers, it is
not recruiting workers to be employed by others. It does not represent
a principal. It is recruiting its own workers. (Alcantara)

C.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. (Eastern Assurance vs. Secretary of Labor)

C. 8 Enforcement

1. Art. 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.

Sec. 2, Rule VI, Book I, IRR’s : Pending investigation of the


complaint or report, the Secretary may suspend the license of the
private employment agency concerned. . .

2. Art. 37 : The Secretary or his duly authorized representatives


may, at any time, inspect the premises, books of account and
32

records of any person or entity covered by this Title, require it to


submit records regularly on prescribed forms, and act on
violations of any provisions of any provisions of this Title.

Public Sector Agencies

A. EMPLOYMENT OFFICES AND THE POEA

1. Art. 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.

2. Sec. 3, EO 247 : POEA functions


a. Regulate private sector participation in the recruitment
and overseas placement of workers by setting up a
licensing and registration system;
b. Formulate and implement in coordination with appropriate
entities concerned, a system for promoting and monitoring
the overseas employment of Filipino workers taking into
consideration their welfare and the domestic manpower
requirements;
c. Protect the rights of Filipino workers to fair and equitable
recruitment and employment practices and ensure their
welfare;
d. Exercise original and exclusive jurisdiction to hear and
decide all pre-employment cases which are administrative
in character involving or arising out of violation of
recruitment laws, rules and regulations, or violation of the
conditions for issuance of license or authority to recruit
workers. The POEA has no jurisdiction to hear and decide a
claim for enforcement of a foreign judgment. Such a claim
must be brought before the regular courts. (Pacific Asia vs.
NLRC)

B. Definition of Terms

Sec. 1 (j), (w), (z), (ff), and (qq), Rule II, Book I, Rules and
regulations on Overseas Employment –

1. “Contract Worker” - Any person working or who has worked


overseas under a valid employment contract.

2. “Manning agency” – Any person or entity recruiting seamen


for vessels plying international waters and fore related maritime
activities.

3. “Name Hire” – Worker who is able to secure employment


overseas on his own without the assistance or participation of an
agency.

4. “Overseas employment” – Employment of a worker outside


the Philippines, including employment on hoard vessels plying
international waters covered by a valid employment contract.
33

5. “Placement fee” – Amount charged by a private employment


agency from a worker for its services in securing employment.

6. “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. 3 Sanctions

1. Art. 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,
the POEA, or for violation of the provisions of this, and other
applicable laws . .

2. Art. 39 : Penalties – Violations of any provisions of this Tile or


IRR’s by license or holder of authority :
a. imprisonment of not less than 2 years nor more than 5
years
b. or a fine of not less than P10,000.00 nor more than
P50,000.00
c. or both such imprisonment and fine, at the discretion of
the court.

3. Violation of any of the provisions thereof or its implementing


rules and regulations by a non-license or non-holder of authority
a. imprisonment of not less than 4 years nor more than 8
years
b. or a fine of not less than P20,000.00 nor more than
P100,000.00
c. or both such imprisonment and fine, at the discretion of
the court.

4. If the offender is a corporation, partnership, association or entity,


the penalty shall be imposed upon the officer or officers of the
corporation, partnership, association or entity responsible for
violation; and if such officer is an alien, he shall in addition to the
penalties herein prescribed, be deported without further
proceedings:

* Illegal recruitment:
a. imprisonment of not less than 6 years and 1 day but not
more than 12 years and
b. a fine of not less than P200,000.00 nor more than
P500,000.00.

* Illegal recruitment constituting Economic Sabotage:


c. life imprisonment; and
d. a fine of not less than P500,000.00 nor more than
P1,000,000.00.

* The maximum penalty shall be imposed if:


a . the person illegally recruited is less than 18 years of age;
or
b. committed by a non-license or non-holder of authority.
34

* The Secretary of Labor or his duly authorized representative may


order the closure of illegal recruitment establishments.

5. Art. 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. (Salazar vs. Achacoso)

- money claims arising from ER-EE relationship prescribes in


3 years
- 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,


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. The agency is jointly severally liable with the
principal or foreign-based ER for any of the violations of recruitment
agreement contract of employment. (Ambraque vs. NLRC; Pp vs. Catan)

Section 7. Alien Employment

7. 1 Technique of Regulation-Employment Permit

1. Art. 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 . . .

For an enterprise registered in preferred areas of investments, said


employment permit must be issued upon recommendation of the
government agency charged with the supervision of the registered
enterprise.

Sec. 7, Rule XIV, Book I, IRR’s : The employment permit shall be


valid for a minimum period of 1 year.

2. Art. 41 : Prohibition Against Transfer of Employment – (a) After


the issuance of an employment permit, the alien shall not
transfer to another job or change his ER without prior approval of
the Secretary of Labor.

Art. 288 : Any alien found guilty shall be summarily deported upon
completion of service of sentence.

3. May an ER in the Philippines employ a worker who is not a


Filipino citizen? Yes, except to nationalized activities such as:
a. public utility to develop, exploit and utilize natural
resources – 60% Filipino;
b. Mass media – 100% owned by Filipino citizens
c. Advertising – 70% Filipino owned
d. Retail Business – 100% Filipino owned
35

e. Financing business – 60% Filipino owned

4. Are there exceptions to the prohibition against employment of


aliens in entities engaged in nationalized activities? Yes, when
(a) the Secretary of Justice specifically authorizes the
employment of technical personnel; or (b) where aliens are
elected members of Board of Directors in proportion to their
allowable participation in the capital; or (c) when allowed under
certain special laws. (Alcantara)

Coverage

* A resident alien need not obtain an employment permit in order to be


employed in the Philippines. (Almodiel vs. NLRC)

Employment Permit – Conditions for Grant

1. Art. 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. competent
b. able and
c. willing
at the time of the application to perform the services for which the
alien is desired. [The DOLE is the agency vested with jurisdiction to
determine the question of availability of the local workers. (General
Milling vs. Torres)

2. Sec. 5, Rule XIV, Book I, IRR’s : Requirements for


Employment Permit Applicants – The applicant for an
employment permit shall be accompanied by the following:
a. Curriculum vitae signed by the applicant indicating the
educational background, his work experience and other
data showing that he possesses technical skills in his trade
or profession.

b. Contract of employment between the ER and the principal,


which shall embody the following, among others:
 That the non-resident alien shall comply with all applicable
laws and rules and regulations;
 That the non-resident alien worker and ER shall bind
themselves to train at least 2 Filipino understudies; 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.

Section 8. Development of Human Resources

8.1 Objectives - Definitions

1. Art. 43 : It is the objectives of this [F E D]


a. Title to Develop human resources
b. Establish training institutions, and
c. Formulate such plans and programs as will ensure efficient
allocation, development and utilization of the nation’s
36

manpower and thereby promote employment and


accelerate economic and social growth.

2. What is human resources development? Process by which the


actual and potential labor force is made systematically to acquire
greater knowledge, skills and capabilities for the nation’s
sustained economic and social growth. (Sec. 1, Rule I, Book II,
IRR’s)

3. Define manpower? Is the portion of the population which has


actual or potential capability to contribute to the production of
goods and services. (Sec. 1 (c), Rule I, Book II, IRR’s)

4. Is human resources development intended solely to train


workers? No. Manpower development also means training for
self-employment. This is known as “entrepreneurship” (Art. 44
(b).
5. 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:
a. in school and
b. in the production plant.
In school, training provides the trainee the theoretical foundation,
basic training, develops his skill and proficiency in actual working
conditions as it continues personal discipline and work value. (Sec. 4
(p), RA 7796)

8.2 Program Incentive

* Art. 52 : Deduction from taxable income of ½ of the value of labor


training but not to exceed 10% direct labor wage: Provided, That in the
case of apprenticeship programs, the program is recognized by DOLE.

8.3 Training and Employment of Special Workers – Apprentices,


Learners and Handicapped Workers

Policy Objectives

* What is the policy of the State on apprenticeship?


1. To help meet the demand of the economy for trained manpower;
2. To establish a national apprenticeship program through
participation of ER’s workers, and government and non-
government agencies; and
3. To establish apprenticeship standards for the protection of
apprentices. (Art. 57)

Definition

1. Art. 58 : “Apprenticeship” – Practical training on the job


supplemented by related theoretical instruction.

2. Art. 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.
37

3. Art. 78 : “Handicapped workers” – Those whose earning


capacity is impaired by age or physical or mental deficiency or
injury

Who Can Employ and When

A. APPRENTICES –must be approved by TESDA

1. Art. 60 : Only ER’s in highly technical industries and only in


apprenticeable occupations may employ apprentices.

Sec. 1, Rule IV, Book II, IRR’s : “Highly Technical Industries” –


Trade, business, enterprise, industry or other activity which is
engaged in the application of advanced technology.

Art. 58 : “Apprenticeship Occupation” – Requires more than 3


months of practical training supplemented by related theoretical
instruction.

- 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

2. Art. 70 : Apprenticeship programs shall be primarily voluntary


except:
a. When national security or particular requirements of
economic development so demand, the President may
require compulsory training where the shortage of trained
manpower is deemed critical by the Secretary of Labor.
b. Where services of foreign technicians are utilized by
private companies in apprenticeable trades.

B. LEARNERS
- Learnership programs must be approved by TESDA

* Art. 74 : Learners may be employed when:


1. no experienced worker is available
2. the employment of learners is necessary to prevent curtailment
of employment opportunities
3. and the employment does not create unfair competition in terms
of labor costs or impair or lower working standards.

C. HANDICAPPED WORKERS

* Art. 79 : Handicapped workers may be employed when their


employment
1. is necessary to prevent curtailment of employment
opportunities; and
2. when it not create unfair competition in labor costs or lower
working standards.

Conditions of Employment
- not exceed 8 hours
38

- allowed overtime

* Art. 61 :
1. Period of apprenticeship shall not exceed 6 months.
2. Wages shall not start below 75% of the minimum wage.
3. Apprenticeship program must be duly approved by TESDA or
apprentices becomes regular EE. This must be evidenced by an
apprenticeship agreement. (Nitto Enterprises vs. NLRC)

Ratio of theoretical vs. on the job training > 100: 2000


- may work overtime – duly credited as his training time

* Art. 72 : The Secretary of Labor may authorize the:


1. 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. There is no
ER-EE relationship between students on one hand, and schools,
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. (Sec. 14, Rule X, Book III, IRR’s)

2. 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. The clerk resigned and demanded payment of
unpaid wages. Is the clerk entitled to unpaid wages? Yes. Sec.
14, Rule X, Book III, IRR’s : only applies in instances where the
students are given real opportunity, including such facilities as
may be reasonably necessary to finish their chosen courses
under such arrangement. In this problem, 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. There is therefore an ER-EE
relationship between the clerk and the university. (Alcantara)

3. Qualifications of an Apprentice:
a. At least 15 years of age: provided, those below 18
years of age shall not work in hazardous
occupations;
b. Be physically fit for the occupation.
c. Possess vocational aptitude and capacity.
d. Possess the ability to comprehend, and follow oral
and written instructions. (Sec. 11, Rule VI, Book III,
IRR’s)

4. A 5-star hotel would like to have an apprentice program


dishwashers? No. This is not an apprenticeable program
occupation because proficiency can be attained within a very
short period. Besides, the hotel industry is not highly technical.
(Alcantara)

5. After working for 1 month may an apprentice be dismissed


without cause? No. After the probationary period of 1 month, the
apprenticeship agreement may be terminated only for cause.

6. Causes for termination of apprenticeship agreement by


apprentice:
a. Repeated violation by ER of agreement
39

b. Cruel or inhuman treatment


c. Personal problems which prevents a satisfactory
performance (bad health)
d. Substandard working conditions

EMPLOYER
a. habitual absentism
b. willful disobedience e.g. rules
c. insubordination – lawful order
d. poor physical conditions – apprentice
e. theft or malicious destruction
f. poor efficiency of performance
g. engaging in violence
h. gross misconduct
i. bad health or continuing illness. (Sec. 25, Rule VI, Book II,
IRR’s)

* employer must make a commitment to employ the business

B. LEARNERS
- learnership must be approved by TESDA

1. Art. 75 :
1. Duration of the learnership period shall be 3 months;
2. Wages and salary rates begin at not less than 75% minimum
wage; and
3. A commitment to employ learners if they so desire, as regular
EE’s upon completion of the learnership.
 All learners who have been allowed or suffered work during
the first 2nd 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.

2. Art. 76 : Learners employed in piece or incentive-rate jobs during


training shall be paid in full for the work done.

3. J entered into a learnership agreement with employer A. Before the


end of 2 months, A terminated the agreement. When J requested for a
chance to let him finish the 3 months period. At the end of 3 months, A
refused to hire J. Is the stand of A sustainable? No. A has a
commitment under the learnership agreement to employ J as a regular
worker upon the completion of the learnership.

C. HANDICAPPED WORKERS [A P M I]

1. Art. 80 :
 Rates to be paid to handicapped workers shall not be less
than 75% of the applicable minimum wage.
 Employment agreement must state the duration of the
employment period and the work to be performed.
2. Art. 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.
40

Enforcement

1. Art. 66 : Appeal to the Secretary of Labor - 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. The
decision of the Secretary of Labor shall be final and executory.

2. Art. 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, unless he has exhausted all available administrative
remedies.

Section 9. Conditions of Employment – Hours of Work

9. 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, in cases, where more than an 8-hour operations is
necessary, to utilize different shifts of laborers working only for 8 hours
each. (Manila Terminal vs. CIR)

9.2 Coverage

I. Art. 82 : The provisions of this Title shall apply to EE’s in all


establishments and undertakings whether for profit or not but to
[GMS- FMDP]
1. Government EE’s [whether employed by the National
Government or any of its political subdivisions, including those
employed in GOCC’s with original charters. (Sec. 2, Rule I, Book
III, IRR’s]

2. Managerial EE’s [refer to those who meet all of the following


conditions, namely:
a. Their primary duty consists of the management of the
establishment in which they are employed or of a
department or sub-division thereof;
b. Customarily or regularly direct the work of 2 or more EE’s
c. 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, particular weight. (d.)]

 Mere designation to a position with a high-sounding title,


does not make an EE a managerial EE where the exercise
of the independent judgment is not present. (Sierra vs.
NLRC)

3. Other officers or members of the managerial staff if they perform


the following duties and responsibilities:
a. Primary duty consists of the performance of work directly
related to management policies of the ER;
41

b. Customarily and regularly, exercise discretion and


independent judgment;
c. Regularly directly assist a proprietor or managerial EE or
execute under general supervision work along specialized
or technical lines requiring special training, experience or
knowledge; or execute under general supervision special
assignment and tasks; and
d. 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. (Id.)

4. 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. (Art. 82)

5. Members of the family of the ER who are dependent on him for


support domestic helpers and persons in the personal service of
another. Perform such service:
a. In the ER’s home which are usually necessary or desirable
for the maintenance or enjoyment thereof;
b. Or minister to the personal comfort, convenience or safety
of the ER as well as the members of his ER’s household.
(sec. 2, Rule I, Book III, IRR’s)

 However, house personnel hired by a ranking company


official, but paid for the company itself, to maintain a staff
house provided for the official, are not the latter’s domestic
helpers but regular EE’s of the company. (Cadiz vs. Philippine
Sinter)

 The function of a managerial employee requires the use of


discretion and independent judgment – (nature of his
functions)

6. And workers who are paid by results. [Including those who are
paid on piece-work, “takay”, “pakiao”, or task basis if their
output rates are in accordance with the standards prescribed.]

II. Give the reason for the exceptions?


1. Government EE’s – Terms and conditions of employment are
governed by the Civil Service Law

2. Managerial EE’s – Employed by reason of their special training,


expertise or knowledge and for positions requiring the exercise
of discretion and independent judgment. Value of work cannot be
measured in terms of hours.

3. Non-agricultural field personnel – These regularly perform their


duties away from the principal or branch office or place of
business of the ER; they are on their own in the field and the
number of hours of actual work they render cannot be
reasonably ascertained.
42

4. 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.

5. 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.

6. Workers paid by results – Compensation computed on the basis


of work accomplished and not on time spent in accomplishing
the work. (Alcantara)

III. Determine whether exempted EE or not?


1. Foremen, 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. Where such
recommendatory powers are subject to evaluation and review,
the same are not effective and not an exercise of independent
judgment as required by law. ( Franklin Baker Company vs. Trajano)

2. 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,
recommends disciplinary action against erring subordinates or
promotion of deserving personnel, train and guide subordinates;
communicate and coordinate with other supervisors; recommend
measures to improve work method; and other related tasks as
may be assigned by his immediate superior. Yes. They discharge
duties and responsibilities which qualify them as members of the
managerial staff. (Alcantara)

3. Cutter in tailoring shop was assigned chore of distributing work


to shop’s tailors when the shop’s manager were absent. He saw
to it that work conformed with pattern he had prepared and if
not, had them redone, repaired or sewn. No. He did not
participate in policy-making. It is true that in the absence of the
manager and assistant manager, he distributes and assigns work
to EE’s but such duty though involving discretion is occasional
and not regular and customary. (Villuga vs. NLRC)

9.3 Normal Hours

* Art. 83 : The normal of hours of work of any EE shall not exceed 8


hours a day.

** Health personnel in cities and municipalities with a population of at


least 1,000,000 or in hospitals and clinics with a bed capacity of at
least 100 shall hold regular office hours for 8 hours a day, for 5 days a
week, exclusive of time of meals, 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. [“Health
personnel” – Includes resident physicians, nurses, nutritionists,
dieticians, pharmacists, social workers, laboratory technicians,
43

paramedical technicians, psychologists, midwives, attendants and all


other hospital or clinic personnel…]

* 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. (Azucena)

9.4 Hours Worked

1. Art. 84 : Hours worked shall include:


A. all time during which an EE is required
 to be on duty
 to be at a prescribed workplace and

B. all time during which an EE is suffered or permitted to


work.
Rest periods of short duration during working hours shall be counted as
hours worked.

2. Sec. 4, Rule III, Book III, IRR’s :


Principles in Determining Hours Worked
1. 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;

2. An EE need not leave the premises of the workplace in order that


his rest period shall not be counted, it being enough that
a. he stops working,
b. may rest completely and
c. may leave his workplace, to go elsewhere, whether within
or outside the premises of the workplace;

3. 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, all the time spent for
such work shall be considered as hours worked, if the work was
with the knowledge of his ER or immediate supervisor;

4. 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.

3. Jose works as a janitor. He continues sweeping the floors after 5:00


p.m… The manager is aware of this, but he does not stop Jose from
doing work after 5:00 p.m. Is this hours of work? Yes. Although Jose
was not instructed expressly to render work, he was impliedly allowed
to do so by failure of the ER to warn him against rendering such work.
Besides the work rendered by Jose benefited the ER.

Waiting Time
44

1. Sec. 5, Rule I, Book III, IRR’s : Waiting time spent by an EE


shall be considered as working time if waiting is an
a. integral part of his work, or
b. 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.
(Azucena)

2. S, a company driver has the following work schedule: 8:30 a.m. -


fetches G.M.; 9:00 a.m. – 12:00 noon – does nothing on call for
G.M. at the company premises ; 12 noon – 1:00 p.m. – lunch;
1:00 p.m. – 5:00 p.m. drives the G.M. to conferences; 5:00 p.m.
goes home. The company refuses to pay him for the 9:00 a.m. to
12:00 noon period. Is this valid? No. S is not free to make use of
the period effectively and gainfully for his own purposes. He
must remain in the premises as at any time he may be called to
drive for the G.M. (Alcantara)

3. 30 minutes prior to the start of the scheduled working hours, the


workers of an enterprise assembled at a designated area to
answer roll call. As their houses are situated right where the
farms are located, the workers can go back in their houses after
roll call to do some chores. Is the assembly time working time?
No. The works are not subject to the absolute control of the
company during the period. The workers were not deprived of
the time to attend to other personal pursuits. (Aria vs. NLRC)

Idle Time
1. A laborer need not leave the premises of the factory, shop or
boat in order that his period of rest shall not be counted, it being
enough that he “cease to work”, may rest completely and leave
or may leave at his will the spot where he actually stays while
working, or go somewhere else, whether within or without the
factory, shop or boat. (Luzon Stevedoring vs. Luzon Marine Dept. Union)

2. A, an accountant in the manufacturing firm, has idle time in her


work schedule, “waiting for company papers to work on. She
dovotes this time working on papers of other firms for which she
receives remuneration. Is the firm obligated to pay her for this
time? Yes. Although she is working on the papers of other
companies, she has no absolute control over her time. Her ER
may at any time require her to do some work. She cannot
furthermore leave the place of work during her work schedule.
(Alcantara)

3. T, a machine operator was forced to stop operating his machine


for 1 hour during a brownout. Is this working time? Yes. The
interruption was not due to the fault of T. Besides 1 hour is too
brief to be utilized effectively and gainfully for his own interest.

Meal Time

1. Sec. 7, Rule I, Book III, IRR’s : Every ER shall give his EE’s not
less than 1 hour time-off for regular meals, except in the
following cases where a meal period of not less than 20 minutes
may be given by the ER provided
45

*(That such shorter meal period is credited as compensable hours


worked hours worked of the EE But if it is the EE who requested for the
shorter meal time, then such shortened meal period is not
compensable. (Azucena):
[N O P E]
 Where work is Non-manual in nature or does not involve
strenuous physical exertion;

 Where the establishment regularly Operates less than 16


hours a day;

 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; and

 Where the work is necessary to Prevent serious loss of


perishable goods.

* Rest periods or coffee breaks running from 5 to 20 minutes shall be


considered as compensable working time.

2. Where during the so-called meal period, the laborers are


required to stand by for emergency work, or where said meal
hour is not one of complete rest, such period is considered
overtime. (Pan Am vs. Pan Am EE’s Association)

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.e. firemen
permitted to sleep a portion of the time they are so on duty at the fire
station. (Azucena)

On Call

1. Sec. 5, Rule I, Book III, 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. 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.

2. If an EE is kept within reach through a cellular phone. Is it on


call? No. (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.
46

 Travel that is all in the day’s work – Time spent by an


EE in traveling from one job site to another, during the
workday, must be counted as hours worked.

 Travel away from home – Travel away from home is


clearly worktime when it cuts across the EE’s workday,
except during meal period or when EE is permitted to sleep
in adequate facilities furnished by the ER. The time is not
only hours worked on regular workdays but also during
corresponding working hours on non-working days. Outside
of these regular working hours, travel away from home is
not considered working time. (Azucena)

Lectures, Meetings, Training Programs

* Sec. 6, Rule I, Book III, IRR’s : Attendance at lectures, meetings,


training programs and other similar activities shall not be counted as
working time if all of the following conditions are met:
1. Attendance is outside of the ER’s regular working hours;
2. Attendance is in fact voluntary; and
3. The EE does not perform any productive work during such
attendance.

Semestral Break

* Regular full-time teachers are entitled to salary and COLA during


semestral break. (U.Pang. Faculty Union vs. U. Pang.)

9.5 Overtime Work and Offsetting Prohibition

1. Art. 87 : Overtime Work –


 regular work day – plus 25% basic hourly rate
 Special days, holiday or rest day – plus 30% of the regular
hourly rate on said days.

2. Art. 89 : Emergency Overtime Work - Any EE may be required


by the ER to perform overtime work in any of the following cases:
[WED-UPS]
a. When the country is at war
b. When any other national or local emergency has been
declared
c. 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, fire, flood, typhoon, earthquake,
epidemic or other Disaster or calamity.
d. 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.
e. When the work is necessary to prevent loss or damage to
Perishable goods.
f. Where the completion or continuation of the work started
before the 8th hour is necessary to prevent Serious
obstruction or prejudice to the business operations of the
ER.
47

The EE’s refusal to obey the order of the EE constitutes


insubordination for which he may be subjected to disciplinary
action. (Alcantara)

3. Art. 88 : Undertime work in any particular day shall not be offset


by overtime work on another day BUT not on someday.
 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.

4. Art. 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, without
deduction on account of facilities provided by the ER.

5. Y, corporation, as a company policy, required its EE’s to render


only 6 hours of work daily but pays them the minimum wage
corresponding to 8 hours work. Later, the full 8-hours was
required without any increase in wages. Are the EE’s entitled to
overtime pay? Yes. Though voluntary practice or policy, the
company has fixed the normal workday at 6 hours. It now
constitute part of the terms and conditions of employment and
cannot be unilaterally withdrawn by the ER. (Alcantara)

6. Distinguish overtime pay from premium pay : Overtime pay is


additional compensation for work done beyond the normal work
hours on ordinary working days. Premium pay is additional
compensation for work rendered by the EE on days normally he
should not be working. But additional compensation for work
rendered in excess of 8 hours during these days is also
considered overtime pay.

7. A was late for work on a particular day. To offset for the time he
was late, A worked on additional period equivalent to the period
he was late for work. The period was offset against A’ undertime.
Is this valid? Yes. The prohibition to offset overtime against
undertime applies to undertime incurred and overtime rendered
on different days.
 Provisions for overtime covers both profit and non-profit
establishment or undertaking
 For purposes of computing overtime
 REGULAR WAGE – includes the cash wage only; without
deduction of facilities provided.

8. May the right to overtime pay be waived? As a general rule, the


right cannot be waived. (Cruz vs. Yes Sing) However, when the
waiver is exchange for certain benefits and privileges, which may
be more than what will accrue to them in overtime pay, the
waiver may be permitted. (MERALCO Workers Union vs. 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 of labor he is supposed
48

to do. When he thus spends additional time to his work, the effect
upon him is multi-faceted; he puts in more effort, physical or mental;
he is delayed in going home to his family to enjoy the comforts thereof;
he might have no time for relaxation, amusement or sports; he might
miss important pre-arranged arrangements. (PNB vs. PEMA)

Compressed Week – voluntary basis

* While as a general rule, the right to overtime pay cannot be waived


under existing laws, 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.e. if the original
workweek is reduced from Monday – Saturday to Monday – Friday.
(Azuzena) However, Alcantara answered in a 1984 problem differently
when he answered that overtime pay should be paid. In that problem,
the workers were required to render 9.5 hours of work for 5 days.
(What is the answer, I really do not know, ask the reviewer)

Conditions for “Compressed Work Week”


1. voluntary – agreed upon
2. not to exceed 48 hours/ week
3. no diminution on take home pay or fringe benefits
4. waivers must be made
5. all hours exceeding 48 hours/week – considered overtime
6. must submit report to DOLE

Retail Establishment
- sale of goods for personal or household use
ex. grocery

Service Establishment
- sale of services to individuals for their own or household
use
ex. T.V. repair shop

No Formula Basic Contract

* When the contract of employment requires work for more than 8


hours at specific wages per day, without providing for a fixed hourly
rate or that the daily wages include overtime pay, said wages cannot
be considered as including overtime compensation. (Manila Terminal vs.
CIR)

Built-In Compensation

* The employment contract may provide for a “built-in” overtime pay.


Because of this, non-payment of overtime pay by the ER is valid.
(Engineering equipment vs. Minister of Labor)

9.6 Night Work

1. Art. 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.m. and 6:00 a.m.
49

2. Sec. 1, Rule II, Book III, IRR’s : This rule shall apply to all EE’s
except:
[G R S D M F]
a. Those of the government and any of its political
subdivisions, including GOCC’s.
b. Retail and service establishments regularly employing not
more than 5 workers.
c. Domestic helpers and persons in the personal service of
another.
d. Managerial EE’s.
e. Field personnel and other EE’s whose time and
performance is unsupervised by the ER.
f. Includes task and contract basis

3. X works at a gasoline station which has only 5 EE’s. Is he entitled


to night shift differential? No. He works in a retail establishment
employing not more than 5 workers. (Alcantara)

4. What if X works at King’s Minimarts, a retail store chain with 10


outlets of 2 EE’s each outlet. Is he entitled to night shift
differential? Yes. The total number of EE’s of the ER exceeds 5. It
is at least 20. (Id)

Rationale – Prohibition

* First, there are remotely injurious effects of permanent nightwork


manifested in the later years of worker’s life. Of the more immediate
importance is the disarrangement of his social life, including the
recreational activities of his leisure hours and the ordinary associations
of normal family relations. From an economic point of view, it is to be
discouraged because of its adverse effect upon efficiency and output.
A moral argument in the case of workers is that they go to and from
the factory in the darkness. (Shell vs. NLU)

 Exercise of a profession is neither a retail nor service

Section 10 : Weekly Rest Periods

* Art. 82 : The provisions of this Title shall apply to EE’s in all


establishments and undertakings whether for profit or not, but not to
[G M S F I – F D R]

1. Government EE’s [whether employed by the National


Government or any of its political subdivisions, including those
employed in GOCC’s with original charters. (Sec. 2, Rule I, Book
III, IRR’s]

2. Managerial EE’s [refer to those who meet all of the following


conditions, namely:
a. Their primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof;
b. Customarily and regularly direct the work of 2 or more
EE’s;
c. Has the authority to hire or fire other EE’s of lower rank; or
their suggestions and recommendations as to the
50

promotion or any other change of status of other EE’s are


given particular weight. (Id)
> Mere designation to a position with a high-sounding title, does not
make an EE where the exercise of independent judgment is not
present. (Sierra vs. NLRC)

3. Other officers or members of the managerial staff [if they


perform the following duties and responsibilities:
a. Primary duty consists of the performance of work directly
related to management policies of the ER;
b. Customarily and regularly exercise discretion and
independent judgment;
c. Regularly directly assist a proprietor or managerial EE or
execute under general supervision work along specialized
or technical lines requiring special training, experience or
knowledge, or execute under general supervision special
assignment and tasks; and
d. 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. (Id)

4. 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. 82)]

5. Members of the family of the ER who are dependent on


him for support

6. Domestic helpers and persons in the personal service of


another. [Perform such services:
a. In the ER’s home which are usually necessary or desirable
for the maintenance or enjoyment thereof;
b. Or minister to the personal comfort, convenience, or safety
of the ER as well as the members of his ER’s household
(Sec. 2, Rule I, Book III, IRR’s)
 However, house personnel hired by a ranking company
official, but paid for by the company itself, to maintain a
staff house provided for the official, are not the latter’s
domestic helpers but regular EE’s of the company. (Cadiz vs.
Philippine Sinter)

7. And workers who are paid by results. [Including those who


are paid on piece-work, “takay”, “pakiao”, or task basis if their
output rates are in accordance with the standards prescribed.]

Sec. 1, Rule III, Book III, IRR’s : This rule shall apply to all ER’s
whether operating for profit pr not, including public utilities
operated by private persons.

10.2 Scheduling of Rest Day; When Compulsory Work Allowed;


and Compensation
1. Art. 91 : It shall be for the duty of every ER, whether operating
for profit or not, to provide EE a rest period of not less than 24
51

consecutive hours after every 6 consecutive normal working


days.

* The ER shall determine and schedule the weekly rest day of his
EE’s
 However, the ER shall respect the preference of EE’s as to
their weekly rest day when such preference is based on
religion grounds.

Sec. 4, Rule III, Book III, 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, the ER may so schedule the weekday rest day of their
choice at least 2 days in a month.

2. Art. 92 : “When ER may require Work on rest day” – [D U


A - P N A]
a. In case of actual or impending emergency caused by
serious accident, fire, flood, typhoon, earthquake,
epidemic, or other Disaster or calamity to prevent loss of
life, or imminent danger to public safety.
b. In case of Urgent work, to avoid serious loss which the ER
would otherwise suffer;
c. In the event of Abnormal pressure of work due to special
circumstances, where the ER cannot ordinarily be expected
to resort to other measures;
d. To prevent or damage to Perishable goods;
e. Where the Nature of work requires continuous operations
and stoppage of the work may result in irreparable injury
or loss to the ER; and
f. Analogous (avail of favorable weather) or similar
circumstances [PANADU]

3. How much is a worker entitled if he works on a rest day?

 Scheduled rest day – additional compensation of at least


30% of his regular wage.

 Scheduled rest day which is a non-working holiday –


entitled to additional compensation of at least 50% of his
regular wage.

 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. (Sec. 4, Rule III, Book I, IRR’s)

4. V works on board the M/V Starfish. Sometimes, the boat remains


at sea for 2 weeks, while at other times, especially during bad
weather, the vessel returns to port only after a few days. While
the vessel is in port, V stays home with his family. 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. In such cases, the law provides that if he performs
work on Sundays and holidays, he shall be paid an additional
compensation of at least 30 % of his regular wage. [Art. 39 (b)]
52

Rationale – Rest day

* Ordinarily, Sundays and legal holidays are dedicated to reading and


instruction so as to fill the mind with culture or some sort of
advancement. On these days, the laborer spends longer hours in the
company of his family. The deprivation of that opportunity to satisfy
mental, moral and spiritual needs should not be ignored, and should be
properly compensated. (MERALCO vs. Public Utilities EE’s Association)

Section 11 : Conditions of Employment Holidays

11.1 Coverage

1. * Art. 94 : Every worker shall be paid his regular daily wage during
holidays, except: [RSIO, G, DH, M, FP]
a. in retail and service establishments regularly employing less than 10
workers;

Sec. 1, Rule IV, Book III, IRR’s :


b. Those of the government and any of its political subdivisions,
including GOCC’s.
c. Domestic helpers and persons in the personal service of another.
d. Managerial EE’s.
e. Field personnel and other EE’s whose time and performance is
supervised by the ER.

* If required to work on regular holidays,


 regular rate x 2

Regular Holidays
1. New Years day
2. Maundy Thursday
3. Good Friday
4. Bataan Day
5. Labor day
6. Independence day
7. National heroes day
8. Bonifacio day
9. X-mas day
10. Rizal day

Nationwide Special Holidays


1. Nov. 1
2. Dec. 31

2. Monthly paid EE’s are not excluded from the benefits of holiday pay.
(Mantrade vs. Bacungan)

3. X is a manicurist in the D’Style Barbershop which has 20 barbers


and manicurists. Is she entitled to holiday pay? Yes. X is an EE who is
paid by results ad she works in a service establishment employing
more than 10 persons. (Sec. 8, Rule IV, Book III, IRR’s)

12.2 Holiday Pay


53

1. Art. 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.

2. To receive holiday pay, the EE should not have been absent


without pay on the working day preceding the regular holiday.
(Azucena)

3. 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,
aside from the usual holiday pay, to its monthly-paid EE’s.
(Wellington vs. Trajano)

4. X was told by ER to work during a legal holiday which fell on a


Sunday. 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%.

5. If X works overtime during that day, how much will he earn?


Holiday pay rate/8 plus overtime pay of 30% of the holiday
hourly rate = holiday pay rate/8 * 130%.

6. R was absent without pay on December 24. Is he entitled to


holiday pay for Christmas day? No. An EE may not be paid on
holiday pay if he was absent on the day preceding holiday, or in
the case of Maundy Thursday and Good Friday, if he was absent
on the day preceding the first holiday. It would be different if the
day preceding the legal holiday was the EE’s rest day. Then he is
entitled to holiday pay. (Alcantara)
 On leave with pay

7. Can monthly pay under employment contract already include


pay for any unworked regular holiday within the month? Yes. This
is management prerogative provided that the monthly pay
comply with the least minimum rates prescribed under minimum
wage laws.

 What an employer has voluntarily given cannot be


unilaterally withdrawn

 If the employees are already paid for all non-working days,


the divisor should be 365 and not 251

Vacation and sick leave – must be claimed otherwise waived


- 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”. Thus, hourly paid faculty
members are not entitled to their pay for unworked regular holidays.
On the other hand, 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,
although forced to take a rest, does not earn what he should earn on
that day. (JRC vs. NLRC)
54

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, and this should also be the same basis for
computing unpaid holidays. (Union of Filipro vs. Vivar)

Section 12. Conditions of Employment – Service Incentive


Leave

Vacation and Sick leave


- employer must still bind himself in CBA or grant it
unilaterally
- not granted by law

12.1 Coverage

Coverage

* Art. 95 : The provision on service incentive leave shall not


apply to:
[E,S, IO, E, G, D, M, F]
1. Those who are already enjoying the benefit.
2. Those enjoying vacation leave with pay of at least 5 days.
3. Those employed in establishments regularly employing less than
10 workers
4. Exempt establishments.
Sec. 1, Rule V, Book III, IRR’s :
5. Those of the government and any of its political subdivisions
including GOCC’s.
6. Domestic helpers and persons in the personal services of
another.
7. Managerial EE’s.
8. Field personnel and other EE’s whose performance is
unsupervised by the ER including those who are engaged on task
or contract basis, purely commission basis, or those who are paid
in a fixed amount of performing work irrespective of the time
consumed in the performance thereof.

* Teachers of private schools on contract basis are entitled to service


incentive leave. (Cebu Institute of Technology vs. Ople)

12.2 Entitlement
- can be converted to cash

* Art. 95 : 5 days incentive leave with pay for at least 1 year of


service.

[The term ‘at least 1 year of service’ shall mean service within 12
months, whether continuous or broken, reckoned from the date the EE
started working, including authorized absences and paid regular
holidays unless the working days in the establishment as a matter of
practice or policy, or that provided in the employment contract are less
than 12 months, in which case said period shall be considered as 1
year. (Sec. 3, Rule V, Book III, IRR’s)
55

VACATION AND SICK LEAVE


 employer must still bind himself in CBA or grant it unilaterally
 not granted by law

Section 13. Minimum Wages and Wage Fixing Machinery

13.1 Minimum Wages

1. Art. 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.

2. Explain the rule “a fair day’s wage for a fair day’s labor”?
Unless specifically required by law, contract or established
policy, the ER is not bound to pay wages to a worker who has not
actually rendered any service.

3. Give 2 aspects of “agriculture” ? The primary aspect covers


cultivation and tillage of the soil, growing and harvesting of any
agricultural and horticultural commodities and raising of
livestock and poultry. The secondary aspect covers any practices
performed by a farmer on a farm as an incident to or in
conjunction with the farming operations.

4. 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. They claim for
minimum wages for non-agricultural workers. Is the claim valid?

No. They are still agricultural workers. 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.

Coverage

* Art. 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.

Section 3, Rule VII, Book III, IRR’s :


* Workers in duly registered cooperatives when so recommended by
the bureau of Cooperative Development and upon approval of the
Secretary of Labor . . .

Minimum Wage

1. Art. 97 (1) : “Wage” paid to


* The remuneration or earnings, however designated, (LEGAL TENDER)
56

 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 ER to an EE 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 ER to EE. [“Fair and reasonable value” shall not
include any profit to the ER or to any person affiliated with the ER.

2. Art. 61 : Apprentices : Wage rates shall in no case fall below


75 % of the applicable minimum wage.

3. Art. 75 : Learners : Wage rates shall begin at not less than 75%
of the applicable minimum wage.

4. Art. 80 : Handicapped Workers : Wage rates shall not be less


than 75% of the applicable minimum wage.

5. Art. 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].

A. FACILITIES AND SUPPLEMENTS

* 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)

B. SUPPLEMENTAL FACILITY

1. 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

2. 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)
57

3. 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.

4. 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.

C. CASH WAGE – legal tender

1. 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.
(Boic-Takeda vs. Dela Serna)

2. 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)

D. EFFECT - INABILITY TO PAY

* If a company cannot pay a living wage, it has no business operating


at the expense of the lives of the workers. (Phil. Apparel vs. NLRC)

E. GRATUITY and WAGES


58

* Gratuity – That paid to the beneficiary for past services rendered


purely out of the generosity of the giver or grantor. While it may be
enforced once it forms part of a contractual undertaking, the grant of
such benefit is not mandatory so as to be considered a part of labor
standard law. (Plastic Town vs. NLRC)

F. 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. It benefits all wage earners indirectly by setting a floor below
which their remuneration cannot fall. 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. (Pp vs. Gatchalian)

G. BENEFITS

1. Art. 100 : Nothing in this Book shall be construed to eliminate


or in any way diminish supplements, or other EE benefits being
enjoyed at the time of promulgation of this Code.

2. Unless agreed otherwise, statutory benefits are apart from


contractual benefits. (Meycauayan College vs. Drilon) Thus, 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, for want
of an agreement between the parties to treat the increase in
living allowances as applicable to the wage increases. (Filipinas
Golf vs. NLRC)

3. The work of batillos, cargadores of fish catch, were limited to


days of arrival of fishing vessels. From 1976 to 1980, operators
paid them a fixed monthly emergency allowance which included
non-working days. Can the operators now discontinue the
practice and pay the batillos only for actual days worked,
following the principle of “no work, no pay” ?

No. Benefits voluntarily given cannot be unilaterally withdrawn by


the ER. Art. 100 prohibits the elimination or diminution of existing
benefits.

4. Workers in a plastic manufacturing company are able to clean


and inspect only 250 containers of 8 hours despite repeated
appeals from management. They were paid a daily rate of
P150.00. Through time and motion studies set by the DOLE, the
ER was able to ascertain that an ordinary worker can clean and
inspect 450 containers for 8 hours. The company then changed
its mode of payment from time basis to piecework at P0.40 per
container. Is this valid?

Yes. The company has the right to change the basis of the payment
of the wages of the workers. 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. They cannot however be deprived of
59

benefits they were already enjoying at the time of such change.


(Alcantara)

** While normally discretionary, the grant of a gratuity or bonus, by


reason of its long and regular concession, may become part of a
regular compensation.

* OR employer agreed to give its regularly without any condition


imposed for its payment

13.2 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 gain-sharing measures: [J A D
E]
1. To ensure Decent standard of living for the workers and their
families;
2. To guarantee the rights to its Just share in the fruits of
production;
3. To enhance Employment generation in the countryside through
industry dispersal; and
4. To Allow business and industry reasonable returns on
investment, expansion and growth.

13.3 Agencies for Wage Fixing Machinery


Advisory agency – National Wages and Productivity Commission

1. Art. 120 : National Wages and Productivity Commission –


attached to the DOLE the policy and program coordination.

2. Give at least 5 major powers and functions of the


National Wages and Productivity Commission :
a. To act as the national consultative and advisory body to
the President and Congress on matters relating to wages,
incomes and productivity.

b. To formulate policies and guidelines on wages, incomes


and productivity improvement at the enterprise, industry
and national levels.

c. To prescribe rules and guidelines for the determination of


appropriate minimum wage and productivity measures at
the regional, provincial or industry levels.

d. To review regional wage levels set by the Regional


Tripartite Wages and Productivity Boards .
3. Art. 126 : No preliminary or permanent injunction or temporary
restraining order may be issued by any court, tribunal or any
entity against any proceedings before the Commission or the
regional Boards.

Wage Fixing Agency

1. Art. 122 : Regional Tripartite Wages and Productivity


Boards – In all regions, including autonomous regions.
60

2. Give at least 3 major powers and functions of the


Regional Tripartite and Productivity Boards within their
territorial jurisdiction:
a. To develop plans, programs and projects relative to wages,
incomes and productivity improvement for their respective
regions.
b. To determine and fix minimum wage rates applicable in
their region, provinces or industries therein and to issue
the corresponding wage orders, subject to guidelines by
the Commission.
c. To receive, process and act on applications for exemption
from prescribed wage rates as may be provided by law or
any Wage Order. [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.]

3. Art. 126 : No preliminary or permanent injunction or temporary


restraining order may be issued by any court, tribunal or other
entity against any proceedings before the Commission or the
regional Boards.
 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

13.4 Area Minimum Wages and Criteria

* Art. 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, efficiency and general well-being of the EE’s
within the framework of the national economic and social development
program. In the determination of such regional minimum wages, the
Regional Board shall, among other relevant factors, consider the
following:
1. The demand of living wages;
2. Wage adjustment vis-à-vis the consumer price index;
3. The cost of living and changes and their families;
4. The need to induce industries to invest in the countryside;
5. Improvements in the standard of living
6. The prevailing wage levels
7. Fair return of the capital invested and capacity to pay of ER’s
8. Effects on employment generation and family income; and
9. The equitable distribution of income and wealth along the
imperatives of economic and social development.
These wages shall include wages varying within industries,
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.

13.5 Wage Order

* Art. 123 : Whenever conditions in the region so warrant, the


Regional Board shall investigate and study pertinent facts and, based
61

on the standards and criteria herein prescribed, shall proceed to


determine whether a Wage Order should be issued.
In the performance of its wage-determining functions, the
Regional Board shall conduct public hearings, consultations, giving
notices to EE’s and ER’s groups, provincial, city and municipal officials
and other interested parties.
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. It shall be mandatory for the
Commission to decide such appeal within 60 calendar days from the
filing thereof.

Methods of Fixing

*The determination of wages has generally involved two methods, the


“floor-wage” method and the “salary-ceiling” method. The 1st method
involves the fixing of determinate amount that would be added to the
prevailing statutory minimum wage. In the 2nd method, the wage
adjustment is applied to EE’s receiving a certain denominated salary
ceiling. (ECOP vs. NWPC)

Wage Distortion

* A severe contraction of the wage or salary differences is enough

1. Art. 24 : Wage Distortion - 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, length of service, or other logical bases
of differentiation.

2. How is a wage distortion corrected? Any dispute arising


from wage distortions shall be resolved through the grievance
procedures under their CBA, and if it remains unresolved,
through arbitrary arbitration. If there is no recognized labor union
or there are no collective bargaining agreements, the dispute
shall be settled through the National Conciliation and Mediation
Board, or if unresolved after 10 days of conciliation, through the
NLRC which shall decide the dispute within 20 calendar days.
(Art. 24) The law recognizes the validity of negotiated wage
increases to correct wage distortions. The legislative intent is to
encourage the parties to seek solution to the problems of wage
distortions through voluntary negotiation or arbitration, rather
than strikes, lockouts, or other concerted activities of the EE’s or
management. (ALU-TUCP vs. NLRC) In a case where a union
went on strike over a salary distortion dispute, the Court held the
strike illegal. (Ilaw at Buklod ng Manggagawa vs. NLRC)

13. 6 Wages and Productivity Measures

Wage/Salary

Differentiate wages from salary?


62

* “Wages” – Compensation for manual labor, skilled or unskilled paid


at stated times, and measured by the day, week, month, or season. It
indicates considerable pay for a lower and less responsive character of
employment.

* “Salary” – Denotes a higher degree of employment, or a superior


grade of services, and implies a position of office; by contrast, the term
“wages”, while “salary” is suggestive of a larger and more important
service. (Gaa vs. CA)

Wage Payment

1. Art. 102 : Forms of Payment : No ER shall pay the wages of


an EE by means of promissory notes, vouchers, coupons, tokens,
tickets, chits or any object other than legal tender, even when
expressly requested by the EE. [The laborer’s wage shall be paid
in legal currency. (Art. 1705, NCC)]

- Payment of wages by check or money order shall be


allowed when :
a. such manner of payment is customary on the date
of the effectivity of this Code, or
b. 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.
- CONDITIONS
a. bank – 1 km
b. written consent of EE
c. ER does not receive any pecuniary benefit
d. EE given time to withdraw from the bank –
considered as compensable his work

2. Art. 103 : Time of Payment –


* Generally : Once every two weeks or twice a month at intervals
not exceeding 16 days. No ER shall make payment with less
frequency than once a month.

* Force Majeure : Immediately after the force majeure or the


circumstances have ceased.

* Task cannot be completed in 2 weeks in the absence of a


CBA or arbitration award:
a. The payments are made at intervals not exceeding 16
days, in proportion to the amount of work completed;
b. That final settlement is made upon completion of work;

3. Art. 104 : Place of Payment : Payment of wages shall be made


at or near the place of undertaking, except as otherwise provided
by such regulations as the Secretary of Labor may prescribe
under conditions to ensure greater protection of wages.
1. deterioration of peace and order conditions
2. actual or impending emergencies – calamity
- ER must provide or reimburse transportation back and
forth
- Time spent collecting wages considered compensable his
work
63

4. Art. 105 : Direct Payment of Wages –


* General Rule : Wages paid directly to workers.
* Exceptions:
1. Force majeure rendering such payment impossible or under the
special circumstances, in which case the worker may be paid
through another person under written authority given by the
worker for the purpose.
2. Where the worker has died, in case the ER may pay the wages of
the deceased worker to the heirs of the latter without the
necessity of intestate proceedings.

A. 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, for and in behalf of the latter, not for each and
everyone of them individually. (Bermiso vs. Escano)

Wage Prohibition

1. Art. 112 : Non-Interference in Disposal of Wages –


- No ER shall limit or otherwise interfere with the freedom of
any EE to dispose of his wages.
- He shall not in any manner force, compel or oblige his EE’s
to purchase merchandise, commodities or other property
from the ER or from any other person, or otherwise make
use of any store or services of such ER or any other person.

2. A meat processing company gives a 25% discount to EE’s for


purchase on credit of its product. However, said purchases on
credit will be considered payment of his wages. An EE purchases
10 cans of the product but objects to the application of his
purchases as part of his wages. Is the objections valid?

Yes. The application of his purchases on credit as part of his wages


the products in lieu of legal tender. (Alcantara)

3. May an ER make any deductions from the wages of EE’s?


General Rule : No. His own behalf or in behalf of any person.
Exceptions: [Allowable Deductions]
1. Deductions of SSS, Medicare and Pag-ibig Premiums (Alcantara)
2. Withholding tax (NLRC)
3. Deductions for reimbursement of insurance premium advanced
by the ER where the worker is insured with his consent by the
former. (Art. 113)
4. Deductions for unions dues where the right to check-off has been
recognized by the ER or individual EE himself. (Id)
5. Deductions made with the written authorization of the EE for
payment to a 3rd person and the ER agrees to do so, provided
that the latter does not receive any pecuniary benefit, directly or
indirectly, from the transaction. (Alcantara)
6. Deductions for reimbursement of loss or damage to tools,
materials or equipment supplied by the ER to the EE, in trades,
occupations or business where the practice of making such
deductions is recognized. (Art. 114)
64

7. Deductions as a disciplinary measure for habitual tardiness


(Alcantara)
8. Agency fees under Art. 248 (e) of the Code.
9. Deductions for debts due the ER from the EE, when such debts
become due and demandable. (Art. 1706, NCC)
10. In court awards, wages may be the subject of execution or
attachment, but only for debts incurred for food, shelter, clothing
and medical attendance. (Art. 1708)
11. Deductions for value of meals and others. (Alcantara)

3. Art. 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, materials or equipment
supplied by the ER except:
a. When the ER is engaged in such trades, occupations or business
where the practice of making deductions or requiring deposits is a
recognized one, or
b. is necessary or desirable as determined by the Secretary of Labor in
appropriate rules and regulations.

4. J works as a dishwasher in a big restaurant. At the time of his


employment, 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. May management deduct the said value
from J’s wages?

Yes, provided the following conditions are met: [PRO-F20]


1. The practice of making deductions is a recognized one or is
necessary and desirable in the business of the ER.
2. J is clearly shown to be responsible
3. He is given reasonable opportunity to show cause why the
deduction should not be made.
4. The amount of deductions is fair and reasonable and does not
exceed the actual loss or damage.
5. The deduction does not exceed 20% of J’s wages in a week. (Sec.
14, Rule VIII, Book III, IRR’s)

5. Art. 116 : Withholding of Wages and kickbacks prohibited – It shall


be unlawful for any person, directly or indirectly,
 To withhold any amount from the wages of a worker or
 Induce him to give up any part of his wages by force,
stealth, intimidation, threat or by any other means
whatsoever without the workers consent.

6. Art. 117 : Deduction to ensure employment - It shall be unlawful to


make any deduction from wages of any EE for the benefit of the ER or
his life representative or intermediary as consideration of a promise of
employment or retention in employment.

7. Art. 222 - No attorneys fees, 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, however that attorneys fees may be
charged against union funds in an amount agreed upon by the parties.
Any contract, agreement or arrangement of any sort to the contrary
shall be null and void.
65

8. Art. 1708 : The laborer’s wages shall not be subject to execution or


attachment except for debts incurred for food, shelter, clothing and
medical attendance.

A. WAGE DEDUCTION

1. 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. (Apodaca vs. NLRC)

2. The wife of an EE tells the manager that her husband has not
been giving her support. Taking pity, the manager instructs the
cashier to deduct 1/3 of the EE’s pay and give the same to the
wife. Is this valid?

No. The EE concerned did not give his written authorization for the
deduction. (Alcantara)

3. Z borrowed P500.00 from his ER. When the loan became due and
demandable, Z did not pay his ER. May the ER, without the
written authorization of Z, deduct the loan from the latter’s
wages?

Yes. Compensation can take place under Art. 1706 of the NCC.
(Alcantara)

B. 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. This is
upon the theory that it is necessary to promote the welfare and
integrity of the union to which he belongs. (Manila Trading vs. Manila
Trading Labor Association)

C. GARNISHMENT/ATTACHMENT

1. Under Art. 1708 of the NCC, “laborers’ wages shall not be subject
to execution or attachment, except for debts incurred for food,
shelter, clothing and medical attendance” (Pacific Customs vs. Inter-
Island Dockmen and Labor Union)

2. Art 1708 which exempts laborers’ wage from attachment or


execution does not apply to a responsibly placed EE, supervisory
or managerial EE, but only to the rank-and-file. (Gaa vs. CA)

D. DEPOSIT

1. A marketing firm retains 5% of the weekly salary of its collectors


as a deposit to answer for any shortage in their collections.
These are refunded at the end of the month, if no shortages are
incurred. Is the practice legal?

It depends. If it is a recognized practice of ER’s to require such


deposits, then such is legal, since the sum retained is not excessive
and is kept by the ER only for a reasonable period. (Alcantara)
66

2. A taxicab company requires its drivers to make deposits to


defray boundaries and to cover car wash payments. Is this legal?

Art. 114 does not permit deposits for deficiency in the remittances
of drivers’ “boundary” but the requirement for deposit for car wash
payments is lawfull. (5-J Taxi vs. NLRC)

Prohibited Acts

1. Art. 118 : It shall be unlawful for an ER to reuse to pay or reduce


the wages and benefits, 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.

2. Art. 119 : It shall be unlawful for any person to make any


material false statement, report or record filed or kept pursuant
to the provisions of this Code.

A. 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, the
keeping of the records in any other place is prohibited. (South Motorists
vs. Tosoc)

14. 7 Liability of ER and other Parties

ER, Independent Contractor and Subcontractor and Labor-Only


Contracting

1. The rules on the liability of Job contractors, Indirect ER’s and


“Labor-only” contractors are the following:
1. General Rule : An ER who enters into a contract with a
contractor to perform work for the ER, does not thereby create
an ER-EE relationship between himself and the EE’s of the
contractor. Thus the EE’s of the contractor remain the
contractor’s EE’s and his alone. (PBC vs. NLRC)

2. Nonetheless : When a contractor fails to pay the wages of his


EE’s in accordance with the Labor Code, 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. (Id)

The law itself, established an ER-EE relationship between the ER


and the job contractor’s EE’s for a limited purpose i.e. in order to
ensure that the latter get paid for wages due them.

3. Indirect ER : These provisions shall likewise apply to any


person, partnership , association or corporation which, not being
an ER, contracts with an independent contractor for the
performance of any work, task, job or project. (Art. 107)
67

4. Labor-Only Contractor : The conclusion is different where


there is “labor-only” contracting. The “labor-only” contractor i.e.
person or intermediary, is considered “merely as an agent of the
ER.” 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. The statute establishes an ER-EE
relationship between the ER and the EE’s of the “labor-only”
contractor, this time for a comprehensive purpose, to prevent
any violation of this Code. (Broadway Motors vs. NLRC)

 The legitimate job contractor provides services while the


labor-only contractor only provides manpower.

 Job contractor undertakes to perform a specific job while


labor-only contractor merely provides personnel to work for
the employer.

2. Art. 108 : An ER or indirect ER may require the contractor or


subcontractor to furnish a bond equal to the cost of labor under
contract, on condition that the bond will answer for the wages due the
EE’s should the contractor or subcontractor, as the case may be fail to
pay the same.

3. C, 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. If C fails to pay the
wages, can the workers claim from the company?

Yes. 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. (Alcantara)

4. X entered into a contract with R for the construction of X’s house.


Some workers of R were not paid their wages. Is X liable?

Yes. Under Art. 107, the person, though not an ER, who contracts
with the independent contractor for the damages employed by the
latter are indirect ER’s. (Alcantara)

5. 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. A would spend her own money for the undertaking, but
to enable her to carry out the agreement more effectively, she
was authorized to borrow from other persons, subject to
reimbursement from S and either of them may terminate the
business arrangement at will, with or without cause. May A be
considered an independent contractor?

Yes. 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. (Sara vs. Agarrado)

Extent of Liability
68

1. The direct ER and the indirect ER are jointly and severally liable
to petitioners for the monetary claims. (Deferia vs. NLRC) For
purposes of determining the extent of their civil liability, they
shall be considered as direct ER’s. (Art. 109)

 In legitimate job contracting, no ER-EE relationship exist


between the principal and the job contractors employees.
 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. (DBP vs. NLRC)

2. If an independent service contractor fails to pay the wages of the
janitors its supplies to XYZ, is XYZ liable for the unpaid wages?

Yes. According to Art. 106, 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. (Alcantara)

3. Would your answer change if XYZ already paid the independent


contractor the contract price?

No, XYZ will still be liable for the unpaid wages of the janitor since
the obligation is imposed by law. (Id)

4. PTS, a government agency, entered into a service agreement


with ABC or the supply of janitors to PTS. ABS failed to pay the
wages of the janitors. PTS refused to pay on the ground that it is
a government agency. Is this claim valid?

No. The janitors employed by ABC are considered indirect EE’s and
not to indirect EE’s coming from the private sector. (Rabago vs. NLRC)

14. 8 Worker Preference-Bankruptcy

1. Art. 110. In the event of bankruptcy or liquidation of an ER’s


business, his workers shall enjoy first preference as regards their
wages and 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.

* The right or preference has to be asserted in distribution


proceedings such as insolvency where all the creditors convened,
their claims ascertained and inventories and the preferences
determined.

2. A declaration of bankruptcy or a judicial liquidation must be


present before the worker’s preference may be enforced. The
said article cannot be viewed in isolation; it must always be read
in relation to the provisions of the Civil Code concerning the
classification, concurrence and preference of the credits. (DBP vs.
Santos) The aforesaid provisions of the Civil Code, including Art.
110 requires judicial proceedings in rem in adjudication of
creditor’s claims against the debtor’s assets to become
operative. (Alcantara)
69

3. TUCP obtained a judgment from the NLRC in an unfair labor case.


Two days before the judgment, the PCIB, mortgage creditors of
the company, foreclosed all mortgages in their favor. The union
sought to garnish in its favor a portion of the purchase price. Is
the bank subject to the claims of the union?

Yes, under Art. 110 workers enjoy first preference as regards wages
owed them for services rendered during the period prior to the
bankruptcy or liquidation. (PCIB vs. National Mines and Allied Union)

4. Atlas Textile mortgaged its assets to DBP. DBP foreclosed the


asset. The EE’s filed a complaint against Atlas and DBP for the
wage differentials. The labor arbiter and the NLRC held that the
worker’s preference under Art. 110 does not create a lien?

No. Art. 110 does not create a lien in favor of the workers. (Alcantara)

Art. 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

14. 9 Wage Recovery

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.

2. 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,
70

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.

 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)

3. Art. 129 : Recovery of wages, simple money claims and other


benefits –
71

 The Regional Director of the DOLE or any of the duly


authorized hearing officers of the Department is
empowered, through summary proceedings and after due
notice, to hear and decide any monetary claims and
benefits, including legal interest to a person employed in
domestic or household service; Provided
a. Such complaint does not include claim for reinstatement
b. Aggregate money claims of each househelper does not
exceed P5,000

 The complaint shall be resolved within 30 days from the


date of filing of the same.

4. Art. 111 :
 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.

 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 wage recovered.

Section 14: Service Charges

14. 1 Coverage

1. Section 1, Rule V, Book III, IRR’s : This rule shall apply only
to establishments collecting service charges such as hotels,
restaurants, lodging houses, night clubs, cocktail lounge,
massage clinics, bars, casinos and gambling houses, and similar
enterprises, including those entities operating primarily as
private subsidiaries of the Government.

2. Section 2, Rule VI, Book III : This rule shall apply to all EE’s of
covered ER’s except to managerial EE’s.

Managerial EE –
a. powers of prerogatives to lay down, and execute
management to lay don and execute management policies
and/or
b. hire, transfer, suspend, lay-off, recall, discharge, assign, or
discipline EE’s or to effectively recommend such
managerial actions.

 Collection of service charges is a management decision


and not a requirement of law

14. 2 Service Charges

* Art. 96 : To be distributed at the rate of 85% for covered EE’s


[distributed equally among them] and 15% for management.

X a waiter at DC Diner was receiving a share in the restaurant’s service


charges. Later, the restaurant discontinued the collection of service
charges. The take-home pay of X was reduced by the value of the
72

discontinued service charges. May X ask his ER to continue paying the


service charges?

Yes. In case the service charge is abolished, the share or the covered
EE’s shall be considered integrated in their wages. (Art. 96)

 The employees share in the service charges is part of the


other benefits to which he is entitled, in addition to full
backwages

Section 15: Thirteenth Month Pay

15.1 Law – Coverage

Coverage

1. Section 2, Revised Guidelines on the 13th Month Pay Law : The


following ER’s are still not covered by PD 851:
 The government and any of its political subdivisions,
including GOCC’s, except those corporations operating
essentially as private subsidiaries of the government.

 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.

 [The term “its equivalent” … shall include Christmas


bonus, mid-year bonus, cash bonuses and other payments
but shall not include cash and stock dividends, cost of
living allowances and other allowances regularly enjoyed
by the EE, as well as non-monetary benefits. Where an ER
pays less than required 1/12th of the EE’s basic salary, the
ER shall pay the differences.]

 ER’s of household helpers and persons in the personal


service of another in relation to such workers, and

 ER’s of those who are paid on purely commission,


boundary, or task basis, and those who are paid a fixed
amount for performing specific work, irrespective of the
time consumed in the performance thereof, except where
the workers are paid on piece-rate basis in which case the
ER shall grant the required 13th month pay to such workers.

 A distressed ER may qualify for exemption for the 13th


month pay if there is prior authorization from the DOLE.
(Dentech vs. NLRC)

2. 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. Is this equivalent to the 13th month pay?

No. The Christmas bonuses provided in the CBA accords a reward


for loyalty to certain EE’s. This is evident from the stipulation
granting the bonus in question to workers with at least 1 year of
73

continuous service. The bonus therefore is to be in addition to the


legal requirement. (UCP vs. NLRC)

15.2 Amount and Payment Date

1. Sec 4 Revised Guidelines on the 13th Month Pay Law:


 Amount : ½ 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.

2. 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 13th 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.

3. From 191 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?

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

1. Are the sales commission of a salesman paid a guaranteed wage


plus commissions included in the computation of this 13 th month
pay?

It depends on what kind of commissions may properly be


considered part of the basic salary, they should be included in
computing the 13th 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
74

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 13th month pay. (Philippine
Duplicators vs. NLRC)

Substitute Payment

1. Benefits in the form of food or free electricity not proper substitute


for the 13th month pay. (Framanlis vs. Minister of Labor)

14th Month Pay

1. 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

1. 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.

Section 16 : Bonus

16. 1 Definition

1. A bonus is an amount 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)

16.2 When Demandable

1. From the legal point of view, a bonus is not a demandable and


enforceable obligation. But it is so when it is made part of the
wage or salary or compensation. In such case, the latter would
be a fixed amount and the former would be a contingent one
dependent upon the realization of profit. (Azucena) Furthermore,
while normally discretionary, the grant if gratuity or bonus by
reason of its long and regular concession, may become regarded
as part of the regular compensation. (Liberation Steamship vs. CIR)

Section 17. Working Conditions for Special Groups of Workers –


Women

17.1 Women and the Constitution


75

1. Art. II, Sec. 14, Const. : The State recognizes the role of
women in nation-building, and shall ensure the fundamental
equality before the law of women and men.

17.2 Coverage

1. Section 1, Rule XII, Book III, IRR’s : This rule shall apply to all
ER’s except to:
a. government and GOCC’s and
b. to ER’s of household helpers and persons in their personal
service insofar as such workers are concerned

17.3 Prohibited Acts

NIGHT WORK AND EXCEPTION

1. Art. 130 : No woman shall be employed or permitted or suffered


to work, with or without compensation:
a. Industrial undertaking : Between 10:00 pm and 6:00 am
of the following day.
b. Commercial undertaking : Between midnight and 6:00
am of the following day.
c. Agricultural undertaking : Nighttime unless she is given
a period of rest of not less than 9 consecutive hours.

2. Art. 131 : Exceptions to Nightwork prohibition


[A, F, U, P – M, H, M, - FA]
a. In cases of actual or impending emergencies caused by a
serious accident, fire, flood, earthquake, epidemic or other
Disasters or calamity, to prevent loss of life or property.
b. Cases of force majeure or imminent danger to public
safety.
c. Cases of urgent work to be performed on machineries,
equipment or installation, to avoid serious loss which the
ER would otherwise suffer.
d. Work is necessary to prevent serious loss of perishable
goods
e. Woman EE holds a responsible position of managerial or
technical in nature.
f. Woman EE has been engaged to provide health and
welfare service.
g. Where the nature of the work requires the manual skill and
dexterity of women workers;
h. Where the women EE’s are immediate members of the
family operating the establishment or undertaking; and
i. Analogous cases. (HUMMPS FAD)

3. LG, a manufacturer and exporter of jeans, 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. Is this policy discriminatory to
women?

Yes. The women sewers, by reason of their sex, are denied the
opportunity to earn additional pay. The nature of the work requires
the manual skill and dexterity of women workers and cannot be
76

performed with equal efficiency to male workers. This is one of the


exceptions to the night work prohibition. (Art. 131)

B. DISCRIMINATION

1. Art. 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 following are acts of discrimination [P, F]


a. Payment of lesser compensation, as against a male EE, for
work of equal value.

b. Favoring a male EE over a female EE with respect to the


promotion, training opportunities, study and scholarship
grants solely on account of their sexes.
Criminal liability for violations shall be penalized as provided in
Art. 288 and 289 of this Code. 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,
which may include claims for damages and other affirmative
reliefs. The actions hereby authorized shall proceed
independently of each other.

2. C, a 45-year old teacher was dismissed by the school after she


got married to Q, her 18-year old 4 th year high school student. Is
the dismissal lawful?

No, in the absence of substantial evidence to show that C took


advantage of her position to court her student. There is nothing
wrong if the two fell in love despite the disparity in their ages.
(Chua-Qua vs. Clave)

C. MARRIAGE

1. Art. 136 : Stipulation against marriage – It shall be unlawful


for an ER to : [C, S, D]
a. Require as a condition of employment or continuation of
employment that a woman EE shall not get married;

b. Stipulate expressly or tacitly that upon getting married a


woman shall be deemed resigned or separated;

c. Actually dismiss, discharge, discriminate or otherwise


prejudice a woman EE merely by reason of her marriage.

D. GENERAL

1. Art. 137 : It shall be unlawful for any ER to : [DB, DP, RA]


a. 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;

b. Discharge such woman on account of her pregnancy, or


while on leave or in confinement due to her pregnancy;
77

c. Discharge or refuse the admission of such woman upon


returning to her work for fear that she may again be
pregnant.

2. In L’s contract of employment with Club E, it was stipulated that


her employment as a dancer would cease once she gets
pregnant. When L got pregnant, L was no longer allowed to
dance and since there were no other work available for which her
talents were suitable, her employment was terminated. Is the
action legal?

Yes. It is both awkward and dangerous for her to dance during her
pregnancy. Of course the ER has the obligation to give her another
job, but as stated in the problem there is no other work for which
her talents are suited. It is not fair to require the ER to continue
employing her. (Alcantara)

3. A pharmaceutical company rejected the applications of 5


pregnant women as sales representatives for contraceptive pills
and family planning devices. Is this valid?

Yes. The company has the prerogative to select its EE’s. What is
unlawful is for the ER to discriminate against or dismiss a woman by
reason of their pregnancy. (Alcantara)

17. 4 Facilities

1. Art. 132 : The Secretary of Labor shall establish standards that


will ensure the safety and health of women EE’s. In appropriate
cases, he shall, by regulations, require ER to:
a. Provide seats proper for women and permit them to use
seats when they are free from work and during working
hours, provided they can perform their duties in the
position without detriment to efficiency.
b. To establish a nursery in a workplace.
c. To determine appropriate minimum age and other
standards for retirement or termination in special
occupations such as those of flight attendants and the like.

2. Art. 134 : (a) Establishments which are required by law to


maintain clinic or infirmary shall provide free family planning
services to their EE’s.

3. Is the ER required by law to give maternity benefits to its female


workers?

No. Maternity benefits are to be paid in appropriate instances by the


SSS. The only obligation of the ER is to advance the benefit subject
to reimbursement by the SSS. (Alcantara)

17.5 Special classification Special Women Workers

1. X works as a hostess in a nightclub, she is paid a percentage of


the lady’s drink ordered by customers. There are nights when
78

she does not earn anything because there are no customers. Is X


an EE of the nightclub?

Yes. Any woman who is permitted or suffered to work, with or


without compensation, in any nightclub, cocktail lounge, massage
clinic, bar, or similar establishment, 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. (Art.
138)

Section 18. Working Conditions for Special group of Workers –


Minors

18.1 Minors and the Constitution

Art. II, Sec. 13, Const. : The State recognized the role of the youth in
nation-building and shall promote and protect their physical, moral
spiritual, intellectual, and social well-being. It shall inculcate in the
youth patriotism and nationalism, and encourage their involvement in
public and civic affairs.

18.2 Coverage

Section 1, Rule XII, Book III, IRR’s : This Rule shall apply to all ER’s
except
[G H]
1. to the Government and GOCC’s and
2. to ER’s of household helpers and persons in their personal
service insofar as such workers are concerned.

18.3 Employable Age

Section 12, RA 7610 as amended by RA 7658 :

* General rule: Children below 15 years of age shall not be employed.


* Exceptions: [P, E]
1. Child works directly under the sole responsibility of his parents or
legal guardian and where only members of the ER family are
employed, provided:
a. his employment neither endangers his life, safety, health
and morals, nor impairs his normal development:
b. the parent or legal guardian shall provide the said minor
child with the prescribed primary and/or secondary
education.
2. Child is employed in entertainment or information through
cinema, theater, radio or television, provided:
c. Employment contract is concluded by the child’s parents or
legal guardian, with the expressed agreement of the child
concerned, if possible, and the approval of the DOLE.
d. The ER shall ensure the protection, health, safety and
morals of the child;
e. The ER shall institute measures to prevent the child’s
exploitation or discrimination.
f. The ER shall formulate and implement, subject to the
approval and supervision of competent authorities, a
79

continuing program for training and skills acquisition of the


child.
g. The ER shall first secure, a work permit from the DOLE
which shall ensure observance of the above requirements.

2. Art. 139 : Any person, between 15 and 18 may be employed in


any non-hazardous work. In any hazardous work, the employable
age is 18 and up.

3. What are considered hazardous work places? [D C M P]


a. Where the nature of work exposes the worker to
Dangerous environmental elements, contaminations or
work conditions.
b. Stevedoring, construction work, logging, firefighting,
mechanized farming and similar work.
c. Manufacture or handling of Explosives and other
pyrotechnic products.
d. Where the workers are exposed to heavy or power-driven
machinery or equipment or tools.

4. L, 10 years old, was hired as a singer in a carnival which stages


shows wherever there is a town fiesta. She is paid P5,000.00 a
month. L is therefore always on the road, traveling to different
parts of the country. Is her employment lawful?

No. Such employment will endanger her health and impair her
normal development. She is also deprived of the opportunity to get
primary education as she is always traveling to different parts of the
country. (Alcantara)

18.4 Discrimination

1. Art. 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.

2. Would a company rule providing for lower wages for workers


below 18 years who are inexperienced violate the prohibition?

No. The payment of lower wages is by reason of the worker’s


inexperience, not his age. There is no discrimination on account of
the worker’s minority. (Alcantara)

Section 19. Working Conditions for Special group of Workers –


Househelpers

19.1 Coverage

Art. 141 : This chapter shall apply to all persons rendering services in
households for compensation

19.2 Househelpers

1. 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
80

the personal comfort and convenience of the member’s of the


ER’s household, including services of family drivers. (Art. 141)

2. 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. Is S a
househelper or domestic servant?

No. 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. Services rendered in an executive
cottage cannot be considered domestic. S must be considered a
regular EE of the mining company. (Apex Mining vs. NLRC)

19.3 Non-Household Work Assignment

T lives in a compound where he operates a modest candy business.


Sometimes, when there is no work in his house, his maids help in the
packing of the candies and his family driver delivers the candies to the
outlets. How should the work rendered in connection with the candy
business be compensated?

For work rendered by the maids and the family driver, they should be
paid at the rate prescribed by law for non-agricultural workers.
(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. (Art. 145)

19. 4 Conditions for Employment

1. M, 15 years old, worked as a maid in the house of L. She was


paid in advance for 3 years and she agreed that she will work for
L for the said period. Is there any legal infirmity in the said
agreement?

Yes. The period contract exceeds the maximum set by the law. Art.
142 provides that the original contract of domestic service shall not
last for more than 2 years, although it may be renewed for such
periods as may be agreed upon by the parties. M’s contract will
therefore be good for only 2 years. (Alcantara)

2. What are the minimum wages for househelpers?


a. Metro Manila and highly urbanized cities : P800.00

b. Chartered cities and 1st class municipalities : P650.00

c. Other municipalities : P550

 Househelpers receiving P1,000.00 shall be covered by the


SSS.

3. Aside from the rights to minimum wage, what other


rights are enjoyed by a househelper? [E J B - I F]
a. Opportunity for elementary education if a househelper is
less than 18 years old (Art. 146)
81

b. Just and human treatment (Art. 147)

c. Board, lodging and medical attendance (Art. 148)

d. Indemnity for unjust termination of services of 15 days plus


the compensation already earned.

e. Funeral benefits if the househelper has no relatives with


sufficient means in the place where the head of the family
lives. (Art. 1696, NCC) [F I B E J]

f. If househelper is unjustly dismissed,


 pay wages already earned + 15 days wages (Indemnity)

g. If househelper leaves without justifiable cause,


 forfeits any unpaid salary not exceeding 15 days

4. M works as a live-in labandera in the house of T somewhere in


Quezon City. She works for 11 hours a day. Based on their
contract, she is paid P800.00. Is she entitled to additional
compensation?

Yes. Although she is merely a househelper, she should not be


allowed to work more than 10 hours a day. (Art. 1695, NCC) Since
she worked for 11 hours daily, she should be paid an additional
compensation beyond the minimum wage of P800.00 set by the
law. (Alcantara)

5. Art. 150 : If the duration of the household service is not


determined either in the stipulation or by the nature of the
service, the ER or the househelper may give notice to put an end
to the relationship of the service.

Section 20. Working Conditions for Special group of Workers –


Homeworkers

20.1 ER

1. Art. 155 : “ER” of homeworkers – includes any person,


natural or artificial, who for his account or benefit, or on behalf of
any person residing outside the country, directly or indirectly or
though any EE, agent, contractor, sub-contractor or any other
person:
a. Delivers or causes to be delivered, any goods, fabricated in
or about a home and thereafter to be returned or to be
disposed of or distributed in accordance with his directions;
or
b. Sells any goods, articles or materials to be processed or
fabricated in or about a home then rebuys them after such
processing or fabrication, either himself or through some
other person.

20.2 ER Liability
82

1. Section 8, Rule XIV, Book III, IRR’s : The ER shall be jointly


and severally liable to the EE’s or homeworkers of the contractor
or sub-contractor, in the same manner as if the EE’s or
homeworkers were directly engaged by the ER.

2. S represents in the Philippines the Sears chain of department


stores in the US. She sells wood and leather to housewives who
makes these into wooden clogs according to the patterns and
specifications of S. Is there an ER-EE relationship between S and
the housewives?

Yes. The housewives are considered homeweorkers and S is their


ER. (Alcantara)
3. What is the liability of Sears?

Sears is jointly and severally liable if S is not able to pay the wages
of the homeworkers. (Sec. 8, Rule XIV, Book III, IRR’s)

4. Terms and conditions of employment involving money claims of


homeworker shall be heard by the Regional Director of the DOLE.
Beyond that, the case falls under the jurisdiction of the Labor
Arbiter. (Azucena)

Section 21, Medical, Dental and Conditional Safety

21.1 First Aid Treatment and ER Assistance

1. Art. 156. Every ER shall keep in his establishment such first-aid


medicines and equipment as the nature and conditions of work
may require, in accordance with such regulations as the DOLE
shall prescribe.

Section 1, Rule I, Book IV, IRR’s “ This rule shall apply to all ER’s
whether operating for profit or not, including the Government ant
GOCC’s, which employ in any workplace 1 or more workers.

2. Art. 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.

3. 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. (Alcantara)

21.2 Emergency Medical and Dental Services

When and What is Required

1. Describe briefly these free emergency medical, 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.
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 51 to 200 workers: Services of a full-time registered


nurse shall be provided. However, if the work is non-
hazardous, the services of a full-time first-aider may be
provided if a nurse is not available.

 201 to 300 workers : Services of a full-time registered


nurse, a part-time emergency clinic shall be provided
regardless of the nature of the undertaking therein. The
physician and dentist engaged for such workers shall stay
in the premises for at least 2 hours a day.
• Where the establishment has more than 1 workshift
a day, the required 2 hour stay shall be devoted to
the workshift which has the biggest number of
workers and they shall, in addition to the
requirements under this Rule, be subject to call at
anytime during the other workshifts to attend to
emergency cases.

 301 or more workers : Services of a full-time nurse, a


full-time physician, a full-time dentist, a dental clinic, and
an infirmary or emergency hospital with one bed capacity
for every 100 workers shall be provided. The physician and
dentist shall stay in the premises of the workplace for at
least 8 hours a day.

• Where the workplace has more than 1 shift per day,


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.

 Where the undertaking in such workplace is non-


hazardous, 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, and shall
engage the services of a full-time nurse.

 In all workplaces where there are more than 1 workshift in


a day, the ER shall in addition to the requirements under
this rule, provide the services of a full-time first-aider for
teach workshift. (Sec. 4, Rule I, Book IV, 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, contaminations or
work conditions.
 Stevedoring, construction work, logging, firefighting,
mechanized farming and similar work.
 Manufacture or handling of explosives and other
pyrotechnic products
 Where the workers are exposed to heavy or power-driven
machinery or equipment or tools.
84

 An auto repair shop has 8 EE’s. What medical and dental


services or facilities must be furnished by the owner of the
latter?

Since the establishment employs less than 10 workers, the


owner is only obliged to keep in the workplace first aid
medicines.

When not Required

Art. 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 min – rural

21.3 Administration

Art. 165 : (a) The DOLE shall be solely responsible for the
administration and enforcement of occupational safety and health
laws, regulations and standards in all establishments and workplaces
wherever they may be located.
 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.
(b) The Secretary of Labor may, through appropriate
regulations, collect reasonable fees for the inspection of
steam boilers, pressure vessels and pipings and electrical
installations, the test and approval for safe use of materials,
equipment and other safety devices and the approval of plans
for such materials, equipment and devices. The fee so
collected expended exclusively for the administration and
enforcement of safety and other labor laws administered by
the DOLE.

Section 22. EE Classification

22.1 Coverage

Section 1, Rule I, Book VI, IRR’s : This Rule shall apply to all
establishments and undertakings, whether operated for profit or not,
including educational, medical, charitable and religious institutions and
organizations, in cases of regular employment with the exception of
the Government and its political subdivisions including GOCC’s.

22.2 EE Classification

1. Art. 280
a. Regular EE’s
b. Project EE’s
c. Casual EE’s
85

d. Seasonal EE’s
2. Art. 281
 Probationary EE
3. Others
 Contract-fixed period

ER Determination

1. What determines whether a certain employment is regular or


casual is not the will and words of the ER, much less the
procedure of hiring the EE or the manner of paying his salary. It
is the nature of the activities performed in relation to the
particular business or trade considering all circumstances, and in
some cases the length of time of its performance and its
continued existence. (De Leon vs. NLRC)

2. Tucor Industries, 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”. Are they
considered regular EE’s?

Yes. Packing and driving activities are usually necessary and


desirable in Tucor’s usual business. They are entitled to security of
tenure, the provisions of the written agreement to the contrary
notwithstanding. (Tucor vs. NLRC)

22.3 Regular EE’s

1. Who are considered regular EE’s?


a. Those who have been engaged to perform activities which
are usually necessary or desirable in the usual business or
trade of the ER, 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, or seasonal nature and the employment
is for the duration of the season. (Art. 280)

b. Casual EE’s who have rendered at least 1 year of service is


continuous or broken; they are considered regular EE’s
with respect to the activities in which they are employed;
their employment shall continue while such activity exists.
(Id.)

c. A probationary EE who is allowed to work after the


probationary period. (Art. 281)

d. 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. (Art. 75)

2. H applied for employment with Holiday Inn and was accepted for
“On-the-job training” as telephone operator for 3 weeks. After
the completion of the training she was employed on a
“probationary basis” for 6 months. Four days before the said
86

period, she was dismissed by the hotel on the ground that she
failed to meet the standards of the hotel. Is the dismissal valid?

No. At the time of her dismissal, she was already a regular EE since
the “on-the-job training” was already her “probationary period.” She
was not dropped after that period. Even granting that the probation
did not end with the training, there is no reason why that period
should not be included in the stipulated 6-month period probation.
(Holiday Inn vs. NLRC)
3. L was hired as a component mechanic by a manufacturing firm
for a probationary period for 6 months. Management decided not
to hire her after the probationary period. After a month, the
company again hired L for another 6-month probationary period.
After the 2nd 6-month probationary period, she was dismissed. Is
L a regular EE?

Yes. The nature of her job required her to perform activities which
are necessary and desirable in the usual business of her ER. She
was also rehired after the probationary employment extended to
her. This fact of rehiring negates any claim that she failed to qualify
as a regular EE. 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. (Octaviano vs. NLRC)

4. J is employed on a probationary period for 3 months. Although


the ER was not satisfied with his performance, he is allowed to
work after the end of the 3-month period. Has J become a regular
EE?

Yes. An EE is allowed to work after a probationary period shall be


considered a regular EE. (Alcantara)

Nature of Work

1. 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. (De Leon vs. 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. Also, if the EE has been performing the job for at least
one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need
for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the
employment is also considered regular, but only with respect to
such activity and while such activity exists. (Id.)

2. B, was hired by a Buddhist Temple as secretary and interpreter.


She also attended personally to some needs of the Head Monk. Is
B a regular EE or a domestic helper?

B is a regular EE. Her functions were essential and important to the


operation and religious function of the temple; they could not be
categorized as mere domestic work.
87

3. Stevedores were employed by corporation engaged in deep-sea


fishing to unload the tuna fish catch from latter’s vessels into
refrigerated vans. Their work was intermittent depending on the
arrival of fishing vessels. There were also times when the
stevedores worked on vessels belonging to other companies. Are
the stevedores regular EE’s?

Yes. They were engaged to perform activities usually necessary or


desirable in the usual business or trade of their ER’s. The activity of
catching fish is a continuous process; it cannot be considered as a
specific project or a seasonal activity. 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 la-off. (RJL Martinez vs.
NLRC)

4. An electric cooperative only extended permanent appointments


to linemen, secretaries, clerks and electricians after 6 months
from the date of their hiring. May the ER treat these workers as
regular EE’s only from the date they were extended permanent
appointments?

No. Their services are usually necessary or desirable in the usual


trade or business of the cooperative. (Central Negros Electric vs. NLRC)

Hiring Extended Period

1. 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.
However, when the project to which they were assigned were
completed, they would be immediately assigned to the next
project. Considering that they have been working for a number of
years, are they regular EE’s?

Yes. They perform activities usually necessary or desirable in the


usual business of the company. They are considered “non-project
EE’s” of the construction company. (Fegurin vs. NLRC)

2. F, a skilled welder was hired by DM Consunji for several projects


wherein he was assigned. 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. Is he a regular EE?

No. F is a project EE. (Fernandez vs. NLRC)

Contract to Contract

1. P was hired by a textile firm as a machine operator. 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. Is the stipulation
valid?
88

No. It determines the security of tenure enjoyed by P who is a


regular EE. His continued employment is made to depend upon the
whims of the ER. (Alcantara)

2. M Co., is engaged in the manufacture of furniture for export. It


has regular customers but also receives special orders. It hires
“temporary workers” for special orders. These are made to sign
temporary contracts. Are these workers considered regular
workers? Yes. They are engaged in activities which are usually
necessary of desirable in the usual business or trade of the ER.
Significantly, the special orders are not seasonal but more or less
regular, requiring the continuous services of the “temporary
workers.” The temporary employment contracts have little
probative value. (Mehitabel Furniture vs. NLRC)

3. M was employed as a carpenter by a company engaged in the


concrete structural business. His work involved the making of
moulds for bridges. He was never assigned to work outside the
plant of the ER. Every 3 months, he was made to fill up and sign
an employment contract relating to a particular phase of a work
in a specific project. Is M a regular EE?

Yes. He was assigned to perform tasks which are usually necessary


or desirable in the usual trade or business of the ER. Despite the
signing of employment contracts, the work did not end on a project
to project basis. He continued to perform the same kind of work
throughout his period of employment. (Magante vs. NLRC)

22.4 Project EE’s

Who are considered project EE’s?


 A project EE is one 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 EE or where the work or service to
be performed is seasonal in nature and the employment is
for the duration of the season. (Art. 280)

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. (ALU-TUCP vs. NLRC)

Project EE’s

1. PPI, a company providing construction supervision of the Manila


Expressway hired R for a term of 24 months. After the expiration
of the period, he was hired for another term of 10 months, and
then for 19 months. All these were entered during various stages
prior to the completion of the construction project. Was R a
regular EE of PPI?
89

No. He was hired in a specific project or undertaking as a driver. He


was a project EE whose employment terminated upon the expiration
of his employment contract or upon the completion of the project.
(Rada vs. NLRC)

2. A company engaged in the building and repair of vessels hired


welders to work in the repair of a specified vessel. Is the
employment of the workers considered regular?

No. They are project EE’s whose work is co-terminus with the
project for which they are hired. (Sandoval Shipyards vs. Leogardo)

3. Consumer Pulse hired field interviewers on specified project basis


for a definite period of time. Many of the interviewers worked for
several projects. Generally, the contractual employment is not
continuous but intermittent, sporadic with long intervals of idle
periods in between projects due to lack of work or job contracts.
Are the filed interviewers considered regular EE’s?

No. The interviewers were hired for specific projects the completion
or termination of which are determined at the start of their
employment. (Manansag vs. NLRC)

4. A construction firm hired as project EE’s several workers. Instead


of being assigned solely to the job sites, they were also made to
work as inventory clerk or warehouseman in the company’s
central shop. Are they project EE’s?

No. Their work did not end upon the completion of a project. They
perform their jobs even after a job had been finished. Since they
performed tasks vital and indispensable to the efficient
administration and completion of the company’s various projects,
they are considered regular EE’s. (Capitol Industrial vs. NLRC)

Rationale

1. The rationale for this rule is that if a project has already been
completed, 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, if at all. In effect, these
stand-by workers would be enjoying the status of a privileged
retainers, collecting payments for work not done, to be disbursed
by the ER from profits not earned. This is not fair by any
standards and can only be lead to a coddling of labor at the
expense of management. (De Ocampo vs. NLRC)

Implication

Project EE’s are not entitled to separation pay as their work was
coterminous with the completion of the project. (Sandoval Shipyards vs.
Leogardo)

22.5 Casual EE’s


90

1. 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.
(Art. 280)
2. Jai Alai Manila hired a mason and plumber to do renovation work
on its building. The work lasted for 11 months. Are the mason
and plumbers regular EE’s?

No. They were engaged for a specific project or undertaking. They


are casual EE’s and as such do not enjoy the security of tenure
since they work for only 11 months. (Philippine Jai Alai vs. Clave)

22.6 Seasonal EE’s

1. Agricultural workers were hired by the owners of a rice and sugar


land to perform particular phases of agricultural work necessary
in rice production, after which they were free to render services.
Considering that they rendered services for many years, in their
employment, though seasonal, deemed regular?

No. They are considered project or seasonal EE’s .their employment


legally ends upon the completion of the project or the season.
(Mercado vs. NLRC)

22.7 Contract-Fixed Period

1. A was engaged as athletic director by Brent School for a fixed


term of 5 years. She was not rehired after that term. Is she a
regular EE?

No. A’s employment was for a fixed period, her employment ended.
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, the parties should not be forbidden to
stipulate any period of time for these activities. There is nothing
essentially contradictory between a definite period of employment
and the nature of the EE’s duties. (Brent vs. Zamora)

2. Give the criteria under the fixed period contracts of


employment cannot be said to be in circumvention of the
worker’s security of tenure.
 The fixed period of employment was knowingly and
voluntarily agreed upon by the parties, without any force,
duress or improper pressure being brought to bear upon
the EE and absent any other circumstances vitiating his
consent; or
 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. (Pantranco vs. NLRC)
 When such stipulations were not designed to circumvent
the laws on security of tenure. (Brent vs. Zamora)

3. C was engaged by a trucking company to work as a truck driver


for a period of six months. It appears that all drivers of the
company were hired on fixed contract basis. The company
91

merely filled in the blanks in a mimeographed form with the


corresponding driver’s data. After the 6-month period, C’s
services were terminated. Was this a valid termination?

No. The contract for a fixed period was a clever scheme to prevent
its EE’s from becoming regular EE’s. he should be considered a
regular EE. (Cielo vs. NLRC)

4. 15 years after his dismissal for cause. A was re-hired as a driver


for 1 month. Did such re-hiring result in his reacquisition of his
former regular status?

No. The contract specifically provided for a fixed term. (Pantranco vs.
NLRC)

22.8 Probationary EE’s

1. What is a probationary employment? It is employment for a


specified period generally no 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. (Alcantara)

2. What is the probationary period for apprentices and learners?


 Apprentices : The probationary period in the
apprenticeship may not be under probationary
employment in the company where he trained. In another
company, however, the probationary period for him would
be 6 months.
 Learners : If the job is learnable – can be learned within 3
months – then the probationary period is 3 months or less.
(Policy Instructions No.1)

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. (Grand Motors vs.
Minister of Labor) A probationary appointment is made to afford the ER
the opportunity to observe the fitness of a probationer while at work,
and to ascertain whether he will become a proper and efficient EE.
(International Catholic Migration Commission vs. NLRC) It is necessary for the
probationary EE to undergo a period of probation to test his
qualifications, skills and experience. (Grand Motors)

Duration/Exception

May a company impose a longer probationary period than 6 months?


Yes. Generally, the probationary period of employment is limited to 6
months. The exception to this general rule is when the parties to an
employment contract may agree otherwise, such as when the same is
established by company policy or when the same is required by the
nature of the work to be performed by the EE i.e. where a probationary
period was set for 18 months, especially where the EE must learn a
92

particular kind of work such as selling or when the job requires certain
qualifications, skills, experience or training. (Buiser or Leogardo)

Extension Contract Effect EE’s

D was hired on probation by Mariwasa. Upon expiration of the


probationary period, he was informed by the ER that his work proved
unsatisfactory. To give him a chance to improve his performance and
to qualify for her regular employment, Mariwasa extended, with his
written conformity, his probationary period for another 3 months. His
performance did not improve, and his services was terminated. Did he
become a regular EE?

NO. By voluntary agreeing to the extension of the original probationary


period, D, in effect, waived any benefit attaching to the completion of
the said period. (Mariwasa vs. Leogardo)

Absorbed EE’s

Private respondents could not be considered probationary EE’s


because they were already well-trained in their respective positions.
(Cebu Stevedoring vs. 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. (International Catholic Immigration Commission vs.
NLRC)

Rule Private School Teacher

1. Give the legal requisites for a private school teacher to


acquire permanent employment and security of tenure?
These requisites are:
a. The teacher is a full time teacher.
b. The teacher must have rendered 3 consecutive years of
service.
c. Such service must have been satisfactory. (Cagayan Capitol
College vs. NLRC)

2. At the time of her retirement, A has been employed as school


teacher for 22 years. After 3 years from her retirement, she was
rehired by the school teacher under contract which was
renewable yearly. After 2 years of continuous satisfactory
performance, her contract was not renewed. Was the non-
renewal violative of her security of tenure?

Yes. When she was rehired, 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. she could not
be discharged solely on account of the expiration of her 2nd annual
contract. She could not only be dismissed for cause and with due
process. (St. Theresita’s Academy vs. NLRC)
93

3. A teacher was hired by a private school on a yearly basis. Before


the expiration of the 2nd yearly contract, the school refused to
renew her contract on the ground that her teaching performance
was not satisfactory. Is the refusal justified?

Yes. The positions were temporary in nature and her employment


was for a definite period. Even assuming that she was on
probationary employment, the probationary period for teachers is 3
years. (Biboso vs. Victoria Milling)

Section 23: Termination and Employment

23.1 Introduction: EE’s Security of Tenure

Coverage

1. Art. 278 : The provisions of this Title shall apply to all


establishments or undertakings, whether for profit or not.

2. Confidential and managerial are also entitled to security of


tenure, fair standards of employment and the protection of labor
laws. (Inter-Orient Maritime vs. NLRC) Probationary and contractual
EE’s enjoy security of tenure but only to a limited extent. That is,
they remained secure in their employment during the period of
time their respective contracts remained in effect. (Labajo vs.
Alejandro)

3. Pakiao workers who by the nature of their work are considered


regular workers enjoy security of tenure. (Dy Keh Beng vs. ILMU)
However, if the circumstances indicate that they are in reality
independent contractors, then they do not enjoy security of
tenure. (Alcantara)

Security of Tenure

1. 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. He cannot be deprived of his work, which is property in
the constitutional sense, without a just cause and without the
benefit of hearing. (Alcantara)

2. Is there an express constitutional guarantee of the security of


tenure of an EE? Yes. Art. XIII, Sec. 3, Const. (Rance vs. NLRC)

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. This explains why under the board
principles of social justice the dismissal of EE’s is adequately protected
by the laws of the state. (Alhambra vs. NLRC) However, the worker’s right
to security of tenure is not an absolute right for the law provides that
he may be dismissed for cause. The law in protecting the rights of the
laborers, authorizes neither oppression nor self-destruction of the ER.
(MERALCO vs. NLRC)
94

Rationale Regulation

The right of ER to freely select or discharge his EE’s is regulated by the


State, because the preservation of the lives of citizens is a basic duty
of the State, more vital than the preservation of the corporate profit.
(Llosa-Tan vs. Silahis)

23.2 Management Rights and the Just Cause of Termination

Art. 282 : An ER may terminate an employment for any of the


following casues:
1. Serious misconduct or willful disobedience by the ER of the lawful
orders of his ER or representative in connection with his work;

2. Gross and habitual Neglect by the EE of his duties;

3. Fraud or willful breach by the EE of the Trust reposed in him by


his ER or duly authorized representative;

4. Commission of a crime or offense by the EE against


a. the person of his ER or
b. any immediate member of his family or
c. his duly authorized representative and

5. Analogous cases.

Management Rights
 The following are management rights with respect to EE”s:
1. Right to manage people in general : Except as limited by special
laws, an ER is free to regulate, according to his own discretion
and judgment, all aspects of employment. (San Miguel vs. Ople)

2. Right to just share in the fruits of production : Every business


enterprise endeavors to increase its profits. In the process it may
adopt or devise means designed toward the goal. The free will of
management to conduct its own business affairs to achieve its
purpose cannot be denied. (Id.)

3. Right to discipline : The ER has the prerogative to instill discipline


in his EE’s and to impose reasonable penalties, including
dismissal, on erring EE’s pursuant to company rules and
regulations. (San Miguel vs. NLRC)

4. Right to transfer EE’s : It is management prerogative to transfer


an EE from one office to another within the business
establishment, provided there is no demotion in rank or
diminution of his salary, benefits and other privileges. (Yuco
Chemical vs. 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. (PTTC vs. NLRC)
The managerial prerogative, however, to transfer personnel,
must be exercised without grave abuse of discretion and putting
to mind the basic elements of justice and fair play. It cannot be
used as a subterfuge by the ER to rid himself of an undesirable
worker. Nor where the real reason is to penalize an EE for his
95

union activities and thereby defeat his right to self-organization.


(Id.)

5. The right to demote : It is management prerogative to tranfer,


demote, discipline and even dismiss an EE to protect its
business, provided it is not tainted with unfair labor practice
(Petrophil vs. NLRC)

6. Right to dismiss : The right of the company to dismiss its EE’s is


a measure of self-protection. (Reyes vs. 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, and whose continuance in the service of the latter is patently
inimical to his interests. (Manila Trading vs. Zulueta)

Just Causes of Termination

May an ER dismiss an EE who enjoys security of tenure? Yes. Security


of tenure does not guarantee perpetual employment. If there is a just
or authorized cause the ER may terminate the services of an EE; the
former cannot be legally compelled to have in its employ s person
whose continued employment is patently inimical to its interest.
(Alcantara)

A. JUST CAUSE : SERIOUS MISCONDUCT

1. What is serious misconduct? Misconduct is improper or wrong


conduct/ it is the transgression of some established and
definitive rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere
error in judgment. The misconduct to be serious must be of such
a grave and aggravated character and not merely trivial or
unimportant. Such misconduct, however serious, must,
nevertheless, be in connection with the EE’s work to constitute
just cause for its separation.

2. Examples of serious misconduct :


a. EE utters obscene, insulting or offensive words against a
superior (Asian Design vs. Deputy Minister of Labor) or
challenging a superior officer to a fistfight. (Luzon Stevedoring
vs. CIR) However, 2 other later cases ruled that the penalty
of termination is extreme and excessive and is not
commensurate with the acts committed. (Maranao Hotel vs.
CA and Mary Johnston Hospital vs. NLRC) The controlling factor
is the circumstances surrounding the willful misconduct.
(Alcantara)

b. Serious breach of company rules by allowing 2 security


guards to come inside the Security Office, drinking and
having sex with one of the guards, although both of them
are married. (Stanford vs. NLRC)

c. As a general rule, immorality does not justify a discharge.


But when the EE holds a responsible position and has
under him a good number of men, the EE must set a good
example for his men to follow. Thus, when he got a young
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concubine and drove away the members of his family from


the conjugal home, such dismissal is justified. (Sanchez vs.
Ang Tibay)

d. Sleeping in post, gross insubordination, dereliction of duty


and challenging superior officers to a fight committed by a
security guard. (Luzon Stevedoring vs. CIR)

e. Seaman’s assault with a knife of a member of the ship’s


crew. (Haverton vs. NLRC)

f. Intoxication is such a misconduct as will justify separation


from employment, where such intoxication interferes with
the employment. (Azucena)

g. Sexual harassment by a managerial EE of one of his


subordinates. (Villarama vs. NLRC)

h. Authorship of a manifesto which ridiculed the officers of a


school and demanded their removal, and which disrupted
the good order and decorum in the school, when such
charges in the manifesto are found to be not true. (St.
Mary’s College vs. NLRC)

i. Cheating a customer. (PLDT vs. NLRC)

3. What are examples of misconduct which does not warrant


dismissal?
a. Fistcuffs between two EE’s as a result of mere private
matter between them. (Aris vs. NLRC)

b. Vending, soliciting, and engaging in usurious activities.


(Pacific Products)

c. Borrowing money from a patient which the EE later paid


back. (Makati Medical Center vs. NLRC) However, when there is
use for a trust relationship as leverage for borrowing
money, the act becomes serious misconduct. (Pearl S. Buck
Foundation vs. NLRC)

d. Teacher falling in love with student provided the teacher


did not take advantage of her position to court her
student. (Chua-Qua vs. Clave)

B. JUST CAUSE : WILLFUL DISOBEDIENCE

1. What are the requisites in order that willful disobedience


may constitute a just cause for terminating employment?
 The orders, regulations, instructions of the ER or his
representative must be:
a. Reasonable and lawful – has reference not only
to the kind and character of directions, but also
the manner in which they are made.
b. Sufficiently known to the EE.
c. In connection with the duties which the EE has
been engaged to discharge.
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 The ER’s conduct must have been willful or intentional,


willfulness being characterized by a wrongful and perverse
mental attitude rendering the EE’s act inconsistent with
proper subordination. (Azucena)

2. Not every case of insubordination or willful disobedience by an


EE of a lawful work-connected order of the ER or its
representatives is reasonably penalized with dismissal. There
must be a reasonable proportionality between the offense and
the penalty imposed therefor. (Gold City vs. NLRC) Past infractions,
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. (Filipino vs. Ople)

3. M, an EE of Tritran was told by the personnel manager to see


right away the president to apologize for his past misdeeds. He
was dismissed because he failed to see the company president.
Is the dismissal justified?

No. The directive to see the company president was neither


reasonable nor one connected with his duties. (Mancho vs. NLRC)

4. Examples of willful disobedience :


 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. (Soco vs. Mercantile Corp.)

 Willful violation of rules and regulations designed for the


safety of laborers i. e. smoking by a painter in the painting
booth. (Northern Motors vs. NLU)

 Allowing a customer to pass thru the exit gate without


paying for the work done on his car, despite clear
instructions to the contrary, (Manila Trading vs. Zulueta)

 Act of gambling if it is penalized under company rules with


dismissal. (Dimalanta vs. Secretary of Labor)

 Failure to comply with reportorial requirements in the sales


policies. (GTE vs. Sanchez)

 N, 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. (Nuez vs.
NLRC) In this case, even if he was employed for 19 years,
and this was his 1st offense, no separation pay, on the basis
of compassion was given to the EE.

 B was employed as Chief Dietician of a hospital. She


refused to follow the instructions of the Board of Trustees
of the hospital to buy from a food supplier who was willing
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to give a discount on food purchases. Because of this, B


was dismissed. Is the dismissal justified?

Yes. Her acts constitute serious defiance of the lawful orders


of her superiors with respect to matters involving her duties.
They are also sufficient basis for her superiors to lose their
trust and confidence in her. (St. Luke’s vs. Minister of Labor)

5. D, an EE of Northwest Airlines refused a promotion. Does such


refusal constitute insubordination warranting dismissal?

No. There is no law which compels an EE to accept a promotion. He


was exercising a right and he cannot be punished for it as quijure
suo utitor neminem laedit. He who uses his own legal right injures
no one. (Dosch vs. NLRC)

6. G, a press-helper of a printing company drank beer outside


company premises after his tour of duty. He later went to the
company’s canteen to eat lunch. He was dismissed based on the
company policy prohibiting “drinking in the company premises or
coming to work under the influence of alcohol.” Is the dismissal
justified?

No. He did not drink beer in the company premises; neither did he
report for work under the influence of liquor because it was not their
tour of duty then. (Catalan vs. Genilo)

C. JUST CAUSE : NEGLECT OF DUTIES

1. 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, the neglect of duties must not only be gross but
also habitual . Gross neglect means an absence of that diligence
that an ordinarily prudent man would use in his own affairs,
unless the contract of employment requires a higher degree of
care. 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. (DOLE
Manual)

2. Examples of gross negligence :


 Failure to properly estimate the fair market value of a
property to be used for a loan by an appraiser. (Associated
Bank vs. NLRC)
 Abandonment. To constitute abandonment, two elements
must concur:
a. The failure to report for work or absence
without valid or justifiable reason, and
b. A clear intention to sever the ER-EE
relationship, with the second element as the
more determinative factor and being
manifested by overt acts. (Labor vs. NLRC)

 Habitual tardiness and absenteeism (Sajonas vs. NLRC)


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 Numerous unauthorized absences. (Cando vs. NLRC)

3. S, working as a lobby boy of a movie theater, was pursuant to


standard management practice transferred from the day shift
where he had been for quite some time to the night shift. He
asked that the change be recalled but his request was denied. As
he disliked the new assignment, he did not report for work. The
company dismissed him due to abandonment. Is the dismissal
jusitified?

Yes. There was nothing unusual or discriminatory in his change of


assignment because the rotation was standard company practice.
(Castillo vs. CIR)

4. Due to unauthorized absences, M, employed with the company


for 18 years, was transferred from the Fire Tender Section to the
Pan Grinding Section. He however did not report to his new
section, on the ground that the transfer was unreasonable and
amounted to demotion. The company contends that his failure to
work despite repeated notices constitutes abandonment and a
ground for his dismissal. Is this valid?

The penalty of dismissal is out of proportion to the offense


committed considering the number of years of M’s employment. A 1
year suspension would be sufficient. (Meracap vs. International Ceramics)

5. A, met a work-connected accident. When he was completely


recovered, he failed to report to work despite the certification of
5 doctors that he could resume his normal work. He was
dismissed pursuant to company [policy that an EE who incurs
without valid reason 6 or more absences is subject to dismissal.
Is the dismissal valid?

Yes. He was guilty of serious neglect of his duties. (Phil. Geothermal vs.
NLRC)

D. JUST CAUSE : DISHONESTY, LOSS OF CONFIDENCE

1. What kind of fraud justifies as just termination? Fraud has


been defined as any act, omission, or concealment which
involves a breach of a legal duty, trust or confidence justly
reposed and is injurious to another. To constitute a just cause for
terminating the EE’s services, the fraud must be committed
against the ER, or representative and in connection with the EE’s
work. Thus, fraud committed by an EE against 3 rd 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. (DOLE, Manual)

2. Example of Dishonesty
 Falsification of time cards. (SMC vs. NLRC)

 Theft of company property. (Firestone vs. Lariosa) However,


the penalty must be proportional to the offense committed
i.e. EE should not be dismissed for theft of used motor oil
of minimal quantity if the EE has no previous record.
(Gelmart vs. NLRC); EE should not be dismissed for theft of
100

lead pipe to be used for personal use if the EE has no


previous record. (PAL vs. PALEA); 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 P3,000.00 (Sampang vs. Inciong); counter –
clerk of PLDT should not be dismissed for tampering with a
phone bill where the worth of the tampering only
amounted to P30.00 and it was the first offense in 7 years
(PTTC vs. NLRC). Note that the length of time the EE is
employed and the fact that it was the EE’s 1st offense is an
important factor in many of these cases wherein the
penalty of dismissal was deemed to harsh. Where a
penalty less punitive would suffice, whatever missteps may
be committed by the worker should not be visited with the
supreme penalty of dismissal. (Almira vs. BF Goodrich)

 Circulating fake tickets. (Ibarrientos vs. NLRC)

3. 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. (Quezon Electric 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.
(Kwikway vs. NLRC) However, to constitute as valid ground, it must
be substantial and not arbitrary, and must be founded on clearly
established facts sufficient to warrant the EE’s separation from
work. (Labor vs. NLRC)

4. Examples of loss of confidence as ground for just


termination :
 GM of hotel found to have anti-Filipino tendencies, who did
not perform his functions properly and who requisitioned
wines for personal use. (Riker vs. Ople)

 Director who represented to the company that machinery


brought were brand-new when in fact they were second-
hand. (Pepsico vs. NLRC)

 Bank teller’s act allowing encashment of checks over the


counter without verification of drawer’s signature. (Allied
Bank vs. 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. (Filipro vs. NLRC)

 Engaging in business other than that of ER, 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. (Azucena)

 Competing with ER’s business. (Azucena)


101

 Repeated shortages incurred by a bill collector, although


resulting in no material damage as the amounts were
returned. (Piedad vs. Lanao del Norte Electric Cooperative)

5. 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. Considering that the
EE’s held no position involving trust and confidence, is loss of
confidence a ground to dismiss them?

No. The offense they committed is not work-related. The pilferage


could have been effected even if they were not EE’s of the
cooperative. (Quezon Electric Cooperative vs. NLRC) Compare this with
the case of Flores vs. NLRC, where the same act constituted a
ground of serious misconduct and breach of trust.

6. J, a checker, was dismissed by San Miguel for breach of trust due


to possible involvement in a burglary incident. The dismissal was
effected despite J’s acquittal in a criminal case for the said
offense. Is the dismissal lawful?

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. (SMC vs. NLRC)

E. JUST CAUSE : COMMISSION OF A CRIME OR OFFENSE

1. 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. The
immediate members of the family referred to are limited to the
spouse, ascendants, descendants, or legitimate, natural, or
adopted brothers or sisters of the ER or of his relative by infinity
in the same degrees, and those by consanguinity within the 4th
degree. (Azucena)

2. Conviction or prosecution is not required, 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. (Starlite vs. NLRC)

F. ANALOGOUS CASES

1. To be considered analogous to the just cases enumerated, the


cause must be due to the voluntary and/or willful act or omission
of the EE. (Nedura vs. Benguet Consolidated)

2. Examples of Analogous Cases :


 Unreasonable behavior and unpleasant deportment in
dealing with the people she closely works with in the
course of her employment, is analogous to the other “just
causes” enumerated under the Labor Code. (Cathedral
School vs. NLRC)

G. OTHERS
102

1. Other examples of just termination:


 Courtesy resignation (Batongbacal vs. Associated Bank)

 Faculty members of a school whose appointments as


department heads are terminated. (La Sallette vs. NLRC)

23.3 Authorized Cases of Termination

Art. 283 : The ER may also terminate the employment of the EE


due to:
1. the Installation of labor saving device.
2. redundancy
3. retrenchment to prevent losses.
4. closing or cessation of operation of the establishment or
undertaking.

Art. 284: EE who has been found to be suffering from and Disease and
whose continued employment is prohibited by law or is prejudicial to
his health as well as to the health of his co-EE’s.

Introduction of Labor saving Devices

Redundancy

Redundancy exists where the services of an EE are in excess of what


is reasonably demanded by the actual requirements of the enterprise;
a position is redundant when it is superfluous, and superfluity of a
position or positions may be the outcome of a number of factors such
as:
1. the overthrowing of workers
2. decreased volume of business or
3. the dropping of a particular product line or
4. service activity previously manufactured or undertaken by the
enterprise.

Redundancy is an ER’s personnel force, however does not necessarily


or even ordinarily refer to duplication of work. 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. (Escareal vs. NLRC)
Retrenchment

What are the general standards to determine whether the


retrenchment is valid? The general standards are the following:
1. The losses expected should be substantial and not merely de
minimis in extent.
2. The substantial loss apprehended must be reasonably imminent,
as such imminence can be perceived objectively and in good
faith by the ER.
3. It must be reasonably necessary and likely to prevent the
expected losses.
4. The ER should have taken other measures prior or parallel to the
retrenchment to forestall losses. I. e. ; cut other costs other than
labor costs.
103

5. Alleged losses if already realized, and the expected minimum


losses sought to be forestalled, must be proved by sufficient and
convincing evidence. (Lopez Sugar vs. FFW)

Distinguish redundancy from retrenchment? Redundancy means that


the position of the EE has become superfluous, an excess over what is
actually needed, even if the business reduction or reverses. (Azucena)

Closure of Business

1. The burden of proving that the termination was for a valid or


authorized cause shall rest on the ER. (Indino vs. NLRC)

2. Is the ER required to pay separation pay for closure of business


due to the serious business losses?

No. The cases of State Investment House vs. CA, Mendoza vs.
NLRC, and the Mindanao Terminal 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. (Azucena)

3. What are the requirements for a valid cessation of


business not due to business reverses?
 Service of a written notice to the EE’s and to the DOLE at
least 1 month before the intended date thereof.
 Cessation or withdrawal from business operations must be
bona fide in character.
 Payment to the EE’s termination pay amounting to at least
½ month pay, for every year of service, or 1 month pay,
whichever is higher. (ALU vs. NLRC)

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, 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. (Sec. 8, Rule
1, Book VI, IRR’s) A medical certificate issued by the company’s own
physician, is not a “competent public health authority.”

23.4 Procedure to Terminate Employment

Two Facets of Valid Termination


1. The legality of the act of dismissal which constitutes discharge
with just cause; and
2. The legality in the manner of dismissal with due process.
(Shoemart vs. NLRC)

Due Process : 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:
104

1. Notice which apprises the EE of the particular acts or omissions


for which his dismissal is sought; and
2. Subsequent notice which informs the EE of the ER’s decision to
dismiss him. Failure to comply with the requirements taints the
dismissal with illegality. (Pepsi-Cola vs. NLRC)

Opportunity to be Heard

1. An EE must be given ample opportunity prior to his dismissal to


adequately prepare for his defense. 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. Under the rules, indeed workers may be provided with
a representative. (Ruffy vs. 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. (Salaw vs. NLRC)

2. 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.e. retrenchment or redundancy. (Witshire vs. NLRC).

3. W was called to the Office of the General Manager and was told
that she was being charged with discourtesy and
insubordination. During that time, she was also called to explain
her side. As she could not give an explanation, she was
dismissed. Is the dismissal valid?

No. She was denied procedural due process. She was not given
ample opportunity to be heard and to defend herself.

4. 36 conductors of a bus were dismissed after investigations


conducted by the Jago and the fiscal found out that they
defrauded the company. Is the dismissal violative of due
process?

No. For the company to conduct its own investigation is a


duplication of the JAGO and the city fiscal’s investigation. (BLTB vs.
NLRC)
5. 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. Is this violative of due process?

Yes. As compared to the BLTB case, the findings of the city fiscal
were based solely on the affidavit of the accused-turned state
witness. The substantial evidence requirement is not present. (China
City Restaurant vs. NLRC)

6. S was dismissed by his ER due to his well documented


involvement in pilferage. Prior to dismissal, he was called to a
meeting of all delivery personnel to discuss pilferage incidents.
He denied involvement therein. Later he was dismissed. Is the
dismissal violative of due process?

Yes. The meeting called by the ER does not qualify as the hearing
required by law. (Segismundo vs. Montalvo)
105

Right to Counsel

The right to counsel is a basic requirement of substantive due process.


The right to counsel cannot be waived except in writing and in the
presence of counsel. (Salaw vs. NLRC)

Burden of Proof

Art. 277 : The burden of proving that the termination was for a valid
or authorized cause shall rest on the ER.

Degree of Proof

In administrative or quasi-judicial proceedings, proof beyond


reasonable doubt is not required as basis for a judgment of the legality
of an ER’s dismissal of an EE, nor even preponderance of evidenced,
substantial evidence being sufficient. (MERALCO vs. NLRC)

Condonation

Having condoned the misconduct of the EE and pardoned the latter, he


is deemed to have lost or waived his right to insist on the ER’s acts as
a ground for dismissal. (Azucena)

Dismissal for Cause but Without Due Process

A sanction, in the form of damages, 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. NLRC)

Rules – Managerial EE’s and Rank and File EE’s

As a general rule, ER’s are allowed a wider latitude of discretion in


terminating the employment of managerial personnel or those who,
while not of similar rank, perform functions which by their nature
require the ER’s full trust and confidence. 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; mere uncorroborated assertions and
accusations by the ER will not suffice. (Coca-Cola vs. 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. (Ranara vs. NLRC)

Prescription

A complaint founded on illegal dismissal is not an ordinary money


claim but for reinstatement. The action may be brought within 4 years
from dismissal pursuant to Art. 1146 of the NCC. (New Imus Lumber vs.
NLRC)

23.5 Consequences of Termination


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Separation Pay
A. General Rule
If there is valid cause to terminate an employment, no separation pay
need be paid. (Sec. 7, Rule I, Book VI, IRR’s)

B. Exceptions
1. Art. 283 :
 Installation of labor saving devices and redundancy : 1
month or 1 month pay for every year of service, whichever
is higher.

 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, which ever is
higher.

2. Art. 284 :
 Disease : 1 month salary or ½ month salary for every year
of service, whichever is higher.

3. Even if an EE resigns, he shall be given a separation pay if there


is a company policy to that effect. (Philoil vs. Ministry of Labor)

4. 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.e. A was found to have
demanded and received money in consideration for promise to
facilitate approval of telephone line application. (Nasipit Lumber vs.
NLRC)

5. 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, should
be such, that they are so compelling and so serious in character,
that the continued employment has become inconsistent with
peace and tranquility which is an ideal atmosphere in every
workplace. (Sibal vs. Notre Dame) This is particularly true when the
position the EE is occupying is a position involving trust and
confidence. (Alcantara)

C. COMPUTATION of SEPARATION PAY

Includes not just the basic salary but also the regular allowances the
EE has been receiving. (Planters Products vs. NLRC) However, commissions
are not included in such base figure. (Soriano vs. NLRC)

D. EFFECT- RECEIPT

EE’s who received their separation pay are not barred from contesting
the legality of their dismissal. The acceptance of those would not
amount to estoppel. (San Miguel vs. Javate)

Backwages
107

1. Backwages in general are granted on grounds of equity which a


worker has lost due to his illegal dismissal. (Torillo vs. Leogrardo) As
a general rule, 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. (Reyes vs. Minister of Labor) While generally an order of
reinstatement carries with it an award of backwages, the court
may not only mitigate, but also absolve the ER from liability fro
backwages where good faith is evident. (Durabilt vs. NLRC)

2. 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.” (Torillo vs. Leogardo) Backwages represent
compensation that should be earned but not controlled because
of the unjust dismissal. (Lim vs. NLRC) The basis of computing the
two are different, the 1st being usually the length of the EE’s
service and the 2nd the actual period when he was lawfully
prevented from working. (Id.)

A. COMPUTATION OF BACKWAGES

1. Art. 279 : An EE who is unjustly dismissed from work shall be


entitled to full backwages, inclusive of allowances, 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.

2. 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. (Lantion vs.
GAUF)

Reinstatement
1. Reinstatement is a restoration to a state which one has been
removed or separated. It is the turn to the position from which he
was removed and assuming again the functions of the office
already held. Reinstatement presupposes that the previous
position from which one had been removed still exists, or that
there is an unfilled position more or less of a similar nature as
the one previously occupied by EE’ (NATU vs. Secretary of Labor)

2. An ER has 2 options in order for him to comply with an order of


reinstatement, which is immediately executory, even pending
appeal, firstly, he can admit the dismissed EE back worth 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. Secondly, he can reinstate the EE
merely in the payroll. (Medina vs. CBS)

3. The decision of the labor arbiter reinstating a dismissed EE is


immediately executory even while the case is brought up on
appeal. (Art. 223) In authorizing this, the law itself has laid
down a compassionate policy which once more vivifies and
enhances the provisions of the Constitution. (Aria vs. NLRC)
108

4. Reinstatement is not self-executing. Payroll reinstatement or


actual reinstatement needs the issuance of a writ of execution.
(Maranao Hotel vs. NLRC)

5. What if reinstatement is not prayed for in the case before the


labor arbiter. Is the labor arbiter allowed to grant reinstatement?

No. The EE will not be reinstated if he did not pray for


reinstatement. (Labor vs. NLRC) But an earlier case, (General Baptist
Colloge vs. NLRC) says that EE is entitled to reinstatement although
he failed to specifically pray for the same. The Labor case is a later
case.

6. After a finding that the dismissal of G, the manager of Dunkin


Donuts violated procedural due process. G asked that he be
reinstated. The company refused on the ground of loss of
confidence of G. Is the refusal valid?

Yes. G held a sensitive position. The case left both parties with less
than full trust and faith in each other. He should be paid severance
compensation in lieu of reinstatement. (Golden Donuts vs. NLRC)

23.6 Termination by EE and Suspension of Operation

Termination by EE – Just Causes


Art. 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. Serious insults by the ER and or his representative on the honor
and person of the EE;
2. Ihuman and unbreakable Treatment accorded the EE by the ER
or his representative;
3. Commission of a crime or offense or his representative against
• the person of the EE
• or any immediate members of his family, and
• Analogous cases.

Without Just Cause – Requisites


Art. 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. The ER upon whom no such notice has been served may hold
the EE liable for damages.

A. RESIGNATION

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, then he has no other choice but to
disassociate himself from his employment.” The ER has no control
over resignation and so, in order to ensure that no disruption of work
would be involved by reason of 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.
Resignation once accepted and being the sole act of the EE may not be
withdrawn without the consent of the ER. ( Intertrod Maritime vs. NLRC)
109

B. CONSTRUCTIVE DISCHARGE

1. A constructive discharge is a quitting because continued


employment is rendered impossible, unreasonable or unlikely;
as, an offer involving a demotion in rank and diminution in pay.
(Philippine Japan Active Carbon vs. NLRC) This is not a case of
voluntary resignation. It is in the nature of a contrivance to effect
to dismissal without cause. (Rizal Memorial vs. NLRC)

2. Z was hired as a production recorder by a tobacco company.


After 14 years of occupying the position, she was demoted to
picker by reason of inefficiency due to alleged frequent mistakes
in her report. Z refused to report for work and filed a complaint
for illegal dismissal. Was the dismissal justified?

No. The management based its action merely on communications


between officers of the company. She was not notified in advance of
the company’s actions. The demotion done in bad faith constitute
constructive dismissal.

Suspension of Operations
1. Art. 286 : The bona fide suspension of the operation of a
business or undertaking for a period not exceeding 6 months, or
the fulfillment by the EE of a military or civic duty shall not
terminate employment. In all such cases, 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.

2. It is settled that when the bona fide suspension of operations of a


business undertaking exceed 6 months, then the worker’s
employment shall be deemed terminated. (Lucky Textile vs. NLRC)

Section 24. Retirement

Art. 287 : Any EE may be retired upon reaching the retirement age
established in the CBA or other applicable employment contract.

In case of retirement, 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, however, That
an EE’s retirement benefits under any CBA and other agreements shall
not be less than those provided therein.

In the absence of a retirement plan or agreement providing for


retirement benefits of EE’s in the establishment, an EE upon reaching
the age of 60 years or more, but not beyond 65 years which is hereby
declared the compulsory retirement age, who has served at least 5
years in the said establishment, may retire and shall be entitled to
retirement pay equivalent to at least ½ month salary for every year of
service, a fraction of at least 6 months being considered as 1 whole
year.

Unless the parties provide for broader inclusions, the term ½


month salary shall mean 15 days plus 1/12th of the 13th month pay and
110

the cash equivalent of not more than 5 days of service incentive


leaves.

Retail, service and agricultural establishments or operations


employing not more than 10 EE’s or workers are exempted from the
coverage of this provision.

Violation of this provision is hereby declared unlawful and subject


to the penal provisions under Art. 288 of this Code.

Obligation
1. 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. (Llora Motors vs. Drilon)

2. Entitlement of EE’s to retirement benefits must be specifically


granted under existing laws, a CBA or employment contract or an
established EE policy. (GVM vs. NLRC)

Benefit
1. Retirement benefits are intended to help the EE enjoy the
remaining years of his life, lessening the burden of worrying for
his financial support, and are a form of reward for his loyalty and
service to the ER. (Aquino vs. NLRC)

2. The CBA between a university and its faculty members provided


that in case of unusual circumstances, faculty members whose
services are terminated shall be granted retirement benefits. Are
faculty members affected by an unusual circumstance, such a
phase-out, and who are given separation pay pursuant to law
also entitled to retirement benefits?

Yes. 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. Separation 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. (UE vs. Minister of Labor)

PART II
SOCIAL SECURITY

25. 1 Social Security Law (SSL) RA 1161 (as amended by RA 8282)

Section 1, SSL : The Act shall be known as the Social Security Act of
1997.

25.2 Policy of the State

1. Section 2, SSL : It is a policy of the State to establish, develop,


promote and perfect a
 promote social justice and
 provide meaningful protection to members and their
beneficiaries against the hazardous of disability, sickness,
111

maternity, old age, death, and other contingencies


resulting in loss of income or financial burden.

2. The law imposes upon ER’s and EE’s the obligation to become
members of and make contributions to the Social Security
System. Is such a legal imposition valid and constitutional?

Membership in the SSS is not the result of a bilateral, consensual


agreement where the rights and obligations of the parties are
defined by and the subject to their will. The law requires compulsory
coverage of ER’s and EE’s, designed to provide security to the
working men. Membership in the SSS is, therefore, in compliance
with a lawful exercise of the police power of the State, to which the
principle of non-impairment of the obligation of contract is not a
proper defense. (PBM vs. SSS)

25.3 Definitions

ER
1. Section 8, SSL : “ER” – any person, natural or juridical,
domestic or foreign, who carries on in the Philippines any trade,
business industry, undertaking or activity of any kind and uses
the services of another person who is under his orders as regards
the employment.

Self –employed – is both ER and EE at the same time.

2. What ER’s are exempted from the SSS Law? Government


and any of its political subdivisions, branches or
instrumentalities, including GOCC’s controlled by the
government.

EE
Section 8, 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.

Dependent
1. Section 8, SSL : Legal spouse entitled by law to from member
to receive support.
Child :
 legitimate
 legitimated
 legally adopted
 illegitimate
 who is unmarried, and not gainfully
employed and not reached 21 or over 21
is congenitally or while still minor
permanently incapacitated and incapable
of self-support, physically or mentally.
Parent: Who is receiving regular support from member.

Beneficiaries
A. PRIMARY
1. Sec. 8, SSL :
112

 Dependent spouse – until remarriage


 Dependent legitimate, legitimated or legally adopted and
illegitimate children – provided that the illegitimate
children shall be entitled to 50% of the share of the
legitimate, legitimated and legally adopted children.

2. After 4 years of marriage, the spouses Salmonte broke up. The


wife left the conjugal home. Thereafter, the husband V lived with
another woman. When V died, who is entitled to his death
benefits?

Any legitimate children of V and illegitimate children (50% of the


share of the legitimate children). The wife of V is not entitled since
she does not qualify anymore as beneficiary since she is not
dependent upon the husband. (Salmonte vs. Salmonte)

B. SECONDARY

Sec. 8
 Dependent parents

C. OTHERS

1. Sec. 8 : Absent primary and secondary beneficiaries any other


person designated be members as secondary beneficiary.

2. S, a bachelor dies. His death benefits are claimed by L, his


girlfriend whom he designated as beneficiary. The claim is
contested by V, S’ brother. Who is preferred?

L, V is not among the primary and secondary beneficiaries provided


under the law. Thus, L, the designated beneficiary is preferred.
(Alcantara)

3. E. a widower, designated M as his beneficiary. The unemployed


married children of E contests the payment of death benefits to
M. Is the contention valid?

No. Eddie’s legitimate children are not considered dependents


since they are already married. (Alcantara)

25.4 Coverage

A. COMPULSORY

I. Enumerate the kinds of employment under compulsory


coverage under the SSL:
1. All EE’s not over 60 years of age on date of employment and
ER’s on 1st day of operation. (Sec. 9 and 10, SSL)

2. Self-employed as determined by the commission but not limited


to self-employed professionals; partners and single proprietors of
businesses, actors, actresses, directors, scriptwriters, news
correspondents who are not EE’s; professional athletes, coaches,
113

trainers, and jockeys and individual farmers and fisherman.


(Sec. 9, SSL)

II. Enumerate the kinds of employment which are excepted


from compulsory coverage under the SSL?
1. Employment purely casual and not for the purpose of occupation
or business of the ER. (Sec. 8, SSL)

2. Service performed on or in connection with alien vessel if EE


employed when such vessel is outside of the Philippines. (Id.)

3. EE’s of the Philippine government, instrumentality or agency


thereof. (Id.)

4. Service performed in the employ of a foreign government, or


international organizations or wholly-owned instrumentality. (Id.)

5. Services performed by temporary EE’s excluded by SSS


regulation. (Id.)

6. Domestic helpers who are 60 years of age and below with a


monthly income of not less than P1,000.00 on the date of their
employment. (Sec. 9)

7. Individual farmers and fishermen under SSS rules and


regulations. (Id.)

III. As sacristan in the Catholic Church, B cleaned the premises of the


church, tolled its bells, and assisted the priests in the masses and
other church services. In consideration of these services, he received
5% of the monthly income of the church. Is B subject to compulsory
coverage?

Yes. He is considered an EE. The Archbishop as corporation sole, to


whom a share of the income or collection is sent, is considered his ER.
(Bascuna vs. Roman Catholic Archbishop)

B. VOLUNTARY

Enumerate the kinds of employment under the SSL?


1. Filipinos recruited by foreign ER’s for employment abroad.
(Section 9, SSL)

2. EE separated from employment (Sec. 11, SSL)

3. Spouse who devote full time managing household and family


affairs unless specifically mandatorily covered. (Sec. 9, SSL)

C. BY ARRANGEMENT

When can coverage be by arrangement? Any foreign government,


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. (Sec. 8, SSL)
114

25.5 Effect of Separation from Employment or Interruption of


Business of Professional Income

I. 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.
2. EE credited with all contributions paid and entitled benefits
according to SSL.
3. EE may continue to pay total contribution to maintain right to full
benefit. (Sec. 11, SSL)

II. What are the effects if self-employed realizes no


professional or business income?
1. He shall not be required to pay contributions.
2. He may be allowed to continue to pay contributions under the
same rules as a separated EE. (Sec. 11, SSL)

III. After working for 5 years, J was fired without cause. His dismissal
effected him so much that 2 months after he suffered a stroke. Is he
entitled to disability benefits at the time of his stroke?

Yes. Although an EE is separated from service and has ceased to pay


premiums, he shall be entitled to contributions and to benefits
available under the law. As J was a member of SSS, he remained an
SSS member. (Alcantara)

25.6 Reporting Requirements

1. Sec. 24, SSL : Each ER shall immediately report EE’s names,


ages, civil status, occupations, salaries and dependents.

2. Sec. 24-A : Each covered self-employed shall within 30 days


from the 1st day he started practice register and report to the
SSS his name, age, civil status, occupation, average monthly net
income and his dependents.

25.7 Funding

I. What are the different sources of funding for the SSS?


1. EE’ s contribution : The ER shall deduct and withhold from
such EE’s monthly salary, wage, compensation or earnings, the
EE’s contribution. (Sec. 18) [“Compensation” – an actual
remuneration as well as cash value of any remuneration paid in
any medium other than cash. (Sec. 8)]

2. ER’s contribution : ER shall pay, with respect to such covered


EE, the ER’s contribution in accordance with the schedule
indicated in Section 18 of this Act.

3. Government contributions : Appropriation of necessary sums


to meet the estimated expenses of the SSS for each ensuing
year.

4. Contributions from those voluntarily covered by the SSS.


115

II. The funds contributed to the System belong to the members who
will receive benefits, as a matter of right, whenever the hazards
provided by the law occur. (CMS Estate vs. SSS)

Effects of Non-remittance

Sec. 22, 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.

25. 8 Benefits

I. What are the different types of benefits under the SSL?


1. Monthly pension. (Sec. 12, SSL)
 Minimum pension of P1,200.00 for members with at least
10 credited years of service and P2,400.00 for those with
20 credited years of service.

2. Dependents pension (Sec. 12-A, SSL)

3. Retirement (Sec. 12-B, SSL)


 paid at least 120 monthly contributions
 monthly pension for as long as he lives
4. Death (Sec. 13, SSL)
 paid at least 36 monthly contributions
 lump sum of 36 monthly pensions

5. Permanent disability (Sec. 13-A, SSL)

6. Funeral (Sec. 13-B, SSL)

7. Sickness (Sec. 14, SSL)


 payment of at least 3 monthly contributions in the 12-
month period immediately preceding the sickness.
 Confinement for more than 3 days
 Notice to ER within 5 calendar days of sickness
 Exhaustion of sick leaves with full pay.

8. Maternity (Sec. 14-A, 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 1st 4 deliveries or miscarriages.

 These are all tax-exempt.

II. Section 2, Paternity Leave Act of 1995: Notwithstanding any


law, rules and regulations on the contrary, 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 1st four deliveries of the legitimate spouse with whom
he is cohabiting. The male EE applying for paternity leave shall notify
116

his ER of the pregnancy of his legitimate spouse and the expected date
of such delivery.

III. On his way home from work, R went to a movie house to watch. He
is stabbed by an unknown assailant while watching. The SSS denied his
claims on the ground that the injury is not work-connected. Is the
denial valid?

No. It is not necessary for the enjoyment of benefits that there be


casual connection between the injury and the work of the EE. What is
required is membership in the SSS.

Prescription Periods

Art. 1144 : 10 years from the time the right of action accrues since
this is an obligation created by law.

Benefit Protection

1. Sec. 15, SSL : Benefits are not transferable. No power of


attorney or other documents executed as beneficiary in favor of
any agent, attorney or other person for the collection of their
behalf shall be recognized except which beneficiary is physically
unable to collect.
2. Sec. 15, 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.
 General Rule : He is not entitled to benefit.
 Exception: Social Security Commission may authorize
payment where the best interest of the SSS will be served.

3. Sec. 16, SSL : All benefit payments made by SSS shall be


exempt from all kinds of taxes, fees or charges and shall not be
liable to attachment, garnishments, levy or seizures by or under
any legal or equitable process whatsoever, either before or after
receipt except to pay any debt of member to SSS.

4. Sec. 17, SSL : No fees shall be payable to agent, attorney, other


person-in-charge of preparation, filing or pursuing any claim and
any stipulation to the contrary is void. Members of 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, any stipulation of the contrary shall be null and void.

25.9 Dispute Settlement

Jurisdiction and Period of Dispute Settlement

Sec. 5 : Disputes involving coverage, benefits, contribution, penalties


and any related matter shall be decided by the Social Security
Commission or duly designated member, or duly authorized hearing
officers and should be decided within the mandatory period of 20
calendar days from submission. Decision shall be final 15 days after
date of notification.
117

Execution of Decisions

Sec. 5, : The Commission motu proprio or on motion of any interest


party may issue order of execution of decision after same is final and
executory.

Appeal

Sec. 5 : Appeal to CA on law and facts. Appeal to the SC on pure


questions of law.

Section 26. Workmen’s Compensation – EE’s Compensation and


State Insurance Fund (ECSIF)

26.1 Law

Policy Objective

Art. 166 : To promote and develop a tax exempt EE’s compensation


program whereby EE’s and their dependents, in the event of work-
connected disability or death, may secure adequate income benefit,
and medical or related benefit.

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; the statute is a remedial one,
to compensate reasonably those who are injured while in the
employment of others, as part of the natural, necessary cost of
production. (Azucena)

Nature of the State Insurance Fund


1. The law establishes a state insurance fund built by the
contribution of ER’s based on the salaries of their EE’s. The
injured worker does not have to litigate his right to
compensation. The worker simply files a claim with the ECC. The
payment of benefits is more prompt. The cost of administration
low. (Sarmiento vs. ECC)

2. Give the characteristics of the EE’s Compensation


Program
 Tax exempt.
 Designed to ensure promptitude in cases of work-
connected disability or death in the award of benefits.
 Funded by monthly contributions of all covered ER’s.
 Compulsory on all ER’s and their EE’s not over 60 years of
age.
 Benefits are exclusive and in place of all other liabilities of
the ER to the EE.
 Has its own adjudicative machinery with original exclusive
jurisdiction on any matter related thereto, independent of
other tribunals except the SC. (SMC vs. NLRC)

Interpretation
118

As agent charged by the law to implement social justice guaranteed


and secured by the Constitution, the ECC should adopt a liberal
attitude in favor of the EE in deciding claims for compensability,
especially where there is some basis in the facts inferring a work
connection to the accident. (Lazo vs. ECC)

26.2 Definitions

ER
Art. 266 : Any person, natural or juridical, employing the services of
an EE.

Dependent

What are the dependents under the ECSIF?


1. Legitimate
2. Legitimated
3. Acknowledged natural child
 who is unmarried, and not gainfully employed, and not
over 21 years of age, or over 21 provided he is incapable
of self-support due to physical or mental defect which is
congenital or acquired during minority.
4. Spouse : Legitimate and living with the EE.
5. Parents : of EE wholly dependent upon EE for regular support.
(Art. 166)

Beneficiaries
Who are the beneficiaries under the ECSIF?
1. Primary
a. Spouse – dependent spouse until remarriage
b. Children – dependent; 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.
2. Secondary
a. Parents – dependent subject to restrictions imposed on
dependent children.
b. Children – illegitimate subject to restrictions imposed on
dependent children
c. Legitimate descendants.

26.3 Compensability

1. What is an injury? Harmful change in the human organism


from any accident arising out of and in the course of the
employment. (Art. 167)

2. If a soldier is killed by an accidental discharge of his companion’s


rifle while an overnight pass to a rebel infested area, is the death
of a soldier compensable?

Yes. 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. (Hinoguin vs. ECC)
119

3. 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. The EE must have been injured at the place where his work
requires him to be.
b. The EE must have been performing his official functions.
c. If the injury is sustained elsewhere, the EE must have been
executing an order for the ER. (Sec. 1, Rule III, Book I,
IRR’s)

Proximate Cause

The right to compensation extends to disability due to disease


supervening upon and proximately and naturally resulting from a
compensable injury. Where the primary injury is shown to have arisen
in the course of employment, unless it is the result of an independent
intervening cause attributable to claimant’s own negligence or
misconduct i.e. condition of classroom floor caused Belarmino to slip
and fall and suffer injury as a result, hence all medical consequences
flowing from it, the premature delivery of her baby, and her death are
compensable. (Belarmino vs. ECC)

Going to or Coming from Work Rule

1. What is the “going and coming rule”?

In the absence of special circumstances, an EE injured while going


to or coming from his place of work is excluded from the benefits of
workmen’s compensation acts, except:

a. Where the EE is proceeding to or from his work on the


premises of the ER.

b. 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.

c. Where the EE is charged, while on his way to or from his


place of employment or at his home, or during his
employment with some duty or special errand connected
with his employment.

d. Where the ER as an incident of the employment provides


the means of transportation to and from the place of
employment.

2. What is the ingress or egress/proximity rule?

Employment includes not only the actual doing of the work, 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. As a
general rule, employment may be said to begin when the EE
reaches the entrance to the ER’s premises where the work is to be
120

done; 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. (Iloilo Dock vs. 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. Generally, such incidents of work include:

1. Acts of personal ministration for the comfort and convenience of


the EE i.e. answering a call of nature.

2. Acts for the personal benefit of the ER i.e. special errand rule.

3. Acts done to further the goodwill of the business.

4. Slight deviations from work, from curiosity or otherwise.

5. Acts in emergencies i.e. death of an EE while attempting to


rescue a co-EE (Azucena)

Living, Boarding, Lodging on Premises of ER, 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. (Azucena)

While Travelling

Compensation depends upon whether the injury results from a risk


inherent in the nature of the employment, or reasonably incidental
incidental thereto, 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, or whether he was
authorized or required by such contract to be. (Azucena)

Assault

If there is a causal relation between the assault and the employment,


the assault is compensable. (Iloilo Dock vs. WCC)

Sickness Defined; Occupation or Compensable Disease

1. Define sickness?
Any illness
a. definitely accepted as an occupational disease listed by
the Commission, or
b. any illness caused by employment subject to proof that the
risk of contracting the same is increased by working
conditions. (Art. 167)
121

If the illness are not occupational diseases, the claimant must


present proof that he contracted them in the course of his
employment. (Galanida vs. ECC)

2. 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. (Menez vs. ECC)

A. THEORY OF THE INCREASED RISK

If an ailment is not included in the list of occupational diseases as


drawn up by the Commission, the claimant has the burden of proving
that the nature of the work increased the risk of contracting the
disease. (Dabatian vs. GSIS) To establish compensability under the
increased risk theory, the claimant must show proof of reasonable
work-connection, not necessarily direct causal relation. The degree of
proof is merely substantial evidence as will support a decision, or clear
and convincing evidence. (Narazo vs. ECC)

A.1 Specific Illnesses

Give examples of diseases which are not listed as occupational


diseases:
1. Peptic ulcer
2. Cancer. But in some cases, it is
3. Bangungot
4. Incomplete abortion
5. Schistomiasis
6. Rheumatoid Arthritis
7. Adenocarcinoma
8. Cirrhosis of the liver
9. Prolapsed uterus.

26.4 Coverage and Liability

Compulsory Coverage

Art. 168 : All ER’s and their EE’s not over 60 years of age, provided,
an EE who is over 60 and paying contribution to qualify for retirement
or life insurance benefits shall be subject to compulsory coverage.

Foreign Employment

Art. 170 : The Commission shall ensure adequate coverage of Filipino


EE’s employed abroad. Compulsory coverage of the ER shall take
effect on the 1st day of operation, and that of the EE on the date of
employment.

Exclusions

1. Art. 172 : The State Insurance Fund shall be liable for


compensation to the EE or his dependents, except when the
disability or death was occasioned by the:
122

a. EE’s intoxication,
b. Willful intention to injure or kill himself or another,
c. Notorious negligence, or
d. Otherwise provided under this Title.

2. What defenses may be interposed by the ECSIF against a


claim for compensation made by a covered EE?

a. The injury is not work-connected or the sickness is not


occupational.

b. The disability or death was occasioned by the EE’s


intoxication, willful intention to injure or kill himself or
another, or his notorious negligence. (Art. 172)

c. No notice of sickness, injury or death was given by ER. (Art.


206)

d. The claim was filed beyond 3 years from time of cause of


action. (Art. 201)

A. 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. Thus, intoxication which does not incapacitate the EE from
following his occupation is not sufficient to defeat the recovery of
compensation, although intoxication may be a contributory cause to
his injury. 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. (Nitura vs. ECC)

B. SELF-INFLICTED INJURIES

According to American authorities, suicide is compensable in the


following cases:
1. When it results from insanity from compensable work injury or
disease.
2. When it occurs during a delirium resulting from compensable
disease. (NAESS Shipping vs. NLRC)

C. NOTORIOUS NEGLIGENCE

Notorious negligence has been defined as something more than mere


or simple negligence or contributory negligence; it signifies a
deliberate act of the EE to disregard his own personal safety.
Disobedience to rules, orders, and/or prohibition does not in itself
constitute notorious negligence, if no intention can be attributed to the
injured to end his life. (Nitura vs. ECC)

26.5 Funding

What are the sources of funding of the ECSIF? Contribution 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
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EE’s shall be null and void. (Art. 183) EE’s do not have any
contribution. The government accepts general responsibility for the
solvency of the ECSIF. Any deficiency will be covered by the
supplemental appropriations from the National Government. (Art. 184)

Effects of Non-Remittance

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.

26.6 Benefits

What are the different types of benefits under the ECSIF?


1. Medical benefits – consisting of medical services and
rehabilitation services. (Art. 185)
2. Disability –
a. Temporary total (Art. 191)
b. Temporary permanent (Art. 192)
c. Partial permanent (Art. 193)
3. Death and Funeral – minimum death benefit shall be P15,
000.00 and funeral benefit shall be P8,000.00 (Art. 194)

All the benefits are tax-exempt.

Benefit Protection

Art. 175 : Except as otherwise provided under this Title, no contract


,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. Existing medical services being
provided by the ER shall be maintained and continued to be enjoyed by
their EE’s.

Prescriptive Periods

Art. 201 : 3 years from the time the cause of action accrued.

Exclusivity of Benefits

1. Art. 173 : Liability of the ECSIF shall be exclusive and in place of


other liabilities of ER to EE, dependents or anyone otherwise
entitled to receive damages on their behalf. The payment of
compensation shall not bar the recovery of benefit provided in
other laws i.e. payment bars recovery for damages arising from
the death of the member.

2. As a result of a cave-in, several miners were buried alive. The


heirs filed an action with the RTC for damages against the
company on grounds of breach of contract. The company moved
to dismiss the suit on grounds of exclusive liability of the ECSIF.
Is the motion meritorious?

No. The EE or his heirs has the right of selection or choice of action.
He cannot however pursue both courses of action simultaneously.
(Floresca vs. Philex)
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Liability of Third Parties

Art. 174 : When disability or death is caused by circumstances


creating a legal liability against a 3rd party, the system shall still pay for
the benefits. However, the system shall be subrogated to the rights of
the disabled EE or dependents in case of death in accordance with the
general law. Where the system recovers damages in excess shall be
delivered to the disabled EE or other persons entitled, after deducting
the costs of the proceedings and expenses of the system.

Benefit Protection

1. Art. 198 : As a general rule, no claim for compensation is


transferable or liable to tax, attachment, garnishment, levy or
seizure by or under any process whatsoever, either before or
after receipt, except if it is to pay any debt of the EE to the
system.
2. Art. 203 : No agent, attorney, 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.
The retention or deduction of any amount from any benefit for
the payment of such fee or such services is prohibited.

26.7 Dispute Settlement

Art. 180 : Government service insurance system or the social security


system shall have original and exclusive jurisdiction to settle any
dispute with respect to coverage, entitlement of benefits, collection of
contributions and penalties and other related matters.

Appeal

Art. 181 : Decisions or orders shall be reviewable by the SC on


question of law.

Section 27: Government Service Insurance System

27. 1 Revised Government Service Insurance Act of 1997

27.2 Definitions

ER

Sec. 2, GSIS Act of 1997 : The ER includes :


1. The national government, its political subdivisions, branches,
agencies or instrumentalities.
2. GOCC’s.
3. Financial institutions with original charters.
4. Constitutional commissions and the judiciary.

EE
Sec. 2, GSIS Act of 1997 : EE shall include :
1. Any person receiving compensation while in the service of ER
whether by election, or appointment, irrespective of the status of
appointment.
2. Barangay officials.
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3. Sanggunian officials.

Dependents

Who are considered dependents under the GSIS Law?


1. Child
a. Legitimate.
b. Legitimated.
c. Legally adopted.
d. Illegitimate.
 who is unmarried, not gainfully employed, and not
over the age of majority, or is over the age of
majority but is incapacitated and incapable of self-
support due to mental or physical defect, acquired
prior to age of majority.
2. Spouse – legitimate and dependent for support upon member or
pensioner.
3. Parents – legitimate parent dependent upon member for support.
(Sec. 2, GSIS Act of 1997)

Beneficiaries
Who are the beneficiaries under the GSIS Law?
1. Primary :
a. Legal dependent spouse until remarriage.
b. Dependent children.
2. Secondary :
a. Dependent parents.
b. Legitimate descendants subject to restrictions of
dependent children.
27.3 Compulsory Coverage

Sec. 3, GSIS Act of 1997 : Coverage shall be compulsory for all EE’s
receiving compensation who have not reached compulsory retirement
age, irrespective of the employment status.

27.4 Effect of Separation of Employment

Sec. 4, GSIS Act of 1997 : A member separated from the service


shall continue to be a member and entitled to whatever benefits he
has qualified, in event of any contingency compensable under this Act.

27.5 Reporting Requirements

Sec. 6, GSIS Act of 1997 : The ER shall report to the GSIS the names
of all EE’s, corresponding employment status, positions, salaries and
other pertinent information.

27.6 Funding

What are the different sources of funding of the GSIS?


1. ER and member contributions. (Sec. 5, GSIS Act of 1997)
2. Government guarantees the fulfillment of the obligations of the
GSIS to members. (Sec. 8, GSIS Act of 1997)

27.7 Benefits
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What are the benefits provided by the GSIS?


1. All members
a. Lifetime insurance.
b. Retirement – at least 60 years of age, and 15 years of
service.
 however, EE is allowed to continue to work to
complete the 15-year service requirement. (Cana vs.
CSC)
2. Disability – Provided :
 he has paid at least 36 monthly contributions
within the 5-year period immediately preceding his
disability, or he has paid a total of at least 180
monthly contributions prior to his disability; and his
disability is not compensable under any other law.

a. Survivorship - dependent spouse shall be entitled to


survivorship benefits for life or until she remarries.
Dependent children are entitled to benefit while still
minors and unmarried.

b. Separation

c. Unemployment.

3. Judiciary – Life insurance only. (Sec. 3, GSIS Act of 1997)

*** All are tax exempt.

Prescriptive Period

Sec. 28, GSIS Act of 1997 : All claims, except for life and
retirement benefits shall prescribed within 4 years from date of
contingency.

Benefit Protection

Sec. 39, GSIS Act of 1997 :


1. All benefits paid shall be exempt from taxes.
2. All benefits shall be exempt from attachment, garnishment,
executions, levy or other processes, issued by courts, quasi-
judicial agencies or administrative bodies including COA
disallowances and all forms of financial obligations of members,
including pecuniary accountability arising from or caused or
occasioned by exercise of performance or official functions or
duties, or incurred relative to or in connection with his position or
work except when monetary liability, contractual or otherwise, is
in favor of the GSIS.

27.8 Dispute Settlement

Sec. 30, 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. The Board may
designate any member of the Board or official of the GSIS who is a
lawyer as hearing officer to receive evidence, make findings of fact and
submit recommendations.
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Appeals

Sec. 31, 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. Appeal shall not stay orders unless stayed by orders of the
Board, CA or the SC.

Section 28. National Health Insurance Act of 1995

28.1 Law – National Health Insurance Act of 1995 – RA 7875

28.2 Purposes/Objectives

1. Section 2, National Health Insurance Act : The State shall


adopt an integrated and comprehensive approach to health
development which shall endeavor to make essential goods,
health and other social services available to all the people at
affordable cost.

(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.

2. Section 3, National Health Insurance Act : This Act seeks to :


a. Provide all citizens of the Philippines with the mechanism
to gain financial access to health services;
b. Create the National Health Insurance Program, hereinafter
referred to as the Program to serve as the means to help
the people pay for health care services; and
c. Establish the Philippine Health Insurance Corporation, that
will administer the Program at central and local levels.

3. Section 5, National Health Insurance Act : There is hereby


created the National Health Insurance Program which shall
provide health insurance coverage and ensure affordable,
acceptable, available and accessible health care services for all
the citizens of the Philippines, in accordance with the policies
and specific provisions of this Act. 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. 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. The
Program shall include a sustainable system of the funds
constitution, collection, 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.

4. The Program shall be limited to:


a. paying for the utilization of health services by covered
beneficiaries or
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b. to purchasing health services in behalf of such


beneficiaries.

It shall be prohibited from:


c. providing health care directly
d. from buying and dispensing drugs and pharmaceuticals,
e. from employing physicians and other professionals for the
purpose of directly rendering care, and from
f. owning or investing in health care facilities.

28.3 Coverage
1. Section 7, National Health Insurance Act : All citizens of the
Philippines shall be covered, provided, 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.

2. Who are the legal dependents of a member?


a. Legitimate spouse who is not a member.
b. Unmarried and unemployed legitimate, legitimated,
illegitimate, acknowledged children, legally adopted or
stepchildren
 below 21 years of age or 2 years old and above but
suffering from congenital disability, either physical or
mental, or any disability acquired that renders them totally
dependent on member for support.
c. Parents who are over 60 years of age whose monthly
income is below an amount to be determined by the
Corporation. (Sec. 4, National Health Insurance Act)

28.4 Funding
What are the sources of funding of the NHIF?
1. Members contributions.
2. Current balance of the Health Insurance Funds of the SSS and
the GSIS
3. Other appropriations earmarked by the national and local
governments purposely for the implementation of the Program.
4. Subsequent appropriations.
5. Donations and grant-in-aid.
6. Accruals.
7. Contributions by LGU’s for indigent members.

28.5 Health Care Providers

I. What are the minimum accreditation requirements of health


care providers
1. Human resource, equipment and physical structure in conformity
with the standards of the relevant facility, as determined by the
Dept. of Health.
2. Acceptance of formal program of quality assurance and
utilization review.
3. Acceptance of the payment mechanisms specified in the
following section.
4. Adoption of referral protocols and health resources sharing
arrangements.
129

5. Recognition of the right of patients.


6. Acceptance of information system requirements and regular
transfer of information.

II. Give the categories of personal health services to be


granted under the NHIP :
1. Inpatient hospital care i.e. room and board services of health
care professionals.
2. Outpatient care i.e. diagnostic, laboratory and other medical
examinations services and personal preventive services.
3. Emergency and transfer services.
4. Such other health services – that the Corporation shall determine
to be appropriate and cost-effective.

III. Give the services that are excluded :


1. Non-prescription drugs and devices.
2. Outpatient psychotherapy and counseling for mental disorders.
3. Drug and alcohol abuse or dependency treatment.
4. Cosmetic surgery.
5. Home and rehabilitation services.
6. Optometric Services.
7. Normal Obstetrical delivery. (Sec. 11, National Health Insurance
Act)

28.6 Grievance and Appeal

I. Section 40, National Health Insurance Act : The following acts


shall constitute valid grounds for grievance action:
1. Violation of the rights of patients.
2. Willful Neglect of duties of program implementers that results in
the loss or non-enjoyment of benefits by members or their
dependents.
3. Unjustifiable delay in actions or claims.
4. Delay in the processing of claims that extends beyond the period
agreed upon.
5. Any other Act or neglect that tends to undermine or defeat the
purposes of this Act. (VANUD)

II. Section 41, National Health Insurance Act : A member, his


dependent, or a health care provider may file a complaint for
grievance based on any of the above grounds, in accordance with the
following procedure :
1. A complaint for grievance must be filed with the Office which
shall rule on the complaint within 90 calendar days from receipt
thereof.

2. Appeals from Office decisions must be filed with the Board within
30 days from receipt of notice of dismissal or disallowance by the
Office.

3. The Office shall have no jurisdiction over any issue involving the
suspension or revocation of accreditation, the imposition of fines,
or the imposition of charges on members or their dependents in
case of revocation of their entitlement.
130

4. 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.

Section 29. CARL, RA 6657

1. Give the provisions of the 1987 Constitution of agrarian


reform?
 The State shall promote comprehensive rural development
and agrarian reform. (Sec. 21, Art. II, Const.)
 The State shall by law, undertake an agrarian reform
program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof.
To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress
may prescribe, taking into account ecological,
developmental and equity considerations, and subject to
the payment of just compensation. In determining
retention limits, the State shall respect the right of small
landowners. The State shall provide incentives of voluntary
land-sharing. (Sec. 4, Art. XIII, Const.)

2. Define agrarian reform.

Agrarian reform means the redistribution of lands regardless of


crops or fruits produced to farmers and regular farmworkers who
are landless, irrespective of tenurial arrangement, 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, such as
production or profit sharing, labor administration and distribution of
shares of stock, which will allow the beneficiaries to receive a just
share of the fruits of the lands they work. (Sec. 3, CARL)

3. Lands covered by the CARL.


 All alienable and disposable lands of the public domain
devoted to or suitable for agriculture. No reclassification of
forest or mineral lands to agriculture lands shall be
undertaken after the approval of this Act until Congress,
taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific
limits of the public domain.

 All lands of the public domain in excess of the specific


limits as determined by Congress in the preceding
paragraphs.

 All other lands owned by the Government devoted to or


suitable for agriculture; and

 All private lands devoted to or suitable for agriculture


regardless of the agricultural products raised or that can
be raised thereon. (Sec. 4, CARL)
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