You are on page 1of 61

SUN TZU NOTES

LABOR LAW
REVIEW
My Notes
AL L. BERONQUE, CPA
LABOR STANDARDS
I. THE APPLICABLE LAWS
PD 442 AS AMENDED
A decree instituting a labor code, thereby revising
and consolidating labor and social laws to afford
protection to labor, promote employment and
human resources development and ensure
industrial peace based on social justice.
Signed into law May 1, 197 and too! effect "
months after in accordance with Article # because
according to $ple, %the code was designed to be
a dynamic and growing body of laws which will
reflect continually the lessons of practical
application and e&perience.' As it happened, the
code was e&tensively amended even before it
went into effect on (ovember 1,197.
)oo! effect on (ovember 1, 197. Since then, the
*abor +ode has undergone several amendments.
)he most substantial amendment is ,A "71-.
.t is the law governing *abor Standards and
,elations.
Significance/ 0efore the effectivity of the labor
code, there was no provision on the terms and
conditions of employment.
CONCEPT OF LABOR
.n a general sense, a job, wor! or service.
.n a particular sense, it is the e&ertion of human
being by his mental or physical effort towards
production of goods or services.
)echnically, a wor!ing force or wor!ingmen.
THREE FIELDS OF LABOR LAWS
1. *A0$, S)A(1A,1S
Minimum terms and conditions fi&ed by law.
minimum terms, benefits and conditions of
employment which employees are legally entitled
to and employers must comply with.
)he minimum re2uirements prescribed by
e&isting laws, rules and regulations and other
issuances relating to wages, hours of wor!, cost
of living allowances and other monetary and
welfare benefits, including those set by
occupational safety and health ha3ards. 4Section
7, ,ule ., ,ules on the 1isposition of *abor
Standards +ases 5 September 1", 19677
8&. $vertime pay, night differential pay,
premium pay, minimum wage
0oo! .9.:
#. *A0$, ,8*A).$(S
,efers to the interactions between the employers and
employees or their representatives and the mechanism by
which the employment standards are negotiated, adjusted
and enforced.
Mar2ue3/ process the terms, benefits and conditions to
improve the same through collective bargaining or
negotiation.
;. S$+.A* A(1 <8*=A,8 *8>.S*A).$(S
*egislations that grant benefits which apply to wor!ers
who are unable to wor! on account of sic!ness or
disability or not at wor!.
,efers to a broader category of law that protects or
promotes the welfare of society or segments of it in
furtherance of social justice.
.ntended to substitute income
8&. Social Security Act, ,etirement *aw, ?hil@ealth
*A0$, S)A(1A,1S 5 employee is actually at wor!
S$+.A* A(1 <8*=A,8 *8>.S*A).$( 5 employee is not at
wor! or unable to wor!.
NEW TAX RELIEF LAW
Most recet soc!"# "$
%e#&"re #e'!s#"t!o
FOUR S(STEMS OF LABOR
1. S*A:8,A4not recogni3ed in the phils7
,efers to the e&traction of wor! or services from any
person by means of enticement, violence, intimidation or
threat, use of force or coercion, including deprivation of
freedom, abuse of authority or moral ascendancy, debt
bondage or deception. 41$ "-9B S#BB7
not recogni3ed in the ?hils
#. S8,=1$M4not recogni3ed in the phils7
8nforced labor of serfs on the fields of the landowners, in
return for protection and the right to wor! on their leased
fields.
A little better off than slavery.
;. A,).SA(S@.? $, .(18?8(18() +$(),A+)$,S@.?
4recogni3ed by *abor +ode7
)he same with modern independent contractorship
wherein an independent contractor is engaged in a
business separately distinct from the principal, the
performed job, wor! or service, and wor!s according to
his own means and methods, free from the control and
direction of the principal e&cept as to the results thereof.
A free person who offers his services to others subject to
nobodyCs will
. <A>8 SAS)8M 4recogni3ed by *abor +ode7
)he same with modern employer9employee system where
there is an employee under the control and supervision of
an employer as to the means, manner or method of which
the wor! is to be accomplished including the result thereof
and is paid for the wor! done in terms of wage.
A person offers his services to another under an
employment contract for which such service is paid by
wages.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
1 of 61
SUN TZU NOTES
OMNIBUS RULES "s ")e$e$ *+ DO NO. ,-
S.--/, DO NO. 4,0,1 S2,,1, "s ")e$e$ *+
DO NOS. 4,0A0,1, 4,0B0,1, 4,0C0,1 "$ 4,0C0
,2
@ave the force and effect of laws. ?rovided,
however, that these rules and issuances will not
e&pand the law or strip the law. $therwise, under
the rules on statutory construction, these will be
considered void.
)he 1$*8 is the lead agency in enforcing labor
laws and it possesses rule9ma!ing power in the
enforcement of the +ode.
0ut a rule or regulation that e&ceeds the
departmentCs rule9ma!ing authority is void. )he
rule9ma!ing power is e&ceeded when the
implementing rule changes, wittingly or
unwittingly, the content or meaning of the law
which the rule aims to implement. )he
implementing rule, on other words, must be
subordinate to the law itself.
8DAM?*8/ ?olicy .nstruction (o. -966 4issued by
former Sec. =ran!lin 1rilon7 has been declared void
by the Supreme +ourt because this has e&panded
Art. 6; of the *abor +ode on 8mployment of @ealth
?ersonnel by erroneously interpreting that health
employees are entitled to a %full wee!ly wage for 7
days' if they have completed the B9hourE-9day
wor!wee!.
SUPREME COURT DECISIONS
Article 8 CC.9 Fudicial decisions applying or
interpreting the laws or the +onstitution shall form
part of the legal system of the ?hilippines.
BASES AND LIMITATIONS IN THE ENACTMENT
OF LABOR LAWS
BASES
1. ?$*.+8 ?$<8,
.nherent power of the state to enact legislations
that may interfere with personal liberty or
property in order to promote the general welfare
of the people 4>eneral <elfare +lause7
+onsists of imposition of restraint upon liberty or
property and in order to foster the common
good.
>eneral welfare clause deemed written into the
employment contract.
?ower to regulate personal liberty or property
rights.
*abor +ode contains several provisions that affect
life and property.
8&ample/
Article 263 LC
4g7 <hen, in his opinion, there e&ists a labor dispute
causing or li!ely to cause a stri!e or loc!out in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify
the same to the +ommission for compulsory
arbitrationG
,eason/ S$*8 may compel the employer to admit
the employees and the employees to return to their
wor!.
#. S$+.A* FHS).+8
)he promotion of the welfare of all the people, the
adoption by the government of measures calculated to
insure economic stability of all the component elements of
society through the maintenance of proper economic and
social e2uilibrium in the interrelation of the members of
the community, constitutionally through the adoption of
measures legally justifiable, or e&tra9constitutionally
through the e&ercise of powers, underlying the e&ercise of
all governments on the time honored principle of %salus
populi est suprema le&'. 41r. Fose ?. *aurel7
)he law is geared towards the concern of labor because
our legislators reali3e that social and economic imbalance
between the employer and employee.
?hilippines is a signatory of .*$ +onvention 4.nternational
*abor $rgani3ation7
H( 1eclaration of @uman ,ights
;. ?,$)8+).$( )$ *A0$,
Article X! Section 3! "#8$ Constitution. )he State shall
afford full protection to labor, local and overseas, organi3ed
and unorgani3ed, and promote full employment and e2uality
of employment opportunities for all.
,eason/ 8mployer stands in a higher footing than the
employee because of economic dependence of the employee
on the employer and the greater supply of labor than the
demand of it.
LIMITATIONS
1. ($(9.M?A.,M8() +*AHS8
Article ! Section "%& (o law impairing the obligation of
contracts shall be passed.
+ongress could not pass laws which would impair the
obligations of the parties, however, the same can pass
laws to regulate the obligations and contracts.
May be impaired by the e&ercise of the state of police
power.
#. 8IHA* ?,$)8+).$( +*AHS8
Article ! Section "& (o person shall be deprived of life,
liberty, or property without due process of law, nor shall any
person be denied the e2ual protection of the laws.
.ndividuals similarly situated must be treated e2ually
under the; law.
82uality among e2uals
;. ?,$@.0.).$( A>A.(S) .(:$*H()A,A S8,:.)H18
A'(CLE ! Section "8)2*& (o involuntary servitude in any
form shall e&ist e&cept as a punishment for a crime whereof
the party shall have been duly convicted.
. 1H8 ?,$+8SS +*AHS8
T(PES OF LABOR LAW LE3ISLATION
1. ?,$)8+).:8
#. <8*=A,8 $, S$+.A*
;. 1.?*$MA).+
. A1M.(.S),A).:8
SOURCES OF LABOR LAWS
?,.MA,A
+onstitution
Statutes 4?1 #, (++, ,?+7
Fudicial decisions
AHD.*.A,A
1ecision of foreign courts
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
2 of 61
SUN TZU NOTES
)e&tboo!sEreviewers in labor law
$pinions of 1$*8
.,, issued by 1$*8
EFFECTI4IT( OF LABOR LAWS, RULES AND
RE3ULATIONS
1. ART. 5. Rules and regulations. - )he
1epartment of *abor and other government agencies
charged with the administration and enforcement of
this +ode or any of its parts shall promulgate the
necessary implementing rules and regulations. Such
rules and regulations shall become effective fifteen
41-7 days after announcement of their adoption in
newspapers of general circulation.
?ublication is indispensable. ,ules and
regulations are still valid even if no publication,
however, it is unenforceable.
2. ART. 2 NCC. *aws shall ta!e effect after fifteen
days following the completion of their publication
either in the +fficial ,a-ette, or in a newspaper of
general circulation in the ?hilippines, unless it is
otherwise provided. 4As amended by 8$ #BB7.
1. E.O. 2-2 A$)!!str"t!5e Co$e o& t6e
P6!#!77!es
Sec& "8& .hen La/s (a0e Effect& 1 *aws shall ta!e
effect after fifteen 41-7 days following the completion
of their publication in the $fficial >a3ette or in a
newspaper of general circulation, unless it is
otherwise provided.
Sec& "#& 2rospectivity& 1 *aws shall have prospective
effect unless the contrary is e&pressly provided.
Sec& 2%& nterpretation of La/s and Administrative
ssuances& 1 .n the interpretation of a law or
administrative issuance promulgated in all the official
languages, the 8nglish te&t shall control, unless
otherwise specifically provided. .n case of ambiguity,
omission or mista!e, the other te&ts may be
consulted.
Sec& 2"& 3o mplied 'evival of 'epealed La/&1 <hen
a law which e&pressly repeals a prior law itself
repealed, the law first repealed shall not be thereby
revived unless e&pressly so provided.
Sec& 22& 'evival of La/ mpliedly 'epealed& 1 <hen
a law which impliedly repeals a prior law is itself
repealed, the prior law shall thereby be revived,
unless the repealing law provides otherwise.
Sec& 23& 4norance of the La/& 1 .gnorance of the
law e&cuses no one from compliance therewith.
<ill not apply unless the people are informed
through the re2uired publication
RULE ON THE IMPLEMENTATION AND
INTERPRETAION OF LABOR LAWS
1. ART. 4. Construction in favor of labor. - All
doubts in the implementation and interpretation of
the provisions of this +ode, including its
implementing rules and regulations, shall be resolved
in favor of labor.
,easons/ 8mployer stands in a higher footing than
the employees and the State affirms labor as the
primary social economic force.
)he policy is to apply the code to a greater
number of employees to enable them to avail of
the benefits under the law, in line with the StateCs
desire to give ma&imum aid and protection to
labor.
.t is not always correct to thin! that the aim of the law is
always to favor labor. )he mandate under Art is simply
to resolve doubt, if any, in favor of labor. .f there is no
doubt in implementing and interpreting the law, labor will
enjoy no built9in advantage and the law will have to be
applied as it is.
)he law in protecting the rights of the laborer, authori3es
neither oppression nor self destruction of the employer.
+ourt decisions adopt a liberal approach that favors the
e&ercise of labor rights.
RELATIONS BETWEEN CAPITAL AND LABOR
2. Art. 1700. )he relations between capital and labor are not
merely contractual. )hey are so impressed with public interest
that labor contracts must yield to the common good.
)herefore, such contracts are subject to the special laws on
labor unions, collective bargaining, stri!es and loc!outs,
closed shop, wages, wor!ing conditions, hours of labor and
similar subjects.
*abor disputes also affect the state and the public at large
if employees are engaged in stri!e or other concerted
activities.
?A,).8S )$ 8M?*$AM8() +$(),A+)
1. 8mployer
#. 8mployee
;. ?ublic
. State
PRINCIPLE OF NON0OPPRESSION
3. Art. 1701. (either capital nor labor shall act oppressively
against the other, or impair the interest or convenience of the
public.
(ot to re2uire employee to wor! against his will nor to
compel the employer to hire the employee against the
formerCs will.
4. Art. 1702. .n case of doubt, all labor legislation and all
labor contracts shall be construed in favor of the safety and
decent living for the laborer.
LABOR AND 8CHATTEL9
%labor is not a chattel nor a commodity, but human, and
must be dealt with from the standpoint of human
interest.'4asufrim vs. smc7
TRIPARTISM IN DECISION AND POLIC( MA:IN3
BODIES OF THE 3O4ERNMENT
ART. 275. Triartis! and triartite conferences. - 4a7
)ripartism in labor relations is hereby declared a State policy.
)owards this end, wor!ers and employers shall, as far as
practicable, be represented in decision and policy9ma!ing
bodies of the government.
4b7 )he Secretary of *abor and 8mployment or his duly
authori3ed representatives may, from time to time, call a
national, regional, or industrial tripartite conference of
representatives of government, wor!ers and employers for
the consideration and adoption of voluntary codes of
principles designed to promote industrial peace based on
social justice or to align labor movement relations with
established priorities in economic and social development. .n
calling such conference, the Secretary of *abor and
8mployment may consult with accredited representatives of
wor!ers and employers. )As amended by Section 32! 'epublic
Act 3o& 6$"5! 6arch 2"! "#8#*&
,eason/ ,elations between capital and labor are not merely
contractual. )hey are so impressed with public interest that
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
3 of 61
SUN TZU NOTES
representations from employer and employee in
decision and policy9ma!ing bodies of the government
are necessary. )his is also in affirmation of the role
of the State as the guardian of the peopleCs rights
and the constitutional provision on protection to
labor.
8&.
+reation of ,)<0 which is composed of
government, employer and employee
representatives.
+omposition of (*,+, chairman is government
appointed, remaining # commissioners from
employer and employee sectors.
II. BASIC PRINCIPLES
CONSTITUTIONAL AND STATUTOR( RI3HTS OF
WOR:ERS IN 3ENERAL
ART XIII, Sect!o 1, 7"r .
%)he state shall afford full protection to labor, local
and overseas, organi3ed and unorgani3ed, and
promote full employment and e2uality of
employment opportunities for all.'
SPECIFIC RI3HTS OF WOR:ERS IN RELATION
TO LABOR STANDARDS ; LABOR RELATIONS
.( ,8*A).$( )$ *A0$, S)A(1A,1S
1. @umane conditions of wor!.4 A,) D..., Sec
; par #7
#. *iving wage.4 A,) D..., Sec ; par #7
;. Fust share in the fruits of production. .4 A,)
D..., Sec ; par 7
.( ,8*A).$( )$ *A0$, ,8*A).$(S
4A,) D..., Sec ; par #7
1. Self9organi3ation
#. +ollective bargaining and negotiations
;. ?eaceful concerted activities including the
right to stri!e in accordance with law.
. Security of tenure
-. ?articipate in policy and decision ma!ing
processes affecting their rights and benefits
as maybe provided by law.
ASPECTS OF LABOR STANDARDS PURPOSE AND
SOURCE
*A0$, S)A(1A,1S
)he minimum re2uirements prescribed by
e&isting laws, rules and regulations and other
issuances relating to wages, hours of wor!, cost
of living allowances and other monetary and
welfare benefits, including those set by
occupational safety and health ha3ards. 4Section
7, ,ule ., ,ules on the 1isposition of *abor
Standards +ases 5 September 1", 19677
AS?8+)S $= *A0$, S)A(1A,1S
1. M8*.$,A).:8 *A0$, S)A(1A,1S
.ntended to e&pand the flow of income or
benefits to wor!ingman that are re2uired for a
decent living.
8&. $vertime pay, premium pay, nightshift
differential pay
#. ?,$)8+).:8 *A0$, S)A(1A,1S
.ntended to protect harsh and oppressive
conditions of wor! that inimical to health, safety
and well9being of the wor!ers.
8&. ?rescribed hours of wor!
+$(S8IH8(+8S $= M8*.$,A).:8 A(1 ?,$)8+).:8 *A0$,
S)A(1A,1S
A. Social
8njoying a better living conditions, humane conditions,
high salary, greater 2uality of life
0. ?olitical
,elationship of people and government would be better
because people are enjoying healthy living conditions.
+. 8conomic
More money, more demands because there will be an
increase in basic production of commodities.
?H,?$S8 $= *A0$, S)A(1A,1S
,emedial and @umanitarian
S$H,+8S $= *A0$, S)A(1A,1S
1. 8mployment +ontract
,eason/ *S are terms and conditions fi&ed by law and the
contract is the law between the parties.
8&. 8mployer hires an employee and gives a high salary in
effect the former provides the latter a labor standard plus car,
allowances and other benefits.
#. +ompany ?olicies
1eclarations or statements in written form fi&ing
employment benefits usually found in company manual.
8&. ,esignation benefit, retirement benefit other than the
one mandated by law.
;. +ompany ?ractice
+ustomary mode of employerCs conduct, usually nonverbal
fi&ing employment benefits over a period of time through
repetitive employer behavior.
8&. :acation with pay, birthday leave
. Administrative $rder of 1$*8
Also prescribes the terms and conditions of employment.
8&. +ompressed wor!wee!
-. +ompulsory or :oluntary Arbitration
the award given to the party, it is another source of a
*abor Standard
". +ollective 0argaining Agreement or +0A
can also be a source of *S because it provides terms and
conditions of employment prescribed by law.
7. Statutes
,8AS$(/ ?rinciple of (on9diminution of benefits.
CONSCEPT OF EMPLO(ER < EMPLO(EE= NATURAL AND
>URIDICAL PERSON
IN LABOR STANDARDS
Art -/*. %8mployer' includes any person directly or
indirectly in the interest of an employer in relation to an
employee and shall include the >overnment and all its
branches, subdivision and instrumentalities, all government9
owned or controlled corporations and institutions, as well as
non9profit private institutions, or organi3ations.4e&panded
definition7
Art -/c. %8mployee' includes any individual employed by an
employer.
IN LABOR RELATIONS
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
4 of 61
SUN TZU NOTES
Art 2.2e. %8mployer' includes any person acting in
the interest of an employer, directly or indirectly.
)he term shall not include any labor organi3ation or
any of its officers or agents e&cept when acting as
employer.
Art 2.2&. %8mployee' includes any person in the
employ of the employer. )he term shall not be
limited to the employees of a particular employer,
unless this code so e&pressly states. .t shall include
any individual whose wor! has ceased as a result of
or in connection with any current labor dispute or
because of any unfair labor practice if he has not
obtained any other substantially e2uivalent and
regular employment.4e&panded definition7

COMMENTS?
8M?*$A8,
may be 3A(7'AL +' 87'9CAL, a single
proprietorship, a partnership or a corporation.
)he >overnment is an employer within the meaning
of the *abor +ode in *abor Standards.
So, a government agency with an original charter
contracts with a security agency to supply security
guards, and this security agency is unable to pay the
wages of its guards.
Q? .s principal government agency considered jointly
and severally liable with the security agencyJ <ill
Article 1B"91B9, *+ apply to themJ +an the guards
file with the labor complaint with the nearest
arbitration branch of the (*,+ and sue both the
security and government agencyJ
A? A8S, the *abor +ode will govern. )he government
agency cannot move for the dismissal of the
complaint for lac! of jurisdiction on the part of the
*abor Arbiter and say that they are governed by the
+ivil Service *aw ,ules and ,egulations. )he
government agency contracted the services of an
independent contractor, so they are considered
principals. )herefore the *+ will govern regarding the
monetary claims of the security guards.
A motion to dismiss filed by the government agency
in the above9cited e&ample will not prosper on the
ground that the *abor Arbiter has no jurisdiction,
because the term %8mployer' includes government
agencies. t does not ma0e any :ualifications
/hether it is one /ith or /ithout ori4inal charter&
8M?*$A88
An employee is always a 3A(7'AL 2E'S+3 Kmay
include =ilipino citi3ens or foreignersL
8&ample/ 1umon Sari9sari Store 4single
proprietorship7.
<ho is considered the employerJ <ilbert 1umon will
be the employer, because the sari9sari store does not
have a separate juridical personality. So, if 1umon is
made a defendant in a labor case, the caption will be
9 %8mployee vs. <ilbert 1umon, doing business
under the name and style of 1umon Sari9sari Store.'
EMPLO(ER0EMPLO(EE RELATIONSHIP
it is in personam, involves the rendition of
personal service by the employee, and parta!es
of master and servant relationship.
FOUR0FOLD TEST
"& )he selection and engagement of the employee.
2& )he payment of wages or salaries for services.
3& )he power of dismissal or to impose disciplinary actions.
;& )he employerCs power to control the employee with
respect to the means and methods by which the wor! is to
be accomplished. )his is also !nown as the %C+3('+L
(ES(<&
Tabas vs. California Mfg Co.
R !"#!"$ "%&'#&!(
IH8S).$( $= *A<M IH8S).$( $= =A+)
%)he e&istence or absence of employer9employee relationship
is A IH8S).$( $= *A< A(1 A IH8S).$( $= =A+)S, each in
its defined sense.
)he character of relationship between the parties is not what
they call it in their contract but what the law calls it after
e&amination of the facts. )he characteri3ation by law prevails
that in the contract. .n this case the e&istence of employer9
employee relationship is not a matter of stipulationM it is a
IH8S).$( $= *A<.
0ut the conclusion an employer9employee relationship e&ists
depends upon the facts of each case. .n one case an
employer9employee relationship may be found to be present,
but in another case with different facts, it may be absent. .n
this sense, the e&istence of an employer9employee
relationship is a IH8S).$( $= =A+).'
)*ili++ine ,-.i /ero0 Cor+ vs. NLRC
R %%%1"%$ "1&"1&(#
+$,8 $, ($(9+$,8 F$0S
%1epending on the applicability of the tests of employment,
an employer9employee relationship may e&ist regardless of
the nature of the activities involved. .n other words, the !ind
of wor! is not the definitive test of whether the wor!er is an
employee or not'
Sevilla vs. CA
R 22%!'34$ "2&%1&!!
).)*8 AS <8AN .(1.+A)$,S
%)he fact that one had been designated %branch manager'
does not ma!e such person an employee. )itles are wea!
indicators'
En5y5lo+e6ia Britani5a vs. NLRC
R !7"(!$ %%&"2&(#
%<here a person who wor!s for another does so more or less
at his own pleasure and is not subject to definite hours or
conditions of wor! and in turn is compensated according to
the result of his efforts and not the amount thereof, we
should not find that the relationship of employer9employee
e&ists.'
Dy 8e* Beng vs. ILM9)
R %""##1$ "'&%4&(1
M8,8 8D.S)8(+8, ($) A+)HA* 8D8,+.S8
%0ut it should be borne in mind that the control test calls
M8,8*A =$, )@8 8D.S)8(+8 of the right to control the
manner of doing the wor!, ($) )@8 A+)HA* 8D8,+.S8 of the
right.'
Ins-lar Ass-ran5e Co. vs. NLRC
R %%((4"$ "4&%'&(!
%8&clusivity of service to the company, control of assignments
and removal of agents, collection of premiums, furnishing of
facilities and materials as well as capital described as unit
development fund are @A**MA,NS $= A MA(A>8M8()
SAS)8M where there can be no escaping the conclusion that
one is an employee of the insurance company.'
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
5 of 61
SUN TZU NOTES
Invest:ent )lanning Cor+ v. SSS
; %%&%!&#7<
+$(),$* )8S) 4most important element7
%)hat is, whether the employer controls or has
reserved the right to control the employee not only
as to the result of the wor! to be done but also as to
the means and methods by which the same is to be
accomplished'
Do:asig vs. NLRC
R %%!%"% "(&%#&(#
8:.18(+8 $= 8M?*$AM8()M .1, :$H+@8,S, SSS
,8>.S),A).$(, M8M$,A(1HM
%Substantial evidence is sufficient as a basis for
judgment on the e&istence of employer9employee
relationship. (o particular form of evidence is
re2uired to prove the e&istence of such relationship.'
,lores vs. N-estra
R ##!(" "2&%1&!!
%)hat the respondent registered the petitioners with
SSS is proof that the latter is the formerCs
employees. )he coverage of SSS *aw is predicated
on the e&istence of an employer9employee
relationship'
%.n a business establishment, an identification card is
usually provided not only as a security measure but
mainly to identify the holder thereof as a bona fide of
the firm that issues it. )ogether with the cash
vouchers covering the petitionerCs salaries for the
months stated therein, these matters constitute
substantial evidence ade2uate to support a
conclusion that the petitioner was indeed the
employee of the respondent.'
)*ili++ine ,9=I /ERO/ COR) vs. NLRC
R%%%1"% "4&"1&(#
%Appointment letters or employment contracts,
payrolls, organi3ation charts, personnel lists, as well
as testimony of co9employees, may also serve as
evidence of employee status.'
O+-len5ia I5e )lant vs. NLRC
R (!4#! %'&%1(4
A0S8(+8 $= (AM8 .( )@8 ?AA,$**M )8S).M$(.A*
8:.18(+8
%.f only documentary evidence would be re2uired to
show that relationship, no scheming employer would
ever be brought before the bar of justice, as no
employer would wish to come out with any trace of
the illegality he as authored considering that it
should ta!e much weightier proof to invalidate a
written instrument. )hus, as in this case where the
employer9employee relationship between petitioners
and 8sita was sufficiently proved by testimonial
evidence, the absence of time sheet, time record or
payroll has become inconse2uential.'
Labor Congress of t*e )*ili++ines vs. NLRC
R %'4(4! "1&'%&(!
M$18 $= +$M?8(SA).$( ($) A )8S) $=
8M?*$AM8() S)A)HS.
%)he presence or absence of employer9employee
relationship is not determined by the basis of the
employeeCs compensation. .ndeed, employment
relationship is one thing, pay determination is
another. )he e&istence of employment relationship
depends on whether the four9fold test is present or
not.'
>a:-6io vs. NLRC
R 7#7'4 "4&'1&("
$( %2A=A+' 0AS.S
%)he nature of their employment i.e %pa0iao< basis, does not
ma!e petitioners independent contractors. ?a!iao wor!ers
are considered employees as long as the employer e&ercises
control over the means by which such wor!ers are to perform
their wor!. +onsidering that the petitioners did their wor!
inside private respondentCs farm, the latter necessarily
e&ercised control over the wor! performed by petitioners.
)he seasonal nature of petitionerCs wor! does not detract
from the conclusion that employer9employee relationship
e&ists. Seasonal wor!ers whose wor! is not merely for the
duration of the season, but who are rehired every wor!ing
season are considered regular employees.'
Q? <hy is it important to determine whether the relationship
between the parties is that of employer and employee or that
of principal and independent contractor or of principal9agentJ
A? )o determine what laws will govern the rights and
liabilities of the parties, and what tribunal will have
jurisdiction over their disputes.
Re#"t!os6!7 3o5er!'
L"%s
Tr!*@"#
8mployer9
8mployee
*abor laws *abor tribunal
?rincipal9
.ndependent
+ontractor
obligations
and +ontracts
K++L
,egular courts
?rincipal9
Agent
+ivil +ode ,egular courts
ECONOMIC REALIT( TEST
,ran5is5o v. NLRC
.R. No. %7""!7? A-g-st 4%$ '""#
)<$9).8,81 A??,$A+@
%)he better approach would be to adopt a )<$9).8,81 )8S)
involving 417 the putative employerCs power to control the
employee with respect to the means and methods by which
the wor! is to be accomplished and 4#7 the underlying
economic realities of the activity or relationship.
)his two9tiered test would provide us with a framewor! of
analysis, which would ta!e into consideration the totality of
circumstances surrounding the true relationship between the
parties.
)his is especially A??,$?,.A)8 in this case where there is no
written agreement or terms of reference to base the
relationship onM and due to the comple&ities of the
relationship based on the various positions and
responsibilities given to the wor!er over the period of the
latterCs employment.
)he determination of the relationship between employer and
employee depends upon the circumstances of the whole
economic activity. )he ?,$?8, S)A(1A,1 $= 8+$($M.+
18?8(18(+8 is whether the wor!er is dependent on the
alle4ed employer for his continued employment in that line of
business&
Hnder the broader EC+3+6C 'EAL(> (ES(, the petitioner
can li!ewise be said to be an employee of respondent
corporation because she had served the company for si&
years before her dismissal, receiving chec! vouchers
indicating her salariesE benefits, 1;th month pay, bonuses
and allowances as well as deductions and SSS contributions.
.t is therefore apparent that petitioner is economically
dependent on respondent for her continued employment in
the latterCs line of business. %
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
6 of 61
SUN TZU NOTES
Q? @ow to determine that a person is economically
dependentJ
A? 1. (umber of years in the company
#. ,eported to SSS, good indicator of treating
him as an
employee.
;. ,egistered in the payroll
. .dentification card
-. +ompany uniform
PRINCIPAL0A3ENT RELATIONSHIP
Art .ABA NCC? 0y the contract of agency, a person
binds himself to render some service or to do
something in representation or on behalf of another,
with the consent or authority of the latter.

.t is the principal who selects the agent
An agent is compensated under the contract of
agency for services rendered.
An agent is disciplined by the principal because
former is under the authority of the latter.
)he principal controls the means and methods of
the wor! of an agent.
K,elate above to the four9fold testL
)here is only one party in a principal9agent
relationship, the agent is merely an e&tension of
the principal. )hey are regarded as one. So if
there is a contractor relationship, it is not
between ; parties but is between the principal or
the agent as an e&tension of the principal and the
other party.
Note? )o ma!e a distinction between a principal9
agent relationship and that of an employer9employee
relationship, the four9fold test will not be used
because the 17 agent is selected by the principal #7
compensated by the principal ;7 and most
oftentimes, the principal also substitutes his own
judgment for that of the agent.
PRINCIPAL0CONTRACTOR CFREE ARTISAND
RELATIONSHIP
principal selects the contractor
contractor is compensated for services rendered.
)he contractor is ot under the discipline of the
principal.
the contractor is ot under the control of the
principal. )he definition says that aside from
engaging in a business separately distinct from
the principal, to perform job, wor! or service,
according to his own means and methods, free
from control and direction of the principal e&cept
as to the results thereof.
Krelate above with four9fold testL
this relationship e&ists also in situations under art
1B"91B9 *+.
Article 171;, +ivil +ode/ 0y contract for a piece
of wor! the contractor binds himself to e&ecute a
piece of wor! for the employer, in consideration
of a certain price or compensation. )he
contractor may either employ only his labor or
s!ill, or also furnish the material.
CHIEF CHARACTERISTICS OF EMPLO(EE
1. 8conomic 1ependence on the person hiring the
services.
8mployee cannot bargain the terms and
conditions of employment.
Medical doctors, lawyers, dentists, engineers in
the e&ercise of their profession offer special
services, the person engaging their services
cannot e&ercise control over the means and methods of
accomplishing the wor! e&cept the results thereof. )hey
are considered as independent contractors not needing
protection from the *abor +ode.
1. Subordination in his wor! relationship
8mployer e&ercises control not only the means and
methods but also the results thereof.
III. RIGHT TO HIRE
NATURE? RI3HT OR PRERO3ATI4EE
Strictly spea!ing, the employer has no right to hire a
person as his employee. )he matter of selecting a person
as oneCs employee is more appropriately described as a
prerogative. .t is not a right in which you can go to court
and enforce the right to hire a person, otherwise it will
violate the constitutional provision against involuntary
servitude, if one is compelled to be anotherCs employee.
(o person can be compelled against his will to do an act
whether legal or illegal. )hus, an employer cannot go to
court and get an injunction to compel a person to become
his employee. .f at all, the employee can only e&ercise
the prerogative to invite that person and to hire him if he
so desires. .n that sense, the right to hire is essentially a
)""'e)et 7rero'"t!5e.
MA(A>8M8() ?,8,$>A).:8
SMC v. O+le
%8&cept as limited by Special *aws, an employer is free to
regulate, according to his own discretion and judgment, all
aspects of employment, including hiring, wor! assignments,
wor!ing methods, time, place and manner or wor!, tools to
be used, processes to be followed, supervision of wor!ers,
wor!ing regulations, transfer of employees, wor! supervision,
layoff of wor!ers and the discipline, dismissal and recall of
wor!ers.'4$(8 ,.>@) $= A( 8M?*$A8,7
*.M.)A).$(S $( MA(A>8M8() ?,8,$>A).:8
1. law
#. contract or +0A
;. principles of fair play and justice
4a3ucena7
,.>@)S $= MA(A>8M8()
1. ,ight to ,$.
#. ,ight to prescribe rules
;. ,ight to select employees
. )ransfer or discharge of employees
EXERCISE OF RI3HT OR PRERO3ATI4E ABSOLUTEE
(o, it is a mere prerogative subject to limitations provided
by e2uitable principles of law
LE3AL LIMITATIONSFPROHIBITIONS PRIOR TO
HIRIN3
A. UNDER THE LABOR CODE
.. A e)7#o+er !s 7ro6!*!te$ &ro) reG@!r!' "s "
co$!t!o o& e)7#o+)et t6"t " %o)" e)7#o+ee s6"##
ot 'et )"rr!e$.
Art .1B. "tiulation against !arriage& 9 .t shall be
unlawful for an employer to re2uire as a condition of
employment or continuation of employment that a woman
employee shall not get married, or to stipulate e&pressly or
tacitly that upon getting married, a woman employee shall be
deemed resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman
employee merely by reason of her marriage.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
7 of 61
SUN TZU NOTES
Applies to women in ordinary and special
occupations
)T@T V. NLRC
'7' s5ra 1(#
%.t assaults good morals and public policy, tending to
deprive a woman of freedom to choose her status, a
privilege that by all accounts inheres in the individual
as an intangible and inalienable right %
2. A e)7#o+er !s 7ro6!*!te$ &ro) e)7#o+!'
"+ 7erso *e#o% .A +e"rs o#$ ! "
@$ert"H!' %6!c6 !s 6"I"r$o@s or
$e#eter!o@s ! "t@re.
ART. .1-. #ini!u! e!lo$able age& 9 4a7 (o
child below fifteen 41-7 years of age shall be
employed, e&cept when he wor!s directly under the
sole responsibility of his parents or guardian, and his
employment does not in any way interfere with his
schooling.4amended by 'A $6"%! /hich /as also
amnded by 'A $658 and 'A #23"! implemented by
9+ 651%;*
4b7 Any person between fifteen 41-7 and eighteen
4167 years of age may be employed for such number
of hours and such periods of the day as determined
by the Secretary of *abor and 8mployment in
appropriate regulations.
4c7 )he foregoing provisions shall in no case allow
the employment of a person below eighteen 4167
years of age in an underta!ing which is ha3ardous or
deleterious in nature as determined by the Secretary
of *abor and 8mployment.
DO NO. ,40--
@AOA,1$HS <$,N A(1 A+).:.).8S =$, ?8,S$(S
08*$< 16 A8A,S $*1
1. <or! which e&poses children to physical,
psychological or se&ual abuse.
lewd shows
cabarets
bars 4!tv, !arao!e bars7
dance halls
bath houses and massage clinics
escort service
gambling halls and places
#. <or! underground, underwater, at dangerous
heights or at unguarded heights # meters and
above, or in confined places.
Mining
1eep sea fishingEdiving
.nstalling and repairing of telephone, telegraph
and electrical linesM cable fitters
?ainting buildings
<indow cleaning
=ruit pic!ing involving climbing
;. <or! with dangerous machinery, e2uipment and
tools, or which involves manual handling or
transport heavy loads.
*ogging
+onstruction
Iuarrying
$perating agricultural machinery in mechani3ed
farming
Metal wor! and welding
1riving or operating heavy e2uipment such as
payloaders, bac!hoes, bulldo3ers, cranes, pile
driving e2uipment, trailers, road rollers, tractor
lifting appliances, scaffold winches, hoists, e&cavators and
loading machines.
$perating or setting motor9driven machines such as saws,
presses and wood9wor!ing machines
$perating power driven tools such as drills and jac!
hammers
Stevedoring
<or!ing in airport hangars
<or!ing in warehouses
<or!ing in doc!s
. <or! in an unhealthy environment which may e&pose
children to ha3ardous processes, to temperatures, noise
levels or vibrations damaging to their health, to to&ic,
corrosive, poisonous, no&ious, e&plosive, flammable and
combustible substances or composite, to harmful
biological agents, or to other dangerous chemicals
including pharmaceuticals.
Manufacturing of handling pyrotechnics
)anning
?esticide spraying
0lac!smithing, hammersmiths, forging
8&tracting land and oil
)itling and greasing of heavy machinery
=iber and plastic preparing
>arbage collecting
<or!ing in abattoirs
<or!ing in hospitals or other healthcare facilities
Assisting in laboratories and &9ray wor!
<or!ing in video arcades
<or!ing in discothe2ues
<elding
-. <or! under particularly difficult conditions such as wor!
for long hours or during the night, or wor! where the child
is unreasonably confined to the premises of the employer.
1. A e)7#o+er !s 7ro6!*!te$ &ro) e)7#o+!' c6!#$re
*e#o% .2 +e"rs o#$, eJce7t?
%17 <hen a child wor!s directly under the sole responsibility
of hisEher parents or legal guardian and where only members
of hisEher family are employed/ ?rovided, however, )hat
hisEher employment neither endangers hisEher life, safety,
health, and morals, nor impairs hisEher normal development/
?rovided, further, )hat the parent or legal guardian shall
provide the said child with the prescribed primary andEor
secondary educationM or
%#7 <here a childCs employment or participation in public
entertainment or information through cinema, theater, radio,
television or other forms of media is essential/ ?rovided, )hat
the employment contract is concluded by the childCs parents
or legal guardian, with the e&press agreement of the child
concerned, if possible, and the approval of the 1epartment of
*abor and 8mployment/ ?rovided, further, )hat the following
re2uirements in all instances are strictly complied with/
%4a7 )he employer shall ensure the protection, health, safety,
morals and normal development of the childM
%4b7 )he employer shall institute measures to prevent the
childCs e&ploitation or discrimination ta!ing into account the
system and level of remuneration, and the duration and
arrangement of wor!ing timeM and
%P )he employer shall formulate and implement, subject to
the approval and supervision of competent authorities, a
continuing program for training and s!ills ac2uisition of the
child.
%.n the above e&ceptional cases where any such child may be
employed, the employer shall first secure, before engaging
such child, a wor! permit from the 1epartment of *abor and
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
8 of 61
SUN TZU NOTES
8mployment which shall ensure observance of the
above re2uirements.
@ours of <or! of a <or!ing +hild. 5
%417 A child below fifteen 41-7 years of age may be
allowed to wor! for not more than twenty 4#B7 hours
a wee!/ ?rovided, )hat the wor! shall not be more
than four 47 hours at any given dayM
%4#7 A child fifteen 41-7 years of age but below
eighteen 4167 shall not be allowed to wor! for more
than eight 467 hours a day, and in no case beyond
forty 4B7 hours a wee!M
%4;7 (o child below fifteen 41-7 years of age shall be
allowed to wor! between eight oCcloc! in the evening
and si& oCcloc! in the morning of the following day
and no child fifteen 41-7 years of age but below
eighteen 4167 shall be allowed to wor! between ten
oCcloc! in the evening and si& oCcloc! in the morning
of the following day.9 CRA /B., "s ")e$e$,
")e$!' "rt .1- LCD
4. A e)7#o+er !s 7ro6!*!te$ &ro) e)7#o+!'
c6!#$re "s " )o$e# ! "+ "$5ert!se)et
$!rect#+ or !$!rect#+ 7ro)ot!' "#co6o#!c
*e5er"'es, !toJ!c"t!' $r!Hs, to*"cco "$
!ts *+7ro$@cts, '")*#!' or "+ &or) o&
5!o#ece or 7oro'r"76+.
RA 7#%" as a:en6e6
S+e5ial )rote5tion Against C*il6 Ab-se$ E0+loitation
an6 Dis5ri:ination A5t
A a:en6e6 Art %4( LCB
Sec& ";& 2rohibition on the Employment of Children
in Certain Advertisements. 5 (o child shall be
employed as a model in any advertisement directly
or indirectly promoting alcoholic beverages,
into&icating drin!s, tobacco and its byproducts,
gambling or any form of violence or pornography.
2. A e)7#o+er !s 7ro6!*!te$ &ro) reG@!r!' "s
" co$!t!o o& e)7#o+)et t6"t " 7erso or
" e)7#o+ee s6"## ot Ko! " #"*or
or'"!I"t!o or s6"## %!t6$r"% &ro) oe to
%6!c6 6e *e#o's. C(ELLOW DO3
CONTRACTD
ART. 24A. %nfair labor ractices of e!lo$ers& 9
.t shall be unlawful for an employer to commit any of
the following unfair labor practice/
4b7 )o re2uire as a condition of employment that a
person or an employee shall not join a labor
organi3ation or shall withdraw from one to which he
belongs.
FULL TEXT OF THE SPECIAL LAWS AMENDIN3
ART .1- LC INCLUDIN3 D, B20,4
RE)9BLIC ACT NO. 7#%"
S+e5ial )rote5tion Against C*il6 Ab-se$ E0+loitation
an6 Dis5ri:ination A5t
Sec. 1#. Employment of Children& 5 +hildren below
fifteen 41-7 years of age may be employed e&cept/
417 <hen a child wor!s directly under the sole
responsibility of his parents or legal guardian and
where only members of the employerCs family are
employed/ 2rovided! ho/ever! )hat his employment
neither endangers his life, safety and health and
morals, nor impairs his normal development/
2rovided! further! )hat the parent or legal guardian
shall provide the said minor child with the prescribed
primary andEor secondary educationM or
4#7 <hen a childCs employment or participation in public Q
entertainment or information through cinema, theater, radio
or television is essential/ 2rovided, )he employment contract
concluded by the childCs parent or guardian, with the e&press
agreement of the child concerned, if possible, and the
approval of the 1epartment of *abor and 8mployment/
2rovided! )hat the following re2uirements in all instances are
strictly complied with/
4a7 )he employer shall ensure the protection, health, safety
and morals of the childM
4b7 the employer shall institute measures to prevent the
childCs e&ploitation or discrimination ta!ing into account the
system and level of remuneration, and the duration and
arrangement of wor!ing timeM and
P )he employer shall formulate and implement, subject to
the approval and supervision of competent authorities, a
continuing program for training and s!ill ac2uisition of the
child.
.n the above e&ceptional cases where any such child may be
employed, the employer shall first secure, before engaging
such child, a wor! permit from the 1epartment of *abor and
8mployment which shall ensure observance of the above
re2uirement.
)he 1epartment of *abor and 8mployment shall promulgate
rules and regulations necessary for the effective
implementation of this Section.
Sec. .4. &ro'ibition on t'e (!lo$!ent of C'ildren in
Certain Advertise!ents. 5 (o person shall employ child
models in all commercials or advertisements promoting
alcoholic beverages, into&icating drin!s, tobacco and its
byproducts and violence.
RE)9BLIC ACT NO. 7#1!
An act prohibiting the employment of children below 1- years
of age in public and private underta!ings, ")e$!' &or t6!s
7@r7ose sect!o .2, "rt!c#e 5!!! o& r. a. 7610.
Section 1. Section 1#, Article :... of ,. A. (o. 7"1B
otherwise !nown as the %Special ?rotection of +hildren
Against +hild Abuse, 8&ploitation and 1iscrimination Act' is
hereby amended to read as follows/
8Sec. .2. E)7#o+)et o& C6!#$re. R +hildren below
fifteen 41-7 years of age shall not be employed e&cept/
417 <hen a child wor!s directly under the sole
responsibility of his parents or legal guardian and where only
members of the employerCs family are employed/ 2rovided!
ho/ever! )hat his employment neither endangers his life,
safety, health and morals, nor impairs his normal
developmentM 2rovided! further! )hat the parent or legal
guardian shall provide the said minor child with the prescribed
primary andEor secondary educationM or
4#7 <here a childCs employment or participation in public
entertainment or information through cinema, theater, radio
or television is essential/ 2rovided! )he employment contract
is concluded by the childCs parents or legal guardian, with the
e&press agreement of the child concerned, if possible, and the
approval of the 1epartment of *abor and 8mployment/ and
2rovided, )hat the following re2uirements in all instances are
strictly complied with/
4a7 )he employer shall ensure the protection, health,
safety, morals and normal development of the childM
4b7 )he employer shall institute measures to prevent the
childCs e&ploitation or discrimination ta!ing into account the
system and level of remuneration, and the duration and
arrangement of wor!ing timeM and
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
9 of 61
SUN TZU NOTES
P )he employer shall formulate and
implement, subject to the approval and supervision
of competent authorities, a continuing program for
training and s!ills ac2uisition of the child.
.n the above e&ceptional cases where any such child
may be employed, the employer shall first secure,
before engaging such child, a wor! permit from the
1epartment of *abor and 8mployment which shall
ensure observance of the above re2uirements.
)he 1epartment of *abor and 8mployment shall
promulgate rules and regulations necessary for the
effective implementation of this Section.'
RE)9BLIC ACT NO. ('4%
An act providing for the elimination of the worst
forms of child labor and affording stronger protection
for the wor!ing child, ")e$!' &or t6!s 7@r7ose
republic act no. 7"1B, as amended, otherwise !nown
as the %special protection of children against child
abuse, e&ploitation and discrimination act'
Section 1. Section # of ,epublic Act (o. 7"1B, as
amended, otherwise !nown as the %Special
?rotection of +hildren Against +hild Abuse,
8&ploitation and 1iscrimination Act', is hereby
amended to read as follows/
Sec. #. Section 1# of the same Act, as amended, is
hereby further amended to read as follows/
%Sec. 2. E)7#o+)et o& C6!#$re 5 +hildren below
fifteen 41-7 years of age shall not be employed
e&cept/
%17 <hen a child wor!s directly under the sole
responsibility of hisEher parents or legal guardian
and where only members of hisEher family are
employed/ ?rovided, however, )hat hisEher
employment neither endangers hisEher life, safety,
health, and morals, nor impairs hisEher normal
development/ ?rovided, further, )hat the parent or
legal guardian shall provide the said child with the
prescribed primary andEor secondary educationM or
%#7 <here a childCs employment or participation in
public entertainment or information through cinema,
theater, radio, television or other forms of media is
essential/ ?rovided, )hat the employment contract is
concluded by the childCs parents or legal guardian,
with the e&press agreement of the child concerned, if
possible, and the approval of the 1epartment of
*abor and 8mployment/ ?rovided, further, )hat the
following re2uirements in all instances are strictly
complied with/
%4a7 )he employer shall ensure the protection,
health, safety, morals and normal development of
the childM
%4b7 )he employer shall institute measures to
prevent the childCs e&ploitation or discrimination
ta!ing into account the system and level of
remuneration, and the duration and arrangement of
wor!ing timeM and
%P )he employer shall formulate and implement,
subject to the approval and supervision of competent
authorities, a continuing program for training and
s!ills ac2uisition of the child.
%.n the above e&ceptional cases where any such child
may be employed, the employer shall first secure,
before engaging such child, a wor! permit from the
1epartment of *abor and 8mployment which shall
ensure observance of the above re2uirements.
%=or purposes of this Article, the term %child' shall apply to all
persons under eighteen 4167 years of age.'
Sec. ;. )he same Act, as amended, is hereby further
amended by adding new sections to be denominated as
Sections 1#9A, 1#90, 1#9+, and 1#91 to read as follows/
%Sec. 1#9A. @ours of <or! of a <or!ing +hild. 5 Hnder the
e&ceptions provided in Section 1# of this Act, as amended/
%417 A child below fifteen 41-7 years of age may be allowed to
wor! for not more than twenty 4#B7 hours a wee!/ ?rovided,
)hat the wor! shall not be more than four 47 hours at any
given dayM
%4#7 A child fifteen 41-7 years of age but below eighteen 4167
shall not be allowed to wor! for more than eight 467 hours a
day, and in no case beyond forty 4B7 hours a wee!M
%4;7 (o child below fifteen 41-7 years of age shall be allowed
to wor! between eight oCcloc! in the evening and si& oCcloc! in
the morning of the following day and no child fifteen 41-7
years of age but below eighteen 4167 shall be allowed to wor!
between ten oCcloc! in the evening and si& oCcloc! in the
morning of the following day.'
%Sec. 1#91. ?rohibition Against <orst =orms of +hild *abor. 5
(o child shall be engaged in the worst forms of child labor.
)he phrase %worst forms of child labor' shall refer to any of
the following/
%417 All forms of slavery, as defined under the %Anti9traffic!ing
in ?ersons Act of #BB;', or practices similar to slavery such as
sale and traffic!ing of children, debt bondage and serfdom
and forced or compulsory labor, including recruitment of
children for use in armed conflictM or
%4#7 )he use, procuring, offering or e&posing of a child for
prostitution, for the production of pornography or for
pornographic performancesM or %4;7 )he use, procuring or
offering of a child for illegal or illicit activities, including the
production and traffic!ing of dangerous drugs and volatile
substances prohibited under e&isting lawsM or
%47 <or! which, by its nature or the circumstances in which
it is carried out, is ha3ardous or li!ely to be harmful to the
health, safety or morals of children, such that it/
%a7 1ebases, degrades or demeans the intrinsic worth and
dignity of a child as a human beingM or
%b7 8&poses the child to physical, emotional or se&ual abuse,
or is found to be highly stressful psychologically or may
prejudice moralsM or
%c7 .s performed underground, underwater or at dangerous
heightsM or
%d7 .nvolves the use of dangerous machinery, e2uipment and
tools such as power9driven or e&plosive power9actuated toolsM
or
%e7 8&poses the child to physical danger such as, but not
limited to the dangerous feats of balancing, physical strength
or contortion, or which re2uires the manual transport of
heavy loadsM or
%f7 .s performed in an unhealthy environment e&posing the
child to ha3ardous wor!ing conditions, elements, substances,
co9agents or processes involving ioni3ing, radiation, fire,
flammable substances, no&ious components and the li!e, or
to e&treme temperatures, noise levels, or vibrationsM or
%g7 .s performed under particularly difficult conditionsM or
%h7 8&poses the child to biological agents such as bacteria,
fungi, viruses, proto3oans, nematodes and other parasitesM or
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
10 of 61
SUN TZU NOTES
%i7 .nvolves the manufacture or handling of
e&plosives and other pyrotechnic products.'
Section -. Section 1 of the same Act is hereby
amended to read as follows/
8Sec. .4. Pro6!*!t!o o t6e E)7#o+)et o&
C6!#$re ! Cert"! A$5ert!se)ets. 5 (o child
shall be employed as a model in any advertisement
directly or indirectly promoting alcoholic beverages,
into&icating drin!s, tobacco and its byproducts,
gambling or any form of violence or pornography.'
De+art:ent Or6er No. #13"2 series of '""2
AR-les an6 reg-lations i:+le:enting re+-bli5 a5t
no. ('4% a:en6ing r.a. 7#%"$ as a:en6e6B
+@.*1 *A0$,
,efers to any wor! or economic activity performed
by a child that subjects himEher to any form of
e&ploitation or is harmful to hisEher health and safety
or physical, mental or psychosocial development.
+@A?)8, #
?rohibition on the 8mployment of +hildren
S8+).$( . >eneral ?rohibition. R 8&cept as
otherwise provided in these ,ules, no child below 1-
years of age shall be employed, permitted or
suffered to wor!, in any public or private
establishment.S8+).$( -. ?rohibition on the
8mployment of +hildren in <orst =orms of +hild
*abor. R (o child shall be engaged in the worst
forms of child labor. )he phrase Sworst forms of child
laborS shall refer to any of the following/
4a7 All forms of slavery, as defined under the
SAnti9traffic!ing in ?ersons Act of #BB;S, or practices
similar to slavery such as sale and traffic!ing of
children, debt bondage and serfdom and forced or
compulsory labor, including recruitment of children
for use in armed conflict.
4b7 )he use, procuring, offering or e&posing of a
child for prostitution, for the production of
pornography or for pornographic performancesM
4c7 )he use, procuring or offering of a child for
illegal or illicit activities, including the production or
traffic!ing of dangerous drugs or volatile substances
prohibited under e&isting lawsM or
4d7 <or! which, by its nature or the
circumstances in which it is carried out, is ha3ardous
or li!ely to be harmful to the health, safety or morals
of children, such that it/
i. 1ebases, degrades or demeans the intrinsic
worth and dignity of a child as a human beingM or
ii. 8&poses the child to physical, emotional or
se&ual abuse, or is found to be highly stressful
psychologically or may prejudice moralsM or
iii. .s performed underground, underwater or
at dangerous heightsM or
iv. .nvolves the use of dangerous machinery,
e2uipment and tools such as power9driven or
e&plosive power9actuated toolsM or
v. 8&poses the child to physical danger such
as, but not limited to the dangerous feats of
balancing, physical strength or contortion, or which
re2uires the manual transport of heavy loadsM or
vi. .s performed in an unhealthy environment
e&posing the child to ha3ardous wor!ing conditions,
elements, substances, co9agents or processes
involving ioni3ing, radiation, fire, flammable
substances, no&ious components and the li!e, or to
e&treme temperatures, noise levels or vibrationsM or
1A8S).
vii. .s performed under particularly difficult conditionsM
or
viii. 8&poses the child to biological agents such as
bacteria, fungi, viruses, proto3oa, nematodes and other
parasitesM or
i&. .nvolves the manufacture or handling of e&plosives
and other pyrotechnic products.
S8+).$( ". ?rohibition on the 8mployment of +hildren
in +ertain Advertisements. R (o child below 16 years of age
shall be employed as a model in any advertisement directly or
indirectly promoting alcoholic beverages, into&icating drin!s,
tobacco and its by9products, gambling or any form of violence
or pornography.
+@A?)8, ;
8&ceptions to the ?rohibition
S8+).$( 7. 8&ceptions and +onditions. R )he following
shall be the only e&ceptions to the prohibition on the
employment of a child below 1- years of age/
4a7 <hen the child wor!s under the sole responsibility of
hisEher parents or guardian, provided that only members of
the childTs family are employed.
4b7 <hen the childTs employment or participation in
public entertainment or information is essential, regardless of
the e&tent of the childTs role.
Such employment shall be strictly under the following
conditions/
i. )he total number of hours wor!ed shall be in
accordance with Section 1- of these ,ulesM
ii. )he employment does not endanger the childTs life,
safety, health and morals, nor impair the childTs normal
developmentM
iii. )he child is provided with at least the mandatory
elementary or secondary educationM and
iv. )he employer secures a wor! permit for the child in
accordance with Section 651# of these ,ules.
+@A?)8,
,e2uirements to Avail of 8&ceptions to 8mployment
?rohibition
S8+).$( 6. <or! ?ermit. R 8&cept as provided in
Section 1;, no child below 1- years of age shall be allowed to
commence wor! without a wor! permit. An employer must
first secure a wor! permit from the ,egional $ffice of the
1epartment having jurisdiction over the wor!place of the
child. .n cases where the wor! is done in more than one
wor!place falling under the jurisdiction of more than one
,egional $ffice, the application shall be made with the
,egional $ffice having jurisdiction over the principal office of
the employer. @owever, at least two days prior to the
performance of the wor!, the employer shall inform the
,egional $ffice having jurisdiction over the wor!place of the
activities to be underta!en involving the child.
S8+).$( 9. ,e2uirements for the .ssuance of <or!
?ermit. R )he employer shall submit to the appropriate
,egional $ffice the following/
4a7 A duly accomplished and verified application for wor!
permit containing the following information/
i. )erms and conditions of employment including hours
of wor!, number of wor!ing days, remuneration, and rest
period, which shall be in accordance with lawM
ii. Measures to ensure the protection, health, safety,
morals, and normal development of the child, including but
not limited to the following/
1. comfortable wor!place and ade2uate 2uartersM
#. brea! or rest periods in comfortable day beds or
couchesM
;. clean and separate dressing rooms and toilet
facilities for boys and girlsM
. provision for ade2uate meals and snac!s and
sanitary eating facilityM
-. provision of all the necessary assistance to ensure
the ade2uate and immediate medical and dental attendance
and treatment to an injured or sic! child in case of
emergency.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
11 of 61
SUN TZU NOTES
4b7 8&cept when the child is below seven years
old/
i. ?roof that the child is enrolled and regularly
attending elementary or secondary school classes,
consisting of certificate of enrolment for the current
year or current school identification or report cardM
or
ii. .f the child is not enrolled, a brief
description of the program for education, training
and s!ills ac2uisition for the child, in accordance with
Section 194b7 of these ,ules.
4c7 An authenticated copy of the childTs 0irth
+ertificate or a +ertificate of *ate ,egistration of
0irth issued by the (S$ or the cityEmunicipal
registrarM
4d7 A medical certificate issued by a licensed
physician stating that heEshe has personally
e&amined the child for whom a wor! permit is being
secured, and that the child is fit to underta!e the
wor! in which heEshe is to be engaged. Such
certificate must bear in print the certifying
physicianTs full name and hisEher license numberM
4e7 )wo passport si3e photographs of the childM
4f7 <hen the employer is the parent, guardian,
or a family member other than the parent of the
child, heEshe shall present any valid document such
as latest passport, latest postalEcompany
identification card, and driverTs license establishing
hisEher identity. A legal guardian is re2uired to
present a duly authenticated proof of legal
guardianship while a family member shall present
any proof of relationship to the childM
4g7 <hen the employer is in public
entertainment or information, heEshe shall submit a
certified true copy of the employerTs business permit
or certificate of registration and a written
employment contract to be concluded between the
employer and the childTs parents or guardian and
approved by the 1epartment. An e&press agreement
of the child to the provisions of the contract is
needed when such child is between seven and below
1- years of age.
S8+).$( 1B. Application =ee. R )he employer
shall pay an application fee of $ne @undred
?hilippine ?esos 4?1BB.BB7 to cover administrative
costs. )his amount may be reviewed and adjusted by
the Secretary of *abor and 8mployment from time to
time subject to applicable regulations.
S8+).$( 11. Action on the Application. R <ithin
three wor!ing days from the employerTs compliance
with Sections 651B, the ,egional $ffice shall re2uire
the appearance of the childTs parent, guardian, or
employer, or the child himself or herself as may be
appropriate, to validate the information indicated in
the application and to educate such parent,
guardian, or employer, on child labor laws and
regulations.
)he ,egional $ffice, through the ,egional 1irector,
shall issue the wor! permit within three days from
compliance with all the foregoing re2uirements. (on9
compliance with the re2uirements shall automatically
result in the denial of the application. .n such
instances, the application shall be deemed not filed
and the ,egional $ffice shall immediately return it to
the applicant, indicating the re2uirements that were
not complied with.
S8+).$( 1#. :alidity of <or! ?ermit. R )he
wor! permit shall state the period of its validity
based on the employment contract or the application
for wor! permit, as the case may be. @owever, the
period of validity shall in no case e&ceed one year.
S8+).$( 1;. 8mployment of Spot 8&tras. R .n public
entertainment or information, the re2uirements for the
issuance of wor! permit stated in Sections 651# shall not be
applicable to the employment of spot e&tras or those being
cast outright on the day of the filming or taping. .nstead, the
employer shall file a notice with the ,egional $ffice where the
wor! is to be performed that it will underta!e activities
involving child wor!.
)he notice shall be in the form prescribed by the 1epartment
and shall state the appro&imate number of child wor!ers to be
employed, the date, place and time the wor! is to be
performed, and an underta!ing that the employment shall be
in conformity with ,epublic Act (o. 9#;1 and these ,ules.
B. UNDER SPECIAL LAWS
B. I " %orH0re#"te$ or e)7#o+)et e5!ro)et, "
e)7#o+er !s 7ro6!*!te$ &ro) "sH!' seJ@"# &"5or
&ro) "+ !$!5!$@"# "s " co$!t!o ! t6e 6!r!' or !
t6e e)7#o+)et o& s"!$ !$!5!$@"#.
REPUBLIC ACT NO. /A//
LAt!0SeJ@"# H"r"ss)et Act o& .--2M
S8+).$( ;. .or0! Education or (rainin4 1'elated! Se?ual
@arassment 9efined& 9 <or!, education or training9related
se&ual harassment is committed by an employer, employee,
manager, supervisor, agent of the employer, teacher,
instructor, professor, coach, trainor, or any other person who,
having authority, influence or moral ascendancy over another
in a wor! or training or education environment, demands,
re2uests or otherwise re2uires any se&ual favor from the
other, regardless of whether the demand, re2uest or
re2uirement for submission is accepted by the object of said
Act.

C"D I " %orH0re#"te$ or e)7#o+)et e5!ro)et,
seJ@"# 6"r"ss)et !s co))!tte$ %6e?
417 )he se&ual favor is made , or in granting said
individual favorable compensation, terms of conditions,
promotions, or privilegesM or the refusal to grant the se&ual
favor results in limiting, segregating or classifying the
employee which in any way would discriminate, deprive
ordiminish employment opportunities or otherwise adversely
affect said employeeM

/. A e)7#o+er !s 7ro6!*!te$ &ro) $!scr!)!"t!' !
"+ &or) &ro) 7re0e)7#o+)et to 7ost
e)7#o+)et, !c#@$!' 6!r!' *"se$ o t6e "ct@"#,
7erce!5e$ or s@s7ecte$ HI4 st"t@s o& " !$!5!$@"#.
REPUBLIC ACT NO. A2,4
LP6!#!77!e A!$s "$ Pre5et!o Cotro# Act o& .--AM
A,).+*8 :..
1.S+,.M.(A)$,A A+)S A(1 ?$*.+.8S
SECTION 12. )iscri!ination in t'e *or+lace& R
1iscrimination in any form from pre9employment to post9
employment, including hiring, promotion or assignment,
based on the actual, perceived or suspected @.: status of an
individual is prohibited. )ermination from wor! on the sole
basis of actual, perceived or suspected @.: status is deemed
unlawful.
A. No et!t+, %6et6er 7@*#!c or 7r!5"te, s6"##
$!scr!)!"te "'"!st " G@"#!&!e$ $!s"*#e$ 7erso *+
re"so o& $!s"*!#!t+ ! re'"r$ to Ko* "77#!c"t!o
7roce$@res, t6e 6!r!', 7ro)ot!o, or $!sc6"r'e o&
e)7#o+ees, e)7#o+ee co)7es"t!o, Ko* tr"!!',
"$ ot6er ter)s, co$!t!os, "$ 7r!5!#e'es o&
e)7#o+)et.
REPUBLIC ACT NO. /2//
LM"'" C"rt" &or D!s"*#e$ PersosM
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
12 of 61
SUN TZU NOTES
Q@"#!&!e$ I$!5!$@"# %!t6 " D!s"*!#!t+ shall mean
an individual with a disability who, with or without
reasonable accommodations, can perform the
essential functions of the employment position that
such individual holds or desires
Sec. 12. D!scr!)!"t!o o E)7#o+)et. R (o
entity, whether public or private, shall discriminate
against a 2ualified disabled person by reason of
disability in regard to job application procedures,
the hiring, promotion, or discharge of employees,
employee compensation, job training, and other
terms, conditions, and privileges of employment.
)he following constitute acts of discrimination/
4a7 *imiting, segregating or classifying a disabled
job applicant in such a manner that adversely
affects his wor! opportunitiesM
4b7 Hsing 2ualification standards, employment tests
or other selection criteria that screen out or tend to
screen out a disabled person unless such standards,
tests or other selection criteria are shown to be job9
related for the position in 2uestion and are
consistent with business necessityM
4c7 Htili3ing standards, criteria, or methods of
administration that/
417 have the effect of discrimination on the basis of
disabilityM or

4#7 perpetuate the discrimination of others who are
subject to common administrative control.
4d7 ?roviding less compensation, such as salary,
wage or other forms of remuneration and fringe
benefits, to a 2ualified disabled employee, by
reason of his disability, than the amount to which a
non9disabled person performing the same wor! is
entitledM
4e7 =avoring a non9disabled employee over a
2ualified disabled employee with respect to
promotion, training opportunities, study and
scholarship grants, solely on account of the latterTs
disabilityM
4f7 ,e9assigning or transferring a disabled employee
to a job or position he cannot perform by reason of
his disabilityM
4g7 1ismissing or terminating the services of a
disabled employee by reason of his disability unless
the employer can prove that he impairs the
satisfactory performance of the wor! involved to the
prejudice of the business entity/ ?rovided, however,
)hat the employer first sought to provide
reasonable accommodations for disabled personsM
4h7 =ailing to select or administer in the most
effective manner employment tests which
accurately reflect the s!ills, aptitude or other factor
of the disabled applicant or employee that such
tests purports to measure, rather than the impaired
sensory, manual or spea!ing s!ills of such applicant
or employee, if anyM and
4i7 8&cluding disabled persons from membership in
labor unions or similar organi3ations.
-. No *"H s6"## e)7#o+ c"s@"# or o re'@#"r
7ersoe# o too #e't6+ 7ro*"t!o"r+
7ersoe# ! t6e co$@ct o& !ts *@s!ess
!5o#5!' *"H $e7os!ts
REPUBLIC ACT NO. A/-.
L3eer"# B"H!' L"%s o& 2,,,M
Sec 22.4. +onsistent with the provisions of ,epublic
Act (o. 1B-, otherwise !nown as the Aan0s Secrecy
La/, no ban! shall employ casual or non regular personnel on
too lengthy probationary personnel in the conduct of its
business involving ban! deposits.
RA -2,A LAt!0tr"&&!cH!' o& Persos Act o& 2,,1M
4d7 Force$ L"*or and Slavery 9 refer to the e&traction of
wor! or services from any person by means of enticement,
violence, intimidation or threat, use of force or coercion,
including deprivation of freedom, abuse of authority or moral
ascendancy, debt9bondage or deception.
Sec. . Acts of )raffic!ing in ?ersons. 9 .t shall be unlawful
for any person, natural or juridical, to commit any of the
following acts/
4a7 )o recruit, transport, transferM harbor, provide, or receive
a person by any means, including those done under the
prete&t of domestic or overseas employment or training or
apprenticeship, for the purpose of prostitution, pornography,
se&ual e&ploitation, &orce$ #"*or, slavery, involuntary
servitude or debt bondageM
4b7 )o introduce or match for money, profit, or material,
economic or other consideration, any person or, as provided
for under ,epublic Act (o. "9--, any =ilipino woman to a
foreign national, for marriage for the purpose of ac2uiring,
buying, offering, selling or trading himEher to engage in
prostitution, pornography, se&ual e&ploitation, &orce$ #"*or,
slavery, involuntary servitude or debt bondageM
IN4OLUNTAR( SER4ITUDE
Art. ./,1. (o contract which practically amounts to
involuntary servitude, under any guise whatsoever, shall be
valid.
RE4ISED PENAL CODE
Art 2/2. S#"5er+.9 )he penalty of prision mayor and a fine of
not e&ceeding 1B,BBB pesos shall be imposed upon anyone
who shall purchase, sell, !idnap, or detain a human being for
the purpose of enslaving him.
.f the crime be committed for the purpose of assigning the
offended party to some immoral traffic, the penalty shall be
imposed in its ma&imum.
Art 2/1. EJ7#o!t"t!o o& c6!#$ #"*or.0 the penalty of prision
correccional in its minimum and medium periods and a fine
not e&ceeding -BB pesos shall be imposed upon anyone, who
under the prete&t of reimbursing himself of a debt incurred by
an ascendant, guardian or person entrusted with the custody
of a minor, shall, against the latterCs will, retain him in his
service.
Art 2/4. Ser5!ces re$ere$ @$er co)7@#s!o !
7"+)et o& $e*t.0 )he penalty of arresto mayor in its
ma&imum period to prision correccional in its minimum period
shall be imposed upon any person, who, in order to re2uire or
enforce the paymebt of a debt, shall compel the debtor to
wor! for him, against his will, as household servant or farm
laborer.
Art 2/A. EJ7#o!t"!o o& )!ors.0 the penalty of prision
correccional in its minimum and medium periods and a fine
not e&ceeding -BB pesos shall be imposed upon/
1. Any person who shall cause any boy or girl under 1"
years of age to perform any dangerous feat of
balancing, physical strength or contortion.
#. Any person, who, being an acrobat, gymnast,
ropewal!er, diver, wild animal tamer, or circus
manager or engaged in a similar calling , shall
employ in e&hibitions of this !inds, children under
1" years of age who are not his children or
descendants.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
13 of 61
SUN TZU NOTES
;. Any person engaged in any of the callings
enumerated in the ne&t preceding
paragraph who shall employ any
descendant of his under 1# years of age in
such dangerous e&hibitions.
. Any ascendant, guardian, teacher, or
person entrusted in any capacity with the
care of a child under 1" years of age, who
shall deliver such child gratuitously to any
person following any of the callings
enumerated in paragraph # hereof, or to
any habitual vagrant or beggar.
.f the delivery shall have been made in
consideration of ant price, compensation or
promise, the penalty shall in every case be
imposed in its ma&imum period.
.n either case, the guardian or curator
convicted shall also be removed from office as
guardian or curator, and in the case of the
parents of the child, they may be deprived
temporarily or perpetually, in the discretion of
the court, of their parental authority.
-. Any person who shall induce any child
under 1" years of age to abandon the
home of its ascendants, guardians,
curators, or teachers to follow any person
engaged, in any of the callings mentioned
in paragraph # hereof, or to accompany
any habitual vagrant or beggar.
DO No. 4, Ser!es o& .--- LH"I"r$o@s WorH "$
Act!5!t!es &or Persos Be#o% .A +e"rs o& "'eM
See full te&t under topic on prohibitions prior to
hiring.
DOLE Me)o C!r. No. 2 ser!es o& .--A LTec6!c"#
3@!$e#!es &or C#"ss!&+!' H"I"r$o@s "$ No0
H"I"r$o@s Est"*#!s6)ets, WorH7#"ces "$
WorH ProcessesM, see p. -6- =$O
DO NO. B20,4, SERIES OF 2,,4
See full te&t under topic on prohibitions prior to
hiring.
HIRIN3 OF EMPLO(EES
RA /-2,, sec 11C*D, ART I4 LNe% E#ectr!c"#
E'!eer!' L"%M
RA A4-2, Sec 14CCD, ART I4 LP6!#!77!e
Mec6"!c"# E'!eer!' Act o& .--AM
IV. WAGES & WAGE
RATIONALIZATION ACT
WA3E AND SALAR(= CONCEPT
WA3E 4S. SALAR(
<A>8
applies to the compensation for manual labor,
s!illed or uns!illed, paid at stated times, and
measured by the day, wee!, month, or season.
.ndicates inconsiderable pay for a lower and less
responsible character of employment.
SA*A,A
1enotes a higher degree of employment or a
superior grade of services, and implies a position
or office.
Suggestive of a larger and more permanent or fi&ed
compensation for more important service.
0y some of the authorities, the word %wages' in its ordinary
acceptance, has a less e&tensive meaning than the word
%salary', %wages' being ordinarily restricted to sums paid to
artisans, mechanics, laborers, and other employees of li!e
class, as distinguished from the compensation of cler!s,
officers of public corporations, and public offices. .n many
situations, however, the words %wages' and %salary' are
SA($(AM$HS. K;- Am. Fur. Sec. ";, p. 9"997L
$ur S+ reached the same conclusion, the words %wages' and
%salary' are in essence synonymous.
EC-itable )CIB vs. Sa6a5
.R. No. %#277'$ =-ne !$ '""#
<A>8 SA($(AM$HS <.)@ SA*A,,AM 1.S).(+).$( M8,8*A
S8MA().+S
)he distinction between salary and /a4e in ,aa was for the
purpose of Article 17B6 of the +ivil +ode which mandates
that, %the laborerCs wage shall not be subject to e&ecution or
attachment, e&cept for debts incurred for food, shelter,
clothing and medical attendance.' .n labor law, however, the
distinction appears to be merely semantics. 2aramount and
Evan4elista may have involved wage earners, but the
petitioner in Espejo was a >eneral Manager with a monthly
salary of ?9,BBB.BB plus privileges. )hat /a4e and salary are
synonymous has been settled in Son4co v& 3ational Labor
'elations Commission. <e said/
0roadly, the word %salary' means a recompense or
consideration made to a person for his pains or industry in
another manCs business. <hether it be derived from
%salarium,' or more fancifully from %sal,' the pay of the ,oman
soldier, it carries with it the fundamental idea of compensation
for services rendered. ndeed! there is eminent authority for
holdin4 that the /ords B/a4es< and Bsalary< are in essence
synonymous 4<ords and ?hrases, :ol. ;6 ?ermanent 8dition,
p. citing @op!ins vs. +romwell, 6- (.A.S.6;9, 61, 69 App.
1iv. 61M ;6 Am. Fur. 9"7. %Salary,' the etymology of which
is the *atin word %salarium,' is often used interchangeably
with %wage', the etymology of which is the Middle 8nglish
word %wagen'. 0oth words generally refer to one and the
same meaning, that is, a reward or recompense for services
performed. *i!ewise, %pay' is the synonym of %wages' and
%salary' 40lac!Cs *aw 1ictionary, -
th
8d7. & & &
FAIR DA(NS WA3E FOR A FAIR DA(NS LABOR
)AL vs. NLRC
R 11%1( =-ne ''$ %(!(
%.f there is no wor! performed by the employee there can be
no wage or pay unless the laborer was able, willing and ready
to wor! but was prevented by management or was illegally
loc!ed out, suspended or dismissed. <here the employeeCs
dismissal was for a just cause, it would neither be fair nor just
to allow the employee to recover something he has not
earned and could not have earned.'
SSS v. SSS S-+ervisorDs 9nion
R L34%!4' %"&'4&!'
%<here the failure of wor!ers to wor! was not due to the
employerCs fault, the burden of economic loss suffered by the
employees should not be shifted to the employer. 8ach party
must bear his own loss.'
EQUAL PA( FOR EQUAL WOR:
ISAE v. E-is-:bing
.R. No. %'!!21 =-ne %$ '"""
%)his doctrineElegal truism means that persons who wor! with
substantially e2ual 2ualification, s!ill, effort Q responsibility,
under similar conditions should be paid similar salaries,
notwithstanding its international character.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
14 of 61
SUN TZU NOTES
.f an employer accords employees the same position
and ran!, the presumption is that these employees
perform e2ual wor!. )here is no evidence that
foreign9hires perform #-U more efficiently or
effectively than local9hires. 0oth groups have similar
functions and responsibilities, which they perform
under similar conditions.
)he %dislocation factor' and the foreign9hires %limited
tenure' also cannot serve as valid bases for the
distinction in salary rates. )he dislocation factor and
limited tenure affecting foreign9hires are ade2uately
compensated by certain benefits accorded to them
which are not enjoyed by the local9hires such as
housing, transportation, shipping cost, ta&es, and
home leave travel allowance.
<e find the point9of9hire classification employed by
respondent school to justify the distinction in the
salary rates of foreign9hires and local9hires to be an
invalid classification. )here is no reasonable
distinction between the services rendered by foreign9
hires and local9hires.'
8mployees in the ?hilippines, if they are
performing similar functions and responsibilities
under similar wor!ing conditions, should be paid
under this principle.
RI3HT TO A LI4IN3 WA3E
4 A,) D..., Sec ; par #7
(o jurisprudence yet
FACILITIES ;SUPPLEMENT= EMPLO(EE
BENEFITS
FACILITIES= $e&!e$
BooF III$ R-le 7$ Se5. 1
%=A+.*.).8S' shall include articles or services for the
benefit of the employee or his family but shall not
include tools of the trade or articles or service
primarily for the benefit of the employer or
necessary to the conduct of the employerCs business.
AtoF3Big We6ge Assn v. AtoF3Big We6ge Co.
(7 +*il '(2
%=A+.*.).8S are items of e&pense necessary for the
laborerCs and his familyCs e&istence and subsistence
so that by e&press provision of law, they form part of
the wage and when furnished by the employer are
deductible therefrom, since if they are not so
furnished the laborer would spend and pay for them
just the same.'
MabeGa vs. NLRC
R %%!1"# "2&%!&(7
%,8IH.S.)8S =$, =A+.*.).8S )$ 08 +$(S.18,81
AS A( .()8>,A* ?A,) $= A( 8M?*$A88CS <A>8
4deductibility7
1. Must be customarily furnished by the employer to
the employeeM
#. Must be charged at fair and reasonable valueM
and
;. )he provision on deductible facilities must be
voluntarily accepted by the employee in writing.
More significantly, the food and lodging, or the
electricity and water consumed by the petitioner
were not facilities but supplements& A benefit or
privilege granted to an employee for the
convenience of the employer is not facility. )he
criterion in ma!ing a distinction between the two not
so much lies in the 0ind )food! lod4in4* but the
purpose. +onsidering therefore that hotel wor!ers
are re2uired to wor! different shifts and are e&pected to be
available at various odd hours, their ready availability is a
necessary matter in the operations of a small hotel, such as
the private respondentCs hotel.'
.f the re2uisites are all present, that facilities may ta!e
the place of the cash payment of the employeeCs wage.
)his is one e&ception of the re2uirement that an
employeeCs wage shall be paid in legal tender, you cannot
pay it in !ind.
Art 97f provides that %wage' includes the fair and
reasonable value, as determined by the Secretary of
*abor, of board, lodging, or other facilities customarily
furnished by the employer to the employee.

)his means that an employer may provide, for instance, food
and housing to his employees but he may deduct their values
from the employeesC wages.
S)8?S )$ 18)8,M.(8 .= A =A+.*.)A $, ($)/
ascertain the purpose
for whose benefitJ 8mployer or employeeJ
.f for employee, is it deductible or notJ4apply the ;
re2uisites for deductibility 7
SUPPLEMENTS= $e&!e$
AtoF3Big We6ge Assn v. AtoF3Big We6ge Co.
(7 +*il '(2
%SH??*8M8()S constitute e&tra remuneration or special
privileges or benefits given to or received by the laborers
over and above their ordinary earnin4s or /a4es.'
=A+.*.).8S :S. SH??*8M8()S
=acilities are wage9deductible, supplements are not.
)he classification of an item of e&pense as a facility or a
supplement will depend on the 7@r7ose and not on the
!ind.
So if it is principally or mainly for the benefit of the
employee, classify as facilities, and the fair and reasonable
value of that can be considered as deductible from the
employeeCs wage.
EMPLO(EE BENEFITS

WOR:ERNS LIEN
Art ./,/ CC? )he laborerCs wages shall be a lien on the
goods manufactured or the wor! done.
Re"so? 0y virtue of this new lien, the laborers who are not
paid by an unscrupulous and irresponsible industrialist or
manager may by legal means have the goods manufactured
thru the sweat of their brow sold, and out of the proceeds get
their salary, returning the e&cess, if any K,eport +ode
+ommission, p.1L
3oo$s M"@&"ct@re$ or t6e %orH $oe
,efers to personal property, not real property. And even
here, the lien is allowed the laborer only if he was directly
employed or engaged by the owner. )he rule does not
apply if contractor, with men under him, had underta!en
the job.
EXEMPTION FROM EXECUTION OR ATTACHMENT
Art ./,A CC? )he laborerCs wages shall not be subject to
e&ecution or attachment, e&cept for debts incurred for food,
shelter, clothing and medical attendance.
3R? <ages are not subject to e&ecution.
EJce7t!o? 1ebts incurred for support such as food, shelter,
clothing, medical attendance.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
15 of 61
SUN TZU NOTES
)he rule applies even when the wages are still in
the possession of the employer whose properties
may have been attached.
S"#"r!es $@e to 'o5er)et e)7#o+ees c"ot
*e '"r!s6e$ *e&ore t6e+ "re 7"!$ to t6e
e)7#o+ees cocere$ *ec"@se?
1. )he incentive for wor! would be lost
#. >enerally, the state cannot be suedM and
;. =inallly, technically, before disbursements, the
money still belongs to the government.
Art ./,- CC? )he employer shall neither sei3e nor
retain any tool or other articles belonging to the
laborer.
(o sei3ure or retention by the employer
METHODS OF FIXIN3 COMPENSATION
A. )ime Kdaily and monthly paid wor!ersL
0. +ommission
+. Fob or tas! basis
1. ?iece9rate basis Kpayment by resultsL
.M?$,)A(+8 $= M8)@$1S $= =.D.(>
+$M?8(SA).$(
(ot determinative of employer9employee
relationship.
)here are certain laws which e&clude certain
employees from enjoying certain benefits
depending on the methods of fi&ing their
compensation.
8&. 1;
th
mo. ?ay which e&cludes job or tas! basis
and purely on commission employees, under Art
6#, wor!ers paid by results are e&empted from
overtime pay, service incentive leave, etc.
4conditions of employment7.
WA3E= $e&!e$
Art -/C&D
<A>8 paid to employee shall mean the
remuneration or earnings, however designated,
capable of being e&pressed in terms of money,
whether fi&ed or ascertained on a t!)e, t"sH,
7!ece, or co))!ss!o *"s!s, or ot6er )et6o$
o& c"#c@#"t!' t6e s")e, which is payable by an
employer to an employee under a written or
unwritten contract of employment for wor! 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 *abor,
of board, lodging, or other facilities customarily
furnished by the employer to the employee.
A. TIME SPENT
$nce the agreed period of wor! is completed, the
compensation is earned and becomes due
regardless of result. )he standard forms of
compensation based on time spent are salaries or
wages by the day, wee!, or monthly.
2 CLASSIFICATIONS OF EMPLO(EES BASED ON
TIME SPENT
1. 1aily9paid
#. Monthly9paid
.. DAIL(0PAID EMPLO(EES
)hose employees who are paid on the days
actually wor!ed e&cept unwor!ed regular
holidays when they are paid their basic wage if
they are present or a leave with pay on the
wor!ing day preceding the regular holiday.
%(o wor! no pay'
Advantage/ =le&ibility in the reduction of wor! force fro
any given period according to circumstances such as slac!
in demand, non9availability of materials, etc.
,8M81A =$, 1$<(S.O.(>
+ompressed wor!wee!
,educe wor!ing days
)emporary suspension of operations of not more than "
months 4no wor! no pay7
2. MONTHL(0PAID EMPLO(EES
?aid everyday of the month including unwor!ed rest days,
special days and regular holidays. .t is the standard
compensation rate for managerial personnel,
professionals, administrative employees and other white
collar wor!ers, including clerical employees and higher
grade s!illed wor!ers.
A1:A()A>8/ relative economy in record!eeping, and
higher morale of employees resulting from association of
this method with tenure and permanency.
B. >OB OR TAS: RATE
A flat or fi&ed sum for each particular job or tas!
completed, without regard to the number f hours actually
spent in the performance or completion.
Appropriate only on the following conditions/
a.
b.
C. PIECE WOR:, OR B( THE OUTPUT IN TERMS OF
WOR: UNITS
a. <ithout regard to time spent.
b. *abor contributed by each determinable and
separable from each other
c. )he value of the labor input for any particular stage
is standard.
More advantageous from those paid on time spent.
D. COMMISSION
A1:A()A>8/ 8ncourage the wor!er to be more
productive.
=i&ed percentage is effected on sales.
TA:E NOTE? <or!ers shall be paid the minimum wage even
if paid on job or piece rate basis.
=.D.(> 8M?*$A88S <A>8
a. wage increase
b. resolving wage distortion
RA B/2/
WA3E RATIONALIOATION ACT
,#&-RTANC(. this law which amended the labor code will
tell us the different government agencies involved in the
fi&ing of wages and also how to resolve wage
distortion4procedure in case wage distortion results in fi&ing
wage7
?H,?$S8/ was intended to rationali3e wagesM
=.,S), by providing for full9time boards to police wages
round9the9cloc!.
S8+$(1, by giving the boards enough powers to achieve this
objective.
POLICIES OF THE STATE
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
16 of 61
SUN TZU NOTES
1. )o rationali3e the fi&ing of the minimum wage.
L!)7ort"tM
.t has been rationali3ed because article 1# of
this ,A provides for the standards and criteria
that should guide the agency of government
when it comes to fi&ing the minimum wage. .t is
noted that under the standard criteria, that the
congress has tried to weigh the factors involving
the employers, as well as the factors involving
the laborers when it comes to fi&ing of
employeeCs wage in order to rationali3e it.
0efore ,A "7#7, it was only MalacaVang through
a ?1 that dictates how much should be the
minimum wage in the ?hilippines. Most often
than not, those employers in the far9flung areas
are adversely affected because the fi&ing of
minimum wage is not rationali3ed. .t does not
ta!e into consideration, for e&ample, the
capitali3ation of the employer, the profit
e&pected, the cost of living in a particular area.
<ith the advent of ,A "7#7, the law deems it
necessary that there shall be tandard criteria in
fi&ing the employeeCs wage.
St"$"r$s or Cr!ter!" &or M!!)@) W"'e F!J!'
Art .24 RA B/2/
a. )he demand for living wagesM
b. <age adjustment vis9W9vis the consumer price
inde&M
c. )he cost of living and changes or increases
thereinM
d. )he needs of wor!ers and their families
e. )he need to induce industries to invest in the
countrysideM
f. .mprovements in standards of living
g. )he prevailing wage levelsM
h. =air return of the capital invested and capacity to
pay of employersM
i. 8ffects on employment generation and family
incomeM and
j. )he e2uitable distribution of income and wealth
along the imperatives of economic and social
development.
#. )o promote productivity9improvement and gain9
sharing measures to ensure a decent standard of
living for the wor!ers and their family.
;. )o guarantee the rights of labor to its just share
in the fruits of production
. )o enhance employment generations in the
countryside through industry dispersal.
-. )o allow business and industry reasonable returns
on investment, e&pansion and growth.
". )he state shall promote co##ect!5e *"r'"!!'
as the primary mode of setting wages and other
terms and conditions of employmentM and
whenever necessary, the minimum wage rates
shall be adjusted in a fair and e2uitable manner,
considering e&isting regional disparities in the
cost9of9living and other sociao9economic factors
and the national economic and social
development plans. L!)7ort"tM
)his is an important policy because it promotes
collective bargaining as a mode of settling labor
disputes
IlaH at B-Flo6 ng ManggagaHa vs. NLRC
R (%(!"$ "#&'7&(%
%)he policy of the state is promoting collective
bargaining as a mode of settling labor dispute.
)here was a wage distortion affecting the
establishment and what the employees did was to
stage a stri!e in order to compel the employer to solve wage
distortion. )he S+ said ($. .f ,A "7#7 is e&amined, stri!e is
not provided as a solution in resolving wage distortion. .t
should be through collective bargaining. )herefore, the S+
declared the stri!e as illegal because the ,ules .mplementing
,A "7#7 provides for a specific and detailed approach on how
to resolve wage distortion short of stri!e or loc!out.'
3O4ERNMENT A3ENCIES IN4OL4ED
A. N"t!o"# W"'es "$ Pro$@ct!5!t+ Co))!ss!o
LNWPCM
ART. .2, LC. Creation of 3ational .a4es and 2roductivity
Commission& 9 )here is hereby created a (ational <ages and
?roductivity +ommission, hereinafter referred to as the
+ommission, which shall be attached to the 1epartment of
*abor and 8mployment 41$*87 for policy and program
coordination. 4As amended by ,epublic Act (o. "7#7, Fune 9,
19697.
1etermines the officesEhead2uarters of the respective
,egional )ripartite <ages and ?roductivity 0oards.
Art 1#1+ 4As amended by ,epublic Act (o. "7#7, Fune 9,
19697 grants the (<?+ the power to prescribe rules and
guidelines for the determination of appropriate wages in
the country.
Note? >uidelines issued by the ,)<?0 without the approval
of, or worse, contrary to those promulgated by the (<?+ are
ineffectual, void and cannot be the source of rights and
privileges.
Co)7os!t!o L/M
Art 1#1 *+ 4As amended by ,epublic Act (o. "7#7, Fune
9, 19697.
1. 8&9$fficio +hairman
Secretary of 1$*8
#. 8&9$fficio :ice9+hairman
1irector9>eneral of (81A
;. )wo 4#7 members each from wor!ers and employers
sectors
who shall be appointed by the ?resident of the ?hil
upon recommendation of the Secretary of 1$*8 to be made
on the basis of the list of nominees submitted by the wor!ers
and employers sectors, respectively.
. )he 8&ecutive 1irector shall also be a member of the
+ommission
Secretariat Kheaded by 8&ecutive 1irectorL
8&ecutive 1irector
shall be appointed by the ?resident of the ?hil upon
recommendation of the Secretary of 1$*8
# 1eputy 1irectors
shall be appointed by the ?resident of the ?hil upon
recommendation of the Secretary of 1$*8
B. Re'!o"# Tr!7"rt!te W"'es "$ Pro$@ct!5!t+ Bo"r$s
LRTWPBM
ART. .22 LC. Creation of 'e4ional (ripartite .a4es and
2roductivity Aoards& 9 )here is hereby created ,egional
)ripartite <ages and ?roductivity 0oards, hereinafter referred
to as ,egional 0oards, in all regions, including autonomous
regions as may be established by law. )he +ommission shall
determine the officesEhead2uarters of the respective ,egional
0oards. 4As amended by ,epublic Act (o. "7#7, Fune 9,
19697.
)he S+ is of the opinion that +ongress meant the boards
to be creative in resolving the annual 2uestion of wages
without labor and management !noc!ing on the
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
17 of 61
SUN TZU NOTES
legislatureCs door at every turn. )he +ourtCs
opinion is that if ,A "7#7 intended the board
alone to set floor wages, the Act would have no
need for a board but an accountant to !eep trac!
of the latest consumer price inde&, or better
would have +ongress done it as the need arises,
as the legislature, prior to the Act has done so for
years.
Co)7os!t!o L/M
Art 1## *+ 4As amended by ,epublic Act (o.
"7#7, Fune 9, 19697.
1. +hairman
,egional 1irector of 1$*8
#. :ice9+hairmen
,egional 1irector of (81A
,egional 1irector of 1).
;. )wo 4#7 members each from wor!ers and
employers sectors
who shall be appointed by the ?resident of
the ?hil, upon the recommendation of the Secretary
of 1$*8, to be made on the basis of the list of
nominees submitted by the wor!ers and employers
sectors, respectively.
Secretariat
Assisting each 0oard
PROHIBITION A3AINST IN>UNCTION
Art .2B LC. &ro'ibition Against ,n/unction.0(o
preliminary or permanent injunction or temporary
restraining order may be issued by any court,
tribunal or other entity against any proceedings
before the +ommission or the ,egional 0oards 4As
amended by ,epublic Act (o. "7#7, Fune 9, 19697.
NWPC 3@!$e#!es No. ,,.0-2
Re5!se$ R@#es o& Proce$@res o M!!)@) W"'e
F!J!', Ser!es o& .--2
this is adopted and promulgated by (<?+
pursuant to Art 1#1+ *+ 4As amended by
,epublic Act (o. "7#7, Fune 9, 19697
these are rules governing proceedings in the
(<?+ and the ,)<?0 in the fi&ing of minimum
wage rates.
=or full te&t refer to =$O p7"
CONCEPTS= BASIC WA3E= STATUTOR(
MINIMUM WA3E= WA3E ORDER
BASIC WA3E
means all the remuneration or earnings paid by
an employer to a wor!er for services rendered on
normal wor!ing days and hours but does not
include cost9of9living9allowances, profit sharing
payments, premium payments, 1;
th
month pay or
other monetary benefits which are not considered
as part of or integrated into the regular salary of
the wor!ers on the date the act became effective.
4definition of terms .,, of ,A"7#77
STATUTOR( MINIMUM WA3E
is the lowest wage rate fi&ed by law that an
employer can pay his wor!ers. 4definition of
terms .,, of ,A"7#77
WA3E ORDER
refers to the order promulgated by ,)<?0
pursuant to its wage fi&ing authority.
PURPOSE OF MINIMUM WA3E
1. )o promote productivity9improvement and gain9sharing
measures to ensure a decent standard of living for the
wor!ers and their families.
#. )o guarantee the rights of labor to its just share in the
fruits of production.
;. )o enhance employment generation in the countryside
through industry dispersal and to allow business and
industry reasonable returns on investment, e&pansion and
growth.
. )o affirm, as the +onstitution e&presses it, labor as a
primary social economic force.
-. )hat wages are distributed evenly, and more importantly,
social justice is subserved.
AD4ANTA3ES OF MINIMUM WA3E
1. ,educes the evils of the %sweating system'.
"*eating "$ste!.
the e&ploiting of wor!ers at wages so low as to be
insufficient to meet the bare cost of living.
#. 0enefits directly the low9paid employees, who now receive
inade2uate wages on which to support themselves and
their families.
;. 0enefits all wage earners indirectly by setting a floor
below which their remuneration cannot fall.
. .t raises the standard of competition among employers,
since it would protect the fair9minded employer who
voluntarily pays a wage that supports the wage earner
from the competition of the employer who operates at
lower cost only by reason of paying his wor!ers a wage
below subsistence.
-. @elps employees pay off the needed social security
program.
)his program would re2uire contribution from the
employees themselves, and would be unjust to re2uire
such a contribution of those whose wages are not enough
for their subsistence. .t is unreasonable to as! a man to
set aside something for the future when he does not have
enough to eat today.
DISAD4ANTA3ES OF MINIMUM WA3E
1. .t causes
wage distortion.
#. May lead to
unemployment.
2rofessor =in4 declared %it is clear that the effectG to
throw out employment to all persons whose 2ualifications
are not such that enable them to earn more than the legal
minimum. .f wages are forced up to the point higher than
what the wor!er is economically worth, the power wor!er
may be dismissed and the law is anti9social.
;. .t would
pauperi3e the wor!er, destroy their self9respect and ma!e
them miserable.
. 0rings
depression and thus impoverish the nation.
-. +onstitutes
infringement to the wor!erCs right to labor as he could
not dispose of the same under terms and conditions he
may see fit.
". <ill tend to
become the ma&imum.
EMPLO(EENS RI3HT TO A LI4IN3 WA3E 4S. RI3HT OF
EMPLO(ER TO REASONABLE RETURN OF IN4ESTMENT
0A*A(+.(> $= ,.>@)S
<hile labor is entitled to a just share in the fruits of
production, the enterprise has an e2ually important right
not only to reasonable returns on investment but also to
e&pansion and growth.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
18 of 61
SUN TZU NOTES
)he +onstitution recogni3es that the private
sector plays an indispensable role something the
state cannot do without. At the same breath,
labor is called the primary social economic force.
0ecause one is %indispensable' and the other is
%primary', how can it be said that one is more
important, or deserves greater protectiBn than
the otherJ4A3ucena 0oo! . p1;7
POWER TO ISSUE WA3E ORDERS
Art .22 LC. (he 'e4ional Aoards shall have the
follo/in4 po/ers and functions in their respective
jurisdictionC
b. )o determine and fi& minimum wage rates
applicable in their region, provinces or industries
therein and to issue the corresponding wage orders
subject to guidelines issued by the +ommission 4As
amended by ,epublic Act (o. "7#7, Fune 9, 19697.
<age $rders issued by the 0oards cover only
private sector wor!ers, e&cept for household
helpers and persons in the personal employ of
another, including family drivers.
PROCEDURES IN MINIMUM WA3E FIXIN3
Sect!o 1& 2rocedures in 6inimum .a4e Di?in4&
1a2 #otu &rorio b$ t'e 3oard
<henever conditions in the region, province or
industry so warrant, the 0oard may, motu proprio or
as directed by the +ommission, initiate action or
in2uiry to determine whether a wage order should be
issued. )he 0oard shall conduct public hearings in
the manner prescribed under this ,ule and ,ule ....
)he 0oard may also conduct consultations with
concerned sectorsE industries.
1b2 3$ 4irtue of a &etition 5iled
"* Dorm and Content of 2etition&
Any party may file a verified petition for wage
increase with the appropriate 0oard in ten 41B7
typewritten legible copies which shall contain the
following/

4a7 nameEs, and addressEes of petitionerEs and
signatureEs of authori3ed officialEsM
4b7 grounds relied upon to justify the increase being
soughtM
4c7 amount of increase being soughtM
4d7 area andEor industry covered.
2* Aoard Action&
.f the petition conforms with the re2uirements
prescribed in the preceding sub9section b.1., the
0oard shall conduct public hearings in the manner
prescribed under this ,ule and ,ule ..., to determine
whether a wage order should be issued. )he 0oard
may also conduct consultations with concerned
sectorsEindustries.
3* 2ublication of 3otice of 2etitionE2ublic @earin4&
A notice of the petition andEor public hearing shall be
published in a newspaper of general circulation in the
region andEor posted in public places as determined
by the 0oard. )he notice shall include the nameEs
and addressEes of the petitionerEs, the subject of the
petition and the dateEs, placeEs and time of the
hearings. )he publication or posting shall be made at
least fifteen 41-7 days before the date of initial
hearing and shall be in accordance with the suggested form
attached as Anne& SAS.
;* +pposition&
Any party may file his opposition to the petition on or before
the initial hearing, copy furnished the petitionerEs. )he
opposition shall be filed with the appropriate 0oard in ten
41B7 typewritten legible copies which shall contain the
following/
4a7 nameEs and addressEes of the oppositorEs and
signatureEs of authori3ed officialEsM
4b7 reasons or grounds for the oppositionM and
4c7 relief sought.
5* Consolidation of 2etitions&
.f there is more than one petition filed, the 0oard may, motu
propio or on motion of any party, consolidate these for
purposes of conducting joint hearings or proceedings to
e&pedite resolutions of petitions. ?etitions received after
publication of an earlier petition need not go through the
publicationEposting re2uirement.
6* Assistance of +ther ,overnment and 2rivate
+r4ani-ations&
)he 0oard may enlist the assistance and cooperation of any
government agency or private person or organi3ation to
furnish information in aid of its wage fi&ing function.
?,$?8, ?A,)A
*egitimate labor organi3ation or the employer
.f employed in an establishment, the employee cannot go
to court and file a petition for a wage increase because the
employee is not considered a proper party. .t must be an
employer or a legitimate labor organi3ation.
0$A,1
May deny, grant or not ta!e an action
<age $rder if granted, maybe issued by the 0oard
pursuant to its rule9ma!ing power and ta!es effect 1-
days after publication.
Q? ,emedy for the issuance of <age $rder
A? Appeal to (<?+ not later than ten 41B7 days from the
date of publication of the $rder.
Q? >roundsJ
A? 4a7 non9conformity with prescribed guidelines andEor
proceduresM 4b7 2uestions of lawM 4c7 grave abuse of
discretion.
Q? 1oes it suspend the effectivity of the <$J
A? (o, post a bond e2uivalent to the increase embodied in
the wage order if you want it suspended.
RE3IONAL TRIPARTITE WA3ES AND PRODUCTI4IT(
BOARD LRTWPBM
Metro+olitan BanF an6 Tr-st Co:+any$ In5. vs. NW)C an6
RTW)B3 Region II
.R. No. %224''$ "'&'#&"7
%.n line with ,A (o. "7#7Cs policy, (<?+ was created to
prescribe rules and guidelines for the determination of
appropriate minimum wage and productivity measures at the
regional, provincial or industry levels. .t authori3ed ,)<?0 to
determine and fi& the minimum wage rates in their respective
regions, provinces or industries therein and issue the
corresponding wage orders, subject to the guidelines issued
by the (<?+. ?ursuant to its wage9 fi&ing authority, the
,)<?0 may issue wage orders which set the daily minimum
wage rates based on the standards or criteria set by Art. 1#
of the *abor +ode.
APPEAL PROCEDURE LNWPCM
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
19 of 61
SUN TZU NOTES
)he +ommission may review the <age $rder
issued by the 0oard motu proprio or upon appeal
(o more appeal from (<?+
,emedy is ,ule "- 4grave abuse, +A7, then ,ule
- 42uestions of law, S+7M note/ not ,ule ;
4because it e&cludes (<?+7
Sect!o .& Appeal to the Commission. Any party
aggrieved by a <age $rder issued by the 0oard may
appeal such $rder to the +ommission by filing a
verified appeal with the 0oard in three 4;7
typewritten legible copies,. )he appeal shall be
accompanied by a memorandum of appeal which
shall state the grounds relied upon and the
arguments in support of the appeal.
)he 0oard shall serve notice of the appeal to
concerned parties.
=ailure to file an appeal within the reglementary
period fi&ed under this section or to submit the
re2uired documents shall be a ground for dismissal
of the appeal.
Sect!o 2. ,rounds for Appeal. An appeal may be
filed on the following grounds/
4a7 non9conformity with prescribed guidelines andEor
proceduresM
4b7 2uestions of lawM
4c7 grave abuse of discretion.
Sect!o 1. (ransmittal of 'ecords& .mmediately
upon receipt of the appeal, the 0oard Secretariat
shall transmit to the +ommission Secretariat the
appeal and a copy of the subject <age $rder
together with the complete records of the case and
all relevant documents.
Sect!o 4. 2eriod to Act on Appeal& )he +ommission
shall decide on the appeal within si&ty 4"B7 days
from the filing of said appeal.
Sect!o 2& Effect of Appeal. )he filing of the appeal
does not operate to stay the $rder unless the party
appealing such $rder shall file with the +ommission
an underta!ing with a surety or sureties satisfactory
to the +ommission for payment to employees
affected by the $rder of the corresponding increase,
in the event such $rder is affirmed.
)ag3asa Steel WorFs v. CA
R %###27? "4&4%&"#
%(o right to wage increase for employees already
receiving minimum wageM no across the board
effect.'
MetrobanF. vs. NW)C @ RTW)B3 Region II
R %224''$ ,ebr-ary '#$ '""7
I<hen it issues a wage order, the ,)<?0 e&ercises a
2uasi9legislative power and not 2uasi9judicial power.
)he decision of ,)<?0 is appealable to (<?+, not to
+A.
)he +ourt finds that Sec. 1, <age $rder (o. ,B#9B;
is void insofar as it grants a wage increase to
employees earning more than the minimum wage
rate and valid with respect to employees earning the
prevailing minimum wage rate.
)he +ourt in Employers Confederation of the
2hilippines v& 3ational .a4es and 2roductivity
Commission declared that there are two ways of
fi&ing the minimum wage/ the %floor9wage' method
which involves the fi&ing of a determinate amount to
be added to the prevailing statutory minimum wage
rates and the %salary9ceiling' method in which the
wage adjustment was to be applied to employees receiving a
certain denominated salary ceiling.
.n the instant case, the ,)<?0 did not set a wage level nor a
range to which a wage adjustment or increase shall be added.
.nstead it granted an across9the9board wage increase of ?1-
to all employees and wor!ers of ,egion ... .n doing so, it
e&ceeded its authority by e&tending the coverage of the <age
$rder to wage earners receiving more than the prevailing
minimum wage rate, without a denominated salary ceiling. .t
granted additional benefits not contemplated by ,A (o.
"7#7.'
WA3E ORDERS APPLICABLE IN CEBU, MANDAUE AND
LAPU0LAPU CIT(
000000000INSERT NEW WA3E ORDER000000000000000
EXEMPTION FROM MINIMUM WA3E
8&emption from minimum wage may be by/
a. $peration of *aw 4e&. Art 96 *+7M or
b. Application 4(<?+ >uidelines7
A. B( APPLICATION
.. NWPC 3@!$e#!es No. ,. Ser!es o& .--B
Re5!se$ 3@!$e#!es o EJe)7t!o &ro) W"'e or$ers
8D8M?)81 =,$M <A>8 $,18,S .SSH81 0A ,)<?0
1. 1istressed 8stablishments
#. (ew 0usiness 8nterprises
;. ,etailEService 8stablishments ,egularly 8mploying (ot
More )han )en <or!ers
. 8stablishments Adversely Affected by (atural +alamities
Note? )he 0oard, upon strong and justifiable reasons,
subject to the review or approval by the +ommission may
e&empt establishments other than those enumerated above if
they are in accord with the rationale of e&emption.
See page "9 =$O Appendi& O for the full te&t
)hese are rules on e&emption from compliance with the
prescribed wage increasesEcost of living allowances
granted by the ,)<?0s.
B. B( OPERATION OF LAW
2. EJe)7t!o @$er t6e L"*or Co$e
Art -A. Alication of Title. 000 )his title K<agesL shall not
apply to farm tenancy or leasehold, domestic service and
persons wor!ing in their respective homes in needle wor! or
in any cottage industry duly registered in accordance with
law.
,elate this to employment of home wor!ers, page ;; =$O.
.f a home wor!er performs needle wor! in or at his home,
that person is e&empted from employing the minimum
wage by operation of law. So employers of these
employees are not obliged to comply with the minimum
wage. .f you are employing a house helper, you are not
covered by the minimum wage by operation of law. )hat
means you do not have to file an application for
e&emption, and you do not have to comply with the
prevailing minimum wage.
1. EJe)7t!o U$er S7ec!"# L"%
B"r"'"+ M!cro B@s!ess Eter7r!ses Act o& 2,,2
LRA -./AM
Sect!o 1. 1efinition of )erms
4a7 PB"r"'"+ M!cro B@s!ess Eter7r!se,S hereinafter
referred to as 0M08, refers to any business entity or
enterprise engaged in the production, processing or
manufacturing of products or commodities, including agro9
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
20 of 61
SUN TZU NOTES
processing, trading and services, whose total assets
including those arising from loans but e&clusive of
the land on which the particular business entityTs
office, plant and e2uipment are situated, shall not be
more than )hree M!##!o Pesos CP1,,,,,,,,.,,D
)he Above definition shall be subjected to review and
upward adjustment by the SM81 +ouncil, as
mandated under ,epublic Act (o. "977, as amended
by ,epublic Act (o. 6#69.
=or the purpose of this Act, FserviceF shall e&clude
those rendered by any one, who is duly licensed
government after having passed a government
licensure e&amination, in connection with the
e&ercise of oneTs profession.
Sect!o 2. W6o "re E#!'!*#e to Re'!ster 5 Any
person, natural or juridical, or cooperative, or
association, having the 2ualifications as defined in
Section ;4a7 hereof may apply for registration as
0M08.
Sect!o A. EJe)7t!o &ro) t6e Co5er"'e o& t6e
M!!)@) W"'e L"% 5 )he 0M08s shall be e&empt
from the coverage of the Minimum <age *aw/
?rovided, )hat all employees covered under this Act
shall be entitled to the same benefits given to any
regular employee such as social security and
healthcare benefits.
POWER TO ISSUE RULES ON EXEMPTION=
NWPC
ART. .2.. &o*ers and functions of t'e
Co!!ission& 9 )he +ommission shall have the
following powers and functions/
C*D )o formulate policies and guidelines on wages,
incomes and productivity improvement at the
enterprise, industry and national levelsM 4As
amended by ,epublic Act (o. "7#7, Fune 9, 19697
Po%er to 3r"t EJe)7t!os= RTWPB
ART. .22. Creation of Regional Triartite
6ages and &roductivit$ 3oards. 5 &&& )he
,egional 0oards shall have the following powers and
functions in their respective territorial jurisdictions/
CeD )o receive, process and act on applications for
e&emption from prescribed wage rates as may be
provided by law or any <age $rderM and
Re"so &or EJe)7t!o? A wage e&emption is
intended to assist financially beleaguered companies
to meet their labor cost without endangering the
viability of the company.
Nasi+it L-:ber vs. NW)C
'!( SCRA ##7
%)he power to prescribe guidelines is lodged in the
(<?+, not in the ,)<?0. )his is clearly provided for
in Article 1#1 of ,A "7#7, amending the *abor +ode.
.t grants the (<?+, not the ,)<?0, the power to
prescribe rules and guidelines for the determination
of minimum wage and productivity measure.
<hile the ,)<?0 may issue wage orders under
Article 1##4b7 of the *abor +ode, such orders must
be under the guidelines of the (<?+. @owever, the
(<?+ has the power not only to prescribe guidelines
to govern wage but also to issue e&emptions
therefrom, as the said rule provides that whenever a
wage order provides for an e&emption, application
thereto must be filed with the appropriate 0oard
which shall process the same, subject to guidelines
which the ,)<?0 implements. Significantly, the
(<?+ authori3ed the ,)<?0 to issue e&emptions
from wage orders, but subject to its review and
approval. Since the (<?+ never assented to >uideline (o.;
of the ,)<?0, the said guideline is inoperative and cannot be
used by the latter in deciding or acting on petitionersC
application for e&emption.'
RC)I vs. National Wages Co-n5il
'"7 SCRA 1!%
?H,?$S8 $= <A>8 8D8M?).$(M 1.S),8SS81
8S)A0*.S@M8()
%)he purpose of wage e&emptions is to help financially
distressed companies meet their labor costs without
endangering the e&istence or viability of the firm upon which
both management and labor depend for a living.
Hnder the spirit of <age $rder (o. ", it is the actual ability of
a firm to spend for its current needs and costs and not how
the assets and liabilities of a firm may appear in the technical
jargon of higher accounting principles which is important.
)rue, the retained earnings account constitutes a companyTs
accumulated profits of losses. @owever, it is not enough to
treat said earnings as SearningsS in the real sense of the word
for purposes of wage e&emptions.
=or purposes of compliance with the law on wage e&emptions,
however, the retained earnings arising from appraisal
increment do not represent hard cash but merely theoretical
increases resulting from upward valuations of old fi&ed assets.
)here is no income or profit from the sale of goods or
services. (o income is reali3ed from the reappraisal of fi&ed
assets until such a time as the machinery, e2uipment, and
other fi&ed assets are sold or disposed of in the event of a
li2uidation of assets.
)he (<?+ ruling treats the revaluation increment as similar
to the sale of fi&ed assets. .n the same way, however, that
machinery and e2uipment should not be sold in order to meet
increases in the wages of wor!ers 4for this would destroy not
only the company but the employment of the wor!ers
themselves7 so should a similar attitude be adopted when
machinery or e2uipment is not sold but merely revalued. $n
1ecember 1", 196", the (<?+, through then Secretary
Augusto 0. Sanche3 9 its chairman, approved the application
for e&emption of ,+?. and stated, among other things, that/
S)he 8&ecutive +ommittee, therefore, recogni3es the
necessity to set aside technicalities re2uired by e&isting
criteria under (<+ ?olicy >uidelines (os. " and 6 and bestow
greater significance to the actual financial condition of ,+?..S
(<?+ found that ,+?.Ts compliance with the <age $rders
would result in the companyTs financial dislocation and,
accordingly, granted it the prayed for e&emption. <e see no
reason from the records why a different treatment should
apply in the following year.'
C )lanas Co::er5ial vs. NLRC
4"4 SCRA 2(
,8)A.* 8S)A0*.S@M8()
%?etitioners invo!e the e&emption provided by law for retail
establishments which employ not more than 1B wor!ers to
justify their non9liability for the salary differentials in
2uestion. )hey insist that ?*A(AS is a retail establishment
leasing a very small and cramped stall in the 1ivisoria Mar!et
which cannot accommodate more than 1B wor!ers in the
conduct of its business.
)he S+ is unconvinced. )he records disclosed de los ,eyesC
clear entitlement to salary differentials.
Section 4c7 of ,A "7#7 categorically provides/
,etail or service establishments regularly employing not more
than 1B wor!ers may be e&empted from the applicability of
this Act upon application with and as determined by the
appropriate ,egional 0oard in accordance with the applicable
rules and regulations issued by the +ommission. <henever an
application for e&emption has been duly filed with the
appropriate ,egional 0oard, action on any complaint for
alleged non9compliance with this Act shall be deferred
pending resolution of the application for e&emption by the
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
21 of 61
SUN TZU NOTES
appropriate ,egional 0oard. .n the event that the
applications for e&emptions are not granted,
employees shall receive the appropriate
compensation due them as provided for by this Act
plus the interest of 1U per month retroactive to the
effectivity of this Act 4emphasis supplied7.'
WA3E DISTORTION= CONCEPT ; ELEMENTS
ART. .24. "tandards7Criteria for !ini!u!
*age fi8ing.
&&& As used herein, a W"'e D!stort!o shall mean
a situation where an increase in prescribed wage
rates results in the elimination or severe contraction
of intentional 2uantitative differences in wage or
salary rates between and among employee groups in
an establishment as to effectively obliterate the
distinctions embodied in such wage structure based
on s!ills, length of service, or other logical bases of
differentiation.&&& 4As amended by ,epublic Act (o.
"7#7, Fune 9, 19697.
ELEMENTS OF WA3E DISTORTION
BanFar6 E:+loyees 9nion J WorFers Allian5e
Tra6e 9nions v. NLRC @ BanFar6$ R No. %2"#!($
,eb. %7$ '""2
%8*8M8()S $= <A>8 1.S)$,).$(
1. An e&isting hierarchy of positions with
corresponding salary rates.
#. A significant change in the salary rate of a lower
pay class without a concomitant increase in the
salary rate of a higher one.
;. 8limination of the distinction between the two
levels.
. 8&istence of the distortion in the same region of
the country.
0asic assumption is there e&ists a classification of
employees that establishes distinctions among them
on some relevant or legitimate bases.'
=or salary distortion to e&ist, as defined in Art.
1#, the law does not re2uire that there be an
elimination or total abrogation of 2uantitative
wage or salary differencesM a severe contraction
is enough.
)his means, briefly, the disappearance or virtual
disappearance of pay differentials between lower
and higher positions in an enterprise because of
compliance with a wage order.
An employee has reason to complain whose pay
level advantage is e2ualed or almost e2ualed or
overta!en through a mandated wage increase.
=or instance, if a wage order raised a messengerTs
daily pay from ?196 to ?##;, almost e2ualing a
technicianTs pay of ?##-, the technician may
complain of salary distortion because his pay
advantage 4due to nature of job7 has been sig9
nificantly reduced from ?#7 to ?# only.
EJ")7#e? .f %A' was receiving a daily salary which
was ?1BB higher than that of %0' who is %ACs'
subordinate, but, because of a wage order increase
given to %0', the ?1BB advantage disappeared or was
reduced to say, ?;B, then it may be said that the
salary distinction between A and 0 has been
distorted. %A' may complain of a salary distortion.
1isparity in pay of two or more employees
holding the same position does not necessarily
mean salary distortion referred to in Art 1#.
)here is no distortion if the employees, whose
wages are being compared, are located in
different regions. )his is because wage9fi&ing has been
regionali3ed by ,A "7#7.
@ow to rectify the distortion is not specified in the law.
)he +ourt has pointed out that through Art. 1# the law
recogni3es the validity of ne4otiated /a4e increases to
correct wage distortions. )he legislative intent is to
encourage the parties to see! solution to the problem of
wage distortions through voluntary negotiation or
arbitration, rather than stri!es, loc!outs, or other
concerted activities of the employees or management.
)he +ourt has adopted the following formula as Sjust and
e2uitableS to correct a salary distortion/
Mini <age X, YX.
99999999999999 Z U & ?rescribed .ncrease Z 1istortion
Actual salary
Adjustment
Any issue involving wage distortion is not a valid ground for a
stri!e or loc!out.
8ach region has a regional wage board which, in fi&ing
the wage level, considers criteria or standards e&isting in
the region. Since those criteria vary from one region to
another, the pay levels of comparable jobs also tend to vary
among regions. 0ut pay disparity of same or comparable
jobs in different regions cannot be considered wage
distortion. <age distortion, in other words, involves
comparison of jobs located in the same region.
8&amination of alleged salary distortion is limited to jobs
or positions in the same employer within a region.
)herefore, the comparison of salaries has to be intra1
re4ion not inter1re4ion re4ion.
Q? .s an employer legally obliged to try and correct a wage
distortionJ
A? .t appears so, under Art. 1#9 .t says that Sthe employer
and the union shall ne4otiate to correct the distortions.S .f
there is no union, Sthe employer and wor!ers shall endeavor
to correct such distortions.S
Q? Must the previous pay advantage be restoredJ
A? )hat indeed is the aim but not necessarily to the last
peso. An appreciable differential, a significant pay gap,
should suffice as correction of the distortion.
Q? <hen does wage distortion happenJ
A? <hen the employer grants an increase only to a certain
group of employees drastically reducing or eliminating the
normal salary differential or gap.
Poss!*#e C"@ses o& W"'e D!stort!o
1. >overnment decreed increase through wage orders.
#. Merger of establishments Kconfusion or elimination of the
status of the employeeL
;. .ncrease granted by the employers
. ?assage of ,A "7#7 or the <age ,ationali3ation Act
)r-banFers Asso5iation vs. )r-6ential BanF an6 Tr-st
Co:+any
4"' SCRA 72
%1istortion does not arise when a wage order gives the
employees in one branch of a ban! higher compensation than
that given to their counterparts in other regions occupying the
same pay scale, who are not covered by the said wage order.
.n short, the implementation of the wage orders in one region
but not in others does not in itself necessarily result in wage
distortion.'
BanFar6 E:+loyees 9nion J WorFers Allian5e Tra6e 9nions
vs. NLRC @ BanFar6
R No. %2"#!($ ,eb. %7$ '""2
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
22 of 61
SUN TZU NOTES
)he 0oard of 1irectors of 0an!ard, .nc. approved a
%new salary scale' made retroactive for the purpose of
ma!ing its hiring rate competitive in the industryCs
labor mar!et. )his increased the hiring rate of new
employees by ?1BBB for levels . Q : and ?9BB for
levels .., ... and .:.
?etitioner pressed for the increase in the salary of its
old, regular employees. 0an!ard replied that there was
no obligation on the part of the management to grant
to all its employees the same increase in and across
the board manner.
S+ ruled that/
%Since it is clear that there is no hierarchy of
positions between the newly hired Q regular
employees of 0an!ard, first element is wanting.
)he formulation of wage structure through the
classification of employees is a matter of
management judgment and discretion.
.n relation to the ;rd element, the said gap is not
significant as to obliterate or result in severe
contraction of the intentional 2ualitative differences
in the salary rates between the employee group.
=urthermore, petitioner cannot legally obligate
0an!ard to correct the alleged %wage distortion' as
the increase in the wages and salaries of the newly
hired was not due to a prescribed law on wage
order.
,eliance in Metro )ransit $ng vs. (*,+ is misplaced
because there e&isted a %company practice' in that
case, in which not present in the instant case.'
METHODS OF RESOL4IN3 WA3E DISTORTION ;
TWO METHODS IN DETERMININ3 WA3ES
METHODS OF RESOL4IN3 WA3E DISTORTION
40rought about by the enactment or passage of a
wage order7
)he court has pointed out that thru the passage
of Art 1#, the law recogni3es the validity of
ne4otiated /a4e increases to correct wage
distortion.
)he legislative intent is to encourage the parties
to see! solution to the problem of wage
distortions through voluntary negotiation or
arbitration, rather than stri!es, loc!outs, or other
concerted activities of the employees or
management.
A. IF OR3ANIOED
a7 )he matter should be brought to the grievance
4machinery7 procedure under their +0A.
c7 .f no settlement is arrived at, the dispute should
be submitted to voluntary arbitration 4voluntary
arbitrator or panel of voluntary arbitrators7
(o number of :A specified by law
(o prohibition of *abor Arbiter to be :oluntary
Arbiter
(+M0 has a list of :A
1ecision of :A is final and e&ecutory after 1B
days from the receipt of the copy of the decision
by the parties, however, no M, is allowed, a ),$
maybe applied with +A or S+ to stay e&ecution of
the assailed judgment, and a ?etition for ,eview
under ,ule ; may be made to +A for 2uestion of
law or facts or both, then to S+ under ,ule -
$,>A(.O81 8S)A0*.S@M8()
,efers to a firm or a company where there is a recogni3ed
or certified e&clusive bargaining agreement.
<@A) S@$H*1 08 +$()A.(81 .( A +0A
1. terms and conditions of employment
#. wages
;. hours of wor!
. procedure for resolving grievances
B. IF UNOR3ANIOED
"D )he employer and the wor!ers should negotiate to correct
the distortion.
*D .f negotiations fail, the matter should be brought to the
(ational +onciliation and Mediation 0oard 4(+M07
(+M0 has no compulsory power, can only conciliate but
cannot decide a case.
?,$+81H,8
4a7 .nitiated by the filing of a complaint with the (+M0 on
the ground of wage distortion.
4b7 =ill up the complaint form provided by the (+M0.
4c7 )he ,egional 1irector of the (+M0 will now issue a
($).+8 $= @8A,.(> directed to the employer inviting him to
meet with them at a designated time, date, and place.
4d7 At the (+M0, the complainant 0 and the employer will
have to be present. )his proceeding will be supervised by an
(+M0 @earing $fficer.
)his is entirely different from the first step because the third
person 4(+M0 @earing $fficer7 now interferes and as!s the
employers, %@ow much can you affordJ' And to the
employees, %@ow much increase do you wantJ'
.n so doing, in ta!es into consideration the financial capacity
of the employer and the need of the wor!ers.
4e7 )he (+M0 will try to settle the dispute through
AM.+A0*8 S8))*8M8().
8&ample/ 8mployer wants to pay ?1 increase.
8mployee wants ?- increase.
(+M0 will settle for ?; and suggests this solution to
both parties.
4f7 Should the employer refuse to accede to the remedy
suggested by the (+M0, the (+M0 cannot ma!e negotiations
to bind both parties because the main purpose of (+M0 is to
conciliate and it will suggest that the parties submit to
:$*H()A,A A,0.),A).$(.
cD .f no settlement is arrived after 1B calendar days of
conciliation, the dispute should be brought to the appropriate
branch of the (*,+ for compulsory arbitration, which shall
conduct continuous hearings and decide the dispute within #B
calendar days from the time said dispute is submitted for
compulsory arbitration.
Appropriate branch of (*,+ means to *abor Arbiter 4 a
complaint has to be filed7, then appealable to (*,+ in 1B
calendar days 4no appeal7, remedy is ,ule "- to +A, then
,ule - to S+.
H($,>A(.O81 8S)A0*.S@M8()
<here there is no recogni3ed union or collective
bargaining agreement.
TWO METHODS IN DETERMININ3 WA3ES
E:+loyers Confe6eration of t*e )*ili++ines vs. NW)C
'"% SCRA 71(
)<$ <AAS $= =.D.(> )@8 M.(.MHM <A>8
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
23 of 61
SUN TZU NOTES
1. =*$$,9<A>8 method which involves the fi&ing of
a determinate amount to be added to the prevailing
statutory minimum wage rates.
#. SA*A,A9+8.*.(> method in which the wage
adjustment was to be applied to employees receiving
a certain denominated salary ceiling. %
)he first method was adopted in the earlier wage
orders, while the latter method was used in ,A
""B and ,A "7#7.
)he shift from the first method to the second
method was brought about by labor disputes
arising from wage distortions, a conse2uence of
the implementation of the wage orders.
)he shift from the first to the second method was
due to the fact that the latter minimi3ed wage
distortion disputes.
>URISDICTION O4ER WA3E DISTORTION
DISPUTES
LABOR ARBITRATION
,eference of a labor dispute to a third party for
determination on the basis of evidence and
arguments presented by such parties, who are
bound to accept the decision.
Ar*!tr"t!o )"+ *e c#"ss!&!e$ o t6e *"s!s o&
o*#!'"t!o o %6!c6 !t !s *"se$, !t )"+ e!t6er
*e?
.. 4OLUNTAR( ARBITRATION
.t is the policy of the State to encourage
voluntary arbitration on all labor9management
disputes. 0efore or at any stage of the compulsory
arbitration process, the parties may opt to submit
their dispute to voluntary arbitration.
4.mplementing ,ules, 0oo! :, ,ule D.D, Sec. -.7
1efined as a contractual proceeding whereby the
parties to any dispute or controversy in order to
obtain a speedy and ine&pensive final disposition
of the matter, select a judge of their own choice
and by consent, submit their controversy to him
for determination.
Hnder voluntary arbitration, the SjudgeS is named
by the parties, pursuant to a voluntary
arbitration clause in their collective agreement.
@e is an impartial third person authori3ed by the
parties to ma!e a final and binding decision or
award.
A voluntary arbitrator Sis not a public tribunal
imposed upon the parties by a superior authority
which the parties are obliged to accept. @e has
no general character to administer justice for a
community. @e is rather part of a system of self9
government created by and confined to the
parties.S KMaurice S. )rotta, Arbitration of Labor
Management 1isputes, American Management
Association, (ew Aor!, 197, p. 7;.L
:oluntary arbitration, indeed, is a private judicial
system.
)he judge is called a :$*H()A,A A,0.),A)$,.
)he power of voluntary arbitrator to try and
decide the case is the same as that of a *abor
Arbiter.
)he parties can agree to select a *abor Arbiter as a
voluntary arbitrator because it is as to the agreement of
the parties.
Arbitration may be initiated either by 17 a Submission
Agreement or #7 by a 1emand or (otice invo!ing a
collective agreement arbitration clause. Sometimes both
instruments are used in a case.
Although the contract may establish the breadth of the
arbitratorTs power and the limits of his authority, his power
may be more sharply defined in the submission
agreement.
.n ?hilippine conte&t, the SjudgeS in voluntary arbitration is
called arbitrator, while that in compulsory arbitration is
labor arbiter.
?roceedings are (on9litigious in nature, not governed by
technical rules of procedure used in courts but due
process is always observed.
:$*H()A,A A,0.),A)$,
Any person accredited by the 0oard as suchM or
Any person named or designated in the +0A by the parties
to act as their voluntary arbitratorM or
$ne chosen, with or without the assistance of the (+M0,
pursuant to selection procedure agreed upon in the +0AM
or
Any official that may be authori3ed by the Sec of *abor to
act as voluntary arbitrator upon the written re2uest and
agreement or the parties to a labor dispute.
2. COMPULSOR( ARBITRATION
?rocess of settlement of labor disputes by a government
agency Kor by other means provided by the governmentL
which has the authority to investigate and to ma!e award
which is binding on all the parties.
?arties are compelled to forgo their right to stri!e
A disinterested person or party is usually appointed by the
state.
.t is compulsory because the law declares the dispute
subject to arbitration, regardless of the consent of the
parties.
1one by the ,egional Arbitration 0ranch of (*,+ Krefer to
Art #17L
.t is an adversarial proceeding initiated by a complaint
Kusually by a unionL for wage distortion before the *abor
Arbiter. )he other party is re2uired to answer.
.t is the *abor Arbiter who is clothed with the original and
e&clusive authority to conduct compulsory arbitration under
Art. #17.
?roceedings after a labor arbiterTs decision is brought up to
the (ational *abor ,elations +ommission cannot be
considered as part of the arbitration proceedings. )his is
because in the appeal stage, the +ommission merely re9
views the *abor ArbiterTs decision for errors of fact or law. .t
does not duplicate the proceedings held at the *abor
ArbiterTs level. )hus, the clause Fpendin4 final resolution of
the case by arbitrationF should be understood to be limited
only to the proceedings before the *abor Arbiter, so that
when the latter rendered his decision, the case could be
considered finally resolved by arbitration. KSee 2hilippine
Airlines, .nc. vs& 3ational Labor ,elations +ommission, >.,. (o.
--1-9, 9ec& 22! 1969.L
)he +ommission itself, through any of its divisions, also
conducts compulsory arbitration, but only in Snational
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
24 of 61
SUN TZU NOTES
interest casesS certified or referred to it by the
1$*8 secretary under Art. #";4g7.
APPEAL PROCEDURE IN COMPULSOR( AND
4OLUNTAR( ARBITRATION
000000000000000000For
rese"rc60000000000000000000000000
SPECIAL CI4IL ACTION
RULE B2
+8,).$,A,., ?,$@.0.).$( A(1 MA(1AMHS
S8+).$( 1. &etition for certiorari.R<hen any
tribunal, board or officer e&ercising judicial or
2uasi9judicial functions has acted without or in
e&cess of its or his jurisdiction, or with grave abuse
of discretion amounting to lac! or e&cess of
jurisdiction, and there is no appeal, or any plain,
speedy, and ade2uate remedy in the ordinary
course of law, a person aggrieved thereby may file
a verified petition in the proper court, alleging the
facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of
such tribunal, board or officer, and granting such
incidental reliefs as law and justice may re2uire.
)he petition shall be accompanied by a
certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings
and documents relevant and pertinent thereto, and
a sworn certification of non9forum shopping as
provided in the third paragraph of section ;, ,ule
". 41a7
S8+. #. &etition for ro'ibition.R<hen the
proceedings of any tribunal, corporation, board,
officer or person, whether e&ercising judicial,
2uasi9judicial or ministerial functions, are without
or in e&cess of its or his jurisdiction, or with grave
abuse of discretion amounting to lac! or e&cess of
jurisdiction, and there is no appeal or any other
plain, speedy, and ade2uate remedy in the
ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court,
alleging the facts with certainty and praying that
judgment be rendered commanding the respondent
to desist from further proceedings in the action or
matter specified therein, or otherwise granting
such incidental reliefs as law and justice may
re2uire.
)he petition shall li!ewise be accompanied by
a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings
and documents relevant and pertinent thereto, and
a sworn certification of non9forum shopping as
provided in the third paragraph of section ;, ,ule
". 4#a7
S8+. ;. &etition for !anda!us.R<hen any
tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act
which the law specifically enjoins as a duty
resulting from an office, trust, or station, or
unlawfully e&cludes another from the use and
enjoyment of a right or office to which such other
is entitled, and there is no other plain, speedy and
ade2uate remedy in the ordinary course of law, the
person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered
commanding the respondent, immediately or at
some other time to be specified by the court, to do
the act re2uired to be done to protect the rights of
the petitioner, and to pay the damages sustained
by the petitioner by reason of the wrongful acts of
the respondent.
)he petition shall also contain a sworn certification of
non9forum shopping as provided in the third paragraph of
section ;, ,ule ". 4;a7
S8+. . 6'en and *'ere to file t'e etition.R)he
petition shall be filed not later than si&ty 4"B7 days from
notice of the judgment, order or resolution. .n case a
motion for reconsideration or new trial is timely filed,
whether such motion is re2uired or not, the petition shall be
filed not later than si&ty 4"B7 days counted from notice of
the denial of the motion.
.f the petition relates to an act or an omission of a
municipal trial court or of a corporation, a board, an officer
or a person, it shall be filed with the ,egional )rial +ourt
e&ercising jurisdiction over the territorial area as defined by
the Supreme +ourt. .t may also be filed with the +ourt of
Appeals or with the Sandiganbayan, whether or not the
same is in aid of the courtCs appellate jurisdiction. .f the
petition involves an act or an omission of a 2uasi9judicial
agency, unless otherwise provided by the law or these
rules, the petition shall be filed with and be cogni3able only
by the +ourt of Appeals.
.n election cases involving an act or an omission of a
municipal or a regional trial court , the petition shall be
filed e&clusively with the +ommission on 8lections, in aid of
its appellate jurisdiction. 1as a!ended b$ A.#. 07-7-12-
"C2
RULE 41
A??8A*S =,$M )@8 +$H,) $= )AD A??8A*S A(1 IHAS.9
FH1.+.A* A>8(+.8S )$ )@8 +$H,) $= A??8A*S
S8+).$( 1. Scope.R)his ,ule shall apply to appeals from
judgments or final orders of the +ourt of )a& Appeals and from
awards, judgments, final orders or resolutions of or authori3ed
by any 2uasi9judicial agency in the e&ercise of its 2uasi9judicial
functions. Among these agencies are the +ivil Service
+ommission, +entral 0oard of Assessment Appeals, Securities
and 8&change +ommission, $ffice of the ?resident, *and
,egistration Authority, Social Security +ommission, +ivil
Aeronautics 0oard, 0ureau of ?atents, )rademar!s and
)echnology )ransfer, (ational 8lectrification Administration,
8nergy ,egulatory 0oard, (ational )elecommunications
+ommission, 1epartment of Agrarian ,eform under ,epublic
Act (o. ""-7, >overnment Service .nsurance System,
8mployees +ompensation +ommission, Agricultural .nventions
0oard, .nsurance +ommission, ?hilippine Atomic 8nergy
+ommission, 0oard of .nvestments, +onstruction .ndustry
Arbitration +ommission, and voluntary arbitrators authori3ed by
law. 4n7
S8+. #. Cases not covered.R)his ,ule shall not apply to
judgments or final orders issued under the *abor +ode of the
?hilippines. 4n7
S8+. ;. 6'ere to aeal.RAn appeal under this ,ule
may be ta!en to the +ourt of Appeals within the period and in
the manner herein provided, whether the appeal involves
2uestions of fact, of law, or mi&ed 2uestions of fact and law. 4n7
S8+. . &eriod of aeal.R)he appeal shall be ta!en
within fifteen 41-7 days from notice of the award, judgment,
final order or resolution, or from the date of its last publication,
if publication is re2uired by law for its effectivity, or of the
denial of petitionerCs motion for new trial or reconsideration
duly filed in accordance with the governing law of the court or
agency a 2uo. $nly one 417 motion for reconsideration shall be
allowed. Hpon proper motion and the payment of the full
amount of the doc!et fee before the e&piration of the
reglementary period, the +ourt of Appeals may grant an
additional period of fifteen 41-7 days only within which to file
the petition for review. (o further e&tension shall be granted
e&cept for the most compelling reason and in no case to e&ceed
fifteen 41-7 days. 4n7
S8+. -. @ow appeal ta!en..RAppeal shall be ta!en by
filing a verified petition for review in seven 477 legible copies
with the +ourt of Appeals, with proof of service of a copy
thereof on the adverse party and on the court or agency a 2uo.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
25 of 61
SUN TZU NOTES
)he original copy of the petition intended for the +ourt
of Appeals shall be indicated as such by the petitioner.
Hpon the filing of the petition, the petitioner shall
pay to the cler! of court of the +ourt of Appeals the
doc!eting and other lawful fees and deposit the sum
of ?-BB.BB for costs. 8&emption from payment of
doc!eting and other lawful fees and the deposit for
costs may be granted by the +ourt of Appeals upon a
verified motion setting forth valid grounds therefor. .f
the +ourt of Appeals denies the motion, the petitioner
shall pay the doc!eting and other lawful fees and
deposit for costs within fifteen 41-7 days from notice
of the denial. 4n7
S8+. ". +ontents of the petition.R)he petition
for review shall 4a7 state the full names of the parties
to the case, without impleading the court or agencies
either as petitioners or respondentsM 4b7 contain a
concise statement of the facts and issues involved and
the grounds relied upon for the reviewM 4c7 be
accompanied by a clearly legible duplicate original or a
certified true copy of the award, judgment, final order
or resolution appealed from, together with certified
true copies of such material portions of the record
referred to therein and other supporting papersM and
4d7 contain a sworn certification against forum
shopping as provided in the last paragraph of section
#, ,ule #. )he petition shall state the specific
material dates showing that it was filed within the
period fi&ed herein. 4#a7
S8+. 7. 8ffect of failure to comply with
re2uirements.R)he failure of the petitioner to comply
with any of the foregoing re2uirements regarding the
payment of the doc!et and other lawful fees, the
deposit for costs, proof of service of the petition, and
the contents of and the documents which should
accompany the petition shall be sufficient ground for
the dismissal thereof. 4n7
S8+. 6. Action on the petition.R)he +ourt of
Appeals may re2uire the respondent to file a comment
on the petition, not a motion to dismiss, within ten
41B7 days from notice, or dismiss the petition if it finds
the same to be patently without merit, prosecuted
manifestly for delay, or that the 2uestions raised
therein are too unsubstantial to re2uire consideration.
4"a7
S8+. 9. +ontents of comment.R)he comment
shall be filed within ten 41B7 days from notice in seven
477 legible copies and accompanied by clearly legible
certified true copies of such material portions of the
record referred to therein together with other
supporting papers. )he comment shall 4a7 point out
insufficiencies or inaccuracies in petitionerCs statement
of facts and issuesM and 4b7 state the reasons why the
petition should be denied or dismissed. A copy thereof
shall be served on the petitioner, and proof of such
service shall be filed with the +ourt of Appeals. 49a7
S8+. 1B. 1ue course.R.f upon the filing of the
comment or such other pleadings or documents as
may be re2uired or allowed by the +ourt of Appeals or
upon the e&piration of the period for the filing thereof,
and on the basis of the petition or the records the
+ourt of Appeals finds prima facie that the court or
agency concerned has committed errors of fact or law
that would warrant reversal or modification of the
award, judgment, final order or resolution sought to
be reviewed, it may give due course to the petitionM
otherwise, it shall dismiss the same. )he findings of
fact of the court or agency concerned, when
supported by substantial evidence, shall be binding on
the +ourt of Appeals. 4n7
S8+. 11. )ransmittal of record.R<ithin fifteen
41-7 days from notice that the petition has been given
due course, the +ourt of Appeals may re2uire the
court or agency concerned to transmit the original or a
legible certified true copy of the entire record of the
proceeding under review. )he record to be transmitted may be
abridged by agreement of all parties to the proceeding. )he
+ourt of Appeals may re2uire or permit subse2uent correction
of or addition to the record. 46a7
S8+. 1#. 8ffect of appealR)he appeal shall not stay the
award, judgment, final order of resolution sought to be
reviewed unless the +ourt of Appeals shall direct otherwise
upon such terms as it may deem just. 41Ba7
S8+. 1;. Submission for decision.R.f the petition is given
due course, the +ourt of Appeals may set the case for oral
argument or re2uire the parties to submit memoranda within a
period of fifteen 41-7 days from notice. )he case shall be
deemed submitted for decision upon the filing of the last
pleading or memorandum re2uired by these ,ules or by the
+ourt of Appeals. 4n7
RULE 42
A??8A* 0A +8,).$,A,. )$ )@8 SH?,8M8 +$H,)
S8+).$( 1. 5iling of etition *it' "ure!e Court.RA
party desiring to appeal by certiorari from a judgment, final
order or resolution of the +ourt of Appeals, the Sandiganbayan,
the +ourt of )a& Appeals, the ,egional )rial +ourt or other
courts whenever authori3ed by law, may file with the Supreme
+ourt a verified petition for review on certiorari. )he petition
may include an application for a writ of preliminary injunction
or other provisional remedies and shall raise only 2uestions of
law which must be distinctly set forth. )he petitioner may see!
the same provisional remedies by verified motion filed in the
same action or proceeding at any time during its pendency. 1as
a!ended b$ A.#. 07-7-12-"C2
S8+. #. Ti!e for filing9 e8tension.R)he petition shall
be filed within fifteen 41-7 days from notice of the judgment or
final order or resolution appealed from, or of the denial of the
petitionerCs motion for new trial or reconsideration filed in due
time after notice of the judgment. $n motion duly filed and
served, with full payment of the doc!et and other lawful fees
and the deposit for costs before the e&piration of the
reglementary period, the Supreme +ourt may for justifiable
reasons grant an e&tension of thirty 4;B7 days only within
which to file the petition. 41a, -a7
S8+. ;. 1oc!et and other lawful feesM proof of service of
petition.RHnless he has theretofore done so, the petitioner
shall pay the corresponding doc!et and other lawful fees to the
cler! of court of the Supreme +ourt and deposit the amount of
?-BB.BB for costs at the time of the filing of the petition. ?roof
of service of a copy thereof on the lower court concerned and
on the adverse party shall be submitted together with the
petition. 41a7
S8+. . +ontents of petitionR)he petition shall be filed in
eighteen 4167 copies, with the original copy intended for the
court being indicated as such by the petitioner, and shall 4a7
state the full name of the appealing party as the petitioner and
the adverse party as respondent, without impleading the lower
courts or judges thereof either as petitioners or respondentsM
4b7 indicate the material dates showing when notice of the
judgment or final order or resolution subject thereof was
received, when a motion for new trial or reconsideration, if any,
was filed and when notice of the denial thereof was receivedM
4c7 set forth concisely a statement of the matters involved, and
the reasons or arguments relied on for the allowance of the
petitionM 4d7 be accompanied by a clearly legible duplicate
original, or a certified true copy of the judgment or final order
or resolution certified by the cler! of court of the court a 2uo
and the re2uisite number of plain copies thereof, and such
material portions of the record as would support the petitionM
and 4e7 contain a sworn certification against forum shopping as
provided in the last paragraph of section #, ,ule #. 4#a7
S8+. -. 1ismissal or denial of petition.R)he failure of the
petitioner to comply with any of the foregoing re2uirements
regarding the payment of the doc!et and other lawful fees,
deposit for costs, proof of service of the petition, and the
contents of and the documents which should accompany the
petition shall be sufficient ground for the dismissal thereof.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
26 of 61
SUN TZU NOTES
)he Supreme +ourt may on its own initiative
deny the petition on the ground that the appeal is
without merit, or is prosecuted manifestly for delay, or
that the 2uestions raised therein are too unsubstantial
to re2uire consideration. 4;a7
S8+. ". ,eview discretionary.RA review is not a
matter of right, but of sound judicial discretion, and
will be granted only when there are special and
important reasons therefor. )he following, while
neither controlling nor fully measuring the courtCs
discretion, indicate the character of the reasons which
will be considered/
4a7 <hen the court a 2uo has
decided a 2uestion of substance, not theretofore
determined by the Supreme +ourt, or has
decided it in a way probably not in accord with
law or with the applicable decisions of the
Supreme +ourtM or
4b7 <hen the court a 2uo has
so far departed from the accepted and usual
course of judicial proceedings, or so far
sanctioned such departure by a lower court, as
to call for an e&ercise of the power of
supervision. 4a7
S8+. 7. ?leadings and documents that may be
re2uiredM sanctions.R=or purposes of determining
whether the petition should be dismissed or denied
pursuant to section - of this ,ule, or where the
petition is given due course under section 6 hereof,
the Supreme +ourt may re2uire or allow the filing of
such pleadings, briefs, memoranda or documents as it
may deem necessary within such periods and under
such conditions as it may consider appropriate, and
impose the corresponding sanctions in case of non9
filing or unauthori3ed filing of such pleadings and
documents or noncompliance with the conditions
thereof. 4n7
S8+. 6. 1ue courseM elevation of records.R.f the
petition is given due course, the Supreme +ourt may
re2uire the elevation of the complete record of the
case or specified parts thereof within fifteen 41-7 days
from notice. 4#a7
S8+. 9. ,ule applicable to both civil and criminal
cases.R)he mode of appeal prescribed in this ,ule
shall be applicable to both civil and criminal cases,
e&cept in criminal cases where the penalty imposed is
death, reclusion perpetua or life imprisonment. 4n7
V. VIOLATION OF WAGE
ORDERS
DOUBLE INDEMNIT( AND IMPRISONMENT
RA B/2/ L")e$e$ *+ RA A.AAM
Sect!o .2. Any person, corporation, trust, firm,
partnership, association or entity which refuses or
fails to pay any of the prescribed increases or
adjustments in the wage rates made in accordance
with this Act shall be punished by a fine not less
than )wenty9five thousand pesos 4?#-,BBB7 nor more
than $ne hundred thousand pesos 4?1BB,BBB7 or
imprisonment of not less than two 4#7 years nor
more than four 47 years, or both such fine and
imprisonment at the discretion of the court/
2rovided, )hat any person convicted under this Act
shall not be entitled to the benefits provided for
under the ?robation *aw.

S)he employer concerned shall be ordered to pay
an amount e2uivalent to $o@*#e t6e @7"!$
*ee&!ts o%!' to t6e e)7#o+ees? ?rovided, that
payment of indemnity shall not absolve the employer
from the criminal liability imposable
under this Act.
S.f the violation is committed by a corporation, trust or
firm, partnership, association or any other entity the penalty
of imprisonment shall be imposed upon the entityTs
responsible officers, including, but not limited to, the
president, vice9president, chief e&ecutive officer, general
manager, managing director or partner.S
=ailure or refusal to pay mandatory wage increase is
considered a criminal offense under ,epublic Act (o.
6166, approved on Fune 11, 199". )he violator may be
sentenced to imprisonment of not less than two 4#7 years
nor more than four );* years. @e may also be punished by
a fine of ?#-,BBB to ?.$$.$$$.$$. Moreover, he shall be
ordered to pay an amount e2uivalent to double the
unpaid benefits owing to the employee.
Pe"#t+ &or 4!o#"t!o o& t6e Prescr!*e$ Icre"se or
A$K@st)et ! t6e W"'e R"te CRA A.AAD?
1. ?ayment of a fine of not less than ?#-,BBB nor more
than ?1BB,BBBM or
#. .mprisonment for not less than # years nor more
than years, the imprisonment being non9
probationable. 4)he case should therefore be filed
with the M)+ pursuant to 0? 1#9 as amended by ,A
7"917M or
;. 0oth imprisonment and fine, at the discretion of the
+ourt.
. ?aying double the unpaid benefitsEamounts owing
the employees, provided that the ?ayment of
.ndemnity shall not absolve the employer from
criminal liability imposable under the *abor +ode.
Aside from the penal provision provided under ,A "7#7,
there are provisions in the *abor +ode on the enforcement
and recovery of minimum wage provisions. )here are
general two provisions for the enforcement and recovery
of minimum wage provisions 5 Articles "28 and "2#.
,emember that the minimum wage is fi&ed by a wage
order and there is a built9in mechanism in the *abor +ode
which provides the so9called enforcement tools for the
recovery of wages, particularly the minimum wage
provisions.
Article 1#6 5 enforcement machinery in aid of the visitorial
power of the Secretary of *abor. )his is described as
in2uisitorial. <hyJ 0ecause the S$*8 in2uires 5 as! for
documents, investigate, etc.
Article 1#9 5 machinery of wage recovery via the
administrative process initiated by a complaint. )his is
described as adversarial. <hyJ 0ecause it re2uires a
complaint for its initiation.
>URISDICTION
Re'@#"r Co@rts
RA /B-.
A( A+) 8D?A(1.(> )@8 FH,.S1.+).$( $= )@8
M8),$?$*.)A( ),.A* +$H,)S, MH(.+.?A* ),.A* +$H,)S,
A(1 MH(.+.?A* +.,+H.) ),.A* +$H,)S, AM8(1.(> =$,
)@8 ?H,?$S8 0A)AS ?AM0A(SA 0*>. 1#9, $)@8,<.S8
N($<( AS )@8 SFH1.+.A,A ,8$,>A(.OA).$( A+) $= 196BS
0e it enacted by the Senate and @ouse of ,epresentatives of
the ?hilippines in +ongress assembled/
S8+).$( 1. Section 19 of 0atas ?ambansa 0lg. 1#9,
otherwise !nown as the SFudiciary ,eorgani3ation Act of
196B,S is hereby amended to read as follows/
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
27 of 61
SUN TZU NOTES
SS8+. 19. Furisdiction in civil cases. 9 ,egional )rial
+ourts shall e&ercise e&clusive original jurisdiction/
S417 .n all civil actions in which the subject of the
litigation is incapable of pecuniary estimationM
S4#7 .n all civil actions which involve the title to, or
possession of, real property, or any interest therein,
where the assessed value of the property involved
e&ceeds )wenty thousand pesos 4?#B,BBB.BB7 or, for
civil actions in Metro Manila, where such value
e&ceeds =ifty thousand pesos 4?-B,BBB.BB7 e&cept
actions for forcible entry into and unlawful detainer
of lands or buildings, original jurisdiction over which
is conferred upon the Metropolitan )rial +ourts,
Municipal )rial +ourts, and Municipal +ircuit )rial
+ourtsM
S4;7 .n all actions in admiralty and maritime
jurisdiction where the demand or claim e&ceeds $ne
hundred thousand pesos 4?1BB,BBB.BB7 or, in Metro
Manila, where such demand or claim e&ceeds )wo
hundred thousand pesos 4?#BB,BBB.BB7M
S47 .n all matters of probate, both testate and
intestate, where the gross value of the estate
e&ceeds $ne hundred thousand pesos 4?1BB,BBB.BB7
or, in probate matters in Metro Manila, where such
gross value e&ceeds )wo hundred thousand pesos
4?#BB,BBB.BB7M
S4-7 .n all actions involving the contract of marriage
and marital relationsM
S4"7 .n all cases not within the e&clusive jurisdiction
of any court, tribunal, person or body e&ercising
jurisdiction of any court, tribunal, person or body
e&ercising judicial or 2uasi9judicial functionsM
S477 .n all civil actions and special proceedings falling
within the e&clusive original jurisdiction of a Fuvenile
and 1omestic ,elations +ourt and of the +ourt of
Agrarian ,elations as now provided by lawM and
S467 .n all other cases in which the demand,
e&clusive of interest, damages of whatever !ind,
attorneyTs fees, litigation e&penses, and costs or the
value of the property in controversy e&ceeds $ne
hundred thousand pesos 4?1BB,BBB7 or, in such other
cases in Metro Manila, where the demand, e&clusive
of the abovementioned items e&ceeds )wo hundred
thousand pesos 4?#BB,BBB7.S
S8+. #. Section ;# of the same law is hereby
amended to read as follows/
SS8+. ;#. Furisdiction of Metropolitan )rial +ourts,
Municipal )rial +ourts and Municipal +ircuit )rial
+ourts in +riminal +ases. 9 8&cept in cases falling
within the e&clusive original jurisdiction of ,egional
)rial +ourts and of the Sandiganbayan, the
Metropolitan )rial +ourts, Municipal )rial +ourts,
and Municipal +ircuit )rial +ourts shall e&ercise/
S417 8&clusive original jurisdiction over all
violations of city or municipal ordinances
committed within their respective
territorial jurisdictionM and
S4#7 8&clusive original jurisdiction over all
offenses punishable with imprisonment not
e&ceeding si& 4"7 years irrespective of the
amount of fine, and regardless of other
imposable accessory or other penalties,
including the civil liability arising from such
offenses or predicated thereon, irrespective of
!ind, nature, value or amount thereof/ ?rovided,
however, )hat in offenses involving damage to
property through criminal negligence, they shall have
e&clusive original jurisdiction thereof.S
S8+. ;. Section ;; of the same law is hereby amended to
read as follows/
SS8+. ;;. Furisdiction of Metropolitan )rial +ourts,
Municipal )rial +ourts and Municipal +ircuit )rial +ourts in
+ivil +ases. 9 Metropolitan )rial +ourts, Municipal )rial
+ourts, and Municipal +ircuit )rial +ourts shall e&ercise/
S417 8&clusive original jurisdiction over civil actions
and probate proceedings, testate and intestate,
including the grant of provisional remedies in
proper cases, where the value of thepersonal
property, estate, or amount of the demand does
not e&ceed $ne hundred thousand pesos
4?1BB,BBB.BB7 or, in Metro Manila where such
personal property, estate, or amount of the
demand does not e&ceed )wo hundred thousand
pesos 4?#BB,BBB.BB7, e&clusive of interest,
damages of whatever !ind, attorneyTs fees,
litigation e&penses, and costs, the amount of
which must be specifically alleged/ ?rovided, )hat
interest, damages of whatever !ind, attorneyTs
fees, litigation e&penses, and costs shall be
included in the determination of the filing fees/
?rovided, further, )hat where there are several
claims or causes of actions between the same or
different parties, embodied in the same complaint,
the amount of the demand shall be the totality of
the claims in all the causes of action, irrespective
of whether the causes of action arose out of the
same or different transactionsM
S4#7 8&clusive original jurisdiction over cases of
forcible entry and unlawful detainer/ ?rovided,
)hat when, in such cases, the defendant raises the
2uestion of ownership in his pleadings and the
2uestion of possession cannot be resolved without
deciding the issue of ownership, the issue of
ownership shall be resolved only to determine the
issue of possessionM and
S4;7 8&clusive original jurisdiction in all civil actions
which involve title to, or possession of, real
property, or any interest therein where the
assessed value of the property or interest therein
does not e&ceed )wenty thousand pesos
4?#B,BBB.BB7 or, in civil actions in Metro Manila,
where such assessed value does not e&ceed =ifty
thousand pesos 4?-B,BBB.BB7 e&clusive of interest,
damages of whatever !ind, attorneyTs fees,
litigation e&penses and costs/ ?rovided, )hat in
cases of land not declared for ta&ation purposes,
the value of such property shall be determined by
the assessed value of the adjacent lots.S
S8+. . Section ; of the same law is hereby amended to
read as follows/
SS8+. ;. 1elegated Furisdiction in +adastral and *and
,egistration +ases. 9 Metropolitan )rial +ourts, Municipal
)rial +ourts, and Municipal +ircuit )rial +ourts may be
assigned by the Supreme +ourt to hear and determine
cadastral or land registration cases covering lots where
there is no controversy or opposition, or contested lots
where the value of which does not e&ceed $ne hundred
thousand pesos 4?1BB,BBB.BB7, such value to be
ascertained by the affidavit of the claimant or by
agreement of the respective claimants if there are more
than one, or from the corresponding ta& declaration of
the real property. )heir decisions in these cases shall be
appealable in the same manner as decisions of the
,egional )rial +ourts.S
S8+. -. After five 4-7 years from the effectivity of this Act, the
jurisdictional amounts mentioned in Sec. 194;7, 47, and 467M
and Sec. ;;417 of 0atas ?ambansa 0lg. 1#9 as amended by
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
28 of 61
SUN TZU NOTES
this Act, shall be adjusted to )wo hundred thousand
pesos 4?#BB,BBB.BB7. =ive 4-7 years thereafter, such
jurisdictional amounts shall be adjusted further to
)hree hundred thousand pesos 4?;BB,BBB.BB7/
?rovided, however, )hat in the case of Metro Manila,
the abovementioned jurisdictional amounts shall
be 7.
S8+. ". All laws, decrees, and orders inconsistent
with the provisions of this Act shall be considered
amended or modified accordingly.
S8+. 7. )he provisions of this Act shall apply to all
civil cases that have not yet reached the pretrial
stage. @owever, by agreement of all the parties, civil
cases cogni3able by municipal and metropolitan
courts by the provisions of this Act may be
transferred from the ,egional )rial +ourts to the
latter. )he e&ecutive judge of the appropriate
,egional )rial +ourt shall define the administrative
procedure of transferring the cases affected by the
redefinition of jurisdiction to the Metropolitan )rial
+ourts, Municipal )rial +ourts, and Municipal +ircuit
)rial +ourts.
RE3IONAL DIRECTOR
ART. 12:. 4isitorial and enforce!ent o*er& G
4a7 )he Secretary of *abor and 8mployment or his
duly authori3ed representatives, including labor
regulation officers, shall have access to employerCs
records and premises at any time of the day or night
whenever wor! is being underta!en therein, and the
right to copy therefrom, to 2uestion any employee
and investigate any fact, condition or matter which
may be necessary to determine violations or which
may aid in the enforcement of this +ode and of any
labor law, wage order or rules and regulations issued
pursuant thereto.
4b7 (otwithstanding the provisions of Articles 1#9
and #17 of this +ode to the contrary, and in cases
where the relationship of employer9employee still
e&ists, the Secretary of *abor and 8mployment or his
duly authori3ed representatives shall have the power
to issue compliance orders to give effect to the labor
standards provisions of this +ode and other labor
legislation based on the findings of labor
employment and enforcement officers or industrial
safety engineers made in the course of inspection.
)he Secretary or his duly authori3ed representatives
shall issue writs of e&ecution to the appropriate
authority for the enforcement of their orders, e&cept
in cases where the employer 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. 4As amended by ,epublic Act (o. 77;B,
Fune #, 1997.
K[ )he phrase after the word %issues', was an
amendment by ,A 77;B to delete the clause %which
cannot be resolved without considering evidentiary
matters that are not verifiable in the normal course
of inspection.'L
An order issued by the duly authori3ed
representative of the Secretary of *abor and
8mployment under this Article may be appealed to
the latter. .n case said order involves a monetary
award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond
issued by a reputable bonding company duly
accredited by the Secretary of *abor and
8mployment in the amount e2uivalent to the
monetary award in the order appealed from. 4As
amended by ,epublic Act (o. 77;B, Fune #, 1997.
4c7 )he Secretary of *abor and 8mployment may li!ewise
order stoppage of wor! or suspension of operations of any
unit or department of an establishment when non9compliance
with the law or implementing rules and regulations poses
grave and imminent danger to the health and safety of
wor!ers in the wor!place. <ithin twenty9four hours, a hearing
shall be conducted to determine whether an order for the
stoppage of wor! or suspension of operations shall be lifted or
not. .n case the violation is attributable to the fault of the
employer, he shall pay the employees concerned their salaries
or wages during the period of such stoppage of wor! or
suspension of operation.
4d7 .t shall be unlawful for any person or entity to obstruct,
impede, delay or otherwise render ineffective the orders of
the Secretary of *abor and 8mployment or his duly authori3ed
representatives issued pursuant to the authority granted
under this Article, and no inferior court or entity shall issue
temporary or permanent injunction or restraining order or
otherwise assume jurisdiction over any case involving the
enforcement orders issued in accordance with this Article.
4e7 Any government employee found guilty of violation of, or
abuse of authority, under this Article shall, after appropriate
administrative investigation, be subject to summary dismissal
from the service.
4f7 )he Secretary of *abor and 8mployment may, by
appropriate regulations, re2uire employers to !eep and
maintain such employment records as may be necessary in
aid of his visitorial and enforcement powers under this +ode.
)his Article is the nucleus of administrative enforcement
of ?hilippine labor laws. (he job is lod4ed /ith the
Secretary of Labor and Employment! the re4ional
directors and other duly authori-ed representatives& )he
enforcement function is broad. .t covers Sany fact, con9
dition or matter which may be necessary to determine
violations or which may aid in the enforcementS of the
+ode and any labor law, wage order or regulations.
*aw enforcement includes inspection of establishments,
but every inspection should be supported by an
authori3ation duly issued. <here violations are found,
appropriate report will be submitted. Subse2uently, a
Fcompliance orderS may issue which is a command to
rectify the violation found and proven.
)he issuance of a +ompliance $rder must observe the
Scardinal primary re2uirementsS of due process in
administrative proceedings.
)he re2uirements are/
417 )he alleged violator 4employer or anyone else7
must first be heard and given ade2uate opportunity to
present evidence on his behalfM

4#7 )he evidence presented must be duly considered
before any decision is reachedM

4;7 )he decision should be based on substantial
evidence which means evidence ade2uate for a
reasonable mind to support a conclusionM
47 the decision is based on evidence presented in
the hearing, or at least contained in the record
and disclosed to the partiesM

4-7 )he decision is that of the decision9ma!ing
authority and not mere views of subordinatesM and
4"7 the decision should e&plain the issues involved
and the reasons for the decision rendered.
.t should be noted that the authority under Art. 1#6
may be e&ercised regardless of monetary value
involved, unli!e in Art 1#9 which fi&es a ma&imum of
?-,BBB.BB per claimant. ,.A. (o. 77;B 4Fune #,
1997 changed Art. 1#64b7 to its present wording so
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
29 of 61
SUN TZU NOTES
as to free it from the jurisdictional
limitations found in Art. 1#9 and #17.
.n the e&ercise of his power under this
Article the Secretary of *abor and
8mployment may even order the stoppage of
wor! or suspension of operations of the
inspected establishment or parts of it. )he
employer, if at fault, may be ordered to pay
the employeesT wages during the wor!
stoppage or suspension of operations. 0ut,
again, due process of law must be observed.
A regional director of 1$*8 has the power to
order rectification of a labor standards
violation even if such violation is not
mentioned in the employeeTs complaint. 4See
Aboiti- Shipping +orp. vs. 9e la Sema,
etc.,>.,. (o. 66-;6, April 25! 199B.7
)he regional director, in cases where
employer9employee relationship still e&ists,
has the power to order and administer, after
due notice and hearing, compliance with the
labor standards provisions of the *abor
+ode and other legislation based on the
findings of labor regulation officers or
industrial safety engineers made in the
course of inspection. @e may also issue writs
of e&ecution to the appropriate authority for
the enforcement of his orders in line with
the provisions of Article 1#6 in relation to
Article #69 and #9B of the *abor +ode.
@owever, in those cases where the
employer contests the findings of the labor
standards and welfare officers and raises
issues which cannot be resolved without
considering evidentiary matters that are
not verifiable in the normal course of
inspection, the regional director must
endorse the case to the appropriate
arbitration branch 4labor9arbiter7 of the (*,+
for adjudication )Sec& "! 'ule X! Aoo0 !
+mnibus 'ules mplementin4 the Labor Code*&
)he visitorial enforcement power is
thorough and piercingM it e&tends even to
issues not formally included in the
complaint.
LABOR ARBITER
ART. 217. ;urisdiction of t'e <abor Arbiters and
t'e Co!!ission. <
4a7 8&cept as otherwise provided under this +ode,
the *abor Arbiters shall have original and e&clusive
jurisdiction to hear and decide, within thirty 4;B7
calendar days after the submission of the case by the
parties for decision without e&tension, even in the
absence of stenographic notes, the following cases
involving all wor!ers, whether agricultural or non9
agricultural/
1. Hnfair labor practice casesM
#. )ermination disputesM
;. .f accompanied with a claim for reinstatement,
those cases that wor!ers may file involving wages,
rates of pay, hours of wor! and other terms and
conditions of employmentM
. +laims for actual, moral, e&emplary and other
forms of damages arising from the employer9
employee relationsM
-. +ases arising from any violation of Article #" of this +ode,
including 2uestions involving the legality of stri!es and
loc!outsM and
". 8&cept claims for 8mployees +ompensation, Social
Security, Medicare and maternity benefits, all other claims
arising from employer9employee relations, including those of
persons in domestic or household service, involving an
amount e&ceeding five thousand pesos 4?-,BBB.BB7
regardless of whether accompanied with a claim for
reinstatement.
4b7 )he +ommission shall have e&clusive appellate jurisdiction
over all cases decided by *abor Arbiters.
4c7 +ases arising from the interpretation or implementation of
collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies
shall be disposed of by the *abor Arbiter by referring the
same to the grievance machinery and voluntary arbitration as
may be provided in said agreements. )As amended by Section
#! 'epublic Act 3o& 6$"5! 6arch 2"! "#8#*&
)his Article enumerates the cases falling under Fori4inal and
e?clusiveF jurisdiction of labor arbiters. )his gives the
impression that none but a labor arbiter can hear and decide
the si& categories of cases listed. 0ut this is not really so. Any
or all of these cases can, by agreement of the parties, be
presented to and decided with finality by a voluntary
arbitrator or panel of voluntary arbitrators. 4See Articles #"1
and #"#.7
)he law prefers or gives primacy to voluntary arbitration
4Art. #117 instead of compulsory arbitration. And this, in
turn, is the reason the law 4Art. #"1, last paragraph, and
Art. #17 KcL7 forbids a labor arbiter from entertaining a
dispute properly belonging to the jurisdiction of a
voluntary arbitrator.
)he cases a labor arbiter can hear and decide are
employment9related. $ne unifying element runs through
all the cases and disputes enumerated in Art. #17. )hat
element is employment connection. 0ut, additionally, as
regards money claims, the law applicable to grant the
relief sought should li!ewise be considered. .f the principal
relief sought will be resolved by applying the *abor +ode
or other labor relations statute or a collective bargaining
agreement, then the case belongs to the labor arbiter.
0ut if the applicable law is the general civil law, the
jurisdiction over the dispute belongs to the regular
courts, such as the regional trial court. 4See San Miguel
+orf. vs. (*,+, >.,. (o. 6B77, May ;1,1966.7
VI. WAGE ENFORCEMENT AND
RECOVERY
)<$ 8(=$,+8M8() )$$*S
1. A,).+*8 1#6. :.S.)$,.A* A(1 8(=$,+8M8() ?$<8,
#. A,).+*8 1#9. ,8+$:8,A $= <A>8S, S.M?*8 M$(8A
+*A.MS A(1 $)@8, 08(8=.)S.
ENFORCEMENT PROCESS
4a7 )here is a report on the non9compliance of the
employer with the minimum wage law.
4b7 Hpon receipt of the ,egional 1irector of this
information, there will be an $,18, $= .(S?8+).$(.
)he S$*8 or the ,egional 1irector.
)he order of inspection will simply state that this
person is authori3ed to conduct an inspection on
this date, place and time.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
30 of 61
SUN TZU NOTES
4c7 )his inspection authority will then be
implemented by a *abor and 8mployment
$fficer of the 1$*8. And this person will visit
the employerCs premises and then conduct an
inspection.
@e will inspect the payroll to determine if
indeed there was underpayment of wages,
inspect the employerCs premises, interview
and as! the employees themselves if they
are indeed paid such amount of wages,
compare the payment records and confer
with the employees.
4d7 .f the inspector finds that there is a violation
or underpayment of wages, he will ma!e an
.(S?8+).$( ,8?$,)
Hsually embodied in a ($).+8 $=
.(S?8+).$( ,8SH*)S.
All violations that the *abor 8mployment
$fficer will find in the employerCs premises
will be enumerated and be put as his
findings in the notice.
4e7 )he employer is first informed of the results of
the inspection.
4f7 )he employer is given the opportunity to
comply within 7 daysM or
4g7 )he employer may contest the notice of
inspection results and raise issues which
cannot be resolved without considering
1$+HM8()A,A ?,$$=S that are not verifiable
in the normal course of inspection.
@$< S$$(J )he employer shall raise such
objections during the hearing of the case
or at any time after the receipt of the
notice of inspection results.
4h7 .f on the other hand, the employer does not or
fails to contest the notice of inspection result,
as well as fails to comply with such notice.
)he ,egional 1irector will issue an $,18,
$= +$M?*.A(+8.
)he order of compliance will basically be
based on the notice of inspection results,
so if the inspection says that you are
underpaying 1B wor!ers or just paying
them ?1BB, the ,1 will issue an order of
compliance ordering this time the
employer to pay the following wor!ers the
following sums of money.
4i7 ,emedy of the employer from the order of
compliance.
)he order of compliance can be 2uestioned
within 1B calendar days thru an A??8A*
with S$*8 4filing of bond7
)hen the employer will file a motion for
reconsideration with the ,1 within 7
calendar days.
.f the employer files it beyond 7 days but
not beyond 1B days, that will be
considered an appeal from the ,1 to the
S$*8.
4j7 .f the employer will not file a motion for
reconsideration, what will happen to the order
of complianceJ .t becomes final and e&ecutory.
)he S$*8 or ,1 can issue a <,.) $=
8D8+H).$(, then it will levy.
?ursuant to ,ule ;9 in +ivil ?rocedure, the
final judgment can be subject of e&ecution
and the ,1 can levy on the properties of the
employer to satisfy the judgment or the order of
compliance.
(ote/ that this is if there is no obedience to the
order of compliance or there is no contesting done
or no motion for reconsideration resorted to by the
employer in that regard.
4!7 $n the other hand, if the employer validly contests by
raising issues supported by documentary proofs which
were not considered in the course of inspection 5 what
will happenJ
+an the ,1 still proceed with the caseJ ($.
)he ,1 will endorse the case to the appropriate
Arbitration 0ranch of the (*,+.
<hyJ .t is no longer a summary proceeding. .t now
becomes an adversarial proceeding which the ,1 is
not e2uipped to handle. ,1 has no other recourse
but to endorse it to the Arbitration 0ranch of the
(*,+.
Note? .t is very important that you be able to contest the
notice of inspection results within the time frame authori3ed
by the ,H*8S $( 1.S?$S.).$( $= *A0$, S)A(1A,1S
+AS8S. 0ecause if you fail or if you contest but the wrong
way, or you fail to contest it at all, then the ,1 will have no
recourse but to issue an order of compliance. And then your
remedy therefore is no longer to contest but to a motion for
reconsideration or probably an appeal to the S$*8. .n case
you still fail to do that, then that order of compliance will
become final and e&ecutory for which the S$*8 or the ,d for
that matter is now authori3ed to issue a writ of e&ecution.
)hen that is the end of the case.
S$*8 4no appeal7, ,emedy to +A ,"-, then to S+
,ule -.
.f S$*8 personally conducts inspection, ,emedy to
+A ,ule "-, then to S+ ,ule -.
4ISITORIAL AND ENFORCEMENT POWER
Article 12:. 4isitorial and (nforce!ent &o*er-
4a7 )he Secretary of *abor or his duly
authori3ed representatives, including #"*or
re'@#"t!o o&&!cers,
shall have "ccess to employerCs records
and premises at any time of the day or
night whenever wor! is being underta!en
therein, and
the r!'6t to co7+ therefrom,
to G@est!o any employee and
!5est!'"te any fact, condition or matter which
may be necessary to determine violations or
which may aid in the enforcement of this +ode and
of any labor law, wage order or rules and regulations
issued pursuant thereto.
4b7 (otwithstanding the provisions of Articles
1#9 and #17 of this +ode to the contrary, and in cases
where the relationship of employer9employee still
e&ists, the Secretary of *abor and 8mployment or his
duly authori3ed representatives shall have the 7o%er
to !ss@e co)7#!"ce or$ers to give effect to the
labor standards provisions of this +ode and other labor
legislation *"se$ o t6e &!$!'s o& #"*or
e)7#o+)et "$ e&orce)et o&&!cers or
!$@str!"# s"&et+ e'!eers made in the course of
inspection. )he Secretary or his duly authori3ed
representatives shall !ss@e %r!ts o& eJec@t!o to the
appropriate authority for the enforcement of their
orders, eJce7t in cases where the employer contests
the findings of the labor employment and enforcement
officer and raises the issues supported by documentary
proofs which were ot considered in the course of
inspection. L98D+8?).$( +*AHS8
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
31 of 61
SUN TZU NOTES
An order issued by the duly authori3ed
representative of the Secretary of *abor and
8mployment K,egional 1irectorL under this
Article may be "77e"#e$ to the latter. .n case
said order involves a )oet"r+ "%"r$, an
appeal by the employer may be perfected only
upon the posting of a cash or surety bond
issued by a reputable bonding company duly
accredited by the S$*8 in the amount
e2uivalent to the monetary award in the order
appealed from.
4c7 )he S$*8 may li!ewise order sto77"'e
o& %orH or s@s7es!o o& o7er"t!os o&
"+ @!t or $e7"rt)et o& "
est"*#!s6)et when non9compliance with
the law or implementing rules and regulations
poses grave and imminent danger to the
health and safety of wor!ers in the wor!place.
<ithin # hours, a 6e"r!' shall be
conducted to determine whether an order for
stoppage of wor! or suspension of operations
shall be lifted or not. .n case the violation is
attributable to the employer, he shall pay the
employees concerned their salaries or wages
during
the period of such stoppage or wor! or
suspension of operation. L9 +,$SS ,8=8, )$
A,).+*8 #6" $( +$(S8IH8(+8 $=
SHS?8(S.$( $= $?8,A).$(S
4d7 .t shall be @#"%&@# for any person or entity to
obstruct, impede, delay or otherwise render
ineffective the orders of the S$*8 or his duly
authori3ed representatives issued pursuant to
the authority granted under this Article, and
no inferior court or entity shall issue
temporary or permanent injunction or
restraining order or otherwise assume
jurisdiction over any case involving the
enforcement orders issued in accordance with
this Article.
4e7 A+ 'o5er)et e)7#o+ee found guilty of
violation of, or abuse of authority, under this
Article shall, after appropriate administrative
investigation, be subject to s@))"r+
$!s)!ss"# from the service.
4f7 )he S$*8 may, by appropriate regulations,
re2uire employers to !eep and maintain such
e)7#o+)et recor$s as may be necessary
in aid of his visitorial and enforcement powers
under this +ode.
S+$?8 $= )@8 :.S.)$,.A* ?$<8, $= )@8
S8+,8)A,A $= *A0$,
Cirineo BoHling )laGa vs. erry Sensing
R %2#17'$ "%&%2&'""1
%)he visitorial and investigatory power under A,)
1#64a7 is broad enough to cover any fact, condition
or matter related to the enforcement not only of the
*abor +ode but of any labor law.
Such power is li!ewise unlimited by the amount of
monetary liability involved. )he liability, determined
through appropriate proceedings, may be enforced
through an order or writ of e&ecution regardless of
the amount involved, according to A,) 1#6b as
amended by ,A 77;B.
?ursuant to ,A 77;B, the jurisdictional limitations
imposed by A,) 1#9 on the visitorial and
enforcement powers of the ,1 under A,) 1#6, have
been repealed. )he phrase %($)<.)@S)A(1.(>
)@8 ?,$:.S.$(S $= A,).+*8S 1#9 A(1 #17 $=
)@8 *+ )$ )@8 +$(),A,A,' erases all doubts as to
the amendatory nature of ,A b77;B. )he
amendment in effect overturned the rulings in the
Aboiti- and Servandos cases in so far as the restrictive effect
of A,) 1#9 on the use of the power under A,) 1#6 is
concerned.'
)he S$*8 or his duly authori3ed representative, in the
e&ercise of their visitorial and enforcement powers, are
now authori3ed to issue +$M?*.A(+8 $,18,S to give
effect to the labor standards provisions of this +ode and
other labor legislation based on the findings of the labor
employment and enforcement officers or industrial safety
engineers made in the course of inspection, SA(S, any
restriction with respect to the jurisdictional amount of -,
BBB provided under A,) 1#9 and A,) #17.
Q? 1oes the *abor +ode confer this :isitorial ?ower to be
e&ercised by the ,egional 1irectorJ
A? A8S. )he ,egional 1irector is the duly authori3ed
representative of the S$*8.
ENFORCEMENT POWER ON HEALTHFSAFET( OF
WOR:ERS
Article 12:. 4isitorial and enforce!ent o*er& 5
4c7 )he Secretary of *abor and 8mployment may li!ewise
order stoppage of wor! or suspension of operations of any
unit or department of an establishment when non9compliance
with the law or implementing rules and regulations poses
grave and imminent danger to the health and safety of
wor!ers in the wor!place. <ithin twenty9four hours, a hearing
shall be conducted to determine whether an order for the
stoppage of wor! or suspension of operations shall be lifted or
not. .n case the violation is attributable to the fault of the
employer, he shall pay the employees concerned their salaries
or wages during the period of such stoppage of wor! or
suspension of operation.
)his provision does not refer to violation of minimum
wage laws. .t refers to the instance that when the non9
compliance with the law or implementing rules and
regulations poses grave and imminent danger to the
health and safety of wor!ers in the wor!place, the S$*8
can issue an order for the stoppage of wor! or the
suspension of operations of any unit or department in an
establishment.
.**HS),A).$(/
<hen there is a lea! in a chemical plant, there is ha3ard
to the employees. )he S$*8 can order suspension of
operation.
Q? .s the power of S$*8 to order suspension of operation
similar to Article #6" on bona fide suspension of operationsJ
A? ($. )hey are different. .n Article #6", it is the employer
who suspends the operations while on the other hand, Article
1#6 spea!s of suspension by the Secretary of *abor.
8&ample, for causes attributable to the employer and in the
interest of health and safety of the wor!ers, the ,egional
1irector orders the suspension of the companyCs operation.
)he logical 2uestion there is 5 <hat is the conse2uence of
thatJ <ill the employees be paid their wagesJ
.n Article #6", for e&ample, if the employer decides to
suspend his operations unilaterally, will the employees be
entitled to their daily wagesJ
<hat is being in2uired in Article 1#6 is whether or not the
employer complies with labor standards laws, rules and
regulations, as well as social legislations. )he power to
visit the employerCs premises is so broad enough as to
enable the S$*8 or his duly authori3ed representative to
ma!e a finding after ma!ing such inspection. Since what
will be involved would be in2uiring on violations of labor
standard laws as well as wage orders, it would be
important for us to !now the step9by9step procedure in
the conduct of inspection under Article 1#6. And since
what is involved would be labor standard provisions such
as the minimum wages laws or rules 5 Is t6e e)7#o+er
o*#!'e$ to )"!t"! " 7"+ro##E A8S. )he employer is
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
32 of 61
SUN TZU NOTES
obliged to maintain a payroll pursuant to the
power of the S$*8 under Article 1#6 4f7 to issue
such rules and regulations pertinent thereto.
Hnder implementing rules, see Section ", ,ule D,
0oo! ....
Q? .n the e&ercise of the visitorial power, can the
S$*8 be interfered with by the courtsJ
A? ($. )his is pursuant to Article 1#6 4d7. .f the
S$*8 or the ,egional 1irector, for that matter,
decides to inspect the employerCs premises, then no
entity can lawfully interfere, obstruct or delay the
e&ercise of that authorityM otherwise they would be
penali3ed under that provision of the *+. )hat is how
comprehensive and that is how strong the visitorial
and enforcement power of the S$*8 is.
3-NA 5,)( SUSPENSION OF OPERATIONS
ART. 2AB. 6'en e!lo$!ent not dee!ed
ter!inated. 0 )he bona1fide suspension of the
operation of a business or underta!ing for a period
not e&ceeding si& 4"7 months, or the fulfillment by
the employee of a military or civic duty shall not
terminate employment. .n all such cases, the
employer shall reinstate the employee to his former
position without loss of seniority rights if he indicates
his desire to resume his wor! not later than one 417
month from the resumption of operations of his
employer or from his relief from the military or civic
duty.
Seb-g-ero$et al. vs. NLRC$ .T.I. S+ortsHear Cor+.$
et al
.R. No. %%14(2$ Se+te:ber '7$ %((1
%Article #6; spea!s of a permanent retrenchment
as opposed to a temporary lay9off. )here is no
specific provision of law which treats of a temporary
retrenchment or lay9off. )o remedy this situation or
fill the hiatus, Article #6" may be applied but only by
analogy to set a specific period that employees may
remain temporarily laid9off or in floating status. Si&
months is the period set by law that the operation of
a business or underta!ing may be suspended
thereby suspending the employment of the
employees concerned. )he temporary lay9off
wherein the employees li!ewise cease to wor!
should also not last longer than si& months. After si&
months, the employees should either be recalled to
wor! or permanently retrenched following the
re2uirements of the law. =ailing to comply with this
would be tantamount to dismissing the employees
and the employer would thus be liable for such
dismissal. %
Agro Co::er5ial Se5-rity Servi5es Agen5y$ In5. vs.
National Labor Relations Co::ission
.R. Nos. !'!'43'2$ =-ly 4%$ %(!(
%<hen the Sfloating statusS of the employees lasts
more than si& 4"7 months, they may be considered
to have been constructively dismissed from the
service. )hus, they are entitled to the
corresponding benefits for their separation.'
DISPOSITION OF LABOR STANDARD CASES
A *abor Standard +ase is processed
administratively under Articles 1#6 and 1#9 of
the *+, as amended.
Maternity C*il6renKs Los+ital vs. Se5retary of Labor
an6 Regional Dire5tor of Labor
.R. No. 7!("($ =-ne 4"$ %(!(
%Hnder the present rules, a ,egional 1irector
e&ercises both visitorial and enforcement power
over labor standard cases, and is, therefore,
empowered to adjudicate money claims, provided there
still e&ists an employer9employee relationship, and the
findings of the regional office are not contested by the
employer concerned.'
?ursuant to the provisions of Article -, in relation to
Article 1#6KbL of the *abor +ode, the Secretary of
*abor and 8mployment issued on September 1", 1967
the ,ules on the 1isposition of *abor Standards +ases in
the ,egional $ffices to govern the enforcement of labor
standards at the regional level. After the issuance of
those ,ules, Article 1#6KbL was amended by ,epublic
Act (o. 77;B on Fune #, 19 whose provisions are now
reflected in the present Article 1#6.
Re5!se$ R@#es o D!s7os!t!o o& L"*or St"$"r$ C"ses
.-A/ ser!es
00000000See FOO 7"'e 2.1 &or &@## teJt00000000
00000000See $!"'r") ! se7"r"te 7"'e00000000
De7"rt)et Or$er No. /0A ser!es o& .--2
000000000000W" 7" H!t !Q00000000000000
DOLE Me)o C!rc@#"r No. ,20A ser!es o& .--2
0000000000000!sert 6ere000000000000000000000
APPEAL PROCEDURE
An order issued under this Article is appealable to the
1$*8 secretary, the administrative superior of the regional
director.
9niversity of I::a5-late Con5e+tion vs. SOLE
R %24117$ =-ne '1$ '""2
%)he decision of the S$*8 becomes final and e&ecutory after
ten 41B7 calendar days from receipt of the records of the
case. A motion for reconsideration of the S$*8Cs decision has
to be filed as a precondition for any further or subse2uent
remedy. .f the motion is denied, a special civil action for
certiorari under ,"- may be filed with the +A within "B days
from receipt of the denial of the motion.'
National ,e6eration of Labor vs. Lag-es:a
R %'42'#$ Mar5* %"$ %(((
%=ollowing the rationale of St. Martin ruling, decisions of the
Secretary of *abor, such as those in Articles 1#6, #;9, #-9,
and #"; maybe elevated initially to the +A through certiorari.'
ANTI0IN>UNCTION
ART. 12:. 4isitorial and enforce!ent o*er. =
4d7 .t shall be unlawful for any person or entity to obstruct,
impede, delay or otherwise render ineffective the orders of
the Secretary of *abor and 8mployment or his duly authori3ed
representatives issued pursuant to the authority granted
under this Article, and no inferior court or entity shall issue
temporary or permanent injunction or restraining order or
otherwise assume jurisdiction over any case involving the
enforcement orders issued in accordance with this Article.
MAINTENANCE OF EMPLO(MENT RECORDS
ART. 12:. 4isitorial and enforce!ent o*er. =
4f7 )he Secretary of *abor and 8mployment may, by
appropriate regulations, re2uire employers to !eep and
maintain such employment records as may be necessary in
aid of his visitorial and enforcement powers under this +ode.
SIMPLE MONE( CLAIMS AND >URISDICTION
ART. .2-. Recover$ of *ages> si!le !one$ clai!s and
ot'er benefits. 0 Hpon complaint of any interested party, the
,egional 1irector of the 1epartment of *abor and
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
33 of 61
SUN TZU NOTES
8mployment or any of the duly authori3ed hearing
officers of the 1epartment is empowered, through
summary proceeding 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 an employee or
person employed in domestic or household service or
househelper under this +ode, arising from employer9
employee relations/ ?rovided, )hat such complaint
does not include a claim for reinstatement/ ?rovided
further, )hat the aggregate money claims of each
employee or househelper does not e&ceed =ive
thousand pesos 4?-,BBB.BB7. )he ,egional 1irector
or hearing officer shall decide or resolve the
complaint within thirty 4;B7 calendar days from the
date of the filing of the same. Any sum thus
recovered on behalf of any employee or househelper
pursuant to this Article shall be held in a special
deposit account by, and shall be paid on order of, the
Secretary of *abor and 8mployment or the ,egional
1irector directly to the employee or househelper
concerned. Any such sum not paid to the employee
or househelper because he cannot be located after
diligent and reasonable effort to locate him within a
period of three 4;7 years, shall be held as a special
fund of the 1epartment of *abor and 8mployment to
be used e&clusively for the amelioration and benefit
of wor!ers.
Any decision or resolution of the ,egional 1irector or
hearing officer pursuant to this provision may be
appealed on the same grounds provided in Article
##; of this +ode, within five 4-7 calendar days from
receipt of a copy of said decision or resolution, to the
(ational *abor ,elations +ommission which shall
resolve the appeal within ten 41B7 calendar days
from the submission of the last pleading re2uired or
allowed under its rules.
)he Secretary of *abor and 8mployment or his duly
authori3ed representative may supervise the
payment of unpaid wages and other monetary claims
and benefits, including legal interest, found owing to
any employee or househelper under this +ode. 4As
amended by Section #, ,epublic Act (o. "71-, March
#1, 19697.
)his is the second method of the enforcement
and recovery of minimum wage provisions, which
refers to simple money claims.
ARTICLES .2A AND .2- COMPARED
)he two articles are similar as they both spea! of
labor law administration and enforcement
Art. 1#9 is more limited in scope than Art. 1#6
Art 12: Art 12?
empowers the Secretary
of *abor or any of his
Sduly authori3ed
representatives' who
may or may not be a ,1.
Adjudicatory power
vested upon a ,egional
1irector or any duly
%authori3ed hearing
officer' of 1$*8.
Spea!s of inspection of
establishments and the
issuance of compliance
orders on labor
standards, wage orders
and other labor laws and
regulations
,efers to adjudication
through summary
proceedings after notice
and hearing, of
employeesC claims for
wages and benefits
?roceedings under this
article are offshoots of
inspections done by labor
officers or safety
engineers
.nitiated by sworn
complaints filed by any
interested party.
Furisdictional limits in Art
1#9 do not apply to the
)he regional directorTs
authority under Art.
e&ercise of powers under
Art 1#6. ?ar 0 of Art
1#6 was changed to its
present wording by ,A
77;B purposely to
strengthen the visitorial
enforcement power by
freeing it from the
limitations of Art 1#9.
1#9 is subject to four
,e2uisites.
A decision under Article
1#6, on the other hand,
is administrative and
therefore appealable to
the Secretary of *abor
who is the administrative
superior of all regional
directors of the
1epartment.
A decision rendered
under this Article, being
adjudicatory in nature, is
appealable to the (ational
*abor ,elations
+ommission 4(*,+7
)@8 ,8>.$(A* 1.,8+)$,TS AH)@$,.)A H(18, A,). 1#9 .S
SH0F8+) )$ =$H, ,8IH.S.)8S, (AM8*A/
1. )he claim is presented by an employee or a person
employed in domestic or household service, or a
househelper.
#. )he claim arises from employer9employee relations.
;. )he claimant does not see! reinstatement.
. )he "''re'"te money claim of each employee or
househelper does not e&ceed ?-,BBB.BB.
.f there is 2uestion of reinstatement or if the claimantTs
demand e&ceeds ?-,BBB.BB, the labor arbiter has
jurisdiction over the case, pursuant to Art. #17, paragraph
", e&cept claims for employeesT compensation, social
security, Medicare 4?hilhealth7 and maternity benefits.
8ven as regards labor arbiter, however, employer9
employee relation is a prere2uisite as basis of the claim.
Articles 1#6 and 1#9 are operative only in the conte&t of
employment relationship. A regular court , not 1$*8 or
(*,+, has jurisdiction over claim of an independent
contractor to adjust contractual fee.
9rbanes vs. SOLE
R %''7(% "'&%(&'""4
%.t is well settled in law and jurisprudence that where no
employer9employee relationship e&ists between the parties
and no issue is involved which may be resolved by reference
to the *abor +ode, other labor statutes or any collective
bargaining agreement, it is the ,egional )rial +ourt that has
jurisdiction.
<hile the resolution of the issue involves the application of
labor laws, reference to the *abor +ode was only for the
determination of the S$*.1A,A *.A0.*.)A of the petitioner to
the respondent where no employer9employee relation e&ists.'
?,$+81H,8 H(18, A,).+*8 1#9
a. )he employee files a pro9forma complaint with the
,egional 1irector.
b. )he ,egional 1irector doc!ets the complaint as simple
money claim.
c. )he ,egional 1irector issues summons served upon
employer 4respondent7, together with the copy of the
compliant, and sends a copy of the same to the
respondent.
d. )he employer9respondent is given - calendar days to
answer the complaint. )he employer can either admit
the allegations or deny it.
e. After receiving the answer, the ,egional 1irector calls for
a summary hearing and decides on the matter within ;B
calendar days from the date of filing of the complaint.
f. .f the decision is adverse, the employer may appeal the
decision to the (*,+ within - calendar days from the
receipt of the copy of said decision or resolution. )he
appeal must conform to the re2uirements provided for
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
34 of 61
SUN TZU NOTES
under Article #17 and the (*,+ ,ules. )o
perfect the appeal, the employer must post a
cash or surety bond.
.n the appeal from the ,1 decision to the (*,+,
the aggrieved party has - calendar days, while in
the appeal from *A decision to the (*,+, the
aggrieved party has 1B days.
g. =rom the adverse decision of the (*,+, the
employer can then file a motion for
reconsideration.
h. .f said motion is denied, the employer may still
file a Special +ivil Action for +ertiorari with the
+ourt of Appeals under ,ule "- of the ,ules of
+ourt within a period of "B days from receipt of
the decision.
)he ,egional )ripartite <ages and ?roductivity
0oard 4,)<?07 do not have the power to
promulgate rules providing who is e&empted from
minimum wage. .t is the (ational <ages and
?roductivity 0oard 4(<?+7 that has the rule9
ma!ing power to promulgate rules on e&emption
and minimum wage fi&ing, and not the ,)<?0.
Art 217. ;urisdiction of t'e <abor Arbiters and
t'e Co!!ission. <
Already discussed under )opic - :iolation of
<age $rders
COMPROMISE OF LABOR STANDARD CASES
ART. 227. Co!ro!ise agree!ents. - Any
compromise settlement, including those involving
labor standard laws, voluntarily agreed upon by the
parties with the assistance of the 0ureau or the
regional office of the 1epartment of *abor, shall be
final and binding upon the parties. )he (ational
*abor ,elations +ommission or any court, shall not
assume jurisdiction over issues involved therein
e&cept in case of non9compliance thereof or if there
is prima facie evidence that the settlement was
obtained through fraud, misrepresentation, or
coercion.
1ispute resolution through compromise is a
pervading philosophy of ?hilippine labor laws.
)his is emphasi3ed in this Article ##7 and it
conforms with the statement of basic policy in
Art. #11 4a7 and the second paragraph of Art.
##1.
)he law loo!s with disfavor upon 2uitclaims and
releases by employees who are inveigled or
pressured into signing them by unscrupulous
employers see!ing to evade their legal
responsibilities. $n the other hand, there are
legitimate waivers that represent a voluntary
settlement of a laborerTs claims that should be
respected by the courts as the law between the
parties.
(ot all waivers and 2uitclaims are invalid as
against public policy. .f the agreement was
voluntarily entered into and represents a
reasonable settlement, it is binding on the parties
and may not later be disowned simply because of
a change of mind.
A judgment rendered in accordance with a
compromise agreement is not appealable and is
immediately e&ecutory, unless a motion is filed to
set aside the agreement on the ground of fraud,
mista!e, or duress, in which case an appeal may
be ta!en against the order denying the motion.
)6aster (ours and (ravel Corp& vs& +A, #19 S+,A ;#1M
7nited @ousin4 Corp& vs& 9ayrit! "8" S+,A #6-.7
A compromise agreement by union officers must be
authori3ed by the union members. )he authority must be
produced in evidence. 8ach laborer must authori3e the
union officers to enter into a compromise before the
laborerTs right may be affected. )=aisahan n4 m4a
Manggagawa sa La Campana vs& Sarmiento! 1;; S+,A ##B
K196L.7 See further discussion under Art. ##.
Art 202: NCC. A compromise is a contract where the parties,
by ma!ing reciprocal concessions, avoid a litigation or put an
end to one already commenced.
APPEAL PROCEDURE
ART. 223. Aeal. - 1ecisions, awards, or orders of the
*abor Arbiter are final and e&ecutory unless appealed to the
+ommission by any or both parties within ten 41B7 calendar
days from receipt of such decisions, awards, or orders. Such
appeal may be entertained only on any of the following
grounds/
4a7 .f there is prima facie evidence of abuse of discretion on
the part of the *abor ArbiterM
4b7 .f the decision, order or award was secured through fraud
or coercion, including graft and corruptionM
4c7 .f made purely on 2uestions of lawM and
4d7 .f serious errors in the findings of facts are raised which
would cause grave or irreparable damage or injury to the
appellant.
.n case of a judgment involving a monetary award, an appeal
by the employer may be perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company
duly accredited by the +ommission in the amount e2uivalent
to the monetary award in the judgment appealed from.
.n any event, the decision of the *abor Arbiter reinstating a
dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately be
e&ecutory, even pending appeal. )he employee shall either be
admitted bac! to wor! under the same terms and conditions
prevailing prior to his dismissal or separation or, at the option
of the employer, merely reinstated in the payroll. )he posting
of a bond by the employer shall not stay the e&ecution for
reinstatement provided herein.
)o discourage frivolous or dilatory appeals, the +ommission or
the *abor Arbiter shall impose reasonable penalty, including
fines or censures, upon the erring parties.
.n all cases, the appellant shall furnish a copy of the
memorandum of appeal to the other party who shall file an
answer not later than ten 41B7 calendar days from receipt
thereof.
)he +ommission shall decide all cases within twenty 4#B7
calendar days from receipt of the answer of the appellee. )he
decision of the +ommission shall be final and e&ecutory after
ten 41B7 calendar days from receipt thereof by the parties.
Any law enforcement agency may be deputi3ed by the
Secretary of *abor and 8mployment or the +ommission in the
enforcement of decisions, awards or orders. 4As amended by
Section 1#, ,epublic Act (o. "71-, March #1, 19697.
A77e"# means the elevation by an aggrieved party of any
decision, order or award of a lower body to a higher body,
by means of a pleading which includes the assignment of
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
35 of 61
SUN TZU NOTES
errors, arguments in support thereof, and the
reliefs prated for. A. mere notice of appeal,
therefore, does not constitute the appeal as
herein defined and understood, and shall not
stop the running of the period for perfecting an
appeal. 4.mplementing ,ules, 0oo! :, ,ule .,
Sec. 17
8Per&ect!o o& " A77e"#P includes the filing,
within the prescribed period, of the memorandum
of appeal containing, among others, the
assignment of errorEs, arguments in support
thereof, the relief sought and, in appropriate
cases, posting of an appeal bond.
SM Agri an6 eneral Ma5*ineries vs. NLRC
.R. No. 72!("#$ =an-ary ($ %(!(.
%)he 1B9day period provided in Article ##; refers to
ten calendar days, not wor!ing days. )his means
that Saturdays, Sundays and *egal @olidays are not
to be e&cluded, but included, in counting the 1B9
day period. <here the 1Bth day is a Sunday or
*egal @oliday, the appeal can be filed on the ne&t
business day. %
AC-ino vs. NLRC an6 RobFtt In6-strial Constr-5tion$
In5.$ .R. No. (!%"%$ Se+te:ber 4$ %((4.
%.f the tenth day to perfect an appeal from the
decision of the *abor Arbiter to the (*,+ falls on a
Saturday, the appeal shall be made on the ne&t
wor!ing day. %
Star Angel Lan6i5raft vs. NLRC an6 S+o-ses
,ribaMas$ .R. No. %"!(%2$ Se+te:ber '"$ %((2.
%)here is a clear distinction between the filing of an
appeal within the reglementary period and its
perfection. )he appeal from the *abor Arbiter to the
+ommission must be filed within the reglementary
period.'
C.W. Tan Mfg. vs. NLRC
.R. No. 7(1(#$ ,ebr-ary %"$ %(!(.
%)he payment of the appeal fee is by no means a
mere technicality but is an essential re2uirement in
the perfection of an appeal. @owever, where the fee
had been paid belatedly, the broader interest of
justice and the desired objective in deciding the
case on the merits demand that the appeal be given
due course. %
,ules of technicality must yield to the broader
interests of substantial justice. )he dismissal of
an appeal on purely technical grounds is frowned
upon. 4Modem =ishing ,ear Labor Hnion vs.
(*,+, >.,. (o. -;9B7, 6a1y 6! 1966.7
ISSUES ON APPEAL= REMEDIES
Ro5*e )*ili++ines vs. NLRC
.R. No. !4441$ O5tober 1$ %(!(
%Hnder Section - 4c7 of the ,ules of ?rocedure of the
(ational *abor ,elations +ommission, the
+ommission shall, in cases of perfected appeals, limit
itself to reviewing those issues which are raised on
appeal. )hose which are not raised shall be final and
e&ecutory. )he issues raised on appeal, however, shall
be open for review and any actions ta!en thereon by
the +ommission are within the parameters of its
jurisdiction. %
So6ol vs. ,ili+inos 8oo$ In5.$ ReC-ito Vega$ Belen
o:eG$ Art-ro o:eG$ NLRC$ .R. No. !714"$ =-ne
%4$ %((".
%A party who failed to appeal on time from the decision of
*abor Arbiter may still file a motion for reconsideration of the
(*,+ decision.
)he decision of the +ommission shall be final and e&ecutory
after ten calendar days from receipt by the parties.'
)-re ,oo6s Cor+oration vs. NLRC
.R. No. 7!1(%$ Mar5* '%$%(!(.
%)he losing party, however, is not without recourse. Hnder the
(ew ,ules of the (ational *abor ,elations +ommission, a
party is allowed to file a motion for reconsideration of any
order, resolution or decision of the +ommission based on
palpable or patent errors, provided that the motion is under
oath and filed within ten 41B7 calendar days from receipt of
the order, resolution or decision.
.n addition, the party may also seasonably avail of the special
civil action for certiorari under 'ule 65 of the 'ules of Court.
)he action is allowed if the tribunal, board or officer
e&ercising judicial functions has acted without or in e&cess of
its jurisdiction, or with grave abuse of discretion.'
WHEN AND WHERE TO FILE PETITION
Hnder the 1997 ,ules of +ivil ?rocedure, effective Fuly 1,
1997, the petition for certiorari may be filed not later than
si&ty 4"B7 days from notice of the judgment, order of
resolution sought to be assailed in the Supreme +ourt & & &.
.t may also be filed in the +ourt of Appeals whether or not
the same is in aid of its appellate jurisdiction, or in the
Sandiganbayan if it is in aid of its jurisdiction. 4Sec. , ,ule "-,
,ules of +ourt.7
0ut the same Section and ,ule provide that Sif Kthe petitionL
involves the acts or omissions of a 2uasi9judicial agency, and
unless otherwise provided by law or KtheL ,ules, the petition
shall be filed and cogni3able only by the +ourt of Appeals.S
St. Martin ,-neral Lo:es vs. NLRC
.R. No. %4"!##$ Se+te:ber %#$ %((!.
?,.(+.?*8 $= @.8,A,+@A $= +$H,)S
Solidly buttressing the +ATs jurisdiction is the Supreme +ourt
ruling in the St. 6artin case. After a discreet analysis of the
legislative intent in delineating judicial jurisdictions, the
+ourt 4through Mr. Fustice ,egalado7 declared that/
%0oth the Supreme +ourt and the +ourt of Appeals have the
power to review (*,+ decisions. @owever, the petition by
certiorari should initially be filed with the +ourt of Appeals,
in line with the principle of hierarchy of courts.'
National ,e6eration of Labor AN,LB vs. Lag-es:a$ .R. No.
%'42'#$ Mar5* %"$ %(((
%)he Supreme +ourt held that challenges against rulings of
the labor secretary and those acting on his behalf, li!e the
director of labor relations, shall be acted upon by the +ourt
of Appeals, which has concurrent jurisdiction with the
Supreme +ourt over petitions for certiorari.'
FINALIT( ON FINDIN3S OF FACTS
Manila Man6arin E:+loyees 9nion vs. NLRC
.R. No. 7#(!($ Se+te:ber '%$ %(!7.
%Iuasi9judicial agencies li!e the (ational *abor ,elations
+ommission have ac2uired e&pertise because their
jurisdiction is confined to specific matters. @ence, their
findings of facts are generally accorded not only respect
but at times even finality if such findings are supported by
substantial evidence. %
EXCEPTIONS
In6-strial Ti:ber Cor+. vs. NLRC$ Con5or6ia Dos )-eblos$ et
al.$ .R. No. !4#%#$ =an-ary '"$ %(!(.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
36 of 61
SUN TZU NOTES
%@owever, the Supreme +ourt has never hesitated
to e&ercise its corrective powers and to reverse
administrative decisions in the following cases/
417 the conclusion is a finding grounded on
speculations, surmises and conjecturesM
4#7 the inferences made are manifestly mista!en,
absurd or impossibleM
4;7 there is a grave abuse of discretionM
47 there is a misapprehension of factsM
4-7 the court Kor 2uasi9judicial bodyL in arriving at
its findings went beyond the issues of the case and
the same are contrary to the admissions of the
parties or the evidence presentedM
4"7 where respondent commission has sustained
irregular procedures and through the invocation of
summary methods, including rules on appeal, has
affirmed an order which tolerates a violation of due
processM and
477 where the rights of a party were prejudiced
because the administrative findings, conclusions or
decisions were in violation of constitutional
provisions, in e&cess of statutory authority, or
jurisdiction, made upon irregular procedure, vitiated
by fraud, imposition or mista!e, not supported by
substantial evidence adduced at the hearing or
contained in the records or disclosed to the parties,
or arbitrary, or capricious.'
LE3AL REMEDIES
S7ec!"# C!5!# Act!o CR@#e B2, .--/ R@#es o& C!5!#
Proce$@reD
See )opic
Pet!t!o &or Re5!e% CR@#e 41 "$ R@#e 42, .--/
R@#es o& C!5!# Proce$@reD
See topic
VII. WAGE PROTECTION
PROVISIONS AND
PROHIBITIONS REGARDING
WAGES
NON0INTERFERENCE IN DISPOSAL OF WA3ES
ART. 112. Non-interference in disosal of
*ages. - (o employer shall limit or otherwise
interfere with the freedom of any employee to
dispose of his wages. @e shall not in any manner
force, compel, or oblige his employees to purchase
merchandise, commodities or other property from
any other person, or otherwise ma!e use of any
store or services of such employer or any other
person.
ART. 2AA RE4ISED PENAL CODE
Art. 2:: R&C. -t'er "i!ilar Coercions9
1Co!ulsor$ urc'ase of !erc'andise and
a$!ent of *ages b$ !eans of to+ens.2 0 )he
penalty of arresto mayor or a fine ranging from #BB
to -BB pesos, or both, shall be imposed upon any
person, agent or officer, of any association or
corporation who shall force or compel, directly or
indirectly, or shall !nowingly permit any laborer or
employee employed by him or by such firm or
corporation to be forced or compelled, to purchase
merchandise or commodities of any !ind.
)he same penalties shall be imposed upon any person who
shall pay the wages due a laborer or employee employed by
him, by means of to!ens or objects other than the legal
tender currency of the laborer or employee.
WA3E DEDUCTION
ART. 113. 6age deduction. - (o employer, in his own
behalf or in behalf of any person, shall ma!e any deduction
from the wages of his employees, e&cept/
4a7 .n cases where the wor!er is insured with his consent by
the employer, and the deduction is to recompense the
employer for the amount paid by him as premium on the
insuranceM
4b7 =or union dues, in cases where the right of the wor!er or
his union to chec!9off has been recogni3ed by the employer or
authori3ed in writing by the individual wor!er concernedM and
4c7 .n cases where the employer is authori3ed by law or
regulations issued by the Secretary of *abor and
8mployment.
ART. 114. )eosits for loss or da!age. - (o employer
shall re2uire his wor!er to ma!e deposits from which
deductions shall be made for the reimbursement of loss of or
damage to tools, materials, or e2uipment supplied by the
employer, e&cept when the employer is engaged in such
trades, occupations or business where the practice of ma!ing
deductions or re2uiring deposits is a recogni3ed one, or is
necessary or desirable as determined by the Secretary of
*abor and 8mployment in appropriate rules and regulations.
refer to =ive F )a&i and Fardin +ases
DEPOSITS FOR LOSSFDAMA3E
ART. 115. <i!itations. - (o deduction from the deposits of
an employee for the actual amount of the loss or damage
shall be made unless the employee has been heard thereon,
and his responsibility has been clearly shown.
WITHHOLDIN3F:IC:BAC:S
ART. 11@. 6it''olding of *ages and +ic+bac+s
ro'ibited. - .t shall be unlawful for any person, directly or
indirectly, to withhold any amount from the wages of a wor!er
or induce him to give up any part of his wages by force,
stealth, intimidation, threat or by any other means
whatsoever without the wor!erCs consent.
DEDUCTION TO ENSURE EMPLO(MENT
ART. 117. )eduction to ensure e!lo$!ent. - .t shall be
unlawful to ma!e any deduction from the wages of any
employee for the benefit of the employer or his representative
or intermediary as consideration of a promise of employment
or retention in employment.
RETALIATOR( MEASURES
ART. 11:. Retaliator$ !easures. - .t shall be unlawful for
an employer to refuse to pay or reduce the wages and
benefits, discharge or in any manner discriminate against any
employee who has filed any complaint or instituted any
proceeding under this )itle or has testified or is about to
testify in such proceedings.
FALSE REPORTIN3
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
37 of 61
SUN TZU NOTES
ART. 11?. 5alse reorting. - .t shall be unlawful
for any person to ma!e any statement, report, or
record filed or !ept pursuant to the provisions of this
+ode !nowing such statement, report or record to be
false in any material respect.
WITHHOLDIN3 OF WA3ES
NEW CI4IL CODE
ART. 170@. <ithholding of the wages, e&cept for a
debt due, shall not be made by the employer.
ART. 1707. )he laborerCs wages shall be a lien on
the goods manufactured or the wor! done.
ART. 170:. )he laborerCs wages shall not be subject
to e&ecution or attachment, e&cept for debts
incurred for food, shelter, clothing and medical
attendance.
ART. 170?. )he employer shall neither sei3e nor
retain any tool or other articles belonging to the
laborer.
PRINCIPLE OF NON0DIMINUTION OF BENEFITS
ART. 100. &ro'ibition against eli!ination or
di!inution of benefits. - (othing in this 0oo! shall
be construed to eliminate or in any way diminish
supplements, or other employee benefits being
enjoyed at the time of promulgation of this +ode.
it essentially means that benefits being given to
employees cannot be ta!en bac! or reduced
unilaterally by the employer because the benefit
has become part of the employment contract,
written or unwritten.
)@8 ,H*8 A>A.(S) 1.M.(H).$( $= SH??*8M8()S
$, 08(8=.)S .S A??*.+A0*8 .= .) .S S@$<(
)@A)/
1. )he grant of the benefit is based on an e&press
policy or has ripened into a practice over a long
period of timeM
#. )he practice is consistent and deliberate.
;. )he practice is not due to error in the
construction or application of a doubtful or
difficult 2uestion of law.
. )he diminution or discontinuance isdone
unilaterally by the employer.
ART. 127. Non-di!inution of benefits. - (o wage
order issued by any regional board shall provide for
wage rates lower than the statutory minimum wage
rates prescribed by +ongress. 4As amended by
,epublic Act (o. "7#7, Fune 9, 19697.
000Re"$ Se5!##", D"5"o Fr@!ts "$ Ho$" c"se
VIII. PAYMENT OF WAGES
0000Re"$ M"*eI" "$ M!##"res c"se000000
FORM
ART. .,2. 5or!s of a$!ent. 0 (o employer shall
pay the wages of an employee by means of
promissory notes, vouchers, coupons, to!ens,
tic!ets, chits, or any object other than legal tender,
even when e&pressly re2uested by the employee.
?ayment of wages by chec! or money order shall be allowed
when such manner of payment is customary on the date of
effectivity of this +ode, or is necessary because of special
circumstances as specified in appropriate regulations to be
issued by the Secretary of *abor and 8mployment or as
stipulated in a collective bargaining agreement.
)he wages will have to be paid in the form of legal lender.
*8>A* )8(18,
.s that currency which has been made suitable by law for
the purpose of a tender of payment of debts.
All notes and coins issued by the +entral 0an! are legal
tender.
Q? )he payment of wages in the form of cash considered
legal tenderJ
A? A8S.
Q? +an the employer pay the employee partly in cash and
partly in !indJ
A? >enerally ($. )here are cases decided by the
Supreme +ourt wherein such is allowed, such as payment
for facilities.
Q? +an the employer pay the employee in the form
other than cashJ
A? A8S, through money order or chec!. )his is by way of
e&ception, the rules allow the employer to pay employeesC
wages in these forms. (ote the instances.
Note? ?ayment of wages by ban! chec!s, postal chec!s or
money order is allowed/
NEW CI4IL CODE
ART. 1705. )he laborerCs wages shall be paid in legal
currency.
RE4ISED PENAL CODE
Art. 2:: R&C. -t'er "i!ilar Coercions9 1Co!ulsor$
urc'ase of !erc'andise and a$!ent of *ages b$
!eans of to+ens.2 0 )he penalty of arresto mayor or a fine
ranging from #BB to -BB pesos, or both, shall be imposed
upon any person, agent or officer, of any association or
corporation who shall force or compel, directly or indirectly, or
shall !nowingly permit any laborer or employee employed by
him or by such firm or corporation to be forced or compelled,
to purchase merchandise or commodities of any !ind.
)he same penalties shall be imposed upon any person who
shall pay the wages due a laborer or employee employed by
him, by means of to!ens or objects other than the legal
tender currency of the laborer or employee.
EXCEPTION
R@#e 4III, BooH III, Sec 2
"ec. 2. &a$!ent b$ c'ec+.-?ayment of wages by ban!
chec!s, postal chec!s or money orders is allowed/
1. <here such manner of wage payment is customary on
the date of effectivity of the +ode 4(ovember 1, 1977M
or
#. <here it is stipulated in a collective agreementM or
;. <here all the following conditions are met/
a. )here is a ban! or other facility for encashment
within a radius of 1 !ilometer from the wor!placeM
b. )he employer, or any of his agents or
representatives, does not receive any pecuniary
benefit directly or indirectly from the arrangementM
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
38 of 61
SUN TZU NOTES
c.)he employees are given reasonable time
during ban!ing hours to withdraw their
wages from the ban! which time shall be
considered compensable hours /or0ed if
done during wor!ing hoursM and
d. )he payment by chec! is with the /ritten
consent of the employees concerned if
there is no collective agreement authori3ed
the payment of wages by ban! chec!s.
.f all of these conditions are met, the employer
can validly, by himself, pay wages by chec!s.
(ote the differences of the instances in the rules
that allow payment by chec! and place of
payment, because that it usually the mista!e of
students when they interchange the instances
and of course, these being different, they will end
up wrong.
(ote that the employer should not enter into an
arrangement with the ban! that the employer will
receive commission if the employer pays in the
form of chec!. )here should be no pecuniary
benefit from this arrangement of payment
through chec!.
PLACE
ART. 104. &lace of a$!ent. - ?ayment of wages
shall be made at or near the place of underta!ing,
e&cept as otherwise provided by such regulations as
the Secretary of *abor and 8mployment may
prescribe under conditions to ensure greater
protection of wages.
Q? .s there an instance when the employer may be
allowed to pay the employeesC wage other than at
the place of underta!ingJ
A? Aes.
EXCEPTIONS
A. R@#e 4III, BooH III, Sec 4
"ection 4. &lace of &a$!ent.-
4a7 As a general rule, the place of payment shall be
at or near the place of underta!ing. ?ayment in a
place other than the wor!place shall be permissible
only under the following circumstances/
1. <hen payment cannot be effected at or near the
place of wor! by reason of the deterioration of
peace and order conditions, or by reason of
actual or impending emergencies caused by fire,
flood, epidemic or other calamity rendering
payment thereat impossibleM
#. <hen the employer provides for transportation
to the employees bac0 and forthM and
;. Hnder any other analogous circumstancesM
provided that the time spent by the employees
in collecting their wages shall be considered as
compensable hours wor!ed.
4b7 (o employer shall pay his employees in any bar,
night or day club, drin!ing establishment, massage
clinic, dance hall, or other similar places or in places
where games are played with sta!es of money or
things representing money e?cept in the case of
persons employed in said places.
?ayment in recreational places prohibited/
B. RA B/2/ THRU BAN:S
"ec. 7. Hpon written petition of the majority of the
employees or wor!ers concerned, all private establishments,
companies, businesses, and other entities with twenty9five
4#-7 or more employees and located within one 417 !ilometer
radius to a commercial, savings or rural ban! shall pay the
wages and other benefits of their employees through any of
said ban!s and within the period for payment of wages fi&ed
by ?residential 1ecree (o. #, as amended, otherwise
!nown as the *abor +ode of the ?hilippines.
Q? .s the employer allowed by e&isting rules and regulations
to pay the employeesC wage through the facility of the A)MJ
A? A8S, note the conditions K,A "7#7 Sec 7L
Q? <hen we say A)M, is that same as the payment of wages
through the ban!sJ
A? )hat may, or may not be different. )here is an A)M in a
ban!, but an A)M is not always located in a ban!.
Q? .s it possible to pay the employeeCs wage through the
facilities in a ban!J
A? A8S, note the conditions K,A "7#7 Sec 7L
?AAM8() $= <A>8S )@,$H>@ 0A(NS .( +AS@, A** $=
)@8S8 MHS) +$(+H,
"ection 7> RA @727
417 Hpon written permission of the majority of the employees
or wor!ers concernedM
4#7 All private establishments, companies, businesses, and
other entities with at least #- or more employeesM and
4;7 *ocated within 1 !ilometer radius to a commercial,
savings, or rural ban!s shall pay wages or benefits of
their employees through any of said ban!sM
47 <ithin the period of payment of wages fi&ed by ?1 #,
the *abor +ode, as amended.
<ages shall be paid at least once every two 4#7 wee!s or
twice a month at intervals not e&ceeding si&teen 41"7 days
Kart 1B; L
LABOR AD4ISOR( ON PA(MENT OF SALARIES
THROU3H AUTOMATED TELLER MACHINE CATMD
K.ssued by then Secretary *eonardo IuisumbingL
Article 1B, as amended, re2uires that payment of wages
shall be made at or near the place of underta!ing, e?cept as
otherwise provided by such regulations as the Secretary of
*abor may prescribe under conditions that would ensure
prompt payment and protection of wages.
0ased on Article 1B, as well as the provisions of Section ,
,ule :..., 0oo! ... and considering present9day
circumstances, practices and technology, employers may
adopt a system of payment other than in the wor!place,
such as through A)Ms of ban!s, provided that the follo/in4
C+39(+3S are metC
417 )he A)M system of payment is with the written
consent of the employees concerned.
4#7 )he employees are given reasonable time to
withdraw their wages from the ban! facilities which
time, if done during wor!ing hours, shall be
considered as compensable hours wor!ed.
4;7 )he system shall allow wor!ers to receive their
wages within the period or fre2uency and in the
amount prescribed under the *abor +ode.
47 )here is a ban0 or A(6 facility within a radius of 1
!ilometer to the place of wor!.
4-7 Hpon re2uest of the concerned employeeEs, the
employer shall issue a record of payment of wages,
benefits and deductions for a particular period.
4"7 )here shall be no additional e&penses and no
diminution of benefits and privileges as a result of
the A)M system of payment.
477 )he employer shall assume responsibility in case the
wage protection provisions of law and regulations are
not complied with under the arrangement.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
39 of 61
SUN TZU NOTES
)he point here is that, if the employer elects to
pay the employeeCs wage through the A)M, there
should be no diminution of the employees wage.
)he employees can also demand from the
employer, proof of how much they are paid
including the itemi3ed deduction. .n other words,
it will not dispense with the re2uirement of the
pay slip. ,emember, that the employers decide
on their own without the employeesC consent to
pay their wages through the A)M facilities.
8vidently in violation or non9conformity with the
guidelines issued by the 1$*8. .f that happens,
then the remedy of the employees would be to
report it to the 1$*8 for an inspection and for the
correction of that particular system. )he 1$*8, in
the e&ercise of its visitorial and enforcement
power can order the employer to correct any
deficiency in that !ind of practice.
PA(EE
ART. .,2. )irect a$!ent of *ages. 0 <ages
shall be paid directly to the wor!ers to whom they
are due, e?ceptC
4a7 .n cases of force majeure rendering such
payment impossible or under other special
circumstances to be determined by the Secretary of
*abor and 8mployment in appropriate regulations, in
which case, the wor!er may be paid through another
person under written authority given by the wor!er
for the purposeM or
4b7 <here the wor!er has died, in which case, the
employer may pay the wages of the deceased wor!er
to the heirs of the latter without the necessity of
intestate proceedings. )he claimants, if they are all
of age, shall e&ecute an affidavit attesting to their
relationship to the deceased and the fact that they
are his heirs, to the e&clusion of all other persons. .f
any of the heirs is a minor, the affidavit shall be
e&ecuted on his behalf by his natural guardian or
ne&t9of9!in. )he affidavit shall be presented to the
employer who shall ma!e payment through the
Secretary of *abor and 8mployment or his
representative. )he representative of the Secretary
of *abor and 8mployment shall act as referee in
dividing the amount paid among the heirs. )he
payment of wages under this Article shall absolve the
employer of any further liability with respect to the
amount paid.
)$ <@$M S@$H*1 )@8 <A>8 08 ?A.1J
Article "%5 provides that wages should be paid
directly to the employees. )his is because it is the
wor!er who earns that money and it should be paid
directly to him and not to his girlfriend, not to his
lola, or whoever. $therwise, it is not a valid
payment. As learned in +ivil *aw, payment or
performance is a mode of e&tinguishing an
obligation. And if there is an improper payment or
performance, it will not e&tinguish your obligation.
)hat is how important this rule is.
EXCEPTIONS
.S .) ?$SS.0*8 )$ ?AA )@8 <A>8 )$ $)@8, )@A(
)@8 8M?*$A88 @.MS8*=J
A8S, note the circumstances provided in Article1B-/
4a7 .n cases of force majeure rendering such
payment impossibleM or
4b7 Hnder special circumstances to be determined
by the S$*8 in appropriate regulationsM or
4c7 <here the wor!er has died.
R@#e 4III, BooH III, Sec 2
"ec. 5. &a$!ent of *ages.- ?ayment of wages shall be
made direct to the employee entitled thereto e&cept in the
following cases/
4a7 <here the employer is authori3ed in writing by the
employee to pay his wages to a member of his familyM
4b7 <here payment to another person of any part of the
employeeCs wages is authori3ed by e&isting law, including
payments for the insurance premiums of the employee
and union dues where the ri4ht to chec01off has been
recogni3ed by the employer in accordance with a
collective agreement or authori3ed in writing by the
individual employees concernedM or
4c7 .n case of death of the employee as provided to the
succeeding section.
.n cases of payment of deceased wor!erCs wages to his
heirs, they do not need a court order, because there is no
need for an intestate proceeding. <hat they need is an
A==.1A:.) $= @8.,S@.?. K,ule :..., 0oo! ..., Sec "L
Also a valid payment/ when the payment of the
employeesC wage through any of the authori3ed
deductions, such as by virtue of a chec!9off provision,
then that is also a valid form of payment. So if there is a
+0A where there is a chec!9off provision for union dues,
the employer will pay a portion of your salary directly to
the union and it will no longer pass through you, and this
is a valid form of payment.
TIME OR FREQUENC( OF PA(MENT
ART. .,1. Ti!e of a$!ent. 0 <ages shall be paid at least
once every two 4#7 wee!s or twice a month at intervals not
e&ceeding si&teen 41"7 days. .f on account of force majeure
or circumstances beyond the employerCs control, payment of
wages on or within the time herein provided cannot be made,
the employer shall pay the wages immediately after such
force majeure or circumstances have ceased. (o employer
shall ma!e payment with less fre2uency than once a month.
)he payment of wages of employees engaged to perform a
tas! which cannot be completed in two 4#7 wee!s shall be
subject to the following conditions, in the absence of a
collective bargaining agreement or arbitration award/
417 )hat payments are made at intervals not e&ceeding
si&teen 41"7 days, in proportion to the amount of wor!
completedM
4#7 )hat final settlement is made upon completion of the
wor!.
R@#e 4III, BooH III, Sec 1
"ec. 3. Ti!e of &a$!ent
4a7 <ages shall be paid not less often than once every two
4#7 wee!s or twice a month at intervals not e&ceeding si&teen
41"7 days, unless payment cannot be made with such
regularity due to force majeure or circumstances beyond the
employerCs control, in such case the employer shall pay the
wages immediately after such force majeure or circumstances
have ceased.
4b7 .n case of payment of wages by results involving wor!
which cannot be finished in two 4#7 wee!s, payment shall be
made at intervals not e&ceeding si&teen 41"7 days in
proportion to the amount of wor! completed. =inal
settlement shall be made immediately upon completion of the
wor!.
=,8IH8(+A $= ?AAM8() 5 @$< $=)8(J
<ages shall be paid at least once every # wee!s or twice a
month at intervals not e&ceeding 1" days. .t translates into
twice a month\
EXCEPTION
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
40 of 61
SUN TZU NOTES
.n case of force majeure or in circumstances beyond
the employerCs control, wherein the payment of
wages on or within the time herein provided cannot
be made, the employer shall pay the wages
immediately after such force majeure or
circumstances have ceased.
IX. CONDITIONS OF
EMPLOYMENT
HOURS OF WOR:
.. ART. A1. Nor!al 'ours of *or+. 0 )he normal
hours of wor! of any employee shall not e&ceed eight
467 hours a day.
@ealth personnel in cities and municipalities with a
population of at least one million 41,BBB,BBB7 or in
hospitals and clinics with a bed capacity of at least
one hundred 41BB7 shall hold regular office hours for
eight 467 hours a day, for five 4-7 days a wee!,
e&clusive of time for meals, e&cept where the
e&igencies of the service re2uire that such personnel
wor! for si& 4"7 days or forty9eight 467 hours, in
which case, they shall be entitled to an additional
compensation of at least thirty percent 4;BU7 of
their regular wage for wor! on the si&th day. =or
purposes of this Article, Fhealth personnelF shall
include resident physicians, nurses, nutritionists,
dietitians, pharmacists, social wor!ers, laboratory
technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic
personnel.
2. RA -21. CHILD LABOR
Sec. 1. )he same Act, as amended, is hereby
further amended by adding new sections to be
denominated as Sections 1#9A, 1#90, 1#9+, and 1#9
1 to read as follows/
"ec. 12-A. Aours of 6or+ of a 6or+ing C'ild.
- Hnder the e&ceptions provided in Section 1# of
this Act, as amended/
417 A child below fifteen 41-7 years of age may be
allowed to wor! for not more than twenty 4#B7
hours a wee!/ ?rovided, )hat the wor! shall not be
more than four 47 hours at any given dayM
4#7 A child fifteen 41-7 years of age but below
eighteen 4167 shall not be allowed to wor! for
more than eight 467 hours a day, and in no case
beyond forty 4B7 hours a wee!M
4;7 (o child below fifteen 41-7 years of age shall
be allowed to wor! between eight oTcloc! in the
evening and si& oTcloc! in the morning of the
following day and no child fifteen 41-7 years of age
but below eighteen 4167 shall be allowed to wor!
between ten oTcloc! in the evening and si& oTcloc!
in the morning of the following day.S
1. DO No. B20,4 ser!es o& 2,,4
C6"7ter 2 < Ho@rs o& WorH
"(CT,-N 15. Aours of 6or+ of a 6or+ing C'ild
< )he following hours of wor! shall be observed for
any child allowed to wor! under ,epublic Act (o.
9#;1 and these ,ules/
4a7 =or a child below 1- years of age, the hours of
wor! shall not be more than twenty #B hours a
wee!, provided that the wor! shall not be more than
four hours at any given dayM
4b7 =or a child 1- years of age but below 16, the
hours of wor! shall not be more than eight hours a
day, and in no case beyond B hours a wee!M and
4c7 (o child below 1- years of age shall be allowed to wor!
between eight oC cloc! in the evening and si& oCcloc! in the
morning of the following day and no child 1- years of age but
below 16 shall be allowed to wor! between ten oCcloc! in the
evening and si& oC cloc! in the morning of the following day.
Sleeping time as well as travel time of a child engaged in
public entertainment or information from hisEher residence to
hisEher wor!place shall not be included as hours wor!ed
without prejudice to the application of e&isting rules on
employees compensation.
NORMAL HOURS OF WOR: OF TEACHIN3 OR ACADEMIC
PERSONNEL
000000000000000000000000000000000000000
DOLE0DECS0CHED0TESDA ORDER NO. 2 SERIES OF .--B
CBASED ON NORMAL OR RE3ULAR TEACHIN3 LOADSD
0000000000000000000000000000
HOURS WOR:ED= MEANIN3
ART. A4. Aours *or+ed. 0 @ours wor!ed shall include 4a7 all
time during which an employee is re2uired to be on duty or to
be at a prescribed wor!placeM and 4b7 all time during which
an employee is suffered or permitted to wor!.
,est periods of short duration during wor!ing hours shall be
counted as hours wor!ed.
)he implementing rules in 0oo! ..., ,ule . provide the
guidelines to determine time wor!ed 4therefore should be
paid7 or unwor!ed.
<aiting time spent by an employee is considered wor!ing
time if /aitin4 time is an inte4ral part of his /or0 or if the
employee is re:uired or en4a4ed by an employer to /ait&
<hether waiting time constitutes wor!ing time depends
upon the circumstances of each particular case and is a
2uestion of fact.
REST PERIODS= MEAL PERIOD= SHORTENED MEAL
PERIOD= COFFEE BREA:
ART. A2. #eal eriods. 0 Subject to such regulations as the
Secretary of *abor may prescribe, it shall be the duty of every
employer to give his employees not less than si&ty 4"B7
minutes time9off for their regular meals.
Hnder this article the meal period should not be less than
"B minutes, in which case it is time9off or non9
compensable time. )he implementing rules 0oo! ..., ,ule
., Sec 7, allows the meal time to be less than "B minutes,
under specified cases. 0ut such shortened meal time 4say
;B minutes7 should be with full pay, and of course, the
time when the employee cannot eat, because he is still
wor!ing, should also be paid.
)he employer is re2uired to give his employees not less
than "B minutes or 1 hour for their regular meals
everyday. )he *+ does not specify as to what specific hour
of the day the meal period are to be given.
)he "B9minute meal period is not compensable because
during this time, the wor!er does not wor!.
)o shorten meal time to less than #B minutes is not
allowed, if the so called meal time is less than #B minutes,
it becomes only a rest period, and under the same section
7, is considered wor! time.
Q/ .s it possible to reduce the meal period to less than "B
minutesJ .f so, under what instancesJ
A? A8S, under Section $! 'ule ! Aoo0 &
Rule ,> 3oo+ ,,,
"ec 7. #eal and Rest &eriods.- 8very employer shall give
his employees, regardless of se&, not less than one 417 hour
time9off for regular meals, e&cept in the following cases when
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
41 of 61
SUN TZU NOTES
a meal period of not less than #B minutes may be
given by the employer provided that such shortened
meal period is credited as compensable hours
wor!ed of the employeeM
4a7 <here the wor! is non9manual wor! in nature or
does not involve strenuous physical e&ertionM
4b7 <here the establishment regularly operates not
less than 1" hours a dayM
4c7 .n cases of actual or impending emergencies or
there is urgent wor! to be performed on
machineries, e2uipment or installations to avoid
serious loss which the employer should
otherwise sufferM and
4d7 <here the wor! is necessary to prevent serious
loss of perishable goods.
Rest eriods or coffee brea+s running from five
4-7 to twenty 4#B7 minutes shall be considered as
compensable wor!ing time.
Shortcoffee brea!s of -5#B minutes is
compensable. So if the employer gives the
employees brea! in the morning and in the
afternoon, this time is considered compensable.
(ote that the employer is not obliged by law to
give this coffee brea!.
)he employer can lessen the "B9minute meal
period into ;B minutes. And this is compensable.
(ote that the employer shall pay the $vertime
?ay whenever proper. (ote that meal periods can
be reduced to less than "B minutes but not less
than #B minutes, and it is compensable. =or
e&ample, if the meal period is reduced to -9
minutes it is compensable.
)he employer cannot prohibit employees from
leaving the premises during the meal period of
employees. )he law in fact does not re2uire that
the "B minutes to be spent in the employerCs
premises. )here is no labor code provision to this
effect.
WOR:WEE: < NORMAL ; COMPRESSED
1$*8 1epartment Advisory (o. B#9#BB
.M?*8M8()A).$( $= +$M?,8SS81 <$,N<88N
S+@8M8S
HEALTH PERSONNEL
ART. A1. Nor!al 'ours of *or+. 0 )he normal
hours of wor! of any employee shall not e&ceed eight
467 hours a day.
@ealth personnel in cities and municipalities with a
population of at least one million 41,BBB,BBB7 or in
hospitals and clinics with a bed capacity of at least
one hundred 41BB7 shall hold regular office hours for
eight 467 hours a day, for five 4-7 days a wee!,
e&clusive of time for meals, e&cept where the
e&igencies of the service re2uire that such personnel
wor! for si& 4"7 days or forty9eight 467 hours, in
which case, they shall be entitled to an additional
compensation of at least thirty percent 4;BU7 of
their regular wage for wor! on the si&th day. =or
purposes of this Article, Fhealth personnelF shall
include resident physicians, nurses, nutritionists,
dietitians, pharmacists, social wor!ers, laboratory
technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic
personnel.
8&ception to A,).+*8 91 on <ee!ly ,est 1ay
Article 6; does not say that the normal hours of wor! is or
should be eight hours but that it shall not e?ceed ei4ht&
)herefore part9time wor! or a dayCs wor! of less than
eighty hours is not prohibited.
)he eight hour labor law was enacted not only to
safe4uard the health and /elfare of the laborer or
employee! but in a /ay to minimi-e unemployment by
forcin4 employers! in cases /here more than 81hour
operation in necessary! to utili-e different shifts of
laborers or employees /or0in4 only for 8 hours each&
)he second paragraph applies to health wor!ers in
organi3ations covered by the +ode. @ealth personnel in
government service are e&cluded from coverage of Articles
6# to 9". )heir wor! hours, night shift differential, and
other employment benefits are defined in ,A 7;B-.
)he customary service re2uiring resident physician to
wor! for # hours a day violates the limitations prescribed
by Article 6; and would not be permissible even if the
resident physicians were paid additional compensation. .t
cannot override the purpose of the limitation which is to
safeguard the health and interest of hospital wor!ers.
@owever, the forty9hour wee! will not apply 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. .n such
case there is no employer9employee relationship on the
account of the approved training program. 40oo! ..., ,ule
D, Sec 1-7
WEE:L( REST DA(
ART. ?1. Rig't to *ee+l$ rest da$. - 4a7 .t shall be the
duty of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less than
twenty9four 4#7 consecutive hours after every si& 4"7
consecutive normal wor! days.
4b7 )he employer shall determine and schedule the wee!ly
rest day of his employees subject to collective bargaining
agreement and to such rules and regulations as the Secretary
of *abor and 8mployment may provide. @owever, the
employer shall respect the preference of employees as to
their wee!ly rest day when such preference is based on
religious grounds.
Rule ,,,> 3oo+ ,,,
"ection 2. 3usiness on "unda$s7Aolida$s.0All
establishments and enterprises may operate or open for
business on Sundays and @olidays provided that the
employees are given the wee!ly rest day and the benefits due
them under the law.
)he rest day need not be a Sunday, because the 0lue
Sunday *aw no longer finds application in the present.
"ection 3. 6ee+l$ Rest )a$.-8very employer shall give his
employees a rest period of not less than # hours
after every " consecutive normal wor! days.
"ec. 4. &reference of e!lo$ee. 0 )he preference of the
employee as to his wee!ly day of rest shall be respected
by the employer if the same is based on religious grounds.
)he employee shall ma0e 0no/n his preference to the
employer in writing at least seven 477 days before the desired
effectivity of the initial rest day so preferred.
<here, however, the choice of the employees as to their rest day
based on religious grounds will inevitably result in serious
prejudice or obstruction to the operations of the underta!ing
and the employer cannot normally be e&pected to resort to
other remedial measures, the employer may so schedule
the wee!ly rest day of their choice for at least two 4#7
days in a month.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
42 of 61
SUN TZU NOTES
Q? <hat happens on the seventh dayJ
A? .t becomes the rest day. .t is mandatory on the
part of the employer because it is provided for under
Article 91. )hat is how we arrive on a 69hour wor!
wee!.
Q? <ill the seventh day be considered always and at
all times the rest dayJ
A? A8S.
Q? 1oes the *+ tell us what specific day of the wee!
will the employees rest day beJ
A? ($.
$f course, under the 0*H8 SH(1AA *A<, the
employeesC rest day was imposed every Sunday.
0ut when the *abor +ode too! effect in 197, it
gave more fle&ibility on the part of the employer
to determine what rest day will be best for his
business. )here are certain types of
establishments that derive more money during
Sundays and Saturdays. And on the other hand,
there may be some establishments that are not
productive during Sundays. 8&ample/ Malls,
1epartment Stores. .n those establishments, it
will be possible to schedule the employeesC rest
day on days other than Sunday.
)he employer has the prerogative to determine
the employeeCs rest day. <hen it does, the
employer can change the employeesC rest day
only after giving a ($).+8, and the change will
ta!e effect 1 wee! after such notice.
4a7 )he employer has to notify the employees
of any change in the rest day.
4b7 )he change will have to ta!e effect at least
7 days after the change of schedule.
)his is so as not to cause inconvenience on the
part of the employees who may e&pect to be
enjoying their rest day on a particular day. .f the
employer decides to change it because that is
his prerogative, he still has to inform his
employees of the change in advance.
B. )he choice of rest day rests upon the employer,
is there an instance when the employer will have to
give some deference to the employeesC choice of
their rest dayJ
A? A8S. Hnder Article 91 4b7, based on religious
grounds. )he employer has to respect such
employeesC preference.
)b* (he employer shall determine and schedule
the /ee0ly rest day of his employees subject to
collective bar4ainin4 a4reement and to such
rules and re4ulations the S+LE may provide&
@o/ever! the employer shall respect the
preference of employees as to their /ee0ly rest
day /hen such preference is based on reli4ious
4rounds&
EXCEPTION TO THE EXCEPTION
Hnder the implementing rules, when it will cause
serious obstruction or prejudice to the operations or
underta!ing of the employer, the employer shall
schedule the rest day of their choice for at least #
days in a month.
0ut of course, customarily in the ?hilippines, the
employer gives respect to the employeesC choice
of rest day if the same is based on religious
grounds.
DOES THE B CONSECUTI4E DA(S WOR:WEE: APPL( TO
ALL EMPLO(ERS OR EMPLO(EESE
NO, it does not apply to/
4a7 @ealth personnel in cities or municipalities with a
population of 1 million or
4b7 @ospitals with a bed capacity of at least 1BB.
)he population re2uirement and the bed capacity need not
go together. )hey are to be ta!en separately.
,emember that the bed capacity is not re2uired to be
occupied as long as the re2uirement of at least a hundred
is met $, you belong in a municipality or city with at least
1 million in population.
.n this case, the normal wor!wee! consists of -
consecutive wor!days. .n effect, the rest day consists of #
days. )he law does not tell us the specific days when the
rest days will fall. )hey have B9hour wor!wee! and they
will enjoy # rest days. )his is due to the nature of their job
or activities involving more strenuous type of wor!
compared to other establishments.
@8A*)@ ?8,S$((8* < shall include/
4a7 ,esident physicians,
4b7 (urses,
4c7 (utritionists,
4d7 1ietitians,
4e7 ?harmacists,
4f7 Social wor!ers,
4g7 *aboratory technicians,
4h7 ?aramedical technicians,
4i7 ?sychologists,
4j7 Midwives,
4!7 Attendants, and
4l7 All other hospital or clinic personnel.
&olic$ ,nstruction No. 54
Kissued by =ran!lin 1rilonL
,t sa$s in effect t'at t'ose 'ealt' ersonnel *ill 'ave
to be considered aid 7 da$s a *ee+. ,s t'is validC
($, this was held to be void in the case of San 8uan de 9ios
@ospital Employees Association vs& 3L'C! ,' "26383
)3ovember! 28! "##$*. )his is because it contravenes the *+
because the *+ does not say that these # days off shall be
paid, but rather, it only says that there will be ;BU which will
be added to the regular wage if they wor! on the rest day.
)he *+ does not give them a full 7 days with pay but rather,
only additional compensation.
"an ;uan de )ios Aosital (!lo$ees Association vs.
N<RC
>.,. (o. 1#";6; (ovember, #6, 1997
A cursory reading of Article 6; of the *abor +ode betrays
petitionersC position that %hospital employees' are entitled to
%a full wee!ly salary with paid # daysC off if they have
completed the B9hourE-day wor!wee!.
'<hat Article 6; merely provides are/
417 )he regular office hour of 6 hours a day, - days a wee!
for health personnelM and
4#7 <here the e&igencies of service re2uire that health
personnel wor! for " days or 6 hours, then such
health personnel shall be entitled to an additional
compensation of at least ;BU of their regular wage for
wor! on the si&th day.
)here is nothing in the law that supports then S$*8Cs
assertion that Bpersonnel in subject hospitals and clinics are
entitled to a full /ee0ly /a4e for $ days if they have
completed the ;%1hourE51day /or0/ee0 in any 4iven
/or0/ee0&< (eedless to say, the S$*8 e&ceeded his authority
by including a # days off with pay in contravention of the
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
43 of 61
SUN TZU NOTES
clear mandate of the statute. Such an act the +ourt
shall not countenance. Administrative interpretation
of the law, we reiterate, is at best merely advisory,
and the +ourt will not hesitate to stri!e down an
administrative interpretation that deviates from the
provision of the statute.
?olicy .nstruction - to our mind unduly e&tended
the statute. .t being inconsistent with and repugnant
to the provision of Article 6;, as well as to ,A -9B1,
?. - is declared :$.1.
B/ +an the employees be compelled to wor! during
rest dayJ
A? Article 9#.
)he general rule is that under normal circumstances,
the employer cannot re2uire to compel his employee
to wor! on the latterCs scheduled rest day against his
will. )he general rule however admits of certain
e&ceptions, and these are found in Article 9# of the
*abor +ode and Section " ,ule ... of the $mnibus
,ules.
"ection @. 6'en *or+ on rest da$ aut'oriDed&1
An employer may re:uire any of his employees to
/or0 on his scheduled rest day for the duration of
the follo/in4 emer4encies and e?ceptional
conditionsC
1. .n case of actual or impending emergencies
caused by serious accident, fire, flood,
typhoon, earth2ua!e, epidemic, or other
disaster or calamity, to prevent loss of life
or property, or in case of force majeure or
imminent danger to public safetyM
#. .n case of urgent wor! to be performed on
machineries, e2uipment or installations to
avoid serious loss which the employer would
otherwise sufferM
;. .n the event of abnormal pressure or wor!
due to special circumstances, where the
employer cannot be ordinarily be e&pected
to resort to other measuresM
. )o prevent serious loss of perishable goodsM
-. <here the nature of the wor! is such that
the employees have to wor! continuously
for 7 days in a wee! or more, as in the case
of the crew members of a vessel to
complete a voyage and in other similar
casesM
". <hen the wor! is necessary to avail of
favorable weather or environmental
conditions where performance or 2uality of
wor! is dependent thereon.
(o employee shall be re2uired against his will to
wor! on his scheduled rest day e&cept under the
circumstances provided. ?rovided, however,
that where an employee volunteers to wor! on
his rest day under other circumstances, he shall
e&press such desire in writing.
.f the employee wor!s on his rest day, he is
entitled to additional compensation and this is
called 2'E676 2A>. )his is not the same as
overtime pay. )his is additional compensation for
the wor! of the employee for not more than 6
hours during his rest day.
METHODS OF FIXIN3 COMPENSATION
ART. ?7. )efinitions. - As used in t'is Title.
4f7 F.a4eF paid to any employee shall mean the
remuneration or earnings, however designated,
capable of being e&pressed in terms of money,
whether fi&ed or ascertained on a time, tas!, piece,
or commission basis, or other method of calculating the
same, which is payable by an employer to an employee under
a written or unwritten contract of employment for wor! 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 *abor and 8mployment, of board, lodging, or
other facilities customarily furnished by the employer to the
employee. FDair and reasonable valueF shall not include any
profit to the employer, or to any person affiliated with the
employer.
.--- WOR:ERS STATUTOR( MONETAR( BENEFITS
See on page -#7 =$O
2,,4 DOLE BWC MANUAL ON LABOR STANDARDS
X. MINIMUM LABOR STANDARD
BENEFITS
EMPLO(EES EXEMPTED
ART. :2. Coverage. - )he provisions of this )itle shall apply
to employees in all establishments and underta!ings whether
for profit or not, but not to government employees,
managerial employees, field personnel, members of the
family of the employer who are dependent on him for
support, domestic helpers, persons in the personal service of
another, and wor!ers who are paid by results as determined
by the Secretary of *abor in appropriate regulations.
As used herein, Fmana4erial employeesF refer to those whose
primary duty consists of the management of the
establishment in which they are employed or of a department
or subdivision thereof, and to other officers or members of
the managerial staff.
FDield personnelF shall refer to non9agricultural employees
who regularly perform their duties away from the principal
place of business or branch office of the employer and whose
actual hours of wor! in the field cannot be determined with
reasonable certainty.
*abor Standards 0enefits covered under Art. 6#/
4a7 (ight Shift 1ifferentialM
4b7 $vertime payM
4c7 @oliday payM
4d7 Service .ncentive *eaveM and
4e7 Service +harges
R@#e I, BooH III, Sect!o 2
E)7#o+ees ot co5ere$ *+ t6!s 7ro5!s!o KArt 6#L
"& ,overnment Employees
<hether employed by the national government or any of its
political subdivisions, including those employed in
government9owned and 5controlled corporations.
,8AS$(/ )hey are governed by different set of laws, which
are the +ivil Service *aw, the Administrative +ode, and by
their respective charters. .f a government9owned or 5
controlled corporation has been incorporated, they are
governed by the +orporation +ode and are conse2uently
covered by the *abor +ode.
2& 6ana4erial Employees and members of the 6ana4erial
Staffs
Managerial employees if they meet all of the following
conditions/
1. )heir primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereofM Kformulate policiesL
#. )hey customarily and regularly direct the wor! of two or
more employees thereinM Ke&ecute management policiesL
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
44 of 61
SUN TZU NOTES
;. )hey have the authority to hire and fire
employees of lower ran!, or their suggestions
and recommendations to hiring and firing and as
to the promotion or any other change of status
of other employees, are given particular weight.
Kimpose disciplinary actionsL
,8AS$(/ Managerial employees are not usually
employed and paid by the hour. )heir compensation
is determined by their special training, e&perience or
!nowledge, which re2uires the e&ercise of discretion
and independent judgmentM or perform wor! related
to management policies and general business
operations along speciali3ed or technical lines.
$fficers or members of the managerial staff if they
perform the following duties and responsibilities/
1. )he primary duty consists of the performance of
wor! directly related to management policies of the
employerM
#. +ustomarily and regularly e&ercise discretion and
independent judgmentM
;. )hey/
i. ,egularly and directly assist a proprietor or general
managerial employee whose primary duty consists of
the management of the establishment in which he is
employed or a subdivision thereofM
ii. 8&ecute, under general supervision, wor! along
speciali3ed or technical lines re2uiring special
training, e&perience or !nowledgeM or
iii. 8&ecute, under general supervision, special
assignments and tas!s.
. )hey do not devote more than #BU of their hours
wor!ed in a wor!wee! to activities, which are not
directly and closely related to the performance of the
wor! prescribed in the above9mentioned 1, # and ;.
,8AS$(/ )hey may be considered managerial
employees as well. )hus, it would not be feasible to
provide a fi&ed hourly rate of pay or ma&imum hours
of wor! li!e managerial employees as previously
mentioned.
3& Dield 2ersonnel
.f they/
4a7 ,egularly perform their duties away from the
principal or branch office or place of business of
the employerM and
4b7 <hose actual hours of wor! in the field cannot be
determined with reasonable certainty.
,8AS$(/ )hese wor!ers perform their jobs away
from the employerCs place of business, and therefore
not subject to the personal supervision of their
employer. @is employer has no way of !nowing the
e&act number of hours he is wor!ing in a day, li!e
medical representatives and field salesmen. )heir
hours of wor! cannot be determined with reasonable
certainty.
;& 6embers of the family /ho are dependent upon
him for support
,8AS$(/ )he employer has already ta!en care of
the sustenance, clothing, medical attendance or
education of the particular members of his family.
(ote that this category refers to husband and wife,
parents and children, other descendants and
ascendants, brothers and sisters whether in the full
or half blood. .t does not include in9laws because
they do not pertain to the same family. Also !eep in
mind that the family must be dependent upon the
employer for support.
5& @ousehold helpers
6& 2ersons in the personal service of another&
9omestic servants and persons in the personal service of
another if they perform such services in the employerCs
home which are usually necessary and desirable for the
maintenance and enjoyment thereof, or minister to the
personal comfort, convenience or safety of the employer as
well as the members of the employerCs household.
,8AS$(/ )hey are already provided with living 2uarters,
food, and e&tra clothing such that all in all, it would e&ceed
the statutory minimum wage. Also, because the nature of
the wor! plus the fact that they are not employed in a
business underta!ing.
$& .or0ers paid by results
.ncluding those who are paid by piece9wor!, ta!ay, pa!iao,
or tas! basis, and other non9time wor! if their output rates
are in accordance with the standards under Section 6 ,ule
:.. 0oo! ... of these ,egulations, or where such rates have
been fi&ed by the S$*8 in accordance with the aforesaid
section.
,8AS$(/ )hey are not paid on an hourly basis but in their
output. )heir pay is dependent upon the wor! done
regardless of the time spent or employed in doing the wor!.
Moreover, they are governed by specific contracts. )heir
output should be fi&ed in accordance with Section 6 ,ule
:.. 0oo! ... of the $mnibus ,ules, which provide that they
shall receive not less than the applicable statutory wage
rates prescribed by law for the normal wor!ing hours which
shall not e&ceed 6 hours a day, or a proportion thereof for
wor! less than the normal wor!ing hours.
+lassification of wor!ers paid by result/
1. ?iece ,ate
#. Fob or tas! base.
O4ERTIME WOR:= RULE ; EXECEPTIONS
3ENERAL RULE

Article :7. <C. -4(RT,#( 6-RE
<or! may be performed beyond eight 467 hours a day
provided that the employee is paid for the overtime wor! an
additional compensation e2uivalent to his regular wage plus
at least #-U thereof. <or! performed beyond eight hours on
a holiday or rest day shall be paid an additional compensation
e2uivalent to the rate of the first eight hours on a holiday or
rest day plus at least ;BU thereof.
National S*i+yar6 an6 Steel Cor+oration vs. CIR
4 SCRA !(" ;%(#%<
18=.(.).$(
%$vertime compensation is additional pay for service or wor!
rendered or performed in e&cess of 6 hours a day by
employees or laborers in employment covered by eight hour
labor law 4now Art 677 and not e&empt from its re2uirements.
.t is computed by multiplying the overtime hourly rate by the
number of hours wor!ed in e&cess of eight.'
)NB vs. )EMA an6 CIR
%%1 SCRA 1"7 A%(!'B
,A).$(A*8
%:erily, there can be no other reason than that he is made to
wor! longer than what is commensurate with his agreed
compensation for the statutorily fi&ed or voluntarily agreed
hours of labor he is supposed to do. <hen he does spend
additional time to his wor!, the effect upon him is multi9
faceted, he puts in more effort, physical andEor mentalM he is
delayed in going home to his family to enjoy the comforts
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
45 of 61
SUN TZU NOTES
thereofM he might have no time for rela&ation,
amusement or sportsM he might miss important
prearranged engagements, etc.
.t is thus the additional wor!, labor or service
employed and the adverse effects just mentioned of
his longer stay in his place or wor! that justify and
are the real reasons for the e&tra compensation that
is called overtime pay.'
Bisig ng ManggagaHa ng )*ili+ine Refining Co. vs.
)*ili++ine Refining Co.$ In5.
R L3'77#% "(&4"&!%
$:8,).M8 ,A)8 0AS81 $( ,8>H*A, <A>8
%)he term ,8>H*A, 0AS8 ?AA e&cludes money
received by an employee in different concepts , such
as +hristmas bonus and other fringe benefits. )he
phrase ,8>H*A, 0AS8 ?AA is clear, une2uivocal and
re2uires no interpretation. .t means regular basic
pay and necessarily e&cludes money received in
different concepts such as +hristmas bonus and
other fringe benefits.'
Calte0 )*ili++ines vs. CIR
R 41'4( %%&"4&!#
%.n the computation of overtime pay, the premium
pay for wor! done on Sundays, holidays and at night
and other fringe benefits which are occasionally, not
regularly, received and not by all employees,
S@$H*1 ($) 08 A1181 )$ )@8 0AS.+ ?AA. Such
inclusion into the regular or basic pay militates
against the basic rationale of overtime pay, which is
simply the e&tra compensation for the additional
wor! done beyond that contemplated in the
employment contract. @ence, when additional pay is
given for any other purpose, it is illogical to include
the same as the basis for the computation of
overtime pay.'
Manila Railroa6 Co. vs. CIR
No. L32#%2 "7&4%&2'
%An e&press instruction from the employer to the
employee to render overtime wor! is not re2uired for
the employee to be entitled to overtime payM it is
sufficient that the employee is permitted or suffered
to wor!.
(either is an e&press approval by superior a
prere2uisite to ma!e overtime wor! compensable. .f
the wor! performed was necessary or that it
benefited the company or that the employee could
not abandon his wor! at the end of this eight hour
wor! because there was no substitute ready to ta!e
his place and he performed overtime services upon
the order of his immediate superiorM notwithstanding
the fact that there was a standing circular to the
effect that before overtime wor! may be performed
with pay, the approval of the corresponding
department head should be secured, such overtime
services are compensable in spite of the fact that
said overtime services were rendered without the
prior approval of the department head'
EXCEPTIONS
Art!c#e A-. (!ergenc$ -verti!e 6or+& Any
employee may be re:uired by the employer to
perform overtime wor! in any of the following cases/
4a7 <hen the country is at war or when any other
national or local emergency has been declared by
+ongress or the +hief 8&ecutiveM
4b7 <hen it is necessary to prevent loss of life or
property or in case of imminent danger to public
safety due to an actual or impending emergency in
the locality caused by serious accidents, fire, flood, typhoon,
earth2ua!e, epidemic or other disaster or calamityM
4c7 <hen there is urgent wor! to be performed on machines,
installation or e2uipment, in order to avoid serious loss or
damage to the employer or some other cause of similar
natureM
4d7 <hen the wor! is necessary to prevent loss or damage to
perishable goodsM
4e7 <here the completion or continuation of the wor! started
before the 6th hour is necessary to prevent serious
obstruction or prejudice to the business or operations of the
employer.
Any employee re2uired to render overtime wor! under this
Article shall be paid additional compensation re2uired in this
+hapter.
+$M?H*S$,A $:8,).M8 <$,N
Article 69 enunciates the situations where the employer
can legally compel his wor!ers to render overtime wor!.
)he employer should pay his wor!ers who render overtime
wor! the appropriate additional overtime compensation for
such wor!.
Aside from the instances mentioned in Art 69, the .,,
authori3es compulsory overtime wor! when it is necessary
%to avail of favorable weather or environmental conditions
where performance or 2uality or wor! is dependent
thereon 4Sec 1B, ,ule ., 0oo! ...7.
.n cases not falling within any of the enumerated cases or
instances, no employee may be made t wor! beyond 6
hours a day against his will 4Sec 1B, ,ule ., 0oo! ...7.
8DA(N
=or purposes of Article 67, a %day' 4or %daily'7 is understood
to be )@8 # @$H, ?8,.$1, <@.+@ +$MM8(+8S =,$M )@8
).M8 )@8 8M?*$A88 ,8>H*A,*A S)A,)S )$ <$,N. .t is not
necessarily the ordinary calendar day from 1# oC cloc!
midnight to 1# oCcloc! midnight unless the employee starts
wor!ing at 1# midnight, which is unli!ely in which case the
start of the #9hour period in computing his wor! day
coincides with the start of the calendar day.
Any wor! in e&cess of 6 hours within the # hour period is
considered as overtime wor! regardless of whether the
wor! covers two calendar days.
)he minimum wor!ing hours fi&ed by the act need not be
continuous to constitute as %legal wor!ing day' of 6 hours
as long as the 6 hours is within a wor! day.
<or! in e&cess of 6 hours within a wor! day is considered
as overtime regardless of whether this is performed in a
wor! shift other than at which the employee regularly
wor!s.
UNDERTIME NOT OFFSET B( O4ERTIME= ANALO3OUS
CASES
Art!c#e AA. %nderti!e not offset b$ overti!e&
Hndertime wor! on any particular day shall not be offset by
overtime wor! on any other day. ?ermission given to the
employee to go on leave on some other day of the wee! shall
not e&empt the employer from paying the additional
compensation re2uired in this +hapter.
Art!c#e -2. 'i4ht to service incentive leave& 4a7 8very
employee who has rendered at least one year of service shall
be entitled to a yearly service incentive leave of five days with
pay.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
46 of 61
SUN TZU NOTES
4b7 T6!s 7ro5!s!o s6"## ot "77#+ to those who
are already enjoying the benefit herein provided,
those enjoying vacation leave with pay at least five
days and those employed in establishments regularly
employing less than ten employees or in
establishments e&empted from granting this benefit
by the Secretary of *abor after considering the
viability or financial condition of such establishment.
4c7 )he grant of benefit in e&cess of that provided
herein shall not be made a subject of arbitration or
any court or administrative action.
Art!c#e -4. 'i4ht to holiday pay& 4a7 8very wor!er
shall be paid his regular daily wage during regular
holidays, e&cept in retail and service establishment
regularly employing less than ten wor!ersM
4b7 )he employer may re2uire an employee to wor!
on any holiday but such employee shall be paid a
compensation e2uivalent to twice his regular rateM
and
4c7 As used in this Article, SholidayS includes/ (ew
AearTs 1ay, Maundy )hursday, >ood =riday, the ninth
of April, the first of May, the twelfth of Fune, last
Sunday of August, first of (ovember, the thirtieth of
(ovember, the twenty9fifth and the thirtieth of
1ecember, thirty9first of 1ecember, and the day
designated by law for holding a general election.
EO 2-2 Re5!se$ A$)!!str"t!5e Co$e o& t6e
P6!#!77!es
CHAPTER /
RE3ULAR HOLIDA(S AND NATIONWIDE
SPECIAL DA(S
Sect!o 2B. 'e4ular @olidays and 3ation/ide
Special 9ays& 9
Hnless otherwise modified by law, order or
proclamation, the following regular holidays and
special days shall be observed in this country/
4A7 ,egular @olidays
(ew AearTs 1ay Fanuary 1
Maundy )hursday Movable date
>ood =riday Movable date
Araw ng Nagitingan 40ataan
and +orregidor 1ay7
April 9
*abor 1ay May 1
.ndependence 1ay Fune 1#
(ational @eroes 1ay *ast Sunday of August
0onifacio 1ay (ovember ;B
+hristmas 1ay 1ecember #-
,i3al 1ay 1ecember ;B
(ationwide Special 1ays
All Saints 1ay (ovember 1
*ast 1ay of the Aear 1ecember ;1
4#7 )he terms Slegal or regular holidayS and Sspecial holidayS,
as used in laws, orders, rules and regulations or other
issuances shall be referred to as Sregular holidayS and Sspecial
dayS, respectively.
Re7@*#!c Act No. -.//
AN ACT DECLARIN3 THE FIRST DA( OF "AA66A<, THE
TENTH MONTH OF THE ISLAMIC CALENDAR, A
NATIONAL HOLIDA( FOR THE OBSER4ANCE OF (,)%<
5,TR AND THE TENTH DA( OF FA%<) A,;;A. THE
TWELFTH MONTH OF THE ISLAMIC CALENDAR, A
RE3IONAL HOLIDA( IN THE AUTOMNOMOUS RE3ION
IN MUSLIM MINDANAO CARMMD FOR THE OBSER4ANCE
OF (,)%< A)AA, AMENDIN3 FOR THE PURPOSE
SECTION 2B, CHAPTER / OF EXECUTI4E ORDER NO.
2-2. OTHERWISE :NOWN AS THE ADMINISTRATI4E
CODE OF .-A/, AND FOR OTHER PURPOSES.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
47 of 61
SUN TZU NOTES
Sect!o 2. Section #", +hapter 7 of
8&ecutive $rder (o #9#, otherwise !nown as
the ,evised Administrative +ode of 1967 is
hereby amended to read as follows/
Sec. #". 'e4ular @olidays and 3ation/ide
Special 9ays 417 Hnless otherwise modified
by law, order or proclamation, the following
regular holidays and special days shall
observed in the country.
a7 ,egular @olidays
(ew AearTs 1ay 9 Fanuary 1
Maundy )hursday 9 Movable 1ate
>ood =riday 9 Movable 1ate
8idul =itr 9 Movable 1ate
Araw ng Nagitingan
40ataan and +orregidor 1ay7
9 April 9
*abor 1ay 9 May 1
.ndependence 1ay 9 Fune 1#
(ational @eroes 1ay 9 *ast Sunday of August
0onifacio 1ay 9 (ovember ;B
+hristmas 1ay 9 1ecember #-
,i3al 1ay 9 1ecember ;B
b7 (ationwide Special @olidays
All Saints 1ay 9 (ovember 1
*ast 1ay of the Aear 9 1ecember ;1
2rovided! ho/ever )hat Eidul Adha shall be
celebrated as a regional holiday in
Autonomous ,egion in Muslim Mindanao.S
Re7@*#!c Act No. -4-2 >@#+ 22,
2,,/
AN ACT RATIONALIOIN3 THE
CELEBRATION OF NATIONAL HOLIDA(S
AMENDIN3 FOR THE PURPOSE SECTION 2B,
CHAPTER /, BOO: I OF EXECUTI4E ORDER NO.
2-2, AS AMENDED, OTHERWISE :NOWN AS
THE ADMINISTRATI4E CODE OF .-A/
SECTION .. Section #", +hapter 7, 0oo! . of
8&ecutive $rder (o. #9#, as amended, otherwise
!nown as the Administrative +ode of 1967, is hereby
amended to read as follows/
SSec. #", ,egular @olidays and (ationwide
Special 1ays. J 417 Hnless otherwise
modified by law, and or proclamation, the
following regular holidays and special days
shall be observed in the country/
a7 ,egular @olidays
b7 (ationwide Special @olidays/
(inoy A2uino 1ay
All Saints 1ay 9 (ovember 1
*ast 1ay of the Aear 9 1ecember ;1
c7 .n the event the holiday falls on a
<ednesday, the holiday will be observed on
the Monday of the wee!. .f the holiday falls
on a Sunday, the holiday will be observed
on the Monday that follows/
?rovided, )hat for movable
holidays, the ?resident shall issue a
proclamation, at least si& months
prior to the holiday concerned, the
specific date that shall be declared
as a nonwor!ing day/
?rovided, however, )he 8idul Adha
shall be celebrated as a regional
holiday in the Autonomous ,egion
in Muslim Mindanao.S

Art!c#e AB. 3i4ht shift differential& 8very employee shall be
paid a night shift differential of not less than ten percent of
his regular wage for each hour of wor! performed between
ten oTcloc! in the evening and si& oTcloc! in the morning.
R"t!o"#e?
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
48 of 61
(ew years 1ay 9 Fanuary 1
Maundy )hursday 9 Movable date
>ood =riday 9 Movable date
E!$@# F!tr 9 Movable date
Araw ng Nagitingan
40ataaan and +orregidor 1ay7
9 Monday nearest April 9
*abor 1ay 9 Monday nearest May 1
.ndependence 1ay 9 Monday nearest Fune 1#
(ational @eroes 1ay 9 *ast Monday of August
0onifacio 1ay 9 Monday nearest (ovember ;B
+hristmas 1ay 9 1ecember #-
,i3al 1ay 9 Monday nearest 1ecember ;B
SUN TZU NOTES
%(ight wor! cannot be regarded as
desirable, either from the point of view of the 8, or
the wage earner. .t is uneconomical unless overhead
costs are unusually heavy. =re2uently the scale of
wages is higher an inducement to employment on
the night shift, and the rate of production is
generally lower' 4Shell +o. vs. (*H7
[ (ight shift differential not waivable.
)he %waiver' rule is not applicable in night
shift differential. )he additional compensation for
nighttime wor! is founded on public policy, hence the
same cannot be waived 4Artcle ", (++.7 5 KMercury
1rug +o., .nc. vs. (ardo 1ayaoL
Art!c#e -B. Service char4es& All service charges
collected by hotels, restaurants and similar
establishments shall be distributed at the rate of 6-
percent for all covered employees and 1- percent for
management. )he share of the employees shall be
e2ually distributed among them. .n case the service
charge is abolished, the share of the covered
employees shall be integrated into their wages.
[ Service charge applies only to establishments
collecting service charges, such as hotels,
restaurants, lodging houses, night clubs, coc!tail
lounges, massage clinics, bars, casinos and gambling
houses, and similar enterprises, including those
entities operating primarily as private subsidiaries of
the government. 4Section 1, ,ule :., 0oo! ...,
$mnibus ,ules7
XI. OTHER SPECIAL BENEFITS
?,8S.18().A* 18+,88 6-1
.1
TH
MONTH PA(
Sec.. All employers are hereby re2uired to pay all
their ran!9file employees a 1;
th
month pay not later
than 1ecember # of every year. <ith the removal of
the ceiling ?1, BBB.BB all ran!9and9file employees are
now entitled to a 1;
th
month pay regardless of the
amount of basic salary that they received in a
month, such employees as entitled to the benefit
regardless of their designation or employment status
and irrespective of method by which their wages are
paid provided that they have wor!ed for at least 1
month during the calendar year.
8D8M?)81 8M?*$A8,
a. government and any of its political
subdivisions including >$++
b. employers already paying their
employees a 1;
th
month pay or its
e2uivalent
c. employers of household helpers and
persons in the personal service of
another in relation to such wor!ers
d. employers of those who are paid on
purely commission, boundary or tas!
basis and those who are paid a fi&ed
amount for performing specific wor!
[ )he term %its e:uivalent' shall include +hristmas
bonus, mid9year bonus, cash bonuses and other
payments amounting to not less than 1E1# of the
basic salary.

Sec. 4 )he minimum of the 1;
th
month pay re2uired
by law shall not be less than 1E1# of the total basic
salary earned by an employee within a calendar year.
8arned because it is possible that the employee has
used his vacation leave, leave without pay which should not
be counted. )he employer can provide for more if he so
desire.
T!)e o& 7"+)et? )he re2uired 1;
th
month Kpay shall be
paid not later than 1ecember # of every year. An
employer, however may give to his employee ] of the
re2uired 1;
th
month pay before the opening of the
regular school year and the other half on or before the
#
th
of 1ecember of every year.
.1
t6
)ot6 7"+ o& res!'e$ or se7"r"te$ e)7#o+ee/ An
employee who has resigned or whose services were
terminated at anytime before the time for payment of the 1;
th
month pay is entitled to this monetary benefit on proportion
to the length of time he wor!ed during the year, up to the
time of his resignation or termination from the service, the
payment maybe demanded by the employee upon the
cessation of 8,988 relationship. )he benefits granted shall
not be credited as part of the employees and other benefits.
<or!ers paid by result are not entitled to this benefit only
those who are paid on apiece rate basis are specifically
mentioned by e&press provisions of the law.
0asic salary shall include all remuneration or earnings paid
by an employer to an employee 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 e2uivalent of unused
vacation and sic! leave credits, overtime premium, night
shift differential and holiday pay and cost9of9living9
allowance. @owever these salary related benefits should
be included as part of the basic salary related benefits
should be included as part of the basic salary in the
computation of the 1;
th
month pay if by individual or
collective agreement, company practice or policy, the
same are treated as part of the basic salary of the
employees.
)he law provides that the only re2uirement is that the
employee must have at least rendered 1 month of service
during the calendar year. )he does not forfeit or there is
no forfeiture provision under the law.

PATERNIT( LEA4E ACT OF .--B0R.A A.A/
Sec. # every married male employee in the private and public
sector shall be entitled to a paternity leave of 7 days with full
pay for the first four deliveries of the legitimate spouse with
whom he is cohabiting. )he male employee shall notify his
employer of the pregnancy of his spouse within reasonable
time and the e&pected date of delivery.
?aternity leave refers to the benefit granted to a married male
employee allowing him not to report for wor! for seven days
but continues to earn compensation therefor, on the condition
that his spouse delivered a child or suffered miscarriage for
purposes of enabling him to effectively lend support to his
wife in the period of recovery andEor nursing of a newly born
child.
+$(1.).$(S =$, 8().)*8M8() $= ?A)8,(.)A *8A:8
1. he is employed at the time of delivery of the child
#. he has notified his employer of the pregnancy of his
wife and her e&pected date of delivery
;. his wife has given birth suffers miscarriage or
abortion
)he employee shall accomplish a ?aternity (otification
=orm to be provided for by the employer and submit the
same to the latter together with a copy of his marriage
contract or if not any proof of marriage contract who has
availed of the paternity leave benefits shall with in
reasonable period of time submit a copy of birth certificate
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
49 of 61
SUN TZU NOTES
of the newly9born child, death or medical
certificate in case of miscarriage or abortion. .n
case such paternity leave benefit is not availed,
said leave shall not convertible to cash.
.f the employer does not comply with what is
mandated in ,.A. 6167 under section - the
employer maybe subject to a fine not e&ceeding
?#-, BBB.BB or imprisonment of not less than ;B
days nor more than "Bm days.
DOMESTIC ADOPTION ACT OF .--A < R.A. A222
SEC. .2
S@7er5!se$ Tr!"# Co@rt

(o person for adoption shall be finally granted until
the adopter4s7 has been given by the court
supervised trail custody period for at least " months
within which parties are e&pected to adjust
psychologically and emotionally to each other and
establish a bonding relationship. 1uring said period,
temporary parental authority shall be vested in the
adopter4s7.
)he court may motu propio or upon motion of any
party reduce the trial period if it finds the same to be
in the best interest of the adoptee, stating the
reasons for the reduction of the period. @owever for
alien adopters heEshe must complete the si& month
trial custody.
.f the child is below seven years of age and is placed
with the prospective adopter4s7 through a pre9
adoption placement authority issued by the
department the prospective adopter shall enjoy all
the benefits to which biological parents is entitled
from the date the adoptee is placed with the
prospective adopters.
4?lease insert new retirement law, ,A 7"1 and ,A
6-669+A() =.(1 )@.S $(8. S$,.7
LABOR AD4ISOR( ON RETIREMENT PA( LAW
+overage/
)he ,etirement ?ay *aw shall apply to all employees
in the private sector, regardless of their position,
designation or status, and irrespective of the method
by which their wages are paid. )hey shall include
part9time employees, employees of service and other
job contractors and domestic helpers or persons in
the Kpersonal service and agricultural establishment
or operations employing not more than 1B
employees or wor!ers and employees of the (ational
>overnment and its political subdivisions including
government9owned and controlled corporations, if
they are covered by the +ivil Service *aw and
regulations.
ART..12 FACILITIES FOR WOMEN
)he Secretary of labor shall establish standards that
will insure the safety and health of women
employees in appropriate cases, he shall by
regulations, re2uire employers to/
1. provide seats proper for women and permit
them to use such seat when they are free
from wor! and during wor!ing g hours,
provided they can perform their duties ion
this position without detriment to efficiency
#. to establish separate toilet and lavatories
for men and women and provide at least
dressing room for women
;. to establish a nursery in a wor!place for the
benefit of the women employees therein
. to determine appropriate minimum age and
other standards for retirement or
termination in special occupations such as those of
flight attendants and the li!e
SOLO PARENT WELFARE ACT0R.A.-A/2
1efinition of terms/
Solo ?arent9 any individual who falls under any of the
following categories/
17 a woman who gives birth as a result of rape final
conviction of the offender/ provided that the mother
!eeps and raises the childM
#7 parent left solo or alone with the responsibility of
parenthood due to death or spouseM
;7 parent left solo or alone with the responsibility of
parenthood while the spouse is detained or is serving
sentence for a criminal conviction for at least 1 year
7 parent left solo or alone with the responsibility of
parenthood due to physical andEor mental incapacity
of a spouse as certified by a public medical
practitioner
-7 parent left solo or alone with the responsibility of
parenthood due to legal separation or de facto
separation form spouse fro at least 1 year, as long as
sheEhe is entrusted with the custody of the children
"7 parent left solo or alone with the responsibility of
parenthood due to declaration of nullity or
annulment of marriage as decreed by a court or by a
church as long as heEshe is entrusted with the
custody of the children
77 parent left solo or alone with the responsibility of
parenthood due to abandonment of a spouse for at
least 1 year
67 unmarried fatherEmother who has preferred !eep
and rear herEhis childE children instead of having
others care for them or give them up to a written
welfare institutionM
97 any other person who solely provides parental care
and support to am child or childrenM
1B7 any family member who assumes the responsibility
of head of family as result of the death,
abandonment, disappearance or prolonged absence
of the parents or solo parent
[ A change in the status or circumstance of the parent
claiming benefits under this Act, such that heEshe is no longer
left alone with the responsibility of parenthood shall terminate
hisEher eligibility for these benefits
?arental *eave shall mean leave benefits granted to solo
parent to enable himEher to perform parental duties and
responsibilities where physical presence is re2uired
=le&ible <or! Schedule is the right granted to a solo parent
employee to vary hisEher arrival and departure time without
affecting the core wor! hours as defined by the employer
Sec. B )he employer shall provide for fle&ible wor!ing
schedule for solo parents/ ?rovided that the same shall not
affect individual and company productivityM provided further
that any employer may re2uest e&emption from the above
re2uirements from the 1$*8 on certain meritorious grounds.

Sec. A in addition to leave privileges under e&isting laws,
parental leave of not more than 7 wor!ing days every year
shall be granted to any solo parent employee who has
rendered service of at least 1 year.

ANTI04IOLENCE A3AINST WOMEN ; THEIR CHILDREN
ACT OF 2,,40 R.A -2B2
"ec&2 )eclaration of olic$9 it is hereby declared that the
state values the dignity of women and children
and guarantees full respect for human rights. )he
state recogni3es the need to protect the family
and its members particularly women and children
form violence and threats to their personal safety
and security.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
50 of 61
SUN TZU NOTES
)owards this end, the state shall e&ert
efforts to address violence committed
against women and children in !eeping
with the fundamental freedoms
guaranteed under the +onstitution and
the ?rovisions of the Hniversal
declaration of @uman rights, the
+onvention on the 8limination of all
forms of discrimination against women,
+onvention on the rights of the +hild
and the other international human rights
instruments of which the ?hilippines is a
party.
Sec.A Protect!o Or$er < A Kprotection order is an
order issued under this act for the
purpose of preventing further acts of
violence against a women or her child
specified in section - of these Act- and
granting other necessary relief. )he
relief granted under a protection order
serve the purpose of safeguarding the
victim from further harm, minimi3ing
any disruption in the victimsC daily life,
and facilitating the opportunity and
ability of the victim to independently
regain control over her life. )he
provisions of the protection order shall
enforced by law enforcement agencies.
)he protection orders that may be
issued under this Act are the baran4ay
protection order )A2+*! temporary
protection order )(2+*! and permanent
protection order&
"(C. 42 Training of &ersons ,nvolved in t'e
Resonding to 4iolence Against
6o!en and t'eir C'ildren Cases- All
a4encies involved in respondin4 to
violence a4ainst /omen and their
children cases shall be re:uired to
under4o education and trainin4 to
ac:uaint them /ithC
a& the nature! e?tend and causes of
violence a4ainst /omen and their
children H
b. the legal rights of, and remedies
available to, victims of violence against
women and their children
c. the services and facilities available to
victims or survivors
d. the legal duties imposed on police
officers to ma!e arrest and to offer
protection and assistance, and
e. techni2ues for handling incidents of
violence against women and their
children that minimi3e the li!elihood of
injury to the offender and promote the
safety of the victim or survivor.
)he ?(?, in coordination with *>HCs shall
establish an education and training program
for police officers and barangay officials to
enable them to properly handle cases of
violence against women and their children

XII. RIGHT TO SECURITY OF
TENURE
SECURIT( OF TENURE
ARTICLE 2/-. "ecurit$ of Tenure. I .n cases
of regular employment, the employer shall not
terminate the services of an employee e&cept for a
just cause or when authori3ed by this )itle. An
employee who is unjustly dismissed from wor! shall
be entitled to reinstatement without loss of seniority rights
and to his bac!wages computed from the time his
compensation was withheld from him up to time of his actual
reinstatement. 4As amended by ,A "71-7
S8+H,.)A $= )8(H,8
is the right of the employee to continue wor! until terminated
for a just or authori3ed cause )as provided by la/*&
+$(S).)H).$(A* 0AS.S 4Art. 1;, Sec. ;, 1967 +onstitution7
)he State shall afford full protection to labor, local
and overseas, organi3ed and unorgani3ed, and
promote full employment and e2uality of
employment opportunities for all.
.t shall guarantee the rights of all wor!ers to self9
organi3ations, and peaceful concerted activities, including the
right to stri!e in accordance with law. )hey shall be entitled to
security of tenure, humane conditions of wor!, and a living
wage. )hey shall also participate in policy and decision9
ma!ing processes affecting their rights and benefits as may
be provided by law.
)he State shall promote the principle of shared responsibility
between wor!ers and employers and the preferential use of
voluntary modes in settling disputes, including conciliation,
and shall enforce their mutual compliance therewith to foster
industrial peace.
)he State shall regulate the relations between wor!ers and
employers, recogni3ing the right of labor to its just share in
the fruits of production and the right of enterprises to
reasonable returns on investments, and to e&pansion and
growth.
S)A)H)$,A 0AS.S 4Art. #79, *abor +ode [shown above7
MARQUEO: Although Art. #79 starts with %n cases of re4ular
employment ???<, jurisprudence will show that security of
tenure is guaranteed not only to regular employees, non9
regular employees also enjoy security of tenure, but only to a
limited sense.
CLASSIFICATION OF EMPLO(MENT AND :INDS OF
EMPLO(EES
ART,C<( 2:0. Regular and casual e!lo$!ent. 0 The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreements of the
parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or
trade of the employer e&cept where the employment has
been fi&ed for a specific project or underta!ing, the
completion or termination of which has been determined at
the time of the engagement of the employee or where the
wor! or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph/ ?rovided, )hat any
employee who has rendered at least one year of service,
whether such service is continuous or bro!en, shall be
considered a regular employee with respect to the activity in
which he is employed and his employment shall continue
while such activity e&ists.
MA,IH8O : 1o not forget that Art. #6B is ($) the yardstic! in
determining employer9employee relationship. <hat is
controlling is the four9fold test and 4now7 the economic reality
test. Art. #6B applies only when the e&istence of employer9
employee relationship is not in dispute.
N.(1S $= 8M?*$AM8():
H(18, )@8 *A0$, +$18
1. ,egular 8mployment 9 an employment shall be deemed
to be regular where the employee has been engaged to
perform activities which are usually necessary or
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
51 of 61
SUN TZU NOTES
desirable in the usual business or trade of the
employer.
9A ,egular 8mployee may either be:
a. ?ermanent 5 one who has an indefinite
employment, whether
passing the probationary
stage or not
b. ?robationary 5 one who is placed
in a trial period whose performance is assessed
whether satisfactory or not. .f performance is
satisfactory, it is followed by a regular employment,
if not, the employment is terminated.
[ An employer has the prerogative whether to
subject the employee with probationary
employment or not. )hus, an employee may be
considered as a permanent employee on his first
day of wor!.
#. +asual 8mployment 9 An employment shall be
deemed to be casual if it is not covered by the
preceding paragraph 4regular employment7
9 does not have security of tenure before
reaching the one9year period, however, if he has
rendered at least one year of service, whether
such service is continuous or bro!en, he shall be
considered a regular employee with respect to
the activity in which he is employed and his
employment shall continue while such activity
e&ists.
;. .?roject 8mployment 5 is one where the
employment has been fi&ed for a specific project
or underta!ing, the completion or termination of
which has been determined at the time of the
engagement of the employee
. Seasonal 8mployment 9 is one where the wor!
or service to be performed is seasonal in nature
and the employment is for the duration of the
season.
9 +ourt decisions consider seasonal employees
as regular employees, as their employment
relationship is never severed but only
suspended. 4Manila @otel, September ;B, 19";;
?hil. )obacco =lue9curing, 1ecember 1B, 19967
ART,C<( 2:1. &robationar$ e!lo$!ent. R
?robationary employment shall not e&ceed si&
months from the date the employee started wor!ing,
unless it is covered by an apprenticeship agreement
stipulating a longer period. )he services of an
employee who has been engaged on a probationary
basis may be terminated for a just cause or when he
fails to 2ualify as a regular employee in accordance
with reasonable standards made !nown by the
employer to the employee at the time of his
engagement. An employee who is allowed to wor!
after a probationary period shall be considered a
regular employee.

-. ?robationary 8mployment 5 is one who is on
tentative employment during which the
employer determines whether he 4employee7 is
2ualified for permanent employment.
9 *+ provides that the duration of probation is "
months. )he e&ceptions are the following: 4a7
??? unless it is covered by an apprenticeship
agreement stipulating a longer period; and 4b7
the Manual of ,egulations for ?rivate School
provides a longer probationary period. ,ationale:
MA,IH8O : 8ducation is the grass root of all
profession.
9 Security of tenure is still available to
probationary employees, but only for a limited
period.
$)@8, +*ASS.=.+A).$( 4Special *aws7
1. +onstruction .ndustry 41epartment $rder (o.
19, Series of 199;7
a. ?roject
b. (on9?roject
b.1. probationary
b.#. regular
b.;. casual
#. 0roadcast .ndustry 41$*8 ?olicy .nstruction (o. B7
[Same classification as in the *abor +ode. ?olicy
.nstruction (o. B has been declared to be of ($ effect in
the case of Son3a vs. A0S9+0( 4>.,. 1;6B-1, Fune 1B,
#BB7
;. .n ?rivate 8ducational .nstitutions 4Manual of ,egulations
for ?rivate School7
[ as simply classified by Mar2ue3
a. Academic ?ersonnel
a.1. Academic teaching
a.#. Academic non9teaching )e?& (he librarian*
b. (on9Academic ?ersonnel 5 those staff who perform
administrative functions but are not involved in
academic wor!
[ )heir employment is ($) covered by the M,?S or
by the ):8) Manual but by the *abor +ode.
. .n @ospitals
I: Are ,esident ?hysicians considered employees of
hospitalsJ
A: MA,IH8O : .t depends. .f undergoing training, he is
($) an employee of the hospital. .f not undergoing
training, he is an employee, but only on a term basis.
0AS.S: $mnibus ,ules, 0oo! ..., ,ule D9A, Sec.1-
,8S.18()S .( ),A.(.(>. I )here is employer9employee
relationship between resident physicians and the training
hospitals, H(*8SS:
417 there is a training agreement between them; and
4#7 the training program is duly accredited or approved
by the appropriate government agency. D&&
EXCEPTIONS TO RE3ULAR EMPLO(MENT
.( )@8 *A0$, +$18
1. Seasonal 8mployment
#. ?roject 8mployment
;. +asual 8mployment
FH,.S?,H18(+8 40rent School vs. Oamora, =ebruary
9, 199B7
. =i&ed )ermE?eriod 8mployment 5 an employment that will
last only for a definite period, as agreed by the parties.
9)his !ind of employment is not per se illegal or against
public policy, even if this !ind of employment is not
mentioned in Art. #6B of the +ode. Such !ind of
employment contract may be justified in the +ivil +ode.
9 MA,IH8O : Art. #6B does not prohibit agreements
voluntarily agreed upon by the employer A(1 employee,
provided that it is not used to circumvent the right of
security of tenure.
XIII. MANAGEMENT PREROGATIVE
CONCEPT
)he right of an employer to regulate, generally without
restraint, according to its own discretion and judgment,
every aspect of its business, subject to limitations of the
law.
.t should be e&ercised in good faith.
)his privilege is inherent in the right of employers to
control and manage their enterprise effectively.
SCOPE
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
52 of 61
SUN TZU NOTES
(8tent of #anage!ent &rerogative to
&rescribe 6or+ing #et'ods> Ti!e>
&lace> #anner and -t'er Asects of
6or+
8mployers have the freedom and prerogative,
according to their discretion and best judgment,
to regulate and control all aspects of employment
in their business organi3ations. Such aspects of
employment include hiring, wor! assignments,
wor!ing methods, time, place and manner of
wor!, tools to be used, processes to be followed,
supervision of wor!ers, wor!ing regulations,
transfer of employees, wor! supervision, lay9off
of wor!ers and the discipline, dismissal and recall
of wor!ers. 4?hilippine Airlines, .nc. vs. (*,+, >.
,. (o. 11-76-, Aug. , #BBB7.
)hus, as held in one case, management retains
the prerogative, whenever e&igencies of the
service so re2uire, to change the wor!ing hours
of its employees.
LIMITATIONS ON THE EXERCISE OF
MANA3EMENT PRERO3ATI4ES
)he e&ercise of management prerogative is not
absolute but subject to the limitations imposed by
law or by +0A, employment contract, employer
policy or practice and general principles of fair play
and justice.
1. R!'6t to H!re 9)his is inherently a
management right because it is not found in
the *abor +ode. @ence, it is not a statutory
right.
#. R!'6t to Pro)ote 9 ?romotion is the
Sadvancement from one position to another
with an increase in duties and
responsibilities as authori3ed by law, and
usually accompanied by an increase in
salary.S
+onsent here is re2uired.
;. R!'6t to De)ote 9 1emotion means the
movement from one position to another
with a diminution in duties andEor status or
ran!, not necessarily with a reduction in
salary. 1emotion necessitates the issuance
of a notification for demotion for cause.
^ .t may be e&ercised by an employer when
the interests of the employer reasonably demand
subject to the following limitations/
a.7 .t must not be e&ercised arbitrarily, capriciously or
whimsically.
b.7 .t must be for a cause
c.7 .t must pass the test of reasonableness, e2uity and
good faith.
^ =ailure on these re2uirements may amount
to illegal or constructive dismissal, as the case may
be. .t is even more so if the demotion is not part of
the company policy.
. R!'6t to Tr"s&er 9 )ransfer is a Smovement from
one position to another which is of e2uivalent ran!,
level or salary, without brea! in service.
^ )his right can be challenged if it is e&ercised
arbitrarily or capriciously or in the absence of good
faith.
^ +onsent here on the part of the employee is not
re2uired since this can only be e&ercised by the
management in accordance with best interest of the
company by trying to see where a particular employee can be
best ma&imi3ed.
^ )ransfer is reasonable if there is a need to augment wor!
force because of a wor! assignment.
ReG@!s!tes &or " 4"#!$ Tr"s&er?
a.7 ,easonable or it must have a sound purpose.
b.7 +onvenience or welfare of the employee.
c.7 (ot prejudicial to the employee
d.7 (ot involve a demotion of ran! or status or a diminution of
the employeeCs salary, benefits and other benefits.
:iolation of the above re2uirements amounts to
constructive dismissal.
-. R!'6t to D!s)!ss
.t is a right to on the management as a measure of
self9protection on the part of the employer against all acts
inimical to its interest. .t is not simply a prerogative but a
right because it is found in the *abor +ode.
OTHERS?
a. ,eorgani3ation and abolition of positions
b. 8arly retirement program
c. :oluntary resignation program
d. Fob evaluation program
EMPLO(MENT POLICIES "$ STIPULATIONS
a. ,estrictive covenant clauses
b. (on9competing clause and competitive
employment ban 9
c. (o spouse employment policy 5 to avoid conflict
of interest
XIV. TERMINATION OF EMPLOYMENT
EMPLO(ERNS RI3HT TO DISCIPLINE

^ ,ight to 1iscipline.
)he employerCs right to conduct the affairs of his
business, according to its own discretion and judgment,
includes the prerogative to instill discipline in its
employees and to impose penalties, including dismissal,
upon erring employees. )his is a management
prerogative where the free will of management to
conduct its own affairs to achieve its purpose ta!es form.
)he only criterion to guide the e&ercise of its
management prerogative is that the policies, rules and
regulations on wor!9related activities of the employees
must always be fair and reasonable and the
corresponding penalties, when prescribed, commensurate
to the offense involved and to the degree of the
infraction. 4St. MichaelCs .nstitute vs. Santos, >. ,. (o.
1-#6B, 1ec. , #BB1M +onsolidated =ood +orporation vs.
(,*+, ;1- S+,A 1#9, 1;9 K1999L7.
.nstilling discipline among its employees is a basic
management right and prerogative. Management may
lawfully impose reasonable penalties such as dismissal
upon an employee who transgresses the company rules
and regulations. 41eles, Fr. vs. (*,+, >. ,. (o. 1#1;6,
March 9, #BBB7.
)he employer cannot be compelled to maintain in his
employ the undeserving, if not undesirable, employees.
4Shoemart, .nc. vs. (*,+, >. ,. (o. 7##9, Aug. 11,
19697.
DISMISSAL
A.7 Act@"# D!s)!ss"#
0.7 Costr@ct!5e D!s)!ss"# 9 act of 2uitting because
continued employment is rendered impossible,
unreasonable or unli!ely as in the case of an offer
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
53 of 61
SUN TZU NOTES
involving a demotion in ran! and a
diminution in pay.
3ROUNDS FOR TERMINATION OF EMPLO(MENT
A.2 ;%"T CA%"(" 1Art. 2:22
1. Serious Misconduct
#. <illful disobedience E >ross and habitual
neglect of duties
;. =raud and <illful breach or offense
. +ommission of a crime or offense
-. $ther analogous causes
Ser!o@s M!sco$@ct
^ )he act complained of must be related to
the performance of the duties of the
employee such as would show that the
employee concerned is unfit to continue
wor!ing with the employer.
)he important element is that the act must be
committed in relation to the employeeCs wor!.
8lements/
a. an improper act
b. willful in nature
c. of a grave and aggravated character
d. wor! related
W!##&@# D!so*e$!ece
^ )o constitute disobedience, the employeeCs
conduct must be willful or intentional.
.t is characteri3ed by a wrongful and
perverse mental attitude rendering the
employeeCs act inconsistent with the proper
subordination.
)he orders, regulation or instruction of the
employer against which the employee willfully
disobeys must be/
a. reasonable and lawful
b. refers both to the !inds
and character of the direction and
commands and the manner in which they
are made of given
c. sufficiently !nown to the
employee
d. in connection with the
duties which the employee has been
engaged to discharge
3ross Ne'#ect 5 means an absence of that
diligence which an ordinary man would use in
his own affairs. .t must be both and habitual but
in =uentes vs. nlrc, the S+ held that gross
negligence suffices.
Fr"@$ "$ W!##&@# Bre"c6 o& Tr@st
Fr"@$ 9 any act or omission or concealment
which involves a breach of legal duty, trust and
confidence justly reposed, and is injurious to
another.
Must be committed against the employer or
representative and in connection with the
employeeCs wor!.
)he position imposed must be imposed with
trust and confidence.
)he breach committed by an employee
against third persons not in connection with
his wor! and which does not involve his
employer is not a ground for the dismissal.
.t implies willfulness or wrongful intent, an innocent
non9disclosure of facts by the employee done to the
employee will not constitute just cause for the
dismissal.
8lements/
a. the breach must be wor!9relatedM and
b. the position must be impressed with trust and
confidence 4employee has custody over the funds,
money or other property of the company7
I)7ort"t? Management has wider discretion in
terminating employees holding position impressed with
trust and confidence.
0reach is said to be willful if intentional, if done
!nowingly, deliberately and without justifiable e&cuse.
Co))!ss!o o& " Cr!)e or " O&&ese
^ +onviction is not necessary to effect termination on
this ground.
^ )he 2uantum of evidence is merely substantial
evidence.
Ot6er A"#o'o@s C"@ses
^ )hese are causes that are in one or more respects
similar to the above9mentioned causes, and have
been delivered by the S+. )he following were held to
be just causes.
1. A*"$o)et 9 prolonged absence is not alone a
sufficient basis to say that an employee has abandoned
his wor!. Absences must also fall under gross and
habitual neglect. )he immediate filing of a complaint for
illegal dismissal against an employer, with a prayer for
reinstatement negates the employeesC intent to abandon
his job.
,e2uisites/
a. =ailure to report for wor! or absence without any
valid or justifiable reasonM and
b. +lear intention to sever the employee9employer
relationship.
#. Se&ual @arassment
;. >ross .nefficiency or ?oor ?erformance
. 1rug Hse or Abuse 4,A 91"-7
-. Attitude ?roblem
". +onflict of .nterest
7. *ac! of +ommon Sense
3.2 A%TA-R,F() CA%"(" 1Art. 2:32
1. .nstallation of *abor9Saving 1evices
#. ,edundancy
;. ,etrenchment to ?revent *osses
. +losing or +essation of $peration of the
8stablishment or Hnderta!ing H(*8SS the
closing is for the purpose of circumventing the
provisions of law.
OTHER AUTHORIOED CAUSES?
-. )otal and ?ermanent 1isability of An 8mployee
". 1isease (ot +urable in Si& Months
7. :alid Application of a Hnion Security +lause
6. 8&piration of ?eriod in )erm 8mployment
9. +ompletion of ?roject in ?roject 8mployment
1B. =ailure in ?robation
11. Sale Amounting to +losure of 0usiness
1#. ,elocation of 0usiness to a 1istant ?lace
1;. 1efiance of ,eturn9to9<or! $rder
1. +ommission of .llegal Acts in a Stri!e
1-. (on9feasible ,einstatement
1". =loating Status or $ff91etail 0eyond Si& Months
17. ,esignation
16. :iolation of a +ontractual +ommitment e.g.
being a consultant to a competitor
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
54 of 61
SUN TZU NOTES
19. ,etirement
#B. 1eath of employee
Ist"##"t!o o& L"*or0S"5!' De5!ces

^ ,eduction of the number of wor!ers in a
companyCs factory made necessary by the
introduction of machinery in the
manufacture of its products is justified.
)here can be no 2uestion as to the right of
the manufacturer to use new labor9saving
devices with a view to effecting more
economy and efficiency in its method of
production.
Re$@$"c+
^ ,edundancy e&ists where the services of an
employee are in e&cess of what is
reasonably demanded by the actual
re2uirement of the enterprise.
^ )he following are the causes of redundancy/
o $ver9hiring of wor!ers
o 1ecreased volume of business
o 1ropping of a particular product
line
o Streamlining of operations
o *ac! of demand for products
Retrec6)et to Pre5et Losses
ReG@!s!tes &or " 4"#!$ Retrec6)et?
a. )he retrenchment is necessary to prevent
losses and such losses are provenM
b. <ritten notice to the employees and to the
1epartment of *abor and 8mployment at
least one moth prior to the intended date of
retrenchmentM and
c. ?ayment of separation pay e2uivalent to
one moth pay or at least ] month pay for
every year of service, whichever is higher.
Fo@r St"$"r$s o& Retrec6)et?

a. )he losses e&pected should be substantial
and not merely de minimis in e&tent.
b. )he substantial loss apprehended must be
reasonably imminent, as such imminence
can be perceived objectively and in good
faith by the employer.
c. ,etrenchment must be reasonably
necessary and li!ely to effectively prevent
the e&pected losses.
d. Alleged losses, if already reali3ed, and the
e&pected imminent losses sought to be
forestalled, must be proven by sufficient
and convincing evidence.
C#os@re o& B@s!ess
^ +losure of business is allowed whether or
not the business is losing. .f the business is
not losing but its owner, for reasons of his
own, wants to get out of the business, he in
good faith can lawfully do so anytime. Fust
as no law forces anyone to go into business,
no law compels anybody to stay in business.
^ )he prevailing rule now is that in case of
closure due to serious business losses, then
the employer is not under any obligation to
give its employees separation pay.
A!#)et or D!se"se
ReG@!s!tes?

a. )he employee suffers from a disease and his
continued employment is prohibited by law or
prejudicial to his health or to the health of his co9
employees.
b. )here is a certification by a competent public health
authority that the disease is of such nature or at
such a stage that is cannot be cured within a period
of si& months even with proper medical treatment.
TERMINATION OF ACADEMIC PERSONNEL 4Manual of
,egulation of ?rivate Schools shall govern and suppletorily by
the *abor +ode7
^ Section 9 4#7 of the Manual of ,egulation of ?rivate
Schools/
1. 1isgraceful or .mmoral +onduct
.mmoral +onduct 9 any act that is inimical to the
public welfare and policy as e&pressed in law.
1isgraceful +onduct 9 that which is shameful,
scandalous, or dishonorable.
#. >ross .nefficiency and .ncompetence in the
?erformance of 1uties
;. (egligence in Neeping School and Student ,ecords or
)ampering with or =alsification of )hese ,ecords
. 0eing (otoriously Hndesirable.
-. Selling of )ic!ets or +ollection of Any +ontribution in
Any =orm or for Any ?urpose or ?rojects <hatsoever,
whether voluntary or otherwise 8D+8?) >irl or 0oy
Scout Membership =ees among others
REQUISITES FOR 4ALID TERMINATION
1. ?rocedural ,e2uirementsM A(1
#. Substantial ,e2uirements such as the e&istence of a
just or authori3ed cause
>UST CAUSES CD.O. No. - Iss@e$ >@e 2.,
.--/D
1. <ritten notice served on the employee specifying the
ground for termination, and giving to such employee
reasonable opportunity within which to e&plain his
side. Krule DD..., section 1 4a7 L
#. <ritten notice of termination served on the employee
indicating that upon due consideration of all the
circumstances, grounds have been established to
justify his termination. Krule DD..., section # 417 4b7L
)here must be a hearing or conference during which
the employment concerned, with the assistance of
counsel if the employee so desires, so that he may be
given an opportunity to respond to the charge, present
his evidence or rebut the evidence presented against
him.
As long as the substantive re2uirements are
complied with, the termination is valid, but defective. )he
employer may be held liable for indemnity in the form
damages, for not having complied with the procedural
aspect of due process. .f only the procedural
re2uirements and not the substantial re2uirements are
complied with, the dismissal is invalid and illegal. .t is a
deprivation of an employee of his right to due process.
AUTHORIOED CAUSES
1. Serve a written notice upon the wor!er at least one
month before the intended date of the termination.
1.$. (o. 9 states %;B days.'
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
55 of 61
SUN TZU NOTES
)his is to inform the employee of the
impending loss of his employment, thus enable
him to loo! for a fallbac! position at the earliest
opportunity.
#. Serve a written notice upon the 1epartment
of *abor and 8mployment at least one
month or ;B days before the intended date
thereof.
)his is in order for the 1$*8 to/
a. 1etermine the validity of the dismissalM
and
b. )o intervene for a possible conciliation
or mediation
;. )o give Separation ?ay where warranted or
applicable.
PRE4ENTI4E SUSPENSION
^ )he right to impose preventive suspension
is a management prerogative although it is
not found in the *+. .t is found in its
implementing and regulations.
4"#!$ S@s7es!o?
.f the employees continued employment
poses a serious and imminent threat to the
life and or property of the employer or of
his co9wor!ers. 4section ;, rule D.:, boo! :7
.t is not a form of penaltyM it is more of a
protective measure underta!en by the
employer. $ne cannot impose a penalty
because the employee cannot be punished
without due process. .n practice,
preventive suspension notice should be in
writing.
Ma&imum ?eriod/ ;B days
)he employer shall thereafter
a7 ,einstate the wor!er in his former
or in a substantially e2uivalent
positionM or
b7 )he employer may e&tend the
period of suspension, provided that
during the period of e&tension, he
pays the wages and other benefits
due to the wor!er concerned. .n
such a case, the wor!er shall not
be bound to reimburse the amount
paid to him during the e&tension if
the employer decides, after
completion of the hearing, to
dismiss the wor!er.
DUE PROCESS
.. Art!c#e 2// C*D
Subject to the constitutional right of
wor!ers to security of tenure and their right to
be protected against dismissal e&cept for a just
and authori3ed cause and without prejudice to
the re2uirement of notice under Article #6; of
this +ode, the employer shall furnish the wor!er
whose employment is sought to be terminated a
written notice containing a statement of the
causes for termination and shall afford the latter
ample opportunity to be heard and to defend
himself with the assistance of his representative
if he so desires in accordance with company
rules and regulations promulgated pursuant to
guidelines set by the 1epartment of *abor and
8mployment. Any decision ta!en by the
employer shall be without prejudice to the right
of the wor!ers to contest the validity or legality
of his dismissal by filing a complaint with the
regional branch of the (ational *abor ,elations
+ommission. )he burden of proving that the
termination was for a valid or authori3ed cause shall rest
on the employer.
)he Secretary of the 1epartment of *abor and
8mployment may suspend the effects of the termination
pending resolution of the dispute in the event of a prima
facie finding by the appropriate official of the 1epartment
of *abor and 8mployment before whom such dispute is
pending that the termination may cause a serious labor
dispute or is in implementation of a mass layoff.
2. Sect!o ., Art!c#e III, .-A/ Cost!t@t!o
(o person shall be deprived of life, liberty and
property without due process of law.
EFFECT OR CONSEQUENCES OF 4ALID DISMISSAL
>eneral ,ule/ <hen an employee is dismissed and the
dismissal complies with both substantive and procedural due
process, separation pay is not given.
8&ception/ .f one is dismissed based on a just cause, and
such cause does not constitute serious misconduct nor reflect
the employeesC moral character, Separation pay may be
validly awarded to the employee concern. )his is called the
1.S+8,(.(> +$M?ASS.$( 1$+),.(8.
^ )he award of Separation ?ay is called a =.(A(+.A*
ASS.S)A(+8 and is awarded based on e2uity. .t is a
measure of social justice where the employee is
validly dismissed for causes not constituting serious
misconduct or those reflecting on his moral
character.
^ .n most cases, the Supreme +ourt awarded financial
assistance e2uivalent to one9half month pay for
every year of service.
^ >UST CAUSE 9 Separation pay, in lieu of
reinstatement, shall include the amount e2uivalent
at least to one 417 month salary or to one 417 month
salary for every year of service, whichever is higher,
a fraction of at least si& 4"7 months being considered
as one 417 whole year including regular allowances.
.f not regular, not included.
^ AUTHORIOED CAUSE 5 Separation pay is as
follows/
a7 .n case of termination due to the
installation of labor9saving devices or
redundancy, the wor!er affected
thereby shall be entitled to a separation
pay e2uivalent to at least one 417
month pay or to at least one 417 month
pay for every year of service, whichever
is higher.
b7 .n case of retrenchment to prevent
losses and in cases of closures or
cessation of operations of
establishment or underta!ing not due
to serious business losses or financial
reverses, the separation pay shall be
e2uivalent to one 417 month pay or at
least one9half 41E#7 month pay for
every year of service, whichever is
higher. A fraction of at least si& 4"7
months shall be considered one 417
whole year.
c7 .n cases of closures or cessation of
operations of establishment or
underta!ing due to serious business
losses or financial reverses, there shall
be no separation pay.
EFFECT OR CONSEQUENCES OF ILLE3AL DISMISSAL
^ Article #79, *+/ .n cases of regular employment, the
employer shall not terminate the services of an
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
56 of 61
SUN TZU NOTES
employee e&cept for a just cause or when
authori3ed by this )itle. An employee who is
unjustly dismissed from wor! shall be
entitled to reinstatement without loss of
seniority rights and other privileges and to
his full bac!wages, inclusive of allowances,
and to his other benefits to their monetary
e2uivalent computed from the time his
compensation was withheld from him up to
the time of his actual reinstatement.
^ .n a host of cases, the court has upheld the
employeeCs right to security of tenure in the
face of oppressive management behavior
and management prerogative. Security of
tenure is a right which may not be denied
on mere speculation of any unclear and
nebulous basis.
RI3HTS OF AN ILLE3ALL( DISMISSED
EMPLO(EE
1. 0ac!wages 9 the salary that the employee
would have earned had he no been illegally
dismissed. .t is computed from the date of
the illegal dismissal up to the date of the
illegal dismissal up to the date of the
employeeCs actual reinstatement.
#. ,einstatement or separation pay incase
reinstatement is no longer feasible
>eneral ,ule/ ,estoration of the employee
to his previous position or to a substantially
e2uivalent position without loss of seniority
rights and other privileges.
8&ceptions/
a. strained relationship
b. it is legally or physically impossible
c. because of supervening events
d. when employee voluntarily opts to be
awarded separation pay
;. 1amages particularly moral and e&emplary
where warranted
CORPORATE OFFICERS
^ )hree 4;7 officers which a corporation must
have under the statute/ president,
secretary, and treasurer. @owever, the law
does not limit corporate officers to these
three. Section #- of the +orporation +ode
gives corporations the widest latitude to
provide for such other offices, as they may
deem necessary. )he by9laws may and
usually do provide for such other officers,
e.g., vice president, cashier, auditor, and
general manager. +onse2uently, the
Supreme +ourt has held that one who is
included in the by9laws of a corporation in
its roster of corporate officers is an officer of
said corporation and not a mere employee.
?ersons *iable/

Art. #69. <ho are liable when committed by
other than natural person. 9 .f the offense is
committed by a corporation, trust, firm,
partnership, association or any other entity,
the penalty shall be imposed upon the guilty
officer or officers of such corporation, trust,
firm, partnership, association or entity.
0? "6 4+orporation +ode of the
?hilippines7
Sec& 3"& Liability of directors! trustees or
officers& 1 9irectors or trustees /ho /illfully
and 0no/in4ly vote for or assent to patently
unla/ful acts of the corporation or /ho are 4uilty of
4ross ne4li4ence or bad faith in directin4 the affairs
of the corporation or ac:uire any personal or
pecuniary interest in conflict /ith their duty as such
directors or trustees shall be liable jointly and
severally for all dama4es resultin4 therefrom
suffered by the corporation! its stoc0holders or
members and other persons&
>eneral ,ule/ $fficers of a corporation are not personally
liable for their official acts unless it is shown that they have
e&ceeded their authority.
8&ceptions/
a7 S<here the incorporators and directors
belong to a single family, the corporation and its
members can be considered as one in order to avoid
its being used as an instrument to commit injustice,S
or to further an end subversive of justice.
b7 .n the case of +laparols vs. +., involving
almost similar facts as in this case, it was also held
that the shield of corporate fiction should be pierced
when it is deliberately and maliciously designed to
evade financial obligations to employees.
Hnless they have e&ceeded their authority, corporate
officers are, as a general rule, not personally liable for
their official acts, because a corporation, by legal fiction,
has a personality separate and distinct from its officers,
stoc!holders and members. @owever, this fictional veil
may be pierced whenever the corporate personality is
used as a means of perpetuating a fraud or an illegal act,
evading an e&isting obligation, or confusing a legitimate
issue. .n cases of illegal dismissal, corporate directors
and officers are solidarily liable with the corporation,
where terminations of employment are done with malice
or in bad faith. 40ogo9Medellin Sugarcane ?lanters
Association v. (*,+, >.,. (o. 976" September #-,
19967
XV. SUSPENSION OF BUSINESS
OPERATIONS
BASIS
^ Article #6"/ 8mployment is deemed not terminated
when there is/
1. 0ona9fide suspension by the employer of the
operation of his business or underta!ing for a
period not e&ceeding si& 4"7 monthsM
#. =ulfillment by the employee of a military dutyM or
;. =ulfillment by the employee of a civic duty.
^ Sec .1#, ,ule, 0oo! :./
)he employer9employee relationship shall be deemed
suspended in case of suspension of operation of the
business or underta!ing of the employer for a period not
e&ceeding si& 4"7 months, unless the suspension is for
the purpose of defeating the rights of the employees
under the +ode, and in case of mandatory fulfillment by
the employee of a military or civic duty.
)he payment of wages of the employee as well as
the grant of other benefits and privileges while he is on a
military or civic duty shall be subject to special laws and
decrees and to the applicable individual or collective
bargaining agreement and voluntary employer practice or
policy.
EFFECT ON EMPLO(MENT STATUS
+ompensation of 8mployees during the Si&9month Suspension
^ 8mployees are not entitled to their wages and
benefits during the "9month period. )he reason is,
within the said period, the employer9employee
relationship is deemed suspended. )he employment
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
57 of 61
SUN TZU NOTES
relationship being suspended, both the
employer and the employees cease to be
bound, at least temporarily, by the basic
terms and conditions of their employment
contract 9 the employer regarding his
obligation to provide salary to his wor!ersM
and on the part of the wor!ers, to provide
their services to the former.
8ffect of Suspension of <or! 8&ceeding " Months
^ .n the #BB- case of Mayon @otel Q
,estaurant vs. Adana, K>. ,. (o. 1-7";,
May 1", #BB-L, the @igh +ourt declared that
Article #6" is clear 9 there is termination of
employment when an otherwise bona fide
suspension of wor! e&ceeds si& 4"7 months.
Moreover, even assuming arguendo that the
cessation of employment on April 1997 was
merely temporary when hotel operations
were suspended due to the termination of
the lease of the old premises, it became
dismissal by operation of law when
petitioners failed to reinstate respondents
after the lapse of si& 4"7 months, pursuant
to Article #6". And even assuming that the
closure was due to a reason beyond the
control of the employer, it still has to accord
its employees some relief in the form of
severance pay.
8ffect of 8mployment of the 8mployee in $ther
8stablishments during "9Month ?eriod
^ .n the #BB- case of F?* Mar!eting
?romotions vs. +A, K>. ,. (o. 1-19"", Fuly
6, #BB-L, it was established that private
respondent9employees sought employment
from other establishments even before the
e&piration of the si& 4"79month period
provided by law. )hey admitted that all
three of them applied for and were
employed by another establishment after
they received the notice from F?*.
+onse2uently, it was held that petitioner F?*
cannot be said to have terminated their
employment for it was they themselves who
severed their relations with F?*. )hus, they
are not entitled to separation pay, even on
the ground of compassionate justice.
+learly, the principle in the law which grants
separation pay applies only when the
employee is dismissed by the employer,
which is not the case in this instance. .n
see!ing and obtaining employment
elsewhere, private respondents effectively
terminated their employment with F?*.
ANALO3OUS SITUATION
^ )here is no law on temporary retrenchment
or lay9off, Article #6" applies only by
analogy.
^ Suspension of operation may involve only a
section or department of the company and
not necessarily the entire operations.
^ )he burden to prove bona9fide suspension
of operation is on the employer.
DISTIN3UISH &ro) STOPPA3E o& WOR: OR
SUSPENSION o& OPERATION
^ Art. 1#64c7
)he Secretary of *abor and 8mployment
may li!ewise order stoppage of wor! or
suspension of operations of any unit or
department of an establishment when there is
non9compliance with the law or implementing
rules and regulations poses grave and imminent
danger to the health and safety of wor!ers in
the wor!place.
<ithin twenty9four hours, a hearing shall be
conducted to determine whether an order for the
stoppage of wor! or suspension of operations shall be
lifted or not.
.n case the violation is attributable to the fault of the
employer, he shall pay the employees concerned their
salaries or wages during the period of such stoppage of
wor! or suspension of operation.
TEMPORAR( OR PERIODIC SHUTDOWN "$
TEMPORAR( CESSATION OF WOR:
^ Section 7, ,ule .:, 0oo! ...
)emporary or periodic shutdown and temporary
cessation of wor!.
4a7 .n cases of temporary or periodic shutdown and
temporary cessation of wor! of an
establishment, as when a yearly inventory or
when the repair or cleaning of machineries and
e2uipment is underta!en, the regular holidays
falling within the period shall be compensated in
accordance with this ,ule.
4b7 )he regular holiday during the cessation of
operation of an enterprise due to business
reverses as authori3ed by the Secretary of *abor
and 8mployment may not be paid by the
employer.
G5or Toics No. 1@-1:. "ee addendu!H
.-. >URISDICTION OF THE LABOR ARBITER
ORI3INAL "$ EXCLUSI4E >URISDICTION OF LA
^ Art. #17 Furisdiction of *abor Arbiters and the
+ommission. 5
4a7 8&cept as otherwise provided under this +ode,
the *abor Arbiters shall have original and
e&clusive jurisdiction to hear and decide, within
thirty 4;B7 calendar days after the submission of
the case by the parties for decision without
e&tension, even in the absence of stenographic
notes, the following cases involving all wor!ers,
whether agricultural or non9agricultural/
1. Hnfair labor practice casesM
#. )ermination disputesM
;. .f accompanied with a claim for
reinstatement, those cases that wor!ers
may file involving wages, rate of pay, hours
of wor! and other terms and conditions of
employmentM
. +laims for actual, moral, e&emplary and other
forms of damages arising from the
employer9employee relationsM
-. +ases arising from any violation of Article #"
of this +ode, including 2uestions involving
the legality of stri!es and loc!outsM and
". 8&cept claims for employees compensation,
social security, medicare and maternity
benefits, all other claims arising from
employer9employee relations, including
those of persons in domestic or household
service, involving an amount e&ceeding five
thousand pesos 4?-,BBB.BB7, whether or not
accompanied with a claim for reinstatement.
4b7 )he +ommission shall have e&clusive appellate
jurisdiction over all cases decided by *abor
Arbiters.
4c7 +ases arising from the interpretation or
implementation of collective bargaining
agreements and those arising from the
interpretation or enforcement of company
personnel policies shall be disposed of by the
*abor Arbiter by referring the same to the
grievance machinery and voluntary arbitration
as may be provided in said agreements. 4As
amended by ,A "71-7
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
58 of 61
SUN TZU NOTES
^ Appeal/ (*,+, then +A 4Special +ivil Action
under ,ule "-7, then S+ 4+ertiorari under
,ule -7
SCOPE OF >URISDICTION Cre&er to " .0B
"*o5eD
CONCURRENT >URISDICTION o& OTHER
A3ENCIES
^ Art. 1#6/ :isitorial and enforcement powers.
5
4a7 )he Secretary of *abor and 8mployment
or his duly authori3ed representatives,
including labor regulations officers,
shall have access to employerTs records
and premises at any time of the day or
night whenever wor! is being
underta!en therein, and the right to
copy therefrom, to 2uestion any
employee and to investigate any fact,
condition or matter which may be
necessary to determine violations or
which may aid in the enforcement of
this +ode and of any labor law, wage
order or rules and regulations issued
pursuant thereto.
4b7 )he provisions of Article #17 of this
+ode to the contrary notwithstanding
and in cases where the relationship of
employer9employee still e&ists, the
Secretary of *abor and 8mployment or
his duly authori3ed representatives
shall have the power to order and
administer, after due notice and
hearing, compliance with the labor
standards provisions of this +ode and
other labor legislation based on the
findings of labor regulation officers or
industrial safety engineers made in the
course of inspection, and to issue writs
of e&ecution to the appropriate
authority for the enforcement of their
order, e&cept in cases where the
employer contests the findings of the
labor regulation officer and raises
issues which cannot be resolved
without considering evidentiary matters
that are not verifiable in the normal
course of inspection.
4c7 )he Secretary of *abor and
8mployment may li!ewise order
stoppage of wor! or suspension of
operations of any unit or department of
an establishment when non9compliance
with the law or implementing rules and
regulations poses grave and imminent
danger to the health and safety of
wor!ers in the wor!place. <ithin
twenty9four hours, a hearing shall be
conducted to determine whether an
order for the stoppage of wor! or
suspension of operations shall be lifted
or not. .n case the violation is
attributable to the fault of the
employer, he shall pay the employees
concerned their salaries or wages
during the period of such stoppage of
wor! or suspension of operation.
4d7 .t shall be unlawful for any person or
entity to obstruct, impede, delay or
otherwise render ineffective the order
of the Secretary of *abor and
8mployment or his duly authori3ed
representatives issued pursuant to the
authority granted under this Article,
and no inferior court or entity shall
issue temporary or permanent
injunction or restraining order or
otherwise assume jurisdiction over any
case involving the enforcement orders issued in
accordance with this Article.
4e7 Any government employee found guilty of
violation of, or abuse of authority under this
Article shall, after appropriate administrative
investigation, be subject to summary dismissal
from the service.
4f7 )he Secretary of *abor and 8mployment may by
appropriate regulations re2uire employers to
!eep and maintain such employment records as
may be necessary in aid of his visitorial and
enforcement powers under this +ode.
^ Art. 1#9/ ,ecovery of wages, simple money claims
and other benefits. 5
Hpon complaint of any interested party, the
,egional 1irector of the 1epartment of *abor and
8mployment or any of the duly authori3ed hearing
officers of the 1epartment is empowered, through
summary proceeding 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 an employee or
person employed in domestic or household service or
househelper under this +ode, arising from employer9
employee relations/ ?rovided, )hat such complaint
does not include a claim for reinstatement/ ?rovided,
further, )hat the aggregate money claims of each
employee or househelper do not e&ceed five
thousand pesos 4?-,BBB7. )he ,egional 1irector or
hearing officer shall decide or resolve the complaint
within thirty 4;B7 calendar days from the date of the
filing of the same. Any sum thus recovered on behalf
of any employee or househelper pursuant to this
Article shall be held in a special deposit account, and
shall be paid, on order of the Secretary of *abor and
8mployment or the ,egional 1irector directly to the
employee or househelper concerned. Any such sum
not paid to the employee or househelper, because he
cannot be located after diligent and reasonable effort
to locate him within a period of three 4;7 years, shall
be held as a special fund of the 1epartment of *abor
and 8mployment to be used e&clusively for the
amelioration and benefit of wor!ers.
ELEMENTS o& ART. .2-?
1. )he claim is presented by an employee or person
employed in domesticE household service or house
helperM
#. +laim arises from employer9employee relationsM
;. +laimant does not as! for reinstatement 4if there is
reinstatement, *A7Mand
. )he aggregate claim of each employee or house
helper does not e&ceed ?-,BBB. 4if it e&ceeds, *A7.
^ Art. #"1.Furisdiction of voluntary arbitrators and
panel of voluntary arbitrators. 5
)he voluntary arbitrator or panel of voluntary
arbitrators shall have original and e&clusive
jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or
implementation of the collective bargaining
agreement and those arising from the interpretation
or enforcement of company personnel policies
referred to in the immediately preceding Article.
Accordingly, violations of a collective bargaining
agreement, e&cept those which are gross in
character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under
the collective bargaining agreement.
=or purposes of this Article, gross violations of a
collective bargaining agreement shall mean flagrant
andEor malicious refusal to comply with the economic
provisions of such agreement.
)he +ommission, its ,egional $ffices and the
,egional 1irectors of the 1epartment of *abor and
8mployment shall not entertain disputes, grievances
or matters under the e&clusive and original
jurisdiction of the voluntary arbitrator or panel of
voluntary arbitrators and shall immediately dispose
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
59 of 61
SUN TZU NOTES
and refer the same to the grievance
machinery or voluntary arbitration provided
in the collective bargaining agreement. 4As
added by ,A "71-7
^ Art. #"#.Furisdiction over other labor
disputes. 5
)he voluntary arbitrator or panel of
voluntary arbitrators, upon agreement of
the parties, shall also hear and decide all
other labor disputes including unfair labor
practices and bargaining deadloc!s. 4As
added by ,A "71-7
Appeal/ +A 4?etition for ,eview under
,ule ;7, then S+ 4+ertiorari under ,ule -7
^ Art. #";.
4g7 <hen, in his opinion, there e&ists a
labor dispute causing or li!ely to cause a
stri!e or loc!out in an industry
indispensable to the national interest, the
Secretary of *abor and 8mployment may
assume jurisdiction over the dispute and
decide it or certify the same to the
+ommission for compulsory arbitration.
Such assumption or certification shall have
the effect of automatically enjoining the
intended or impending stri!e or loc!out as
specified in the assumption or certification
order. .f one has already ta!en place at the
time of assumption or certification, all
stri!ing or loc!ed out employees shall
immediately return to wor! and the
employer shall immediately resume
operations and readmit all wor!ers under
the same terms and conditions prevailing
before the stri!e or loc!out. )he Secretary
of *abor and 8mployment or the
+ommission may see! the assistance of law
enforcement agencies to ensure compliance
with this provision as well as with such
orders as he may issue to enforce the same.
.n line with the national concern for and the
highest respect accorded to the right of patients
to life and health, stri!es and loc!outs in
hospitals, clinics and similar medical institutions
shall, to every e&tent possible, be avoided, and
all serious efforts, not only by labor and
management but government as well, be
e&hausted to substantially minimi3e, if not
prevent, their adverse effects on such life and
health, through the e&ercise, however
legitimate, by labor of its right to stri!e and by
management to loc!out. .n labor disputes
adversely affecting the continued operation of
such hospitals, clinics or medical institutions, it
shall be the duty of the stri!ing union or loc!ing9
out employer to provide and maintain an
effective s!eletal wor!force of medical and other
health personnel, whose movement and services
shall be unhampered and unrestricted, as are
necessary to insure the proper and ade2uate
protection of the life and health of its patients,
most especially emergency cases, for the
duration of the stri!e or loc!out. .n such cases,
therefore, the Secretary of *abor and
8mployment may immediately assume, within
twenty four 4#7 hours from !nowledge of the
occurrence of such a stri!e or loc!out,
jurisdiction over the same or certify it to the
+ommission for compulsory arbitration. =or this
purpose, the contending parties are strictly
enjoined to comply with such orders,
prohibitions andEor injunctions as are issued by
the Secretary of *abor and 8mployment or the
+ommission, under pain of immediate
disciplinary action, including dismissal or loss of
employment status or payment by the loc!ing9
out employer of bac!wages, damages and other
affirmative relief, even criminal prosecution against either
or both of them.
)he foregoing notwithstanding, the ?resident of the
?hilippines shall not be precluded from determining the
industries that, in his opinion, are indispensable to the
national interest, and from intervening at any time and
assuming jurisdiction over any labor dispute in such
industries in order to settle or terminate the same.
MI3RANT WOR:ERS AND O4ERSEAS FILIPINO ACT CRA
A,42D
Sec. 1B. Money +laims. 5 (otwithstanding any
provision of law to the contrary, the *abor Arbiters of the
(ational *abor ,elations +ommission 4(*,+7 shall have
the original and e&clusive jurisdiction to hear and decide,
within ninety 49B7 calendar days after the filing of the
complaint, the claims arising out of an employer9
employee relationship or by virtue of any law or contract
involving =ilipino wor!ers for overseas deployment
including claims for actual, moral, e&emplary and other
forms of damages.
CI4IL DISPUTE 4S LABOR DISPUTE 4S INTRA0
CORPORATE DISPUTE
^ +.:.* 1.S?H)8 4,8>H*A, +$H,)S7
.t is settled jurisprudence that a cause of action has
three elements, to wit/
1. a right in favor of the plaintiff by whatever
means and under whatever law it arises or is
createdM
#. an obligation on the part of the named
defendant to respect or not to violate such rightM
and
;. an act or omission on the part of such defendant
violative of the right of the plaintiff or
constituting a breach of the obligation of the
defendant to the plaintiff.
LABOR DISPUTE CLAD
Art. #1# /
4l7 S*abor disputeS includes any controversy or
matter concerning terms or conditions of
employment or the association or representation of
persons in negotiating, fi&ing, maintaining, changing
or arranging the terms and conditions of
employment, regardless of whether the disputants
stand in the pro&imate relation of employer and
employee.
INTRA0CORPORATE DISPUTE CRTCD
.ntra9+orporate 1ispute 9 one which arises between
a stoc!holder or corporate officers and a corporation.
+orporate $fficer 9 are the president, vice9president,
secretary, treasurer.
o *abor Arbiters have no jurisdiction over
termination of corporate officers and
stoc!holders which, under the law, is considered
intra9corporate dispute.
o .t must be emphasi3ed that a corporate officerCs
dismissal is always a corporate act andEor intra9
corporate controversy and that nature is not
altered by the reason or wisdom which the
0oard of 1irectors may have in ta!ing such
action.
o )he ,egional )rial +ourts 4not S8+7 now have
jurisdiction under ,. A. 6799 4Securities
,egulation Act of #BBB7. Furisdiction of ,)+
includes adjudication of monetary claims of the
corporate officer who was dismissed, 4such as
unpaid salaries, leaves, 1;th month pay,
bonuses, etc.7, damages and attorneyTs fees.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
60 of 61
SUN TZU NOTES
4*o3on vs. (*,+, >. ,. (o. 1B7""B,
Fan. B#, 199-, #B S+,A 17
C"se L"%?
Article #"1 of the *abor +ode accordingly
provides for e&clusive original jurisdiction of
such voluntary arbitrator or panel of arbitrators
over 417 the interpretation or implementation of
the +0A and 4#7 the interpretation or
enforcement of company personnel policies.
Article #"# authori3es them, but only upon
agreement of the parties, to e&ercise jurisdiction
over other labor disputes.
$n the other hand, a labor arbiter under
Article #17 of the *abor +ode has jurisdiction
over the following enumerated cases/
. . . 4a7 8&cept as otherwise provided under
this +ode the *abor Arbiters shall have original
and e&clusive jurisdiction to hear and decide,
within thirty 4;B7 calendar days after the
submission of the case by the parties for
decision without e&tension, even in the absence
of stenographic notes, the following cases
involving all wor!ers, whether agricultural or
non9agricultural/
1. Hnfair labor practice casesM
#. )ermination disputesM
;. .f accompanied with a claim for
reinstatement, those cases that
wor!ers may file involving wages, rates
of pay, hours of wor! and other terms
and conditions of employmentM
. +laims for actual, moral, e&emplary and
other forms of damages arising from
the employer9employee relationsM
-. +ases arising from any violation of
Article #" of this +ode, including
2uestions involving the legality of
stri!es and loc!outsM
". 8&cept claims for 8mployees
+ompensation, Social Security,
Medicare and maternity benefits, all
other claims, arising from employer9
employee relations, including those of
persons in domestic or household
service, involving an amount e&ceeding
five thousand pesos 4?-,BBB.BB7
regardless of whether accompanied
with a claim for reinstatement.
_A fortiori, the decision or award of the
voluntary arbitrator or panel of arbitrators
should li!ewise be appealable to the +ourt of
Appeals, in line with the procedure outlined in
,evised Administrative +ircular (o. 199-, just
li!e those of the 2uasi9judicial agencies, boards
and commissions enumerated therein.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for
every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle SUN TZU
61 of 61