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LABOR STANDARDS

16. Wage deductions
RCPI v SEC (1989)
FACTS: On May 4, 1981, RCPI, a domestic corporation engaged in the
telecommunications business, filed with the National Wages Council (NWC) an
application for exemption from the coverage of Wage Order No. 1.
The application was opposed by United RCPI Communications Labor
Association (URCPICLA-FUR), a labor organization affiliated with the Federation
of Unions of Rizal (FUR).
The NWC disapproved the application and ordered RCPI to pay its covered
employees the mandatory living allowance of P2.00 daily, effective March 22,
1981.
As early as March 1985, before the case was elevated to the SC, FUR filed a
motion for the issuance of a writ of execution, asserting its claim to 15% of the
total backpay due to all its members as "union service fee" for having
successfully prosecuted the latter's claim for payment of wages and for
reimbursement of expenses incurred by FUR and prayed for the segregation and
remittance of said amount to FUR thru its National President.
On October 1985, without the knowledge and consent of FUR, RCPI entered into
a compromise agreement with Buklod ng Manggagawasa RCPI-NFL (BMRCPINFL) as the new bargaining agent of RCPI employees. Thereupon, the parties
filed a joint motion praying for the dismissal of the decision of the NWC for it had
already been novated by the Compromise Agreement re-defining the rights and
obligations of the parties.
FUR countered alleging that one of the signatories thereof - BMRCPI-NFL is not
a party in interest in the case, but that it was FUR which represented RCPI
employees all the way from the level of the National Wages Council up the
Supreme Court.
FUR, therefore, claimed that the Compromise Agreement is irregular and invalid,
apart from the fact that there was nothing to compromise in the face of a final and
executory decision.
An Order was issued awarding to FUR 15% of the total backpay of RCPI
employees as their union service fees, and directing RCPI to deposit said

LABOR STANDARDS
amount with the cashier of the Regional Office for proper disposition to
said awardees.
Despite said order, RCPI paid in full the covered employees in November 1985,
without deducting the union service fee of 15%.
NCR officer-in-charge found RCPI and its employees jointly and severally liable
for the payment of the 15% union service fee amounting to P427,845.60 to FUR
and consequently ordered the garnishment of RCPI’s bank account to enforce
said claim.
It was his position that although the decision of the NWC did not categorically
require payment of the 15% service fee directly to FUR, it had acted as the
counsel of record of RCPI’s employees, hence said payment could be
authorized. The order further noted that the transaction entered into by RCPI in
favor of BMRCPI-NFL in the guise of a compromise agreement, was made
without the consent of FUR in clear defraudation of the latter's right to the 15%
union service fee justly due it.
Secretary of Labor and Employment modified the order appealed from by holding
RCPI solely liable to FUR for 10% of the awarded amounts as attorney's fees.
ISSUE: WON RCPI is solely liable for attorney’s fee or "union service fee” to
respondent URCPICLA-FUR. YES
Petitioner’s (RCPI) 1st contention: They have been imposed an additional
obligation in the form of attorney's fees not contemplated in the decision of the
National Wages Council.
RULING: While it is true that the original decision of NWC did not expressly
provide for payment of attorney's fees, that particular is deemed to have been
supplied by the compromise agreement subsequently executed between the
parties.
The agreement shows an unqualified admission by RCPI:
"from the aforesaid total amount due every employee, 10% thereof shall be
considered as attorney's fee, although, as hereinafter discussed, it sought to
withhold it from respondent union. Considering, however, that respondent union
was categorically found by the Labor Secretary to have been responsible for the
successful prosecution of the case to its ultimate conclusion in behalf of its

LABOR STANDARDS
member, employees of herein petitioner, its right to fees for services rendered, or
what it termed as "union service fee,
Pettitioner’s 2nd contention: RCPI failed to deduct the 15% attorney's fee from
the total amount due its employees and to deposit the same with the Regional
Labor Office allegedly because of the absence of individual written
authorizations.
RULING: Petitioner cannot invoke the lack of an individual written authorization
from the employees as a shield for its fraudulent refusal to pay the service fee of
FUR. Prior to the payment made to its employees, RCPI was ordered by the
Regional Director to deduct the 15% attorney's fee from the total amount due its
employees and to deposit the same with the Regional Labor Office. The lack of
individual written authorizations was remedied by the execution of the
compromise agreement whereby the employees, expressly approved the 10%
deduction and held RCPI free from any claim or complaint arising from the
deduction thereof. When RCPI was thereafter again ordered to pay the 10% fees
to FUR, it no longer had any legal basis for refusing to pay the latter.
We agree that Article 222 of the Labor Code requiring an individual written
authorization as a prerequisite to wage deductions seeks to protect the employee
against unwarranted practices that would diminish his compensation without his
knowledge and consent. However, the deductions required of the RCPI and the
employees do not run counter to the express mandate of the law since the same
are not unwarranted or without their knowledge and consent. Also, the
deductions for the union service fee are authorized by law and do not require
individual check-off authorizations.
APODACA v NLRC
FACTS: Apodaca was employed by respondent corporation Intrans Phil. Inc. He
subscribed to 1,500 shares of respondent corporation at P100.00 per share or a
total of P150,000.00. He made an initial payment of P37,500.00.
On September 1, 1975, petitioner was appointed President and General
Manager of the respondent corporation. However, on January 2, 1986, he
resigned.
On December 19, 1986, petitioner instituted with the NLRC a complaint against
the corporation for the payment of his unpaid wages, his cost of living allowance,

LABOR STANDARDS
the balance of his gasoline and representation expenses and his bonus
compensation for 1986.
Private respondents admitted that there is due to petitioner the amount of
P17,060.07 but this was applied to the unpaid balance of his subscription in the
amount of P95,439.93.
Petitioner questioned the set-off alleging that there was no call or notice for the
payment of the unpaid subscription and that, accordingly, the alleged obligation is
not enforceable.
Labor Arbiter sustained the claim of petitioner for P17,060.07 on the ground that
the employer has no right to withhold payment of wages already earned under
Article 103 of the Labor Code.
Upon the appeal, the decision of the labor arbiter was reversed.
NLRC held that a stockholder who fails to pay his unpaid subscription on call
becomes a debtor of the corporation and that the set-off of said obligation against
the wages and others due to petitioner is not contrary to law, morals and public
policy.
ISSUE: WON the non-payment of stock subscription can be offset against a
money claim of an employee against the employer. No.
RULING NLRC has no jurisdiction in the matter of unpaid subscriptions. This is
within the exclusive jurisdiction of SEC.
Assuming arguendo that NLRC has jurisdiction, the unpaid subscriptions are not
due and payable until a call is made by the corporation for payment.
Respondent Corporation did not call for the payment of the unpaid subscriptions.
It does not even appear that a notice of such call has been sent to petitioner by
the respondent corporation.
No doubt such set-off was without lawful basis, if not premature. As there was no
notice or call for the payment of unpaid subscriptions, the same is not yet due
and payable.

LABOR STANDARDS
***Lastly, assuming further that there was a call for payment of the unpaid
subscription, the NLRC cannot validly set it off against the wages and other
benefits due petitioner.
Article 113 of the Labor Code allows such a deduction from the wages of the
employees by the employer, only in three instances, to wit:
ART. 113. Wage Deduction. — No employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages of his employees, except:
(a) In cases where the worker 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 insurance;
(b) For union dues, in cases where the right of the worker or his union to checkoff
has been recognized by the employer or authorized in writing by the individual
worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor.
MABEZA v NLRC (1997)
FACTS: Norma Mabeza was an employee hired by Hotel Supreme in Baguio
City. In 1991, an inspection was made by the Department of Labor and
Employment (DOLE) at Hotel Supreme and the DOLE inspectors discovered
several violations by the hotel management. Immediately, the owner of the hotel,
Peter Ng, directed his employees to execute an affidavit which would purport that
they have no complaints whatsoever against Hotel Supreme particularly the
latter's compliance with minimum wage and other labor standard provisions of
law. Mabeza signed the affidavit but she refused to certify it with the prosecutor’s
office.
Petitioner’s contention: That same day, as she refused to go to the City
Prosecutor’s Office, she was ordered by the hotel management to turn over the
keys to her living quarters and to remove her belongings to the hotel’s premises.
She then filed a leave of absence which was denied by her employer. She
attempted to return to work but the hotel’s cashier told her that she should not
report to work and instead continue with her unofficial leave of absence.
Three days after her attempt to return to work, she filed a complaint against the
management for illegal dismissal before the Arbitration Branch of the NLRC in
Baguio City. In addition to that, she alleged underpayment of wages, non-

which was supported by his filing of criminal case for the alleged qualified theft of the petitioner (Peter Ng filed a criminal complaint against Mabeza as he alleged that she had stolen a blanket and some other stuff from the hotel) The Labor Arbiter ruled in favor of the hotel management on the ground of loss of confidence. the provision of deductible facilities must be voluntary accepted in writing by the employee. Private respondent failed to present any company policy to show that the meal and lodging are part of the salary. the food and lodging. These requirements were not met in the instant case. Hence. their ready . A benefit or privilege granted to an employee for the convenience of the employer is not a facility. Considering. proof must be shown that such facilities are customarily furnished by the trade. He also failed to provide proof of the employee’s written authorization and he failed to show how he arrived at the valuations. She appealed to the NLRC which affirmed the Labor Arbiter’s decision. More significantly. lodging. this petition. in their Answer. service incentive leave pay. facilities must be charged at fair and reasonable value. 13th month pay. night differential and other benefits. therefore. Second. The criterion in making a distinction between the two not so much lies in the kind but the purpose. Without satisfying these requirements. Granting that meals and lodging were provided and indeed constituted facilities.LABOR STANDARDS payment of holiday pay. such facilities could not be deducted without the employer complying first with certain legal requirements. He even maintained that her allegation of underpayment and non-payment of benefits had no legal basis. electric consumption and water she received during the period of computations. He raises a new ground of loss of confidence. First. that hotel workers are required to work on different shifts and are expected to be available at various odd hours. Finally. MAIN ISSUE: Whether or not Mabeza’s certain facilities may be deducted from her wage. the employer simply cannot deduct the value from the employee’s wages. Private respondent’s contention: Peter Ng. argued that her unauthorized leave of absence from work is the ground for her dismissal. or electricity and water consumed by the petitioner were not facilities but supplements. NO The labor arbiter’s contention that the reason for the monetary benefits received by the petitioner between 1981 to 1987 were less than the minimum wage was because petitioner did not factor in the meals.

Her asking for leave is a clear indication that she has no intention to abandon her work with the hotel. the suspicious filing by Peter Ng of a criminal case against Mabeza long after she initiated her labor complaint against him hardly warrants serious consideration of loss of confidence as a ground of Mabeza’s dismissal. 18. But this is ideally only applied to workers whose positions require a certain level or degree of trust particularly those who are members of the managerial staff. against his employee’s right to institute concerted action for better terms and conditions of employment. Whether or not there is loss of confidence as a valid ground for dismissal. Mabeza returned several times to inquire about the status of her work or her employment status. in the form of restraint. would normally apply. Evidently. an ordinary chambermaid who has to sign out for linen and other hotel property from the property custodian each day and who has to account for each and every towel or bedsheet utilized by the hotel’s guests at the end of her shift would not fall under any of these two classes of employees for which loss of confidence. Liability for wages and benefits in case of corporation YU v NLRC . Further. the act of compelling employees to sign an instrument indicating that the employer observed labor standard provisions of the law when he might not have. Whether or not there is unfair labor practice. It is true that loss of confidence is a valid ground to dismiss an employee. NO. She even asked for a leave but was not granted. YES The pivotal question in any case where unfair labor practice on the part of the employer is alleged is whether or not the employer has exerted pressure. c. Abandonment is not present. Even the employer knows that his purported reason of dismissing her due to abandonment will not fly so he amended his reply to indicate that it is actually “loss of confidence” that led to Mabeza’s dismissal. b. NO. together with the act of terminating or coercing those who refuse to cooperate with the employees’ scheme constitutes unfair labor practice. Whether or not there is abandonment. Without doubt. if ably supported by evidence. such as the private respondent’s hotel. interference or coercion.LABOR STANDARDS availability is a necessary matter in the operations of a small hotel. SECONDARY ISSUES: a.

Ricardo and Guillerma Cruz. situated in Bulacan Province. the general partners sold and transferred their interests in the partnership to private respondent Willy Co and to one Emmanuel Zapanta.LABOR STANDARDS FACTS: Petitioner Benjamin Yu was formerly the Assistant General Manager of the marble quarrying and export business operated by Jade Mountain Products Company Limited" ("Jade Mountain"). 1988: without the knowledge of Yu. -The actual operations of the business enterprise continued as before. Benjamin Yu was hired by virtue of a Partnership Resolution dated 14 March 1985. including petitioner's unpaid salaries. since he had accepted the promise of the partners that the balance would be paid when the firm shall have secured additional operating funds from abroad. Chen Ho-Fu and Yu Chang. Yu reported to the Mandaluyong office for work and there met private respondent Willy Co for the first time. Its main office is in Makati. though they moved the firm's main office from Makati to Mandaluyong. Metropolitan Manila. The partnership was originally organized on 28 June 1984 with Lea Bendal and Rhodora Bendal as general partners and Chin Shian Jeng. .00.000. all. all citizens of the Republic of China (Taiwan). He was informed by Willy Co that the latter had bought the business from the original partners and that it was for him to decide whether or not he was responsible for the obligations of the old partnership. -had overall supervision of the workers at the marble quarry in Bulacan and took charge of the preparation of papers relating to the exportation of the firm's products. -The partnership now constituted solely by Willy Co and Emmanuel Zapanta continued to use the old firm name of Jade Mountain. 16 November 1987. under a Memorandum Agreement dated 26 June 1984 with the Cruz spouses. save Yu as it turned out. The partnership business consisted of exploiting a marble deposit found on land owned by the Sps. as Assistant General Manager with a monthly salary of P4. as limited partners. All the employees of the partnership continued working in the business. Metropolitan Manila. -managed the operations and finances of the business. Yu: received only half of his stipulated monthly salary.

Willy Co and the other private respondents. On 21 December 1988. His unpaid salaries remained unpaid. moral and exemplary damages and attorney's fees. and that there was no law requiring the new partnership to absorb the employees of the old partnership. Willy Co and Mr. The partnership and Willy Co denied petitioner's charges. contending in the main that Benjamin Yu was never hired as an employee by the present or new partnership. A new partnership consisting of Mr. whether petitioner Yu could nonetheless assert his rights under his employment contract as against the new partnership. Yu had not been illegally dismissed by the new partnership which had simply declined to retain him in his former managerial position or any other position. Mr. NLRC: reversed LA's decision. YES. Emmanuel Zapanta had bought the Jade Mountain business. the legal effect of the changes in the membership of the partnership was the dissolution of the old partnership which had hired petitioner in 1984 and the emergence of a new firm composed of Willy Co and Emmanuel Zapanta in 1987. .LABOR STANDARDS Yu was in fact not allowed to work anymore in the Jade Mountain business enterprise. backwages and attorney's fees. that the new partnership had not retained petitioner Yu in his original position as Assistant General Manager. Held that Yu's claim for unpaid wages should be asserted against the original members of the preceding partnership ISSUES: (1) whether the partnership which had hired petitioner Yu as Assistant General Manager had been extinguished and replaced by a new partnerships composed of Willy Co and Emmanuel Zapanta. Labor Arbiter: Yu had been illegally dismissed and awarded him his claim for unpaid salaries. against Jade Mountain. Yu filed a complaint for illegal dismissal and recovery of unpaid salaries accruing from November 1984 to October 1988. (2) if indeed a new partnership had come into existence. RULING 1.

) but also the new partnership are liable for the debts of the preceding partnership pursuant to Art 1840. The acquisition of 82% of the partnership interest by new partners. all of the partners had sold their partnership interests (amounting to 82% of the total partnership interest) to Mr. 1828. YES. et al. (2) in contravention of the agreement between the partners. Dissolution is caused: (1) without violation of the agreement between the partners. when no definite term or particular undertaking is specified. NCC. coupled with the retirement or withdrawal of the partners who had originally owned such 82% interest. automatically result in the termination of the legal personality of the old partnership. The dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of the business. The record does not show what happened to the remaining 18% of the original partnership interest. by the express will of any partner at any time. without the old partnership undergoing the procedures relating to dissolution and winding up of its business affairs. where the circumstances do not permit a dissolution under any other provision of this article. The legal personality of the expiring partnership persists for the limited purpose of winding up and closing of the affairs of the partnership. 2. it is important to underscore the fact that the business of the old partnership was simply continued by the new partners.LABOR STANDARDS Art. was enough to constitute a new partnership. Art. not only the retiring partners (Rhodora Bendal. The occurrence of events which precipitate the legal consequence of dissolution of a partnership do not. Article 1829 of the Civil Code states that: [o]n dissolution the partnership is not terminated. (b) by the express will of any partner. however. but continues until the winding up of partnership affairs is completed. who must act in good faith. In the case at bar. In the case at bar. 1830. Willy Co and Emmanuel Zapanta. .

000.00.00 monthly pay multiplied by three (3) years of service or a total of P12. (c) indemnity for moral damages in the amount of P20.LABOR STANDARDS Under Article 1840 NCC. as found by the Labor Arbiter. . against the new Jade Mountain. The non-retention of Benjamin Yu as Assistant General Manager did not therefore constitute unlawful termination.00. a fraction of at least six (6) months being considered as a whole year. bad faith treatment.000. -Indeed. The treatment (including the refusal to honor his claim for unpaid wages) accorded to Yu amounted to arbitrary. It is at the same time also evident to the Court that the new partnership was entitled to appoint and hire a new general or assistant general manager to run the affairs of the business enterprise take over. Yu's old position as Assistant General Manager thus became superfluous or redundant. the new partnership similarly benefitted from the labors of Benjamin Yu. It follows that petitioner Yu is entitled to separation pay at the rate of one month's pay for each year of service that he had rendered to the old partnership. The old partnership certainly benefitted from the services of Benjamin Yu who. the new Jade Mountain did not notify him of the change in ownership of the business. SC: Jade Mountain Products Company Limited to pay to petitioner Benjamin Yu the following amounts: (a) for unpaid wages which. (b) separation pay computed at the rate of P4.00. creditors of the old Jade Mountain are also creditors of the new Jade Mountain which continued the business of the old one without liquidation of the partnership affairs.000. shall be computed at the rate of P2. like Benjamin Yu is entitled to enforce his claim for unpaid salaries. Willy Co of control of operations. as well as other claims relating to his employment with the previous partnership. Nonetheless. His work constituted value-added to the business itself and therefore.000. the relocation of the main office of Jade Mountain from Makati to Mandaluyong and the assumption by Mr. a creditor of the old Jade Mountain.00 per month multiplied by thirty-six (36) months (November 1984 to December 1987) in the total amount of P72.000. processing and exporting enterprise. as noted. previously ran the whole marble quarrying.

However. Thus.LABOR STANDARDS (d) six percent (6%) per annum legal interest computed on items (a) and (b) above. Inc. ISSUES . was held liable for private respondents' unpaid claim. Inc. are not one and the same entity as the former was in fact dissolved on December 27.. should be credited in computing their separation pay considering that Avon Dale Shirt factory was not dissolved and they were not in turn hired as new employees by Avon Dale Garments. Upon appeal. ROBLEDO v NLRC AVONDALE v NLRC FACTS Private respondents were employees of petitioner Avon Dale Garments. 1978. commencing on 26 December 1989 and until fully paid.. petitioner Avon Dale Garments. and (e) ten percent (10%) attorney's fees on the total amount due from private respondent Jade Mountain. Following a dispute brought about by the rotation of workers. and its predecessor-in-interest. there was no showing that its terminated employees. as successor-in-interest. Labor arbiter dismissed employees' complaint and held that Avon Dale Shirt Factory and Avon Dale Garments. a compromise agreement was entered into between petitioner and private respondents wherein the latter were terminated from service and given their corresponding separation pay. when it filed its Articles of Dissolution with the Securities and Exchange Commission. Avon Dale Shirt Factory. Avon Dale Shirt Factory. Inc. were ever paid. According to private respondents. private respondents filed a complaint with the labor arbiter claiming a deficiency in their separation pay. their previous employment with petitioner's predecessor-in-interest. NLRC reversed the decision of the labor arbiter after finding that upon dissolution of Avon Dale Shirt Factory. as creditors insofar as their separation pay were concerned. Inc. upon refusal of the petitioner to include in the computation of private respondents' separation pay the period during which the latter were employed by Avon Dale Shirt Factory. Inc.

Respondents are members of the Cannery Multi-Purpose Cooperative (CAMPCO). RULING 1. On the contrary. without more. WON Avon Dale Garments should be held liable for private respondents’ separation pay from Avon Dale Shirt Factory. Petitioner should likewise include private respondents' employment with Avon Dale Shirt Factory in computing private respondents' separation pay as petitioner failed to substantiate its claim that it is a distinct entity. DOLE PHILS v ESTEVA (2006) FACTS: Petitioner is a corporation duly recognized and existing in accordance with Philippine laws. otherwise known as the Cooperative Code of the Philippines. whether effected by a special act or under a general law. WON Avon Dale Garments is a separate and distinct entity from Avon Dale Shirt. 2. and duly –registered with the Cooperative Development Authority (CDA). the prevailing circumstances in this case indicated that petitioner company is not distinct from its predecessor Avon Dale Shirt Factory. In fact. 2. The mere filing of the Articles of Dissolution with the Securities and Exchange Commission. . Thus. and even continued to hire the same employees (herein private respondents). rights. even a change in the corporate name does not make a new corporation.LABOR STANDARDS 1. the same business venture. CAMPCO was organized in accordance with R.. absent any showing that there was indeed an actual closure and cessation of the operations of the latter. it has no effect on the identity of the corporation. is not enough to support the conclusion that actual dissolution of an entity in fact took place.A. is a separate and distinct entity from Avon Dale Shirt Factory. No. Inc. 6938. or on its property. at same address 6. or liabilities. engaged principally in the production and processing of pineapple for the export market. conformably with established jurisprudence. Petitioner failed to establish that Avon Dale Garments. the two entities cannot be deemed as separate and distinct where there is a showing that one is merely the continuation of the other. but in fact merely continued the operations of the latter under the same owners.

1993). Book III of the Omnibus Rules Implementing the Labor Code. others were put on “stay home status” on varying dates in the years 1994. Rule VIII. Pursuant to the contract. CAMPCO members rendered services to petitioner. and attorney’s fees. They. While some of the respondents were still working for petitioner. As regular employees of petitioner. The Service Contract referred to petitioner as “the Company. filed a case before the NLRC for illegal dismissal.) Before the NLRC. and 3) CAMPCO.” The said contract was good for six months for the amount of P220K. respondents contended that they have been working more than one year to petitioner. regularization. . and 1996 and were no longer furnished with work thereafter. due to investigations and reliable information. damages and attorney’s fees. was merely a conduit of petitioner. wage differentials. Respondents argued that they should be considered regular employees of petitioner given that: 1) they were performing jobs that were usually necessary and desirable in the usual business of petitioner(can processing attendant. moral damages. no substantial capital. The Law cited was Section 9. a labor-only contractor. –(pertaining to Labor-only contracting… 1.” while CAMPCO was “the Contractor. 2) petitioner exercised control over respondents. respondents asserted that they were entitled to security of tenure and those placed on “stay home status” for more than six months had been constructively and illegally dismissed. the one who alleges as contractor is deemed an agent of the principal while the latter is considered the indirect employer for purposes of enforcement of the labor rights.LABOR STANDARDS Petitioner and CAMPCO entered into a Service Contract (August 17. work is directly related to the principal business of the principal. then. not only as to the results. fruit cocktail processing attendant). However. but also as to the manner by which they performed their assigned tasks. The parties apparently extended or renewed the same for the succeeding years without executing another written contract. 2. feeder of canned pineapple at pineapple processing. Respondents further claimed entitlement to wage differential. the Regional Director of DOLE exercised his visitorial and enforcement power and found out that CAMPCO is engaged in labor-only contracting together with two other “cooperatives”. 1995. in such case. nata de coco processing attendant.

amending the rules implementing Books III and VI of the Labor Code. except as to the result thereof. substitute services for absent regular employees. provided that the period of service shall be coextensive with the period of absence and the same is made clear to the substitute employee at the time of engagement. the principal may engage the services of a contractor or subcontractor for the performance of any of the following. as amended. 10. (b) Services temporarily needed for the introduction or promotion of new products. as owners-members of CAMPCO. that CAMPCO was a duly-organized and registered cooperative which had already grown into a multi-million enterprise. explicitly recognized the arrangement between petitioner and CAMPCO as permissible contracting and subcontracting. that CAMPCO was engaged in legitimate job-contracting with its own owners-members rendering the contract work. Petitioner further averred that Department Order No. provided that the normal production capacity or regular workforce of the principal cannot reasonably cope with such demands. were estopped from denying or refuting the same. and according to its own manner and method free from the control and direction of the petitioner in all matters connected with the performance of the work. respondents.LABOR STANDARDS Petitioner contended that respondents were owners-members of CAMPCO. – Subject to the conditions set forth in Section 3(d) and (e) and Section 5 hereof. (g) Unless a reliever system is in place among the regular workforce. only for the duration of the introductory or promotional period. The phrase "absent regular employees" includes those who are serving suspensions or other disciplinary measures not amounting to termination of employment meted out by the principal. to wit – Section 6. Permissible contracting and subcontracting. (a) Works or services temporarily or occasionally needed to meet abnormal increase in the demand of products or services. promulgated by the DOLE on 30 May 1997. that under the express terms and conditions of the Service Contract executed between petitioner (the principal) and CAMPCO (the contractor). but excludes those on strike where all the formal requisites for the . and since CAMPCO held itself out to petitioner as a legitimate job contractor. under its own responsibility. the latter shall undertake the contract work on its own account.

respondents should be considered as regular employees of petitioner. plus a percentage thereof as administrative charge. Petitioner must accord respondents the status of regular employees. CAMPCO chose who among its members should be sent to work for petitioner. petitioner paid CAMPCO the wages of the members. LA ruled in favor of petitioner – CAMPCO is not engaged in labor-only contracting and respondents are not regular employees of petitioner. without loss of seniority rights and other benefits. with CAMPCO acting only as the agent or intermediary of petitioner. CAMPCO paid the wages of the members who rendered service to petitioner). ISSUE: WON Petitioner is the employer of respondents and that CAMPCO be considered merely as agent of the company. series of 1997. Due to the nature of their work and length of their service. CAMPCO was a labor-only contractor and. many other factors are present which would indicate a labor-only contracting arrangement between petitioner and CAMPCO. and pay these respondents’ backwages from the date of filing of the Complaint with the NLRC up to actual reinstatement. The ff.LABOR STANDARDS legality of the strike have been prima facie complied with based on the records filed with the National Conciliation and Mediation Board. and reinstate the respondents who it constructively and illegally dismissed. NLRC affirmed the Labor Arbiter’s decision. . are the factors present which established a labor-only contracting: While there is present in the relationship of petitioner and CAMPCO some factors suggestive of an independent contractor relationship (i. and was therefore guilty of illegal dismissal. thus. Petitioner constructively dismissed a number of the respondents by placing them on "stay home status" for over six months. According to petitioner. to their previous positions. (c).. The respondents performed activities directly related to the principal business.e. petitioner is the real employer of the respondents. and (g). CA reversed – not established that CAMPCO is engaged or carries an independent business. 10. Section 6 of DOLE Department Order No. RULING: YES. the services rendered by CAMPCO constituted permissible job contracting under the afore-quoted paragraphs (a).

CAMPCO members worked within petitioner’s plantation and processing plants alongside regular employees performing identical jobs. as amended. free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof. Apart from that. and equipment actually used by CAMPCO members when rendering services to the petitioner belonged to the latter. Petitioner attempts to refute control by alleging the presence of a CAMPCO supervisor in the work premises. It only managed to increase its capitalization and assets in the succeeding years by continually and defiantly engaging in what had been declared by authorized DOLE officials as labor-only contracting. Rule VIII. Book III of the implementing rules of the Labor Code. Section 8(1). and perform odd jobs as may be assigned. CAMPCO complied with this venture by assigning members to petitioner. with such an arrangement.600. (4) CAMPCO was not engaged to perform a specific and special job or service. work or service was required from CAMPCO. As alleged by the respondents. required for permissible job contracting that the contractor undertakes the contract work on his account.00 paid-up capital. the tools. a circumstance recognized as an indicium of a laboronly contractorship. Even as CAMPCO had its own office and office equipment. the mere presence within the premises of a supervisor from the cooperative did not necessarily mean that CAMPCO had control over its members. CAMPCO agreed to assist petitioner in its daily operations.LABOR STANDARDS (1) Although petitioner touts the multi-million pesos assets of CAMPCO. In 1993. which could hardly be considered substantial. Petitioner was its only client. Yet. when CAMPCO was established and the Service Contract between petitioner and CAMPCO was entered into. under his own responsibility. before working for the petitioner. had to undergo instructions and pass the training provided by petitioner’s personnel. these were mainly used for administrative purposes. and it is apparent. It was precisely established to render services to petitioner to augment its workforce during peak seasons. In the Service Contract of 1993. CAMPCO members. it does well to remember that such were amassed in the years following its establishment. that CAMPCO merely acted as a recruitment agency . and unrebutted by petitioner. no other particular job. CAMPCO only had P6. including respondents. machineries. (3) Petitioner exercised control over the CAMPCO members. It was petitioner who determined and prepared the work assignments of the CAMPCO members. (2) CAMPCO did not carry out an independent business from petitioner. according to his own manner and method.

and reiterated the prohibition on labor-only contracting. revoked Department Order No. While some of them continued to work for petitioner. series of 1997 is the applicable regulation in this case.LABOR STANDARDS for petitioner. and etc. series of 1997. Respondents started working for petitioner sometime in 1993 and 1994.Regional Board of the National Capital Region issued Wage Order No. DO No. 3. others were put on "stay home status" at various times in 1994. 1990 . Since the undertaking of CAMPCO did not involve the performance of a specific job. not only directly related.10 is not applicable in this case. They worked as can processing attendant. since CAMPCO shall be considered as a mere agent or intermediary of petitioner. series of 2001. (5) CAMPCO members. The declaration that CAMPCO is indeed engaged in the prohibited activities of labor-only contracting. ISSUE: Whether or not Department Order No. . including respondents. feeder of canned pineapple and pineapple processing. determination ECOP v NWPC (1991) FACTS: October 15.. and 1996. functions which were. HELD: NO. 10. performed activities directly related to the principal business of petitioner. Respondents filed their Complaint with the NLRC on 19 December 1996. nata de coco processing attendant. The acts complained of by the respondents occurred well before the issuance of the two DOLE department orders in 1997 and 2001. NCR-01. The Service Contract between DOLE and CAMPCO was executed on 17 August 1993. fruit cocktail processing attendant. Department Order No. Wage studies. but rather the supply of manpower only. 10. an employer-employee relationship is deemed to exist between petitioner and respondents.00 daily in the National Capital Region. 19. at least until the filing of the Complaint. then consequently. 1995. agreements. CAMPCO clearly conducted itself as a labor-only contractor. but were very vital to petitioner’s business of production and processing of pineapple products for export. increasing the minimum wage by P17.

00 a day) as an alleged excess of authority. 6727 is intended to correct "wage distortions" and the salary-ceiling method (of determining wages) is meant. Upon the effectivity of this Wage Order. 1st CONTENTION OF ECOP: 1. Floor Wage Involves the fixing of determinate amount that would be added Salary-ceiling The wage adjustment is applied to employees . GEN representing NWPC: Republic Act No. the "floor-wage" method and the "salary-ceiling" method.00) per day. 1st ISSUE: WON the BOARD may use the Salary Ceiling Method? YES The Court is inclined to agree with the Government. ECOP appealed to the National Wages and Productivity Commission but was dismissed for lack of merits by the commission. NCR-01-A amending Wage Order No.the Board issued Wage Order No. precisely. to rectify wage distortions. NCR-01. all workers and employees in the private sector in the National Capital Region already receiving wages above the statutory minimum wage rates up to one hundred and twenty-five pesos (P125. ARGUMENT OF SOL.LABOR STANDARDS a. 1990 . 1990. ECOP opposed. the boards may only prescribe "minimum wages. In the National Wages and Productivity Commission's Order of November 6. so did the Personnel Management Association of the Philippines (PMAP). The Trade Union Congress of the Philippines (TUCP) moved for reconsideration. a." a.00) per day shall also receive an increase of seventeen pesos (P17. October 23. Contention 1: ECOP assails the board's grant of an "across-the-board" wage increase to workers already being paid more than existing minimum wage rates (up to P125." not determine "salary ceilings. 6727. the Commission noted that the determination of wages has generally involved two methods. b. and alleges that under the Republic Act No. as follows: Section 1.

3. 2nd ISSUE: WON the wage order is valid? YES Apparently. the wage order provisions that wage distortions shall be resolved through the grievance procedure (the collective bargaining) was perceived by legislators as ineffective in checking industrial unrest resulting from wage order implementations. Nos. Precisely. 1. 6727 was intended to rationalize wages. a consequence of the implementation of the said wage orders. 1713 and Wage Order Nos. wage distortion disputes were minimized. 1634. NCR-01. 5 and 6). The shift from the first method to the second method was brought about by labor disputes arising from wage distortions. 2nd CONTENTION OF ECOP: 2. With the establishment of the second method (mentioned above) as a practice in minimum wage fixing. Nos. 6640 and 6727 salary-ceiling method was also used in no less than eleven issuances mandating the grant of cost-ofliving allowances (P. and in its opinion. adopted in the earlier wage orders receiving a certain denominated salary ceiling. Republic Act No. NCR 01-A and for the "reinstatement" of Wage Order No. 1678. 6727 is meant to promote collective bargaining as the primary mode of settling wages. 1614.D. 525. ECOP prays for the nullification of Wage Order No.LABOR STANDARDS to the prevailing statutory minimum wage.A. ECOP likewise claims that Republic Act No. the boards cannot preempt collective bargaining agreements by establishing ceilings. used in R. . 2. 1123.

.. the Act would have no need for a board but an accountant to keep track of the latest consumer price index.LABOR STANDARDS 1. 6727 intended the boards alone to set floor wages. in prescribing an across-the-board hike did not. however. ARGUMENT OF SOL GEN: The Board. would have Congress done it as the need arises. and Republic Act No. The fact of the matter is that the Act sought a "thinking" group of men and women bound by statutory standards. Congress leaves sufficient standards. it has since been Government policy). the Court believes that the Commission correctly upheld the Regional Board of the National Capital Region. The question of whether the salary-cap method utilized by the Board may serve the purposes of Republic Act No. a lasting policy of the Board. by providing for full-time boards to police wages round-the-clock." 8 the boards may no more than adjust "floor wages. however. as in all delegations cases. performed an unlawful act of legislation. 6727 delegated to the regional boards no more "than the power to grant minimum wage adjustments" 7 and "in the absence of clear statutory authority. we find it to be reasonable policy (apparently. and 2. or better." but rather. it is a question on which we may only speculate at the moment. The Court's opinion is that if Republic No. 6727 in future cases and whether that method is after all. that Congress may delegate the power to fix rates provided that. in decreeing an across-the-board hike. prior to the Act. The Court is not convinced that the Regional Board of the National Capital Region. by giving the boards enough powers to achieve this objective." b. such as the extension of wage increases to employees and workers already receiving more than minimum wages . At the moment. we will take it up then. second. It is true that wage-fixing.. fixed minimum wages according to the "salary-ceiling method. first. "grant additional or other benefits to workers and employees. in reality." 3rd ISSUE: WON the Board acted in excess of its authority? NO. like rate constitutes an act Congress. and if in the future it would be perceptibly unfair to management. it is also true. and in the light of the floor-wage method's failure. As this Court has indicated. 3rd CONTENTION OF ECOP: 3. ECOP insist that wage is a legislative function. as the legislature. it is impressed that the above-quoted standards are sufficient. has done so for years.

whether fixed or ascertained on a time. or commission basis. or other facilities customarily furnished by the employer to the employee. to guarantee the rights of labor to its just share in the fruits of production. 6727 is meant to "get the Government out of the industry" and leave labor and management alone in deciding wages." 25 and as the Constitution expresses it. or worse. It is the Court's thinking. "[w]ith the proliferation of specialized activities and their attendant peculiar problems. 6727 expresses it. ECOP is of the mistaken impression that Republic Act No. "Fair and reasonable value" shall not include any profit to the employer or to any person affiliated with the employer. to abdicate its duty. As Justice Cruz observed. that is. The Court is not of course saying that the Act is an effort of Congress to pass the buck. the statute would have no . reached after the Court's own study of the Act. as determined by the Secretary of Labor. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. but simply. a different thing. it means more than setting a floor wage to upgrade existing wages. "Minimum wages" underlies the effort of the State. and certainly. that the Act is meant to rationalize wages. or for services rendered or to be rendered and includes the fair and reasonably value. of board. "to promote productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and their families." 26 As the Court indicated. piece." The Labor Code defines "wage" as follows: "Wage" paid to any employee shall mean the remuneration or earnings. The concept of "minimum wage" is. by having permanent boards to decide wages rather than leaving wage determination to Congress year after year and law after law. as ECOP takes it to mean.LABOR STANDARDS Apparently. to affirm "labor as a primary social economic force. the national legislature has found it more necessary to entrust to administrative agencies the power of subordinate legislation' as it is caned. or other method of calculating the same. as Republic Act No. lodging. and to allow business and industry reasonable returns on investment. expansion and growth. to enhance employment generation in the countryside through industry dispersal. however designated. however. task. capable of being expressed in terms of money. to leave the question of wages to the expertise of experts.

in addition. — The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health. which provides for exemption to establishments belonging to a distressed industry. The need to induce industries to invest in the countryside. 12 NASIPIT v NWPC FACTS Petitioners are separate and distinct corporations engaged in logging and wood processing. the Regional Board shall. Improvements in standards of living. 6. The State is concerned. ART. The needs of workers and their families. 8. October 1990 – Region X Tripartite Wages and Productivity Board issued Wage Order RX-01 which sets an increase in minimum wage to workers and employees in the private sector in Northern Mindanao in the amounts of P13. Standards / Criteria for Minimum Wage Fixing. 4. consider the following: 1. due to conditions beyond its control as may be determined by the Board in consultation with DTI and NWPC. 2. In the determination of such regional minimum wages. and P9. in three groups of provinces.LABOR STANDARDS need for a board if the question were simply "how much". The cost of living and changes or increases therein. 3. 5. 124. that social justice is subserved. Wage adjustment vis-a-vis the consumer price index. 3. that wages are not distributed unevenly. 7. P11. 9. and 10. The equitable distribution of income and wealth along the imperatives of economic and social development. . Effects of employment generation and family income. Fair return of the capital invested and capacity to pay of emphasis employers. and more important. efficiency and general well-being of the employees within the framework of the national economic and social development program. among other relevant factors. The prevailing wage levels. The demand for living wages. November 1990 – the RTWPB issued Guidelines No.

rationating that while their capital impairments are only by 1. they applied for exemption on the basis of belonging to a distressed industry. Therefore. NWPC affirmed one firm (ALCO)’s application. The RTWPB granted the applications.89% (NALCO). a lot of firms have closed. 4) Logging moratorium in Bukidnon.03% (PWC). 8) Excessive labor cost/production ratio and 9) Lumber export ban. 28. subject to guidelines issued by the Commission. to wit: are distressed due to conditions beyond their control. 6) Highly insufficient raw material.72% (ALCO) and 5. applications shall be filed with the appropriate Board which shall process the same. “whenever a wage order provides for exemption. Fact that applicant companies relied in good faith upon Guidelines No. to wit: 1) Depressed economic conditions due to 1) recession. and the Boards may issue supplementary guidelines. 7) Extraordinary increases in the cost of fuel. Respondents contended that the companies are not distressed establishments since their capitalization has not been impaired by 25%. That as per Provincial Trade & Industry Development Plan for the provinces where petitioners operate. 5) A reduction in the annual allowable volume of cut logs. 3 cannot be used as valid basis for granting exemption since it did not pass the approval of the Commission. which requires at least an accumulated 25% of losses in their paid-up capital for corporations. the Board should first pass such to the Commission for the latter to determine conformity with policies. that most of the circumstances responsible for their financial straits are largely external. In fact. 3 is not sufficient reason that they should be assessed based on the criteria of said Guidelines considering that it does not conform to the policies and guidelines issued by this Commission . 2) Emergency-related problems causing disruption and suspension of operations. 3) Imposition of environmental fee in addition to regular forest charges.LABOR STANDARDS Petitioners applied for exemption for the following reasons: they are distressed due to conditions beyond their control. spare parts. there is a slump in their industry due to the scarcity of raw materials.” As it is the Commission which is empowered to set criteria. the applicable guidelines are those issued in February 1991. and maintenance. oil. but reversed that of petitioners because Guidelines No. That under the Rules on Minimum Wage Fixing dated June 1990.

No law expressly requires the approval of the NWPC for the effectivity of the RTWPBs Guideline No. but also to issue exemptions the NWPC lays down the guidelines which the RTWPB implements. While the RTWPB has the power to issue wage orders under Article 122. the NWPC has the power not only to prescribe guidelines to govern wage orders. subject specifically to the guidelines issued by the NWPC. allows RTWPB to issue wage orders exempting enterprises However. 3 -.which was prior to the effectivity of RTWPB Guideline No. NWPC’s decision is affirmed. 3. Section 2 thereof. Article 121. Article 122 (e) of the Labor Code cannot be construed to enable the RTWPB to decide applications for exemption on the basis of its own guidelines which were . 3 was issued and NWPC’s guidelines cannot be given retroactive effect ISSUE Is a guideline issued by an RTWPB without the approval of or. Since the NWPC never assented to Guideline No. petitioners should not be prejudiced by their observance of Guideline No 3 as NWCPs own guidelines took effect long after Guideline No. provincial or industry levels. The NWPC authorized the RTWPB to issue exemptions from wage orders. process and act on applications for exemption as may be provided by law or any wage order. Assuming arguendo that the approval of the NWPC was legally necessary. It is a hornbook doctrine that the issuance of an administrative rule or regulation must be in harmony with the enabling law. One of these guidelines is the Rules on Minimum Wage Fixing issued on June 1990. Rule IV. said guideline is inoperative Moreover. contrary to the guidelines promulgated by the NWPC valid? RULING NO. such orders are subject to the guidelines prescribed by the NWPC. provide: (c) To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional. 122 (e) of the Labor Code. which lists the powers and functions of the NWPC. worse.requires that an application for exemption should be processed by the RTWPB. but subject to its review and approval. 3. NWPCs Rules of Procedure issued in June 1990 -. the RTWPB has the power [t]o receive.LABOR STANDARDS Petitioners’ contentions: that under Art.

much less a vested one. there is no basis for petitioners claim that their vested rights were prejudiced by the NWPCs alleged retroactive application of its own rules because Guideline No. In the case at bar. CAGAYAN v SEC FACTS On November 16. Cagayan Sugar Milling did not implement an across the board increase in the salary of its employees. Regional Wage Order (WO) No. Cagayan maintained that it complied with Wage Order No. It provides: "Section 1. if a stock corporation like petitioners. Regional Office No.. the NWPC requires the applicant. it is undisputed that during the relevant accounting period. While on appeal to the Labor Secretary. To justify the exemption of a distressed establishment from effects of wage orders.. 3 was not valid and. amending the earlier wage order. Section 1 of Wage Order No. RD ruled that Cagayan violated WO RO2-02 by failing to implement an across the board increase in the salary of its employees. to prove that its accumulated losses impaired its paid-up capital by at least 25 percent in the last full accounting period preceding the application or the effectivity of the order. only ALCO which met the exemption standard.00 per day . He ordered the payment of the deficiency in the salary of its employees of P555. the statutory minimum wage rates applicable to workers and employees in the private sector in Region II shall be increased as follows: x x x 1. II of DOLE.133. Cagayan x x x" Labor inspectors from the DOLE Regional Office examined the books of Cagayan Sugar Milling and found there was a violation.41.. the Regional Wage Board issued WO No. thus. RO2-02 was issued by the Regional Tripartite Wage and Productivity Board. Upon effectivity of this Wage Order. thus: "Section 1. cannot be a source of a right. RO2-02 shall now read as. 1993. "Upon effectivity of this Wage Order. the workers and employees in the private . RO2-02 as it paid the mandated increase in the minimum wage.LABOR STANDARDS not reviewed and approved by the NWPC. RO2-02-A.2 P14.

In fact. Thus. In truth.2 P14. This amendment is curative in nature and shall retroact to the date of the effectivity of WO No. There was no ambiguity in the provision of WO RO2-02. factors must be taken into consideration. In passing RO2-02-A without going through the process of public consultation and hearings. the Labor Sec abused his discretion in upholding the validity of said WO.00 per day .. RO2-02. RO2-02-A merely clarified the ambiguous provision of the original WO ISSUE WON WO RO2-02 is null and void for having been issued in violation of petitioner's right to due process of law. RO2-02-A is concerned. The subsequent passage of RO2-02-A providing instead for an across the board increase in wages did not clarify the earlier Order but amended the same. Sec of Labor’s Contention: there was no need to comply with the legal req of consultation and newspaper publication as WO No. these allegations were not denied by public respondents in their Comment. Cagayan x x x "Section 2. it changed the essence of the original Order.. the Regional Board deprived petitioner and other employers of due process as they were not given the opportunity to ventilate their positions regarding the proposed wage increase.. In wage-fixing. The record shows that there was no prior public consultation or hearings and newspaper publication insofar as WO No. CARSUMCO EMPLOYEES UNION moved for execution of the order of the RD. Private resp. RULING YES.LABOR STANDARDS sector in Region 2 shall receive an across the board wage increase as follows: x x x 1. . Cagayan’s Contention: It assails the validity of WO RO2-02-A on the ground that it was passed without the required public consultation and newspaper publication." The Sec of Labor dismissed the appeal and affirmed the Order RD.

00/day increase in the statutory minimum wage of all workers and employees in the private sector. Secretary of Labor’s Contention: despite the wording of WO RO2-02 providing for a statutory increase in minimum wage. 6727. granting a P25. they urge that Cagayan is liable for merely providing an increase in the statutory minimum wage rates of its employees. RO2-02 clearly provided for the fixing of a statutory minimum wage rate and not an across the board increase in wages. . Held: NO. giving notices to interested parties. it mandates that the Wage Order shall take effect only after publication in a newspaper of general circulation in the region. otherwise known as the Wage Rationalization Act. Issue: WON Cagayn could be held liable under the original wage order. RO2-02-A must be struck down for violation of Article 123 of the Labor Code Cagayan’s Contention: WO no. Hence. Republic Act No. the Regional Board shall conduct public hearings and consultations. METROBANK v NLRC (1993) ALU v NLRC (1994) FACTS: 1989. We likewise find that Secretary of Labor committed grave abuse of discretion in upholding the findings of Regional Director Ricardo S. Summary of the Decision: We hold that RO2-02-A is invalid for lack of public consultations and hearings and non-publication in a newspaper of general circulation. Hence. Neither was it published in a newspaper of general circulation. Martinez. RO2-02.LABOR STANDARDS Article 123 of the Labor Code also provides that in the performance of their wage-determining functions. Moreover. it is indisputable that there was no public consultation or hearing conducted prior to the passage of RO2-02-A. the real intention of the Reg Board was to provide for an across the board increase. In the case at bar. Sr. in violation of Article 123 of the Labor Code. that petitioner violated Wage Order RO2-02. took effect. It is not just to expect to interpret Wage RO2-02 to mean that it granted an across the board increase as such interpretation is not sustained by its text. Cagayan clearly complied with WO RO2-02 which provided for an increase in statutory min wage rates for employees in Region II.

Petitioners filed a complaint against private respondent in the National Labor Relations Commission. the difference in salaries between the regular employees (herein petitioners) and the temporary employees. Inc. They alleged that a wage distortion had been created by the grant to its temporary employees of a P25. the validity of negotiated wage increases to correct wage distortions.00/day wages of its temporary employees or "broilers. as amended by Republic Act No. who were then receiving P100. and separate from those obtained through negotiation and agreement.00/day increase to the P54. gave a P25. members of petitioner union. NLRC: Affirmed LA. 6727. therefore. expressly provides that where the application of any prescribed wage increase by virtue of a law or wage order issued by any Regional Board results in distortions of the wage structure within an establishment. ALU’s contention: the increases mandated by the parties' Collective Bargaining Agreement and the voluntary agreement should not be considered as having corrected the wage distortion.80 a day were not granted a similar increase. ISSUE: W/N there is a wage distortion? NO. LA DECISION: Dismissed the complaint. . The law recognizes." Because the regular employees. He found no wage distortion in view of a series of salary increases which respondent had granted to petitioners vis-a-vis the temporary employees. the employer and the union shall negotiate to correct the distortions. RULING: Art. 124 of the Labor Code.00/day salary increase under Republic Act No. through compulsory arbitration.LABOR STANDARDS In implementation of the law. since employee benefits derived from law are exclusive. private respondent Del Monte Philippines.80 from the previous P46. thereby reducing to P21. The parties executed a Memorandum Agreement wherein private respondent. distinct. 6727.00/day as balance. granted the members of petitioner union a P10. they complained to the management of private respondent.80.00/day wage increase subject to the latter's right to claim P15.

In this case. contending that it had by previous agreement. are entitled to respect and finality. lockouts. APEX v NLRC (1992) FACTS: Sandigan ng Manggagawang Pilipino filed before the Labor Arbiter a claim for ECOLA differential against Apex Mining. Davao del Norte operations. an aggregate cumulative daily ECOLA of only P15 which was P2 below the cumulative minimum ECOLA of P17 (for non-agricultural workers) established under Wage Order No. and that in any event. between 1 Nov 1954 until 28 Mar 1985. Apex increased the daily ECOLA of its workers by P3 (from P9 to P12). or P2 less than the legislated ECOLA increase of P5. 5. Apex denied having failed to comply with Wage Order No. Since Apex had integrated P2 (out of P5) ECOLA provided for in Wage Order No.LABOR STANDARDS The legislative intent is to encourage the parties to seek solution to the problem of wage distortions through voluntary negotiation or arbitration. that no wage distortion exists being based on substantial evidence. incorporated the alleged P2 deficiency into the basic salary of its employees. Thus. rather than strikes. Whether or not a wage distortion exists by reason of the grant of a wage increase to certain employees is essentially a question of fact. 6. 5 has itself authorized such integration. Sandigan denies that such agreement had been made but conceded that a P2 increase in basic salary had been made by Apex. and that Apex had belatedly granted the additional P2 starting on 29 Mar 1985 only. Sandigan’s allegations: Apex paid its employees in its Maco. 5. 5. 6. when Apex complied with the . affirmed by the NLRC. in compliance with a provision of the CBA between Apex and Sandigan. Wage Order No. Apex’s contentions: The daily salary increase of P2 provided in the CBA to take effect on 1 Feb 1984 had been subsequently credited as partial compliance with the P5 increment mandated by Wage Order No. 6 took effect on 1 Nov 1984 or several months after the increase had been integrated by Apex into the basic salary. Inc. 6. the findings of the Labor Arbiter. The integration of P2 alowance into the basic salary provided in the CBA has been conformed to by the National President of Sandigan. in compliance of Wage Order No. It also pointed out that Wage Order No. and not in fulfillment of Apex’s obligation under Wage Order No. or other concerted activities of the employees or management.

" Such benefits which employees are already enjoying "without cost" could not. Section 6 of the Rules Implementing Wage Order No. Article 100 does not. 6. LA’s Decision: The wage increase given in accordance with the CBA could not be credited as compliance with increases mandate in the Wage Orders. once more. NLRC affirmed. in other words. employees. effective on and after 1 Feb 1984. under Section 6. 5 and Wage Order No. was lawfully credited towards compliance with increases in ECOLA required under the Wage Orders Sandigan’s contentions: To consider the P2 increase in basic salary effective 1 Feb 1984 provided by the CBA as compliance with the Wage Orders would be violative of Article 100. The P2 increase integrated in the basic salary of Apex's. RULING: NO.LABOR STANDARDS additional ECOLA increase mandated by Wage Order No. the resulting figure for the total or cumulative ECOLA paid by Apex appeared to be only P15. 6 expressly allowed the crediting of increases in wages or allowances granted under collective bargaining agreements towards compliance with increases in ECOLA requirements prescribed by those Wage Orders. The prohibition against elimination or diminution of benefits set out in Article 100 is specifically concerned with benefits already enjoyed at the time of the promulgation of the Labor Code. was concededly given under the provisions of the CBA. It ordered Apex to pay Sandigan the claimed ECOLA differential of P2 for the period from 1 Nov 1984 to 28 Mar 1985. 6]. (All increases in wages and/or allowances granted by employers between … and the effectivity of this order shall be credited as compliance with the minimum wage and allowance adjustments prescribed herein. ISSUE: WON the P2/day increase in basic salary effective 1 Feb 1984 granted by Apex pursuant to the CBA. Section 6 does not relate to the problem at hand. suddenly be ascribed monetary value so as to offset or diminish increases in the minimum wage rates prescribed by statute. Clearly.) . purport to apply to situations arising after the promulgation date of the Labor Code. 6 relates to "supplements and other benefits" which employees are already "enjoying without cost at the time of the effectivity of [Wage] Order [No. Both Wage Order No.

one being effective on 1 February 1985 and the second effective on 1 February 1986. 5 and under Sec. Since such crediting was expressly allowed under Wage Order No.00 in ECOLA. In respect of Wage Order No. When Wage Order No. the same total or cumulated increase contemplated by Wage Orders Nos.00 increase in basic salary. 6.00. .00. with the result that no differential was actually due from it.LABOR STANDARDS The public policy of the Wage Orders may be seen to be the encouragement of employers to grant wage and allowance increases to their employees higher than the minimum rates of increases prescribed by statute or administrative regulation. Hence. Rule VI of the CBA. again. 5. Apex credited the P2. 6 was promulgated. and to compel employers simply to add on legislated increases in salaries or allowances without regard to what is already being paid. 5. the apparent cumulated increase in ECOLA. 7 of Wage Order No. however. Since. RULING The P2. Apex had previously increased the basic salary by P2.00. Apex paid this mandatory increase and denominated all of it as ECOLA. the apparent cumulated increase was P15. was only P12. the actual increases — the composite of basic salary and ECOLA — aggregated P14. 4 of Wage Order No.50 each. it prescribed an increase of P3.00 increase was given by Apex under Section 3. 5. there was no compliance with the Wage Orders. it follows that petitioner Apex was in compliance with Wage Order No. No differential was therefore due thereunder. 5 and 6. the two (2) increases of 1.00. effective 1 February 1984. Thus.50 each. would be to penalize employers who grant their workers more than the statutorily prescribed minimum rates of increases. towards compliance with the statutorily prescribed ECOLA increase of P5. not creditable under Sec. the first being effective on the first anniversary date of the CBA (1 February 1985) and the second being effective on the second anniversary date (1 February 1986). 6. Thus. However. In other words. as shown in Apex's books. Sandigan’s contention: The 1 Feb 1984 P2 increase in basic salary was actually an “anniversary wage increase” and therefore. were precisely the non-creditable "anniversary wage increases. the aggregate actual increase (in basic salary plus ECOLA) was P17.00. Thus. Apex was actually in compliance with the requirements of Wage Order No. The P2 increase effective on 1 Feb 1984 was distinguishable from the 2 increases of P1. To obliterate the creditability provisions in the Wage Orders through interpretation or otherwise.00 effective 1 February 1984.

located in Kalamansig. Cotabato City in response to complaints filed by two of petitioner's employees.000. notice of inspection results were issued: requiring petitioner to effect restitution or correction within five (5) days from notice. and Wage Order No. Wherefore. a coconut plantation utilized as a demonstration farm for replanting and/or training area for coconut farmers. Apex lawfully credited the P2. 6 itself.00 as part of their ECOLA. a complaint inspection was conducted by the Department of Labor and Employment.LABOR STANDARDS Thus.000. Sandigan’s claim to a differential in ECOLA lacks basis. Alex Edicto and Delia Pahuwayan.00 increase effective 1 February 1984. Sultan Kudarat. Allegation of the complainant: They were not receiving the statutory minimum wage since 1984 and COCOFED should not be categorized as an establishment with paid-up capital of P50. Defense by COCOFED: It should be classified as an establishment with less than 30 employees and with a paid-up capital of P500. rather than in ECOLA. emergency cost of living allowance (ECOLA) and 13th month pay. 5. Moreover. the Implementing Rules of Wage Order No. made no legal difference so far as concerns the creditability of such increase. a minimum of four and maximum of six. The inspection revealed that petitioner was guilty of underpayment of wages.00 or less inasmuch as it erroneously based its claim on the value of its declared real property and not its paid-up capital. Hence. . Accordingly. Hence. expressly authorized increases in basic salary in lieu of increases in ECOLA. On November 15. the fact that Apex had denominated the P2. Region XII. integration of the P2. petitioner was justified in paying an amount less than the statutory minimum wage.00 or less as evidenced by the assessment of the municipal treasurer.00 into the basic salary of the employees was more beneficial to them than granting the P2. as an increase in basic salary. Indeed. METRO v NLRC (1995) COCOFED v TRAJANO (1995) FACTS: Philippine Coconut Producers Federation operates petitioner COCOFED (Kalamansig). 5 and 6. In fact.00 increase in basic salary towards compliance of the increase in ECOLA prescribed by Wage Orders Nos. complainants worked for less than eight hours. 1988. provided the amounts thereof were not less than the amounts required by the Wage Orders.

00 or less There is no question that it employs only twenty-one employees. On July 30. Hon. Of Labor.430. petitioner filed a motion to conduct a time and motion study to determine the fair and reasonable wage rates to be paid to complainants. Trajano denied the motion of the COCOfed rationating that: “On the basis of the payrolls submitted by the respondent. G.365. This case was raised to the Sec. said conversion is an outright violation of the Labor Code.00. Petitioner argues that to have a paid-up capital of P500. Balanag of the DOLE Regional Office in Cotabato City. On March 22.R. No. issued a Compliance Order which ordered COCOFED to pay the Twenty One (21) workers their entitlements for underpayment of wages. we find that respondent's claim that it falls within the category of establishments with paid-up capital of P500. 1989. While respondent claims the in 1985 these workers were paid on piece rate basis still the payrolls show that from March 1985 to February 1989. 100 of the Labor Code. Inciong.000. Obviously.00 remains a bare allegation without a scintilla of evidence to stand on. Petitioners total capital asset based on an assessment from the Municipal Treasurer of Kalamansig and the receipts of payment of its realty taxes is only P1.000. 1990. the complainants were paid on a daily basis. November 7. L-50568. petitioner should pay the following wages: . Undersecretary Cresenciano B.000.” 1st ISSUE W/n public respondents committed grave abuse of discretion in not categorizing it as an establishment with less than 30 employees and with a paid up capital of P500. Besides. the same is bereft of merit. An employer cannot unilaterally decrease the salary being given to the employees pursuant to Art.00. underpayment of ECOLA. If categorized as such.00 and authorized capital stock of P8.LABOR STANDARDS On November 13.000.000. A. we find that Regional Director was correct in ruling that the complainants are daily paid workers. 1990. the implementing rules are explicit to the effect that nothinzg therein shall justify an employer from withdrawing or reducing benefits or supplements provided in existing individual or collective agreement or employer practice or policy. Director Melencio Q.000. and underpayment of 13th month pay. What it has voluntarily given cannot be unilaterally withdrawn.00.000. (Oceanic Phamacal Employees Union v. 1979) Lastly. it should have a subscribed capital of at least P2. Granting that these workers were indeed converted to piece-rate workers.

198 7 b. 1 1198 1987 7 b. there would .LABOR STANDARDS Per W. Agricultu re Plantatio n 32.00 is totally without basis.50 44.000. 6 EFFEC 1 Nov. that is. YES Allegation of COCOFED: Employees are paid by result or are.O.00 to support its position that it has a paid-up capitalization of less than P500.50 Jan. Finally. RULING: The findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but finality There is absolutely nothing in the records which show that petitioner's employees worked for less than eight hours. 198 8 44. 32. Thus.365. a minimum of four and a maximum of six. ISSUE: Whether or not compainants are daily paid workers. No.O. 11984 May Oct.0 0 38. they should be paid a proportionate amount of the applicable statutory minimum wage.0 0 instead of the following rates used by public respondents: Per W. 6 Effective Nov.00 Agricultu re Plantatio n 38. piece rate workers who work for less than eight hours.430.00 35. 1 May 1 TIVE 1984 1987 Oct.00 8 The allegation of petitioner that it has capital assets of P1. No.

350. as amended. to wit: 1) the claim is presented by an employee or person employed in domestic or household service. as found by public respondents. respondent Undersecretary issued the Order dismissing petitioner's appeal and affirming the Order of the respondent Director. RULING Under the foregoing provisions of Articles 129 and 217 of the Labor Code. to hear and decide cases involving recovery of wages and other monetary claims and benefits. the respondent failed to appear. the Labor Regulation Officers of the Regional Office a quo inspected the respondent's employment records. including legal interest. However.828. 3) the claimant does not seek reinstatement. However. provided the following requisites are present. Accordingly. ABOITIZ v DELA SERNA (1990) FACTS: A complaint was filed by the Aboitiz Shipping Employees Association against Aboitiz Shipping Corporation for non-compliance of the mandated minimum wage rates and allowances. Series of hearings were conducted whereby the respondent was directed to present and submit all its pertinent papers/employment records covered by the investigation.00per day reckoned from 16 February 1982 to 15 February 1985. in which Aboitiz Shipping questioned the jurisdiction of respondent Regional Director over the instant claims. The Regional Director of DOLE-NCR rendered a decision ordering Aboitiz Shipping to pay the complainants the total amount of PhP1. as it claimed and if their wages were not underpaid. Aboitiz Shipping failed to do so. and .00 representing underpayment of daily allowance of PhP 2. On appeal to the Office of the Secretary of Labor and Employment. on several occasions. the Regional Director is empowered.LABOR STANDARDS have been no need for petitioner to make an offer increasing the wage to P45. through summary proceeding and after due notice. Aboitiz Shipping Corporation was required for quite a number of times to present in evidence its employees’ payrolls and vouchers.00 per day if complainants were indeed piece rate workers. or househelper. ISSUE: Whether the Regional Director of DOLE-NCR correctly assumed jurisdiction over the money claims filed with him by the complainants. 2) the claim arises from employer-employee relations.

While it may be true that P. All the other requisites for the exercise of the power of the Regional Director under Article 129 of the Labor Code.A. the latter found each of the seven hundred seventeen (717) complainants entitled to a uniform amount of P1. In the absence of any of the requisites above enumerated. As to the petitioner's contention that it was denied due process of law as it was not afforded time and opportunity to present its evidence. Manuel in his personal capacity and a representative of Aboitiz Shipping. Labor Code. the records show that on several occasions despite due notice. particularly paragraph six (6) thereof. all these pursuant to Article 217 of the Labor Code. still. It follows that the respondent Regional Director properly took cognizance of the claims.000. petitioner failed to either appear at the scheduled hearings. petitioner was not denied due process of law. particularly. 6715.00 (Art. In the case at bar. The Court also finds no merit in Aboitiz Shipping’s contention that the case should have dismissed outright by virtue of the Compromise Agreement entered into by the parties. 1678 as the issue on the said decree was never raised by private respondent in its complaint filed before the Regional Director.00. 1678 is not one of the laws where non-compliance therewith was complained of. subject of this petition.D. as amended by R. are present. medicare and maternity benefits. as he (Regional Director) has such power under his visitorial and enforcement authority provided under Article 128(a) of the Labor Code.A. it is the Labor Arbiter who shall have exclusive original jurisdiction over claims arising from employeremployee relations.D. social security.LABOR STANDARDS 4) the aggregate money claim of each employee or househelper does not exceed P5. 6715). Said Compromise Agreement shall not bind the complainant union since it was entered into by one Mr. the Regional Director correctly acted in ordering petitioner to comply therewith. except claims for employees' compensation. The Court also does not agree with Aboitiz Shipping’s allegation that it was improper for the respondent Regional Director to order in the questioned Order. Therefore.. BROKENSHIRE v MOLE (1990) . or to present its employees' payrolls and vouchers for wages and salaries. 129. it is noted that in the Order of the Regional Director. compliance with P.884. as amended by R.

6 which took effect on November 1. petitioner raised the following affirmative defenses: 1) That the Regional Office of the Ministry of Labor did not acquire jurisdiction over it for want of allegation that it has the capacity to be sued and 2) That Wage Order Nos. Judgment having become final and executory. INC.) on September 21. Davao City for non-compliance with the provisions of Wage Order No. failed to comply with the new Wage Order No. 1984 with the Regional Office of the MOLE. 5 and likewise.50 covering the period from June 16 to October 15. The levy and garnishment were lifted when petitioner hospital paid the claim of the private respondents (281 hospital employees) directly.LABOR STANDARDS FACTS A complaint filed by private respondents (BROKENSHIRE MEMORIAL HOSPITAL EMPLOYEES AND WORKER'S UNION-FFW) against petitioner (BROKENSHIRE MEMORIAL HOSPITAL. petitioner hospital failed to continue to comply with Wage Order No. 1st ISSUE Whether or not the Regional Director has jurisdiction over money claims of workers concurrent with the Labor Arbiter. . prompting private respondents to file against petitioner another complaint docketed as ROXI-LSED-14-85. Region XI. the Regional Director issued a Writ of Execution whereby some movable properties of the hospital (petitioner herein) were levied upon and its operating expenses kept with the bank were garnished. in the total amount of P163. After making said payment. 1984 in favor of private respondents. After due healing the Regional Director (Eugenio I. Jr. 1984.047. Sagmit. 1984. 5 and 6 are non-constitutional and therefore void. which is now the case at bar. In its answer. 5.) rendered a decision dated November 16.

. to hear and decide any matter involving the recovery of wages and other monetary claims and benefits. owing to an employee or person employed in domestic or household service or househelper under this code. all other claims arising from employer-employee relations. 217 of the Labor Code. Provided. through summary proceeding and after due notice. to read as follows: ART. including those of persons in domestic or household service. medicare and maternity benefits. arising from employer-employee relations. That the aggregate money claims of each employee or househelper do not exceed five thousand pesos (P5. further. ART.000. social security. involving an amount not exceeding five thousand pesos (P5. The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same . including legal interest. 129 and Art. . the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide…the following cases involving all workers. whether agricultural or nonagricultural: XXX (6) Except claims for employees compensation.000.00). Recovery of wages. 129. Jurisdiction of Labor Arbiters and the Commission. Provided. — Except as otherwise provided under this code. That such complaint does not include a claim for reinstatement. 217. .—Upon complaint of any interested party.LABOR STANDARDS RULING RA 6715 amended Art. whether or not accompanied with a claim for reinstatement. the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered. simple money claims and other benefits.00).

On our part. to wit: 1) The claim is presented by an employee or person employed in domestic or household service. is Republic Act 6715. 2) The claimant. no longer being employed. representing the latter's minimum wage increases up to October 16. the assailed legislation remains operative and can be the source of rights and duties especially so in the case at bar when petitioner complied with Wage Order No. 2nd ISSUE Can the NLRC pass upon the constitutionality of the wage orders? RULING The Supreme Court is vested by the Constitution with the power to ultimately declare a law unconstitutional. The Regional Director is plainly . In the absence of any of the three (3) requisites.047. or hear and determine any claim brought before them for recovery of wages.without the authority to declare an order or law unconstitutional and his duty is merely to enforce the law which stands valid.00). simple money claims. and 3) The aggregate money claim of the employee or househelper does not exceed five thousand pesos (P5. the Labor Arbiters have exclusive original jurisdiction over all claims arising from employer-employee relations. unless otherwise declared by this Tribunal to be unconstitutional.e. Without such declaration. social security. provided that the following requisites concur. or househelper under the code. other than claims for employee's compensation.50. We hereby declare the assailed Wage Orders . and other benefits.000. i. does not seek reinstatement.. 5 by paying the claimants the total amount of P163.LABOR STANDARDS It will be observed that what in fact conferred upon Regional Directors and other hearing officers of the Department of Labor (aside from the Labor Arbiters) adjudicative powers. instead of questioning immediately at that stage before paying the amount due. the power to try and decide. 1984. medicare and maternity benefits. the validity of the order on grounds of constitutionality.

600. Those relieved were ordered to report to the agency's main office for reassignment. rest days. Petitioner relieved and re-assigned the complaining guards to other posts in Metro Manila. ODIN v DELA SERNA (1990) FACTS A complaint was filed by Sergio Apilado and 55 others charging the petitioner Odin Security Agency. that since private respondents were relieved or constructively dismissed. and 13th-month pay. Petitioner. Alarmed by a possible abandonment of post by the guards. Petitioner filed an ex parte manifestation alleging that 19 complainants had withdrawn their complaints. overtime pay. When conciliation efforts failed. Petitioner claimed it complied with the Labor Code provisions. they did not have any intention of waiving their rights under the law. illegal deductions. and. underpayment of wages. on the other hand. and in support thereof. it submitted the "Quitclaim and Waiver" of 34 complainants. that from this amount. premium pay for holiday work. so those who failed to comply were placed on "AWOL" status. vacation and sick leaves. which Orders are without doubt for the benefit of labor. petitioner deducted P100 as administrative cost and P20 as bond. 17 complainants repudiated their quitclaim and waiver. Only few complied. contended that some 48 security guards threatened mass action against it. Private respondents alleged in their position paper that their latest monthly salary was P1. and holidays were paid in cash. . night shift differential.LABOR STANDARDS as constitutional. the parties were required to submit their position papers. They alleged that management pressured them to sign documents which they were not allowed to read and that if such waiver existed. they must also be paid backwages. there being no provision of the 1973 Constitution (or even of both the Freedom Constitution and the 1987 Constitution) violated by said Wage Orders. service incentive leaves. that service incentive leaves not availed of. nonpayment of night shift differential. that they were not paid their premium pay and overtime pay for working on the 11 legal holidays per year. rest days and Sundays. It further alleged that complainants who rendered over-time work as shown by their time sheets were paid accordingly.

There is no denial of due process where a party is given an opportunity to be heard and present his case. Since petitioner herein participated in the hearings. ISSUE: claims. petitioner was silent. Petitioner submitted to the jurisdiction of the Regional Director by taking part in the hearings before him and by submitting a position paper. When the Regional Director issued his order requiring petitioner to pay the private respondents the benefits they were claiming. The petitioner is estopped from questioning the alleged lack of jurisdiction of the Regional Director over the private respondents' claims. It was only after the Undersecretary modified the order of the Regional Director that the petitioner moved for reconsideration . submitted a position paper. What the fundamental law abhors is not the absence of previous notice but rather the absolute lack of opportunity to be heard.added 16 other complainants to the list of whom should be paid. and that complainant's allegation of coercion or threat was a mere afterthought. Piezas issued an order directing respondent to pay complainants The Undersecretary affirmed the order of the Regional Director with modifications . complainants fully understood the document they signed. Only the private respondents filed a motion for reconsideration. and respondent is directed to reinstate the complainants to their former positions without loss of seniority rights plus backwages from the time of their relief from work until their actual reinstatement. The petitioner was not denied due process for several hearings were in fact conducted by the hearing officer of the Regional Office of the DOLE and the parties submitted position papers upon which the Regional Director based his decision in the case. Petitioner alleges that it was deprived of due process of law.LABOR STANDARDS Petitioner argued that complainants were estopped from denying their quitclaims on the ground of equity. both substantive and procedural. that the Orders is contrary to law ISSUE: WON petitioner was denied due process RULING: NO. Requirements of due process are satisfied when the parties are given an opportunity to submit position papers. WON the Regional Director has jurisdiction over private respondents’ HELD: YES. it was not denied due process. and filed a motion for reconsideration of the decision of the Labor Undersecretary. NCR Luna C. Regional Director(DOLE). that being high school graduates.

LABOR STANDARDS and questioned the jurisdiction of the public respondents to hear and decide the case. after obtaining or failing to obtain such relief. except 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. in representation of the Secretary of Labor — and notwithstanding the grant of exclusive original jurisdiction to Labor Arbiters by Article 217 of the Labor Code.e. after due notice and hearing. thus: (b) The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists. and 2) the employer does not contest the findings of the labor regulations officer or raise issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection . thus: To recapitulate under EO 111. Hon. repudiate or question that same jurisdiction The jurisdiction of public respondents over the complaints is clear from a reading of Article 128(b) of the Labor Code. the Regional Directors. provided that: l) the alleged violations of the employer involve persons who are still his employees.A party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and.. In Briad Agro Development Corp. vs. Dionisio De la Serna. the Minister of Labor and Employment or his duly authorized representatives shall have the power to order and administer. The principle of jurisdiction by estoppel bars it from doing this which provides . as amended — have power to hear cases involving violations of labor standards provisions of the Labor Code or other legislation discovered in the course of normal inspection. compliance with the labor standards provisions of this Code and other labor legislation based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection. and order compliance therewith. not dismissed. as amended by Executive Order No. i. 111. the Court clarified the amendment when we ruled. and to issue writs of execution to the appropriate authority for the enforcement of their orders.

which was later reduced to P15/day by way of an amicable settlement. and not by strikes. or . RA 6727 prescribes a specific. it filed a complaint before the NLRC to declare the strike or slowdown illegal.LABOR STANDARDS The ruling in Briad Agro was reiterated in Maternity Children's Hospital vs. work disruption. Sec. which provided . these activities may be forbidden or restricted by law or contract. lockouts. and comprehensive procedure for the correction of wage distortion. IBM v NLRC (1998) FACTS: 1. lockouts. IBM. SMC’s contention: The concerted acts are contrary to law and to the CBA between it and IBM. detailed. RULING: Although Art. 2. demanded for correction of the significant distortion in the workers’ wages pursuant to Sec. 4. thereby causing financial losses to SMC in order to compel it to yield to the demand for correction of wage distortions. HELD: YES. or other concerted activities as modes of settlement of the issues. 263. ISSUE: W/N IBM’s concerted acts of reducing their work time.657. are illegal. a Regional Director exercises both visitorial and enforcement power over labor standards cases.598 in sales and P48. Secretary of Labor. representing 4500 employees of SMC. 3. RA 6727.under the present rules. Because of SMC’s rejection. The legislative intent that solution of the problem of wage distortion shall be sought by voluntary negotiation or arbitration. IBM alleged that SMC ignored the demand by offering a measly across-theboard wage increase of P7/day as against the IBM’s proposal of P25/day. IBM’s concerted acts are illegal. Hence.311 in revenues). LC gives the workers the right to engage in concerted activities for purposes of CBA or for their mutual benefit and protection. provided there still exists an employer-employee relationship. IBM members refused to render overtime services as their means of compelling SMC to correct the wage distortion. SMC claimed that the abandonment of the long-standing work schedule caused substantial losses (P174. 4 (d). 3. and is therefore empowered to adjudicate money claims.904. and the findings of the regional office is not contested by the employer concerned. and lower efficiency to the prejudice of SMC. It is prohibited under RA 6727 and the CBA. And it implicitly excludes strikes.

retard production or their performance of duties and functions to compel management to grant their demands. Working conditions for special groups xx 1.LABOR STANDARDS other concerted activities of the employees or management. such a proscription by an employer being outlawed by Article 136 of the Labor Code. the record discloses clearly that her ties with the company were dissolved principally . RA 6727 IRR: “Any issue involving wage distortion shall NOT be a ground for a strike/lockout”. the partial strike or concerted refusal by the IBM to follow the 5-year-old work schedule is tantamount to a slowdown which is forbidden by law and contract. an activity by which workers. is made clear in Sec. in relation to a labor dispute. Chapter I. contrarily argues that what really motivated PT & T to terminate her services was her having contracted marriage during her employment. Moreover. illegal. discrimination. a willful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the employer. afforded all women workers by our labor laws and by no less than the Constitution. She thus claims that she was discriminated against in gross violation of law. which is prohibited by petitioner in its company policies. and the right against. Women PT & T v NLRC (1997) FACTS: Petitioner Philippine Telegraph and Telephone Company (hereafter. under the CBA. IBM’s acts are in the nature of a “slowdown” which is a “strike on the installment plan”. herein private respondent Grace de Guzman. hence. ISSUE: WON ART 136 of the Labor Code was violated RULING: Petitioner's policy of not accepting or considering as disqualified from work any woman worker who contracts marriage runs afoul of the test of. Contrary to petitioner's assertion that it dismissed private respondent from employment on account of her dishonesty. B. without a complete stoppage of work. IBM was prohibited to declare and hold a strike or otherwise engage in non-peaceful concerted activities for the settlement of its controversy with SMC in respect of wage distortions. Thus. 16. That employee. PT & T) invokes the alleged concealment of civil status and defalcation of company funds as grounds to terminate the services of an employee.

terms. or public policy. It would be worthwhile to reflect upon and adopt here the rationalization in Zialcita. another employee (electrical engineer) of the company. Olympia filed a claim for compensation. it may even be said that petitioner's policy against legitimate marital bonds would encourage illicit or common-law relations and subvert the sacrament of marriage. the same should not be contrary to law. There. . in 1972. and held. public order. and not merely because of her supposed acts of dishonesty. The company informed her that she was regarded to have resigned her office. Philippine Air Lines. good customs. a privilege that by all accounts inheres in the individual as an intangible and inalienable right. tending as it does to deprive a woman of the freedom to choose her status. a policy of Philippine Air Lines requiring that prospective flight attendants must be single and that they will be automatically separated from the service once they marry was declared void. but it likewise assaults good morals and public policy. 38 Hence. et al. She married Roberto.’ ISSUE: WON an employer may terminate an employee by reason of marriage. morals. vs. it being violative of the clear mandate in Article 136 of the Labor Code with regard to discrimination against married women. Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment. GUALBERTO v MARINDUQUE (1978) FACTS: The company employed plaintiff Olympia Gualberto as a dentist in 1971 while she was still single. 39 Carried to its logical consequences. inter alia: ‘No employer may require female applicants for jobs to enter into pre-employment arrangements that they would be dismissed once they get married and afterwards expect the Courts to sustain such an agreement.LABOR STANDARDS because of the company's policy that married women are not qualified for employment in PT & T. invoking the firm’s policy that stipulated that female employees were regarded to automatically terminate their employment the moment they got married. and conditions that they may deem convenient. The Court of Appeals not only upheld her claim for damages but also awarded exemplary damages. 33 a decision that emanated from the Office of the President. while it is true that the parties to a contract may establish any agreements.

who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment .00 a month. While she was attending to her assigned task and she was hanging her laundry. on January 17. Househelpers APEX v NLRC FACTS: Candida was employed by Apex Mining Company to perform laundry services at its staff house.LABOR STANDARDS RULING No. Under Rule XIII. 1982. As a result of the accident she was not able to continue with her work. In the beginning.00 a month which was ultimately increased to P575. The Court made references to the Civil Code. she was paid on a monthly basis at P250.000. However. the Woman and Child Labor Act and the 1935 Constitution of the Philippines. she accidentally slipped and hit her back on a stone. Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the business of the employer that such househelper or domestic servant may be considered as such as employee. 3. whether male or female.00 which was eventually increased to P5. the terms "househelper" or "domestic servant" are defined as follows: The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person. She was permitted to go on leave for medication. but she refused the offer and preferred to return to work. Section l(b). as amended.00 to persuade her to quit her job. Petitioner did not allow her to return to work and dismissed her. she was paid on a piece rate basis.000. In light of this the Court further stated: ‘The agreement which the appellants want this Court to sustain on appeal is an example of discriminatory chauvinism. Acts which deny equal employment opportunities to women because of their sex are inherently odious and must be struck down. ISSUE: Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the said firm? RULING: Candida is a REGULAR EMPLOYEE of Apex Petitoner’s contention: Private respondent should be treated as a mere househelper or domestic servant and not as a regular employee of petitioner. Book 3 of the Labor Code. De la Rosa offered her the amount of P 2.

gardeners. By the same token. In such instance. the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case. as in its staffhouses for its guest or even for its officers and employees. C. The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company. and ministers exclusively to the personal comfort and enjoyment of the employer's family. they are employees of the company or employer in the business concerned entitled to the privileges of a regular employee. warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee of the employer and not as a mere family househelper or domestic servant as contemplated in Rule XIII. Such definition covers family drivers. The mere fact that the househelper or domestic servant is working within the premises of the business of the employer and in relation to or in connection with its business. houseboy.LABOR STANDARDS thereof. the staffhouses and its premises. as amended. They may not be considered as within the meaning of a "househelper" or "domestic servant" as above-defined by law. or gardener exclusively working in the company.3 The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer's home to minister exclusively to the personal comfort and enjoyment of the employer's family. RA 7877 LIBRES v NLRC (1999) . like petitioner who attends to the needs of the company's guest and other persons availing of said facilities. While it may be true that the nature of the work of a househelper. it cannot be considered to extend to then driver. Book 3 of the Labor Code. domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature. service is being rendered in the staffhouses or within the premises of the business of the employer. whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit. houseboys and other similar househelps. yayas. domestic servants. Section l(b). laundry women. The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer.

LABOR STANDARDS FACTS: Petitioner Carlos G. after deliberation. the MEC finally concluded that petitioner’s acts clearly constituted sexual harassment as charged and recommended petitioner’s suspension for thirty days without pay. an electrical engineer. Seeking to reverse his misfortune. of the Plants Rules and Regulations. concluded that the charges against petitioner constituted a violation of Item 2. . Hynson’s secretary. his immediate superior. The Management Evaluation Committee (MEC). and subsequently to answer clarificatory questions on the matter. Referring to the Manual of the Philippine Daily Inquirer in defining sexual harassment. He claimed that he was denied due process when MEC did not grant his request for audience/confrontation. Labor Arbiter’s decision: Due process was properly observed and that there was a positive finding of sexual harassment to justify petitioner’s suspension. It opined that touching a female subordinates hand and shoulder. private respondents herein. was holding a managerial position with National Steel Corporation (NSC) as Assistant Manager. The Labor Arbiter observed that petitioner should welcome that his penalty was only for suspension of thirty days as opposed to termination imposed in Villarama v. caressing her nape and telling other people that Capiral was the one who hugged and kissed or that she responded to the sexual advances are unauthorized acts that damaged her honor. Capiral. Libres filed a complaint for illegal suspension and unjust discrimination against respondent NSC and its officers. allegedly committed by Libres sometime in May 1992. On 14 August 1993 petitioner submitted his written explanation denying the accusation against him and offering to submit himself for clarificatory interrogation. requesting him to submit a written explanation relative to the charge of sexual harassment made by Susan D. before the Labor Arbiter.. consequently. Table V. petitioner’s admissions approximated the truth. he ruled that the MEC was correct in including that sexual harassment had indeed transpired. Hynson Jr. Libres. On 3 August 1993 he received a Notice of Investigation from Assistant Vice President Isidro F. Hynson Jr. NLRC and Golden Donuts. The Labor Arbiter found that aside from a few facts which were controverted by Capiral in her complaint-affidavit. conducted an internal investigation to which Capiral and Libres were invited to ventilate their respective sides of the issue.

The disparity in the periods of filing the complaints in the two cases did not in any way reduce this case into . the NLRC did not commit any abuse of discretion in affirming the decision of the Labor Arbiter. 7877 was not yet in effect at the time of the occurrence of the act complained of. impaired her rights and privileges under the Labor Code. he cites public respondent’s failure to show that his acts of fondling the hand and massaging the shoulders of Capiral discriminated against her continued employment. Hence. The SC ruled otherwise and hold that it was both fitting and appropriate since it singularly addressed the issue of a managerial employee committing sexual harassment on a subordinate. Having failed to indicate his effort along this line. ISSUE W/N the NLRC erred when it affirmed the decision of the Labor Arbiter finding Libres guilty of sexual harassment and that his suspension was valid. As a rule. It was still being deliberated upon in Congress when petitioner’s case was decided by the Labor Arbiter. In so doing. However. He asserts that his acts did not fall within the definition and criteria of sexual harassment as laid down in Sec. NO RULING Petitioner assails the failure of the NLRC to strictly apply RA No. the Labor Arbiter has to rely on the MEC report and the common connotation of sexual harassment as it is generally understood by the public. Petitioner’s contention: Petitioner primarily disputes the failure of the NLRC to apply RA No. Republic Act No. Issues or arguments must chiefly be raised before the court or agency concerned so as to allow it to pass upon and correct its mistakes without the intervention of a higher court. Petitioner next trains his gun on the reliance by the NLRC on Villarama and claims it was erroneous. or created a hostile. intimidating or offensive environment. 7877 (An Act Declaring Sexual Harassment Unlawful in the Employment. petitioner never raised the applicability of the law in his appeal to the NLRC nor in his motion for reconsideration. Faced with the same predicament. laws shall have no retroactive effect unless otherwise provided. 7877 to the instant case. the NLRC had to agree with the Labor Arbiter. 3 of the law. in determining whether he actually committed sexual harassment. petitioner cannot now belatedly raise its application in this petition. Specifically.LABOR STANDARDS NLRC affirmed the Labor Arbiter’s decision and denied Libres’ motion for reconsideration. Education or Training Environment and for Other Purposes). or except in a criminal case when their application will favor the accused.

in the other case was penalized with termination. Whereas petitioner Libres was only meted a 30-day suspension by the NLRC. removed her blouse and caressed her breasts. he provides a justifiable ground for his dismissal for lack of trust and confidence. As to the second incident of sexual harassment which allegedly took place on September 4. BIBOSO v VILLANUEVA (2007) FACTS Complainant Lucita E. Cipriano Biboso. Biboso further alleged that the respondent molested her again on September 4 of the same year while she was in his chambers. he submitted several documentary evidence of him being in Lebak. And when such moral perversity is perpetrated against his subordinate. petitioner is bound by more exacting work ethics. nay. He claimed that complainant and her father-in-law. on the other hand. Villarama. as a managerial employee.LABOR STANDARDS insignificance. Sultan Kudarat. What she did then is evade the sexual advances of respondent and ran outside the chamber and went home. . 1996. Justice Puno elucidated. 1996. He failed to live up to his higher standard of responsibility when he succumbed to his moral perversity. Sultan Kudarat to “follow up” her case but she was molested by the respondent. and began unzipping her pants. 33. 1996. Lucita claimed that Judge Villanueva embraced and kissed her. and that she could not do anything because of respondent's strength. 1996 in Esperanza because he was in Lebak. On the contrary. the duty of every employer to protect its employees from oversexed superiors. Public respondent therefore is correct in its observation that the Labor Arbiter was in fact lenient in his application of the law and jurisprudence for which petitioner must be grateful and not gripe against. It is the right. Sultan Kudarat from August 19-23. As Mr. He contended that he could not have sexually molested complainant on August 20. it even invited the attention of the Court to focus on sexual harassment as a just and valid cause for termination. trumped up charges against him because he had dismissed two cases filed by complainant and her father-in-law. she went to see Judge Villanueva at the MCTC in Esperanza. claimed that at around 11 o’clock in the morning of August 20. Biboso. To support his alibi. discharging his duties as Acting Presiding Judge of the First Municipal Circuit Trial Court for Lebak-Kalamansig. respondent stated that such could not have been committed as there was no session in Esperanza on that date. claimed that the allegations made by the complainant is false. Judge Villanueva's contention: Respondent.

it took complainant more than a year after the commission of the alleged sexual harassment on September 4. put in serious doubt the veracity of her claims. Nevertheless. the incident does not constitute sexual harassment for. 1997 was conflicting. respondent merely shook her hand. Even complainant's explanation as to why she executed her affidavit-complaint only on October 16. The Court held: ‘In any event.000. There could no other reason for complainant to turn against respondent when the latter had previously helped complainant in her legal problems to the extent of preparing her father-in-law’s complaint-affidavit for estafa against Navarra and even issuing a writ of execution in one case (Civil Case No. 1662-B). Furthermore. 71) and a warrant of arrest in another (Criminal Case No. It was established that a meeting in the courthouse between the Judge and Biboso took place on 27 August 1996 during which the respondent only shook her hand. JACUTIN v PEOPPLE (2002) . Judge Malcampo recommended that respondent be reprimanded and ordered to pay a fine in the amount of P20. that this case was filed to punish him for having dismissed the cases filed by complainant and her father-in-law.00. in contrast to the credible testimonial and documentary evidence presented by respondent. Indeed. in view of his finding that respondent gave assistance to complainant’s father-in-law in filing a case in his sala. especially as the filing of this case came on the heels of the dismissal of the latter. No. as respondent judge claims. Malcampo found complainant’s claim of sexual harassment to be unsubstantiated due to material inconsistencies between complainant’s affidavit-complaint and her testimony during the investigation of the case. however. it appears. The inconsistencies between her testimony and complaint-affidavit. ISSUE Whether or not respondent commit sexual harassment towards complainant. she stated that she had to defer the execution of her complaint because she had to wait for her husband to come back from Manila. 1996 to file the instant administrative complaint. as she herself stated. RULING Complainant thus failed to prove her charges against respondent. She initially stated that she was only able to execute her complaint-affidavit for this case on said late date because rumors had spread by that time that she was respondent’s lover (kabit). During her cross-examination.LABOR STANDARDS RTC: Executive Judge German M.

manager. he would not have been able to take undue liberalities on the person of Juliet had it not been for his high position in the City Health Office of Cagayan de Oro City. Education or Training-related Sexual Harassment Defined. ISSUE: WON Jacutin violated RA 7877. In the case at bar. Yee. Work. conditions. terms. education or training-related sexual harassment is committed by an employer. an impression that he could facilitate Juliets employment. a young 22 year-old woman. reemployment or continued employment of said individual. sexual harassment is committed when: (1) The sexual favor is made as a condition in the hiring or in the employment. Sandiganbayan: Jacutin is guilty of the crime of Sexual Harassment under Republic Act No. . trainor. Jacutin would appear to have conveyed. Juliet Q. or privileges. by his words and actions. coach. professor. request or requirement for submission is accepted by the object of said Act. influence or moral ascendancy over another in a work or training or education environment. requests or otherwise requires any sexual favor from the other. single and fresh graduate in Bachelor of Science in Nursing who was seeking employment in the office of the accused which sexual favor was made as a condition for her employment. Indeed. or in granting said individual favorable compensation. having authority. instructor. deprive or diminish employment opportunities or otherwise adversely affect said employee. regardless of whether the demand. a City Health Officer of Cagayan de Oro City allegedly committed the offense in relation to his official functions by requesting sexual favors from Ms. supervisor. employee. or the refusal to grant the sexual favor results in limiting. Work. segregating or classifying the employee which in any way would discriminate. 3. or any other person who. (a) In a work-related or employment environment. demands. agent of the employer. 7877. promotions.LABOR STANDARDS FACTS Jacutin. teacher. RULING: YES Section 3 of Republic Act 7877 provides: SEC.

.petitioner is ordered to indemnify the offended party. expose her body and allow her private parts to be mashed and stimulated by him. Yee that she should. 7877. particularly Sections 3 and 7 thereof. moral damages and exemplary damages.00 by way of.00 and P20.000. which sexual favor was made as a condition for her employment. Juliet Yee. SC: Jacutin is GUILTY of the crime of Sexual Harassment defined and punished under Republic Act No. RA 7877. with subsidiary imprisonment in case of insolvency. in the amount of P30.00) Pesos.000.LABOR STANDARDS He demanded from Ms.000. respectively. and penalizing him with imprisonment of six (6) months and to pay a fine of Twenty Thousand (P20. Costs against petitioner. his actions fall within the ambit of Sec 3. Hence.