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Labor&Law&1&

Midterm(Reviewer$
$

I.
$
A.

B.

INTRODUCTION$TO$LABOR$LAW$

Capital$and$Labor$
$
Rerum&Novarum$(Pope$Leo$XIII,$15$May$1891)$
&
Laborem&Exercens$(Pope$John$Paul$II,$14$September$1981)$
$
Labor$Law$
$
1.
Definition$
$
Labor&law$$consists$of$statutes,$regulations$and$jurisprudence$governing$the$relation$between$capital$and$labor,$
by$providing$for$certain$employment$standards$and$a$legal$framework$for$negotiating,$adjusting$and$
administering$these$standards$and$other$incidents$of$employment.$
$
2.
Classification$

a.

b.

c.

3.

Labor&Standards$$set$out$the$least$or$basic$terms,$conditions$and$benefits$of$employment$that$
employers$must$provide$and$comply$with$and$to$which$employees$are$entitled$as$a$matter$of$legal$right.&
&
Also:$minimum$requirements$prescribed$by$existing$laws,$statutes,$rules$and$regulations$relating$to$
wages,$hours$of$work,$cost[of[living$allowances,$and$other$monetary$and$welfare$benefits$including$
occupational,$safety,$and$health$standards.$
$
Labor&Relations$$define$the$status,$rights$and$duties,$and$institutional$mechanisms$that$govern$the$
individual$and$collective$interactions$of$the$employers,$employees,$or$their$representatives.&
&
! Labor$standards$can$be$thought$of$as$the$material/substance$to$be$processed$while$labor$relations$
is$the$mechanism$which$processes$the$substance.&
! Labor$$physical$toil;$does$not$exclude$the$application$of$skill.&
! Skill$$familiar$knowledge$of$any$art$or$science;$dexterity$or$readiness$in$execution,$performance$or$
application$of$art$or$science$to$practical$purposes.&
! Work&$covers$all$forms$of$physical$or$mental$exertion,$or$both,$for$the$attainment$of$some$object$
other$than$recreation$or$amusement.&
! Worker$$can$include$self[employed$and$those$under$the$control$of$another,$regardless$or$rank,$
title,$or$nature$of$work;$according$to$Art.$13,$LC,$the$term$includes$even$the$unemployed.&
! Employee$$a$salaried$person$working$for$another$who$controls$or$supervises$the$means,$manner$
or$method$of$doing$the$work.&
$
Social&Legislation$$those$laws$that$provide$particular$kinds$of$protection$or$benefits$to$society$or$
segments$thereof$in$furtherance$of$social$justice.&
&
! Labor$laws$are$necessarily$social$legislation.&
! WRONG&DIFFERENTIATION:$labor$laws$directly$affect$employment$while$social$legislation$governs$
the$effects$of$employment.$Social$legislation$is$just$a$broader$concept.&

$
Social$Justice$as$Justification$

$
1987&CONSTITUTION&
ARTICLE&II&&DECLARATION&OF&PRINCIPLES&AND&STATE&POLICIES&
&
Section&10.$The$State$shall$promote$social$justice$in$all$phases$of$national$development.$
$
Section&18.&The$State$affirms$labor$as$a$primary$social$economic$force.$It$shall$protect$the$rights$of$workers$and$
promote$their$welfare.$
$
Section&20.&The$State$recognizes$the$indispensable$role$of$the$private$sector,$encourages$private$enterprise,$and$
provides$incentives$to$needed$investments.$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$1$of$80$

ARTICLE&III&&SOCIAL&JUSTICE&AND&HUMAN&RIGHTS$
$
Section&1.$The$Congress$shall$give$highest$priority$to$the$enactment$of$measures$that$protect$and$enhance$the$
right$of$all$the$people$to$human$dignity,$reduce$social,$economic,$and$political$inequalities,$and$remove$cultural$
inequities$by$equitably$diffusing$wealth$and$political$power$for$the$common$good.$
$
To$this$end,$the$State$shall$regulate$the$acquisition,$ownership,$use,$and$disposition$of$property$and$its$
increments.$
$
Section&2.&The$promotion$of$social$justice$shall$include$the$commitment$to$create$economic$opportunities$based$
on$freedom$of$initiative$and$self[reliance.$
$
Section&3.&The$State$shall$afford$full$protection$to$labor,$local$and$overseas,$organized$and$unorganized,$and$
promote$full$employment$and$equality$of$employment$opportunities$for$all.$
$
It$shall$guarantee$the$rights$of$all$workers$to$self[organization,$collective$bargaining$and$negotiations,$and$
peaceful$concerted$activities,$including$the$right$to$strike$in$accordance$with$law.$They$shall$be$entitled$to$security$
of$tenure,$humane$conditions$of$work,$and$a$living$wage.$They$shall$also$participate$in$policy$and$decision[making$
processes$affecting$their$rights$and$benefits$as$may$be$provided$by$law.$
$
The$State$shall$promote$the$principle$of$shared$responsibility$between$workers$and$employers$and$the$
preferential$use$of$voluntary$modes$in$settling$disputes,$including$conciliation,$and$shall$enforce$their$mutual$
compliance$therewith$to$foster$industrial$peace.$
$
The$State$shall$regulate$the$relations$between$workers$and$employers,$recognizing$the$right$of$labor$to$its$just$
share$in$the$fruits$of$production$and$the$right$of$enterprises$to$reasonable$returns$to$investments,$and$to$
expansion$and$growth.$
$
a.

b.

Ish$Guidote$

Definition/Balancing$of$Interests$
$
Calalang&v.&Williams$(70$Phil.$726,$1940)$
Social$justice$is$neither$communism$nor$despotism,$nor$atomism,$nor$anarchy,$but$the$humanization$
of$laws$and$the$equalization$of$social$and$economic$forces$by$the$State$so$that$justice$in$its$rational$and$
objectively$secular$conception$may$at$least$be$approximated.$Social$justice$means$the$promotion$of$the$
welfare$of$all$the$people,$the$adoption$by$the$Government$of$measures$calculated$to$insure$economic$
stability$of$all$the$competent$elements$of$society,$through$the$maintenance$of$a$proper$economic$and$
social$equilibrium$in$the$interrelations$of$the$members$of$the$community,$constitutionally,$through$the$
adoption$of$measures$legally$justifiable,$or$extra[constitutionally,$through$the$exercise$of$powers$
underlying$the$existence$of$all$governments$on$the$time[honored$principle$of$salus(populi(est(suprema(
lex.$
$
! Necessity$of$interdependence$among$diverse$units$of$a$society.$
! Protection$must$be$equally/evenly$extended$to$all.$
! Greatest$good$to$the$greatest$number.$
$
Tirazona&v.&Philippine&EDS&TechnoTService,&Inc.$(576$SCRA$625,$2009)$
The$policy$of$social$justice$is$not$intended$to$countenance$wrongdoing$simply$because$it$is$committed$
by$the$underprivileged.$At$best$it$may$mitigate$the$penalty$but$it$certainly$will$not$condone$the$offense.$
Compassion$for$the$poor$is$an$imperative$of$every$humane$society$but$only$when$the$recipient$is$not$a$
rascal$claiming$an$undeserved$privilege.$Social$justice$cannot$be$permitted$to$be$[a]$refuge$of$scoundrels$
any$more$than$can$equity$be$an$impediment$to$the$punishment$of$the$guilty.$Those$who$invoke$social$
justice$may$do$so$only$if$their$hands$are$clean$and$their$motives$blameless$and$not$simply$because$they$
happen$to$be$poor.$This$great$policy$of$our$Constitution$is$not$meant$for$the$protection$of$those$who$
have$proved$they$are$not$worthy$of$it,$like$the$workers$who$have$tainted$the$cause$of$labor$with$the$
blemishes$of$their$own$character.$
$
! NO$separation$pay$shall$be$awarded$where$an$employee$is$dismissed$for$serious$misconduct$
reflecting$on$his$moral$character.$
$
Foundation:$Police$Power$and$State$Protection$
$
! Social&justice$may$be$the$raison(dtre,$but$police&power$is$basis$or$foundation$of$labor$laws.$

Labor$Law$1$$Midterm$Reviewer$|$Page$2$of$80$

!
!

Police&Power$$power$of$the$government$to$enact$laws,$within$constitutional$limits,$to$promote$the$
order,$safety,$health,$morals,$and$general$welfare$of$society.$
An$individuals$right$to$pursue$a$business,$occupation,$or$profession$is$subject$to$the$governments$
exercise$of$police$power.$

c.

St.&Lukes&Medical&Center&Employees&AssociationTAFW&v.&NLRC$(517$SCRA$677,$2007)$
An$employees$dismissal$following$her$failure$to$earn$a$passing$mark$for$the$Board$Examinations$for$X[
Ray$Technicians$is$VALID.$The$imposition$of$a$Board$exam$requirement$in$RA$7431$is$a$valid$exercise$of$
police$power$as$it$is$a$reasonable$method$of$protecting$public$health$and$safety.$It$should$be$
remembered$that$radiology$is$a$learned$profession$requiring$scientific$and$technical$knowledge.$Thus,$
the$need$to$regulate$the$profession$is$imperative.$St.$Lukes,$as$the$employer,$should$not$be$penalized$
for$situations$where$it$had$no$participation$or$control.$
$
Limits$of$Use$
$
! Police$power$itself$has$to$respect$the$Constitution.$It$cannot$grow$faster$than$the$fundamental$law.$
! People(v.(Pomar:$police$power$is$both$subject$to$and$is$controlled$by$the$paramount$authority$of$the$
Constitution.$It$will$not$be$permitted$to$violate$rights$secured$and$guaranteed$or$interfere$with$the$
execution$of$powers$and$rights$guaranteed$to$the$people.$

$
PLDT&v.&NLRC$(164$SCRA$671,$1988)$
We$hold$that$henceforth$separation$pay$shall$be$allowed$as$a$measure$of$social$justice$only$in$those$
instances$where$the$employee$is$validly$dismissed$for$causes$other$than$serious$misconduct$or$those$
reflecting$on$his$moral$character.$Where$the$reason$for$the$valid$dismissal$is,$for$example,$habitual$
intoxication$or$an$offense$involving$moral$turpitude,$like$theft$or$illicit$sexual$relations$with$a$fellow$
worker,$the$employer$may$not$be$required$to$give$the$dismissed$employee$separation$pay,$of$financial$
assistance,$or$whatever$other$name$it$is$called,$on$the$ground$of$social$justice.$A$contrary$rule$would,$as$
the$petitioner$correctly$argues,$have$the$effect$of$rewarding$rather$than$punishing$the$erring$employee$
for$his$offense.$
4.

Ish$Guidote$

$
Legal$Bases;$Sources$of$Rights$and$Benefits$
$
a.
International$Instruments$
$
INTERNATIONAL&COVENANT&ON&CIVIL&AND&POLITICAL&RIGHTS,&23&March&1976$
$
Article&22$
1. Everyone$shall$have$the$right$to$freedom$of$association$with$others,$including$the$right$to$form$and$
join$trade$unions$for$the$protection$of$his$interests.$
$
2. No$restrictions$may$be$placed$on$the$exercise$of$this$right$other$than$those$which$are$prescribed$by$
law$and$which$are$necessary$in$a$democratic$society$in$the$interests$of$national$security$or$public$
safety,$public$order$(ordre$public),$the$protection$of$public$health$or$morals$or$the$protection$of$the$
rights$and$freedoms$of$others.$This$article$shall$not$prevent$the$imposition$of$lawful$restrictions$on$
members$of$the$armed$forces$and$of$the$police$in$their$exercise$of$this$right.$
$
3. Nothing$in$this$article$shall$authorize$States$Parties$to$the$International$Labor$Organization$
Convention$of$1948$concerning$Freedom$of$Association$and$Protection$of$the$Right$to$Organize$to$
take$legislative$measures$which$would$prejudice,$or$to$apply$the$law$in$such$a$manner$as$to$
prejudice,$the$guarantees$provided$for$in$that$Convention.$
$
INTERNATIONAL&COVENANT&ON&ECONOMIC,&SOCIAL&AND&CULTURAL&RIGHTS,&3&January&1976&
&
Article&6$
1. The$States$Parties$to$the$present$Covenant$recognize$the$right$to$work,$which$includes$the$right$of$
everyone$to$the$opportunity$to$gain$his$living$by$work$which$he$freely$chooses$or$accepts,$and$will$
take$appropriate$steps$to$safeguard$this$right.$
$
2. The$steps$to$be$taken$by$a$State$Party$to$the$present$Covenant$to$achieve$the$full$realization$of$this$
right$shall$include$technical$and$vocational$guidance$and$training$programmes,$policies$and$
techniques$to$achieve$steady$economic,$social$and$cultural$development$and$full$and$productive$
employment$under$conditions$safeguarding$fundamental$political$and$economic$freedoms$to$the$
individual.$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$3$of$80$

Article&7$
The$States$Parties$to$the$present$Covenant$recognize$the$right$of$everyone$to$the$enjoyment$of$just$and$
favorable$conditions$of$work$which$ensure,$in$particular:$
(a) Remuneration$which$provides$all$workers,$as$a$minimum,$with:$
(iii) Fair$wages$and$equal$remuneration$for$work$of$equal$value$without$distinction$of$any$kind,$in$
particular$women$being$guaranteed$conditions$of$work$not$inferior$to$those$enjoyed$by$men,$
with$equal$pay$for$equal$work;$
(iv) A$decent$living$for$themselves$and$their$families$in$accordance$with$the$provisions$of$the$
present$Covenant;$
$
(b) Safe$and$healthy$working$conditions;$
$
(c) Equal$opportunity$for$everyone$to$be$promoted$in$his$employment$to$an$appropriate$higher$level,$
subject$to$no$considerations$other$than$those$of$seniority$and$competence;$
$
(d) Rest,$leisure$and$reasonable$limitation$of$working$hours$and$periodic$holidays$with$pay,$as$well$as$
remuneration$for$public$holidays.$
&
Article&8$
1. The$States$Parties$to$the$present$Covenant$undertake$to$ensure:$
(a) The$right$of$everyone$to$form$trade$unions$and$join$the$trade$union$of$his$choice,$subject$only$
to$the$rules$of$the$organization$concerned,$for$the$promotion$and$protection$of$his$economic$
and$social$interests.$No$restrictions$may$be$placed$on$the$exercise$of$this$right$other$than$
those$prescribed$by$law$and$which$are$necessary$in$a$democratic$society$in$the$interests$of$
national$security$or$public$order$or$for$the$protection$of$the$rights$and$freedoms$of$others;$
(b) The$right$of$trade$unions$to$establish$national$federations$or$confederations$and$the$right$of$
the$latter$to$form$or$join$international$trade[union$organizations;$
(c) The$right$of$trade$unions$to$function$freely$subject$to$no$limitations$other$than$those$
prescribed$by$law$and$which$are$necessary$in$a$democratic$society$in$the$interests$of$national$
security$or$public$order$or$for$the$protection$of$the$rights$and$freedoms$of$others;$
(d) The$right$to$strike,$provided$that$it$is$exercised$in$conformity$with$the$laws$of$the$particular$
country.$
$
2. This$article$shall$not$prevent$the$imposition$of$lawful$restrictions$on$the$exercise$of$these$rights$by$
members$of$the$armed$forces$or$of$the$police$or$of$the$administration$of$the$State.$
$
3. Nothing$in$this$article$shall$authorize$States$Parties$to$the$International$Labor$Organization$
Convention$of$1948$concerning$Freedom$of$Association$and$Protection$of$the$Right$to$Organize$to$
take$legislative$measures$which$would$prejudice,$or$apply$the$law$in$such$a$manner$as$would$
prejudice,$the$guarantees$provided$for$in$that$Convention.$
&
Article&9$
The$States$Parties$to$the$present$Covenant$recognize$the$right$of$everyone$to$social$security,$including$
social$insurance.$
$
INTERNATIONAL&CONVENTION&ON&THE&ELIMINATION&OF&ALL&FORMS&OF&DISCRIMINATION&AGAINST&
WOMEN,&18&December&1979&
&
1. States$Parties$shall$take$all$appropriate$measures$to$eliminate$discrimination$against$women$in$the$
field$of$employment$in$order$to$ensure,$on$a$basis$of$equality$of$men$and$women,$the$same$rights,$
in$particular:$
(a) The$right$to$work$as$an$inalienable$right$of$all$human$beings;$
(b) The$right$to$the$same$employment$opportunities,$including$the$application$of$the$same$criteria$
for$selection$in$matters$of$employment;$
(c) The$right$to$free$choice$of$profession$and$employment,$the$right$to$promotion,$job$security$
and$all$benefits$and$conditions$of$service$and$the$right$to$receive$vocational$training$and$
retraining,$including$apprenticeships,$advanced$vocational$training$and$recurrent$training;$
(d) The$right$to$equal$remuneration,$including$benefits,$and$to$equal$treatment$in$respect$of$work$
of$equal$value,$as$well$as$equality$of$treatment$in$the$evaluation$of$the$quality$of$work;$
(e) The$right$to$social$security,$particularly$in$cases$of$retirement,$unemployment,$sickness,$
invalidity$and$old$age$and$other$incapacity$to$work,$as$well$as$the$right$to$paid$leave;$
(f) The$right$to$protection$of$health$and$to$safety$in$working$conditions,$including$the$
safeguarding$of$the$function$of$reproduction.$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$4$of$80$

2.

3.

b.

Ish$Guidote$

$
In$order$to$prevent$discrimination$against$women$on$the$grounds$of$marriage$or$maternity$and$to$
ensure$their$effective$right$to$work,$States$Parties$shall$take$appropriate$measures:$
(a) To$prohibit,$subject$to$the$imposition$of$sanctions,$dismissal$on$the$grounds$of$pregnancy$or$of$
maternity$leave$and$discrimination$in$dismissals$on$the$basis$of$marital$status;$
(b) To$introduce$maternity$leave$with$pay$or$with$comparable$social$benefits$without$loss$of$
former$employment,$seniority$or$social$allowances;$
(c) To$encourage$the$provision$of$the$necessary$supporting$social$services$to$enable$parents$to$
combine$family$obligations$with$work$responsibilities$and$participation$in$public$life,$in$
particular$through$promoting$the$establishment$and$development$of$a$network$of$child[care$
facilities;$
(d) To$provide$special$protection$to$women$during$pregnancy$in$types$of$work$proved$to$be$
harmful$to$them.$
$
Protective$legislation$relating$to$matters$covered$in$this$article$shall$be$reviewed$periodically$in$the$
light$of$scientific$and$technological$knowledge$and$shall$be$revised,$repealed$or$extended$as$
necessary.$

$
International&School&Alliance&of&Educators&v.&Quisumbing$(333$SCRA$13,$2000)$
The$unequal$treatment$accorded$to$local[hires$compared$to$foreign[hires$is$unjustified.$No$less$than$the$
Constitution$prescribes$that$Congress$shall$give$highest$priority$to$the$enactment$of$measures$that$
protect$and$enhance$the$right$of$all$people$to$human$dignity,$reduce$social,$economic,$and$political$
inequalities.$(Art.$XIII)$In$the$same$vein,$international$law$likewise$proscribes$discrimination.$The$
Universal$Declaration$of$Human$Rights,$the$International$Covenant$on$Economic,$Social,$and$Cultural$
Rights,$the$International$Convention$on$the$Elimination$of$All$Forms$of$Racial$Discrimination,$the$
Convention$against$Discrimination$in$Education,$the$Convention$(No.$111)$Concerning$Discrimination$in$
Respect$of$Employment$and$Occupationall$embody$the$general$principle$against$discrimination,$the$
very$antithesis$of$fairness$and$justice.$We$have$integrated$these$principles$into$our$Constitution$and$
other$statutes.$
$
1987$Constitution$
$
ARTICLE&II&&DECLARATION&OF&PRINCIPLES&AND&STATE&POLICIES&
$
Section&5.&The$maintenance$of$peace$and$order,$the$protection$of$life,$liberty,$and$property,$and$
promotion$of$the$general$welfare$are$essential$for$the$enjoyment$by$all$the$people$of$the$blessings$of$
democracy.$
$
Section&9.&The$State$shall$promote$a$just$and$dynamic$social$order$that$will$ensure$the$prosperity$and$
independence$of$the$nation$and$free$the$people$from$poverty$through$policies$that$provide$adequate$
social$services,$promote$full$employment,$a$rising$standard$of$living,$and$an$improved$quality$of$life$for$
all.$
$
Section&10.&The$State$shall$promote$social$justice$in$all$phases$of$national$development.$
$
Section&11.&The$State$values$the$dignity$of$every$human$person$and$guarantees$full$respect$for$human$
rights.$
$
Section&13.&The$State$recognizes$the$vital$role$of$the$youth$in$nation[building$and$shall$promote$and$
protect$their$physical,$moral,$spiritual,$intellectual,$and$social$well[being.$It$shall$inculcate$in$the$youth$
patriotism$and$nationalism,$and$encourage$their$involvement$in$public$and$civic$affairs.$
$
Section&14.&The$State$recognizes$the$role$of$women$in$nation[building,$and$shall$ensure$the$fundamental$
equality$before$the$law$of$women$and$men.$
$
Section&18.&The$State$affirms$labor$as$a$primary$social$economic$force.$It$shall$protect$the$rights$of$
workers$and$promote$their$welfare.$
ARTICLE&III&&BILL&OF&RIGHTS$
$
Section&1.&No$person$shall$be$deprived$of$life,$liberty,$or$property$without$due$process$of$law,$nor$shall$
any$person$be$denied$the$equal$protection$of$the$laws.$
$
Section&4.&No$law$shall$be$passed$abridging$the$freedom$of$speech,$of$expression,$or$of$the$press,$or$the$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$5$of$80$

c.
$

d.

right$of$the$people$peaceably$to$assemble$and$petition$the$government$for$redress$of$grievances.$
$
Section&8.$The$right$of$the$people,$including$those$employed$in$the$public$and$private$sectors,$to$form$
unions,$associations,$or$societies$for$purposes$not$contrary$to$law$shall$not$be$abridged.$
$
Section&18.$(1)$No$person$shall$be$detained$solely$by$reason$of$his$political$beliefs$and$aspirations.$
$
ARTICLE&XIII&&SOCIAL&JUSTICE&AND&HUMAN&RIGHTS&
&
Section&1.&The$Congress$shall$give$highest$priority$to$the$enactment$of$measures$that$protect$and$
enhance$the$right$of$all$the$people$to$human$dignity,$reduce$social,$economic,$and$political$inequalities,$
and$remove$cultural$inequities$by$equitably$diffusing$wealth$and$political$power$for$the$common$good.$
$
To$this$end,$the$State$shall$regulate$the$acquisition,$ownership,$use,$and$disposition$of$property$and$its$
increments.$
$
Section&3.&The$State$shall$afford$full$protection$to$labor,$local$and$overseas,$organized$and$unorganized,$
and$promote$full$employment$and$equality$of$employment$opportunities$for$all.$
$
It$shall$guarantee$the$rights$of$all$workers$to$self[organization,$collective$bargaining$and$negotiations,$
and$peaceful$concerted$activities,$including$the$right$to$strike$in$accordance$with$law.$They$shall$be$
entitled$to$security$of$tenure,$humane$conditions$of$work,$and$a$living$wage.$They$shall$also$participate$
in$policy$and$decision[making$processes$affecting$their$rights$and$benefits$as$may$be$provided$by$law.$
$
The$State$shall$promote$the$principle$of$shared$responsibility$between$workers$and$employers$and$the$
preferential$use$of$voluntary$modes$in$settling$disputes,$including$conciliation,$and$shall$enforce$their$
mutual$compliance$therewith$to$foster$industrial$peace.$
$
The$State$shall$regulate$the$relations$between$workers$and$employers,$recognizing$the$right$of$labor$to$
its$just$share$in$the$fruits$of$production$and$the$right$of$enterprises$to$reasonable$returns$to$
investments,$and$to$expansion$and$growth.$
$
Section&14.$The$State$shall$protect$working$women$by$providing$safe$and$healthful$working$conditions,$
taking$into$account$their$maternal$functions,$and$such$facilities$and$opportunities$that$will$enhance$their$
welfare$and$enable$them$to$realize$their$full$potential$in$the$service$of$the$nation.$
$
Labor$Code$and$Its$Implementing$Rules$and$Regulations$
$
New$Civil$Code$
Article&19.&Every$person$must,$in$the$exercise$of$his$rights$and$in$the$performance$of$his$duties,$act$with$
justice,$give$everyone$his$due,$and$observe$honesty$and$good$faith.$
$
Article&21.&Any$person$who$willfully$causes$loss$or$injury$to$another$in$manner$that$is$contrary$to$morals,$
good$customs$or$public$policy$shall$compensate$the$latter$for$the$damage.$
$
Article&1700.&The$relations$between$capital$and$labor$are$not$merely$contractual.$They$are$so$impressed$
with$public$interest$that$labor$contracts$must$yield$to$the$common$good.$Therefore,$such$contracts$are$
subject$to$the$special$laws$on$labor$unions,$collective$bargaining,$strikes$and$lockouts,$closed$shop,$
wages,$working$conditions,$hours$of$labor$and$similar$subjects.$
&
Article&1701.&Neither$capital$nor$labor$shall$act$oppressively$against$the$other,$or$impair$the$interest$or$
convenience$of$the$public.$

$
e.

Collective$Bargaining$Agreement$
$
CIVIL&CODE&OF&THE&PHILIPPINES$
$
Article&1305.&A$contract$is$a$meeting$of$minds$between$two$persons$whereby$one$binds$himself,$with$
respect$to$the$other,$to$give$something$or$to$render$some$service.$(1254a)$
&
Article&1306.&The$contracting$parties$may$establish$such$stipulations,$clauses,$terms$and$conditions$as$
they$may$deem$convenient,$provided$they$are$not$contrary$to$law,$morals,$good$customs,$public$order,$

Ish$Guidote$

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f.

g.

$
A.

$
$

B.

or$public$policy.$(1255a)$
$
Dole&Philippines,&Inc.&v.&Pawis&ng&Makabayang&Obrero$(395$SCRA$112,$2003)$
Dole$cannot$deprive$its$employees$of$the$stipulated$meal$allowance/free$meals$in$the$guise$of$exercising$
its$management$prerogatives.$Such$exercise$is$limited$by$(1)$law,$and$(2)$the$applicable$CBA.$The$CBA$
clearly$states$that$the$free$meals$shall$be$granted$after$3$hours$of$actual$overtime$work.$When$the$
terms$of$a$contract$are$clear$and$unambiguous,$the$literal$meaning$shall$prevail.$There$is$no$room$for$
construction.$
$
Past$Practices$
$
American&Wire&and&Cable&Daily&Rated&Employees&Union&v.&American&Wire&and&Cable&Co.,&Inc.$(457$SCRA$
684,$2005)$
The$grant$of$a$bonus$is$not$a$demandable$obligation$unless$it$is$expressly$agreed$upon$or$has$become$a$
long$and$regular$practice$by$the$employer.$For$it$to$become$a$customary$practice,$it$must$be$given$
consistently,$deliberately,$and$unconditionally$by$the$employer.$In$this$case,$it$was$not$sufficiently$
shown$to$the$satisfaction$of$the$Court$that$the$bonuses$were$in$fact$being$granted$by$management$
since$time$immemorial.$Neither$did$such$bonuses$form$part$of$the$employees$compensation,$as$the$
same$was$not$mentioned$in$the$CBA.$The$respondent$gave$the$bonuses$out$of$generosity$and$
munificence,$in$excess$of$what$the$law$requires.$
Company$Policies$
$
China&Banking&Corporation&v.&Borromeo$(440$SCRA$621,$2004)$
Company$rules,$regulations$and$policies$are$binding$and$valid$between$the$employer$and$employee$so$
long$as$they$are$not$contrary$to$law,$morals,$good$customs,$public$order,$or$public$policy.$Management$
was$merely$exercising$its$prerogative$when$it$chose$to$withhold$Borromeos$separation$pay$and$benefits$
to$guarantee$the$restitution$of$its$losses.$Neither$did$it$err$in$imposing$disciplinary$sanctions$on$
respondent$when$the$latter$was$found$to$have$violated$the$Banks$Code$of$Ethics.$
$
II.
LABOR$CODE$OF$THE$PHILIPPINES$

Brief$History$
$

Drafting$began$in$1968$under$the$direction$of$Blas$Ople,$known$as$the$Father$of$the$Labor$Code.$

Objectives:$
o Consolidate$around$60$pieces$of$labor$legislation;$and$
o Reorient$them$to$the$needs$of$economic$development$and$justice.$

Ratified$by$a$National$Tripartite$Congress$on$April$28,$1973.$

Submitted$to$Pres.$Marcos$on$May$1,$1973.$It$underwent$several$revisions.$

Signed$into$law$as$PD$442$on$May$1,$1974.$

Took$effect$6$months$after$(as$per$Art.$2),$on$Nov.$1,$1974.$
General$Provisions$
1.

2.

Decree$Title$
$
Article&1.$Name(of(Decree.$$This$Decree$shall$be$known$as$the$Labor$Code$of$the$Philippines.$
$
Effectivity$
$
Article&2.(Date(of(Effectivity.$$This$Code$shall$take$effect$six$(6)$months$after$its$promulgation.$

$
3.

Ish$Guidote$

Policy$Declaration$
$
Article&3.$Declaration(of(basic(policy.$$The$State$shall$afford$protection$to$labor,$promote$full$employment,$
ensure$equal$work$opportunities$regardless$of$sex,$race$or$creed$and$regulate$the$relations$between$workers$and$
employers.$The$State$shall$assure$the$rights$of$workers$to$self[organization,$collective$bargaining,$security$of$
tenure,$and$just$and$humane$conditions$of$work.$
$

Labor$laws$are$devices$for$social$equity.$

A$labor$laws$value$is$its$contribution$to$national$growth$in$the$context$of$social$justice.$

Goals$of$the$national$economy:$
$

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$
4.

1. Sustained$increase$in$production$of$goods$and$services;$
2. Expanding$productivity$"$raise$the$quality$of$life.$
The$basic$policy$is$not$meant$to$favor$labor$to$prejudice$capital.$
They$are$interdependent.$One$is$inutile$without$the$other.$
BASIC$POLICY:$to$balance/coordinate$the$rights$of$both$workers$and$employers.$

Construction$in$favor$of$labor$
$
Article&4.&Construction(in(favor(of(labor.$$All$doubts$in$the$implementation$and$interpretation$of$the$provisions$of$
this$Code,$including$its$implementing$rules$and$regulations,$shall$be$resolved$in$favor$of$labor.$
$

The$workingmans$welfare$should$be$the$primordial/paramount$consideration.$

Policy:$to$extend$applicability$to$a$greater$number$of$employees$(maximum$and$full$protection$to$labor).$

SC$adopts$a$liberal$approach$in$favoring$the$exercise$of$labor$rights.$

Since$the$employer$necessarily$stands$on$higher$footing,$the$law$must:$
1. Raise$the$laborer$to$equal$footing$in$bargaining$relations;$and$
2. Shield$him$from$the$employers$abuses.$
MANAGEMENT&RIGHTS&AND&PREROGATIVES$

Subject$to$limitations$provided$by:$
o Law;$
o Collective$Bargaining$Agreement;$and$
o General$principles$of$fair$play$and$justice.$
$
1. RIGHT&TO&RETURN&ON&INVESTMENT&

Without$profit,$there$would$be$no$employment$for$the$laborers.$

The$balance$in$favor$of$the$workingman$should$be$tilted$without$being$blind$to$the$concomitant$right$of$
the$employer$to$the$protection$of$his$property.$
$
2. RIGHT&TO&PRESCRIBE&RULES&
Such$rules$become$part$of$the$contract$between$the$employer$and$employee.&
They$remain$valid$and$binding$unless$they$are$contrary$to$law,$morals,$good$customs,$public$order,$or$
public$policy.&
&
3. RIGHT&TO&SELECT&EMPLOYEES&

Employers$exercise$full$freedom$to$select$except$as$restricted$by$statute$or$valid$contract,$at$a$wage$and$
under$conditions$agreeable$to$them.$

State$cannot$interfere$with$liberty$to$contract$except$in$the$exercise$of$police$power.$
$
4. RIGHT&TO&TRANSFER&OR&DISCHARGE&EMPLOYEES&

The$exercise$of$this$right$is$upheld$provided$the$transfer$or$dismissal$is$not$abused$but$is$done$in$good$
faith$and$is$due$to$forces$beyond$human$control.$

$
Peaflor&v.&Outdoor&Clothing&Manufacturing&Corporation$(618$SCRA$208,$2010)$
When$an$employee$is$forced$to$resign$due$to$harsh,$hostile$and$unfavorable$working$conditions$set$by$the$
employer,$such$employee$is$deemed$constructively$dismissed.$In$this$case,$while$the$primary$issue$concerned$the$
voluntariness$of$Peaflors$resignation,$the$Court$declared$that$whatever$doubts$it$may$have$must$be$resolved$in$
favor$of$the$laborer.$This$is$in$accordance$with$the$dictate$of$the$law.$

$
5.

Rule[making$Power$
$
Article&5.&Rules(and(regulations.$$The$Department$of$Labor$and$other$government$agencies$charged$with$the$
administration$and$enforcement$of$this$Code$or$any$of$its$parts$shall$promulgate$the$necessary$implementing$
rules$and$regulations.$Such$rules$and$regulations$shall$become$effective$fifteen$(15)$days$after$announcement$of$
their$adoption$in$newspapers$of$general$circulation.$

A$rule$promulgated$by$an$administrative$body$is$void$if$issued$in$excess$of$its$authority.$

A$rule$cannot$take$away$a$benefit$granted$by$statute.$Such$rule$would$be$ultra(vires$and$void.$
$
Kapisanang&Manggagawang&Pinagyakap&v.&NLRC$(152$SCRA$96,$1987)$
The$Court,$in$Philippine(Apparel(Workers(Union(v.(NLRC$previously$declared$void$Paragraph$(k),$Section$1$of$the$
Rules$Implementing$PD$1123.$However,$in$this$case,$the$Labor$Arbiter$ruled$that$pursuant$to$such$paragraph,$
petitioners$P1.33$daily$wage$increase$could$be$credited$to$and$deducted$from$the$P60$COLA$required$by$PD$1123.$
Ish$Guidote$

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SC$had$to$reverse$the$ruling$to$conform$to$the$decision$in$Philippine(Apparel.$In$so$doing,$it$reminded$the$parties$of$
the$effect$of$the$courts$prior$declaration$of$nullity$with$regard$to$paragraph$(k).$It$adds$an$exemption$not$found$
in$the$law$by$including$those$who$have$granted$in$addition$to$the$allowance$under$PD$525,$at$least$P60$monthly.$
The$law$exempts$only$distressed$employers.$That$part$of$the$rule$is$ultra(vires$and$void.$Private$respondents,$
therefore,$have$no$basis$for$claiming$an$exemption.$
$
6.

Technical$rules$not$binding$
$
Article&221.&Technical(rules(not(binding(and(prior(resort(to(amicable(settlement.$$In$any$proceeding$before$the$
Commission$or$any$of$the$Labor$Arbiters,$the$rules$of$evidence$prevailing$in$courts$of$law$or$equity$shall$not$be$
controlling,$and$it$is$the$spirit$and$intention$of$this$Code$that$the$Commission$and$its$members$and$the$Labor$
Arbiters$shall$use$every$and$all$reasonable$means$to$ascertain$the$facts$in$each$case$speedily$and$objectively,$
without$regard$to$technicalities$of$law$or$procedure,$all$in$the$interest$of$due$process.$In$any$proceeding$before$
the$Commission$or$any$Labor$Arbiter,$the$parties$may$be$represented$by$legal$counsel$but$it$shall$be$the$duty$of$
the$Chairman,$any$Presiding$Commissioner$or$Commissioner$or$any$Labor$Arbiter$to$exercise$complete$control$of$
the$proceedings$at$all$stages.$
$

Administrative$and$quasi[judicial$bodies,$like$the$NLRC,$are$not$bound$by$the$technical$rules$of$procedure$in$
the$adjudication$of$cases.$

Quantum$of$evidence$required:$Substantial&evidence$$such$relevant$evidence$as$a$reasonable$mind$might$
accept$as$adequate$to$support$a$conclusion.$
&
Santos&v.&Litton&Mills,&Inc.$(652$SCRA$510,$2011)$
The$Court$of$Appeals$denied$petitioners$appeal$on$the$ground$that$she$failed$to$indicate$the$addresses$of$the$
parties$in$her$appeal.$Moreover,$she$did$not$state$in$the$Verification$and$Certification$of$Non[forum$Shopping$that$
there$were$no$other$pending$cases$between$the$parties$at$the$time$of$filing.$The$Supreme$Court$held$that$she$
should$be$deemed$in$substantial$compliance$with$the$requirements.$Firstly,$she$stated$in$her$petition$that$the$
parties$may$be$served$through$counsel.$Secondly,$she$rectified$the$errors$in$her$Verification$and$Certification.$It$
was$thus$error$for$the$CA$to$dismiss$her$appeal$on$technical$grounds.$Her$subsequent$and$substantial$compliance$
call$for$relaxation$of$the$rules.$Technicalities$may$be$brushed$aside$to$serve$the$interests$of$justice.$
&
Building&Care&Corporation&v.&Macaraeg$(687$SCRA$644,$2012)$
In$this$case,$the$CA$liberally$applied$rules$of$procedure$and$declared$respondent$illegally$dismissed.$However,$
there$was$enough$evidence$to$show$that$she$had$problems$with$tardiness,$debt,$and$sleeping$on$the$job.$The$SC$
held$that$the$CA$should$have$dismissed$Macaraegs$appeal$outright.$The$general$rule$is$that$rules$of$procedure$
must$be$complied$with$for$the$orderly$administration$of$justice.$In$Daidoku(Electronics,$the$Court$held,$There$
must$be$reasonable$cause$justifying$non[compliance$with$the$rules$and$must$convince$the$Court$that$outright$
dismissal$of$the$petition$would$defeat$the$substantial$administration$of$justice.$Macaraeg$failed$to$cite$any$
extraordinary$circumstance$for$failure$to$abide$by$the$rules$for$filing$an$appeal.$It$is$a$well[settled$rule$that$the$
negligence$and$mistakes$of$the$lawyer$bind$the$client.$Private$respondent$was$not$deprived$of$her$opportunity$to$
be$heard.$
$
Ramirez&v.&Mar&Fishing&Co.,&Inc.$(672$SCRA$136,$2012)$
Petitioners$are$former$employees$of$respondent.$They$appealed$an$adverse$decision$to$the$CA,$which$was$
dismissed$because$only$3$of$the$228$petitioners$signed$the$Verification$and$Certification$of$Non[forum$Shopping.$
They$subsequently$filed$a$Manifestation$wherein$an$additional$161$petitioners$signed$the$Verification.$The$
appellate$court$however$refused$to$reconsider.$The$SC$held$that$the$CA$did$not$err$in$dismissing$petitioners$
appeal.$It$was$unmeritorious$in$both$procedural$and$substantive$aspects.$The$general$rule$is$that$subsequent$
compliance$will$not$excuse$a$partys$failure$to$comply$at$the$first$instance.$Procedural$rules$cannot$be$brushed$
aside$as$mere$technicalities.$

7.

Applicability$
$
Article&6.&Applicability.$$All$rights$and$benefits$granted$to$workers$under$this$Code$shall,$except$as$may$
otherwise$be$provided$herein,$apply$alike$to$all$workers,$whether$agricultural$or$non[agricultural.$(As$amended$by$
Presidential$Decree$No.$570[A,$November$1,$1974).$
$
Article&276.&Government(employees.$$The$terms$and$conditions$of$employment$of$all$government$employees,$
including$employees$of$government[owned$and$controlled$corporations,$shall$be$governed$by$the$Civil$Service$
Law,$rules$and$regulations.$Their$salaries$shall$be$standardized$by$the$National$Assembly$as$provided$for$in$the$
new$constitution.$However,$there$shall$be$no$reduction$of$existing$wages,$benefits$and$other$terms$and$
conditions$of$employment$being$enjoyed$by$them$at$the$time$of$the$adoption$of$this$Code.$
$

Ish$Guidote$

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Employees$of$GOCCs$incorporated$under$the$general$Corporation$Code$are$covered$by$the$provisions$of$the$
Labor$Code.$
If$the$GOCC$has$an$original$charter,$its$employees$are$covered$by$Civil$Service$laws,$rules,$and$regulations.$
Government$agencies$and$instrumentalities$have$no$juridical$identity$separate$from$that$of$the$government,$
therefore$its$employees$are$also$subject$to$Civil$Service$laws.$

$
8.

Ish$Guidote$

Enforcement$and$Sanctions$
$
Article&217.&Jurisdiction(of(Labor(Arbiters(and(the(Commission.$$$
(a) Except$as$otherwise$provided$under$this$Code,$the$Labor$Arbiters$shall$have$original$and$exclusive$jurisdiction$
to$hear$and$decide,$within$thirty$(30)$calendar$days$after$the$submission$of$the$case$by$the$parties$for$
decision$without$extension,$even$in$the$absence$of$stenographic$notes,$the$following$cases$involving$all$
workers,$whether$agricultural$or$non[agricultural:$
(1) Unfair$labor$practice$cases;$
(2) Termination$disputes;$
(3) If$accompanied$with$a$claim$for$reinstatement,$those$cases$that$workers$may$file$involving$
wages,$rate$of$pay,$hours$of$work$and$other$terms$and$conditions$of$employment;$
(4) Claims$for$actual,$moral,$exemplary$and$other$forms$of$damages$arising$from$the$employer[
employee$relations;$
(5) Cases$arising$from$any$violation$of$Article$264$of$this$Code,$including$questions$involving$the$
legality$of$strikes$and$lockouts;$and$
(6) Except$claims$for$employees$compensation,$social$security,$medicare$and$maternity$benefits,$all$
other$claims$arising$from$employer[employee$relations,$including$those$of$persons$in$domestic$or$
household$service,$involving$an$amount$exceeding$five$thousand$pesos$(P5,000.00),$whether$or$
not$accompanied$with$a$claim$for$reinstatement.$
(b) The$Commission$shall$have$exclusive$appellate$jurisdiction$over$all$cases$decided$by$Labor$Arbiters.$
(c) Cases$arising$from$the$interpretation$or$implementation$of$collective$bargaining$agreements$and$those$
arising$from$the$interpretation$or$enforcement$of$company$personnel$policies$shall$be$disposed$of$by$the$
Labor$Arbiter$by$referring$the$same$to$the$grievance$machinery$and$voluntary$arbitration$as$may$be$provided$
in$said$agreements.$(As$amended$by$RA$6715)$
$
JURISDICTION&OVER&LABORTRELATED&DISPUTES&(excluding&Arts.&128&and&129)&
Labor&Arbiter&
Unfair$labor$practice$
Termination$disputes$
Claims$for$reinstatement$
Damages$
Money$claims$exceeding$P5,000$
OFWs$money$claims$(formerly$with$POEA)$
Compromise$agreements$
Wage$distortions$
Voluntary&Arbitrator&
Implementation$of$the$CBA$
Personnel$policy$enforcement$
Money$claims$related$to$CBA$
Regular&courts&(RTCs)&
When$there$is$no$employer[employee$relationship$
When$claims$cannot$be$resolved$with$reference$to$the$Labor$Code$
Intra[corporate$matters$
NLRC&Division&
Issuance$of$injunctions$(for$strikes)$
SOLE&and&the&President&of&the&
When$a$strike$or$lockout$is$of$national$interest$
Philippines&
$
$
Article&128.&Visitorial(and(enforcement(powers.$$
(a) The$Secretary$of$Labor$and$Employment$or$his$duly$authorized$representatives,$including$labor$regulations$
officers,$shall$have$access$to$employers$records$and$premises$at$any$time$of$the$day$or$night$whenever$work$
is$being$undertaken$therein,$and$the$right$to$copy$therefrom,$to$question$any$employee$and$to$investigate$
any$fact,$condition$or$matter$which$may$be$necessary$to$determine$violations$or$which$may$aid$in$the$
enforcement$of$this$Code$and$of$any$labor$law,$wage$order$or$rules$and$regulations$issued$pursuant$thereto.$
(b) The$provisions$of$Article$217$of$this$Code$to$the$contrary$notwithstanding$and$in$cases$where$the$relationship$
of$employer[employee$still$exists,$the$Secretary$of$Labor$and$Employment$or$his$duly$authorized$
representatives$shall$have$the$power$to$order$and$administer,$after$due$notice$and$hearing,$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$to$issue$writs$of$
execution$to$the$appropriate$authority$for$the$enforcement$of$their$order,$except$in$cases$where$the$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$10$of$80$

(c)

(d)

(e)
(f)

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$inspection.$
The$Secretary$of$Labor$and$Employment$may$likewise$order$stoppage$of$work$or$suspension$of$operations$of$
any$unit$or$department$of$an$establishment$when$non[compliance$with$the$law$or$implementing$rules$and$
regulations$poses$grave$and$imminent$danger$to$the$health$and$safety$of$workers$in$the$workplace.$Within$
twenty[four$hours,$a$hearing$shall$be$conducted$to$determine$whether$an$order$for$the$stoppage$of$work$or$
suspension$of$operations$shall$be$lifted$or$not.$In$case$the$violation$is$attributable$to$the$fault$of$the$
employer,$he$shall$pay$the$employees$concerned$their$salaries$or$wages$during$the$period$of$such$stoppage$
of$work$or$suspension$of$operation.$
It$shall$be$unlawful$for$any$person$or$entity$to$obstruct,$impede,$delay$or$otherwise$render$ineffective$the$
order$of$the$Secretary$of$Labor$and$Employment$or$his$duly$authorized$representatives$issued$pursuant$to$
the$authority$granted$under$this$Article,$and$no$inferior$court$or$entity$shall$issue$temporary$or$permanent$
injunction$or$restraining$order$or$otherwise$assume$jurisdiction$over$any$case$involving$the$enforcement$
orders$issued$in$accordance$with$this$Article.$
Any$government$employee$found$guilty$of$violation$of,$or$abuse$of$authority$under$this$Article$shall,$after$
appropriate$administrative$investigation,$be$subject$to$summary$dismissal$from$the$service.$
The$Secretary$of$Labor$and$Employment$may$by$appropriate$regulations$require$employers$to$keep$and$
maintain$such$employment$records$as$may$be$necessary$in$aid$of$his$visitorial$and$enforcement$powers$under$
this$Code.$

$
REGIONAL&ADMINISTRATION&AND&ENFORCEMENT&OF&LABOR&LAWS$
Responsibilities$of$the$DOLE:$

Promote$gainful$employment$opportunities,$optimize$the$development$and$utilization$of$resources;$

Advance$workers$welfare;$and$

Maintain$industrial$peace.$
Regional$Offices:$

Regional$Office;$

TESDA;$

Regional$Arbitration$Branch;$

National$Conciliation$and$Mediation$Board;$and$

Regional$Tripartite$Wage$and$Productivity$Board.$
ENFORCEMENT&FRAMEWORK$
1. Self[assessment;$
2. Inspection;$
3. Advisory$services;$and$
4. Delegation$to$LGUs.$

&

SCOPE&OF&VISITORIAL&&&ENFORCEMENT&POWERS&

Any$fact,$condition,$or$matter$related$to$the$enforcement$of$the$Labor$Code.&

No$monetary$limitation.&

Jurisdictional$limits$repealed$by$RA$7730.&
RELATIONSHIP&SHOULD&STILL&BE&EXISTING&

There$must$be$an$employer[employee$relationship.$

Issues$of$illegal$dismissal$properly$pertain$to$the$Labor$Arbiter.$
SUBJECTS&OF&ENFORCEMENT$

DOLEs$findings,$when$contested,$are$referred$to$the$proper$arbitration$branch.$
DISPOSITION&OF&LABOR&STANDARDS&CASES$

SOLE$is$allowed$to$adjudicate$money$claims.$

Investigation$is$not$limited$to$matters$raised$in$the$complaint.$
$
Article&129.&Recovery(of(wages,(simple(money(claims(and(other(benefits.$$Upon$complaint$of$any$interested$party,$
the$Regional$Director$of$the$Department$of$Labor$and$Employment$or$any$of$the$duly$authorized$hearing$officers$
of$the$Department$is$empowered,$through$summary$proceeding$and$after$due$notice,$to$hear$and$decide$any$
matter$involving$the$recovery$of$wages$and$other$monetary$claims$and$benefits,$including$legal$interest,$owing$to$
an$employee$or$person$employed$in$domestic$or$household$service$or$househelper$under$this$Code,$arising$from$
employer[employee$relations:$Provided,$That$such$complaint$does$not$include$a$claim$for$reinstatement:$
Provided,$further,$That$the$aggregate$money$claims$of$each$employee$or$househelper$do$not$exceed$five$
thousand$pesos$(P5,000).$The$Regional$Director$or$hearing$officer$shall$decide$or$resolve$the$complaint$within$

Ish$Guidote$

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thirty$(30)$calendar$days$from$the$date$of$the$filing$of$the$same.$Any$sum$thus$recovered$on$behalf$of$any$
employee$or$househelper$pursuant$to$this$Article$shall$be$held$in$a$special$deposit$account,$and$shall$be$paid,$on$
order$of$the$Secretary$of$Labor$and$Employment$or$the$Regional$Director$directly$to$the$employee$or$househelper$
concerned.$Any$such$sum$not$paid$to$the$employee$or$househelper,$because$he$cannot$be$located$after$diligent$
and$reasonable$effort$to$locate$him$within$a$period$of$three$(3)$years,$shall$be$held$as$a$special$fund$of$the$
Department$of$Labor$and$Employment$to$be$used$exclusively$for$the$amelioration$and$benefit$of$workers.$
$
Any$decision$or$resolution$of$the$Regional$Director$or$hearing$officer$pursuant$to$this$provision$may$be$appealed$
on$the$same$grounds$provided$in$Article$223$of$this$Code,$within$five$(5)$calendar$days$from$receipt$of$a$copy$of$
said$decision$or$resolution,$to$the$National$Labor$Relations$Commission$which$shall$resolve$the$appeal$within$ten$
(10)$calendar$days$from$the$submission$of$the$last$pleading$required$or$allowed$under$its$rules.$
$
The$Secretary$of$Labor$and$Employment$or$his$duly$authorized$representative$may$supervise$the$payment$of$
unpaid$wages$and$other$monetary$claims$and$benefits,$including$legal$interest,$found$owing$to$any$employee$or$
househelper$under$this$Code.$(As$amended$by$RA$6715)$
$

COVERAGE&OF&SMALL&MONEY&CLAIMS&UNDER&ART.&129$

Employees;$

Persons$employed$in$domestic$or$household$service;$

Househelpers;$

Claim$arises$from$an$employer[employee$relationship;$

Does$not$seek$reinstatement;$and$

The$amount$being$claimed$does$not$exceed$P5,000.$
NATURE&OF&PROCEEDINGS&

Summary$and$non[technical.$

Supported$by$substantial$evidence.$
$
$
ART.&128&
Nature&
Inspection$
Subject&
Labor$legislation$in$general$
Workers&Involved&
Present$employees$

Jurisdictional&Requisites&

None;$repealed$by$RA$7730$

Secretary$of$Labor$or$his$duly$
authorized$representative$
Secretary$of$Labor$

Officers&Designated&
Appeal&
$

ART.&129&
Adjudication$
Labor$standards$(money$claims)$
Past$or$present$employees$
1. Complainant$is$an$employee,$
person$employed$in$domestic$or$
household$service,$or$a$
househelper;$
2. Claim$arises$from$an$EER;$
3. No$claim$for$reinstatement;$
4. Amount$does$not$exceed$P5,000.$
DOLE$Regional$Director$or$a$hearing$
officer$
NLRC$

$
Article&288.&Penalties.$$Except$as$otherwise$provided$in$this$Code,$or$unless$the$act$complained$of$hinges$on$a$
question$of$interpretation$or$implementation$of$ambiguous$provisions$of$an$existing$collective$bargaining$
agreement$any$violation$of$the$provisions$of$this$Code$declared$to$be$unlawful$or$penal$in$nature$shall$be$
punished$with$a$fine$of$not$less$than$One$Thousand$Pesos$(P1,000.00)$nor$more$than$Ten$Thousand$Pesos$
(P10,000.00),$or$imprisonment$of$not$less$than$three$months$nor$more$than$three$years,$or$both$such$fine$and$
imprisonment$at$the$discretion$of$the$court.$
$
In$addition$to$such$penalty,$any$alien$found$guilty$shall$be$summarily$deported$upon$completion$of$service$of$
sentence.$
$
Any$provision$of$law$to$the$contrary$notwithstanding,$any$criminal$offense$punished$in$this$Code$shall$be$under$
the$concurrent$jurisdiction$of$the$Municipal$or$Regional$Trial$Court.$
$
Article&289.&Who(are(liable(when(committed(by(other(than(natural(person.$$If$the$offense$is$committed$by$a$
corporation,$trust,$firm,$partnership,$association$or$any$other$entity,$the$penalty$shall$be$imposed$upon$the$guilty$
officer$or$officers$of$such$corporation,$trust,$firm,$partnership,$association$or$entity.$
$
Article&290.&Offenses.$$Offenses$penalized$under$this$Code$and$the$rules$and$regulations$issued$pursuant$
Ish$Guidote$

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thereto$shall$prescribe$in$three$years.$
$
All$unfair$labor$practices$arising$from$Book$V$shall$be$filed$with$the$appropriate$agency$within$one$year$from$
accrual$of$such$unfair$labor$practice;$otherwise,$they$shall$be$forever$barred.$
$
Article&291.&Money(claims.$$All$money$claims$arising$from$employer[employee$relations$accruing$during$the$
effectivity$of$this$Code$shall$be$filed$within$three$years$from$the$time$the$cause$of$action$accrued;$otherwise$they$
shall$be$forever$barred.$
$
All$money$claims$accruing$prior$to$the$effectivity$of$this$Code$shall$be$filed$with$the$appropriate$entities$
established$under$this$Code$within$one$year$from$the$date$of$such$effectivity,$and$shall$be$processed$or$
determined$in$accordance$with$implementing$rules$and$regulations$of$the$Code;$otherwise$they$shall$be$forever$
barred.$
$
Workmens$compensation$claims$accruing$prior$to$the$effectivity$of$this$Code$and$during$the$period$from$
November$1,$1974$up$to$December$31,$1974,$shall$be$filed$with$the$appropriate$regional$offices$of$the$Department$
of$Labor$and$Employment$not$later$than$March$31,$1975;$otherwise$they$shall$be$forever$barred.$These$claims$shall$
be$processed$and$adjudicated$in$accordance$with$the$law$and$rules$at$the$time$their$causes$of$action$accrued.$
$
Article&292.&Institution(of(money(claims.$$Money$claims$specified$in$the$immediately$preceding$Article$shall$be$
filed$before$the$appropriate$entity$independently$of$the$criminal$action$that$may$be$instituted$in$the$proper$
courts.$
$
Pending$the$final$determination$of$the$merits$of$money$claims$filed$with$the$appropriate$entity,$no$civil$action$
arising$from$the$same$cause$of$action$shall$be$filed$with$any$court.$This$provision$shall$not$apply$to$employees$
compensation$cases$which$shall$be$processed$and$determined$strictly$in$accordance$with$the$pertinent$provisions$
of$this$Code.$
$
1987&CONSTITUTION&
ARTICLE&III&&BILL&OF&RIGHTS$
$
Section&11.$Free$access$to$the$courts$and$quasi[judicial$bodies$and$adequate$legal$assistance$shall$not$be$denied$to$
any$person$by$reason$of$poverty.$
$
Section&16.&All$persons$shall$have$the$right$to$a$speedy$disposition$of$their$cases$before$all$judicial,$quasi[judicial,$or$
administrative$bodies.$
$
Cirineo&Bowling&Plaza,&Inc.&v.&Sensing$(448$SCRA$176,$2005)$
Following$an$inspection$of$a$Labor$and$Employment$Officer,$the$DOLE$Regional$Director$ordered$petitioner$to$pay$
13$employees$their$money$claims$consisting$of$minimum$wag,$13th$month$pay,$and$overtime$pay,$among$others.$
They$assail$the$jurisdiction$of$the$Regional$Office$to$adjudicate$money$claims.$The$Court$held$that$pursuant$to$RA$
7730,$the$Regional$Office$has$jurisdiction$over$money$claims$even$when$the$amount$claimed$exceeds$P5,000.$Arts.$
129$and$217$pertain$to$the$jurisdiction$of$Labor$Arbiters.$They$do$not$affect$the$visitorial$and$enforcement$powers$
of$the$Sec.$of$Labor$stated$in$Art.$128.$
$
Peoples&Broadcasting&Service&v.&Secretary&of&Labor&and&Employment$(667$SCRA$538,$2012)$
Bombo$Radyo$questions$the$jurisdiction$of$the$DOLE$Regional$Director$to$adjudicate$the$complaint$for$money$
claims$filed$by$its$employee,$Jandeleon$Juezan.$It$posits$that$the$RD$is$without$jurisdiction$to$determine$the$
existence$of$an$employer[employee$relationship.$The$Court$upheld$the$RDs$jurisdiction.$According$to$the$SC,$the$
SOLEs$visitorial$power$would$be$rendered$nugatory$if$an$employer$could$just$force$the$issue$of$the$existence$of$
an$employer[employee$relationship$to$be$decided$by$the$NLRC.$The$DOLE$may$very$well$make$a$finding$that$no$
EER$exists,$thereby$divesting$itself$of$jurisdiction.$The$important$thing$is$that$there$is$no$claim$for$reinstatement.$
$
C.

Work$Relationship$
$
1.
Employer[Employee$Relationship$
$
a.
Definition$of$Employer$and$Employee$
$
&
Article&97.&Definitions.$$As$used$in$this$Title:$$
$

Ish$Guidote$

WAGES&

Labor$Law$1$$Midterm$Reviewer$|$Page$13$of$80$

(a) Person$means$an$individual,$partnership,$association,$corporation,$business$trust,$legal$
representative$or$any$organized$group$of$person.$
(b) Employer$includes$any$person$acting$directly$or$indirectly$in$the$interest$of$an$employer$in$
relation$to$an$employee$and$shall$include$the$Government$and$all$its$branches,$subdivisions$and$
instrumentalities,$all$government[owned$or$controlled$corporations$and$institutions,$as$well$as$non[
profit$private$institutions$or$organizations.$
(c) $Employee$includes$any$individual$employed$by$an$employer.$
$
EMPLOYEES&COMPENSATION&AND&STATE&INSURANCE&FUND$
$
Article&167.&Definition(of(terms.$$As$used$in$this$Title,$unless$the$context$indicates$otherwise:$
(f) Employer$means$any$person,$natural$or$juridical,$employing$the$services$of$the$employee.$
(g) Employee$means$any$person$compulsorily$covered$by$the$GSIS$under$Commonwealth$Act$
numbered$one$hundred$eighty[six,$as$amended,$including$members$of$the$Armed$Forces$of$the$
Philippines,$and$any$person$employed$as$casual,$emergency,$temporary,$substitute$or$contractual;$
or$any$person$compulsorily$covered$by$the$SSS$under$Republic$Act$numbered$eleven$hundred$sixty[
one,$as$amended.$
(h) Person$means$any$individual,$partnership,$firm,$association,$trust,$corporation$or$legal$
representative$thereof.$
$
LABOR&RELATIONS&
&
Article&212.$Definitions.$$
(e) Employer$includes$any$person$acting$in$the$interest$of$an$employer,$directly$or$indirectly.$The$
term$shall$not$include$any$labor$organization$or$any$of$its$officers$or$agents$except$when$acting$as$
employer.$
(f) Employee$includes$any$person$in$the$employ$of$an$employer.$The$term$shall$not$be$limited$to$the$
employees$of$a$particular$employer,$unless$this$Code$so$explicitly$states.$It$shall$include$any$
individual$whose$work$has$ceased$as$a$result$of$or$in$connection$with$any$current$labor$dispute$or$
because$of$any$unfair$labor$practice$if$he$has$not$obtained$any$other$substantially$equivalent$and$
regular$employment.$
$

Ish$Guidote$

b.

Factors/Tests$
$
Sy&v.&Court&of&Appeals$(398$SCRA$301,$2003)$
Jaime$Sahot$worked$as$a$truck$driver$for$petitioner[company$from$when$he$was$23$years$old.$When$he$
was$already$59$he$went$on$leave$and$was$terminated$upon$his$return.$Petitioners$claim$that$Sahot$is$not$
entitled$to$separation$benefits,$not$being$an$employee$of$the$company$but$an$industrial$partner.$The$
Court$held$that$private$respondent$was$in$fact$an$employee$of$the$company.$
$
The$elements$to$determine$the$existence$of$an$employer[employee$relationship$are:$
1. The$selection$and$engagement$of$the$employee;$
2. The$payment$of$wages;$
3. The$power$of$dismissal;$and$
4. The$employers$power$to$control$the$employees$conduct.$
$
The$exercise$of$the$power$of$control$is$apparent$in$this$case$because$it$was$petitioner$who$determined$
where$Sahot$would$go,$what$he$would$do,$and$how$he$would$do$it.$
$
Chavez&v.&National&Labor&Relations&Commission$(448$SCRA$478,$2005)$
Pedro$Chavez$worked$as$a$truck$driver$for$Supreme$Packaging$under$a$Contract$of$Service.$In$the$
agreement,$he$was$denominated$as$an$Independent$Contractor.$When$he$filed$a$complaint$for$illegal$
dismissal$with$the$LA,$his$employer$alleged$that$he$is$not$entitled$to$separation$pay$because$he$was$not$
an$employee$of$the$company.$The$Court$ruled$otherwise,$applying$the$four[fold$test.$The$most$
important$element,$control,$was$established$through$presentation$of$evidence$that$showed$private$
respondents$degree$of$control$over$the$means$and$manner$by$which$Chavez$did$his$job.$The$truck$he$
drove$was$owned$by$Supreme.$He$received$express$instructions$for$making$deliveries$which$included$
where$he$would$park$the$truck.$The$fact$that$he$was$labeled$an$Independent$Contractor$in$the$service$
contract$is$irrelevant.$The$employment$status$of$a$person$is$defined$and$prescribed$by$law$and$not$by$
what$the$parties$say$it$should$be.$
$
$
$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$14$of$80$

Lirio&v.&Genovia$(661$SCRA$127,$2011)$
Genovia$worked$as$a$studio$manager$for$petitioners$recording$studio,$Celkor.$He$was$asked$to$do$a$side$
project$for$Lirios$daughter.$During$his$free$time,$Genovia$composed$and$arranged$songs$for$Celine$
Maes$album.$Petitioner$refused$to$pay$him$for$the$services$rendered$beyond$the$scope$of$his$assigned$
tasks$as$studio$manager.$The$Court$ruled$that$there$was$an$employer[employee$relationship,$and$that$
Genovia$was$entitled$to$compensation$for$the$work$he$undertook$in$connection$with$Celine$Maes$
album.$The$Court$focused$on$the$power$of$control,$clarifying$that$what$is$required$by$the$test$is$only$the$
existence$of$such$power$and$not$necessarily$the$exercise$thereof.$It$ruled$that$the$power$was$indeed$
present$as$Lirio$frequently$checked$on$the$progress$and$work$of$Genovia.$
$

c.

Legend&Hotel&(Manila)&v.&Realuyo$(677$SCRA$11,$2012)$
Joey$Roa$worked$as$a$pianist$for$petitioner$hotel.$His$employment$was$terminated$allegedly$due$to$cost[
cutting$measures.$He$filed$a$complaint$for$illegal$dismissal.$The$LA$found$in$his$favor,$and$the$Court$
upheld$the$existence$of$an$employer[employee$relationship.$It$held$that$the$four[fold$test$was$satisfied.$
With$respect$to$wages,$the$Court$declared$that$despite$the$fact$that$he$was$paid$a$talent$fee,$such$label$
did$not$change$the$fact$that$what$he$was$receiving$was$compensation$for$services$rendered.$
Moreover,$his$name$was$included$in$the$companys$payroll.$As$regards$the$power$of$control,$it$was$
sufficiently$established.$It$was$petitioner$who$dictated$the$time$and$place$of$Roas$performance,$as$well$
as$his$repertoire$and$attire.$The$hotel$failed$to$prove$that$the$dismissal$of$Roa$was$for$a$just$and$valid$
cause.$
$
Burden$of$Proving$Employer[Employee$Relationship$
$
Javier&v.&Fly&Ace&Corporation$(666$SCRA$383,$2012)$
Bitoy$Javier$claimed$to$be$an$employee$of$respondent$corporation,$tasked$with$cleaning$and$arranging$
canned$goods$and$accompanying$delivery$vehicles$on$trips.$One$day,$he$was$simply$not$allowed$to$enter$
the$premises.$As$it$turns$out,$his$immediate$superior$was$courting$his$daughter$who$rejected$the$
formers$advances.$This$prompted$Javier$to$file$a$complaint$for$illegal$dismissal.$The$LA$dismissed$his$
complaint,$but$the$NLRC$reversed$and$declared$him$entitled$to$separation$pay.$The$CA$reinstated$the$
LAs$decision.$The$SC$held$that$Javier$was$not$able$to$prove$the$existence$of$an$employer[employee$
relationship.$The$burden$of$proving$such$relationship$is$on$him,$as$he$is$the$one$claiming$benefits$under$
the$law.$He$failed$to$satisfy$the$elements$of$the$four[fold$test,$as$all$he$had$were$his$own$self[serving$
statements.$While$no$particular$form$of$evidence$is$required,$it$must$be$evaluated$based$on$both$
quantitative$and$qualitative$aspects.$The$lone$piece$of$evidence$presented$was$an$affidavit$of$a$
purported$co[employee,$Bengie$Valenzuela.$

$
d.

Ish$Guidote$

Piercing$the$Veil$of$Corporate$Fiction$
$
Pamplona&Plantation&Co.,&Inc.&v.&Tinghil$(450$SCRA$421,$2005)$
Respondents$are$employees$of$petitioner$and$its$sister$company,$Pamplona$Plantation$Leisure$
Corporation.$Following$a$meeting$with$the$members$of$the$Pamplona$Plantation$Independent$Labor$
Union,$company$manager$Bondoc$refused$to$allow$respondents$to$continue$working.$This$prompted$the$
latter$to$file$complaints$for$illegal$dismissal$against$the$Company.$LA$declared$that$they$were$entitled$to$
separation$pay.$However,$the$NLRC$dismissed$the$complaint$for$failure$to$implead$an$indispensable$
party,$the$Corporation.$The$CA$reversed$and$held$that$the$joinder$of$the$Corporation$as$a$party$is$not$
necessary,$the$four[fold$test$of$EER$having$been$satisfied.$The$SC$upheld$the$decision$of$the$CA,$and$
further,$it$pierced$the$veil$of$corporate$fiction.$It$held$that$a$fiction$of$law$cannot$be$invoked$to$further$
an$end$subversive$of$justice.$The$following$circumstances$show$that$the$piercing$of$the$veil$is$
warranted$in$this$case:$(1)$both$plantation$and$golf$course$workers$deal$with$the$same$management$
(Bondoc);$(2)$part$of$the$plantation$was$converted$into$a$golf$course;$and$(3)$payrolls$indicating$the$
names$of$the$respondents$were$in$the$name$of$petitioner$Company.$The$corporate$mask$cannot$be$used$
to$evade$an$entitys$obligations$to$its$employees.$
$
Sarona&v.&National&Labor&Relations&Commission$(663$SCRA$394,$2012)$
Sarona$had$been$employed$as$a$security$guard$with$Sceptre$for$27$years$when$he$was$asked$to$tender$
his$resignation$and$apply$to$Royale.$He$complied.$From$then$on,$he$was$considered$an$employee$of$
Royale$except$that$in$several$assignments,$he$would$still$be$wearing$the$Sceptre$uniform.$Eventually,$
the$company$stopped$giving$him$assignments.$He$filed$a$complaint$for$illegal$dismissal$and$the$LA$
awarded$him$backwages$only$from$the$time$when$he$started$working$with$Royale.$The$LA,$NLR,$and$CA$
refused$to$pierce$the$corporate$veil$and$award$him$separation$pay$corresponding$to$the$time$he$was$
employed$with$Sceptre.$The$SC$held$otherwise.$It$found$that$Royale$was$just$a$continuation$of$Sceptre.$
The$manner$by$which$petitioner$was$made$to$resign$and$reapply$suggested$the$perverted$use$of$
corporate$fiction.$Sceptre$and$Royale$had$the$same$place$of$business.$Both$were$controlled$by$Aida$Tan.$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$15$of$80$

Moreover,$Royale$claimed$the$right$to$the$cash$bond$posted$by$Sarona$when$the$latter$first$applied$to$
Sceptre.$If$they$were$indeed$separate$entities,$then$Royale$would$have$no$right$to$the$bond.$
$

2.

Independent$Contractor$and$Labor[only$Contractor$
$
Article&106.&Contractor(or(subNcontractor.$$Whenever$an$employer$enters$into$a$contract$with$another$person$for$
the$performance$of$the$formers$work,$the$employees$of$the$contractor$and$of$the$latters$sub[contractor,$if$any,$
shall$be$paid$in$accordance$with$the$provisions$of$this$Code.$
$
In$the$event$that$the$contractor$or$sub[contractor$fails$to$pay$the$wages$of$his$employees$in$accordance$with$this$
Code,$the$employer$shall$be$jointly$and$severally$liable$with$his$contractor$or$sub[contractor$to$such$employees$to$
the$extent$of$the$work$performed$under$the$contract,$in$the$same$manner$and$extent$that$he$is$liable$to$
employees$directly$employed$by$him.$
$
The$Secretary$of$Labor$and$Employment$may,$by$appropriate$regulations,$restrict$or$prohibit$the$contracting$out$
of$labor$to$protect$the$rights$of$workers$established$under$this$Code.$In$so$prohibiting$or$restricting,$he$may$make$
appropriate$distinctions$between$labor[only$contracting$as$well$as$differentiations$within$these$types$of$
contracting,$and$determine$who$among$the$parties$involved$shall$be$considered$the$employer$for$purposes$of$this$
Code,$to$prevent$any$violation$or$circumvention$of$any$provision$of$this$Code.$
$
There$is$labor[only$contracting$where$the$person$supplying$workers$to$an$employer$does$not$have$substantial$
capital$or$investment$in$the$form$of$tools,$equipment,$machineries,$work$premises,$among$others,$and$the$
workers$recruited$and$placed$by$such$person$are$performing$activities$which$are$directly$related$to$the$principal$
business$of$such$employer.$In$such$cases,$the$person$or$intermediary$shall$be$considered$merely$as$an$agent$of$
the$employer$who$shall$be$responsible$to$the$workers$in$the$same$manner$and$extent$as$if$the$latter$were$directly$
employed$by$him.$
$
Article&107.$Indirect(employer.$$The$provisions$of$the$immediately$preceding$Article$shall$likewise$apply$to$any$
person,$partnership,$association$or$corporation$which,$not$being$an$employer,$contracts$with$an$independent$
contractor$for$the$performance$of$any$work,$task,$job$or$project.$
$
DEPARTMENT&ORDER&NO.&18TA,&SERIES&OF&2011&
&
Section&3.&Definition(of(terms.$$The$following$terms$as$used$in$these$Rules,$shall$mean:$
c. Contracting$or$Subcontracting$refers$to$an$arrangement$whereby$a$principal$agrees$to$put$out$or$farm$
out$with$a$contractor$the$performance$or$completion$of$a$specific$job,$work$or$service$within$a$definite$or$
predetermined$period,$regardless$of$whether$such$job,$work$or$service$is$to$be$performed$or$completed$
within$or$outside$the$premises$of$the$principal.$
$
See$Annex$A,$Department$Order$No.$18[A,$s.$2011$
&
CONTRACTING&AND&SUBTCONTRACTING&IN&GENERAL$

Allowed$by$the$provisions$of$Arts.$106[109,$subject$to$policies$to$protect$workers.$

Cannot$be$changed$or$disregarded$by$administrative$regulations.$
DEPARTMENT&ORDER&NO.&18TA,&SERIES&OF&2011$

Issued$on$November$14,$2011.$

Amended$D.O.$18[02,$s.$2002.$

Constitutes$the$IRR$of$Arts.$106[109,$LC.$
&
ELEMENTS&OF&INDEPENDENT&CONTRACTING$
1. Parties$$the$principal$must$contract$with$the$contractor,$and$the$latter$with$its$employees.$
2. Specific&job$$contemplates$the$performance$of$a$job,$work,$or$service.$
3. Period$$must$be$definite$or$predetermined.$
4. Location&$may$be$within$or$outside$the$premises$of$the$principals$place$of$work.$

$
a.

Ish$Guidote$

Requirements$for$Independent$Contractor;$Trilateral$Relationship$
$
DEPARTMENT&ORDER&NO.&18TA,&SERIES&OF&2011&
&
Section&3.&Definition(of(terms.$$The$following$terms$as$used$in$these$Rules,$shall$mean:$
d. Contractor$refers$to$any$person$or$entity,$including$a$cooperative,$engaged$in$a$legitimate$
contracting$or$subcontracting$arrangement$providing$either$services,$skilled$workers,$temporary$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$16$of$80$

e.

$
h.

workers,$or$a$combination$of$services$to$a$principal$under$a$Service$Agreement.$
$
Contractors&employee$includes$one$employed$by$a$contractor$to$perform$or$complete$a$job,$
work,$or$service$pursuant$to$a$Service$Agreement$with$a$principal.$
$
It$shall$also$refer$to$regular$employees$of$the$contractor$whose$functions$are$not$dependent$on$the$
performance$or$completion$of$a$specific$job,$work$or$service$within$a$definite$period$of$time,$i.e.,$
administrative$staff.$
Principal$refers$to$any$employer,$whether$a$person$or$entity,$including$government$agencies$and$
government[owned$and$controlled[corporations,$who/which$puts$out$or$farms$out$a$job,$service$or$
work$to$a$contractor.$

$
m. Trilateral&Relationship$refers$to$the$relationship$in$a$contracting$or$subcontracting$arrangement$
where$there$is$a$contract$for$a$specific$job,$work$or$service$between$the$principal$and$the$
contractor,$and$a$contract$of$employment$between$the$contractor$and$its$workers.$There$are$three$
(3)$parties$involved$in$these$arrangements:$the$principal$who$decides$to$farm$out$a$job,$work$or$
service$to$a$contractor;$the$contractor$who$has$the$capacity$to$independently$undertake$the$
performance$of$the$job,$work$or$service;$and$the$contractual$workers$engaged$by$the$contractor$to$
accomplish$the$job,$work$or$service.$
$
DEPARTMENT&ORDER&NO.&18TA,&SERIES&OF&2011&
$
Section&4.&Legitimate(contracting(or(subcontracting.$$Contracting$or$subcontracting$shall$be$legitimate$
if$all$the$following$circumstances$concur:$
(a) The$contractor$must$be$registered$in$accordance$with$these$Rules$and$carries$a$distinct$and$
independent$business$and$undertakes$to$perform$the$job,$work$or$service$on$its$own$responsibility,$
according$to$its$own$manner$and$method,$and$free$from$control$and$direction$of$the$principal$in$all$
matters$connected$with$the$performance$of$the$work$except$as$to$the$results$thereof;$
(b) The$contractor$has$substantial$capital$and/or$investment;$and$
(c) The$Service$Agreement$ensures$compliance$with$all$the$rights$and$benefits$under$Labor$Laws.$
$
DEPARTMENT&ORDER&NO.&18TA,&SERIES&OF&2011&
$
Section&5.&Trilateral(relationship(in(contracting(arrangements;(Solidary(liability.$$In$legitimate$
contracting$or$subcontracting$arrangement$there$exists:$
(a) An$employer[employee$relationship$between$the$contractor$and$the$employees$it$engaged$to$
perform$the$specific$job,$work$or$service$being$contracted;$and$
(b) A$contractual$relationship$between$the$principal$and$the$contractor$as$governed$by$the$provisions$
of$the$Civil$Code.$
$
In$the$event$of$any$violation$of$any$provision$of$the$Labor$Code,$including$the$failure$to$pay$wages,$there$
exists$a$solidary$liability$on$the$part$of$the$principal$and$the$contractor$for$purposes$of$enforcing$the$
provisions$of$the$Labor$Code$and$other$social$legislation,$to$the$extent$of$the$work$performed$under$the$
employment$contract.$
$
$
However,$the$principal$shall$be$deemed$the$direct$employer$of$the$contractors$employee$in$cases$
where$there$is$a$finding$by$a$competent$authority$of$labor[only$contracting,$or$commission$of$prohibited$
activities$as$provided$in$Section$7,$or$a$violation$of$either$Sections$8$or$9$hereof.$
$
WHAT&IS&SUBSTANTIAL&CAPITAL?$

P3$million$in$paid[up$capital$stocks/shares$for$corporations,$partnerships,$or$cooperatives.$

P3$million$net$worth$for$a$single$proprietorship.$

Tools,$equipment,$implements,$machineries$and$work$premises$actually$and$directly$used$by$the$
contractor$or$sub[contractor$for$the$performance$of$work$contracted$out.$
$
WHAT&IS&THE&EFFECT&OF&A&CONTRACTORS&FAILURE&TO&REGISTER?$

A$presumption$of$labor[only$contracting$arises.$
$
Sonza&v.&ABSTCBN&Broadcasting&Corporation$(431$SCRA$583,$2004)$
Jay$Sonza$entered$into$a$contract$with$ABS[CBN$as$a$talent,$through$his$management$company$MJMDC.$
He$tendered$his$irrevocable$resignation.$He$filed$a$complaint$with$the$DOLE$claiming$separation$pay$and$
Ish$Guidote$

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b.

$
c.

Ish$Guidote$

13th$month$pay,$among$others.$The$complaint$was$dismissed$for$lack$of$jurisdiction,$there$being$no$EER$
between$Sonza$and$ABS[CBN.$Is$Sonza$an$employee$of$ABS[CBN?$No.$He$is$an$independent$contractor,$
and$MJMDC$is$an$agent$of$his.$The$four[fold$test$was$not$satisfied.$As$regards$the$control$test,$the$Court$
held$that$Sonza$was$free$to$perform$in$his$own$style.$He$was$not$given$a$script$and$was$not$even$made$
to$work$for$8$hours$in$a$day.$The$tools$and$instruments$needed$for$the$performance$of$his$work$were$
not$owned$by$ABS[CBN;$the$tools$are$composed$of$his$own$talent,$and$not$the$crew$or$equipment.$
Court$also$took$judicial$notice$of$the$fact$that$exclusivity$clauses$are$common$in$the$showbiz$industry.$
This$does$not$mean$that$Sonza$is$an$employee.$$
$
San&Miguel&Corporation&v.&Semillano$(623$SCRA$114,$2010)$
AMPCO$hired$respondent$to$work$in$SMCs$bottling$plant.$After$rendering$6$months$of$service,$he$was$
no$longer$allowed$to$enter$the$premises$of$the$plant.$He$filed$a$complaint$for$illegal$dismissal$with$the$
LA.$It$declared$that$Semillanos$employer$was$SMC.$NLRC$reversed$and$held$that$AMPCO$was$a$
legitimate$job$contractor.$CA$reversed$and$held$that$AMPCO$was$a$labor[only$contractor$because$it$was$
SMC$that$exercised$the$power$of$control$and$dismissal.$Finally,$the$SC$affirmed$the$CA$decision.$It$found$
that$AMPCO$was$indeed$a$labor[only$contractor.$Despite$the$fact$that$it$had$an$independent$business$
(trading),$it$was$not$able$to$prove$that$it$had$substantial$capital$or$investment$in$the$form$of$tools,$
machinery,$etc.$Neither$did$it$exercise$the$power$of$control$over$respondent.$It$is$apparent$that$
Semillano$performed$the$tasks$assigned$to$him$by$SMC.$He$worked$in$SMCs$premises.$The$fact$that$
AMPCO$is$registered$in$accordance$with$the$Rules$does$not$mean$it$cannot$be$a$labor[only$contractor.$
The$fact$of$registration$merely$prevents$the$presumption$of$labor[only$contracting$from$arising.$
$
Desirable$$Unnecessary$
$
Coca&Cola&Bottlers&Philippines,&Inc.&v.&NLRC$(307$SCRA$131,$1999)$
Canonicato$worked$as$a$casual$employee$of$Coca$Cola.$He$was$first$a$bottling$employee,$then$a$painter.$
After$his$services$were$terminated,$he$sought$employment$with$the$Bacolod$Janitorial$Services.$BJS$
assigned$him$to$Coca$Cola$as$a$janitor.$Wanting$to$become$a$regular$employee$of$Coca$Cola,$Canonicato$
filed$a$complaint$for$regularization$with$the$Labor$Arbiter.$He$stopped$reporting$for$work.$LA$ruled$that$
Canonicato$was$not$an$employee$of$Coca$Cola$but$of$BJS,$a$legitimate$job$contractor.$The$NLRC$
reversed$and$held$that$Canonicato$deserved$to$be$regularized$because$the$services$he$rendered$were$
necessary$and$desirable$to$Coca$Cola.$The$Supreme$Court$held$that$Canonicato$was$not$a$regular$
employee$of$Coca$Cola.$The$Court$took$judicial$notice$of$the$prevailing$practice$of$hiring$janitorial$
services$on$an$Independent$Contractor$basis.$Thus,$although$directly$related$to$the$business$of$an$
employer,$such$services$are$deemed$unnecessary$in$the$conduct$of$its$regular$or$official$business.$Art.$
280$cannot$be$applied$when$the$existence$of$an$EER$is$in$question.$
Canonicato$is$an$employee$of$BJS.$The$latter$is$an$independent$contractor$with$an$independent$
business.$It$has$other$clients$other$than$Coca$Cola.$It$has$sufficient$materials$and$tools$needed$to$
perform$janitorial$services.$Most$importantly,$BJS$exercised$the$power$of$control$over$Canonicato.$
Labor[only$Contracting;$Requisites$and$Prohibition$
$
DEPARTMENT&ORDER&NO.&18TA,&SERIES&OF&2011&
$
Section&6.$Prohibition(against(laborNonly(contracting.$$Labor[only$contracting$is$hereby$declared$
prohibited.$For$this$purpose,$labor$only$contracting$shall$refer$to$an$arrangement$where:$
A. The$contractor$does$not$have$substantial$capital$or$investments$in$the$form$of$tools,$equipment,$
machineries,$work$premises,$among$others,$and$the$employees$recruited$and$placed$are$
performing$activities$which$are$usually$necessary$or$desirable$to$the$operation$of$the$company,$or$
directly$related$to$the$main$business$of$the$principal$within$a$definite$or$predetermined$period,$
regardless$of$whether$such$job,$work$or$service$is$to$be$performed$or$completed$within$or$outside$
the$premises$of$the$principal;$or$
B. The$contractor$does$not$exercise$the$right$to$control$over$the$performance$of$the$work$of$the$
employee.$
$
DEPARTMENT&ORDER&NO.&18TA,&SERIES&OF&2011&
$
Section&7.&Other(Prohibitions.$$Notwithstanding$Section$6$of$these$Rules,$the$following$are$hereby$
declared$prohibited$for$being$contrary$to$law$or$public$policy:$
A. Contracting$out$of$jobs,$works$or$services$when$not$done$in$good$faith$and$not$justified$by$the$
exigencies$of$the$business$such$as$the$following:$
a. Contracting$out$of$jobs,$works$or$services$when$the$same$results$in$the$termination$or$
reduction$of$regular$employees$and$reduction$of$work$hours$or$reduction$or$splitting$of$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$18$of$80$

the$bargaining$unit.$
Contracting$out$of$work$with$a$Cabo.$
Taking$undue$advantage$of$the$economic$situation$or$lack$of$bargaining$strength$of$the$
contractors$employees,$or$undermining$their$security$of$tenure$or$basic$rights,$or$
circumventing$the$provisions$of$regular$employment,$in$any$of$the$following$instances:$
i. Requiring$them$to$perform$functions$which$are$currently$being$performed$by$
the$regular$employees$of$the$principal;$and$
ii. Requiring$them$to$sign,$as$a$precondition$to$employment$or$continued$
employment,$an$antedated$resignation$letter;$a$blank$payroll;$a$waiver$of$labor$
standards$including$minimum$wages$and$social$or$welfare$benefits;$or$a$
quitclaim$releasing$the$principal,$contractor$or$from$any$liability$as$to$payment$of$
future$claims.$
d. Contracting$out$of$a$job,$work$or$service$through$an$in[house$agency.$
e. Contracting$out$of$a$job,$work$or$service$that$is$necessary$or$desirable$or$directly$related$
to$the$business$or$operation$of$the$principal$by$reason$of$a$strike$or$lockout$whether$
actual$or$imminent.$
f. Contracting$out$of$a$job,$work$or$service$being$performed$by$union$members$when$such$
will$interfere$with,$restrain$or$coerce$employees$in$the$exercise$of$their$rights$to$self[
organization$as$provided$in$Art.$248$(c)$of$the$Labor$Code,$as$amended.$
g. Repeated$hiring$of$employees$under$an$employment$contract$of$short$duration$or$under$a$
Service$Agreement$of$short$duration$with$the$same$or$different$contractors,$which$
circumvents$the$Labor$Code$provisions$on$Security$of$Tenure.$
h. Requiring$employees$under$a$subcontracting$arrangement$to$sign$a$contract$fixing$the$
period$of$employment$to$a$term$shorter$than$the$term$of$the$Service$Agreement,$unless$
the$contract$is$divisible$into$phases$for$which$substantially$different$skills$are$required$and$
this$is$made$known$to$the$employee$at$the$time$of$engagement.$
i.
Refusal$to$provide$a$copy$of$the$Service$Agreement$and$the$employment$contracts$
between$the$contractor$and$the$employees$deployed$to$work$in$the$bargaining$unit$of$the$
principals$certified$bargaining$agent$to$the$sole$and$exclusive$bargaining$agent$(SEBA).$
j.
Engaging$or$maintaining$by$the$principal$of$subcontracted$employees$in$excess$of$those$
provided$for$in$the$applicable$Collective$Bargaining$Agreement$(CBA)$or$as$set$by$the$
Industry$Tripartite$Council$(ITC).$
Contracting$out$of$jobs,$works$or$services$analogous$to$the$above$when$not$done$in$good$faith$and$
not$justified$by$the$exigencies$of$the$business.$
b.
c.

B.
$

&

Labor[only$contracting$is$not$really$contracting$because$it$is$just$an$arrangement$to$recruit$people$
to$be$employed,$supervised,$or$paid$by$another.$
The$contractor$just$finds$the$people.$
ESSENTIAL&ELEMENT:&the$arrangement$is$merely$to$recruit,$supply$or$place$workers$to$perform$a$
job,$work$or$service$for$a$principal.&
CONFIRMING&ELEMENTS:&
1. Lack$of$substantial$capital$or$investment,$and$performance$of$activities$directly$related$to$the$
principals$main$business;$or$
2. The$contractor$does$not$exercise$control$over$the$performance$of$the$employees.&

LABORTONLY&&
&ESSENTIAL&ELEMENT&&
=&
CONTRACTING&
+&CONFIRMING&ELEMENT&1&or&2&
&
PolyfoamTRGC&International&Corporation&v.&Concepcion$(672$SCRA$148,$2012)$
After$having$worked$for$petitioner$for$6$years$as$an$all[around$factory$worker,$Edgardo$Concepcion$
came$to$work$one$day$to$find$his$time$card$missing.$He$had$been$dismissed.$He$filed$a$complaint$for$
illegal$dismissal$against$Polyfoam.$PAGES$moved$to$intervene$on$the$ground$that$it$was$Concepcions$
employer.$LA$found$both$Polyfoam$and$PAGES$solidarily$liable$for$Concepcions$separation$pay.$On$
appeal,$the$NLRC$modified$the$decision$and$held$that$PAGES$alone$should$be$liable,$being$an$
independent$contractor.$CA$reinstated$the$LAs$decision.$The$SC$held$that$PAGES$was$a$labor[only$
contractor$because$it$failed$to$comply$with$the$requirements$of$legitimate$job$contracting.$First,$it$did$
not$have$substantial$capital.$All$the$equipment$being$used$was$found$in$the$premises$of$Polyfoam$and$is$
therefore$presumed$to$be$owned$by$the$latter.$Second,$it$had$no$independent$business.$Concepcion$is$
deemed$an$employee$of$Polyfoam.$$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$19$of$80$

Norkis&Trading&Corporation&v.&Buenavista$(683$SCRA$406,$2012)$
Buenavista,$et$al.$were$hired$by$petitioner$as$skilled$workers.$They$were$not$regarded$as$regular$
employees$but$as$members$of$PASAKA,$a$cooperative/independent$contractor.$Private$respondents$
filed$a$complaint$for$labor[only$contracting$with$the$DOLE.$As$a$result,$their$membership$with$PASAKA$
was$suspended$and$they$were$pulled$out$from$Norkis.$They$were$to$be$transferred$to$Porta$Coeli,$
Norkis$sister$company,$but$would$be$working$as$unskilled$workers.$Thus,$they$filed$a$complaint$for$
illegal$dismissal$with$the$LA.$The$complaint$was$dismissed$on$the$ground$that$PASAKA$was$a$legitimate$
job$contractor.$Meanwhile,$the$SOLE$rendered$its$decision$finding$PASAKA$guilty$of$labor[only$
contracting.$NLRC$refused$to$acknowledge$the$ruling$and$instead$affirmed$the$LAs$decision.$CA$
reversed$and$held$that$the$DOLEs$findings$were$binding$on$the$courts.$The$SC$upheld$the$CAs$decision.$
PASAKA$had$no$substantial$capital.$The$tools$being$used$were$all$owned$by$Norkis.$Norkis$also$paid$the$
workers$wages$and$supervised$their$work.$PASAKA$also$did$not$carry$on$an$independent$business.$The$
contracts$with$other$entities$were$executed$as$an$afterthought.$
$
d.

Solidary$Liability$of$Indirect$Employer/Direct$Employer$

$
Article&109.&Solidary(liability.$$The$provisions$of$existing$laws$to$the$contrary$notwithstanding,$every$
employer$or$indirect$employer$shall$be$held$responsible$with$his$contractor$or$subcontractor$for$any$
violation$of$any$provision$of$this$Code.$For$purposes$of$determining$the$extent$of$their$civil$liability$
under$this$Chapter,$they$shall$be$considered$as$direct$employers.$
$
DEPARTMENT&ORDER&NO.&18TA,&SERIES&OF&2011&
&
Section&3.&Definition(of(terms.$$The$following$terms$as$used$in$these$Rules,$shall$mean:$
$
(k) Solidary&liability$refers$to$the$liability$of$the$principal,$pursuant$to$the$provision$of$Article$109$of$
the$Labor$Code,$as$direct$employer$together$with$the$contractor$for$any$violation$of$any$provision$
of$the$Labor$Code.$
$
It$also$refers$to$the$liability$of$the$principal,$in$the$same$manner$and$extent$that$he/she$is$liable$to$
his/her$direct$employees,$to$the$extent$of$the$work$performed$under$the$contract$when$the$
contractor$fails$to$pay$the$wages$of$his/her$employees,$as$provided$in$Article$106$of$the$Labor$Code,$
as$amended.$
$
DEPARTMENT&ORDER&NO.&18TA,&SERIES&OF&2011&
$
Section&27.&Effects(of(finding(of(laborNonly(contracting(and/or(violation(of(Sections(7,(8(or(9(of(the(Rules.$$
A$finding$by$competent$authority$of$labor[only$contracting$shall$render$the$principal$jointly$and$severally$
liable$with$the$contractor$to$the$latters$employees,$in$the$same$manner$and$extent$that$the$principal$is$
liable$to$employees$directly$hired$by$him/her,$as$provided$in$Article$106$of$the$Labor$Code,$as$amended.$
$
A$finding$of$commission$of$any$of$the$prohibited$activities$in$Section$7,$or$violation$of$either$Sections$8$
or$9$hereof,$shall$render$the$principal$the$direct$employer$of$the$employees$of$the$contractor$or$
subcontractor,$pursuant$to$Article$109$of$the$Labor$Code,$as$amended.$
$
Eparwa&Security&and&Janitorial&Services&v.&Liceo&de&Cagayan&University$(508$SCRA$370,$2006)$
Petitioner$and$respondent$entered$into$a$contract$for$security$services.$11$security$guards$filed$a$
complaint$for$underpayment$of$wages,$legal$holiday$pay,$and$13th$month$pay,$among$others.$LDCU$filed$
a$cross[claim$against$Eparwa$for$reimbursement.$The$LA$held$both$parties$solidarily$liable.$The$cross[
claim$was$granted.$On$appeal,$the$NLRC$modified$and$held$that$LDCU$was$not$entitled$to$
reimbursement.$The$CA$reinstated$the$LAs$decision.$The$SC$held$that$LDCU$is$not$entitled$to$
reimbursement.$Being$the$principal,$it$bears$the$burden$of$paying$wage$differentials$to$the$employees,$
even$if$the$latter$are$employed$by$the$independent$contractor.$Eparwa$should$have$adjusted$the$
contract$price$to$account$for$the$wage$differentials$but$since$the$contract$has$already$expired,$it$can$pay$
its$workers$the$difference$subject$to$reimbursement$from$LDCU.$But$ultimately,$it$is$LDCU$which$should$
be$held$accountable$for$the$wage$differentials.$
$
$

Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$20$of$80$

D.

Ish$Guidote$

Pre[employment,$Recruitment$and$Placement$of$Workers$
$
1.
Pre[employment$Policy$$Statement$of$Objectives$
$
Article&3.&Declaration(of(basic(policy.$$The$State$shall$afford$protection$to$labor,$promote$full$employment,$
ensure$equal$work$opportunities$regardless$of$sex,$race$or$creed$and$regulate$the$relations$between$workers$and$
employers.$The$State$shall$assure$the$rights$of$workers$to$self[organization,$collective$bargaining,$security$of$
tenure,$and$just$and$humane$conditions$of$work.$
$
Article&12.&Statement(of(objectives.$$It$is$the$policy$of$the$State:$
(a) To$promote$and$maintain$a$state$of$full$employment$through$improved$manpower$training,$allocation$and$
utilization;$
(f) To$strengthen$the$network$of$public$employment$offices$and$rationalize$the$participation$of$the$private$
sector$in$the$recruitment$and$placement$of$workers,$locally$and$overseas,$to$serve$national$development$
objectives.$
$
1987&CONSTITUTION&
ARTICLE&II&&DECLARATION&OF&PRINCIPLES&AND&STATE&POLICIES&
&
Section&9.$The$State$shall$promote$a$just$and$dynamic$social$order$that$will$ensure$the$prosperity$and$
independence$of$the$nation$and$free$the$people$from$poverty$through$policies$that$provide$adequate$social$
services,$promote$full$employment,$a$rising$standard$of$living,$and$an$improved$quality$of$life$for$all.$
$
1987&CONSTITUTION&
ARTICLE&XIII&&SOCIAL&JUSTICE&AND&HUMAN&RIGHTS&
&
Section&3.$The$State$shall$afford$full$protection$to$labor,$local$and$overseas,$organized$and$unorganized,$and$
promote$full$employment$and$equality$of$employment$opportunities$for$all.$
$
RA&8042,&as&amended&by&RA&10022&
MIGRANT&WORKERS&AND&OVERSEAS&FILIPINOS&ACT&OF&1995&
&
Section&2.&Declaration(of(Policies.$$
(a) In$the$pursuit$of$an$independent$foreign$policy$and$while$considering$national$sovereignty,$territorial$
integrity,$national$interest$and$the$right$to$self[determination$paramount$in$its$relations$with$other$states,$
the$State$shall,$at$all$times,$uphold$the$dignity$of$its$citizens$whether$in$country$or$overseas,$in$general,$and$
Filipino$migrant$workers,$in$particular,$continuously$monitor$international$conventions,$adopt/be$signatory$to$
and$ratify$those$that$guarantee$protection$to$our$migrant$workers,$and$endeavor$to$enter$into$bilateral$
agreements$with$countries$hosting$overseas$Filipino$workers.$
(b) $The$State$shall$afford$full$protection$to$labor,$local$and$overseas,$organized$and$unorganized,$and$promote$
full$employment$and$equality$of$employment$opportunities$for$all.$Towards$this$end,$the$State$shall$provide$
adequate$and$timely$social,$economic$and$legal$services$to$Filipino$migrant$workers.$
(c) While$recognizing$the$significant$contribution$of$Filipino$migrant$workers$to$the$national$economy$through$
their$foreign$exchange$remittances,$the$State$does$not$promote$overseas$employment$as$a$means$to$sustain$
economic$growth$an$achieve$national$development.$The$existence$of$the$overseas$employment$program$
rests$solely$on$the$assurance$that$the$dignity$and$fundamental$human$rights$and$freedoms$of$the$Filipino$
citizen$shall$not,$at$any$time,$be$compromised$or$violated.$The$State,$therefore,$shall$continuously$create$
local$employment$opportunities$and$promote$the$equitable$distribution$of$wealth$and$the$benefits$of$
development.$
(d) The$State$affirms$the$fundamental$equality$before$the$law$of$women$and$men$and$the$significant$role$of$
women$in$nation[building.$Recognizing$the$contribution$of$overseas$migrant$women$workers$and$their$
particular$vulnerabilities,$the$State$shall$apply$gender$sensitive$criteria$in$the$formulation$and$implementation$
of$policies$and$programs$affecting$migrant$workers$and$the$composition$of$bodies$tasked$for$the$welfare$of$
migrant$workers.$
(e) Free$access$to$the$courts$and$quasi[judicial$bodies$and$adequate$legal$assistance$shall$not$be$denied$to$any$
person$by$reason$of$poverty.$In$this$regard,$it$is$imperative$that$an$effective$mechanism$be$instituted$to$
ensure$that$the$rights$and$interest$of$distressed$overseas$Filipinos,$in$general,$and$Filipino$migrant$workers,$
in$particular,$whether$regular/documented$or$irregular/undocumented,$are$adequately$protected$and$
safeguarded.$
(f) The$right$of$Filipino$migrant$workers$and$all$overseas$Filipinos$to$participate$in$the$democratic$decision[
making$processes$of$the$State$and$to$be$represented$in$institutions$relevant$to$overseas$employment$is$
recognized$and$guaranteed.$
(g) The$State$recognizes$that$the$most$effective$tool$for$empowerment$is$the$possession$of$skills$by$migrant$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$21$of$80$

workers.$The$government$shall$provide$them$free$and$accessible$skills$development$and$enhancement$
programs.$Pursuant$to$this$and$as$soon$as$practicable,$the$government$shall$deploy$and/or$allow$the$
deployment$only$of$skilled$Filipino$workers.$
(h) The$State$recognizes$non[governmental$organizations,$trade$unions,$workers$associations,$stakeholders$and$
their$similar$entities$duly$recognized$as$legitimate,$are$partners$of$the$State$in$the$protection$of$Filipino$
migrant$workers$and$in$the$promotion$of$their$welfare.$The$State$shall$cooperate$with$them$in$a$spirit$of$trust$
and$mutual$respect.$The$significant$contribution$of$recruitment$and$manning$agencies$shall$from$part$this$
partnership.$
(i) Government$fees$and$other$administrative$costs$of$recruitment,$introduction,$placement$and$assistance$to$
migrant$workers$shall$be$rendered$free$without$prejudice$to$the$provision$of$Sec.$36$hereof.$
$
Nonetheless,$the$deployment$of$Filipino$overseas$workers,$whether$land[$based$or$sea[based,$by$local$service$
contractors$and$manning$agencies$employing$them$shall$be$encouraged.$Appropriate$incentives$may$be$
extended$to$them.$$
$
Section&4.&Deployment(of(Migrant(Workers.((The$State$shall$allow$the$deployment$of$overseas$Filipino$workers$
only$in$countries$where$the$rights$of$Filipino$migrant$workers$are$protected.$The$government$recognizes$any$of$
the$following$as$a$guarantee$on$the$part$of$the$receiving$country$for$the$protection$of$the$rights$of$overseas$
Filipino$workers:$
(a) It$has$existing$labor$and$social$laws$protecting$the$rights$of$workers,$including$migrant$workers;$
(b) It$is$a$signatory$to$and/or$a$ratifier$of$multilateral$conventions,$declarations$or$resolutions$relating$to$the$
protection$of$workers,$including$migrant$workers;$and$
(c) It$has$concluded$a$bilateral$agreement$or$arrangement$with$the$government$on$the$protection$of$the$rights$
of$overseas$Filipino$Workers:$
$
Provided,$That$the$receiving$country$is$taking$positive,$concrete$measures$to$protect$the$rights$of$migrant$
workers$in$furtherance$of$any$of$the$guarantees$under$subparagraphs$(a),$(b)$and$(c)$hereof.$
$
In$the$absence$of$a$clear$showing$that$any$of$the$aforementioned$guarantees$exists$in$the$country$of$destination$
of$the$migrant$workers,$no$permit$for$deployment$shall$be$issued$by$the$Philippine$Overseas$Employment$
Administration$(POEA).$
$
The$members$of$the$POEA$Governing$Board$who$actually$voted$in$favor$of$an$order$allowing$the$deployment$of$
migrant$workers$without$any$of$the$aforementioned$guarantees$shall$suffer$the$penalties$of$removal$or$dismissal$
from$service$with$disqualification$to$hold$any$appointive$public$office$for$five$(5)$years,$Further,$the$government$
official$or$employee$responsible$for$the$issuance$of$the$permit$or$for$allowing$the$deployment$of$migrant$workers$
in$violation$of$this$section$and$in$direct$contravention$of$an$order$by$the$POEA$Governing$Board$prohibiting$
deployment$shall$be$meted$the$same$penalties$in$this$section.$
$
For$this$purpose,$the$Department$of$Foreign$Affairs,$through$its$foreign$posts,$shall$issue$a$certification$to$the$
POEA,$specifying$therein$the$pertinent$provisions$of$the$receiving$countrys$labor/social$law,$or$the$
convention/declaration/resolution,$or$the$bilateral$agreement/arrangement$which$protect$the$rights$of$migrant$
workers.$
$
The$State$shall$also$allow$the$deployment$of$overseas$Filipino$workers$to$vessels$navigating$the$foreign$seas$or$to$
installations$located$offshore$or$on$high$seas$whose$owners/employers$are$compliant$with$international$laws$and$
standards$that$protect$the$rights$of$migrant$workers.$
$
The$State$shall$likewise$allow$the$deployment$of$overseas$Filipino$workers$to$companies$and$contractors$with$
international$operations:$Provided,$That$they$are$compliant$with$standards,$conditions$and$requirements,$as$
embodied$in$the$employment$contracts$prescribed$by$the$POEA$and$in$accordance$with$internationally[accepted$
standards.$
$
Section&5.&Termination(or(Ban(on(Deployment.((Notwithstanding$the$provisions$of$Section$4$hereof,$in$pursuit$of$
the$national$interest$or$when$public$welfare$so$requires,$the$POEA$Governing$Board,$after$consultation$with$the$
Department$of$Foreign$Affairs,$may,$at$any$time,$terminate$or$impose$a$ban$on$the$deployment$of$migrant$
workers.$
$
2.

Private$Sector$$Agencies$and$Entities$

$
a.

Ish$Guidote$

Parties$
$
1)
Worker$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$22$of$80$

$
Article&13.(Definitions.$$
(a) Worker$means$any$member$of$the$labor$force,$whether$employed$or$unemployed.$$
$
RA&8042,&as&amended&by&RA&10022&
$
Section&3.$Definitions.$$For$purposes$of$this$Act:$
(a) Overseas&Filipino&Worker$refers$to$a$person$who$is$to$be$engaged,$is$engaged$or$has$
been$engaged$in$a$remunerated$activity$in$a$state$of$which$he$or$she$is$not$a$citizen$or$on$
board$a$vessel$navigating$the$foreign$seas$other$than$a$government$ship$used$for$military$
or$non[commercial$purposes$or$on$an$installation$located$offshore$or$on$the$high$seas;$to$
be$used$interchangeably$with$migrant$worker.$
$

2)

Private$Employment$Agency$
$
Article&13.(Definitions.$$
(c) Private&feeTcharging&employment&agency$means$any$person$or$entity$engaged$in$
recruitment$and$placement$of$workers$for$a$fee$which$is$charged,$directly$or$indirectly,$
from$the$workers$or$employers$or$both.$
(d) License$means$a$document$issued$by$the$Department$of$Labor$authorizing$a$person$or$
entity$to$operate$a$private$employment$agency.$

$
Article&12.&Statement(of(objectives.$$It$is$the$policy$of$the$State:$
(f) To$strengthen$the$network$of$public$employment$offices$and$rationalize$the$participation$
of$the$private$sector$in$the$recruitment$and$placement$of$workers,$locally$and$overseas,$to$
serve$national$development$objectives;$
$
Article&14.(Employment(promotion.$$The$Secretary$of$Labor$shall$have$the$power$and$
authority:$
(a) To$organize$and$establish$new$employment$offices$in$addition$to$the$existing$employment$
offices$under$the$Department$of$Labor$as$the$need$arises;$
$
3)

Private$Recruitment$Entity$
$
Article&13.(Definitions.$$
(e) Private&recruitment&entity$means$any$person$or$association$engaged$in$the$recruitment$
and$placement$of$workers,$locally$or$overseas,$without$charging,$directly$or$indirectly,$any$
fee$from$the$workers$or$employers.$
(f) Authority$means$a$document$issued$by$the$Department$of$Labor$authorizing$a$person$
or$association$to$engage$in$recruitment$and$placement$activities$as$a$private$recruitment$
entity.$
$
Article&12.&Statement(of(objectives.$$It$is$the$policy$of$the$State:$
(f) To$strengthen$the$network$of$public$employment$offices$and$rationalize$the$participation$
of$the$private$sector$in$the$recruitment$and$placement$of$workers,$locally$and$overseas,$to$
serve$national$development$objectives;$

$
Article&14.(Employment(promotion.$$The$Secretary$of$Labor$shall$have$the$power$and$
authority:$
(a) To$organize$and$establish$new$employment$offices$in$addition$to$the$existing$employment$
offices$under$the$Department$of$Labor$as$the$need$arises;$
$
GOVERNMENT&AGENCIES&IN&CHARGE&OF&RECRUITMENT&AND&PLACEMENT&

Local$employment$$Bureau$of$Local$Employment$(BLE);$and$

Overseas$employment$$Philippine$Overseas$Employment$Administration$(POEA).$

$
b.

Ish$Guidote$

Recruitment$and$Placement$
$
1)
Local$Employment$
$
Article&13.(Definitions.$$
(b) Recruitment&and&placement$refers$to$any$act$of$canvassing,$enlisting,$contracting,$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$23$of$80$

transporting,$utilizing,$hiring$or$procuring$workers,$and$includes$referrals,$contract$
services,$promising$or$advertising$for$employment,$locally$or$abroad,$whether$for$profit$or$
not:$Provided,$That$any$person$or$entity$which,$in$any$manner,$offers$or$promises$for$a$
fee,$employment$to$two$or$more$persons$shall$be$deemed$engaged$in$recruitment$and$
placement.$
$
PEOPLE&V.&PANIS$

The$number$of$persons$recruited$is$not$an$essential$element$of$the$act$of$recruitment$and$
placement;$

The$purpose$of$the$proviso$is$merely$to$raise$a$presumption.$

PEOPLE&V.&GOCE$

The$complainant$must$prove$that$the$defendant$represented$himself$to$be$with$power$or$
ability$to$send$the$complainant$abroad.$
$
DARWIN&V.&CA&AND&PEOPLE$

It$must$be$shown$that$the$accused$actually$offered$a$job$to$the$complainant.$

$
2)

Overseas$Employment$
$
RA&8042,&as&amended&by&RA&10022&
&
Section&6.$Definition.$$For$purposes$of$this$Act,$illegal$recruitment$shall$mean$any$act$of$
canvassing,$enlisting,$contracting,$transporting,$utilizing,$hiring,$or$procuring$workers$and$
includes$referring,$contract$services,$promising$or$advertising$for$employment$abroad,$
whether$for$profit$or$not,$when$undertaken$by$non[licensee$or$non[holder$of$authority$
contemplated$under$Article$13(f)$of$Presidential$Decree$No.$442,$as$amended,$otherwise$
known$as$the$Labor$Code$of$the$Philippines:$Provided,$That$any$such$non[licensee$or$non[
holder$who,$in$any$manner,$offers$or$promises$for$a$fee$employment$abroad$to$two$or$more$
persons$shall$be$deemed$so$engaged.$It$shall$likewise$include$the$following$acts,$whether$
committed$by$any$person,$whether$a$non[licensee,$non[holder,$licensee$or$holder$of$authority:$
(a) To$charge$or$accept$directly$or$indirectly$any$amount$greater$than$that$specified$in$the$
schedule$of$allowable$fees$prescribed$by$the$Secretary$of$Labor$and$Employment,$or$to$
make$a$worker$pay$or$acknowledge$any$amount$greater$than$that$actually$received$by$him$
as$a$loan$or$advance;$
(b) To$furnish$or$publish$any$false$notice$or$information$or$document$in$relation$to$
recruitment$or$employment;$
(c) To$give$any$false$notice,$testimony,$information$or$document$or$commit$any$act$of$
misrepresentation$for$the$purpose$of$securing$a$license$or$authority$under$the$Labor$
Code,$or$for$the$purpose$of$documenting$hired$workers$with$the$POEA,$which$include$the$
act$of$reprocessing$workers$through$a$job$order$that$pertains$to$nonexistent$work,$work$
different$from$the$actual$overseas$work,$or$work$with$a$different$employer$whether$
registered$or$not$with$the$POEA;$
(d) To$include$or$attempt$to$induce$a$worker$already$employed$to$quit$his$employment$in$
order$to$offer$him$another$unless$the$transfer$is$designed$to$liberate$a$worker$from$
oppressive$terms$and$conditions$of$employment;$
(e) To$influence$or$attempt$to$influence$any$person$or$entity$not$to$employ$any$worker$who$
has$not$applied$for$employment$through$his$agency$or$who$has$formed,$joined$or$
supported,$or$has$contacted$or$is$supported$by$any$union$or$workers$organization;$
(f) To$engage$in$the$recruitment$or$placement$of$workers$in$jobs$harmful$to$public$health$or$
morality$or$to$the$dignity$of$the$Republic$of$the$Philippines;$
(g) To$obstruct$or$attempt$to$obstruct$inspection$by$the$Secretary$of$Labor$and$Employment$
or$by$his$duly$authorized$representative;$
(h) To$fail$to$submit$reports$on$the$status$of$employment,$placement$vacancies,$remittance$
of$foreign$exchange$earnings,$separation$from$jobs,$departures$and$such$other$matters$or$
information$as$may$be$required$by$the$Secretary$of$Labor$and$Employment;$
(i) To$substitute$or$alter$to$the$prejudice$of$the$worker,$employment$contracts$approved$and$
verified$by$the$Department$of$Labor$and$Employment$from$the$time$of$actual$signing$
thereof$by$the$parties$up$to$and$including$the$period$of$the$expiration$of$the$same$
without$the$approval$of$the$Department$of$Labor$and$Employment;$
(j) For$an$officer$or$agent$of$a$recruitment$or$placement$agency$to$become$an$officer$or$
member$of$the$Board$of$any$corporation$engaged$in$travel$agency$or$to$be$engaged$
directly$or$indirectly$in$the$management$of$travel$agency;$

Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$24$of$80$

(k) To$withhold$or$deny$travel$documents$from$applicant$workers$before$departure$for$
monetary$or$financial$considerations,$or$for$any$other$reasons,$other$than$those$
authorized$under$the$Labor$Code$and$its$implementing$rules$and$regulations;$
(l) Failure$to$actually$deploy$a$contracted$worker$without$valid$reason$as$determined$by$the$
Department$of$Labor$and$Employment;$$
(m) Failure$to$reimburse$expenses$incurred$by$the$worker$in$connection$with$his$
documentation$and$processing$for$purposes$of$deployment,$in$cases$where$the$
deployment$does$not$actually$take$place$without$the$workers$fault.$Illegal$recruitment$
when$committed$by$a$syndicate$or$in$large$scale$shall$be$considered$an$offense$involving$
economic$sabotage;$and$
(n) To$allow$a$non[Filipino$citizen$to$head$or$manage$a$licensed$recruitment/manning$agency.$
$
Illegal$recruitment$is$deemed$committed$by$a$syndicate$if$carried$out$by$a$group$of$three$(3)$or$
more$persons$conspiring$or$confederating$with$one$another.$It$is$deemed$committed$in$large$
scale$if$committed$against$three$(3)$or$more$persons$individually$or$as$a$group.$
$
In$addition$to$the$acts$enumerated$above,$it$shall$also$be$unlawful$for$any$person$or$entity$to$
commit$the$following$prohibited$acts:$
(1) Grant$a$loan$to$an$overseas$Filipino$worker$with$interest$exceeding$eight$percent$(8%)$per$
annum,$which$will$be$used$for$payment$of$legal$and$allowable$placement$fees$and$make$
the$migrant$worker$issue,$either$personally$or$through$a$guarantor$or$accommodation$
party,$postdated$checks$in$relation$to$the$said$loan;$
(2) Impose$a$compulsory$and$exclusive$arrangement$whereby$an$overseas$Filipino$worker$is$
required$to$avail$of$a$loan$only$from$specifically$designated$institutions,$entities$or$
persons;$
(3) Refuse$to$condone$or$renegotiate$a$loan$incurred$by$an$overseas$Filipino$worker$after$the$
latters$employment$contract$has$been$prematurely$terminated$through$no$fault$of$his$or$
her$own;$
(4) Impose$a$compulsory$and$exclusive$arrangement$whereby$an$overseas$Filipino$worker$is$
required$to$undergo$health$examinations$only$from$specifically$designated$medical$clinics,$
institutions,$entities$or$persons,$except$in$the$case$of$a$seafarer$whose$medical$
examination$cost$is$shouldered$by$the$principal/shipowner;$
(5) Impose$a$compulsory$and$exclusive$arrangement$whereby$an$overseas$Filipino$worker$is$
required$to$undergo$training,$seminar,$instruction$or$schooling$of$any$kind$only$from$
specifically$designated$institutions,$entities$or$persons,$except$for$recommendatory$
trainings$mandated$by$principals/shipowners$where$the$latter$shoulder$the$cost$of$such$
trainings;$
(6) For$a$suspended$recruitment/manning$agency$to$engage$in$any$kind$of$recruitment$
activity$including$the$processing$of$pending$workers$applications;$and$
(7) For$a$recruitment/manning$agency$or$a$foreign$principal/employer$to$pass$on$the$overseas$
Filipino$worker$or$deduct$from$his$or$her$salary$the$payment$of$the$cost$of$insurance$fees,$
premium$or$other$insurance$related$charges,$as$provided$under$the$compulsory$workers$
insurance$coverage.$
$
The$persons$criminally$liable$for$the$above$offenses$are$the$principals,$accomplices$and$
accessories.$In$case$of$juridical$persons,$the$officers$having$ownership,$control,$management$
or$direction$of$their$business$who$are$responsible$for$the$commission$of$the$offense$and$the$
responsible$employees/agents$thereof$shall$be$liable.$
$
In$the$filing$of$cases$for$illegal$recruitment$or$any$of$the$prohibited$acts$under$this$section,$the$
Secretary$of$Labor$and$Employment,$the$POEA$Administrator$or$their$duly$authorized$
representatives,$or$any$aggrieved$person$may$initiate$the$corresponding$criminal$action$with$
the$appropriate$office.$For$this$purpose,$the$affidavits$and$testimonies$of$operatives$or$
personnel$from$the$Department$of$Labor$and$Employment,$POEA$and$other$law$enforcement$
agencies$who$witnessed$the$acts$constituting$the$offense$shall$be$sufficient$to$prosecute$the$
accused.$
$
In$the$prosecution$of$offenses$punishable$under$this$section,$the$public$prosecutors$of$the$
Department$of$Justice$shall$collaborate$with$the$anti[illegal$recruitment$branch$of$the$POEA$
and,$in$certain$cases,$allow$the$POEA$lawyers$to$take$the$lead$in$the$prosecution.$The$POEA$
lawyers$who$act$as$prosecutors$in$such$cases$shall$be$entitled$to$receive$additional$allowances$
as$may$be$determined$by$the$POEA$Administrator.$
$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$25$of$80$

The$filing$of$an$offense$punishable$under$this$Act$shall$be$without$prejudice$to$the$filing$of$
cases$punishable$under$other$existing$laws,$rules$or$regulations.$
$

c.

Allowed$and$Protected$Entities$
$
1)
Allowed$Private$Agencies$and$Entities$
$
Article&16.&Private(recruitment.$$Except$as$provided$in$Chapter$II$of$this$Title,$no$person$or$
entity$other$than$the$public$employment$offices,$shall$engage$in$the$recruitment$and$
placement$of$workers.$
$
WHO&ARE&ALLOWED&TO&RECRUIT&AND&PLACE&WORKERS&FOR&OVERSEAS&EMPLOYMENTA&
SUMMARY$

Public$employment$offices;$

Private$recruitment$entities;$

Private$employment$agencies;$

Shipping$or$manning$agents$or$representatives;$

POEA;$

Construction$contractors$(those$authorized$by$DOLE$and$the$Construction$Industry$
Authority);$

Members$of$the$diplomatic$corps;$and$

Other$persons$or$entities$as$may$be$authorized$by$the$Secretary$of$Labor.$
$
Article&25.&Private(sector(participation(in(the(recruitment(and(placement(of(workers.$$Pursuant$
to$national$development$objectives$and$in$order$to$harness$and$maximize$the$use$of$private$
sector$resources$and$initiative$in$the$development$and$implementation$of$a$comprehensive$
employment$program,$the$private$employment$sector$shall$participate$in$the$recruitment$and$
placement$of$workers,$locally$and$overseas,$under$such$guidelines,$rules$and$regulations$as$
may$be$issued$by$the$Secretary$of$Labor.$
$
JURISDICTION&OF&THE&POEA$(compared&to&that&of&the&LA)$

Violations$of$POEA$rules$and$regulations;$

Disciplinary$cases;$

Administrative$cases$involving$OFWs.$
FUNCTIONS&OF&THE&POEA$

Regulatory;$

Enforcement;$

Limited$or$special$adjudicatory.$
$
VALIDITY&OF&POEA&REGULATIONS$

Section$4(a)$of$EO$797$authorizes$the$POEA$governing$board$to$promulgate$rules$and$
regulations.$

Such$rules$are$subject$to$the$publication$requirement$laid$down$in$Taada(v.(Tuvera.$
$
Article&18.&Ban(on(directNhiring.$$No$employer$may$hire$a$Filipino$worker$for$overseas$
employment$except$through$the$Boards$and$entities$authorized$by$the$Secretary$of$Labor.$
Direct[hiring$by$members$of$the$diplomatic$corps,$international$organizations$and$such$other$
employers$as$may$be$allowed$by$the$Secretary$of$Labor$is$exempted$from$this$provision.$
$
ARTICLE&18&DOES&NOT&INCLUDE&NAMETHIRES&

Name[hires$are$those$who$are$able$to$secure$employment$without$intervention$of$any$
agency$or$entity.$

Their$employment$still$has$to$be$processed$by$the$POEA:$
o Employment$contract;$
o Valid$passport;$
o Employment$visa/work$permit;$
o Certificate$of$medical$fitness;$
o Certificate$of$attendance$(for$required$employment$orientation/briefing).$
$
Article&12.&Statement(of(objectives.$$It$is$the$policy$of$the$State:$
(f) To$strengthen$the$network$of$public$employment$offices$and$rationalize$the$participation$

Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$26$of$80$

of$the$private$sector$in$the$recruitment$and$placement$of$workers,$locally$and$overseas,$to$
serve$national$development$objectives;$
$
2002&POEA&RULES&AND&REGULATIONS&
PART&II,&RULE&I&
$
Section&1.$Qualifications.$$Only$those$who$possess$the$following$qualifications$may$be$
permitted$to$engage$in$the$business$of$recruitment$and$placement$of$Filipino$workers:$
a. Filipino$citizens,$partnerships$or$corporations$at$least$seventy$five$percent$(75%)$of$the$
authorized$capital$stock$of$which$is$owned$and$controlled$by$Filipino$citizens;$
b. A$minimum$capitalization$of$Two$Million$Pesos$(P2,000,000.00)$in$case$of$a$single$
proprietorship$or$partnership$and$a$minimum$paid[up$capital$of$Two$Million$Pesos$
(P2,000,000.00)$in$case$of$a$corporation;$Provided$that$those$with$existing$licenses$shall,$
within$four$years$from$effectivity$hereof,$increase$their$capitalization$or$paid$up$capital,$as$
the$case$may$be,$to$Two$Million$Pesos$(P2,000,000.00)$at$the$rate$of$Two$Hundred$Fifty$
Thousand$Pesos$(P250,000.00)$every$year.$
c. Those$not$otherwise$disqualified$by$law$or$other$government$regulations$to$engage$in$the$
recruitment$and$placement$of$workers$for$overseas$employment.$
$
2)

Ish$Guidote$

Prohibited$Business$Agencies$and$Entities$
$
Article&16.&Private(recruitment.$$Except$as$provided$in$Chapter$II$of$this$Title,$no$person$or$
entity$other$than$the$public$employment$offices,$shall$engage$in$the$recruitment$and$
placement$of$workers.$
$
Article&18.&Ban(on(directNhiring.$$No$employer$may$hire$a$Filipino$worker$for$overseas$
employment$except$through$the$Boards$and$entities$authorized$by$the$Secretary$of$Labor.$
Direct[hiring$by$members$of$the$diplomatic$corps,$international$organizations$and$such$other$
employers$as$may$be$allowed$by$the$Secretary$of$Labor$is$exempted$from$this$provision.$
$
Article&25.&Private(sector(participation(in(the(recruitment(and(placement(of(workers.$$Pursuant$
to$national$development$objectives$and$in$order$to$harness$and$maximize$the$use$of$private$
sector$resources$and$initiative$in$the$development$and$implementation$of$a$comprehensive$
employment$program,$the$private$employment$sector$shall$participate$in$the$recruitment$and$
placement$of$workers,$locally$and$overseas,$under$such$guidelines,$rules$and$regulations$as$
may$be$issued$by$the$Secretary$of$Labor.$
$
Article&26.&Travel(agencies(prohibited(to(recruit.$$Travel$agencies$and$sales$agencies$of$airline$
companies$are$prohibited$from$engaging$in$the$business$of$recruitment$and$placement$of$
workers$for$overseas$employment$whether$for$profit$or$not.$
$
2002&POEA&RULES&AND&REGULATIONS&
PART&II,&RULE&I&
$
Section&2.$Disqualification.$$The$following$are$not$qualified$to$engage$in$the$business$of$
recruitment$and$placement$of$Filipino$workers$overseas:$
a. Travel$agencies$and$sales$agencies$of$airline$companies;$
b. Officers$or$members$of$the$Board$of$any$corporation$or$members$in$a$partnership$
engaged$in$the$business$of$a$travel$agency;$
c. Corporations$and$partnerships,$when$any$of$its$officers,$members$of$the$board$or$
partners,$is$also$an$officer,$member$of$the$board$or$partner$of$a$corporation$or$
partnership$engaged$in$the$business$of$a$travel$agency;$
d. Persons,$partnerships$or$corporations$which$have$derogatory$records,$such$as$but$not$
limited$to$the$following:$
1. Those$certified$to$have$derogatory$record$or$information$by$the$National$Bureau$of$
Investigation$or$by$the$Anti[Illegal$Recruitment$Branch$of$the$POEA;$
2. Those$against$whom$probable$cause$or$prima$facie$finding$of$guilt$for$illegal$
recruitment$or$other$related$cases$exists;$
3. Those$convicted$for$illegal$recruitment$or$other$related$cases$and/or$crimes$involving$
moral$turpitude;$and$
4. Those$agencies$whose$licenses$have$been$previously$revoked$or$cancelled$by$the$
Administration$for$violation$of$RA$8042,$PD$442$as$amended$and$their$implementing$
rules$and$regulations$as$well$as$these$rules$and$regulations.$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$27$of$80$

e.

f.

All$applicants$for$issuance/renewal$of$license$shall$be$required$to$submit$clearances$
from$the$National$Bureau$of$Investigation$and$Anti[illegal$Recruitment$Branch,$POEA,$
including$clearances$for$their$respective$officers$and$employees.$
Any$official$or$employee$of$the$DOLE,$POEA,$OWWA,$DFA$and$other$government$agencies$
directly$involved$in$the$implementation$of$R.A.$8042,$otherwise$known$as$Migrant$
Workers$and$Overseas$Filipino$Act$of$1995$and/or$any$of$his/her$relatives$within$the$fourth$
civil$degree$of$consanguinity$or$affinity;$and$
Persons$or$partners,$officers$and$Directors$of$corporations$whose$licenses$have$been$
previously$cancelled$or$revoked$for$violation$of$recruitment$laws.$

$
Hornales&v.&NLRC$(364$SCRA$778,$2001)$
Hornales$was$employed$by$JEAC$on$behalf$of$Step$Up$agency$as$a$fisherman$in$Singapore.$
While$there,$he$was$maltreated$and$subjected$to$inhumane$working$conditions.$Upon$
repatriation,$he$asked$for$his$salaries.$He$was$told$he$would$be$reassigned$elsewhere,$but$he$
was$not.$He$filed$a$money$claim$against$private$respondents.$They$alleged$that$Hornales$was$
not$recruited.$Instead,$they$claimed$that$he$went$to$Singapore$as$a$tourist.$POEA$granted$
petitioners$money$claim.$NLRC$reversed$and$held$that$JEAC$was$a$mere$travel$agency$and$is$
not$authorized$to$deploy$fishermen.$SC$reversed$the$NLRC$and$upheld$the$finding$of$an$
employer[employee$relationship.$It$held$that$JEAC$recruited$Hornales.$Among$the$evidence$
presented$were$photocopies$of$checks$issued$by$private$respondent$to$represent$advances$to$
petitioners$family.$There$was$also$an$agreement$wherein$petitioner$authorized$Victor$Lim$to$
deduct$amounts$from$his$salary.$This$agreement$shows$that$there$is$an$internal$arrangement$
between$Cayanan$and$Victor$Lim.$$
$
d.

Government$Techniques$of$Regulation$$Private$Recruitment$
$
1)
Licensing$
$
a) Qualifications$
$
Article&27.&Citizenship(requirement.$$Only$Filipino$citizens$or$corporations,$
partnerships$or$entities$at$least$seventy[five$percent$(75%)$of$the$authorized$and$
voting$capital$stock$of$which$is$owned$and$controlled$by$Filipino$citizens$shall$be$
permitted$to$participate$in$the$recruitment$and$placement$of$workers,$locally$or$
overseas.$
$
Article&28.&Capitalization.$$All$applicants$for$authority$to$hire$or$renewal$of$license$
to$recruit$are$required$to$have$such$substantial$capitalization$as$determined$by$the$
Secretary$of$Labor.$
$
2002&POEA&RULES&AND&REGULATIONS&
PART&II,&RULE&I&
$
Section&1.$Qualifications.$$Only$those$who$possess$the$following$qualifications$may$
be$permitted$to$engage$in$the$business$of$recruitment$and$placement$of$Filipino$
workers:$
a. Filipino$citizens,$partnerships$or$corporations$at$least$seventy$five$percent$(75%)$
of$the$authorized$capital$stock$of$which$is$owned$and$controlled$by$Filipino$
citizens;$
b. A$minimum$capitalization$of$Two$Million$Pesos$(P2,000,000.00)$in$case$of$a$
single$proprietorship$or$partnership$and$a$minimum$paid[up$capital$of$Two$
Million$Pesos$(P2,000,000.00)$in$case$of$a$corporation;$Provided$that$those$with$
existing$licenses$shall,$within$four$years$from$effectivity$hereof,$increase$their$
capitalization$or$paid$up$capital,$as$the$case$may$be,$to$Two$Million$Pesos$
(P2,000,000.00)$at$the$rate$of$Two$Hundred$Fifty$Thousand$Pesos$(P250,000.00)$
every$year.$

$
FOR&LOCAL&EMPLOYMENT$

Single$proprietorship$or$partnership$$at$least$P200,000$net$worth$

Corporation$$minimum$paid[up$capital$of$P500,000$

$
b)

Ish$Guidote$

Issuance$of$License$
$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$28$of$80$

Article&29.&NonNtransferability(of(license(or(authority.$$No$license$or$authority$shall$
be$used$directly$or$indirectly$by$any$person$other$than$the$one$in$whose$favor$it$was$
issued$or$at$any$place$other$than$that$stated$in$the$license$or$authority$be$
transferred,$conveyed$or$assigned$to$any$other$person$or$entity.$Any$transfer$of$
business$address,$appointment$or$designation$of$any$agent$or$representative$
including$the$establishment$of$additional$offices$anywhere$shall$be$subject$to$the$
prior$approval$of$the$Department$of$Labor.$
$
CONDUCT&OF&BUSINESS$

Only$at$the$authorized$business$address.$

Provincial$recruitment$shall$be$allowed$upon$written$authority$from$POEA.$
o Must$be$supervised$by$the$Regional$Director$or$his$duly$authorized$
representative.$
o Cannot$be$done$in$houses$or$secluded$places.$
$
Article&30.(Registration(fees.$$The$Secretary$of$Labor$shall$promulgate$a$schedule$of$
fees$for$the$registration$of$all$applicants$for$license$or$authority.$
$
Article&31.&Bonds.$$All$applicants$for$license$or$authority$shall$post$such$cash$and$
surety$bonds$as$determined$by$the$Secretary$of$Labor$to$guarantee$compliance$with$
prescribed$recruitment$procedures,$rules$and$regulations,$and$terms$and$conditions$
of$employment$as$may$be$appropriate.$
$
AMOUNT&OF&THE&BOND$

Local$Employment$(to$be$paid$before$approval)$
o Cash$bond$=$P25,000$and$
o Surety$bond$=$P100,000.$
o Valid$for$2$years.$

Overseas$Employment$(to$be$paid$upon$approval$and$confirmation)$
o Deposited$in$escrow$=$P1,000,000$and$
o Surety$bond$=$P100,000.$
o Covers$the$period$of$validity$of$the$license.$
ENFORCEMENT&

POEA$possesses$power$to$enforce$liability$under$cash$and$surety$bonds.$

Used$to$guarantee$effective$recourse$against$companies$when$held$liable$for$
employees$claims.$
$
APART&FROM&APPEAL&BOND$

An$appeal$bond$is$still$required$under$Art.$223$of$the$Labor$Code.$

Cash$and$surety$bonds$shall$be$answerable$for:$
o Violations$of$the$conditions$of$the$license$or$authority;$
o Violations$of$Labor$Code$provisions;$
o Violations$of$POEA$Rules;$or$
o Settlement$of$other$liabilities.$
GARNISHMENT&OF&BONDS&

Only$for$employee[related$claims$and$violations$of$labor$laws.$

Cannot$be$used$to$satisfy$claim$for$payment$of$airline$tickets$because$such$act$
does$not$violate$conditions$of$license,$employment$contracts,$or$labor$laws.$
$
EFFECT&OF&A&VALID&GARNISHMENT$
1. An$order$or$notice$of$garnishment$is$served$upon$the$bank.$
2. The$amount$is$earmarked.$
3. Licensee/holder$of$authority$is$required$to$replenish$the$escrow$deposit$within$
15$days$of$receipt$of$notice.$
4. Failure$to$replenish$shall$be$cause$for$suspension$of$license.$
$
RELEASE&OF&CASH&BOND&OR&DEPOSIT&IN&ESCROW$

Local$Employment$$upon$voluntary$surrender$of$license.$
o Entitled$to$refund$on$the$cash$bond$upon$posting$of$surety$bond.$
o Valid$for$3$years$from$expiration.$

Overseas$Employment$$upon$voluntary$surrender$of$license.$

Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$29$of$80$

Ish$Guidote$

o
o

Entitled$to$return$of$deposit$in$escrow$upon$posting$of$surety$bond.$
Valid$for$4$years$from$expiration.$

LAW&AS&PART&OF&THE&BOND$

The$conditions$for$a$bond$required$in$the$provisions$of$the$statute$or$rule$
providing$for$the$submission$of$such$bond$are$incorporated$or$built[in$to$all$
bonds$tendered$under$that$statute$or$regulation.$
$
2002&POEA&RULES&AND&REGULATIONS&
PART&II,&RULE&II&
&
Section&4.&Payment(of(Fees(and(Posting(of(Bonds.$$Upon$approval$of$the$application,$
the$applicant$shall$pay$a$license$fee$of$P50,000.00.$It$shall$submit$an$Escrow$
Agreement$in$the$amount$of$P1,000,000.00,$confirmation$of$escrow$deposit$with$an$
accredited$reputable$bank$and$a$surety$bond$of$P100,000.00$from$a$bonding$
company$acceptable$to$the$Administration$and$accredited$with$the$Insurance$
Commission.$
$
Agencies$with$existing$licenses$shall,$within$four$years$from$effectivity$hereof,$
increase$their$Escrow$Deposit$to$One$Million$Pesos.$
$
The$bonds$and$escrow$shall$answer$for$all$valid$and$legal$claims$arising$from$
violations$of$the$conditions$for$the$grant$and$use$of$the$license,$and/or$accreditation$
and$contracts$of$employment.$The$bonds$and$escrow$shall$likewise$guarantee$
compliance$with$the$provisions$of$the$Code$and$its$implementing$rules$and$
regulations$relating$to$recruitment$and$placement,$the$Rules$of$the$Administration$
and$relevant$issuances$of$the$Department$and$all$liabilities$which$the$Administration$
may$impose.$The$surety$bonds$shall$include$the$condition$that$notice$to$the$principal$
is$notice$to$the$surety$and$that$any$judgment$against$the$principal$in$connection$with$
matters$falling$under$POEAs/NLRCs$jurisdiction$shall$be$binding$and$conclusive$on$
the$surety.$The$surety$bonds$shall$cover$the$validity$period$of$the$license.$
$
Section&5.&Provisional(License.$$Applicants$for$new$license$shall$be$issued$a$
provisional$license$which$shall$be$valid$for$a$limited$period$of$one$(1)$year$within$
which$the$applicant$should$be$able$to$comply$with$its$undertaking$to$deploy$100$
workers$to$its$new$principal.$The$license$of$a$complying$agency$shall$be$upgraded$to$a$
full$license$entitling$them$to$another$three$years$of$operation.$Non[complying$
agencies$will$be$notified$of$the$expiration$of$their$license.$
$
Section&6.&Validity(of(the(License.$$Except$in$case$of$a$provisional$license,$every$
license$shall$be$valid$for$four$(4)$years$from$the$date$of$issuance$unless$sooner$
cancelled,$revoked$or$suspended$for$violation$of$applicable$Philippine$law,$these$rules$
and$other$pertinent$issuances.$Such$license$shall$be$valid$only$at$the$place/s$stated$
therein$and$when$used$by$the$licensed$person,$partnership$or$corporation.$
$
Section&7.&NonNTransferability(of(License.$$No$license$shall$be$transferred,$conveyed$
or$assigned$to$any$person,$partnership$or$corporation.$It$shall$not$be$used$directly$or$
indirectly$by$any$person,$partnership$or$corporation$other$than$the$one$in$whose$
favor$it$was$issued.$
$
In$case$of$death$of$the$sole$proprietor$and$to$prevent$disruption$of$operation$to$the$
prejudice$of$the$interest$of$legitimate$heirs,$the$license$may$be$extended$upon$
request$of$the$heirs,$to$continue$only$for$the$purpose$of$winding$up$business$
operations.$
$
Section&8.&Change(of(Ownership/Relationship(of(Single(Proprietorship(or(Partnership.$$
Transfer$or$change$of$ownership$of$a$single$proprietorship$licensed$to$engage$in$
overseas$employment$shall$cause$the$automatic$revocation$of$the$license.$
$
A$change$in$the$relationship$of$the$partners$in$a$partnership$duly$licensed$to$engage$
in$overseas$employment$which$materially$interrupts$the$course$of$the$business$or$
results$in$the$actual$dissolution$of$the$partnership$shall$likewise$cause$the$automatic$
revocation$of$the$license.$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$30$of$80$

Section&9.&Upgrading(of(Single(Proprietorship(or(Partnerships.$$License$holders$
which$are$single$proprietorships$or$partnerships$may,$subject$to$the$guidelines$of$the$
Administration,$convert$into$corporation$for$purposes$of$upgrading$or$raising$their$
capabilities$to$respond$adequately$to$developments/changes$in$the$international$
labor$market$and$to$enable$them$to$better$comply$with$their$responsibilities$arising$
from$the$recruitment$and$deployment$of$workers$overseas.$
$
The$approval$of$merger,$consolidation$or$upgrading$shall$automatically$revoke$or$
cancel$the$licenses$of$the$single$proprietorships,$partnerships$or$corporations$so$
merged,$consolidated$or$upgraded.$
$
2)

Workers$Fees$
$
Article&32.$Fees(to(be(paid(by(workers.$$Any$person$applying$with$a$private$fee[charging$
employment$agency$for$employment$assistance$shall$not$be$charged$any$fee$until$he$has$
obtained$employment$through$its$efforts$or$has$actually$commenced$employment.$Such$fee$
shall$be$always$covered$with$the$appropriate$receipt$clearly$showing$the$amount$paid.$The$
Secretary$of$Labor$shall$promulgate$a$schedule$of$allowable$fees.$

&
CHARGEABLE&FEES$

Local$Employment$
o Shall$not$exceed$20%$of$workers$first$months$basic$salary;$
o Cannot$be$charged$prior$to$commencement$of$employment.$

Overseas$Employment$
o Governed$by$Part$II,$Rule$V$of$the$POEA$Rules.$
o 2.$Principal$is$responsible$for:$
#
Visa$fees;$
#
Airfare;$
#
POEA$processing$fee;$
#
OWWA$membership$fee.$
o 3.$Worker$is$responsible$for:$
#
Placement$fee$(equivalent$to$one$months$salary,$exclusive$of$documentation$
costs);$
#
Passport;$
#
NBI/Police/Barangay$clearance;$
#
Authentication;$
#
Birth$certificate;$
#
Medicare;$
#
Trade$tests;$
#
Inoculation;$
#
Medical$exam.$
o All$payments$must$be$covered$by$official$receipts.$
o Fees$are$to$be$paid$only$by$HIRED$workersthose$whose$contracts$have$been$
approved$by$the$POEAafter$they$have$already$obtained$employment.$
o Service$fees$$chargeable$to$the$employer$(principal).$
#
Local$$not$more$than$20%$of$annual$salary;$cannot$be$deducted$from$
employees$salary.$
#
Overseas$$no$particular$amount.$
o Transportation$fees$$chargeable$to$the$employer$(principal).$
$
REFUND&OF&FEES$

Implicit$in$POEAs$power$to$regulate$recruitment$and$placement$activities.$
$
Sagun&v.&Sunace&International&Management&Services,&Inc.$(644$SCRA$171,$2011)$
Avelina$Sagun$claimed$that$respondent$hired$her$to$be$a$caregiver$in$Taiwan.$She$paid$P30,000$
in$cash$and$executed$a$promissory$note$for$P10,000.$She$also$authorized$the$deduction$of$
NT$60,000$from$her$salary.$She$went$to$Taiwan$and$was$made$to$work$as$a$domestic$helper$
and$also$in$a$poultry$farm.$Upon$her$return,$she$filed$a$complaint$with$the$POEA$for$violation$of$
Arts.$32,$34$(a)$and$(b),$LC.$Her$complaint$was$dismissed.$On$review$with$the$SOLE,$Sunace$was$
found$guilty$of$violating$Art.$34(a)$(charging$excessive$fees).$The$Office$of$the$President$
affirmed.$The$CA$reversed$and$gave$credence$to$the$official$receipt$charging$petitioner$
P20,840$as$placement$fee.$The$Supreme$Court$affirmed$the$decision$of$the$CA.$It$held$that$the$
evidence$presented$was$insufficient$to$prove$that$Sunace$charged$petitioner$excessive$fees.$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$31$of$80$

3)

The$promissory$note$was$a$mere$photocopy.$The$receipt$for$P20,840$remained$to$be$the$best$
evidence.$$
$
Reports/Employment$Information$
$
Article&33.&Reports(on(employment(status.$$Whenever$the$public$interest$requires,$the$
Secretary$of$Labor$may$direct$all$persons$or$entities$within$the$coverage$of$this$Title$to$submit$
a$report$on$the$status$of$employment,$including$job$vacancies,$details$of$job$requisitions,$
separation$from$jobs,$wages,$other$terms$and$conditions$and$other$employment$data.$
$
$
Article&14.&Employment(promotion.$$The$Secretary$of$Labor$shall$have$the$power$and$
authority:$
(d) To$require$any$person,$establishment,$organization$or$institution$to$submit$such$
employment$information$as$may$be$prescribed$by$the$Secretary$of$Labor.$

$
4)

Illegal$Recruitment$
$
See$Annex$B,$Comparison$of$Sec.$6,$RA$8042$and$Art.$34,$Labor$Code$

$
RA&8042,&as&amended&by&RA&10022&
&
Section&8.&Prohibition(on(Officials(and(Employees.$$It$shall$be$unlawful$for$any$official$or$
employee$of$the$Department$of$Labor$and$Employment,$the$Philippine$Overseas$Employment$
Administration,$or$the$Overseas$Workers$Welfare$Administration,$or$the$Department$of$
Foreign$Affairs,$or$other$government$agencies$involved$in$the$implementation$of$this$Act,$or$
their$relatives$within$the$fourth$civil$degree$of$consanguinity$or$affinity,$to$engage,$directly$or$
indirectly,$in$the$business$of$recruiting$migrant$workers$as$defined$in$this$Act.$The$penalties$
shall$be$imposed$upon$them.$
$

Sto.&Tomas&v.&Salac$(685$Phil.$245,$2012)$
The$constitutionality$of$Section$6$of$RA$8042$was$upheld,$despite$the$contention$of$petitioners$
that$the$provision$is$more$advantageous$to$non[licensees$and$non[holders$of$authority.$The$
Court$held$that$it$does,$because$the$former$are$liable$only$if$they$commit$any$of$the$prohibited$
acts,$while$the$latter$are$liable$if$they$perform$any$act$of$recruitment$or$placement.$Section$9$
on$venue$was$also$assailed$for$being$violative$of$the$Rules$of$Court,$but$the$Court$upheld$it$
saying$that$there$was$nothing$wrong$with$providing$alternative$options.$Last,$Section$10$on$
solidary$liability$was$challenged$on$due$process$grounds,$but$the$challenge$failed$because$the$
Court$clarified$that$in$order$for$a$director$of$a$juridical$entity$to$be$liable,$it$must$be$proven$that$
he$or$she$was$remiss$in$his$or$her$duty$or$that$he$or$she$actively$participated$in$the$illegal$
recruitment.$
a)

Ish$Guidote$

Prohibited$Practices$
$
Article&34.&Prohibited(practices.$$It$shall$be$unlawful$for$any$individual,$entity,$
licensee,$or$holder$of$authority:$
a. To$charge$or$accept,$directly$or$indirectly,$any$amount$greater$than$that$
specified$in$the$schedule$of$allowable$fees$prescribed$by$the$Secretary$of$Labor,$
or$to$make$a$worker$pay$any$amount$greater$than$that$actually$received$by$him$
as$a$loan$or$advance;$
b. To$furnish$or$publish$any$false$notice$or$information$or$document$in$relation$to$
recruitment$or$employment;$
c. To$give$any$false$notice,$testimony,$information$or$document$or$commit$any$act$
of$misrepresentation$for$the$purpose$of$securing$a$license$or$authority$under$
this$Code.$
d. To$induce$or$attempt$to$induce$a$worker$already$employed$to$quit$his$
employment$in$order$to$offer$him$to$another$unless$the$transfer$is$designed$to$
liberate$the$worker$from$oppressive$terms$and$conditions$of$employment;$
e. To$influence$or$to$attempt$to$influence$any$person$or$entity$not$to$employ$any$
worker$who$has$not$applied$for$employment$through$his$agency;$
f. To$engage$in$the$recruitment$or$placement$of$workers$in$jobs$harmful$to$public$
health$or$morality$or$to$the$dignity$of$the$Republic$of$the$Philippines;$
g. To$obstruct$or$attempt$to$obstruct$inspection$by$the$Secretary$of$Labor$or$by$his$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$32$of$80$

h.
i.

j.

k.

duly$authorized$representatives;$
To$fail$to$file$reports$on$the$status$of$employment,$placement$vacancies,$
remittance$of$foreign$exchange$earnings,$separation$from$jobs,$departures$and$
such$other$matters$or$information$as$may$be$required$by$the$Secretary$of$Labor.$
To$substitute$or$alter$employment$contracts$approved$and$verified$by$the$
Department$of$Labor$from$the$time$of$actual$signing$thereof$by$the$parties$up$to$
and$including$the$periods$of$expiration$of$the$same$without$the$approval$of$the$
Secretary$of$Labor;$
To$become$an$officer$or$member$of$the$Board$of$any$corporation$engaged$in$
travel$agency$or$to$be$engaged$directly$or$indirectly$in$the$management$of$a$
travel$agency;$and$
To$withhold$or$deny$travel$documents$from$applicant$workers$before$departure$
for$monetary$or$financial$considerations$other$than$those$authorized$under$this$
Code$and$its$implementing$rules$and$regulations.$

$
RA&8042,&as&amended&by&RA&10022&
&
Section&6.(Definition.$$
$
x$x$x$
$
In$addition$to$the$acts$enumerated$above,$it$shall$also$be$unlawful$for$any$person$or$
entity$to$commit$the$following$prohibited$acts:$
(1) Grant$a$loan$to$an$overseas$Filipino$worker$with$interest$exceeding$eight$
percent$(8%)$per$annum,$which$will$be$used$for$payment$of$legal$and$allowable$
placement$fees$and$make$the$migrant$worker$issue,$either$personally$or$through$
a$guarantor$or$accommodation$party,$postdated$checks$in$relation$to$the$said$
loan;$
(2) Impose$a$compulsory$and$exclusive$arrangement$whereby$an$overseas$Filipino$
worker$is$required$to$avail$of$a$loan$only$from$specifically$designated$
institutions,$entities$or$persons;$
(3) Refuse$to$condone$or$renegotiate$a$loan$incurred$by$an$overseas$Filipino$worker$
after$the$latters$employment$contract$has$been$prematurely$terminated$
through$no$fault$of$his$or$her$own;$
(4) Impose$a$compulsory$and$exclusive$arrangement$whereby$an$overseas$Filipino$
worker$is$required$to$undergo$health$examinations$only$from$specifically$
designated$medical$clinics,$institutions,$entities$or$persons,$except$in$the$case$of$
a$seafarer$whose$medical$examination$cost$is$shouldered$by$the$
principal/shipowner;$
(5) Impose$a$compulsory$and$exclusive$arrangement$whereby$an$overseas$Filipino$
worker$is$required$to$undergo$training,$seminar,$instruction$or$schooling$of$any$
kind$only$from$specifically$designated$institutions,$entities$or$persons,$except$for$
recommendatory$trainings$mandated$by$principals/shipowners$where$the$latter$
shoulder$the$cost$of$such$trainings;$
(6) For$a$suspended$recruitment/manning$agency$to$engage$in$any$kind$of$
recruitment$activity$including$the$processing$of$pending$workers$applications;$
and$
(7) For$a$recruitment/manning$agency$or$a$foreign$principal/employer$to$pass$on$the$
overseas$Filipino$worker$or$deduct$from$his$or$her$salary$the$payment$of$the$cost$
of$insurance$fees,$premium$or$other$insurance$related$charges,$as$provided$
under$the$compulsory$workers$insurance$coverage.$
$
x$x$x$
$
StoltTNielsen&Transporation&Group,&Inc.&v.&Medequillo,&Jr.$(663$SCRA$291,$2012)$
In$this$case,$the$Court$held$that$the$failure$to$deploy$a$worker$without$any$justifiable$
reason$creates$a$cause$of$action$for$damages,$despite$the$fact$that$there$is$no$
employer[employee$relationship$yet.$There$is$already$a$perfected$contract$that$gives$
rise$to$rights$and$obligations$on$the$part$of$each$party.$It$was$likewise$held$that$the$
second$employment$contract$novated$the$first.$
$
People&v.&Espenilla$(667$SCRA$388,$2012)$
The$Court$enunciated$the$elements$of$illegal$recruitment$in$large$scale:$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$33$of$80$

1.
2.

b)

That$the$offender$has$no$license$or$authority$to$enable$him$to$lawfully$engage$in$
the$recruitment$and$placement$of$workers;$
That$he$undertakes$any$of$the$activities$in$Art.$13(b),$Labor$Code$or$Section$6,$RA$
8042;$and$
That$the$offender$committed$the$same$against$3$or$more$persons.$

3.
$
People&v.&Pansacala$(672$SCRA$549,$2012)$
It$was$held$that$for$a$case$of$syndicated$illegal$recruitment$to$prosper,$there$need$
not$be$at$least$3$persons$who$are$actually$convicted.$Conspiracy$among$the$three$
accused$was$duly$proven,$despite$there$being$only$two$of$them$who$were$eventually$
convicted.$As$long$as$it$can$be$shown$that$the$illegal$recruitment$was$performed$
through$the$concerted$efforts$of$at$least$3$persons,$a$charge$for$syndicated$illegal$
recruitment$can$stand.$
$
Undertaken$by$Non[licensees,$Non[holders$of$Authority$

$
Article&38.&Illegal(recruitment.$$$
a. Any$recruitment$activities,$including$the$prohibited$practices$enumerated$under$
Article$34$of$this$Code,$to$be$undertaken$by$non[licensees$or$non[holders$of$
authority,$shall$be$deemed$illegal$and$punishable$under$Article$39$of$this$Code.$
The$Department$of$Labor$and$Employment$or$any$law$enforcement$officer$may$
initiate$complaints$under$this$Article.$
b. Illegal$recruitment$when$committed$by$a$syndicate$or$in$large$scale$shall$be$
considered$an$offense$involving$economic$sabotage$and$shall$be$penalized$in$
accordance$with$Article$39$hereof.$
$
Illegal$recruitment$is$deemed$committed$by$a$syndicate$if$carried$out$by$a$group$
of$three$(3)$or$more$persons$conspiring$and/or$confederating$with$one$another$
in$carrying$out$any$unlawful$or$illegal$transaction,$enterprise$or$scheme$defined$
under$the$first$paragraph$hereof.$Illegal$recruitment$is$deemed$committed$in$
large$scale$if$committed$against$three$(3)$or$more$persons$individually$or$as$a$
group.$
$
c. The$Secretary$of$Labor$and$Employment$or$his$duly$authorized$representatives$
shall$have$the$power$to$cause$the$arrest$and$detention$of$such$non[licensee$or$
non[holder$of$authority$if$after$investigation$it$is$determined$that$his$activities$
constitute$a$danger$to$national$security$and$public$order$or$will$lead$to$further$
exploitation$of$job[seekers.$The$Secretary$shall$order$the$search$of$the$office$or$
premises$and$seizure$of$documents,$paraphernalia,$properties$and$other$
implements$used$in$illegal$recruitment$activities$and$the$closure$of$companies,$
establishments$and$entities$found$to$be$engaged$in$the$recruitment$of$workers$
for$overseas$employment,$without$having$been$licensed$or$authorized$to$do$so.$
$
ILLEGAL&RECRUITMENT&UNDER&THIS&ARTICLE&

Committed$by$non[licensees$and$non[holders$of$authority.$

RA$8042$makes$punishable$as(illegal(recruitment$the$performance$of$any$of$the$
prohibited$acts,$even$if$the$offender$is$a$licensee/holder$of$authority.$
$
PERSONS&LIABLE$

Principals,$accomplices,$and$accessories.$

In$case$of$juridical$persons:$officers$having$control,$management,$or$direction$
over$the$enterprise.$
$
WHEN&IS&A&MERE&EMPLOYEE&ALSO&LIABLE?$
An$employee$can$be$held$liable$if$it$is$shown$that$he$or$she$actively$and$consciously$
participated$in$the$illegal$recruitment.$
$
THE&POEA&ADMINISTRATOR&CANNOT&ISSUE&WARRANTS&OF&ARREST$

Art.$38(c)$was$declared$unconstitutional$by$the$SC$in$Salazar(v.(Achacoso.$

This$violates$Sec.$2,$Art.$III,$1987$Constitution.$Only$judges$may$issue$warrants$of$
arrest.$

However,$the$POEA$Administrator$can$still$cause$the$arrest$of$illegal$recruiters,$
provided$it$is$done$pursuant$to$a$warrant$lawfully$issued$by$a$judge.$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$34$of$80$


5)

The$POEA$Rules$also$allow$the$Administration$to$undertake$other$Anti[illegal$
Recruitment$activities.$
$

Enforcement$
$
a) Regulatory$Power$
$
Article&36.$Regulatory(power.$$The$Secretary$of$Labor$shall$have$the$power$to$
restrict$and$regulate$the$recruitment$and$placement$activities$of$all$agencies$within$
the$coverage$of$this$Title$and$is$hereby$authorized$to$issue$orders$and$promulgate$
rules$and$regulations$to$carry$out$the$objectives$and$implement$the$provisions$of$this$
Title.$
$
b) Rule[making$Power$
$
Article&36.$Regulatory(power.$$The$Secretary$of$Labor$shall$have$the$power$to$
restrict$and$regulate$the$recruitment$and$placement$activities$of$all$agencies$within$
the$coverage$of$this$Title$and$is$hereby$authorized$to$issue$orders$and$promulgate$
rules$and$regulations$to$carry$out$the$objectives$and$implement$the$provisions$of$this$
Title.$

$
c)

Visitorial$Power$
$
Article&37.&Visitorial(Power.$&The$Secretary$of$Labor$or$his$duly$authorized$
representatives$may,$at$any$time,$inspect$the$premises,$books$of$accounts$and$
records$of$any$person$or$entity$covered$by$this$Title,$require$it$to$submit$reports$
regularly$on$prescribed$forms,$and$act$on$violation$of$any$provisions$of$this$Title.$

$
6)

Ish$Guidote$

POEA$Standard$Employment$Contract$
$
Wallen&Maritime&Services,&Inc.$v.&Tanawan$(679$SCRA$255,$2012)$
Tanawan$suffered$a$foot$injury$while$aboard$a$vessel$owned$by$petitioner.$Upon$his$
repatriation$to$the$Philippines,$he$went$to$the$company[designated$physician$for$diagnosis.$
After$an$operation$and$physical$therapy,$the$doctor$declared$him$fit$for$work.$The$Court$held$
that$Tanawan$is$entitled$to$disability$benefits$pursuant$to$the$POEA$SEC,$because$despite$being$
declared$fit$for$work,$he$was$incapacitated$for$work$for$more$than$120$days.$(Sec.$20$(B)$(3),$
POEA$SEC)$
$
a) Construction$

Provisions$of$the$SEC$must$be$construed$and$applied$fairly,$reasonably,$and$
liberally$in$favor$of$the$worker.$(Abante(v.(KJGS(Fleet(Management)$
$
b) Terms$and$Conditions$

Minimum$benefits$for$the$workers:$
o Guaranteed$wages,$including$OT$rate;$
o Free$food,$or$allowance;$
o Free$transportation,$or$allowance;$
o Free$accommodations,$or$allowance;$
o Causes$for$termination.$

If$the$terms$and$conditions$are$not$expressly$found$in$the$employment$contract,$
they$are$still$deemed$incorporated.$

There$is$nothing$in$the$law$or$the$rules$which$prohibits$the$employer$from$giving$
more$favorable$benefits$to$the$employee.$The$law$just$prescribes$a$minimum$
standard$to$be$observed.$
$
Abante&v.&KJGS&Fleet&Management$(607$SCRA$734,$2009)$
The$diagnosis$of$a$company[designated$physician$is$not$binding$on$the$Court.$It$gave$
retroactive$effect$to$Memorandum$Circular$No.$9,$series$of$2000,$which$provides$that$
a$seafarer$can$seek$a$second$opinion$which$can$be$used$by$tribunals$in$awarding$
disability$claims.$It$is$understandable$that$the$company[designated$physician$has$a$
tendency$to$make$more$positive$diagnoses.$However,$in$view$of$the$mandate$of$
the$Constitution$and$the$Labor$Code$to$give$full$protection$to$labor,$the$court$must$

Labor$Law$1$$Midterm$Reviewer$|$Page$35$of$80$

adopt$the$findings$more$favorable$to$the$worker.$(HFS(Philippines(v.(Pilar)$Abante$is$
entitled$to$disability$benefits.$
$

Ish$Guidote$

7)

Joint$and$Several$Liability$of$Agent$and$Principal$
$
2002&POEA&RULES&AND&REGULATIONS&
PART&II,&RULE&II&
$
Section&1.&Requirements(for(Licensing.$$Every$applicant$for$license$to$operate$a$private$
employment$agency$shall$submit$a$written$application$together$with$the$following$
requirements:$
$
(f) A$verified$undertaking$stating$that$the$applicant:$$
1. Shall$select$only$medically$and$technically$qualified$recruits;$
2. Shall$assume$full$and$complete$responsibility$for$all$claims$and$liabilities$which$may$
arise$in$connection$with$the$use$of$the$license;$
3. Shall$assume$joint$and$solidary$liability$with$the$employer$for$all$claims$and$liabilities$
which$may$arise$in$connection$with$the$implementation$of$the$contract,$including$but$
not$limited$to$payment$of$wages,$death$and$disability$compensation$and$
repatriations;$
4. Shall$guarantee$compliance$with$the$existing$labor$and$social$legislations$of$the$
Philippines$and$of$the$country$of$employment$of$the$recruited$workers;$
5. Shall$assume$full$and$complete$responsibility$for$all$acts$of$its$officials,$employees$
and$representatives$done$in$connection$with$recruitment$and$placement;$
6. Shall$negotiate$for$the$best$terms$and$conditions$of$employment;$
7. Shall$disclose$the$full$terms$and$conditions$of$employment$to$the$applicant$workers;$
8. Shall$deploy$at$least$100$workers$to$its$new$markets$within$one$(1)$year$from$the$
issuance$of$its$license;$
9. Shall$provide$orientation$on$recruitment$procedures,$terms$and$conditions$and$other$
relevant$information$to$its$workers$and$provide$facilities$therefore;$and$$
10. Shall$repatriate$the$deployed$workers$and$his$personal$belongings$when$the$need$
arises.$
$$
For$the$purpose$of$compliance$with$item$(1),$the$agency$may$require$the$worker$to$undergo$
trade$testing$and$medical$examination$only$after$the$worker$has$been$pre[qualified$for$
employment.$
$
RA&8042,&as&amended&by&RA&10022&
$
Section&10.(Money(Claims.$$x$x$x((
(
The$liability$of$the$principal/employer$and$the$recruitment/placement$agency$for$any$and$all$
claims$under$this$section$shall$be$joint$and$several.$This$provision$shall$be$incorporated$in$the$
contract$for$overseas$employment$and$shall$be$a$condition$precedent$for$its$approval.$The$
performance$bond$to$de$filed$by$the$recruitment/placement$agency,$as$provided$by$law,$shall$
be$answerable$for$all$money$claims$or$damages$that$may$be$awarded$to$the$workers.$If$the$
recruitment/placement$agency$is$a$juridical$being,$the$corporate$officers$and$directors$and$
partners$as$the$case$may$be,$shall$themselves$be$jointly$and$solidarily$liable$with$the$
corporation$or$partnership$for$the$aforesaid$claims$and$damages.$
$
Such$liabilities$shall$continue$during$the$entire$period$or$duration$of$the$employment$contract$
and$shall$not$be$affected$by$any$substitution,$amendment$or$modification$made$locally$or$in$a$
foreign$country$of$the$said$contract.$
$
Any$compromise/amicable$settlement$or$voluntary$agreement$on$money$claims$inclusive$of$
damages$under$this$section$shall$be$paid$within$thirty$(30)$days$from$approval$of$the$
settlement$by$the$appropriate$authority.$
$
In$case$of$termination$of$overseas$employment$without$just,$valid$or$authorized$cause$as$
defined$by$law$or$contract,$or$any$unauthorized$deductions$from$the$migrant$workers$salary,$
the$worker$shall$be$entitled$to$the$full$reimbursement$if$his$placement$fee$and$the$deductions$
made$with$interest$at$twelve$percent$(12%)$per$annum,$plus$his$salaries$for$the$unexpired$
portion$of$his$employment$contract$or$for$three$(3)$months$for$every$year$of$the$unexpired$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$36$of$80$

term,$whichever$is$less.$
$
x$x$x$
$
e.

Jurisdiction$
$
1)
RTC$over$Criminal$Action$Arising$from$Illegal$Recruitment$
$
RA&8042,&as&amended&by&RA&10022&
&
Section&9.(Venue.$(A$criminal$action$arising$from$illegal$recruitment$as$defined$herein$shall$be$
filed$with$the$Regional$Trial$Court$of$the$province$or$city$where$the$offense$was$committed$or$
where$the$offended$party$actually$resides$at$the$same$time$of$the$commission$of$the$offense:$
Provided,$That$the$court$where$the$criminal$action$is$first$filed$shall$acquire$jurisdiction$to$the$
exclusion$of$other$courts.$Provided,$however,$That$the$aforestated$provisions$shall$also$apply$
to$those$criminal$actions$that$have$already$been$filed$in$court$at$the$time$of$the$effectivity$of$
this$Act.$
2)

LA$over$Money$Claims$
$
RA&8042,&as&amended&by&RA&10022&
&
Section&10.&Money(Claims.$$Notwithstanding$any$provision$of$law$to$the$contrary,$the$Labor$
Arbiters$of$the$National$Labor$Relations$Commission$(NLRC)$shall$have$the$original$and$
exclusive$jurisdiction$to$hear$and$decide,$within$ninety$(90)$calendar$days$after$the$filing$of$the$
complaint,$the$claims$arising$out$of$an$employer[employee$relationship$or$by$virtue$of$any$law$
or$contract$involving$Filipino$workers$for$overseas$deployment$including$claims$for$actual,$
moral,$exemplary$and$other$forms$of$damage.$Consistent$with$this$mandate,$the$NLRC$shall$
endeavor$to$update$and$keep$abreast$with$the$developments$in$the$global$services$industry.$
$$
The$liability$of$the$principal/employer$and$the$recruitment/placement$agency$for$any$and$all$
claims$under$this$section$shall$be$joint$and$several.$This$provision$shall$be$incorporated$in$the$
contract$for$overseas$employment$and$shall$be$a$condition$precedent$for$its$approval.$The$
performance$bond$to$de$filed$by$the$recruitment/placement$agency,$as$provided$by$law,$shall$
be$answerable$for$all$money$claims$or$damages$that$may$be$awarded$to$the$workers.$If$the$
recruitment/placement$agency$is$a$juridical$being,$the$corporate$officers$and$directors$and$
partners$as$the$case$may$be,$shall$themselves$be$jointly$and$solidarily$liable$with$the$
corporation$or$partnership$for$the$aforesaid$claims$and$damages.$
$$
Such$liabilities$shall$continue$during$the$entire$period$or$duration$of$the$employment$contract$
and$shall$not$be$affected$by$any$substitution,$amendment$or$modification$made$locally$or$in$a$
foreign$country$of$the$said$contract.$
$$
Any$compromise/amicable$settlement$or$voluntary$agreement$on$money$claims$inclusive$of$
damages$under$this$section$shall$be$paid$within$thirty$(30)$days$from$approval$of$the$
settlement$by$the$appropriate$authority.$
$$
In$case$of$termination$of$overseas$employment$without$just,$valid$or$authorized$cause$as$
defined$by$law$or$contract,$or$any$unauthorized$deductions$from$the$migrant$workers$salary,$
the$worker$shall$be$entitled$to$the$full$reimbursement$if$his$placement$fee$and$the$deductions$
made$with$interest$at$twelve$percent$(12%)$per$annum,$plus$his$salaries$for$the$unexpired$
portion$of$his$employment$contract$or$for$three$(3)$months$for$every$year$of$the$unexpired$
term,$whichever$is$less.$
$$
In$case$of$a$final$and$executory$judgment$against$a$foreign$employer/principal,$it$shall$be$
automatically$disqualified,$without$further$proceedings,$from$participating$in$the$Philippine$
Overseas$Employment$Program$and$from$recruiting$and$hiring$Filipino$workers$until$and$unless$
it$fully$satisfies$the$judgment$award.$
$$
Noncompliance$with$the$mandatory$periods$for$resolutions$of$case$provided$under$this$section$
shall$subject$the$responsible$officials$to$any$or$all$of$the$following$penalties:$
(a) The$salary$of$any$such$official$who$fails$to$render$his$decision$or$resolution$within$the$
prescribed$period$shall$be,$or$caused$to$be,$withheld$until$the$said$official$complies$

Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$37$of$80$

therewith;$
(b) Suspension$for$not$more$than$ninety$(90)$days;$or$
(c) Dismissal$from$the$service$with$disqualification$to$hold$any$appointive$public$office$
for$five$(5)$years.$
$$
Provided,$however,$That$the$penalties$herein$provided$shall$be$without$prejudice$to$any$
liability$which$any$such$official$may$have$incurred$under$other$existing$laws$or$rules$and$
regulations$as$a$consequence$of$violating$the$provisions$of$this$paragraph.$
$
RA&8042,&as&amended&by&RA&10022&
$
Section&11.(Mandatory(periods(for(resolution(of(illegal(recruitment(cases.$$The$preliminary$
investigations$of$cases$under$this$Act$shall$be$terminated$within$a$period$of$thirty$(30)$calendar$
days$from$the$date$of$their$filing.$Where$the$preliminary$investigation$is$conducted$by$a$
prosecution$officer$and$a$prima$facie$case$is$established,$the$corresponding$information$shall$
be$filed$in$court$within$twenty[four$(24)$hours$from$the$termination$of$the$investigation.$If$the$
preliminary$investigation$is$conducted$by$a$judge$and$a$prima$facie$case$is$found$to$exist,$
prosecution$officer$within$forty[eight$(48)$hours$from$the$date$of$receipt$of$the$records$of$the$
case.$
$
Flourish&Maritime&Shipping&v.&Almanzor$(568$SCRA$713,$2008)$
Paragraph$5,$Sec.$10$of$RA$8042$provides$that$in$cases$of$termination$of$contract,$the$
employee$is$entitled$to$his$salaries$for$the$unexpired$portion$of$his$employment$contract$or$
for$three$(3)$months$for$every$year$of$the$unexpired$term,$whichever$is$less.$The$LA$gave$6$
months$worth,$since$the$unexpired$term$is$1$year,$11$months,$and$4$days.$The$CA$gave$full$
compensation.$The$Court$upheld$the$computation$of$the$LA,$pursuant$to$its$ruling$in$Marsaman(
v.(NLRC.$Said$decision$states$that$in$case$the$contract$of$the$employee$is$for$at$least$one$year,$
the$3[month$rule$applies.$
$
Serrano&v.&Gallant&Maritime&Services,&Inc.$(582$SCRA$254,$2009)$
In$this$case,$the$Court$declared$the$subject$clause$(Par.$5$above)$as$unconstitutional$for$being$
violative$of$the$equal$protection$clause.$It$discriminates$between$OFWs$whose$contracts$are$
for$less$than$a$year$and$those$whose$contracts$are$for$at$least$one$year.$It$also$makes$an$
unwarranted$distinction$between$OFWs$and$local$workers.$The$State$has$not$proven$to$the$
Courts$satisfaction$that$there$is$a$compelling$state$interest$that$would$warrant$unequal$
treatment$among$classes$of$workers.$$
$
Pert/CPM&Manpower&Exponent&Co.,&Inc.&v.&Vinuya$(680$SCRA$284,$2012)$
The$Court$declared$that$the$ruling$in$Serrano$could$be$given$retroactive$effects,$because$a$
declaration$of$nullity$retroacts$to$the$day$when$the$law$was$enacted.$However,$the$Congress$
restored$the$subject$clause$in$RA$10022.$The$SC$refused$to$rule$on$its$constitutionality$because$
it$is$not$the$lis(mota(of$the$case.$Petitioners$cannot$invoke$said$provision$because$laws$do$not$
have$retroactive$effect,$unless$the$contrary$is$stated.$
$

3)

POEA$over$Administrative$Cases$

Ish$Guidote$

a)

Pre[employment$Cases$
$
RULES&IMPLEMENTING&RA&8042,&AS&AMENDED&BY&RA&10022&
RULE&X,&A.&
&
Section&6.&Jurisdiction(of(the(POEA.$$The$POEA$shall$exercise$original$and$exclusive$
jurisdiction$to$hear$and$decide:$
(a) All$pre[employment/recruitment$violation$cases$which$are$administrative$in$
character,$involving$or$arising$out$of$violations$of$Rules$and$Regulations$relating$
to$licensing$and$registration,$including$refund$of$fees$collected$from$the$workers$
or$violation$of$the$conditions$for$issuance$of$license$or$authority$to$recruit$
workers;$and$

b)

Disciplinary$Cases$
$
RULES&IMPLEMENTING&RA&8042,&AS&AMENDED&BY&RA&10022&
RULE&X,&A.&
$

Labor$Law$1$$Midterm$Reviewer$|$Page$38$of$80$

&
Section&6.&Jurisdiction(of(the(POEA.$$The$POEA$shall$exercise$original$and$exclusive$
jurisdiction$to$hear$and$decide:$
(b) Disciplinary$action$cases$and$other$special$cases,$which$are$administrative$in$
character,$involving$employers,$principals,$contracting$partners$and$OFWs$
processed$by$the$POEA.$$
$
2002&POEA&RULES&AND&REGULATIONS&
PART&VII,&RULE&II&
&
Section&1.&Grounds(for(Disciplinary(Action(Against(Foreign(Principals/Employers.$$
a. Default$on$its$contractual$obligations$to$the$migrant$worker$and/or$to$its$
Philippine$agent;$
b. Gross$violation$of$laws,$rules$and$regulations$on$overseas$employment;$
c. Gross$negligence$leading$to$serious$injury$or$illness$or$death$of$the$worker;$
d. Grave$misconduct;$
e. Conviction$of$an$offense$involving$moral$turpitude;$
f. Any$other$case$analogous$to$the$foregoing.$
$
2002&POEA&RULES&AND&REGULATIONS&
PART&VII,&RULE&III&
$
Section&1.&Grounds(for(Disciplinary(Action.$$Commission$by$a$migrant$worker$of$any$
of$the$offenses$enumerated$below$or$of$similar$offenses$shall$be$a$ground$for$
disciplinary$action:$
A. Pre[Employment$Offenses$
1. Using,$providing,$or$submitting$false$information$or$documents$for$
purposes$of$job$application$or$employment.$
2. Unjustified$refusal$to$depart$for$the$worksite$after$all$employment$and$
travel$documents$have$been$duly$approved$by$the$appropriate$government$
agency/ies.$
B. Offenses$during$Employment$
1. Commission$of$a$felony$or$crime$punishable$by$Philippine$Laws$or$by$the$
laws$of$the$host$country;$
2. Unjustified$breach$of$employment$contract;$
3. Embezzlement$of$company$funds$or$monies$and/or$properties$of$a$fellow$
worker$entrusted$for$delivery$to$kin$or$relatives$in$the$Philippines;$and$
4. Violation/s$of$the$sacred$practices$of$the$host$country.$
$
Eastern&Mediterranean&Maritime&Ltd.&v.&Surio$(679$SCRA$305,$2012)$
Upon$the$repatriation$of$respondents,$petitioners$filed$a$disciplinary$case$against$
them$before$the$POEA.$The$complaint$was$dismissed$and$petitioners$filed$an$appeal$
with$the$NLRC.$The$Commission$dismissed$the$complaint$for$lack$of$jurisdiction.$The$
Court$ruled$that$RA$8042$did$not$divest$the$POEA$of$jurisdiction$over$disciplinary$
cases,$only$money$claims.$There$is$no$law$or$rule$which$provides$that$decisions$of$the$
POEA$in$administrative$cases$are$appealable$to$the$NLRC.$Appellate$jurisdiction$
properly$rests$with$the$SOLE,$who$has$the$power$of$general$supervision$and$control$
over$the$POEA,$a$subordinate$office.$
$
3.

Ish$Guidote$

Public$Sector$Agencies$$Employment$Offices$
$
Article&12.&Statement(of(objectives.$$It$is$the$policy$of$the$State:$
$
(f) To$strengthen$the$network$of$public$employment$offices$and$rationalize$the$participation$of$the$private$
sector$in$the$recruitment$and$placement$of$workers,$locally$and$overseas,$to$serve$national$development$
objectives;$
$
Article&14.(Employment(promotion.$$The$Secretary$of$Labor$shall$have$the$power$and$authority:$
(a) To$organize$and$establish$new$employment$offices$in$addition$to$the$existing$employment$offices$under$the$
Department$of$Labor$as$the$need$arises;$
$
EXECUTIVE&ORDER&NO.&247&&REORGANIZING&THE&POEA&
$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$39$of$80$

Section&3.&Powers(and(Functions.$$In$the$pursuit$of$its$mandate,$the$Administration$shall$have$the$following$
powers$and$functions:$$
a. Regulate$private$sector$participation$in$the$recruitment$and$overseas$placement$of$workers$by$setting$up$a$
licensing$and$registration$system;$$
b. Formulate$and$implement,$in$coordination$with$appropriate$entities$concerned,$when$necessary,$a$system$
for$promoting$and$monitoring$the$overseas$employment$of$Filipino$workers$taking$into$consideration$their$
welfare$and$the$domestic$manpower$requirements;$$
c. Protect$the$rights$of$Filipino$workers$for$overseas$employment$to$fair$and$equitable$recruitment$and$
employment$practices$and$ensure$their$welfare;$$
d. Exercise$original$and$exclusive$jurisdiction$to$hear$and$decide$all$claims$arising$out$of$an$employer[employee$
relationship$or$by$virtue$of$any$law$or$contract$involving$Filipino$workers$for$overseas$employment$including$
the$disciplinary$cases;$and$all$pre[employment$cases$which$are$administrative$in$character$involving$or$arising$
out$of$violation$or$requirement$laws,$rules$and$regulations$including$money$claims$arising$therefrom,$or$
violation$of$the$conditions$for$issuance$of$license$or$authority$to$recruit$workers.$$
$
All$prohibited$recruitment$activities$and$practices$which$are$penal$in$character$as$enumerated$and$defined$
under$and$by$virtue$of$existing$laws,$shall$be$prosecuted$in$the$regular$courts$in$close$coordination$with$the$
appropriate$Departments$and$agencies$concerned;$$
$
e. Maintain$a$registry$of$skills$for$overseas$placement;$$
f. Recruit$and$place$workers$to$service$the$requirements$for$trained$and$competent$Filipino$workers$by$foreign$
governments$and$their$instrumentalities$and$such$other$employers$as$public$interest$may$require;$$
g. Promote$the$development$of$skills$and$careful$selection$of$Filipino$workers;$$
h. Undertake$overseas$market$development$activities$for$placement$of$Filipino$workers;$$
i.
Secure$the$best$terms$and$conditions$of$employment$of$Filipino$contract$workers$and$ensure$compliance$
therewith;$$
j.
Promote$and$protect$the$well[being$of$Filipino$workers$overseas;$$
k. Develop$and$implement$programs$for$the$effective$monitoring$of$returning$contract$workers,$promoting$
their$re[training$and$re[employment$or$their$smooth$re[integration$into$the$mainstream$of$national$economy$
in$coordination$with$other$government$agencies;$$
l.
Institute$a$system$for$ensuring$fair$and$speedy$disposition$of$cases$involving$violation$or$recruitment$rules$
and$regulations$as$well$as$violation$of$terms$and$conditions$of$overseas$employment;$$
m. Establish$a$system$for$speedy$and$efficient$enforcement$of$decisions$laid$down$through$the$exercise$of$its$
adjudicatory$function;$$
n. Establish$and$maintain$close$relationship$and$enter$into$joint$projects$with$the$Department$of$Foreign$Affairs,$
Philippine$Tourism$Authority,$Manila$International$Airport$Authority,$Department$of$Justice,$Department$of$
Budget$and$Management$and$other$relevant$government$entities,$in$the$pursuit$of$its$objectives.$The$
Administration$shall$also$establish$and$maintain$joint$projects$with$private$organizations,$domestic$or$foreign,$
in$the$furtherance$of$its$objectives.$$
$
4.

Sanctions$

$
a.

Ish$Guidote$

Local$Employment$
$
Article&39.&Penalties.$$
a. The$penalty$of$life$imprisonment$and$a$fine$of$One$Hundred$Thousand$Pesos$(P1000,000.00)$shall$
be$imposed$if$illegal$recruitment$constitutes$economic$sabotage$as$defined$herein;$$
b. Any$licensee$or$holder$of$authority$found$violating$or$causing$another$to$violate$any$provision$of$
this$Title$or$its$implementing$rules$and$regulations$shall,$upon$conviction$thereof,$suffer$the$penalty$
of$imprisonment$of$not$less$than$two$years$nor$more$than$five$years$or$a$fine$of$not$less$than$
P10,000$nor$more$than$P50,000,$or$both$such$imprisonment$and$fine,$at$the$discretion$of$the$court;$$
c. Any$person$who$is$neither$a$licensee$nor$a$holder$of$authority$under$this$Title$found$violating$any$
provision$thereof$or$its$implementing$rules$and$regulations$shall,$upon$conviction$thereof,$suffer$
the$penalty$of$imprisonment$of$not$less$than$four$years$nor$more$than$eight$years$or$a$fine$of$not$
less$than$P20,000$nor$more$than$P100,000$or$both$such$imprisonment$and$fine,$at$the$discretion$of$
the$court;$$
d. If$the$offender$is$a$corporation,$partnership,$association$or$entity,$the$penalty$shall$be$imposed$
upon$the$officer$or$officers$of$the$corporation,$partnership,$association$or$entity$responsible$for$
violation;$and$if$such$officer$is$an$alien,$he$shall,$in$addition$to$the$penalties$herein$prescribed,$be$
deported$without$further$proceedings;$$
e. In$every$case,$conviction$shall$cause$and$carry$the$automatic$revocation$of$the$license$or$authority$
and$all$the$permits$and$privileges$granted$to$such$person$or$entity$under$this$Title,$and$the$
forfeiture$of$the$cash$and$surety$bonds$in$favor$of$the$Overseas$Employment$Development$Board$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$40$of$80$

or$the$National$Seamen$Board,$as$the$case$may$be,$both$of$which$are$authorized$to$use$the$same$
exclusively$to$promote$their$objectives.$
$

Ish$Guidote$

b.

Overseas$Employment$
$
Article&35.&Suspension(and/or(cancellation(of(license(or(authority.$$The$Minister$of$Labor$shall$have$the$
power$to$suspend$or$cancel$any$license$or$authority$to$recruit$employees$for$overseas$employment$for$
violation$of$rules$and$regulations$issued$by$the$Ministry$of$Labor,$the$Overseas$Employment$
Development$Board,$or$for$violation$of$the$provisions$of$this$and$other$applicable$laws,$General$Orders$
and$Letters$of$Instructions.$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&I,&RULE&VI&&CANCELLATION&OR&SUSPENSION&OF&LICENSE&
&
Section&1.&Scope(of(Application.$$These$Rules$shall$apply$to$all$persons,$agencies$or$entities$duly$
licensed$or$authorized$to$recruit$and$deploy$Filipino$workers$for$overseas$employment.$(Sec.$1,$Rule$VI$
Book$I,$POEA$Rules$and$Regulations)$$
$$
Section&2.&Grounds(for(Suspension,(Cancellation(or(Revocation.$$A$license$or$authority$shall$be$cancelled,$
suspended$or$revoked$on$any$of$the$following$grounds,$among$others:$$
a. Imposing$or$accepting$directly$or$indirectly$any$amount$of$money,$goods$or$services,$or$any$fee$or$
bond$in$excess$of$what$is$prescribed$by$the$Administration;$$
b. Engaging$in$act(s)$of$misrepresentation,$such$as$publication$or$advertisement$of$false$or$deceptive$
notices$or$information$in$relation$to$the$recruitment$and$placement$of$workers;$
c. Engaging$in$act(s)$of$misrepresentation,$such$as$giving$false$statements,$false$testimonies$or$
falsified$documents;$$
d. Inducing$or$attempting$to$induce$an$already$employed$worker$to$transfer$from$or$leave$his$
employment$to$another$unless$such$transfer$is$advantageous$or$beneficial$to$the$worker;$$
e. Influencing$or$attempting$to$influence$any$person$or$entity$to$prevent$employment$of$any$worker;$$
f. Engaging$in$the$recruitment$and$placement$of$workers$in$jobs$harmful$to$public$health$or$morality$
or$to$the$dignity$of$the$Republic$of$the$Philippines;$$
g. Obstructing$or$attempting$to$obstruct$inspection$by$the$Secretary,$the$Administrator$or$by$their$
duly$authorized$representatives;$$
h. Substituting$or$altering$employment$contracts$and$other$documents$approved$and$verified$by$the$
Administration$from$the$time$of$actual$signing$thereof$by$the$parties$up$to$and$including$the$period$
of$expiration$of$the$same$without$the$Administrations$approval;$$
i.
Failure$to$file$report$on$the$remittance$of$foreign$exchange$earnings$and$such$matters$as$may$be$
required$by$the$Administration;$$
j.
Where$the$owner,$partner$or$majority$stockholder,$licensee$or$holder$of$authority,$or$principal$
officers$become$officer$or$member$of$the$Board$of$any$corporation$or$partnership$engaged$in$
travel$or$engaged$directly$or$indirectly$in$the$management$of$a$travel$agency;$$
k. Withholding$or$denying$travel$and$other$documents$from$workers$for$monetary$considerations$or$
reasons$other$than$those$authorized$under$the$Labor$Code$and$its$implementing$Rules$and$
Regulations;$$
l.
Engaging$in$recruitment$activities$in$places$other$than$specified$in$the$license$or$authority$without$
previous$authorization$from$the$Administration;$$
m. Appointing$or$designating$agents$or$representatives$without$prior$approval$of$the$Administration;$$
n. Falsifying$or$altering$workers$employment$contracts$or$travel$documents;$$
o. Deploying$workers$or$seamen$to$vessels$or$principals$not$accredited$by$the$Administrator;$$
p. Deploying$workers$whose$employment$and$travel$documents$were$not$processed$by$the$
Administration;$$
q. Publishing$or$causing$the$publication$of$overseas$job$vacancies$in$violation$of$the$prescribed$rules;$$
r. Failure$to$deploy$workers$without$valid$reasons$within$the$prescribed$period$as$provided$under$
Section$5,$Rule$III,$Book$III$hereof;$$
s. Failure$to$pay$or$replenish$cash$bond$and$renew$surety$bond;$$
t. Disregard$of$lawful$orders,$summons,$etc.;$$
u. Withholding$of$workers$salaries$or$remittances$without$justifiable$reasons;$$
v. Coercing$workers$overseas$to$accept$prejudicial$arrangements$in$exchange$of$certain$benefits$that$
rightfully$belong$to$the$worker;$and$$
w. Violation$of$other$pertinent$provisions$of$the$Labor$Code$and$other$relevant$laws,$rules$and$
regulations.$(Sec.$2,$Rule$Sec.$4,$Rule$II$Book$III,$POEA$Rules$and$Regulations)$I$Book$II,$POEA$Rules$
and$Regulations)$
$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$41$of$80$

RA&8042,&as&amended&by&RA&10022&
$
Section&7.(Penalties.$$
(a) Any$person$found$guilty$of$illegal$recruitment$shall$suffer$the$penalty$of$imprisonment$of$not$less$
than$twelve$(12)$years$and$one$(1)$day$but$not$more$than$twenty$(20)$years$and$a$fine$of$not$less$
than$One$million$pesos$(P1,000,000.00)$nor$more$than$Two$million$pesos$(P2,000,000.00).$
(b) The$penalty$of$life$imprisonment$and$a$fine$of$not$less$than$Two$million$pesos$(P2,000,000.00)$nor$
more$than$Five$million$pesos$(P5,000,000.00)$shall$be$imposed$if$illegal$recruitment$constitutes$
economic$sabotage$as$defined$therein.$
$
Provided,$however,$That$the$maximum$penalty$shall$be$imposed$if$the$person$illegally$recruited$is$
less$than$eighteen$(18)$years$of$age$or$committed$by$a$non[licensee$or$non[holder$of$authority.$
$
(c) Any$person$found$guilty$of$any$of$the$prohibited$acts$shall$suffer$the$penalty$of$imprisonment$of$
not$less$than$six$(6)$years$and$one$(1)$day$but$not$more$than$twelve$(12)$years$and$a$fine$of$not$less$
than$Five$hundred$thousand$pesos$(P500,000.00)$nor$more$than$One$million$pesos$
(P1,000,000.00).$
$
If$the$offender$is$an$alien,$he$or$she$shall,$in$addition$to$the$penalties$herein$prescribed,$be$deported$
without$further$proceedings.$
$
In$every$case,$conviction$shall$cause$and$carry$the$automatic$revocation$of$the$license$or$registration$of$
the$recruitment/manning$agency,$lending$institutions,$training$school$or$medical$clinic.$
$
JURISDICTION&OVER&CASES&INVOLVING&SUSPENSION/CANCELLATION&OF&LICENSE$

The$Secretary$of$Labor$and$Employment$and$the$POEA$Administrator$have$concurrent$jurisdiction.$

SOLE$$Arts.$35$and$36,$Labor$Code$

POEA$Administrator$$IRR$of$RA$8042$
$
SOLIDARY&LIABILITY&OF&AGENCY&AND&PRINCIPAL$

Subsists$despite$termination$of$agency$agreement,$as$long$as$the$worker$was$not$informed$of$the$
termination.$

Exception:$when$the$workers$insist$on$being$re[deployed$back$to$the$insolvent$principal.$(Feagle(
Construction(v.(Gayda)$
$
SUABILITY&OF&FOREIGN&CORPORATION$

The$act$of$recruiting$and$placing$constitutes$doing$business$in$the$Philippines.$

$
5.
6.

Issues$and$Questions$of$Overseas$Employment$$Ofreneo$and$Licuanan$articles$
$
Trafficking$in$Persons,$RA$9208,$as$amended$by$RA$10364$

$
ELEMENTS&OF&TRAFFICKING&IN&PERSONS$
1. It$involves$the$recruitment,$obtaining,$hiring,$providing,$offering,$transportation,$transfer,$maintaining,$
harboring,$or$receipt$of$persons;$
2. It$is$committed$with$or$without$the$victims$consent$0r$knowledge;$
3. It$is$done$within$or$across$national$borders;$
4. It$is$committed$by$means$of$threat,$or$use$of$force,$or$other$forms$of$coercion,$abduction,$fraud,$deception,$
abuse$of$power$or$of$position,$taking$advantage$of$the$vulnerability$of$the$person,$or,$the$giving$or$receiving$
of$payments$or$benefits$to$achieve$the$consent$of$a$person$having$control$over$another$person;$
5. It$is$done$for$the$purpose$of$exploitation$which$includes$at$a$minimum,$the$exploitation$or$the$prostitution$of$
others$or$other$forms$of$sexual$exploitation,$forced$labor$or$services,$slavery,$servitude$or$the$removal$or$
sale$of$organs.$
$
DISTINCTION&BETWEEN&TRAFFICKING&AND&ILLEGAL&RECRUITMENT$
$
TRAFFICKING&IN&PERSONS&
ILLEGAL&RECRUITMENT$
May$or$may$not$involve$coercion,$fraud,$deception,$
Does$not$usually$involve$coercion$but$uses$more$
abuse$of$vulnerability,$etc.$
deception,$promises$and$fraud.
Characterized$by$subsequent$exploitation$after$the$
Characterized$by$facilitating$entry$of$one$person$from$
illegal$entry$of$one$person$from$one$place$to$another$
one$country$to$another$through$an$unauthorized$or$
or$one$country$to$another.$
unlicensed$agency.$
There$is$a$need$to$prove$the$presence$of$exploitation$
Mere$recruitment$without$license$is$punishable,$there$is$
Ish$Guidote$

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or$that$the$recruitment$was$facilitated$for(the(purpose(
of$exploitation.$
It$is$considered$a$human$rights$issue.$
Penalties$are$higher:$

Life$imprisonment$for$qualified$trafficking;$$

20$years$for$regular$trafficking.$

no$need$to$prove$the$consequential$exploitation.$
It$is$a$migration$concern.$
Penalties$are$lower:$

Life$imprisonment$for$syndicated$or$large$scale$
illegal$recruitment;$and$

12$years$for$regular$illegal$recruitment.$

$
CATEGORIES&OF&TRAFFICKING&IN&PERSONS&
1. Acts$of$trafficking$in$persons;$
2. Attempted$trafficking$in$persons;$
3. Acts$that$promote$trafficking$in$persons;$
4. Qualified$trafficking$in$persons.$
$
DEGREES&OF&LIABILITY&

Principal$

Accomplice$

Accessory$
&
ACTS&OF&TRAFFICKING&IN&PERSONS&

To$recruit,$obtain,$hire,$provide,$offer,$transport,$transfer,$maintain,$harbor,$or$receive$a$person$by$any$
means,$including$those$done$under$the$pretext$of$domestic$or$overseas$employment$or$training$or$
apprenticeship,$for$the$purpose$of$prostitution,$pornography,$or$sexual$exploitation;&

To$introduce$or$match$for$money,$profit,$or$material,$economic$or$other$consideration,$any$person$or,$as$
provided$for$under$Republic$Act$No.$6955,$any$Filipino$woman$to$a$foreign$national,$for$marriage$for$the$
purpose$of$acquiring,$buying,$offering,$selling$or$trading$him/her$to$engage$in$prostitution,$pornography,$
sexual$exploitation,$forced$labor,$slavery,$involuntary$servitude$or$debt$bondage;$

To$offer$or$contract$marriage,$real$or$simulated,$for$the$purpose$of$acquiring,$buying,$offering,$selling,$or$
trading$them$to$engage$in$prostitution,$pornography,$sexual$exploitation,$forced$labor$or$slavery,$involuntary$
servitude$or$debt$bondage;$

To$undertake$or$organize$tours$and$travel$plans$consisting$of$tourism$packages$or$activities$for$the$purpose$
of$utilizing$and$offering$persons$for$prostitution,$pornography$or$sexual$exploitation;$

To$maintain$or$hire$a$person$to$engage$in$prostitution$or$pornography;$

To$adopt$persons$by$any$form$of$consideration$for$exploitative$purposes$or$to$facilitate$the$same$for$
purposes$of$prostitution,$pornography,$sexual$exploitation,$forced$labor,$slavery,$involuntary$servitude$or$
debt$bondage;$

To$adopt$or$facilitate$the$adoption$of$persons$for$the$purpose$of$prostitution,$pornography,$sexual$
exploitation,$forced$labor,$slavery,$involuntary$servitude$or$debt$bondage;$

To$recruit,$hire,$adopt,$transport,$transfer,$obtain,$harbor,$maintain,$provide,$offer,$receive$or$abduct$a$
person,$by$means$of$threat$or$use$of$force,$fraud,$deceit,$violence,$coercion,$or$intimidation$for$the$purpose$
of$removal$or$sale$of$organs$of$said$person;$

To$recruit,$transport,$obtain,$transfer,$harbor,$maintain,$offer,$hire,$provide,$receive$or$adopt$a$child$to$
engage$in$armed$activities$in$the$Philippines$or$abroad;$

To$recruit,$transport,$transfer,$harbor,$obtain,$maintain,$offer,$hire,$provide$or$receive$a$person$by$means$
defined$in$Section$3$of$this$Act$for$purposes$of$forced$labor,$slavery,$debt$bondage$and$involuntary$servitude,$
including$a$scheme,$plan,$or$pattern$intended$to$cause$the$person$either:$
o To$believe$that$if$the$person$did$not$perform$such$labor$or$services,$he$or$she$or$another$person$would$
suffer$serious$harm$or$physical$restraint;$or$
o To$abuse$or$threaten$the$use$of$law$or$the$legal$processes;$and$

To$recruit,$transport,$harbor,$obtain,$transfer,$maintain,$hire,$offer,$provide,$adopt$or$receive$a$child$for$
purposes$of$exploitation$or$trading$them,$including$but$not$limited$to,$the$act$of$baring$and/or$selling$a$child$
for$any$consideration$or$for$barter$for$purposes$of$exploitation.$Trafficking$for$purposes$of$exploitation$of$
children$shall$include:$
o All$forms$of$slavery$or$practices$similar$to$slavery,$involuntary$servitude,$debt$bondage$and$forced$labor,$
including$recruitment$of$children$for$use$in$armed$conflict;$
o The$use,$procuring$or$offering$of$a$child$for$prostitution,$for$the$production$of$pornography,$or$for$
pornographic$performances;$
o The$use,$procuring$or$offering$of$a$child$for$the$production$and$trafficking$of$drugs;$and$
o The$use,$procuring$or$offering$of$a$child$for$illegal$activities$or$work$which,$by$its$nature$or$the$
circumstances$in$which$it$is$carried$out,$is$likely$to$harm$their$health,$safety$or$morals;$and$

To$organize$or$direct$other$persons$to$commit$the$offenses$defined$as$acts$of$trafficking$under$this$Act.$
$
&
Ish$Guidote$

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ACTS&THAT&PROMOTE&TRAFFICKING&IN&PERSONS&

To$knowingly$lease$or$sublease,$use$or$allow$to$be$used$any$house,$building$or$establishment$for$the$purpose$
of$promoting$trafficking$in$persons;$

To$produce,$print$and$issue$or$distribute$unissued,$tampered$or$fake$counseling$certificates,$registration$
stickers,$overseas$employment$certificates$or$other$certificates$of$any$government$agency$which$issues$
these$certificates,$decals$and$such$other$markers$as$proof$of$compliance$with$government$regulatory$and$
pre[departure$requirements$for$the$purpose$of$promoting$trafficking$in$persons;$

To$advertise,$publish,$print,$broadcast$or$distribute,$or$cause$the$advertisement,$publication,$printing,$
broadcasting$or$distribution$by$any$means,$including$the$use$of$information$technology$and$the$internet,$of$
any$brochure,$flyer,$or$any$propaganda$material$that$promotes$trafficking$in$persons;$

To$assist$in$the$conduct$of$misrepresentation$or$fraud$for$purposes$of$facilitating$the$acquisition$of$
clearances$and$necessary$exit$documents$from$government$agencies$that$are$mandated$to$provide$pre[
departure$registration$and$services$for$departing$persons$for$the$purpose$of$promoting$trafficking$in$
persons;$

To$facilitate,$assist$or$help$in$the$exit$and$entry$of$persons$from/to$the$country$at$international$and$local$
airports,$territorial$boundaries$and$seaports$who$are$in$possession$of$unissued,$tampered$or$fraudulent$
travel$documents$for$the$purpose$of$promoting$trafficking$in$persons;$

To$confiscate,$conceal,$or$destroy$the$passport,$travel$documents,$or$personal$documents$or$belongings$of$
trafficked$persons$in$furtherance$of$trafficking$or$to$prevent$them$from$leaving$the$country$or$seeking$
redress$from$the$government$or$appropriate$agencies;$and$

To$knowingly$benefit$from,$financial$or$otherwise,$or$make$use$of,$the$labor$or$services$of$a$person$held$to$a$
condition$of$involuntary$servitude,$forced$labor,$or$slavery.$

To$tamper$with,$destroy,$or$cause$the$destruction$of$evidence,$or$to$influence$or$attempt$to$influence$
witnesses,$in$an$investigation$or$prosecution$of$a$case$under$this$Act;$

To$destroy,$conceal,$remove,$confiscate$or$possess,$or$attempt$to$destroy,$conceal,$remove,$confiscate$or$
possess,$any$actual$or$purported$passport$or$other$travel,$immigration$or$working$permit$or$document,$or$
any$other$actual$or$purported$government$identification,$of$any$person$in$order$to$prevent$or$restrict,$or$
attempt$to$prevent$or$restrict,$without$lawful$authority,$the$persons$liberty$to$move$or$travel$in$order$to$
maintain$the$labor$or$services$of$that$person;$or$

To$utilize$his$or$her$office$to$impede$the$investigation,$prosecution$or$execution$of$lawful$orders$in$a$case$
under$this$Act.$
$
QUALIFIED&TRAFFICKING&IN&PERSONS$

When$the$trafficked$person$is$a$child;$

When$the$adoption$is$effected$through$Republic$Act$No.$8043,$otherwise$known$as$the$Inter[$Country$
Adoption$Act$of$1995$and$said$adoption$is$for$the$purpose$of$prostitution,$pornography,$sexual$exploitation,$
forced$labor,$slavery,$involuntary$servitude$or$debt$bondage;$

When$the$crime$is$committed$by$a$syndicate,$or$in$large$scale.$Trafficking$is$deemed$committed$by$a$
syndicate$if$carried$out$by$a$group$of$three$(3)$or$more$persons$conspiring$or$confederating$with$one$
another.$It$is$deemed$committed$in$large$scale$if$committed$against$three$(3)$or$more$persons,$individually$or$
as$a$group;$

When$the$offender$is$a$spouse,$an$ascendant,$parent,$sibling,$guardian$or$a$person$who$exercises$authority$
over$the$trafficked$person$or$when$the$offense$is$committed$by$a$public$officer$or$employee;$

When$the$trafficked$person$is$recruited$to$engage$in$prostitution$with$any$member$of$the$military$or$law$
enforcement$agencies;$

When$the$offender$is$a$member$of$the$military$or$law$enforcement$agencies;$

When$by$reason$or$on$occasion$of$the$act$of$trafficking$in$persons,$the$offended$party$dies,$becomes$insane,$
suffers$mutilation$or$is$afflicted$with$Human$Immunodeficiency$Virus$(HIV)$or$the$Acquired$Immune$
Deficiency$Syndrome$(AIDS);$

When$the$offender$commits$one$or$more$violations$of$Section$4$over$a$period$of$sixty$(60)$or$more$days,$
whether$those$days$are$continuous$or$not;$and$

When$the$offender$directs$or$through$another$manages$the$trafficking$victim$in$carrying$out$the$exploitative$
purpose$of$trafficking.$
$
SYNDICATED&AND&LARGE&SCALE&TRAFFICKING&IN&PERSONS$
Trafficking$is$deemed$committed$by$a$syndicate$if$carried$out$by$a$group$of$three$(3)$or$more$persons$conspiring$
or$confederating$with$one$another.$It$is$deemed$committed$in$large$scale$if$committed$against$three$(3)$or$more$
persons,$individually$or$as$a$group.$
$
WHO&CAN&FILE$
Any$person$who$has$personal$knowledge$of$the$commission$of$any$offense$under$this$Act,$such$as$the$trafficked$
person,$the$parents,$spouse,$siblings,$children$or$legal$guardian$may$file$a$complaint$for$trafficking.$
$
Ish$Guidote$

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VENUE$
A$criminal$action$arising$from$violation$of$this$Act$shall$be$filed$where$the$offense$was$committed,$or$where$any$of$
its$elements$occurred,$or$where$the$trafficked$person$actually$resides$at$the$time$of$the$commission$of$the$
offense:$Provided,$That$the$court$where$the$criminal$action$is$first$filed$shall$acquire$jurisdiction$to$the$exclusion$
of$other$courts.$
&
PENALTIES&
Imprisonment$of$20$years$and$a$fine$of$P1$million2$
Acts$of$trafficking$in$persons$
million$
Imprisonment$of$15$years$and$a$fine$of$P500,000
Attempted$trafficking$in$persons$
1,000,000$
Imprisonment$of$15$years$and$a$fine$of$P500,000
Accomplice$liability$
1,000,000$
Imprisonment$of$15$years$and$a$fine$of$P500,000
Acts$that$promote$trafficking$in$persons$
1,000,000$
Qualified$trafficking$
Life$imprisonment$and$a$fine$of$P500,0001,000,000$
Imprisonment$of$6$years$and$a$fine$of$P500,000
Breach$of$confidentiality$
1,000,000$
Imprisonment$of$612$years$and$a$fine$of$P50,000
Use$of$trafficked$persons$
100,000$
Imprisonment$of$17[40$years$and$a$fine$of$P500,000
Sexual$intercourse$or$lascivious$conduct$with$a$child$
1,000,000$
Sexual$intercourse$with$a$trafficking$victim$under$the$
Imprisonment$of$40$years$and$a$fine$of$P15$million$
qualifying$circumstances$of$rape$

PRESCRIPTIVE&PERIOD$

10$years;$

Large$scale$or$syndicated$$20$years.$

$
7.

Alien$Employment$Regulation$
$
Article&12.$Statement(of(objectives.$$It$is$the$policy$of$the$State:$
e. To$regulate$the$employment$of$aliens,$including$the$establishment$of$a$registration$and/or$work$permit$
system;$
$
Article&40.&Employment(permit(of(nonNresident(aliens.$$Any$alien$seeking$admission$to$the$Philippines$for$
employment$purposes$and$any$domestic$or$foreign$employer$who$desires$to$engage$an$alien$for$employment$in$
the$Philippines$shall$obtain$an$employment$permit$from$the$Department$of$Labor.$
$
The$employment$permit$may$be$issued$to$a$non[resident$alien$or$to$the$applicant$employer$after$a$determination$
of$the$non[availability$of$a$person$in$the$Philippines$who$is$competent,$able$and$willing$at$the$time$of$application$
to$perform$the$services$for$which$the$alien$is$desired.$
$
For$an$enterprise$registered$in$preferred$areas$of$investments,$said$employment$permit$may$be$issued$upon$
recommendation$of$the$government$agency$charged$with$the$supervision$of$said$registered$enterprise.$
$
Article&41.&Prohibition(against(transfer(of(employment.$$
a. After$the$issuance$of$an$employment$permit,$the$alien$shall$not$transfer$to$another$job$or$change$his$
employer$without$prior$approval$of$the$Secretary$of$Labor.$
b. Any$non[resident$alien$who$shall$take$up$employment$in$violation$of$the$provision$of$this$Title$and$its$
implementing$rules$and$regulations$shall$be$punished$in$accordance$with$the$provisions$of$Articles$289$and$
290$of$the$Labor$Code.$
$
In$addition,$the$alien$worker$shall$be$subject$to$deportation$after$service$of$his$sentence.$
$
Article&42.&Submission(of(list.$$Any$employer$employing$non[resident$foreign$nationals$on$the$effective$date$of$
this$Code$shall$submit$a$list$of$such$nationals$to$the$Secretary$of$Labor$within$thirty$(30)$days$after$such$date$
indicating$their$names,$citizenship,$foreign$and$local$addresses,$nature$of$employment$and$status$of$stay$in$the$
country.$The$Secretary$of$Labor$shall$then$determine$if$they$are$entitled$to$an$employment$permit.$

$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&I,&RULE&XIV&
Ish$Guidote$

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Section&1.$Coverage.$$This$Rule$shall$apply$to$all$aliens$employed$or$seeking$employment$in$the$Philippines,$and$
their$present$or$prospective$employers.$
$
Section&2.&Submission(of(list.$$All$employers$employing$foreign$nationals,$whether$resident$or$non[resident$shall$
submit$a$list$of$such$nationals$to$the$Bureau$indicating$their$names,$citizenship,$foreign$and$local$addresses;$
nature$of$employment$and$status$of$stay$in$the$Philippines.$
&
Section&3.&Registration(of(resident(aliens.$$All$employed$resident$aliens$shall$register$with$the$Bureau$under$such$
guidelines$as$may$be$issued$by$it.$
&
Section&4.&Employment(permit(required(for(entry.$$No$alien$seeking$employment,$whether$on$resident$or$non[
resident$status,$may$enter$the$Philippines$without$first$securing$an$employment$permit$from$the$Department$of$
Labor$and$Employment.$If$an$alien$enters$the$country$under$a$non[working$visa$and$wishes$to$be$employed$
thereafter,$he$may$only$be$allowed$to$be$employed$upon$presentation$of$a$duly$approved$employment$permit.$
&
Section&5.&Requirements(for(employment(permit(application.$$The$application$for$an$employment$permit$shall$be$
accompanied$by$the$following:$
a. Curriculum$vitae$duly$signed$by$the$applicant$indicating$his$educational$background,$his$work$experience$and$
other$data$showing$that$he$possesses$high$technical$skills$in$his$trade$or$profession;$
b. Contract$of$employment$between$the$employer$and$the$principal$which$shall$embody$the$following,$among$
others:$
1. That$the$non[resident$alien$worker$shall$comply$with$all$applicable$laws$and$rules$and$regulations$of$the$
Philippines;$
2. That$the$non[resident$alien$worker$and$the$employer$shall$bind$themselves$to$train$at$least$two$(2)$
Filipino$understudies$for$a$period$to$be$determined$by$the$Secretary$of$Labor$and$Employment;$and$
3. That$he$shall$not$engage$in$any$gainful$employment$other$than$that$for$which$he$was$issued$a$permit.$
c. A$designation$by$the$employer$of$at$least$two$(2)$understudies$for$every$alien$worker.$Such$understudies$
must$be$the$most$ranking$regular$employees$in$the$section$or$department$for$which$the$expatriates$are$
being$hired$to$ensure$the$actual$transfer$of$technology.$
&
Section&6.&Issuances(of(employment(permit.$$The$Secretary$of$Labor$and$Employment$may$issue$an$employment$
permit$to$the$applicant$based$on:$
a. Compliance$by$the$applicant$and$his$employer$with$the$requirements$of$Section$2$hereof;$
b. Report$of$the$Bureau$Director$as$to$the$availability$or$non[availability$of$any$person$in$the$Philippines$who$is$
competent,$able,$and$willing$to$do$the$job$for$which$the$services$of$the$applicant$are$desired;$
c. His$assessment$as$to$whether$or$not$the$employment$of$the$applicant$will$redound$to$the$national$interest;$
d. Admissibility$of$the$alien$as$certified$by$the$Commission$on$Immigration$and$Deportation;$
e. The$recommendation$of$the$Board$of$Investments$or$other$appropriate$government$agencies$if$the$applicant$
will$be$employed$in$preferred$areas$of$investments$or$in$accordance$with$imperatives$of$economic$
developments;$and$
f. Payment$of$a$P100.00$fee.$
Section&7.&Duration(of(employment(permit.$$Subject$to$renewal$upon$showing$of$good$cause,$the$employment$
permit$shall$be$valid$for$a$minimum$period$of$one$(1)$year$starting$from$the$date$of$its$issuance$unless$sooner$
revoked$by$the$Secretary$of$Labor$and$Employment$for$violation$of$any$provisions$of$the$Code$or$of$these$Rules.$
$
Section&8.&Advice(to(Commission(on(Immigration(and(Deportation.$$The$Bureau$shall$advice$the$Commission$on$
Immigration$and$Deportation$on$the$issuance$of$an$employment$permit$to$an$applicant.$
&
Section&9.&Understudy(Training(Program.$$The$employer$shall$submit$a$training$program$for$his$understudies$to$
the$Bureau$within$thirty$(30)$days$upon$arrival$of$the$alien$workers.$The$supervision$of$the$training$program$shall$
be$the$responsibility$of$the$Bureau$and$shall$be$in$accordance$with$standards$established$by$the$Secretary$of$
Labor$and$Employment.$
$

a.

Coverage;$Exemption$
$
DEPARTMENT&ORDER&NO.&97T09,&SERIES&OF&2009&
$
Section&1.$Coverage.$$All$foreign$nationals$who$intend$to$engage$in$gainful$employment$in$the$
Philippines$shall$apply$for$Alien$Employment$Permit$(AEP).$
Section&2.(Exemption.$$The$following$categories$of$foreign$nationals$are$exempt$from$securing$an$
employment$permit:$
a. All$members$of$the$diplomatic$service$and$foreign$government$official$accredited$by$and$with$
reciprocity$arrangement$with$the$Philippine$government;$

Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$46$of$80$

b.
c.
d.
e.
f.

b.

Ish$Guidote$

Officers$and$staff$of$international$organizations$of$which$the$Philippine$government$is$a$member,$
and$their$legitimate$spouses$desiring$to$work$in$the$Philippines;$
Foreign$nationals$elected$as$members$of$the$Governing$Board$who$do$not$occupy$any$other$
position,$but$have$only$voting$rights$in$the$corporation;$
All$foreign$nationals$granted$exemption$by$law;$
Owners$and$representatives$of$foreign$principals$whose$companies$are$accredited$by$the$Philippine$
Overseas$Employment$Administration$(POEA),$who$come$to$the$Philippines$for$a$limited$period$and$
solely$for$the$purpose$of$interviewing$Filipino$applicants$for$employment$abroad;$
Foreign$nationals$who$come$to$the$Philippines$to$teach,$present$and/or$conduct$research$studies$in$
universities$and$colleges$as$visiting,$exchange,$or$adjunct$professors$under$formal$arrangements$
between$the$universities$or$colleges$in$the$Philippines$and$foreign$universities$or$colleges;$or$
between$the$Philippine$government$and$foreign$government;$provided$that$the$exemption$is$on$a$
reciprocal$basis;$and$
Permanent$resident$foreign$nationals,$probationary$or$temporary$resident$visa$holders.$

g.
$
COVERAGE&OF&ARTICLES&40T42,&LABOR&CODE$

Only$applies$to$resident$aliens.$For$resident$aliens,$the$documentary$requirement$is$an$Alien$
Employment$Registration$Certificate$(AERC).$

Anti[Dummy$Law$(CA$108,$as$amended)$prevents$aliens$from$engaging$in$nationalized$businesses$
such$as$public$utilities$and$exploitation$of$natural$resources$(60%$ownership$requirement$in$the$
Constitution).$

DOJ$Opinion$No.$143,$series$of$1976:$Aliens$may$engage$in$nationalized$activities$when:$
o Sec.$of$Justice$authorizes$the$employment$of$foreign$technical$personnel;$and$
o A$foreigner$is$elected$to$the$Board$of$Directors$in$proportion$to$his$allowable$participation$in$
the$capital.$

Omnibus$Investments$Code$(EO$226)$allows$foreigners$to$be$employed$for$a$limited$period$in$
technical,$supervisory,$and$advisory$positions.$
$
Almodiel&v.&NLRC$(223$SCRA$341,$1993)$
Almodiel$contests$his$dismissal$on$the$basis$of$redundancy,$alleging$that$the$person$who$assumed$his$
post,$Danny$Ang$Tan$Chai,$failed$to$get$an$AEP.$Court$dismissed$his$petition$because$Ang,$being$a$
resident$alien,$is$not$required$to$obtain$an$AEP.$Almodiel$also$claims$he$should$not$have$been$dismissed$
because$he$is$better$qualified$than$Ang.$This$contention$is$erroneous.$Such$objections$are$generally$
frowned$upon,$because$what$is$important$is$that$the$employee$appointed$possesses$the$minimum$
qualifications$for$assuming$the$post.$$
$
Conditions$for$Grant$of$Permit;$Denial$
$
DEPARTMENT&ORDER&NO.&97T09,&as&amended&by&DEPARTMENT&ORDER&NO.&120T12&
&
Section&3.(Procedure(in(the(Processing(of(Applications(for(AEP.$$
a. All$applications$for$AEP$shall$be$filed$and$processed$at$the$DOLE$Regional$Office$or$Field$Office$
having$jurisdiction$over$the$intended$place$of$work.$
$
Only$applications$with$the$following$complete$documentary$requirements$shall$be$received$and$
acted$upon$by$the$Regional$Office:$
1. Duly$accomplished$application$form;$
2. Photocopy$of$passport$with$visa,$or$Certificate$of$Recognition$for$Refugees$or$Stateless$
Persons;$
3. Contract$of$Employment/Appointment$of$Board$Secretarys$Certificate$of$Election;$
4. Photocopy$of$Mayors$Permit$to$Operate$Business$or$in$case$of$locators$in$economic$zones,$
Certification$from$the$PEZA$or$the$Ecozone$Authority$that$the$company$is$located$and$
operating$within$the$ecozone;$
b. In$case$of$foreign$nationals$to$be$assigned$in$related$companies,$they$may$file$their$application$with$
the$Regional$Office$having$jurisdiction$over$the$applicants$intended$places$of$work.$
c. Additional$position$of$the$foreign$national$in$the$same$company$or$subsequent$assignment$in$
related$companies$during$the$validity$or$renewal$of$the$AEP$will$be$subject$for$publication$
requirement$and$payment$of$publication$fee.$A$change$of$position$or$employer$shall$require$an$
application$for$new$AEP.$
$
Section&4.$Fees.$$Upon$filing$of$application,$applicant$shall$pay$a$fee$of$Eight$Thousand$Pesos$
(P8,000.00)$for$an$AEP$with$a$validity$of$1$year.$In$case$the$period$of$employment$is$more$than$1$year,$as$
additional$Three$Thousand$Pesos$(P3,000.00)$shall$be$charged$for$every$additional$year$or$fraction$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$47$of$80$

thereof.$In$case$of$renewal,$applicant$shall$pay$a$fee$of$Three$Thousand$Pesos$(P3,000.00)$for$each$year$
of$validity$or$fraction$thereof.$
$$
A$courier$fee$of$Two$Hundred$Pesos$(P200.00)$shall$be$charged$to$the$foreign$national$upon$
implementation$of$AEP$online$application$system.$
$$$$
Any$change$of$information$or$entries$in$the$AEP$shall$be$subject$to$payment$of$Seven$Hundred$Fifty$
Pesos$(P750.00)$for$AEP$replacement.$In$case$of$loss$of$AEP,$request$for$replacement$shall$be$supported$
by$an$Affidavit$Of$Loss.$All$fees$covered$by$official$receipt$issued$by$Regional$Office$are$non[refundable.$
&
Section&5.&Publication.$$The$Regional$Office$shall$publish$all$applications$for$new$AEP,$additional$
position$in$the$same$company$or$subsequent$assignment$in$related$companies$within$two$(2)$working$
days$upon$receipt$of$application.$Any$objection$or$information$against$the$employment$of$the$foreign$
national$may$be$filed$with$the$Regional$Office$within$thirty$(30)$calendar$days$after$publication.$
&
Section&6.&Processing(Period.$$Applications$for$new$AEP$shall$be$processed$and$an$AEP$shall$be$issued$
within$twenty[four$(24)$hours$after$publication$and$payment$of$required$fees$and$fines,$if$there$is$any.$
Applications$for$renewal$of$AEP$shall$be$processed$within$24$hours$after$receipt.$
&
Section&10.&Denial(of(application;(Grounds.$$
a. Misrepresentation$of$facts$in$the$application$
b. Submission$of$falsified$documents$
c. Foreign$national$has$been$convicted$of$a$criminal$offense$or$a$fugitive$from$justice$
d. Availability$of$a$filipino$for$the$job$intended$for$foreign$national$
$
Denial$of$application$for$AEP$shall$cause$the$forfeiture$of$the$fees$paid$by$applicant.$
$
General&Milling&Corporation&v.&Torres$(196$SCRA$215,$1991)$
Timothy$Cone$was$employed$as$a$basketball$coach$by$petitioner.$He$was$granted$an$AEP.$The$Basketball$
Coaches$Association$appealed$the$issuance$of$his$AEP$to$the$SOLE.$The$latter$reversed$and$cancelled$the$
permit$on$the$ground$that$there$is$no$showing$that$there$is$no$person$in$the$Philippines$who$is$
competent,$able,$and$willing$to$perform$the$work,$or$that$Cones$employment$would$redound$to$the$
national$interest.$The$Court$upheld$the$SOLEs$authority$to$make$such$a$finding$of$availability,$and$to$
determine$the$benefits$of$his$employment$to$the$national$interest.$The$legal$basis$for$his$authority$is$Art.$
40$of$the$Labor$Code.$The$use$of$the$word$may$is$permissive$which$means$that$the$SOLE$can$exercise$
discretion$in$allowing$the$issuance$of$AEPs.$He$is$also$mandated$by$Art.$12$to$regulate$employment.$$
$
Pacific&Consultants&International&Asia,&Inc.&v.&Schonfeld$(516$SCRA$209,$2007)$
PCIJ$had$a$local$subsidiary,$Pacicon$Philippines,$Inc.$(PPI).$Schonfeld$was$hired$by$Heinrichsen$as$Sector$
Manager$of$PPI.$After$his$dismissal,$he$filed$a$complaint$with$the$LA.$PCIJ$claims$that$the$LA$does$not$
have$jurisdiction$over$the$offense$because$it,$not$PPI,$is$the$employer.$Moreover,$their$contract$states$
that$any$claims$should$be$settled$in$the$Court$of$Arbitration$in$London.$The$Court$upheld$the$LAs$
jurisdiction.$PPI,$a$local$corporation,$is$Schonfelds$employer.$It$is$to$be$remembered$that$when$applying$
for$an$AEP,$the$pertinent$employment$contract$must$be$attached$to$the$application.$The$contract$
attached$to$Schonfelds$application$states$that$his$employer$is$PPI.$On$the$issue$of$forum(non(
conveniens,$the$Court$held$that$local$tribunals$may$exercise$jurisdiction$pursuant$to$the$guidelines$in$
Bank(of(America(v.(CA:$(1)$the$tribunal$is$one$which$the$parties$may$immediately$resort$to;$(2)$the$tribunal$
is$capable$of$rendering$an$intelligent$decision;$and$(3)$the$tribunal$has$the$power$to$enforce$the$
decision.$
$
c.

Ish$Guidote$

Renewal;$Validity$of$AEP$
$
DEPARTMENT&ORDER&NO.&97T09,&as&amended&by&DEPARTMENT&ORDER&NO.&120T12&
$
Section&9.&Renewal.$$An$application$for$renewal$of$AEP$shall$be$filed$before$its$expiration.$
$
In$case$of$corporate$officers,$whose$election/appointment$takes$place$before$expiration$of$AEP,$the$
application$shall$be$filed$not$later$than$15$working$days$after$the$election$or$appointment$or$before$
expiration$of$AEP.$
$
In$case$the$election$or$appointment$will$take$place$after$the$expiration$of$AEP,$the$application$for$
renewal$shall$be$filed$before$the$expiration$of$the$AEP,$and$shall$be$renewed$for$1$year.$In$case$the$
foreign$national$is$not$re[elected$or$re[appointed,$the$AEP$shall$be$automatically$revoked.$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$48$of$80$

$
Within$15$working$days$after$the$date$of$election/appointment,$the$foreign$national$shall$submit$to$the$
issuing$Regional$Office$the$Board$Secretarys$Certificate$of$Election$or$Appointment.$
$$
Section&11.&Validity.$$AEP$shall$be$valid$for$the$position$and$company$for$which$it$was$issued$for$1$year,$
unless$employment$contract,$consultancy$services$or$other$modes$of$engagement$provides$otherwise,$
which$in$no$case$shall$exceed$5$years.$
$

d.

E.

Revocation;$Cancellation;$Grounds$
$
DEPARTMENT&ORDER&NO.&97T09,&as&amended&by&DEPARTMENT&ORDER&NO.&120T12&
$
Section&12.&DELETED$
$
Section&13.&Cancellation(or(revocation.$$The$Regional$Director$may,$motu(proprio(or$upon$petition,$
cancel$or$revoke$an$AEP$after$due$process,$based$on$the$following$grounds:$
a. Non[compliance$with$any$requirements$or$conditions$for$which$AEP$was$issued;$
b. Misrepresentation$of$facts$in$the$application;$
c. Submission$of$falsified$or$tampered$documents;$
d. Meritorious$objection$or$info$against$the$employment$of$the$foreign$national$ad$determined$by$
Regional$Director;$
e. Foreign$national$has$been$convicted$of$a$criminal$offense$or$a$fugitive$from$justice;$and$
f. Employer$terminated$the$employment$of$the$foreign$national.$
$$
Section&14.&Appeal.$$Any$aggrieved$party$may$file$an$appeal$with$the$Secretary$within$10$days$after$
receipt$of$the$copy$of$denial/suspension/cancellation/revocation$order.$
$
The$decision$of$the$Secretary$shall$be$final$and$executory$unless$a$motion$for$reconsideration$is$filed$
within$10$days$after$receipt$of$the$decision$of$the$Secretary.$No$second$motion$for$reconsideration$shall$
be$entertained.$

Human$Resources$Development$
$
1.
Policy$Objectives$
$

2.
Ish$Guidote$

RA&7796,&TESDA&ACT&OF&1994&
&
Section&2.$Declaration(of(Policy.$$It$is$hereby$declared$the$policy$of$the$State$to$provide$relevant,$accessible,$high$
quality$and$efficient$technical$education$and$skills$development$in$support$of$the$development$of$high$quality$
Filipino$middle[level$manpower$responsive$to$and$in$accordance$with$Philippine$development$goals$and$priorities.$
$
The$State$shall$encourage$active$participation$of$various$concerned$sectors,$particularly$private$enterprises,$being$
direct$participants$in$and$immediate$beneficiaries$of$a$trained$and$skilled$workforce,$in$providing$technical$
education$and$skills$development$opportunities.$
$
Section&3.$Statement(of(Goals(and(Objectives.$$It$is$the$goal$and$objective$of$this$Act$to:$
$
Promote$and$strengthen$the$quality$of$technical$education$and$skills$development$programs$to$attain$
international$competitiveness;$
$
Focus$technical$education$and$skills$development$on$meeting$the$changing$demands$for$quality$middle[level$
manpower;$
$
Encourage$critical$and$creative$thinking$by$disseminating$the$scientific$and$technical$knowledge$base$of$middle[
level$manpower$development$programs;$
$
Recognize$and$encourage$the$complementary$roles$of$public$and$private$institutions$in$technical$education$and$
skills$development$and$training$systems;$and$
$
Inculcate$desirable$values$through$the$development$of$moral$character$with$emphasis$on$work$ethic,$self[
discipline,$self[reliance$and$nationalism.$
$
Apprentice$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$49$of$80$

$
$

a.

Definition$
$
Article&58.$Definition(of(terms.$$As$used$in$this$Title:$
b. An$apprentice$is$a$worker$who$is$covered$by$a$written$apprenticeship$agreement$with$an$
individual$employer$or$any$of$the$entities$recognized$under$this$Chapter.$
$
RA&7796,&TESDA&ACT&OF&1994&
$
Section&4.(Definition(of(terms.$$As$used$in$this$Act:$
j.
Apprenticeship$training$within$employment$with$compulsory$related$theoretical$instruction$
involving$a$contract$between$an$apprentice$and$an$employer$on$an$approved$apprenticeable$
occupation;$
k. Apprentice$is$a$person$undergoing$training$for$an$approved$apprenticeable$occupation$during$an$
apprenticeship$agreement;$
l.
Apprenticeship&Agreement$is$a$contract$wherein$a$prospective$employer$binds$himself$to$train$
the$apprentice$who$in$turn$accepts$the$terms$of$training$for$a$recognized$apprenticeable$
occupation$emphasizing$the$rights,$duties$and$responsibilities$of$each$party;$

GENERAL&POLICY&AND&GUIDELINES$

Apprenticeship$$an$arrangement$and$period$when$an$upcoming$worker$undergoes$training,$more$
or$less$formal,$to$learn$the$ropes$of$a$skilled$job.$

Department$Order$No.$8,$series$of$1989$$policies:$
o Voluntary$adoption$for$apprenticeship$programs$to$meet$increasing$demand$for$skilled$
workers;$
o Increase$worker$productivity$through$a$relevant$and$effective$apprenticeship$program.$

ROLE&OF&THE&BUREAU&OF&LOCAL&EMPLOYMENT&(BLE)$

Review$and$publish$a$list$of$apprenticeable$occupations;$

Regional$offices:$screen$and$evaluate$enterprises,$only$those$with$adequate$facilities$for$training$
shall$be$approved;$issue$certificates$of$program$recognition;$

Establish$a$Plant$Apprenticeship$Committee:$
o Tripartite;$
o To$monitor$progress$and$compliance$with$agreements;$
o To$recommend$certificates$of$completion.$
$
IMPLEMENTATION&BY&TESDA$
Section$18$of$the$TESDA$Act$empowers$it$to$administer$the$apprenticeship$program.$

$
b.

Apprenticeable$Occupation$
$
RA&7796,&TESDA&ACT&OF&1994&
$
Section&4.(Definition(of(terms.$$As$used$in$this$Act:$
m. Apprenticeable&Occupation$is$an$occupation$officially$endorsed$by$a$tripartite$body$and$
approved$for$apprenticeable$by$the$Authority;$

$
c.

Qualifications$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&II,&RULE&VI&
&
Section&11.&Qualifications(of(apprentices.$$To$qualify$as$apprentice,$an$applicant$shall:$
(a) Be$at$least$fifteen$years$of$age;$provided$those$who$are$at$least$fifteen$years$of$age$but$less$than$
eighteen$may$be$eligible$for$apprenticeship$only$in$non[hazardous$occupations;$
(b) Be$physically$fit$for$the$occupation$in$which$he$desires$to$be$trained;$
(c) Possess$vocational$aptitude$and$capacity$for$the$particular$occupation$as$established$through$
appropriate$tests;$and$
(d) Possess$the$ability$to$comprehend$and$follow$oral$and$written$instructions.$
$
Trade$and$industry$associations$may,$however,$recommend$to$the$Secretary$of$Labor$and$Employment$
appropriate$educational$qualifications$for$apprentices$in$certain$occupations.$Such$qualifications,$if$
approved,$shall$be$the$educational$requirements$for$apprenticeship$in$such$occupations$unless$waived$

Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$50$of$80$

by$an$employer$in$favor$of$an$applicant$who$has$demonstrated$exceptional$ability.$A$certification$
explaining$briefly$the$ground$for$such$waiver,$and$signed$by$the$person$in$charge$of$the$program,$shall$
be$attached$to$the$apprenticeship$agreement$of$the$applicant$concerned.$
$
OTHER&QUALIFICATIONS&AND&REQUIREMENTS$

$12$$aptitude$test;$

$13$$physical$fitness.$
$
RA&7610,&as&amended&by&RA&7658&and&RA&9231&
&
Section&12.$Employment(of(Children.$$Children$below$fifteen$(15)$years$of$age$shall$not$be$employed$
except:$
$
1)
When$a$child$works$directly$under$the$sole$responsibility$of$his/her$parents$or$legal$guardian$and$
where$only$members$of$his/her$family$are$employed:$Provided,(however,$That$his/her$
employment$neither$endangers$his/her$life,$safety,$health,$and$morals,$nor$impairs$his/her$normal$
development:$Provided,(further,$That$the$parent$or$legal$guardian$shall$provide$the$said$child$with$
the$prescribed$primary$and/or$secondary$education;$or$
2)
Where$a$childs$employment$or$participation$in$public$entertainment$or$information$through$
cinema,$theater,$radio,$television$or$other$forms$of$media$is$essential:$Provided,$That$the$
employment$contract$is$concluded$by$the$childs$parents$or$legal$guardian,$with$the$express$
agreement$of$the$child$concerned,$if$possible,$and$the$approval$of$the$Department$of$Labor$and$
Employment:$Provided,(further,$That$the$following$requirements$in$all$instances$are$strictly$
complied$with:$
(a) The$employer$shall$ensure$the$protection,$health,$safety,$morals$and$normal$development$of$
the$child;$
(b) The$employer$shall$institute$measures$to$prevent$the$childs$exploitation$or$discrimination$
taking$into$account$the$system$and$level$of$remuneration,$and$the$duration$and$
arrangement$of$working$time;$and$
(c) The$employer$shall$formulate$and$implement,$subject$to$the$approval$and$supervision$of$
competent$authorities,$a$continuing$program$for$training$and$skills$acquisition$of$the$child.$
$
In$the$above[exceptional$cases$where$any$such$child$may$be$employed,$the$employer$shall$first$secure,$
before$engaging$such$child,$a$work$permit$from$the$Department$of$Labor$and$Employment$which$shall$
ensure$observance$of$the$above$requirements.$
$
For$purposes$of$this$Article,$the$term$child$shall$apply$to$all$persons$under$eighteen$(18)$years$of$age.$
$
d.

Allowed$Employment;$Required$Program$Approval$
$
Article&60.&Employment(of(apprentices.$$Only$employers$in$the$highly$technical$industries$may$employ$
apprentices$and$only$in$apprenticeable$occupations$approved$by$the$Secretary$of$Labor$and$
Employment.$(As$amended$by$Section$1,$Executive$Order$No.$111,$December$24,$1986)$
$
Nitto&Enterprises&v.&NLRC$(258$SCRA$654,$1995)$
In$this$case,$the$Court$held$that$since$Capili$was$hired$on$May$8,$he$became$as$regular$employee$as$early$
as$May$28$because$the$apprenticeship$agreement$was$filed$with$the$DOLE$on$June$7,$1990.$Moreover,$
the$apprenticeship$program$of$the$company$has$not$been$duly$approved$by$the$DOLE.$Therefore,$the$
apprenticeship$agreement$cannot$be$effective.$Finally,$Capili$was$denied$due$process$when$he$was$
dismissed$without$the$requisite$two$notices$and$hearing.$$

e.

Terms$and$Conditions$of$Employment$
$
Article&61.&Contents(of(apprenticeship(agreements.$$Apprenticeship$agreements,$including$the$wage$
rates$of$apprentices,$shall$conform$to$the$rules$issued$by$the$Secretary$of$Labor$and$Employment.$The$
period$of$apprenticeship$shall$not$exceed$six$months.$Apprenticeship$agreements$providing$for$wage$
rates$below$the$legal$minimum$wage,$which$in$no$case$shall$start$below$75$percent$of$the$applicable$
minimum$wage,$may$be$entered$into$only$in$accordance$with$apprenticeship$programs$duly$approved$by$
the$Secretary$of$Labor$and$Employment.$The$Department$shall$develop$standard$model$programs$of$
apprenticeship.$(As$amended$by$Section$1,$Executive$Order$No.$111,$December$24,$1986)$

$
Article&72.&Apprentices(without(compensation.$$The$Secretary$of$Labor$and$Employment$may$authorize$
the$hiring$of$apprentices$without$compensation$whose$training$on$the$job$is$required$by$the$school$or$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$51$of$80$

training$program$curriculum$or$as$requisite$for$graduation$or$board$examination.$
$
NO&EMPLOYERTEMPLOYEE&RELATIONSHIP$
In$Filamer(v.(IAC,$the$Court$held$that$apprentices$hired$under$Art.$72$are$not$considered$employees$of$the$
school.$
$
f.

Costs$
$
Article&71.&Deductibility(of(training(costs.$$$An$additional$deduction$from$taxable$income$of$one[half$
(1/2)$of$the$value$of$labor$training$expenses$incurred$for$developing$the$productivity$and$efficiency$of$
apprentices$shall$be$granted$to$the$person$or$enterprise$organizing$an$apprenticeship$program:$
Provided,$That$such$program$is$duly$recognized$by$the$Department$of$Labor$and$Employment:$Provided,$
further,$That$such$deduction$shall$not$exceed$ten$(10%)$percent$of$direct$labor$wage:$and$Provided,$
finally,$That$the$person$or$enterprise$who$wishes$to$avail$himself$or$itself$of$this$incentive$should$pay$his$
apprentices$the$minimum$wage.$

g.

Enforcement$
$
Article&65.$Investigation(of(violation(of(apprenticeship(agreement.$$Upon$complaint$of$any$interested$
person$or$upon$its$own$initiative,$the$appropriate$agency$of$the$Department$of$Labor$and$Employment$
or$its$authorized$representative$shall$investigate$any$violation$of$an$apprenticeship$agreement$pursuant$
to$such$rules$and$regulations$as$may$be$prescribed$by$the$Secretary$of$Labor$and$Employment.$
$
Article&66.$Appeal(to(the(Secretary(of(Labor(and(Employment.$$The$decision$of$the$authorized$agency$of$
the$Department$of$Labor$and$Employment$may$be$appealed$by$any$aggrieved$person$to$the$Secretary$of$
Labor$and$Employment$within$five$(5)$days$from$receipt$of$the$decision.$The$decision$of$the$Secretary$of$
Labor$and$Employment$shall$be$final$and$executory.$
$
Article&67.&Exhaustion(of(administrative(remedies.$$No$person$shall$institute$any$action$for$the$
enforcement$of$any$apprenticeship$agreement$or$damages$for$breach$of$any$such$agreement,$unless$he$
has$exhausted$all$available$administrative$remedies.$

$
3.

Learners$
$
a.
Definition$
$
Article&73.&Learners(defined.$$Learners$are$persons$hired$as$trainees$in$semi[skilled$and$other$industrial$
occupations$which$are$non[apprenticeable$and$which$may$be$learned$through$practical$training$on$the$
job$in$a$relatively$short$period$of$time$which$shall$not$exceed$three$(3)$months.$
$
RA&7796,&TESDA&ACT&OF&1994&
$
Section&4.(Definition(of(terms.$$As$used$in$this$Act:$
n. Learners$refers$to$persons$hired$as$trainees$in$semi[skilled$and$other$industrial$occupations$which$
are$non[apprenticeable.$Learnership$programs$must$be$approved$by$the$Authority;$
$
APPRENTICE&
LEARNER&
More$than$3$months$
Less$than$3$months$
Skilled$
Semi[skilled$
There$is$a$commitment$to$hire$the$apprentice$after$ Commitment$to$hire$subject$to$stipulation$of$the$
the$training$period$
parties$
Allowed$only$in$highly[technical$industries$
No$industry$requirement$

$
b.

c.

Ish$Guidote$

Allowed$Employment$
$
Article&74.$When(learners(may(be(hired.$$Learners$may$be$employed$when$no$experienced$workers$are$
available,$the$employment$of$learners$is$necessary$to$prevent$curtailment$of$employment$opportunities,$
and$the$employment$does$not$create$unfair$competition$in$terms$of$labor$costs$or$impair$or$lower$
working$standards.$
$
Terms$and$Conditions$of$Employment$
$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$52$of$80$

Article&75.&Learnership(agreement.$$Any$employer$desiring$to$employ$learners$shall$enter$into$a$
learnership$agreement$with$them,$which$agreement$shall$include:$
a. The$names$and$addresses$of$the$learners;$
b. The$duration$of$the$learnership$period,$which$shall$not$exceed$three$(3)$months;$
c. The$wages$or$salary$rates$of$the$learners$which$shall$begin$at$not$less$than$seventy[five$percent$
(75%)$of$the$applicable$minimum$wage;$and$
d. A$commitment$to$employ$the$learners$if$they$so$desire,$as$regular$employees$upon$completion$of$
the$learnership.$All$learners$who$have$been$allowed$or$suffered$to$work$during$the$first$two$(2)$
months$shall$be$deemed$regular$employees$if$training$is$terminated$by$the$employer$before$the$end$
of$the$stipulated$period$through$no$fault$of$the$learners.$
$
The$learnership$agreement$shall$be$subject$to$inspection$by$the$Secretary$of$Labor$and$Employment$or$
his$duly$authorized$representative.$
$
Article&76.&Learners(in(piecework.$$Learners$employed$in$piece$or$incentive[rate$jobs$during$the$training$
period$shall$be$paid$in$full$for$the$work$done.$
$
4.

Persons$with$Disabilities$(Handicapped)$
$
a.
Definition$
$
RA&7277,&MAGNA&CARTA&FOR&DISABLED&PERSONS$
$
Section&4.&Definition(of(Terms.$$For$purposes$of$this$Act,$these$terms$are$defined$as$follows:$
a) Disabled&persons&are$those$suffering$from$restriction$or$different$abilities,$as$a$result$of$a$mental,$
physical$or$sensory$impairment,$to$perform$an$activity$in$the$manner$or$within$the$range$considered$
normal$for$a$human$being;$
b) Impairment&is$any$loss,$diminution$or$aberration$of$psychological,$physiological,$or$anatomical$
structure$or$function;$
c) Disability&shall$mean$1)$a$physical$or$mental$impairment$that$substantially$limits$one$or$more$
psychological,$physiological$or$anatomical$function$of$an$individual$or$activities$of$such$individual;$2)$
a$record$of$such$an$impairment;$or$3)$being$regarded$as$having$such$an$impairment;$
d) Handicap&refers$to$a$disadvantage$for$a$given$individual,$resulting$from$an$impairment$or$a$
disability,$that$limits$or$prevents$the$function$or$activity,$that$is$considered$normal$given$the$age$
and$sex$of$the$individual;$
$
Article&78.&Definition.$$Handicapped$workers$are$those$whose$earning$capacity$is$impaired$by$age$or$
physical$or$mental$deficiency$or$injury.$
$
b.
Policy$Declaration$
$
Section&2.&Declaration(of(Policy.($The$grant$of$the$rights$and$privileges$for$disabled$persons$shall$be$
guided$by$the$following$principles:$
a) Disabled$persons$are$part$of$Philippine$society,$thus$the$State$shall$give$full$support$to$the$
improvement$of$the$total$well[being$of$disabled$persons$and$their$integration$into$the$mainstream$
of$society.$Toward$this$end,$the$State$shall$adopt$policies$ensuring$the$rehabilitation,$self[
development$and$self[reliance$of$disabled$persons.$It$shall$develop$their$skills$and$potentials$to$
enable$them$to$compete$favorably$for$available$opportunities.$
b) Disabled$persons$have$the$same$rights$as$other$people$to$take$their$proper$place$in$society.$They$
should$be$able$to$live$freely$and$as$independently$as$possible.$This$must$be$the$concern$of$everyone$
$the$family,$community$and$all$government$and$nongovernment$organizations.$Disabled$persons$
rights$must$never$be$perceived$as$welfare$services$by$the$Government.$
c) The$rehabilitation$of$the$disabled$persons$shall$be$the$concern$of$the$Government$in$order$to$foster$
their$capacity$to$attain$a$more$meaningful,$productive$and$satisfying$life.$To$reach$out$to$a$greater$
number$of$disabled$persons,$the$rehabilitation$services$and$benefits$shall$be$expanded$beyond$the$
traditional$urban[based$centers$to$community$based$programs,$that$will$ensure$full$participation$of$
different$sectors$as$supported$by$national$and$local$government$agencies.$
d) The$State$also$recognizes$the$role$of$the$private$sector$in$promoting$the$welfare$of$disabled$
persons$and$shall$encourage$partnership$in$programs$that$address$their$needs$and$concerns.$
e) To$facilitate$integration$of$disabled$persons$into$the$mainstream$of$society,$the$State$shall$advocate$
for$and$encourage$respect$for$disabled$persons.$The$State$shall$exert$all$efforts$to$remove$all$social,$
cultural,$economic,$environmental$and$attitudinal$barriers$that$are$prejudicial$to$disabled$persons.$

$
Ish$Guidote$

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c.

Coverage$
$
Section&3.&Coverage.$$This$Act$shall$cover$all$disabled$persons$and,$to$the$extent$herein$provided,$
departments,$offices$and$agencies$of$the$National$Government$or$nongovernment$organizations$
involved$in$the$attainment$of$the$objectives$of$this$Act.$

d.

Rights$and$Privileges$
$

RA&7277,&as&amended&by&RA&10524&
&
Section&5.&Equal(Opportunity(for(Employment.$$No$person$with$disability$shall$be$denied$access$to$
opportunities$for$suitable$employment.$A$qualified$employee$with$disability$shall$be$subject$to$the$same$
terms$and$conditions$of$employment$and$the$same$compensation,$privileges,$benefits,$fringe$benefits,$
incentives$or$allowances$as$a$qualified$able[bodied$person.$
$
At$least$one$percent$(1%)$of$all$positions$in$all$government$agencies,$offices$or$corporal$ions$shall$be$
reserved$for$persons$with$disability:$Provided,$That$private$corporations$with$more$than$one$hundred$
(100)$employees$are$encouraged$to$reserve$at$least$one$percent$(1%)$of$all$positions$for$persons$with$
disability.$
$
Section&6.&Sheltered(Employment.($If$suitable$employment$for$disabled$persons$cannot$be$found$
through$open$employment$as$provided$in$the$immediately$preceding$Section,$the$State$shall$endeavor$
to$provide$it$by$means$of$sheltered$employment.$In$the$placement$of$disabled$persons$in$sheltered$
employment,$it$shall$accord$due$regard$to$the$individual$qualities,$vocational$goals$and$inclinations$to$
ensure$a$good$working$atmosphere$and$efficient$production.$
$
Section&7.&Apprenticeship.$$Subject$to$the$provisions$of$the$Labor$Code$as$amended,$disabled$persons$
shall$be$eligible$as$apprentices$or$learners:$provided,$that$their$handicap$is$not$as$much$as$to$effectively$
impede$the$performance$of$job$operations$in$the$particular$occupation$for$which$they$are$hired;$
Provided,$further,$that$after$the$lapse$of$the$period$of$apprenticeship,$if$found$satisfactory$in$the$job$
performance,$they$shall$be$eligible$for$employment.&
$
Bernardo&v.&NLRC&and&FEBTC$(310$SCRA$186,$1999)$
Petitioners$were$employed$by$Far$East$Bank$as$money$sorters$and$counters.$Their$contracts$were$
consistently$renewed$every$6$months.$After$several$years$the$positions$were$abolished.$Petitioners$filed$
a$complaint$for$illegal$dismissal.$FEBTCs$defense$was$that$it$was$merely$accommodating$petitioners,$
and$that$the$positions$were$created$especially$for$them$since$the$functions$they$performed$regularly$
pertained$to$bank$tellers.$The$Court$held$that$petitioners$were$illegally$dismissed.$They$became$regular$
employees$when$their$contracts$were$renewed$after$6$months.$They$performed$tasks$necessary$and$
desirable$to$FEBTC.$Moreover,$Sec.$5,$RA$7277$provides$that$qualified$disabled$employees$should$be$
given$the$same$terms$and$conditions$of$employment$as$a$qualified$able[bodied$person.$$
$
e.

Discrimination$
$
RA&7277,&MAGNA&CARTA&FOR&DISABLED&PERSONS$
$
Section&32.$Discrimination(on(Employment.$$No$entity,$whether$public$or$private,$shall$discriminate$
against$a$qualified$disabled$person$by$reason$of$disability$in$regard$to$job$application$procedures,$the$
hiring,$promotion,$or$discharge$of$employees,$employee$compensation,$job$training,$and$other$terms,$
conditions,$and$privileges$of$employment.$The$following$constitute$acts$of$discrimination:$
a) Limiting,$segregating$or$classifying$a$disabled$job$applicant$in$such$a$manner$that$adversely$affects$
his$work$opportunities;$
b) Using$qualification$standards,$employment$tests$or$other$selection$criteria$that$screen$out$or$tend$
to$screen$out$a$disabled$person$unless$such$standards,$tests$or$other$selection$criteria$are$shown$to$
be$job[related$for$the$position$in$question$and$are$consistent$with$business$necessity;$
c) Utilizing$standards,$criteria,$or$methods$of$administration$that:$
1) Have$the$effect$of$discrimination$on$the$basis$of$disability;$or$
2) Perpetuate$the$discrimination$of$others$who$are$subject$to$common$administrative$control.$
d) Providing$less$compensation,$such$as$salary,$wage$or$other$forms$of$remuneration$and$fringe$
benefits,$to$a$qualified$disabled$employee,$by$reason$of$his$disability,$than$the$amount$to$which$a$
non[disabled$person$performing$the$same$work$is$entitled;$
e) Favoring$a$non[disabled$employee$over$a$qualified$disabled$employee$with$respect$to$promotion,$
training$opportunities,$study$and$scholarship$grants,$solely$on$account$of$the$latters$disability;$

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f)
g)

h)

i)

Re[assigning$or$transferring$a$disabled$employee$to$a$job$or$position$he$cannot$perform$by$reason$
of$his$disability;$
Dismissing$or$terminating$the$services$of$a$disabled$employee$by$reason$of$his$disability$unless$the$
employer$can$prove$that$he$impairs$the$satisfactory$performance$of$the$work$involved$to$the$
prejudice$of$the$business$entity:$provided,$however,$that$the$employer$first$sought$to$provide$
reasonable$accommodations$for$disabled$persons;$
Failing$to$select$or$administer$in$the$most$effective$manner$employment$tests$which$accurately$
reflect$the$skills,$aptitude$or$other$factor$of$the$disabled$applicant$or$employee$that$such$tests$
purports$to$measure,$rather$than$the$impaired$sensory,$manual$or$speaking$skills$of$such$applicant$
or$employee,$if$any;$and$
Excluding$disabled$persons$from$membership$in$labor$unions$or$similar$organizations.$

$
RA&7277,&MAGNA&CARTA&FOR&DISABLED&PERSONS$
$
Section&33.$Employment$Entrance$Examination.$$Upon$an$offer$of$employment,$a$disabled$applicant$
may$be$subjected$to$medical$examination,$on$the$following$occasions:$
a) All$entering$employees$are$subjected$to$such$an$examination$regardless$of$disability;$
b) Information$obtained$during$the$medical$condition$or$history$of$the$applicant$is$collected$and$
maintained$on$separate$forms$and$in$separate$medical$files$and$is$treated$as$a$confidential$medical$
record;$Provided,$however,$that:$
1) Supervisors$and$managers$may$be$informed$regarding$necessary$restrictions$on$the$work$or$
duties$of$the$employees$and$necessary$accommodations;$
2) First$aid$and$safety$personnel$may$be$informed,$when$appropriate,$if$the$disability$may$require$
emergency$treatment;$
3) Government$officials$investigating$compliance$with$this$Act$shall$be$provided$relevant$
information$on$request;$and$
4) The$results$of$such$examination$are$used$only$in$accordance$with$this$Act.$
$
f.

Enforcement$
$
RA&7277,&MAGNA&CARTA&FOR&DISABLED&PERSONS$
&
Section&44.$Enforcement(by(the(Secretary(of(Justice.$$$
a) Denial$of$Right$
1) Duty$to$Investigate$$the$Secretary$of$Justice$shall$investigate$alleged$violations$of$this$Act,$
and$shall$undertake$periodic$reviews$of$compliance$of$covered$entities$under$this$Act.$
b) Potential$Violations$$If$the$Secretary$of$Justice$has$reasonable$cause$to$believe$that:$
1) Any$person$or$group$of$persons$is$engaged$in$a$pattern$or$practice$of$discrimination$under$this$
Act;$or$
2) Any$person$or$group$or$persons$has$been$discriminated$against$under$this$Act$and$such$
discrimination$raises$an$issue$of$general$public$importance,$the$Secretary$of$Justice$may$
commence$a$legal$action$in$any$appropriate$court.$
$
Section&45.&Authority(of(Court.$$The$court$may$grant$any$equitable$relief$that$such$court$considers$to$
be$appropriate,$including,$to$the$extent$required$by$this$Act:$
a) Granting$temporary,$preliminary$or$permanent$relief;$
b) Providing$an$auxiliary$aid$or$service,$modification$of$policy,$practice$or$procedure,$or$alternative$
method;$and$
c) Making$facilities$readily$accessible$to$and$usable$by$individuals$with$disabilities.$
$
Section&46.&Penal(Clause.$$$
a) Any$person$who$violates$any$provision$of$this$Act$shall$suffer$the$following$penalties:$
1) For$the$first$violation,$a$fine$of$not$less$than$Fifty$thousand$pesos$(P50,000.00)$but$not$
exceeding$One$hundred$thousand$pesos$(P100,000.00)$or$imprisonment$of$not$less$than$six$
(6)$months$but$not$more$than$two$(2)$years,$or$both$at$the$discretion$of$the$court;$and$
2) For$any$subsequent$violation,$a$fine$of$not$less$than$One$hundred$thousand$pesos$
(P100,000.00)$but$not$exceeding$Two$hundred$thousand$pesos$(P200,000.00)$or$
imprisonment$for$not$less$than$two$(2)$years$but$not$more$than$six$(6)$years,$or$both$at$the$
discretion$of$the$court.$
b) Any$person$who$abuses$the$privileges$granted$herein$shall$be$punished$with$imprisonment$of$not$
less$than$six$(6)$months$or$a$fine$of$not$less$than$Five$thousand$pesos$(P5,000.00),$but$not$more$
than$Fifty$thousand$pesos$(P50,000.00),$or$both,$at$the$discretion$of$the$court.$
c) If$the$violator$is$a$corporation,$organization$or$any$similar$entity,$the$officials$thereof$directly$

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d)

involved$shall$be$liable$therefore.$
If$the$violator$is$an$alien$or$a$foreigner,$he$shall$be$deported$immediately$after$service$of$sentence$
without$further$deportation$proceedings.$

$
F.

Conditions$of$Work$
$
1.
Hours$of$Work$
$
a.
Regulation;$Rationale$
$
Manila&Terminal&Co.,&Inc.&v.&Court&of&Industrial&Relations&(91$Phil.$625)$
Petitioner$hired$30$watchmen$to$work$12[hour$shifts.$They$were$paid$P3$for$day$shifts$and$P6$for$night$
shifts.$They$wrote$to$DOLE$asking$for$an$investigation$on$the$matter$of$OT$pay.$No$action$was$taken.$
Meanwhile,$petitioner$implemented$strict$8[hour$shifts$without$reducing$the$salary$rates.$The$watchmen$
filed$a$petition$with$the$CIR$seeking$OT$pay$from$MTC.$The$Court$upheld$the$decision$of$the$CIR.$First,$
they$rejected$the$argument$that$the$stipulated$salary$rates$already$included$OT$pay.$The$watchmen$
worked$the$12[hour$shifts$out$of$necessity.$They$could$not$have$waived$their$right$to$OT$pay$for$the$
simple$reason$that$they$could$not$have$expressly$done$the$same.$The$law$grants$them$this$right.$Neither$
can$their$claim$be$barred$by$estoppel$or$laches,$because$to$accept$the$argument$would$be$to$frustrate$
the$purpose$of$the$law.$Petitioners$claim$that$the$watchmen$are$not$entitled$to$OT$pay$because$the$
parties$are$in$pari(delicto,$the$employment$contracts$being$void$for$being$contrary$to$public$policy.$The$
Court$held$that$this$argument$is$unmeritorious$because$the$provision$on$nullity$in$the$Eight[Hour$Labor$
Law$is$meant$for$the$benefit$of$the$employee.$$
$
b.
Coverage/Exemptions$

Article&82.&Coverage.$$The$provisions$of$this$Title$shall$apply$to$employees$in$all$establishments$and$
undertakings$whether$for$profit$or$not,$but$not$to$government$employees,$managerial$employees,$field$
personnel,$members$of$the$family$of$the$employer$who$are$dependent$on$him$for$support,$domestic$
helpers,$persons$in$the$personal$service$of$another,$and$workers$who$are$paid$by$results$as$determined$
by$the$Secretary$of$Labor$in$appropriate$regulations.$
$
As$used$herein,$managerial$employees$refer$to$those$whose$primary$duty$consists$of$the$management$
of$the$establishment$in$which$they$are$employed$or$of$a$department$or$subdivision$thereof,$and$to$other$
officers$or$members$of$the$managerial$staff.$
$
Field$personnel$shall$refer$to$non[agricultural$employees$who$regularly$perform$their$duties$away$
from$the$principal$place$of$business$or$branch$office$of$the$employer$and$whose$actual$hours$of$work$in$
the$field$cannot$be$determined$with$reasonable$certainty.$
$
ESSENTIALITY&OF&EMPLOYMENT&RELATIONSHIP$
The$provisions$of$Book$III$apply$only$when$there$is$an$EER.$
$
QUESTION&OF&LAW;&QUESTION&OF&FACT$

Law$$concerned$with$what$the$law$is$on$a$certain$set$of$facts;$

Fact$$concerned$with$the$truth$or$validity$of$the$alleged$facts.$

The$existence$of$an$EER$depends$not$on$how$the$parties$characterize$their$relationship$but$on$law.$
CORE&OR&NONTCORE&JOBS$

A$direct$relation$to$the$principals$job$or$business$is$not$necessary$to$establish$EER.$

The$kind$of$work$performed$is$not$the$definitive$test$of$whether$one$is$an$employee$or$not.$

Art.$280$is$not$the$yardstick.$It$merely$distinguishes$between$two$kinds$of$employees$(regular$and$
casual).$
$
OTHER&TEST&FOR&EMPLOYERTEMPLOYEE&RELATIONSHIP:&TWOTTIERED&APPROACH&

Putative$employers$power$to$control$the$employee$with$respect$to$the$means$and$methods$by$
which$the$work$is$to$be$accomplished.$

Underlying$economic$realities$of$the$activity$or$relationship:$
o Is$the$employee$dependent$on$the$relationship$for$financial$stability?$
EVIDENCE&OF&EMPLOYMENT$

No$particular$form$of$evidence$is$required$to$prove$the$existence$of$an$EER.$

The$absence$of$an$employees$name$from$the$payroll$does$not$mean$that$he$is$not$an$employee.$

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Mode$of$payment$is$not$decisive$(pakyaw,$boundary,$commission,$etc.).$
$
Article&276.&Government(employees.$$The$terms$and$conditions$of$employment$of$all$government$
employees,$including$employees$of$government[owned$and$controlled$corporations,$shall$be$governed$
by$the$Civil$Service$Law,$rules$and$regulations.$Their$salaries$shall$be$standardized$by$the$National$
Assembly$as$provided$for$in$the$New$Constitution.$However,$there$shall$be$no$reduction$of$existing$
wages,$benefits$and$other$terms$and$conditions$of$employment$being$enjoyed$by$them$at$the$time$of$
the$adoption$of$this$Code.$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&1.&General(statement(on(coverage.$$The$provisions$of$this$Rule$shall$apply$to$all$employees$in$all$
establishments$and$undertakings,$whether$operated$for$profit$or$not,$except$to$those$specifically$
exempted$under$Section$2$hereof.$
$
See$Annex$C,$Omnibus$Rules$Implementing$the$Labor$Code,$Book$III,$Rule$I[A$
$
1)
Government$Employees;$Exemption$
$
1987&CONSTITUTION&
ARTICLE&IXTB&&THE&CIVIL&SERVICE&COMMISSION&
&
Section&2.&(1)$The$civil$service$embraces$all$branches,$subdivisions,$instrumentalities,$and$
agencies$of$the$Government,$including$government[owned$or$controlled$corporations$with$
original$charters.$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&2.&Exemption.$$The$provisions$of$this$Rule$shall$not$apply$to$the$following$persons$if$
they$qualify$for$exemption$under$the$conditions$set$forth$herein:$
(a) Government$employees$whether$employed$by$the$National$Government$or$any$of$its$
political$subdivision,$including$those$employed$in$government[owned$and/or$controlled$
corporations;$
$
2)

Managerial$Employees$
$
Article&82.&Coverage.$$The$provisions$of$this$Title$shall$apply$to$employees$in$all$
establishments$and$undertakings$whether$for$profit$or$not,$but$not$to$government$employees,$
managerial$employees,$field$personnel,$members$of$the$family$of$the$employer$who$are$
dependent$on$him$for$support,$domestic$helpers,$persons$in$the$personal$service$of$another,$
and$workers$who$are$paid$by$results$as$determined$by$the$Secretary$of$Labor$in$appropriate$
regulations.$
$
As$used$herein,$managerial$employees$refer$to$those$whose$primary$duty$consists$of$the$
management$of$the$establishment$in$which$they$are$employed$or$of$a$department$or$
subdivision$thereof,$and$to$other$officers$or$members$of$the$managerial$staff.$
$
Field$personnel$shall$refer$to$non[agricultural$employees$who$regularly$perform$their$duties$
away$from$the$principal$place$of$business$or$branch$office$of$the$employer$and$whose$actual$
hours$of$work$in$the$field$cannot$be$determined$with$reasonable$certainty.$

$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&2.&Exemption.$$The$provisions$of$this$Rule$shall$not$apply$to$the$following$persons$if$
they$qualify$for$exemption$under$the$conditions$set$forth$herein:$
(b) Managerial$employees,$if$they$meet$all$of$the$following$conditions:$
(1) Their$primary$duty$consists$of$the$management$of$the$establishment$in$which$they$
are$employed$or$of$a$department$or$sub[division$thereof.$
(2) They$customarily$and$regularly$direct$the$work$of$two$or$more$employees$therein.$
(3) They$have$the$authority$to$hire$or$fire$employees$of$lower$rank;$or$their$suggestions$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$57$of$80$

and$recommendations$as$to$hiring$and$firing$and$as$to$the$promotion$or$any$other$
change$of$status$of$other$employees,$are$given$particular$weight.$
(c) Officers$or$members$of$a$managerial$staff$if$they$perform$the$following$duties$and$
responsibilities:$
(1) The$primary$duty$consists$of$the$performance$of$work$directly$related$to$
management$policies$of$their$employer;$
(2) Customarily$and$regularly$exercise$discretion$and$independent$judgment;$and$
(3) (i)$Regularly$and$directly$assist$a$proprietor$or$a$managerial$employee$whose$primary$
duty$consists$of$the$management$of$the$establishment$in$which$he$is$employed$or$
subdivision$thereof;$or$(ii)$execute$under$general$supervision$work$along$specialized$
or$technical$lines$requiring$special$training,$experience,$or$knowledge;$or$(iii)$execute,$
under$general$supervision,$special$assignments$and$tasks;$and$
(4) Who$do$not$devote$more$than$20$percent$of$their$hours$worked$in$a$work$week$to$
activities$which$are$not$directly$and$closely$related$to$the$performance$of$the$work$
described$in$paragraphs$(1),$(2)$and$(3)$above.$
$
Asia&Pacific&Chartering,&Inc.&v.&Farolan$(393$SCRA$454,$2004)$
Linda$Farolan$was$hired$by$petitioner$as$Sales$Manager$for$the$Scandinavian$Airlines$System.$
Following$a$decline$in$sales,$Zorobado$was$tasked$to$investigate$the$situation$and$ended$up$
assuming$some$of$Farolans$responsibilities.$Working$together,$the$revenues$improved.$
However,$Farolan$received$a$letter$of$termination$on$the$ground$of$loss$of$confidence.$She$
filed$a$complaint$for$illegal$dismissal.$The$Court$held$that$she$was$illegally$dismissed$as$due$
process$was$not$observed.$It$also$clarified$the$distinction$between$managerial$and$rank$and$file$
employees$for$the$purpose$of$dismissal$due$to$loss$of$trust$and$breach$of$confidence.$For$the$
former,$there$must$be$proof$of$involvement,$while$for$managerial$employees,$mere$existence$
of$basis$for$a$belief$is$sufficient.$Further,$the$mere$fact$that$one$is$labeled$a$manager$does$not$
ipso(facto$make$him$one.$In$the$case$of$Farolan,$she$was$a$manager,$but$the$breach$of$
confidence$was$not$duly$proven$because$there$was$no$evidence$of$willful$breach$on$her$part.$
Neither$was$she$inefficient.$$
$
Pearanda&v.&Baganga&Plywood&Corporation$(489$SCRA$94,$2006)$
Pearanda$claims$he$was$illegally$dismissed$by$BPC.$The$latter$counters$that$when$BPC$closed$
for$repairs,$petitioner$opted$to$sever$the$employment$relationship$and$collect$his$separation$
pay.$Pearanda$likewise$claims$OT$pay.$The$Court$held$that$he$is$not$entitled$to$OT$pay$because$
he$is$part$of$the$managerial$staff.$Being$a$foreman,$he$exercised$supervision$over$the$
operations$and$maintenance$of$BPCs$steam$plant$boiler.$Furthermore,$he$was$part$of$the$10%$
of$354$employees$who$were$paid$on$a$monthly$basis.$
$
3)

Field$Personnel$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&2.&Exemption.$$The$provisions$of$this$Rule$shall$not$apply$to$the$following$persons$if$
they$qualify$for$exemption$under$the$conditions$set$forth$herein:$
(f) Non[agricultural$field$personnel$if$they$regularly$perform$their$duties$away$from$the$
principal$or$branch$office$or$place$of$business$of$the$employer$and$whose$actual$hours$of$
work$in$the$field$cannot$be$determined$with$reasonable$certainty.$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&V&
&
Section&1.(Coverage.$$This$rule$shall$apply$to$all$employees$except:$
(d) Field$personnel$and$other$employees$whose$performance$is$unsupervised$by$the$
employer$including$those$who$are$engaged$on$task$or$contract$basis,$purely$commission$
basis,$or$those$who$are$paid$a$fixed$amount$for$performing$work$irrespective$of$the$time$
consumed$in$the$performance$thereof;$
$
$
$
Merdicar&Fishing&Corporation&v.&NLRC$(297$SCRA$440,$1998)$
Fishermen$are$not$field$employees$merely$because$they$perform$their$work$away$from$the$
principal$place$of$business.$The$provision$of$the$labor$code$must$be$read$with$its$IRRs.$The$

Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$58$of$80$

phrase$employees$whose$performance$is$unsupervised$by$the$employer$amplifies$field$
personnel.$It$is$not$a$separate$classification.$In$this$case,$it$is$readily$apparent$that$Agaos$
work$was$constantly$supervised$by$the$employer$because$he$had$no$choice$to$stay$on$
petitioners$vessel,$subjecting$him$to$the$supervision$and$control$of$the$vessels$master.$He$is$
therefore$entitled$to$13th$month$pay$and$service$incentive$leave$pay.$
$
Auto&Bus&Transport&Systems,&Inc.&v.&Bautista$(458$SCRA$578,$2005)$
Similar$to$Mercidar,$bus$drivers$are$not$field$personnel$just$because$they$perform$their$tasks$
away$from$the$principal$place$of$business.$The$phrase$purely$commission$basis$again$
amplifies$field$personnel.$Bautista$is$not$a$field$employee$pursuant$to$Mercidar$because$he$is$
constantly$being$supervised$by$petitioner.$He$is$required$to$be$in$specific$places$at$specific$
times.$He$is$subject$to$hop[on$inspections$and$car$barn$days.$As$regards$prescription,$the$Court$
held$that$Bautistas$claim$has$not$yet$prescribed.$His$cause$of$action$began$to$accrue$from$the$
moment$Auto$Bus$refused$to$remunerate$the$monetary$equivalent$of$his$service$leave$credits.$
Since$the$money$claim$was$filed$one$month$after$his$dismissal,$it$is$still$within$the$prescriptive$
period$of$3$years.$
$
Far&East&Agricultrual&Supply,&Inc.&v.&Lebatique$(515$SCRA$491,$2007)$
Lebatique,$a$truck$driver,$cannot$be$considered$field$personnel.$He$is$a$regular$employee$
whose$performance$is$supervised$by$the$employer.$He$was$tasked$to$deliver$items$at$specific$
times$to$specific$places.$He$had$no$discretion$to$solicit,$select,$and$contract$prospective$clients.$
The$performance$of$his$tasks$was$dependent$on$petitioners$production$of$agricultural$feeds.$
Lebatique$is$entitled$to$OT$pay$for$the$second$delivery$he$was$tasked$to$make.$
$
$

4)

Dependent$Family$Members$

5)

Domestic$Workers;$Exemption$on$Assignment$

$
Article&145.&Assignment(to(nonNhousehold(work.$$No$househelper$shall$be$assigned$to$work$in$
a$commercial,$industrial$or$agricultural$enterprise$at$a$wage$or$salary$rate$lower$than$that$
provided$for$agricultural$or$non[$agricultural$workers$as$prescribed$herein.$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&2.&Exemption.$$The$provisions$of$this$Rule$shall$not$apply$to$the$following$persons$if$
they$qualify$for$exemption$under$the$conditions$set$forth$herein:$
(d) Domestic$servants$and$persons$in$the$personal$service$of$another$if$they$perform$such$
services$in$the$employers$home$which$are$usually$necessary$or$desirable$for$the$
maintenance$and$enjoyment$thereof,$or$minister$to$the$personal$comfort,$convenience,$or$
safety$of$the$employer$as$well$as$the$members$of$his$employers$household.$
$
RA&10361,&DOMESTIC&WORKERS&ACT$
$
Section&22.&Assignment(to(Nonhousehold(Work.($No$domestic$worker$shall$be$assigned$to$
work$in$a$commercial,$industrial$or$agricultural$enterprise$at$a$wage$rate$lower$than$that$
provided$for$agricultural$or$nonagricultural$workers.$In$such$cases,$the$domestic$worker$shall$
be$paid$the$applicable$minimum$wage.$
$
RULES&IMPLEMENTING&RA&10361&
RULE&V&&RIGHTS&AND&OBLIGATIONS&OF&THE&EMPLOYER&
&
Section&10.&Assignment(to(NonNhousehold(Work.$$The$employer$shall$not,$at$any$point$of$the$
duration$of$employment,$assign$the$Kasambahay$to$work$whether$in$full$or$part[time$in$a$
commercial,$industrial$or$agricultural$enterprise.$
$
When$assigned$to$work$in$a$commercial,$industrial$or$agricultural$enterprise,$the$Kasambahay$
must$be$paid$the$applicable$minimum$wage$and$benefits$for$workers$in$such$enterprise.$
$
Section&11.&Extent(of(Duty(Outside(the(Household.$$The$Kasambahay$and$the$employer$may$
mutually$agree$for$the$Kasambahay$to$temporarily$perform$a$task$for$the$benefit$of$another$
household$under$the$following$conditions:$
(a) There$is$an$agreement$between$the$Kasambahay$and$the$employer$for$the$purpose,$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$59$of$80$

particularly$on$the$task/s$to$be$performed;$
(b) The$Kasambahay$is$entitled$to$additional$payment$of$not$less$than$the$applicable$
minimum$wage$rate;$
(c) The$original$employer$shall$be$responsible$for$any$liability$incurred$by$the$Kasambahay$on$
account$of$such$arrangement;$and$
(d) The$original$employer$is$not$charging$any$amount$from$the$other$household$for$the$
arrangement.$
$
The$other$household$where$the$Kasambahay$is$temporarily$assigned$is$solidarily$liable$with$the$
original$employer$for$any$nonpayment$of$wages$during$such$temporary$assignment.$
$
The$temporary$performance$referred$herein$shall$not$exceed$thirty$(30)$days$per$assignment.$
$
It$shall$be$unlawful$for$the$original$employer$to$charge$any$amount$from$the$said$household$
where$the$service$of$the$Kasambahay$was$temporarily$performed.$
$
6)

Persons$in$the$Personal$Service$of$Another$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&2.&Exemption.$$The$provisions$of$this$Rule$shall$not$apply$to$the$following$persons$if$
they$qualify$for$exemption$under$the$conditions$set$forth$herein:$
(d) Domestic$servants$and$persons$in$the$personal$service$of$another$if$they$perform$such$
services$in$the$employers$home$which$are$usually$necessary$or$desirable$for$the$
maintenance$and$enjoyment$thereof,$or$minister$to$the$personal$comfort,$convenience,$or$
safety$of$the$employer$as$well$as$the$members$of$his$employers$household.$

7)

Piece$Workers$
$

OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&2.&Exemption.$$The$provisions$of$this$Rule$shall$not$apply$to$the$following$persons$if$
they$qualify$for$exemption$under$the$conditions$set$forth$herein:$
(e) Workers$who$are$paid$by$results,$including$those$who$are$paid$on$piece[work,$takay,$
pakiao$or$task$basis,$and$other$non[time$work$if$their$output$rates$are$in$accordance$
with$the$standards$prescribed$under$Section$8,$Rule$VII,$Book$Three$of$these$regulations,$
or$where$such$rates$have$been$fixed$by$the$Secretary$of$Labor$and$Employment$in$
accordance$with$the$aforesaid$Section.$
$
Labor&Congress&of&the&Philippines&v.&NLRC$(290$SCRA$509,$1998)$
Following$LCPs$petition$for$payment$of$money$claims$and$violation$of$labor$standards,$among$
others,$it$entered$into$a$compromise$agreement$with$Empire$Food$Products.$However,$a$
second$complaint$was$filed$for$violation$of$this$compromise$agreement.$LA$declared$
petitioners$illegally$dismissed$an$ordered$their$reinstatement.$The$decision$was$later$reversed$
on$the$ground$that$the$workers$abandoned$their$jobs.$The$Court$held$that$they$did$not,$
because$the$mere$testimony$of$a$security$guard$is$not$sufficient$to$substantiate$the$allegation$
of$abandonment.$The$Court$further$ruled$that$despite$being$piece[rate$workers,$petitioners$are$
entitled$to$13th$month$pay,$holiday$pay,$and$service$incentive$leave$pay$because$the$status$and$
nature$of$their$employment$was$that$of$regular$employees.$First,$their$job$of$repacking$food$
was$necessary$and$desirable$to$the$employer.$Second,$they$worked$throughout$the$year,$as$
opposed$to$being$employed$only$for$a$specific$project$or$season.$Third,$the$Court$considered$
the$length$of$time$the$employees$worked$for$Empire.$

$
c.

Ish$Guidote$

Normal$Hours$of$Work$
$
Article&83.&Normal(hours(of(work.$$The$normal$hours$of$work$of$any$employee$shall$not$exceed$eight$
(8)$hours$a$day.$
$
Health$personnel$in$cities$and$municipalities$with$a$population$of$at$least$one$million$(1,000,000)$or$in$
hospitals$and$clinics$with$a$bed$capacity$of$at$least$one$hundred$(100)$shall$hold$regular$office$hours$for$
eight$(8)$hours$a$day,$for$five$(5)$days$a$week,$exclusive$of$time$for$meals,$except$where$the$exigencies$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$60$of$80$

d.

of$the$service$require$that$such$personnel$work$for$six$(6)$days$or$forty[eight$(48)$hours,$in$which$case,$
they$shall$be$entitled$to$an$additional$compensation$of$at$least$thirty$percent$(30%)$of$their$regular$wage$
for$work$on$the$sixth$day.$$
$
For$purposes$of$this$Article,$health$personnel$shall$include$resident$physicians,$nurses,$nutritionists,$
dietitians,$pharmacists,$social$workers,$laboratory$technicians,$paramedical$technicians,$psychologists,$
midwives,$attendants$and$all$other$hospital$or$clinic$personnel.$
$
PURPOSE&OF&THE&EIGHTTHOUR&LABOR&LAW$

Safeguard$the$health$and$welfare$of$laborers;$

Minimize$unemployment$(by$working$in$shifts).$
$
PARTTTIME&WORK&ALLOWED$

The$law$only$prescribes$a$maximum.$$

Work$for$less$than$8$hours$a$day$is$not$prohibited$by$law.$

Wages$and$benefits$of$a$part[time$worker$must$be$in$proportion$to$the$number$of$hours$worked.$
$
HOURS&OF&WORK&OF&HEALTH&PERSONNEL$

24[hour$shifts$for$resident$physicians$"$violative$of$the$provision.$

However,$48[hour$work$week$is$not$applicable$when$there$is$a$training$agreement$between$the$
resident$physician$and$the$hospital$because$there$is$no$employer[employee$relationship.$

RA$5901$has$been$superseded$by$Art.$83,$LC.$

RA$7305$governs$the$working$conditions$of$health$personnel$in$government$service.$
$
Compensable$Hours$of$Work$$In$General$
$
1)
On$Duty$
$
Article&84.&Hours(worked.$$Hours$worked$shall$include$(a)$all$time$during$which$an$employee$
is$required$to$be$on$duty$or$to$be$at$a$prescribed$workplace;$$
x$x$x$
$
PRELIMINARY&ACTIVITIES$

Preliminary$and$post[liminary$activities$are$deemed$performed$during$working$hours$if:$
o They$are$controlled/required$by$the$employer;$or$
o They$are$pursued$necessarily$or$primarily$for$the$employers$benefit.$
$
WORK&HOURS&OF&SEAMEN$

An$employee$ceases$to$work$when$he$is$able$to$rest$completely$and$leave$or$may$leave$
at$his$will$the$spot$where$he$actually$stays$while$working$"$non[compensable.$

Entitled$to$OT$pay$only$for$work$in$actual$service$beyond$8$hours.$
$
EVIDENCE&AND&DOUBT$

If$the$employer$alleges$that$the$employee$works$less$than$the$normal$hours,$he$bears$the$
burden$of$proving$his$allegation$with$clear$and$satisfactory$evidence.$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&3.&Hours(worked.$$The$following$shall$be$considered$as$compensable$hours$worked:$
(a) All$time$during$which$an$employee$is$required$to$be$on$duty$or$to$be$at$the$employers$
premises$or$to$be$at$a$prescribed$work$place;$and$

$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
&
Section&4.&Principles(in(determining(hours(worked.$$The$following$general$principles$shall$
govern$in$determining$whether$the$time$spent$by$an$employee$is$considered$hours$worked$for$
purposes$of$this$Rule:$
(a) All$hours$are$hours$worked$which$the$employee$is$required$to$give$his$employer,$
regardless$of$whether$or$not$such$hours$are$spent$in$productive$labor$or$involve$physical$
or$mental$exertion.$
Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$61$of$80$

2)

At$Work$
$
Article&84.&Hours(worked.$$Hours$worked$shall$include$x$x$x$and$(b)$all$time$during$which$an$
employee$is$suffered$or$permitted$to$work.$
x$x$x$
&
WORKING&WHILE&EATING$

Meal$time$not$compensable$if$employee$is$completely$relieved$from$duties.$

If$he$is$not,$it$is$considered$overtime$work.$
WORKING&WHILE&SLEEPING$

Considered$working$time$if$
o Subject$to$serious$interruption$or;$
o Takes$place$under$circumstances$substantially$less$desirable$than$would$be$likely$to$
exist$at$the$employees$home.$

Not$regarded$as$working$time$if$there$is$an$opportunity$for$comparatively$uninterrupted$
sleep.$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&3.&Hours(worked.$$The$following$shall$be$considered$as$compensable$hours$worked:$
(b) All$time$during$which$an$employee$is$suffered$or$permitted$to$work.$

$
e.

Specific$Rules$

$
1)

Rest$Period$
$
a)
Short$Duration$or$Coffee$Break$
$
Article&84.&Hours(worked.$$x$x$x$
Rest$periods$of$short$duration$during$working$hours$shall$be$counted$as$hours$worked.$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
$
Section&7.(Meal(and(rest(periods.$$x$x$x$
Rest$periods$or$coffee$breaks$running$from$five$(5)$to$twenty$(20)$minutes$shall$be$
considered$as$compensable$working$time.$

$
b)

More$than$20$minutes$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&I&
&
Section&4.&Principles(in(determining(hours(worked.$$The$following$general$principles$
shall$govern$in$determining$whether$the$time$spent$by$an$employee$is$considered$hours$
worked$for$purposes$of$this$Rule:$
(b) An$employee$need$not$leave$the$premises$of$the$work$place$in$order$that$his$rest$
period$shall$not$be$counted,$it$being$enough$that$he$stops$working,$may$rest$
completely$and$may$leave$his$work$place,$to$go$elsewhere,$whether$within$or$
outside$the$premises$of$his$work$place.$

$
2)

Ish$Guidote$

Meal$Period$
$
a)
Regular$Meal$Period$(one$hour)$
$
Article&85.&Meal(periods.$$Subject$to$such$regulations$as$the$Secretary$of$Labor$may$
prescribe,$it$shall$be$the$duty$of$every$employer$to$give$his$employees$not$less$than$
sixty$(60)$minutes$time[off$for$their$regular$meals.$
$
GENERAL&RULE&

Meal$periods$are$not$compensable.$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$62$of$80$

Exceptions:$
o When$such$period$is$predominantly$spent$for$the$employers$benefit;$and$
o When$it$is$less$than$60$minutes.$

b)

3)

Ish$Guidote$

CONTINUOUS&SHIFTS$

For$purposes$of$overtime$compensation,$meal$time$is$considered$time$worked$
when$the$employee$works$continuous$shifts.$
$
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Section&7.(Meal(and(rest(periods.$$Every$employer$shall$give$his$employees,$regardless$
of$sex,$not$less$than$one$(1)$hour$time[off$for$regular$meals,$except$in$the$following$
cases$when$a$meal$period$of$not$less$than$twenty$(20)$minutes$may$be$given$by$the$
employer$provided$that$such$shorter$meal$period$is$credited$as$compensable$hours$
worked$of$the$employee:$x$x$x$
$
Philippine&Airlines,&Inc.&v.&NLRC$(302$SCRA$582,$1999)$
Herminio$Fabros$worked$as$a$flight$surgeon$for$PAL$with$a$4pm[12mn$shift.$At$7pm$he$
went$home$(about$5$minutes$away)$to$have$dinner.$An$employee$had$a$heart$attack,$so$
he$was$contacted$and$he$immediately$returned$to$the$office.$The$nurse[on[duty$had$
already$taken$the$employee$to$the$hospital,$where$he$died$after$a$few$days.$PAL$
suspended$Fabros$for$abandoning$his$post.$The$Court$held$that$the$suspension$was$
illegal$because$Fabros$is$entitled$to$a$60[min.$meal$period.$The$law$does$not$state$that$
employees$must$take$their$meals$within$work$premises.$
$
Shorter$Meal$Period$(less$than$one$hour,$but$not$less$than$20$minutes)$
$
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Section&7.(Meal(and(rest(periods.$$Every$employer$shall$give$his$employees,$regardless$
of$sex,$not$less$than$one$(1)$hour$time[off$for$regular$meals,$except$in$the$following$
cases$when$a$meal$period$of$not$less$than$twenty$(20)$minutes$may$be$given$by$the$
employer$provided$that$such$shorter$meal$period$is$credited$as$compensable$hours$
worked$of$the$employee:$
(b) Where$the$work$is$non[manual$work$in$nature$or$does$not$involve$strenuous$
physical$exertion;$$
(c) Where$the$establishment$regularly$operates$not$less$than$sixteen$(16)$hours$a$day;$
(d) In$case$of$actual$or$impending$emergencies$or$there$is$urgent$work$to$be$
performed$on$machineries,$equipment$or$installations$to$avoid$serious$loss$which$
the$employer$would$otherwise$suffer;$and$
(e) Where$the$work$is$necessary$to$prevent$serious$loss$of$perishable$goods.$

SHORTENED&MEAL&BREAK&UPON&EMPLOYEES&REQUEST$
1. Voluntary$agreement$to$shorten$meal$period$and$waive$OT$compensation;$
2. No$diminution$in$salary$and$fringe$benefits;$
3. No$strenuous$physical$exertion,$with$coffee$breaks;$
4. Value$or$benefits$derived$are$equal$to$or$commensurate$with$the$compensation$
due$for$the$shortened$meal$period$as$well$as$overtime$pay$for$30$minutes;$
5. Employees$entitled$to$OT$pay$for$working$beyond$4:30pm;$and$
6. Effectivity$is$of$temporary$duration.$
$
CHANGING&LUNCH&BREAK&FROM&PAID&TO&UNPAID$

Court$upheld$the$right$of$employer$to$change$the$30[min.$break$with$pay$to$a$1[hr.$
break$without$pay.$

The$right$to$fix$work$schedules$rests$principally$on$the$employer.$

The$1[hr.$break$complies$with$Art.$85.$

The$same$does$not$violate$EP$because$it$applies$to$all$the$workers$in$the$factory.$
$
Waiting$Time$
$
$
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Section&5.&Waiting(time.$$(a)$Waiting$time$spent$by$an$employee$shall$be$considered$as$
working$time$if$waiting$is$an$integral$part$of$his$work$or$the$employee$is$required$or$engaged$
by$the$employer$to$wait.$
$

4)

Arica&v.&NLRC$(170$SCRA$776,$1989)$
Petitioners$filed$a$complaint$against$STANFILCO$for$assembly$time,$moral$damages,$and$
attorneys$fees.$They$claim$that$they$should$be$compensated$for$the$time$spent$in$preliminary$
activities$(roll$call,$individual$assignments,$accomplishment$report,$etc.).$The$Court$dismissed$
the$complaint$on$the$ground$of$res(judicata$(Associated(Labor(Union(v.(STANFILCO).$It$was$held$
that$the$30[min.$waiting$time$was$institutionalized$by$the$mutual$consent$of$the$parties$under$
the$CBA.$It$is$a$deeply[rooted,$routinary$practice$that$does$not$deprive$workers$of$time$to$
attend$to$personal$pursuits.$Justice$Sarmiento$dissented$on$the$ground$that$the$factual$
circumstances$have$changed$since$the$ALU$decision.$The$old$case$spoke$of$assembly$time,$
and$there$was$no$badge$of$obligatoriness.$
$
On$Call$
$
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Section&5.(Waiting(time.$$x$x$x$(b)$An$employee$who$is$required$to$remain$on$call$in$the$
employers$premises$or$so$close$thereto$that$he$cannot$use$the$time$effectively$and$gainfully$
for$his$own$purpose$shall$be$considered$as$working$while$on$call.$An$employee$who$is$not$
required$to$leave$word$at$his$home$or$with$company$officials$where$he$may$be$reached$is$not$
working$while$on$call.$

When$work$is$not$continuous,$the$time$when$a$laborer$can$leave$work$and$completely$rest$
is$non[compensable.$
But,$if$he$is$required$by$the$employer$to$be$at$work$before$or$after$working$hours,$such$
time$should$not$be$discounted$from$his$compensable$working$hours.$

$
ON&CALL&WITH&CELLULAR&PHONE&OR&OTHER&CONTACT&DEVICE$
Not$considered$compensable,$according$to$a$US$ruling.$
$
5)

Inactive$due$to$Work$Interruptions$
$
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Section&4.&Principles(in(determining(hours(worked.$$The$following$general$principles$shall$
govern$in$determining$whether$the$time$spent$by$an$employee$is$considered$hours$worked$for$
purposes$of$this$Rule:$
(d) The$time$during$which$an$employee$is$inactive$by$reason$of$interruptions$in$his$work$
beyond$his$control$shall$be$considered$working$time$either$if$the$imminence$of$the$
resumption$of$work$requires$the$employees$presence$at$the$place$of$work$or$if$the$
interval$is$too$brief$to$be$utilized$effectively$and$gainfully$in$the$employees$own$interest.$
$
University&of&Pangasinan&Faculty&Union&v.&University&of&Pangasinan$(127$SCRA$691,$1984)$
Faculty$members$are$entitled$to$their$ECOLA$during$semestral$break,$since$they$receive$their$
regular$salary$during$the$same$period.$PDs$1614,$1634,$1678$and$1713$mandate$the$release$of$
FULL$ECOLA$regardless$of$the$days$worked$if$the$employee$has$not$incurred$any$absences.$The$
teachers$are$forced$to$go$on$mandatory$leave$during$sembreak,$which$is$considered$a$work$
interruption$beyond$their$control.$Since$the$law$entitles$them$to$their$regular$wages,$they$are$
likewise$entitled$to$ECOLA.$

6)

Work$after$Normal$Hours$
$
$
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Section&4.&Principles(in(determining(hours(worked.$$The$following$general$principles$shall$
govern$in$determining$whether$the$time$spent$by$an$employee$is$considered$hours$worked$for$
purposes$of$this$Rule:$
(c) If$the$work$performed$was$necessary,$or$it$benefited$the$employer,$or$the$employee$could$
not$abandon$his$work$at$the$end$of$his$normal$working$hours$because$he$had$no$
replacement,$all$time$spent$for$such$work$shall$be$considered$as$hours$worked,$if$the$
work$was$with$the$knowledge$of$his$employer$or$immediate$supervisor.$
$

7)

Lectures,$Meetings,$Training$Programs$
$
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Section&6.(Lectures,(meetings,(training(programs.$$Attendance$at$lectures,$meetings,$training$
programs,$and$other$similar$activities$shall$not$be$counted$as$working$time$if$all$of$the$
following$conditions$are$met:$
(a) Attendance$is$outside$of$the$employees$regular$working$hours;$
(b) Attendance$is$in$fact$voluntary;$and$
(c) The$employee$does$not$perform$any$productive$work$during$such$attendance.$

8)

Travel$Time$
$
GENERAL&RULE$
Not$considered$part$of$working$hours.$
$
SOME&CONSIDERATIONS$

Is$the$employee$free$to$choose$his$own$conveyance?$

Is$he$subject$to$the$employers$supervision$or$control?$

Does$the$travel$take$place$under$vexing$or$dangerous$conditions?$
$
DOLE&MANUAL$
1. Traveling$from$home$to$work$

Normal$incident$of$employment.$

If$it$is$an$emergency$call,$considered$work$time.$
2. Travel$that$is$all$in$the$days$work$

Includes$traveling$from$jobsite$to$jobsite$and$going$to$and$from$meeting$places.$

Generally$considered$part$of$working$hours.$
3. Traveling$away$from$home$

Travel$that$keeps$an$employee$away$from$home$overnight.$

Considered$worktime$when$it$cuts$across$the$employees$workday.$
$
Rada&v.&NLRC$(205$SCRA$69,$1992)$
In$this$case,$the$Court$held$that$the$time$Rada$spent$picking$up$and$dropping$off$employees$
along$EDSA$on$the$way$to$and$from$work$is$compensable,$it$being$beneficial$to$the$employer.$
It$found$that$this$practice$is$indispensable$and$mandatory,$because$Philnor$even$looks$for$
substitutes$when$Rada$is$unavailable.$It$is$not$a$mere$incident$to$his$employment.$

$
f.

Ish$Guidote$

Overtime$Work$Pay$
$
1)
Overtime$in$Ordinary$Working$Day$
$
Article&87.&Overtime(work.$$Work$may$be$performed$beyond$eight$(8)$hours$a$day$provided$
that$the$employee$is$paid$for$the$overtime$work,$an$additional$compensation$equivalent$to$his$
regular$wage$plus$at$least$twenty[five$percent$(25%)$thereof.$Work$performed$beyond$eight$
hours$on$a$holiday$or$rest$day$shall$be$paid$an$additional$compensation$equivalent$to$the$rate$
of$the$first$eight$hours$on$a$holiday$or$rest$day$plus$at$least$thirty$percent$(30%)$thereof.$
$
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Section&8.&Overtime(pay.$$Any$employee$covered$by$this$Rule$who$is$permitted$or$required$to$
work$beyond$eight$(8)$hours$on$ordinary$working$days$shall$be$paid$an$additional$
compensation$for$the$overtime$work$in$the$amount$equivalent$to$his$regular$wage$plus$at$least$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$65$of$80$

twenty[five$percent$(25%)$thereof.$
$

DEFINITION$

Overtime$pay$$additional$pay$for$service$or$work$rendered$or$performed$in$excess$of$8$
hours$a$day$by$employees$or$laborers$in$employment$covered$by$the$8[hour$Labor$Law$
and$not$exempt$from$its$requirements.$
$
RATIONALE$

More$effort$required;$

Workers$are$delayed$in$going$home;$

They$have$no$more$time$for$relaxation,$amusement,$sports;$

They$might$miss$pre[arranged$engagements;$

The$work$is$actually$additional$service$and$might$have$adverse$effects.$
$
NIGHT&SHIFT&DIFFERENTIAL&VS.&OVERTIME&PAY$

They$are$not$mutually$exclusive.$

Night$shift$differential$$payment$for$work$done$at$night;$

Overtime$pay$$payment$for$services$rendered$in$excess$of$8$hours.$
OVERTIME&RATE&BASED&ON&REGULAR&WAGE$

Regular$base$pay$excludes$Christmas$bonuses$and$other$fringe$benefits.$
$
PREMIUM&PAY:&WHEN&INCLUDED&OR&EXCLUDED&IN&COMPUTATION&OF&OT&PAY$

Generally,$premium$pay$for$work$done$on$rest$days,$special$days,$or$regular$holidays$is$
included$in$the$computation$of$OT$pay.$

Parties$are$free$to$stipulate$a$higher$rate$
$

OT&PAY/HR.&=&[1.3&(HOURLY&RATE)]&+&0.3&[1.3&(HOURLY&RATE)]&
$
STIPULATION&IN&CBA&ALLOWED$

Courts$cannot$impose$rates$higher$than$what$the$law$requires,$but$the$parties$are$free$to$
do$so.$
$
CONVERSION&OF&MONTHLY&TO&DAILY&RATE;&ACTUAL&WORK&DAYS&AS&DIVISOR$
$

MONTHLY(RATE((12
!="DAILY"RATE&
NO.$OF$DAYS$WORKED
&
DAILY&RATE
!="HOURLY"RATE&
8
$

In$PALEA(v.(PAL,$PAL$wanted$365$as$the$divisor.$This$does$not$make$sense$as$the$
employees$do$not$work$for$365$days$in$a$year.$
Use$of$a$big$divisor$might$show$non[compliance$with$the$minimum$wage$law.$
The$use$of$365$as$a$divisor$is$permissible$where$the$daily$rate$would$still$exceed$minimum$
wage.$This$would$mean$that$unworked$days$are$still$paid$by$the$employer.$

$
HOW&WORK&DAY&IS&COUNTED$

24[hour$period$commences$from$the$time$the$employee$regularly$starts$to$work.$

Any$work$in$excess$of$8$hours$within$the$24[hour$period$is$considered$as$overtime$work.$

Broken$hours$of$work$"$the$work$need$not$be$continuous.$

Different$shifts$"$still$considered$OT$work$if$performed$within$the$24[hour$period.$
$
FACTUAL&AND&LEGAL&BASES&OF&CLAIM$

Express$instruction$from$employer$not$required.$

It$is$sufficient$that$employee$is$permitted$or$suffered$to$work.$
&
&
&
Ish$Guidote$

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OVERTIME&WORK&OF&SEAMEN$

The$consideration$is$not$whether$or$not$they$remained$on$board,$but$whether$or$not$they$
actually$rendered$service$in$excess$of$8$hours.$
$
ACTION&TO&RECOVER&COMPENSATION$

Estoppel$and$laches$do$not$apply$because$such$principles$are$contrary$to$the$spirit$of$the$
Eight[Hour$Labor$Law.$
o The$law$obligates$the$employer$to$observe$it.$
o Oftentimes,$the$employee$is$in$a$disadvantageous$position.$It$is$therefore$
understandable$that$he$would$be$reluctant$or$apprehensive$to$bring$his$claim.$
o Since$the$right$to$OT$pay$cannot$be$expressly$renounced,$more$so$can$it$not$be$done$
through$mere$silence.$

Retroacts$to$the$day$the$services$were$rendered.$
$
NO&WAIVER&OR&QUITCLAIM&OF&OVERTIME&PAY$

Generally,$the$right$to$OT$pay$cannot$be$waived.$

Any$stipulation$to$the$contrary$is$void.$

Why$quitclaims$are$invalid:$
o Abuse$of$moral$ascendency$by$the$employer;$
o Exemption$clause$is$contrary$to$public$policy.$

The$SC$upheld$a$waiver$because$it$was$in$consideration$of$certain$valuable$privileges.$

2)
Ish$Guidote$

OVERTIME&PAY&INTEGRATED&IN&BASIC&SALARY$

Composite,$Package,$All[inclusive$pay$is$not$necessarily$illegal.$

Not$unusual$in$the$case$of$managers/executives$because$in$the$fist$place,$they$are$not$
entitled$to$OT$pay$(Art.$82).$

Requisites$for$validity:$
o Clearly$written$agreement$knowingly$and$freely$entered$into$by$the$employee;$
o Mathematical$result$shows$that$the$agreed$legal$wage$rate$and$OT$pay,$computed$
separately,$are$equal$to$or$higher$than$the$amounts$legally$due.$

The$SC$has$validated$a$contract$of$this$kind$concerning$a$managerial$employee$because$it$
had$the$imprimatur$of$the$government.$
$
COMPRESSED&WORK&WEEK;&DOLE&ADVISORY&NO.&02T04$

No.$of$hours$of$work$in$a$day$exceeds$8,$but$the$number$of$workdays$in$a$week$is$
reduced.$

Conditions:$
o Expressly$and$voluntarily$supported$by$majority$of$the$employees$affected;$
o Certification$that$work$beyond$8$hours$is$within$the$limit$or$levels$of$exposure$set$by$
DOLEs$Occupational$Health$and$Safety$Standards;$
o DOLE$Regional$Office$must$be$duly$notified.$

Effects:$
o Work$exceeding$12$hours$a$day$or$48$hours$a$week$is$compensable$as$OT$work;$
o Workers$are$entitled$to$meal$periods$of$not$less$than$60$min.,$holiday$pay,$rest$day,$
and$leaves;$
o There$must$be$no$diminution$of$existing$benefits.$

Validity$of$OT$waiver$has$been$upheld$by$the$SC.$
$
FLEXIBLE&WORK&ARRANGEMENTS$

Flexible$work$arrangements$$arrangements$or$schedules$other$than$the$traditional$or$
standard$working$hours,$workday,$or$workweek.$

Considered$a$better$alternative$to$termination$of$the$services$of$the$employees$or$closure$
of$the$establishment.$

Includes:$
o Reduction$of$workdays;$
o Rotation$of$workers;$
o Forced$leave;$
o Broken[time$schedule;$
o Flexi[holiday$schedule.$

The$DOLE$Regional$Office$must$be$duly$notified.$
$
Emergency$or$Compulsory$Overtime$Work$
$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$67$of$80$

Article&89.&Emergency(overtime(work.$$Any$employee$may$be$required$by$the$employer$to$
perform$overtime$work$in$any$of$the$following$cases:$
a. When$the$country$is$at$war$or$when$any$other$national$or$local$emergency$has$been$
declared$by$the$National$Assembly$or$the$Chief$Executive;$
b. When$it$is$necessary$to$prevent$loss$of$life$or$property$or$in$case$of$imminent$danger$to$
public$safety$due$to$an$actual$or$impending$emergency$in$the$locality$caused$by$serious$
accidents,$fire,$flood,$typhoon,$earthquake,$epidemic,$or$other$disaster$or$calamity;$
c. When$there$is$urgent$work$to$be$performed$on$machines,$installations,$or$equipment,$in$
order$to$avoid$serious$loss$or$damage$to$the$employer$or$some$other$cause$of$similar$
nature;$
d. When$the$work$is$necessary$to$prevent$loss$or$damage$to$perishable$goods;$and$
b. Where$the$completion$or$continuation$of$the$work$started$before$the$eighth$hour$is$
necessary$to$prevent$serious$obstruction$or$prejudice$to$the$business$or$operations$of$the$
employer.$
$
Any$employee$required$to$render$overtime$work$under$this$Article$shall$be$paid$the$additional$
compensation$required$in$this$Chapter.$
$

These$are$the$only$situations$wherein$an$employer$may$legally$compel$its$employees$to$
render$overtime$work.$

The$IRR$adds$this$situation:$To$avail$of$favorable$weather$or$environmental$conditions$
where$the$performance$or$quality$of$work$is$dependent$thereon.$

If$none$of$the$circumstances$are$present,$the$employee$cannot$be$compelled$to$work$for$
more$than$8$hours.$
$
Pigcaulan&v.&Security&and&Credit&Investigation,&Inc.$(663$SCRA$1,$2012)$
Pigcaulan$and$Canoy$worked$as$security$guards$for$SCI.$They$claimed$that$they$were$not$paid$
OT$pay,$13th$month$pay,$holiday$pay,$rest$day$pay,$and$service$incentive$leave$pay.$They$
presented$handwritten$computations$to$the$LA$who$appreciated$the$same$as$Daily$Time$
Records.$The$claims$were$granted.$The$CA$reversed$the$decision$for$want$of$legal$and$factual$
basis$as$to$the$award$of$OT$pay.$The$SC$upheld$the$dismissal$of$the$claim$for$OT$pay$because$
the$same$was$not$supported$by$substantial$evidence.$The$handwritten$computations$are$self[
serving,$unreliable,$and$unsubstantial.$There$is$nothing$in$the$records$to$support$the$claim$that$
petitioner$worked$for$more$than$8$hours.$With$regard$to$the$other$claims,$the$Court$held$that$
petitioner$is$entitled$to$the$same.$There$is$no$showing$that$such$benefits$were$already$
integrated$into$his$salary.$The$burden$of$proving$it$rests$on$the$employer.$
$
3)

Undertime$Work/Leave$
$
Article&88.&Undertime(not(offset(by(overtime.$$Undertime$work$on$any$particular$day$shall$not$
be$offset$by$overtime$work$on$any$other$day.$Permission$given$to$the$employee$to$go$on$leave$
on$some$other$day$of$the$week$shall$not$exempt$the$employer$from$paying$the$additional$
compensation$required$in$this$Chapter.$
$

To$allow$offsetting$would$be$to$deprive$the$worker$of$the$OT$premium$(25%).$

Proper$procedure:$deduct$undertime$from$accrued$leave$credits$but$pay$OT$
compensation.$

Offesetting$not$allowed$on$all$days,$whether$the$OT$is$rendered$on$the$same$day$or$a$
different$one.$

4)

Additional$Compensation$
$
Article&87.&Overtime(work.$$Work$may$be$performed$beyond$eight$(8)$hours$a$day$provided$
that$the$employee$is$paid$for$the$overtime$work,$an$additional$compensation$equivalent$to$his$
regular$wage$plus$at$least$twenty[five$percent$(25%)$thereof.$Work$performed$beyond$eight$
hours$on$a$holiday$or$rest$day$shall$be$paid$an$additional$compensation$equivalent$to$the$rate$
of$the$first$eight$hours$on$a$holiday$or$rest$day$plus$at$least$thirty$percent$(30%)$thereof.$

5)

Proof$of$Work/Employer$Obligation$
$
SSS&v.&Court&of&Appeals$(348$SCRA$1,$2000)$
In$this$case,$the$SC$upheld$Margarita$Tanos$claim$for$her$husbands$death$benefits$and$
pension,$despite$the$fact$that$the$records$do$not$reflect$Tanos$18[year$employment$with$

Ish$Guidote$

Labor$Law$1$$Midterm$Reviewer$|$Page$68$of$80$

Ayalde.$The$Court$held$that$the$EER$was$sufficiently$proven$through$testimonial$evidence.$
Ayalde$submitted$incomplete$payrolls$to$prove$her$claim$that$Tano$was$a$mere$independent$
contractor.$The$Court$rejected$the$argument,$saying$that$the$absence$of$an$employees$name$
from$the$payroll$does$not$mean$that$he$is$not$an$employee.$An$employer$is$required$to$keep$
faithful$and$complete$records$of$its$business$affairs.$
$
g.

Nightwork$and$Night$Shift$Differential$
$
Shell&Oil&Company&of&the&Philippines&v.&Labor&Union$(81$Phil.$315,$1948)$
The$SC$upheld$the$jurisdiction$of$the$CIR$to$award$additional$compensation$to$respondent$for$work$
rendered$during$the$night.$The$rationale$of$awarding$night$shift$differential$is$that$night$work$is$
generally$undesirable$and$has$adverse$effects$on$the$health$of$the$workers.$They$work$at$night$out$of$
necessity$rather$than$convenience.$Moreover,$higher$overhead$costs$are$associated$with$night$work.$
$
Lepanto&Consolidated&Mining,&Co.&v.&Lepanto&Local&Staff&Union$(562$SCRA$395,$2008)$
The$parties$entered$into$their$4th$CBA,$which$stipulated$20%$night$shift$differential$for$the$first$shift$
(11pm[7am)$and$15%$for$the$third$shift$(3pm[11pm).$It$also$states$that$for$overtime$work$rendered$beyond$
3pm,$no$night$differential$pay$will$be$added$before$computation$of$OT$pay.$The$Union$alleges$that$it$was$
not$paid$night$shift$differential$for$work$rendered$after$3pm.$Lepanto$counters$that$pursuant$to$the$
above$clause,$it$is$not$obliged$to$pay$night$shift$differential.$The$Court$held$that$the$workers$are$still$
entitled$to$NSD,$the$clause$just$means$that$NSD$is$not$considered$in$the$computation$of$OT$pay$because$
it$will$be$paid$separately.$To$ascertain$the$intent$of$the$parties,$the$SC$considered$(1)$their$
contemporaneous$and$subsequent$acts,$and$(2)$their$contractual$history.$Lepanto$had$been$paying$the$
NSD$even$while$the$case$was$pending$appeal.$The$same$clause$was$also$included$in$the$1st,$2nd,$and$3rd$
CBAs.$Therefore$their$consistent$payment$of$the$same$cannot$be$attributed$to$mere$inadvertence.$
$
1)
Coverage/Exclusion$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&II&
$
Section&1.&Coverage.$$This$Rule$shall$apply$to$all$employees$except:$
(a) Those$of$the$government$and$any$of$its$political$subdivisions,$including$government[
owned$and/or$controlled$corporations;$
(b) Those$of$retail$and$service$establishments$regularly$employing$not$more$than$five$(5)$
workers;$$
(c) Domestic$helpers$and$persons$in$the$personal$service$of$another;$
(d) Managerial$employees$as$defined$in$Book$Three$of$this$Code;$
(e) Field$personnel$and$other$employees$whose$time$and$performance$is$unsupervised$by$the$
employer$including$those$who$are$engaged$on$task$or$contract$basis,$purely$commission$
basis,$or$those$who$are$paid$a$fixed$amount$for$performing$work$irrespective$of$the$time$
consumed$in$the$performance$thereof.$

$
$

2)

Additional$Compensation$
Article&86.&Night(shift(differential.$$Every$employee$shall$be$paid$a$night$shift$differential$of$
not$less$than$ten$percent$(10%)$of$his$regular$wage$for$each$hour$of$work$performed$between$
ten$oclock$in$the$evening$and$six$oclock$in$the$morning.$
$
RATIONALE$

Cannot$be$regarded$as$desirable;$

Higher$wages$used$as$inducement;$

Lower$rates$of$productivity$during$the$night;$

Night$work$laws$are$a$valuable$aid$in$enforcing$acts$fixing$the$maximum$period$of$
employment.$
$
NIGHT&SHIFT&DIFFERENTIAL&NOT&WAIVABLE$

Additional$compensation$founded$on$public$policy,$thus,$it$cannot$be$waived.$(Art.$6,$CC)$
$
BURDEN&OF&PROOF&OF&PAYMENT$

Burden$rests$on$the$employer.$

Employee$who$alleges$he$has$not$been$paid$is$not$required$to$prove$his$negative$
allegations.$

Ish$Guidote$

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$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&II&

$
Section&2.&Night(shift(differential.$$An$employee$shall$be$paid$night$shift$differential$of$no$less$
than$ten$per$cent$(10%)$of$his$regular$wage$for$each$hour$of$work$performed$between$ten$
oclock$in$the$evening$and$six$oclock$in$the$morning.$
$
Section&3.&Additional(compensation.$$Where$an$employee$is$permitted$or$suffered$to$work$on$
the$period$covered$after$his$work$schedule,$he$shall$be$entitled$to$his$regular$wage$plus$at$
least$twenty[five$per$cent$(25%)$and$an$additional$amount$of$no$less$than$ten$per$cent$(10%)$of$
such$overtime$rate$for$each$hour$or$work$performed$between$10$p.m.$to$6$a.m.$
$
Section&4.&Additional(compensation(on(scheduled(rest(day/special(holiday.$$An$employee$who$
is$required$or$permitted$to$work$on$the$period$covered$during$rest$days$and/or$special$holidays$
not$falling$on$regular$holidays,$shall$be$paid$a$compensation$equivalent$to$his$regular$wage$
plus$at$least$thirty$(30%)$per$cent$and$an$additional$amount$of$not$less$than$ten$(10%)$per$cent$
of$such$premium$pay$rate$for$each$hour$of$work$performed.$
$
Section&5.&Additional(compensation(on(regular(holidays.$$For$work$on$the$period$covered$
during$regular$holidays,$an$employee$shall$be$entitled$to$his$regular$wage$during$these$days$
plus$an$additional$compensation$of$no$less$than$ten$(10%)$per$cent$of$such$premium$rate$for$
each$hour$of$work$performed.$
$
$
$

Ish$Guidote$

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ANNEX&A$
$
Department&Order&No.&18TA&$
Series$of$2011$$
$
RULES&IMPLEMENTING&ARTICLES&106&TO&109&OF&THE&LABOR&CODE,&AS&AMENDED$
$
By$virtue$of$the$power$vested$in$the$Secretary$of$Labor$and$Employment$under$Articles$5$and$106$to$109$of$the$Labor$Code$of$the$Philippines,$
as$amended,$the$following$regulations$governing$contracting$and$subcontracting$arrangements$are$hereby$issued:$
&
Section&1.$Guiding&principles.$Contracting$and$subcontracting$arrangements$are$expressly$allowed$by$law$and$are$subject$to$regulations$for$the$
promotion$of$employment$and$the$observance$of$the$rights$of$workers$to$just$and$humane$conditions$of$work,$security$of$tenure,$self[
organization$and$collective$bargaining.$Labor[only$contracting$as$defined$herein$shall$be$prohibited.$$
$
Section&2.&Coverage.$These$Rules$shall$apply$to$all$parties$of$contracting$and$subcontracting$arrangements$where$employer[employee$
relationships$exist.$It$shall$also$apply$to$cooperatives$engaging$in$contracting$or$subcontracting$arrangements.$$
$
Contractors$and$subcontractors$referred$to$in$these$Rules$are$prohibited$from$engaging$in$recruitment$and$placement$activities$as$defined$in$
Article$13(b)$of$the$Labor$Code,$whether$for$local$or$overseas$employment.$$
$
Section&3.&Definition&of&terms.$The$following$terms$as$used$in$these$Rules,$shall$mean:$
(a) Bond/s$refers$to$the$bond$under$Article$108$of$the$Labor$Code$that$the$principal$may$require$from$the$contractor$to$be$posted$equal$to$
the$cost$of$labor$under$contract.$The$same$may$also$refer$to$the$security$or$guarantee$posted$by$the$principal$for$the$payment$of$the$
services$of$the$contractors$under$the$Service$Agreement.$$
(b) Cabo$refers$to$a$person$or$group$of$persons$or$to$a$labor$group$which,$in$the$guise$of$a$labor$organization,$cooperative$or$any$entity,$
supplies$workers$to$an$employer,$with$or$without$any$monetary$or$other$consideration,$whether$in$the$capacity$of$an$agent$of$the$
employer$or$as$an$ostensible$independent$contractor.$$
(c) Contracting$or$Subcontracting$refers$to$an$arrangement$whereby$a$principal$agrees$to$put$out$or$farm$out$with$a$contractor$the$
performance$or$completion$of$a$specific$job,$work$or$service$within$a$definite$or$predetermined$period,$regardless$of$whether$such$job,$
work$or$service$is$to$be$performed$or$completed$within$or$outside$the$premises$of$the$principal.$$
(d) Contractor$refers$to$any$person$or$entity,$including$a$cooperative,$engaged$in$a$legitimate$contracting$or$subcontracting$arrangement$
providing$either$services,$skilled$workers,$temporary$workers,$or$a$combination$of$services$to$a$principal$under$a$Service$Agreement.$$
(e) Contractors(employee$includes$one$employed$by$a$contractor$to$perform$or$complete$a$job,$work,$or$service$pursuant$to$a$Service$
Agreement$with$a$principal.$It$shall$also$refer$to$regular$employees$of$the$contractor$whose$functions$are$not$dependent$on$the$
performance$or$completion$of$a$specific$job,$work$or$service$within$a$definite$period$of$time,$i.e.,$administrative$staff.$$
(f) InNhouse(agency$refers$to$a$contractor$which$is$owned,$managed,$or$controlled$directly$or$indirectly$by$the$principal$or$one$where$the$
principal$owns/represents$any$share$of$stock,$and$which$operates$solely$or$mainly$for$the$principal.$$
(g) Net(Financial(Contracting(Capacity((NFCC)1$refers$to$the$formula$to$determine$the$financial$capacity$of$the$contractor$to$carry$out$the$job,$
work$or$services$sought$to$be$undertaken$under$a$Service$Agreement.$NFCC$is$current$assets$minus$current$liabilities$multiplied$by$K,$
which$stands$for$contract$duration$equivalent$to:$10$for$one$year$or$less;$15$for$more$than$one$(1)$year$up$to$two$(2)$years;$and$20$for$more$
than$two$(2)$years,$minus$the$value$of$all$outstanding$or$ongoing$projects$including$contracts$to$be$started.$$
(h) Principal$refers$to$any$employer,$whether$a$person$or$entity,$including$government$agencies$and$government[owned$and$controlled[
corporations,$who/which$puts$out$or$farms$out$a$job,$service$or$work$to$a$contractor.$$
(i) Right(to(control$refers$to$the$right$reserved$to$the$person$for$whom$the$services$of$the$contractual$workers$are$performed,$to$
determine$not$only$the$end$to$be$achieved,$but$also$the$manner$and$means$to$be$used$in$reaching$that$end.$
(j) Service(Agreement$refers$to$the$contract$between$the$principal$and$contractor$containing$the$terms$and$conditions$governing$the$
performance$or$completion$of$a$specific$job,$work$or$service$being$farmed$out$for$a$definite$or$predetermined$period.$$
(k) Solidary(liability$refers$to$the$liability$of$the$principal,$pursuant$to$the$provision$of$Article$109$of$the$Labor$Code,$as$direct$employer$
together$with$the$contractor$for$any$violation$of$any$provision$of$the$Labor$Code.$$
$
It$also$refers$to$the$liability$of$the$principal,$in$the$same$manner$and$extent$that$he/she$is$liable$to$his/her$direct$employees,$to$the$extent$
of$the$work$performed$under$the$contract$when$the$contractor$fails$to$pay$the$wages$of$his/her$employees,$as$provided$in$Article$106$of$
the$Labor$Code,$as$amended.$$
$
(l) Substantial(capital$refers$to$paid[up$capital$stocks/shares$of$at$least$Three$Million$Pesos$(P3,000,000.00)$in$the$case$of$corporations,$
partnerships$and$cooperatives;$in$the$case$of$single$proprietorship,$a$net$worth$of$at$least$Three$Million$Pesos$(P3,000,000.00).$$
(m) Trilateral(Relationship$refers$to$the$relationship$in$a$contracting$or$subcontracting$arrangement$where$there$is$a$contract$for$a$specific$
job,$work$or$service$between$the$principal$and$the$contractor,$and$a$contract$of$employment$between$the$contractor$and$its$workers.$
There$are$three$(3)$parties$involved$in$these$arrangements:$the$principal$who$decides$to$farm$out$a$job,$work$or$service$to$a$contractor;$
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
1

$Refers$to$the$formula$set$out$in$the$Implementing$Rules$and$Regulations$of$Republic$Act$No.$9184,$or$An$Act$Providing$for$the$Modernization,$Standardization$
and$Regulation$of$the$Procurement$Activities$of$the$Government$and$For$Other$Purposes.$
Ish$Guidote$

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the$contractor$who$has$the$capacity$to$independently$undertake$the$performance$of$the$job,$work$or$service;$and$the$contractual$
workers$engaged$by$the$contractor$to$accomplish$the$job,$work$or$service.$$
&
Section&4.&Legitimate&contracting&or&subcontracting.$Contracting$or$subcontracting$shall$be$legitimate$if$all$the$following$circumstances$
concur:$$
(a) $The$contractor$must$be$registered$in$accordance$with$these$Rules$and$carries$a$distinct$and$independent$business$and$undertakes$to$
perform$the$job,$work$or$service$on$its$own$responsibility,$according$to$its$own$manner$and$method,$and$free$from$control$and$direction$
of$the$principal$in$all$matters$connected$with$the$performance$of$the$work$except$as$to$the$results$thereof;$$
(b) The$contractor$has$substantial$capital$and/or$investment;$and$
(c) The$Service$Agreement$ensures$compliance$with$all$the$rights$and$benefits$under$Labor$Laws.$$
&
Section&5.&Trilateral&relationship&in&contracting&arrangements;&Solidary&liability.$In$legitimate$contracting$or$subcontracting$arrangement$there$
exists:$$
$
(a) An$employer[employee$relationship$between$the$contractor$and$the$employees$it$engaged$to$perform$the$specific$job,$work$or$service$
being$contracted;$and$$
(b) A$contractual$relationship$between$the$principal$and$the$contractor$as$governed$by$the$provisions$of$the$Civil$Code.$$
$
In$the$event$of$any$violation$of$any$provision$of$the$Labor$Code,$including$the$failure$to$pay$wages,$there$exists$a$solidary$liability$on$the$part$of$
the$principal$and$the$contractor$for$purposes$of$enforcing$the$provisions$of$the$Labor$Code$and$other$social$legislation,$to$the$extent$of$the$
work$performed$under$the$employment$contract.$$
$
However,$the$principal$shall$be$deemed$the$direct$employer$of$the$contractors$employee$in$cases$where$there$is$a$finding$by$a$competent$
authority$of$labor[only$contracting,$or$commission$of$prohibited$activities$as$provided$in$Section$7,$or$a$violation$of$either$Sections$8$or$9$
hereof.$$
&
Section&6.&Prohibition&against&laborHonly&contracting.$Labor[only$contracting$is$hereby$declared$prohibited.$For$this$purpose,$labor$only$
contracting$shall$refer$to$an$arrangement$where:$$
(a) The$contractor$does$not$have$substantial$capital$or$investments$in$the$form$of$tools,$equipment,$machineries,$work$premises,$among$
others,$and$the$employees$recruited$and$placed$are$performing$activities$which$are$usually$necessary$or$desirable$to$the$operation$of$the$
company,$or$directly$related$to$the$main$business$of$the$principal$within$a$definite$or$predetermined$period,$regardless$of$whether$such$
job,$work$or$service$is$to$be$performed$or$completed$within$or$outside$the$premises$of$the$principal;$or$$
(b) The$contractor$does$not$exercise$the$right$to$control$over$the$performance$of$the$work$of$the$employee.$$
&
Section&7.&Other&Prohibitions.$Notwithstanding$Section$6$of$these$Rules,$the$following$are$hereby$declared$prohibited$for$being$contrary$to$law$
or$public$policy:$$
A. Contracting$out$of$jobs,$works$or$services$when$not$done$in$good$faith$and$not$justified$by$the$exigencies$of$the$business$such$as$the$
following:$
a. Contracting$out$of$jobs,$works$or$services$when$the$same$results$in$the$termination$or$reduction$of$regular$employees$and$
reduction$of$work$hours$or$reduction$or$splitting$of$the$bargaining$unit.$
b. Contracting$out$of$work$with$a$Cabo.$
c. Taking$undue$advantage$of$the$economic$situation$or$lack$of$bargaining$strength$of$the$contractors$employees,$or$
undermining$their$security$of$tenure$or$basic$rights,$or$circumventing$the$provisions$of$regular$employment,$in$any$of$the$
following$instances:$
i. Requiring$them$to$perform$functions$which$are$currently$being$performed$by$the$regular$employees$of$the$
principal;$and$
ii. Requiring$them$to$sign,$as$a$precondition$to$employment$or$continued$employment,$an$antedated$resignation$
letter;$a$blank$payroll;$a$waiver$of$labor$standards$including$minimum$wages$and$social$or$welfare$benefits;$or$a$
quitclaim$releasing$the$principal,$contractor$or$from$any$liability$as$to$payment$of$future$claims.$
d. Contracting$out$of$a$job,$work$or$service$through$an$in[house$agency.$
e. Contracting$out$of$a$job,$work$or$service$that$is$necessary$or$desirable$or$directly$related$to$the$business$or$operation$of$the$
principal$by$reason$of$a$strike$or$lockout$whether$actual$or$imminent.$
f. Contracting$out$of$a$job,$work$or$service$being$performed$by$union$members$when$such$will$interfere$with,$restrain$or$
coerce$employees$in$the$exercise$of$their$rights$to$self[organization$as$provided$in$Art.$248$(c)$of$the$Labor$Code,$as$
amended.$
g. Repeated$hiring$of$employees$under$an$employment$contract$of$short$duration$or$under$a$Service$Agreement$of$short$
duration$with$the$same$or$different$contractors,$which$circumvents$the$Labor$Code$provisions$on$Security$of$Tenure.$
h. Requiring$employees$under$a$subcontracting$arrangement$to$sign$a$contract$fixing$the$period$of$employment$to$a$term$
shorter$than$the$term$of$the$Service$Agreement,$unless$the$contract$is$divisible$into$phases$for$which$substantially$different$
skills$are$required$and$this$is$made$known$to$the$employee$at$the$time$of$engagement.$
i.
Refusal$to$provide$a$copy$of$the$Service$Agreement$and$the$employment$contracts$between$the$contractor$and$the$
employees$deployed$to$work$in$the$bargaining$unit$of$the$principals$certified$bargaining$agent$to$the$sole$and$exclusive$
bargaining$agent$(SEBA).$
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j.

B.

Engaging$or$maintaining$by$the$principal$of$subcontracted$employees$in$excess$of$those$provided$for$in$the$applicable$
Collective$Bargaining$Agreement$(CBA)$or$as$set$by$the$Industry$Tripartite$Council$(ITC).$
Contracting$out$of$jobs,$works$or$services$analogous$to$the$above$when$not$done$in$good$faith$and$not$justified$by$the$exigencies$of$the$
business.$

&
Section&8.&Rights&of&contractors&employees.$All$contractors$employees,$whether$deployed$or$assigned$as$reliever,$seasonal,$week[ender,$
temporary,$or$promo$jobbers,$shall$be$entitled$to$all$the$rights$and$privileges$as$provided$for$in$the$Labor$Code,$as$amended,$to$include$the$
following:$
(a) Safe$and$healthful$working$conditions;$$
(b) $Labor$standards$such$as$but$not$limited$to$service$incentive$leave,$rest$days,$overtime$pay,$holiday$pay,$13th$month$pay,$and$separation$
pay$as$may$be$provided$in$the$Service$Agreement$or$under$the$Labor$Code;$$
(c) Retirement$benefits$under$the$SSS$or$retirement$plans$of$the$contractor,$if$there$is$any;$$
(d) Social$security$and$welfare$benefits;$$
(e) Self[organization,$collective$bargaining$and$peaceful$concerted$activities;$and$$
(f) Security$of$tenure.$
&
Section&9.&Required&contracts&under&these&Rules.$
(a) Employment$contract$between$the$contractor$and$its$employee.$$
$
Notwithstanding$any$oral$or$written$stipulations$to$the$contrary,$the$contract$between$the$contractor$and$its$employee$shall$be$governed$
by$the$provisions$of$Articles$279$and$280$of$the$Labor$Code,$as$amended.$It$shall$include$the$following$terms$and$conditions:$
i.
The$specific$description$of$the$job,$work$or$service$to$be$performed$by$the$employee;$$
ii. The$place$of$work$and$terms$and$conditions$of$employment,$including$a$statement$of$the$wage$rate$applicable$to$the$individual$
employee;$and$$
iii. The$term$or$duration$of$employment$that$must$be$co[extensive$with$the$Service$Agreement$or$with$the$specific$phase$of$work$
for$which$the$employee$is$engaged.$
$
The$contractor$shall$inform$the$employee$of$the$foregoing$terms$and$conditions$of$employment$in$writing$on$or$before$the$first$day$of$
his/her$employment.$$
$
(b) Service$Agreement$between$the$principal$and$the$contractor.$The$Service$Agreement$shall$include$the$following:$
i.
The$specific$description$of$the$job,$work$or$service$being$subcontracted.$$
ii. The$place$of$work$and$terms$and$conditions$governing$the$contracting$arrangement,$to$include$the$agreed$amount$of$the$
services$to$be$rendered,$the$standard$administrative$fee$of$not$less$than$ten$percent$(10%)$of$the$total$contract$cost.$$
iii. Provisions$ensuring$compliance$with$all$the$rights$and$benefits$of$the$employees$under$the$Labor$Code$and$these$Rules$on:$
provision$for$safe$and$healthful$working$conditions;$labor$standards$such$as,$service$incentive$leave,$rest$days,$overtime$pay,$
13th$month$pay$and$separation$pay;$retirement$benefits;$contributions$and$remittance$of$SSS,$Philhealth,$PagIbig$Fund,$and$
other$welfare$benefits;$the$right$to$self[organization,$collective$bargaining$and$peaceful$concerted$action;$and$the$right$to$
security$of$tenure.$$
iv. A$provision$on$the$Net$Financial$Contracting$Capacity$of$the$contractor,$which$must$be$equal$to$the$total$contract$cost.$$
v. A$provision$on$the$issuance$of$the$bond/s$as$defined$in$Section$3(m)$renewable$every$year.$$
vi. The$contractor$or$subcontractor$shall$directly$remit$monthly$the$employers$share$and$employees$contribution$to$the$SSS,$ECC,$
Philhealth$and$Pagibig.$$
vii. The$term$or$duration$of$engagement.$The$Service$Agreement$must$conform$to$the$DOLE$Standard$Computation$and$Standard$
Service$Agreement,$which$form$part$of$these$Rules$as$Annexes$A$and$B.$
&
Section&10.&Duties&of&the&principal.$Pursuant$to$the$authority$of$the$Secretary$of$Labor$and$Employment$to$restrict$or$prohibit$the$contracting$
of$labor$to$protect$the$rights$of$the$workers$and$to$ensure$compliance$with$the$provisions$of$the$Labor$Code,$as$amended,$the$principal,$as$the$
indirect$employer$or$the$user$of$the$services$of$the$contractor,$is$hereby$required$to$observe$the$provisions$of$these$Rules.$$
$
Section&11.&Security&of&tenure&of&contractors&employees.$It$is$understood$that$all$contractors$employees$enjoy$security$of$tenure$regardless$of$
whether$the$contract$of$employment$is$co[terminus$with$the$service$agreement,$or$for$a$specific$job,$work$or$service,$or$phase$thereof.$$
$
Section&12.&Observance&of&required&standards&of&due&process;&requirements&of&notice.$In$all$cases$of$termination$of$employment,$the$standards$
of$due$process$laid$down$in$Article$277(b)$of$the$Labor$Code,$as$amended,$and$settled$jurisprudence$on$the$matter2,$must$be$observed.$Thus,$
the$following$is$hereby$set$out$to$clarify$the$standards$of$due$process$that$must$be$observed:$$
$
I.
For$termination$of$employment$based$on$just$causes$as$defined$in$Article$282$of$the$Code,$the$requirement$of$two$written$notices$served$
on$the$employee$shall$observe$the$following:$$
(A) $The$first$written$notice$should$contain:$
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
2

$King$of$Kings$Transport,$Inc.,$Claire$dela$Fuente,$and$Melissa$Lim,$vs.$Santiago$O.$Mamac,$G.R.$No.$166208,$(29$June$2007);$and$Felix$B.$Perez$and$Amante$G.$
Doria$v.$Philippine$Telegraph$and$Telephone$Company$and$Jose$Luis$Santiago,$G.R.$No.$152048,$(7$April$2009),$(en$banc$Decision).$
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(1)
(2)

II.
III.

The$specific$causes$or$grounds$for$termination;$$
Detailed$narration$of$the$facts$and$circumstances$that$will$serve$as$basis$for$the$charge$against$the$employee.$A$general$
description$of$the$charge$will$not$suffice;$$
(3)
The$company$rule,$if$any,$that$is$violated$and/or$the$ground$under$Art.$282$that$is$being$charged$against$the$employee;$and$$
(4)
A$directive$that$the$employee$is$given$opportunity$to$submit$a$written$explanation$within$a$reasonable$period.$
$
Reasonable$period$should$be$construed$as$a$period$of$at$least$five$(5)$calendar$days$from$receipt$of$the$notice$to$give$the$
employee$an$opportunity$to$study$the$accusation,$consult$a$union$official$or$lawyer,$gather$data$and$evidence,$and$decide$
on$the$defenses$against$the$complaint.$
(B) After$serving$the$first$notice,$the$employer$should$afford$the$employee$ample$opportunity$to$be$heard$and$to$defend$himself/herself$
with$the$assistance$of$his/her$representative$if$he/she$so$desires,$as$provided$in$Article$277(b)$of$the$Labor$Code,$as$amended.$$
$
Ample$opportunity$to$be$heard$means$any$meaningful$opportunity$(verbal$or$written)$given$to$the$employee$to$answer$the$
charges$against$him/her$and$submit$evidence$in$support$of$his/her$defense,$whether$in$a$hearing,$conference$or$some$other$fair,$just$
and$reasonable$way.$A$formal$hearing$or$conference$becomes$mandatory$only$when$requested$by$the$employee$in$writing$or$
substantial$evidentiary$disputes$exist$or$a$company$rule$or$practice$requires$it,$or$when$similar$circumstances$justify$it.$$
(C) After$determining$that$termination$of$employment$is$justified,$the$employer$contractor$shall$serve$the$employee$a$written$notice$of$
termination$indicating$that:$(1)$all$circumstances$involving$the$charge$against$the$employees$have$been$considered;$and$(2)$the$
grounds$have$been$established$to$justify$the$severance$of$their$employment.$The$foregoing$notices$shall$be$served$on$the$
employees$last$known$address.$
For$termination$of$employment$based$on$authorized$causes$defined$in$Article$283$of$the$Labor$Code,$the$requirement$of$due$process$
shall$be$deemed$complied$with$upon$service$of$a$written$notice$to$the$employee$and$the$appropriate$regional$office$of$the$Department$of$
Labor$and$Employment$at$least$thirty$days$before$the$effectivity$of$the$termination,$specifying$the$ground$or$grounds$for$termination.$$
If$the$termination$is$brought$about$by$the$completion$of$the$contract$or$phase$thereof,$no$prior$notice$is$required.$If$the$termination$is$
brought$about$by$the$failure$of$a$probationary$employee$to$meet$the$reasonable$standards$of$the$employer,$which$was$made$known$to$
the$employee$at$the$time$of$his/her$employment,$it$shall$be$sufficient$that$a$written$notice$is$served$upon$the$employee$within$a$
reasonable$time$prior$to$the$expiration$of$the$probationary$period.$$
&
Section&13.&Effect&of&termination&of&employment.$The$termination$of$employment$of$the$contractor$employee$prior$to$the$expiration$of$the$
Service$Agreement$shall$be$governed$by$Articles$282,$283$and$284$of$the$Labor$Code.$$
$
In$case$the$termination$of$employment$is$caused$by$the$pre[termination$of$the$Service$Agreement$not$due$to$authorized$causes$under$Article$
283,$the$right$of$the$contractor$employee$to$unpaid$wages$and$other$unpaid$benefits$including$unremitted$legal$mandatory$contributions,$e.g.,$
SSS,$Philhealth,$Pag[ibig,$ECC,$shall$be$borne$by$the$party$at$fault,$without$prejudice$to$the$solidary$liability$of$the$parties$to$the$Service$
Agreement.$$
$
Where$the$termination$results$from$the$expiration$of$the$service$agreement,$or$from$the$completion$of$the$phase$of$the$job,$work$or$service$
for$which$the$employee$is$engaged,$the$latter$may$opt$for$payment$of$separation$benefits$as$may$be$provided$by$law$or$the$Service$
Agreement,$without$prejudice$to$his/her$entitlement$to$the$completion$bonuses$or$other$emoluments,$including$retirement$benefits$whenever$
applicable.$$
$
Section&14.&Mandatory&Registration&and&Registry&of&Legitimate&Contractors.$Consistent$with$the$authority$of$the$Secretary$of$Labor$and$
Employment$to$restrict$or$prohibit$the$contracting$out$of$labor$to$protect$the$rights$of$workers,$it$shall$be$mandatory$for$all$persons$or$
entities,$including$cooperatives,$acting$as$contractors,$to$register$with$the$Regional$Office$of$the$Department$of$Labor$and$Employment$
(DOLE)$where$it$principally$operates.$$
$
Failure$to$register$shall$give$rise$to$the$presumption$that$the$contractor$is$engaged$in$labor[only$contracting.$$
$
Accordingly,$the$registration$system$governing$contracting$arrangements$and$implemented$by$the$Regional$Offices$of$the$DOLE$is$hereby$
established,$with$the$Bureau$of$Working$Conditions$(BWC)$as$the$central$registry.$$
$
Section&15.&Requirements&for&registration.$The$application$for$registration$as$a$contractor$shall$be$filed$at$the$DOLE$Regional$Office$in$the$
region$where$it$seeks$to$principally$operate.$The$applicant$shall$provide$in$the$application$form$the$following$information:$
(a) The$name$and$business$address$of$the$applicant$and$the$areas$where$it$seeks$to$operate;$$
(b) $The$names$and$addresses$of$officers,$if$the$applicant$is$a$corporation,$partnership,$cooperative$or$a$labor$organization;$$
(c) The$nature$of$the$applicants$business$and$the$industry$or$industries$where$the$applicant$seeks$to$operate;$$
(d) The$number$of$regular$workers$and$the$total$workforce;$$
(e) The$list$of$clients,$if$any,$the$number$of$personnel$assigned$to$each$client,$if$any,$and$the$services$provided$to$the$client;$$
(f) The$description$of$the$phases$of$the$contract,$including$the$number$of$employees$covered$in$each$phase,$where$appropriate;$and$$
(g) Proof$of$compliance$with$substantial$capital$requirement$as$defined$in$Section$3(l)$of$these$Rules.$
$
The$application$shall$be$supported$by:$
$
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(a) A$certified$true$copy$of$a$certificate$of$registration$of$firm$or$business$name$from$the$Securities$and$Exchange$Commission$(SEC),$
Department$of$Trade$and$Industry$(DTI),$Cooperative$Development$Authority$(CDA),$or$from$the$DOLE$if$the$applicant$is$a$labor$
organization;$$
(b) A$certified$true$copy$of$the$license$or$business$permit$issued$by$the$local$government$unit$or$units$where$the$contractor$operates;$$
(c) A$certified$listing,$with$proof$of$ownership$or$lease$contract,$of$facilities,$tools,$equipment,$premises$implements,$machineries$and$
work$premises,$that$are$actually$and$directly$used$by$the$contractor$in$the$performance$or$completion$of$the$job,$work$or$service$
contracted$out.$In$addition,$the$applicant$shall$submit$a$photo$of$the$office$building$and$premises$where$it$holds$office;$$
(d) A$copy$of$audited$financial$statements$if$the$applicant$is$a$corporation,$partnership,$cooperative$or$a$labor$organization,$or$copy$of$
the$latest$ITR$if$the$applicant$is$a$sole$proprietorship;$and$$
(e) A$sworn$disclosure$that$the$registrant,$its$officers$and$owners$or$principal$stockholders$or$any$one$of$them,$has$not$been$operating$
or$previously$operating$as$a$contractor$under$a$different$business$name$or$entity$or$with$pending$cases$of$violations$of$these$Rules$
and/or$labor$standards,$or$with$a$cancelled$registration.$In$case$any$of$the$foregoing$has$a$pending$case,$a$copy$of$the$complaint$and$
the$latest$status$of$the$case$shall$be$attached.$$
$
The$application$shall$be$verified.$It$shall$include$a$DOLE$certification$of$attendance$to$orientation$seminar$on$these$Rules$and$an$undertaking$
that$the$contractor$shall$abide$by$all$applicable$labor$laws$and$regulations.$
&
Section&16.&Filing&and&processing&of&application.$The$application$with$all$supporting$documents$shall$be$filed$in$triplicate$in$the$Regional$Office$
where$the$applicant$principally$operates.$No$application$for$registration$shall$be$accepted$unless$all$the$requirements$in$the$preceding$Section$
are$complied$with.$$
$
Section&17.&Verification&inspection.$Within$two$(2)$working$days$upon$receipt$of$the$application$with$complete$supporting$documents,$the$
authorized$representative$of$the$Regional$Director$shall$conduct$a$verification$inspection$of$the$facilities,$tools,$equipment,$and$work$premises$
of$the$applicant.$$
$
Section&18.&Approval&or&denial&of&the&application.$The$Regional$Office$shall$deny$or$approve$the$application$within$one$(1)$working$day$after$the$
verification$inspection.$$
$
Applications$that$fail$to$meet$the$requirements$set$forth$in$Section$15$of$these$Rules$shall$be$denied.$$
$
Section&19.&Registration&fee.$Payment$of$registration$fee$of$Twenty[Five$Thousand$Pesos$(P25,000.00)$shall$be$required$upon$approval$of$the$
application.$$
$
Upon$registration,$the$Regional$Office$shall$return$one$set$of$the$duly[stamped$application$documents$to$the$applicant,$retain$one$set$for$its$
file,$and$transmit$the$remaining$set$to$the$Bureau$of$Working$Conditions$(BWC)$within$five$(5)$days$from$registration.$$
$
Section&20.&Validity&of&certificate&of&registration&of&contractors.$The$contractor$shall$be$deemed$registered$only$on$the$date$of$issuance$of$its$
Certificate$of$Registration.$$
$
The$Certificate$of$Registration$shall$be$effective$for$three$(3)$years,$unless$cancelled$after$due$process.$The$same$shall$be$valid$in$the$region$
where$it$is$registered.$$
$
In$case$the$contractor$has$Service$Agreements$or$operates$outside$the$region$where$it$is$registered,$it$shall$request$a$duly$authenticated$copy$
of$its$Certificate$of$Registration$from$the$registering$Regional$Office$and$submit$the$same$to$the$DOLE$Regional$Office$where$it$seeks$to$
operate,$together$with$a$copy$of$its$Service$Agreement/s$in$the$area,$for$purposes$of$monitoring$compliance$with$these$Rules.$$
$
Section&21.&Renewal&of&registration.$All$registered$contractors$shall$apply$for$renewal$of$their$Certificates$of$Registration$thirty$(30)$days$before$
the$expiration$of$their$registration$to$remain$in$the$roster$of$legitimate$service$contractors.$The$applicant$shall$pay$a$registration$renewal$fee$
of$Twenty[Five$Thousand$Pesos$(P25,000.00)$to$the$DOLE$Regional$Office.$$
$
Copies$of$all$the$updated$supporting$documents$in$letters$(a)$to$(e)$of$Section$15$hereof$shall$be$attached$to$the$duly$accomplished$application$
form,$including$the$following:$
(a) Certificate$of$membership$and$proof$of$payment$of$SSS,$Philhealth,$BIR,$ECC$and$Pag[Ibig$contributions$for$the$last$three$(3)$years,$as$well$
as$loan$amortizations;$and$$
(b) Certificate$of$pending$or$no$pending$labor$standards$violation$case/s$with$the$National$Labor$Relations$Commission$(NLRC)$and$
Department$of$Labor$and$Employment$(DOLE).$The$pendency$of$a$case$will$not$prejudice$the$renewal$of$the$registration,$unless$there$is$a$
finding$of$violation$of$labor$standards$by$the$DOLE$Regional$Director.$$
&
Section&22.&SemiHannual&reporting.$The$contractor$shall$submit$in$triplicate$its$subscribed$semi[annual$report$using$a$prescribed$form$to$the$
appropriate$Regional$Office.$The$report$shall$include:$$
$
a. A$list$of$contracts$entered$with$the$principal$during$the$subject$reporting$period;$$
b. The$number$of$workers$covered$by$each$contract$with$the$principal;$$
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c.

Proof$of$payment$of$remittances$to$the$Social$Security$System$(SSS),$the$Pag[Ibig$Fund,$Philhealth,$Employees$Compensation$
Commission$(ECC),$and$Bureau$of$Internal$Revenue$(BIR)$due$its$employees$during$the$subject$reporting$period$and$of$amortization$
of$declared$loans$due$from$its$employees;$and$$
A$certified$listing$of$all$cases$filed$against$the$contractor$before$the$NLRC$$

d.
$
The$Regional$Office$shall$return$one$set$of$the$duly[stamped$report$to$the$contractor,$retain$one$set$for$its$file,$and$transmit$the$remaining$set$
to$the$Bureau$of$Working$Conditions$(BWC)$within$five$(5)$days$from$receipt$thereof.$$
&
Section&23.&Grounds&for&cancellation&of&registration.$The$Regional$Director$shall,$upon$a$verified$complaint,$cancel$or$revoke$the$registration$of$
a$contractor$after$due$process,$based$on$any$of$the$following$grounds:$$
(a) Misrepresentation$of$facts$in$the$application;$$
(b) Submission$of$a$falsified$or$tampered$application$or$supporting$documents$to$the$application$for$registration;$$
(c) Non[submission$of$Service$Agreement$between$the$principal$and$the$contractor$when$required$to$do$so;$$
(d) Non[submission$of$the$required$semi[annual$report$as$provided$in$Section$22$(Semi[annual$reporting)$hereof;$$
(e) Findings$through$arbitration$that$the$contractor$has$engaged$in$labor[only$contracting$and/or$the$prohibited$activities$as$provided$in$
Section$7$(Other$Prohibitions)$hereof;$$
(f) Non[compliance$with$labor$standards$and$working$conditions;$$
(g) Findings$of$violation$of$Section$8$(Rights$of$contractors$employees)$or$Section$9$(Required$contracts)$of$these$Rules;$$
(h) Non[compliance$with$SSS,$the$HDMF,$Pag[Ibig,$Philhealth,$and$ECC$laws;$and$$
(i) Collecting$any$fees$not$authorized$by$law$and$other$applicable$rules$and$regulations.$$
&
Section&24.&Due&process&in&cancellation&of&registration.$Complaint/s$based$on$any$of$the$grounds$enumerated$in$the$preceding$Section$against$
the$contractor$shall$be$filed$in$writing$and$under$oath$with$the$Regional$Office$which$issued$the$Certificate$of$Registration.$$
$
The$complaint/s$shall$state$the$following:$
(a) The$name/s$and$address/es$of$the$complainant/s;$$
(b) $Name$and$address$of$the$contractor;$$
(c) The$ground/s$for$cancellation;$$
(d) When$and$where$the$action$complained$of$happened;$$
(e) The$amount$of$money$claim,$if$any;$and$$
(f) The$relief/s$sought.$
$
Upon$receipt$of$the$complaint,$the$Regional$Director$shall$direct$the$contractor,$with$notice$to$the$complainant,$to$file$a$verified$
answer/counter$affidavit$within$ten$(10)$calendar$days$without$extension,$incorporating$therein$all$pertinent$documents$in$support$of$his/her$
defenses,$with$proof$of$service$of$a$copy$to$the$complainant.$Failure$to$file$an$answer/counter$affidavit$shall$constitute$a$waiver$on$the$part$of$
the$respondent.$No$motion$to$dismiss$shall$be$entertained.$$
$
The$Regional$Director$or$his$duly$authorized$representative$may$conduct$a$clarificatory$hearing$within$the$prescribed$ten$(10)$calendar$days$
within$which$to$file$a$verified$answer/counter$affidavit.$$
$
Within$the$said$ten$(10)$calendar$days$period,$the$contractor$shall$make$the$necessary$corrections/rectifications$on$the$violations$that$are$
immediately$rectifiable$upon$its$own$initiative$in$order$to$be$fully$compliant.$$
$
The$Regional$Director$may$avail$himself$of$all$reasonable$means$to$ascertain$the$facts$of$the$case,$including$conduct$of$inspection,$where$
appropriate,$and$examination$of$informed$persons.$$
$
The$proceedings$before$the$Regional$Office$shall$be$summary$in$nature.$$
$
The$conduct$of$hearings$shall$be$terminated$within$fifteen$(15)$calendar$days$from$the$first$scheduled$clarificatory$hearing.$The$Regional$
Director$shall$resolve$the$case$within$ten$(10)$working$days$from$the$date$of$the$last$hearing.$If$there$is$no$necessity$to$conduct$a$hearing,$the$
case$shall$be$resolved$within$ten$(10)$working$days$from$receipt$of$the$verified$answer/counter$affidavit.$$
$
Any$motion$for$reconsideration$from$the$Order$of$the$Regional$Director$shall$be$treated$as$an$appeal.$$
$
Section&25.&Appeal.$The$Order$of$the$Regional$Director$is$appealable$to$the$Secretary$within$ten$(10)$working$days$from$receipt$of$the$copy$of$
the$Order.$The$appeal$shall$be$filed$with$the$Regional$Office$which$issued$the$cancellation$Order.$The$Office$of$the$Secretary$shall$have$thirty$
(30)$working$days$from$receipt$of$the$records$of$the$case$to$resolve$the$appeal.$The$Decision$of$the$Secretary$shall$become$final$and$executory$
after$ten$(10)$days$from$receipt$thereof$by$the$parties.$No$motion$for$reconsideration$of$the$Decision$shall$be$entertained.$$
$
Section&26.&Effects&of&cancellation&of&registration.$A$final$Order$of$cancellation$shall$divest$the$contractor$of$its$legitimate$status$to$engage$in$
contracting/subcontracting.$$
$
Such$Order$of$cancellation$shall$be$a$ground$to$deny$an$application$for$renewal$of$registration$to$a$contractor$under$the$Rules.$$
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$
The$cancellation$of$the$registration$of$the$contractor$for$engaging$in$labor[only$contracting$or$for$violation$of$any$of$the$provisions$of$these$
Rules$involving$a$particular$Service$Agreement$will$not,$however,$impair$the$validity$of$existing$legitimate$jobcontracting$arrangements$the$
contractor$may$have$entered$into$with$other$principals$prior$to$the$cancellation$of$its$registration.$Any$valid$and$subsisting$Service$Agreement$
shall$be$respected$until$its$expiration;$thereafter,$contracting$with$a$delisted$contractor$shall$make$the$principal$direct$employer$of$all$
employees$under$the$Service$Agreement$pursuant$to$Articles$106$and$109$of$the$Labor$Code.$$
$
Section&27.&Effects&of&finding&of&laborHonly&contracting&and/or&violation&of&Sections&7.&8&or&9&of&the&Rules.$A$finding$by$competent$authority$of$
labor[only$contracting$shall$render$the$principal$jointly$and$severally$liable$with$the$contractor$to$the$latters$employees,$in$the$same$manner$
and$extent$that$the$principal$is$liable$to$employees$directly$hired$by$him/her,$as$provided$in$Article$106$of$the$Labor$Code,$as$amended.$$
$
A$finding$of$commission$of$any$of$the$prohibited$activities$in$Section$7,$or$violation$of$either$Sections$8$or$9$hereof,$shall$render$the$principal$
the$direct$employer$of$the$employees$of$the$contractor$or$subcontractor,$pursuant$to$Article$109$of$the$Labor$Code,$as$amended.$$
$
Section&28.&Retaliatory&measures.$Pursuant$to$Article$118$of$the$Labor$Code,$as$amended,$it$shall$be$unlawful$for$the$principal,$contractor,$or$
any$party$privy$to$the$contract$or$services$provided$to$refuse$to$pay$or$reduce$the$wages$and$benefits,$and$discharge$or$in$any$manner$
discriminate$against$any$worker$who$has$filed$any$complaint$or$instituted$any$proceeding$on$wages$(under$Title$II,$Book$III$of$the$Labor$Code),$
labor$standards$violation,$or$has$testified$or$is$about$to$testify$in$such$proceedings.$$
$
Section&29.&Enforcement&of&labor&standards&and&working&conditions.$Consistent$with$Article$128$(Visitorial$and$Enforcement$Power)$of$the$
Labor$Code,$as$amended,$the$Regional$Director$through$his/her$duly$authorized$representatives,$shall$conduct$routine$inspection$of$
establishments$engaged$in$contracting$arrangement$regardless$of$the$number$of$employees$engaged$by$the$principal$or$by$the$contractor.$$
$
They$shall$have$access$to$employers$records$and$premises$at$any$time$of$the$day$or$night$whenever$work$is$being$undertaken$therein,$and$the$
right$to$copy$therefrom,$to$question$any$employee$and$investigate$any$fact,$condition$or$matter$which$may$be$necessary$to$determine$
violations$or$which$may$aid$in$the$enforcement$of$the$Labor$Code$and$of$any$labor$law,$wage$order,$or$rules$and$regulations$issued$pursuant$
thereto.$$
$
The$findings$of$the$duly$authorized$representative$shall$be$referred$to$the$Regional$Director$for$appropriate$action$as$provided$for$in$Article$
128,$and$shall$be$furnished$the$collective$bargaining$agent,$if$any.$$
$
Based$on$the$visitorial$and$enforcement$power$of$the$Secretary$of$Labor$and$Employment$in$Article$128$(a),$(b),$(c),$and$(d),$the$Regional$
Director$shall$issue$compliance$orders$to$give$effect$to$the$labor$standards$provisions$of$the$Labor$Code,$other$labor$legislation,$and$these$
Rules.$$
$
Section&30.&Duty&to&produce&copy&of&contract&between&the&principal&and&the&contractor.$The$principal$or$the$contractor$shall$be$under$an$
obligation$to$produce$a$copy$of$the$Service$Agreement$in$the$ordinary$course$of$inspection.$The$contractor$shall$likewise$be$under$an$
obligation$to$produce$a$copy$of$any$contract$of$employment$when$directed$to$do$so$by$the$Regional$Office$Director$or$his/her$authorized$
representative.$$
$
Section&31.&Tripartite&implementation&and&monitoring&of&compliance;&Use&of&registration&fees.$A$region[based$tripartite$monitoring$team$on$the$
observance$of$labor$standards$in$contracting$and$subcontracting$arrangements$shall$be$constituted$as$a$subcommittee$of$the$Regional$
Tripartite$Industrial$Peace$Council$(RTIPC)$within$fifteen$(15)$days$from$the$effectivity$of$these$Rules.$It$shall$submit$a$quarterly$regional$
monitoring$report$to$the$DOLE$Secretary$and$to$the$National$Tripartite$Industrial$Peace$Council$(NTIPC).$The$Bureau$of$Working$Conditions$
(BWC)$shall$ensure$the$implementation$of$this$provision,$and$shall$conduct$capacity$building$to$the$members$of$the$regional$tripartite$
monitoring$team.$$
$
For$this$purpose,$a$portion$of$the$collected$registration$fees$shall$be$used$in$the$operation$of$the$region[based$tripartite$monitoring$team,$
including$in$the$development$of$an$internet[based$monitoring$system$and$database.$It$shall$likewise$be$used$for$transmittal$of$the$monthly$
report$of$all$registered$contractors$to$the$Bureau$of$Local$Employment$(BLE),$and$in$generating$labor$market$information.$$
$
Section&32.&Oversight&function&of&the&National&TIPC.$The$National$Tripartite$Industrial$Peace$Council$(NTIPC)$as$created$under$Executive$Order$
No.$49,$Series$of$1998,$as$amended,$shall$serve$as$the$oversight$committee$to$verify$and$monitor$the$following:$$
(a) Engagement$in$allowable$contracting$activities;$and$$
(b) Compliance$with$administrative$reporting$requirements.$$
&
Section&33.&Collective&bargaining&and/or&Industry&Tripartite&Council&(ITC).$Nothing$herein$shall$preclude$the$parties$in$collective$bargaining$
agreements$(CBAs)$to$determine$the$functions$that$can$or$cannot$be$farmed$out$or$contracted$out$to$a$legitimate$contractor,$including$the$
terms$and$conditions$of$the$workers$engagement$under$the$arrangement,$provided$the$provisions$of$these$Rules$are$observed.$$
$
In$industries$with$established$Industry$Tripartite$Councils$(ITCs),$the$tripartite$partners$may$agree,$through$a$voluntary$code$of$good$practices,$
on$the$functions$or$processes$that$can$or$cannot$be$contracted$out$to$a$legitimate$contractor.$$
$
Ish$Guidote$

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Section&34.&Financial&Relief&Program;&Tripartite&CoHRegulation&Engagement.$A$Financial$Relief$Program$or$Unemployment$Assistance$Fund$shall$
be$established$for$employees$under$a$Service$Agreement$or$employees$in$transition$from$one$Service$Agreement$to$the$next.$For$this$
purpose,$the$National$Tripartite$Industrial$Peace$Council$(NTIPC),$upon$the$effectivity$of$this$issuance,$shall$constitute$a$Local$Service$Provider$
Tripartite$Working$Group$(LSP[TWG)$composed$of$representatives$of$the$stakeholders$in$the$industry.$The$LSP[TWG$shall:$$
(a) Recommend$the$mechanics$and$details$in$setting$up$the$Financial$Relief$Program$or$Unemployment$Assistance$Fund$with$proposed$
funding$sources$before$end$of$June$2012;$and$$
(b) Draw[up$the$terms$of$a$Tripartite$Co[Regulation$Engagement$in$ensuring$full$compliance$with$labor$laws$for$approval/endorsement$by$the$
NTIPC,$including$a$proposed$Table$of$Progressive$Rate$of$Increases$in$the$minimum$capitalization$requirement$at$reasonable$intervals$to$
ensure$that$only$legitimate$contractors$can$engage$in$subcontracting$arrangement.$
&
Section&35.&Enrollment&in&DOLE&programs&on&improving&compliance&with&labor&standards.$For$purposes$of$ensuring$compliance$with$labor$
standards,$the$principal$and$subcontractors$covered$by$these$Rules$are$encourage$to$enroll$and$participate$in$the$DOLE$Kapatiran$Work$
Improvement$for$Small$Enterprise$(WISE)[TAV$Program$(Department$Advisory$No.$06,$dated$07$March$2011)$and/or$in$the$Incentivizing$
Compliance$Program$(Department$Order$No.$115[11).$$
$
Section&36.&Contracting&or&subcontracting&arrangements&in&the&Construction&and&Other&Industries.$Contracting$or$subcontracting$arrangements$
in$the$Construction$Industry,$under$the$licensing$coverage$of$the$Philippine$Construction$Accreditation$Board$(PCAB),$shall$be$covered$by$the$
applicable$provisions$of$these$Rules$and$shall$continue$to$be$governed$by$Department$Order$No.$19,$Series$of$1993$(Guidelines$Governing$the$
Employment$of$Workers$in$the$Construction$Industry);$Department$Order$No.$13,$Series$of$1998$(Guidelines$Governing$the$Occupational$Safety$
and$Health$in$the$Construction$Industry);$and$DOLE[DPWH[DILG[DTI$and$PCAB$Memorandum$of$Agreement[Joint$Administrative$Order$No.$1,$
Series$of$2011$(on$coordination$and$harmonization$of$policies$and$programs$on$occupational$safety$and$health$in$the$construction$industry).$$
$
In$industries$covered$by$a$separate$regulation$of$the$DOLE$or$other$government$agency,$contracting$or$subcontracting$therein$shall$be$
governed$by$these$Rules$unless$expressly$provided$otherwise.$$
$
Section&37.&Prohibition&on&DOLE&officials&or&employees.$Any$official$or$employee$of$the$DOLE$or$its$attached$agencies$is$prohibited$from$
engaging$or$having$any$interest$in$any$contracting$or$subcontracting$business.$$
$
Section&38.&NonHimpairment&of&existing&contracts;&NonHdiminution&of&benefits.$Subject$to$the$provisions$of$Articles$106$to$109$of$the$Labor$
Code,$as$amended,$the$applicable$provisions$of$the$Civil$Code$and$existing$jurisprudence,$nothing$herein$shall$impair$the$rights$or$diminish$the$
benefits$being$enjoyed$by$the$parties$to$existing$contracting$or$subcontracting$arrangements.$$
$
The$effectivity$of$Certificates$of$Registration$acquired$under$Department$Order$No.$18,$Series$of$2002,$issued$on$21$February$2002,$shall$be$
respected$until$expiration.$$
$
Section&39.&Supersession.$All$rules$and$regulations$issued$by$the$Secretary$of$Labor$and$Employment$inconsistent$with$the$provisions$of$these$
Rules$are$hereby$superseded.$$
$
Section&40.&Separability&Clause.$If$any$provision$or$portion$of$these$Rules$are$declared$void$or$unconstitutional,$the$remaining$portions$or$
provisions$hereof$shall$continue$to$be$valid$and$effective.$$
$
Section&41.&Effectivity.$This$Department$Order$shall$be$effective$fifteen$(15)$days$after$completion$of$its$publication$in$a$newspaper$of$general$
circulation.$$
$
Manila,$Philippines,$14$November$2011.$$
$
ROSALINDA$DIMAPILIS[BALDOZ$$
Secretary$
$

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ANNEX&B&
&
&

COMPARISON&OF&SEC.&6,&RA&8042&AS&AMENDED&AND&ART.&34,&LABOR&CODE&

SECTION&6,&RA&8042&AS&AMENDED&BY&RA&10022&
a.$To$charge$or$accept$directly$or$indirectly$any$amount$greater$than$
that$specified$in$the$schedule$of$allowable$fees$prescribed$by$the$
Secretary$of$Labor$and$Employment,$or$to$make$a$worker$pay$or$
acknowledge$any$amount$greater$than$that$actually$received$by$him$
as$a$loan$or$advance;$
b.$To$furnish$or$publish$any$false$notice$or$information$or$document$
in$relation$to$recruitment$or$employment;$
c.$To$give$any$false$notice,$testimony,$information$or$document$or$
commit$any$act$of$misrepresentation$for$the$purpose$of$securing$a$
license$or$authority$under$the$Labor$Code,$or&for&the&purpose&of&
documenting&hired&workers&with&the&POEA,&which&include&the&act&of&
reprocessing&workers&through&a&job&order&that&pertains&to&nonexistent&
work,&work&different&from&the&actual&overseas&work,&or&work&with&a&
different&employer&whether&registered&or&not&with&the&POEA;$
d.$To$include$or$attempt$to$induce$a$worker$already$employed$to$quit$
his$employment$in$order$to$offer$him$another$unless$the$transfer$is$
designed$to$liberate$a$worker$from$oppressive$terms$and$conditions$
of$employment;$
e.$To$influence$or$attempt$to$influence$any$person$or$entity$not$to$
employ$any$worker$who$has$not$applied$for$employment$through$his$
agency$or&who&has&formed,&joined&or&supported,&or&has&contacted&or&is&
supported&by&any&union&or&workers&organization;$
f.$To$engage$in$the$recruitment$or$placement$of$workers$in$jobs$
harmful$to$public$health$or$morality$or$to$the$dignity$of$the$Republic$
of$the$Philippines;$
g.$To$obstruct$or$attempt$to$obstruct$inspection$by$the$Secretary$of$
Labor$and$Employment$or$by$his$duly$authorized$representative;$
h.$To$fail$to$submit$reports$on$the$status$of$employment,$placement$
vacancies,$remittance$of$foreign$exchange$earnings,$separation$from$
jobs,$departures$and$such$other$matters$or$information$as$may$be$
required$by$the$Secretary$of$Labor$and$Employment;$
i.$To$substitute$or$alter$to&the&prejudice&of&the&worker,$employment$
contracts$approved$and$verified$by$the$Department$of$Labor$and$
Employment$from$the$time$of$actual$signing$thereof$by$the$parties$up$
to$and$including$the$period$of$the$expiration$of$the$same$without$the$
approval$of$the$Department$of$Labor$and$Employment;$
j.(For&an&officer&or&agent&of&a&recruitment&or&placement&agency&to$
become$an$officer$or$member$of$the$Board$of$any$corporation$
engaged$in$travel$agency$or$to$be$engaged$directly$or$indirectly$in$the$
management$of$travel$agency;$
k.$To$withhold$or$deny$travel$documents$from$applicant$workers$
before$departure$for$monetary$or$financial$considerations,$or&for&any&
other&reasons,$other$than$those$authorized$under$the$Labor$Code$and$
its$implementing$rules$and$regulations;$
l.$Failure$to$actually$deploy$a$contracted$worker$without$valid$reason$
as$determined$by$the$Department$of$Labor$and$Employment;$
m.$Failure$to$reimburse$expenses$incurred$by$the$worker$in$
connection$with$his$documentation$and$processing$for$purposes$of$
deployment,$in$cases$where$the$deployment$does$not$actually$take$
place$without$the$workers$fault.$Illegal$recruitment$when$committed$
by$a$syndicate$or$in$large$scale$shall$be$considered$an$offense$
involving$economic$sabotage;$$
n.$To$allow$a$non[Filipino$citizen$to$head$or$manage$a$licensed$
recruitment/manning$agency.$
$
$

Ish$Guidote$

ARTICLE&34,&LABOR&CODE&
a.$To$charge$or$accept,$directly$or$indirectly,$any$amount$greater$than$
that$specified$in$the$schedule$of$allowable$fees$prescribed$by$the$
Secretary$of$Labor,$or$to$make$a$worker$pay$any$amount$greater$than$
that$actually$received$by$him$as$a$loan$or$advance;$
b.$To$furnish$or$publish$any$false$notice$or$information$or$document$
in$relation$to$recruitment$or$employment;$

c.$To$give$any$false$notice,$testimony,$information$or$document$or$
commit$any$act$of$misrepresentation$for$the$purpose$of$securing$a$
license$or$authority$under$this$Code.$

d.$To$induce$or$attempt$to$induce$a$worker$already$employed$to$quit$
his$employment$in$order$to$offer$him$to$another$unless$the$transfer$is$
designed$to$liberate$the$worker$from$oppressive$terms$and$
conditions$of$employment;$
e.$To$influence$or$to$attempt$to$influence$any$person$or$entity$not$to$
employ$any$worker$who$has$not$applied$for$employment$through$his$
agency;$
f.$To$engage$in$the$recruitment$or$placement$of$workers$in$jobs$
harmful$to$public$health$or$morality$or$to$the$dignity$of$the$Republic$
of$the$Philippines;$
g.$To$obstruct$or$attempt$to$obstruct$inspection$by$the$Secretary$of$
Labor$or$by$his$duly$authorized$representatives;$
h.$To$fail$to$file$reports$on$the$status$of$employment,$placement$
vacancies,$remittance$of$foreign$exchange$earnings,$separation$from$
jobs,$departures$and$such$other$matters$or$information$as$may$be$
required$by$the$Secretary$of$Labor.$
i.$To$substitute$or$alter$employment$contracts$approved$and$verified$
by$the$Department$of$Labor$from$the$time$of$actual$signing$thereof$
by$the$parties$up$to$and$including$the$periods$of$expiration$of$the$
same$without$the$approval$of$the$Secretary$of$Labor;$
j.$To$become$an$officer$or$member$of$the$Board$of$any$corporation$
engaged$in$travel$agency$or$to$be$engaged$directly$or$indirectly$in$the$
management$of$a$travel$agency;$
k.$To$withhold$or$deny$travel$documents$from$applicant$workers$
before$departure$for$monetary$or$financial$considerations$other$than$
those$authorized$under$this$Code$and$its$implementing$rules$and$
regulations.$
$

Labor$Law$1$$Midterm$Reviewer$|$Page$79$of$80$

ANNEX&C$
$
OMNIBUS&RULES&IMPLEMENTING&THE&LABOR&CODE&
BOOK&III,&RULE&ITA&&HOURS&OF&WORK&OF&HOSPITAL&AND&CLINIC&PERSONNEL&
$
Section&1.&General(statement(on(coverage.$$This$Rule$shall$apply$to:$
(a) All$hospitals$and$clinics,$including$those$with$a$bed$capacity$of$less$than$one$hundred$(100)$which$are$situated$in$cities$or$
municipalities$with$a$population$of$one$million$or$more;$and$
(b) All$hospitals$and$clinics$with$a$bed$capacity$of$at$least$one$hundred$(100),$irrespective$of$the$size$of$the$population$of$the$city$or$
municipality$where$they$may$be$situated.$
$
Section&2.&Hospitals(or(clinics(within(the(meaning(of(this(Rule.$$The$terms$hospitals$and$clinics$as$used$in$this$Rule$shall$mean$a$place$
devoted$primarily$to$the$maintenance$and$operation$of$facilities$for$the$diagnosis,$treatment$and$care$of$individuals$suffering$from$illness,$
disease,$injury,$or$deformity,$or$in$need$of$obstetrical$or$other$medical$and$nursing$care.$Either$term$shall$also$be$construed$as$any$institution,$
building,$or$place$where$there$are$installed$beds,$or$cribs,$or$bassinets$for$twenty[four$(24)$hours$use$or$longer$by$patients$in$the$treatment$of$
disease,$injuries,$deformities,$or$abnormal$physical$and$mental$states,$maternity$cases$or$sanitorial$care;$or$infirmaries,$nurseries,$dispensaries,$
and$such$other$similar$names$by$which$they$may$be$designated.$
$
Section&3.&Determination(of(bed(capacity(and(population.$$(a)$For$purposes$of$determining$the$applicability$of$this$Rule,$the$actual$bed$
capacity$of$the$hospital$or$clinic$at$the$time$of$such$determination$shall$be$considered,$regardless$of$the$actual$or$bed$occupancy.$The$bed$
capacity$of$hospital$or$clinic$as$determined$by$the$Bureau$of$Medical$Services$pursuant$to$Republic$Act$No.$4226,$otherwise$known$as$the$
Hospital$Licensure$Act,$shall$prima$facie$be$considered$as$the$actual$bed$capacity$of$such$hospital$or$clinic.$
(b)$The$size$of$the$population$of$the$city$or$municipality$shall$be$determined$from$the$latest$official$census$issued$by$the$Bureau$of$the$Census$
and$Statistics.$
$
Section&4.&Personnel(covered(by(this(Rule.$$This$Rule$applies$to$all$persons$employed$by$any$private$or$public$hospital$or$clinic$mentioned$in$
Section$1$hereof,$and$shall$include,$but$not$limited$to,$resident$physicians,$nurses,$nutritionists,$dieticians,$pharmacists,$social$workers,$
laboratory$technicians$paramedical$technicians,$psychologists,$midwives,$and$attendants.$
$
Section&5.&Regular(working(hours.$$The$regular$working$hours$of$any$person$covered$by$this$Rule$shall$not$be$more$than$eight$(8)$hours$in$any$
one$day$nor$more$than$forty$(40)$hours$in$any$one$week.$
$
For$purposes$of$this$Rule$a$day$shall$mean$a$work$day$of$twenty[four$(24)$consecutive$hours$beginning$at$the$same$time$each$calendar$year.$$
$
A$week$shall$mean$the$work$of$168$consecutive$hours,$or$seven$consecutive$24[hour$work$days,$beginning$at$the$same$hour$and$on$the$
same$calendar$day$each$calendar$week.$
$
Section&6.&Regular(working(days.$$The$regular$working$days$of$covered$employees$shall$not$be$more$than$five$days$in$a$work$week.$The$work$
week$may$begin$at$any$hour$and$on$any$day,$including$Saturday$or$Sunday,$designated$by$the$employer.$
$
Employers$are$not$precluded$from$changing$the$time$at$which$the$work$day$or$work$week$begins,$provided$that$the$change$is$not$intended$to$
evade$the$requirements$of$this$Rule.$
$
Section&7.&Overtime(work.$$Where$the$exigencies$of$the$service$so$require$as$determined$by$the$employer,$any$employee$covered$by$this$
Rule$may$be$scheduled$to$work$for$more$than$five$(5)$days$or$forty$(40)$hours$a$week,$provided$that$the$employee$is$paid$for$the$overtime$
work$an$additional$compensation$equivalent$to$his$regular$wage$plus$at$least$thirty$percent$(30%)$thereof,$subject$to$the$provisions$of$this$
Book$on$the$payment$of$additional$compensation$for$work$performed$on$special$and$regular$holidays$and$on$rest$days.$
$
Section&8.&Hours(worked.$$In$determining$the$compensable$hours$of$work$of$hospital$and$clinic$personnel$covered$by$this$Rule,$the$pertinent$
provisions$of$Rule$1$of$this$Book$shall$apply.$
$
Section&9.&Additional(compensation.$$Hospital$and$clinic$personnel$covered$by$this$Rule,$with$the$exception$of$those$employed$by$the$
Government,$shall$be$entitled$to$an$additional$compensation$for$work$performed$on$regular$and$special$holidays$and$rest$days$as$provided$in$
this$Book.$Such$employees$shall$also$be$entitled$to$overtime$pay$for$services$rendered$in$excess$of$forty$hours$a$week,$or$in$excess$of$eight$
hours$a$day,$whichever$will$yield$the$higher$additional$compensation$to$the$employee$in$the$work$week.$
$
Section&10.&Relation(to(Rule(I.$$All$provisions$of$Rule$I$of$this$Book$which$are$not$inconsistent$with$this$Rule$shall$be$deemed$applicable$to$
hospital$and$clinic$personnel.$
$
&

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