Professional Documents
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2011 Bar Examinations in Labor Law - Part 1
2011 Bar Examinations in Labor Law - Part 1
A.
Constitutional Provisions
1.1.
1.2.
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 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.
2.
Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor
Code. Employees have the right to form, join or assist labor organizations for the purpose of collective
bargaining or for their mutual aid and protection. The constitutional right to self-organization is better
understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to
Organize), to which the Philippines is a signatory. [UST Faculty Union v. Bitonio, Jr., G.R. No. 131235,
November 16, 1999, 318 SCRA 185, Panganiban, J.] Workers and employers, without distinction
whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to
job organizations of their own choosing without previous authorization; [Standard Chartered Bank
Employees Union (NUBE) v. Confesor, G.R. No. 114974, June 16, 2004, 432 SCRA 308, 320-321] and
that workers' organizations shall have the right to draw up their constitution and rules and to elect their
representatives in full freedom, free from any interference from public authorities. [UST Faculty Union v.
Bitonio, Jr., supra]
Labor
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.
Women
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.
2.
Civil Code
Contract of Labor
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.
3.
Labor Code
3.1.
Article 3
3.2.
A.
Article 211
a.
To promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration, mediation and
conciliation, as modes of settling labor or industrial disputes;
b.
To promote free trade unionism as an instrument for the
enhancement of democracy and the promotion of social justice and development;
c.
To foster the free and voluntary organization of a strong and
united labor movement;
d.
To promote the enlightenment of workers concerning their rights
and obligations as union members and as employees;
e.
To provide an adequate administrative machinery for the
expeditious settlement of labor or industrial disputes;
f.
To ensure a stable but dynamic and just industrial peace; and
g.
a.
To ensure the participation of workers in decision and
policy-making processes affecting their rights, duties and welfare.
B.
To encourage a truly democratic method of regulating the relations
between the employers and employees by means of agreements freely entered
into through collective bargaining, no court or administrative agency or official
shall have the power to set or fix wages, rates of pay, hours of work or other terms
and conditions of employment, except as otherwise provided under this Code. (As
amended by Section 3, Republic Act No. 6715, March 21, 1989)
3.3.
Article 212
d. Article 255
Art. 255. Exclusive bargaining representation and workers
participation in policy and decision-making. The labor organization
designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be the exclusive representative of the employees
in such unit for the purpose of collective bargaining. However, an individual
employee or group of employees shall have the right at any time to present
grievances to their employer.
B.
Principle of Co-Determination
Art. 13.
Definitions.--xxx
xxx
(b)
"Recruitment and placement" refers to any act of canvassing,
enlisting, contracting, 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.
1.2.
Labor Code
Art. 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.
Sec. 6, RA 8042
Definitions.
xxx
xxx
xxx
(d)
"License" means a document issued by the Department of Labor
authorizing a person or entity to operate a private employment agency.
xxx
xxx
xxx
(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.
NOTES:
RECRUITMENT
AND PLACEMENT
LICENSE
AUTHORITY
It should be noted that the definition of recruitment and placement in Art. 13(b), does
not make any of the eleven (11) acts enumerated therein illegal per se. What makes it a case of
illegal recruitment is when any of said recruitment activities are undertaken by non-licensees
or non-holders of authority. [Art. 38(a)] Such that an employee, who introduces an applicant
to owner-employer agency, committed an act of referral, a recruitment activity. There is an
illegal recruitment when one gives the impression of having the ability to send a worker abroad.
[People vs. Goce, 247 SCRA 780, 789 (1995)]
A non-licensee means a person, corporation or entity to which the labor secretary has
not issued a valid license or authority to engage in recruitment and placement; or whose license
or authority has been suspended, revoked, or cancelled by the POEA or the labor secretary. A
licensee authorizes a person or an entity to operate a private employment agency, while authority
is given to those engaged in recruitment and placement activities. [Rodolfo vs. People, G.R. No.
146964, August 10, 2006]
When a person or entity, in any manner, offers or promises for a fee employment to two
or more persons, that person or entity shall be deemed engaged in recruitment and placement.
[People vs. Laogo, G.R. No. 176264, January 10, 2011, Villarama, J.]
1.2.2.
Offender is:
(a)
a non-licensee or a non-holder of authority; or
(b)
a licensee or holder of authority;
(2)
(a)
Non-licensee/non-holder of authority commits any of the 24 infractions (11 in
Art. 13(b), and 13 in Sec. 6, RA 8042)
(b)
Licensee/holder of authority commits any of the 14 infractions under Sec. 6,
RA 8042.
BUT,
RA 8042 removed this distinction and redefined illegal recruitment as follows:
charging an amount greater than that specified;
publishing false notice in relation to recruitment;
giving away false information or any act of misrepresentation for securing a license/authority;
inducing a worker to quit present work in place of another
UNLESS, to free the worker from oppressive terms and conditions;
(e)
influencing any person/entity not to employ a worker who has not applied through the formers
agency;
(f)
recruiting workers in jobs that are harmful to public health or morality;
(g)
obstructing inspection by the Secretary of Labor;
(h)
failing to file reports as required by the Secretary;
(i)
substituting or altering DOLE-approved employment contracts;
(j)
becoming a Board member of a travel agency, directly or indirectly;
(k)
withholding applicant workers travel documents for monetary considerations;
(l)
failing to actually deploy a worker without a valid reason; and
(m)
in case of non-deployment of worker without his fault, failing to reimburse expenses the latter
incurred.
(a)
(b)
(c)
(d)
In sum,
a licensee can be liable only for 13 illegal recruitment/prohibited acts (under Sec. 6, RA
8042), UNLESS he conspires with a non-licensee in the commission of any of the illegal acts
in Art. 13(b).
Illegal recruitment is a matter of evidence. [People vs. Panis, 142 SCRA 664 (1986)]
SYNDICATE
3 or more conspirators
If only 1 victim, the burden of proof is on the accuser. But if there are 2 or more
victims, the accused is disputably presumed to have committed illegal recruitment. [Sec.
6, RA 8042, cited in People vs. Panis, supra]
1.2.7. Liabilities
SECTION 10.
Money claims.
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 be 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.
(a)
(b)
foreign employer
Theory of imputed knowledge
(
The so-called theory of imputed knowledge, that is, knowledge of the
agent is knowledge of the principal. [New Life vs. CA, G.R. No. 94071 March 31,
1992] For the liability of the agent to attach, this theory states that the agent knew
of and consented to the extension of period of employment. Otherwise, the
liability of the recruitment agency shall expire from the termination of the
worker's original contract. [SUNACE INTERNATIONAL MANAGEMENT vs.
NLRC, G.R. No. 161757, January 25, 2006, Carpio Morales, J.]
1.2.8. Pre-termination of contract of migrant worker
NOTES:
Rules on Repatriation of Overseas Workers
(1)
Without fault of the worker, his repatriation shall be borne by the local agency
and/or principal over the:
a.
b.
(2)
Repatriation due to the fault of migrant worker shall be borne by the migrant worker.
[Sec. 15, par. 1, RA 8042]
(3)
(4)
(5)
Repatriation of seafarer
POEA Memo Circular No. 55-96 provides that a seaman can be repatriated without
cause if the vessel arrives at a convenient port within 3 months before the expiration
of his contract, BUT only upon payment of:
a.
all his earned wages;
b.
leave pay for the entire contract;
c.
termination pay of 1 month basic salary, IF seaman has at least 10
months original contract. [PCL Shipping Phils. vs. NLRC, G.R. No. 153031,
December 14, 2006, Austria-Martinez, J.]
1.3.
Direct hiring
2.
10
2.1.
2.2.
Prohibited activities
2.3.
11
(c)
To develop and organize a program that will facilitate
occupational, industrial and geographical mobility of labor and provide
assistance in the relocation of workers from one area to another; and
(d)
To require any person, establishment, organization or institution
to submit such employment information as may be prescribed by the Secretary of
Labor.
Art. 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.
Art. 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.
NOTES:
The Supreme Court declared Art. 38, par. (c) unconstitutional and null and void,
stating that only a judge may issue warrants of search and arrest. [Hortencia Salazar vs.
Tomas D. Achacoso and Ferdie Marquez, G.R. No. 81510, March 14, 1990]
2.4.
12
Under the POEA Rules on Overseas Land-based Employment (2002), both the POEA
Administrator and DOLE Regional Director has the power to issue a CLOSURE ORDER
against an erring overseas recruitment and manning agency.
2 BUT, Under the new Omnibus Rules Implementing RA 10022 (amendment to RA 8042), it
is the POEA Administrator who has the authority to issue a CLOSURE ORDER upon
preliminary finding of guilt against an overseas recruitment agency. [Sec. 11]
HOWEVER,
Prior to the issuance of a CLOSURE ORDER, an investigation takes place whereby the POEA
Administrator may issue a preventive suspension upon the recommendation of the POEA
Director of LRO. [Sec. 9, Omnibus Rules implementing RA 10022]
Closure Order may be lifted upon filing a Motion before the POEA Director of LRO, which
motion shall be resolved by the POEA Administrator. [Sec. 18, Omnibus Rules Implementing
RA 10022]
b) Criminal Complaints involving Migrant Workers
ILLEGAL RECRUITMENT AS ECONOMIC SABOTAGE
Categories:
1. Illegal recruitment in large scale if committed against three or more
persons individually or as a group.
2. Illegal recruitment by a syndicate - if carried out by a group of three or
more persons conspiring and/or confederating with one another.
When only one complainant filed individual complaints, there is no illegal recruitment
in large scale BUT the three conspiring recruiters can be held guilty of illegal recruitment by a
syndicate. [People vs. Hernandez, K. Reichl, and Y.G. de Reichl, G.R. Nos. 141221-36,
March 7, 2002.]
Where illegal recruitment is proved but the elements of large scale or syndicate
are absent, the accused can be convicted only of simple illegal recruitment.
VENUE: The RTC of the province or city where the offense was committed or where
the offended party actually resides at the time of the commission of the offense.
C.
LABOR_STANDARDS
13
1.
Hours of Work
Labor Code
Art. 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;
and (b) all time during which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be counted as
hours worked.
Omnibus Rules
Book III, Rule 1
Sec. 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 employer's premises or to be at a prescribed workplace; and
(b)
All time during which an employee is suffered or permitted to
work.
Sec. 4.
Principles in Determining Hours WorkedThe 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
to his employer, regardless of whether or not such hours are spent in productive
labor or involve physical or mental exertion;
(b)
An employee need not leave the premises of the workplace in order
that his rest period shall not be counted, it being enough that he stops working,
may rest completely and may leave his workplace, to go elsewhere, whether
within or outside the premises of his workplace;
(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;
(d)
The time during which an employee is inactive by reason of
interruptions in his work beyond his control shall be considered time either if the
imminence of the resumption of work requires the employee's presence at the
place of work or if the interval is too brief to be utilized effectively and gainfully in
the employee's own interest.
Sec. 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.
(b)
An employee who is required to remain on call in the employer's
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.
Sec. 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 employee's regular working hours;
(b)
attendance is in fact voluntary; and
(c)
the employee does not perform any productive work during
such attendance.
1.1.
Coverage/Exclusions
14
15
Government employees
Civil Service Law
Magna Carta of Public Health Workers (R.A. 7305)
(2)
Managerial employees
(a)
(b)
(c)
managerial employees
officers of the managerial staff
members of the managerial staff
NOTES:
For purposes of the exemption, managerial employees are those whose primary duty
consists of the management of the establishment in which they are employed or of a
department or subdivision. [Pearanda vs. Baganga Plywood Corp., G.R. No. 159577, May
3, 2006]
A purported manager whose function is simply to carry out the companys orders, plans
and policies is not a managerial employee. If their functions, duties and responsibilities do not
bear relation with the management of the establishment, nor participate in the formulation of its
policies, nor in the hiring and firing of its employees, then they are NOT managerial employees.
[NAWASA vs. NWSA Consolidated Unions, 11 SCRA 766 (1964)]
Managerial employee is not required to report at a fixed hour or to keep fixed hours of
work. [International Pharmaceuticals, Inc. Vs. NLRC, 287 SCRA 213 (1998)]
A Vice President/Plant Manager is a managerial employee, and therefore excluded from
the coverage of Title I, Book III, of the Labor Code. [John McLeod vs. NLRC, G.R. No.
146667, January 23, 2007]
Includes managerial staff
While not considered as managerial employees, officers and members of the
managerial staff are likewise exempted from the coverage of Article 82. Managerial staff are
those with the following duties and responsibilities:
(1)
(2)
(3)
(a)
regularly and directly assist a proprietor/managerial employee, whose
primary duty consists of the management of the establishment; OR
(b)
execute under general supervision work along specialized or technical
lines requiring special training, experience or knowledge; OR
(c)
execute under general supervision special assignments and tasks;
(4)
who do NOT devote more than 20% of their hours of work in a week to
activities which are not directly and closely related to management of the
establishment. [Pearanda vs. Baganga Plywood Corp., supra, citing
Section 2(c), Rule I, Book III of the Omnibus Rules and Regulations]
An employee tasked to supervise the engineering section of the plant, and whose work
involved overseeing the operation of the machines and the performance of the workers in said
section, is considered part of the managerial staff. His functions require the use of discretion
and independent judgment to ensure the proper functioning of the plant. The term FOREMAN
implies that he was the representative of management over the workers, and the operation of
the department. [Pearanda vs. Baganga Plywood Corp., supra] Likewise, an employee
with powers of supervisor/manager is part of the managerial staff. [Quebec vs. NLRC, 301
SCRA 627 (1999)]
N.B.:
a.
16
b.
c.
Service incentive leave pay [Art. 95(b]; Quebec vs. NLRC, supra]
Holiday pay (Art. 94)
(3)
Field Personnel
In Union of Filipro Employees vs. Vivar, Jr., [(205 SCRA 200 (1992)], it was held that the phrase
whose actual hours of work in the field cannot be determined with reasonable certainty must be read in
conjunction with the meaning of field personnel in Rule IV, Book III of the Implementing Rules, whereby
field personnel and other employees whose time and performance is unsupervised by the employer .
[Mercidar Fishing Corp. vs. NLRC, 297 SCRA 440 (1998)] The term other employees should NOT be
understood as a separate classification of employees who are not covered under Article 82 of the Labor
Code, rather should be regarded as an amplification of the interpretation of the definition of field personnel
as those whose actual hours of work in the field cannot be determined with reasonable certainty. [Auto
Bus Transport vs. Bautista, 458 SCRA 578 (2005)]
N.B.:
Field Personnel are NOT entitled to the following benefits:
a.
Overtime pay; [Union Filipro Employees vs. Vivar, Jr., supra, citing San Miguel Brewery
vs. Democratic Labor Organization, 8 SCRA 613 (1963)]
b.
Service incentive leave pay [Sec. 1, Rule V, Implementing Rules; Auto Bus Transport
vs. Bautista, 458 SCRA 578 (2005)]
c.
13th month pay [PD 851]
(4)
(5)
The definition of domestic servant or househelper contemplates one who is employed in the
employer's home to minister exclusively to the personal comfort and enjoyment of the
employer's family. [Apex Mining Company vs. NLRC, 196 SCRA 251 (1991)]
VSEV: HOWEVER, a better reading of the foregoing should be
services rendered in the employer's HOME for the personal comfort
of the members of the household, not necessarily of the family.
N.B.:
Domestic servants are NOT entitled to the following benefits:
a.
Overtime pay;
17
b.
c.
d.
Holiday pay;
Premium pay for holiday and rest days
Service Incentive Leave pay. [Ultra Villa Food Haus vs. Geniston, supra at 24]
(6)
Piece Workers
Piece workers are those workers paid by results. [Art. 82]
And while the mode of compensation is on piece-rate basis, they are considered as
regular employees for as long as the nature of the tasks they perform are necessary and
desirable in the usual business of the employer, and their employment is not dependent on
specific projects or season. [Labor Congress vs. NLRC, 290 SCRA 509 (1998); in rel. Art.
280, LC; see also: Villuga vs. NLRC, 225 SCRA 537 (1993)] As such, they are entitled to:
a.
minimum wage
b.
ECOLA
c.
13th month pay [Makati Haberdashery, Inc. vs. NLRC, 179 SCRA
448 (1989)]
They are NOT entitled to:
a.
Overtime pay, if their output rates are in accordance with the
standards prescribed under Section 8, Rule VII, Book III; [Labor
Congress vs. NLRC, supra]
b.
Service Incentive Leave pay; [Makati Haberdashery, supra]
1.2.
Art. 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 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.
NOTES:
Article 83 of the Labor Code provides that the normal hours of work shall NOT
exceed 8 hours a day, which period does not include meal break. [PAL vs. NLRC, 302
SCRA 582 (1999)]
What constitutes Hours Worked?
(Mnemonic) DWSP
-
when on DUTY
when at the WORKPLACE
when SUFFERED to work
when PERMITTED to work [PAL vs. NLRC, 302 SCRA 582 (1999)]
to safeguard health
18
minimize unemployment as employer is forced to resort to more shiftings. [NAWASA vs. NWSA
Consolidated Unions, 11 SCRA 766 (1964)]
Services performed by an employee exceeding the normal 8-hour work period entitles
him to extra compensation. This extra compensation is not subject to estoppel or laches, and
allows the employee to claim such extra compensation for past overtime work so rendered.
[Manila Terminal Co. vs. CIR, G.R. No. L-4148, July 16, 1952]
BUT, shall only be applicable in industries not exempted by law to pay said additional
compensation, such as public utilities and government agencies and instrumentalities,
performing governmental functions. [NAWASA vs. NWSA Consolidated Unions, supra]
EXCEPT, when the company voluntarily agrees to pay its employees additional
compensation for work performed in excess of 8 hours. The obligation of the company is no
longer by compulsion of law, but is based on contracts. [NAWASA vs. NWSA, supra]
A provision for a 6-day work week or 48 hours/week entitles an employee working on
the 6th day additional compensation of at least 30% of his regular wage, [Art. 83, 2nd par., LC]
BUT does not entail payment to health personnel full weekly salary (7 days), with 2 days
work-off considered as paid. A Department Order to this effect is considered void for want of
authority. [San Juan de Dios Hospital Employees Association-AFW/MA vs. NLRC, 282
SCRA 316 (1997)]
1.2.1.
Exceptions
(a)
Health Personnel
Labor Code
ART. 83.
Normal hours of work.xxx
Health personnel in cities and municipalities with a population of at least
one million (1,000,000) 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
of the service require 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 Article, health personnel shall include: resident physicians, nurses,
nutritionists, dietitians, pharmacists, social workers, laboratory technicians,
paramedical technicians, psychologist, midwives, attendants and all other
hospital or clinic personnel.
Omnibus Rules
Rule I-A
SEC. 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 1 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.
SEC. 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.
SEC. 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 hours in any one week.
xxx
xxx
xxx
19
SEC. 6.
Regular Working Days.The regular working days of
covered employees shall not be more than five days in a workweek. The
workweek 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
workday or workweek begins, provided that the change is not intended to evade
the requirements of this Rule.
While medical/health personnel are only required to perform work for five (5) days, this does not
mean that work performed for the week entitles them to a full weekly wage for 7 days. Full weekly wage
only arises if work performed for five (5) days amounted to 40 hours of work, consistent with the 8-hour
workday. [San Juan de Dios Hospital Employees Association-AFW/MA vs. NLRC, 282 SCRA 316
(1997)]
(b)
NOTES:
Parties are not prohibited from agreeing in a compressed workweek scheme, whereby regular
workweek is shortened but with longer work periods. For as long as employees voluntarily agree to work
for more than 8 hours a day in total in a week of which shall not exceed normal weekly hours of work. In
fact, Department Order No. 21 sanctions this kind of scheme, in consideration of the benefits that
employees may derive therefrom, i.e.,:
(1)
savings on costs of transportation, meals, and energy
(2)
greater efficiency of employees
(3)
lower rate of employee absenteeism
(4)
longer weekends is beneficial for rest, leisure, and time for the family. [Bisig
Manggagawa sa Tryco, et al. vs. NLRC, G.R. No. 151309, October 15, 2008]
See:
1.3.
1.4.
Meal Break
20
Omnibus Rules
Book III, Rule 1
Sec. 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:
(a)
Where the work is non-manual work in nature or does not involve
strenuous physical exertion;
(b)
Where the establishment regularly operates not less than sixteen
(16) hours a day;
(c)
In cases 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
(d)
Where the work is necessary to prevent serious loss of perishable
goods.
xxx
xxx
xxx
As a General Rule:
The 8-hour work period does not include the meal break. Nowhere in the law may it be inferred
that employees must take their meals within company premises. Employees are not prohibited from going
out of the premises as long as they return to their posts on time. [PAL v. NLRC, 302 SCRA 582 (1999)]
EXCEPT,
When employees are required to standby for emergency work during their 1-hour meal period and
their unavailability results in disciplinary action, their meal break should be considered as part of hours
worked. [Pan-American Airways, 1 SCRA 527 (1961)]
1.5.
There are special circumstances where employees, who although considered to be on forced
leave during the semestral break, such as full-time professors in a university, are still entitled to
compensation. Professors and teachers, during this period of time, are nevertheless burdened with
correcting papers, evaluating students, meeting deadlines, and submitting grading reports within a given
period, such that the semestral break could not be used effectively for the teacher's own purposes, and
thus, should be considered as compensable hours worked. [University of Pangasinan Faculty Union
vs. University of Pangasinan, 127 SCRA 691, 699 (1984)]
On another note, the meaning and scope of the term workplace determine whether the time
spent within work premises is considered hours worked.
(a)
A worker confined within the premises of a boat or a factory shop need not leave said
premises in order to enjoy his rest period, it being enough that he (1) cease to work, (2)
may rest completely, and (3) leave or may leave, at his will, the spot where he actually stays
while working, or to go somewhere else. In such cases, the period of rest shall not be
counted as hours worked. [Luzon Stevedoring vs. Luzon Marine Department Union, G.R.
No. L-9265, April 29, 1957]
(b)
A worker who continues to report for work at the employer's previous workplace
may not be compensated, if he is aware that the employer's workplace has been transferred
to another area. [Aklan Electric Cooperative vs. NLRC, 323 SCRA 258 (2000)]
(c)
A worker who is required to assemble at a designated area at least 30 minutes prior
to the start of their scheduled working hours is not compensated when he is not subject to the
absolute control of the employer during this 30-minute assembly time. [Arica vs. NLRC, 170
SCRA 776 (1989)]
BUT,
21
A driver who is also required to pick up other employees at certain specified points on
his way to the workplace, and likewise drops them off on his way home is entitled to overtime
compensation, since the assigned task of fetching and delivering employees to the worksite is
primarily for the benefit of the employer. [Rada vs. NLRC, 205 SCRA 69 (1992)]
See:
1.6.
Overtime work
If a worker should incur in undertime during his regular daily work, it should not
be set off by his overtime, for that would place the schedule of working hours dependent
on the employee. [NAWASA vs. NWSA Consolidated Unions, supra]
22
1.7.
Night Work
Night-shift work is more onerous and burdensome, and thus deserves more
remuneration than their day time counterparts. There is no dispute that ordinary and
regular normal work is performed in the daytime, and that night work is exceptional and is
only justified in unavoidable circumstances necessary for the business of the employer.
[Shell Company vs. NLU, 81 Phil. 315 (1948)]
1.8.
1.
Law
CBA
If CBA is
silent,
2.
Cash Wage is the regular wage used in computing night shift and
overtime work [the only premium standards in Chapter I, Title I, Book III
of the Labor Code] [limited only to night shift and OT (Arts. 86 & 90)
3.
2.
Wage
Wages
-
2.1.
23
The general no work, no pay rule should prevail with respect to employees wages
during the suspension period, subject to existing CBA terms on leave credits and similar
benefits of employees. The suspension was due to environmental causes that can affect the
health and safety of those within the vicinity of Marcopper, particularly its employees. [ National
Mines and Allied Workers Union (NAMAWU) vs. Marcopper Mining Corporation, G.R. No.
174641, November 11, 2008]
2.2.
Coverage/Exclusions
Employees are entitled to be paid the minimum wage regardless whether they are
regular or non-regular employees, except for those employees enumerated in Section 3, Rule
VII of the Omnibus Rules implementing the Labor Code. [SLL International Cables
Specialist, et al. vs. NLRC, et al., G.R. No. 172161, March 2, 2011, Mendoza, J.]
Cooperatives Still Exempted from Minimum Wage Law
In view of the foregoing, we hold that cooperatives may still be exempted from the
statutory minimum wage. [Benguet Electric Cooperative v. Ferrer-Calleja, G.R. No. 79025,
December 29, 1989]
2.3.
Facilities vs supplements
The term facilities, says the Implementing Rule, shall include articles or services for the
benefit of the employee or his family but shall not include:
tools of the trade or articles or service primarily for the benefit of the
employer; or
An employer cannot simply deduct from the employee's wages the value of the board
and lodging without satisfying the ff. requisites: (1) proof that such facilities are
customarily furnished by the trade/business of the employer; (2) voluntary acceptance
in writing by the employees of the deductible facilities; and (3) proof of the fair and
reasonable value of the facilities charged. [S.I.P. Food House, supra; SLL
International, supra]
CASE:
Although it is quite easy to comprehend board and lodging, it is not so with facilities. Thus,
Sec. 5, Rule VII, Book III, of the Rules Implementing the Labor Code gives meaning to the term as
including articles or services for the benefit of the employee or his family but excluding tools of the trade or
articles or service primarily for the benefit of the employer or necessary to the conduct of the employer's
business. The Staff/Manager's allowance may fall under lodging but the transportation and Bislig
allowances are not embraced in facilities on the main consideration that they are granted as well as the
Staff/Manager's allowance for respondent PICOP's benefit and convenience, i.e., to insure that
petitioners render quality performance. In determining whether a privilege is a facility, the criterion is not
so much its kind but its purpose. [States Marine Corporation vs. Cebu Seamen's Association, Inc.,
No. L-12444, 28 February 1963, 7 SCRA 294] That the assailed allowances were for the benefit and
24
convenience of respondent company was supported by the circumstance that they were not subjected to
withholding tax. [Liduvino M. Millares, et al. vs. NLRC, et al., G.R. No. 122827, March 29, 1999, 2nd
Division, Bellosillo, J.]
2.4.
Art. 97.
Definitions.
(f)
Wage paid to any employee shall mean the remuneration or
earnings, however designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece, or commission basis, or other
method of calculating the same, which is payable by an employer to an employee
under a written or unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered and includes the fair and
reasonable value, as determined by the Secretary of Labor, of the board, lodging,
or other facilities customarily furnished by the employer to the employee. Fair
and reasonable value shall not include any profit to the employer or to any
person affiliated with the employer.
NOTES:
The distinction between salary and wage in Gaa was for the purpose of Article 1708 of
the Civil Code which mandates that, [t]he laborers wage shall not be subject to execution or
attachment, except for debts incurred for food, shelter, clothing and medical attendance. In
labor law, however, the distinction appears to be merely semantics. Paramount and
Evangelista may have involved wage earners, but the petitioner in Espejo was a General
Manager with a monthly salary of P9,000.00 plus privileges. That wage and salary are
synonymous has been settled in Songco v. NLRC. [Equitable Banking Corp v. Ricardo
Sapac, 490 SCRA 381 (2006)]
2.5.
Wage distortion
25
2.6.
CASE:
P.I. Manufacturing, Incorporated vs.
P.I. Manufacturing Supervisors and Foreman Association and the National Labor Union,
G.R. No. 167217, February 4, 2008.
There is wage distortion based on the prevailing rates of the supervisors and foremen (before the
increase in wages based on the CBA). If RA 6640 would be implemented, the gaps existing between and
among the wage rates of all the employees of petitioner would have been substantially altered and
reduced.
In the present case, only three (3) of the union members are receiving wages below P100.00, thus
entitled to the increase. To direct petitioner to grant an across-the-board increase to all of them would be
harsh and unfair to the employer.
However, due to the CBA provision, providing for increased monthly salaries of supervisors and
foremen, such has re-established and broadened the gap, and significantly doubled the P100.00 increase
under RA 6640, which in effect substantially complied with the wage increase under RA 6640. The union
is estopped from claiming wage increase under RA 6640 when it forged the CBA with petitioner after the
law took effect.
xxx
xxx
xxx
xxx [W]age distortion means the disappearance or virtual disappearance of pay differentials
between lower and higher positions in an enterprise because of compliance with a wage order.
The apparent intention of the law is only to upgrade the salaries or wages of the employees
specified therein. (Manila Mandarin Employees Union v. NLRC, G.R. No. 108556, November 19, 1996,
264 SCRA 320)
2.7.
Non-diminution of benefits
Since under the CBA, overtime pay was not given to each employee consistently, deliberately
and unconditionally, but as compensation for additional services rendered, the employer's change
of schedule which is not prohibited by the CBA, resulting in lesser overtime work, does not
constitute a diminution of benefits under Art. 100 of the Labor Code [Manila Jockey Club
Employees Labor Union-PTGWO vs. Manila Jockey Club, Inc., 517 SCRA 707, 712-713, March
7, 2007]
There is diminution of benefits when it is shown that:
(a)
The grant or benefits is founded on a policy or has ripened into a practice over a long
period;
(b)
(c)
The practice is not due to error in the construction or application of a doubtful or difficult
question of law; and
26
(d)
Employees are protected by law from unwarranted practices that diminish an employee's
compensation without his knowledge and consent [Pacific Banking Corporation vs. Clave,
128 SCRA 112]
2.8.
Art. 110.
Worker preference in case of bankruptcy. In the
event of bankruptcy or liquidation of an employers business, his workers shall
enjoy first preference as regards their wages and other monetary claims, any
provisions of law to the contrary notwithstanding. Such unpaid wages and
monetary claims shall be paid in full before claims of the government and other
creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March
21, 1989)
NOTES:
Worker Preference (in case of Bankruptcy)
*
For unpaid wages and other monetary claims, even against gov't. claims. (See Folder of
Jurisprudence)
*
Cf.
with PD 902-A, Secs. 5 & 6 on Rehabilitation. [Rubberworld Phils. vs. NLRC,
April 14, 1999]
*
*
Receiver takes hold of assets for the benefit of creditors with possibility of
continued operation.
*
Liquidator takes hold of assets to dispose according to priorities. Operations
stop. Both receivership/liquidation personality of corp. continues [PVB v. NLRC, Oct. 26, 1999]
Workers claims for unpaid wages and monetary benefits cannot be paid outside of a
bankruptcy or judicial liquidation proceedings against the employer. [Barayoga vs. Asset
Privatization Trust, 473 SCRA 690]
2.9.
Art. 112.
Non-interference in disposal of wages.
No
employer shall limit or otherwise interfere with the freedom of any employee to
dispose of his wages. He shall not in any manner force, compel, or oblige his
employees to purchase merchandise, commodities or other property from any
other person, or otherwise make use of any store or services of such employer or
any other person.
Art. 114.
Deposits for loss or damage.
No employer shall
require his worker to make deposits from which deductions shall be made for the
reimbursement of loss of or damage to tools, materials, or equipment supplied by
the employer, except when the employer is engaged in such trades, occupations
or business where the practice of making deductions or requiring deposits is a
recognized one, or is necessary or desirable as determined by the Secretary of
Labor and Employment in appropriate rules and regulations.
Art. 115.
Limitations.
No deduction from the deposits of an
employee for the actual amount of the loss or damage shall be made unless the
employee has been heard thereon, and his responsibility has been clearly shown.
Art. 116.
27
28
a) Insurance Premium
b) Union dues 241 [o]; 248 [e]
c) Authorized by law.
- Check-off authorized by Employer requires written authorization from employee.
2.11.
Art. 111.
Attorneys fees.
(a)
In cases of unlawful withholding of wages, the culpable party may
be assessed attorneys fees equivalent to ten percent of the amount of wages
recovered.
(b)
It shall be unlawful for any person to demand or accept, in any
judicial or administrative proceedings for the recovery of wages, attorneys fees
which exceed ten percent of the amount of wages recovered.
NOTES:
Attorney's Fees
a) Extraordinary concept awarded by court;
10% against culpable party for unlawful w/holding of wages;
*
Art. 111(a) is extraordinary attorney's fees. It does not require proof that the employer
acted with malice or bad faith in withholding the wage. Proof that lawful wages were not paid
is enough [PAL Shipping Phils., Inc., et al. vs. NLRC, et al. [G.R. 153031, Dec. 14, 2006]
b) Ordinary concept paid by client to a lawyer as reasonable compensation;
10% for lawyer in recovery of wages cases.
*
The award of attorney's fees, though not prayed for, is sanctioned by law and must be
upheld [Marivel Trading, Inc. vs. NLRC, 525 SCRA 708, 733 (2007).
Rules:
(1)
In actions for (1) recovery of wages or (2) where an employee was forced to litigate
and thus incurred expenses to protect his rights and interests, a maximum award of ten percent
(10%) of the monetary award by way of attorney's fees is legally and morally justifiable under
Art. 111 of the Labor Code. Xxx
Forced to litigate recovery of wages basics of attorneys fees [Rutaquio vs. NLRC, (Oct. 19,
1999); Marsaman Manning Agency vs. NRLC, (Aug. 25, 1999)
(2)
No attorneys fees when complaint is represented by PAO Lambo vs. NLRC, G.R.
No. 111042, Oct. 26, 1999, 317 SCRA 420.
(3)
29
(a)
The demand for living wages;
(b)
Wage adjustment vis--vis the consumer price index;
(c)
The cost of living and changes or increases therein;
(d)
The needs of workers and their families;
(e)
The need to induce industries to invest in the countryside;
(f)
Improvements in standards of living;
(g)
The prevailing wage levels;
(h)
Fair return of the capital invested and capacity to pay of employers
(i)
Effects on employment generation and family income; and
(j)
The equitable distribution of income and wealth along the
imperatives of economic and social development.
3.
Rest Day
3.1.
NOTES:
Weekly Rest Periods
Weekly rest period of not less than 24 hours after every 6 consecutive normal work days.
(b)
(c)
Worked:
Regular Holiday + Rest day
Special day
Special day + Rest day
=
=
230%
[Arts. 93(a) & 94(b)]
130% [Art. 94(c)]
150%
[Art. 93(c), where
such refers to special day]
30
For work on Sundays and legal holidays, the employer must pay:
1.
a)
regular remuneration, or 100% of his daily wage; and
b)
an additional sum of at least 25% of the regular remuneration,
which shall be regarded as the premium pay
2.
a Monthly-Paid Employee:
a)
IF the remuneration is included in his salary, only the 25%
premium pay can be claimed; and
b)
3.2.
3.3.
Art. 92. When employer may require work on a rest day. The
employer may require his employees to work on any day:
(a)
In case of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other
disaster
or
calamity to prevent loss of life and property, or imminent danger to public safety;
(b)
In cases of urgent work to be performed on the machinery,
equipment, or installation, to avoid serious loss which the employer would
otherwise suffer;
(c)
In the event of abnormal pressure of work due to special
circumstances, where the employer cannot ordinarily be expected to resort to
other measures;
(d)
To prevent loss or damage to perishable goods;
(e)
Where the nature of the work requires continuous operations and
the stoppage of work may result in irreparable injury or loss to the employer; and
(f)
Under other circumstances analogous or similar to the foregoing
as determined by the Secretary of Labor and Employment.
NOTES:
Grounds for compulsory rest day work (6 grounds)
(a)
impending emergency (fortuitous event)
(b)
urgent work on machinery, etc.
(c)
abnormal pressure of work due to special circumstances
the employer cannot resort to other incomes
(d)
prevent loss or damage to perishable goods
(e)
nature of work requires continuous operations (irreparable loss)
(f)
analogous circumstances as determined by SOLE
[OT may be required when the country is at war/local or national emergency declared
by Congress/President (difference between rest day and OT)]
31
4.
Holidays
NOTE:
Regular Holiday Pay
Holiday pay
a)
b)
Exception:
In retail/service establishments regularly employing less than ten (10) employees
IMPORTANT:
Legal holiday falling on a Sunday creates no legal obligation on the part of the employer to pay
extra pay.Wellington Investment and Manufacturing Corporation vs. Trajano, G.R. No. 114698, July 3,
1995.
Note: This ruling is no longer applicable in light of RA 9492, which moved holidays falling on a Sunday to
the next Monday.
Note also the ruling in Producers Bank vs. NLRC:
Apparently, the divisor of 314 is arrived at by subtracting all Sundays from the
total number of calendar days in a year, since Saturdays are considered paid rest
days, as stated in the inter-office memorandum. Thus, the use of 314 as a divisor
leads to the inevitable conclusion that the ten legal holidays are already included
therein. [Producers Bank of the Philippines vs. NLRC, et al., G.R. No.
100701, March 28, 2001, Third Division, Gonzaga-Reyes, J.]
The foregoing seems to follow Sec. 2, Rule IV, Book III of Implementing Rules that Employees
who are uniformly paid by the month irrespective of number of working days therein (but) with a salary not
less than minimum wage (worked or not) shall be presumed to be paid their holiday pay. But in IBAA
Employees Union vs. Inciong, 132 SCRA 663, the Supreme Court held that such rule is void. [In Villuga
vs. NLRC, 225 SCRA 537 and Union of Filipro Employees vs. Vivar, 205 SCRA 200, the Court held
that this IBAA ruling is prospective in application following the Operative Fact doctrine.
Closer to this case is the Chartered Bank Employees Association vs. Hon. Ople (G.R. L-44717, August 28,
1985) where the Court held that if all nonworking days are paid the divisor is 365. Thus, if divisor is 251
[365 52 Sundays = 313 52 Sat. = 261] 10 regular holidays is not paid otherwise 261 10 is 251. But if
261 is divisor, then regular holidays are considered paid [251 + 10 R.H. = 261].
*
This erroneous ruling in Producers Bank was followed, worsely, by SMC vs. Del Rosario (Dec.
13, 2005) where the Court held that a monthly paid regular employee, is not entitled to holiday pay
pursuant to Sec. 2, Rule IV, Book III of the Omnibus Rules Implementing the Labor Code.
Holidays are:
Note changes made in RA 9492
4.1.
32
holiday pay is a statutory benefit demandable under the law. Since a worker is entitled
to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same
date should not operate to reduce to nine the ten holiday pay benefits a worker is
entitled to receive. [Asian Transmission Corporation vs. Court of Appeals, G.R.
No. 144664, March 15, 2004]
AZUCENA:
Regular Holidays
1)
IF Holiday is the employee's Regular Workday, and
unworked 100%
If worked:
1st 8 hours 200% (the given hourly rate)
excess of 8 hours plus 30% of hourly rate
2)
Special Day
1)
IF unworked, no pay shall accrue unless otherwise provided in
a CBA, or established company practice to grant wages on this given day
2)
IF worked:
1st 8 hours plus 30% of the daily rate (100%)
excess of 8 hours plus 30% of hourly rate on that day
3)
IF it falls on employee's Rest Day, and worked
1st 8 hours plus 50% of the daily rate of 100%
excess of 8 hours plus 30% of hourly rate on that day
Special Working Holiday: The employee is entitled only to his basic
rate, if worked. No premium pay accrues on this day, but considered as ordinary
33
The Supreme Court in said case reasoned that since piece-rate workers are not
entitled to service incentive leave pay, because they fall under one of the exceptions in
Section 1(d), Rule V, Book III of the Implementing Rules, they being paid at a fixed amount
for performing work irrespective of time consumed, for this same reason, thus, they are
not entitled to holiday pay as well.
HOWEVER,
In the case of Lambo vs. NLRC, [317 SCRA 421 (1999)] the Supreme Court
recognized that there are two categories of employees paid by results:
(1)
those whose time and performance are supervised by the employer where
an element of control and supervision over the manner work is to be performed, especially if
worker performs his work in the company premises; and
(2)
those whose time and performance are unsupervised the employer's
control is over the result of the work only.
a.
Both classes of workers are paid per unit accomplished. Piece-rate payment is
generally practiced in garment factories where work is done in the company premises, while
payment on pakyao and takay basis is commonly observed in the agricultural industry, such
as in sugar plantations where the work is performed in bulk or in volumes difficult to quantify.
[Lambo vs. NLRC, supra at 426]
Petitioners Lambo, et. al. belong to the first category, i.e., supervised employees.
However, the Court further held The awards for overtime pay, holiday pay and 13th month
pay are in accordance with our finding that petitioners are regular employees [ibid., at 431433] forgetting that Art. 82 excluded workers who are paid by results from the coverage of
Title I, Book III of the Labor Code which includes overtime work (Art. 87) and holiday pay
(Art. 94).
In short, what the S.C. should have held is Lambo, et. al. are employees, their work
being supervised (control); but they are not entitled to overtime pay and holiday pay due to
Art. 82, Labor Code.
4.2.
b)
34
(2)
condition.
c) Grant of leave benefits in excess of what is provided here shall NOT be subject of
arbitration or any court action.
VSEV:
Convertible to cash.
d) V/L (as SIL) are among those incomes intended as replacements for regular income that
depend on days worked. [Davao Integrated Port Stevedoring Services vs. Abarquez, 220
SCRA 197] The vacation leave privilege was not intended to serve as additional salary, but as
a non-monetary benefit. To give the employees the option not to consume it with the aim of
converting it into cash at the end of the
year would defeat the very purpose of the vacation
leave. [PNCC
Skyway, supra]
VSEV:
e) Grant of V/L and S/L is not a standard of law, but a prerogative of management.
[Virginia Sugue vs. Triumph Intl. Phils., Inc., G.R. No. 164804, Jan. 30, 2009]
5.2.
35
employee by the employer upon receipt of satisfactory proof of such payment and
legality thereof; and
(f) That if an employee member should give birth or suffer miscarriage
without the required contributions having been remitted for her by her employer
to the SSS, or without the latter having been previously notified by the employer
of the time of the pregnancy, the employer shall pay to the SSS damages
equivalent to the benefits which said employee member would otherwise have
been entitled to.
5.2.3. Availment
The maternity benefits provided under this section shall bepaid only for the first
four (4) deliveries or miscarriages;
5.3.
RA 8187 grants paternity leave of 7 days with full pay to all married male employees in the private
and public sectors. Paternity leave is available only for the first four deliveries of the legitimate spouse with
whom the husband is cohabiting. The purpose of paternity leave is to enable the husband to lend support
to his wife during the period of recovery and/or in the nursing of the newly-born child.
5.3.1. Coverage
SECTION 2. xxx
every married male employee in the private and
public sectors shall be entitled to a paternity leave of seven (7) days with full pay
for the first four (4) deliveries of the legitimate spouse with whom he is
cohabiting. The male employee applying for paternity leave shall notify his
employer of the pregnancy of his legitimate spouse and the expected date of
such delivery.
5.3.3. Availment
5.4.
Parental Leave
5.4.1. Coverage
considered Solo Parent:
You are a parent left alone with the responsibility of parenthood because of the death of
your spouse.
36
You are a parent left alone with the responsibility of parenthood because of any physical
and/or mental incapacity of your spouse as certified by a public medical practitioner.
You are a parent left alone with the responsibility of parenthood because you have legally
separated from your spouse or because you have been separated for at least one year and
your child is in your custody.
You are a parent left alone with the responsibility of parenthood because your marriage was
annulled by a court or a church decree, and your child is in your custody.
You are a parent left solo or alone with the responsibility of parenthood because your
spouse abandoned you for at least one year.
You are a parent left solo or alone with the responsibility of parenthood because your
spouse is detained or is serving sentence for a crime for at least one year.
You are an unmarried mom or dad who has preferred to keep and rear your child yourself,
instead of having others care for them or give them up to a welfare institution.
You solely provide parental care and support to a child or children.
You assume the responsibility of head of the family as a result of the death, abandonment,
disappearance or prolonged absence of the children's parents or solo parent.
You are a victim of rape and/or other crimes against chastity, have given birth to a child as a
result and have decided to keep and raise your child.
5.4.3. Availment
5.5.
Leave available to an Employee (not only for women) who are victims of violence,
either physical, sexual or psychological.
A requirement to apply for the battered woman leave is a certification obtained from the Barangay
Captain or Kagawad or prosecutor or the clerk of court that an action based on R. A. 9262 has
been filed and is pending.
The use of the ten-day leave is at the option of the employee.
It shall be used for the days that she need to attend to medical and legal concerns.
Leaves not availed of are non-cumulative and not convertible to cash. Indeed, the battered woman
leave is useful for victims of violence. Lastly, this law is only applicable in the Philippines.
5.5.3. Availment
6.
Leave of up to ten days in addition to other paid leaves under the Labor Code, or other
laws.
Service Charges
37
Art. 96.
Service Charges. All service charges collected by
hotels, restaurants and similar establishments shall be distributed at the rate of
eighty-five percent (85%) for all covered employees and fifteen percent (15%) for
management. The share of the employees shall be equally distributed among
them. In case the service charge is abolished, the share of the covered employees
shall be considered integrated in their wages.
6.1.
Coverage
Article 96 and its implementing rule (Rule VI, Book III), apply only to establishments collecting
service charges, such as hotels, restaurants, lodging houses, night clubs, cocktail lounges, massage
clinics, bars, casinos, and gambling houses, and similar enterprises, including those entities operating
primarily as private subsidiaries of the government. [Sec. 1, Rule VI, Book III]
6.2.
Exclusion
NOTES:
Tip, not normally part of salary, it being paid by customer [Ace Navigation Co.,
Inc. vs. Court of Appeals, 338 SCRA 70]
6.3.
Distribution
Supervisors are considered as rank-and-file per Sec. 2, Rule VI, as they are not
managerial in Art. 212(M)
In case the service charge is abolished, the share of the covered employee shall
be considered integrated in their wages
6.4.
Integration
AZUCENA:
TIPS are handled similarly as service charges.
If a restaurant or similar establishment does not collect service
charges, but has a practice or policy of monitoring and pooling the tips
given by customers, the pooled tips should be accounted for and
distributed in the same manner as the service charges. In many
restaurants, a waiter must drop in a tip box the tips he received;
otherwise, he commits tip pocketing, a serious offense of dishonesty
that may cost him his job.
7.
Concept:
Benefit a 13th month pay for employees whose salary was not more than
P1,000.
Implementing Rules dated December 22, 1975 provided for who are covered vs. whose
who are not covered, issued by then Sec. Blas Ople.
38
7.1.
Coverage
(1)
all rank and file employees
(2)
regardless of their designation or employment status; and
(3)
irrespective of the method by which their wages are paid, provided they have worked
for at least 1 month during a calendar year, became covered employees.
(1 mo. is
qualifying requirement. Include regular benefits only after one has qualified). 1 month here is
not necessarily 30 worked days. I should be calendar month, so that those who worked only
for 20 days, for being daily paid employee, is entitled. Otherwise, the 1 year would be short of
48 days (if 6 working days) on short of 96 days (if 5 working days a year).
Who are covered -a) Commission paid employees?
1) Purely commission NO
2) Guaranteed wage + commission YES
[PACIWU (TUCP) vs. NLRC, 247 SCRA 256, 260 (1995)]
b)
c)
Private school teachers YES, regardless of months taught - Provided taught at least 1
month
7.2.
Managerial employees are not entitled to 13 th month pay as per Memorandum Order No. 88, 13 th
month pay has mandatory effect only on all rank and file employees [Serafin Quebec, Jr. vs.
NLRC, et al., G.R. No. 123184, January 22, 1999
7.3.
Where an employer pays less than 1/12 of the employee's basic salary, the employer shall pay the
difference. [Framanlis Farms, Inc. vs. Minister of Labor, G.R. Nos. 72616-17, March 8, 1989]
Thus, if he worked only from January up to September, his proportionate 13 th month pay should be
equivalent to 1/12 of the total basic salary he earned during that period. [ International School of Speech
vs. NLRC and M.C. Mamuyac, G.R. No. 112658, March 18, 1995]
39
Difference on how to compute the 13th month pay does not justify a strike; in other words, it is a
nonstrikeable issue and a strike held on that ground is an illegal strike.
7.4.
If the commissions may properly be considered part of the basic salary, they should be
included in computing the 13th month pay. If the commissions are not integral part of the
basic salary, then they should be excluded. What commissions are part of the salary and what
commissions are not, are illustrated respectively in the Philippine Duplicators' and the BoieTakeda's types of commission. That of Philippine Duplicators is wage or sales percentage
type which should be included in the 13 th month pay computation, while that of Boie-Takeda is
profit-sharing or bonus type which may be excluded.
- vs -
the 13th month pay of the bus drivers and conductors who are paid a fixed or guaranteed minimum
wage in case their commissions be less than the statutory minimum, and commission only in case
where the same is over and above the statutory minimum, must be equivalent to one-twelfth (1/12)
of their total earnings during the calendar year. [Phil. Agricultural Commercial and Industrial
Workers Union (PACIWU)-TUCP vs. NLRC and Vallacar Transit, Inc., G.R. No. 107994, August
14, 1995)]
7.5.
But if the CBA did provide for a bonus in graduated amounts depending on the length of service of
the employee, the intention is clear that the bonus provided in the CBA was meant to be in addition
to the legal requirement. [Universal Corn Products vs. NLRC, G.R. No. 60337, August 21, 1987]
Ruling: The bonus under the CBA is an obligation by the contract between the management and
workers while the 13th month pay is mandated by law.
Under the circumstances, the 7-day bonus is in addition to the legal requirement.
But as it is, the provision for the continued payment of a year-end bonus was incorporated in the
CBA without any qualification, from which the only logical conclusion that could be derived is that
PAL intended to give the members of ALPAP a year-end bonus in addition to its obligation to grant
a thirteenth-month pay. [Philippine Airlines, Inc. (PAL) vs. NLRC & Airline Pilots Association of the
Philippines (ALPAP), etc., G.R. No. 114280, July 26, 1996]
Rules:
Managerial employees are not entitled to 13 th month pay as per Memorandum Order No. 88,
13th month pay has mandatory effect only on all rank and file employees. [Serafin Quebec, Jr.
vs. NLRC, et al., G.R. No. 123184, January 22, 1999]
Piece rate workers are entitled to 13 th month pay [Mark Roche International and/or
Edmundo Dayot vs. NLRC, et al., G.R. No. 123825, August 31, 1999].
Christmas gift is not christmas bonus, milling bonus, amelioration bonus, year-end
productivity bonus. It cannot therefore be considered as equivalent of 13 th month pay. [UST
Faculty Union vs. NLRC, 190 SCRA 215, Oct. 2, 1990]
13th month pay and other similar benefits is an exclusion from the gross income,
provided it must not be more than P30,000.00. The Secrtary of Finance, however, may
increase the ceiling of P30,000.00, upon recommendation of the Commissioner, after
considering, among others, the effect or the same of the inflation rate at the end of the
taxable year. [Sec. 32(7), NIRC]
An employee who has been separated from service before the time for payment
of the 13th month pay is entitled to this monetary benefit in proportion to the length of time
he worked during the year, reckoned from the time he started working during the calendar
year up to the time of his separation. [Basay vs. Hacienda Consolacion, G.R. No.
40
8.
Women Workers
8.1.
b.
c.
(2)
(3)
d.
e.
41
1.
Sexual harassment is an imposition of misplaced superiority which is enough to dampen
an employee's spirit in her capacity for advancement. It affects her sense of judgment, it changes her life.
If for this alone, private respondent should be adequately compensated [Phil. Aeolus, Infra]
The gravamen of the offense in sexual harassment is not the violation of the employee's sexually
but the abuse of power by the employer. Any employee, male or female, may rightfully cry foul
provided the claim is well substantiated. Strictly speaking, there is no time period within which he or
she is expected to complain through the proper channels. The time to do so may vary depending
upon the needs, circumstances, and more importantly, the emotional threshold of the employee
[Philippine Aeolus Automotive United Corp., et al. vs. NLRC, et al., G.R. No. 124617, April 28, 2000,
Second Division, Bellosillo, J.]
2.
3.
committed when:
(1) the sexual favor is made as a condition in the hiring, or in the employment, re-employment or
continued employment of said individual or in granting said individual favorable compensation,
terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in
limiting, segregating or classifying the employee which in any way would discriminate, deprive or
diminish employment opportunities or otherwise adversely affect said employee.
(2) the above acts would impair the employee's rights or privileges under existing labor laws; or
(3) the above acts would result in an intimidating, hostile, or offensive environment for the
employee. [Section 3 (a), Republic Act No. 7877]
9.
42
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."
9.1.
9.2.
9.3.
43
10.
Employment of Househelpers
Art. 141. Coverage. This Chapter shall apply to all persons rendering
services in households for compensation.
xxx
xxx
xxx
10.1. Definition
"Domestic or household service" shall mean service in the employers
home which is usually necessary or desirable for the maintenance and enjoyment
thereof and includes ministering to the personal comfort and convenience of the
members of the employers household, including services of family drivers.
Minimum wage.
(a)
Househelpers shall be paid the following minimum wage rates:
(b)
Eight hundred pesos (P800.00) a month for househelpers in
Manila, Quezon, Pasay, and Caloocan cities and municipalities of Makati, San
Juan, Mandaluyong, Muntinlupa, Navotas, Malabon, Paraaque, Las Pias,
Pasig, Marikina, Valenzuela, Taguig and Pateros in Metro Manila and in highly
urbanized cities;
(c)
Six hundred fifty pesos (P650.00) a month for those in other
chartered cities and first-class municipalities; and
(d)
Five hundred fifty pesos (P550.00) a month for those in other
municipalities.
Provided, That the employers shall review the employment contracts of
their househelpers every three (3) years with the end in view of improving the
terms and conditions thereof.
Provided, further, That those househelpers who are receiving at least One
thousand pesos (P1,000.00) shall be covered by the Social Security System (SSS)
and be entitled to all the benefits provided thereunder. (As amended by Republic
Act No. 7655, August 19, 1993)
10.3. Termination
Art. 150. Service of termination notice. If the duration of the
household service is not determined either in stipulation or by the nature of the
service, the employer or the househelper may give notice to put an end to the
relationship five (5) days before the intended termination of the service.
44
11.
Labor Code
Employment of Homeworkers
ART. 153.
Regulation of Industrial Homeworkers.The
employment of industrial homeworkers and field personnel shall be regulated by
the Government through appropriate regulations issued by the Secretary of Labor
to ensure the general welfare and protection of homeworkers and field personnel
the industries employing them.
a.
Definition
DO No. 5
Regulations on Employment of Homeworkers
SEC. 2.
Definitions.
(a)
Industrial Homework is a system of production under which
work for an employer or contractor is carried out by a homeworker at his/her
home. Materials may or may not be furnished by the employer or contractor.
It differs from regular factory production principally in that, it is a
decentralized form of production where there is ordinarily very little supervision
or regulation of methods of work.
(b)
Industrial Homeworker means a worker who is engaged in
industrial homework.
b.
SEC. 6.
Payment for homework.Immediately upon receipt of
the finished goods or articles, the employer shall pay the homeworker or the
contractor or subcontractor, as the case may be, for the work performed less
corresponding homeworkers share of SSS, MEDICARE and ECC premium
contributions which shall be remitted by the contractor/subcontractor or
employer to the SSS with the employers share. However, where payment is
made to a contractor or subcontractor, the homeworker shall likewise be paid
immediately after the goods or articles have been collected from the workers.
c.
SEC. 8.
Deductions.No employer, contractor, or subcontractor
shall make any deduction from the homeworkers earnings for the value of
materials which have been lost, destroyed, soiled or otherwise damaged unless
the following conditions are met:
(a)
the homeworker concerned is clearly shown to be responsible for
the loss or damage;
(b)
the homeworker is given reasonable opportunity to show cause
why deductions should not be made;
(c)
the amount of such deduction is fair and reasonable and shall not
exceed the actual loss or damage; and
(d)
the deduction is made at such rate that the amount deducted does
not exceed 20% of the homeworkers earnings in a week.
45
12.
RA 7796
TESDA
SEC. 4.
Apprentice
A
person
undergoing
an
approved
apprenticeable occupation within a particular
period provided for in the apprenticeship
agreement. [Sec. 4(k), ibid.]
Apprenticeable Occupation
Apprenticeship Agreement
b)
c)
Learner
CASES:
The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship
agreement with an employer. One of the objectives of Title II (Training and Employment of Special
Workers) of the Labor Code is to establish apprenticeship standards for the protection of apprentices.
[Century Canning Corporation v. Court of Appeals, G.R. No. 152894, August 17, 2007]
HOWEVER,
46
In order to be an apprentice, the apprenticeship program the worker agreed to undergo should first
be approved by the DOLE (now transferred to TESDA) before he can be hired as an apprentice.
Otherwise, the person hired will be considered a regular employee. [Century Canning Corporation v.
Court of Appeals, supra]
BUT,
A prior approval obtained from DOLE (now transferred to TESDA) is a preliminary step towards its
final approval. Thus, pending final approval of the apprenticeship program upon a persons assumption of
work does not instantaneously give rise to employer-employee relationship. [Century Canning
Corporation v. Court of Appeals, supra]
Republic Act No. 7796, which created TESDA, has transferred the authority over
apprenticeship of the DOLE to the TESDA. RA 7796 emphasizes TESDAs approval of
the apprenticeship program as a pre-requisite for the hiring of apprentices. [Century
Canning Corporation v. Court of Appeals, supra]
The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices was
further emphasized by the DOLE with the issuance of Department Order No. 68-04 on 18 August 2004
xxx, which provides the guidelines in the implementation of the Apprenticeship and Employment Program
of the government, [and which] specifically states that no enterprise shall be allowed to hire apprentices
unless its apprenticeship program is registered and approved by TESDA. [Century Canning Corporation
v. Court of Appeals, supra]
There is no valid apprenticeship if:
(1)
the agreement submitted to TESDA was made long after the workers started
undergoing apprenticeship;
(2)
the work performed by the apprentice was different from those allegedly
approved by TESDA;
(3)
the workers undergoing apprenticeship are already skilled workers; or
(4)
the workers were required to continue undergoing apprenticeship beyond six
months. [Atlanta Industries, Inc., et al. vs. Sebolino, et al., G.R. No. 187320,
January 26, 2011, Brion, J.]
While the employer may argue that there is a need to train its employees through
apprenticeship, this phase should not be more than six months, and upon expiration of
the agreement, the retention of the employees for all intents and purposes, makes them
regular employees. A second apprenticeship for a second skill not mentioned in the
apprenticeship agreement is a violation of the Labor Code. [Atlanta Industries, supra]
Period of training
Type of Work
Qualifications
APPRENTICESHIP
not to exceed six months [Art. 61, LC]
Highly technical work in an Industry
[Art. 60, LC]
At least 14 years of age with
vocational aptitude and capacity, and
LEARNERSHIP
Not to exceed three (3) months [Art.
75, LC]
Semi-skilled and other Industrial
work [Art. 73, LC]
When no experienced worker is
available in the industry [Art. 74, LC]
47
Salary
13.
48
49
D. TERMINATION OF EMPLOYMENT
1.
Employer-Employee Relationship
EMPLOYER
Art. 212(e), LC
Art. 97(b)
EMPLOYEE
Art. 212(f)
Art. 97(c)
EER is basically a question of fact. [127 SCRA 454 (1984); Traders Royal
Bank vs. NLRC, 321 SCRA 467 (1999); Mandaue Galleon Trade, Inc. vs. Andales,
G.R. No. 159668, March 7, 2008; TAPE, Inc. vs. Servaa, G.R. No. 167648,
January 28, 2008]
EXCEPT in,
(1)
(2)
(3)
1.1.
Article 106
Article 138
Article 155
Four-fold Test
50
Selection/Hiring
Hiring has not presented so much question.
Payment of Wages
BUT,
BUT,
BUT,
STILL,
absence of license should not be considered a legal obstacle as what
applies here is the Labor Code, and not the Insurance Code. [Grepalife vs.
NLRC, 187 SCRA 694 (1990)]
Dismissal
On the other hand, direct application for employment to the principal upon
the termination of the service contract between the alleged employer and
the principal, clearly shows that employment relationship exists between
the employees and the job contractor. [S.I.P. Food House, et al. vs.
Batolina, et al., G.R. No. 192473, October 11, 2010, Brion, J.]
Control
BUT,
Among the 4 principal tests used in the determination of an EER, the socalled control test is commonly regarded as the most crucial and
determinative indicator. Such element is present where the person for
whom the services are performed reserves the right to control not only the
end achieved, but also the manner and means to be used in reaching
that end. [Abante vs. La Madrid, supra]
Not every form of control that the hiring party reserves to himself over the
51
Only those rules that are intended to address both the result and the
means used to achieve it establish EER. [Insular Life Assurance vs.
NLRC, 179 SCRA 459, 464-65 (1989), citing Mafinco Trading Corp. vs.
Ople, 70 SCRA 139; Investment Planning Corp. vs. SSS, 21 SCRA 924;
Sara vs. NLRC, 166 SCRA 625, 630; Tongko vs. Manulife, 570 SCRA
503, 518, November 7, 2008, citing Insular Life Assurance Co., Ltd vs.
NLRC, 431 SCRA 583, 604 (2004); Manila Electric Company vs.
Benamira, G.R. No. 145271, July 14, 2005; Arsenio T. Mendiola vs.
Court of Appeals, G.R. No. 159333, July 31, 2006]
NOTE:
The Grepalife case wherein the agent brothers appointed as zone supervisor and
district manager were considered as employees of Grepalife, because of the presence of
the element of control in their contract of engagement, a fact which is not attendant in the
Tongko case. The Insular Life case is neither in point, since in the Tongko case no other
contract was presented apart from the Agency Agreement executed at the beginning of
engagement, and was never superseded by any other agreement even when the
complainant became an area manager of Manulife. [Tongko, June 2010, supra]
COMMENT:
Secondary Tests:
SSS registration as employee. [Flores vs. Funeraria Nuestro, 160 SCRA 568;
Bautista vs. Inciong, 158 SCRA 665; Corporal vs. NLRC, 341 SCRA 658 (2000)].
A company physician who billed professional fees every month, who never complained since
1981 that he was not covered by SSS, who was subjected to 10% withholding tax not as
employee but as professional fee, whose relationship is terminable at will by either parties,
and who was not subjected to control of company is NOT an employee. [Phil. Global
Communications, Inc. vs. Ricardo de Vera, G.R. No. 157214, June 7, 2005]
Payment of ECC (State Insurance Fund) under Arts. 168, Labor Code, which is
compulsory upon all employers and their employees not over sixty (60) years of age [also,
Art. 183(a), L.C.; in fact 183 (c) of L.C. Requires the employer to pay the employee
contribution].
Pag-Ibig Fund
52
Employment Contract
Under the Omnibus Rules Implementing the Labor Code, one of the
requirements for the issuance of an employment permit is an employment
contract. (Section 5, Rule XIV) [Pacific Consultants International Asia, Inc.
vs. Schonfeld, G.R. No. 166920, February 19, 2007]
ID cards, even with employee's name, if used on to obtain entrance. [Lopez vs.
Bodega City, 532 SCRA 56 (2007)]
CASES:
If the parties themselves practically agreed on every terms and conditions of the
workers services in the company, it negates the element of control in their relationship, and
thereby negating the existence of EER. [Philippine Global Communications, Inc. vs. de
Vera, G.R. No. 157214, June 7, 2005, Garcia, J.]
Article 157 of the Labor Code clearly and unequivocally allows employers in nonhazardous establishments to engage on retained basis the service of a dentist or
physician. Nowhere does the law provide that the physician or dentist so engaged thereby
becomes a regular employee. The very phrase that they may be engaged on retained
basis, revolts against the idea that this engagement gives rise to an employer-employee
relationship. [Philippine Global Communications, Inc. vs. de Vera, G.R. No. 157214,
June 7, 2005, Garcia, J.]
It is a standard stipulation in security service agreements that the client may request
the replacement of the guards to it. Service-oriented enterprises [Manila Electric Company
vs. Benamira, et al., G.R. No. 145271, July 14, 2005, Austria-Martinez, J.]
An employee occupies no office and generally is employed not by the action of the
directors or stockholders but by the managing officer of the corporation who also determines
the compensation to be paid to such employee. [Easycall Communications Phils., Inc. vs.
King, G.R. No. 145901, December 15, 2005, Corona, J.]
Where a person who works for another performs his job more or less at his own
pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is
compensated according to the result of his efforts and not the amount thereof, no employeremployee relationship exists. In our jurisdiction, the benchmark of economic reality in
analyzing possible employment relationships for purposes of applying the Labor Code ought
to be the economic dependence of the worker on his employer. [Wilhelmina S. Orozco vs.
The Honorable Court of Appeals, Philippine Daily Inquirer, and Leticia Jimenez
Magsanoc, G.R. No. 155207, August 13, 2008]
Under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical
relationship was created between petitioner and respondent: that of employer-employee and
vendor-vendee. The Kasunduan did not extinguish the employer-employee relationship of
the parties extant before the execution of said deed. [Villarama, Jr. vs. Court of Appeals,
G.R. No. 165881, April 19, 2006, Callejo, Sr., J.]
An owner-member of a cooperative can be its own employee. [Republic of the
Philippines, represented by Social Security System and Social Security Commission vs.
Asiapro Cooperative, G.R. No. 172107, November 23, 2007]
Concept of Whole Economic Activity
53
1.2.
Probationary Employment
PROBATIONARY
EMPLOYMENT
54
Rules
Period of Probation
of
BUT,
While there is no statutory cap on the minimum term of probation, the law sets a
maximum trial period during which the employer may test the fitness and efficiency
the employee. [Magis Young Achievers' vs. Manalo, supra]
The computation of probationary period is made on a calendar date basis to be
reckoned from the date of appointment, NOT on a 30-days per month basis as
provided for in Art. 13, Civil Code. [Alcira vs. NLRC, 431 SCRA 508 (June 9, 2004)
citing CALS Poultry Supply vs. Roco, 385 SCRA 479, 488 (2002)]
An employer, under exceptional circumstances, can extend a probationary period of
employment, such as when the same is established by company policy, or when it is
required by the nature of the work, provided such extension was agreed upon by the
parties, and exercised before the expiration of the original period of probation. [San
Miguel Corporation vs. Caroline C. Del Rosario, 477 SCRA 604 (December 13,
2005), citing Buiser vs. Leogardo, 216 Phil. 144, 150 (1984)] In fact, length of time is
immaterial in determining the correlative rights of both parties in dealing with each
other during probationary period. [Philippine Daily Inquirer vs. Magtibay, Jr.,
supra]
It is important that the contract of probationary employment specify the period or term
of its effectivity. The failure to stipulate its precise duration could lead to the inference
that the contract is binding for the full three-year probationary period. [Magis Young
Achievers' vs. Manalo, supra]
Nature of Probation
The employee knows from the very start that he will be under close observation and
his performance of his assigned duties and functions would be under continuous
scrutiny by his superiors. [Philippine Daily Inquirer vs. Magtibay, Jr., supra]
Standards under which a probationary employee will qualify as a regular employee
shall be made known to him at the time of engagement. Otherwise, he shall be
deemed a regular employee. [Clarion Printing House, Inc. vs. NLRC, 461 SCRA
272, 298-95 (2005)]
Evaluation is made before expiration of the probationary period. [Alcira vs. NLRC,
supra] In the absence of any evaluation, one cannot conclude that the employee
failed to meet the standards for probationary employment. [Dusit Hotel Nikko vs.
Gatbonton, 489 SCRA 671, 677 (2006)] And when he is allowed to work after a
probationary period, he shall be considered regular. [Art. 281, LC cited in Philippine
National Bank vs. Cabansag, 460 SCRA 514 (2005)]
BUT,
55
HOWEVER,
1.3.
Kinds of Employment
(2)
project employees or those whose employment has been fixed for a specific project
or undertaking, the completion or termination of which has been determined at the
time of the engagement of the employee,
or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season; and
(3)
casual employees or those who are neither regular nor project employees. [Rowell
Industrial Corporation vs. Court of Appeals, 517 SCRA 691, March 7, 2007, citing
Pangilinan vs. General Milling Corporation, G.R. No. 149329, 12 July 2004, 434
SCRA 159, 169; Pedy Caseres, et al. vs. Universal Robina Sugar Milling Corp.,
et al., G.R. No. 159343, September 28, 2007; Glory Philippines, Inc. vs.
Buenaventura B.
Vergara, G.R. No. 176627, August 24, 2007]
1.3.1.
Regular employment
Regular Employment
Regular employees may be classified into: (1) regular employees by nature of work;
and (2) regular employees by years of service. [Rowell Industrial Corporation vs. CA,
supra]
By years of service:
A casual employee who has rendered at least one (1) year of service,
whether continuous or broken is a regular employee. The status of regular
employment under this category attaches to the casual worker on the day
immediately after the end of his first year of service as such casual employee.
[Kay Products, Inc. vs. Court of Appeals, 464 SCRA 544 (July 28, 2005)] He
56
Article 281 of the Labor Code also considers a regular employee as one who is
allowed to work after a probationary period. [Pier 8 Arrastre & Stevedoring Services, Inc.,
et al. versus Jeff B. Boclot, G.R. No. 173849, September 28, 2007]
If the employee has been performing the job for at least a year, even if the
performance is not continuous and merely intermittent, the law deems repeated and
continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. [Thelma Dumpit-Murillo versus Court of
Appeals, et al., G.R. No. 164652, June 8, 2007] And the signing of a contract of temporary
employment at the time when the employee already attained or is about to attain regular
employment status under the CBA is an indication of an employer's illegal intent. [Philex
Mining Corp. vs. NLRC, 312 SCRA 119 (1999)]
Example:
(a)
janitorial and messengerial services in an aquaculture
business, only after rendering 1 year of service. [SMC vs. Aballa, 461 SCRA
392 (June 28, 2005)]
Length of service provides a fair yardstick for determining when an employee initially
hired on a temporary basis becomes a permanent one, entitled to security and
benefits of regularization. [William Uy Construction Corp. vs. Trinidad, G.R. No.
183250, March 10, 2010, Abad, J.]
By nature of work
Employee performs work that is usually necessary and desirable in the usual
business or trade of the employer. [Caparoso vs. CA, 516 SCRA 30 (February
15, 2007)] The connection can be determined by considering the nature of the
work performed and its relation to the scheme of the particular business or trade
in its entirety. [Pier 8 Arrastre & Stevedoring Services, Inc., et al. versus Jeff
B. Boclot, G.R. No. 173849, September 28, 2007]
57
Issuance of a regular appointment is not necessary. [Efren Paguio vs. NRLC, G.R.
No. 147816, May 9, 2003]
Article 280 should not be interpreted as a way as to deprive employers of the right
and prerogative to choose their own workers if they have sufficient basis to refuse an
employee a regular status. Management has rights which should also be protected.
[Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691 (March 7,
2007)]
(a)
Employee performs work that is usually necessary and desirable in the usual
business or trade of the employer. [Caparoso vs. CA, 516 SCRA 30 (February 15,
2007)] The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its
entirety. [Pier 8 Arrastre & Stevedoring Services, Inc., et al. versus Jeff B. Boclot,
G.R. No. 173849, September 28, 2007]
A continuing need for respondents' services is sufficient evidence of the necessity and
indispensability of their services to petitioner's business. [Glory Philippines, Inc. vs.
Vergara, G.R. No. 176627, August 24, 2007] Necessity or desirability is tied up to
employer's usual business. [Magsalin vs. NOWM, G.R. No. 148492, May 9, 2003]
What determines whether a certain employment is regular or otherwise is not the will
or word of the employer, but the business, taking into account all the circumstances,
and in some cases the length of time of its performance and its continued existence.
[ABS-CBN Broadcasting Corporation v. Nazareno, G.R. No. 164156, September
26, 2006]
1.3.2
PROJECT
Project employment
(a)
58
Whether one is assigned to carry out a specific project or undertaking, the duration
and scope of which are specified at the time of engagement for a project.
Duration of work to be performed must be defined in the employment contract, and
Terms and conditions of employment must be made clear to the employee at the time
of hiring. [Abesco Construction and Development Corp. vs. Alberto Ramirez,
April 10, 2006; Dacuital, et al., supra; Leyte Geothermal Power Progressive
Employees Union-ALU-TUCP vs. PNOC-EDC, G.R. No. 170351, March 30, 2011,
Nachura, J.]
Points to consider in Project Employment
(1)
(2)
(3)
Employees who are hired for carrying out a separate job, distinct from the
other undertakings of the company, the scope and duration of which has
been determined and made known to the employees at the time of the
employment, are properly treated as project employees. [Hanjin Heavy
Industries and Construction Co., Ltd., Hak Kon Kim and/or Jhunie
Adahar versus Felicito Ibaez, et al., G.R. No. 170181, June 26, 2008]
(4)
(5)
(6)
The absence of a written contract does not by itself grant regular status
to respondents, but is evidence that respondents were informed of the
duration and scope of their work and their status as project employees.
[Hanjin Heavy Industries and Construction Co., Ltd., vs. Felicito
Ibaez, et al., supra]
(7)
1.3.3.
Seasonal employment
In the case of Mercado, Sr. v. NLRC, the farm workers, after performing their
designated task in the farm or at the end of the season for which they were hired,
their employment relationship with the company is considered severed, and are
59
free to look for work from other farms, are considered as seasonal workers under
Art. 280 of the Labor Code. [HIND SUGAR CO., INC. vs. HON. COURT OF
INDUSTRIAL RELATIONS, ET AL., G.R. No. L-13364 July 26, 1960, 108 Phil
1026]
BUT,
And if the employer give preference to its former employees and laborers in
hiring workers every season, as in workers in a work pool, they should be
considered as regular seasonal workers insofar as the effect of temporary
cessation of work is concerned. These workers, however, do not receive
salaries and are free to seek other employment during temporary breaks in the
business. [Integrated Contractors & Plumbing Works, Inc. vs. NLRC, August
9, 2005]
In a case where the employer failed to prove that its farm workers worked only
for the duration of one particular season, but have been serving the employer
for several years already, these farm workers should be regarded as regular
not seasonal employees. [Hacienda Fatima, et al. vs. National Federation
of Sugarcane Workers-Food and General Trade, G.R. No. 149440, January
28, 2003]
1.3.4.
Casual employment
casual employees or those who are neither regular nor project employees.
[Pangilinan vs. General Milling Corporation, G.R. No. 149329, 12 July 2004,
434 SCRA 159, 169]
1.3.5.
Fixed-Term Employment
Some workers perform tasks which are necessary or desirable without being hired
as an employee (such as an independent contractor) [Philippine Global
Communications, Inc. vs. De Vera, supra] In fact, Article 280 does not proscribe or
prohibit an employment contract with a fixed period, [Rowell Industrial Corp. vs.
Court of Appeals, 517 SCRA 691 (March 7, 2007)] provided it is not intended to
circumvent the employee's security of tenure. [Labayog vs. M.Y. San Biscuits, Inc.,
494 SCRA 486, 491 (2006); Caparoso vs. Court of Appeals, 516 SCRA 30 (2007)]
(a)
60
1.4.
NOTE:
The presumption is that a contractor is a labor-only contractor unless such contractor overcomes
the burden of proving that it has substantial capital, investment, tools and the like. [7k Corporation v.
NLRC, G.R. No. 148490, November 22, 2006; Coca-Cola Bottlers Phils., Inc. vs. Alan M. Agito, et al.,
G.R. No. 179546, February 13, 2009]
1.4.1.
61
1.4.2.
1.4.3.
62
NLRC and Lolita Neri, G.R. No. 172241, November 20, 2008; Lakas sa
Industriya ng Kapatirang Haligi ng Alyansang-Pinagbuklod ng
Manggagawang Promo sa Burlingame vs. Burlingame Corporation, G.R.
No. 162833, June 15, 2007]
Labor-only contracting would give rise to: (1) the creation of an employeremployee relationship between the principal and the employees of the contractor
or sub-contractor; and (2) the solidary liability of the principal and the contractor
to the employees in the event of any violation of the Labor Code. [Coca-Cola
Bottlers Phils., Inc. vs. Alan M. Agito, et al., supra]
2.
Termination of Employment
DISMISSAL
SUSPENSION
2.1.
Labor Code
Art. 279.
Security of tenure. In cases of regular employment, the
employer shall not terminate the services of an employee except for a just cause
or when authorized by this Title. An employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement. (As amended
by Section 34, Republic Act No. 6715, March 21, 1989)
NOTES:
Security of tenure is a paramount right of every employee that is held sacred by the
constitutional guarantees as an act of social justice. The right of every employee to security of
tenure is all the more secured by the Labor Code by providing that the employer shall not
terminate the services of an employee, except for a just cause or when authorized by law. [Julito
Sagales vs. Rustans Commercial Corporation, G.R. No. 166554, November 27, 2008]
However, in the case of private school teachers, their entitlement to security of tenure is governed
by the Manual of Regulations for Private Schools and not the Labor Code. [Aklan College
Incorporated vs. Rodolfo P. Guarino, G.R. No. 152949, August 14, 2007]
Transfer of Ownership; Simulated sale
63
2.1.1.
Just Causes
Labor Code
Art. 282. Termination by employer. An employer may terminate
an employment for any of the following causes:
a.
Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his work;
b.
Gross and habitual neglect by the employee of his duties;
c.
Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;
d.
Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his duly
authorized representatives; and
e.
Other causes analogous to the foregoing.
(a)
Art. 282.
Termination by employer.
An
terminate an employment for any of the following causes:
employer
may
a.
Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his work;
xxx
xxx
xxx
SERIOUS
MISCONDUCT
DISHONESTY
WILLFUL
DISOBEDIENCE
i.
Requisites
64
(2)
(3)
it must show that the employee has become unfit to continue working for the
employer. [Philippine Aeolus Automotive United Corp. vs. NLRC, G.R. No.
124617, April 28, 2000; Premiere Development vs. Mantal, supra; Solid
Development Corporation Workers Association vs. Solid Development
Corporation, G.R. No. 165995, August 14, 2007]
(b)
Art. 282.
Termination by employer.
An employer
terminate an employment for any of the following causes:
xxx
xxx
xxx
(b)
Gross and habitual neglect by the employee of his duties;
xxx
xxx
xxx
may
ABANDONMENT
GROSS
NEGLIGENCE
HABITUAL
NEGLECT
TARDINESS/
ABSENTEEISM
i.
Requisites
65
Habitual Neglect
Under Article 282 of the Labor Code, gross and habitual neglect by the employee of
his duties is a sufficient and legal ground to terminate employment. Gross negligence
connotes want of care in the performance of one's duties. Habitual neglect implies repeated
failure to perform one's duties for a period of time, depending upon the circumstances.
[Carlos V. Valenzuela vs. Caltex Philippines, Inc., G.R. Nos. 169965-66, December 15,
2010, Villarama, Jr., J.] In dismissing an employee for gross and habitual neglect of duties,
the employer must be able to identify what specific duties the employee violated and
whether the violations were gross and habitual. [Benjamin vs. Amellar Corporation, G.R.
No. 183383, April 5, 2010, Carpio Morales, J.]
While management has the prerogative to discipline its employees and to impose
appropriate penalties on erring workers, pursuant to company rules and regulations,
however, such management prerogatives must be exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws and valid agreements.
Nevertheless, it may terminate an employee only for a just cause, his prerogative to dismiss
must be exercised without abuse of discretion. Its implementation should be tempered with
compassion and understanding. [Philippine Long Distance Telephone Company vs.
Joey B. Teves, G.R. No. 143511, November 15, 2010, Peralta, J.]
(c)
Art. 282.
Termination by employer.
An employer may
terminate an employment for any of the following causes:
xxx
xxx
xxx
(c)
Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;
xxx
xxx
xxx
LOSS OF
CONFIDENCE
BREACH OF
TRUST
66
BUT,
Loss of trust and confidence can be based on gross
negligence [School of the Holy Spirit of Quezon City vs.
Taguiam, G.R. No. 165565, July 14, 2008]
Rationale
The basic premise for dismissal on this ground is that the employee concerned
holds a position of trust. [Caeda vs. PAL, G.R. No. 152232, February 26, 2007] An
employer cannot be compelled to continue the employment of an employee who is guilty of
acts inimical to the interest of the employer and which justifies the loss of confidence in the
employee. [Philippine Military Veterans Security and Investigation Agency vs. CA, G.R.
No. 139159, January 31, 2006; Divine Word College of San Jose vs. Aurelio, G.R. No.
163706, March 29, 2007]
Loss of trust and confidence is premised on the fact that an employee concerned
holds a position where greater trust is placed by management and from whom greater
fidelity to duty is correspondingly expected. This includes managerial personnel entrusted
with confidence on delicate matters, such as custody, handling or care and protection of the
employer's property. The betrayal of this trust is the essence of the offense for which an
employee is penalized. [Lima Land, Inc. vs. Cuevas, G.R. No. 169523, June 16, 2010,
Peralta, J.]
i.
Requisites
There must be an actual breach; [Salas vs. Aboitiz One, Inc, G.R. NO.
178236, June 27, 2008]
(2)
(3)
(4)
(5)
(6)
(7)
(8)
67
(9)
(d)
Elements of Abandonment
1. failure to report for work or absence without valid or justifiable reason;
2. clear intention to sever the employer-employee relationship [Sugue vs. Triumph
International (Phils.), Inc., G.R. No. 164804, January 30, 2009; Fe La Rosa vs.
Ambassador Hotel, G.R. No. 177059, March 13, 2009]
3. employer should have reported such fact to the nearest Regional Office of DOLE in
accordance with Rule XXIII, Section 7, Book V, DO 9-97 [R. Transport Corporation
vs. Ejandra, G.R. No. 155264, May 6, 2005] The operative act that will ultimately put
an end to this relationship is the dismissal of the employee after complying with the
procedure prescribed by law. [Kams International, Inc. vs. NLRC, G.R. No. 128806,
September 28, 1999; Floren Hotel vs. NLRC, G.R. o. 155264, May 6, 2005]
BUT,
BECAUSE,
Sometimes the complaint for illegal dismissal is only made as leverage to gain
monetary benefits. [Arc-Men Food Industries Corp. vs. NLRC, May 7, 1997]
THUS,
The rule is that an employee must positively prove first that he was indeed
dismissed before the burden of the employer under Article 277(b) applies.
(e)
Another cause for termination is dismissal from employment due to the enforcement of
the union security clause in the CBA. [Alabang Country Club, Inc., vs. NLRC, G.R. No.
170287, February 14, 2008]
68
The rights of an employee to be informed of the charges against him and to
reasonable opportunity to present his side in a controversy with either the company or his
own union are not wiped away by a union security clause or a union shop clause in a
collective bargaining agreement. An employee is entitled to be protected not only from a
company which disregards his rights but also from his own union the leadership of which
could yield to the temptation of swift and arbitrary expulsion from membership and hence
dismissal from his job. [General Milling Corporation vs. Casio, et al. and Pino, et al.,
G.R. No. 149552, March 10, 2010, Leonardo-de Castro, J.]
(f)
The totality of infractions or the number of violations committed during the period
of employment shall be considered in determining the penalty to be imposed upon an
erring employee. The offenses committed by petitioner should not be taken singly and
separately. Fitness for continued employment cannot be compartmentalized into tight
little cubicles of aspects of character, conduct and ability separate and independent of
each other. While it may be true that petitioner was penalized for his previous infractions,
this does not and should not mean that his employment record would be wiped clean of
his infractions. After all, the record of an employee is a relevant consideration in
determining the penalty that should be meted out since an employee's past misconduct
and present behavior must be taken together in determining the proper imposable
penalty. Despite the sanctions imposed upon petitioner, he continued to commit
misconduct and exhibit undesirable behavior on board. [Brendo D. Merin vs. National
Labor Relations Commission, et al., G.R. No. 171790, October 17, 2008]
2.1.2.
Authorized Causes
REDUNDANCY
69
CLOSURE
(a)
Due to business losses or reverses; and NOT due to losses [JAT General
Services vs. NLRC, G.R. No. 148340, January 26, 2004, Quisumbing, J.]
(2)
i.
70
NOTES:
1-Month Notice Rule
Mere failure to comply with the notice requirement of labor laws on company
closure does not amount to a patently unlawful act. [Carag vs. NLRC, 520 SCRA 25
(2007)] A written notice that is short of the 30 days prior to notice rule will constitute
substantial compliance if the period not covered is compensated even if unworked.
[Kasapian ng Malayang Manggagawa sa Coca-Cola vs. CA, 487 SCRA 487, 510-11
(2006), citing Serrano vs. NLRC, 331 SCRA 331 (2000)]
Where retrenchment undertaken by the employer is bona fide, the same will not be
invalidated for its failure to serve prior notice on the employees and the DOLE. The
employer shall only be liable to pay nominal damages at a reasonable rate of P50,000.00
for each employee. [Eastridge Golf Club, Inc., supra]
Payment of Separation Pay under Article 283
The amount of separation pay must be computed from the time the employee
commenced employment until the cessation of operations of the employers
business. [JAT General Services vs. NLRC, supra]
BUT,
Under Sec. 10, Rule I, Book VI, Omnibus Rules, the computation of termination pay
of an employee under Art. 283 shall be based on his latest salary rate, unless the
same was reduced by the employer to defeat the intention of the Code, in which
case, the basis of computation shall be the rate before its deduction.
Car and insurance benefits should not be included in the computation of separation
pay as they are benefits granted only during the course of employment. [Dr. Pedrito
F. Reyes vs. CA, G.R. No. 154448, August 15, 2003, Ynares-Santiago, J.]
71
ii.
good faith on the part of the employer in abolishing the redundant position; and
fair and reasonable criteria in ascertaining what positions are to be declared
redundant, and accordingly abolished. [AMA Computer College vs. Garcia,
G.R. No. 166703, April 14, 2008]
the retrenchment is necessary to prevent losses and such losses are proven;
(b)
written notice to the employees and to DOLE at least one (1) month prior to the
intended date of retrenchment;
(c)
payment of separation pay equivalent to one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. [AMA Computer
College, Inc. vs. Garcia, supra; Manatad vs. PT&T, G.R. No. 172363, March
7, 2008; TPI Philippines Cement Corp vs. Cajucom VIII, 483 SCRA 494, 50203 (2006)]
(d)
(e)
(f)
the employer must first exhaust all other means to avoid further losses without
retrenching its employees. [FASAP vs. PAL, G.R. No. 178083, July 22, 2008]
(b)
(c)
iii.
Redundancy
The ground of redundancy does not require the exhibition of proof of losses or
imminent losses. [Coats Manila Bay, Inc. vs. Ortega, supra]
iv.
Standards to be followed
72
Adequate, credible and persuasive evidence of dire financial straits from drastic
business losses must be presented by the employer. [Filipinas (Pre-Fabricated
Bldg.) Systems Filsystems, Inc. vs. Gatlabayan, 487 SCRA 673 (2006)]
(1)
(2)
(3)
(4)
Although when the law uses the phrase retrenchment to prevent losses, it simply
means that the employer may retrench before the losses anticipated are actually
sustained or realized. [TPI Philippines Cement Corp. vs. Cajucom VII, supra]
BUT,
If alleged losses are already realized, and the expected imminent losses sought
to be forestalled, the employer must prove by sufficient and convincing evidence
that retrenchment is the most viable solution. Any less exacting standard of proof
would render too easy the abuse of this ground for termination of services of
employees, as scheming employers might be merely feigning business losses or
reverses to ease out employees. [FASAP vs. PAL, supra; Mendros, Jr. vs.
Mitsubishi Motors Phils. Corp., supra]
Financial statements that will show the financial condition of the company are
pieces of evidence that may justify, among others, the enforcement of its
retrenchment program. [Bernadeth Londonio, et al. vs. Bio Research, Inc., et
al.,G.R. No. 191459, January 17, 2011, Carpio Morales, J.] Financial statements
must be prepared and signed by independent auditors, otherwise, they may be
assailed as self-serving. [FASAP vs. PAL, supra]
(b)
Disease or illness
i.
Requisites
A certification from a competent public authority that the disease of the employee
incurable within a period of 6 months even with proper treatment. [Duterte vs.
Kingswood Trading Co., Inc., G.R. No. 160325, October 4, 2007]
73
(c)
is
Payment of separation pay of one (1) month salary or one-half (1/2) month salary
for every year of service, whichever is higher, and a fraction of at least 6 months
considered as one (1) year. [Crayons Processing, Inc. vs. Pula, G.R. No.
167727, July 30, 2007]
2.2.
Art. 277.
Miscellaneous provisions.
xxx
xxx
xxx
(b)
Subject to the constitutional right of workers to security of tenure
and their right to be protected against dismissal except for a just and authorized
cause and without prejudice to the requirement of notice under Article 283 of this
Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the
causes for termination and shall afford the latter ample opportunity
to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and
regulations promulgated pursuant to guidelines set by the Department of Labor
and Employment. Any decision taken by the employer shall be without prejudice
to the right of the worker to contest the validity or legality of his dismissal by
filing a complaint with the regional branch of the National Labor Relations
Commission. The burden of proving that the termination was for a valid or
authorized cause shall rest on the employer. The Secretary of the Department of
Labor and Employment may suspend the effects of the termination pending
resolution of the dispute in the event of a prima facie finding by the appropriate
official of the Department of Labor and Employment before whom such dispute
is pending that the termination may cause a serious labor dispute or is in
implementation of a mass lay-off. (As amended by Section 33, Republic Act No.
6715, March 21, 1989)
2.2.1.
The law mandates that the burden of proving the validity of the termination of
employment rests with the employer. Failure to discharge this evidentiary burden would
necessarily mean that the dismissal was not justified and, therefore, illegal.
Unsubstantiated suspicions, accusations, and conclusions of employers do not provide
for legal justification for dismissing employees. [Century Canning Corporation, et al.
vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010, Peralta, J.]
The employer is bound to furnish the employee concerned with two (2) written
notices before termination of employment can be legally effected. One is the notice
apprising the employee of the particular acts or omissions for which his dismissal is
sought and this may loosely be considered as the proper charge. The other is the
notice informing the employee of the management's decision to sever his employment.
However, the decision must come only after the employee is given a reasonable period
from receipt of the first notice within which to answer the charge. The requirement of
notice is not a mere technicality but a requirement of due process to which every
employee is entitled. [Erector Advertising Sign Group, Inc. vs. NLRC, G.R. No.
167218, July 2, 2010, Peralta, J.]
This rule applies also to seafarers on board a vessel. However, under paragraph
D, Section 17 of the Revised Standard Employment Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels, the Ship Master is
excused from furnishing a seafarer with the required notice of dismissal if doing so
will prejudice the safety of the crew and the vessel, as in cases of mutiny. BUT just
the same, a complete report should be sent to the manning agency, supported by
substantial evidence of the findings. [NFD International Manning Agents vs. NLRC,
G.R. No. 165389, October 17, 2008]
REMEMBER,
Article 277(b) recognizes the right to due process of all workers, without
distinction as to the cause of their termination, thus, none should be construed. [Suico
74
vs. NLRC, G.R. Nos. 146762, 153584, 163793, January 30, 2007]
Under Article 264, union officers, while terminable for knowingly participating in
an illegal strike are, as in other termination cases, entitled to the due process protection
under Art. 277(b) of the Labor Code. Nothing in Art. 264 authorizes an immediate
dismissal of a union officer for participating in an illegal strike. The act of dismissal is not
intended to happen ipso facto, but rather as an option that can be exercised by the
employer and after compliance with the notice requirements for terminating an employee.
[Stanford Marketing Corp. vs. Julian, G.R. No. 145496, February 24, 2004]
BUT,
In Biflex vs. Filflex Industrial, the Supreme Court held that dismissals under
Article 264 can be immediately resorted to, as an exercise of management prerogative.
[Biflex vs. Filflex Industrial, G.R. No. 155679, December 19, 2006]
2.2.2.
BUT,
It is not enough for an employer to allege in the first written notice to the
employee acts of non-compliance without any specificity, as such allegation is
too general and can encompass just about any malfeasance. The employer
must make a detailed narration of the facts and circumstances that would serve
as bases to terminate the employee which in turn will allow the latter to explain
his side and why he should not be dismissed. [Benjamin vs. Amellar
Corporation, G.R. No. 183383, April 5, 2010, Carpio Morales, J.]
ALSO,
The mere fact that the notices were sent to respondents after the filing of the
labor complaint does not, by itself, establish that the same was a mere
afterthought. The surrounding circumstances of this case adequately explain
why the requirements of procedural due process were satisfied only after the
filing of the labor complaint.
[New Puerto Commercial, et al. vs. Rodel
Lopez, et al., G.R. No. 169999, July 26, 2010, Del Castillo, J.]
(a)
Agabon doctrine
75
Where the dismissal is for a just cause, the lack of procedural due process
should not nullify the dismissal, or render it illegal or ineffectual. The employer should,
however, indemnify the employee for the violation of his statutory rights, such as when
the management did not follow or exhaust the grievance procedure under the
employment contract prior to dismissal. [DMA Shipping Philippines, Inc. vs. Henry
Cabillor, G.R. No. 155389, February 28, 2005; Philemploy Serices and Resources
vs. Rodriguez, 486 SCRA 302, 317 (2006)] The indemnity to be imposed should be
stiffer to discourage the abhorrent practice of dismiss now, pay later scheme, and
should depend on the facts of each case, taking into special consideration the gravity of
the due process violation of the employer. [Agabon, vs. NLRC, 442 SCRA 573, 616-17
(2004); LBC Domestic Franchise Co. vs. Florido, G.R. No. 162577, August 17, 2007]
The indemnity shall be in the form of nominal damages, which the Supreme
Court fixed at a rate of P30,000.00 per employee. [Agabon vs. NLRC, supra]
BUT,
Where the dismissal is based on an authorized cause, the sanction should be
stiff as the dismissal process was initiated by the employers exercise of his management
prerogative. Several factors are taken into account:
(1)
the authorized cause invoked, whether it was a retrenchment or a closure or
cessation of operation of the establishment due to serious business losses or financial
reverses or otherwise;
(2)
the number of employees to be awarded;
(3)
the capacity of the employers to satisfy the awards, taken into account their
prevailing financial status as borne by the records; and
(4)
whether there was a bona fide attempt to comply with the notice requirements as
opposed to giving no notice at all. [Talam vs. NLRC, G.R. No. 175040, April 6, 2010,
Brion, J., citing Jaka Food Processing]
STILL,
If the execution of a decision becomes impossible, unjust or too burdensome,
modification of the decision is necessary in order to harmonize the disposition with the
prevailing circumstances. [Industrial Timber Corporation vs. Ababon, 480 SCRA 171,
187 (2006)]
2.3.
2.3.1.
Reinstatement aspect
76
occupied by the employee. [Pfizer, Inc., et al. vs. Geraldine Velasco, G.R. No.
177467, March 9, 2011, Leonardo-de Castro, J.]
(a)
Immediately executory
i.
Actual reinstatement
ii.
Payroll reinstatement
After the Labor Arbiter's decision is reversed by a higher tribunal, the employee
may be barred from collecting the accrued wages, if it is shown that the delay in
enforcing the reinstatement pending appeal was without fault on the part of the
employer, provided: (1) there must be an actual delay; and (2) the delay must not
be due to the employer's unjustified act or omission. Otherwise, the employer
may still be required to pay the salaries notwithstanding the reversal of the Labor
Arbiter's decision. [Islriz Trading/Victor Hugo Lu vs. Efren Capada, et al.,
G.R. No. 168501, January 31, 2011, Del Castillo, J.]
Refund Doctrine
If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for
dismissal is valid, then the employer has the right to require the dismissed employee on payroll
reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be
deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her
employer under existing laws, collective bargaining agreement provisions, and company practices.
However, if the employee was reinstated to work during the pendency of the appeal, then the employee is
entitled to the compensation received for actual services rendered without need of refund. [Marilou S.
Genuino versus NLRC and Citibank, N.A., et al. versus NLRC, G.R. No. 142732-33, December 4, 2007]
BUT,
Prior to Genuino v. NLRC, there had been no known similar case containing a dispositive portion
where the employee was required to refund the salaries received on payroll reinstatement. In fact, in a
77
catena of cases, the Court did not order the refund of salaries garnished or received by payroll-reinstated
employees despite a subsequent reversal of the reinstatement order. [Garcia v. Philippine Airlines, Inc.,
G.R. No. 164856, January 20, 2009, Carpio Morales, J.]
The Labor Arbiter's order of reinstatement is immediately executory and the employer has to either
re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to
reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay
the employee's salaries. [Garcia v. Philippine Airlines, Inc., supra]
After the labor arbiter's decision is reversed by a higher tribunal, the employee may be barred from
collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal
was without fault on the part of the employer that is: (1) there must be actual delay; (2) the delay must
not be due to the employer's unjustified act or omission otherwise, the employer may still be required to
pay the salaries notwithstanding the reversal of the Labor Arbiter's decision. [Garcia v. Philippine
Airlines, Inc., supra]
2.3.2
Where reinstatement is not feasible, expedient or practical, as where reinstatement would only
exacerbate the tension and strained relations between the parties, or where the relationship between the
employer and employee has been unduly strained by reason of their irreconcilable differences, particularly
where the illegally dismissed employee held a managerial or key position in the company, it would be
more prudent to order payment of separation pay instead of reinstatement. [Johnson & Johnson (Phils.),
Inc., et al. vs. Johnson Office & Sales Union-Federation of Free Workers (FFW), et al., G.R. No.
172799, July 6, 2007]
BUT,
(b)
Payment of separation pay as a substitute for reinstatement is allowed only under exceptional
circumstances, viz.: (1) when reasons exist which are not attributable to the fault or are beyond the control
of the employer, such as when employer closes business; (2) when he illegally dismissed employee has
contracted a disease and his reinstatement will endanger the safety of his co-employees; or (3) where a
strained relationship exists between the employer and the dismissed employee. [Composite Enterprises,
Inc. vs. Caparoso, G.R. No. 159919, August 8, 2007]
Although by way of exception, the grant of separation pay or some other financial assistance may
be allowed to an employee dismissed for just causes on the basis of equity 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. The policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the underprivileged. [Tirazona vs. Philippine EDS
Techno-Service Inc. (PET Inc.), G.R. No. 169712, January 20, 2009; Yrasuegui vs. PAL, G.R. No.
168081, October 17, 2008]
(c)
Computation
2.3.3.
Backwages
(a)
78
An unjustly dismissed employee is entitled to full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent, computed from the time his
compensation was withheld from him up to the time of his actual reinstatement. [ Siemens
Philippines, Inc. vs. Domingo, G.R. No. 150488, July 28, 2008] As a rule, backwages shall
be computed from the time of illegal dismissal up to the finality of the decision. [Philippine
Journalists, Inc. vs. Mosqueda, G.R. No. 141430, May 7, 2004]
HOWEVER,
The computation of backwages should be based on the salary the employee was
receiving at the time of his dismissal. [Palmeria, Sr. vs. NLRC, 247 SCRA 57, 63 (1995)]
Annual general increases in basic salary are NOT included in the computation of full
backwages as they are neither allowance nor benefit. Allowances and benefits are granted to
the employee apart from, and in addition to, the wage or salary. [Equitable Banking Corp.
vs. Sadac, 490 SCRA 380, 409 (2006); Davao Free Worker Front vs. CIR, 67 SCRA 418;
Capital Garments Corp. vs. Ople, 117 SCRA 473; Durabuilt Recapping Plant &
Company vs. NLRC, 152 SCRA 328]
Yardsticks in the computation of the final amount of liability in Illegal Dismissal Cases
(1)
(2)
(3)
(4)
(5)
Employees who have been re-employed without loss of seniority rights shall be
paid backwages but only up to actual reinstatement;
Employees who have been re-employed as new hires shall be restored their
seniority and other preferential rights. However, their backwages shall be
computed only to date of actual re-hiring;
Employees who have reached compulsory age of retirement shall receive
backwages up to their retirement only. The same is true as regards the heirs of
those who have passed away;
Employees who have not been re-employed, plus those who have executed
quitclaims and received separation pay or financial assistance, shall be reinstated
without loss of seniority rights, and paid full backwages, after deduction of
whatever amounts already received; and
Employees who had obtained substantially equivalent or even more lucrative
employment elsewhere in 1998 or thereafter are deemed to have severed their
employment with their previous employer, and shall be entitled to full backwages
from the date of their retrenchment only up to the date they found gainful
employment elsewhere. [Flight Attendants and Stewards Association of the
Philippines (FASAP) v. Philippine Airlines, Inc., G.R. No. 178083, October 2,
2009, Ynares-Santiago, J.]
2.3.4.
Constructive dismissal
Art. 286. When employment not deemed terminated. The bonafide suspension of the operation of a business or undertaking for a period not
exceeding six (6) months, or the fulfillment by the employee of a military or civic
duty shall not terminate employment. In all such cases, the employer shall
reinstate the employee to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than one (1) month from the
resumption of operations of his employer or from his relief from the military or
civic duty.
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NOTES:
CONSTRUCTIVE
DISMISSAL
INVERSELY,
A bona fide suspension of the employers operation of a business or undertaking
for a period not exceeding six (6) months does not amount to termination of employment,
but only a temporary displacement of employees. The paramount consideration should
be the dire exigency of the business of the employer that compels it to put some of its
employees temporarily out of work. [Pido vs. NLRC, G.R. No. 169812, February 23,
2007]
BUT,
If the operation of the business is resumed within six months, it shall be the duty
of the employer to reinstate his employees to their former positions without loss of
seniority rights. [Lagonoy Bus Co., Inc. vs. CA, G.R. No. 165598, August 14, 2007]
PROVIDED,
That the employee should indicate his desire to resume his work not later than
one (1) month from resumption of operation/undertaking; or relief from military or civic
duty. [Eagle Star Security Services, Inc. vs. Bonifacio L. Mirando, G.R. No. 179512,
July 30, 2009]
A complaint for constructive dismissal filed prior to the employee's resumption of work
has no basis, and must be dismissed for want of cause of action. [The University of
the Immaculate Conception, et al. vs. NLRC, et al., G.R. No. 181146, January 26,
2011, Carpio, J.]
Temporary off-detail or floating status is the period of time when security guards
are in between assignments or when they are made to wait after being relieved from a
previous post until they are transferred to a new one. It takes place when the security
agency's clients decide not to renew their contracts with the agency, resulting in a
situation where the available posts under its existing contracts are less than the number
of guards in its roster. It also happens in instances where contracts for security services
stipulate that the client may request the agency for the replacement of the guards
assigned to it even for want of cause. [Bebina G. Salvaloza vs. NLRC, et al., G.R. No.
182086, November 24, 2010, Nachura, J.]
HOWEVER,
80
poses a serious threat to the life and property of the employer and of his co-workers.
[Gatbonton vs. NLRC, G.R. No. 146779, January 23, 2006, 479 SCRA 416] The rule
on preventive suspension is found in Secs. 8 and 9, Rule XXIII, DO 19, June 21, 1997.
As a general rule, the employee is not entitled to wages during the period of a
valid preventive suspension. However, if preventive suspension is found to be without
basis, the employer is required to pay the illegally suspended employee his backwages
for the period of his suspension. [Maricalum Mining vs. Decorion, infra]
REMEMBER that
Preventive suspension lasts only for a period of 30 days, and beyond this period, such
suspension may amount to constructive dismissal. [Maricalum Mining Corp. vs.
Decorion, 487 SCRA 182 (2006)]
HOWEVER,
There are cases where a violation of the 30-day suspension period may entail
payment of indemnity of P1,000.00 [JRS Business Corp. vs. NLRC, G.R. No.
108891, July 17, 1995] or P3,000.00 [Pepsi-Cola Distributors vs. NLRC, G.R.
No. 106831, May 6, 1997]
While another view is that the period exceeding 30 days shall be compensable,
[Carlos V. Valenzuela vs. Caltex Philippines, Inc., G.R. Nos. 169965-66,
December 15, 2010, Villarama, Jr., J.] thus, the extension will not give rise to
constructive dismissal. The preventive suspension beyond 30 days shall be
upheld provided the employee's wages and benefits are paid in the interim.
[Genesis Transport Service, Inc. vs. Unyon ng Malayang Manggagawa ng
Genesis Transport, G.R. No. 182114, April 5, 2010, Carpio Morales, J.]
2.3.6.
Quitclaims
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2.3.7.
Art. 285.
(a)
An employee may terminate without just cause the employeeemployer relationship by serving a written notice on the employer at least one (1)
month in advance. The employer upon whom no such notice was served may hold
the employee liable for damages.
(b)
An employee may put an end to the relationship without serving
any notice on the employer for any of the following just causes:
1.
Serious insult by the employer or his representative on the honor
and person of the employee;
2.
Inhuman and unbearable treatment accorded the employee by the
employer or his representative;
3.
Commission of a crime or offense by the employer or his
representative against the person of the employee or any of the immediate
members of his family; and
4.
Other causes analogous to any of the foregoing.
3.
Art. 287. Retirement. Any employee may be retired upon reaching the
retirement age established in the collective bargaining agreement or other
applicable employment contract.
In case of retirement, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and any collective
bargaining agreement and other agreements: Provided, however, That an
employees retirement benefits under any collective bargaining and other
agreements shall not be less than those provided therein.
In the absence of a retirement plan or agreement providing for retirement
benefits of employees in the establishment, an employee upon reaching the age of
sixty (60) years or more, but not beyond sixty-five (65) years which is hereby
declared the compulsory retirement age, who has served at least five (5) years in
the said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term one-half (1/2)
month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th
month pay and the cash equivalent of not more than five (5) days of service
incentive leaves.
Retail, service and agricultural establishments or operations employing
not more than ten (10) employees or workers are exempted from the coverage of
this provision.
Violation of this provision is hereby declared unlawful and subject to the
penal provisions under Article 288 of this Code.
82
Retirement is the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter, after reaching a certain age,
agrees to sever his or her employment with the former. RA 7641 pegs the age for compulsory
retirement at 65 years, while the minimum age for optional retirement is set at 60 years. An
employer is, however, free to impose a retirement age earlier than the foregoing mandates.
[Lourdes A. Cercado vs. Uniprom, Inc., G.R. No. 188154, October 13, 2010, Nachura, J.]
Retirement (as amended by RA 7641, Dec. 9. 1992)
a) Retire under existing CBA; in absence thereof
b) Retire under law a. rendered at least 5 yrs. Service, and
b. age 60 yrs. old optional
c. age 65 yrs. old compulsory
c) Benefits
1. for those paid on boundary basis of computation is average daily income [R & E Transport, Inc.]
mo./yr. of service, a fraction of 6 mos. = 1 yr.
2. unless more beneficially agreed upon by the parties -1/2 month shall mean/include:
a) 15 days/year
b) 1/12 of 13th mo. pay
c) Cash equivalent of not more than 5 days SIL
A retirement plan giving the employer the option to retire its employees below the
ages provided by law must be assented to and accepted by the latter, without
which, the exercise of such option will amount to deprivation of property without
due process of law. [Lourdes A. Cercado vs. Uniprom, Inc., supra]
Implied knowledge of the existence of the retirement plan does not amount to
voluntary acceptance of all the provisions set forth therein. The law demands
more than a passive acquiescence on the part of the employees, considering that
an employer's early retirement age option involves a concession of the former's
constitutional right to security of tenure. [Lourdes A. Cercado vs. Uniprom,
Inc., supra]
While an employer may unilaterally retire an employee earlier than the legally
permissible ages under the Labor Code, this prerogative must be exercised
pursuant to a mutually instituted early retirement plan. Otherwise stated, only the
implementation and execution of the option may be unilateral, but certainly not
the adoption and institution of the retirement plan containing such option.
Without the voluntary and explicit assent of at least the majority of its employees,
the option to unilaterally retire an employee is not valid. [Lourdes A. Cercado
vs. Uniprom, Inc., G.R. No. 188154, October 13, 2010, Nachura, J.]
3.1.
Coverage
RA 7641 or the Retirement Pay Law shall apply to all employees in the private
sector, regardless of their position, designation or status and irrespective of the
method by which their wages are paid. They shall include part-time employees,
employees of service and other job contractors and domestic helpers or persons
in the personal service of another. [Labor Advisory on Retirement Pay Law,
October 24, 1996]
83
84
Employees who were offered appointments and absorbed by the private concessionaires after
privatization are never separated from service by virtue of the reorganization pursuant to RA 8041.
[Metropolitan Waterworks and Sewerage System vs. Advincula, et al., G.R. No. 179217, February 2,
2011, Carpio, J.]
COMMENT:
In both cases, some employees were absorbed by the company after privatization took
effect. However, these two cases treated the subsequent appointment of the employees concerned
differently, in that, one considered the absorbed employees as retired from government service and entitled
to retirement benefits, whereas the other treated the absorbed employees as never separated, their
service uninterrupted.
3.2.
The law does not cover employees of retail, service and agricultural establishments or operations
employing not more than (10) employees or workers and employees of the National Government and its
political subdivisions, including Government-owned and/or controlled corporations, if they are covered by
the Civil Service Law and its regulations. [Labor Advisory on Retirement Pay Law, supra; Sec. 2, Rules
Implementing the New Retirement Law]
3.3.
Republic Act No. 7641 amended Article 287 of the Labor Code by providing for
retirement pay to qualified private sector employees in the absence of any retirement
plan in the establishment. Even a bus conductor paid on commission basis falls within
the coverage of RA 7641 if no retirement scheme was adopted in the establishment he
is working. Thus, his retirement pay should include the cash equivalent of the 5-day
85
service incentive leave and 1/12 of the 13 th month pay. [Rodolfo J. Serrano vs.
Severino Santos Transit, et al., G.R. No. 187698, August 9, 2010, Carpio Morales, J.]
3.4.
Labor Code
Art. 287. Retirement. Any employee may be retired upon reaching the
retirement age established in the collective bargaining agreement or other
applicable employment contract.
In case of retirement, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and any collective
bargaining agreement and other agreements: Provided, however, That an
employees retirement benefits under any collective bargaining and other
agreements shall not be less than those provided therein.
In the absence of a retirement plan or agreement providing for retirement
benefits of employees in the establishment, an employee upon reaching the age of
sixty (60) years or more, but not beyond sixty-five (65) years which is hereby
declared the compulsory retirement age, who has served at least five (5) years in
the said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term one-half (1/2)
month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th
month pay and the cash equivalent of not more than five (5) days of service
incentive leaves.
Retail, service and agricultural establishments or operations employing
not more than ten (10) employees or workers are exempted from the coverage of
this provision.
Violation of this provision is hereby declared unlawful and subject to the
penal provisions under Article 288 of this Code.
SSS Law
SEC. 12-B. Retirement Benefits.
(a) A member who has paid at least one hundred twenty (120) monthly
contributions prior to the semester of retirement; and who (1) has reached the
age of sixty (60) years and is already separated from employment or has ceased to
be self-employed (2) has reached the age of sixty (65) years, shall be entitled for
as long as he lives to the monthly pension: Provided, That he shall have the
86
option to receive his first eighteen (18) monthly pensions in lump sum
discounted at the preferential rate of interest to be determined by the SSS.
(b)
A covered member who is sixty (60) years old at retirement and
who does not qualify for pension benefits under paragraph (a) above, shall be
entitled to a lump sum benefit equal to the total contributions paid by him and on
his behalf: Provided, That he is separated from employment and is not
continuing payment of contributions to the SSS on his own.
(c)
The monthly pension shall be suspended upon the re-employment
or resumption of self-employment of a retired employee who is less than sixtyfive (65) years old. He shall again be subject to Section Eighteen and his
employer to Section Nineteen of this Act.
(d)
Upon the death of the retired member, his primary beneficiaries as
of the date of his retirement shall be entitled to receive the monthly pension:
Provided, That if he has no primary beneficiaries and he dies within sixty (60)
months from the start of his monthly pension, his secondary beneficiaries shall
be entitled to a lump sum benefit equivalent to the total monthly pensions
corresponding to the balance of the five-year-guaranteed period, excluding the
dependents pension.
(e)
The monthly pension of a member who retires after reaching sixty
(60) shall be the higher of either: (1) the monthly pension computed at the
earliest time he could have retired had he been separated from employment or
ceased to be self-employed plus all adjustments thereto; or (2) the monthly
pension computed at the time when he actually retires.
GSIS Law
SEC. 13. Retirement Benefits.
(a)
Retirement benefits shall be:
(1)
the lump sum payment as defined in this Act payable at the
time of retirement plus an old-age pension benefit equal to the basic monthly
pension payable monthly for life, starting upon expiration of the five-year (5)
guaranteed period covered by the lump sum; or
(2)
cash payment equivalent to eighteen (18) months of his
basic monthly pension plus monthly pension for life payable immediately with no
five-year (5) guarantee.
(b)
Unless the service is extended by appropriate authorities,
retirement shall be compulsory for an employee at sixty-five (65) years of age
with at least fifteen (15) years of service: Provided, That if he has less than fifteen
(15) years of service, he may be allowed to continue in the service in accordance
with existing civil service rules and regulations.
SEC. 13-A. Conditions for Entitlement.A member who retires from the
service shall be entitled to the retirement benefits enumerated in paragraph (a) of
Section 13 hereof: Provided, That:
(1)
he has rendered at least fifteen (15) years of service;
(2)
he is at least sixty (60) years of age at the time of retirement; and
(3)
he is not receiving a monthly pension benefit from permanent total
disability.
The provision as of the date of his retirement which qualifies the term primary
beneficiaries was nullified by the Supreme Court for violating the due process
and equal protection clauses of the Constitution. [Dycaico vs. SSS, G.R. No.
161357, November 30, 2005]
CASE:
Government Service Insurance System vs. Fernando P. De Leon,
G.R. No. 186560, November 17, 2010, Nachura, J.
The inflexible rule in our jurisdiction is that social legislation must be liberally construed in favor of
the beneficiaries. Retirement laws should be liberally construed in favor of the retiree, because their
objective is to provide for the retiree's sustenance and even comfort when he no longer has the capability
to earn a livelihood. All doubts must be resolved in favor of the retiree to achieve their humanitarian
87
purpose.
Retirement benefits are a form of reward for an employee's loyalty and service to the employer,
and are intended to help the employee enjoy the remaining years of his life, lessening the burden of having
to worry about his financial support or upkeep. A pension partakes of the nature of retained wages of the
retiree for a dual purpose: (1) to entice competent people to enter the government service; and (2) to
permit them to retire from service with relative security, not only for those who have retained their vigor, but
more so for those who have been incapacitated by illness or accident.
A retiree, after receiving retirement benefits under one law, but later on was discovered not
qualified thereunder is not all throughout disqualified to receive retirement benefits under any other existing
retirement law. This does not amount to double retirement nor does it amount to conversion of retirement
mode.
The conversion under the law is one that is voluntary choice made by the retiree. On the other
hand, in a case where retiree was later on discovered to be disqualified to receive retirement benefits
under one law, his receipt of retirement benefits based on another retirement law is not conversion,
because it is not a voluntary choice of the retiree, but a consequence of his disqualification.
In this case, retired prosecutors of the National Prosecution Service, pursuant to RA 10071, is not
entitled to receive the benefits granted to all those who retired prior to the effectivity thereof.
If CBA/Retirement Plan prohibits double recovery of separation pay and retirement benefit
then grant only one benefit, whichever is greater.
2)
If CBA/Retirement Plan contains no prohibition, grant both. [Aquino vs. NLRC, 206 SCRA
118, 122-123 (1992)]
3)
Same is true with retirement plan vs. CBA. [Aquino, supra, citing BLTB Co. vs. CA, 71 SCRA
470; see also Salomon vs. Association of International Shipping Lines, Inc., 457 SCRA
254, 262 (2005)]
4)
If CBA does not require payment of retirement pay in addition to retrenchment pay, then no
double recovery.
Retirement under the CBA is subject to judicial review and nullification. A CBA, as a labor contract,
is not merely contractual in nature but impressed with public interest. It can be nullified for being contrary
to law, public morals, or public policy. [Cainta Catholic School vs. Cainta Catholic School Employees
Union, 489 SCRA 468, 485 (2006)]
Retirement laws are liberally construed in favor of the persons intended to be benefited.
HOWEVER,
When the employers retirement plan precludes employees, whose services were terminated for
cause, from availing retirement benefits, such cannot be granted for lack of consensual and statutory basis
for the grant of retirement benefits. [Divina S. Lopez vs. National Steel Corporation, G.R. No. 149674,
Feb. 16, 2004 (423 SCRA 109)]
Voucher records
Clearance
88