LABOR MIDTERMS MAGIC NOTES!

PART 1: INTRODUCTORY MATERIALS Section 1: Labor Law in General 1.01 LABOR LAW DEFINED Bouvier’s Law Dictionary LABOR. Continued operation; work. 2. The labor and skill of one man is frequently used in a partnership, and valued as equal to the capital of another. 3. When business has been done for another, and suit is brought to recover a just reward, there is generally contained in the declaration, a count for work and labor. 4. Where penitentiaries exist, persons who have committed crimes are condemned to be imprisoned therein at labor. 1.02 LAW CLASSIFICATION – LABOR STANDARDS, LABOR RELATIONS, AND WELFARE LAWS Books and Titles LABOR CODE OF THE PHILIPPINES PD 442 as amended Labor Standards Penaranda v Baganga Plywood Corp Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards. Labor standards provide the working conditions of employees, including entitlement to overtime pay and premium pay for working on rest days. Batong Buhay Goldmines Inc v dela Serna Labor standards refers to the minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety and health standards. Labor standards cases are governed by Article 128(b) of the Labor Code. The subject labor standards case of the petition arose from the visitorial and enforcement powers by the Regional Director of DOLE. Even in the absence of E.O. 111, Regional Directors already had enforcement powers over money claims, effective under P.D. 850, issued on December 16, 1975, which transferred labor

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standards cases from the arbitration system to the enforcement system. 1.03 BASIS FOR ENACTMENT 1987 CONSTITUTION ART II SEC 5 The maintenance of peace and order, the protection of life, liberty, and property, and promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy. 1987 CONSTITUTION ART II SEC 18 The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. 1987 CONSTITUTION ART XIII SEC 1 The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. Police Power CMS Estate Inc v Social Security System The Social Security Law was enacted pursuant to the policy of the government "to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines, and shall provide protection against the hazards of disability, sickness, old age and death" (Sec. 2, RA 1161, as amended). Membership in the SSS is not a result of bilateral, consensual agreement where the rights and obligations of the parties are defined by and subject to their will, RA 1161 requires compulsory coverage of employees and employers under the System. It is actually a legal imposition on said employers and employees, designed to provide social security to the workingmen. The principle of non-impairment of the obligation of contract as

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provided in the Bill of Rights is not a proper defense, the enactment being a lawful exercise of the police power of the State. 1.04 SOURCES OF LAW A. Labor Code and Related Special Legislation I (Implementing Rules) B. Contract Art 1305 CC A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. Art 1306 CC The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

Kasapian v CA The MOA, being a contract freely entered into by the parties, now constitutes as the law between them, and the interpretation of its contents purely involves an evaluation of the law as applied to the facts herein. C. Collective Bargaining Agreement DOLE Phils v Pawis ng Makabayang Obrero The exercise of management prerogative is not unlimited. It is subject to the limitations provided by law. In this case, there was a CBA (meal allowance provision is found in their previous CBAs, the 1985-1988 CBA and the 19901995 CBA), and compliance therewith is mandated by the express policy of the law. D. Past Practices Davao Fruits Corp v Associated Labor Union From 1975 to 1981, petitioner had freely, voluntarily and continuously included in the computation of its employees' thirteenth month pay, the payments for sick, vacation and maternity leaves, premiums for work done on rest days and special holidays, and pay for

LABOR MIDTERMS MAGIC NOTES!
regular holidays. The considerable length of time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its part, sufficient in itself to negate any claim of mistake. Samahang Manggagawa v NLRC Granted that private respondent TFM had granted an across-the-board increase pursuant to Republic Act No. 6727, that single instance may not be considered an established company practice. American Wire and Cable Daily Rated Employees Union v American Wire and Cable Co Inc For a bonus to be enforceable, it has to be promised by the employer and expressly agreed upon by the parties or it must have a fixed amount and had been a long and regular practice on the part of the employer. To be considered “regular practice” the giving of the bonus should have been done over a long period of time and must be shown to have been consistent and deliberate. There was a downtrend in the amount given for service awards. There was also a downtrend with respect to the holding of Christmas parties as the locations were changed from paid venues to free ones. The additional 35% premium pay for work during Holy Week and Christmas season cannot be held to have ripened into a company practice that the petitioners have a right to demand. This practice was only granted for two years and with the express reservation from respondent corporation’s owner that it cannot continue the same in view of the company’s current financial condition. Pag-asa Steel Works Inc v CA To ripen into a company practice that is demandable as a matter of right, the giving of the increase should not be by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of the employer. The only instance when petitioner admittedly implemented a wage order despite the fact that the employees were not receiving salaries below the minimum wage was under Wage Order No. NCR-07. Petitioner, however,

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explains that it did so because it was agreed upon in the CBA that should a wage increase be ordered within six months from its signing, petitioner would give the increase to the employees in addition to the CBA-mandated increases. Respondent’s isolated act could hardly be classified as a "company practice" or company usage that may be considered an enforceable obligation. E. Company Policies China Banking Corp v Borromeo Forfeiture of benefits/privileges may also be effected in cases where infractions or violations were incurred in connection with or arising from the application/availment thereof. It is well recognized that company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on the parties and must be complied with until finally revised or amended unilaterally or preferably through negotiation or by competent authority. 1.05 LAW AND WORKER Cebu Royal Plant v Minster of Labor Sec. 8, Rule I, Book VI, of the Rules and Regulations implementing the Labor Code: Disease as a ground for dismissal. — Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his coemployees, the employer shall not terminate his employment unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. We agree that there was here an attempt to circumvent the law by separating the employee after five months' service to prevent

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him from becoming a regular employee, and then rehiring him on probation, again without security of tenure. We cannot permit this subterfuge if we are to be true to the spirit and mandate of social justice. On the other hand, we have also the health of the public and of the dismissed employee himself to consider. Hence, although we must rule in favor of his reinstatement, this must be conditioned on his fitness to resume his work, as certified by competent authority. Sinco – Philippine Constitutional Law pp130-134 Bernas – 1987 Constitution of the Philippines: A Commentary pp 441-445 1.06 LABOR CASE Lapanday Agricultural Development Corp v CA The enforcement of the written contract does not fall under the jurisdiction of the NLRC because the money claims involved therein did not arise from employer-employee relations between the parties and is intrinsically a civil dispute. Thus, jurisdiction lies with the regular courts. The RTC has jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence that where no employeremployee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists. Article 217 of the Labor Code as amended vests upon the labor arbiters exclusive original jurisdiction only over the following: 1. Unfair labor practices; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;

LABOR MIDTERMS MAGIC NOTES!
Claims for actual, moral exemplary and other form of damages arising from employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving legality of strikes and lockouts; and 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. In all these cases, an employer-employee relationship is an indispensable jurisdictional requisite.
4.

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The existence of an employment relation is not dependent on how the worker is paid but on the presence or absence of control over the means and method of the work. The amount earned in excess

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necessary or proper for the conduct of its business or concern to provide certain disciplinary measures to implement said rules and to assure that the same be complied with. At the same time, it is one of the fundamental duties of the employee to yield obedience to all reasonable rules, orders, and instructions of the employer, and willful or intentional disobedience thereof, as a general rule, justifies rescission of the contract of service and the preemptory dismissal of the employee. In the case at bar, there is NO exceptional circumstances to warrant the grant of financial assistance or separation pay to petitioner. G did not only violate company disciplinary rules and regulations. He falsified his employment application form by not stating therein that he is the nephew of Mr. Danao, respondent Wyeth’s Nutritional Territory Manager. G manifested his slack of moral principle through his infractions. In simple term, he is dishonest. Philcor Employees Union v Phil Global Communications PhilCom, being in the communications industry, is engaged in a vital industry protected from strikes and lockouts by PD 823 as amended by PD 849. The Secretary had already assumed jurisdiction. Striking employees defied the returnto-work order. Regardless of their motives, validity of claims, or pending motions, the striking employees should have ceased and desisted from all acts undermining the authority granted to the Secretary under Art. 263(g). A return-towork order is immediately effective and executory despite the filing of a motion for reconsideration. It must be strictly complied with even during the pendency of any petition questioning its validity. A return-to-work order imposes a duty that must be discharged more than it confers a right that may be waived. While the workers may choose not to obey, they do so at the risk of severing their relationship with their employer as it is valid ground for dismissal. Art. 264(a) governs defiance of such order. Limitations

of the “boundary hulog” is equivalent to wages and the fact that the power of dismissal was not mentioned in the Kasunduan did not mean that private respondent never exercised such power, or could not exercise such power. 1.07 CASE DECISION Anino v NLRC A decision should faithfully comply with Sec. 14, Art. VIII of the Constitution. (No decision shall be rendered by any court [or quasi-judicial body] without expressing therein clearly and distinctly the facts of the case and the law on which it is based.) The NLRC was definitely wanting in the observance of the constitutional requirement. It merely raised a doubt on the motive of the complaining employees and took "judicial notice that in one area of Mindanao, the mining industry suffered economic difficulties." The factual and legal bases of public respondent's conclusions were bereft of substantial evidence — the quantum of proof in labor cases — its disposition is manifestly a violation of the constitutional mandate and an exercise of grave abuse of discretion. Such decision is a nullity. EDI Staff Builders International Inc v Magsino No undue sympathy is to be accorded to any claim of a procedural misstep in labor cases. Such must be decided accdg to justice and equity. Petitioners not implausibly ascribed to the fault of counsel failure to file a position paper with Labor Arbiter. Court deems it best to admit such evidence. 1.08 MANAGEMENT FUNCTION Recognition It prescribe Gustilo v Wyeth Phils Inc is the employer’s prerogative to reasonable rules and regulations

Villamaria v CA Under the boundary-hulog scheme, a dual juridical relationship is created: that of employer-employee and vendor-vendee. The Kasunduan did not extinguish the employeremployee relationship of the parties extant before the execution of said deed. The boundary system is a scheme by an owner/operator engaged in transporting passengers as a common carrier to primarily govern the compensation of the driver, that is, the latter’s daily earnings are remitted to the owner/operator less the excess of the boundary which represents the driver’s compensation. Under this system, the owner/operator exercises control and supervision over the driver. The management of the business is still in the hands of the owner/operator, who, being the holder of the certificate of public convenience, must see to it that the driver follows the route prescribed by the franchising and regulatory authority, and the rules promulgated with regard to the business operations. The fact that the driver does not receive fixed wages but only the excess of the “boundary” given to the owner/operator is not sufficient to change the relationship between them. Indubitably, the driver performs activities which are usually necessary or desirable in the usual business or trade of the owner/operator.

LABOR MIDTERMS MAGIC NOTES!
DOLE Phils v Pawis The exercise of management prerogative is not unlimited. It is subject to the limitations provided by law. In this case, there was a CBA (meal allowance provision is found in their previous CBAs, the 1985-1988 CBA and the 19901995 CBA), and compliance therewith is mandated by the express policy of the law. Valiao v CA So irresponsible an employee like petitioner does not deserve a place in the workplace, and it is within the management’s prerogative of WNC to terminate his employment. Even as the law is solicitous of the welfare of employees, it must also protect the rights of an employer to exercise what are clearly management prerogatives. As long as the company’s exercise of those rights and prerogatives is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld. 1.9 COMPROMISE AND WAIVER Art 227 LC Compromise agreements. Any compromise settlement, including those involving labor`standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the`regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court, shall not assume jurisdiction over issues involved thereinexcept in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion. Art 2028 CC A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.

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Art 2036 CC A compromise comprises only those objects which are definitely stated therein, or which by necessary implication from its terms should be deemed to have been included in the same. A general renunciation of rights is understood to refer only to those that are connected with the dispute which was the subject of the compromise. Acuna v CA Quitclaims executed by the employees are commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the workers' legal rights, considering the economic disadvantage of the employee and the inevitable pressure upon him by financial necessity. Nonetheless, the so-called "economic difficulties and financial crises" allegedly confronting the employee is not an acceptable ground to annul the compromise agreement unless it is accompanied by a gross disparity between the actual claim and the amount of the settlement. The petitioners were not in any way deceived, coerced or intimidated into signing a quitclaim waiver in the amounts of P13,640, P15,080 and P16,200 respectively. Nor was there a disparity between the amount of the quitclaim and the amount actually due the petitioners. Oriental Ship Management Co Inc v CA Pacta privata juri publico derogare non possunct. Private agreements between parties cannot derogate from public right. The law is solicitous of the welfare of employees because they stand on unequal footing with their employers and are usually left at the mercy of the latter. This is especially true of Filipino migrant workers who, alone in a foreign country, might have no adequate alternative resources even for their own personal daily needs. Hence, quitclaims signed by our migrant workers, such as the Letters of Indemnity in the instant case, are viewed with strong disfavor. Public policy dictates that they be presumed to have been executed at the behest of the employer. It is the employer's duty to prove that

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such quitclaims were voluntary. The employee's acknowledgment of his termination with nary a protest or objection is not enough to satisfy the requirement of voluntariness on his part. Periquet v NLRC Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. EMCO Plywood Corp v Abelgas The mere fact that the employees were not physically coerced or intimidated does not necessarily imply that they freely or voluntarily consented to the terms thereof. The corporation, and not its employees, has the burden of proving that the Quitclaims were voluntarily entered into. Because the retrenchment was illegal and of no effect, the Quitclaims were therefore not voluntarily entered into by respondents. Consent was similarly vitiated by mistake or fraud. Sarocam v Interorient Maritime While petitioner may be correct in stating that quitclaims are frowned upon for being contrary to public policy, the Court has, likewise, recognized legitimate waivers that represent a voluntary and reasonable settlement of a worker’s claim which should be respected as the law between the parties. Where the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding undertaking.

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In the instant case, petitioner wrote the release and quitclaim with his own hand. From the document itself, the element of voluntariness in its execution is evident. Petitioner also appears to have fully understood the contents of the document he was signing, as the important provision thereof had been relayed to him in Filipino. Section 2: Labor and the Constitution STATUTORY REFERENCE – 1935, 1973 AND 1987 CONSTITUTIONS 2.01 HISTORICAL BACKGROUND/RATIONALE Antamoc Goldfields Mining Co v CIR In Commonwealth Act No. 103, and by it, our Government no longer performs the role of a mere mediator or intervenor but that of the supreme arbiter. The policy of laissez faire has to some extent given way to the assumption by the government of the right of intervention even in contractual relations affected with public interests. Justice Laurel in Ang Tibay, and National Workers Brotherhood v Court of Industrial Relations, and National Labor Union, Inc. states that our Constitution was adopted in the midst of surging unrest and dissatisfaction resulting from economic and social distress which was threatening the stability of governments the world over. Embodying the spirit of the present epoch, general provisions were inserted in the Constitution which are intended to bring about the needed social and economic equilibrium between component elements of society through the application of what may be termed as the justitia communis advocated by Grotius and Leibnits many years ago to be secured through the counterbalancing of economic and social forces and opportunities which should be regulated, if not controlled, by the State or placed, as it were, in custodia societatis. 'The promotion of social justice to in sure the wellbeing and economic security of all the people' was thus inserted as vital principle in our Constitution. (Sec. 5, Art. II, Constitution) 2.02 NATURE OF PROVISION

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PAL v Santos The sympathy of the Court is on the side of the laboring classes, not only because the Constitution imposes such sympathy, but because of the one-sided relation between labor and capital. The constitutional mandate for the promotion of labor is as explicit as it is demanding. The purpose is to place the workingman on an equal plane with management — with all its power and influence — in negotiating for the advancement of his interests and the defense of his rights. Under the policy of social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those with less privileges in life should have more privileges in law. (in short, interpretation should be made in favor of the laborers) 2.03 1987 CONSTITUTION A. Labor Sector - Characterized 1987 CONSTITUTION ART II SEC 18 The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Bernas pp 92-95 B. Protection of Labor - Guarantees 1987 CONSTITUTION ART XIII Sec 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 selforganization, 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 decisionmaking processes affecting their rights and benefits as may be provided by law.

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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. 1935 CONSTITUTION ART XIV Sec 6 The State shall afford protection to labor, especially to working women, and minors, and shall regulate the relations between the landowner and tenant, and between labor and capital in industry and in agriculture. The State may provide for compulsory arbitration. 1973 CONSTITUTION ART II Sec 9 The State shall afford protection to labor, promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the relation between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work. The State may provide for compulsory arbitration. 1987 CONSTITUTION ART XIII Sec 1 The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

LABOR MIDTERMS MAGIC NOTES!
1987 CONSTITUTION ART II Sec 10 The State shall promote social justice in all phases of national development. 1987 CONSTITUTION ART II Sec 18 The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Bernas The Constitution of the Republic of the Philippines pp. 1194-1197 C. Social Justice 1973 CONSTITUTION ART II Sec 6 The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits. 1935 CONSTITUTION ART II Sec 5 The promotion of social justice to insure the wellbeing and economic security of all the people should be the concern of the State. 1987 CONSTITUTION ART XIII Sec 1 The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. 1987 CONSTITUTION ART XIII Sec 2 The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. Definition – Social Justice

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Calalang v Williams Social Justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Limits of Use PLDT v NLRC The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character. Agabon v NLRC Prior to 1989 - the rule was that a dismissal or termination is illegal if the employee was not given any notice. In the 1989 case of Wenphil Corp. v. National Labor Relations Commission - where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as the Wenphil or Belated Due Process Rule. On January 27, 2000, in Serrano violation by the employer of the notice requirement in termination for just or authorized causes was not a denial of due process that will nullify the termination. However, the dismissal is ineffectual and the employer must pay full backwages from the time of termination until it is judicially declared that the dismissal was for a just or authorized cause.

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The case at bar: Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights.
2.04 CONSTITUIONAL RIGHTS AND LABOR LAW Management and the Constitution Dayan v Bayer of the Phil Islands The 2 notice and hearing rule is indispensable for a dismissal to be validly effected, but if it is for a just and valid cause, the failure to observe procedural requirements does not invalidate the dismissal of the employee. Instead, he must be granted separation pay. Whether reinstated or given separation pay, he should be paid backwages if he has been laid off without written notice 30 days in advance. For the omission, an appropriate sanction should be imposed depending on the fact and gravity of the situation. Manila Electric Company v Quisumbing Additionally, we recognize that contracting out is not unlimited; rather it is a prerogative that management enjoys subject to well-defined legal limitations. As we have previously held, the company can determine in its best business judgment whether it should contract out performance of some if its work for as long as the employer is motivated by good faith, and the contracting out must not have been resorted to circumvent the law or must not have been the result of malicious or arbitrary action. Given these realities, we recognize that a balance already exists in the parties’ relationship with respect to contracting out; MERALCO has its legally defined and protected management prerogatives while workers are guaranteed their own protection through specific labor provisions and the recognition of limits to the exercise of management prerogatives. Agabon v NLRC

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Sarocam v Interorient Maritime Labor as Property Asuncion v NLRC A worker’s employment is property in the constitutional sense. He cannot be deprived of his work without due process. In order for the dismissal to be valid, not only must it be based on just cause supported by clear and convincing evidence, the employee must also be given an opportunity to be heard and defend himself. It is the employer who has the burden of proving that the dismissal was with just or authorized cause. The failure of the employer to discharge this burden means that the dismissal is not justified and that the employee is entitled to reinstatement and backwages. Executive Secretary v CA Due Process Requirements Ang Tibay v CIR Primary rights (1) the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. (2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. (3) While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support it is a nullity, a place when directly attached. (4) Not only must there be some evidence to support a finding but the evidence must be "substantial. (5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. (6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of

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the controversy, and not simply accept the views of a subordinate in arriving at a decision. (7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decision rendered. Air Manila Inc v Balatbat And this administrative due process is recognized to include (a) the right to notice, be it actual or constructive, of the institution of the proceedings that may affect a person's legal rights; (b) reasonable opportunity to appear and defend his rights, introduce witnesses and relevant evidence in his favor, (c) a tribunal so constituted as to give him reasonable assurance of honesty and impartiality, and one of competent jurisdiction; and (d) a finding or decision by that tribunal supported by substantial evidence presented at the hearing, or at least contained in the records or disclosed to the parties affected. Century Textile Mills v NLRC The twin requirements for notice and hearing constitute essential elements of due process in cases of employee dismissal: the requirement of notice is intended to inform the employee concerned of the employer’s intent and the reason for the proposed dismissal; upon the other hand, the requirement of hearing affords the employee the opportunity to answer his employer’s charges against him and accordingly to defend himself. Liberty of Contract and State Interference Leyte Land Transportation v Leyte Farmers and Workers Union The requisites of a valid dismissal are (1) the dismissal must be for nay of the causes expressed in Art 282 LC, and (2) the employee must be given an opportunity to be heard and to defend himself. The substantive and procedural laws must be strictly complied with before a worker can be dismissed from his employment because what is at stake is not only the employee’s position but his livelihood.

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Victoriano v Elizalde Rope Workers Union The prohibition on impairment of obligations by Statute is not unqualified. It prohibits only unreasonable impairment. In spite of the constitutional prohibition, the State continues to possess authority to safeguard the vital interests of the people. The reservation of essential attributes of sovereign power is read into contracts as a postulate to the preservation of the legal order. The contract clause of the Constitution must therefore be not only in harmony with, but also in subordination to the reserved power of the state to safeguard vital interests of the people. This has special application to contract regulating relations between capital and labor which are not merely contractual, and said labor contracts, for being impressed with public interest, must yield to the common good. Welfare State Alalayan v NPC The welfare state concept is not alien to the philosophy our Constitution. It is implicit in quite a few of its provisions. There is the clause on the promotion of social justice to ensure the wellbeing and economic security of all the people, as well as the pledge of protection to labor with the specific authority to regulate the relations between landowners and tenants and between labor and capital. Laissez-faire Employees Confederation of the Phils v National Wages and Productivity Commission Apparently, ECOP is of the mistaken impression that Republic Act No. 6727 is meant to "get the Government out of the industry" and leave labor and management alone in deciding wages. The Court does not think that the law intended to deregulate the relation between labor and capital for several reasons: (1 ) The Constitution calls upon the State to protect the rights of workers and promote their welfare; (2) the Constitution also makes it a duty of the State "to intervene when the common goal so

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demands" in regulating property and property relations; (3) the Charter urges Congress to give priority to the enactment of measures, among other things, to diffuse the wealth of the nation and to regulate the use of property; (4) the Charter recognizes the "just share of labor in the fruits of production;" (5) under the Labor Code, the State shall regulate the relations between labor and management; (6) under Republic Act No. 6727 itself, the State is interested in seeing that workers receive fair and euitable wages; and (7) the Constitution is primarily a document of social justice, and although it has recognized the importance of the private sector, it has not embraced fully the concept of laissez faire or otherwise, relied on pure market forces to govern the economy; We can not give to the Act a meaning or intent that will conflict with these basic principles. Participation in Decision Making Process PAL V NLRC Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. Thus, even before Article 211 of the Labor Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of the State: "(d) To promote the enlightenment of workers concerning their rights and obligations . . .as employees." This was, of course, amplified by Republic Act No. 6715 when it decreed the "participation of workers in decision and policy making processes affecting their rights, duties and welfare." PAL's position that it cannot be saddled with the "obligation" of sharing management prerogatives as during the formulation of the Code, Republic Act No. 6715 had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While such "obligation" was not yet founded in law when the Code was formulated, the attainment of a harmonious labormanagement relationship and the then already existing state policy of enlightening workers concerning their rights as employees demand no less than the observance of transparency in managerial moves affecting employees' rights.

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Section 3: Labor and the Civil Code STATUTORY REFERENCE – Civil Code, RA 386 3.01 ROLE OF LAW Art 1700 CC 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. Labor Contracts Brew Master International v NAFLU Verily, relations between capital and labor are not merely contractual. They are impressed with public interest and labor contracts must, perforce, yield to the common good. While the employer is not precluded from prescribing rules and regulations to govern the conduct of his employees, these rules and their implementation must be fair, just and reasonable. PTTC v NLRC An employer is free to regulate, according to his discretion and best business judgment, all aspects of employment, “from hiring to firing,” except in cases of unlawful discrimination or those which may be provided by law The petitioner’s policy of not accepting or considering as disqualified from work any woman worker who contracts marriage runs afoul of the test of, and the right against, discrimination, afforded all women workers by our labor laws and by no less than the Constitution. Tolentino Vol 5 pp 277-278 3.02 EMPLOYER-EMPLYEE CONDUCT STANDARD

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Art 1701 CC Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public. Fair Treatment General Bank and Trust Co v CA Basically, the right of an employer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. It must not be oppressive and abusive since it affects one’s person and property. Star Paper Corp v Simbol
The absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently draw inferences from the legislature’s silence that married persons are not protected under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative.

Mutual Obligation Star Paper Corp v Simbol Firestone tire and Rubber Co v Lariosa The employer’s obligation to give him workers just compensation and treatment carries with it the corollary right to expect form the workers adequate work, diligence and good conduct. Law Compliance Sarmiento v Tuico It is also important to emphasize that the return-to-work order not so much confers a right as it imposes a duty; and while as a right it may be waived, it must be discharged as a duty even against the worker's will. Returning to work in this situation is not a matter of option or voluntariness but of obligation

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Employee Obedience and Compliance Employer Orders PCIB v Jacinto Any employee who is entrusted with responsibility by his employer should perform the task assigned to him with care and dedication. The lack of a written or formal designation should not be an excuse to disclaim any responsibility for any damage suffered by the employer due to his negligence. The measure of the responsibility of an employee is that if he performed his assigned task efficiently and according to the usual standards, then he may not be held personally liable for any damage arising therefrom. Failing in this, the employee must suffer the consequences of his negligence if not lack of due care in the performance of his duties. GTE Directories Corp v Sanchez To sanction disregard or disobedience by employees of a rule or order laid down by management, on the pleaded theory that the rule or order is unreasonable, illegal, or otherwise irregular for one reason or another, would be disastrous to the discipline and order that it is in the interest of both the employer and his employees. Deliberate disregard or disobedience of rules, defiance of management authority cannot be countenanced. Gustilo v Wyeth Philippines Employer Obligation Lagniton v NLRC The days are gone when the employee was at the mercy of his employer and could be dismissed for the flimsiest reasons or for no reason at all. The tyrannical employer is an anachronism in this enlightened era. The employee today, once defenseless and often oppressed, has found new strength in the protection of the law and the proud realization that he performs a symbolic role with the employer in their common enterprise. As such, he must be treated not as a disdained subordinate but with the respect and fairness, if

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not affection and gratitude, that is due to an equal partner. Manega v NLRC An employer can terminate the services of an employee only for valid and just causes which must be supported by clear and convincing evidence. The employer has the burden of proving that the dismissal was indeed for a valid and just cause. Failure to do so results in a finding that the dismissal was unjustified. Special Steel Products v Villarea ART. 116. Withholding of wages and kickbacks prohibited. – It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages (and benefits) of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s consent. An employer cannot simply refuse to pay the wages or benefits of its employee because he has either defaulted in paying a loan guaranteed by his employer; or violated their memorandum of agreement; or failed to render an accounting of his employer’s property. l Section 4: Labor and International Covenants (Labor Standards and Welfare Law) 4.01 UNIVERSAL RIGHTS DECLARATION OF HUMAN

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(2) No one shall be arbitrarily deprived of his property. Art 22 Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality. Art 23 (1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. (2) Everyone, without any discrimination, has the right to equal pay for equal work. (3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. (4) Everyone has the right to form and to join trade unions for the protection of his interests. Art 24 Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay. Art 25 (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. (2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

Art 3 Everyone has the right to life, liberty and security of person Art 7 All are equal entitled without any protection of the law. protection against any of this Declaration and such discrimination. before the law and are discrimination to equal All are entitled to equal discrimination in violation against any incitement to

Art 17 (1) Everyone has the right to own property alone as well as in association with others.

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4.02 INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL AND CULTURAL RIGHTS PART III Art 6 1. The States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right. 2. The steps to be taken by a State Party to the present Covenant to achieve the full realization of this right shall include technical and vocational guidance and training programmes, policies and techniques to achieve steady economic, social and cultural development and full and productive employment under conditions safeguarding fundamental political and economic freedoms to the individual.

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PART III Art 9 The States Parties to the present Covenant recognize the right of everyone to social security, including social insurance. PART III Art 11 1. The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The States Parties will take appropriate steps to ensure the realization of this right, recognizing to this effect the essential importance of international co-operation based on free consent. 2. The States Parties to the present Covenant, recognizing the fundamental right of everyone to be free from hunger, shall take, individually and through international co-operation, the measures, including specific programmes, which are needed: (a) To improve methods of production, conservation and distribution of food by making full use of technical and scientific knowledge, by disseminating knowledge of the principles of nutrition and by developing or reforming agrarian systems in such a way as to achieve the most efficient development and utilization of natural resources; (b) Taking into account the problems of both food-importing and food-exporting countries, to ensure an equitable distribution of world food supplies in relation to need. 4.03 INTERNATIONAL COVENANT ON CIVIL AND POLITICAL RIGHTS PART III Art 8 1. No one shall be held in slavery; slavery and the slave-trade in all their forms shall be prohibited. 2. No one shall be held in servitude. 3. (a) No one shall be required to perform forced or compulsory labour (b) Paragraph 3 (a) shall not be held to preclude, in countries where imprisonment with hard labour may be imposed as a punishment for a

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crime, the performance of hard labour in pursuance of a sentence to such punishment by a competent court. (c) For the purpose of this paragraph the term "forced or compulsory labour" shall not include: (i) Any work or service, not referred to in subparagraph (b), normally required of a person who is under detention in consequence of a lawful order of a court, or of a person during conditional release from such detention; (ii) Any service of a military character and, in countries where, conscientious objection is recognized, any national service required by law of conscientious objectors; (iii) Any service exacted in cases of emergency or calamity threatening the life or well-being of the community; (iv) Any work or service which forms part of normal civil obligations. 4.04 CONVENTIONS AND RECOMMENDATIONS OF THE INTERNATIONAL LABOR ORGANIZATION (ILO) International Conventions International School Alliance of Educators v Quisumbing The Constitution, Labor Code and the International Covenant on Economic, Social, and Cultural Rights impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. This rule applies to the School, its "international character" notwithstanding. Section 5: Philippines 5.01 Decree Title Art 1 LC Name of Decree. This Decree shall be known as the "Labor Code of the Philippines". The Labor Code of the

PART III Art 7 The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular: (a) Remuneration which provides all workers, as a minimum, with: (i) Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work; (ii) A decent living for themselves and their families in accordance with the provisions of the present Covenant; (b) Safe and healthy working conditions; (c) Equal opportunity for everyone to be promoted in his employment to an appropriate higher level, subject to no considerations other than those of seniority and competence; (d) Rest, leisure and reasonable limitation of working hours and periodic holidays with pay, as well as remuneration for public holidays

5.02 Effectivity

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Art 2 LC Date of effectivity. This Code shall take effect six (6) months after its promulgation. 5.3 Policy Declaration Art 3 LC Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self organization, collective bargaining, security of tenure, and just and humane conditions of work. 5.04 Applicability Art 6 LC Applicability. All rights and benefits granted to workers under this Code shall, except as may otherwise be provided herein, apply alike to all workers, whether agricultural or nonagricultural. (As amended by Presidential Decree No. 570-A, November 1, 1974) Art 276 LC Government employees. The terms and conditions of employment of all government employees, including employees of government-owned and controlled corporations, shall be governed by the Civil Service Law, rules and regulations. Their salaries shall be standardized by the National Assembly as provided for in the New Constitution. However, there shall be no reduction of existing wages, benefits and other terms and conditions of employment being enjoyed by them at the time of the adoption of this Code. 1987 CONSTITUTION ART IXb Sec 2(1) The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters. Domestic and Overseas Workers DMA Shipping Phils v Cabillar Requisite Relationship

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Uy v Bueno The minutes of the depositors' meeting clearly showed that Uy was a mere depositor of the bank. She was only elected as officer of the Interim Board of Directors craeted by the association of depositors with the sole task of rehabilitating the bank (which is under receivership). The act of dismissing Bueno by Uy cannot be deemed as an act as an officer of the bank. Consequently, it cannot be held that there existed an employer-employee relationship between Uy and Bueno. The requirement of employeremployee relationship is jurisdictional for the provisions of the Labor Code on Post-employment to apply. Since such relationship was not established, the labor arbiter never acquired jurisdiction over Uy. Test – GOCC Cabrera v NLRC The rule now is that only governmentowned or controlled corporations with original charters come under the Civil Service. The NASECO having been organized under the Corporation Law and not by virtue of a special legislative charter, its relations with its personnel are governed by the Labor Code and come under the jurisdiction of the National Labor Relations Commission. Gamogamo v PNOC Shipping and Transport The Court cannot uphold petitioner’s contention that his 14 years of service with the DOH should be considered because his last 2 employers were government-owned and controlled corporations and fall under the Civil Service Law. Article IX (B), Section 2 paragraph 1 of the 1987 Constitution states: “The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government owned or controlled corporations with original charters”. While respondent and LUSTEVECO are government-owned and controlled corporations,

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they have no original charters; hence, they are not under the Civil Service Law Light Railway Transit Authority v Venus LRTA is a government-owned and controlled corporation with an original charter, Executive Order No. 603, Series of 1980, as amended, and thus under the exclusive jurisdiction only of the Civil Service Commission, not the NLRC. Under the present state of the law, the test in determining whether a government-owned or controlled corporation is subject to the Civil Service Law is the manner of its creation such that government corporations created by special charter are subject to its provisions while those incorporated under the general Corporation Law are not within its coverage.” International Agencies Ebro III v NLRC The grant of immunity from local jurisdiction to ICMC . . . is clearly necessitated by their international character and respective purposes. The objective is to avoid the danger of partiality and interference by the host country in their internal workings. The exercise of jurisdiction by the Department of Labor in these instances would defeat the very purpose of immunity, which is to shield the affairs of international organizations, in accordance with international practice, from political pressure or control by the host country to the prejudice of member State of the organization, and to ensure the unhampered performance of their functions. (International Catholic Migration Commission v. Calleja) School Teachers National Mines and Allied Workers Union v San Ildefonso College On the issue of whether the individual petitioners were permanent employees, it is the Manual of Regulations for Private Schools, and not the Labor Code, which is applicable. This was settled in University of Sto. Tomas v. NLRC, where we explicitly ruled that for a private school

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teacher to acquire permanent status in employment and, therefore, be entitled to security of tenure, the following requisites must concur: (1) the teacher is a full-time teacher; (2) the teacher must have rendered three (3) consecutive years of service; and (3) such service must have been satisfactory. Chiang Kai Shek College v CA Under the Manual of Regulations for Private Schools, for a private school teacher to acquire a permanent status of employment and, therefore, be entitled to a security of tenure, the following requisites must concur: (a) the teacher is a full-time teacher; (b) the teacher must have rendered three consecutive years of service; and (c) such service must have been satisfactory. Since Ms. Belo has measured up to these standards, she therefore enjoys security of tenure. Religious Corporations Austria v NLRC An ecclesiastical affair is one that concerns doctrine, creed or form or worship of the church, or the adoption and enforcement within a religious association of needful laws and regulations for the government of the membership, and the power of excluding from such associations those deemed unworthy of membership. Based on this definition, an ecclesiastical affair involves the relationship between the church and its members and relate to matters of faith, religious doctrines, worship and governance of the congregation. Managerial Employees Penaranda v Baganga Plywood Corp The Implementing Rules of the Labor Code state that managerial employees are those who meet the following conditions: “(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof;

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“(2) They customarily and regularly direct the work of two or more employees therein; “(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight.” The Implementing Rules of the Labor Code define members of a managerial staff as those with the following duties and responsibilities: “(1) The primary duty consists of the performance of work directly related to management policies of the employer; “(2) Customarily and regularly exercise discretion and independent judgment; “(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision special assignments and tasks; and “(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above.” 5.05 RULE MAKING POWER Art 5 LC Rules and regulations. The Department of Labor and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation. Limitation – Rule Making Power

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CBTC Employees Union v Clave Aforementioned section and interpretative bulletin are null and void, having been promulgated by the then Secretary of Labor in excess of his rule-making authority. It was pointed out, inter alia, that in the guise of clarifying the provisions on holiday pay, said rule and policy instructions in effect amended the law by enlarging the scope of the exclusions. Sonza v ABS-CBN Policy Instruction No. 40 by Minister of Labor said the types of employees in broadcast are the station and program employees. Court said this instruction is a mere executive issuance not binding on the Court. Rizal Empire Insurance Group v NLRC Administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law, and are entitled to great respect 5.06 LAW INTERPRETATION Art 4 LC Construction in favor of labor. All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor. Art 1702 CC In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. Tolentino Vol 5 p 279 Liberal Construction Duncan v Association v Glaxo Wellcome The prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s employees is reasonable under the circumstances because

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relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth. Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play. Salinas v NLRC It is basic and irrefragable rule that in carrying out and interpreting the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. The interpretation herein made gives meaning and substance to the liberal and compassionate spirit of the law enunciated in Article 4 of Labor Code that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor". In favor Labor – Rationale Abella v NLRC In any event, it is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. It is the kind of interpretation which gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that `all doubts in the implementation and interpretation of the provisions of this Code

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including its implementing rules and regulations shall be resolved in favor of labor." The policy is to extend the applicability of the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor. Asian Transnational Corp v CA In any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For the working man’s welfare should be the primordial and paramount consideration. Doubt Factual Consideration Clemente v GSIS GSIS’s conservative stand is not consistent with the liberal interpretation of the Labor Code and the social justice guarantee embodied in the Constitution in favor of workers. Acuna v CA It is a time-honored rule that in controversies between a worker and his employer, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing should be resolved in the worker's favor. The policy is to extend the applicability of the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor. Accordingly, the private respondents are solidarily liable with the foreign principal for the overtime pay claims of petitioners. No Doubt

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interpretation of the provisions of the Labor Code, including its implementing rules and regulations, the doubt shall be resolved in favor of the laborer, the court finds that the same has no application in this case since the pertinent provisions of the Labor Code leave no room for doubt either in their interpretation or application. Sweeping Interpretation Bravo Employees Compensation Commission We are aware of the mandate that social legislation should be applied in consonance with the principles of social justice and protection to labor. However, we cannot adopt a sweeping interpretation of the law in favor of labor lest we engage in judicial legislation.

PAL v NLRC That there should be care and solicitude in the protection and vindication of the rights of workingmen cannot be gainsaid; but that care and solicitude cannot justify disregard of relevant facts or eschewal of rationality in the construction of the text of applicable rules in order to arrive at a disposition in favor of an employee who is perceived as otherwise deserving of sympathy and commiseration. Equity and Moral Consideration Manning International Corp v NLRC Considerations of equity and social justice” cannot prevail over against the expressed provision of the labor laws allowing dismissal of employees for cause and without any provision for separation pay. Fairness Reliance Surety and Insurance Co v NLRC The sympathy of the Court is on the side of the laboring classes, not only because the Constitution imposes sympathy but because of the one-sided relation between labor and capital. The Court must take care, however, that in the contest between labor and capital, the results

Bonifacio v GSIS While the court does not dispute petitioner's contention that under the law, in case of doubt in the implementation and

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achieved are fair and in conformity with the rules. Balancing Conflicting Claims PAL v NLRC That there should be care and solitude in the protection and vindication of the rights of workingmen cannot be gainsaid; but that care and solicitude cannot justify disregard of relevant facts or eschewal of rationality in the construction of the text of applicable rules in order to arrive at a disposition in favor of an employee who is perceived as otherwise deserving of sympathy and commiseration. Duncan Association v Glaxo Wellcome The sympathy of the Court is on the side of the laboring classes, not only because the Constitution imposes sympathy but because of the one-sided relation between labor and capital. The Court must take care, however, that in the contest between labor and capital, the results achieved are fair and in conformity with the rules. Section 6: Work Relationship STATUTORY REFERENCE Art 106 (4) LC There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. Art 107 LC Indirect employer. The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an

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employer, contracts with an independent contractor for the performance of any work, task, job or project. Art 109 LC Solidary liability. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. 6.01 WORK RELATIONSHIP A. Definitions Art 97 LC a. "Person" means an individual, partnership, association, corporation, business trust, legal representatives, or any organized group of persons. b. "Employer" includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the government and all its branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit private institutions, or organizations. c. "Employee" includes any individual employed by an employer. Art 167 LC f. "Employer" means any person, natural or juridical, employing the services of the employee. g. "Employee" means any person compulsorily covered by the GSIS under Commonwealth Act Numbered One hundred eighty-six, as amended, including the members of the Armed Forces of the Philippines, and any person employed as casual, emergency, temporary, substitute or contractual, or any person compulsorily covered by the SSS under Republic Act Numbered Eleven hundred sixty-one, as amended.

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Art 212 LC e. "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer. f. "Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment. Policy Instruction No. 40 (1979) – Employment in Broadcast Industry Program employees are those whose skills, talents or services are engaged by the station for a particular or specific program or undertaking and who are not required to observe normal working hours such that on some days they work for less than eight (8) hours and on other days beyond the normal work hours observed by station employees and are allowed to enter into employment contracts with other persons, stations, advertising agencies or sponsoring companies. The engagement of program employees, including those hired by advertising or sponsoring companies, shall be under a written contract specifying, among other things, the nature of the work to be performed, rates of pay, and the programs in which they will work. The contract shall be duly registered by the station with the Broadcast Media Council within three days from its consummation. Employee United Pepsi-Cola Supervisory Union v Laguesma The term “manager” generally refers to “anyone who is responsible for subordinates and other organization resources.” As a class, managers constitute three levels of a pyramid.

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What distinguishes them from the rankand file employees is that they act in the interest of the employer in supervising such rank-and-file employees Managerial employees” may therefore be said to fall into two distinct categories: the “managers” per se, who compose the former group described above, and the “supervisors” who form the latter group. Whether they belong to the first or second category, managers, vis-àvis employers, are, likewise, employees B. Employer-Employee Relationship Factual Test Sonza v ABS-CBN There are 4 elements of employeremployee relationship: 1. Selection of employee - if Sonza didn’t possess his skills, talents and celebrity status, ABS-CBN would not have entered into agreement with him but would have hired him through personnel department 2. Payment of wages - whatever Sonza received arose from the contract and not from the employeremployee relation - the talent fee is so huge that it indicates more a contractual than an employment relationship 3. Power to dismiss - ABS-CBN couln’t retrench Sonza because it is obligated to pay talent fees for duration of contract 4. Control on employee on means and methods - also called control test; most impt to determine relationship - Sonza contends ABS exercised control over means and methods of his work. Court said ABS merely reserved the right to modify the program format and airtime schedule. Its sole concern was the quality of the show and the ratings. How Sonza appeared, sounded, etc. is outside control of ABS. - Sonza contends that ABS exercised control in providing equipment and crew. Court said these are not tools needed by Sonza. What

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he needed were his talent, skills, costume. - Sonza contends that ABS subjected him to rules and standards. Court said that the rules are the TV and Radio Code of the Kapisanan ng Broadcaster sa Pilipinas, merely adopted by ABS as its code of ethics. It applies to broadcasters, not just to ABS employees. Besides, these rules are merely guidelines. - Sonza said his exclusivity is a form of control by ABS. Court said exclusivity is a widespread practice in entertainment industry, as protection of investment in “building up” a talent. Besides, the huge talent fees of an exclusive talent compensates for exclusivity. Asiatic Development Corp v Brogada The question of WON an employeremployee relationship exists is a question of fact. In petitions for review on certiorari under Rule 45, only questions of law may be raised by the parties and passed upon by this Court. Factual findings of quasi-judicial bodies, when adopted and confirmed by the CA and if supported by substantial evidence, are accorded respect and even finality by this Court. Villavilla v CA The records disclose that the relationship between Mercado and the crew members of the ship headed by its skipper, Capt. Pedro Matibag, is one positively showing the existence of a joint venture. This is clearly revealed in the testimonies of Capt. Pedro Matibag and Gil Chua, a crew member, both witnesses for petitioners. It may not be amiss to mention that while petitioners merely raise factual questions which are not proper under Rule 45 of the Rules of Court, We nevertheless went to great lengths in dissecting the facts of this case if only to convince Us that petitioners, who are pauper litigants and seeking claims under a social legislation, have not been denied its benefits. For, We are not unaware that in this jurisdiction all doubts in the implementation and interpretation of provisions of social legislations should be resolved in favor of the working class. But, alas, justice is not fully served by sustaining the contention of the poor simply because he is

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poor. Justice is done by properly applying the law regardless of the station in life of the contending parties. Established Miguel v JCT Group Inc The test for determining an employeremployee relationship hinges on resolving who has the power to select employees, who pays for their wages, who has the power to dismiss them, and who exercises control in the methods and the results by which the work is accomplished.” Wack-Wack Golf and Country Club An independent contractor is one who undertakes “job contracting,” i.e., a person who: (a) carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (b) has substantial capital or investment in the form of tools, equipments, machineries, work premises and other materials which are necessary in the conduct of the business. Jurisprudence shows that determining the existence of an independent contractor relationship, several factors may be considered, such as, but not necessarily confined to, whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of specified pieces of work; the control and supervision of the work to another; the employer’s power with respect to the hiring, firing, and payment of the contractor’s workers; the control of the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. Factors Philippine Global Communicators v De Vera In a long line of decisions, the Court, in determining the existence of an employeremployee relationship, has invariably adhered to

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the four-fold test, to wit: the selection and engagement of the employee; the payment of wages; the power of dismissal; and the power to control the employee’s conduct, or the so-called “control test”, considered to be the most important element. Sonza v ABS-CBN There are 4 elements of employer-employee relationship: 1. Selection of employee 2. Payment of wages 3. Power to dismiss 4. Control on employee on means and methods Jardin v NLRC Four-fold test for employer-employee relations: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power of control the employees conduct.’ NLRC found that the boundary system is a leasehold system which takes it out of the ordinary notion of “control” over employees conduct. The SC iterated its ruling that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employeremployee and not of lessor-lessee. Manila Golf v IAC The Court does not agree that said facts necessarily or logically point to an employeeemployer relationship, and to the exclusion of any form of arrangements, other than of employment, that would make the respondent's services available to the members and guest of the petitioner. As long as it is, the list made in the appealed decision detailing the various matters of conduct, dress, language, etc. covered by the petitioner's regulations, does not, in the mind of the Court, so circumscribe the actions or judgment of the caddies concerned as to leave them little or no freedom of choice whatsoever in the manner of carrying out their services. Control Test

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UERMMMC – RDU v Laguesma in Felix v Buensada A residency or resident physician position in a medical specialty is never a permanent one. Residency connotes training and temporary status. Promotion to the next post-graduate year is based on merit and performance determined by periodic evaluations and examinations of knowledge, skills and bedside manner. Under this system, residents, especially those in university teaching hospitals enjoy their right to security of tenure only to the extent that they periodically make the grade. While physicians (or consultants) of specialist rank are not subject to the same stringent evaluation procedures, specialty societies require continuing education as a requirement for accreditation in good standing, in addition to peer review processes based on performance, mortality and morbidity audits, feedback from residents, interns and medical students and research output. The nature of the contracts of resident physicians meets traditional tests for determining employer employee relationships, but because the focus of residency is training, they are neither here nor there. Moreover, stringent standards and requirements for renewal of specialist rank positions or for promotion to the next postgraduate residency year are necessary because lives are ultimately at stake. R TransportCorp v Ejandra Petitioner is barred to negate the existence of an employer-employee relationship. He has invoked rulings on the right of an employer to dismiss an employee for just cause. The power to dismiss an employee is one of the indications that there was such relationship. Also, A97 of the Labor Code says that employees can be paid in form of commissions. Sonza v ABS-CBN Control on employee on means and methods - also called control test; most impt to determine relationship - Sonza contends ABS exercised control over means and methods of his work. Court said ABS merely reserved the right to modify the

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program format and airtime schedule. Its sole concern was the quality of the show and the ratings. How Sonza appeared, sounded, etc. is outside control of ABS. - Sonza contends that ABS exercised control in providing equipment and crew. Court said these are not tools needed by Sonza. What he needed were his talent, skills, costume. - Sonza contends that ABS subjected him to rules and standards. Court said that the rules are the TV and Radio Code of the Kapisanan ng Broadcaster sa Pilipinas, merely adopted by ABS as its code of ethics. It applies to broadcasters, not just to ABS employees. Besides, these rules are merely guidelines. - Sonza said his exclusivity is a form of control by ABS. Court said exclusivity is a widespread practice in entertainment industry, as protection of investment in “building up” a talent. Besides, the huge talent fees of an exclusive talent compensates for exclusivity. Insular Life v NLRC Rules and regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons who may be insured, subject insurance applications to processing and approval by the Company, and also reserve to the Company the determination of the premiums to be paid and the schedules of payment. None of these really invades the agent's contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an employer-employee relationship between him and the company. Almirez v Infinite Corp Technology Corp Under the control test, an employeremployee relationship exists where the person

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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 the end. Economic Test Sevilla v CA In this jurisdiction, there has been no uniform test to determine the existence of an employer-employee relation. In general, We have relied on the so-called right of control test, “where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, are also considered in determining the existence of an employer-employee relationship. Agreement Insular Life Assurance Co Ltd v NLRC It is axiomatic that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the "employee" is an independent contractor when the terms of the agreement clearly show otherwise. For, the employment status of a person is defined and prescribed by law and not by what the parties say it should be. In determining the status of the management contract, the "four-fold test" on employment earlier mentioned has to be applied. Chavez v NLRC The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer’s power to control the employee’s conduct. The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.

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It bears stressing that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in a contract and providing therein that the employee is an independent contractor when, as in this case, the facts clearly show otherwise. Indeed, the employment status of a person is defined and prescribed by law and not by what the parties say it should be. San Miguel Corp v Abella Although the terms of the non-exclusive contract of service between SMC and [Sunflower] showed a clear intent to abstain from establishing an employer-employee relationship between SMC and [Sunflower] or the latter’s members, the extent to which the parties successfully realized this intent in the light of the applicable law is the controlling factor in determining the real and actual relationship between or among the parties. There being a finding of “labor-only” contracting, liability must be shouldered either by SMC or [Sunflower] or shared by both Lopez v Metropolitan Waterworks and Sewerage System It is axiomatic that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in an agreement and providing therein that the employee is “not an MWSS employee” when the terms of the agreement and the surrounding circumstances show otherwise. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. Method Wage Payment Lazaro v SSS The fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee relationship. In Grepalife v. Judico, the Court upheld the existence of an employer-employee relationship between the insurance company and its agents, despite the fact that the compensation that the agents on commission received was not paid by

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the company but by the investor or the person insured. Almirez v Infinite Corp Techonology The deduction for SSS and tax do not bolster Almirez’s contention that there was an employee-employer relationship. However, only one pay slip was issued (Januaryb 16-31, 2000) and the rest were in cash vouchers. As such, the payslip cannot be considered as proof of an employer-employee relationship. The use of the word “salary” is not determinative of such a relationship either. Salary is defined as remuneration for services given. The contract details her salary and it serves between the parties was the law governing them. But the contract, as pointed out earlier, is bereft of proof of control of Infinite Loop over Almirez. Hours of Work Lazaro v SSS Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee. In Cosmopolitan Funeral Homes, Inc. v. Maalat, the Supreme Court declared that there was an employer-employee relationship, noting that "[the] supervisor, although compensated on commission basis, [is] exempt from the observance of normal hours of work for his compensation is measured by the number of sales he makes. Proof Domasig v NLRC Substantial evidence is sufficient as a basis for judgment on the existence of employeremployee relationship. Proof beyond reasonable doubt is not required as a basis for judgment on the legality of an employer’s dismissal of an employee, nor even preponderance of evidence for that matter, substantial evidence being sufficient. Any competent and relevant evidence to prove the relationship may be admitted. Absence

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Abante v Lamadrid Petitioner Abante was a commission salesman who received 3% commission of his gross sales. No quota was imposed on him by the respondent. He was not required to report to the office at any time or submit any periodic written report on his sales performance and activities. He was not designated by respondent to conduct his sales activities at any particular or specific place. He pursued his selling activities without interference or supervision from respondent company and relied on his own resources to perform his functions. Respondent company did not prescribe the manner of selling the merchandise; he was left alone to adopt any style or strategy to entice his customers. Where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the result of his efforts and not the amount thereof, no relationship of employer-employee exists. Denial R Transport Corp v Ejandra Petitioner is barred to negate the existence of an employer-employee relationship. He has invoked rulings on the right of an employer to dismiss an employee for just cause. The power to dismiss an employee is one of the indications that there was such relationship. Also, A97 of the Labor Code says that employees can be paid in form of commissions. 6.2 INDEPENDENT CONTRACTOR CONTRACTOR ONLY AND LABOR

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In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code. There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. Art 107 LC Indirect employer. The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. Art 109 LC Solidary liability. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor

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for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. DOLE Order No. 18-02 Series of 2002 RULES IMPLEMENTING ARTICLES 106 TO 109 OF THE LABOR CODE, AS AMENDED By virtue of the power vested in the Secretary of Labor and Employment under Articles 5 (Rulemaking) and 106 (Contractor or Subcontractor) of the Labor Code of the Philippines, as amended, the following regulations governing contracting and subcontracting arrangements are hereby issued: Section 1. Guiding principles. - Contracting and subcontracting arrangements are expressly allowed by law and are subject to regulation for the promotion of employment and the observance of the rights of workers to just and humane conditions of work, security of tenure, selforganization, and collective bargaining. Labor-only contracting as defined herein shall be prohibited. Section 2 . Coverage. - These Rules shall apply to all parties of contracting and subcontracting arrangements where employer-employee relationship exists. Placement activities through private recruitment and placement agencies as governed by Articles 25 to 39 of the Labor Code are not covered by these Rules. Section 3. Trilateral Relationship in Contracting Arrangements. In legitimate contracting, there exists a trilateral relationship under which there is a contract for a specific job, work or service between the principal and the contractor or subcontractor, and a contract of employment between the contractor or subcontractor and its workers. Hence, there are three parties involved in these arrangements, the principal which decides to farm out a job or service to a contractor or subcontractor, the contractor or subcontractor which has the

Art 106 LC Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor, if any, shall be paid in accordance with the provisions of this Code.

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capacity to independently undertake the performance of the job, work or service, and the contractual workers engaged by the contractor or subcontractor to accomplish the job work or service. Section 4. Definition of Basic Terms. - The following terms as used in these Rules, shall mean: (a) "Contracting" or "subcontracting" refers to an arrangement whereby a principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. (b) "Contractor or subcontractor" refers to any person or entity engaged in a legitimate contracting or subcontracting arrangement. (c) "Contractual employee" includes one employed by a contractor or subcontractor to perform or complete a job, work or service pursuant to an arrangement between the latter and a principal. (d) "Principal" refers to any employer who puts out or farms out a job, service or work to a contractor or subcontractor. Section 5. Prohibition against labor-only contracting. Labor-only contracting is hereby declared prohibited. For this purpose, labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are present: i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or ii) the contractor does not exercise the right to control over the performance of the work of the contractual employee. The foregoing provisions

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shall be without prejudice to the application of Article 248 (C ) of the Labor Code, as amended. "Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implements, machineries and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job, work or service contracted out. The "right to control" shall refer to the right reserved to the person for whom the services of the contractual workers are performed, to determine not only the end to be achieved, but also the manner and means to be used in reaching that end. Section 6. Prohibitions. Notwithstanding Section 5 of these Rules, the following are hereby declared prohibited for being contrary to law or public policy: (a) Contracting out of a job, work or service when not done in good faith and not justified by the exigencies of the business and the same results in the termination of regular employees and reduction of work hours or reduction or splitting of the bargaining unit; (b) Contracting out of work with a "cabo" as defined in Section 1 (ii), Rule I, Book V of these Rules. "Cabo" refers to a person or group of persons or to a labor group which, in the guise of a labor organization, supplies workers to an employer, with or without any monetary or other consideration whether in the capacity of an agent of the employer or as an ostensible independent contractor; (c) Taking undue advantage of the economic situation or lack of bargaining strength of the contractual employee, or undermining his security of tenure or basic rights, or circumventing the provisions of regular employment, in any of the following instances: i) In addition to his assigned functions, requiring the contractual employee to perform functions which are currently being performed by the regular employees of the principal or of the contractor or subcontractor; ii) Requiring him to sign, as a precondition to employment or continued employment, an antedated resignation letter; a blank payroll; a

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waiver of labor standards including minimum wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or subcontractor from any liability as to payment of future claims; and iii) Requiring him to sign a contract fixing the period of employment to a term shorter than the term of the contract between the principal and the contractor or subcontractor, unless the latter contract is divisible into phases for which substantially different skills are required and this is made known to the employee at the time of engagement; (e) Contracting out of a job, work or service through an in-house agency which refers to a contractor or subcontractor engaged in the supply of labor which is owned, managed or controlled by the principal and which operates solely for the principal; (f) Contracting out of a job, work or service directly related to the business or operation of the principal by reason of a strike or lockout whether actual or imminent; (g) Contracting out of a job, work or service being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self organization as provided in Art. 248 (c) of the Labor Code, as amended. Section 7. Existence of an employeremployee relationship. The contractor or subcontractor shall be considered the employer of the contractual employee for purposes of enforcing the provisions of the Labor Code and other social legislation. The principal, however, shall be solidarily liable with the contractor in the event of any violation of any provision of the Labor Code, including the failure to pay wages. The principal shall be deemed the employer of the contractual employee in any of the following cases, as declared by a competent authority: (a) where there is labor-only contracting; or (b) where the contracting arrangement falls within the prohibitions provided in Section 6 (Prohibitions) hereof. Section 8. Rights of Contractual Employees. Consistent with Section 7 of these Rules, the

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Contractual employee shall be entitled to all the rights and privileges due a regular employee as provided for in the Labor Code, as amended, to include the following: (a) Safe and healthful working conditions; (b) Labor standards such as service incentive leave, rest days, overtime pay, holiday pay, 13th month pay and separation pay; (c) Social security and welfare benefits; (d) Self-organization, collective bargaining and peaceful concerted action; and (e) Security of tenure. Section 9. Contract between contractor or subcontractor and contractual employee. Notwithstanding oral or written stipulations to the contrary, the contract between the contractor or subcontractor and the contractual employee, which shall be in writing, shall include the following terms and conditions: (a) The specific description of the job, work or service to be performed by the contractual employee; (b) The place of work and terms and conditions of employment, including a statement of the wage rate applicable to the individual contractual employee; and (c) The term or duration of employment, which shall be coextensive with the contract of the principal and subcontractor, or with the specific phase for which the contractual employee is engaged, as the case may be. The contractor or subcontractor shall inform the contractual employee of the foregoing terms and conditions on or before the first day of his employment. Section 10. Effect of Termination of Contractual Employment. In cases of termination of employment prior to the expiration of the contract between the principal and the contractor or subcontractor, the right of the contractual employee to separation pay or other related benefits shall be governed by the applicable laws and jurisprudence on termination of employment. Where the termination results from the expiration of the contract between the principal and the contractor or subcontractor, or from the completion of the phase of the job, work or service for which the contractual employee is

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engaged, the latter shall not be entitled to separation pay. However, this shall be without prejudice to completion bonuses or other emoluments, including retirement pay as may be provided by law or in the contract between the principal and the contractor or subcontractor. Section 11. Registration of Contractors or Subcontractors. Consistent with the authority of the Secretary of Labor and Employment to restrict or prohibit the contracting out of labor through appropriate regulations, a registration system to govern contracting arrangements and to be implemented by the Regional Offices is hereby established. The registration of contractors and subcontractors shall be necessary for purposes of establishing an effective labor market information and monitoring. Failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting. Section 12. Requirements for registration. A contractor or subcontractor shall be listed in the registry of contractors and subcontractors upon completion of an application form to be provided by the DOLE. The applicant contractor or subcontractor shall provide in the application form the following information: (a) he name and business address of the applicant and the area or areas where it seeks to operate; (b) he names and addresses of officers, if the applicant is a corporation, partnership, cooperative or union; (c) The nature of the applicant's business and the industry or industries where the applicant seeks to operate; (d) The number of regular workers; the list of clients, if any; the number of personnel assigned to each client, if any and the services provided to the client; (e) The description of the phases of the contract and the number of employees covered in each phase, where appropriate; and (f) A copy of audited financial statements if the applicant is a corporation, partnership, cooperative or a union, or copy of the latest ITR if the applicant is a sole proprietorship.

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The application shall be supported by: (a) A certified copy of a certificate of registration of firm or business name from the Securities and Exchange Commission (SEC), Department of Trade and Industry (DTI), Cooperative Development Authority (CDA), or from the DOLE if the applicant is a union; and (b) A certified copy of the license or business permit issued by the local government unit or units where the contractor or subcontractor operates. The application shall be verified and shall include an undertaking that the contractor or subcontractor shall abide by all applicable labor laws and regulations. Section 13. Filing and processing of applications. The application and its supporting documents shall be filed in triplicate in the Regional Offices where the applicant principally operates. No application for registration shall be accepted unless all the foregoing requirements are complied with. The contractor or subcontractor shall be deemed registered upon payment of a registration fee of P100.00 to the Regional Office. Where all the supporting documents have been submitted, the Regional Office shall deny or approve the application within seven (7) working days after its filing. Upon registration, the Regional Office shall return one set of the duly-stamped application documents to the applicant, retain one set for its file, and transmit the remaining set to the Bureau of Local Employment. The Bureau shall devise the necessary forms for the expeditious processing of all applications for registration. Section 14. Duty to produce copy of contract between the principal and the contractor or subcontractor. The principal or the contractor or subcontractor shall be under an obligation to produce a copy of the contract between the principal and the contractor in the ordinary course of inspection. The contractor shall likewise be under an obligation to produce a copy of the contract of employment of the contractual worker when directed to do so by the Regional Director or his authorized representative.

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A copy of the contract between the contractual employee and the contractor or subcontractor shall be furnished the certified bargaining agent, if there is any. Section 15. Annual Reporting of Registered Contractors. The contractor or subcontractor shall submit in triplicate its annual report using a prescribed form to the appropriate Regional Office not later than the 15th of January of the following year. The report shall include: (a) A list of contracts entered with the principal during the subject reporting period; (b) The number of workers covered by each contract with the principal; (c) A sworn undertaking that the benefits from the Social Security System (SSS), the Home Development Mutual Fund (HDMF), PhilHealth, Employees Compensation Commission (ECC), and remittances to the Bureau of Internal Revenue (BIR) due its contractual employees have been made during the subject reporting period. The Regional Office shall return one set of the duly-stamped report to the contractor or subcontractor, retain one set for its file, and transmit the remaining set to the Bureau of Local Employment within five (5) days from receipt thereof. Section 16. Delisting of contractors or subcontractors. Subject to due process, the Regional Director shall cancel the registration of contractors or subcontractors based on any of the following grounds: (a) Non-submission of contracts between the principal and the contractor or subcontractor when required to do so; (b) Non-submission of annual report; (c) Findings through arbitration that the contractor or subcontractor has engaged in labor-only contracting and the prohibited activities as provided in Section 6 (Prohibitions) hereof; and (d) Non-compliance with labor standards and working conditions. Section 17. Renewal of registration of contractors or subcontractors. All registered

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contractors or subcontractors may apply for renewal of registration every three years. For this purpose, the Tripartite Industrial Peace Council (TIPC) as created under Executive Order No. 49, shall serve as the oversight committee to verify and monitor the following: (a) Engaging in allowable contracting activities; and (b) Compliance with administrative reporting requirements. Section 18. Enforcement of Labor Standards and Working Conditions. Consistent with Article 128 (Visitorial and Enforcement Power) of the Labor Code, as amended, the Regional Director through his duly authorized representatives, including labor regulation officers shall have the authority to conduct routine inspection of establishments engaged in contracting or subcontracting and shall have access to employer's records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the Labor Code and of any labor law, wage order, or rules and regulations issued pursuant thereto. The findings of the duly authorized representative shall be referred to the Regional Director for appropriate action as provided for in Article 128, and shall be furnished the collective bargaining agent, if any. Based on the visitorial and enforcement power of the Secretary of Labor and Employment in Article 128 (a), (b), (c) and (d), the Regional Director shall issue compliance orders to give effect to the labor standards provisions of the Labor Code, other labor legislation and these guidelines. Section 19. Solidary liability. The principal shall be deemed as the direct employer of the contractual employees and therefore, solidarily liable with the contractor or subcontractor for whatever monetary claims the contractual employees may have against the former in the case of violations as provided for in Sections 5 (Labor-Only contracting), 6 (Prohibitions), 8

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(Rights of Contractual Employees) and 16 (Delisting) of these Rules. In addition, the principal shall also be solidarily liable in case the contract between the principal and contractor or subcontractor is preterminated for reasons not attributable to the fault of the contractor or subcontractor. Section 20. Supersession. All rules and regulations issued by the Secretary of Labor and Employment inconsistent with the provisions of this Rule are hereby superseded. Contracting or subcontracting arrangements in the construction industry, under the licensing coverage of the PCAB and shall not include shipbuilding and ship repairing works, however, shall continue to be governed by Department Order No. 19, series of 1993. Section 21. Effectivity. This Order shall be effective fifteen (15) days after completion of its publication in two (2) newspapers of general circulation. Manila, Philippines, 21 February 2002. Azucena Essentials of Labor Law pp 634-635 A. Independent Contractor Management Function – Determination Need Manila Electric v Quisumbing Additionally, we recognize that contracting out is not unlimited; rather it is a prerogative that management enjoys subject to well-defined legal limitations. As we have previously held, the company can determine in its best business judgment whether it should contract out performance of some if its work for as long as the employer is motivated by good faith, and the contracting out must not have been resorted to circumvent the law or must not have been the result of malicious or arbitrary action. Requirements – Independent Conctractor Manila Electric v Benamira

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Moreover, ASDAI and AFSISI are not “labor-only” contractors. There is “labor only” contract when the person acting as contractor is considered merely as an agent or intermediary of the principal who is responsible to the workers in the same manner and to the same extent as if they had been directly employed by him. On the other hand, “job (independent) contracting” is present if the following conditions are met: (a) the contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except to the result thereof; and (b) the contractor has substantial capital or investments in the form of tools, equipment, machineries, work premises and other materials which are necessary in the conduct of his business.[29] Given the above distinction and the provisions of the security service agreements entered into by petitioner with ASDAI and AFSISI, we are convinced that ASDAI and AFSISI were engaged in job contracting. San Miguel v Abella The test to determine the existence of independent contractorship is whether one claiming to be an independent contractor has contracted to do the work according to his own methods and without being subject to the control of the employer, except only as to the results of the work. As for those of private respondents who were engaged in janitorial and messengerial tasks, they fall under the second category and are thus entitled to differential pay and benefits extended to other SMC regular employees from the day immediately following their first year of service. Big AA Manufacturing v Antonio Requirements for an Independent contractor: a) he carries a distinct and independent business, b) possesses substantial capital or investment in tools, equipment, machinery or work premises, c) he does not work within another employer/company’s premises

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using the latter’s tools and materials, and d) he is not under the control and supervision of an employer or company Desirable – Unnecessary Coca-Cola bottlers Phil v NLRC In Kimberly Independent Labor Union v. Drilon where the Court took judicial notice of the practice adopted in several government and private institutions and industries of hiring janitorial services on an "independent contractor basis." In this respect, although janitorial services may be considered directly related to the principal business of an employer, as with every business, we deemed them unnecessary in the conduct of the employer's principal business. This judicial notice, of course, rests on the assumption that the independent contractor is a legitimate job contractor so that there can be no doubt as to the existence of an employeremployee relationship between contractor and the worker. In this situation, the only pertinent question that may arise will no longer deal with whether there exists an employment bond but whether the employee may be considered regular or casual as to deserve the application of Art. 280 of the Labor Code. Employer-Employee

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who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. Mercury Drug Corp v Libunao Where the security agency recruits, hires and assigns the works of its watchmen or security guards to a client, the employer of such guards or watchmen is such agency, and not the client, since the latter has no hand in selecting the security guards. Thus, the duty to observe the diligence of a good father of a family cannot be demanded from the said client The petitioner had assigned Sido to help the management open and close the door of the drug store; inspect the bags of customers as they enter the store; and, check the receipts issued by the cashier to said customers for their purchases. Such circumstances do not automatically make the security guard the employee of the petitioner, and, as such, liable for the guard's tortious acts. The fact that a client company may give instructions or directions to the security guards assigned to it, does not, by itself, render the client responsible as an employer of the security guards concerned and liable for their wrongful acts or omissions. Liability Manila Shipyard Corp v CA Petitioner’s liability is joint and several with that of Longest Force, pursuant to Articles 106, 107 and 109 of the Labor Code. In this case, when petitioner contracted for security services with Longest Force as the security agency that hired private respondents to work as guards for the shipyard corporation, petitioner became an indirect employer of private respondents pursuant to Article 107. Following Article 106, when the agency as contractor failed to pay the guards, the corporation as principal becomes jointly and severally liable for the guards’ wages. This is mandated by the Labor Code to ensure compliance with its provisions, including payment of statutory minimum wage. The security agency is held liable by virtue of its status as direct employer, while the corporation is deemed the indirect employer of the guards for the purpose

PAL v NLRC Janitorial service agreement is not laboronly contacting and extension of service contract is not a source of employer-employee relation. Prohibited labor-only contracting is defined in Article 106 of the Labor Code as follows: There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer

LABOR MIDTERMS MAGIC NOTES!
of paying their wages in the event of failure of the agency to pay them. This statutory scheme gives the workers the ample protection consonant with labor and social justice provisions of the 1987 Constitution. New Golden City Builders v CA In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the employees are paid their wages. The principal employer becomes jointly and severally liable with the job contractor only for the payment of the employees’ wages whenever the contractor fails to pay the same. Other than that, the principal employer is not responsible for any claim made by the employees. B. Labor Contractor Only Requisites and Prohibition Vinoya v NLRC Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal. The following elements are present: (a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility; (b) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. Manila Water v Pena Labor-only contracting refers to arrangement where contractor merely recruits and places workers for a principal. Elements (1) contractor doesn’t have substantial capital and (2) contractor doesn’t control performance of contractual employee. Grandspan Development Corp v Bernardo SC also agrees with the CA that J. Narag Construction is a labor-only contractor. A106 LC as amended, provides that “there is ‘labor-only’

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contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. x x x.” J. Narag Construction is indeed a labor-only contractor. These are the reasons: (1) it is not registered as a building contractor with the SEC; (2) it has no contract with petitioner; and (3) there is no proof of its financial capability and has no list of equipment, tools, machineries and implements used in the business. Effect of Finding PAL v NLRC The only effect of labor-only contracting is that ‘the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him’ (Art. 106, Labor Code)”. Thus, private respondents are entitled to separation pay only. The award of backwages to them has no basis in law. San Miguel v MAERC Integrated Services In deciding the question of control, the language of the contract is not determinative of the parties' relationship; rather, it is the totality of the facts and surrounding circumstances of each case. On the other hand, in labor-only contracting, the statute creates an employeremployee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. The principal employer therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees. Section 7: Employee Classification STATUTORY REFERENCE

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Book VI Rule 1 Sec 5 Omnibus Rule (a) Regular employment - The provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties, employment shall be considered to be regular employment for purposes of Book VI of the Labor Code where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer except where the 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 job, work or service to be performed is seasonal in nature and the employment is for the duration of the season. (b) Casual Employment There is casual employment where an employee is engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period made known to the employee at the time of the engagement; provided, that any employee who has rendered at least one year of service, whether such service is continuous or not, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Notwithstanding the foregoing distinctions, every employee shall be entitled to the rights and privileges, and shall be subject to the duties and obligations, as may be granted by law to regular employees during the period of their actual employment. 7.01 COVERAGE

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Art 278 LC Coverage. The provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. 7.02 EMPLOYEE CLASSIFICATION Art 280 LC Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the 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 service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Art 281 LC Probationary employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

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Phil Federation of Credit Coop v NLRC [1998] [Contract stated that she was hired on a contractual basis, on probationary status for 6 months, which was subject to renewal. Renewed for one year then she was terminated.] Art. 281- An employee who is allowed to work after a probationary period shall be considered a regular employee. Probationary employee is one who is on trial during which the employer determines whether he is qualified for permanent employment. Regardless of the designation the employer may have conferred upon her employment status, since she had completed the probationary period and she was allowed to work thereafter, she then acquired regular status. Pangilinan v Gen Milling Corp [2004] [Employed as emergency workers (chicken dressers, packers and helpers in the plant)] They were employed with a fixed period, and as such, were not regular employees. Art. 280 does not proscribe or prohibit an employment contract with a fixed period. It does not necessarily follow that where the duties of the employee consists of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. There is nothing essentially contradictory between a definite period of employment and the nature of the employee’s duties. Employer Determination 7.03 REGULAR EMPLOYEES De Leon v NLRC [1989] [Paid on a daily basis through cash vouchers and did odd jobs and painting. He was then rehired indirectly through La Tondena’s labor agency.] Art. 281. It is not the will and word of the employer that determines whether a certain employment is regular or casual, to which the desperate worker often acceded but the nature of the activities performed in relation to the

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particular business or trade considering all circumstances, and in some cases the length of time of its performance and its continued existence. San Miguel Corporation v NLRC [1998] [Helper/bricklayer for a specific project, repair and upgrading of furnace. Rehired for another project.] The nature of one’s employment does not depend on the will or word of the employer, nor on the procedure of hiring and the manner of designating the employee, but on the nature of the activities to be performed by the employee, considering the employer’s nature of business and the duration and scope of the work to be done. Tabas v California Manufacturing v NLRC [1989] [They were employees of Manpower Services and were assigned to work as promotional merchandisers for California Co. Agreement provided that California had no control/supervision over them with respect to accomplishing of work; Livi is an independent contractor and so no principal-agent rel between the 2 Companies; assignment was seasonal and contractual. Contract was for six months, and was always renewed after expiring.] The existence of an employer-employee relationship is a question of law and being such, it cannot be made the subject of agreement. Temporary or casual employees become regular after service of one year, unless they had been contracted for a specific project. Merchandising is not specific, it is an activity related to the day-today operations of Cali.

Recognition and Types

Art 280 LC Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has

LABOR MIDTERMS MAGIC NOTES!
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 service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Art. 281. Probationary employment. An employee who is allowed to work after a probationary period shall be considered a regular employee. (last sentence) Art. 75. Learnership agreement. Any employer desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include: (d) A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. Clarification Rationale Philips Semiconductor v Fadriquela [2004] [Production operator, initially for 3 months. Contract was renewed several times, extending to 12 months. She then incurred several absences without justification, so her contract was not renewed.] By operation of law, she had attained regular status and was thus entitled to security of tenure. Phillip’s hiring policy for contract employees is contrary to the spirit of Art. 279-280; it is but an excuse to prevent regularization and circumvent the law on security of tenure. The operation of

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every business depends on supply and demand – the cyclical nature of one’s trade cannot be invoked as a reason to place an employee’s status on shaky ground. BUT this does not mean the term employment is illegal outright. It does not circumvent the law when the fixed period was knowingly and voluntarily agreed upon by both parties and that such agreement was made with no party holding moral dominance over the other. Nature of Work Magsalin v National Organization [2003] [Hired by Coca-Cola as sales route helpers for a limited period of 5 months. After that, they were employed on a day-to-day basis to substitute the regulars whenever need arose.] In determining whether an employment should be considered regular or non-regular, the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Post-production activities by the sales route helpers are important. Nature of work performed must be viewed from a perspective of the business or trade in its entirety and not on a confined scope. Repeated rehiring and continuing need for their services clearly attest to such necessity and desirability. Hacienda Fatima v National Federation of Sugarcane Workers Food and Gen Trade [2003] [They were admittedly seasonal workers – they repeatedly worked for the Hacienda for several years, but only during a particular season.] The fact that they did not work continuously for one whole year but only for the duration of the season does not detract from considering them in regular employment. Seasonal workers whoa re called to work from time to time and are temporarily laid off during off-season are not separated fro service in said period, but merely considered on leave until reemployed. To be excluded from regular employees, it is not enough that employees perform work that are seasonal in nature; they

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must have also been employed only for the duration of one season. Milares v NLRC [2002] [WON seafarers are contractual employees] YES. Their employment is contractually fixed for a certain period of time. They fall under the exception of Art. 280. Even if they have been continually re-hired, or their contracts renewed before the contracts expired, they are still not regular. Circumstance of continuous rehiring was dictated by practical considerations that experienced crew members are more preferred. They were only given priority or preference because of their qualifications and experience. Petroleum Shipping Ltd v NLRC [2006] First Asst Engineer who was promoted to Chief Engineer of Esso Intl Shipping. Because he had a disease, Esso no longer deployed him but offered to pay him benefits. He accepted but still filed complaint. He is not a regular employee. Same ratio as Milares! Shippers United v NLRC [2006] [Third engineer with Nicolakis Skipping through its manning agency. Contract was for the period of 1 yr beginning July 10. He boarded MV Naval on July 15, but was ordered to disembark on Aug 7 and repatriated to the Phils.] Employer did not provide quantum of evidence needed to prove that dismissal was for a just cause. Failure to furnish seafarer with notice would prejudice the safety of the crew and the vessel. Award of backwages and separation pay is not applicable since seafarer is a contractual employee whose rights and obligations are governed by the POEA Employment Contract and RA 8042. Under Sec 10 of RA 8042, award of money claims for illegal dismissal is allowed. Pentagon Intl Shipping v Adelantar [2004] [Hired by the Dubai Ports Authority under a contract which provided for an unlimited period of employment. He then entered into another contract, POEA standard employment contract which provided for a 12month period of work.]

LABOR MIDTERMS MAGIC NOTES!
Sec 10 RA 8042, and not A297, applies because the second contract which provided for a fixed period of employment is applicable in this case. Milares case doctrine is applicable! Filipino seamen are governed by the Rules and Regulations of the POEA. Standard Employment Contract governing the employment of All Filipino seamen specifically provides that the contract of seamen shall be for a fixed period of not longer than 12 months. Any extension shall be subject to the mutual consent of parties. Such limited period is for their mutual interest; the national, cultural, lingual diversity among the crew is a reality that necessitates the limitation. Hiring Extend Period Length of Time Andon Electric Co v NLRC [1999] [Fabricator for 13 years and rendered diff services as helper technician, stockman and timekeeper. He then received letter of termination.] Where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the cope of project employees and considered regular employees. He was a “regular non-project worker.” Contract to Contract Beta Electric Corp v NLRC (1990] [Clerk typist for one month, which appointment was extended five times in five months. She was then terminated without notice/investigation.] Contracts cannot override the mandate of the law. Her tenure had exceeded 6 months; she then attained regular status. An employment may only be said to be “temporary” where it has been fixed for a specific undertaking the completion or terminations 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. Universal Plastic Corp v Catapang ([2005]

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[Hired by URC to work at its duck farm in Laguna on various dates from ‘91-‘93. Employment contract provided for a 5month period. After expiration, URC would renew the contract and re-employ them.] Primary standard is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. Such 5month contract period should be struck down as contrary to public policy or morals. URC’s act of repeatedly and continuously hiring them in a span of 3-5 years to do the same kind of work negates their contention that it was for a specific project.

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they worked. Members of a work pool can either be regular or project. 7.04 PROJECT EMPLOYEES Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the 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 service to be performed is seasonal in nature and the employment is for the duration of the season. Defined ALU-TUCP v NLRC [1994] [Employed by Natl Steel for varying lengths of time, for work limited to the specific component projects which made up the main Five Year Expansion Program] In business and industry, project could refer to one or the other of at least 2 distinguishable types of activities: (1) A particular job that is within the regular business of the employer, but which is separate, distinct and identifiable from other undertakings; (2) Particular job that is not within the regular business but is also identifiably distinct and separate from the ordinary business operations. Both begin and end at determined or determinable times. A common basic requisite is that the designation as project employees and their assignment to a specific project are implemented in good faith, and not merely as a means of evading otherwise applicable requirements of labor laws. Kiamco v NLRC [1999] [Proj employee in PNOC’s Geothermal Agro-Industrial Plan Project in Negros Oriental. He

Maraguinot v NLRC [1998] [(1) He was hired as part of the filming crew of Viva Films. 4 months later, designated as Asst. Electrician then Electrician. (2) Another was part of shooting crew. They arranged movie equipment and did tasks as assigned by cameraman/director. They were engaged in about 20 projects. Viva contended that they were only hired for specific movie projects – employment coterminous with such project.] A project employee or those part of a work pool may acquire the status of a regular when (1) there is a continuous rehiring even after cessation of a project (2) tasks performed are vital, necessary and indispensable to the usual business. However, the length of time during which the employee was continuously rehired is not controlling, but merely serves as a badge of regular employment. In this case, their tasks were necessary. Abesco Construction v Ramirez [2006] [Laborer, road roller operator, painters or drivers of the construction co. Co. claimed only proj employees.] In determining the nature of one’s employment, length of service is not a controlling factor. Employees who work under diff project employment contract do no automatically become regular; they can remain as project employees regardless of the number of years

LABOR MIDTERMS MAGIC NOTES!
was hired as a technician for 5 months or up to the completion of the project, whichever would come first. After its termination, a 2nd one was entered into with same terms. He was again rehired for another 6 mos.] Project employees are those workers hired (1) for a specific undertaking or project; (2) the completion or termination of such project or undertaking has been determined at the time of engagement of the employee. Under Policy Instruction #20 of the Sec of Labor, Non-project or regular employees are those employed without reference to any particular project. Project Employees Phil Jai-Alai and Amusement Corp v Clave [1983] [Renovation of its main bldg, hired a plumber a mason and 30 other workers. Extended because an annex was also constructed.] The casual or limited character of their employment is evident. They were hired for a specific project. It was made known and so understood at the start of hiring, that their services would last until the completion of the renovation. Sandoval Shipyards v NLRC [1985] [Construction of LCT Catamaran. After 3 mos, the proj was completed and they were terminated.] Art. 281. The completion of their work or project automatically terminates their employment. They are project workers, regardless of the number of projects in which they have worked. Imbuido v NLRC [2000] [Data encoder for Intl Info Services who was engaged in business of data encoding and keypunching. Contract provided that employment was up to a certain period, or when the proj is earlier completed or when the client withdraws. Project was already completed.] She was a project employee, but she became a regular employee for performing activities, which are usually necessary or desirable in the usual business or trade of her

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employer, continuously for a period of more than 3 years. Rationale De Ocampo v NLRC [1990] [Employees terminated because of expiration of contract] (Cartagenas v Romago Electric Co.) Contract workers are not considered regular, their services being needed only when there are projects to be undertake. The rationale of this rule is that if a project has already been completed, it would be unjust to require the employer to maintain them in the payroll while they are doing absolutely nothing except waiting until another project is begun, if at all. In effect, these stand-by workers would be enjoying the status of privileged retainers, collecting payment for work not done, to be disbursed by the employer from profits not earned. This is not fair by any standard and can only lead to a coddling of labor at the expense of mngmt. Employer Obligation AM Oreta and Co. v NLRC [1989] [Carpenter in ENDECO’s project in Jeddah. Contract was for 12 mos. 10 days after arriving there, he met an accident while working at the jobsite.] The law is clear to the effect that in all cases involving employees engaged on probationary basis, the employer shall make known to the employee at the time he is hired, the standards by which he will qualify as a regular employee. Nowhere in the employment contract executed is there a stipulation that the latter shall undergo a proby period before he can qualify as a regular. There is also no evidence that he had been apprised of such status and the requirements which he should comply in order to be a regular employee. In the absence of these requisites, there is justification in concluding that he was a regular employee at tie he was dismissed. Specific Period Purefood Corp v NLRC [1987]

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[Hired by PureFoods for a fixed period of 5 months at its tuna canner plant.] Criteria under which term employment cannot be said to be in circumvention of the law on security of tenure: (1) it was knowingly and voluntarily agreed upon, no vitiation of consent; (2) no moral dominance exercised by employer over employee. SC has upheld legality of fixed term employment (Brent School v Zamora). The decisive determinant in term employment should not be the activities that the employee is called upon to perform but the day certain agreed upon by the parties for the commencement and termination of their employment relationship. But, where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy and morals. (Here, obviously, Purefoods had a scheme.) Labayog v MY San Biscuits [2006] [mixers, packers and machine operators for a fixed term] Contracts of employment for a fixed period are not unlawful. What is objectionable is the practice of some scrupulous employers who try to circumvent the law protecting workers from the capricious termination of employment. While their employment was necessary and desirable, they were employed temporarily only, during periods when there was heightened demand for production. Continuous Rehiring Chua v CA [2004] [Employees filed a petition for SSS coverage claiming they were regular employees of construction co] To be exempted from the presumption of regularity of employment, agreement between a project employee and his employer must strictly conform to the reqts and conditions under Art. 280. It is not enough that an employee is hired for a specific project or phase of work. There must also be a determination of, or a clear agreement on, the completion or termination of

LABOR MIDTERMS MAGIC NOTES!
the project at the time the employee was engaged. CE Construction Corp v Cioco [2004] [Hired as carpenters and laborers by the construction co. for various projects for 9 yrs. Prior to the start of every proj, they signed individual employment contracts.] The fact that they had been employed with the company for several years on various projects, did not automatically make them regular employees considering that the definition of regular employment in Art. 280 makes specific exception with respect to project employment. Re-hiring did not confer upon them regular employment status. Workpool Employees Maraguinot v NLRC [1998] A project EE or a member of a work pool may acquire the status of a regular employee when the following concur: (1) there is continuous rehiring of project employees even after cessation of a project; (2) tasks performed by the project employee are vital, necessary and indispensable to the usual business or trade of the employer. A workpool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided, that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this setup can likewise be applied to project workers insofar as the effect of the temporary cessation is concerned. This is beneficial to both the employer and employee for it prevents the unjust situation of coddling labor at the expense of capital ant at the same time enables the workers to attain the status of regular employees. Aguilar Corp v NLRC [1997] [Helper-electrician in the business of contracting refrigeration and other related works.] Members of a work pool from which a construction company draws it project

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employees, if considered employees of the construction co while in the work pool, are nonproject employees or employees for an indefinite period. If they are employed in a particular project, the completion of the project or any phase thereof will not mean severance of the EE relationship. Abesco Construction v Ramirez [2006] Length of Service Palomares v NLRC [1997] [Contracts of employment for the five year expansion program of the company] Even if they were repetitively rehired on the basis of a contract of employment for more than one year, they cannot be considered regularized. Length of service is not the controlling determinant of the employment tenure of a project employee. It is based on whether or not the employment has been fixed for a specific project or undertaking, the completion of which has been determined at the time of the engagement of the employee. The 2 nd par of Art. 280 providing that an employee who has rendered service for at least 1 yr shall be considered a regular employee, pertains to casual employees and not to project employees. Fil Pre-Fabricated Bldg Systems v Puente [2005] [Initially hired as an installer by the construction company; promoted to mobile crane operator; employed with the company for the past 10 years] Length of service of a project employee is not the controlling test but whether or not the 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. 7.05 CASUAL EMPLOYEES Art. 280. Regular and casual employment. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service

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is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Nature of Work AM Oreta and Co v NLRC [1989] What determines regularity or casualness is not the employment contract, written or otherwise, but the nature of the job. If the job is usually necessary or desirable to the main business of the employer, then employment is regular. One Year Service Kimberly v Drilon [1990] Those who have rendered at least one year of service, whether continuous or broken are deemed regular with respect to the activity in which they are employed. While the actual regularization of these employees entails the mechanical act of issuing regular appointment paper and compliance with such other operating procedures as may be adopted by the empoyer, it is more in keeping with the intent and spirit of the law to rule that the status of regular employment attaches to the casual worker on the day immediately after the end of his first yr of service. Integrated Contractor and Plumbing Works Inc v CA [2005] If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. 7.06 CONTRACT – FIXED PERIOD Tests Validity Brent School v Zamora [1990] Athletic director at Brent and her contract was for a fixed term of 5 years. Ground for termination was completion of contract.

LABOR MIDTERMS MAGIC NOTES!
Since the entire purpose behind the development of the legislation culminating in the present Art. 280 of the LC clearly appears to have been, as already observed to prevent circumvention of the employee’s right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined therein should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to circumvent the security of tenure. It should have NO application to instances (1) where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent (2) where it satisfactorily appears that the parties dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the employer over the employee. Cielo v NLRC [1991] In Brent School v Zamora, SC affirmed the general principle that “where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy, morals, etc.” Millares v NLRC [2002] Viernes v NLRC [2003] [Meter readers of Benguet Electric Coop for less than a month’s duration, but were still allowed to work beyond such period] Work performed was necessary or desirable in the usual business, hence they are regular. The fact alone that they had rendered service for a period of less than 6 months does not make their employment status as probationary. The principle in Brent School applies only with respect to fixed term employments. Philips Semiconductor v Fadriquela [2004]

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Pangilinan v General Milling [2004] Seasonal Employees Magalos v NLRC [1997] The employment of seasonal employees legally ends upon completion of the project or the season. Phil Tobacco etc v NLRC [1998] Seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but are merely considered on leave until reemployed. San Miguel Corp v NLRC [1998] Manila Hotel v CIR [2003] [Pines Hotel employees were demanding additional pay for overtime service rendered during exigencies of the business. Mla Hotel answered that overtime was not authorized but was rendered voluntarily bec they wanted to avail of tips.] Seasonal employees called to work from time to time and temporarily laid off during off season are regulars but are on leave of absence without pay until they are re-employed. Their relationship is never severed but only suspended. (Reemployed during summer season) Industrial etc v CIR [2000] [WON seasonal workers are new workers] NO. The cessation of the Central Azucera’s milling activities at the end of the milling season is not permanent or definitive, it is merely temporary; it is a foreseeable suspension of work, and both activities will be resumed, as they are in fact resumed, when sugar cane ripe for milling is again available. Hacienda Bino v Cuenca [2005] While the records sufficiently show that the work was seasonal in nature, there was no proof that they were hired for the duration of one season only. This is different from the Mercado case because there, the workers were classified

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as seasonal since they were employed for a definite period, the hacienda being smaller in size; they also offered their services to the neighboring haciendas. Poseidon Fishing v NLRC [2006] [Chief Mate -> Boat Captain -> Radio Operator] Activity of fish catching is a continuous process and could hardly be considered as seasonal in nature. His job was directly related to the deep-sea fishing business of Poseidon; being necessary and important to the business, he is deemed regular. Section 8: Probationary Employee Statutory Reference Book VI, Rule I, Sec 6 Omnibus Rules SECTION 6. Probationary employment. — There is probationary employment where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of engagement. Probationary employment shall be governed by the following rules: (a) Where the work for which an employee has been engaged is learnable or apprenticeable in accordance with the standards prescribed by the Department of Labor, the probationary employment period of the employee shall be limited to the authorized learnership or apprenticeship period, whichever is applicable. (b) Where the work is neither learnable nor apprenticeable, the probationary employment period shall not exceed six (6) months reckoned from the date the employee actually started working. (c) The services of an employee who has been engaged on probationary basis may be terminated only for a just cause or when authorized by existing laws, or when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.

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(d) In all cases involving employees engaged on probationary basis, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. (DO No. 10 Series of 1997, Effective June 22, 1997)

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[Probationary cultural orientation teacher for the refugee service of the NGO] A probationary employee, as understood under Art. 282 (now Art. 281 LC), is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. Purpose Philemploy Services and Resources Inc v Rodriguez [2006] [Factory worker deployed abroad] There could be no illegal dismissal as the termination was effected during the agreed probationary period. There is probationary employment where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. Dela Cruz v NLRC [2004] [Hired as senior sales manager, a newly created position in the company] During the probationary period, the employer is given the opportunity to observe the skill, competence and attitude of the employee while the latter seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. The length of time is immaterial in determining the correlative rights of both the employer and the employee in dealing with each other during this period. (He was terminable anytime, since not yet permanent.) Grand Motors Corp v MOLE [1984] Employer has the right or is at liberty to choose as to who will be hired and who will be declined. It is within the exercise of this right to select employees that he may set or fix a probationary period within which the employer may test and observe the conduct of the other before hiring him permanently. Escorpizo v Universitty of Baguio [1999]

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The word “probationary”, as used to describe the period of employment, implies the purpose of the term or period. Employer Right Set Period / Obligation Grand Motors Corp v MOLE [1984] Orient Express Placements Phils v NLRC [1997] Under Art. 281, the services of an employee hired on a probationary basis may be terminated when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of engagement. However, the Court cannot sustain his dismissal on this ground because petitioner failed to specify the reasonable standards by which respondent’s alleged poor performance was evaluated, much less to prove that such standards were made known to him at time of his recruitment in Manila. Mitsubishi v Chrysler Labor Union [2004] An employer, in the exercise of its mngmt prerogative, may hire an employee on a probationary basis. Under Art. 281, the employer must inform the employee of the standards for which his employment may be considered for regularization. Duration / Exception Buiser v Leogardo [1984] [Sales rep of Gen Telephone Directory Co.; probationary status for 18 months] Generally, the probationary period of employment is limited to 6 months. The exception to this general rule is when the parties to an employment contract may agree otherwise, such as when the same is established by company policy or when the same is required by the nature of the work to be performed by the employee. There is recognition of the exercise of managerial prerogatives in requiring a longer period, esp. where the employee must learn a particular kind of work such as selling, or when

8.01 PROBATIONARY EMPLOYEES Art. 281. Probationary employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. Art. 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates of apprentices, shall conform to the rules issued by the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. The Department shall develop standard model programs of apprenticeship. (As amended by Section 1, Executive Order No. 111, December 24, 1986) Definition Intl Catholic Migration Comm v NLRC [1989]

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the job requires certain qualifications, skills, experience or training. Policy Instruction #11 of Minister of Labor: “Under the LC, six months is the general probationary period, but the probationary period is actually the period needed to determine fitness for the job. This period, for lack of a better measurement is deemed to be the period needed to learn the job.” Holiday Inn Manila v NLRC [1989] Probation is the period during which employer may determine if the employee is qualified for the possible inclusion in the regular force. In this case, the period was for 3 weeks during the employee’s on-the-job training. When her services were continued after the training, employer in effect recognized that she passed probation, presumably because they were acceptable. Even if it be supposed that the probation did not end with the 3-wk OJT, there is no reason why that period should not be included in the stipulated 6-month period of probation. Bernardo v NLRC [1999] [Deaf-mutes hired by Far East Bank as money sorters and counters under “employment contract for handicapped workers”] Contract signed by the petitioners is akin to a probationary employment, during which the bank determined the employee’s fitness for the job. When the bank renewed the contract after the lapse of the 6-month probationary period, the employee thereby became regular. Their disability did not render them unqualified for the tasks assigned to them. No employer is allowed to determine indefinitely the fitness of its employees. Criteria Regularization Alcira v NLRC [2004] [Engineering support services supervisor] Although probationary employees are also accorded security of tenure, this protection ends upon expiration of the probationary period. Even if they are not permanent, they are accorded this constitutional protection in that they may only be terminated for just cause or

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when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to him. Extension of Contract

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employment where he had already become a regular employee when he was absorbed by a sister company. He became a regular employee upon completion of his 6-month probationary status. Termination and Salary

Mariwasa Manufacturing v Leogardo [1989] [General utility worker; unsatisfactory work during proby period of 6mos. but his prob period was extended for another 3 mos] Extension was ex gratia, an act of liberality on the part of his employer. By voluntarily agreeing to an extension of the probationary period, he in effect waived any benefit attaching to the completion of said period if he still failed to make the grade during the period of extension. No public policy protecting the employee and the security of his tenure is served by proscribing voluntary agreements which, by reasonably extending the period of probation, actually improve and further a probationary employee’s prospects of demonstrating his fitness for regularization. Absorbed Employees Cebu Stevedoring Co v Regional Director [1988] [Former employees of Cebu Customs Arrastre Services because it was abolished; they were then absorbed by CSCI with the same positions they previously held; 6mos later were dismissed] They could not be considered probationary employees because they were already well-trained in their respective functions. While they were still with the CCAS, they were already clerks with 10 years of service, on the average. They were therefore not novices in their jobs, but experienced workers. Double Probation A Prime Security Services v NLRC [2000] [Security guard for a year of the sister co.] There is no basis for subjecting an employee to a new probationary or temporary

Intl Catholic Migration Commission v NLRC [1989] If the purpose sought by the employer is neither attained nor attainable within the said period, Art. 281 does not preclude the employer from terminating the probationary employment on justifiable causes.

Orient Express Placement Phil v NLRC [1997] Unsatisfactory performance is not one of the just causes for dismissal under the Labor Code. Dela Cruz v NLRC [2004] Rule Private School Teachers Chiang Kai Shek College v CA [2004] La Consolacion College v NLRC [2001] For a private school teacher to acquire permanent status in employment, the following must concur: (1) The teacher is a full-time teacher; (2) The teacher must have rendered 3 consecutive years of service; (3) Such service must have been satisfactory. PART TWO: LABOR STANDARDS LAW Purpose Mariveles Shipyard Corp v CA [2003] Labor standards are enacted by the legislature to alleviate the plight of workers whose wages barely meet the spiraling costs of basic needs. Labor laws are considered written in every contract. Stipulations in violation thereof are considered null. Similarly, legislated wage

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increases are deemed amendments to the contract. Thus, employers cannot hide behind their contracts in order to evade their liability for noncompliance with the statutory minimum wage. Section 1: Employment Policy 1.01 PRE-EMPLOYMENT POLICY Art. 12. Statement of objectives. It is the policy of the State: a. To promote and maintain a state of full employment through improved manpower training, allocation and utilization; b. To protect every citizen desiring to work locally or overseas by securing for him the best possible terms and conditions of employment; c. To facilitate a free choice of available employment by persons seeking work in conformity with the national interest; d. To facilitate and regulate the movement of workers in conformity with the national interest; e. To regulate the employment of aliens, including the establishment of a registration and/or work permit system; f. To strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers, locally and overseas, to serve national development objectives; g. To insure careful selection of Filipino workers for overseas employment in order to protect the good name of the Philippines abroad. Section 2: Recruitment And Placement Of Workers Statutory Reference Art. 13. Definitions. a. "Worker" means any member of the labor force, whether employed or unemployed. b. "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,

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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. c. "Private fee-charging employment agency" means any person or entity engaged in recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both. d. "License" means a document issued by the Department of Labor authorizing a person or entity to operate a private employment agency. e. "Private recruitment entity" means any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or employers. f. "Authority" means a document issued by the Department of Labor authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. g. "Seaman" means any person employed in a vessel engaged in maritime navigation. h. "Overseas employment" means employment of a worker outside the Philippines. i. "Emigrant" means any person, worker or otherwise, who emigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination. Art. 14. Employment promotion. The Secretary of Labor shall have the power and authority: a. To organize and establish new employment offices in addition to the existing employment offices under the Department of Labor as the need arises; b. To organize and establish a nationwide job clearance and information system to inform applicants registering with a particular employment office of job opportunities in other parts of the country as well as job opportunities abroad; c. To develop and organize a program that will facilitate occupational, industrial and geographical mobility of labor and provide

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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. 15. Bureau of Employment Services. a. The Bureau of Employment Services shall be primarily responsible for developing and monitoring a comprehensive employment program. It shall have the power and duty: 1. To formulate and develop plans and programs to implement the employment promotion objectives of this Title; 2. To establish and maintain a registration and/or licensing system to regulate private sector participation in the recruitment and placement of workers, locally and overseas, and to secure the best possible terms and conditions of employment for Filipino contract workers and compliance therewith under such rules and regulations as may be issued by the Minister of Labor; 3. To formulate and develop employment programs designed to benefit disadvantaged groups and communities; 4. To establish and maintain a registration and/or work permit system to regulate the employment of aliens; 5. To develop a labor market information system in aid of proper manpower and development planning; 6. To develop a responsive vocational guidance and testing system in aid of proper human resources allocation; and 7. To maintain a central registry of skills, except seamen. b. The regional offices of the Ministry of Labor shall have the original and exclusive jurisdiction over all matters or cases involving employeremployee relations including money claims, arising out of or by virtue of any law or contracts involving Filipino workers for overseas employment except seamen: Provided, That the Bureau of Employment Services may, in the case of the National Capital Region, exercise such power, whenever the Minister of Labor deems it appropriate. The decisions of the regional offices

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of the Bureau of Employment Services, if so authorized by the Minister of Labor as provided in this Article, shall be appealable to the National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decisions of the National Labor Relations Commission shall be final and inappealable. (Superseded by Exec. Order 797, May 1, 1982). c. The Minister of Labor shall have the power to impose and collect fees based on rates recommended by the Bureau of Employment Services. Such fees shall be deposited in the National Treasury as a special account of the General Fund, for the promotion of the objectives of the Bureau of Employment Services, subject to the provisions of Section 40 of Presidential Decree No. 1177. Art. 16. Private recruitment. Except as provided in Chapter II of this Title, no person or entity other than the public employment offices, shall engage in the recruitment and placement of workers. Art. 17. Overseas Employment Development Board. An Overseas Employment Development Board is hereby created to undertake, in cooperation with relevant entities and agencies, a systematic program for overseas employment of Filipino workers in excess of domestic needs and to protect their rights to fair and equitable employment practices. It shall have the power and duty: 1. To promote the overseas employment of Filipino workers through a comprehensive market promotion and development program; 2. To secure the best possible terms and conditions of employment of Filipino contract workers on a government-to-government basis and to ensure compliance therewith; 3. To recruit and place workers for overseas employment on a government-to-government arrangement and in such other sectors as policy may dictate; and 4. To act as secretariat for the Board of Trustees of the Welfare and Training Fund for Overseas Workers. Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for overseas

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employment except through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps, international organizations and such other employers as may be allowed by the Secretary of Labor is exempted from this provision. Art. 19. Office of Emigrant Affairs. Pursuant to the national policy to maintain close ties with Filipino migrant communities and promote their welfare as well as establish a data bank in aid of national manpower policy formulation, an Office of Emigrant Affairs is hereby created in the Department of Labor. a. The Office shall be a unit at the Office of the Secretary and shall initially be manned and operated by such personnel and through such funding as are available within the Department and its attached agencies. Thereafter, its appropriation shall be made part of the regular General Appropriations Decree. b. The office shall, among others, promote the well-being of emigrants and maintain their close link to the homeland by: 1. serving as a liaison with migrant communities; 2. provision of welfare and cultural services; 3. promote and facilitate re-integration of migrants into the national mainstream; 4. promote economic; political and cultural ties with the communities; and 5. generally to undertake such activities as may be appropriate to enhance such cooperative links. Art. 20. National Seamen Board. A National Seamen Board is hereby created which shall develop and maintain a comprehensive program for Filipino seamen employed overseas. It shall have the power and duty: a. To provide free placement services for seamen; 1. To regulate and supervise the activities of agents or representatives of shipping companies in the hiring of seamen for overseas employment and secure the best possible terms of employment for contract seamen workers and secure compliance therewith;

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2. To maintain a complete registry of all Filipino seamen. b. The Board shall have original and exclusive jurisdiction over all matters or cases including money claims, involving employer-employee relations, arising out of or by virtue of any law or contracts involving Filipino seamen for overseas employment. The decisions of the Board shall be appealable to the National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decisions of the National Labor Relations Commission shall be final and inappealable. Art. 21. Foreign service role and participation. To provide ample protection to Filipino workers abroad, the labor attaches, the labor reporting officers duly designated by the Secretary of Labor and the Philippine diplomatic or consular officials concerned shall, even without prior instruction or advice from the home office, exercise the power and duty: a. To provide all Filipino workers within their jurisdiction assistance on all matters arising out of employment; b. To insure that Filipino workers are not exploited or discriminated against; c. To verify and certify as requisite to authentication that the terms and conditions of employment in contracts involving Filipino workers are in accordance with the Labor Code and rules and regulations of the Overseas Employment Development Board and National Seamen Board; d. To make continuing studies or researches and recommendations on the various aspects of the employment market within their jurisdiction; e. To gather and analyze information on the employment situation and its probable trends, and to make such information available; and f. To perform such other duties as may be required of them from time to time. Art. 22. Mandatory remittance of foreign exchange earnings. It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign exchange earnings to their families, dependents, and/or beneficiaries in the country

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in accordance with rules and regulations prescribed by the Secretary of Labor. Art. 23. Composition of the Boards. a. The OEDB shall be composed of the Secretary of Labor and Employment as Chairman, the Undersecretary of Labor as Vice-Chairman, and a representative each of the Department of Foreign Affairs, the Department of National Defense, the Central Bank, the Department of Education, Culture and Sports, the National Manpower and Youth Council, the Bureau of Employment Services, a workers’ organization and an employers’ organization and the Executive Director of the OEDB as members. b. The National Seamen Board shall be composed of the Secretary of Labor and Employment as Chairman, the Undersecretary of Labor as Vice-Chairman, the Commandant of the Philippine Coast Guard, and a representative each of the Department of Foreign Affairs, the Department of Education, Culture and Sports, the Central Bank, the Maritime Industry Authority, the Bureau of Employment Services, a national shipping association and the Executive Director of the NSB as members. c. The members of the Boards shall receive allowances to be determined by the Board which shall not be more than P2,000.00 per month. d. The Boards shall be attached to the Department of Labor for policy and program coordination. They shall each be assisted by a Secretariat headed by an Executive Director who shall be a Filipino citizen with sufficient experience in manpower administration, including overseas employment activities. The Executive Director shall be appointed by the President of the Philippines upon the recommendation of the Secretary of Labor and shall receive an annual salary as fixed by law. The Secretary of Labor shall appoint the other members of the Secretariat. e. The Auditor General shall appoint his representative to the Boards to audit their respective accounts in accordance with auditing laws and pertinent rules and regulations. Art. 24. Boards to issue rules and collect fees. The Boards shall issue appropriate rules

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and regulations to carry out their functions. They shall have the power to impose and collect fees from employers concerned, which shall be deposited in the respective accounts of said Boards and be used by them exclusively to promote their objectives. Art. 25. Private sector participation in the recruitment and placement of workers. Pursuant to national development objectives and in order to harness and maximize the use of private sector resources and initiative in the development and implementation of a comprehensive employment program, the private employment sector shall participate in the recruitment and placement of workers, locally and overseas, under such guidelines, rules and regulations as may be issued by the Secretary of Labor. Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not. Art. 27. Citizenship requirement. Only Filipino citizens or corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas. Art. 28. Capitalization. All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary of Labor. Art. 29. Non-transferability of license or authority. No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued or at any place other than that stated in the license or authority be transferred, conveyed or assigned to any other person or entity. Any transfer of business address, appointment or designation of any agent or representative including the

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establishment of additional offices anywhere shall be subject to the prior approval of the Department of Labor. RA 8759 – Public Employment Service Office Act of 1999 Sec. 2. Declaration of Policy. — It is a declared policy of the State to promote full employment and equality of employment opportunities for all, and for this purpose, to strengthen and expand the existing employment facilitation service machinery of the government particularly at the local levels. Sec. 3. Establishment of the Public Employment Service Office. — To carry out the above-declared policy, there shall be established in all capital towns of provinces, key cities and other strategic areas a Public Employment Service Office, hereinafter referred to as "PESO," which shall be community-based and maintained largely by local government units (LGUs) and a number of nongovernmental organizations (NGOs) or community-based organizations (CBOs) and state universities and colleges (SUCs). The PESOs shall be linked to the regional offices of the Department of Labor and Employment (DOLE) for coordination and technical supervision, and to the DOLE central office, to constitute the national employment service network. Guidelines on Advertisements for Job Vacancies – DOLE Memorandum Circular #16 [1988] Guidelines on Application for Authority to Conduct Provincial Recruitment and/or Job Fairs – DOLE Memo Circular #87 [1989] Guidelines for the Conduct of Job Fair by Private Entities, Non-Governmental Organizations and Educational Institutions – DOLE Order #2 [2001] In line with the government's thrust to further improve the delivery of frontline services and to ensure the Jobs Fairs conducted by private entities, non-government organizations, and

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educational institutions are in conformity with the provisions of the Labor Code, as amended and its Implementing rules and Regulations, the following guidelines are hereby issued: Section 1. Objectives General Objective The Guidelines shall help to fast track the delivery of employment facilitation services to the poor, unemployed, new entrants to the labor force, displaced and returning migrant workers throughout the country; assist in the filling-up of vacancies of employers; and strengthen support for anti-illegal recruitment campaign of the Department of Labor and Employment. Section 2. Definition of Terms c. Requesting Party - refers to the entity requesting to host or sponsor a Jobs air. d. Participating Entity - refers to employers, companies, licensed private recruitment and placement agencies, licensed employment agencies for overseas employment, registered contractors/subcontractors who will be joining the Jobs Fair for purposes of recruitment. e. Private Recruitment and Placement Agency (PRPA) - refers to recruitment and placement agency for local employment duly licensed by the OLE. f. Private Employment Agency (PEA) refers to a recruitment and placement agency for overseas employment duly licensed by the DOLE. j. Jobs Fair - refers to an employment facilitation strategy to fast-track the meeting of job-seekers and employers, licensed/authorized recruitment of agencies, and registered job contractors/subcontractors in one specific venue at a specified date and to disseminate information on other DOLE programs and services. Section 6. Prohibitions a. No jobs Fair by private entities or any non-government organizations shall be conducted without the prior written approval of the Regional Director. b. No fees whatsoever shall be collected from the job seekers or applicants in he Jobs Fair. Collection of placement fees from applicants and service fees from principals shall be in accordance with the existing rules and Regulations governing Private Recruitment and

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Placement Agencies for Local employment or the existing POEA Rules and regulations on collection of placement fees for overseas employment. c. No advertisements or press release should be made by the organizer/s or cost/s without the proper clearance from the Regional Office, provided that hen overseas recruitment agencies and/or overseas job vacancies are included, proper clearance/s from the POEA are also secured. Section 7. Jobs Fair by Educational Institutions –Educational Institutions may conduct Job Fair/s without seeking approval of the DOLE, provided that: a. said Job Fair/s are solely for their students and new graduates; b. the same is to be conducted within their premises; c. the participating entities and companies are hiring for their own staff implement; The DOLE Regional Office or PESO may supervise, provide technical assistance in the conduct of jobs fair and monitor the results of the jobs fair. Should the Jobs Fair by educational institutions fail to conform with the provisions of this Section, ll the other provisions of this guidelines shall apply. Section 9. Penalties – Any violation of this guidelines involving recruitment and placement for local employment hall be punishable in accordance with Articles 39 and 288 of the Labor Code, as amended. However, if the violation is related to recruitment and placement of overseas employment, the pertinent provisions and its Implementing Rules and Regulations or the POEA Rules and regulations shall apply. This penal provision shall apply only to recruitment and placement agencies for local and/or overseas employment participating in the Jobs Fair. (Manila, Philippines, March 22, 2001)

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Pursuant to Art. 36 of PD 442, as amended, otherwise known as the Labor Code of the Philippines, and in order to provide continuing employment opportunities to legitimate Filipino performing artists abroad and to ensure their protection and welfare, the following shall govern the recruitment and placement of Filipino performing artists overseas: 1. No Filipino entertainer shall be deployed outside the Philippines except for legitimate performing artists consisting of musicians, singers and members of dance troupes. In all cases, the performing artists must have a track record of legitimate and reputable performance in the Philippines for at least one year. In no case shall the performing artist be below 23 years old. 2. The Secretary of Labor and Employment may, for justifiable reasons, exempt performing artists from coverage hereof. 3. The deployment of Filipino artists shall be limited to reputable night clubs, cabarets, hotels and theaters accredited by the Phil Embassy/Consulate through the Office of labor Attache. 3. Only licensed recruitment agencies and their registered talent managers/promoters shall be allowed to recruit, train, manage and deploy performing artists. 5. Foreign employer/promoters shall only be allowed to negotiate for the deployment of performing artists after accreditation by the Embassy/Consulate, through the Office of the Labor Attache. Foreign employers/promoters shall be required to post a bond in the Philippines in the amount of US$20, 000 or its equivalent in Philippine currency, to answer for all claims of the artist againsts the employer/promoter. 11. The POEA shall no longer be involved in the audition of talents. The recruitment agencies shall ensure that only legitimate performing artists are deployed. 12. The Filipino recruitment agency shall likewise be required to file with the POEA a copy, with an

Prescribing Additional Requirements, Conditions and Procedures for the Deployment of Performing Artists – DOLE Circular #01-91[1991]

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English translation, of the booking between the agency and the employer/promoter. contract foreign

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require, the initial passport validity period. The passport shall be renewable every year upon submission of usual requirements and presentation of documentary proof of compliance to the remittance requirement in the percentages provided for in this Order. The Ministry of Foreign Affairs shall not extend or renew the passport of any contract worker unless proof of his compliance with the mandatory remittance requirement is submitted. Sec. 4. The Ministry of Labor and Employment shall not approve the renewal of employment contracts and agency or service agreements unless proof of remittance of foreign exchange earnings is submitted. Sec. 5. For purposes of this Order, proof of compliance with the mandatory remittance requirement as mentioned in Section 1 hereof, may consist of any of the following documents or such alternative as may be approved by the Central Bank of the Philippines showing that the contract worker had in fact effected aforesaid remittance and had caused the surrender of the same for pesos through the Philippine banking system: a. Confirmed bank (foreign) remittance form; b. Certification from employer, duly authenticated, that remittance has been effected; c. Certification as to the surrender for pesos to the Philippine banking system; and d. Receipt of International Postal Money Order. Sec. 6. Remittances of foreign exchange earnings may be undertaken individually by the contract worker or collectively through the employer under a payroll deduction scheme, in accordance with Central Bank regulations and applicable guidelines. Sec. 7. As a prerequisite for accreditation by the Ministry of Labor and Employment, an employer shall commit to provide facilities to effect the remittances and monitoring of foreign exchange earnings of Filipino workers in his employ.

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Sec. 8. The Central Bank of the Philippines shall cause necessary arrangements to be made with the appropriate financing institutions to handle the remittances called for in this Order. In the absence of appropriate banking facilities, the Embassy or Consulate nearest to the job site, in accordance with local laws and regulations, may act in the interim as the channel for remittance of foreign exchange earnings. The Ministry of Foreign Affairs shall immediately inform the Central Bank of the Philippines these arrangements and shall remit all funds thereto. Sec. 9. Contract workers who fail to comply with the requirements of this Order shall be suspended or excluded from the list of eligible workers for overseas employment. In cases of subsequent violations, he shall be repatriated from the job site at the expense of the employer or at his expense, as the case may be. Filipino or foreign employers and/or their representatives who fail to comply with the requirements under this Order shall be excluded from the overseas employment program. In the case of local private employment agencies and entities, failure to comply with the provisions hereof shall be a ground for cancellation of their license or authority to recruit workers for overseas employment, without prejudice to their liabilities under existing laws and regulations. Sec. 10. The Ministries of Labor and Employment and Foreign Affairs and the Central Bank of the Philippines shall draw up the necessary rules and procedures for the proper implementation of this Order within ten (10) days from the signing hereof.

EO 857 – Governing the Remittance in the Philippines of Foreign Exchange Earnings of Filipino Workers Abroad and for other Purposes [1982] Sec. 1. It shall be mandatory for every Filipino contract worker abroad to remit regularly a portion of his foreign exchange earnings to his beneficiary in the Philippines through the Philippine banking system. Licensed agencies and other entities authorized by the Ministry of Labor and Employment to recruit Filipino workers for overseas employment are similarly required to remit their workers' earnings as provided for in this Order. Sec. 2. All contracts of employment and agency or service agreements submitted to the Ministry of Labor and Employment shall contain a proviso that shall make it mandatory for workers to remit to the Philippines in foreign exchange at least the following portions of their earnings; a) Seamen or mariners: Seventy (70) percent of basic salary; b) Workers of Filipino contractors and construction companies: Seventy (70) percent of basic salary; c) Doctors, engineers, teachers, nurses and other professional workers whose contract provide for free board and lodging: Seventy (70) percent of basic salary; d) All other professional workers whose employment contracts do not provide for free board and lodging facilities: Fifty (50) percent of basic salary; e) Domestic and other service workers: Fifty (50) percent of basic salary; f) All other workers not falling under the aforementioned categories: Fifty (50) percent of basic salary. Sec. 3. Passports issued to Filipino contract workers shall have an initial period of validity of one year provided that the Ministry of Foreign Affairs may adjust, as circumstances may

2.01 RECRUITMENT WORKERS

AND

PLACEMENT

OF

Art. 13. Definitions. (a) "Worker" means any member of the labor force, whether employed or unemployed. (b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring

LABOR MIDTERMS MAGIC NOTES!
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. Definition – Law Structure People v Panis [1988] The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in the basic rule in Art. 13(b) will constitute recruitment and placement even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to 2 or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement. The words “shall be deemed” create that presumption. People v Sualo [2000] Recruitment -> BASIC RULE:: ACTS: canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers -> INCLUDES: Referrals, Contract services, Acts accompanied by a promise or advertising for employment, locally or abroad, Consideration, whether for profit or not --> PROVISO:: actor- any person or entity; act- who offers or promises employment; consideration- for a fee; number- to 2 or more; presumption- deemed engaged in recruitment and placement 2.02 EMPLOYMENT AGENCY Art. 13. Definitions. (c) "Private fee-charging employment agency" means any person or entity engaged in recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both.

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(d) "License" means a document issued by the Department of Labor authorizing a person or entity to operate a private employment agency. (e) "Private recruitment entity" means any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or employers. (f) "Authority" means a document issued by the Department of Labor authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. 2.03 ALLOWED ENTITIES A. General Rule Art. 16. Private recruitment. Except as provided in Chapter II of this Title, no person or entity other than the public employment offices, shall engage in the recruitment and placement of workers. Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps, international organizations and such other employers as may be allowed by the Secretary of Labor is exempted from this provision. Art. 25. Private sector participation in the recruitment and placement of workers. Pursuant to national development objectives and in order to harness and maximize the use of private sector resources and initiative in the development and implementation of a comprehensive employment program, the private employment sector shall participate in the recruitment and placement of workers, locally and overseas, under such guidelines, rules and regulations as may be issued by the Secretary of Labor. Art. 12. Statement of objectives. It is the policy of the State: (f) To strengthen the network of public employment offices and rationalize the

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participation of the private sector in the recruitment and placement of workers, locally and overseas, to serve national development objectives. B. Allowed Entities a. Private – 13(c), (e) Art. 13. Definitions. (c) “Private fee-charging employment agency" means any person or entity engaged in recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both; (e) “Private recruitment entity" means any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or employers. b. Public

Art. 14. Employment promotion. The Secretary of Labor shall have the power and authority: g. To organize and establish new employment offices in addition to existing employment offices under the Department of Labor as the need arises. 2.04 PROHIBITED ENTITY Art. 16. Private recruitment. Except as provided in Chapter II of this Title, no person or entity other than the public employment offices, shall engage in the recruitment and placement of workers. Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps, international organizations and such other employers as may be allowed by the Secretary of Labor is exempted from this provision. Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of

LABOR MIDTERMS MAGIC NOTES!
airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not.

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be transferred, conveyed or assigned to any other person or entity. Any transfer of business address, appointment or designation of any agent or representative including the establishment of additional offices anywhere shall be subject to the prior approval of the Department of Labor. Art. 30. Registration fees. The Secretary of Labor shall promulgate a schedule of fees for the registration of all applicants for license or authority. Art. 31. Bonds. All applicants for license or authority shall post such cash and surety bonds as determined by the Secretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms and conditions of employment as may be appropriate. Art. 32. Fees to be paid by workers. Any person applying with a private fee-charging employment agency for employment assistance shall not be charged any fee until he has obtained employment through its efforts or has actually commenced employment. Such fee shall be always covered with the appropriate receipt clearly showing the amount paid. The Secretary of Labor shall promulgate a schedule of allowable fees. Art. 33. Reports on employment status. Whenever the public interest requires, the Secretary of Labor may direct all persons or entities within the coverage of this Title to submit a report on the status of employment, including job vacancies, details of job requisitions, separation from jobs, wages, other terms and conditions and other employment data. Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder of authority: a. To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any

38
amount greater than that actually received by him as a loan or advance; b. To furnish or publish any false notice or information or document in relation to recruitment or employment; c. To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code. d. To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment; e. To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency; f. To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives; h. To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor. i. To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor; j. To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency; and k. To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations. Art. 35. Suspension and/or cancellation of license or authority. The Minister of Labor shall have the power to suspend or cancel any license

2.05 TECHNIQUES OF REGULATION Art. 25. Private sector participation in the recruitment and placement of workers. Pursuant to national development objectives and in order to harness and maximize the use of private sector resources and initiative in the development and implementation of a comprehensive employment program, the private employment sector shall participate in the recruitment and placement of workers, locally and overseas, under such guidelines, rules and regulations as may be issued by the Secretary of Labor. Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not. Art. 27. Citizenship requirement. Only Filipino citizens or corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas. Art. 28. Capitalization. All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary of Labor. Art. 29. Non-transferability of license or authority. No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued or at any place other than that stated in the license or authority

LABOR MIDTERMS MAGIC NOTES!
or authority to recruit employees for overseas employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas Employment Development Board, or for violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions. 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. 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. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. c. The Secretary of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such

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non-licensee or non-holder of authority if after investigation it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job-seekers. The Secretary shall order the search of the office or premises and seizure of documents, paraphernalia, properties and other implements used in illegal recruitment activities and the closure of companies, establishments and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so. Art. 39. Penalties. The penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P1000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined herein; a. Any licensee or holder of authority found violating or causing another to violate any provision of this Title or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than two years nor more than five years or a fine of not less than P10,000 nor more than P50,000, or both such imprisonment and fine, at the discretion of the court; b. Any person who is neither a licensee nor a holder of authority under this Title found violating any provision thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than four years nor more than eight years or a fine of not less than P20,000 nor more than P100,000 or both such imprisonment and fine, at the discretion of the court; c. If the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for violation; and if such officer is an alien, he shall, in addition to the penalties herein prescribed, be deported without further proceedings; In every case, conviction shall cause and carry the automatic revocation of the license or authority and all the permits and privileges granted to such person or entity under this Title,

39
and the forfeiture of the cash and surety bonds in favor of the Overseas Employment Development Board or the National Seamen Board, as the case may be, both of which are authorized to use the same exclusively to promote their objectives. License People v Buli-e [2003] The agency was actually licensed but licenses are territorial; it must only be within the place specified although applicants may be nonresidents of such place. Licensed agencies are prohibited from conducting any provincial recruitment, job fairs or recruitment activities of any form outside of the address stated in the license, acknowledged branch or extension office, without prior authority secured from the POEA. 2.06 ILLEGAL RECRUITMENT 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. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. c. The Secretary of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such non-licensee or non-holder of authority if after investigation it is determined that his activities

LABOR MIDTERMS MAGIC NOTES!
constitute a danger to national security and public order or will lead to further exploitation of job-seekers. The Secretary shall order the search of the office or premises and seizure of documents, paraphernalia, properties and other implements used in illegal recruitment activities and the closure of companies, establishments and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so. Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder of authority: a. To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance; b. To furnish or publish any false notice or information or document in relation to recruitment or employment; c. To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code. d. To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment; e. To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency; f. To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives; h. To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor.

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i. To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor; j. To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency; and k. To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations. RA 8042: Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers and includes referring, contact services, promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-license or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines. Provided, that such non-license or non-holder, who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise include the following acts, whether committed by any persons, whether a non-licensee, non-holder, licensee or holder of authority. (a) To charge or accept directly or indirectly any amount greater than the specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay any amount greater than that actually received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in relation to recruitment or employment; (c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code;

40
(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment; (e) To influence or attempt to influence any persons or entity not to employ any worker who has not applied for employment through his agency; (f) To engage in the recruitment of placement of workers in jobs harmful to public health or morality or to dignity of the Republic of the Philippines; (g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by his duly authorized representative; (h) To fail to submit reports on the status of employment, placement vacancies, remittances of foreign exchange earnings, separations from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; (i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment; (j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly on indirectly in the management of a travel agency; (k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under the Labor Code and its implementing rules and regulations; (l) Failure to actually deploy without valid reasons as determined by the Department of Labor and Employment; and (m) Failure to reimburse expenses incurred by the workers in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in

LABOR MIDTERMS MAGIC NOTES!
large scale shall be considered as offense involving economic sabotage. Illegal recruitment is deemed committed by a syndicate carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group. The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical persons, the officers having control, management or direction of their business shall be liable. Elements of a Crime People v Oralono [2000] People v Sagayaga [2004] People v Baytic [2003] Illegal recruitment is committed when two elements concur. (1) The offender has not complied with the guidelines issued by the Sec of Labor and Employment, particularly wrt to securing of a license or authority to enable one to engage lawfully in recruitment and placement of workers, either locally or overseas; (2) He or she undertakes either any activity within the meaning of “recruitment and placement” defined under Art. 13 par (b) or any of the prohibited practices enumerated under Art. 34 of the Labor Code. Large Scale People v Buli-e [2003] People v Dujua [2004] People v Reyes [1995] In cases of illegal recruitment in large scale, a third element is added: that the accused commits the acts against three or more persons, individually or as a group. Referral People v Meris [2000] [She told victims that she would accompany them to agency where she also applied] The query is WON she merely introduced complainants to the recruiters or did her actions go beyond that. Although the accused was not an

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employee of the alleged illegal recruiter, evidence shows that she was the one who approached complainants and prodded them to seek employment abroad. This is clearly an act of referral. Their recruitment would not have been consummated were it not for the direct participation of the accused in the recruitment process. People v Fortuna [2003] Absence of receipts to evidence payment to the recruiter would not warrant an acquittal. The testimony of complainants found to be credible. Employees People v Corpuz [2003] An employee of a company engaged in illegal recruitment may be held liable as a principal, together with the employer, if it is shown that he actively and consciously participated in the illegal recruitment. However, where it is shown that the employees was merely acting under the direction of his superiors and was unaware that his acts constituted a crime, he may not be held criminally liable for an act done for, and in behalf of his employer. People v Gutierrez [2004] Accused cannot escape liability by claiming that she was not aware that before working for her employer in the recruitment agency, she should first be registered with the POEA. Illegal recruitment in large scale is malum prohibitum, not malum in se. Good faith is not a defense. 2.07 ENFORCEMENT AND SANCTIONS 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.

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

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Executive Sec v CA [2004] SC had already applied RA 8042 thereby affirming its validity. Legality of certain portions of RA 8042 was questioned – illegal recruitment, penalties, and venue. 2.08 LIABILITY OF AGENCY G&M Phil Inc v Bato-Malaquz [2005] Contractual undertakings submitted to the Bureau of Employment Services constitute the legal basis for holding the recruiter and other private employment or recruitment agencies, liable jointly and severally with its principal, the foreign-based employer, for all claims filed by recruited workers which may arise in connection with the implementation of the service agreements or employment contracts. 2.09 MIGRANT WORKERS ACT RA 8042: Sec. 2. DECLARATION OF POLICIES. (a) In the pursuit of an independent foreign policy and while considering national sovereignty, territorial integrity, national interest and the right to self-determination paramount in its relations with other states, the State shall, at all times, uphold the dignity of its citizens whether in country or overseas, in general, and Filipino migrant workers, in particular. (b) The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. Towards this end, the State shall provide adequate and timely social, economic and legal services to Filipino migrant workers. (c) While recognizing the significant contribution of Filipino migrant workers to the national economy through their foreign exchange remittances, the State does not promote overseas employment as a means to sustain economic growth and achieve national development. The existence of the overseas employment program rests solely on the assurance that the dignity and fundamental human rights and freedoms of the Filipino

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citizens shall not, at any time, be compromised or violated. The State, therefore, shall continuously create local employment opportunities and promote the equitable distribution of wealth and the benefits of development. (d) The State affirms the fundamental equality before the law of women and men and the significant role of women in nation-building. Recognizing the contribution of overseas migrant women workers and their particular vulnerabilities, the State shall apply gender sensitive criteria in the formulation and implementation of policies and programs affecting migrant workers and the composition of bodies tasked for the welfare of migrant workers. (e) Free access to the courts and quasijudicial bodies and adequate legal assistance shall not be denied to any persons by reason of poverty. In this regard, it is imperative that an effective mechanism be instituted to ensure that the rights and interest of distressed overseas Filipinos, in general, and Filipino migrant workers, in particular, documented or undocumented, are adequately protected and safeguarded. (f) The right of Filipino migrant workers and all overseas Filipinos to participate in the democratic decision-making processes of the State and to be represented in institutions relevant to overseas employment is recognized and guaranteed. (g) The State recognizes that the ultimate protection to all migrant workers is the possession of skills. Pursuant to this and as soon as practicable, the government shall deploy and/or allow the deployment only to skilled Filipino workers. (h) Non-governmental organizations, duly recognized as legitimate, are partners of the State in the protection of Filipino migrant workers and in the promotion of their welfare, the State shall cooperate with them in a spirit of trust and mutual respect. (I) Government fees and other administrative costs of recruitment, introduction, placement and assistance to migrant workers shall be rendered free without prejudice to the provision of Section 36 hereof.

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Nonetheless, the deployment of Filipino overseas workers, whether land-based or seabased by local service contractors and manning agencies employing them shall be encouraged. Appropriate incentives may be extended to them. RA 8042: Sec. 4. DEPLOYMENT OF MIGRANT WORKERS. - The State shall deploy overseas Filipino workers only in countries where the rights of Filipino migrant workers are protected. The government recognizes any of the following as guarantee on the part of the receiving country for the protection and the rights of overseas Filipino workers: (a) It has existing labor and social laws protecting the rights of migrant workers; (b) It is a signatory to multilateral conventions, declaration or resolutions relating to the protection of migrant workers; (c) It has concluded a bilateral agreement or arrangement with the government protecting the rights of overseas Filipino workers; and (d) It is taking positive, concrete measures to protect the rights of migrant workers. RA 8042: Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers and includes referring, contact services, promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-license or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines. Provided, that such non-license or non-holder, who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise include the following acts, whether committed by any persons, whether a non-licensee, non-holder, licensee or holder of authority. (a) To charge or accept directly or indirectly any amount greater than the specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make

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a worker pay any amount greater than that actually received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in relation to recruitment or employment; (c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code; (d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment; (e) To influence or attempt to influence any persons or entity not to employ any worker who has not applied for employment through his agency; (f) To engage in the recruitment of placement of workers in jobs harmful to public health or morality or to dignity of the Republic of the Philippines; (g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by his duly authorized representative; (h) To fail to submit reports on the status of employment, placement vacancies, remittances of foreign exchange earnings, separations from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; (i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment; (j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly on indirectly in the management of a travel agency; (k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under the Labor Code and its implementing rules and regulations;

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(l) Failure to actually deploy without valid reasons as determined by the Department of Labor and Employment; and (m) Failure to reimburse expenses incurred by the workers in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered as offense involving economic sabotage. Illegal recruitment is deemed committed by a syndicate carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group. The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical persons, the officers having control, management or direction of their business shall be liable. RA 8042: Sec.10. MONEY CLAIMS. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the priginal and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. 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 provisions 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

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jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract. Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages under this section shall be paid within four (4) months from the approval of the settlement by the appropriate authority. In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. Non-compliance with the mandatory periods for resolutions of cases provided under this section shall subject the responsible officials to any or all of the following penalties: (a) The salary of any such official who fails to render his decision or resolutions within the prescribed period shall be, or caused to be, withheld until the said official complies therewith; (b) Suspension for not more than ninety (90) days; or (c) Dismissal from the service with disqualifications to hold any appointive public office for five (5) years. Provided, however, that the penalties herein provided shall be without prejudice to any liability which any such official may have incurred under other existing laws or rules and regulations as a consequence of violating the provisions of this paragraph. Phil. Employ Services v Paranio [2004] Dismissal was not for valid and legal grounds. The rule lex loci contractus governs. Therefore, the Labor Code, its implementing rules and regulations, and other laws affecting labor,

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apply in this case. (BUT Sec 10 of RA 8042 was applied to grant them their money claims) Placewell Int Services Corp v Camote [2006] RA 8042 explicitly prohibits the substitution or alteration to the prejudice of the worker, of employment contracts already approved and verified by the DOLE from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without approval of the DOLE. SECTION 3: ALIEN EMPLOYMENT Statutory Reference Omnibus Guidelines For The Issuance Of Employment Permits To Foreign Nationals Pursuant to the provisions of Articles 5, and 40 of PD 442, as amended, the provisions of RULE XIV, Book I of its Implementing Rules and Regulations, Section 17(5), Chapter 4, Title VII of the Administrative Code of 1987, the following Omnibus Guidelines for the issuance of Employment Permits are hereby promulgated: Rule I. Coverage and Exemption 1. The following shall apply for Alien Employment Permit (AEP): 1.1 All foreign nationals seeking admission to the Philippines for the purpose of employment; 1.2 Missionaries or religious workers who intend to engage in gainful employment; 1.3 Holders of Special Investors Resident Visa (SIRV), Special Retirees Resident Visa (SRRV), Treaty Traders Visa (9d) or Special Nonimmigrant Visa (47(a)2), who occupy any executive, advisory, supervisory, or technical position in any establishment; 1.4 Agencies, organizations or individuals whether public or private, who secure the services of foreign professionals to practice their professions in the Philippines in the Philippines under reciprocity and other international agreements. 1.5 Non-Indo Chinese Refugees who are asylum seekers and given refugee status by the United Nations High Commissioner on Refugees (UNHCR) or the Department of Justice under DOJ Department Order No. 94, series of 1998;

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1.6 Resident foreign nationals seeking employment in the Philippines. 2. Exemption. The following categories of foreign nationals are exempt from securing an employment permit in order to work in the Phiilppines. 2.1 All members of the diplomatic services and foreign government officials accredited by the Philippine Government; 2.2 Officers and staff of international organizations of which the Philippine government is a cooperating member, and their legitimate spouse desiring to work in the Philippines; 2.3 Foreign nationals elected as members of the Governing board who do not occupy any other position, but have only voting rights in the corporation; and 2.4 All foreign nationals granted exemption by special laws and all other laws that may be promulgated by the Congress. RULE II. Procedures in the Processing of Applications for AEP 1. All foreign nationals seeking employment in the Philippines under Rule 1 hereof or their prospective employers, shall file their applications with the DOLE Regional Office having jurisdiction over the intended place of work. 2. Fees - The applicant shall pay filing, publication and permit fees in the amount of Eight Thousand Pesos (P8,000.00) for each application for AEP with a validity of one (1) year. Three Thousand Pesos (P3,000.00) shall be charged for every additional year of validity or a fraction thereof. 3. An AEP shall be issued based on the following: 3.1 Compliance bye the applicant employer or the foreign national with the substantive and documentary requirements; 3.2 Determination of the DOLE Secretary that there is no Filipino national who is competent, able and willing to do the job for which the services of the applicant is desired; 3.3 Assessment of the DOLE Secretary that the employment of the foreign national will redound to national benefit; 4. Denial of Application for AEP - An application for AEP may be denied based on the ground of non-compliance with any of the requirements for

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issuance of AEP or for misrepresentation of facts in the application or submission of falsified or tampered documents. Foreign nationals whose applications have been denied shall not be allowed to re-apply in any of the DOLE Regional Offices. 5. Renewal of Permit - An application for renewal of AEP shall be filed at least fifteen (15) days before its expiration. For elective officers, applications for renewal shall be filed upon election or at least thirty (30) days before the effectivity of the applicant's term of office if the succeeding term of office is ascertained. Failure to file the application for renewal of permit within the prescribed period shall be subject to fines of Five Thousand Pesos (5,000.00), if filed within six (6) months after the prescribed period and Ten Thousand Pesos (10,000.00), if filed after six (6) months. Failure to renew the AEP within one (1) year after its expiration shall be a cause for its revocation or cancellation. 6. The employer shall notify the DOLE-RO which issued the permit of the date of the assumption to duty of the foreign national within thirty (30) days from issuance of the permit. 7. Validity of Permits - The validity of permits shall be as follows: 7.1 As a general rule, the validity of permits shall be for a period of one (1) year, unless the employment contract, consultancy services, or other modes of engagement or term of office for elective officers, provides for a longer period. 7.2 The effectivity of the renewal shall be on the day after the expiration of the previous permit, regardless of whether or not the renewal is granted before or after the expiration of the previous permit. 7.3 As a general rule, the permits shall be valid only for the position and the employer for which it was issued, except in case of foreign nationals who are holders of multiple positions in one corporation, where one AEP shall be valid for such multiple positions. 7.4 The permits of resident foreign nationals shall be valid for multiple employers, regardless of the nature and duration of their employment, provided that they shall report changes in their employment status and the identity of their

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employers to the DOLE Regional Office which has issued the permit. RULE III. Revocation/Cancellation of Employment Permits Issued 1. The permits issued may, motu proprio or upon a petition, be cancelled or revoked based on any of the following grounds: 1.1 Misrepresentation of facts or falsification of the documents submitted; 1.2 The foreign national has been declared as an undesirable alien by competent authorities; 1.3 Non-compliance with the conditions for which the AEP was issued; 1.4 Failure to renew AEP within one (1) year after its expiration. 2. Petitions for cancellation or revocation of permits issued shall be resolved within thirty (30) calendars from receipt thereof. 3. Any aggrieved party may file a Motion for Reconsideration and/or Appeal and the same shall be resolved based on Paragraph 4 of this Rule. 4. Remedies in Case of Denial or Cancellation - A Motion for Reconsideration maybe filed by an aggrieved party within seven (7) calendar days after receipt of the Order of Denial/Cancellation. The DOLE Regional Director shall resolve the said Motion for Reconsideration within ten (10) calendar days from receipt thereof. A motion for Reconsideration filed after the period of seven (7) calendar days but within ten (10) calendar days after receipt of the denial shall be treated as an appeal. An appeal from the decision of the DOLE Regional Director may be filed with the Secretary of labor and Employment within ten (10) calendar days from receipt of an Order from the DOLE Regional Director. The decision of the Secretary of Labor and Employment shall be final and unappealable. RULE IV. Penal and Transitory Provisions 1. The DOLE Regional Directors, after due notice and hearing, shall have the power to order and impose a fine of Five Thousand Pesos (P5,000.00) on foreign nationals found working without an AEP for less than one (1) year and Ten Thousand Pesos (P10,000.00) for more than one (1) year. 2. All applications for employment permit/certificates pending at the DOLE-RO upon

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the effectivity of these Guidelines shall be covered and processed under the provisions of these Guidelines.. 3. Holders of provisional and extended AEPs issued under Memorandum dated 24 August 2001 regarding Alternative Interim Measures for the Issuance of Alien Employment Permits, shall apply for an AEP pursuant to these Guidelines on or before the expiration of the provisional and extended AEP. 4. Foreign nationals who are already working in the country and who have not yet secured the requisite employment permit shall have ninety (90) days from the effectivity of these Guidelines to secure the said employment permit without penalty. 3.01 COVERAGE Non-Resident Alien Almodiel v NLRC [1993] [Almodiel was dismissed and his duties were delegated to a Chinese. He raised that the other person had no working permit.] Art. 40 of the Labor Code which requires employment permit refers to non-resident aliens. The employment permit is required for entry into the country for employment purposes and is issued after determination of the non-availability of a person in the Philippines who is competent able and willing at the time of application to perform the service for which the alien is desired. A resident alien does not fall within the ambit of this provision. 3.02 TECHNIQUE REGULATION – Employment Permit Art. 40. Employment permit of non-resident aliens. Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor. The employment permit may be issued to a nonresident alien or to the applicant employer after a determination of the non-availability of a

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person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired. For an enterprise registered in preferred areas of investments, said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered enterprise. Art. 41. Prohibition against transfer of employment. a. After the issuance of an employment permit, the alien shall not transfer to another job or change his employer without prior approval of the Secretary of Labor. b. Any non-resident alien who shall take up employment in violation of the provision of this Title and its implementing rules and regulations shall be punished in accordance with the provisions of Articles 289 and 290 of the Labor Code. c. In addition, the alien worker shall be subject to deportation after service of his sentence. Art. 42. Submission of list. Any employer employing non-resident foreign nationals on the effective date of this Code shall submit a list of such nationals to the Secretary of Labor within thirty (30) days after such date indicating their names, citizenship, foreign and local addresses, nature of employment and status of stay in the country. The Secretary of Labor shall then determine if they are entitled to an employment permit. RA 7916 – The Special Economic Zone Act of 1995 – Sec 2(b); 3(c); 4; 10; 40 Sec 2. Declaration of Policy. - It is the declared policy of the government to translate into practical realities the following State policies and mandates in the 1987 Constitution, namely: b)"The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive." (Sec. 12, Art. XII) In pursuance of these policies, the government shall

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actively encourage, promote, induce and accelerate a sound and balanced industrial, economic and social development of the country in order to provide jobs to the people especially those in the rural areas, increase their productivity and their individual and family income, and thereby improve the level and quality of their living condition through the establishment, among others, of special economic zones in suitable and strategic locations in the country and through measures that shall effectively attract legitimate and productive foreign investments. Sec 3. Purposes, Intents and Objectives. - It is the purpose, intent and objective of this Act: c)To promote the flow of investors, both foreign and local, into special economic zones which would generate employment opportunities and establish backward and forward linkages among industries in and around the economic zones; Sec 4. Definition of Terms. - For purposes of this Act, the following definitions shall apply to the following terms: a)"Special economic zones (SEZ)" - hereinafter referred to as the ECOZONES, are selected areas with highly developed or which have the potential to be developed into agroindustrial, industrial tourist/recreational, commercial, banking, investment and financial centers. An ECOZONE may contain any or all of the following: industrial estates (IEs), export processing zones (EPZs), free trade zones, and tourist/recreational centers. b)"Industrial estate (IE)" - refers to a tract of land subdivided and developed according to a comprehensive plan under a unified continuous management and with provisions for basic infrastructure and utilities, with or without prebuilt standard factory buildings and community facilities for the use of the community of industries. c)"Export processing zone (EPZ)" - a specialized industrial estate located physically and/or administratively outside customs territory, predominantly oriented to export production. Enterprises located in export processing zones are allowed to import capital equipment and raw materials free from duties, taxes and other import restrictions.

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d)"Free trade zone" - an isolated policed area adjacent to a port of entry (as a seaport) and/or airport where imported goods may be unloaded for immediate transshipment or stored, repacked, sorted, mixed, or otherwise manipulated without being subject to import duties. However, movement of these imported goods from the freetrade area to a non-free-trade area in the country shall be subject to import duties. Enterprises within the zone are granted preferential tax treatment and immigration laws are more lenient. Sec 10. Immigration. - Any investor within the ECOZONE whose initial investment shall not be less than One hundred fifty thousand dollars ($150,000), his/her spouse and dependent children under twenty-one (21) years of age shall be granted permanent resident status within the ECOZONE. They shall have freedom of ingress and egress to and from the ECOZONE without any need of special authorization from the Bureau of Immigration. The PEZA shall issue working visas renewable every two (2) years to foreign executives and other aliens, possessing highly-technical skills which no Filipino within the ECOZONE possesses, as certified by the Department of Labor and Employment. The names of aliens granted permanent residents status and working visas by the PEZA shall be reported to the Bureau of Immigration within thirty (30) days after issuance thereof. Sec 40. Percentage of Foreign Nationals. – Employment of foreign nationals hired by ECOZONE enterprises in a supervisory, technical or advisory capacity shall not exceed five percent (5%) of its workforce without the express authorization of the Secretary of Labor and Employment. RA 7918 – Amending Omnibus Investments Code of 1987 – Sec 39(g) Art. 39. Incentives to Registered Enterprises. — All registered enterprises shall be granted the following incentives to the extent engaged in a preferred area of investment:

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"(g) Employment of Foreign Nationals. — Subject to the provisions of Section 29 of Commonwealth Act No. 613, as amended, a registered enterprise may employ foreign nationals in supervisory, technical or advisory positions for a period not exceeding five (5) years from its registration, extendible for limited periods at the discretion of the Board: Provided, however, That when the majority of the capital stock of a registered enterprise is owned by foreign investors, the positions of president, treasurer, and general manager or their equivalents may be retained by foreign nationals beyond the period set forth within. "Foreign nationals under employment contract within the purview of this incentive, their spouses and unmarried children under twenty-one (21) years of age, who are not excluded by Section 29 of Commonwealth Act No. 613, as amended, shall be permitted to enter and reside in the Philippines during the period of employment of such foreign nationals. A registered enterprise shall train Filipinos as understudies of foreign nationals in administrative, supervisory and technical skills and shall submit annual reports on such training to the Board. Authority Employment Permit – Issuance General Milling Corp v Torres [1991] [Tim Cone’s employment permit was cancelled.] The Labor Code itself specifically empowers respondent Secretary to make a determination as to the availability of the services of a “person in the Philippines who is competent, able and willing at the time of application to perform the services for which an alien is desired. The DOLE is the agency vested with jurisdiction to determine the question of availability of local workers. The constitutional validity of legal provisions granting such jurisdiction and authority and requiring proof of non-availability of local nationals able to carry out the duties of the position involved, cannot be seriously questioned.

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Section 4: Employment Of Apprentices, Learners And Handicapped Workers Statutory Reference Art. 57. Statement of objectives. This Title aims: 1. To help meet the demand of the economy for trained manpower; 2. To establish a national apprenticeship program through the participation of employers, workers and government and non-government agencies; and 3. To establish apprenticeship standards for the protection of apprentices. Art. 58. Definition of Terms. As used in this Title: a. "Apprenticeship" means practical training on the job supplemented by related theoretical instruction. b. An "apprentice" is a worker who is covered by a written apprenticeship agreement with an individual employer or any of the entities recognized under this Chapter. d. An "apprenticeable occupation" means any trade, form of employment or occupation which requires more than three (3) months of practical training on the job supplemented by related theoretical instruction. e. "Apprenticeship agreement" is an employment contract wherein the employer binds himself to train the apprentice and the apprentice in turn accepts the terms of training. Art. 59. Qualifications of apprentice. To qualify as an apprentice, a person shall: a. Be at least fourteen (14) years of age; b. Possess vocational aptitude and capacity for appropriate tests; and c. Possess the ability to comprehend and follow oral and written instructions. Trade and industry associations may recommend to the Secretary of Labor appropriate educational requirements for different occupations. Art. 60. Employment of apprentices. Only employers in the highly technical industries may employ apprentices and only in apprenticeable

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occupations approved by the Secretary of Labor and Employment. (As amended by Section 1, Executive Order No. 111, December 24, 1986) Art. 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates of apprentices, shall conform to the rules issued by the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. The Department shall develop standard model programs of apprenticeship. (As amended by Section 1, Executive Order No. 111, December 24, 1986) Art. 62. Signing of apprenticeship agreement. Every apprenticeship agreement shall be signed by the employer or his agent, or by an authorized representative of any of the recognized organizations, associations or groups and by the apprentice. An apprenticeship agreement with a minor shall be signed in his behalf by his parent or guardian, if the latter is not available, by an authorized representative of the Department of Labor, and the same shall be binding during its lifetime. Every apprenticeship agreement entered into under this Title shall be ratified by the appropriate apprenticeship committees, if any, and a copy thereof shall be furnished both the employer and the apprentice. Art. 63. Venue of apprenticeship programs. Any firm, employer, group or association, industry organization or civic group wishing to organize an apprenticeship program may choose from any of the following apprenticeship schemes as the training venue for apprentice: a. Apprenticeship conducted entirely by and within the sponsoring firm, establishment or entity;

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b,. Apprenticeship entirely within a Department of Labor and Employment training center or other public training institution; or c. Initial training in trade fundamentals in a training center or other institution with subsequent actual work participation within the sponsoring firm or entity during the final stage of training. Art. 64. Sponsoring of apprenticeship program. Any of the apprenticeship schemes recognized herein may be undertaken or sponsored by a single employer or firm or by a group or association thereof or by a civic organization. Actual training of apprentices may be undertaken: a. In the premises of the sponsoring employer in the case of individual apprenticeship programs; b. In the premises of one or several designated firms in the case of programs sponsored by a group or association of employers or by a civic organization; or c. In a Department of Labor and Employment training center or other public training institution. Art. 65. Investigation of violation of apprenticeship agreement. Upon complaint of any interested person or upon its own initiative, the appropriate agency of the Department of Labor and Employment or its authorized representative shall investigate any violation of an apprenticeship agreement pursuant to such rules and regulations as may be prescribed by the Secretary of Labor and Employment. Art. 66. Appeal to the Secretary of Labor and Employment. The decision of the authorized agency of the Department of Labor and Employment may be appealed by any aggrieved person to the Secretary of Labor and Employment within five (5) days from receipt of the decision. The decision of the Secretary of Labor and Employment shall be final and executory. Art. 67. Exhaustion of administrative remedies. No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such

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agreement, unless he has exhausted all available administrative remedies. Art. 68. Aptitude testing of applicants. Consonant with the minimum qualifications of apprentice-applicants required under this Chapter, employers or entities with duly recognized apprenticeship programs shall have primary responsibility for providing appropriate aptitude tests in the selection of apprentices. If they do not have adequate facilities for the purpose, the Department of Labor and Employment shall perform the service free of charge. Art. 69. Responsibility for theoretical instruction. Supplementary theoretical instruction to apprentices in cases where the program is undertaken in the plant may be done by the employer. If the latter is not prepared to assume the responsibility, the same may be delegated to an appropriate government agency. Art. 70. Voluntary organization of apprenticeship programs; exemptions. a. The organization of apprenticeship program shall be primarily a voluntary undertaking by employer; b. When national security or particular requirements of economic development so demand, the President of the Philippines may require compulsory training of apprentices in certain trades, occupations, jobs or employment levels where shortage of trained manpower is deemed critical as determined by the Secretary of Labor and Employment. Appropriate rules in this connection shall be promulgated by the Secretary of Labor and Employment as the need arises; and c. Where services of foreign technicians are utilized by private companies in apprenticeable trades, said companies are required to set up appropriate apprenticeship programs. Art. 71. Deductibility of training costs. An additional deduction from taxable income of onehalf (1/2) of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices shall be granted to the

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person or enterprise organizing an apprenticeship program: Provided, That such program is duly recognized by the Department of Labor and Employment: Provided, further, That such deduction shall not exceed ten (10%) percent of direct labor wage: and Provided, finally, That the person or enterprise who wishes to avail himself or itself of this incentive should pay his apprentices the minimum wage. Art. 72. Apprentices without compensation. The Secretary of Labor and Employment may authorize the hiring of apprentices without compensation whose training on the job is required by the school or training program curriculum or as requisite for graduation or board examination. Art. 73. Learners defined. Learners are persons hired as trainees in semi-skilled and other industrial occupations which are nonapprenticeable and which may be learned through practical training on the job in a relatively short period of time which shall not exceed three (3) months. Art. 74. When learners may be hired. Learners may be employed when no experienced workers are available, the employment of learners is necessary to prevent curtailment of employment opportunities, and the employment does not create unfair competition in terms of labor costs or impair or lower working standards. Art. 75. Learnership agreement. Any employer desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include: a. The names and addresses of the learners; b. The duration of the learnership period, which shall not exceed three (3) months; c. The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage; and d. A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work during the first two

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(2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representative. Art. 76. Learners in piecework. Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done. Art. 77. Penalty clause. Any violation of this Chapter or its implementing rules and regulations shall be subject to the general penalty clause provided for in this Code. Art. 78. Definition. Handicapped workers are those whose earning capacity is impaired by age or physical or mental deficiency or injury. Art. 79. When employable. Handicapped workers may be employed when their employment is necessary to prevent curtailment of employment opportunities and when it does not create unfair competition in labor costs or impair or lower working standards. Art. 80. Employment agreement. Any employer who employs handicapped workers shall enter into an employment agreement with them, which agreement shall include: 1. The names and addresses of the handicapped workers to be employed; 2. The rate to be paid the handicapped workers which shall not be less than seventy five (75%) percent of the applicable legal minimum wage; 3. The duration of employment period; and 4/ The work to be performed by handicapped workers. The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized representative. Art. 81. Eligibility for apprenticeship. Subject to the appropriate provisions of this

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Code, handicapped workers may be hired as apprentices or learners if their handicap is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired Ra 7686: An Act To Strengthen Manpower Education And Training In The Philippines By Institutionalizing The Dual Training System As An Instructional Delivery System Of Technical And Vocational Education And Training, Providing The Mechanism, Appropriating Funds Therefor And For Other Purposes. Section 1. Short title. This Act shall be known as the "Dual Training System Act of 1994". Section 2. Declaration of policy. It is hereby declared the policy of the State to strengthen manpower education and training in the country so that the latter may be assured of an evergrowing supply of an educated and skilled manpower equipped with appropriate skills and desirable work habits and attitudes. The dual training system, as successfully tested in some highly developed countries, shall be adopted in duly accredited vocational and technical schools, in cooperation with accredited agricultural, industrial and business establishments, as one of the preferred means of creating a dependable pool of well-trained operators, craftsmen and technicians for the economy. Section 3. Objectives. This Act shall have the following objectives: (a) encourage increasing utilization of the dual system in technical and vocational education and training by both public and private schools within the context of the existing education system; (b) encourage increasing levels of investment in technical and vocational education and training by both public and private sectors specially in the rural areas; (c) enhance the employability and productivity of graduates by equipping them with analytical and creative thinking and problem-solving abilities; manipulative competencies which meet occupational standards and requirements; values and attitudes with emphasis on work ethics, quality orientation, discipline, honesty, self-

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reliance and patriotism; and (d) strengthen training cooperation between agricultural, industrial and business establishments and educational institutions by designing and implementing relevant training programmes in close coordination with concerned local government units. Section 4. Definition of terms. For purposes of this Act, the following terms shall mean: (b) "Dual training system" refers to an instructional delivery system of technical and vocational education and training that combines in-plant training and in-school training based on a training plan collaboratively designed and implemented by an accredited dual system educational institution/training centre and accredited dual system agricultural, industrial and business establishments with prior notice and advice to the local government unit concerned. Under this system, said establishments and the educational institution share the responsibility of providing the trainee with the best possible job qualifications, the former essentially through practical training and the latter by securing an adequate level of specific, general and occupation-related theoretical instruction. The word "dual" refers to the two parties providing instruction: the concept "system" means that the two instructing parties do not operate independently of one another, but rather coordinate their efforts; (c) "Trainee" refers to a person qualified to undergo the dual training system for the purpose of acquiring and developing job qualifications; (d) "Accredited dual training system educational institution/training centre" refers to a public or private institution duly recognized and authorized by the appropriate authority, in coordination with business and industry, to participate in the dual training system; (e) "Establishments" refer to enterprises and/or services of agricultural, industrial or business establishments; (f) "Accredited dual training system agricultural, industrial and business establishments" hereinafter referred to as agricultural, industrial and business establishments, refer to a sole proprietorship, partnership, corporation or cooperative which is duly recognized and

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authorized by the appropriate authority to participate in the dual training system educational institution. 4.01 POLICY OBJECTIVES RA 7796: RULES AND REGULATIONS IMPLEMENTING THE TESDA ACT OF 1994 (AN ACT CREATING THE TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY, PROVIDING FOR ITS POWERS, STRUCTURE AND FOR OTHER PURPOSES) [8 Aug 1994] Sec. 2. Declaration of Policy. — It is hereby declared the policy of the State to provide relevant, accessible, high quality and efficient technical education and skills development in support of the development of high quality Filipino middle-level manpower responsive to and in accordance with Philippine development goals and priorities. The State shall encourage active participation of various concerned sectors, particularly private enterprises, being direct participants in and immediate beneficiaries of a trained and skilled work force, in providing technical education and skills development opportunities. Sec. 3. Statement of Goals and Objectives. — It is the goal and objective of this Act to: a) Promote and strengthen the quality of technical education and skills development programs to attain international competitiveness. b) Focus technical education and skills development on meeting the changing demands for quality middle-level manpower; c) Encourage critical and creative thinking by disseminating the scientific and technical knowledge base of middle-level manpower development programs; d) Recognize and encourage the complementary roles of public and private institutions in technical education and skills development and training systems; and e) Inculcate desirable values through the development of moral character with emphasis on work ethic, self-discipline, self-reliance and nationalism. 4.02 APPRENTICE

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A. Defined – 4(j) RA 7796 j) “Apprenticeship” training within employment with compulsory related theoretical instructions involving a contract between an apprentice and an employer on an approved apprenticeable occupation; B. Apprenticeable Occupation – 4(m) RA 7796 m) “Apprenticeable Occupation” is an occupation officially endorsed by a tripartite body and approved for apprenticeship by the Authority; C. Qualification – Sec 12 RA 7610 as amended by RA 7658 Sec. 12. Employment of Children. — Children below fifteen (15) years of age shall not be employed except: (1) When a child works directly under the sole responsibility of his parents or legal guardian and where only members of the employer's family are employed: Provided, however, That his employment neither endangers his life, safety, health and morals, nor impairs his normal development; Provided, further, That the parent or legal guardian shall provide the said minor child with the prescribed primary and/or secondary education; or (2) Where a child's employment or participation in public entertainment or information through cinema, theater, radio or television is essential: Provided, The employment contract is concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: and Provided, That the following requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety, morals and normal development of the child; (b) The employer shall institute measures to

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prevent the child's exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and (c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child. In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. The Department of Labor and Employment shall promulgate rules and regulations necessary for the effective implementation of this Section. D. Allowed Employment Requirement Program Approval Nitto Enterprises v NLRC [1995] Prior approval by the DOLE of a proposed apprenticeship program is a condition sine qua non before an apprenticeship agreement can be validly entered into. See Art.61. E. Terms & Conditions of Employment Art. 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates of apprentices, shall conform to the rules issued by the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. The Department shall develop standard model programs of apprenticeship. (As amended by Section 1, Executive Order No. 111, December 24, 1986) Art. 72. Apprentices without compensation. The Secretary of Labor and Employment may

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authorize the hiring of apprentices without compensation whose training on the job is required by the school or training program curriculum or as requisite for graduation or board examination. F. Costs Art. 71. Deductibility of training costs. An additional deduction from taxable income of onehalf (1/2) of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices shall be granted to the person or enterprise organizing an apprenticeship program: Provided, That such program is duly recognized by the Department of Labor and Employment: Provided, further, That such deduction shall not exceed ten (10%) percent of direct labor wage: and Provided, finally, That the person or enterprise who wishes to avail himself or itself of this incentive should pay his apprentices the minimum wage. G. Enforcement Art. 65. Investigation of violation of apprenticeship agreement. Upon complaint of any interested person or upon its own initiative, the appropriate agency of the Department of Labor and Employment or its authorized representative shall investigate any violation of an apprenticeship agreement pursuant to such rules and regulations as may be prescribed by the Secretary of Labor and Employment. Art. 66. Appeal to the Secretary of Labor and Employment. The decision of the authorized agency of the Department of Labor and Employment may be appealed by any aggrieved person to the Secretary of Labor and Employment within five (5) days from receipt of the decision. The decision of the Secretary of Labor and Employment shall be final and executory. Art. 67. Exhaustion of administrative remedies. No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such

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agreement, unless he has exhausted all available administrative remedies.

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Employment or representative. his duly authorized

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sectors as supported by national and local government agencies. (d) The State also recognizes the role of the private sector in promoting the welfare of disabled persons and shall encourage partnership in programs that address their needs and concerns. (e) To facilitate integration of disabled persons into the mainstream of society, the State shall advocate for and encourage respect for disabled persons. The State shall exert all efforts to remove all social, cultural, economic, environmental and attitudinal barriers that are prejudicial to disabled persons. Sec. 3. Coverage. — This Act shall cover all disabled persons and, to the extent herein provided, departments, offices and agencies of the National Government or nongovernment organizations involved in the attainment of the objectives of this Act. Sec. 4. Definition of Terms. — For purposes of this Act, these terms are defined as follows: (a) Disabled persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being; (b) Impairment is any loss, diminution or aberration of psychological, physiological, or anatomical structure or function; (c) Disability shall mean 1) a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individual; 2) a record of such an impairment; or 3) being regarded as having such an impairment; (d) Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability, that limits or prevents the function or activity, that is considered normal given the age and sex of the individual; (e) Rehabilitation is an integrated approach to physical, social, cultural, spiritual, educational and vocational measures that create conditions for the individual to attain the highest possible level of functional ability; (f) Social Barriers refer to the characteristics of institutions, whether legal, economic, cultural,

4.03 LEARNERS A. Defined – 4, RA 7796 n) “Learners” refer to persons hired as trainees in semi-skilled and other industrial occupations which are non-apprenticeable. Learnership programs must be approved by the Authority. B. Allowed Employment – 74(b) Art. 74. When learners may be hired. Learners may be employed when no experienced workers are available, the employment of learners is necessary to prevent curtailment of employment opportunities, and the employment does not create unfair competition in terms of labor costs or impair or lower working standards. C. Terms & Conditions of Employment – 75, 76 Art. 75. Learnership agreement. Any employer desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include: a. The names and addresses of the learners; b. The duration of the learnership period, which shall not exceed three (3) months; c. The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage; and d. A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. The learnership agreement shall be subject to inspection by the Secretary of Labor and

Art. 76. Learners in piecework. Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done. 4.04 HANDICAPPED WORKERS RA 7277: AN ACT PROVIDING FOR THE REHABILITATION, SELF-DEVELOPMENT AND SELFRELIANCE OF DISABLED PERSONS AND THEIR INTEGRATION INTO THE MAINSTREAM OF SOCIETY AND FOR OTHER PURPOSES. Sec 1. Title. — This Act shall be known and cited as the "Magna Carta for Disabled Persons." Sec. 2. Declaration of Policy — The grant of the rights and privileges for disabled persons shall be guided by the following principles: (a) Disabled persons are part of Philippine society, thus the State shall give full support to the improvement of the total well-being of disabled persons and their integration into the mainstream of society. Toward this end, the State shall adopt policies ensuring the rehabilitation, self-development and self-reliance of disabled persons. It shall develop their skills and potentials to enable them to compete favorably for available opportunities. (b) Disabled persons have the same rights as other people to take their proper place in society. They should be able to live freely and as independently as possible. This must be the concern of everyone — the family, community and all government and nongovernment organizations. Disabled persons' rights must never be perceived as welfare services by the Government. (c) The rehabilitation of the disabled persons shall be the concern of the Government in order to foster their capacity to attain a more meaningful, productive and satisfying life. To reach out to a greater number of disabled persons, the rehabilitation services and benefits shall be expanded beyond the traditional urbanbased centers to community based programs, that will ensure full participation of different

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recreational or other, any human group, community, or society which limit the fullest possible participation of disabled persons in the life of the group. Social barriers include negative attitudes which tend to single out and exclude disabled persons and which distort roles and inter-personal relationships; (g) Auxiliary Aids and Services include: (1) qualified interpreters or other effective methods of delivering materials to individuals with hearing impairments; (2) qualified readers, taped tests, or other effective methods of delivering materials to individuals with visual impairments; (3) acquisition or modification of equipment or devices; and (4) other similar services and actions or all types of aids and services that facilitate the learning process of people with mental disability. (h) Reasonable Accommodation include 1) improvement of existing facilities used by employees in order to render these readily accessible to and usable by disabled persons; and 2) modification of work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, appropriate adjustments or modifications of examinations, training materials or company policies, rules and regulations, the provision of auxiliary aids and services, and other similar accommodations for disabled persons; (i) Sheltered Employment refers to the provision of productive work for disabled persons through workshops providing special facilities, incomeproducing projects or homework schemes with a view to giving them the opportunity to earn a living thus enabling them to acquire a working capacity required in open industry; (j) Auxiliary Social Services are the supportive activities in the delivery of social services to the marginalized sectors of society; (k) Marginalized Disabled Persons refer to disabled persons who lack access to rehabilitative services and opportunities to be able to participate fully in socioeconomic activities and who have no means of livelihood and whose incomes fall below the poverty threshold; chan robles virtual law library

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(l) Qualified Individual with a Disability shall mean an individual with a disability who, with or without reasonable accommodations, can perform the essential functions of the employment position that such individual holds or desires. However, consideration shall be given to the employer's judgment as to what functions of a job are essential, and if an employer has prepared a written description before advertising or interviewing applicants for the job, this description shall be considered evidence of the essential functions of the job; (m) Readily Achievable means a goal can be easily attained and carried out without much difficulty or expense. In determining whether an action is readily achievable, factors to be considered include — (1) the nature and cost of the action; (2) the overall financial resources of the facility or facilities involved in the action; the number of persons employed at such facility; the effect on expenses and resources, or the impact otherwise of such action upon the operation of the facility; (3) the overall financial resources of the covered entity with respect to the number of its employees; the number, type and location of its facilities; and (4) the type of operation or operations of the covered entity, including the composition, structure and functions of the work force of such entity; the geographic separateness, administrative or fiscal relationship of the facility or facilities in question to the covered entity. (n) Public Transportation means transportation by air, land and sea that provides the public with general or special service on a regular and continuing basis; (o) Covered Entity means an employer, employment agency, labor organization or jointlabor management committee; and (p) Commerce shall be taken to mean as travel, trade, traffic, commerce, transportation, or communication among the provinces or between any foreign country or any territory or possession and any province. Sec. 5. Equal Opportunity for Employment. — No disable person shall be denied access to opportunities for suitable employment. A

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qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied person. Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare and Development; Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged in social development shall be reserved for disabled persons. Sec. 6. Sheltered Employment — If suitable employment for disabled persons cannot be found through open employment as provided in the immediately preceding Section, the State shall endeavor to provide it by means of sheltered employment. In the placement of disabled persons in sheltered employment, it shall accord due regard to the individual qualities, vocational goals and inclinations to ensure a good working atmosphere and efficient production. Sec. 7. Apprenticeship. — Subject to the provisions of the Labor Code as amended, disabled persons shall be eligible as apprentices or learners: Provided, That their handicap is not as much as to effectively impede the performance of job operations in the particular occupation for which they are hired; Provided, further, That after the lapse of the period of apprenticeship, if found satisfactory in the job performance, they shall be eligible for employment. Sec. 8. Incentives for Employers. — (a) To encourage the active participation of the private sector in promoting the welfare of disabled persons and to ensure gainful employment for qualified disabled persons, adequate incentives shall be provided to private entities which employ disabled persons. (b) Private entities that employ disabled persons who meet the required skills or qualifications, either as regular employee, apprentice or learner, shall be entitled to an additional deduction, from their gross income, equivalent to twenty-five percent (25%) of the total amount paid as salaries and wages to disabled persons: Provided, however, That such entities present

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proof as certified by the Department of Labor and Employment that disabled persons are under their employ: Provided, further, That the disabled employee is accredited with the Department of Labor and Employment and the Department of Health as to his disability, skills and qualifications. (c) Private entities that improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons shall also be entitled to an additional deduction from their net taxable income, equivalent to fifty percent (50%) of the direct costs of the improvements or modifications. This Section, however, does not apply to improvements or modifications of facilities required under Batas Pambansa Bilang 344. A. Defined – 4(a), (b), (c), (d), 1-8, RA 7277 (a) Disabled persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being; (b) Impairment is any loss, diminution or aberration of psychological, physiological, or anatomical structure or function; (c) Disability shall mean 1) a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individual; 2) a record of such an impairment; or 3) being regarded as having such an impairment; (d) Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability, that limits or prevents the function or activity, that is considered normal given the age and sex of the individual.

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opportunities for suitable employment. A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied person. Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare and Development; Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged in social development shall be reserved for disabled persons. Regular Worker Bernardo v NLRC [1999] The Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given the same terms and conditions of employment as a qualified able-bodied person. This necessarily removes them from the ambit of Art. 80; since the Magna Carta accords them the rights of qualified able-bodied persons, they are thus covered by Art. 280. The noble objectives of Magna Carta are not based merely on charity or accommodation but on justice and equal treatment of qualified persons, disabled or not. In this case, the handicap of the deaf-mutes is not a hindrance to their work. Section 5: Conditions Of Employment – Hours Of Work Statutory Reference Book III, Rules I, IA, II, Omnibus Rules Implementing the Labor Code RULE I: Hours of Work SECTION 1. General statement on coverage. — The provisions of this Rule shall apply to all employees in all establishments and undertakings, whether operated for profit or not, except to those specifically exempted under Section 2 hereof. SECTION 2. Exemption. — The provisions of this Rule shall not apply to the following persons

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if they qualify for exemption under the conditions set forth herein: (a) Government employees whether employed by the National Government or any of its political subdivision, including those employed in government-owned and/or controlled corporations; (b) Managerial employees, if they meet all of the following conditions: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof. (2) They customarily and regularly direct the work of two or more employees therein. (3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight. (c) Officers or members of a managerial staff if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of their employer; (2) Customarily and regularly exercise discretion and independent judgment; and (3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute, under general supervision, special assignments and tasks; and (4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above. (d) Domestic servants and persons in the personal service of another if they perform such services in the employer's home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or safety

B. Allowed Employment – 5, RA 7277 Sec. 5. Equal Opportunity for Employment. — No disable person shall be denied access to

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of the employer as well as the members of his employer's household. (e) Workers who are paid by results, including those who are paid on piece-work, "takay," "pakiao" or task basis, and other non-time work if their output rates are in accordance with the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or where such rates have been fixed by the Secretary of Labor and Employment in accordance with the aforesaid Section. (f) Non-agricultural field personnel if they regularly perform their duties away from the principal or branch office or place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. SECTION 3. Hours worked. — The following shall be considered as compensable hours worked: (a) All time during which an employee is required to be on duty or to be at the employer's premises or to be at a prescribed work place; and (b) All time during which an employee is suffered or permitted to work. SECTION 4. Principles in determining hours worked. — The following general principles shall govern in determining whether the time spent by an employee is considered hours worked for purposes of this Rule: (a) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. (b) An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his work place. (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

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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 working 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. SECTION 5. Waiting time. — (a) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait. (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. SECTION 6. Lectures, meetings, training programs. — Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all of the following conditions are met: (a) Attendance is outside of the employee's regular working hours; (b) Attendance is in fact voluntary; and (c) The employee does not perform any productive work during such attendance. SECTION 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee: (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;

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(c) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and (d) Where the work is necessary to prevent serious loss of perishable goods. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. SECTION 8. Overtime pay. — Any employee covered by this Rule who is permitted or required to work beyond eight (8) hours on ordinary working days shall be paid an additional compensation for the overtime work in the amount equivalent to his regular wage plus at least twenty-five percent (25%) thereof. SECTION 9. Premium and overtime pay for holiday and rest day work. — (a) Except employees referred to under Section 2 of this Rule, an employee who is permitted or suffered to work on special holidays or on his designated rest days not falling on regular holidays, shall be paid with an additional compensation as premium pay of not less than thirty percent (30%) of his regular wage. For work performed in excess of eight (8) hours on special holidays and rest days not falling on regular holidays, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on a special holiday or rest day plus at least thirty percent (30%) thereof. (b) Employees of public utility enterprises as well as those employed in non-profit institutions and organizations shall be entitled to the premium and overtime pay provided herein, unless they are specifically excluded from the coverage of this Rule as provided in Section 2 hereof. (c) The payment of additional compensation for work performed on regular holidays shall be governed by Rule IV, Book Three, of these Rules. SECTION 10. Compulsory overtime work. — In any of the following cases, an employer may require any of his employees to work beyond eight (8) hours a day, provided that the

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employee required to render overtime work is paid the additional compensation required by these regulations: (a) When the country is at war or when any other national or local emergency has been declared by Congress or the Chief Executive; (b) When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due to actual or impending emergency in the locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster or calamities; (c) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other causes of similar nature; (d) When the work is necessary to prevent loss or damage to perishable goods; (e) When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer; or (f) When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. In cases not falling within any of these enumerated in this Section, no employee may be made to work beyond eight hours a day against his will. RULE I-A : Hours of Work of Hospital and Clinic Personnel SECTION 1. General statement on coverage. — This Rule shall apply to: (a) All hospitals and clinics, including those with a bed capacity of less than one hundred (100) which are situated in cities or municipalities with a population of one million or more; and (b) All hospitals and clinics with a bed capacity of at least one hundred (100), irrespective of the size of the population of the city or municipality where they may be situated. SECTION 2. Hospitals or clinics within the meaning of this Rule. — The terms "hospitals" and "clinics" as used in this Rule shall mean a place devoted primarily to the maintenance and

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operation of facilities for the diagnosis, treatment and care of individuals suffering from illness, disease, injury, or deformity, or in need of obstetrical or other medical and nursing care. Either term shall also be construed as any institution, building, or place where there are installed beds, or cribs, or bassinets for twentyfour (24) hours use or longer by patients in the treatment of disease, injuries, deformities, or abnormal physical and mental states, maternity cases or sanitorial care; or infirmaries, nurseries, dispensaries, and such other similar names by which they may be designated. SECTION 3. Determination of bed capacity and population. — (a) For purposes of determining the applicability of this Rule, the actual bed capacity of the hospital or clinic at the time of such determination shall be considered, regardless of the actual or bed occupancy. The bed capacity of hospital or clinic as determined by the Bureau of Medical Services pursuant to Republic Act No. 4226, otherwise known as the Hospital Licensure Act, shall prima facie be considered as the actual bed capacity of such hospital or clinic. (b) The size of the population of the city or municipality shall be determined from the latest official census issued by the Bureau of the Census and Statistics. SECTION 4. Personnel covered by this Rule. — This Rule applies to all persons employed by any private or public hospital or clinic mentioned in Section 1 hereof, and shall include, but not limited to, resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians paramedical technicians, psychologists, midwives, and attendants. SECTION 5. Regular working hours. — The regular working hours of any person covered by this Rule shall not be more than eight (8) hours in any one day nor more than forty (40) hours in any one week. For purposes of this Rule a "day" shall mean a work day of twenty-four (24) consecutive hours beginning at the same time each calendar year.

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A "week" shall mean the work of 168 consecutive hours, or seven consecutive 24-hour work days, beginning at the same hour and on the same calendar day each calendar week. SECTION 6. Regular working days. — The regular working days of covered employees shall not be more than five days in a work week. The work week may begin at any hour and on any day, including Saturday or Sunday, designated by the employer. Employers are not precluded from changing the time at which the work day or work week begins, provided that the change is not intended to evade the requirements of this Rule. SECTION 7. Overtime work. — Where the exigencies of the service so require as determined by the employer, any employee covered by this Rule may be scheduled to work for more than five (5) days or forty (40) hours a week, provided that the employee is paid for the overtime work an additional compensation equivalent to his regular wage plus at least thirty percent (30%) thereof, subject to the provisions of this Book on the payment of additional compensation for work performed on special and regular holidays and on rest days. SECTION 8. Hours worked. — In determining the compensable hours of work of hospital and clinic personnel covered by this Rule, the pertinent provisions of Rule 1 of this Book shall apply. SECTION 9. Additional compensation. — Hospital and clinic personnel covered by this Rule, with the exception of those employed by the Government, shall be entitled to an additional compensation for work performed on regular and special holidays and rest days as provided in this Book. Such employees shall also be entitled to overtime pay for services rendered in excess of forty hours a week, or in excess of eight hours a day, whichever will yield the higher additional compensation to the employee in the work week. SECTION 10. Relation to Rule I. — All provisions of Rule I of this Book which are not

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inconsistent with this Rule shall be deemed applicable to hospital and clinic personnel. RULE II: Night Shift Differential SECTION 1. Coverage. — This Rule shall apply to all employees except: (a) Those of the government and any of its political subdivisions, including governmentowned and/or controlled corporations; (b) Those of retail and service establishments regularly employing not more than five (5) workers; (c) Domestic helpers and persons in the personal service of another; (d) Managerial employees as defined in Book Three of this Code; (e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. SECTION 2. Night shift differential. — An employee shall be paid night shift differential of no less than ten per cent (10%) of his regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the morning. SECTION 3. Additional compensation. — Where an employee is permitted or suffered to work on the period covered after his work schedule, he shall be entitled to his regular wage plus at least twenty-five per cent (25%) and an additional amount of no less than ten per cent (10%) of such overtime rate for each hour or work performed between 10 p.m. to 6 a.m. SECTION 4. Additional compensation on scheduled rest day/special holiday. — An employee who is required or permitted to work on the period covered during rest days and/or special holidays not falling on regular holidays, shall be paid a compensation equivalent to his regular wage plus at least thirty (30%) per cent and an additional amount of not less than ten (10%) per cent of such premium pay rate for each hour of work performed.

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SECTION 5. Additional compensation on regular holidays. — For work on the period covered during regular holidays, an employee shall be entitled to his regular wage during these days plus an additional compensation of no less than ten (10%) per cent of such premium rate for each hour of work performed. SECTION 6. Relation to agreements. — Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer practice or policy.

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"Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Art. 276. Government employees. The terms and conditions of employment of all government employees, including employees of governmentowned and controlled corporations, shall be governed by the Civil Service Law, rules and regulations. Their salaries shall be standardized by the National Assembly as provided for in the New Constitution. However, there shall be no reduction of existing wages, benefits and other terms and conditions of employment being enjoyed by them at the time of the adoption of this Code. Rationale Exemption – Managerial Employees Penaranda v Baganga Plywood Corp [2006] Asia Pacific Christening Inc v Farolan [2004] To be considered a managerial employee, the following conditions must be met: (1) primary duty consists of mngmnt of the establishment in which they are employed or a dept or a subdivision thereof; (2) customarily and regularly direct the work of 2 or more employees therein; (3) they have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight. Treatment of managerial employees is distinguished from that of rank and file personnel insofar as the application of the doctrine of loss of trust and confidence is concerned. Natl Waterworks and Sewerage Authority v NAWASA [1965] The philosophy behind the exemption of managerial employees from the 8-Hour Labor Law is that such workers are not usually employed for every hour of work but their compensation is determined considering their

5.01 HOURS REGULATION Rationale and Enforcement Manila Terminal Co Inc v CIR [1952] The eight-hour labor law was designed not only to safeguard the health and welfare of the employee, but in a way to minimize underemployment by forcing employers, in cases where more than 8-hour operation is necessary, to utilize different shifts of laborers or employees working only for eight hours each. 5.02 COVERAGE Art. 82. Coverage. The provisions of this Title (Working Conditions and Rest Periods) shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff.

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special training, experience or knowledge which requires the exercise of discretion and independent judgment, or perform work related to management policies or general business operations along specialized or technical lines. For these workers, it is not feasible to provide a fixed hourly rate or pay or maximum hours of labor. Samson v NLRC [2000] Although his position is that of a District Sales Manager, his job description did not meet the requisite conditions for him to be considered a managerial employee (1) Primary duty of management; (2) Regularly direct work of 2 or more; (3) Authority to hire or fire other employees, or their suggestions are given much weight. Tests – Field Personnel Union of Filipro Employees v Vivar [1992] [Filipro, now Nestle seeks the exclusion of salesmen, sales reps, truck driver, merchandisers and med reps from award of holiday pay.] Controversy centers on interpretation of the clause “whose actual hours of work in the field cannot be determined with reasonable certainty.” In deciding whether or not an employee’s actual working hours in the field can be determined with reasonable certainty, query must be made as to whether or not such employee’s time and performance is constantly supervised by the employer. Salazar v NLRC [1996] “Actual hours of work in the field..” is to be read in conjunction with Rule IV, Book III of the Implementing Rules. Therefore field personnel are employees whose time and performance is unsupervised by the employer. In this case, although petitioner cannot be strictly classified as a managerial employee, he is still not a field personnel, as he falls under “officers or members of a managerial staff.” Mercidar Fishing Corp v NLRC [1998]

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During the entire course of their fishing voyage, fishermen employed by the petitioner have no choice but to remain on board its vessel. Although they perform non-agricultural work away from the petitioner’s business offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of the petitioner through the vessel’s patron or master. Autobus Transport Systems Inc v Bautista [2005] If required to be at specific places at specific times, employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee. The definition is not merely concerned with the location but also the fact that employee’s time and performance is unsupervised by the employer. It is of judicial notice that along the routes that are plied by bus companies, there are its inspectors assigned at strategic places. There is also the once-a-week car barn or shop day. In each and every depot, there is a dispatcher. Rationale Exemption – Piece Worker Red V Coconut Products Ltd v CIR [1966] Although the Eight-Hour Labor Law provides that it does not cover those workers who prefer to be paid on piece-work basis, nothing in said law precluded an agreement for the payment of overtime compensation to piece workers. And in agreeing to the provision for payment of shift differential, as well as in actually paying to them such differentials, though not in full, the company freely adhered to an application and implementation of the law. They were excluded because such workers are paid depending upon the work they do “irrespective of the amount of time employed” in doing said work. 5.03 NORMAL HOURS OF WORK Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight (8) hours a day.

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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. 5.04 HOURS WORKED 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. Idle Time National Development Co v CIR [1962] Idle time spent resting and during which an employee may leave the workplace is not counted as working time only where the work is broken or not continuous. Luzon Stevedoring Co v Luzon Marine Department Union [1957] A laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be counted, it being enough that he “ceases to work”, and may rest completely and leave his spot where he actually stays while working, to go somewhere else, whether within or outside the premises of said factory, shop or boat. Continuous Work

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State Marine Corp v Cebu Seamen’s Assoc [1963] The provision of Sec 1 of CA 444 which states that “when the work is not continuous, the time during which the laborer is not working and can leave his working place and can rest completely shall not be counted” finds no application in this case, where the laborer’s work is continuous. During the time that he is not working, he cannot leave and completely rest owing to the place and nature of his work. Waiting Time Arica v NLRC [1989] [Workers allege that preliminary activities should be considered as waiting time and be compensable as working time since these are necessary for the company’s benefit: roll call, getting indiv assignments; getting work matls, etc.] The thirty minute assembly is a deeplyrooted routinary practice of the employees, and the proceedings attendant thereto are not infected with complexities as to deprive the workers the time to attend to other personal pursuits. Travel Time Rada v NLRC [1992] It was Rada’s job to pick up and drop off employees of the project at certain specified points along EDSA. Hence, the time he spent in doing this work should be included in determining the number of hours he had worked since this arrangement was for the employer’s benefit. He is then entitled to the overtime pay claimed. Ordinarily, the travel time of employees from house to place of work and vice versa is not included as part of the time worked. Time of work starts when the employee reports at the place of work and ends when he leaves the same place. Entry Time Cards Prangan v NLRC [1998] As petitioner’s employer, the private respondent has unlimited access to all relevant

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documents and records on the hours of work of the petitioner. Yet, no employment contract payroll notice of assignment or posting, cash voucher or any other convincing evidence which may attest to the actual hours of work was presented. Only the daily time record was presented, which showed that employee started work at 10pm and left his post at exactly 2am. Such unvarying recording is improbable and contrary to human experience. Nicario v NLRC [1998] In previously evaluating evidentiary value of daily time records, especially those which show uniform entries with regard to the hours of work rendered by an employee has ruled that “such unvarying recording of a daily time record is improbable and contrary to human experience. It is impossible for an employee to arrive at the workplace and leave at exactly the same time, day in and day out. The uniformity and regularity of the entries are badges of untruthfulness and as such indices of dubiety.” 5.4 MEAL PERIOD Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. Meal Time – Free Time Pan-Am Airways v Pan-Am Employees Assoc [1961] Where during the so-called meal period, the laborers are required to stand by for emergency work, or where said meals is not one of complete rest, such period is considered overtime. PAL v NLRC [1999] [He was a flight surgeon assigned at PAL Medical Clinic from 4pm to 12mn. He had 30min meal break so dinner at his own home which was a 5min drive away] The eight-hour work period does not include the meal break. Nowhere in the law may

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it be inferred that employees must take their meals within the company premises. Employees are not prohibited from going out of the premises as long as they return to their posts on time. Private respondent’s act of going home to take his dinner does not constitute abandonment. 5.06 OVERTIME PROHIBITION WORK AND OFFSETTING

Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter. Art. 89. Emergency overtime work. Any employee may be required by the employer to perform overtime work in any of the following cases: a. When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive; b. When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity; c. When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; When the work is necessary to prevent loss or damage to perishable goods; and

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d. Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. e. Any employee required to render overtime work under this Article shall be paid the additional compensation required in this Chapter. Art. 90. Computation of additional compensation. For purposes of computing overtime and other additional remuneration as required by this Chapter, the "regular wage" of an employee shall include the cash wage only, without deduction on account of facilities provided by the employer. Definition and Rationale – Overtime Pay PNB v PNB Employees Assoc [1982] Verily, there can be no other reason that he is made to work longer than what is commensurate with his agreed compensation for the statutorily fixed or voluntarily agreed hours of labor he is supposed to do. It is thus the addtl work, labor or service employed and the adverse effects of his longer stay in his place of work that justify and is the real reason for the extra compensation that is called overtime pay. Caltex Regular Emp v Caltex Phils Inc [1995] It is not enough that the hours worked fall on disagreeable or inconvenient hours. In order that work may be considered as overtime work, the hours worked must be in excess of and in addition to the 8 hours worked during the prescribed daily period, or the forty hours worked during the regular work week Monday through Friday. No Computation Formula Basic Contract Manila Terminal Co Inc v CIR [1952] A contract of employment which provides for a weekly wage for a specified number of hours, sufficient to cover both the statutory minimum wage and overtime compensation, if computed on the basis of the statutory minimum, and which makes no provision for a fixed hourly rate or that the weekly wage includes overtime

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compensation, does not meet the reqts of the Act. Built-in Compensation Engineering Equipment v MOLE [1985] Written contracts with a built-in overtime pay in the ten-hour working day and that their basic monthly pay was adjusted to reflect the higher amount covering the guaranteed two-hour extra time, whether worked or unworked, are valid. Proof of Work Lagatic v NLRC [1998] Entitlement to overtime pay must first be established by proof that said overtime work was actually performed, before an employee may avail of said benefit. Villar v NLRC [2000] As a general rule, one who pleads payment has the burden of proving it. Even where the plaintiff must allege non-payment, the rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged with payment. Employer Obligation SSS v CA [2000] 5.07 NIGHT WORK Art. 86. Night shift differential. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. Rationale Prohibition Shell Oil Co of the Phil Ltd v National Labor Union [1948]

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Nightwork cannot be regarded as desirable, either from the point of view of the employer or of the wage earner. It is uneconomical unless overhead costs are unusually heavy. Frequently, the scale of wages is higher as an inducement to employees to accept employment on the night shift, and the rate of production is generally lower. The case against nightwork rests upon several grounds. First, there are the remotely injurious effects of the permanent nightwork manifested in the later years of the worker’s life. Of more immediate importance to the average worker is the disarrangement of his social life. From an economic point of view, it is to be discouraged because of its adverse effect upon efficiency and output. Section 6: Conditions Of Employment – Weekly Rest Periods Statutory Reference Book III, Rule III, Omnibus Rules Implementing the Labor Code RULE III: Weekly Rest Periods SECTION 1. General statement on coverage. — This Rule shall apply to all employers whether operating for profit or not, including public utilities operated by private persons. SECTION 2. Business on Sundays/Holidays. — All establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits as provided in this Rule. SECTION 3. Weekly rest day. — Every employer shall give his employees a rest period of not less than twenty-four (24) consecutive hours after every six consecutive normal work days. SECTION 4. Preference of employee. — The preference of the employee as to his weekly day of rest shall be respected by the employer if the same is based on religious grounds. The employee shall make known his preference to

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the employer in writing at least seven (7) days before the desired effectivity of the initial rest day so preferred. Where, however, the choice of the employee as to his rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operations of the undertaking and the employer cannot normally be expected to resort to other remedial measures, the employer may so schedule the weekly rest day of his choice for at least two (2) days in a month. SECTION 5. Schedule of rest day. — (a) Where the weekly rest is given to all employees simultaneously, the employer shall make known such rest period by means of a written notice posted conspicuously in the work place at least one week before it becomes effective. (b) Where the rest period is not granted to all employees simultaneously and collectively, the employer shall make known to the employees their respective schedules of weekly rest through written notices posted conspicuously in the work place at least one week before they become effective. SECTION 6. When work on rest day authorized. — An employer may require any of his employees to work on his scheduled rest day for the duration of the following emergencies and exceptional conditions: (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 or property, or in cases of force majeure or imminent danger to public safety; (b) In case of urgent work to be performed on machineries, equipment or installations 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 serious loss of perishable goods; (e) Where the nature of the work is such that the employees have to work continuously for seven (7) days in a week or more, as in the case of the

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crew members of a vessel to complete a voyage and in other similar cases; and (f) When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. No employee shall be required against his will to work on his scheduled rest day except under circumstances provided in this Section: Provided, However, that where an employee volunteers to work on his rest day under other circumstances, he shall express such desire in writing, subject to the provisions of Section 7 hereof regarding additional compensation. SECTION 7. Compensation on rest day/Sunday/holiday. — (a) Except those employees referred to under Section 2, Rule I, Book Three, an employee who is made or permitted to work on his scheduled rest day shall be paid with an additional compensation of at least 30% of his regular wage. An employee shall be entitled to such additional compensation for work performed on a Sunday only when it is his established rest day. (b) Where the nature of the work of the employee is such that he has no regular work days and no regular rest days can be scheduled, he shall be paid an additional compensation of at least 30% of his regular wage for work performed on Sundays and holidays. (c) Work performed on any special holiday shall be paid with an additional compensation of at least 30% of the regular wage of the employees. Where such holiday work falls on the employee's scheduled rest day, he shall be entitled to additional compensation of at least 50% of his regular wage. (d) The payment of additional compensation for work performed on regular holiday shall be governed by Rule IV, Book Three, of these regulations. (e) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Section, the employer shall pay such higher rate.

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SECTION 8. Paid-off days. — Nothing in this Rule shall justify an employer in reducing the compensation of his employees for the unworked Sundays, holidays, or other rest days which are considered paid-off days or holidays by agreement or practice subsisting upon the effectivity of the Code. SECTION 9. Relation to agreements. — Nothing herein shall prevent the employer and his employees or their representatives in entering into any agreement with terms more favorable to the employees than those provided herein, or be used to diminish any benefit granted to the employees under existing laws, agreements, and voluntary employer practices. 6.01 RATIONALE Mla Electric Co v Public Utilities Emp Assoc [1947] It would be unfair for the law to compel public utilities to pay addtl compensation to laborers who they have to compel to work during Sundays and legal holidays, in order to perform a continuous service to the public. To require them would be tantamount to penalize them for performing public service. Perfecto [dissent]: It is a fact that Sundays and legal holidays are set aside by law as days of rest. The life, existence and happiness of a person do not depend only on the satisfaction of his physical needs. There are moral, intellectual and spiritual needs as imperative as the physical ones. 6.02 COVERAGE Art. 82. Coverage. The provisions of this Title (Working Conditions and Rest Periods) shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.

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As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Art. 91. Right to weekly rest day. a. It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than twentyfour (24) consecutive hours after every six (6) consecutive normal work days. 6.3 CHEDULING OF REST DAY Art. 91. Right to weekly rest day. b. The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds.

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cannot ordinarily be expected to resort to other measures; d. To prevent loss or damage to perishable goods; 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 e. Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment. Section 7: Conditions Of Employment – Holidays Statutory Reference EO 203 PROVIDING A LIST OF REGULAR HOLIDAYS AND SPECIAL DAYS TO BE OBSERVED THROUGHOUT THE PHILIPPINES AND FOR OTHER PURPOSES [1987] Sec. 1. Unless otherwise modified by law, order or proclamation, the following regular holidays and special days shall be observed in this country: A. Regular Holidays New Year's Day January Maundy Thursday Movable date Good Friday Movable date Araw ng Kagitingan (Bataan and Corregidor Day) April 9 Labor Day May 1 Independence Day June 12 National Heroes Day Last Sunday of August Bonifacio Day November 30 Christmas Day December 25 Rizal Day December 30 B. Nationwide Special Days All Saints Day November 1 Last Day of the Year December 31 Sec. 2. Henceforth, the terms "legal or regular holiday" and "special holiday", as used in laws, orders, rules and regulations or other issuances shall now be referred to as "regular holiday" and "special day", respectively.

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Book III, Rule IV, Omnibus Rules RULE IV: Holidays with Pay SECTION 1. Coverage. — This rule shall apply to all employees except: (a) Those of the government and any of the political subdivision, including governmentowned and controlled corporation; (b) Those of retail and service establishments regularly employing less than ten (10) workers; (c) Domestic helpers and persons in the personal service of another; (d) Managerial employees as defined in Book Three of the Code; (e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. SECTION 2. Status of employees paid by the month. — Employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be paid for all days in the month whether worked or not. For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve. SECTION 3. Holiday Pay. — Every employer shall pay his employees their regular daily wage for any worked regular holidays. As used in the rule, the term 'regular holiday' shall exclusively refer to: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the last Sunday of August, the thirtieth of November, the twenty-fifth and thirtieth of December. Nationwide special days shall include the first of November and the last day of December. As used in this Rule legal or regular holiday and special holiday shall now be referred to as 'regular holiday' and 'special day', respectively. SECTION 4. Compensation for holiday work. — Any employee who is permitted or suffered to

6.04 COMPULSORY WORK AND COMPENSATION 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

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work on any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his regular daily wage. If the holiday work falls on the scheduled rest day of the employee, he shall be entitled to an additional premium pay of at least 30% of his regular holiday rate of 200% based on his regular wage rate. SECTION 5. Overtime pay for holiday work. — For work performed in excess of eight hours on a regular holiday, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on such holiday work plus at least 30% thereof. Where the regular holiday work exceeding eight hours falls on the scheduled rest day of the employee, he shall be paid an additional compensation for the overtime work equivalent to his regular holiday-rest day for the first 8 hours plus 30% thereof. The regular holiday rest day rate of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof. SECTION 6. Absences. — (a) All covered employees shall be entitled to the benefit provided herein when they are on leave of absence with pay. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if he has not worked on such regular holiday. (b) Employees shall grant the same percentage of the holiday pay as the benefit granted by competent authority in the form of employee's compensation or social security payment, whichever is higher, if they are not reporting for work while on such benefits. (c) Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day. SECTION 7. Temporary or periodic shutdown and temporary cessation of work.

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— (a) In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with this Rule. (b) The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor and Employment may not be paid by the employer. SECTION 8. Holiday pay of certain employees. — (a) Private school teachers, including faculty members of colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacation; (b) Where a covered employee, is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate. (c) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work. (d) Workers who have no regular working days shall be entitled to the benefits provided in this Rule. SECTION 9. Regular holiday falling on rest days or Sundays. — (a) A regular holiday falling on the employee's rest day shall be compensated accordingly. (b) Where a regular holiday falls on a Sunday, the following day shall be considered a special holiday for purposes of the Labor Code, unless said day is also a regular holiday. SECTION 10. Successive regular holidays. — Where there are two (2) successive regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for both holidays if he absents himself from work on the day

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immediately preceding the first holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay on the second holiday. SECTION 11. Relation to agreements. — Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked holidays as provided in existing individual or collective agreement or employer practice or policy. 7.02 COVERAGE Art. 94. Right to holiday pay. a. Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers. Coverage and Purpose Mantrade/FMC Division Employees v Bacungan [1986] The Sec of Labor cannot exempt Mantrade from paying holiday pay just because its employees are uniformly paid by the month irrespective of the number of working days therein. The Labor Code only exempts retail and service establishments regularly employing less than 10 workers. San Miguel Corp v CA [2002] [Non-Muslim employees granted Muslim holiday pay] Wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker’s faith or religion. Asian Transunion Corp v CA [2004] 7.02 HOLIDAYS PD 1083: Art. 169. Official Muslim Holidays. – The following are hereby recognized as legal Muslim holidays: (a) ‘Amun Jadid (New Year), which falls on the first day of the first lunar month of Muharram;

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(b) Mauild-um-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal; (c) Lailatul Isra Wal M’iraj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of the seventh lunar month of Rajab; (d) Id-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of fasting season; (e) ‘Id-ul-Adha (Hari Raya Haji), which falls on the tenth day of the twelfth lunar month of Dhul-Hija. 7.03 HOLIDAY PAY Art. 94. Right to holiday pay. a. Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; b. The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and c. As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election. Faculty Private School Jose Rizal College v NLRC [1987] [School faculty who are paid per lecture hour] They are entitled to unworked holiday pay for special holidays or when classes are called off or shortened but not for regular holidays. The declared purpose of the holiday pay which is the prevention of diminution of the monthly income of employees on account of work interruptions is defeated when a regular class day is cancelled on account of a special public holiday and class hours are held on another working day to make up for lost time in the school calendar. Although forced to take a rest,

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he does not earn what he should earn on that day. Divisor as Factor Union of Filipro Employees v Vivar [1991] It must be stressed that the daily rate, assuming there are no intervening salary increases, is a constant figure for the purpose of computing overtime and night differential pay and commutation of sick and vacation leave credits. Necessarily, the daily rate should also be the same basis for computing the 10 unpaid holidays. Transasia Phils Employer Assoc v NLRC [1999] The adjusted divisor of 287 days should only be used for computations which would be advantageous to the employees. The Court notes that if the divisor is increased to 287 days, the resulting daily rate for the purposes of overtime pay, holiday pay and conversions of accumulated leaves would be diminished. This would then be violative of proscription on the non-diminution of benfits under Sec 100 of LC. ON the other hand, the use of divsor of 287 days would be to the advantage of petitioners if it is used for purposes of computing for deductions due the employee’s absence. Computation Agga v NLRC [1998] Night shift differential and addtl remuneration for overtime, rest day, Sunday and holiday work shall be computed on the basis of the employee’s regular wage. In like fashion, the 1991 POEA Rules merely require employers to guarantee payment of wages and overtime pay. See art. 93. Sunday Wellington Investment Inc v Trajano [1995] There is no provision of law requiring any employer to make such adjustments in the monthly salary rate set by him to take account of legal holidays falling on Sundays in a given year, or contrary to the legal provisions bearing on the

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point, otherwise to reckon a year at more than 365 days. What the law requires of employers opting to pay by the month is to assure that “the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by 12” and to pay that salary “for all days in the month whether worked or not” and “irrespective of the number of working days therein.” Proof of Payment Buiding Care Corp v NLRC [1998] If it had really paid the employee the holiday pay, it could have easily presented its payrolls, which constitute the best proof of payment. To prove payment of salary differentials, it could have presented proof but did not. It failed to comply with the mandate of the law; the burden of proof in this regard lies with the employer, not the employee. Section 8: Conditions Of Employment – Leaves A. SERVICE INCENTIVE LEAVE Statutory Reference Book III, Rule V, Omnibus Rules RULE V: Service Incentive Leave SECTION 1. Coverage. — This rule shall apply to all employees except: (a) Those of the government and any of its political subdivisions, including governmentowned and controlled corporations; (b) Domestic helpers and persons in the personal service of another; (c) Managerial employees as defined in Book Three of this Code; (d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof; (e) Those who are already enjoying the benefit herein provided;

LABOR MIDTERMS MAGIC NOTES!
(f) Those enjoying vacation leave with pay of at least five days; and (g) Those employed in establishments regularly employing less than ten employees. SECTION 2. Right to service incentive leave. — Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. SECTION 3. Definition of certain terms. — The term "at least one-year service" shall mean service for not less than 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year. SECTION 4. Accrual of benefit. — Entitlement to the benefit provided in this Rule shall start December 16, 1975, the date the amendatory provision of the Code took effect. SECTION 5. Treatment of benefit. — The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year. SECTION 6. Relation to agreements. — Nothing in the Rule shall justify an employer from withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer's practices or policies. 8.01 COVERAGE Art. 95. Right to service incentive leave. a. Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. b. This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at least five days and those employed in establishments

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regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment. Makati Haberdashery Inc V NLRC [1989] While they are entitle to Minimum Wage, Cola, and 13th month pay, they are not entitled to service incentive leave pay because as piece rate workers being paid at a fixed amount for performing work irrespective f time consumed in the performance thereof, they fall under one of the exceptions stated in Sec 1(d) Rule V, Implementing Regulations, Book III LC. For the same reason, they cannot also claim holiday pay. 8.2 ENTITLEMENT AND ARBITRATION Art. 95. Right to service incentive leave. a. Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. b. The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any court or administrative action. 8.03 COMPUTATION AND LIABILITY Sentinel Security Agency v NLRC [1998] The Philam Life Insurance Co did not illegally dismiss the complainants. Thus, it should not be held liable for separation pay and backwages. But even so, it is jointly and severally liable with the Agency for the complainant’s service incentive leave pay. Auto Bus Transport Systems v Bautista [2005] B. PATERNITY LEAVE RA 8187 – Paternity Leave Act of 1996 SECTION 1. Short Title. - This Act shall be known as the "Paternity Leave Act of 1996". SECTION 2. Notwithstanding any law, rules and regulations to the contrary, every married male employee in the private and public sectors shall be entitled to a paternity leave of seven (7) days

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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. For purposes, of this Act, delivery shall include childbirth or any miscarriage. SECTION 3. Definition of Term. - For purposes of this Act, Paternity Leave refers to the benefits granted to a married male employee allowing him not to report for work for seven (7) days but continues to earn the compensation therefor, on the condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly-born child. SECTION 4. The Secretary of Labor and Employment, the Chairman of the Civil Service Commission and the Secretary of Health shall, within thirty (30) days from the effectivity of this Act, issue such rules and regulations necessary for the proper implementation of the provisions hereof. SECTION 5. Any person, corporation, trust, firm, partnership, association or entity found violating this Act or the rules and regulations promulgated thereunder shall be punished by a fine not exceeding Twenty-five thousand pesos (P25,000) or imprisonment of not less than thirty (30)days nor more than six (6) months. If the violation is committed by a corporation, trust or firm, partnership, association or any other entity, the penalty of imprisonment shall be imposed on the entity's responsible officers, including, but not limited to, the president, vicepresident, chief executive officer, general manager, managing director or partner directly responsible therefor. C. MATERNITY LEAVE RA 8282, Sec 14A

LABOR MIDTERMS MAGIC NOTES!
SEC. 14. Sickness Benefit. - (a) A member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of sickness or injury and is confined therefor for more than three (3) days in a hospital or elsewhere with the approval of the SSS, shall, for each day of compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is unemployed or self-employed, a daily sickness benefit equivalent to ninety percent (90%) of his average daily salary credit, subject to the following conditions: "(1) In no case shall the daily sickness benefit be paid longer than one hundred twenty (120) days in one (1) calendar year, nor shall any unused portion of the one hundred twenty (120) days of sickness benefit granted under this section be carried forward and added to the total number of compensable days allowable in the subsequent year; "(2) The daily sickness benefit shall not be paid for more than two hundred forty (240) days on account of the same confinement; and "(3) The employee member shall notify his employer of the fact of his sickness or injury within five (5) calendar days after the start of his confinement unless such confinement is in a hospital or the employee became sick or was injured while working or within the premises of the employer in which case, notification to the employer is necessary: Provided, That if the member is unemployed or self-employed, he shall directly notify the SSS of his confinement within five (5) calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary: Provided, further, That in cases where notification is necessary, the confinement shall be deemed to have started not earlier than the fifth day immediately preceding the date of notification. D. VACATION AND SICK LEAVE RA 8972 – An Act Providing for Benefits to Solo Parents, Sec 2, 6, 8

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Sec. 2. Declaration of Policy. - It is the policy of the State to promote the family as the foundation of the nation, strengthen its solidarity and ensure its total development. Towards this end, it shall develop a comprehensive program of services for solo parents and their children to be carried out by the Department of Social Welfare and Development (DSWD), the Department of Health (DOH), the Department of Education, Culture and Sports (DECS), the Department of the Interior and Local Government (DILG), the Commission on Higher Education (CHED), the Technical Education and Skills Development Authority (TESDA), the National Housing Authority (NHA), the Department of Labor and Employment (DOLE) and other related government and non-government agencies. Sec. 6. Flexible Work Schedule. - The employer shall provide for a flexible working schedule for solo parents: Provided, That the same shall not affect individual and company productivity: Provided, further, That any employer may request exemption from the above requirements from the DOLE on certain meritorious grounds. Sec. 8. Parental Leave. - In addition to leave privileges under existing laws, parental leave of not more than seven (7) working days every year shall be granted to any solo parent employee who has rendered service of at least one (1) year.

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