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Quick Reviewer for Labor Law

Labor Law Review (Prelims)

PRESIDENTIAL DECREE NO. 442, AS AMENDED country in accordance with rules and
regulations prescribed by the Secretary of
LABOR AND SOCIAL LAWS TO AFFORD Art. 26. Travel agencies prohibited to recruit.
EMPLOYMENT AND HUMAN RESOURCES Travel agencies and sales agencies of airline
DEVELOPMENT AND INSURE INDUSTRIAL companies are prohibited from engaging in
PEACE BASED ON SOCIAL JUSTICE the business of recruitment and placement
of workers for overseas employment
Art. 4. Construction in favor of labor. All doubts in the whether for profit or not.
implementation and interpretation of the provisions of
this Code, including its implementing rules and Art. 27. Citizenship requirement.
regulations, shall be resolved in favor of labor.
Only Filipino citizens or corporations,
Art. 13. (2) "Recruitment and placement" partnerships or entities at least seventy-five
percent (75%) of the authorized and voting
Refers to any act of canvassing, enlisting, capital stock of which is owned and
contracting, transporting, utilizing, hiring or controlled by Filipino citizens shall be
procuring workers, and includes referrals, permitted to participate in the recruitment
contract services, promising or advertising and placement of workers, locally or
for employment, locally or abroad, whether overseas.
for profit or not: Provided, That any person
or entity which, in any manner, offers or Art. 28. Capitalization.
promises for a fee, employment to two or
All applicants for authority to hire or renewal
more persons shall be deemed engaged in
of license to recruit are required to have
recruitment and placement.
such substantial capitalization as determined
Art. 13. (3) "Private fee-charging employment by the Secretary of Labor.
POEA Governing Board Resolution No. 7, Series
Means any person or entity engaged in of 2016 on February 26, 2016 provides:
recruitment and placement of workers for a
The sole proprietor and partnership shall
fee which is charged, directly or indirectly,
have a minimum capitalization of Five Million
from the workers or employers or both.
Pesos (PhP5,000,000.00) and
Art. 13. (4) "License" A minimum paid up capital of Five Million
Pesos (PhP5,000,000.00) in case of a
Means a document issued by the corporation.
Department of Labor authorizing a person or
entity to operate a private employment Art. 29. Non-transferability of license or
agency. authority.

Art. 13. (5) "Private recruitment entity" No license or authority shall be used directly
or indirectly by any person other than the
Means any person or association engaged in one in whose favor it was issued or at any
the recruitment and placement of workers, place other than that stated in the license or
locally or overseas, without charging, directly authority be transferred, conveyed or
or indirectly, any fee from the workers or assigned to any other person or entity. Any
employers. transfer of business address, appointment or
designation of any agent or representative
Art. 13. (6) "Authority" including the establishment of additional
offices anywhere shall be subject to the prior
Means a document issued by the
approval of the Department of Labor.
Department of Labor authorizing a person or
association to engage in recruitment and Art. 34. Prohibited practices.
placement activities as a private recruitment
entity. It shall be unlawful for any individual, entity, licensee,
or holder of authority:
Art. 18. Ban on direct-hiring. No employer may hire
a Filipino worker for overseas employment. 1. To charge or accept, directly or indirectly,
any amount greater than that specified in
Except: the schedule of allowable fees prescribed by
the Secretary of Labor, or to make a worker
Through the Boards and entities authorized
pay any amount greater than that actually
by the Secretary of Labor.
Direct-hiring by members of the diplomatic received by him as a loan or advance;
2. To furnish or publish any false notice or
corps, international organizations and such
information or document in relation to
other employers as may be allowed by the
recruitment or employment;
Secretary of Labor is exempted from this
3. To engage in the recruitment or placement
of workers in jobs harmful to public health or
Art. 22. Mandatory remittance of foreign morality or to the dignity of the Republic of
exchange earnings. the Philippines;
4. To influence or to attempt to influence any
It shall be mandatory for all Filipino workers person or entity not to employ any worker
abroad to remit a portion of their foreign who has not applied for employment through
exchange earnings to their families, his agency;
dependents, and/or beneficiaries in the

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5. To obstruct or attempt to obstruct inspection Learners are persons hired as trainees in

by the Secretary of Labor or by his duly semi-skilled and other industrial occupations
authorized representatives; which are non-apprenticeable and which
may be learned through practical training on
Art. 36. Regulatory power. the job in a relatively short period of time
The Secretary of Labor shall have the power which shall not exceed three (3) months.
to restrict and regulate the recruitment and Art. 74. When learners may be hired.
placement activities of all agencies within the
coverage of this Title and is hereby Learners may be employed when no
authorized to issue orders and promulgate experienced workers are available, the
rules and regulations to carry out the employment of learners is necessary to
objectives and implement the provisions of prevent curtailment of employment
this Title. opportunities, and the employment does not
create unfair competition in terms of labor
Art. 37. Visitorial Power. costs or impair or lower working standards.
The Secretary of Labor or his duly authorized Art. 75. Learnership agreement.
representatives may, at any time, inspect the
premises, books of accounts and records of Any employer desiring to employ learners
any person or entity covered by this Title, shall enter into a learnership agreement with
require it to submit reports regularly on them, which agreement shall include:
prescribed forms, and act on violation of any
provisions of this Title 1. The names and addresses of the
2. The duration of the learnership
period, which shall not exceed three
Title II
(3) months;
TRAINING AND EMPLOYMENT OF SPECIAL 3. The wages or salary rates of the
WORKERS learners which shall begin at not
less than seventy-five percent
Chapter I (75%) of the applicable minimum
wage; and
A commitment to employ the learners if they
Art. 58. Definition of Terms. As used in this
so desire, as regular employees upon
completion of the learnership. All learners
"Apprenticeship" who have been allowed or suffered to work
during the first two (2) months shall be
Means practical training on the job deemed regular employees if training is
supplemented by related theoretical terminated by the employer before the end
instruction. of the stipulated period through no fault of
the learners.
An "apprentice"
The learnership agreement shall be subject
Is a worker who is covered by a written
to inspection by the Secretary of Labor and
apprenticeship agreement with an individual
Employment or his duly authorized
employer or any of the entities recognized
under this chapter.

An "apprenticeable occupation"
Means any trade, form of employment or
occupation which requires more than three
(3) months of practical training on the job Title I
supplemented by related theoretical

"Apprenticeship agreement" Chapter I

Is an employment contract wherein the HOURS OF WORK

employer binds himself to train the
Art. 82. Coverage. The provisions of this Title shall
apprentice and the apprentice in turn
apply to employees in all establishments and
accepts the terms of training.
undertakings whether for profit or not.

Art. 59. Qualifications of apprentice. To qualify as
1. Government employees;
an apprentice, a person shall:
2. Managerial employees;
1. Be at least fifteen (15) years of age; 3. Field personnel;
2. Possess vocational aptitude and capacity for 4. Members of the family of the employer who
appropriate tests; and are dependent on him for support;
3. Possess the ability to comprehend and follow 5. Domestic helpers;
oral and written instructions. 6. Persons in the personal service of another;
Art. 73. Learners defined. 7. 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 Work performed on any special holiday shall
those whose primary duty consists of the be paid an additional compensation of at
management of the establishment in which they are least thirty percent (30%) of the regular
employed or of a department or subdivision thereof, wage of the employee. Where such holiday
and to other officers or members of the managerial work falls on the employees scheduled rest
staff. day, he shall be entitled to an additional
compensation of at least fifty per cent (50%)
"Field personnel" shall refer to non-agricultural of his regular wage.
employees who regularly perform their duties away
from the principal place of business or branch office Where the collective bargaining agreement
of the employer and whose actual hours of work in or other applicable employment contract
the field cannot be determined with reasonable stipulates the payment of a higher premium
certainty. pay than that prescribed under this Article,
the employer shall pay such higher rate.
Art. 86. Night shift differential.
Art. 94. Right to holiday pay.
Every employee shall be paid a night shift
differential of not less than ten percent Every worker shall be paid his regular daily
(10%) of his regular wage for each hour of wage during regular holidays, except in retail
work performed between ten oclock in the and service establishments regularly
evening and six oclock in the morning. employing less than ten (10) workers;
Art. 87. Overtime work. Art. 95. Right to service incentive leave.
Work may be performed beyond eight (8) Every employee who has rendered at least
hours a day provided that the employee is one year of service shall be entitled to a
paid for the overtime work, an additional yearly service incentive leave of five days
compensation equivalent to his regular wage with pay.
plus at least twenty-five percent (25%)
thereof. This provision shall not apply to those who
Work performed beyond eight hours on a are already enjoying the benefit herein
holiday or rest day shall be paid an provided, those enjoying vacation leave with
additional compensation equivalent to the pay of at least five days and those employed
rate of the first eight hours on a holiday or in establishments regularly employing less
rest day plus at least thirty percent (30%) than ten employees or in establishments
thereof. exempted from granting this benefit by the
Secretary of Labor and Employment after
Art. 88. Undertime not offset by overtime.
considering the viability or financial condition
Undertime work on any particular day shall of such establishment.
not be offset by overtime work on any other
The grant of benefit in excess of that
day. Permission given to the employee to go
provided herein shall not be made a subject
on leave on some other day of the week
of arbitration or any court or administrative
shall not exempt the employer from paying
the additional compensation required in this
Chapter. Art. 96. Service charges.
Art. 90. Computation of additional All service charges collected by hotels,
compensation. restaurants and similar establishments shall
For purposes of computing overtime and be distributed at the rate of:
a. eighty-five percent (85%) for all
other additional remuneration as required by
covered employees and
this Chapter, the "regular wage" of an
b. fifteen percent (15%) for
employee shall include the cash wage only,
without deduction on account of facilities
The share of the employees shall be equally
provided by the employer.
distributed among them. In case the service
Art. 93. Compensation for rest day, Sunday or charge is abolished, the share of the covered
holiday work. employees shall be considered integrated in
their wages.
Where an employee is made or permitted to
work on his scheduled rest day, he shall be Art. 97. Wages.
paid an additional compensation of at least
"Wage" paid to any employee shall mean the
thirty percent (30%) of his regular wage. An
remuneration or earnings, however
employee shall be entitled to such additional
designated, capable of being expressed in
compensation for work performed on Sunday
terms of money, whether fixed or
only when it is his established rest day.
ascertained on a time, task, piece, or
commission basis, or other method of
When the nature of the work of the
calculating the same, which is payable by an
employee is such that he has no regular
employer to an employee under a written or
workdays and no regular rest days can be
unwritten contract of employment for work
scheduled, he shall be paid an additional
done or to be done, or for services rendered
compensation of at least thirty percent
or to be rendered and includes the fair and
(30%) of his regular wage for work
reasonable value, as determined by the
performed on Sundays and holidays.
Secretary of Labor and Employment, of

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board, lodging, or other facilities customarily No wage order shall be construed to prevent
furnished by the employer to the employee. workers in particular firms or enterprises or
industries from bargaining for higher wages
Art. 100. Prohibition against elimination or with their respective employers.
diminution of benefits.
Art. 126. Prohibition against injunction.
Nothing in this Book shall be construed to
eliminate or in any way diminish No preliminary or permanent injunction or
supplements, or other employee benefits temporary restraining order may be issued
being enjoyed at the time of promulgation of by any court, tribunal or other entity against
this Code. any proceedings before the Commission or
the Regional Boards. (As amended by
Art. 111. Attorneys fees. Republic Act No. 6727, June 9, 1989)
In cases of unlawful withholding of wages, R.A. No. 10022
the culpable party may be assessed
attorneys fees equivalent to ten percent of Rule 2, Section 1,
the amount of wages recovered.
It shall be unlawful for any person to (b) Authority - refers to a document issued by the
demand or accept, in any judicial or Secretary of Labor and Employment authorizing the
administrative proceedings for the recovery officers, personnel, agents or representatives of a
of wages, attorneys fees which exceed ten licensed recruitment/manning agency to conduct
percent of the amount of wages recovered. recruitment and placement activities in a place stated
in the license or in a specified place.
Art. 113. Wage deduction. No employer, in his own
behalf or in behalf of any person, shall make any (i) Direct Hires - workers directly hired by employers
deduction from the wages of his employees. for overseas employment as authorized by the
Secretary of Labor and Employment and processed by
Except: the POEA, including:

a. In cases where the worker is insured with his 1. Those hired by international organizations
consent by the employer, and the deduction 2. Those hired members of the diplomatic
is to recompense the employer for the corps.
amount paid by him as premium on the 3. Name hires or workers who are able to
insurance; secure overseas employment opportunity
b. For union dues, in cases where the right of with an employer without the assistance or
the worker or his union to check-off has participation of any agency. [Labor Code,
been recognized by the employer or POEA Rules]
authorized in writing by the individual worker
concerned; and (pp) Private Recruitment/Employment Agency -
c. In cases where the employer is authorized refers to any person, partnership or corporation duly
by law or regulations issued by the Secretary licensed by the Secretary of Labor and Employment to
of Labor and Employment. engage in the recruitment and placement of workers
for overseas employment for a fee which is charged,
Art. 123. Wage Order. Whenever conditions in the directly or indirectly, from the workers who renewed
region so warrant, the Regional Board shall their employment contracts with the same principal.
investigate and study all pertinent facts; and based on
the standards and criteria herein prescribed, shall Rule 4, Section 1,
proceed to determine whether a Wage Order should
Section 1. Definition. Illegal Recruitment
be issued.
Illegal recruitment shall mean any act of
Any such Wage Order shall take effect after
canvassing, enlisting, contracting,
fifteen (15) days from its complete
transporting, utilizing, hiring, or procuring
publication in at least one (1) newspaper of
workers and includes referring, contract
general circulation in the region.
services, promising or advertising for
Any party aggrieved by the Wage Order issued by the employment abroad, whether for profit or
Regional Board may appeal such order to the not, when undertaken by a non-licensee or
Commission within ten (10) calendar days from the non-holder of authority contemplated under
publication of such order. Article 13(f) of Presidential Decree No. 442,
as amended, otherwise known as the Labor
It shall be mandatory for the Commission to decide Code of the Philippines:
such appeal within sixty (60) calendar days from the Provided, That any such non-licensee or
filing thereof. non-holder who, in any manner, offers or
promises for a fee employment abroad to
Note: two or more persons shall be deemed so
The filing of the appeal does not stay the engaged. It shall likewise include the
order unless the person appealing such order following acts, whether committed by any
shall file with the Commission, an person, whether a non-licensee, non-holder,
undertaking with a surety or sureties licensee or holder of authority:
satisfactory to the Commission for the Acts which constitute Illegal Recruitment:
payment to the employees affected by the
order of the corresponding increase, in the 1. To furnish or publish any false notice or
event such order is affirmed. (As amended information or document in relation to
by Republic Act No. 6727, June 9, 1989) recruitment or employment;

Art. 125. Freedom to bargain.

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2. To engage in the recruitment or placement d. When the work is necessary to prevent loss
of workers in jobs harmful to public health or or damage to perishable goods; and
morality or to the dignity of the Republic of e. Where the completion or continuation of the
the Philippines; work started before the eighth hour is
necessary to prevent serious obstruction or
3. To obstruct or attempt to obstruct inspection prejudice to the business or operations of
by the Secretary of Labor and Employment the employer.
or by his duly authorized representative;
Art. 92. When employer may require work on a rest
4. Failure to actually deploy a contracted day. The employer may require his employees to
worker without valid reason as determined work on any day: (PANUCA)
by the Department of Labor and
a. In case of actual or impending emergencies
caused by serious accident, fire, flood,
5. To allow a non-Filipino citizen to head or typhoon, earthquake, epidemic or other
manage a licensed recruitment/manning disaster or calamity to prevent loss of life
agency. and property, or imminent danger to public
Section 2. Crime Involving Economic Sabotage.
b. In cases of urgent work to be performed on
Illegal recruitment is deemed committed by the machinery, equipment, or installation, to
a syndicate if carried out by a group of avoid serious loss which the employer would
three (3) or more persons conspiring or otherwise suffer;
confederating with one another.
It is deemed committed in a large scale if c. In the event of abnormal pressure of work
committed against three (3) or more persons due to special circumstances, where the
individually or as a group. employer cannot ordinarily be expected to
resort to other measures;
Section 6. Venue.
d. To prevent loss or damage to perishable
A criminal action arising from illegal
recruitment as defined under this Rule shall
be filed with the Regional Trial Court of the
e. Where the nature of the work requires
province or city where the offense was
continuous operations and the stoppage of
committed or where the offended party
work may result in irreparable injury or loss
actually resides at the time of the
to the employer; and
commission of the offense; Provided, that
the court where the criminal action is first f. Under other circumstances analogous or
filed shall acquire jurisdiction to the similar to the foregoing as determined by the
exclusion of other courts. Secretary of Labor and Employment.
Section 7. Prescription. Art. 124. Standards/Criteria for minimum wage
fixing. (I-WIND-PIECE)
Illegal recruitment cases under this Rule
shall prescribe in five (5) years; a. The demand for living wages;
Provided, however, that illegal recruitment b. Wage adjustment vis--vis the consumer
cases involving economic sabotage shall price index;
prescribed in twenty (20) years. c. The cost of living and changes or increases
Section 8. Independent Action.
d. The needs of workers and their families;
The filing of an offense punishable under this e. The need to induce industries to invest in the
section shall be without prejudice to the countryside;
f. Improvements in standards of living;
filing of cases punishable under other
g. The prevailing wage levels;
existing laws, rules or regulations.
h. Fair return of the capital invested and
TO MEMORIZE: capacity to pay of employers;
i. Effects on employment generation and
Art. 89. Emergency overtime work. Any employee family income; and
may be required by the employer to perform overtime j. The equitable distribution of income and
work in any of the following cases: (CPUNW) wealth along the imperatives of economic
and social development.
a. When the country is at war or when any
other national or local emergency has been Wage Distortion
declared by the National Assembly or the
Organized Establishment:
Chief Executive;
b. When it is necessary to prevent loss of life or Where the application of any prescribed wage
property or in case of imminent danger to increase by virtue of a law or wage order issued by
public safety due to an actual or impending any Regional Board results in distortions of the wage
emergency in the locality caused by serious structure within an establishment, the employer and
accidents, fire, flood, typhoon, earthquake, the union shall negotiate to correct the distortions.
epidemic, or other disaster or calamity;
c. When there is urgent work to be performed Any dispute arising from wage distortions
on machines, installations, or equipment, in shall be resolved through the grievance
order to avoid serious loss or damage to the procedure under their collective bargaining
employer or some other cause of similar agreement; and

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If it remains unresolved, through voluntary supplies or places workers to perform a job or work of
arbitration. principal, and the elements enumerated in Section 5
hereunder are present.
Unless otherwise agreed by the parties in writing,
such dispute shall be decided by the voluntary Substantial Capital refers to paid-up capital
arbitrators within ten (10) calendar days from the stock/shares at least Five Million Pesos
time said dispute was referred to voluntary (5,000,000) in the case of corporations,
arbitration. partnerships and cooperatives; in the case of single
proprietorship, a net worth of at least Five Million
Unorganized Establishment: Pesos (5,000,000).
In cases where there are no collective agreements or Section 9: The principal and the subcontractor are
recognized labor unions: solidarily liable for the payment of the wages of the
employees of the subcontractor.
The employers and workers shall endeavor
to correct such distortions. Any dispute
arising therefrom shall be settled through
the National Conciliation and Mediation
Board; and
If it remains unresolved after ten (10) Section 5. Absolute Prohibition against Labor-
calendar days of conciliation, shall be Only Contracting:
referred to the appropriate branch of the 1. The contractor or subcontractor does not
National Labor Relations Commission have substantial capital, or
(NLRC). 2. The contractor or subcontractor does not
It shall be mandatory for the NLRC to conduct have investment in the form of tools,
continuous hearings and decide the dispute within equipment, machineries, supervision, work,
twenty (20) calendar days from the time said dispute premises, among others;
is submitted for compulsory arbitration.
3. The Contractors or subcontractors
The pendency of a dispute arising from a wage employees recruited and placed are
distortion shall not in any way delay the applicability performing activities which are directly
of any increase in prescribed wage rates pursuant to related to the main business operation of the
the provisions of law or wage order. principal;

What is a wage distortion? Or

A wage distortion shall mean a situation 4. The contractor or subcontractor does not
where an increase in prescribed wage rates exercise the right of control over the
results in the elimination or severe performance of the work of the employee.
contraction of intentional quantitative
differences in wage or salary rates between
and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure
based on skills, length of service, or other
logical bases of differentiation.

Department Order No. 174-2007

Section 3:

Cabo Refers to a person or group of persons or to

a labor group which, under the guise of a labor
organization, cooperative or any entity, supplies
workers to an employer, with or without any
monetary or other consideration, whether in the
capacity of an agent of the employer or as an
ostensible independent contractor.

Contracting or Subcontracting refers to an

arrangement whereby a principal agrees to farm out a
contractor the performance or completion of a specific
job or work within a definite or predetermined period,
regardless of whether such job or work is to be
performed or completed within or outside the
premises of the principal;

Contractor refers to any person or entity engaged

in a legitimate contracting or subcontracting
arrangement providing services for a specific job or
undertaking farmed out by the principal under a
Service Agreement.

Labor-only Contracting refers to an arrangement

where the contractor or subcontractor merely recruits,

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