ATTY.

JIMENEZ TIPS IN LABOR

LABOR STANDARDS

JOB CONTRACTING

There is "job contracting" where

(a) The contractor carries on a distinct and independent business and undertakes the contract work on
his 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 his work except
as to the results thereof;

(b) The contractor has substantial capital or investment; and

(c) The agreement between the principal and the contractor or subcontractor assures the contractual
employees' entitlement to all labor and occupational safety and health standards, free exercise of the right
to self-organization, security of tenure, and social welfare benefits.(Babas vs. Lorenzo Shipping,
December 15, 2010)

LABOR-ONLY CONTRACTING

Elements of labor – only contracting Under the Labor Code, two (2) elements must exist for a finding of
labor-only contracting:

(a) 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

(b) the workers recruited and placed by such persons are performing activities directly related to the
principal business of such employer. (Filipinas Synthetic Fiber Corporation (FILSYN) vs. National Labor
Relations Commission, G.R. No. 113347, June 14, 1996)

VISITORIAL POWERS OF THE SECRETARY OF LABOR (Labor Standard cases)

Secretary of Labor and Employment or his duly authorized representative may at any time, inspect the
premises, books of accounts and records of any person or entity covered by recruitment and placement
of workers, require it to submit reports regularly on prescribed forms and act on violation of any provisions
of recruitment snd placement of workers(ART 37)

VISITORIAL POWERS OF THE SECRETARY OF LABOR (Labor Relation cases)

Secretary of Labor and Employment or his duly authorized representative is empowered to inquire into
the financial activities of LLO upon filing of a complaint under oath and duly supported by the written
consent of at least twenty percent of the total membership of the labor organization concerned and to
examine books of accounts and other records to determine compliance or non-compliance with the law
and to prosecute any violations of the law and the union constitution and by-laws.

Note: inquiry/examination shall not be conducted during the 60dayfreedom period nor w/in 30days
immediately preceding the date of election of union officials

ILLEGAL RECRUITMENT

Illegal recruitment is committed when two elements concur, namely;

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(1) the offender has no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers; and

(2) he undertakes either any activity within the meaning of ―recruitment and placement‖ defined under
Article 13(b), or any of the prohibited practices enumerated under Article 34 of the Labor Code. (People
vs. Gutierrez, 422 SCRA 32)

Economic sabotage

Illegal recruitment when committed by a syndicate or in large scale shall be considered as

offense involving economic sabotage. Illegal recruitment is deemed committed in large scale if
committed against three or more persons individually or as a group. In this case, five
complainants testified against appellant’s acts of illegal recruitment, thereby rendering his acts
tantamount to economic sabotage.

Syndicated Illegal Recruitment

Illegal recruitment is deemed committed by a syndicate when carried out by a group of three (3)
or more persons conspiring or confederating with one another. (Section 6, Republic Act No. 8042)

Large Scale Illegal

Recruitment It is deemed committed in large scale if committed against three (3) or more persons
individually or as a group. (Section 6, Republic Act No. 8042) Illegal recruitment in large scale is
committed when a person

"(a) undertakes any recruitment activity defined under Article 13 (b) or any prohibited practice
enumerated under Article 34 of the Labor Code;

(b) does not have a license or authority to lawfully engage in the recruitment and placement of
workers; and

(c) commits the same against three or more persons, individually or as a group. (People of the
Philippines vs. Calonzo, G.R. Nos. 115150-55, September 27, 1996)

Penalties for Illegal Recruitment

The penalties for illegal recruitment today are the ones provided by Section 6, Republic Act No.
10022 which amended Republic Act No. 8042 which provided for higher penalties on illegal
recruitment than what are provided by Article 39 of the Labor Code. Thus:

a. Simple illegal recruitment - imprisonment of 12 years and 1 day to 20 years and a fine
of1 million to 2 million pesos.

b. Illegal recruitment deemed as economic sabotage- life imprisonment and a fine of 2

million to 5 million pesos. The maximum penalty shall be imposed if the person illegally
recruited is less than eighteen (18) years of age or committed by a non-licensee or non-
holder of authority

Consequences of Conviction for Illegal Recruitment

1. automatic revocation of the license or authority (Art. 39[e]);

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 2. forfeiture of the cash and surety bonds (Art. 39[e]); 3. conviction for the crime of estafa, if found
guilty therefor. (People of the Philippines vs. Calonzo, G.R. Nos. 115150-55, September 27,
1996)

Prescription of action for illegal recruitment

Illegal recruitment cases under this Act shall prescribe in five (5) years: Provided, however, That
illegal recruitment cases involving economic sabotage as defined herein shall prescribe in twenty
(20) years. (Section 12, Republic Act 8042)

LIABILITIES OF PRINCIPAL EMPLOYERS AND AGENCIES

Is the solidary liability of corporate officers with the recruitment agency “automatic” in character?

No. In order to hold the officers of the agency solidarily liable, it is required that there must be
proof of their culpability therefor. Thus, in the 2013 case of Gagui v. Dejero. Thus, while it is true
that R.A. 8042 and the Corporation Code provide for solidary liability, this liability must be so
stated in the decision sought to be implemented. Absent this express statement, a corporate
officer may not be impleaded and made to personally answer for the liability of the corporation.

PROCEDURES IN LABOR DISPUTES PROPER FOR POEA, NLRC AND THE OFFICE OF THE
SECRETARY OF LABOR

OFW-RELATED CASES OVER WHICH THE POEA, AND NOT THE LABOR ARBITERS, HAS
JURISDICTION.

The Philippine Overseas Employment Administration (POEA) has original and exclusive
jurisdiction to hear and decide:

(a) All cases which are administrative in character, involving or arising out of violation of
rules and regulations relating to licensing and registration of recruitment and
employment agencies or entities, including refund of fees collected from workers and
violation of the conditions for the issuance of license to recruit workers.

(b) Disciplinary action cases and other special cases which are administrative in
character, involving employers, principals, contracting partners and Filipino migrant
workers.

No. 1 above covers recruitment violations or violations of conditions of license; while No. 2
above involves (a) disciplinary action cases against foreign principals or employers, and (a)
disciplinary action cases against landbased OFWs and seafarers.

Power to suspend or cancel license or authority

Secretary of labor shall have the power to suspend or cancel any license or authority to recruit employees
for overseas employment for violations of rules and regulations issued by the Secretary of Labor, the
overseas employment development board(poea), or for violation of the provisions of this and other
applicable laws, general orders and letters of instruction. (ART. 35)

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JURISDICTION OF POEA

The Administration shall exercise original and exclusive jurisdiction to hear and decide all cases which
are

a. Administrative in character, involving or arising out of violations of recruitment rules and

regulations, including refund of fees collected from Overseas Filipino Workers and
b. Any violation of the conditions for the issuance of the license to recruit Overseas Filipino
Workers.
c. The Administration shall likewise exercise original and exclusive jurisdiction to hear and decide
disciplinary action cases against Overseas Filipino Workers and principals/employers that are
administrative in character, excluding money claims.(section 138 of REVISED POEA RULES AND
REGULATIONS GOVERNING THE RECRUITMENT AND EMPLOYMENT OF LAND BASED
OVERSEAS FILIPINO WORKERS OF 2016)

ISSUES ON WAGE FORMULATION AND PROHIBITION CONCERNING PAYMENT OF WAGES

May normal working hours be reduced?

Yes, provided that no corresponding reduction is made on the employee’s wage or salary equivalent to an
8-hour work day. In instances where the number of hours required by the nature of work is less than 8
hours, such number of hours should be regarded as the employee’s full working day.

“Flexible work arrangements” refer to alternative arrangements or schedules other than the
traditional or standard work hours, workdays and workweek. The effectivity and implementation of any of
the flexible work arrangements should be temporary in nature.

“Compressed Workweek” or “CWW” refers to a situation where the normal workweek is reduced
to less than six (6) days but the total number of work-hours of 48 hours per week remains. The normal
workday is increased to more than eight (8) hours but not to exceed twelve (12) hours, without
corresponding overtime premium. This concept can be adjusted accordingly in cases where the normal
workweek of the firm is five (5) days.

What are the conditions for its validity?

The CWW scheme is undertaken as a result of an express and voluntary agreement of majority of the
covered employees or their duly authorized representatives.

How should compensation be made under a valid CWW?

Unless there is a more favorable practice existing in the firm, work beyond eight (8) hours will not be
compensable by overtime premium provided the total number of hours worked per day shall not exceed
twelve (12) hours. In any case, any work performed beyond twelve (12) hours a day or forty-eight (48)
hours a week shall be subject to overtime pay.

DEDUCTIONS FROM WAGES

May employer deduct from wage of employees? The general rule is that an employer, by himself or
through his representative, is prohibited from making any deductions from the wages of his employees.
The employer is not allowed to make unnecessary deductions without the knowledge or authorization of
the employees.

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 Are there exceptions to this rule?

Yes.

(a) In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;

(b) For union dues, in cases where the right of the worker or his union to check-off has been
recognized by the employer or authorized in writing by the individual worker concerned; and

(c) In cases where the employer is authorized by law or regulations issued by the DOLE
Secretary. (d) Deductions for loss or damage under Article 114 of the Labor Code;

(e) Deductions made for agency fees from non-union members who accept the benefits under the
CBA negotiated by the bargaining union. This form of deduction does not require the written
authorization of the non-bargaining union member concerned;

(f) Deductions for value of meal and other facilities;

(g) Deductions for premiums for SSS, PhilHealth, employees’ compensation and Pag-IBIG;

(h) Withholding tax mandated under the National Internal Revenue Code (NIRC);

(i) Withholding of wages because of the employee’s debt to the employer which is already due;

(j) Deductions made pursuant to a court judgment against the worker under circumstances where
the wages may be the subject of attachment or execution but only for debts incurred for food,
clothing, shelter and medical attendance;

(k) When deductions from wages are ordered by the court;

WAGE DISTORTION

The term "wage distortion", under the Rules Implementing Republic Act 6727, is defined, thus:

Wage Distortion means a situation where an increase in prescribed wage rates results in the elimination
or severe contradiction 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. (Metropolitan Bank &
Trust Company Employees Union-ALU – TUCP, vs. National Labor Relations Commission, G.R. No.
102636, September 10, 1993) Wage Distortion is a non - strikable issue The solution to the problem of
wage distortions shall be sought by voluntary negotiation or arbitration, and not by strikes, lockouts, or
other concerted activities of the employees or management. "Any issue involving wage distortion shall not
be a ground for a strike/lockout. (Ilaw At Buklod Ng Manggagawa (IBM) vs. National Labor Relations
Commission, G.R. No. 91980, June 27, 1991)

VALID WAYS OF RECTIFICATION OF WAGE DISTORTION

For organized establishments:

(1) Employer and the union shall negotiate to correct the distortions.
(2) Disputes shall be resolved through the grievance procedure.
(3) If still unresolved, voluntary arbitration.

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For unorganized establishments:

(1) Employer and employees shall endeavor to correct such distortions.

(2) Disputes shall be settled through the National Conciliation and Mediation Board.
(3) If still unresolved after 10 calendar days of conciliation, it shall be referred to the appropriate
branch of the NLRC – compulsory arbitration. Both the employer and employee cannot use
economic weapons.
(4) Employer cannot declare a lock-out; Employee cannot declare a strike because the law has
provided for a procedure for settling
(5) The salary or wage differential does not need to be maintained. [National Federation of Labor
v. NLRC, 1994]

SPECIAL BENEFITS FOR WOMEN INCLUDING VICTIMS OF DOMESTIC VIOLENCE, SOLO

PARENTS

LEAVE FOR VICTIMS OF VIOLENCE AGAINST WOMEN AND CHILDREN (R.A. No. 9262)

What is this kind of leave?

This special leave is granted to a woman employee who is a victim under this law. It is for a total
of ten (10) days of paid leave of absence, in addition to other paid leaves under the law. It is extendible
when the necessity arises as specified in the protection order. Its purpose is to enable the woman
employee to attend to the medical and legal concerns relative to said law. This leave is not convertible to
cash. What is the requirement for its entitlement?

At any time during the application of any protection order, investigation, prosecution and/or trial of
the criminal case, a victim of Violence Against Women and their Children (VAWC) who is employed shall
be entitled to said paid leave of up to ten (10) days. The Punong Barangay/kagawad or prosecutor or the
Clerk of Court, as the case may be, shall issue a certification at no cost to the woman that such an action
is pending, and this is all that is required for the employer to comply with the 10-day paid leave.

LEAVE FOR SOLO PARENTS

Under R.A. No. 8972, otherwise known as “The Solo Parents’ Welfare Act of 2000,” solo parents are
entitled to a 7-day parental leave on top of the 3-day special leave and other mandatory leave benefits. It
refers to leave benefits granted to a solo parent to enable said parent to perform parental duties and
responsibilities where physical presence is required as provided under Civil Service Commission (CSC)
Memorandum Circular No. 08, series 2004.

As long as the child is living with him/her, dependent for support, unmarried, unemployed and below
eighteen (18) years old, or eighteen (18) years old and above but is incapable of self-support and/or with
physical/mental defect/disability.

It is granted provided that:

1. The solo parent must have rendered government service for a least one (1) year, whether
continuous or broken, reckoned at the time of the effectivity of the law on September 22, 2002,
regardless of the employment status.

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 2. The parental leave shall be availed of every year and shall not be convertible to cash. If not
availed within the calendar year, said privilege shall be forfeited within the same year.
3. The parental leave shall be availed of on a continuous or staggered basis, subject to the
approval of the Administrator. In this regard, the solo parent shall submit the application for
parental leave at least one (1) week prior to availing the solo parent leave, except on emergency
cases.
4. The solo parent employee may avail of parental leave under any of the following
circumstances:
a. Attend to personal milestones of a child such as birthday, communion, graduation and
other similar events;
b. Perform parental obligations such as enrollment and attendance in school programs,
PTA meetings and the like;
c. Attend to medical social, spiritual and recreational needs of the child;
d. Other similar circumstances necessary in the performance of parental duties and
responsibilities, where physical presence of the parent is required.

5. The head of agency/office concerned may determine whether granting of parental leave is
proper or may conduct the necessary investigation to ascertain if grounds for termination and
withdrawal of the privilege exist.

Note: It can only be availed after the issuance of the Solo Parent ID.

Solo parents are allowed to work on a flexible schedule. The phrase “flexible work schedule” is
defined in the same law as the right granted to a solo parent employee to vary his/her arrival and
departure time without affecting the core work hours as defined by the employer

MAGNA CARTA BENEFITS FOR HYSTERECTOMY, OVARIECTOMY, AND MASTECTOMY

A special leave benefit for women was granted under R.A. No. 9710, otherwise known as “The Magna
Carta of Women” [August 14, 2009]. Thus, any female employee in the public and private sector
regardless of age and civil status shall be entitled to a special leave of two (2) months with full pay based
on her gross monthly compensation subject to existing laws, rules and regulations due to surgery caused
by gynecological disorders under the following terms and conditions:

1. She has rendered at least six (6) months continuous aggregate employment service for the last twelve
(12) months prior to surgery;
2. In the event that an extended leave is necessary, the female employee may use her earned leave
credits; and
3. This special leave shall be non-cumulative and non-convertible to cash.
“Gynecological disorders” refer to disorders that would require surgical procedures such as, but
not limited to, dilatation and curettage and those involving female reproductive organs such as the vagina,
cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as certified by a competent
physician. Gynecological surgeries shall also include hysterectomy, ovariectomy, and mastectomy.

Is this leave similar to maternity leave?

No. This leave should be distinguished from maternity leave benefit, a separate and distinct benefit, which
may be availed of in case of childbirth, miscarriage or complete abortion. A woman, therefore, may avail
of this special leave benefit in case she undergoes surgery caused by gynecological disorder and at the
same time maternity benefit as these two leaves are not mutually exclusive.

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 LABOR RELATIONS

JURISDICTION OF LA

1. Unfair labor practice cases;

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;
4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee
relations;
5. Cases arising from any violation of Article 264 (old numbering) of the Labor Code, as amended,
including questions involving the legality of strikes and lockouts;
6. Except claims for employees compensation not included in the next succeeding paragraph, social
security, medicare, and maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount exceeding Five
Thousand Pesos (P5,000.00), whether or not accompanied with a claim for reinstatement;
7. Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant
to Republic Act No. 6727;
8. Enforcement of compromise agreements when there is non-compliance by any of the parties pursuant
to Article 227 of the Labor Code, as amended;
9. Money claims arising out of 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 as provided by Section 10 of RA 8042, as amended by RA 10022; and
10. Other cases as may be provided by law provided in said agreements. (RULE V SECTION 1 of 2011
NLRC RULES OF PROCEDURE)

Case Flow in the NLRC

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Case Flow in the NLRC (part 2)

Procedure for Settlement/ Disposition of Labor Related Disputes

UNION

"Union" refers to any labor organization in the private sector organized for collective bargaining and for
other legitimate purposes. We should note that not every union is “legitimate;” only those properly

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registered are considered LLO. But non-registration does not mean it is “illegitimate;” it simply is
unregistered and has no legal personality. It exists legally but does not possess the rights of an LLO.

COLLECTIVE BARGAINING

Contract Bar Rule

When there is an existing CBA, neither the employer nor the union may terminate nor modify the
Collective Bargaining Agreement during its lifetime. The parties are mandated by law to keep the status
quo and to continue with full force and effect the terms and conditions of the existing CBA. This is known
as the contract bar rule – the existence of the CBA (a contract between the employer and the union) bars
the modification or termination of the CBA except during the freedom period.

Freedom Period

The freedom period refers to the sixty (60) days span prior to the expiration of the CBA. It is the time
when the parties may terminate or modify the terms and conditions of the CBA.

Automatic Renewal Clause

Article 264 provides that the CBA shall remain effective and enforceable even after the expiration of the
period fixed by the parties as long as no new agreement is reached by them and no petition for
certification election is filed.

Lifetime of the CBA

The representation issue or the status of the union who entered into the Collective Bargaining Agreement
has a lifetime of five (5) years from the time of its effectivity. While the other provisions (economic) shall
be effective for a period of three (3) years from its execution.

The Exclusive Bargaining Status Cannot Go Beyond Five Years

In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a
term of three (3) years or one which does not coincide with the said five-year term and said agreement is
ratified by majority of the members in the bargaining unit, the subject contract is valid and legal and
therefore, binds the contracting parties. The same will however not adversely affect the right of another
union to challenge the majority status of the incumbent bargaining agent within sixty (60) days before the
lapse of the original five (5) year term of the CBA. (FVC Labor Union-Philippine Transport and General
Workers Organization vs. Sama-Samang Nagkakaisang Manggagawa Sa FVC-Solidarity Of Independent
and General Labor Organizations, G.R. No. 176249, November 27, 2009)

Substitutionary doctrine

Stated otherwise, the "substitutionary" doctrine only provides that the employees cannot revoke the
validly executed collective bargaining contract with their employer by the simple expedient of changing
their bargaining agent. And it is in the light of this that the phrase "said new agent would have to respect
said contract" must be understood. It only means that the employees, thru their new bargaining agent,
cannot renege on their collective bargaining contract, except of course to negotiate with management for
the shortening thereof. Bargaining Unit A bargaining unit is "a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, consistent with equity to the employer,
indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective

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bargaining provisions of the law.‖ (International School Alliance of Educators vs. Quisumbing, G.R. No.
128845, June 1, 2000)

Test in determining the appropriate bargaining unit.

In order to determine the appropriate bargaining unit the Supreme Court has time and again applied the
four tests to wit:

(1) will of the employees (Globe Doctrine);

(2) affinity and unit of employees’ interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions;

(3) prior collective bargaining history; and

(4) employment status, such as temporary, seasonal and probationary employees. (University of
the Philippines vs. Hon. Pura Ferrer-Calleja, G.R. No. 96189 July 14, 1992)

Certification election

Certification election refers to the process of determining through secret ballot the sole and exclusive
representative of the employees in an appropriate bargaining unit for purposes of collective bargaining or
negotiation. A certification election is ordered by the Department of Labor and Employment (Department
Order 40 – 03, Rule I, Section 1 [h])

UNFAIR LABOR PRACTICE

Unfair labor practice refers to acts that violate the workers’ right to organize. The prohibited acts are
related to the workers’ right to self-organization and to the observance of a Collective Bargaining
Agreement. Without that element, the acts, no matter how unfair, are not unfair labor practices. (Philcom
Employees Union vs. Philippine Global Communications, G.R. No. 144315, July 17, 2006)

STRIKE

Strike is any temporary stoppage of work by the concerted action of the employees as a result of
industrial or labor dispute. A labor dispute includes any controversy or matter concerning terms or
conditions of employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment, regardless of whether the
disputants stand in the proximate relation of employer and the employee. (Bukluran ng Manggagawa sa
Clothman Knitting Corp. – Solidarity Unions of the Philippines for Empowerment and Reform vs. Court of
Appeals, G.R. No. 158158, January 17, 2005)

The requisites of a valid strike are mandatory.

The requisites for a valid strike are as follows:

(a) a notice of strike filed with the DOLE thirty days before the intended date thereof or fifteen
days in case of unfair labor practice;

(b) strike vote approved by a majority of the total union membership in the bargaining unit
concerned obtained by secret ballot in a meeting called for that purpose;

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 (c) notice given to the DOLE of the results of the voting at least seven days before the intended
strike. These requirements are mandatory and failure of a union to comply therewith renders the
strike illegal (Piñero vs. National Labor Relations Commission, August 20, 2004)

We explained in National Federation of Labor vs. NLRC (G.R. No. 113466, December 15, 1997,
283 SCRA 275, 287-288)that ―with the enactment of Republic Act No. 6715 which took effect on
March 21, 1989, the rule now is that such requirements as the filing of a notice of strike, strike
vote, and notice given to the Department of Labor are mandatory in nature. Thus, even if the
union acted in good faith in the belief that the company was committing an unfair labor practice, if
no notice of strike and a strike vote were conducted, the said strike is illegal.‖ (Samahang
Manggagawa sa Sulpicio Lines, Inc. – NAFLU vs. Sulpicio Lines, Inc. G.R. No. 140992, March
25, 2004)

Note: The Secretary of Labor and Employment may assume jurisdiction over the dispute and
decide it or certify the same to the Commission for compulsory arbitration, when in his opinion
there exists a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest.(ART263g old)

ILLEGAL DISMISSALS

RELIEFS FOR ILLEGAL DISMISSAL

1. RELIEFS UNDER ARTICLE 279 OF THE LABOR CODE. Under this article, an illegally dismissed
employee is entitled to the following reliefs:

(1) Reinstatement without loss of seniority rights and other privileges;

(2) Full backwages, inclusive of allowances; and

(3) Other benefits or their monetary equivalent.

Prescription period for illegal dismissal

Verily, the dismissal without just cause of an employee from his employment constitutes a violation of the
Labor Code and its implementing rules and regulations. Such violation, however, does not amount to an
"offense" as understood under Article 291 of the Labor Code. In its broad sense, an offense is an illegal
act which does not amount to a crime as defined in the penal law, but which by statute carries with it a
penalty similar to those imposed by law for the punishment of a crime

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