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Everyone39s Labor Code Azucena PDF
Everyone39s Labor Code Azucena PDF
1
THE
LABOR CODE
OF THE
PHILIPPINES
As Amended
By Presidential Decree
Nos. 570-A, 626, 643, 823, 849, 850, 865-A,
891, 1367, 1368, 1391, 1412, 1641, 1691, 1692
1693, 1920, 1921, and 2018
Batas Pambansa
Blg. 32, 70, 130 and 227
Executive Order
Nos. 47, 111, 126, 179, 180, 203, 247, 251, 252, 307, 797
and
Republic Act
Nos. 6640, 6657, 6715, 6725, 6727, 7610, 7641, 7655,
7658, 7700, 7730, 7796, 7877, 8042, 8188, 8558,
9177, 9231, 9256, 9347, 9422, 9481, and 9492
2
PRELIMINARY TITLE
Chapter I
GENERAL PROVISIONS
*The boxed questions are not part of the Code. They are added as chapter previews.
3
i
BASIC RIGHTS OF WORKERS
1. SECURITY OF TENURE
• Workers cannot be dismissed without just and authorized causes and
due process.
• Workers shall be made regular after 6 months probation.
2. HOURS OF WORK
• Normal working hours of 8 hours a day
• Meal and rest period: meal break of less than one hour and short
rest periods shall be considered compensable working time
3. WEEKLY REST DAY
• A day-off of 24 consecutive hours after 6 days of work should be
scheduled by the employer upon consultation with the workers.
4. WAGE AND WAGE-RELATED BENEFITS
• Minimum wage in the region/sector or more
• Holiday pay: One day pay for every regular holiday even if unworked
subject to certain conditions.
• Premium pay for work within 8 hours on a
✔ Special or rest day: plus 30% of basic daily rate (bdr)
✔ Rest day falling on a special day: plus 50% of bdr
✔ Rest day falling on a regular holiday: plus 30% of 200% of
bdr
• Overtime pay for work in excess of 8 hours on
✔ Ordinary days: plus 25% of the basic hourly rate
✔ Special days, rest days and holidays: plus 30% of the regular
hourly rate on said days
• Nightshift differential pay: plus 10% of the basic/regular rate for
work between 10PM — 6AM
• Service incentive leave: 5 days with pay per year of service
• Service charges: 85% for distribution to rank-and-file employees;
15% for losses, breakages, or distribution to managerial employees
(applicable only in establishments collecting service charges)
• 13th-month pay: 1/12 of the total basic salary earned within the
calendar year
• Paternity leave: 7 days with full pay to attend to needs of legal wife
before/during/after delivery
• Separation pay: Minimum of 1/2 month pay for every year of service
for authorized causes of separation
• Retirement pay: 22.5 days salary for every year of service for optional
retirement at 60 under RA 7641 or under applicable agreement or
for compulsory retirement at age 65
• For underground mine employees, optional retirement at 50 under
RA 7641 as amended by RA 8558; compulsory at 60.
ii
5. PAYMENT OF WAGES
• Wages shall be paid in cash, legal tender at or near the place of
work
• Payment may be made through a bank upon written petition of majority
of the workers in establishments with 25 or more employees and within
one kilometer radius to a bank
• Payment shall be made directly to the employees
• Wages shall be given not less than once every two weeks or twice
within a month at intervals not exceeding 16 days
• Preference of workers’ money claims over government and other
creditors in case of bankruptcy or liquidation of business
• Labor-only contracting is prohibited and the [so-called] contractor
is considered merely as an agent of the employer
6. EMPLOYMENT OF WOMEN
• Nightwork prohibition unless allowed by the Rules
✔ In industrial undertakings from 10 PM to 6 AM
✔ In commercial/non-industrial undertakings from 12 MN to 6
AM
✔ In agricultural undertakings, at night time unless given not less
than 9 consecutive hours of rest
• Welfare facilities at the workplace such as seats, separate toilet rooms,
lavatories, dressing rooms
• Prohibition against discrimination with respect to pay (i.e., equal pay
for work of equal value), promotion, training opportunities, study
and scholarship grants
7. EMPLOYMENT OF YOUNG WORKERS
• Minimum employable age is 15 years. A worker below 15 should be
directly under the sole responsibility of parents or guardians; work
does not interfere with child’s schooling/normal development; with
work permit from DOLE
• No person below 18 can be employed in a hazardous or deleterious
undertaking
8. SAFE AND HEALTHFUL CONDITIONS OF WORK AND WELFARE
SERVICES
• Proper illumination and ventilation, fire exits and extinguishers,
occupational health personnel and services, family welfare/family
planning services at the workplace, etc.
9. SELF-ORGANIZATION AND COLLECTIVE BARGAINING
10. LABOR EDUCATION THRU SEMINARS, DIALOGS AND INFORMATION,
EDUCATION AND COMMUNICATION MATERIALS
11. PEACEFUL CONCERTED ACTIVITIES IN ACCORDANCE WITH
LAW
iii
12. PARTICIPATION IN POLICY AND DECISION-MAKING PROCESSES
AFFECTING THEIR RIGHTS AND BENEFITS
13. FREE ACCESS TO THE COURTS AND QUASI-JUDICIAL BODIES AND
SPEEDY DISPOSITION OF THEIR CASES
14. ECC BENEFITS FOR WORK-RELATED CONTINGENCIES
• Medical benefits for sickness/injuries
• Disability benefits
• Rehabilitation benefits
• Death and funeral benefits
• Pension benefits
15. SSS BENEFITS
• Maternity, sickness, disability, retirement, death and pension
benefits
To the list of paid leaves should be added the solo parent’s leave (under
R.A. No. 8972) and the so-called “battered woman leave” (under R.A. No.
9262), both of which are available under certain conditions. Another recent
addition to paid absences of women workers is the two months’ “special leave”
(or surgical leave) with full pay under R.A. No. 9710, approved on August 14,
2009, known as the Magna Carta of Women. — CAA
iv
To the hands that provide
Food and Freedom,
Jobs and Justice. .
v
vi
vii
Books by the Author
viii
Everyone’s
L ABOR CODE
C. A. AZUCENA, JR.
Fifth Edition
2007
Book Store
856 Nicanor Reyes, Sr. St.
Tel. Nos.: 735-1364 • 736-0567
1977 C.M. Recto Avenue
Tel. Nos.: 735-5527 • 735-5534
Manila, Philippines
ix
www.rexpublishing.com.ph
Philippine Copyright 1997, 2000, 2001, 2006, 2007
by CESARIO ALVERO AZUCENA, JR.
Practitioner, Professor, Bar Reviewer
1997 edition (three reprintings)
2000 edition (two reprintings)
2001 edition (six reprintings)
2006 edition
2007 edition
Fifth Edition
(with latest update)
ISBN-978-971-23-4970-6
Printed by:
Eugen Ehrlich
(1862-1922)
ARTURO D. BRION
Secretary
Department of Labor and
Employment
xi
PREFACE
“More than the fundamentals, but...”
This work aspires to bring the labor laws to wide public awareness. Law
writers and law teachers, I think, have a responsibility to tell the laws to the
people, not just to lawyers and law students. Because laws exist to address public
concerns, the people themselves should be adequately informed of the laws;
otherwise, lawmaking is only half-done. And public information is most gravely
needed of laws that affect the mass of workers, such as the labor laws. Sadly,
though, most Filipino workers and many business owners and managers are
uninformed of their rights and responsibilities. Public Labor Education as a
cause deserves support.
This book aims to popularize labor law fundamentals in a manner suited to
lay readers. Most of the Labor Code articles — the key or significant provisions
— are supplemented with “Notes” written succinctly and simply in nonlegalistic
style. Many of the “Notes” quote or condense court rulings, and I have taken great
care that the gists captured the rulings accurately. I have not traded correctness
for simplicity.
This edition also reflects many changes made by implementing rules
recently released, mostly those under Department Orders Nos. 18-02, 40-03 and
57-04. Also reflected are the 2002 Rules of the POEA and the NLRC Revised
Rules of Procedure that took effect on January 7, 2006.
Considering its varied sources — the Labor Code itself, administrative
regulations, court rulings, and special laws — the book therefore goes beyond
the fundamentals. I owe the readers nothing less.
To them, I take the liberty to address some thoughts.
xii
boundaries, such as the law against anti-unionism, they can be transgressed
only with damaging effects. Either way, knowledge of labor laws is elemental
in competent and effective management of people.
The same competence is expected of union leaders. Responsible and
effective unionism is remote where knowledge of and respect for labor laws are
deficient or absent.
xiii
If this book, despite its shortcomings, would contribute a bit to the labor
education of the people or to the success of students and managers, then all the
efforts it demanded would have been well spent. In the process I certainly tried
to write simply and clearly — learning from the style of great essayists (Adler,
Bernas, Heilbroner, Russell, etc.) — because I was mindful of the counsel of
Justice Learned Hand: “The language of the law must not be foreign to the ears
of those who are to obey it.”
Up to this point you have been reading the preface of this book’s 2006
edition. I have adopted it for this 2007 edition because while the changes here
are important, they are few and far between.
Articles 213 to 216 about the NLRC have been amended by R.A. No. 9347
which lapsed into law in July 2006. The other new matters are gists of recent
and significant Supreme Court rulings such as those about manpower service
cooperatives doing labor-only contracting, about primacy of voluntary arbitration,
and about dismissal of an employee for having married a co-employee.
Also reflected here are the fresh changes made by R.A. No. 9481
(strengthening of labor federations) and by R.A. No. 9492 (about the so-called
“holiday economics”).
As last-minute update, we appended the just-released DOLE Circular about
contractor cooperatives.
The rest of the changes are mostly sentence and diction improvements. The
book is careful about what it says and how it is said. But, very likely, imperfection
persists.
CAA
Mandaluyong City and
San Pablo City
August 3, 2007
xiv
TABLE OF CONTENTS
Preface, xii
Acronyms, xxxv
PRELIMINARY TITLE
xv
Premature Termination of Contract, 19
Three Month’s Pay Under R.A. No. 8042, 19
Seafarers as Contractual Employees, 19
Art. 18. Ban on Direct-Hiring, 19
Art. 19. Office of Emigrant Affairs, 19
Art. 20. National Seamen Board, 20
Minimum Employment Conditions, 21
Freedom to Stipulate, 22
Art. 21. Foreign Service Role and Participation, 22
Art. 22. Mandatory Remittance of Foreign Exchange Earnings, 23
Art. 23. Composition of the Boards, 23
Art. 24. Boards to Issue Rules and Collect Fees, 23
The OWWA, 24
Repatriation of Workers, 24
xvi
BOOK TWO — HUMAN RESOURCES
DEVELOPMENT
Title I — NATIONAL MANPOWER DEVELOPMENT
PROGRAM
Chapter I — NATIONAL POLICIES AND ADMINISTRATIVE
MACHINERY FOR THEIR IMPLEMENTATION................... 37
Salient Points of TESDA Law, 38
Policy, 38
Goals, 38
Powers and Functions of the Board, 38
TESDA Activities and Programs, 40
Performance Review, 43
xvii
Art. 79. When Employable, 51
Art. 80. Employment Agreement, 51
Art. 81. Eligibility for Apprenticeship, 51
xviii
Title II — WAGES
Chapter I — PRELIMINARY MATTERS ..................................................... 79
Art. 97. Definition, 79
Fair Wage for Fair Work, No Work-No Pay Principle, 80
Equal Pay for Equal Work, 80
Wage Includes Facilities or Commodities, 80
“Facilities” Distinguished from “Supplements,” 80
Art. 98. Application of Title, 81
Chapter II — MINIMUM WAGE RATES ..................................................... 83
Art. 99. Regional Minimum Wages, 83
Daily-paid or Monthly-paid, 83
Agricultural and Industrial Rates, 84
Art. 100. Prohibition Against Elimination or Diminution of Benefits, 84
Thirteenth Month Pay, 86
Tax Exemption, 86
Art. 101. Payment By Results, 87
Chapter III — PAYMENT OF WAGES ......................................................... 89
Art. 102. Forms of Payment, 89
Art. 103. Time of Payment, 90
Art. 104. Place of Payment, 90
Art. 105. Direct Payment of Wages, 90
Art. 106. Contractor or Subcontractor, 91
Employer-Employee Relationship in Contracting
Arrangement, 91
Contractor and Contracting Defined, 92
Principal’s Liability to Contractor’s Employees, 93
Labor-only Contracting, 93
Amendments by D.O. No. 10, then by D.O. No. 18-02, 94
LOC under Section 5 of D.O. No. 18-02, 95
Cooperative as Labor Contractor, 96
Former Employees as Contractors, 97
More Prohibitions Under Section 6, 97
Rights of Contractor’s Employees, 98
Art. 107. Indirect Employer, 99
Art. 108. Posting of Bond, 99
Art. 109. Solidary Liability, 99
Art. 110. Worker Preference in Case of Bankruptcy, 100
Art. 111. Attorney’s Fees, 100
xix
Art. 118. Retaliatory Measures, 104
Art. 119. False Reporting, 104
Chapter V — WAGE STUDIES, WAGE AGREEMENTS
AND WAGE DETERMINATION ........................................... 105
Art. 120. Creation of National Wages and Productivity Commission, 105
Art. 121. Powers and Functions of the Commission, 105
Art. 122. Creation of Regional Tripartite Wages and Productivity
Boards, 106
Art. 123. Wage Order, 107
Art. 124. Standards/Criteria for Minimum Wage Fixing, 108
Wage Distortion, 110
Effort to Rectify, 110
Amount of Distortion Adjustment, 111
Salary Distortion Viewed Regionally, 111
Employer-initiated Salary Restructuring, 112
Art. 125. Freedom to Bargain, 112
Art. 126. Prohibition Against Injunction, 112
Art. 127. Non-Diminution of Benefits, 112
xx
Art. 142. Contract of Domestic Service, 127
Art. 143. Minimum Wage, 127
Art. 144. Minimum Cash Wage, 128
Art. 145. Assignment to Non-Household Work, 128
Art. 146. Opportunity for Education, 128
Art. 147. Treatment of Househelpers, 128
Art. 148. Board, Lodging and Medical Attendance, 128
Art. 149. Indemnity for Unjust Termination of Services, 128
Art. 150. Service of Termination Notice, 128
Art. 151. Employment Certification, 128
Art. 152. Employment Records, 129
xxi
Cancer, 142
Employment Incidents, 142
Outings and Picnics, 142
Beneficial to Employer, 143
Dual Purpose Doctrine, 143
xxii
Art. 196. Delinquent Contributions, 159
Art. 197. Second Injuries, 160
Art. 198. Assignment of Benefits, 160
Art. 199. Earned Benefits, 160
Art. 200. Safety Devices, 160
Art. 201. Prescriptive Period, 160
Art. 202. Erroneous Payment, 160
Art. 203. Prohibition, 161
Art. 204. Exemption from Levy, Tax, etc., 161
xxiii
Chapter II — POWERS AND DUTIES ........................................................ 178
Art. 217. Jurisdiction of Labor Arbiters and the Commission, 178
Compulsory Arbitration, 179
Additional Cases, 179
Labor Arbiter’s Jurisdiction, 179
Corporate Dispute, 180
Award of Damages, 181
Issuance of Injunction, 181
Overseas Workers, 181
Venue, 181
Art. 218. Powers of the Commission, 182
Art. 219. Ocular Inspection, 184
Powers of the NLRC, 184
Rules of Procedure, 184
Suppletory Rules, 185
Injunctive Power, 185
Art. 221. Technical Rules Not Binding and Prior Resort
to Amicable Settlement, 185
Procedural Rules, 186
Dismissal of Complaint Based on Prescription, 187
Amicable Settlement, 187
Decision of Labor Arbiter, 187
Art. 222. Appearances and Fees, 188
Nonlawyer, 188
Chapter III — APPEAL ............................................................................... 191
Art. 223. Appeal, 191
Requisites for Perfection of Appeal, 192
Periods, 192
Perfection of Appeal Requires Posting of Bond
on Time, 193
Effect of Appeal from Arbiter to NLRC, 193
Issues on Appeal; Remedies, 194
Conciliation and Mediation, 194
NLRC Decision, 194
Certiorari with the CA, 194
Where to File Petition; the St. Martin Ruling, 195
Effect on NLRC’s Decision, 195
Certified True Copy of NLRC Decision, 195
Findings of Facts, Final, 195
Exceptions, 196
Art. 224. Execution of Decisions, Orders, or Awards, 196
Execution, 197
Injunction Against NLRC from a Regular Court, 197
Third Party Claim Under the NLRC Rules of 2005, 198
Art. 225. Contempt Powers of the Secretary of Labor, 198
xxiv
Art. 227. Compromise Agreements, 200
Compromise; Release and Quitclaim, 201
Art. 228. [Repealed by BP Blg. 130] Indorsement of Cases
to Labor Arbiters, 202
Art. 229. Issuance of Subpoenas, 202
Art. 230. Appointment of Bureau Personnel, 202
Art. 231. Registry of Unions and File of Collective Agreements, 202
Art. 232. Prohibition on Certification Election, 203
Art. 233. Privileged Communication, 203
xxv
Chapter III — RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS....... 227
Art. 242. Rights of Legitimate Labor Organizations, 227
Authority of the Union, 228
Union Registration, Unclear, 228
Union Merger or Consolidation, 229
Art. 242-A. Reportorial Requirements, 229
Title V — COVERAGE
Art. 243. Coverage and Employees’ Right to Self-Organization, 233
Art. 244. Right of Employees in the Public Service, 233
Government Employees; “C.N.A.,” 234
Art. 245. Ineligibility of Managerial Employees to Join any Labor
Organization; Right of Supervisory Employees, 235
Art. 245-A. Effect of Inclusion as Members of Employees outside
the Bargaining Unit, 235
Supervisors and Managers, 235
Segregation, 236
Confidential Employees, 236
Security Guards, 237
Coop Members, 238
International Organization, 238
Religious Objectors, 238
Art. 246. Non-abridgment of Right to Self-Organization, 238
xxvi
U.L.P. By Labor Organization, 252
Featherbedding, 252
“Sweetheart Contract,” 253
xxvii
Failure of Election, 274
Certification Election Different from Union Election, 275
Art. 258. When an Employer may File Petition, 275
Art. 258-A. Employer as Bystander, 275
Art. 259. Appeal from Certification Election Orders, 275
Appeal, 276
xxviii
Chapter IV — PENALTIES FOR VIOLATION ............................................ 309
Art. 272. Penalties, 309
xxix
Forfeiture Benefits, 337
Demotion; Quota, 337
Dismissal not Affected by Acquittal, 337
Constructive Dismissal, 337
Art. 283. Closure of Establishment and Reduction of Personnel, 338
Authorized Causes, 338
Automation, 338
Redundancy, 339
Retrenchment, 339
Standards of Retrenchment, 340
Illegal Retrenchment, 340
Criteria; Whom to Retrench, 340
LIFO Rule, 341
Closure or Cessation, 341
Other Cases of Cessation, 342
Sale in Good Faith, Obligations of Transferee, 342
Sale in Bad Faith, 343
Merger, 343
Art. 284. Disease as Ground for Termination, 343
Consequences of Termination; Reinstatement, 344
Strained Relations may Bar Reinstatement, 345
Reinstatement Immediately Executory, 345
Backwages: Illegal Terminations, 346
No More Backwages in Terminations without Due
Process, 347
Separation Pay/Financial Assistance, 347
Damages, 348
Liability, 348
Art. 285. Termination By Employee, 349
Art. 286. When Employment Not Deemed Terminated, 349
xxx
Title III — TRANSITORY AND FINAL PROVISIONS
Art. 293. Application of Law Enacted Prior to this Code, 360
Art. 294. Secretary of Labor to Initiate Integration of Maternity
Leave Benefits, 360
Art. 295. Funding of the Overseas Employment Development
Board and the National Seamen Board, 360
Art. 296. Termination of the Workmen’s Compensation Program, 360
Art. 297. Continuation of Insurance Policies and Indemnity Bonds, 361
Art. 298. Abolition of the Court of Industrial Relations and
the National Labor Relations Commission, 361
Art. 299. Disposition of Pending Cases, 361
Art. 300. Personnel Whose Services are Terminated, 362
Art. 301. Separability Provision, 362
Art. 302. Repealing Clause, 362
Part II: RULES IMPLEMENTING
THE LABOR CODE
xxxi
Rule VII. Learners, 446
Rule VIII. Handicapped Workers, 448
xxxii
Rule XX. Penalties, 522
Rule XXI. Implementing Provision, 523
xxxiii
IMPLEMENTING RULES OF BOOK VII
APPENDICES
xxxiv
ACRONYMS
xxxv
ILS Institute for Labor Studies
KMP Kilusang Magbubukid ng Pilipinas
KMU Kilusang Mayo Uno
LACC Labor Advisory and Consultative Council
LMLC Lakas Manggagawa Labor Center
MOLE Ministry of Labor and Employment
NAFLU National Association of Free Labor Unions
NATU National Association of Trade Unions
NCMB National Conciliation and Mediation Board
NLRB National Labor Relations Board (U.S.)
NLRC National Labor Relations Commission
NWPC National Wages and Productivity Commission
PAVA Philippine Association on Voluntary Arbitration
PHILCONTU Philippine Congress of Trade Unions
PIRS Philippine Industrial Relations Society
PMAP Personnel Management Association of the Philippines
POEA Philippine Overseas Employment Administration
PISTON Pagkakaisa ng mga Samahan ng Tsuper at Operator
Nationwide
PSLMC Public Sector Labor-Management Council
PTGWO Philippine Transport and General Workers Organization
RA Republic Act
RTWPB Regional Tripartite Wages and Productivity Board
SPFL Southern Philippines Labor Federation
SSS Social Security System
TESDA Technical Education and Skills Development Authority
TUCP Trade Union Congress of the Philippines
UP-SOLAIR University of the Philippines School of Labor and Industrial
Relations
VIMCONTU Visayas Mindanao Confederation of Trade Unions
xxxvi