nao Se NNN BEEN ATENEO CENTRAL R OPERATIONS 2018 x ATENEO DE MANILA L®A UNIVERSITY eee 10) eee eee aeATENEO CENTRAL JOSE MARIA G, HOFILERA ean ULY K. GRUBA ‘Assccate Dean for Contnang Legal Educaton and Bar Review Orecior GIOVANNI F, VALLENTE ‘Associate Desn fr Student Afar JORGE ALFONSO C. MELO fa Review Exec Common : LEILA S. LIM fr Revie Secretaet EQR THE CENTRAL BAR OPERATIONS PATRICK EDWARD |. BALISONG MARGARITA LOUISE 0, MASANGKAY MIGUEL ALBERTO. PESUENA KATRINA Y. COSCOLLUELA _SEVERINO MIGUEL 8. SANCHEZ ARRIENE YVETTE RASE Cent Bar Operator Coma Ba Operanene ‘Carl Sar Operator ‘nameiorovon Heete enters ede a ence MARLON J. MANUEL RYAN JEREMIAH D. QUAN LABOR LAW Faculty Advisers IVY LOU F. FLORES ANTONIO KARLO A. NOGUERA {LABOR LAW Suyect Heads JONATHAN VICTOR 8. NOEL JOHN STEPHEN B. PANGILINAN Conta Ba: Operavans Academes Unaerstiien CZARINE MICHAELLA Y. PLEYTO MA. REGINE B, CALLUENG (LABOR LAW Undersudien REZIENE ESTEBAN PATTY IGNACIO ANGEL PEREZ KAY CHAN CARL MONDEJAR GIO AGUILA FRANCES SIAPNO- PATRICIA IGNACIO ZOE RODRIGUEZ CHESKA CONSUN4JI LABOR LAW VoluneersTable of Contents |. FUNDAMENTAL PRINCIPLES AND POLICIES. A. LEGAL BASIS... B. 1987 CONSTITUTION .. 1. Article li: State Policies 2. Article Ill: Bill Of Rights. 3. Article Xill: Social Justice And Human Rights. C. ARTICLES 1700 TO 1703, CIVIL CODE Nl. RECRUITMENT AND PLACEMENT. A. ILLEGAL RECRUITMENT. 1, Elements 2. Prohibited Activities. 3. Types of Illegal Recruitment 4. legal recruitment versus estafa 5. Liability of Local Recruitment and Foreign Employer b) Theory of Imputed Knowledgs 6. Termination of contract of migrant worker without just or val 7. Ban on direct hiring.. B. REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES. 1. Suspension or cancellation of license or authority 2, Regulatory and Visitorial powers of the DOLE secretary 3, Prohibited activities. I, LABOR STANDARDS ‘A. CONDITIONS OF EMPLOYMENT. a) Principles in Determining Hours Worked b) Normal Hours of Work (1) Compressed Work Week (CWW) (2) Power interruptions/brownouts .. RERBBBBS SeIIaaaReSosouu aenasad c) Meal Break. 2 4d) Waiting Time 3 e) Night Shift Differential 5 f) Overtime Work... 6 9) Rest Periods 8 3. Holiday Pay, 13" Month Pay. ‘1 4, Service Charg 34 B. WAGES... 36 4, Wage versus salary.. 6 2. Payment of wages 38 3. Facilities versus supplement: 40 4, Non-diminution of benefits a1 5. Prohibitions regarding wage 42 6. Wage Order, Wage Distortion. a) General concepts. C. LEAVES 1. Service Incentive Leave ..2. Maternity Leave 3. Paternity Lea arental Leave for solo parer 5. Special Leaves for women workers (Magna Carta for Women and Anti-Violence against Women and their Children Act of 2004)... D. SPECIAL GROUPS OF EMPLOYEES... 1. Women .. a) Discrimination. 3. Kasambahay Law 4, Homeworkers... 5. Night workers. 6. Migrant workers. a) Claims for comper 7. Apprentices and learners. 8, Disabled workers. a) Equal opportunity. b) Discrimination on employment. ¢) Incentives for employers. IV. POST-EMPLOYMENT........ ‘A. EMPLOYER-EMPLOYEE 4. Tests To Determine Employer-Employee Relationship nnn 2. Kinds of Employment............ 3. Subcontracting versus Labor-Only Contracting c) Solidary liability... 8. TERMINATION OF EMPLOYMENT ©. TERMINATION BY EMPLOYEE. 1, Resignation versus Constructive dismissal . D. TERMINATION BY EMPLOYER... 1. Just Causes.. 2. Authorized Causes 3. Due Process... a) Twin-notice requirement b) Hearing; Ample opportunity to be hear E, RELIEFS FOR ILLEGAL DISMISSAL F. PREVENTIVE SUSPENSION. G. RETIREMENT ‘A. DISCIPLINE, B. TRANSFER OF EMPLOYEE. C. PRODUCTIVITY STANDARD.. SRR ARP PRP Pe € € £ EEE EE. E.G ee eR NNN ee ee oe ee Ue ee ee ee ee ee oe Ak 8 ‘tls Wie Ses SeG. FOST-EMPLOYMENT BAN VI. SOCIAL WELFARE LEGISLATION. ‘A. SOCIAL SECURITY ACT OF 1997 (RA 8282) 1. Coverage and Exclusions 2, Dependent, beneficiaries 3. Benefits... B. GOVERNMENT SERVICE INSURANCE ACT OF 1997(RA 8291). 1. Coverage and Exclusions 2. Dependent, beneficiaries 3. Benefits... C. EMPLOYEES COMPENSATION - COVERAGE AND WHEN COMPENSABLI Vil. LABOR RELATIONS. A. RIGHT TO SELF-ORGANIZATION 2. Commingling/ Mixture Of Membership 3. Registration and Cancellation of Labor Organization: 4. Rights And Conditions Of Membership. a) Nature Of Relationship (1) Member - Labor Union... (2) Labor Union-Federatior (i) Disaffiliation.. (i) Substitutionary B, BARGAINING UNIT. C. BARGAINING REPRESENTATIVI 1. Determination of representation status D. RIGHTS OF LABOR ORGANIZATION.. 1. Check Off, Assessment 2. COLLECTIVE BARGAINING. b) Collective Bargaining Agrec (1) Mandatory Provisions of the CBA... E. UNFAIR LABOR PRACTICE... 1, Nature and Aspects. 2. ULP By Employers .. 3. ULP By Labor Organizations. F, PEACEFUL CONCERTED ACTIVITIES 2. By Employer ‘a) Lockout. 3. Assumption of Jurisdiction a) Nature b) Effects of Assumption of Jurisdiction Vill. JURISDICTION AND REMEDIES. ‘A. LABOR ARBITER... 1. Jurisdiction..a) Versus Regional Director. 103, 2. Requirements To Perfect Appeal To NLRC 104 3. Reinstatement Pending Appeal 08 B. NATIONAL LABOR RELATIONS COMMISSION (NLRC) 07 4. Jurisdiction or €. COURT OF APPEALS. red 41. Rule 65, Rules of Cour D. SUPREME COURT.. 1. Conciliation, Mediation 2, Preventive Mediatior G. DOLE REGIONAL DIRECTORS. 1, Recovery/Adjudicatory Power. H, DOLE SECRETARY... 1. Visitorial and enforcement powers. 2. Power to suspend effects of termina 3. Remedies .. 2, Remedies .. J. PRESCRIPTION OF ACTIONS. 1. Money claims. 2. Megal dismissal... 3. Unfair labor practic 4. Mlegal Recruitment 5. Offenses under the Labor Cod PREVIOUS BAR QUESTIONSATENEO CENTRAL, BAR OPERATIONS 2018 LABOR LAW | FUNDAMENTAL PRINCIPLES AND eceee POLICIES 8, 1987 Constitution PIC OO THe US 1. Article i: State Policies ‘A. Legal Basis 8. 1987 Constitution 1. Article it, Sections 9, 49, 2. Article il, Sections 4, 3. Article Xit, Sections Sec. 9. The Stale shall promote a just and dynamic social order that will ensure the prosperity ‘and independence of the nation and free the Pecple from poverty through policies that provide ‘adequate social services, promote full & Articles 170010 1703 ‘employment, a rising standard of living, and an improved quality of ite for all ‘See. 10. The State shall promote social stice in al phases of national development See. 18, The Stave affirms labor as a primary ‘Social economic force. it shall protect the rights of workers and promote their welfare, ‘See. 20. The State recognizes the indispensable tole of the private sector, encourages private enterprise, and provides incentives to needed investments, Social Justice . Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the hhumanization 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. (Colalang v. Wiliams, G.R. No. 47800, 1940) Welfare stato bused on social justice The welfare state concept is found in the constitutional clause on the promotion of social justice to ensure the well-being and economic Security of all the people, and in the pledge of Protection to labor with specific authority to regulate the relations between landowners. and tenants and between labor and capital. (Alalayan . National Power Corp., G.R. No. L-24396, 1968) . Limitations of Social Justice Social justice should be used only to correct an injustice. It must be founded on the recognition of the necessity of interdependence among diverse Units of @ sociely, and of the protection that should be equally and evenly extended to all groups as a PAGE 1 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 ieee eee combined force in our social and economic life. (Agabon v. NLRC, G.R. No. 158693, 2604) Social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate he penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not €@ rascel claiming an undeserved privilege. Social justice cannot be permitted to be a refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. (Tirazona v. Philippine EDS Techno-Service, G.R. ‘No. 169712, 2009) Laissez-Faire not fully embraced by the Constitution 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 cr relied on pure market forces to govern the economy. (Employers Confederation v. NWPC, GR. No, 96169, 1991) Balancing of interests Itis high time that employer and employee cease to view each other as adversaries and instead recognize that theirs is a symbiotic relationship, wherein they must rely’on each other to ensure the ‘success of the business. When they consider only their own self-interests, and when they act only with their own benefit in mind, both parties suffer from short-sighedness, falling to realize that they both Fave a stake in the business. The employer wants the business to succeed, considering the investment that has been made. ‘The employee in tum, also wants the business to succeed, as continued employment means living, and the chance to better one’s lot in fife. It is ‘lear then that they both have the same goal, even if the benefit that results may be greater for one party than the other. If this becomes a source of conflict, there are various, more amicable means of setting disputes and of balancing interests that do not add fuel to the fire, and instead open avenues for understanding and cooperation between the employer and the employee. (Toyota Motor Phils. Comp Workers Ass'n. v. NLRC, GR. No 158786, 2007) LABOR LAW . Article ll. Bill OF Rights ‘Sec, 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall ‘any person’ve denied the equal protection of the laws. Due process Under the Labor Code, the requitements for the lavtul dismissal of an employee by his employer are two-fold: the substantive and the procedural. Not only must the dismissal be for a valid or authorized cause as provided by law, but the rudimentary requirements of due process, basic to which are that an opportunity to be heard and to defend oneself must be observed before an ‘employee may be dismissed. (Metro Eye Security v. Salsona, G.R. No, 167367, 2007) To constitute valid dismissal from employment, two requisites must concur: (1) the dismissal must be for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard and to defend himself. (Nacague v. Sulpicio Lines, G.R. No. 172589, 2010) Labor as Property Right One's employment is @ property right, and the wrongful interference therewith is an actionable wrong. The right is considered to be property ‘within the protection of the constitutional guarantee of due process of law. (Texon Mig. v. Millena, G.R. No. 141380, 2004) ‘Sec. 4. No law shall be passed abridging the freedom of speech, of expression, o of the press, (or the right of the people peaceably to assemble and peiition the government for redress of grievances. Wearing armbands and putting up placards to express one's views without violating the rights of 3 parties are legel_per se and even constitutionally protected. (Bascon v. CA, G.R. No. 144899, 2004) Sec. 8. The right of the people, including those ‘employed in the public and private sectors. to form unions, associations, or societies for purposes not contrary to law shail not be abridged. PAGE 2 OF 283ATENEO CENTRAL LABOR LAW BAR OPERATIONS 2018 Sec. 16. All persons shall have the right to 8 ‘speedy disposition oftheir cases before all judicial ‘quasi-judicial, or administrative bodies. ‘Sec. 18(2). No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shali have been duly convicted. 3. Article Xi: Social Justice And Human Rights Sec. 2, The promotion of social justice shall include the commitment to create economic ‘opportunities based on freedom of initiative and self-reliance. 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 self- ‘organization, collective bargaining and negotiations, and peaceful concerted activites, including the right to strike in accordance with law. They shall be entiled to security of tenure, humane conditions of work, and a living wage. ‘They shall also participate in policy and decision- making processes affecting their rights and benefits as may be provided by law. ‘The State shall promote the frinciple of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including corciliation, 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, ‘Sec 13, The State shall establish a special agency for disabled person for their rehabilitation, self- development, and self-reliance, and their integration into the mainstream of society ‘Sec. 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation. Management prerogative See giscussion in Part V. Seven basic rights of workers guaranteed by the Constitution: (WHOSE-CD) 1. To participate in policy and Decision-making processes affecting their rights and benefits as may be provided by law 2. Toreceive a living Wage To conduct Collective bargaining or negotiation with management To work under Humane conditions, Right to Organize To enjoy Security of tenure To Engage in peaceful concerted activities, including strike in accordance with law Rights Guaranteed by the Labor Code ‘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 right of workers to self- ‘organization, collective bargaining, security of tenure, and just and humane conditions of work. (Labor Code, Art. 3) ‘The constitutional policy to provide full protection to labor is not meant to be 2 sword to oppress, ‘employers. The commitment of this Court to the ‘cause of labor does not prevent us from sustaining the employer when it is in the right. (Sarocam v. Interorient Marine, G.R. No. 167813, 2006) Principle of Co-Determination Refers to the right of workers to participate in the policy and decision making processes directly affecting heir rights and benefits, without intruding into matters pertaining to management prerogative. (PAL v. NLRC, G.R. No. 85985, 1993) PAGE 3 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW LL C. Articles 1700 to 1703, Civil Code ‘end of topic Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts ‘are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages. working conditions, hours of labor ‘and similar subjects. Article 1701. Neither capital nor labor shall act ‘oppressively against the other, or impair the interest or convenience of the public. ‘Art. 1702. In case of doubt, all labor legislation and all tabor contracts shall be construed in favor of the safety and decent living for the laborer Article 1703. No contract which practically ‘amounts to involuntary servitude, under any guise whatsoever, shall be valid. Construction in favor of labor; limitations ‘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. (Labor Code, Art. 4) tis construed in favor of labor if there is 8 doubt as to the meaning of the legal and contractual provision. {f the provision is clear and unambiguous, it must be applied in accordance with its express terms. (MERALSO v. NLRC, G.R. No. 78763, 1989) ‘The law also racognizes that management has Tights, which are elso entitled to respect and ‘enforcement in the interest of fair play. (St. Luke's v NLRC, G.R. No. 162053, 2007) While labor laws should be construed liberally in favor of labor, we must be able to balance this with the equally important right of the [employer] to due process. (Gagui. Dejero, G.R. No. 196036, 2013) Hf doubts exist between the evidence presented by the employer and the employee, the scale of justice must be tited in favor of the latter (Dreamland Hote! Resort v. Johnson, G.R. No. 191455, 2014) PAGE 4 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 Nl. RECRUITMENT AND PLACEMENT Toric oun THE S} ‘A. legal recruitment (Labor Code and R.A. No, 8042 or the Migrant Workers and Overseas Filipino Act of 1985, as amended by RA. No, 10022) 1. Elements 2. Prohibited activities (Article 34, Labor Code) 3. Types of illegal recruitment 4, Mlegal recruitment versus estata 5. Liability of Local recruitment and Foreign employer (a) Solidary lability {b) Theory of imputed knowledge 6 Termination of contract of migrant ‘worker without just or valid cause 7. Ban on direct hiring B. Regulation of Recruitment anc Placement Activities : 4. Suspension or cancellation of license ‘or authority 2. Regulatory and visitorial powers of the Department of Labor and Employment (DOLE) Secretary 3. Prohibited activities LABOR LAW ALILLEGAL RECRUITMENT Worker — refers to any member of the labor force, whether employed or unemployed. (Labor Code, Art. 13f@)). ‘Overseas Filipino - Dependents of migrant workers and other Filipino nationals abroad who are in distress as mentioned in Sections 24 and 26 ‘of the Migrant Workers Act. (R.A. No, 8042, Sec. ie) ‘Overseas Filipino Worker ~ is a person who is to bbe engaged, is engaged or has been engaged in ‘a remunerated activity in a state of which he or she is not a citizen or on board a vessel ravigating the foreign seas other than a government ship used for miltary or non-commercial purposes or on an installation located offshore or on the high seas; to be used interchangeably with migrant worker. (R.A. No, 8042, Sec. 2a}! Overseas Filipino Private 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. (Labor Code, Art. 13{¢}) 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 employees. (Labor Code, Art. 13{e]) License v, Authority Poss License - means 2 document issued by the DOLE authorizing 2 personventity to operate a private fee- charging employment agency. EUin ‘Authority ~ means a document issued by | the DOLE authorizing 2. personvassociation to engage in recruitment and | placement actives | asa __private | recruitment entity PAGE 5 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW — Private Employment Agency v. Private Recruitment Entity G7 PRIVATE Pe es Caan Ete “Private employment | “Private recruitment agency” means any | entity" means any personi entity engaged | person/essociation | in the recruitment and | engagea inthe | placement of workers | recruitment and |for a fee which is | placement of workers, charged, cirectly or | locally or overseas, indirectly, from the | without charging, workers, employers, or | directly or indirectly, both. any fee from the | workers, or employers | Requires alicense. | Requires an J authority (abor Code, Art. 13) Recruitment and Placement is any act of (CETCHUP-CRAP) + Canvassing Enlisting Transporting Gontracting Hiring Utiizing, or Procuring workers and includes: ~ Contract of services Reterrats ‘Advertising for employment Bromising for employment locally or abroad, whether for profit or not, (Labor Code, Art 13) ‘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. (Labor Code. Af. 13[b)) ‘The number of persons dealt with is not the basis, in determinirg whether or not an act constitutes recruitment and placement. The proviso about “two or more persons” merely lays down a rule of evidence: where fee is collected because of a promise or offer of employment to two 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. Also, profit is not necessary to constitute recruitment. (People v. Panis, G.R. No. L-58674-77, 1966) Acts of referral The act of referral, which is incluced in recruitment, is "the act of passing along or forwarding of an applicant for employment after an initial interview of a selected applicant for employment to a selected employer, placement officer or bureau." (Rodolfo vs. Peopie, G.R. No. 146964, 2006) Promising employment Promising employment 28 factory workers and receiving money allegedly for processing papers without authorization or license is engaging in unlawful recruitment and placement activities. The absence of the necessary license or authority renders all of accused-appellant’s recruitment activities criminal. (Labor Code, Ax. 13(b)) (People vs. Saulo, G.R. No. 125903, 2000) Perfection of employment contract gives rise to legal recruitment The commencement of the employment relationship must be treated separately from the perfection of an employment contract. The perfection of the contrect, which (as 6 general rule) coincides with the date of execution, occurred when the parties agreed on the object and the ‘cause, and the terms and conditions. Despite the non-deployment (which caused the _non- commencement of the employment relationship), rights have arisen based on the perfected contract. (C.F. Sharp v. Pioneer insurance, G.R. No. 179469, 2012) PAGE 6 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 ILLEGAL RECRUITMENT UNDER THE LABOR mee 38) vs. MIGRANT WORKERS ACT Any recruitment activities, including the prohibited practices enumerated under Art, 34 of the Labor Code, to be undertaken by nonvlicensees or Ron-holders of authority, shall be deemed illegal = Punishable under Art. 39. (Labor Code, At ‘The Department of Labor and Employment or any lew enforcement officer may initiate complaints. (Labor Code, art. 38) ‘Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers ‘and includes referring, contract services, Promising or advertising for employment abroad, whether for profit or not, when undertaken by hondicensee or non-holder of authority contemplated under the Labor Code. (RA. No. 8042, Sec. 6) pympnt| ar [AI legal Re 1. Any ae Megal Recruitment (Art. 38) ‘Any recruitment activity including Prohibited Acts under Art. 34 committed by nondicensees or | 2. non-holders of authority. Elements: 1. That the offender has no valid license or authority required by law to enable one to lawully engage in recruitment and placement of workers; and, That the offender undertakes either any activity within the meaning of recruitment and placement defined under Article 13(b), or eny of the prohibited Practices enumerated under Article 34 Add (DEI a b non-holders of authority; OR Prohibited Acts (same as Art. 34 of LC) committed by any person, whether a non-licensee, non-holder, licensee or holder of authority. LABOR LAW Policy of Selective Deployment The State shall allow the deployment of overseas, Filipino workers only in countries winere the rights of Filipino migrant workers are protected ‘The government recognizes any of the following {8 a guarantee on the part of the receiving country for the protection of the rights of overseas Fitipino workers: ‘8, Ithas existing labor and social laws protecting the rights of workers including migrant workers; Wt is a signatory to andlor a ralifier of multilateral conventions, declarations or fesolutions relating to the protection of workers, including migrant workers; and Wt has concluded a bilateral agreement or arrangement with the goverment on the protection of the rights of overseas Filipino Workers: Provided, That the receiving country is taking positive, concrete measures to protect the rights of migrant workers in furtherance of any of the guarantees under subparagraphs (2), (b) and (c) hereof. (RA. No, 8042, Sec. 3) CEERI Oca. Es fecruitment (Sec. 6): recruitment activty committed by non-licensees / fed the following in the ist of Prohibited Acts MIL-RETSI): Fail to actually Deploy Without valid reason; Fail to reimburse Expenses incurred by the worker in connection with his/her documentation and Processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault To allow a non-Filipino citizen to head or Manage 2 licensed recruitmentmanning agency Grant a loan to an OFW with Interest exceeding 8% er annum, to be used for payment of legal and allowable placement fees and make the OFW issue postdated checks in relation to the said loan; Impose @ compulsory and eyclusive arrangement whereby an OFW is required to aval of a Loan only from specifically designated institutions, entities or |ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW Reluse to condone or renegotiete a loan insurred by an OFW after the latter's emoloyment contract has been prematurely terminated through no fault of his or | her own, g. Impose a compulsory and Exclusive arrangement | whereby an OFW is required to undergo health examinations only from specically designated medical clinics. institutions, entities or persons, (except in the case of a seafarer whose medical exam ‘cost is shouldered by the principal ship-owner); Impose a compulsory and exclusive arrangement whereby an OFW is required to undergo Training, | ‘seminar, instruction oF schooling of any kind only from specifically designated institutions, entities or persons, except for recommendatory trainings | ‘mandated by principals! ship owners where the latter shoulder the cost of such trainings i. For a Suspended recruitment/manning agency to engage in any kind of recrutment activity including the processing of pending workers’ applications; i. For a recruitment manning agency of a foreign principal’ employer to pass on the OFW or deduct from his or her salary the payment of the cost of Insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage. K Nonticensee | NonHolder of authority is any person, corporation oor ie ras vay a mcane | THe offender may be 9 nondlicensee or a non-holder of —— engage in| authority and commits any of the acts of recruitment; OR recrumment end placement by the | 9g holder of auth mits. any of the Secretary of Labor, or whose Hease | titted act under seton © RA 804, aun, | or authority has been suspended, | P as z ae revoked or cancelled by the POEA or | the Secretary. PAGE 8 OF 283,ATENEO CENTRAL : BAR OPERATIONS 2018 SF 4. Elements The essential elements of illegal recruitment vary in accordance with the following classifications: 1. Simple ilegal recruitment + Local workers + Migrant workers When committed by @ syndicate; o Wren ccmmitted in large scale. Simple Illegal Recruitment for Local Workers (Labor Code) 1. The person charged with the crime must have undertaken recruitment activities: a. Defined under Art. 13 (b) or b. Prohibited activties defined under Art. 34; and 2. The said person does not have a license or authority to do $0. (Labor Code, Art. 38) Profit or Lack Thereof - Immaterial Itis the lack of the necessary license or authority, lot the fact of payment that renders the recruitment activity of the agency unlawful. (C.F. ‘Sharp vs. Espanol, G.R. No. 155903, 2007) Accused must give the impression of ability to ‘send complainant abroad it must be shown that the accused gave complainants the distinct impression that she had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money 'n order to be employed. (People v. Ochoa, G.R. No. 173792, 2011) ‘Simple Illegal Recruitment for Migrant Workers. (R.A. No. 8042, as amended by R.A. No. 10022) First type of Illegal Recruitment: 4. Person charged undertakes any recruitment ‘activity as defined in Art.13 (b) of the Labor Code; and 2. Said person does not have a license or authority to do so. ‘Second type of Iilegal Recruitment: 1 Person charged commits any of the ‘enumerated acts under Sec. 6 of R.A, 8042, as amended by, R.A. No. 10022. Itis immaterial whether he is a holder or not of any license or authority. LABOR LAW Megal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilzing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or nol, when undertaken by non-licensee cr rnon-holder of authority contemplated under Article 13(f) of the Labor Code; Provided, That any such non-licensee 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. (R.A. No. 6042, Sec. 9) legal recruitment by a syndicate 4, The offender undertakes either any activity within the meaning of ‘recruitment and placement” defined under Art. 13(b), or any of the prohibited practices enumerated under ‘Art, 34 of the Labor Code; 2, He has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and 3. The illegal recruitment is committed by a group of three (3) or more persons ‘conspiring or confederating with one another. (People v. Gallo, G.R. No. 187730, 2010) egal recruitment in large scale 1. The accused engages in acts of recruitment land placement of workers defined under Art. 13(b) of the Labor Code or in any prohibited activities under Art. 34 of the Labor Code; 2. The accused has not complied with the guidelines issued by tne Secretary of Labor ‘and Employment, particularly with respect to the securing of license or en authority to recruit ‘and deploy workers, either locally or overseas; and 3. The accused commits the unlawful acts against three or more persons individually or as 2 group. Note: Syndicate - count the conspirators Large scale - count tne victims PAGE 9 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW Doctrines: Illegal Recruitment Where illegal recruitment 's proved but the elements of “large scale” or “syndicate” are absent, the accused can be convicted only of “simple illegal recruitment". (People v. Balegan ‘and Avila, G.R. No. 183099, 2010) ‘These categories are separate or independent ‘categories. If there is only one complainant in several complaints, there is no ilegal recruitment in large scale. But where there are three conspiring recruiters, there is illegal recruitment by 8 syndicate. (People v. Fernandez, et. al., G.R. No. 141221-36, 2002) Appellant's acts, which were clearly described in the lucid testimonies of the three victims, such as callecting from each of the complainents payment for passport, medical tests, placement fee, plane tickets and other sundry’ expenses, promising them employment abroad, contracting and advertising for employment, constitute acts of large scale illegal recruitment. (People v. Diaz, GR. to, 112175, 1996) 2. Prohibited Activities: Prerrnes It shall be unlawtul for any individual, entity, licensee, or holder of authority: 1. 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. of to make a worker pay any amount greater than that actually received by him as a loan or advance; To fumish or publish any false notice or information or document in relation to recruitment or employment; To give any false notice, testimony, information or document or commit any act of risrepresentation for the purpose of securing a license or authority under this Code. 4. To induce or attempt to induce @ worker already employed to quit his employment in order to offer him to another uniess the transfer is designed to liberate the worker trom oppressive terms and conditions of PAGE 10 Receipt of payments, aftor the expiration of the license, for services rendered before said expiration does not constitute egal recruitment. Recruitment refers to the offering of inducements to qualified personnel to enter a particular job oF ‘employment. The advertising, the promise of future employment and other come-ons took place while the recruter was stil icensed. The payments are necessary in order to defray the expenses entailed in any overseas contract of employment. They are intended for administrative and business ‘expenses and for ine traveling expenses of the applicants once cleared for overseas travel (Aquino v. CA, G.R. No. 91896, 1991) Itis not the issuance or signing of receipts for the placement fees that makes a case for illegal fecruitment, but rather the undertaking of recruitment activities without the necessary license or authority. (People v. Senoron, G.R. No. 119160, 1997) By themselves, procuring a passport, airline tickets and foreign visa for another individual, ‘without more, can hardly qualify 38 recruitment activities. IR must be proved beyond reasonable doubt. (Darvin v. CA, G.R. No. 125044, 1998) RA 8042 ~ OVERSEAS FILIPINOS AND CSW anens tam erst h i Wegal recruitment. shall likewise include the following acts, whether commited by any person, ‘whether a nonicensee, non-holder, licensee or heder of authority (SHOW-FROGIN-OISC) Substituting or altering COLE-approved ‘employment contracts 2. Recruiting workers in jobs that are Harmful to public health or morality ofthe Philippines Becoming an Officer or member of the Board of a travel agency of to be engaged directly or | indirectly in the management of a travel agency Withholding or denying travel documents from applicant workers before departure for unauthorized =— monetary or financial | considerations 5. Eumishing or publishing any false notice or information or document in relation to | recruitment or employment | 6. In case of nondeployment, failing to | Reimburse expenses incurred by the worker in OF 283+ « eeeee ee eee aaa al a a a a aATENEO CENTRAL BAR OPERATIONS 2018 _ LABOR LAW 5. To influence or to attempt to influence any person or entity not to employ any worker who hhas not applied for employment through his agency, 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; representatives; To fail to file reports on the status o| 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. 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, 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 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. (Labor Code, Art, 34; PERT/CPM Manpower ¥. Vinuya, G.R. No. 197528, 2012) 10. " To obstruct or attempt to obstruct inspection by | the Secretary of Labor or by his duly authorized | Tonnection with his documentation and processing for purposes of deployment Qbstructing or attempting to obstruct inspection by the Secretary of Labor or by his duly authorized representatives | ‘Giving 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 Inducing or attempting to induce a worker to | Quit his employment in place of another UNLESS the transfer is designed to liberate the | worker from oppressive terms and conditions | of employment Allowing a Non-ilipino citizen to head or manage a licensed recruitmentimanning agency Failing to actually Deploy without valid reason as determined by DOLE. Influencing or attempting to influence any person or entity not to employ any worker who has not applied for employment through his agency Foling 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 | Charging or accepting, directiy 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 10. "1 12 13, 1. {In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit | the following prohibited acts: (8-LR?A2)) | Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) pe~ annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through @ guarantor or accommodation party. postdated checks in relation to the said loan; Impose @ compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a Loan only from | specifically designated institutions, entities o: | PAGE 11 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW ee _LAsor ta Differences Between Prohibited Acts: non-icensee (Labor Code, Art. 34) Wf the recruiter is licensed, t may commit a prohibited activity (Labor Code, Art. 38) or Cod ‘Art. 34 vs. Migrant Workers Act, Sec. 6 es SLA Illegal recruitment may only be committed by 2 * Reluse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been ‘Prematurely terminated through no fault of his ‘or her ows; For a suspended recruitmenUmanning agency 10 engage in any kind of Recruitment activity including the processing of pending workers’ | ‘applications Impose a compulsory and exclusive Arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated ‘medical clinics, institutions, entities or persons, ‘except in the case of a seafarer whose medical examination cost is shouldered by the Principalishipowner, Impose 2 compulsory and exclusive Arrangement whereby an overseas Filipino ‘worker is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except for recommendatory trainings ‘mandated by principals/shipowners where the latter shoulder the cost of such trainings: and For a recruitmenmanning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from his or her salary the payment ‘of the cost of Insurance fees, premium or other insurance related charges, as provided under the | compulsory worker's insurance coverage. ‘Committed by either licensee or nonlcensee (R.A No. 8042, Sec. 6) ‘17 enumerated acts PAGE 14 enumerated acis considered as ‘recruitment, including the f + Failure to actually deploy a contracted worker without valid reason, Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in case of non-deployment; To allow a non-Filipino citizen to head of manage @ licensed recruitmentmanning | | agency, | Plus, 7 addtional p:oh 1208 283 egal | ited acts.ATENEO CENTRAL BAR OPERATIONS 2018 re ere eee semee, 3. Types of illegal Recruitment Two Kinds of lilegal Recruiters (1) Non-Licensee or Non-Holder of Authority The offender commits: * Any of the acts defined in An, 13(b) of the Labor Code as recruitment and placement, * Illegal recruitment as defined in 1, Sec. 6 of R.A. No. 8042, or amended; or + Any of the 14 acts erumerated in Sec. 6 of R.A. No, 8042, as amended (2) Licensed Recruiter or Holder of Authority The offender commits any of the 14 wrongful acts enumerated in Sec. 6 of RA. No. 8042, as ‘amended (Sto, Tomas v. Salac, G.R. No, 152642, 2012) Kinds of illegal Recruitment (a) Simple illegal Recruitment Megal recruitment committed by @ person who is neither a licensee nor a holder of authority; (b) Illegal Recruitment as Economic Sabotage Megal recruitment when commited: + By a syndicate; or + Intarge scale, shall be considered an offense involving economic. sabotage. (R.A. No. 10022, Sec. 5{ml) Mlegal Recruitment shall be considered an offense involving economic sabotage if any oi the following qualifying circumstances exist: nN Tm roars Pees RECRUITMENT COMMITTED BY . COMMITTEDIN Barns LARGE SCALE Carried out by a group | Committed against 3 of 3 or more persons | or more persons conspiring and/or | individually or as a confederating with | group ‘one another in camying out any unlawful or legal transaction, enterprise |or scheme falling legal under recruitment LABOR LAW 4. legal recruitment versus estafa oa) is ae Itis malum prohibitum | Itis malum in se The criminal intent of | The criminal intent is | the accused is not | imperative i Cory Penalized under the | Revised Penal Code _| Wider in scope and covers deceits whether related or not | related to recruitment activities J Labor Code Limited in scope Note: Conviction under the Labor Code for ilegal recruitment does not preclude punishment under the RPC for estafa (People v. Fernandez, G.R. No 199271, 2014) ‘A worker who suffers pecuniary damage, regardless of arrount, as a result of previous or simultaneous false pretense resorted to by a non- licensee or non-holder of authority, may complain of estafa under Art. 315, par. 2(a) of the RPC, aside from illegal recruitment. (People v. Femandez, G.R. Nos. 141221-36, 2902) + Estafa is committed by any person who etrauds another by using fictitious name, or falsely pretends to possess power, influence uaitications, property, credit, agency, business or imaginary transactions, or by ‘means of similar daceits executed prior to or simuttaneously with the commission of the fraud. (Revised Penal Code, Art, 315) + The offended party must have relied on the false pretense, fraudulent act or fraudulent means of the accused-appellant and as a result thereof, the offended party suffered damages. PAGE 13 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW — 5, Liability of Local Recruitment Agency and Foreign Employer Venue of Criminal Action ‘The complainant, may, at his option, fle at the RIC of the province or aly ‘+ Where the offense was committed; or ‘+ Where the offended party resides at the time of the commission of the offense (R.A. No 8042, Sec. 9) Prescriptive Period Err Po a Ess ‘Within 5 years from | Wilhin - ne time the legal | the time the legal recruitment happened _| recruitment happened ‘When maximum penalty is imposed: + Ifthe person illegally recruited is less than 18 years of age: or + If committed by a nonlicensee or non-holder ‘of authority (RA. No. 8042, Sec. 7) Local Recruitment Agency The persons criminally liable are the principals, ‘accomplices and accessories. In case of juridical Persons, the officers having ownership, control, management or direction of their business who are responsible for the commission of the offense and the responsible employees/agents thereot shall be liable. (RA 8042, as amended, Section 6) + Local Recruitment Agency is solidaily liable with foreign principal. (IRR >f the Labor Code, Book i, Rule V, Sec. 17) + Severarce of relations between local agent and foreign principal does not affect liability of local recruiter. Where the workers themselves insisted for the recruitment agency to send them back to their foreign emplover despite their knowledge of its inabilty to pay their wages, the Supreme Court absolved the agency from lability (Feagle Construction Corp. v. Dorado, GR. No, 86042, 1991) Foreign Employer In case of a final and executory judgement against 2 foreign employer/principal, it shall be automatically disqualified, without further Proceedings, from participating in the POEA Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgement award. (R.A. No. 8042, Sec. 10) a) Solidary Liability The liability of the principaemployer and the recruitmentiplacement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition Precedent for ts approval. (R.A No. 6042, as amended, Sec. 10) + Even if the recriter and the principal had already severed their agency agreement at the time employee was injured, the recruiter may stil be sued for a violation of the ‘employment contract because no notice of the ‘agency agreement's termination was given to the employee. +The obligations covenianted in the recruitment agreement entered into by and between the local agent and its foreign principal are not coterminous with the term of such agreement 50 that if either or both ofthe parties decide to fend the agreement, the responstbilties of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the ‘expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. (Catan v. NLRC, G.R. No. 77279, 1986) Purpose of Solidary Liability ‘The agency agreement with the principal even if ‘ended as between them, stil extends up to and uni the expiration of, the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. (OSM Shioping Phil, Inc. v. NLRC, G.R. No. 138193, 2003) PAGE 14 OF 283,BQeaeaeuweaeweewetYteerel” ATENEO CENTRAL BAR OPERATIONS 2018 — 'b) Theory of imputed Knowledge [This theory means) knowledge of the agent is knowledge of the principal. (New Life v. CA, G.R. No. 94071, 1992) For the liability of the agent to attach, this theory states that the agent knew of and consented to the extension of period of employment. Otherwise, the liability of the Tecruitment agency shall expire from the termination of the worker's original contract. (Sunace International Management v. NLRC, G.R. No. 161757, 2006, Carpio Moreles, J. as seen in Veloso’ answers to the 2011 Bar Examination) Posting of Cash Bond by Recruiter ‘The requirement for the posting of a cash bund is also an indispensable requirement. By Posting such, the agency undertakes to ‘assume joint and solidary liability with the ‘employer for ali claims ard liabilities which may arise in connection with the implementation of the overseas employment contract and to guarantee compliance with ‘existing Philippine labor laws and the laws of ‘country of employment. 1e peculiar nature of overseas employment makes it very difficult for the Filipino overseas worker to effectively go afler his foreign employer for employment-elated claims and, hence, public policy dictates that the recruitment or placement agency in the Philippines be made to share in the employer's responsibility. (Capricom Travel & Tours v. CA, G.R. No. 91096, April 3, 1990) The surety bondis intended to insure that ifthe rights of overseas workers are violated by their employers, recourse would stil be available against the local companies that recruited them for the foreign principal. (Stronghold Insurance Co. v. CA, G.R. No. 88050, 1992) LABOR LAW 6, Termination of Contract of Migrant Worker Without Just or Valid Cause Under the Migrant Workers’ Act ‘A worker dismissed from overseas employment without just, valid or authorized ccuse as defined by law or contract, is entitled to a, Full reimbursement of the placement fee with interest at 12% per annum PLUS b. His salary for unexpired portion of his employment contract OR salary for 3 months for every year of the unexpired term, WHICHEVER IS LESSER. (RA. No, 8042, Sec. 10) Rule before Serrano (1995-2009): 3-month salary rule + The employment contract involved inthe instant case covers a two-year period but the overseas contract worker actually worked for only 26 days prior 10 his ilegal dismissal Thus, the three months’ salary rule applies. (Flourish Maritime Shipping v. Almanzor, G.R. ‘No. 177948, 2008) Rule after Serrano (2009-present): it invalidated the 3-month salary cap clause ‘+ Full reimbursement of the placement fee with interest at 12% per annum. This decision held that Sec. 10 of 8042, which limited the separation pay to three months, was unconstitutional for violating the equal Protection clause. (Serrano v. Gallant, G.R. No. 167614, 2009) ‘+ Despite the fact that the clause “or for three (3) months for every year of the unexpired term, whichever is less” was reinstated in R.A 8042 ‘upon promulgation of R.A. 10022 in 2010, the Supreme Court reiterated its finding in Serrano v. Gallant Maritime that limiting wages that could be recovered by an legally dismissed overseas worker to three months is both a violation of due Process and the equal protection clauses of the Constitution, (Sameer Overseas Placement Agency v. Cabiles, G.R. 170139, 2014) PAGE 15 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 av ee leaial 7. Ban on Direct hiring General Rule: No employer may hire Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor ceptions: Members of the diplomatic corps, International organizations and ‘Such other employers as may be alowed by the Secretary of Labor is exempted from this provision, (Labor Code, Art. 18) Name hirees — those individuals who are able to secure contracts for overseas employment ‘on their own efforts and representation without the assistance or participation of any agency. Their hiring, nonetheless, has to be processed through the POEA (Part Il, Rule iil of the POEA Rules Governing Overseas. E:mployment as amended in 2002) Ex 1 2 3 Seance Can Ds Bees i Ta Imprisonment of not | Life impnsonment | eas than 12 years and | AND | tay bu not more than | 20 years | ANo LABOR LAW Employers cannot directly hire workers for ‘overseas employment EXCEPT through authorized entities. (See below) The reason for the ban is to ensure full regulation of employment in order to avoid exploitation, Entities Authorized To Engage In Recruitment And Placement 1. Public employment offices 2. Philippine Overseas ‘Administration (POEA) Prwvate recruitment entities Private employment agencies Shipping or manning agents representatives Such other persons or entities as may be authorized by the DOLE Secretary ‘Construction contractors Employment 3 4 5. or ‘Summary of Penalties and Prescriptive Periods CLC Pm | imprisonment of not | Automatic revocation of the | ess than 6 years and 1 | teense or registration of | day but not more than | the recruitment’ manning | 12 years agency, lending insttutions, training schools or medical clini. holder of authority | PAGE ih sale ae > OF not less than | Fine of not Wess than | Fine of not less than hor more than | P2M nor more than | PSM nor more than PSM [Pm | MAXIMUM PENALTY | ALIEN 7 7 | + if person iegally + Deportation without | recruited is fess need for | than 18 years old, proceedings, or + it commited ty | nonlicensee /non- 16 0F 283,ATENEO CENTRAL BAR OPERATIONS 2018 ‘B.REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES 1. Suspension or Cancellation of License or Authority Power to suspend or cancel any license or authority to recruit employees for overseas ‘employment is concurrently vested with the POEA and the Secretary of Labor. (Labor Code, Art. 35) ‘The Secretary of Labor has the power, under Art. 35 of the Code, to apply the sanctions, as well as the authority, conferred by Art. 36, not only to restrict and regulate the recruitment and placement activities of al agencies, but also to promulgate rules and regulations to carry out the objectives and implement the provisions governing said activities. Pursuant to this rule-making power thus granted, the Secretary of Labor gave the POEA on its own initiative or upon filing of a complaint or report or ‘upon request for investigation by any aggrieved person, (authority to) conduct the necessary proceedings for the suspension or cancellation of the license or authority of any agency’ or entity for certain enumerated offenses including: 1. The imposition or acceptance, directly or indirectly, of any amount of money, goods or services, or any fee or bond in excess of what is prescribed by the Administration. 2. Any other violation of pertinent provisions of the Labor Code and other relevant laws, rules and regulations. The Administrator was also given the power to order the dismissal of the case or the suspension ‘of the license or authority of the respondent agency or contractor or recommend to the Secretary the cancellation thereof. (Eastem Assurance’ Surety Corp. v. Secretary of Labor, GR. No. L-79436-50, 1990) LABOR LAW ‘Termination/ Ban On Deployment Notwithstanding the provisions of Section 4 of R.A. No, 8042, as amended by R.A. No. 10022, in pursuit of the national interest or when public; welfare so requires, the POEA Governing Board, after consultation with the Department of Foreign ‘Affairs, may, at any time, terminate or impose a ‘ban on the deployment of migrant workers. (RA No. 10022, Sec. 5) Under Section 4 of R.A. No. 8042, as amended by Section 3 of R.A. No, 10022, itis provided that the State shail allow the deployment of overseas Filipino workers only in countries where the rights, of Filipino migrant workers are protected. The government recognizes any of the ‘ollowing as a guarantee on the part of the receiving country for the protection of the rights of overseas Filipino workers: (a) Ithas existing tabor and social laws protecting the rights of workers, including migrant workers; (0) It is a signatory to and/or a ratifier of multilateral conventions, dectarations or resolutions relating to the protection of workers, including migrant workers; and (@) It has concluded a bilateral agreement or arrangement with the government on the protection of the rights of overseas Filipino Workers: Provided, That the receiving country is taking positive, concrete measures to protect the rights of, migrant workers in furtherance of any of the guarantees under subparagraphs (a), (b) and (c) hereof. In the absence of a clear showing that any of the aforementioned guarantees exists in the country of destination of the migrant workers, no permit for deployment shall be issued by the POEA. (R.A. No. 8642, Sec. 4) PAGE 17 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW 2. Regulatory and Visitorlal Powers of the DOLE Secretary Regulatory & Rule-Making Powers The Secretary of Labor shall have the power to fesirict 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 ‘o carry out the objectives and implement the Provisions ofthis Title. (Labor Code, Art. 36) Visitorial Powers ‘The Secretary of Labor or his ouly authorized Fepresentatives 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 regulasty on prescribed forms, and ‘act on violations of any provisions of this Title. (Labor Code, Art. 37) In Salazar vs. Achacoso, G.R. No. 81510, 1990, the SC ruled that Af. 36 of the LC is Unconstitutional and that the Secretary of Labor and Employment cannot issue a warrant of arest. DOLE Secretary does not have the power to issue search warrants and warrants of arrest. (Salazar v, Achacoso, G.R. No. 81510, 1990) 3, Prohibited Activities ‘See above discussion on Page 10. Jurisdiction of the POEA Original and exclusive jurisdiction to hear and decide: ‘a. All cases, which are administrative in character, involving or arising out of violations of rules and regulations relating ‘0 licensing ‘and registration of recruitment and ‘employment agencies or entities b. Disciplinary action cases and other special cases, which are administrative in character involving employers, principals, contracting partners and Filipino migrant workers (IRR of RA. no, 8042, Rule X, Sec. 6) Outside of POEA Jurisdiction 2. Foreign Judgment - POEA has no juriscition to hear and decide a claim for enforcement of a foreign judgment (Pacific Asia Overseas v. NLRC, G.R No. 76595, 1988) b. Torts — Fall under the provisions of the Civil Code (Mckenzie v. Cui G.R. No. 48831, 1989) Remittance of Foreign Exchange Earnings 't shall be mandatory for all Flipinc workers abroad to remit a portion of thei foreign earnings to their families, dependents, and/or beneficiaries in the country, (Labor Code, Art. 22) ‘Amount required to be remitted (E.0. No. 857) ‘The amount of one's salary required tobe remitted depends on the type or nature of work Performed by the employee. Percentages. of foreign exchange remittance ‘equired from various kinds of migrant workers: 1. Seaman or mariner - 80% of basic salary 2. Workers for Filipino contractors and ‘construction companies ~ 70% 3. Doctors, engineers, teachers, nurses and cother professional workers. whose contract provide for free board and lodging - 70% 4. All other professional workers whose employment contracts do not provide for free board and lodging factties - 50% 5. Domestic and other service workers — 50% 6. AN other workers not falling under the aforementioned categories ~ 50% 7. Performing artists ~ 50% Individuals exempted from the mandatory remittance requirement: 4. The immediate family members, dependents cr beneficiaries of migrant workers esiding with the latter abroad; 2. Filipina servicemen working within US military installations; 3. Immigrants and Filipino professionals working with the United Nations and ts agencies or other specialized bodies. 4. Missiogaries. actualy engaged in missionary work 5. Allaliens qranted exemption by speciat laws ‘and all those whose employment in the Phil determined by the Secretary of Labor to be beneficial to national interest. —— end of topic PAGE 18 OF 283 — 26 Ot Oe a ee et ek ee ok ess edSoudbiuuasiuuuiuwuwbiwubwwaweaeuuegeseusstHeunaitnaeuauws*,. a B ap a BR Pp ao ATENEO CENTRAL . BAR OPERATIONS 2018 LABOR LAW it, LABOR STANDARDS. hae ae ees amended ‘TOPIC OUTLINE UNDER THE SYLLABUS (0) Clalma fr compere oe Arorkerelated death, sickness, oF A. Condtons of employment 1. Appanoan and lene cope 2 Dinablad Workers 2. Hours of work a) Principles in determining hours worked b) Normal hours of work (1) Compressed work week (2) Power Interruptions / Brownouts ©) Meal Break 4) Waiting Time ¢) Overtime 4) Night Shit Differential 9) Rest Periods hy Holiday pay 3. Holiday pay; 13° month pay 4. Service Charge B. Wages Wage versus salary Payment of wages Facilities versus supplements Non-diminution of benefits Prohibitions regarding wages Wage order Wage Distortion 2) General Concepts see eepe Service Incentive Leave Maternity Leave Paternity Leave Parental Leave for solo parents (RA. No. 8972) ‘Special Leaves for women workers. (RA. No. 9710 or the Magna Carta for Women, and R.A. No. $261 oF the AntiViolence against Women and their Children Act of 2004) D. Special Groups of Employees 4. Women a) Discrimination bb) Stipulation against marriage ) Prohibited acts d) Sexual Harassment 2. Minors (R.A. No. 7610, as amended by R.A. No. 9231) 3. Kasambahay Law (R.A. No. 10361) 4, Homeworkers. 5. Night workers 6. the Migrant Workers and Overseas PAGE 19 OF 283 (2) Equal opportunity (6) Discrimination on employment (c) Incentives for employersATENEO CENTRAL, BAR OPERATIONS 2018 A CONDITIONS OF EMPLOYMENT 1. Scope Book Il of the Labor Cade provides the conditions OF Standards of employment, These standards apply only if an employer-ernployee ‘elationsh (EER) exist. merer 2 Excluded Employees (Go-Mak-FiFa-DoPe) @ Government employees. b. Managerial employees (2) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereot. (b) They customarily and regularly direct the Work of two or more employees therein, (C) 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, (IRR Labor Code, Book il, Rule |, Sec. 1) ©. Field Personnel Non-agricutural employees who regularly erform 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 Feasonable certainty) (Autobus Transport v. Bautista, G.R. No. 156367, 2005) d. Members of the Family of the employer who are dependent on him for support e. Domestic Helpers ‘The mere fact that the househelper or domestic servant is working within the premises of the business of the employer and in relation to or in connection with its business, 2 in its staff houses for its guest or even for its officers and employees, warrants. the Conclusion that such househelper or domestic Servant is and should be considered as a regular employee of the employer and not as @ mere family househelper or domestic servant. (Apex Mining Company v. NLRC, GR No 94951. 1991) LABOR LAW f. Persons in the personal service of another 9: Workers who are paid by Results 2. Hours of Work (a) Principles in Determining Hours: Worked nn ian os et worked which the employee is required to give to his eryployer, regardless of whether or not such hours’ are ‘spent in productive labor or involve physical or mental exertion pao pe 2. An employee need not leave the pre the workplace in order that his rest period shall ‘not be counted, it being enough thai he stops working, may rest completely and may leave his workplace. 3. 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 ime spent or such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor. 4. The time during which an employee is inactive by reason of interruptions in his work ‘beyond his control shall be considered working time. either it a. The imminence of the resumption of work. Fequires the employee's presence at the Place of work; or 'b. The interval is too bref to be utilized effectively and gainfully in the employee's ‘own interest. (IRR of Labor Code, Sec. 4, Book lil, Rule |) Considered as Compensable Hours Worked 1. Alltime during which an employee is required to be on duly oF to be at the employer's Premises or lobe at a prescribed work place: Al time during which an employee is suffered (oF permitted to work; and 3. Rest periods of short duration during working hours. (Philiopine Airines v. NLRC, G.R. No. 132608, 1999), PAGE 200 283 5BpBuwueuwuwuvuuwuuwuibuwueuuwtewvbagaentiwueeeteuaets 44 SD a a Buu Uo ATENEO CENTRAL BAR OPERATIONS 2018 6) Normal Hours of Work General Rule: The normal hours of work of any ‘employee shall not exceed eight (8) hours 2 day. (Labor Code, Art. 83) Partsime work, or a day's work of less than 8 hours, is not prohibited (Legend Hotel v. Realuyo, GR. No, 153511, 2012) Purpose of the Law To protect the health of the workers. ‘The law is designed to minimize unemployment by forcing employers, in case where more than eight- hour operation is necessary, to uliize different Shifts of laborers or employees working only for eight hours each. (Manila Terminal Company v. CIR, G.R. No. L-4148, 1952). Exception to 8-Hour Law: Work Hours of Health Personnel Health Personnel in: Cities and municipalities with a population of atleast one milion (1,000,000) or b. Hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a ‘dey, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require thal such personnel work for six (6) days. or forty- ‘eight (48) hours WORK DAY 24-hour period ‘commencing from the time an employee regularly starts to work USN 24-hour period commencing at 12 midnight and ending at 11:59 p.m, | | regardiess of whether the work is broken or continuous. LABOR LAW (1) Compressed Work Week (CWW) Department Order No. 21-90/ DOLE Advisory No. 2-09 and No. 02-04 Resorted to by the employer to prevent serious losses due to causes beyond his contra (Le. when there is substantia slump in demand for his goods ‘and services or when there is lack of raw materials). (DOLE Explanatory Bulletin, July 23, 1985) Under this scheme, the number of workdays is reduced, but the number of work hours in @ day is increased to more than eight (8), but no overtime pay may be claimed. Thus, a CWW scheme is an. alternative arrangement wherein the normal workweek is reduced to less than six (6) days but the total number of normal work hours per week shall remain at 48 hours. (Azucena Vol. |, 9” ed. p. 265). Conditions for implementation of the CWW (DOLE Department Advisory No. 02 Series of 2004) a. The scheme is expressly and voluntarily Supported by majority of employees affected; . In firms using substances, or operating in conditions that are hazardous to health, a certification is needed from an accredited safety organization or the firm's safety committee that work beyond eight (8) hours is ‘within the limits or levels of exposure set by DOLE's occupational safely and health standards; and 1G. The DOLE Regional Office is duly notified, Effects of a CWW Scheme: 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 nol exceed twelve (12) hours. In any case, any -work performed beyond 12 hours a day or 48 hours a week shall be subject to overtime premium. b. Consistent with Articles 85 of the Labor Code, ‘employees under a CWW scheme are entitled to meal periods of not less than sixty (60) minutes. Nothing herein shall impair the right ‘of employees lo rest days as well as to holiday pay. rest day pays or leaves in accordance PAGE 21 OF 283ATENEO CENTRAL LABOR LAW BAR OPERATIONS 2018 with law or applicable collective bargaining ‘agreement or company practice. c. Adoption of the CWW scheme shall in no case result in diminution of existing benefits Reversion to the normal eight-hour workday shall not constitute 2 diminution of benefits The reveision shall be considered a legitimate exercise of management prerogative, provided that the employer shall give the employees prior notice of such reversion within a reasonable period of time. Health Personnel in Hospitals and Clinics Hospital and clinic personne! can start and end ‘work at any hour on any day but would not work for more than 8 hours in a day, nor more thar: 40 hours in one week. Hospital and clinic personnel may be scheduled to work for more than 5 days or 40 hours in a week, if they are paid overtime, (+ at least 30% regular rate}, (Labor Code, Art. 3) (2) Power interruptions/Brownout Brownouts not exceeding twenty (20) minutes shall be treated as hours worked. Brownouts rurning for more than twenty (20) minutes may not be treated as hours worked provided thal any of the following conditions are present ‘a. The employees can leave their work place oF go elsewhere whether within or without the work premises; or b. The employees can use the time effectively for their own interest. (Policy Instruction No. 36, ted in Durabuit Recapping Plant & Co. vs. NLRC, G.R. ‘No, 76746, 1987) ‘The time during which an employee is inactive by reason of work interruptions beyond his control is considered working time, either if the imminence of the resumption of work requires the employee's. presence al the place of work or ifthe interval is too brief to be utlized effectively and gainfully in the employee's own interest. (IRR Labor Code, Sec. 4{d], Rule 1, Book i) c) Meal Break General Rule: Meal periods are NOT compensable. Exceptions: 4, Where the lunch period or meal time is predominantly spent for the employer's benefit; 2. Meal periods of 1hour are deemed compensable when the is on continuous shift (National Devt Corp v. CIR, G.R. No. 15422, 1962) 3. Shortened meal period of less than 1 hour ‘must be compensable (IRR Labor Code, Book Mi, Rule 1, Sec. 7) Meal period of not less than 20 minutes in the following cases are compensable hours worked: a. Where the work is non-manual work in nature or does not involve strenuous physical exertion; b. Where the establishment requiarly operates not less than 16 hours a day: c. Incase 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 Note: To shorten meal time to less than 20 minutes is not allowed. If itis less than 20 minvtes, it becomes only a REST PERIOD and is ‘considered working time (Labor Code, Art. 84, $12) If standby is for emergency work, meal break is part of hours worked. (Pan-American World Airways. System Philippines v. Pan-American Employees Association G.R. No.L-16275, 1961) PAGE 22 OF 283, Ce oe ee aehous tinauadetenannltetensedsttinadsl wseaeweweuwewenweweweewesewehlemlUcermlerelcaerel elles eel el ATENEO CENTRAL BAR OPERATIONS 2018 ee Exception to the exception: Shortened meal S upon the employee's request are NOT compensable, provided tat 1. The employees voluntarily agree in writing to 8 shortened meal period of 30 minutes and are willing to waive the overtime pay for such shortened meal pariod; There wil be no diminution whatsoever in the Salary and other fringe benefits of the ‘employees existing before the effectivity of the shortened meal period; ‘The work of the employees does not involve Strenuious physical exertion and they are Provided with adequate “coffee breaks" in the morning and aftemoon, The value of the benefits derived by the employees from the proposed work arrangementis equal to or commensurate with the compensation due them for the shortened ‘meal period as well as the overtime pay for 30 minutes as determined by the employees concerned: 5. The overtime pay of the employees will ‘become due and demandable i ever they are Permitted of made beyond 4:30pm; and 6. The effectivity of the proposed working time arrangement shall be of temporary duration as determined by the Secretary of Labor (2004 BWC Manual on Labor Standards). Note: For a full cne (1) hour undisturbed lunch break, the employees can freely and effectively use this hour nt only for eating but also for their rest and comfort. Since the smployees are no longer required to work during this ‘hour lunch break, there is no more need for them to be compensated for this period. (Sime Darby Pilpinas v. NLRC, G.R. No. 119205, 1998) LABOR LAW $$ 8) Waiting Time Whether waiting time constitutes working time depends upon the circumstances of each Particular case. The facts may show that the employee was engaged to wait or may show that the waited to be engaged The controlling factor i's whether waiting time spent in idleness is spent predominantly for the employer's benefit, oF the employee's (Azucena Vol. |, 9 00, p. 234). ‘A laborer need not leave the premises of the factory, shop of boat in order that his period of rest shall not be counted, it being enough that he “cease to work", may rest completely and leave or may leave at tis will the spot where he actualy stays while working, to go somewhere else, whether within or outside the premises of said factory, shop or boat. If these requisites are ‘comnplied with, the period of such rest shall not be counted. (Luzon Stevedoring v. Luzon Marine Department Union, GR. No. L-9265, 1957) Waiting time spent by an employee shall be ‘considered as working time it: 1, Waiting is an integral part of his work; or 2. The employee is required or engaged by the employer to wait. (IRR Labor Code, Sec. 5(a), Rule 1, Book il) When Employee is Considered Working while ‘on call - When employe 1, Is required to remain on call in the employer's ‘Premises or so close thereto; or 2. Cannot use the time effectively and gainfully for his own purpose (IRR Labor Code, Sec. 5[b], Rule 1, Book ill) PAGE 23 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW ere eet ree Travel Time So cs ‘Normal travel from home to work which 1s not work time part ‘General Rule: NOT compensable because | itis a normal incident of employment Exceptions: ‘Where employee made to work onan | ‘emergency call and travel is necessary |.” In proceeding to the workplace. Travel is done through @ conveyance provided by the employer s Travel Is done under the supervision and control of the employer Travel is done under vexing and dangerous circumstances ie Sry) Time spent by en ‘employee in travel as setivity, from jobsite to jobsite uring the workday | Counted worked "| Cémpensable pee MoU Travel that keeps an employee | away from home overnight of his principal | lke avel | Work time when it cuts across an | employee's workday. 1t substitutes for the hours the ‘employee should have been in the offce is hours ‘The fact that [petitioner Rada] picks up employees at certain specified points in EDSA in going to the project site ard drops them off at the same time on hhis way back from the field office going home to Marikina Is not merely incidental to his job as a driver. Said transportation arrangement had been adopted not so much for the convenience cf the employees, but primarily for the benefit cf the employer. Since the assigned task of fetching and delivering employees is indispensable and consequently mandatory, then the time required of ‘and used by petitioner in going from his residence to the field office and back should be paid as ‘overtime work. (Reda v. NLRC, G.R. No. 96078, 1992) Si ing Time Whether sleeping time allowed an employee will be considered as part of his. working time will depend upon the express or implied agreement of the partes, In the absence of an agreement, it will depend upon the nature of the service and its relation to the working time. When Sleeping is Considered Working Time Coa an eT Pech an eat oh Wf sleeping time is | If there an opportunity subject to serious| for comparatively interruption, or takes | uninterrupted sleep place under conditions | under fairly desirable substantially less | conditions desirable than would be likely to exist at the ‘employee's hom = (Azucena Vol.1, ed, p. 233) Lectures, Meeting, Trainings, Programs General Rule: Considered working time Exception: NOT considered working time if the following conditions are met: 1. Attendance is outside of the employee’ regular working hours. ‘Attendance is voluntary The employee does not perform any productive work during such attendance. (IRR Labor Code, Sec. 6, Book i, Rule 1) 2. a PAGE 24 OF 283einen aaa ae ae ee ee ee ee ee ee ATENEO CENTRAL BAR OPERATIONS 2018 et a ee Pence nvr CC . A Rete 1. Attendance — in 1. Attendance in lectures, meetings, | hearings in cases filed IAC training periods by the ee Senetoned™ bythe |2. Pariipaton in employer strikes 2, Attendance in CBA negotiations. or grievance meetin ‘Semestral break of teachers is compensable hours Worked for itis a form of interruption beyond their control. Applies only for regular fulltime teachers.(University of Pangasinan Faculty Union v. Univ. of Pangasinan, G.R. 64821-23, 1993). ¢) Night Shift Differentiat Night Worker: . Any employed person whose work requires Performance of a substantial number of hours of night work which exceed a specified limit. This imit shall be fixed by the Secretary of Labor after ‘consulting the workers’ representatives/iabor ‘organizations and employers. (Labor Code, Art 154, 88 amended by R.A. No. 10151) ‘Any employed person whose work covers the period from 10 o'clock in the evening to 6 o'clock the following moming, provided that the worker performs no less than 7 consecutive hours of work. (IRR Labor Code, Sec. 2, Rule Xv, Book I!) Night Shift Differential, defined (R.A. 10151) Definition: Every employee shall be paid a night ‘shift differential of not less than 10% of his regular ‘wage for each hour of work performed between ten o'clock in the evening (10 pm) and six o'clock in the morning (6 am). Coverage: This benefit applies to ALL employees EXCEPT: (Go-FR-PMS) 1. Government employees, whether employed bby the Notional Government or any of its poltical subdivisions, including those ‘employed in government-owned and/or controlled corporations with original charters or created under special laws; LABOR LAW 2, Those of Retail and service establishments regularly employing not more than five (5) workers; 3. Househelpers. and persons in the Bersonat service of another; 4, Managerial employees, i they meet all of the following conditions: a. Their primary duty is to manage the establishment in which they are employed oF of a department or subdivision thereof b. They customarily and regularly direct the work of two or more employees therein; and They have the authority to hire or fire other employees of lower rank, or their suggestions and recommendations 3s to hiring, fing, and promotion, or any other change of status of other employees are siven particular weight 5. Officers or members of a managerial Staff, if they perform the following duties and responsibilities: a. Primarily perform work directly related to ‘management policies of their employer, b. Customary “and regulary exercise discretion and independent judgment; © (a) Regularly and directly assist a proprietor or managerial employee in the Management of the establishment or subdivision thereof in which he or she is ‘employed; or (b) execute, under general supervision, work along specialized or technical lines requiring special training experience, or knowledge; oF (c) execute, under general supervision, special assignments and tasks; and 4d. Do not devote more than twenty percent (20%) oftheir hours worked in a workweek {0 activities which are not directly and closely related to the performance of the work described in paragraphs 5.1, 5.2, and 5.3 above; 6. Eleld personret and those whose time and Performance are unsupervised by the ‘employer. NSD = (10% x regular wagelhr.) x no. of hrs. of work between 10 pm—6 am work done between 10 pm and 6 am is OT work the NSD should be based on the OT rate. PAGE 25 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LA\ — 1) Overtime Work OVERTIME PAY (OT) Work exceeding eight hours within the worker's 24-hour workday. Work within the employee's stv ‘is nol overtime Coverage: Ts benefit apples to at employees EXCEPT. Government employees whether employed by the National Government 0 any ofits political Subdivisions, including those employed in government-owned andlor controlled corporations with oniginal charters or created ‘under special laws, 2. Managerial employees, if they meet ail of the folowing ‘conditions: Their primary duty is to manage the establishment in which they are employed ‘oF of a department or subdivision thereof, b. They customarily and regularly direct the work of two or more employees therein, ©. They nave the authonty to hire or fire other employees of lower rank, of their suggestions and recommendations as to hiing, firing, and promotion, or any other change of status of other employees are given part cular weight. 3. Officers or members of a managerial staff, if they perform the following duties and responsibiltves: a. Primarily perform work directly related to ‘management policies of their employer >. Customarty and regularly exercise discretion and independent judgment; ©. Duties such as: i. Regularly and directly assist 2 proprietor or managerial employee in the management of the establishment ‘or Subdivision thereof in which he or ‘she is employed: or . Execute, under general supervision, work along specialized or technical fines requinng special training, ‘experience, or knowledge; or iw Execute, under general supervision, ‘special assignments and tasks; and w. Do not devote more than twenty percent (20%) oftheir hours worked in a workweek to activities which are not Grectly and closely related 10 the Performance of the work described m paragraphs 3.1, 3.4, and 3.it above. 4. House helpers and persons in the pereonal service of another, 5. Workers who are paid by results, including those who are paid on piece rate, lakay pakyew, oF task basis, and other non-ime work, if their output rates are in accordance wth the standards prescribed in the regulations, or where such rates have been fixed by the Secretary of Labor and Employment; 6. Field personnel, if they reguiarty 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 bbe determined with reasonable certainty Overtime Pay Rates So OTONA Regular wage + et least | REGULAR DAY _| 25% thereof a] ‘OTONA Rest day or special HOLIDAYISPECIAL | holiday wage rate DAYIEMPLOYEES | (130%) + 30% thereof. REST DAY ‘OT ONAHOLIDAY | Rest day & holiday WHICH FALLS ON | wage rate (150%) + NOTE: Since OT work is considered hourly, the ‘ay rate is computed on per hour basis. The daily wage is divided by 8 to get the hourly base rate. W employee is paid on a monthly salary basis, the daily rate is obtained by the following formula: {is permissible for the employer to stipuste that the employee's monthly salary constitutes Payment for all the days of the month, including rest days and holidays, where the employee's monthly salary, when converted by the increased visor into its daily equivalent, would stil meat ‘minimum wage. (InterphilLaboratones Employees Union-FFW v. interphitL sboratones, Inc. GR’ No 142824. 2001) PAGE 26 OF 283,= an SB meHe eu ePeeeneeeweTee ew ee etCaellUmeewvhlUlcaeelaeectllaeaeaeaeel eel ele lS ATENEO CENTRAL BAR OPERATIONS 2018 Regular Wage Incluses the cash wage only, without deduction on Account of faclties provided by the employer (Bisig ng Manggagawa ng Philippine Refining Co. Philipine Refining Co., G.R. No. L-2776, 1981) NOTE: When the overtime work is performed on ‘the employee's rest day or on special days or regular holidays (Labor Code, Arts. 93-94), the ‘premium pay must be included in the computation of overtime pay (Bureau of Working Conditions, ‘on Worker's Statutory Monetary Benefits, p. 19, 2006) Conditions to be entitled to OT pay 4. Actual rerition of OT work 2. Submission of suficient proof that said work was actually performed 3. OT workis with the knowledge and consent of the employer Proof of Hours Worked Entitement to overtime pay must first be established by proof that said overtime work was actually performed, before an employee may avail of said benefit. (Lagatic v. NLRC, G.R. No. 121004, 1998) Burden of Proof: When an employer alleges that his employee works less than the normal hours of employment as provided for in the law, the ‘employer bears the burden of proving his allegation with clear and satisfactory evidence, (Prangan v. NLRC, G.R. No. 126569, 1998) Emergency OT Work General Rule: Employees cannot be compelled to render overtime work against their wil Exceptions: (P'W4M) 1. Country at WariNational or Local Emergency 2. Completion of work started before the 8" hour and is necessary to prevent serious obstruction or prejudice to the business 3. Urgent work to be performed on Machines to avoid serious loss or damage to employer 4. Necessary to Prevent loss of life/property or Imminent danger to public safety 5. Necessary to prevent loss or damage to Perishable goods 6. Necessary to avail of favorable Weather or environmental concition (Labor Code, Art 69) LABOR LAW Undertime NOT offset by OT Offsetting of undertime hours against the OT hours Whether on the same or any other day is prohibited by law. (Labor Code, Art, 88) Overtime pay does not preclude night shift differential pay ‘When the tour of duty of a laborer falls at nighttime [between 10:00pm and 6:00am), the receipt of ‘overtime pay will not preclude the right to night differential pay. The latter is payment for work done du‘ing the night while the other is payment for the excess of the regular eight-hour work. (Naric v. Naric Workers Union, G.R. No. 12075, 1959) Waiver of overtime pay Right to OT pay cannot be waived. But when the alleged waiver of OT pay is in consideration of ‘benefits and privileges, which may even exceed the OT pay, the waiver may be permitted. (Bisig Manggagawa sa Trycov. NLRC, G.R. No. 151309, 2008) In Interranz Container Lines, inc. v. Bautista, (G.R. No, 187693, 2010), the Court held that an employee may not sweepingly claim that overtime ‘work was performed and consequent payment for such work is compensable absent any evidence that overtime work was indeed performed considering that a pre-approved overtime schedule and daily time record is required before overtime pay can be claimed. While as a general rule, the parties may enter inio ‘any kind of stipulation in a contract and the same shall be considered as the law between them, however, it must be emphasized that a labor contract is not an ordinary contract since it is impressed with public interest. Thus, the parties are prohibited to enter into any stipulation which ‘may result in the reduction of any employee benefits. (Labor Code, Art. 100; Republic Planters Bank v. NLRC, G.R. 117460, 1997) The employer and the employee are not prohibited under the law to enter into an agreement for the increase of whatever benefit being mandated by law for the simple reason that any such increase Certainly redounds to the benefit of the employee, Thus, the employer and the employee may legally and validly agree to increase tke minimum PAGE 27 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW percentage provided for night differential pay, ‘overtime pay, and premium pay. (Republic Planters Bank v. NLRC, G.R. 117460, 1897) Work Hours of Seamen ‘Seamen are required to stay on board of their vessels by the very nature of their duties, and itis. for this reason that, in addition to theit regular Compensation, they are given free living quarters to be on board. It could not have been the purpose of the law to require their employers to pay them overtime pay even when they are not actually working. The correct criterion in determining Whether sailors are entitled to overtime pay is whether they actually rendered service in excess ‘of said number of hours. (Cagampan v. NLRC, GR. No. 85122-24, 1991) Composite or package pay is not per se illegal Composite or “package pay’ or “all-inclusive salary’ is an arrangement where the employee's salary includes the overtime pay. The overtime pay is “builtin” (Trans-Asia Phils, Employees Association v. NLRC, G.R. No. 118289, 1999) ‘Two coneitions for validity of such arrangement: 1) There is 2 clear written arrangement knowingly and freely entered by the employee; and 2) The mathematical result shows that the agreed legal wage rate and the overtime pay, computed separately, are equal to or higher than the separate amounts legally due (Damasco v. NLRC, G.R.No. 115755, 2000) ‘Synthesis: Overtime Rules 1) An employer cannot compel an employee to work overtime Exception: Emergency overtime work (Labor Code, Art. 89) 2) Additional compensation is demandable only if the employer had knowledge and consented tothe overtime work rendered by the employee Exception: Express approval by a superior NOT ‘a requisite to make overtime compensable: 1. If the work performed is necessary, or that it benefited the company; or 2. That the employee could not abandon his work. at the end of his eight-hour work because there was no substitute ready to take his place (Manila Railroad Co. v. CIR, G.R. No. L-4614, 1952) NOTE: The claim for overtime is not justified in the absence of a written authority to render overtime after office hours during Sundays ‘and holidays (Global Incorporate v. Atienza, G.R. No, L-51612, 1986) 3) Compensation for work rendered in excess of the 8 normal working hours a day 1. For ordinary days, additional 25% of the basic hourty rate 2. For rest dayispecial day/holiday, additional 30% of the basic hourly rato 4) A given day is considered an ordinary day, unless it is a rest day 5) Undertime does not offset overtime (Labor Code, At. 88) 9) Rest Periods Weekly Rest Periods — applies ‘o all employers whether operating for profit or not, including public tities operated by private persons, tis the duty of every employer, whether operating for profit or not, including public utilities operated by private persons, to provide each of his employees a rest period of not less than 24 ‘consecutive hours for every 6 normal work days. (Labor Code, Art. 91) 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, ‘Who Determines Weekly Rest Days The employer determines and schedules the weekly rest period subject to the following: 1. Collective Bargaining Agreement; 2, Rules and regulations issued by the Secretary of Labor, and 3. Employee's preference based on religious grounds PAGE 28 OF 263,ATENEO CENTRAL : BAR OPERATIONS 2018 LABOR LAW -_ HH 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. (Labor Code, Art. 91) The employee shall make known his preference to the employer in writing atleast seven (7) days before the desired effectivity ofthe intial rest day $0 preferred. (IRR Labor Code, Sec. 4, Rule I! Book ill) Exception: Where, the choice of the employee as to his rest ¢ay 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 ‘Schedule the weekly rest day of his choice for at least two (2) days in a month. (IRR Labor Code, Sec. 4, Rule Il, Book il) ‘Schedule of Rest Day @ Where the weekly rest is given to all ‘employees simultaneously — the employer shall make known such rest period by means cof a written notice posted conspicuously in the work place at least one week before it becomes effective ©. Where the rest period is nct 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 Employer May Require Work on Rest Day General Rule: The employer may not require the ‘employees to work on a rest day. Exceptions: (UAAP FAN) 1. In case of Urgent work to be performed on machineries, equipment or installations to ‘avoid serious loss which the employer would otherwise suffer 2, 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 of property. orn cases of force majeure or imminent danger to public safety 3. In the event of Abnormal pressure of work ‘due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures To prevent serious loss of Perishable goods When the work is necessary to avail of Favorable weather or environmental ‘conditions where performance or quality of ‘work is dependent thereon. 6 Under other Analogous or similar circumstances 7. Where the Nature of the work is such that the employees have to work continuously for 7 days in a week or more, as in the case of the crew members of a vessel to complete a voyage and in other similar cases (Labor Code, Ar. 92) ‘Other than the above circumstances, no employee shall be required against his wil to work on his scheduled rest day. When an employee volunteers to work on his rest ay under other circumstances, he shall express such desire in writing, subject to payment of ‘additional compensation. ‘An employee shall be entitled additional compensation for work performed on @ Sunday only when itis his established rest day, The falure to work during an employer's rest day {oes not justify the disciplinary sanction of outright cismissal from employment as such is so severe a Consequence, moreso when jusifiable grounds exist for said failure (Remerco Garments Manufectuing v. Minister of Labor, G.R. No. L 6176-77, 1985) Employees NOT covered Employees ercepted under Article 82 of the Labor Code are, generally, not covered by the rule on addtional compensaticn, Remuneration of employee working on a rest day ~ REGULAR REMUNERATION (100%) + PREMIUM PAY ‘additional sum of at least 30% of the regular remuneration) Note: There can be no valid waiver of ‘compensation for work done on a rest day or holiday, PAGE 29 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW ——————— __LABOR LAW Synthesis of the Rules. 1. Rest day of not ess than 24 consecutive hours after 6 consecutive days of work. 2. No work, no pay principle applies 3. If an employee works on his designated rest day, he is entitled to a premium pay. 4, Premium pay is additional 30% of the basic pay. 5. Employer selects the rest day of his employees, 6. However, employer must consider the ‘eligious reasons for the choice of a rest day. 7. When the choice of the employee as to his rest ‘day based on religious grounds will inevitatly result in serious prejudice or obstruction to the ‘operations and the employer cannot normally te expected to resort to other measures, the ‘employer may so schedule the weekly rest day ‘of his choice for zt least two days in @ month. (IRR Labor Code, Sec. 4, Book Il, Rule I) 3. Holiday Pay, 13" Month Pay Holiday Pay: Coverage; Exclusions Right to Holiday Pay Holiday pay refers to the payment of the regular dally wage for any unworked regular holiday. (Handbook on Workers’ Statutory Monetary Benefits, Bureau of Working Conditions, p. 12, 2016) Coverage: General Rule: Applies to ALL employees. Exception: 1. Government employees, whether employed by the National Government or any of its political subdivisions, including those employed in govemment-owned andlor controlled corporations with original charters or created under special laws; 2. Those o! retail and service establishments regularly employing less than ten (10) workers; 3. Househelpers and persons in the personal service of another, 4, Managerial employees, i they meet all of the following conditions: 4.1 Their primary duty is to manage the establishment in which they are PAGE 30 OF 283, employed or of a department or ‘subdivision thereof; 4.2 They customarily and regularly direct the work of two or more employees therein; 4.3 They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as 10 hiring, fring, and promotion, or any other change of status of other employees are siven particular weight 5. Officers or members of a managerial staf, if they perform the following duties and responsibliies: 5.1. Primarily pertorm work directly related to management policies of their employer; 5.2 Customary and regularly exercise discretion and independent judgment; 5.3 (a) Regularly and directly assist a Proprietor or managerial employee in the management of the establishment or subdivision thereof in which he or she is employed: or (b) execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge: or (c) execute, under general supervision, special assignments and tasks; and 5.4 Do not devote more than twenty percent (20%) 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 5.1, 5.2, and 5.3 above. 6. Field personnel and other employees whose lime 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 thereot. Regular Holidays 1. New Year's Day = Jan.1 2, Maundy Thursday - Movable Date 3. Good Friday - Movable Date 4. Araw ng Kagitingan ~ April9 5. Labor Day = May 1 8. Independence Day ~ June 12 7. Natl Heroes Day Last Mon. of Aug. 8 Bonifacio Day — Nov. 30 9. Eid al Fitr = Movable DateATENEO CENTRAL LABOR LAW anh See Ne renee BAR OPERATIONS 2018 10. Eid al Adha ~ Movable Date 11. Christmas Day - Dec. 25 12. Rizal Day = Dec. 30 Special Days 1. Ninoy Aquino Day ~ August 21 2. All Saints’ Day = Nov. 4 3. Last Day ofthe Year = Dec. 31 4. Special Non-Working Days 5 Special ube Hoidays Special National Holiday Muslim Holidays General Rule: Musiim holidays are observed only in specified areas 4. Amun Jadid (New Year) 2. Maulid un-Nabi (Birthday of the Prophet Muhammad) 3. Lailatul isra Wal Miraj (Nocturnal Journey anc the Ascencion of the Prophet Muharnmad) Exception: Eid al Fir and Eid ul Adha (Celebrated nationwide) Muslim employees working outside of the specified areas shall be excused from reporting for work during the observance of the Muslim holidays 135 recogn’zed by.law, without diminuticn of salary ‘or wages during the period. Considering that all private corporations, offices, ‘agencies, and entities or establishments operation within the designated Musim provinces and cities are required to observe Muslim holidays, both Muslims and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim Holidays, (SMC v. CA, GR. No. 146775, January 30, 2002). Successive Regular Holidays. Where there are 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 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. Double Holiday 41, W unworked ~ employee entiled to 200% of basic wage, provided he was present or on leave with pay on the preceding work day 2. If worked ~ employee entitled to 300% of basic. ‘wage. Only an employee who works on the day immediately preceding or after @ regular holiday shall be entitled to the holiday pay. A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation pay but will not entitle the employee to another vacation leave. (Asian Transmission v. CA, GR No. ‘144664, March 15, 2004) Holiday-Sunday legal holiday falling on a Sunday creates no legal obligation forthe employer to pay extra, aside from the usual holiday pay, to its monthly-paid employees. In cases temporary cessation of work Regular holidays falling within this period are compensable (Le. yearly inventory, repair or leaning of machineries or equipment, etc). However, in the case of a regular holiday during the cessation of operations due to business reverses as authorized by the Secretary of Labor, the employer may not pay the regular holidays during this period. {In cases of periodic and temporary closures, the ‘Omnibus Rules implementing the Labor Code Book 3 Rule IV Section 7 provides that in cases ‘of temporary oF periodic shutdown and temporary ‘cessation of work of an establishment, as when 2 ‘yearly inventory or when the repair of cleaning machines and equipment is undertaken, the regular holidays falling within the period shall be compensated. Teachers, Pieceworkers, Takay, Seasonal Workers, Seafarers Holiday Pay of Certain Employees: 1. Private School teachers including faculty members of college and universities - may not be paid for the regular holidays during estral_ vacations. Paid for the regular holidays during Christmas vacation (Jose Rizal College v. NLRC & NATOW, G.R. No. L 65428, 1987) 2, Employee paid by results (payment on plece-work) ~ holiday pay shall not be less than his average daily earnings for the last 7 PAGE 31 OF 283ATENEO CENTRAL, BAR OPERATIONS 2018 LABOR LAW ee 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 3: Seafarers ~ any hours of work or duty Including hours of watch keeping performed on designated rest days and holidays shall be Paid rest day or holiday Seasonal workers ~ may nol be paid the ‘required holiday pay during off-season when they are not at work Workers without regular working days — entited to the benefits, under item 4, Section 8, Rule IV of the Omnibus Rules Implementing the Labor Code. Holiday pay is a legislated benefit enacted as part Of the Constitutional imperative that the State shall afford protection to labor. ts purpose is not merely “to prevent diminution ofthe monthly income ofthe workers on acount of work interruptions. In other Words, although the worker is forced to take a rest, There is no provision of law requiring any employer to make such adjustments inthe monthly salary rate set by him to take account of legal holidays faling on Sundays in a given year, or Contrary to the legal provisions bearing on the point, otherwise to reckon a year at more than 368 days. What the law requires of employers opting {0 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 ‘welva," and to pay that selary ‘forall days in the month whether worked or not,” and "inespective of the number of working days therein.” (Wellington ¥. Trajano, GR No. 114698, 1995) Divisors The divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid employee's salary and in the computation of his daily rate. (Union of Filipro Empl. v. Vivar, Jr, G.R. No, 79255, 1992) ‘The divisor used in zrriving at an employee's daily Tate for the purpose of computing salary-related benefits is 261. From the 365 days in a year. we deduct 104 rest days which gives a total of 261 ays. Now, if 261 days is the number of ee days of the employees then, there is a dispt - Presumption that the employees are paid the holiday pay. (Producer's Bank v. NLRC, ‘No. 100701, 2001) f The 251 working days divisor is the result of subtracting all aia Sundays and the ten (10) legal holidays from the total number of calendar days in a year. If the employees are already peid for all non-working days, the divisor Should be 365 and not 251. (Chartered Bank v. Ople, GR No. L-44717, 1985) Outline of Rules on Payment of Holiday Pay ET First 8 Hours Eun NO PAY, unless there isa favorable company policy, race or CBA. granting Payment of wages on special days even if unworked PAGE 32 0F 283VU UMaine alae ae ae rear eee ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW SN EEE 13" Month Pay Governing Laws P.D. No. 851 (The 13"-month Pay Law) and the Revised Guidelines on the implementation of the 13° Month Pay Law a. Coverage ‘All employers are required to pay all their rank- and-fle employees, a 13th month pay not later than December 24 of every year, provided thal they have worked for at least 1/month during @ calendar year. bb. Exempted employers: @ Government and any of its poitical subdivisions, including GOCCs, except those corporations operating essentially as private subsidiaries of the Govemment, b. Employers already paying their employees 13th month pay or more in a calendar year or its equivalent atthe time of issuance of PD 851 + “Its equivalent” — includes Christmas bonus, mid-year bonus, cash bonuses {and other payments amounting to not less than 1/12 of the basic salary but shall not include cash and stock dividends, COLA and all other allowances regularly enjoyed by the employee as well as non-monetary benefits. ¢. Employers of household helpers and persons in the personal service of another in relation to such workers d. Employers of those who Bre paid on commission, boundary, or task besis, and those who are paid a fixed amount for performance of a specific work, inespecive of the time consumed inthe performance thereof Exception: where the workers are paid on a piece-rate basis, in which case the employer shall grant the required 13th month pay to such workers. + Piece Rate - employees who are paid 3 standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same. Computation of 13" month pay 413th Month Pay = 1/12th of the basic salary of an ‘employee within a calendar year Basic Salary INCLUDES: ‘Alle munerations or earnings paid by an employer to an employee for services rendered DOES NOT INCLUDE: 1. Cost of living allowances (COLA), 2, Profil-sharing payments and 3, All allowances and monetary benefits (¢.9. unused VL and sick leave credits, OT premium, night differential and holiday pay) which are not considered or integrated as part of the regular or basic salary of the employee. However, the above shoulc be included in the computation if by individual or collective ‘agreement, company practice or policy. Time of Payment The thiteenth-month pay shall be paid not later than December 24 of every year. An employer, however, may give to his or her employees one~ half (1/2) of the thiteenth-month pay before the opening of the regular school year and the remaining half on or before December 24 of every yor. ‘The frequency of payment ofthis monetary benefit may be the subject of an agreement between the employer and the recognizedicollective bargaining agent of the employees. 13th Month Pay for Certain Types of Employees 1. Employees paid by results - entitled to 13th month pay 2. Those with Multiple Employers - entitled to the 13th month pay from all their private ‘employers regardless of their total earings from each or al oftheir employers 3. Private School Teachers - entitled regardless ‘of the number of months they teach or are paid within a year, ifthey have rendered sarvice for atleast 1 month within a year. 13% Month Pay of Resigned or Separated Employee Employee is entitled to the benefit in proportion to the length of time he worked during the year, teckoned from the time he started working during the calendar year up to the time of his resignation ‘r termination from the service. Can be demanded by the employee upon the cessation of EER PAGE 33 OF 283ATENEO CENTRAL BAR OPERATIONS 2018. Non4nelusion in Regular Wage ‘a5 contnbutions. Security, Medicare, and ph te retirement plans. ©. Nature of 13" month pay Stalutory grant. und compliance therewith is ‘Tiandatory. The beneft is deemed writen in every Food and other material things are not substitute for 13 month pay, Proportionate 13" month pay accrues to ‘employees who worked only for a period of less than twelve months in a given year. Note: 13" month pay is a non-strike able issue. 4d. Commissions vis-a-vis 13" month pay If the commissions may be property considered Part of the basic salary — included in computing the 13% month pay Hf the commissions are not par of basic salary — excluded. tn Boie-Takeda Chemicals v. Hon. Lasema (GR No. 92174, 1993) we note that productivity bonuses are generally tied to the productivity, or capacity for revenue production, of a corporation; such bonuses closely resemble profit-sharing payments and have no clear director necessary relation to the amount of work actually done by each individual employee. More generally, a bonus is an amount granted and paid ex gratia to the employee; its payment constitutes an act of enlightened generosity and self-interest on the part of the employer, rather than as a demandable or en.orceable obligation, In Principle, where these earings and Femuneration are cosely akin to fringe benefits Overtime pay or profit-sharing payments, they 2 Property excluded in computing the 13th month Pay. However, sales commissions which are effectively an integrat portion of the basic salary structure of an employee, shall be included i Setermining his 13th month pay. (Philippine Duplicators v. NLRC, GR No. 110068, 1995) ©. CBA vis-d-vis 13" month pay Employers who are already paying their employees a 13" month pay “or its equivalent” are ot covered by the decree. Note: “Equivalent” includes: 2) Christmas bonus, mid-year bonus, cash bonuses; ~ b) and Other payments amounting to not less then 12 of the basic salary: ©) But shall not include cash and stock dividends. cost of living allowances, and all other allowances, regularly enjoyed by the employee as well as non- ‘monetary benefits (IRR P.D. 851, Sec. fo) ‘An employer is not obliged to give a 13" month ‘salary in addition to other bonuses stipulated in a CBA amounting to more than a month's pay. (See Brokenshire Memorie! Hospital inc., v. NLRC, G.R. ‘No. L-69741, 1986) 4. Service Charge Definition: Service charges are considered part of the cost of the food, goods, or services ordered by the customers. Establishments Applies only to establishments collecting service charges such as hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and similar enterprises, including those entities. ‘operating primarily as private subsidiaries of the Government, (Labor Code, Art. 96) PAGE 24 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 Tee Coverage All employees of covered employers, regardless of their poston, deslgnations or employment Status, and irrespective of the method by which their wages are paid EXCEPT to managerial employees Service Charge different from Tip Tip, not normally part of the salary, it being gwen voluntarily by the customer. Service charges are ‘considered part of the cost of the food, goods, or services ordered by the customers. Distribution 85% distributed equally among the covered employees b. 15% for the disposition by management to answer for losses and breakages and distribution to managerial employees at the discretion of the management in the latter case Distributed and paid tothe employees not less. than ‘once every 2 weeks of twice @ month at intervals not exceeding 16 days d. Supervisors share in the 15%. LC speaks of ‘management,” and not “managerial employees.” Abolition and Integration Incase the service charge is abolished, the share of the covered employees shal be integrated into their wages. (Labor Code, Art. 96) The basis of the amount to be integrated shall be the average monthly share of each employee for the pest 12 months immediately preceding the bolton of withdrawal of the cherges. (IRR Labor Code, Sec. 5, Rule VI, 800k 3) LABOR LAW In Relation to Collective Bargaining Agreements and_—_-Employer-Employee ‘Agreements 4. Nothing in the Rules shall prevent the ‘employer and employee from entering into any agreement with terms more fevorable to the employees than those granted therein, or be used to diminish any benefit granted to the ‘employees under existing laws, agreement AND voluntary employer practice. (Sec. 6, Rule VI, Book 3, IRR) 2. The rue is without prejudice to existing, future collective bargaining agreements. (Sec. 7, Rule VI, Book 3, IRR) ‘Synthesis of the Rules 1. Service charges must be pooled; 2. Where a restaurant or similar establistiment does not collect service charges but has a practice or policy of monitoring and pooling tips given voluntarily by its customers fo its employees, the pooled tips should be monitored, accounted fot and d stbuted in the ssarre manner as the services charges. (DOLE Handbook on Workers’ Statutory Monetary Benefits, 20146¢.) 3, The amount collected is divided hetween the company (15%) and employees (85%); 4. Itshallbe given twice @ month with intervals of not more than 16 days: 5. If discontinued, removed, or stopped, the average share of the employees of their service charge or tips shall be integrated with their basic wage. PAGE 35 0F 284ATENEO CENTRAL BAR OPERATIONS 7018 ‘B. WAGES 1. Wage versus salary (a) "Wage" Wages paid to any employee shall mean the: 1. Remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained Om a time, task, piece, or commission basis, or other method of calculating the same, whichis Payable by an employer to an employee under 2 wnt or unwriten contract of employment for work done or to be done, or for services Tendered or to be renaered: 2. INCLUDES, the fair and reasonable value, as determined by the DOLE Secretary, of board, lodging, or other facies customarily fumished by the employer to the employee, (Labor Code, Art. 97) “Fair and reasonable value” shall not include any profit to the employer, or to any Person affliated with the employer. Id.) wa Paid for skilled or unskilled manual labor Sa Paid to white collar workers and denote a higher grade of employment Not exempt execution, gamishment or attachment. (Gea v CA, G.R. No, L-44169, 1985) Nei Gubject 10 execution, gamshment or attachment except for debts related to necessiies (Civ | Code, Art. 1708) ‘trom Minimum wage is set by aw or wage order issued by the Regional Tripartite Wages and Productivity Boards (RTWPB's) or the rate which may be fixed by the employer provided the same is not lower than the legally mandated minimum wage for agricultural cr non-agricuftural workers. Wage or Salary includes: Commission; Facies, and Commodities! Supplements LABOR LAW No Work ~ No Pay Principle , General Rule: A fair day's wage for 2 fait ar labor. (Sugue v. Triumph Intemational {Phils &.R. No. 164804, 2009) Exception: Where the employer was abe, wiling, and ready to work but was prevented by management or was illegally locked out, suspended or dismissed, or othenwise ilegally Prevented trom working (Sugue v. Triumph International, supra) BUT: Where the failure of employees to work was Not due to the employer's fauit, the burden of economic oss suffered by the employees should Not be shifted to the employer. Each party must bear his own loss. Equal Pay for Equal Work Employees holding the same positon and rank are resumed to be performing equal work. The rule ‘equal pay for equal work applies whether the ‘employee is hired locally or abroad (ISAE v. (Quisumbing, G.R. No. 128845, 2000) (b) Coverage/Exclusion ‘The rule on wages applies to ALL workers. (SLL Intemational Cables, G.R. No. 172161, 2011). EXCEPT: (FaB-CD-CHR10) 4. Earm tenancy / leasehold 2. Domestic service 3. Persons working in their respective homes in needle work or in any Cottage industry duly registered in accordance with law 4. Barangay micro business enterprise (BMBE) under RA 9176, the BMBE Law. BMBE — any business entity or enterprise engaged in the production, processing, or manufacturing of Products or commodities, including agro- Processing, trading and services, whose total assets including those arising from loans but ‘exclusive of the land on which the particular business entity's office, plant and equipment are situated, shall not be more than PM 5. Cooperatives. (Benguet Electric Cooperative v. Hon. Ferrer-Colleja, GR No. 79025, December 29, 1989) 6. Homeworkers employed in any establishment Guly registered with the National Cottage PAGE 36 OF 283RCN’ RH hK Rehan aaa area aaa eee eee ATENEO CENTR, AL BAR OPERATIONS 2018, Industries and 0. evelopment Authority in . accordance with RA 8470 ' Retail and service establishments regularly ‘employing not more than 10 workers: (c) Minimum wi Resuimam Wage of Workers Paid BY \.Workers paid by results, All workers paid by result including those who are aid on piecework, tekay, pakyaw or task basis, Shall receive not less than the prescribeo wage Tales per eight (8) hours of work a day, or a Proportion thereof for working less than eight (8) hours. (Labor Code, Art. 124) ii, Apprentices. ‘Wage rates of apprentices shall conform to the rules issued by the Secretary of Labor. Wages ‘shall in no case be less than 75% of the applicable ‘minimum wage rates. (Labor Code, Art. 61 & 75) Note: Learners employed in piece or incentive- rate jobs during the training period shall be paid in full for the work done (Labor Code, Art 76) The Secretary of Labor may authorize the hiring of apprentices without compensation whose training fon the job is required by the schoo! or taining program curriculum or as a requisite fr graduation ‘or board examination. (Labor Code, Art.72) iil, Learners Wages of leamers shall begin at not less than 75% of the applicable minimum wage. (Labor Code, Art 75) Learners employed in piece or incentive-ate jobs during the training period ‘shall be paid in full for the work done, (Labor Code, rt. 76) iv. Persons with Disability ‘A qualiied disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits or allowances as qualified, able~ bodied persons (R.A. No. 7277, Sec. §) (2) Commissions. Commissions have been defined as the recompense, compensation, or reward of an agent, salesman, executor, trustee, receiver factor, broker or bailee, when the same is caloulated as a percentage on the amount of his transactions or on the profit to the principal. (Phi. ‘Duplicators’ Inc. v. NLRC, G.R. No. 110068, 1993) ‘The Court held thatthe defnition of ‘wages under ‘Ad. 97 (1) of the Labor Code explcily includes commissions as part of wages, While commissions are incentives to inspire employees to puta litle more industry on the jobs particularly assigned to them, sill, these commissions are iect remuneration for services rendered. There is no law mandating that commissions be paid only after the minimum wage has been paid to the employee. Veriy, the establishment of 2 minimum wage only sets a floor below which an employee's remuneration cannot fall, not that ‘commissions are excluded from wages in the ‘compliance with the minimum wage law. (Iran v. NLRC, G.R.No. 121927, 1996) However, for commissions to be included in the employees salary, the employee must have ‘earned them through performing actual business transactions. (Phi. Duplicators’ nc. v. NLRC, G.R. No. 110068, 1995) (e) Minimum Way Current Minimum Wage PhP 512 (Wage Order No. NCR-21) PhP 512 is the minimum wage for the non- ‘Agricuturel Sector, and is composed of Basic Wage of PhP 502 + COLA of PhP 10 Standards/Criteria for minimum wage fixing The regional minimum wages to be established by the Regional Board shallbe as nearly adequate as is economicaly feasible to maintain the iinimum standards of living necessary for the health efficiency and general wel-being ofthe employees within the framework of the national economic and social development program. PAGE 37 OF 23ATENEO CENTRAL BAR OPERATIONS 2018 In the determination of such regional minimum ‘wages, the Regional Board shal, among other relevant factors, consider the following: ‘The demand for ling wages; Wage adjustment vs-avis the consumer pice index The cost of living and changes or increases therein ‘The needs of workers and their families ‘The need to induce industries to invest in the countryside Improvements in standerds of tving The prevaiing wage levels. Fic retum ofthe capital nvested and capacity ‘opay of employees 9. Effects on employment generation and family income 10. The equitable distibution of income and wealth along the imperatives of economic and Social development (Labor Code, Art 124) ‘Two Methods of fixing the minimum wage rate. 1. Floor Wage Method Method which involves the fing of a determinate amount to be added to the prevaling statutory ‘minimum wage rates. 2. Salary Cap Method Method where the wage adjustment is to be applied to employees receiving a certain denominated salary ceiling. In other words, workers already being paid more than the existing ‘minimum wage (up to a certain amount stated in the Wage Order) are also to be given a wage increase. (Employers Confederation of the Philippines v. National Wages and ‘Commission, G.R. No. 96169, 1991). Pursuant to is authority, the Regional Wage Boards may issue wage orders which set the daily ‘minimum wage rates, It has no authority to grant an across-the-board wage increase. (Metropolitan Bank and Trust Company v. NWPC, 2007) LABOR LAW 2, Payment of Wages Means of Payment The employer cannot pay his workers by means of any ofthe following: a) Vouchers; ) Promissory notes; ©) Any object other than legal tender 9) Coupons; @) Chits; f) Tokens; o¢ 9) Tickets (Labor Code, Art. 102) General Rule: No employer shall pay the wages of an employee by any other means other than legal tender, even when expressly requested by the employee. (Congson v. NLRC, GR. No. 114250, Apr 5, 1995) Exception: Payment of wages by bank checks, postal checks or money orders is allowed where: 4. Such manner of wage payment is customary on the date ofthe Labor Code's effectivity, 2. Nis stipulated ina collective agreement; 3. Allof the folowing conditions are met; or a There is a bank or other facility for ‘encashment within a radius of 1 kiometer from the workplace . The employer or any of his agents. or representatives does not receive any Pecuniary benefit directly or indirectly from the arrangement ©. The employees a'e given reasonable time during banking hours to withdraw their wages from the bank which time shall be considered 3s compensable hours worked if done during working hours 4. The payment by check is withthe written ‘consent of the employees concerned if there is no collective agreement ‘authoring the payment of wages by bank checks 4. Necessary because of special cicumstances 8 specified in appropnate regulations issued by the Secretary of Labor (IRR Labor Code, ‘See. 1, Rule Vil, Book i) PAGE 38 OF 243 SQ@eaH#4»rmmemems mew ee ee us owVUE ReEeR eRe eeeeaea eee eee eee elec hmrChmhlhmUlUmUmUU ATENEO CENTRAL : BAR OPERATIONS 2018 LABOR LAW UE EEEEEEEEEENeT Time of Payment General Rule: At least once every 2 weeks oF {twice @ month at intervals not exceeding 16 days. Exceptions: 1. In case of force majeure or other Circumstances beyone the employer's control, Payment must be made immediately after such occurrence has ceased; and 2. In case of payment of wages by result involving work which cannot be completed in two weeks and in the absence of CBA or atbitration award = Payments are made at intervals. not exceeding 16 days, in proportion to the ‘amount of work completed; and = Final settlement is made upon ‘completion of the work, In ALL Cases: No employer shall make payment ‘with less frequency than once a month, Won account of force majeure or circumstances beyond the employer's control, payment of wages ‘on oF within the time herein provided cannot be made, the employer shall pay the wages immediately after such force majeure or circumstances have ceased. Place of Payment General Rule: Payment of wages shal be made ‘at or near the place of undertaking Exceptions: Payment in a place other than the work place shall be permissible only under the following circumstances: +. When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic of other calamity rendering payment thereat impossible 2. When the employer provides free transportation to the employees back and forth 3. Under any other analogous circumstances; Provided, That the time spent by the ‘employees in collecting their wages shall be considered as compensable hours worked (Labor Code, Art. 103; IRR Labor Code, Sec. 4, Rule Vil, Book i!) Prohibited Place of Payment General Rule: Payment cannot be made in a bar, night or day club, drinking establishment, massage dlinic, dance hall, or other similar places or in places where games are played with stakes of ‘money or things representing money Exception: Persons employed inthe abovementioned places may be paid there (/RR Labor Code, Sec. 40), Rule Vill, Book Il) Payment through Banks; Requisites 1. There must be 2 written permission of the majority of the employees concemed in an establishment 2. The establishment must have 25 or more employees 3. The establishment must be located within 1 km, radius to the bank. Payment through ATM; Requisites Payment through automated teller machines (ATM) of banks is allowed, provided the ff. conditions are met [CTARRDR}: 1, The ATM system of payment is with the written Consent of the employees concemed; 2. The employees are given reasonable Time to withdraw their wages from the bank faciity which time, if done during working hours, shall be considered compensable hours worked; 3. The system shall Allow workers to receive their wages within the period or frequency and jin the amount prescribed under the Labor Code; 4. There is a bank or ATM facility within a Radius of one (1) kilometer to the place of work; 5. Upon request of the concerned employee/s, the employer shall issue a Record of payment ‘of wages, benefits and deductions for a Particular period; 6. There shall be no additional expenses and no Diminution of benefits and privileges as a result of the ATM system of payment, 7. The employer shall assume Responsibility in case the wage protection provisions of law and regulations are not complied with under the arrangement (DOLE's Explanatory Bulletin on Wage Payment Through ATM Facily November 25, 1996) PAGE 39 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 ABOR LAW u ee taco ta To Whom Wag. re Paid Gonoral Rule: Wages shall be paid directly to the ‘workers to whom they are due (Labor Code, Ar. 108) Exceptions: ‘\ Payment through another person — (@) In cases of force majeure rendering such ‘Payment impossible or under other special Circumstances to be determined by the Secretary ~ the worker may be paid {through another person under written uthority given by the worker for the Purpose (Labor Code, Art, 108(a): or (©) When authorized under existing law, including: i. Payments for the Premiums of the employee Union dues where the right to check- off has been recognized by the employer in accordance with a collective agreement ti, Authorized in writing by the individual employees concemed (IRR of Labor Code, See. 51), Rule Vil insurance 2. Payment through heirs of the worker ~ Where the worker has ded ~ the employer may Pay the wages ofthe deceased worker tothe heirs of the latter without the necessity of intestate Proceedings. (Labor Code, Art. 105jb)) Procedurs * The claimants, if they are all of age (or in case of a minor, by the natural guardians or Next-f-kin), shall execute an affidavit attesting to their relationship to the deceased and the fact thal they are his heirs, to the exclusion of all other persons, "any of the heirs is @ minor, the affidavit Shall be executed on his behalf by his atural guardian or next-of-kin, + The affidavit shall be presented to the employer who shall make payment through the Secretary or his representative. The representative of the Secretary shall act as referee in dividing the amount paid among the heirs, The payment of wages under this Article Shall absolve the employer of any further Fabuity with respect to the amount paid +s fami 3. Payment through member of worker's family e i the Where the employers authorized oa a fe employee to pay his wages to a A family (IRR Labor Code, Sec. Sfa), Rule Vill, Book m a ules on Payment of Wages eae Legal tender, _ Prohibited: Promissory notes, vouchers, coupons, tokens, tickets, chits, or any other object other an legal tender Gee owes twice a month at intervals not exceeding 16 days | ‘At or near the place of undertaking Directly to the employee entitled thereto ae CU BE PAID les versus supplements (a) Facilites Articles or services for the benefit of the employee. Or his family but shall not include tools of the trade OF articles or service primarily for the benefit of the employer or necessary to the conduct of the employers business; may be deducted from the employees’ wages. Acceptance of Facilities {n order that the cost of facilities furnished by the employer may be charged against an employee, the employee's acceptance of such faciities must be voluntary. Requirements for deducting value of facilities: 1. Proof must be shown that such facilities are customarily furnished by the trade. The provision of deductible facilities must be voluntarily accepted in writing by the employee ‘The facilities must be che reasonable value. Specialists v. NLRC, 2 ‘arged at fair and (SLL Intemational Cable GR No. 172161, 2011) PAGE 40 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW a EEE Note: As regards meals and snacks, the employer ‘may deduct from the wages not more than 70% of the value of the meals and snacks enjoyed by the employees, provided that such deduction is authorized in wnting by the employees. The remaining 30% of the value has to be Subsidized by the employer. (IRR Labor Code, Sec. 1, Rule Vil-A, B0ok I!) (b) Supplements ‘The benefit or privilege given to the employee which constitutes an extra remuneration over and above his basic or ordinary eaming or wace, is supplement. ‘Thus, free meals supplied by the ship operator to crew members, out of necessity, cannot be ‘considered as facilities but supplements which could rot be reduced having been given not as part of wages but as a necessary matter in the maintenance Of the health and efficiency of the crew personnel during the voyage. (States Marine Corporation and Royal Line, inc. v. Cebu Seamen's Association, Inc. GR No. L-12444, 1963). Criterion: In determining whether a privilege is @ facility, the criterion is not so much its kind but its PURPOSE (Millares v NLRC & PICOP, GR. no. 122827, 1999) [simmers | Extra remuneration of special _privleges/ benefits! articles or | services / tools of the trade For the benefit or| employee and his | convenience of the | for their | employer | existence and | subsistence | fies. = Deductibiit Part ofthe wage For the benefit of the ityfrom wager Independent of the | __| wage Deductible from the | Not wage deductible 4, Non-diminution of benefits ‘There is diminution of benefits when. 1. The grant or benefit is founded on a policy or has ripened into a practice over a long period of time 2. The practice is consistent and deliberate 3. The practice is not due to error in the construction or application of a doubtful or dificult question of law, and 4, The diminution or discontinuance is_done unilaterally by the employer. (TSPIC v. TSPIC Employes Union, G.R. No. 163419, 2008). 5. The “benefits” refer to monetary benefits or privileges given to the employee with monetary equivalents. (Royal Plant Workers Union vs. Coca-Cola Bottiers Philippines, Inc.- Cebu Plant, G.R. 198783, 2013) Non-Diminution Rute General Rule: Nothing in the Labor Code shall be construed to eliminate or in any way diminish supplements, or other employee benefits being ‘enjoyed at the time of promulgation of the Labor Code. Benefits being given to employees shall not be taken back or reduced unilaterally by the employer because the benefit has become part of the employment contract, writen or unwritten, (Labor Code, Art. 100) Exception: To correct an error, otherwise, if the error is left uncorrected for a reasonable period of time, it ripens into a company policy and ‘employees can demand for it as a matter of right. When Non-Diminution Rule Applicable The rue is applicable if itis shown that: 1. The practice is consistent and deliberate (Metrobank v. NLRC, G.R. No. 152928, 2008) 2. The diminution or discontinuance is done Unilaterally by the employer (Stee! Corporation v. Nagkakaisang Manggagawang Supreme Independent Union, G.R. No. 185556, 2011); 3. The grant of the benefit is founded on a policy or has ripened into a practice over a long petiod (Phil. Appliance Corp. v. CA, G.R. No. 149434, 2004), and 4. The practice ts not due to error in the construction or application of a doubtful or itficut question of law (Vergara, Jr, v. Coca Cola. G RNo 176985, 2013) PAGE 41 OF 283ATENEO CENTRAL LABOR LAW BAR OPERATIONS 2018 When not applicable At least one of the requisites is absent. 1. Atleast one of the requisites is absent 2. Mistake in the application of the law (Globe Mackay v. NLRC, G.R. No, 82511, 1986) 3. Negotiated benefi's (Azucena) 4. Reclassifcation of Positions - 9. loss of some benefits by promotion. 5. Contingent or Conditional Benefits ~ the rule does not apply to a benefit whose grant depends on the existence of certain conditions, so that the benefit is not ‘demandableif those preconditions are absent. Past Errors itis a past error that is being corrected, no vested right may be said to have arisen nor any diminution of benefit under Art. 100 may be said to have resulted by virtue ofthe correction (TSPIC Corp. v. TSPIC Employees Union, G.R. No. 163419, 2008) Benefits intiated through negotiation between Employee and Employer, e.g. CBA can only be eliminated oF diminished bilaterally. A union is not prohibited from offering and agreeing to reduce wages and benefits of the employees during CBA regotiabons. (Insular Hote! Employees Union v. Waterfront, G.R. 174040-41, 2010) Bonus ‘A benefit which is contingent or conditional; its demandabilty depencs on certain pre-conditions, tis an amount granted voluntarily to|an employee for his/her industry and loyalty, which contributed to the success and realization of profits of the employer's business. General Rule: Bonus is not demandable aso ratier of right. It is @ management prerogative, dive? in addition to what is ordnariy received by fr strictly due tothe recipient (Producers Bank v. NLRC, GR. Wo. 100701, 2001) Exceptions: When it was promised to be given without any conditions imposed for its payment in which case itis deemed part ofthe wage: and 2. When it has ripened into practice (Marcos v. NLRC, GR. No. 111744, 1995) 5. Prohibitions regarding wages (a) Deductions from Wages (Labor Code, Art. 193) General Rule: Wage deduction is sinctly prohibited. Exceptions: 41. With Employee's Consent in Writing SSS payments + PHILHEALTH payments ‘© Contributions to PAG-IBIG Fund ‘© Value of meals and other facities ‘+ Payments to third persons with employee's consent and without pecuniary benefit + Deduction for unpaid absences 2. Without Employee's Consent © Worker's insurance acquired by the employer + Union dues, where the right to check-off has been recognized by the employer or authorized in writing by the employee «Cases where the employer is authorized by law or regulations issued by the Secretary of Labor * Debts of the employee to the employer that have become due and demandable Withholding tax NOTE: Persons eaming minimum wage are exempted from income tax, 3, When Authorized by Law + Deposit for lossibreakage (Labor Advisory, No. 14 2014), Sec. 3) + In cases where the empluyee is indebted tothe employer, where such indebtedness has become due and demandable (Civil Code, Art. 1706) © Court judgment, but only for debts incured for food, shelter, clothing, and ‘medical attendance (Civil Code, Art. 1708) 4, Regulation Issued by the Secretary of Labor PAGE 42 OF 283 jn ted fel ft Ge ae be om mt le le le ee eewpe nwviaewseeseasteaweweaeweww eee eeeweeFee re ener nmerlmeme ee ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW ee eeeeeeSeSS Deposits for Loss or Damage General Rule: No employer shall require his Worker to make deposits fr the reimbursement of ‘or damage to material, equipment, or tools ‘supplied by the employer. Exception: When the trade, occupation or business of the employer recognizes or considers the practice of making deductions or requiring epost necansary or desirable (Labor Code, Art 4) Requisites for Valid Deduction for Loss/Damage 1, The employee concomed is clearly shown to be responsible for the loss or damage 2. The ernployee is given reasonable opportunity 10 show cause why deduction should not be made 3. The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage 4, The deduction trom the wages of the employee does not exceed 20% of the employee's wages in a week (IRR Labor Code, Sec. 11, Rule Vill, Book i!) Note: Art, 144 provides for the rule on deposits for the loss or damage to tools, materials, or ‘equipment supplied by the employer. The same does not apply to or permit deposits to defray any deficiency, which the taxi driver may incur in the remittance of "boundary" (Five J Taxi v. NLRC, GR. No. 111474, 1994) Prohibited / Uniawtul Acts 4, Withhold any amount from the wages of @ worker or induce him to give up any part of his ‘wages by force, stealth intimidation, threat or by any other means whalsoever without the ‘worker's consent. (Labor Code, Art. 146) 2. Deduction from the wages of any employee for the benefit of the employer or his representative or intermediary a5 consideration of @ promise of employment or retention in employment. (Labor Code, Art 117) 3. Refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has fied any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings. (Labor Code, Art. 118) 4. Make any statement, report or record filed or kept pursuant to the provisions of this Code knowing such statement, report or record to be {alse in any material respect. (Labor Code, Art 199) Non-Interference in Disposal of Wages (Civil Code Provisions) 1. The laborer’s wages shall be paid in legal currency (Civil Code, At. 1705) 2. Withholding of wages, except for a debt due ‘hall not be made by the employer (Civil Code, Art, 1706) 3. The laborer's wages shall be a lien on the ‘goods manufactured or the work done (Civil Code, Art, 1707) 4, The laborer’s wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing, and medical attendance (Civil Code, Art. 1708) 5. The employer shall neither seize nor retain any tool or other articles belonging to the laborer (Civil Code, Art. 1709) 6. Wage Order; Wage Distortion Wage Order ‘An order issued by the Regional Board whenever the conditions in the region so warrant after studying and investigating and studying all pertinent facts and based on the standards and criteria prescribed by the Labor Code. (Labor Code, Art. 123) ‘A wage order adjusts the minimum level but not the levels above the minimum. It does not ‘mandate across the board salary increase. Employees NOT Covered 4. Household or domestic helpers, including family drivers and workers in the personal service of another 2. Workers and employees in retail/service establishments regularly employing not mere than 10 workers, when exempted from ‘compliance, for a period fixed by the ‘Commission’Boards 3, Workers and employees in new business enterprises. outside the National Capital PAGE 43 OF 28%ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW Region and export processing zones for a Period of not more than two oF three years, 38 the case may be, from the stant of operations when exempted (R.A. No. 6727) In addition to setting the minimum wage, the RTWP8 can provide additional exemptions since itis vested with the competence to determine the industries and sectors 10 exempt from the coverage of their wage orders. (National Wages ‘and Productivity Commission (NWPC) and the Regional Tripartite Wages and Productivty Board (RTWB) vs. Alliance of Progressive Labor (APL) and the Tunay na Nagkakaisang Manggagawa sa Royal (TNMR), G.R. No. 150326, 2014) Etfectivity of Wage Orders Takes effect after 15 days from ts complete publication in at least one newspaper of general circulation in the region. (NWPC Guidelines No. 001-95, Sec. 4, Rule 1V) Public Hearings and Consultations Mandatory Notice must be given to employees’ and ‘employers’ groups, provincial, city and municipal officials and other interested parties. ‘A wage order issued withou: the required public Consultation and newspaper publication is null and void. Frequency General Rule: A wage order issued by the Board may not be disturbed for a period of 12 months from its effectivity and no petition for wage increase shall be entertained during said penod (NWPC Guidelines No. 001-05, Sec. 3, Rule 1V) Exceptions: When Congress itself issues a law increasing wages; or 2. Supervening conditions, such as extraordinary increases in prices of petroleum products and basic goods / services ‘Standards/Criteria for Minimum Wage Fixing Must be ecoromically feasible to maintain the minimum standards of living necessary for the healt, efficiency and general well-being of the employees within the framework of the national economic and social development prograin. Factors to Consider: (SNAPE CRIED) 1. Improvements in Standards of tving 2. The Needs of workers and their families 3. Wage Adjustment vis-&-vis the consumer price index 4. The Brevaiing wage levels 5. Effects on employment generation and family income 6. The Cost of living and changes or increases 7. Fair Retum of the capital invested and capacity to pay of employers 8, The need to induce Industries to invest in tne countryside 9. The Equtabie distibution of income and wealth along the imperatives of ecoromic and social development 10. The Demand for ving wages (Labor Code, An. 123) Appeal ‘A party aggneved by a Wage Order may appeal to the NPC not later than 10 days trom the date of the publication of the order (NWPC Guidelines No. 001-95, Sec. , Rule V) Effect of Appeal General Rule: Appeal does not stay the effect of the wage order Exception: Uniess the party appealing such order shall file wih the NWPC an undertaking with 2 surety/sureties (surety bond) satisfactory to the Commission for payment to employees affected by the order for the corresponding increase, in the ‘event that such order is affirmed (IPR of R.A. No. 6727, Sec. 5, Rule V) Doctrine of Double Indemnity Payment to @ corcemed employee of the prescribed increase or adjustments in the wage rate which was not paid by an employer in an ‘amount equivalent to twice the unpaid benefits ‘owing to such employee (D.0. No. 10, Sec. 21) 11998) PAGE 44 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW BAR OPERATIONS 2008 Wage Distortion Definition of Wage Distortion AA situation where an increase in prescribed wage rates results i the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among ‘employes groups in an establishment as (0 effectively obiterate the cistinctions embodied in such wage structure based on skis, length of service of other logical basis of differentiation (Labor Code, Art. 124) ‘Simply, f the pay advantage of a position over ‘another is remaved or significantly reduced by @ ay adjustment required by a wage order, such pay advantage should be restored. Mania Mandarin Employees Union v. NLRC, (G.R. No. 108556, 1996) For a distortion to exis, the law does not require {an elimination or total abrogation of quantitative wage of salary difference; a severe contraction thereo’ is enough. (MBTC Employees Union-ALU- TUCP v. NLRC, G.R. No. 102636, 1993) Wage distortion involves companson of jobs located in the same region. Examination of aleged salaiy distortion is limited to jobs or positions inthe ‘same employer in the same regicn; thus, the ‘comparison of salaries has to be intra-region, no inter-egion, (Prubenkers Association v. Prudential Bank and Trust Co,, G.R. No. 131247, 1999) Elements of Wage Distortion: 4. An existing hierarchy of positions wth corresponding salary rates. 2. A significant change in the salary rate of 2 lower pay class without a concomitant increase in the salary rate of a higher one. 3, The elimination of the distinction between the two levels. 4. The existence of the distortion in the same region of tive county. (Alliance Trade unions v. NLRG, G.R. No, 140689, 2004) Correction of Wage Distortion ‘A. Incase of an ORGANIZED establishment 4. Employer and union shall negotiate to correct the distortion 2. Any dispute arising shoula be resolved through grievance procedure under CBA 3. If dispute remains unresolved, through voluntary arbitration (Labor Code, Art 124) . In case of an UNORGANIZED establishment ‘The employer and employees shall endeavor to correct the distortion 2. Any dispute shall be seitied through National CConeiliation and Mediation Boarc (NCMB) 3. If remains unresolved after 10 cays of conciliation, it shail be referred to the NLRC (Labor Code, Art. 124) Note: Any issue involving wage distortion isnot 2 valid ground for a strike or 2 lockout (law at ‘Buklod ng Manggagaws, G.R. No. 91980, 1991) ‘Amount of Distortion Adjustment ‘The restoration of the previous pay advantage 1s the aim but not necessaniy to the last peso. Restoration of appreciable differential, @ ‘significant pay yap, should sutfice as correction, Suggested Formula to Correct a Salary Distortion Minimum = % x Actual Salary Prescribed Viage Increase The distortion that should be rectified refers to distortion arising from compliance with a goverment wage order. It does not refer to distortion caused by salary revisions voluntarily initiated by the employer unless such a duty exists because of a CBA stipulation or company practice. (Bankard Employes Union - WATU v. NLRC. GR. No, 140688, 2004) CBA vis-8-vis Wage Orders CBA Creditability The provisions of the CBA should be read in harmony with the wage orders, whose benefits should be given only to those employees covered thereby. (PL Manufacturing, Inc, v. P! Manufactunng Supervisors and Foreman Assn and the NLRC, GR. No. 167217, 2008) PAGE 45 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 Summary of Principles on Wage Distortion (NFL v. NLRC, G.R. No, 103586, 1994) The concept of wage distortion assumes an existing grouping or classification of employees which establishes distinctions among such employees on some relevant or legitimate basis. This classification is reflected in a differing wage Fate for each ofthe existing classes of employees. Wage distortions have often been the result of ‘overnment-decreed increases in minimum wages. There are, however, other causes of wage distortions (such as merger). ‘Should a wage aistortion e t, there is no legal Fequirement that the gap which had been Previously existed be restored in precisely the Same amount. Correction of a wage distortion may be done by re-establishing a substantial or significant gap (as distinguished from the historical gap) between the wage rages of the differing classes of employees. The re-establishment of a significant wage difference may be done through the grievance Procedure or collective bargaining negotiations. S. LEAVES: 1, Service Incentive Leave (SIL) (a) Right To Service incentive Leave Definition: Every employee who has rendered at least 1 year of service shall be entitled to a yearly Service incentive leave of 5 days with pay. (Labor Code, Art, 95) Coverage: This benefit applies to all employees, EXCEPT: 1. Government employees, whether employed by the National Government or any of its political subdivisions, including those employed in government-owned andlor Controlled corporations with original charters OF creatéd under special laws; 2. House helpers and persons in the personal service of another; 3. Managerial employees, if they meet all of the following conditions. 3.1. Their primary duty is to manage the establishment in which they are LABOR LAW employed or of a department oF subdivision thereof; 412. They customary and fogarty dec! he work of two or more employees tMerele 3.3. They have the authority to ee thelr other employees of lower ronk oF the Ss ggestions and recommendations 26 tiring, fring, and promaton, or any other change of status of other employees 4 ven particular weight. Oricers ee members of 8 managerial =e they perform the following duties responsibilities: 4 mary perfor wok recy lle ‘management policies of their employer, 4.2. Customarily and regularly exercise discretion and independent judgment; 4.3, Regularly and directly assist a proprietor or managerial employee in the management of the establishment or subdivision thereof in which he or she is employed; or 4.4, execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowleage; or 4.5. execute, under general supervision, ‘special assignments and tasks; and 4.8. Do not devote more than twenty percent (2%) 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 4.1, 4.2, and 4.3 above; Field personnel and those whose time and Performance is unsupervised by the employer; Those already enjoying this benefit; ‘Those enjoying vacation leave with pay of at least five (5) days; and Those employed in establishments regularly employing less than ten (10) employees. (IRR Labor Code, Sec. 1, Rule V, Book Il) PAGE 46 OF 283LABOR LAW ATENEO CENTRAL BAR OPERATIONS 2018 ee ‘The cause cf action of an entitled employee to Meaning of “at least 4 year of service” Service for not ess 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 (Integrated Contractor anc Plumbing Works v. NLRC, G.R. No. 152427, 2005) Usage/Conversion to Cash General Rule: Commutable to its money ‘equivalent if not used or exhausted at the end of the year. (Femandez v. NLRC, G.R. No. 105982, 1998) Note: The basis for the computation is the salary at the date of commutation/conversion of the SIL. Exception: Under the Kasambahay Lew, 2 domestic worker who has rendered at least one (1) year of service shall be entitled to an annual service incentive leave of five (5) days with pay, provided that any unused portion of said annual leave shall NOT be cumulative or carried over to the succeeding years. Unused leaves shall NOT be convertible to cash. (R.A. No. 10361, Sec. 29) Mlegal Dismissal An employee who is illegally dismissed is entitled to service incentive leave benefits computed 1 year from the date she started working until the date of her actual reinstatement. (/mbutido v. LRG, G.R. No. 114734, 2000) Prescription of Claim for SIL Art, 306 is not a prescription of a period of time for the computation of money claims but is a prescription of filing an action upon monetary claims from the time the cause of action accrued. The employee may use his SIL benefits as leave days or he may collect its monetary value. To limit the award to 3 years is to unduly restrict such right. (Femandez v. NLRC, G.R. No. 105892, 1998) Claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the emplcyee did not make use of said leave credits but insteao chose to avail of its commutation. Accordingly, if the employee wishes to accumulate his leave credits ‘and opts for its commutation upon his resignation or separation from empoyment, his cause 0” action to claim the whole amount of his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or separation trom ‘employment. (Autobus Transport System Inc. v. Bautista, G.R. No. 156367, 2005) Vacation Leave (VL) / Sick Leave (SL) Not required by law and depends on voluntary employer policy (management prerogative) or collective bargaining. (see Sugue v. Trimpuh International [Phils], G.R. No. 164804, 2909) Itcan be waived, as the VSL may be considered ‘a concession or act of grace of the employer. 2, Maternity Leave Coverage: SSS Law (R.A. 1161, as amended by RA 8282) A female member who has paid at least 3 monthly contributions in the 12-month period immediately preceding the semester §of-—her childbirthimiscarriage shall be paid a daily maternity benefit equivalent 10 100% of her average daily salary cradit for 60 days (in case of normal delivery) or 78 days (in case of caesarian delivery). (RA. No. 9282, Sec. 14-4) Conditions for entitlement: (NAB-4-RD) 1. Employee shall have Notified her employer of her pregnancy and the probable dale of her childbidh, which notice shall be transmitted to the SSS. 2. Full payment shak be Advanced by the employer within 30 days from the filing of the maternity leave. Payment of daily maternity benefits shall be 2 Bar to the recovery of sickness benefits provided by the SSS Law for the same period for which daily maternity benefits have been received. PAGE 47 OF 283ATENEO, CENTRAL Is provided under this Section shall be paid only for the first. 4 deliveries/miscariages 5. The SSS shall irmmediately Reimburse the 8: I an employee member should give bith or Suffer miscarriage without employer of the time of the pregnancy, the employer shall pay to the SSS Damages equivalent to the benefits which said employee member would otherwise have been entitled to (R.A. No. 9262, Sec. 14-A) Notes: Women in the miltary, police, and other services shall be entitled to leave benefits such as matemity leave, as provided for by existing laws (Magna Carta of Women, Sec. 15) {tis not necessary that the woman be impregnated by her legitimate husband. itis immaterial who the father is. Every pregnant woman in the private sector whether married or unmarried, is enlitled to the maternity leave benefit Availment The maternity benefits provided under this Sections s all be available onty for the first four (4) deliveries or miscarriages. (R.A. No, 8282, Sec. 14-Ad)) 3. Paternity Leave (R.A, No. 8187) Definition: Patemity 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 miscariage for purposes of enabling him to effectively lend suppor to his wife in her period of Tecovery endlor in the nursing of the newly-born child. (R.A. No, 8187, Sec. 3) BAR OPERATIONS 2018 LABOR LAW ee Coverage Paternity Leave is granted to all married male employees in the private sector, regardless of their employment status (e.g., probationary, regular, Contractual, project basis). (he Government employees are also entitled 10 1 Paternity leave benefit. They shall be governed by the Civil Service ruies. Conditions to entitlement: ; 1. A married male employee at the time of delivery of his child; 2. Cohabiting with his spouse at the time she ives birth or suffers a miscarriage; 3. Applied for paternity leave witkin a reasonable Period from the expected date of delivery by the pregnant spouse, or within such period as may be provided by company rules or by CBA; Provided that prior application is not required in case of miscaniage; 4. Wife has given birth or suffered a miscarriage. 5. Where a male employee is already enjoying the paternity leave benefits by reason of ‘contract, company policy or CBA, the greater benefit prevails Application for Paternity Leave The male employee applying for patemity leave shall notify his employer of the pregnancy of his legitimate spouse and the expected date of such delivery by the pregnant spouse, or within such Period as may be provided by company rules and regulations or by collective bargaining agreement, Provided that prior application for leave shall not e required in case of miscarriage (IRR of R.A. No. 8167 for the private sector, Sec. 4) Non-conversion to Cash In the event that the paternity leave is not availed Of. it shall not be convertible to cash and shall not be cumulstive. IRR of R.A. No. 8187, Sec. 4) PAGE 48 OF 243ee ee ee ee ee ie ATENEO CENTRAL : BAR OPERATIONS 2018 4, Parental Leave for Solo Parents Parental (Solo Parent Leave) Benefits granted toa solo parent to enable him/her {0 perform parental duties and responsibilties where physical presence is required. The parental 'eave, in addition to leave privileges under existing ‘aws, shall be for seven (7) work days every year. with full pay, consisting of basic salary and ‘mandatory allowances fixed by the Regional Wage Board, if any, provided that his/her pay shall not be less than the mandated minimum wage. (IRR of RA. Ne. 8972, Sec. 6{g]) Coverage: Who are considered Solo Parents: A parent left alone with the responsibilty of parenthood because of death of one's spouse. D. A parent left alone with the responsiblity of parenthood because of any physical andior ‘mental incapacity of one’s spouse as cerified by a public medical practitioner ©. A parent left alone with the responsibilty of parenthood because one has legally ‘Separated from his spouse or because they have been separated for atleast one year and the child isin solo parent's custody AA parent left alone with the responsiblity of Parenthood because the marriage was annulled by @ court or @ church decree, and the child is in solo parents custody. €. A parent left alone with the responsibilty of parenthood because his spouse abandoned him for atleast one year. 1. A parent left solo or alone with the responsibilty of parenthood because his spouse is detained or is serving sentence for a crime for atleast ono year. 9. An unmarried mother or father who has preferred to keep and rear the child himse, instead of having others care for them or give ‘up to a welfare institution, 1h. Solely provides parental care and support toa child or children, 1. Assumes responsibilty of head of the family a8 2 result of the death, abandonment isappearance or prolonged absence of the children’s parents or solo parent i. A victim of rape andlor other crimes against cchasiily, have given bith to a child as a result LABOR LAW and have decided to keep and raise his child. (RA. No, 8972, Sec. 3fa)) Children 1. Those living with and dependent upon the solo parent for support who are unmarried unemployed and not more than 18 years of age; or 2. Those even over 13 years but are incapable of self-support because of mental and/or physical defect (RA. No. 8972, Sec. 3{e}) Conditions to Entitlement 1. He/she has rendered at least 1 year of service, whether continuous or broken; 2. Helshe has notified his/her employer of the availment thereof within a reasonable period 3. Helshe has presented a Solo Parent Identification Card to his/her employer which ‘may be obtained from the DSWD office of the city of municipality where he/she resides (IRR of R.A. No, 8972, Sec. 19) Availment A parental leave of not more than 7 working days every year shall be granted to any solo parent ‘employee who has rendered service of at least 1 year Non-Conversion to Cash ‘Unused parental leave is not convertible to cash unless otherwise provided by the CBA. (R.A. No. 8972, Sec. 20) Termination of the benefit ‘A change in the status oF circumstance of the parent claiming benefits under this Act, such that ‘he/she is no longer let alone with the responsibilty ‘of parenthood, shall terminate his/her ebighilty for these benefits. (R.A. No. 8972, Sec. 3faj) PAGE 49 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW rc 5, Leaves Benefits for Women Workers Under Special Laws R.A. No, 970 or the Magna Carta for Women A special leave benefit for women was granted Under R.A. No. 9770 (August 14, 2003). Wamen ‘who qualify under R.A. No. 9710 are entiled toa ‘special leave benifit of two (2) months with full pay based on her gross monthly compensation following surgery caused ty gynecological disorders. Conditions for Entitlement: 1. A woman employee must have rendered continuous aggregate employment service of at least six (6) months for the twelve (12) ‘months immediately prior to the surgery 2. She has filed an application for special leave with her employer within a reasonable period of time from the expected date of surgery or within such period as may be provided by company rules and regulations or collective bargaining agreement; and 3. She has undergone surgery due to gynecological disorders as certiied by a competent physician. R.A. No. 9262 or the Anti-Violence Against Woten and their Children Act of 2004 Violence against women and their children refers to any act or a series of acts committed by any person against a woman who is his wife, former wife, or against a woman with whom the person has or had a sexual or dating relationship, or with whom he has a common child, or against her child whether legitimate or illegitimate, within or without the family abode, which will result in or is likely to result in physical, sexual, psychological harm or suffering, or economic abuse including threats of ‘such acts, battery, assault, coercion, harassment (or arbitrary deprivation of liberty. (R.A. 9262 "Anti- Violence Against Women and Their Chilaren Act of 20047) Coverage: ‘Allows the victim of violence, which may be physical, sexual, or psychological, to apply for the issuance of a protection order. If such victim is an employee, she is entitled tc a paid leave of up to 40 days in addition to other paid leaves under the Labor Code, other laws and company policies. Conditions to entitlement 1. The employee has to submit a certification from the Punong Barangay or Kagawad or Prosecutor or Clerk of Court that an action under RA 9262 has been fled and is pending. 2. The use ofthe 10-day leave is atthe option of the employee 3. It shall be used for the days that she need to attend to medical and legal concerns. 4. Leaves not availed of are non-cumulative and not convertible to cash. Avaiiment Leave of up to ten (10) days in addition to other paid leaves under the Labor Code, or other laws. (Sec. 43, RA 9262) DB. OUPS OF E! Ss 4. Women a) Discrimination Unlawful for any employer to discriminate against ‘any woman employee with respect to terms and ‘conditions of employment solely on account of her ‘sex (Labor Code, Art 135) Acts of Discrimination 1, Payment of a lesser compensation, including wage. salary or other form of remuneration and fringe benefits, to a fernale employees as against a male employee, for work of equal value 2, Favoring a male employee over a female employee with respect to promotion, training opportunities, study and scnolarship grants solely on account oftheir sexes ‘a, Person guily of commiting these acts are criminally able under Arts. 288-289 of the Labor Cove 'b, That the institution of any criminal action under this. provision shall not bar the aggrieved employee from fing an entirely separate and distinct action for money claims, which may include claims for damages and other affirmative relefs. The actions hereby authorized shall proceed independently of each other. PAGE SOOF 283.Pe ee ee ee ee eee ee ee ee 8 eden ATENEO CENTRAL BAR OPERATIONS 2018 — 3. Favoring a male applicant with respect to hiring where the particular job can equally be handled by a woman; and _ Favoring @ male employee over a female employee with respect to dismissal of personnel ') Stipulation Against Marriage |X shall be unlawful for the employer: 1. To require as @ condition of employment or Continuation of employment that a woman employee shall not get married; 2. To stipulate expressly or tacitly that upon getting married, a wornan employee shall be deemed resigned or separated 3, To actually dismiss, discharge, discriminate or ‘otherwise prejudice a woman employee merely by reason of her marriage (Labor Code, Art, 136) Jurisprudence: Stipulations on Marriage 1. Philippine Telegraph and Telephone Company v. NLRC (G.R. No. 118978, 1997) twas declared here that the company palicy ‘of not accepting or considering 2s disqualified from work any woman worker who contracts ‘marriage runs afoul ofthe test of, and the right against, discrimination afforded all women workers by our labor laws and by no less than the Constitution. Star Paper Corp. v. Simbol, (G.R. No. 164774, 2006) ‘The following policies were struck down as invalid for violating the standard of reasonableness which is being followed in our jurisdiction, otherwise called the “Reasonable Business Necessity Rule": i) New applicants wil not be alowed {0 be faced in case helshe has (a eave, up to tthe) 3 degree of relatofshp, already employed by the company LABOR LAW Wi) In case of two of our employees (both singles [sic], one male and another female) developed a friendly relationship during the course of their employment and then decided to get married, one of them should resign to preserve the policy stated above 3. Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc (G.R. No. 162994, Sept. 17, 2004) In this case, the prohibition against mariage. embodied in the following stipulation in the employment contract was held as vali: “10. You agree to disclose to management any ‘existing or future relationship you may have, either by consanguinity or affinity with co- employees or employees of competing drug companies. Should it pose a possible confict of interest in management discretion, you agree to resign voluntarlly fiom the Company ‘as a matter of Company policy.” The Supreme Court ruled that the dismissal ‘based on this stipulation in the employment contract is a valid exercise of management prerogative. The prohibition aainst personal ‘or marital relationships with employees of Competitor companies upon its employees was held reasonable under the circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, the employer only aims to protect its interests ‘against the possibilty that a competitor ‘company will gain access to its secrets and procedures. Bona fide occupational qualification exception ‘When the employer can prove that the reasonable demands of the business require a distinction based on marital status and there is no better available or acceptable policy which would better accomplish the business purpore, an emaloyer may discriminate against an employee based in the identity of the employee's spouse. (Star Paper Corp. vs. Simbol, G.R. No. 164774, 2006) PAGE 5t OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 — The Court sustained the validity of employer policy Prohibiting an employee from having a personal or mantal relationship with an employee of a Competitor. The prohibition was reasonable under the circumstances because relationships of such Ralure might compromise the interests of the Company. (Duncan Association of Detailmen v. Glaxo Wellcome, G.R. no. 162994, 2004) Classification of Certain Women Workers ‘Any woma’ who is permitted or suffered to work, with or without compensation, in any night cub, ‘Cocktall lounge, massage dinic, bar or similar establishments under the effectve contol or Supervision of the employer for substantial period of time as determined by the Secretary of {Labor and Employment, shale considered as an ‘employee of such establishment for purposes of tabor and socal egislation. (Labor Code, Ar. 138) ©) Prohibited Acts Art. 137 Prohibited Acts (DEP-R-TeC) is untawul for any employer: ‘&To.Deny any woman the benefits provided for Under the Code . To discharge any woman employed by him for the purpose of preventing such woman from Enjoying the materity leave, facities. and cther benefits provided under the Code © To discharge such woman employee on ‘account of her Pregnancy, or while on leave or in confinement due to her pregnancy (De! Monte v. Velasco, G.R. No, 153477 (March 6, 2007) 4. To discharge or reuse the admission of such woman upon Returning to her work for fear that she may be pregnant @. To discharge any woman or child or any other ‘employee for having fied a complaint or having Tested or being about to testty under the Code 1. To require as a Cendition fora continuation of temployment that a woman employee shall not get married oto stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, orto actualy dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage LABOR LAW 4) Sexual Harassment ‘Where Committed (WET) Working b. Education © Trainirg environment Who Commits (MEE-PATIS-COT) 1. Manager 2 3 4 5. Agent of the employer 6. Teacher 7. Instructor 8. Supenisor 9. Coach 10. Trainer 11, Any Other person having authority, influence ‘or moral ascendancy over another (R.A. No. 7877, Sec. 3) How Committed Person lable demands, requests, or otherwise equires any sexual favor from the other, fegardless of whether the demand, request or Fequirement for submission is accepted by the later. It is not necessary that a demand, request or ‘requirement of sexual favor be articulated in a Categorical oral or written statement. It may be discerned, with equal certitude, from acts of the offender. (Domingo v. Rayala, G.R. No. 155831, 2008). Its also not essential that the demand, request, or ‘equirement be made as a condition for continued ‘employment orf promotion to a higher position Weis enough that the offenders acts result in ‘eating an intimidating, hostile, oF offensive environment for the employee. (Domingo v. Rayala, G.R. No, 155831, 2008) PAGE 52 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 Wrork-RetatedEmployment Environment, Sexual Harassment Committed When 1. The sexual favor is made as a condition & In hiring or in the employment, Feemployment or continued employment f said individual | granting said individual favorable compensation, terms, conditions, promotions or privileges ©. The refusal to grant the sexual favor results in limiting, segregating or Classifying the employee which in any way would discriminate, deprive or diminish ‘employment opportunities or otherwise adversely affect said employee 2, The above acts would impair the employee's fights or privileges under existing labor laws. 3. The above acts would result in an intimidating, hostile or offensive environment for the employee. (Sec. 3fa}) Education or Training Environment, Sexual Harassment Committed When 1. The sexual favor is made as a condition: 2. The above acts would impair the employee's Tights or privileges under existing labor laws. 3. The above acts would result in an intimidating, hostile or offensive environment for the employee. (Sec. 3{a)) Duty of Employer 1. Promulgate appropriate rules and regulations prescribing the procedure for investigation of sexual harassment cases “as well as guidelines on proper decorum in the workplace. 2. Create a committee on decorum and investigation of cases on sexual harassment. (Sec. 4) Liability of Employer / Head of Office Solidarily liable for camages arising from the acts, of sexual harassment committed in the ‘employment, education or training environment if the employer is informed of such acts by the offended party and no immediate action is taken. Prescriptive period to file action: 3 years (Sec. 7) LABOR LAW SS ¢) Facilities tor Women The DOLE Secretary may require employers to: + Provide seats proper for women and permit them to use such seats when they are free from work and during working hours, provided they can perform their duties in this position without detriment to efficiency + Establish separate tollet rooms and lavatories for men and women and provide at least a iressing room for women + Establish a nursery in a workplace for the benefit of the women employees therein + Determine appropriate minimum age and other standards for retirement or termination in Special occupations such as those of flight attendants and the ike (Labor Code, Art. 132) Family Planning Services; incentives for Family Planning Employers who habitually employ more than 200 workers in any locality shall provide free family- planning services to their employees and their ‘Spouses which shal include but not limited to, the application or use of contraceptives (Labor Code, Art. 134) PAGE 53 OF 28ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW ene 2. Minors (R.A. No, 7610, as amended by R.A. No. 9231) Berry Below 15 1. When the child works directly under the sole responsibilty of his/her parentsilegal ‘guardian and where only members of his/her family are employed, under the f conditions: + employment does not endanger the child's life, safety, health and morz!s ‘+ employment does not impair the child's normal development; and + the parentlegal guardian provides the child with primary/secondary education 2. When the child's employment or participation in public entertainment or information through cinema, theater, radio or television is essential, provided that: ‘+ the employment contract is concluded by the child's parents/legal guardian, with the express agreement of the child concerned, if possible, and the approval of the DOLE + the following requirements are complied with: © employer shall ensure protection, health, morals, and normal development of the child © employer shall institute measures to prevent child's exploitation / discrimination taking into account the system and level of remuneration, duration, and arrangement of working time (© employer shall formulate and implement a continuing program for training and skills acquisition of the child, subject to approval and supervision of competent authorities (as amended by RA 9231) In these two cases: employer must first secure a work permit from the DOLE before engaging the child | | 16 = Below 18 "ALLOWED ONILY in: non-hazardous or non-deleterious undertakings: “Hazardous Workplaces” 4. Nature of'the Work exposes the workers to dangerous environmental elements, contaminants “or work conditions, on wor, logging, fre-fahting, mining, gulch, | blast work, deep Sed fishiig, and mechanized farming’ 3. Workers “ai jed in the manufacture or handling of explosives and other pyrotechnic products 4. Exposed to or use of heavy power-driven machinery or equipment '5._Workers use or are exposed to power-driven tools PAGE S4 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 Sn Regulation of working hours af a child 15 AND f emcee sso E) Not more. than 4 hours. DAY Risa pm to arn | 10pmo 6am of the }of the following day | following day Peo Employment of the child in public entertainment (please refer to the table above) Prohibition on the employment of children in certain undertaking = and certain advertisements NO CHILD shall be employed as a nodel in any advertisement —directly/indirectly promoting alcoholic beverage, intoxicating drinks, tobacco ‘and its byproducts, gambling or any form of violence or pomography. (See. 5) Prohibition against worst forms of child labor “Worst forms of child labor’ 4. Allforms of slavery 2. Prostitution 3. Production and trafficking of dangerous drugs and prohibited votatile substances 4. Work which by its nature or the circumstances in which it is carried out is hazardous or likely to be harmful to the health, safety, or morals of children (Sec. 3) LABOR LAW 3, Kasambahay Law (R.A. No. 10361) Coverage ‘This Act applies to all domestic workers employed ‘and working within the country. a) Definition Doinestic worker or “Kasambahay’ refers to any person engaged in domestic work within an employment relationship such as, but not limited to, the following: general househelp, nursemaid or "yaya". cook, gardener, or laundry person, but shall exclude any person who performs domestic ‘work only occasionally or sporadically and not on ‘an occupational basis. (R.A. No. 10351, Sec. 2{a)) b) Benefits accorded to househelpers Rights and privileges of domestic worker: ‘a. The domestic worker shall not be subjected to any kind of abuse or any form of physical violence or harassment or any act tending to degrade his or her dignity. b. The employer shall provide for the basic necessities of the domestic worker to includ at least three (3) adequate meals a day and humane sleeping arrangements that ensure safely. &. Respect for the privacy of the domestic worker shall be guaranteed at all times and shall extend to all forms of communication and personal effects. 4d. The employer shall grant the domestic worker ‘access to outside communication during free time, €. The employer shall afford the domestic worker the opportunity to finish basic education and may allow access to altemative leaming systems and, as far as practicable, higher education or technical and vocational training, f. All communication and information pertaining to the employer or members of the household shall be treated as privileged and confidential, and shall not be publicly disclosed by the domestic worker during and after employment PAGE 55 OF 283,ATENEO CENTRAL LABOR LAW BAR OPERATIONS 2018 rata 4. Leave benefits Employment contract ‘An employment contract shall be executed by and between the domestic worker and the employer before the commencement of the service in @ language or dialect understood by both parties and shall include the follovzing: the kasambahay's duties and responsibilities period of employrnent ‘compensation authorized deductions working conditions. Termination of employment ‘any other lewiul condition agreed upon by both parties. (Sec. 11) Note: A kasambahay assigned to work in a commercial, industrial or agricutural enterprise, willbe entitled to the applicable minimum wage for agricultural or non-agricultural workers. Pre-employment requirements: 1. Medical certificate or a health certificate issued by a local goverment health officer 2. Barangay and police clearance 3. NBI clearance 4. Duly authenticated birth certificate or if not available, any other document showing the age of the domestic worker such as voter's identification card, baptismal record or passport. (Sec. 12) Terms and conditions of employment 4. Minimum Wage ‘+ Those employed in the National Capital Region ~ P2,500 a month + Those employed in chartered cities and first class municipalities ~ P2,000 a month + Those employed in other inuricipalities — 1,500 a month 2. Rest period + Daily rest period ~ aggregate of 8 hours per day + Weekly rest period - at least 24 consecutive hours of rest in a week 3. Thiteerth month pay + The domestic worker s entiled to 13” ‘month pay as provided for by law «A domestic worker who has rendered at least 1 year of service shail be entitled tO ‘an annual service incentive ‘eave of 5 days with pay. Any unused portion of said annual leave shall not be cumulative or carried over to the succeeding years. Unused leaves shall not be convertible to cash. 5, Social and other benefits «A domestic worker who has rendered at least 1 month of service shall be covered by the Social Secunty System (SSS), the Philippine Health Insurance Corporation (Philtieatt), and the Home Development Mutual Fund or PagrIBIG, and shall be entitled to all the benefits in accordance with the pertinent provisions provided by law. + Premium payments or contributions shall be shouldered by the employer. However, if the domestic worker is receiving a wage of 5,000.00 and above per month, the domestic worker shail pay the proportionate share in the premium payments or contributions. ©) Termination of Employment ‘A Initiated by the domestic worker 1 Verbal“or emotional abuse of the domestic worker by the employer or any member of the household Inhuman treatment including physical abuse of the domestic worker by the employer or any ‘member of the household ‘Commission of a crime or offense against the domestic worker by the employer or any member of the household Violation by the employer of the terms and Conditions of the employment contract and ‘other standards set forth under this law Any disease prejudicial to the health of the domestic worker, the employer, or memberis of the household Other causes analogous to the foregoing (Sec. 32) PAGE 56 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW Tae Mt the domestic worker leaves without is aie Teason, any unpaid salary due nol Terenen gth® ecuivalent 15 days work shall be feted. In addition, the employer may recover from the domestic ‘worker costs incurred related to ‘the deployment expenses, provided that the Service has been terminated within € months from the domestic worker's employment, B. Initiated by the employer : 1. Misconduct or wilful disobedience by the domestic worker of the lawful order of the ‘employer in connection with the former's work Gross or habitval neglect or ineficiency by the domestic worker inthe performance of duties Fraud or wilful breach of the trust reposed by tne employer on the domestic worker Commission of a ciime or offense by the domestic worker against the person of the employer or any immediate member of the ‘employers family 5. Violation by the domestic wotker ofthe terms ‘and conditions. of the employment contract and other standards set forth under this law 6. Any disease prejudicial to the health of the domestic worker, the employer, or members of the household 7. Other causes analogous to the foregoing (Sec. 34) 4) Reliefs for unjust termination If the domestic worker is unjustly dismissed, the domestic worker shall be paid the compensation already earned plus the equivalent of 1S days work bby way of indemnity 2) Penalties ‘Any violation of R.A. No, 10391 declared unlawul ‘shall be punishable with a fine of not ess than Ten thousand pesos (P10,000.00) but not more than Forty thousand pesos (P40,000.00) without prejudice tothe fing of appropriate civil or criminal action by the aggrieved party 4, Homeworkers, 2) Definition Homeworker Applies to any person who performs industri homework for an employer, contractor or sub- contractor Industrial Homework Industrial Homework is. a system of production ‘under which werk for an employer or contractor is carted out by @ homeworker at hisiher home. Materials may or may not be furnished by the ‘employer or contractor, It differs from regular factory production principally in that it 8 a decentralized form of production where there 1s ordinarily very litle supervision or regulation or methods of work. (0.0. No. 05-92, Sec. 2a) Industrial Homeworker ‘System of production under which work for an employer or contractor is carried out by a homeworker at his/her home. Materials may or may not be furnished by the employer or ‘contractor (Labor Code, Art. 154) Employer of Homeworker Includes any person, natural or artificial who, for his account or benefit, ot on behalf of any person residing outside the country, directly or indirectly, oF through an employee, agent contractor, sub- contractor or any other person: , oF causes to be delivered, any goods, articles or materials be processed of {fabricated in or about a home and thereatter to ‘be retumed or to be disposed of or distributed in accordance with his directions + Sells any goods, articles or materials to be processed oF fabricated in or abou: a home and then re-buys them after such processing (r fabrication, either by himself or through some other person (0.0. No. 05-92) PAGE 37 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 b) Rights homeworkers Immediately upon receipt ofthe finished goods or Tues. the employer shall pay the homeworker of {he contractor or subcontractor, a8 the cane may Pe. for. the work periormed less comrespo ing Pomeworkers' share of SSS, MEDICARE ANG ECC premium contributions which shall te (emitted by the contractorsubcontractor or fmbloyer to the SSS withthe employers share, However, where payment is mede to a contractey ‘F subcontractor, the homeworker shall ikewise be Paid immediately after the goods or articles have een collected from the workers. (0.0. No. 05-92, Sec. 6) and benefits accorded to ©) Conditions for homeworker's earnings No employee, contractor, or sub-contractor shall make any deduction from the homeworker's €amings for the value of materials which have been lost, destroyed, soiled or otherwise damaged unless the following conditions are met: * The homeworker concerned is clearly shown {0 be responsible for the loss or damage; * The employee is given reasonable opportunity lo show cause why deductions should not be made; + The amount of such deduction is fair and ‘reasonable and shall not exceed the actual loss or damages; and ‘+ The deduction is made at such rate that the ‘amount deducted does not exceed 20% of the homeworkers earnings in a week deductions from Liability of employer and contractor Whenever an employer shall contract with another for the performance of the employer's work, it shall be the duty of such employer to provide in such ‘contract thatthe employees or homeworkers of the contractor and the latter's sub-contractor shall be aid in accordance withthe provisions of this Rule. LABOR LAW ee Inthe event that such contractor or sub-contractor {ais to pay the weges or eamings of his Employees or homeworkers, such employer shall bbe Jointly and severally iable withthe contractor or ‘sub-contractor to the werkers ofthe latter, to the extent that such work is performed under such Contract, in the same manner as ifthe employees oF homeworkers were directly engaged by the employer Prohibitions for Homework 1. Explosives, fireworks and artes of like character 2. Drugs and poisons 3. Other articles, the processing of which ‘requires exposure to toxic substance 5. Night Workers RA. No, 10151 ‘An Ac Allowing the Employment of Night Workers, Thereby Repealing Arices 130 and 131 of Presidential Decree Number Four Hundred Forty- ‘Two, as amended, otherwise known as the Labor Code of the Philippines, 2011 ‘This new Republic Act provides that women can ‘now work on night time, Coverage ‘Allpersons, who shall be employed or permitted or Suffered to work at night, except those employed in agricuture, stock raising, fishing, martime {transport and inland navigation, during a period of ‘not less than seven (7) consecutive hours, including the interval from midnight to five o'clock in the morning, to be determined by the Secretary of Labor and Employment, after consulting the Workers’ representative/labor organizations and employers. Night Worker means any employed person whose work requires performance of a substantial ‘number of hours of night work which exceeds a Specified limit. This limit shall be fixed by the Secretary of Labor after consulting the workers represeniativellabor organizations and employers.” PAGE 58 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 Heath Assessment At tho rogues worker sal hve the I werRrs anal have the right 1 Uunrgo sheath saosin not crepes lorecave adv on how ores or svocheath bie associ wah hr wok 2° Before ting pan aspen, 8 9 gh worker; ™ > bn eguer gon ng © I they experience heath protien aunng such an asignment wich ae at cused by facies thee han the pevomance of right won With the exception of a finding of unfitness for night work, the findings of such assessments shall ‘Not be transmitted to others without the workers Consent and shall not be used to their detriment. intervals during such an Mandatory Facilities Suitable first-aid facilities shall be made available for workers performing night work, including ‘arrangements where such workers, where necessary, can be taken immediately to a place for appropriate treatment. The employers are likewise required to provide safe and healthful working conditions and adequate or reasonable facilties such as sleeping or resting quarters in the ‘astablishment and transportation from the work Premises to the nearest point of their residence subject to exceptions and guidelines to be provided by the DOLE. ‘Transfer Night workers who are certified as unfit for night ‘work, due to health reasons, shall be transferred, whenever practicable, to a similar job for which they are fit to work. If such transfer to a similar job is not practicable, these workers shall be granted the same benefits as other workers who are Gnable to work, or to secure employment during such periad, A night worker certified as temporarily Unfit for night work shall be given the same protection against dismissal or notice of dismissal as other workers who are prevented from working for reasons of health. PAGE 59 OF 2 LABOR LAW Compensation ‘The compensation for night workers in the form of working time, pay oF similar benefits shall recognize the exceptional nature of night work Social Services Appropriate social services shall be provided for night workers and, where necessary, for workers performing night work. Night Work Schedules Before introducing work schedules requiring the services of night workers, the employer shail consult the workers’ "representatives/labor ‘organizations cancemed on the details of such Schedules and the forms of organization of night work that are best adapted to the estaolshment and its personnel, as well as on the occupational health measures and social services which are required. In establishments employing night workers, consultation shall ake place regularly. CBA provision vis-t-vis overtime work CBA may stipulate higher overtime pay rate The basis of computation of overtime pay beyond that required by Art. 87 of the Labor Code must be the collective agreement. It is not for the court to impose upon the parties anything beyond what they have agreed upon which is not tainted with ilegality. On the other hand. where the parties fal to come to an agreement, on 2 matter not legally required, the court abuses its discretion when it obliges any of them to do more than what is legally obliged. (PNB v. PNB Employee's Assoc., G.R. ‘No, L-30279, 1982). a a i aATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW orn it Pregnant Women Measures shall be taken to ensure that an alternative to night work is available to women workers who would otherwise be called upon to perform such work — 4. Before or after childbirth, for a period of at least 16 weeks, which shall be divided between the time before and after childbirth; 2, For additional periods in respect of which medical certificate is produced stating that S8id additional periods are necessary for the health of the mother or the child ~ @. During pregnancy b. Determined by DOLE after consultation with employer and labor representatives ‘During the periods referred to in this article: a. A woman worker shall not be dismissed or given notice of dismissal, except for just or authorized causes provided for in this Code that ere not connected with pregnancy, childbirth and childcare responsibilities, b. A woman worker shall not lose the benefits regarding her status, seniority, and access to Promotion which may attach to her regular ‘ight work position Pregnant women are allowed to work at night only ‘t 2 competent physician other than the company physician shall certify their fitness to render night work, and specify the period of the pregnancy that they can safely work The measures referred to in this article may include transfer to day work where ths is possible. the provision of social security benefits or an extension of maternity leave. The provisions of this article shall not have the effect of reducing the Drotection and benefits connected with maternity leave under existing laws. 6. Migrant Workers (R.A. No. 8042 or the Migrant Workers and Overseas Filipinos Act of 1995, as amended by R.A. No, 10022) a) Claims for Compensability of Work-Related Death, Sickness, or Disability ‘See Pert Il of reviewer. PAGE 60 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW SON 20 7, Apprentices and Learners roe Pea Persons hired as trainees in semi- skilled and | 1. Practical training on the job ‘other industrial occupations | 2. Supplemented by related 2. Nen- apprenticeable | 3. theoretical 3. May be leamed through practical training on | 4. instruction the job in a relatively short period of ime |S. Covered by @ 6 Whitten apprenticeship agreement with an 4. Shall not exceed 3 months | individual employer or entity 7. Needs DOLE approval | 8. Shall not exceed 6 months | Training Agreement Governed by Learnership Agreement [ Apprenticeship Agreement ‘Occupation _ Tsamable occupations consisting of semrskiled | Apprenticeable occupations or any trade, form of ‘and other Industrial occupations which are non- | employment or occupation approved for apprenticeable apprenticeship by the DOLE Secretary ‘Theoretical instructions Toamership may oF may hol be supplemented by | Apprenticeship should always be supplemented by related theoretical instructions | related theoretical instructions Ratio of theoretical instructions and on OJT For bath: he normal ratios one hundred (700) hours for every two thousand 2,000 hours of practical or on-the-job training Competency-based system Tis required that learnership be implemented on ] Not required the TESDA-approved competency-based system Duration of raining Notexcesding tree (8) months of practical taining | More than three (3) months, but rot over six (6) months Qualifications “Ant. 59 of the Labor Code: 1. Be at least fifteen (15) years of age; (IRR and R.A. 7610, as amended by R.A. 7658) | 2, Possess vocational aptitude and capacity for appropriate tests; and 3. Possess the ability to comprehend and follow ‘oral and written instructions, Circumstances justifying hiring of trainees qa TA Prerequisites belore learners may be | Law does not expressly mention any validly employed 1 When no experienced workers are available; | 2. The employment of leamers is necessary to prevent curtailment of employment opportunities; and 3. The employment does not create unfair competition in terms of labor costs or impair or lower working standards Taw does not mention any qualification imitation on the number of trainees PAGE 61 OF 285ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW percent (20%) ofits total regular workforce InTeamership, a participating enterprise is allowed | No similar cap is imposed in the case of to take in learners only up to a maximum of twenty | apprenticeship | i Option fo employ the lapse of the leamership period: ‘The enterprise is obliged to hire the learner after | The enterprise is given only an “oplion’ to hire the | apprentice as an employee. ‘Wage rate wage. Requisites for a Valid Apprenticeship 41. Qualifications of apprentice are met 2. The apprentice earns not less than 75% of the prescribed minimum salary 3. Apprenticeship agreement duly executed and signed 4. Apprenticeship program approved by the ‘sec. Of labor; otherwise, the apprentice shall be deemed as a regular employee 5. Period of apprenticeship not exceed 6 months ‘At the termination of the apprenticeship, employer is nol required 0 continue. the employment Employer may not pay wage ifthe apprenticeship is: ‘A requirement for graduation. Required by the Schoot Required by the Training Program Curriculurn Requisite for Board examination pegs ‘Art. 63, Labor Code. Venue of Apprenticeship Programs The plant, shop, premises of the employer or firm concerned if the apprenticeship program is ‘organized by an individual employer or firm, The premises of one or several firms designated for the purpose by the organizer of the program if such organizer is an association of employers, ‘civic groups and the like DOLE training center or other public training institutions with which the Bureau has made appropriate arrangements, Contents of Learnership Agreement +, Names and addresses of employer and learner The wage rate of a learner or an apprentice is sel at seventy-five percent (75%) of the statutory minimum 2. Occupation to be learned and the duration of the training period which shall not exceed 3 months 3. Wage of the learner which chall be at least 75% of the applicable minimum wage 4. Commitment to employ the learner, if he so desires, as a regular employee upon completion of training (Labor Code Art. 75) A leamer who has worked during the first two months shall be deemed a regular employee if training is terminated by the employer before the tend of the stipulated period through no fault of the learner. 8. Disabled Workers. Handicapped Workers ‘Those whose eaming capacity is impaired by age or physical or mental deficiency or injury, disease orillness. (Art. 78, Labor Code) There must be a link between the deficiency and the work which entitles the employer to lessen the worker's wage. Ifthe disability of the person is not in any way related to the work for which he was hired, he should not be so considered as a handicapped worker. PERSONS WITH DISABILITY (R.A. No. 7277, as Amended by R.A. No. 9442) Persons with Disability 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 baing, Impairment refers to any loss, diminution or aberration of psychological, physiological, or anatomical structure or function, PAGE 62 OF 283ATENEO CENTRAL. BAR OPERATIONS 2018, : LABOR LAW TABOR LAW Disability means, @ A physical or mental impairment that Substantially limits one or more Psychological, physiological or anatomical functions of an individual or activities of such individual: DA record of such an impairment, or © Being regarded as having such an impairment Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disabiity that limits or Prevents the function or activiy that is considered Pormal given the age and sex of the inoividual When Employable 1. their employment is necessary to prevent curtailment of employment opportunities, 2. does not create unfair competition in labor costs, ana 3. does not impair or lower working standards. Handicapped workers may be hired as apprentices or learners if their handicap is not Such as to effectively impede the performance of job operation in the particular position for which they are hired. Handicapped Workers May Become Regular Employees ~ if thei handicap is not such as to effectively impede the performance of job operations in the particular occupations for which they were hired Rules on Handicapped Workers Handicapped workers may be employed when: 1. Their employment is necessary to prevent curtailment of employmeni opportunities 2. Does not create unfeir competition in labor costs 3. Does not impair or lower working standards (Labor Code, Ant 79) Employment Agreement; Contents 1, Names and addresses of the employer and the handicapped worker 2. Rate of pay of the handicapped worker which shall not be less than 75% of the legal ‘minimum wage 3. Nature of work 10 be performed by the ‘handicapped worker 4. Duration of the employment (Labor Cade, Art 80) a) Equal Opportunity for Employment No disabled person shall be denied access to Opportunities for suitable employment. Qualified disabled employees shail be subject to sat termis and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able-bociied person What are the rights of PWDs? Under the law, PWOs are entitled to equal ‘opportunity for employment. Consequently, no PWO shall be denied access to opportunities for ‘suitable employment. A qualified employee wih disability shall be subject to the same terms and conditions of employment and te same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able-bodied person, What is the wage rate of PWOs? The wage rate of PWDs is 100% of the applicable ‘minimum wage. What is the wage rate of PWO if hired as apprentice or learner? ‘APWD hired as an apprentice or learner shall be aid not less than seventy-five percent (75%) of the applicable minimum wage PAGE 63 OF 285ATENEC CENTRAL EAR OPERATIONS 2018 'b) Diser'mination on Employment What is the rule on discrimination against employment of PWDs? No. entity, whether public or private, shall discriminate against a qualified PWU by reason ‘of disability in regard to job application procedures, the hiring, promotion, of discharge of employees, employee compensation, Job training, and other terms. conditions| and privileges of employment. (RA 7277, Sec. 32) The following constitute acts of .crimination: +. Limiting, segregating or classifying 2 job applicant with disability in such a manner that duversely affects his work opportunities; 2. Using qualification standards. employment tests or other selection criteria that screen out or tend to screen out a PWD unless such Standards, tests of other selection criteria are Shown to be job-related for the position 1” question and are consistent with business necessity 3. Utilizing standards, administration that 14. dave the effect of discrimination on the bas criteria, or methoos of sis 5, perpetuate the discrimination of others who pre subject to common administrative control 6. Providing less compensation, such as salary Wage or other forms of remuneration 208 Tange benefits, fo 2 qualified employee wi Treaty, By reason of his disabity, than (he seount to which a non-cisabled person performing the same work is entitled: 7. Favoring @ non-disabled employee over Faalied employee wih disabity wih resp cuairnatin, waining opportunities, SCY {© Preholarship grants. solely on account Of the latter's disabilty a. Re-assigning or transferring 3n employee Re ae abiny 108 pb oF position he Cannel periorm by reason of his asa LABOR LAW 9. Dismissing or terminating the services of an ‘employee with disabilty by reason of his disabiity unless the employer can prove that he impairs the satisfactory performance of the work involved to the prejudice of the business entity; provided, however, that the ‘employer first sought to provide reasonable ‘accommodations for persons with disabilly 10. Falling to select or administer in the most ttfective manner employment tests which accurately reflect the skills, aptitude of otner factor of the applicant or employee with disabilty that such tests purports tomeasure. father than the impaired sensory, manual OF Speaking skils of such pplicant °F employee, if any; and 11. Excluding PWO from memt Unions or similar organizations. bership in labor ¢) Incentives for Employers (Sec: 6) jerticipation of the To encourage the active Pp: ‘welfare of disabled private sector in promoting the Birsons and to ensure gainful employer (OF Pusified disabled persons, adequate incertn sret he provided to private entities which employ disabled persons. mploy disabled persons who vy the required skils or qualifications. ether 2s regular employee, apprentice oF learner Sha) Oe realed to an addtional deduction, from “ney eipcome, equivalent to 25% of the {ola ross at paid os salaries and wages to disabled persons, Private entities that e that improve or modify their in order to provide reasonable ‘for disabled persons shall also rdditionel Ceduction from their rquivalent to 50% of the ‘or modifications. Private entities physica! facities accommodation bbe enlitled to an at ret taxable income, & Girect costs of the improvements end of topicATENEO CENTRAL BAR OPERATIONS LABOR LAW 2018 fe eter WV. POST-EMPLOYMENT TOPIC OUTLINE UNDER THE syLLABUS A: Employer-omployee relationship {. Tests to determine employer-employee relationship 2. Kinds of employment 3 Subsontracting versus Labor-Only Contracting a) Flements 4) Trilateral Relationship ©) Solidary Liability 8. Termination of Employment C. Termination by Employee 1. Resignation versus Constructive Dismissal D, Termination by Employer 4. Just Causes 2. Authorized Causes 3. Due Process a) Twin-Notice Requirement b) Hearing; Ample Opportunity to be Heard E. Reliefs from illegal Dismissal F. Preventive Suspension G. Retirement A. EMPLOYER - EMPLOYEE RELATIONSHIP “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. (Labor Code, Ant 219[e}) Employee" ixcludes any person in the employ of an emoloyer. The tern shall not be lmnited to the employees of a particular emoloyer, unless the Code so expliaily states. it shall include any individual whose work has ceased as a result of ‘rn connection ath any current labor dispute or because of any unfair labor practice fhe has not obtained any other substantially equivalent and regular ernployment. (Labor Code. At. 219/f) '\ 8 axiomatic that the existence of an employer- employee relationship cannot be negated by e»pressly repudiating it in the management contract and providing therein that the ‘employee" is an independent contractor when the terms of agreement clearly show cthenmse. 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 18s to be applied (Insurence Life Assurance Co. v. NLRC, GR No 11930, 1998) Authority of DOLE Secretary to determine Employer-Employee Relationship (EER) The DOLE Secretary has the authority to determine the existence of an employer- employee relationship. Under Article 128(b) of the Labor Code, as amended by RA 7330, the DOLE 4s fully empowered to make a determination as to the exercise of an employer- employee relationship in the exercise ot its visitorial and enforcement power, subject to judicial review, not Feview by the NURC. (People's Broadcasting Service v Secretary of Labor, GR 179652, 2012)ATENEO CENTRAL BAR OPERATIONS 2018 ‘TESTS TO DETERMINE EMPLOYER. EMPLOYEE RELATIONSHIP FOUR-FOLD Test The oxistence of an employer-employee ‘elatonship (EER) is ultimately a question of fact '1 detormiing the existence of an EER, the Cloments that are generally considered Comprises the so-called “fourfold lest,’ namely 1. The selection and engagement of the employee (Hiring); @ Employment relation arises from Contract of hire, express or implied (Ruga v. NLRC, GR. No. L-72654-61, 1990) b. Selection and engagement of the workers rests with the employers. 2. Payment of wages Not a conclusive test since it can be avoided by the use of subcontracting ‘agreements or other contracts other than employment contracts, b. Payment of compensation by way 31 commission does not miltate against the conclusion that EER exists. Under ‘Att, 97 of the Labor Code, “wage” shall ‘mean “however designated, capable of being expressed in terms of money, whether fixed or ascertained on atime, task, price or commission basis.” (Insular Life Assurance Co, Lid v NLRC, G8 No. 119930, 1998) ©. EER not determined by basis of ‘employee's compensation. (Labor Congress v. NLRC, G.R. No, 123938, 1998). 3. The power of dismissal (Firing) a. Disciplinary power exercised by employer over the worker and the cortespondirg sanction mposedin case of violation of any of its rules and regulations, 4 The employer's power to control the ‘employee with respect to the means and method by which the work is to be accomplished (Control) a, The most ‘mportant factor is the control test, Under the control test there is an LEK atte the persis: for whom the PAGE 660 LABOR LAW ———______ Services are performed reserves the ‘ght to control not only the end to be achieved but also the manner and means used to achieve the end. ("Brotherhood" Labor Unity Movement Phis. v Zamora, GR No L-AB645, 1987; Television and Production Exponents, Inc. v. Servana, GR. No 167648, 2008) the control test calls forthe existence of the right to control the manner of doing the work, not the actual exercise of the right. (Dy Keh Beng v Intl Labor & ‘Manne Union of the Phi, GR. No. L 32245, 1979) © There could be no EER where “the element of control is absent; where Person who works for another does so more oF less at his own pleasure and is ‘ot 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, we should not find that the relationship of amployer- ‘employee exists." (Filoines Broadcasting Network, Inc. v. NLRC, G.R. No. 118892, 1998) Concept of Control over insurance Agents — NOT Control in Labor Law a. The fact that private respondent was Tequired to solicit business exclusively for petitioner could hardly be considered as Control in lator jurisprudence. Under Memo Circulars No. 2-81 and 2-85 istued by the Insurance Commissioner, insurance agents are barred from serving ‘more than one insurance company, in order to protect the public and to enable insurance companies to exercise exclusive supervision over their agents in their solicitation work, Thus, the exclusivly restriction springs from a regulation issued by the Insurance Commission, and not trom an intention by pettioner to establish control over the: method and manner by which private respondent shail accomplish his. work This 1s not meant to change the nature of the relationship between the parties, nor does it necessarily imbue such Fetauinnstyp with the quality of controlATENEO CENTRAL, BAR OPERATIONS 20118 ee SFSsSsS—S—FfFsCtFf envisioned by the law (AFP Mutual Benefit Association v. NLRC, GR. No. 102499, 1997) That pnvate respondent was bound by company policies, memo/eirculars, rules and regulations issued from tine to time 's also not indicatwe of control. With regard to the teintorial assignments given to sales agents, this 100 cannot be hheld as indicative of the exercise of control over a1 employee. Not every form of control that a party “eserves to hiraself over the conduct of the other party in relation to the services being rendered ay be accorded the effect of establishing an employer-employee relationship. (AFP Mutual Benefit Association v. NLRC, GR. No. 102199, 1991) », EER between crew members and owners of fishing vessels The employer-employee relationship between the crew members and the owners of the fishing vessels engaged in deep-sec ishing is merely suspended during the time the vessels are dry- docked or undergoing repars or being loaded with the necessary provisions for the nex fishing trip, Ths is premised on the principle that all these activities Le. dry-dock, repais, loading of necessary provisions, form part of the regular ‘operation of the company fishing be-siness. (Ruga V.NLRC, GR No.L-72654-6", 1990) Not avery form of centro} will have the effect of establishing EER. The line should be drawn between: 1. Rules that merely serve as guidelines towards the achievement of mutually desired results without dictating the means or ‘methods to be employed in attaining it. These aim only to promote the result. NO EER exists. Rules that control or fix the methodology and bind oF restrict the parly hed to the use of such means. These address both the result ‘and the means used to uchieve it and hence, EER exists (Insular Life Assurance Co, Ltd v NLRC. GR No, 4484, 1989) LABOR LAW TWO-TIERED TEST (Francisco v NLRC, GR. No 1/0087, 2008) (I) FIRST TIER: CONTROL TEST The putative employer's power to control the employee with respect ‘o the means and methods by which the work 1s to be accomplished (ll) SECOND TIER: ECONOMIC REALITY TEST (ALSO, ECONOMIC DEPENDENCE TEST) Existing economic conditions between the parties are used to determine whether EER exists. This is resorted to when there is serious doubt as 10 the relationship of the employee with the employer 1.Payment of PAG-IBIG Fund contributions 2.Payment / remittance of contributions to the State Insurance Fund 3.Deduction of withholding tax 4 Deduction / remittance of SSS contributions ‘The standard of “economic dependence’ of the employee is whether the worker is dependent on the alleged employer for his continued ‘employment in that line of business. (Orozco v. CA, GR. No. 155207, 2008) Thus, the determination of the relationship, between employer and employee depends upon the circumstances of the whole economic actwty, such as 1 The extent to which the services performed are ‘an integral part of the employer's business: 2 The extent of the workers investment in equipment and facilities 3. The nature and degree of control exercised by the employer; The worker's opportunity for profit and loss: The amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise: 6. The permanency and duration of the Felationship between the worker and the employer, and 7 ‘The degree of dependency of the worker upon the employer ior his continued employment in that line of business. (Francisco v NLRC, GR No 170087, 20061ATENEO CENTRAL BAR OPERATIONS 2018 a Cases Where EER Exist 4 Jeepney drivers on boundary basis (Vilamaria v CA, G.R. No, 165881, 2006) b. Drivers or helpers of salesmen are employees of the company (Alhambra Industries v. CIR, G.R. No. L-25984, 1970) ©. Employees of an unregistered association (Orlando Farm Growers v. NLRC, G.R. No. 129076, 1998) 0. Streethired kargador (Caurdanetaan Piece Workers Union v. Laguesman, GR. No. 113542, 1998) ©. Workers in movie projects (Maraguinot and Enero v. NLRC and Viva Fils, G.R. No. 113542, 1998) 1. “Talents” (Begino v. ABS-CBN. G.R. No. 199166, 2015) g. Salaried insurance agent, as distinguished from registered agents on commission basis (Great Pacific Life Assurance Corp., v. Juaico, G.R. No. 73887, 1989) h. Tailors, seamstresses, servers, basters, planisadoras paid on piece-rate basis (Makati Haberdashery v. NLRC, G.R. Nos. 83380-83, 1989) i. Indhouse counsel (Hydro Resources Contractors v. Pagalilavan, G.R. No. 62909, 1989) j. Security guards, with respect to the security agency (Agro Commercial Services v. NLRC, GR. No, 82823-24, 1989) Cases where no EER exists: a. Farm Workers are not employees of the sugar central (Pondoc v. NLRC, G.R. Na, 116347, 1996) b. Once in the playing cour, the referees exercise their own independent judgment, based on the rules of the game, as to when and how a call or decision is to be made, The very nature of officiating a professional basketball game undoubtedly calls for freedom of control (Bernante v. PBA, GA. No 190842, 2011) ¢. Healthcare associate - The manner in which Consulta was to pursue these activities was not subject to the control of Pamana Consulta failed to show that she had to report for work at definite hours. The amount of time Ye devoted to soliciting chents was lett Pal LABOR LAW entirely to her discretion The means and methods of recruiting and training her sales associates, as well as the development, Management and maintenance of her sales division, were left to her sound judgment (Consulta v. CA, GR. No 145443, 2005) 4. TV personality ~ The speciiic setection and hiting of Sonza, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship (Sonza v. ABS-CBN, GR. No. 138051, 2004) ©. Where the contractor PSI was the one that selected, engaged, and hired the security guards, the latter cannot claim that PLOT. the entity to which they were detailed to, is their employer (Abella v. PLOT, G.R. No. 159469, 2005) Importance of determining existence of ‘employer-employee relationship Generally, labor standards and conditions apply only if there is an EER. However, in some instances, even if tehre is no EER, the Labor Code may still be invoked (eg. indirect employer's liability, legal recruitment, and misuse of POEA license). EER is determined by law and not by contract between the parties (Paguio v. NLRC, G.R. No. 147816, 2003) 2. KINDS OF EMPLOYMENT Rundown of Kinds of Employment Probationary Employment Regular Empioyment Project Employment Seasonal Employment Casual Employment Fixed-Term Empioyment Despite the distinction between regular and casual employment, every employee shall be entitled to the same rights and privileges, and shall be subject to the same duties a3 may be granted by law to regular employees during the Period of their actual employment 8 OF 293ATENEO CENTRAL BAR OPERATIONS 20 PROBATIONARY EMPLOYMENT Probationary employment exists where the ‘employee, upon his engagement, is made 10 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 his engagement (Labor Code, Art. 281) Probationary employee is one who is on trial by ‘an employer during which the employer determines whether or not he is qualified for permanent employment. (International Catholic Migration Comm. v. NLRC, GR. No. 72222, 1989) Probationary employment must have been expressly agreed upon. If there is no such ‘agreement, the employment <5 considered regular Sampaguita Auto Transport Corp. v. NLRC, G.R No. 197364, 2013) Duration of Probationary mployment General Rule: Probationary employment shall not exceed 6 months from the date the employee started working (Labor Code, Art. 296) Probation ends 180 days from the starting date. (Mitsuoishi Motors Corporation v. Chrysler Phils. GR. No, 148738, 2004) Exceptions: 4. Covered by an apprenticeship agreement stipulating a longer period (Labor Code, Art 281) 2. Voluntary agreement of parties (especially when nature of work requires a ‘onger period) (Meriwasa Manufacturing v. Leogardo, G.R. No. 74246, 1989) 3, The employer gives the employee a second chance to pass the standards set (Mariwasa Manuiacturing v. Leogardo, G.R. No. 74246, 1989) 4. When a longer period is required and establ’shed by company policy If not one of the exceptional circumstances above is proven, the employze whose employment exceeds 6 months is undoubtedly a regular employee (San Miguel v Del Rosano, GR No 168194 & 1636932005) LABOR LAW Example: The probationary period set for professors, instructors and teachers is 3 consecutive years of satisfactory service pursuant to DOLE Manual of Regulations for Private Schools. Extension of Probation; Double/Successive Probation Not Allowed The employer and employee may extend by agreement the probationary period of ‘employment beyond 6 months, but it cannot be ad infinitum. (Mariwasa Manufacturing v Leogardo, G.R. No. 74246, 1989) ‘The evil sought to be prevented is to discourage scheming employers from using ihe system of double or successive probation to circumvent the ‘mandate of the law on regularization and make it easier for them to dismiss their employees (Holiday Inn Manila v. NLRC, G.R. No 109114 1993) Standards Must Be Made Known to Employee In all cases of probationary employment, the ‘employer shall make known to the employee the standards under which he will ualify 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. (Aberdeen Court, Inc. v. Agustin, G.R. No. 149371, 2005; IRR Labor Code, Sec. 6(0). Rule |, Book V) Termination of Probationary Employment 4. Just causes 2. Authorized causes 3. When he fails to qualify as a regular employe? in accordance with reasonable standards made known by the employer to employee at the time of his engagement. (Universidad De Sta. Isabel v. Sambajon, Jr GR Nos, 196280 & 196286, 2014) 4. If allowed to work after the probationary period, he shall be considered a FEGULAR employee. (Labor Code, Art 296, Voyeur Visage v CA, GR. No. 144939, 2005) PAGE 69 OF 283,ATENEO CENTRAL BAR OPERATIONS 2018 Limitations to Termination of Probation 1, Must be exercised in accordance with the specific requirements of the contract; 2, The dissatisfaction on the employer's part must be real and in good faith, no! fexgned so 8 to circumvent the con'ract ar the law, and 3. There must be no untawful discrimination in the dismissal (Davao Contractors Development v Pasawa, GR No. 172174 2009) Probationary employee may be dismissed before end of the probationary period. Termina‘ion, to be valid, must be done before the lapse of the probationary period. (Pasamba v. NLRC, GR No. 168421, June 8 2007, Manila Electric Company v. NLRC, G.R. No. 83751, 1989) Converssly, once the employer finds the ‘employee qualified, the employer may extend to him regular employment even before the end of the probation(Caragian Opportunities. v Dalengin, Jr, G.R No, 172223, 2012) Due Process Prior to Termination Probationary employees is entitled to procedural due process prior to dismissal from service Unlike the first and second grounds (see above enumeration), the third ground does not require notice and heanng. Due process for the third round consists of making the reasonable standards excepted of the employes during his probationary period known to him at the time of his probationary employment. (PDI v. Magtibay, Jr, GR. No. 164532, 2007) Acquisition of Permanent Employment for Private School Teachers The legal requirements for acquisition of permanent employment, are as follows: 4. The teacher is a fulltime teacher, 2. The teacher must have rendered three consecutive years of service; and 3. Such service must have been satisfactory. (UST v. NLRC G.R. No 85519, 1990) pact LABOR LAW Standard for Regularization - Adequate Performance of His Duties The determination of "adequate performance’ is not, in all cases, measurable by quantitative specification. It 1s also hinged on the qualitative assessment of the employees work; by its nature, this largely rests on the reasonable exercise of the employer's management Prerogative. A good example would be the case of probationary employees whose tasks involve the application of discretion and intellect, such as ~to name a few — lawyers, artists, and journalists. (Abbott v, Alcaraz, GR. No. 192571, 2014) REGULAR EMPLOYMENT Regular employment is an arrangement where the employee: 1, Has been engaged to perform tasks usually necessary or desirable to the usual trade or business of the employer; 2. Has rendered at least 1 year of service, whether such service is continuous of broxen, with respect to the activity in which he 1s employed; or 3. When an employee is allowed to work after a probationary penod (Labor Code, Art. 295) Test to determine regular employment The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee to the usual trade or business of the employer. The connection can be determined by considering the nature of work performed and its relation to the scheme of the articular business or trade in its entirety. The repeated and continuing need for the Performance of the job has been deemed sufficient evidence of the necessity, if not indispensabilty of the activity to the business. (Lopez v. MWSS, G.R. No. 154472, 2005) The performance of a job for at least year is sufficient evidence of the job's necessity if not indispensabilty to the business. This is the rule even if its performance is not continuous and ‘merely intermittent. The employment is considered regular, but only with respect to such activity and while such activity exists. (URC v Catapang, G.R. No. 164736, 2005) TOF 283gQaeaweaesaeu@weueasweweeuenwnesr cere ATENEO CENTRAL LABOR LAW BAR OPERATIONS 2018 Ways of attaining regular employment 1. By nature of work ‘The employment is deemed regular when the employee has been engaged to perform activities which are usually necessary oF desirable n the usual business or trade of the employer. (Labor Code, Art, 295. Paguio v. NLRC GR. No. 147816, 200% 2. By period of service ‘The casual employee is reckoned a5 regular when the employee has rendered at least one (1) year of service, whether such service is continuous or broken, with respect to the activity in which he is employed and his ‘employment shall continue while such activity exists. (Labor Code, Art 295; Conti v. NLRC, GR. No 119253, 1997) 3. Work beyond the _—_ probationary employment The employment is considered regular when the employee is allowed to work after 2 probationary period. (Labor Code, Art, 296) 4, Repeated Hiring When the “seasonal” workers are continuously and repeatedly hired to perform the same tasks or activities for several seasons or even affer the cessation of the ‘season, this length of time may ikewise serve as badge of regular employment. (Universal Robina Sugar Miling Corporation v. Acibo, GR. No. 186439, 2014) Note: Regular employment does not mean permanent employment, A regular employee may be terminated for just and authorized causes. PROJECT EMPLOYMENT ‘One whose employment has been fixed for 8 specific project or undertaking, the completion of which has been determined at the time of engagement of the employee. (Lavor Cove, At 295) Project Employees are NOT Reguior Employees; Exception General Rule: Project employees are not regular empicyees, as their services are needed only when there are projects to be undertaken Exception: Where the employment or project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and are considered regular employees (Lao Construction v. NLRC, G.R. No, 116781, 1997) When a Project Employee Becomes a Regular Employee 2. There is continuous re-hiring of project employees even after the cessation of a project for the same tasks or nature of tasks (the employee must be continuously rehired without gaps and intervals); and , The tasks performed by the alleged project employee are vital, necessary, and indispensable to the usual business or trade of the employer ‘Maraguinot v. NLRC, GR. No, 120969, 1998) When an employer renews a contract of employment after the lapse of the six-month probationary period, the employee thereby becomes a regular employee. No employer is allowed to determine indefinitely the fitness of its employees. (Malicdem v. Marules Industrial Corp., GR. No. 204406, 2014) Duration of Work (One year duration on the job is pertinent in deciding whether a casual employee has become ‘agular oF not, but iis not pertinent to a seasonal ‘oF project employee, “Day Certain” Rule Project employment does not end on an exact dale, but on the completion of the projectATENEO CENTRAL BAR OPERATIONS 2018 Length of time net applicable to the construction industry Generally, length of service provides a fair yardstick for determining when an employee intially hired on 3 temporary basis becomes a permanent one, entitled to the security and benefits of regularzation. But this standard veil not be fai, if applied to the cunstruction industry simply because construction tims cannot guarantee work and funding for its payrolls beyond the life of each project. And getting projects is not a matter of course. (Uy Construction v. Trnided, G.R. No. 189250, 2010) Work Poo! Principle Generally, employees may or may not be members of a work pool A wok podl refers to 2 group of works from which an employer tke @ conistruction company deploys or assigns to i's various projects or any phase/s thereof Members of a Work Pool May Consist Of, 1. Non-project employees or employees for ‘an indefinite period. If they are employed in ‘2 particular project, the completion of the project or any phase thereof will not mean severance of the EER; or 2. Project employees. These workers in the work pool who are employed in a particular projector in any phase thereof are considered {as such if they are free to leave anytime and offer their services to other employees (Raycor Systems v. NLRC, G.R. No. 114290, 1996) Mera membership in the work pool does not result in the workers’ becoming regular employees by reason of that fact alone. (Abesso Construction and Devt Corp., v. Ramirez, G.R. No. 141168, 2006). However, @ project employee who is a member of @ work pool may attain regular status as a project employee. PAGE 72.01 LABOR LAW ONS 20 Project Employment vs. Regular Employment PROJECT: | REGULAR e/a LM ce lo The services of | Regular employees project employees are | enjoy secuntly of colerminus with | tenure and are legally project or any phase | entitled to remain in thereof any may be | the service of their terminated upon the | employer and to hold fend or completion of | on their work | oF the project or phase | position until their thereot for which they | services are were hired terminated by any of | modes of | | the | termination of service | under the Labor Code ‘sto termination, | termination is- for due process just cause, due | complied with even | process applicable to | no prior notice of | Art. 297 apples. If | termination is served | due to authorized | causes, Ar. 298 &| 2estotowed. Note: A regular employee cannot be at the same time a project employee (Magcalas v. NLRC, G.R.No. 100333, 1997) SEASONAL EMPLOYMENT Work or services to be performed is seasonal in ature and the employment is for the duration of the season. (Labor Code, Art. 295) Employment Relationship During Off-Season Dung off-season, the EER is not severed; the seasonal employee is merely considered on leave of absence without pay. Workers who have performed the same tasks every season for several years are considered regular employees for their respective tasks. (Hacienda Fatima v. National Federation of Sugarcane Workers-Food and General Trade, GR. No. 149440, 2003)ATENEO CENTRAL, BAR OPERATIONS 2018 When Seasonal Employees Considered as Regular Employees Where there is a reasonable connection between the particular actuity performed by the employee in relation to the usual trade or business of the employer: and When seasonal workers are repeatedly ‘engaged to perform the sarre tasks for more than one season (Zamudio v NLRC, GR. No 76723, 1990) ‘One year duration on the job 18 pectinent in deciding whether a casual employee has become ‘regular or not, but itis not pertinent to a seasonal (oF project employes. Passage of time does not make 2 seasonal worker regular or permanent (Mercado v. NLRC, GR. No. 79869, 1991) CASUAL EMPLOYMENT General Rule: Activity performed is not usually necessary or desirable in the usual business or trade of the employer, not project and not seasonal Exception: If he has rendered at least 1 year of service, whether such service is continuous or broken, he is considered a REGULAR employee with respect to the activily in which he is ‘employed and his employment shal continue while such actwity exists FIXED-TERM EMPLOYMENT Fixed-term employment was repealed by Labor Code. But the Civil Code, a general law, allows fixed-term employment. (Brent School, Inc. v Zamora, GR. No. 48494, 1990) Elements of valid fixed-term employment 4. The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, orimproper pressure being brought to bear upon the employee and absent any other ciecumstances visting his consent; 2. It satisfactorily appears that the employer and the employee dealt with each other on more ‘0 less equal terms with no moral dommance ‘exercised by the former or the latter LABOR LAW These indications, which must be read together make the Brent doctrine applicable only 2 few special cases wherein the employer and employee are on more or less in equal footing in entering into the contract The reason for this is when a prospective errployee, on account of special skills or market forces. 1s in a position to make demands upon ‘he prospective employer, such prospective employee needs less protection than the ordinary worker. Lesser limitations on the parties’ freedom of contract are thus recuired for the protection of the employee. (Fyi Television Network v Espintu, G.R Nos. 204944-45, 2014) General Rute: Fixed-Period Employment is vahd $0 long as the eritena is complied with Exception: Fixed-term employment will not be considered valid where, from the circunystances, |tis apparent that penods have been imposed to preclude acquisition of tenural secunty by the employee. (Dumpit-Munilo v. CA, GR. No. 164652, 2007) Rules: 1. Notice of termination is not necessary in fixed term employment (Pangiinan v. General Miling Corporation, supra) 2, Employee is deemea regular if the contract faied 10 state the spectic period of ‘employment (Poseidon Fishing v NLRC, G.R. ‘No, 168052, 2006) 3. Termination prior to lapse of fixed-term ‘contract should be for a just or authorized cause (Anderson v. NLRC, GR.No 111212, 1996), Labiity for egal dismissal of fixed-term temployces is only forthe salary for unexpired portion (New Sunrise Metal v Pia, G.R. No 474131, 2007)ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW Probationary Employment vs. Fixed-Term Employment a Gig Sat EMPLOYMENT | The paries intend to | No such intention | | make their relationship | exists and the | | fegular after the lapse | relationship | of the perio, automatically lerminates atthe | expration of the Boa 3. SUBCONTRACTING vs. LABOR-ONLY CONTRACTING Test to determine the existence of an independent contractor 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. (SMC v. Aballa, GR ‘No. 149011, 2005) ‘An individual can be an independent contractor for himself. (Sonza v. ABS-CBN. GR. No. 138051, 2004) Factors to consider in determining whether Contractor is carrying on an Independent Business: (C2-SM-PANTS) Contro! and supervision of worker Control of the premises Skill required Mode, manner, terms of payinent. Power of employer with hiring, firing, and payment of wages Right to Assign the performance of specified pieces of work 9. Nature and extent of work Term and duration ofthe relationship 'h. Duly to Supply premises, tools, appliances, materials and labor. ;Vinoya v. NLRC. G.R. ‘No. 126586, 2000) eacre Types of Contractors under the Law 1 Contracting ot Subcontracting - An atrangenent whereby a principal agrees to Put ovt oF farm out with @ contractor the Performance or completion of a specific jb. work or service within a definite oF Predetermined period, regardless of whether Such Job. work oF service is to be performed Or completed within or outside the premises of the principal. (0.0. No. 174-47, Sec. 3{c)) Labor-Only Contracting - An arcangement where the contractor or subcontractor fecruits, supplies. or places workers 12 perform a job or work for a principal, and the elements hereunder: 8. The contractor does not have substantial capita; or the contractor or subcontractor oes not have investments in the form of tools, equipment, machineries; and the contractor's or ~—_subcontractor's employees recruited and placed are performing actwites which are directly felated to the main business operation of the principal: or The contractor or subcontractor does no: exercise the right of control aver the work of tne employee (0.0. No. 174-17, Sec. 9 Ff T4.0F 283ATENEO CENTRAL BAR OPERATIONS 201 Se naan 8 Job Contracting v,— Labor-Only Contracting JOB Psy Has. sufficient | substantial capital | OR investment in | machinery, tools or equipment directly or | intended to be related {0 the job contracted Pay emia eu Has NO substantial | | capital OR investment | Jin te form of | machinery, tools or | | equipment | Caries 9 Pan independent business." different coin the employer's “| Has. nt 3 st eer | perform the job under its own account and responsibilty, FREE | trom the principal's control NOGdEER. exept jeri thes contractor. | Undertakes to] Esa ot Ha pial 3 | Performs activities directly related to the main business of the principal LIMITED —_Tabilty | (principal solidariy | liable wth contractor ‘or subcontractor only when latter fails to comply with requirements as to unpaid wages and ‘other labor standards violations. [B= PERMISSIBLE™ Principal's ability | extends to all rights, | duties and liabilives under labor standard Jaws including the night to selt-organization "PROAIBTTEDEES LABOR LAW (a) Elements Legitimate centracting or subcontracting Contracting or subcontracting shall be legitimate if athe folowing circumstances occur 1 The contractor is ergaged in a distinct ard tadependent business and undertakes to perform the job or work on its own responsibiity according to its own method, 2. The contractor or subcontractor has substantial capital andior investment 3. The contractor undertakes to perform the job, work oF service on is own responsibilty according to ts own manner and method, and free from control and direction of the principal in all matters connected with the performance of the work except as to the results thereot, and 4. The Service Agreement ensures compliance with all the nghts and benefits for all of the employees of the contractor or subcontractor under Labor laws. (0.0. No. 174-17, Sec. 8) Labor-Only Contracting Labor only contracting shall refer to. an arrangement where the contractor or subcontractor recruits, supplies, or places workers to ferform a job or work for a principal, and the elements hereunder 1. The contractor does rot have substantial capital, or the contractor or subcontractor does not have investments in the form of tools, equipment, machineries; and the contractor's or subcontractor’s employees recruited and placed are performing activities which are directly related to the main business ‘operation of the principal; or 2 The contractor or subconsactor does not exercise the right of control cver the work of the employee (0.0. No. 174-17, Sec. 5) Right to Control 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. (DU. No. 18-A, Sec TT) PAGE 15 0F 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW The test to determine whether ore is a job or tabor-only contractor is to look wnto the elements of @ job contractor. f ALL elements of a job Contractor are present, thenhe is ajob contractor Otherwise, he is a labor-only contractor. Absent any one of the elements for being a job Contractor, the person isa labor-oniy contractor. On the other hand, not all requisites of a labor- only contractor need to be presert. As long as any one of the elements is present, then the Person is a labor-only contractor. Only one of either (i) substantial capital or (ii) performing activities related to the main business - is required for Labor-Only Contracting to exist Performing activities directly related to the principal business of the employer is only one of the two indicators that “labor-only" contracting exists; the cther is lack of substantial capital or investment. Labor-only contracting exists when any of the two elements is present. (Quimtanar, et al. v. Coca-Cola, GR. No. 210565, 2016) Posting of Bond ‘An employer or indirect employer may require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail fo pay the same, (D.0. No. 174-17, Sec. 3a], Labor Code, Art. 108) Note: Labor-Only Contracting is legally wrong ‘and prohitited because itis an attempt to evade the obligations of an employer. If proven, it ‘amounts to employment avoidance (Convoy Marketing v Albia, G.R. No. 194969, 2015) Substantial Capital it refers to capital stocks and subscnbed 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 cr completion of the job, work or service contracted out (0.0. No 18-02, Sec. 5) Walso refers to paid-up capital stocks/shares of at least Five Mion Pesos (P5,000,000.00) in the case of corporations, partnerships and Ccooperstives; in the case of sing’e proprietorship. a net worth of at least Five Milion Pesos {P5,000,000,00). (0.0. No. 174-17, Sec 3, 1H) 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 law does not require both substantial capital and investment in the form of tools, equipment ‘and machineries. This is clear from the use of the Conjunction “or.” Ifthe intention was to require the contractor ‘o prove that he has both capital and the requisite investment, then the conjunction and’ should have been used. (New Golden Builders & Devt Corp v. CA, et al, G.R. No. 154718, 2003) Net Financial Contracting Capacity (NFCC) refers to the formula to determine the financial capacity of the contractor to carry out the jot. work or services sought to be undertaken under a Service Agreement. NFCC is current assets minus current liabilities multiplied by K. which stands for contract duration equivalent to: 10 for ‘one yeur or less; 15 for more than one (1) year up to two (2) years; and 20 for more than two (2) years, ininus the value of all outstanding or ‘ongoing projects including contracts to be started. (0.0. 18-A, Sec. 3(g)) Micit Forms of Employment Arrangements The following are deciared prohibited for being ccontrary to law or public policy: ‘a. When the principal farms out work to a “Cabo" Cabo" refers \o a person or group of persons Cr to a labor group which, under the guise of labor organization, cooperative, or any ently supplies workers to an employer, wath or without any monetary or other consideration, whether in the capacity of agent of the employer cr as ostensible independent contractor (0.0 No 174-17, Sec. 3fb))ppm ereetee ce rere eters etree agau@aeaaeaexueaeueueneeeaeeee eee ree ATENEO CENTRAL BAR OPERATIONS 20¢6 . Contracting out of job or work through an in- house agency, Contracting out of job or work through an in- ISE cooperative which merely supphes workers to the principal Contracting out of a job or work by reason o. @ sirke or lockout whether actual oF imminent, © Contracting out of a job or work being Performed by union members and such wll interfere with, restrain or coerce employees in the exercise of ther rights to sell: ‘organization ax provided in Article 259 of the Labor Code, as amended Requiring the contractor's!subcontractor’s employees to perform functions which are ‘currently being performed vy the regular employees of the pncipal. @. Requinng the contractor's/subcontractor’s employees to sign, 3s @ precondition to employment or continued employment, an antedated resignation letter, a blank payroll, @ waiver of labor standards including minimum wages and socal or welfare benefits; or a quitciaim releasing the principal (oF contractor from labilly as to payment of future claims: or require the employee to become member of a cooperative h. Repeated hiring by the contractor/subcontractor of eniployees under ‘an employment contract of short duration 1 Requinng —empioyees under a contracting/subcontractiny arrangement ta sign a contract fing the period of ‘employment to a term shorter thar the term of the Service Agreement, unless the contract is divisible into phases for which substantially different skils are required and this is made known to the employee at the time of engagement. i. Such other practices, schemes or ernployment arrangements designed 10 ‘circumvent the right of workers to secunty of tenure. (0.0. No. 174-17, Sec. 6) © LABOR LAW (b) Trilateral relationship cee. | Contractor's "SY LEmpoyeos The three parties involved: 1. Contractor / Subcontracter ‘Any person of entity, including a cooperative, engaged i a legtimaie contracting or ‘subcontiacting arrangement 2. Contractor's Employee (One employed by a contractor oF subcontractor to pertorm: or complete a job work or service ursuant to an arrangement between the latter and a principal 3. Principal ‘Any employer who puts out or farms out a job, Service oF work To a contractor oF Subcontractor (0.0 No 174-17, Sec 3) Relationships that exist in contracting or sudcontracting: 1. An employer-employee rela'ionship between the contractor and the employees it engaged to pertorm the specific job, work of service being contracted: and 2. A contractual relationship between tne Principal and the contractor as governed by the provisions of the Civil Code. (DO. No. 18- Atl, Sec 5,44) legitimate PAGE 27 08 285ATENEO CENTRAL BAR OPERATIONS 2018 Governing Laws a. Between the principal and the contractor he major laws applicable to ther work relationship are the Civil Code ani pertinent commercial laws b. Between the contractor and his employses the mayor laws applicable to their work relationship are the Civil Code and special labor laws ©. Between the principal and the contractor's employees, no. —_employer-employee relationship exists, because the contractor himself is the employer. (Azucena, The Labor Code with Coinments and Cases Volume | 306, 2013) The law ecognizes and resolves this station in favor of employees in order to protect their rights and interests from the coercive acts of the employer. In fact, the employee wno is constructively dismissed may be allowed to keep ‘on coming to work. (McMer Corp. Inc. v. NLRC. GR No 193421, 2014) Rights of contractor's employees ‘All contractor's/subcontractor s employees, shall be entitled to securty of tenure and ail the rights and privileges as provided for in the Labor Code, ‘as amended, to include the following 1. Safe and healthful working conditions; 2. Labor standards such as but not limited to service incentive leave, rest days, overtime pay, holiday pay, 13th month pay. and separation pay as may be provided in the Service Agreement or under the Labor Code; 3. Retirement benefits under the SSS or retirement plans of the contractor, if there is any; 4. Social security and welfare benefits; and 5. Selforganization, collective bargaining and peaceful concerted activities, including the right to strike. (0.0. No. 174-17, Sec 10) LABOR LAW Required Contracts > 1. Employment contract between, the contractor and its employee. ‘a. Notwithstanding any oral or written stipulations to the contrary, the contract between the contractor and its employee shall be governed by the provisions of Articles 279 and 280 of the Labor Code, as amended. It shall include the following terms and conditions: 41. The specific description of the job, work or service to be performed by the employee; 2, The place of work and terms and conditions of employment, including astatement of the wage rate applicable to the individual employee; and 3, The term or duration of employment that_ must be co-extensive with the Service Agreement or with the specific phase of work for which the employee is engaged. b, The contractor shall inform the employee of the foregoing terms and conditions of employment in witing 2n or before the first day of his/her employment. 2. Service Agreement between the principal and the contractor. The Service Agreement shall include the following: ‘a. The specific description of the job, work or service being subcontracted. b. The place of work and terms and conditions governing the contracting arrangement, to include the agreed amount of the services to be rendered, the standard administrative fee of not less than ten percent (10%) of the total contract cost. c. Provisions ensuring compliance with all the rights and benefits of the employees "under the Labor Code and these Rules on. 1. Provision for safe and healthful working conditions, 2. Labor standards such as, service iventive leave resi days. overtime ROF 283SERE@GweaeegewweuaeewewwweweeFeSeoeseoesereTee-,lmlmlmltlmttthmhmllml ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW rer ay, 13th month pay and separation pay; 3. Retirement benefits; 4. Contnbutions and remittance of SSS. Philhealth, Paglbig Fund, and other welfare enetits, 5. The right to self-organization, collective bargaining and peaceful concerted action, and the right to security of tenure dA provision on the Net Financial Contracting Capacity ofthe contractor, which must ba equal to the total contract cost @. A provision on the issuance of the bond!s as defined in Section 3(m) renewable every year, {The contractor or subcontractor shall directly remit’ — monthly the employers’ share and employees contribution to the SSS, ECC, Phithealth and Pagribig. The term or duration of engagement. The Service Agreement must conform to the DOLE Standard Computation and Standard Service Agreement. Registration of Contractors and ‘Subcontractors Mandatory Registration ond Registry of Legitimate Contractors. Consistent with the authority of the Secretary of Labor and Employment to resrict or prohibit the contracting out of ator to protect the rights of workers, it shall bbe mandatory for all persons or enites, including cooperatives, acting as contractors to register with the Regional Office of the Department of Labor and Employment (DOLE) where it principally operates. (0.0. No. 174-17, Sec. 14) Validity of Certificate of Registration of Contractors The contractor shall be deemed registered on'y con th2 date of issuance of its Cerificate of Registration. The Certificate of Registration shall be effective for 2 years, unless cancelled after due process. The same shall be valid in the region where itis registered In case the contractor has Service Agreement or ‘operates outside the jurisdiction of the RTC where itis registered, i shall request 2 duly authenticated copy of ts certificate of registration {rom the DOLE Regional Office where it seeks to operate, together with a copy of its Service Agreement’s in the arva, for purposes of monitoring compliance with the rules (0.0. No 174-17, Sec. 20) Note: Failure to register shail give rise to the presumption that the contractor is engaged in labor-only contracting. (Aklan v. San Miguel Corporation, G.R. No. 168537, 2008) (c) Solidary liability Labor Code Provisions on Liability In the event that the contractor or sub-contractor fails to pay the wages af his employees in accordance with this Code, the empioyer shall be jointly and severally liable with his contractor or ‘sub-contractor fo such employees to the extent of the work pe-formed under the contract, in the same manner and extent thal he is liable to ‘employees directly employed by him. (Labor Code, Art, 106) Principal as Direct Employer: Finding of Labor-Only Contracting There is “labor-only" contracting where the person sugplying workers to an employer does rnot 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 empioyer. 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 fiecily enwslayed by hwn (Labor Code Att 106). ATENEO CENTRAL BAR OPERATIONS 2018 'm the event that there is a finding that the Contractor or subcontractor is engaged in labor- only contracting under Section § and other ilicit forms of employment arrangements. under Section 6 of these Rules, the principal shall be Geemed the direct employer of the contractor's or Subcontractor’s employees. (D.0. No. 174-17, Sec. 7) Therefore: The principal shal be deemed an employer of the contractual employee and shall be directly liable, in the following cases @. Labor-only contracting; and b. Prohibited contracting arranoements (Broadway Motors v. NLRC, GR. No. 76382, 1987) Principal as Direct Employer: Violations of ights of Employees or Required Contracts A finding of violation of either Sections 10 (Rights ©f Contractor's Employees) or 11 (Required Contracts) shall render the principal the direct ‘employer o1 the employees of the contractor or subcontractor, pursuant to Art. 109 of the Labor Code (0.0. No. 147-17, Sec. 12) Solidary Liability in Legitimate Contracting: Violations of the Labor Code and Social Legislation In the event of violation of any provision of the Labor Code, incluaing the failure to pay wages, there exists a solidary liability on the part of the principal and the contractor for purposes of enforcing the provisions of the Labor Code and ‘other social legislations, to the extent of the work performed under the employment contract. (0.0. No, 174-17, Sec. 9) Every employer or indect employer shall be held responsible with his contractor or subcontractor for any violation of any provision ofthis Code. For purposes of determining the extent of their civil ability under this Chapter, they shall be considered as direct employers. (Labor Code Art 109) Note: Principal's Liability under Art. 109 U1 the liabilty is for failure to pay the minimum wage, or the service incentive leave or other benefits denived from or provided for by law, the Principal 1s equally able with the contractor It the liabilty is invested with punitie character, Such as an award for backwages and separation ay because of an illegal dismissal, the liability should be solely with the contractor in the absence of proof that the principal conspired with the contractor in the commissicn of the illegal dismissal (see Meralco v. NLRC, GR No 145402, 2008) Solidary Liability for Wages and Money Claims for Performed Under The Contract In the event that the contracior or subcontractor falls to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severaly fable 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 (Labor Code, Art, 106) ‘Should the indirect employer be constrained to pay the workers, it can recover whatever amount it paid, in accordance with the terms of the service contract between itself and the contractor (Rosewood Processing v. NLRC, G.R. Nos, 116476-84, 1998) ‘The joint and several liability of the contractor and the principal is mandated by the Labor Code to ‘assure compliance with the provisions therein including the minimums wage. The contractor is made liable by virtue of his status as direct employsr. The principal, on the other hand, is made the indirect employer of the contractor's employees to secure payment of their wages should the contractor be unable to pay them. Even in the absence of an EER, the law itse't establishes one between the principal and the ‘employees of the agency for a limited purpose i.e in order to ensure that the employees cre paid the wages due them, (Lapanday Agricultural Devt Comp. v. CA, GR. No. 112139, 2000) PAGE 80 OF 28.See aeaeaesewehlUcUaelUcrtlCUcaerlUlcaetel ate aerate ese eT ere _ESe eee ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW SAR OPERATIONS 2018 Solidary Liability of Principal an& Employer in cases of Iilegal Dismissal Joint and several with the employer, but with the Fight to reimbursement from the eiployer- contractor Wage differentials only to the extent where the ‘employee performed the work under the principa! General Rule: Principal and contractor are solidanly able. Exception: When the contracior has already received {rom the Principal the correct amount of wages and benefits, but failed to tun them over to the workers, the contractor should solely bear the liability for the underpayment of wages and non-payment of overtime pay. (Meralco v. NLRC, GR. No. 145402, 2008) Effect of Termination of Employment The termination of employment of the contractor’s/subcontractor’s employee prior tothe expiration of the Service Agreement shall be governed by Articles 297, 298 and 299 of the Labor Code. PAGE St In case the termination of employment is caused by the pre-termination of the Service Agreement not due to authorized causes under Article 296, the night of the contractorsisubcontractor’s employee to unpaid wages and other unpaid benefits. includirg unremitted legal mandatory contributions, e.g.. SSS, PhiHeulth, Pag-IBIG, ECC, shall be borne by the party at fault, without prejudice to the soldary liability of the parties to the Service Agreement. ‘Where the termination results from the expiration of the Service Agreement, or from the completion of the phase of the job or work for which the ‘employee is engaged, the latter may opt to wait for re-employment within three (3) months to resign and transfer to another contractor~ employer. Failure of the contractor to provide new employment for the employee shall entitle the latter to payment of separation bene: is as may bbe provded by law or the Service Agreement, whichever is higher, without prejudice to his/her entitlemert to completion bonuses or other emoluments, including retirement _bene..ts Whenever applicable. The mere expiration of the Service Agreement shall not be deemed as a termination of employment ofthe contractor'sisubcontractor’s employees who are regular employees ofthe latter.ATENEO CENTRAL BAR OPERATIONS 2018 sgeagner No express inclusion ‘of cooperatives, but should i sill be included [i eda Jas aa Teal Relalopep [ielaterat et Relationship was eniphasized, . Contractor €.. Employeas sti [ee SW SRM GA «305 On Contracting and Subcontracting SaapMs a espa > Legitimacy; «= Legitimate Joy Requiremenis: Permissibve Contracting > Distinct and independent business; own ‘manner and method of performance of job oF work ‘Substantial capital AND investment (in the form of tools, equipment, machinery and supervision) inew] Free from control andior diection of the principal Service Agreement (SA) complies. with labor law nights and benefits Php§,000,00.00 nee CE | ing the fratar oa No provision on NFGC BA 8 job, WrR'Gt Ser idertaer! under a SARA? S| *“Coterminus Employment Tee | fom withthe, Sof. with thé speci ss Teach] No co-terminas employment (for regulary ees Mere expiration of SA shall not be deemed as a termination of employment of the contractor's ‘employees who are regular employees of the latter. it [LS TTS | bitederere oe “SESS GHEE] Absolutely Prohibited only 1 Kind form of tools, equipment, premises, among others, -only Contracting, 2 kin ‘The contractor does not have substantial capital} The contractor does not have substantial capital jG] -or- ‘The contractor does not have investments in the | The contractor does not have investments in the machinery, work | form of tools, equipment, machineries, ‘Supervision, work premises among others, PAGE 82 OF 283ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW The omeloyees recruited and placed are performing activites which are usually necessary oF desirable:.to. the operation. of the companys OF Gicectl related to the main business of the principal aa teicis. rele ase 88 jer such job, work aero oF Outi the & eh vand The contractor's or subcontractor's employees recruited and placed are performing activities which are directly related to the main business ‘operation of the principal. onltSetor dees hot exercisé the cht ore) formance of the work of employee eis a Tahoronly Contracting: 2° kind The contracter does not exercise the right to control over the performance of the work of the employee chibiion ss EES BX eee '$5 | (Good faith and legitimate business reason no ‘Other Ilicit Forms of Employment Arrangements longer a defense) 7. [new] Contracting through an in-house ‘cooperative which merely supplies workers to the principal necessary/ desirable of directly related to the bbusiness/ operation of the principal by reason Of strike/lockout | 2. new] Prachces, scheied or employment arrangements ‘designed to circumvent Security of Tenure 3. [new] Contracting out of @ jb or work by reason of a strike or lockout whetner actual or imminent & Notisied 5. Notisted A ena in targaining: ~Genttied bargaining agent to sole and bargaining agent nes 7, Engaging maintaining by, ~ pric 6 Notisted |...» Subcontracted employees in exces: saFCBA or set by Industry Tripartite Council . & Convracling out of @ jobiworkiservice that is |7. Notlisted When Principal May Be Liable PAGE H3 OF 283ATENEC CENTRAL BAR OPERATIONS 2018 LABOR LAW $$$ $$$$$—— Principal deemed direct employer when there is evidence of: 4. Labconly contracting; 2. Other ilicit forms of employment arrangements; 3. Violation of employee's nghts 4. Violation of required contracts ting contracts © a aN = by: pares 16 existing | - No provsion ail ct be impaired by ge. Employment Termination Tae a PRES fot aw 2] ‘Same ‘Gnpaid: wages .and Employee may ont to walt for re-employment provided by" within 3 months to resign and transfer to another Higfher ‘entitlement to the | employer. ise or Nother emoluments, | Failure to provide new employment, employee TEBAeAtS whenever applicable. | shall be entitled to separation benefits as may be a 2 ~ | provided by law or the SA, whichever is higher, ‘without prejudice to entitlement completion of bonuses or other emoluments, including 3 eli ifnot re-employed after $month wat, separation benefits are given as may be provided by law or the SA. Registration”. aa Php 100,00 Mandatory Enrolment to DOLE Programs: Principal and Contractors/Subcontractors PAGE 84 0F 283 cis ltd tiie i uc) al alas aATENEO CENTRAL BAR OPERATIONS 2018 Department Circular No. 01-17 0.0. 174, Series of 2017. applies only to tnlateral relationship which characterizes contracting oF pot subcontracting arrangement. It does contemplate to caver information technology- enabled services involving entire or specific business process. NOTE: Construction Industry NOT covered by mandatory registration provision of 0.0. 174-17 The DOLE, through its regional offices, shall not require contractors licersed by PCAB in the Construction Industry to regisier under 0.0. 18-A Series of 2011. Findings of violation/s on labor standarcs and occupational health and safely standards shall be coordinated with PCAB for its ‘appropriate action, including the possible cancellauon/suspension of the contractor's license. Contractors licensed by PCAB which are engaged in other contracting or subcontracting arrangement in addition to, or other than construction activities shall be required to register under D.O. No. 174-17 Except for the registration requirements of 0.0. 174-17, contracting or _—_-subcontracting arrangements in the private secunty industry shall be governed by 0.0. No. 150, Series of 2016, D.0. No. 174-17 applies only to trilateral relationship which character'zes contracting or subcontracting arrangement. It does not contemplate {0 cover contractual relationships such as in contract of sale or purchase, contract of lease, contract. of carriage, contract growing/growership agreement, toll contract of | management, manufacturing, operation and maintenance and other contracts governed by the Civil Code and other special laws. the D.O. No. 174-17 does not also cover contracting out of job or work to a professional, or individual with unique skills and talents who himself or herself performs the job or work for the principal PAGE LABOR LAW SPECIAL CASES 1. Working scholars No EER between students on one hand, and schools, colleges or universities on ine other, where: There is written agreement between a them under which the former agree to work for the latter in exchange for the privilege to study free of charge Provided, the students are given real opportunities, including such facilities a5 may be reasonable and necessary to finish their chosen courses under such agreement 2. Resident physicians in training ‘There is EER between resident physicians and the training hospital UNLESS: There is a training agreement between th b. The training program \s duly accredited or approved by the appropriate government agency. Effects of Labor-Only Contracting ‘A finding by a competent authonty of labcr-only contracting shall render the principal jointly and severally lable with the contractor to the latter's erployees in the same manner and extent that the principal is liable to employees directly hired by himvher as provided in Art. 106 of the Labor Code, as amended. (0.0. 18A, Sec. 27, 2011) A finding of commission of any of the prohibited activities in Sec, 7 or violation ot either Sections 8 or 9 hereof, shail render the principal the direct employer of the employees of the contractor or subcontractor. (0.0. 18-4, Sec. 7, 2011)ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW Pee B, TERMINATION OF EMPLOYMENT The terms and conditions of employment of all government employees, including employees of GOCCs, shall be govemed by the Civil Service Law, rules and regulations (Labor Code, Ar 291) Coverage General Rule: All establishments (Labor Code, Art, 293) Exception: Government, its political subdivisions, inchiding GOCCs without original charter (/RR Labor Code, Sec. 1, Rule 1, Book Vi) Security of Tenure itis @ constitutionally protected right and applies to all workers (Pit. CONST. art, Xill, Sec. 3) ‘Security of tenure is the constitutional right granted to the empioyee, that the employer shall not terminate the services of the employee except for just cause or when authorized by law. It extends to regular (permanent) as well as non-regular (temporary) employment. (Kiamco v. NLRC, G.R. ‘No, 129449, 1999) C. TERMINATION BY EMPLOYEE Termination by employee may be split into (Labor Code, Art. 300): Termination without Just Cause 1. Atleast 1 month prior notice 2. Acceptance by the employer is necessary 3. Employee may be held liable for damages for failure to give notice ‘Termination with Just Cause 1, Grounds 2. Serious insull on the honor and person fof employee by the employer or his representative b. Inhumare and unbearable treatment accorded to the employee c. Commission of a crime against person of the employee or any ofthe immediate members of his family 4, Cther causes analogous to foregoing 2. Notice not necessary wien resignation 1s with just ceuse. the 1, RESIGNATION VERSUS CONSTRUCTIVE DISMISSAL Resignation Resignation is the voluntary act of an employee who finds himself in a situation where he bekeves that personal reasons cannot be sactficed in favor ofthe exigency ofthe seivice, such that he has 0 other choice but to disassociate himself from his ‘employment. (Cervantes v. PAL Maritime Corp. GR. No. 175209, 2013) To constitute a resignation, it must be unconditional and with the intent to operate as such. There rust be an intention to relinquish 2 portion othe term of office accompanied by an act ‘of relinquishment. (Azcor Manufacturing Inc. v. NLRC, GR. No. 117963, 1999) Resignation is inconsistent with the filing of @ complaint for legal dismissal. (Blue Ange! Manpower and Security Services Inc. v Court of Appeals, GR No. 161196 2008) The rule requiring an employee to stay or complete the 30-day period prior to the effectivity of his resignation becomes discretionary on the part of management as an employee who intends to resign may be allowed a shorter period before his resignation becomes effective. (Hechanova Bugay Vilchez Lawyers v. Matorre, GR. Ne. 198261 2013) Stipulations providing that either party may terminate a contract even without cause are legitimate if exercised in good faith. Thus, while either party has the night to terminate the contract at wil, it cannot not act purposely to injure the other, The monetary award provided in Section 10 of RA 8042 apples only to anilegatly dismissed overseas contract worker or a worker dismissed, from overseas employment without just, valid or authorized cause as defined by law or contract. It finds no application to cases in which the OFW was not illegally dismissed. (GBMLT Manpower Services vs Malinao, GR No. 189262, 2015)as oes a al ATENEO CENTRAL BAR OPERATIONS 2018 Constructive Dismissal 1.No formal dismissal 2.The employee is placed in a situation by the employer such tat his continued employment has be zome UNBEARABLE > Forced resignation, Constructive dismissal exists when an act of clear discrimination, insensibilty or disdain on the art of the employer has become so unbeereble 5 to leave an employee with no choice but 10 forego continued employment Constructive dismissal occurs when: 1. Continued employment is rendered impossible or unreasonable, resulting in an involuntary vesignation Demotion in rank or diminution in pay Forced resignation to make it appear that no termination by the employer was done (Leonardo v. NLRC, G.R. No. 125303, June 16, 2000) Test of Constructive dismissal: ihether or not a reasonable person in the employee's position would feel the need to give up his position Note: Abandonment is incompatible with constructive dismissal, 11s the inherent prerogative of an employer to transfer and reass.gn its employees to meet the requirements ofits business. Be that as itmay, the prerogative of the management to transfer its employees must be exercised without grave abuse of dscretion. The exercise of the prerogative should not defeat an employee's right to security of tenure. The employer's privilege to transfer its employees to different workstations cannot be Used as a subterfuge to rid itself of an undesirable worker (Veterans Securiy Agency v Vargas. GR No. 159293, 2005) LABOR LAW Instances of Constructive Dismissal 1. There may be constructive dismissal fan act of an employer becomes so unbearable on the part of the employee that it could foreclose any choice by hum excepto forego ‘us continued employment (Hyatt Taxi Services v. Catinoy, G.R. No, 143204, 2601) 2. Continued employment is rendered impossible or unreasonable, resulting in an involuntary resignation; 3. Demotion in rank or diminution in pay, 4. Forced resignation to make # appear that no termination by the employer was dore (Leonardo v. NLRC, G.R. No. 125303, 2000} 5. Aller the 30-day period of preventive suspension, the employee must be reinstated to his former position because suspension beyond this maximum period amounts to constructive dismissal (Hyatt Tox Services v. Catinoy, supra 6. Floating status of a security guard if it lasts for more than 6 months (Ementus Secunty ‘and Maintenance Systems v. Daily, G.R. No 204761, 2014) Note: itis manifestly unfair and unacceptable to declare the mere lapse of the six-month Period of floating status as a case of constructive dismissal without looking into the peculiar circumstances ‘hat resulted in the security guard's failure 10 assume another post (Exoce! Securiy and Allies Services Corp v. Serrano, G.R. no. 198538, 2014) PAGE 87 OF 28ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW Ee Jurisprudence: Resignation Forced resignation must be substantiated by ‘more than mere threats and allegations. (Mandapat v. AddForce Personnel Services, Ine GR. No. 180285, 2070) A threat to sue the employee wil not amount to forced resignation, as this is a legal act which will be decided by a competent authority. (Callanta v. NLRC, G.R No. 105083, 1993) A choice between investigation and resignation is ‘ot illegal. (Belaunzaran v. NLRC, G.R. 120038, 1996) ‘An employee who tenders her voluntary resignation, accepts separation pay and benefits cannot claim constructive dismissal. (Concrete Aggregates v. NLRC, G.R. No. 82458, 1989) ‘An employee may be considered constructively dismissed and at the same time legally dismissed, ‘as when a complaint for sexual abuse is proven in the NLRC. This wall amount to a termination with just cause but without due process (see the ‘Agabon doctrine above). (Formantes v. Duncan Pharmaceuticals Inc., G.R. No. 170661, 2009) D. TERMINATION BY EMPLOYE! Note: In September 2015, DOLE issued D.O. 147- 18, Amending the IRR of Book VI of the Labor Code. 1. JUST CAUSES, Grounds: (SMWD-GHN-FWB.CO-A) 1. Serious misconduct or Willful Disobedience by the employee of the lawful orders of his ‘employer or representative in connection with his work (work-related) 2. Gross and Habitual neglect by the employee of his duties 3, Fraud or Willful Breach by employee of the ‘Trust reposed in him by his employer or duly authorized representative (not mere suspicion) 4, Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or duly authorized representative 5 Other analogous cases SERIOUS MISCONDUCT OR WILLFUL DISOBEDIENCE (Labor Code, Article 297(@)) Serious Misconduct Improper or wrong conduct; the transgression of some established and definite rule of action, 9 forbidden act, a dereliction of duty. wilful in character, and implies wrongiul intent and not ‘mere error in judgment. To be senous within the meaning and intendment of the law, the ‘misconduct must be of such grave and aggravated character and not merely trivial or unimportant. (Villamor Golf Club v. Pehid, G.R. No. 166152, 2005) The charge of drug abuse inside the company’s premises and during work hours against the petitioner constitutes serious misconduct. (Bughaw Jr. v. Treasure Industrial Corporation, GR. No. 173151, 2008) Elements of Serious Misconduct 41. There must be misconduct: 2. The misconduct must be of such grave and ‘aggravated character, 3. Relates to the performance of the ‘employ2e's duties; and 4. A snowing that the employee becomes unfit {0 continue working for the employer. (0.0. No 147-15, Sec. 5.2{a)) Examples a. Sexual harassment; . Fighting within company premises, ©. Accusatory and inflammatory language used by an employee to an employer or superior (Nissan Motors Phiis. v. Angelo, G.R. No. 164181, 2011) 4. Falsification of time records; @. Gross immorality: and {Sexual intercourse inside company premises and during work hours (Imasen Philippine Manufacturing Corp v. Alcon, GR. No. 194884, 2014) 9g. Theft of company property Habitual Infractions A series of irregularities when pu' together may constitute serious misconduct (Gustilo v. Wyeth Phil. G.R. No. 149629, 2004) PAGE a OF 285ATENEO CENTRAL LABOR LAW BAR OPERATIONS 2018 Totality of infractions doctrine The totality of infractions or the number of Violations committed during the perioo of employment shall be considered determining the penalty to Le imposed upon an erring employee. Fitness for contiwed employment cannot be comparmentalized into tight litle cubicles of aspects of character, conduct and abilty separate and independent of each other While it may be true that petitioner was penalized for his previous infractions, this does not and should not mean that his empbyment record would be wiped clean of his miractions. Alter al the record of an employee is a relevant consideration in determining the peralty that ‘should be meted out since an employee's past misconduct and present behavior must be taken together in determining the proper imposable penalty (Menn v. NLRC, GR. No, 174790) Elements of Willful Disobedience 4. There must be disobedience oF insubordination; 2. The disobedience or insubordination must be willful or intentional characterized by @ ‘wrongful and perverse attitude: 3, The order violated must be reasonable, lawful, and made known to the employee: and 4, The order must pertain to the duties which he has been engaged ‘0 discharge. (0.0. No. 147-15) GROSS AND HABITUAL NEGLECT (Labor Code, Article 297/b)) Elements of Gross and Habitual Negle 1, There must be neglect of duty: and 2. The negligence must be both gross ano hnabwual in character. (0.0. No. 147-15) Gross Neglect ‘An absence of that diigenct prudent man would use sn hs own ‘Manual, Sec. 4343.01127)) .e that an ordinary affairs (DOLE Habitual Neglect Implies repeated failure to perform one’s dulies ‘over a oeriod of time (JGB and Assocrates, Inc. v NLRC. GR mo. 109390, March 7, 1996) Elements of Gross and Habitual Neglec 4. There must be neglect of duty: and 2 The negligence must be both gross and habitual in character. (DO. No 147-15, Sec 5.2ic)) Exception: Where the negligence was 9708s, but not habitual, the SC stil dismissed the fering employee. The SC agreed that the fesuitant damage caused by the employee's negligence should be considered in the dismissal of the employee, In this case, tae damage went as far as claiming the Me of 2 nid. (Schoo! of Holy Spint v Tagum, GR ‘No. 165565, 2008) Note: Actual damage, loss, oF injury 's not an ‘essential requisite (DOLE Manual, Sec 4343,01(2) Forms of neglect of duty 1. Habitual tardiness and absenteeism, 2. Abandonment of work ‘a. Failure to report for work or absence ‘without valid or justifiable reason; and b Clear intention to sever EER is manifested by some overt acts (Tambiot ‘Secunty and General Services v. lem, G.R. No. 199314, 2015) Due Process in Abandonment Twi-Notice Requirement 2 First Notice directing the employee to explain why he should not be declared as having abandoned his job, b. Second Notice {0 inform him of the employer's decision to dismiss him on the ground of abandonment —_(Kingsize Manufacturing Corp v NLRC, GR Nos. 110452,54, 1994) Notices ia abandonment cases must be sent to the employee's last known address per record of the company. The employer need not look for the employee's current whereabouts (Agabon v. NLRC. GR. No. 158693, 2004) No hearing is required to valdly dismiss an ‘employee for abandonment (Intertranz Container Lines v. Baulista, GR No. 187693. 2010)ATENEO CENTRAL BAN OPERATIONS 2018 Mere absence or fait ater notice to return, fo abandonment. At lure to report for werk, even does not necessarily amount bandonment 1s a matter of intention and cannot tightly be presumed from Certain equivocal acts. The operative employee's ultimate act employment (Jordan v. Grandeur Services, G.R. No 206716, 2014) Abandonment vis-d-vis llega! Dismissal General Rule: Abandonment inconsistent with the immediate fiing of a complaint for ilegal dismissal Tamblot Securty v.ttem, GR. No. 199314, 2015) Exception: The above rule has no application where the complainant does not pray for reinstatement and asks for separation pay instead (Wo v. NLRC, G.R. No. 121605, 2000) Poor performance Previous infractions by the eniployee should have been acted upon appropriately by the employer before terminating the former. AS a general concept, “poor performance’ 1s ‘equivalent to inefficiency and incompetence in the Performance of official duties. An unsatisfactory raling can be just cause for dismissal only if it amounts to gross and habitual neglect of duties ‘Thus, the fact that an employee's performance is found to be poor and unsatisfactory does not ‘necessarily mean that the employee is grossly and habitually regligent of his duties. (Universal Staffing Ine. v. NLRC, G.R. No. 177576, 2068) Gross negligence includes gross inefficiency Article 290 of the Labor Code provides that one of the just causes for terminating an employment is the employee's gross and habitual neglect of his duties. This cause includes gross inefficiency, negligence and carelessness (Century iron Works, Inc. v Bafias, GR. No. 184116, 2013) LABOR LAW ———$ FRAUD OR WILLFUL BREACH OF TRUST (Labor Code, Article 297/b)) Elements of Fraud or Wilf Breach of Trust 4 There_must be an act, omission, or conceaimen The acl, omission or concealment involves 8 breach of legal duty, trust, or confidence lusty reposed; |tmust be committed against the employer or hisher representative; and | must be in connection with the employees work. (0.0. No. 147-18, Sec. 5.2) 2 Elements of Loss of Confidence 1. There must be an act, omission or concealment; 2, The act, omission or concealment justifies the loss of trust and confdence of the ‘employer to the employee; 3. The employee concerned must be holding 2 position of trust and confidence; 4. The loss of trust and confidence should not be simulated: 5. It should not be used as a subterfuge for ‘causes which are improper, illegal, or unjustified; and 6 It must be genuine ard not a mere afterthought to justify an earlier action taken ‘nad faith. (0.0. No, 147-15, Sec. 5.2e)) Loss of trust and confidence to be a valid cause {or dismissal must be based on a wilful breach of {rust an¢ founded on clearly established facts, The ‘basis for the dismissal must be clearly and convincingly established but proof beyond Feasonable doubt is not necessary. (Prudential Guarantee and Assurance Employee Labor Union v. NLRC, GF No, 185335, 2012) OF 243 = 2 = 66 oa oo om hee lm AAAAnPePeereeeeePeePeekesReheReheseeePeeSweeeeaerteRaweweee we See Se Se Se SE hl el ae ae eee ee hmm ATENEO CENTRAL BAR OPERATIONS 2018 Guldelines for the application of the doctrine Of loss of confidence @. Loss of confidence should not be simulated It should not be used as a subtertuge for the position of the employee has become superfluous even if the business does not suffer from financial problems. Retrenchment always linked with losses; a cost-cutting measure made necessary by business reverses, (Azucena, The Labor Code with Comments and Cases Volume iI-B, 893, 2016) PAGE 99 OF 245,ATENEO CENTRAL BAR OPERATIONS 2018, LABOR LAW eR “Last In, First Out” Rule (LIFO) ‘When there are two or more employees occupying the same position in the company affected by the retrenchment program, the last one empioyed will necessarly be the fist (0 90 (Maya Farms Employees Organization v. NLRC, GR No. 106266, 1994) However: No law mandates LIFO. A host of relevant actors come into play im determining Costefficient measures in choosing the employees who will be relained or separated to Save the company from closing chop. In determining these issues, management has to enjoy a pre-eminent role. (Asian Alcohol Corp. v. NLRC, G.R. No. 131108 1999) In case of installation of labor-saving devices, redundancy and retrenchment, the LIFO rule shall apply, except when an employee volunteers to be Separated from employment (0.0. No. 147-15, Sec. 54) Hobson's Choice No choice at all; a choice between accepted what is offered or having nothing at al In Asufrin, Jr v. San Migue! Corp. (G.R. No. 156658, 2004), the employees were given the choice either to voluntarily retire, be retrenched witout benéfits, or be dismissed without receiving any benefit at al, INSTALLATION OF LABOR-SAVING DEVICE ‘This refers to the mstallation of machinery to effect economy and efficiency in the employer's method Of production (Edge Apparel, Inc v. NLRC, GR. No 121314, 1998) Elements of a valid termination based on installation of labor-saving devices 1, There must be introduction of machinery, equipment or other devices: 2. The introduction must be done in good faith 3. The purpose for such introduction must be valid such as to save on cost, enhance efficiency and other justifiable economic reasons, 4. There is no other option available to the employer than the introduction of machinery, equipment or device and the ‘consequent termination of employment of those affected thereby; and 5. There must be fair and reasonable criteria in ‘selecting employees to be terminated. (00 147-15) Due Process Requirements for Termination Due to Installation of Labor-Saving Device 1, The employer served a written notice both to the employees and to the DOLE at least 30 days prior to the intended date of termination; and 2. The employer pays the employees separation pay equivalent to one month pay oF atleast one month pay for every year of service, whichever is higher, a fraction of at least six months being considered as one whole year. (Labor Code, Art, 298) OF 783ee ee ee ee ee rnc MWg rrr ee erect reee rere ATENEO CENTRAL BAR OPERATIONS 2018 LABOR LAW —_—. $< $$ $$ CLOSURE OR CESSATION OF OPERATION OF Guidelines in Closure THE ESTABLISHMENT OR UNDERTAKINGS 1. Closure or cessation of operations of Closure of business isthe reversal of fortune of the establishment or undertaking may either be employer whereby there is a complete cessation partial oF total of business operations and/or an actual locking- Upof the dcors of establishment, usually due to 2 Closure or cessation af operations of financial losses. Closure of business as an establishment or undertaking may or may not authorized cause for termination of employment be due to serious business lnsses or financial aims to prevent further financial drain upon an reverses. However, in both instances, proof ‘employer who cannot pay anymore his employees must be shown that since business has already stopped. (AT ‘8. It was done in good faith to advance the General Services v. NLRC, GR. No. 148340, ‘employers interest and not for the purpose 2004) of defeating or circumventing the rights of employees under the law or a valid Elements of Closure or Cessation of Operation agreement, and 1. There must be a decision to close or cease b. A vritten notice on the affected employees ‘operation of the enterprise by the ‘and the DOLE is served at least one month management; before the intended date of termination of 2. The decision was made in good faith; and employment 3. There is no other opinion available to the employer except 10 dose or cease 3. The employer can lawully close shop even if ‘operations. (DO 147-15) not due to serious business iosses or financial reverses but separation pay. which is Due Process Requirements fo: Termination equivalent to atleast one month pay as Due to Closure or Cessation of Operation provided for by the Labor Code as amended, 1. Service of wiitten notice to the employees ‘must be given to al the affected employees. ‘and to the DOLE at least one month before the intended date thereof: 4, Il the closure or cessation of operations of 2. The cessation of or withdrawal from establishment or undertaking is due to serious business operations must be bana fide in business losses or financial reverses, the character, and ‘employer must prove such allegation in order 3. Payment to the employees of termination to avoid the payment of separation pay. pay amounting (0 at least one-half (1/2) Otherwise, the affected employees are entitled ‘month pay for each year of service, or one to separation pay. month pay. whichever is higher. (Azucena, The Labor Code with Comments and Cases 5. The burden of proving compliance with all the Volume 1-8, 903, 2016) above-stated falls upon the employer. (Manila Polo Club Employees’ Union v. Manila Polo Closure Not Due to Losses ‘Club, Inc., G.R. No, 172846, 2013) In cases of closure not due to losses, it must NOT bbe in BAD FAITH. (Azucena, The Labor Code with Comments and Cases Volume !!-B 902, 2016)