LABOR LAW

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TABLE OF CONTENTS 1. Payment of Wages ................................ 47

2. Prohibitions Regarding Wages ........... 49
LABOR STANDARDS ...................................... 1
3. Wage Distortion; Concept .................. 51
I. GENERAL PROVISIONS .................... 2
A. Basic Policy on Labor................................. 2 4. Non-Diminution of Benefits .............. 53
B. Construction in Favor of Labor ............... 3 C. Leaves .......................................................... 54
C. Constitutional and Civil Code Provisions 1. Service Incentive Leave Pay................ 54
relating to Labor Law................................................ 4 2. Maternity Leave .................................... 54
1. 1987 Constitution................................... 4 3. Paternity Leave ...................................... 55
2. New Civil Code ...................................... 7 4. Solo Parent Leave ................................. 56
II. PRE-EMPLOYMENT .......................... 8 5. Leave benefits for women workers
A. Recruitment and Placement of Local and under RA 9710 and RA 9262 ............................ 56
Migrant Workers ........................................................ 8
D. Special Groups of Employees ................. 59
1. Illegal recruitment and other prohibited
activities .................................................................. 9 1. Women ................................................... 59
2. Liability of Local Recruitment Agency 2. Minors .................................................... 62
and Foreign Employer ....................................... 14 3. Kasambahay........................................... 64
3. Termination of Contract of Migrant 4. Homeworkers ........................................ 67
Worker Without Just Cause .............................. 16
5. Night Workers....................................... 67
4. Ban on Direct Hiring ........................... 17
6. Apprentices and Learners ................... 69
5. Regulations of Recruitment and
Placement Activities ........................................... 17 7. Persons with Disabilities ..................... 72

6. Suspension or Cancellation of License IV. SOCIAL WELFARE LEGISLATION

or Authority ......................................................... 19 76
A. SSS Law [RA 8282] ................................... 76
7. Regulatory and Visitorial Powers of the
DOLE Secretary ................................................. 19 1. Coverage and Exclusions .................... 76

8. Prohibited Activities ............................ 19 2. Dependents and Beneficiaries ............ 76

B. Employment of Non-Resident Aliens... 20 3. Benefits ................................................... 77

1. Coverage ................................................ 20 B. GSIS [RA 8291] ......................................... 79

2. Conditions for Grant of Permit......... 21 1. Coverage and Exclusions .................... 79

3. Validity of AEP and Renewal ............ 22 2. Dependents and Beneficiaries ............ 79

4. Denial of Application .......................... 22 3. Benefits ................................................... 79

5. Revocation; Cancellation .................... 23 C. Disability and death benefits ................... 84

III. LABOR STANDARDS .................... 24 1. Labor Code ............................................ 84

A. Conditions of Employment .................... 24 2. POEA-Standard Employment Contract
1. Coverage [Art. 82] ................................ 24 88

2. Hours of Work ..................................... 27 LABOR RELATIONS ..................................... 91

3. Weekly Rest Periods ............................ 36 V. LABOR RELATIONS......................... 92

A. Right to Self-Organization ....................... 92
4. Holidays ................................................. 38
1. Coverage................................................. 93
5. Service incentive leaves ....................... 42
2. Ineligibility of Managerial Employees;
6. Service Charges..................................... 43 Rights of Supervisory Employees .................... 94
7. 13TH Month Pay ................................... 43 3. Effect of Inclusion as Employees
B. Wages .......................................................... 46 Outside the Bargaining Unit ............................. 96

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4. Non – Abridgement ............................ 96 3. Backwages ............................................ 183

5. Rights and Conditions of Membership 4. Damages and Attorney’s Fees .......... 185
97 5. Separation Pay ..................................... 185
B. Bargaining Unit ....................................... 103 F. Money claims arising from employer-
C. Bargaining Representative ..................... 105 employee .................................................................. 187
1. Qualification of Voters...................... 105 1. Money claims cognizable by the Labor
2. Determination of Representation Status Arbiter 187
106 2. Money claims cognizable by the
3. Procedure after Filing Petition ......... 112 Secretary of Labor or its duly authorized
representative ..................................................... 187
4. Bars to a Certificate Election ........... 118
3. Money claims cognizable by the
D. Rights of a Labor Organization ............ 121 Regional Director .............................................. 188
1. Check off, Assessment, Agency Fees G. Retirement ................................................ 189
121
1. Eligibility .............................................. 189
2. Collective Bargaining ......................... 122
2. Amount of Retirement Pay ............... 189
E. Unfair Labor Practice (ULP)................. 131
3. Retirement Benefits of Workers Who
1. Nature, Aspect .................................... 131 are Paid By Results ........................................... 190
2. ULP by Employers ............................ 131 4. Retirement Benefit of Part-Time
3. ULP of Labor Organizations ........... 137 Workers .............................................................. 190
F. Peaceful Concerted Activities ............... 138 5. Non-Taxable........................................ 191
1. Strike..................................................... 139 VII. MANAGEMENT PREROGATIVE
192
2. Picketing .............................................. 146 A. Discipline .................................................. 194
3. Lockouts .............................................. 147 B. Transfer of Employees ........................... 194
VI. POST-EMPLOYMENT ................. 149 C. Productivity Standard ............................. 195
a. Employer-Employee Relationship ....... 149
D. Bonus......................................................... 195
1. Tests to Determine Employer-
Employee (ER-EE) Relationship .................. 149 E. Change of Working Hours .................... 195
2. Kinds of Employment ...................... 151 F. Bonafide Occupational Qualifications . 195
3. Legitimate subcontracting v. Labor- G. Post-Employment Restrictions ............. 196
Only Contracting .............................................. 160 VIII. Jurisdiction and Remedies ............. 197
B. Termination by Employer ..................... 164 A. Labor Arbiter ........................................... 197
1. Just Causes........................................... 166 1. Jurisdiction ........................................... 197
2. Authorized Causes ............................. 172 2. Versus Regional Director [Art. 129] 197
3. Due Process ........................................ 176 3. Requirements to Perfect Appeal to
NLRC 198
C. Termination of Employment by Employee
179 4. Reinstatement Pending Appeal ........ 198
1. Resignation vs. Constructive Dismissal B. National Labor Relations Commission
179 (NLRC) .................................................................... 199
D. Preventive Suspension ........................... 181 1. Jurisdiction/Powers ........................... 199
E. Reliefs for Illegal Dismissal ................... 182 2. Remedies .............................................. 199
1. Reinstatement ..................................... 182 C. Judicial Review of Labor Rulings.......... 202
2. Options given to employers: ............ 182 1. Court of Appeals ................................ 202
2. Supreme Court .................................... 202

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D. Bureau of Labor Relations (BLR) ........ 203

1. Jurisdiction .......................................... 203
2. Appeals ................................................ 204
3. Administrative Functions of the BLR
204
E. National Conciliation and Mediation
Board (NCMB) ...................................................... 205
1. Jurisdiction of the NCMB ................ 205
2. Conciliation v. Meditation ................ 206
3. Preventive Mediation......................... 206
F. DOLE Regional Directors .................... 207
1. Jurisdiction .......................................... 207
2. Recovery/Adjudicatory Power ........ 207
G. DOLE Secretary...................................... 208
1. Visitorial and Enforcement Powers 208
2. Power to Suspend/Effects of
Termination ....................................................... 209
3. Assumption of jurisdiction ............... 209
4. Appellate Jurisdiction ........................ 213
5. Voluntary Arbitration Powers .......... 213
6. Remedies.............................................. 215
H. Grievance Machinery ............................. 215
I. Voluntary Arbitrator ............................... 216
1. Jurisdiction .......................................... 216
2. Procedure ............................................ 217
3. Remedies.............................................. 218
J. Prescription of Action ............................ 219
1. Compensation ..................................... 219
2. Money Claims ..................................... 219
3. Illegal Dismissal .................................. 219
4. Unfair Labor Practice ........................ 219
5. Offenses Penalized by the Labor Code
and IRR Issued Pursuant Thereto ................. 220

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LABOR STANDARDS
LABOR LAW

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U.P. LAW BOC LABOR STANDARDS LABOR LAW

I. GENERAL a. Promote employment of individuals on the basis

PROVISIONS
A. Basic Policy on Labor
Art. 4, Labor Code. Declaration of Basic Policy
– The State shall afford protection to labor,
promote full employment, ensure equal work
opportunities regardless of sex, race or creed and
regulate the relations between workers and
employers. The State shall assure the rights of
workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions
of work.
Note: Art. 4 of the Labor Code must be read in relation
to the 1987 Constitution since this is still based on the
1973 Constitution.
Sec. 3, Art. XIII 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 activities,
including the right to strike in accordance with law.
They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall
also participate in policy and decision-making
processes affecting their rights and benefits as may
be provided by law.
of their abilities, knowledge, skills and
qualifications rather than their age.
b. Prohibit arbitrary age limitations in employment.
c. Promote the right of all employees and workers,
regardless of age, to be treated equally in terms of
compensation, benefits, promotion, training and
other employment
opportunities.
Labor as Protected Class; Presumption of
Inherent Inequality
The presumption is that the employer and the
employee are on unequal footing, so the State has the
responsibility to protect the employee. This
presumption, however, must be taken on a case-to-
case basis. In situations where special qualifications
are required for employment, such as a Master's
degree, prospective employees are at a better position
to bargain with the employer. Employees with special
qualifications would be on equal footing with their
employers, and thus, would need a lesser degree of
protection from the State than an ordinary rank-and-
file worker. [Perfecto Pascua v. Bank Wise Inc., G.R. No.
191460 & 191464 (2018)].
Police Power and State Protection
Police power allows the State to regulate the grant of
right of security of tenure to safeguard the general
welfare of the public. Consequently, persons who
desire to engage in the learned professions requiring
scientific or technical knowledge may be re-quired to
take an examination as a prerequisite to engaging in
their chosen careers. [St. Luke’s Medical Center
Employee’s Foundation-AFW v. NLRC (2007)].

The State shall promote the principle of shared

responsibility between workers and employers and
the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster
industrial peace.

The State shall regulate the relations between

workers and employers, recognizing the right of
labor to its just share in the fruits of production
and the right of enterprises to reasonable returns
to investments, and to expansion and growth.

Sec. 2, R.A. No. 10911. Declaration of Policies

– The State shall promote equal opportunities in
employment for everyone. To this end, it shall be
the policy of the State to:

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U.P. LAW BOC LABOR STANDARDS
B. Construction in Favor of
Labor
Art. 4, Labor Code. Construction in favor of
labor –All doubts in the implementation and
interpretation of the provisions of this Code,
including its implementing rules and regulations,
shall be resolved in favor of labor.
Art. 1702, Civil Code. In case of doubt, all
legislation and all labor contracts shall be construed
in favor of the safety and decent living for the
laborer.
In general
When there is doubt between the evidence submitted
by the employer and that submitted by the employee,
the scales of justice must be tilted in favor of the
employee. This is consistent with the rule that an
employer’s cause could only succeed on the strength
of its own evidence and not on the weakness of the
employee’s evidence. [Misamis Oriental II Electric Service
Cooperative v. Virgilio Cagalawan, G.R. No. 175170
(2012)]
Liberal Construction
Of the laws
Art. 4 of the Labor Code mandates that all doubts in
the implementation and interpretation of the
provisions thereof shall be resolved in favor of labor.
This is merely in keeping with the spirit of our
Constitution and laws which lean over backwards in
favor of the working class, and mandate that every
doubt must be resolved in their favor.” [Hocheng
Philippines Corporation v. Farrales, G.R. No. 211497
(2015)]
Of labor contracts
While the terms and conditions of a CBA constitute
the law between the parties, it is not however, an
ordinary contract to which is applied the principles of
law governing ordinary contracts. A CBA, as a labor
contract within the contemplation of Art. 1700 of the
Civil Code of the Philippines which governs the
relations between labor and capital, is not merely
contractual in nature but impressed with public
interest, thus, it must yield to the common good. As
such, it must be construed liberally rather than
narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated
and purpose which it is intended to serve. [Cirtek
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Employees Labor Union-FFW v. Cirtek Electronics, G.R.
No. 190515 (2010)]
Fair treatment
The right of an employer to dismiss an employee
differs from and should not be confused with the
manner in which such right is exercised. It must not
be oppressive and abusive since it affects one's person
and property. [FASAP v. PAL, G.R. No. 178083
(2008)]
Mutual obligation
The employer's obligation to give his workers just
compensation and treatment carries with it the
corollary right to expect from the workers adequate
work, diligence and good conduct. [Judy Philippines, Inc.
v NLRC, G.R. No. 111934 (1998)]
Compliance with law
It is also important to emphasize that the return-to-
work order not so much confers a right as it imposes
a duty; and while as a right it may be waived, it must
be discharged as a duty even against the worker's will.
[Sarmiento v. Tuico, G.R. No. 75271 (1988)]
Employee's compliance and obedience to
employer's orders
The lack of a written or formal designation should not
be an excuse to disclaim any responsibility for any
damage suffered by the employer due to his
negligence. The measure of the responsibility of an
employee is that if he performed his assigned task
efficiently and according to the usual standards, then
he may not be held personally liable for any damage
arising therefrom. Failing in this, the employee must
suffer the consequences of his negligence if not lack
of due care in the performance of his duties. [PCIB v.
Jacinto, G.R. No. 92742 (1991)]
U.P. LAW BOC LABOR STANDARDS
C. Constitutional and Civil
Code Provisions relating
to Labor Law
1. 1987 Constitution
Section 9, Article II. The State shall promote a just
and dynamic social order that will ensure the
prosperity and independence of the nation and free
the people from poverty through policies that
provide adequate social services, promote full
employment, a rising standard of living, and an
improved quality of life for all.
Sec. 10, Art. II. The State shall promote social
justice in all phases of national development.
Social Justice as justification
Social justice is neither communism, nor despotism,
nor atomism, nor anarchy," but the humanization of
laws and the equalization of social and economic
forces by the State so that justice in its rational and
objectively secular conception may at least be
approximated. Social justice means the promotion of
the welfare of all the people, the adoption by the
Government of measures calculated to insure
economic stability of all the competent elements of
society, through the maintenance of a proper
economic and social equilibrium in the interrelations
of the members of the community, constitutionally,
through the adoption of measures legally justifiable,
or extra-constitutionally, through the exercise of
powers underlying the existence of all governments
on the time-honored principle of salus populi est suprema
lex (the welfare of the people should be the supreme
law). [Calalang v. Williams, G.R. No. 47800 (1940)]
Separation pay as measure of social justice
The rule embodied in the Labor Code is that a person
dismissed for lawful cause is not entitled to separation
pay. Jurisprudence nevertheless constituted an
exception based upon considerations of equity.
Equity has been defined as justice outside law, being
ethical rather than jural and belonging to the sphere
of morals than of law. Strictly speaking, however, it is
not correct to say that there is no express justification
for the grant of separation pay to lawfully dismissed
employees other than the abstract consideration of
equity. The reason is that our Constitution is replete
with positive commands for the promotion of social
justice, and particularly the protection of the rights of
the workers. [PLDT v. NLRC, G.R. No. 80609
(1988)]
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Limits of Social Justice
Social justice should be used only to correct an
injustice [Agabon v. NLRC, G.R. No. 158693 (2004)].
It is not intended to countenance wrongdoing simply
because it is committed by the underprivileged. Social
justice cannot be permitted to be refuge of scoundrels
any more than can equity be an impediment to the
punishment of the guilty. Those who invoke social
justice may do so only if their hands are clean and
their motives blameless and not simply because they
happen to be poor. [Tirazona v. Phil EDS Techno-Service,
Inc., G.R. 169712 (2009)].
Separation pay shall be allowed as a measure of social
justice only in those instances where the employee is
validly dismissed for causes other than serious
misconduct or those reflecting on his moral
character. Where the reason for the valid dismissal
is, for example, habitual intoxication or an offense
involving moral turpitude, like theft or illicit sexual
relations with a fellow worker, the employer may not
be required to give the dismissed employee separation
pay, or financial assistance, or whatever other name it
is called, on the ground of social justice [PLDT v.
NLRC, 247 Phil. 641 (1988)].
Welfare State
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 v. National Power Corporation,
G.R. No. L-24396 (1968)]
Sec. 11, Art. II. The State values the dignity of
every human person and guarantees full respect for
human rights.
Sec. 13, Art. II. The State recognizes the vital role
of the youth in nation-building and shall promote
and protect their physical, moral, spiritual,
intellectual, and social well-being. It shall inculcate
in the youth patriotism and nationalism, and
encourage their involvement in public and civic
affairs.
Sec. 14, Art. II. The State recognizes the role of
women in nation-building and shall ensure the
fundamental equality before the law of women and
men.
U.P. LAW BOC LABOR STANDARDS
Sec. 18, Art. II. The State affirms labor as a
primary social economic force. It shall protect the
rights of workers and promote their welfare.
Sec. 20, Art. II. The State recognizes the
indispensable role of the private sector, encourages
private enterprise, and provides incentives to
needed investments.
Sec. 3, Art. XIII.
xxx
The State shall promote the principle of shared
responsibility between workers and employers and
the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster
industrial peace.
The State shall regulate the relations between
workers and employers, recognizing the right of
labor to its just share in the fruits of production and
the right of enterprises to reasonable returns to
investments, and to expansion and growth.
Laissez Faire
The Constitution is primarily a document of social
justice, and although it has recognized the importance
of the private sector, it has not embraced fully the
concept of laissez-faire or relied on pure market
forces to govern the economy. [Employees Confederation
of the Philippines v. NWPC, G.R. No. 96169 (1991)]
Balancing of Interests
It is 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-
sightedness, failing to realize that they both have a
stake in the business. The employer wants the
business to succeed, considering the investment that
has been made. The employee in turn, also wants the
business to succeed, as continued employment means
a living, and the chance to better one’s lot in life. It is
clear 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 settling
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. Corp Workers
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Association (TMPCWA) v. NLRC, G.R. No. 158786
(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 v. Dejero, G.R. No. 196036 (2013)]
Sec. 1, Art. III. No person shall be deprived of life,
liberty, or property without due process of law, nor
shall any person be denied the equal protection of
the laws.
Due Process
Under the Labor Code, as amended, the requirements
for the lawful 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. [Jeffrey Nacague v. Sulpicio Lines, Inc., G.R. No.
172589 (2010)]
Labor as Property Right
One’s employment is a 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 Manufacturing v. Millena, G.R.
No. 141380 (2004)]
The Right to Assemble
Sec. 4, Art. III. No law shall be passed abridging
the freedom of speech, of expression, or of the
press, or the right of the people peaceably to
assemble and petition the government for redress
of grievances.
The first point to mark is that the right to peaceably
assemble and petition for redress of grievances is,
together with freedom of speech, of expression, and
of the press, a right that enjoys primacy in the realm
of constitutional protection. For these rights
constitute the very basis of a functional democratic
polity, without which all the other rights would be
U.P. LAW BOC LABOR STANDARDS LABOR LAW

meaningless and unprotected [BAYAN, et al. v. Labor Rights and Protection

Ermita, G.R. No. 169838, (2006)].
Wearing armbands and putting up placards to express
one’s views without violating the rights of third
parties, are legal per se and even constitutionally
protected. [Bascon v CA, G.R. No. 144899 (2004)]
Sec. 7, Art. III. The right of the people to
information on matters of public concern shall be
recognized. Access to official records, and to
documents and papers pertaining to official acts,
transactions, or decisions, as well as to government
research data used as basis for policy development,
shall be afforded the citizen, subject to such
limitations as may be provided by law.
Sec. 8, Art. III. 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 shall not be abridged.
Sec. 16, Art. III. All persons shall have the right to
a speedy disposition of their cases before all
judicial, quasi-judicial, or administrative bodies.
Sec. 18 (2), Art. III. No involuntary servitude in
any form shall exist except as a punishment for a
crime whereof the party shall have been duly
convicted.
The route to achieving social justice is presented as
consisting of two principal tracks: first, according to
the second paragraph of Section 1, there must be
regulation of the acquisition, ownership, use, and
disposition of property and its increments, and
second, according to Section 2, Congress should
create economic opportunities based on freedom of
initiative and self-reliance. [Bernas, The 1987
Philippine Constitution: a Comprehensive Reviewer]

Sec. 1, Art. XIII. The Congress shall give highest

The Right to Form Associations
The right to form associations shall not be impaired
except through a valid exercise of police power.
[Bernas, The 1987 Philippine Constitution: a
Comprehensive Reviewer]
Non-impairment of Contracts
Sec. 10, Art. III. No law impairing the obligation
of contracts shall be passed.
priority to the enactment of measures that protect
and enhance the right of all the people to human
dignity, reduce social, economic, and political
inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for
the common good.
To this end, the State shall regulate the acquisition,
ownership, use, and disposition of property and its
increments.

A law which changes the terms of a legal contract

Sec. 2, Art. XIII. The promotion of social justice
shall include the commitment to create economic
between parties, either in the time or mode or
opportunities based on freedom of initiative and
performance, or imposes new conditions, or
self-reliance.
dispenses with those expressed, or authorizes for its
satisfaction something different from that provided in
its terms, is a law which impairs the obligation of a
Sec. 3, Art. XIII. The State shall afford full
protection to labor, local and overseas, organized
contract and is null and void. [Clemens v. Nolting, G.R.
and unorganized, and promote full employment
No. L-17959 (1922)]
and equality of employment opportunities for all.
Vis-à-vis the freedom of contract
It shall guarantee the rights of all workers to self-
The prohibition to impair the obligation of contracts
organization, collective bargaining and
is not absolute and unqualified. In spite of the
negotiations, and peaceful concerted activities,
constitutional prohibition and the fact that both
including the right to strike in accordance with law.
parties are of full age and competent to contract, it
They shall be entitled to security of tenure, humane
does not necessarily deprive the State of the power to
conditions of work, and a living wage. They shall
interfere where the parties do not stand upon an
also participate in policy and decision-making
equality, or where the public health demands that
processes affecting their rights and benefits as may
one party to the contract shall be protected against
be provided by law.
himself. [Leyte Land Transportation Co. v. Leyte Farmers
& Workers Union, G.R. No. L-1377 (1948)]

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U.P. LAW BOC LABOR STANDARDS
CARDINAL LABOR RIGHTS IN THE 1987
CONSTITUTION
a. Right to self-organization
b. Right to collective bargaining and negotiation
c. Right to peaceful concerted activities, including
the right to strike
d. Right to security of tenure
e. Right to humane conditions of work
f. Right to a living wage
g. Right to participate in policy and decision making
Participation in Decision-Making Process
Verily, a line must be drawn between management
prerogatives regarding business operations per se and
those which affect the rights of the employees. In
treating the latter, management should see to it that
its employees are at least properly informed of its
decisions or modes action. Indeed, industrial peace
cannot be achieved if the employees are denied their
just participation in the discussion of matters affecting
their rights. [Phil. Airlines Inc. v. NLRC, G.R. No.
85985 (1993)]
Sec. 13, Art. XIII. The State recognizes the vital
role of the youth in nation-building and shall
promote and protect their physical, moral, spiritual,
intellectual, and social well-being. It shall inculcate
in the youth patriotism and nationalism, and
encourage their involvement in public and civic
affairs.
Sec. 14, Art. XIII. 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.
2. New Civil Code
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.
Art. 1701. Neither capital nor labor shall act
oppressively against the other, or impair the interest
or convenience of the public.
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Art. 1702. In case of doubt, all labor legislation and
all labor contracts shall be construed in favor of the
safety and decent living for the laborer.
Art. 1703. No contract which practically amounts
to involuntary servitude, under any guise
whatsoever, shall be valid.
Contracts
Under the Civil Code [hereinafter, CC], contracts of
labor are explicitly subject to the police power of the
state because they are not ordinary contracts but are
impressed with public interest. Inasmuch as in this
particular instance the contract in question would
have been deemed in violation of pertinent labor laws,
the provisions of said laws would prevail over the
terms of the contract, and private respondent would
still be entitled to overtime pay. [PAL Employees
Savings and Loan Assn., Inc. v. NLRC, G.R. No. 105963
(1996)]
Indeed, a contract of employment is impressed with
public interest. For this reason, provisions of
applicable statutes are deemed written into the
contract. Hence, the parties are not at liberty to
insulate themselves and their relationships from the
impact of labor laws and regulations by simply
contracting with each other. Moreover, in case of
doubt, the terms of a contract should be construed in
favor of labor. [Innodata Philippines, Inc. v. Quejada-
Lopez, G.R. No. 162839 (2006)]
A contract is the law between the parties, and courts
have no choice but to enforce such contract so long
as it is not contrary to law, morals, good customs or
public policy. Otherwise, courts would be interfering
with the freedom of contract of the parties. Simply
put, courts cannot stipulate for the parties or amend
the latter’s agreement, for to do so would be to alter
the real intention of the contracting parties when the
contrary function of courts is to give force and effect
to the intention of the parties. [Maynilad Water
Supervisors Association v. Maynilad Water Services, Inc.,
G.R. No. 198935 (2013)]
U.P. LAW BOC LABOR STANDARDS
II. PRE-EMPLOYMENT
A. Recruitment and
Placement of Local and
Migrant Workers
“Recruitment and placement" refers to any act of:
1. Canvassing,
2. Enlisting,
3. Contracting,
4. Transporting,
5. Utilizing
6. Hiring, or
7. Procuring workers
And includes
1. Referrals,
2. Contract services,
3. Promising, or
4. Advertising for employment, locally or abroad,
whether for profit or not
Provided, That any person or entity which, in any
manner, offers or promises for a fee employment to
two or more persons shall be deemed engaged in
recruitment and placement. [Art. 13 (b), Labor Code]
N.B. The acts committed must be in relation to a
possible employment.
Any of the acts mentioned above constitutes
recruitment and placement.
The proviso provides for a presumption that a person
or entity so described engages in recruitment and
placement [People v. Panis, G.R. No. 58674 (1988)]
What constitutes recruitment?
The number of persons dealt with is not an essential
ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in Art. 13(b) will
constitute recruitment and placement even if only one
prospective worker is involved. The proviso merely
lays down a rule of evidence that where a fee is
collected in consideration of a promise or offer of
employment to two or more prospective workers, the
individual or entity dealing with them shall be
presumed to be engaged in the act of recruitment and
placement. [People v. Panis, supra.]
Acts of referral
The act of referral, which is included in recruitment,
is "the act of passing along or forwarding of an
applicant for employment after an initial interview of
Page 8 of 220
LABOR LAW
a selected applicant for employment to a selected
employer, placement officer or bureau." [Rodolfo v.
People, G.R. No. 146964 (2006)]
Promising employment
Promising employment as factory workers and
receiving money allegedly for processing papers
without authorization or license is engaging into
unlawful recruitment and placement activities. The
absence of the necessary license or authority renders
all of accused-appellant’s recruitment activities
criminal. [People v. Saulo, G.R. No. 125903 (2000)]
Worker – refers to any member of the labor force,
whether employed or unemployed [Art.13 (a)]
Overseas Filipino Worker – is a person who is to be
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 navigating the
foreign seas other than a government ship used for
military or non-commercial purposes or on an
installation located offshore or on the high seas; to be
used interchangeably with migrant worker. [Sec. 2 (a),
RA 8042, as amended]
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
[Art. 13 (c)]
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 [Art. 13 (e)]
Policy of Close Government Regulation
RA 9422 or the Act to Strengthen the Regulatory
Functions of the Philippine Overseas Employment
Administration of 2007 expressly repealed Sections
29 and 30 of RA 8042 which provided for the
deregulation of recruitment activities.
Recruitment of Local and Migrant Workers
Policy of Selective Deployment
The State shall 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 following as a
guarantee on the part of the receiving country for the
protection of the rights of overseas Filipino workers:
1. It has existing labor and social laws protecting the
rights of workers, including migrant workers;
2. It is a signatory to and/or a ratifier of multilateral
conventions, declarations or resolutions relating
U.P. LAW BOC LABOR STANDARDS
to the protection of workers, including migrant
workers; and
3. 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. [Sec. 3, RA 8042, as amended]
[..] The Department of Foreign Affairs, through its
foreign posts, shall issue a certification to the POEA,
specifying therein the pertinent provisions of the
receiving country's labor/ social law, or the
convention/ declaration/ resolution, or the bilateral
agreement/ arrangement which protect the rights of
migrant workers.
The State shall also allow the deployment of overseas
Filipino workers to vessels navigating the foreign seas
or to installations located offshore or on high seas
whose owners/employers are compliant with
international laws and standards that protect the
rights of migrant workers.
The State shall likewise allow the deployment of
overseas Filipino workers to companies and
contractors with international operations: Provided,
That they are compliant with standards, conditions
and requirements, as embodied in the employment
contracts prescribed by the POEA and in accordance
with internationally-accepted standards. [Sec. 3, RA
8042, as amended]
1. Illegal recruitment and other
prohibited activities
a. Elements
b. Types of Illegal Recruitment
[The elements and types of illegal recruitment will be
discussed simultaneously.]
1. Simple Illegal Recruitment
a. Illegal recruitment for Local Workers
i. First type: Licensee/holder of authority
[Art. 34]
ii. Second type: Non-licensee/non-holder
of authority [Art. 38]
b. Illegal recruitment for Migrant Workers
i. First type: Non-licensee/non-holder of
authority [Sec. 6, R.A. No. 8042]
Page 9 of 220
LABOR LAW
ii. Second type: Licensee/non-licensee or
holder of authority/non-holder of
authority [Sec. 6, R.A. No. 8042]
2. Illegal Recruitment Constituting Economic
Sabotage
a. Syndicated [Art. 38 for local; Sec. 6, R.A. No.
8042 for migrant]
b. Large Scale [Art. 38 for local; Sec. 6, R.A.
No. 8042 for migrant]
i. Simple Illegal Recruitment
a. Illegal recruitment of Local Workers
[governed by Arts. 34 and 38 of the Labor
Code]
1. First type: Licensee/holder of authority
a. That the offender has a valid license or
authority required by law to enable one to
lawfully engage in recruitment and
placement of workers; and
b. That he or she undertakes any of the
prohibited practices enumerated under
Article 34 of the Labor Code [Art. 34, LC]
2. Second type: Non-licensee/non-holder of
authority
a. That the offender has no valid license or
authority required by law to enable one to
lawfully engage in recruitment and
placement of workers; and
b. That he or she undertakes either any activity
within the meaning of "recruitment and
placement" defined under Article 13 (b), or
any prohibited practices enumerated under
Article 34 of the Labor Code [Art. 38, LC].
Prohibited Practices under Art. 34
It shall be unlawful 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, or to make a worker pay any
amount greater than that actually received by him
as a loan or advance;
2. To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
3. To give any false notice, testimony, information
or document or commit any act of
misrepresentation for the purpose of securing a
license or authority under this Code.
4. To induce or attempt to induce a worker already
employed to quit his employment in order to
offer him to another unless the transfer is
U.P. LAW BOC LABOR STANDARDS
designed to liberate the worker from oppressive
terms and conditions of employment;
5. To influence or to attempt to influence any
person or entity not to employ any worker who
has not applied for employment through his
agency;
6. 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;
7. To obstruct or attempt to obstruct inspection by
the Secretary of Labor or by his duly authorized
representatives;
8. To fail to file reports on the status of
employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs,
departures and such other matters or information
as may be required by the Secretary of Labor.
9. 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;
10. 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
11. To withhold or deny travel documents from
applicant workers before departure for monetary
or financial considerations other than those
authorized under this Code and its implementing
rules and regulations. [Art. 34]
Profit or lack thereof is immaterial
The act of recruitment may be "for profit or not."
Notably, it is the lack of the necessary license or
authority, not the fact of payment that renders the
recruitment activity of the agency unlawful. [cf. Sharp
v. Espanol, G.R. No. 155903 (2007)]
b. Illegal recruitment of Migrant Workers
[governed by RA 8042, as amended by RA
10022]
Illegal Recruitment shall mean 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 non-licensee or non-holder of
authority contemplated under Art. 13(f) of
Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines:
Provided, That any such non-licensee or non-holder
who, in any manner, offers or promises for a fee
Page 10 of 220
LABOR LAW
employment abroad to two or more persons shall be
deemed so engaged. [Sec. 5, RA 10022]
1. First type: Non-licensee/non-holder of authority
a. Person charged undertakes any recruitment
activity as defined in Art. 13 (b) of the Labor
Code; and
b. Said person does not have a license or
authority to do so. [People v. Sison, G.R. No.
187160 (2017)]
2. Second type: Licensee/non-licensee or holder of
authority/non-holder of authority
a. Person charged commits any of the
enumerated prohibited acts under Sec. 6 of
R.A. 8042, as amended by, R.A. 10022;
b. It is immaterial whether he is a holder or not
of any license or authority [People v. Sison,
supra]
Other prohibited acts under Sec. 6
It shall likewise include the following acts, whether
committed by any person, whether a non-licensee,
non-holder, 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 and Employment, or to make
a worker pay or acknowledge any amount greater
than that actually received by him as a loan or
advance;
2. To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
3. To give any false notice, testimony, information
or document or commit any act of
misrepresentation for the purpose of securing a
license or authority under the Labor Code, or for
the purpose of documenting hired workers
with the POEA, which include the act of
reprocessing workers through a job order
that pertains to nonexistent work, work
different from the actual overseas work, or
work with a different employer whether
registered or not with the POEA;
4. To include or attempt to induce a worker already
employed to quit his employment in order to
offer him another unless the transfer is designed
to liberate a worker from oppressive terms and
conditions of employment;
5. To influence or attempt to influence any person
or entity not to employ any worker who has not
applied for employment through his agency or
who has formed, joined or supported, or has
contacted or is supported by any union or
workers' organization;
U.P. LAW BOC LABOR STANDARDS
6. 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;
7. To obstruct or attempt to obstruct inspection by
the Secretary of Labor and Employment or by his
duly authorized representative
8. To fail to submit 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 and
Employment;
9. To substitute or alter to the prejudice of the
worker, employment contracts approved and
verified by the Department of Labor and
Employment from the time of actual signing
thereof by the parties up to and including the
period of the expiration of the same without the
approval of the Department of Labor and
Employment;
10. For an officer or agent of a recruitment or
placement agency to become an officer or
member of the Board of any corporation engaged
in travel agency or to be engaged directly or
indirectly in the management of travel agency;
11. To withhold or deny travel documents from
applicant workers before departure for monetary
or financial considerations, or for any other
reasons, other than those authorized under the
Labor Code and its implementing rules and
regulations;
12. Failure to actually deploy a contracted worker
without valid reason as determined by the
Department of Labor and Employment;
13. Failure to reimburse expenses incurred by the
worker in connection with his documentation
and processing for purposes of deployment, in
cases where the deployment does not actually
take place without the worker's fault. Illegal
recruitment when committed by a syndicate or in
large scale shall be considered an offense
involving economic sabotage; and
14. To allow a non-Filipino citizen to head or
manage a licensed recruitment/manning agency
[Sec. 6, RA 8042]
Note: Underlined parts differ from those stated in the
prohibited practices under the Labor Code [See also
Art. 34]
Prohibited acts added by the amendment
In addition to the acts enumerated above, it shall also
be unlawful for any person or entity to commit the
following prohibited acts:
1. Grant a loan to an overseas Filipino worker with
interest exceeding eight percent (8%) per annum,
Page 11 of 220
LABOR LAW
which will be used for payment of legal and
allowable placement fees and make the migrant
worker issue, either personally or through a
guarantor or accommodation party, postdated
checks in relation to the said loan;
2. Impose a compulsory and exclusive arrangement
whereby an overseas Filipino worker is required
to avail of a loan only from specifically designated
institutions, entities or persons;
3. Refuse 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 own;
4. 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 principal/shipowner;
5. Impose a 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;
6. For a suspended recruitment/manning agency to
engage in any kind of recruitment activity
including the processing of pending workers'
applications; and
7. For a recruitment/manning 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. [Sec. 6, RA 8042 as amended]
Effect of license
By its terms, persons who engage in "canvassing,
enlisting, contracting, transporting, utilizing, hiring, or
procuring workers" without the appropriate
government license or authority are guilty of illegal
recruitment whether or not they commit the wrongful
acts enumerated in that section. On the other hand,
recruiters who engage in the canvassing, enlisting, etc.
of OFWs, although with the appropriate government
license or authority, are guilty of illegal recruitment
only if they commit any of the wrongful acts
enumerated in Section 6. [Sto. Tomas v. Salac, G.R. No.
152642 (2012)]
Even the mere employee of a company or
corporation engaged in illegal recruitment could be
held liable, along with the employer, as a principal in
U.P. LAW BOC LABOR STANDARDS
illegal recruitment once it was shown that he had
actively and consciously participated in illegal
recruitment. [People v. Bayker, G.R. No. 170192 (2016)]
Accused must give the impression of ability to
send complainant abroad for work
It is well-settled that to prove illegal recruitment, 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 in order to be employed. [People v. Ochoa, G.R.
No. 173792 (2011)] Ability to send complainant
abroad is not enough. It must be for work.
Lack of receipts not fatal
In illegal recruitment, mere failure of the complainant
to present written receipts for money paid for acts
constituting recruitment activities is not fatal to the
prosecution, provided the payment can be proved by
clear and convincing testimonies of credible
witnesses. [People v. Alvarez, G.R. 142981 (2002)]
Contract Substitution amounts to Illegal
Recruitment
The reduced salaries and employment period in the
new employment contract contradicted the POEA-
approved employment contract. By this act of
contract substitution, respondents committed a
prohibited practice and engaged in illegal recruitment
as defined in Art. 34(i). [PERT/CPM Manpower
Exponent Co. v. Vinuya, G.R. No. 197528 (2012)]
Migrant Workers’ Act (MWA) expands the
definition of illegal recruitment
The amendments to the Labor Code introduced by
Republic Act No. 8042, otherwise known as the
Migrant Workers and Overseas Filipinos Act of 1995,
broadened the concept of illegal recruitment and
provided stiffer penalties, especially for those that
constitute economic sabotage. [People v. Ocden, G.R.
No. 173198 (2011)]
Simple illegal recruitment comparison
Non-
Licensee/holder licensee/
LOCAL
of authority non-holder
of authority
Not allowed
Recruitment [Sec. 13(b);
Allowed
and placement Sec. 38 of
LC]
Prohibited
Not allowed [Sec. 34; 38 of LC]
practices
Prohibited acts N/A N/A
Page 12 of 220
LABOR LAW
Non-
Licensee/holder licensee/
MIGRANT
of authority non-holder of
authority
Not allowed
Recruitment and [Sec. 6, RA
Allowed
placement 8042, as
amended]
Prohibited Not allowed [Sec. 6, RA 8042, as
practices amended]
Not allowed [7 acts under Sec. 6,
Prohibited acts RA 8042 as amended by RA
10022]
ii. Illegal recruitment as Economic
Sabotage
Both for local and migrant workers
Illegal recruitment is considered economic sabotage
when the commission thereof is attended by the ff.
qualifying circumstances:
1. By a syndicate - if carried out by a group of 3 or
more persons conspiring and confederating with
one another;
2. In large scale - if committed against 3 or more
persons individually or as a group. [Art. 38(b),
LC; Sec. 6 of RA 8042 as amended]
a. For Local Workers
1. First type: by a syndicate
a. 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;
b. He has no valid license or authority required
by law to enable one to lawfully engage in
recruitment and placement of workers;
AND
c. 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)]
2. Second type: in large scale
a. The accused engages in acts of recruitment
and placement of workers defined under Art.
13(b) of the Labor Code or in any prohibited
activities under Art. 34 of the Labor Code;
b. The accused has not complied with the
guidelines issued by the Secretary of Labor
and Employment, particularly with respect
to the securing of license or an authority to
U.P. LAW BOC LABOR STANDARDS LABOR LAW

recruit and deploy workers, either locally or SUMMARY OF ELEMENTS

overseas; and As per People v. Sadiosa [G.R. No. 107084 (1998)],
c. The accused commits the unlawful acts there are at least four kinds of illegal recruitment
against three or more persons individually or under the law.
as a group [Art. 38 (b), LC].
Simple Illegal Recruitment
b. For Migrant Workers First type Second type
1. Licensee/Holder of 1. Non-licensee/Non-
1. First type: by syndicate authority holder of authority
a. The offender does not have the valid license 2. Undertakes 2. Undertakes
or authority required by law to engage in prohibited practices recruitment and
recruitment and placement of workers; under Art. 34 of the placement under Art.
b. The offender undertakes any of the LC (Local) or Sec. 6 of 13(b) or undertakes
"recruitment and placement" activities R.A. No. 8042 as prohibited
defined in Article 13(b) of the Labor Code, amended (Migrant) practices/activities:
or engages in any of the prohibited practices Local - under Art. 34
enumerated under now Section 6 of RA Migrant - Sec. 6, R.A.
8042; and No. 8042
c. The illegal recruitment is "carried out by a
group of three or more persons conspiring Economic sabotage
and/or confederating with one another in Third type Fourth type
carrying out any unlawful or illegal In large scale Syndicated
transaction, enterprise or scheme." [People v. 1. The accused engages 1. The offender
Sison, G.R. No. 187160 (2017)] in acts of recruitment undertakes any
and placement under activity within the
2. Second type: in large scale Art. 13(b) or meaning of
a. The person charged undertook any undertakes "recruitment and
recruitment activity as defined under Section prohibited placement" under
6 of RA 8042; practices/activities Art. 13(b), or any of
b. Accused did not have the license or the under Art. 34 (Local) the prohibited
authority to lawfully engage in the or Sec. 6 of R.A. No. practices
recruitment of workers; and, 8042 (Migrant) enumerated under
c. accused committed the same against three or 2. He/she has no valid Art. 34 (Local) or
more persons individually or as a group. license or an Sec. 6 of R.A. No.
[People v. De los Reyes, G.R. No. 198795 authority to recruit 8042 (Migrant)
(2017)] and deploy workers, 2. He/she has no valid
either locally or license or authority
Illegal recruitment in large scale; three or more overseas; and required by law to
complainants must be in a single case 3. The accused recruit and deploy
When the Labor Code speaks of illegal recruitment commits the workers, either
"committed against three (3) or more persons unlawful acts against locally or overseas;
individually or as a group," it must be understood as three or more and
referring to the number of complainants in each case persons individually 3. The illegal
who are complainants therein, otherwise, or as a group recruitment is
prosecutions for single crimes of illegal recruitment committed by a
can be cumulated to make out a case of large scale group of three or
illegal recruitment. In other words, a conviction for more persons
large scale illegal recruitment must be based on a confederating with
finding in each case of illegal recruitment of three or one another [People
more persons whether individually or as a group. v.Gallo, G.R. No.
[People v. Reyes, G.R. No. 105204 (1995)] 187730 (2010)]
Number of Victims Must be Alleged
The information for illegal recruitment done in large
scale must allege the number of victims in the case
[People v. Fernandez, 725 SCRA 152 (2014)]

Page 13 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW

c. Illegal Recruitment v. Estafa 2. Liability of Local

Illegal Recruitment Estafa
Recruitment Agency and
Malum prohibitum Malum in se Foreign Employer
Conviction for offenses Conviction for estafa
under the Labor Code does not bar a a. Local Recruitment Agency
does not bar conviction conviction for illegal
for offenses punishable recruitment under the Illegal recruitment involving local workers [Art.
by other laws. Labor Code. 39]
One convicted for illegal recruitment may still be Act Penalty
convicted of estafa
Licensee or holder of Imprisonment: 2-5 yrs.
In People v. Cortez the Court explained that: “In this
authority violating or OR
jurisdiction, it is settled that a person who commits
causing another to Fine: P10k – P50k
illegal recruitment may be charged and convicted
violate Title I, Book I, OR
separately of illegal recruitment under the Labor Code
Both
and estafa under par. 2(a) of Art. 315 of the Revised
Neither a licensee nor a Imprisonment: 4-8 yrs.
Penal Code. The offense of illegal recruitment is
holder of authority OR
malum prohibitum where the criminal intent of the
violating or causing Fine: P20k – P100k
accused is not necessary for conviction, while estafa
another to violate Title OR
is malum in se where the criminal intent of the accused
I, Book I, Both
is crucial for conviction. Conviction for offenses
under the Labor Code does not bar conviction for Illegal recruitment Life imprisonment
offenses punishable by other laws. Conversely, constituting economic AND
conviction for estafa under par. 2(a) of Art. 315 of the sabotage Fine: P100k
Revised Penal Code does not bar a conviction for
illegal recruitment under the Labor Code. It follows If the offender is a corporation, partnership,
that one's acquittal of the crime of estafa will not association or entity, the penalty shall be imposed
necessarily result in his acquittal of the crime of illegal upon the officer or officers of the corporation,
recruitment in large scale, and vice versa.” [People v. partnership, association or entity responsible for
Ochoa, G.R. No. 173792 (2011); People v. Ocden, G.R. violation.
No. 173198 (2011)]
If such officer is an alien, he shall, in addition to the
Requirement of Intent and Profit penalties herein prescribed, be deported without
The filing of criminal cases for both illegal further proceedings.
recruitment and estafa does not constitute double
jeopardy. In the first, the criminal intent of the In every case, conviction shall cause and carry the
accused is not necessary for conviction. In the second, automatic revocation of the license or authority
such intent is imperative. In illegal recruitment, profit and all the permits and privileges granted to such
is immaterial; on the other hand, a conviction for person or entity under this Title, and the forfeiture of
estafa requires a clear showing that the offended party the cash and surety bonds in favor of the POEA or
parted with his money or property upon the the Regional Department which has jurisdiction
offender’s false pretenses, and suffered damage over the place where the agency or branch office is
thereby. The two are then completely different and located, as the case may be, both of which are
distinct crimes. [People v. Melissa Chua, G.R. No. authorized to use the same exclusively to promote
187052 (2012)] their objectives. [Art. 39 (3), Labor Code].

Illegal recruitment involving migrant workers

[Sec. 7, RA 8042 as amended]

Act Penalty
Imprisonment: 6 yrs. and 1 day –
Prohibited 12 yrs.
Act/s AND
Fine: P500k – P1M

Page 14 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Act Penalty Two jurisdiction rule

Imprisonment: 12 yrs. and 1 day – A criminal action arising from illegal recruitment of
Illegal 20 yrs. migrant workers shall be filed with the RTC of the
recruitment AND province or city:
Fine: P1M – P2M 1. where the offense was committed or
Life imprisonment 2. where the offended party actually resides at
AND the time of the commission of the offense.
Fine: P2M – P5M [Sec. 9, RA 8042 (this part was not amended by
Illegal RA 10022)].
recruitment
Maximum penalty if:
constituting Provided, that the court where the criminal action is
1. Illegally recruited person
economic first filed shall acquire jurisdiction to the exclusion of
below 18 years old
sabotage other courts. [Sec. 6, Rule IV, Omnibus Rules
OR
2. Offense committed without implementing RA 8042, as amended by RA 10022]
license/authority
Prescriptive Periods
If the offender is an alien, he or she shall, in addition
to the penalties herein prescribed, be deported Illegal recruitment of local workers
without further proceedings. Whether simple or involing economic sabotage, the
action shall prescribe in three (3) years. [Art. 305, LC]
In every case, conviction shall cause and carry the
automatic revocation of the license or Illegal recruitment of migrant workers
registration of the recruitment/ manning agency, 1. Simple Illegal Recruitment – 5 years
lending institutions, training school or medical clinic. 2. Illegal Recruitment involving Economic
Sabotage – 20 years [Sec. 12, RA 8042]
Common Rules on Liability
1. Employees of a company or corporation b. Foreign Employer
engaged in illegal recruitment may be held
liable as principal, together with his employer, if Foreign employer shall assume joint and solidary
it is shown that he actively and consciously liability with the employer for all claims and
participated in illegal recruitment. [People v. liabilities which may arise in connection with the
Sagayaga, G.R. 143726 (2004)] implementation of the contract, including but not
2. Private employment agencies are held jointly limited to payment of wages, death and disability
and severally liable with the foreign-based compensation and repatriation
employer for any violation of the recruitment
agreement or contract of employment. This c. Solidary Liability
joint and solidary liability imposed by law against
recruitment agencies and foreign employers is
Solidary Liability of Agent and Principal
meant to assure the aggrieved worker of
The liability of the principal/employer and the
immediate and sufficient payment of what is due
recruitment/placement agency for any and all claims
him [Becmen Service Exporter v. Sps. Cuaresma, G.R.
arising out of an employer-employee relationship or
182978-79 (2009]
by virtue of any law or contract involving Filipino
3. If the recruitment/placement agency is a juridical
workers for overseas deployment including claims for
being, the corporate officers and directors and
actual, moral, exemplary and other forms of damages
partners as the case may be, shall themselves be
shall be joint and several. This liability shall be
jointly and solidarily liable with the corporation
incorporated in the contract for overseas employment
or partnership for the aforesaid claims and
and shall be a condition precedent for its approval.
damages. [Becmen Service Exporter v. Sps. Cuaresma,
The performance bond to be filed by the
G.R. 182978-79 (2009]
recruitment/placement agency, as provided by law,
4. Foreign employer shall assume joint and
shall be answerable for all money claims or damages
solidary liability with the recruitment/
that may be awarded to the workers. If the
placement agency for all claims and liabilities
recruitment/placement agency is a juridical being, the
which may arise in connection with the
corporate officers and directors and partners as the
implementation of the contract, including but not
case may be, shall themselves be jointly and solidarily
limited to payment of wages, death and disability
liable with the corporation or partnership for the
compensation and repatriation

Page 15 of 220
U.P. LAW BOC LABOR STANDARDS
aforesaid claims and damages. [Sec. 10, RA 8042, as
amended]
The written application for a license to operate a
private employment agency shall be submitted with,
among others, a duly notarized undertaking stating
that the applicant:
1. Shall assume full and complete responsibility
for all claims and liabilities which may arise in
connection with the use of the license;
2. Assume joint and several liability with the
employer for all claims and liabilities which may
arise in connection with the implementation of the
contract, including but not limited to unpaid
wages, death and disability compensation and
repatriation;
3. Assume full and complete responsibility for all
acts of its officers, employees and representatives
done in connection with recruitment and
placement [Part II, Rule II, Sec. 4 (f) (7-9), 2016
Revised POEA Rules and Regulations]
In case of a corporation or partnership, a duly
notarized undertaking by the corporate officers and
directors, or partners, that they shall be jointly and
severally liable with the corporation or partnership for
claims and/or damages that may be awarded to the
workers is also required. [Part II, Rule II, Sec. 4 (g),
2016 Revised POEA Rules and Regulations]
Purpose of Solidary Liability
The fact that the manning agency and its principal
have already terminated their agency agreement does
not relieve the former of its liability. The agency
agreement with the principal even if ended as between
them, still extends up to and until the expiration of,
the employment contracts of the employees recruited
and employed pursuant to the said recruitment
agreement. Otherwise, this will render nugatory the
very purpose for which the law governing the
employment of workers for foreign jobs abroad was
enacted, that is, to assure aggrieved workers of
immediate and sufficient payment of what is due
them. [OSM Shipping Phil, Inc. v. NLRC, G.R. No.
138193 (2003)]
d. Theory of Imputed Knowledge
This is a doctrine in agency which states that the
principal is chargeable with and bound by the
knowledge of or notice to his agent received while the
agent was acting as such. Simply put, notice to the
agent is notice to the principal.
Since the local employment agency is considered the
agent of the foreign employer, the principal,
Page 16 of 220
LABOR LAW
knowledge of the former of existing labor and social
legislation in the Philippines is binding on the latter.
Consequently, notice to the former of any violation
thereof is notice to the latter.
However, notice to the principal is not notice to the
agent. The SC held in Sunace International Management
Services, Inc. v. NLRC [G.R. 161757 (2006)] that “the
theory of imputed knowledge ascribes the knowledge
of the agent to the principal, not the other way
around. The knowledge of the principal-foreign
employer cannot, therefore, be imputed to its agent.”
3. Termination of Contract of
Migrant Worker Without Just
Cause
In case of termination of overseas employment,
a. without just, valid or authorized cause as defined
by law or contract, or
b. any unauthorized deductions from the migrant
worker's salary
...shall entitle the worker to full reimbursement of:
a. his placement fee and the deductions made with
interest at twelve percent (12%) per annum;
AND,
b. his salaries for the unexpired portion of his
employment contract [or for three (3) months for
every year of the unexpired term, whichever is
less*] [Sec. 10, RA 8042, as amended by RA
10022]
Rule before Serrano (1995-2009): 3-month salary
rule applied
The employment contract involved in the instant case
covers a two-year period but the overseas contract
worker actually worked for only 26 days prior to his
illegal dismissal. Thus, the three months’ salary rule
applies [Flourish Maritime Shipping v. Almanzor, G.R.
No. 177948 (2008)]
Rule after Serrano: invalidated the 3-month salary
cap clause
The SC there held that “said clause is unconstitutional
for being an invalid classification, in violation of the
equal protection clause”. [Serrano v. Gallant Maritime
Services, Inc., G.R. No. 167614 (2009)]
In the case of Yap v. Thenamaris Ship’s Management and
Intermare Maritime Agencies, Inc. [G.R. No. 179532
(May 30, 2011)], the SC affirmed the Serrano ruling,
but did not apply the Operative Fact doctrine: “As an
exception to the general rule, the doctrine applies only
as a matter of equity and fair play.”
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Note: In 2010, a year after Serrano, RA 10022, in
amending RA 8042, reincorporated the nullified 3-
month salary cap clause. However, the SC did not
allow this and again struck the revived clause as
unconstitutional in the 2014 case of Sameer
Overseas Placement Agency v. Cabiles [G.R. No.
170139, (August 05, 2014)]. There, the SC said that:
“when a law or a provision of law is null because it is
inconsistent with the Constitution, the nullity cannot
be cured by reincorporation or reenactment of the
same or a similar law or provision. A law or provision
of law that was already declared unconstitutional
remains as such unless circumstances have so
changed as to warrant a reverse conclusion.” Hence,
the case of Serrano holds as binding precedent, even
after the passage of RA 10022.
5. Regulations of Recruitment
and Placement Activities
Note: No. 5 is not in the 2019 bar syllabus.
a. Local
License and Authority
License – is a document issued by the Department
of Labor and Employment (DOLE) authorizing a
person or entity to operate a private employment
agency, while an authority is a document issued by
the DOLE authorizing a person or association to
engage in recruitment and placement activities as a
private recruitment agency. [Art. 13(d) and (f); Sec. 3
(h)(g), DO 141-14]

4. Ban on Direct Hiring License Authority

Authorize an entity to Authorize an entity to
General Rule: No employer may hire a Filipino worker operate as a private operate as a private
for overseas employment except through the Boards employment agency recruitment entity
and entities authorized by the Secretary of Labor. When a license is given, Does not entitle a
[Art. 18, ] one is also authorized to private recruitment
collect fees entity to collect fees.
No employer shall directly hire an Overseas Filipino
Worker for overseas employment. [Sec. 123, 2016 Private employment agency (PEA) v. Private
Revised POEA Rules and Regulations] recruitment entity (PRE)

Exemptions: Private Private

a. Members of the diplomatic corps; Employment Recruitment
b. International organizations; Agency Entity
c. Heads of state and government officials with the Any person or Any person or
rank of at least deputy minister; entity engaged in association
d. Other employers as may be allowed by the recruitment and engaged in the
Secretary of Labor and Employment, such as: placement of recruitment and
i. Those provided in (a), (b) and (c) who bear a workers for a fee placement of
lesser rank, if endorsed by the POLO, or which is workers, locally
Head of Mission in the absence of the POLO; Definition
charged, directly or overseas,
ii. Professionals and skilled workers with duly or indirectly, from without
executed/authenticated contracts containing the workers or charging,
terms and conditions over and above the employers or both directly or
standards set by the POEA. The number of indirectly, any
professional and skilled Overseas Filipino fee
Workers hired for the first time by the Requirement License Authority
employer shall not exceed five (5). For the
purpose of determining the number, workers Non-transferability of license or authority
hired as a group shall be counted as one; OR No license or authority shall be used directly or
iii. Workers hired by a relative/family member indirectly by any person other than the one in whose
who is a permanent resident of the host favor it was issued or at any place other than that
country. [Sec. 124, 2016 Revised POEA Rules stated in the license or authority,
and Regulations] Nor may such license or authority be transferred,
conveyed, or assigned to any other person or entity.
[Art. 29, Sec. 15, DO 141-14] [Sec. 21, Revised POEA
Rules]

Page 17 of 220
U.P. LAW BOC LABOR STANDARDS
Any transfer of business address, appointment or
designation of any agent or representative including
the establishment of additional offices anywhere shall
be subject to the prior approval of the Department of
Labor. [Art. 29]
Citizenship requirement
The applicant must be a Filipino citizen for single
proprietorship. If the applicant is a partnership or
corporation, iseventy five percent (75%) of the
authorized capital stock must be owned and
controlled by Filipino citizens. [Sec. 4(a), DO 141-14]
Capitalization requirement
All applicants for authority to hire or renewal of
license to recruit are required to have such substantial
capitalization as determined by the Secretary of
Labor. [Art. 28]
The applicant for a license to operate a private
employment agency must have a minimum net worth
of P1,000,000.00 in case of single proprietorship and
a minimum paid up capital of P1,000,000.00 in case
of partnership and corporation. [Sec. 4(b), DO 141-
14]
b. Migrant
Entities disqualified from Engaging or
Participating in the Business of Recruitment and
Placement of Workers for Overseas Employment
1. Travel agencies and sales agencies of airline
companies, whether for profit or not. [Art. 26]
2. Officers or members of the Board of any
corporation or partners in a partnership engaged
in the business of a travel agency;
3. Corporations and partnerships, where any of its
officers, members of the board or partners is also
an officer, member of the board or partner of a
corporation or partnership engaged in the
business of a travel agency;
4. Individuals, partners, officers, or directors of an
insurance company who make, propose or
provide an insurance contract under the
compulsory insurance coverage for agency-hired
OFWs;
5. Sole proprietors, partners or officers and
members of the board with derogatory records,
such as, but not limited to the ff:
a. Those convicted or against whom probable
cause or prima facie finding of guilt is
determined by a competent authority for
illegal recruitment or for other related crimes
or offenses committed in the course of,
related to, or resulting from, illegal
Page 18 of 220
LABOR LAW
recruitment, or for crimes involving moral
turpitude;
b. Those agencies whose licenses have been
revoked for violation of RA 8042, PD 442,
RA 9208, and their IRRs;
c. Those agencies whose licenses have been
cancelled, or those who, pursuant to the
order of the Administrator, were included in
the list of persons with derogatory record for
violation of recruitment laws and regulations
6. Any official employee of the DOLE, POEA,
OWWA, DFA, DOJ, DOH, BI, IC, NLRC,
TESDA, CFO, NBI, PNP, Civil Aviation
Authority of the Philippines, international airport
authorities, and other government agencies
directly involved in the implementation of RA
8042, as amended, and/or any of his/her
relatives within the fourth civil degree of
consanguinity or affinity. [Part II, Rule I, Sec. 3,
2016 Revised POEA Rules and Regulations]
Non-transferability of license or authority
1. No license shall be used, directly or indirectly, by
any person other than the one in whose favor it
was issued, nor at any place other than that stated
in the license;
2. Nor may such license be transferred, conveyed or
assigned to any other person or entity. [Sec. 21,
Revised POEA Rules]
Enforceability of the license
Licensed agencies are prohibited from conducting any
recruitment activities of any form outside of the
address stated in the license, acknowledged branch or
extension office, without securing prior authority
from the POEA. [People v. Buli-e, G.R. No. 123146
(2003)]
Duration of Validity
A provisional license shall be valid for a period of 2
years (non-extendible) from the date of issuance.
During the validity of which, the lincensee shall not
deploy domestic workers.
Upon application, the provisional license may be
upgraded to a regular license that shall be valid from
4 years from the date of issuance of the provisional
license. The application for upgrading of the
provisional license shall be filed within three (3)
months before the expiration of the provisional
license. [2016 Revised POEA Rules and Regulations]
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Citizenship requirement activities of all agencies within the coverage of this

1. Only Filipino citizens; or
2. Corporations, partnerships or entities at least
seventy-five percent (75%) of the authorized and
voting capital stock of which is owned and
controlled by Filipino citizens shall be permitted
to participate in the recruitment and placement
of workers [Part II, Rule I, Sec. 2 (1), 2016
Revised POEA Rules and Regulations]
Capitalization requirement
Based on the 2016 Revised POEA Rules, the
following are the substantial capital requirements:
1. Sole proprietorships or partnerships with
minimum capitalization of P5,000,000.
2. Corporations with minimum paid-up capital
of P5,000,000.
6. Suspension or Cancellation
of License or Authority
The Secretary of Labor shall have the power to
suspend or cancel any license or authority to recruit
employees for overseas employment for:
a. violation of rules and regulations issued by the
Department of Labor, the Overseas
Employment Development Board, and the
National Seamen Board
b. violation of the provisions of this and other
applicable laws, General Orders and Letters of
Instructions. [Art. 35]
Acts prohibited under Art. 34 are grounds for
suspension or cancellation of license. Note that these
acts likewise constitute illegal recruitment under RA
8042 as amended by RA 10022.
Who can suspend or cancel the license?
1. DOLE Secretary
2. POEA Administrator
The 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. [People v. Diaz, G.R.
112175 (1996)]
Title and is hereby authorized to issue orders and
promulgate rules and regulations to carry out the
objectives and implement the provisions of this Title
(Recruitment and Placement of Workers).
Visitorial powers [Art. 37]
The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the premises,
books of accounts and records of any person or entity
covered by this Title, require it to submit reports
regularly on prescribed forms, and act on violations
of any provisions of this Title.
Note: In the old case of Salazar v. Achacoso [G.R. No.
81510 (1990)], it was declared that Art. 38 of the is
unconstitutional and that the Secretary of Labor and
Employment cannot issue a warrant of arrest.
8. Prohibited Activities
Local
The Regional Director concerned, or his/her duly
authorized representatives or any aggrieved person,
may initiate filing of appropriate criminal action with
the office of the prosecutor.
Where a complaint is filed with the Regional Office
and the same is proper for preliminary investigation,
it shall be endorsed to the office of the prosecutor
together with the supporting documents. [Sec. 50,
DO 141-14]
Migrant workers
In the filing of cases for illegal recruitment or any of
the prohibited acts under this Sec. 6 of RA 8042 (as
amended), the Secretary of Labor and Employment,
the POEA Administrator or their duly authorized
representatives, or any aggrieved person may initiate
the corresponding criminal action with the
appropriate office. For this purpose, the affidavits and
testimonies of operatives or personnel from the
Department of Labor and Employment, POEA and
other law enforcement agencies who witnessed the
acts constituting the offense shall be sufficient to
prosecute the accused. [Sec. 6, par. 6 of R.A. No.
8042, as amended]

7. Regulatory and Visitorial

Powers of the DOLE
Secretary
Regulatory & rule-making powers [Art. 36]
The Secretary of Labor shall have the power to
restrict and regulate the recruitment and placement

Page 19 of 220
U.P. LAW BOC LABOR STANDARDS
B. Employment of Non-
Resident Aliens
Sec. 12, Art. XII, Constitution. The State shall
promote the preferential use of Filipino labor,
domestic materials and locally produced goods, and
adopt measures that help make them competitive.
Art. 12, Labor Code. Statement of objectives. –
It is the policy of the State:
xxx
e. To regulate the employment of aliens,
including the establishment of a registration
and/or work permit system;
1. Coverage
Art. 40, Labor Code. Employment permit of
non-resident aliens. – Any alien seeking
admission to the Philippines for employment
purposes and any domestic or foreign employer
who desires to engage an alien for employment in
the Philippines shall obtain an employment permit
from the Department of Labor.
The employment permit may be issued to a non-
resident alien or to the applicant employer after a
determination of the non-availability of a person in
the Philippines who is competent, able and willing
at the time of application to perform the services
for which the alien is desired.
For an enterprise registered in preferred areas of
investments, said employment permit may be
issued upon recommendation of the government
agency charged with the supervision of said
registered enterprise.
Sec. 1, D.O. No. 146-15. Coverage. All foreign
nationals who intend to engage in gainful
employment in the Philippines shall apply for Alien
Employment Permit.
As used in this Rule, gainful employment shall refer
to a state or condition that creates an employer-
employee relationship between the Philippine
based company and the foreign national where the
former has the power to hire or dismiss the foreign
national from employment, pays the salaries or
wages thereof and has authority to control the
performance or conduct of the tasks and duties.
Page 20 of 220
LABOR LAW
Sec. 2, D.O. No. 146-15. Exemptions:
a. All members of the diplomatic service and
foreign government officials accredited by and
with reciprocity arrangement with the
Philippine government.
b. Officers and staff of international
organizations of which the Philippine
government is a member, and their legitimate
spouses desiring to work in the Philippines.
c. All foreign nationals granted exemption by
law.
d. Owners and representatives of foreign
principals whose companies are accredited by
the Philippine Overseas Employment
Administration (POEA), who come to the
Philippines for a limited period and solely for
the purpose of interviewing Filipino applicants
for employment abroad.
e. Foreign national who come to the Philippines
to teach, present and/or conduct research
studies in universities and colleges as visiting,
exchange or adjunct professors under formal
agreements between the universities or
colleges in the Philippines and foreign
universities or colleges; or between the
Philippine government and foreign
government: provided that the exemption is on
a reciprocal basis; and
f. Permanent resident foreign nationals,
probationary or temporary resident visa
holders under Sec. 13 of the Philippine
Immigration Act of 1940
Sec. 3, D.O. No. 146-15. Exclusions. The
following categories of foreign nationals are
excluded from securing an employment permit:
a. Members of the governing board with voting
rights only and do not intervene in the
management of the corporation or in the day
to day operation of the enterprise
b. Corporate officers as provided under the
Corporation Code, Articles of Incorporation,
and By-Laws of the Corporation such as
President, Secretary and Treasurer
c. Those providing consultancy services who do
not have employers in the Philippines
Intra corporate transferee who is a manager,
executive or specialist as defined below in
accordance with Trade Agreements and an
employee of the foreign service supplier for at least
1 year prior to deployment to a branch, subsidiary,
affiliate, or representative office in the Philippines.
1. an Executive: a natural person within the
organization who primarily directs the
U.P. LAW BOC LABOR STANDARDS
management of the organization and
exercises wide latitude in decision making
and receives only general supervision or
direction from higher level executives, the
board of directors, or stockholders of the
business; an executive would not directly
perform tasks related to the actual
provision of the service or services of the
organization;
2. a Manager: a natural person w/in the
organisation who primarily directs the
organisation/department/subdivision
and exercises supervisory and control
functions over other supervisory,
managerial or professional staff; does not
include first line supervisors unless
employees supervised are professionals;
does not include employees who
primarily perform tasks necessary for the
provision of the service; or
3. a Specialist: a natural person within the
organisation who possesses knowledge at
an advanced level of expertise essential to
the establishment/provision of the
service and/or possesses proprietary
knowledge of the organisation’s service,
research equipment, techniques or
management; may include, but is not
limited to, members of a licensed
profession.
d. Contractual service supplier who is a manager,
executive, or specialist and an employee of a
foreign service supplier which has no
commercial presence in the Philippines
1. Who enters the Philippines temporarily
to supply a service pursuant to a contract
between his/her employer and a service
consumer in the Philippines
2. Must possess the appropriate
educational and professional
qualifications;
Must be employed by the foreign service supplier
for at least one year prior to the supply of service
in the Philippines.
Art. 40 of the Labor Code which requires
employment permit refers to non-resident aliens.
Resident aliens do not fall within the ambit of the
provision [Almodiel v. NRLC, 223 SCRA 341 (1993)]
An alien cannot file a labor complaint without having
obtained an employment permit. If such complaint is
filed, it shall be dismissed. [Andrew James McBurnie v.
Eulalio Ganzon, 707 SCRA 646 (2013)]
Page 21 of 220
LABOR LAW
2. Conditions for Grant of
Permit
Procedure in the Processing of Applications for
AEP
a. All applications for AEP shall be filed and
processed at the DOLE Regional Office or
Field Office having jurisdiction over the
intended place of work. A duly accomplished
application form with the ff. complete
documentary requirements must be submitted.
i. Photocopy of passport with visa, or Cert
of Recognition for Refugees or Stateless
Persons
ii. Original copy of notarized appointment
or contract of employment enumerating
the duties and responsibilities, annual
salary, and other benefits of the foreign
national
iii. Photocopy of Mayor’s Permit to operate
business, in case of locators in economic
zones, certification from the PEZA or
the Ecozone Authority that the
company is located and operating within
the ecozone, while in case of a
construction company, photocopy of
license from PCAB or D.O. No. 18-A
Registration should be submitted in lieu
of Mayor’s Permit; and
iv. Copy of employer’s understudy training
program to be conducted by the foreign
national to transfer knowledge and/or
skills to the Filipino worker
b. In case of foreign nationals to be assigned in
related companies, applications may be filed in
the Regional Office or Field Office having
jurisdiction over any of the applicant’s intended
places of work.
c. Additional position of the foreign national in the
same company or subsequent assignment in
related companies during the validity or renewal
of the AEP will be subject for publication
requirement. A change of position or employer
shall require an application for new AEP.
d. At any given time only one AEP shall be issued
to a foreign national. A foreign national may be
issued one AEP only at any given time. [Sec.
4 D.O. No. 146-15]
Fees
Upon filing of application, the applicant shall pay a
fee of P9,000 for an AEP with a validity of one year.
In case the period of employment is more than one
year, an additional P4,000 shall be charged for every
additional year or fraction thereof. In case of renewal,
U.P. LAW BOC LABOR STANDARDS
the applicant shall pay a permit fee of P4,000 for each
year of validity or fraction thereof.
A courier fee of P200 shall be charged to the foreign
national upon the implementation of the AEP online
application system.
Loss of AEP or change of information or entries in
the AEP shall be subject to payment of P1,500 for
AEP replacement. In case of loss, the request for
replacement shall be supported by a duly notarized
affidavit of loss.
All fees covered by official receipt issued by the
Regional Office are nonrefundable. [Sec. 5, D.O. No.
146-15]
Labor Market Test; Objections
The DOLE Regional Office shall publish in a
newspaper of general circulation all applications for
new AEP, change or additional position in the same
company or subsequent assignment in related
companies within 2 working days from receipt of
application.
The same shall be published in the DOLE website
and posted in the PESO, such publication and posting
shall be for a period of 30 days and shall contain the
name, position, employer and address, a brief
description of the functions to be performed by the
foreign national, qualifications, monthly salary range
and other benefits, if there are any.
It shall also indicate in the same notice of publication
that any person in the Philippines who is competent,
able and willing at any the time of the application to
perform the services for which the foreign national is
desired may file an objection at the DOLE Regional
Office.
Any objection or information against the employment
of the foreign national relative to labor market test
must be filed with the Regional Office within 30 days
after publication.
The DOLE Regional Office shall refer to the DOLE
Skills Registry System, the PRC Registry of
professionals, and the TESDA registry of certified
workers to establish availability or non availability of
able and qualified Filipino worker.
Information or criminal offense and grave
misconduct in dealing with or ill treatment of workers
may be filed with the Regional Offices any time. [Sec.
6, D.O. No. 146-15]
Page 22 of 220
LABOR LAW
Processing; Issuance
Applications for new AEP shall be processed and an
AEP shall be issued within 24 hours after publication
and payment of required fees and fines, if there is any.
Applications for renewal of AEP shall be processed
within 24 hours after receipt. [Sec. 7, D.O. No. 146-
15]
3. Validity of AEP and Renewal
The AEP shall be valid for the position and the
company for which it was issued for a period of 1
year, unless the employment contract, or other modes
of engagement provides otherwise, which in no case
shall exceed 3 years. [Sec. 9, D.O. No. 146-15]
An application for renewal of AEP shall be filed not
earlier than 60 days before its expiration.
In the case of officers whose appointment or election
takes place before the expiration of AEP, the
application must be filed not later than 15 working
days after appointment, or before its expiration,
whichever comes later.
In case the appointment or election will take place
after the expiration of the AEP, the application for
renewal must be filed before the expiration of the
AEP which can be renewed for 1 year.
Within 15 working days after the date of
appointment or election, the foreign national shall
submit to the issuing Regional Office the Board
Secretary’s Certification.
The Regional Director shall revoke the AEP after 1
month from its issuance, if no Certification is filed.
[Sec. 10, D.O. No. 146-15]
4. Denial of Application
Grounds:
a. Misrepresentation of facts in the application;
(includes fraudulent misrepresentation that is a
false statement that will have a negative effect in
the evaluation of the application was made was
made knowingly, or without belief in its truth, or
recklessly whether it is true or false.)
b. Submission of falsified documents;
c. The foreign national has been convicted of a
criminal offense or a fugitive from justice in the
country or abroad;
d. Grave misconduct in dealing with or ill treatment
of workers; or
e. Availability of a Filipino who is competent, able
and willing to do the job intended for the foreign
national [Sec. 11, D.O. No. 146-15]
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Officer who Denies AEP: Regional Director

Denial of application for AEP shall cause the
forfeiture of the fees paid by the applicant.

5. Revocation; Cancellation
The Regional Director may, motu proprio or upon
petition, cancel or revoke an AEP after due process,
based on the following grounds:
a. Non-compliance with any of the requirements or
conditions for which the AEP was issued
b. Misrepresentation of facts in the application;
Misrepresentation of facts includes fraudulent
misrepresentation that is a false statement that
will have a negative effect in the evaluation of the
application was made knowingly, or without
belief in its truth, or recklessly whether it is
true or false.
c. Submission of falsified or tampered documents
d. Meritorious objection or information against the
employment of the foreign national
e. Foreign national has been convicted of a criminal
offense or a fugitive from justice
f. Employer terminated the employment of
foreign national
g. Grave misconduct in dealing with or ill treatment
of workers
h. Disapproval of the application for an
Authority to Employ Alien by the Department
of Justice or Special Temporary Permit by the
Professional Regulation Commission, if
applicable. [Sec. 12, D.O. No. 146-15]

Furthermore, a foreign national whose AEP has been

denied or cancelled is disqualified to re-apply within a
period of 10 years in case the ground for denial or
cancellation is:
e. Conviction of criminal offense or fugitive from
justice in the country or abroad; or
f. Grave misconduct in dealing with or ill treatment
of workers [Sec. 13, D.O. No. 146-15]

Page 23 of 220
U.P. LAW BOC LABOR STANDARDS
III. LABOR
STANDARDS
Labor Standards refers to the minimum
requirements prescribed by existing laws, rules and
regulations relating to wages, hours of work, cost-of-
living allowance and other monetary and welfare
benefits, including occupational, safety and health
standards. [Maternity Children’s Hospital v. Secretary of
Labor, G.R. 78909 (1989)]
Note: All Articles from hereon refer to the Labor
Code, unless otherwise indicated.
A. Conditions of
Employment
1. Coverage [Art. 82]
General rule: Shall apply to employees in all
establishments and undertakings whether for profit or
not. [Art. 82]
Exceptions (i.e. those NOT covered by Art. 82):
a. Government employees [Art. 82; Art. 76]
(exception to the exception: Employees of GOCCs
created under the Corporation Code)
b. Managerial Employees [Art. 82]
c. Members of the managerial staff [Art. 82]
d. Field Personnel [Art. 82]
e. Members of the family of the employer who are
dependent on him for support [Art. 82];
f. Domestic workers or kasambahay [Art. 141, RA
10361] (exception to the exception: Assignment in a
Commercial, Industrial or Agricultural
Enterprise)
g. Persons in the personal service of another
h. Workers who are paid by result as determined by
DOLE regulation [Art. 82]
a. Government Employees
The terms and conditions of employment of all
government employees, including employees of
GOCCs, are governed by the Civil Service rules and
regulations, not by the Labor Code [Art. 291].
However, not all GOCCs are governed by the Civil
Service Rules; only those created by original charter
are governed by the Civil Service rules:
“Following Sec. 2(i) Art. IX-B of 1987 Phil.
Constitution, the test in determining whether a
Page 24 of 220
LABOR LAW
government owned corporation is subject to the
Labor Code or the Civil Service law is finding out
what created it – if its created by a special charter,
then, Civil Service Law applies, if it is created by
the General Corporation Law, then the Labor
Code applies.” [PNOC Energy Development Corp. v.
NLRC, G.R. No. 79182 (1991)]
b. Managerial Employees
Two definitions of “managerial employees” in
the Labor Code:
Art. 82. Coverage. – As used herein, “managerial
employees” refer to those whose primary duty
consists of the management of the establishment in
which they are employed or of a department or
subdivision thereof and to other officers or
members of the managerial staff.
Art. 219. Definitions. – (m) One who is vested
with the powers or prerogatives to lay down and
execute management policies and/or to hire,
transfer, suspend, lay off, recall, discharge, assign or
discipline employees. Supervisory employees are
those who, in the interest of the employer,
effectively recommend such managerial actions if
the exercise of such authority is not merely
routinary or clerical in nature but requires the use
of independent judgment. All employees not falling
within any of the above definitions are considered
rank and file employees for purposes of this Book.
Characteristics of managerial employees [Sec.
2(b), Rule I, Book III, IRR]
Managerial employees are exempted from the
coverage of Book III Articles 83 through 96 if they
meet all of the following conditions:
1. Their primary duty consists of the management
of the establishment in which they are
employed or of a department or subdivision
thereof.
2. They customarily and regularly direct the work of two
or more employees therein.
3. They have the authority to hire or fire employees of lower
rank; or their suggestions and recommendations as to
hiring and firing and as to the promotion or any
other change of status of other employees, are
given particular weight.
Managerial employees and managerial staff are
determined by their job description and not their job
title. [Peñarada v. Baganga Plywood Corp., G.R. No.
159577 (2006)]
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Members of the managerial staff (supervisory
employees)
Art. 82. Coverage. – As used herein, “managerial
employees” refer to those whose primary duty
4.
consists of the management of the establishment in
which they are employed or of a department or
subdivision thereof and to other officers or
members of the managerial staff.
(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;
Who do not devote more than 20% of their hours
worked in a work week to activities which are not
directly and closely related to the performance of
the work described in paragraphs (1), (2) and (3)
above.

Art. 219. Definitions. – (m) One who is vested Effective recommendatory power
with the powers or prerogatives to lay down and Supervisory employees are those who, in the interest
execute management policies and/or to hire, of the employer, effectively recommend such
transfer, suspend, lay off, recall, discharge, assign or managerial actions and the exercise of such authority
discipline employees. Supervisory employees are is not merely routinary or clerical in nature but
those who, in the interest of the employer, requires the use of independent judgment [Art.
effectively recommend such managerial actions if 219(m)].
the exercise of such authority is not merely
routinary or clerical in nature but requires the use c. Field Personnel
of independent judgment. All employees not falling
within any of the above definitions are considered Non-agricultural employees:
rank and file employees for purposes of this Book. 1. Who regularly perform their duties away from the
principal or place of business or branch office of
the employer; and
The definition in Art. 82 covers more people than that
2. Whose actual hours of work in the field cannot
in Art. 219(m) as Art. 82 also includes managerial staff
be determined with reasonable certainty. [Art. 82]
(supervisory employees). In effect, managerial
employees in Art. 82 includes supervisors, but Art.
Legal Test: Control & Supervision of employer
219(m) does not for purposes of the right to self-
Although the fishermen perform non-agricultural
organization.
work away from petitioner’s business offices, the fact
remains that throughout the duration of their work
It follows that under Book V, Omnibus Rules
they are under the effective control and
Implementing the Labor Code [hereinafter, IRR]
supervision of petitioner through the vessel’s patron
supervisors are allowed to form, join or assist a labor
or master. Hence, the fishermen are not “field
union. Supervisors are not, however, entitled to the
personnel”. [Mercidar Fishing Corporation v. NLRC,
benefits under Book III Articles 83 through 96, being
G.R. No. 112574 (1998)]
part of the exemption of managerial employees as
defined in Art. 82. [Azucena, The Labor Code with
In order to determine whether an employee is a field
Comments and Cases]
employee, it is also necessary to ascertain if actual
hours of work in the field can be determined with
Managerial Staff is included as they are
reasonable certainty by the employer. In so doing, an
considered managerial employees as well [Sec.
inquiry must be made as to whether or not the
2(c), Rule I, Book III, IRR]
employee’s time and performance are constantly
Officers or members of a managerial staff are also
supervised by the employer. [Far East Agricultural
exempted if they perform the following duties and
Supply v. Lebatique, G.R. No. 162813 (2007)]
responsibilities:
1. Their primary duty consists of the performance
of work directly related to management policies d. Dependent Family Members
of their employer;
2. Customarily and regularly exercise discretion and Workers who are family members of the employer,
independent judgment; and who are dependent on him for their support, are
3. (a) Regularly and directly assist a proprietor or a outside the coverage of this Title on working
managerial employee whose primary duty conditions and rest periods [Art. 82].
consists of the management of the establishment
in which he is employed or subdivision thereof;
OR

Page 25 of 220
U.P. LAW BOC LABOR STANDARDS
e. Domestic Helpers (Workers)
Sec. 4(d), Art. 1, Kasambahay Law (RA 10361)
Domestic 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.
The term shall not include children who are under
foster family arrangement, and are provided access
to education and given an allowance incidental to
education, i.e. "baon", transportation, school
projects and school activities.
"Domestic work" refers to work performed in or for
a household. [Sec. 3(d), IRR of RA10361]
"Household" refers to the immediate members of
the family or the occupants of the house who are
directly and regularly provided services by the
Kasambahay.
[Sec. 3(g), IRR of RA10361]
Note: According the Sec. 2 of the IRR, RA10361 does
not cover service providers, family drivers, children
under foster family arrangement, and any other
person who performs work occasionally or
sporadically and not on an occupational basis.
Exclusivity of function required
Note that the definition contemplates a domestic
helper who is employed in the employer’s home to
minister exclusively to the personal comfort and
enjoyment of the employer’s family. [Azucena]
Thus, it has been held that the following personnel
are not domestic employees:
1. The definition [of domestic worker] cannot be
interpreted to include house-help or laundry-
women working in staffhouses of a company [...].
By the same token, it cannot be considered to
extend to then driver, houseboy, or gardener
exclusively working in the company, the
staffhouses and its premises. [Apex Mining
Company v. NLRC, G.R. No. 94951 (1991)]
2. While complainant may have started her employ
doing chores for the employer's family, she also
fulfilled tasks connected with the employer's
business (bakery) such as cooking, filling orders,
baking orders, and other clerical work, all of
which are usually necessary and desirable in the
Page 26 of 220
LABOR LAW
usual trade or business of the the employer.
Inescapably, complainant is a regular employee
and thus, entitled to security of tenure. [Fernando
Co v. Vargas, G.R. No. 195167 (2011)]
f. Persons in Personal Service of
Another
Sec. 2 (d), Rule I, Book III, IRR. Exemption. –
Domestic servants and persons in the personal
service of another if they perform such services in
the employer’s home which are usually necessary or
desirable for the maintenance and enjoyment
thereof or minister to the personal comfort
convenience or safety of the employer as well as the
members of his employer’s household.
g. Workers Paid by Result (piece-
workers)
Sec. 2(e), Rule I, Book III, IRR. Exemption –
Workers
who are paid by results, including those who are
paid on piece work, “takay,” “pakiao” or task basis,
and other nontime work if their output rates are in
accordance with the standards prescribed under
Sec. 8, Rule VII, Book Three of these regulations,
or where such rates have been fixed by the
Secretary of Labor and Employment in accordance
with the aforesaid Section.
Workers under piece-rate employment have no fixed
salaries and their compensation is computed on the
basis of accomplished tasks. That their work output
might have been affected by the change in their
specific work assignments does not necessarily imply
that any resulting reduction in pay is tantamount to
constructive dismissal. It is the prerogative of the
management to change their assignments or to
transfer them. [Best Wear Garments v. De Lemos and
Ocubillo, G.R. No. 191281 (2012)]
Workers paid by results may be grouped into two: 1)
those whose time and performance is supervised by
the employer and 2) those whose time and
performance is unsupervised by the employer
[Azucena, p. 289].
Must be unsupervised to be excluded
Field personnel and other employees, including those
who are engaged on task basis, purely commission
basis, or those who are paid a fixed amount for
performing work irrespective of the time consumed
U.P. LAW BOC LABOR STANDARDS LABOR LAW

in the performance thereof are excluded from 2. Hours of Work

receiving benefits such as nightime pay, holiday pay,
service incentive leave, inter alia, provided their time
Principles in Determining Hours Worked
and performance is unsupervised by the employer.
[Labor Congress of the Philippines v. NLRC, [G.R. No.
123938 (1998)] Art. 84. Compensable Hours of Work – Hours
worked shall include:
Rule on overtime pay 1. All time during which an employee is required
Workers who are paid by results, if their output rates are to be on duty or to be at a prescribed
in accordance with the standards prescribed under Sec. workplace; AND
8, Rule VII, Book III, of those regulations, or where 2. All time during which an employee is suffered
such rates have been fixed by the Secretary of Labor or permitted to work.
in accordance with the aforesaid section, are not entitled
to receive overtime pay. [Sec. 2(e), Rule I; Labor Congress
General principles in determining if time is
of the Philippines v. NLRC, [G.R. No. 123938 (1998)]
considered as hours worked
All hours are hours worked which the employee is
Summary of benefits payable
required to give his employer, regardless of whether
Unsuper- Super- or not such hours are spent in productive labor or
Benefit
vised vised involve physical or mental exertion.
a. An employee need not leave the premises of
Applicable statutory Yes the work place in order that his rest period
minimum wage [Art. shall not be counted, it being enough that he
101, LC] stops working, may rest completely and may
Night differential [Sec. No Yes leave his work place to go elsewhere, whether
1(e), Rule II] within or outside the premises of his work place.
b. If the work performed was necessary, or it
Service incentive leave No Yes benefited the employer, or the employee could
[Sec. 1(d), Rule V] not abandon his work at the end of his normal
working hours because he had no replacement,
Holiday pay [Sec. 8(b), Yes all time spent for such work shall be considered
Rule IV] as hours worked, if the work was with the
knowledge of his employer or immediate
13th month pay Yes, provided the worker
supervisor.
[Revised Guidelines has rendered at least 1
c. The time during which an employee is inactive
on the month of service during
by reason of interruptions in his work beyond
Implementation of the the calendar year
his control shall be considered working time
13th Month Pay Law
either:
(1987)]
1. If the imminence of the resumption of work
Other statutory No Yes requires the employee’s presence at the place
benefits [Labor Congress of work, or
of the Philippines v. 2. If the interval is too brief to be utilized
NLRC, [G.R. No. effectively and gainfully in the employee’s
123938 (1998)] own interest. [Sec. 4, Rule I, Book III, IRR]

Not determinative of EER a. Normal Hours of Work

Payment by result is not determinative of employer-
employee relationship. It is a method of
compensation and does not define the essence of the
relation. It is a method of computing compensation,
not a basis for determining the existence or absence
of employer-employee relationship. [Tan v. Lagrama,
G.R. No. 111042 (1999)]
General Rule: 8-Hour Labor Law
Art. 83. The normal hours of work of any
employee shall not exceed eight (8) hours a day.
Note: Art. 83 of the Labor Code only set a maximum
of number of hours as "normal hours of work" but
did not prohibit work of less than eight hours [Legend
Hotel v. Realuyo, G.R. 153511 (2012)]

Page 27 of 220
U.P. LAW BOC LABOR STANDARDS
Exception to 8-Hour Law: Work Hours of Health
Personnel
Par. 2, Art. 83. Normal Hours of Work. –
Health personnel in:
1. Cities and municipalities with a population of
at least one million (1,000,000) OR
2. Hospitals and clinics with a bed capacity of at
least one hundred (100) shall hold regular
office hours for eight (8) hours a day, for five
(5) days a week, exclusive of time for meals,
except where the exigencies of the service
require that such personnel work for six (6)
days or forty-eight (48) hours, in which case,
they shall be entitled to an additional
compensation of at least thirty percent (30%)
of their regular wage for work on the sixth day.
For purposes of this Article, "health personnel"
shall include resident physicians, nurses,
nutritionists, dietitians, pharmacists, social workers,
laboratory technicians, paramedical technicians,
psychologists, midwives, attendants and all other
hospital or clinic personnel.
Medical secretaries are also considered clinic
personnel. [Azucena]
Sec. 4(b), Rule I, Book III, IRR. Principles in
Determining Hours Worked. – An employee
need not leave the premises of the work place in
order that his rest period shall not be counted it
being enough that he stops working may rest
completely and may leave his work place to go
elsewhere whether within or outside the premises
of his work place.
Rest period – short duration or “coffee break”
1. Rest periods of short duration during working
hours shall be counted as hours worked. [par. 2,
Art. 84, par. 2]
2. Rest periods or coffee breaks running from five
(5) to twenty (20) minutes shall be considered
as compensable working time. [par. 2, Sec. 7,
Rule I, Book III, IRR]
On call
Compensable work time, if employee is:
1. Required to remain on call in the employer’s
premises or so close thereto
2. That he cannot use the time effectively and
gainfully for his own purpose shall be considered
as working while on call.
Page 28 of 220
LABOR LAW
Sec. 5 (b), Rule I, Book III, IRR. Waiting time.
– xxx An employee who is not required to leave
word at his home or with company officials where
he may be reached is NOT working while on call.
Inactive due to work interruptions
The time during which an employee is inactive by
reason of interruptions in his work beyond his
control shall be considered working time either:
1. If the imminence of the resumption of work
requires the employee's presence at the place of
work OR
2. If the interval is too brief to be utilized effectively
and gainfully in the employee's own interest. [Sec.
4 (d), Rule I, Book III, IRR]
Necessary Work After Normal Hours
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 the time spent for such
work shall be considered as hours worked if the work
was with the knowledge of his employer or
immediate supervisor. [Sec. 4(c), Rule I, Book III,
IRR]
Lectures, meetings, trainings
Attendance at lectures, meetings, training programs,
and other similar activities shall not be counted as
working time if ALL of the following conditions are
met:
1. Attendance is outside of the employee’s regular
working hours;
2. Attendance is in fact voluntary; and
3. The employee does not perform any productive
work during such attendance. [Sec. 6, Rule I,
Book III, IRR]
Notes:
1. Attendance in lectures, meetings, and training
periods sanctioned or required by the employer
are considered hours worked.
2. Attendance in CBA negotiations or grievance
meeting is compensable hours worked provided
that such is stipulated in the CBA. [Department
of Labor Manual, Sec. 4323.03]
3. Attendance in hearings in cases filed by the
employee is NOT compensable hours worked.
4. Participation in strikes is NOT compensable
working time.
Attendance in lectures, meetings, and training periods
must necessarily beneficial to the employer. [Sec. 6(c),
Rule I, IRR]
U.P. LAW BOC LABOR STANDARDS
Idle time
The idle time that an employee may spend for resting
and dining which he may leave the spot or place of
work though not the premises of his employer, is not
counted as working time only where the work is
broken or is not continuous. [National Development Co.
v. CIR, G.R. No. L-15422 (1962)]
A laborer need not leave the premises of the factory,
shop or boat in order that his period of rest shall not
be counted, it being enough that he "cease to work",
may rest completely and leave or may leave at his will
the spot where he actually stays while working, to go
somewhere else, whether within or outside the
premises of said factory, shop or boat. If these
requisites are complied with, the period of such
rest shall not be counted. [Luzon Stevedoring Co. v.
Luzon Marine Department Union, G.R. No. L-9265
(1957)]
Travel time [Department of Labor Manual]
1. Travel from home to work – An employee who
travels from home before his regular workday
and returns to his home at the end of the workday
is engaged in ordinary home-to-work travel
which is NOT considered hours worked,
EXCEPT:
a. When called to travel during emergency;
b. When travel is done through a conveyance
furnished by the employer;
c. Travel is done under vexing and dangerous
circumstances;
d. Travel is done under the supervision and
control of the employer.
2. Travel that is all in the day’s work – Time
spent by an employee in travel from jobsite to
jobsite during the workday, must be counted as hours
worked. Where an employee is required to report
at a meeting place to receive instructions or to
perform other work there, the travel from the
designated place to the workplace is part of the
day’s work.
3. Travel away from home - Travel that keeps an
employee away from home overnight is travel
away from home. Travel away from home is
worktime when it cuts across the employee’s
workday. The time is hours worked not only on
regular working hours but also during the
corresponding hours on non-working days.
Semestral Break of Private School Teachers
Regular full-time teachers are entitled to salary during
semestral breaks. These semestral breaks are in the
nature of work interruptions beyond the employees’
control. As such, these breaks cannot be considered
as absences within the meaning of the law for which
deductions may be made from monthly allowances.
Page 29 of 220
LABOR LAW
[University of the Pangasinan Faculty Union v. University of
Pangasinan, G.R. No. L-63122 (1984)]
Work Hours of Seafarers
Citing the 1957 ruling of Luzon Stevedoring Co., Inc. v.
Luzon Marine Department Union, et al [G.R. 9265(1957)],
the SC reiterated in the more recent case of Cagampan,
et al. v. NLRC [G.R. 85122-24 (March 22, 1991)], that
“seamen are required to stay on board of their vessels
by the very nature of their duties, and it is for this
reason that, in addition to their 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 or not sailors are entitled to
overtime pay is not, therefore, whether they are on
board and cannot leave ship beyond the regular eight
working number of hours, but whether they actually
rendered service in excess of said number of hours.”
Proof of Hours worked
Entitlement to overtime pay must first be established
by proof that said overtime work was actually
performed, before an employee may avail of said
benefit. [Lagatic v. NLRC, G.R. 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, he bears the
burden of proving his allegation with clear and
satisfactory evidence. [Prangan v. NLRC, et. al., G.R.
No. 126529, (1998)]
FLEXIBLE WORK ARRANGEMENTS [DOLE
Advisory No. 02, Series of 2004]
These are alternative arrangements or schedules other
than the standard work hours, workdays, and
workweek. Their effectivity and implementation shall
be temporary in nature.
Prior to implementation, the employer shall notify the
Department through the Regional Office which has
jurisdiction over the workplace, of the adoption of
any of the flexible work arrangements.
Under the following work arrangements, the
employers and employees are encouraged to explore
alternative schemes under any agreement and
company policy or practice to cushion and mitigate
the effect of the loss of income of the employees.
Reduction of Workdays
The normal workdays per week are reduced but this
arrangement should not last for more than 6 months.
U.P. LAW BOC LABOR STANDARDS
Rotation of Workers
The employees are rotated or alternately provided
work within the workweek
Forced Leave
Employees are required to go on leave for several days
or weeks utilizing their leave credits of there are any.
Broken-time Schedule
The works schedule is not continuous but the work
hours within the day or week remain.
Flexi-holidays
The employees agree to avail the holidays at some
other days provided there is no diminution of existing
benefits as a result of such arrangement.
COMPRESSED WORK WEEK
Compressed Work Week (CWW) [DOLE
Advisory No. 02, Series of 2004]
A CWW refers to one where the normal workweek is
reduced to less than 6 days but the total number of
work hours of 48 hours per week shall remain. Under
the CWW scheme, the normal workday goes beyond
eight hours but not exceed 12 hours, without the
corresponding overtime premium. [DOLE Advisory
No. 04, Series of 2010].
In excess of such, the employer is obliged to pay the
worker the overtime premium.
Conditions for CWW
1. The CWW scheme is undertaken as a result of an
express and voluntary agreement of majority
of the covered employees or their duly authorized
representatives. This agreement may be
expressed through collective bargaining or other
legitimate workplace mechanisms of
participation such as labor management councils,
employee assemblies or referenda.
2. In firms using substances, chemicals and
processes or operating under conditions where
there are airborne contaminants, human
carcinogens or noise prolonged exposure to
which may pose hazards to employees’ health and
safety, there must be a certification from an
accredited health and safety organization or
practitioner from the firm’s safety committee
that work beyond eight hours is within threshold
limits or tolerable levels of exposure, as set in the
OSHS.
3. The employer shall notify DOLE, through the
Regional Office having jurisdiction over the
workplace, of the adoption of the CWW scheme.
The notice shall be in DOLE CWW Report
Page 30 of 220
LABOR LAW
Form attached to this Advisory. [DOLE
Advisory No. 02-04]
Effects of CWW
1. Unless there is a more favorable practice existing
in the firm, work beyond eight hours will not
be compensable by overtime premium
provided the total number of hours worked per
day shall not exceed twelve (12) hours. In any
case, any work performed beyond 12 hours a day
or 48 hours a week shall be subject to overtime
premium.
2. Consistent with Art. 85 of the , employees under
a CWW scheme are entitled to meal periods of
not less than 60 minutes. There shall be no
impairment of the right of the employees to rest
days as well as to holiday pay, rest day pay or
leaves in accordance with law or applicable
collective bargaining agreement or company
practice.
3. 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 a diminution of benefits.
Rationale: Although the right to overtime pay cannot
be waived as per Cruz v. Yee Sing [G.R. No. L-
12046(1959)], D.O. No. 21 sanctions the waiver of
overtime pay in consideration of the benefits that the
employees will derive from the adoption of a
compressed workweek scheme, thus:
The compressed workweek scheme was originally
conceived for establishments wishing to save on
energy costs, promote greater work efficiency and
lower the rate of employee absenteeism, among
others. Workers favor the scheme considering that it
would mean savings on the increasing cost of
transportation fares for at least one (1) day a week;
savings on meal and snack expenses; longer
weekends, or an additional 52 off-days a year, that can
be devoted to rest, leisure, family responsibilities,
studies and other personal matters, and that it will
spare them for at least another day in a week from
certain inconveniences that are the normal incidents
of employment, such as commuting to and from the
workplace, travel time spent, exposure to dust and
motor vehicle fumes, dressing up for work, etc. Thus,
under this scheme, the generally observed workweek
of six (6) days is shortened to five (5) days but
prolonging the working hours from Monday to Friday
without the employer being obliged for pay overtime
premium compensation for work performed in excess
of eight (8) hours on weekdays, in exchange for the
benefits above cited that will accrue to the employees.
[Bisig Manggagawa sa Tryco v. NLRC, et al. , G.R. No.
151309 (2008)]
U.P. LAW BOC LABOR STANDARDS
Other Flexible Work Arrangements [DOLE
Advisory No. 04, Series of 2010]
1. Gliding or Flexi-Time Schedule – one where
employees are required to complete the core
work-hours in the establishment but are free to
determine their arrival and departure time.
2. Flexi-Holidays Schedule – one where
employees agree to avail the holidays at some
other days provided there is no diminution of
existing benefits as a result of such arrangement.
Other alternative work arrangements may be had
under agreement, company policy, or practice in
accordance with existing laws and regulations
POWER INTERRUPTIONS/ BROWNOUTS
Work interruption due to brownouts
Brownouts of short duration, but not exceeding 20
minutes, shall be treated as hours worked, whether
used productively by the employees or not.
If they last more than 20 minutes, the time may not
be treated as hours worked if:
1. the employees can leave their workplace or go
elsewhere whether within or without the work
premises; OR
2. the employees can use the time effectively for
their own interest.
In this case, the employer may extend the working
hours beyond the regular schedule on that day to
compensate for the loss of productive man-hours
without being liable for overtime pay. [Policy
Instruction No. 36, May 22, 1978]
Note: 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 at the place of work or if the interval is too
brief to be utilized effectively and gainfully in the
employee’s own interest. [Sec. 4(d), Rule I, Book III,
IRR]
b. Meal periods
General Rule: Subject to such regulations as the
Secretary of Labor may prescribe, it shall be the duty
of every employer to give his employees not less than
sixty (60) minutes time-off for their regular meals
[Art. 85]
Page 31 of 220
LABOR LAW
Exceptions:
Employees may be given a meal period of not less
than twenty (20) minutes provided that such
shorter meal period is credited as compensable hours
worked of the employee:
1. Where the work is non-manual work in nature or
does not involve strenuous physical exertion;
2. Where the establishment regularly operates not
less than sixteen (16) hours a day;
3. In case of actual or impending emergencies or
there is urgent work to be performed on
machineries, equipment or installations to avoid
serious loss which the employer would otherwise
suffer; OR
4. Where the work is necessary to prevent serious
loss of perishable goods [par. 1, Sec. 1, Rule I,
Book III, IRR]
The eight-hour work period does not include the meal
break. Employees are not prohibited from going out
of the premises as long as they return to their posts
on time. Nowhere in the law may it be inferred that
employees must take their meals within the company
premises. [Philippine Airlines v. NLRC, G.R. No.
132805 (1999)]
SYNTHESIS OF THE RULES
General Rule: Meal periods are NOT compensable.
Exception:
It becomes compensable:
1. Where the lunch period or meal time is
predominantly spent for the employer’s benefit.
[Azucena citing 31 Am. Jur. 881; Duka, Labor
Laws and Social Legislation]
2. Meal periods of 1 hour are deemed compensable
when the employee is on continuous shift.
[National Development Co. v. CIR, G.R. No. L-
15422, (1962)]
3. Shortened meal period of less than 1 hour (say,
30 minutes) must be compensable. [Sec. 7, Rule
I, Book III, IRR]
Note: To shorten meal time to less than 20 minutes is
not allowed. If the so-called meal time is less than 20
minutes, it becomes only a REST PERIOD and is
considered working time.
Exception to the Exception: Shortened meal breaks upon
the employees’ request – NOT compensable.
The employees themselves may request that the meal
period be shortened so that they can leave work
earlier than the previously established schedule.
[Drilon: Letter to Kodak Philippines, Nov. 27, 1989;
Cilindro: BWC-WHSD, Opinion No. 197, s. 1998]
U.P. LAW BOC LABOR STANDARDS
Conditions for shortened meal breaks upon
employee’s request.
1. The employees voluntarily agree in writing to a
shortened meal period of 30 minutes and are
willing to waive the overtime pay for such
shortened meal period;
2. There will be no diminution whatsoever in the
salary and other fringe benefits of the employees
existing before the effectivity of the shortened
meal period;
3. The work of the employees does not involve
strenuous physical exertion and they are
provided with adequate “coffee breaks” in the
morning and afternoon.
4. The value of the benefits derived by the
employees from the proposed work arrangement
is 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 if ever they are permitted or
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. [BWC-
WHSD Opinion No. 197, s. 1998]
c. Night Shift Differential
Night shift differential [Art. 86]
The additional compensation of 10% of an
employee’s regular wage for each hour of work
performed between 10pm and 6am.
Illustration: If an employee has a regular wage of P100
for each hour of work performed between 10PM and
6AM, he/she shall be paid P110 per hour worked
during such time interval.
Sec. 1, Rule II, Book III, IRR. Coverage. This
Rule shall apply to all employees, except:
a. Those of the government and any of its
political subdivisions, including government-
owned and/or controlled corporations;
b. Those of retail and service establishments
regularly employing not more than five (5)
workers;
c. Domestic helpers and persons in the personal
service of another;
d. Managerial employees as defined in Book
Three of this Code;
e. Field personnel and other employees whose
time and performance is unsupervised by the
employer including those who are engaged on
Page 32 of 220
LABOR LAW
task or contract basis, purely commission
basis, or those who are paid a fixed amount
for performing work irrespective of the time
consumed in the performance thereof
Rest days (night-off)
Night shift employees are entitled to a weekly night-
off (usually Saturday evening) or a weekly rest period
of 24 hours beginning at the start of the night shift
[See also Art. 91].
Work on special days
Night shift employees are also entitled to the
premium pay on special days and holidays. These days
are reckoned as calendar days which start at midnight
and end at the following midnight. The premium pay
for the night shift also starts or ends at midnight.
However, the employment contract, company policy
or CBA may provide that in the case of night shift
workers, days—including special days and regular
holidays—shall begin on the night before a calendar
day. [Chan, Pre-Week Guidelines]
d. Overtime Work
Overtime compensation is additional pay for
service or work rendered or performed in excess of
eight hours a day by employees or laborers covered
by the Eight-hour Labor Law. [National Shipyard and
Steel Corp. v. CIR, G.R. No. L-17068 (1961)]
Rationale
There can be no other reason than that he is made to
work longer than what is commensurate with his
agreed compensation for the statutorily fixed or
voluntary agreed hours of labor he is supposed to do.
[PNB v. PEMA, G.R. No. L-30279 (1982)]
Overtime on ordinary working day
Art. 87. Work may be performed beyond eight (8)
hours a day provided that the employee is paid for
the overtime work, an additional compensation
equivalent to his regular wage plus at least twenty
five percent (25%) thereof.
Overtime work on holiday or rest day
Art. 87. Work performed beyond eight hours on a
holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at least
thirty percent (30%) thereof.
U.P. LAW BOC LABOR STANDARDS
Computation of additional compensation
Art. 90. For purposes of computing overtime and
other additional remuneration as required by this
Chapter (Hours of Work) the "regular wage" of an
employee shall include the cash wage only without
deduction on account of facilities provided by the
employer.
Base of Computation: Regular wage – means
regular base pay; it excludes money received in
different concepts such as Christmas bonus and other
fringe benefits. [Bisig ng Manggagawa ng Philippine
Refining Co. v. Philippine Refining Co., G.R. L-27761
(1981)]
BUT when the overtime work was performed on the
employee’s rest day or on special days or regular
holidays (Art. 93 and 94), the premium pay, must be
included in the computation of the overtime pay. [See:
p. 19 of Handbook on Workers’ Statutory Monetary
Benefits, issued by the Bureau of Working
Conditions, 2006]
Emergency overtime
Any employee may be required by the employer to
perform overtime work in any of the following cases:
1. When the country is at war or when any other
national or local emergency has been declared by
the National Assembly or the Chief Executive;
2. When it is necessary to prevent loss of life or
property or in case of imminent danger to public
safety due to an actual or impending emergency
in the locality caused by serious accidents, fire,
flood, typhoon, earthquake, epidemic, or other
disaster or calamity;
3. When there is urgent work to be performed on
machines, installations, or equipment, in order to
avoid serious loss or damage to the employer or
some other cause of similar nature;
4. When the work is necessary to prevent loss or
damage to perishable goods; and
5. Where the completion or continuation of the
work started before the eighth hour is necessary
to prevent serious obstruction or prejudice to the
business or operations of the employer. [Art. 89]
6. Where overtime work is necessary to avail of
favorable weather or environmental conditions
where performance or quality of work [is
dependent thereon. [added by Rule 1, Sec. 10]
Overtime pay does not preclude night 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
Page 33 of 220
LABOR LAW
differential pay. The latter is payment for work done
during the night while the other is payment for the
excess of the regular eight-hour work. [Naric v. Naric
Workers Union, G.R. No. L-12075 (1959)]
SYNTHESIS OF RULES
1. An employer cannot compel an employee to
work overtime
Exception: Emergency overtime work as provided
for in Art. 89
2. Additional compensation is demandable only if
the employer had knowledge and consented to
the overtime work rendered by the employee.
Exception: Express approval by a superior NOT a
requisite to make overtime compensable:
a. If the work performed is necessary, or that it
benefited the company; or
b. 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. [Sec. 4(c), Rule I; Manila Railroad
Co. v. CIR, G.R. L-4614 (1952)]
Note: However, the Court has also ruled that a
claim for overtime pay is NOT justified in the
absence of a written authority to render overtime
after office hours during Sundays and holidays.
[Global Incorporated v. Atienza, G.R. L-51612-13
(1986)]
Daily time records cannot prove the performance
of overtime work if the same had no prior
authorization by the management. [Robina Farms
Cebu/Universal Robina Corp. v. Villa, G.R. No.
175869 (2016)]
3. Compensation for work rendered in excess of the
8 normal working hours in a day.
a. For ordinary days, additional 25% of the
basic hourly rate.
b. For rest day/special day/holiday, additional
30% of the basic hourly rate.
4. A given day is considered an ordinary day, unless
it is a rest day.
5. Undertime does NOT offset overtime.
Undertime work on any particular day shall not
be offset by overtime work on any other day.
Permission given to the employee to go on leave
on some other day of the week shall NOT
exempt the employer from paying the additional
compensation required in this Chapter. [Art. 88]
Offsetting work on a regular day with work rendered
on a holiday or rest day is prohibited because such
deprives the employee of additional pay or premium.
[Lagatic v. NLRC, G.R. No. 121004 (1998)]
U.P. LAW BOC LABOR STANDARDS LABOR LAW

No Waiver of Overtime Pay Night Shift Differential

The right to overtime pay cannot be waived. The Work on: Pay equals:
Labor Code [Art. 87] requires that an employee be 1 x 1.1 = 1.1 or
paid all overtime compensation notwithstanding any Regular day, night shift
110%
agreement to work for a lesser wage. Consequently, 1.3 x 1.1 = 1.43
such an agreement or "waiver" will not prevent an Rest day, night shift
or 143%
employee from recovering the difference between the 1.3 x 1.1 = 1.43
wages paid the employee and the overtime Special day, night shift
or 143%
compensation he or she is entitled to receive. [Cruz v. 1.5 x 1.1 = 1.65
Yee Sing, G.R. L-12046 (1959)] Special day, rest day, night shift
or 165%
2 x 1.1 = 2.2 or
Exception: When the waiver of overtime pay is in Regular holiday, night shift
220%
consideration of benefits and privileges which may be Regular holiday, rest day/special 2.6 x 1.1 = 2.86
more than what will accrue to them in overtime pay, day, night shift or 286%
the waiver MAY be permitted. [Meralco Workers Union 3 x 1.1 = 3.33 or
v. MERALCO, G.R. L-11876 (1959)] Double holiday, night shift
330%
Double holiday, rest day, night 3.9 x 1.1 = 4.29
Composite or Package Pay NOT per se illegal; shift or 429%
Conditions for Validity
Composite or “package pay” or “all-inclusive salary” Overtime Pay
is an arrangement where the employee’s salary
Work on: Pay equals:
includes the overtime pay. In other words, the
1 x 1.25 = 1.25
overtime pay is “built-in”. Such arrangement is valid Regular day, overtime
or 125%
provided that:
1.3 x 1.3 = 1.69
1. There is a clear written agreement knowingly and Rest day, overtime
or 169%
freely entered by the employee; and
2. The mathematical result shows that the agreed 1.3 x 1.3 =
Special day, overtime
legal wage rate and the overtime pay, computed 1..69 or 169%
separately, are equal to or higher than the 1.5 x 1.3 = 1.95
Special day, rest day, overtime
separate amounts legally due. [Damasco v. NLRC, or 195%
G.R. 115755 (2000)] 2 x 1.3 = 2.6 or
Regular holiday, overtime
260%
Regular holiday, rest day/special 2.6 x 1.3 = 3.38
e. Computation of additional day, overtime or 338%
compensation (rates only); 3 x 1.3 = 3.9 or
Double holiday, overtime
facilities vs supplements 390%
Double holiday, rest day, 3.9 x 1.3 = 5.07
Computation of additional compensation overtime or 507%
Source: Handbook on Worker's Statutory Monetary
Benefits (2018)

[See later discussion on weekly rest periods and

holidays]

In general
Work on: Pay equals:
Regular day 1 or 100%
Rest day 1.3 or 130%
Special day 1.3 or 130%
Special day falling on rest day 1.5 or 150%
Regular holiday 2 or 200%
Regular holiday falling on rest
2.6 or 260%
day
Double holiday 3 or 300%
Double holiday fallling on rest
3.9 or 390%
day

Page 34 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Overtime Pay with Night Shift Differential Sunday only when it is his established rest day. [Art.
Work on: Pay equals: 93(a)]
1 x 1.1 x 1.25 =
Regular day, overtime, night shift OTSRD = Hourly Wage x 169% x number of hours of OT
1.375 or 137.5%
1.3 x 1.1 x 1.3 = work
Rest day, overtime, night shift OTSRD = 100 x 1.69 x 4
1.859 or 185.9%
1.3 x 1.1 x 1.3 = OTSRD = 676
Special day, overtime, night shift
1.859 or 185.9%
Special day, rest day, overtime, 1.5 x 1.1 x 1.3 = Notes:
night shift 2.145 or 214.5% Total wage is 1,716 ( WRD + OTSRD).
Regular holiday, overtime, night 2 x 1.1 x 1.3 = 169% was derived by adding 39% (which is 30% of
shift 2.86 or 286% 130 or 1.3x.3 to 130%
Regular holiday, rest day/special 2.6 x 1.1 x 1.3 =
day, overtime, night shift 3.718 or 371.8% Work on Special Holiday (WSH)
Double holiday, overtime, night 3 x 1.1 x 1.3 Work performed on any special holiday shall be paid
shift =4.29 or 429% an additional compensation of at least thirty percent
Double holiday, rest day, 3.9 x 1.1 x 1.3 = (30%) of the regular wage of the employee. [Art.
overtime, night shift 5.577 or 557.7% 93(c)]

WSH = Regular wage x 130%

ILLUSTRATIONS WSH = 800 x 1.3
Regular daily wage (for 8 hours of work) = 800 WSH = 1,040
Hourly wage = 100
Hours of OT = 4 hours Work on Special Holiday Which Falls On A Rest
Day (WSHRD)
Overtime on a Regular Day (OTRD) Where such holiday work falls on the employee’s
Work may be performed beyond eight (8) hours a day scheduled rest day, he shall be entitled to an additional
provided that the employee is paid for the overtime compensation of at least fifty per cent (50%) of his
work, an additional compensation equivalent to his regular wage.
regular wage plus at least twenty-five percent (25%)
thereof [Art. 87] WSHRD = Regular wage x 150%
WSHRD = 800 x 1.5
OTRD = Hourly wage x 125% x number of hours of OT WSHRD = 1,200
work
OTRD = 100 x 1.25 x 4 Overtime during Work on Special Holiday which
OTRD = 500 falls on a Rest Day (OTWSHRD)

Note: Total wage is 1,300 (regular daily wage + OT OTWSHRD = Hourly wage x 195% x number of hours of
pay). OT work
OTWSHRD = 100 x 1.95 x 4
Work on Scheduled Rest Day (WRD) OTWSHRD = 780
Work performed on a rest day shall be paid an
additional compensation equivalent to 30%o of the Notes:
regular wage. [Art. 93] Total wage is 1,980 (WSHRD + OTWSHRD).
195% was derived by adding 45% (which is 30% of
WRD= Regular Wage x 130% 150% or 1.5x0.3) to 150%
WRD = 800 X 1.3
WRD= 1,040 Work on a Regular Holiday (WRH)
The employer may require an employee to work on
Overtime on Scheduled Rest Day (OTSRD) any holiday but such employee shall be paid a
Where an employee is made or permitted to work on compensation equivalent to twice his regular rate [Art.
his scheduled rest day, he shall be paid an additional 94(b)]
compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such WRH = Regular wage x 200
additional compensation for work performed on WRH = 800 x 2
WRH = 1,600

Page 35 of 220
U.P. LAW BOC LABOR STANDARDS
Overtime on a Regular Holiday (OTRH)
Work performed beyond eight hours on a holiday or
rest day shall be paid an additional compensation
equivalent to the rate of the first eight hours on a
holiday or rest day plus at least thirty percent (30%)
thereof [Art. 87]
OTRH = Hourly wage x 260% x number of hours of OT
work
OTRH = 100 x 2.6 x 4
OTRH = 1,040
Notes:
Total wage is 2,640 (WRH + OTRH).
2.6 was derived by adding 60% (which is 30% of 2 or
2x0.3) to 200%
Work on Regular Holiday which falls on a Rest
Day (WRHRD)
If the holiday work falls on the scheduled rest day of
the employee, he shall be entitled to an additional
premium pay of at least 30% of his regular wage
holiday rate of 200% based on his regular wage rate
[2nd sentence, Sec. 4, Rule IV, Book III, IRR].
WRHRD = Regular wage x 260
WRHRD = 800 x 2.6
WRHRD = 2,080
Note: 260% was derived by adding 60% (which is 30%
of 2 or 2x0.3) to 200%
Overtime on Regular Holiday which falls on a
Rest Day (OTWRHRD)
Where the regular holiday work exceeding 8 hours
falls on the scheduled rest day of the employee, he
shall be paid an additional compensation for the
overtime work equivalent to his regular holiday-rest
day for the first 8 hours plus 30% thereof. The regular
holiday rest day rate of an employee shall consist of
200% of his regular daily wage rate + 30% thereof
[par. 2, Sec. 5, Rule IV, Book III, IRR].
OTWRHRD = Hourly Rate x 338% x number of hours of
OT
OTWRHRD = 100 x 3.38 x 4
OTWRHRD = 1,352
Notes:
1. Total wage is 3,432 (WRHRD + OTWRHRD).
2. 338% was derived by adding 78% (which is 30% of
260 or 2.6x0.3) to 200%
Page 36 of 220
LABOR LAW
FACILITIES VS. SUPPLEMENTS
“Facilities” shall include articles or services for the
benefit of the employee or his family but shall not
include tools of the trade or articles or service
primarily for the benefit of the employer or necessary
to the conduct of the employer’s business [Sec. 5,
Rule VII-A].
Facilities are items of expense necessary for the
laborer's and his family's existence and subsistence so
that by express provision of law (Sec. 2[g]), they form
part of the wage and when furnished by the employer
are deductible therefrom, since if they are not so
furnished, the laborer would spend and pay for them
just the same [Our Haus Realty Development Corp.
v. Parian, GR No. 204651 (2014)]
"Supplements" constitute extra remuneration or
special privileges or benefits given to or received by
the laborers over and above their ordinary earnings or
wages [Our Haus Realty Development Corp. v.
Parian, GR No. 204651 (2014)].
See further discussion on III. B. Wages, p. __
Computation
The fair and reasonable value of facilities is
determined to be the cost of operation and
maintenance, including the adequate depreciation
plus reasonable allowance (but not more than 5 ½%
interest on the depreciated amount of capital invested
by the employer); provided that if the total so
computed is more than the fair rental value (or the fair
price of the commodities or facilities offered for sale)
shall be the reasonable cost of the operation and
maintenance.
The rate of depreciation and depreciated amount
computed by the employer shall be those arrived at
under good accounting practices [Sec. 6, Rule VII-A].
3. Weekly Rest Periods
It shall be the duty of every employer, whether
operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four
(24) consecutive hours after every six (6) consecutive
normal work days. [Art. 91 (a)]
Preference of the employee
The employer shall determine and schedule the
weekly rest day of his employees subject to collective
bargaining agreement and to such rules and
regulations as the Secretary of Labor and
Employment may provide. However, the employer
U.P. LAW BOC LABOR STANDARDS LABOR LAW

shall respect the preference of employees as to their Coverage [Sec. 7, Rule III, Book III, IRR]
weekly rest day when such preference is based on General Rule: All employees
religious grounds. [Art. 94 (b)] Exceptions:
1. Those of the government and any of the political
The employee shall make know his preference to the subdivision, including government-owned and
employer in writing at least seven days before the controlled corporations;
desired effectivity of the initial rest day so preferred. 2. Managerial employees as defined in Book III;
3. Househelpers and persons in the personal service
When the choice of the employee as to his rest day of another;
based on religious grounds will inevitably result in 4. Workers who are paid by results, including those
serious prejudice or obstruction to the operations and who are paid on piece rate, takay, pakyaw, or task
the employer cannot normally be expected to resort basis, and other noontime work, if their output
to other measures, the employer may so schedule the rates are in accordance with the standards
weekly rest day of his choice for at least two days in a prescribed in the regulations, or where such rates
month [Rule III, Sec. 4] have been fixed by the Secretary of Labor and
Employment;
COMPULSORY WORK ON REST DAY 5. Field personnel, if they regularly perform their
The employer may require his employees to work on duties away from the principal or branch office
any day: or place of business of the ER and whose actual
1. In case of actual or impending emergencies hours of work in the filed cannot be determined
caused by serious accident, fire, flood, typhoon, with reasonable certainty.
earthquake, epidemic or other disaster or
calamity to prevent loss of life and property, or Premium pay rates [Handbook on Workers
imminent danger to public safety; Statutory Monetary Benefits, 2018]
2. In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid Premium
When Work Performed
serious loss which the employer would otherwise Pay
suffer; 130% of
3. In the event of abnormal pressure of work due to On scheduled rest day
regular wage
special circumstances, where the employer On Sunday ONLY IF this is the 130% of
cannot ordinarily be expected to resort to other ESTABLISHED rest day regular wage
measures; On Sunday and holidays, when no 130% of
4. To prevent loss or damage to perishable goods; regular work and rest days regular wage
5. Where the nature of the work requires 130% of
continuous operations and the stoppage of work On any special holiday/special day
regular wage
may result in irreparable injury or loss to the On any special holiday /special day 150% of
employer; and falling on scheduled rest day regular wage
6. Under other circumstances analogous or similar On a regular holiday falling on a rest 260% of
to the foregoing as determined by the Secretary day regular wage
of Labor and Employment. [Art. 92]
Work on a Sunday or holiday which is also a
Synthesis of the Rules scheduled rest day
1. Rest day of not less than 24 consecutive hours
after 6 consecutive days of work.
2. No work, no pay principle applies Sec. 2, Rule III, Book III, IRR. Business on
3. If an employee works on his designated rest day, Sundays/Holidays. – All establishments and
he is entitled to a premium pay. enterprises may operate or open for business on
4. Premium pay is additional 30% of the basic pay. Sundays and holidays provided that the employees
5. Employer selects the rest day of his employees are given the weekly rest day and the benefits as
6. However, employer must consider the religious provided in this Rule.
reasons for the choice of a rest day.

PREMIUM PAY
Premium pay refers to the additional compensation
for work performed within 8 hours on non-work
days, such as rest days and special days.

Page 37 of 220
U.P. LAW BOC LABOR STANDARDS
Sec. 7, Rule III, Book III, IRR. Compensation
on rest day/Sunday/holiday. –
(a) Except those employees referred to under Sec.
2, Rule I, Book III, an employee who is made
or permitted to work on his scheduled rest day
shall be paid with an additional compensation
of at least 30% of his regular wage. An
employee shall be entitled to such additional
compensation for work performed on a
Sunday only when it is his established rest day.
(b) Where the nature of the work of the employee
is such that he has no regular work days and no
regular rest days can be scheduled, he shall be
paid an additional compensation of at least
30% of his regular wage for work performed
on Sundays and holidays.
CBA on higher premium pay/ Rate Adjustments
Where the collective bargaining agreement or other
applicable employment contract stipulates the
payment of a higher premium pay than that
prescribed under this Article, the employer shall pay
such higher rate. [Art. 93 (d)] The employer and his
employees or their representatives are not prevented
from entering into any agreement with terms more
favorable to the employees. [Sec. 9, Rule II, Book III,
IRR]
The laws and regulations should not be used to
diminish any benefit granted to the employees under
existing laws agreements and voluntary employer
practices. [Ibid] Nothing in this rule shall justify an
employer in reducing the compensation of his
employees for the unworked Sundays, holidays, or
other rest days which are considered paid off days or
holidays by agreement or practice subsisting upon the
effectivity of the Code. [Sec. 8, Rule III, Book III,
IRR]
4. Holidays
HOLIDAY PAY
Holiday pay is a one-day pay given by law to an
employee even if he does not work on a regular
holiday. This gift of a day’s pay is limited to each of
the 12 regular holidays.
Note: Art. 94 (c), was superseded by E.O. 203, which
was subsequently amended by RA 9177, 9256, 9492,
and 9849. The current state of the law is discussed
below.
Page 38 of 220
LABOR LAW
Coverage
General Rule: All employees [Art. 94(a); Rule IV, Sec.
1]
Exceptions:
a. Those of the government and any of the political
subdivision, including government-owned and
controlled corporation;
b. Those of retail and service establishments
regularly employing less than 10 workers;
c. Domestic helpers and persons in the personal
service of another;
d. Managerial employees and officers or members
of the managerial staff as defined in Book III
e. Field personnel and other employees whose time
and performance is unsupervised by the
employer including those who are engaged on
task or contract basis, purely commission basis,
or those who are paid a fixed amount for
performing work irrespective of the time
consumed in the performance thereof. [Sec. 1,
Rule IV]
Retail Establishment is one principally engaged in
the sale of goods to end-users for personal or
household use
Service Establishment is one principally engaged in
the sale of service to individuals for their own or
household use and is generally recognized as such.
[RA 6727 (The Wage Rationalization Act) IRR]
Regular holidays
RA 9492 and 9849 (which added the two Muslim
holidays) provide for the observance of the following
regular holidays:
a. New year’s Day – Jan. 1
b. Maundy Thursday – Movable date
c. Good Friday – Movable date
d. Araw ng Kagitingan – Monday nearest Apr. 9
e. Labor Day – Monday nearest May 1
f. Independence Day – Monday nearest June 12
g. Eid’l Fitr – Movable date
h. Eid’l Adha – Movable date
i. National Heroes Day – Last Monday of August
j. Bonifacio Day – Monday nearest Nov. 30
k. Christmas Day – Dec. 25
l. Rizal Day – Monday nearest Dec. 30
Special (Non-Working Days)
RA 9492 and RA 10966 provide for the observance
of the following special holidays:
a. Ninoy Aquino Day – Monday nearest Aug. 21
b. All Saints Day – Nov. 1
c. Immaculate Conception of Mary [RA 10966] –
Dec. 8
d. Last day of the year – Dec. 31
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Note: Proclamation 269 fixed the data for the

observance of the regular and special holidays Work on holiday Computation
including additional special holidays for 2018 and 200% of regular daily
2019 Work on any regular
wage (for the 1st 8 hours)
The dates for Eid’l Fitr and Eid’l Adha (special holiday, if it exceeds 8
+ 60% of hourly rate on
holidays) shall follow after approximate dates of the hours/overtime
said day [260% ]
Islamic holidays have been determined. Work on any regular
200% of regular daily
holiday which falls on
Arts. 169-173, P.D. 1083 (Code of Muslim Personal wage + 60% of such
the scheduled rest day,
Laws) amount [260%]
not exceeding 8 hours
Specifically for the Muslim Areas, P.D. 1083, in its Regular holiday-on-rest
Book V, IRR Title, recognizes five (5) Muslim Work on any regular
day rate (200% of regular
Holidays, namely: holiday which falls on
daily wage plus 30% of
a. Amun Jadid (New Year) which falls on the first scheduled rest day, if it
such amount) + 30% of
(1st) day of the lunar month of Muharram; exceeds 8
hourly rate on said day.
b. Mauli-un-Nabi (Birthday of the Prophet hours/overtime
[338%]
Muhammad) which falls on the twelfth (12th) day Work on special holiday Regular daily wage +
of the third (3rd) lunar month of Rabi-ul-Awwal; not exceeding 8 hours 30% thereof [130%]
c. Lailatul Isra Wal Mi Rai (Nocturnal Journey and Work on special holiday, 130% of regular daily
Ascencion of the Prophet Muhammand) which if it exceeds 8 wage + 30% hourly rate
falls on the twenty-seventh (27th) day of the hours/overtime on said day [169%]
seventh (7th) lunar month of Rajab; Work on a special
d. Id-ul-Fitr (Hari Raja Pausa) which falls on the first Regular daily wage +
holiday falling on a rest
(1st) day of the tenth (10th) lunar month of 50% thereof [150%]
day
Shawwal commemorating the end of the fasting
season; and According to DOLE Memo Circular 1-04, a
e. Id-ul-Adha (Hari Raha Haji) which falls on the “special holiday”/”special day” includes the National
tenth (10th) day of the twelfth (12th) lunar month Special Days, and declared special days such as Special
of Dhu’l-Hijja. Non-working Holiday, Special Public Holiday and
Special National Holiday. Such days are entitled to the
Notes: rates prescribed above. These days are not the same
a. Id-ul-Fitr (Eid’l Fitr) and Id-ul-Adha (Eid’l Adha) as a special working holiday.
have been added to the list of national legal
holidays [RA 9849]. A special working holiday is considered an ordinary
b. There should be no distinction between Muslims working day, so there is no premium pay.
& non-Muslims as regards to the payment of
benefits for Muslim holidays. Wages & other Double holiday pay
emoluments granted bylaw to the workingman According to “DOLE Explanatory Bulletin on
are determined on the basis of the criteria laid Worker’s Entitlement to Holiday Pay on 9 April
down by laws & not on worker’s faith. Art. 3(3), 1993,” if two holidays fall on the same day:
PD 1083 states that nothing herein shall be a. If unworked, 200% of basic wage.
construed to operate to the prejudice of a non- b. If worked, 300% of basic wage. [Azucena]
Muslim. [San Miguel Corp v. CA, G.R. No.
146775 (2002)] Double Holiday Rule for Monthly-paid
employees
Holiday pay computation (Art. 94; Rule IV, Book For covered employees whose monthly salaries are
III, IRR; RA 9424; DOLE Memorandum Circular 1 computed based on 365 days and for those other
Series of 2004) employees who are paid using factor 314, or 262, or
any other factor which already considers the payment
General Rule: An employer may require an employee to for the 11 [now 12] regular holidays, NO additional
work on a regular holiday but such employee shall be payment is due them. [BWC-WHSD Opinion No.
paid a compensation equivalent to twice his regular 053, s. 1998]
rate. If an employee is required to work on a special
holiday, the additional compensation should be 30%
of his regular rate.

Page 39 of 220
U.P. LAW BOC LABOR STANDARDS
Successive holiday pay
According to IRR, Rule IV, Sec. 10, an employee is
entitled to holiday pay for both days, IF:
a. He is present on day immediately preceding first
holiday; or
b. He works on first holiday, which entitles him to
pay on second holiday.
Where the day immediately preceding the holiday is a
non-working day in the establishment or the
scheduled rest day of the employee, he shall not be
deemed to be on leave of absence on that day, in
which case he shall be entitled to the holiday pay if he
worked on the day immediately preceding the non-
working day or rest day. [Sec. 6, Rule IV, Book III,
IRR]
Divisors
The divisor assumes an important role in determining
whether or not holiday pay is already computed.
a. Monthly paid employees are not entitled to the
holiday pay if their total annual income is divided
by 365 days resulting in a wage which is beyond
the minimum wage per day because they are
considered paid everyday of the year including
holidays, rest days, and other non-working days.
b. As a general rule, for a company with a 6-day
working schedule, the divisor 313 already means
that the legal holidays are included in the monthly
pay of the employee. The divisor is arrived at by
subtracting all Sundays from the total number of
calendar days in a year.
c. As a general rule for a company with a 5-day
working schedule, the divisor 277 means that the
holiday pay is already included in the monthly
salary of the employee. [Trans Asia Phils. v.
NLRC, G.R. No. 118289 (1999)]
Where the employer had a standing practice of using
286 days as a divisor and following the correct
computation and taking into account that one of the
holidays always falls on a Sunday, therefore increasing
the divisor to “287”, but increase would in some
instances prejudice the employees, in violation of the
proscription against non-diminution of benefits
under Sec. 100 of the labor code, the “287” divisor
should only be used for computations which would
be advantageous to the employer (i.e. deduction for
absences) and not for computations which would
diminish the existing benefits of the employees (i.e.,
overtime pay, holiday pay and leave conversions).
[Trans Asia Phils. v. NLRC, supra]
Page 40 of 220
LABOR LAW
Sundays
(See “Work on a Sunday or holiday which is also a
scheduled rest day”)
a. When a holiday falls on a Sunday, the following
Monday will not be considered a holiday unless a
proclamation says so.
b. Furthermore as stated in the Wellington case (see
below), a legal holiday falling on a Sunday does
not create a legal obligation to pay extra, aside
from the usual holiday pay, to monthly-paid
employees. [Azucena citing Letter of Instruction
No. 1087]
No provision of law requires any employer to make
adjustments in the monthly salary rate set by him to
take account of legal holidays falling on Sundays in a
given year, otherwise to reckon a year at more than
365 days. [Wellington Investment and Manufacturing
Corporation v. Trajano, G.R. No. 114698 (1995)]
Non-working/scheduled rest day
Where the day immediately preceding the holiday is a
non-working day in the establishment or the
scheduled rest day of the employee, he shall not be
deemed to be on leave of absence on that day, in
which case he shall be entitled to the holiday pay if he
worked on the day immediately preceding the non-
working day or rest day. [Sec. 6(c), Rule IV, Book III,
IRR]
Example:
If a holiday falls on Monday, and Sunday is a non-
working day in the establishment or is the scheduled
rest day of the employee, the employee shall be
entitled to holiday pay if he worked on Saturday
(which is the day immediately preceding Sunday, the
non-working day or rest day).
Right to holiday pay in case of absences
All covered employees shall be entitled to the benefit
provided herein when they are on leave of absence
with pay.
Employees who are on leave of absence without pay
on the day immediately preceding a regular holiday
may not be paid the required holiday pay if he has not
worked on such regular holiday. [Sec. 6(a), Rule IV,
Book III, IRR]
Notes:
a. If an employee is on leave of absence with pay
on the day immediately preceding a regular
holiday, he is entitled to holiday pay.
b. If an employee is on leave of absence without
pay on the day immediately preceding a regular
holiday, he is not entitled to holiday pay unless he
works on such regular holiday.
U.P. LAW BOC LABOR STANDARDS
In case of temporary cessation of work
a. In cases of temporary or periodic shutdown and
temporary cessation of work of an establishment,
as when a yearly inventory or when the repair or
cleaning of machineries and equipment is
undertaken, the regular holidays falling within the
periods shall be compensated in accordance with
this Rule.
b. The regular holiday during the cessation of
operation of an enterprise due to business
reverses as authorized by the Secretary of Labor
may not be paid by the employer. [Sec. 7, Rule
IV, Book III, IRR]
An employee is entitled to holiday pay for the regular
holidays falling within the period in cases of
temporary shutdowns or cessation of work, when:
a. An annual inventory; or
b. Repair or cleaning of machineries and equipment
is undertaken.
The employer may not pay his employees for the
regular holidays during the suspension of work if: the
cessation of operation is due to business reverses, and
is authorized by the Secretary of Labor.
Teachers, Piece Workers, Seafarers, Seasonal
Workers, Etc.
a. Private school teachers, including faculty
members of colleges and universities, may not be
paid for the regular holidays during semestral
vacations. They shall, however, be paid for the
regular holidays during Christmas vacation;
b. Where a covered employee, is paid by results or
output, such as payment on piece work, his
holiday pay shall not be less than his average daily
earnings for the last seven (7) actual working days
preceding the regular holiday; Provided,
However, that in no case shall the holiday pay be
less than the applicable statutory minimum wage
rate.
c. Seasonal workers may not be paid the required
holiday pay during off-season when they are not
at work
d. Workers who have no regular working days shall
be entitled to the benefits provided in this Rule.
[Sec. 8, Rule IV, Book III, IRR]
Holiday Pay of Hourly-Paid Faculty Members
Not Entitled: Regular Holiday Pay
Entitled: Regular hourly rate on days declared as
special holidays or for some reason classes are called
off or shortened for the hours they are supposed to
have taught, whether extensions of class days be
ordered or not; in case of extensions said faculty
Page 41 of 220
LABOR LAW
members shall likewise be paid their hourly rates
should they teach during said extensions.
a. They are not entitled to payment of holiday pay
because they are paid only for work actually done.
Since regular holidays are known to both the
school and faculty members as “no class day”;
certainly the latter do not expect payment for said
unworked holidays.
b. They are entitled to their hourly rate on days
declared as special holidays. When a special
public holiday is declared, the faculty member
paid by the hour is deprived of expected income,
and it does not matter that the school calendar is
extended in view of the days or hours lost, for
their income that could be earned from other
sources is lost during the extended days.
c. Similarly, when classes are called off or shortened
on account of typhoons, floods, rallies, and the
like, these faculty members must likewise be paid,
whether or not extensions are ordered. [Jose Rizal
College v. NLRC, G.R. No. L-65482 (1987)]
Piece workers
Philosophy underlying the exclusion of piece workers
from the 8-hour law is that said workers are paid
depending upon the work they do irrespective of the
amount of time employed in doing said work. [Red V
Coconut Products Ltd. v. CIR, G.R. No. L-21348 (1966)]
Seafarers
Any hours of work or duty including hours of watch-
keeping performed by the seafarer on designated rest
days and holidays shall be paid rest day or holiday pay.
[Sec. 11.C, Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on
Board Ocean-Going Vessels]
Seasonal workers
Seasonal workers who do not work during off-season
are not entitled to pay for the regular holidays
occurring during their off-season. Workers assigned
to “skeleton crews” that work during the off-season
have the right to be paid on regular holidays falling in
that duration.
ILLUSTRATIONS
Overtime on a Regular Day (OTRD)
Work may be performed beyond eight (8) hours a day
provided that the employee is paid for the overtime
work, an additional compensation equivalent to his
regular wage plus at least twenty-five percent (25%)
thereof [Art. 87]
OTRD = Hourly wage x 125% x number of hours of OT
work
U.P. LAW BOC LABOR STANDARDS
Work on Scheduled Rest Day (WRD)
Work performed on a rest day shall be paid an
additional compensation equivalent to 30%o of the
regular wage. [Art. 93]
WRD= Regular Wage x 130%
Overtime on Scheduled Rest Day (OTSRD)
Where an employee is made or permitted to work on
his scheduled rest day, he shall be paid an additional
compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such
additional compensation for work performed on
Sunday only when it is his established rest day. [Art.
93(a)]
OTSRD = Hourly Wage x 169% x number of hours of OT
work
Notes: 169% was derived by adding 39% (which is
30% of 130 or 1.3x.3 to 130%
Work on Special Holiday (WSH)
Work performed on any special holiday shall be paid
an additional compensation of at least thirty percent
(30%) of the regular wage of the employee. [Art.
93(c)]
WSH = Regular wage x 130%
Work on Special Holiday which falls on a Rest
Day (WSHRD)
Where such holiday work falls on the employee’s
scheduled rest day, he shall be entitled to an additional
compensation of at least fifty per cent (50%) of his
regular wage.
WSHRD = Regular wage x 150%
Overtime during Work on Special Holiday which
falls on a Rest Day (OTWSHRD)
OTWSHRD = Hourly wage x 195% x number of hours of
OT work
Note: 195% was derived by adding 45% (which is 30%
of 150% or 1.5x0.3) to 150%
Work on a Regular Holiday (WRH)
The employer may require an employee to work on
any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate [Art.
94(b)]
WRH = Regular wage x 200%
Page 42 of 220
LABOR LAW
Overtime on a Regular Holiday (OTRH)
Work performed beyond eight hours on a holiday or
rest day shall be paid an additional compensation
equivalent to the rate of the first eight hours on a
holiday or rest day plus at least thirty percent (30%)
thereof [Art. 87]
OTRH = Hourly wage x 260% x number of hours of OT
work
Note: 2.6 was derived by adding 60% (which is 30%
of 2 or 2x0.3) to 200%
Work on Regular Holiday which falls on a Rest
Day (WRHRD)
If the holiday work falls on the scheduled rest day of
the employee, he shall be entitled to an additional
premium pay of at least 30% of his regular wage
holiday rate of 200% based on his regular wage rate
[2nd sentence, Sec. 4, Rule IV, Book III, IRR].
WRHRD = Regular wage x 260%
Note: 260% was derived by adding 60% (which is
30% of 2 or 2x0.3) to 200%
Overtime on Regular Holiday which falls on a
Rest Day (OTWRHRD)
Where the regular holiday work exceeding 8 hours
falls on the scheduled rest day of the employee, he
shall be paid an additional compensation for the
overtime work equivalent to his regular holiday-rest
day for the first 8 hours plus 30% thereof. The regular
holiday rest day rate of an employee shall consist of
200% of his regular daily wage rate + 30% thereof
[par. 2, Sec. 5, Rule IV, Book III, IRR].
OTWRHRD = Hourly Rate x 338% x number of hours of
OT
Note: 338% was derived by adding 78% (which is 30%
of 260 or 2.6x0.3) to 200%
5. Service incentive leaves
See: discussion on III. C. Leaves
U.P. LAW BOC LABOR STANDARDS LABOR LAW

6. Service Charges Integration

In case service charge is abolished, the shares of
covered employees shall be considered integrated in
Coverage
their wages. [Art. 96]
Employers
This rule shall apply only to establishments which
The basis of the amount to be integrated shall be the
collect service charges such as:
average monthly share of each employee for the past
a. Hotels, restaurants, lodging houses, night clubs,
twelve (12) months immediately preceding the
cocktail lounge, massage clinics, bars, casinos and
abolition of withdrawal of the charges. [Sec. 5, Rule
gambling houses;
VI, Book III, IRR]
b. Similar enterprises including those entities
operating primarily as private subsidiaries of the
In Relation to Collective Bargaining Agreements
Government [Sec. 1, Rule VI, Book III, IRR]
and Employer-Employee Agreements
a. Nothing in the Rules shall prevent the employer
Employees
and employee from entering into any agreement
Shall apply to ALL employees of covered employers
with terms more favorable to the employees than
Regardless of their positions, designations, or
those granted therein, or be used to diminish any
employment status, and
benefit granted to the employees under existing
a. Irrespective of the method by which their wages
laws, agreement AND voluntary employer
are paid. [Sec. 2, Rule VI, Book III, IRR]
practice. [Sec. 6, Rule VI, Book III, IRR]
b. The rule is without prejudice to existing, future
Exceptions
collective bargaining agreements. [Sec. 7, Rule
Managerial employees – one who is vested with
VI, Book III, IRR]
powers or prerogatives to lay down and execute
managerial policies and/or hire, transfer, suspend,
Synthesis of the Rules
layoff, recall, discharge, assign or discipline employees
a. Service charges must be pooled;
or to effectively recommend such managerial actions.
b. Where a restaurant or similar establishment does
[Sec. 2, Rule VI, Book III, IRR]
not collect service charges but has a practice or
policy of monitoring and pooling tips given
Distribution
voluntarily by its customers to its employees, the
Service charges are distributed in accordance with the
pooled tips should be monitored, accounted for
following percentage of sharing:
and distributed in the same manner as the
a. Eighty-five percent (85%) for the employees to
services charges. [Handbook on Workers’
be distributed equally among them;
Statutory Monetary Benefits, 2018]
b. Fifteen percent (15%) for the disposition of
c. The amount collected is divided between the
management to answer for losses and breakages
company (15%) and employees (85%);
and, at the discretion of the management for
d. It shall be given twice a month with intervals of
distribution to managerial employees. [Sec. 3,
not more than 16 days;
Rule VI, Book III, IRR]
e. If discontinued, removed, or stopped, the
average share of the employees of their service
The shares shall be distributed to employees not less
charge or tips shall be integrated with their basic
than once every 2 weeks or twice a month at intervals
wage.
not exceeding 16 days. [Sec. 4, Rule VI, Book III,
IRR]
7. 13TH Month Pay
Notes:
a. The P2,000.00 salary ceiling for entitlement [PD 851 (The 13th-Month Pay Law) and the Revised
thereto is no longer applicable. Guidelines on the Implementation of the 13th Month
b. [The employees’] right to their shares in the Pay Law]
service charges collected by [the employer] is
distinct and separate from their right to ECOLA; Rationale
gratification by the [employer] of one does not a. To further protect the level of real wages from
result in the satisfaction of the other. [Philippine the ravage of world-wide inflation;
Hoteliers, Inc., Dusit Hotel-Nikko v. NUWHRAIN- b. There had been no increase in the legal minimum
APL-IUF-Dusit Hotel Nikko Chapter, G.R. No. wage rates since 1970;
181972 (2009)]

Page 43 of 220
U.P. LAW BOC LABOR STANDARDS
c. The Christmas season is an opportune time for
society to show its concern for the plight of the
working masses so they may properly celebrate
Christmas and New Year. [Whereas clauses]
Coverage
General Rule: ALL EMPLOYERS are hereby required
to pay all their rank and file employees a 13th
month pay not later than Dec 24 of every year,
Provided that they have worked for at least one (1) month
during a calendar year. [Memorandum Order No. 28]
N.B.: The law distinguishes managerial employees
from rank-and-file employees; hence, managerial
employees are not legally entitled to 13th month pay.
Exempted Employers:
a. Government, its political subdivisions, including
GOCCs except those operating essentially as
private subsidiaries of the Government;
b. Employers already paying their employees a 13th
month pay or more in a calendar year or its equivalent
at the time of this issuance; and
c. Employers of those who are paid on purely
commission, boundary or task basis and those
who are paid a fixed amount for performing
specific work, irrespective of the time consumed
in the performance thereof (except those workers
who are paid on piece-rate basis, in which case
their employer shall grant them 13th month pay).
Notes:
“Equivalent” includes:
a. Christmas bonus, mid-year bonus, cash bonuses
b. and other payments amounting to not less than
1/12 of the basic salary
c. but shall NOT INCLUDE cash and stock
dividends, cost of living allowances and all other
allowances regularly enjoyed by the employee as
well a non-monetary benefits.
Workers paid on a piece-rate basis - paid a
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.
Minimum Amount
1/12 of the total basic salary earned by an employee
within a calendar year
Page 44 of 220
LABOR LAW
Base Amount
General Rule: basic salary shall include:
a. Cost of living allowances (COLA) integrated into
the basic salary of a covered employee pursuant
to EO 178.
b. All remunerations or earnings paid by this
employer for services rendered.
c. But not the allowances and monetary benefits
which are not considered or integrated as part of
the regular or basic salary, such as the cash
equivalent of:
1. Unused vacation and sick leave credits,
2. Overtime,
3. Premium,
4. Night differential,
5. Holiday pay and, and
6. Cost-of-living allowances.
Exception: From 1975 to 1981, [the employer] had
freely, voluntarily and continuously included in the
computation of its employees' thirteenth month pay,
the payments for sick, vacation and maternity leaves,
premiums for work done on rest days and special
holidays, and pay for regular holidays. The
considerable length of time the questioned items had
been included by [the employer] indicates a unilateral
and voluntary act on its part, sufficient in itself to
negate any claim of mistake.
A company practice favorable to the employees had
indeed been established and the payments made
pursuant thereto, ripened into benefits enjoyed by
them. And any benefit and supplement being enjoyed
by the employees cannot be reduced, diminished,
discontinued or eliminated by the employer. [Davao
Fruits Corp. v. ALU, G.R. No. 85073 (1993)]
Time of payment
General Rule: paid not later than Dec 24 of each year.
Exception: ER may give to his employees half (½) of
the required 13th Month Pay before the opening of
the regular school year and the other half on or before
the 24th of December every year.
The frequency of payment of this monetary benefit
may be the subject of agreement between the
employer and the recognized CBA of the employees.
13th Month Pay in Special Cases
a. Paid by Results: Employees who are paid on
piece work basis are, by law, entitled to the 13th
Month Pay. [Revised Guidelines on the
Implementation of the 13th Month Pay Law]
U.P. LAW BOC LABOR STANDARDS
b. Fixed or Guaranteed Wage: Employees who
are paid a fixed or guaranteed wage plus
commission are entitled to 13th month pay (not
purely commission); the basis for computation
shall be both their fixed or guaranteed wage and
commission. [Revised Guidelines]
c. Those with Multiple Employers: Government
Employees working part time in a private
enterprise, including private educational
institutions, as well as Employees working in two
or more private firms, whether on full or part
time bases, are entitled to the required 13th Month Pay
from all their private Employers regardless of their
total earnings from each or all their employers.
[Revised Guidelines]
d. Private School Teachers: Private school
teachers, including faculty members of
universities and colleges, are entitled to the
required 13th month pay, regardless of the
number of months they teach or are paid within
a year, if they have rendered service for at least
one (1) month within a year. [Revised Guidelines]
Overload pay is NOT included in the
computation for 13th month pay; overload is
not overtime as it is additional work done
within the normal shift [Letran Calamba
Faculty v. NLRC, G.R. No. 156225 (2008)]
e. Resigned or Separated Employee: An
Employee who has resigned or whose services
were terminated at any time before the time for
payment of the 13th month pay is entitled to this
monetary benefit in proportion to the length of
time he worked during the year, reckoned from
the time he started working during the calendar
year up to the time of his resignation or
termination from service. [Revised Guidelines]
f. Terminated Employees: The payment of the
13th month pay may be demanded by the
employee upon the cessation of employer-
employee relationship. [Archilles Manufacturing
Corp. v. NLRC, G.R. No. 107225 (1995)]
Additional Rules:
a. Commissions: If the commissions may be
properly considered part of the basic salary, then
they should be INCLUDED. If they are not an
integral part of the basic salary, then they should
be EXCLUDED. [Phil. Duplicators Inc. v. NLRC,
G.R. No. 110068 (1995)]
b. Substitute Payment not allowed: Benefits in
the form of food or free electricity, assuming they
were given, were not a proper substitute for the
13th month pay required by law. Neither may
year-end rewards for loyalty and service be
Page 45 of 220
LABOR LAW
considered in lieu of 13th month pay. [Framanlis
Farms, Inc. v. MOLE, G.R. No. 72616-17 (1989)]
c. Wage Difference: The difference between the
minimum wage and the actual salary received by
the Employee cannot be deemed as his 13th
month pay as such difference is not equivalent to
or of the same import as the said benefit
contemplated by law. [JPL Marketing Promotions v.
CA, G.R. No. 151966 (2005)]
d. 14th Month Pay is not mandated: Employers
already paying their employees a 13th month pay
or its equivalent are not covered by this
Decree.[Kamaya Point Hotel v. NLRC, G.R. No.
75289 (1989)]
e. Non-inclusion in regular wage: The mandated
13th month pay need not be credited as part of
regular wage of employees for purposes of
determining overtime and premium pays, fringe
benefits insurance fund, Social Security, Medicare
and private retirement plans. [Revised Rules]
Commissions vis-à-vis 13th month pay
The Rule on Productivity Bonuses. The so-called
commissions “paid to or received by medical
representatives of Boie-Takada Chemicals or by the
rank-and-file employees of Philippine Fuji Xerox Co.,
were excluded from the term “basic salary” because
these were paid to the medical representatives and
rank-and-file employees as “productivity bonuses.”
These have no clear direct or 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 an employee. If an
employer cannot be compelled to pay a productivity
bonus to its employees, it should follow that such
productivity bonus, when given, should not be
deemed to fall within the “basic salary” of employees
when the time comes to compute their 13th month
pay [Boie-Takeda v. de la Serna, G.R. No. 92174 and
G.R. No. L-102552 (1993)]
The decision in Boie-Takeda and the doctrine
enunciated in this case in fact co-exist with the other.
The two cases present quite different factual
situations (although the same word “commissions”
was used or invoked) the legal characterizations of
which must accordingly differ.
In the instant case, there is no question that the sales
commission earned by the salesmen who make or
close a sale of duplicating machines constitute part of
the compensation or remuneration paid to salesmen
for serving as salesmen, and hence as part of the
“wage” or salary of petitioner’s salesmen. It appears
that petitioner pays its salesmen a small fixed or
guaranteed wage; the greater part of the salesmen’s
U.P. LAW BOC LABOR STANDARDS
wages or salaries being composed of the sales or
incentive commissions earned on actual sales closed
by them. The sale commissions were an integral part
of the basic salary structure. They are not overtime
payments, or profit sharing payments or any other
fringe benefit. [Phil. Duplicators v. NLRC, G.R. No.
110068 (1995)]
CBA vis-à-vis 13th month pay
The Presidential Decree is specific and mandatory.
However, if the employers actually grant such for the
13th month pay in the monetary benefits provided for
in the CBA, they could be exempted from the
operation of the decree. To be exempted, there must
be actual payment. [Marcopper Mining Corp. v. Ople,
G.R. No. L-51254 (1981)]
Effect of Deficiency in 13th month pay
The intent of P.D. No. 851 is the granting of
additional income in the form of 13th month pay to
employees not as yet receiving the same and not that
a double burden should be imposed on the employer
who is already paying his employees a 13th month pay
or its equivalent. [Iran v. NLRC, G.R. No. 121927
(1998)]
An employer who pays less than 1/12th of the
employees basic salary as their 13th month pay is only
required to pay the difference. [Revised Rules]
Page 46 of 220
LABOR LAW
B. Wages
Definition
It is the remuneration or earnings, however
designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of
calculating the same, which is payable by an employer
to an employee under a written or unwritten contract
of employment for work done or to be done, or for
services rendered or to be rendered and includes the
fair and reasonable value, as determined by the
Secretary of Labor and Employment, of board,
lodging, or other facilities customarily furnished by
the employer to the employee. Fair and reasonable
value - shall not include any profit to the employer, or
to any person affiliated with the employer. [Art. 97(f)]
“No work no pay” Principle
General Rule: the age old rule governing the relation
between labor and capital or management and
employee is that a "fair day's wage for a fair day's
labor." [Sugue v. Triumph International, G.R. No. 164804
(2009)]
Exception: When the laborer was able, willing and ready
to work but was illegally locked out, suspended or
dismissed, or otherwise illegally prevented from
working. [Sugue v Triumph International, supra]
“Equal Work for Equal Pay” Principle
Employees working in the Philippines, if they are
performing similar functions and responsibilities
under similar working conditions should be paid
equally. If an employer accords employees the same
position and rank, the presumption is that these
employees perform equal work. [International School
Alliance of Educators v. Hon. Quisumbing, G.R. No.
128845 (2000)]
Coverage/Exclusions
Wage includes the fair and reasonable value of
facilities furnished by the employer to the employee
[Art. 97(f)] while allowances are excluded from the
basic salary or wage computation. [Cebu Institute of
Technology v. Ople, G.R. No. L-58870 (1987)]
Applicability
The Labor Code Title on wages shall not apply to the
following [Art. 98 and Sec. 3, Rule VII, Book III,
IRR]:
a. Farm tenancy or leasehold;
b. Household or domestic helpers, including family
drivers and other persons in the personal service
of another;
U.P. LAW BOC LABOR STANDARDS LABOR LAW

c. Homeworkers engaged in needlework; 3. Where all of the following conditions are met:
d. Workers in registered cottage industries who a. Bank/Facility for encashment is within 1-km
actually work at home; radius from the workplace
e. Workers in registered cooperatives when so b. ER did not receive any pecuniary benefit
recommended by the Bureau of Cooperative because of said arrangement
Development upon approval of the Secretary of c. EEs are given reasonable time during
Labor; banking hours to withdraw their wages
(compensable hours, if during working
Note: Workers in registered barangay micro business hours)
enterprise are only exempted from the Minimum d. The payment by check is with the written
Wage Law, not from the Title on Wages [RA 9178]. consent of the EEs concerned, in the
absence of a CBA. [Sec. 2, Rule VIII]
Wages v. Salary
Wages and salary are in essence synonymous. [Songco b. Time of Payment [Art. 103] [Sec.
v. NLRC, G.R. No. L-50999 (1990)]
3, Rule VIII, Book III, IRR]
There are slight differences:
Wage Salary Time of Payment
Paid to white collar At least once every 2 weeks
Frequency
Paid for skilled or workers and denote a or 2x per month
unskilled manual labor higher grade of Must not be more than 16
Intervals
employment days
Not subject to Not exempt from Valid excuse for delayed
execution, garnishment execution, garnishment payment
Force Majeure or
or attachment except or attachment [Gaa v. BUT ER must pay
circumstances beyond
for debts related to CA, G.R. No. L-44169 immediately after cessation
ER’s control
necessities [Art. 1708] (1985)] and not less than once a
month
Payments should be made
1. Payment of Wages with intervals not more than
Tasks which cannot 16 days, in proportion to
a. Form of Payment [Art. 102] be completed in 2 work completed
[Secs. 1-2, Rule VIII, Book III, weeks Final settlement is made
upon completion of the
IRR] work.
General rule: Legal Tender Only
Exception: Check/Money Order if customary OR c. Place of Payment [Art. 104] [Sec.
necessary because of special circumstances, as 4, Rule VIII, Book III, IRR]
specified by the Secretary of Labor or the CBA
Not allowed: General Rule: Shall be made at or near the place of
1. Promissory Notes undertaking (workplace)
2. Vouchers
3. Tokens Exceptions:
4. Tickets 1. Deterioration of peace and order conditions, or
5. Chits; or by reason of actual or impending emergencies
6. Any other form alleged to represent a legal (fire, flood, epidemic)
tender, even when expressly requested by the 2. Free transportation to the employees back and
employee. [Art. 102] forth
3. Under any other analogous circumstances
When payment through check, postal orders or provided, that the time spent by the employees in
money orders is allowed: collecting their wages shall be considered as
1. When payment is customary (on the date of Code compensable hours worked.
effectivity)
2. Where it is so stipulated in a collective agreement

Page 47 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW

NO PAYMENT in any bar, night or day club, e. Facilities v. Supplements

drinking establishment, massage clinic, dance hall, or
other similar places or in places where games are The distinction between facilities and supplement is
played with stakes of money or things representing relevant because the former is wage-deductible while
money except in the case of persons employees in the latter is not. Simply put, a wage includes facilities.
such places [Art. 97]
Condition for ATM payment The IRR definition [Sec. 5, Rule 7-A, Book III, IRR]
[Labor Advisory on Payment of Salaries thru ATM has 2 components:
(1996)]: 1. Facilities are articles or services for the benefit of
1. ATM system of payment is with the written the employee or his family. This 1st part defines
consent of the EEs facilities.
2. EEs are given reasonable time to withdraw their 2. Facilities shall not include tools of the trade or
wages from the banking facility (compensable articles or service primarily for the benefit of the
hours, if during work hours) employer or necessary to the conduct of the
3. System shall allow workers to receive their wages employer’s business. This 2nd part is essentially
within the period/frequency provided by law defines what a supplement is.
4. There is a bank/ATM facility within 1km radius
from the place of work Criterion: In determining whether a privilege is a
5. Upon request of the concerned EEs, the ER shall facility, the criterion is not so much its kind but its
issue a record of payment of wages, benefits and PURPOSE [Millares v. NLRC & PICOP, G.R. No.
deductions for a particular period 122827 (1999)]
6. There shall be no additional expenses and no
diminution of benefits and privileges Facilities are items of expense necessary for the
7. The ER shall assume responsibility in case the laborer’s and his family’s existence and subsistence.
wage protection provisions of law and [States Marine Corp. v. Cebu Seamen's Assoc., Inc., G.R.
regulations are not complied with under the No. L-12444 (1963)]
arrangement
Comparison between Facilities and Supplements
d. Person to Pay [Sec. 5, Rule VIII, Facilities Supplements
Book III, IRR] What it is
Articles or Extra remuneration or
General Rule: Directly to EE services/items of special benefits/articles
expense; EXCLUDES or services/tools of the
Exceptions: tools of the trade pr trade given to or
1. Member of EE’s family → if ER is authorized in articles or service received by laborers over
writing by the EE primarily for the benefit and above their ordinary
2. A 3rd person → if authorized by law (e.g. of the ER earning or wages
insurance companies for premiums, union dues Who benefits
where the right to check-off has been recognized For the benefit of the
For the benefit or
by ER in accordance with a CBA or authorized employee and his family;
convenience of the
in writing by EE concerned) for their existence and
employer
3. Heirs → in case of death of EE, without subsistence
necessity of intestate proceedings Part of the wage?
a. If heirs are of age → they shall execute an Yes No
affidavit attesting to their relationship to the Deductible from wage?
deceased and the fact that they are his heirs Yes – part of the wage so No – independent of the
to the exclusion of others it is deductible wage so not deductible
b. If any of the heirs is a minor → such affidavit Examples
shall be executed in his behalf by his natural Meals, board and
guardian or next of kin. lodging
When the employer engages the services of an
organized group of workers, payment to their leader
cannot be considered a violation of the rule on direct
payment. [Bermiso v. Escano, G.R. No. L-11606 (1959)]

Page 48 of 220
U.P. LAW BOC LABOR STANDARDS
Requirements for deducting value of facilities
Mere availment is not sufficient to allow deductions
from employees’ wages. Before the value of facilities
can be deducted from the employees’ wages, the
following requisites must all be attendant:
a. Proof must be shown that such facilities are
customarily furnished by the trade;
b. The provision of deductible facilities must be
voluntarily accepted in writing by the employee;
and
c. Facilities must be charged at reasonable value.
[SLL International Cable Specialists v. NLRC, G.R.
No. 172161 (2011)]
“Customary” means long-established and constant
practice connoting regularity. [Millares v. NLRC &
PICOP, G.R. No. 122827 (1999)]
Computation
See also A.2.e. facilities vs. supplements
Value of Facilities = Cost of Operation and
maintenance + Adequate depreciation + reasonable
allowance (not more than 5.5% interest on the
depreciated amount of capital invested by the
employer)
If the fair rental value is lower than the computed
value, fair rental value will be used. [Rule VII-A, Sec.
6]
2. Prohibitions Regarding
Wages
a. Interference in disposal of wages [Art. 112]
b. Wage deduction [Art. 113]
c. Requirement to make deposits for loss or damage
[Arts. 114-115]
d. Withholding of wages [Art. 116, ]
e. Deduction to ensure employment [Art. 117]
f. Retaliatory measures [Art. 118]
g. False reporting [Art. 119]
a. Prohibition against Interference
In Disposal of Wages
Art. 112. Non-interference in disposal of wages.
– No employer shall limit or otherwise interfere
with the freedom of any employee to dispose of his
wages. He shall not in any manner force, compel,
or oblige his employees to purchase merchandise,
commodities or other property from any other
person, or otherwise make use of any store or
services of such employer or any other person.
Page 49 of 220
LABOR LAW
b. Prohibition against Wage
Deduction [Art. 113]
General Rule: ER cannot make any deduction from the
wages of his EE
Exceptions:
1. Insurance premiums
2. Union dues
3. Other deductions authorized by law/Secretary of
Labor [e.g. SSS, withholding tax]
4. When the deductions are with written
authorization of the employees for payment to a
third person and the employer agrees to do so,
provided that the latter does not receive any
pecuniary benefit, directly or indirectly, from the
transaction. [Labor Advisory No. 11 (2014)]
If the law prohibits a deduction, the authorization
given by the employee does not validate the
deduction.
In case of Bankruptcy or Liquidation of an ER’s
business [Art. 110]: Workers shall enjoy first
preference as regards their wages and other monetary
claims, any provision of law to the contrary
notwithstanding. Such unpaid wages and monetary
claims shall be paid in full before the claims of the
Government and other creditors may be paid.
Article 110 of the Labor Code has modified Article
2244 of the Civil Code in two respects:
1. firstly, by removing the one year limitation found in
Article 2244, number 2; and
2. secondly, by moving up claims for unpaid wages
of laborers or workers of the Insolvent from
second priority to first priority in the order of
preference established I by Article 2244.
[Republic v. Peralta, G.R. 150537 (1987)]
Note: RA 10142 (FRIA) subsequently amended Art.
2244, CC and Art. 110 by elevating trade-related
claims to 1st priority.
U.P. LAW BOC LABOR STANDARDS
c. Prohibition Against Requirement
to Make Deposits for Loss or
Damage [Art. 114, 115]
Art. 114. Deposits for loss or damage. - No
employer shall require his worker to make deposits
from which deductions shall be made for the
reimbursement of loss of or damage to tools,
materials, or equipment supplied by the employer,
except when the employer is engaged in such
trades, occupations or business where the practice
of making deductions or requiring deposits is a
recognized one, or is necessary or desirable as
determined by the Secretary of Labor and
Employment in appropriate rules and regulations.
Art. 115. Limitations. - No deduction from the
deposits of an employee for the actual amount of
the loss or damage shall be made unless the
employee has been heard thereon, and his
responsibility has been clearly shown.
General Rule: No ER shall require his worker to make
deposits from which deductions shall be made for the
reimbursement of loss of or damage to tools,
materials, or equipment supplied by the employer.
Exception: ER is engaged in such trades, occupations
or business where the practice of making deductions
or requiring deposits is a recognized one, or is
necessary or desirable as determined by the Secretary
of Labor and Employment in appropriate rules and
regulations.
No deduction from the deposits of an EE for the
actual amount of the loss/damage shall be made
unless:
1. There is reasonable opportunity for EE to show
cause why deduction should not be made
2. EE’s responsibility has been clearly shown
3. Amount is fair and reasonable and shall not
exceed the actual loss of damage; and
4. Must not exceed 20% of weekly pay [Art. 115;
Rule VIII, Sec. 11]
Attorney’s fees in any judicial or administrative
proceedings for the recovery of wages shall not
exceed 10% of the amount awarded
Page 50 of 220
LABOR LAW
d. Prohibition Against Withholding
of Wages
Art. 116. Withholding of wages and kickbacks
prohibited. – It shall be unlawful for any person,
directly or indirectly, to withhold any amount from
the wages of a worker or induce him to give up any
part of his wages by force, stealth, intimidation,
threat or by any other means whatsoever without
the worker’s consent.
Exceptions:
1. Deduction is for insurance premiums
2. For union dues
3. Authorized by law/ DOLE Sec
4. Due & demandable debt to ER
e. Prohibition Against Deduction
To Ensure Employment
Art. 117. Deduction to ensure employment. – It
shall be unlawful to make any deduction from the
wages of any employee for the benefit of the
employer or his representative or intermediary as
consideration of a promise of employment or
retention in employment.
f. Prohibition Against Retaliatory
Measures
Art. 118. Retaliatory measures. – It shall be
unlawful for an employer to refuse to pay or reduce
the wages and benefits, discharge or in any manner
discriminate against any employee who has filed
any complaint or instituted any proceeding under
this Title or has testified or is about to testify in
such proceedings.
This covers offenses only under the titled of Wages in
the Labor Code.
g. Prohibition Against False
Reporting
Art. 119. False reporting. – It shall be unlawful for
any person to make any statement, report, or record
filed or kept pursuant to the provisions of this Code
knowing such statement, report or record to be
false in any material respect.
Covers all offenses under the Labor Code
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Standards/Criteria in Wage Fixing

3. Wage Distortion; Concept a. The demand for living wages;
b. Wage adjustment vis-a-vis the consumer price
index;
WAGE ORDER
c. The cost of living and changes or increases
therein;
Wage Order (WO) – an order issued by the Regional
d. The needs of workers and their families;
Tripartite Wages and Productivity Boards (“Regional
e. The need to induce industries to invest in the
Boards”) whenever the conditions in the region so
countryside;
warrant after investigating and studying all pertinent
f. Improvements in standards of living;
facts and based on the standards and criteria
g. The prevailing wage levels;
prescribed by the Labor Code. The Regional Board
h. Fair return of the capital invested and capacity to
proceeds to determine whether to issue the same or
pay of employers;
not [Art. 123, as amended by RA 6727].
i. Effects on employment generation and family
income; and
WO establishes the minimum wage rates to be paid
j. The equitable distribution of income and wealth
by ERs in the region, which shall in no case be lower
along the imperatives of economic and social
than the applicable statutory minimum wage rates
development. [Art. 124, as amended by RA 6727]
[NWPC Rules of Procedure on Minimum Wage
Fixing].
Art. 123, as amended by RA 6727. Wage Order.
– Whenever conditions in the region so warrant,
Sec. 2, Wage Rationalization Act (RA 6727). It
the Regional Board shall investigate and study all
is hereby declared the policy of the State to
pertinent facts; and based on the standards and
rationalize the fixing of minimum wages and to
criteria herein prescribed, shall proceed to
promote productivity-improvement and gain-
determine whether a Wage Order should be issued.
sharing measures to ensure a decent standard of
Any such Wage Order shall take effect after fifteen
living for the workers and their families; to
(15) days from its complete publication in at least
guarantee the rights of labor to its just share in the
one (1) newspaper of general circulation in the
fruits of production; to enhance employment
region.
generation in the countryside through industry
dispersal; and to allow business and industry
In the performance of its wage determining
reasonable returns on investment, expansion and
functions, the Regional Board shall conduct public
growth.
hearings/consultations, giving notices to
employees' and employers' groups, provincial, city
and municipal officials and other interested parties.
Art. 122, as amended by RA 6727. Creation of
Regional Tripartite Wages and Productivity
Any party aggrieved by the Wage Order issued by
Boards. — There is hereby created Regional
the Regional Board may appeal such order to the
Tripartite Wages and Productivity Boards,
Commission within ten (10) calendar days from the
hereinafter referred to as Regional Boards, in all
publication of such order. It shall be mandatory for
regions, including autonomous regions as may be
the Commission to decide such appeal within sixty
established by law. The Commission shall
(60) calendar days from the filing thereof.
determine the offices/headquarters of the
respective Regional Boards.
The filing of the appeal does not stay the order
unless the person appealing such order shall file
"The Regional Boards shall have the following
with the Commission an undertaking with a surety
powers and functions in their respective territorial
or sureties satisfactory to the Commission for the
jurisdiction: xxx (b) To determine and fix minimum
payment to the employees affected by the order of
wage rates applicable in their region, provinces or
the corresponding increase, in the event such order
industries therein and to issue the corresponding
is affirmed."
wage orders, subject to guidelines issued by the
Commission xxx
WO Effectivity: After 15 days from its complete
publication in at least one newspaper of general
circulation. [Art. 123]

Page 51 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Note: Public hearing and publication are mandatory Unpaid benefits serve as the principal basis for
[Cagayan Sugar Milling Co. v. Sec. of Labor, G.R. No. computing the double indemnity [Sec. 2, D.O. No.
128399 (1998)]. 10-98]

Frequency: A WO issued by the Board may not be Wages of apprentices, learners and handicapped
disturbed for a period of 12 months from its workers shall in no case be less than 75% of the
effectivity and no petition for wage increase shall be statutory minimum wage rates [Sec. 10, IRR of RA
entertained during said period. [Rule IV, Sec. 4, 6727]
Revised rules of Procedure on Minimum Wage
Fixing] METHODS OF FIXING
a. Floor Wage Method- fixing a determinate
Exceptions: amount to be added to the prevailing statutory
a. When Congress itself issues a law increasing minimum wage rates (e.g. setting P25 increase for
wages. min. wage rates)
b. Supervening conditions (i.e. extraordinary b. Salary-Ceiling Method- Wage adjustment to be
increases in prices of petroleum products and applied to EEs receiving a certain denominated
basic goods/services. salary or workers being paid more than existing
min. wage (e.g. WO granting P25 increase to
Appeal: Any party aggrieved by the Wage Order those earning up to P250)
issued by the Regional Board may appeal such order
to the Commission within ten (10) calendar days from Floor Wage Salary Ceiling
the publication of such order. It shall be mandatory What it does
for the Commission to decide such appeal within sixty All wages under a certain
(60) calendar days from the filing thereof [Art. 123]. Adds to previous
wage increases to that
minimum wage
wage
Effect of Appeal: Example
General Rule: Does not operate to stay the order All wages under P456
Exception: Party appealing such order shall file with the P456 + P100 = P556 must be increased to
Commission an undertaking with a surety/sureties P556
(surety bond) satisfactory to the Commission for
payment to employees affected by the order of the Wage Distortion/Rectification
corresponding increase in the event such order is A situation where an increase in prescribed wage rates
affirmed [Art. 123]. results in the elimination or severe contraction of
intentional quantitative differences in wage or salary
Grounds for Appeals for Review of WO rates between and among employee groups in an
a. Non-conformity with prescribed guidelines establishment as to effectively obliterate the
and/or procedure distinctions embodied in such wage structure based
b. Questions of law on skills, length of service, or other logical bases of
c. Grave abuse of discretion [Sec. 2, Rule V, differentiation [Art. 124]
Revised Rules of Procedure on Minimum Wage
Fixing] Elements of wage distortion
a. Existing hierarchy of positions with
Double Indemnity Doctrine corresponding salary rates;
Double Indemnity is the payment to a concerned EE b. A significant change in the salary rate of a lower
of the prescribed increase or adjustments in the wage pay class without a concomitant increase in the
rate which was not paid by an ER in an amount salary rate of a higher one (must be caused by a
equivalent to 2x the benefits owing to such employee. wage order) [Philippine Geothermal Inc. v. Chevron,
[Philippine Hoteliers, Inc. v. National Union of G.R. No. 190187 (2018)]
Workers, GR No. 181972 (2009); RA 6727, as c. The elimination of the distinction between the
amended] two levels; and
d. The existence of the distortion in the same region
Unpaid Benefits of the country. [Prubankers Assn. v. Prudential Bank
The prescribed wage rates which the ER failed to pay and Co. , G.R. No. 131247 (1999)]
upon the effectivity of a WO, exclusive of other wage-
related benefits In Prubankers, the Court ruled that distortion does not
arise when a wage order gives employees in one

Page 52 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW

branch of a bank higher compensation than that given
to their counterparts in other regions occupying the
same pay scale, who are not covered by said wage
order. In short, the implementation of wage orders
in one region but not in others does not in itself
necessarily result in wage distortion.
CBA vis-à-vis Wage Orders – CBA creditability
In determining an employee’s regular wage, the
pertinent stipulations in the CBA are controlling,
provided the result is not less than the statutory
requirement [Philippine National Bank v. PEMA, G.R.
No. L-30279 (1982)]

In Bankards Employees' Union v. NLRC [G.R. No. Note: The manner of resolving wage distortion is
140689 (2004)], the Court ruled that wage distortion largely based on the applicable wage order. The
can only exist where the wage adjustment is brought current one for NCR, WO 20, refers to the procedure
about by a wage order, not by management in Art. 124 of the Labor Code
prerogative. If the compulsory mandate under Article
124 to correct "wage distortion" is applied to 4. Non-Diminution of Benefits
voluntary and unilateral increases by the employer in
fixing hiring rates which is inherently a business
General Rule: There is a prohibition against elimination
judgment prerogative, then the hands of the employer
or diminution of benefits [Art. 100]
would be completely tied even in cases where an
increase in wages of a particular group is justified due
No wage order issued by any regional board shall
to a re-evaluation of the high productivity of a
provide for wage rates lower than the statutory
particular group, or as in the present case, the need to
minimum wage rates prescribed by Congress. [Art.
increase the competitiveness of the company’s hiring
127, as amended by RA 6727]
rate.
Requisites
HOW TO RESOLVE [Art. 124]
If the following are met, then the employer cannot
remove or reduce benefits [Vergara Jr. v. Coca-Cola
Organized Establishment
Bottlers Phils, G.R. No. 176985 (2013)]:
a. Employer and the union shall negotiate to correct
a. Ripened company policy: Benefit is founded on a
the distortions.
policy which has ripened into a practice over a
b. Disputes shall be resolved through the grievance
long period
procedure.
b. Practice is consistent and deliberate and
c. If still unresolved, voluntary arbitration.
c. Not due to error in the construction or application
of a doubtful or difficult question of law. [Globe
Grievance Procedure (under the CBA) → if
Mackay Cable v. NLRC, G.R. No. L-74156 (1988)]
unresolved, VOLUNTARY arbitration
d. The diminution or discontinuance is done
unilaterally by the employer.
Unorganized Establishment
a. ERs and Employees shall endeavor to correct
When not applicable: At least one of the requisites is
such distortions.
absent.
b. Disputes shall be settled through the National
a. Mistake in the application of the law [Globe
Conciliation and Mediation Board.
Mackay Cable v. NLRC, supra.]
c. If still unresolved after 10 calendar days of
b. Negotiated benefits [Azucena]
conciliation, it shall be referred to the appropriate
c. Reclassification of Positions – e.g. loss of some
branch of the NLRC – compulsory arbitration
benefits by promotion.
Both the employer and employee cannot use
d. Contingent or Conditional Benefits – the rule
economic weapons.
does not apply to a benefit whose grant depends
d. Employer cannot declare a lock-out; Employee
on the existence of certain conditions, so that the
cannot declare a strike because the law has
benefit is not demandable if those preconditions
provided for a procedure for settling
are absent.
e. The salary or wage differential does not need to
be maintained. [National Federation of Labor v.
Benefits initiated through negotiation between
NLRC, G.R. No. 103586 (1994)]
Employee and Employer, e.g. CBA, can only be
eliminated or diminished bilaterally.
National Conciliation and Mediation Board 🡪 if
unresolved, COMPULSORY arbitration by the
NLRC

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U.P. LAW BOC LABOR STANDARDS
C. Leaves
1. Service Incentive Leave Pay
Coverage
Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive
leave of five days with pay. [Art. 95(a)]
Service Incentive Leave DOES NOT apply to the
following employees:
a. Those of the government and any of its political
subdivisions, including GOCCs;
b. Domestic helpers and persons in the personal
service of another;
c. Managerial employees as defined in Book III of
this Code;
d. Field personnel and other employees whose
performance is unsupervised by the employer
including those who are engaged on task or
contract basis, purely commission basis, or those
who are paid a fixed amount for performing work
irrespective of the time consumed in the
performance thereof;
e. Those who are already enjoying the benefit
herein provided;
f. Those enjoying vacation leave with pay of at least
5 days;
g. Those employed in establishments regularly
employing less than 10 employees. [Sec. 1, Rule
V, Book III, IRR]
Piece-rate employees are entitled to service incentive
leave pay provided that they are supervised. If they
are unsupervised, they are not entitled to SIL. [Labor
Congress of the Phils. v. NLRC, G.R. No. 123938 (1998)]
Teachers of private school on contract basis are
entitled to service incentive leave. [Cebu Institute of
Technology v. Ople, G.R. No. L-58870 (1987)]
The law grants annual SIL of five days to domestic
workers but their SIL shall not be converted to cash
or carried over to succeeding years. [Sec. 5, RA 10361]
Meaning of “1 year of service”
"At least one year service" shall mean service for not
less than 12 months, whether continuous or broken,
reckoned from the date the employee started working,
including authorized absences and paid regular
holidays unless the working days in the establishment
as a matter of practice or policy, or that provided in
the employment contract is less than 12 months, in
which case said period shall be considered as one year.
[Sec. 3, Rule V, Book III, IRR]
Page 54 of 220
LABOR LAW
Arbitration or Administrative Action
The grant of benefit IN EXCESS of that provided
herein shall not be made a subject of arbitration or
any court or administrative action. [Art. 95 (c)]
The cause of action of an entitled employee to claim
his service incentive leave pay accrues from the
moment the employer refuses to remunerate its
monetary equivalent if the employee did not make use
of said leave credits but instead chose to avail of its
commutation (into money). Accordingly, if the
employee wishes to accumulate his leave credits and
opts for its commutation upon his resignation or
separation from employment, his cause of 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 from employment. [Auto Bus Transport v.
NLRC, G.R. No. 156367 (2005)]
Commutable nature of benefit
The service incentive leave shall be commutable to its
money equivalent if not used or exhausted at the end
of the year. [Sec. 5, Rule V, Book III, IRR]
2. Maternity Leave
[Sec. 14-A of RA 1161 (Social Security Law) as
amended by RA 7322 and RA 8282]
Coverage
Every pregnant woman in the private sector, whether
married or unmarried, is entitled to the maternity
leave benefits.
This is applicable to both childbirth and miscarriage.
Requisites
a. Employment: A female employee employed at the
time of delivery, miscarriage or abortion
b. Contribution: who has paid at least 3 monthly
contributions in the 12-month period
immediately preceding the semester of her
childbirth, or miscarriage.
c. Notice: employee notified employer of her
pregnancy and the probable date of her
childbirth, which notice shall be transmitted to
the SSS in accordance with the rules and
regulations it may provide.
Benefit received
A daily maternity benefit equivalent to 100% of her
average daily salary credit for:
a. 60 days for normal delivery
b. 78 days for caesarean delivery
U.P. LAW BOC LABOR STANDARDS
Note: This benefit shall NOT be included in the
computation of 13th month pay as it is granted to an
employee in lieu of wages which is the basis for
computing 13th month.
Only 4 maternity leaves available
The maternity benefits provided under the Social
Security Law shall be paid only for the first four (4)
deliveries or miscarriages
SSS pays for the maternity leave
The employer advances the benefit to the employee
but the SSS shall immediately reimburse the
employer of one hundred percent (100%) of the
amount upon receipt of satisfactory proof of such
payment and legality thereof
Other conditions
a. Employer shall advance the payment subject to
reimbursement by the SSS within 30 days from
filing of leave application.
b. Availment shall be a bar to the recovery of
sickness benefits provided by this Act for the
same period for which daily maternity benefits
have been received.
c. Employee may only avail of benefit for the first
four (4) deliveries or miscarriages.
d. Sanction: That if an employee should give birth
or suffer miscarriage
1. Without the required contributions having
been remitted for her by her ER to the SSS,
or
2. Without the latter having been previously
notified by the ER of time of the pregnancy,
then the employer shall pay to the SSS
damages equivalent to the benefits which
said employee member would otherwise
have been entitled to.
3. Paternity Leave
[RA 8187 (Paternity Leave Act of 1996)]
Coverage and Purpose
Paternity leave is granted to all married male employees
in the private and public sectors, regardless of their
employment status (e.g. probationary, regular,
contractual, project basis). The purpose of this benefit
is to allow the husband to lend support to his wife
during her period of recovery and/or in nursing her
newborn child. [Sec. 3, RA 8187]
Benefit
It shall be for 7 calendar days, with full pay, consisting
of basic salary and mandatory allowances fixed by the
Page 55 of 220
LABOR LAW
Regional Wage Board, if any, provided that his pay
shall not be less than the mandated minimum wage.
[Sec. 2, RA 8187]
It shall apply to the first 4 deliveries of the employee’s
lawful wife with whom he is cohabiting.
Cohabiting means the obligation of the husband and
wife to live together. [Sec. 1, IRR, RA 8187] If the
spouses are not physically living together because of
the workstation or occupation, the male employee is
still entitled to the paternity leave benefit.
Usage of the benefit
Usage of the leave shall be after the delivery, without
prejudice to an employer’s policy of allowing the
employee to avail of the benefit before or during the
delivery, provided that the total number of days shall
not be more than 7 days for each covered delivery.
[Sec. 5, IRR, RA 8187]
Conditions for entitlement [Sec. 3, IRR, RA 8187]
a. He is married;
b. He is an employee at the time of the delivery of
his child
c. He is cohabiting with his spouse at the time that
she gives birth or suffers a miscarriage
d. He has applied for paternity leave with his ER
within a reasonable period of time from the
expected date of delivery by his pregnant spouse,
or within such period as may be provided by
company rules and regulations, or by CBA; and,
e. His wife has given birth or suffered a miscarriage.
Application for paternity leave
See number 4 under conditions for entitlement.
In case of miscarriage, prior application for paternity
leave shall not be required. [Sec. 4, IRR, RA 8187]
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
cumulative. [Sec. 7, IRR, RA 8187]
Crediting of existing benefits
a. If the existing paternity leave benefit under the
CBA, contract, or company policy is greater than
7 calendar days as provided for in RA 8187, the
greater benefit shall prevail.
b. If the existing paternity leave benefit is less than
that provided in RA 8187, the ER shall adjust the
existing benefit to cover the difference. [Sec. 9,
IRR, RA 8187]
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Where a company policy, contract, or CBA provides Conditions for Entitlement

for an emergency or contingency leave without A solo parent employee shall be entitled to the
specific provisions on paternity leave, the ER shall parental leave under the following conditions:
grant to the employee 7 calendar days of paternity a. He/she has rendered at least one (1) year of
leave. [Sec. 9, IRR, RA 8187] service, whether continuous or broken;
b. He/she has notified his/her employer that
4. Solo Parent Leave he/she will avail himself/herself of it, within a
reasonable period of time; and
c. He/she has presented to his/her employer a Solo
[RA 8972 (Solo Parents’ Welfare Act of 2000)]
Parent Identification Card, which may be
obtained from the DSWD office of the city or
Leave benefits granted to a solo parent to enable
municipality where he/she resides. [Sec. 19, Art.
him/her to perform parental duties and
V, IRR, RA 8972]
responsibilities where physical presence is required.
[Sec. 3 (d), RA 8972]
Availment
The parental leave is in addition to leave privileges
Coverage
under existing laws with full pay, consisting of basic
Any solo parent or individual who is left alone with
salary and mandatory allowances. It shall not be more
the responsibility of parenthood due to:
than seven (7) working days every year. [Sec. 8, RA
a. Giving birth as a result of rape or and other
8972]
crimes against chastity even without a final
conviction of the offender: Provided, That the
Grant of Flexible Work Schedule
mother keeps and raises the child;
The employer shall provide for a flexible working
b. Death of spouse;
schedule for solo parents: Provided, That the same
c. Spouse is detained or is serving sentence for a
shall not affect individual and company productivity:
criminal conviction for at least one (1) year;
Provided, further, That any employer may request
d. Physical and/or mental incapacity of spouse as
exemption from the above requirements from the
certified by a public medical practitioner;
DOLE on certain meritorious grounds. [Sec. 6, RA
e. Legal separation or de facto separation from
8972]
spouse for at least one (1) year: Provided, that
he/she is entrusted with the custody of the
Protection against Work Discrimination
children;
No employer shall discriminate against any solo
f. Declaration of nullity or annulment of marriage
parent employee with respect to terms and conditions
as decreed by a court or by a church: Provided,
of employment on account of his/her status. [Sec. 7,
that he/she is entrusted with the custody of the
RA 8972]
children;
g. Abandonment of spouse for at least one (1) year;
Termination of the Benefit
h. Unmarried father/mother who has preferred to
A change in the status or circumstance of the parent
keep and rear his/her child/children, instead of
claiming the benefit under the law, such that he/she
having others care for them or give them up to a
is no longer left alone with the responsibility of
welfare institution;
parenthood, shall terminate his/her eligibility for
i. Any other person who solely provides parental
these benefits. [Sec. 3 (a), RA 8972]
care and support to a child or children: Provided,
that he/she is duly licensed as a foster parent by
the Department of Social Welfare and 5. Leave benefits for women
Development (DSWD) or duly appointed legal
guardian by the court; and
workers under RA 9710 and
j. Any family member who assumes the RA 9262
responsibility of head of family as a result of the
death, abandonment, disappearance, or [RA 9710 (The Magna Carta of Women); DOLE
prolonged absence of the parents or solo parent D.O. No. 112, Series of 2011 as amended by D.O.
for at least one (1) year. [Sec. 3 (a), RA 8972] No. 112-A Series of 2012]

Page 56 of 220
U.P. LAW BOC LABOR STANDARDS
a. Under RA 9710 (Magna Carta for
Women)
Gynecological leave
A female employee’s leave entitlement of two (2)
months with full pay from her employer based on her
gross monthly compensation following surgery
caused by gynecological disorders, provided that she
has rendered continuous aggregate employment
service of at least six (6) months for the last 12
months.
Gynecological Disorders
Disorders that would require surgical procedures such
as, but not limited to, dilatation and curettage and
those involving female reproductive organs such as
the vagina, cervix, uterus, fallopian tubes, ovaries,
breast, adnexa and pelvic floor, as certified by a
competent physician. It shall also include
hysterectomy, ovariectomy, and mastectomy.
Gross Monthly Compensation
The monthly basic pay plus mandatory allowances
fixed by the regional wage boards. [Sec. 7, Rule II,
IRR, RA 9710]
Basic Requirement
The woman employee should have been with the
company for 12 months prior to surgery. An
aggregate service of at least six (6) months within the
said 12-month period is sufficient to entitle her to
avail of the special leave benefit.
Employment service includes absences with pay such
as use of other mandated leaves, company-granted
leaves and maternity leaves
Competent Physician
A medical doctor preferably specializing in
gynecological disorders or is in the position to
determine the period of recuperation of the woman
employee. [Sec. 1, D.O. No. 112, as amended]
Conditions for Entitlement
Any female employee, regardless of age and civil
status, shall be entitled to a special leave benefit,
provided she has complied with the following
conditions:
a. She has rendered at least 6 months continuous
aggregate employment service for the last 12
months prior to surgery;
b. She has filed an application for special leave
c. She has undergone surgery due to gynecological
disorders as certified by a competent physician.
[Sec. 2, D.O. No. 112]
Page 57 of 220
LABOR LAW
Application for Special Leave
Application before surgery
The employee shall file her application for 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
by CBA.
Application after surgery
Prior application for leave shall not be necessary in
cases requiring emergency surgical procedure,
provided that the employer shall be notified verbally
or in written form within a reasonable period of time
and provided further that after the surgery or
appropriate recuperating period, the female employee
shall immediately file her application using the
prescribed form. [Sec. 3, D.O. No. 112]
Period of Entitlement
The 2 months special leave is the maximum period of
leave with pay that a woman employee may avail of
under RA 9710.
For purposes of determining the period of leave with
pay that will be allowed to a female employee, the
certification of a competent physician as to the
required period of recuperation shall be controlling.
[Sec. 4, D.O. No. 112, as amended]
Availment
The special leave shall be granted to the qualified
employee after she has undergone surgery. [Sec. 5,
D.O. No. 112, as amended]
Frequency of Availment
A woman employee can avail of the SLB for every
instance of surgery due to gynecological disorder for
a maximum total period of 2 months per year. [Sec. 6,
D.O. No. 112, as amended]
Special Leave Benefit vis-à-vis SSS Sickness
Benefit
The SLB is different from the SSS sickness benefit.
The former is granted by the employer in accordance
with RA 9710.
It is granted to a woman employee who has
undergone surgery due to gynecological disorder. The
SSS sickness benefit, on the other hand, is
administered and given by the SSS in accordance with
RA 1161 as amended by RA 8282. [Sec. 7, D.O. No.
112, as amended]
U.P. LAW BOC LABOR STANDARDS
Special Leave Benefit vis-à-vis Existing Statutory
Leaves
The SLB cannot be taken from existing statutory
leaves (i.e. 5-day SIL, leave for victims of VAWC,
Parental leave for solo parents). The grant of SLB
under the law is in recognition of the fact that patients
with gynecological disorder needing surgery require a
longer period of recovery. The benefit is considered
an addition to the leave benefits granted under
existing laws and should be added on top of said
statutory leave entitlements.
If the SLB has already been exhausted, the company
leave and other mandated leave benefits may be
availed of by the woman employee. [Sec. 8, D.O. No.
112, as amended]
Special Leave Benefit vis-à-vis Maternity Leave
Benefit
Where the woman employee had undergone surgery
due to gynecological disorder during her maternity
leave, she is entitled only to the difference between
the SLB and maternity leave benefit. [Sec. 9, D.O. No.
112, as amended]
Crediting of Existing or Similar Benefits
If there are existing or similar benefits under a
company policy, practice or CBA providing similar or
equal benefits to what is mandated by law, the same
shall be considered as compliance, unless the
company policy, practice or CBA provides otherwise.
In the event the company policy, practice or CBA
provides lesser benefits, the company shall grant the
difference.
More liberal existing or similar benefits cannot be
withdrawn or reduced by reason of this law. The term
“similar or equal benefits” refers to leave benefits
which are of the same nature and purpose as that of
the SLB. [Sec. 10, D.O. No. 112, as amended]
Mode of Payment
The SLB is a leave privilege. The woman employee
shall not report for work for the duration of the leave
but she will still receive her salary covering said
period. The employer, in its discretion, may allow said
employee to receive her pay for the period covered by
the approved leave before or during the surgery. The
computation of her “pay” shall be based on her
prevailing salary at the time of the surgery. [Sec. 11,
D.O. No. 112, as amended]
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LABOR LAW
Non-Commutation of the Benefit
The SLB shall be non-cumulative and non-
convertible to cash unless otherwise provided by a
CBA. [Sec. 12, D.O. No. 112, as amended]
b. Under RA 9262 (VAWC)
Victim Leave
Victims of any of the acts covered by VAWC shall be
entitled to take a paid leave of absence up to ten (10)
days in addition to other paid leaves under the Labor
Code and Civil Service Rules and Regulations,
extendible when the necessity arises as specified in the
protection order [Sec. 43, RA 9262]
Acts covered by VAWC
“Physical violence” - refers to acts that include bodily
or physical harm
1. “Sexual violence” - refers to an act which is
sexual in nature, committed against a woman or
her child.
2. “Psychological violence” - acts or omissions
causing or likely to cause mental or emotional
suffering of the victim
3. “Economic abuse” - acts that make or attempt to
make a woman financially dependent
Note: To fall under VAWC, the offender must have
had a sexual or dating relationship with the offended
woman
When availed of
At any time during the application of any protection
order, investigation, prosecution and/or trial of the
criminal case [Sec. 42, Rule VI, IRR]
Requirement
In order to be entitled to the leave benefit, the only
requirement is for the victim-employee to present to
her employer a certification from the barangay
chairman (Punong Barangay) or barangay councilor
(barangay kagawad) or prosecutor or the Clerk of
Court, as the case may be, that an action relative to
the matter is pending [Sec. 42, Rule VI, IRR].
The usage of the ten-day leave shall be at the option
of the woman employee. In the event that the leave
benefit is not availed of, it shall not be convertible into
cash and shall not be cumulative [Sec. 42, Rule VI,
IRR].
U.P. LAW BOC LABOR STANDARDS LABOR LAW

When denied; employer’s liability

The employer/agency head who denies the
application for leave, and who shall prejudice the
D. Special Groups of
victim-survivor or any person for assisting a co-
employee who is a victim-survivor under the Act shall
Employees
be held liable for discrimination and violation of R.A
9262 [Sec. 42, Rule VI, IRR]. 1. Women

Sec. 14, Art. II, 1987 Constitution. The State

recognizes the role of women in nation-building,
and shall ensure the fundamental equality before
the law of women and men.

Sec. 14, Art. XIII, 1987 Constitution. 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.

Sec. 1, Rule XII, Book III, IRR. General

Statement on Coverage. – This Rule shall apply
to all employers, whether operating for profit or
not, including educational, religious and charitable
institutions, except to the Government and to
government-owned or controlled corporations and
to employers of household helpers and persons in
their personal service insofar as such workers are
concerned.

a. Discrimination

Art. 133. Discrimination prohibited. – It shall be

unlawful for any employer to discriminate against
any woman employee with respect to terms and
conditions of employment solely on account of her
sex.

The following are acts of discrimination:

(a) Payment of a lesser compensation, including
wage, salary or other form of remuneration and
fringe benefits, to a female employees as
against a male employee, for work of equal
value; and
(b) Favoring a male employee over a female
employee with respect to promotion, training
opportunities, study and scholarship grants
solely on account of their sexes.

Page 59 of 220
U.P. LAW BOC LABOR STANDARDS
Par. 2, Sec. 2, Magna Carta of Women. – The
State condemns discrimination against women in
all its forms and pursues by all appropriate means
and without delay the policy of eliminating
discrimination against women in keeping with the
Convention on the Elimination of All Forms of
Discrimination Against Women (CEDAW) and
other international instruments consistent with
Philippine law. The State shall accord women the
rights, protection, and opportunities available to
every member of society.
Sec. 12, Magna Carta of Women. Equal
Treatment Before the Law. - The State shall take
steps to review and, when necessary, amend and/or
repeal existing laws that are discriminatory to
women within three (3) years from the effectivity
of this Act.
b. Stipulation Against Marriage
[Art. 134; Sec. 13(e), Rule XII]
It shall be unlawful for an employer to:
1. require as a condition of employment or
continuation of employment that a woman
employee shall not get married, or
2. stipulate expressly or tacitly that upon getting
married a woman employee shall be deemed
resigned or separated or
3. actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely
by reason of her marriage. [Art. 134] [Duncan
Assoc of Detailman – PTGWO v. Glaxo Wellcome,
G.R. No. 162994 (2004)]
With particular regard to women, Republic Act No.
9710 or the Magna Carta of Women protects women
against discrimination in all matters relating to
marriage and family relations, including the right to
choose freely a spouse and to enter into marriage only
with their free and full consent. Weighed against these
safeguards, it becomes apparent that Brent's
(employer) condition is coercive, oppressive and
discriminatory. There is no rhyme or reason for it. It
forces Cadiz to marry for economic reasons and
deprives her of the freedom to choose her status,
which is a privilege that inheres in her as an intangible
and inalienable right. While a marriage or no-marriage
qualification may be justified as a "bona fide
occupational qualification," Brent must prove two
factors necessitating its imposition, viz: (1) that the
employment qualification is reasonably related to the
essential operation of the job involved; and (2) that
there is a factual basis for believing that all or
Page 60 of 220
LABOR LAW
substantially all persons meeting the qualification
would be unable to properly perform the duties of the
job. Brent has not shown the presence of neither of
these factors. Perforce, the Court cannot uphold the
validity of said condition [Capin-Cadiz v. Brent Hospital
and Colleges, Inc., G.R. No. 187417 (2016)].
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 purpose, an ER may discriminate against an
EE based in the identity of the EE’s spouse. [Star
Paper Corp. v. Simbol, G.R. No. 164774 2006]
The Court sustained the validity of employer policy
prohibiting an employee from having a personal or
marital relationship with an employee of a competitor.
The prohibition was reasonable under the
circumstances because relationships of such nature
might compromise the interests of the company.
[Duncan Association of Detailmen v. Glaxo Wellcome,
supra.]
c. Prohibited Acts [Art. 135]
1. Discharge to prevent enjoyment of benefits.
To deny any woman employee the benefits
provided for in this Chapter or to discharge any
woman employed by him for the purpose of
preventing her from enjoying any of the benefits
provided under this Code. [Art. 135 (1)]
2. Discharge on account of pregnancy.
To discharge such woman on account of her
pregnancy, while on leave or in confinement due
to her pregnancy. [Art. 135 (2)]
3. Discharge or refusal the admission of work
To discharge or refuse the admission of such
woman upon returning to her work for fear that
she may again be pregnant. [Art. 137 (3)]
4. Discharge on account of testimony
To discharge any woman or child or any other
employee for having filed a complaint or having
testified or being about to testify under the Code
[Sec. 13 (d), Rule XII, Book III, IRR]
5. Expulsion of Women faculty/female student
due to pregnancy outside of marriage
Expulsion and non-readmission of women
faculty due to pregnancy outside of marriage shall
be outlawed. No school shall turn out or refuse
admission to a female student solely on the
U.P. LAW BOC LABOR STANDARDS
account of her having contracted pregnancy
outside of marriage during her term in school.
[Sec. 13(c), RA 9710]
d. Sexual Harassment
[RA 7877 - Anti-Sexual Harassment Act of 1995]
Sec. 3, RA 7877. Work, Education or Training -
Related, Sexual Harassment Defined. – Work,
education or training-related sexual harassment is
committed by an employer, employee, manager,
supervisor, agent of the employer, teacher,
instructor, professor, coach, trainor, or any
other person who, having authority, influence or
moral ascendancy over another in a work or
training or education environment, demands,
requests or otherwise requires any sexual
favor from the other, regardless of whether the
demand, request or requirement for submission is
accepted by the object of said Act.
Forms of Sexual Harassment
1. Employment or Work Related
a. The sexual favor is made as a condition
i. in the hiring or in the employment, re-
employment or continued employment
of said individual or
ii. in granting said individual favorable
compensation, terms, conditions,
promotions, or privileges, or
iii. in the refusal to grant the sexual favor
results in limiting, segregating or
classifying the EE which in any way
would discriminate, deprive or diminish
employment opportunities or otherwise
adversely affect said employee;
b. The above acts would either:
i. impair the employee’s rights or privileges
under existing labor laws; or
ii. result in an intimidating, hostile, or
offensive environment for the employee.
2. Education or Training environment. In an
education or training environment, sexual
harassment is committed:
a. Against one who is under the care, custody
or supervision of the offender
b. Against one whose education, training,
apprenticeship or tutorship is entrusted to
the offender;
c. When the sexual favor is made a condition
to the giving of a passing grade, or the
granting of honors and scholarships, or the
Page 61 of 220
LABOR LAW
payment of a stipend, allowance or other
benefits, privileges, or considerations; or
d. When the sexual advances result in an
intimidating, hostile or offensive
environment for the result, trainee or
apprentice.
Persons who may be liable
1. Any employer, employee, manager, supervisor,
agent of the employer, teacher, instructor,
professor, coach, trainer or any other person,
regardless of whether the demand, request for
requirement for submission is accepted by the
object of said act having authority, influence
or moral ascendancy over another in a work or
training or education environment, who
demands, requests or otherwise requires any
sexual favor from another,
2. Any person who directs or induces another to
commit any act of sexual harassment as herein
defined. OR
3. Any person who cooperates in the commission
by another without which it would NOT have
been committed, shall also be held liable under
this Act [Sec. 3, RA 7877]
It is not necessary that the demand, request or
requirement of a sexual favor be articulated in a
categorical oral or written statement. It may be
discerned, with equal certitude, from the acts of the
offender. [Domingo v. Rayala, G.R. No. 155831 (2008)]
Role of the employer or Head of Office
Sec. 4, RA 7877. – The Employer or Head of
Office shall have the duty:
1. to prevent the commission of such acts and
2. to lay down the procedure for the resolution,
settlement or prosecution of committed acts.
Sec. 5, RA 7877. – He shall be solidarily liable for
damages:
1. if he is informed of such acts by the offended
party and
2. no immediate action is taken thereon.
Independent Action for Damages
Sec. 6, RA 7877. – The victim of work, education
or training-related sexual harassment can institute a
separate and independent action for damages and
other affirmative relief.
U.P. LAW BOC LABOR STANDARDS
Sanctions
Criminal: imprisonment of 1 month to mos. Or fine
of P10k to P20k or both
Prescription of such action is in 3 years.
Termination
As a managerial employee, petitioner is bound by
more exacting work ethics. When such moral
perversity is perpetuated against his subordinate, he
provides a justifiable ground for his dismissal for lack
of trust and confidence. It is the right, nay the duty
of every employer to protect its employees from
oversexed superiors. [Sec. 7, RA 7877] [Libres v.
NLRC, G.R. No. 1237371999]
The gravamen of the offense in sexual harassment is
not the violation of the employee's sexuality but the
abuse of power by the employer. Any employee, male
or female, may rightfully cry "foul" provided the claim
is well substantiated. Strictly speaking, there is no time
period within which he or she is expected to complain
through the proper channels. The time to do so may
vary depending upon the needs, circumstances, and
more importantly, the emotional threshold of the
employee.
Not many women are made of the stuff that can
endure the agony and trauma of a public, even
corporate, scandal. If petitioner-corporation had not
issued the third memorandum that terminated the
services of private respondent, we could only
speculate how much longer she would keep her
silence. Perhaps, to private respondent's mind, for as
long as she could outwit her employer's ploys she
would continue on her job and consider them as mere
occupational hazards. [Phil. Aelous Automotive United
Corp. v. NLRC, G.R. No. 124617 (2000)]
2. Minors
Relevant Laws: RA 7610 (Special Protection of
Children Against Abuse, Exploitation and
Discrimination Act), RA 9231 (Special Protection of
Children Against Child Abuse, Exploitation and
Discrimination Act), Art. 137(a)
Constitutional basis
The State recognizes the vital role of the youth in
nation-building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-
being. It shall inculcate in the youth patriotism and
nationalism, and encourage their involvement in
public and civic affairs. [Sec. 13, Art. II, 1987
Constitution]
Page 62 of 220
LABOR LAW
General Rule: Children below 15 shall NOT be
employed.
Exception (Employment of Children )
Children below fifteen (15) years of age shall not be
employed except:
a. When a child works directly under the sole
responsibility of his/her parents or legal guardian
and where only members of his/her family are
employed: Provided, however, That his/her
employment neither endangers his/her life,
safety, health, and morals, nor impairs his/her
normal development: Provided, further, That the
parent or legal guardian shall provide the said
child with the prescribed primary and/or
secondary education; or
b. Where a child's employment or participation in
public entertainment or information through
cinema, theater, radio, television or other forms
of media is essential: Provided, That the
employment contract is concluded by the child's
parents or legal guardian, with the express
agreement of the child concerned, if possible, and
the approval of the Department of Labor and
Employment: Provided, further, That the
following requirements in all instances are strictly
complied with:
1. The employer shall ensure the protection,
health, safety, morals and normal
development of the child;
2. The employer shall institute measures to
prevent the child's exploitation or
discrimination taking into account the
system and level of remuneration, and the
duration and arrangement of working time;
and
3. The employer shall formulate and
implement, subject to the approval and
supervision of competent authorities, a
continuing program for training and skills
acquisition of the child.
In the above-exceptional cases where any such child
may be employed, the employer shall first secure,
before engaging such child, a work permit from the
Department of Labor and Employment which shall
ensure observance of the above requirements.
For purposes of this Article, the term "child" shall
apply to all persons under eighteen (18) years of age.
[Sec 2, RA 9231]
U.P. LAW BOC LABOR STANDARDS
Children - refers to any person under 18 years of age
or those over but are unable to fully take care of
themselves or protect themselves from abuse, neglect,
cruelty, exploitation or discrimination because of a
physical or mental disability or condition. [Sec. 2, RA
7610]
Child labor - refers to any work or economic activity
performed by a child that subjects him/her to any
form of exploitation or is harmful to his/her health
and safety or physical, mental or psychosocial
development.
Working child - refers to any child engaged as
follows:
a. when the child is below eighteen (18) years of age,
in work or economic activity that is not child
labor as defined in the immediately preceding
subparagraph; and
b. when the child is below fifteen (15) years of age,
in work where he/she is directly under the
responsibility of his/her parents or legal guardian
and where only members of the child‘s family are
employed; or in public entertainment or
information. [Sec. 3, D.O. No. 65-04]
Exceptions
a. Child works directly under the sole responsibility
of his parents or legal guardian and where only
members of the employer’s family are employed,
provided:
1. his employment does NOT endanger his life,
safety, health and morals,
2. nor impairs his normal development, and
3. the parent or legal guardian shall provide the
said minor child with the prescribed primary
and/or secondary education; [Sec. 12 of RA
7610, as amended by RA 7658]
b. Child’s employment or participation in public
entertainment or information through cinema,
theater, radio or television is essential, provided
that [Sec. 12 of RA 7610, as amended by RA
7658]:
1. employment does NOT involve ads or
commercials promoting alcohol, tobacco
and its by-products or violence [Sec. 14, RA
7610]
2. the employment contract is concluded by the
child’s parents or guardian, and approved by
DOLE
3. The ER shall ensure the protection, health,
safety and morals of the child
4. The ER shall institute measures to prevent
the child’s exploitation or discrimination
taking into account the system and level of
remuneration, and the duration and
arrangement of working time
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LABOR LAW
5. The ER shall formulate and implement,
subject to the approval and supervision of
competent authorities, a continuing program
for training and skills acquisition of the child.
[Sec. 12 of RA 7610, as amended by RA
7658]
Employment of Children from 15 to 18
Employment is allowed even without permit but
restricted to non-hazardous work.
Non-hazardous work shall mean any work or
activity in which the EE is not exposed to any risk
which constitutes an imminent danger to his safety
and health. [Sec. 3, Rule XII, Book III, IRR]
The Secretary of Labor shall from time to time
publish a list of hazardous work and activities in
which persons 18 years of age and below cannot be
employed [Sec. 3, Rule XII, Book III, IRR]
The following are HAZARDOUS workplaces:
DO 149-16 as amended by DO 149-A-17, Sec. 6
Worst Forms of Child Labor
a. All forms of slavery, as defined under the "Anti-
trafficking in Persons Act of 2003", or practices
similar to slavery such as sale and trafficking of
children, debt bondage and serfdom and forced
or compulsory labor, including recruitment of
children for use in armed conflict; or
b. The use, procuring, offering or exposing of a
child for prostitution, for the production of
pornography or for pornographic performances;
or
c. The use, procuring or offering of a child for
illegal or illicit activities, including the production
and trafficking of dangerous drugs and volatile
substances prohibited under existing laws; or
d. 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, such that it:
1. Debases, degrades or demeans the intrinsic
worth and dignity of a child as a human
being; or
2. Exposes the child to physical, emotional or
sexual abuse, or is found to be highly
stressful psychologically or may prejudice
morals; or
3. Is performed underground, underwater or at
dangerous heights; or
4. Involves the use of dangerous machinery,
equipment and tools such as power-driven
or explosive power-actuated tools; or
5. Exposes the child to physical danger such as,
but not limited to the dangerous feats of
U.P. LAW BOC LABOR STANDARDS LABOR LAW

balancing, physical strength or contortion, or Domestic worker or “Kasambahay” - Refers to

which requires the manual transport of any person engaged in domestic work within an
heavy loads; or employment relationship such as, but not limited to,
6. Is performed in an unhealthy environment the following: general househelp, nursemaid or
exposing the child to hazardous working “yaya”, cook, gardener, or laundry person. [Sec 4(d),
conditions, elements, substances, co-agents RA 10361]
or processes involving ionizing, radiation,
fire, flammable substances, noxious The term domestic worker or “kasambahay” excludes
components and the like, or to extreme any person who performs domestic work only
temperatures, noise levels, or vibrations; or occasionally or sporadically and not on an
7. Is performed under particularly difficult occupational basis. [Sec.4(d), RA 10361]
conditions; or
8. Exposes the child to biological agents such Note: IRR, Sec. 2 does not include family drivers. See previous
as bacteria, fungi, viruses, protozoans, discussion on domestic workers. See also discussion under III.
nematodes and other parasites; or A. 1. e. Domestic workers.
9. Involves the manufacture or handling of
explosives and other pyrotechnic products Minimum wage
[Sec. 12-D, RA 9231 as amended].
Sec. 24, RA 10361. Minimum Wage. – The
minimum wage of domestic workers shall not be
Working Hours of a Child
less than the following:
(a) P2,500 a month for those employed in NCR
Quantity
(b) P2,000 a month for those employed in
Age Bracket Daily Max Weekly Max chartered cities and first class municipalities
Below 15 y 4 hrs 20 hrs (c) P1,500 a month for those employed in other
15 to below 18 8hrs. 40 hrs municipalities
Night work prohibition Within one year from the effectivity of the Act, and
Age Bracket Prohibited Hours periodically thereafter, the Regional Tripartite and
Below 15 y 8 pm to 6 am (10 hrs.) Productivity Wage Boards shall review, and if
15 to below 18 10 pm to 6 am (8 hrs.) proper, determine and adjust the minimum wage
rates of domestic workers.
Discrimination
No employer shall discriminate against any person in
respect to terms and conditions of employment on Standard of Treatment
account of his age. [Art. 138] The employer or any member of the household shall
not subject a domestic worker or “kasambahay” to
any kind of abuse nor inflict any form of physical
3. Kasambahay violence or harassment or any act tending to degrade
the dignity of a domestic worker. [Sec. 5, RA 10361]
EMPLOYMENT OF HOUSEHELPERS
Relevant Law: RA 10361 (Batas Kasambahay or Board, Lodging and Medical Attendance
Domestic Worker’s Act) The employer shall provide for the basic necessities
of the domestic worker to include at least three (3)
Note: RA 10361 has expressly repealed Chapter III, adequate meals a day and humane sleeping
“Employment of Househelpers”, Title III, Book III arrangements that ensure safety and shall provide
of the Labor Code appropriate rest and assistance to the domestic
worker in case of illnesses and injuries sustained
Domestic work - This refers to work performed in during service without loss of benefits. [Sec. 6, RA
or for a household or households. [Sec 4(c)., RA 10361]
10361]
Privacy
Household - refers to the immediate members of the Respect for the privacy of the domestic worker shall
family or the occupants of the house that are directly be guaranteed at all times and shall extend to all forms
provided services by the domestic worker. [Sec 4(f), of communication and personal effects [Sec. 7, RA
RA 10361] 10361]

Page 64 of 220
U.P. LAW BOC LABOR STANDARDS
Access to Outside Communication
The employer shall grant the domestic worker access
to outside communication during free
time: Provided, That in case of emergency, access to
communication shall be granted even during work
time. [Sec. 8, RA 10361]
Education and Training
The employer shall afford the domestic worker the
opportunity to finish basic education and may allow
access to alternative learning systems and, as far as
practicable, higher education or technical and
vocational training. [Sec. 9, RA 10361]
Social and Other Benefits
A domestic worker who has rendered at least one (1)
month of service shall be covered by the Social
Security System (SSS), the Philippine Health
Insurance Corporation (PhilHealth), and the Home
Development Mutual Fund or Pag-IBIG, and shall be
entitled to all the benefits in accordance with the
pertinent provisions provided by law.
Leave Benefits
A 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 [Sec. 29, RA
10361]
Rest Periods
Daily Rest Period: 8 hours
Weekly Rest Period: at least 24 consecutive hours. The
employer and employee may agree to:
a. Offsetting a day of absence with a particular rest
day;
b. Waiving a particular rest day in return for an
equivalent daily rate of pay;
c. Accumulating rest days not exceeding five (5)
days; or
d. Other similar arrangements. [Sec. 20,21, RA
10361]
Pre-Employment Requirement
Prior to the execution of the employment contract,
the employer may require the following from the
domestic worker:
a. Medical certificate or a health certificate issued by
a local government health officer;
b. Barangay and police clearance;
c. National Bureau of Investigation (NBI)
clearance; and
d. 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.
Page 65 of 220
LABOR LAW
However, Sec. 12(a), (b), (c) and (d) shall be standard
requirements when the employment of the domestic
worker is facilitated through the PEA.
The cost of the foregoing shall be borne by the
prospective employer or agency, as the case may be.
[Sec. 12, RA 10361]
Pre-Employment Prohibition
Regardless of whether the domestic worker was hired
through a private employment agency or a third party,
no share in the recruitment or finder’s fees shall be
charged against the domestic worker by the said
private employment agency or third party. [Sec. 13,
RA 10361]
It is unlawful for the employer or any other person to
require a domestic worker to make deposits from
which deductions shall be made for the
reimbursement of loss or damage to tools, materials,
furniture and equipment in the household. [Sec. 14,
RA 10361]
It shall be unlawful for the employer or any person
acting on behalf of the employer to place the domestic
worker under debt bondage. [Sec. 15, RA 10361]
Time and Manner of Payment
Payment of wages shall be made on time directly to
the domestic worker in cash at least once a month and
unless allowed by the domestic worker through a
written consent, employer shall make no deductions
from the wages other than that which is mandated by
law. No employer shall pay the wages of a domestic
worker by means of promissory notes, vouchers,
coupons, tokens, tickets, chits, or any object other
than the cash wage as provided for under this Act.
[Sec. 25, RA 10361]
Payslip
The employer shall at all times provide the domestic
worker with a copy of the pay slip containing the
amount paid in cash every pay day, and indicating all
deductions made, if any. The copies of the pay slip
shall be kept by the employer for a period of three (3)
years. [Sec. 26, RA 10361]
Wage Prohibitions
It shall be unlawful for the original employer to
charge any amount from the said household where
the service of the domestic worker was temporarily
performed. [Sec. 23, RA 10361]
Other than that which is mandated by law, the
employer shall make no deductions from the wages
unless allowed by the domestic worker through a
written consent. [Sec. 25, RA 10361]
U.P. LAW BOC LABOR STANDARDS
Other Prohibited Acts
a. Interference in employee’s wage disposal [Sec.
27, RA 10361]
b. Direct or indirect withholding of wages by the
employer [Sec. 28, RA 10361]
c. Payment in forms other than cash [Sec. 25, RA
10361]
Right against assignment to non-household work
at a wage rate lower than that mandated for
agricultural or non-agricultural enterprises depending
on the case. [Sec. 22, RA 10361]
Employment Age of Domestic Workers: Unlawful
to employ any person below fifteen (15) years of age
as a domestic worker [Sec. 16, RA 10361]
Persons between 15-18 years old should only be
employed in non-hazardous work. [D.O. No. 4-99
Sec. 4]
Daily Rest Period: Aggregate of eight (8) hours per
day. [Sec. 20, RA 10361]
Employment Certification: ER shall give the
househelper a written statement of the nature and
duration of the service and his or her work
performance as househelper upon severance. [Sec. 35,
RA 10361]
Termination
a. Initiated by the domestic worker
The domestic worker may terminate the
employment relationship at any time before the
expiration of the employment contract for any of
the following causes:
1. Verbal or emotional abuse of the domestic
worker by the employer or any member of
the household;
2. Inhuman treatment including physical abuse
of the domestic worker by the employer or
any member of the household;
3. Commission of a crime or offense against
the domestic worker by the employer or any
member of the household;
4. Violation by the employer of the terms and
conditions of the employment contract and
other standards set forth under this law;
5. Any disease prejudicial to the health of the
domestic worker, the employer, or
member/s of the household; and
6. Other causes analogous to the foregoing.
[Sec. 33, RA 10361]
Page 66 of 220
LABOR LAW
b. Initiated by the employer
An employer may terminate the services of the
domestic worker at any time before the
expiration of the contract, for any of the
following causes:
1. Misconduct or willful disobedience by the
domestic worker of the lawful order of the
employer in connection with the former’s
work;
2. Gross or habitual neglect or inefficiency by
the domestic worker in the performance of
duties;
3. Fraud or willful breach of the trust reposed
by the employer on the domestic worker;
4. Commission of a crime or offense by the
domestic worker against the person of the
employer or any immediate member of the
employer’s family;
5. Violation by the domestic worker of the
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
member/s of the household; and
7. Other causes analogous to the foregoing.
[Sec. 34, RA 10361]
Employment Certification
Upon the severance of the employment relationship,
the employer shall issue the domestic worker within
five (5) days from request a certificate of employment
indicating the nature, duration of the service and work
performance [Sec. 35, RA 10361].
Unjust dismissal
Neither the domestic worker nor the employer may
terminate the contract before the expiration of the
term except for grounds provided in Secs. 33 and 34
of RA 10361.
If the domestic worker is unjustly dismissed, the
domestic worker shall be paid the compensation
already earned plus the equivalent of 15 days work by
way of indemnity [Sec. 32, RA 10361].
Leaving without justifiable reason by the
domestic worker
a. any unpaid salary due not exceeding the
equivalent 15 days work shall be forfeited AND
b. the employer may recover from the domestic
worker the costs incurred related to the
deployment expenses, if any: Provided, that the
service has been terminated within 6 months
from the domestic worker’s employment [Sec.
32, RA 10361].
U.P. LAW BOC LABOR STANDARDS
Notice to end the working relationship
If the duration of the domestic service is not
determined either in stipulation or by the nature of
the service, the employer or the domestic worker may
give notice to end the working relationship five (5)
days before the intended termination of the service.
The domestic worker and the employer may mutually
agree upon written notice to pre-terminate the
contract of employment to end the employment
relationship. [Sec. 32, RA 10361]
4. Homeworkers
Note: D.O. No. 5, DOLE (February 4, 1992), is now
Rule XIV, Book III of the IRR.
Industrial homework
a. Is a 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.
b. Decentralized form of production, where there is
ordinarily very little supervision or regulation of
methods of work. [Sec. 2(a), Rule XIV, Book III,
IRR]
Industrial Homeworker - a worker who is engaged
in industrial homework
Employer means any natural or artificial person who
a. Acts as a contractor or subcontractor – delivers
or causes to be delivered any goods, articles, or
materials to be processed or fabricated in or
about a home and thereafter to be returned or to
be disposed of or distributed in accordance with
employer’s direction; OR
b. Sells any goods, articles, or materials to be
processed or fabricated in or about a home and
then rebuys them after. [Art. 153]
Note: Sec. 2(d), Rule XIV, Book III is substantially
similar to the above.
Rights and benefits accorded homeworkers
a. Right to form, join or assist organizations [Sec. 3,
Rule XIV, Book III, IRR]
b. Right to acquire legal personality and the rights
and privileges granted by law to legitimate labor
organizations upon issuance of the certification
of registration [Sec. 4, Rule XIV, Book III, IRR]
c. Immediate payment upon employer’s receipt of
finished goods or articles [Sec. 6, Rule XIV, Book
III, IRR]
Page 67 of 220
LABOR LAW
d. SSS, MEDICARE and ECC premium
contributions shall be deducted from their pay
and shall be remitted by
ER/contractor/subcontractor to the SSS [Sec. 6,
Rule XIV, Book III, IRR]
Liability of Employer
a. Employer may require homeworker to redo work
improperly executed without additional pay [Sec.
9(a), Rule XIV, Book III, IRR]
b. Employer need not pay homeworker for any
work done on goods or articles not returned due
to homeworker’s fault [Sec. 9(b), Rule XIV, Book
III, IRR]
c. If subcontractor/contractor fails to pay
homeworker, employer is jointly and severally
liable with the former to the homeworker for
his/her wage [Sec. 11, Rule XIV, Book III, IRR]
d. Employer shall assist the homeworkers in the
maintenance of basic safe and healthful working
conditions at the homeworkers’ place of work.
[Sec. 11, Rule XIV, Book III, IRR]
Regional Office shall provide technical assistance
to registered homeworkers’ organizations [Sec. 14,
Rule XIV, Book III, IRR of ]
Prohibited Homework
a. explosives, fireworks and articles of like
character;
b. drugs and poisons; and
c. other articles, the processing of which requires
exposure to toxic substances. [Sec. 13, Rule XIV,
Book III, IRR]
Deductions
No deduction from the homeworker’s earnings for
the value of materials lost, destroyed or damaged
unless:
a. Homeworker is clearly shown to be responsible
for loss or damage
b. Reasonable opportunity to be heard
c. Amount of deduction is fair and reasonable, and
does not exceed actual loss or damage
d. Deduction does not exceed 20% of
homeworker’s weekly earnings [Sec. 8, Rule XIV,
Book III, IRR]
5. Night Workers
Night worker
Any employed person whose work requires
performance of a substantial number of hours of
night work which exceed a specified limit. This limit
shall be fixed by the Sec of Labor after consulting the
U.P. LAW BOC LABOR STANDARDS
workers’ representatives/labor organizations and
employers. [Art. 154, as amended by RA 10151]
Any employed person whose work covers the period
from 10 o’clock in the evening to 6 o’clock the
following morning, provided that the worker
performs no less than 7 consecutive hours of work.
[Sec. 2, Rule XV, Book III, Rule XV, Sec. 2, IRR,
through D.O. No. 119-12]
Health Assessment
At the worker’s request, they shall have the right to
undergo a health assessment without charge and to
receive advice on how to reduce or avoid health
problems associated with their work:
a. Before taking up an assignment as a night worker
b. At regular intervals during such an assignment
c. If they experience health problems during such
an assignment
With the exception of a finding of unfitness for night
work, the findings of such assessments shall be
confidential and shall NOT be used to their
detriment, subject, however, to applicable company
policies. [Art. 155, as amended by RA 10151; Sec. 3,
Rule XV, Book III, IRR, through D.O. No. 119-12]
Mandatory Facilities
Mandatory facilities shall be made available for
workers performing night work, which include the
following:
a. Suitable first-aid and emergency facilities
b. Lactation station in required companies pursuant
to RA 10028
c. Separate toilet facilities for men & women
d. Facility for eating w/ potable drinking water;
AND
e. Facilities for transportation and/or properly
ventilated temporary sleeping or resting quarters,
separate for male and female workers, shall be
provided except where any of the ff.
circumstances is present:
1. There is an existing company guideline,
practice or policy, CBA, or any similar
agreement providing for an equivalent or
superior benefit; or
2. Start or end of the night work does NOT fall
within 12 mn - 5 am; or
3. Workplace is located in an area that is
accessible 24 hours to public transportation;
or
4. Number of employees does NOT exceed a
specified number as may be provided for by
the SOLE in subsequent issuances [Art. 156,
as amended by RA 10151; Sec. 4, Rule XV,
Book III, IRR, through D.O. No. 119-12]
Page 68 of 220
LABOR LAW
Transfer
If night worker is unfit for night work due to health
reasons as certified by competent physician, s/he shall
be:
a. Transferred in good faith to a job for which they
are fit to work whenever practicable, which must
be similar and equivalent position;
b. If transfer is not practicable, or workers are
unable to render night work for a continuous
period of not less than 6 months upon
certification of a competent public health
authority, they shall be granted the same benefits
as other workers who are unable to work due to
illness.
c. If workers are certified as temporarily unfit to
render night work for a period of less than 6
months, they shall be given the same protection
against dismissal or notice of dismissal as other
workers who are prevented from working for
health reasons. [Art. 157, as amended by RA
10151; Sec. 5, Rule XV, Book III, IRR, through
D.O. No. 119-12]
Women Night Workers
Employers shall ensure that measures shall be taken
to ensure that an alternative to night work for
pregnant and nursing employees who would
otherwise be called upon to perform such work. Such
measures may include:
a. Transfer to day work – As far as practicable,
pregnant or nursing employees shall be assigned
to day work, before and after childbirth, for a
period of at least sixteen (16) weeks, which shall
be divided between the time before and after
childbirth;
Medical certificate issued by competent physician
(OB/Gyne/Pedia) is necessary for the grant of:
1. additional periods of assignment to day work
during pregnancy or after childbirth,
provided that such shall not be more than 4
weeks or for a longer period as may be
agreed upon by employer and worker;
2. extension of maternity leave; and
3. clearance to render night work.
b. Provision of social security benefits - in accordance with
provisions of Act No 8282 (Social Security Act
of 1997) and other existing company policy or
collective bargaining agreement.
c. Extension of maternity leave – where transfer to day
work is not possible, but requires
recommendation by competent physician;
without pay or using earned leave credits, if any
[Art. 158, , as amended by RA 10151; Sec. 6, Rule
XV, Book III, IRR, through D.O. No. 119-12]
U.P. LAW BOC LABOR STANDARDS
Protection against dismissal and loss of benefits
attached to employment status, seniority, and
access to promotion
Where no alternative work can be provided to a
woman employee who is not in a position to render
night work, she shall be allowed to go on leave or on
extended maternity leave, using her earned leave
credits.
A woman employee shall NOT be dismissed for
reasons of pregnancy, childbirth and childcare
responsibilities as defined under this Rule. She shall
NOT lose the benefits regarding her employment
status, seniority, and access to promotion which may
attach to her regular night work position. [Sec. 8, Rule
XV, Book III, IRR, through D.O. No. 119-12]
See also Night Shift Differential above.
6. Apprentices and Learners
[RA 7796 (Technical Education And Skills
Development Act of 1994 or TESDA Act of 1994)]
a. Apprentices
Policy objectives
1. To help meet the demand of the economy for
trained manpower;
2. To establish a national apprenticeship program
through the participation of employers, workers
and government and non-government agencies;
and
3. To establish apprenticeship standards for the
protection of apprentices.
Definition
1. “Apprenticeship" - training within employment
with compulsory related theoretical instruction
involving a contract between an apprentice and
an employer on an approved apprenticeable
occupation [Sec 4(j), RA 7796]
2. "Apprentice" is a person undergoing training for
an approved apprenticeable occupation during an
apprenticeship agreement [Sec 4(k), RA 7796]
3. "Apprenticeship Agreement" is a contract
wherein a prospective employer binds himself to
train the apprentice who in turn accepts the terms
of training for a recognized apprenticeable
occupation emphasizing the rights, duties and
responsibilities of each party [Sec 4(l), RA 7796]
4. "Apprenticeable Occupation" is an occupation
officially endorsed by a tripartite body and
approved for apprenticeable by the Authority
[Sec 4(m), RA 7716]
Page 69 of 220
LABOR LAW
Who may employ apprentices
Only employers in highly technical industries may
employ apprentices and only in apprenticeable
occupations approved by the SOLE [Art. 60, LC].
The act of filing the proposed apprenticeship
program with the DOLE is a preliminary step towards
its final approval, and does not instantaneously give
rise to an employer-apprentice relationship. It must
be duly approved by the Minister of Labor and
Employment. Hence, since the apprenticeship
agreement between petitioner and respondent has no
force and effect, respondent's assertion that he was
hired not as an apprentice but as a delivery boy
deserves credence. [Nitto Enterprises v. NLRC, G.R.
No. 114337 (1995)]
Qualifications of apprentice
1. Be at least fifteen years of age; provided those
who are at least fifteen years of age but less than
eighteen may be eligible for apprenticeship only
in nonhazardous occupations;
2. Be physically fit for the occupation in which he
desires to be trained;
3. Possess vocational aptitude and capacity for the
particular occupation as established through
appropriate tests; and
4. Possess the ability to comprehend and follow oral
and written instructions.
Trade and industry associations may, however,
recommend to the Secretary of Labor and
Employment appropriate educational qualifications
for apprentices in certain occupations. Such
qualifications, if approved, shall be the educational
requirements for apprenticeship in such occupations
unless waived by an employer in favor of an applicant
who has demonstrated exceptional ability. A
certification explaining briefly the ground for such
waiver, and signed by the person in charge of the
program, shall be attached to the apprenticeship
agreement of the applicant concerned. [Sec. 11, Rule
VI, Book II, IRR]
Requisites for Employment of Apprentices:
1. Employer should be engaged in a business that is
considered a highly technical industry (trade,
business, enterprise, which utilizes application of
advanced technology)
2. Job should be classified as an apprenticeable
occupation.
Apprenticeable Age: 15 years-old and above [RA
7658]
U.P. LAW BOC LABOR STANDARDS
Employment of Apprentices
When applicable:
1. Only employers in highly technical industries
may employ apprentices; and
2. Only in apprenticeable occupations approved by
the Secretary of Labor. [Art. 60]
Terms and conditions
Apprenticeship agreements, including the wage rates
of apprentices, shall conform to the rules issued by
the Secretary of Labor and Employment.
Period of Apprenticeship
The period of apprenticeship shall not exceed six
months.
Wage rate
Apprenticeship agreements providing for wage rates
below the legal minimum wage, which in no case shall
start below 75 percent of the applicable minimum
wage, may be entered into only in accordance with
apprenticeship programs duly approved by the
Secretary of Labor and Employment. [Art. 61, as
amended by E.O. 111-1986]
Apprenticeship without compensation
The Secretary of Labor and Employment may
authorize the hiring of apprentices without
compensation whose training on the job is required
by the school or training program curriculum or as
requisite for graduation or board examination. [Art.
72]
The wages of apprentices and learners shall in no case
be less than seventy-five percent (75%) of the
applicable minimum wage rates. [Sec. 7, Wage Order
No. NCR-19]
Enforcement
Investigation of violation of apprenticeship
agreement. - Upon complaint of any interested person
or upon its own initiative, the appropriate agency of
the Department of Labor and Employment or its
authorized representative shall investigate any
violation of an apprenticeship agreement pursuant to
such rules and regulations as may be prescribed by the
Secretary of Labor and Employment. [Art. 65]
Appeal to the Secretary of Labor and Employment. -
The decision of the authorized agency of the
Department of Labor and Employment may be
appealed by any aggrieved person to the Secretary of
Labor and Employment within five (5) days from
receipt of the decision. The decision of the Secretary
of Labor and Employment shall be final and
executory. [Art.66]
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LABOR LAW
Exhaustion of administrative remedies. No person
shall institute any action for the enforcement of any
apprenticeship agreement or damages for breach of
any such agreement, unless he has exhausted all
available administrative remedies. [Art. 67]
Incentives for employers
An additional deduction from taxable income of one-
half (1/2) of the value of labor training expenses
incurred for developing the productivity and
efficiency of apprentices shall be granted to the
person or enterprise organizing an apprenticeship
program: Provided, That such program is duly
recognized by the Department of Labor and
Employment: Provided, further, That such deduction
shall not exceed ten (10%) percent of direct labor
wage: and Provided, finally, That the person or
enterprise who wishes to avail himself or itself of this
incentive should pay his apprentices the minimum
wage. [Art. 71]
Requisites of the deduction:
1. Apprenticeship program must be duly approved
by the DOLE;
2. Deduction shall NOT exceed 10% of direct labor
wage;
3. Employer must pay his apprentices the minimum
wage.
Summary of Rules:
1. The apprentice must be paid not less than 75%
of the prescribed minimum salary [Art. 61];
HOWEVER, the employer MAY NOT pay any
wage if the apprenticeship training is:
a. part of the school curriculum,
b. a requirement for graduation, or
c. a requirement for board examination [Art.
72]
2. The apprenticeship agreement must be approved
by the DOLE Secretary (without such one shall
be deemed a regular employee) [Nitto Enterprises
v. NLRC, G.R. No. 114337 (1995)];
3. The employer is not compelled to continue one’s
employment upon termination of apprenticeship;
4. One-half (1/2) of the value of labor training
expenses incurred for developing the
productivity and efficiency of apprentices of the
training cost is deducted from the employer’s
income tax but it shall not exceed 10% of direct
labor wage [Art. 71]
Working scholars – there is no employer-employee
relationship between students on one hand, and
schools, colleges or universities on the other, where
there is written agreement between them under which
the former agree to work for the latter in exchange for
the privilege to study free of charge, provided, the
U.P. LAW BOC LABOR STANDARDS LABOR LAW

students are given real opportunities, including such Summary of Rules

facilities as may be reasonable and necessary to finish 1. The duration of learnership shall not exceed 3
their chosen courses under such agreement. [Sec. 14, months [Art. 73];
Rule X, Book III, IRR] 2. If the learnership of 3 months is completed, the
employer may be compelled to continue with the
b. Learners services of the learner as a regular employee;
There is a commitment from the employer to
Learners - persons hired as trainees in semi-skilled employ the learners if they so desire, as regular
and other industrial occupations which are non- employees upon completion of the learnership;
apprenticeable and which may be learned through 3. If the learner is dismissed from service without
practical training on the job in a relatively short period just and valid cause and without due process after
of time which shall not exceed three (3) months [Art. 2 months of service, he will be deemed as regular
73; Sec 4(n), RA 7796] employee; [Art. 75(d)] and
4. The wages or salary rates of the learners which
When may learners be hired shall begin at not less than 75% of the applicable
1. No experienced workers are available; minimum wage. [Art. 75(c)]
2. The employment of learners being necessary to
prevent the curtailment of employment Distinctions between Learnership and
opportunities; and Apprenticeship
3. The employment will neither create unfair Apprenticeship Learnership
competition in terms of labor costs nor impair Highly technical Semi-skilled industrial
working standards. [Art. 74] industries occupations
Practical training Practical training
Terms and conditions of employment supplemented by related whether or not such
Any employer desiring to employ learners shall enter theoretical instruction practical training is
into a learnership agreement with them, which supplemented by
agreement shall include: theoretical instructions
1. The duration of the learnership period, which Apprenticeable Non-apprenticeable
shall not exceed three (3) months; occupations approved occupations
2. The wages or salary rates of the learners which by the SOLE
shall begin at not less than seventy-five percent Written apprentice Learnership agreement
(75%) of the applicable minimum wage; and agreement ratified by
3. A commitment to employ the learners if they so the appropriate
desire, as regular employees upon completion of committees
the learnership. All learners who have been More than 3 months, Shall not exceed 3
allowed or suffered to work during the first two shall not exceed 6 months
(2) months shall be deemed regular employees if months
training is terminated by the employer before the 1. The person is at 1. When no
end of the stipulated period through no fault of least 15 years of experienced
the learners. age, provided those workers are
who are at least 15 available;
The learnership agreement shall be subject to years of age but less 2. The employment of
inspection by the Secretary of Labor and than 18 may be learners is necessary
Employment or his duly authorized representative. eligible for to prevent
[Art. 75] apprenticeship only curtailment of
in non-hazardous employment
Learners employed in piece or incentive-rate jobs occupation; opportunities; and
during the training period shall be paid in full for the 2. The person is 3. The employment
work done. [Art. 76] physically fit for the does not create
occupation in unfair competition
which he desires to in terms of labor
be trained; costs or impair or
3. The person lower working
possesses standards.
vocational aptitude
and capacity for the

Page 71 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Apprenticeship Learnership 7. Persons with Disabilities

particular [RA 7277 - Magna Carta for Disabled Persons, as
occupation as amended by RA 9442]
established through
appropriate tests; Definitions
and a. Disabled persons are those suffering from
4. The person is able restriction or different abilities, as a result of a
to comprehend and mental, physical or sensory impairment, to
follow oral and perform an activity in the manner or within the
written instructions. range considered normal for a human being [Sec.
Wage rate shall begin at Wage rate shall begin at 4(a), RA 7277]
not less than 75% of the not less than 75% of the b. Impairment is any loss, diminution or
minimum wage minimum wage aberration of psychological, physiological, or
anatomical structure or function [Sec 4(b), RA
No compensation if Learners in piecework 7277]
SOLE authorizes, as shall be paid in full for c. Disability shall mean (1) a physical or mental
OJT is required by the the work done impairment that substantially limits one or more
school [Art. 72]. psychological, physiological or anatomical
A commitment to function of an individual or activities of such
employ the learners if individual; (2) a record of such an impairment; (3)
they so desire, as regular being regarded as having such an impairment
employees upon [Sec 4(c), RA 7277]
completion of the d. Handicap refers to a disadvantage for a given
learnership. All learners individual, resulting from an impairment or a
who have been allowed disability, that limits or prevents the function or
or suffered to work activity, that is considered normal given the age
during the first 2 and sex of the individual [Sec 4(d), RA 7277]
months shall be deemed
regular employees if Coverage
training is terminated by
the employer before the Sec. 3, RA 7277. Coverage. — This Act shall
end of the stipulated cover all disabled persons and, to the extent herein
period through no fault provided, departments, offices and agencies of the
of the learners. National Government or nongovernment
Deductibility of ½ of organizations involved in the attainment of the
training costs incurred, objectives of this Act.
provided:
• Program is duly Rights of disabled workers
recognized by
DOLE a. Equal opportunity for employment
• Deduction shall No disabled person shall be denied access to
not exceed 10% of opportunities for suitable employment. A
direct labor wage qualified disabled EE shall be subject to the same
• Payment of terms and conditions of employment and the
minimum wage to same compensation, privileges, benefits, fringe
apprenticeship benefits, incentives or allowances as a qualified
able-bodied person. [Sec. 5 (par. 1), RA 7277]

Once they are regular employees, they are entitled

to the benefits granted by law which the parties
cannot stipulate away. [Bernardo v. NLRC, 310
SCRA 186 (1999)]

b. Reserved contractual positions

5% of all casual, emergency and contractual
positions in the DSWD; DOH, DepEd; and

Page 72 of 220
U.P. LAW BOC LABOR STANDARDS
other government agencies, offices or
corporations engaged in social development shall
be reserved for disabled persons. [par. 2, Sec. 5,
RA 7277]
c. Sheltered employment
Sheltered Employment refers to the provision
of productive work for disabled persons through
workshop providing special facilities, income
producing projects or homework schemes with a
view to given them the opportunity to earn a
living thus enabling them to acquire a working
capacity required in open industry. [Sec 4(i), RA
7277]
If suitable employment for disabled persons
cannot be found through open employment, the
State shall endeavor to provide it by means of
sheltered employment.
In the placement of disabled persons in sheltered
employment, it shall accord due regard to the
individual qualities, vocational goals and
inclinations to ensure a good working
atmosphere and efficient production. [Sec 6, RA
7277]
Apprenticeship Opportunities.
Disabled persons shall be eligible as apprentices or
learners: Provided, that their handicap is NOT as
much as to effectively impede the performance of job
operations in the particular occupation for which they
are hired; provided, further, That after the lapse of the
period of apprenticeship, if found satisfactory in the
job performance, they shall be eligible for
employment. [Art. 81 ; Sec. 7, RA 7277] [Bernardo v.
NLRC, G.R. No. 122917 (1999)]
d. Full minimum wage
All qualified handicapped workers shall receive
the full amount of the minimum wage rate
prescribed herein. [Sec 7, Wage Order No. NCR-
19]
A Qualified Individual with a Disability shall
mean an individual with a disability who, with or
without reasonable accommodations, can perform
the essential functions of the employment position
that such individual holds or desires. However,
consideration shall be given to the employer’s
judgement as to what functions of a job are essential,
and if an employer has prepared a written description
before advertising or interviewing applicants for the
job, this description shall be considered evidence of
the essential functions of the job. [Sec. 2(l), RA 7277
(Magna Cart for Persons with Disability, as amended
by RA 9442)]
Page 73 of 220
LABOR LAW
In this light, the Magna Carta for Disabled Persons
mandates that a qualified disabled EE should be given
the same terms and conditions of employment as a
qualified able-bodied person. Since the Magna Carta
accords them the rights of qualified able-bodied
persons, they are thus covered by Art. 280 of the
Labor Code. In the present case, the handicap of
petitioners (deaf-mutes) is NOT a hindrance to their
work. The eloquent proof of this statement is the
repeated renewal of their employment contracts.
[Bernardo v. NLRC, supra.]
a. Discrimination
Equal opportunity
Sec 5, RA 7277. Equal Opportunity for
Employment. — No disable person shall be
denied access to opportunities for suitable
employment. A qualified disabled employee shall
be subject to the same terms and conditions of
employment and the same compensation,
privileges, benefits, fringe benefits, incentives or
allowances as a qualified able bodied person. Five
percent (5%) of all casual emergency and
contractual positions in the Departments of Social
Welfare and Development; Health; Education,
Culture and Sports; and other government
agencies, offices or corporations engaged in social
development shall be reserved for disabled persons.
No entity, whether public or private, shall
discriminate against a qualified disabled person by
reason of disability in regard to job application
procedures, the hiring, promotion, or discharge of
employees, employee compensation, job training, and
other terms, conditions, and privileges of
employment.
Acts of Discrimination:
1. Limiting, segregating or classifying a disabled job
applicant in such a manner that adversely affects
his work opportunities;
2. Using qualification standards, employment tests
or other selection criteria that screen out or tend
to screen out a disabled person unless such
standards, tests or other selection criteria are
shown to be job-related for the position in
question and are consistent with business
necessity;
3. Utilizing standards, criteria, or methods of
administration that:
a. have the effect of discrimination on the basis
of disability; or
U.P. LAW BOC LABOR STANDARDS
b. perpetuate the discrimination of others who
are subject to common administrative
control.
4. Providing less compensation, such as salary, wage
or other forms of remuneration and fringe
benefits, to a qualified disabled employee, by
reason of his disability, than the amount to which
a non-disabled person performing the same work
is entitled;
5. Favoring a non-disabled employee over a
qualified disabled employee with respect to
promotion, training opportunities, study and
scholarship grants, solely on account of the
latter's disability;
6. Re-assigning or transferring a disabled employee
to a job or position he cannot perform by reason
of his disability;
7. Dismissing or terminating the services of a
disabled employee by reason of his disability
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 disabled
persons;
8. Failing to select or administer in the most
effective manner employment tests which
accurately reflect the skills, aptitude or other
factor of the disabled applicant or employee that
such tests purports to measure, rather than the
impaired sensory, manual or speaking skills of
such applicant or employee, if any; and
9. Excluding disabled persons from membership in
labor unions or similar organizations [Sec. 32, RA
7277]
Occasions when a Disabled Applicant may be
Subjected to Medical Examination
1. All entering employees are subjected to such an
examination regardless of disability;
2. Information obtained during the medical
condition or history of the applicant is collected
and maintained on separate forms and in separate
medical files and is treated as a confidential
medical record; Provided, however, That:
a. Supervisors and managers may be informed
regarding necessary restrictions on the work
or duties of the employees and necessary
accommodations;
b. First aid and safety personnel may be
informed, when appropriate, if the disability
may require emergency treatment;
c. Government officials investigating
compliance with this Act shall be provided
relevant information on request; and
Page 74 of 220
LABOR LAW
d. The results of such examination are used
only in accordance with this Act [Sec 33, RA
7277].
Other Provisions Against Discrimination
1. Employment Entrance Examination
Upon an offer of employment, a disabled
applicant may be subjected to medical
examinations, on the following occasions:
a. all entering employees are subjected to such
an examination regardless of disability;
b. Information obtained during the medical
condition or history of the applicant is
collected and maintained on separate forms
and in separate medical files and is treated as
a confidential medical record; Provided,
however, That:
i. supervisors and managers may be
informed regarding necessary
restrictions on the work or duties of the
employees and necessary
accommodations:
ii. first aid and safety personnel may be
informed, when appropriate, if the
disability might require emergency
treatment;
iii. government officials investigating
compliance with this Act shall be
provided relevant information on
request; and
iv. the results of such examination are used
only in accordance with this Act. [Sec.
35, RA 7277 as amended by RA 9442]
2. Prohibition on Verbal, Non-Verbal Ridicule
and Vilification Against Persons with
Disability
a. No individual, group or community shall
execute any of these acts of ridicule against
persons with disability in any time and place
which could intimidate or result in loss of
self-esteem of the latter. [Sec. 40, RA 7277,
as amended by RA 9442]
b. Any individual, group or community is
hereby prohibited from vilifying any person
with disability which could result into loss of
self-esteem of the latter. [Sec. 42, RA 7277,
as amended by RA 9442]
b. Incentives for employers
1. For employment of disabled persons -
additional deduction, from their gross income,
equivalent to 25% of the total amount paid as
salaries and wages to disabled persons
U.P. LAW BOC LABOR STANDARDS LABOR LAW

a. Private entities
b. Employ disabled persons either as regular
EEs, apprentice or learner
c. Provided such entities present proof as
certified by the DOLE and the DOH [Sec.
8[b], RA 7277]

2. For construction of disabled-friendly

facilities - additional deduction from their net
taxable income, equivalent to 50% of the direct
costs of the improvements or modifications
a. Private entities
b. That improve or modify their physical
facilities in order to provide reasonable
accommodation for disabled persons
c. Does NOT apply to improvements or
modifications or facilities required under BP
344. [Sec. 8 (c), RA 7277]

3. For establishments giving discounts – may

claim such discounts as tax deductions based on
the net cost of the goods sold or services
rendered
a. The cost of the discount shall be allowed as
deduction from gross income for the same
taxable year that the discount is granted
b. The total amount of the claimed tax
deduction net of VAT if applicable, shall be
included in their gross sales receipts for tax
purposes and shall be subject to proper
documentation and to the provisions of the
National Internal Revenue Code, as
amended. [Sec. 32, RA 7277, as amended by
RA 9442]

Page 75 of 220
U.P. LAW BOC LABOR STANDARDS
IV. SOCIAL WELFARE
LEGISLATION
A. SSS Law [RA 8282]
Note: All Sections referred to under this Subheading
refer to RA 8282
1. Coverage and Exclusions
a. Compulsory [Sec. 9 (a); Sec. 9-A]
1. Employees not over 60 years of age and their
employers, including domestic helpers with at
least P1,000 monthly pay; and
2. Self-employed as may be determined by the
Commission, but not limited to:
a. Self-employed professionals
b. Partners and single proprietors of businesses
c. Actors and actresses, directors, scriptwriters,
and news correspondents who do not fall
within the definition of the term “employee”
under Sec. 8 (d)
d. Professional athletes, coaches, trainers and
jockeys
e. Individual farmers and fishermen
A domestic worker who has rendered at least one [1]
month of service shall be covered by the Social
Security System [SSS], the Philippine Health
Insurance Corporation [PhilHealth], and the Home
Development Mutual Fund or Pag-IBIG, 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 Five thousand
pesos [P5,000.00] and above per month, the domestic
worker shall pay the proportionate share in the
premium payments or contributions, as provided by
law.
The domestic worker shall be entitled to all other
benefits under existing laws. [Sec. 30, Kasambahay
Law]
b. Voluntary [Sec. 9]
1. Spouses who devote full time to managing
household and family affairs, unless they are also
engaged in other vocation or employment [which
is subject of compulsory coverage];
Page 76 of 220
LABOR LAW
2.
3.
OFWs recruited by foreign-based employers;
Employees [previously under compulsory
coverage] already separated from employment or
those self-employed [also under compulsory
coverage] with no realized income for a given
month, who chose to continue with
contributions to maintain right to full benefit.
Note: Foreign governments, international
organizations or their wholly owned instrumentality
employing workers in the Philippines may enter into
an agreement with the Philippine government to
include their employees in the SSS except those
already covered by their civil service retirement
system.
c. Exclusions from Coverage [Sec.
8 (j)]
1. Employment purely casual and not for the
purpose of occupation or business of the
employer.
2. Service performed on or in connection with an
alien vessel by an employee if he is employed
when such vessel is outside the Philippines;
3. Service performed in the employ of the
Philippine Government or instrumentality or
agency thereof;
4. Service performed in the employ of a foreign
government or international organization, or
their wholly-owned instrumentalities; and
5. Services performed by temporary and other
employees which may be excluded by SSS
regulation. Employees of bona fide independent
contractors shall not be deemed employees of the
employer engaging the services of said
contractors.
2. Dependents and
Beneficiaries
a. Primary
1. Dependent spouse – until remarriage [see above];
2. Dependent children [legitimate, legitimated,
legally adopted, and illegitimate] [see above];
illegitimate children are entitled only to 50% of
the share of legitimate children unless there are
no legitimate children, in which case, they get
100%.
U.P. LAW BOC LABOR STANDARDS
b. Secondary
1. Shall only receive when the primary beneficiaries
are absent
2. Dependent parents
c. Others
1. shall only receive when the primary and
secondary beneficiaries are absent
2. Any other person designated by member as
his/her secondary beneficiary.
3. Benefits
a. Monthly Pension [Sec.12]
Computation of monthly pension
The monthly pension shall be the highest of the
following amounts:
1. P300 + [20% x [average monthly credit]] + [2%
x [average monthly credit] x [# of cash credited
years of service in excess of 10 years]];
2. 40% x [average monthly credit];
3. P1,000; provided, that the monthly pension shall
in no case be paid for an aggregate amount of less
than 60 months. [Sec. 12(a), R.A. No. 8262]
4. Notwithstanding the abovementioned, minimum
pension is P1,200 for members with at least 10
years credit service, P2,400 for those with 20
years. [Sec. 12(b), R.A. No. 8262]
b. Dependents’ Pension [Sec. 12-A]
1. Paid on account of members’
a. death,
b. retiring, or
c. permanent total disability;
2. Paid to each child conceived on or prior to
contingency, but not exceeding 5, beginning with
the youngest and preferring the legitimate;
3. Amount is either P250 or 10% of the monthly
pension as computed above, whichever is higher.
c. Retirement benefits [Sec. 12-B]
Eligibility requirements
1. 120 monthly contributions;
2. Age
a. 65 years old; or
b. a member who has reached 60 years may also
avail if he is already separated from
employment or has ceased to be self-
employed.
Page 77 of 220
LABOR LAW
Benefit – entitlement to monthly pension from
retirement until death.
The monthly pension shall be suspended upon the
reemployment or resumption of self-employment of
a retired member who is less than sixty-five [65] years
old.
In Case of Death of Member
1. His/her primary beneficiaries as of the date of
his/her retirement shall be entitled to receive the
monthly pension; or
2. If he/she has no primary beneficiaries AND
he/she dies within sixty [60] months from the
start of his/her monthly pension, his/her
secondary beneficiaries shall be entitled to a lump
sum benefit equivalent to the total monthly
pensions corresponding to the balance of the
five-year guaranteed period, excluding the
dependents’ pension.
Lump Sum Alternative
Member may opt to receive his/her first 18 monthly
pensions in lump sum but such is discounted at a
preferential rate of interest.
Lump Sum Eligibility
A 60 year old member with less than 120 monthly
contributions who is no longer employed or self-
employed, and who is not continuing contributions
independently, he is entitled to a lump sum equal to
his total contributions paid.
d. Permanent disability benefits
[Sec. 13-A]
Eligibility requirement
1. 36 monthly contributions prior to the semester
of disability; same as death benefit; the only
difference is that the pension is paid directly to
the member.
2. In case the permanently disabled member dies, it
would be given the same treatment as a retiree
dying.
3. For permanent partial disability, the pension is
not lifetime. [e.g. loss of thumb entitles member
to only 10 months of pension, while loss of arm
50 months]. It shall be paid in lump sum if the
period is less than 12 months.
4. For multiple partial disabilities, they shall be
additive when related or deteriorating – the
percentage shall be equal to the number of
months the partial disability is entitled to, divided
by 75 months. [e.g. loss of sight in one eye =
25/75; loss of arm = 50/75; if both occur due to
U.P. LAW BOC LABOR STANDARDS
same cause, then 25/75 + 50/75 = 100% so
treated as if it were permanent total disability]
Lump Sum Alternative
A member is entitled to a lump sum benefit equivalent
to the monthly pension times the number of monthly
contributions paid to the SSS or twelve [12] times the
monthly pension, whichever is higher.
Lump Sum Eligibility
A member who has not paid at least 36 monthly
contributions
Note: A member who [1] has received a lump sum
benefit; and [2] is reemployed or has resumed self-
employment not earlier than one [1] year from the
date of his disability shall again be subject to
compulsory coverage and shall be considered a new
member.
In Case of Death of Member
1. His/her primary beneficiaries as of the date of
disability shall be entitled to receive the monthly
pension; OR
2. If he/she has no primary beneficiaries and he dies
within sixty [60] months from the start of his
monthly pension, his secondary beneficiaries
shall be entitled to a lump sum benefit equivalent
to the total monthly pensions corresponding to
the balance of the five-year guaranteed period
excluding the dependents’ pension.
e. Death benefits [Sec. 13]
Eligibility requirement
36 monthly contributions prior to the semester of
death.
Benefit – monthly pension to primary or a lump sum
benefit equivalent to thirty-six [36] times the monthly
pension secondary beneficiaries.
To those ineligible – lump sum benefit which shall be
the higher between the two:
a. [monthly pension] x 12; or
b. [monthly pension] x [# of monthly
contributions]
f. Funeral benefits [Sec. 13-B]
P12,000 in cash or in kind, upon death of member
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LABOR LAW
g. Loan
Social Security Commission Resolution No. 669.
Moreover, several SSS-issued circulars such as
Circular No. 21-P and No. 52 pertain to the treatment
of salary loans, sometimes providing for more flexible
payment terms or condonation for delinquent payers;
Santiago v. CA and SSS [G.R. L-39949 (1984)] resolved
an issue involving the treatment of salary loan
repayments; SSS website also shows loans
h. Sickness benefits [Sec. 14]
Eligibility requirements and other conditions
1. Inability to work due to sickness or injury
2. Confined for at least 4 days either in a hospital or
elsewhere with SSS approval;
3. At least 3 months of contributions in the 12
month period immediately before the semester of
sickness or injury has been paid;
4. All company sick leaves with pay for the current
year have been used up;
5. Maximum of 120 days per 1 calendar year [i.e
maximum permissible for the same sickness and
confinement is 240 days for 2 consecutive years];
6. The employer has been notified, or, if a
separated, voluntary or self-employed member,
the SSS directly notified within 5 days of
confinement;
7. Notice to employer or SSS not needed when
confinement is in a hospital; notice to employer
not required as well when Employee became sick
or injured while working or within premises of
the employer.
Benefit: daily cash allowance paid for the number of
days a member is unable to work due to sickness or
injury equivalent to 90% x [average daily salary
credit]
Note: One hundred percent [100%] of the daily
benefits provided in the preceding paragraph shall be
reimbursed by the SSS to said employer upon receipt
of satisfactory proof of such payment and legality
thereof if the following conditions are met:
1. The employer notified the SSS of the
confinement within five calendar days after
receipt of the notification from the employee
member
2. If the notification to the SSS is made by the
employer beyond five calendar days after receipt
of the notification from the employee member,
he shall be reimbursed only for each day of
confinement starting from the tenth calendar day
immediately preceding the date of notification to
the SSS.
U.P. LAW BOC LABOR STANDARDS LABOR LAW

3. SSS shall reimburse the employer or pay the

unemployed member only for confinement
B. GSIS [RA 8291]
within the one-year period immediately
preceding the date the claim for benefit or Note: All Sections referred to under this Subheading
reimbursement is received by the SSS, except refers to RA 8282
confinement in a hospital in which case the claim
for benefit or reimbursement must be filed within 1. Coverage and Exclusions
one [1] year from the last day of confinement.
a. Coverage
i. Maternity leave benefits [Sec. 14-
A] All public sector employees below the compulsory
retirement age of 65, irrespective of employment
Eligibility Requirements status. [Sec. 3]
1. A female member
2. Paid at least three [3] monthly contributions in b. Exclusions from Coverage
the twelve-month period immediately preceding
the semester of her childbirth or miscarriage 1. AFP and PNP;
3. She shall have notified her employer of her 2. Members of the Judiciary and Constitutional
pregnancy and the probable date of her Commissions who are covered ONLY by life
childbirth, which notice shall be transmitted to insurance as they have separate retirement
the SSS in accordance with the rules and schemes;
regulations it may provide; 3. Contractual employees with no employer-
employee relationship with the agency they serve.
Process [Sec. 3]
The full payment shall be advanced by the employer
within thirty [30] days from the filing of the maternity
leave application; 2. Dependents and
Beneficiaries
Coverage
The maternity benefits provided under this Sec. shall
be paid only for the first four [4] deliveries or
a. Primary
miscarriages;
1. Dependent spouse – until remarriage;
Employer’s Reimbursement 2. Dependent children (legitimate, legitimated,
That the SSS shall immediately reimburse the legally adopted, and illegitimate) – but RA 8291
employer of one hundred percent [100%] of the does not distinguish share of legitimate and
amount of maternity benefits advanced to the illegitimate children.
employee by the employer upon receipt of satisfactory
proof of such payment and legality thereof. b. Secondary
Note: All of these benefits are tax-exempt. Shall only receive when the primary beneficiaries are
absent:
1. Dependent parents
2. Legitimate descendants, subject to the
restrictions on dependent children.

3. Benefits
Computation of Service [Sec. 10]
From date of original appointment/election,
including periods of service at different times under
one or more employers, those performed overseas
under the authority of the Republic of the Philippines,
and those that may be prescribed by the GSIS in
coordination with the Civil Service Commission.

Page 79 of 220
U.P. LAW BOC LABOR STANDARDS
In case of reinstatement in the service of an employer
and subsequent retirement or separation which is
compensable under this Act, all service credited for
retirement, resignation or separation for which
corresponding benefits have been awarded under this
Act or other laws shall be excluded in the
computation of service
Note: The GSIS may prescribe rules for the inclusion
of part time and other services with compensation.
a. Monthly Pension [Sec. 9]
The amount shall be:
1. 37.5% x [revalued ave. monthly compensation]
2. Plus 2.5 x [revalued ave. monthly compensation]
x [years in service in excess of 15 years].
a. Provided, the monthly pension shall not
exceed 90% of the average monthly
compensation.
b. It shall not be less than P2,400 for those with
20 years of service and not less than P1,300
for everyone else.
b. Retirement Benefits [Sec. 13]
Eligibility requirements [Sec. 13-A]
1. At least 15 years of service;
2. At least 60 years of age; and
3. Not receiving pension benefit from permanent
total disability.
Note: Retirement is compulsory for employees 65
years of age who have rendered at least 15 years of
service; if employee has less than 15 years of service,
he may be allowed to continue in accordance with
civil service laws. [Sec. 13]
Benefit [Sec. 13]: Choice between
1. 60 x [basic monthly pension] lump sum payment
[Sec. 2] at the time of retirement plus basic
monthly pension payable monthly for life after
expiry of the 5-year guaranteed period which is
already covered by the lump sum; or
2. Cash payment equivalent to 18 x [basic monthly
pension] plus monthly pension for life
immediately but with no 5-year guarantee
Note: Subject to periodic adjustment [Sec. 14]
Page 80 of 220
LABOR LAW
c. Permanent Disability Benefits
Disabilities Deemed Total and Permanent [Sec.
16]
1. Complete loss of sight of both eyes;
2. Loss of 2 limbs at or above the ankle or wrist
3. Permanent complete paralysis of 2 limbs
4. Brain injury resulting in incurable imbecility or
insanity
5. Such other cases as may be determined by the
GSIS
Disabilities Deemed Partial and Permanent [Sec.
17]
1. Complete and permanent loss of the use of:
a. Any finger
b. Any toe
c. One arm
d. One hand
e. One foot
f. One leg
g. One or both ears
h. Hearing of one or both ears
i. Sight of one eye
2. Such other cases as may be determined by the
GSIS
Eligibility Requirements for Permanent Total
Disability
1. Disability not due to employee’s own grave
misconduct, notorious negligence, habitual
intoxication, or willful intention to kill himself or
another; [Sec. 15]
2. Employee is:
a. in service at the time of disability; or
b. even if separated, he has paid at least 36
monthly contributions within the 5-year
period immediately prior to disability or has
paid a total of at least 180 monthly
contributions prior to disability; and
c. Member is not enjoying old-age retirement
benefit. [Sec. 16]
Benefit for Permanent Total Disability
1. Monthly income benefit for life equal to basic
monthly pension – This is effective from date of
disability;
2. If member is in service at the time of disability
and he has paid at least 180 monthly
contributions, in addition to the monthly income
benefit, he shall receive an additional cash
payment of 18 times basic monthly pension.
U.P. LAW BOC LABOR STANDARDS
To the ineligible
If member has rendered at least 3 years of service,
then he shall receive cash payment equal to 100% of
ave. monthly compensation for each year of service
[essentially total amount of contributions made] or
P12,000 whichever is higher. [Sec. 16]
Partial Disability
Paid according to GSIS prescribed schedule (this is
similar to the scheme used by SSS); member availing
of permanent partial disability must satisfy condition
regarding the disability not being due to his own fault
and either regarding employment status and services
rendered. (See Eligibility requirements for Permanent
Total Disability)
d. Death benefits [Sec. 21]
When member dies, the primary beneficiaries are
entitled to only one of the following:
1. Survivorship pension
a. If he was in the service when he died; or
b. Even if separated from the service, he has at
least 3 years of service and has paid 36
monthly contributions within the 5 years
immediately preceding death; or
c. Even if separated from the service, he has
paid 180 monthly contributions prior to
death.
2. Survivorship pension plus cash payment of
100% ave. monthly compensation for every
year of service (pension plus total
contributions made)
a. If he was in the service when he died; and
b. With 3 years of service.
3. Cash payment equivalent to 100% ave.
monthly compensation for each year of
service he paid contributions or P12,000
whichever is higher
a. With 3 years of service; and
b. He has failed to qualify in the prior 2
schemes.
e. Funeral benefits [Sec. 23]
The amount shall be fixed by GSIS rules and
regulations
Who are entitled:
1. Active member;
2. Member separated from service but still entitled
to funeral benefit;
3. Pensioner;
4. Retiree who at the time of retirement was of
pensionable age but opted to retire under RA
1616.
Page 81 of 220
LABOR LAW
f. Loan
GSIS website provides for this. The following are the
loans provided online:
1. Consolidated Loan
2. Policy Loan
3. Emergency Loan
4. Pension Loan
g. Temporary Disability Benefits
[Sec. 18]
Similar to sickness.
Eligibility requirements and other conditions:
1. Employee must be:
a. in service at the time of disability; or
b. if separated, he has rendered at least 3 years
of service and paid at least 6 monthly
contributions in the 12 month period
immediately prior to disability;
2. All sick leave credits including CBA sick leaves
for the current year has been used up; and
3. Maximum of 120 days per 1 calendar year (so
maximum permissible for the same sickness and
confinement is 240 days for 2 consecutive years).
Benefit
75% of the current daily compensation for every day
or fraction thereof of disability or P70 whichever is
higher.
h. Separation Benefits [Sec. 11]
Eligibility requirements
1. 60 years of age, or separation from service with
at least 3 years but not over 15 years served
2. Below 60 years of age, but at least 15 years of
service rendered.
Benefit
1. For 60 years of age or separated from service with
3 to 15 years of service: cash payment of 100%
of ave. monthly compensation for each year of
service (total amount of all contributions paid) or
P12,000 whichever is higher.
2. Below 60 years of age and at least 15 years of
service: cash payment equivalent to 18 x [monthly
pension] at the time of resignation or separation
plus an old-age pension benefit equal to basic
monthly pension.
U.P. LAW BOC LABOR STANDARDS LABOR LAW

i. Unemployment Benefits [Sec. 12] j. Survivorship Benefits [Sec. 20]

Eligibility requirements
1. Employee separated from service due to
abolition of his office or position; and
2. Employee has been paying integrated
contributions for at least 1 year prior to
separation.
Benefit
Monthly cash payments of 50% of average monthly
compensation for a duration which is proportional to
years rendered, ranging from 2 months to 6 months.
Beneficiaries are entitled to the following:
1. Basic survivorship pension which is 50% of basic
monthly pension; (see Death Benefits) and
2. Dependent children’s pension not exceeding
50% of the basic monthly pension.
k. Life Insurance Benefits [Sec. 24]
Note: Judiciary and Constitutional Commissions are
entitled to life insurance only.

SSS GSIS
RA 1161 as amended by RA 8282: RA 8291 amending PD 1146
Enabling law
Social Security Act of 1997
Employer – any person, natural or juridical, Employer – National government, its
domestic or foreign, who carries on in the political subdivisions, branches, agencies or
Philippines any trade business, industry, instrumentalities, including government-
undertaking, and uses the services of another owned or controlled corporations and
person who is under his orders as regards financial institutions with original charters
the employment, except those considered [GOCCs]; constitutional commissions; and
as employer under the GSIS. A self- judiciary
employed person shall be both employer and
employee at the same time.
Employee – any person who performs Employee – any person receiving
services for an employer in which either or compensation while in service of an employer
both mental and physical efforts are used whether by election or appointment,
and who receives compensation for such irrespective of status of appointment;
services, where there is an employer— baranggay officials; and sangguniang officials
employee relationship; also, a self-employed
person who is both employee and employer
at the same time
Self-employed – any person whose income Note: No counterpart for self-employed.
Definition of is not derived from employment, including,
Terms but not limited to:
• self-employed professionals;
• partners and single proprietors of
businesses;
• actors, directors, scriptwriters, news
correspondents not considered as
employees under the above definition;
• athletes, coaches, trainers, jockeys; and
• individual farmers and fishers.
Dependents: Same, except that a child here is below 18
• Legal spouse entitled by law to receive
support;
• Child – unmarried, not gainfully
employed, and below 21 or
• Child over 21 if he or she became
permanently incapacitated and
incapable of self-support, physically or
mentally,; child may be legitimate,

Page 82 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW

legitimated, legally adopted, or

illegitimate;
• Parent who is receiving regular support.
Beneficiaries: Same except that RA 8291 does not
Primary distinguish share of legitimate and illegitimate
• Dependent spouse – until remarriage children
[see above];
• Dependent children [see above];
illegitimate children are entitled only to
50% of the share of legitimate children
unless there are no legitimate children,
in which case, they get 100%.
Secondary
• Shall only receive when the primary
beneficiaries are absent: Dependent
parents

Other
Any other person designated by the member
as his/her secondary beneficiary.
Compensation – all actual remuneration for Compensation – basic pay received
employment, including living allowance, as excluding per diems, bonuses, overtime,
well as the cash value of any remuneration honoraria, allowances and other emoluments
paid in any medium other than cash except not integrated into the basic pay under
that portion already above the max salary existing laws.
credit under Sec. 18 of the Act.
Compulsory Public sector employees below the
• Employers as defined above; compulsory retirement age of 65.
• Employees not over 60 years including
household helpers with at least P1,000 Exceptions:
monthly pay; and (1) AFP and PNP;
• Self-employed. (2) Members of the Judiciary and
Constitutional Commissions who are
Voluntary covered only by life insurance as they
• Spouses who devote full time to have separate retirement schemes;
managing household and family affairs; (3) Contractual employees with no
• OFWs recruited by foreign-based employee-employer relationship with the
employers; agency they serve.
• Employees already separated from
Coverage employment or those self-employed
with no realized income for a given
month, who chose to continue with
contributions to maintain right to full
benefit.

Note: Foreign governments, international

organizations or their wholly owned
instrumentality employing workers in the
Philippines may enter into an agreement
with the Philippine government to include
their employees in the SSS except those
already covered by their civil service
retirement system.
Effective Employer: 1st day of operation
Date of Employee: 1st day at work
Coverage Self-employed: upon registration with SSS

Page 83 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW

1. Monthly pension 1. Monthly pension

2. Dependents’ pension 2. Retirement benefits
3. Retirement benefits 3. Permanent disability benefits
4. Permanent disability benefits 4. Death Benefits
5. Death benefits 5. Funeral benefits
6. Funeral benefits 6. Loan – GSIS website provides for this
7. Loan – Social Security Commission 7. Temporary disability benefits [similar to
Resolution No. 669. Moreover, several sickness]
SSS-issued circulars such as Circular No. 8. Separation benefits
Summary of
21-P and No. 52 pertain to the 9. Unemployment benefits – Sec 11
Benefits
treatment of salary loans, sometimes 10. Survivorship benefits
providing for more flexible payment 11. Life insurance benefits
terms or condonation for delinquent
payers; Santiago v. CA and SSS, GR # L- Note: Judiciary and Constitutional
39949 [1984] resolved an issue involving Commissions are entitled to life insurance
the treatment of salary loan repayments; only.
SSS website also shows loans
8. Sickness benefits
9. Maternity leave benefits
(1) Employer’s contribution, and Continued membership for the unemployed
(2) Employee’s obligation to pay member; and entitlement to whatever benefits
Effects of
contribution both cease at the end of he has qualified to in the event of any
separation
the month of separation; compensable contingency.
from
(3) Employee shall be credited with all
employment
contributions paid on his behalf and
entitled to all benefits set forth by law.
Social Security Commission 🡪CA [Rule 43; GSIS 🡪 CA [Rule 43]🡪 SC [Rule 45];
Dispute
questions of law and fact] 🡪 SC [Rule 45; appeal does not stay execution.
Settlement
questions of law only]
Prescriptive 20 years 4 years
Period

C. Disability and death a. Disability Benefits

benefits
1. Labor Code
Under the Labor Code, employees' compensation
(EC) benefits are granted to employees or their
dependents for work-connected disability or death, or
those resulting from accident arising out of and in the
course of employment. [Art. 166, LC in rel. to Sec. 1, Rule
III, IRR]
Types of disability
1. Temporary Total Disability [Art. 197]
2. Permanent Total Disability [Art. 198]
3. Permanent Partial Disability [Art. 199]
Disability does not refer to the injury nor to the pain
and suffering it has occasioned, but to the loss and
impairment of earning capacity. There is disability when
there is a loss or diminution of earning power because
of actual absence from work due to injury or illness
arising out of and in the course of employment. The
basis of compensation is reduction of earning power.
[Azucena, p. 525[
TEMPORARY TOTAL DISABILITY
A total disability is temporary if as a result of the injury
or sickness, the employee is unable to perform any
gainful occupation for a continuous period not
exceeding 120 days [Art. 197 in rel. to Sec. 2(a), Rule
VII, Amended Rules on Employees’ Compensation].

Page 84 of 220
U.P. LAW BOC LABOR STANDARDS
The object of the law in allowing compensation
during temporary disability is to compensate the
laborer or employee for what he might have earned
during the period of the treatment of his injury.
[Cañete v. Insular Lumber Co., 61 Phil. 592 (1935)]
Amount of benefit
An employee suffering from temporary total disability
shall be paid by the System an equivalent of ninety
percent (90%) of the average salary credit, provided:
1. The daily income benefit is not less than Ten (10)
pesos nor more than Ninety (90) pesos, nor paid
for a continuous period longer than 120 days.
[Art. 197]
2. The monthly income benefit shall be suspended
if the employee fails to submit a monthly medical
report certified by its attending physician
[Art.194]
Period of Entitlement
The employee is entitled to the benefit from the day
of the start of the disability. It shall not be paid longer
than 120 consecutive days except where such injury
or sickness still requires medical attendance beyond
120 days but not to exceed 240 days from onset of
disability.
When after the period of temporary total disability
had ceased, an employee was found to be suffering
from a permanent partial disability, he was entitled to
an award based upon partial disability permanent in
character. [Cañete v. Insular Lumber Co., 61 Phil. 592
(1935)]
PERMANENT TOTAL DISABILITY
A disability is total and permanent if as a result of the
injury or sickness the employee is unable to perform
any gainful occupation for a continuous period
exceeding 120 days. [Arts. 198 in rel. to Sec. 2(b), Rule
VII]
The test of whether or not an employee suffers from
‘permanent total disability’ is a showing of the
capacity of the employee to continue performing his
work notwithstanding the disability he incurred. It
does not mean an absolute helplessness but rather an
incapacity to perform gainful work which is expected
to be permanent. [Vicente vs. ECC, G.R. No. 85024,
(1991)]
The Labor Code enumerates six instances considered
to be a permanent total disability:
1. Temporary total disability lasting continuously
for more than one hundred twenty days, except
as otherwise provided for in the Rules;
2. Complete loss of sight of both eyes;
3. Loss of two limbs at or above the ankle or wrist;
Page 85 of 220
LABOR LAW
4. Permanent complete paralysis of two limbs;
5. Brain injury resulting in incurable imbecility or
insanity; and
6. Such cases as determined by the Medical Director
of the System and approved by the Commission.
[Art. 197 (c)]
Amount of Benefit
The employee suffering from a permanent total
disability shall be entitled to an amount equivalent to
the monthly income benefit, plus ten percent thereof
for each dependent child, but not exceeding five,
beginning with the youngest and without substitution:
Provided, That the monthly income benefit shall be
the new amount of the monthly benefit for all covered
pensioners. [Art. 198]
Period of Entitlement
An employee with permanent total disability shall be
entitled to receive benefits monthly for five (5) years.
However, Art. 198(b) provides that the benefits may
be suspended if the employee is gainfully employed,
or recovers from his permanent total disability, or fails
to present himself for examination at least once a year.
PERMANENT PARTIAL DISABILITY
A disability is partial and permanent if as a result of
the injury or sickness the employee suffers a
permanent partial loss of the use of any part of his
body. [Art. 199 in rel. to Sec. 2(c), Rule VII, Amended
Rules on Employees’ Compensation].
The object of the law in granting compensation for a
permanent partial disability is to compensate the
injured laborer or employee for the actual and
permanent loss of a member of the body, or the use
thereof. [Cañete v. Insular Lumber Co., 61 Phil. 592
(1935)]
Amount of benefits
For an employee who has suffered a permanent
partial disability, the amount of benefits, as well as the
period of entitlement to receive such benefits is based
upon the degree of disability, as well as the lost body
part. The body parts and the corresponding period of
equivalent disability are specified in Art 199.
U.P. LAW BOC LABOR STANDARDS LABOR LAW

Table of benefits [Art. 199(b)] Distinguished from permanent total disability

Body part/s Number of months While “permanent total disability” invariably results in
One thumb 10 an employee’s loss of work or inability to perform his
One index finger 8 usual work, “permanent partial disability,” on the
One middle finger 6 other hand, occurs when an employee loses the use of
One ring finger 5 any particular anatomical part of his body which
One little finger 3 disables him to continue with his former work.
One big toe 6 [Vicente vs. ECC, G.R. No. 85024, (1991)]
One toe 3
One arm 50 Conversion from permanent partial disability to
One hand 39 permanent total disability
A person’s disability may not manifest fully at one
One foot 31
precise moment in time but rather over a period of
One leg 46
time. It is possible that an injury which at first was
One ear 10
considered partial disability may become totally and
Both ears 20 permanently disabled from the same cause. There is
Hearing of one ear 10 nothing in the law that prohibits the conversion of
Hearing of both ears 50 permanent partial disability benefit to permanent total
Sight of one eye 25 disability benefit if it is shown that the employee’s
ailment qualifies as such. [GSIS vs. Court of Appeals
Notes: and R. Balais, G.R. No. 117572 (1998)].
1. A loss of a wrist shall be considered as a loss of
the hand, and a loss of an elbow shall be When salary is higher after the injury
considered as a loss of the arm. In a case where the employee filed a claim for
2. A loss of an ankle shall be considered as loss of a permanent partial disability but the ECC denied the
foot, and a loss of a knee shall be considered as a claim because in fact his salary was higher than before,
loss of the leg. the Court ruled that the fact of higher earning capacity
3. A loss of more than one joint shall be considered fact would not in itself necessarily affect the laborer’s
as a loss of one-half of the whole finger or toe: claim for compensation for a permanent partial
Provided, That such a loss shall be either the disability. An injured laborer’s incapacity for work is
functional loss of the use or physical loss of the not to be measured solely by the wages he receives, or
member. [Art. 199(c)] his earning, after the injury, since the amount of such
wages or earnings may be affected by various
In case of permanent partial disability less than extraneous matters or factors. [Central Azucarera
the total loss of the member specified in Art. Don Pedro vs. C. de Leon, in his capacity as
199(b), the same monthly income benefit shall be Workmen’s Compensation Commissioner and L.
paid for a portion of the period established for the Alla, No. L-10036 (1957)].
total loss of the member in accordance with the
proportion that the partial loss bears to the total loss.
If the result is a decimal fraction, the same shall be
b. Death Benefits
rounded off to the next higher integer [Art. 199(d)].
Art. 200. DEATH – a. Under such regulations as
In cases of simultaneous loss of more than one the Commission may approve, the System shall pay
member or a part thereof as specified in Art. to the primary beneficiaries upon the death of the
199(b) the same monthly income benefit shall be paid covered employee under this Title, an amount
for a period equivalent to the sum of the periods equivalent to his monthly income benefit, plus ten
established for the loss of the member or the part percent thereof for each dependent child, but not
thereof. If the result is a decimal fraction, the same exceeding five, beginning with the youngest and
shall be rounded off to the next higher integer [Art. without substitution, except as provided for in
199(e)]. paragraph (j) of Article 167 hereof: Provided,
however, That the monthly income benefit shall be
In cases of injuries or illnesses resulting in a guaranteed for five years: Provided, further, That if
permanent partial disability not listed in the Art. he has no primary beneficiary, the System shall pay
199(b), the benefit shall be an income benefit to his secondary beneficiaries the monthly income
equivalent to the percentage of the permanent loss of benefit but not to exceed sixty months: Provided,
the capacity to work [Art. 199(f)]. finally, That the minimum death benefit shall not

Page 86 of 220
U.P. LAW BOC LABOR STANDARDS
be less than fifteen thousand pesos. (As amended
by Section 4, Presidential Decree No. 1921).
b. Under such regulations as the Commission may
approve, the System shall pay to the primary
beneficiaries upon the death of a covered employee
who is under permanent total disability under this
Title, eighty percent of the monthly income benefit
and his dependents to the dependents’ pension:
Provided, That the marriage must have been validly
subsisting at the time of disability: Provided,
further, That if he has no primary beneficiary, the
System shall pay to his secondary beneficiaries the
monthly pension excluding the dependents’
pension, of the remaining balance of the five-year
guaranteed period: Provided, finally, That the
minimum death benefit shall not be less than
fifteen thousand pesos. (As amended by Section 4,
Presidential Decree No. 1921).
c. The monthly income benefit provided herein
shall be the new amount of the monthly income
benefit for the surviving beneficiaries upon the
approval of this decree.
Conditition to entitlement
The beneficiaries of a deceased employee shall be
entitled to an income benefit if all of the following
conditions are satisfied:
1. The employee has been duly reported to the
System;
2. He died as a result of an injury or sickness; and
3. The System has been duly notified of his death,
as well as the injury or sickness which caused his
death. His employer shall be liable for the benefit
if such death occurred before the employee is
duly reported for coverage to the System. [Sec.
1(a), Rule XIII, IRR]
Notes:
1. If the employee has been receiving monthly
income benefit for permanent total disability at
the time of his death, the surviving spouse must
show that the marriage has been validly subsisting
at the time of his disability.
2. In addition, the cause of death must be a
complication or natural consequence of the
compensated Permanent Total Disability. [Sec.
1(b), Rule XIII, IRR]
Beneficiaries
The beneficiaries are:
1. Primary beneficiaries:
a. Dependent spouse until he/she remarries;
b. Dependent children (legitimate, legitimated,
natural-born, or legally adopted).
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2. Secondary beneficiaries:
a. Illegitimate children and legitimate
descendants;
b. Parents, grandparents, grandchildren.
[Azucena, p. 541]
Dependents
"Dependent" means the legitimate, legitimated or
legally adopted or acknowledged natural child who is
unmarried, not gainfully employed, and not over
twenty-one (21) years of age or over twenty-one (21)
years of age provided he is incapacitated and
incapable of self-support due to a physical or mental
defect which is congenital or acquired during
minority; the legitimate spouse living with the
employee and the parents of said employee wholly
dependent upon him for regular support. [Art. 173 (i)]
The test of dependency is not merely whether the
contributions were necessary to bare subsistence.
dependency may exist although the dependent could
have subsisted without the assistance he/she received,
if such contributions were relied on by claimant for
his/her means of living as determined by his/her
position in life. [Malate Taxicab v. Del Villar, G.R.
No. L-7489 (1956)]
Period of entitlement
For primary beneficiaries
The income benefit shall be paid beginning at the
month of death and shall continue to be paid for as
long as the beneficiaries are entitled thereto. [Sec. 2,
Rule XII, IRR]
Qualifications:
With respect to the surviving legitimate spouse, the
qualification is that he/she has not remarried.
For the dependent children, the qualifications are:
1. Unmarried;
2. Not gainfully employed; and
3. Not over 21 years of age provided he/she is
incapable of self-support due to a physical or
mental defect which is congenital or acquired
during minority. [Sec. 2(a), Rule XII, IRR]
For secondary beneficiaries
The income benefit shall be sixty (60) times the
monthly income benefit of a primary beneficiary
which in no case be less than P 15,000.00, which shall
likewise be paid in monthly pension. [Sec. 2(a), Rule
XII, IRR]
U.P. LAW BOC LABOR STANDARDS
Manner of payment
Death benefits are paid in the form of cash monthly
pension:
1. for life to the primary beneficiaries, guaranteed
for five years;
2. for not more than 60 months to the secondary
beneficiaries in case there are no primary
beneficiaries;
3. in no case shall the total benefit be less than
P15,000. [Art. 200]
Amount of benefits
For primary beneficiaries
Monthly income benefit shall be equivalent to the
monthly income benefit for permanent total
disability, which shall be guaranteed for five years,
increased by ten percent for each dependent child but
not exceeding 5, beginning with the youngest and
without substitution. [Sec. 3, Rule XII, IRR]
Notes:
1. The aggregate monthly benefit payable in the
case of the GSIS shall in no case exceed the
monthly wage or salary actually received by the
employee at the time of his death;
2. The minimum income benefit shall not be less
than Fifteen Thousand Pesos (P15,000.00). [Sec.
3, Rule XII, IRR]
For secondary beneficiaries
Income benefit is payable in monthly pension which
shall not exceed the period of 60 months and the
aggregate income benefit shall not be less than P15,
000.00. [Sec. 3, Rule XII, IRR]
Death benefits after retirement are allowed
Generally, the term “covered employees” refers to an
employee who, at the time of his death, is still covered
by the GSIS. However, the implementing rules and
regulations of the Employees’ Compensation
Commission allows death benefits to those retired
employees whose retirement was brought about by
permanent disability.
The Court is aware that death benefits must be
granted to the primary beneficiaries of the decedent
to help the family of a permanent and totally disabled
person who was so disabled because of causes that are
work-oriented. The rule applies all the more when the
disabled person later dies because of the same cause
or related cause. [Manuzon v. ECC, G.R. No. 88573,
(1990)]
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Death of a person receiving permanent total
disability benefits
Under Art. 200(b), death benefit shall be paid to the
beneficiaries if an employee, while receiving
permanent total disability benefit, dies.
Prescription of claims
All money claims arising from employer-employee
relations shall be filed within three (3) years from the
time the cause of action accrued; otherwise they shall
forever be barred. [Art. 306, LC]
2. POEA-Standard
Employment Contract
As part of a seafarer's deployment for overseas work,
he and the vessel owner or its representative local
manning agency are required to execute the POEA-
SEC. Containing the standard terms and conditions
of seafarers' employment, the POEA-SEC is deemed
included in their contracts o f employment in foreign
ocean-going vessels. [Sharpe Sea Personnel Inc. v.
Mabunay, G.R. No. 206113 (2017)]
a. Compensation and Benefits for
Injury or Illness
Medical expenses
If the injury or illness requires medical and/or dental
treatment in a foreign port, the employer shall be
liable for the full cost of such medical, serious dental,
surgical and hospital treatment as well as board and
lodging until the seafarer is declared fit to work or to
be repatriated.
However, if after repatriation, the seafarer still
requires medical attention arising from said injury or
illness, he/she shall be so provided at cost to the
employer until such time he/she is declared fit or the
degree of his/her disability has been established by
the company-designated physician. [Sec. 20, A.2,
POEA-SEC]
Sickness allowance
The seafarer shall also receive sickness allowance
from his/her employer in an amount equivalent to
his/her basic wage computed from the time he/she
signed off until he is declared fir to work or the degree
of disability has been assessed by the company-
designated physician.
The period within the seafarer shall be entitled to
sickness allowance shall not exceed 120 days.
Payment of the sickness allowance shall be made on a
U.P. LAW BOC LABOR STANDARDS
regular basis, but not less than once a month. [Sec. 20.
A.3, POEA-SEC]
Other expenses
Cost of medicines, mode of transportation and accommodation
The seafarer shall be entitled to reimbursement of the
cost of medicines prescribed by the company-
designated physician.
In case treatment of the seafarer is on an out-patient
basis as determined by the company-designated
physician, the company shall approve the appropriate
mode of transportation and accommodation.
The reasonable cost of actual traveling expenses
and/or accommodation shall be paid subject to
liquidation and submission of official receipts and/or
proof of expenses. [Sec. 20, A.3, POEA-SEC]
Post-employment medical examination
General rule: The seafarer shall submit himself/herself
to a post-medical examination by a company-
designated physician within three working days upon
his return.
Exception: When the seafarer is physically
incapacitated to do so. In which case, a written notice
to the agency within the same period is deemed as
compliance. [Sec. 20, A.3, POEA-SEC]
Mandatory reporting requirement
In the course of the treatment, the seafarer shall also
report regularly to the company-designated physician
specifically on the dates as prescribed by the
company-designated physician and agreed to by the
seafarer. Failure of the seafarer to comply with the
mandatory reporting requirement shall result in his
forfeiture of the right to claim the above benefits.
[Sec. 20, A.3, POEA-SEC]
Schedule of benefits
See Sec. 32 of POEA-SEC for the schedule of
disability or impediment for injuries suffered and
diseases including occupational diseases of illness
contracted in the course of work.
Those illnesses not listed in Sec. 32 are disputably
presumed as work-related. [Sec. 20, A.4, POEA-SEC]
Repatriation
In case a seafarer is disembarked from the ship for
medical reasons, the employer shall bear the full cost
of repatriation in the event the seafarer is declared:
1. Fit for repatriation; or
2. Fit to work but the employer is unable to find
employment for the seafarer on board his/her
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former ship or another ship of the employer.
[Sec. 20, A.5, POEA-SEC]
GUIDELINES FOR THE CLAIM OF
PERMANENT TOTAL DISABILITY
BENEFITS
The employer must also compensate the seafarer for
his/her permanent total or partial disability as finally
determined by the company-designated physician.
The following guidelines shall govern seafarers' claims
for permanent and total disability benefits:
1. The company-designated physician must issue a
final medical assessment on the seafarer's
disability grading within a period of 120 days
from the time the seafarer reported to him;
2. If the company-designated physician fails to give
his/her assessment within the period of 120 days,
without any justifiable reason, then the seafarer's
disability becomes permanent and total;
3. If the company-designated physician fails to give
his/her assessment within the period of 120 days
with a sufficient justification (e.g. seafarer
required further medical treatment or seafarer
was uncooperative), then the period of diagnosis
and treatment shall be extended to 240 days. The
employer has the burden to prove that the
company-designated physician has sufficient
justification to extend the period; and
4. If the company-designated physician still fails to
give his assessment within the extended period of
240 days, then the seafarer's disability becomes
permanent and total, regardless of any
justification. [Jebsens Maritime Inc. v. Rapiz, G.R.
No. 218871 (2017)]
b. Compensation and Benefits For
Death
In case of work-related death of the seafarer, during
the term of his contract, the employer shall pay
his/her beneficiaries the Philippine currency
equivalent to the amount of Fifty Thousand US
dollars (US$50,000) and an additional amount of
Seven Thousand US dollars (US$7,000) to each child
under the age of twenty-one (21) but not exceeding
four (4) children, at the exchange rate prevailing
during the time of payment. [Sec. 20, B.1, POEA-
SEC]
When compensation payable is double
Where death is caused by warlike activity while sailing
within a declared war zone or war risk area, the
compensation payable shall be doubled. [Sec. 20, B.2,
POEA-SEC]
U.P. LAW BOC LABOR STANDARDS
Other liabilities of the employer when the seafarer
dies as a result of work-related injury or illness during
the term of employment are as follows:
a. The employer shall pay the deceased’s beneficiary
all outstanding obligations due the seafarer under
this Contract.
b. The employer shall transport the remains and
personal effects of the seafarer to the Philippines
at employer’s expense except if the death
occurred in a port where local government laws
or regulations do not permit the transport of such
remains. In case death occurs at sea, the
disposition of the remains shall be handled or
dealt with in accordance with the master’s best
judgment. In all cases, the employer/master shall
communicate with the manning agency to advise
for disposition of seafarer’s remains.
c. The employer shall pay the beneficiaries of the
seafarer the Philippine currency equivalent to the
amount of One Thousand US dollars (US$1,000)
Page 90 of 220
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for burial expenses at the exchange rate
prevailing during the time of payment. [Sec. 20,
B.4, POEA-SEC]
When compensation is not payable
[applies to both disability and death benefits]
No compensation and benefits shall be payable in
respect of any injury, incapacity, disability or death of
the seafarer resulting from his willful or criminal act
or intentional breach of his duties, provided however,
that the employer can prove that such injury,
incapacity, disability or death is directly attributable to
the seafarer. [Sec. 20, D, POEA-SEC]
Prescription of claims
All claims arising from this contract shall be made
within three (3) years from the date the cause of action
arises, otherwise the same shall be barred. [Sec. 30,
POEA-SEC]
U.P. LAW BOC LABOR RELATIONS LABOR LAW

LABOR RELATIONS
LABOR LAW

Page 91 of 220
U.P. LAW BOC LABOR RELATIONS
V. LABOR
RELATIONS
A. Right to Self-Organization
BASIS OF RIGHT
1. 1987 Constitution
Sec. 8, Art. III. – 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 shall not be abridged.
Sec. 3, Art. XIII – The state shall afford full
protection to labor, local and overseas, organized
and unorganized, and promote full employment and
equality of opportunities for all.
It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right
to strike in accordance with law. [...]
2. Labor Code
Art. 253. – All persons employed in commercial,
industrial and agricultural enterprises and in
religious, charitable, medical, or educational
institutions, whether operating for profit or not,
shall have the right to self-organization and to form,
join, or assist labor organizations of their own
choosing for purposes of collective bargaining.
Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without
any definite employers may form labor organizations
for their mutual aid and protection.
Art. 254 – Employees of government corporations
established under the corporation code shall have
the right to organize and to bargain collectively with
their respective employers. All other employees in
the civil service shall have the right to form
associations for purposes not contrary to law.
Right to Self-Organization: A Fundamental Right
Self-organization is a fundamental right guaranteed by
the Philippine Constitution and the Labor Code.
Employees have the right to form, join or assist labor
organizations for the purpose of collective bargaining
Page 92 of 220
LABOR LAW
or for their mutual aid and protection. [UST Faculty
Union v. Bitonio, G.R. No. 131235 (1999)]
Infringement of the right to self-organization
It shall be unlawful for any person to restrain, coerce,
discriminate against or unduly interfere with employees
and workers in their exercise of the right to self-
organization (Art. 257)
Scope of right to self-organization
1. Right to form, join or assist labor organizations of
their own choosing for the purpose of collective
bargaining through representatives of their own
choosing (Art. 257);
2. Right to engage in lawful concerted activities for
the same purpose (collective bargaining) or for
their mutual aid and protection (Art. 257)
3. The right of any person to join an organization also
includes the right to leave that organization and
join another one. [Heritage Hotel Manila v. PIGLAS-
Heritage, G.R. No. 177024 (2009)]
4. The right to form or join a labor organization
necessarily includes the right to refuse or refrain
from exercising said right. It is self-evident that just
as no one should be denied the exercise of a right
granted by law, so also, no one should be
compelled to exercise such a conferred right. The
fact that a person has opted to acquire membership
in a labor union does not preclude his subsequently
opting to renounce such membership. [Reyes v.
Trajano, G.R. No. 84433 (1992)]
5. The right of the employees to self-organization is a
compelling reason why their withdrawal from the
cooperative must be allowed. As pointed out by the
union, the resignation of the member-employees is
an expression of their preference for union
membership over that of membership in the
cooperative. [Central Negros Electric Cooperative v.
SOLE, G.R. No. 94045 (1991)]
6. Their freedom to form organizations would be
rendered nugatory if they could not choose their
own leaders to speak on their behalf and to bargain
for them. [Pan-American World Airways, Inc v. Pan-
American Employees Association, G.R. No. L-25094
(1969)]
7. Recognition of the tenets of the sect ... should not
infringe on the basic right of self-organization
granted by the [C]onstitution to workers, regardless
of religious affiliation. [Kapatiran sa Meat and
Canning Division v. Calleja, G.R. No. 82914 (1988)]
U.P. LAW BOC LABOR RELATIONS
1. Coverage
a. All employees
b. Government employees of corporations created
under the Corporation Code
c. Supervisory Employees
d. Aliens with valid working permits
e. Security personnel
a. All Employees
All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable,
medical or educational institutions, whether operating
for profit or not, shall have the right to self-organization
and to form, join or assist labor organizations of their
own choosing for purposes of collective bargaining.
(Presumes an employer-employee relationship)
Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any
definite employers may form labor organizations for
their mutual aid and protection. [Art. 253]
Any employee, whether employed for a definite period
or not, shall, beginning on his first day of service, be
considered an employee for purposes of membership
in any labor union. [Art. 292(c)]
Employee […] shall include any individual whose work
has ceased as a result of or in connection with any
current labor dispute or because of any unfair labor
practice if he has not obtained any other substantially
equivalent and regular employment. [Art. 219(f)]
Employees of non-profit organizations are now
permitted to form, organize or join labor unions of their
choice for purposes of collective bargaining [FEU-Dr.
Nicanor Reyes Medical Foundation Inc. v. Trajano, G.R. No.
76273 (1987)]
b. Government employees of
corporations created under the
Corporation Code
The right to self-organization shall not be denied to
government employees. [Sec. 2(5), Art. IX-B,
Constitution]
Employees of government corporations established
under the Corporation Code shall have the right to
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organize and to bargain collectively with their
respective employers
All other employees in the civil service shall have the
right to form associations for purposes not contrary to
law. [Art. 254]
All government employees can form, join or assist
employees’ organizations of their own choosing for the
furtherance and protection of their interests. They can
also form, in conjunction with appropriate government
authorities, labor-management committees, work
councils and other forms of workers’ participation
schemes to achieve the same objectives. [EO 180 Sec.
2 (1987)]
c. Supervisory Employees
Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of
independent judgment. [Art. 219 (m)]
What is essential is the nature of the employee’s
function and not the nomenclature or title given to
the job which determines whether the employee has
rank-and-file or managerial status or whether he is a
supervisory employee. [Tagaytay Highlands International
Golf Club, Inc. v. Tagaytay Highlands Employees Union-
PTGWO, G.R. 142000 (2003)]
d. Aliens with valid working permits
General Rule: All aliens, natural or juridical, […] are
strictly prohibited from engaging directly or indirectly
in all forms of trade union activities. [Art. 284]
Exception: Aliens may exercise the right to self-
organization and join or assist labor unions for
purposes of collective bargaining, provided the
following requisites are fulfilled:
1. With valid working permits issued by the DOLE;
and
2. They are nationals of a country which grants the
same or similar rights to Filipino workers [Art.
284].
a. As certified by DFA; OR
b. Has ratified either ILO Conventions No. 87
and 98 [Sec. 2, Rule II, Book V, IRR]
U.P. LAW BOC LABOR RELATIONS
e. Security personnel
The security guards and other personnel employed by
the security service contractor shall have the right:
1. To form, join, or assist in the formation of a labor
organization of their own choosing for purposes of
collective bargaining and
2. To engage in concerted activities which are not
contrary to law including the right to strike. [D.O.
No. 14 Series of 2001 Guidelines Governing the
Employment and Working Conditions of Security
Guards and Similar Personnel in the Private
Security Industry)
On Dec. 24, 1986, President C. Aquino issued EO No.
111 which eliminated the provision which made
security guards ineligible to join any labor organization.
In 1989, Congress passed RA 6715 which also did not
impose limitations on the ability of security guards to
join labor organizations. Thus, security guards “may
now freely join a labor organization of the rank-and-file
or that of the supervisory union, depending on their
rank.” [Manila Electric Co. v. SOLE, G.R. No. 91902
(1991)]
2. Ineligibility of Managerial
Employees; Rights of
Supervisory Employees
Art. 255. Ineligibility of Managerial Employees
to Join Any Labor Organization; Right of
Supervisory Employees — Managerial employees
are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be
eligible for membership in the collective bargaining
unit of the rank-and-file employees but may join,
assist or form separate collective bargaining units
and/or legitimate labor organizations of their own.
The rank and file union and the supervisors' union
operating within the same establishment may join
the same federation or national union.
a. Managerial Employees
Managerial employee is one who is vested with
powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline employees.
[Art. 219 (m)]
Managerial employees are not eligible to join, assist or
form any labor organization. […] [Art. 255]
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Managerial functions refer “to powers and prerogatives
to lay down and execute management policies and/or
to hire, transfer, suspend, layoff, recall, discharge or
dismiss employees”. [San Miguel Corporation Supervisors
and Exempt Union v. Laguesma, G.R. No. 110399 (1997)]
High Level/Managerial Government Employees
High-level employees of the government whose
functions are normally considered as policy-making or
managerial or whose duties are of a highly confidential
nature shall not be eligible to join the organization of
rank-and-file government employees. [Sec. 3, E.O. 180]
b. Confidential Employees
Nature of Access Test
Confidential employees, by the nature of their
functions, assist and act in a confidential capacity to, or
have access to confidential matters of, persons who
exercise managerial functions in the field of labor
relations.
Requisites
The employee must:
1. Assist or act in a confidential capacity, AND
2. To persons who formulate, determine, and
effectuate management policies in the field of labor
relations
Stated differently
1. the confidential relationship must exist between
the employees and his supervisor, and
2. the supervisor must handle the prescribed
responsibilities relating to labor relations. [San
Miguel Supervisors and Exempt Union v. Laguesma, G.R.
No. 110399 (1997)]
Rationale of Exclusion of Confidential Employees
While Art. 245 [now 255] of the Labor Code singles out
managerial employees as ineligible to join, assist or form
any labor organization, under the doctrine of necessary
implication, confidential employees are similarly
disqualified…If confidential employees could unionize
in order to bargain for advantages for themselves, then
they could be governed by their own motives rather
than the interest of the employers. Moreover,
unionization of confidential employees for the purpose
of collective bargaining would mean the extension of
the law to persons or individuals who are supposed to
act in the interest of the employers. It is not far-fetched
that in the course of collective bargaining, they might
jeopardize that interest which they are duty bound to
U.P. LAW BOC LABOR RELATIONS
protect. [Metrolab Industries Inc. v. Roldan-Confessor, G.R.
No. 108855 (1996)]
Employees should not be placed in a position involving
a potential conflict of interests. Management should not
be required to handle labor relations matters through
employees who are represented by the union with
which the company is required to deal and who in the
normal performance of their duties may obtain advance
information of the company’s position with regard to
contract negotiations, the disposition of grievances, or
other labor relations matters. [San Miguel Supervisors and
Exempt Union v. Laguesma, G.R. No. 110399 (1997)]
The disqualification of managerial and confidential
employees from joining a bargaining unit for rank and
file employees is already well-entrenched in
jurisprudence. While Art. 245 [now 255] of the Labor
Code limits the ineligibility to join, form and assist any
labor organization to managerial employees,
jurisprudence has extended this prohibition to
confidential employees or those who by reason of
their positions or nature of work are required to
assist or act in a fiduciary manner to managerial
employees and hence, are likewise privy to
sensitive and highly confidential records. [Standard
Chartered Bank Employees Union v SCB, G.R. No. 161933
(2008)]
Function Test: Nomenclature is not controlling
The mere fact that an employee is designated
“manager” does not ipso facto make him one.
Designation should be reconciled with the actual job
description of the employee. [Paper Industries Corp. of the
Philippines. v. Laguesma, G. R. No.101738 (2000)]
Confidential information: Must relate to labor
relations and not from a business standpoint
An employee must assist or act in a confidential
capacity and obtain confidential information
relating to labor relations policies. Exposure to
internal business operations of the company is not per
se a ground for the exclusion in the bargaining unit.
[Coca-Cola Bottlers v. IPTEU, G.R. No. 193798 (2015)]
Doctrine of Necessary Implication
While Art. 245 [now 255] of the Labor Code singles out
managerial employees as ineligible to join, assist or form
any labor organization, under the doctrine of necessary
implication, confidential employees are similarly
disqualified. This doctrine states that what is implied in
a statute is as much a part thereof as that which is
expressed. [Metrolab Industries Inc. v. Roldan-Confessor,
G.R. No. 108855 (1996)]
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c. Supervisory Employees
Supervisory employees may not join rank-and-file
union
Supervisory employees shall not be eligible for
membership in the collective bargaining unit of the
rank-and-file employees but may join, assist or form
separate collective bargaining units and/or labor
organizations of their own. [Art. 255]
Rationale: Supervisory employees, while in the
performance of supervisory functions, become the alter
ego of the management in the making and the
implementing of key decisions at the sub-managerial
level. Certainly, it would be difficult to find unity or
mutuality of interests in a bargaining unit consisting of
a mixture of rank-and-file and supervisory employees.
[Toyota Motor Phil. Corp. v. Toyota Motor Phil. Corp. Labor
Union, G.R. No. 121084 (1997)]
Supervisor and Rank and File Union Affiliation
The rank and file union and the supervisors’ union
operating within the same establishment may join the
same federation or national union. [Art. 255]
Note also: Prior to the enactment of RA 9481, which
inserted a new provision (Art. 245-A, now Art. 256),
the Court held in De La Salle University v. Laguesma
that a local supervisors’ union is not allowed to affiliate
with a national federation of unions of rank and file
employees] only where two conditions concur: First,
the rank-and-file employees 12 are directly under the
authority of supervisory employees. Second, the
national federation is actively involved in union
activities in the company. [De La Salle University Medical
Center and College of Medicine v. Laguesma, G.R. No.
102084 (1998)]
d. Other People Who Cannot Form,
Join or Assist Labor Organizations
i. New Employees
[Persons who] are not employees of [a company] are
not entitled to the constitutional right to join or form a
labor organization for purposes of collective
bargaining. […]The question of whether employer-
employee relationship exists is a primordial
consideration before extending labor benefits under the
workmen's compensation, social security, Medicare,
termination pay and labor relations law. [Singer Sewing
Machine Co. v. Drilon, G.R. No. 91307, 1991]
U.P. LAW BOC LABOR RELATIONS
But employees of the contractor can still form a labor
union. The labor union can be established to bargain
with the contractor but not with the principal employer.
[Prof. Battad]
ii. Employee-member of a Cooperative
General Rule: An employee of a cooperative who is a
member and co-owner thereof cannot invoke the right
to collective bargaining for certainly an owner cannot
bargain with himself or his co-owners. [Batangas-I
Electric Cooperative Labor Union v. Romeo A. Young, G.R.
No. 62386 (1988)]
Irrespective of the degree of their participation in the
actual management of the cooperative, all members
thereof cannot form, assist or join a labor organization
for the purpose of collective bargaining. [Benguet Electric
Cooperative v. Ferrer-Calleja, G.R. No. 79025 (1989)]
Exception: Employees who withdrew their membership
from the cooperative are entitled to form or join a labor
union for the negotiations of a Collective Bargaining
Agreement. [Central Negros Electric Cooperative, Inc. v.
DOLE, G.R. No. 94045 (1991)]
iii. Employees of International
Organizations
International organizations are endowed with some
degree of international legal personality. They are
granted jurisdictional immunity, as provided in their
organization’s constitutions, to safeguard them from
the disruption of their functions.
Immunity […] is granted to avoid interference by the
host country in their internal workings. The
determination [by the executive branch] has been held
to be a political question conclusive upon the Courts in
order not to embarrass a political department of
Government. [Hence], a certification election cannot be
conducted in an international organization to which the
Philippine Government has granted immunity from
local jurisdiction. [International Catholic Migration
Commission v. Calleja, G.R. No. 85750 (1990)]
iv. Members of the AFP, Policemen, Police
Officers, Firemen, and Jail Guards
Members of the AFP, Policemen, Police Officers,
Firemen and Jail Guards are expressly excluded by EO
180, Sec. 4 from the coverage of the EO 180 which
Page 96 of 220
LABOR LAW
provides guidelines for the exercise of the right to
organize of government employees.
SUMMARY - Who Cannot Form, Join or Assist
Labor Organizations
a. Managerial employees
b. Confidential employees
c. Non-employees
d. Member-employee of a cooperative
e. Employees of international organizations
f. High-level government employees
g. Members of the AFP, police officers,
policemen, firemen and jail guards
3. Effect of Inclusion as
Employees Outside the
Bargaining Unit
The inclusion as union members of employees outside
the bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said
employees are automatically deemed removed from the
list of membership of said union. [Art. 256]
4. Non – Abridgement
Art. 257 [246] Non-Abridgment of Right to Self-
Organization. — It shall be unlawful for any
person to restrain, coerce, discriminate against or
unduly interfere with employees and workers in their
exercise of the right to self-organization. Such right
shall include the right to form, join, or assist labor
organizations for the purpose of collective
bargaining through representatives of their own
choosing and to engage in lawful concerted activities
for the same purpose for their mutual aid and
protection, subject to the provisions of Article 264
of this Code.
Art. 259 [248] Unfair Labor Practices of
Employers. — It shall be unlawful for an employer
to commit any of the following unfair labor
practices:
a. To interfere with, restrain or coerce employees
in the exercise of their right to self-organization;
b. To require as a condition of employment that a
person or an employee shall not join a labor
organization or shall withdraw from one to
which he belongs;
U.P. LAW BOC LABOR RELATIONS
Art. 260 [249] Unfair Labor Practices of Labor
Organizations. — It shall be unfair labor practice
for a labor organization, its officers, agents or
representatives:
a. To restrain or coerce employees in the exercise
of their right to self-organization. However, a
labor organization shall have the right to
prescribe its own rules with respect to the
acquisition or retention of membership;
b. To cause or attempt to cause an employer to
discriminate against an employee, including
discrimination against an employee with respect
to whom membership in such organization has
been denied or to terminate an employee on any
ground other than the usual terms and
conditions under which membership or
continuation of membership is made available
to other members;
Art. 303 [288] Penalties. — Except as otherwise
provided in this Code, or unless the acts complained
of hinge on a question of interpretation or
implementation of ambiguous provisions of an
existing collective bargaining agreement, any
violation of the provisions of this Code declared to
be unlawful or penal in nature shall be punished with
a fine of not less than One Thousand Pesos
(P1,000.00) nor more than Ten Thousand Pesos
(P10,000.00), or imprisonment of not less than three
months nor more than three years, or both such fine
and imprisonment at the discretion of the court.
In addition to such penalty, any alien found guilty
shall be summarily deported upon completion of
service of sentence.
Any provision of law to the contrary
notwithstanding, any criminal offense punished in
this Code shall be under the concurrent jurisdiction
of the Municipal or City Courts and the Courts of
First Instance.
Art. 304 [289] Who are Liable When Committed
by Other Than Natural Person — If the offense
is committed by a corporation, trust, firm,
partnership, association or any other entity, the
penalty shall be imposed upon the guilty officer or
officers of such corporation, trust, firm, partnership,
association or entity.
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LABOR LAW
Art. 287 [272] Penalties —
a. Any person violating any of the provisions of
Article 264 of this Code shall be punished by a
fine of not less than one thousand pesos
(P1,000.00) nor more than ten thousand pesos
(P10,000.00) and/or imprisonment for not less
than three months nor more than three (3)
years, or both such fine and imprisonment, at
the discretion of the court. Prosecution under
this provision shall preclude prosecution for the
same act under the Revised Penal Code, and
vice versa.
b. Upon the recommendation of the Minister of
Labor and Employment and the Minister of
National Defense, foreigners who violate the
provisions of this Title shall be subject to
immediate and summary deportation by the
Commission on Immigration and Deportation
and shall be permanently barred from re-
entering the country without the special
permission of the President of the Philippines.
Book V, Rule XXII, Sec. 20, as renumbered by
D.O. 40-H-13
Sec. 20. Criminal Prosecution — The regular
courts shall have jurisdiction over any criminal
action under Article 272 (now 287) of the Labor
Code, as amended, but subject to the required
clearance from the DOLE on cases arising out of or
related to a labor dispute pursuant to the Ministry of
Justice (now Department of Justice) Circular No. 15,
Series of 1982, and Circular No. 9, Series of 1986.
5. Rights and Conditions of
Membership
Note: No. 5 is not included in the 2019 Bar Syllabus
a. Nature of Relationship
MEMBER-LABOR UNION
The nature of the relationship between the union and
its members is fiduciary in nature, which arises from the
dependence of the employee on the union, and from
the comprehensive power vested in the union with
respect to the individual. The union may be considered
but the agent of its members for the purpose of
securing for them fair and just wages and good working
conditions. [Heirs of Cruz v. CIR, G.R. No. L-23331-32
(1969)]
U.P. LAW BOC LABOR RELATIONS
Admission and Discipline of Members
No arbitrary or excessive initiation fees or fines. No
arbitrary or excessive initiation fees shall be required of
the members of a legitimate labor organization nor shall
arbitrary, excessive or oppressive fine and forfeiture be
imposed. [Art. 250(e)]
Prohibition on subversive activities or membership
No labor organization shall knowingly admit as
members or continue in membership any individual
who:
1. belongs to a subversive organization; or
2. who is engaged directly or indirectly in any
subversive activity;
Unions cannot arbitrarily exclude qualified
applicants
Unions are not entitled to arbitrarily exclude qualified
applicants for membership, and a closed--shop
provision would not justify the employer in discharging,
or a union in insisting upon the discharge of, an
employee whom the union thus refuses to admit to
membership, without any reasonable ground therefor.
Needless to say, if said unions may be compelled to
admit new members, who have the requisite
qualifications, with more reason may the law and the
courts exercise the coercive power when the employee
involved is a long standing union member, who, owing
to provocations of union officers, was impelled to
tender his resignation, which he forthwith withdrew or
revoked. [Salunga v. CIR, G.R. No. L-22456 (1967)]
Members who seek destruction of union lose right to
remain as members
Inherent in every labor union, or any organization for
that matter, is the right of self-preservation. When
members of a labor union, therefore, sow the seeds of
dissension and strife within the union; when they seek
the disintegration and destruction of the very union to
which they belong, they thereby forfeit their rights to
remain as members of the union which they seek to
destroy. [Villar v. Inciong, No. L-50283-84 (1983)]
b. Union Chartering
i. Definitions
Affiliate
An independent union affiliated with a federated,
national union or a chartered local which was
subsequently granted independent registration but did
not disaffiliate from its federation, reported to the
Page 98 of 220
LABOR LAW
Regional Office and the Bureau in accordance with
Rule III, Secs. 6 and 7 [Sec. 1(b), Rule I, Book V, IRR]
Independent Union
A labor organization operating at the enterprise level
that acquired legal personality through independent
registration under Art. 234 of the Labor Code and Rule
III, Sec. 2-A [Sec. 1(x), Rule I, Book V
National Union or Federation
A group of legitimate labor unions in a private
establishment organized for collective bargaining or for
dealing with employers concerning terms and
conditions of employment for their member union or
for participating in the formulation of social and
employment policies, standards and programs,
registered with the BLR in accordance with Rule III
Sec. 2-B[Sec. 1(ll), Rule I, Book V, IRR]
Labor Union-Federation
Local unions do not owe their creation and existence to
the national federation to which they are affiliated but,
instead, to the will of their members, […] The local
unions remain the basic units of association, free to
serve their own interests subject to the restraints
imposed by the constitution and by-laws of the national
federation, and free also to renounce the affiliation
upon the terms laid down in the agreement which
brought such affiliation into existence. [Philippine
Skylanders, Inc. v. NLRC, G.R. 127374 (2002)]
Chartered Local (Local Chapter)
A labor organization in the private sector operating at
the enterprise level that acquired legal personality
through registration with Regional Office [Sec. 1(j),
Rule I, Book V, IRR]
A duly registered federation or national union may
directly create a local chapter by issuing a charter
certificate indicating the establishment of the local
chapter. The chapter shall acquire legal personality only
for purposes of filing a petition for certification election
from the date it was issued a charter certificate.
The chapter shall be entitled to all other rights and
privileges of a legitimate labor organization only
upon the submission of the following documents in
addition to its charter certificate:
1. The names of the chapter's officers, their
addresses, and the principal office of the chapter;
and
2. The chapter's constitution and by-laws: Provided,
That where the chapter's constitution and by-laws
are the same as that of the federation or the
U.P. LAW BOC LABOR RELATIONS LABOR LAW

national union, this fact shall be indicated ii. Purpose of Affiliation

accordingly.
To foster the free and voluntary organization of a
The additional supporting requirements shall be strong and united labor movement [Art. 218-A(c)]
1. Certified under oath by:
a. Secretary; or The sole essence of affiliation is to increase, by
b. Treasurer collective action, the common bargaining power of
2. Attested by: Its president [Art. 241] local unions for the effective enhancement and
protection of their interests. Admittedly, there are times
Lesser requirements for Chartered locals when without succor and support local unions may find
The intent of the law in imposing less requirements in it hard, unaided by other support groups, to secure
the case of a branch or local of a registered federation justice for themselves. [Philippine Skylanders, Inc. v.
or national union is to encourage the affiliation of a NLRC, G.R. No. 127374 (2002)]
local union with a federation or national union in order
to increase the local unions’ bargaining powers iii. Nature of Relationship: Agency
respecting terms and conditions of labor. [SMCEU-
PTGWO v. SMPEU-PDMP, G.R. No. 171153 (2007)] The mother union, acting for and in behalf of its
affiliate, had the status of an agent while the local union
Trade Union Centers cannot create locals or remained the basic unit of the association, free to serve
chapters the common interest of all its members subject only to
the restraints imposed by the constitution and by-laws
Art. 241 mentions only “a duly registered federation or of the association. [...] The same is true even if the local
national union.” is not a legitimate labor organization. [Filipino Pipe and
Foundry Corp v. NLRC, G.R. No. 115180 (1998)]
The solemn power and duty of the Court to interpret
and apply the law does not include the power to correct iv. Effect of Affiliation
by reading into the law what is not written therein.
[SMCEU-PTGWO v. SMPEU-PDMP, G.R. No. Inclusion of [the federation’s initials] in the registration
171153 (2007)] is merely to stress that they are its affiliates at the time
of registration. It does not mean that said local unions
National Union or Federation v. Trade Unions cannot stand on their own. [Adamson v CIR, G.R. No.
National Union or L-35120 (1984)]
Trade Unions
Federation
With at least ten (10) Composed of a group of Mere affiliation does not divest the local union of its
locals or chapters (or registered national own personality, neither does it give the mother
independent unions unions or federations federation the license to act independently of the local
[Sec. 2-B(5), Rule III, union. It only gives rise to a contract of agency, where
Book V, IRR], each of the former acts in representation of the latter. Hence,
which must be a duly local unions are considered principals while the
recognized collective federation is deemed to be merely their agent. [Insular
bargaining agent [Art. Hotel Employees Union NFL v. Waterfront Insular Hotel,
244] G.R. No. 174040-41 (2010)]
Can directly create local Cannot [SMCEU-
or chapter [Art. 241] PTGWO v. SMPEU- v. Disaffiliation
PDMP, G.R. No.
171153 (2007)] We upheld the right of local unions to separate from
their mother federation on the ground that as separate
and voluntary associations, local unions do not owe
their creation and existence to the national federation
to which they are affiliated but, instead, to the will of
their members. [Philippine Skylanders, Inc. v. NLRC, G.R.
No. 127374 (2002)]

Page 99 of 220
U.P. LAW BOC LABOR RELATIONS
A local union has the right to disaffiliate from its
mother union or declare its autonomy. A local union,
being a separate and voluntary association, is free to
serve the interests of all its members including the
freedom to disaffiliate or declare its autonomy from the
federation to which it belongs when circumstances
warrant, in accordance with the constitutional
guarantee of freedom of association. [Malayang Samahan
ng mga Manggagawa sa M. Greenfield, Inc. v. Ramos, G.R.
No. 113907 (2000)]
[The federation] is entitled to receive the dues from [the
employer] as long as the [local] union is affiliated with
it and [the employer is] authorized by their employees
(members of [the local] union) to deduct union dues.
[Volkschel Labor Union v. BLR, G.R. No. L-45824
(1985)]
Period of Disaffiliation
Generally, a labor union may disaffiliate from the
mother union to form a local or independent union
only during the 60-day freedom period immediately
preceding the expiration of the CBA. However, even
before the onset of the freedom period, disaffiliation
may be carried out when there is a shift of allegiance on
the part of the majority of the members of the union.
[Alliance of Nationalist and Genuine Labor Organization v.
Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay
Spinning Mills, G.R. No. 118562 (1996)]
[A] local union which has affiliated itself with a
federation is free to sever such affiliation anytime and
such disaffiliation cannot be considered disloyalty. In
the absence of specific provisions in the federation’s
constitution prohibiting disaffiliation or the declaration
of autonomy of a local union, a local may dissociate
with its parent union. [Malayang Manggagawa sa M.
Greenfield v. Ramos, G.R. No. 113907 (2000)]
EFFECT OF DISAFFILIATION
On legal personality
A registered independent union retains its legal
personality while a chartered local loses its legal
personality unless it registers itself.
No effect on CBA
A disaffiliation does not disturb the enforceability and
administration of a collective agreement; it does not
occasion a change of administrators of the contract nor
even an amendment of the provisions thereof.
[Volkschel Labor Union v. BLR, No. L-45824 (1985)]
Page 100 of 220
LABOR LAW
Obligation to pay union dues is coterminous with
membership
The obligation of an employee to pay union dues is
coterminous with his affiliation or membership. “The
employees’ check-off authorization, even if declared
irrevocable, is good only as long as they remain
members of the union concerned”. A contract between
an employer and the parent organization as bargaining
agent for the employees is terminated by the
disaffiliation of the local of which the employees are
members. [Volkschel Labor Union v. BLR, No. L-45824
(1985)]
Power to represent principal severed
By [the local union’s disaffiliation from the federation],
the vinculum that previously bound the two entities was
completely severed. [The federation] was divested of
any and all power to act in representation of the union.
Thus, any act performed by [the federation] affecting
the interests and affairs of the [local union] is rendered
without force and effect. [ANGLO v. Samana, G.R. No.
118562 (1996)]
SUBSTITUTIONARY DOCTRINE
The “substitutionary” doctrine provides that the
employees cannot revoke the validly executed collective
bargaining contract with their employer by the simple
expedient of changing their bargaining agent. And it is
in the light of this that the phrase “said new agent would
have to respect said contract” must be understood. It
only means that the employees, thru their new
bargaining agent, cannot renege on their collective
bargaining contract, except of course to negotiate with
management for the shortening thereof. [Benguet
Consolidated v. BCI Employees and Workers Union-PAFLU,
G.R. No. L-24711 (1968)]
Conditions to apply the doctrine
1. change of bargaining agent (through affiliation,
disaffiliation, or other means); and
2. existing CBA with the previous bargaining agent
[Benguet Consolidated v. BCI Employees and
Workers Union-PAFLU, G.R. No. L-24711
(1998)]
Effects:
1. new bargaining agent cannot revoke and must
respect the existing CBA; and
2. it may negotiate with management to shorten the
existing CBA’s lifetime
U.P. LAW BOC LABOR RELATIONS LABOR LAW

Procedure for Union Registration

(Book V, Rule IV)

Page 101 of 220

 U.P. LAW BOC
Independent Union
1. Name of labor union and its
principal address
2. Name of its officers and their
respective addresses
3. Approximate number of
employees in the bargaining
unit where it seeks to operate
4. Statement that it is not a
chartered local of any
federation or nat’l union
5. Minutes of organizational
meetings and list of
participating employees
6. Name of all its members
comprising at least 20% of
employees in BU
7. Annual financial reports (if it
has been in existence for more
than 1 year) or statement that
no collection has been made
8. CBL, minutes of its adoption
and ratification, and list of
participating EEs (which can be
dispensed with if CBL adopted
during organizational meeting)
9. Registration Fee (P50.00)
10. Certification under oath by
secretary or treasurer and
attestation by President of all
the requirements [Progressive
Dev’t Corp v. SOLE, G.R. No.
96425 (1992); Phoenix Iron and
Steel Corp. v. SOLE, G.R. No.
112141 (1995)]
Summary of Union Registration Requirements (Art. 234-237; Rule III, Sec. 2)
National Union or Federation
1. Name of federation and its
principal addresses
2. Name of its officers and their
respective addresses
3. Minutes of organizational
meetings and list of participating
employees
4. Annual financial reports (if it has
been in existence for more than
one year) or statement that no
collection has been made
5. CBL, minutes of its adoption and
ratification, and list of
participating employees (list may
be dispensed with if ratification
was done during organizational
meeting)
6. Resolution of affiliation of at
least 10 LLOs (independent or
chartered locals) which are the
SEBA in their BU
7. Names and addresses of
companies where affiliates
operate and list of all members of
affiliates in each company
involved
8. Registration fee (P50.00
9. Certification under oath by
secretary or treasurer and
attestation by President of all the
requirements
LABOR RELATIONS LABOR LAW
Worker’s association
Chartered Local Worker’s Association operating in more than
one region
Charter certificate issued by 1. Name of association and its Same as worker’s
national union or federation principal address association
2. Name of officers and their +
Other requirements (to be respective addresses Resolution of
entitled to all other rights 3. Minutes of organizational meetings membership of each
and privileges of LLO) and list of participating members member association, duly
a. Names of 4. Annual financial reports (if it has approved by its board of
local/chapter’s officers been in existence for more than one directors
and their addresses year) or statement that no collection
b. Principal office of has been made
local/chapter 5. CBL, minutes its of adoption and
c. Chapter’s CBL, or ratification, list of participating
statement that chapter members, and date of ratification
has adopted the CBL of (unless ratification was done during
federation or national organizational meeting)
union 6. Registration fee (P50.00)
d. Certification under oath 7. Certification under oath by
by secretary and Secretary or treasurer and attestation
attestation by President by President
Page 102 of 220
 U.P. LAW BOC LABOR RELATIONS
B. Bargaining Unit
Definition
“Bargaining Unit” refers to a group of employees
sharing mutual interests within a given employer unit,
comprised of all or less than all of the entire body of
employees in the employer unit or any specific
occupational or geographical grouping within such
employer unit. [Sec. 1(e), Rule I, Book V, IRR]
It is “a group of employees of a given employer,
comprised of all or less than all of the entire body of
employees, which the collective interests of all the
employees indicate to be best suited to serve reciprocal
rights and duties of the parties consistent with equity to
the employer. [Belyca Corp. v. Calleja, G.R. No. 77395
(1988) citing Rothenberg]
Functions of an Appropriate Bargaining Unit
1. An ELECTORAL DISTRICT. – It marks the
boundaries of those who may participate in a
certification election.
2. An ECONOMIC UNIT. – They are a group of
employees with community of interests.
3. A SOVEREIGN BODY. – It selects the sole and
exclusive bargaining agent.
Role of a bargaining unit
The labor organization designated or selected by the
majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of
the employees in such unit for the purpose of collective
bargaining. [Art. 267]
Right of individual or group of employees to
present grievances
An individual employee or group of employees shall
have the right at any time to present grievances to their
employer. [Art. 267]
CBA Coverage
It is a well-settled doctrine that the benefits of a
collective bargaining agreement extend to the laborers
and employees in the collective bargaining unit,
including those who do not belong to the chosen
bargaining labor organization. [Mactan Workers Union v.
Aboitiz, G.R. No. L-30241 (1972)]
Note: An employee employed, whether for a definite
period is not, is an EE for purposes of joining a union
[Art. 292(c)]. But, whether or not a union member, an
EE part of the CBU is entitled to CBA benefits unless
excluded under the CBA.
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LABOR LAW
Effect of Prior Agreement
The express exclusion of the computer operators and
discipline officers from the bargaining unit of rank-and-
file employees in the 1986 CBA does not bar any re-
negotiation for the future inclusion of the said
employees in the bargaining unit. During the freedom
period, the parties may not only renew the existing
collective bargaining agreement but may also propose
and discuss modifications or amendments thereto. [De
La Salle University v. DLSU Employees Association EA,
G.R. No. 109002, (2000)]
Rationale
[A prior agreement] as to the exclusion [of monthly-
paid rank-and-file employees] from the bargaining
union of the [daily-paid] rank-and-file or from forming
their own union […] can never bind subsequent
federations and unions as [employees were not privy to
that agreement]. And even if [they were privy], it can
never bind subsequent federations and unions because
it is a curtailment of the right to self--organization
guaranteed by the labor laws [General Rubber & Footwear
Corp. v. BLR, G.R. No. 74262 (1987)]
Effect of Inclusion of Employees Outside the
Bargaining Unit or Commingling
General Rule: It shall not be a ground for the cancellation
of the registration of the union. Said employees are
automatically deemed removed from the list of
membership of said union. [Art. 256]
Exception: Unless such mingling was brought about by
misrepresentation, false statement or fraud under Art.
247 (Grounds for cancellation of Union Registration)
of the Labor Code. [SMCC-Super v. Charter Chemical and
Coating Corporation, G.R. No. 169717 (2011)]
Corporate Entities
General Rule: Two companies having separate juridical
personalities shall NOT be treated as a single bargaining
unit. [Diatagon Labor Federation Local v. Ople, G.R. No. L-
44493-94 (1980)]
Exception: Pervasive Unitary Aspect of Management Doctrine
The cross-linking of the agencies’ command, control,
and communication systems indicate their unitary
corporate personality. Accordingly, the veil of
corporate fiction [...] should be lifted for the purpose of
allowing the employees of the three agencies to form a
single labor union. [Philippine Scouts Veterans v. Torres,
G.R. No. 92357 (1993)]
 U.P. LAW BOC LABOR RELATIONS
A settled formulation of the doctrine of piercing the
corporate veil is that when two business enterprises are
owned, conducted, and controlled by the same parties,
both law and equity will, when necessary to protect the
rights of third parties, disregard the legal fiction that
these two entities are distinct and treat them as identical
or as one and the same. [Ang Lee v. Samahang Manggagawa
ng Super Lamination, G.R. No. 193816 (2016)]
Determining whether or not to establish separate
bargaining units
The fact that the businesses are related, that some of
the employees are the same persons working in the
other company and the physical plants, offices and
facilities are in the same compound are NOT sufficient
to justify piercing the corporate veil. [Indophil Textile
Mills Workers Union v. Calica, G.R. No. 96490 (1992)] )
Spun-off corporations
The transformation of the companies is a management
prerogative and business judgment which the courts
cannot look into unless it is contrary to law, public
policy or morals. [...] Considering the spin-offs, the
companies would consequently have their respective
and distinctive concerns in terms of the nature of work,
wages, hours of work and other conditions of
employment. [...] The nature of their products and
scales of business may require different skills, volumes
of work, and working conditions which must
necessarily be commensurate by different
compensation packages. [San Miguel Union v. Confesor,
G.R. No. 111262 (1996)]
TEST TO DETERMINE THE
CONSTITUENCY OF AN APPROPRIATE
BARGAINING UNIT – 4 Factors:
1. Will of the Employees (Globe Doctrine)
2. Affinity and unity of employees’ interest
(Substantial Mutual Interests Rule)
3. Prior collective bargaining history
4. Employment status [Democratic Labor Association v.
Cebu Stevedoring Co. Inc, G.R. No. L-10321 (1958);
University of the Philippines v. Ferrer-Calleja, G.R. No.
96189 (1992)]
Note: Where the employment status was not at issue but
the nature of work of the employees concerned; the
Court stressed the importance of the 2nd factor. [Belyca
Corp. v. Calleja, G.R. No. 77395 (1988)]
Page 104 of 220
LABOR LAW
Other factors:
1. Geography and Location
2. Policy of avoiding fragmentation of the bargaining
unit
Globe Doctrine
A practice designated as the “Globe doctrine,”
sanctions the holding of a series of elections, not for the
purpose of allowing the group receiving an overall
majority of votes to represent all employees, but for the
specific purpose of permitting the employees in each of
the several categories to select the group which each
chooses as a bargaining unit. [Kapisanan ng mga
Manggagawa sa Manila Road Co. v. Yard Crew Union, G.R.
Nos. L-16292-94 (1960)]
Rationale: Highly skilled or specialized technical workers
may choose to form their own bargaining unit because
they may be in better position to bargain with the
employer considering the market value of their skills.
Community or Mutuality of Interests
The basic test in determining the appropriate bargaining
unit is that a unit, to be appropriate, must affect a
grouping of employees who have substantial, mutual
interests in wages, hours, working conditions and other
subjects of collective bargaining. [UP v. Ferrer-Calleja,
G.R. No. 96189, (1992)]
Rationale: There are greater chances of success for the
collective bargaining process. The bargaining unit is
designed to maintain the mutuality of interest among
the employees in such unit.
When the interest between groups has changed over
time, there is reason to dissolve, change or expand a
certain bargaining unit.
Prior Collective Bargaining History
The existence of a prior collective bargaining history is
neither decisive nor conclusive in the determination of
what constitutes an appropriate bargaining unit. [Sta.
Lucia East Commercial Corporation v. SOLE, G.R. No.
162355 (2009)]
Employment Status
Among the factors to be considered [is the]
employment status of the employees to be affected
[regular, casual, seasonal, probationary, etc.], that is the
positions and categories of work to which they belong
[....] [Belyca Corp. v. Calleja, G.R. No. 77395 (1988)]
 U.P. LAW BOC LABOR RELATIONS
Geography and Location
Geography and location only play a significant role if:
a. The separation between the camps [...] and the
different kinds of work in each [...] all militate in
favor of the system of separate bargaining units;
b. [When] the problems and interests of the workers
are peculiar in each camp or department;
c. The system of having one collective bargaining unit
in each camp [...] [has operated satisfactorily in the
past.] [Benguet Consolidated Inc. and Balatok Mining Co.
v. Bobok Lumberjack Association, G.R. No. L-11029
(1958)]
Policy of Avoiding Fragmentation of the
Bargaining Unit
It bears noting that the goal of the DOLE is [geared]
towards “a single employer wide unit which is more to
the broader and greater benefit of the employees
working force.” The philosophy is to avoid
fragmentation of the bargaining unit so as to strengthen
the employees’ bargaining power with the management.
To veer away from such goal would be contrary,
inimical and repugnant to the objectives of a strong and
dynamic unionism. [Phil. Diamond Hotel and Resort Inc v.
Manila Diamond Hotel and Employees Union, G.R. No.
158075 (2006)]
Confidential employees lumped with management
Since the confidential employees are very few in
number and are by practice and tradition identified with
the supervisors in their role as representatives of
management I the rank and file employees, such
identity of interest has allowed their inclusion in the
bargaining unit of supervisors-managers for purposes
of collective bargaining in turn as employees in relation
to the company as their employer. [Filoil Refinery Corp.
v. Filoil Supervisory and Confidential Employees
Union, G.R. No. L-26736 (1972)]
Page 105 of 220
LABOR LAW
C. Bargaining Representative
The labor organization designated or selected by the
majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of
the employees in such unit for the purpose of collective
bargaining. [Art. 267]
Labor Management Council
Any provision of law to the contrary notwithstanding,
workers shall have the right, subject to such rules and
regulations as the Secretary of Labor and Employment
may promulgate, to participate in policy and decision-
making processes of the establishment where they are
employed insofar as said processes will directly affect
their rights, benefits and welfare. For this purpose,
workers and employers may form labor-management
councils. […] [Art. 267]
Selection of Representatives
In organized establishments, the workers’
representatives to the council shall be nominated by the
exclusive bargaining representative. In establishments
where no legitimate labor organization exists, the
workers representative shall be elected directly by the
employees at large. [Sec. 2, Rule XXI, Book V, IRR]
1. Qualification of Voters
Eligible Voter
Eligible voter refers to a voter belonging to the
appropriate bargaining unit that is the subject of the
petition for certification election [Sec. 1(q), Rule VIII,
Book V, IRR]
All employees who are members of the appropriate
bargaining unit three (3) months prior to the filing of
the petition shall be eligible to vote. [Sec. 6, Rule IX,
Book V, IRR]
Note: Rule VIII, Sec. 14 (f) and Rule IX, Sec. 6 refer to
employees as those employed 3 months prior to the
issuance of the order/the filing of the petition for
certification election while Rule IX, Sec. 2 reckon the
period of employment from the “time of filing the
petition”. This difference has not been resolved in any
case before the Supreme Court.
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

All rank and file employees in the appropriate 2. Determination of

bargaining unit, whether probationary or permanent are
entitled to vote. [...] The Code makes no distinction as Representation Status
to their employment status. [...] All they need to be
eligible to support the petition is to belong to a Methods of Establishing Majority Status
bargaining unit. [Airtime Specialists, Inc. v. Ferrer-Calleja, a. Sole and Exclusive Bargaining Agent (SEBA)
G.R. No. 80612-16 (1990)] Certification
b. Consent Election
Rationale for Non-Distinction Policy c. Certification Election
Collective bargaining covers all aspects of the d. Run-Off Election
employment relation and the resultant CBA binds all e. Re-Run election
employees in the bargaining unit. All rank and file
employees, probationary or permanent, have a Note: D.O. No. 40-I-15 replaced Voluntary Recognition
substantial interest in the selection of the bargaining with SEBA certification, as of September 7, 2015.
representative. [Airtime Specialists, Inc. v Ferrer-Calleja,
supra.] a. SEBA Certification
Dismissed employees [Sec. 6, Rule IX, Book V, IRR] PROCEDURE [RULE VII, BOOK V, IRR]
General Rule: [Dismissed] employees [who] contested 1. File Request of SEBA Certification (Sec. 1)
legality of the dismissal in a forum of appropriate Who: Any legitimate labor organization
jurisdiction at the time of the issuance of the order for File where: Regional Office which issued its
conduct of a certification election certificate of registration or certificate of creation
of chartered local
Exception: Dismissal was declared valid in a final
judgment at the time of the conduct of the certification 2. Indicate in the request (Sec. 2):
election. a. Name and address of the requesting legitimate
labor organization;
Disagreement over voters’ list over eligibility of b. Name and address of the company where it
voters operates;
All contested voters shall be allowed to vote [but] their c. Bargaining unit sought to be represented;
votes shall be segregated and sealed in individual d. Approximate number of employees in the
envelopes. [Sec. 6, Rule IX, Book V, IRR] bargaining unit; and
e. Statement of the existence/non-existence of
Voting List and Voters other labor organization/CBA.
The basis of determining voters may be agreed upon by
the parties (i.e. the use of payroll). [Acoje Workers Union Certificate of Duly Certified by
v. NAMAWU, G.R. No. L-18848 (1963)]
President of requesting
Registration
union
Non-participation in previous election has no
Creation of chartered President of the
effect
local federation of the local
[Failure to take part in previous elections is no bar to
Both certificates should be attached to the request
the right to participate in future elections.] No law,
administrative rule or precedent prescribes forfeiture of
3. Regional Director shall act on the request (Sec. 3)
the right to vote by reason of neglect to exercise the
When: Within one (1) day from submission of
right in past certification elections. [Reyes v. Trajano, G.R.
request
No. 84433 (1992)]
Action:
a. Determine whether request is compliant with
Sec. 2 and whether the bargaining unit sought
to be represented is organized or not; and
b. Request a copy of the payroll

Page 106 of 220

 U.P. LAW BOC LABOR RELATIONS
If the Regional Director finds it deficient, he/she shall
advise the requesting union or local to comply within
ten (10) days from notice. Failure to comply within the
prescribed period shall be deemed withdrawal of the
request.
If Unorganized Establishment (Sec. 4)
a. Finding of only 1 legitimate labor organization –
Regional Director shall call a conference within
five (5) working days for the SUBMISSION of:
i. Names of employees in the covered
bargaining unit who signify support for
certification; [and these] employees
comprise at least majority of the number of
employees in the covered bargaining unit;
and
ii. Certification under oath by the president of
the requesting union or local that all
documents submitted are true and correct
based on personal knowledge
b. Failure to Complete Requirements for SEBA
Certification - the request for SEBA certification
shall be referred to the election officer for the
conduct of election pursuant to Rule IX of this
rules.
Note: If there is more than one Legitimate Labor
Organization, Art. 269 applies
If Organized Establishment (Sec. 6)
If the Regional Director finds the establishment
organized he/she shall refer it to the mediator-
arbitrator for determination and propriety of
conducting a certification election.
4. Regional Director shall act on the submission (Sec.
4.1)
The request shall be referred to
Incomplete
Election Officer for the conduct of
requirements
election pursuant to Rule IX.
Complete Regional Director shall issue a
requirements certification as SEBA
5. Regional Director shall post the SEBA
Certification (Sec. 4.1)
Period: Fifteen (15) consecutive days
Where: At least two (2) conspicuous places in the
establishment or covered bargaining unit.
Page 107 of 220
LABOR LAW
EFFECT OF SEBA CERTIFICATION (Sec. 4.2)
Upon the issuance of the [SEBA Certification], the
certified union or local shall enjoy all the rights and
privileges of an exclusive bargaining agent of all the
employees in the covered bargaining unit.
The certification shall bar the filing of a [PCE] by any
labor organization for a period of one (1) year from the
date of its issuance. Upon expiration of this one-year
period, any legitimate labor organization may file a
[PCE] in the same bargaining unit represented by the
certified labor organization, unless a [CBA] between the
employer and the certified labor organization was
executed and registered with the Regional Office in
accordance with Rule XVII.
b. Consent Election
Consent Election means the election voluntarily
agreed upon by the parties with or without the
intervention by DOLE [Sec. 1(i), Rule I, Book V, IRR]
Procedure [Sec. 11, Rule VIII, Book V, IRR]
1. The parties may agree to hold a consent election
a. Where no petition for certification election
was filed; or
b. Where a petition for certification election had
been filed, and upon the intercession of Med-
Arbiter [Sec. 25, Rule VIII, Book V, IRR]
2. Mediator-Arbiter shall call for the consent election,
reflecting the parties’ agreement and the call in the
minutes of the conference. Regional Director or
authorized representative shall determine the
Election Officer by raffle in the presence of
representatives of the contending unions if they so
desire
3. First pre-election conference is scheduled within
ten (10) days from the date of the agreement.
Subsequent conferences may be called to expedite
and facilitate the holding of the consent election.
c. Certification Election
Certification Election is the process of determining,
through secret ballot, the sole and exclusive
representative of the employees in an appropriate
bargaining unit for purposes of collective bargaining or
negotiation. [Sec. 1(i), Rule I, Book V, IRR]
 U.P. LAW BOC LABOR RELATIONS
Purpose
The purpose of a certification election is precisely the
ascertainment of the wishes of the majority of the
employees in the appropriate bargaining unit: to be or
not to be represented by a labor organization, and in the
affirmative case, by which particular labor organization.
[Reyes v. Trajano, G.R. No. 84433 (1992)]
Nature of proceeding
Certification election is the most effective and the most
democratic way of determining which labor
organization can truly represent the working force in
the appropriate bargaining unit of a company
[Samangang Manggawa sa PERMEX v SOLE, G.R. No.
107792 (1998)]
It is a fundamental postulate that the will of the majority
given expression in an honest election with freedom on
the part of the voters to make their choice, is
controlling. [PLUM Federation of Industrial and Agrarian
Workers v. Noriel, G.R. No. L-48007 (1978)]
[It] is not a ‘litigation’ [...] but a mere investigation of a
non-adversary, fact-finding character. [...] The
determination of the proceeding does not entail the
entry of remedial orders or redress of rights, but
culminates solely in an official designation of bargaining
units and an affirmation of the employees’ expressed
choice of bargaining agent. [Angat River Irrigation System
v. Angat River Worker’s Union (PLUM), G.R. Nos. L-
10943 and L-10944 (1957)]
Technical rules and objections should not hamper the
correct ascertainment of the labor union that has the
support or confidence of the majority of the workers
and is thus entitled to represent them in their dealings
with management. [Port Workers Union v. Laguesma, G.R.
Nos. 94929-30, (1992)]
Certification Election Union Election
To determine the To elect union officers
Exclusive Bargaining
Agent
All members of the Only union members
appropriate bargaining may vote.
unit may vote.
Who May Vote [Sec. 6, Rule IX, Book V, IRR]
All employees who are members of the appropriate
bargaining unit three (3) months prior to the filing of
the petition/request shall be eligible to vote. An
employee who has been dismissed from work but has
contested the legality of the dismissal in a forum of
appropriate jurisdiction at the time of the issuance of
Page 108 of 220
LABOR LAW
the order for the conduct of a certification election shall
be considered a qualified voter, unless his/her dismissal
was declared valid in a final judgment at the time of the
conduct of the certification election.
In case of disagreement over the voters’ list or over the
eligibility of voters, all contested voters shall be allowed
to vote. But their votes shall be segregated and sealed
in individual envelopes.
WHO MAY FILE [Sec. 1, Rule VIII, Book V, IRR]
1. Legitimate labor organization
“Legitimate labor organization” means any labor
organization duly registered with the Department
of Labor and Employment, and includes any
branch or local thereof. [Art. 219 (h)]
2. Local/chapter that has been issued a charter
certificate
A duly registered federation or national union may
directly create a local chapter by issuing a charter
certificate indicating the establishment of the local
chapter. The chapter shall acquire legal personality
only for purposes of filing a petition for
certification election from the date it was issued a
charter certificate. [Art. 241]
3. National union or federation that has issued a
charter certificate to its local/chapter [in
behalf of the latter]
A group of legitimate labor unions in a private
establishment organized for collective bargaining
or for dealing with employers concerning terms
and conditions of employment for their member
unions or for participating in the formulation of
social and employment policies, standards and
programs, registered with the BLR in accordance
with Rule III Sec. 2-B. [Sec. 1 (ll), Rule I, Book V,
IRR]
The national union or federation shall not be
required to disclose the names of the local chapter’s
officers and members. [Art. 268; Sec. 1, Rule VIII,
Book V, IRR]
4. Employer (when requested to bargain
collectively and no existing CBA)
Requisites:
a. Employer is requested to bargain collectively;
AND
b. No existing registered CBA in the unit [Art.
270]
 U.P. LAW BOC LABOR RELATIONS
Bystander rule
In all cases, whether the petition for certification
election is filed by an employer or a legitimate labor
organization, the employer shall not be considered a
party thereto with a concomitant right to oppose a
petition for certification election. [Art. 271]
The employer’s participation shall be limited to:
a. being notified or informed of petitions of such
nature
b. submitting the list of employees during the pre-
election conference should the Med-Arbiter act
favorably on the petition [Art. 271]
The principle of the employer as by-stander shall be
strictly observed throughout the conduct of
certification election. The employer shall not harass,
intimidate, threat[en], or coerce employees before,
during and after elections. [Sec. 1, Rule IX, Book V,
IRR]
However, manifestation of facts that would aid the
[Med-Arbiter] in expeditiously resolving the petition
such as existence of a contract-bar, one year bar or
deadlock bar may be considered. [Sec. 1, Rule VIII,
Book V, IRR]
The Contract-Bar Rule shall apply in any of the
following: (1) when there exists an unexpired registered
CBA; or (2) when there is no challenge on the
representation status of the incumbent union during the
freedom period. [D.O. No. 40-1-15]
The employer is not a party to a certification election,
which is the sole or exclusive concern of the workers.
[...] The only instance when the employer may be
involved in that process is when it is obliged to file a
petition for certification election on its workers’ request
to bargain collectively pursuant to Art. 258 [now Art.
270]. [Hercules Industries, Inc. v Sec. of Labor, G.R. No.
96255 (1992)]
[The employer] did not possess the legal personality to
file a motion to dismiss the petition for certification
election even if based on the ground that its supervisory
employees are in reality managerial employees. It is
well-settled that an employer has no standing to
question a certification election since this is the sole
concern of the workers. The only exception to this rule
is Art. 258 [now Art. 270]. [PT&T v Laguesma, G.R. No.
101730 (1993)]
Page 109 of 220
LABOR LAW
[A] company’s interference in the certification election
below by actively opposing the same [...] unduly creates
a suspicion that it intends to establish a company union.
[Oriental Tin Can Labor Union v. Secretary of Labor, G.R.
No. 116751 (1998)]
VENUE FOR FILING PETITION
File with the Regional Office which issued the
petitioning union’s certificate of registration or
certificate of creation of chartered local.
At [petitioner’s option], [it may file] the petition and its
supporting documents [...] online. [Sec. 2, Rule VIII,
Book V, IRR]
Where two or more petitions involving the same
bargaining unit [Sec. 2, Rule VIII, Book V, IRR]:
Filed in one Automatically consolidated with
Regional [Med-Arbiter] who first acquired
Office jurisdiction
The Regional Office in which the
Filed in
petition was first filed shall exclude
different
all others; [...] The latter shall indorse
Regional
the petition to the former for
Offices
consolidation
Procedure: CERTIFICATION ELECTION IN
AN UNORGANIZED ESTABLISHMENT
Unorganized Establishment
[It is an] establishment where there is no certified
bargaining agent. [Art. 269]
Procedure [Art. 269]
1. File a petition for certification election.
2. Upon filing of the petition, the Med-Arbiter shall
automatically conduct a certification election.
Filing of petition is by a legitimate labor
organization
It cannot be filed by an unregistered labor organization.
Art. 251 enumerates the rights granted to a legitimate
labor organization and one of those rights is the right
to be chosen as the exclusive bargaining representative.
This is one way the law encourages union registration.
Note: Art. 269 should be related to SEBA Certification.
If there are multiple LLOs in an unorganized
establishment, Art. 269. If there is only one LLO in an
unorganized establishment, Rule VII on SEBA
Certification applies. Under this rule, when there is
failure to complete requirements, the Regional Director
will refer it to the Election Officer.
 U.P. LAW BOC LABOR RELATIONS
Procedure: CERTIFICATION ELECTION IN
AN ORGANIZED ESTABLISHMENT
Organized Establishment
Refers to an enterprise where there exists a recognized
or certified sole and exclusive bargaining agent. [Sec.
1(ll), Rule I, Book V, IRR]
Procedure [Art. 268]
1. File a verified petition questioning the majority.
2. It must be filed within the 60-day period before
expiration of CBA (freedom period)
3. Supported by written consent of at least 25% of
ALL employees in the bargaining unit (substantial
support)
4. Med-Arbiter shall automatically order an election.
When Petition Must Be Filed
Freedom Period
Within the sixty (60)-day period before the expiration
of the collective bargaining agreement. [Art. 271]
Note: The expiration referred to is the expiration of the
5-year period for the representation aspect (see Art. 265)
[Prof. Battad]
Rationale of Prohibition of Filing Outside the
Freedom Period
To ensure industrial peace between the employer and
its employees during the existence of the CBA. [Republic
Planters Bank Union v. Laguesma, G.R. No. 119675
(1996)]
Signing of authorization is merely preparatory
What is prohibited is the filing of the petition for
certification election outside the 60-day freedom
period. [...] The signing of the authorization to file was
merely preparatory to the filing of the Petition for
Certification Election, or an exercise of [the] right to
self-organization. [PICOP Resources Inc. v. Ricardo
Dequita, G.R. No. 172666 (2011)]
25% Substantial Support Rule
In organized establishments, the incumbent sole
bargaining agent should not be easily replaced for that
would disturb industrial peace. To justify the
disturbance, it must appear that at least a substantial
number (25% requirement) seeks to have a new
exclusive bargaining unit.
Page 110 of 220
LABOR LAW
Discretionary rule
The [Med-Arbiter], in the exercise of sound discretion,
may order a certification election notwithstanding the
failure to meet the [25%] requirement [in petitions for
certification election in an organized establishment].
[Scout Albano Memorial College v. Noriel, G.R. No. L-48347
(1978)]
Inapplicable to Motions for Intervention
[The] requisite written consent of at least 20% (now
25%) of the workers in the bargaining unit applies to
certification election only, and not to motions for
intervention. Nowhere in the legal provisions [and in
the Omnibus Rules] does it appear that a motion for
intervention in a certification election must be
accompanied by a similar written consent. [PAFLU v.
Calleja, G.R. No. 79347 (1989)]
Intervenors
1. Incumbent bargaining agent as forced intervenor:
The incumbent bargaining agent shall
automatically be one of the choices in the
certification election as forced intervenor. [Sec. 8,
Rule VIII, Book V, IRR]
2. Legitimate labor union other than the incumbent
bargaining agent operating within the bargaining
unit.: When a petition for certification election was
filed in an organized establishment, any legitimate
labor union other than the incumbent bargaining
agent operating within the bargaining unit may file
a motion for intervention with the Med-Arbiter
during the freedom period of the collective
bargaining agreement.
In an unorganized establishment, the motion shall be
filed at any time prior to the decision of the Med-
Arbiter. The motion shall be resolved in the same
decision issued in the petition for certification election.
In both cases, the form and contents of the motion
shall be the same as that of a petition for certification
election. [Sec. 9, Rule VIII, Book V, IRR]
When to File Motion for Intervention
Organized establishment: during the freedom period of
the collective bargaining agreement
Unorganized establishment: any time prior to the
decision of the Med-Arbiter [Sec. 9, Rule VIII, Book V,
IRR]
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

Effect of withdrawal of signatures 2. After the filing of such petition is considered to be

The employees’ withdrawal from a labor union made involuntary and does not affect the [petition]. [S.S.
1. Before the filing of the petition for certification Ventures International v. S.S. Ventures Labor Union,
election is presumed voluntary, G.R. No. 161690 (2008)]

Organized v. Unorganized Establishments

Art. 268: Organized Art. 269: Unorganized
Sole and exclusive
Existing None
bargaining agent
Petition filed Must be VERIFIED No need to be verified
No petition for certification election EXCEPT
within 60 days before the expiration of the
collective bargaining agreement (See Arts. 264
Not applicable (i.e. no freedom period;
Freedom Period and 265)
petition can be filed anytime)
Rationale: To keep industrial peace in organized
establishments
Must be duly supported by 25% of ALL THE
MEMBERS OF THE APPROPRIATE
BARGAINING UNIT NO substantial support rule
Substantial support
rule Rationale: Law wants to know the intention of Rationale: Intention of law is to bring in the
the employees – if they really want a union, to implement policy behind Art. 218A.
certification election, since they already have a
bargaining agent

Certification Election v. Consent Election

Certification Election Consent Election
"Certification Election" or "Consent Election" refers to the process of determining through
secret ballot the sole and exclusive representative of the employees in an appropriate bargaining
Purpose unit for purposes of collective bargaining or negotiation. A certification election is ordered by
the Department, while a consent election is voluntarily agreed upon by the parties, with or
without the intervention by the Department [Book V, Rule 1, Sec. 1(h)].
Rule IX Rule VII, Sec. 11, pars. 1, 2

SECTION 2. Raffle of the Case. — Within The contending unions may agree to the holding of
twenty-four (24) hours from receipt of the an election, in which case it shall be called a consent
notice of entry of final judgment granting election. The mediator-arbiter shall forthwith call
the conduct of a certification election, the for the consent election, reflecting the parties'
Regional Director shall cause the raffle of agreement and the call in the minutes of the
the case to an Election Officer who shall conference
have control of the pre-election
General Procedure
conference and election proceedings. (1a) The mediator-arbiter shall, immediately forward
the records of the petition to the regional director
or his/her authorized representative for the
determination of the election officer who shall be
chosen by raffle in the presence of representatives
of the contending unions if they so desire.
With the exception of aforementioned provisions that specifically apply only for Certification
Election or Consent Election respectively, Rule IX, on the Conduct of Certification, Secs. 3 –
21, applies to both certification and consent elections
Voluntarily agreed upon by the parties, with or
Conduct Ordered by the DOLE
without the intervention of DOLE

Page 111 of 220

 U.P. LAW BOC LABOR RELATIONS LABOR LAW

d. Run-Off Election e. Re-Run Election

Run-Off election refers to an election between the
labor unions receiving the two (2) highest number of
votes in a certification or consent election when the
following requisites have been complied with:
1. Valid election;
2. The certification or consent election provides for
three (3) or more choices (“No Union” is
considered one choice – Professor Battad);
3. None of the contending UNIONS received a
majority of the VALID VOTES cast;
4. No objections or challenges which if sustained can
materially alter the results; and
5. The total number of votes for all contending
UNIONS is at least fifty (50%) of the number of
VOTES cast [Art. 268; Sec. 1(uu), Rule I, Book V,
IRR; Sec. 1, Rule X, Book V, IRR]
Re-run Election refers to an election conducted to
break a tie between contending unions, including
between "no union" and one of the unions. It shall
likewise refer to an election conducted after a failure of
election has been declared by the election officer
and/or affirmed by the mediator-arbiter. [Sec. 1(tt),
Rule 1, Book V, as amended by DO 40-I-15]
Situations Contemplated
1. A tie between two (2) choices.
2. Failure of Elections
[see Definition]
Duty of Election Officer
a. Notify parties of a re-run election
b. Cause posting of notice within five (5) days from
said election.

Illustration When will re-run be conducted

The CBU has 100 members and 80 of which voted. Within ten (10) days after the posting of the notice of
Union “A”= 30; Union “B”= 15; Union “C”=15 and declared as winner and certified choice receiving the
No Union= 20. There were no invalid votes. Since none HIGHEST VOTES CAST.
got the majority of the 80 valid votes (40) and the
contending unions obtained 60 votes (which is at least 3. Procedure after Filing
50% of the VOTES cast), a run-off election is proper.
The run-off will be between the labor unions receiving Petition
“the two highest number of votes.” Pursuant to Art.
268, when an election which provides for three or more a. Raffling of case to Med-Arbiter
choices results in no choice receiving a majority of the b. Preliminary Conference and hearing
valid votes cast, a run-off election shall be conducted c. Conduct of hearings
between the labor unions receiving the two highest d. Determine if petition should be dismissed on
number of votes. Thus, the run-off will be among grounds stated in Sec. 15
Union “A”, “B” and “C.” (Azucena) e. Order/Decision on the petition
f. Appealing the order/decision on the petition
Procedure for Run-Off Election g. Raffling of the case to an Election Officer
Election Officer shall motu proprio conduct a run-off h. Pre-Election Conference
election within ten (10) days from the close of the i. Conduct of election
election proceedings between the labor unions j. Challenging of votes and on the spot questions
receiving the two highest number of votes. k. Protesting
l. Canvassing of votes
“No Union” shall not be a choice in the run-off election m. Nullification of Election Results
[Sec. 1, Rule X, Book V, IRR]. n. Proclamation and Certification of the result of the
election
Same voters’ list used in the certification election shall o. Appeal from Certification Election Orders
be used in the run-off election.

The labor union receiving the GREATER number of

VALID VOTES cast shall be certified as the winner
[Sec. 2, Rule X, Book V, IRR].

Note: Please note the difference between valid votes cast

versus votes cast – valid votes excludes spoiled votes.

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 U.P. LAW BOC LABOR RELATIONS
a. Raffle of Case to Med-Arbiter
The Regional Director or his/her duly authorized
representative shall immediately assign it by raffle to a
[Med-Arbiter]. The raffle shall be done in the presence
of the petitioner if the latter so desires. [Sec. 5, Rule
VIII, Book V, IRR]
b. Preliminary Conference
Med-Arbiter shall conduct a preliminary conference
and hearing within ten (10) days from receipt of the
petition to determine the following:
1. The bargaining unit to be represented;
2. Contending labor unions
3. Possibility of a consent election
4. Existence of any of the bars to certification election
under Sec. 3[, Rule VIII]; and
5. Such other matters as may be relevant for the final
disposition of the case [Sec. 10, Rule VIII, Book V,
IRR]
Note: If contending unions agree to holding of an
election, [...]it shall be called a consent election. [Sec. 11,
Rule VIII, Book V, IRR]
c. Med-Arbiter to Conduct Hearings
If contending unions fail to agree to a consent election
during the preliminary conference, the Med-Arbiter
may conduct as many hearings as he/she may deem
necessary, but in no case shall the conduct thereof
exceed fifteen (15) days from date of scheduled
preliminary conference/hearing, after which the
petition shall be considered submitted for decision. [...]
Within the same 15-day period [...], the contending
labor unions may file such pleadings as they may deem
necessary for the immediate resolution of the petition.
Extensions of time shall not be entertained. [Sec. 12,
Rule VIII, Book V, IRR]
d. Determine if Petition should be
dismissed based on Grounds
Stated in Sec. 15.
The grounds to dismiss the petition are:
1. Petitioning union or national union/federation is:
a. Not listed in DOLE’s registry of legitimate
labor unions; or
b. Registration certificate has been cancelled
with finality
Page 113 of 220
LABOR LAW
2. Failure of a local/chapter or national
union/federation to submit a duly issued charter
certificate upon filing of the petition for
certification election
3. Contract Bar rule
4. One-Year Bar rule
5. Negotiation and Deadlock Bar Rule
6. In an organized establishment, the failure to submit
the 25% signature requirement to support the filing
of the petition.
7. Non-appearance of the petitioner for two (2)
consecutive scheduled conferences before the
[Med-Arbiter] despite due notice; and
8. Absence of employer-employee relationship
between all the members of the petitioning unit
and the establishment where the proposed
bargaining unit is sought to be represented.
Note: See Bars to Certification Election below.
Commingling is not a ground
The inclusion as union members of employees outside
the bargaining unit [is] not a ground for cancellation of
the registration of the union. Said employees are
automatically deemed removed from the list of
membership. [Sec. 16, Rule VIII, Book V, IRR]
Posting of notice of Petition for Certificate Election
The Regional Director or his/her authorized DOLE
personnel, and/or the petitioner shall be responsible
for the posting of the notice of petition for certification
election. . [Sec. 7, Rule VIII, Book V, IRR]
e. Order or Decision on the Petition
[Med-Arbiter] shall issue a ruling granting or denying
the petition
When:
General rule: Within ten (10) days from last hearing
Exception: In organized establishments, grant of the
petition can only be made after the lapse of the freedom
period [Sec. 14, Rule VIII, Book V, IRR]
How:
1. Personally to the parties
2. Copy furnished to the employer [Sec. 18, Rule
VIII, Book V, IRR]
The ruling for the conduct of a certification election
shall state the following:
1. Name of the employer or establishment;
2. Description of the bargaining unit;
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

3. Statement that none of the grounds for dismissal
[...] in Sec. 14 exists;
4. Names of the contending labor unions [...] in the
following order:
a. Petitioner unions in the order of the date of
filing of their respective petitions
b. The forced intervenor
c. “No union”
5. [If] the local/chapter is one the contending unions,
a directive to an unregistered local/chapter or a
federation/national union representing all
unregistered local/chapter to personally submit to
the Election Officer its certificate of creation at
least five (5) working days before the actual
conduct of the certification election. [This is to
afford an individual employee-voter an informed
choice.]
6. Non-submission of this requirement as certified by
Election Officer shall disqualify the local/ chapter
from participating in the certification election
7. Directive to the employer and the contending
unions to submit within ten (10) days from receipt
of order:
a. The certified list of employees in the
bargaining unit, or where necessary,
b. Payrolls covering the members of the
bargaining unit for the last three (3) months
prior to the issuance of the order
f. Appealing the Order Granting or
Denying the Conduct of
Certification Election [Sec. 19-20,
RULE VIII, BOOK V, IRR]
Form of appeal:
1. verified under oath
2. consists of a memorandum of appeal specifically
stating the grounds relied upon by appellant with
the supporting arguments and evidence
Dismissed or
Organized denied Appeal to
Granted Office of
Dismissed or Secretary
Unorganized denied
Granted Unappealable
When: Within ten (10) days from receipt of the order
[of the Med-Arbiter].
Where: Regional Office where the petition originated
Effect of Filing Memorandum of Appeal
Stays the holding of any certification election. [Sec. 23,
Rule VIII, Book V, IRR]
Reply to Appeal
Reply by any party to the petition shall be filed within
ten (10) days from receipt of the memorandum of
appeal […] and filed directly with the office of the
Secretary. [Sec. 22, Rule VIII, Book V, IRR]
When no appeal is filed
The decision shall be final and executory if no appeal is
filed within the ten (10) day period. [Sec. 21, Rule VIII,
Book V, IRR]
Decision of the Secretary
Period to decide: Fifteen (15) days from receipt of
entire records of the petition to decide the appeal.
Secretary’s decision shall be final and executory within
ten (10) days from receipt by parties. [Sec. 23, Rule VIII,
Book V, IRR]
Note: No motion for reconsideration of decision shall
be entertained. [Sec. 23, Rule VIII, Book V, IRR]
Implementation of decision
General Rule: Shall not be stayed
Exception: Restrained by appropriate court [Sec. 24, Rule
VIII, Book V, IRR]
g. Raffling of the Case to an Election
Officer
Regional Director shall cause the raffle of the case to an
Election Officer who shall have control of:
1. Pre-election conference; and
2. Election proceedings
When: Within twenty-four (24) hours from receipt of
notice of entry of final judgment granting the conduct
of a certification election [Sec. 2, Rule IX, Book V, IRR]
h. Pre-Election Conference
Notice of Pre-Election Conference [Sec. 3, Rule IX,
Book V, IRR]
The Election Officer shall cause the issuance of notice
of pre-election conference upon the contending unions
When: Within twenty-four (24) hours from the
[Election Officer’s] receipt of assignment for the
conduct of a certification election

Page 114 of 220

 U.P. LAW BOC LABOR RELATIONS
Schedule of pre-election conference
When: Within ten (10) days from receipt of the
assignment
Completed within thirty (30) days from the date of the
first hearing [Sec. 5, Rule IX, Book V, IRR]
Employer to Submit: [Sec. 3, Rule IX, Book V, IRR]
1. Certified list of employees in the bargaining unit;
or where necessary,
2. Payrolls covering the members of the bargaining
unit at the time of the filing of petition
Failure of party to appear during pre-election
conference despite notice [Sec. 4, Rule IX, Book V,
IRR]
This shall be considered a waiver of right to:
1. To be present; and
2. To question or object to any of the agreements
reached in the pre-election conference
Shall NOT deprive the non-appearing party of the right
to:
1. Be furnished notices; and
2. To attend subsequent pre-election conferences
Minutes of pre-election conference [Sec. 5, Rule
IX, Book V, IRR]
Election Officer shall keep the minutes of matters
raised and agreed upon.
Parties shall acknowledge the completeness and
correctness of entries in the minutes by affixing their
signatures.
When parties refuse to sign the minutes, the Election
Officer shall note such fact in the minutes, including
the reason for refusal to sign the same.
In all cases, parties shall be furnished a copy of the
minutes.
Posting of Notices [Sec. 7, Rule IX, Book V, IRR]
Who: Election Officer and/or authorized DOLE
personnel shall cause the posting
What: Notice of election
Where: 2 most conspicuous places in the company
premises
When: At least ten (10) days before the actual [election
date]
Contents of Notice [Sec. 7, Rule IX, Book V, IRR]
1. Date and time of the election;
2. Names of all contending unions;
Page 115 of 220
LABOR LAW
3. Description of the bargaining unit;
4. List of eligible and challenged voters.
Posting of the list of employees comprising the
bargaining unit shall be done by the DOLE personnel.
What cannot be waived by contending unions or
employer:
1. Posting of the notice of election
2. Information required to be included therein
3. Duration of the posting
The parties agreed to conduct the election on [...] a
regular business day [but a strike was held on that day.]
The alleged strike and/or picketing of some employees
at the company’s premises which coincided with the
actual conduct of certification election might, perhaps
have affected the actual performance of works by some
employees, but did not necessarily make said date an
irregular business day of the company. [Asian Design
and Manufacturing Corp. v. Ferrer-Calleja, G.R. No. L-
77415 (1989)]
i. Conduct of Election
Inspection to ensure secrecy and sanctity of ballot
[Sec. 8, Rule IX, Book V, IRR]
By whom:
1. Election Officer, together with
2. Contending unions’ authorized representative; and
3. Employer
When: Before start of actual voting
Shall inspect:
1. Polling place;
2. Ballot boxes; and
3. Polling booths
Prohibition on certain devices
General Rule: No device that could record or identify the
voter or otherwise undermine the secrecy and sanctity
of the ballot shall be allowed within the premises
Exception: Devices brought in by the Election Officer
Consequence: Any other device found within the
premises shall be confiscated by the Election Officer
and returned to its owner after conduct of the
certification election.
 U.P. LAW BOC LABOR RELATIONS
Spoiled Ballots
A ballot that is torn, defaced, or contains marking
which can lead another to clearly identify the voter who
casts such vote [Sec. 1(ww), Rule I, Book V, IRR]
If the voter inadvertently spoils a ballot, he shall return
it to the Election Officer who shall destroy it and give
him/her another ballot. [Sec. 10, Rule IX, Book V, IRR]
Member unintentionally omitted the in master list of
voters may either be:
1. May be allowed to vote if both parties agree; [OR]
2. Allowed to vote but the ballot is segregated
j. Challenging of Votes and on the
Spot Questions [Sec. 11-12, Rule
IX, Book V, IRR]
Ballot of the voter who has been properly challenged
during the pre-election conferences shall be:
1. Placed in an envelope sealed by Election Officer in
the presence of:
a. the voter; and
b. representatives of the contending unions.
2. Election Officer shall indicate on the envelope the:
a. Voter’s name;
b. Union challenging the voter; and
c. Ground for the challenge
3. Sealed envelope shall be signed by:
a. Election Officer; and
b. Representatives of the contending unions
Election Officer shall:
1. Note all challenges in the minutes of the election
proceedings; and
2. Have custody of all envelopes containing the
challenged votes
Opening of envelopes and question of eligibility
Shall be passed upon by the Med-Arbiter only if the
number of segregated votes will materially alter the
results of the election.
On-the-spot Questions
What the Election Officer shall rule on:
Any question relating to and raised during the conduct
of election
What the Election Officer SHALL NOT rule on:
Question of eligibility which shall be decided by the
Mediator-Arbiter
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LABOR LAW
Failure of representative/s of the contending unions to
appear [Sec. 15, Rule IX, Book V, IRR]
Considered a waiver of the right to be present and to
question the conduct thereof
k. Protest [Sec. 13, Rule IX, Book V,
IRR]
Who may file: Any party-in-interest
Ground: On the conduct or mechanics of the election
When Protest is Perfected:
1. [Record the protest] in the minutes of the election
proceedings; AND
2. Formalize [the] protest with the Med-Arbiter, with
specific grounds, arguments and evidence within
five (5) days after the close of the election
proceedings
Protests deemed dropped
Protests [which are]:
1. Not recorded in the minutes; AND
2. Formalized within the prescribed period
General Reservation to file protest prohibited
Protesting party shall specify the grounds for protest.
Failure to formalize within 5-days cannot be taken
against the union.
[The petitioner union misrepresented that they were
independent which caused the members to disaffiliate
and form a new union and their protest was not filed
within the 5-day period. The] failure to follow strictly
the procedural technicalities regarding the period for
filing their protest should not be taken against them.
Mere technicalities should not be allowed to prevail
over the welfare of the workers. What is essential is that
they be accorded an opportunity to determine freely
and intelligently which labor organization shall act on
their behalf. [DHL-URFA-FFW v. BMP, G.R. No.
152094 (2004)]
Note: "Election Proceedings" refer to the period during
a certification election, consent or run-off election and
election of union officers, starting from the opening to
the closing of the polls, including the counting,
tabulation and consolidation of votes, but excluding the
period for the final determination of the challenged
votes and the canvass thereof. [Book V, Rule 1, Sec. 1
(q)]
 U.P. LAW BOC LABOR RELATIONS
Included:
1. Starting from the opening to the closing of the
polls
2. Counting, tabulation and consolidation of votes
Excluded:
1. Period for the final determination of the challenged
votes
2. Canvass of the challenged votes [Sec. 1(q), Rule I,
Book V, IRR]
l. Canvassing of Votes [Sec. 15, Rule
IX, Book V, IRR]
Election precincts shall open and close on the date and
time agreed upon during the pre-election conference.
The opening and canvass of votes shall proceed
immediately after the precincts have closed
Procedure [Sec. 14, Rule IX, Book V, IRR]
1. Election Officer shall count and tabulate the votes
in the presence of the representatives of the
contending unions.
2. Upon completion of canvass, the Election Officer
shall give each representative a copy of the minutes
of the election proceedings and results of the
election.
3. Ballots and tally sheets shall be sealed in an
envelope and signed by the Election Officer and
the representatives of the contending unions and
transmitted to the Med-Arbiter together with the
minutes and results of the election within twenty-
four (24) hours from the completion of the
canvass.
Election conducted in more than one region
Consolidation of results shall be made within fifteen
(15) days from the conduct thereof.
Double Majority Rule
It is well–settled that under the so-called
"double majority rule,” for there to be a valid
certification election, majority of the bargaining unit
must have voted AND the winning union must have
garnered majority of the valid votes cast.
[NUWHRAIN-Manila Pavilion Hotel Chapter v. Secretary
of Labor and Employment, G.R. No. 181531, (2009)]
Page 117 of 220
LABOR LAW
Requisites:
1. There must be a valid certification or consent
election
Valid Election: At least majority of the number of
eligible voters have cast their votes (VOTES CAST)
[Sec. 17, Rule IX, Book V, IRR]
2. The winning union must garner majority of the
VALID VOTES CAST [Sec. 16, Rule IX, Book V,
IRR]
Winning union certifies as SEBA if there is no protest
[Sec. 16, Rule IX, Book V, IRR]
The [winning union] shall be certified as the [SEBA] in
the appropriate bargaining unit within five (5) days
from date of election, provided no protest is recorded
in the minutes of the election.
When winning choice is local chapter without
certificate of creation of chartered local
It must submit its DOLE issued certificate of creation
within five (5) days from the conclusion of election
Note: Please note that valid votes differ from mere votes
as the former excludes spoiled ballots.
Abstention: refers to a blank or unfilled ballot validly
cast by an eligible voter. It is not considered as a
negative vote. However, it shall be considered a valid
vote for purposes of determining a valid election. [Sec.
1(a), Rule I, Book V, IRR]
Spoiled Ballot: Refers to a ballot that is torn, defaced,
or contains markings which can lead another to clearly
identify the voter who casts such vote. [Sec. 1(ww), Rule
I, Book V, IRR]
m. Failure of Election [Sec. 17, Rule
IX, Book V, IRR]
The Election Officer shall declare a failure of election
in the minutes of the election proceedings when:
1. Number of VOTES CAST is less than the majority
of the number of eligible voters; AND
2. There are no material challenged votes
 U.P. LAW BOC LABOR RELATIONS
Effect of Failure of Election [Sec. 19, Rule IX, Book
V, IRR]
Shall not bar the filing of a motion for the immediate
holding of a certification or consent election within six
(6) months from date of declaration of failure of
election.
Note: Under Sec. 1(tt), Rule I, Book V, a RE-RUN
ELECTION “shall likewise refer to an election
conducted after a failure of election has been declared
by the Election Officer and/or affirmed by the [Med-
Arbiter].” Thus, under the Rules, this is the other
definition of a Re-Run Election (see p. 154 to compare).
Motion for another election after failure of election
[Sec. 20, Rule IX, Book V, IRR]
Within twenty-four (24) hours from receipt of the
motion, the Election Officer shall:
1. Immediately schedule another election within
fifteen (15) days from receipt of motion
2. Cause posting of the notice of election
a. At least ten (10) days prior to the scheduled
date of election
b. In two (2) most conspicuous places in the
establishment
Same guidelines and list of voters shall be used.
Nullification of Election Results
It is precisely because respect must be accorded to the
will of labor thus ascertained that a general allegation of
duress is not sufficient to invalidate a certification
election; it must be shown by competent and credible
proof. [United Employees Union of Gelmart Industries
Philippines (UEUGIP) v. Noriel, No. L-40810 (1975)]
n. Proclamation and Certification of
the result of the election
CERTIFICATION OF THE COLLECTIVE
BARGAINING AGENT [Sec. 21, Rule IX, Book V,
IRR]
Within 24 hours from final canvass of votes, there being
a VALID election, the Election Officer shall transmit
the records of the case to the Med-Arbiter.
Within the same period from receipt of the minutes and
results of election, [the Med-Arbiter] shall issue an
order proclaiming the results of the election and
certifying the union as the [SEBA] under any of the
following conditions:
Page 118 of 220
LABOR LAW
1. No protests were filed, or even if one was filed, [it]
was not perfected within the five-day period
2. No challenge or eligibility issue was raised, or even
if one was raised, [its] resolution will not materially
change the results of the elections.
Winning union shall have the rights, privileges, and
obligations of a duly certified collective bargaining
agent from the time the certification is issued.
Majority of valid votes cast results in “no Union”
obtaining majority
Med-Arbiter shall declare such fact in the order
o. Appeal from Certification Election
Orders [Art. 272]
Who appeals: Any party to an election
What is appealed: Order or results of the election
Appeal to: Directly to SOLE
Ground: Rules and regulations established by the
SOLE for the conduct of the election have been
violated.
4. Bars to a Certificate Election
Petition for certification may be filed:
General Rule: Anytime
Exceptions:
a. One-year bar rule
b. Negotiation bar rule
c. Deadlock bar rule
d. Contract bar rule
See: Grounds for denying a Petition for Certification
Election
a. One-Year Bar Rule
No certification election may be held within 1 year from
the time a valid certification, consent or run-off election
has been conducted within the bargaining unit.
[If the order of the Med-Arbiter certifying the results of
the election has been appealed], the running of the one-
year period shall be suspended until the decision on the
appeal becomes final and executory. [Sec. 3(a), Rule
VIII, Book V
Note: This bar also applies to a SEBA Certification
under Rule VII. “The certification shall bar the filing of
 U.P. LAW BOC LABOR RELATIONS
a petition for certification election by any labor
organization for a period of one (1) year from the date
of its issuance.” [Sec. 4.2, Rule VII, Book V, IRR]
b. Negotiation Bar Rule
No certification of election may be filed when:
1. Within 1 year after the valid certification election
2. The DULY CERTIFIED union has
COMMENCED AND SUSTAINED
negotiations in good faith with the employer
3. In accordance with Art. 261 of the Labor Code Sec.
3(b), Rule VIII, Book V
c. Deadlock Bar Rule
No certification of election may be filed when:
1. The incumbent or certified bargaining agent is a
party;
2. A bargaining deadlock had been:
a. Submitted to conciliation or arbitration or;
b. Had become the subject of a valid notice of
strike or lockout [Sec. 3(c), Rule VIII, Book V,
IRR]
A “deadlock” is defined as the “counteraction of things
producing entire stoppage; a state of inaction or of
neutralization caused by the opposition of persons or
of factions (as in government or voting body):
standstill.” [...] The word is synonymous with the word
impasse which [...] “presupposes reasonable effort at
good faith bargaining which, despite noble intentions,
does not conclude in agreement between the parties”
[Divine World University v. SOLE, G.R. No. 91915
(1992)]
d. Contract Bar Rule
BLR shall not entertain any petition for certification
election or any other action which may disturb the
administration of DULY REGISTERED existing
collective bargaining agreements affecting the parties.
except under Arts. 264, 265, and 268 [(60-day freedom
period)]. [Art. 238]
No petition for certification election may be filed when
a [CBA] between the employer and a SEBA has been
registered in accordance with Art. 237. Where such
[CBA] is registered, the petition may be filed only within
sixty (60) days prior to its expiry. [Sec. 3(d), Rule VIII,
Book V, IRR].
The five-year representation status acquired by an
incumbent bargaining agent either through single
Page 119 of 220
LABOR LAW
enterprise collective bargaining or multi-employer
bargaining shall not be affected by a subsequent [CBA]
executed between the same bargaining agent and the
employer during the same five-year period. [Sec. 7, Rule
XVII, Book V, IRR]
Despite an agreement for a CBA with a life of more
than five years, either as an original provision or by
amendment, the bargaining union’s exclusive
bargaining status is effective only for five years and can
be challenged within sixty (60) days prior to the
expiration of the CBA’s first five years. [FVC Labor
Union-PTGWO v. SANAMA-FVC-SIGLO, G.R. No.
176249 (2009)]
The rule is that despite the lapse of the formal
effectivity of the CBA the law still considers the same
as continuing in force and effect until a new CBA shall
have been validly executed. Hence, the contract bar rule
still applies. . [Colegio de San Juan de Letran v. Association of
Employees, G.R. No. 141471, (2000)]
Petition for cancellation of union registration
DOES NOT suspend or prevent filing of
certification election.
A petition for cancellation of union registration shall
not:
1. suspend the proceedings for certification election;
nor
2. prevent the filing of a petition for certification
election. [Art. 246]
A certification election can be conducted despite
pendency of a petition to cancel the union registration
certificate. For the fact is that at the time the [union],
whose registration certificate is sought to be cancelled,
filed its petition for certification, it still had the legal
personality to perform such act absent an order
directing its cancellation. [Association of Court of Appeals
Employees v. Calleja, G.R. No. 94716, (1991)]
Prejudicial Question Rule
Labor claims cannot proceed independently of:
1. A bankruptcy liquidation proceeding; and
2. Suspension order in a rehabilitation case. The law
is clear, upon the creation of a management
committee or the appointment of a rehabilitation
receiver, all claims for actions “shall be suspended
accordingly.” No exception in favor of labor claims
is mentioned in the law. Since the law makes no
distinction or exemptions, neither should this
Court.
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

In RA 10142, a claim refers to “all claims or demands in the unfair labor practice case, the union selected
of whatever nature or character against the debtor or its would be decertified and the whole election
property, whether for money or otherwise, liquidated or proceedings would be rendered useless and nugatory.
unliquidated, fixed or contingent, matured or [B.F. Goodrich Phils. Marikina v. B.F. Goodrich Confidential
unmatured, disputed or undisputed, including, but not and Salaried Employees Union, G.R. No. L-34069-70,
limited to; (1) all claims of the government, whether (1973)]
national or local, including taxes, tariffs and customs
duties; and (2) claims against directors and officers of
the debtor arising from acts done in the discharge of
their functions falling within the scope of their
authority: Provided, That, this inclusion does not
prohibit the creditors or third parties from filing cases
against the directors and officers acting in their personal
capacities.”

Note: Under the Financial Rehabilitation and Insolvency

Act (FRIA), rehabilitation proceedings shall commence
upon a Commencement Order which includes a Stay or
Suspension Order [suspending] all actions or
proceedings, in court or otherwise, for the enforcement
of claims against the debtor [Sec. 16(q)(1)].

In liquidation proceedings, upon the issuance of a

Liquidation Order, no separate action for the collection
of an unsecured claim shall be allowed [Sec. 113]. Under
a Liquidation Plan, credits for services rendered by
employees or laborers to the debtor shall enjoy first
preference under Art. 2244 of the Civil Code, unless the
claims constitute legal liens under Art.s 2241 and 2242
thereof [Sec. 133].

Claim shall refer to all claims or demands of whatever

nature or character against the debtor or its property
[Sec. 4(c)].

Rationale: These claims would spawn needless

controversy, delays, and confusion. [Lingkod
Manggagawa sa Rubberworld, Adidas-Anglo v. Rubberworld
(Phils.), Inc., G.R. No. 153882 (2007)]

Allegation of company union a prejudicial

question to a petition for certification election
A complaint for unfair labor practice may be considered
a prejudicial question in a proceeding for certification
election when it is charged therein that one or more
labor unions participating in the election are being
aided, or are controlled, by the company or employer
[company union] [United CMC Textile Worker’s Union v.
BLR, G.R. No. 51337(1984)].

Rationale: The certification election may lead to the

selection of an employer-dominated or company union
as the employees’ bargaining representative, and when
the court finds that said union is employer-dominated

Page 120 of 220

 U.P. LAW BOC LABOR RELATIONS LABOR LAW

D. Rights of a Labor The system of check-off is primarily for the benefit of

Organization the Union, and only indirectly, for the benefit of the
individual employees. [Marino v. v Gamilla, G.R. No.
149763 (2009)]
1. Check off, Assessment,
Agency Fees Note: For a check-off to be valid, it must comply with
the requirements of a valid special assessment.
Assessment
Jurisdiction over Check-off Disputes
Special assessments are payments for a special purpose,
The Bureau of Labor Relations has jurisdiction to hear,
especially if required only for a limited time. [Azucena]
decide and to mete out punishment any violation under
Art. 250 upon report of at least 30% of the union
No special assessment or other extraordinary fees may
membership OR members specially concerned to
be levied upon the members of a labor organization
the Bureau.
unless authorized by a written resolution of a majority
of all the members at a general membership meeting
Note: Secretary of Labor or his duly authorized
duly called for the purpose. [Art. 250 (n)]
representative may inquire into financial activities of
legitimate labor orgs – UPON filing of complaint
Other than for mandatory activities under the Code, no
under oath and supported by written consent of at least
special assessments, attorney’s fees, negotiation fees or
20% of total membership, Provided, such inquiry
any other extraordinary fees may be checked off from
shall not be conducted during (60)-day freedom period
any amount due to an employee without an individual
nor within the thirty (30) days immediately preceding
written authorization duly signed by the employee. The
the date of election of union officials. [Art. 289]
authorization should specifically state the amount,
purpose and beneficiary of the deduction. [Art. 250 (o)]
Union Dues
Union dues are payments to meet the union’s general
Requisites for a Valid Special Assessment
and current obligations. The payment must be regular,
a. Authorization by a written resolution of the
periodic, and uniform. [Azucena]
majority of ALL the members at the general
membership meeting called for the purpose; (also
Every payment of fees, dues or other contributions by
called levy);
a member shall be evidenced by a receipt signed by the
b. Secretary’s record of the minutes of the meeting;
officer or agent making the collection and entered into
AND
the record of the organization to be kept and
c. Individual written authorization for check off duly
maintained for the purpose. [Art. 250 (h)]
signed by the employees concerned which indicates
the:
Attorney’s Fees
1. Amount
Payment of Attorney’s fees cannot be imposed in
2. Purpose
individual member
3. Beneficiary of deduction [Gabriel v. SOLE,
G.R. No. 115949 (2000)]
No attorney’s fees, negotiation fees, or similar charges
of any kind arising from any collective bargaining
Strict compliance for special assessment
agreement or conclusion of the collective agreement
There must be strict and full compliance with the
shall be imposed on any individual member. [Art.
requisites. Substantial compliance is not enough.
228(b)]
[Palacol v. Ferrer-Calleja, G.R. No. 85333 (1990)]
Proper charging of attorney’s fees:
Check-Off
a. Charges against union funds; AND
A check-off is a process or device whereby the
b. In an amount agreed upon by the parties
employer, on agreement with the Union, recognized as
the proper bargaining representative, or on prior
Any contract, agreement, or arrangement of any sort to
authorization from the employees, deducts union dues
the contrary shall be void. [Art. 228(b)]
or agency fees from the latter’s wages and remits them
directly to the Union. [Marino v. Gamilla, G.R. No.
149763 (2009)]

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 U.P. LAW BOC LABOR RELATIONS
Different types of Attorney’s Fees
Ordinary Extraordinary
Indemnity for damages
Reasonable
ordered by the court to
compensation paid to a
be paid by the losing
lawyer for legal services
party to the winning
rendered
party
Agreed upon by the
Awarded by the NLRC
parties
Payable to the lawyer Payable to the client
Not limited (freedom to Limited by Art. 111 to
contract) 10%
[Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa
MWC-East Zone Union v. Manila Water, G.R. No. 174179
(2011)]
There are two concepts of attorney's fees. In the
ordinary sense, attorney's fees represent the reasonable
compensation paid to a lawyer by his client for the legal
services rendered to the latter. On the other hand, in its
extraordinary concept, attorney's fees may be awarded
by the court as indemnity for damages to be paid by the
losing party to the prevailing party, such that, in any of
the cases provided by law where such award can be
made, e.g., those authorized in Art. 2208 of the Civil
Code, the amount is payable not to the lawyer but to
the client, unless they have agreed that the award shall
pertain to the lawyer as additional compensation or as
part thereof. [Masmud v NLRC, G.R. No. 183385 (
2009)]
In Masmud, the contingency agreement between lawyer
and client consisting of 39% of the monetary award was
deemed not unconscionable by the SC.
Agency Fees
Art. 259 (3) – Nothing in this Code or in any other
law shall stop the parties from requiring membership
in a recognized collective bargaining agent as a
condition for employment, except those employees
who are already members of another union at the
time of the signing of the collective bargaining
agreement. Employees of an appropriate bargaining
unit who are not members of the recognized
collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees
paid by members of the recognized collective
bargaining agent, if such non-union members accept
the benefits under the collective bargaining
agreement: Provided, That the individual
authorization required under Article 242, paragraph
(o) of this Code shall not apply to the non-members
of the recognized collective bargaining agent;
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LABOR LAW
An amount, equivalent to union dues, which a non-
union member pays to the union because he benefits
from the CBA negotiated by the union. [Azucena]
Rationale for Allowing Agency Fees
The legal basis of the union’s right to agency fees is
neither contractual nor statutory, but quasi-contractual,
deriving from the established principle that non-union
employees may not unjustly enrich themselves by
benefiting from employment conditions negotiated by
the bargaining union. [Holy Cross of Davao College, Inc v.
Hon. Joaquin, G.R. No. 110007 (1996)]
When Agency Fee Assessed
If such non-union member accept the benefits under
the collective bargaining agreement. [Art. 259(e)]
Measure of Fee
A reasonable fee equivalent to the dues and other fees
paid by members of the recognized collective
bargaining agent. [Art. 259(e)]
Requirements:
a. Non-member of SEBA
b. Member of Collective Bargaining Unit
c. Reasonable fee equivalent to the dues and other
fees paid by members
d. Acceptance of CBA benefits
Mandatory Activities
Definition: A judicial process of settling dispute laid
down by the law. [Vengco v. Trajano, G.R. No. 74453
(1989)]
Placement of re-negotiations for a CBA under
compulsory arbitration does not make it a “mandatory
activity”. [Galvadores v. Trajano, No. 70067 (1986)]
It dispenses with the requirement of the individual
written authorization duly signed by the employee
[Art. 250(o)]
2. Collective Bargaining
GENERAL CONCEPTS
Constitutional Policies
a. [The State] shall guarantee the rights of all workers
to self-organization, collective bargaining and
negotiations […] [par. 2, Sec. 3, Art. XIII, 1987
Constitution]
b. The State shall promote the principle of shared
responsibility between workers and employers and
the preferential use of voluntary modes in settling
 U.P. LAW BOC LABOR RELATIONS
disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster
industrial peace. [par. 3, Sec. 3, Art. XIII, 1987
Constitution]
Statutory Policies
a. To promote and emphasize the primacy of free
collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation,
as modes of settling labor or industrial disputes.
[Art. 218-A(a)]
b. It is the policy of the State to promote and
emphasize the primacy of free and responsible
exercise of the right to self-organization and
collective bargaining, either through single
enterprise level negotiations or through the
creation of a mechanism by which different
employers and recognized certified labor unions in
their establishments bargain collectively. [Book V,
IRR Rule XVI, Sec. 1]
c. To encourage a truly democratic method of
regulating the relations between the employers and
employees by means of agreements freely entered
into through collective bargaining, no court or
administrative agency or official shall have the
power to set or fix wages, rates of pay, hours of
work or other terms and conditions of
employment, except as otherwise provided under
this Code [Art. 218-B]
Definition, Nature, and Purpose
Collective bargaining which is defined as negotiations
towards a collective agreement, is one of the democratic
frameworks under the [Labor] Code, designed to
stabilize the relations between labor and management
and to create a climate of sound and stable industrial
peace. It is a mutual responsibility of the employer and
the Union and is characterized as a legal obligation.
[Kiok Loy v. NLRC, G.R. No. L-54334 (1986)]
The institution of collective bargaining is [...] a prime
manifestation of industrial democracy at work. The two
parties to the relationship, labor and management,
make their own rules by coming to terms [...] to govern
themselves in matters that really count. [United Employees
Union of Gelmart Industries v. Noriel, G.R. No. L-40810
(1975)]
Right to Suspend Free Collective Bargaining
The assailed PAL-PALEA agreement was the result of
voluntary collective bargaining negotiations undertaken
in the light of the severe financial situation faced by the
employer, with the peculiar and unique intention of not
merely promoting industrial peace at PAL, but
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LABOR LAW
preventing the latter’s closure. [...] It was PALEA, as the
exclusive bargaining agent of PALs ground employees,
that voluntarily entered into the CBA with PAL. It was
also PALEA that voluntarily opted for the 10-year
suspension of the CBA. Either case was the union’s
exercise of its right to collective bargaining. The right
to free collective bargaining, after all, includes the right
to suspend it. [Rivera v. Espiritu, G.R. No. 135547
(2000)]
a. Duty to Bargain Collectively
i. In General
Definition
Art. 263. Meaning of duty to bargain collectively.
— The duty to bargain collectively means the
performance of a mutual obligation to meet and
convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement with
respect to wages, hours of work, and all other terms
and conditions of employment including proposals
for adjusting any grievances or questions arising
under such agreement and executing a contract
incorporating such agreements if requested by either
party, but such duty does not compel any party to
agree to a proposal or to make any concession.
Jurisdictional Preconditions on Duty To Bargain
1. Possession of the status of majority representation
of the employees’ representative in accordance
with any of the means of selection or designation
provided for by the Code;
2. Proof of majority representation; AND Demand to
bargain under Art. 261(a) [Kiok Loy v. NLRC, G.R.
No. L-54334 (1986)]
[Citing Art. 267], only the labor organization designated
or selected by the majority of the employees in an
appropriate collective bargaining unit is the exclusive
representative of the employees in such unit for the
purpose of collective bargaining. The union is
admittedly not the exclusive representative of the
majority of the employees [...], hence, it could not
demand from [the employer] the right to bargain
collectively in their behalf. [Phil. Diamond Hotel and Resort
Inc v. Manila Diamond Hotel and Employees Union, G.R.
No. 158075 (2006)]
 U.P. LAW BOC LABOR RELATIONS
Meaning of Bargaining in Good Faith
[T]here is no per se test of good faith in bargaining.
Good faith or bad faith is an inference to be drawn
from the facts. [Union of Filipino Employees v. Nestle
Philippines, Inc., G.R. Nos. 158930-31 (2008)][T]he
failure to reach an agreement after negotiations
continued for a reasonable period does not establish a
lack of good faith. The laws invite and contemplate a
collective bargaining contract, but they do not compel
one. [Tabangao Shell Refinery Employees Association v.
Pilipinas Shell Petroleum Corporation, G.R. No. 170007
(2014)]
Duty to Bargain does not include:
1. Any legal duty [on the employer] to initiate contract
negotiation [Kiok Loy v NLRC, G.R. No. L-54334
(1986)]
2. The obligation to reach an agreement: While the
law makes it an obligation for the employer and the
employees to bargain collectively with each other,
such compulsion does not include the commitment
to precipitately accept or agree to the proposals of
the other. All it contemplates is that both parties
should approach the negotiation with an open
mind and make reasonable effort to reach a
common ground of agreement. [Union of Filipro
Employees v. Nestle, G.R. Nos. 158930-31 (2008)]
Evading the Mandatory Subjects of Bargaining
The refusal to negotiate a mandatory subject of
bargaining is an unfair labor practice although either
party has every desire to reach agreement and earnestly
and in all good faith bargains to that end. […] However,
the duty to bargain does not obligate the parties to make
concessions or yield a position fairly held. [Azucena]
The duty to bargain is limited to mandatory bargaining
subjects; as to other matters, he is free to bargain or not
to bargain. Over mandatory subjects, a party may insist
on bargaining, even to the point of deadlock, and his
insistence will not be construed as bargaining in bad
faith.
Over a non-mandatory subject, on the other hand, a
party may not insist on bargaining to the point of
impasse, otherwise his insistence can be construed as
bargaining in bad faith.
Bargaining in Bad Faith
The crucial question whether a party has met his
statutory duty to bargain in good faith typically turns on
the facts of the individual case. There is no per se test of
good faith in bargaining. Good faith or bad faith is an
inference to be drawn from the facts of the case.
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LABOR LAW
[Hongkong and Shanghai Banking Corp. Employees Union v.
NLRC, G.R. No. 125038 (1997)]
Blue-Sky Bargaining
Blue-Sky Bargaining is defined as "unrealistic and
unreasonable demands in negotiations by either or both
labor and management, where neither concedes
anything and demands the impossible." It actually is not
collective bargaining at all. [Roberts Dictionary of
Industrial Relations as cited in Standard Bank Chartered
Employees Union v. Confesor, G.R. No. 114974 (2004)]
Surface Bargaining
Surface bargaining is defined as "going through the
motions of negotiating," without any real intent to
reach an agreement. [Roberts Dictionary of Industrial
Relations as cited in Standard Bank Chartered Employees
Union v. Confesor, supra.]
It violates the Act's requirement that parties negotiate
in "good faith." It is prohibited because, as one
commentator explained: The bargaining status of a
union can be destroyed by going through the motions
of negotiating almost as easily as by bluntly withholding
recognition […] As long as there are unions weak
enough to be talked to death, there will be employers
who are tempted to engage in the forms of collective
bargaining without the substance. [K-MART Corporation
v. NLRB, 1980 626 F.2d 704]
Individual Bargaining
It is an unfair labor practice for an employer operating
under a CBA to negotiate with his employees
individually. That constitutes interference because the
company is still under obligation to bargain with the
union as the bargaining representative.
Individual bargaining contemplates a situation where
the employer bargains with the union through the
employees instead of the employees through the union.
[The Insular Life Assurance Co. Ltd., Employees Assn. v.
Insular Life Assurance Co. Ltd, G.R. No. L-25291 (1971)]
Boulwarism
A take-it-or-leave-it approach in negotiation constitutes
bad faith. "Although the law cannot open a man's mind,
it can at least compel him to conduct himself as if he
were trying to persuade and were willing to be
persuaded. To offer the union a contract saying 'Take it
or leave it,' is not bargaining collectively within the
meaning of the act.” [Herald Delivery Carriers Union v.
Herald Publication Inc., G.R. No. L-29966 (1974), citing
NLRB v. Pilling and Son Co. US, 119 F2D 32 (1941)]
 U.P. LAW BOC LABOR RELATIONS
ii. When there is an Absence of CBA
Art. 262. Duty to bargain collectively in the absence
of collective bargaining agreements. — In the
absence of an agreement or other voluntary
arrangement providing for a more expeditious
manner of collective bargaining, it shall be the duty
of the employer and the representatives of the
employees to bargain collectively in accordance with
the provisions of this Code.
iii. When there is a CBA
General Rule: The duty to bargain collectively shall also
mean that neither party shall terminate nor modify such
agreement during its lifetime. [Art. 264]
Substitutionary Doctrine
Note: See also discussion under V.b.2
Even during the effectivity of a collective bargaining
agreement executed between employer and employees
[through] their agent, the employees can change said
agent but the contract continues to bind then up to its
expiration date. They may bargain however for the
shortening of said expiration date. [Elisco-Elirol Labor
Union v Noriel, G.R. No. L-41955 (1977)].
Exception: At least sixty (60) days prior to the expiration
of the collective bargaining agreement, either party can
serve a written notice to terminate or modify the
agreement [Art. 264].
Note: During this 60-day period, a verified petition
questioning the majority status of the incumbent
bargaining agent may also be filed [Art. 268].
Effect on existing CBA
It shall be the duty of both parties to keep the status
quo and to continue in full force and effect the terms
and conditions of the existing agreement during the 60-
day period and/or until a new agreement is reached by
the parties. [Art. 264]
iv. Bargaining Procedure [Art. 262]
General Rule: Private Procedure - The bargaining
procedure shall be governed by [the parties’] agreement
or other voluntary arrangement providing for a more
expeditious manner of collective bargaining [Art. 262]
Rationale: It is the policy of the state to promote and
emphasize the primacy of free collective bargaining and
negotiations [Art. 218-A(a)]
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Exception
Labor Code Procedure – In absence of a private
agreement, the collective bargaining procedure under
Art. 261 shall be followed.
1. Written notice and statement of proposals. When a
party desires to negotiate an agreement, it shall
serve a written notice upon the other party with a
statement of its proposals.
2. Reply. The other party shall make a reply thereto
not later than ten (10) calendar days from receipt
of such notice.
3. Conference. Should differences arise on the basis
of such notice and reply, either party may request
for a conference which shall begin not later than
ten (10) calendar days from the date of request.
4. Board intervention and conciliation. If the dispute
is not settled, the [NCMB] shall intervene upon
request of either or both parties or at its own
initiative and immediately call the parties to
conciliation meetings. The [NCMB] shall have the
power to issue subpoenas requiring the attendance
of the parties to such meetings. It shall be the duty
of the parties to participate fully and promptly in
the conciliation meetings the Board may call;
5. Voluntary arbitration. The [NCMB] shall exert all
efforts to settle disputes amicably and encourage
the parties to submit their case to a voluntary
arbitrator.
6. Prohibition against disruptive acts. During the
conciliation proceedings in the Board, the parties
are prohibited from doing any act which may
disrupt or impede the early settlement of the
disputes. [Book V, IRR Rule XII, Sec. 1]
7. Deadlock. Any certified or duly recognized
bargaining representative may file a notice or
declare a strike or request for preventive mediation
in cases of bargaining deadlocks and unfair labor
practices. The employer may file a notice or declare
lockout or request for preventive mediation in the
same cases. In the absence of certified or duly
recognized bargaining representative, any
legitimate labor organization in the establishment
may file a notice, request preventive mediation or
declare a strike but only on grounds of unfair labor
practice [NCMB Manual of Procedure, Rule IV,
Sec. 3]
Period to Reply; Bad Faith
[The period to reply] is merely procedural, and non-
compliance cannot be automatically deemed to be an
act of unfair labor practice. [National Union of Restaurant
Workers v. CIR, G.R. No. L-20044 (1964)]
 U.P. LAW BOC LABOR RELATIONS
Failure to Reply as Indicia of Bad Faith
[The employer’s] refusal to make a counter-proposal
[...] is an indication of its bad faith. Where the employer
did not even bother to submit an answer to the
bargaining proposals of the union, there is a clear
evasion of the duty to bargain collectively, [...] making
it liable for unfair labor practice. [General Milling Corp. v.
CA, G.R. No. 146728 (2004)]
v. Bargainable Issues
Mandatory Bargainable Issues
1. Wages
2. Hours of work
3. All other terms and conditions of employment
including proposals for adjusting any grievances or
questions arising under such agreement [Art. 263]
Examples:
1. Vacations and holidays
2. Bonuses
3. Seniority, Transfer, and Layoffs
4. Employee workloads
5. Work rules and regulations
6. Union security arrangements
7. Pension and insurance benefits for active
employees
Permissive Issues
Unilateral benefits extended by the employer [cf. Union
of Filipino Employees v. Nestle, G.R. Nos. 158930-31
(2008)]
A collective bargaining agreement refers to the
negotiated contract between a legitimate labor
organization and the employer concerning wages, hours
of work and all other terms and conditions of
employment in a bargaining unit […]. As in all other
contracts, the parties in a CBA may establish such
stipulations, clauses, terms and conditions as they may
deem convenient provided they are not contrary to law,
morals, good customs, public order or public policy.
[Manila Fashions v. NLRC, G.R. No. 117878 (1996)]
Test For Mandatory Bargainable Issues
The NEXUS Between the Nature of Employment and
the Nature of the Demand: For “other terms and
conditions of employment” to become a mandatory
bargainable issue, they must have a connection between
the proposal and the nature of the work.
In order for a matter to be subject to mandatory
collective bargaining, it must materially or significantly
affect the terms and conditions of employment.
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LABOR LAW
Whether the agreement concerns a mandatory subject
of bargaining depends not on its form, but on its
practical effect. [Azucena]
Importance of Determining the character of the
Bargaining Issue
The question as to what are mandatory and what are
merely permissive subjects of collective bargaining is of
significance on the right of a party to insist on his
position to the point of stalemate. A party may refuse
to enter into a collective bargaining contract unless it
includes a desired provision as to a matter which is a
mandatory subject of collective bargaining. [But] a
refusal to contract unless the agreement covers a matter
which is not a mandatory subject is in substance a
refusal to bargain about matters which are mandatory
subjects of collective bargaining; and it is no answer to
the charge of refusal to bargain in good faith that the
insistence on the disputed clause was not the sole cause
of the failure to agree or that agreement was not
reached with respect to other disputed clauses.
Such refusal will not be deemed as an unfair labor
practice. However, if a party refuses to contract based
on an issue which is not a mandatory bargainable issue,
the party will be guilty of ULP. [Samahang Manggagawa sa
Top Form v. NLRC, G.R. No. 113856 (1998)]
Minutes of Negotiation
Where a proposal raised by a contracting party does not
find print in the CBA, it is not a part thereof and the
proponent has no claim whatsoever to its
implementation. [...] The Minutes [only] reflects the
proceedings and discussions undertaken in the process
of bargaining for worker benefits in the same way that
the minutes of court proceedings show what transpired
therein. At the negotiations, it is but natural for both
management and labor to adopt positions or make
demands and offer proposals and counter-proposals.
However, nothing is considered final until the parties
have reached an agreement. [Samahang Manggagawa sa
Top Form v. NLRC, G.R. No. 113856 (1998)]
Suspension of Bargaining Negotiations
In order to allow the employer to validly suspend the
bargaining process there must be a valid petition for
certification election raising a legitimate representation
issue. Hence, the mere filing of a petition for
certification election does not ipso facto justify the
suspension of negotiation by the employer. [Colegio de
San Juan de Letran v. Association of Employees, G.R. No.
141471 (2000)]
 U.P. LAW BOC LABOR RELATIONS
vi. Bargaining Deadlock
Deadlock is defined as the “counteraction of things
producing entire stoppage: a state of inaction or of
neutralization caused by the opposition of persons or
of factions: a standstill. There is a deadlock when there
is a “complete blocking or stoppage resulting from the
action of equal and opposed forces.” The word is
synonymous with the word impasse which, within the
meaning of the American federal labor laws,
“presupposes reasonable effort at good faith bargaining
which, despite noble intentions, does not conclude in
agreement between the parties.” [Divine World Tacloban
v. Secretary of Labor, G.R. No. 91915 (1992)]
Collective Bargaining Deadlock is defined as the
situation between the labor and the management of the
company where there is failure in the collective
bargaining negotiations resulting in a stalemate. [San
Miguel Corp. v NLRC, G.R. No. 99266 (1999)].
Privileged Communication in Conciliation Proceedings
Information and statements made at conciliation
proceedings shall be treated as privileged
communication and shall not be used as evidence in the
Commission. Conciliators and similar officials shall not
testify in any court or body regarding any matters taken
up at conciliation proceedings conducted by them. [Art.
233]
Rationale:
1. A person is entitled to ‘buy his or her peace’
without danger of being prejudiced in case his or
her efforts fail
2. offers for compromise are irrelevant because they
are not intended as admissions by the parties
making them [Pentagon Steel v. CA, G.R. No. 174141
(2009)]
b. Collective Bargaining Agreement
(CBA)
i. General Concepts
Collective Bargaining Agreement or “CBA” refers
to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours
of work and all other terms and conditions of
employment in a bargaining unit. [Sec. 1(k), Rule I,
Book V, IRR]
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LABOR LAW
Nature of the CBA
It is a familiar and fundamental doctrine in labor law
that the CBA is the law between the parties and they are
obliged to comply with its provisions. [Zuellig Pharma
Corporation v. Alice Sibal, G.R. No. 173587 (2013)]
Although it is a rule that a contract freely entered
between the parties should be respected, since a
contract is the law between the parties, said rule is not
absolute. [... Citing 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. [Halagueña v. Philippine
Airlines, G.R. No. 172013 (2009)]
Beneficiaries of the CBA
Art. 267. Exclusive Bargaining Representation
and Workers’ Participation in Policy and
Decision-Making. – The labor organization
designated or selected by the majority of the
employees in an appropriate collective bargaining
unit shall be the exclusive representative of the
employees in such unit for the purpose of collective
bargaining.
When a collective bargaining contract is entered into by
the union representing the employees and the
employer, even the non-member employees are entitled
to the benefits of the contract. To accord its benefits
only to members of the union without any valid reason
would constitute undue discrimination against non-
members. [New Pacific Timber and Supply v. NLRC, G.R.
No. 124224 (2000)]
Contract Interpretation
Art. 1702, Civil Code. In case of doubt, all labor
legislation and all labor contracts shall be construed in
favor of the safety and decent living for the laborer.
A CBA, as a labor contract within the contemplation of
Art. 1700 of the Civil Code of the Philippines which
governs the relations between labor and capital, [it] is
not merely contractual in nature but impressed with
public interest, thus, it must yield to the common good.
As such, it must be construed liberally rather than
narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated
and purpose which it is intended to serve. [Davao
Integrated Port Stevedoring Services v. Abarquez, G.R. No.
102132 (1993)]
 U.P. LAW BOC LABOR RELATIONS
General Rule: [W]here the CBA is clear and
unambiguous, it becomes the law between the parties
and compliance therewith is mandated by the express
policy of the law. [Zuellig Pharma Corporation v. Alice Sibal,
G.R. No.173587 (2013)]
Exception: If the words appear to be contrary to the
evident intention of the parties, the latter shall prevail
over the former. [Kimberly Clark Phils. v. Lorredo,
G.R. No. 103090 (1993)]
ii. Mandatory Provisions of the CBA
Note: See also Bargainable Issues, p. 172
Art. 273 [Grievance Machinery and Voluntary
Arbitration. — The parties to a Collective
Bargaining Agreement shall include therein
provisions that will ensure the mutual observance of
its terms and conditions. They shall establish a
machinery for the adjustment and resolution of
grievances arising from the interpretation or
implementation of their Collective Bargaining
Agreement and those arising from the interpretation
or enforcement of company personnel policies.
All grievances submitted to the grievance machinery
which are not settled within seven (7) calendar days
from the date of its submission shall automatically
be referred to voluntary arbitration prescribed in the
Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining
Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, or include in the agreement a procedure
for the selection of such Voluntary Arbitrator or
panel of Voluntary Arbitrators, preferably from the
listing of qualified Voluntary Arbitrators duly
accredited by the Board. In case the parties fail to
select a Voluntary Arbitrator or panel of Voluntary
Arbitrators, the Board shall designate the Voluntary
Arbitrator or panel of Voluntary Arbitrators, as may
be necessary, pursuant to the selection procedure
agreed upon in the Collective Bargaining
Agreement, which shall act with the same force and
effect as if the Arbitrator or panel of Arbitrators
have been selected by the parties as described above.
Page 128 of 220
LABOR LAW
iii. Administration and Enforcement of
CBA
Substandard CBA
A CBA that falls below the minimum standards
required by law is prohibited. Nonetheless, RA 9481
removed substandard CBAs as a ground for the
cancellation of registration of union registration.
Note: A substandard CBA cannot bar a petition for
certification election under the contract-bar rule. [Prof.
Battad]
Ratification
Within thirty (30) days from the execution of a
collective bargaining agreement, the parties shall submit
copies of the same directly to the Bureau or the
Regional Offices of the Department of Labor and
Employment for registration accompanied with verified
proofs of its posting in two conspicuous places in the
place of work and ratification by the majority of all the
workers in the bargaining unit. [Art. 237; Book V, IRR
Rule XVII, Sec. 2 (c)]
[T]he posting of copies of the collective bargaining
agreement is the responsibility of the employer. The
fact that there were "no impartial members of the unit"
is immaterial. The purpose of the requirement is
precisely to inform the employees in the bargaining unit
of the contents of said agreement so that they could
intelligently decide whether to accept the same or not.
[Associated Labor Unions v. Ferrer-Calleja, G.R. No. L-
77282 (1989)]
Effect of Non-ratification
General Rule: The collective bargaining agreement
should be ratified by the majority of all the members of
the bargaining unit. Non-compliance with this
requirement renders the CBA ineffective. [Associated
Trade Unions v. Trajano, G.R. No. 75321 (1988)]
Exception: Even if there was no ratification, the CBA will
not be invalid or void considering that the employees
have enjoyed benefits from it.
[The employees] cannot receive benefits under
provisions favorable to them and later insist that the
CBA is void simply because other provisions turn out
not to the liking of certain employees. [Planters Products
Inc. v. National Labor Relations Commission, G.R. No.
78524 (1989)]
 U.P. LAW BOC LABOR RELATIONS
Note: Ratification of the CBA by the employees in the
bargaining unit is not needed when the CBA is a
product of an arbitral award as a result of voluntary
arbitration under Art. 275 or from the secretary’s
assumption of jurisdiction or certification under Art.
278 (g).
Registration
Within thirty (30) days from the execution of a
Collective Bargaining Agreement, the parties shall
submit copies of the same directly to the Bureau or the
Regional Offices of the Department of Labor and
Employment for registration […]. [Art. 237]
iv. Requirements for Registration
The application for CBA registration shall be
accompanied by the original and two (2) duplicate
copies of the following documents which must be
certified under oath by the representative(s) of the
employer(s) and labor union(s) concerned:
1. The collective bargaining agreement
2. A statement that the collective bargaining
agreement was posted in at least two (2)
conspicuous places in the establishment or
establishments concerned for at least five (5) days
before its ratification
3. A statement that the collective bargaining
agreement was ratified by the majority of the
employees in the bargaining unit of the employer
or employees concerned. [Sec. 2, Rule XVII, Book
V, IRR]
Specific information submitted in confidence
General rule: Shall not be disclosed
Exceptions:
1. authorized by Secretary of Labor
2. when it is at issue in any judicial litigation
3. public interest or national security requires [Art.
237]
Effect of Unregistered CBA
An unregistered CBA is binding upon the parties but
cannot serve as a bar to a petition for certification
election under the contract-bar rule.
Sec. 3, Rule VIII, Book V states: A petition for
certification election may be filed anytime, except: [...]
(d) when a collective bargaining agreement between the
employer and a duly recognized or certified bargaining
agent has been registered in accordance with Art. 231
[now 237] of the Labor Code.
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v. CBA Effectivity
If it is the first ever CBA, the effectivity date is whatever
date the parties agree on.
If it is renegotiated CBA, the retroactivity of the date of
effectivity depends upon the duration of conclusion
[Art. 265]:
1. If it is concluded within 6 months from the expiry
date, the new CBA will retroact to the date
following the expiry date [Illustration: expiry date:
December 13; renegotiations concluded on
November 30: effectivity date: December 14].
2. If it is concluded beyond 6 months from the expiry
date, the matter of retroaction and effectivity is left
with the parties.
Hold Over Principle
Art. 264. Duty to bargain collectively when there
exists a collective bargaining agreement. — …
It shall be the duty of both parties to keep the status
quo and to continue in full force and effect the
terms and conditions of the existing agreement
during the 60-day period and/or until a new
agreement is reached by the parties.
The last sentence of Art. 264, which provides for
automatic renewal [upon expiry], pertains only to the
economic provisions of the CBA and does not
include representational aspect of the CBA. A [CBA
which continues to take effect beyond its expiration
date] cannot constitute a bar to a filing of petition for
certification election. When there is a representational
issue, the status quo provision insofar as the need to
await the creation of a new agreement will not apply.
Otherwise, it will create an absurd situation where the
union members will be forced to maintain membership
by virtue of the union security clause existing under the
CBA and, thereafter, support another union when filing
a petition for certification election. If we apply it, there
will always be an issue of disloyalty whenever the
employees exercise their right to self-organization. The
holding of a certification election is a statutory policy
that should not be circumvented, or compromised.
[PICOP Resources, Inc. v. Taneca et al., G.R. No. 160828
(2010)]
Arbitrated CBA
In the absence of an agreement between the parties, an
arbitrated CBA takes on the nature of any judicial or
quasi-judicial award. [Manila Electric Company v.
Quisumbing, G.R. No. 127598 (1999)]
 U.P. LAW BOC LABOR RELATIONS
[I]n the absence of the specific provision of law
prohibiting retroactivity of the effectivity of the arbitral
awards issued by the Secretary of Labor pursuant to
Art. 263(g) of the Labor Code, [the Secretary] is deemed
vested with plenary powers to determine the effectivity
thereof.
[T]o deprive respondent Secretary of such power and
discretion would run counter to the well-established
rule that all doubts in the interpretation of labor laws
should be resolved in favor of labor. In upholding the
assailed orders of respondent Secretary, this Court is
only giving meaning to this rule. Indeed, the Court
should help labor authorities in providing workers
immediate benefits, without being hampered by
arbitration or litigation processes that prove to be not
only nerve-wracking but financially burdensome in the
long run. [LMG Chemicals v. Secretary of Labor, G.R. No.
127422 (2001)]
vi. CBA Duration
Any Collective Bargaining Agreement that the parties
may enter into shall, insofar as the representation aspect
is concerned, be for a term of five (5) years. [...] All
other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3)
years after its execution. [...] [Art. 265]
CBA Duration for economic provisions
3 years.
CBA Duration for non-economic provisions
5 years for representational or political issues; cannot be
renegotiated to extend beyond 5 years. [FVC Labor
Union-PTGWO v. SANAMA-FVC-SIGLO, G.R. No.
176249 (2009)]
CBA Duration: Freedom Period
No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no
certification election shall be conducted by the DOLE
outside of the sixty-day period immediately before
the date of the expiry of such five year term of the
Collective Bargaining Agreement. [Art. 265]
CBA and 3rd Party Applicability
Labor contracts such as employment contracts and
CBAs are not enforceable against a transferee of an
enterprise, labor contracts being in personam, is binding
only between the parties. As a general rule, there is no
law requiring a bona fide purchaser of the assets of an on-
going concern to absorb in its employ the employees of
the latter. However, although the purchaser of the
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assets or enterprise is not legally bound to absorb in its
employ the employees of the seller of such assets or
enterprise, the parties are liable to the employees if the
transaction between the parties is colored or clothed
with bad faith. [Sundowner Development Corporation v.
Drilon, G.R. No. 82341 (1989)]
Where the change of ownership is in bad faith or is used
to defeat the rights of labor, the successor-employer is
deemed to have absorbed the employees and is held
liable for the transgressions of his or her predecessor
[Philippine Airlines, Inc. v. NLRC, G.R. No. 125792
(1998)]
General Rule: An innocent transferee of a business
establishment has no liability to the employees of the
transferor to continue employing them. Nor is the
transferee liable for past unfair labor practices of the
previous owner.
Exception: When the liability therefore is assumed by the
new employer under the contract of sale, or when
liability arises because of the new owner's participation
in thwarting or defeating the rights of the employees.
The most that the transferee may do, for reasons of
public policy and social justice, is to give preference to
the qualified separated employees in the filling of
vacancies in the facilities of the purchaser. [Manlimos v.
NLRC, G.R. No. 113337 (1995)]
The general rule applies only to the sale and purchase
of asset. If the method of acquisition is by way of
purchase of controlling shares, the employer remains
the same and the new owners must honor the existing
contracts.
 U.P. LAW BOC LABOR RELATIONS
E.Unfair Labor Practice
(ULP)
1. Nature, Aspect
Unfair labor practice refers to acts that violate the
workers’ right to organize. The prohibited acts are
related to the workers’ right to self-organization
and to the observance of a CBA. Without that
element, the acts, no matter how unfair, are not unfair
labor practices. The only exception is Art. 259 (f) [i.e.
to dismiss, discharge or otherwise prejudice or
discriminate against an employee for having given or
being about to give testimony under this Code]. [Philcom
Employees Union v. Phil. Global, G.R. No. 144315 (2006)]
Nature of ULP
a. inimical to the legitimate interests of both labor
and management, including their right to bargain
collectively and otherwise deal with each other in
an atmosphere of freedom and mutual respect
b. disrupt industrial peace
c. hinder the promotion of healthy and stable labor-
management relations
d. violations of the civil rights of both labor and
management but are also criminal offenses [Art.
258]
Four forms of Unfair Labor Practice in Collective
Bargaining
a. Failure or Refusal to meet and convene
b. Evading the mandatory subjects of bargaining
c. Bargaining in bad faith
d. Gross violation of the CBA
Purpose of the Policy Against ULPs
Protection of right to self-organization and/or
collective bargaining:
a. The employee is not only protected from the
employer but also from labor organizations.
b. The employer is also protected from ULP
committed by a labor organization.
The public is also protected because it has an interest in
continuing industrial peace.
Employer-Employee Relationship Required
General Rule: An unfair labor practice may be
committed only within the context of an employer-
employee relationship [American President Lines v. Clave,
G.R. No. L-51641 (1982)]
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Exception:
“Yellow Dog” condition or contract: to require as a
condition of employment that a person or an employee
shall not join a labor organization or shall withdraw
from one to which he belongs. [Art. 259 (b)]
Parties Not Estopped from Raising ULP by
Eventual Signing of the CBA
The eventual signing of the CBA does not operate to
estop the parties from raising unfair labor practice
charges against each other. [Standard Chartered Bank
Union v. Confesor, G.R. No. 114974 (2004)]
Statutory Construction
The Labor Code does not undertake the impossible
task of specifying in precise and unmistakable language
each incident which constitutes an unfair labor practice.
Rather, it leaves to the court the work of applying the
law's general prohibitory language in light of infinite
combinations of events which may be charged as
violative of its terms. [HSBC Employee Union v. NLRC,
G.R. No. 125038 (1997)]
Note: Bargaining in bad faith, discussed under 3.a. on
Duty to Bargain Collectively, constitutes Unfair Labor
Practice which may be committed by either Employer
or Labor Organization. See page 182.
2. ULP by Employers
a. Interference/Restraint/Coercion
Art. 259 Unfair Labor Practices of Employers.
—
xxx
a. To interfere with, restrain or coerce employees in
the exercise of their right to self-organization;
There is no per se test of good faith in bargaining. Good
faith or bad faith is an inference to be drawn from the
facts. The effect of an employers or a unions actions
individually is not the test of good-faith bargaining, but
the impact of all such occasions or actions, considered
as a whole. In this case, The fact that the resignations
of the union members occurred during the pendency of
the case before the labor arbiter shows GMCs desperate
attempts to cast doubt on the legitimate status of the
union. The ill-timed letters of resignation from the
union members indicate that GMC had interfered with
the right of its employees to self-organization. [General
Milling Corporation v. Court of Appeals, G.R. 146728
(2004)]
 U.P. LAW BOC LABOR RELATIONS
Interrogation
General rule: employer may interrogate its employees
regarding their union affiliation for legitimate purposes
and with the assurance that no reprisals would be taken
against the unionists.
Exception: when interrogation interferes with or
restrains employees' right to self-organization. [Phil.
Steam Navigation Co. v. Phil. Marine Officer’s Guild, G.R.
Nos. L-20667 and 20669 (1965)]
Note: The interrogation of the ER shouldn’t be
persistent and/or hostile
Speech
The acts of a company which subjects a union to
vilification and its participation in soliciting
membership for a competing union are also acts
constituting a ULP. [Phil. Steam Navigation Co. v. Phil.
Marine Officer’s Guild, G.R. Nos. L-20667 and 20669
(1965)]
An employer may not send letters containing promises
or benefits, nor of threats of obtaining replacements to
individual workers while the employees are on strike
due to a bargaining deadlock. This is tantamount to
interference and is not protected by the Constitution as
free speech. [Insular Life Assurance Co. Employees Assn. v.
Insular Life Assurance Co. Ltd, G.R. No. L-25291 (1971)]
Espionage
Espionage and/or surveillance by the employer of
union activities are instances of interference, restraint
or coercion of employees in connection with their right
to organize, form and join unions as to constitute unfair
labor practice. […] The information obtained by means
of espionage is invaluable to the employer and can be
used in a variety of cases to break a union. [Insular Life
Assurance Co. Employees Assn. v. Insular Life Assurance Co.
Ltd, G.R. No. L-25291 (1971)]
Concerted Activities
The mass demonstration and stoppage of work of the
Union is not ULP. They didn’t demonstrate against the
employer, but against the Pasig police for alleged
human rights abuses. This is merely an exercise of their
freedom of expression, assembly, and right to redress
of grievances enshrined in the Constitution. [Philippine
Blooming Mills Employment Organization v. Philippine
Blooming Mills Co., Inc., G.R. L-31195 (1973)]
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b. Yellow Dog Contracts
Art. 259. Unfair Labor Practices of Employers —
xxx
b. To require as a condition of employment that a
person or an employee shall not join a labor
organization or shall withdraw from one to which he
belongs;
Yellow dog contracts require, as a condition of
employment that a person or an employee shall not join
a labor organization or shall withdraw from one to
which he belongs.
Requisites of a Yellow Dog Contract:
1. a representation by the employee that he is not a
member of a labor organization
2. a promise by the employee that he will not join a
union
3. a promise by the employee that upon joining a
labor organization, he will quit his employment
(Azucena)
c. Contracting Out of Discourage
Unionism
Art. 259. Unfair Labor Practices of Employers
xxx
c. To contract out services or functions being
performed by union members when such will
interfere with, restrain or coerce employees in the
exercise of their right to self-organization;
General Rule: contracting out is not a ULP, but is
covered by the employer’s management prerogative.
Exception [Art. 259 (c)]:
1. contracted-out services or functions are performed
by union members AND
2. contracting out will interfere with, restrain, or
coerce employees in the exercise of their right to
self-organization.
d. Company Union
Art. 259. Unfair Labor Practices of Employers
xxx
d. To initiate, dominate, assist or otherwise interfere
with the formation or administration of any labor
organization, including the giving of financial or
other support to it or its organizers or supporters;
 U.P. LAW BOC LABOR RELATIONS
Company union means any labor organization whose
formation, function or administration has been assisted
by any act defined as unfair labor practice by this Code.
[Art. 219(i)]
The employer commits ULP if it initiates, dominates, or
otherwise interferes with the formation or administration of
any labor organization.
Example: giving out financial aid to any union's
supporters or organizers.
e. Discrimination to Encourage/
Discourage Unionism [Art. 259
(e)]
General Rule: it is ULP to discriminate in regard to
wages, hours of work and other terms and conditions
of employment in order to encourage or discourage
membership in any labor organization.
Exception: Union security clauses
UNION SECURITY CLAUSES
Union security is a generic term which is applied to
and comprehends “closed shop,” “union shop,”
“maintenance of membership” or any other form of
agreement which imposes upon employees the
obligation to acquire or retain union membership as a
condition affecting employment. [NUWHRAIN v.
NLRC, G.R. No. 179402 (2008)]
[Union security clause] is an indirect restriction on the
right of an employee to self-organization. It is a solemn
pronouncement of a policy that while an employee is
given the right to join a labor organization, such right
should only be asserted in a manner that will not spell
the destruction of the same organization. [Tanduay
Distillery Labor Union v. NLRC, G.R. No. 75037 (1987)]
[Employees], although entitled to disaffiliation from
their union to form a new organization of their own,
must, however, suffer the consequences of their
separation from the union under the security clause of
the CBA. [Villar v. Inciong, G.R. No. L-50283-84 (1983)].
Statutory Basis and Rationale
Art. 259 (e). Unfair Labor Practices of
Employers. – Nothing in this Code or in any other
law shall stop the parties from requiring membership
in a recognized collective bargaining agent as a
condition for employment, except those employees
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who are already members of another union at the
time of the signing of the collective bargaining
agreement.
The law has allowed stipulations for 'union shop' and
'closed shop' as means of encouraging workers to join
and support the union of their choice in the protection
of their rights and interests vis-a-vis the employer. [Del
Monte Philippines v. Salvidar, G.R. No. 158620 (2006)]
Purpose
To safeguard and ensure the existence of the union and
thus, promote unionism in general as a state policy.
It is the policy of the State to promote unionism to
enable the workers to negotiate with the management
on the same level and with more persuasiveness than if
they were to individually and independently bargain for
the improvement of their respective conditions. […]
For this reason, the law has sanctioned stipulations for
the union shop and closed shop as a means of
encouraging the workers to join and support the labor
union of their own choice vis-à-vis the employer.
[Liberty Flour Mills Employees v. Liberty Flour Mills, G.R.
No. 58768-70 (1989)]
Coverage [BPI v. BPI Employees Union-Davao Chapter,
G.R. No. 164301 (2010)]
General Rule: All employees in the bargaining unit
covered by the union security clause are subject to its
terms
Exception:
1. Employees who are already members of another
union at the time of the signing of the collective
bargaining agreement may not be compelled by any
union security clause to join any union. [Art. 254
(e)]
2. Employees already in service at the time the closed
shop union security clause took effect
A closed shop provision in a CBA is not to be given
a retroactive effect as to preclude its being applied
to employees already in service. [Guijarno v. CIR,
G.R. No. L-28791-93 (1973)]
3. Any employee who at the time the union security
clause took effect is a bona fide member of religious
organization which prohibits its members from
joining labor unions on religious grounds [Reyes v.
Trajano, 209 SCRA 484 (1992)]
4. Confidential employees who are excluded from the
rank-and-file bargaining unit
 U.P. LAW BOC LABOR RELATIONS
5. Employees excluded from the union security
provisions by express terms of the agreement
TYPES OF UNION SECURITY CLAUSE
1. Closed shop
Condition for employment
An agreement where only union members may be
employed and, for the duration of the agreement,
remains a member in good standing of a union.
A closed shop may be defined as an enterprise in
which, by agreement between the employer and his
employees or their representatives, no person may
be employed in any or certain agreed departments
of the enterprise unless he or she is, becomes, and,
for the duration of the agreement, remains a
member in good standing of a union entirely
comprised of or of which the employees in interest
are a part. [General Milling Corporation (GMC) v.
Casio, G.R. No. 149552 (2010)]
The closed shop provision is the most prized
achievement of unionism. However it can also be
a potent weapon wielded by the union against the
workers whom the union is supposed to protect in
the first place. Hence, any doubt as to the existence
of a closed shop provision in the CBA will be
resolved in favor of the nonexistence of the closed
shop provision. [Azucena]
2. Maintenance of membership shop
Condition for continued employment
An agreement where present and future employees
are not compelled to join the SEBA, but once so
joined, they must maintain their membership as a
condition for continued employment until they are
promoted or transferred out of the bargaining unit
or the agreement is terminated
There is maintenance of membership shop when
employees, who are union members as of the
effective date of the agreement, or who thereafter
become members, must maintain union
membership as a condition for [their] continued
employment until they are promoted or transferred
out of the bargaining unit or the agreement is
terminated. [General Milling Corporation (GMC) v.
Casio, G.R. No. 149552 (2010)]
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3. Union shop
Condition for continued employment
There is union shop when all new regular
employees are required to join the union within a
certain period as a condition for their continued
employment. [General Milling Corporation (GMC) v.
Casio, G.R. No. 149552 (2010)]
Non-members may be hired, but to retain
employment, they must become union members
after a certain period. The requirement applies to
present and future employees. [Azucena]
4. Modified union shop
Condition for continued employment of future
employees
Employees who are not union members at the time
of signing the contract need not join the union, but
all workers hired thereafter must join. [Azucena]
5. Agency shop
Employees belonging to an appropriate collective
bargaining unit who are not members of the
recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the dues and
other fees paid by members of the recognized
collective bargaining agent, if such non-union
members accept the benefits under the collective
agreement: Provided, That the individual
authorization required under Art. [250], paragraph
(o) of [the Labor] Code shall not apply to non-
members of the recognized collective bargaining
agent [Art. 259(e)]
ENFORCEMENT OF UNION SECURITY
CLAUSE
Termination due to Union Security Provision
Termination of employment by virtue of a union
security clause embodied in a CBA is recognized and
accepted in our jurisdiction. This practice strengthens
the union and prevents disunity in the bargaining unit
within the duration of the CBA. By preventing member
disaffiliation with the threat of expulsion from the
union and the consequent termination of employment,
the authorized bargaining representative gains more
numbers and strengthens its position as against other
unions which may want to claim majority
representation. [Alabang Country Club v. NLRC, G.R.
No. 170287 (2008)]
 U.P. LAW BOC LABOR RELATIONS
Requisites for the enforcement of Union Security
Clauses
In terminating the employment of an employee by
enforcing the union security clause, the employer needs
only to determine and prove that:
1. The union security clause is applicable
2. The union is requesting for the enforcement of the
union security provision in the CBA
3. There is sufficient evidence to support the union’s
decision to expel the employee from the union.
[Alabang Country Club v. NLRC, G.R. No. 170287
(2008)]
Company must conduct separate investigation or
hearing
While company may validly dismiss the employees
expelled under the union security clause upon the
recommendation by the union, this dismissal should
not be done hastily and summarily thereby eroding the
employees' right to due process, self-organization and
security of tenure. The enforcement of union security
clauses is authorized by law provided such enforcement
is not characterized by arbitrariness, and always with
due process. Even if there are valid grounds to expel
the union officers, due process requires that these union
officers be accorded a separate hearing by respondent
company. [Malayang Samahan ng Manggagawa sa M.
Greenfield v. Ramos, G.R. No. 113907 (2000)]
Requirement of Due Process
The requirements laid down by the law in determining
whether or not an employee was validly terminated
must still be followed even if it is based on a [union
security clause] of a CBA, i.e. the substantive as well as
the procedural due process requirements. [Del Monte v.
Saldivar, G.R. No. 158620 (2006)]
Obligations and Liabilities
Where the employer dismissed his employees in the
belief in good faith that such dismissal was required by
the [union security provision] of the collective
bargaining agreement with the union, he may not be
ordered to pay back compensations to such employees
although their dismissal is found to be illegal.
[Confederated Sons of Labor v. Anakan Lumber Co., G.R.
No. L-12503 (1960)]
As dictated by fairness, […] the union shall be liable to
pay their backwages. This is because management
would not have taken the action it did had it not been
for the insistence of the labor union seeking to give
effect to its interpretation of a closed shop provision.
[Guijarno v. CIR, G.R. No. L-28791-93 (1973)]
Page 135 of 220
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Nothing in this Code or in any other law shall stop the
parties from requiring membership in a recognized
collective bargaining agent as a condition for
employment.
Note: Dismissals due to USC should still follow the
requirements of due process
f. Discrimination for having given or
about to give testimony
Art. 259 Unfair Labor Practices of Employers —
xxx
(f) To dismiss, discharge or otherwise prejudice or
discriminate against an employee for having given or
being about to give testimony
It is an act of ULP by an employer to dismiss, discharge
or otherwise prejudice or discriminate against an
employee for having given or being about to give
testimony under this Code.
Note: This is broader than the prohibition under Art.
118 because Art. 259 (f) covers testimony under the
whole Code, while Art. 118 only covers testimony
under Book I: Pre-Employment, Title II: Wages
Note further: Includes not giving testimony (see
Azucena)
g. Violation of Duty to Bargain
Collectively
Art. 259 Unfair Labor Practices of Employers —
xxx
(g) To violate the duty to bargain collectively as
prescribed by this Code;
Duty to bargain collectively is a continuous process,
non-compliance of which constitutes ULP. Collective
bargaining does not end with the execution of an
agreement. Being a continuous process, the duty to
bargain necessarily impose on the parties the obligation
to live up to the terms of such a collective bargaining
agreement if entered into, it is undeniable that non-
compliance therewith constitutes an unfair labor
practice. [Shell Oil Workers Union v. Shell Co., G.R. No.
L-28607 (1971)]
Note: See ULP in Collective Bargaining above.
 U.P. LAW BOC LABOR RELATIONS
ACTS DEEMED AS REFUSAL TO BARGAIN
1. Refusal to bargain when there is an unresolved
petition for union cancellation
“That there is a pending cancellation proceedings
against the union is not a bar to set in motion the
mechanics of collective bargaining. […] Unless [the
union’s] certificate of registration and status as the
certified bargaining agent is revoked, [the
employer], by express provision of the law, is duty
bound to collectively bargain with the Union.”
[Capitol Medical Center v. Trajano, G.R. No. 155690
(2005)]
2. Employer’s suspension of operations in order
to forestall a demand for collective bargaining
By admitting that the closure [of the business] was
due to irreconcilable differences between the
Union and the school management, […] SJCI in
effect admitted that it wanted to end the bargaining
deadlock and eliminate the problem dealing with
the demands of the union. [St. John Colleges Inc. v. St.
John Academy Faculty and Employees Union, G.R. No.
167892 (2006)]
3. Implied refusal
The school is guilty of unfair labor practice when it
failed to make a timely reply to the proposals of the union
more than one month after the same were
submitted by the union. In explaining its failure to
reply, the school merely offered a feeble excuse
that its Board of Trustees had not yet convened to
discuss the matter. Clearly, its actuation showed a
lack of sincere desire to negotiate. [Colegio de San Juan de
Letran v. Association of Employees and Faculty of Letran,
G.R. No. 141471 (2000)]
ACTS NOT DEEMED REFUSAL TO BARGAIN
1. Adoption of an adamant bargaining position in
good faith, particularly where the company is
operating at a loss
2. Refusal to bargain over demands for commission
of unfair labor practices
3. Refusal to bargain during period of illegal strike
4. Not initiating the bargaining
5. Refusal to bargain where the union demands for
recognition and bargaining within the year
following a certification election, and the clear
choice is no union and no ad interim significant
change has taken place in the unit
6. Refusal to bargain because the other party is
making unlawful bargaining demands
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h. Payment of Negotiation or
Attorney’s Fees
Art. 259 Unfair Labor Practices of Employers —
xxx
(h) To pay negotiation or attorney's fees to the union
or its officers or agents as part of the settlement of
any issue in collective bargaining or any other
dispute;
Sweetheart contracts are favorable both to the union
and the employer at the expense of the employees. The
settlement of bargaining issues must be made by fair
bargaining in good faith, and not through the payment
of negotiation or attorney's fees which will ultimately
lead to sweetheart contracts.
i. Violation of a Collective
Bargaining Agreement [Art. 259
(i)]
Art. 259 Unfair Labor Practices of Employers —
xxx
i. To violate a collective bargaining agreement.
Flagrant and/or Malicious Refusal to Comply with
Economic Provisions Required
Art. 274. Jurisdiction of Voluntary Arbitrators. –
Accordingly, violations of a Collective Bargaining
Agreement, except those which are gross in
character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under
the Collective Bargaining Agreement. For purposes
of this Art., gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious
refusal to comply with the economic provisions of
such agreement.
Violations of collective bargaining agreements, except
flagrant and/or malicious refusal to comply with its
economic provisions, shall not be considered unfair
labor practice and shall not be strikeable. [Book V, Rule
XXII, Sec. 5]
Note: The list in Art. 259 is not exhaustive. Other acts
which are analogous to those enumerated can be ULPs.
 U.P. LAW BOC LABOR RELATIONS
The alleged violation of the CBA, even assuming it was
malicious and flagrant, is not a violation of an
economic provision, thus not an Unfair Labor
Practice. [BPI Employees Union-Davao FUBU v. BPI, G.R.
No. 174912 (2013)]
An employer cannot be considered to have committed
a gross and economic violation of the CBA when it, in
good faith, withheld union dues and death benefits
from the union upon written request of the union
members in light of the conflict between the members
and the union officers and instead deposited such
amount to the DOLE. [Arellano University Employees and
Workers Union v. Court of Appeals, G.R. 139940 (2006)]
Motive, Conduct, Proof
To constitute ULP, the dismissals by the ER need not
be entirely motivated by union activities or affiliations.
It is enough that discrimination was a factor. The other
reasons for the dismissal proffered by the ER, though
seemingly valid, would be unavailing under these
circumstances. [Me-Shurn Corp. v. Me-Shurn Workers
Union-FSM, G.R. 156292 (2005)]
Note: The basic inspiration of the dismissals should
concern the right to self-organization
Totality of Evidence
Where the attendant circumstances, the history of the
employer's past conduct and like considerations,
coupled with an intimate connection between the
employer's action and the union affiliations or activities
of the particular employee or employees taken as a
whole raise a suspicion as to the motivation for the
employer's action, the failure of the employer to ascribe
a valid reason therefor may justify an inference that his
unexplained conduct in respect of the particular
employee or employees was inspired by the latter's
union membership or activities. [Royal Undergarment
Corporation of the Philippines v. CIR, G.R. L-39040 (1990)]
3. ULP of Labor Organizations
a. Restraint or Coercion
Art. 260 Unfair Labor Practices of Labor
Organizations — xxx
(a) To restrain or coerce employees in the exercise
of their right to self-organization. However, a labor
organization shall have the right to prescribe its own
rules with respect to the acquisition or retention of
membership;
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“Interfere” is not included in Art. 260 simply because
any act of a labor organization amounts to interference
to the right of self-organization.
b. Discrimination: Encourage/
Discourage Unionism
Art. 260 Unfair Labor Practices of Labor
Organizations — xxx
b. To cause or attempt to cause an employer to
discriminate against an employee, including
discrimination against an employee with respect to
whom membership in such organization has been
denied or to terminate an employee on any ground
other than the usual terms and conditions under
which membership or continuation of membership
is made available to other members;
General rule: it is a ULP for a labor organization to cause
an employer to discriminate against an employee.
Exception: provisions of a valid union security clause and
other company policies applicable to all employees.
c. Violation of Duty, or Refuse to
Bargain
Art. 260 Unfair Labor Practices of Labor
Organizations — xxx
(c) To violate the duty, or refuse to bargain
collectively with the employer, provided it is the
representative of the employees;
Note: See ULP in Collective Bargaining above.
Note further: See discussion under 2(g)
d. Illegal Exaction (Featherbedding)
Art. 260 Unfair Labor Practices of Labor
Organizations — xxx
(d) To cause or attempt to cause an employer to pay
or deliver or agree to pay or deliver any money or
other things of value, in the nature of an exaction,
for services which are not performed or not to be
performed, including the demand for fee for union
negotiations;
 U.P. LAW BOC LABOR RELATIONS
The practice of the labor organization to cause or
attempt to cause an employer to pay or deliver or agree
to pay or deliver money or other things of value, in the
nature of an exaction, for services which are not
performed or are not to be performed, including the
demand for a fee for union negotiations.
e. Asking or Accepting Negotiation
and other Attorney's Fees [Art.
260 (E)]
Art. 260 Unfair Labor Practices of Labor
Organizations — xxx
e. To ask for or accept negotiation or attorney's fees
from employers as part of the settlement of any issue
in collective bargaining or any other dispute
See counterpart in ULP by Employers (sweetheart
contracts).
f. Violation of a Collective
Bargaining Agreement
Art. 260 Unfair Labor Practices of Labor
Organizations — xxx
(f) To violate a collective bargaining agreement.
Gross Violations of the CBA
Art. 274. Jurisdiction of Voluntary Arbitrators. –
Accordingly, violations of a Collective Bargaining
Agreement, except those which are gross in
character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under
the Collective Bargaining Agreement. For purposes
of this Art., gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious
refusal to comply with the economic provisions of
such agreement.
Flagrant and/or malicious refusal required
Violations of collective bargaining agreements, except
flagrant and/or malicious refusal to comply with its
economic provisions, shall not be considered unfair
labor practice [Art. 274] and shall not be strikeable [Sec.
5, Rule XXII, Book V, IRR].
Note: See also discussion on bargaining in bad faith
under 3(a) which constitute ULP of either the
Employer or the Labor Organization.
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F. Peaceful Concerted
Activities
BASIS
Sec. 3, Art. XIII, 1987 Constitution. – [The State]
shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right
to strike in accordance with law.
Art. 278 (b). Strikes, Picketing and Lockouts. –
Workers shall have the right to engage in concerted
activities for purposes of collective bargaining or for
their mutual benefit and protection. The right of
legitimate labor organizations to strike and picket
and of employers to lockout, consistent with the
national interest, shall continue to be recognized
and respected. However, no labor union may strike
and no employer may declare a lockout on grounds
involving inter-union and intra-union disputes.
Definition
A concerted activity is one undertaken by two or more
employees to improve their terms and conditions of
work.
Nature of the Right to Strike and Lockout
The right to strike is a constitutional and legal right of
the workers as the employers have the inherent and
statutory right to lockout within the context of labor
relations and collective bargaining.
It is a means of last resort and presupposes that the duty
to bargain in good faith has been fulfilled and other
voluntary modes of dispute settlement have been tried
and exhausted. [Guidelines Governing Labor Relations
(1987)]
Art. 257. Non-abridgment of right to self-
organization. — It shall be unlawful for any person
to restrain, coerce, discriminate against or unduly
interfere with employees and workers in their
exercise of the right to self-organization. Such right
shall include the right to form, join, or assist labor
organizations for the purpose of collective
bargaining through representatives of their own
choosing and to engage in lawful concerted activities
for the same purpose or for their mutual aid and
protection, subject to the provisions of Art. [279] of
this Code.
 U.P. LAW BOC LABOR RELATIONS
Limitation: Concerted activities must be in
accordance with law
The strike is a powerful weapon of the working class.
Precisely because of this, it must be handled carefully,
like a sensitive explosive, lest it blow up in the workers’
own hands. Thus, it must be declared only after the
most thoughtful consultation among them, conducted
in the only way allowed, that is, peacefully, and in every
case conformably to reasonable regulation. Any
violation of the legal requirements and strictures will
render the strike illegal, to the detriment of the very
workers it is supposed to protect. [Batangas Laguna
Tayabas Bus Co. v. NLRC, G.R. No. 101858 (1992)]
FORMS OF CONCERTED ACTIVITIES
Concerted Activities by Employees:
1. Strike (includes slow downs, mass leaves, sitdowns,
attempts to damage destroy or sabotage plant
equipment and similar activities)
2. Picketing
3. Boycott
Response to Concerted Activities available to
Employers:
1. Lockout
Who may declare a strike
1. The certified or duly recognized bargaining
representative
2. Any legitimate labor organization in the absence of
a certified or duly recognized bargaining
representative, but only on grounds of ULP [Sec.
6, Rule XXII, Book V, IRR]
Who may declare a lockout
The employer [Art. 278(b)]
1. Strike
Strike
Any temporary stoppage of work by the concerted
action of employees as a result of an industrial or labor
dispute. [Art. 219(o)]
Labor Dispute
Includes any controversy or matter concerning terms
and conditions of employment or the association or
representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and
conditions of employment, regardless of whether or not
the disputants stand in the proximate relation of
employers and employees. [Solidbank Corp. v. EU
Gamier, G.R. No. 159460 and G.R. No. 159461 (2010)]
Page 139 of 220
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Strikes not limited to work stoppages
The term “strike” shall comprise not only concerted
work stoppages, but also slowdowns, mass leaves, sit-
downs, attempts to damage, destroy or sabotage plant
equipment and facilities, and similar activities.
[Samahang Manggagawa v. Sulpicio Lines, G.R. No. 140992
(2004)]
As coercive measure by employees
A strike is a coercive measure resorted to by laborers to
enforce their demands. The idea behind a strike is that
a company engaged in a profitable business cannot
afford to have its production or activities interrupted,
much less, paralyzed. [Phil. Can Co. v. CIR, G.R. No. L-
3021 (1950)]
No severance of employer-employee relationship
during lawful strike
Although during a strike the worker renders no work or
service and receives no compensation, yet his
relationship as an employee with his employer is not
severed or dissolved. [Elizalde Rope Factory, Inc. v. SSS,
G.R. No. L-15163 (1962)]
Payment of wages during lawful strikes
General rule: Striking employees are not entitled to the
payment of wages for un-worked days during the period
of the strike pursuant to the “no work-no pay”
principle.
Exception: If there is no work performed by the
employee there can be no wage or pay unless the laborer
was able, willing and ready to work but was illegally
locked out, suspended or dismissed or otherwise
illegally prevented from working. For this exception to
apply, it is required that the strike be legal. [Visayas
Community Medical Center v. Yballe, G.R. No. 196156
(2014)]
Reinstatement after a lawful strike
When strikers abandon the strike and apply for
reinstatement despite the existence of valid grounds but
the employer either:
a. refuses to reinstate them or
b. imposes upon their reinstatement new conditions
then the employer commits an act of ULP.
The strikers who refuse to accept the new conditions
and are consequently refused reinstatement are entitled
to the losses of pay they may have suffered by reason
of the employer’s discriminatory acts from the time they
were refused reinstatement. [Philippine Marine Officers’
 U.P. LAW BOC LABOR RELATIONS
Guild v. Compania Maritima, G.R. No. L-20662 and L-
20663 (1968)]
No Strike No Lockout Clause
A "no strike, no lock-out" provision in the [CBA] is a
valid stipulation although the clause may be invoked by
an employer only when the strike is economic in nature
or one which is conducted to force wage or other
concessions from the employer that are not mandated
to be granted by the law itself. It would be inapplicable
to prevent a strike which is grounded on unfair labor
practice. [Panay Electric Co. v. NLRC, G.R. No. 102672
(1995); Malayang Samahan ng mga Manggagawa sa Greenfield
v. Ramos, G.R. No. 113907 (2000)]
a. Other Forms of Strike
AS TO GROUNDS
1. Economic strike – one staged by workers to force
wage or other economic concessions from the
employer which he is not required by law to grant;
not a strikeable ground [Consolidated Labor
Association of the Phil. v. Marsman and Company, G.R.
No. L-17038 (1964)]
2. ULP strike – called against a company's unfair
labor practice to force the employer to desist from
committing such practices.
AS TO HOW COMMITTED
1. Slowdown strike – one by which workers, without
a complete stoppage of work, retard production or
their performance of duties and functions to
compel management to grant their demands.
A slowdown is inherently illicit and unjustifiable
because while the employees continue to work,
they, at the same time, select what part of their
duties they perform. In essence, they work on their
own terms. It is a strike on installment basis. [Ilaw
at Buklod ng Manggagawa v. NLRC, G.R. No. 91980
(1991)]
2. Wild-cat strike – one declared and staged without
filing the required notice of strike and without the
majority approval of the recognized bargaining
agent [NUWHRAIN – The Peninsula Manila Chapter
v. NLRC, G.R. No. 125561 (1998)]
3. Sit-down strike – one wherein workers take over
possession of the property of such business to
cease production and to refuse access to owners.
[Sukhothai Cuisine & Restaurant v. CA, G.R. No.
150437 (2006)]
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LABOR LAW
4. Sympathetic strike – one in which the striking
workers have no demands of their own, but strike
to make common cause with other strikers in other
establishments (ex. Welga ng Bayan). This is illegal
because there is no labor dispute between workers
who are joining the workers [Biflex Phils. Inc. Labor
Union v. Filflex Industrial and Manufacturing
Corporation, G.R. No. 155679, (2006)]
5. Mass leave – one in which workers collectively
abandon or boycott regular work causing
temporary stoppage of work [Solidbank Corp. v.
E.U. Gamier, G.R. No. 159460-61 (2010)]
Conversion from economic to ULP strike
It is possible for a strike to change its character from an
economic to a ULP strike. In the instant case, initially,
the strike staged by the Union was meant to compel the
Company to grant it certain economic benefits set forth
in its proposal for collective bargaining. However, the
strike changed its character from the time the Company
refused to reinstate complainants because of their union
activities after it had offered to admit all the strikers and
in fact did readmit the others. It was then converted
into an unfair labor practice strike. [Consolidated Labor
Association of the Phil. v. Marsman and Company, G.R. No.
L-17038 (1964)]
Strike cannot be converted to a lockout by a return
to work offer
A strike cannot be converted into a pure and simple
lockout by the mere expedient filing before the trial
court a notice of offer to return to work during the
pendency of the labor dispute between the union and
the employer. [Rizal Cement Workers Union v. CIR, G.R.
No. L-18442 (1962)]
Requisites for a Valid Strike
A valid strike must have a lawful ground and must
conform with the procedural requirements set by law.
Substantial Requirements/Grounds
A strike or lockout may be declared in cases of:
1. Bargaining deadlocks
2. ULP [Art. 278(c)]
Note: a strike justified by the employees’ belief in good
faith that ULP was done by the employer at the time
the strikers went on strike is presumed valid even if the
fact of ULP was later found to be untrue [Master Iron
Labor v. NLRC, 219 SCRA 47 (1993)
 U.P. LAW BOC LABOR RELATIONS
VALID v. ILLEGAL STRIKE
1. Legal strike – one called for a valid purpose and
conducted through means allowed by law.
2. Illegal strike – one staged for a purpose not
recognized by law, or if for a valid purpose,
conducted through means not sanctioned by law.
EFFECT OF ILLEGALITY / LIABILITY OF
PARTICIPATING MEMBERS/OFFICERS OF
THE UNION
1. Ordinary Striking Worker – cannot be
terminated for mere participation in an illegal
strike; proof must be adduced showing that he or
she committed illegal acts during the strike.
2. Participating Union Officer – may be
terminated, not only when he actually commits an
illegal act during a strike, but also if he knowingly
participates in an illegal strike [Phimco Industries, Inc.
v. PILA, G.R. No. 170830 (2010)]
Prohibited Grounds for Strike
1. Labor standards cases such as wage orders
2. Issues involving wage distortion caused by
legislated wage orders
3. Inter or intra union disputes
4. Execution and enforcement of final orders or
awards of cases pending at the DOLE Regional
Offices, BLR, NLRC, VA, CA and SC and related
offices
5. Violations of the CBA which are not gross in
character (not ULP) [BPI Employees Union-Davao
FUBU v. BPI, G.R. No. 174912 (2013)]
Gross in character shall mean flagrant and/or malicious
refusal to comply with the economic provisions of such
agreement. [Art. 274]
PROHIBITED ACTIVITIES IN STRIKE
1. By anyone. No person shall obstruct, impede, or
interfere with, by force, violence, coercion, threats,
or intimidation, any peaceful picketing by
employees [Art. 279(b)];
a. Blocking the free ingress to/ egress from work
premises for lawful purposes
b. Obstruction of public thoroughfares
c. Threatening, coercing and intimidating non-
striking employees, officers, suppliers and
customers
d. Resistance and defiance of assumption of
jurisdiction by the Labor Secretary or an
injunction
e. Acts of violence [Association of Independent
Unions in the Philippines (AIUP), et. al. v. NLRC,
G.R. No. 120505 (1999)]
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The violence must be pervasive and widespread,
consistently and deliberately resorted to as a matter
of policy [Shell Oil Workers v. Shell Company of the
Phil., 39 SCRA 276 (1971)] (if violence was resorted
to by both sides, such violence cannot be a ground
for declaring the strike as illegal) [Malayang Samahan
ng Manggagawa sa M. Greenfield v. Ramos, 357 SCRA
77 (2000)]
2. By employer. No employer shall use or employ
any strike-breaker, nor shall any person be
employed as a strike-breaker. [Art. 279(c)]
3. By public official or police force. No public
official or employee, including officers and
personnel of the New Armed Forces of the
Philippines or the Integrated National Police, or
armed person, shall bring in, introduce or escort in
any manner, any individual who seeks to replace
strikers in entering or leaving the premises of a
strike area, or work in place of the strikers. [Art.
279(d)]
b. Categories of Illegal Strike
i. Prohibited by Law (e.g. Strike By
Government Employees)
Government employees
While the Constitution guarantees the right of
government employees to organize, they are not
allowed to strike.
ii. Improper Grounds (e.g. Intra or Inter
Union Dispute, Wage Distortion)
A legal strike must be based on a bargaining deadlock
and/or a ULP act only.
Intra-union and inter-union disputes are not proper
grounds to strike.
Note: Good faith strike
Good faith may be used as a defense if the strike is held
on the basis of an act of ULP by the employer even if
it turned out that there was no act of ULP. However,
the mandatory procedural requirements cannot be
dispensed with (notice of strike, cooling-off period,
strike vote, strike vote report). [Grand Boulevard Hotel v.
GLOWHRAIN, G.R. No. 153664 (2003)]
 U.P. LAW BOC LABOR RELATIONS
Good faith strike requires rational basis
A mere claim of good faith would not justify the
holding of a strike under the aforesaid exception as, in
addition thereto, the circumstances must have
warranted such belief. It is, therefore, not enough that
the union believed that the employer committed acts of
ULP when the circumstances clearly negate even a
prima facie showing to sustain such belief. [Interwood
Employees Assoc. v. Int’l Hardwood, G.R. No. L-7409
(1956)]
iii. Noncompliance With Procedural
Requirements
See: Procedural requirements of a valid strike below
A strike which does not strictly comply with the
procedural requirements set by law and the rules is an
unlawful/illegal strike. [Sta. Rosa Coca-Cola Plant
Employees Union v. Coca-Cola Bottlers Philippines, Inc., G.R.
Nos. 164302-03 (2007)]
Note: Good faith strike must still comply with
procedural requirements
Even if the union acted in good faith in the belief that
the company was committing an unfair labor practice,
if no notice of strike and a strike vote were conducted,
the said strike is illegal. [Grand Boulevard Hotel v.
GLOWHRAIN, G.R. No. 153664 (2003)]
General Rule: A strike based on a non-strikeable ground
is an illegal strike; a strike grounded on ULP is illegal if
no such acts actually exist.
Exception: Even if no ULP acts are committed by the
employer, if the employees believe in good faith that
ULP acts exist so as to constitute a valid ground to
strike, then the strike held pursuant to such belief may
be legal. [NUWHRAIN v. NLRC, G.R. No. 125561
(1998)]
iv. Unlawful Means And Methods
Purpose and means test
There must be concurrence between the validity of the
purpose of the strike and the means of conducting it.
A strike is a legitimate weapon in the universal struggle
for existence. It is considered as the most effective
weapon in protecting the rights of the employees to
improve the terms and conditions of their employment.
But to be valid, a strike must be pursued within
legal bounds. The right to strike as a means for the
Page 142 of 220
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attainment of social justice is never meant to
oppress or destroy the employer. The law provides
limits for its exercise. Among such limits are the
prohibited activities under Art. [279], particularly
paragraph (e), which states that no person engaged in
picketing shall:
1. commit any act of violence, coercion, or
intimidation or
2. obstruct the free ingress to or egress from the
employer's premises for lawful purposes or
3. obstruct public thoroughfares.
A legal strike may turn into an illegal strike
Even if the strike is valid because its objective or
purpose is lawful, the strike may still be declared invalid
where the means employed are illegal. [Phil. Diamond
Hotel and Resort, Inc. v. Manila Diamond Hotel Employees
Union, G.R. No. 158075 (2006)]
Examples of unlawful means and methods
1. Acts of violence and terrorism
2. Destruction of property
Guidelines and balancing of Interest
1. A strike otherwise valid, if violent in character, may
be placed beyond the pale.
2. Care is to be taken especially where an unfair labor
practice is involved, to avoid stamping it with
illegality just because it is tainted by such acts. To
avoid rendering illusory the recognition of the right
to strike, responsibility in such a case should be
individual and not collective.
3. A different conclusion would be called for if the
existence of force while the strike lasts is pervasive
and widespread, consistently and deliberately
resorted to as a matter of policy. It could be
reasonably concluded then that even if justified as
to ends, it becomes illegal because of the means
employed'.
4. This is not by any means to condone the utilization
of force by labor to attain its objectives. It is only
to show awareness that in labor conflicts, the
tension that fills the air as well as the feeling of
frustration and bitterness could break out in
sporadic acts of violence.
If there be in this case a weighing of interests in the
balance, the ban the law imposes on unfair labor
practices by management that could provoke a strike
and its requirement that it be conducted peaceably, it
would be, to repeat, unjustified, considering all the facts
disclosed, to stamp the strike with illegality. It is enough
that individual liability be incurred by those guilty of
such acts of violence that call for loss of employee
 U.P. LAW BOC LABOR RELATIONS
status. Such an approach is reflected in our recent
decisions. [Shell Oil Workers Union v. Shell Co. of the Phils,
G.R. No. L-28607 (1971)]
The Labor Code regulates the exercise of said right by
balancing the interests of labor and management in the
light of the overarching public interest. Thus,
paragraphs (c) and (f) of Art. 278 mandate the following
procedural steps to be followed before a strike may be
staged: filing of notice of strike, taking of strike vote,
and reporting of the strike vote result to the DOLE. It
bears stressing that these requirements are mandatory,
meaning, non-compliance therewith makes the strike
illegal. The evident intention of the law in requiring the
strike notice and strike-vote report is to reasonably
regulate the right to strike, which is essential to the
attainment of legitimate policy objectives embodied in
the law. [Stamford Mark Corp. v. Julian, G.R. No. 145496
(2004)]
v. Violation Of Injunction Order
An automatic injunction under Art. 278(g) or a valid
injunction order under the exceptions to Art. 279 must
be complied with. Otherwise, the strike becomes illegal.
vi. Those Contrary To An Existing
Agreement
(e.g. No strike/lockout provisions in the CBA) [Citing
Ludwig Teller in Toyota Motors v. NLRC, G.R. Nos.
158786 & 158787 (2007)]
No Strike/Lockout Provisions in the CBA
A “no strike, no lock-out” is a valid provision in the
CBA. However, it only applies to economic provisions.
It cannot prevent a strike which is grounded on unfair
labor practice. [Malayang Samahan ng mga Manggagawa sa
Greenfield v. Ramos, G.R. No. 113907 (2000)]
vii. The Strikers do not belong to a
Legitimate Labor Organization
[Magdala Multipurpose & Livelihood Coop. v. Kilusang
Manggagawa Ng LGS, G.R. No. 191138-39 (2011)]
Liabilities of Parties
Any union officer who knowingly participates in an
illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his
employment status. [Art. 279(a)]
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LABOR LAW
Note: Mere participation in an illegal strike by a union
officer is sufficient ground to terminate his
employment. In case of a lawful strike, the union officer
must commit illegal acts during a strike for him to be
terminated. [Art. 279(a)]
Procedural due process is still required for dismissing
union officers/ordinary workers. of The essence of due
process is the opportunity to be heard. What the law
prohibits is not the absence of previous notice but the
absolute absence thereof and the lack of opportunity to
be heard. Where an opportunity to be heard either
through oral arguments or through pleadings is
accorded, there is no denial of procedural due process.
[Equitable PCI Banking Corp. v. RCBC Capital Corp, 574
SCRA 858 (2004)
Liability of Ordinary Workers
General rule: Participation by a worker in a lawful strike
is not ground for termination of his employment. [Art.
279(a)]
Exception: When the worker participated in illegal acts
during the strike; needs clear, substantial and
convincing proof available under the circumstances to
justify the penalty of dismissal [Toyota Motors Philippines
Workers Association v. NLRC, 537 SCRA 171 (2007)]
Note: The mere fact that the criminal complaints against
terminated Union members were subsequently
dismissed does not extinguish their liability under the
Labor Code [C. Alcantara & Sons, Inc. v. CA, G.R. No.
155109 (2011)]
Liability of Employer
Any worker whose employment has been terminated as
a consequence of any unlawful lockout shall be entitled
to reinstatement with full backwages. [Art. 279(a)]
WAIVER OF ILLEGALITY OF STRIKE/
CONDONATION DOCTRINE
When defense of illegality of strike is deemed
waived
An employer can be deemed to have waived the defense
that a strike is illegal. In one case, the Court held that:
“Admitting for the sake of argument that the strike was
illegal for being premature, this defense was waived by
the [Company], when it voluntarily agreed to
reinstate the radio operators.” [Bisaya Land
Transportation Co., Inc. v. CIR, G.R. No. L-10114 (1957)]
 U.P. LAW BOC LABOR RELATIONS
When defense of illegality of strike is not deemed
waived
The ruling cited in the Bisaya case that the employer
waives his defense of illegality of the strike upon
reinstatement of strikers is applicable only to strikers
who signified their intention to return to work and were
accepted back. […]
Truly, it is more logical and reasonable for condonation
to apply only to strikers who signified their intention to
return and did return to work. The reason is obvious.
These strikers took the initiative in normalizing
relations with their employer and thus helped promote
industrial peace. However, as regards the strikers
who decided to pursue with the case, […] the
employer could not be deemed to have condoned
their strike, because they had not shown any
willingness to normalize relations with it. [Philippine
Inter-Fashion, Inc. v. NLRC, G.R. No. L-59847 (1982)]
However, the mere act of entering into a compromise
agreement cannot be deemed to be a waiver of the
illegality of the strike, unless it such a waiver is clearly
shown in the agreement. The court has emphasized that
“[for] a waiver to be valid and effective [it] must be
couched in clear and unequivocal terms which leave no
doubt as to the intention of a party to give up a right or
benefit which legally pertains to him.” [Filcon
Manufacturing Corp v. Lakas Manggagawa sa Filcon – Lakas
Manggagawa Labor Center, G.R. No. 150166 (2004)]
Procedural Requirements for Strike [Art. 278]
1. Effort to bargain (for bargaining deadlock strikes)
2. Filing and service of notice of strike
3. Observance of cooling-off period
a. 15 days for ULP
No cooling-off period when the ULP can be
considered union busting (dismissal of duly
elected union officers from employment)
b. 30 days for bargaining deadlock
4. Notice of strike vote meeting to NCMB within 24
hours before the strike vote [Sec. 10, Rule XXII,
Book V, IRR]
5. Strike vote
6. Strike vote report sent to NCMB
7. Observance of the waiting period (7-day strike ban)
c. Effort to Bargain
No labor organization […] shall declare a strike […]
without first having bargained collectively in
accordance with Title VII of this Book […] [Art. 279(a)]
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In case of bargaining deadlocks, the notice shall, as far
as practicable, further state the unresolved issues in
the bargaining negotiations and be accompanied by the
written proposals of the union, the counter-proposals
of the employer and the proof of a request for
conference to settle differences. In cases of unfair labor
practices, the notice shall, as far as practicable, state the
acts complained of, and efforts taken to resolve the
dispute amicably. [Sec. 4, Rule XXII, Book V, IRR]
The Implementing Rules use the words as far as
practicable. In this case, attaching the counter-proposal
of the company to the notice of strike of the union was
not practicable. It was absurd to expect the union to
produce the company’s counter-proposal which it did
not have. One cannot give what one does not have.
Indeed, compliance with the requirement was
impossible because no counter-proposal existed at the
time the union filed a notice of strike. [Club Filipino, Inc.
v. Bautista, G.R. No. 168406 (2009)]
d. Filing and Service of Notice of
Strike
Art. 278 (c). Strikes, Picketing and Lockouts. –
In case of bargaining deadlocks, the duly certified or
recognized bargaining agent may file a notice of
strike or the employer may file a notice of lockout
with the Ministry at least 30 days before the intended
date thereof. In cases of unfair labor practice, the
period of notice shall be 15 days and in the absence
of a duly certified or recognized bargaining agent,
the notice of strike may be filed by any legitimate
labor organization in behalf of its members.
However, in case of dismissal from employment of
union officers duly elected in accordance with the
union constitution and by-laws, which may
constitute union-busting, where the existence of the
union is threatened, the 15-day cooling-off period
shall not apply and the union may take action
immediately.
Unfair Labor Practice; Union Busting
Note: The notice must be served to the employer.
Failure to do so will constitute noncompliance with the
procedural requirements and will result to an illegal
strike. [Filipino Pipe and Foundry Corp v. NLRC, G.R. No.
115180 (1999)]
Rationale: Due process. [IRR]
 U.P. LAW BOC LABOR RELATIONS
Contents of Notice of Strike
1. Names and addresses of the employer and the
union involved
2. Nature of the industry to which the employer
belongs
3. Number of union members and of workers in the
bargaining unit
4. Such other relevant data as may facilitate the
settlement of the dispute.
ADDITIONAL REQUIREMENTS
In case of Bargaining Deadlocks:
1. Statement of unresolved issues in the bargaining
negotiations
2. Written proposals of the union
3. Counter-proposals of the employer
4. Proof of a request for conference to settle the
differences. [Sec. 4, Rule XXII, Book V, IRR]
In cases of ULP:
1. Statement of acts complained of
2. Efforts taken to resolve the dispute amicably. [Sec.
4, Rule XXII, Book V, IRR]
Action on Notice:
1. Upon receipt of a valid notice of strike or lockout,
the NCMB, through its Conciliator-Mediators,
shall call the parties to a conference the soonest
possible time in order to actively assist them to
explore all possibilities for amicable settlement.
2. The Conciliator-Mediator may suggest/offer
proposals as an alternative avenue for the
resolution of their disagreement/conflict which
may not necessarily bind the parties.
3. If conciliation/mediation fails, the parties shall be
encouraged to submit their dispute for voluntary
arbitration.
e. Observance of Cooling-Off
Periods
Cooling off periods
1. Bargaining deadlock – 30 days
2. ULP but not un ion busting – 15 days
3. ULP and union busting – no cooling-off period
Purpose of Cooling Off Period
Art. 278 (e). Strikes, Picketing and Lockouts. –
During the cooling-off period, it shall be the duty of
the Ministry [now DOLE] to exert all efforts at
mediation and conciliation to effect a voluntary
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settlement. Should the dispute remain unsettled until
the lapse of the requisite number of days from the
mandatory filing of the notice, the labor union may
strike or the employer may declare a lockout.
The purpose of the cooling-off period is to provide an
opportunity for mediation and conciliation. [National
Federation of Sugar Workers v. Ovejera, G.R. No. L-59743
(1982)]
f. Notice of Strike-Vote Meeting
Art. 278 (f). Strikes, Picketing and Lockouts. –
[T]he Department may, at its own initiative or upon
the request of any affected party, supervise the
conduct of the secret balloting. […]
Sec. 10, Rule XXII, Book V. Strike or Lockout
Vote. – In every case, the union or the employer shall furnish
the regional branch of the Board the notice of meetings referred
to in the preceding paragraph at least twenty-four (24) hours
before such meetings…
The purpose of the notice is to allow the NCMB to
decide whether or not they will send a representative to
supervise the strike vote.
g. Strike Vote
Art. 278 (f). Strikes, Picketing and Lockouts. –
A decision to declare a lockout must be approved by
a majority of the board of directors of the
corporation or association or of the partners in a
partnership, obtained by secret ballot in a meeting
called for that purpose…
Requirements for a declaration of a strike in a
strike vote
1. approval by a majority of the total union
membership in the bargaining unit concerned
2. approval is obtained by secret ballot in a
meeting/referendum called for the purpose
Duration of the Validity of the Strike-Vote
Art. 278 (f). Strikes, Picketing and Lockouts. –
[T]he decision shall be valid for the duration of the
dispute based on substantially the same grounds
considered when the strike or lockout vote was
taken. […]
 U.P. LAW BOC LABOR RELATIONS
h. Strike Vote Report
Art. 278 (f). Strikes, Picketing and Lockouts. –
[I]n every case, the union or the employer shall
furnish the Department the results of the voting at
least 7 days before the intended strike or lockout,
subject to the cooling-off period herein provided.
i. Observance of the 7-Day Waiting
Period
7 Day Observance of the Strike Ban
The waiting period, on the other hand, is intended to
provide opportunity for the members of the union or
the management to take the appropriate remedy in case
the strike or lockout vote report is false or inaccurate.
[National Federation of Sugar Workers v. Ovejera, G.R. No.
L-59743 (1982)]
The waiting period is intended to give the DOLE an
opportunity to verify whether the projected strike really
carries the imprimatur of the majority of the union
members. [Lapanday Workers Union v. NLRC, G.R. Nos.
95494-97 (1995)]
Compliance with Both Cooling-off and Waiting
Periods
The observance of both periods must be complied with,
although a labor union may take a strike vote and report
the same within the statutory cooling-off period. The
cooling-off and 7-day strike ban provisions of law
constitute a valid exercise of police power of the State.
[National Federation of Sugar Workers v. Ovejera, G.R. No.
L-59743 (1982)]
Mutually exclusive periods (used in the NCMB
Manual). The cooling off period and the 7-day period
are mutually exclusive. Thus, in the case of Capitol
Medical Center v. NLRC [G.R. No. 147080 (2005)], the
Court held that when the strike vote is conducted
within the cooling-off period, the 7-day requirement
shall be counted from the day following the expiration
of the cooling off period.
Improved Offer Balloting
Sec. 12, Rule XXII, Book V. Improved Offer
Balloting. – In case of a strike, the regional branch
of the Board shall, at its own initiative or upon the
request of any affected party, conduct a referendum
by secret balloting on the improved offer of the
employer on or before the 30th day of strike.
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When at least a majority of the union members vote
to accept the improved offer, the striking workers
shall immediately return to work and the employer
shall thereupon re-admit them upon the signing of
the agreement.
In case of a lockout, the regional branch of the
Board shall also conduct a referendum by secret
balloting on the reduced offer of the union on or
before the 30th day of the lockout. When at least a
majority of the board of directors or trustees or the
partners holding the controlling interest in the case
of partnership vote to accept the reduced offer, the
workers shall immediately return to work and the
employer shall thereupon readmit them upon the
signing of the agreement.
2. Picketing
The right of legitimate labor organizations to strike and
picket and of employers to lockout, consistent with the
national interest, shall continue to be recognized and
respected. [Art. 278(b)]
Picketing involves merely the marching to and fro at
the premises of the employer, usually accompanied by
the display of placards and other signs making known
the facts involved in a labor dispute. As applied to a
labor dispute, to picket means the stationing of one or
more persons to observe and attempt to observe. The
purpose of pickets is said to be a means of peaceable
persuasion. [Sta. Rosa Coca-Cola Plant Employees Union v.
Coca-Cola Bottlers Philippines, Inc., G.R. Nos. 164302-03
(2007)]
Peaceful Picketing is the right of workers during
strikes consisting of marching to and fro before an
establishment involved in a labor dispute generally
accompanied by the carrying and display of signs,
placards and banners intended to inform the public
about the dispute. [Guidelines Governing Labor Relations,
October 19, 1987] [NCMB Manual, Sec. 1]
Purpose
The purpose of the picket line is to persuade employers
peacefully by publicizing the labor dispute to inform the
public of what is happening and thus cause other
workers not to work in the establishment and for
customers not to do business there [Phimco Industries, Inc.
v. Phimco Industries Labor Association (PILA), et al., 628
SCRA 119 (2010)]
 U.P. LAW BOC LABOR RELATIONS
PROHIBITED ACTIVITIES IN PICKETING
a. By any person.
No person shall obstruct, impede, or interfere with,
by force, violence, coercion, threats or
intimidation, any peaceful picketing by employees
during any labor controversy or in the exercise of
the right to self-organization or collective
bargaining, or shall aid or abet such obstruction or
interference. [Art. 279(b)]
b. By police force.
The police force shall keep out of the picket lines
unless actual violence or other criminal acts occur
therein: Provided, That nothing herein shall be
interpreted to prevent any public officer from
taking any measure necessary to maintain peace
and order, protect life and property, and/or
enforce the law and legal orders. [Art. 279(d)]
c. By person engaged in picketing.
No person engaged in picketing shall commit any
act of violence, coercion or intimidation or
obstruct the free ingress to or egress from the
employer’s premises for lawful purposes, or
obstruct public thoroughfares. [Art. 279(e)]
Picketing as Part of Freedom of
Speech/Expression
General rule: picketing enjoys constitutional protection
as part of freedom of speech and/or expression.
Exceptions/limitations:
a. When picketing is coercive rather than persuasive
[Security Bank Employees Union v. Security Bank, G.R.
No. L-28536 (1968)]
b. When picketing is achieved through illegal means
[Mortera v. CIR, G.R. No. L-1340 (1947)]
c. Courts may confine the communication/
demonstration to the parties to the labor dispute
[PCIB v. Philnabank Employees Association, G.R. No.
L-29630 (1981)]
d. Innocent bystander rule. Courts may insulate
establishments or persons with no industrial
connection or having interest totally foreign to the
context of the dispute [PCIB v. Philnabank Employees
Association, G.R. No. L-29630 (1981)]
Picketing and Libel
Libel laws are not applied strictly considering that there
is emotional tension in the picket lines and expected
discourteous and impolite exchanges between the
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employees and the employer. [PCIB v. Philnabank
Employees Association, G.R. No. L-29630 (1981)]
Peaceful picketing is legal even in the absence of
employer-employee relationship
Picketing, peacefully carried out, is not illegal even in
the absence of employer-employee relationship, for
peaceful picketing is a part of the freedom of speech
guaranteed by the Constitution. [De Leon v. National
Labor Union, G.R. No. L-7586 (1957)]
3. Lockouts
Lockout is the temporary refusal of an employer to
furnish work as a result of an industrial or labor dispute.
[Art. 219 (p)]
Illegal strike and illegal lockout/In Pari Delicto
Doctrine
When the employer engaged in illegal lockout and the
employee engaged in illegal strike, both parties are in
pari delicto and such situation warrants the restoration
of the status quo ante and bringing the parties back to
the respective positions before the illegal strike and
illegal lockout. [Philippines Inter-Fashion Inc. v. NLRC,
G.R. No. L-59847 (1982)]
Similar to a strike, the proper grounds for a lockout
are
a. bargaining deadlock
b. ULP by labor organizations
Art. 278 (b). Strikes, Picketing and Lockouts. –
[N]o employer may declare a lockout on grounds
involving inter-union and intra-union disputes.
Procedural Requirements
a. Effort to bargain (in case of bargaining deadlock)
b. Filing and service of notice of lockout to the
NCMB
c. Observance of cooling-off period
1. 15 days for ULP
2. 30 days for bargaining deadlock
d. Notice of lockout vote meeting within 24 hours
before the intended vote [Sec. 10, Rule XXII, Book
V, IRR]
e. Lockout vote
f. Report of lockout vote
g. Observance of the waiting period (7-day strike ban)
 U.P. LAW BOC LABOR RELATIONS
a. Effort to Bargain
Art. 279 (a). Prohibited Activities. – No employer
shall declare a […] lockout without first having
bargained collectively in accordance with Title VII
of this Book.
b. Filing and Service of Notice of
Lockout
Art. 278 (c). Strikes, Picketing and Lockouts. –
[T]he duly certified or recognized bargaining agent
may file […] a notice of lockout with the
Department at least 30 days before the intended date
thereof. […]
Note: The notice must be served to the employees
through the SEBA or the legitimate labor organization
(if no SEBA).
Contents of notice
1. Names and addresses of the employer and the
union involved
2. Nature of the industry to which the employer
belongs
3. Number of union members and of workers in the
bargaining unit
4. Such other relevant data as may facilitate the
settlement of the dispute.
Additional Requirements [Sec. 8, Rule XXII, Book
V, IRR]
In cases of bargaining deadlocks
1. Statement of unresolved issues in the bargaining
negotiations
2. Written proposals of the union
3. Counter-proposals of the employer
4. Proof of a request for conference to settle the
differences.
In cases of ULP
1. Statement of acts complained of
2. Efforts taken to resolve the dispute amicably.
Action on notice
1. Upon receipt of a valid notice of strike or lockout,
the NCMB, through its Conciliator-Mediators,
shall call the parties to a conference the soonest
possible time in order to actively assist them to
explore all possibilities for amicable settlement.
2. The Conciliator-Mediator may suggest/offer
proposals as an alternative avenue for the
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resolution of their disagreement/conflict which
may not necessarily bind the parties.
If conciliation/mediation fails, the parties shall be
encouraged to submit their dispute for voluntary
arbitration. [Sec. 9, Rule XXII, Book V, IRR]
c. Observance of Cooling-off Periods
Lockout cooling-off periods:
1. based on bargaining deadlock – 30 days
2. based on ULP – 15 days [Art. 278 (c)]
d. Notice of Lockout Vote Meeting
Sec. 10, Rule XXII, Book V. Strick or Lockout
Vote – In every case, the union or the employer shall
furnish the regional branch of the Board the notice
of meetings referred to in the preceding paragraph
at least twenty-four (24) hours before such meetings
[...]
e. Lockout Vote
Art. 278 (f). Strikes, Picketing and Lockouts. – A
decision to declare a lockout must be approved by a
majority of the board of directors of the corporation
or association or of the partners in a partnership,
obtained by secret ballot in a meeting called for that
purpose. The decision shall be valid for the duration
of the dispute based on substantially the same
grounds considered when the strike or lockout vote
was taken.
f. Report of Lockout Vote
Art. 278 (f). Strikes, Picketing and Lockouts. –
In every case, the union or the employer shall furnish
the Ministry the results of the voting at least seven
days before the intended strike or lockout, subject to
the cooling-off period herein provided.
g. Observance of Waiting Period (7
Days)
See notes under Strike.
Effect of Illegal Lockout
Par. 3, Art. 279 (a). Prohibited Activities. – Any
worker whose employment has been terminated as a
consequence of any unlawful lockout shall be
entitled to reinstatement with full backwages…
U.P. LAW BOC LABOR RELATIONS
VI. POST-
EMPLOYMENT
A. Employer-Employee
Relationship
Art. 97. Definitions. As used in this Title:
(a) "Person" means an individual, partnership,
association, corporation, business trust, legal
representatives, or any organized group of
persons.
(b) "Employer" includes any person acting directly
or indirectly in the interest of an employer in
relation to an employee and shall include the
government and all its branches, subdivisions
and instrumentalities, all government-owned or
controlled corporations and institutions, as well
as nonprofit private institutions, or
organizations.
(c) "Employee" includes any individual employed
by an employer.
xxx
Art. 173. Definition of Terms. – As used in this
Title, unless the context indicates otherwise:
xxx
(f) "Employer" means any person, natural or
juridical, employing the services of the employee.
(g) "Employee" means any person compulsorily
covered by the GSIS under Commonwealth Act
Numbered One hundred eighty-six, as amended,
including the members of the Armed Forces of
the Philippines, and any person employed as
casual, emergency, temporary, substitute or
contractual, or any person compulsorily covered
by the SSS under Republic Act Numbered
Eleven hundred sixty-one, as amended.
(h) "Person" means any individual, partnership,
firm, association, trust, corporation or legal
representative thereof.
xxx
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Art. 219. Definitions.
xxx
f. "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.
g. "Employee" includes any person in the employ
of an employer. The term shall not be limited to
the employees of a particular employer, unless
the Code so explicitly states. It shall include any
individual whose work has ceased as a result of
or in connection with any current labor dispute
or because of any unfair labor practice if he has
not obtained any other substantially equivalent
and regular employment.
xxx
The existence or absence of ER-EE relationship is a
question of law and a question of fact, each in its
defined sense.
The existence of an employer-employee relationship is
ultimately a question of fact [SSS v. CA and Ayalde, G.R.
No. 100388, (2000)]. The conclusion that an ER-EE
relationship depends upon the facts of each case. In this
sense, it is a question of fact.
However, it being question of law means that it cannot
be made the subject of agreement [Tabas et.al. v.
California Manufacturing Co., et. al., G.R. No. 80680,
(1989)]. Hence, the characterization of the law prevails
over that in the contract. In this sense, the existence of
an ER-EE relationship is a matter of law.
1. Tests to Determine
Employer-Employee (ER-
EE) Relationship
a. Four-Fold Test
1. Selection and engagement of the employee;
2. Payment of wages;
3. Power of dismissal; and
4. Employer’s power to control the employee’s
conduct with respect to the means and methods by
which the work is to be accomplished [Brotherhood
Labor Unity Movement of the Philippines et. al. v. Zamora,
G.R. No. 48645, (1987)]
 U.P. LAW BOC LABOR RELATIONS
The most important element is the employer’s control
of the employee’s conduct, not only as to the result of
the work to be done, but also as to the means and
methods to accomplish it. [Lirio v. Genovia, G.R. No.
169757 (2011)].
The control test calls merely for the “existence” of the
right to control and not the “actual exercise” of the
right. [Zanotte Shoes v. NLRC, G.R. No. 100665, (1995)].
Not every form of control will have the effect of
establishing ER-EE relationship. 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.
In such case, NO ER-EE relationship exists.
2. Rules that control or fix the methodology and bind
or restrict the party hired to the use of such means.
These address both the result and the means used
to achieve it and hence, ER-EE relationship exists.
[Insular Life Assurance Co, LTD v. NLRC, G.R. No.
84484 (1989)].
Payment of wages
The Court held that the fact that a worker was not
reported as an employee to the SSS is not conclusive
proof of the absence of employer-employee
relationship. Nor does the fact that respondent’s name
does not appear in the payrolls and pay envelope
records submitted by petitioners negate the existence of
employer-employee relationship. For a payroll to be
utilized to disprove the employment of a person, it
must contain a true and complete list of the
employee. [Southeast East International Rattan v Coming,
G.R. No. 186621 (2014)]
b. Economic Dependence Test
Two-tiered approach.
1. First Tier: Control Test (refer to the Four-Fold
Test)
2. Second Tier: The underlying economic realities of
the activity or relationship. [Sevilla v. Court of
Appeals, G.R. Nos. L-41182-3 (1988)].
The economic realities prevailing within the activity or
between the parties are examined, taking into
consideration the totality of circumstances surrounding
the true nature of the relationship between the parties.
The benchmark of economic reality in analyzing
possible employment relationships for purposes of
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applying the Labor Code ought to be the economic
dependence of the worker on his employer.
The standard of “economic dependence” is whether the
worker is dependent on the alleged employer for his
continued employment in that line of business. [Orozco
v. CA, G.R. No. 155207 (2008)].
Evidence of employee status
No particular form of evidence is required to prove the
existence of an employer-employee relationship. Any
competent and relevant evidence to prove the
relationship may be admitted. For, if only
documentary evidence would be required to show that
relationship, no scheming employer would ever be
brought before the bar of justice, as no employer would
wish to come out with any trace of the illegality he has
authored considering that it should take much weightier
proof to invalidate a written instrument. [Tenazas, et al.,
v. R. Villegas Taxi Transport, G.R. No. 192998 (2014)].
Burden of Proving Employer-Employee
Relationship
The onus probandi rests on the employer to prove that
its dismissal was for a valid cause. However, before a
case for illegal dismissal can prosper, an employer-
employee relationship must first be established. It is
incumbent upon the employee to prove the employer-
employee relationship by substantial evidence. [Javier v.
Fly Ace Corporation, G.R. No. 192558 (2012)].
Piercing the corporate veil
In Sarona v. NLRC [G.R. No. 185280 (2012)], the
doctrine of piercing the corporate veil was applied. It
involved the illegal dismissal of Sarona, a security guard
who first worked at Sceptre but was subsequently
assigned to Royale, where he was illegally dismissed. In
the computation of his separation pay, Sarona prayed
that the corporate veil of Royale be pierced as it was a
mere continuation of Sceptre; hence, his separation pay
should be computed from the time he was hired by
Sceptre.
The SC explained that the corporate veil may be pierced
when the corporation is just an alter ego of a person or
of another corporation.
Because the circumstances indicated that Spectre and
Royale were one and the same (same office, same
officers, same person exercising control and
supervision over EEs of both companies), and that
Sarona’s transfer to Royale was done in bad faith, the
SC pierced the corporate veil and ruled in his favor.
 U.P. LAW BOC LABOR RELATIONS
When applicable
The doctrine of piercing the corporate veil applies only
in three (3) basic areas, namely:
a. Defeat of public convenience as when the
corporate fiction is used as a vehicle for the evasion
of an existing obligation;
b. Fraud cases or when the corporate entity is used to
justify a wrong, protect fraud, or defend a crime; or
c. Alter ego cases, where a corporation is merely a
farce since it is a mere alter ego or business conduit
of a person, or where the corporation is so
organized and controlled and its affairs are so
conducted as to make it merely an instrumentality,
agency, conduit or adjunct of another corporation.
[Maricalum Mining Corp. v. Florentino, G.R. No.
221813 (2018)]
This Court has time and again disregarded separate
juridical personalities under the doctrine of piercing the
corporate veil. It has done so in cases where a separate
legal entity is used to defeat public convenience, justify
wrong, protect fraud, or defend crime, among other
grounds. [Ang Lee v. Samahang Manggagawa ng Super
Lamination, G.R. No. 193816 (2016)]
In Pamplona Plantation Co v Tinghil [G.R. No. 159121
(2005)], the SC held that albeit Pamplona Plantation
Co., Inc., and the Pamplona Plantation Leisure
Corporation appear to be separate corporate entities,
this fiction of law cannot be invoked to further an end
subversive of justice. The principle requiring the
piercing of the corporate veil mandates courts to see
through The corporate mask may be removed and the
corporate veil pierced when a corporation is the mere
alter ego of another. Where badges of fraud exist, where
public convenience defeated, where a wrong is sought
to be justified thereby, or where a separate corporate
identity is used to evade financial obligations to
employees or to third parties, of separate legal entity
should be set aside and the factual truth upheld. When
that happens, the corporate character is not necessarily
abrogated. It continues for other legitimate objectives.
However, it may be pierced in any of the instances cited
in order to promote substantial justice.
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2. Kinds of Employment
a. Regular
Art. 295. Regular and Casual Employment. – The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be
regular where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has been
fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or service to be
performed is seasonal in nature and the employment
is for the duration of the season.
An employment shall be deemed to be casual if it is
not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one year
of service, whether such service is continuous or
broken, shall be considered a regular employee with
respect to the activity in which he is employed and
his employment shall continue while such activity
exists.
Art. 296. Probationary Employment. -- … An
employee who is allowed to work after a probationary
period shall be considered a regular employee.
Regular employment is not synonymous with
permanent employment, because there is no such thing
as a permanent employment. Any employee may be
terminated for just cause.
A regular employee is one who is engaged to perform
activities which are necessary and desirable in the usual
business or trade of the employer as against those which
are undertaken for a specific project or are seasonal.
Art. 295 provides two kinds of regular employees:
1. Those engaged to perform activities which are
necessary or desirable in the usual business or
trade of the employer; and
2. Casual employees who have rendered at least 1
year of service, whether continuous or broken,
with respect to the activity in which they are
employed. [Romares v. NLRC, G.R. No. 122327
(1998)]
 U.P. LAW BOC LABOR RELATIONS
Primary standard to determine regular
employment: reasonable connection rule
The primary standard to determine a regular
employment is the reasonable connection between the
particular activity performed by the employee in
relation to the business or trade of the employer. The
test is whether the former is usually necessary or
desirable in the usual business or trade of the employer.
If the employee has been performing the job for at least
one year, even if the performance is not continuous or
merely intermittent, the law deems the repeated and
continuing need for its performance as sufficient
evidence of the necessity, if not indispensability of that
activity to the business of the employer. Hence, the
employment is also considered regular, but only with
respect to such activity and while such activity exists.
[Forever Richons Trading Corp. v. Molina, G.R. No. 206061
(2013)]
When applicable
Art. 295 is not the yardstick for determining the
existence of an employment relationship because it
merely distinguishes between two kinds of employees,
i.e., regular employees and casual employees, for
purposes of determining the right of an employee to
certain benefits, to join or form a union, or to security
of tenure; it does not apply where the existence of an
employment relationship is in dispute. [Atok Big Wedge
Co., Inc. v. Gison, G.R. No. 169510 (2011)]
Hiring for an extended period
Where the employment of project employees is
extended long after the supposed project has been
finished, the employees are removed from the scope of
project employees and considered regular employees.
[Audion Electric Co., Inc. v. NLRC, G.R. No. 106648
(1999)]
While length of time may not be a controlling test for
project employment, it can be a strong factor in
determining whether the employee was hired for a
specific undertaking or in fact tasked to perform
functions which are vital, necessary and indispensable
to the usual business or trade of the employer. [Tomas
Lao Const. v. NLRC, G.R. No. 116781 (1997)]
Repeated renewal of contract
While the Court has recognized the validity of
contractual stipulations as to the duration of
employment, this cannot apply where the contract-to-
contract arrangement was but an artifice to prevent her
from acquiring security of tenure and to frustrate
constitutional decrees. [Beta Electric Corp. v. NLRC, G.R.
No. 86408 (1990)]
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Length of time involved
Length of time is not controlling, merely serves as a
badge of regular employment. [Maraguinot v. NLRC,
G.R. No. 120969 (1998)]
b. Casual
Art. 295. Regular and Casual Employment. –
xxx
An employment shall be deemed to be casual if it is
not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one year
of service, whether such service is continuous or
broken, shall be considered a regular employee with
respect to the activity in which he is employed and
his employment shall continue while such activity
exists.
Sec. 5(b), Rule I, Book VI, IRR. Casual
Employment. --- There is casual employment where
an employee is engaged to perform a job, work or
service which is merely incidental to the business of
the employer, and such job, work or service is for a
definite period made known to the employee at the
time of engagement: Provided, That any employee
who has rendered at least one year of service, whether
such service is continuous or not, shall be considered
a regular employee with respect to the activity in
which he is employed and his employment shall
continue while such activity exists.
A casual employee is engaged to perform a job, work
or service which is merely incidental to the business of
the employer, and such job, work or service is for a
definite period made known to the employee at the time
of engagement.
Someone who is not a regular, project or seasonal
employee.
Requirements to become regular employee:
1. One (1) year service, continuous or broken with
respect to activity employed
2. Employment shall continue while such activity
exists
 U.P. LAW BOC LABOR RELATIONS
Nature of work
What determines regularity or casualness is not the
employment contract, written or otherwise, but the
nature of the job. If the job is usually necessary or
desirable to the main business of the employer, then
employment is regular. [A. M. Oreta and Co., Inc. v.
NLRC, G.R. No. 74004 (1989)]
One-year service
As held in Philippine Bank of Communications v. NLRC, a
temporary or casual employee, under Art. 281 of the
Labor Code, becomes regular after service of one year,
unless he has been contracted for a specific project.
[Tabas v. California Marketing Co., Inc., G.R. No. L-80680
(1989)].
If the employee has been performing the job for at least
one year, even if the performance is not continuous or
merely intermittent, the law deems the repeated and
continuing need for its performance as sufficient
evidence of the necessity, if not indispensability of that
activity to the business. [Integrated Contractor and Plumbing
Works Inc. v. NLRC, 466 SCRA 265 (2005
c. Probationary
Art. 296. Probationary Employment. –
Probationary employment shall not exceed 6 months
from the date the employee started working, unless it
is covered by an apprenticeship agreement stipulating
a longer period. The services of an employee who has
been engaged on a probationary basis may be
terminated for a just cause or when he fails to qualify
as a regular employee in accordance with reasonable
standards made known by the employer to the
employee at the time of his engagement. An
employee who is allowed to work after a probationary
period shall be considered a regular employee
Sec. 6(d), Rule I, Book VI, IRR. Probationary
Employment. – In all cases of probationary
employment, the employer shall make known to the
employee the standards under which he will qualify
as regular employee at the time of his engagement.
Where no standards are made known to the
employee at the time of engagement, he shall be
deemed a regular employee.
Definition
A probationary employee is one who is made to go
on a trial period by an employer during which the
employer determines whether or not he is qualified for
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permanent employment, based on reasonable standards
made known to him at the time of engagement.
[Robinson’s Galleria et al. v. Ranchez, G.R. No. 177937
(2011)]
Duration [Art. 296]
General Rule: Probationary employment shall not exceed
six (6) months from the date the employee started
working.
Exceptions:
1. When it is covered by an apprenticeship agreement
stipulating a longer period [Art. 296]
2. When the parties to the employment contract agree
otherwise, such as when established by company
policy or required by the nature of the work
performed by the employee [San Miguel Corp, v. del
Rosario, G.R. Nos. 168194 & 168603, (2005), citing
Buiser v. Leogardo, G.R. No. L-63316, (1984)]; or
3. When it involves the 3 year probationary period of
teachers [Mercado v. AMA Computer College, G.R.
No. 183572, (2010)]
4. When it involves an act of liberality on the part of
his employer affording him a second chance to
make good after having initially failed to prove his
worth as an employee. [Mariwasa v. Leogardo,
G.R. No. 74246 (1989)]
Purposes :
1. Observance Period – for employer to determine
if employee is qualified and for employee to
demonstrate to the ER his skills
2. Restrictive - As long as the termination was made
before the expiration of the six-month
probationary period, the employer has a right to
sever the employer-employee relationship
Indeed, the employer has the right or is at liberty to
choose as to who will be hired and who will be declined.
It is within the exercise of this right to select his
employees that the employer may set or fix a
probationary period within which the latter may test
and observe the conduct of the former before hiring
him permanently. [Grand Motor Parts Corp. v. MOLE,
G.R. No. L-58958 (1984)]
Standards to qualify as a regular employee
Requirements:
1. The employer must communicate the
regularization standards to the probationary
employee; and
 U.P. LAW BOC LABOR RELATIONS
2. The employer must make such communication at
the time of the probationary employee’s
engagement.
If the employer fails to comply with either, the
employee is deemed as a regular and not a probationary
employee.
The employer has the burden of proof to show that
they have informed the probationary employee of the
standards to be applied to his/her work, that those
standards have been applied to him/her, and that
he/she fell short of such standard.
An employer is deemed to have made known the
standards that would qualify a probationary employee
to be a regular employee when it has exerted reasonable
efforts to apprise the employee of what he is expected
to do or accomplish during the trial period of
probation. This goes without saying that the employee
is sufficiently made aware of his probationary status as
well as the length of time of the probation.
The exception to the foregoing is when the job is self-
descriptive in nature, for instance, in the case of maids,
cooks, drivers, or messengers. [Abbott Laboratories Phil.
et al. v. Alcaraz, G.R. No. 192571 (2013)]
In all cases of probationary employment, the employer
shall make known to the employee the standards under
which he will qualify as a regular employee at the time
of his engagement. Where no standards are made
known to the employee at that time, he shall be deemed
a regular employee. Conversely, an employer is deemed
to substantially comply with the rule on notification of
standards if he apprises the employee that he will be
subjected to a performance evaluation on a particular
date after his hiring. [Alcira v. NLRC, G.R. No. 149859,
(2004)]
Regular status after probation
When the bank renewed the contract after the lapse of
the six-month probationary period, the employees
thereby became regular employees. No employer is
allowed to determine indefinitely the fitness of its
employees. [Bernardo v. NLRC, supra.]
Double probation
There is no basis for subjecting an employee to a new
probationary or temporary employment where he had
already become a regular employee when he was
absorbed by a sister company. [A Prime Security Services,
Inc. v. NLRC, G.R. No. 107023, (2000)]
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Absorbed employees not probationary
The private respondents could not be considered
probationary employees because they were already well-
trained in their respective functions. As stressed by the
Solicitor General, while private respondents were still
with the CCAS they were already clerks. Respondent
Gelig had been a clerk for CCAS for more than ten (10)
years, while respondent Quijano had slightly less than
ten (10) years of service. They were, therefore, not
novices in their jobs but experienced workers. [Cebu
Stevedoring Co., Inc. v. Regional Director, G.R. No. L-54285
(1988)]
Private school teachers
Questions respecting a private school teacher’s
entitlement to security of tenure are governed by the
Manual of Regulations for Private Schools and not the
Labor Code. [Aklan College v. Guarino, G.R. No. 152949
(2007)]
The legal requisites, therefore, for acquisition by a
teacher of permanent employment, of security of tenure
are:
1. A full-time teacher;
2. Must have rendered three consecutive years of
service; and
3. Service must have been satisfactory. [La Salette of
Santiago v. NLRC, G.R. No. 82918 (1991)]
Mere completion of the three-year probation, even with
an above-average performance, does not guarantee that
the employee will automatically acquire a permanent
employment status. The probationer can only qualify
upon fulfillment of the reasonable standards set for
permanent employment as a member of the teaching
personnel. [Herrera-Manaois v. St. Scholastica’s College,
G.R. No. 18891 (2013)]
These standards should be made known to the teachers
on probationary status at the start of their probationary
period, or at the very least under the circumstances of
the present case, at the start of the semester or the
trimester during which the probationary standards are
to be applied. Of critical importance in invoking a
failure to meet the probationary standards, is that the
school should show – as a matter of due process – how
these standards have been applied. [Colegio del Santisimo
Rosario v. Rojo, G.R. No. 170388 (2013)]
Termination
A probationary employee enjoys only a temporary
employment status. This means that he is terminable at
any time, permanent employment not having been
attained in the meantime. The employer could well
 U.P. LAW BOC LABOR RELATIONS
decide he no longer needed the probationary
employee’s services or his performance fell short of
expectations, etc. As long as the termination was made
before the termination of the six-month probationary
period, the employer was well within his rights to sever
the employer-employee relationship. A contrary
interpretation would defect the clear meaning of the
term “probationary.” [De la Cruz, Jr. v. NLRC, G.R. No.
145417 (2003)]
A probationary employee can only be terminated for:
1. Just causes;
2. Authorized causes; or
3. Failure to qualify as a regular employee in
accordance with reasonable standards made known
by the employer to the employee at the time of
engagement. [Robinson’s Galleria et al. v Ranchez, G.R.
No. 177937, Jan. 19, (2011)]
The probationary employee is entitled to substantial
and procedural due process before termination.
Limits to termination
1. It must be exercised in accordance with the specific
requirements of the contract
2. If a particular time is prescribed, the termination
must be within such time and if formal notice is
required, then that form must be used;
3. The employer’s dissatisfaction must be real and in
good faith, not feigned so as to circumvent the
contract or the law;
4. There must be no unlawful discrimination in the
dismissal. [Manila Hotel Corporation v. NLRC, G.R.
No. 53453 (1986)]
In order to invoke “failure to meet the probationary
standards” as a justification for dismissal, the employer
must show how these standards have been applied to
the subject employee. [Univac Development, Inc. v. Soriano,
G.R. No. 182072 (2013)].
Repeated renewal of contract
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. Marulas Industrial Corp.,
G.R. No. 204406 (2014)]
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d. Project
Art. 295. Regular and Casual Employment. – The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be
regular where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has been fixed
for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or service
to be performed is seasonal in nature and the
employment is for the duration of the season.
xxx
A project employee is one who is hired for carrying
out a separate job, distinct from the other undertakings
of the company, the scope and duration of which has
been determined and made known to the employees at
the time of employment. [Hanjin Heavy Industries &
Const. Co. v. Ibañez, G.R. No. 170181 (2008)]
Rationale for project employment
If a project has already been completed, it would be
unjust to require the employer to maintain them in the
payroll while they are doing absolutely nothing except
waiting until another project is begun, if at all. In effect,
these stand-by workers would be enjoying the status of
privileged retainers, collecting payment for work not
done, to be disbursed by the employer from profits not
earned. [De Ocampo, Jr. v. NLRC, G.R. No. 81077
(1990)]
Two Kinds of Project Employee
1. For a particular job or undertaking that is WITHIN
the regular or usual business of the employer
company, but which is distinct and separate, and
identifiable as such, from the other undertakings of
the company (i.e. construction)
2. For a particular job or undertaking that is NOT
within the regular business of the corporation.
Such a job or undertaking must also be identifiably
separate and distinct from the ordinary or regular
business operations of the employer [Villa v.
NLRC, G.R. No. 117043 (1988)]
Indicators of project employment
1. The duration of the specific/identified undertaking
for which the worker is engaged is reasonably
determinable;
 U.P. LAW BOC LABOR RELATIONS
2. Such duration, as well as the specific work/service
to be performed, is defined in an employment;
3. Agreement and is made clear to the employee at the
time of the hiring;
4. The work/service to be performed by the
employee is in connection with the particular
project/undertaking for which he is engaged;
5. The employee, while not employed and awaiting
engagement, is free to offer his services to any
other employer;
6. The termination of his employment in the
particular project/undertaking is reported to the
DOLE Regional Office having jurisdiction over
the workplace following the date of his separation
from work, using the prescribed form on
employees’ terminations /dismissals/suspensions;
7. An undertaking in the employment contract by the
employer to pay completion bonus to the project
employee as practiced by most construction
companies. [DO No. 19, Sec. 2.2; Samson v. NLRC,
G.R. No. 11366 (1996)].
Test of project employment
The litmus test in determining the existence of project
employment is whether or not the employment has
been fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee. [D.M. Consunji v. NLRC, G.R. No. 116572
(2000)]
Evidently, although the employment contract did not
state a particular date, it did specify that the termination
of the parties’ employment relationship was to be on a
“day certain” -- the day when the phase of work termed
“Lifting & Hauling of Materials” for the “World
Finance Plaza” project would be completed. Thus,
respondent cannot be considered to have been a regular
employee. He was a project employee. [Filipinas Pre-
Fabricated Building Systems, Inc. v. Puente, G.R. No.
153832 (2005)]
Repeated hiring, length of service not determinant
of regularity of employee
The repeated and successive rehiring of project
employees do not qualify them as regular employees, as
length of service is not the controlling determinant of
the employment tenure of a project employee, but
whether the employment has been fixed for a specific project or
undertaking, its completion has been determined at the time of the
engagement of the employee. [Leyte Geothermal Power Progressive
Employees Union v. Philippine National Oil Company, G.R.
No. 170351 (2011)]
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The simple fact that the employment as project
employees has gone beyond one (1) year does not
detract from, or legally dissolve, their status as project
employees. The second paragraph of Art. 280 of the LC
providing that an employee who has served at least one
(1) year shall be considered a regular employee, relates
to casual employees, not to project employees. [Raycor
Aircontrol Systems v. NLRC, G.R. No. 114290 (1996)]
Generally, length of service provides a fair yardstick for
determining when an employee initially hired on a
temporary basis becomes a permanent one, entitled to
the security and benefits of regularization. But this
standard will not be fair, if applied to the construction
industry, simply because construction firms cannot
guarantee work and funding for its payrolls beyond the
life of each project. And getting projects is not a matter
of course. [William Uy Construction Corp. v. Trinidad, G.R.
No. 183250 (2010)]
See also Policy Instructions No. 20 of 1997 and D.O.
No. 19 of 1993
Work pool employee
Members of a work pool from which a construction
company draws its project employees, if considered
employees of the construction company while in the
work pool, are non-project employees or employees for
an indefinite period. If they are employed in a particular
project, the completion of the project or any phase
thereof will not mean severance of the employer-
employee relationship. [Policy Instruction No. 20; J. &
DO Aguilar Corp. v. NLRC, G.R. No. 116352 (1997)]
Project employees may or may not be members of a
work pool (that is, the employer may or may not have
formed a work pool at all), and in turn, members of a
work pool could be either project employees or regular
employees. [Raycor Aircontrol Systems, Inc. vs. National
Labor Relations Commission, G.R. 114290, (1996)]
A work pool may exist although the workers in the pool
do not receive salaries and are free to seek other
employment during temporary breaks in the business,
provided, that the worker shall be available when called
to report for a project. Although primarily applicable to
regular seasonal workers, this set-up can likewise be
applied to project workers insofar as the effect of
temporary cessation of work is concerned. [Maraguinot
v. NLRC, G.R. No. 120969. (1998)]
 U.P. LAW BOC LABOR RELATIONS
When a project employee or a member of a work
pool acquires the status of regular employment
The ff. requisites must concur:
1. There is a continuous rehiring of project employees
even after cessation of a project;
2. The tasks performed by the alleged “project
employees” are vital, necessary and indispensable
to the usual business or trade of the employer.
[Imbuido v. NLRC, G.R. No. 114734 (200);
Maraguinot v. NLRC, G.R. No. 120969. (1998)]
Note: The length of time which the employees are
continually re-hired is not in itself controlling but
merely serves as a badge of regular employment. [See
previous discussion; Leyte Geothermal Power Progressive
Employees Union v. Philippine National Oil Company, G.R.
No. 170351 (2011)]
Termination; Rule on reportorial requirement
A report of termination to the nearest public
employment office every time their employment was
terminated due to completion of each construction
project. Failure of the employer to file termination
reports after every project completion proves that the
employees are not project employees. [Pasos v. Philippine
National Construction Corp., G.R. No. 192394 (2013)]
e. Seasonal
Art. 295, 1st par.
...where the work or service to be performed is
seasonal in nature and the employment is for the
duration of the season...
Seasonal employees are those whose work or services
to be performed are seasonal in nature, employment is
for the duration of the season. There is no continuing
need for the worker.
“Regular Seasonal” Employees After One Season
Seasonal workers who are constantly rehired and are
only temporarily laid off during off-season are not
separated from service in said period, but are merely
considered on leave until work resumes. They are
considered regular and permanent employees.
The nature of their relationship . . . is such that during
off season they are temporarily laid off but during
summer season they are re-employed, or when their
services may be needed. They are not strictly speaking
separated from the service but are merely considered as
on leave of absence without pay until they are re-
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employed. [Philippine Tobacco Flue-Curing &Redrying Corp.
v. NLRC, G.R. No. 127395, (1998)]
Illustrative cases
For respondents to be considered seasonal employees,
it is not enough that they perform work or services that
are seasonal in nature. They must have been employed
only for the duration of one season. The evidence proves
theexistence of the first, but not of the second,
condition. The fact that respondentsrepeatedly worked
as sugarcane workers for petitioners for several years is
not denied bythe latter. Evidently, petitioners employed
respondents for more than one season. Therefore, the
general rule of regular employment is applicable.
[Hacienda Fatima v. National Federatiom of Sugarcane
Workers, G.R. No. 149440 (2003)]
Citing Hacienda Fatima, the Court in Hacienda Vino v.
Cuenca [G.R. No. 150478 (2005)] ruled that while the
records sufficiently show that the respondents’ work in
the hacienda was seasonal in nature, there was,
however, no proof that they were hired for the duration
of one season only. In fact, the payrolls, submitted in
evidence by the petitioners, show that they availed the
services of the respondents since 1991. Absent any
proof to the contrary, the general rule of regular
employment should, therefore, stand.
It appears that the questioned employees were never
separated from the service (continuous re-hiring). Their
status is that of regular seasonal employees who are
called to work from time to time, mostly during
summer season. The nature of their relationship with
the hotel is such that during off season they are
temporarily laid off but during summer season they are
re-employed, or when their services may be needed.
They are not strictly speaking separated from the
services but are merely considered as on leave of
absence without pay until they are re-employed. Their
employment relationship is never severed but only
suspended. As such, these employees can be considered
as in the regular employment of the hotel. [Manila Hotel
v. CIR, G.R. No. L-19973 (1963)]
Exception
Although respondent constantly availed herself of the
petitioners’ services from year to year, it was clear from
the facts therein that they were not in her regular
employ. Petitioners therein performed different
phases of agricultural work in a given year.
However, during that period, they were free to
work for other farm owners, and in fact they did. In
other words, they worked for respondent, but were
nevertheless free to contract their services with other
 U.P. LAW BOC LABOR RELATIONS
farm owners. The Court was thus emphatic when it
ruled that petitioners were mere project employees,
who could be hired by other farm owner. [Mercado, Sr.
v. NLRC, G.R. No. 79869 (1991)]
f. Fixed-Term
Art. 295 has no application to instances where
1. a fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without
any force, duress or improper pressure being
brought to bear upon the employee and absent any
other circumstances vitiating his consent, or
2. where it satisfactorily appears that the employer
and employee dealt with each other on more or less
equal terms with no moral dominance whatever
being exercised by the former over the latter. [Brent
School v. Zamora, G.R. No. L-48494 (1990)]
Note: The employee in this case was a college graduate.
The Brent doctrine is applicable only in a few special
cases wherein the employer and employee are on more
or less equal footing in entering into the contract. The
reason for this is evident: when a prospective employee,
on account of special skills or market forces, is in a
position to make demands upon the prospective
employer, such prospective employee needs less
protection than the ordinary worker. [GMA Network,
Inc. v. Pabriga, G.R. No. 176419 (2013)] The level of
protection to labor must be determined on the basis of
the nature of the work, qualifications of the employee,
and other relevant circumstances. For example, a
prospective employee with a bachelor’s degree cannot
be said to be on equal footing with a grocery bagger
with a high school diploma. [Fuji Television Network Inc v.
Espiritu, G.R. No. 204944-45 (2014)].
Determining factor
The test in this kind of contract is not the necessity and
desirability of the employee’s activities, “but the day
certain agreed upon by the parties for the
commencement and termination of the employment
relationship.” [Brent School v. Zamora, G.R. No. L-48494
(1990); GMA Network, Inc. v. Pabriga, G.R. No. 176419
(2013); Fuji Television Network Inc v. Espiritu, G.R. No.
204944-45 (2014)].
Regular fixed-term employee
Where an employee’s contract had been continuously
extended or renewed to the same position, with the
same duties and remained in the employ without any
interruption, then such employee is a regular employee.
The employee’s contract indicating a fixed term did not
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automatically mean that he/she could never be a regular
employee.
An employee can be a regular employee with a fixed-
term contract. The law does not preclude the possibility
that a regular employee may opt to have a fixed-term
contract for valid reasons. This was recognized in
Brent: For as long as it was the employee who
requested, or bargained, that the contract have a
“definite date of termination,” or that the fixed-term
contract be freely entered into by the employer and the
employee, then the validity of the fixed-term contract
will be upheld. [Fuji Television Network Inc v. Espiritu,
G.R. No. 204944-45 (2014)].
Project employment and Fixed-term employment
distinguished
A project employee is assigned to carry out a specific
project or undertaking, the duration and scope of which
were specified at the time the employee is engaged for
the project
The duration of a fixed-term employment agreed upon
by the parties may be any day certain, which is
understood to be "that which must necessarily come
although it may not be known when." The decisive
determinant in fixed-term employment is not the
activity that the employee is called upon to perform but
the day certain agreed upon by the parties for the
commencement and termination of the employment
relationship. [GMA Network, Inc. v. Pabriga, G.R. No.
176419 (2013)]
Independent contractors distinguished from fixed-
term employees
No employer-employee relationship exists between
independent contractors and their principals; their
contracts are governed by the Civil Code provisions on
contracts and other applicable laws. Employees under
fixed-term contracts cannot be independent
contractors (those engaged in legitimate job contracting
or those who have unique skills and talents) because in
fixed-term contracts, an employer-employee
relationship exists. Fuji's argument that Arlene was an
independent contractor under a fixed-term contract is
contradictory. Employees under fixed-term contracts
cannot be independent contractors because in fixed-
term contracts, an employer-employee relationship
exists. [Fuji Television Network Inc v. Espiritu, G.R. No.
204944-45 (2014)]
 U.P. LAW BOC LABOR RELATIONS
No implied renewal of employment contract
It is a settled rule that seafarers are considered
contractual employees. Their employment is governed
by the contracts they sign everytime they are rehired
and their employment is terminated when the contract
expires. Their employment is contractually fixed for a
certain period of time. Thus, when a contract ends, the
employment is deemed automatically terminated, there
being no mutually-agreed renewal or extension of the
expired contract. [Unica v. Anscor Swire Ship Management
Corp., G.R. No. 184318 (2014)]
Termination of contract
The existence of a fixed-term contract should not
mean that there can be no illegal dismissal. Due
process must still be observed in the pretermination of
fixed-term contracts of employment. [Fuji Television
Network Inc v. Espiritu, G.R. No. 204944-45 (2014)]
g. Security guards
Previously, security guards were not allowed to join
labor organizations of the rank-and-file. However,
EO111, s. 1986, in amending the Labor Code,
eliminated the disqualification on security guards from
joining labor organizations.
Subsequently, RA 6715 was passed amending Art. 245
of the Labor Code, to wit: "Managerial employees are
not eligible to join, assist or form any labor
organization. Supervisory employees shall not be
eligible for membership in a labor organization of the
rank-and-file employees but may join, assist, or form
separate labor organizations of their own."
As will be noted, the second sentence of Art. 245
embodies an amendment disqualifying supervisory
employees from membership in a labor organization of
the rank-and-file employees. It does not include security
guards in the disqualification.
While therefore under the old rules, security guards
were barred from joining a labor organization of the
rank and file, under RA 6715, they may now freely join
a labor organization of the rank and file or that of the
supervisory union, depending on their rank. By
accommodating supervisory employees, the Secretary
of Labor must likewise apply the provisions of RA 6715
to security guards by favorably allowing them free
access to a labor organization, whether rank and file or
supervisory, in recognition of their constitutional right
to self-organization. [Manila Electric Co. v. Secretary of
Labor, G.R. No. 91902 (1991)]
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LABOR LAW
h. Floating status
Art. 301 When Employment not Deemed
Terminated --
The bonafide suspension of the operation of a
business or undertaking for a period not exceeding
six (6) months, or the fulfillment by the employee of
a military or civic duty shall not terminate
employment.
In all such cases, the employer shall reinstate the
employee to his former position without loss of
seniority rights if he indicates his desire to resume his
work not later than one (1) month from the
resumption of operations of his employer or from his
relief from the military or civic duty.
Under Article 286 (now Art. 301) of the Labor Code,
the bona fide suspension of the operation of a business
or undertaking for a period not exceeding six
months, or the fulfillment by the employee of a military
or civic duty does not terminate employment.
During this time, employees are considered on "floating
status".[Art. 301; International Hardware, Inc. vs. NLRC,
G.R. No. 80770 (1989)
A floating status requires the dire exigency of the
employer’s bona fide suspension of operation, business
or undertaking. It takes place when (a) the security
agency’s clients decide not to renew their contracts with
the agency and (b) also in instances where contracts for
security services stipulate that the client may request the
agency for the replacement of the guards assigned to it.
In the latter case, the employer should prove that there
are no posts available to which the employee
temporarily out of work can be assigned. [Peak Ventures
Corp v. Nestor Villareal, G.R. No. 184618 (2014)]
Temporary “off-detail” or “floating status” is the
period of time when security guards are in between
assignments or when they are made to wait after being
relieved from a previous post until they are transferred
to a new one. For as long as such temporary inactivity
does not continue for a period exceeding six months, it
has been ruled that placing an employee on temporary
"off-detail" or “floating status” is not equivalent to
dismissal. [Leopard Security & Investigation Agency v. Quitoy,
G.R. No. 186344 (2013)]
 U.P. LAW BOC LABOR RELATIONS
When deemed constructive dismissal
The "floating status" of such employee should last only
for a reasonable time. Here, the arbiter correctly held
that when the "floating status" of the employees lasts
for more than six (6) months, they may be considered
to have been constructively dismissed from the service.
Thus, they were entitled to the corresponding benefits
for their separation. [Agro Commercial Security Services,
Agency, Inc. v. NLRC, G.Rs. No. 82823-24 (1989)]
When that "floating status" of an employee lasts for
more than six months, he may be considered to have
been illegally dismissed from the service. Thus, he is
entitled to the corresponding benefits for his
separation, and this will apply to the two types of work
suspension, that is, either of the entire business or of a
specific component thereof. [Valdez v. NLRC, G.R.
No. 125028 (1998)]
3. Legitimate subcontracting v.
Labor-Only Contracting
Art. 106. Contractor or Subcontractor. – Whenever
an employer enters into a contract with another
person for the performance of the former’s work, the
employees of the contractor and of the latter’s
subcontractor, if any, shall be paid in accordance with
the provisions of this Code.
In the event that the contractor or subcontractor fails
to pay the wages of his employees in accordance with
this Code, the employer shall be jointly and severally
liable with his contractor or subcontractor to such
employees to the extent of the work performed under
the contract, in the same manner and extent that he
is liable to employees directly employed by him.
The Secretary of Labor and Employment may, by
appropriate regulations, restrict or prohibit the
contracting-out of labor to protect the rights of
workers established under this Code. In so
prohibiting or restricting, he may make appropriate
distinctions between labor-only contracting and job
contracting as well as differentiations within these
types of contracting and determine who among the
parties involved shall be considered the employer for
purposes of this Code, to prevent any violation or
circumvention of any provision of this Code.
There is "labor-only" contracting where the person
supplying workers to an employer does not have
substantial capital or investment in the form of tools,
Page 160 of 220
LABOR LAW
equipment, machineries, work premises, among
others, and the workers recruited and placed by such
person are performing activities which are directly
related to the principal business of such employer. In
such cases, the person or intermediary shall be
considered merely as an agent of the employer who
shall be responsible to the workers in the same
manner and extent as if the latter were directly
employed by him.
Art. 107. Indirect Employer. – The provisions of
the immediately preceding Art. shall likewise apply to
any person, partnership, association or corporation
which, not being an employer, contracts with an
independent contractor for the performance of any
work, task, job or project.
Art. 108. 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
to pay the same.
Art. 109. Solidary Liability. The provisions of
existing laws to the contrary notwithstanding, every
employer or indirect employer shall be held
responsible with his contractor or subcontractor for
any violation of any provision of this Code. For
purposes of determining the extent of their civil
liability under this Chapter, they shall be considered
as direct employers.
Sec. 2. D.O. No. 174-17: Rules Implementing
Articles 106 to 109 of the Labor Code, as
amended.
Coverage:
This shall apply to all parties in an arrangement where
ER-EE relationships exist.
Contractors and subcontractors referred to in these
rules are prohibited from engaging in recruitment and
placement activities as defined in Art. 13(b) of the
whether for local or overseas employment.
 U.P. LAW BOC LABOR RELATIONS
Contracting or subcontracting refers to an
arrangement whereby a principal agrees to farm out to
a contractor the performance or completion of a
specific job or work within a definite or predetermined
period, regardless of whether such job or work is to be
performed or completed within or outside the premises
of the principal. [Sec. 3(c), D.O. No. 174-17]
Service agreement refers to the contract between the
principal and contractor containing the terms and
conditions governing the performance or completion
of a specific job or work being farmed out for a definite
or predetermined period. [Sec. 3(j), D.O. No. 174-17]
a. Elements
Contracting or subcontracting shall only be allowed if
all the following circumstances occur:
1. The contractor or subcontractor is engaged in a
distinct and independent business and under-takes
to perform the job or work on its own
responsibility, according to its own manner and
method;
2. The contractor or subcontractor has substantial
capital to carry out the job farmed out by the
principal on his account, manner and method,
investment in the form of tools, equipment,
machinery and supervision;
3. In performing the work farmed out, the con-
tractor or subcontractor is free from the control
and/or direction of the principal in all matters
connected with the performance of the work
except as to the result thereto; and
4. The Service Agreement ensures compliance with
all the rights and benefits for all the employees of
the contractor or subcontractor un-der the labor
laws. [Sec. 8, D.O. No. 174-17]
b. Trilateral Relationship
Principal
Contractor's
Contractor
Employee
Page 161 of 220
LABOR LAW
There are three parties involved:
1. Principal refers to any natural or juridical entity,
whether an employer or not, who puts out or farms
out a job or work to a contractor.
2. Contractor refers to any person or entity engaged
in a legitimate contracting or subcontracting
arrangement providing services for a specific job or
undertaking farmed out by a principal under a
Service Agreement.
3. Contractor’s employee refers to the employee of
the contractor hired to perform or complete a job
or work farmed out by the principal pursuant to a
Service Agreement with the latter. [Sec. 3, D.O.
No. 174-17]
Relationships that exist in a legitimate contracting
or subcontracting:
1. An employer-employee relationship between the
contractor and the employees it engaged to perform the
specific job, work or service being contracted; and
2. hA contractual relationship between the
principal and the contractor as governed by the
provisions of the Civil Code. [Sec. 5, par. 1, D.O.
No. 18-A-11]
The law recognizes and resolves this situation in favor
of employees in order to protect their rights and
interests from the coercive acts of the employer. In fact,
the employee who is constructively dismissed may be
allowed to keep on coming to work. [McMer Corp., Inc.
v. NLRC, G.R. No. 193421 (2014)]
Required Contracts
1. Employment contract between the
contractor/subcontractor and its employees.
Notwithstanding any oral or written stipulations to
the contrary, the contract between the
contractor/subcontractor and its employees shall
be governed by the provisions of Articles 294 and
295 of the Labor Code, including the provisions on
general labor standards. It shall include the
following stipulations
a. The specific description of the job or work to
be performed by the employee; and
b. The place of work and terms and conditions
of employment, including a statement of the
wage rate applicable to the individual
employee.
2. Service Agreement between the principal and the
contractor. The Service Agreement shall include
the following:
a. The specific description of the job or work
being subcontracted, including its term or
duration;
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

b. The place or work and terms and conditions entitlement to completion

governing the contracting arrangement, to bonuses or other emoluments,
include the agreed amount of the contracted including retirement benefits
job or work as well as the standard whenever applicable.
administrative fee of not less than 10% of the
total contract cost; and The mere expiration of the
c. A provision on the issuance of the bond/s as Service Agreement shall not be
defined in 3a renewable every year. [Sec. 11, deemed as a termination of
D.O. No. 174-17] employment of the contractor’s
employees who are deemed
Rights of Contractor’s Employees regular employees of the
All contractor’s employees shall be entitled to security contractor.
of tenure all the rights and privileges as provided for in
the _, as amended, to include the following: Prohibition against Non-Permissible Forms of
1. Safe and healthful working conditions; Contracting
2. Labor standards such as but not limited to service Non-permissible forms of contracting and
incentive leave, rest days, overtime pay, holiday subcontracting arrangements undermine the
pay, 13th month pay, and separation pay Constitutional and statutory right to security of tenure
3. Retirement benefits under the SSS or retirement of workers. [Sec. 1, D.O. No. 174-17]
plans of the contractor/subcontractor;
4. Social security and welfare benefits; and Two Kinds of Labor-Only Contracting:
5. Self-organization, collective bargaining and 1. –
peaceful concerted activities including the right to a. (i) The contractor or subcontractor does not
strike. [Sec. 10, D.O. No. 174-17] have substantial capital or (ii) the con-tractor
or subcontractor does not have in-vestments
Effect of Termination of Employment [Sec. 13, in the form of tools, equipment, machineries,
D.O. No. 174-17] supervision, work premises, among others;
Cause Effect and
Prior to the Governed by Art. 297 – 299 b. he contractor’s or subcontractor’s employ-ees
expiration of the recruited and placed are performing ac-tivities
Service which are directly related to the main business
Agreement operation of the principal.
Pre-termination The right of the contractor’s 2. The contractor or subcontractor does not exercise
of the Service employee to unpaid wages and the right to control the performance of the work of
Agreement and other unpaid benefits including the employee. [Sec 5. D.O. No. 174-17]
not due to unremitted legal mandatory
authorized contributions, (e.g., SSS, Substantial capital – refers to paid-up capital
causes PhilHealth, Pag-ibig, ECC), stocks/shares of at least P5,000,000 in the case of
shall be borne by the party at corporations, partnerships and cooperatives; in case of
fault, without prejudice to the single proprietorship, a net worth of at least P5,000,000.
solidary liability of the parties to [Sec. 3(l), D.O. No. 174-17]
the Service Agreement.
Due to Employee may opt to wait for Having substantial capitalization is not enough to
expiration of re-employment within 3 declare one an independent contractor. If any of the
Service months to resign and transfer other two elements of labor-only contracting is present,
Agreement, or to another contractor-employer. they are labor-only contractors. [Quintanar v. Coca-Cola
from the Bottlers, 794 SCRA 654 (2016)]
completion of Failure of the contractor to
the phase of the provide new employment shall A contractor is presumed to be a labor-only contractor
job, work or entitle the employee to payment and has the burden of proving the contrary. [Polyfoam-
service for which of separation benefits as may be RGC Int’l Corp. v. Concepcion, 672 SCRA 148 (2012)]
the employee is provided by law or the Service
engaged Agreement, whichever is higher,
without prejudice to his/her

Page 162 of 220

 U.P. LAW BOC LABOR RELATIONS
Other prohibitions
1. When the principal farms out work to a “Cabo”
2. Contracting out of job or work through an in-
house agency
3. Contracting out of job or work through an in-
house cooperative which merely supplies
workers to the principal.
4. Contracting out of a job or work by reason of a
strike or lockout whether actual or imminent
5. Contracting out of a job or work being performed
by union members and such will interfere with,
restrain or coerce employees in the exercise of their
rights to self-organization as provided in Art. 259
6. Requiring the contractor’s employees to perform
functions which are currently being performed
by the regular employees of the principal
7. Requiring the contractor’s employees to sign, as a
precondition to employment or continued
employment, an antedated resignation letter; a
blank payroll; a waiver of labor standards including
minimum wages and social or welfare benefits; or
a quitclaim releasing the principal or contractor
from liability as to payment of future claims; or
require the employee to become member of a
cooperative
8. Repeated hiring by the contractor of employees
under an employment contract of short
duration.
9. Requiring employees under a contracting
arrangement to sign a contract fixing the period
of employment to a term shorter than the term
of the Service Agreement, unless the contract is
divisible into phases for which substantially
different skills are required and this is made known
to the employee at the time of engagement.
10. Such other practices, schemes or employment
arrangements designed to circumvent the right of
workers to security of tenure. [Sec. 6, D.O. No.
174-17]
Mandatory registration
It shall be mandatory for all persons or entities,
including cooperative, acting as contractors, to register
with the Regional Office of the DOLE where it
principally operates.
Failure to register shall give rise to the presumption that
the contractor is engaged in labor-only contracting.
Accordingly, the registration system governing
contracting arrangements and implemented by the
Regional Offices of the DOLE is hereby established,
with the Bureau of Working Conditions (BWC) as the
central registry. [Sec. 14, D.O. No. 174-17]
Page 163 of 220
LABOR LAW
Solidary Liability
Indirect/Direct Employer
D.O. No. 174-17
Sec. 12. A finding of violation of either sections 10
or 11 shall render the principal the direct employer of
the employees of the contractor, pursuant to Art. 109
of the Labor Code.
See also Secs. 10 and 11, D.O. No. 174-17, supra.
Contractor solidarily liable with principal
In the event of any violation of any provision of the
Labor Code, including 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. [Sec. 9, D.O. No. 174-17]
Applicability
D.O. No. 174-17 applies only to trilateral relationships
which characterizes contracting or subcontracting
arrangements. It does not contemplate to cover
information technology-enabled services involving an
entire or specific business process such as:
1. Business process outsourcing
2. Knowledge process outsourcing
3. Legal process outsourcing
4. IT infrastructure outsourcing
5. Application development
6. Hardware and/or software support
7. Medical transcription
8. Animation services
9. Back office operations/support
The Construction industry under the licensing coverage
of the Philippine Contractors Accreditation Board shall
be goverened by D.O. No. 19-93; D.O. No. 13-98; and
DOLEDPWH-DILG-DTI and PCAB Memo of
Agreement-Joint Admin Order 1-2011
Contracting or subcontracting arrangements in the
private security industry is governed by D.O. No. 150-
16
D.O. No. 174-17 does not apply to contracts of sale,
purchase, lease, carriage, growing/growership agreement, toll
manufacruting, contract of management, operation and
maintenance and other such contracts governed by the
Civil Code and other special laws [DOLE Dept.
Circular No. 01-17]
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

Effect of Labor-Only Contracting: Employees

Become Regular Employees B. Termination by Employer
Where an entity is declared to be a labor-only
contractor, the employees supplied by said contractor TERMINATION OF EMPLOYMENT
to the principal employer become regular employees of
the latter. Having gained regular status, the employees Coverage
are entitled to security of tenure and can only be
dismissed for just or authorized causes and after they General rule: All establishments or undertakings, whether
had been afforded due process. [Norkis Trading v. for profit or not. [Art. 293]
Buenavista, G.R. No. 182018 (2012)]
Exception: Government, and its political subdivisions,
including GOCCs without original charter. [Sec. 1, Rule
I, Book VI, IRR]

Security of Tenure
Art. 294. Security of Tenure. – In case of regular
employment, the employer shall not terminate the
services of an employee except for a just cause or
when authorized by this Tile. An employee who is
unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their
monetary equivalent computed from the time his
compensation was withheld from him up to the time
of his actual reinstatement.

Nature of Right/Rationale
It is a constitutionally protected right [Sec. 3, Art. XIII,
1987 Constitution]; it cannot be blotted out by an
employment contract.

Termination of employment is not anymore a mere

cessation or severance of contractual relationship but
an economic phenomenon affecting members of the
family. This is the reason why under the broad
principles of social justice the dismissal of employees is
adequately protected by the laws of the state. [Alhambra
Industries, Inc. v. NLRC, G.R. No. 106771 (1994)]

Management Prerogatives and Security of Tenure

An employer may not be compelled to continue in its
employ a person whose continuance in the service
would patently be inimical to its interests. [Baguio Central
University v. Gallente, G.R. No. 188267 (2013)]

In dismissal cases, the Court must consider a balancing

between the employees’ tenurial rights and the
employer’s management prerogative. [Imasen Phil.
Manufacturing Corp. v. Alcon & Papa, G.R. 194884 (2014)]

Page 164 of 220

 U.P. LAW BOC LABOR RELATIONS
Management prerogative must be exercised in good
faith and with due regard to the rights of the workers in
the spirit of fairness and with justice in mind. [Philbag
Industrial Manufacturing Corp. v. Philbag Workers Union-
Lakas at Gabay ng Manggagawang Nagkakaisa, G.R. No.
182486 (2012)]
Requisites for the validity of management
prerogative affecting security of tenure
1. Exercised in good faith for the advancement of the
Employer's interest, and
2. Not for the purpose of defeating or circumventing
the rights of the Employees under special laws or
under valid agreements. [San Miguel Brewery Sales
Force Union v. Ople, G.R. No. 53515 (1989)]
Guide in disposition of labor disputes
Bare and vague allegations as to the manner of service
and the circumstances surrounding the same would not
suffice. A mere copy of the notice of termination
allegedly sent by respondent to petitioner, without
proof of receipt, or in the very least, actual service
thereof upon petitioner, does not constitute substantial
evidence.
There may be cases where the circumstances warrant
favoring labor over the interests of management but
never should the scale be so tilted if the result is an
injustice to the employer. Justitia nemini neganda est
(Justice is to be denied to none). [Mansion Printing Center
v. Bitara, Jr., G.R. No. 168120. (2012)]
Procedural vis-à-vis substantive issues
In labor cases, substantive issues must be addressed
more than anything else, and so, the Court may forego
the matter of procedural infirmities. [Ang v. San Joaquin,
Jr., G.R. No. 185549 (2013)]
Employer’s Burden of Proof
Art. 292 (b). Miscellaneous Provisions. – … The
burden of proving the termination was for a valid or
authorized cause shall rest on the employer.
Unsubstantiated accusations or baseless conclusions of
the employer are insufficient legal justifications to
dismiss an employee. The unflinching rule in illegal
dismissal cases is that the employer bears the burden of
proof. [Garza v. Coca-Cola Bottlers Philippines, Inc., G.R.
No. 180972 (2014)]
In illegal dismissal cases, the burden of proof is upon
the employer to show that the employee's termination
from service is for a just and valid cause. The
Page 165 of 220
LABOR LAW
employer's case succeeds or fails on the strength of its
evidence and not the weakness of that adduced by the
employee, in keeping with the principle that the scales
of justice should be tilted in favor of the latter in case
of doubt in the evidence presented by them. [Functional,
Inc. v. Granfil, G.R. No. 176377 (2011)]
Employee must first establish the fact of dismissal
Before the employer must bear the burden of proving
that the dismissal was legal, the employee must first
establish by substantial evidence the fact of his
dismissal from service. If there is no dismissal, then
there can be no question as to the legality or illegality
thereof. [MZR Industries v. Colambot, G.R. No. 179001
(2013)]
In an illegal dismissal case, the onus probandi rests on the
employer to prove that its dismissal of an employee was
for a valid cause. However, before a case for illegal
dismissal can prosper, an employer-employee
relationship must first be established by the employee
[Javier v. Fly Ace Corp., G.R. No. 192558 (2012)]
Summary on Burden of Proof
1. Existence of ER-EE Relationship: Employee
2. Fact of dismissal: Employee
3. Validity of Dismissal: Employer
Measure of Penalty
Not every case of insubordination or willful
disobedience by an employee reasonably deserves the
penalty of dismissal. The penalty to be imposed on an
erring employee must be commensurate with the
gravity of his offense. [Joel Montallana v. La Consolacion
College Manila, G.R. No. 208890 (2014)]
While an employer enjoys a wide latitude of discretion
in the promulgation of policies, rules and regulations on
work-related activities of the employees, those
directives, however, must always be fair and
reasonable, and the corresponding penalties, when
prescribed, must be commensurate to the offense
involved and to the degree of the infraction. [Moreno v.
San Sebastian College-Recoletos, G.R. No. 175283 (2008)]
 U.P. LAW BOC LABOR RELATIONS
1. Just Causes
a. Serious Misconduct or Willful Disobedience
(Insubordination)
b. Gross & Habitual Neglect of Duties
c. Fraud/Willful Breach of Trust
d. Commission of A Crime
e. Analogous Cases
Art. 297. Termination by Employer. An employer
may terminate an employment for any of the
following causes:
a. Serious misconduct or willful disobedience by
the employee of the lawful orders of his
employer or representative in connection with
his work;
b. Gross and habitual neglect by the employee of
his duties;
c. Fraud or willful breach by the employee of the
trust reposed in him by his employer or duly
authorized representative;
d. Commission of a crime or offense by the
employee against the person of his employer or
any immediate member of his family or his duly
authorized representatives; and
e. Other causes analogous to the foregoing.
Basis
As a measure of self-protection against acts inimical to
its interest, a company has the right to dismiss its erring
employees. An employer cannot be compelled to
continue employing an employee guilty of acts inimical
to the employer's interest, justifying loss of confidence
in him. [Yabut v. Meralco, G.R. No. 190436 (2012)]
Employer’s right to dismiss vis-à-vis employee’s
right to security of tenure
The managerial prerogative to transfer personnel must
be exercised without grave abuse of discretion, bearing
in mind the basic elements of justice and fair play.
Having the right should not be confused with the
manner in which that right is exercised. Thus, it cannot
be used as a subterfuge by the employer to rid himself
of an undesirable worker. In particular, the employer
must be able to show that the transfer is not
unreasonable, inconvenient or prejudicial to the
employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits.
Nowhere in the law providing for the just and
authorized causes of termination of employment is
there any direct or indirect reference to filing a
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LABOR LAW
legitimate complaint for money claims against the
employer as a valid ground for termination.
The right of employers to shape their own work force
is recognized; however, this management prerogative
must not curtail the basic right of employees to security
of tenure. There must be a valid and lawful reason for
terminating the employment of a worker. Otherwise, it
is illegal and would be dealt with by the courts
accordingly. [Alert Security and Investigation Agency, Inc. v.
Pasawilan, G.R. No. 182397 (2011)]
a. Serious Misconduct
Requisites:
1. There must be misconduct;
2. The misconduct must be of such grave and
aggravated character;
3. It must relate to the performance of the
employee’s duties; and
4. There must be showing that the employee
becomes unfit to continue working for the
employer. [Sec. 5.2. (a), D.O. No. 147-15]
Misconduct refers to the improper or wrong conduct
that transgresses some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere
error in judgment.
But misconduct or improper behavior, to be a just cause
for termination of employment, must:
1. be serious;
2. relate to the performance of the employee’s duties;
and
3. show that the employee has become unfit to
continue working for the employer. [Northwest
Airlines, Inc, v. Del Rosario, G.R. No. 157633 (2014)]
Accusatory and inflammatory language used by an
employee to the employer or superior can be a ground
for dismissal or termination. [Nissan Motors Phils. Inc. v.
Angelo, G.R. No. 164181 (2011)]
The misconduct to be serious must be of such grave
and aggravated character and not merely trivial or
unimportant. Such misconduct, however serious, must,
nevertheless, be in connection with the employee’s
work to constitute just cause for his separation. [Hocheng
Philippines v Farrales, G.R. No. 211497 (2015)]
 U.P. LAW BOC LABOR RELATIONS
b. Willful Disobedience
(Insubordination)
Requisites:
1. There must be disobedience or insubordination;
2. The disobedience or insubordination must be
willful or intentional characterized by a wrongful
and perverse attitude;
3. The order violated must be reasonable, lawful, and
made known to the employee [Mirant Philippines
Corp v. Sario, G.R. No. 197598 (2012)]; and
4. The order must pertain to the duties which he has
been engaged to discharge. [Sec. 5.2. (b), D.O. No.
147-15]
The employee’s initial reluctance to prepare the checks,
however, which was seemingly an act of disrespect and
defiance, was for honest and well-intentioned reasons.
Protecting the company from liability under the
Bouncing Checks Law was foremost in her mind. It was
not wrongful or willful. Neither can it be considered an
obstinate defiance of company authority. [Lores Realty
Enterprises v Pacia, G.R. No. 171189, (2011)]
c. Gross and Habitual Neglect of
Duties
Requisites:
1. There must be neglect of duty; and
2. The negligence must be both gross and habitual in
character. [Sec. 5.2. (c), D.O. No. 147-15]
Gross negligence has been defined as the want or
absence of or failure to exercise slight care or diligence,
or the entire absence of care. It evinces a thoughtless
disregard of consequences without exerting any effort
to avoid them. In order to constitute just cause for an
EE’s dismissal due to negligence, it must not only be
gross, but also habitual. A single or an isolated act that
cannot be categorized as habitual, hence, not a just
cause for their dismissal. [National Bookstore v. CA, G.R.
No. 146741 (2002)]
Gross negligence connotes want of care in the
performance of one’s duties, while habitual neglect
implies repeated failure to perform one’s duties for a
period of time, depending on the circumstances.
Estoppel by toleration of management: breach of rules
and regulations which are tolerated by management
cannot serve basis as termination. The rule only applies
when the violation is not tantamount to fraud or
commission of illegal activities. One cannot evade
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LABOR LAW
liability based on obedience to the corporate chain of
command. [PNB v. Padao, G.R. No. 180849, 187143
(2011)]
On the principle of respondeat superior or command
responsibility alone, a managerial employee may be held
liable for negligence in the performance of her
managerial duties. [Jumuad v. Hi-Flyer Food, Inc., G.R.
No. 187887 (2011)]
Gross Negligence includes gross inefficiency
Art. 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. Bañas, G.R. No. 184116
(2013)]
d. Fraud/Willful Breach of Trust
Requisites of fraud or willful breach of trust:
1. There must be an act, omission, or concealment;
2. The act, omission or concealment involves a
breach of legal duty, trust, or confidence justly
reposed;
3. It must be committed against the employer or
his/her representative; and
4. It must be in connection with the employees’ work.
[Sec. 5.2. (d), D.O. No. 147-15]
Requisites 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 confidence of the employer to the
employee;
3. The employee concerned must be holding a
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 unqualified; and
6. It must be genuine and not a mere afterthought to
justify an earlier action taken in bad faith. [Sec. 5.2.
(e), D.O. No. 147-15]
When dismissal is proper on the basis of
fraud/willful breach of the trust
The loss of trust and confidence must be based
on willful breach of the trust reposed in the employee
by his employer. Such breach is willful if it is done
intentionally, knowingly, and purposely, without
justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently.
And, in order to constitute a just cause for dismissal,
 U.P. LAW BOC LABOR RELATIONS
the act complained of must be work-related and shows
that the employee concerned is unfit to continue
working for the employer. In addition, loss of
confidence as a just cause for termination of
employment is premised on the fact that the employee
concerned holds a position of responsibility, trust
and confidence or that the employee concerned is
entrusted with confidence with respect to delicate
matters, such as handling or case and protection of
the property and assets of the employer. The
betrayal of this trust is the essence of the offense for
which an employee is penalized. [Villanueva, Jr. v.
NLRC, G.R. No. 176893 (2012)]
The loss of trust and confidence must be based not on
ordinary breach by the employee of the trust reposed in
him by the employer, but, in the language of Art. 282
(c) of the Labor Code, on willful breach. A breach is
willful if it is done intentionally, knowingly and
purposely, without justifiable excuse, as distinguished
from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. It must rest on substantial grounds and
not on the employer's arbitrariness, whims, caprices or
suspicion; otherwise, the employee would eternally
remain at the mercy of the employer. [Johansen World
Group Corp. v. Gonzales III, G.R. No. 198733 (2012)]
When dismissal on the ground of loss of trust or
confidence is proper:
The Employee concerned is one holding a position of
trust and confidence (e.g. managerial or fiduciary
employees).
There must be an act that would justify the loss of trust
and confidence.
The loss of trust and confidence must be based on a
willful breach of trust and founded on clearly
established facts. [Wesleyan Universtity – Philippines v.
Reyes, G.R. No. 208321 (2014)]
Loss of trust and confidence to be a valid cause for
dismissal must be based on a willful breach of trust and
founded on clearly established facts. The basis for the
dismissal must be clearly and convincingly established
but proof beyond reasonable doubt is not necessary.
[Prudential Guarantee and Assurance Employee Labor Union
v. NLRC, G.R. No. 185335 (2012)]
Loss of confidence should not be simulated in order to
justify what would otherwise be, under the provisions
of law, an illegal dismissal. "It should not be used as a
subterfuge for causes which are illegal, improper and
unjustified. It must be genuine, not a mere afterthought
to justify an earlier action taken in bad faith." (Nokom v.
NLRC, G.R. No. 140043 (2000; N. Mabeza vs. NLRC
Page 168 of 220
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and Hotel Supreme, G.R No. 118506, April 18, 1997.)
Moreover, in order to constitute a "just cause" for
dismissal, the act complained of must be related to the
performance of the duties of the employee such as
would show him to be thereby unfit to continue
working for the employer. [Equitable Banking Corp. vs.
NLRC, et al., G.R. No. 102467 (1997)
Note: DO 174-15 distinguishes fraud or willful breach
of trust from loss of confidence but, as seen in the cases
cited above, jurisprudence seems to make no such
distinction.
POSITIONS OF TRUST AND CONFIDENCE
1. Managerial Employees - those vested with the
powers or prerogatives to lay down management
policies and to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees or
effectively recommend such managerial actions.
2. Fiduciary Rank And File - those who in the
normal and routine exercise of their functions,
regularly handle significant amounts of money or
property. Examples are cashiers, auditors, property
custodians, etc. [Prudential Guarantee and Assurance
Employee Labor Union v. NLRC, G.R. No. 185335
(2012)]
Fiduciary
Managerial
rank-and-file
Proof of involvement in
the alleged events in
Mere existence of a basis
question required; mere
for the belief of
uncorroborated
employee’s guilt [Grand
assertions and
Asian Shipping Lines, Inc.
accusations
v. Galvez, G.R. No.
are not enough [Etcuban,
178184 (2014)]
Jr. v. Sulpicio Lines, Inc.,
G.R. No. 148410 (2005)]
Employment for a long
time is counted against
the employee [Salvador v.
Philippine Mining Service
Corp., G.R. Bo. 148766]
Managerial Employees: Reason for the Rule
The employer has broader discretion in dismissing
managerial employees on the ground of loss of trust and
confidence than those occupying ordinary ranks. While
plain accusations are not sufficient to justify the
dismissal of rank and file employees, the mere existence
of a basis for believing that managerial employees have
breached the trust reposed on them by their employer
would suffice to justify their dismissal. [Grand Asian
Shipping Lines, Inc. v. Galvez, G.R. No. 178184 (2014)]
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

f. Analogous Causes
Acquittal in Criminal Case arising from
Misconduct Requisites:
Notwithstanding petitioner’s acquittal in the criminal 1. There must be an act or omission similar to those
case for qualified theft, the company had adequately specified just causes; and
established the basis for the company’s loss of 2. The act or omission must be voluntary and/or
confidence as a just cause to terminate. As opposed to willful on the part of the employees
the "proof beyond reasonable doubt" standard of
evidence required in criminal cases, labor suits require No act or omission shall be considered as analogous
only substantial evidence to prove the validity of the cause unless expressly specified in the company rules
dismissal. [Paulino v. NLRC, G.R. No. 176184 (2012)] and regulations or policies. [Sec. 5.2. (g), D.O. No. 147-
15]
Betrayal by a long-time employee
Length of service is not a bargaining chip that can One is analogous to another if it is susceptible of
simply be stacked against the employer. After all, an comparison with the latter either in general or in some
employer-employee relationship is symbiotic where specific detail; or has a close relationship with the latter.
both parties benefit from mutual loyalty and dedicated
service. If an employer had treated his employee well, OTHER CAUSES
has accorded him fairness and adequate compensation
as determined by law, it is only fair to expect a long- 1. Abandonment
time employee to return such fairness with at least some 2. Courtesy Resignation
respect and honesty. Thus, it may be said that betrayal 3. Change of Ownership
by a long-time employee is more insulting and odious 4. Habitual Absenteeism/Tardiness
for a fair employer. [Moya v. First Solid Rubber Industries, 5. Poor Performance
Inc., G.R. No. 184011 (2013)] 6. Past Offenses
7. Habitual Infractions
e. Commission of a Crime 8. Immorality
9. Totality of infractions
Requisites: 10. Pregnancy out of wedlock
1. There must be an act or omission 11. Conviction/Commission of a Crime
punishable/prohibited by law; and 12. Temporary “Off-detail” or “floating status”
2. The act or omission was committed by the
employee against the person of the employer, any Abandonment
immediate member of his/her family, or his/her Abandonment is a just cause for dismissal under Art.
duly authorized representative. [Sec. 5.2. (f), D.O. 297(b), . It is the deliberate and unjustified refusal of an
No. 147-15] employee to resume his employment. It is a form of
neglect of duty. Two factors should be present: (1)
Commission of a crime or offense by the employee Failure to report for work or absence without valid or
against the person of his employer or any immediate justifiable reason, (2) Clear intention to sever ER-EE
member of his family or his duly authorized relationship. The burden to prove whether the
representatives [Art. 297(d)] employee abandoned his or her work rests on the
employer. [Protective Maximum Security, Inc v. Celso E.
The employer may validly dismiss for loss of trust and Fuentes, G.R. No. 169303 (2015)]
confidence an employee who commits an act of fraud
prejudicial to the interest of the employer. Neither a Elements:
criminal prosecution nor a conviction beyond 1. Failure to report for work or absence without valid
reasonable doubt for the crime is a requisite for the or justifiable reason, and
validity of the dismissal. [Concepcion v Minex Import 2. A clear intention to sever the employer-employee
Corporation/Minerama Corporation, G.R. No. 153569 relationship, with the second element as the more
(2012)] determinative factor and being manifested by some
overt acts.

Page 169 of 220

 U.P. LAW BOC LABOR RELATIONS
Absence must be accompanied by overt acts unerringly
pointing to the fact that the employee simply does not
want to work anymore. It has been ruled that the
employer has the burden of proof to show a deliberate
and unjustified refusal of the employee to resume his
employment without any intention of returning. [Tan
Brothers Corp. of Basilan City v. Escudero, G.R. No. 188711
(2013)]
Courtesy Resignation
Resignation per se means voluntary relinquishment of a
position or office. Adding the word "courtesy" did not
change the essence of resignation. [Batongbacal v.
Associated Bank, G.R. No. 72977 (1988)]
Change Of Ownership
A mere change in the equity composition of a
corporation is neither a just nor an authorized cause
that would legally permit the dismissal of the
corporation's employees en masse. [SME Bank, Inc. v. De
Guzman, G.R. No. 184517, 186641 (2013)]
Habitual Absenteeism/ Tardiness
Habitual tardiness is a form of neglect of duty. Lack of
initiative, diligence, and discipline to come to work on
time everyday exhibit the employee's deportment
towards work. Habitual and excessive tardiness is
inimical to the general productivity and business of the
employer. This is especially true when the tardiness
and/or absenteeism occurred frequently and repeatedly
within an extensive period of time. [R.B. Michael Press v.
Galit, G.R. No. 153510 (2008)]
However, there are cases when absenteeism is not
sufficient to justify termination. In the case of, Cavite
Apparel v Michelle Marquez, G.R. No. 172044, (2013), the
SC held: “Michelle might have been guilty of violating
company rules on leaves of absence and employee
discipline, still we find the penalty of dismissal imposed
on her unjustified under the circumstances. As earlier
mentioned, Michelle had been in Cavite Apparel’s
employ for six years, with no derogatory record other
than the four absences without official leave in
question, not to mention that she had already been
penalized for the first three absences, the most serious
penalty being a six-day suspension for her third absence
on April 27, 2000.”
Poor Performance
As a general concept, poor performance is tantamount
to inefficiency and incompetence in the performance of
official duties. An unsatisfactory rating can be a just
cause for dismissal only if it amounts to gross and
habitual neglect of duties. Poor or unsatisfactory
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LABOR LAW
performance of an employee does not necessarily mean
that he is guilty of gross and habitual neglect of duties
[INC Shipmanagement Inc. v. Campo-Redondo, G.R. No.
199931 (2015)].
Past Offenses
Previous offense may be used as valid justification for
dismissal from work only if the infractions are related
to the subsequent offense upon which the basis of
termination is decreed. [Century Canning Corporation v.
Ramil, G.R. No. 171630 (2010)]
Habitual Infractions
A series of irregularities when put together may
constitute serious misconduct, which under Art. 297 of
the Labor Code, as amended, is a just cause for
dismissal [Gustilo v. Wyeth Phil. Inc., G.R. No. 149629
(2004)]
Immorality
DECS Order No. 92 provides that disgraceful or
immoral conduct can be used as a basis for termination
of employment [Santos, Jr. v. NLRC, G.R. No. 115795
(1998)]
The act of engaging in extramarital affairs was
specifically provided for by the cooperative’s Personnel
Policy as one of the grounds for termination of
employment and said act raised concerns to the
cooperative as the Board received numerous
complaints and petitions from the cooperative
members themselves asking for the removal of
Bandiola because of his immoral conduct, hence,
immorality (extramarital affair) justified terminating the
employment by the employer [Alilem Credit Cooperative v.
Bandiola, Jr., G.R. No. 173489 (2013)]
Jurisprudence has already set the standard of morality
with which an act should be gauged – it is public and
secular, not religious. Whether a conduct is
considered disgraceful or immoral should be made in
accordance with the prevailing norms of conduct,
which as stated in Leus, refer to those conducts which
are proscribed because they detrimental to conditions
upon which depend the existence of and progress of
human society. The fact that a particular act does not
conform to the traditional moral views of a certain
sectarian institution is insufficient reason to qualify
such act as immoral unless it likewise does not conform
to the public and secular standards. More importantly
there must be substantial evidence to establish that
premarital sexual relations and pregnancy out of
wedlock is considered disgraceful or immoral. [Capin-
Cadiz v Brent Hospital, G.R. 187417, (2016)]
 U.P. LAW BOC LABOR RELATIONS
Totality of Infractions Doctrine
The totality of infractions or the number of violations
committed during the period of employment shall be
considered in determining the penalty to be imposed
upon an erring employee. Fitness for continued
employment cannot be compartmentalized into tight
little cubicles of aspects of character, conduct and
ability 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 employment record would be wiped clean of
his infractions. After all, the record of an employee is a
relevant consideration in determining the penalty that
should be meted out since an employee's past
misconduct and present behavior must be taken
together in determining the proper imposable penalty.
[Merin v. NLRC, G.R. No. 171790 (2008)]
Pregnancy out of Wedlock
Accordingly, when the law speaks of immoral or,
necessarily, disgraceful conduct, it pertains to public
and secular morality; it refers to those conducts which
are proscribed because they are detrimental to
conditions upon which depend the existence and
progress of human society. To stress, pre-marital sexual
relations between two consenting adults who have no
impediment to marry each other, and, consequently,
conceiving a child out of wedlock, gauged from a purely
public and secular view of morality, does not amount to
a disgraceful or immoral conduct under Sec. 94(e) of
the 1992 MRPS. [Cheryl Leus v. St. Scholastica College
Westgrove, G.R. No. 187226 (2015)]
Conviction/Commission of a Crime
The charge of drug abuse within the company’s
premises and during work hours constitutes serious
misconduct which is one of the just causes for
termination. [Bughaw, Jr. v. Treasure Island Industrial, G.R.
No. 173151 (2008)]
Temporary “Off-Detail” or “Floating Status”
Temporary "off-detail" or "floating status" is the period
of time when security guards are in between
assignments or when they are made to wait after being
relieved from a previous post until they are transferred
to a new one. It takes place when the security agency's
clients decide not to renew their contracts with the
agency, resulting in a situation where the available posts
under its existing contracts are less than the number of
guards in its roster. It also happens in instances where
contracts for security services stipulate that the client
may request the agency for the replacement of the
guards assigned to it even for want of cause, such that
the replaced security guard may be placed on temporary
Page 171 of 220
LABOR LAW
"off-detail" if there are no available posts under the
agency's existing contracts. During such time, the
security guard does not receive any salary or any
financial assistance provided by law. It does not
constitute a dismissal, as the assignments primarily
depend on the contracts entered into by the security
agencies with third parties, so long as such status does
not continue beyond a reasonable time. When such a
"floating status" lasts for more than six (6) months, the
employee may be considered to have been
constructively dismissed [Salvaloza v. NLRC, G.R. No.
182086 (2010)].
See: A.2.h. Floating status.
Transfer/Reassignment of Work
Concerning the transfer of employees, these are the
following jurisprudential guidelines:
1. a transfer is a movement from one position to
another of equivalent rank, level or salary without
break in the service or a lateral movement from one
position to another of equivalent rank or salary;
2. the employer has the inherent right to transfer or
reassign an employee for legitimate business
purposes;
3. a transfer becomes unlawful where it is motivated
by discrimination or bad faith or is effected as a
form of punishment or is a demotion without
sufficient cause;
4. the employer must be able to show that the transfer
is not unreasonable, inconvenient, or prejudicial to
the employee. [Rural Bank of Cantilan, Inc. v. Julve,
G.R. No. 169750 (2007)]
If the transfer of an employee is not unreasonable, or
inconvenient, or prejudicial to him, and it does not
involve a demotion in rank or a diminution of his
salaries, benefits and other privileges, the employee
may not complain that it amounts to a constructive
dismissal. [Peckson v. Robinson’s Supermarket Corp., G.R.
No. 198534 (2013)]
 U.P. LAW BOC LABOR RELATIONS
2. Authorized Causes
a.k.a. Business-related Causes
Art. 298. The employer may also terminate the
employment of any employee due to the installation
of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of
operation of the establishment or undertaking unless
the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on
the workers and the Ministry of Labor and
Employment at least 1 month before the intended
date thereof. In case of termination due to the
installation of labor-saving devices or redundancy,
the worker affected thereby shall be entitled to a
separation pay equivalent to at least 1 month pay or
to at least 1 month pay for every year of service,
whichever is higher. In case of retrenchment to
prevent losses in cases of closures or cessation of
operations of establishment or undertaking not due
to serious business losses or financial reverses, the
separation pay shall be equivalent to 1 month pay or
at least 1⁄2 month pay for every year of service,
whichever is higher. A fraction of at least 6 months
shall be considered 1 whole year.
Under Art. 298, the ff. are authorized causes:
a. Installation of labor-saving devices
b. Redundancy
c. Retrenchment to prevent serious losses
d. Closing or cessation of business not due to serious
losses
Due to retrenchment,
Due to labor-saving
closure, or suspension
devices or redundancy
of operations
1-month pay, or at least 1-month pay, or at least
1-month pay for every ½ month pay for every
year of service, year of service,
whichever is higher whichever is higher
A fraction of at least six months shall be considered
as one year
Basis
Employment is the lifeblood upon which the worker
and his family owe their survival. [Flight Attendants and
Stewards Ass'n of the Philippines v. PAL, Inc., G.R. No.
178083 (2009)]
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a. Installation of Labor-Saving
Device
This refers to the installation of machinery to effect
economy and efficiency in the employer’s method of
production [Edge Apparel, Inc. v. NLRC, G.R. No.
121314 (1998)]
Requisites 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.
In cases of installation of labor-saving devices,
redundancy and retrenchment, the ‘Last-In, First-Out
Rule’ shall apply except when an employee volunteers
to be separated from employment. [Sec. 5.4. (a), D.O.
No. 147-15]
b. Redundancy
Redundancy exists when the service capability of the
workforce is in excess of what is reasonably needed to
meet the demands of the business enterprise. A
position is redundant when it is superfluous, and
superfluity of a position or positions could be the result
of a number of factors, such as the overhiring of
workers, a decrease in the volume of business or the
dropping of a particular line or service previously
manufactured or undertaken by the enterprise. [Morales
v. Metrobank, G.R. No. 182475 (2012)]
Requisites of redundancy:
1. There must be superfluous positions or services of
employees;
2. The positions or services are in excess of what is
reasonably demanded by the actual requirements of
the enterprise to operate in an economical and
efficient manner;
3. There must be good faith in abolishing redundant
positions;
4. There must be fair and reasonable criteria in
selecting the employees to be terminated; and
 U.P. LAW BOC LABOR RELATIONS
5. There must be an adequate proof of redundancy
such as but not limited to the new staffing patter,
feasibility studies/proposal, on the viability of the
newly created positions, job description and the
approval by the management of the restructuring.
[Sec. 5.4. (c), D.O. No. 147-15]
6. Written notice served on both the employees and
the DOLE at least one month prior to the intended
date of termination of employment;
7. Payment of separation pay equivalent to at least
one month pay for every year of service
In implementing a redundancy program, it has been
ruled that the employer is required to adopt a fair and
reasonable criteria, taking into consideration such
factors as (a) preferred status; (b) efficiency; and (c)
seniority, among others. [Morales v. Metrobank, G.R. No.
182475 (2012)]
To exhibit its good faith and that there was a fair and
reasonable criteria in ascertaining redundant positions,
a company claiming to be over manned must produce
adequate proof of the same. Such proof includes but is
not limited to the new staffing pattern, feasibility
studies/proposals on the viability of the newly created
positions, job description and the approval by the
management of the restructuring. [General Milling
Corporation v Violeta L. Viajar, G.R. No. 181738 (2013)]
c. Retrenchment
Requisites of a valid retrenchment:
1. The retrenchment is reasonably necessary and
likely to prevent business
2. The losses, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or
if only expected, are reasonably imminent as
perceived objectively and in good faith by the
employer;
3. The expected or actual losses must be proved by
sufficient and convincing evidence;
4. The retrenchment must be in good faith for the
advancement of its interest and not to defeat or
circumvent the employees’ right to security of
tenure; and
5. There must be fair and reasonable criteria in
ascertaining who would be dismissed and who
would be retained among the employees, such as
status, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers. [Sec.
5.2. (c), D.O. No. 147-15]
6. That the employer served written notice both to
the employees and to the Department of Labor and
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LABOR LAW
Employment at least one month prior to the
intended date of retrenchment;
7. That the employer pays the retrenched employees
separation pay equivalent to 1 month pay or at least
1⁄2 month pay for every year of service, whichever
is higher.
The employer bears the burden of proving the existence
of the imminence of substantial losses with clear and
satisfactory evidence that there are legitimate business
reasons justifying a retrenchment. [Mount Carmel College
Employees Union (MCCEU), et. al v. Mount Carmel College,
Inc. G.R. No. 187621 (2014)]
The Court recognizes two kinds of losses which can
justify retrenchment — incurred losses which are
substantial, serious, actual and real, and expected losses
which are reasonably imminent. [Sanoh Fulton Phils. Inc.
v. Bernardo & Tagohoy, G.R. No. 187214 (2013)]
d. Closure of a Business
Requisites:
1. There must be a decision to close or cease
operation of the enterprise by the management;
2. The decision was made in good faith; and
3. There is no other option available to the employer
except to close or cease operations. [Sec. 5.4. (d),
D.O. No. 147-15]
Guidelines in Closure
1. Closure or cessation of operations of establishment
or undertaking may either be partial or total
2. Closure or cessation of operations of establishment
or undertaking may or may not be due to serious
business losses or financial service reverses.
However, in both instances, proof must be shown
that:
a. it was done in good faith to advance the
employer's interest and not for the purpose of
defeating or circumventing the rights of
employees under the law or a valid agreement;
and
b. Written notice on the affected employees and
the DOLE is served at least one month before
the intended date of termination of
employment.
3. The employer can lawfully close shop even if not
due to serious business losses or financial reverses
but separation pay, which is equivalent to at least
one month pay as provided for by Art. 289 of the
Labor Code, as amended, must be given to all the
affected employees.
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

4. If the closure or cessation of operations of qualified separated

establishment or undertaking is due to serious personnel of the selling
business losses or financial reverses, the firm.
employer must prove such allegation in order
to avoid the payment of separation pay. Procedural steps required
Otherwise, the affected employees are entitled to At least 1 month before the intended date of
separation pay. termination, Employer is to serve written notice to:
5. The burden of proving compliance with all the 1. Affected employees;
above-stated falls upon the employer. [Manila Polo 2. DOLE (Art. 298)
Club Employees' Union v. Manila Polo Club, Inc., G.R.
No. 172846 (2013)] Criteria in selecting employees for dismissal:
Fair and reasonable criteria in ascertaining who will be
Closure of Department affected:
The closure of a department or division of a company 1. Preferred status (e.g. temporary, casual or regular
constitutes retrenchment by, and not closure of, the Employees),
company itself. [Waterfront Cebu City Hotel v. Jimenez, 2. Efficiency,
G.R. No. 174214, June 13, 2012] 3. Physical fitness,
4. Age,
Corporate acquisitions 5. Financial hardship, or
Asset Sales Stock Sales 6. Seniority. [Asian Alcohol Corp. v. NLRC, G.R. No.
Sale 131108 (1999)]
Corporate entity sells all In stock sales, the
or substantially all of its individual or corporate Retrenchment Redundancy Closure
assets to another entity. shareholders sell a Reduction of The service of The reversal of
controlling block of personnel an employee is the fortune of
stock to new or existing usually due to in excess of the employer
shareholders. poor financial what is whereby there
Obligation of Seller returns so as to required by an is a complete
Seller in good faith is A shift in the cut down on enterprise cessation of
authorized to dismiss composition of its costs of business
the affected employees, shareholders will not operations in operations
but is liable for the affect its existence and terms of and/or actual
payment of separation continuity. salaries and locking-up of
pay under the law. wages the doors of
Notwithstanding the the
stock sale, the establishment,
corporation continues usually due to
to be the employer of its financial losses
people and continues to Resorted to To save Aims to
be liable for the primarily to production prevent further
payment of their just avoid or costs financial drain
claims. minimize upon the
Obligation of Buyer business losses employer
The buyer in good faith, Employee is Employee is In case of
The corporation or its entitled to entitled to closure of
on the other hand, is
new majority separation pay separation pay business not
not obliged to absorb
shareholders are not of 1 month pay of 1 month pay due to serious
the employees affected
entitled to lawfully or ½ month or ½ month business losses,
by the sale, nor is it
dismiss corporate pay per year of pay per year of the employer
liable for the payment of
employees absent a just service, service, pays the
their claims. The most
or authorized cause. whichever is whichever is employees
that it may do, for
[SME Bank, Inc. v. De higher higher terminated
reasons of public policy
Guzman, G.R. No. separation pay
and social justice, is to
184517, 186641 (2013)] of 1 month pay
give preference to the

Page 174 of 220

 U.P. LAW BOC LABOR RELATIONS LABOR LAW

or 1/2 month Sec. 8, Rule I, Book VI. Disease as a ground for

pay per year of dismissal. — Where the employee suffers from a
service, disease and his continued employment is prohibited
whichever is by law or prejudicial to his health or to the health of
higher. his co-employees, the employer shall not terminate
his employment unless there is a certification by
In case closure competent public health authority that the disease is
of business is of such nature of at such a stage that it cannot be
due to serious cured within a period of six (6) months even with
business losses, proper medical treatment. If the disease or ailment
no separation can be cured within the period, the employee shall
pay is required. not terminate the employee but shall ask the
[Manila Polo employee to take a leave of absence. The employer
Club Employees' shall reinstate such employee to his former position
Union v. Manila immediately upon the restoration of his normal
Polo Club, Inc., health.
G.R. No.
172846 (2013)]
Requisites
Other Causes 1. The employee must be suffering from a disease
1. Disease incurable in 6 months [Art. 299] which cannot be cured within six months, even
2. Enforcement of union security clause in the CBA with proper medical treatment;
3. Dismissal of union officers for the conduct of an 2. His continued employment is prohibited by law or
illegal strike [Art. 279 (a)] prejudicial to his health or to the health of his co-
4. Dismissal of union members for participating in employees; and
the commission of illegal acts [Art. 279 (a)] 3. A certification to that effect must be issued by a
5. Termination in conformity with existing statute/ competent public health authority. [Crayons
qualification requirements Processing, Inc. v. Pula, G.R. No. 167727 (2007); Sec.
5.2. (f), D.O. No. 147-15]
e. Disease The burden falls upon the employer to establish these
requisites, and in the absence of such certification, the
Art. 299. Disease as Ground for Termination. – dismissal must necessarily be declared illegal.
An employer may terminate the services of an
employee who has been found to be suffering from It is only where there is a prior certification from a
any disease and whose continued employment is competent public authority that the disease afflicting
prohibited by law or is prejudicial to his health as well the employee sought to be dismissed is of such nature
as to the health of his co-employees: Provided, That or at such stage that it cannot be cured within six (6)
he is paid separation pay equivalent to at least one (1) months even with proper medical treatment that the
month salary or to one-half (1/2) month salary for latter could be validly terminated from his job [Crayons
every year of service, whichever is greater, a fraction Processing, Inc. v. Pula, G.R. No. 167727 (2007)]
of at least six (6) months being considered as one (1)
whole year. f. Enforcement of Union Security
Clause in CBA
See also discussion under V.A.3. Union Security Clause.

Law authorizes the enforcement of union security

clauses, provided such enforcement is not characterized
by arbitrariness, and always with due process.

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 U.P. LAW BOC LABOR RELATIONS
1. Substantive – whether the termination of
employment was based on the provisions of the
Labor Code or in accordance with the prevailing
jurisprudence;
In terminating the employment of an employee by
enforcing the Union Security Clause, the employer
needs only to determine and prove that:
a. The union security clause is applicable;
b. The union is requesting for the enforcement
of the union security provision in the CBA;
and
c. There is sufficient evidence to support the
union's decision to expel the employee from
the union or company.
2. Procedural – the manner in which the dismissal
was effected.
a. The first written notice to be served on the
employees should contain the specific causes
or grounds for termination against them, and
a directive that the employees are given the
opportunity to submit their written
explanation within a reasonable period.
b. The requirement of a hearing is complied with
as long as there was an opportunity to be
heard, and not necessarily that an actual
hearing was conducted.
c. After determining that termination of
employment is justified, the employers shall
serve the employees a written notice of
termination indicating that: (1) all
circumstances involving the charge against the
employees have been considered; and (2)
grounds have been established to justify the
severance of their employment. [Inguillo v. First
Phil Scales, G.R. No. 165407 (2009)]
g. Dismissal of Union Officers for
the Conduct of an Illegal
Strike/Dismissal of Union
Members for Participating in the
Commission of Illegal Acts
Art. 279 (a). Prohibited Activities. –
xxx
... Any union officer who knowingly participates in
an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his
employment status.
Page 176 of 220
LABOR LAW
h. Termination in Conformity with
Existing Statute/ Qualification
Requirements
While the right of workers to security of tenure is
guaranteed by the Constitution, its exercise may be
reasonably regulated pursuant to the police power of
the State to safeguard health, morals, peace, education,
order, safety, and the general welfare of the people.
Consequently, persons who desire to engage in the
learned professions requiring scientific or technical
knowledge may be required to take an examination as a
prerequisite to engaging in their chosen careers. [St.
Lukes’s Medical Center Employees Ass'n-AFW v. NLRC,
G.R. No. 162053 (2007)]
3. Due Process
Art. 292 (b). Miscelllaneous Provisions. – Subject
to the constitutional right of workers to security of
tenure and their right to be protected against
dismissal except for a just and authorized cause
without prejudice to the requirement of notice under
Art. 283 of this Code, the employer shall furnish the
worker whose employment is sought to be
terminated a written notice containing a statement of
the causes for termination and shall afford the latter
ample opportunity to be heard and to defend himself
with the assistance of his representative if he so
desires in accordance with company rules and
regulations promulgated pursuant to guidelines set by
the Department of Labor and Employment. Any
decision taken by the employer shall be without
prejudice to the right of the worker to contest the
validity or legality of his dismissal by filing a
complaint with the regional branch of the National
Labor Relations Commission. The burden of
proving that the termination was for a valid or
authorized cause shall rest on the employer.
Requisites for Valid Dismissal
a. Substantive due process: The dismissal must be
for any of the causes provided for in Art. 297 – 299
of the Labor Code; and
b. Procedural due process: The employee must be
afforded an opportunity to be heard and defend
himself. [Fujitsu Computer Products Corporation of the
Phil. v. Court of Appeals, G.R. No. 158232 (2005)]
Employer may not substitute the required prior notice
& opportunity to be heard with the mere payment of 30
days' salary. [PNB v. Cabansag, G.R. No. 157010 (2005)]
 U.P. LAW BOC LABOR RELATIONS
Right to Counsel
The right to counsel, a very basic requirement of
substantive due process, has to be observed. Indeed,
the rights to counsel and to due process of law are two
of the fundamental rights guaranteed by the
1987 Constitution to any person under investigation, be
the proceeding administrative, civil, or criminal. [Salaw
v. NLRC, G.R. No. 90786 (1991)]
Note: Right to counsel was requested but denied in this
case.
The procedure can be summarized in this manner. First
the employer must furnish the employee with a written
notice containing the cause for termination. Second, the
employer must give the employee an opportunity to be
head. This can be done either through a position paper
or clarificatory hearing. The employee MAY ALSO
be assisted by a representative or counsel. Finally,
the employer MUST give another written notice
apprising the employee of its findings and the penalty
to be imposed against the employee, if any. In labor
cases, these requisites meet the constitutional
requirement of procedural due process, which
contemplates, “notice and opportunity to be heard
before judgment is rendered affecting one’s person or
property.” [Montinola v PAL, G.R. No. 198656, (2014)]
Burden of Proof
In illegal dismissal cases, the onus of proving that the
employee was not dismissed or, if dismissed, that the
dismissal was not illegal, rests on the employer, failure
to discharge which would mean that the dismissal is not
justified and, therefore, illegal. [Macasero v. Southern
Industrial Gases Philippines, G.R. No. 178524 (2009)]
Degree of Proof
In labor cases, as in other administrative proceedings,
substantial evidence is required and it is such relevant
evidence as a reasonable mind might accept as adequate
to support a conclusion. [Andrada v. Agemar Manning
Agency, Inc., G.R. No. 194758 (2012)]
Substantial evidence is necessary for an employer to
effectuate any dismissal. Uncorroborated assertions and
accusations by the employer do not suffice; otherwise
the constitutional guaranty of security of tenure of the
employee would be jeopardized. [Kulas Ideas & Creations,
et. al. v. Alcoseba & Arao Arao, G.R. No. 180123 (2010)]
Page 177 of 220
LABOR LAW
a. Twin-Notice Requirement
The employer has the burden of proving that a
dismissed worker has been served two notices:
1. First written notice: served on the employee
specifying the ground or grounds for termination,
and giving said employee reasonable opportunity
within which to explain his side.
2. Second written notice: served upon the employee,
indicating that upon due consideration of all the
circumstances, grounds have been established to
justify his termination.
Reasonable opportunity for the first notice should be
construed at least five (5) calendar days from receipt of
the notice to give the employees an opportunity to
study the accusation against them, consult a union
official or lawyer, gather data and evidence, and decide
on the defenses they will raise against the complaint.
[King of Kings Transport v. Mamac, G.R. No. 166208
(2007); Puncia v. Toyota Shaw/Pasig, G.R. No. 214399
(2016)]
a. Contain the specific causes or
grounds for termination against
them, and
b. Contain a directive that the
employees are given the opportunity
to submit their written explanation
within a “reasonable period” or
every kind of assistance that
management must accord to the
employees to enable them to
prepare adequately for their defense.
This should be construed as a
period of at least five (5) calendar
First days from receipt of the notice
Notice c. Contain a detailed narration of the
facts and circumstances that will
serve as basis for the charge against
the employees. A general
description of the charge will not
suffice. [Unilever v. Rivera, G.R. No.
201701 (2013)]
d. Specifically mention which company
rules, if any, are violated and/or
which among the grounds under
Art. 288 is being charged against the
employees. [United Tourist Promotions
v. Kemplin, G.R. No. 205453
(2014)]
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

a. Indicate all circumstances involving PROCEDURE TO BE OBSERVED IN

the charge against the employees TERMINATION CASES
considered; and
Second b. Indicate grounds established to Just Cause
Notice justify the severance of their Notice specifying the grounds for which dismissal is
employment [United Tourist sought
Promotions v. Kemplin, G.R. No.
205453 (2014)] ↓
Hearing or opportunity to be heard
An employee may be dismissed only if the grounds ↓
mentioned in the pre-dismissal notice were the ones
cited for the termination of employment. [Erector Notice of the decision to dismiss
Advertising Sign Group, Inc. v. Cloma, G.R. No. 167218,
(2010)] Authorized Cause
Notice to:
b. Hearing 1. Employee, and
2. DOLE at least 1 month prior to the effectivity of
In employee dismissal cases, the essence of due process the separation
is simply an opportunity to be heard; it is the denial of
this opportunity that constitutes violation of due Requisites
process of law. [Technol Eight Philippines Corporation v. 1. Notice not needed when Employee consented to
NLRC, G.R. No. 187605 (2010)] the retrenchment or voluntarily applied for one.
[International Hardware, Inc. v. NLRC, G.R. No.
While a formal hearing or conference is ideal, it is not 80770 (1989)]
an absolute, mandatory or exclusive avenue of due 2. Notice must be individual, not collective [Shoppers
process. [Perez v. PT&T, G.R. No. 152048 (2009)] Gain Supermart v. NLRC, G.R. No. 110731 (1996)]
3. Voluntary arbitration satisfies notice requirement
Guiding principles in hearing requirement for authorized causes [Revidad v. NLRC, G.R. No.
1. "Ample opportunity to be heard" means any 111105 (1995)
meaningful opportunity (verbal or written) given to
the employee to answer the charges against him Consequences for non-compliance of Procedural
and submit evidence in support of his defense, Due Process
whether in a hearing, conference or some other Validity of
Situation Liability of ER
fair, just and reasonable way. Dismissal
2. A formal hearing or conference BECOMES Just/Authorized No liability.
MANDATORY ONLY WHEN REQUESTED Cause + Due Valid Separation pay only
by the employee in writing; OR substantial Process in authorized cause
evidentiary disputes exist; OR a company rule or Reinstatement or
No
practice requires it; OR when similar circumstances separation pay If
Just/Authorized
justify it. Invalid reinstatement is not
Cause + Due
3. The "ample opportunity to be heard" standard in possible + full
Process
the Labor Code prevails over the "hearing or backwages
conference" requirement in the implementing rules Reinstatement or
No
and regulations. [Perez v. PT&T, supra.] separation pay If
Just/Authorized
Invalid reinstatement is not
Cause + No
possible + full
Due Process
backwages
Liable for damages
due to procedural
Just/Authorized
infirmity.
Cause + No Valid
Separation pay if
Due Process
for authorized
cause.

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 U.P. LAW BOC LABOR RELATIONS
C. Termination of
Employment by Employee
1. Resignation vs. Constructive
Dismissal
a. Resignation
Art. 300. Termination by Employee. –
a. An employee may terminate without just cause
the employer-employee relationship by serving a
written notice on the employer at least one (1)
month in advance. The employer upon whom no
such notice was served may hold the employee
liable for damages
b. An employee may put an end to the relationship
without serving any notice on the employer for
any of the following requirements:
1. Serious insult by the employer or his
representative on the honor and person of
the employee;
2. Inhuman and unbearable treatment
accorded the employee by the employer or
his representative;
3. Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the
immediate members of his family; and
4. Other causes analogous to any of the
foregoing.
When without just cause: Written notice to resign
submitted one (1) month in advance
When with just cause: No notice required for any of
the following:
1. Serious insult by the employer or his representative
on the honor and person of the employee;
2. Inhuman and unbearable treatment accorded the
employee by the employer or his representative;
3. Commission of a crime or offense by the employer
or his representative against the person of the
employee or any of the immediate members of his
family; and
4. Other causes analogous to any of the foregoing.
Page 179 of 220
LABOR LAW
Definition of Resignation
Resignation is the voluntary act of an employee who
finds himself in a situation where he believes that
personal reasons cannot be sacrificed in favor of the
exigency of the service, such that he has no other choice
but to disassociate himself from his employment.
[Cervantes v. PAL Maritime Corp., G.R. No. 175209
(2013)]
To constitute a resignation, it must be unconditional
and with the intent to operate as such. There must be
an intention to relinquish a portion of the term of office
accompanied by an act of relinquishment. The fact that
the employee signified his desire to resume his work
when he went back to AZCOR after recuperating from
his illness, and actively pursued his case for illegal
dismissal before the labor courts when he was refused
admission by his employer, negated any intention on his
part to relinquish his job at AZCOR. [Azcor
Manufacturing Inc. v. NLRC, G.R. No. 117963 (1999)]
“Well-entrenched is the rule that resignation is
inconsistent with the filing of a complaint for illegal
dismissal.” [Blue Angel Manpower and Security Services Inc. v
Court of Appeals, G.R. 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,
G.R. No. 198261 (2013)]
Requisites of a valid resignation
1. Voluntary, unconditional, and intentionally to
relinquish a portion of a term of employment
2. Accompanied by an act of relinquishment
As the intent to relinquish must concur with the overt
act of relinquishment, the acts of the employee before
and after the alleged resignation must be considered in
determining whether he or she, in fact, intended, to
sever his or her employment. [Saudia v Rebesencio, G.R.
No. 198587 (2015)]
Resignation is voluntary when the act of resignation and
the intention to resign concur. If it resignation was done
because of oppressive conditions set by the employer,
such is tantamount to constructive dismissal. [Saudi
Arabian Airlines v. Rebesencio, G.R. No. 198587 (2015)]
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

b. Constructive Dismissal injury to his person or property. [Mandapat v. Add

Force Personnel, G.R. No. 180285 (2010)]
Constructive dismissal is cessation of work because
continued employment is either Constructive
Resignation
1. rendered impossible, unreasonable or unlikely; Dismissal
2. when there is a demotion in rank or diminution in Voluntary act of an Involuntary or forced
pay or both; or employee who is in a resignation due to the
3. when a clear discrimination, insensibility, or disdain situation where one harsh, hostile, and
by an employer becomes unbearable to the believes that personal unfavorable conditions
employee. [Dusit Hotel Nikko v. NUHWRAIN- reasons cannot be set by the employer. It is
Dusit Hotel Chapter, G.R. No. 160391 (2005)] sacrificed in favor of the essentially quitting or
exigency of the service. cessation of work
The Test of Constructive Dismissal It is a formal because continued
Whether a reasonable person in the employee’s position pronouncement or employment is rendered
would have felt compelled to give up his position under relinquishment of an impossible,
the circumstances. [Tuazon v. Bank of Commerce, G.R. No. office, with the unreasonable or
192076 (2012)] intention of unlikely; when there is a
relinquishing the office demotion in rank or a
It is an act amounting to dismissal but made to appear accompanied by the act diminution of pay and
as if it were not. Constructive dismissal is, therefore, a of relinquishment. [Gan other benefits. It exists
dismissal in disguise. As such, the law recognizes and v. Galderma Philippines, if an act of clear
resolves this situation in favor of employees in order to Inc.] discrimination,
protect their rights and interests from the coercive acts insensibility, or disdain
of the employer. In fact, the employee who is by an employer
constructively dismissed may be allowed to keep on becomes so unbearable
coming to work. [McMer Corp., Inc. v. NLRC, G.R. No. on the part of the
193421 (2014)] employee that it could
foreclose any choice by
Unlawful withholding of wages for a long time could be him except to forego his
tantamount to an illegal constructive dismissal. [Gilles v. continued employment.
CA, G.R. No. 149273 (2009)] [Gan v. Galderma
Philippines, Inc.]
A bona fide suspension of work is allowed for as long as Valid termination of Illegal dismissal
it does not exceed 6 months. Failure of the employer to employment by the
recall the suspended employees in the 6-month period employee.
amounts to constructive dismissal. [SKM Art. Craft
Corp. v. Bauca, G.R. No. 171282 (2013)]

Forced resignation is constructive dismissal

Mere allegations of threat or force do not constitute
evidence to support a finding of forced resignation. In
order for intimidation to vitiate consent, the following
requisites must concur:
1. that the intimidation caused the consent to be
given;
2. that the threatened act be unjust or unlawful;
3. that the threat be real or serious, there being
evident disproportion between the evil and the
resistance which all men can offer, leading to the
choice of doing the act which is forced on the
person to do as the lesser evil; AND
4. that it produces a well-grounded fear from the fact
that the person from whom it comes has the
necessary means or ability to inflict the threatened

Page 180 of 220

 U.P. LAW BOC LABOR RELATIONS LABOR LAW

completion of the hearing, to dismiss the worker.

D. Preventive Suspension
When imposed
Preventive suspension may be legally imposed on
employee whose alleged violation is the subject of an
investigation. The purpose of his suspension is to
prevent him from causing harm or injury to the
company as well as to his fellow employees [Sec. 8, Rule
XXIII, IRR].
Preventive suspension is a disciplinary measure for the
protection of the company’s property pending
investigation of any alleged malfeasance or misfeasance
committed by the employee. The employer may place
the worker concerned under preventive suspension if
his continued employment poses a serious and
imminent threat to the life or property of the employer
or of his co-workers. When, however, it is determined
that there is no sufficient basis to justify an employee’s
preventive suspension, the latter is entitled to the
payment of salaries during the time of preventive
suspension.” [Gatbonton vs. NLRC, G.R. No. 146779
(2006)]
Preventive suspension is justified where the employee's
continued employment poses a serious and imminent
threat to the life or property of the employer or of the
employee's co-workers. Without this kind of threat,
preventive suspension is not proper. [Artificio v. NLRC,
G.R. No. 172988 (2010)]
It is important to note that preventive suspension is not
a penalty, but a part of a process to investigate a
questioned action of an employee. Preventive
suspension does not in itself prove that the employer
already finds the employee guilty of the charges he is
asked to answer and explain [Soriano v. NLRC et. al.,
G.R. No. 75510, (1987)].
[Sec. 9, Rule XXIII, Book V, IRR]
Note: Sec. 9, Rule XXIII, Book V is an old provision.
The new IRR [DO 40-03 s. 2003, as amended] however,
does not provide for a maximum period for suspension.
This is an oversight.
Note, however, that in a 2010 case, the Supreme Court
held: "while no period was mentioned in the show-
cause memorandum, the inclusion of the phrase
“during the course of investigation” would lead to a
reasonable and logical presumption that said
suspension in fact had a duration which could very well
be not more than 30 days as mandated by law."
[Mandapat v. Add Force Personnel, G.R. No. 180285
(2010)]
When preventive suspension is deemed
constructive dismissal
When preventive suspension exceeds the maximum
period allowed without reinstating the employee either
by actual or payroll reinstatement or when preventive
suspension is for an indefinite period, only then will
constructive dismissal set in.
Not entitled to pay
Employee placed under preventive suspension is not
entitled to the payment of wages. However, if the basis
for suspension is later proven to be unfounded or
invalid, the said employee is entitled to his salary during
the whole period of his suspension. [Gatbonton vs.
NLRC, G.R. No. 146779 (2006)]

Period of suspension
No preventive suspension shall last longer than thirty
(30) days.

Upon the expiry of such period, the employer shall

thereafter
1. reinstate the worker in his former or in a
substantially equivalent position; or
2. the employer may extend the period of suspension
provided that during the period of extension, he
pays the wages and other benefits due to the
worker. In such case, the worker shall not be
bound to reimburse the amount paid to him during
the extension if the employer decides, after

Page 181 of 220

 U.P. LAW BOC LABOR RELATIONS
E.Reliefs for Illegal
Dismissal
The reliefs are cumulative, not alternative
Art. 294. Security of Tenure. – In case of regular
employment, the employer shall not terminate the
services of an employee except for a just cause or
when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their
monetary equivalent computed from the time his
compensation was withheld from him up to the time
of his actual reinstatement.
1. In general
a. Reinstatement
b. Backwages
2. Damages and attorney’s fees
3. Separation Pay
4. Financial assistance/separation pay as a measure of
social justice
5. Indemnity
6. Interest at 6% p.a. on the total monetary awards
(from finality of decision until full payment)
7. Solidary liability of corporate officers
1. Reinstatement
Reinstatement means restoration to a state or
condition from which one had been removed or
separated. The person reinstated assumes the position
he had occupied prior to his dismissal. [Asian Terminals,
Inc. v. Villanueva, G.R. No. 143219 (2006)]
General Rule: Reinstatement and backwages
Exceptions:
a. Separation pay
b. Closure of business [Retuya v. Hon. Dumarpa, G.R.
No. 148848 (2003)]
c. Economic business conditions [Union of Supervisors
v. Secretary of Labor, G.R. No. L-39889 (1981)]
d. Employee’s unsuitability [Divine Word High School v.
NLRC, G.R. No. 72207 (1986)]
e. Employee’s retirement/ overage [New Philippine
Skylanders, Inc. v. Dakila, G.R. No. 199547 (2012)]
f. Antipathy and antagonism [Wensha Spa Center v.
Yung, G.R. No. 185122 (2010)]
Page 182 of 220
LABOR LAW
g. Job with a totally different nature [DUP Sound Phils.
v. CA, G.R. No. 168317 (2011)]
h. Long passage of time
i. Inimical to the employer's interest
j. When supervening facts have transpired which
make execution on that score unjust or inequitable
or, to an increasing extent [Emeritus Security &
Maintenance Systems, Inc. v. Dailig, G.R. No. 204761
(2014)]
Prescription Period
An action for reinstatement by reason of illegal
dismissal is one based on an injury, which may be
brought within 4 years from the time of dismissal. [Art.
1146, CC]
Reinstatement Pending Appeal
Art. 229. Appeal. –
xxx
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned, shall
immediately be executory, pending appeal. The
employee shall either be admitted back to work under
the same terms and conditions prevailing prior to his
dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The
posting of a bond by the employer shall not stay the
execution for reinstatement provided herein.
2. Options given to employers:
a. Actually reinstate the dismissed employees or,
b. Constructively reinstate them in the payroll.
Either way, this must be done immediately upon the
filing of their appeal, without need of any executory
writ.
If the order of reinstatement of the Labor Arbiter is
reversed on appeal, it is obligatory on the part of the
employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until
reversal by the higher court. The Labor Arbiter's order
of reinstatement is immediately executory and the
employer has to either re-admit them to work under the
same terms and conditions prevailing prior to their
dismissal, or to reinstate them in the payroll, and that
failing to exercise the options in the alternative,
employer must pay the employee's salaries [Magana v.
Medicard Philippines, Inc., G.R. No. 174833 (2010)]
 U.P. LAW BOC LABOR RELATIONS
No refund doctrine
An employee cannot be compelled to reimburse the
salaries and wages he received during the pendency of
his appeal, notwithstanding the reversal by the NLRC
of the LA's order of reinstatement. [College of the
Immaculate Conception v. NLRC, G.R. No. 167563 (2010)]
Note: However, Rule XI, Sec. 14 of the 2011 NLRC
Rules of Procedure provide for restitution of amounts
paid pursuant to execution of awards during pendency
of the appeal. However, it expressly disallows
restitution of wages paid due to reinstatement pending
appeal.
Sec. 14, Rule XI, 2011 NLRC Rules of Procedure.
Effect of Reversal of Executed Judgment. –
Where the executed judgment is totally or partially
reversed or annulled by the Court of Appeals or the
Supreme Court, the Labor Arbiter shall, on motion,
issue such orders of restitution of the executed
award, except wages paid during reinstatement
pending appeal.
SEPARATION PAY IN LIEU OF
REINSTATEMENT
Kinds of separation pay (SP)
a. SP as a statutory requirement for authorized causes
b. SP as financial assistance found in the next section
c. SP in lieu of reinstatement where reinstatement is
not feasible; and
d. SP as a benefit in the CBA or company policy
Instances when the award of separation pay, in lieu of
reinstatement to an illegally dismissed employee, is
proper:
a. When reinstatement is no longer possible, in cases
where the dismissed employee's position is no
longer available;
b. The continued relationship between the employer
and the employee is no longer viable due to the
strained relations between them; and
c. When the dismissed employee opted not to be
reinstated, or the payment of separation benefits
would be for the best interest of the parties
involved. [Sec. 4(b), Rule I, Book VI, IRR]
Page 183 of 220
LABOR LAW
Separation Pay and Reinstatement, Exclusive
Remedies
The payment of separation pay and reinstatement are
exclusive remedies. The payment of separation pay
replaces the legal consequences of reinstatement to an
employee who was illegally dismissed. [Bani Rural Bank,
Inc. v. De Guzman, G.R. No. 170904 (2013)]
Doctrine of Strained Relations
Where reinstatement is not feasible, expedient or
practical, as where reinstatement would only exacerbate
the tension and strained relations between the parties or
where the relationship between the employer and
employee has been unduly strained by reason of their
irreconcilable differences, particularly where the
illegally dismissed employee held a managerial or key
position in the company, it would be more prudent to
order payment of separation pay instead of
reinstatement. [Quijano v. Mercury Drug Corp., G.R. No.
126561 (1998)]
Computation
SP as a statutory requirement is computed by
integrating the basic salary with regular allowances
employee has been receiving [Planters Products, Inc. v.
NLRC, G.R. No. 78524, 78739 (1989)]; allowances
include transportation and emergency living allowances
[Santos v. NLRC, G.R. No. 76721 (1987)]
In an illegal dismissal case involving salespersons, the
Court took judicial notice of the fact that the nature of
the work of a salesperson and the reason for such type
of remuneration for services rendered, demonstrate
clearly that commissions are part of salespersons' wage
or salary. If the Court adopted the opposite view that
commissions do not form part of wage or salary, then,
in effect, the Court will be saying that salespersons do
not receive any salary and therefore, not entitled to
separation pay in the event of discharge from
employment. This narrow interpretation is not in
accord with the liberal spirit of our labor laws and
considering the purpose of separation pay which is, to
alleviate the difficulties which confront a dismissed
employee thrown the the streets to face the harsh
necessities of life. [Songco v. NLRC, G.R. Nos. 50999-
51000 (1990)]
A dismissed employee who has accepted separation pay
is not necessarily estopped from challenging the validity
of his or her dismissal. Neither does it relieve the
employer of legal obligations. [Anino v. NLRC, G.R.
No. 123226 (1998)]
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

3. Backwages remain inactive in the expectation that a windfall would

come to him" [Itogon Suyoc Mines, Inc. v. Sangilo-Itogon
Workers Union, G.R. No. L-24189 (1968), as cited in
Backwages are earnings lost by a worker due to his
Diwa ng Pagkakaisa v. Filtex International Corp. , G.R. No.
illegal dismissal; a form of relief that restores the
23960-61 (1972)] and attrition and protracted delay in
income lost by reason of such unlawful dismissal; it is
satisfying such award on the part of unscrupulous
not private compensation or damages; nor is it a redress
employers who have seized upon the further
of a private right but, rather, in the nature of a
proceedings to determine the actual earnings of the
command to the employer to make a public reparation
wrongfully dismissed or laid-off employees to hold
for illegally dismissing an employee. [St. Theresa's School
unduly extended hearings for each and every employee
of Novaliches Foundation v. NLRC, G.R. No. 122955
awarded backwages and thereby render practically
(1998)]
nugatory such award and compel the employees to
agree to unconscionable settlements of their backwages
Backwages and reinstatement are two reliefs that should
award in order to satisfy their dire need. [See La Campana
be given to an illegally dismissed employee. They are
Food Products, Inc. v. CIR, G.R. No. L-27907 (1969); and
separate and distinct from each other. An illegally
Kaisahan ng Mga Manggagawa v. La Campana Food Products,
dismissed employee is entitled to (1) either
Inc., G.R. No. L-30798 (1970)].
reinstatement, if viable, or separation pay if
reinstatement is no longer viable, and (2) backwages.
The salary base properly used should be the basic salary
Payment of backwages is specifically designed to restore
rate at the time of dismissal plus the regular allowances;
an employee's income that was lost because of his
allowances include:
unjust dismissal. [Aurora Land Projects Corp. v. NLRC,
a. Emergency cost of living allowances (ECOLA),
G.R. No. 114733 (1997)]
transportation allowances, 13th month pay.
[Paramount Vinyl Product Corp. v. NLRC, G.R. No.
Effect of failure to order backwages
81200 (1990)]
A “plain error” which may be rectified, even if
b. Also included are vacation leaves, service incentive
employee did not bring an appeal regarding the matter
leaves, and sick leaves
[Aurora Land Projects Corp. v. NLRC, supra.]
The effects of extraordinary inflation are not to be
Extent of Entitlement
applied without an official declaration thereof by
competent authorities. [Lantion v. NLRC, G.R. No.
General rule: An illegally dismissed employee is entitled
82028 (1990)]
to full backwages.
Note that according to Nacar v. Gallery Frames, when the
Exceptions
judgment of the court awarding a sum of money
a. The Court awarded limited backwages where the
becomes final and executory, the rate of legal interest
employee was illegally dismissed but the employer
…. shall be 6% per annum from such finality until its
was found to be in good faith. [San Miguel
satisfaction, this interim period being deemed to be by
Corporation v. Javate, Jr., G.R. No. L-54244 (1992)]
then an equivalent to a forbearance of credit. [Nacar v.
b. Delay of the EE in filing the case for illegal
Gallery Frames, G.R. No. 189871, (2013)]
dismissal [Mercury Drug Co., Inc. v. CIR, supra]
Indemnity of Employer
COMPUTATION OF BACKWAGES
Doctrine Validity of Liability of
Full backwages means exactly that, i.e., without Period
in effect dismissal ER
deducting from backwages the earnings derived
elsewhere by the concerned employee during the period Pre- Reinstatement
Prior 1989 Illegal
of his illegal dismissal. [Bustamante v. NLRC, G.R. No. Wenphil + Back-wages
111651 (1996)] Dismiss now,
Feb. 1989-
Wenphil Valid indemnity pay
1999
As has been noted, the formula of awarding reasonable later
net backwages without deduction or qualification relieves the Full back-
employees from proving or disproving their earnings wages up to
Jan. 2000 –
during their lay-off and the employers from submitting Serrano Ineffectual reinstatement
Oct. 2004
counterproofs, and obviates the twin evils of Idleness on finality of
the part of the employee who would "with folded arms, decision

Page 184 of 220

 U.P. LAW BOC LABOR RELATIONS LABOR LAW

Doctrine Validity of Liability of COVERAGE

Period
in effect dismissal ER General Rule:
Nov. 2004 Nominal Cause for
Agabon Valid Entitlement
– present damages Termination
Art. 288: Termination by
Employer
4. Damages and Attorney’s Fees a. Serious misconduct
or willful
Art. 111, CC. In cases of unlawful withholding of disobedience of
wages, the culpable party may be assessed attorney’s lawful orders
fees equivalent to ten percent of the amount of wages b. Gross and habitual
recovered. neglect of duties
c. Fraud or willful None
It shall be unlawful for any person to demand or breach of trust
accept, in any judicial or administrative proceedings d. Commission of a
for the recovery of wages, attorney’s fees which crime against
exceed ten percent of the amount of wages employer or
recovered. immediate member
of his family or
representative
Art. 2208, CC. In the absence of stipulation, e. Analogous causes
attorney's fees and expenses of litigation, other than Equivalent to at least 1
judicial costs, cannot be recovered, except: Art. 289: Installation of month pay or 1 month
(7) in actions for the recovery of wages of labor saving devices or pay for every year of
household helpers, laborers and skilled workers redundancy service, whichever is
higher
The employee is entitled to moral damages when the Art. 289: Retrenchment
employer acted to prevent losses or
Equivalent to at least 1
a. in bad faith or fraud; closure or cessations of
month pay or ½ month
b. in a manner oppressive to labor; or in a manner operations of
pay for every year of
contrary to morals, good customs, or public policy establishments or
service*, whichever is
[Montinola v. PAL, G.R. No. 198656 (2014). undertaking not due to
higher
serious business losses
In labor cases, the court may award exemplary damages or financial reverses
"if the dismissal was effected in a wanton, oppressive Art. 290: Disease when
Equivalent to at least 1
or malevolent manner." [Garcia v. NLRC, GR. No. continued employment
month pay or ½ month
110518 (1994)] is prohibited by law or is
pay for every year of
prejudicial to his health
service*, whichever is
or health of co-
5. Separation Pay employees
higher
Art. 291: Termination by
Arts. 289 & 290; DOLE Handbook on Worker’s employee whether with None
Statutory Monetary Benefits (2018) or without just cause
*A fraction of at least 6 months shall be considered
Separation pay is defined as the amount that an 1 whole year
employee receives at the time of his severance from the
service and is designed to provide the employee with Exceptions: Considerations of equity as in the cases of
the wherewithal during the period that he is looking for Filipro, Inc. v. NLRC [G.R. No. 70546 (1986)]; Metro
another employment. [A’ Prime Security Services v. NLRC, Drug Corp. v. NLRC [G.R. No. 72248 (1986)];
G.R. No. 107320 (1993)] Engineering Equipment, Inc. v. NLRC [G.R. No. L-59221
(1984)]; and San Miguel Corp v. NLRC [G.R. No. 80774
(1988)] [PLDT v. NLRC, G.R. No. 80609 (1988)]

Page 185 of 220

 U.P. LAW BOC LABOR RELATIONS
An employee who voluntarily resigns is not entitled to
separation pay unless stipulated in the employment
contract, or the collective bargaining agreement, or is
sanctioned by established practice or policy of the
employer. [Phimco Industries v. NLRC, G.R. No. 118041
(1997); Hinatuan Mining Corp v. NLRC, G.R. No.
117394 (1997) cited in JPL Marketing Promotions v. CA,
G.R. No. 151966 (2005)]
AMOUNT
One-Half (½) Month Pay per Year of Service
An employee is entitled to receive separation pay
equivalent to ½ month pay for every year of service, a
fraction of at least six (6) months being considered as
one whole year, if his/her separation from the service
is due to any of the following authorized causes:
a. Retrenchment to prevent losses (i.e. reduction of
personnel effected by management to prevent
losses) [Art. 298];
b. Closure or cessation of operation of an
establishment not due to serious losses or financial
reverses [Art. 298];
c. When the EE is suffering from a disease not
curable within a period of six (6) months and
his/her continued employment is prejudicial to
his/her health or to the health of his/her co-
employees [Art. 299]; and,
d. Lack of service assignment of security guard for a
continuous period of six (6) months [D.O. 150, s.
2016]
In no case will an employee get less than one (1) month
separation pay if the separation is due to the above
stated causes. [DOLE Handbook on Workers’ Statutory
Monetary Benefits, 2018 ed.]
One-Month Pay per Year of Service
An employee is entitled to separation pay equivalent to
his/her one-month pay for every year of service, a
fraction of at least 6 months being considered as one
whole year, if his/her separation from service is due to
any of the following:
a. Installation by employer of labor-saving devices;
b. Redundancy, as when the position of the employee
has been found to be excessive or unnecessary in
the operation of the enterprise;
c. Impossible reinstatement of the employee to
his/her former position or to a substantially
equivalent position for reasons not attributable to
the fault of the employer, as when the
reinstatement ordered by a competent authority
cannot be implemented due to closure of cessation
of operations of the establishment/employer, or
Page 186 of 220
LABOR LAW
the position to which he/she is to be reinstated no
longer exists and there is no substantially
equivalent position in the establishment to which
he/she can be assigned. [Gaco v. NLRC, G.R. No.
104690 (1994)]
d. Lack of service assignment of security guard by
reason of age. [D.O. 150, s. 2016] [DOLE
Handbook on Workers’ Statutory Monetary
Benefits, 2018 ed.]
Notice of Termination
The employer may terminate the employment of any
employee due to the above-mentioned authorized
causes by serving a written notice on the employee
and the DOLE through its regional office having
jurisdiction over the place of business at least 1 month
before the intended date thereof. [DOLE Handbook on
Workers’ Statutory Monetary Benefits, 2018 ed.]
Basis of Separation Pay
The computation of separation pay of an employee
shall be based on his/her latest salary rate. [DOLE
Handbook on Workers’ Statutory Monetary Benefits, 2018 ed.]
Inclusion of Regular Allowance in the
Computation
In the computation of separation pay, it would be error
not to integrate the allowance with the basic salary. The
salary base properly used in computing the separation
pay should include not just the basic salary but also the
regular allowances that an employee has been receiving.
[Planters’ Products, Inc. v. NLRC, G.R. No. 78524 (1989);
[DOLE Handbook on Workers’ Statutory Monetary Benefits,
2018 ed.]]
Non-taxable
In case of separation of an official or employee from
the service of the employer due to death, sickness or
other physical disability or for any cause beyond the
control of the said official or employee, any amount
received by him or by his heirs from the employer as a
consequence of such separation shall likewise be
exempt from tax. [Last provisio of par. 1, Sec. 1, RA
4917]
 U.P. LAW BOC LABOR RELATIONS
F. Money claims arising from
employer-employee
Money claims must have arisen from employment
Money claims of workers which do not arise out of or
in connection with their employer-employee
relationship fall within the general jurisdiction of
regular courts of justice. [San Jose vs. NLRC and Ocean
Terminal Services, Inc., G.R. No. 121227 (1998)]
Illustrative cases
In Pepsi-cola Bottling Co. v. Martinez [G.R. No. L-5887
(1982)], where an employee won an award for his
performance as top salesman of the year, the Court held
that the claim for said prize unquestionably arose from
an employer-employee relationship and, therefore, falls
within the coverage of Art. 217 (now 224), which
speaks of "all claims arising from employer-employee
relations." Indeed, the employee would not have
qualified for the contest, much less won the prize, if he
was not an employee of the company at the time of the
holding of the contest.
But, in San Miguel Corp. vs. NLRC [G.R. No. 80774
(1988)], where SMC sponsored an innovation program
granting cash awards to employees who would submit
ideas and suggestions beneficial to the corporation, the
Court ruled that such undertaking, though unilateral in
origin, could nonetheless ripen into an enforceable
contractual obligation on the part of SMC under certain
circumstances. Thus, whether or not an enforceable
contract had arisen, and if so, whether or not it had
been reached, are preeminently legal questions,
questions not to be resolved by referring to labor
legislation and having nothing to do with wages or their
terms and conditions of employment, but rather by
having recourse to our law on contracts.
Page 187 of 220
LABOR LAW
1. Money claims cognizable by
the Labor Arbiter
Art. 224 (a)(3)(6). Except as otherwise provided
under this Code, the Labor Arbiter shall have original
and exclusive jurisdiction to hear and decide, within
30 calendar days after the submission of the case by
the parties for decision without extension, even in the
absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-
agricultural:
xxx
3. If
accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions
of employment.
xxx
6. Except claims for Employees Compensation,
Social Security, Medicare and maternity benefits, all
other claims arising from employer-employee
relations, including those of persons in domestic or
household service, involving an amount exceeding
P5,000.00 regardless of whether accompanied with a
claim for reinstatement.
A money claim arising from employer-employee
relations, excepting SSS/ ECC/Medicare claims, is
within the jurisdiction of a labor arbiter —
a. if the claim, regardless of amount, is accompanied
with a claim for reinstatement; or
b. if the claim, whether or not accompanied with a
claim for reinstatement, exceeds five thousand
pesos (P5,000) per claimant.
2. Money claims cognizable by
the Secretary of Labor or its
duly authorized representative
Art. 129. Visitorial and enforcement power.
xxx
(b) Notwithstanding the provisions of Articles 129
and 217 (now 224) of this Code to the contrary, and
in cases where the relationship of employer-
employee still exists, the Secretary of Labor and
Employment or his duly authorized representatives
shall have the power to issue compliance orders to give effect
to the labor standards provisions of this Code and other
labor legislation based on the findings of labor
employment and enforcement officers or industrial
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

SUMMARY OF RULES ON MONEY CLAIMS

safety engineers made in the course of inspection.
The Secretary or his duly authorized representatives
shall issue writs of execution to the appropriate Art. 128 -
Art. 224 - LA Art. 129 - RD
authority for the enforcement of their orders, except SOLE
in cases where the employer contests the findings of Past or present Existing ER- Past or present
the labor employment and enforcement officer and ER-EE EE ER-EE
raises issues supported by documentary proofs which relationship relationship relationship
were not considered in the course of inspection. 1. Monetary 1. The power 1. Monetary
claims below of the SOLE claims below
5k arising to order and 5k without a
The visitorial and enforcement powers of the DOLE from terms enforce claim for
Regional Director to order and enforce compliance and conditions compliance reinstatement
with labor standard laws can be exercised even where of with labor
the individual claim exceeds P5,000.00. [Cireneo employment, standard laws
Bowling Plaza Inc. v. Sensing, G.R. 146572 (2005)] if it is with a can be
claim for exercised even
See discussion on Part. VIII. G. 1. Visitorial powers of the reinstatement where the
SOLE. 2. Monetary individual
claims claim exceeds
3. Money claims cognizable by exceeding 5k, P5,000.00
whether or not [Cireneo
the Regional Director it is with a Bowling Plaza,
claim for Inc. v. Sensing]
reinstatement,
Art. 129. Recovery of wages, simple money
except those
claims and other benefits. - Upon complaint of
involving SSS,
any interested party, the Regional Director of the
Medicare and
Department of Labor and Employment or any of the
maternity
duly authorized hearing officers of the Department is
benefits
empowered, through summary proceeding and after
due notice, to hear and decide any matter involving
the recovery of wages and other monetary claims and
benefits, including legal interest, owing to an
employee or person employed in domestic or
household service or househelper under this Code,
arising from employer-employee relations: Provided,
That such complaint does not include a claim for
reinstatement: Provided further, That the aggregate
money claims of each employee or househelper does
not exceed Five thousand pesos (P5,000.00).

Page 188 of 220

 U.P. LAW BOC LABOR RELATIONS
G.Retirement
RETIREMENT PAY
[RA 7641 (The Retirement Pay Law)]
Retirement - the result of a bilateral act of the parties,
a voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age
agrees to sever his or her employment with the former
An employer is free to impose a retirement age less than
65 for as long as it has the employees’ consent. Stated
conversely, employees are free to accept the employer's
offer to lower the retirement age if they feel they can
get a better deal with the retirement plan presented by
the employer. [Jaculbe v. Silliman University, G.R. No.
156934 (2007)]
Retroactive Effect
The Court imposed two (2) essential requisites in order
that RA 7641 may be given retroactive effect:
1. the claimant for retirement benefits was still in the
employ of the employer at the time the statute took
effect; and
2. the claimant had complied with the requirements
for eligibility for such retirement benefits under the
statute. [Universal Robina Sugar Milling Corp. v.
Caballeda, G.R. No. 156644 (2008)]
1. Eligibility
General Rule: All employees in the private sector,
regardless of their position, designation, or status, and
irrespective of the method by which their wages are
paid [Sec. 1, IRR, RA 7641]
Exceptions:
a. Employees covered by the Civil Service Law;
b. Domestic helpers and persons in the personal
service of another, and
c. Employees in retail, service and agricultural
establishments or operations regularly employing
not more than ten employees [Sec. 2, IRR, RA
7641]
Exclusions from coverage
RA 7641 only applies in a situation where:
a. there is no collective bargaining agreement or other
applicable employment contract providing for
retirement benefits for an employee; OR
b. there is a collective bargaining agreement or other
applicable employment contract providing for
Page 189 of 220
LABOR LAW
retirement benefits for an employee, but it is below
the requirements set for by law.
The reason for the first situation is to prevent the
absurd situation where an employee, who is otherwise
deserving, is denied retirement benefits by the nefarious
scheme of employers in not providing for retirement
benefits for their employees. The reason for the second
situation is expressed in the Latin maxim pacta private juri
public derogare non possunt. Private contracts cannot
derogate from the public law. [Oxales v. Unilab, G.R. No.
152991 (2008)]
Age of retirement
In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of
sixty (60) years or more, but not beyond sixty-five (65)
years which is hereby declared the compulsory
retirement age (and have served the establishment for
at least 5 years). [Sec. 1, IRR, RA 7641]
Optional retirement – in the absence of a retirement
plan or other applicable agreement providing for
retirement benefits of EEs in an establishment, an EE
may retire upon reaching the age of 60 or more if he
has served for at least 5 years in said establishment.
Compulsory retirement – in the absence of a
retirement plan or other applicable agreement
providing for retirement benefits of EEs in an
establishment, an EE shall be retired at the age of 65
years. [Sec. 4, IRR, RA 7641]
Note: For surface mine workers, the optional
retirement age is 50, while the mandatory retirement age
is now 60. [Sec. 2, RA 10757]
2. Amount of Retirement Pay
The minimum retirement pay shall be equivalent to
one-half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as
one whole year.
For the purpose of computing retirement pay, “one-
half month salary” shall include all of the following:
1. Fifteen (15) days salary based on the latest salary
rate;
2. Cash equivalent of five (5) days of service incentive
leave;
3. One-twelfth (1/12) of the 13th month pay. (1/12
x 365/12 = .083 x 30.41 = 2.52)
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

Thus, “one-half month salary” is equivalent to 22.5
days. [Capitol Wireless, Inc. v. Sec. Confessor, G.R. No.
117174 (1996); Reyes v. NLRC, G.R. No. 160233 (2007)]
Other benefits may be included in the computation of
the retirement pay upon agreement of the ER and the
EE or if provided in the CBA.
Retirement pay under RA 7641 vis-à-vis retirement
benefits under SSS and GSIS laws
RA 7641 mandates payment of retirement benefits. All
private sector employees regardless of their position,
designation or status and irrespective of the method by
which their wages are paid are entitled to retirement
benefits upon compulsory retirement at the age of sixty-
five (65) or upon optional retirement at sixty (60) or
more but not 65. The minimum retirement pay due
covered employees shall be equivalent to one-half
month salary for every year of service, a fraction of at
least six (6) months being considered as one whole year.
The benefits under this law are other than those granted
by the SSS or the GSIS. [Secs. 1 & 2, RA 7641]
Retirement Benefits under a CBA or Applicable
Contract
Any EE may retire or be retired by his/her ER upon
reaching the age established in the CBA or other
applicable agreement/contract and shall receive the
retirement benefits granted therein; provided, however,
that such retirement benefits shall not be less than the
retirement pay required under RA 7641, and provided
further that if such retirement benefits under the
agreement are less, the ER shall pay the difference. [Art.
302; Sec. 3.2, IRR]
Where both the ER and the EE contribute to a
retirement fund pursuant to the applicable agreement,
the ER’s total contributions and the accrued interest
thereof should not be less than the total retirement
benefits to which the EE would have been entitled had
there been no such retirement benefits’ fund. If such
total portion from the ER is less, the ER shall pay the
deficiency. [Sec. 3.3, IRR]
months reckoned from the date of retirement by the
number of actual working days in that particular period,
provided that the determination of rates of payment by
results are in accordance with established regulations.
For covered workers who are paid by result and do not
have a fixed monthly salary rate, the basis for the
determination of the salary for 15 days shall be their
average daily salary (ADS).
The ADS is derived by dividing the total salary or
earning for the last 12 months reckoned from the date
of retirement by the number of actual working days in
that particular period, provided that the determination
of rates of payment by results are in accordance with
established regulations.
4. Retirement Benefit of Part-
Time Workers
Part-time workers are also entitled to retirement pay of
“one-half month salary” for every year of service under
RA 7641 after satisfying the following conditions
precedent for optional retirement:
a. There’s no retirement plan between the ER and the
EE; and,
b. The EE should have reached the age of 60 years,
and should have rendered at least 5 years of service
with the ER.
Applying the foregoing principle, the components of
retirement benefit of part-time workers may likewise be
computed at least in proportion to the salary and related
benefits due them. [DOLE Handbook on Workers’
Statutory Monetary Benefits, 2018 ed.]

3. Retirement Benefits of
Workers Who are Paid By
Results
For covered workers who are paid by result and do not
have a fixed monthly salary rate, the basis for the
determination of the salary for 15 days shall be their
average daily salary (ADS). The ADS is derived by
dividing the total salary or earning for the last 12

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 U.P. LAW BOC LABOR RELATIONS
5. Non-Taxable
Sec. 1, RA 4917. Any provision of law to the
contrary notwithstanding, the retirement benefits
received by officials and employees of private firms,
whether individual or corporate , in accordance with
a reasonable private benefit plan maintained by the
employer shall be exempt from all taxes and shall not
be liable to attachment, garnishment, levy or seizure
by or under any legal or equitable process whatsoever
except to pay a debt of the official or employee
concerned to the private benefit plan or that arising
from liability imposed in a criminal action: Provided,
That the retiring official or employee has been in the
service for at least ten (10) years and is not less than
fifty years of age at the time of his retirement:
Provided, further, That the benefits granted under
this Act shall be availed of by an official or employee
only once; Provided, finally, That in case of
separation of an official or employee from the service
of the employer due to death, sickness, or other
physical disability or for any cause beyond the control
of the said official or employee, any amount received
by him or by his heirs from the employer as a
consequence of such separation shall likewise be
exempt as hereinabove provided.
As used in this Act, the term "reasonable private
benefit plan" means a pension, gratuity, stock bonus
or profit sharing plan maintained by an employer for
the benefit of some or all of his officials and
employees, wherein contributions are made by such
employer or officials and employees, or both, for the
purpose of distributing to such officials and
employees the earnings and principal of the fund thus
accumulated, and wherein it is provided in said plan
that at no time shall any part of the corpus or income
of the fund be used for, or be diverted to, any
purpose other than for the exclusive benefit of the
said officials and employees.
Any provision of law to the contrary notwithstanding,
the retirement benefits received by officials and
employees of private firms, whether individual or
corporate, in accordance with a reasonable private
benefit plan maintained by the employer
a. shall be exempt from all taxes and
b. shall not be liable to attachment, garnishment, levy
or seizure by or under any legal or equitable process
whatsoever. [Intercontinental Broadcasting Corp. v
Amorilla, G.R. No. 162775 (2006)]
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LABOR LAW
Exception: Except to pay a debt of the official or
employee concerned to the private benefit plan or that
arising from liability imposed in a criminal action:
Additional conditions
a. That the retiring official or employee has been in
the service of the same employer for at least ten
(10) years and is not less than fifty years of age at
the time of his retirement;
b. That the retirement benefits shall be availed of by
an official or employee only once
Coverage from Income Tax of Retirement Pay
Exempted from taxation are the retirement benefits
received under RA 7641 (now Article 302 of LC) and
those received by officials and employees of private
firms, whether individual or corporate, in accordance
with a reasonable private benefit plan maintained by the
employer:
Provided,
a. That the retiring official or employee has been in
the service of the same employer for at least ten
(10) years; and
b. is not less than fifty (50) years of age at the time of
his retirement:
Provided, further, That the benefits granted under this
subparagraph shall be availed of by an official or
employee only once. [Handbook on Workers’ Statutory
Monetary Benefits, 2018 ed.]
Reasonable private benefit plan - means a pension,
gratuity, stock bonus or profit sharing plan maintained
by an employer for the benefit of some or all of his
officials and employees, wherein contributions are
made by such employer or officials and employees, or
both, for the purpose of distributing to such officials
and employees the earnings and principal of the fund
thus accumulated, and wherein it is provided in said
plan that at no time shall any part of the corpus or
income of the fund be used for, or be diverted to, any
purpose other than for the exclusive benefit of the said
officials and employees. [Handbook on Workers’
Statutory Monetary Benefits, 2018 ed.]
 U.P. LAW BOC LABOR RELATIONS
VII. MANAGEMENT
PREROGATIVE
Sec. 20, Art. II, 1987 Constitution. The State
recognizes the indispensable role of the private
sector, encourages private enterprise, and provides
incentives to needed investments.
Sec. 3, pars. 3 and 4, Art. XIII, 1987 Constitution.
The State shall promote the principle of shared
responsibility between workers and employers and
the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster industrial
peace.
The State shall regulate the relations between workers
and employers, recognizing the right of labor to its
just share in the fruits of production and the right of
enterprises to reasonable returns to investments, and
to expansion and growth.
The right of an employer to regulate all aspects of
employment, aptly called “management prerogative,”
gives employers the freedom to regulate, according to
their discretion and best judgment, all aspects of
employment, including work assignment, working
methods, processes to be followed, working
regulations, transfer of employees, work supervision,
lay-off of workers and the discipline, dismissal and
recall of workers. In this light, courts often decline to
interfere in legitimate business decisions of employers.
In fact, labor laws discourage interference in employers’
judgment concerning the conduct of their business.
Xxx Among the employer’s management prerogatives
is the right to prescribe reasonable rules and regulations
necessary or proper for the conduct of its business or
concern, to provide certain disciplinary measures to
implement said rules and to assure that the same would
be complied with. At the same time, the employee has
the corollary duty to obey all reasonable rules, orders,
and instructions of the employer; and willful or
intentional disobedience thereto, as a general rule,
justifies termination of the contract of service and the
dismissal of the employee. [St. Luke’s Medical Center, Inc.
v. Sanchez, G.R. 212054 (2015)]
The employer’s right to conduct the affairs of his
business, according to its own discretion and judgment,
is well-recognized. An employer has a free reign and
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LABOR LAW
enjoys wide latitude of discretion to regulate all aspects
of employment. This is a management prerogative,
where the free will of management to conduct its own
affairs to achieve its purpose takes form. [Torreda v.
Toshiba, G.R. No. 165960 (2007)]
So long as a company’s management prerogatives are
exercised in good faith for the advancement of the
employer’s interest and not for the purpose of defeating
or circumventing the rights of the employees under
special laws or under valid agreements, this Court will
uphold them… Even as the law is solicitous of the
welfare of the employees, it must also protect the right
of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct
its own business affairs to achieve its purpose cannot
be denied. [Ernesto G. Ymbong v. ABS-CBN Broadcasting
Corp., G.R. No. 184885 (2012)]
The law in protecting the rights of the employees
authorizes neither oppression nor self-destruction of
the employer. It should be made clear that when the law
tilts the scale of justice in favor of labor, it is but a
recognition of the inherent economic inequality
between labor and management. Never should the scale
be so tilted if the result is an injustice to the employer.
[Panuncillo v. CAP, G.R. No. 161305 (2007)]
Under the doctrine of management prerogative, every
employer has the inherent right to regulate, according
to his own discretion and judgment, all aspects of
employment, including hiring, work assignments,
working methods, the time, place and manner of work,
work supervision, transfer of employees, lay-off of
workers, and discipline, dismissal, and recall of
employees. The only limitations to the exercise of this
prerogative are those imposed by labor laws and the
principles of equity and substantial justice. [Peckson v.
Robinson’s Supermarket Corporation, G.R. No. 198534,
(2013)]
The exercise of management prerogative is valid
provided it is not performed in a malicious, harsh,
oppressive, vindictive or wanton manner or out of
malice or spite. [Magdadaro v. PNB, G.R. No. 166198
(2009)]
Limits to Management Prerogative
1. Good faith - So long as a company’s management
prerogatives are exercised in good faith for the
advancement of the employer’s interest and not for
the purpose of defeating or circumventing the
rights of the employees under special laws or under
 U.P. LAW BOC LABOR RELATIONS
valid agreements, this Court will uphold them.
Even as the law is solicitous of the welfare of the
employees, it must also protect the right of an
employer to exercise what are clearly management
prerogatives. The free will of management to
conduct its own business affairs to achieve its
purpose cannot be denied. [Ernesto G. Ymbong v.
ABS-CBN Broadcasting Corp., supra.]
It is incumbent upon the company to show that
decisions made under management prerogative are
in good faith and not intended to circumvent
employees’ rights. [San Miguel Brewery Sales Force
Union (PTGWO) v. Ople, G.R. No. L-53515 (1989)]
2. Without grave abuse of discretion - But, like
other rights, there are limits thereto. The
managerial prerogative to transfer personnel must
be exercised without grave abuse of discretion, bearing in
mind the basic elements of justice and fair play.
Having the right should not be confused with the
manner in which the right is exercised. [Tinio v. CA,
G.R. No. 171764 (2007)]
3. Law – In one case, a pharmaceutical company
defended its termination of rank and file employees
during a bargaining deadlock, as an exercise of
management prerogative. This was after the Labor
Secretary had assumed jurisdiction over the dispute
and enjoined the parties from “any acts which
might exacerbate the situation.”
The Court disagreed with the company’s defense,
stating that the privilege is not absolute but subject
to limitations imposed by law. In this case, it is
limited by Sec. 236(g), which gives the Secretary the
power to assume jurisdiction and resolve labor
disputes involving industries indispensable to
national interest.
The company’s management prerogatives are not
being unjustly curtailed but duly tempered by the
limitations set by law, taking into account its special
character and the particular circumstances in the
case at bench. [Metrolab Industries, Inc. v. Roldan-
Confesor, G.R. No. 108855 (2013)]
Management prerogative refers to the right of an
employer to regulate all aspects of employment,
such as the freedom to prescribe work
assignments, working methods, processes to be
followed, regulation regarding transfer of
employees, supervision of their work, lay-off and
discipline, and dismissal and recall of work.
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LABOR LAW
Although management prerogative refers to the
right to regulate all aspects of employment, it
cannot be understood to include the right to
temporarily withhold salary/wages without the
consent of the employee. To sanction such an
interpretation would be contrary to Art. 116 of the
Labor Code. [SHS Perforated Materials, Inc. v. Diaz,
G.R. No. 185814 (2010)]
4. Collective Bargaining – The CBA provisions
agreed upon by the Company and the Union
delimit the free exercise of management
prerogative. The parties in a CBA may establish
such stipulations, clauses, terms and conditions as
they may deem convenient provided these are not
contrary to law, morals, good customs, public
order or public policy. Where the CBA is clear and
unambiguous, it becomes the law between the
parties and compliance therewith is mandated by
the express policy of the law. [Goya Inc. v. Goya, Inc.,
Employees Union-FFW, G.R. No. 170054 (2013)]
5. Equity and/or Substantial Justice – The Court
recognized the inherent right of the employer to
discipline its employees but it should still ensure
that the employer exercises the prerogative to
discipline humanely and considerately, and that the
sanction imposed is commensurate to the offense
involved and to the degree of the infraction. The
discipline exacted by the employer should further
consider the employee’s length of service and the
number of infractions during his employment.
[Dongon v. Rapid Movers and Forwarders Co., Inc., G.R.
No. 163431 (2013)]
Assumption of jurisdiction by the Secretary of
Labor; an exception to management prerogative
This Court declared that it recognizes the exercise of
management prerogatives and it often declines to
interfere with the legitimate business decisions of the
employer… However, as expressed in PAL v. NLRC,
the privilege is not absolute, but subject to exceptions.
One of these exceptions is when the Secretary of Labor
assumes jurisdiction over labor disputes involving
industries indispensable to the national interest under
Art. 263(g) of the Labor Code. [University of Immaculate
Concepcion Inc. v. Sec. of Labor, G.R. No. 151379 (2005)]
 U.P. LAW BOC LABOR RELATIONS
A. Discipline
Management has the prerogative to discipline its
employees and to impose appropriate penalties on
erring workers pursuant to company rules and
regulations. [Jose P. Artificio v. NLRC, G.R. No. 172988
(2010)]
The employer’s right to conduct the affairs of his
business, according to its own discretion and judgment,
includes the prerogative to instill discipline in its
employees and to impose penalties, including dismissal,
upon erring employees. The only criterion to guide the
exercise of its management prerogative is that the
policies, rules and regulations on work-related activities
of the employees must always be fair and reasonable
and the corresponding penalties, when prescribed,
commensurate to the offense involved and to the
degree of the infraction. [Consolidated Food Corporation v.
NRLC, G.R. No. 118647 (1999); St. Michael’s Institute v.
Santos, G.R. No. 145280 (2001)]
Right to dismiss or otherwise impose disciplinary
sanctions upon an employee for just and valid cause,
pertains in the first place to the employer, as well as the
authority to determine the existence of said cause in
accordance with the norms of due process. [Makati
Haberdashery, Inc. v. NLRC, G.R. Nos. 83380-81 (1989)]
Although the right of employers to shape their own
work force,is recognized, this management prerogative
must not curtail the basic right of employees to security
of tenure. [Alert Security & Investigation Agency, Inc. v.
Saidali Pasawilan, et. al., G.R. No. 182397 (2011)]
Disciplinary action against an erring employee is a
management prerogative which, generally, is not subject
to judicial interference. However, this policy can be
justified only if the disciplinary action is dictated by
legitimate business reasons and is not oppressive.
[Areno v. Skycable, G.R. No 180302 (2010)]
Page 194 of 220
LABOR LAW
B. Transfer of Employees
An employee’s right to security of tenure does not give
him such a vested right in his position as would deprive
the company of its prerogative to change his
assignment or transfer him where he will be most
useful.
The Employer has the right to transfer or assign
Employees from one area of operation to another, or
one office to another or in pursuit of its legitimate
business interest, Provided there is no demotion in rank
or diminution of salary, benefits and other privileges
and not motivated by discrimination or made in bad
faith, or effected as a form of punishment or demotion
without sufficient cause. [Westin Phil. Plaza Hotel v.
NLRC, G.R. No. 121621 (1999)]
When the transfer is not unreasonable, or inconvenient,
or prejudicial to the employee, and it does not involve
a demotion in rank or diminution of salaries, benefits,
and other privileges, the employee may not complain
that it amounts to a constructive dismissal. [Bisig ng
Manggagawa sa TRYCO v. NLRC, G.R. No. 151309
(2008)]
It is management prerogative for employers to transfer
employees on just and valid grounds such as genuine
business necessity. [William Barroga v. Data Center College
of the Philippines, G.R. No. 174158 (2011)]
Re-assignments made by management pending
investigation of irregularities allegedly committed by an
employee fall within the ambit of management
prerogative. The purpose of reassignments is no
different from that of preventive suspension which
management could validly impose as a disciplinary
measure for the protection of the company's property
pending investigation of any alleged malfeasance or
misfeasance committed by the employee. [Ruiz v. Wendel
Osaka Realty Corp., G.R. No. 189082 (2012)]
In cases of a transfer of an employee, the rule is settled
that the employer is charged with the burden of proving
that its conduct and action are for valid and legitimate
grounds such as genuine business necessity and that the
transfer is not unreasonable, inconvenient or prejudicial
to the employee. If the employer cannot overcome this
burden of proof, the employee’s transfer shall be
tantamount to unlawful constructive dismissal.
[Jonathan Morales v. Harbor Centre Port Terminal Inc., G.R.
No. 174208 (2012)]
 U.P. LAW BOC LABOR RELATIONS
Management has the prerogative on whether or not to
renew the contract of a fixed-term employee. [Fonterra
Brands Phils., Inc. v. Largado, G.R. No. 205300 (2015)]
C. Productivity Standard
The employer has the right to demote and transfer an
employee who has failed to observe proper diligence in
his work and incurred habitual tardiness and absences
and indolence in his assigned work. [Petrophil Corporation
v. NLRC, G.R. No. L-64048 (1986)]
In the consolidated cases of Leonardo v. NLRC [G. R.
No. 125303 (2000)] and Fuerte v. Aquino [G. R. No.
126937 (2000)], the employer claimed that the
employee was demoted pursuant to a company policy
intended to foster competition among its employees.
Under this scheme, its employees are required to
comply with a monthly sales quota. Should a supervisor
such as the employee fail to meet his quota for several
consecutive months, he will be demoted, whereupon
his supervisor’s allowance will be withdrawn and be
given to the individual who takes his place. When the
employee concerned succeeds in meeting the quota
again, he is re-appointed supervisor and his allowance
is restored. The Supreme Court held that this
arrangement is an allowable exercise of company rights
since an employer is entitled to impose productivity
standards for its workers. In fact, non-compliance may
be visited with a penalty even more severe than
demotion.
D. Bonus
A bonus is "a gratuity or act of liberality of the giver
which the recipient has no right to demand as a matter
of right" [Philippine National Construction Corp. v. National
Labor Relations Commission, 345 Phil. 324, 331 (1997)]. "It
is something given in addition to what is ordinarily
received by or strictly due the recipient." The granting
of a bonus is basically a management prerogative which
cannot be forced upon the employer "who may not be
obliged to assume the onerous burden of granting
bonuses or other benefits aside from the employee's
basic salaries or wages" xxx. [Kamaya Point Hotel v.
National Labor Relations Commission, Federation of Free
Workers and Nemia Quiambao, G.R. No. 75289, (1989);
Traders Royal Bank v. NLRC, G.R. No. 120592 (1990)]
Page 195 of 220
LABOR LAW
The matter of giving a bonus over and above the
worker’s lawful salaries and allowances is entirely
dependent on the financial capability of the employer
to give it. [Kimberly-Clark Philippines, Inc. v. Dimayuga,
G.R. No. 177705 (2009)]
E. Change of Working Hours
Management retains the prerogative, whenever
exigencies of the service so require, to change the
working hours of its employees. So long as such
prerogative is exercised in good faith for the
advancement of the employer’s interest and not for the
purpose of defeating or circumventing the rights of the
employees under special laws or under valid
agreements, this Court will uphold such exercise. [Sime
Darby Pilipinas Inc. v. NLRC, G.R. No. 119205 (1998)]
F. Bonafide Occupational
Qualifications
Employment in particular jobs may not be limited to
persons of a particular sex, religion, or national origin
unless the employer can show that sex, religion, or
national origin is an actual qualification for performing
the job. The exception is is called a bona fide
occupational qualification (BFOQ). In the United
States, there are a few federal and many state job
discrimination laws that contain an exception allowing
an employer to engage in an otherwise unlawful form
of prohibited discrimination when the action is based
on a BFOQ necessary to the normal operation of a
business or enterprise. BFOQ is valid "provided it
reflects an inherent quality reasonably necessary for
satisfactory job performance."[Yrasuegui v. PAL, G.R.
No. 168081 (2008)]
The concept of a bona fide occupational qualification is
not foreign in our jurisdiction. We employ the standard
of reasonableness of the company policy which is
parallel to the bona fide occupational qualification
requirement. In Duncan Association of Detailman-PTGWO
and Pedro Tecson v. Glaxo Wellcome Philippines, Inc., we
passed on the validity of the policy of a pharmaceutical
company prohibiting its employees from marrying
employees of any competitor company. We held that
Glaxo has a right to guard its trade secrets,
manufacturing formulas, marketing strategies and other
confidential programs and information from
competitors. We considered the prohibition against
personal or marital relationships with employees of
competitor companies upon Glaxo’s employees
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

reasonable under the circumstances because

relationships of that nature might compromise the
interests of Glaxo. In laying down the assailed company
policy, we recognized that Glaxo only aims to protect
its interests against the possibility that a competitor
company will gain access to its secrets and procedures.
[Star Paper Corp. v. Simbol, G.R. No. 164774 (2006)]

A requirement that a woman employee must remain

unmarried could be justified as a "bona fide
occupational qualification," or BFOQ, where the
particular requirements of the job would justify the
same, but not on the ground of a general principle, such
as the desirability of spreading work in the workplace.
A requirement of that nature would be valid provided
it reflects an inherent quality reasonably necessary for
satisfactory job performance. [Phil. Telegraph and
Telephone Company v. NLRC, G.R. No. 118978 (1997)]

G. Post-Employment
Restrictions
In cases where an employee assails a contract
containing a provision prohibiting him or her from
accepting competitive employment as against public
policy, the employer has to adduce evidence to prove
that the restriction is reasonable and not greater than
necessary to protect the employer’s legitimate business
interests. The restraint may not be unduly harsh or
oppressive in curtailing the employee’s legitimate
efforts to earn a livelihood and must be reasonable in
light of sound public policy. [Rivera v. Solidbank, G.R.
No. 163269 (2006)]

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 U.P. LAW BOC LABOR RELATIONS
VIII. JURISDICTION
AND REMEDIES
A. Labor Arbiter
1. Jurisdiction
Except as otherwise provided under the Code the
Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide:
a. Unfair labor practices cases;
b. Termination disputes;
c. If accompanied with a claim for reinstatement,
those cases that workers may file involving wages,
rates of pay, hours of work and other terms and
conditions of employment;
d. Claims for actual, moral, exemplary and other
forms of damages arising from the employer-
employee relations;
e. Cases arising from any violation of Art. [279] of
this Code, including questions involving the
legality of strikes and lockouts;
f. Except claims for Employees Compensation,
Social Security, Medicare [Philhealth] and
maternity benefits, all other claims, arising from
employer-employee relations, including those of
persons in domestic or household service,
involving an amount exceeding five thousand
pesos (P5,000) regardless of whether accompanied
with a claim for reinstatement. [Art. 224]
g. Money claims arising out of employer-employee
relationship or by virtue of any law or contract,
involving claims for actual, moral, exemplary and
other forms of damages, as well as employment
termination of OFWs;
h. Wage distortion disputes in unorganized
establishments not voluntarily settled by the
parties. [Art. 124]
i. Enforcement of compromise agreements when
there is non-compliance by any of the parties.
[Art. 233]
j. Other cases as may be provided by law.
Requisites of LA’s jurisdiction over Money Claims
a. Money claims arose from ER-EE relations
Employer-employee relationship is a jurisdictional
requisite, absent of which, the NLRC has no
jurisdiction to hear and decide the case. [Hawaiian-
Philippine Company v. Gulmatico, G.R. No. 106231
(1994)]
Page 197 of 220
LABOR LAW
b. Money claims arose from law or contracts other
than a CBA
If money claims do not arise from ER-EE relations
Regular courts have jurisdiction
If money claims arise from ER-EE relations but by
virtue of implementation of CBA
Voluntary Arbitrator has jurisdiction
2. Versus Regional Director
[Art. 129]
Jurisdiction on Money Claims (Labor Arbiter v.
Regional Director)
A money claim arising from employer-employee
relations, except SSS, ECC/Medicare [Philhealth]
claims, is within the jurisdiction of a labor arbiter if:
a. The claim, regardless of amount, is accompanied
with a claim of reinstatement; or
b. The claim exceeds P5,000, whether or not there is
a claim for reinstatement.
The Regional Director has jurisdiction if:
a. Money claims arising out of employer-employees
relationships
b. the money claim is not accompanied by a claim for
reinstatement AND
c. the claim does not exceed P5,000, whether or not
claims do arise from ER-EE relationships
PROCEDURE BEFORE LABOR ARBITER
Where to File [Sec. 1, Rule IV, 2011 NLRC Rules of
Procedure]
All cases which Labor Arbiters have authority to hear
and decide may be filed in the Regional Arbitration
Branch (RAB) having jurisdiction over the workplace
of the complainant or petitioner
a. Workplace – place or locality where the employee
is regularly assigned at the time the cause of action
arose. It shall include the place where the employee
is supposed to report back after a temporary detail,
assignment, or travel.
b. In the case of field employees, ambulant or
itinerant workers, their workplace is (a) where they
are regularly assigned or (b) where they are
supposed to regularly receive their salaries and
wages or work instructions from, and report the
results of their assignment to their employers.
 U.P. LAW BOC LABOR RELATIONS
Some Rules on Venue
a. Exclusion. Where 2 or more RABs have
jurisdiction over the workplace of the complainant,
that first which acquired jurisdiction over the case
shall exclude others.
b. Waiver. When venue is not objected to before the
filing of position papers, such issue shall be
deemed waived.
c. Transfer. Venue of an action may be transferred
to a different Regional Arbitration Branch other
than where the complaint was filed by written
agreement of the parties or when the [NLRC] or
[LA] before whom the case is pending so orders,
upon motion by the proper party in meritorious
cases.
d. OFW Cases. Cases involving overseas Filipino
workers may be filed before the RAB having
jurisdiction over the place where the complainant
resides or where the principal office of any of the
respondents is situated, at the option of the
complainant.
NATURE OF THE PROCEEDING
Proceedings before the LA are non-litigious. The Labor
Arbiter is not bound by the technical rules of
procedure.
The Labor Arbiter shall use all reasonable means to
ascertain the facts in each speedily and objectively. [Art.
227]
3. Requirements to Perfect
Appeal to NLRC
Period of Appeal
Labor Arbiter to NLRC: Decisions, awards, or orders
of the [LA] shall be final and executory unless appealed
to the [NLRC] by any or both parties within 10 calendar
days from receipt [thereof]. [Art. 229]
Note: If the last day of the reglementary period falls on
a Sunday or a holiday, the last day shall be the next
working day.
Grounds of Appeal [Art. 229]
a. If there is prima facie evidence of abuse of
discretion on the part of the Labor Arbiter or
Regional Director;
b. If the decision, resolution or order was secured
through fraud or coercion, including graft and
corruption;
c. If made purely on questions of law; and/or
b. If serious errors in the findings of fact are raised
Page 198 of 220
LABOR LAW
which, if not corrected, would cause grave or
irreparable injury to the appellant
When Appeal is Perfected
Art. 229, par. 2 – In case of a judgment involving a
monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly
accredited by the Commission in the amount
equivalent to the monetary award in the judgment
appealed from.
It is clear from the NLRC Rules of Procedure that
appeals must be verified and certified against forum-
shopping by the parties-in-interest themselves. The
purpose of verification is to secure an assurance that the
allegations in the pleading are true and correct and have
been filed in good faith. [Antonio B. Salenga, et al. v. CA,
G.R. No. 174941 (2012)]
Note: Decisions of the Labor Arbiter are appealable to
the NLRC. Decisions by the NLRC are appealable to
the CA via Rule 65 [St. Martin’s Funeral Homes v. NLRC,
295 SCRA 494 (1998)]
Memorandum of Appeal
Art. 229, par. 5 – In all cases, the appellant shall
furnish a copy of the memorandum of appeal to the
other party who shall file an answer not later than
ten (10) calendar days from receipt thereof.
4. Reinstatement Pending
Appeal
Reinstatement Pending Appeal and Effect of
NLRC reversal of Labor Arbiter’s order of
reinstatement
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated employee, insofar
as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal. The
employee shall either be admitted back to work under
the same terms and conditions prevailing prior to his
dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The posting
of a bond by the employer shall not stay the execution
for reinstatement provided herein. [Art. 229]
Even if the order of reinstatement of the Labor Arbiter
is reversed on appeal, it is obligatory on the part of the
employer to reinstate and pay the wages of the
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

dismissed employee during the period of appeal until

reversal by the higher court.
B. National Labor Relations
On the other hand, if the employee has been reinstated
Commission (NLRC)
during the appeal period and such reinstatement order
is reversed with finality, the employee is not required to 1. Jurisdiction/Powers
reimburse whatever salary he received for he is entitled
to such, more so if he actually rendered services during NLRC en banc
the period. [Garcia v. Philippine Airlines, Inc., G.R. No. a. To promulgate rules and regulations governing the
164856 (2009)] hearing and disposition of cases 

b. To formulate policies affecting its administration
and operations 

c. To allow cases within the jurisdiction of any
division to be heard and decided by another
division 

d. To recommend appointment of a labor arbiter 


NLRC in divisions (8 divisions with 3 commissioners

each)
a. Exclusive appellate jurisdiction from decisions of
LA 
(within respective territorial jurisdiction) 

b. Over petitions for injunction or temporary
restraining order under Art. 225(e).
c. Certified cases: “national interest” labor disputes

certified (or referred) to the Commission by the
SOLE 
for compulsory arbitration 
under Art.
278 (g)

Exclusive Appellate Jurisdiction: over all cases

decided by labor arbiters [Art. 224(b)] and the DOLE
regional directors under Art. 129.

2. Remedies
Appeal: Appeal from decisions of the NLRC after
denial of Motion for Reconsideration appealed via Rule
65 to CA then Rule 45 to the SC [St. Martin’s Funeral
Homes v. NLRC, 295 SCRA 494 (1998)]

Requisites for Perfection of Appeal to the Court of

Appeals
[Rule VI, 2011 NLRC Rules of Procedure]
a. The appeal shall be:
1. Filed within the reglementary period;
2. Verified by the appellant himself in accordance
with Sec. 4, Rule 7 of the Rules of Court;
3. In the form of a memorandum of appeal
which shall state the grounds relied upon and
the arguments in support thereof, the relief
prayed for, and with a statement of the date the
appellant received the appealed decision,
resolution or order;

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 U.P. LAW BOC LABOR RELATIONS
4. In three (3) legibly typewritten or printed
copies; and
5. Accompanied by (a) proof of payment of the
required appeal fee; (b) posting of a cash or
surety bond as provided in Sec. 6 of the NLRC
Rules; and (c) proof of service upon the other
parties.
b. A mere notice of appeal without complying with
the other requisites aforestated shall not stop the
running of the period for perfecting an appeal.
c. The appellee may file with the Regional Arbitration
Branch or Regional Office where the appeal was
filed, his answer or reply to appellant’s
memorandum of appeal, not later than 10 calendar
days from receipt thereof. Failure on the part of the
appellee who was properly furnished with a copy
of the appeal to file his answer or reply within the
said period may be construed as a waiver on his
part to file the same.
d. Subject to the provisions of Art. [225] of the Labor
Code, once the appeal is perfected in accordance
with these Rules, the Commission shall limit itself
to reviewing and deciding only the specific issues
that were elevated on appeal.
EXTRAORDINARY REMEDY
Verified Petition: A party aggrieved by any order or
resolution of the Labor Arbiter, including a writ of
execution and others issued during execution
proceedings, may file a verified petition to annul or
modify the same. The petition may be accompanied by
an application for the issuance of a temporary
restraining order and/or writ of preliminary or
permanent injunction to enjoin the Labor Arbiter, or
any person acting under his/her authority, to desist
from enforcing said resolution, order or writ. [Rule XII,
Sec. 1, 2011 NLRC Rules of Procedure, as amended by
En Banc Resolution No. 07-14]
CERTIFIED CASES
Definition
Certified labor disputes are cases certified to the
Commission for compulsory arbitration under Art.
278(g) of the Labor Code. [Sec. 2, The 2011 NLRC
Rules and Procedures]
Art. 278 (g). Strikes, Picketing and Lockouts. –
When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify
Page 200 of 220
LABOR LAW
the same to the Commission for compulsory
arbitration. Such assumption or certification shall
have the effect of automatically enjoining the
intended or impending strike or lockout as specified
in the assumption or certification order.
Function of the NLRC
When sitting in a compulsory arbitration certified to by
the Secretary of Labor, the NLRC is not sitting as a
judicial court but as an administrative body charged
with the duty to implement the order of the Secretary.
Its function only is to formulate the terms and
conditions of the CBA and cannot go beyond the scope
of the order. Moreover, the Commission is further
tasked to act within the earliest time possible and with
the end in view that its action would not only serve the
interests of the parties alone, but would also have
favorable implications to the community and to the
economy as a whole. This is the clear intention of the
legislative body in enacting Art. 278 paragraph (g) of the
Labor Code, as amended by Sec. 27 of RA 6175 [Union
of Filipino Employees v. NLRC, G.R. No. 91025 (1990)]
Effects of Certification
a. Upon certification, the intended or impending
strike or lockout is automatically enjoined,
notwithstanding the filing of any motion for
reconsideration of the certification order nor the
non-resolution of any such motion which may have
been duly submitted to the Office of the Secretary
of Labor and Employment.
b. If a work stoppage has already taken place at the
time of the certification, all striking or locked out
employees shall immediately return to work and
the employer shall immediately resume operations
and readmit all workers under the same terms and
conditions prevailing before the strike or lockout.
c. All cases between the same parties, except where
the certification order specifies otherwise the issues
submitted for arbitration which are already filed or
may be filed, and are relevant to or are proper
incidents of the certified case, shall be considered
subsumed or absorbed by the certified case, and
shall be decided by the appropriate Division of the
Commission.
d. The parties to a certified case, under pain of
contempt, shall inform their counsels and the
Division concerned of all cases pending with the
Regional Arbitration Branches and the Voluntary
Arbitrators relative or incident to the certified case
before it.
e. When a certified labor dispute involves a business
entity with several workplaces located in different
regions, the Division having territorial jurisdiction
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

over the principal office of the company shall c. No motion for extension or postponement shall be
acquire jurisdiction to decide such labor dispute; entertained. [Sec. 5, Rule VIII, 2011 NLRC Rules
unless the certification order provides otherwise. and Procedures]
[Sec. 3, Rule VIII, 2011 NLRC Rules and
Procedures] Execution of Judgment
Upon issuance of the entry of judgment, the
Effects of Defiance Commission motu propio or upon motion by the
Non-compliance with the certification order of the proper party, may cause the execution of the judgment
SOLE shall be considered as an illegal act committed in the certified case. [Sec. 6, Rule VIII, 2011 NLRC
in the course of the strike or lockout and shall authorize Rules and Procedures]
the Commission to enforce the same under pain of
immediate disciplinary action, including dismissal or
loss of employment status or payment by the locking-
out employer of backwages, damages and/or other
affirmative relief, even criminal prosecution against the
liable parties.

The Commission may also seek the assistance of law

enforcement agencies to ensure compliance and
enforcement of its orders and resolutions. [Sec. 4, Rule
VIII, 2011 NLRC Rules and Procedures]

Strict Compliance of Assumption and Certification

Orders
The Secretary's assumption and certification orders
being executory in character are to be strictly complied
with by the parties even during the pendency of a
petition questioning their validity for this extraordinary
authority given by law to the Secretary of Labor is
"aimed at arriving at a peaceful and speedy solution to
labor disputes, without jeopardizing national interests."
[Union of Filipino Employees v. NLRC, G.R. No. 91025
(1990)]

Procedure in certified cases

a. When there is no need to conduct a clarificatory
hearing, the Commission shall resolve all certified
cases within 30 calendar days from receipt by the
assigned Commissioner of the complete records,
which shall include the position papers of the
parties and the order of the SOLE denying the
motion for reconsideration of the certification
order, if any.
b. Where a clarificatory hearing is needed, the
Commission shall, within 5 calendar days from
receipt of the records, issue a notice to be served
on the parties through the fastest means available,
requiring them to appear and submit additional
evidence, if any. All certified cases shall be resolved
by the Commission within 60 calendar days from
receipt of the complete records by the assigned
Commissioner.

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U.P. LAW BOC LABOR RELATIONS
C. Judicial Review of Labor
Rulings
1. Court of Appeals
APPEAL via RULE 65, RULES OF COURT
Sec. 1. Petition for certiorari. — When any
tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess its
or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there
is no appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and
praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board
or officer, and granting such incidental reliefs as law
and justice may require.
The petition shall be accompanied by a certified true
copy of the judgment, order or resolution subject
thereof, copies of all pleadings and documents
relevant and pertinent thereto, and a sworn
certification of non-forum shopping as provided in
the third paragraph of Sec. 3, Rule 46.
Sec. 2. Petition for prohibition. — When the
proceedings of any tribunal, corporation, board,
officer or person, whether exercising judicial, quasi-
judicial or ministerial functions, are without or in
excess of its or his jurisdiction, or with grave abuse
of discretion amounting to lack or excess of
jurisdiction, and there is no appeal or any other plain,
speedy, and adequate remedy in the ordinary course
of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered
commanding the respondent to desist from further
proceedings in the action or matter specified therein,
or otherwise granting such incidental reliefs as law
and justice may require.
The petition shall likewise be accompanied by a
certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings
and documents relevant and pertinent thereto, and a
sworn certification of non-forum shopping as
provided in the third paragraph of Sec. 3, Rule 46.
Page 202 of 220
LABOR LAW
Sec. 3. Petition for mandamus. — When any
tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which
the law specifically enjoins as a duty resulting from
an office, trust, or station, or unlawfully excludes
another from the use and enjoyment of a right or
office to which such other is entitled, and there is no
other plain, speedy and adequate remedy in the
ordinary course of law, the person aggrieved thereby
may file a verified petition in the proper court,
alleging the facts with certainty and praying that
judgment be rendered commanding the respondent,
immediately or at some other time to be specified by
the court, to do the act required to be done to
protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the
wrongful acts of the respondent.
2. Supreme Court
[A]ll references in the amended Sec. 9 of B.P. No. 129
to supposed appeals from the NLRC to the Supreme
Court are interpreted and hereby declared to mean and
refer to petitions for certiorari under Rule 65.
Consequently, all such petitions should hence forth be
initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief desired.
[St. Martin Funeral Home v. NLRC, G.R. No. 130866
(1998)]
RULE 45, RULES OF COURT
Sec. 1. Filing of petition with Supreme Court. —
A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of
Appeals, the Sandiganbayan, the Regional Trial
Court or other courts whenever authorized by law,
may file with the Supreme Court a verified petition
for review on certiorari. The petition shall raise only
questions of law which must be distinctly set forth.
Appeal from CA to SC should be under Rule 45
(Petition for Review on Certiorari) and not Rule 65
(Special Civil Action for Certiorari). [Sea Power Shipping
Enterprises, Inc. v. CA, G.R. No. 138270 (2001)]
Since the Court of Appeals had jurisdiction over the
petition under Rule 65, any alleged errors committed by
it in the exercise of its jurisdiction would be errors of
judgment which are reviewable by timely appeal and not
by a special civil action of certiorari. If the aggrieved
party fails to do so within the reglementary period, and
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

the decision accordingly becomes final and executory,

he cannot avail himself of the writ of certiorari, his
D. Bureau of Labor
predicament being the effect of his deliberate inaction.
[Tirazona v Phil EDS Techno-Service Inc, G.R. No. 169712
Relations (BLR)
(2009)]
1. Jurisdiction
Note: Review of decisions of the NLRC shall be done
through (in order): Art. 232. Bureau of Labor Relations. – The
1. Motion for reconsideration Bureau of Labor Relations and the Labor Relations
2. Rule 65 to the CA Divisions in the regional offices of the Department
3. Rule 45 to the SC of Labor and Employment shall have original and
exclusive authority to act, at their own initiative or
upon request of either or both parties, on all inter-
union and intra-union conflicts, and all disputes,
grievances or problems arising from or affecting
labor-management relations in all workplaces
whether agricultural or non-agricultural, except
those arising from the implementation or
interpretation of collective bargaining agreements
which shall be the subject of grievance procedure
and/or voluntary arbitration.

The Bureau shall have fifteen (15) calendar days to

act on labor cases before it, subject to extension by
agreement of the parties.

ORIGINAL JURISDICTION
a. Inter-union and intra-union disputes and other
related labor relations disputes.
b. All disputes, grievances or problems arising from
or affecting labor-management relations in all
workplaces whether agricultural or non-
agricultural, except those arising from the
implementation or interpretation of collective
bargaining agreements which shall be the subject of
grievance procedure and/or voluntary arbitration.
[Art. 232]

Note: if the complaint involves an independent union,

chartered local or worker’s association, file with the
DOLE Regional Office but if the complaint involves a
federation or an industry/national union, file with the
BLR.

Inter-Union Dispute: one which occurred between or

among legitimate labor unions involving representation
questions for purposes of collective bargaining or to
any other conflict or dispute between legitimate labor
unions [ IRR Book V, IRR Rule 1, Sec. 1 (x)]

Intra-Union Dispute: conflict within and inside a

union between and among union members including
grievances from any violation of rights and conditions
of membership or provisions from the union’s

Page 203 of 220

 U.P. LAW BOC LABOR RELATIONS LABOR LAW

constitution and by-laws and chartering of unions Appellate Jurisdiction

[D.O. No. 40-03, Rule I, Sec. 1 (bb)] The BLR Director exercises exclusive appellate
jurisdiction over:
Inter/Intra – Union Disputes a. All decisions of the Med-Arbiter are in:
1. Inter/Intra-union disputes (Note: Complaints
DO No. 040-I-15, Book V, Rule XI Sec. 1 involving Federations, National Unions, etc.
a. Cancellation of registration of a labor are filed with the Bureau pursuant to Rule XI
organization filed by its members or by another Sec. 4, formerly Sec. 5, as amended by D.O.
labor organization; 40-F-03).
b. Conduct of election of union and workers' 2. Other related labor relations disputes
association officers/nullification of election of b. All decisions from the DOLE Regional Director in
union and workers' association officers; the cases falling under their original jurisdiction as
c. Audit/accounts examination of union or enumerated [Sec. 14, Rule XI, Book V, IRR]
workers' association funds;
d. Deregistration of collective bargaining Decisions of the BLR through its appellate jurisdiction
agreements; are final and executory 10 days after receipts by the
e. Validity/invalidity of union affiliation or parties [Sec. 20, Rule XI, Book V, IRR].
disaffiliation;
f. Validity/invalidity of acceptance/non- 2. Appeals
acceptance for union membership;
g. Validity/invalidity of impeachment/expulsion Decisions of the BLR through its original jurisdiction
of union and workers' association officers and are appealable to the Secretary of Labor and
members; Employment [Sec. 15, Rule XI, Book V, IRR].
h. Validity/invalidity of the SEBA certification;
i. Opposition to application for union and CBA Decisions of the BLR in its appellate jurisdiction are
registration; final and executory unless appealed to the CA via Rule
j. Violations of or disagreements over any 65 and later to the SC via Rule 45 [Abbot Laboratories
provision in a union or workers' association Philippines, Inc. v. Abbot Laboratories Employees Union, 323
constitution and by-laws; SCRA 392 (2000)]
k. Disagreements over chartering or registration of
labor organizations and collective bargaining
agreements; 3. Administrative Functions of
l. Violations of the rights and conditions of union
or workers' association membership;
the BLR
m. Violations of the rights of legitimate labor a. Regulation of registration of the labour unions;
organizations, except interpretation of b. Keeping a registry of legitimate labor unions;
collective bargaining agreements; and c. Maintenance of a file of CBAs;
n. Such other disputes or conflicts involving the d. Maintenance of a file of all settlements or final
rights to self-organization, union membership
decisions in the SC, CA, NLRC and other agencies
and collective bargaining
on labor disputes
1. Between and among legitimate labor
organizations; or
2. Between and among members of a union
or workers' association.

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 U.P. LAW BOC LABOR RELATIONS
E.National Conciliation and
Mediation Board (NCMB)
Nature of proceedings
Conciliation and mediation is non-litigious/non-
adversarial, less expensive, and expeditious. Under this
informal set-up, the parties find it more expedient to
fully ventilate their respective positions without running
around with legal technicalities and, in the course
thereof, afford them wider latitude of possible
approaches to the problem.
Art. 228. Mandatory Conciliation and
Endorsement of Cases. –
a. Except as provided in Title VII-A, Book V of
this Code, as amended, or as may be excepted
by the Secretary of Labor and Employment, all
issues arising from labor and employment shall
be subject to mandatory conciliation-mediation.
The labor arbiter or the appropriate DOLE
agency or office that has jurisdiction over the
dispute shall entertain only endorsed or referred
cases by the duly authorized officer
b. Any or both parties involved in the dispute may
pre-terminate the conciliation-mediation
proceedings and request referral or
endorsement to the appropriate DOLE agency
or office which has jurisdiction over the dispute,
or if both parties so agree, refer the unresolved
issues to voluntary arbitration.
SENA
The Single-Entry Approach (SENA) is a prescribed 30-
day Mandatory Conciliation-Mediation Services to be
made operational through the Single Entry Approach
Desk (SEAD) for all labor and employment cases
except:
1. cases on notices of strikes or lock-outs, or on
preventive mediation cases (NCMB)
2. interpretation and implementation of CBA
(Grievance Machinery) [D.O. No. 107-10]
1. Jurisdiction of the NCMB
It is an agency attached to the DOLE principally in
charge of the settlement of labor disputes through
conciliation, mediation and of the promotion of
voluntary approaches to labor dispute prevention and
settlement. (NCMB Manual of Procedures for
Conciliation and Preventive Mediation Cases, Rule III,
sec. 1)
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LABOR LAW
Art. 261 Procedure in Collective Bargaining —
The following procedures shall be observed in
collective bargaining:
a. When a party desires to negotiate an agreement,
it shall serve a written notice upon the other
party with a statement of its proposals. The
other party shall make a reply thereto not later
than ten (10) calendar days from receipt of such
notice;
b. Should differences arise on the basis of such
notice and reply, either party may request for a
conference which shall begin not later than ten
(10) calendar days from the date of request.
c. If the dispute is not settled, the Board shall
intervene upon request of either or both parties
or at its own initiative and immediately call the
parties to conciliation meetings. The Board shall
have the power to issue subpoenas requiring the
attendance of the parties to such meetings. It
shall be the duty of the parties to participate
fully and promptly in the conciliation meetings
the Board may call;
d. During the conciliation proceedings in the
Board, the parties are prohibited from doing any
act which may disrupt or impede the early
settlement of the disputes; and
e. The Board shall exert all efforts to settle
disputes amicably and encourage the parties to
submit their case to a voluntary arbitrator.
In Collective Bargaining:
a. If the dispute is not settled, the NCMB will
intervene upon request of either party or at its own
initiative to call for conciliation with the power to
issue subpoenas requiring attendance
1. During conciliation proceedings, parties are
prohibited from doing any act which may
disrupt or impede the early settlement of the
dispute
2. NCMB will exert all efforts to settle disputes
amicable and encourage submission to a
voluntary Arbitrator [Art. 261 (c)(d)]
b. Procedure for Correction of Wage Distortion:
1. In organized establishments with CBA
i. Submit issue to grievance machinery
ii. If unresolved, refer to voluntary
arbitration who will decide within 10
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

days unless otherwise agreed upon by 3. Preventive Mediation

parties in writing
2. If unorganized establishments without CBA:
i. Submit issue before the NCMB for Note: Refer also to Sec. 3 (Action on Non-Strikeable
conciliation after endeavors to correct Issues) & Sec. 4 (Notice Converted to Preventive
have failed Mediation) of Rule V of the NCMB Manual of
ii. If not fruitful within 10 days, refer to Procedure for Conciliation and Preventive Mediation
the NLRC for arbitration to be decided Cases involving non-strikeable issues.
within 20 days from submission [Rule
VII, Rules of Procedure of Minimum Definition
Wage Fixing] Sec. 1(20), Rule III, NCMB Manual of
Procedure for Conciliation and Preventive
Mediation Cases. Preventive Mediation Cases
2. Conciliation v. Meditation — refer to the potential labor disputes which are the
subject of a formal or informal request for
Conciliation Mediation conciliation and mediation assistance sought by
Both refer to a process where a third person called a either or both parties or upon the initiative of the
Conciliator/Mediator intervenes in a dispute to NCMB to avoid the occurrence of actual labor
reconcile differences or persuade them to adjust or disputes.
settle their dispute
C-M facilitates Preventive mediation case — refers to potential or
C-M assists parties to
disputants to keep things brewing labor dispute which is the subject of a formal
voluntarily reach
calm, delivers messages or informal request for conciliation and mediation
mutually acceptable
back and forth between assistance sought by either or both parties in order to
settlement
the parties. remedy, contain or prevent its degeneration into a full
[Conciliation-Mediation, DOLE – NCMB Website, blown dispute through amicable settlement. It can be
available at: http://ncrwp.ncmb.ph/?page_id=99] initiated by:
a. By filing a notice or request of preventive
Conciliator-Mediator [C-M] — Official of the mediation; or
NCMB whose principal function is to settle and dispose b. By conversion of the notice of strike/lockout into
potential and actual labor disputes through conciliation at preventive mediation case
and preventive mediation including the promotion and
encouragement of voluntary approaches to labor Note: If the subject of the strike is non-strikeable, the
disputes prevention and settlement. (Sec. 1, Rule III, NCMB can motu-proprio convert the notice into
NCMB Manual of Procedure for Conciliation and preventive mediation or refer the issues to voluntary
Preventive Mediation Cases) arbitration

Pre-Termination of Conciliation-Mediation: Any or

both parties in the dispute may pre-terminate the
proceedings and request referral or endorsement to the
appropriate DOLE agency or office with jurisdiction or
to the voluntary arbiter if both parties agreed.

Privileged Communication not Available as

Evidence: Any statement made in conciliation
proceedings shall be treated as privileged
communication and shall not be used as evidence in the
NLRC. Conciliators and similar may not testify in any
court or body regarding any matter during the
conciliation proceedings. (D.O. No. 40-03, Rule XXII,
Sec. 2)

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 U.P. LAW BOC LABOR RELATIONS
F. DOLE Regional Directors
1. Jurisdiction
The DOLE Regional Directors shall have original and
exclusive jurisdiction over:
a. Labor standards enforcement cases under Art. 128;
Note: as the duly authorized representative of the
SOLE
b. Small money claims from labor standards violations
not exceeding P5,000 and not accompanied with a
claim for reinstatement under Art. 129;
c. Operational safety and health conditions (can order
stoppage or suspension of operations) [Art. 128;
Bk. IV, Rule II, Sec. 8];
d. Registration of unions and cancellations thereof,
cases filed against unions and other labor relations
related cases [Sec. 4, Rule XI (renumbered, D.O.
40-F-03]
Note: only if against an independent labor union,
chartered local or workers’ association;
e. Complaints against private recruitment and
placement agencies (PRPAs) for local employment
[Secs. 45/46, D.O. 141-14]; and
f. Cases submitted to voluntary arbitration in their
capacity as Ex Officio Voluntary Arbiters under D.O
83-07 (2007)
Note: The DOLE Regional Director, as the duly
authorized representative of the SOLE, also has
visitorial and enforcement power under Art. 37, Art.
128 (have access to employer’s records and premises
with right to copy or investigate to determine violations
of law) and Art. 289 (where it can inquire into the
financial activities of any legitimate labor organization
and examine their books and records to determine
compliance with the law if requested by at least 20% of
total membership).
Appeal: Appeal of decisions from visitorial and
enforcement power to the SOLE within 10 calendar
days from receipt thereof [Rule IV, sec. 1, Rules on
Disposition of Labor Standard Cases in the Regional
Offices)
2. Recovery/Adjudicatory Power
Small money claims
Art. 129. Recovery of Wages, Simple Money
Claims and Other Benefits. – Upon complaint of
any interested party, the Regional Director of the
Department of Labor and Employment or any of
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LABOR LAW
the duly authorized hearing officers of the
Department is empowered, through summary
proceeding and after due notice, to hear and decide
any matter involving the recovery of wages and
other monetary claims and benefits, including legal
interest, owing to an employee or person employed
in domestic or household service or househelper
under this Code, arising from employer-employee
relations: Provided, That such complaint does not
include a claim for reinstatement: Provided, further,
That the aggregate money claims of each employee
or househelper do not exceed five thousand pesos
(P5,000).
The Regional Director or hearing officer shall decide
or resolve the complaint within thirty (30) calendar
days from the date of the filing of the same.
Any sum thus recovered on behalf of any employee
or househelper pursuant to this Art. shall be held in
a special deposit account by, and shall be paid, on
order of the Secretary of Labor and Employment or
the Regional Director directly to the employee or
househelper concerned.
Any such sum not paid to the employee or
househelper, because he cannot be located after
diligent and reasonable effort to locate him within a
period of three (3) years, shall be held as a special
fund of the Department of Labor and Employment
to be used exclusively for the amelioration and
benefit of workers.
Any decision or resolution of the Regional Director
or hearing officer pursuant to this provision may be
appealed on the same grounds provided in Article
223 of this Code, within five (5) calendar days from
receipt of a copy of said decision or resolution, to
the National Labor Relations Commission which
shall resolve the appeal within ten (10) calendar days
from the submission of the last pleading required or
allowed under its rules.
The Secretary of Labor and Employment or his duly
authorized representative may supervise the
payment of unpaid wages and other monetary claims
and benefits, including legal interest, found owing to
any employee or househelper under this Code.
Note: See also discussion in VI.F. on Money Claims
arising from Employer-Employee Relationship
 U.P. LAW BOC LABOR RELATIONS
Period of Appeal to NLRC: Decisions of the
Regional director on recovery of wages, simple money
claims and other benefits, shall be final and executory
unless appealed within 5 days from receipt thereof.
[Art. 129]
Definition: Recovery/adjudicatory power is the power
of the Regional Director or any duly authorized hearing
officer of DOLE to adjudicate on recovery of wages of
employees/househelpers employed in a domestic
household for claims not exceeding P5,000 and without
seeking reinstatement. [Art. 129].
If any of the requisites are missing, the Labor Arbiter
shall have jurisdiction over claims arising from ER-EE
relations except claims for employees’ compensation,
SSS, PhilHealth and maternity benefits [Art. 224]
Money claims should be filed within 3 years from the
time the cause of action accrued [Art. 306]
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LABOR LAW
G.DOLE Secretary
POWERS
1. Visitorial (access to employer’s records and
premises and to copy therefrom) and enforcement
powers (to question any employee and investigate
any fact which may be necessary to determine
violations)
2. Power to suspend effects of termination
3. Assumption of jurisdiction
4. Appellate jurisdiction
5. Voluntary arbitration powers
1. Visitorial and Enforcement
Powers
Art. 128. Visitorial and Enforcement Power– The
Secretary of Labor and Employment or his duly
authorized representatives, including labor
regulation officers, shall have access to employer’s
records and premises at any time of the day or night
whenever work is being undertaken therein, and the
right to copy therefrom, to question any employee
and investigate any fact, condition or matter which
may be necessary to determine violations or which
may aid in the enforcement of this Code and of any
labor law, wage order or rules and regulations issued
pursuant thereto.
Notwithstanding the provisions of Arts. 129 and
[224] of this Code to the contrary, and in cases where
the relationship of employer-employee still exists,
the Secretary of Labor and Employment or his duly
authorized representatives shall have the power to
issue compliance orders to give effect to the labor
standards provisions of this Code and other labor
legislation based on the findings of labor
employment and enforcement officers or industrial
safety engineers made in the course of inspection.
The Secretary or his duly authorized representatives
shall issue writs of execution to the appropriate
authority for the enforcement of their orders, except
in cases where the employer contests the findings of
the labor employment and enforcement officer and
raises issues supported by documentary proofs
which were not considered in the course of
inspection.
Art. 37. Visitorial Power. – The Secretary of Labor
or his duly authorized representatives may, at any
time, inspect the premises, books of accounts and
records of any person or entity covered by this Title,
 U.P. LAW BOC LABOR RELATIONS
require it to submit reports regularly on prescribed
forms, and act on violation of any provisions of this
Title.
Art. 289. Visitorial Power. –The Secretary of Labor
and Employment or his duly authorized
representative is hereby empowered to inquire into
the financial activities of legitimate labor
organizations upon the filing of a complaint under
oath and duly supported by the written consent of at
least twenty percent (20%) of the total membership
of the labor organization concerned and to examine
their books of accounts and other records to
determine compliance or non-compliance with the
law and to prosecute any violations of the law and
the union constitution and by-laws: Provided, That
such inquiry or examination shall not be conducted
during the sixty (60)-day freedom period nor within
the thirty (30) days immediately preceding the date
of election of union officials.
The visitorial and enforcement powers of the DOLE
Regional Director to order and enforce compliance
with labor standard laws can be exercised even where
the individual claim exceeds P5,000.00. As the duly
authorized representative of respondent Secretary of
Labor, and in the lawful exercise of the Secretary's
visitorial and enforcement powers under Article 128 of
the Labor Code, respondent Regional Director had
jurisdiction to issue compliance orders [Cirineo Bowling
Plaza, Inc. v. Sensing, G.R. No. 146572 (2005)].
If a complaint is brought before the DOLE to give
effect to the labor standards provisions of the Labor
Code or other labor legislation, and there is a finding by
the DOLE that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC. The findings of the DOLE,
however, may still be questioned through a petition
for certiorari under Rule 65 of the Rules of Court […]
The DOLE's labor inspection program can now
proceed without being sidetracked by unscrupulous
employers who could render nugatory the "expanded
visitorial and enforcement power of the DOLE granted
by RA 7730 . . . by the simple expedient of disputing
the employer-employee relationship [and] force the
referral of the matter to the NLRC. [People's Broadcasting
Service v. Secretary of the Department of Labor and
Employment, G.R. No. 179652 (2012 Resolution)]
Page 209 of 220
LABOR LAW
The factual findings of the SOLE or the Regional
Directors made in the exercise of their visitorial and
enforcement powers are binding on Labor Arbiters and
the NLRC under the doctrine of res judicata [Norkis
Trading v. Buenavista, G.R. No. 182018, (2012)]
2. Power to Suspend/Effects of
Termination
Art. 292 (b). Visitorial and Enforcement Power
– The Secretary of the Department of Labor and
Employment may suspend the effects of the
termination pending resolution of the dispute in the
event of a prima facie finding by the appropriate
official of the Department of Labor and
Employment before whom such dispute is pending
that the termination may cause a serious labor
dispute or is in the implementation of a mass lay-off.
The SOLE may suspend the effects of a termination
pending resolution of the dispute in the event of a prima
facie finding by the appropriate official of the DOLE
that the dispute is:
a. The termination may cause a serious labor dispute
(may or may not be a strike or a lockout)
b. The termination is in implementation of a mass lay-
off
3. Assumption of jurisdiction
When May the SOLE Assume Jurisdiction
Art. 278 (g). Strikes, Picketing and Lockouts. –
When in his opinion, there exist a labor dispute
causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
SOLE may assume jurisdiction over the dispute and
decide it or certify the same to the Commission for
compulsory arbitration.
Requisites for Assumption of Jurisdiction assume
jurisdiction provided that:
a. Both parties have requested the SOLE to assume
jurisdiction; or
b. After a conference called by the Office of the
SOLE on the propriety of its issuance, motu proprio
or upon a request or petition by either parties to
the labor dispute [Book V, IRR Rule XXII, sec. 15,
IRR as amended by D.O. No. 40-H-13 s 2013]
 U.P. LAW BOC LABOR RELATIONS
Industries Indispensable to the National Interest
a. Hospital sector
b. Electric power industry
c. Water supply service, to exclude small water supply
services such as bottling and refilling stations
d. Air traffic control
e. Other industries as may be recommended by the
National Tripartite Industrial Peace Council
(TIPC) [Sec. 16, Rule XXII, Book V, IRR as
amended by D.O. No. 40-H-13]
Who determines industries indispensable to the
national interest [Art. 278(g)]
a. Secretary of Labor and Employment
b. President
Power of the Secretary of Labor to Assume
Jurisdiction (alternative)
a. Decide the labor dispute himself/herself.
b. Certify the labor dispute to the NLRC for
compulsory arbitration.
Scope: The authority of the Secretary to assume
jurisdiction over a labor dispute includes and extends to
all questions and controversies arising from such labor
dispute. The power is plenary and discretionary in
nature to enable him to effectively and efficiently
dispose of the dispute. [Philcom Employees Union v.
Philippine Global Communications, 495 SCRA 214 (2006)]
Powers of the President (Not precluded by the
powers of the Secretary of Labor)
a. Determine the industries indispensable to the
national interest
b. Assume jurisdiction over any such labor dispute to
settle or terminate such dispute
Effects of Assumption of Jurisdiction: automatically
enjoins intended or impending strike or lockout. If one
has already taken place at the time of assumption or
certification, all striking or locked out employees shall
immediately return-to-work and the employer shall
immediately resume operations and readmit all workers
under the same terms and conditions prevailing before
the strike or lockout. [Art. 278 (g)]
The SOLE may also determine the retroactivity of
arbitral awards pursuant to power to assume
jurisdiction as part of his/her plenary powers to
determine the effectivity thereof in absence of specific
provision of law [LMG Chemicals Corp. v. Sec. of Labor and
Employment, 356 SCRA 577 (2001)]
Page 210 of 220
LABOR LAW
a. Automatic Injunction of Intended
Of Impending Strike or Lockout
Art. 278 (g). Strikes, Picketing and Lockouts. –
[S]uch assumption or certification shall have the
effect of automatically enjoining the intended or
impending strike or lockout as specified in the
assumption or certification order. […]
b. Return-to-work and readmission if
strike or lockout has already taken
place
Art. 278 (g). Strikes, Picketing and Lockouts. –
[I]f one has already taken place at the time of
assumption or certification, all striking or locked out
employees shall immediately return-to-work and the
employer shall immediately resume operations and
readmit all workers under the same terms and
conditions prevailing before the strike or lockout.
[…]
Nature of return-to-work order
[T]he return-to-work order not so much confers a right
as it imposes a duty; and while as a right it may be
waived, it must be discharged as a duty even against the
worker's and/or employers’ will. Returning to work in
this situation is not a matter of option or voluntariness
but of obligation. The worker must return to his job
together with his co-workers so the operations of the
company can be resumed and it can continue serving
the public and promoting its interest. That is the real
reason such return can be compelled. So imperative is
the order in fact that it is not even considered violative
of the right against involuntary servitude. [Kaisahan ng
Mga Manggagawa sa Kahoy v. Gotamco Sawmills, G.R. No.
L-1573 (1948)]
Note: It must be strictly complied with even during the
pendency of any petition questioning its validity.
[Manila Hotel Employees Association and its Members v.
Manila Hotel Corp., 517 SCRA 349 (2007)]; the purpose
of SOLE’s extraordinary power is aimed at arriving at a
peaceful and speedy solution to labor disputes without
jeopardizing national interest [Union of Filipro Employees-
Drug v. Nestle, 499 SCRA 521 (2006)]
The SOLE also has plenary powers to determine the
retroactivity of its arbitral awards [LMG Chemicals Corp.
v. Sec. of Labor and Employment, 356 SCRA 577 (2001)]
 U.P. LAW BOC LABOR RELATIONS
c. Immediately Executory
The assumption and certification orders are executory
in character and must be strictly complied with by the
parties. [Allied Banking v. NLRC, G.R. No. 116128
(1996)]
Strikes and lockouts in hospitals, clinics and
similar medical institutions
It shall be the duty of the striking union or locking-out
employer to provide and maintain an effective skeletal
workforce of medical and other health personnel,
whose movement and services shall be unhampered
and unrestricted, as are necessary to insure the proper
and adequate protection of the life and health of its
patients, most especially emergency cases, for the
duration of the strike or lockout.
In such cases, therefore, the Secretary of Labor and
Employment may immediately assume, within twenty
four (24) hours from knowledge of the occurrence of
such a strike or lockout, jurisdiction over the same or
certify it to the Commission for compulsory arbitration.
[Art. 278, par. 2]
Rationale: The highest respect is accorded to the right of
patients to life and health.
Effect of defiance of assumption or certification
orders
Par. 2, Art. 279 (a). Prohibited Activities. – No
strike or lockout shall be declared after assumption
of jurisdiction by the President or the Minister or
after certification or submission of the dispute to
compulsory or voluntary arbitration or during the
pendency of cases involving the same grounds for
the strike or lockout.
Strike/lockout becomes illegal
A strike undertaken despite the issuance by the
Secretary of Labor of an assumption or certification
order becomes a prohibited activity and thus, illegal,
pursuant to Art. 279(a) of the Labor Code. [Allied
Banking v. NLRC, G.R. No. 116128 (1996)]
See notes on Liabilities of employer, union officers,
and ordinary workers under illegal strike.
Page 211 of 220
LABOR LAW
SUMMARY OF LIABILITIES OF
PARTICIPANTS IN AN ILLEGAL
STRIKE/LOCKOUT [Art. 279]
1. Employer in an illegal lockout – workers
terminated due to illegal lockout shall be entitled to
reinstatement plus full backwages.
2. Union officers who knowingly participated in
illegal strike – deemed to have lost their
employment
3. Union officers who knowingly participated in
illegal acts during a LAWFUL strike – deemed
to have lost their employment.
4. Ordinary workers – deemed to have lost their
employment only if they knowingly participated in
illegal acts.
Stricter penalties for non-compliance with orders,
prohibitions, and/or injunctions issued by the
Secretary of Labor in strikes involving hospitals,
clinics, and similar medical institutions
1. Immediate disciplinary action against both union
and employer
2. Dismissal/loss of employment for members of the
striking union
3. Payment by employer of backwages, damages, and
other affirmative relief
4. Criminal prosecution against either or both the
union and employer
INJUNCTIONS
Art. 266. Injunction Prohibited. – No temporary
or permanent injunction or restraining order in any
case involving or growing out of labor disputes shall
be issued by any court or other entity, except as
otherwise provided in Art.s [225] and [279] of this
Code.
General Rule: Injunctions are prohibited.
Exceptions: Those provided under Art. 225 (referring to
the Powers of the NLRC) in connection with Art.
279(on Prohibited Activities) under the Labor Code.
Findings of fact by the NLRC for an Injunction to
issue
Art. 225 - (e) To enjoin or restrain any actual or
threatened commission of any or all prohibited or
unlawful acts or to require the performance of a
particular act in any labor dispute which, if not
restrained or performed forthwith, may cause grave
or irreparable damage to any party or render
ineffectual any decision in favor of such
 U.P. LAW BOC LABOR RELATIONS
party: Provided, That no temporary or permanent
injunction in any case involving or growing out of a
labor dispute as defined in this Code shall be issued
except after hearing the testimony of witnesses, with
opportunity for cross-examination, in support of the
allegations of a complaint made under oath, and
testimony in opposition thereto, if offered, and only
after a finding of fact by the Commission, to the
effect:
(1) That prohibited or unlawful acts have been
threatened and will be committed unless restrained,
or have been committed and will be continued
unless restrained, but no injunction or temporary
restraining order shall be issued on account of any
threat, prohibited or unlawful act, except against the
person or persons, association or organization
making the threat or committing the prohibited or
unlawful act or actually authorizing or ratifying the
same after actual knowledge thereof;
(2) That substantial and irreparable injury to
complainant's property will follow;
(3) That as to each item of relief to be granted,
greater injury will be inflicted upon complainant by
the denial of relief than will be inflicted upon
defendants by the granting of relief;
(4) That complainant has no adequate remedy at law;
and
(5) That the public officers charged with the duty to
protect complainant's property are unable or
unwilling to furnish adequate protection.
Prohibited Activities [Art. 279]
1. No labor organization or employer shall declare a
strike or lockout without first having bargained
collectively in accordance with Title VII of this
Book or without first having filed the notice
required in the preceding Art. or without the
necessary strike or lockout vote first having been
obtained and reported to the Ministry [DOLE].
No strike or lockout shall be declared after
assumption of jurisdiction by the President or the
Minister or after certification or submission of the
dispute to compulsory or voluntary arbitration or
during the pendency of cases involving the same
grounds for the strike or lockout.
Any worker whose employment has been
terminated as a consequence of any unlawful
Page 212 of 220
LABOR LAW
lockout shall be entitled to reinstatement with full
backwages. Any union officer who knowingly
participates in an illegal strike and any worker or
union officer who knowingly participates in the
commission of illegal acts during a strike may be
declared to have lost his employment status:
Provided, That mere participation of a worker in a
lawful strike shall not constitute sufficient ground
for termination of his employment, even if a
replacement had been hired by the employer
during such lawful strike.
2. No person shall obstruct, impede, or interfere with,
by force, violence, coercion, threats or
intimidation, any peaceful picketing by employees
during any labor controversy or in the exercise of
the right to self-organization or collective
bargaining, or shall aid or abet such obstruction or
interference.
3. No employer shall use or employ any strike-
breaker, nor shall any person be employed as a
strike-breaker.
4. No public official or employee, including officers
and personnel of the New Armed Forces of the
Philippines or the Integrated National Police, or
armed person, shall bring in, introduce or escort in
any manner, any individual who seeks to replace
strikers in entering or leaving the premises of a
strike area, or work in place of the strikers. The
police force shall keep out of the picket lines unless
actual violence or other criminal acts occur therein:
Provided, That nothing herein shall be interpreted
to prevent any public officer from taking any
measure necessary to maintain peace and order,
protect life and property, and/or enforce the law
and legal order.
5. No person engaged in picketing shall commit any
act of violence, coercion or intimidation or
obstruct the free ingress to or egress from the
employer’s premises for lawful purposes, or
obstruct public thoroughfares.
“INNOCENT BYSTANDER RULE”
Test to Determine if a Party is an “Innocent
Bystander”
An "innocent bystander," who seeks to enjoin a labor
strike, must satisfy the court that aside from the
grounds specified in Rule 58 of the Rules of Court, it is
entirely different from, without any connection
whatsoever to, either party to the dispute and, its
interests are totally foreign to the context thereof.
[MSF Tire and Rubber Inc. v. CA, G.R. No. 128632
(1999)]
 U.P. LAW BOC LABOR RELATIONS
Injunction Available to Innocent Bystanders
An innocent by-stander is entitled to injunction if it is
affected by the activities of a picketing union.
Rationale
The right [to picket] may be regulated at the instance of
[…] `innocent bystanders' if it appears that the
inevitable result of its exercise is [1] to create an
impression that a labor dispute with which they have no
connection or interest exists between them and the
picketing union or [2] constitute an invasion of their
rights. [Liwayway Publishing v. Permanent Concrete Worker's
Union, G.R. No. L-25003 (1981)]
TRO
Art. 225, last 2 pars. –
[…]That if a complainant shall also allege that,
unless a temporary restraining order shall be issued
without notice, a substantial and irreparable injury to
complainant's property will be unavoidable, such a
temporary restraining order may be issued upon
testimony under oath, sufficient, if sustained, to
justify the Commission in issuing a temporary
injunction upon hearing after notice. Such a
temporary restraining order shall be effective for no
longer than twenty (20) days and shall become void
at the expiration of said twenty (20) days. No such
temporary restraining order or temporary injunction
shall be issued except on condition that complainant
shall first file an undertaking with adequate security
in an amount to be fixed by the Commission
sufficient to recompense those enjoined for any loss,
expense or damage caused by the improvident or
erroneous issuance of such order or injunction,
including all reasonable costs, together with a
reasonable attorney's fee, and expense of defense
against the order or against the granting of any
injunctive relief sought in the same proceeding and
subsequently denied by the Commission.
The undertaking herein mentioned shall be
understood to constitute an agreement entered into
by the complainant and the surety upon which an
order may be rendered in the same suit or
proceeding against said complainant and surety,
upon a hearing to assess damages, of which hearing,
complainant and surety shall have reasonable notice,
the said complainant and surety submitting
themselves to the jurisdiction of the Commission for
that purpose. But nothing herein contained shall
deprive any party having a claim or cause of action
under or upon such undertaking from electing to
Page 213 of 220
LABOR LAW
pursue his ordinary remedy by suit at law or in
equity:Provided, further, That the reception of evidence
for the application of a writ of injunction may be
delegated by the Commission to any of its Labor
Arbiters who shall conduct such hearings in such
places as he may determine to be accessible to the
parties and their witnesses and shall submit
thereafter his recommendation to the Commission.
4. Appellate Jurisdiction
Orders issued by the duly authorized representative
of the SOLE under Art. 128 may be appealed to
the latter.
Denial of application for union registration or
cancellation of union registration originally
rendered by the BLR may be appealed to the SOLE
(if originally rendered by the Regional Office,
appeal should be made to the BLR)
POEA
Decisions of the Med-Arbiter in certification election
cases are appealable to the SOLE [Art. 272] (decisions
of med-arbiters in intra-union disputes are appealable
to the BLR [Sec. 15, Rule XI, Book V, IRR])
5. Voluntary Arbitration Powers
Art. 278 (h). Strikes, Picketing and Lockouts. –
Before or at any stage of the compulsory arbitration
process, the parties may opt to submit their dispute
to voluntary arbitration
Sec. 15, Rule XXII, Book V. Assumption by the
Secretary of Labor and Employment. – …
parties to the case may agree at any time to submit
the dispute to the SOLE or his/her duly authorized
representative as Voluntary Arbitrator…
DOLE Circular No. 1 Series of 2006. – …this
administrative procedure for the voluntary
settlement of labor disputes is hereby established:
1. Either or both the employer and the certified
collective bargaining agent (or representative
of the employees where there is no certified
bargaining agent) may voluntarily bring to the
Office of the SOLE through a REQUEST
FOR INTERVENTION, any potential or
ongoing dispute defined below.
U.P. LAW BOC LABOR RELATIONS
A potential or ongoing dispute refers to:
a. a live and active dispute;
b. that may lead to a strike or lockout or to
massive labor unrest;
 dispute;
c. is not the subject of any complaint or notice
of strike or lockout at the time a
REQUEST FOR INTERVENTION is
made.
This recourse is separate from the established
dispute resolution modes of mediation,
conciliation and arbitration under the Labor
Code, and is an alternative to other voluntary
modes of dispute resolution such as the
voluntary submission of a dispute to the
Regional Director for mediation, to the
NCMB for preventive mediation, or to the
intervention of a regional or local tripartite
peace council for the same purpose.
2. All REQUESTS shall be in writing and filed
with the Office of the Secretary. A REQUEST
shall state:
a. the name and address of the employer;
b. the name of the certified bargaining
agent, or the employee representative
duly designated in writing by a majority of
the employees where there is no
collective bargaining agent;
c. the number of employees affected by the
potential or ongoing dispute; and d. a
brief description of the potential or
ongoing dispute.
3. Upon receipt of the REQUEST, the Office of
the Secretary shall forthwith notify the parties
and invite them for conference. The
conference for REQUESTS coming from the
National Capital Region, Regions III, IV-A or
IV- B shall be held at the Office of the
Secretary of Labor and Employment unless the
Secretary otherwise directs. The conference for
REQUESTS coming from the other regions
shall be conducted by the Regional Director
for the Secretary.
4. The Office of the Secretary or the Regional
director, in the proper case, shall proceed to
intervene after the parties shall have
manifested that;
a. they voluntarily submit their potential or
ongoing dispute to intervention by the
Office of the Secretary of Labor and
Employment;
Page 214 of 220
LABOR LAW
b. there is no pending notice of strike or
lockout or any related complaint in
relation with their potential or ongoing
c. they shall refrain from any strike or
lockout or any form of work stoppage or
from filing any related complaint while
the SOLE’s intervention is in effect; and
d. they shall abide by the agreement reached,
whose terms may be enforced through
the appropriate writs issued by the SOLE
All agreements settling the dispute shall
be in writing and signed by the parties as
well as the official who mediated the
dispute.
5. The parties and officials or employees of the
DOLE who took part in the proceedings
shall not testify in any court or body
regarding the disclosures, submissions or
positions made by the parties in these
proceedings.
a. If the intervention fails, either or both
parties may avail themselves of the
remedies provided under the Labor Code.
Alternatively, the parties may submit their
dispute to the Office of the Secretary for
voluntary arbitration. Such voluntary
arbitration shall be limited to the issues
defined in the parties’ submission to
voluntary arbitration agreement and shall
be decided on the basis of the parties’
position papers and submitted evidence.
The Office of the Secretary shall resolve
the dispute within sixty (60) days from the
parties’ submission of the dispute for
resolution.
b. This circular shall take effect fifteen (15)
days after publication in a newspaper of
general publication. Done in the City of
Manila, Philippines, 11 August 2006.
Administrative Intervention for Dispute
Avoidance: separate from established modes of
mediation, conciliation and arbitration and is an
alternative to other voluntary modes of dispute
resolution [DOLE Circular No. 1, series of 2006]
Pre-Requisite for the Intervention by the SOLE:
The parties must have manifested that:
a. They voluntarily submit their potential or ongoing
dispute to intervention by the Office of the SOLE;
 U.P. LAW BOC LABOR RELATIONS
b. No pending notice of strike or lockout or any
related complaint in relation to their potential or
ongoing dispute;
c. They shall refrain from any strike or lockout or any
form of work stoppage or filing any related
complaint while the SOLE’s intervention is in
effect;
d. They shall abide by the agreement reached whose
terms may be enforced through the appropriate
writs issued by the SOLE;
Note: DOLE Regional Directors and Assistant Regional
Directors may act as ex-officio voluntary arbitrators
(D.O No. 83-07, 2007)
6. Remedies
The aggrieved party from a decision of the SOLE may
file one motion for reconsideration within ten (10) days
from receipt thereof.
If the motion for reconsideration is denied, the party
may appeal via Rule 65 to the CA 60 days from receipt
of the denial. Upon denial, the party may proceed via
Rule 45 to the SC. [Rule 65, ROC; St. Martin Funeral
Home v. NLRC, G.R. No. 130866 (1998)]
Clearly, before a petition for certiorari under Rule 65 of
the Rules of Court may be availed of, the filing of a
motion for reconsideration is a condition sine qua non
to afford an opportunity for the correction of the error
or mistake complained of. So also, considering that a
decision of the Secretary of Labor is subject to judicial
review only through a special civil action of certiorari
and, as a rule, cannot be resorted to without the
aggrieved party having exhausted administrative
remedies through a motion for reconsideration, the
aggrieved party, must be allowed to move for a
reconsideration of the same so that he can bring a
special civil action for certiorari before the Supreme
Court. [PIDLTRANCO Service Enterprises Inc v. PWU –
AGLO, G.R. No. 180962 (2014)]
Page 215 of 220
LABOR LAW
H. Grievance Machinery
Grievance is any question by either the ER or the
union regarding the interpretation or application of the
CBA or company personnel policies or any claim by
either party that the other party is violating any
provisions of the CBA or company personnel policies.
It is a complaint or dissatisfaction arising from the
interpretation or implementation of the CBA and those
arising from interpretation or enforcement of personnel
policies.
Grievance Machinery
It refers to the mechanism for the adjustment and
resolution of grievances. It is part of the continuing
process of collective bargaining, and is contained in the
CBA
GRIEVANCE PROCEDURE [ART. 273]
The parties to a Collective Bargaining Agreement shall:
1. Include provisions that will ensure the mutual
observance of its terms and conditions.
2. Establish a machinery for the adjustment and
resolution of grievances arising from:
a. The interpretation or implementation of their
CBA; and
b. those arising from the interpretation or
enforcement of company personnel policies.
All grievances submitted to the grievance machinery
which are not settled within 7 calendar days from the
date of its submission shall be automatically referred to
voluntary arbitration prescribed in the CBA. [Art. 273]
Note: Grievance procedure is part of the continuous
process of collective bargaining. It is intended to
promote a friendly dialogue between labor and
management as a means of maintaining industrial peace.
[Master Iron Labor Union v. NLRC, G.R. No. 92009
(1993)]
No particular setup for a grievance machinery is
required by law. [Art. 273] [...] provides for only a single
grievance machinery in the company to settle problems
arising from interpretation or implementation of their
collective bargaining agreement and those arising from
the interpretation or enforcement of company
personnel policies. [Caltex Refinery Employees Association
v. Brillantes, G.R. No. 123782 (1997)]
 U.P. LAW BOC LABOR RELATIONS
I. Voluntary Arbitrator
Automatic Referral If Grievance Machinery Fails
All grievances submitted to the grievance machinery
which are not settled within 7 calendar days from the
date of its submission shall automatically be referred to
voluntary arbitration prescribed in the CBA. [Art. 273]
Constitutional Basis
Sec. 3, Art. XIII, 1987 Constitution - The State shall
promote the principle of shared responsibility between
workers and employers and the preferential use of
voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.
Who is a voluntary arbitrator
A “voluntary arbitrator” is any person accredited by the
[National Conciliation and Mediation Board] as such,
or any person named or designated in the Collective
Bargaining Agreement by the parties to act as their
Voluntary Arbitrator, or one chosen, with or without
the assistance of the National Conciliation and
Mediation Board, pursuant to a selection procedure
agreed upon in the Collective Bargaining Agreement, or
any official that may be authorized by the Secretary of
Labor and Employment to act as Voluntary Arbitrator
upon the written request and agreement of the parties
to a labor dispute [Art. 219 (n)]
Provision for Voluntary Arbitration in the CBA
1. Parties to a CBA shall:
a. Name and designate in advance a Voluntary
Arbitrator or panel of Voluntary Arbitrators,
OR
b. Include in the agreement a procedure for the
selection of such Voluntary Arbitrator or panel
of Voluntary Arbitrators, preferably from the
listing of qualified Voluntary Arbitrators duly
accredited by the Board.
2. In case the parties fail to select a Voluntary
Arbitrator or panel of Voluntary Arbitrators, the
Board shall designate the Voluntary Arbitrator or
panel of Voluntary Arbitrators, as may be
necessary, pursuant to the selection procedure
agreed upon in the [CBA], which shall act with the
same force and effect as if the has been selected by
the parties as described above. [Art. 273]
Voluntary Arbitration as a Condition Precedent
The stipulation to refer all future disputes to an
arbitrator or to submit an ongoing dispute to one is
valid. Being part of a contract between the parties, it is
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binding and enforceable in court in case one of them
neglects, fails or refuses to arbitrate. Going a step
further, in the event that they declare their intention to
refer their differences to arbitration first before taking
court action, this constitutes a condition precedent,
such that where a suit has been instituted prematurely,
the court shall suspend the same and the parties shall
be directed forthwith to proceed to arbitration. [...] A
court action may likewise be proper where the
arbitrator has not been selected by the parties. [Chung
Fu Industries v. CA, G.R. No. 96283 (1992)]
1. Jurisdiction
EXCLUSIVE AND ORIGINAL JURISDICTION
OVER UNRESOLVED GRIEVANCES
a. interpretation or implementation of the CBA [Art.
274]
b. interpretation or enforcement of company
personnel policies [Art. 274]
c. violations of a CBA which are not gross in
character (gross being flagrant and/or malicious
refusal to comply with the economic provisions of
[the CBA]) [Art. 274]
Note: Gross violations of the CBA shall mean flagrant
and/or malicious refusal to comply with the economic
provisions of such agreement.
Termination Cases: Plenary Jurisdiction of
Voluntary Aritrator vis-à-vis Labor Arbiter
Termination cases arising in or resulting from the
interpretation and implementation of CBAs and
interpretation and enforcement of company personnel
policies which were initially processed at the various
steps of the plant-level Grievance Procedures under the
parties' CBAs fall within the original and exclusive
jurisdiction of the VA;
If such is filed before the LA, these cases shall be
dismissed by the LA for lack of jurisdiction and referred
to the concerned NCMB Regional Branch for
appropriate action towards an expeditious selection by
the parties of a VA or Panel of Arbitrators based on the
procedures agreed upon in the CBA. [Policy Instruction
#56 (April 6, 1993)]
Even if the specific issue brought before the arbitrators
merely mentioned the question of “whether an
employee was discharged for just cause,” they could
reasonably assume that their powers extended beyond
the determination thereof to include the power to
reinstate the employee or to grant back wages. In the
 U.P. LAW BOC LABOR RELATIONS
same vein, if the specific issue brought before the
arbitrators referred to the date of regularization of the
employee, law and jurisprudence gave them enough
leeway as well as adequate prerogative to determine the
entitlement of the employees to higher benefits in
accordance with the finding of regularization. [Manila
Pavilion Hotel, etc. v. Henry Delada, G.R. No. 189947
(2011)]
Other Labor Disputes
Art. 275. Jurisdiction Over Other Labor
Disputes. – The VA or panel of VAs, upon
agreement of the parties, shall also hear and decide
all other labor disputes including ULP and
bargaining deadlocks.
Art. 274. Jurisdiction of Voluntary Arbitrators or
Panel of Voluntary Arbitrators. – The
Commission, its Regional Offices and the Regional
Directors of the DOLE shall not entertain disputes,
grievances or matters under the exclusive and
original jurisdiction of the Voluntary Arbitrator or
panel of Voluntary Arbitrators and shall immediately
dispose and refer the same to the grievance
machinery or Voluntary Arbitration provided in the
Collective Bargaining Agreement.
Art. 224 (c). Jurisdiction of the Labor Arbiters
and the Commission. – Cases arising from the
interpretation or implementation of CBAs and those
arising from the interpretation or enforcement of
company personnel policies shall be disposed of by
the LA by referring the same to the grievance
machinery and VA as may be provided for in said
agreements.
Option – Voluntary Arbitration
Art. 278 (h). Strikes, Picketing and Lockouts. –
Before or at any stage of the compulsory arbitration
process, the parties may opt to submit their dispute
to voluntary arbitration.
Summary of Arbitrable Issues
a. Interpretation or implementation of the CBA [Art.
274]
b. interpretation or enforcement of company
personnel policies [Art. 274]
c. violations of a CBA which are not gross in
character (gross being flagrant and/or malicious
refusal to comply with the economic provisions of
[the CBA]) [Art. 274]
d. all other labor disputes including ULP and
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bargaining deadlock, if the parties agree [Art. 275]
e. Wage distortions arising from application of any
wage orders in organized establishments [Art. 124]
f. Unresolved grievances arising from the
interpretation and implementation of the
productivity incentives program under RA 6971
[Book V, IRR Rule XIX. Sec. 4]
In general, the arbitrator [“VA”] is expected to decide
those questions expressly stated and limited in the
submission agreement. However, since arbitration is
the final resort for the adjudication of disputes, the
arbitrator can assume that he has the power to make a
final settlement. [...] [The VA has] plenary jurisdiction
and authority to interpret the [CBA] and to determine
the scope of his [or her] own authority. [...] Subject to
judicial review, this leeway of authority [and] adequate
prerogative is aimed at accomplishing the rationale of
the law on voluntary arbitration – speedy labor justice.
[Goya, Inc. v. Goya, Inc. Employees Union-FFW, G.R. No.
170054 (2013)]
2. Procedure
Art. 276. Procedures. — The Voluntary Arbitrator
or panel of Voluntary Arbitrators shall have the
power to hold hearings, receive evidences and take
whatever action is necessary to resolve the issue or
issues subject of the dispute, including efforts to
effect a voluntary settlement between parties.
All parties to the dispute shall be entitled to attend
the arbitration proceedings. The attendance of any
third party or the exclusion of any witness from the
proceedings shall be determined by the Voluntary
Arbitrator or panel of Voluntary Arbitrators.
Hearing may be adjourned for cause or upon
agreement by the parties.
Unless the parties agree otherwise, it shall be
mandatory for the Voluntary Arbitrator or panel of
Voluntary Arbitrators to render an award or decision
within twenty (20) calendar days from the date of
submission of the dispute to voluntary arbitration.
The award or decision of the Voluntary Arbitrator
or panel of Voluntary Arbitrators shall contain the
facts and the law on which it is based. It shall be final
and executor after ten (10) calendar days from
receipt of the copy of the award or decision by the
parties.
Upon motion of any interested party, the Voluntary
Arbitrator or panel of Voluntary Arbitrators or the
 U.P. LAW BOC LABOR RELATIONS
Labor Arbiter in the region where the movant
resides, in case of the absence or incapacity of the
Voluntary Arbitrator or panel of Voluntary
Arbitrators, for any reason, may issue a writ of
execution requiring either the sheriff of the
Commission or regular courts or any public official
whom the parties may designate in the submission
agreement to execute the final decision, order or
award.
[Rule XI, Book V, IRR]
Hearing
All parties to the dispute shall be entitled to attend the
arbitration proceedings. The attendance of any third
party or the exclusion of any witness from the
proceedings shall be determined by the VA or panel of
Vas. Hearing may be adjourned for cause or upon
agreement by the parties.
Days to render an award/decision
Unless the parties agree otherwise, it shall be mandatory
for the VA or panel of VAs to render an award or
decision within 20 calendar days from the date of
submission of the dispute to voluntary arbitration.
Form of award/decision
The award or decision of the VA or panel of VAs must
state in clear, concise and definite terms the facts, the
law and/contract upon which it is based.
Finality
It shall be final and executory after 10 calendar days
from the receipt of the copy of the award or decision
by the parties.
Execution of award/decision
Upon motion of any interested party, the Voluntary
Arbitrator or panel of Voluntary Arbitrators or the
Labor Arbiter in the region where the movant resides,
in case of the absence or incapacity of the Voluntary
Arbitrator or panel of Voluntary Arbitrators, for any
reason, may issue a writ of execution requiring either
the sheriff of the Commission or regular courts or any
public official whom the parties may designate in the
submission agreement to execute the final decision,
order or award.
Costs
The parties to a Collective Bargaining Agreement shall
provide therein a proportionate sharing scheme on the
cost of the voluntary arbitration including the
Voluntary Arbitrator’s fee. […] [Art. 277]
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Voluntary Arbitrator's Fee
[…] The fixing of the fee of the Voluntary Arbitrators
or panel of Voluntary Arbitrators, whether shouldered
wholly by the parties or subsidized by the special
voluntary arbitration fund, shall take into account the
following factors:
a. nature of the case;
b. time consumed in hearing the case;
c. professional standing of the voluntary arbitrator;
d. capacity to pay of the parties;
e. fees provided for in the Rules of Court [Art. 277]
3. Remedies
Motion for Reconsideration
The absence of a categorical language in Art. [276] does
not preclude the filing of a motion for reconsideration
of the VA’s decision within the 10-day period. [Teng v
Pahagac, G.R. 169704 (2010)]
Appeal
The decision of a Voluntary Arbitrator or panel of
Voluntary Arbitrators is appealable by ordinary appeal
under Rule 43 of the Rules of Civil Procedure directly
to the Court of Appeals. [AMA Computer College-Santiago
City, Inc. v. Nacino, G.R. No. 162739 (2008)]
But See: Guagua National Colleges v. CA, G.R. 188412,
Aug. 28, 2018, the 10-day period under Article 276 of
the Labor Code refers to the filing of a motion for
reconsideration vis-à-vis the Voluntary Arbitrator's
decision or award, while the 15 days is the period to file
petition for review under Rule 43 of the Rules of Court.
(Note: The Guagua case of Aug. 2018 decision
however is beyond the cut – off date of June 30,
2018 for the 2019 Bar Exam)
 U.P. LAW BOC LABOR RELATIONS
J. Prescription of Action
1. Compensation
Art. 207. Prescriptive Period. – No claim for
compensation shall be given due course unless said
claim is filed with the System [SSS or GSIS, as the
case may be] within three (3) years from the time the
cause of action accrued. [As amended by Sec. 5,
Presidential Decree No. 1921]
3 years from the time the cause of action accrued
2. Money Claims
Art. 306. Money claims. – All money claims
arising from employer-employee relations accruing
during the effectivity of this Code shall be filed
within three (3) years from the time the cause of
action accrued; otherwise they shall be forever
barred.
All money claims accruing prior to the effectivity
of this Code shall be filed with the appropriate
entities established under this Code within one (1)
year from the date of effectivity, and shall be
processed or determined in accordance with the
implementing rules and regulations of the Code;
otherwise, they shall be forever barred.
Workmen's compensation claims accruing prior to
the effectivity of this Code and during the period
from November 1, 1974 up to December 31, 1974,
shall be filed with the appropriate regional offices
of the Department of Labor not later than March
31, 1975; otherwise, they shall forever be barred.
The claims shall be processed and adjudicated in
accordance with the law and rules at the time their
causes of action accrued.
The Labor Code has no specific provision on when a
monetary claim accrues. Thus, again the general law on
prescription applies. Art. 1150 of the Civil Code
provides that, “The time for prescription for all kinds
of actions, when there is no special provision which
ordains otherwise, shall be counted from the day they
may be brought.”
The day the action may be brought is the day a claim
started as a legal possibility. In the present case, the day
came when petitioner learned of Asiakonstrukt’s
deduction from his salary of the amount of advances he
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had received but had, by his claim, been settled, the
same having been reflected in his payslips, hence, it is
assumed that he learned of it at the time he received his
monthly paychecks. [Anabe v. Asian Construction, G.R.
No. 183233 (2009)]
3. Illegal Dismissal
Art. 1146, Civil Code. – The following actions
must be instituted within four years: Upon an
injury to the rights of the plaintiff; Upon a quasi-
delict;
However, when the action arises from or out of
any act, activity, or conduct of any public officer
involving the exercise of powers or authority
arising from Martial Law including the arrest,
detention and/or trial of the plaintiff, the same
must be brought within one year. [As amended by PD
No. 1755, Dec. 24, 1980.]
4 years from dismissal
In illegal dismissal cases, the employee concerned is
given a period of four years from the time of his
dismissal within which to institute a complaint. This is
based on Art. 1146 of the New Civil Code which states
that actions based upon an injury to the rights of the
plaintiff must be brought within four years. [Victory
Liner, Inc. v. Race, G.R. No. 164820 (2007)]
4. Unfair Labor Practice
Art. 305, LC. – Offenses penalized under this
Code and the rules and regulations issued pursuant
thereto shall prescribe in three (3) years. All unfair
labor practice arising from Book V shall be filed
with the appropriate agency within one (1) year
from accrual of such unfair labor practice;
otherwise, they shall be forever barred.
1 year from accrual of such ULP.
Art. 258. Concept of unfair labor practice and
procedure for prosecution thereof –
No criminal prosecution under this
Title may be instituted without a final
judgment finding that an unfair labor practice
was committed, having been first obtained in the
preceding paragraph. During the pendency of
such administrative proceeding, the running of the
period of prescription of the criminal
offense herein penalized shall be considered
interrupted: Provided, however, that the final
 U.P. LAW BOC LABOR RELATIONS LABOR LAW

judgment in the administrative proceedings shall

not be binding in the criminal case nor
be considered as evidenceof guilt but
merely as proof of compliance of the
requirements therein set forth.

5. Offenses Penalized by the

Labor Code and IRR Issued
Pursuant Thereto
Art. 305, Civil Code. – Offenses penalized
under this Code and the rules and regulations
issued pursuant thereto shall prescribe in three (3)
years.

3 years, except ULP.

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